There's not that much wealth in the world
noahpinion.blog
noahpinion.blog
The world is complex, some taxes should be lowered, some raised, some government spending should be reduces, other increased, and other just reorganized. This short of nuance-less naive thinking only harms general understanding of what solutions to improve our society could look like.
I think there's something of a missing point in this article - the author points out that much of the richest people's wealth is illusory, but the corollary here is that if taxing wealth reduced their apparent wealth, that would probably be a good thing since it would mean the value of their stocks would be more accurately defined, and it's definitely better to have lower but more accurate stock valuations, it's even worth reducing the actual value of the stocks somewhat.
In a working Democracy taxes are a mean to redistribute wealth to ensure that those who do more have more, because hey, we need incentives to work, but those who do less still have enough to avoid a too big delta between the poorest and the richest witch create deep social fractures.
Taxes "to pay public services" are a nonsense. In a Democracy we should pay civil servant, those who work for the public, creating money because there is no "public debt" in a Democracy, "public debt" is a nonsense invented as a way to rule a democracy like a cleptocracy making people think they decide while they do not. A soft power of few on the many. Money creation in a Democracy happen through public investments, witch are constrained by physical resources (natural, manpower etc of a State) so they can't create inflation. There is no fractional reserve seigniorage and so on in Democracy. The central bank in a Democracy is a State owned institution.
Of course we are not in Democracies so money are not such tool to help exchanging goods, services with something we all agree to barter for. In this models taxes are a way to impoverish the people so it's normal anyone try to pay less and of course those who understand better, who typically tend to be wealthy, do their best to being impoverished less. Because that's the anti-taxes point: taxes are not used to ensure not too much difference between the poorest and the richest to keep a society united but are used to makes the 2030 agenda "you'll own nothing", where the you means that the speaker, the WEF, count to own anything. The modern soft form of slavery.
To respond on your main question though, I simply can't see a world where states that don't collect taxes to raise an army don't simply get dominated by those that do.
The fact you can't understand (beside my poor English, sorry) is a proof you live so much in a society POISONED by the current economical cleptocracy that you can't imaging something else, but actually most countries in the world in the past and various in the present do own their own money. China is an example, Russia is another. Why they are so powerful and remain powerful and gain ground against the west? Because of that. Because they run on industries, natural resources, etc not on finance. We was the most powerful when we have done the very same. It's not a matter of pseudo-democracies, it's a matter of who rule the State. Bankers who rule the west are very effective in PRs, but fails in the real world. They flourish out of a functional industrial system, then they demolish it and they can't recover because themselves fails to distinguish the unit of measure and the things they measure with.
BTW it's an old adage "a State try to resolve a crisis with taxes is like a man putting his feet in a bucket try to lift himself lifting the handle".
And just to make it clear, I also think the economy is absurdly out of touch with reality, and we do seem to live in a plutocracy, but what can we do with "taxes are an invention"? I agree with many of the things you said, but it's honestly too abstract to be of any use.
But, as the fine original article basically says, that doesn't make it wrong to want to redistribute the wealth. It won't replace other things, like a more equitable distribution of income, but it sure helps.
The problem is equity. Not only in it's economic meaning, in its social context. We don't really need equality, we need an equitable outcome. And there is no way that Musk being paid $54b for his actions in control of his companies, is equitable, no matter how legal, proper or permitted in law it is.
Except the people doing the actual paying, with their own money, voted twice to do it.
In terms of the social impact of Musk being paid $54b it really depends on what happens with that money. It's not a negative for society if it gets invested in something that adds value. If Musk stores it in his mattress then it has around zero impact. If Musk competes with other people in society for limited resources using that money then it can have a negative impact.
I don't think the real problem is Musk's pay. It's just a lightning rod. The problem is too many people with scarce resources. Paying Musk less doesn't solve that. The middle class is eroding not only because of pay disparity, it's because the life style of the middle class isn't sustainable when you have x100 the people wanting to have that life style. Now it's not exactly a zero sum game, we do have productivity gains and figure out other ways to get more out of finite resources, but it's also clearly not possible for everyone in China (e.g.) to have an acre of land, a nice house, and drive a Tesla (or whatever the middle/upper class dream is for the Chinese). So the question is should nobody have it or should more successful (or lucky or privileged) people have more and how much control you want to exert on these processes. Eliminating the top 0.1% via taxation doesn't have a certain outcome, it could make things worse for everyone, it could have no difference on the 99.9%, or it could move them ever so slightly higher. I doubt it has a huge positive impact. Then I guess you're going to end up with some remaining, maybe what you consider unfair, distribution.
Part of the economic process that's been going on is also the shift of resources/wealth from a smaller part of humanity to a larger part (again China and other countries going from zero to some substantial portion).
I don't think it's as simple as it seems.
It seems as obvious as can be that it's the latter that's correct. Would anyone seriously entertain the idea of, e.g., burning all of Picasso's original works, since there aren't enough for everyone to have one?
Ok. What does that mean? The problem with justice in general, and social justice in particular, is that different people have different opinions about what is just.
Let's set aside for a moment that it isn't even clear that "equitable outcome" at the level of a society is desirable, lets just consider the fact that every attempt to use force (i.e. government regulations, taxes, penalties, laws, etc.) to move significantly in that direction has resulted in catastrophe with the societies devolving into systems of corruption, authoritarianism, and scarcity. Have you discovered some new mechanism to avoid that outcome?
How many times do we need to experiment with communism, socialism, or other utopian philosophies before we realize they don't lead to a better society?
Show me the math. Redistribute it how? Help who, and help them how?
> The problem is equity. Not only in it's economic meaning, in its social context. We don't really need equality, we need an equitable outcome. And there is no way that Musk being paid $54b for his actions in control of his companies, is equitable, no matter how legal, proper or permitted in law it is.
If you mean equity in an economic sense, then it's perfectly equitable for a company with >=$54b in assets to transfer <=$54b to an individual. That individual will then pay income tax on said transfer, further funding the development of the society.
If you mean "equitable" as in "fair", then that's a value judgment - something is equitable because people feel it is equitable, not because of any objective measure. Even me personally, whatever wealth I have today I only have because I happened to be born within a particular country's borders and not another. Is that equitable?
We'd get farther as a society focused on solving the real problems in people's everyday lives, not focused on the people who have things we don't have.
If he wanted he could sell his holdings to an investment bank, maybe at an agreed-upon discount, which would hedge-out the risk and give him close to $200 billion, all without the shares hitting the open market. This is like how a buyout works. It's not like when a founder sells his company does the shares hit the market, but rather it's like changing entries in a database of ownership.
Also ,markets are very liquid, especially for the largest of tech stocks, and can absorb tens of billions of dollars of selling. Bezos sold billions of Amazon and you cannot tell looking at the chart where he sold.
For practical matters, someone who has a billion dollars, unless that wealth is tired up in Rembrandts or something, has much more useable wealth than someone who has $100k.
In order to claim the naive "asset-price/unit * num-units" calculation of net wealth, you have to make often wild and unevidenced assumptions. It's a metic made to inflate the egos to whom it applies, and to justify ragebait headlines, little else.
But how much Musk can make selling off his shares can be much higher or much lower than $200 billion, given that number is based on the, I think the term is "marginal price"?
If enthusiastic traders associate that price with Musk's own leadership skills (and his gaffes crashing Tesla's stock price suggests this is a factor), then the companies become much less valuable simply by having forced him to sell. The reverse is true for people who think SpaceX and Tesla would do much better without him.
And if Musk is as sincere about Mars and Optimus as I think he is (I think he's wrong, but sincerely so) then he should value each of Tesla and SpaceX in the trillions and believe that the stock market is just undervaluing them.
Tesla wouldn’t be worth $400B or whatever. He would not have kept voting control. They have to give him $50B just to keep the stock propped up.
So you tax every billionaire $900M and all that stock ends up in some hedge fund that says “your battery factory will cost $5B!? NOPE!” “You want to build a rocket that lands itself? You’re NUTS!” “You want to operate an online retailer that never shows a profit?”
That world leads to whatever progress GM, Sears and Boeing choose to give to us.
As for taxing wealth, I think a lot of young and naive people fail to realize that their eventual retirement savings will fall into the same category. Try and make sure your sweeping new policies to punish the billionaires don't horribly impact the ability for middle class to quit working before they die.
However, it turns out the wealthiest 1% pay about 40% of the Federal income tax. And the next 4% pay the next 20%. So if we had 100 people in a room:
1 person is paying for 40 people
4 persons are paying for the next 20 people
and the last 50 people are paying for about 2, but they're the ones saying the rest aren't paying enough.
Honestly, I think we should just say that the bottom 50% of the wealth curve doesn't pay taxes at all. Because really their contribution isn't significant, and then they can go find something else to bitch about. But then the politicians can't pander to them with appeals "to make the billionaires pay their share!". It's all pretty silly.
https://www.mercatus.org/research/data-visualizations/tax-bu...
I'm sure you can find other links with similar information if this one doesn't appeal to you.
It argues that income is more important but ignores the connection between wealth and income, which is especially strong at the high end of the wealth spectrum. The Walton family is wealthy precisely because of the claim they have on the economic activity of Walmart. The fact that the company is publicly traded just helps us put a dollar figure on the that wealth more easily.
Is the conclusion of the article. Not sure where commenters here are getting the "he's saying we cant tax!!?!?" angle from.
The point is that taxing 100bn USD of wealth by 1% doesnt thereby net you 1bn USD, nor is it even uniformly possible for all kinds of wealth, nor is it repeatable.
Wealth != Long term stake in a speculative asset.
This is true, even if they are measured with the same unit (USD).
Guess what? Confiscating the zero-net wealth is the point too. If those bond assets disappear, so do the bond liabilities. If the rich person owns all the bond assets while poor people own all the bond liabilities, policies that delete both are doing so quite intentionally. It isn't a bug that both assets and liabilities disappear.
Nobody (to within experimental error) wants to tear down factories for the sake of it and sell the parts for food. That would be an insane position. Some people might think that certain factories produce negative value for society and should be torn down, but that's a different issue. All the taxing the rich talk is precisely about the immaterial paper wealth, the bureaucratic documents that say things like "all the profits from this endeavour belong to this person" and are assigned value because the holder of the paper will receive profits in the future. That paper doesn't produce anything, but it does mean money will be taken away (by violence) from people who don't hold the paper and given to people who do. Lots of people want to get rid of those bits of paper, and lots of other people argue that this taking of money by violence is actually necessary for society to work, and that's where the argument is.
taxing income at 100% would also be bad policy - that fact alone doesn't mean that taxing income (at all) is fundamentally bad policy.
I don't find that the post really engages with any more realistic scenario.
I've had this conversation with the "there shouldn't be billionaires" crowd. Their response was almost always "do it anyways." The existence of people with surplus angers people in a deficit, regardless of if destroying that surplus helps. They want to do it out of anger against the system, not to fix the system.
That said, I don't think fixing the system is impossible. There needs to be a balance between preserving the hierarchy of (theoretical) meritocracy, and not letting too much wealth create a flywheel effect that warps economies. I've done some research of different ideas that could turn the wealth distribution curve from exponential to linear, thereby preserving ordering. Mostly these ideas revolve around each person having their own personal currency, with its own exchange rate which is dependent on different graph connectivity factors. In other words, a rich person's "$10" would be worth much less than a poor person's "$10", in terms of real value. I'd like to do more research into this, but I need help.
Spending other people's money is fantastic, equitable, fair. 20% additional tax on yourself? Cruel, unfair, inequitable.
Evidence: I live in Europe, not the USA, by choice, so I AM paying 20% extra tax and enjoying it.
The ideological difference there is that, in general, conservatives and libertarians prefer to minimize confiscation by force, and believe that society is best served by voluntary charities vs authoritarian taxation.
I.e. "I know how to spend my money better than the government, and I know how to help my community better than someone located thousands of miles away that don't know my neighbors or their problems".
[1] https://www.sciencedirect.com/science/article/abs/pii/S00490...
It might be worth taking a minute to understand what they actually believe, you may be surprised to find that even though they aren't part of whatever tribe you're in, that they are very reasonable people who also want the best for everyone.
> they project this tendency of theirs onto left-wingists to whom it doesn't actually apply.
Mmmm really. Here's an embarrassing article the Guardian had to write when just days after attacking Tesco for reducing its tax bill, it was discovered that the Guardian Media Group was doing exactly the same thing:
https://www.theguardian.com/help/insideguardian/2008/mar/06/...
Excuses offered included "The leader was written before journalists knew of the structure of the Emap purchase", "The relationship between the Guardian and GMG is a complicated one" and "the [Scott] trust was established in 1936 to avoid paying double death duties and ensure the continued existence of the paper".
Even Labour controlled local councils have been caught finding clever ways to reduce their tax bill, and they're a part of the government:
https://www.politicshome.com/news/article/embarrassment-for-...
Doesn't get more left wingist than the Guardian and Labour.
0: https://handbook.joincircles.net/docs/developers/whitepaper
People saw what happens when rich people "fix the system" and that's a good reason they don't want rich people to "fix the system" any more.
This is correct. World wealth is the amount of ressources made usable by humans through work. The economy is the production of those ressources plus moving stuff around (via logistics or virtually). The debate about siezing rich people's wealth is about how the ressources are allocated and who has the rights to decide upon their use. And there is a good argument to be made that an extreme concentration in the hands of very few is not efficient.
The problem is that when someone has enough wealth they gain the ability to control society. They have their hand on the levers of power, and there is no democratic input into how they pull or push those levers. Forget about socialism and capitalism. If you believe in democracy, then no person who isn't an elected representative can be permitted to accumulate enough power to make decisions that impact all of society in any significant way. That is why there should be something along the lines of a wealth cap, wealth tax, or whatever other policy you want to implement to make sure that doesn't happen.