We are a step closer to taxing the super-rich | Hacker News Reader

We are a step closer to taxing the super-rich

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38 pointspaulpauper50 comments

Taxing the super-rich might be admirable from a jealousy point of view. But I do not think it will change any government spending capacity.

Some numbers for the US.

The richest 400 people owned a total of 4.5 Trillion USD in 2023 [0].

The US federal spending in 2022 was 6.3 T [1]. The CBO projects a federal budget deficit of $1.6 T for 2024. Beware this is only federal level, not including spending and debt of individual states.

Government budgets are mind boggling.

Even taking all the assets of the richest people in the world (meaning nationalizing most companies) would only temporarily make a noticeable dent in government spending. Taxing them will make no difference. For most other countries these taxes will be even less relevant.

[0] https://www.forbes.com/sites/chasewithorn/2023/10/03/the-202...

[1] https://en.wikipedia.org/wiki/United_States_federal_budget

Federal taxes aren't about funding spending, no matter how much politicians and pundits say otherwise. State and local budgets are different, but since the federal government literally prints its own money, its budget isn't limited by how much they take in from taxes. Inflation is the real limit.

Taxing the ultra rich makes sense to me with the aim of preventing concentration of wealth though.

The US Federal government at best technically, not literally, prints its own money.

The Fed is an independent organization with US Federal oversight. It is responsible for the call to issue more money but a government body prints it.

https://www.investopedia.com/articles/investing/041515/why-f...

Taxing doesnt stop concentration of wealth the way you think it does. It pushes money offshore and kills creation of new wealthy, calcifying the current spread amd making the country poorer. Breaking up oligopolies, on the other hand, accomplishes exactly what you want and makes ot easier for aspiring wealthy to compete, cauding higher turnover in wealth, which is exactly what we want.

This is about fair taxation, not government spending.

If you want to propose a method by which we could reduce government spending, that would be very welcome! But we are currently discussing (from the article):

>an annual levy of 2 per cent of the wealth of the world’s roughly 3,000 dollar billionaires

and we are discussing it because (also from the article):

>the wealth of the very richest had grown by 7-8 per cent annually in recent decades — on top of inflation — compared to the 2-3 per cent growth rate of average wealth.

There is a widespread belief that the wealthiest people in the world pay less than their "fair" share of taxes compared to working class people. Whether you believe this or not, bringing up government spending feels like changing the topic...

> This is about fair taxation

Sorry, I mention that more or less at the start of my comment. I made the relation to government spending because I often read references that higher taxes for the 'super rich' can relief the taxes for the 'not so super rich'.

You wrote "Taxing the super-rich might be admirable from a jealousy point of view." which is a rather uncharitable way to describe a desire for the wealthy to pay their fair share of taxes.

That's not at all what you wrote, and you know it. You called people jealous and now you're trying to belly crawl away from that claim.

At what level of taxation, either relative or nominal, would a generic billionaire be paying their “fair share”?

I don’t have to have an answer to this to be concerned at the widespread tax evasion schemes that billionaires are engaged in.

Panama Papers baybeeee

Thanks for making my point.

I'm not allowed to be concerned without having precise answers to some internet bozo's question?

You must feel very intelligent.

The point isn't to do anything more than appease the pitchforks. Headlines like this with vague "Taxing the rich" will just let everyone who has their own idea on what taxing the rich is be happy. In some people's minds it will bring down the deficit. In some it is about sticking it to the man more than anything else.

What will end up happening is they will make a wealth tax, companies will stay private and hide behind accounting for their income and it will shut off wealth building for many.

> What will end up happening is they will make a wealth tax, companies will stay private and hide behind accounting for their income

That makes sense

> and it will shut off wealth building for many.

Can you elaborate on how would wealth building be shut off?

If companies decide to stay private the vast majority of people won't be able to invest in companies. As well as companies will be taken private more often. If you own a company like TSLA where the revenues don't make the stock price you would be better of being private and showing the company is "worthless" in terms of profit.

Also to add, public companies have to share their financial records. Private companies can keep them private for the most part (not to the government though). It will make financials more opaque.

> Even taking all the assets of the richest people in the world (meaning nationalizing most companies) would only temporarily make a noticeable dent in government spending. Taxing them will make no difference

This is where you are wrong. Hypothetically speaking, any one person can pay off all the debt.

For example, if I was hypothetically $2 in debt to you, but I had $0, I can do you a favor in exchange for $1, and immediately pay you it back for 50% of the debt. I can repeat this a second time with a second favor, and there is now 0 debt.

The point: you don't need enough money to cover all of the debt to pay off the debt. You just need to tax people...

Foreign nations own a lot of that debt. How does the analogy extend there?

The vast majority of the US debt is domestically owned.

When it comes to resolving debts, it's always the same anywhere. Debt after all, is just a measure of how much someone owes a favor, and money the opposite; a measure how much someone is owed a favor. In other words, debt/money is nothing but a measure of exchanging favors (ie trade).

So when it comes to resolving debts between nations, it is resolved in the very same manner: via trade.

However, forcing a foreign nation to uphold their trade agreements (debt obligations), or even domestically speaking, is a separate matter entirely (ie the matter of taxing). As far as foreign nations go when they don't uphold theirs, you can engage in war and confiscate things, and/or you can change trade agreements. These are actually the very same options you have domestically speaking (repos / taxes).

> Taxing the super-rich might be admirable from a jealousy point of view.

It has nothing to do with jealousy and everything to do with fairness and limiting the concentration of power.

Money only gets you things when you spend it. Real power is how much money you have to spend, not the market cap of the companies you own. There’s a tired meme that billionaires are somehow more powerful than the politicians in charge of all the money.

Why did I expect anything other than HN defending billionaires when reading the comments. In the most naive way at that. As if billionaires aren’t influencing policy directly.

Here[0] is a recent story of Texas billionaires who can more or less can pick the representatives they want

  Hours before the Texas House overwhelmingly voted to impeach Ken Paxton in May, a well-funded supporter of the attorney general issued a threat to his fellow Republicans.

  A vote to impeach Paxton, Jonathan Stickland wrote on Twitter, “is a decision to have a primary.”

  “Wait till you see my PAC budget,” he later added.

  Stickland is the leader of Defend Texas Liberty, a political action committee that has donated millions    of dollars to far-right candidates in the state. It is a key part of the constellation of political campaigns, institutions and dark-money groups that a trio of West Texas oil tycoons — Tim Dunn and brothers Farris and Dan Wilks — have pumped small fortunes into as part of a long-term crusade to push Texas to the extreme right.

[0] https://www.texastribune.org/2023/07/24/ken-paxton-impeachme...

Sorry, you misunderstand. I’m not defending billionaires, I’m condemning politicians.

Politicians and policy should not be for sale in the first place. The fact that they are means, yes, rich people have more power to control policy, but the solution isn’t to ban rich people from getting rich. We need to ban money from influencing policy. Instead, the Supreme Court decided that money is speech and political corruption is protected by the first amendment. We need to undo that.

The brain dead part are the people (apparently common on hacker news) who think that stopping people getting rich is a better solution than, for eg., campaign spending limits.

It does not accomplish that though. If you want to limit concentration of powrr actually use the antitrust laws and break these oligopolists and monopolists up. If you want to be fairrealizethat a dividend or capital gain was corporate income that was yaxed once already and to keep it equivalent to personal income it needs to be taxed substantially less when it becomes personal income (atleast up here in canada, fairness would involve cutting taxes on capital gains and dividends to makeit equivalent again).

if anything, this accomplishes theopposite of what you want because the aspiring rich will het taxed to death and the old money will avoid most of this, calcifying the rich and everyone else divide.

it might not change the immediate budget, but it WILL make the game more balanced and downstream can diminish policy by bribery

It will suddenly massively devalue the money as things that can be bought become more sought after. Then we can get them and then all the money in the world cant get them. The only thing we can not buy is more time, while desperateatly innovating, the tired hoping frog in the frying pan building insolation from whats at hand.

https://archive.ph/XNFug

What should the distribution of tax burden look like? People like to bandy about words like “fair share” but does that really mean? I’m not saying that billionaires shouldn’t pay more, but I just don’t understand what the framework is to determine if they should, and how much?

For those who believe that billionaires are a policy failure, the answer is they should be taxed more to the point that there are no more billionaires.

This was a no-brainer: In every modern country, there are laws that limit land ownership because if someone owns more than a certain amount of land, that land can amount to a self-sufficient small country and the owner becomes a de facto feudal lord. Moreover, he or she would have the legal right to declare independence or autonomy in many cases. So to protect the principle that sovereignty belongs to the people, we limited land ownership a long time ago.

But a loophole was left behind: The former aristocrats and the new capitalists who joined their class could own unlimited amounts of stocks, therefore they could own a majority of the countries' economies among themselves, through the control that they exercise via the ownership of said organizations. And here we are today, a dozen or so people owning more wealth than half of the world, a few thousand more owning even more, and worse, controlling entire economies.

Its way past time that such feudal ownership was limited. And it will be good even for those ultra rich: Now they can feel that they attained an actual goal, get celebrated as having 'hit the ceiling', and can move on from that specific activity to another without suffering from obsessive-compulsive hoarding disorder.

Venice figured it out eventually: beware when private edifices rival the states'.

Hot take: If I was super rich I'd rather put my money in my own charities where I can control how the money is managed and where it goes. If I hand it over to the Federal government, a lot of it will probably go to programs I fundamentally opposed.

Not to say that the super-rich shouldn't pay any more in taxes, I'm not really qualified to say. But these populistic initializes are mostly smoke and mirrors. They aren't going to work, and if they did work they aren't going to make as much difference as people hope.

Counter take:

This hot take is unnecessarily defeatist and smacks of the rote defense for maintaining the current power structure, namely "the world is too complicated maybe we shouldn't try".

I'd like to mention that we had significantly higher corporate, inheritance and income taxes in the 40s to 70s and it absolutely did moderate growth of billionaire wealth.

If such a thing is implemented in some form by all, or even most, major global national entities it could have a very positive impact on future global development. It won't be perfect but we only need to work to improve. And currently having billionaires control trillions leaves much to improve upon.

I guess it comes down to how one answers the question - do taxes exist to support the country and its means, or enforce economic distribution with the benefit to social welfare?

Cold take: If I was super rich, I wouldn't be in any better position to spend it on behalf of other people than the government. Who the fuck am I?

And whose best interest would a random billionaire have at heart ?

Because people are more careful spending their own money than other people's money.

I don't think that is remotely true. I think they are just as irresponsible.

As someone not super rich, this is already a problem and is fundamental to the operation of a functional democracy.

If everyone could allocate their tax dollars as they saw fit, then we would not see funding for issues that don't affect the largest contributors - like universal healthcare, subsidised female sanitary products, public education and transport.

For better or for worse, a subscription to a balanced well-managed democratic system requires financial contribution AND political participation.

For instance, if you're ultra wealthy and believe in the right for women to seek abortion, vote that way and convince others to do so as well.

Charities are often a hidden form of tax evasion rather than a means to allocate funds to causes an individual believes in (though there are certainly exceptions).

That said, if we are talking about the USA, that's not an great example of a well functioning democratic system - it's rated internationally as a "flawed democracy" (sharing that rating with South Africa, India, Malaysia).

If a super rich US citizen wanted to improve the allocation of their tax contributions, best bang-for-their-buck would be campaigning for electoral reform.

... or just change their tax residency to a country that offers a lower tax rate

How is this a hot take? Not wanting to give money to the government is practically the fundamental human condition.

What is worse is that if you dig deep into current government spending the money has a strange way of ending back up in super-rich people's pockets anyway, just with extra steps.

Great. The super rich can and should donate their after tax money to the charities of their choosing. The rest of us should work on creating efficient and effective government programs so that tax dollars go to where we vote them to.

I'm curious but why do you think you're not qualified to say the rich shouldn't pay more, but still feel qualified to say these programs are diversions that won't do any good?

As someone who isn't super-rich but is relatively wealthy I already do this.

Taxation in my country is almost entirely focused on redistribution of wealth (mostly to cronies, occasionally to proles) whilst the actually meaningful roles of government (as opposed to anarchy) like law and order, defence, border controls etc are neglected.

There's always some pet project. Lower in the thread someone is going on about subsidising female sanitary products, a complete boondoggle. Not only is it a trivial expense, the average man eats 10-20% more food so you could just net out the costs and just not move the money.

Even having a committee research that sort of thing is a waste, but it's just all over the place.

> If I was super rich I'd rather put my money in my own charities where I can control how the money is managed and where it goes

spoiler alert: this is already what is happening. You don't get and remain rich by putting your money in taxable accounts.

> They aren't going to work and if they did work they aren't going to make as much difference as people hope.

Considering how many people live paycheck to paycheck, can't properly house themselves, or just enjoy one week off in the year, considering how crappy the train infrastructure in the US is, considering the mountain of problems around, I fail to see how a better redistribution of riches doesn't do anything.

If we are spending money for the good of the people, maybe the people should have a say in what it's spent on.

I know this is controversial, but here's my take: self made rich people live in reality. Whatever ideas they have about reality will be tested relentlessly, otherwise they wouldn't have succeeded at business. Government bureaucrats however do not live in reality. They live in lala-land where they spend other people's money. Who knows how they got to the point where they can make the choice of how money and resources are spent, but whatever it is, the actions they take is never really checked against reality. There is no competition between government agencies where badly run ones are allowed to fail. For that reason alone, self made rich people are on average much better at spending money wisely, as we've seen with for example the Gates foundation.

Is this case only seeing is believing.

The billionaires will fight with all they have to prevent it.

At least the lawyers get something

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