What taxes a billionaire?

[iNow]

Depends on what metrics you use to measure ethicality 

14 minutes ago, J.C.MacSwell said:

Is it fair to say, generally speaking, that it takes more effort to ethically spend $1,000,000.00 than it does to spend $1,000.00?

 

[zapatos]

17 minutes ago, J.C.MacSwell said:

Is it fair to say, generally speaking, that it takes more effort to ethically spend $1,000,000.00 than it does to spend $1,000.00?

I'm going to guess it is easier to spend $1,000,000 ethically. Not necessarily that they would do so, but simply that it is easier. When you are rich you can afford to be picky, or even over pay. The lower your wealth the fewer options you have choose ethics over immediate needs.

[Peterkin]

1 hour ago, zapatos said:

What I object to is the suggestion (evidence free) is that luxury spending means 'money barely reaches the bottom of the economic food chain', or that rich people have the pervasive idea of "Anything I own this, nobody else can. ", or whatever this hint of evil was implying; "It's hard to measure the collateral damage from luxury spending, or trace exactly who gets stuck with all the bills and cleanup." 

1 hour ago, zapatos said:

Can you stop with the innuendo already? If you think wood or plastic or brass on a yacht is different than wood or plastic or brass on a cabin cruiser please provide some evidence

Price of luxury yacht.  Profit at the last step to end user. from which presumably the  Commission on the final sale. is subtracted. So, on the Tatoosh, listed at 90,000,000 Euros, the last transaction would skim off +/- 22,000,000 for non-productive contributions. I won't track the cost-profit ratio all the way down to digging the... sure I will! 

The employees in a Canadian iron mine make quite decent salaries. None of the listed occupations are at the bottom of the food-chain.  They each receive a small fraction of the sale of the raw ore that will go into the steel that will go into the hull of a boat. The shareholders receive a bigger fraction.  I don't have the sales figures or the math skill to calculate how much they each contribute to that yacht or what part of the final price they get. Somewhere up the chain, there must be minimum-wage dockworkers and packers who also get little dribbles. Near the top is an interior designer - who is just as productive as the broker - buying furnishings and finishes, the cost of which vary greatly, but I guarantee it's not formica and naugahyde, and their time ain't cheap. 

None of this disproves that the trickle-down to the bottom is minimal.

Quote

or that rich people have the pervasive idea of "Anything I own this, nobody else can. ",

This is a misrepresentation of a post on the first page in which I had - quite unbitchingly - enumerated and documented a great many very rich people who support worthy and charitable causes with large donations. After which I appended: 

Quote

Very rich people are as motivated by the same feelings and ideas as the rest of us. Unfortunately, one of the most compelling of these feelings is "I want mooooore!" and one of the most pervasive ideas is "Anything I own this, nobody else can. " It's at this end of the scale that government needs to step in, like a good parent, and regulate the uncouth child's behaviour. Siblings and peers can help!

Okay, so, having slogged through all that, do you want to analyze other areas of luxury spending from a socio-economic perspective, yell at me, or move on?

I guess everyone has moved on! That'll teach me to go evidence-hunting.

Edited September 20, 2021 by Peterkin

[iNow]

Oh. Oh, good. Back to yachts then. Super. 

[zapatos]

15 minutes ago, Peterkin said:

Okay, so, having slogged through all that, do you really want to analyze other areas of luxury spending from a socio-economic perspective, or move on?

 

Did you analyze this area of luxury spending? I'm pretty sure there are more people involved than mine workers, dock workers, and interior designers.

Are you really suggesting that anyone making more than minimum wage is wasted money when it comes to luxury purchases? 

[Peterkin]

1 hour ago, zapatos said:

Are you really suggesting that anyone making more than minimum wage is wasted money when it comes to luxury purchases? 

No, I have not suggested that. I have supported, with a larger body of evidence than you offered to the contrary, that very little of that spending reaches the lowest levels of the economy. In contrast to moneys collected as tax.

 

1 hour ago, zapatos said:

Did you analyze this area of luxury spending? I'm pretty sure there are more people involved than mine workers, dock workers, and interior designers.

I did the first and last stages of the production-to-end user chain. You can fill in the rest.

Edited September 20, 2021 by Peterkin

[dimreepr]

19 hours ago, Area54 said:

The blatant obfuscation and ambiguity in your posts points the troll detector in your direction.

Those who wish to imply ethical failings in others have an obligation to be specifc and not adopt the pseudo-angst of an offended teen.

My apologies to everyone, had a visit from a friend with a bottle of JD. 🤒

But I'm not implying ethical failings in anyone; we all at some point have thrown the first stone.

The Diderot effect suggests we're all capable of behaving like a billionaire, I'm just exploring a method of eliminating excuses.

8 hours ago, Peterkin said:

No, I have not suggested that. I have supported, with a larger body of evidence than you offered to the contrary, that very little of that spending reaches the lowest levels of the economy. In contrast to moneys collected as tax.

Most tax-payer's don't see the point of charity, unless there's a reasonable excuse/sob-story; being a lazy mouse is no excuse, but it is a reason...

[TheVat]

12 hours ago, iNow said:

There are several parallel issues here.

One is that wealth acquired by the ultra wealthy tends to get put into tax shelters and nebulous investments so it grows (but remains outside the system), whereas that same money in the hands of the less fortunate goes IMMEDIATELY into the community around them.

They spend it on groceries and vehicle repairs and school clothes for kids and paying the electricity bill so it’s not dark in their apartment anymore at night and their kids can read. The providers of those goods and services in that community where this money is being spent ALSO spend the money once received for THEIR groceries and THEIR service needs and on THEIR kids. 

Dollar for dollar / unit for unit… the money in the hands of the less fortunate does more net good than money in the hands of the already fortunate. Yes, spending from the wealthy also creates jobs and injects money back into the system, but very little relative to money used in “trickle up” stimulation packages. 

Also, a bit of extra money in the hands of someone who already has a bunch of it doesn’t tend to change their behavior or encourage extra spending. Getting $1,000 tax break when you’re sitting on $50M isn’t going to suddenly result in them finally making a call to a plumber or the purchasing a new dishwasher… but for the person living paycheck to paycheck that money literally changes lives, gets spent and injected back into the system quickly, and results in lasting reductions in poverty and suffering. When you’re living at the margins, every dollar counts.

It also costs a lot to be poor. When the washing machine breaks, you can’t afford a new one but you can afford to pump quarters into the machine at the laundromat… but that ends up being more expensive on net. When the car breaks down, you don’t get to work on time and you get fired. The rich, however, have tax protected ways of growing their wealth and can afford tax attorneys to hide it. Paying more tax has more impact on their ego than on their lived experience.

The anger at the rich is out of hand, though. We need better policies and enforcement mechanisms, not more hate and vitriol directed at those doing better than us. Sadly, the anger is probably in large part intentionally being amplified by the very people on the receiving end. If they can keep everyone mad and focused on the wrong things, then the status quo remains stable and no progress or change gets made.

Like most issues in economics, we make a huge mistake by treating it as a moral failure when at its core it’s a policy failure. Fixing the policy is just super hard because the people with the power to change the laws tend to be the same ones benefiting the most from them… and also because focusing on wonky policy details is hard for a public who’s often just trying to survive through to tomorrow and who’d much prefer throwing stones and being distracted with us/them tribalism. 

Perhaps this thread could try focusing on wonky policy details instead of distractions like yachts and steel boats… or not. 

Thanks for a clear exposition of trickle-up (and across) which I was also trying to articulate earlier.   And yes,  many moral failures happen simply because policies allow the temptation to be there.   If you live someplace where predatory capitalism is harder to do,  like Scandinavia,  then those engaged in capitalism have less opportunity to slide into quick profit-taking and tax dodging.   Of course,  morals and policy are somewhat synergetic - Scandinavians foster policies of cooperation and strong social safety nets because their culture and morality has been very collectivist and egalitarian going back millennia.  

 

[iNow]

25 minutes ago, TheVat said:

morals and policy are somewhat synergetic

This is a valid point, but tangential from what I intended to suggest.

Yes, if we make it easy to steal then more people will steal... It's why we lock our doors at night. It's not like a door lock makes our homes impenetrable, but that little extra difficulty is usually just enough to prevent those who normally wouldn't engage in such behaviors from stepping out of line. 

However, my point was directed more at the publics response toward the ultra wealthy. All the energy gets spent on calling them evil and creating signs saying things like, "Eat the rich!" etc. Now, we definitely should be doing a better job of taxing them, and I have no problem with signs saying, "Tax the rich!," but my point was ... focus more on fixing policy and less on the "burn them at the stake" and mob rule / torches and pitchforks mentality. 

[Peterkin]

1 hour ago, dimreepr said:

Most tax-payer's don't see the point of charity, unless there's a reasonable excuse/sob-story; being a lazy mouse is no excuse, but it is a reason...

Who is represented by the lazy mouse? Schools? Fire departments? Space stations? Symphony orchestras? Refugee centers? Addiction rehab centers? All of those entities benefit from, and many depend on, charitable donations and volunteers. Charity takes up the slack left by government funding and staffing of enterprises that benefit society at all income levels. That's why donations are tax deductible. (Whether political donations should be included is a moot point here.)

While the rich and some of the middle class can buy security and other services from the private sector, the working poor, the unemployed poor, the rejected, marginalized, the old, disabled and disenfranchised cannot. They depend on government (tax revenues) and charity. Of those, government is the more accountable and permanent: it can plan several years ahead and allocate known quantities of revenue according to some rationale of need and urgency. Meanwhile, charity is erratic in intake and whimsical in allocation. The only advantage of charitable organizations is that they don't change leadership and direction every four years. 

There is certainly a cultural element in which people prefer as their social welfare facility: charity is individualistic, dramatic, often ostentatious; civil service is anonymous, reliable, mundane.  

(PS, when both were snatched up by a pair of owls to feed to their nestlings, the lazy mouse just had time to get off a jocular wink at his industrious brother...)

Edited September 20, 2021 by Peterkin
more thoughts

[dimreepr]

4 minutes ago, Peterkin said:

Who is represented by the lazy mouse? 

We all are...

[Peterkin]

4 minutes ago, dimreepr said:

We all are...

I'm not smart enough to work that one out.

[dimreepr]

6 minutes ago, Peterkin said:

I'm not smart enough to work that one out.

But you could ask why...

[Sensei]

Majority of ordinary people in the world, including politicians, government officials, and even including members of this forum (looking at the posts that pop up every time there is a discussion about "rich people" and taxing them) have been fooled by the "Billionaires List" in various newspapers/magazines..

These lists are compiled based on the stock prices of companies that "rich people" own, control or have a stake in. Very confusing to properly assess their wealth.

 

For example:

Elon Musk is 2nd on the Forbes list.. right?

Wrong, incorrect, and misleading information!

https://www.google.com/search?q=tesla+debts

"Tesla had started 2017 with $3.4 billion in cash but had $10.2 billion in debt. This was a negative cash position of $6.8 billion."

https://www.google.com/search?q=tesla+debts+2020

"According to the Tesla’s most recent financial statement as reported on July 28, 2020, total debt is at $14.10 billion, with $10.42 billion in long-term debt and $3.68 billion in current debt. Adjusting for $8.62 billion in cash-equivalents, the company has a net debt of $5.48 billion."

https://finance.yahoo.com/news/teslas-debt-overview-120614517.html

 

Share prices are out of touch with reality, artificially inflated by demand, by corporate marketing, by CEO personality/celebrity etc. Share prices reflect not the real (current) valuation of the company, but the futuristic, possibly unattainable future goals of the company.

Any attempt to sell a majority (or enough significant amount) of shares could lead to a price collapse if no one is found willing to buy them back.

Stock is often used by financial institutions as collateral for loans. A drop in the price of the stock below threshold in details of loan, forces the financial institution to request another surety and/or sell the stock, causing the price to drop even more.

 

Edited September 20, 2021 by Sensei

[iNow]

Well, and also Putin may be the richest man in the world but appears on none of those lists. He also is often likely deserving of the “evil” moniker I previously admonished others for using. 

[Peterkin]

33 minutes ago, Sensei said:

Share prices are out of touch with reality, artificially inflated by demand, by corporate marketing, by CEO personality/celebrity etc. Share prices reflect not the real (current) valuation of the company, but the futuristic, possibly unattainable future goals of the company.

There is a difference between income paid out in dividends, collected as rent above maintenance costs, profit above cost of items sold and the assessed value of permanent assets, fixtures, structures, etc. That difference is reflected in the taxation of different revenue sources - and often misrepresented for tax purposes by a bewildering array of financial devices and manoeuvres. However, control of valuable assets, including those negative ones in the form of debt, carries considerable economic clout. If the political system is corrupt, as is the case in some nations, that clout translates into political power, which in turn, dictates the tax structure and allocation of tax revenues.    

53 minutes ago, dimreepr said:

But you could ask why...

(I just know I'll hate myself in the morning....) Why are we all - including ICU doctors, roofing contracts and single mothers with two part-time fast food gigs - the lazy mouse?

[beecee]

19 hours ago, J.C.MacSwell said:

No, I meant literally trolling...

 

19 hours ago, J.C.MacSwell said:

Wooosh! At first that literaly went over my head! 😁

[Intoscience]

20 hours ago, Peterkin said:

 If the political system is corrupt, as is the case in some nations, that clout translates into political power, which in turn, dictates the tax structure and allocation of tax revenues.    

I'm sure most political systems are full of corruption. I'm sure there are many politicians in the back pocket of many wealthy people.  It's not just the individuals, but also the corporations, companies that boast massive profits where the profits are only filtered down to a select few. There is definitely a moral issue when a company boasting a profit then decides to cut costs by making people redundant. Unfortunately they can afford to pay the top legal people to find loop holes, avoid tax and hide investments. 

I know of one billionaire, I don't know him personally, but my father does. He started out as a dodgy salesman, dealing in anything, mainly illegal stuff. He approached my father years back to invest in a business deal that was very illegal and corrupt, my father declined. The guy ( I won't mention his name because he is well known) found other people to invest and went on to make his fortune, at the cost of many people's livelihood. He made enough money to be able to hide his corruption and provide himself with indemnity, buy political friendship and security for his business and fortune. 

I don't think there is a clear answer to how a system can policy against such. iNow stated very nicely in his post and I totally agree with him. Efforts should be focused on how the fortune of the wealthy can be filtered down to the less fortunate in a true and meaningful way. 

Now, I've written this post I'm just off on my private jet, with my $250,000 bottle of fizz, to view a couple of yachts and villas...       

[Peterkin]

I hear villas are a good investment - so long as they're not located on a muddy cliff in California, or on a Caribbean island, or in near a coast of Florida, or.... On sober thoughts, the yacht is probably a safer bet. Bring lots of animals!

[Intoscience]

17 hours ago, Peterkin said:

I hear villas are a good investment - so long as they're not located on a muddy cliff in California, or on a Caribbean island, or in near a coast of Florida, or.... On sober thoughts, the yacht is probably a safer bet. Bring lots of animals!

Unless it hits something and sinks. 

[dimreepr]

23 hours ago, Intoscience said:

I don't think there is a clear answer to how a system can policy against such. iNow stated very nicely in his post and I totally agree with him. Efforts should be focused on how the fortune of the wealthy can be filtered down to the less fortunate in a true and meaningful way. 

In England we did it by accident, brexit has caused the balance of power to swing in favour of the worker's; if you're a HGV driver you can, almost, write your own ticket and with a dearth of EU worker's to bring in the crops, and save lives via the NHS.

The wealthy may even learn the value of money, and eventually the reason for taxes; hopefully enough of them to make a difference. 🤞 

Building wall's has it's consequences, we could all learn from that...

On 9/21/2021 at 1:31 PM, Intoscience said:

I know of one billionaire, I don't know him personally, but my father does. He started out as a dodgy salesman, dealing in anything, mainly illegal stuff. He approached my father years back to invest in a business deal that was very illegal and corrupt, my father declined. The guy ( I won't mention his name because he is well known) found other people to invest and went on to make his fortune, at the cost of many people's livelihood. He made enough money to be able to hide his corruption and provide himself with indemnity, buy political friendship and security for his business and fortune. 

That's why we need a God/Karma; to put the fear of god/karma, into the idiot's the don't understand why it's better to be nice to the people that help you too live.

In an ironic way, being illegal can be profitable... 😇

[Peterkin]

8 hours ago, Intoscience said:

Unless it hits something and sinks. 

Ah well. Nothing is foolproof.

(....So, these two super-yachts collide in mid-ocean, bikini girls and exotic pets treading water all around them, and the owners send their confidential secretaries out in two dinghies to exchange gold-edged business cards from their respective high profile law firms....) 

3 hours ago, dimreepr said:

In an ironic way, being illegal can be profitable...

What's ironic? Crime has always paid handsomely, as long as it was done on a large scale.

Quote

Charles Keating died recently. His death marked a milestone in American political history. His crimes and those of my nephew illustrate an American truism often attributed to Al Capone. "If you're going to steal, steal big."

 

Edited September 22, 2021 by Peterkin

[StringJunky]

On 9/20/2021 at 12:36 AM, J.C.MacSwell said:

Trickle down works. It just doesn't work as sufficiently or as effectively as it should. That's why I'm in favour of a UBI (Universal Basic Income) element as well...that leads toward trickle up. 

Tax billionaires? Tax their revenues, not the profits which they hide...or displace to lower taxed locations. Yes, that can raises prices as effectively a regressive tax on the poor paying for those goods and services...so balance it off with the right UBI.

Also +1 to Dim for the thread.

Trickle down /trickle up= win-win for the wealthy. Trickle down is BS. I like the idea that anybody earning 10 digits is taxed to a point below, so that 10-digit billionaires can't exist. Not very realizable in the US though.

[CharonY]

15 minutes ago, StringJunky said:

Trickle down /trickle up= win-win for the wealthy. Trickle down is BS. I like the idea that anybody earning 10 digits is taxed to a point below, so that 10-digit billionaires can't exist. Not very realizable in the US though.

Or anywhere, really. Wealth inequality in OECD countries has been increasing over the years and it seems that in most countries social mobility is either stalled or decreasing. And you are right, economists have pretty much shown that trickle-down economics does not work. Not it does not work enough, it does not work. Corporations tend to increase shareholder dividends, for example, which retain the funds at the top. 

With regards to UBI, there are a lot of different flavours, but I think research is still ongoing which variant (e.g. negative income tax, vs income-independent benefits) might benefit low-income more. 

[StringJunky]

30 minutes ago, CharonY said:

Or anywhere, really. Wealth inequality in OECD countries has been increasing over the years and it seems that in most countries social mobility is either stalled or decreasing. And you are right, economists have pretty much shown that trickle-down economics does not work. Not it does not work enough, it does not work. Corporations tend to increase shareholder dividends, for example, which retain the funds at the top. 

With regards to UBI, there are a lot of different flavours, but I think research is still ongoing which variant (e.g. negative income tax, vs income-independent benefits) might benefit low-income more. 

I thought I'd not sent this post and deleted it. Wasn't sure if it contributed anything meaningful... but anyway. It does not make logical sense that shareholder-run businesses will have much sense of fairness... after all, they are only there at the top because the shareholders see competitive returns on their investment. Sole owner-businesses are more likely to be more principled because they hold all the reins and can unilaterally make altruistic decisions. That can go the other way, of course, with a business run by a tyrant, but there's no chance witrh disconnected, self-interested shareholders staring at a computer screen, looking at bottom lines.

This lays it out bare, the attitude, I think. I'm sure he's not unique amongst the uber-wealthy here:

 

Quote

Amazon boss Jeff Bezos is not going to pay his taxes “as an act of kindness” and it is up to governments to make sure that big business operators like him pay what is due, Boris Johnson has said.

The prime minister confronted the world’s richest man over Amazon’s tax bill when the pair met on the margins of the United Nations general assembly in New York on Monday.

But he said that Bezos – whose personal fortune is estimated at over £130bn – made clear that he believed the onus was on governments to ensure that they have an effective tax system, rather than for businesses voluntarily to pay more than is required by the law.

“He’s a capitalist, and he made the very important point that this is a job for governments,” Mr Johnson told Channel 5 News.

https://www.independent.co.uk/news/uk/politics/jeff-bezos-boris-johnson-amazon-b1924087.html

He's basically saying govts have got to beat him at his game.

Edited September 22, 2021 by StringJunky