Comment by carlosjobim

Comment by carlosjobim 4 days ago

The tax system is made with large incentives for all business owners (from billionaires to small businesses to shareholders like retirees) to invest all profit into expanding their business.

If an owner takes out profit, they are punished with high income taxes. So they reinvest in their business, and this is what the government wants because it creates jobs, innovation, products and services, and tax income.

So they've been doing what they have been forced to do by the government. And as a consequence their companies are worth a lot.

Now the government wants to tax them on the company value?

mhitza 4 days ago

The double irish, single malt, capital allowances for intangible assets.

If everyone would be able to play these tax avoidance schemes I'm sure society would collapse. For big players these are easy schemes and somewhere this untaxed wealth must be recaptured. Just favoring the rich further accelerates the wealth imbalance.

Reply View 7 replies

cucumber3732842 4 days ago

>If everyone would be able to play these tax avoidance schemes I'm sure society would collapse
Would it? Or would it just shift demand around? I mean the money is still there, and I don't see any reason the entities with money would lock any more of it up in a "static" manner (e.g. gold bars and piles of cash) than they do now.

Reply View | 0 replies
carlosjobim 4 days ago

That of course depends on what you mean by "society".
But everybody is able to reinvest profits into a business they have, whether that's an industry giant, or a tiny one-man shop. There is no government on planet Earth which considers that to be "tax avoidance". Governments want profits to be reinvested and not paid out to owners, even the most socialist governments you can find.
If you're against this, then you shouldn't talk about taxes. You should rather talk about abolishing private property completely.

Reply View | 5 replies
- igogq425 4 days ago
  
  > That of course depends on what you mean by "society".
  Yes, that is the old discrepancy between society in the true sense and society as imagined by libertarians. A few strangers waiting together for the bus do not constitute a community. If the bus is canceled and they organize a carpool, then a community has formed. If you scale this up and replace personal relationships with institutions, you have a useful concept of society.
  For libertarians, society is any large gathering of people who interact with each other in some way (or not), even if they rape and devour each other. If you understand society in this way, it cannot collapse (or is constantly collapsing).
  
  Reply View | 4 replies
  
  carlosjobim 4 days ago
  
  If we remove from life everything that people have access to by industrialization and mass production, then many or most people would say that "society" has collapsed.
  That would be the consequence of taxing ownership in companies, since there would be no reason to invest to create big companies. And for industrial society you need big companies. You need giant companies, and taxing owners on the size of the company means that people will not invest their money or effort build industrial scale companies.
  The other way to have industrialization is to instead have a command economy, where the government mandates what is to be done.
  
  Reply View | 3 replies

igogq425 4 days ago

Ultimately, an economy is all about the side effects you describe (goods and services for the population). The fact that, while producing these side effects, the machine also leads to massive wealth accumulation among a small number of people is another side effect that basically has nothing to do with the core tasks of the economy. The question now is how to evaluate this additional side effect. If it does not have any negative consequences, it can be ignored. If it does, it should be counteracted.

It's like in a combustion engine. Oil has to be added for the engine to work. But over time, dirt particles, metal abrasion, soot, and combustion residues accumulate in the oil, overwhelming the oil filter and reducing its lubricating ability. If you don't reset it to a “healthy” basic state at regular intervals, it gets so bad that it prevents the engine from operating and ultimately even destroys it.

Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely. Of course, it is frustrating for these people when the money they have generated is taken away from them. But let's look at it realistically: if someone has $100 billion and $99 billion is taken away from them, they are still in a situation where they lack nothing financially.

At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.

Reply View 3 replies

carlosjobim 4 days ago

> Does the massive wealth inequality we see today cause problems that lead to the erosion of society itself? I would say yes, definitely.
On a side note. Yes, the massive wealth inequality is eroding society. But billionaires aren't the source of this problem. They are outliers, freaks if you so will.
The real problem is the massive wealth inequality is the gigantic prices of real estate and rent, created by the monetary system being based on real estate instead of productivity. That means it is very hard for a person to claw and scratch her way to equality if they're not born with real estate or gets that benefit at an early age. For most, their irredeemable mistake in life was choosing to be born in the wrong decade.
At the same time a huge percentage of the population who has never made any effort in life and generally have no talent or any admirable qualities, get great wealth and comfort by having been born at the right time.
For every billionaire there is a a hundred thousand of the kind of person described above. Most of us have them not far away, and they have a hundred fold bigger impact on our lives than any billionaire. And at least many billionaires have at least accomplished or done - something - in their life.
> At some point, you've played capitalism through to the final level. And then you should put down the controller and go outside to listen to the birds chirping instead of frantically chasing after the growth of a number that, due to its sheer size, no longer has any concrete meaning, apart from the fact that there may be two other people whose numbers are bigger or who are hot on your heels.
Wouldn't building a rocket to go to Mars for example be such an endeavour, which is bigger than chasing the imaginary dollar number? Or the philanthropic endeavours of other famous billionaires? Or even exacting political influence in the shadows, which is probably something all known and unknown billionaires do?

Reply View | 2 replies
- ahf8Aithaex7Nai 4 days ago
  
  > the gigantic prices of real estate and rent, created by the monetary system being based on real estate instead of productivity
  Rents are expensive because real estate is expensive. Real estate is a good store of value. The massive accumulation of surplus wealth among a small portion of society has led to an increased demand for stores of value. Someone looking for a house to live in competes not only with others who want to live in it, but above all with the super-rich who want the property as a store of value. That's why real estate is expensive.
  > Wouldn't building a rocket to go to Mars for example be such an endeavour, which is bigger than chasing the imaginary dollar number?
  That's conceivable. But I don't see the space science fiction of Le Guine or Asimov being realized in the activities of Musk and Bezos. To me, the whole thing seems more like an awkward dick measuring contest. The awkward situation with Shatner was a good example of how hollow and superficial this whole thing is. These people could go down in history as benefactors and heroes of humanity. But they don't have the guts for that. Either they launch rockets or go to the gym or sit with Joe Rogan or try to undermine democracy and replace it with a neo-feudalist hell.
  Edit: I agree with you that we don't necessarily have to focus on the billionaires who are so prominent in the public eye. Below them, there is a larger class of super-rich people who have their fortunes managed for them, never lift a finger in their entire lives, and yet still attract an ever-increasing share of society's overall wealth.
  
  Reply View | 1 reply
  
  JuniperMesos 4 days ago
  
  > That's conceivable. But I don't see the space science fiction of Le Guine or Asimov being realized in the activities of Musk and Bezos. To me, the whole thing seems more like an awkward dick measuring contest. The awkward situation with Shatner was a good example of how hollow and superficial this whole thing is. These people could go down in history as benefactors and heroes of humanity. But they don't have the guts for that.
  SpaceX has done a huge amount of engineering work in making the cost to get mass into orbit significantly cheaper, more reliable, and more routine. Elon Musk is, on a personal level, because of the sort of company he chose to build after becoming wealthy, absolutely responsible for bringing humanity closer to a future imagined in space science fiction.
  
  Reply View | 0 replies

ricardonunez 4 days ago

In most recent years they stopped doing part of that equation.

Reply View 0 replies

_1 4 days ago

Taxes are not a punishment.

Reply View 15 replies

lucaspm98 4 days ago

Taxes are often used as either incentives or disincentives for certain behaviors. Examples of incentives are the Child and Dependent Care Credit and EV Tax Credits. An example of a disincentive is a Mansion Tax.

Reply View | 0 replies
dolni 4 days ago

When a significant share of the taxes you pay are mishandled or lost to fraud, yes it is a punishment.
That's been happening for a long time in the US. Staggering military industrial complex. Tens of billions lost in COVID relief. Billions lost in Minnesota due to unchecked privatized social welfare fraud (which has been known about for a decade).
Some mistakes will happen. What we have is unacceptable. If the government can't handle the money responsibly, it has no business collecting the money.

Reply View | 4 replies
- rswail 4 days ago
  
  Minnesota is only a drop in the ocean compared to Florida and other states. One of the current FL senators was CEO of one of the companies convicted of a much larger fraud.
  That's more an indictment of the way you (the US) starve your public services of proper regulatory power with the right level of personnel to handle it.
  But your Congress voted last year to defund the IRS and the administration are busy gutting the SEC and other regulators.
  Oh and government fraud has nothing on the commercial and rent-seeker frauds extracting wealth for no benefit from their positions of control. But anti-trust prosecutions are basically a dead path for rectification.
  Blaming the "government" for what happens from obvious policy failures is the fault of the policies and those that set them, not the "government" as some nameless bureaucracy.
  
  Reply View | 1 reply
  
  cucumber3732842 4 days ago
  
  >That's more an indictment of the way you (the US) starve your public services of proper regulatory power with the right level of personnel to handle it.
  >Blaming the "government" for what happens from obvious policy failures
  Who creates the policy that fails if not the government? If a supplier kept telling you they'd do something and kept screwing it up at what point do you move them to the bottom of your list for who to call to get stuff?
  It's really easy to sit there enveloped in pure ignorance and say "those idiots just need to fund an administrative agency to prevent fraudulent daycare" or whatever but nobody in the US wants to do that because everyone's seen with their own two these sorts of endeavors turn into feeding troughs and revolving doors and rackets that the politicians and politically connected use to run businesses that make money by going through motions that provide little (just enough to keep some political support form useful idiots) value at taxpayer expense. How do you solve such a problem? It's immensely hard and complex.
  I'm so sick of ideologues who can't think two steps ahead peddling these sorts of "just do this" simple and wrong solutions.
  
  Reply View | 0 replies
- jdiff 4 days ago
  
  Do you have any sources for either or both of "billions" and "known about for a decade" that aren't a figurehead of the current US administration? Because this all smells a lot like "the immigrants are catching and eating cats and geese" story which also turned out to be a lie.
  
  Reply View | 1 reply
  
  germinalphrase 4 days ago
  
  The fraud in Minnesota is upsetting. Fraud also appears to be nationally prevalent:
  “New federal data released by the U.S. Centers for Medicare & Medicaid Services (CMS) shows the overall rate of improper payment in Minnesota’s Medicaid program is far below national averages.
  In the review released this week, CMS found an error rate of slightly over 2.1%, compared to a national average of 6.1%. The data for the review was compiled before the Minnesota Department of Human Services began implementing new strategies to minimize the risk of fraud and harden its systems against bad actors.”
  https://mn.gov/dhs/media/news/?id=1053-720779
  
  Reply View | 0 replies
wiseowise 4 days ago

They are. Look at the Netherlands, they want to implement taxes on unrealized gains.

Reply View | 7 replies
- jdiff 4 days ago
  
  That's not a punishment.
  
  Reply View | 5 replies
  
  wiseowise 4 days ago
  
  What is it if not a punishment? If you’re a high earner (not obscene earner, mind you) you already pay 50+% in taxes, on top of that you now have to pay even more?
  
  Reply View | 0 replies
  
  danslo 4 days ago
  
  It is as long as they're not refunding you when you make a loss.
  
  Reply View | 3 replies
- RGamma 4 days ago
  
  The system that exists in Germany has you pay 25% Abgeltungssteuer even on unrealized gains but those taxes can be deducted when you sell. Only in the event you sell at net loss do you not get that back.
  States are in dire need of liquidity. Just look at global debt.
  
  Reply View | 0 replies
w4yai 4 days ago

say that to trump

Reply View | 0 replies

zbentley 4 days ago

> Now the government wants to tax them on the company value?

I’m genuinely baffled at the incredulous tone here. Yes, that is exactly what should happen: laws, subsidies, and incentives enable a company to grow and flourish. Then, as the company grows, other laws incentivize it to give some of its state-sponsored affluence back to benefit the country.

Like, sure, the execution of that process is often dysfunctional, but the fundamental contract there does not seem like it should be surprising to people: we don’t have (many) socialist state-owned businesses, but the point of a functioning country is still to provide good things to the people living in it. Not to benefit businesses or a tiny sliver of the population.

That’s why we have everything from income taxes to interstate highways: to distribute wealth and resources to (a flawed approximation of, but it’s still the goal) everyone in the country. That’s just how non-corrupt governments are supposed to work!

Reply View 3 replies

carlosjobim 4 days ago

> give some of its state-sponsored affluence back
Then why not tax the military? They are surely the most affluent company of them all, if you take a tally of all their inventory.
If you tax companies based on their size rather than their profits, then you're not going to have any big companies. Any investor or entrepreneur would be a fool to invest in making a big company.
But many endeavours need big companies and big investments. For example power plants. That's a whole lot of value to tax, such affluence! Better redistribute this wealth, and instead have a hundred thousand non-affluent hot dog stands.
> That’s just how non-corrupt governments are supposed to work!
In practice, every government in the world does not tax companies reinvesting their profit into growth.

Reply View | 2 replies
- zbentley 4 days ago
  
  > why not tax the military?
  Narrowly: because they're a utility funded by taxes, not an independent entity benefiting from tax-funded infrastructure. Having a military for defense/power projection/whatnot is one of the infrastructural benefits of being part of a state (and one of the things that a company that grows in that state "owes" the state tax money for--whether that's owed on growth or just capital).
  Like, do I personally think my country's military should have a vastly different funding profile, incentives, and behavior? Absolutely. But that doesn't change the fundamental dynamic: $state provides $thing (security, clean water, cheap gas, whatever) that makes being in $state good for many people, people who do well financially within $state owe it money back on the basis that their doing well is at least partially a result of $thing being available to them.
  > Any investor or entrepreneur would be a fool to invest in making a big company.
  Not true. A growth tax need not be a 100% tax, so growth would still be an advantageous thing to do. Many countries have tax brackets today; that doesn't discourage people from getting rich.
  
  Reply View | 1 reply
  
  carlosjobim a day ago
  
  What I'm saying is that the high value of a large company is not "affluence".
  An ugly military troop transport might have the same cost / value as a desirable sports car. Not to mention other types of military equipment. But we wouldn't think about that as affluence. Because we know that military equipment are tools with a purpose.
  The same for the value which is locked in within any giant corporation. Of course a large industry is going to have expensive equipment and lots of other investments, which nobody thinks of as "affluence". That is exactly what the money of billionaires is. They own a share of all that ugly equipment, which has no use outside of a big company.
  
  Reply View | 0 replies

RGamma 4 days ago

And not investing in society has some consequences as well... Increasingly it seems big business is bad business (again).

Reply View 0 replies

softwaredoug 4 days ago

Arguably these and billionaires have become a social menace. They undermine democracy, destroy our environment, and prioritize shareholder value over long term well being of the economy they live in.

If they all had unified in one voice against the administration, Trump might be more constrained. They might not be so hated. If they realized, like Henry Ford, that a strong middle class actually is good for THEM too, all this could be avoided. Instead they’re showing up at Melania screenings while average citizens are getting shot in the streets.

I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.

Reply View 4 replies

yetihehe 4 days ago

> I don’t think they realize the fire they’re playing with my stomping on the social contract that made them so wealth.
Some of them do: https://news.ycombinator.com/item?id=42335797
But the pitchforks are coming for 12 years already. They got accustomed to the sight and even put some measures to redirect the masses so they fight each-other.

Reply View | 0 replies
Grisu_FTP 4 days ago

I just googled confused what a "Melania screening" (Thought it was like a sort of security screening, maybe all the ICE is messing with my head) is. First time i heard about the Movie. This feels like one more step the Trump fam. took to become some sort of celebrity-king thing.

Reply View | 1 reply
- rswail 4 days ago
  
  It's just grifting, bribery, and extortion.
  Bezos gave $40m to make the movie. It was a way to maintain his companies position. It's standard oligarch tribute to the godfather. See Russia or Hungary for further examples.
  The movie cost nowhere near that much to make. Melania got the money. It was her very own little grift, while her husband and his children have been extracting literally billions.
  
  Reply View | 0 replies
cucumber3732842 4 days ago

>Arguably these and billionaires have become a social menace. They undermine democracy, destroy our environment, and prioritize shareholder value over long term well being of the economy they live in.
Sadly, I'm far more worried about a thousand people who make a million bucks than I am about one guy who makes a billion.
You don't get to the B number by not being pretty darn shrewd and sociopathic so those guys must be pretty evil but man have the "upper middle class" or "professional managerial class" or whatever you wanna call the "comfortable enough to not think about the harsh economic realities of their ideas" class been an unmitigated disaster for western society over the past 20-70yr depending on how you wanna measure.

Reply View | 0 replies

michaelsshaw 4 days ago

I guess I just totally imagined that $1 trillion pay package for Elon Musk.

Reply View 1 reply

carlosjobim 4 days ago

It's not in the form of salary, if you look it up. So the money is still locked within the company, not taken out as profit.

Reply View | 0 replies