A lot of wealth is parked in shares of companies. I'm not sure to what extent that is actually productive...?

I'm confused by this statement. If I buy shares from a company, that company has more money to spend on growth/bonuses/whatever. If I buy shares from another person, that person has money to do things with. I don't see how there is even a thing such as "parked in shares of a company"; it doesn't park there, it is immediately available for investing in other things.

Now, the money could sit in the bank, sure. But even then, the vast majority of the money "in the bank" is actually being lent out to other people, who spend it.

So unless the money is literally sitting in a vault, it's not "parked" anywhere.

I'm very open to being corrected here, so feel free to do so. My understanding of economics is decidedly limited.

Yes, so many people seem to think that billionaires are some living version of Scrooge McDuck, and their wealth is vaults full of gold coins under their houses, and they swim around in the coins before breakfast every morning.

Even then: if you take money and squirrel it away long enough in a vault then the market is essentially going to price in whether it thinks you are likely to spend it in the near future and effectively deflate the currency a bit to give everyone more buying power... like, imagine if you instead took money and literally burned it in a fire, and then try to figure out the statistical difference on supply and demand over the next five to ten years between money burned in a fire and money whose primary purpose is as a trophy swimming pool for an aging duck.

>> A lot of wealth is parked in shares of companies. I'm not sure to what extent that is actually productive...?

This is a YC-affiliated/run discussion forum. I think I speak for many entrepreneurs (former or current) that: investing is really, really important.

Investments from VCs (and form their wealthy LPs) makes entrepreneurship something that normal people can do (as opposed to only something rich people can afford to do.)

For many of us on this site, I suspect that actually contributes to our salaries.

Either directly as VC capital or indirectly via public ownership. If billionaires suddenly couldn't own public companies, stock prices would drop and we'd likely see layoffs.

And maybe that wouldn't be such a bad thing. How many of us are doing things that in a broad sense serve to benefit humanity, and how many are basically pushing ads and social-media addiction?

It's paying the salaries of those employees at those companies, so in what sense is it "parked"?

What do you mean by “parked” in shares of a company? Shares of a company is literally owning a part of a company. You wouldn’t say you parked your money if you bought a business

None, none at all.

The government could, for example, issue loans at minimal interest rates to smaller businesses.

I'm pretty sure they've been doing that for years now, and it has been helping to drive inflation.

A wealth tax wouldn't change that. No billionaire is going to sit around and watch his $1B fortune be whittled away in 5 years by a 20% tax. Instead he's going to divest -- he'll put the money into other companies or charitable foundations.

You statement makes it sound like they aren't currently doing those things already. Can you point to some data that shows they aren't donating to charities and aren't diversified? I can understand if someone like Bezos is highly invested in the company he founded but overtime he will be like Gates and hold a small portion of his portfolio in Amazon and the rest broke up across many companies and charities.

Then I guess a wealth tax is not needed, billionaires are already giving away all of their money or starting new companies through direct investments, so they're no longer billionaires.

If you have a billion dollars and you invest all of it, you're still a billionaire (unless your investments tank). No billionaire keeps all of his money in cash.

If a wealth tax isn't going to change anything, then what's the point? Do we really believe that billionaires are keeping their money in scrooge-mc-duck-esque vaults rather than investing it in diversified portfolios, and that only a wealth tax (rather than the promise of returns on investment) will force them to invest?