Coinbase lays off around 1,100 employees
coindesk.com
coindesk.com
Coinbase was also extremely generous with severance. 12 weeks plus two for every one year at the company, I think. I've had the experience of being let go without notice and without severance.
Devs seem a little more grizzled this time around, so I think this mindset is slowly becoming the norm. College grads seem skittish, but they always are.
People keep pointing to Armstrong's $110M house like it's some sort of injustice. If you think billionaires should exist at all, then that's one of the least-bad injustices imaginable. It's probably true that no Armstrong, no Coinbase, and 10% of Coinbase is the prize.
EDIT: It's actually 14 weeks: https://blog.coinbase.com/a-message-from-coinbase-ceo-and-co...
Three and a half months of dev salary is pretty incredible.
Getting laid off with zero warning and no severance can be a life-ruining event if it's at a bad time logistically in someone's life. It could be way worse. Always have your resume updated, and take interviews every now and again just in case.
Do they really tho? They rescinded offers to many foreign students on OPT visas who had turned down Ph.D programs and such, putting them in a pickle. And they did it over email.
Folks who violate social contract are called assholes. You don't go to jail for being an asshole but some folks won't want to work with you and that's okay.
You should always have an updated resume, career document, be interview ready and have an active network.
Ok, I'll admit it, billionaires should not exist at all, there should be a heavy wealth tax that makes it hard to become a billionaire. Will a CEO work less hard if he (and his peers) can only ever gain $100M in net worth before a wealth tax on assets kicks in?
He'll certainly work a lot less hard after the wealth tax kicks in.
This actually sounds better than what we have now: monopoly as the end goal.
Or set the cutoff at just above the poorest person's net worth. When they make some money they won't be the poorest any more and next year it will be updated to the new poorest person's net worth. That way we make sure everybody has a fair chance at getting rich.
Or is it possible that those who have a demonstrated history of wealth creation are actually better at it, and we're all better off if they continue to do more of it?
Many of those wealth creators you describe would get annhilated in the markets if they were on a level playing field with everyone around the world.
Let's start at a hundreds-of-millions cutoff and see how it goes.
Does someone earning more than you hurt you?
Also… do billionaires employ people? Do you want their employees to have their jobs seized from them when the johny555 tax goes into effect?
You're making bizarre nonsensical arguments here--slippery slope, strawman, etc.
So how do you decide who's scale to use?
Like the way all other murky subjects are settled, you just decide on one. We don't legalize murder just because some slayings are justified. The existence of grays areas does not preclude the black and white.
There has to be a better solution.
Sure, over successive generations, the family might lose control of their original fortune/company, but that is compatible with the intention of the tax.
edit: Just noticed that you are talking about estate taxes and I'm talking about wealth taxes...
He who owns then capital is king, so tax the capital.
But in reality it would as you say force all sorts of unwanted liquidation and monetisation of assets just to pay the tax.
But what you propose is probably better than the alternative at least.
You don't see your error?
What we're talking about here is when people like Jeff Bezos have billions of dollars of income--direct income from gains realized in asset sales, income generated from property, stock sales, salaries, etc.--we shave a significant portion of those gains off in a wealth tax.
Disclaimer: I live in a 3rd world country and my salary is 1/3 of what the standard US salary is.
YES, I do believe that everybody's compensation (including mine) who are in the top 10% of the population should be decreased/limited. Provided that their living costs are adjusted so that the $500/month get you similar standard of living to other nice places (say, Chile, Mexico, Spain, Portugal, etc).
The top 10% of the population hold 70% of the total wealth. That's just crazy and unsustainable. How the 90% of the population haven't turned on us is just sheer luck and a political, security system that is rigged in our favor.
I would be happy to be part of a "pay cut initiative" for all the top 10% earners, if it meant equalizing opportunities for everybody. I had the opportunity to grow up and be friends with poor people who just did not have the chance to succeed, so I don't believe the "poor people are just lazy" narrative. There's good hard working people that just never had a chance. Similarly how there is bad rich people that just want to leech from others.
Been sustained so far throughout all of human history.
But in the past 4 decades, I'll remind you that around 800,000,000 Chinese (that's eight hundred million people) were lifted above the global poverty line and were able to stop subsistence farming. https://www.worldbank.org/en/news/press-release/2022/04/01/l...
So to say that global inequality is getting worse, when billion+ have been lifted out of abject poverty in that time, it's not correct to me. Things were worse 40 years ago when billion+ more humans were below the global poverty line, even if today billionaires are even richer than the middle class.
Imagine you live in a neighbourhood of 50 people. Everyone starts earning more, that's absolute income increase. Then imagine your richer neighbours income has increased 100x faster than anyone else, that's income inequality.
When we get 3days work week and 4 days of „time for my stuff” we can go back to discussing that.
The ruling class will happily soak up all spare productive capacity - and as the amount of work necessary to keep someone clothed, sheltered, and fed went down, that spare productive capacity grows, and more of it flows upwards.
Landlord was lending land to peasents - rich peasents, because bottom cast did not even have a chance to talk to landlord.
For the land peasents got, they had to work for the landlord specific number of days in a week. For some time it was 1-2-3-4-5 days per week. Most common was 3 days.
Thing is - the peasent was not obligated to do that work himself. He could have sent a son, family member or even hire someone.
That way it was super easy to keep his agreement with the landlord while mostly focus on his own farm.
Who had it terrible were bottom, poor peasents that worked for other peasents.
They did not have their own land and were at mercy of their “master peasents”.
They most likely had to work whole week or 5-6 days.
They were more of a slave than a peasent tbh, but its a hard disregarded truth.
Current middle class in our times could be translated to “master peasents” back in time. Slave peasents would be the slave-wage ppl.
When I discuss or compare medival peasents to current corporation workers I always compare master peasents to corposlaves.
And master peasents had it super better than corposlaves do now.
To claim that an impoverished serf working land "had 4 days off a week" is nonsense. They worked hard af for all sunlight hours for some seasons, and had plenty of leisure in times like the winter. On average, maybe that's 4 days off, but let's not pretend that working the land is not back breaking work. It's not leisure. If you really think some 40 hour wfh coding job is harder work than farming for your life, then there's no law saying you can't buy some land and go off grid. You're welcome to subsist. Hell you could land a few million subs on youtube airing the experience, that category is all the rage these days
Well.. noone said that. If you mind reading the comment again.
But its true that peasents had a lot more time to work on their own stuff than on what master told them to do.
Either way most peasents worked for higher tier peasent because landlord often has hubdreds of hectars of land.
Exactly. Didn't really change which broad group of families were in control (some were lowered a peg through taxes for supporting the wrong side.)
>Other than that top families basically unchanged 1000 years.
So we've shifted the goalposts from "all of human history" to "in my country" and only for the past "1000 years".
No... why do you think that?
> The top 10% of the population hold 70% of the total wealth.
That's basically been the case everywhere, all the time. In other countries the 'top 10%' has changed hands through revolution, war, etc, but it's still 10% controlling 70% (or whatever) - because they take the last 10%'s 70% and carry on! No goal posts moved there.
Someone asked a separate question about revolution, and I said even that's not successfully happened where I live. I wasn't making a broader point with that answer to that question.
> "all of human history" to "in my country" and only for the past "1000 years"
I mean... are you under some sort of misapprehension that before 1000 and outside of the UK there was some kind of democratic socialist consensus? Fraid not.
Well, according to your first assertion we're not supposed to cover only your country for the past 1,000 years. We're supposed to cover all of human history - every nation, as far back as at least 10,000BCE.
> Someone came back and pointed out that it hasn't always remained that way and there have certainly been blips
The blips didn't change the ratios though. Ratios have stayed the same.
> You then responded by saying "not in my country" for the past "1000 years".
Yeah - my country hasn't really had those blips. And the blips in other countries didn't change the ratios anyway, just transferred who owned them, so it was a separate point.
> Well, according to your first assertion we're not supposed to cover only your country for the past 1,000 years.
No it was a separate comment and point!
https://www.taxpolicycenter.org/statistics/historical-highes...
Don't confuse monetary inequality with wealth inequality. Measure by the standard of living, not monetary units.
What are the actual differences between the life of the average American worker and Jeff Bezos? It's not that big. Jeff Bezos has the ability to buy luxuries most of us could never dream of, sure, but what about the essentials?
Nearly everyone can get fresh, nutritious meat, as well as fruits and vegetables. High quality milk and dairy products. Frozen goods. Bacterial epidemics are unheard of. Our recent viral pandemic increased annual deaths by about 10-15% over baseline — compare this to epidemics which used to wipe out entire populations. Life expectancy for all people, regardless of class, ranges between 2-3x human life expectancy in a state of nature (roughly 30 years). You can travel hundreds of miles in a day for only a few hours of labor worth of money. You can cross continents or oceans with a few day's of labor worth of money.
Sure, Bezos can have a fancier car with someone driving or his own jet with a pilot flying, but at the end of the day, you can both take off from LAX and land at JFK 6 hours later. You're both going to eat 2,000 calories of nutritious food. You both have running water. And, you're sitting here, both able to communicate with everyone in the world instantly.
Let's not buy into the political propaganda about inequality, the reality of the situation is right in front of our eyes.
Here are just a few massive differences between the life of the average American worker and Jeff Bezos that have nothing to do with buying luxury goods:
1. Jeff Bezos can get an audience with any Congressperson, any State governor, most countries's heads of state and probably the President of the US, with a telephone call and likely with less than 24 hours notice. That person will listen to and likely be influenced by what he says.
2. Jeff Bezos's public statements can move global financial markets.
3. Jeff Bezos can (and does) own and control mass media companies which can amplify and downplay political issues and shape the outcomes of elections.
4. Through philanthropy, Jeff Bezos can, if he wants, simply decide what counts as a "public good" to be funded and supported, as opposed to the public deciding through the democratic process. Bezos is capable of offering an amount of support for his causes that dwarfs government-funding. We are merely lucky that billionaire philanthropists have so far focused on good things like curing malaria and not on evil.
Can he?
Basically, when you remove money, something else becomes the currency you're describing. Taking away billionaires wealth might actually make it harder to identify the people who have this influence. Rather than news outlets writing articles every other day about Jeff, you'd have some shady person high up in some unelected bureaucracy getting to wield this power. How is that better?
[1] https://www.forbes.com/sites/debgordon/2021/10/13/50-of-amer...
Americans are the people who complain when the wifi goes down or someone says the wrong word.
Well, then, surely it doesn't matter if we tax away 90% of Bezo's wealth, right? His living standard will be same.
Beyond that, though, you can only tax away 90% of billionaires' wealth once. That whole game depends on them continuing to produce the same amount of wealth, even though they won't receive any of the returns. (Remember also that most of these people reinvest the majority of this money into their ventures, meaning that taking these dollars will have a compounding negative effect on future productivity.) Look at history. Your superficially benevolent idea has been tried, it always results in mass hunger and death.
Why would they keep taking on so much responsibility? To raise your standard of living? Why should they care about you?
Any of those guys are capable of becoming a surf bum, living on $30k a year, but instead, they build massive companies that deliver incredible value to the rest of us — they get their money because we pay them for that value. Would you rather incentivize Elon Musk to keep working on Tesla or would you prefer him to retire?
So you are advocating 0% taxes?
That argument (of type Econ 101/Ayn Rand) is misguided, because the world is not as envisaged by Econ 101 (or Ayn Rand, who famously enjoyed Social Security and Medicare).
Counter arguments:
1. Society has made available the gift of the limited liability company, to encourage risk taking and entrepreneurship.
2. Society has made available streets, canalisation, schools, defence, police, fire fighters, certain forms of insurance, etc., for a simple reason: market failures. Those goods would be provided in insufficient (suboptimal) number by the free market due to: strong positive externalities, non-excludability, adverse selection, and many other reasons.
For those (and many other reasons) government does have the right to taxation. The question then is the optimal level.
> Your superficially benevolent idea has been tried, it always results in mass hunger and death.
Yeah, the poor Northern Europeans, starving to death... Somewhat higher income, capital gains, estate, and maybe even wealth taxes won't result in mass starvation.
> they get their money because we pay them for that value.
Again, a neat Econ 101 idea that fails to take into account reality. "salary = marginal product" is only true under entirely idealised assumptions of perfect competition [1], in particular no economies of scale and no network effects. That is most definitely not the case for today's tech companies, which quite obviously have monopolistic tendencies, thus extraction of monopoly profit (rent) which accrues, guess to whom, the boss.
And, for what it's worth, if Elon becomes a surf bum, or twitters full time, we'll still get great electric vehicles, maybe a tad later.
[1] Here's a list: https://en.wikipedia.org/wiki/Perfect_competition#Idealizing...
> Measure by the standard of living, not monetary units.
From the paper below:
"This reflects considerably stronger global convergence in quality of life than in income"
https://www.cgdev.org/sites/default/files/technology-and-dev...
I'm not trying to be pedantic, but this comment contributes to pernicious myths about the human condition. If you're interested in this subject I would recommend the book "The Dawn of Everything" by David Graeber and David Wengrow.
But these are not the "capitalist class". They don't own significant portions of a company unless they started a small business (a lawyer or doctor running their own practice). They also generally had to go through an enormous burden to get there. A doctor for example might be nearly 40 years old with $500,000+ in debt before they're making $300k, and many doctors will never make that much, period.
The funny part of "limiting income" is that it only affects the working rich, not the capitalist class. Steve Job's salary was $1 and many CEO's famously have basically no salary and compensation in stock.
So what do you do? Tax their stock sales? We do and should do more. Force them to sell their stock for the benefit of the taxpayer? Ban them from even owning large amounts of the company? Have the government automatically own part of the company? All of these sound yikes to me.
It doesn't though. Taxing the rich, limiting the existence of billionaires is not going to do anything for equalizing opportunities.
If you think so, then please tell me the name of one efficiently-run government organization?
> If you think so, then please tell me the name of one efficiently-run government organization?
How are these two passages connected? If there's one efficiently-run government organization (there are, even in the US—benefits programs tend to be quite efficient, contrary to "common knowledge") then that proves... what? That taxing the rich would equalize opportunities? The two things have practically nothing to do with one another.
Please let this trope die. The US government is generally, and especially when it comes to welfare programs, efficient.
"It currently stands at about 25 percent, as did in the 1970s. This means the ability of the poor to sustain a higher level of income independently of transfers has not changed over time."
[1] https://www.richmondfed.org/publications/research/economic_b...
Why is government judged on efficiency rather than service?
If there's a government agency with money to give to vision impaired people, and they set up a website (graphics heavy, non-ADA compliant of course) as the only way to sign up for the payments, that department would be extremely efficient - they might only be able to reach a fraction of their target market, but they'd do so very efficiently with little overhead and they'd even have money left over since they had so few applicants, so they could cut the budget next year!
In contrast, if that same agency took $100M of their fund to set up offices across the country, and hire outreach staff to drive to the homes of qualified applicants to help them apply, that wouldn't be very efficient, but it would provide better service.
Government is not a business and shouldn't be run like one.
Basically, you're saying that the current distribution is crazy/unsustainable (and maybe it is) but the distribution is actually not totally out of whack with the 80/20 rule (or Pareto principle).
Just wondering where your confidence comes from that a functioning society doesn't actually depend somewhat on that distribution? i.e. that the general populace's sense of "fair" isn't actually correctly calibrated at this distribution?
I would argue that it's not going to collapse to 1 artist or 1 song for a similar reason that all wealth will never be in the hands of 1 person. If the rate of change (or just raw distribution) in wealth is unhealthy, that will present itself in the form of a less healthy economy.
That will likely cause a bit of a churn and redistribution to sort of self correct. There's also the fact that wealth typically doesn't survive through generations all that well. If this didn't happen, the Rockafeller's/ Vanderbilt's/ Carnagie's from the past would still have the top wealth holdings - sure they are still incredibly well off and have a huge advantage from family name, but per a Forbes list none of them are in the top 2500 wealthiest.
This is rhetoric that tries to confuse two totally different scenarios in order to convince the majority to oppose something that only hurts a tiny minority. Saying "one person should not have 5 generations worth of wealth" is not the same thing as saying "people should not make a middle class salary". They aren't even similar. If there was any place on earth where $1,000,000,000 was comparable to $500/month in any way, you might have a point.
> Does someone earning more than you hurt you?
Yes. Without a doubt. Wealth is freely convertible to and from political power, so outsized wealth translates into outsized political/lawmaking power, which affects us all.
Let's make an extreme example if you don't believe me: Should sextillionaires exist? Do you think that maybe, just maybe, someone having $1,000,000,000,000,000,000,000 might have a negative effect on other people's lives?
> Also… do billionaires employ people?
Some do, some don't. Some non-billionaires employ people, some don't. Employment was around long before billionaires. It's not a requirement.
To me, wealth should be like the speed of light. There should be a limit, and it should be increasingly harder and harder to approach (but never achieve) that limit as you get wealthier. Not sure how you'd actually implement such a Lorentzian economic speed limit, but it seems fair to me. Make the limit high enough where at 99% of it, you can have your needs and your family's needs fully met in the most expensive neighborhood on earth, or whatever.
Any cap you put on the top could have the effect of reducing the value of a currency meaning the buying power doesn't change. A billion cap would make your million dollar house worth $100. However you slice it you are poor and someone else is rich.
The problem with billionaires though is they typically make and hold their money through assets, so what we really need is a bunch of reforms on how we tax assets. Namely, it should be such that if you have more than $1B in assets, taxes eat away at it pretty swiftly until it is back down to something reasonable. I think that's something we all can get behind.
You're not making a serious point if you're looking at world income to guide policy in the USA, or any other first world country, you're just making up a strawman.
do billionaires employ people
I'm sure they have a small household staff, maybe security, yacht staff, private pilots, so maybe in the small hundreds.
But Tesla employees a 100,000 people, SpaceX employes 10,000 - both of those companies would exist regardless of Elon Musk's personal wealth. In fact, having so much wealth in one person is a liability to the company -- Musk can singlehandedly tank Tesla's stock.
This is an absurd slippery slope, and a bizarre appeal to "plenty of people" to boot. There is a significant and categorical difference between $500/mo and $1 billion. You undermine your own point by not addressing it.
In fact, if there were a wealth cap of $500/mo as you posit, it would take over 150000 years to accumulate $1 billion, which frankly only reinforces how excessive that amount of money is.
The same way most of them do now -- through venture capital firms. Or maybe if they had more tax revenue, the US government could sponsor more speculative research and companies.
I'm not talking about "Let's start a social media app for Aardvarks!" kind of ideas, but actual scientific research. We used to have pure research orgs like Bell Labs, but companies aren't funding pure research any more, so we need more investment from government. Not every idea should have a path to monetization before it's funded.
So there is the possibility the market can be made to care again.
I don't equate "skunkworks" with high risk. To me, that's not "risk" as much as "I don't care about monetization in the first place", like you're saying. I agree that research without promise of a payout is sorely missing these days.
When I say "maybe we should have less high risk", I'm thinking of fly-by-night companies that do make a social media app for aardvarks, spend a bunch of money on slick marketing so they can pump their IPO, and then pull the rug with them when they bail.
But billionaires don't become billionaires by doing skunkworks projects. They often do the latter.
And sure, you could just say "well, let's just not do bailouts then", but then that leads to things like bank closures, airline collapses, imploding automobile industries [0], etc. Basically, we can argue about specific cases, but there are some things that become too important to fail.
Ultimately, there are things that benefit society that taxes should be used to pay for. Some of those things should be done regardless of what any potential payout might be. Note that billionaires don't help solve these problems. If anything, they make them worse because they often pay a far lower percentage tax than anybody else.
[0]: Of which the US at least is highly dependent on. I want this to change, but it won't be an overnight thing by any means.
It's the same problem when it comes to tax increases - everyone thinks raises taxes on everyone else is a great idea, themselves? Oh, not me, I'm not rich.
This even happens on HN which is a pretty well off crowd. When the SALT deduction was capped everyone complained - even the same ones that claimed "I'm fine paying higher taxes".
The economy is not a zero sum game. But billionaires are getting all the growth while middle class and the poor see their share of the economy shrink.
This is not about my neighbour earning more than me, it's about corporations that take over big chunks of the economy.
In your own sentence you had to use specific words "their share of the economy shrinks" can be true, while their wealth increases. The economy is not a zero sum game. The middle class could see their share of the economy increase while also having standard of living, total wealth, etc. all decreasing.
Yes. Because they can afford private schooling, legal and medical care that the bottom 90% cannot because those services are privatized and only available to the very wealthy. If the ruling class/wealthy who controlled the system could not depend on their vast wealth for great schools for their children, health and legal protection - then all of a sudden the social system would be spectacular, and everyone would benefit.
Inequality is poisonous because it creates massive disincentives to create a working socialized health, education, legal system....
Game theory says there are no easy answers. Child outcome data suggest that strong family structures seem to have the most impact.
There doesn't really seem to be much of a tragedy of the commons when it comes to healthcare - nobody is really that excited about getting an unneeded biopsy, or hip replacement, or colonoscopy....
Agreed that full-throated capitalism seems to be the best system when it comes to allocating most resources (I absolutely do not begrudge Billionaires their Yachts, big houses, islands, private jets - have at it!) - but it's pretty sad when someone who works hard their entire life has to die 10 years early because they can't afford a decent doctor.
Nobody makes billions by "earning more than you", they make it my owning companies, or funds, so this has nothing to do with salaries.
But the fact is that the existence of billionaires hurts everyone, especially in poor countries, but also definitely in the US. Now I'm not talking about the ethics of some people wallowing in wealth why others are starving, the biggest problem is that when you reach a certain level of wealth you can start influencing, or even controlling, public policy. This obviously has the effect that public funds are diverted away from the public into their pockets. In the third world this process is quite direct, in the rich world it's more about enacting policies that benefit these oligarchs, at the expense of everyone else.
This is a huge problem.
Never mind that a billionaire could live anywhere and literally couldn’t spend all of their money if they tried.
Someone taking the wealth that other people have produced with their labor is not earning, though. And a lot of us do think that earning 300x what the average worker does is a physical impossibility.
Should I be forced to sell my rock, because I'm getting a $500M tax bill from the government because some weird little cult said they would pay $1B for it - regardless of whether I want to sell my rock?
Maybe you can say you don't have to fully abolish property. But it remains especially hard to predict what second order behaviors any particular implementation would bring about, and what steady state would result from them.
Per your example, if the expected ruling of society would be that gp doesn't get to keep the rock because they don't "care" about it... well, maybe people in their position would suddenly find themselves caring about the rock very greatly. Not even cynically -- if the choice presented to you is "value or no value", the limbic system suddenly becomes very persuasive.
The rock is mine because my family bought land a few hundred years ago, and the previous owner thought the rock was ugly and let it for us.
> If the rock means little to you, why should you have it rather than the cult that actually values it?
The rock means a lot to me, because it reminds me of my ancestors. I value it, but I just don't have a billion dollars to attach to it as its value.
> What if the cult wants to preserve the rock but you want to destroy it even though that will cause great pain to those who care about it?
I dunno. I think it is my rock and I can do with it what I want. But I don't want to destroy it, I just want to keep it where it has been for the past 200 years, near my family home's fireplace.
> Why should you have permanent ownership of a rock just because your parents had it?
Because that's how ownership works. If anyone can come take anything from you at any point, then I don't think you can ever be considered to own something.
Now, from a parable perspective, does the post mirror the principle of how wealth taxes work? Maybe, if you're willing to equate the entire market (or whatever communal entity we're using for the basis of assessment) to a weird little cult.
Not to mention, the calculation for wealth would probably be based on something less temporary than a fleeting moment in the markets.
Finally, the government would not directly take shares, so they would always be owned by you. Presumably with the stock price so much reduced you can simply purchase more at a pittance.
They wouldn't take shares, but I would be forced to sell shares in order to pay the tax bill, because I don't actually have that money just laying around. So I had 10M shares @ $1/share, share prices go up to $100/share. I get hit with a $900M tax bill and sell 9M shares in order to pay it. Price goes back down to $1/share, leaving me with 1M shares. How exactly should I purchase more at a pittance? I spent all the money I didn't even have paying the tax bill, there's nothing left in my bank account to buy any shares.
That sounds like horrible financial advice.
By this same standard, maybe Amazon is doing an immense service to humanity, and that is why so many people use the site daily, and actually enjoy doing so. So maybe Bezos should get to keep his billions as well.
Currently, gold retails at $1808 an ounce. So it would take over 15.6 metric tons of gold to be even worth a billion dollars. That is substantially more than an "old pile", and probably of historical worth, like contained in a ruined temple or wartime vault or something
The San Jose galleon as I mentioned is estimated to have about $17B of gold on it. I don't think very much is going to change about the world when it is raised.
Whether you're receiving the value of the asset or not, you're locking up the value of the asset and preventing a larger group of people from benefiting from the value of the asset, which is sort of the point of a wealth tax.
My point is: With a wealth tax, anyone with money can take anything they want from anyone without money, even if the person without money doesn't value something in the same way that the person with money does.
The people that wouldn't sell it for a $1 Billion are the people that would give it a way for free, ie: those that have little value for money.
In actuality it's not a rock of course. For a founder of a company the situation is more like you've spent most of your life building something you believe in and suddenly you have to sell it because a group of strangers believe that your thing is worth more money than you've ever seen in your life, and the government wants taxes based on that belief. That seems fundamentally unfair and wrong at least to me.
It's somewhat of a game (joke perhaps), usually used in the context of ways to fairly assess land value.
Tax deference is not tax avoidance.
I pass the rock on to my children and die 20 years later. The 50 million is now worth 74 million.
Both the rock and 74 million are stepped up to their current value when I pass it on to my children. The children repay the loan with their 50 million and now have 24 million and the 1 billion dollar rock still, tax free.
How is that not tax avoidance?
The tax code, today, in practice, already frowns very much on tax deference, and tries to inhibit it when possible. The AMT-schedule is purposely designed to pull tax forward, and precisely discourage strategies for tax deference e.g. to counter the abuses that would arise by using stock-based (or cult rocks) compensation to avoid income tax.
Property tax (which is a wealth tax) is another way to siphon off tax on unrealized wealth.
So where's the strawman? Would the person in this scenario not be affected by a proposed wealth tax?
Also, I don't really get how it is "simping for billionaires" in the slightest. If I said that billionaires shouldn't be pulled from their mansions and lynched, am I simping for them too?
If you don't want to sell your rock, then set up a family trust to hold the rock with the provision that it can never be sold, then the rock will have effectively zero taxable value and you can keep it in the family forever.
If you don't want to do that because you might want to sell it some day, then it's not really a family heirloom, it's an investment.
Or, put the rock in a trust, tell the cult that they can take ownership in 100 years and have access to it once a year for ceremonies if they'll pay you $100M today.
You need to realize that absolute numbers are meaningless, they are all relative to costs and inflation. Trying to lock down fiat absolutes is a moving target.
What is a realistic wealth limit for BTC, out of 21M?
Should nobody own more than 1/21Mth the Bitcoin? Less? More?
The fact that there is a gray zone does not mean that no border must be drawn.
We can't vote/sex/drink/gamble because it is assumed that young people sucks. Maybe looking at the statistics government decided 18 years is good? I think if 12 year old can pass driving test then they should be allowed to drive. If 30 years can't pass, they must not be allowed to drive.
So, how about we find objective paramters to determine what should be the best border to determine the elites? May be it is 100x minimum_salary? There are plenty of option I guess.
An amount of wealth that would provide you a top %0.1 lifestyle if you were to retire today based on a standard 60/40 portfolio (to be adjusted every N years to reflect new data) and actuary tables.
It doesn't have to be this exact policy, but this isn't hard to think something like this up.
Citation needed.
In the interest of full disclosure I enjoy the occasional cigar.
Maybe we shouldn't speak of companies as being "net positive" or "net negative", but rather speak of what could be improved if there was more competition, more companies, more market. Less monopolies.
If you think Amazon is unfairly using their monopoly to keep others out and capture the market, state your claim. If you think competitors could do better, prove it with consumer choice.
Walmart or Shopify or eBay or wherever you want to shop are just a click away. If consumers think they can do better, then they will. I have already ditched Amazon for all those reasons. But you cannot speak for others.
The competitors you list also aren't head-on in competition with Amazon. Aliexpress predominantly serves non-American markets. eBay, like it, is an auction site. Shopify does not have one central market, it's completely decentralized. Walmart is the most similar to Amazon, and perhaps with its acquisition of Jet.com and its growing investments in ecommerce, it may yet prove to be a lasting competitor. Stay tuned.
Greater reach and resources is part & parcel of being the top consumer choice. If they blanket the airwaves, if there is some asymmetry, still who cares? You're going to have to show how consumers do not have a choice or how it doesn't help consumers.
Because regardless of how intense Amazon's marketing and reach get, their competitors are still one click away. Finding out about competitors is one search query away, one media article away, or one advertisement away. Frankly, if a consumer is unable to expend the minimal effort to find & choose an Amazon competitor to buy a product, they're basically not trying at all. And not trying is their choice.
As far as anti-competitive behavior, I will defer to luminaries more informed than I
https://www.yalelawjournal.org/note/amazons-antitrust-parado...
https://www.natlawreview.com/article/amazon-wins-ruling-resu...
It doesn't matter if there isn't a direct Amazon competitor. All large companies compete on multiple fronts. It does not mean there is no competition in shopping.
I don't respond to essay dumps like this. If you want to say something, you're going to have to say it or quote it.
If you refuse to engage further in this conversation, that is your prerogative and it is noted. We can consider this matter closed.
Essay dumping is not conversation. Although it is also your prerogative to avoid conversation as well.
> If Amazon detected lower prices on other sites, it would bury their products in Amazon search results, where they got most of their sales. Some of the merchants were eager to grow their sales on other sites, but Amazon’s policies prevented them from offering lower prices elsewhere to draw shoppers away.
https://www.bloomberg.com/news/articles/2019-08-05/amazon-is...
> Amazon constantly scans rivals’ prices to see if they’re lower. When it discovers a product is cheaper on, say, Walmart.com, Amazon alerts the company selling the item and then makes the product harder to find and buy on its own marketplace -- effectively penalizing the merchant. In many cases, the merchant opts to raise the price on the rival site rather than risk losing sales on Amazon.
> Merchants have long complained that Amazon wields outsize influence over their businesses. Besides paying higher fees, many now have to buy advertising to stand out on the increasingly cluttered site. Some report giving Amazon 40% or more of each transaction, up from 20% a few years ago.
> Some merchants are keen to increase their sales on Walmart, which charges less to sell products on its marketplace. But sellers say the price alerts are forcing them to maintain allegiance to Amazon and making it harder to diversify their businesses. Walmart routinely fields requests from merchants to raise prices on its marketplace because they worry a lower price on Walmart will jeopardize their sales on Amazon, says a Walmart manager, who requested anonymity to speak freely about an internal matter.
The fact is that consumers continually choose to entrust Amazon the power to pick on their behalf, making it their consumer choice. If sellers leave, consumers often choose Amazon over the seller. Amazon can only "bury" merchants in their search results because consumers continue to be satisfied with what Amazon finds for them. If consumers found Amazon's search results lacking, they can find the missing sellers on other websites. Practically every consumer knows how to buy things online outside of Amazon, a lot of them do it all the time.
Personally, I choose to buy many better and cheaper things outside Amazon. I do not choose Amazon to find any of my stuff. That choice has always been extremely easily available to any consumer, but they don't choose it. Consumers aren't being denied a choice, they have chosen: they chose Amazon's higher fee marketplace.
https://www.theverge.com/2022/3/9/22968927/congress-justice-...
It is a separate argument, but 'more competition' isn't a magical fix to everything. This sort of gating mechanism relies on the end user/consumer having good knowledge, sound judgement, etc. Also what is best for the consumer isn't best for the society. A wild example - For me, as the consumer I'm happy to get an iPhone for $200, but that might mean that Apple pays their employees below US minimum wage.
So, I think you need to prove how Amazon is net positive in society?
What sort of citation will make you happy?
This is indeed a very controversial statement because the rich are living a lifestyle which is at best unsustainable for the planet. They emit more greenhouse gas into the atmosphere for their own lavish lifestyles. They exploit poor labor conditions and lobby against every minor improvement. They don’t contribute to our shared funds like regular people, decreasing the state’s funds for more infrastructure which would have created more jobs. And they cause stress with their increased wealth disparity. Many research has shown perceived inequality is a significant stress producer. We may very well be bettor off without them.
Yes, there is a nice division of responsibilities. But ultimately, governments are doing the jobs they get paid for. And they're not only wasteful with our money (spending on wars, defense, etc), ironically (in a sad way) they pay government workers poorly - See teachers' salaries.
>Jobs would be created without the rich.
Jobs were created at all stages in history in all kinds of social and economic conditions. Also, plenty of rich people got rich after starting companies and creating jobs. We're incentivizing people who like money to create jobs, among other things.
>See responses sibling post (https://news.ycombinator.com/item?id=31743755) about the issue with 401(k) (or pension funds in non-USA countries).
Those are not responses to my comment, so specifically what part of my comment was inaccurate? I can correct any misunderstandings, or improve my comment to fix any errors on my part.
https://www.nytimes.com/2022/06/13/business/bear-market-time...
> But 401(k) plans can still take a significant hit in market downturns. In 2008, for instance, as the S&P 500 dropped 37 percent, the average 401(k) account balance for those who were in their 50s fell 24 percent.
> People with retirement accounts are keeping more of their assets in stocks now, as opposed to bonds or a mix of other investments. “There has been a growing complacency of people keeping most of their nest eggs in stocks,” said Monique Morrissey, who specializes in retirement at the left-leaning think tank Economic Policy Institute. “There has been a fundamental misunderstanding — returns do not always average out.”
> “It’s not just the loss from January; it’s what happens going forward,” she said. “If you were counting on the amount that you have in your 401(k) to continually grow, well, then you may never get to what you had planned for.”
Tying retirement plans to the market only looks good when there's a continuous bull market, less so when the bottom falls out.
Returns on capital flow, unsurprisingly, to those with capital. And the concentration of capital in fewer and fewer hands is precisely the issue that people are objecting to.
Because those yachts were bought with money skimmed off our labor.
If that was the case, it should work both ways: when Bezos "lost" $20 billions of May 1st, how many skimmed labourers suddenly were able to afford $1 million houses ?
Why would it? The notion that "it should work both ways" assumes that "both ways" are equally viable.
What matters is 1) how much wealth any given employee generates, and 2) how much of that generated wealth they retain. Anything that doesn't end up in their pockets, and is not a business expense otherwise, is economic rent collected by their employer.
Rich people spending their money isn’t really the problem. It helped put me through college.
Corporations have a net positive effect on society, so we should sit by and watch the dragons add to their hoard? They don't need a billion dollars, it's just a video game to these people. They want to increase their high scores so they can be top of the leaderboard.
Also, millionaires include people who saved a million dollars over their lifespan in order to retire. Retirees need that money if they want to live a modest lifestyle, pay for unexpected (or really expected at that age) health care costs, and support their grandchildren. It's a luxury we'd all be lucky to have and tragically many people weren't able to achieve. Add in an order of magnitude and what more do you get? What value does a person add to the world when they have a billion dollars instead of a million?
The average joe in america and many other places has more money in a month than many have a year, the average american or european has access to luxuries other people dream off.
We are rich by proxy of simply living in the states or in europe. Furthermore we also have more opportunities and the ability to become a millionaire too.
We are envied by many places worldwide, we need to stop being angry at what others have and be better.
I hate the anti-rich people talk because we could do far more productive things.
besides, to many people we are included in that rich category we talk own about.
On top of that our global capitalist situation heavily favor exploitation in cheaper labor markets. So if you are a millionaire CEO in a rich country you are very likely to exploit your workers in poorer countries (or more likely, the workers of your providers and contractors) which overall increases the QOL in your country while decreasing it in your worker’s country. Your correlation might be a cross causation.
So it comes down to: is a handful of pseudo-randomly selected[0] people having wealth on the scale of billions a good outcome or a bad one? Personally I think it's pretty obviously the latter, and if you agree then I struggle to see why a wealth tax isn't the obvious solution.
0: "It isn't random, they worked harder than everyone else!" Where would Microsoft be if Gates' mom wasn't friends with IBM's John Opel? Where would Amazon be if Bezos had been born 5 years earlier, or later? Etc.
I think that is a correlation. An empty granary attracts no rats. That doesn't mean that having rats is good for farmers.
TLDR. Elon makes vastly better use of capital than the government does. He turned $180M into SpaceX and Tesla. They turn $180M into some bombs and maybe an unfinished train station if we're lucky.
1. The objective of public policy is to maximize the efficiency of capital allocation.
2. Who is efficient at capital allocation is independent of public policy.
3. Efficiency of capital allocation is measured by stock market capitalization.
1) would assume that building a Lamborghini Veneno Roadster is a better allocation of capital than building 10 homes. Or treating 100,000 cases of malaria.
2) would assume that someone who benefits from government subsidies is intrinsically better at capital allocation than someone who doesn't.
3) would assume that tulips sellers were really, really, good capital allocators for a while, and then suddenly were terrible capital allocators. Or that the number of cars produced isn't really a relevant metric for an auto company.
1. You'd certainly want to remove it before they pass it on to their children -> 60% of all wealth in the US is inherited, mostly by the very wealthy.
2. Those most likely to scoop up redistributed capital are the efficient capital allocators at current time, which is better than calcified structure of efficient capital allocator from 1970 who has just put their money into index funds and passed their wealth on to their children.
3. Diminishing marginal utility of the dollar means strong first-order utility gains from redistribution of wealth which would need very large second-order impact on capital allocation effectiveness (and impact on behavior) to harm net utility.
In my experience from having known a couple of mega-rich CEOs, yes. Even those who are not principally driven by the money or three-commas social signaling, they still want to leverage their accumulated assets into changing the world in some way. Take that away from them and they lose motivation, yes.
It was a disaster then, it's a disaster now, and it'll be a disaster in the future.
Why does everyone want to tax the billionaires? What are you going to get out of it? Do you think taxing the billionaires is actually going to help the poor people?
If so, riddle me this: Name one efficiently-run government organization.
They are really not better than government because these people are the one who lobbies government to vest their selfish desires.
You should check out the shenanigans that the US government gets away with. Whatever bad things Musk, Gates and crew is small fry compared to the government.
A side effect of a wealth tax is that instead of wealthy people building wealth that's just going to be taxed away, it would incentivize funding charitable foundations like the Gates Foundation. Bill Gates has done a lot of good with his foundation, but that doesn't meant that one person should control that much money.
(Spot the outlier on the first graph: https://ourworldindata.org/the-link-between-life-expectancy-... )
Because they take a lot of value out of a shared society and concentrate too much power on their hands.
> What are you going to get out of it?
Reduce the power discrepancies, mostly, and money too.
> Do you think taxing the billionaires is actually going to help the poor people?
Yep.
You are asking about government efficiency, but one of the reasons for the lack of efficiency is that billionaires do not want it.
[1] https://www.sfchronicle.com/politics/article/S-F-officials-w...
"USPS's operating revenue was $77 billion for the 2021 budget year, an increase of $3.9 billion, or 5.3%. It reported a 2020 net loss of $9.2 billion."
https://www.reuters.com/business/us-postal-service-reports-4....
I can send a letter anywhere in t he country for 58 cents, UPS or Fedex would charge $10?
The military also “runs at a loss”—should we expect it to be profitable?
Metric 1: They provide an efficient service. Posts reach on time (rain or shine), they have systems and process that make the organization not waste effort.
Metric 2: They earn more money that what is spent by them.
By metric 1, postal service, railways and public transport in most places, a large part of governmental services (DMV), medicare in US are efficient. Depending on your neighborhood, even police, fire and ambulance are efficient.
by metric 2, most government services will not be efficient.. however, the government is not a business and I would argue that because people confuse 2 with 1 is why US does not have a better quality of life. The job of government is service using tax dollars.
Take public transport for example. In my mind, it should be mostly subsidized and effectively free. Trying to make it a profit center makes it a "non-public" transport and you end up with limited services which has secondary effect of reducing mobility and restraining the economy.
https://taxdude.substack.com/p/should-we-actually-wealthtax-...
Now if your goal is just to spite them for the illusion of justice, there are other ways of doing that.
If there's people with budgets for yacht, then there are a much larger group of people with budgets for fancy houses.
And an even larger group of people whose incentive is to see the price of their homes rise, contrary to the societal goal or providing affordable homes for everyone.
If you implement a nationwide land value tax, I believe the wealth disparity will start to disappears and there may be less billionaires, but everyone will benefit.
The issue is that the minority at the top can easily hinder development of system level incentive to cement their power, once they have achieved such a power imbalance.
It is astounding how many people naively just think "Too much money = bad". Billionaires don't really have cash sitting in their houses. They created companies, often from scratch, that wouldn't otherwise exist.
https://ourworldindata.org/economic-growth
GDP per capita grew because the wealth was created, not stolen. The entire pie got larger. We lifted people out of poverty from 90% in 19th century to what it is today 10% through capitalism and trade.
We need more billionaires to create wealth and propel society forward.
Crony billionaires, politicians, inheritance wealth, etc. need to be condemned and we usually throw the baby with the bath water along with the whole tub.
Billionaire hate is getting out of control because people are convinced naively. I suspect some malaise in economics education.
Or a study that has shown that billionaires ("job creators") are those who are the primary driving force for wealth creation?
Or are the much-bandied Gates/Musk entrepreneur-industrialist types just a minority of billionaires, many of whom are just wealthy heirs or hedge fund owners or whatever
Yes. You would increasingly see founders depart their companies as soon as a heavy wealth tax kicks in. It’s difficult to prove that this would have large net negative impact on overall well-being, but I imagine it would.
Consider that people have a lot of problems with Amazon's practices. So suddenly, everyone is yelling to tax the hell out of Bezos. But no one has the drive to actually plug the holes that allowed him to make so much money in the first place. All kinds of employee injustices, environmental abuses, and whatever else pops up in the news all the time.
I just don't think that any one person should have the kind of power that comes from amassing a $100B+ fortune.
It seems Netflix doesn't have a sustainable business model as they have too many direct competitors in the field, price increases in their own plans and little to no diversification in other sectors. Unlink the others MAGMA companies, Netflix is not in multiple sectors to get in more cash and are stuck in a single niche.
Hence, why out of the FAANG companies, stock compensation at Netflix crashed and they had no choice but to announce layoffs.
The other question I have has to do with feudalism. If we let "our" billionaires exist, does that mean that we keep feudalistic pressures at bay? Or do we enhance those pressures? Is that even the right question?
The fact that you're even asking that is a reason we shouldn't have billionaires -- world power relationships shouldn't be based on the wealth of individual citizens.
For example, what did Musk really talk about when he met with the president of Brazil? Did he represent American interests, Amazon Inc's interests, or Elon Musk's interests?
I get that "wealth gets power" is not ideal, but the alternatives we can see around don't seem to be much better. Somebody will have the power, and we as a society would need some proxy to use so that it won't lead to a disaster. Being able to create and run successful businesses (yes, I know not all rich people are self-made, etc. - it's an imperfect proxy, but to a large measure a working one) doesn't look that bad, compared to "being born with right last name" or "being born with the correct facial features"...
FWIW, most wealthy people are wealthy because of inherited holdings and 60% of all wealth in the US is inherited.
Source? This fails the sniff test, as the amount of wealth has grown at such a rapid rate this seems almost impossible.
What do you mean? It counts ownership stakes & stocks as well.
> I imagine we could arrive at 60%. But it doesn't mean what you think it means.
It means exactly what I think it means - if you get bequeathed $1 million dollars and get 8% returns from investing this, it doesn't mean you "self-made" $3.66 million more 20 years later.
What pointless designation.
[0] https://www.nytimes.com/2014/04/20/opinion/sunday/from-rags-...
The median dollar of wealth is inherited by the wealthiest top 5% of families, not earned as income - which your statistic doesn't even address.
Banging your drum even more loudly doesn't change the fact that you are off beat.
Are you sure? Please tell me the top 10 names on the Epstein client list. I'll wait.
> most wealthy people are wealthy because of inherited holdings and 60% of all wealth in the US is inherited.
I'd like to see your sources. They probably counts by dollars, which is pointless, since one hyper-rich individual completely skews the picture - you can have a million self-made millionaires and one Elon Musk's son - and claim that the majority of millionaires is created by being Elon Musk's son. That's an obvious nonsense. It's like calculating average income of a people in a bar where Bill Gates just walked in, and making conclusions that everybody is rich. You need to count people, not raw dollars.
Mine say:
One measure of the percentage of the wealthy who are self-made is Forbes' own Forbes 400 list. In 1984, less than half the people on The Forbes 400 list of richest Americans were self-made. By 2018, in stark contrast, this same figure had risen to 67%.
https://www.forbes.com/sites/rainerzitelmann/2019/06/24/amaz...
Around 41.4 percent of the wealthiest one percent say they have inherited some money.
https://www.peoplespolicyproject.org/2017/10/10/the-wealthie...
The market research firm analyzed the state of the world’s ultra-wealthy population — or those with a net worth of $30 million or more. The report, which is based on 2018 data, “showed muted growth” in the number of ultra-wealthy people that year, “rising by 0.8% to 265,490 individuals,” says Wealth-X. Of those folks, 67.7% were self-made, while 23.7% had a combination of inherited and self-created wealth. Only 8.5% of global high-net-worth individuals were categorized as having completely inherited their wealth.
https://www.cnbc.com/2019/09/26/majority-of-the-worlds-riche...
Counting people is not the important bit because I am concerned about the distributional equity of wealth not wealthy people.
> I am concerned about the distributional equity of wealth not wealthy people
If you exclude people, I am not sure I understand what you're talking about at all.
You are indoctrinated into believing that democracy cannot work and good government is impossible.
At the scale of continental countries like US (or any BRIC country), it is. The decision makers are simply too far removed from the people who get to live with the policies.
Someone like Elon Musk having political influence is a bad thing because he's raging capitalist that can, will, and does exploit those below him. It's why he has such a love for his Chinese labour force. They have less rights and they will work 16 hour days in his factory making the cars that make him money.
Elon Musk is great as a wealthy private businessman, that's where capitalism firmly belongs. But he has no place in any sort of politics. Countries aren't run like businesses.
I'd reverse the skill and luck relationship. Success at that magnitude is almost entirely luck (and probably a little skill).
[1] https://mobile.twitter.com/nntaleb/status/153417277358051328...
What the tweet is saying, and it seems right, is that looking at a probability graph the only way to get the billionaire-like outcome/outlier is to dramatically increase volatility, i.e. bet on long odds. If everyone went to work, maxed out their 401k, bought blue-chip stocks, and called it a day, basically nobody would have outlier net worth. But some people choose to increase the volatility of their money (buying crypto, starting a company, options trading, whatever) and as you'd expect 99.9999% of them don't get rich and the rest of them get uber-rich.
I think these activities are quite different however. Saying starting a company is the same nature of activity as betting on an extremely volatile asset ignores all the work that goes into successfully creating a working company. Surely, there's no guarantee this work will bring result - but it's still not the same as just betting on random high-volatility assets. Even options trading is not (always) just betting, and for more successful traders probably involves certain amount of knowledge in addition to luck. But I don't think describing creating a company as completely probabilistic activity makes any sense.
The tweet is saying that founders becoming massively rich is a natural outcome of probability distribution -- huge payoffs require either huge bets at a smaller win multiplier (less "risky") or comparatively smaller bets at a huge win multiplier (more "risky").
Optimal decisions for themselves, not for the country.
In theoretically egalitarian systems like communism, a committee makes decisions about how to allocate resources. Then whoever holds most sway over the committee holds sway over resource allocation. If you do it by direct democracy, then whoever owns the news media & ad platforms (or has money to do massive PR campaigns and ad buys) holds sway over resource allocation. You can't escape this: somebody is going to make the decisions, unless you just run the world by computers and have humans slot in for menial tasks.
1) The fact that it's necessary to "hold sway" is a result of the power not actually being held by that person, but being loaned to that person by the rest of the committee in a way that can be withdrawn at any time.
2) The committee members are all subject to the process that chooses them. That's the power center, and the character of that process defines the legitimacy of what the committee does. If a billionaire chooses them, the committee is a mask. If the people being governed choose them, that's the basis of popular sovereignty, and the justification for post-Enlightenment government in general.
> whoever owns the news media & ad platforms (or has money to do massive PR campaigns and ad buys) holds sway over resource allocation.
You're talking about other billionaires. The conversation is about not having billionaire.
So this boils down to if billionaires choose a committee, billionaires will run things, and if people vote for a committee and billionaires control all of the information that those people get, billionaires will run things. You can escape this if you don't have billionaires.
The rest of your post is largely true, but also applies to billionaires. They derive their power from people being willing to trade money for the goods and services produced by the assets they own. When people cease to make that trade, their money and their power evaporate. Just look what's happened to the shareholders of Kodak, Xerox, Pan-Am, GM, Sun Microsystems, Lehman Bros, etc.
Note also that systems without billionaires have existed, and have often been worse in terms of distributing power to many people. See eg. Soviet Communism, where power rests in the Politburo, and the local party apparatchik holds outsize sway over everything regardless of competence. Or even post-WW2 U.S, when the top marginal tax rate was 90% and executive compensation was far lower because there was no point in paying a lot when the government got 90% of it. Corporations instead compensated their top execs in-kind: usage of private jets, corner offices, ability to influence what every American thought through advertising and mass culture, influence on policy makers. Orwell's 1984 and Chomsky's Manufacturing Consent were about the 1945-1980 period, not the post-Internet era. Power was significantly more centralized during that time period than it is now.
BOFH: I've upped my priority, so up yours.
This is a very idealistic and impossible to ever implement take
Now, the money could sit in the bank, sure. But even then, the vast majority of the money "in the bank" is actually being lent out to other people, who spend it.
So unless the money is literally sitting in a vault, it's not "parked" anywhere.
I'm very open to being corrected here, so feel free to do so. My understanding of economics is decidedly limited.
Either directly as VC capital or indirectly via public ownership. If billionaires suddenly couldn't own public companies, stock prices would drop and we'd likely see layoffs.
This is a YC-affiliated/run discussion forum. I think I speak for many entrepreneurs (former or current) that: investing is really, really important.
Investments from VCs (and form their wealthy LPs) makes entrepreneurship something that normal people can do (as opposed to only something rich people can afford to do.)
There are two common ripostes to this. One is that these are wasteful vanity projects, which just proves the point that there is value to this sort of decentralized system of capital allocation where some small percentage of total available capital is in the hands of quixotic individuals who can pursue aims that a majority of the population doesn’t (yet) see the value of. The second objection is that these things should all be handled by the state. It’s fine for people to want space exploration to be entirely handled by NASA for instance, but the record is pretty clear that US (and by extension humanity’s) pace of space exploration has been absolutely transformed by the ability for private actors with substantial resources to make moves outside of an existing bureaucracy.
The US government spends upwards of $4T dollars a year, and the media class has a much larger influence on politics than and group of billionaires could buy. Because most billionaires are entrepreneurs they also typically look at ways they can deploy capital that are underserved and where the state would be an inappropriate actor in terms of required risk and innovation. A group of talented weirdos that have the resources to move the needle on neglected projects is a feature not a bug.
Since the charity is run by a board and bound to abide by its charter, it's not the same thing as the person controlling the wealth himself. The Gates Foundation is not going to buy Bill Gates a private island with a $100M super yacht to get there.
I would expect this to be a "distinction without a difference" if the billionaire is careful/competent about how he staffs the board and how he writes the charter.
You haven't yet figured out that all institutions and corporations are merely instruments of the monied classes?
Billionaires are the state. They would not exist if the state didn't specifically provide them with the mechanisms to amass such wealth at the expense of the rest of us.
Lobbying is a thing. In the US those people can pretty much legally buy any politician they want.
Let's macrosize the perspective: why do you think Unity moved HQ from DK to the USA? Could it be the crushing taxes here?
This is the issue. You really can't have it both ways. Yet many Americans love to fetishize a hatred for few very specific individuals without thinking through the whole causal chain that girds their economy.
Denmark consistently ranks in the top 5 of countries with the best quality of life. A year of parental leave, great social welfare, universal healthcare and retirement benefits, etc.
Including federal/state/local taxes, healthcare premiums, retirement contributions, disability insurance, etc, I pay close to 50% of my salary in the USA
And I'd still worry about how I'll pay the bills if I lost my job.
why do I want to pay half of my salary until I am enfeebled and the state lets me enjoy my enfeeblement?
Because that's how the state pays for the enfeebled today? Are you really suggesting you want to leave Denmark to go somewhere with lower tax rates, then when you need social healthcare, you'll move back to Denmark and take advantage of the healthcare system that you didn't pay for?
Isn’t that the point of their healthcare/retirement system? It’s socialist, not user pays. That it covers everyone irrespective of their tax contributions. Otherwise it would exclude the unemployed, students, disabled, low income (untaxed) people (esp housewife/househusbands) etc.
I don't think "Encourage people to move out of the country during the working years and move back to the country when they are old and need expensive healthcare coverage" is the point.
It may be the result of their system, but it's not the point. But if it became a problem, they could require that you buy back into the system after an extended absence out of the country.
And if you can’t buy back in? Won and lost your fortune overseas (or never won at all and remained poor all your life) and returned “home” destitute? What then?
This is a really good question.
I believe the answer is that the USA will be better able to outcompete those countries that do have them. History has shown time and again that massive inequality is a huge barrier to maximizing the productivity of all of a society's members.
It leads to cynism and corruption and breaks down cooperation. It forces a society to spend valuable resources on policing in order to keep the poor taking from the rich. It's just economically incredibly inefficient. You need some level of inequality to incentivize people but once you go beyond that, it's a net harm.
Based on what? The US already outcompetes these other countries in business success and average citizen income. What countries don’t have billionaires that are competitive?
> History has shown time and again that massive inequality is a huge barrier to maximizing the productivity of all of a society's members.
History has literally never shown this. This is the first time we’ve had massive inequality while still having a solid middle class. The jury is still out on whether the instability of the past was just because of excessive poverty and no upward mobility or because wealthy people were there.
There are countless examples of rich or powerful and connected people buying officer posts, for example, and meritocracies (= equality of chances) stomping all over these corruped systems.
There's little reason to believe rich people willingly or not, do not distort every market they're in. That's why they become rich, to be powerful.
Empirically, this is actually beyond doubt by now. Piketty et al. were in the news 10 years ago with this very topic, showing that inequality is detrimental to growth, for many countries and over very large periods of time. And there has been a bunch of additional studies after that publication that support these findings.
There is no evidence about it stifling growth in the US in his work nor any follow-up work.
Has it? Restricting what opportunities individual people are permitted to follow would I assume both reduce productivity and increase inequality, but that doesn't have the inequality being the cause of the lower than theoretically possible productivity.
"if you look at the long-run evolution, we’ve seen less concentration of wealth. So the top 10 percent of the wealth distribution today would have 60 percent in Europe, 70 percent in the U.S., as compared to 90 percent before World War I in Europe. This did not destroy the economy. If anything, this decline in the share of total wealth going to top 10 percent and the corresponding increase in the share going to the next 40 percent has contributed to a much faster economic growth in the 20th century than in previous centuries.
"I think partly because it allowed more people to participate, to the economy. And also partly because it came also with the rise of education. And this was the true source of productivity in the long run, rather than the enormous level of inequality that we had before World War I. This theoretical discourse that more inequality, more concentration of wealth is always better for economic growth was made, of course, throughout history by people who had large concentration of wealth, certainly in Europe before World War I.
"And this is a discourse that, in the 1980s, Ronald Reagan tried to tell Americans, basically tried to tell them, look we’ve gone too far with the New Deal, with Roosevelt, in terms of progressive taxation or wealth redistribution. We are going to cut top tax rate by two, where they’re going to go down to 28 percent or 30 percent, as compared to the 80 percent, 90 percent top tax rate under Roosevelt. So the promise that was made by Reagan during the 1980s was that cutting top tax rate might lead to more inequality, but will also lead to so much more innovation, more economic growth. And the incomes of average Americans are going to grow much faster than they used to grow.
"Except that this is not what we’ve seen at all. So if you look at the three decades after Reagan, 1990 to 2020, the growth rate of national income per capita in the U.S. was only 1.1 — 1.2 percent as compared to 2 percent, 2.5 percent in the period of 1950 to 1980, or 1950 to 1990, which itself was not particularly exceptional. It was the same — 1910 to 1950, it was about 2 —2.5 percent. 1870 to 1910, around 2 percent. So in fact, the post-Reagan period, 1990-2020 has been particularly bad in terms of growth rate of national income per capita, which at the end of the day is the best economic measure we have of the increase in productivity and this should reflect innovation, et cetera."
https://www.nytimes.com/2022/06/07/opinion/ezra-klein-podcas...
The most productive decades in the US also correspond with a period when the US was essentially the only industrial power not absolutely shattered by World War 2. In global economic terms, the post-war period was a huge anomaly, and I would be hesitant to tie too many conclusions/correlative effects to something as singular as domestic tax policy.
Wait... That didn't actually work.
Recognize that you — and everyone else — are relying on him to work just as hard, to take on just as much responsibility, while sacrificing more and more for every incremental dollar of value he creates.
Your question implies a hope that the CEO will continue to take on massive responsibility and produce massive wealth, even when the main beneficiary of his productiveness will be the government, not him.
If he doesn't choose to work harder, every incremental dollar disappears and the scheme fails. What happens then?
“Tax The Rich?” — https://youtu.be/pgW4LWeUyVY
My personal opinion is taxing the rich is good. Wealth tax specifically is problematic.
Trying to control the amount of wealth one "should" have is misguided. We should have ways to limit the amount of power that can be concentrated. If we did that, we would have a better shot at having a more equitable society: https://news.ycombinator.com/item?id=31317641
Starting by no longer equating giving money to politicians as an exercise in free speech would be as good a place as any to start.
How is that supposed to work with any labor intensive process?
E.g. I work on a construction project where there are over 220 field craft workers on day shift alone. Office staff and inspectors are another 100 or so. Night shift adds yet more.
Should each of those be its own business entity?
Third option, we stop working on such large projects, and focus our collective efforts on making our societies and our environments more human-scaled. Again, it is an option that I see as good.
As to the third option, 'human scale' is just cresting 8 billion individuals. We will never escape the need for massive infrastructure projects.
These can be outsourced, automated and/or reduced in scope. Each company would be a lot more specialized in their function, so it wouldn't make sense to keep the same set of regulations and policies that we use for larger corporations.
> We will never escape the need for massive infrastructure projects.
Au contraire, I think that we only push for "massive infrastructure projects" because we are addicted to growth. Governments push for growth as a way to keep financing their debts, corporations push for growth as a way to justify their existence.
If we were limited in our ability to grow and established that things needed to be settled organically, cities would be more dispersed but still dense and suburbia would not exist. Global trade would be impacted, but we would be forced to re-learn how to manufacture things locally. Governments would have to figure out ways to sustain the populations with tighter constraints, but we would not get things like the European dependency on Russian gas, etc.
I don't care that there are people richer than me, I care that there are people with too much power on their hands.
That's philosophically, historically and biologically incorrect. Not to mention that it is incredibly naive.
Fights for power happen everywhere in nature. Occasional imbalances are not the problem. The problem is when a certain group or individual manages to concentrate so much power that they get control over groups.
> That means they have their power through some means other than wealth accumulation; popular election or something.
Although I could challenge you on this idea (quick, tell me one "poor" politician who was elected and continued poor after taking office), this is not the type of "power" that we are talking about, is it? In any reasonable democracy, the only "power" from an elected officer is the one vested by the people, for the people. Any elected officer that abuses their position for their own personal gain should be removed from office.
The "power" we are talking about here is the power to do things uncontested, or to get other people to act in ways that are against their own interests and values. This is more visible with rich businessmen like Bezos and Musk, but it also happens via conglomerates like Disney that use their media and news properties to openly mold society in ways that serve them, or the Union leader who puts any of their opponents on a no-work list.
https://en.wikipedia.org/wiki/Harry_S._Truman#Financial_situ...
So the question really becomes, will the outcomes for the company be as good when no one leading it owns it or benefits directly from its success.
Sounds familiar!
Without doing that it’s pointless, billionaires even today never realize gains and just rotate through loans backed by their shares.
https://www.crf-usa.org/bill-of-rights-in-action/bria-11-3-b...
What I like about billionaires is they cut through the red tape and often through the inefficiencies. I actually like they don't need consensus to decide what to use their money for. I don't agree that taxing that money away from them is a net positive for society.
There are some systemic issues that cause wealth inequality. We should focus on fixing those issue to enable more people to enjoy success. Not trying to take from the most successful individuals in the grand game of life.
I assume you mean "relative to people that are less successful". The answer is because the marginal value of wealth decreases the more you have.
If you're poor, $1,000 is the difference between your kid seeing the doctor or not. If you're rich, it's a nice meal out.
> There are some systemic issues that cause wealth inequality. We should focus on fixing those issue to enable more people to enjoy success.
The core systemic issue is that wealth is a positive feedback loop. The more you have, the more you can leverage it without losing it in order to get more.
Treating all levels of wealth the same is directly incompatible with resolving this positive feedback loop. You need a counterbalance that scales with the level of wealth, because the magnitive of the positive feedback loop does.
Fix the problems that exacerbate wealth inequality.
Remove regulations that inhibit competition.
No business is too big to fail. (Most big banks would have been destroyed in 2008)
Stop manipulating the currency to the benefit of the investor class.
I’m honestly not trying to be confrontational but you shouldn’t just impinge on peoples freedom to acquire wealth. Those who do shouldn’t have any. Those who have some level and wealth and try it. Well they are just pulling up the ladder behind them.
So what you’re proposing is just that a company’s shares are taken away from the founders/execs as the company grows. It’s not just that you’re taking wealth away from them, but you’re fundamentally forcing them to sell off control of the company.
but you’re fundamentally forcing them to sell off control of the company
That part is true. Billionaires can retain control of their company by being good leaders and providing value to the company, not because they started it 20 years ago and retained a huge amount of stock.
There is no other way. I don’t think you understand how shares of a company work. There isn’t some secret treasure chest of cash the owners have to pay that burden. They just have to sell off portions of the company because that’s what has value. This eventually results in a loss of control and dim-witted bureaucrats like the fund managers at black rock start to dictate direction.
The whole stance is antithetical to innovation all for the sake of wanting to take something because it has a high potential value.
This might mean that motivated found might work less hard to make their businesses as competitive and big as possible, and could slow down the pace of innovation.
If you require more than 100M in net worth to be "motivated" to work. There's a larger problem with you. Being a CEO/leader doesn't require some skill set that's given to you from some mythical watery being just because you're special.
if your friends are fine does not mean that there are no issues there. plenty of news articles were published about inhumane working conditions where people cannot go to toilet even.
Admiration of others leads us to the good path. Envy and pity are tools of the darkness.
We’re not talking about improving the break rooms for corporate SWEs.
There are people who are not motivated by money, but they’re not billionaires. They’re professors, priests, politicians, etc. Pope Francis has achieved more glory and fame than nearly any billionaire CEO.
Yes, the billions is hugely motivational to those who have them.
They can still own the trillion dollar company for glory and fame; they just can't cash out.
Also I don't think there should be a cap, but the tax rate should go up indefinitely, causing diminishing returns for higher earners. I pay a higher percentage of tax if my employer pays me more, but I still prefer higher paying jobs.
That is definitely the big question. Given that Gates is busy donating most of his cash to charity, there are counterexamples.
But even biting the bullet and accepting the premise, it’s not immediately obvious that losing all of the work from current billionaires would be a bad trade in exchange for substantially reduced inequality.
My counterpoint is that most billionaires don’t seem to be continuing to work hard primarily to get another billion. It’s more for the fun/fulfillment and status. If they can still have fun and status even without controlling as much wealth they will probably still go for it.
A charity of your choice vs being taxed more. If you had a few billion dollars to spare, which option would you choose?
>Why n̶o̶t̶ ̶t̶a̶x̶ ̶t̶h̶e̶m̶ ̶m̶o̶r̶e̶ ̶a̶n̶d̶ let elected officials representatives decide how best to spend the money?
>Why should so few individuals have outsized social, political and economic power over the whole country?
Regardless of which political party you root for I'd be shocked if your really thought elected representatives do a good job of spending money, especially to the point you think they should be given MUCH MORE money.
You just answered the question. Because they are the elected representatives. If you didn't trust them, why did you elect them in the first place?
In the last few years, elected officials (in the USA) spent over $10 billion on a wall. The previous admin's COVID relief bill included billions towards missiles, warships and other military spending. The current admin's $1T+ infrastructure bill allocates less than half of that amount towards roads, highways, bridges, tunnels, etc.
It includes billions in corporate subsidies and items like over $500M to Alaska including $100M for an airport when no other airport in the country even received $10M (AL senator Shelby is the ranking member of the Appropriations Committee). Middleburg VA gets $2M for a new town hall, and Palo Alto CA gets $3M for their history museum. Giving these people _more_ money is madness.
The question remains open.
Blaming billionaires is failure to see that the money is already available, it's just that the voters refuse to stand up. Why would more money in the government's hands change anything?
If you think 100 million dollar houses are egregious, you could try to make building them illegal. But then they'll just buy one in another country, or a yacht, or something similar.
A lot of this is why capitalism works.
If you start a company and that company becomes succesfull you will end up rich.
> Being a CEO/leader doesn't require some skill set that's given to you from some mythical watery being just because you're special.
Controlling a company requires shares, and shares are networth, it is good that companies are controlled by people who most understand them, and those are the people who started/built them.
There seems to be an illogical hate to people who have build companies that ended up being successfull.
If you are a small business ( non mega successfull company ), everyone is with you, "Small businesses are the backbone of our economy ", but then you win.
Voting shares don't have to have monetary value. Rememeber Google's IPO where the founders had stock with 10 votes per share, or Berkshire Hathaway's Class B stock with 1/10000th the voting rights as class A?
So a founder could retain control of a company without becoming personally rich.
I would think the power to control a large company would be worth at least something even if it is decoupled from the right to get part of any money they decide to give to stockholders.
:facepalm:
If you control a company worth $1T, someone is going to be willing to buy your share. If you're implying that voting shares don't have to be transferable, the question becomes how do you pick the next leader? The current owner gets to appoint the next in line? That's basically monarchy. The history I was taught says that only those at the top thrive under monarchy.
A lot of people dislike/hate Elon Musk for example, and usually they focus on two things: his tweets, and his wealth. Conveniently forgetting that prior to his work at SpaceX and Tesla (which he's driven) reusable rockets weren't a thing and EVs were restricted to oddities laughed at on Top Gear.
It seems to be the way, people look at the wealth and think "well that shouldn't happen". But it doesn't come from no where, it doesn't just appear.
For anyone who thinks this wealth shouldn't appear, let me ask this: if someone could discover a cure for all cancers — how much should they be allowed to earn for it? I.E. What price would you put on the cure for all cancers?
majority of billion dollar companies are associated with bad behaviour : anticompetitive practices, shady deals, government subsidies etc. amazon got billions in subsidies just for opening second headquarters. amazon is selling ripoffs of big brands. worker rights abuses. microsoft did many things to eliminate competition. list goes on and on. and I’m not even talking about uber’s shady projects to avoid government agencies.
so when success gets achieved by scams and shady behaviour, probably it’s not much to celebrate and reward.
Because it’s going to spend far more there. Nearly all large commercial builds get similar deals in tax deferrals because having employment is still a big net win for the locality.
Say 50 million?
> I.E. What price would you put on the cure for all cancers?
100 billion?
You've asked two separate questions there, but you're implying that the answer to one is the same as the other.
Just because you are capable of extracting a certain amount of wealth in exchange for something, does not mean that you should be able to.
how does that make any sense?
Shoulders and giants - there's no way you actually fully independently discover a cancer-curing pill. And even if you did, its existence would not and should not belong fully to you.
> its existence would not and should not belong fully to you
...if I didn't make it, it doesn't exist, so it fully belongs to me ..................
Whatever you do now, anything, is not just your own genius but its the accumulated genius of society. It would be quite literally impossible for anyone that "cures cancer" to have done it on their own. Not only it is extremely unlikely that they could do all work just by themselves (though possible) but they will have to rely on the work others have put through out the years... Work that in most cases has been funded through tax money!
So why would one person at the end of the line get to benefit so much from the collective work put by all of humanity to that point?
because the possibility of being the one to finally crack would be what motivates every preceding researcher as well.
Yes, indeed this is how things work in this particular system, so you are kind of making a circular argument.
For instance, I disagree with the whole concept of joint-stock companies.
Companies are comprised of people and people do not like giving up control they have fought for, whether it is reasonable or not. It is difficult for many to avoid the temptation to use a position of power unethically to retain it. Nobody wants to be RIM/Blackberry, but it's neither okay for a company like Qualcomm to make immensely inequitable deals that are tantamount to extortion because they own patents on essential technology.
If you're the only game in town, you have a responsibility to act reasonably, but many do not and often the founders/execs seem to think they are entitled to keep their success.
Yes, you earned your success, but keeping it is another fight.
Give them a public museum name for each $B for all I care!
Or more generally, just let them pick which program they want to have their face/logo on. “The Musk EV car subsidy” etc.
Let's say I earn over the threshold, and I can now either choose to continue to try and innovate and add value to society, or retire to a private island and just become a carbon contributor, I mean, why work myself into the ground if I can no longer benefit?
Most people have assets not liquidity too, so it's like saying, if you own too much, you have to stop. Well, what if Elon stopped and we reverted back to dropping rockets into the ocean? What if Bill Gates stopped and never did any of the philanthropy that he does?
I feel like this is used by people as a cheap excuse for a problem they can't solve.
That's a good question for the current situation -- why does Bezos still go to work? Once you have $100B, what tangible benefit do you get from more? Surely he's not doing it for the money, another $1B, or even $100B isn't going to change his lifestyle.
If a world-class marathon runner is 4 minutes ahead in a race, and can see the finish line, do they start walking? Or do they try to push themselves even harder to see how much more they can win by?
People are competitive, and are always motivated by achieving “more”, even if it doesn’t change the outcome for them. Does society benefit by billionaires pushing for more? I’m not sure, but I don’t think that the answer is clearly “no”.
Does society benefit by billionaires pushing for more? I’m not sure, but I don’t think that the answer is clearly “no”.
I think the correct question is "Is there a net benefit to society", not any benefit at all.
Especially past 100M
It’s not like my increasing savings bring me any material benefit.
Not sure what your point is here--Bill Gates is not getting paid to do his philanthropy...he is in fact trying to give his money away. Are you arguing that it's a greater benefit to society for him to acquire his billions and then give some portion of it away after the fact?
It's an interesting thought experiment--how might the world be different had Gates's assets been capped at $1B back in 1987 or whenever, and whatever earnings he made been allocated to a social wealth fund?
[1] https://www.imf.org/external/pubs/ft/fandd/2015/06/basics.ht...
Let's not pretend that billionares are working 1.44 million hours a week to earn 18000 times what the janitor earns working two jobs in an 80 hour week. The quality of a billionaires 'work' is different than 'real work' so what you feel intuitevely about work may not be a great touchstone for how billionaires should be taxed.
They are already doing that, so what would be the difference?
Your suggestion is to give it to the government, which will more wisely spend it?
I think not.
and usually universities are funded by governments.
private companies ruined internet actually.
you can argue that has been a net negative for the Internet, but it is clearly better for society generally.
There are a universe of people who earn and have a net worth much less than you who would be very happy with that ceiling figure. But would you?
Western politicians who float this idea are hilarious too - they're all multi-millionaires themselves, but a wealth tax is always proposed at a level that is "slightly more than what I have", never below.
If you set the limit much lower than my net worth, the government is going to have to support me.
But I'd think that someone with "only" $100M of net worth could scrape by on their own.
But most of my net worth came from taxable ordinary income that was invested into retirement accounts that are tax advantaged and untouchable until I retire. If Bezos was drawing a salary of 3 billion dollars for the past 30 years, paying 37% income tax on that income, then we probably wouldn't be talking about a "wealth tax"
Doesn't have to be much lower, just low enough to free you of the wealth you don't _need_.
> But I'd think that someone with "only" $100M of net worth could scrape by on their own.
Certainly. Someone with $10k of net worth and a minimum wage job could scrape by too. Nobody _needs_ more than that, surely?
> But most of my net worth came from taxable ordinary income that was invested into retirement accounts that are tax advantaged and untouchable until I retire.
Sounds very wealthy and privileged, to be honest. Surely you don't _need_ that it could be much better spent now helping less advantaged people who have never worked and don't have any savings or retirement. If, when you retire, you need further assistance after selling your house and other possessions, the government would be glad to step in and provide you a subsistence income and housing thanks to this wonderful redistribution scheme.
I agree though. Cap it at $1B
How else are you going to buy a decent airplane? The nice ones start at a few tens of millions.
Besides, you can only buy a okay superyacht for 100M, definitely not the best /s
How do we compensate everyone who was holding that company in their 401k hoping to retire? The government billionaire taxation has actually hurt the middle class (& upper class but non-billionaires) too in this case, by taking away value of their retirement funds and personal investments.
Do we pay the shareholders the money that was taken from the billionaire to make up the difference? Because then you’ve just created dividends, which already exists, but just with more steps and beurocratic overhead
It's a topic almost perfectly designed for a useless shouting match.
Meanwhile. In the 1950's, citizens in the US were expected to pay around 50% of the cost of running the government. Corporations paid 25% of the share and the rest were import and other use taxes.
Today, citizens are expected to pay 85%. Corporations pay a mere 7%, and they enjoy reductions in the other tax categories more readily than citizens and consumers do.
The elite business class billionaire CEO is just a symptom of this problem, and a fraction of the overall class anyways. Tiger Woods just joined the three comma club recently.. what was his original sin?
Does it mean something specific, or is it just a variant of “Jesus Christ!”? Just curious. Tried Google, nothing turned up on the first page. Not even urban dict.
- Monty Python, Monty Python and the Holy Grail: Screenplay
I don't get that tax back if I end up selling my house for half what it was taxed for last year. But I can appeal the evaluation for this year.
But I'd recommend selling enough of your BTC to pay taxes so you're not underwater if it goes down in value.
why do we need to keep growing gov't and adding more and more rules/programs/etc.? Certainly we don't need to keep spending more and more, cut it off and some point and stop growing it for some period..
Here's one good reason -- decades of underinvestment in infrastructure. The top tax bracket in the 1950's when the Interstate highway system was funded was 90% - now it's 37% and even that is mostly avoided by the most wealthy.
https://www.cfr.org/backgrounder/state-us-infrastructure
Another reason is the impending climate disaster -- former arable land will become unfarmable, many coastal areas will become uninhabitable or need expensive flood control, etc. This is going to cause huge costs and will almost certainly require government assistance.
And carbon reduction will also be expensive.
Perhaps too we can stop irrigating desert and grow things like almonds (and actual food) in places like Iowa (with the most class 1 farm land in the US), instead of Iowa growing animal fodder and ethanol.
Most of these "crises" are self-inflicted crises in management.
A really interesting read on the rust and cost is the book "Rust: the longest war." It outlines how quickly costs escalate over time when something as simple as Rust is not dealt with and it left to build up.
Also, 90% top marginal tax wasn't really paid. Look at our historic tax revenue vs GPD. it's remarkably consistent, around ~17-20% no matter what policies we have floating around.
I am certain that we could reduce billions in spending to find money for actually important things. we do not need to keep increasing spending/revenue. we need to decrease spending and keep the same revenue. that's the easiest path.
If my house is worth $1M in 2022, I pay tax on that $1M of value. If it goes down in value to $500K in 2023 (and is reassessed), I'd pay tax on $500K value in 2023.
If I own $1B of AMZN in 2022, I'd pay wealth tax on my $1B holdings in 2022, if the market tanks and AMZN is worth $50M in 2023, then I'd pay the wealth tax on $50M in 2023.
Just as with property taxes, a wealth tax is generally annual based on current assets.
speak for yourself! a property tax makes sense in theory: you're contributing to the entity that ensures your land is safe in the first place, but basing it on valuations instead of something like flat rates based on sqft is preposterous.
I'd go so far as to say that the degree to which the knowledge of such a tax affects your decisions relating to the property is enough to constitute a violation of natural property rights.
But let’s take your premise. The more valuable the land, the more an entity will spend to procure it (bigger army etc), and the more you thus have to spend to defend it, thus the more it costs.
Not quite. I can see what I’m getting back from the city for the property taxes on my home (or on my office).
It’s less clear to me what the city or government contributes to my company. I’m more inclined to say that its existence is a public service.
I think that’s more being paid for having given someone a whole bunch of money up front, that they can now use to more quickly earn enough money to pay you (loan in a different name).
When the equivalent power of millions of people can become concentrated into a single person, you get all sorts of weird consequences! Most of them not good for the public as a whole, and often with a corrupting influence on liberal democracy. It is indeed fitting then, that a solution targeted at this very rare and specific problem would look a little weird; even though it's extremely similar to the existing property tax that every home owner pays.
In San Francisco there is a 2.5 month window to appeal your property tax assessment. I did that for 2020, and was successful (the hearing was like a year+ later) and they gave me a refund.
I failed to do it for 2021, because I was under the mistaken assumption that they'd they'd also adjust my 2021 assessment after my appeal. They didn't. I guess that's on me?
I just sold that property for a loss and 15% less than my tax assessment, and I'm well past the appeal period for 2021/2022 sales tax year. So I think I'm out of luck. I just over-paid by 15%.
The places cost the same per month. But in SF, almost all of that was going to the premium/interest.
In Chicago, a massive amount was going to taxes and HOAs.
We tax real estate because it can’t be moved out of the jurisdiction.
I know six million American households who lost their homes to foreclosure in 2008 that might disagree with that one.
The S&P is down 20% in the last 3 months.
Of course size is not the only factor, which makes it complicated. Land or property value is probably a good proxy. If you house is >$1M it probably means you are wealthy.
Now you get one of two things in each individual case: Either people downsizing (good, frees up property for other people) or people paying tax (good for society).
And being forced to sell to some degree is by design. One elderly lady hogging the land that could house 100 apartment dwellings in the middle of a city for example.
“Owning Land” is a human construct.
And it would be no worse than compulsory purchases by government for infrastructure.
Or someone leasing where the landlord wants more rent so they get kicked out.
The other side of every "family was forced to sell" is "another family was very happy to move in".
There is a point where I think it's okay to factor an unexpected large housing market increase into the equation. To raise a community's property tax unrealistically because a mass influx of buyers are willing to overextend their credit doesn't make much sense to me.
Also, I think this applies even more to our current situation and the fact that a lot of these communities had nothing to do with the politically charged economic decisions our politicians made with close to zero debate, and ultimately, the economic fallout it has created.
In my home state in the Midwest I have always thought a better way to go about it in the future would be to factor median salary and wages into the mix. That, along with an unrealistic housing market increase. I'm not sure what unrealistic would be defined as, but median value increasing 2x in five years is definitely unrealistic. At the very least things like this should be debated.
If you need to unlock the equity you can get a HELOC. More generally, if you own an asset with a well-known pricing model you can use it as collateral for a loan.
To your second point I believe you do carry over tax losses for some time.
If you own a $1 million house with an $800k mortgage, you pay tax on $1 million of property, but you only have $200k of wealth.
Billionaires are the world's biggest whiners. Even a tax burden that's proportional to what normal middle-class people pay is the end of the world.
Ignoring the hyperpreferential tax treatment of capital gains, I assume? (LTCG are taxed far less than generic income, which in turn is taxed less than labor income.)
> You never got the income
It's not an income tax, so who cares?
Assets deliver utility while held; income isn't the only utility they deliver.
That's literally the point of wealth taxes.
Massive wealth doesn't operate in income or even in typical capital gains advantages you're referring to. It operates at a scale where the value of the assets are so great, banks compete to give loans to them, which are not taxed like income.
It's totally absurd to argue that loans from assets isn't income. It's used to purchase more assets, to purchase tax favorable legislation, to buy media to keep us thinking this issue is about paying capital gains on your retirement portfolio.
If Bezos will "never get that money unless he sells stock" was a true statement, then where do all the yachts and houses and other assets come from? How does he buy them? If the IRS suddenly recognized loans taken against asset wealth or any exchange of assets as income, the tax rates of the super wealthy compared to the average American would suddenly look sane.
Constant borrowing isn’t a free money machine, eventually you have to earn more to service the debt (income tax) or sell assets to pay it back (capital gains).
Have you ever taken a loan?
That seems kinda whack to me. If I get a $500k mortgage, it's not like I received $500k of income that year-- the house belongs to the bank, and I'll be making payments for 30 years. If I stop paying my mortgage, I'll lose "my" house and have nothing to show for it except an insane tax bill (just like Elon would have to give up some of his Tesla stock if he gets margin called)
The collateralized loans trick was really only semi-viable because of historically low interest rates. SOFR will climb up to the more standard rate of 5-15% APR, which we saw with LIBOR back in the day. At that point, the one-off 23.8% capital gains tax on selling stock becomes more competitive.
I don't think the loan and tax rates are particularly preferential.
Thanks to his twitter deal, he's had to publicize some info about how he gets his money. The interest rates on his loans range from SOFR+3% to SOFR+10%. Those rates aren't that low— even as a non-millionaire I could get similar ones from my bank (https://www.schwab.com/pledged-asset-line).
I pay 2.75% interest on my mortgage. So even Elon's best loan has an interest rate well above my mortgage. By the end of the year, his interest rate is on track to be around 3x higher than my mortgage! And like my mortgage, his loan has a large upfront payment and a minimum amount that must be repaid every year, it's not free money forever.
My effective federal tax rate is 20%. That's lower than the rate that a typical billionaire would pay on capital gains (23.8%).
No, it doesn't. For example, if I'm super rich and take out a loan using unrealized assets as collateral, then I could be taxed on the loan amount received. There are several such strategies that either force the sale of unrealized assets or tax other portions of the transactions when those unrealized assets are used as collateral.
What is bizarre is that somehow people making less than $200,000 a year can be heavily taxed while if you're a multi-millionaire or billionaire, suddenly things become so drastically difficult that you couldn't possibly be taxed on anything you do with your monopoly money.
The example you gave is, quite frankly, pointless in the context of discussing billionaires. Discussing real estate assets far less than $2 million is completely irrelevant to a discussion about people with net worth exceeding hundreds of millions of dollars, if not tens of billions of dollars.
> It is not wealth until you have it.
If that's true, then stop allowing people to turn it into wealth, which they do all the time.
With some good estate planning there is probably no tax to pay ever.
The point of wealth taxes (see Texas real estate prices) is to disincentivize rapid asset appreciation.
Texas and California are different in many ways and this is the main one (California income tax vs Texas real estate tax).
California showed (shows) that income taxes only sort of disincentivize inequality, whereas Texas shows wealth taxes very much disincentivize inequality, so much so that the government has to actively lobby to get truly high paying jobs there.
It's the only realistic option to provide a UBI: in a world where human capital is quickly depreciating, provide people with financial capital so that they can still be a part of the resource distribution and consumption game.
Having to write 10 digit checks to the government makes people behave irrationally. We are just not evolved for it and likely never will be.
Billionaire level wealth comes into existence by means of a concept that is alien and bizarre when you think more deeply about it:
"Percentage-based future-facing ownership".
Also known as "shares". Emphasis on the word "percentage". You're the 30% majority shareholder and founder of a startup worth some 1 million USD in total.
10 years later, it's turned into an empire. You're still the 30% shareholder but now of something worth 1 trillion.
Superficially this looks reasonable to people but it is in fact bizarre. You scale up wealth from 300K to 300B just by the societal agreement that there is such a thing as percentage-based ownership of a variable thing. Which is a concept that is entirely made up and does not exist in physical reality. In a way it is future-capitalism. You lay claim on value that doesn't even exist yet nor will it actually be produced by you typically.
This jump from 300K to 300B can't be justified or explained by "hard work", risk or any other personal attribute.
Imagine you go fishing with friends. It's your boat. You paid for it and need to maintain it. So the friends agree to give 50% of fish caught that day to you, to cover costs and as a reward.
The next day you meet your friends again and declare: by the way, actually 50% of all fish in the pacific ocean are mine.
How so?
I got "fish shares".
But you wouldn't do any of the fishing???
Fish shares don't care.
I empathize with the quick back-of-the-napkin math ("if we could just take Bezos' money and give it to the poor..."). But I think there's an important nuance here.
You're making it sound like the only group of people that would be affected by this are the folks with $0 in net worth, so that the upside is $100m. In reality, anyone who's ever earned the first $100m (not inherited or won in a lottery), only ended up accelerating their ambition and likelihood of doing a lot more. Case in point - all of the Paypal mafia - they are all working their asses off every single day, and none of them would have had the upside that you're talking about.
In short, your proposal would basically mean that you're going to force into retirement anyone who demonstrates to be a 1000x doer. In the worst case scenario, the opportunities those people would have created would be lost for a long amount of time (eg: creating a domestic automaker that turns the ICE industry upside down). At best, you would be expecting from unproven people who have not yet validated their abilities to execute on those opportunities with the same level of success as the 1000x doers.
So it seems to me that the question is not so much "what could we do with Bezos' money," but more "how much of Bezos' money are we comfortable with not being generated at all to ensure that he never has more than $100m."
Well written!
The other thing to keep in kind is that while having 100mm is a lot of money, it probably does not change your life in exponential ways compared to 10mm, so you can consider some of the wealth essentially “burnt”. Don’t worry too much about specific numbers, as long as normal people have enough purchasing power to survive and be happy.
I worked in Asia and had many conversations about where companies are founded and a lot (not all) came down to tax law.
If you have two equal choices and one has high taxes and one low, why would you start you company in a high tax jurisdiction?
> billionaires should not exist at all
Hell no to
> a heavy wealth tax
The federal government is the last organization on earth that deserves more money.
In other words, hell yes.
There are several ways to accomplish taxing the mega-rich that don't require rewriting the laws of the universe. It's just that nobody in charge, because they're either the mega-rich themselves or puppets of the mega-rich, wants to address it.
Are you seriously okay with the ultra rich living by completely different rules than everyone else? I think it's probably underestimated how much they get away with not paying.
You are allowed to keep control of a company, (e.g. Elon can keep control of Tesla), but then the stock has to be structured in a way that all financial gains are in a separate vehicle that will be taxed 100% as soon as the stock is sold.
Finally (and most crucially), the money raised by this “tax” will not go to a governments pot but directly be distributed as cash to all Americans to make sure that it can’t be wasted by bureaucrats nor used for partisan purposes.
Basically, if $500B is raised in wealth tax in 2022, by mid 2023 every American gets ~$1500 in cash to spend.
What do you think?
Most self-made billionaires in western countries exist because they have made something valuable that the public can’t stop buying or investing in. The public are just as selfish humans trying to do what is best for themselves, just like the billionaires.
Think of J.K. Rowling. She is a billionaire because parents are selfish and want to give their kids the best stories to read and watch.
Bill Gates made his wealth because people and companies wanted to use his software for PCs, and investors want a return on their stock investment.
Society can’t stop giving these modern billionaires money because what they have to offer is such a good deal.
The only way to make Bezos stop accumulating wealth is to have everyone stop using Amazon and sell Amazon stocks, which is impossible at this point.
The world would get on just fine without coinbase, stripe, meta.
$100m is an insane amount of money. Enough to buy anything you want. If people sell things for over $100m they'll soon bring their prices down.
They might manage this vision, take on more risk, etc., nothing about that is work enough for them to be rewarded orders of magnitude what they pay others to exploit them. It's a very basic morality issue, better that society wastes the product of exploitation than a single individual.
Everyone who is worth billions has their worth in shares. so if it goes beyond a billion, you tax it away. What if it falls, will you give it back? so you will keep redistributing and giving it back?
Fun fact in 2009 I interviewed at google and the HM said that 500 people applied to the job I was interviewed at(onsite) and there were 3 others that were also brought onto the onsite, so 4 out of 500 getting a chance to interview, with only one making it. Lets hope it doesn't get that bad again.
Especially when you have a brand like Google, people apply just to apply all the time w/o considering if the big G is a good fit at all.
Do you think restricting the amount of money people can make and therefore pay taxes on is a good way to pay for universal basic income? Elon Musk will famously pay something like $12 billion this year. What’s the best way to sustain welfare programs that you like without a large tax base?
How about take (in no order):
1. 1 or 2 fancy cars/suvs
2. Be able to travel business class (say once a month) for vacations and stay in decent hotels
3. Nice education (say 2 degrees at a top college)
4. Nice house (say 2 rooms per family member in a "decent" neighborhood) (add things like backyard, poop etc if you like)
5. Obviously enough money to pay taxes
6. Oh and ensure health-issue-free lifestyle
7. (Hobby or two)
8. (Ultra Branded clothing?)
See what it takes to get all of the above and double it. Or even 3x it. Ymmv ofcourse. I am not a traveller so fancy hotels or biz class is not a big deal. I am also not a car person so 1 and 2 are not big deals for now (things can always change).
I still can't see this needing billionaire status?
What if I have 10 ideas that require that?
Add a buffer for risk and uncertainty about the future.
And then consider what role location has on the whole package. If you want proximity to one of the global hubs / power centers, then you're looking at doing this all in a top-tier cost market.
Then you easily push into tens of millions. Breaking a hundred million to super thoroughly check those boxes isn't a stretch.
This is before considering an agenda / passion that you want to see changed in the world. And before any ambitious desires from family members and close friends.
What would be the penalty for an asshole like me having three hobbies instead of the two allowed under your plan?
Am I allowed to have one flute, or if I play professionally am I allowed to have two in case one is broken? Am I allowed to have an alto flute and a bass flute as well, or am I limited to just the garden-variety soprano flute?
I feel like there must be some way these two problems can help solve eachother.
Republics are a type of democracy.
the most fair approach is probably starting with "how little money should people be allowed to have" (UBI) and then what ever is leftover is fair game.
But I don't think it's so much the firing, as it is the Coinbase telling new hires "Offers won't be revoked". But then, not only revoking said offers, but then additionally firing 1,000+ people.
They're experiencing a bit of a PR relations nightmare ATM. Curious to see if this might hurt them with hiring going forward.
Probably the best advice you can give someone in the tech industry. Even when I'm happy and content in a position, I'm still constantly looking and interviewing.
I got burned pretty bad at two startups in a row where the founders were pitching rainbows and unicorns and one company just went bust and I showed up one day and they sent everybody home - no severance, no reference, nothing. The other scenario, one of the founders fled the country with the money and left everybody high and dry.
Both were eye opening enough where now I have multiple backup plans, I network like crazy, I listen to what people are saying, I watch and see who's leaving the company. If you see higher executives leaving en masse, its a lot different then a few low level sales people. In both of the above situations, I missed a lot of red flags I would've caught today.
You could reasonably ask whether that should be legal at all.
I find this a bit too cynical.., that said, it's also a good mental spot to not let your job define you define your job as much as possible. You try to make everything that you enjoy on a daily basis(hopefully you still have that possibility). Tasks that grow your skillset, new things, any reason.. so that if you're let go.. there's very few days you didn't profit.
Obviously Armstrong was never going to give a dime of his personal net worth to an employee, much less a former one, but there are such a thing as optics and public opinion. The juxtaposition of that purchase with layoffs at his company just doesn't look good.
Regardless of what one thinks of Coinbase, their decision to offer employees generous severance deserves massive praise. If you were on the fence about working at Coinbase, currently or in the future, it should be a major point in their favor.
If nothing else, it shows competence. Too many incompetent CEOs (and their boards) wait too long and then do layoffs with little or no severance. Instead of the responsible thing and laying people off early enough to give them a proper severance.
...literally this is the minimum they can get away with in some jurisdictions. It's illegal in plenty of countries to conduct mass layoffs without either a consultation period or putting people on garden leave (i.e, severance).
[1] https://www.shouselaw.com/ca/labor/wrongful-termination/warn...
Being rich isn't criminal, being criminal to get rich is.
That Armstrong liquidated a large position and moved it into real estate, plus the lackluster stock performance compared to what coinbase was likely promising employees leads to this feeling. For a while, coinbase was competing with the top firms in the world on Compensation - the employees probably missed out by joining.
But that's the breaks, I doubt many employees would have been happier if the founders and core investors in coinbase were taking a bath to.
sorry but this reads like you drank the whole bowl of US corporate kool-aid. the insecurity and stress the comes from not knowing if you'll have a job tomorrow in literal insanity. 14 weeks severance shouldn't be seen an some benevolent gift from a god-brain billionaire, it should be the bare minimum if they still have the right to fire me in a whim
I’m not advocating for CB - just suggesting that it’s harder to predict the future than you are implying.
To prevent this from leading to rampant inflation the US passed laws that regulated wages and prices, such as the Emergency Price Control Act of 1942 and the Stabilization Act of 1942.
Insurance and pension benefits were not counted as wages, and so employers that could no longer legally raise wages to get people people to come work for them instead started offering health coverage.
Americans, who before this had largely been on their own when it came to healthcare, liked this, and so even after the wage controls ended unions bargained to keep those benefits and over the next decade or two expand them to include vision and dental benefits.
By the early '60s it was clear that there was a serious problem inherent in this. Employer sponsored health insurance had become that basis for nearly the entire American healthcare system. People who then left that system such as when they retired often found they could not afford to buy their own insurance. And so Medicare and Medicaid were created to try to handle people who could not get employer provided health insurance.
We almost got major healthcare reform in the early '70s. Senator Kennedy proposed a single-payer system that would be available to every American. President Nixon proposed a system that pretty close to the ACA (aka Obamacare). Then Watergate happened and pushed healthcare reform to the back burner were it sat for around 40 years.
It was the best health care plan I've ever had in the US. No deductible, copays were literally $1 or $2. I had access to the entire Kaiser system for routine stuff. You literally can't buy an insurance plan as good as the medicaid that I got.
Of course, now I live in Canada. That's even better.
Mind you, this was in Colorado, which took a vey progressive stance on Obamacare. I'm sure that there are places where medicaid is close to useless.
You're also paying it out of your salary with employer. There's no such thing as "employer match."
Similarly large corporations can negotiate to get better insurance rates, and larger insurance providers negotiate to get more cost effective care.
(One of) the problems with the health system in the US is that once you exit this negotiation scheme, prices go insane. A hospital might list a procedure for 2 million dollars only to take home 50k from the insurance provider. I don't believe anyone has a handle on what the true cost of any health procedure is.
14 week severance bare minimum at a private company? That sounds very rich.
[edited for better manners]
Other "European" countries have much worse severance packages. So what Coinbase offered seems to be better than even the best country in Europe.
0. https://www.claimsattorney.com/2020/05/understanding-severan...
EDIT>> Correcting years
The last time my company laid people off it have very generous severance packages, way above the legally required 1/3 months depending on duration of employment.
Coinbase was generous, it could have chosen to give them exactly 0 and that would have been legal.
You're taking the best case scenario in one case and comparing it to the norm in another country.
1/3rd of a month is 1.44 weeks. To get 14 weeks, that would be 10 years.
You're right in that Europe generally provides less severance, but they do tend to sign fixed term, renewing employment contracts with rather lengthy notice periods for either side to terminate it. E.g. in Switzerland, statutory minimum after 1 year of employment is end-of-calendar-month + 2 months of notice, but typical agreements extend this.
Also, there's the whole concept where regulators are involved with layoffs and negotiate for payments and assistance in many jurisdictions.
It's obviously good that this is handled outside the employers control.
After that you get the normal unemployment benefits from the state which is capped at a low but livable level.
It is (in sweden) abnormal (and illegal) for companies to just fire people without cause, and the valid causes are pretty restricted. One of the few valid causes are lack-of-work (arbetsbrist), but even that triggers negotiations between the employer, the employee and the union, and is usually a last-in, first-out thing. The employment contracts are always including a fixed notice (I think it's 3 months regulated by LAS, can be lower if your on a trial employment up to 6 months).
As an example, the klarna downsizing was major news in sweden a second time because of their obviously illegal way of handling firings.
> Other "European" countries have much worse severance packages.
Please give me a source.
The source is in my post. They cover France, Luxembourg, UK, and the Netherlands, and the first three are worse than the Netherlands.
From 2-5 years it’s one month (to the last day of the month), from 5-8 years it’s two months, eventually maxing out at seven months after twenty years. That’s the notice period for the employer. It can and often is asymmetric but can never be shorter for the employer than for the employee.
However, these are the legal minimums. Many employers will have longer notice periods in their contracts which apply to both sides. Something like three months or so isn’t uncommon.
Severance pay can even lead to problems with the mandatory unemployment insurance (which in most cases will pay you 60 – without kids – or 67 percent – with kids – of your last net earnings for a year) that can reduce the payout from that insurance (and then it becomes a game of calculating severance vs unemployment insurance, which can be annoying).
More risk in US but also more opportunities.
1: https://www.npr.org/2022/06/01/1101505691/short-term-profits...
The fact that things shouldn't be like this doesn't change the fact that they are like this.
Lack of healthcare would have been a worry but I’m in the U.K. where we get it free.
How hard is it to fund your own US insurance on a tech salary to tide you over?
Healthcare is NOT cheap if you want to maintain the same plan. I had to pay $2K a month for a family plan under COBRA several years ago. This is the same as a mortgage payment for me. Typically your employer bears the majority of your insurance cost, but you pay all of it under COBRA.
For example, I had pneumonia some time ago and was in the hospital for about 10 days. The hospital billed by insurance something silly like $100,000. I ended up having to pay something like $4,000 out of pocket. I consider myself one of the lucky ones. It’s really important to review an employer’s health plans before accepting a job offer.
You will still have to pay your yearly deductible which is normally in the thousands of dollars. Then you also get to pay co-pays for every service regardless of where your deductible stands.
Don't forget that the insurance company gets to decide what is necessary, not your doctor.
It seems like tech-workers assume that things will always be easy on them when history clearly doesn't bear that out.
The whole system sucks really, but in today's economy I think most of these people will be just fine just because so many companies are hiring.
For example, in 2012, at Timeout, Aksel Van der Wal was promoted to CEO. He had previously been the CTO, and now we needed a new CTO. We made an offer to a person who had a great reputation as an engineering manager at another company. But he was on a contract he could not get out of, nor would his employer let go of him. So we had to wait 9 months, while he finished that contract, before he could join us.
The insecurity and stress are the human condition, my friend. That's what it means to be sentient.
We (theoretically) have control to improve and enhance workers' rights, and can make legislative changes to increase job security, or decouple the ability to live and subsist with employment.
Let me rephrase my original post: "We all die someday — and potentially sooner than you expect. There's no guarantee that any particular person will survive the next 24 hours. Even living in a bunker in the middle of nowhere, you could still have a heart attack!"
This is entirely distinct from the question of whether you should advocate for societal policies that make quality-of-life more robust/fault-tolerant to small upsets. I'm all for that.
My point is more that even if you do achieve a social-welfare utopia, you'll still likely be insecure and stressed, because mortality.
And, therefore, "insecurity" and "stress" aren't good indicators of anything other than having an overriding awareness of one's own mortality. So it's not sensible to base policy decisions on trying to lower them. Base your policy positions on rational utility-maximization, not on trying to achieve personal emotional well-being. You want emotional well-being? Go to therapy.
I've done this for myself. I can't be fired, and I have 3 different "career" directions I'm going in at the same time. I'm not a high flier in any of them, but at least one is bound to always be available. That's comfort and security.
Best for what?
That's a big "if". It's pretty dang hard to amass that much wealth without robbing the people around you.
That's indeed pretty generous severance-wise, but that $110,000,000 happens to be enough to keep each and every one of those laid-off employees on the payroll for another year (assuming $100k/year salary).
Completely agree. Layoffs suck and I hope no one reading this ever has to go through them. But, it could have been done a lot worse than this, that is for sure.
Also, if I'm leetcoding consistently, I'm going to be switching jobs as soon as I get a large enough bump.
This industry doesn't reward loyalty and you're recommending that engineers be ready to leave on any given day.
Can't disagree more. At my last job, I was in a senior position for 7 years, one of the earliest engineering hires. I loved my team, my CEO, the direction of our company, and advertised us to friends.
Then, one Friday, a close coworker was let go without me having any warning or say over the matter. Not during a layoff, just fired one day. After that week, I was practically paranoid 24/7. My boss loved me and I was getting raises, but the anxiety of whether I'd be let go disabled my work progress.
I didn't want to risk "fucking it up" so I became ultra-conservative with my code pushes, review cycles exploded, and I just kept putting off cutting out/replacing features.
It was so stressful that I recognized my personal psychology was deteriorating weekly. My anxiety-driven depression further disabled my progress to a practical halt. I quit the job.
The best work I did was when I was thinking about the actual work, not survival instincts.
[1] https://fortune.com/2022/05/24/elon-musk-jeff-bezos-mark-zuc...
I'm going to be honest, it's pretty fucked up to tell someone who just got fired that they're fooling themselves if they feel slighted.
Then again, I've never been laid off. The most "office space" like jobs that pay the worst sometimes are aware that they can't easily hire people and so shrink by attrition over time. "Good times" mean a non-zero 401k match. Not so good times mean they remove the option of buying company stock in the 401k, because you might sue if it ruins your retirement hopes.
I'm not saying this is all that terrible, because I don't think it is. It just puts the tech layoffs that get publicity in perspective. If you get laid off at a normal company, you might - gasp - have to file for unemployment!
People who need stability do trade it for salary. The union where I work can't even strike, but our pay is up over 10% from a year ago.
I highly disagree. The existence of these billionaires and their untold influence on the U.S. government and policies while being unelected persons is extremely dangerous to what little democracy is left and people at large. I view most billionaires as national security threats, and I think the government should as well.
3-3.5 months resignation/notice period is hardly worth mentioning, pretty standard in Europe, 2 or 3 months being the usual minimum. Sure, no need to come to work and still getting salary is nice, but in the end you will get same money by European standards. And for mass layoffs standards are even stricter, so this seems like completely ordinary layoff by European standards.
It's like saying 2 years warranty is extremely generous and great, while it's the legal minimum in Europe nobody would bother to talk about, heck even 3 years feels pretty mediocre nowadays. Half of my recently bought things like washing machine, headphones or hair trimmer have 5 years warranty (after registration).
> I've had the experience of being let go without notice and without severance.
That just means you sign crappy contracts, have very low standards and don't value yourself, if any company does this to you after probation period. And it's possibly illegal even in United Slaveries of America.
> Three and a half months of dev salary is pretty incredible.
14 weeks ain't 3.5 months any way you look at it, at best it's a few days over 3 months. Originally mentioned 12 weeks are not even 3 months.
Wonder if people could've been made to see this then. I went full on Chicken Little [2] and mostly just got treated like I was yelling at children to get off my lawn.
1. https://news.ycombinator.com/item?id=26808275
2. https://news.ycombinator.com/item?id=26808275&p=2#26812175
For example I do personal customer support for ~40,000 folks who take one of my video courses (programming and tech related).
I often write personalized multi-sentence responses to their issues and follow up to reply back to them as many times as needed to get it fixed within minutes or hours of a request coming in.
I think the big difference there is it's my business. The best possible customer experience outcome is the only option in my mind, if it would even hint at being anything less then I wouldn't have this business anymore.
To be fair I think customer support in general is a hostile environment for the receiver. Everyone coming at you is usually dealing with an unexpected issue in some way that's preventing them from being able to do what they wanted to do. There's been a huge range of things I've seen. Everything from super nice folks including huge amounts of details and are calm to nothing more than "it's not working" and in 1 case a death threat because Docker wouldn't run on his Windows box. I don't think it was a serious threat (I'm still alive), but he wasn't trying to be funny. He was really upset.
I don't let those things phase me. I help everyone equally regardless of how they treat me. From doing this for 5+ years I've learned that people act way differently initially when unexpected things happen but more often than not they calm down and apologize afterwards.
It's bare bones, but I think it's useful.
They see something really bad on their books that's separate from their core business. Just like how Lehman Brothers was a profitable bank that got shredded by one risky trading strategy.
These stablecoins have been devoured one by one, and each time they fall more people start trying to get their money out. USDC will experience a run and it might not be survivable without liquidating user account holdings, which will be a massive extinction event for retail crypto.
I doubt USDC is undercollateralized. I don't doubt that there are situations where it could depeg, but I don't think anyone ought to be going to jail if it does.
Given that their business is just a “buy sell” platform, they are trimming around to get just that
They have lots of other features like “NFTs, lending” etc and other investments in their UX (separating out to currency vs smart contracts vs defi) I’m sure all that A/B testing to get that will be squeezed now too
USDC: fully collateralized by cash or cash equivalents held in US banks - basically a money market fund
Terra: partially collateralized by crypto assets + algorithmic magic
Tether: like USDC but not held in US banks, and the actual collateral may be partial or of lower quality
Dai: overcollaterelized by crypto assets + algorithmic magic
These are really distinct things and your risk model for each of them should be different.
When money market funds were all about to break the buck in 2008 the Treasury department stepped in with a $50 billion insurance program and the Fed started buying commercial paper to prop them up. Will they do the same for USDC?
"The order further finds that Tether and Bitfinex’s combined assets included funds held by third-parties, including at least 29 arrangements that were not documented through any agreement or contract, and that Tether transferred Tether reserve funds to Bitfinex, including when Bitfinex needed help responding to a “liquidity crisis.”"
An honest bank or exchange would simply keep your coins stored safely for you. But many places aren't honest, and make their money not from the transaction fees but by lending out the coins you've got stored there to someone else. As long as people don't all ask for their coins back at the same time, this works great for them. Your coins will be entered into some investment scheme, to make them return a percentage rather than just sitting there doing 'nothing'.
One does have to be careful however not to lend out those coins to someone who just runs clean off with them, or invest them in some scam that accidentally tanked to zero. Otherwise that money they claim to hold may not exist any more, which causes a problem if the customers ever ask for their money back all at once.
They pay people in fiat currency, their expenses are denominated in fiat currency. It doesn't matter if they traded 1M bitcoins daily 6 month ago and still trade 1M daily today, their dollar-denominated fees on that trade has plummeted.
rather than “i wanna buy 1 bitcoin, regardless of price”.
atleast that’s how i think of things. in terms of dollars invested. not coins desired.
same with stocks. i say i wanna 5k in Coke stock, not 121 shares.
That's only part of the trading though. Volatility isn't measured in that way either, so as volatility goes down-- or stays the same as coin prices go down-- Coinbase still loses money. It's usually measure in the % of the coin traded. So volatility could remain stable at, say, 2% but when the dollar denominated market cap is 50% lower than it was 6 months ago then Coinbase is collecting 50% less in fees. In order for revenue to remain the same, volatility would have to double.
People that had $10k invested already and kept it in the market now have much less than $10k. They may still have 10 ETH depending on when they bought in, but when they trade those ETH Coinbase is making 75% lower in fees than if they traded them 12 months ago.
Coinbase simply cannot make the same revenue in dollar denominated fees when the dollar denominated value of those trades goes down, and it has gone down a lot.
volume driven by new money coming in will be reduced by the phenomenon i mentioned (price down, less hype, less money coming in).
So if we break volume down in 2 groups the first would experience what you’re saying and the second would experience what i’m saying. It’s the same with stocks but to a much lesser extent, especially because 401ks and institutions are required to buy no matter what
Not sure what percent of volume is each case.
Not to mention, what the fuck are you doing if you're not in an obsolete industry but each extra employee is not making you money?
With experience though, you can tell that people who make bold claims like this were always idiots gambling away their credibility, hoping the 50/50 lands in their favour.
[0] https://www.businessinsider.com/fedex-saved-from-bankruptcy-...
That could be bonds, gold, stocks, real estate, or why not crypto? Crypto is easy to transfer.
Assets with a cash flow have something you can calculate by discounting future income. But at what rate? The market rate? Some people have a higher time preference compared to the market rate, while others have a lower one. In any case, that preference is not negative as in the EU. Nobody wants to receive money later instead of now.
"Other tangible assets" are also a risky bet. Oil hit a negative price in 2020. If supply adjusts to demand, prices should go down as technology makes it cheaper and cheaper to produce things.
Even food is subjective. You can eat for optimal health, but few people are doing that, and instead eat much too much meat. Meat requires much more land per gram of protein.
What happens if people stop SUBJECTIVELY choosing branded sugar water? Coca Cola goes down, which is what "value" investor Warren Buffett owns as 6.71% of Berkshire.
https://whalewisdom.com/filer/berkshire-hathaway-inc#tabhold...
But what is the theoretically correct price of Bitcoin? In some sense it's just like every other asset, the right price is what someone else will pay for it. But what you actually care about is what someone will pay for it 1/5/10 years from now (especially if you plan to use it as a store of value). And how do you even begin to model that?
There wasn't exactly a huge amount of interest in the startup/Wall Street space for building speculative financial instruments around, say, ISIS-issued 5-year bonds.
Casinos. Seriously [1].
[1] https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.3.173
Look at where hold 'em is now. It still exists, of course, but you don't see poker tournaments broadcast live on ESPN anymore. It's not even a very popular livestreaming category. It definitely went through a boom, then huge bust, and then a slide into... not really irrelevancy, just kind of a continued existence.
IMO, crypto is headed for the same fate. It will still be fun for a subset of people to gamble on altcoins, to pump and dump and run schemes of dubious legality. And just like I wouldn't count out a poker resurgence sometime in the next decade, I wouldn't count out another crypto spike in the future. People never stop loving easy money.
Which relatively quickly died off.
People may be underestimating how popular hold em was in the mid-2000s. As another comment in this thread said, it was even more popular than crypto is now, and that's without the extensive use of social media that we have today.
On a more serious note and the likely answer to the question: customer support for 100000000 customers (as has been pointed out elsewhere in this thread)
[1] https://www.quora.com/Are-Netflix-employees-really-that-good...
They also presumably have hefty cyber, legal and financial audit teams to protect their assets, and position themselves in preparation for any changes in the landscape (which has been pretty rocky to say the least).
You would think so, but a lot of companies who are/were venture backed don't think this way.
There is a tremendous pressure to use funding to accelerate growth, which can work fine in a good economy, but can be a disaster in a recession when no amount of capital can speed up growth.
I think this leads to a lot of companies making bad calls like over hiring or building awkward products. I'm not saying blitz-scaling can't be a strategy, I just think it's treated as the only strategy that matters and people end up in hammer/nail situations.
The fun bit is that in the USA, you can (almost everywhere) whimsically fire anyone without cause and without any transition pay. So what's to stop a company from just hiring a bunch of people while they're growing, and just kicking them out whenever?
I think they already realised it was out of proportions, but you look really (REALLY!) bad if you fire 1000+ people when business is going well.
You only look slightly less really bad if you do so with an implied reason that you then simply don't communicate to anyone.
You are everyday one day away from a massive market crash or crypto heist to be let go.
(Yes, conventional companies too, but not to this extent)
This isn’t a McDonald’s or Walmart hiring unskilled labour at low rates, knowing full well that people are replaceable.
what a fool that CEO is, and glad I turned the job down and feel bad for the people who were sold the cool aid.
It appears they were hiring far too aggressively even at that time, but I think the CEO can be forgiven for not anticipating the current state of affairs.
Last quarter was -1.4% growth, so probably not growing strongly (but who knows, maybe just a blip...)
https://www.wsj.com/articles/us-economy-gdp-growth-q1-116511...
A more pessimistic view gives +1% for Q2: https://www.atlantafed.org/-/media/documents/cqer/researchcq...
This is typically an accurate measure.
By the way the official declaration by the U.S. bureaucracies of the onset of a recession typically lags the actual onset by a year or so.
The NBER defines a recession as a significant decline in economic activity spread across the economy, lasting more than a few months, normally visible in real GDP, real income, employment, industrial production, and wholesale-retail sales
https://www.investopedia.com/terms/r/recession.asp
But recession is a macroeconomic term that may not reflect the actual impact on consumers -- conusumers could be suffering through an economic downturn that's not technically a "recession".
Furthermore, I felt that other asset classes were overvalued when I got into crypto and I hardly think that’s it’s currently the same.
It also turned out to not be the inflation hedge I originally assumed it would be. Part of my current assertion is that cryptos value is tied to retail investors - the same who need to pull out of the market to deal with Very real expenses.
Let’s also give credit where credit is due. Brian may also be using the economy as cover. Give credit where credit is due - FTX came in and ate their lunch. Hats of to them.
This is a common misconception. I've never understood why people have had such unrealistic expectations of Bitcoin's price performance during the initial phase of inflation.
There are two types of people who buy Bitcoin: one that holds it for the long term and the other that treats it as a speculative investment, perhaps even swing trading with it. Access to cheap borrowing and a dramatic increase in the money supply has overpriced Bitcoin as speculators buy in. It has to correct.
Now, as the money supply begins to shrink and access to cheap debt comes to an end, speculators are forced out of the market. They need cash to cover their debts. Thus, as all markets begin to fall, Bitcoin is going to fall with them. A lot of us have always expected this to be the case. Eventually, once the speculators are washed out, we'll hit a floor. We might be there already. We might have a way to go. But there will be a floor.
The correction across all markets we've seen so far is just a market adjustment back to reality. Meanwhile, the debt bubble hasn't really started to "pop" just yet. We've seen record levels of debt lately, corporate debt in particular. Now we will begin to see over-leveraged companies begin defaulting on their debt as they head into bankruptcy. This will be the real crash. The full scope of this is unknowable. But there's reason to believe it will be historic.
Meanwhile, Bitcoin has no debt. Bitcoin doesn't care. Bitcoin will just keep on being Bitcoin. At some point, people will begin to notice that Bitcoin is the only thing that's not falling anymore. This will be the moment of change.
Leverage and cash flow figures are available for all publicly traded companies. The market already knows and already has it priced in.
Decreasing cash flow might pose problems. We'll have to wait and see.
It just makes me wonder what they'll be doing with 1000+ laptops and other devices. Do they expect people to send it back? Probably yes. I'd personally just declare: "I have low money and I had to fire your laptop service, thanks for the work of getting it to me, I'll be keeping it now."
I mean, that's what they do with the work of their employees. "I have low money and I had to fire you and 1000+ others, thanks for the work of making my company big, I'll be keeping it now."
If not, I feel sorry for the folks in charge of rounding up all this hardware to likely sit around and rot.
I think you could then expect a knock on your door from a couple of police officers. [1]
1. https://www.reddit.com/r/bestoflegaladvice/comments/v9acuq/l...
Like insurance companies and banks are just as much “tech” as anything else in crypto and nobody balks at them having skyscrapers plural worth of employees.
In the end, it has nothing to do with open society or for the people. its all about money and its just greed.
https://www.ibtimes.com/inside-coinbase-ceo-brian-armstrongs...
Capitalism is a harsh mistress.
What matters is what policies are enacted. Here's a nice video on the topic that summarizes a Princeton study https://www.youtube.com/watch?v=5tu32CCA_Ig
I agree there should be some incentive for entrepreneurs and the people who make “the business side” work, but doesn’t the degree of difference between Armstrong and his average employee strike you as unfair?
They were given money: their compensation that they agreed and accepted as being fair payment for their labor.
These aren’t rhetorical questions by the way. I genuinely want to know, what do you think?
So the point that the parent was making was "go buy your own ticket," not "go win the lottery."
Similar to people who say "if crypto is a scam, why don't you short it?"
There are various reasons why people choose to or not choose to become an entrepreneur or why people choose to or not to short something. It doesn't mean just because a person doesn't want to be an entrepreneur, then capitalism is perfect.
The argument is a strawman where-in the original discussion was about billionaire entrepreneurs and how much is a fair reward to them.
We understand the entrepreneur deserve to be rewarded but the original question is up to what extent. Like how in some EU countries, CEO pay is capped.
It's like a movie critic cannot criticize a movie, since the film-maker can just state "why don't you just make a better movie?"; A diner cannot criticize the chef because chef can say "why don't just prepare a better meal?", etc..
Bringing the personal into it is unrealistic since not everyone is equipped to be a movie maker, chef or entrepreneur but that doesn't mean those jobs are immune from criticism.
Even Warren Buffet has spoken about the excesses of capitalism and pointed-out that the rich are taxed too little as just one example of capitalism's flaws.
Capitalism is still the best system but that doesn't mean it's perfect or can no longer be improved.
It's a strawman and a diversion to just be talking about the general concept of fair compensation to CEOs and founders and then to just reply with "why don't you make your own company if you think the pay is too high"?
Same as crypto defenders "why don't you short crypto if you think it is a scam?"
Anyway, I'm repeating myself already, good conversation, Thanks.
So you’re more than welcome to criticize, but they’re “cheap seats” comments to a certain degree.
To stay objective about it though, the financial incentive brings a lot of innovation which helps all of society. They’re not taking your piece of the pie, they just baked some more.
Of course he did enough to deserve some fuck you money, but hundreds of millions? Slap yourself, fool, cos you dreaming
Coinbase was valued at 86B a year ago, so hundreds of millions would have been ~.2% of that valuation.
Not for CEOs, it's not. He already got rich off the IPO.
Also, its $133M, but let's be honest it's really like $110M for the land and then a $20M mansion on it.
Hence , I don’t see what 5K people can be doing at coinbase since some startups in Europe are doing the same with like 100 people...
It’s been known for years : startups overhire and lay-off when recession comes up.
With the “nazi revolution” in the 50’ , most startups rely exclusively on “Social Darwinism” , to solve problems or improve products , by having them fight internally and let the best ideas come to executives. Of course only employees who know how to navigate corporate politics are able to reach them and win those fights..
Those 1000 were not part of it, but they will have no problem finding another position somewhere else.
I would really like one of those "insightful" posts from pg telling us how to pick winners right about now.
When you posted anything negative and mentioned YC in the headline, the mods edited the headline. When Coinbase went dark during the first crypto winter (or was it the second?), asking for some/any help here was ridiculed by the YC powers that be (i.e pg)
What's your point? Are you confusing the market they're in contracting (alongside the whole market) with them losing?
Coinbase is a massive success. It has a 100 million users and is the best known crypto exchange for retail. They did pick the winner.
This layoff creates a lot of emotional attention but doesn't mean that much in business terms. They were overhiring anyway and all of tech is massively down. It's a small undoing of growing too fast.
What he ended up with, is obnoxious exchange rates @ Coinbase (triple what credit cards charge), hundreds of thousands of ruined lives, lots of suicides, and $100 million dollar mansion.
What A RECORD.
Don't get me wrong - I would love to live Armstrong's life (although I wouldn't be this shrewd), but as someone who believes in heaven and hell, I definitely would not want to die as Armstrong.
Before Coinbase, investing in crypto was super murkey even without all the volatility. They were able to make crypto accessible and provide marketplace that is not full of scams (so far). For people who controlled their risk by not exceeding crypto investment beyod 1% of their networth, it was great way to get in the market. If Ukrain war + COVID didn't exist, they had a decent chance realizing vision. If they can survive the storm, I think they would still be the most trusted crypto marketplace.
Whether Armstrong is pushing this shitcoins because he doesn't know better, or doesn't really care - its equally evil.
It's not because a person is greedy.
Inflation is a big one. This one is interesting because the two biggest factors (housing and gas) are completely artificial price hikes. Housing is a double whammy because we had artificially cheaper housing in the last 2 years because of the pandemic. That makes price hikes seem worse than they are (note: there still are significant price hieks in rents). There's pent up demand from the pandemic. There's some institutional buying of homes (which honestly should be outlawed). But really it's just price hikes "because we can".
Gas was triggered by Ukraine but that's just another "because we can" situation. The Biden administration could ban exports of refined petroleum products if they really wanted to apply downward pressure to gas prices. It's not that Biden has a bad energy policy. He seems to have no energy policy.
And then there's crypto. What a lot of people are learning is that the only thing holding up the crypto bubble was the collective belief in continued speculative gains. That's literally it, even for the (supposed) stablecoins.
I personally see crypto as a massive waste of energy (eg Bitcoin energy usage is about the same as Sweden's) for very little utility so I personally hoped the bubble would burst because crypto is such a massive example of a solution desperately searching for a problem. I can't say this was or is inevitable. Collective delusion can last a really long time. But I hope the bubble does burst.
Obviously this sucks if you work (or, rather, worked) for Coinbase. At least they're getting some severance. It may be a rough time for finding a new job, even for software engineers, for a couple of years, something that hasn't really been true for >12 years.
This is just an absolutely wrong-headed understanding of what is causing inflation that is premised on some corporate benevolence that existed prior to 2020 that no longer exists. [0] The question to ask is "why are prices able to be raised now"? The answer is contracting supply and surging demand.
[0]: https://twitter.com/Noahpinion/status/1525171240796712960
Um, did you miss the 2020 recession? It was the sharpest decline in GDP and employment in national history. It was also met with an historic government response to stave off poverty. And you can absolutely still point to the current inflation as unwinding from pandemic.
https://twitter.com/OrwellNGoode/status/1537137362391678976/...