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Comment by ryanmercer | Hacker News Reader

They also pay way more than John Q. Public and yet only get the same amount of access to what taxes fund (police, fire departments, public schools, roads, military protection, etc). I make about 36k USD a year, in 2020 Beos sold at least $4.1 billion worth of shares, if he paid 1/10th of 1% of that as taxes he paid more in taxes than I will gross in my entire life.

The whole situation stinks because many do have more money than they can realistically ever spend, so your gut reaction is "make 'em pay" but on the other hand, some of them pay more taxes in a year than I do in my lifetime so they're already contributing an order of magnitude or more than I am.

The only thing that ever "makes sense" to me when trying to make it "fair" is a federal sales/service tax replacing the vast majority of taxes. This still isn't perfect but, at least to me, it makes way more sense than the way taxes currently work in the United States.

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> They also pay way more than John Q. Public and yet only get the same amount of access to what taxes fund (police, fire departments, public schools, roads, military protection, etc).

Well the government also enforces contracts and your claims to property. The amount this helps you is obviously proportional to your wealth.

Ding ding ding. It's amazing the number of people who think that private property is this "natural right" and then goverment comes and "steals" part of it, when in fact the institution of private property and its enforcement is precisely what the state does, without which your company wouldn't exist! This means courts, legislature, law enforcement, an army. Even more generally: your company ultimately only exists because the country provides you with a stable environment and millions of well-fed people with money kn their pockets to spend at your company.

So you actually have a lot to pay society/the state back for! I'm very partial to a georgist/mandatory public shares approach because of this.

Sales / service taxes disproportionately hit the poor. We don’t need poverty to be more expensive than it is.

A policeman enforcing property rights generates a lot more value for the guy who owns the property.

> so they're already contributing an order of magnitude or more than I am

My friend's gma passed away, giving him $500k inheritance. He invested that money at the bottom of the crash last year and increased it to $1.2m.

In this situation, how did he contribute $700k of value?

Well not to put a dollar value on the contribution but he gave companies $500k in accessible capital which they used to grow or recover.

you know how the stock market works?

Can you explain it? My understanding is they bought the stock from another investor, held on to it, and then sold it. I'm not sure where the value was created.

Maybe if the company was creating more shares and the investor bought them directly from the company, then the company use the new funding to create value, but I'm not sure that is what actually happened.

It's not that simple. Buying $500k of stocks does not mean you gave $500k to a company to use unless the stocks were bought directly from them. More likely it was bought from another investor with cold feet, and at best the company benefited from the increased stock price generated by the demand.

Yeah but the reason companies are able to raise as much money with stock issuance is the promise of liquidity thus providing liquidity is valuable.

This example isn't a problem either. Someone made 700k at the cost of someone else, likely an over-leveraged players who were forced to liquidate because of the threat of the pandemic. The market is far from efficient and the swings in prices are unavoidable. Normal long term investors didn't lose much if anything during this crash. The government got a cut because of money changing hands. If anything one could ask why is the government getting anything if no value was created.

The problems people have with the rich are that there are 2 ways you can make money:

A/ sell time

B/ buy/sell assets

One of these is heavily taxed, the other is not.

One of these produces value to society and the other does not. I acknowledge that some "time sellers" don't produce value, but _on average_ most time sellers are producing something positive.

You can ask the same question of someone who invested $5 and got $12.

Nominally, by providing capital to companies innovating in the market, allowing them to improve their business and provide more value to their customers.

> by providing capital to companies innovating in the market

Only if he's buying an IPO or angel investing or whatnot.

If I buy an Apple share right now, Apple's not getting that money.

Putting more money into the stock market raises the prices of stocks, allowing companies to raise more capital.

One person is putting money into the market at the same rate someone is taking money out. Buy and selling doesn't inherently raise the price of a stock.

Apply already got "that" money. Future value works both ways.

Classic example of justifying a thing with the thing itself. The reason companies need the wealthy to innovate and invest is precisely because capital and credit is privatised. So in effect you're saying people deserve a reward for private capital because capital is private. x) Regardless of your feelings about this, the argument is unsound.

There are several benefits that the wealthy generally take advantage of that the average person does not. Three big ones are:

1. An educated workforce 2. Enforcement of private property 3. Bailouts and junk bond purchases

Most businesses benefit from a workforce which they do not need to pay to "produce", but merely hire at an hourly rate.

Private property is only really possible in a system that allows it, otherwise might = right, and we would be talking about the 1% with the biggest biceps.

My pet solution is a wealth tax. For those who argue that wealth is hard to trace, see point 2, the system can be designed to allow only declared private wealth.

Is the easiest way to implement a “wealth tax” just higher inflation?

Not really because ideally you want to exempt the first say 1 or 2 million from the tax.

>>work force

If you want to tax that why not payroll tax?

>>Enforcement of private property

Land value tax?

>>Bailouts

While they are people benefiting from that it's people in specific industries and/or connections to politicians. Your average 1%'er is not in position to benefit. We can all agree though that bailouts are bad but it's not a tax problem is a problem with a flawed system that induces a lot of short term pain if a given company fails and politicians being able to convince the public bailouts are necessary.

> so they're already contributing an order of magnitude or more than I am

Are they _really_ doing that? I don't like how hoarding assets is seen as 1000x more contributing than someone working 8 hours a day.

You don't think the guy that buys the factory that a thousand people work in contributed more? He should get $10/hour for laying out a couple billion?

If all I have is $10, spending $5 on something risky and losing it is a tragedy.

When I have $1bn and I spend $5 million x 100 risky investments, then losing $500 million means that I, my children, grandchildren, great-grandchildren will still be richer than the top 10% in even the most developed country.

At some point the whole risk-reward shtick breaks down.

This is why the pat answer of "capital is rewarded for taking risk, that justifies their pay" doesn't ring true to me. Your downside is... still being rich and never, ever having to work if you don't want to? Hot damn, give me some of that risk!

What have they done except have money in your example? Why should they get anything?

Classic example of justifying X with X (justifying capitalism inside the framework of capitalism).

How did he amass that billion in the first place? By contributing 1000x, or just because the capitalistic society rewarded him more for his efforts than some other workers earlier in his career?

More likely than not he/she inherited it. It's true for the vast majority of multimillionaires, from royals and aristocrats (obviously) to the Waltons/Rockefellers/Rothschilds/Abby Johnsons of this world, to the Chinese Party Princeling, to the 2nd generation of Silicon Valley aristocracy like Laurene Jobs & co.

why is hoarding an appropriate word to describe what extremely rich people are doing with their wealth? is jeff bezos hiding a huge company in his basement?

Because the only way to have that much in the first place is to decide "I will be keeping this, rather than using some significant portion of it to make the world a better place."

Like, for instance, by paying all Amazon workers enough, hiring enough that you don't have to schedule them so strictly that they don't have time to pee, not deliberately copying and undercutting independent products sold on Amazon...

> Are they _really_ doing that?

Yes, most are objectively paying far more taxes in terms of dollars than the average person. That is what the OP means.

> I don't like how hoarding assets is seen as 1000x more contributing than someone working 8 hours a day.

You are falsely assuming that all of these people "hoarding assets" aren't themselves working at least 8 hours a day. Additionally, if we are being real, contributing large amounts of capital to a project (i.e. investing) probably IS worth a lot more in terms of value added than 8 hours of the average person's labor.

You're missing the point. Yes, most people work 8 hours a day. Why is someone's effort worth billions more than others?

And contributing capital is worth much, yes, but that's a chicken and egg problem: how did they amass that capital in the first place, if their 8 hours work a day isn't worth billions more than other's 8 hours of work?

> Why is someone's effort worth billions more than others?

Because the output of their labor (which is largely a mix of strategic decision making, operations, and planning) adds billions of dollars worth of value in a manner that is not easily reproduced. Imagine we put thousands of the world's best devs / admins / whatever under the command of the average HN reader with a budget to match. How many of them would be able to create a company that adds anything close to the value that Amazon generates for its owners and users? Probably almost none; and that is comparing the output of Bezos to high output, skilled, educated labor that itself commands a high price. Lets now imaging putting those devs and money under the command of someone who didn't finish high school and works a minimum wage job. Do you see them creating an Amazon? There is a low supply of people who can innovate and lead well, and a high demand for high quality leadership and vision, so people are compensated accordingly.

Not buying it. If it weren't Bezos, it would be someone or something else. And I don't think Bezos' effort is worth his net worth. His output would be nill without the thousands of people actually doing the stuff.

This canard is worn and untrue. They bought the best, complicated tax system that benefits them to reap even more.

https://www.vox.com/policy-and-politics/2019/11/4/20938229/z...

Reality:

"Wealth Inequality in America" https://youtu.be/QPKKQnijnsM

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