The growth of the wealth of the super rich, and the increasing gap with the less rich, is a manifestation of exponential math. Two investors put money into the same investment that grows at 10%. One invests $1,000, the other $10,000. Each year, the gap will increase.
There is nothing immoral about this.
Where super wealth becomes a problem is when that wealth is used to influence policy. Effectively, the super-wealthy can choose to behave as unelected politicians. This is a problem.
Soros and the Open Society Foundations is an example of where this is manifest. He contributed $32 billion to fund the organization. His Open Society Foundation employs 1,150 professionals who promote his political agenda[1]. Whether you agree with his political agenda or not, Soros and I are both American citizens. We both have one vote. My influence in US politics should equal his. It does not. The only Americans who should have more political influence than I are those who have been elected or appointed to government positions.
Carlos Slim has owned 9-17% of the New York Times. Lauren Powell Jobs foundation owns the majority of The Atlantic. Bezos himself purchased the Washington Post. Perhaps these simply seemed like good investments, and I am certain that wealthy persons have owned media for centuries. But the unprecedented wealth of this century increases the potential influence the super wealthy can wield. This is a concern.
Is there a reason you don't cover right-wing billionaires in your examples? For example the Koch brothers and Rupert Murdoch are extremely influential on politics.
In any case, money has always been able to buy political power. That's a big reason why wealth inequality leads to political instability.
I think that fact, that these gains are the result of capital gains and in no real way connected anymore to actual personal contribution, risk-taking or anything else besides already being the wealthiest person alive is exactly the point.
I think it is a little bit silly to say that someone spending billions funding an orbital rocket company (Blue Origin) that is getting its ass completely and thoroughly kicked by SpaceX is not taking any risks.
This is independent of how you feel about Bezos, or billionaires in general.
Blue origin could go bust tomorrow, lose all its assets and rack up extra debt and bezos would not have to lose sleep over whether he's gonna be poor. Same goes for anything else he does from here. His "risk"-taking will never again be similar to that of someone who sustains themselves from their work, paid for in cash.
This, along with the idea that you can just "tax his wealth" like it's some kind of liquid holdings, are the two largest misunderstandings I see when talking about someone else's holdings.
Most of this is just what's called "paper gains", which are not actually cash in the bank. So the little cards popping up behind mentioning how this is equivalent to someone's income are somewhat nonsensical. It's not even the same sort of income.
Really, all stuff like this makes me ask is "what point are you trying to make?". Yes, there's people out there who've earned more money, and obviously people with more money tend to accumulate more money, more rapidly than those without.
Is the implicit suggestion that we should appropriate his property and hand it over to the state to spend on whatever the state spends money on? Or that we should hand it over to "the people" (whatever that means)?
To me the only question here is this: Did Jeff Bezos get his holdings legitimately, or illegitimately? If the former, then this isn't anyone's concern how much he makes per unit time. If the latter, then a discussion can be had about righting the illegitimate appropriation.
I don't think you should. You should be charged for your utilities, and the cost of the roads around you should you have access to them, but paying taxes on property which was already taxed in a fair transaction between private persons is nonsensical. Should you pay a "computer tax" yearly for the value of a computer you own?
If you own a landlocked property, which many people do, what exactly do you pay taxes for?
> If you own a landlocked property, which many people do, what exactly do you pay taxes for?
School districts, fire departments, police departments, libraries, local parks, roads to get around my city (not just off my property), bike trails, walking paths, and a government to manage it all.
Then charge individual levies for the use of those specific services, should the individual use them, as I mentioned in the comment you replied to.
You've essentially just enumerated individual utilities I suggested charging levies for, then framed it as if I was suggesting people not pay for them at all.
Your point does nothing to explain away the taxes for a landlocked property which makes use of no services at all. Consider wilderness properties, or hunting land where people have to charter private aircraft into. There's no services used to charge the owner for. Why charge them levies on top of the sales tax?
Good assessment. I'd disagree that it being an edge-case isn't illustrative also, but that's a moot point. Appreciate you not trying to hammer me into agreement!
If you, or anyone else for that matter, is ever interested in at least understanding this sort of position I highly recommend Robert Nozick's work in response to John Rawls A Theory of Justice entitled Anarchy State and Utopia.
> Capital gains are not cash income, and to treat them the same is to fundamentally misunderstand money.
Realized capital gains are, in point of fact, cash income.
They aren’t, for most people (though this is less true weighted by dollars of realized gains) part of a stream of regularly recurring income the way salary from a fixed-schedule, fixed-pay job is. And there are fairness implications to not accommodating that in a progressive income tax system. But a lower set of brackets for fains from assets held 366 (or 367) days isn’t a really good way of handling the real differences.
Allowing distributing recognition of income over time (both advance and deferred) is sensible to handle both long-term capital gains and chunky income from other sources (e.g., the typical pattern of royalties vs. work for writing books) fairly, and adjusting the basis value of capital items on which gains are calculated for inflation is sensible as well.
There’s no good reason for a lower general tax rate for long term capital gains instead of those measures; compared to fair treatment, it (among capital gains payers, not even considering the relations to other income) benefits those with large capital holdings and recurring gains, and adversely impacts those whose gains come from occasional sale of really-long-held assets, so that to tune it to a level that feels “fair” for middle-class capital gains it has to be excessively generous to hypercapitalists.
Unrealized gains aren’t cash income, sure, they are just reasonably anticipated future cash income (which is a kind of thing we sometimes require anticipatory payment against expected tax liability on in other contexts.)
> > Realized capital gains are, in point of fact, cash income.
> That's not what TFA is tracking
Congratulations on reading the first sentence of the post. Perhaps at some point later there was discussion of how unrealized gains relate back to the cash income that is realized gains and how that is relevant to taxation, for which discussion of realized gains was preparatory, rather than the first sentence being the whole of the response.
I read it in full before replying. It starts straight off off-topic, though.
Amazon is Bezos' life's work. It strikes me as silly to frame his capital gains in the context of the taxes he'll owe when he "eventually sells", like a homeowner who moves or a daytrader who closes out a position.
> It strikes me as silly to frame his capital gains in the context of the taxes he'll owe when he "eventually sells", like a homeowner who moves or a daytrader who closes out a position.
Sure, its silly if you’re Jeff Bezos discussing its general role in your life.
For anybody else, or even Bezos himself discussing tax policy, that it js his life’s work is no more relevant to tax policy than that other people’s “life’s work” goes into their creative endeavours whose proceeds aren’t taxed at favorable LTCG rates, or that still other’s “life’s work” is done in thr context of teaching, or construction, or any number of other endeavours done mostly through positions that are paid and taxed as wage labor.
I get what you're saying, but the average is probably used because there isn't public information to do this in real time.
Plus, the timescale of changes wouldn't work with this format and the author's intended message. You'd have things fairly constant for a few hours in a row, then +40 million one day and -60 million the next.
It is not money since he can't possibly spend it faster than he gains them. It is just power, the amount of control that he has over fellow inhabitants. Unlike money, he doesn't need to spend it to manifest it.
How does that work? Presumably people aren't going to do things for him without some reasonable expectation that he will give them money, and in order to maintain that reasonable expectation, he surely has to furnish that money? I'm not trying to challenge you per se, I'm just trying to understand because a lot of economics seems counterintuitive to me.
The money one doesn't spend does not have value in a economical sense, since it is not participating in exchanges and doesn't affect supply and demand. Thus that money is not the same as the money that most of us earn and spend. The $10 in that billions does not equal to the $10 I earn and used it to buy that burger. But what if there is not enough burgers to go around?
If one owns as much money as 100 people, he can out bid the resource request of those 100 people. So when the critical resource is scarce, he controls those 100 people. The actual amount of money as in numbers is meaningless, subject to inflation and scarcity of the resource in question. Only the relative ratio is meaningful. If he has more money than 1 million people, he is more powerful than 1 million people. Of course the power only applies in the domain where free market is in dominance, and in America,and globally, that domain is quite large.
Yes, one can choose to refuse to yield to the power, it doesn't mean the power is not there. The powerful people can choose to not exercise their power, it doesn't mean the power is not there.
There is nothing immoral about this.
Where super wealth becomes a problem is when that wealth is used to influence policy. Effectively, the super-wealthy can choose to behave as unelected politicians. This is a problem.
Soros and the Open Society Foundations is an example of where this is manifest. He contributed $32 billion to fund the organization. His Open Society Foundation employs 1,150 professionals who promote his political agenda[1]. Whether you agree with his political agenda or not, Soros and I are both American citizens. We both have one vote. My influence in US politics should equal his. It does not. The only Americans who should have more political influence than I are those who have been elected or appointed to government positions.
Carlos Slim has owned 9-17% of the New York Times. Lauren Powell Jobs foundation owns the majority of The Atlantic. Bezos himself purchased the Washington Post. Perhaps these simply seemed like good investments, and I am certain that wealthy persons have owned media for centuries. But the unprecedented wealth of this century increases the potential influence the super wealthy can wield. This is a concern.
[0] https://www.cnbc.com/2018/11/07/billionaires-are-buying-medi...
[1] https://www.opensocietyfoundations.org/grants/past?page=2