United Airlines CEO Calls for National Wealth Tax | Hacker News Reader

United Airlines CEO Calls for National Wealth Tax

firstformoney.com

The combination of wealth concentration, inflation, unaffordable education and health care, and the annihilation of entry-level knowledge work due to AI has created a crisis that really needs to be better appreciated by the few people that control most of the world’s capital. The society we live in can only exist if most of us buy into the social contract. If it appears to the overwhelming majority that the social contract no longer applies, then this story won’t end well for anyone, superwealthy included.

I think some figure they will die before any negative consequences hits them. And the hardliners are actively working on changing that social contract, where you will have no choice but to comply, because you will have no power. Many dictatorships still live on, in one form or another, with the elite doing just fine.

it's pretty scary to think that your last bastion of improving your self in this world (your mind) might get taken away too - then we'll essentially have fixed positions where capital owners and their offspring are perpetually the only ones allowed to make money.

> this story won’t end well for anyone, superwealthy included

I think they believe they’ll be fine. And I tend to agree.

In the French Revolution—before private jets and wire transfers—most of the aristocracy escaped. It’s even debated if they increased their wealth share through the chaos. (We can reject that they materially lost it.)

as well as the annihilation of non-cognitive work due to the computer over the last ~40 years

related: Building Pro-Worker AI https://www.nber.org/papers/w34854

We have a wealth tax in parts of Switzerland. It works for normal people like me where you can value my house and bank accounts easily. But it starts to have problems when you're ultra-wealthy and you have to value my artwork - paintings, sculptures, jewelry...

Overall I think it's fine. I think where I live it's .75%. But there's a giant hotel where the fifa executives live and the owner keeps getting in trouble for importing art and undervaluing it.

What if we called it a property tax?

We already have those. We just tax regular folks’ homes and exempt shares, bonds and offshore trusts.

The value of a statistical life is about $14mm [1]. Let’s round that to the nearest $5mm and then have a progressive scale: $15mm 1%, $150mm 2%, $1.5bn 3%, $15bn 4%, $150bn 5%, $1.5tn 6%.

[1] https://www.transportation.gov/office-policy/transportation-...

And we exempt bank accounts, and art, and gold and jewelry, and and and. Property taxes only cover real estate (and, in some states, cars).

When people are talking about a wealth tax, they're talking about taxing all of it, not just what is currently taxed.

We’re in violent agreement. Our current property-tax system only taxes real estate. Instead of marketing a new kind of “wealth” tax, just call it an extension of property tax.

So basically what will happen is what happens now, the ownership will be hidden trough trusts, multiple companies and other schemes.

It's hard to expropriate from (on average) the most active members of society that have build their own businesses and have reaped benefit based on free market economics and are mobile geographically, and not risk averse.

The bigger problem is not the tax, but how it is used. If you have a leaky bucket, no matter how much water you put in, it won't hold.

With all the technologies, the way to improve the society is through more transparency on how the money is spent, breaking over regulated sectors with inherent oligopolies and let the people keep what they earn.

That wealth has been taxed already when the profits were realised and will be taxed again on consumption.

The CEO hasn't build shit, he has been a manager all his life working for a salary and a bonus, so he might not understand the psychology of a person who risks a lot and gets paid voluntary by the value he provides to his customers.

I think it's difficult to tax people on money they've earned and "paid" taxes on. The billionaire tax in CA is a good example. It makes sense that the ultra wealthy would rather move than to pay that tax - for lots of reasons ranging from greed to wanting to decide how their wealth gets used.

It reminds me of student loan forgiveness. It's too hard to retroactively forgive them. It may sound good in theory but it's not fair - i.e. for people who worked 2 jobs while going through college.

The laws for wealth accumulation moving forward need to be reformed and I think we have to accept that we let people run away with massive wealth and it turned out to be not the best thing for society.

Some lessons are learned the hard way.

> it's difficult to tax people on money they've earned and "paid" taxes on

We already have property tax across the country. Sales tax is charged on post-tax spending. Hell, one could argue income is taxed multiple times given the SALT exemption.

Somehow multiple taxation is only an issue for inheritance and the rich.

Multiple taxation is not the problem. It's reforming tax law and charging on things that have already paid taxes.

Imagine tax reform which collects an extra 1% of sales tax for items you have already purchased.

I'm all for reforming tax such that the wealthy cannot dodge them and pay a higher effective tax rate. I just don't know how to get there.

> Multiple taxation is not the problem

This is precisely the difficulty you cited.

> Imagine tax reform which collects an extra 1% of sales tax for items you have already purchased

Literally property tax.

> I just don't know how to get there

Constitutionally authorize a national property tax that can only be increased by both an act of the Congress and affirmation in referendum alongside the next Presidential election. (It’s high time we brought plebiscite into our federal system.)

Politically: use its proceeds to cut taxes for the middle class. Double the income tax brackets. Provide a per-capita citizen’s dividend.

I understand what you're saying. What I was saying is difficult is introducing a new tax that would tax already taxed dollars. It's the "new" part - but I get that most new tax laws will do this.

So I probably agree with you.

> What I was saying is difficult is introducing a new tax that would tax already taxed dollars

But that’s empirically untrue. Every sales tax is precisely this. Every property-tax increase, too. They’re unpopular, as are all tax increases. But I don’t think they’re more difficult than raising first-pass income taxes.

I see I aligned myself well when I joined the Star Alliance.

I had a professor give me sage advice when I enrolled in my PhD program: one hotel chain, one airline program, and hoard those points for your honeymoon... or your elopement.

(Fuck a big wedding... I wanna make a call from one of those fancy plane phones to announce sitting hand in hand we're not coming back for a very long time.)

Good. There's plenty of precedent for us peons - property taxes are a wealth tax. Generational wealth at the scale we see today is fundamentally incompatible with democratic principles. Billionaires are a policy failure.

People did vote for their property taxes to go up when they voted for republicans to cut taxes on billionaires. The republicans did not stop wars, foreign spending, or wasteful spending, they stopped domestic spending on things regular people needed.

Property taxes automatically goes up to cover the missing federal dollars, that is why property taxes are skyrocketing. Republicans cut federal income taxes and made it easier for CEOs to earn unlimited tax free money.

Property taxes have to pay for everything local that back in the 1950s was all taxpayer funded federally because we had a 90% federal income tax bracket and post-1929 financial regulations. Stock buybacks were illegal and CEOs could not pay themselves in stock and bubble the stock price to enrich themselves. When rich people shift money out of pockets of people who pay taxes to their own pockets where they pay no taxes, they defund the entire tax base and property taxes skyrocket. GDP is still at record highs and companies are posting record profits, but CEOs can run these companies so they and their insiders take all the money.

All the protections have been gutted by the republican party. We are back to the late 20s entering a new great depression. Removing the policies that ended the great depression is how you create a new great depression.

> People did vote for their property taxes to go up when they voted for republicans to cut taxes on billionaires.

> Property taxes automatically goes up to cover the missing federal dollars, that is why property taxes are skyrocketing.

All property taxes in the United States are at the state and local levels, not federal. I don't know what you're referring to.

> The republicans did not stop wars, foreign spending, or wasteful spending, they stopped domestic spending on things regular people needed.

Yes.

> Republicans cut federal income taxes and made it easier for CEOs to earn unlimited tax free money.

Also yes.

> Property taxes have to pay for everything local that back in the 1950s was all taxpayer funded federally because we had a 90% federal income tax bracket and post-1929 financial regulations.

You're losing me again here.

I believe they’re saying that property taxes are making up for a gap in funding caused by lowered federal taxes. It’s not that property taxes are federal, it’s that lowering taxes in one area requires them to be raised in another, in order to achieve the same level of services.

> lowering taxes in one area requires them to be raised in another, in order to achieve the same level of services.

But where has that actually occurred?

But this is crazy! Property taxes have been around since the 1800s and are used today to fund local spending, the kind of stuff that the federal government is either averse to or constitutionally barred from.

The federal government wasn't spending money on schools and other services when the tax brackets were that high. That money was going to the military. Social security and Medicare/Medicaid came later, after income taxes had been reduced.

If we want to reform the federal tax system to make it more fair, there is one particularly low-hanging fruit that any politician with a brain avoids like the plague: end the separate treatment of capital gains from income. Bezos sells billions of stock each year and pays a little under 20% on all of it. The rich don't need to engage in tax evasion schemes, the system is already incredibly friendly to income from capital over income from labor.

Federal dollars to states and municipalities in Democratic-leaning states have been eviscerated. Since states can’t reasonably sunset a program with 6 weeks notice, the money has to come from somewhere else.

Yes and blue states also tend to have the least reliance on property taxes vs income tax for example. Debating this in the absence of real data is unlikely to be productive. Unfortunately trying to find good data on state/local tax rates is... more difficult than it should be.

Blue states have a higher reliance on local taxes (which makes sense when you consider that one of the things that makes them "blue" is higher taxes). Remember the drama over the SALT deduction?

Reply on news.ycombinator.com