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What taxes a billionaire?


dimreepr
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11 minutes ago, StringJunky said:

I thought I'd not sent this post and deleted it. Wasn't sure if it contributed anything meaningful... but anyway. It does not make logical sense that shareholder-run businesses will have much sense of fairness... after all, they are only there at the top because the shareholders see competitive returns on their investment. Sole owner-businesses are more likely to be more principled because they hold all the reins and can unilaterally make altruistic decisions. That can go the other way, of course, with a business run by a tyrant, but there's no chance witrh disconnected, self-interested shareholders staring at a computer screen, looking at bottom lines.

This lays it out bare, the attitude, I think. I'm sure he's not unique amongst the uber-wealthy here:

 

 

I am not sure whether morality or altruism plays comes into play as such. The financial system is set up a certain way and the players, regardless of individual moral standards need to work within this system to be successful. Assuming that the system punishes altruistic behaviour, a moral player would either need to underperform, squash their moral qualms or quite the game altogether.

I.e. if we want to change the outcome I think it makes little sense to couple it to actions of the individuals as such (including CEOs) but rather the system has to see changes.

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3 minutes ago, CharonY said:

I am not sure whether morality or altruism plays comes into play as such. The financial system is set up a certain way and the players, regardless of individual moral standards need to work within this system to be successful. Assuming that the system punishes altruistic behaviour, a moral player would either need to underperform, squash their moral qualms or quite the game altogether.

I.e. if we want to change the outcome I think it makes little sense to couple it to actions of the individuals as such (including CEOs) but rather the system has to see changes.

Bezos has laid down the gauntlet... He's just a prominent example and very clear in what he thinks and is probably representative of companies of that size. Basically, that is what the revenue authorities are up against.

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2 hours ago, CharonY said:

With regards to UBI, there are a lot of different flavours, but I think research is still ongoing which variant (e.g. negative income tax, vs income-independent benefits) might benefit low-income more. 

Any and all. Really: every attempt to alleviate poverty improves the community where it's implemented. However, most of the the pilot projects have been small scale, temporary and insecure as to continuous funding. In order to make the kind of difference that matters, UBI needs to be a right, not a handout, and it needs to raise the whole population to the same minimum standard, rather than given to a lucky few selected on some irrational basis. That way, there is no jealousy and resentment; no unfair treatment of groups or individuals. 

And of course, a universal basic income is way far cheaper and simpler and less error- and fraud-prone to administer than a hodge-podge of social assistance programs. Don't worry about the civil servants who would be made redundant: there are plenty of understaffed social services to bulk up. 

2 hours ago, CharonY said:

Assuming that the system punishes altruistic behaviour, a moral player would either need to underperform, squash their moral qualms or quite the game altogether.

Not necessarily. Some corporate boards are waking up to the fact that social responsibility is also sound business practice. As well as the lavish philanthropy in which some  of the ultra-rich indulge, there is a movement toward co-operation and fair dealing with their employees and neighbours.

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2 hours ago, Peterkin said:

 

Not necessarily. Some corporate boards are waking up to the fact that social responsibility is also sound business practice. As well as the lavish philanthropy in which some  of the ultra-rich indulge, there is a movement toward co-operation and fair dealing with their employees and neighbours.

...and many more find that creating the illusion of it instead...is better for the bottom line

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That's also true. I didn't say it was a majority of corporations that see the need for change. But some are beginning to. (I've been reading a book.) Capitalism on the 20th century predatory and profligate model is obviously unsustainable, just like the world it feeds on. Some top executives and shareholders are smart enough to see that and take steps toward 21st century self-preservation. The author , who seems to know whereof he writes, doesn't give them terrific odds of succeeding: about 12% probability, as compared to 60+% of catastrophic collapse or decline and fall.

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19 hours ago, Peterkin said:

Ah well. Nothing is foolproof.

(....So, these two super-yachts collide in mid-ocean, bikini girls and exotic pets treading water all around them, and the owners send their confidential secretaries out in two dinghies to exchange gold-edged business cards from their respective high profile law firms....) 

What's ironic? Crime has always paid handsomely, as long as it was done on a large scale.

 

The irony is, they did it legally.

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 I’d have said “the” greatest banking fraud, but of course his crimes were chump change relative to the banking scams that led to the 2008 financial collapse.

Society/people both blame's the poor and feeds off them, billionaire's are people too; if we want them to change, we all have to change.

When gambling was illegal, no-one was forced to say "gamble responsibly" and society didn't have to pay for a clinic. 

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20 hours ago, dimreepr said:

Society/people both blame's the poor and feeds off them, billionaire's are people too; if we want them to change, we all have to change.

When gambling was illegal, no-one was forced to say "gamble responsibly" and society didn't have to pay for a clinic. 

Many people, maybe the majority are inherently selfish. The natural instinct for survival evolves into greed and/or gluttony, for some more so than others. 

Couple this with a "free" society and there you go. 

The rich oppressing the poor is nothing new though, probably dates all the way back to very ancient times. Probably got worse when monetary systems were introduced over goods trading. All of a sudden it became easier to gain wealth unfairly, illegally...

The rich get richer and the poor get poorer, not much has changed really. 

The question is, how can it be changed?   

Edited by Intoscience
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4 hours ago, Intoscience said:

The question is, how can it be changed? 

I'm not sure it can be, we've lost the ultimate sanction, god/karma etc.

There's no boogeyman to intervene/explain/blame, so we're left with a moral compass that point's to the most convenient excuse to stop thinking about it.

Billionaire's are bad, mkay.

All I do know is, if we all don't try we'll never find out; sometimes it's important to preach, pass it on...

The parable of the madman - Nietzsche

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6 hours ago, Intoscience said:

Many people, maybe the majority are inherently selfish. The natural instinct for survival evolves into greed and/or gluttony, for some more so than others. 

It's far more complicated than that. People, with very few exceptions, are both selfish and altruistic, competitive and co-operative, individualistic and social. These traits, as well as several others, occur naturally in +/-99% of humans; in 80%, they occur in a relatively narrow range of proportions.  How each of those traits, and more importantly, the expression of those traits develops in a growing child depends largely on their environment. What traits and behaviours are valued by the authority figures and role models in the child's private life? What attributes are rewarded and which ones are punished by the child's culture? He will act in what he perceives in his own interest - to win rewards and avoid punishments. His own interest includes the seeking of approval, esteem and love from other people, as well as material gain, status and liberty. How he balances those two sets of needs depends on his self-concept,  which is formed through social contacts, beginning with the primary care-giver.  

8 hours ago, Intoscience said:

The rich oppressing the poor is nothing new though, probably dates all the way back to very ancient times. Probably got worse when monetary systems were introduced over goods trading. All of a sudden it became easier to gain wealth unfairly, illegally...

Also legally, since they're the ones making the law.

Greed and gluttony are instinctive behaviours rooted in scarcity. Even though we have no need to fight over water, food and shelter in modern developed nations, we nevertheless continue to institutionalize scarcity : Civilization, which was built as a buttress against scarcity and competition for scarce resources from other human tribes, created a whole new form of scarcity. Human society was rigidly stratified, which arrangement funnels wealth and power upward - invariably, in all kinds of governance and in all ideologies. This leaves a wealth-vacuum at the bottom of the pyramid, and solidifies all those agencies, institutions, laws and traditions that preserve the dominance of elites.  And foster the perception of scarcity by artificial means : coupling access to necessities with ownership of money, constraint of reproductive freedom, income insecurity, and the ubiquitous divisions and group rivalries fomented by interested parties keep people at and near the bottom of the social pyramid in a constant state of anxiety, which prompts them to get whatever they can whenever they can, before the opportunity is snatched away. Ironically, it also keep the people at the top in a constant of anxiety for their own security, which prompts them to take repressive measures against the bottom, which causes more anxiety and resentment, which....  

8 hours ago, Intoscience said:

The question is, how can it be changed? 

Through the same methods that created the situation in the first place. The elites need to wake up to the unsustainability of their current methods and call forth their social intelligence. It's already happening - though far too slowly compared to the external changes that are happening much too fast.

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21 hours ago, Peterkin said:

Through the same methods that created the situation in the first place. The elites need to wake up to the unsustainability of their current methods and call forth their social intelligence. It's already happening - though far too slowly compared to the external changes that are happening much too fast.

"Take the moral responsibility out of my hand's" - Jimmy Car/Jeff Bezos, while true, is a childish response to why not; how often do our children embarrass us with the simple question "why?"...

Why does this political pendulum travel in this direction?

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3 hours ago, dimreepr said:

Why does this political pendulum travel in this direction?

That's too big and open a line of inquiry for this venue. If you wish to explore it, you might more effectively do so by breaking the question down to smaller, more accessible components. 

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18 hours ago, Peterkin said:

That's too big and open a line of inquiry for this venue. If you wish to explore it, you might more effectively do so by breaking the question down to smaller, more accessible components. 

I think the pendulum swing's according to the demographics of society.

For instance, the older we get the more Conservative we tend to become (IMHO amonst others). 

At some point that imbalance will inevitably correct itself, and the swing is reversed.

A billionaire is no different, they milk the magic dragon until it has no choice but to bite.

It's not too big, it's fundamental.

 

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On 9/19/2021 at 6:09 PM, iNow said:

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. 

 

 

Great post! 

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4 minutes ago, iNow said:

Thx

Apparently, the uber-wealthy leave their investments where they are and borrow the money because the borrowing rate is much cheaper than cashing in and paying federal/state taxes. I think there needs to be a annual review on unrealised assets that can be easily turned to cash, and subjected to federal scrutiny. It's a work-in-progress internationally, it seems.

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10 minutes ago, StringJunky said:

Apparently, the uber-wealthy leave their investments where they are and borrow the money because the borrowing rate is much cheaper than cashing in and paying federal/state taxes.

That’s a good point. The Fed will be raising rates next year so this will likely change ever so slightly, but I suspect not enough to notice any measurable difference. 

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39 minutes ago, iNow said:

That’s a good point. The Fed will be raising rates next year so this will likely change ever so slightly, but I suspect not enough to notice any measurable difference. 

The solution is global consensus on the issue and harmonizing rates, then no one can jump their responsibility. This is actually ongoing, as you probably know.

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2 hours ago, StringJunky said:

The solution is global consensus on the issue and harmonizing rates

Former Fed chair and current Secretary of the Treasury in Biden’s administration, Janet Yellen, is advocating for exactly that that. It would definitely help

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On 9/30/2021 at 6:54 PM, StringJunky said:

The solution is global consensus on the issue and harmonizing rates, then no one can jump their responsibility. This is actually ongoing, as you probably know.

Looks like we can expect an announcement tomorrow. OECD countries agree on 15% floor


https://www.nytimes.com/2021/10/07/us/politics/global-minimum-tax.html

The most sweeping overhaul of the international tax system in a century is poised to take a significant step forward this week, with nearly 140 countries, including Ireland and Estonia, expected to settle on a 15 percent global minimum tax rate.

Negotiators were on the brink of agreeing to the rate on Thursday, ahead of a Friday meeting at the Organization for Economic Cooperation and Development, which has been coordinating the global tax talks. The tax rate has been the subject of months of intense negotiations. If enacted, it could help end a decades-long race to the bottom on corporate taxation that has allowed tax havens to flourish and has drained countries of revenue.

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1 hour ago, iNow said:

Looks like we can expect an announcement tomorrow. OECD countries agree on 15% floor


https://www.nytimes.com/2021/10/07/us/politics/global-minimum-tax.html

 

 

Good. I hope it comes to something. Another thing they do is buy all shares in the shell company of someone that owns a superyacht, say, then they own the yacht and don't have to pay tax on the sale because it's not realized for tax purposes.

Edited by StringJunky
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