[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?

[thfuran]

If you spend a month working all day every day on something and then you get paid 5¢, was that fair compensation simply because you're materially better off for having received it? BTW, I made $10,000 reselling your labor.

[runtime_terror]

Where are you getting this idea to at IPOing makes workers situations better?! Citation needed!

Most of the time these public companies do regular mass layoffs just to make their investors happy to do short term stock price manipulation so they can get a bump in their executive salaries. This happens all the time

Sure doesn't seem like an IPO makes anyone but the tops lives easier in my book...

[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]

We have more shit, that's true. And advancements in medicine have reduced child mortality and lifespans.

Worker wealth is absolutely not relative to the overall wealth in this country; that disproportionately goes to the top 1% (we're now at 1920s levels) and it's getting worse every year.

The average first home purchase age is 40 compared to the 20s then. Getting a college degree was free or cheap for many of our parents/grandparents, now it's mostly a luxury. Healthcare costs put people into permanent debt. Most people are struggling paycheck to paycheck.

Is your argument that life is all around better for the average person now because we don't tax the wealthy/let them accumulate most the wealth in this country?

[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.