kshri24
The only thing we need to do now is not second S. Companies who build first S, while letting companies keep their data within their own walls, are going to be future winners. In other words, we are returning back to pre-SaaS era but allowing flexibility of Companies to run first S on their own systems (actually run it on their own systems and not via a VPC).
Even what the OP posted is bound to fail because Companies have realized the value of the data they hold, especially in this AI age. They are not willing to part with their data as easily as they did before (see how many companies are wanting to move over from traditional ERPs to SaaS/Cloud ERPs. many are not willing to upgrade).
Then you are not making any income. You have a locked investment that is not performing. So why should you be taxed for that? If anything, you are losing by keeping the investment locked. Even opening a fixed-deposit in the bank will get you from 2% to 15% depending on your location. Money not growing or in circulation is dead money.
By the way, that investment was only possible if it had already been taxed in the first place. You don't get a million dollars to invest in some stocks without it being income that was already taxed. No one is giving free money here.
> No, I'm indicating that the avoidance of an income is specifically to avoid tax, not because of an inability to produce an income.
Can you explain with a concrete example? What you are saying here is not making any sense to me.
> Both Norway and Switzerland has a wealth tax still. The only reason other countries rolled it back was just a bidding war for perceived investments, in other words tragedy of the commons.
Both have really tiny % (0.65% to 0.75% in Norway and 0.1% to 1% in Switzerland) which is what I explained here as well: https://news.ycombinator.com/item?id=50275757
If you are charging that low wealth tax might as well just increase corporate tax as you will get much more revenue that way.
In fact, the revenue generated by wealth tax was so less that Switzerland tried to introduce a really draconian wealth tax that was rejected by the voters just last year: https://finance.yahoo.com/news/switzerland-rejects-50pc-weal...
You cannot do that with private companies. It is only restricted to public securities. And even these are not owner/investor stocks (which are locked for a certain period after company goes public via IPO). These are typically fresh stocks issued before company goes public.
> This is not a universal truth.
What is the evidence for it working otherwise? Every Country that has tried Wealth Tax has rolled it back.
> A lesser gain is not a loss.
It is not a capital gains tax (which already exists). Wealth tax is a tax on unrealized gains. It definitely leads to erosion of stock value.
> 1) Why not. 2) Sounds like someone needs an income (which is already taxed and would have solved much of the tax avoidance).
You have just encountered a classic Catch-22 here. Without income, you cannot pay tax. Without paying tax, you have no revenue and hence no income.
If you impose a wealth tax on this, which side are you imposing it on? Company or individual investor in the company? You cannot impose a tax on what is technically a liability on the company's books. So you would have to impose on the individual investor. Lets try with an example: assume the wealth tax is 10%. Lets also assume I hold 5 million common stock, pre-seed, in a startup I founded (45% equity). How would the stock be valued? It should be zero. So I pay zero wealth tax. Then I get an investor onboard, who invests say $1 million at 10%, valuing the company at $10 million. Lets assume, because of this capital infusion, my equity gets diluted to 40%. That means I am on paper worth $4 million. I immediately owe 10% of it or $400,000 to tax authorities. Without having made a single cent in revenue. My co-founder would also owe $400,000. We have no money of our own except to use the investment money to pay the taxes. That is $400,000 + $400,000 = $800,000. We are left with only $200,000 in the bank. Before we even started the company.
You might say 10% is too much. Lets reduce the wealth tax to say 1%. Or even 0.1%. Then the entire idea becomes meaningless. Might as well just charge extra corporate tax.
> And I don't have the option to sell partial shares of it
Sure. But you can always rent it out and move to a smaller rental. And it is a good thing you cannot sell partial shares of it. You shouldn't. Imagine selling partial shares/stocks every time you have to pay tax on stocks. You will end up with nothing in a few years.
> Are you saying the bank interest would be higher than other investments minus tax?
It absolutely will. When you tax stocks, you are eroding its value. Why would anyone want to continue to keep their wealth in stocks when they could just cash out and not lose any of that value?
If capital cannot be taken out of country then it can be put in assets mate. I have explained that scenario already.
> If a few dudes control most productive forces, that is inherently antidemocratic. No amount of trying to pay off the public with some elaborate scheme that doesn't remove their control will fix that.
Then have more dudes controlling most productive forces. You have anti-monopoly and antitrust laws for that exact reason.
> If the only reason somebody opens a company is greed, then maybe that company would be a net-negative for society anyways?
It is not greed. Money is a by-product of success and follows success wherever it goes. You cannot dissociate the two.
> Of course UBI is an allowance. You can't just say it isn't without making an argument
It really isn't. It is the same argument as utilities. You individually haven't paid the full amount for construction of road network, bridges, electric grid yet you don't consider it an "allowance" do you? You believe you have contributed your fair share. Yet you still enjoy these utilities wherever you are and for life by only paying for how much you use it. UBI is the exact same thing. Instead of giving you in the form of utilities, you are getting money which you will reinvest back into the economy by choosing what and from whom to buy. Both are assets being dispersed by the Government.
> We cannot claim to live in a democracy while Elon Musk gets to decide whether our allies can use communications or close down entire branches of government.
This can be fixed with laws around lobbying.
> capital controls for the more near-term issue
Capital controls won't solve much because it is a one time exit tax that stakeholders have to pay to move out of the jurisdiction taxing stocks. Those who cannot move will shutdown their companies and invest those proceeds into assets, typically immovable (like land/houses etc), which will drive housing prices up. It has cascading effects that affect the economy in a different way.
> You dont need incentives for the rich. You can just pass laws limiting their options.
You are missing the point. The incentives are for everyone who want to give it a shot at trying to take their idea, implement a vision and then execute on it. Does not mean they will succeed. The tiny percentage who do succeed end up becoming rich. See the number of startups that succeed vs those that failed. You are not disincentivizing the rich by imposing wealth tax. You are disincentivizing the average Joe who wants a shot at making it.
If you tax stocks, the rich will have no incentive to keep their money locked-in. They will encash and exit to a jurisdiction that allows them to invest their proceeds into stocks again. Lets assume a hypothetical scenario where all jurisdictions impose a tax on stocks. Then they'll retire by investing in assets or heck just keep it in their banks.
What you are asking for won't work in a capitalist society (which is pretty much every society on Earth). The only way out is UBI.
Edit: Again, stocks are not financial Assets.
I don't recall Western pundits saying it is smart statecraft when China erected the Great Firewall.
> Preventing your government services from being dependent on a geopolitical foe is not protectionism.
That is exactly protectionism.
> Protectionism is an economic policy where a government tries to protect domestic businesses and industries from foreign competition
This is exactly that.
You losers had 200+ years to fix India however you wanted, since you ruled over it. Instead turned it into a shithole before leaving. Last thing we Indians want is to take your worthless, unasked for advice. Piss off.
If it requires creating a pathogen or a bio-weapon to scare the masses into demanding regulation, be rest assured that such a pathogen/bio-weapon will be created. Anything to safeguard shareholder interests. Even if it means a few million dying.
Even if I go by your calculation of US imports being 3.4% of global GDP, it still affects the remaining 96.6% which are forced to adhere to those viral regulations purely because they are interacting with the unit that also exports to US (even if those exports form a tiny % of their overall exports). For example, I might only sell to Indian companies as an Indian. But if I want to sell to an Indian company that exports to US, I would be required to get SOC Type-2 certified and maybe even HIPAA certified if I am delivering software that is going to be bought by the exporting Indian company. Even if there is no direct utilization of that software in their US specific exports. Remember that the regulation is not targeting pipeline of product development (from raw materials to final production). It is targeting the company as a whole! SOC Type-2/HIPAA are regulations at the Company level. This should be illegal and challenged in some International Court but which country is willing to take on US? For established companies it is a tiny price to pay to be compliant. For startups, it is make or break.
> Viral effects can be countered by local laws, and local sentiment; sentiment is pretty US-hostile these days, and also pretty AI-hostile.
How do you counter it with local laws? Lets assume local laws prohibit viral rules/regulations of foreign nations from overriding local laws. That will make the entire Country isolated from competition. US companies won't have any problems finding vendors from other Countries. It also has second-order effects of other Countries refusing to do business with your Country because they have to uphold the virality of their certifications. This is an indirect sanctions regime if you think about it. You are basically forced into this system against your will, without you ever voting for it, purely because you are part of this global inter-connected system. It will only work if ALL countries of the World decide to not adhere to it.
> Indeed. I strongly suspect this is already underway, though the ships of state are famously slow to turn. After all, Trump was one misjudgement away from starting a war with the rest of NATO earlier this year, and I don't think the leadership of all other nations have forgotten this (hard to forget when he keeps posting memes that put the US flag over 4 other countries' territory)… though they also understand his personality and will make moves congruent with manipulating him in the meantime.
Yes this is actually the only practical way to create leverage. When USD loses its shine, it makes it harder for US to import, which can be used as a tool to force US to rescind such ridiculous laws. USD is so strong right now that US can import everything for cheap. That has to flip. That can only happen if Countries create alternate settlement mechanisms and USD loses its status as global reserve currency. That will cause downward pressure on the USD and with USD weakening, it will cause their imports to become really expensive. Then they will be forced to come to negotiating table (much like Plaza Accord) loosen some of the insane regulations that they have put in place in exchange for Countries devaluing their currencies so that imports become cheap again for US consumers/companies.
Oh they definitely can. Irrespective of whether you are living in US or not, you still have to get yourself various certifications (take for example SOC Type-2 or HIPAA depending on your business category) to even become vendors to US companies or the US Government. If the US Government decides that all companies MUST use "safe AI", no company can use any other model other than what is decided by US Government. And that has a viral effect on the entire supply chain.
If you don't want this scenario to happen, where you are held to ransom by US Government, all middle-powers have to de-risk and diversify away from US dollars as reserve currency. That is the only way you can bring in some balance of power and leverage. There is no other way.
What we do have is not just regulation that acts as a moat, created by established players, to keep out smaller competitors, but also regulation cleverly crafted by peer established competitors who attack one or more aspects of their peer competitions business. Why do you think big companies find it difficult to compete with startups? Because they are not just bogged down by hierarchical management (which itself is a result of regulations) but also because they are spending resources fighting frivolous lawsuits, patents, and adhering to crazy regulations created and lobbied by competitors. Companies are consistently in a fight or collapse mode. Startups are insulted from all that until they have to go from survival mode to growth mode, which would mean they will have to start adhering to "regulations" and that would mean raising and infusing pointless capital just to hire people for useless positions or follow "procedures" so as to satisfy the regulator on paper, so that they can get the required certification needed by enterprise vendors to sell their product/service. With the eventual goal of either going public and becoming an established player (who will continue playing the regulatory game) or get absorbed by a bigger established player.
I wish someone could create simulations where there are absolutely no regulations and how the World would fare in such an environment.
Not enough representation of World religions and philosophies.
Just wanted to add to this. Modi came to power in 2014 mate. He has been leading India for just 12 years. If you had come to India in 2013, you would have seen how bad India was back then. If you had visited all the countries and their cities you named, they were ALREADY developed in 2013. Heck they were ALREADY developed in 2000s. You are comparing a DEVELOPING India under Modi with cities/countries ALREADY developed in early 2000s.
> Have you been to China? Taiwan? Singapore? Thailand? Vietnam? Republic of Korea?
Indians are one group of people who frequently travel the World. Infact we are EVERYWHERE. To the point where Countries have to impose restrictions on our entry. We know how other countries have progressed and how much they have developed. We are not stupid. We don't need Europeans to tell us that. Especially AFTER Europeans controlling India for 200+ years and turning it into a shithole before being kicked out. It pisses Indians like me off big time when we see Europeans complain about India. You losers had 200+ years to turn India into an oasis if you really wanted. You had the power to do so. You did not. You instead robbed my country dry. So STFU with your stupid sermons.