[sillysaurusx]

pg has an essay addressing exactly that: https://paulgraham.com/inequality.html

The problem is that when you cap earnings to $100m, most investors lose motivation to invest in startups, because their investment isn’t likely to yield a reward. Unless you think all investments should be less than $100m, this kills large investment rounds. That would have killed OpenAI, for example, since their recent round was larger.

In other words, it’s fine to say “you can only earn a hundred million dollars.” The hard part is implementing it without killing the investment ecosystem. Every investor is chasing the big return that covers the 20 investments that didn’t pan out. If that big return is capped, there won’t be investment, and hence no startups.

[yunwal]

I don't understand. Just because one person can't own 100 million doesn't mean an investment firm can't make a 100 million dollar investment and make returns on it. Those are 2 different things. The firm is managing the money of multiple people.

[sillysaurusx]

And when one of those people breaks $100m, does the excess money go to the firm, or to taxes? Or are you saying that a company can have unlimited money, as long as the shareholders don’t extract more than $100m over the course of their lifetime?

The ultimate point of money is for someone to have it. And since corporations are owned by people, it’s not enough to say that corporations aren’t bound to the $100m cap. Otherwise people will just hoard money using corporations, and take loans against their value, a bit like how it already works today.

What counts as $100m? If you buy a million dollar house, then sell it a few years later for a million dollars, are you now limited to $99m since you already spent $1m? Does the money from selling the house go to taxes, or to you? If it goes to you, what’s to prevent someone from hoarding equity and only taking out $100m at a time, effectively living the life of a billionaire while keeping their balance under $100m?

If you own some stock, and it rises in value to $150m, you forfeit $50m to taxes, right? But then if the value of the stock goes down by half, would you have $75m or $50m?

And if the answer is “you have $150m, the cap only applies when selling stock,” then what stops people from putting the money under the custody of a business (which you said isn’t bound by the cap) and then taking loans against that extra $50m?

These aren’t contrived scenarios. Stock goes up and down all the time, and it’s important to be clear about how the proposed system will work.

I’m genuinely interested in answers. It’s easy to say “just cap someone’s wealth at $100m,” but people seem to shy away from proposing specifics.

[bubblegumcrisis]

Don't let the perfect be the enemy of the good.

Yes, divestment.

Sure you must pick a point in time. But no matter. This is what we all do on Tax day. This how home owners pay property tax.

There does not need to be an exception for stock.

This argument you make, as if "but who can say how much it really is worth?" Sure. Just like a house. Somebody builds a freeway right next to you, guess what, your house is not worth as much as it was yesterday.

Your argument, "but you can hide your money in a company." Actually, this is good point. Perhaps companies shouldn't be allowed to hoard wealth, then buy up their competitors in order to skew the market.

Maybe this is a problem. Maybe we wouldn't the google/apple phone duopoly, maybe we wouldn't have Meta owning Facebook, and Whatsapp and etc, and all this AI, if they weren't able to hoard cash.

Maybe there should be some law that says, the maximum a company can pay the top is 100 times what they pay the bottom, including the janitors.

There are lots of solutions. If you stop trying to defend some random human having the wealth of a god, it's easy to come up with many, many ideas.

Instead of say, "but this, but that", say, "what if we tried that."

[sillysaurusx]

I appreciate the response.

The trouble with economics is that if you get the incentives slightly wrong, people will relentlessly exploit the difference. So when I ask "but this, but that," I’m asking "have you thought of this exploit or that exploit?" Because unfortunately you can’t just ignore that they exist. Each of them needs a concrete answer, or the system will reward those who exploit it. (You can argue that’s true for the current system too, but at least it’s hard to exploit. The loopholes I listed above are all straightforward.)

[bubblegumcrisis]

You miss the point.

Instead of, "but this, but that," you say, "what about this?"

You use your considerable brain power, to, instead of finding faults and leaving it there, you suggest something better, that you believe can accomplish the overall goal. The overall goal, I believe, is fixing wealth disparity before violence becomes the only answer.

In this manner, we come to some solution that benefits society, rather than keeping the status quo which is obviously, without doubt, broken.