Economists studied California's billionaire tax, reached different conclusions | Hacker News Reader

Economists studied California's billionaire tax, reached different conclusions

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10 pointsmooreds16 comments

Laws should never be used to extract wealth. Whatever the government invests effort it, it specializes in that over time and it entrenches itself. Laws and government should only exist to even the playing field of the market, allowing small businesses to rise faster.

This would be just as bad for the rich since their businesses would have more competition. The big difference is that tax goes through government, allowing politicians to have a huge incentive that benefits them, whether it's through legal means or not.

> Laws should never be used to extract wealth.

Property taxes would like a word. I consider them the original wealth taxes. in 2023 they funded nearly 24% of local and state governments: https://taxfoundation.org/data/all/state/property-taxes-by-s...

Seriously, taxes are one of the main ways governments (which is to say the people who delegate power to governments) express policy choices and guide the market. The market is a tool, just like the government is, for society to get things it wants.

You're right, I meant extracting wealth beyond taxes, although certainly taxes can also be used for wealth extraction. Having funds for public benefit is not extracting wealth, so the line is blurry but we can look at how effective the system is that needs this money and if it's not effective then what else can it be other than extracting wealth.

Laws allowing for wealth accumulation but not extraction will eventually result in either police states or popular revolt in response to inequality. Wealth extraction's value as a pressure valve should not be ignored.

Right, so there could be laws that benefit the wealthy and they are extracting from everyone else. Probably the best way is to avoid all of them, have simple laws for everyone.

And that pressure valve can backfire, the wealthy move their money, future investments don't happen, etc. The imbalances should be addressed by lowering the bar for competition, and this is what the government seems to never want to do. Taxing the rich is a distraction.

The best way to avoid it is to address it. Simplfying laws is orthogonal to public outrage.

There will always be a tension between the accumulation of wealth and the popular demand to tax it. That doesn't mean that swinging to one extreme is an answer, nor is treating them as exactly equal. You can lower the bar for completion as much as you want, but if it results in disproportionate accumulation of wealth, the masses will revolt and blaming them for their dissatisfaction will never resolve the tension. Instead it will inflamed it. Police state, address wealth inequality, revolt. Choose one.

People don't care about others if they are living well. They accomplish this if there is a good job market with a lot of options that favors workers instead of corporations. It only gets really bad because corporations have too much leverage because no one can compete. They become the only option, and can dictate salaries and job availability.

The only way this is not the case is if you assert that most people are not good enough to compete. That's an ironic stance because the excuse for wealth redistribution becomes about inherent inequality, like poor people can't really be competitive even if the rules of the game favor them.

> People don't care about others if they are living well.

This is not a reality that myself or anyone I know has ever experienced for as long as we can remember. Is it something you've lived through? When and where did this time exist?

Part of the evidence is looking at who is even politically engaged. Most people are not. Do you think if people had a few hundred thousand in the bank they would care about millionaires or billionaires making too much money? I certainly wouldn't and doubt most would.

Even simpler is just asking people and noting their responses.

> Income and wealth distribution is extremely important to 44% of voters, the highest reading across the three midterm elections in which Gallup has measured it and well above the 32% in 2018 and 31% in 2014.[1]

I don't have to think that income and wealth distribution is important. I can just look at the fact that it is.

I'm curious though, if this doesn't, what would you convince you?

1. https://news.gallup.com/poll/716333/issues-voters-say-matter...

I'm not saying nobody cares right now. I'm saying nobody would care if things were better, and part of that evidence is that even now when things are bad there is still a sizeable portion of the population that don't care. By your source there it's still more than a third of people don't think it's important.

I'm also talking about a hypothetical where most people would fit into the middle class. If we eliminate the entire bottom tier of economic status, don't you think that would have an impact on how people see the ultra-rich? It's not the gap that's important, it's whether the bottom tier of people are homeless or living in a house with a job they can live with.

Class consciousness doesn't exist as a product of living standards. It exists because people observe that effort and wealth don't correlate outside of class.

Peoples' instinctive ideal of a just world are in tension with the very idea that effort leads to success. Living standards don't factor in to this observation, because the issue isn't physical comfort, it's the psychological tension that me and all my peers work damn hard and it's not physically or mentally possible to work 14,000 times harder[1].

It's the psychological tension that the people creating wealth from income and people creating wealth from capital are playing different games, that no matter how hard we work, we won't be playing that game. This runs up against our instinctive beliefs about how the world should work. No amount of comfort hides that.

1. 1B wealth divided by 68,998, the median adult wealth in the US.

> It's the psychological tension that the people creating wealth from income and people creating wealth from capital are playing different games

I can agree with this, but of course the crux of the argument is how to address this, which parts to change or correct and how.

For example schools can teach about business and capital at an early age. Everyone can learn to produce local businesses that grow over time. This creates local economies where everyone has small businesses, providing jobs, and creating small amounts of wealth for themselves and their communities. This is still capitalism, but it's not globalism form of capitalism.

The problem is how in every industry you have a handful of giants that own the sector, so to speak. They work to make competition harder through government regulations that kill small businesses. Immigration, out-sourcing to other countries, and the lack of small businesses then create a job market that heavily favors large corporations. People looking for jobs find themselves competing with the world, and with a lack of openings. This gives the coprorations almost unlimited leverage to do layoffs, hire whoever, etc., and this effecitively creates a bottom tier of society of people who are stuck in "wage slavery".

The solution is far from just getting a few billion from rich individuals. The problem is the game itself, government and corporate collusion, that is driven by the same people suggesting all the Leftist agendas that don't really work and only serve to distract.

I voted against it. California needs to fix its property tax problem. Raising property taxes, particularly instituting a land value tax, would require no new bureaucracy and would address the main cause of poverty in California, which is housing costs, by encouraging the highest and best use of land.

This is a sensible take, but is such an option on the table?

And they all glossed over the obvious illogical and likely unconstitutional aspects of the tax, and downplayed the fact that every tax like this in history has failed.

Taxing paper gains will be a disaster.

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