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The wealth taxes being talked about, broadly, would impact people with wealth of tens of millions of dollars and above. But PG talks about what they would "mean in practice for a startup founder." Already he's made a clever rhetorical move and conflated startup founders (a large group) with very successful startup founder (a much much smaller group), in attempting to broaden the people who look like they're impacted directly by his argument.

Over the medium-long term, I think any countries that don't implement a wealth tax (or some other way of addressing wealth inequality) will not remain developed countries.

PG uses 'stock' throughout the essay as opposed to 'wealth', and I believe he did so on purpose; he's appealing to emotion. Startup founders care a great deal about control and ownership, more so than wealth in the abstract. Look later as well - "And at 5% this threshold is getting asymptotically close to being an upper bound on how much of the company you get to keep." - he's directly talking about ownership/control rather than simple wealth.

Yes, this is obviously true. But again, PG's phrasing here is key; he's making it seem like you'll have only 55% of what you start with, which isn't remotely true. It just means your wealth compounds at a lower rate. Much less impactful, clearly.

Maybe. A wealth tax on its own doesn't solve this, you also need to sort out tax havens. And again, you need to look at the real cost of these people leaving - if a billionaire moves away (instead of paying a wealth tax) what does that cost us?

One could perhaps argue that billionaires moving to other countries (and therefore taking their political lobbying that creates environments where becoming a billionaire is possible) might be a net gain for the country losing the billionaires. As other people have said in one form or another, becoming a millionaire is a reason for celebration, but billionaires are policy failures.

> Your second point isn't really relevant for a founder who can choose between one developed country with a wealth tax and another one without.

This is an incredibly simplistic take.

When choosing a USA with a hypothetical wealth tax versus other existing countries, the contrasts are far larger than just a wealth tax. The USA has increasingly bad health/medical costs, university tuition costs, cost of living in affluent areas, deteriorating infrastructure, political strife, etc. It's important to talk about this hypothetical wealth tax as a weighted component of all of the likely decision points.

> Your second point isn't really relevant for a founder who can choose between one developed country with a wealth tax and another one without.

I can't get why many who advocate against a wealth tax are afraid of raising a single penny on a billionaire amid the fears of scaring him off the country. This is really a bad refuse of Reagan politics that hasn't proved to be true. Moving wealth around while bypassing capital controls is expensive. Relocating a whole business is even more expensive. And if someone really wants to do it to make sure that they don't pay taxes on their billionaire wealth, then they're welcome to go - a developed country has plenty of talent to replace them, and in many cases there will be one less lobbyist to keep inequalities high and politics hostage of his own interests. Lots of taxes have been raised on low-earning classes in the past decades without the blink of an eye, but as soon as someone proposes a tax on the rich some people cry out against the exodus of billionaires.

> Suppose you make $1 billion, and you earn zero interest on it. The wealth tax takes away 45.3% of that over 60 years. Suppose you make $1 billion and compounded interest at 4% would increase it to $10.5 billion over the course of 60 years. The 1% wealth tax still takes away 45.3% of that over 60 years, leaving you with 54.7% of the $10.5 billion. Multiplication is commutative.

Taxation on real estate isn't that different. As an house owner I pay every year a tax that is proportional to the value of my house. Sure, if I look at how much the tax compounds over 60 years I may get scared, but on a yearly basis I can barely feel its impact on my finances. And I consider it a fair tax as well - having a house in the middle of Amsterdam is a privilege, and I feel that it's fair to pay for my privilege and redistribute that money back to society. I don't get how someone sitting on a $1 billion wealth may consider a $10 million tax unsustainable. A large house, a yacht, $1 billion shares in a company or a luxury car are privileges reserved for few, and it's unfair to just let those few sit on such wealth while the government every year has to raise money from those who earn much less. That inevitably ends up with most of the wealth is accumulated in the hands of few, and that's a scenario that society should avoid at all costs.

> And I consider it a fair tax as well - having a house in the middle of Amsterdam is a privilege, and I feel that it's fair to pay for my privilege and redistribute that money back to society.

I don't think that you are paying your fair share, because I am not able to own a house in the middle of Amsterdam, and I think that the wealth gap between us is too big. Your cushy privileged lifestyle is unfair and you should pay more. Consider giving away four fifths of your remaining earnings left after your monthly bills.

A wealth tax shouldn't be designed in such a way that everyone has the same access to the exact same things. It should be designed in a way that removes or lowers the barriers for accessing those things, and gives more people the opportunity to access those things.

On one extreme you have a wealth tax that ensures that everyone has the exact same access to everything - that degenerates in a communist regime where nobody can get richer than another and people don't really have any incentives to be more productive than others.

On the other extreme you have no wealth tax at all - that degenerates in the American plutocracy and anarcho-capitalism, where a tiny fraction of the population owns most of the wealth, can swing elections in whichever direction they like, can make sure that politicians never charge a penny on them, and where the GINI index is at the same levels as it was in 1929 and the intergenerational earnings elasticity is so low that basically the family where you are born determines how much you're going to earn, regardless of your merit.

Between these two extremes there's a wide spectrum of wealth tax rates that you can apply to redistribute wealth and opportunity in a fairer way and find the best trade-off between meritocracy and equality. "Wealth tax aims to make everyone earn the same" is pure bullshit. "If you don't tax the billionaires then they will invest more and the wealth will trickle down to the population" is also another piece of utter Reaganist bullshit. It's time to admit these simple truths, because I'm honestly getting sick of people concluding "a wealth tax is communist" without even considering how wide the spectrum between the two extremes actually is, and I'm starting to question their actual intelligence.

I'm concerned about your particulr privilege here, why should I care about people who are wealthier than you, it's you who can take care of that, isn't it? It's a race to the bottom after all. If you claim that billionaries should not exist, I definitely claim that you are not allowed to own a house in the middle of Amsterdam (I think you should start by moving to Diemen, then we'll let you know if that's enough), and I definitely claim that you shouldn't be wealthier than an average citizen of, let's say, Bangladesh. It definitely will lower the barrier for them. By the same standard that you apply to billionaires. Your arguments about two extremes and how the tax should be designed to not affect your lifestyle specifically is no less a pure bullshit coming from a privileged virtue-signalling and comfortably-living european.

On the fourth point, the distinction is material. A bystander may feel bad for the founder if their wealth drops from $1B to a mere $550mm. But the bystander is unlikely to feel bad for the founder if their wealth only rises, naturally, to $5.5B or so.

If the real (ie inflation adjusted) rate of growth of capital is greater than the wealth tax, the wealth tax does not cause _actual loss_ to the wealthy.

The nature of the psychology of loss aversion means the distinction between "loss" and "reduced gain" matters. The loss may sting enough to cause the founder of move, but reduced gain will only matter if it prevents them from achieving a material goal.

Of course all "developed" countries (i.e. countries with the high levels of education, health, and safety that can support development of high-margin industries) will institute a wealth tax. And, for the lucky ones that thrive without one, they'll eventually adopt it, too.