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Comment by Gys | Hacker News Reader

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

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> 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.

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.

> 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).

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.

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.

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