[azan_]

People should realise that they will be the ones paying for it. Prices will increase a lot. People need to be aware of that. Personally I'm okay with that trade-off. Also corporations - when checks and balances work properly, which is frequently not the case unfortunately - are great and net benefit for humanity.

[runtime_terror]

I wonder what would happen to costs if we had a 90%+ tax rate on the ultra wealthy... maybe if all these record profits were instead funneled back into society everyone would be better off AND prices would drop... a system like this would be good for society it seems... we should come up with a good name for that system, tho...

[azan_]

I think its pretty naive to thing that it'd work this way. It's really bad idea. If someone has company that debuts on stock market, and stock price increases let's say 100x times, who is he funneling the funds from? I'd say it's not funneling but creation of wealth, economy is not zero-sum game.

[thfuran]

If someone has a company doing an IPO, it’s extremely unlikely that the company was so small that one person did all the work. Why is it a given that one person should retain nearly all of the proceeds of the sale? To answer your question, that person is funneling funds from investors who are expecting returns derived from the labor provided by the undercompensated employees.

[azan_]

Ok, let's follow that logic. If IPO makes CEO much, much richer but generally also makes company and workers better off (but to smaller degree), does IPO make workers more undercompensated? Nobody lost anything for the CEO to gain. Also is "funneling" (that's an interesting choice of word) investors money into company stock a bad thing? Why would it be? I'd say it's a very, very good thing and it's in almost always 100% voluntary to buy stocks.

[thfuran]

>If IPO makes CEO much, much richer but generally also makes company and workers better off (but to smaller degree), does IPO make workers more undercompensated?

Yes, obviously. The bulk of work of the company is done by the workers. That is to say, most of the value is generated by the labor of the workers. If a commensurate share of the profit is not returned to the employees, they’ve clearly been undercompensated.

[azan_]

How is it obvious? In that scenario, companies should avoid IPO even though it makes situation of workers better?

[Marsymars]

Presumably there's some level of progressive taxation where the top rate is between 0% and 100% that most helps the median person.

The problem is that people with power are largely incentivized to push this rate lower than the optimal-for-the-median-person rate in order to benefit the wealthy at the expense of everyone else.

[paulryanrogers]

US had tax brackets in the 90%s for decades. It was part of a golden era for workers, for that and a variety of other reasons like strong unions.

Of course the rich tried to work around it. But culturally they also understood that paying a lot of taxes was considered their duty to society, especially in times of crisis.

[quantummagic]

This is a lazy idea that keeps getting trotted out. The 90% tax bracket only existed on paper, with an effective rate closer to 40%. Economists have shown that tax revenue remained remarkably unchanged, while having negative consequences for investment and productive use of capital. Instead, the relative prosperity of workers during that time came from a lack of global industrial competition and a massive post-war manufacturing monopoly. Without a completely sealed, loophole-free tax system and total global compliance, implementing a 90% tax rate today would simply result in widespread tax avoidance, capital flight, and a reduction in domestic investment. The rich do not make the bulk of their wealth through a salary (many taking $0 / year) like they did back then, but rather through stock options, etc.

[paulryanrogers]

If the higher tax rates were so ineffective then why was the divide between the richest and the workers so much smaller?

Do tell, what is the effective tax rate that the rich pay today?

[azan_]

If lower tax rates are so bad, then why are workers nowadays much, much richer than back then?

[runtime_terror]

The top 0.01% payed an effective rate of 50-75% in the 40s. That is drastically higher than today. Just because the wealthy found ways out of the full 90% doesn't mean the taxation rates were a huge factor in the standard of living then.

Were there other factors? Absolutely but it's disingenuous to claim there was no difference in tax policy now vs then.

> widespread tax avoidance, capital flight, and a reduction in domestic investment

Do you not think the US has the capability to enforce their tax laws despite these efforts? It absolutely gets its tax dollars from foreign earned income, it can penalize such tax avoidance strategies (these companies operate in the unite states after all).

> The rich do not make the bulk of their wealth through a salary

Yeah, because it's a method to avoid taxation obviously. That's why we need to tax loans against assets ("buy, borrow, die") and increase capital gains to be at least above that of labor.

It's so incredibly obvious the wealthy do whatever they can to avoid taxation. Why are you so dead-set on furthering their agenda?

I'm curious, what's your solution to wealth inequality or do you think we should just let the super wealthy return to the robber barons/kings of yesteryear?

[runtime_terror]

What are you even talking about?

So if someone (you mean an entire, large company with many employees) offers public shares and people buy them, then what happens in your mind? I'm genuinely curious.

If I, this newly IPOed founder, 100x my company, now my paper wealth has 100x correct? Now, with that wealth I can follow "buy, borrow, die" so I pay near 0% taxation on these shares. Then, when I do need to liquidate some of my wealth I just pay capital gains. I pay myself $1y in salary so I pay no income tax. I now am 100x wealthier but pay little to no tax on that wealth while all my employees pay 30%+ on nearly every dollar they earn via their salaries.

This seems a bit... unfair... don't you think? The employees of this now very wealthy persons company are required for his wealth to continue but they pay at least 2-3x the taxes on a per dollar basis. Add to that the corporation also probably pays a 0% tax rate.

A reasonable bare minimum would be to make sure the wealthy and the companies they run pay their fair share in taxes as everyone including these companies benefit from the systems that taxation pays for.

It's amazing how many people are falling for billionaire taxation propaganda despite how blatantly obvious it is now...

[quantummagic]

You would get some version of the Soviet Union. Where all the rich people would be connected to government rather than industry. And industry would become enfeebled and unable to produce efficiently, and the average person would be much poorer than people currently are in the USA.

[runtime_terror]

Wait, you mean like how all the rich people work for the US government, own all its popular media and pay near 0% tax?

I didn't realize the US was the Soviet Union, how ironic!

[quantummagic]

Thank you for making my point, even though you thought you were doing the opposite. The government is bad already, we shouldn't be making it worse with stupid irrational policies.

[FridgeSeal]

Prices are already obscene, and we’re all being ripped off.

I’d much rather pay the prices corrected-for-supporting-livelihoods, than the artificially inflated prices used to line the pockets of the rich.

[azan_]

> I’d much rather pay the prices corrected-for-supporting-livelihoods, than the artificially inflated prices used to line the pockets of the rich.

But unless you do central planning (which doesn't work) you can't really separate these two, can you?

[nonfamous]

>> Prices will increase a lot.

Citation needed. Very little of what we buy today as a consumer are commodities whose price is determined primarily by the cost of production — and even then labor costs are rarely the most significant cost.

Most things we buy are priced according to what the consumer is willing to pay for it, and the balance sheet of the companies that sell most of the things we buy show there’s a lot of wiggle room there.

[azan_]

> Citation needed. Very little of what we buy today as a consumer are commodities whose price is determined primarily by the cost of production — and even then labor costs are rarely the most significant cost.

Services and goods where lots of human labor is required get much more expensive with larger cost of labor. E.g. fast-food, food delivery. And there's nothing wrong with that of course - I'd rather pay 2x more for delivery than have people working on wages that are not enough to even feed them.

[paulryanrogers]

If labor costs are so high and such a large portion of production then how can companies afford to funnel so much money to executives? Hundreds and even thousands of times more than their cheapest workers? Often to the tune of millions and now billions?

Surely there is more slack in the system than the Epstein class wants to openly admit.

[azan_]

If you don't want discussion to turn into cesspool, I suggest not using terms like "Epstein class".