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Comment by granzymes | Hacker News Reader

> Capitalism means capital that earns for you while you sleep.

If it earns for you while you sleep then it is also taxed while you sleep. Income is income: the tax man doesn’t care where it comes from.

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That's kind of true, but also not quite true either. If you earn income from capital you are only taxed when you sell that capital. Theoretically this means that if you want to spend money on living expenses or luxuries you have to sell capital to fund your lifestyle. However the super rich can borrow money at extremely low rates with their assets as collateral, bypassing taxes and allowing their capital to keep earning for them. Also, capital gains are taxed, but at a much lower rate than ordinary income. Capital losses can also be used to offset gains, even carrying forward over many years. Imagine being able to be taxed on your average income over a period of years. I would have paid practically nothing for several years after college because I made practically nothing during college. There are all kinds of little advantages that accrue for capital but not for workers. I don't think this is necessarily bad, but it may be out of balance.

Honestly, my major problem with wealth inequality is not that rich people get to have money; it's that wealth concentration leads to power concentration. That's not healthy for democracy. This is probably extremely controversial, but I say go ahead and collect a wealth tax and then burn everything you collect. It's not about the budget, it's about limiting the power of billionaires and the corporations they control. There are probably better ways to accomplish that goal, but a wealth tax is at least a start in the right direction.

> Honestly, my major problem with wealth inequality is not that rich people get to have money; it's that wealth concentration leads to power concentration. That's not healthy for democracy. This is probably extremely controversial, but I say go ahead and collect a wealth tax and then burn everything you collect. It's not about the budget, it's about limiting the power of billionaires and the corporations they control. There are probably better ways to accomplish that goal, but a wealth tax is at least a start in the right direction.

I'm not totally convinced by this. in fact, I'd argue the opposite: wealth is the result of power, not the cause. consider jeff bezos; I'm sure we would all consider him a powerful man. is he powerful because the shares he holds are worth $200 billion (on paper), or is he powerful because he controls one of the largest companies in the world?

here's a thought experiment. suppose there was an asymptotic tax that limited net worth to a maximum of $1 billion, so jeff bezos would only have 0.5% of his current assets. how much would his power be diminished? I tend to think his status as the founder and CEO of amazon would put him in a pretty similar position.

Wealth and power are not divorced in a capitalist society. Jeff Bezos is powerful because he controls Amazon. He is also powerful because he has 200 billion dollars. He has 200 billion dollars because he owns a large portion of Amazon. If Bezos had only 1 billion dollars, he'd still have a lot of power, but much less of it. Further, the rest of his wealth could go to other good things (to the people living in the state/country or to Amazon workers, who I believe are more deserving (collectively) of it than Bezos.

Income taxation creates a bureaucratic burden with no discernible benefit. We also disproportionately tax the poor via point of sale taxes which is just mind boggling stupid.

Wouldn't wealth tax also create bureaucratic burden? I would imagine that it is much harder to determine the value of the assets of all Americans than it is to determine their income.

in a state like california, the poor already enjoy negative income tax. they derive more than they contribute in terms of services and infrastructure.

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