Does the author have a better idea for healthcare that doesn't involve people dying because they can't afford it? She says this like it's a bad thing. If billionaires paid their workers fairly...
Does the author have a better idea for healthcare that doesn't involve people dying because they can't afford it?
we’d be asking every billionaire to hand over more than two-thirds of their total wealth over a 10-year period.
She says this like it's a bad thing. If billionaires paid their workers fairly there wouldn't be any billionaires in the first place.
If the government actually managed to collect it, their fortunes would rapidly erode — and so would tax collections. The plan might be a good way to smash wealth, but it’s a terrible way to fund the nation’s health-care system.
That money wouldn't disappear, it'd pay doctors and everyone else involved in healthcare. If anything it would reappear because billionaires hide their money and everyone who isn't rich doesn't.
I don't believe this to be true. Maybe there'd be less, but most billionaires don't become billionaires with armies of slaves. They become billionaires by reaping the benefits of various mechanics...
If billionaires paid their workers fairly there wouldn't be any billionaires in the first place.
I don't believe this to be true. Maybe there'd be less, but most billionaires don't become billionaires with armies of slaves. They become billionaires by reaping the benefits of various mechanics at massive scale.
You'd be hard pressed saying Patrick Collison (CEO of Stripe, net worth $2.1B; or his brother John, same net worth) pays his workers "unfairly". Stripe pays very well. But Stripe is a fintech company and only has ~2000 employees. It just so happens that being anywhere in fintech at scale reaps massive benefits. Why? Well, because you can power billions of transactions without employing millions of people.
We have more and more billionaires because you need fewer and fewer people to achieve things at scale. Billionaires never stopped paying their workers fairly, they just need to pay fewer and fewer workers to achieve the same work as software takes over meatware tasks. Humans need not apply.
Tbf, this is another argument for heavier taxation. Automation is going to further concentrate wealth in the hands of only a few, at the expense of millions.
We have more and more billionaires because you need fewer and fewer people to achieve things at scale.
Tbf, this is another argument for heavier taxation. Automation is going to further concentrate wealth in the hands of only a few, at the expense of millions.
From society you need the following five things for it to pump out wealth the way the US does: Education Connectivity with the rest of the world (Trade and Internet) A stable democratic government...
From society you need the following five things for it to pump out wealth the way the US does:
Education
Connectivity with the rest of the world (Trade and Internet)
A stable democratic government
No tax incentives to start a company outside the country rather than inside
No logistical incentives to do so either (eg. bureaucratic roadblocks)
India lacks a lot of "the advantages a modern, developed country offers them". What it does have in some places though is education and connectivity infrastructure. It's also a decent democracy where it's not terribly hard to start a company. And, there's no massive tax or logistical incentive in starting a company outside of india instead of in india. Of course, india has a massive, massive population. But massive parts of india do not follow the first two requirements (education and connectivity).
Sorting by the 4th column (and ignoring any country with <5 billionaires), you can see for example, why is France so low? Well, France has huge logistical and tax roadblocks to starting a company. Sweden however is very high up because it has excellent education and connectivity throughout the country.
I'm French and I can assure you France is not doing great. French entrepreneurs just create companies in the US instead, just as I did. You can't just look at numbers and evaluate them without...
I'm French and I can assure you France is not doing great. French entrepreneurs just create companies in the US instead, just as I did.
You can't just look at numbers and evaluate them without context. France doesn't exist in a vacuum.
Why is it better that the US profits off of France's very high quality and heavily subsidized education system by getting a bunch of French entrepreneurs who don't then contribute back to the...
Why is it better that the US profits off of France's very high quality and heavily subsidized education system by getting a bunch of French entrepreneurs who don't then contribute back to the French economy?
I'll tell you what evidence: I am in that situation. I'm French and I have Zero incentive to create a company in France rather than the US. France makes it hard, expensive and complicated. Thus, the companies I create are american, and I don't live in France .. wouldn't move back there.
I know I'm not the only one because I know a lot of French entrepreneurs exactly in the same situation as me. Millionaires, hundred-millionaires even. All tax money not being contributed back to the French system because of stupid reasons.
There's no reason to be proud of a low number of billionaires in a country. Not unless you can show that this is a sign of a healthy system rather than a symptom of a broken one.
The plural of anecdote is not data, dude. I'm asking for data. So you continue to keep your French citizenship because... On the contrary, it's on you to prove that this means the system is broken.
The plural of anecdote is not data, dude. I'm asking for data.
Thus, the companies I create are american, and I don't live in France
So you continue to keep your French citizenship because...
There's no reason to be proud of a low number of billionaires in a country. Not unless you can show that this is a sign of a healthy system rather than a symptom of a broken one.
On the contrary, it's on you to prove that this means the system is broken.
Because changing citizenships is not easy, and nobody's forcing me to drop my citizenship. Why is this a question? YOU are making the assertion "a low number of billionaires = a healthy system"....
So you continue to keep your French citizenship because...
Because changing citizenships is not easy, and nobody's forcing me to drop my citizenship. Why is this a question?
On the contrary, it's on you to prove that this means the system is broken.
YOU are making the assertion "a low number of billionaires = a healthy system". It's not on me to prove the negative, and quite honestly, it's not on me to try to even convince you of this either. But for the sake of clarity, I will rephrase it one last time.
Billionaires are not a positive, they are a negative. That wealth/power should not be concentrated, but distributed.
I agree that wealth generally has a more positive impact when distributed rather than concentrated (I disagree it's necessarily the same with power, but I'm also not making the point that power is better one way or the other, so nevermind that).
However that does not mean a low number of billionaires means the wealth is automatically better distributed. It might. But France having a low number of billionaires may also just mean it has just as much inequality and more super-millionaires. It may also mean it simply has more inequality and less wealth. In my experience as a French citizen and participant in the French system, I can tell you it's the latter.
And to be clear, I'm very happy with my country of origin overall, but it's not doing great on this front, and I find it offensively foolish of someone with zero experience in that system to claim it is just because some numbers you like line up.
Fair on you to ask for data. I have none for you, and I have other things to do than work on a study to make a point in an internet argument. But do accept that I'm more qualified than you are to make assertions in this domain.
I'm also not sure taxation (without a clear plan behind it) solves the problem (but for the record I'm a huge Warren proponent so I trust her plans anyway). Specifically, will the government...
I'm also not sure taxation (without a clear plan behind it) solves the problem (but for the record I'm a huge Warren proponent so I trust her plans anyway).
Specifically, will the government necessarily use the extra influx of money on the lost income from increased automation? Or are we just talking about funding another warship?
This is where Yang's plan makes sense. The money gets redistributed to people.
Sure, but the CEO of Stripe didn't create that $2.1 billion worth of company by himself. Wikipedia says they have at least 2000 employees and I don't think it's fair that the CEO and his brother...
I don't believe this to be true. Maybe there'd be less, but most billionaires don't become billionaires with armies of slaves. They become billionaires by reaping the benefits of various mechanics at massive scale.
Sure, but the CEO of Stripe didn't create that $2.1 billion worth of company by himself. Wikipedia says they have at least 2000 employees and I don't think it's fair that the CEO and his brother have $2.1 billion of net worth (yes I know a lot of it is stock) while the people that helped him create it don't have anywhere near that. How many of their employees have even 1 percent of that net worth ($21 million)? I don't think any CEO does 100 times the work of their employees.
Maybe not on a day to day basis no. But the brothers got those billions as founders, not CEOs. Founders take far more than 100x the risk that the employees take. And how exactly would that money...
I don't think any CEO does 100 times the work of their employees.
Maybe not on a day to day basis no. But the brothers got those billions as founders, not CEOs. Founders take far more than 100x the risk that the employees take.
And how exactly would that money be better distributed within stripe? Should every employee essentially be a millionaire? Should the incentives be even higher to hire less people in order to distribute less money?
Look I think there's a lot of problems with billionaires in the US economy as well but I'm not as sure as people here are that them existing is a bad thing.
For example I think it's a bad thing they have the political influence they have. But I don't think it's necessarily a bad thing that governments can actually be challenged by something (given that the second-amendment based military challenge idea is nonsense).
This is actually a really interesting point, because it's quite key to the argument but fairly hard to quantify. Let's be a bit more realistic and say that the founder:employee reward ratio is...
Founders take far more than 100x the risk that the employees take.
This is actually a really interesting point, because it's quite key to the argument but fairly hard to quantify. Let's be a bit more realistic and say that the founder:employee reward ratio is around 5000:1 - do the risks match up then? What if the founder doesn't need the income to survive, but the employee does - is risk relative or absolute?
The greatest risk to a founder is being left with worthless stock after a company bankruptcy; the risk to an employee is being left without ongoing income in the same situation, although they may also be made redundant while the company continues without them. The only real differential in direct financial exposure is the opportunity cost on the founders' part: the compensation they took in stock instead of cash but could have taken in cash at another job - anything else is largely hypothetical value.
So now the question becomes: are the founders taking 5000x more risk by tying a portion of their future compensation to company success? I don't think they are.
For what it's worth, I've very literally put my money where my mouth is: I think the risk/reward ratio is dramatically better for business owners than employees, and I chose to be part of an early-stage startup. There are a lot of other reasons I'm here as well, we work in education and I genuinely believe in and care about what we're doing, but I'd be lying if I claimed that the possibility of financial freedom had no influence on me.
Also let's not pretend like they used their own personal wealth to start it. They got seed funding from Y Combinator. So their personal investment was relatively little compared to VCs. But you...
Also let's not pretend like they used their own personal wealth to start it.
They got seed funding from Y Combinator. So their personal investment was relatively little compared to VCs.
But you don't see people arguing why VCs deserve more, do you?
VCs did not get more than the founders in this story. And VCs only invested some amount of money, which they literally do professionally. The founders invested their entire life into it. Just...
VCs did not get more than the founders in this story. And VCs only invested some amount of money, which they literally do professionally.
The founders invested their entire life into it. Just because you're not investing personal money (which many do) doesn't mean you're not taking massive risks.
They generally invest far more money than the founders ever could. That's my point. If we're going by the amount of money put into a venture, the VCs come out on top every time. If you take...
And VCs only invested some amount of money
They generally invest far more money than the founders ever could. That's my point. If we're going by the amount of money put into a venture, the VCs come out on top every time.
The founders invested their entire life into it. Just because you're not investing personal money (which many do) doesn't mean you're not taking massive risks.
If you take millions in VC money because your hobby or private project might finally become a fully fledged product, you're significantly improving your life, not putting it at risk.
And if you're a company like WeWork, you personally invest a small chunk of change in real estate, then use the VCs money to pay yourself rent, then walk away with millions while the entire company collapses around you! Totally risky! /s
… but I'm not. Nobody is. VCs are like banks, giving out loans with different payment plans and collaterals. Nobody is arguing the banks don't make enough money. People are gaming the system, yes....
If we're going by the amount of money put into a venture, the VCs come out on top every time.
… but I'm not. Nobody is. VCs are like banks, giving out loans with different payment plans and collaterals. Nobody is arguing the banks don't make enough money.
People are gaming the system, yes. Of course. Every system eventually gets gamed. The people who game the system too hard eventually end up in jail (cf. Elizabeth Holmes for example). It's absolutely fair to want to fix those issues. But your comments have me believe you would trash a lot of the good and legitimate parts of that system in the name of "preventing" the bad parts, and you really won't be preventing anything because the "bad parts" will just find something else to game. They have a million times the resources you do already.
You want to strike at the root of the problem, this isn't the root of anything.
BTW, I'm happy to continue this conversation but you're (at least to me) coming off pretty hostile simply because I'm not embracing this idea that we should burn billionaires at the stake, so it's pretty frustrating to keep replying atm.
Does a founder really invest significantly more of their life into a company than a dedicated employee does, though? I can think of plenty of situations where employees move home or even city for...
The founders invested their entire life into it. Just because you're not investing personal money (which many do) doesn't mean you're not taking massive risks.
Does a founder really invest significantly more of their life into a company than a dedicated employee does, though? I can think of plenty of situations where employees move home or even city for work, put in hours way above and beyond the baseline, miss family events, schedule time off around company needs, answer emails in their off hours, etc. etc.
I don't think employees should do any of these things, but plenty of companies (often not even especially well paying ones) expect that they do. If we're talking about effort invested, I don't see how the number of hours in a week allows the founder:employee difference can be more than 5:1 or so, and even that's a stretch.
That stacks with the financial opportunity cost I mentioned a couple of posts up, and with any direct cash investment the founder might make, so it's not the whole story - but I'm still of the opinion that the employee is getting a raw deal here!
They don't pay exceptionally well but they pay well for tech work. And software engineering is a very well paid profession in the first place. They treat their workers fairly. You could argue they...
They don't pay exceptionally well but they pay well for tech work. And software engineering is a very well paid profession in the first place.
They treat their workers fairly. You could argue they could pay more I'm sure but it doesn't detract from my point which is that being a billionaire doesn't simply happen by paying unfairly, nor is that a requirement in order to be one.
Ah that's different yes. Ive not worked there but I know them quite well so I can answer a bit. I do recommend them, they seem to be a fantastic place to work.
Ah that's different yes. Ive not worked there but I know them quite well so I can answer a bit. I do recommend them, they seem to be a fantastic place to work.
Surprise surprise, libertarians like to spin left-leaning thought as bad without providing any reasoning why it's bad. When the appeal to right-wing morals doesn't hit home instantly, their...
Surprise surprise, libertarians like to spin left-leaning thought as bad without providing any reasoning why it's bad.
When the appeal to right-wing morals doesn't hit home instantly, their arguments fall flat. And it's kind of hilarious.
You just have to accept its absolutely ludicrous premise that rich people should have to pay taxes commensurate to the quantity of resources they control. Ridiculous!
Surprise surprise, libertarians like to spin left-leaning thought as bad without providing any reasoning why it's bad.
You just have to accept its absolutely ludicrous premise that rich people should have to pay taxes commensurate to the quantity of resources they control. Ridiculous!
(apologies for late reply) Yeah I agree, they do need to explain why, but that just becomes defending the libertarian ideology as a whole. In the context of libertarians spouting opinions about...
(apologies for late reply)
Yeah I agree, they do need to explain why, but that just becomes defending the libertarian ideology as a whole.
In the context of libertarians spouting opinions about Warren to other libertarians, I think it's fine that they are using their common line of thought without additional explanation.
Sure, the money doesn't disappear but that's not the issue. The issue is that the health care is funded by a tax on billionaires, we might not have billionaires anymore, either because the money...
Sure, the money doesn't disappear but that's not the issue.
The issue is that the health care is funded by a tax on billionaires, we might not have billionaires anymore, either because the money was taken away or they hid it and it's now owned by non-billionaires. You can run out of money from that source. There would need to be a different tax to fund it.
It's not whether we can literally afford it, it's whether the tax does the job. It's the same as if you funded it through a cigarette tax and people either actually managed to quit smoking or turned to smuggling.
We'd be funding things a lot differently than other countries though. If your argument is that we should learn from their experiences, maybe taxes should be based on what works for them too?
We'd be funding things a lot differently than other countries though. If your argument is that we should learn from their experiences, maybe taxes should be based on what works for them too?
Norway has a $1 trillion investment fund from doing the same thing us billionaires do. So is that a bad thing? Maybe the real thing is that the US is a low taxes /low services country The US could...
Norway has a $1 trillion investment fund from doing the same thing us billionaires do. So is that a bad thing?
Maybe the real thing is that the US is a low taxes /low services country
The US could be there to... Imagine if the Gas tax were to be quadrupled from its current 50 cents a gallon. First we Double ($1/gal) for it to properly pay for road maintenance and to pay for properly funded and expanded metro development, Greener metro lines, bike lanes, double it again ($2) to pay for Wealth Funding
This gas tax funding of $1/gal would contribute 175Billion in investments
After 40 years the wealth Fund would provide $7 Trillion Annually to pay for a UBI for as long as the US were to want it. Without any additional tax revenue
I think we can look at other jobs and industries where there is a boom and bust cycle, casinos, and where future income should be considered
Back to the above US choice in low taxes
Mississippi Gambling Revenue and therefore taxes has fallen 31% in 2018 (tax revenue $234 million) vs 2008's (345 million) best year numbers.
If Mississippi had contributed it's taxes to a Sovereign Wealth Fund instead of using it as a Substitute to Government taxes what would the effect have been.
A year after gambling was Legalized in Mississippi, skipping the first years taxes, the state of Mississippi has received Gaming Taxes, Starting in 1994, a total of $6.3 Billion in tax revenues
If those same taxes had been invested in a Wealth Fund its current value would be ~$29.6 Billion
Of course this would have required Mississippi to create 6 Billion in alternate tax Revenues, and this is the stump speech Yang needs to create.
Because in 5 years when Gaming Revenues have dropped another 50% its time for Mississippi to be ready, and in this case you're sitting on a $50 Billion Wealth Fund. That can pay out $4 billion a year to its 2.9million residents or fund the government services instead of deep cuts
I find the economic arguments against the medicare-for-all debate to be disingenious at the best. Firstly, comparable healthcare systems already exist and are economically viable. Canada and the...
I find the economic arguments against the medicare-for-all debate to be disingenious at the best. Firstly, comparable healthcare systems already exist and are economically viable. Canada and the U.K. are two examples; you could look at Germany or Norway. It is a non-argument to state that universal healthcare is economically impossible.
Secondly, it is a question that is at an enormous scale. The healthcare industry, using a quick duckduckgo and napkin math, is an ~$30,800,000,000,000 in 2018 USD, using the OECD average, worldwide, yearly business. The problem is that capitalism doesn't optimize at this scale. Markets optimize internally. Theortically, an American could move to a country with universal healthcare, but that is an insane assumption to build a theory around.
Now, I will insert my dangerous idea; maybe removing the profit mechinism from the healthcare industry will save money. The healthcare industry has many different areas of specialization, and each firm in that specialization has a sales and HR department, managers and investors to payoff; none of these groups CREATE value. They may find profits, but profit is not value. If healthcare was nationalized in the US and the nationilized insitution wasn't run as a psuedo-business, all dead-weight groups could be either consalidated or eliminated entirely. The "price" of each healthcare good could also be a simple reflection of the costs to create it. Both of these changes have the possibility of drastically reducing the dollar cost of healthcare. Now, nationalized healthcare in the US is a BIG dream, but I would argue that it would be an economically advantageous policy.
Yes, we could do things like other countries but it seems like that would mean doctors, nurses, and other medical staff get paid more like other countries? Take a look at what they make in the...
Yes, we could do things like other countries but it seems like that would mean doctors, nurses, and other medical staff get paid more like other countries? Take a look at what they make in the countries you're comparing against.
Most of those countries also subsidize medical education at the same time. It's not so important to have a huge salary if you don't also have half a million in student loans.
Most of those countries also subsidize medical education at the same time. It's not so important to have a huge salary if you don't also have half a million in student loans.
Maybe so, but it will still be a big political fight to reduce their incomes so drastically. Politicians aren't preparing the general public for this by blaming insurance companies for the cost of...
Maybe so, but it will still be a big political fight to reduce their incomes so drastically. Politicians aren't preparing the general public for this by blaming insurance companies for the cost of health care, and it's not clear which side the public would take in a labor dispute.
Not that. If we compare the average GP OFFICE Doctors Salaries in the US $210,000vs the UK $130,000 Nurses at Doctors Office in the United States 6vs in the UK there are 2 Total Nurses Salaries at...
Not that.
If we compare the average GP OFFICE
Doctors Salaries in the US $210,000 vs the UK $130,000
Nurses at Doctors Office in the United States 6 vs in the UK there are 2
Total Nurses Salaries at the dr office in the US if $314,000 while in the UK its $50,000
Other employees in the office 10 in the US with 8 in the UK
So we can cut some of those administrative jobs, 2 or 3,and be on the same administration costs. But it's the salaries of the dr and nurses that have increased the cost of Healthcare in the US
But as of last year Medscape Physician Wealth and Debt Report 2018
29% of US doctors 50 and older have a net worth over $5 million
3% of UK doctors 45 and older had a network over $5 million
28% Of US physicians age 35 - 49 had over $1 million net worth
22% of UK doctors 45 and younger had a network over $500,000
I don't have a specific problem with generally lower pay for medical staff. Clearly, the rest of this first-world doctors are doing fine on the pay they are recieving.
I don't have a specific problem with generally lower pay for medical staff. Clearly, the rest of this first-world doctors are doing fine on the pay they are recieving.
The American system is a baffling mix of huge amounts of government spending, huge amounts of insurance spending, combined with poor quality for many people. The US has very expensive healthcare....
The American system is a baffling mix of huge amounts of government spending, huge amounts of insurance spending, combined with poor quality for many people.
The US has very expensive healthcare. The US government pays more for healthcare than other governments. The US could have the English NHS right now and they'd be spending less.
But US healthcare is not very good. Life expectancy is lower for many people; there's massive over-prescribing across a wide range of meds (notably opioids), there's huge amounts of over-testing leading to harm, your meds are more expensive than other countries, a bunch of people don't have access to any healthcare other than emergency treatment, mental health treatment is either non-existent or overly restrictive, etc etc.
It's convenient to have a tag for the 2020 US election, but I'm not sure I like "2020 us presidential election". How about something like elections.usa.2020? Or more general...
It's convenient to have a tag for the 2020 US election, but I'm not sure I like "2020 us presidential election". How about something like elections.usa.2020? Or more general elections.usa.presidential?
Maybe there's been some discussion about this before that I've missed.
I don't think this will work well in the USA right now. I've lived in a country with healthcare for all. It is fantastic when it works like it should. And in most countries, it does work like it...
I don't think this will work well in the USA right now.
I've lived in a country with healthcare for all. It is fantastic when it works like it should. And in most countries, it does work like it should. You can further enhance government healthcare with private insurance, if you so choose.
But in the USA, for as long as the rich control the levers of political power (lobbying, 'conservatives' that care only for the interests of the rich) I think government funded healthcare will not drive down costs in America like it should and will be set up to fail by the republicans when they get in power.
I was surprised about the matter-of-fact glib "reasoning" based on "common sense", until I read her rationalwiki entry. https://rationalwiki.org/wiki/Megan_McArdle Now I'm no longer surprised....
I was surprised about the matter-of-fact glib "reasoning" based on "common sense", until I read her rationalwiki entry.
Hmm, I think you missed the point. Even if it worked, you wouldn't have that source of funding after a decade, so you'd need another way of paying for health care. Is rationalwiki reliable? I've...
Hmm, I think you missed the point. Even if it worked, you wouldn't have that source of funding after a decade, so you'd need another way of paying for health care.
Is rationalwiki reliable? I've been reading McArdle's column off and on for a while and she's usually pretty reasonable.
She's very libertarian/conservative, so as long as you take her opinions with that grain of salt, her columns are readable. She was vocally opposed to Obamacare so it's no real surprise she's also...
She's very libertarian/conservative, so as long as you take her opinions with that grain of salt, her columns are readable.
She was vocally opposed to Obamacare so it's no real surprise she's also against Warren's healthcare plan. She'd probably be opposed to any plan involving more government funding of healthcare.
Yes, I see her as one of the few conservatives worth reading. Particularly if you want to know what the conservative argument against a government health care plan would be.
Yes, I see her as one of the few conservatives worth reading. Particularly if you want to know what the conservative argument against a government health care plan would be.
They have only one argument on this topic, and it hasn't changed in at least 10 years. Hell, Obamacare was the conservative argument about how the government should be involved in healthcare (via...
Particularly if you want to know what the conservative argument against a government health care plan would be.
They have only one argument on this topic, and it hasn't changed in at least 10 years.
Hell, Obamacare was the conservative argument about how the government should be involved in healthcare (via the Heritage Foundation)
They campaigned against Obamacare saying it was socialism, that there would be death panels, that it would cost eleventy bajillion dollars, etc. All of which turned out to be bullshit.
Then they campaigned for years on "repeal and replace every single word of Obamacare". When they actually got control of Congress, their replacement turned out to be...nothing. Just a repeal.
All they're doing now is trotting out the same bullshit arguments they used 10 years ago.
Conservatives in the US, when it comes to healthcare, are intellectually and morally bankrupt. I don't care what they think anymore.
It’s interesting that they can run on “repeal and replace”, but they never clearly described what the replacement would be. And we all knew it was really “repeal and then haha gotcha suckers” and...
It’s interesting that they can run on “repeal and replace”, but they never clearly described what the replacement would be. And we all knew it was really “repeal and then haha gotcha suckers” and then that’s I guess just it. It was always a lie that they would replace it. I don’t know, maybe my analysis is all wrong. But politics is infuriating.
So right now it's some kind of specter around rich people leaving? As if more wealth won't be created in their absence? Nothing about these people intrinsically gives them the right to hoard wealth.
So right now it's some kind of specter around rich people leaving? As if more wealth won't be created in their absence?
Nothing about these people intrinsically gives them the right to hoard wealth.
It's not that they will leave, it's that they'll move their assets so it avoids the tax, but they somehow still control it. For example, let's say a billionaire starts a charity and donates...
It's not that they will leave, it's that they'll move their assets so it avoids the tax, but they somehow still control it.
For example, let's say a billionaire starts a charity and donates everything except $990,000,000 for themselves. Or they divide it up among their relatives, or whatever. Or probably something more clever that their tax accountants come up with.
We already have a pretty solid understanding of the financial position of billionaires through their prior year tax filings, and any significant deviation from established levels of wealth should...
It's not that they will leave, it's that they'll move their assets so it avoids the tax
We already have a pretty solid understanding of the financial position of billionaires through their prior year tax filings, and any significant deviation from established levels of wealth should trigger alternative calculation formulas to preempt any manipulation of net worth year over year. They can't change what they've already reported, although there will be a concern 5, 10 years down the road when our lookback period considers only the artificially deflated net worth figures.
The current gift tax limit is $15k per person per year. Anything in excess requires filing a gift tax return.
or whatever.
A lot of these loopholes have already been addressed, the problem is enforcement and allocating enough resources to the IRS to achieve higher compliance rates. From this article:
“There’s a direct dollar impact,” said Mark Mazur, vice president of tax policy at the Tax Policy Center. He said the IRS collects an estimated $4 for each dollar spent on enforcement.
It tells you about income, not wealth. Whatever they spend or give away isn't wealth anymore, and the value of what they own can change. To figure out wealth you need to assess the value of their...
We already have a pretty solid understanding of the financial position of billionaires through their prior year tax filings
It tells you about income, not wealth. Whatever they spend or give away isn't wealth anymore, and the value of what they own can change. To figure out wealth you need to assess the value of their property. In some cases that's easy (bank accounts and stock in public companies) and in others it's a guess made by property assessors what it would go for. For land, the property assessors already do this, but for everything else, normally this is only done to figure out estate tax when someone dies. For a wealth tax it would have to be done every year. I mean, it's doable, but it's definitely going to keep a lot of professionals busy.
Their charity must spend those funds on expenses related to the charity, not for their personal or business' benefit.
And if what they care about is power, maybe that works out fine for them? At these levels of wealth, it's mostly about power anyway. The money can be used to promote the donor's favorite causes. Getting billionaires to donate lots of money to charity sooner rather than later might be a very good result, but it also means there will be a lot of powerful charities and less revenue gets raised by the wealth tax.
The current gift tax limit is $15k per person per year.
That's not really a limit, though. You can give more, but it reduces the amount that's exempt from estate tax. It probably still would be worth it to give the money sooner rather than later since the estate tax happens once and the wealth tax would happen every year. I suppose the government could tax large gifts, though?
This is a whole new way of doing taxes and new ways of plugging leaks from tax avoidance would need to be invented, like has already happened for income and estate taxes.
Not entirely true. Without changing a single reporting requirement of the tax code, you could determine a significant portion of someone's net worth just through business tax returns. All LLCs,...
It tells you about income, not wealth. Whatever they spend or give away isn't wealth anymore, and the value of what they own can change. To figure out wealth you need to assess the value of their property. In some cases that's easy (bank accounts and stock in public companies) and in others it's a guess made by property assessors what it would go for. For land, the property assessors already do this, but for everything else, normally this is only done to figure out estate tax when someone dies. For a wealth tax it would have to be done every year. I mean, it's doable, but it's definitely going to keep a lot of professionals busy.
Not entirely true. Without changing a single reporting requirement of the tax code, you could determine a significant portion of someone's net worth just through business tax returns. All LLCs, partnerships, and corporations have to report year-over-year balance sheets (see: Schedule L of Form 1065, Form 1120, or Form 1120S), and the wealthy commonly form these entities to shield from personal liability, preserve privacy, etc. in maintaining ownership of investment assets. That won't get us every checking savings balance, every yacht, every piece of art, or what-have-you, but their business entities alone will give us most of the overall picture. The IRS already knows how much Koch Industries says they're worth.
That's not really a limit, though. You can give more, but it reduces the amount that's exempt from estate tax. It probably still would be worth it to give the money sooner rather than later since the estate tax happens once and the wealth tax would happen every year. I suppose the government could tax large gifts, though?
You are right to clarify for me there. $15k is the non-taxable limit. Not sure about taxing large gifts though. You could probably just move all the taxation in the annual wealth tax or estate tax rather than requiring a separate tax on individual gift transactions.
This is a whole new way of doing taxes and new ways of plugging leaks from tax avoidance would need to be invented, like has already happened for income and estate taxes.
Absolutely. I don't dispute the likelihood that there will be loopholes in any future legislation, but I think my main point is that manipulating your financials to circumvent a wealth tax is not so easy because of the data points already available.
Good to know! I wonder about the relationship between net worth according to a balance sheet (which would give you "book value") and valuation, though, particularly for tech startups where they're...
Good to know! I wonder about the relationship between net worth according to a balance sheet (which would give you "book value") and valuation, though, particularly for tech startups where they're not closely related? I guess a tax on book value would still work as a wealth tax, though.
Ooo ooo we're getting into one of my areas. I'm a forensic accountant in a forensic, litigation support, and business valuation practice. You would be right, and another concern is audited GAAP...
Ooo ooo we're getting into one of my areas. I'm a forensic accountant in a forensic, litigation support, and business valuation practice.
I wonder about the relationship between net worth according to a balance sheet (which would give you "book value") and valuation, though, particularly for tech startups where they're not closely related?
You would be right, and another concern is audited GAAP financials vs. tax basis. For our valuations, we request/review both, prefer audited financials as primary inputs, and rely on tax basis if that's the only thing available.
There is a fairly simple solution though. What are tech companies doing a lot of as they grow? Changing their ownership structures, whether from soliciting new investment or compensating employees. Every time they do that, they pay a professional like me to issue a long report painstakingly documenting how we arrived at a value for the share, option, warrant, controlling/non-controlling interest, overall company, etc.
We have a sizable number of companies that order a valuation quarterly, and we're middle-market/semi-national, not companies you'd have heard about. None of their owners are wealthy enough to even be impacted by a 0.1% wealth tax (maybe by Sanders' plan), so I would be shocked if the businesses associated with the individuals/families of the 0.1% had not received a sophisticated valuation in the last 6-12 months.
But that's it. Just legislate it. You wouldn't even be adding another burden beyond producing a copy of that to the IRS every year. Might as well demand the audited financials of major non-public companies since they're part of what goes into the valuations anyway. Even though we're talking about business wealth, we can apply it on the individual level now that we know the value, ownership structure, etc.
Obviously, my whole discussion gets away from the issue of wealth not represented in a business, but this angle would get us most of the way there since businesses represent so much wealth. Then the IRS needs resources for enforcement.
Interesting. This is a different subject, but what do you think of Warren's "Real Corporate Profits Tax" proposal? Would companies start tax-optimizing the income reported to shareholders?
Interesting. This is a different subject, but what do you think of Warren's "Real Corporate Profits Tax" proposal? Would companies start tax-optimizing the income reported to shareholders?
I hadn't done much research on that proposal because well, it's hard to keep up with all the plans put forth. Did a little reading this morning though. I can't even begin to form an opinion...
I hadn't done much research on that proposal because well, it's hard to keep up with all the plans put forth. Did a little reading this morning though. I can't even begin to form an opinion because of how esoteric and nebulous this concept of taxing book income is, but I do agree with the driving forces behind it of fairness and leaning on mega-corporations in order to fund major social programs.
Keep in mind that the /r/accounting and /r/investing discussions will be biased against significantly altering the tax code for obvious self-interested reasons. I included them so you can see how quickly the complexity of this proposal spirals out of control with the ungodly number of variables to consider.
This is a complete divergence from the thread, but how much do you like your job? Forensic accounting sounds like an endless series of financial puzzles to solve, and so in my imagination this...
This is a complete divergence from the thread, but how much do you like your job? Forensic accounting sounds like an endless series of financial puzzles to solve, and so in my imagination this seems like my dream job. Is it mostly solving novel questions, or is it mostly doing the same sort of rote discovery each quarter?
I like it, and I don't think I will find anything better for me in the accounting industry. Still sitting in front of a computer at the end of the day, but I've found a great firm environment with...
I like it, and I don't think I will find anything better for me in the accounting industry. Still sitting in front of a computer at the end of the day, but I've found a great firm environment with relatively interesting subject matter. A rare combination.
Is it mostly solving novel questions, or is it mostly doing the same sort of rote discovery each quarter?
Cases are pretty unique, which I like. Whether a fraud investigation or litigation support (think financial expert witness services), the case has its own story. A recent fraud example involved the CEO of an American subsidiary to a foreign company using company funds to bankroll his farm to the tune of $7 million. He was having the company pay large invoices related to his side business that could have been legit vendors for his employer and other invoices for completely fictitious vendors. For a litigation example, a city sued a private waste company that had a contract to pick up residential and commercial trash. They overcharged the city for some absurd period of time, like 14 years, and we wrote an expert report calculating how much the city had been damaged.
I came from audit then corporate where cycles repeated weekly or monthly and became overly formulaic. Now I'm sinking my teeth into months-long cases. Many of the procedures are similar in nature across engagements but tailored for the context of each one - unique set of facts, unique approach to the analysis, but relying on the same set of tools. Like any other accounting job though, a lot my time is spent wrangling people for documentation so we can complete our work!
Oh, I'm not particularly close, I don't think. I'm running a small business doing bookkeeping with a heavy emphasis on providing financial and ops education. I'm not looking for an exit, quite,...
Oh, I'm not particularly close, I don't think. I'm running a small business doing bookkeeping with a heavy emphasis on providing financial and ops education. I'm not looking for an exit, quite, but I've been doing this for 13 years and am on the lookout for the next thing. So I definitely have plenty of work experience, but I'm not a CPA. It's more about knowing where I'd like to be heading than being able to start doing it next month.
Do you have an accounting degree? First thing I would make sure you're aware of is the hour requirements to sit for the exam. In most states, it's 24-30 accounting-specific credit hours and 150...
Do you have an accounting degree? First thing I would make sure you're aware of is the hour requirements to sit for the exam. In most states, it's 24-30 accounting-specific credit hours and 150 total credit hours. Sorry if I'm preaching to the choir here.
A CPA is not technically required to be a forensic accountant though. My counterpart in another office has only the CFE - he came from an internal fraud investigation function at a major credit institution. That said, a CPA will help you massively by distinguishing you as a candidate and providing many more paths to the same end goal of forensic accounting, and you probably already meet the experience requirement for certification (usually 1,000-2,000 work hours).
Hit me up if you have any questions along the way. I'm very active in /r/accounting because I love to help people figuring out their careers in this industry.
No, my degree is in psychology, of all things. I certainly don't have the accounting credit hours, but the total hours aren't a problem. Reviewing the education requirements for my state, it looks...
No, my degree is in psychology, of all things. I certainly don't have the accounting credit hours, but the total hours aren't a problem. Reviewing the education requirements for my state, it looks like I would need to start basically from scratch with regards to the accounting classes involved. While the CFE does seem more immediately doable, I can see your point regarding distinguishing myself. Especially as someone who doesn't currently have an appropriate degree, I can see the possible difficulty in getting noticed.
Thank you again for your words. I've been thinking about next steps in a vague way, and talking to you gave me the kick in the butt to get me researching Master's programs and CPA requirements. I...
Thank you again for your words. I've been thinking about next steps in a vague way, and talking to you gave me the kick in the butt to get me researching Master's programs and CPA requirements. I really appreciate your help.
You're welcome. You probably don't even need to enroll in a Master's program though. Many states require an undergrad degree in accounting, not just 24 or 30 hours. Read this for more info....
You're welcome. You probably don't even need to enroll in a Master's program though. Many states require an undergrad degree in accounting, not just 24 or 30 hours. Read this for more info.
Master's programs are designed for people who already have an accounting degree but need more hours for the 30/150. It's not worth pursuing for any other reason because employers don't really care about them. This opens up your options considerably in terms of places you can enroll, but remember, you may also have to take foundational business classes, not just accounting, to satisfy the degree requirements.
Yeah, I'm starting essentially from scratch as far as appropriate class hours go. It's good to know that a Master's program isn't necessary as far as impressing employers. I'm not very good at...
Yeah, I'm starting essentially from scratch as far as appropriate class hours go. It's good to know that a Master's program isn't necessary as far as impressing employers. I'm not very good at being diligent in classes where I know most of the material, but given that I could save tens of thousands of dollars as compared to a Masters, I'll suck it up. Thank you again.
Each time you want to close some loopholes, Congress needs to pass another tax bill. This amounts to "we'll figure out how to raise more taxes later." It seems like a tax bill should be judged by...
Each time you want to close some loopholes, Congress needs to pass another tax bill. This amounts to "we'll figure out how to raise more taxes later." It seems like a tax bill should be judged by what it will actually do, not what you wish it did.
But it is true that the government can raise taxes, so anything could in theory be paid for.
Uh, how about we avoid the cheap snark when talking about difficult judgement calls about complicated stuff that none of us are experts in? (Though, admittedly, there was plenty of that in the...
Uh, how about we avoid the cheap snark when talking about difficult judgement calls about complicated stuff that none of us are experts in? (Though, admittedly, there was plenty of that in the original article.)
So why contribute such snark as a discussion starter if you're not ready to face the logic that laws must change over time in order to combat changing tactics by bad faith actors? If people just...
So why contribute such snark as a discussion starter if you're not ready to face the logic that laws must change over time in order to combat changing tactics by bad faith actors?
If people just did what they were supposed to do all the time, we wouldn't need laws.
While it's true that laws can be changed, it doesn't mean you can justify any policy you like by using this as a blank check. It's not easy to get a bill through Congress, which means we are stuck...
While it's true that laws can be changed, it doesn't mean you can justify any policy you like by using this as a blank check. It's not easy to get a bill through Congress, which means we are stuck with a lot of unfortunate laws for a long time. (This is also why a lot of detailed policy-making is left to the executive branch.)
"Can change" versus "cannot change" is an unreasonable binary distinction that eliminates ordinary judgement that we should try to get things right if we won't be able to change them easily later. Things that can change aren't all the same.
Hey, if the rich want to renounce their US citizenship because they value their ability to buy multiple yachts at the drop of a hat over American society, then tah-tah! Yep! And they provided...
Even if it worked, you wouldn't have that source of funding after a decade
Hey, if the rich want to renounce their US citizenship because they value their ability to buy multiple yachts at the drop of a hat over American society, then tah-tah!
Yea... Except for the US has a very progressive tax structure So assume half of the top 10% emigrated to the Bahamas where there are no income taxes, in fact the only tax you pay is a vat In 2015...
Yea... Except for the US has a very progressive tax structure
So assume half of the top 10% emigrated to the Bahamas where there are no income taxes, in fact the only tax you pay is a vat
In 2015 the US received $1.48 trillion in federal income taxes
The top half of that 10% paid most of them
In the US The top 50% pay 98% of Income Tax Revenues
The top 6% (Avg income 514,000) paid $840 Billion of the income taxes
The Bottom 49.1% (Less than 45k) paid $97 Billion of taxes,
but half of those received EIC payments - 27.4 Million Households filled for $66.7 Billion in EIC tax credits
IRS SOI database
Medicare is cut. Bye... Maybe the military. The big problem with that is that 1.1 million middle class jobs are on the books there. Lots of small towns are supported heavily by the US DOD. Between overseas jobs and local bases
Medicare revenues comes from
41% Funding from Income Taxes
38% is funded to the Hospital Insurance (HI) trust fund, is financed primarily through a dedicated payroll tax of 2.9 percent of earnings paid by employers and their employees (1.45 percent each)
13% premiums paid by beneficiaries
7% Taxation on Social Security, Interest on Social Security Investment Lending/State Funding
We will need to increase the fica taxes another 3.8% just to have Medicare paid for the current enrollment. Not including next year's baby boomers
What about the eic? It is small but we're a trillion in the hole
Crazy thing is we want to propose the few pay for it while the middle class pays about $1,000 a year for it.
It's just that's not how the socialized medicine or social systems work in the rest of the world
X
USA
England
Canada
Norway
Denmark
Median National Gross income
$32,031.00
$36,000.00
$34,500.00
$53,155.00
$38,077
Federal taxes paid
$2,213.00
$4,092.40
$2,908.00
$7,685.00
$13,616.34
FICA/social retirement insurance paid
$2,450.00
$2,991.30
$2,107.00
$4,358.71
0
Marginal Tax Rate
6.91%
11.37%
8.43%
14.46%
35.76%
FICA/social insurance rate
7.65%
8.31%
6.11%
8.20%
0
Canada has much higher state taxes than we do to offset the low national taxes
Total UK public revenue
42 percent will be VAT (in indirect taxes),
33 percent in income taxes,
18 percent in national insurance contributions, and
7 percent in business, Estate Taxes, Custom Duties, and Excise Taxes
If we look at 2016 US tax revenue, including state city property and sales taxes
10% from corporate taxes
4% Estate Taxes and Custom Duties
3% Excise Taxes
25% from Social Security and Medicare withholding (Payroll taxes paid jointly by workers and employers)
1% from income tax on the bottom 50% of earners
34% from income taxes on the Top 50% of Earners
23% from state sales & property taxes
The Tax structure itself
Personal allowance 0 TAXES DUE ON
UK £11,850
US $12,000
BRACKETS
UK £11,851 to £46,350 20%
US $12,001 to $21,525 10%
US $21,526 to $50,700 12%
Slovak Republic up to 35,268.06 euros 19% tax rate.
Slovak Republic over 35,268.06 euros is taxed at 25%.
UK £46,351 to £150,000 40%
US 50,701 to $94,500 22%
US 94501 to $169,500 24%
UK Over £150,000 45%
US $169,500 to 212,000 32%
US 212,001 to 512,000 35%
US $512,001 or more 37%
1 Pound sterling equals 1.26 United States Dollar
The Slovak Republic, lowest in wealth inequality. The bottom 60% holds 25.9% of the nation's wealth and the top 10% holds 34.3%. a small country in the heart of Europe with a population of 5.4 million people, 46.2% of whom live in rural areas
In Germany, my choice, it's 14.6% of gross income split evenly by employees/employer
There are no income exemptions. Everyone pays 7.3% of their GROSS income
Does the author have a better idea for healthcare that doesn't involve people dying because they can't afford it?
She says this like it's a bad thing. If billionaires paid their workers fairly there wouldn't be any billionaires in the first place.
That money wouldn't disappear, it'd pay doctors and everyone else involved in healthcare. If anything it would reappear because billionaires hide their money and everyone who isn't rich doesn't.
Every billionaire is a policy failure.
I don't believe this to be true. Maybe there'd be less, but most billionaires don't become billionaires with armies of slaves. They become billionaires by reaping the benefits of various mechanics at massive scale.
You'd be hard pressed saying Patrick Collison (CEO of Stripe, net worth $2.1B; or his brother John, same net worth) pays his workers "unfairly". Stripe pays very well. But Stripe is a fintech company and only has ~2000 employees. It just so happens that being anywhere in fintech at scale reaps massive benefits. Why? Well, because you can power billions of transactions without employing millions of people.
We have more and more billionaires because you need fewer and fewer people to achieve things at scale. Billionaires never stopped paying their workers fairly, they just need to pay fewer and fewer workers to achieve the same work as software takes over meatware tasks. Humans need not apply.
Tbf, this is another argument for heavier taxation. Automation is going to further concentrate wealth in the hands of only a few, at the expense of millions.
From society you need the following five things for it to pump out wealth the way the US does:
India has a non-insignificant amount of billionaires for example (it's 3rd in the world): https://en.wikipedia.org/wiki/List_of_Indian_people_by_net_worth
India lacks a lot of "the advantages a modern, developed country offers them". What it does have in some places though is education and connectivity infrastructure. It's also a decent democracy where it's not terribly hard to start a company. And, there's no massive tax or logistical incentive in starting a company outside of india instead of in india. Of course, india has a massive, massive population. But massive parts of india do not follow the first two requirements (education and connectivity).
This list is more revealing: https://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_billionaires
Sorting by the 4th column (and ignoring any country with <5 billionaires), you can see for example, why is France so low? Well, France has huge logistical and tax roadblocks to starting a company. Sweden however is very high up because it has excellent education and connectivity throughout the country.
So France is doing great.
Billionaires are not a positive, they are a negative. That wealth/power should not be concentrated, but distributed.
I'm French and I can assure you France is not doing great. French entrepreneurs just create companies in the US instead, just as I did.
You can't just look at numbers and evaluate them without context. France doesn't exist in a vacuum.
Based on what evidence?
But evidently number of billionaires is something we should strive for?
Why is it better that the US profits off of France's very high quality and heavily subsidized education system by getting a bunch of French entrepreneurs who don't then contribute back to the French economy?
I'll tell you what evidence: I am in that situation. I'm French and I have Zero incentive to create a company in France rather than the US. France makes it hard, expensive and complicated. Thus, the companies I create are american, and I don't live in France .. wouldn't move back there.
I know I'm not the only one because I know a lot of French entrepreneurs exactly in the same situation as me. Millionaires, hundred-millionaires even. All tax money not being contributed back to the French system because of stupid reasons.
There's no reason to be proud of a low number of billionaires in a country. Not unless you can show that this is a sign of a healthy system rather than a symptom of a broken one.
The plural of anecdote is not data, dude. I'm asking for data.
So you continue to keep your French citizenship because...
On the contrary, it's on you to prove that this means the system is broken.
Because changing citizenships is not easy, and nobody's forcing me to drop my citizenship. Why is this a question?
YOU are making the assertion "a low number of billionaires = a healthy system". It's not on me to prove the negative, and quite honestly, it's not on me to try to even convince you of this either. But for the sake of clarity, I will rephrase it one last time.
I agree that wealth generally has a more positive impact when distributed rather than concentrated (I disagree it's necessarily the same with power, but I'm also not making the point that power is better one way or the other, so nevermind that).
However that does not mean a low number of billionaires means the wealth is automatically better distributed. It might. But France having a low number of billionaires may also just mean it has just as much inequality and more super-millionaires. It may also mean it simply has more inequality and less wealth. In my experience as a French citizen and participant in the French system, I can tell you it's the latter.
And to be clear, I'm very happy with my country of origin overall, but it's not doing great on this front, and I find it offensively foolish of someone with zero experience in that system to claim it is just because some numbers you like line up.
Fair on you to ask for data. I have none for you, and I have other things to do than work on a study to make a point in an internet argument. But do accept that I'm more qualified than you are to make assertions in this domain.
I'm also not sure taxation (without a clear plan behind it) solves the problem (but for the record I'm a huge Warren proponent so I trust her plans anyway).
Specifically, will the government necessarily use the extra influx of money on the lost income from increased automation? Or are we just talking about funding another warship?
This is where Yang's plan makes sense. The money gets redistributed to people.
Considering Warren's plan explicitly calls for cutting military spending, I'm going to say no.
As I said I'm heavily pro Warren. Have been since 2015.
Right, so why would you ask the question above?
Sure, but the CEO of Stripe didn't create that $2.1 billion worth of company by himself. Wikipedia says they have at least 2000 employees and I don't think it's fair that the CEO and his brother have $2.1 billion of net worth (yes I know a lot of it is stock) while the people that helped him create it don't have anywhere near that. How many of their employees have even 1 percent of that net worth ($21 million)? I don't think any CEO does 100 times the work of their employees.
Maybe not on a day to day basis no. But the brothers got those billions as founders, not CEOs. Founders take far more than 100x the risk that the employees take.
And how exactly would that money be better distributed within stripe? Should every employee essentially be a millionaire? Should the incentives be even higher to hire less people in order to distribute less money?
Look I think there's a lot of problems with billionaires in the US economy as well but I'm not as sure as people here are that them existing is a bad thing.
For example I think it's a bad thing they have the political influence they have. But I don't think it's necessarily a bad thing that governments can actually be challenged by something (given that the second-amendment based military challenge idea is nonsense).
This is actually a really interesting point, because it's quite key to the argument but fairly hard to quantify. Let's be a bit more realistic and say that the founder:employee reward ratio is around 5000:1 - do the risks match up then? What if the founder doesn't need the income to survive, but the employee does - is risk relative or absolute?
The greatest risk to a founder is being left with worthless stock after a company bankruptcy; the risk to an employee is being left without ongoing income in the same situation, although they may also be made redundant while the company continues without them. The only real differential in direct financial exposure is the opportunity cost on the founders' part: the compensation they took in stock instead of cash but could have taken in cash at another job - anything else is largely hypothetical value.
So now the question becomes: are the founders taking 5000x more risk by tying a portion of their future compensation to company success? I don't think they are.
For what it's worth, I've very literally put my money where my mouth is: I think the risk/reward ratio is dramatically better for business owners than employees, and I chose to be part of an early-stage startup. There are a lot of other reasons I'm here as well, we work in education and I genuinely believe in and care about what we're doing, but I'd be lying if I claimed that the possibility of financial freedom had no influence on me.
Also let's not pretend like they used their own personal wealth to start it.
They got seed funding from Y Combinator. So their personal investment was relatively little compared to VCs.
But you don't see people arguing why VCs deserve more, do you?
VCs did not get more than the founders in this story. And VCs only invested some amount of money, which they literally do professionally.
The founders invested their entire life into it. Just because you're not investing personal money (which many do) doesn't mean you're not taking massive risks.
They generally invest far more money than the founders ever could. That's my point. If we're going by the amount of money put into a venture, the VCs come out on top every time.
If you take millions in VC money because your hobby or private project might finally become a fully fledged product, you're significantly improving your life, not putting it at risk.
And if you're a company like WeWork, you personally invest a small chunk of change in real estate, then use the VCs money to pay yourself rent, then walk away with millions while the entire company collapses around you! Totally risky! /s
… but I'm not. Nobody is. VCs are like banks, giving out loans with different payment plans and collaterals. Nobody is arguing the banks don't make enough money.
People are gaming the system, yes. Of course. Every system eventually gets gamed. The people who game the system too hard eventually end up in jail (cf. Elizabeth Holmes for example). It's absolutely fair to want to fix those issues. But your comments have me believe you would trash a lot of the good and legitimate parts of that system in the name of "preventing" the bad parts, and you really won't be preventing anything because the "bad parts" will just find something else to game. They have a million times the resources you do already.
You want to strike at the root of the problem, this isn't the root of anything.
BTW, I'm happy to continue this conversation but you're (at least to me) coming off pretty hostile simply because I'm not embracing this idea that we should burn billionaires at the stake, so it's pretty frustrating to keep replying atm.
Does a founder really invest significantly more of their life into a company than a dedicated employee does, though? I can think of plenty of situations where employees move home or even city for work, put in hours way above and beyond the baseline, miss family events, schedule time off around company needs, answer emails in their off hours, etc. etc.
I don't think employees should do any of these things, but plenty of companies (often not even especially well paying ones) expect that they do. If we're talking about effort invested, I don't see how the number of hours in a week allows the founder:employee difference can be more than 5:1 or so, and even that's a stretch.
That stacks with the financial opportunity cost I mentioned a couple of posts up, and with any direct cash investment the founder might make, so it's not the whole story - but I'm still of the opinion that the employee is getting a raw deal here!
Do they?
They do.
Do they have a particular reputation for compensating well or is it just usual tech fare?
They don't pay exceptionally well but they pay well for tech work. And software engineering is a very well paid profession in the first place.
They treat their workers fairly. You could argue they could pay more I'm sure but it doesn't detract from my point which is that being a billionaire doesn't simply happen by paying unfairly, nor is that a requirement in order to be one.
Nah, I'm actually considering an offer from them which is why I asked these questions lol
Ah that's different yes. Ive not worked there but I know them quite well so I can answer a bit. I do recommend them, they seem to be a fantastic place to work.
Surprise surprise, libertarians like to spin left-leaning thought as bad without providing any reasoning why it's bad.
When the appeal to right-wing morals doesn't hit home instantly, their arguments fall flat. And it's kind of hilarious.
You just have to accept its absolutely ludicrous premise that rich people should have to pay taxes commensurate to the quantity of resources they control. Ridiculous!
Gasp
That's because implementing the majority of left-leaning policies would require more governmental power which Libertarians are firmly against.
Yes, but they need to do the legwork of explaining why it's bad. And that's also usually where they fall flat.
(apologies for late reply)
Yeah I agree, they do need to explain why, but that just becomes defending the libertarian ideology as a whole.
In the context of libertarians spouting opinions about Warren to other libertarians, I think it's fine that they are using their common line of thought without additional explanation.
Sure, the money doesn't disappear but that's not the issue.
The issue is that the health care is funded by a tax on billionaires, we might not have billionaires anymore, either because the money was taken away or they hid it and it's now owned by non-billionaires. You can run out of money from that source. There would need to be a different tax to fund it.
It's not whether we can literally afford it, it's whether the tax does the job. It's the same as if you funded it through a cigarette tax and people either actually managed to quit smoking or turned to smuggling.
We'd be funding things a lot differently than other countries though. If your argument is that we should learn from their experiences, maybe taxes should be based on what works for them too?
That's fair. I still think it'd be a good start, but I'm also a-ok with paying more taxes to fund universal healthcare myself.
Norway has a $1 trillion investment fund from doing the same thing us billionaires do. So is that a bad thing?
Maybe the real thing is that the US is a low taxes /low services country
The US could be there to... Imagine if the Gas tax were to be quadrupled from its current 50 cents a gallon. First we Double ($1/gal) for it to properly pay for road maintenance and to pay for properly funded and expanded metro development, Greener metro lines, bike lanes, double it again ($2) to pay for Wealth Funding
This gas tax funding of $1/gal would contribute 175Billion in investments
After 40 years the wealth Fund would provide $7 Trillion Annually to pay for a UBI for as long as the US were to want it. Without any additional tax revenue
I think we can look at other jobs and industries where there is a boom and bust cycle, casinos, and where future income should be considered
Back to the above US choice in low taxes
Mississippi Gambling Revenue and therefore taxes has fallen 31% in 2018 (tax revenue $234 million) vs 2008's (345 million) best year numbers.
If Mississippi had contributed it's taxes to a Sovereign Wealth Fund instead of using it as a Substitute to Government taxes what would the effect have been.
A year after gambling was Legalized in Mississippi, skipping the first years taxes, the state of Mississippi has received Gaming Taxes, Starting in 1994, a total of $6.3 Billion in tax revenues
If those same taxes had been invested in a Wealth Fund its current value would be ~$29.6 Billion
Of course this would have required Mississippi to create 6 Billion in alternate tax Revenues, and this is the stump speech Yang needs to create.
Because in 5 years when Gaming Revenues have dropped another 50% its time for Mississippi to be ready, and in this case you're sitting on a $50 Billion Wealth Fund. That can pay out $4 billion a year to its 2.9million residents or fund the government services instead of deep cuts
I find the economic arguments against the medicare-for-all debate to be disingenious at the best. Firstly, comparable healthcare systems already exist and are economically viable. Canada and the U.K. are two examples; you could look at Germany or Norway. It is a non-argument to state that universal healthcare is economically impossible.
Secondly, it is a question that is at an enormous scale. The healthcare industry, using a quick duckduckgo and napkin math, is an ~$30,800,000,000,000 in 2018 USD, using the OECD average, worldwide, yearly business. The problem is that capitalism doesn't optimize at this scale. Markets optimize internally. Theortically, an American could move to a country with universal healthcare, but that is an insane assumption to build a theory around.
Now, I will insert my dangerous idea; maybe removing the profit mechinism from the healthcare industry will save money. The healthcare industry has many different areas of specialization, and each firm in that specialization has a sales and HR department, managers and investors to payoff; none of these groups CREATE value. They may find profits, but profit is not value. If healthcare was nationalized in the US and the nationilized insitution wasn't run as a psuedo-business, all dead-weight groups could be either consalidated or eliminated entirely. The "price" of each healthcare good could also be a simple reflection of the costs to create it. Both of these changes have the possibility of drastically reducing the dollar cost of healthcare. Now, nationalized healthcare in the US is a BIG dream, but I would argue that it would be an economically advantageous policy.
Yes, we could do things like other countries but it seems like that would mean doctors, nurses, and other medical staff get paid more like other countries? Take a look at what they make in the countries you're comparing against.
Most of those countries also subsidize medical education at the same time. It's not so important to have a huge salary if you don't also have half a million in student loans.
Maybe so, but it will still be a big political fight to reduce their incomes so drastically. Politicians aren't preparing the general public for this by blaming insurance companies for the cost of health care, and it's not clear which side the public would take in a labor dispute.
If people want to choose wealth over healing, that's their prerogative. But they shouldn't call themselves doctors.
Not that.
If we compare the average GP OFFICE
Doctors Salaries in the US $210,000 vs the UK $130,000
Nurses at Doctors Office in the United States 6 vs in the UK there are 2
Total Nurses Salaries at the dr office in the US if $314,000 while in the UK its $50,000
Other employees in the office 10 in the US with 8 in the UK
So we can cut some of those administrative jobs, 2 or 3,and be on the same administration costs. But it's the salaries of the dr and nurses that have increased the cost of Healthcare in the US
But as of last year Medscape Physician Wealth and Debt Report 2018
I don't have a specific problem with generally lower pay for medical staff. Clearly, the rest of this first-world doctors are doing fine on the pay they are recieving.
The American system is a baffling mix of huge amounts of government spending, huge amounts of insurance spending, combined with poor quality for many people.
The US has very expensive healthcare. The US government pays more for healthcare than other governments. The US could have the English NHS right now and they'd be spending less.
But US healthcare is not very good. Life expectancy is lower for many people; there's massive over-prescribing across a wide range of meds (notably opioids), there's huge amounts of over-testing leading to harm, your meds are more expensive than other countries, a bunch of people don't have access to any healthcare other than emergency treatment, mental health treatment is either non-existent or overly restrictive, etc etc.
It's convenient to have a tag for the 2020 US election, but I'm not sure I like "2020 us presidential election". How about something like elections.usa.2020? Or more general elections.usa.presidential?
Maybe there's been some discussion about this before that I've missed.
I don't think this will work well in the USA right now.
I've lived in a country with healthcare for all. It is fantastic when it works like it should. And in most countries, it does work like it should. You can further enhance government healthcare with private insurance, if you so choose.
But in the USA, for as long as the rich control the levers of political power (lobbying, 'conservatives' that care only for the interests of the rich) I think government funded healthcare will not drive down costs in America like it should and will be set up to fail by the republicans when they get in power.
From the Megan McArdle's article:
I was surprised about the matter-of-fact glib "reasoning" based on "common sense", until I read her rationalwiki entry.
https://rationalwiki.org/wiki/Megan_McArdle
Now I'm no longer surprised.
Yep, the rich won't be as rich. And that's good for everyone.
Hmm, I think you missed the point. Even if it worked, you wouldn't have that source of funding after a decade, so you'd need another way of paying for health care.
Is rationalwiki reliable? I've been reading McArdle's column off and on for a while and she's usually pretty reasonable.
She's very libertarian/conservative, so as long as you take her opinions with that grain of salt, her columns are readable.
She was vocally opposed to Obamacare so it's no real surprise she's also against Warren's healthcare plan. She'd probably be opposed to any plan involving more government funding of healthcare.
Yes, I see her as one of the few conservatives worth reading. Particularly if you want to know what the conservative argument against a government health care plan would be.
They have only one argument on this topic, and it hasn't changed in at least 10 years.
Hell, Obamacare was the conservative argument about how the government should be involved in healthcare (via the Heritage Foundation)
They campaigned against Obamacare saying it was socialism, that there would be death panels, that it would cost eleventy bajillion dollars, etc. All of which turned out to be bullshit.
Then they campaigned for years on "repeal and replace every single word of Obamacare". When they actually got control of Congress, their replacement turned out to be...nothing. Just a repeal.
All they're doing now is trotting out the same bullshit arguments they used 10 years ago.
Conservatives in the US, when it comes to healthcare, are intellectually and morally bankrupt. I don't care what they think anymore.
Amen. Lest anyone forget, Obamacare was originally Romneycare.
It’s interesting that they can run on “repeal and replace”, but they never clearly described what the replacement would be. And we all knew it was really “repeal and then haha gotcha suckers” and then that’s I guess just it. It was always a lie that they would replace it. I don’t know, maybe my analysis is all wrong. But politics is infuriating.
So right now it's some kind of specter around rich people leaving? As if more wealth won't be created in their absence?
Nothing about these people intrinsically gives them the right to hoard wealth.
It's not that they will leave, it's that they'll move their assets so it avoids the tax, but they somehow still control it.
For example, let's say a billionaire starts a charity and donates everything except $990,000,000 for themselves. Or they divide it up among their relatives, or whatever. Or probably something more clever that their tax accountants come up with.
We already have a pretty solid understanding of the financial position of billionaires through their prior year tax filings, and any significant deviation from established levels of wealth should trigger alternative calculation formulas to preempt any manipulation of net worth year over year. They can't change what they've already reported, although there will be a concern 5, 10 years down the road when our lookback period considers only the artificially deflated net worth figures.
The single biggest hurdle we need to overcome though is passing legislation that returns significant funding to the IRS and counteracts Republican efforts over the last decade gutting that agency. As it stands, the IRS is too underfunded to audit tax returns of the most wealthy Americans when we need a unit dedicated solely to auditing those individuals to ensure compliance with a wealth tax (or any tax really).
Their charity must spend those funds on expenses related to the charity, not for their personal or business' benefit. The Trump Foundation was shutdown for this very reason.
The current gift tax limit is $15k per person per year. Anything in excess requires filing a gift tax return.
A lot of these loopholes have already been addressed, the problem is enforcement and allocating enough resources to the IRS to achieve higher compliance rates. From this article:
FWIW, I'm a CPA but not in the tax space. I think taxation needs to be completely rethought/recontextualized and that the (filing and financial) burden should be removed entirely from the vast majority of individuals. Unfortunately, those with a vested interest in a complicated tax code continue to lobby against simplifying it.
It tells you about income, not wealth. Whatever they spend or give away isn't wealth anymore, and the value of what they own can change. To figure out wealth you need to assess the value of their property. In some cases that's easy (bank accounts and stock in public companies) and in others it's a guess made by property assessors what it would go for. For land, the property assessors already do this, but for everything else, normally this is only done to figure out estate tax when someone dies. For a wealth tax it would have to be done every year. I mean, it's doable, but it's definitely going to keep a lot of professionals busy.
And if what they care about is power, maybe that works out fine for them? At these levels of wealth, it's mostly about power anyway. The money can be used to promote the donor's favorite causes. Getting billionaires to donate lots of money to charity sooner rather than later might be a very good result, but it also means there will be a lot of powerful charities and less revenue gets raised by the wealth tax.
That's not really a limit, though. You can give more, but it reduces the amount that's exempt from estate tax. It probably still would be worth it to give the money sooner rather than later since the estate tax happens once and the wealth tax would happen every year. I suppose the government could tax large gifts, though?
This is a whole new way of doing taxes and new ways of plugging leaks from tax avoidance would need to be invented, like has already happened for income and estate taxes.
Not entirely true. Without changing a single reporting requirement of the tax code, you could determine a significant portion of someone's net worth just through business tax returns. All LLCs, partnerships, and corporations have to report year-over-year balance sheets (see: Schedule L of Form 1065, Form 1120, or Form 1120S), and the wealthy commonly form these entities to shield from personal liability, preserve privacy, etc. in maintaining ownership of investment assets. That won't get us every checking savings balance, every yacht, every piece of art, or what-have-you, but their business entities alone will give us most of the overall picture. The IRS already knows how much Koch Industries says they're worth.
You are right to clarify for me there. $15k is the non-taxable limit. Not sure about taxing large gifts though. You could probably just move all the taxation in the annual wealth tax or estate tax rather than requiring a separate tax on individual gift transactions.
Absolutely. I don't dispute the likelihood that there will be loopholes in any future legislation, but I think my main point is that manipulating your financials to circumvent a wealth tax is not so easy because of the data points already available.
Good to know! I wonder about the relationship between net worth according to a balance sheet (which would give you "book value") and valuation, though, particularly for tech startups where they're not closely related? I guess a tax on book value would still work as a wealth tax, though.
Ooo ooo we're getting into one of my areas. I'm a forensic accountant in a forensic, litigation support, and business valuation practice.
You would be right, and another concern is audited GAAP financials vs. tax basis. For our valuations, we request/review both, prefer audited financials as primary inputs, and rely on tax basis if that's the only thing available.
There is a fairly simple solution though. What are tech companies doing a lot of as they grow? Changing their ownership structures, whether from soliciting new investment or compensating employees. Every time they do that, they pay a professional like me to issue a long report painstakingly documenting how we arrived at a value for the share, option, warrant, controlling/non-controlling interest, overall company, etc.
We have a sizable number of companies that order a valuation quarterly, and we're middle-market/semi-national, not companies you'd have heard about. None of their owners are wealthy enough to even be impacted by a 0.1% wealth tax (maybe by Sanders' plan), so I would be shocked if the businesses associated with the individuals/families of the 0.1% had not received a sophisticated valuation in the last 6-12 months.
But that's it. Just legislate it. You wouldn't even be adding another burden beyond producing a copy of that to the IRS every year. Might as well demand the audited financials of major non-public companies since they're part of what goes into the valuations anyway. Even though we're talking about business wealth, we can apply it on the individual level now that we know the value, ownership structure, etc.
Obviously, my whole discussion gets away from the issue of wealth not represented in a business, but this angle would get us most of the way there since businesses represent so much wealth. Then the IRS needs resources for enforcement.
Interesting. This is a different subject, but what do you think of Warren's "Real Corporate Profits Tax" proposal? Would companies start tax-optimizing the income reported to shareholders?
I hadn't done much research on that proposal because well, it's hard to keep up with all the plans put forth. Did a little reading this morning though. I can't even begin to form an opinion because of how esoteric and nebulous this concept of taxing book income is, but I do agree with the driving forces behind it of fairness and leaning on mega-corporations in order to fund major social programs.
Here are a few links I read through:
https://taxfoundation.org/elizabeth-warren-corporate-tax-plan/
https://www.dropbox.com/s/i2q4o7sk87232pl/Mills-McClelland-2007-TaxNotes-weighing-the-benefits.pdf?dl=0
https://tax.unc.edu/index.php/news-media/what-do-academic-accountants-think-of-senator-warrens-real-corporate-profits-tax/
https://www.reddit.com/r/Accounting/comments/bc5i9z/elizabeth_warren_has_a_novel_idea_tax/
https://old.reddit.com/r/investing/comments/bc25c3/democratic_presidential_candidate_elizabeth/
Keep in mind that the /r/accounting and /r/investing discussions will be biased against significantly altering the tax code for obvious self-interested reasons. I included them so you can see how quickly the complexity of this proposal spirals out of control with the ungodly number of variables to consider.
This is a complete divergence from the thread, but how much do you like your job? Forensic accounting sounds like an endless series of financial puzzles to solve, and so in my imagination this seems like my dream job. Is it mostly solving novel questions, or is it mostly doing the same sort of rote discovery each quarter?
I like it, and I don't think I will find anything better for me in the accounting industry. Still sitting in front of a computer at the end of the day, but I've found a great firm environment with relatively interesting subject matter. A rare combination.
Cases are pretty unique, which I like. Whether a fraud investigation or litigation support (think financial expert witness services), the case has its own story. A recent fraud example involved the CEO of an American subsidiary to a foreign company using company funds to bankroll his farm to the tune of $7 million. He was having the company pay large invoices related to his side business that could have been legit vendors for his employer and other invoices for completely fictitious vendors. For a litigation example, a city sued a private waste company that had a contract to pick up residential and commercial trash. They overcharged the city for some absurd period of time, like 14 years, and we wrote an expert report calculating how much the city had been damaged.
I came from audit then corporate where cycles repeated weekly or monthly and became overly formulaic. Now I'm sinking my teeth into months-long cases. Many of the procedures are similar in nature across engagements but tailored for the context of each one - unique set of facts, unique approach to the analysis, but relying on the same set of tools. Like any other accounting job though, a lot my time is spent wrangling people for documentation so we can complete our work!
That really does sound like my dream job. Thanks for answering my questions.
Where are you in the process of getting to that stage?
Oh, I'm not particularly close, I don't think. I'm running a small business doing bookkeeping with a heavy emphasis on providing financial and ops education. I'm not looking for an exit, quite, but I've been doing this for 13 years and am on the lookout for the next thing. So I definitely have plenty of work experience, but I'm not a CPA. It's more about knowing where I'd like to be heading than being able to start doing it next month.
Do you have an accounting degree? First thing I would make sure you're aware of is the hour requirements to sit for the exam. In most states, it's 24-30 accounting-specific credit hours and 150 total credit hours. Sorry if I'm preaching to the choir here.
A CPA is not technically required to be a forensic accountant though. My counterpart in another office has only the CFE - he came from an internal fraud investigation function at a major credit institution. That said, a CPA will help you massively by distinguishing you as a candidate and providing many more paths to the same end goal of forensic accounting, and you probably already meet the experience requirement for certification (usually 1,000-2,000 work hours).
Hit me up if you have any questions along the way. I'm very active in /r/accounting because I love to help people figuring out their careers in this industry.
No, my degree is in psychology, of all things. I certainly don't have the accounting credit hours, but the total hours aren't a problem. Reviewing the education requirements for my state, it looks like I would need to start basically from scratch with regards to the accounting classes involved. While the CFE does seem more immediately doable, I can see your point regarding distinguishing myself. Especially as someone who doesn't currently have an appropriate degree, I can see the possible difficulty in getting noticed.
Thank you again for your words. I've been thinking about next steps in a vague way, and talking to you gave me the kick in the butt to get me researching Master's programs and CPA requirements. I really appreciate your help.
You're welcome. You probably don't even need to enroll in a Master's program though. Many states require an undergrad degree in accounting, not just 24 or 30 hours. Read this for more info.
Master's programs are designed for people who already have an accounting degree but need more hours for the 30/150. It's not worth pursuing for any other reason because employers don't really care about them. This opens up your options considerably in terms of places you can enroll, but remember, you may also have to take foundational business classes, not just accounting, to satisfy the degree requirements.
Yeah, I'm starting essentially from scratch as far as appropriate class hours go. It's good to know that a Master's program isn't necessary as far as impressing employers. I'm not very good at being diligent in classes where I know most of the material, but given that I could save tens of thousands of dollars as compared to a Masters, I'll suck it up. Thank you again.
Each time you want to close some loopholes, Congress needs to pass another tax bill. This amounts to "we'll figure out how to raise more taxes later." It seems like a tax bill should be judged by what it will actually do, not what you wish it did.
But it is true that the government can raise taxes, so anything could in theory be paid for.
It's almost like laws change over time in order to combat changing situations.
Might as well not pass any new laws, right?
Uh, how about we avoid the cheap snark when talking about difficult judgement calls about complicated stuff that none of us are experts in? (Though, admittedly, there was plenty of that in the original article.)
So why contribute such snark as a discussion starter if you're not ready to face the logic that laws must change over time in order to combat changing tactics by bad faith actors?
If people just did what they were supposed to do all the time, we wouldn't need laws.
While it's true that laws can be changed, it doesn't mean you can justify any policy you like by using this as a blank check. It's not easy to get a bill through Congress, which means we are stuck with a lot of unfortunate laws for a long time. (This is also why a lot of detailed policy-making is left to the executive branch.)
"Can change" versus "cannot change" is an unreasonable binary distinction that eliminates ordinary judgement that we should try to get things right if we won't be able to change them easily later. Things that can change aren't all the same.
Hey, if the rich want to renounce their US citizenship because they value their ability to buy multiple yachts at the drop of a hat over American society, then tah-tah!
Yep! And they provided citations and sources!
Yea... Except for the US has a very progressive tax structure
So assume half of the top 10% emigrated to the Bahamas where there are no income taxes, in fact the only tax you pay is a vat
In 2015 the US received $1.48 trillion in federal income taxes
The top half of that 10% paid most of them
In the US The top 50% pay 98% of Income Tax Revenues
IRS SOI database
Medicare is cut. Bye... Maybe the military. The big problem with that is that 1.1 million middle class jobs are on the books there. Lots of small towns are supported heavily by the US DOD. Between overseas jobs and local bases
Medicare revenues comes from
We will need to increase the fica taxes another 3.8% just to have Medicare paid for the current enrollment. Not including next year's baby boomers
What about the eic? It is small but we're a trillion in the hole
Crazy thing is we want to propose the few pay for it while the middle class pays about $1,000 a year for it.
It's just that's not how the socialized medicine or social systems work in the rest of the world
Total UK public revenue
If we look at 2016 US tax revenue, including state city property and sales taxes
The Tax structure itself
Personal allowance 0 TAXES DUE ON
BRACKETS
1 Pound sterling equals 1.26 United States Dollar
The Slovak Republic, lowest in wealth inequality. The bottom 60% holds 25.9% of the nation's wealth and the top 10% holds 34.3%. a small country in the heart of Europe with a population of 5.4 million people, 46.2% of whom live in rural areas
In Germany, my choice, it's 14.6% of gross income split evenly by employees/employer