Extremely logical - after a certain point, wealth is just meaningless numbers in financial computers, only expressed as the control of major organizations like corporations. Its literal unbounded power. We limited the power of kings and dukes. But we are allowing the same kind of power to those who hoard imaginary wealth that cannot be spent on actual things - it cannot be spent on actual things, because it is estimated that the amount of wealth stored in Swiss banks (leave aside derivatives etc) have already surpassed multiple times of the value of everything on the planet. So there is wealth on the planet that can buy the entire planet dozens of times over. And yet hoarding continues at great cost to the society.
> Swiss banks hold 8.8 trillion CHF ($9.7 trillion) in deposits [1], not enough to buy everything in Africa, not to mention the world
That's what they tell us. In any case, you could just take derivatives if you would like a more definitive estimate. Or futures. The latter is crazy as it monetizes the literal future of the planet.
Now compare the volume of derivatives in the USA, Canada, Germany, and other parts of the globe.
Point still stands…Swiss bank assets can’t buy even Africa, not to mention the whole globe.
And that’s not “what they tell us.” Swiss banks are required to report their deposits to regulators and always do that. But conspiratorial people always look for a boogeyman under the hood..
What part of that is 'conspiracy'. Replace the swiss banks with derivatives or whatever 'investment tool' or concocted wealth that is sucking the planet dry if that example is not to your liking. The point still stands.
But money is meaningless. Your "money" in the bank is just a number their systems says you have in their virtual game. And in turn, the same for them and the Fed. It's easily changed in a second.
Money is a measure of value, and value is conferred, not intrinsic. Therefore, money is what we believe it is, and all things considered, it looks like we think it's worth something.
> As radical as they might seem, calls for limits on wealth are as old as civilization itself.
Well, knowing that, one could reasonably wonder why they never succeed. Could it be something about human nature that prevents utopias and good intentions from working as planned?
Greeks used shards of pottery called ostraca (ostracon in the singular) to vote for people they wanted to exile. Themistocles was a famous general who got exiled and we actually having surviving ostraca with his name on them.
I meant no lasting solution to inequality has been found so far, certainly not by using force/laws/coercion. Surprisingly, that doesn't seem to discourage certain people to keep trying that path.
Let me just run this through the trusty ol' DeSnarkifier 8000... clunkhumDING aha, here we are: "There was severe wealth inequality in the past". Hm! Very true! But it doesn't really advance the discussion from "it's never been this extreme", does it? And to address that point, "dozens of castles" begins to look unimpressive next to the wealth of e.g. Jeff Bezos, whose personal fortune exceeds the entire world GDP until approximately the time of William the Conqueror.
Bezos doesn't own entire states, and he can't use his wealth in the full on-paper value. Literally owning country-sized plots of land, all its natural resources, its people and everything they create including their children, having the privilege to tax all trade going through and assign trade monopolies is incomparable to anything Bezos might own even if he becomes a centi-trillionaire.
It was much, much more extreme for most of human history. So much more that I can't actually blame you for this mistake because it's that hard to comprehend how incredible the difference is.
I guess it depends on how you measure "power". By "influence and control lives" metrics, Bezos is more powerful than most medieval kings. Back then, a population of 1-2 millions is quite good for a country with the top ones being around 10-20 millions.
Amazon alone directly employs and provide the livelihood for 1.5millions people. That is comparable to a quite a great king in the Middle Age. Amazon also can influence trade and businesses of countless other merchants and groups in other countries unrelated to these 1.5millions employees by means of blocking access to AWS or removing their products from Amazon. Its reach is global, a feat not many kings and emperors of the past could boast.
Bezos is nowhere near the lowest medieval noble, much less a king in his power to influence or control lives. Do you really think he could force his employees to fight a war for him? Bezos is not the only option his employees have - but you had no other option than follow your lord's direction in the past.
If Bezos blocks my access to AWS, I run my Terraform script on Azure. If he blocks my access to Amazon, I'll buy my next box of useless stuff on AliExpress. 5 minutes and Bezos is no longer part of my life.
They make the mistake of thinking the government will do a better job than individuals. When the government is often stacked with the most useless, theiving sacks of lazy crap in society and should be atleast as big a concern as any rich person.
they also confuse the negative effects of market power abuse caused wealth accumulation and wealth accumulation from improving the production possibilities frontier. we have laws called antitrust to stop the former we just need to use them a lot more like we used to post ww2 and pre 1970s. Damping the latter wealth accumulation is a really dumb idea and should be avoided.
theirideas on ingeritance tax is honestly just naive. They will capture a bunch of the upper middle class guys and the really wealthy will avoid it, as they always do. What that type of inheritance tax will do is fossilize the ultra wealthy and everhbody else
They make the mistake of thinking the government will do a better job than individuals.
maybe they do, maybe they don't. but by preference, it is easier to demand transparency from the government than to demand it from individuals. because transparency from individuals implies removal of privacy.
so i'd rather give billions to a government and have it clearly documented how they spend the money instead of demanding the same from individuals.
Your statement about government is very narrowly potentially true about only a very tiny slice of western democratic governments (and some of their vassals/former vassals) in the last 200 or so years and is nearly universally untrue about every other government in both time and space.
Also you seem to be a bit confused about the flow of funds. You aren't giving anything to anyone. This article is all about taking from some people with an arbitrarily chosen amount of earned and unspent income. if you are referring to all the transactions you willingly (if begrudgingly) participated in trading your money for goods and services you wanted from these people, only the times you had to pay a higher price because of market power abuse should be of any concern to anyone and the solution to that problem already exists in law via antitrust law, we just have to enforce it better, there is no requirement or benefit to arbitrarily confiscating these people's assets in solving that specific and actual problem.
i was referring to the citizens as a whole deciding that money should be taken from the rich and be given to the government for good use.
and i am not talking about current or past governments but about the future. as obviously the idea of limiting wealth is talking about the future too.
it should be clear that implementing this requires a government that can make good use of those funds.
governments can change, and they need to change in order for this measure to be successful.
this article needs a followup to address two points:
what kind of government do we need in order to make good use of that money?
what will the actual effect be of a limit? because the reality will not be that the government will continue to get lots of money, but those people who have reached their limit will stop accumulating money, which will change economics and leave money more distributed without the government getting all that much.
Yah, that's not giving. That's using force to take from people. I realize you aren't talking about history, it's why you are saying things that are so incorrect. You are failing to look at all the times in history we have run shades of your proposed experiment to understand why it has never ended the way you envision.
The answer to your two questions becomes obvious in a historic context. Tax payers object less to taxes when they align with their preferences so the only government that has a chance of avoiding stagnation as the rich change their structure to avoid your new policy is one that actually gives tax payers the services they want in an efficient manner (if you want services for others it means finding a way to provide them in a way that the benefit to the tax payer from network effects is equal or greater than the cost to the tax payer).
Barring an efficient and responsive to tax payer preferences government, the outcome will be stagnation, capital, and competency flight as people smuggle every asset they can out of the reach of the coercive policy then finally smuggle themselves out if they can. After a few generations this leaves you with a much weaker, more incompetent country ripe for takeover (if anybody stronger is experiencing expansionary population growth) or ripe for further stagnation and weakening until its weak enough for an external force to find taking it profitable regardless.
i fully agree with you here. that's what i intended to address in the last paragraph. if this isn't done right then it will not have the desired effect.
i am not even trying to begin speculating how to achieve the desired effects.
i don't understand near enough about economy to have any idea how to actually do this. all i am talking about is that whenever there is a significant surplus of money, then it is not private individuals who should be in the position to decide how to spend that money.
the latter is the situation we have now. there are individuals and companies that have acquired an enormous surplus of money, and they get to decide how to spend it. that needs to change, one way or another.
there is also another dimension i'd like to add: this needs to happen globally. the idea that someone moves their wealth from one country to another needs to disappear because the laws about this should be the same everywhere. as long as there are countries where unlimited accumulation of money is still possible, then limiting extreme wealth anywhere else is not really going to be successful either.
in other words we are not going to be able to really address this problem until we have a global agreement that this is a goal we want to achieve.
I pretty heartily disagree here. There's no such thing as a surplus of money (except in the sense that a government can print too much of it and cause inflation). There's an allocation you don't like. I don't care about the allocation as much as I care that how we got to the allocation was as coercion free as possible. That means government spending should more closely reflect the preferences of the tax payer so government coercion is as close to only coercing free loaders into not free loading as possible. This also means market power abuses from businesses and labor need to be mitigated. We should probably be much more actively breaking up large corps and making anticompetitive business practices much more per se illegal. We are much closer to this now than we have ever been in the past, with the exception of post WW2 to roughly 1970 where we were much better at enforcing antitrust, we basically just need to drift back in the direction antitrust in the 1960's and make a whole bunch of dark pattern and other anticompetitive business practices illegal and we would be great.
This surplus of money idea you keep mentioning is just wrong. The rich primarily have shares in businesses and other non cash assets. They often have these because they founded businesses that make our lives better and I have no problem with them having that wealth because we are in a repeated game here and those guys showed promise in the first round, I'd rather they have the money to do angel investing, etc in future rounds to generate the next round of good business ideas to make our lives better. I have a lot of problem with these companies getting big and anticompetitive and I have outlined how to deal with that above (it's not by confiscating wealth).
Also this happening globally would be a disaster. You want many small to medium size governments all trying different stuff so that when one government inevitably screws things up you have options. You don't want a monopoly in government either.
my apologies, english is not my first language, so sometimes my choice of words is not in line with that of native speakers. i think we actually agree. what i call surplus you correctly identify as allocation. and i also agree that the manner of how that allocation was achieved matters more than the amount. but, as you say, market power abuses need to be mitigated, and these are enabled even if the power was gained without coercion. an accidental monopoly is still a monopoly and needs to be stopped if that power is abused.
i disagree that doing this globally would be a disaster. but maybe we need to flesh out more what we actually mean by that. i have a sense that in the end we will find an agreement.
monopoly power and market abuse is a problem everywhere. i have lived in many countries and i have seen the same patterns repeat over and over again. yes. different governments should have the freedom to try different approaches. my point is, that we need to agree globally that market power abuse and anticompetitive behavior is a problem and needs to be stopped everywhere, and so no country may create a safe haven to enable those companies to continue their behavior.
From what I hear, wealth above $50M-$100M is really only useful for status or power. Once you've hit that level you're able to buy pretty much anything material that makes life nicer: a second house, a yacht, servants, a private jet, et cetera.
People have identified the private jet as the most expensive thing a person can buy that substantially improves your life.
Beyond that point it's more of a status game than real improvement. Yes, a 200ft yacht is nicer than a 50ft yacht, but the difference is marginal. The 7th house isn't adding much.
Musk cares about colonizing Mars a lot more than houses, and that's a goal that requires much more than $50M-$100M. I agree that it's a critical goal and believe that it would be much delayed if removed from private decision makers by a wealth ceiling.
In some ways it's the other way around. Musk (currently holding assets of ~195B) is able to spend billions by selling his ownership in SpaceX (currently valued at $180B) and Tesla (currently valued at ~$550B). Musk doesn't need to sell billions for SpaceX to go to Mars or Tesla to make a new car if he never cashes out in the first place. That's why the hard part is (usually, outside of ideological effort) "then why would they bother to keep doing all the work if they don't get anything out of it?".
It's also a reason wealth is a hard thing to really track when you want to limit it. Is that corporate jet 1/5th the CEO's because he is 1 of 5 that uses it or is it not part of the CEO's wealth at all? There's not really a clean way to cut this sort of thing that I've seen that doesn't either lop off things that aren't personal wealth by accident or allow squirreling away personal wealth in ways it doesn't get counted. That's the hardest part of this kind of thing IMO.
"Among a representative sample of Dutch people, for example, Robeyns and her team found that nine out of ten respondents agreed that having wealth exceeding €4 million for a family of four — in terms of ownership of certain assets, such as a mansion, a second home, luxury vehicles and a specific amount of savings — qualifies as being super-rich. In low-income countries, that threshold could be much lower."
Interesting to learn that limitarianism is an ideology that respects national borders.
They can be whatever they want. The point is the Dutch don't control Kyrgyzstan not that the Dutch should wait for Kyrgyzstan to agree to how the Dutch want to live/regulate themselves or that the populations themselves have different importance.
The point is that they are trying to address inequality and immoral use of wealth and the article treats us to biblical and historical examples. Then the idea is applied "equally" only within political and regional constraints. Is limitarianism a philosophy or political stance?
Why does whether the entire world is ready to and can feasibly adopt the idea at the same time play into what the idea is? Why can't it be both a philosophical stance and a political stance at the same time?
They desire wealth equality and consider it morally sound. That doesn't mean they also have an answer to every problem external to them or expect a global kumbaya about it overnight. This does not preclude the idea being anything in the same way one wanting safety regulations in their country isn't precluded by solving every other safety regulation problem around the world first, at the same time, and via the exact same steps.
I don't even particularly agree with the idea, this line of "gotcha" just doesn't follow.
Not sure what you are calling a "gotcha". You seem to be misunderstanding or misrepresenting my statements, I never called for them to solve world problems. I don't necessarily disagree with the premise, I simply ask for consistency of the idea. Implementation of it is another discussion.
The "gotcha" is the surface level claim it's inconsistent because it follows borders (indirectly initally stated for diminutive effect). That's not inherently inconsistent in itself, I've attempted to explain why, and you've given no defense as to why it should always be inconsistent and how that explanation applies to other philosophies considered consistent.
Disagreeing with an ideology comes down to more than parading a surface level claim to declare the entire idea misaligned. You have to dissect that idea, try to find ways to defend it, then cleanly counter those ideas. Throwing up a facetious one liner is the exact opposite of inspecting a philosophy and it's easy to misunderstand any set of morals that way.
As another example of why it's poor form of logic: "He thinks it's okay to kill some people but not others, that must be unethical and misaligned - why does it matter who it is it should always apply equally! The morality is therefore inherently flawed unless this is corrected." when the actual moral was that there are only certain cases it makes moral sense to kill someone (with some justifications if you dive into it) like compassion for terminal illness. Instead of the surface level "gotcha" denial you would dive into what these reasons might be and why you disagree with them, not just blurt the surface disagreement. This tends to be a lot more discussive of the idea instead of immediately dismissive, even when you ultimately disagree with it.
Nobody needs more than a billion dollars. Nobody even needs more than 10 million dollars.
But that isn't really the question(s). The real questions are:
1. Can you morally take what others have, just because they have more than enough? By what standard of morality? And, given that "don't take other peoples' stuff" has worked out pretty well as a standard of morality, what justification is there for choosing a different one?
2. More broadly, there will be collateral damage from any approach to take wealth from the wealthy. Will that collateral damage leave society better or worse off than the status quo?
Probably the most minimalistic way to do it would be a progressive tax on wealth above 10 million dollars. But even that would lead to massive attempts to hide assets (or get them out of the country), and more and more invasive attempts to detect such things. And the invasiveness itself is damaging to society.
What moral right does anybody have to that much wealth? They are not personally responsible for anywhere close to 100% of that wealth -- it was accumulated because they could take advantage of markets and education and science and infrastructure that was set up by society to benefit all.
A subsistence farmer may be personally responsible for 100% of their wealth. Anybody wealthier owes society.
Our wealth is due to standing on the shoulders of giants.
No, they don't. They might pay a smaller percentage in some cases, but it's definitely not universal.
So that abstract debt scales linearly with income? Why should a programmer that made his wealth from selling an app on the internet owe more than a truck driver?
Wouldn't it be more reasonable to tax consumption according to its cost and effect on the society, rather than income?
Wealth above $50M or so is generally not useful for consumption -- your second private jet and your 7th house add very little marginal utility.
What great wealth is useful for is power & status. But you often don't consume wealth to gain power & status -- spending $44B on Twitter isn't consumption.
The best way to tax the wealthy is to tax wealth, not consumption nor income.
Private jets are usually bought through air operator companies that use them to do business - that's not consumption. Using the private jet is a service and that's consumption, so that should be fairly taxed. 7th house, if not used to do business, is consumption too - so again, that should be fairly taxed.
I don't know what "marginal utility" even means, who determines it and based on what objective facts, and I don't think it's relevant anyways - taxes should be payments of the debt to the society, debt is not determined by utility in any way.
Buying a company is investment, not consumption - so yeah, that shouldn't be taxed. I don't care about "the best way to tax the wealthy", I care about a fair way to pay for what society provided. If the society didn't provide to the wealthy more than it provided to the not-wealthy, it's not fair to demand more.
> taxes should be payments of the debt to the society, debt is not determined by utility in any way.
Yes, exactly. Consumption taxes are a tax on utility. The wealthy owe their wealth to society. Their debt is relative to their wealth, not their consumption.
No, that doesn't make any sense. Nobody owes their wealth to anybody. People should pay for what they use/cause, not just because they exist. Consumption taxes are not taxing utility, they are taxing consumption - it's a very direct relationship of usage->payment, regardless of whether it was completely useless, for laughs, or helped something. Again, how do you even objectively determine utility? Is having fun enough to claim utility? What if we rephrase it as "mental health"?
If I can make my wealth without causing any effect on society, there's no reason my debt should increase - my debt doesn't scale linearly with my wealth, it scales with whatever the society provided to me.
If I make my wealth by selling an app on the internet, there's no reason I should pay as much as someone who polluted the environment in the process by shipping stuff all around the world and used fossil fuels to make the products.
And if I make my wealth by selling stuff in Europe, there's no reason it should be taxed in US just because I live there. At the very least, it should be taxed at the place where the society actually provided something that led to earning it. Because otherwise I'd just move to a nice tropical island with no wealth tax.
I think the rationale isn't "do they have more than enough?" it's "is this amount of wealth commensurate with any value provided?"
I imagine this would be a controversial subject anywhere, let alone HN, but I think implicitly is some belief that some individual's (or institution's) contributions are overcompensated relative to their actual contributions. I think as the amount of wealth increases, the probability that that wealth represents some equitable and rational reflection of actual contribution of value relative to others goes down.
The problem is that in any market there's all sorts of "leakage" and hidden unrecognized contributions just as much as there is hidden costs (environmental costs etc) of any business or individual. Also fraud, misrepresentation, irrational decision making on the part of consumers etc.
So my objection to say, Bezos' wealth isn't so much that he has more than he needs, it's that I do not see any way to rationalize his wealth relative to his contributions. The ideas behind Amazon would have probably proliferated anyway, the company is more than Bezos, including the many employees etc, and I think a lot of arguments can be made that Amazon's total societal value is controversial or debatable anyway.
What's a "correct" evaluation of Bezos' wealth in terms of societal value? I have no idea, it's probably a lot, but I do agree that at some point the wealth becomes so extreme that it's more likely to reflect societal and economic failures in value appraisal (implicit or explicit) than some actual justifiable value he has provided.
Regarding (2) we do this all the time in all kinds of indirect ways anyway. There's an assumption there about ownership and the conditions under which that is legally instantiated that is maybe at the heart of what needs to change. If you set up the rules to prevent certain things from happening in the first place, you don't end up "taking" any wealth.
I feel like this is the sort of thing that is so involved it would necessitate a book-length treatment instead of a comment on HN.
Why do you think nobody needs more than billion dollars?
I know if I had a billion dollars there are lots of things I'd fund. Why should I not be allowed to do that? If I had a trillion I also have things I'd fund that I couldn't at a billion
The only way to have a billion dollars in the first place is to take it from the workers who created the wealth. No individual's labor or creative output can anywhere near reach that value.
We already allow taking from others, from whom and what justification used is simply a matter of ideology. The current system is what we're used to and so it seems necessary and inevitable to us, anything else an abhorrent deviation.
It's mainly people with generational wealth and robust safety nets that have the choice to take a risk for higher potential earnings. For most workers the risk just is too big, the odds of success too low, based not on their merit but their runway to screw up/burn money. To the extent it's true that "you gotta fail to succeed", you need to be able to afford failure, to succeed.
Generational wealth can be just, an intact family that has savings. Borrow from the folks, start a coffee shop.
It is simple - so simple that 5.5 millions of Americans can use their family money to do it. That doesn't preclude there being 360M Americans that don't start a business, because they don't have family money.
Starting another plumbing business is very unlikely to net you a billion dollars. To achieve that you need to bet on riskier businesses, they are more likely to fail. If your parents are well off you can afford to fail a few times by betting big. Most still won't succeed but it doesn't affect them that much because they're insulated from the downside risk due to well-off parents.
My point isn't really that people from well-off families are more likely to start a family, although that probably is true as well.
My point is that people coming from a regular background are more likely to start less riskier businesses, less chance of failure but also less chance of reaching a billion dollars.
I tried to throw in some words like "mainly, most" to leave room for the many exceptions to my generalization, but perhaps it was a bit strongly worded. Even so, the point stands that people need a fall back plan to feel comfortable taking risks. I often hear business leaders patting themselves on the back for taking big risks, but leaving it unsaid that they had no real chance of losing everything. Risk tolerance enables risk taking.
Again I disagree on cost. I just had a look again at what it costs to buy a company off the shelf in the UK (last place I did that). It’s about £299 and another £50 a year. Theres probably some other small change fees in there.
I completely agree on risk though and it highlights the core of the argument - building a business is time consuming and risky in a way that being an employee is not.
That’s one reason why business owners are able to capture more profit. They took more risk and placed themselves into a situation where their earnings are not bounded by a single contract.
Everybody has free will and could start a business but not everybody is capable due to skill, capacity, circumstance, etc.
Therein lies the irony. None of the people whining loudest will start a company because it’s risky and fraught with danger but they want all the spoils of ownership and responsibility.
Not everyone has access to the amount of capital needed to start a business or the savings to support them while they grow that business. Most people live paycheck to paycheck. Those people will never have the same bargaining power as their employers.
Op is correct though. A CEO of a major US company who makes 1000x the wage of a factory owner in Shanghai who makes 100x the wage on the back of illegal migrant labor (very common) who is working to send money home to support their parents in the rural city they were born.
Just a few decades ago, that CEO would have paid his fellow countryman a modest salary and would have also made less themselves.
When you just imagine the staggering gap we've created, it feels deeply unfair. And it's not just a matter of starting a business. It is a structural moral failing.
> If the worker in Shanghai had similar economic freedom and rights to workers in the west have then this would not be an issue.
You're right. So I guess we are agreeing that the hyper-capitalist system we currently have relies on exploiting others?
We can build a system with less sharp edges without blowing it up.
Like worker representation on boards (Germany does this), cap gains that reduces as you hold investments (Clayton Christensen proposal), and holding the countries we outsource to similar environmental and labor standards.
Profit is surplus value created by the labor of workers. I'm simply saying no one works hard enough to create a billion dollars worth of anything.
Wealth accruing to owners rather than the workers who produce it is older than employment contracts. I'm pointing out that this arrangement is the result of a set of choices that have been made, and we could choose otherwise. The fact that we consider this one approach correct and fair and not others is not inevitable.
A) Profit is not necessarily connected to any workers, this is industrial revolution-era economics straight from the 19th century, modern world is different. Today I can create intellectual property and keep copying it until forever - without a single worker in sight.
B) These workers are free to work on their own - why don't they form their own company or become self employed?
Profit is not surplus value created by worker - that’s a 4 year olds understanding and negates all the other components of the system of which labour is only one.
We have tried “choosing” various “arrangements” (or more correctly, competing economic systems) and evidence points to capitalism being the correct approach to maximise liberty, growth and progress.
Your first question is literally "begging the question" because there is a premise that that wealth was earned and therefore "had" by others, when that wealth only accrued to them because of the system we have.
If we lived in another multiverse where Elon Musk was only worth $100 million and his other $200 billion were in bank accounts of 100 million other people, none of us would be the wiser about this one.
I don't mind wealth disparities. I don't like idiots who just tricked the system in some way. We should not reward antisocial behavior. This is how countries and empires fall. From Rome to China.
'Robeyns, who has studied how people perceive wealth, opens with a provocative proposal — governments should set a wealth limit on the order of 10 million euros or US dollars per person.'
So people with wealth close to $10mil should keep all their money in cash and avoid higher-return investments, since the the excess above $10mil would be confiscated? Besides being morally wrong, that would discourage investment.
Its an interesting thought experiment but falls apart very quickly when meeting reality of human nature. And just not very logical altogether, unenforceable globally.
The current global legal maze that allows all those money hiding places is exactly due to similar efforts in the past, they are half-assed at best. But it keeps wealth management companies busy, so at least somebody benefits at the end.
But not that far fetched in 2024, Bitcoin limits the total amount of coins. I'd think at a certain amount of money, probably a significant part is likely idleling (and not adding to economy) or not in full control of the owner.
It doesn't necessarily discourage investment much from the perspective of society as a whole - 1 person worth $20 million isn't obviously making way more investments than 2 people worth $10 million (or 4 people worth $5 million). It's also not obviously an improvement to morality for a society to worry about someone worth $10 million continuing to increase their net worth while looking the other way while children (who in absolute numbers surely outnumber those worth $10M+) lack food, housing, basic healthcare, etc.
Just because we are currently making one set of choices does not mean we could not be making a different set of choices.
I don't know how well that was at limiting wealth. Maybe people found ways to hide the money so it didn't get taxed. It also didn't limit wealth. 6% of a trillion is still 60 billion
The top rate was that high, but nobody was really taxed at 94% because there were a lot more exceptions.
When they drastically reduced the top rate, they also eliminated a great many exceptions. Overall, the change was actually revenue-neutral. Which shows that you cannot compare that 94% number to the current rates and say that people used to pay more taxes. "Lowering the rate" was just simplifying things so that the printed rate more closely matched the reality.
There's no practical difference between $10m with no interest, versus $10m where any interest which puts the total holding over $10m is confiscated. I think people such a situation would put their money into low-risk, easy-access investments.
(And, of course, it would make sense if the $10m maximum was inflation-linked; and then as such it would make sense to invest to maintain the capital against inflation.)
There’s certainly some strange effects on the edges, for example founders/early investors never realizing their gains and instead just taking loans collateralized with their assets (that’s how hyperrich avoid income taxes: just don’t have any taxable income)
You cannot functionally limit wealth. Does 10 million include assets? What about company ownership? If a piece of art is worth more than 10 million, does it need to be owned by more than one person? Does it need to be cut in two?
If something you own appreciates and your wealth increases as a result, how quickly before you have to divest that asset?
What about non profit organizations? What about IP? What about software? When Minecraft was sold by a single owner, it was worth 10 million many, many times over. When exactly would it have been necessary for him to sell his company, and who would he have been obligated to sell it to?
I think all of your concerns disappear when the answer is that the wealth part is not relevant - it is the monetization of that wealth. You can’t eat art or stock. We already tax when you sell the art or stock or earn income off it. What we don’t tax is the use of those things as collateral for loans, but beyond a certain value we should do that.
Then when you die, it all is converted to a dollar value in transferring to others and at that point there should be a massively hefty tax above a certain dollar value. We need to eliminate dynasties and the use of money for influence. Cap wealth at $50m or something.
If you are worth $50m+ and then use a mortgage to generate cash rather than take cash out of your company in order to avoid triggering taxes that affect everyone else, then yes, yes I do.
> That just encourages hiding it.
Well then I guess we should just give up trying. Let’s keep allowing our economy to look more and more like Hunger Games rather than try literally anything at all.
How are those "ridiculous scenarios?" Any attempt to base laws around the net worth of an individual is going to run into a hundred thousand such scenarios instantly. A person's "wealth" is simply not well defined. Neither ownership nor valuation of any kind of asset, other than cash itself, is nearly straightforward enough.
Income -- being funneled through the unifying medium of US dollars usually, and having some other counterparty to the transaction available to verify things -- is a lot simpler to account for than wealth, and look how complex that still is, and how readily it is already circumvented. And that's with a hundred years of refining and reforming the tax code to stop it, which a wealth-based taxation scheme would not benefit from.
If we had to have a perfect system with no flaws on day one in order to implement this, you would have a solid argument. But while that would be ideal, we don't actually have to have that, so your argument is completely beside the point.
Worse: Most of the circumventions of income tax are to increase in wealth without having income (as recognized by the tax system). A wealth tax is therefore a fix for your complaints about income tax.
Look, I'm not convinced a wealth tax (or worse, cap) is the answer. I suspect it may be worse than the disease. But your arguments against it seem pretty weak.
I love the conversation going here. A bunch of socialist and communist nerds fantasize that they could build something better than what existing socialism and communism countries have done.
Communists did one smart thing: they limited maximum earnings of party members(in theory). You want to have political power? Limit your incomes, share with the state.
