VC Tom Perkins' big idea: The rich should get more votes | Hacker News Reader

VC Tom Perkins' big idea: The rich should get more votes

money.cnn.com

13 pointsskennedy51 comments

Its not an unprecedented idea. After all, when the country was founded, only landowning males got to vote. That said, saying it in 2014 is some variation of the old "democracy is three wolves and lamb voting on what to have for dinner." Its based on the fallacious belief that without civil society, people like Perkins would be at the top of the heap without any non-taxpayers to drag them down.

Some people may not pay taxes, but their buy in to the system nonetheless keeps our natural rulers at bay. Those natural rulers are not people like Perkins. Nerds with a talent for running financial models. Our natural rulers are those talented at leading people in the exercise of violence. Warlords, barons and earls of yore. Democracy is a bargain where the people acting collectively protect people like Perkins from the warlords that would otherwise make them their bitches.

It's funny that Perkins, who is old enough to remember WW2, should be one to forget this point.

The ironic thing about Perkins' comment about WWII is that Hitler's persecution of the jews shows exactly the opposite of what he claims it does: that when the masses turn a blind eye, no amount of wealth or scientific achievement will protect you from men whose talent is war and violence. It was an Atlas Shrugged moment, except it demonstrated that it's the ordinary masses that hold up the firmament of civil society.

> Our natural rulers are those talented at leading people in the exercise of violence. Warlords, barons and earls of yore. Democracy is a bargain where the people acting collectively protect people like Perkins from the warlords that would otherwise make them their bitches.

> [From the comment below:] Hitler's persecution of the jews shows exactly the opposite of what [Perkins] claims it does: that when the masses turn a blind eye, no amount of wealth or scientific achievement will protect you from men whose talent is war and violence. It was an Atlas Shrugged moment, except it demonstrated that it's the ordinary masses that hold up the firmament of civil society.

That is, without a doubt, THE best reason I've ever seen to seek to avoid too much inequality in society. It's not based on a priori political- or religious ideology, or on touchy-feely liberalism, but squarely on face-the-facts pragmatism. It ought to appeal greatly to thinking conservatives.

There is some logic to this. I think it was Plato who commented that a democracy was doomed once its citizens realised they could vote themselves largesse out of the treasury. Which is pretty much what is happening these days in every modern industrial democracy - government spending constantly increases and any suggestions of cutting spending are met by massive protests.

Example: in the UK media right now you will read many stories about the current government's "deep, savage cuts", and all the poor people who are suffering as a result of these cold, uncaring conservatives. But after all these cuts the UK is still running at a deficit.

Of course, Plato was an old fool who lived in the days before fiat money. Why raise taxes or cut spending when you can simply borrow more?

Funny how people always use this example as the poor voting themselves largess out of the treasury. The rich do this too in the form of ridiculously low taxes relative to the amount of money they have. Just because the number on your tax bill is super large, doesn't mean you have a super-large tax bill relative to the amount of money you have.

So true and also not a refutation of the parent. In the spirit of an eye for an eye one might observe that an entitlement for an entitlement leaves us all poor. Somehow the means is easier to learn than the consequence.

“The state is that great fiction by which everyone tries to live at the expense of everyone else.” ― Frédéric Bastiat

Seems to me Europe and US in more of an Austerity mode than anything else.

>Pressed for examples of how the rich were being demonized...

Really, CNN? You haven't noticed that for the past few years? Tom may be an idiot and an extremist... but don't play stupid about the war on wealth.

It becomes a "war" when the poor start fighting back.

Uh... they are fighting back. By voting more money away from the minority. How kind of us to vote for someone else to pay the bill. Ain't democracy grand?

Those historically low tax rates really show the muscle of the poor.

Whose historically low tax rates? As long as I've been working it has been well known that when you make more, you eventually jump up to the next tax bracket which has a higher tax rate. [1]

A single person making $10K (taxable income) in 2013 paid $1,058 in taxes... or ~10%.

A single person making $100K (taxable income) in 2013 paid $21,293 in taxes... or ~21%.

If 10 people each made $10K, they collectively made $100K and paid $10,580 in taxes... which is still less than half of what the one person who made $100K on their own paid.

[1] http://www.irs.gov/pub/irs-pdf/i1040tt.pdf

Edit: I did just get my taxes done so I might be a little more bitter about the topic than I usually am. But the numbers suck.

Right, and when you make $10k per year a hamburger costs $1, and when you make $50k per year a hamburger costs $5, and when you make $100k per year a hamburger costs $10.

In the real world everyone pays the same $5 for a hamburger,

A single person making $10k has money left over to buy a little less than 5 hamburgers a day. A single person making $100k has enough money left over to buy a little more than 43 hamburgers a day. 10 people who make $10k can still only afford 50 hamburgers a day between them after tax, only a little bit more than the guy making $100k.

That's why we have a progressive tax system. We think the guys making $10k should be able to eat and the guy making $100k probably shouldn't eat 8 times as many hamburgers as the guy who makes $10k.

C'mon. I know you're aware that the rates for the tax brackets have changed over time. Surely you know that the top tax bracket was well over 50% for most of the 20th century, and is now lower than that.

Yes. I'm aware they've come down over time. I would argue they've only been correcting a previous wrong. A 50% tax rate is just ridiculous. So, even if they are lower now than 30 years ago, in the past few years (the time frame I was referring to) tax increases for only higher earners have been put in place. The war has started.

"Pressed for examples of how the rich were being demonized"

Maybe he could start with the one where rich people are depicted thinking that they should get more votes than everybody else. I mean, only a complete strawman would actually make that argument, right?

Oh wait...

where rich people are depicted

You mean one rich person. Demonizing all rich people for this would be like demonizing all Christians just because of the Westboro Baptist Church.

And for the record... we've been demonizing the rich before this. There was a whole freaking Occupy movement devoted to making the rich public enemy #1 for little more than having more money. We even gave them a cute little name, The 1%. Like they were all just a bunch of evil assholes just because they had accumulated more money than us.

People like this have apparently forgotten that if all else fails, the hoi polloi will start voting with guillotines.

'Give us your money now, or we will give you the guillotine later' is not even a veiled threat, it is outright extortion.

It's simply a reference to history, as desperate people do desperate things. After all, what wouldn't you do to feed your kids?

This is a followup to his previous idiocy, when he compared not liking rich people to the Holocaust.

I wouldn't be surprised if he is intentionally being provocative, taking an extreme position so that the actual reality of tech workers driving up rents seems more moderate. It's like he's trying to get ahead of the controversy by acting as a lightning rod for criticism, so that rather than it snowballing, everybody gets mad at him and forgets about what they were mad at originally.

I've known several old-school Silicon Valley managers that do this frequently - they toss out a strawman that's way more extreme than anything anybody would want to do, which anchors your outrage so that whatever the actual goal is seems perfectly reasonable. It's basic behavioral economics - people do it in negotiations all the time.

A classic example: When Alec Issigonis designed the Mini in the 1950s, he wanted very small wheels. "Ten-inch (254 mm) wheels were specified, so new tyres had to be developed, the initial contract going to Dunlop. Issigonis went to Dunlop stating that he wanted even smaller, 8 in (203 mm) wheels (even though he had already settled on ten-inch). An agreement was made on the ten-inch size, after Dunlop rejected the eight-inch (203 mm) proposition." [1]

[1] http://en.wikipedia.org/wiki/Mini#Design_and_development

In politics, that's part of "moving the Overton window".

But here, it's hard to tell whether he's really trying to change the terms of the debate, or if he's just spent so long in his privileged bubble that he can't comprehend what life is like for 99.9999% of the world.

You don't seem to notice the irony of calling his comparison to the holocaust idiotic, while the parent comment was threatening the rich with guillotines.

So the French Revolution and the Holocaust/WW2 are interchangeable to you?

40 thousand deaths vs 70 million deaths...

Don't be daft. Things don't have to be interchangeable to draw comparisons. Dogs and cats are not interchangeable but if someone said "I don't like dogs because they shed. I am a cat person." we should be able to point out that cats also shed without fear of someone saying we think cats and dogs are interchangeable.

Edit: And no... I don't think animal hair and the Holocaust are interchangeable.

I'm not sure you understand "irony".

The guillotine was, historically, the symbol of revolutionary response by a victimized peasant class against wealthy, out of touch overlords. Yes, it's obnoxious, but it's basically correct to the situation. If the balance of power and distribution of wealth continue to tip toward a tiny minority, revolution becomes a real danger.

The Holocaust, on the other hand, was not a revolution against a class of wealthy overlords (unless you happen to agree with Hitler, and I'm assuming you don't). It was a racist genocide. The only thing the French revolution and the Holocaust have in common are politically motivated violence. The root causes of the violence are totally different.

http://www.kqed.org/assets/pdf/education/digitalmedia/us-vot...

1776 - Only land owners can vote.

1789 - "George Washington elected president. Only 6% of the population can vote."

An then they came up with the poll tax to keep the poor from voting. I'm sure Tom Perkins would like that again.

That might be one way to implement it. Another might be to treat a vote as a transferable property right. In that case the large number of votes left un-cast would represent a lot of money left on the table.

"Just taxes until there is no more 1%".

I don't think he quite understands how math works.

Nice he's buying into the stupid "people who don't pay income tax in our progressive tax scheme don't pay tax" narrative.

I don't like this idea, but it would be interesting if the tax we're talking about is sales tax. Everyone would get some votes and there would be financial incentives for millionaires to actually spend their money and juice the economy so that they could have more votes.

There are states that don't have sales tax (and some that don't have state income tax) so they'd get pretty screwed with that deal.

Clearly it's a thought experiment and you can't actually include real details in this example though. It pretty much falls apart from 1000 different directions.

You would make a great politician then... making plans without any real details. lol (just kidding of course)

Why would you reward purchasing consumption goods more than investing in long term growth? Sales tax is generally applied to consumer purchases, whereas the wealthy currently allocate much of their money to investing in businesses, which presumably use this cash to finance capital expenditures, or scaling already productive businesses.

Should we not give those who invest in the economy, and presumably in job creation preferential treatment over those who purchase yachts, airplanes, race cars, and other consumption goods?

No. Everyone that makes more money than me is evil and I must make it my life's mission to make sure their success is rewarded with a larger share of the tax burden. /s

Because consumption drives the economy at its most basic level. You can have the rich invest in companies they like or you can have consumers "invest" in companies they like through consumption. Clearly the consumers are going to be a more accurate reflection of what the market wants, and the long term viability of the company. Investment from the wealthy is indicative of what a tiny number of lucky people want. And many companies have billions of dollars they're sitting on, so clearly the market does not allocate dollars in the most efficient way possible.

Basically sales tax is the best way to know that your dollar is doing something of value.

In earlier times, I might have agreed with you.

If you look at the systems which recent advances have allowed humans to produce, you can easily see that the most valuable and desirable goods require highly integrated sub-assemblies and components, and the end products have high part counts. Your cellphone or computer alone is made up of hundreds or thousands of components, each requiring highly complex R&D and production, your car has 10k parts, an airplane 500k parts, and a space shuttle has 2000k parts. As a result, creating modern goods requires an ever-increasing number of 'steps', which in turn requires ever-increasing capital investment in R&D and production. We should be encouraging this investment if we want to continue to make more advanced and complex products available to everyone (including consumers).

Sure, I was trying to create a simplistic system here though. Clearly if we spent years we might come up with something sort of elegant and sort of fair, just like our tax code.

The point is it's easier to figure out what you're contributing to the economy via sales tax than it is via investment. It's difficult to tell the difference between the guy who has invested $2 billion in 10,000 different startups, and the guy who is generating no revenue sitting on $2 billion in non-productive land in the middle of nowhere. Clearly we don't want to tax investment in startups just so we can see who's investing.

This tax-for-votes scheme aside, one of the big problems with the American economy at the moment is that much of the investments that businesses are making are to IT staffing firms in Bangalore, and manufacturing companies in Shenzhen. We need the tax system to promote local investment and jobs creation.

https://news.ycombinator.com/item?id=7240119

disgusting. Maybe we should just give all the power to the rishest individual and call them supreme emperor. If your going to throw democracy out the window you might as well do it right.

Perhaps we could have some sort of contest, like pulling a stock option grant out of a stone or something.

That way we'd know that the ruler had the divine right.

Maybe it's not as bad as it sounds. "You are the richest person? You get to be president for 4 years, but have to pay 50% of your net worth for the privilege. Not twice as rich as the 2nd richest person? Sorry. No reelection for you, pal!"

That might be interesting. I wonder what the market price of being President would be? Would you be mandated to take the position if you were the richest person, or would it be an auction where anyone can bid?

Tom Perkins of "Kristallnacht" fame now suggests that money is a democratic medium.

Let's not forget how in Nazi germany the Nazi party and Kristallnacht was sponsored proudly by IG Farben, VW, Bayer, Thyssen, and so forth, and that while the Nazi party in public denounced capitalism and socialism as well as rentiers, the marriage between industry and nazi party was what enabled them in large part in the first place.

They do.

Yeah, I was thinking "Isn't that kind of how it already works?"

Reply on news.ycombinator.com