Jeff Bezos's gain during Covid is enough to give all his employees a $105k bonus
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An example I've been giving to people who are making the argument about billionaires making money during the pandemic is: Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill and condemns it so that it is now worthless. A week later, the city finds that they've made an error, and there is no toxic waste, so now your house goes back to being worth $300,000. A month after that, you get a tax bill in your mailbox for $100,000, 30% of your $300,000 asset gain.
Please help me steelman your argument, assuming you aren't being disingenuous.
Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC.
Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 - $12000 $8500 gain (on paper)
March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper)
To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC.
If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it.
So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it.
1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the numbers in my example: Yes 3) Is wealth inequality a giant problem in the country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No
However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.
That doesn't seem to be the case here- Amazon's (and thus Bezos's) dip in early 2020 is practically invisible compared to its growth since then March, from what I see on https://finance.yahoo.com/quote/AMZN?p=AMZN
So...
Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill- its value drops to $225,000. A week later, the city finds that they've made an error, and there is no toxic waste- and, in fact, that in doing the testing, they discovered deposits of incredibly valuable minerals on your property, so now your house is worth $450,000. A month after that, you get a tax bill in your mailbox for $45,000, 30% of your $150,000 asset gain. (These numbers are based (rounded) on the actual data.)
Now we are at dumb tweet #2. This is gains from his stock holdings. Selling all of it would mean he no longer owns any stake in Amazon. And its paper gains on a stock - it could double again in a year at which point the same people would whine that he sold too early so employees only got $100K instead of $200K.
And its price would drop as he sold it, creating an opportunity to whine about how all the regular stockholders of Amazon (who far outnumber employees) suffered at the expense of Amazon employees. Isn't that unfair too?
Maybe then we should go even broader and give it to all of the US? At which point you loop back to dumb tweet #1 and realize that would net to $500 or something per person and be completely eaten by distribution costs, inflation and landlords.
Then write an outrage piece on the landlords.
With enough envy & misunderstanding, you too can complain about how unfair everything is!
But honestly the fine details of this hypothetical cash transfer don't matter. It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head. Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
Because we are the richest humans who have ever lived. The greatest king from 400 years ago doesn't have what I have.
So, maybe us who want to structure it this way are just not selfish and don't want to kill a golden goose while pretending destroying the rich through jealousy might help the real poor.
The absurdity is subjective. As far as I personally am concerned, I could be as rich as Bezos, but I didn't put in the work and I didn't make various choices in my life, while he did. I am where I am and he is where he is, and I don't have a problem with that. I don't know that he ever broke any laws, and in my book that means he is entitled to enjoy the lawful fruits of his labor. I am truly happy to live in a country where people are not subject to confiscation of their hard earned gains because of some perceived "unfairness".
My son enjoys a lot a silly book series called "Diary of a Wimpy Kid". This series sold many hundreds of millions of copies, and most likely its author is a billionaire. He made millions of kids lough and be happy for a bit. My son can't wait for the next book, which is supposed to come out next month. If ideas like "tax billionaires 100%" were to pass, the next book would never exist.
You seriously underestimate the role of dumb luck involved at being at the center of just the right causal nexus. Not saying that he's not had to be willing to work hard. However, Don't deceive yourself into thinking Besos is somehow built of a stouter stuff than you or anyone else.
Circumstance doesplay into it A lot.
Dumb luck is winning millions at the lottery. I doubt Bezos, or Zuckerberg, or Musk, or Gates, ever did that.
What they did instead was take calculated risks. Like quitting a job at DE Shaw to start an online bookstore, at a time when online bookstores were not a thing. If you or I are senior executives at one of the most successful hedge funds in history, would we quit for a pie in the sky idea?
Well, he did, and Gates and Zuckerberg quit Harvard, and Musk went all in into rockets until he almost lost it all. The part of the iceberg that's not seen in this picture is the hundreds or thousands of entrepreneurs who risked it all and lost it all. We are on HN here, and from time to time we get a peek into the struggles of founders.
Attributing the success of various founders to "dumb luck" is lazy and disrespectful. I did not take these types of risks in my life, so I'm not rich. But I tip my hat to those who did, and got rich in the end. I could be very well be luck, but absent any evidence, I prefer to extend the benefit of doubt, and to just respect these guys for what they did in life.
Redistributing that wealth wouldn't create any more houses or food, it would only bid up their prices. For example, in the bay area, rents steadily increased as salaries did because supply of housing stayed the same. Adding more money to a system with the same amount of goods being produced does not change anything. SF has been unable to build more housing, or maintain public infrastructure, or take care of the homeless and thats all in the midst of a tech boom and tons of tax revenue. Thats evidence to me that the problems are simply not about a lack of money.
And a single share isn’t going to gain $100k.
However, a 3%-6% wealth tax (or even a basic VAT) would help redistribute wealth and fund healthcare, infrastructure upgrades, energy security. 3% is fairly modest, but definitely do-able when you're Jeff Bezos.
And we could seize all of Bezos net worth, and it would only cover a few weeks of federal spending. Of course we could push it closer to 2 months including Bill Gates, Elon Musk, and Warren Buffett, but what do we do when we run out of billionaires in a couple years?
I’d actually like see how they would run Amazon. I’m guessing we might complain even more about their data collection processes.
This is analogous to when bruce almighty grants every wins the lottery... https://getyarn.io/yarn-clip/71323533-cf3e-4176-b9f1-b22cfa0...