If we are going to taxes that have 0% of ever happening...a 100% wealth tax on every billionaire who goes on TV to say "I want you to raise my [income] tax"....aka Old Man Grifter Extraordinaire Buffet
If we are dreaming, I'll add an idea for the billionaire tax:
- Pay an annual % of wealth into a trust fund that builds and maintains beautiful private-public works, like city parks, natural parks, libraries, etc. It's actually how noblemen and the wealthy in the past will pay its dues (cannot recall how much of it was considered a cultural/religious duty vs a legal requirement) but at least it instilled a sense of belonging to one place, and of leaving an honorable reputation that would outlast the person.
Now we get absolute privacy with complete detachment from the locale they live in, privatized upside with socialized downside, reputation and honor are shunned for the ability to do what you want in private.
Anyway, I consider the main problem to come from the governments, but the incentives are out of whack at every level.
Dreaming phase off, let's put the money-making glasses back on.
It's so crazy how many people don't understand this really basic stuff.
Unfortunately this type of corruption is always common when a civilization is in terminal decline, which ours is. Hopefully we can fully move into the information era sometime in our lifetimes, until then the only thing to do is to take care of yourself, your family, and other cool people.
Great post. I've experienced some difficulty explaining consequences of inflation to professionals who entered the workforce in the early 70s, but your breakdown is easy to understand info that hits some points I've been missing.
Great read, although this is a tough pill to swallow. I'm so far behind, PNGMI. I wish I found BTB years ago. I'm the first in my family to go to college, and I thought that was a good thing. Now I would give 20 BTC to get that time back. Its a strange feeling to have your outlook changed so rapidly. I spent my 20s locked in the idea that I had to finish college, get a menial job somewhere and save enough money to start a business. I just could not see that there was any alternative. Grateful I found the jungle. I now have a vision for a different path in life that was simply invisible to me before. At a minimum I can at least see the truck coming now. I'll go out on my shield like a good Marine. I dont want to eat bugs all the time, but I once ate a cricket that was buried in chocolate.. it wasn't so bad. Maybe I like crickets.. We should all start eating them if you think about it.. it's for a good cause you know... eating crickets is sustainable & will help save the planet.. Don't you love the planet? This is what democracy looks like. We must all do our part. Aren't you a good person? You look hungry citizen. Here, take this nourishment. Its the new Powdered cricket milk. Go ahead. We're watching. ONLY ENEMIES OF THE PEOPLE REFUSE TO EAT THE GREAT SUSTINANCE OF MOTHER EARTH.
We have a wealth tax in Switzerland (low, like 0.25%) and I think that’s ok.
A (very low, like 1-3%) tax on inheritance would benefit many and decrease the wealth gap.
On the other hand, I favor reducing government spending and we all know that over the long run most wealth of the rich will be gone anyway after 2-3 generations ...
Some interesting points in the article, thanks! Think one point in Biden plan was "step up basis" tax when folks pass away w/o realizing gains and pass investments to children who don't pay any tax. Another "feel good capitalism" story is the founder of chobani who gave equity to low level employees early on and once company went public many benefitted that otherwise wouldn't have. I personally think that is great way of running a business.
My concern is that wealth taxes just incentivize politicians to become more corrupt and rent seeking, leading to socialism/nationalizing of assets. See examples of Zim, Venezuela or South Africa, all of them extract huge taxes out of the wealthy (relatively speaking), but it just ends up in the pockets of political elites who dole out small amounts to the poor to remain in power.
But the US could do with some higher taxes in order to fund some public institutions (education and healthcare).
Tax unproductive capital. Employing your valuable skills is highly productive, so why is income of a doctor at 500k taxed more than the $30 mil of a rich guy sitting in the s&p? That $30 mil should have a yearly burn that goes towards something productive. Or the rich guy can invest it in a new company, which is productive for society and shouldn’t be taxed.
Basically whatever makes society the most effective, efficient, equal opportunity should be done.
Hoarding capital couldn’t even be done in the past. If you had a ton of wealth you’d have to hire a personal army to defend your estate and yourself from being rekt by bandits or other powerful.
Land is a kind of monopoly and basically soaks up all the growth / earnings from everyone and forces everyone down to a minimum level of earnings. (Why do you think your online goes so well? Exactly, lack of rent costs is the competitive advantage). Land value tax is IMHO the best for a number of reasons.
1. Taxing land value doesn't create any (or at least much less) deadweight economic losses.
2. Taxing land value can actually free up more land for productive use as speculators can't afford to hold land as a speculative asset anymore without doing a proper development or something that would be cashflow positive.
3. Land value is probably the largest component of most peoples expenses (rent paid in their housing, rent paid on farms that produce their food, rent paid on land that people mine minerals from to make goods, rent paid on factories to manufacture the goods.) And it touches all of these areas.
4. Land value in many countries is actually many times the entire stock market capitalization of their largest indices. It actually accounts for the largest amounts of wealth disparity.
5. It is probably one of the more fair things to tax. Consider the fact that if you just got somewhere first you now "owned" all the land just because you got there before other people did hundreds of years ago. Families have then just kept this early advantage for generations (it is no surprise that rich English families for example love owning land in the UK). Taxing this is a lot more fair than taxing a business that someone built.
So it basically addresses the problem by taxing the largest potential asset class, that basically can't be avoided or shifted overseas. And it doesn't impact young people that don't own any land yet. You can then use the taxes on land to actually LOWER income taxes and STILL increase equality. Like you said, a wealthy person probably owns X amounts of land but only has 1 income. Whereas a middle class person only owns 1 land and has 1 income so would be comparatively better off.
Interesting how you didn’t include the Yang Gang solution of a consumption tax on economically productive digital transactions (consuming data for selling ads, all Amazon sales, etc) that then gets redistributed to all people as ubi. Have you considered that idea?
If we are going to taxes that have 0% of ever happening...a 100% wealth tax on every billionaire who goes on TV to say "I want you to raise my [income] tax"....aka Old Man Grifter Extraordinaire Buffet
Fantastic read.
If we are dreaming, I'll add an idea for the billionaire tax:
- Pay an annual % of wealth into a trust fund that builds and maintains beautiful private-public works, like city parks, natural parks, libraries, etc. It's actually how noblemen and the wealthy in the past will pay its dues (cannot recall how much of it was considered a cultural/religious duty vs a legal requirement) but at least it instilled a sense of belonging to one place, and of leaving an honorable reputation that would outlast the person.
Now we get absolute privacy with complete detachment from the locale they live in, privatized upside with socialized downside, reputation and honor are shunned for the ability to do what you want in private.
Anyway, I consider the main problem to come from the governments, but the incentives are out of whack at every level.
Dreaming phase off, let's put the money-making glasses back on.
Push what is already falling
Accelerate the govt starving itself to death so we get to the future of the sovereign individual faster.
It's so crazy how many people don't understand this really basic stuff.
Unfortunately this type of corruption is always common when a civilization is in terminal decline, which ours is. Hopefully we can fully move into the information era sometime in our lifetimes, until then the only thing to do is to take care of yourself, your family, and other cool people.
Weimer America is going to be wild.
Great post. I've experienced some difficulty explaining consequences of inflation to professionals who entered the workforce in the early 70s, but your breakdown is easy to understand info that hits some points I've been missing.
Great read, although this is a tough pill to swallow. I'm so far behind, PNGMI. I wish I found BTB years ago. I'm the first in my family to go to college, and I thought that was a good thing. Now I would give 20 BTC to get that time back. Its a strange feeling to have your outlook changed so rapidly. I spent my 20s locked in the idea that I had to finish college, get a menial job somewhere and save enough money to start a business. I just could not see that there was any alternative. Grateful I found the jungle. I now have a vision for a different path in life that was simply invisible to me before. At a minimum I can at least see the truck coming now. I'll go out on my shield like a good Marine. I dont want to eat bugs all the time, but I once ate a cricket that was buried in chocolate.. it wasn't so bad. Maybe I like crickets.. We should all start eating them if you think about it.. it's for a good cause you know... eating crickets is sustainable & will help save the planet.. Don't you love the planet? This is what democracy looks like. We must all do our part. Aren't you a good person? You look hungry citizen. Here, take this nourishment. Its the new Powdered cricket milk. Go ahead. We're watching. ONLY ENEMIES OF THE PEOPLE REFUSE TO EAT THE GREAT SUSTINANCE OF MOTHER EARTH.
We have a wealth tax in Switzerland (low, like 0.25%) and I think that’s ok.
A (very low, like 1-3%) tax on inheritance would benefit many and decrease the wealth gap.
On the other hand, I favor reducing government spending and we all know that over the long run most wealth of the rich will be gone anyway after 2-3 generations ...
To clarify Step 1,
You are saying that a business owner can:
1) set up company in a tax haven
2) live in the US
3) take out loans from the company at 0% interest
4) pay $0 in taxes due to a loan
5) Not pay back the loan to the company
If my understanding is correct.. Would that cause any auditing problems?
BTB has an amazing ability to take a complex macro view, distill it and explain it in plain English so it’s easy to understand
Some interesting points in the article, thanks! Think one point in Biden plan was "step up basis" tax when folks pass away w/o realizing gains and pass investments to children who don't pay any tax. Another "feel good capitalism" story is the founder of chobani who gave equity to low level employees early on and once company went public many benefitted that otherwise wouldn't have. I personally think that is great way of running a business.
Also UBI is bad and inefficient because it is slavery of the productive by the unproductive. Unless the productive are 0% humans 100% robots.
My concern is that wealth taxes just incentivize politicians to become more corrupt and rent seeking, leading to socialism/nationalizing of assets. See examples of Zim, Venezuela or South Africa, all of them extract huge taxes out of the wealthy (relatively speaking), but it just ends up in the pockets of political elites who dole out small amounts to the poor to remain in power.
But the US could do with some higher taxes in order to fund some public institutions (education and healthcare).
Nice read. Moslty worried about the unrealized gain taxation (wich seem so stupid but we've seen worse happening so...).
What is the chance of this to happen in your opinion?
Tax unproductive capital. Employing your valuable skills is highly productive, so why is income of a doctor at 500k taxed more than the $30 mil of a rich guy sitting in the s&p? That $30 mil should have a yearly burn that goes towards something productive. Or the rich guy can invest it in a new company, which is productive for society and shouldn’t be taxed.
Basically whatever makes society the most effective, efficient, equal opportunity should be done.
Hoarding capital couldn’t even be done in the past. If you had a ton of wealth you’d have to hire a personal army to defend your estate and yourself from being rekt by bandits or other powerful.
I still think a land value tax is the best idea.
Land is a kind of monopoly and basically soaks up all the growth / earnings from everyone and forces everyone down to a minimum level of earnings. (Why do you think your online goes so well? Exactly, lack of rent costs is the competitive advantage). Land value tax is IMHO the best for a number of reasons.
1. Taxing land value doesn't create any (or at least much less) deadweight economic losses.
2. Taxing land value can actually free up more land for productive use as speculators can't afford to hold land as a speculative asset anymore without doing a proper development or something that would be cashflow positive.
3. Land value is probably the largest component of most peoples expenses (rent paid in their housing, rent paid on farms that produce their food, rent paid on land that people mine minerals from to make goods, rent paid on factories to manufacture the goods.) And it touches all of these areas.
4. Land value in many countries is actually many times the entire stock market capitalization of their largest indices. It actually accounts for the largest amounts of wealth disparity.
5. It is probably one of the more fair things to tax. Consider the fact that if you just got somewhere first you now "owned" all the land just because you got there before other people did hundreds of years ago. Families have then just kept this early advantage for generations (it is no surprise that rich English families for example love owning land in the UK). Taxing this is a lot more fair than taxing a business that someone built.
So it basically addresses the problem by taxing the largest potential asset class, that basically can't be avoided or shifted overseas. And it doesn't impact young people that don't own any land yet. You can then use the taxes on land to actually LOWER income taxes and STILL increase equality. Like you said, a wealthy person probably owns X amounts of land but only has 1 income. Whereas a middle class person only owns 1 land and has 1 income so would be comparatively better off.
Interesting how you didn’t include the Yang Gang solution of a consumption tax on economically productive digital transactions (consuming data for selling ads, all Amazon sales, etc) that then gets redistributed to all people as ubi. Have you considered that idea?