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What taxes a billionaire?


dimreepr
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2 hours ago, dimreepr said:

I don't think you're a troll, I think you're very smart; I'm just asking...

The blatant obfuscation and ambiguity in your posts points the troll detector in your direction.

Those who wish to imply ethical failings in others have an obligation to be specifc and not adopt the pseudo-angst of an offended teen.

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3 hours ago, zapatos said:

I talked about jobs involved in creating a yacht. You talked about an economic theory involving taxes.

If I may stick an oar in the water... I am guessing the distinction is being made between relatively rare luxury items and mass-produced items.   Say that I,  Joseph Moneybags,  invest in a yacht,  a small number of people are employed for a short time, and then an even smaller group crews it,  when I take outings.   However,  if I invest in affordable housing units,  a much vaster ripple can pass through the working class,  as these units are built, maintained,  repaired,  and also many people can become housing secure and start to build what economists call "generational equity. "  It's a vast,  complex topic,  so I'm necessarily simplifying and leaving things out.  

It's really the contrast between putting wealth into personal status and pleasure,  and putting it directly into a better community.  No reason one can't do both,  but those who focus their wealth on enriching the community tend to,  IMO,  find more enduring satisfactions and value to their lives.   So,  l'm saying we should tax someone's yacht more than we tax their 60-unit affordable housing complex.   IOW,  incentivize social goods,  and not personal luxury.

   

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45 minutes ago, TheVat said:

Say that I,  Joseph Moneybags,  invest in a yacht,  a small number of people are employed for a short time, and then an even smaller group crews it,  when I take outings.   However,  if I invest in affordable housing units,  a much vaster ripple can pass through the working class,  as these units are built, maintained,  repaired...

It takes 3-4 years to design and build a yacht. That's a lot of workers for a lot of time. Unlike your house, with a super yacht comes a crew of 15-20 people earning a salary. In addition the working class must build, maintain and repair these yachts.

There is no question that some investments support the working class more than yachts, just like there are some investments that support the working class more than affordable housing. If that is what Sensei meant, then that is what he should have said.

It is simply an overreach to say that "If a billionaire spends money on luxury items, the money barely reaches the bottom of the economic food chain". The billionaire does not have lowly millionaires building the furniture, maintaining the engines, mopping the floors, or fixing the plumbing.

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I like that explanation! It's one I never thought of - or even about - but will consider now.

Re the yacht and trickle down, I was on a slightly divergent track. A luxury item accounts for a very, very small niche in the making and marketing of consumer goods.

It's true that low-paid workers are employed in the extraction of resources, the generation of energy and the manufacture of materials and components. The key point being that there are many such workers, and they each turn out a generic product in vast quantity. Only a minuscule portion of the ticket price on that yacht reach one. Their respective employers, selling the product on to other users, makes a profit and receives a tiny portion of the eventual yacht. By the time these components work their way into the final product and the salesman collects his commission and bonus, the boat will have paid variously large and small portions of skilled workers, professionals and specialists' salaries and five or six tiers of profit to the investors in all of those companies. The unskilled worker at the bottom of the pyramid would be paid the same hourly wage if yachts were omitted from the final inventory.

Maintenance and repair, crews and servants do account a few more jobs - much like hotel, cruise and vacation resort jobs;  a very small portion of the work-force, changing the fortunes of nobody.  Where there is a quite comfortable living to be made is in the specialized trades - furnishings and upholstery, decorating and engine repair, sail-making and hull patching. And the very, very rare profession of marine architect.  But it makes no noticeable dent in the bottom three tiers of wage-earners, thus: It barely reaches the bottom of the economic food-chain.

Edited by Peterkin
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It’s not the couple of million spent on the yacht. It’s the many more millions not spent on anything at all. In the hands of the lower echelons of the economy, that money gets spent. Tax from that money gets spent. 

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5 minutes ago, swansont said:

It’s not the couple of million spent on the yacht. It’s the many more millions not spent on anything at all. In the hands of the lower echelons of the economy, that money gets spent. Tax from that money gets spent. 

You mean money abstracted away into shelters, safe from taxation and out of the economy? Or money tied up in non-productive investments and thus written off or deferred? Both are significant amounts.

I think what @Sensei was addressing with the yacht example is the trickle-down, tax cuts for the rich floats-all-boats economic theory, rather than the allocation of funds in general.

Indeed, buying anything, even obscenely overpriced pictures, shiny pebbles, bottles of wine or, yes, scary trips to nowhere puts something back into the economy and something into the pockets of working people.  At a cost, though, which may be out of proportion to the contribution being made. It's hard to measure the collateral damage from luxury spending, or trace exactly who gets stuck with all the bills and cleanup.

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13 minutes ago, Peterkin said:

You mean money abstracted away into shelters, safe from taxation and out of the economy? Or money tied up in non-productive investments and thus written off or deferred? Both are significant amounts.

Both

Quote

think what @Sensei was addressing with the yacht example is the trickle-down, tax cuts for the rich floats-all-boats economic theory, rather than the allocation of funds in general.

Indeed, buying anything, even obscenely overpriced pictures, shiny pebbles, bottles of wine or, yes, scary trips to nowhere puts something back into the economy and something into the pockets of working people.  At a cost, though, which may be out of proportion to the contribution being made. It's hard to measure the collateral damage from luxury spending, or trace exactly who gets stuck with all the bills and cleanup.

We have ample evidence that trickle-down doesn’t work, because only a fraction of the money trickles down. And ramping up taxes on the rich isn’t going to stop them buying their shiny pebbles, etc.

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19 minutes ago, Peterkin said:

It's hard to measure the collateral damage from luxury spending, or trace exactly who gets stuck with all the bills and cleanup.

It's a boat. Made by people who make boats. Luxury spending is not some dark-net side of the economy that operates outside the bounds of regulation and the law. These yachts aren't made for Dr. Evil.

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19 minutes ago, zapatos said:

It's a boat. Made by people who make boats. Luxury spending is not some dark-net side of the economy that operates outside the bounds of regulation and the law. These yachts aren't made for Dr. Evil.

One of them is a boat, yes. What's it made of? Where did the wood come from? What animals used to live in that copse of trees? Where did the paint and fabric and all the other luxury furnishings come from? Who made them for what wages in what conditions. I didn't say making it was evil; I said it's hard to trace the collateral damage - in terms of waste, byproducts, land use, ecology, social organization, habitat, human health, etc. - of luxury spending. While the collateral damage from the trade in precious stones, furs, ivory, hand-crafted automobiles, luxury foods and potables, timepieces, fabrics, as well as exotic entertainments, accommodations and travel are all different from yachts in particular; some are more benign than others, but they each do have an ecological footprint as well as a social impact.   

How much of it is inside or outside what country's laws is a separate question - I was only considering the taxation issue. Do kidneys count as luxury items? I imagine cocaine is outside the law, most places, at least for not-rich people. 

Edited by Peterkin
forgot the last bit
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Trickle down works. It just doesn't work as sufficiently or as effectively as it should. That's why I'm in favour of a UBI (Universal Basic Income) element as well...that leads toward trickle up. 

Tax billionaires? Tax their revenues, not the profits which they hide...or displace to lower taxed locations. Yes, that can raises prices as effectively a regressive tax on the poor paying for those goods and services...so balance it off with the right UBI.

Also +1 to Dim for the thread.

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I think several are homing in on the idea that money does best when it circulates.   The very wealthy often convert money into inert formats,  like mansions that sit empty most of the year.   The working class get money and they spend it, driving demand-side economics.   If they have UBI type backup,  that money goes right back into the economy.   You can't stimulate production unless people want and can pay for whatever is produced.   (leaving aside the question of why we have to have so.  much.  stuff.)   The nitty gritty is that taxing the rich improves the flow of money.

https://www.washingtonpost.com/business/2020/12/23/tax-cuts-rich-trickle-down/

 

Quote

But, just as many economists predicted, slashing individual, corporate and estate tax rates was mostly a windfall for big corporations and wealthy Americans. The Tax Cuts and Jobs Act did not pay for itself, failed to stimulate long-term growth and did not lead to sustained business investments.

According to one of the most comprehensive studies to date on tax cuts for the rich, this should come as no surprise. A London School of Economics report by David Hope and Julian Limberg examined five decades of tax cuts in 18 wealthy nations and found they consistently benefited the wealthy but had no meaningful effect on unemployment or economic growth.

 

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56 minutes ago, Peterkin said:

What's it made of? Where did the wood come from? What animals used to live in that copse of trees? Where did the paint and fabric and all the other luxury furnishings come from? Who made them for what wages in what conditions.

The same as was done for every other fucking boat. What is it with you and rich people?!?! Did some rich kid make you pee your pants when you were a kid?

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The mobility of a billionaire's money is also more mobile than yours or mine...leading to countries/states/provinces competing for it for investments with tax shelters or incentives.

I'm all for free enterprise, but capitalism is a two edged sword.

12 minutes ago, zapatos said:

The same as was done for every other fucking boat. What is it with you and rich people?!?! Did some rich kid make you pee your pants when you were a kid?

Didn't realize a dugout had the same environmental or socio-economic impact as billionaire's yachts...

Edited by J.C.MacSwell
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@zapatos

Lot of people out there with soiled pants courtesy of the rich.  I had friends in Oregon who watched their surrounding forest destroyed by rich people who wanted to raise some fast capital to start up some entirely unrelated business venture.  Fuck stewardship, we need a quick buck,  sell the raw logs to Japan.   

Or... Reviewing the events of 2007-08 may be illuminating.   "The Big Short" is a handy primer,  too,  on the rich playing fun games with money and ruining people's lives.   

Two edged sword indeed.    

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21 minutes ago, J.C.MacSwell said:

Didn't realize a dugout had the same environmental or socio-economic impact as billionaire's yachts...

Didn't realize you were still trolling me with straw-men.

16 minutes ago, TheVat said:

Lot of people out there with soiled pants courtesy of the rich. 

Lot of people out there with soiled pants courtesy of the working class. 

 If we denigrated brown people as a whole like the rich are being disparaged as a group everyone here would be screaming foul. It seems to be okay to lump some groups together but not others.

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41 minutes ago, zapatos said:

The same as was done for every other fucking boat.

Really? Good to know. Can you address the provenance of the other luxury items I listed with equal clarity and dispassion? I mean the economic and social effects, rather than the condition of anyone's underwear.

 

Edited by Peterkin
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4 minutes ago, zapatos said:

Didn't realize you were still trolling me with straw-men.

Okay Zap. The point was that it's not all the same. There are more and less ethical ways to spend your money. Ideally a tax system can reflect that, and capture it efficiently.

Practically...it's much more difficult.

1 minute ago, beecee said:

Damn!!! I forgot the funny face!!  here 😉🙂

No, I meant literally trolling...

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5 minutes ago, Peterkin said:

Really? Good to know. Can you address the provenance of the other luxury items I listed with equal clarity and dispassion? I mean the economic and social effects, rather than the condition of anyone's underwear.

 

Can you stop with the innuendo already? If you think wood or plastic or brass on a yacht is different than wood or plastic or brass on a cabin cruiser please provide some evidence. All you do is bitch about the rich without providing any evidence. 

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8 minutes ago, J.C.MacSwell said:

Okay Zap. The point was that it's not all the same. There are more and less ethical ways to spend your money. Ideally a tax system can reflect that, and capture it efficiently.

Yes, there are indeed more and less ethical ways to spend your money. I'm not at all clear why people are so convinced some random rich guy is less ethical than some random working class guy.

Yes, a tax system can reflect that. I'm all for taxing the rich at a higher rate than others.

What I object to is the suggestion (evidence free) is that luxury spending means 'money barely reaches the bottom of the economic food chain', or that rich people have the pervasive idea of "Anything I own this, nobody else can. ", or whatever this hint of evil was implying; "It's hard to measure the collateral damage from luxury spending, or trace exactly who gets stuck with all the bills and cleanup." 

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There are several parallel issues here.

One is that wealth acquired by the ultra wealthy tends to get put into tax shelters and nebulous investments so it grows (but remains outside the system), whereas that same money in the hands of the less fortunate goes IMMEDIATELY into the community around them.

They spend it on groceries and vehicle repairs and school clothes for kids and paying the electricity bill so it’s not dark in their apartment anymore at night and their kids can read. The providers of those goods and services in that community where this money is being spent ALSO spend the money once received for THEIR groceries and THEIR service needs and on THEIR kids. 

Dollar for dollar / unit for unit… the money in the hands of the less fortunate does more net good than money in the hands of the already fortunate. Yes, spending from the wealthy also creates jobs and injects money back into the system, but very little relative to money used in “trickle up” stimulation packages. 

Also, a bit of extra money in the hands of someone who already has a bunch of it doesn’t tend to change their behavior or encourage extra spending. Getting $1,000 tax break when you’re sitting on $50M isn’t going to suddenly result in them finally making a call to a plumber or the purchasing a new dishwasher… but for the person living paycheck to paycheck that money literally changes lives, gets spent and injected back into the system quickly, and results in lasting reductions in poverty and suffering. When you’re living at the margins, every dollar counts.

It also costs a lot to be poor. When the washing machine breaks, you can’t afford a new one but you can afford to pump quarters into the machine at the laundromat… but that ends up being more expensive on net. When the car breaks down, you don’t get to work on time and you get fired. The rich, however, have tax protected ways of growing their wealth and can afford tax attorneys to hide it. Paying more tax has more impact on their ego than on their lived experience.

The anger at the rich is out of hand, though. We need better policies and enforcement mechanisms, not more hate and vitriol directed at those doing better than us. Sadly, the anger is probably in large part intentionally being amplified by the very people on the receiving end. If they can keep everyone mad and focused on the wrong things, then the status quo remains stable and no progress or change gets made.

Like most issues in economics, we make a huge mistake by treating it as a moral failure when at its core it’s a policy failure. Fixing the policy is just super hard because the people with the power to change the laws tend to be the same ones benefiting the most from them… and also because focusing on wonky policy details is hard for a public who’s often just trying to survive through to tomorrow and who’d much prefer throwing stones and being distracted with us/them tribalism. 

Perhaps this thread could try focusing on wonky policy details instead of distractions like yachts and steel boats… or not. 

Edited by iNow
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33 minutes ago, zapatos said:

Yes, there are indeed more and less ethical ways to spend your money. I'm not at all clear why people are so convinced some random rich guy is less ethical than some random working class guy.

Yes, a tax system can reflect that. I'm all for taxing the rich at a higher rate than others.

What I object to is the suggestion (evidence free) is that luxury spending means 'money barely reaches the bottom of the economic food chain', or that rich people have the pervasive idea of "Anything I own this, nobody else can. ", or whatever this hint of evil was implying; "It's hard to measure the collateral damage from luxury spending, or trace exactly who gets stuck with all the bills and cleanup." 

Is it fair to say, generally speaking, that it takes more effort to ethically spend $1,000,000.00 than it does to spend $1,000.00?

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