Author Topic: Tax the Super Wealthy  (Read 12930 times)

YttriumNitrate

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Re: Tax the Super Wealthy
« Reply #250 on: April 26, 2022, 11:51:58 PM »
Are you just making things up?
...
Musk, Bezos, Zuck etc all only own 10-20% of their respective companies. They could all be voted out tomorrow if that's what the actual owners of the company decided. None of them own a majority of shares.

Before you go accusing people of "just making things up" please learn about different classes of shares and their respective voting rights.

Undecided

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Re: Tax the Super Wealthy
« Reply #251 on: April 27, 2022, 07:06:46 AM »
Do billionaires divert resources to the construction of their super yachts (or, let’s say ultra-luxury housing) other than by making it more profitable for someone to do that work, compared to building affordable housing?

Yes.

In the case of ultra-luxury housing, it's fairly obvious: one person hording a LOT of land/space inherently impacts the per-capita amount of space available for others, and then supply and demand does its thing.

Or, in a less direct example, it's more lucrative to make stuff for price-insensitive rich people than for middle-class or poor people who are more frugal out of necessity.  If you're producing fewer goods targeted at middle/lower incomes because you're chasing profits by selling stuff to the ultra-rich, you're indirectly driving up prices for people of more average means.

Wealth inequality has all kinds of consequences like this:
-Developers are only building McMansions, not affordable homes
-The car market: Many automakers have simply stopped trying to make affordable cars, because there's WAY more margin in a $50k luxury SUV than a $20k Civic/Corolla, simply because wealthy consumers care less about trying to get the best possible deal than their poorer counterparts
-Inequality in education/infrastructure funding: Rich areas pay more local taxes, which means they get better schools, better roads, cleaner water (Remember Flint?) while poorer areas struggle with these foundational aspects required to build a thriving society.

It's curious that you said "yes," but then describe transactions in which the first step is that someone indeed makes a more profitable choice to deal with the billionaire. I'm not saying you're wrong about the subsequent effects at all, but it's a nice sketch of why you can't pretend that eliminating the top step of the capitalist ladder doesn't also negatively affect people farther down (notwithstanding that you're supposing that it will benefit people perhaps even further down). And maybe you're fine with that, but taking away profit-maximizing decisions clearly makes some people worse off, which is what opens the door to the rational interest of (some) non-billionaires in objecting to structural changes even when they're described as only applying to the billionaires.

js82

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Re: Tax the Super Wealthy
« Reply #252 on: April 27, 2022, 08:57:37 AM »
Do billionaires divert resources to the construction of their super yachts (or, let’s say ultra-luxury housing) other than by making it more profitable for someone to do that work, compared to building affordable housing?

Yes.

In the case of ultra-luxury housing, it's fairly obvious: one person hording a LOT of land/space inherently impacts the per-capita amount of space available for others, and then supply and demand does its thing.

Or, in a less direct example, it's more lucrative to make stuff for price-insensitive rich people than for middle-class or poor people who are more frugal out of necessity.  If you're producing fewer goods targeted at middle/lower incomes because you're chasing profits by selling stuff to the ultra-rich, you're indirectly driving up prices for people of more average means.

Wealth inequality has all kinds of consequences like this:
-Developers are only building McMansions, not affordable homes
-The car market: Many automakers have simply stopped trying to make affordable cars, because there's WAY more margin in a $50k luxury SUV than a $20k Civic/Corolla, simply because wealthy consumers care less about trying to get the best possible deal than their poorer counterparts
-Inequality in education/infrastructure funding: Rich areas pay more local taxes, which means they get better schools, better roads, cleaner water (Remember Flint?) while poorer areas struggle with these foundational aspects required to build a thriving society.

It's curious that you said "yes," but then describe transactions in which the first step is that someone indeed makes a more profitable choice to deal with the billionaire. I'm not saying you're wrong about the subsequent effects at all, but it's a nice sketch of why you can't pretend that eliminating the top step of the capitalist ladder doesn't also negatively affect people farther down (notwithstanding that you're supposing that it will benefit people perhaps even further down). And maybe you're fine with that, but taking away profit-maximizing decisions clearly makes some people worse off, which is what opens the door to the rational interest of (some) non-billionaires in objecting to structural changes even when they're described as only applying to the billionaires.

Oh, it will absolutely make *some* people worse off, and it's intellectually dishonest to pretend otherwise.  But the people that might get hurt indirectly are a very, very small slice of the population, and assuredly are not people making $15/hr - they're largely the management of luxury goods purveyors who - while not ludicrously wealthy, are still extremely well off in comparison with people who are doing physical labor.

People mostly object to policies like this not out of rational interest, but out of astroturfed BS ginned up by special interests - conscious campaigns engineered by the ultra-wealthy designed to put middle class vs. working class, working class vs. the unemployed, and so forth - to redirect attention away from the real, core issue.

That notwithstanding, reducing wealth inequality via tax policy is absolutely not "taking away profit-maximizing decisions" - it's merely restructuring the decision criteria, since rational economic decisions would be dealing with a different presumed wealth distribution as an input.

FIPurpose

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Re: Tax the Super Wealthy
« Reply #253 on: April 27, 2022, 09:04:39 AM »
Are you just making things up?
...
Musk, Bezos, Zuck etc all only own 10-20% of their respective companies. They could all be voted out tomorrow if that's what the actual owners of the company decided. None of them own a majority of shares.

Before you go accusing people of "just making things up" please learn about different classes of shares and their respective voting rights.

K. Zuckerberg is the only one out of the ones listed doing this. So 1/4? He's making up an ad hoc reason as to why Billionaires want to keep their money other than billionaires like money. He didn't quote any billionaires saying that they'd lose voting power.

My guess is that > 90% of CEO's do not hold anything close to a majority voting position. And any Billionaire could simply take out a loan to pay taxes avoiding the sale anyways. It's all a completely moot point.

LennStar

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Re: Tax the Super Wealthy
« Reply #254 on: April 27, 2022, 09:43:14 AM »
Are you just making things up?
...
Musk, Bezos, Zuck etc all only own 10-20% of their respective companies. They could all be voted out tomorrow if that's what the actual owners of the company decided. None of them own a majority of shares.

Before you go accusing people of "just making things up" please learn about different classes of shares and their respective voting rights.

K. Zuckerberg is the only one out of the ones listed doing this. So 1/4? He's making up an ad hoc reason as to why Billionaires want to keep their money other than billionaires like money. He didn't quote any billionaires saying that they'd lose voting power.

My guess is that > 90% of CEO's do not hold anything close to a majority voting position. And any Billionaire could simply take out a loan to pay taxes avoiding the sale anyways. It's all a completely moot point.
Like Elon Musk loaning a few pennies to buy Twitter.
Banks are institutions that loan you money, if you can prove that you don't need it. - Mark Twain, probably. Sounds like him. I love his sarcasm.

scottish

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Re: Tax the Super Wealthy
« Reply #255 on: April 27, 2022, 03:40:15 PM »
Are loans to avoid capital gains tax from selling shares something that started up with the low interest rates since the financial crisis back in 2008?   Or have they been in use for much longer than that?

I'm just thinking that 5% interest payments will add up to more than your capital gains tax over 5-10 years or so....

dandarc

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Re: Tax the Super Wealthy
« Reply #256 on: April 27, 2022, 03:57:52 PM »
Are loans to avoid capital gains tax from selling shares something that started up with the low interest rates since the financial crisis back in 2008?   Or have they been in use for much longer than that?

I'm just thinking that 5% interest payments will add up to more than your capital gains tax over 5-10 years or so....
It is basically the don't payoff your mortgage play on steriods - avoiding the taxes is only part of the equation. If you can borrow at good terms and have good investments, you'll become a lot richer over time if you do that to fund your lifestyle vs. just selling the good investments.

Even if there were no tax differences at all it is a good financial move - if you can get sufficiently good terms on the debt, which the billionaire types tend to have more access to than most of us.

JGS1980

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Re: Tax the Super Wealthy
« Reply #257 on: April 28, 2022, 09:12:39 AM »
Are loans to avoid capital gains tax from selling shares something that started up with the low interest rates since the financial crisis back in 2008?   Or have they been in use for much longer than that?

I'm just thinking that 5% interest payments will add up to more than your capital gains tax over 5-10 years or so....

If you were a bank, would you rather get 2% on 1 Billion dollars, or 5% on 1 Million dollars?

Money talks, and I bet these guys get wonderful rates you and I could only dream of.

EscapeVelocity2020

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Re: Tax the Super Wealthy
« Reply #258 on: April 28, 2022, 09:50:47 AM »
There is also something to be said for the name / brand recognition.  Just as companies compete to give Warren Buffet preferred shares or attractive bond yields that the average investors don’t get, banks want to be able to claim Billionaires as clients.  Companies give the ultra rich free swag in hopes they’ll be photographed using / wearing their products.

I recently watched a TED talk with Musk where he claimed that a 30 minute meeting he attends regularly resulted in $100M extra profit for Tesla.  Thus it would be wasteful for him not to use private jet travel…. The perspective of Billionaires is just to hard for us plebeians to understand I guess, heaven forbid we all have equal wealth and opportunity to shape the future.
« Last Edit: April 28, 2022, 11:31:46 AM by EscapeVelocity2020 »

scottish

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Re: Tax the Super Wealthy
« Reply #259 on: April 28, 2022, 05:03:40 PM »
Are loans to avoid capital gains tax from selling shares something that started up with the low interest rates since the financial crisis back in 2008?   Or have they been in use for much longer than that?

I'm just thinking that 5% interest payments will add up to more than your capital gains tax over 5-10 years or so....

If you were a bank, would you rather get 2% on 1 Billion dollars, or 5% on 1 Million dollars?

Money talks, and I bet these guys get wonderful rates you and I could only dream of.

If I were a bank I'd want to understand the risk attached to the loan before setting the  interest rate.    If Elon Musk was borrowing money and all his wealth was tied up in Tesla (with a P/E of 120 and lots of competition trying to ramp up), I'd be thinking about other collateral.    I don't actually know where Mr Musk keeps his wealth, this is just an example.   

I was curious about the history -- the bank isn't going to give anyone a rate below the fed's interest rate and that's on its way back up.

eyesonthehorizon

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Re: Tax the Super Wealthy
« Reply #260 on: May 01, 2022, 05:11:58 PM »
There is also something to be said for the name / brand recognition.  Just as companies compete to give Warren Buffet preferred shares or attractive bond yields that the average investors don’t get, banks want to be able to claim Billionaires as clients.  Companies give the ultra rich free swag in hopes they’ll be photographed using / wearing their products.
Not even just the ultra-rich; having a million or more at an institution was enough to get pretty swanky goodies just a decade or so ago. Think promotional iPads, golf equipment.

markbrynn

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Re: Tax the Super Wealthy
« Reply #261 on: May 13, 2022, 01:42:04 PM »
One thing that I didn't see mentioned in this thread (I read pretty much all of it), is that part of this equation is to provide as much happiness to your society as possible. All this talk of wealth here and there sometimes seems to forget about what's the point of all of this. If you were to set up a society from scratch, wouldn't the goal to be to create conditions that improves the lives of as many citizens as possible. So, wealth creation is important, but if all of that wealth is used in the service of a limited number of the citizens, what's the point?

I live in a country (the Netherlands) that doesn't get everything right by any means. However, we seem to have found a way to allow most of the people, even on the lower end of the socioeconomic scale to live comfortably (enough income, reasonable housing, personal safety, etc.). It sounds, from a distance, that a large number of US citizen do not benefit from the great wealth of the country. The lack of caring for the happiness/comfort/safety for other people in your society (city, state, country, etc.) feels like a lacking to me. I don't want to punish the super wealthy. I want them to care about how to improve the lives of others. If they (or anybody else) have that ability, why wouldn't they want to help?

Undecided

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Re: Tax the Super Wealthy
« Reply #262 on: May 13, 2022, 02:53:06 PM »
It sounds, from a distance, that a large number of US citizen do not benefit from the great wealth of the country.

There's certainly some truth to that, but something that I found surprising is that, in recent years, the 20th percentile household income in the US is generally quite close to the median household income of countries like Ireland (a touch higher) and Spain (a touch lower). It seems to me that the lifestyle in the US is just incomparable to our expectations---the composition and priorities are different, but (and I recognize this is just conjecture on my part) I'm not sure that the majority of Americans with below-median incomes would be happier swapping places with the median income earner in the Netherlands, or Ireland, or Spain, or Italy (of course, I think the lower you get in that US distribution, the more likely they'd be happy with the swap). They would probably see decreases in some sources of stress, but they'd get smaller refrigerators and less comfortable climate control, they might have less living space, and be more reliant on public transit. They'd have a less powerful military force supporting them (you may laugh, but they clearly prioritize that). Obviously if you left their lives as they otherwise are, but paid for healthcare and higher education from general revenues, they should be happier, but I'm not sure it's fair or complete to disregard how high American incomes are, which seems to be implicit in thinking they don't benefit from the wealth of the country.