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Comment by partiallypro | Hacker News Reader

How is this not normal? Amazon offers great services, both for consumers and through the cloud. It makes total sense that their stock would continue to increase as more and more people use their services. Bezo's owns a lot of Amazon stock...so his wealth goes up. It's no different than with Gates or Jobs. Gates has just sold off a lot of his stock or donated it, and like with Jobs, had a lower ratio of stock ownership than Bezos. This is no different that any other time in period of company holdings.

Amazon certainly has its problems, and I'm a critic of it a lot...but they still offer services that are generally good for consumers, and that is something that drives its growth.

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Bezos has about the net worth of the #2 and #3 richest people combined. The median wealth in North America is less than $500k per adult. North America is where it's highest. Bezos has over 400,000 times the net worth of the average North American adult. Nothing about this is normal.

What is “normal”? Can you define normal?

Productivity in many fields certainly seems deeply exponential, so why shouldn’t compensation be?

I think his work with Amazon though has done well more than 400,000 times for society what the average person has done.

His work, personally? Not his executive team, not his engineers, not the warehouse workers making $15/hour, the work of Jeff Bezos and only Jeff Bezos?

if it was only Jeff Bezos he would be worth more than a Trillion.

Jeff started it, and did efficiently, so that he didn't had to sell out to too much VC. He manages one of the most efficient companies in the world. and plenty of employees have equity, I wish companies here did the same.

According to levels.fyi, an "Amazon Distinguished Engineer" (L10) is making $960,000/year. The GDP per capita in Central African Republic is $681/year. Should someone that is basically a typist, earn 10,000 as much as another human being?

I completely agree with the point you are making but calling an Amazon L10 "basically a typist" weakens your argument and is absurdly dismissive.

> The GDP per capita in Central African Republic is $681/year.

No doubt you factored in that 40% of the CAR is under 14. (And fully 60% is under 25).

The denominator also counts. And that's ENTIRELY controlled by the good folk of the CAR.

Yes, if that person's work is 10,000 times more influential? Which it probably is?

Also “someone that is basically a typist“ is so... dismissive. If I were paid for my typing I’d be broke, my most productive days are often days I type the least. I am paid for my reasoning and deduction, not my ability to type.

You’re confusing the work for the medium.

Does Stephen King deserve more per word than a courtroom stenographer?

His work personally started everything else. Without him, there wouldn't be an Amazon, and none of those other jobs would exist, and trillions less value would exist in the world.

Though to be fair, a good counterargument to what I just said is that likely something else would've existed, so it's not true that trillions wouldn't exist, just the difference between Amazon and the next best thing. And there are still plenty of good reason to tax Jeff Bezos heavily enough to make sure there is less disparity, or organize society differently to not allow such a large difference in wealth. I mostly don't agree with those arguments, but obviously there are some good ones.

What has he done that's good for society?

For example, He's built his business to be bigger while reducing the number of small businesses. Is that better for society? Why?

Honest question: What has it done for society? If Amazon dies today, there is nothing I'd miss. Nothing that makes it irreplaceable.

People have paid Beyonce > 125,000x the musician down the street. Why should tell people who want to pay her money that they're wrong and we should steal from Beyonce to give to a musician no one wants to pay? Are you saying millions of people are wrong to prefer her music over a musician? That you're smarter than all those people how they should spend their money?

Life is Pareto, theft amplifies pareto-ness (see Russian oligarchs during and after USSR)

No, this is a winner-takes-all situation. Basically, Bezos has convinced a bunch of VCs to make a pile of money so big, that they could be the winner in this market. Your Beyonce analogy makes little sense here.

What do VCs have to do with this? Amazon has been a public company for quite a while (since 1997, in fact).

Do you think Amazon "won" this market just by having more cash in the beginning?

This topic is on wealth inequality rather than amazon practices.

I am not sure where this was from but it went something like this like that:

If there was a staircase and you could take a step for each 100k networth you own. Somewhere around 50% would not be able to take a first step, rest would barely get to 10-20.

Bezos would be half way to International Space Station.

Just think about it and say its all normal and ok.

Lets go back 200 years - just because slavery is considered normal and lawful it doesn't mean its not immoral.

He could make and launch a fully working copy of the actual ISS and still be somewhere around 30-50th place.

I like to think it that way:

Imagine having a job that makes you 1 million dollars a year. Even if you didn't have to pay any taxes, someone else paid for all your living expenses and there was no inflation you would have to work for 171,600 years (yes, the same years we count from 1 A.D.) to get to the point Bezos is right now.

what is not normal is he is not paying much taxes compare to his wealth! He is selling around a $1B of Amazon shares each year and if he doesn't deduct anything he is paying 15% capital gain on it. That's 1/1000 of his net worth, I am pretty sure we all are paying way more than that. How is that fair? And also the taxes supposed to be progressive, rich supposed to pay more, our dream here is to have the rich pay as much as a teacher!

You've just discovered the problem with income taxes. A tax on labor favors capital. Good luck convincing any of your political allies that the income tax should be replaced with something more progressive.

Bernie/Warren wealth tax was a good idea in my opinion. It would increase Bezos's effective tax rate from 0.1% to 3%. Bezos's net worth still would increase every year, as the normal capital gain is 8% per year and it is much higher in Amazon.

Personally I disagree with their approach. A tax on an unrealized gain is a farce. But I do agree with the sentiment. Alternative forms of taxation need to be introduced.

If fair market value goes down, do they get to claim an unrealized loss too? Seems like the tax is more a tax on market whims than anything.

Wealth taxes are horrible because they'd require doing a balance sheet to determine all your assets. Things like pricing all your collectibles accurately or determining the present market value of art pieces is a huge pain in the ass. It's also really nasty having fines if the government disagrees on your assessment of values. You'd have issues like the government suing people over mispricing the pokemon cards shut away in their basement where 1st edition charizards are now worth $55,000. Doing a balance sheet every year for taxes really sucks. Income is much simpler to calculate and adjust. It might make sense for wealth above a huge magnitude but at that point it becomes a very small % of government revenue and not something that replaces income tax or truly affects the balance between capital and labour.

There are also nasty effects with start-ups stocks or options that may be worth quite a lot of money but you may not be permitted or be heavily restricted in selling the stock even if you execute the options. There may still be a possibility of the stock going to zero leaving you with a large tax bill and no value in assets.

1. It is for people with net worth above $50M. I don't think most of that net worth is pokemon cards! 2. Yes it might be a little bit harder. 3. " it becomes a very small % of government revenue" Tax is about fairness not how much money we can raise from it. 4. this is in top of income tax for high worth individuals. 5. on unliquid assets like startup options, maybe you can pay your tax with those stocks. If it went to 0, you didn't pay any additional tax, if it appreciated government(all of us) would make something on it too.

It is hard and not perfect, but we can't have everything based on income for high net worth people, they won't pay their fair share and keep getting richer and richer.

What's the issue? amazon pays taxes in multiple ways, what's left it goes into amazon stock value.

I think it's perfectly fine to only pay the tax once you sell, why should you keep paying a tax just for owning? With his portfolio, his salary wouldn't be able to cover a a simple 1% annual tax.

Now the issue is USA capital gain tax being lower than dividend tax, that's completely bonkers and encourages ridiculous uses of buybacks (which amazon has never done).

The capital gain tax should be the same as dividend tax

First: I think the tax situation with capital gains is not fair or warranted, and that we should tax long-term capital gains like regular income instead of having a separate 15% rate for it.

That said, your assertion is not true. 15% is higher than the effective tax rate of 10.5% paid by the average single teacher in the US:

Average salary: $60477 [0]

Standard Deduction for single filers: $12400.

10% bracket for $0 through $9,875 == $988 tax. 12% bracket for $9876 through $40125 == $3630 tax. 22% bracket for $40126 through ($60477 - $12400 - $40125) == $1749 tax.

This totals $6367, which is 10.5% of $60477. Less than 15%.

The numbers are different if the teacher is married, has children, interest, etc.

We can discuss whether it's fair. I said above, I think it's not; there's a "minimum overhead" to living in the US that takes up a much larger fraction of $60477 than $1B, regardless of lifestyle. But people act like Bezos et al are just not paying as much as regular people, and it's just not true. $150M is more in absolute terms, and in many cases relative terms as well.

[0] http://www.nea.org/home/74876.htm

Why does even capital gains have a different tax rate from dividend. I would fix that first.

I'm not an economist or finance person, so I don't know why we really ended up where we are. I think a lot of people in this thread, and most of the non-investment-wealthy people in the US, would say it's because of lobbying and so forth to let the rich get richer. That may be true. But I am open to the idea that research and modeling points to this being good overall even if it appears to be (or: is) unfair to 'average' Americans.

I'd like to see some (comprehensible to a layperson) discussion about what would happen if all income - wages, tips, gifts, inheritance, interest, dividends, capital gains, etc. etc. - was treated dollar for dollar equally from a tax perspective. I don't understand why it couldn't be, or why it shouldn't be.

"Bezos et al are just not paying as much as regular people" they are not! they might pay more at the $ value, but not more of their net worth. If you are making $100k and pay at least $20k in taxes, your net worth should be $20M to be in the same bracket as Bezos!

That Amazon, Facebook, Apple, Microsoft and other tech giants have become so big, is because competition is not always possible and free-markets do not regulate themselves. How can anyone compete with Amazon in its present form with hundreds of giant distribution centres worldwide? How can I create a competitor to Facebook and get even one person interested, if the other one billion are still on Facebook? How can I produce a competitor for the iPhone and get millions of apps ported?

No position is so strong as it seems.

Remember Yahoo, Nokia, Motorola, Kodak. Invincible leaders at some point.

Look at today's Intel or Boeing decline. Apple is also not as nearly as strong as it seems. There is Android competition in software and many bigger brands in hardware.

Things can change anytime even without a regulation.

Another classic case: the fall of the USSR. Gorbachev's Peristroika was not meant to collapse the country. It was meant to open the country up and grow its economy, much like what China did. Neither the leadership of the USSR nor apparently US or NATO intelligence thought the USSR was about to collapse.

I personally think the US is much closer to collapse and fragmentation than anyone would suspect. If a time traveler told me I'd be living the Pacific States of America (PSA) in 2035 and that this new nation would maintain a NATO-like alliance with Canada and Mexico, I would not be terribly shocked.

Things can be more fragile than they appear and definitely more fragile than their designers and operators think.

One more non-political case that comes to mind is the collapse of World Trade Center Building 7, a building that was not hit by a plane and is a frequent topic of controlled demolition conspiracy theories. A large fire broke out in the building apparently fueled by diesel fuel that was being stored on site. That should not have caused the building to collapse, but it did. Maybe the building wasn't as strong as people thought either because of a design flaw or corners cut during construction. I once read an analysis that ended "moral of the story? If there's a large fire in a modern multi-story office building, you might want to stand back."

Justifing this pile of money by saying that there are other billionaires (Jobs, Gates, etc.) is kinda weird. I'd rather compare his with the median wealth of Amazon's employees. Makes for a way more interesting discussion.

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