You Are Jeff Bezos
direkris.itch.io
direkris.itch.io
>Here's where we get into the dicey business of what "personal worth" is, and how that translates to taxable income.
>Answer: It usually doesn't, because rich people are master frauds and charlatans who exploit loopholes in tax code to avoid paying their fair share.
>Jeff Bezos is worth $156 billion? You're using the top tax bracket of 37% and paying out $57.72 billion of that. You'd pay 99%, but then this would be a very short simulator.
That's not how it really works, right? He's supposed to pay tax on income not on wealth.
Yes. That’s the trap most of these arguments for taxing the rich fall into under the current system. Having money and making money are taxed differently.
If you own a house and all of your neighbors sell theirs at a 30% markup, should you pay taxes on making $300,000 (for a 1mil house) this year? Maybe … seems kinda unfair though. You didn’t participate in those transactions and made no money to pay the new taxes with.
Should wealth be capped? Dunno, maybe. It would solve a lot of problems and yet feels a bit draconian.
Should wealth be repatriated by the state? Eh no let’s not go there. Large swathes of Europe tried that in the past and it’s still causing problems.
Should “rich people” be taxed? Yeah definitely. The hard part is defining what exactly gets taxed and how. Making people sell their assets to pay taxes on those assets seems kinda weird to me.
In most places (not California) your property will likely be assessed higher and your taxes will be commensurately higher next year. Your house's increased value isn't treated like realized income, but its effect on your taxes isn't 0 either.
In California it will be assessed higher, there is just a cap in the rate of increase (lots of places have copied this though none in the US have as low a cap as California’s “lower of 2% or rate of general inflation”, and few combine their cap on increases with as low a cap on nominal property tax rates [1%] as California.)
Yes true. My point is articles about “tax the rich” prey on people not understanding this.
The narrative is that “X rich person made billions and didn’t pay the same 30% tax as you!” … no they didn’t make anything. The value of their assets went up. They might even have negative cashflow to sustain that.
For most people with a consequential net worth, that net worth is tied up in their primary residence. If its value goes up, they pay higher taxes. Even if a rental property's assessed value goes up, rent goes up.
This doesn't really apply to the ultra-rich. Unless they're real-estate billionaires, and even then I'm sure they have better tax strategies than regular people.
When the Fed only cares about inflation and doesn't care at all about wealth inequality effect of lowered velocity, you get exactly what you incentivize.
The Fed lowers interest rates. The wealthy take out loans. The wealthy buy assets with the money from those loans. The values of assets goes up. As the wealthy assets are now up, they are free to take out another loan... as all new money was just piled into markets and isn't consumed the velocity goes down, and therefore the inflation rate goes down. As the inflation rate went down... the Fed lowers interest rates.
The true way to solve this issue is by having a constant velocity of the money supply. If you don't give Congress the tools to fix the monetary system, their only option is a hack.
If Jeff Bezos net worth increases by 1 billion over a year, he hasn't realized any of the actual gains and that profit it purely on paper. If he chose to live on 1M$/year then he only has to pay 370k$ in taxes that's how it works for you and me and that's how it works for him.
Does it make sense that he paid 0$ in taxes and bought a 300M$ yacht? Absolutely not and we should find ways to close that loophole. Does it mean that we should tax wealth? Absolutely not.
I'm not so sure. Maybe we should. Wealth hording is a real issue. I'm at least open to the idea.
I agree with the rest of your comment.
The same goes for ~90% brackets. Don't want your salary to be taxed at such a high rate? Put that money into R&D or worker's paychecks.
I assume there isn't going to be an argument against companies "hording wealth."
Mm, I dunno. Why not? Maybe Apple shouldn't be sitting on a massive pile of cash which could be put to some useful purpose.
"Facebook the company" owns "Facebook the website". Are they hording wealth?
Alphabet own the Google trade mark. Are they hording wealth?
My and my colleagues decided to make a joke cryptocurrency that nobody is using.
Elon Musk want to buy our company for 10 billion $, but we don't want to sell. Are we hoarding wealth?
Let's imagine you start a company. Things are going really well and you raise tons of venture money at higher and higher valuations. In your most recent raise, you raised $1 billion at a $10B valuation and as founder of the company and owner of 20%, you are now worth (on paper), $2 billion. But this is all based on venture valuations, not what's in your bank account.
Now say we tax wealth... how do we decide what you are worth? Maybe it's $2 billion, but you have common, not preferred shares. And in any case, you may not be able to sell shares to pay those taxes because it's not a public company.
In any case, billionaires will find ways to say they are worth less. They'll buy paintings and then argue that they overpaid. They'll buy cars and yachts and claim depreciations in value. They'll invest in Romanian forests and other hard to value assets. It'll never work in practice. That's why almost no one taxes wealth and almost everyone taxes capital gains instead.
(Yes it's a complicated problem, you can't liquidate wealth like that, and obviously dropping two hundred K into everyone's bank account would probably create some weird issues. But that's a high-level overview of the problem.)
[1] https://en.wikipedia.org/wiki/File:US_Wealth_Inequality_-_v2...
[2] $60,000,000,000,000 / 300,000,000 people == $200,000 per person.
Also, one way to address the issues is to get everyone to be wealthier. "Why can't you just be richer?" seems like a weird thing to say but this is exactly what has happened over the last 100 years or so (at least for most of the world's population). This has solved many things that used to be problems but created new problems of its own.
Would a solution that makes the bottom 90% better able to afford healthcare but makes the top 10% even richer be a good thing? If not, why not?
If he takes out a loan guaranteed by his wealth, how should that be taxed?
Also, this is not as huge an issue as it was made out to be. Check out the actual income and taxes paid by some of the billionaires. It’s not clear why they would need to do the infinite loan trick on top of that.
https://www.investopedia.com/terms/i/inherited-stock.asp
Say the stock you borrow against was purchased at $10, and is now worth $100. That's a $90 increase. You get hit by a bus and die. The stocks cost for tax purposes is increased to $100 for the heirs, meaning that $90 increase is not taxed as a gain (not sure about how it's tax as inheritance).
But that doesn't prevent inheritance tax, which on a billion dollar fortune will exceed 50%. Even more if you die in places like NY or CA.
I don't understand why people want higher taxes on high income, i don't want the government to distribute that money. I rather it get distributed to the company and its employees building that yacht than adding it to the national budget.
Second and somewhat unrelated: The inequality gap is growing, shows no signs of shrinking meaningfully. The means of production are becoming more and more automated, so the owners will accumulate even more wealth while millions more lose their jobs and sources of social security. Thus, the government should ensure that the owners of the means of production are taxed to extract that accumulation and provide for the people.
>“ The inequality gap is growing, shows no signs of shrinking meaningfully. ”
You’re applying your moral model of the world universally. In reality, not everyone sees it this way.
Welcome to the world. Everyone applies their moral model to the world. If you claim you don't, then you are applying your moral model of "members of society have no obligation to help those who are inherently damaged by society" to the world.
And of course we all have our moral models. But not all of us want to forcefully impose our model onto others. To do that is narrow-minded fundamentalism.
You are imposing your moral model on the world. Your moral model is "the system works fine and anyone suffering from it should not try to alter the system in any way".
It's all based on measurable positive outcomes, rather than some theoretical idea that being eye-wateringly rich is somehow bad - morally bad, or bad for society. That idea is rooted in the old, pre-growth, pre-industrial paradigm, when all wealth was seized by force in some way. Today, some wealth is from violence, but the overwhelming majority is new money that was created out of nothing but good old human intelligence.
Here are some references backing up my idea that the system works.
Here's one focusing on the most important metric, human development: http://hdr.undp.org/en/dashboard-human-development-anthropoc...
This one is from the World Bank. You have to go into the metrics and countries. There are metrics that aren't of interest here, but some are, like access to clean cooking fuels, or electricity. But it's easy to see that most of it is pointing in the right direction. https://databank.worldbank.org/source/world-development-indi...
Here's a book about all the things that ordinarily fuel existential pessimism: https://www.amazon.com/Fewer-Richer-Greener-Prosperity-Popul...
Here's a book about how innovation progresses exponentially, and what it means for the masses: https://www.amazon.com/Abundance-Future-Better-Than-Think/dp...
Here's that classic video by Hans Rosling giving us some perspective on the progress over the last century: https://www.youtube.com/watch?v=jbkSRLYSojo
Here's another video on the same thing, by Kurzgesagt: https://www.youtube.com/watch?v=rvskMHn0sqQ
EDIT: here's another fun one: https://ourworldindata.org/human-development-index
In NYC, if you buy a condo that is worth more than 1MM, you have to pay a "mansion tax". etc
Jeff Bezos has never earned $156B in income in his life, but on paper he could by selling everything he owns. On paper at least.
It's also not working capital, it's just a personal asset - albeit unrealized gains. Taxing unrealized gains is like you paying taxes for an increase in value in the house you purchased. Until you sell the house, you may not have the money to even pay it.
You did raise a good point on equity vs working capital though, and I’m still inside the edit window so I’m going to adjust that now. Thanks!
Depends on the country.
In the US, it's just on income.
In Switzerland, for example, it's also on wealth. Well under a single percent, but still.
Wow! Someone tell congress. $20 billion is nothing to those folks. The solution was here all along!
Were it so easy...
But seriously, it creates serious ethical questions for our country. If someone is a public nuisance, has no place to go and no caretakers, no money, and the only alternative is jail, should we or should we not involuntarily commit certain people to mental hospitals or facilities to help them get clean, get counseling, and keep them off the streets?
Is it impossible to set up such a system with transparency reports, an adversarial watchdog for rights and patient advocacy, etc.?
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I'm using Firefox 93.0.
I personally took home the message that the "game" was satire and meant to contextualize Bezos' wealth. Saying that the cost of hiring 100k teachers for 4 years is a fraction of his wealth is a lot more (for the lack of a better term) impactful than saying Bezos is worth $xyz Billion. Of course, that does not mean that Jeff can write a check for $22.4B and we can address the issues with the public school system in the United States. It does, however, help drive home the point that some individuals in our society have such immense wealth that they could theoretically transform society.
I do not intend to comment on the nature of said wealth, but the game still makes good food for thought.
The problem with this way of thinking is: we've already spent this amount of money on ending homelessness. California plans on spending $4.8 billion next year [1]. HUD has a budget of around $2.7 billion [2]. In 2019, the City of New York spent $3.2 billion [3]. I haven't bothered to do a full accounting of how much we've spent on homelessness over the past 5 years, but from those three data points it seems safe to extrapolate we've spent over $20 billion. This is also in the context of the larger War on Poverty, which has spent an estimated $15 trillion since the program started in the 1960's [4]. It seems that simply throwing money at problems is insufficient.
> "The options are stark reminders of public good we forsake in refusing to redistribute wealth." - Newsweek
One could just as easily make a game that did something similar with the US government's budget. The overall budget is something like $4 Trillion. Just the annual interest payments are on the order of $250 Billion. If we had a more fiscally responsible approach to budgeting and therefore didn't have to make interest payments, according to that game we could "repair Puerto Rico," "hire 100,000 new teachers," and "end homeless in the United States." We already redistribute wealth on a grand scale.
It's also not like the wealth of billionaires is just in a Scrooge McDuck-style money vault that they swim in all day, nor are they like Smaug, holed up in a cave sitting on vast amounts of gold and precious stones. The wealth is invested in various things, which in turn serve the public good.
1. https://www.latimes.com/california/story/2021-07-16/californ... 2. https://endhomelessness.org/ending-homelessness/policy/feder... 3. https://datalab.usaspending.gov/homelessness-analysis/ 4. https://en.wikipedia.org/wiki/War_on_poverty
“What would you do if you had more money than any single human being should ever have?”
Who’s to say who should have what? What kind of dystopia are you imagining?
The only reason Bezos has money is because people give it to him, and for good reason.
There’s good and bad in everything.
I don't like that the actual content seems to present a very narrow and extremely simplified view. It reminds me of a political meme or a political cartoon.
>You eliminate homelessness in the United States. Every person living in the US now has the guarantee of a roof over their head.
>This costs you $20 billion, or a trivial 12.8% of your starting net worth. You still have $136,000,540,000.
I really really wish it was that easy.
There are 300M Americans. If 999/1,000 people say "hey, free housing is great, but I'm going to keep working" and 1/1,000 people say "hey, free housing! I can just kick back", we now have an extra 300,000 people who are on the dole (almost DOUBLE the current number of homeless).
It's still only one step above complete destitution. Most people would prefer better and would still work hard.
It's a lot easier for a person to get a job, or beat any personal issues they have if they have a stable, safe roof over their heads. You gotta give people boots so they have bootstraps to pull themselves up by.
If you can afford to keep people afloat, you should do it. The less complicated and less strings attached the more effective and cheaper is your solution.
There are people who steer the discussion to those who stay dependent. They claim that some of those are "incentivized" to do so, in other words: they are lazy and greedy. Well that's true, and it's a problem. Primarily because they can be used as an excuse and as a scapegoat to distract from the fact that capital _owners_ are extracting power and value that is generated by workers and small businesses.
What would I do if I were in that position? Be Jeff? I don't know, I'd probably be just as full of myself to believe that I deserve to be treated like a monarch and be able to buy what ever I want, while cheating my business partners, exploiting and surveilling my workers, manipulating my customers and ignoring my responsibilities as a citizen.
Power should be somewhat proportional with responsibility. I'm pretty sure it isn't, not at that scale.
To get 20B$ in actual money to pay the above-mentioned contractors, you need to sell an additional 7.4B$ in shares (to pay the taxes). Selling 27B$ of your portfolio would inevitably mess with Amazon's stock price, the value of the company would tank and now your 20B$ endeavour effectively cost you 40B$ (remember he doesn't have 136B$ in currency in a vault).
Those homes that you are building needs to have clean water and will consume electricity, this is a maintenance cost that homeless people might not be able to afford so there is a yearly price to this endeavour unless you want to go back to square one. On top of that, the grid can't handle the surge that all these new homes require, you need to scale the producing capacity. This puts an additional strain on the global supply chain, again raising your prices.
Of course the above is just one big conjecture, but the point I am trying to get across is that it is never simple when these amounts of money are involved because other constraints will emerge that will limit what you can do with your seemingly unlimited amount of money.
I think the creator is aware that stock holdings are not legally bound to the income tax rate. That's not the point of the simulation. The point is that the rich have vehicles for their wealth that normal people don't have access to. The point is also that there are pressing, permanent problems in our society that cost less to fix than a quarter of the wealth of one person in our country.
No it isn't, and that's no a self-evident assertion. Jeff Bezos is a billionaire because the company he created and led for the past 20 years is an insanely productive business. People want to own shares in his company and that is why his holdings are worth so much.
>"without underpaying or overcharging others"
This is an impossible standard to meet. In a system as massively complex and chaotic as an economy there is no way for any business to pay/charge the "right amount". Not only is the fair amount an unknown value, anything resembling a fair price is only discovered through overpaying/underpaying until prices regress to some middle ground. And then something inevitably happens in the world that necessitates finding a new value and the process begins again.
The premise being "Is there an amount of wealth one person or family can have, that is so exorbitant in comparison to the average citizen that it is unjustifiable on its face?" - and the easily marketable answer is "billionaire".
Do you think there is no moral limit to the amount of wealth one person can have in society, while millions around him suffer?
This is an intriguing premise. My personal answer is 'no'. This is because I see this as a personal value judgement and not something that can be applied as a moral standard. It is analogous to the question of taxation and what counts as "someone's fair share", because you will never get an agreement as to what constitutes a "fair share" of someone's income. We can certainly agree that people should contribute something via taxes, but we will never arrive at a satisfactory rate of fairness.
Compounding the problem is the second part of the question, "while millions around him suffer". Maybe I'm just too influenced by Buddhist philosophy, but I see suffering as an inescapable aspect of life itself. It could be said that my personal wealth, as modest as it may be for a middle class American, is of a similar magnitude of inequality to the average Burundian citizen. In practical terms, I'm basically a billionaire compared to the world's most impoverished individuals.
Now, we can argue about Jeff Bezos specifically and we can debate what percentage of his equity is by creating new wealth versus what percentage was a transfer from e.g. underpaying his workers, but that's very different than saying being a billionaire is itself morally wrong.
I'm not necessarily against that, mind you, but it's important to see that such a policy would have wide-ranging effects on the stewardship of many companies, and to think it through: if the result of the law is to force founders to sell off most of their stake to other capitalists in order to spread their "wealth", their companies could become even more immoral or exploitative as a result. I think it might be better to simply nationalize something like 0.5% of every company every year, but that may also have unforeseen consequences.
Ah yes, like any other warehouse that has kept stagnate wages for decades, but still manages to squeeze even more efficiency out of its workers, i.e. underpay, overwork, and exploit its workforce (70% of its workforce are, essentially for all intents and purposes, warehouse workers)[1].
Have you worked in a warehouse before? Have you worked at an Amazon warehouse before? Have you atleast read any of the, some may say shakey, news coverage on Amazon warehouses?
It's immoral. It's inhumane. It kills the soul, and keeps poor people with no other options in a tragic 10+ hour death march 5 days a week. There's little time or energy to find a better job, you're too exhausted from working all day to even think. Even if you could, when would you find time for an interview? There's an obvious unwritten rule within this type of work that: 1). You're not getting a day off 2). If you take a day off, management will start looking to replace you for someone more "reliable."
> This is an impossible standard to meet. In a system as massively complex and chaotic as an economy there is no way for any business to pay/charge the "right amount". Not only is the fair amount an unknown value, anything resembling a fair price is only discovered through overpaying/underpaying until prices regress to some middle ground. And then something inevitably happens in the world that necessitates finding a new value and the process begins again.
These are a very handy-wavey 3 sentences. It's not impossible to figure out whether or not you're underpaying workers. It's pretty simple: who makes up the bulk of your workforce? Are they people with options or people without? People without options will take anything.
[1] https://assets.aboutamazon.com/01/fb/29cebd144ec59269fe8ffda...
I hope people really don't believe anything like the contents of this game, but I know some do.
I don't think being a billionaire is necessarily immoral, but I definitely think it's incredibly difficult to do so without being immoral. I think the closest examples I can think of are people who weren't even trying to become wealthy - I doubt anyone whose goal was to make fat stacks of cash would, for instance, start writing young adult fiction on napkins in a pub in Britain, or start writing a voxel-based crafting game in Java. And unfortunately even these two individuals aren't remotely close to paragons of virtue.
That said, I think the biggest sin of Jeff Bezos' is just being complicit in the whole system that keeps our tax code a disaster. I would feel a lot better about the wealthy, and mega corporations, if I felt like they were appropriately paying for the community resources they use, for example:
* public universities and education that educate (and train, to some degree) their workforce * public services that cultivate the kind of safe and secure society that allows people to focus on things that aren't subsistence or physical security * infrastructure that makes their existence possible - roads their employees drive on, DMVs that their employees register their vehicles at, water systems their employees drink at both work and home, power systems that provide stable electricity, etc etc etc * And it's not just your employees, it's your customers too. If we didn't have all of the above, people would have a lot less psychological, financial, and physical safety to need anything Amazon sells. * And something that I think really goes under-noticed: the world's best-regulated, safest, most reliable, most well-understood, and most liquid securities market. Both private and public. So much goes into making all of that crap (I say this semi-affectionately as someone who used to work in the sector) work, and it's where an enormous percentage of both these companies weath both lives and came from.
I think you see where I'm going with this. All of the wealth that's generated here is entirely predicated on, and a product of, this incredible foundation we've built collectively as a society. And the bigger you are, the more wealth you generate, the more of this system you've taken advantage of in one way or another (with some of the secret sauce of these companies being that their employees and company take a relatively small amount of it, while their reach scales to so many more customers, that they disproportionately (compared to other companies) take advantage of huge swathes of the customer side of "benefiting from the social foundation".
This is the main thing that irks me. They would be nothing without all of this, and yet they can use their wealth to skirt out of paying their fair share, even though it really seems to me that paying their fair share - paying back into the system they benefitted from - is probably better for them in the long run (50+ years) as they'll have more educated employees, more stable customers, and so on. It's a giant feedback loop that they're short-sightedly intentionally not paying back into.