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Comment by bandrami | Hacker News Reader

Sometime about 20 years ago we all got used to the idea of companies not having to actually make money on their business operations and I worry the bill for this is coming due soon

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It would appear that the relative tax inefficiency of dividends over buy backs (and lack of wealth taxes) has fundamentally messed up the business world.

Alas, I don't see that likely to change.

Along with the "borrow tax-free against unrealized equities gains" hack.

Taking on leverage risk and paying interest is a "hack"?

Yes, because it's income and we all know it's income and it should be taxed

so you want to tax home equity loans or 401k promissory notes?

401ks and loans for houses are already things which have specific tax carveouts, so the idea that those would be exceptions even if secured loans in general were taxed doesn't seem like a particularly bold idea.

Yes to both, though I'm willing to listen to a carveout for HELs on primary residences (particularly if they're for improvements)

What's the proposed link here? Wealth taxes don't seem to incentivize the creation of profit. If anything it's the reverse: business owners are incentivized to keep ploughing profits back into the company because it reduces the apparent value of the firm if it's not profitable.

The article says they had $5B in losses (half of which was -$2.5B for xAI) but also just signed a $15B/yr contract with Anthropic which would almost double their revenue

Anthropic is also allegedly profitable https://www.reuters.com/business/anthropic-nears-first-quart...

Anthropic is profitable only if you carry forward the discounts they get for the first two months of this deal. That's why they're specifically talking about Q2. They start having to pay $1.6B/mo to SpaceX in July.

But they can cancel with 90 days notice ...

True but they're still committed to providing the compute they're getting from SpaceX to their clients.

The cynic in me says this is a numbers game by Elon and Dario to screw up Sam's IPO, along with SpaceX's filing (using the individuals' names rather than the companies because I also think this has become damagingly personal to the players involved).

It's been that way for a loooooong time https://en.wikipedia.org/wiki/Tulip_mania

Is that not the commonly cited example for commodity trading, whereas meaningful comparison of fundamentals to market capitalization only started much later?

The idea is broadly similar, but I guess here's another example with a company this time.

https://en.wikipedia.org/wiki/Bengal_Bubble_of_1769

The point is that I don't think irrational exuberance in stocks is a recent thing.

Oh, they had those too back in the day: https://en.wikipedia.org/wiki/South_Sea_Company

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