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Comment by coldpie | Hacker News Reader

> 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.

Taxing wealth acts as an incentive to spread the shares around the company instead of hoarding them. Don't want your wealth taxed? Let the workers enjoy the fruits of their labor.

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.

The (capitalist) counter argument is that forcing people to spread wealth acts as an incentive not to innovate

This only applies in the very limited scenario where you personally own the shares. What's to stop someone from setting up a trust, shell company or similar and then giving them all of the "wealth" while maintaining a controlling interest? From there, the individual simply extracts what they need when they need to. We're basically back to the original scenario only with more steps added in between.

I assume there isn't going to be an argument against companies "hording wealth."

> 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.

Because business continuity is an important aspect of running a business. Who's to say what is hording and what is simply risk management?

A company owns a nuclear plant. Are they hording wealth?

"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?

Is it possible to either tax the individual for owning a controlling interest, or tax the trust directly as an individual?

Perhaps a law that no entity can own more than X% of a company, and outlaw hedge funds? Thinking out loud here. I wouldn't snap my finger to make it happen, but I think it's fair for the layman to questions the status quo "why do organizations exist that allow small groups of people to play the game of timing arbitrage on the market to amass billions of dollars".

In an ideal world, maybe. Problem is that measuring wealth is a very tough game.

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.

What exactly is "wealth hoarding" and why is it a problem? I keep hearing this term and realize I just tune it out because it sounds like a political slogan. I am open to understanding though just in case this is a blindspot for me.

Numbers are all super ballparky, but the top 10% of US citizens hold about $60 trillion in wealth[1]. If you redistributed that to every American equally, that would put about $200,000 into each person's bank account[2]. I think that would do a lot to alleviate things like college debt, credit card debt, and all the myriad woes that come with poverty, all without printing a single dollar.

(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.

I guess the question is whether the wealth of the top 10% is related to the issues of the rest. There are a number of possible places to get the same money (budget reallocations, corporate wealth, etc). It is not obvious to me that these 2 things are connected.

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?

Just distributing more money to people doesn’t create more resources in the real world. It just makes those resources cost more in dollar terms because more people have more money to spend on it. But the dollar value is somewhat arbitrary, doesn’t matter if it’s higher or lower just the ratio to incomes.

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