Sorry for not tearing up.
I'd also point out that people's assets have gone up in nominal terms in the past few years, but for many that's not reflective of an increase in purchasing power. Much of that increase is due to excess inflation from the profligate overspending of our past two administrations, so the cycle currently looks like this: government prints money and causes inflation -> your assets are "worth more" -> taxman says "give me a piece of that" even though your real wages have fallen or have just barely recovered to pre-2020 levels. And of course, even if we index to inflation, that will necessarily hit the poor harder: food and energy are deemed "too volatile" to include in headline CPI, but as necessities, they comprise a larger part of poor households' spending and so inflation will hit them harder than the numbers suggest.
> You don't get to argue from the point that your preferred taxation regime is simply how things should be
Those two statements seem mildly contradictory.
Once the hunter demands water for meat it becomes an exchange, and is the basis of our capitalist society.
Taxes in that system would be more like 10 men who did not hunt or gather demanded you give them food and water or they would beat your face in.
This seems a little dramatic. Are the 10 men demanding food and water also building roads, cleaning the water, removing waste, educating children, protecting collective assets, or any of the other things that Governments do with collective taxes? If not, the analogy falls apart.
There is a problem with high taxes on earned income, but anyone complaining about the 15% capital gains tax has problems. The estate tax only applies to this who are very, very fortunate. These are not even earned. Again, if one hates his country, he can move to Dubai, Bermuda or the Glorious Sultanate of Brunei and enjoy their lifestyle.
I do understand that people in California get angry because the state is so poorly run, but most of the US has easily avoided the self-created problems of California and New York city.
Two places which produce an outsized share of the country's businesses and wealth? Seems like they are doing something right.
huh, what natural, physical laws are being broken? collecting taxes exceeds the speed of light or goes below 0K or something?
lmfao this is always, always, always the refrain
Which inevitably leads to the question: who should get the power to do that and why they, specifically?
The answer is, some form of government protects them. And that form of government is going to want it's tribute.
This doesn't answer my question at all.
Who should decide those limits, and why they? Who pics them?
Think of a thought experiment: A new city/town/state/country is getting started (let's assume peacefully somehow, this is a thought experiment).
Who gets to set those limits on democratic action?
One choice that comes to mind is everyone gets together and pics the wisest person in the crowd = representative democracy.
Another choice is the strongest bully in the group beats everyone up and sets the laws however he likes = dictatorship.
What other choices? And which one should be best?
I wasn't trying to answer your question. I was pointing out that your question presupposes that the majority has the power to enforce its will on the minority. It doesn't even consider the possibility that the majority having that power is not a law of physics, it's a social construct, and a society does not have to adopt it.
> A new city/town/state/country is getting started (let's assume peacefully somehow, this is a thought experiment).
Who gets to set those limits on democratic action?
Again, you're assuming that what gets started is a city/town/state/country as a political entity, with the ability to enforce its will on its residents, and then asking how that power gets regulated.
You're not even considering the possibility of a community getting started without anyone having the power to enforce their will on others, with everyone having to deal with everyone else as an equal, and nobody having any "governmental" powers.
Historically, such things have happened. For example, saga period Iceland went for several centuries without anyone having governmental powers. Some of the American colonies in the late 1600s and early 1700s--Pennsylvania is a good example--had effectively no one having governmental powers, since while there was nominally a "goverment", it had no ability to enforce its will on residents. These are "other choices" that your question doesn't even comprehend.
What happened in those cases? Historically, those societies did fine as long as they were left alone. What eventually ended them was outside interference. Saga period Iceland ended up conquered by Norway. Pennsylvania ended up having its regime tightened up by the British after the French and Indian War (as part of a general tightening up on all the American colonies).
> therefore we should set constraints on what the majority can do.
The constraints are supposed to be a constitution and time. In time, as people die and new people are born, the world changes. New people are in charge. They can even rewrite the constitution.
What other alternative is there?
> I'd describe your system as closer to mob rule.
“Mob rule” is just the pejorative anti-democrats use for democracy not going their way.
What’s a rule-by-rich-people pejorative? Pig-rule? Just a pejorative. Just as meaningless.
Anti-democrats don’t have rational arguments on their side. Therefore they have to invent specters of the pitch-forked mob who is killing babies in the streets, the desperate, unwashed…
But all of that begs the question: if the “mob” rules, why are they in the streets? With pitch forks? Desperate? Of course it is completely irrational. If the “mob” already ruled there would be be no mob because the average person would enjoy dignity and respect. Safety and security.
They would have enough means to appear upstanding. Like you know, those rich people who rule now or ruled in the past. Those who never had to excuse themselves for being part of a mob or being unclean.
But it’s clear that if you want people to be desperate and in the dirt then you also don’t want them to rule. That’s how you get a mob.
The state of nature is no property. Billionaires can't exist without a government enforcing their property rights. Why shouldn't they pay the entity that made it possible for them to accumulate their vast wealth?
The Constitution addresses this confusion in its' preamble. The role of the government includes law and maintaining order, but it extends further -
"We the People of the United States, in Order to form a more perfect Union, establish Justice, insure domestic Tranquility, provide for the common defense, promote the general Welfare, and secure the Blessings of Liberty to ourselves and our Posterity, do ordain and establish this Constitution for the United States of America.
But the preamble to the constitution isn't legally binding anyway.
> But the preamble to the constitution isn't legally binding anyway.
No one said it was, but the intent of the framers, at least, is very clear - the government should do things that promote the general welfare, not merely establishing rule of law and enforcing civil order.
It implies that it isn't something the government would be separately prohibited from doing, if they were otherwise allowed to do it.
Consider how the First Amendment works. The constitution explicitly gives Congress the power "To promote the Progress of Science and useful Arts, by securing for limited Times to Authors and Inventors the exclusive Right to their respective Writings and Discoveries". But if they tried to pass a law saying that you couldn't quote a politician to demonstrate that politician's hypocrisy or mendacity as a violation of the politician's copyright in their own words, that law would be unconstitutional as a violation of the First Amendment.
A binding requirement for the government to "promote the general welfare" should likewise e.g. prohibit the government from issuing no-bid contracts to politicians' cronies for the operation of Post Offices, even though the government is explicitly authorized to operate Post Offices, because corruption doesn't promote the general welfare.
If you wanted the government to have the power to operate a healthcare system then you should have to amend the constitution to grant that power to Congress, since they didn't have it originally. Or have your socialized healthcare system(s) operated by the states.
We use taxes because nature doesn't scale to towns of 1000, much less nations of millions. But that is not the state of nature.
i.e. you can't really "own" more land than you and your family can personally farm and extract rent on it without a state to protect your claim.
The government may indeed enforce property rights in a meaningful way, but it doesn't seem like it's doing this for billionaires.
> Why shouldn't they pay the entity that made it possible for them to accumulate their vast wealth?
If this were indeed a true description of how that process occurs, why are you so comfortable with letting the government "make that possible"? Where in the Constitution (or even common law) does it grant the government this power?
Exactly. The entire notion of their wealth is predicated on an elaborate system of law and governance! Otherwise, it's all just freaking numbers on a computer.
No, but assuming you are on Facebook's board / in upper management you can conspire with the rest of the board to get rid of Zuckerberg (possibly permanently) and share the company amongst yourself.
ARM China seems like somewhat close example of what can happen when there is no government willing to protect property rights. e.g. as long as he has enough local support a CEO of your subsidiary could just take over the entity and there would be nothing you can do about it.
IMHO we'd end up with some dystopian form of Cyberpunk style techno feudalism without strong governments regulating everything. Which in theory might be a good thing for the corporations themselves, just not for most of the people who are currently running them.
Yes, if you want to oust him and take over as CEO, then boards of directors have that power. But that's more about his job security. When he leaves, he leaves with just as much stock as he ever had, and in the case of some termination clauses in contracts for that stuff, he walks away with more than he walked in with.
With the government out of the picture, this doesn't much change. If the board of directors tries to confiscate shares or some equivalent (I dunno, withholding dividends? Does Facebook even pay dividends?), then their stock price tanks immediately. Somewhere down near $0. Their financing falls apart shortly after that, and pretty soon the company goes under. The punishment for some group stealing Facebook isn't government goons stepping in and bashing skulls, it's in the complicated structures that make it worthless just about as soon as it's stolen.
I think your Chinese example is quite the opposite of this. The government of China basically has to step in and allow ARM China to pull such a stunt, or it's impossible.
> complicated structures
I guess. But I just don't see how could the stock market (in its current form) or most of those complicated structures exist without governments. Of course it's a silly discussion since Facebook in its current form (including corporate and ownership structure) wouldn't be a thing without all of that.
> in the complicated structures that make it worthless just about as soon as it's stolen.
Facebook is still highly profitable, arguably without any government regulation it could be even more profitable. Why share any of that value with the shareholders who can't really sue you or do anything else? Sure if you did that nobody would trust you if you started a new company and were looking for investors (which is why Facebook wouldn't exist in the first place in a system that allows that) but that doesn't really matter if the government suddenly disappeared.
Not saying that Facebook's upper management would immediately try pulling off something like that it's just seems like the natural long-term outcome. Political/social instability is usually already priced in, so FBs valuation would collapse just because something like that became an option regardless of Meta's/FB's intentions. At that point the cost of "confiscating" shares or similar shenanigans wouldn't really be that high since being in direct control of the company would be worth a whole lot more than owning some theoretical share of it.
> allow ARM China to pull such a stunt, or it's impossible.
Why? What could ARM/Softbank do if their Chinese subsidiary decided to just ignore them while continuing to use their IP. Of course their whole business model couldn't exist in the first without any way to enforce contracts since the companies actually manufacturing the chips would just steal that IP themselves.
Billionaires absolutely depend on a very robust system of laws to maintain control of the giant corporations that they own. Zuckerberg couldn't even enter a Facebook building if his employees rebelled against him and the law wasn't protecting him.
Note, I'm not trying to single out Zuck in any way, just wanted to pick some billionaire tied to a well known corporation to make the examples simpler.
You have it backwards. "imaginary ownership of gigantic corporations" doesn't exist without government. The government doesn't "protect" Zuckerbergs shares, the government is the vehicle that gives Zuckerbergs shares value. Without the government Zuckerberg's billions is worthless.
In this fairytale world where Zuckerberg is somehow made a persona non grata, then all his shares would become worthless as he wouldn't be able to sell them, nor would he be able to enforce Facebook (the entity) to do anything on his behalf.
If a government won’t enforce others rights to property, eventually someone is going to form a government where everyone’s things are theirs eh? Since what other option do they have if they want to own something.
Notably, the biggest thefts seem to happen when they can convince people that the gov’t is doing it for ‘the good of the people’, and they’re ‘going after the rich people’, and then they can pocket it when no one is looking.
This is a reason why we need better anti-corruption legislation, an end of the "super PAC", much higher inheritance taxes with fewer loopholes, and structural reforms to fix a profoundly corrupt Supreme Court.
Also, a lot of what you’re describing seems like regulatory capture.
There's a ton of nuance there, sometimes intended to avoid certain negative consequences that feel like double taxation or that provide peverse incentives. But that's the general premise.
If you pay taxes on your income and then use it to buy something from me, I have to pay taxes on it too. That's my income now.
If my father paid taxes on something he earned that's his tax bill. When I get it, I have to pay too. That's my income now.
This is very clear and consistent. Outside of all the people with an interest in pretending otherwise.
Also worth noting that there's no state interest whatsoever in preserving generational wealth. Just none. The fact that kids have to earn their own money instead of a family coasting for generations is a good thing for the most part.
I appreciate HN is USA-centric, but over on this side of the pond it's nowhere near as simple as that.
> If you pay taxes on your income and then use it to buy something from me, I have to pay taxes on it too. That's my income now.
Except that companies - even one person companies(!) - generally pay taxes on their profits, not their total income or revenue.
- an indirect tax on the vast majority of goods and services
- borne by the final consumer, not by businesses
- charged as a percentage of the sales price and collected fractionally at every stage of production and distribution
- neutral, as the tax borne by the final consumer is the same regardless of the length of the supply chain"
And the final consumer of a good can also be a business, in which case VAT is still paid for that good. For example, if you buy a company car for use by your employees, you can't get back the VAT on that purchase (only if you buy a car to sell it on to someone else can you get the VAT back).
And, of course, given that consumers make purchase decisions based on the nominal price of a good, which includes the VAT, the market price of a good will depend on VAT as well. If an increase in VAT risks to push the price so high that demand decreases, companies can choose to reduce the price before tax so that the final price is low enough not to affect demand.
So, again, VAT is essentially a tax on all sales revenue a company makes. It's true that it doesn't apply to other sources of revenue.
Businesses collect it on sales to their consumers (output VAT) and offset any VAT they've paid to their suppliers (input VAT) and the balance is paid to the state.
As that taxation-customs.ec.europa.eu article states: "VAT is borne by the final consumer, not by businesses."
(Source: I've been personally registered for VAT, I've worked for companies who were registered for VAT, I've had customers who were registered for VAT).
We're commenting on a specific article written about the US tax system. The term "US" is in the title of the post I am commenting on.
Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets..
No taxes = No government = No excess (above subsistence level) accumulation of assets
(This is a genuine clarifying question, because I'm struggling here) are you suggesting that saving is somehow unnatural?
Depends on how you define saving. Hoarding perishable goods is of course a pretty natural behaviour but that only scales so much. Investment (i.e. owning more land or other productive assets than you can utilize directly yourself) seems pretty as opposed to communal ownership seems pretty "unnatural".
Not that I'm somehow implying that "natural" (whatever that really means, since using violence and coercion certainly seems like natural human behaviour) is somehow always superior to the opposite.
That's a great point.
But note that you also cannot arbitrarily jump so far back in an implied chain of premises as if to suggest that you've somehow build your own (suspiciously libertarian-leaning) argument from first principles. For example:
> The state of nature is no tax
Well, the state of nature is also tribalistic. But imagine someone making an argument that collectivizing the farm in question is right because the state of nature is humans living in a collective.
You'd rightly reject such an appeal to nature in that case. Therefore, you should reject your own appeal above.
I don't mind if people get mad when anything more than that is taxed.
You're doing it again. You're assuming that it must be a just tax. You're assuming that a tax is somehow intrinsically "owed", that any tax requires no justification.
They owe taxes? They can pay them. They can afford to pay them because they have inherited assets. "Oh no, they're gonna get a diminished inheritance. What a disaster." I'm not getting one, and neither are most of the people in the country. They'll still have their inheritance, they just won't have the land. And they aren't entitled to it if they don't have the money to pay their taxes.
I didn't say taxation is theft and would rather you didn't put words in my mouth. You're assuming I'm against any form of taxation whatsoever on a moral basis, which isn't actually true. I think there are values reasons (most of us actually like the idea of a family business staying in a family, not getting sold to private equity) and moral reasons why we should continue resetting the tax basis of inherited assets. As a compromise position, I think it would be more reasonable for you to suggest removing the stepped-up basis but not counting inheritance as a taxable event.
A family is not a single entity under any law in any country I know of. Certainly not in the USA or anywhere in Europe.
The difference is the kids have been spending estate money and have access to all the assets the estate controls. It make no sense that would change because a member of the family died.
We do have the odd exemptions like Clarkson's Farm which was bought partly for inheritance tax avoidance, but you don't have to do that.
And that's how it's done in many parts of the world, works perfectly fine. There's really no reason to step up basis except to provide that loophole, which is probably exactly the reason it's done.
The estate tax already means that the estate of a person who dies may need to sell / divide / split stuff to pay the government. There already is no fundamental protection for an asset passing unscathed from a parent to a child. I don't see how not stepping up basis qualitatively changes this.
And your argument of "you want a child to be able to inherit a family business / house and keep the family business protected" is incredibly axiomatic and the antithesis of a tax. While it's inherently consistent, you're making the same general argument as "all taxes are theft".
Yes taxes may be theft in one view, but under our current society, raising revenue for the common welfare is also a virtue, so we can't have have it both ways.