Comment by pfannkuchen

Comment by pfannkuchen 10 months ago

> printed a boatload of cash and gave it out as furlough for waiters and nurses and construction workers … US printed 10 trillion dollars

Well, I don’t think 10 trillion was paid to waiters and nurses and construction workers, etc. I’m curious what that actual number was. I’d be surprised if it touched 1 trillion. Something like 250 billion sounds more plausible to me, but if anyone has a source that would be interesting.

10 trillion was added to the money supply, but I believe the vast majority of it went somewhere else and never passed through the sort of people you mention.

The money supply expansion did juice the stock market and avoided a recession on paper, while shifting real value from savers and earners over to asset holders. Working as intended, I suppose.

I think the biggest BS aspect of inflation is that wages are set in USD basically universally and are therefore subject to inflation.

You can choose to move your savings out of USD and into something more stable, but if you are a worker you can’t move your comp into anything else.

The second most BS part is being taxed on inflation whenever you sell assets. Even if the asset doesn’t have any real appreciation, you get to pay tax on whatever the government decided to inflate the currency by. Absolute nonsense.

lifeisstillgood 10 months ago

I think we are in basic agreement

>>> while shifting real value from savers and earners over to asset holders. Working as intended, I suppose.

No furlough directly did not receive all of that but the “cost of covid” (the amount spent by government without taxing it back) was on that order. I wish I had a better line accounting of it.

But the basic effect is the same - the owners of assets - the wealthiest in society, get a greater proportion of the “tokens that allocate future resource allocation” (dollars) than previously - and this means they put that money somewhere - and we see that as inflation everywhere.

The solution as I see it is taxing the assets (not a “wealth tax” but more same approaches).

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pfannkuchen 10 months ago

On taxing assets, I think money is used for too many different things.
If we are talking about people owning yachts or airplanes or fifth houses or whatever, then yes, tax the heck out of those.
However, assets with a dollar valuation are also how we assign control of economic functions, i.e. businesses. Control of an economic function is really, seriously qualitatively different than owning yachts or airplanes. Economic functions operating well or not so well has an enormous impact on the success or failure of a society.
Changing how we assign economic function control is very risky, since there is no way to simulate the outcome.
What do you think about that? Are you including share ownership in the asset tax? If so, do you think this will somehow not alter economic control?
An alternative might be to have a split currency that is not freely exchangeable, where one is for business control and one is for stuff. You can sell your business, hold the business currency for however long and then buy another business or part of a business. But if you want to convert the business currency to stuff currency, at that point you are taxed heavily.
I would be in favor of a separate currency class for land also, for the record.
(Not sure if this has some obvious fatal flaw, I am but an armchair economist.)

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- lifeisstillgood 10 months ago
  
  A good resource on this is UK campaigner Richard Murphy - http://www.taxresearch.org.uk/Blog/
  The basics are it is foolish to try and introduce a wealth tax - ie Bezos is worth 400Bn so we want 40bn now please. It becomes impossible to actually say how much a person owns - it fluctuates, even if they are co-operating fully it’s a fools game.
  Yet tax rates are different for different categories - equalise those, and tax people at points of liquidation events - so capital gains is the most obvious.
  Other liquidation events is borrowing against assets (the buy,borrow,die idea).
  One can fairly easily imagine a minimum floor for all these - say 5 million in any fiscal year or whatever so we focus on where the money really is.
  It’s also worth remembering that tax is simply a way of destroying the tokens of resource allocation (money). We want to tax the wealth to remove say X trillion globally. But remove it from the wealthiest who society has decided to give trillions to to handle covid but society thinks probably should not be having such a ratio of control over societies assets
  And the implication is some other more destructive event can / will occur to rebalance - for example a massive stock market crash. The idea of “billions wiped off the exchange” is the same as a tax event - it’s just way more destructive and uncontrolled - event th wealthiest would rather t have tax planning than recessions and crashes
  
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  pfannkuchen 10 months ago
  
  I’m stuck engaging with your reply because as far as I can tell the statement quoted below is objectively and trivially incorrect. Can you help me understand your way of thinking about this?
  “It’s also worth remembering that tax is simply a way of destroying the tokens of resource allocation (money)”
  The government does not destroy money collected from taxes. It uses the money to pay for stuff, at which point the money is back in the regular economy and much of it ends up in back in assets, just owned by a different person than the one who was taxed.
  How does taxation destroy money?
  
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