Hey, it's time for some basics of accounting. Below are how those going to look like in the books. Assume initially there were $2000 in cash account, nothing in assets.
You can see that for each transactions, the CR/DR amount are always matching, but the money flows to different accounts. After those two transactions, the company still has $1500 in cash, and realized a $500 loss, but the sum of all account balances is still $2000CR.
Given the huge amount of transactions and the rounding associated with taxes, thus there might be very small discrepancies between CR entries and DR entries, and that's only legit reason money vanished from accounts. I would expect such amount is no more than a couple of hundred dollars, even take a step back thousands, that's still heaven and hell differences. I cannot find a reason other than fraud can lead to such a big hole.
You are doing it wrong; the sum of all accounts should always be zero.
In a certain dumb system used in English-speaking countries, instead of summing to zero, they play games with determining which account is a "credit" or "debit" and have to do the subtractions in the right way. This is for the job security of accountants.
In a sane system, you make external interests (owner's equity and loans/liabilities) negative-running accounts. E.g. if the business has $1000 equity and value of the business goes up by 10 dollars which does not come from a loan, then equity goes from ($1000) to ($1010) to offset that so the balance remains zero. If the 10 dollars came from a loan, then that loan account goes more negative by $10. E.g. loan goes to cash. Cash goes from $500 to $510. This comes from a new loan, so the account tracking that loan is ($10).
equity + liabilities + assets + .... every other account ... + cash = 0
Owner's equity is kind of a loan: the business "owes" that value to the owners. ("Owe" and "own" are related!)
I'm probably not understanding it fully, but the problem in TSLA accounting seems to be that assets they have not been sold are recorded in the books as undervalued.
Nope, I did not. I clearly mentioned the account initial balance etc., and most importantly I did not want to set up a whole charter of accounts. You cannot simply say the sum of all accounts should be zero, depending on the convention used, the balance of account can all be positive. The only thing you can say for sure is that sum of all credit amounts minus all debit amounts should be zero.
I don't think those listed companies tend to undervalue their inventories as it will make their balance sheet ugly and potentially reducing their ability to raise more capital. But even if they did do so, those gaps should be shown in accounts like unrealized loss etc instead of just evaporate. Tesla has a professional accounting team, it's impossible they made such mistakes.
Even if you try to tax the riches, they have billions of ways to evade it. The tax laws are so complicated for a reason. Here in Australia, there were cases that some individuals that earned just about A$1M pa., and they paid ~A$980K to companies registered in Virgin Islands etc. for managing tax affairs. Such arrangement knocked down their taxable income to ~A$19K, and thus they paid probably a couple of dollars taxes if not not even a dime. Eye-opening, right? But those were not those super rich ones. You can just imagine what those super rich people can do. So the burden of the tax would be on mid-income people. I would expect the same in US.
If there were political will to tax the rich then you'd have to, in addition to changing tax law (obviously), fund IRS investigations to ensure the taxes are actually collected. Throwing up your arms and saying "well we can't tax the rich, they're too powerful and wily, and will easily commit tax fraud to evade those taxes, and in actuality you'll bring in less money" is exactly the weak attitude that stalls efforts to fund vital services. If you think people will commit tax evasion, then put more resources into investigating tax evasion. Historically, money spent recovering taxes has yielded more than the cost of said investigations.
> Throwing up your arms and saying "well we can't tax the rich, they're too powerful and wily, and will easily commit tax fraud to evade those taxes, and in actuality you'll bring in less money" is exactly the weak attitude that stalls efforts to fund vital services.
It goes further than that, it is the exact argument made by wealthy people as to why we shouldn't tax them more aggressively. Parroting that argument is ludicrous unless you're considerably wealthy yourself.
Those loopholes were by design, complicated enough to prevent most people like us to take advantage of it but will allow those who can afford to evade lots. I'm not sure if people is just naive or playing dumb.
It is extremely difficult because you not only need to do it on a per-country level, but globally. Otherwise you just punish foreign companies that genuinely invest in a country with stricter tax laws (and most will just choose another country, just like it's happening in Europe). And ultimately, it depends on the will of the American administration - and they can be extremely bullish about imposing their laws on smaller countries, sometimes even using their military advantage.
> fund IRS investigations to ensure the taxes are actually collected.
Even people who want to tax the rich are skeptical about empowering / funding the IRS because there are many studies showing that the IRS disproportionately audits the poor.
If that’s true, then why would more funding help new enforcement against the rich rather than multiplying the current problem? Generally cash/support fixes material resource issues but cannot fix policy issues
IRS enforces against the poor because it is easier and they have been directed that way. It is possible to increase enforcement, direct where that enforcement goes, and change the law so that it is easier to enforce against the rich. Another would be simplify the law for to make audits for poor unnecessary and leave rich fewer places to hide.
We have gotten used to Congress being dysfunctional and not passing laws that we think the current laws are some unchangeable state.
Sounds like we agree then that it’s important to change policy first before dumping more resources on a malfunctioning org and hoping for the best. But parent mentions “funding investigations” as a cure.. my point is just that there’s no indication that this makes things better, and might actually make them worse.
I do agree that changing policy is a separate, yet complimentary, step. But maybe the poor are disproportionately audited because the IRS doesn't have the funding to effectively target the rich and succeed? Maybe with better funding, they could successfully extract more tax dollars from the rich, incearsing the ROI of funding the agency?
I don't think further funding the agency is a completely nutty idea. Although if you truly believe the agency is broken, and that being broken isn't related to their funding, then I could understand your perspective. I lean more towards the idea that at least some, maybe even most, of the issues they have might be due to a lack of funding. That makes more sense to me than most of the criticisms I've heard of the IRS, which seem to mostly be on partisan idealism framed as otherwise.
My point was that Tax Laws were deliberately complicated to allow some people to evade taxes. If you put that into consideration, you will find it's a lot easier to understand the status quo. Again, what you think or what I think do not matter after all.
It matters completely. Congress makes and changnes tax codes, people vote in congress. People need to remember they are the ones being served and they are in control. Absolving themselves of their representative's choices is the start of the downfall of the system.
1. Gary’s arguments for taxing the rich aren’t about taxing income. It’s about taxing wealth.
2. By his argument, most of the wealth are immovable: the rich disproportionately owns actual, physical real estates, and stocks of actual companies. As these assets are based in the country, you could tax right at the source.
For the really rich, I agree about the usefulness of taxing wealth.
The problem is that such a tax must be strongly progressive, or it may affect the poor much more than the rich.
For instance, I have seen cases in some countries, where after the discussions about the usefulness of such taxes for wealth, the result was the establishing of some high taxes on property, whose only effects were that e.g. someone who were jobless for some time might be forced to sell their house, and for a disadvantageous price, for not having with what to pay the property tax, thus becoming both jobless and homeless, or someone poor who inherited a house might be forced to sell it for a disadvantageous price, for not being able to pay the inheritance tax.
The result of this kind of misguided tax was an even greater transfer of wealth from the poor to the rich.
Yes, the only thing that genuinely scares the rich is wealth taxes.
It is next to impossible to hide the fact that someone owns something like real estate
In addition to real estate I might consider other property such as bank accounts, at least above a certain threshold. Presumably that cash has to be invested somewhere (or should be encouraged to do so)
If we could get a real wealth tax, I would do away with income taxes like some states have done (i.e. Texas)
>It is next to impossible to hide the fact that someone owns something like real estate
Real estate can already be taxed via property taxes. Unrealized gains in securities can't be taxed the same way as their value is much more volatile, with potentially large daily swings. Texas makes up for the lack of income taxes with relatively high property taxes.
>In addition to real estate I might consider other property such as bank accounts, at least above a certain threshold.
Interest from savings accounts is already taxed. The wealthy don't hoard their wealth in bank accounts though.
While it doesn't make sense to tax unrealized gains, they could be taxed if they are used as the basis for a loan. Loans on unrealized gains are one of the main ways the wealthy are able to live lavishly while paying very low effective tax rates.
It seems fair that you shouldn't be able to have it both ways—if you are getting any financial benefit from an asset, including a loan, there's a pretty strong argument that you yourself are "realizing" that value.
Sure, but everyone pays those taxes. If we are talking about inequality and the wealthy having ways to get out of (or better said, drastically reduce/defer) taxes that everyone else has to pay—i.e. income tax—I think loans on unrealized assets is probably the first thing to look at.
Banks are also taxed on the interest from the loans. Loans backed by assets are not just free untaxed money as you seem to think they are. If an entity is unable make the payment on a bank loan, then they would be subject to having their collateral seized, and the bank would then eventually sell the assets, which would be subject to capital gains.
I think it would be more realistic to heavily tax inheritance and re-evaluate trust based loopholes.
> Loans backed by assets are not just free untaxed money as you seem to think they are.
I mean, you’re clearly moving the goalposts here. We’re talking about tax on unrealized gains for the wealthy, not sales tax, property tax, or taxes on the bank.
If you’re able to keep taking out new loans to pay off the old loans until you die, with an appreciating “unrealized” asset as collateral, then yes all that money is effectively tax free if we’re talking about income tax and capital gains.
I believe the previous poster was arguing that taxation still exists at a macro level, i.e. money is sucked out of the economy. It doesn’t matter so much who paid the taxes. The wealthy pay the interest.
Part of me wonders if doubling down on taxing transactions (which tariffs is categorically) can thus work. It seems like an elegant way to avoid having to deal with wealth vs income.
>The property or goods purchased with a loan are subject to tax.
There is no such federal tax in the USA.
And it is just ludicrous to suggest that stock holdings cannot be subject to a wealth tax. The value of stock holdings are established all the time when the wealthy provide their net worth for their business dealings.
The IRS requires me to submit the value of my IRA holdings as of the end of the year to determine how much will be taxed the next year (by forcing me to withdraw a dollar amount - determined by the asset value of my holdings - which vary minute by minute when the markets are open). So, I guess it's ok for the IRS to measure my wealth each year to enable the IRS to collect a tax on that wealth - but some how you say that's impossible to do for billionaires?
I really don't see why "equity is volatile" is some insurmountable problem. We see the same exact "problem" show up with day trading, where it is possible to accumulate a lot of taxable gains and end up with less than you owe if you don't sock away the money to pay for taxes at the time of locking in the gains.
If an equity is valued at $X on some date when we lock in the value for a wealth tax or a tax on unrealized gains then sell enough of your equities on that date to pay for the tax and store that in a zero-risk asset. This can easily be done automatically.
Unrealized gains can be taxed - for example, Ireland has a Deemed Disposal tax on ETF investments, where after 8 years, any gains are considered to have been realized and tax is due (even if no sale has taken place)
Deemed disposal subject ETFs can be taxed under an eight year exit tax scheme, but this can be avoided by simply investing in US domiciled ETFs or individual stocks.
> Yes, the only thing that genuinely scares the rich is wealth taxes
Why though? We’ve already established the end game if we don’t do this. It’s hard to imagine society willingly regressing back to feudalism. What we likely need is a sensible plan which gradually adopts wealth tax rather than a radical step change.
I'm scared of 2% wealth taxes (as discussed in New Zealand) because I believe that will take 100% of retirement savings over time. And I'm no multimillionaire. Say portfolio returns 6% and drawdown(spending) is 4% then 2% takes 100% of gains.
The 1% or 2% figures sound trivial to the voting majority but they really are not trivial. Cue discussion on compounding.
The other issue is Forcing sale of private owned businesses. If you fuck with the incentives to grow a businesses, you will end up with a shitty economy and everybody suffers.
Apart from the obvious 2% * decades = lots (for low growth investments).
I could work to create new high-margin export income for New Zealand: I have the skills. But I don't work because I hate our taxation system: NZ loses.
An economy needs to incentivise everyone to work including the wealthy: otherwise it bombs. It scares me to see people in the US want to introduce features to cripple their most successful economy. I think most workers poorly understand businesses or economic incentives.
We (New Zealanders) are already getting taxed 1.4% on wealth effectively, if your on a tax rate of 30%+ (most people).
Most people just don't know about it. Due to the FIF rules. Any international investments you have get taxed like this (it's not so clear cut, but more or less). The only exceptions are NZ investments and Aussie investments, maybe. There is a tool to check if an aussie share is except from the FIF rules. e.g. Aussie ETFs aren't, even if they invest in only aussie stocks...
So everyone with a Kiwisaver (retirement scheme), aka most people, have large portion invested overseas, and thus are paying the 1.4% p.a.
It also discourages high net worth people from moving to NZ, as they usually have investments outside of NZ, which will get taxed once they move here (after a few years exception).
The small "win" we do get is you can (cost bases) invest up to $50k overseas without the 1.4% FIF rules applying, (though dividends are still taxed). But like no one knows about it, and managed funds can't take advantage of this, so most people don't utilize this, especially not low income people, who generally aren't that well educated on finances.
Don't get me started on our lackluster retirement scheme, Kiwisaver, with near 0 tax incentives, and propping up the housing market prices.
There's heaps more invisible wealth taxes that increase the marginal tax rate by a few percentage points. Rates, Insurance, increased financial liabilities, means testing, unequitable seperations, oodles of time wasted managing money, yadda yadda. And if you want to keep up appearances then the costs skyrocket up.
If you don't have anything then you can avoid certain costs, or sometimes you can get subsidised.
The wealthy also get some financial boosts e.g. house appreciation. And white collar crime has cheap convictions (or you can avoid consequences)
I've never had kiwisaver because I believe in the value of optionality with my own money. I severely hate locked up money. Being able to deploy money has gained me a small house worth of money. The FIF rules are a cunt to manage and Sharsies are SHIT - they've promised to deliver an FIF report but haven't done so.
Interestingly the actual website for Kiwisaver describes it as a "savings scheme". In the US we just have our own national Ponzi scheme, Social Security
I think our Kiwisaver is more like the US's 401k. We also have NZ Super, which you start getting at 65, and isn't asset tested (yet). But most can't live on just NZ Super.
Though some living frugal and have paid off their house, do live within super, even some renters living do make it work, but it's very bare bones.
While our NZ Super isn't asset tested, our residential care subsidy (elderly care) is asset tested, and is very expensive. When you get old and don't die suddenly, then it's likely your assets you've accumulated over the years will be used to pay for your care (though there are some way around it, but not usually cost effective unless you have a large amount of assets).
But, the elder care the govt gives you (if you can't afford it aka no assets), isn't very pleasant, so you really should plan for it while you're working age, and have investments large enough to cover the costs (which most in NZ don't do).
I don't think we have insurance here that covers elder care.
I believe the guys across the ditch (Australia), have a better retirement system setup. While in NZ our Kiwisaver by default contributions are 6% (total. 3% employer, 3% employee), been this since it started just about, while in Aussie, the current min default total is 11%.
Though Aussie's govt supported retirement payments are asset tested, where as they aren't in NZ.
I think having a higher min default is probably best for everyone, as most people don't change from the default.
If you think US Social Security is a "Ponzi scheme" (it is not, by definition), then do you also think all other highly developed nations are running Ponzi schemes because their national pension is paid from current accounts? Something that I see rarely discussed: Most national pension schemes need means testing. If you already have reasonably large savings, investments, or passive income, then you don't need the full amount of national pension. You can receive less. The remaining portion can be redirect to those in greater need. One thing we have learned in economics in the last 10 years, when poorer people receive direct cash payments from govt's, they spend it into the economy as a much greater portion than those wealthier.
Also, the US has 401(k) savings plans. It is pretty similar to Kiwisave.
Not quite. If you are ultra wealthy because you happen to own several large buildings, fleeing the country to avoid taxes is easy. Doing so with you wealth, however, isn’t.
Which is why they will leave with mobile wealth before the act goes into effect, taking away the capital workers use to earn a living. Property taxes on land and fixed structures work well as they cant run away in a practical way.
The means of production is still here, what’s left of it. Lower asset prices will benefit the poor. What should have happened during COVID is the government took a percentage of businesses to the cost of lockdown/furlough (if they were of a certain size) rather than subsidising the asset hoarding class at the expense of workers. Then you give the workers part of these businesses, spend the rest on re-industrialising. It would have caused the biggest economic boom in the UK maybe ever and with all these consumers available to buy things you’d get a lot of investment and some people would use some of this wealth (£1tn in the UK alone, about £15k for every adult and child in the UK) to start small businesses creating an even better economy.
It’s got to be worth a try rather than the disastrous economic policies that got us here.
The US already claims tax dominion (for its citizens) over the whole world. You get the foreign earned income exclusion, and you can also avoid double taxation in many countries that have a tax treaty with the US, but otherwise the default is that you need to report and pay income tax on worldwide income, no matter the source and no matter where you are a resident.
In the same vein, if the US were to implement a wealth tax, the simplest way in terms of enforcement and not creating perverse incentives to shelter wealth outside the country would be to make it international in scope. Yes, people could give up their citizenship, but that's a huge sacrifice which most wealthy people would not want to make at any price, and there's already an exit tax in place for people that do this.
Not totally. The wealthy are incredibly heavily invested in our economy. Take Elon Musk for example. He’s heavily invested in SpaceX, Tesla, and Twitter. If he walks away from the US, Tesla, Twitter, and SpaceX are all still here and can’t easily “run away”. Sure, they can take some “mobile wealth”, but if you are very wealthy you can’t just leave a whole economy (that’s where your wealth is).
> He’s heavily invested in SpaceX, Tesla, and Twitter.
You make it sound as though he put a lot of his own money (somehow obtained from elsewhere) into these companies.
But that's not true at all. It is correct English to say that he is "heavily invested" in these companies in the sense that his wealth is paper wealth based on the perceived value (stock price) of these companies.
But he is not invested in them the way that a typical person has their retirement funds invested in a company or mutual fund.
Elon came here under a similar story. The party in significant power cheers on 'kill the boer [farmer]' ( and 'redistribute' their capital to the poor). He escaped to here. It's admirable he wants to prevent America becoming like South Africa.
The problem with that politics is stagnation. It is hard to move SpaceX and Tesla out of the country, but you don't get new companies in this situations, there will be less competition and, as a consequence, Elon Musk get more power, and there is nothing you could do about this.
Property taxes are a thing. If Joe Dirt has to pay property taxes for the home he shelters in, the wealthy should have to pay property taxes for the shares of a company that they use to secure loans for yachts and Ferraris.
The really great thing about taxing land, is that it can't escape where it is. Capital flight is a risk for taxing other forms of wealth.
And land is something of finite quantity that is actually taken away from the rest of society. Capital is produced, and made, and is not finite like land.
This is one thing that California got really wrong, it should be taxing land heavily, and income less.
Not an economist, but not necessarily. A heavy land tax would discourage buying real estate as an investment vehicle which might help drive prices down (or at least slow the rate of growth). It would also discourage leaving rental units empty.
I’ve always been in favor of a land tax like the Georgist’s describe.
I still think property taxes on stocks should be a thing. Americans pay income taxes from foreign sources, so why shouldn’t the rich also pay the same for overseas investments? Just close the loopholes with simpler tax laws. That could be like saying it isn’t hard to program some feature into software, though, so perhaps not.
Example: “Thou shalt pay 0% of all income and assets up to 20k, 10% to 50k, …, and 95% on up to 20mm.”
> why shouldn’t the rich also pay the same for overseas investments?
They do. US taxes apply to global income. Can you give a specific example where they do not? Please don't write a lazy reply like "move all their assets to a zero tax location in the Carribean." They are still responsible to pay US taxes for any income derived from those offshore investments.
No, look up prop 13, it heavily incentivizes sitting on land and never triggering a valuation reset. It’s a massive wealth transfer from the newcomers (who tend to be younger) to those who’ve lived there longer.
A fix would be if you use unrealized capital to secure a loan, that unrealized capital amount to secure the loan becomes taxable. Of course that would tax people trying to get home equity loans though.
The problem is that people will always probe the tax code for loopholes that weren't considered. It's a cat and mouse game, except the cat is fat and lazy, and gets paid by the mouse.
Eh, an exception for a primary home is common throughout the tax codes and the like. Just saying you realize capital gains on an asset used to secure a loan (unless it's a primary residence) would cover that without being out of step with everything else.
Sure, a billionaire could then use their $143M estate as collateral on a loan to avoid realizing the capital gains, loophole, but since you can only have one primary home, it's a very limited loophole.
I think a more reasonable interpretation might be "the government knows about expensive cars (i.e. that they are registered, have numberplates etc), and so charges some annual tax on the owners of those cars."
Describing wealth tax reasoning with an absurd example of the same reasoning on an individual level is an attempt to get people to understand what wealth taxes are.
The government that is supposed to work for you thinks you have accumulated too much stuff and is trying to make it legal to take a percentage of your physical wealth annually.
You only accumulated and maintain the wealth because of the government. Without the government and the economic system it cultivates, you’d never have it.
>You only accumulated and maintain the wealth because of the government
This is simplistic nonsense. No, the majority of wealthy people didn't accumulate their wealth because high and mighty lord government willed it into their existence. They did it within a system of laws and regulations that government admittedly does create for fostering such wealth creation. However, this still often requires strenuous effort by these people for their own ends. If it were otherwise, many more people would be rich just by virtue of living under a government. There is a real place for giving people credit for the wealth and capital accumulate, well beyond what government offers.
It's contradictory and absurd to argue that people accumulate wealth because of the government while at the same time arguing that we live in a situation in which we need more government control of people's earnings to prevent oligarchy since government doesn't do enough.
> They did it within a system of laws and regulations that government admittedly does create for fostering such wealth creation. However, this still often requires strenuous effort by these people for their own ends.
You are confusing two things thinking they aren’t highly related but they are. This statement could otherwise be written “government created a flawed system and motivated individuals achieved wealth by taking advantage of that system”. That implies a flawed system was causal. We don’t need bigger government, we need the right government. No one wants to say that those who worked hard - even by benefitting from a flawed government - should not have high wealth, but by your same argument, what did the wealthy children of these individuals do to justify their wealth? Their children? How long do we believe this chain of inheritance is sensible?
Most cancers didnt grow because some high and mighty body willed it into existence, they did it within a system of biological laws and conditions that admittedly the body does generate
To steelman the argument that wealth is earned, this kind of stuff tend to follow a power law. So a 10% increase in effort or talent can result in a several fold increase in wealth - especially when the effects of compounding interest are considered.
This is most apparent in sports or the arts. Being just a little bit better at baseball can be the difference between a million dollar contract and being stuck in the minor leagues.
Of course the question of whether we should want success to follow a power law is a different matter. As is the role of luck. Going back to the sports example, being born at the right time of year can be a huge, permanent advantage[1].
Your argument is built on a flawed premise that ignores the foundational role government and society play in enabling wealth creation in the first place. The counterfactual is simple: without government, without the legal and social structures upheld by a functioning society, there would be no stable mechanism for accumulating wealth at all.
Wealth does not exist in a vacuum. It is not some inherent trait of individuals that manifests independently of the structures around them. The wealthiest people succeed not just because of their individual effort but because they operate within a framework that provides enforceable contracts, property rights, regulated markets, financial systems, infrastructure, security, and a workforce educated by public institutions. Strip all that away, and they are no better off than anyone else in a lawless wasteland where power is dictated purely by brute force.
If wealth were purely a function of individual effort, we’d see people amassing fortunes in failed states or ungoverned regions where there is no government interference—but we don’t. In fact, in those places, the absence of government results in instability, extreme poverty, and the inability to conduct large-scale business. Conversely, the wealthiest individuals overwhelmingly exist in places with strong institutions and legal protections—because those things are prerequisites for wealth accumulation.
Your contradiction is actually the real contradiction. You claim that people become rich despite the government but then ignore the fact that wealth is unequally distributed precisely because the government does not intervene enough to prevent market capture by a small elite. A government that enables wealth creation is not the same as one that ensures it is fairly distributed. It is perfectly consistent to acknowledge that wealth requires government structures while also recognizing that unchecked capitalism leads to oligarchy.
So no, this isn't simplistic nonsense. The simplistic nonsense is pretending that wealth creation happens in a vacuum when, in reality, it is entirely contingent on the existence of an organized society with functional institutions.
> No, the majority of wealthy people didn't accumulate their wealth because high and mighty lord government willed it into their existence. They did it within a system of laws and regulations that government admittedly does create for fostering such wealth creation.
This is akin to saying you only achieved a high score in a video game by your own sweat and effort, and saying the video game developer had nothing to do with it. Without their work, you wouldn't have a system within which to accrue wealth. You may not even have the concept of wealth or property. Bezos wouldn't have his wealth regardless of himself creating amazon if there didn't already exist power grids to electrify his warehouses and data centers, roads upon which his delivery vans could travel, a financial sector to see him be paid for his goods, on and on and on.
The mythmaking of the self-made-wealthy has gone completely off the fucking deep end at this point with a portion of the population, as if these CEOs fell from the sky, cratered in the Earth, raised their arms and from them spawned hyperscaler businesses and cavemen left their campfires, picked up Macbooks and started writing React code.
> It's contradictory and absurd to argue that people accumulate wealth because of the government while at the same time arguing that we live in a situation in which we need more government control of people's earnings to prevent oligarchy since government doesn't do enough.
This is not contradictory at all unless you boil the points down utterly beyond recognition.
But laws shouldn't be set based on how easy they are to avoid. Lots of people drive too fast all the time, yet few argue that we should do away with speed limits. Besides, there is zero empirical evidence that suggests that raising rich people's taxes is ineffective. Yes, they are good at avoiding taxes, but professional tax collectors are probably even better at enforcing taxes. It's a question of political will, or lack thereof, due to not wanting to lose your biggest donors.
I understand this is a tangent but you picked a really bad example. We should be trying to remove every single speed limit that we can.
If the design speed of a road does not match the speed limit of the road, people will drive the design speed, cops will learn to sit there all hours of the day waiting for people to mess up, and get ticketed. Instead of just putting up the speed limit sign, city planners should design for the road to be safe without need for the speed limits to be in place. This can mean things like reducing the width of a lane, could mean speed bumps, to purposeful non-straight sections.
There will always be people who go much faster than the design speed. They are ignoring their and everyone else's safety.
I live on major street where the speed limit is 25 to slow people down. It used to be 35, and people normally go 35-45. The problem is that people go much faster when there is no traffic because the street feels wider. I would love if they redesigned for a slower speed. But there are cars in the middle of the night that drive over 60. It doesn't matter if street is calmed, they will go super fast and only tickets with slow them down.
There will always be people who go much faster than the design speed. They are ignoring their and everyone else's safety.
Those people don't care about speed limits, in part because they are generally set significantly too low. This has the effect of normalizing the scofflaws' attitude even when carried to a genuinely reckless extreme.
Conversely, if you raise the speed limit to the 85th percentile, anyone exceeding it significantly will stand out enough to catch easily.
Speeding is a victimless crime anyway. If you hit something or someone, you were doing something wrong besides speeding.
There's a third choice, though. It's bad when speed limits are much lower than the natural speed of the road, for the reason you describe. And it's good when the natural speed of the road is the safe speed of the road. But in addition to those two, it's also possible to introduce fast, automated enforcement— speed cameras.
This, of course, applies just as much to the actual topic of the Economist article; new inheritance taxes are just and good, but they should be written to be enforceable, and then they should actually be enforced.
If the safe speed of the road is 25mph, and the design speed of the road is above 25mph, you will not have safety no matter what the speed limit is. Vision Zero strategies take these factors into account to ensure safety.
Bollocks. The only thing that gets you is young and reckless drivers going 200mph on the highway, endangering everyone around them. There are limits to increasing safety in road design, and limits in the reaction speed of humans.
And the reason is those same rich influence the laws to their benefit.
It would be pretty trivial to tax the wealth if a society wanted to do so. But laws are made by lobbyists, who are paid by the rich, so what should we expect.
If the individual resides in Australia, how do they utilize the $980k sitting in the foreign company?
The company can buy assets in AU, such as a house, and lease it to the individual, but I'm pretty sure the ATO requires they pay the company rent at market rate, which will likely be unaffordable on a reported income of 20K pa.
A land value tax would be impossible to evade. Even a business’s assets will exist somewhere on land. In the case of intellectual property, reducing copyright and agents to 10 years should solve the problem.
And that's why Georgism exists! You can't offshore a plot of land.
If you've really managed to generate trillions in profit without using any, including indirectly (mining, showrooms, etc), fair enough. If your economic model is quite literally rent seeking, you can fuck off and give all those proceeds to whatever government ensures that land is not overrun by whatever raiders are historically a problem in your area. If you work for a living, you should be able to spend your earnings on a fancy apartment if you wish, and if a landlord wishes to make one instead of just sitting on land, they keep the profits from that too.
The only way to force everyone to pay is with a consumption tax. We'd tax based on consumption so those yachts, Rolexes, and home construction, etc. that the rich spend crazy amounts on gets taxed.
Of course since a consumption tax hurts the poor disproportionately, the gov't would send a refund check to them, in large enough amounts to make up for it, where the poor are basically paying zero tax.
It also fairly discourages illegal immigration because illegals wouldn't get that kickback check from the Gov't, since they're 'visitors' not 'citizens'.
As complicated as this would be to implement, it is only solution I think sounds like a fair policy to discourage getting filthy rich while lifting the poor to a better economic balance.
Although, I have a feeling the filthy rich would simply choose to spend elsewhere where the consumption taxes don’t exist or are lower…
It's easy to implement, because sales tax already exists in every state but 5 right? So it's already all built-in to the Point-of-Sales software, banking, finance, etc.
Insofar as simply "choosing to spend elsewhere (outside USA)", somehow sales-tax is something people find difficult to avoid already right? We're just talking about increasing existing sales tax amount, and then eliminating all Federal tax.
Revenue neutral carbon taxes with all income dividended back out per capita are really the move here. It’s also one of the few really promising ways to tackle climate change effectively.
Seems to me like that's a similar approach but a consumption tax is easier for everyone to understand and would be therefore more palatable to the public. Also the consumption tax would have a similar affect of taxing people proportional to the amount of damage they're doing to the environment. For example, we want a big tax on Rolexes but making a watch doesn't really do that much carbon consumption.
> Seems to me like that's a similar approach but a consumption tax is easier for everyone to understand and would be therefore more palatable to the public.
There is a false assumption here, that easy to understand makes it more palatable. A flat capitation would be even easier to understand, and even less palatable, because the ease of understanding is directly connected, in its case, to the ease of opponents organizing against it. A flat consumption tax faces a similar problem, which is why the efforts to push one to replace the income and payroll taxes for decades now under the label "Fair Tax" have been unsuccessful -- easy to understand isn't a political benefit when people who understand it often don't like what they understand.
The current insanely complicated tax code (with trillion upon trillions of rules and special cases) is something that even professional Tax Accountants admit no human can possibly understand.
But we know one thing as a fact: MOST OF IT was WRITTEN by Washington DC lobbyists specifically to embed in it all the loopholes that make it so that the elite in this country will pay hardly any taxes at all. Basically the fox guarding the hen house.
The obvious solution is to throw it ALL out and go with something simple that everyone understands. The reason this doesn't ever happen is because those same K-Street lobbyists make very large financial "contributions" to the same politicians in DC whose votes are required for a change.
In Washington state, they passed a capital gains tax primarilly to tax Jeff Bezos. Bezos simply left the state just before the tax took effect. So did a lot of other wealthy residents.
The solution to that might be to increase funding to the irs; currently the political elites are seeking to kneecap the irs so that it’s even easier for them to evade taxes.
Nothing lasts forever. The rich get most of the economic growth is inevitable. It's the Matthew effect. In general, the more assets you have, the more passive income you have, which in turn frees people up from worries about making breads for the family, and thus can spend more time on think and do things more important in the long run. Again, that would reinforce their financial status. In the meantime, the poor would have to worry about next meal, and mostly don't have the reserve for investments. Thus, they will most likely struggle to save something, and even if they do manage to save some, an unexpected event can easily wipe it out before it reaches the threshold.
If the riches were conscious enough, they would return a fair share to the poor and the eventual crash will be deferred much longer. But you know, everyone wants more money, no exception for the riches. It looks the only thing we learn from the history is that we learn nothing from history. So here we are: the same drama of empires' rise and fall, the only differences are the locations and the actors.
It was never meant for everyone. I guess the original audiences were those need ultra mobile devices with extra large screens and do not care much about the price.
It looks you might have reversed the result and the cause. The ban was there simply because US peers could not compete already, rather than the ban led to less competition. Mobile devices are really just a relatively small chunk of Huawei's business.
70%, REALLY? My personal experience was that at least 50% of the time, Copilot backfires, sometimes the proposed code was beyond ridiculous. Thus I had to disable it.
