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U.S. Politics: Attaquer son cul orange!

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2 hours ago, Free Northman Reborn said:

How does the plan propose to aggressively reduce billionaires fortunes without forcing them to sell their controlling shares in the companies they created? If you need to pay tens of billions of dollars in taxes over a handful of years, the only way to generate the cash to do that is to sell off your shares. Meaning you lose control of your company.

Seems unworkable.

2 hours ago, Ran said:

That is the big issue I have with a wealth tax as described.  I've never seen a solution to it. Jeff Bezos, Bill Gates, Elon Musk, Warren Buffett, etc. are not Scrooge McDuck. There is not a literal giant vault full of money that they practice their breaststroke in. Much of that wealth is paper wealth and can fluctuate by tens and hundreds of millions in a single day due to the vagaries of the markets. I believe Musk has seen his holdings rise or fall as much as $1 billion in a day. And a lot of that paper wealth is tied up in stocks that also provide some say in the future of a company. Buffett has a 30% voting stake in Berkshire Hathaway, and who's to say he shouldn't have it?

.......

Well, just straight off the top of my head I can think of two potential solutions.  They can borrow against their shares to pay it off, or you could have a system where you pay the wealth tax by selling shares to the tax office, but retain the voting rights.  The second one would need some caveats (such as when the voting rights return, and if they can be sold), but given it took me 60 seconds to come up with this seems to be overblown.

The bigger issue with any wealth tax is valuation.  How do you fairly value property, private companies, non-standard assets (jewels, paintings, cars, etc.)?  That is a much bigger bugbear.

That said, there are significant benefits to a wealth tax that don't usually get mentioned.  Such as the economic one.  It creates an incentive to put assets to use, rather than just allowing poorly performing ones or the vacation home to sit idly by.  

1 hour ago, Mudguard said:

The wealth tax is an interesting idea, but only in a theoretical sense because it has essentially a zero percent chance of passing in the US.  For the record, I do share some of the same concerns that Free Northman Reborn and Ran have, depending on the implementation of such a wealth tax (i.e. taxation of shares using present value vs. cost basis).

Agreed.  I'm a huge proponent of wealth taxes, but the reality is that this is just theorising.  

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57 minutes ago, Fez said:

Umm, he's running in the primary, not third party. By definition he's not a spoiler.

Also, Bloomberg has far more in common with Democrats than Republicans.

Have you lived with him running things? He has nothing in common with Dems who aren't billionaires. Don't be fooled by his anti-NRA stance and desire for gun control -- people shooting up anytime anywhere totally offend his very fastidious sensibility for order, neatness and things all tidy and their box, not about grief and anger about the needless horror of the lives destroyed by people going crazy with guns who just want to kill people.  

And those neocons and etc. who have anxiety about social engineering via political power ought to think real hard about this guy,

Some, like Josh Marshall, think him running will increase Warren's or Sanders's chances for the nom -- that is, if he doesn't then run as a 3rd party, about which there is no guarantee.  He's certainly blathered about doing that more than once already.

 

Edited by Zorral

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didn't Bloomberg self destruct already at least once during this primary season?  And I could swear he's self destructed in the past as well.

 

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For some reason Bloomberg offends me a lot less than Howard Schultz did but if I press myself on why I struggle to come up with an answer.  

ETA:  Maybe because Schultz seemed to bring a greater level of naivete that Bloomberg's less guilty of.  

Edited by Triskele

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1 hour ago, ThinkerX said:

didn't Bloomberg self destruct already at least once during this primary season?  And I could swear he's self destructed in the past as well.

 

https://www.cityandstateny.com/articles/politics/campaigns-elections/michael-bloomberg-president-history.html

He's just canny about not losing money.

He's never declared bankruptcy as a personal financial tool, unlike bedbug.  

However, this is the fourth time he's announced he's 'considering' running for the presidency.

From this October 2019 article linked above:

Quote

Though, Bloomberg’s presidential consideration is likely less about Biden’s shortcomings and more about Warren’s rise in the polls. The billionaire has made it clear that he disagrees with the senator’s anti-corporate stances and her wealth tax plan. When asked about Warren’s wealth tax proposal in January, Bloomberg said it might be unconstitutional and likened it to socialism. “It’s called Venezuela,” he said.

 

Edited by Zorral

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6 hours ago, Ran said:

He ruled out voting for Trump if you read between the lines of what he actually said. He'll vote for the "most professional" candidate, regardless of policies, and the knowing laugh from the audience makes it pretty clear they all agree that Trump will never be the "most professional" candidate.

For Gates' full remarks, which are much more detailed and interesting than the hack job tweet that has gone around (his $100 billion joke was in the context of just how much taxation is reasonable as opposed to his believing Warren's tax plan amounted to that, as well), see below:

 

 

I have no desire to listen to a billionaires take on anything. They shouldn’t exist. 

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10 hours ago, Free Northman Reborn said:

How does the plan propose to aggressively reduce billionaires fortunes without forcing them to sell their controlling shares in the companies they created? If you need to pay tens of billions of dollars in taxes over a handful of years, the only way to generate the cash to do that is to sell off your shares. Meaning you lose control of your company.

Seems unworkable.

Question is why do I or should anyone else care? What's next? Complaining that billionaires might lose some political influence?

9 hours ago, Ran said:

If what you love is running a company that you founded, but you are forced to sell away your ownership of that company, you will no longer be running that company. 

And why should I care about this? If it somehow would lead to substantially lower economic output or more precisely lower economic well being, then maybe I should care. 

I'm not really concerned about about founders of publicly traded companies losing control of the companies they founded. That's kind of the trade off they made when they took their companies public (which in the process got them very rich).

Should I be concerned that co-determination, ie putting labor representatives on corporate boards is bad, because billionares who founded companies might lose some influence?

Edited by OldGimletEye

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9 hours ago, Free Northman Reborn said:

Then you have the added complexity of growth companies like Tesla and SpaceX (and Amazon in the early years) who pump all their resources into growth and innovation for years or even decades, and run at breakeven or even a loss during this period. Meaning they have no dividend payouts to shareholders at all, while the capital value of the shareprice increases ten or twenty times at the same time.

Meaning the share owner has no cash inflow from the company’s growth in value during this period, even though his capital is now worth twenty times more on paper.

Here is what you need to do. Convince me that this will ultimately this will lead to lower economic growth to the point it will lower overall welfare.

And lately, well perhaps not so lately, since Reagan, the record of supply side economics hasn't been looking too hot.

What's next? How conservatives showed those libs a thing or two about economic policy in Kansas?

Edited by OldGimletEye

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7 hours ago, ants said:

Well, just straight off the top of my head I can think of two potential solutions.  They can borrow against their shares to pay it off,

 

You're not likely to be able to borrow more than 50 cents on the dollar for a stock-backed loan, as discussed here. People definitely do take securities-backed loans, but mostly for buying minor (but expensive) things without having to sell a percentage of their investment portfolio. Which is a long way of saying I'm not sure this is really feasible long-term. For Bill Gates to pay a $6 billion wealth tax using loans, he'd have to back it with more than $6 billion in stock (maybe not $12 billion, because he's Bill F'ing Gates, but still). And then he'd have to do it again, and again, and again. By the time he's paid $30 billion over 5 years, he'll have as much as 60% of his assets in hock. This doesn't seem sustainable.

And what if your assets aren't constantly climbing? His net worth fell 30% during the 2008 recession, which also would have reduced his dividends and income from capital gains in that year. Reduced his tax for that year as well, of course, but the issue is that if he had racked up a bunch of loans, he might be in a very inequitable pinch.

Quote

or you could have a system where you pay the wealth tax by selling shares to the tax office, but retain the voting rights.

 

But the tax office doesn't want stocks. It wants money to pay for Medicare-for-All. Do you mean you should give them sufficient stock where the dividends will cover the tax cost? MSFT has a $5 a share dividend, I think. Gates doesn't own a billion shares of MSFT stock, however.

And then, there's the expedience of saying, fine, I'll sell part of my portfolio to pay this. But capital gains! So you have $6 billion tax bill... and to pay it, you end up having to pay 20% capital gains on that, so you need to first sell $7.5 billion, pay $1.5 billion in capital gains, and then $6 billion in wealth tax. This is 15% of Gates net worth. But, of course, he can gain massively from year to year. The stocks he owns appreciate. But now he has fewer stocks to appreciate. Which means in the long run this is not sustainable. 

It seems far more sensible to focus on the system. Stock transaction taxes, capital gains taxed the same as income with higher marginal income tax rates and more tax brackets to apply them to rather than the 10/15/20 capital gains bracket, and so on. Reducing the values of companies by eating into their profits reduces the value of stocks which reduces the wealth of those who own those stocks.

And then tax accumulated wealth on inheritance, as if it were a massive capital gain for the heirs. And close loopholes. Particularly the corporate loopholes where massive companies which are far more valuable than any individual stockholder are getting away with an effective 0% tax rate. This is absurd.

Quote

 

That said, there are significant benefits to a wealth tax that don't usually get mentioned.  Such as the economic one.  It creates an incentive to put assets to use, rather than just allowing poorly performing ones or the vacation home to sit idly by.  

It does this, and it's basically the one good argument for a wealth tax, but a 6% rate as Warren now proposes is genuinely confiscatory because it's not sustainable. Just a couple of months ago her top rate was 3%, but she needed the M4A math to work after even several optimistic options were in place, and ended up doubling it. 

There's also the fact that most countries who tried wealth taxes abandoned them, and those that have them generally have them at far lower amounts than what Warren proposes.

Edited by Ran

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11 hours ago, Free Northman Reborn said:

How does the plan propose to aggressively reduce billionaires fortunes without forcing them to sell their controlling shares in the companies they created? If you need to pay tens of billions of dollars in taxes over a handful of years, the only way to generate the cash to do that is to sell off your shares. Meaning you lose control of your company.

Seems unworkable.

That seems like a feature, not a bug.

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11 hours ago, Free Northman Reborn said:

Well, it seems like the Warren-Sanders billionaire tax will kill the Mars dream, since Elon Musk’s fortune is pretty much the only chance of making mankind a multi planetary species in our lifetime.

But I realise most of you couldn’t give two shits about such achievements compared to upping social welfare or getting another student to pay less for a degree in media or gender studies.

Getting to Mars would be very cool. I would be very excited to see it happen.

1. That goal does not specifically require Elon Musk. Even if it does (somehow) specifically require Elon Musk, it does not require Elon Musk to personally be a billionaire.

2. Assuming that you either have a choice of exploring space or upping social welfare (a binary premise I reject), then yes, we should increase social welfare first. Getting to Mars would be very cool, but mass reduction of suffering is more important. To reitirate though, I reject the idea that we can't do both.

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You know, as surprised as I am about it turning out that it is actually possible for a private company to do space stuff, we should still remember "corporation has control in space" is literally the premise of thousands of dystopian stories. Much like how finding out that the DoD is making a AI with control over weapons my thoughts would be 1/10 "oh cool" and 9/10 "oh shit terminators".

So yeah, regardless of Musks surprising success, space travel, mars colonies, etc should really be more a government thing. Because Mars colony brought to you by SpaceX is just a little to close to Spacer's Choice for my tastes.

If Musks fortune is actually our only chance of becoming multi planetary in our lifetimes (I don't think it is) than maybe we should wait on that.

Edited by TrueMetis

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As a matter of interest, how many of the current billionaires (or the "1%") are indeed the original founder / innovator / original job provider / original economy saviour (type A for ease of reference)? and how many are simply finance people like hedge fund and investment types (type B etc)?

 

I appreciate the argument that a comparatively punitive taxation of the 1% (but specifically of the economic saviours) will (or at least may) impact on the economy (some spurious arguments here about layoffs and reduced R&D) but I don't buy into it.

 

So my question to Free Northman Reborn (and possible Ran): do you feel the same love for hedge fund guys and investment types like the senior management at Goldman Sacks (who got a free ride out of the 2008 crash) that you appear to have for Gates and Musk et al?

I have yet to read or see convincing evidence that the type B set have positively influenced the economy and have merely manipulated and benefitted from it at the severe expense of the bulk of humanity.

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12 hours ago, Free Northman Reborn said:

Well, it seems like the Warren-Sanders billionaire tax will kill the Mars dream, since Elon Musk’s fortune is pretty much the only chance of making mankind a multi planetary species in our lifetime.

But I realise most of you couldn’t give two shits about such achievements compared to upping social welfare or getting another student to pay less for a degree in media or gender studies.

12 hours ago, Free Northman Reborn said:

How does the plan propose to aggressively reduce billionaires fortunes without forcing them to sell their controlling shares in the companies they created? If you need to pay tens of billions of dollars in taxes over a handful of years, the only way to generate the cash to do that is to sell off your shares. Meaning you lose control of your company.

Seems unworkable.

Thanks for this, some of the best comedy I've read in a long time.

Overall I think a wealth tax is kind of a juvenile, thoughtless, and most importantly ultimately insufficient solution, but acting like billionaires will be restricted in their business practices or control of their companies is patently naive.  That's not what has happened when the wealthy are taxed more.  They find a way around it -- most have already found a way around it.  Like, seriously, how many stories on corporations avoiding paying any income tax do you have to read?  I suppose it's harder to game the system with personal income tax, but let me get out the proverbial tiniest violin for billionaires.

10 hours ago, Mudguard said:

Yeah, I don't see the problem with Bloomberg running in the Democratic primary.  If anything, it probably would lessen Biden's chances at winning the nomination and improve Warren and Sanders chances.  I don't think Bloomberg has a realistic chance at winning the nomination, but who knows.  Need to see some new polling data.

That said, if he runs third party, I would have a big problem with that.  

I don't need to see any polling data.  Bloomberg has zero chance of winning the Democratic nomination.  Still hoping this is just him wanting attention.  Howard Wolfson is his main political advisor, and that guy is a major league piece of shit.  So..that kinda worries me.  Those types of people tend to fuck things up.

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2 hours ago, Ran said:

There's also the fact that most countries who tried wealth taxes abandoned them, and those that have them generally have them at far lower amounts than what Warren proposes.

With all due respect this is not an argument.

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Just now, Rippounet said:

With all due respect this is not an argument.

How is it not an argument to note that multiple efforts to tax net wealth proved ineffective or counter-productive? You can't wave your hand at a bunch of theoretical numbers without acknowledging that we have real world data to work with to understand the pluses and minuses of a policy.

It can't all just be thought experiments and wishful thinking.

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2 minutes ago, Ran said:

You can't wave your hand at a bunch of theoretical numbers without acknowledging that we have real world data to work with to understand the pluses and minuses of a policy.

Please cite specifics.  Not trying to be a dick, just not exactly sure what you're referring to.

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2 minutes ago, Ran said:

How is it not an argument to note that multiple efforts to tax net wealth proved ineffective or counter-productive?

The fact that countries abandoned wealth taxes is not in and of itself an argument that they were ineffective or counter-productive, without digging into why they were abandoned.

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31 minutes ago, TrueMetis said:

You know, as surprised as I am about it turning out that it is actually possible for a private company to do space stuff, we should still remember "corporation has control in space" is literally the premise of thousands of dystopian stories. Much like how finding out that the DoD is making a AI with control over weapons my thoughts would be 1/10 "oh cool" and 9/10 "oh shit terminators".

So yeah, regardless of Musks surprising success, space travel, mars colonies, etc should really be more a government thing. Because Mars colony brought to you by SpaceX is just a little to close to Spacer's Choice for my tastes.

If Musks fortune is actually our only change of becoming multi planetary in our lifetimes (I don't think it is) than maybe we should wait on that.

Government’s abandon exploration efforts.  See, the Apollo program.  Individuals have dreams.  Elected governments move on when the public gets bored.  
 

I have always thought we needed Private enterprise to get to space and stay there.

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Just now, Ran said:

How is it not an argument to note that multiple efforts to tax net wealth proved ineffective or counter-productive?

That's a different sentence. Because now I can ask you to prove that the wealth taxes were in fact "ineffective or counter-productive".

There's been tons of debates, discussions, and analyses about this since Macron's -partial- abolition of the French wealth tax and I still haven't seen an authoritative study demonstrating that wealth taxes are "ineffective or counter-productive."
OTOH I've read many articles by eminent economists (Piketty again, of course, but he was far from being the only one) saying that it was a purely ideological measure with very real adverse consequences (like the state losing 3 billion € a year in revenue), and that considering the growing inequalities (and the worsening of France's GINI coefficient) the very opposite of what should have been done.

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