Re:Modelling a Wealth Tax: A Response to Paul Graham
by aveni on Wednesday August 19, 2020 @12:59AM
(#24207263)
Isn't this analysis orthogonal to pg's claim that the wealth tax is taking away X% of your startup equity?
Yes, if your startup is growing by 10% YoY your wealth is still going up even under the tax. However instead of you owning A% at the end, you only own <<A% because you've been selling equity every year to pay the government. Just look at your first plot between 1% and 3% tax. A delta of 2% tax results in losing 70% of your value.
Your post seems to suggest the idea "Since you're making so much anyway it's ok to take away most of it." Though of course there is a balance, I think this kind of trade would greatly reduce risk-taking and entrepreneurship.
Yes, if your startup is growing by 10% YoY your wealth is still going up even under the tax. However instead of you owning A% at the end, you only own <<A% because you've been selling equity every year to pay the government. Just look at your first plot between 1% and 3% tax. A delta of 2% tax results in losing 70% of your value.
Your post seems to suggest the idea "Since you're making so much anyway it's ok to take away most of it." Though of course there is a balance, I think this kind of trade would greatly reduce risk-taking and entrepreneurship.