Comment by arthurofbabylon | Hacker News Reader

Comment by arthurofbabylon | Hacker News Reader

arthurofbabylon

This is so simplistic. Favorably simplistic.

Think about it this way, in a very similar, live example:

It is common practice to pay a fee of 0.5-2% to a wealth manager. In practice for many people this fee is worthwhile and wonderful - the benefit is a safely managed and vigorously growing pool of assets.

Is a wealth tax as described by the author really so different? In one case you pay a fee to the manager, in the other case you pay the fee to a more abstract/distant manager (the social system). In both cases, that small fee (small if everyone is generally competent and the wealth grows) is what empowers further growth.

No sane, logical person complains about paying $0.20 when in return they get an extra $0.30 back. In this case, I suspect the author is trying to justify receiving that hypothetical $0.30 without having contributed their initial $0.20. Embarrassingly simplistic, selfish, and self-centered.

Reading that blog post, I’m reminded of the occasional, deluded person who believes that they alone are responsible for their successes and good fortune. In reality, all successes are collective accomplishments. This is a fundamental fact about human life.

> It is common practice to pay a fee of 0.5-2% to a wealth manager. In practice for many people this fee is worthwhile and wonderful - the benefit is a safely managed and vigorously growing pool of assets.

You pay that fee because the manager supposedly does something that helps your wealth grow faster than their fee.

When Vanguard comes along and shows you can get the same or even better returns with a 0.04% fee instead of a 2% fee, what happens? People take their money and move to where the lower fee is. Why would it be any different for a wealth tax?

Because society helps you grow your wealth faster. Better trained workers, happy and healthy workers, a functional medical system.

These are things that help your business create more wealth. As the grandfather comment said, it's wanting the 30c bonus without paying the 20c fee.

Society may make wealth in general grow faster, there is no guarantee that it will help your specific wealth grow faster. You pay a wealth manager because they manage your wealth, specifically. They examine what opportunities are suitable for you based on your goals and risk profile and seek those out. "Society" doesn't do anything like that.

Let alone the fact that you are already paying taxes: income taxes, property taxes, sales taxes, payroll taxes, etc. etc. to pay for all of the benefits that society provides. If the wealth tax is going to replace some of those, then sure maybe we can talk about whether it's more efficient or effective than any of those. If we're just going to keep piling on tax after tax "because society" maybe we should ask if society needs to get its act together and use the tax revenue it already gets more efficiently.

1) Your reasoning, even if potentially valid (I don't think it is) is incredibly selfish and leads to the exact scenario of rising inequality that we have today.

2) Social benefits accrue to everyone, including wealthy people. They just accrue equally to everyone rather than unequally to your specific wealth. That's an important distinction here because you're basically saying you should get favoritism for your wealth because you happen to have more of it. That's a bit of a weird stance.

3) In case it's not clear, the US doesn't currently collect enough tax revenue to actually pay for a well-functioning society. Take a look at [1]. If you want a first-world society on par with Denmark or Sweden, guess what...

[1] https://www1.compareyourcountry.org/tax-revenues

> Social benefits accrue to everyone, including wealthy people. They just accrue equally to everyone rather than unequally to your specific wealth. That's an important distinction here because you're basically saying you should get favoritism for your wealth because you happen to have more of it. That's a bit of a weird stance.

I'm not arguing for any kind of favoritism. You're saying we should welcome a wealth tax as a kind of management fee. I'm only pointing out that that is not the case. The government does not have any responsibility to act in your specific interest the way a wealth manager does. It is a false equivalence.

> In case it's not clear, the US doesn't currently collect enough tax revenue to actually pay for a well-functioning society. Take a look at [1]. If you want a first-world society on par with Denmark or Sweden, guess what...

Your chart shows taxation as a percentage of GDP. There are two ways that your tax revenue might be a low percentage of GDP, one is low taxes, the other is high GDP. The US also has a much higher GDP than any of these countries.

Are you arguing that the amount of money needed to "pay for a well-functioning society" is proportional to the GDP? That if our society produces lots of valuable goods and services then this means that it needs to spend more government money? Intuitively I would think the opposite would be true. A high GDP means a lot of people are producing valuable things, which should mean they need less assistance from the government.

Wait, what? You say you're not arguing for favoritism, and then you say that it's a false equivalence because the government doesn't have a responsibility to act in your specific interest. Acting in your specific interest is favoritism. You're not being consistent here.

I see what you're thinking on GDP, but the things a wealth tax would go to fund (and does go to fund where it exists today) are percentage of GDP services. Things like healthcare, education, and a social safety net. These services naturally rise in cost in accordance with GDP because standard of living is supposed to rise with GDP per capita as well. This is why topics like healthcare cost are just about always framed in per capita or % of GDP terms. It's just that in the US our inequality distorts things considerably. You're also implicitly conflating averages with medians. It is 100% possible that a high GDP reflects that monetary value is being produced by a small portion of the population (possibly by exploiting workers), while the rest of the population needs more government assistance. There's a strong case that the US embodies this situation more and more over time.

Yes, it's a false equivalence. That does not imply that the two things should be equivalent. Nowhere did I state that they should be equivalent. I'm just saying they're not. So your argument that "a wealth tax is good because it's the same thing as a management fee" is not valid, because the premise is false. A wealth tax is not the same thing as management fee. That doesn't mean that they should be the same thing. It means you cannot draw conclusions based on them being the same thing, because they are not.

> Things like healthcare, education, and a social safety net. These services naturally rise in cost in accordance with GDP because standard of living is supposed to rise with GDP per capita as well.

They don't have to. A more efficient and advanced economy should produce basic necessities with less effort and therefore less cost than less productive economies. The costs of things like healthcare and education in the US are vastly distorted for a number of reasons.

I don't think siphoning off wealth from productive areas of the economy and pushing into areas that are already overpriced is going to help. Education, for example, already receives massive Federal subsidies via guaranteed loans. That hasn't made it less expensive. It's made it more expensive as college raise prices to match the amount of capital available to pay them.

> Your reasoning is incredibly selfish

Capitalism is selfish. Human is selfish. There's nothing inherently wrong with that. Stop moral highgrounding.

1) so what? The point is that this creates an incentive for capital flight, no amount of moral nagging will prevent that.

2) That’s very debatable. Most benefits nowadays go to The middle classes to the detriment of lower classes.

3) Are you aware that Sweden had a wealth tax? It was a bad idea, it was repealed.

I can easily fire my asset manager, or switch to a plethora of low cost options, or manage my capital myself. How exactly will I have those options with the wealth tax if you like you said, I’m not getting that rate of return justifying the tax?

If you're a citizen of a country, you automatically get all of the benefits that come with it: personal safety, transportation networks, infrastructure, etc.—all things that enable your business to be successful. Since you can't opt out of these benefits (without leaving the country), it makes sense that you shouldn't be able to opt out of their cost.

You won't. Sorry, but people shouldn't be able to just fire their entire society as they would a wealth manager.

On second thought, I suppose you could vote or otherwise participate in politics.

But let me guess, it’d be immoral for parent commenter to use their wealth to participate in politics?

Thinking more about this and taking the wealth manager analogy deeper...

In the case of a wealth tax, I imagine wealthy, powerful people would play a more active role in ensuring the competence of their elected officials. They'd like that tax they're paying to go a long, long way, much as clients expect their fees to a wealth manager to facilitate the best possible work.

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