[HN Gopher] Coinbase lays off around 1,100 employees
___________________________________________________________________
Coinbase lays off around 1,100 employees
Author : kripy
Score : 395 points
Date : 2022-06-14 17:12 UTC (5 hours ago)
(HTM) web link (www.coindesk.com)
(TXT) w3m dump (www.coindesk.com)
| rgifford wrote:
| Go back and read the HN thread from the Coinbase DPO [1]. Their
| valuation was insane then, before the war in Ukraine, inflation,
| or Omicron. The top comments on that thread shock me. Even at
| that time I expected every other comment to be about how
| overvalued they were, but it just wasn't the case.
|
| Wonder if people could've been made to see this then. I went full
| on Chicken Little [2] and mostly just got treated like I was
| yelling at children to get off my lawn.
|
| 1. https://news.ycombinator.com/item?id=26808275
|
| 2. https://news.ycombinator.com/item?id=26808275&p=2#26812175
| asien wrote:
| No surprise, just like Uber , Airbnb etc..coinbase has been
| overstaffed ever since they raised a major amount of capital many
| years ago...
|
| Hence , I don't see what 5K people can be doing at coinbase since
| some startups in Europe are doing the same with like 100
| people...
|
| It's been known for years : startups overhire and lay-off when
| recession comes up.
|
| With the "nazi revolution" in the 50' , most startups rely
| exclusively on "Social Darwinism" , to solve problems or improve
| products , by having them fight internally and let the best ideas
| come to executives. Of course only employees who know how to
| navigate corporate politics are able to reach them and win those
| fights..
|
| Those 1000 were not part of it, but they will have no problem
| finding another position somewhere else.
| sytelus wrote:
| I don't understand why Coinbase is feeling such a crunch. They
| are just middleman in buying and selling. Their advantage is
| supposed to be that they make money whether crypto goes up or
| down. How can they screw this up?
| boc wrote:
| USDC.
|
| They see something really bad on their books that's separate
| from their core business. Just like how Lehman Brothers was a
| profitable bank that got shredded by one risky trading
| strategy.
|
| These stablecoins have been devoured one by one, and each time
| they fall more people start trying to get their money out. USDC
| will experience a run and it might not be survivable without
| liquidating user account holdings, which will be a massive
| extinction event for retail crypto.
| cwkoss wrote:
| If Coinbase is operating USDC as full reserve, as they have
| claimed, is there any risk from it? Seems like there would
| only be risk if they lied about how they are running it.
| dadoge wrote:
| No one is expecting a run on USDC
|
| Given that their business is just a "buy sell" platform, they
| are trimming around to get just that
|
| They have lots of other features like "NFTs, lending" etc and
| other investments in their UX (separating out to currency vs
| smart contracts vs defi) I'm sure all that A/B testing to get
| that will be squeezed now too
| miketery wrote:
| They are no longer in a position to charge exuberant fees due
| to competition. And they depend on new inflows, in a bear
| market inflows are low - mostly out flows. Pie is shrinking.
| fullshark wrote:
| All i can think is they had bad forecasts based off trade
| volume during COVID when people had a ton of stimulus cash and
| nothing to do all day. Another possibility is something
| involving solvency in case a crypto selloff + run happens which
| seems possible any day now.
| arnvald wrote:
| Their expenses are based on predicted growth in the volume of
| transactions. They're making money no matter if crypto goes up
| or down, but they stop making money when people stop trading.
| skizm wrote:
| They make money when trading volume is up. Trading volume and
| BTC price are pretty much directly correlated. Trading volume
| is way down.
| SirYandi wrote:
| I imagine they do own significant amount of crypto. Also, less
| people are buying as the price dips.
| Grustaf wrote:
| How can they even have 1100 employees? That's more than the East
| India Company needed to run a whole subcontinent, probably.
| whimsicalism wrote:
| 1100 is not even close and populations were much smaller.
| neals wrote:
| Yes, the East India Company ran a much more efficient crypto
| exchange, obviously.
| pphysch wrote:
| EIC was working in concert with other major British
| institutions including the military. They probably had 100,000s
| of personnel in total.
| valar_m wrote:
| East India Company employed 260,000 soldiers alone, not even
| counting the entire rest of the company. That took 20 seconds
| to find.
|
| https://en.wikipedia.org/wiki/East_India_Company
| formvoltron wrote:
| what the heck did all those people do!?
| manicksurya wrote:
| hmm. looks like the total mentality of an entrepreneur changes
| when the company becomes public. with VC funds, the entrepreneur
| focuses on execution and builds and with IPO, its ok for
| entrepreneurs to lose vigor and can buy millions worth property
| and also lay off employees.
|
| In the end, it has nothing to do with open society or for the
| people. its all about money and its just greed.
| kingboss wrote:
| Wasn't this guy one of Paul Graham's darlings? Weren't the
| "geniuses" at YCombinator invested in this pile of trash?
|
| I would really like one of those "insightful" posts from pg
| telling us how to pick winners right about now.
| joezydeco wrote:
| We went over this 9 years ago.
|
| When you posted anything negative and mentioned YC in the
| headline, the mods edited the headline. When Coinbase went dark
| during the first crypto winter (or was it the second?), asking
| for some/any help here was ridiculed by the YC powers that be
| (i.e pg)
| [deleted]
| elefanten wrote:
| Coinbase is one of the top competitors in its space. They
| picked a winner.
|
| What's your point? Are you confusing the market they're in
| contracting (alongside the whole market) with them losing?
| kingboss wrote:
| Top competitors in a scam. Just like NFTs. And boys like pg
| are into this (both Coinbase and some NFT company that I
| forgot its name). And you are defending them. And you don't
| see any problem. And that is the problem. No values was
| created here. Just moving value around. Usually into the
| pockets of some already very rich people.
| phaistra wrote:
| You literally just described most of Wall Street and most
| of the finance industry too.
| wollsmoth wrote:
| Sort of, it's all very abstracted but at the end of the
| day the investments generally represent value being
| produced. Goods being created, services being rendered.
| Crypto, for the most part, is proof that someone,
| somewhere had a computer that did a thing.
| fleddr wrote:
| You confuse personal opinions about crypto with business
| success.
|
| Coinbase is a massive success. It has a 100 million users and
| is the best known crypto exchange for retail. They did pick the
| winner.
|
| This layoff creates a lot of emotional attention but doesn't
| mean that much in business terms. They were overhiring anyway
| and all of tech is massively down. It's a small undoing of
| growing too fast.
| namaria wrote:
| We're achieving on this thread levels of boot-licking previously
| considered entirely theoretical
| repomies69 wrote:
| wly_cdgr wrote:
| benmw333 wrote:
| I keep reading all this "we" stuff...
| newaccount2021 wrote:
| 2OEH8eoCRo0 wrote:
| How did they possibly employ that many to begin with?
| outside1234 wrote:
| Coinbase had over 6000 employees?!?!?!
| [deleted]
| sillysaurusx wrote:
| I think if employees feel slighted by being fired, they're
| fooling themselves. The best mindset is that you could be gone
| tomorrow. It gives you clarity and purpose. It also happens to be
| the truth.
|
| Coinbase was also extremely generous with severance. 12 weeks
| plus two for every one year at the company, I think. I've had the
| experience of being let go without notice and without severance.
|
| Devs seem a little more grizzled this time around, so I think
| this mindset is slowly becoming the norm. College grads seem
| skittish, but they always are.
|
| People keep pointing to Armstrong's $110M house like it's some
| sort of injustice. If you think billionaires should exist at all,
| then that's one of the least-bad injustices imaginable. It's
| probably true that no Armstrong, no Coinbase, and 10% of Coinbase
| is the prize.
|
| EDIT: It's actually 14 weeks:
| https://blog.coinbase.com/a-message-from-coinbase-ceo-and-co...
|
| Three and a half months of dev salary is pretty incredible.
| Apocryphon wrote:
| Whether billionaires should exist or should be able to buy
| hundred million dollar homes aside, the timing just plain looks
| bad. As mentioned in the other discussion thread, the price of
| his home is "enough to give everyone who was laid off slightly
| a severance of more than $120,000".
|
| Obviously Armstrong was never going to give a dime of his
| personal net worth to an employee, much less a former one, but
| there are such a thing as optics and public opinion. The
| juxtaposition of that purchase with layoffs at his company just
| doesn't look good.
|
| https://news.ycombinator.com/item?id=31739997
| deeptote wrote:
| sillysaurusx wrote:
| I do tiktok dances mostly, but weddings are fun too.
|
| The point is, I'm not sure there are any issues. People don't
| like change and uncertainty. But uncertainty is a fact of
| life.
|
| It's so much nicer just to accept it and move on. It helps
| you in the long run too.
| john_yaya wrote:
| My severance don't jiggle-jiggle, it folds.
|
| Converted it to fiat, you really oughtta see it.
| 5d8767c68926 wrote:
| What exactly is the issue? Company predicts that the market
| is not going their way, and they are tightening their belt.
| Sucks to be on the receiving end, but are they supposed to
| keep all employees forever, business conditions be damned?
| roflyear wrote:
| For context, that is about $44m of severance that they are
| paying out as a part of these layoffs, if we assume about $150k
| average salary.
| izzydata wrote:
| I don't think billionaires should exist, but I also don't think
| these employees have been wronged. That is a pretty generous
| severance package.
| tomcam wrote:
| How much money should people be allowed to have?
| philodelta wrote:
| I worry about the unaccounted soft power of someone with
| that much money. Through lobbying and market consolidation,
| the extremely wealthy hold disproportionate political and
| economic power. At least with corrupt politicians, in a
| liberal democracy there is some amount to which they are
| accountable to the people. The power of the wealthy is
| without account except through government action. laisse-
| faire capitalists like to hand wave and imagine this power
| is "not a problem" when it very clearly is, with people
| like the Kochs wielding their power to sow political
| propaganda. They did not "earn" that power, or at the very
| least I don't think people deserve that power even if they
| were skillful businessmen. For me, it has nothing to do
| with sour grapes, I don't care that they have more money
| then I can imagine, other than they can use that money to
| have a greater voice than me.
| tomcam wrote:
| Should a large labor union, nonprofit, or a non-
| governmental organization have exactly the same voice as
| you?
| izzydata wrote:
| I agree with this. I don't care when someone has 1000
| cars or 100 houses and owns a jet plane or whatever. I do
| care about how it enables them to unfairly direct other
| peoples lives to their personal agenda. I also care when
| people have too little that they can barely feed
| themselves and have nowhere to live.
|
| I feel like there must be some way these two problems can
| help solve eachother.
| tomcam wrote:
| How has your life been badly affected by someone who owns
| 1000 cars?
| izzydata wrote:
| It probably hasn't very much which is why it doesn't
| bother me. Which is what I said.
| tomcam wrote:
| How much money should people be allowed to have?
| mbg721 wrote:
| Tree fiddy, certainly.
| tomcam wrote:
| Analysis: true
| I-M-S wrote:
| No more than it would make others envy you, no less than
| it would make them pity you.
| colinmhayes wrote:
| Whatever the people decide. That's why we have democracy.
| tomcam wrote:
| I don't know who your "we" is, but in the USA it is
| precisely why we do not have a democracy. We have a
| republic in the USA. The Senate and electoral college
| help temper the intoxicating effects that a pure
| democracy would produce .
| colinmhayes wrote:
| > we do not have a democracy
|
| Republics are a type of democracy.
| tomcam wrote:
| In a taxonomy of government types, sure. Practically
| speaking, the difference between a pure democracy and a
| republic is enormous. The framers of the constitution
| were explicitly aware of this.
| Kon5ole wrote:
| How much should people be allowed to spend on a share of a
| company? How do you limit it?
| schlauerfox wrote:
| " Harrison Bergeron " by Kurt Vonnegut.
| weakfish wrote:
| The issue is assuming people who are anti billionaire are
| anywhere remotely close to the ideology in that book.
| It's a good story, but a billion dollars is staggering
| and hardly anywhere near desiring ballet dancers to wear
| chains.
| flashgordon wrote:
| Ok let me take a stab at it. I actually am on the fence on
| this so purely a thought exercise for me. Plus as someone
| getting into midlife crisis this has been on top of mind
| for me.
|
| How about take (in no order):
|
| 1. 1 or 2 fancy cars/suvs
|
| 2. Be able to travel business class (say once a month) for
| vacations and stay in decent hotels
|
| 3. Nice education (say 2 degrees at a top college)
|
| 4. Nice house (say 2 rooms per family member in a "decent"
| neighborhood) (add things like backyard, poop etc if you
| like)
|
| 5. Obviously enough money to pay taxes
|
| 6. Oh and ensure health-issue-free lifestyle
|
| 7. (Hobby or two)
|
| 8. (Ultra Branded clothing?)
|
| See what it takes to get all of the above and double it. Or
| even 3x it. Ymmv ofcourse. I am not a traveller so fancy
| hotels or biz class is not a big deal. I am also not a car
| person so 1 and 2 are not big deals for now (things can
| always change).
|
| I still can't see this needing billionaire status?
| biofox wrote:
| What if I have all that, but also have a great idea for a
| business. Let's say I want to try it out, but to do so
| I'll need to hire some industrial space, expensive
| equipment, 5-10 engineers, and some business / marketing
| people to get it going. Should I have to risk my standard
| of living to do that?
|
| What if I have 10 ideas that require that?
| flashgordon wrote:
| That's a great point. I wasn't suggesting people
| shouldn't desire things. We talk as if billionaires are
| not a zero sum game. But is that really true?
| #billionaires has gone up but the basic line around
| housing, education, healthcare, pollution have all been
| declining no? If I was to venture a hypothesis, will the
| billionaire's ability to realize the billions actually be
| viable if it wasn't for the workers who desperately need
| to cover (the stripped down basic form of) needs 1-7
| above?
| elefanten wrote:
| Add social expenses -- what it takes to fit into a
| society or community.
|
| Add a buffer for risk and uncertainty about the future.
|
| And then consider what role location has on the whole
| package. If you want proximity to one of the global hubs
| / power centers, then you're looking at doing this all in
| a top-tier cost market.
|
| Then you easily push into tens of millions. Breaking a
| hundred million to super thoroughly check those boxes
| isn't a stretch.
|
| This is before considering an agenda / passion that you
| want to see changed in the world. And before any
| ambitious desires from family members and close friends.
| MisterBastahrd wrote:
| Breaking into a hundred million is an absurdity given the
| criteria GP set.
| tomcam wrote:
| No it's not. Given the house prices in places like Palo
| Alto, Malibu, London, or Moscow, the house alone could
| easily be $50 million.
| tomcam wrote:
| Can you describe the new governmental Department of Hobby
| Restrictions? I study music history, transcribe old
| popular songs, and play many different instruments. Does
| this count as one hobby called music or does it count as
| three different hobbies?
|
| What would be the penalty for an asshole like me having
| three hobbies instead of the two allowed under your plan?
|
| Am I allowed to have one flute, or if I play
| professionally am I allowed to have two in case one is
| broken? Am I allowed to have an alto flute and a bass
| flute as well, or am I limited to just the garden-variety
| soprano flute?
| flashgordon wrote:
| So the #hobbies is really up to you. At some point
| personal responsibility would need to kick in to support
| things beyond some level of basic necessities no?
| djbusby wrote:
| 100x of the average net-worth in the 50km radius of their
| primary residence.
| kube-system wrote:
| You have invented maybe the best way to concentrate
| wealth even further than it already is.
| [deleted]
| izzydata wrote:
| There is obviously no exact dollar amount. I don't believe
| everyone should have the same amount, but there should
| probably be some lower and upper limit. Maybe it is
| possible to calculate the difference between the two.
| Perhaps the upper limit would be 10000x that of the lower
| limit. Just as an example. There being a lower limit also
| implies some kind of universal basic income. Theoretically
| partially supplied by the upper limits excess.
| shrimpx wrote:
| What happens to the excess is what's interesting. And if
| it's in volatile assets, how do you shave off the top?
| E.g. your stocks go way above the limit in a bubble but
| then crash by 50% right after you got taxed.
| xur17 wrote:
| The other "fun" side effect of this is that the
| government is slowly going to become the majority owner
| of every business.
| shrimpx wrote:
| Yeah. I guess that model implies that the govt will take
| a percent ownership of whatever you own. I think it would
| destroy the prospect of high risk high reward ventures
| like Tesla. Maybe the tax rate can be divided by a
| volatility metric so investors in high risk ventures
| aren't severely punished randomly.
| tomcam wrote:
| Do you feel random government employees would be more
| productive and knowledgeable than the owners of the
| business whose shares were taken away by this scheme? Do
| you feel good businesses would continue to be good when
| handled by bureaucrats? Bonus points for the name of a
| bureaucracy that has done this kind of thing well.
| shrimpx wrote:
| No I don't support this. I keep trying to figure out how
| it _could_ work, so I can understand the point of view of
| the people who propose it. I haven't seen any salient
| proposal.
| tomcam wrote:
| There is obviously an exact upper dollar amount. You
| described it yourself: $1 billion.
|
| Do you think restricting the amount of money people can
| make and therefore pay taxes on is a good way to pay for
| universal basic income? Elon Musk will famously pay
| something like $12 billion this year. What's the best way
| to sustain welfare programs that you like without a large
| tax base?
| headsupftw wrote:
| "One million dollars baby!"
| ipaddr wrote:
| If they start hiring around christmas they saved no money and
| would have been better off keeping the employees. It looks like
| we are in store for a long down period.
| nojito wrote:
| Didn't they pay a CPO $600m+?
| nickstinemates wrote:
| > Three and a half months of dev salary is pretty incredible.
|
| Completely agree. Layoffs suck and I hope no one reading this
| ever has to go through them. But, it could have been done a lot
| worse than this, that is for sure.
| zjaffee wrote:
| The state of California requires that Employees are paid for 60
| work days (8 weeks) if there is a layoff at this scale. I
| assume that's where the majority of these employees are
| located. They're offering an extra month/month and a half
| likely on the condition they sign some sort of NDA/Right to sue
| the company for wrongful termination.
| yellowapple wrote:
| > If you think billionaires should exist at all
|
| That's a big "if". It's pretty dang hard to amass that much
| wealth without robbing the people around you.
|
| That's indeed pretty generous severance-wise, but that
| $110,000,000 happens to be enough to keep each and every one of
| those laid-off employees on the payroll for another year
| (assuming $100k/year salary).
| aetherson wrote:
| Well, assuming $100k total cost of employment to the company.
| My guess is that the per-employee total cost of employment to
| Coinbase is at least twice that.
| [deleted]
| ralston3 wrote:
| True.
|
| But I don't think it's so much the firing, as it is the
| Coinbase telling new hires "Offers won't be revoked". But then,
| not only revoking said offers, but then additionally firing
| 1,000+ people.
|
| They're experiencing a bit of a PR relations nightmare ATM.
| Curious to see if this might hurt them with hiring going
| forward.
| qbasic_forever wrote:
| I think workers should organize and bargain collectively with
| their employer on their working conditions and policies for
| layoffs.
| triyambakam wrote:
| I technically got 3 months of severance when covid started,
| however after taxes it reduced it to 1 month. That was so
| depressing.
| kamikaz1k wrote:
| Would you happen to know how RSUs are factored into this
| equation? Or is it just salary?
| tuckerpo wrote:
| Anecdote: I had an old co-worker who was given 6 month's notice
| that he'd be let go from a previous job, and his manager at the
| time helped him look for a new gig + gave him shining reviews
| and references. After the 6 month period was up, they still
| gave him several months of severance, even after he had found a
| new gig. Some companies/managers actually do care about you,
| and it seems like Coinbase is roughly in that court.
|
| Getting laid off with zero warning and no severance can be a
| life-ruining event if it's at a bad time logistically in
| someone's life. It could be way worse. Always have your resume
| updated, and take interviews every now and again just in case.
| hardtke wrote:
| I've been chatting with some friends whose company shut down
| recently, basically with no warning. They are getting
| recruited like crazy. In my opinion that's much preferable
| than to being left go as part of the 20% lowest performing
| employees. This reads like a "culling of the herd because we
| can use the alleged upcoming recession as an excuse" event.
| I'm not sure the generous severance makes up for the "you are
| not in the top 80%" label.
| rapjr9 wrote:
| It has the appearance of companies trying to cause a
| recession instead of waiting for one to occur. Coinbase
| admits it can't predict the future but are being
| precautionary in case there is a recession? If their plan
| is to take a worst case view then why not just cash out the
| whole company and shut it down on the precautionary
| principle? If this is an attempt to put a scare into
| workers to keep wages low it may backfire since worker
| shortages seem to be large and other companies may easily
| absorb a lot of workers, making it hard to get workers back
| later (and it takes time to train new ones). It could
| encourage people to leave on their own if they start
| hearing of the better jobs others are getting after being
| forced to leave, and it shows zero commitment to workers
| (so workers should reciprocate). It might be necessary to
| actually destroy many companies before this fear tactic can
| have some generic effect. People who died in the pandemic,
| got long covid, retired, or felt abused are probably not
| coming back (though hopefully long covid proves not to be
| forever.) Lay off workers during a worker shortage and you
| had better count on not being able to get them back easily.
| higeorge13 wrote:
| Layoffs is never about underperforming employees. Whole
| teams or departments are usually laid off, including top
| talent.
| scarface74 wrote:
| You should always be prepared for your job to be pulled out
| from under you. There is no major city in the US where a
| software engineer with experience shouldn't be in the top
| quartile of income earners for their location and have a 3-6
| months emergency fund.
|
| You should always have an updated resume, career document, be
| interview ready and have an active network.
| kajecounterhack wrote:
| > Some companies/managers actually do care about you, and it
| seems like Coinbase is roughly in that court.
|
| Do they really tho? They rescinded offers to many foreign
| students on OPT visas who had turned down Ph.D programs and
| such, putting them in a pickle. And they did it over email.
| notyourwork wrote:
| At-will employment is "at will" of both parties.
| kajecounterhack wrote:
| In case it wasn't obvious, there are social contracts
| between folks that are established outside of the written
| contract. Things like, "you should try to give 2 weeks
| notice when possible" and "you should not hire and change
| your mind in a matter of months, before the person has
| worked for you, but after they had already turned down
| other hard-won options."
|
| Folks who violate social contract are called assholes.
| You don't go to jail for being an asshole but some folks
| won't want to work with you and that's okay.
| at-fates-hands wrote:
| > The best mindset is that you could be gone tomorrow. It gives
| you clarity and purpose.
|
| Probably the best advice you can give someone in the tech
| industry. Even when I'm happy and content in a position, I'm
| still constantly looking and interviewing.
|
| I got burned pretty bad at two startups in a row where the
| founders were pitching rainbows and unicorns and one company
| just went bust and I showed up one day and they sent everybody
| home - no severance, no reference, nothing. The other scenario,
| one of the founders fled the country with the money and left
| everybody high and dry.
|
| Both were eye opening enough where now I have multiple backup
| plans, I network like crazy, I listen to what people are
| saying, I watch and see who's leaving the company. If you see
| higher executives leaving en masse, its a lot different then a
| few low level sales people. In both of the above situations, I
| missed a lot of red flags I would've caught today.
| moneywoes wrote:
| I'll shoot my shot here, know of mid level remote backend
| opportunities?
| staunch wrote:
| > _Coinbase was also extremely generous with severance._
|
| Regardless of what one thinks of Coinbase, their decision to
| offer employees generous severance deserves massive praise. If
| you were on the fence about working at Coinbase, currently or
| in the future, it should be a major point in their favor.
|
| If nothing else, it shows competence. Too many incompetent CEOs
| (and their boards) wait too long and then do layoffs with
| little or no severance. Instead of the responsible thing and
| laying people off early enough to give them a proper severance.
| mrcheesebreeze wrote:
| there is no problem with being a billionare provided you do the
| near impossible and not hurt anyone to get it.
|
| Being rich isn't criminal, being criminal to get rich is.
| repomies69 wrote:
| In the end I care about the stock going up, and now it finally
| seems to be doing that. The point of a company is to generate
| wealth for the owners and nothing else. Employees need to
| negotiate with the contracts according to that.
| SantalBlush wrote:
| No, the point of a company is to provide a net value to
| society. This often (but not always) correlates with
| generating profits.
| kareemsabri wrote:
| > The best mindset is that you could be gone tomorrow.
|
| Best for what?
| hiq wrote:
| > I've had the experience of being let go without notice and
| without severance.
|
| You could reasonably ask whether that should be legal at all.
| Johnny555 wrote:
| _People keep pointing to Armstrong 's $110M house like it's
| some sort of injustice. If you think billionaires should exist
| at all, then that's one of the least-bad injustices imaginable_
|
| Ok, I'll admit it, billionaires should not exist at all, there
| should be a heavy wealth tax that makes it hard to become a
| billionaire. Will a CEO work less hard if he (and his peers)
| can only ever gain $100M in net worth before a wealth tax on
| assets kicks in?
| consumer451 wrote:
| The best argument I can think of for why humans should not
| have wealth disparities at levels of 500,000,000,000:1 is
| that Tax Induced Psychosis appears to be a thing.
|
| Having to write 10 digit checks to the government makes
| people behave irrationally. We are just not evolved for it
| and likely never will be.
| alx__ wrote:
| Christ on a skateboard!? All the temporarily displaced
| billionaires in this thread are something else.
|
| If you require more than 100M in net worth to be "motivated"
| to work. There's a larger problem with you. Being a
| CEO/leader doesn't require some skill set that's given to you
| from some mythical watery being just because you're special.
| sharkweek wrote:
| I'm a big fan of 100% taxation on anything above 999M, but
| my continuation here is that anyone that earns more than
| that gets a trophy for every additional 1B they earn put on
| display in a big museum in a city of their choice (Museums
| selectively scattered around the US).
| theptip wrote:
| I like the idea of getting public achievements based on
| your personal tax contributions.
|
| Give them a public museum name for each $B for all I
| care!
|
| Or more generally, just let them pick which program they
| want to have their face/logo on. "The Musk EV car
| subsidy" etc.
| Aeolun wrote:
| I'm a firm believer in a maximum of like 50% tax on
| income. Anything more just feels like a punishment for
| working.
| jcampbell1 wrote:
| It isn't about the money, rather it is a public scoreboard
| to remind us that we must serve others and be innovative.
| mkr-hn wrote:
| It's not working. Jeff Bezos said he can't think of
| anything to do with his money other than build rockets
| while people die in his warehouses. Too much money makes
| people out of touch. I don't think billionaires are evil,
| I just think they don't know what life is like for people
| who still have a concept of "cost of living."
| Aeolun wrote:
| > If you require more than 100M in net worth to be
| "motivated" to work. There's a larger problem with you.
|
| How else are you going to buy a decent airplane? The nice
| ones start at a few tens of millions.
| Stupulous wrote:
| 100M in net worth would motivate me, but one of the
| differences between me and a talented CEO is that I don't
| already have 100M in net worth. Gates had well over 100M
| when Microsoft went public in 1986, Bezos had more than a
| billion when Amazon went public in 1998, Musk made 150M on
| Ebay's Paypal acquisition in 2002. We may disagree on
| whether we're better off that they continued working, but I
| don't think they would have done so as a public service
| after they capped out lifetime income.
| Apocryphon wrote:
| So you're saying all of those figures were more motivated
| by money rather than building something of value. Do you
| truly think they were more motivated by money than by
| glory, a competitive spirit, a desire for legacy?
| theptip wrote:
| > I don't think they would have done so as a public
| service after they capped out lifetime income.
|
| That is definitely the big question. Given that Gates is
| busy donating most of his cash to charity, there are
| counterexamples.
|
| But even biting the bullet and accepting the premise,
| it's not immediately obvious that losing all of the work
| from current billionaires would be a bad trade in
| exchange for substantially reduced inequality.
|
| My counterpoint is that most billionaires don't seem to
| be continuing to work hard primarily to get another
| billion. It's more for the fun/fulfillment and status. If
| they can still have fun and status even without
| controlling as much wealth they will probably still go
| for it.
| yellowbanana wrote:
| This has nothing to do with motivation,
|
| If you start a company and that company becomes succesfull
| you will end up rich.
|
| > Being a CEO/leader doesn't require some skill set that's
| given to you from some mythical watery being just because
| you're special.
|
| Controlling a company requires shares, and shares are
| networth, it is good that companies are controlled by
| people who most understand them, and those are the people
| who started/built them.
|
| There seems to be an illogical hate to people who have
| build companies that ended up being successfull.
|
| If you are a small business ( non mega successfull company
| ), everyone is with you, "Small businesses are the backbone
| of our economy ", but then you win.
| Johnny555 wrote:
| _Controlling a company requires shares, and shares are
| networth, it is good that companies are controlled by
| people who most understand them, and those are the people
| who started /built them._
|
| Voting shares don't have to have monetary value.
| Rememeber Google's IPO where the founders had stock with
| 10 votes per share, or Berkshire Hathaway's Class B stock
| with 1/10000th the voting rights as class A?
|
| So a founder could retain control of a company without
| becoming personally rich.
| xvedejas wrote:
| Aren't those classes of stock with voting power worth a
| lot more? I'm not sure how you'd possibly avoid being
| rich on paper if you have a majority voting power for
| Google.
| imdsm wrote:
| A lot of people seem to be in the mindset that it'll
| never be them so it should never be anyone else. It's not
| just in the US, here in the Uk we have the same mindset
| too.
|
| A lot of people dislike/hate Elon Musk for example, and
| usually they focus on two things: his tweets, and his
| wealth. Conveniently forgetting that prior to his work at
| SpaceX and Tesla (which he's driven) reusable rockets
| weren't a thing and EVs were restricted to oddities
| laughed at on Top Gear.
|
| It seems to be the way, people look at the wealth and
| think "well that shouldn't happen". But it doesn't come
| from no where, it doesn't just appear.
|
| For anyone who thinks this wealth shouldn't appear, let
| me ask this: if someone could discover a cure for all
| cancers -- how much should they be allowed to earn for
| it? I.E. What price would you put on the cure for all
| cancers?
| heliodor wrote:
| Taxing billionaires is a simplistic knee-jerk reaction that
| doesn't address the actual problems people have. It just
| feeds people's hate.
|
| Consider that people have a lot of problems with Amazon's
| practices. So suddenly, everyone is yelling to tax the hell
| out of Bezos. But no one has the drive to actually plug the
| holes that allowed him to make so much money in the first
| place. All kinds of employee injustices, environmental
| abuses, and whatever else pops up in the news all the time.
| Johnny555 wrote:
| I don't expect a billionaire tax to have any impact on
| Amazon's business practices, that doesn't make any sense.
| Amazon's treatment of employees is a separate issue from a
| wealth tax.
|
| I just don't think that any one person should have the kind
| of power that comes from amassing a $100B+ fortune.
| slickrick216 wrote:
| How wealthy are you? If you don't like me asking a question
| then it's a bit hypocritical to make comments about others
| wealth. If your net worth is over 100k USD I think you should
| only have 10k and the rest be stripped away from you and give
| the needy? You don't like that tough your freedom isn't
| yours.
|
| I'm honestly not trying to be confrontational but you
| shouldn't just impinge on peoples freedom to acquire wealth.
| Those who do shouldn't have any. Those who have some level
| and wealth and try it. Well they are just pulling up the
| ladder behind them.
| smsm42 wrote:
| Yes. For certain definitions of "less hard" - he probably
| would work the same time, but he would have less new
| projects, less new investments, etc. - some companies that we
| know now would not exist, because there would be nobody
| having that kind of money laying around to be spent on crazy
| projects. Coinbase would probably not exist, because people
| who were crazy enough to spend money on that kind of
| extremely risky investments would not have that money around.
| It's not that those people would be poor - no, they probably
| would still have nice mansions from those $100M they were
| allowed to keep. But they wouldn't have enough money "they
| don't need" to throw them around on highly risky and
| completely insane projects like making a platform that trades
| "currency" which relies on bunch of computers repeatedly
| running hash functions.
| jstanley wrote:
| > Will a CEO work less hard if he (and his peers) can only
| ever gain $100M in net worth before a wealth tax on assets
| kicks in?
|
| He'll certainly work a lot less hard _after_ the wealth tax
| kicks in.
| mrep wrote:
| Shit, I'd immediately retire
| bluedevil2k wrote:
| Yeah, but I'm that's the attitude that separates you from
| a billionaire. Billionaires are never satisfied with
| their net worth.
| SantalBlush wrote:
| Then another entrepreneur who hasn't yet made $100M can
| start a business in the same space. If the market can bear
| both businesses, then they both win. If it can't, then
| they're in direct competition and we're still better off.
|
| This actually sounds better than what we have now: monopoly
| as the end goal.
| jstanley wrote:
| Then why don't we set the cutoff at PS10k instead so that
| the very poorest have a chance?
|
| Or set the cutoff at just above the poorest person's net
| worth. When they make some money they won't be the
| poorest any more and next year it will be updated to the
| new poorest person's net worth. That way we make sure
| everybody has a fair chance at getting rich.
|
| Or is it possible that those who have a demonstrated
| history of wealth creation are actually better at it, and
| we're all better off if they continue to do more of it?
| Apocryphon wrote:
| Sure, we can start by applying that cutoff on those with
| the most PS10k's to spare.
| SantalBlush wrote:
| What you're describing would actually be much closer to a
| meritocracy than what we have now. The fact that your
| proposition frightens people shows that they don't
| actually want a meritocracy at all.
|
| Many of those wealth creators you describe would get
| annhilated in the markets if they were on a level playing
| field with everyone around the world.
| corrral wrote:
| That might be a good idea!
|
| Let's start at a hundreds-of-millions cutoff and see how
| it goes.
| tomcam wrote:
| There are plenty of people in the world who would think that
| anything over $500/month is way more than enough for one
| person. Should your compensation be reduced to that amount?
|
| Does someone earning more than you hurt you?
|
| Also... do billionaires employ people? Do you want their
| employees to have their jobs seized from them when the
| johny555 tax goes into effect?
| jwilber wrote:
| Awful comparison. Your number of $500 isn't possible to
| live on in much of the world. It's an artificial floor - a
| fair comparison would be one that everyone could live off
| with ease, not just your false dichotomy few.
|
| Never mind that a billionaire could live anywhere and
| literally couldn't spend all of their money if they tried.
| panda-giddiness wrote:
| > There are plenty of people in the world who would think
| that anything over $500/month is way more than enough for
| one person. Should your compensation be reduced to that
| amount?
|
| This is an absurd slippery slope, and a bizarre appeal to
| "plenty of people" to boot. There is a significant and
| categorical difference between $500/mo and $1 billion. You
| undermine your own point by not addressing it.
|
| In fact, if there were a wealth cap of $500/mo as you
| posit, it would take over 150000 years to accumulate $1
| billion, which frankly only reinforces how excessive that
| amount of money is.
| tomcam wrote:
| Who determines excessive? How do high risk ideas get
| executed when there are no billionaires?
| Johnny555 wrote:
| _How do high risk ideas get executed when there are no
| billionaires_
|
| The same way most of them do now -- through venture
| capital firms. Or maybe if they had more tax revenue, the
| US government could sponsor more speculative research and
| companies.
| Apocryphon wrote:
| It _would_ be nice if there was more public funding for
| basic research. Why aren 't the benevolent billionaires
| this thread is talking about paying for _that_?
| epicide wrote:
| Perhaps part of the problem is that we incentivize high-
| risk ideas too much.
| Johnny555 wrote:
| I think it's the opposite.
|
| I'm not talking about "Let's start a social media app for
| Aardvarks!" kind of ideas, but actual scientific
| research. We used to have pure research orgs like Bell
| Labs, but companies aren't funding pure research any
| more, so we need more investment from government. Not
| every idea should have a path to monetization before it's
| funded.
| ghshephard wrote:
| > Does someone earning more than you hurt you?
|
| Yes. Because they can afford private schooling, legal and
| medical care that the bottom 90% cannot because those
| services are privatized and only available to the very
| wealthy. If the ruling class/wealthy who controlled the
| system could not depend on their vast wealth for great
| schools for their children, health and legal protection -
| then all of a sudden the social system would be
| spectacular, and everyone would benefit.
|
| Inequality is poisonous because it creates massive
| disincentives to create a working socialized health,
| education, legal system....
| mensetmanusman wrote:
| On the flip side, the tragedy of the commons prevents
| progress in a socialized system.
|
| Game theory says there are no easy answers. Child outcome
| data suggest that strong family structures seem to have
| the most impact.
| qbasic_forever wrote:
| You can put a wealth tax on billionaires without putting
| taxes on poverty level workers ($500/month in the US).
|
| You're making bizarre nonsensical arguments here--slippery
| slope, strawman, etc.
| foobar2021 wrote:
| The top 1% complaining about the top 0.01% while ignoring
| 99% of the world is a nonsensical argument?
| tapland wrote:
| Wow, yeah. Putting it like this makes it pretty crazy
| right?
|
| You don't see your error?
| eweise wrote:
| Most of the wealth is in unrealized gains. How do tax
| that? Let's say I buy a painting for $1 and discover its
| a Van Gogh. Now its worth $50 million. Should I be forced
| to sell it to pay taxes?
| qbasic_forever wrote:
| We already have this issue for our existing tax system.
| You have to declare your income and use a huge set of tax
| rules and laws to determine your AGI and appropriate tax
| bracket. Taxing billionaires changes nothing here other
| than deciding once your AGI has enough zeros you get more
| taxes applied.
| eweise wrote:
| In this case there is no income so nothing to tax. Yet I
| would be worth $50 million and some would cry that's its
| unfair, which I think is silly.
| qbasic_forever wrote:
| Then lobby to change the tax laws, just like folks are
| lobbying to add billionaire taxes. The billionaire tax
| has nothing to do with the rich having ways of hiding
| wealth or income, deferring losses, etc. to reduce their
| tax burden. You're making an argument that obfuscates and
| obscures the real argument here that billionaires should
| not exist as they serve no utility in a society besides
| absorbing resources.
| eweise wrote:
| Not sure I understand. The laws work just like I
| described. Nothing to tax, which is the way it should be.
| qbasic_forever wrote:
| Then nothing changes in your fantastical scenario that I
| find a $1B painting in my attic and sit on it.
|
| What we're talking about here is when people like Jeff
| Bezos have billions of dollars of income--direct income
| from gains realized in asset sales, income generated from
| property, stock sales, salaries, etc.--we shave a
| significant portion of those gains off in a wealth tax.
| eweise wrote:
| Well that's just another unworkable scheme. The income is
| already taxed at the highest rate so what you're
| suggesting is base the income tax rate on how much a
| person is worth, like if they are a billionaire make the
| tax rate 99%. How would the IRS determine a person's
| financial worth without doing a complete audit of all
| their assets? That could take years for a billionaire.
| matwood wrote:
| Then you can borrow against the Van Gogh for the rest of
| your life and likely never pay taxes. Then when you die,
| assuming your Van Gogh minus what you borrowed to live is
| less than the estate tax exemption (today it sits ~$12M
| or $24M if married) you can pass on the $12M/$24M to your
| kids federal tax free. Is that fair? IDK.
| eweise wrote:
| Well estate tax is a different matter. I think its in the
| best interest of the country to tax estates heavily above
| a certain limit to help eliminate royalty in the US.
| elefanten wrote:
| That was clearly not the point. The point is there's
| always someone with a different bar for what is excessive
| wealth. Chances are that 80%+ of the world population
| would find your income staggering, the same way you
| consider a billionaire's wealth staggering.
|
| So how do you decide who's scale to use?
| Apocryphon wrote:
| Stunned that a community of software engineers is
| forgetting the top-down approach to algorithm design.
| qbasic_forever wrote:
| We already have a tiered system of taxes in the US. We
| don't tax everyone 50% because the average US wage is
| 100x that of a third world country average wage. It's
| possible to examine only the US wealth distribution and
| make choices about taxing the highest of the high earners
| there in isolation of all other earners in the world.
| panda-giddiness wrote:
| > So how do you decide who's scale to use?
|
| Like the way all other murky subjects are settled, you
| just decide on one. We don't legalize murder just because
| some slayings are justified. The existence of grays areas
| does not preclude the black and white.
| nightski wrote:
| Wealth taxes seem so dumb to me. In many cases it's
| forcing sale of private or public company ownership from
| those who know the company best often to - you guessed it
| - institutional investors. It's bad enough how much
| control institutional investors have, but to force it by
| law seems even more ridiculous.
|
| There has to be a better solution.
| shigawire wrote:
| Better solution - sell off the company to the employees.
| This way you also promote worker ownership.
| planb wrote:
| You had me for one second with that argument. But if you
| sell off your company, you would still get rich and be
| taxed - so why wouldn't you stay on board and your goal
| is not to get richer, but to create the best business you
| can?
| spullara wrote:
| You have to sell the business to pay the tax. That is why
| wealth taxes are pretty dumb without carve outs for many
| kinds of assets.
| FabHK wrote:
| Why not sell 49% of the business?
| kansface wrote:
| The percentage doesn't matter. You have to pay taxes on
| the stock you own (ie, your startup). You do that by
| selling the stock. As the value of the company increases,
| you are forced to sell off increasingly large chunks of
| your stake to pay the bill thereby loosing ownership
| (control) in the process.
| FabHK wrote:
| With an estate tax, the value is assessed once, I'd
| assume (at death/inheritance), then due to be paid. You
| might have to sell of a third or whatever of the
| fortune/company, and keep the majority.
|
| Sure, over successive generations, the family might lose
| control of their original fortune/company, but that is
| compatible with the intention of the tax.
| kansface wrote:
| You'd lose control much, much faster than that at the
| sort of rates being proposed. Even 1% per annum would
| destroy control well within a career, let alone a
| generation considering exponential growth.
|
| edit: Just noticed that you are talking about estate
| taxes and I'm talking about wealth taxes...
| lr4444lr wrote:
| To the concentration of wealth? Like what? Wish their
| was, but I haven't heard of it.
| Swenrekcah wrote:
| This is the real problem. In theory it could be argued
| that a wealth tax and estate tax are the only really fair
| taxes in a capitalist economy.
|
| He who owns then capital is king, so tax the capital.
|
| But in reality it would as you say force all sorts of
| unwanted liquidation and monetisation of assets just to
| pay the tax.
| hpkuarg wrote:
| Land value tax is the only really fair tax.
| eropple wrote:
| I used to think this, but over time I changed my mind.
| Plenty of capital, particularly in an increasingly
| digital economy, requires no land, and ignoring that
| privileges that digital capital even more than just not
| being tied to physical space does already.
| Grustaf wrote:
| There's a pretty long jump from banning billionaires to
| capping monthly salaries at 500 dollars.
|
| Nobody makes billions by "earning more than you", they make
| it my owning companies, or funds, so this has nothing to do
| with salaries.
|
| But the fact is that the existence of billionaires hurts
| everyone, especially in poor countries, but also definitely
| in the US. Now I'm not talking about the ethics of some
| people wallowing in wealth why others are starving, the
| biggest problem is that when you reach a certain level of
| wealth you can start influencing, or even controlling,
| public policy. This obviously has the effect that public
| funds are diverted away from the public into their pockets.
| In the third world this process is quite direct, in the
| rich world it's more about enacting policies that benefit
| these oligarchs, at the expense of everyone else.
|
| This is a huge problem.
| hourago wrote:
| > Does someone earning more than you hurt you?
|
| The economy is not a zero sum game. But billionaires are
| getting all the growth while middle class and the poor see
| their share of the economy shrink.
|
| This is not about my neighbour earning more than me, it's
| about corporations that take over big chunks of the
| economy.
| its_ethan wrote:
| > billionaires are getting all the growth while middle
| class and the poor see their share of the economy shrink.
|
| In your own sentence you had to use specific words "their
| _share_ of the economy shrinks " can be true, while their
| wealth increases. The economy is not a zero sum game. The
| middle class could see their share of the economy
| increase while also having standard of living, total
| wealth, etc. all decreasing.
| mrcheesebreeze wrote:
| ryandrake wrote:
| > There are plenty of people in the world who would think
| that anything over $500/month is way more than enough for
| one person. Should your compensation be reduced to that
| amount?
|
| This is rhetoric that tries to confuse two totally
| different scenarios in order to convince the majority to
| oppose something that only hurts a tiny minority. Saying
| "one person should not have 5 generations worth of wealth"
| is not the same thing as saying "people should not make a
| middle class salary". They aren't even similar. If there
| was any place on earth where $1,000,000,000 was comparable
| to $500/month in any way, you might have a point.
|
| > Does someone earning more than you hurt you?
|
| Yes. Without a doubt. Wealth is freely convertible to and
| from political power, so outsized wealth translates into
| outsized political/lawmaking power, which affects us all.
|
| Let's make an extreme example if you don't believe me:
| Should sextillionaires exist? Do you think that maybe, just
| maybe, someone having $1,000,000,000,000,000,000,000 might
| have a negative effect on other people's lives?
|
| > Also... do billionaires employ people?
|
| Some do, some don't. Some non-billionaires employ people,
| some don't. Employment was around long before billionaires.
| It's not a requirement.
|
| To me, wealth should be like the speed of light. There
| should be a limit, and it should be increasingly harder and
| harder to approach (but never achieve) that limit as you
| get wealthier. Not sure how you'd actually implement such a
| Lorentzian economic speed limit, but it seems fair to me.
| Make the limit high enough where at 99% of it, you can have
| your needs and your family's needs fully met in the most
| expensive neighborhood on earth, or whatever.
| ipaddr wrote:
| Those are just round zeros. You could obtain that much
| money in some African countries over the last 50 years
| for a few dollars. The latest cryto coin could give you
| that many coins. But these are numbers trying to
| represent wealth.
|
| Any cap you put on the top could have the effect of
| reducing the value of a currency meaning the buying power
| doesn't change. A billion cap would make your million
| dollar house worth $100. However you slice it you are
| poor and someone else is rich.
| jquery wrote:
| Seems like sextillionaires were pretty awful for the
| economic stability of those African countries. You just
| reinforced GP's point.
| [deleted]
| xtracto wrote:
| > There are plenty of people in the world who would think
| that anything over $500/month is way more than enough for
| one person. Should your compensation be reduced to that
| amount?
|
| Disclaimer: I live in a 3rd world country and my salary is
| 1/3 of what the standard US salary is.
|
| YES, I do believe that everybody's compensation (including
| mine) who are in the top 10% of the population should be
| decreased/limited. Provided that their living costs are
| adjusted so that the $500/month get you similar standard of
| living to other nice places (say, Chile, Mexico, Spain,
| Portugal, etc).
|
| The top 10% of the population hold 70% of the total wealth.
| That's just crazy and unsustainable. How the 90% of the
| population haven't turned on us is just sheer luck and a
| political, security system that is rigged in our favor.
|
| I would be happy to be part of a "pay cut initiative" for
| all the top 10% earners, if it meant equalizing
| opportunities for everybody. I had the opportunity to grow
| up and be friends with poor people who just did not have
| the chance to succeed, so I don't believe the "poor people
| are just lazy" narrative. There's good hard working people
| that just never had a chance. Similarly how there is bad
| rich people that just want to leech from others.
| chrisseaton wrote:
| > The top 10% of the population hold 70% of the total
| wealth. That's just crazy and unsustainable.
|
| Been sustained so far throughout all of human history.
| ggpsv wrote:
| Quite the opposite actually. "all of human history" spans
| at least 160,000 years and the inequality that you and
| the parent comment to are alluding to is a rather modern
| artifact.
|
| I'm not trying to be pedantic, but this comment
| contributes to pernicious myths about the human
| condition. If you're interested in this subject I would
| recommend the book "The Dawn of Everything" by David
| Graeber and David Wengrow.
| MisterBastahrd wrote:
| Might want to check your history books, because mine are
| full of failed empires and revolutions.
| chrisseaton wrote:
| When they failed... did wealth redistribute, or was the
| bulk immediately claimed by someone else? What examples
| of civilisations without unequal wealth distribution are
| you thinking of?
| criley2 wrote:
| Historically it was much, much worse. The only way you
| can make an argument for saying inequality is greater now
| (when global poverty/subsistence farming is at the lowest
| % since human settlement 12000 years ago) is to point to
| the sheer amount of wealth we generate compared to any
| other period and nit pick about it's allocation. That's
| fine, but if you want to go back to farming for your
| life, like most humans for most of history, you'll
| probably find it a worse life than being in a developed
| country middle class, even if "your wealth is technically
| more equal to a king than a middle class to a ceo"
| RyanHamilton wrote:
| What source are you basing that on? You can find
| countless sources that show the 0.1% owning an ever
| greater share:
| https://www.theguardian.com/business/2014/nov/13/us-
| wealth-i... "Over the past three decades, the share of
| household wealth owned by the top 0.1% has increased from
| 7% to 22%."
| criley2 wrote:
| I'm basing that on global numbers, not national numbers.
| Sure, I don't doubt that in developed economies
| inequality is getting worse.
|
| But in the past 4 decades, I'll remind you that around
| 800,000,000 Chinese (that's eight hundred million people)
| were lifted above the global poverty line and were able
| to stop subsistence farming.
| https://www.worldbank.org/en/news/press-
| release/2022/04/01/l...
|
| So to say that global inequality is getting worse, when
| billion+ have been lifted out of abject poverty in that
| time, it's not correct to me. Things were worse 40 years
| ago when billion+ more humans were below the global
| poverty line, even if today billionaires are even richer
| than the middle class.
| owisd wrote:
| There's a good video on how that $1.90 is arbitrary and
| too low, and if you try to come up with a poverty line
| from first principles, you end up more in the $5-$12
| range, where it doesn't paint such a great picture.
| https://www.youtube.com/watch?v=fo2gwS4VpHc#t=19m16s
| [deleted]
| pojzon wrote:
| Thats completely true, tho a peasent was working for his
| master a lot less than we currently do for our masters.
|
| When we get 3days work week and 4 days of ,,time for my
| stuff" we can go back to discussing that.
| vkou wrote:
| The peasant was working for their master a lot less
| because if the master asked for more, the peasant would
| literally starve to death, because he wouldn't have
| enough hours in the day to work for himself.
|
| The ruling class will happily soak up all spare
| productive capacity - and as the amount of work necessary
| to keep someone clothed, sheltered, and fed went down,
| that spare productive capacity grows, and more of it
| flows upwards.
| pojzon wrote:
| Ok now how really it did look in history:
|
| Landlord was lending land to peasents - rich peasents,
| because bottom cast did not even have a chance to talk to
| landlord.
|
| For the land peasents got, they had to work for the
| landlord specific number of days in a week. For some time
| it was 1-2-3-4-5 days per week. Most common was 3 days.
|
| Thing is - the peasent was not obligated to do that work
| himself. He could have sent a son, family member or even
| hire someone.
|
| That way it was super easy to keep his agreement with the
| landlord while mostly focus on his own farm.
|
| Who had it terrible were bottom, poor peasents that
| worked for other peasents.
|
| They did not have their own land and were at mercy of
| their "master peasents".
|
| They most likely had to work whole week or 5-6 days.
|
| They were more of a slave than a peasent tbh, but its a
| hard disregarded truth.
|
| Current middle class in our times could be translated to
| "master peasents" back in time. Slave peasents would be
| the slave-wage ppl.
|
| When I discuss or compare medival peasents to current
| corporation workers I always compare master peasents to
| corposlaves.
|
| And master peasents had it super better than corposlaves
| do now.
| criley2 wrote:
| The subsistence farm does not wait for your days off. You
| will live your life according to its schedule, and it
| does not care about sick days or vacation.
|
| To claim that an impoverished serf working land "had 4
| days off a week" is nonsense. They worked hard af for all
| sunlight hours for some seasons, and had plenty of
| leisure in times like the winter. On average, maybe
| that's 4 days off, but let's not pretend that working the
| land is not back breaking work. It's not leisure. If you
| really think some 40 hour wfh coding job is harder work
| than farming for your life, then there's no law saying
| you can't buy some land and go off grid. You're welcome
| to subsist. Hell you could land a few million subs on
| youtube airing the experience, that category is all the
| rage these days
| pojzon wrote:
| > To claim that an impoverished serf working land "had 4
| days off a week"
|
| Well.. noone said that. If you mind reading the comment
| again.
|
| But its true that peasents had a lot more time to work on
| their own stuff than on what master told them to do.
|
| Either way most peasents worked for higher tier peasent
| because landlord often has hubdreds of hectars of land.
| its_ethan wrote:
| Grustaf wrote:
| That particular ratio, if true, is not the issue. Someone
| being one order of magnitude richer than someone else
| does not necessarily damage society, the problem is how
| much the richest 0.1% control.
| dylan604 wrote:
| with minor blips where the peasants revolt and take out
| those above them only to settle back under the rule of
| someone new. it is a minor annoyance to those amassing
| wealth to keep in mind.
| chrisseaton wrote:
| Never really happened in my country. The second tier
| complained at one point, and peacefully reached an
| agreement with the top tier (Magna Carta.) Other than
| that top families basically unchanged 1000 years.
| Apocryphon wrote:
| Uh, what about the time that Parliament decapitated the
| king and established a Puritan dictatorship for a minute
| chrisseaton wrote:
| > for a minute
|
| Exactly. Didn't really change which broad group of
| families were in control (some were lowered a peg through
| taxes for supporting the wrong side.)
| jjulius wrote:
| >Never really happened in my country.
|
| >Other than that top families basically unchanged 1000
| years.
|
| So we've shifted the goalposts from "all of human
| history" to "in my country" and only for the past "1000
| years".
| chrisseaton wrote:
| > So we've shifted the goalposts
|
| No... why do you think that?
|
| > The top 10% of the population hold 70% of the total
| wealth.
|
| That's basically been the case everywhere, all the time.
| In other countries the 'top 10%' has changed hands
| through revolution, war, etc, but it's still 10%
| controlling 70% (or whatever) - because they take the
| last 10%'s 70% and carry on! No goal posts moved there.
|
| Someone asked a separate question about revolution, and I
| said even that's not successfully happened where I live.
| I wasn't making a broader point with that answer to that
| question.
|
| > "all of human history" to "in my country" and only for
| the past "1000 years"
|
| I mean... are you under some sort of misapprehension that
| before 1000 and outside of the UK there was some kind of
| democratic socialist consensus? Fraid not.
| jjulius wrote:
| It's fairly simple, really. You said that wealth ratios
| have remained the same "for all of human history".
| Someone came back and pointed out that it hasn't always
| remained that way and there have certainly been blips.
| You then responded by saying "not in my country" for the
| past "1000 years".
|
| Well, according to your first assertion we're not
| supposed to cover only your country for the past 1,000
| years. We're supposed to cover all of human history -
| every nation, as far back as at least 10,000BCE.
| chrisseaton wrote:
| Think you're mis-reading or misunderstanding!
|
| > Someone came back and pointed out that it hasn't always
| remained that way and there have certainly been blips
|
| The blips didn't change the ratios though. Ratios have
| stayed the same.
|
| > You then responded by saying "not in my country" for
| the past "1000 years".
|
| Yeah - my country hasn't really had those blips. And the
| blips in other countries didn't change the ratios anyway,
| just transferred who owned them, so it was a separate
| point.
|
| > Well, according to your first assertion we're not
| supposed to cover only your country for the past 1,000
| years.
|
| No it was a separate comment and point!
| FabHK wrote:
| I am fairly sure inequality is more extreme than that
| (top 10% hold 70%) at the moment, and it was less bad in
| the second half of the 20th century. The top US marginal
| income tax rate was 90% in the 1960s, and 70% in the
| 1970s, and it did not seem to discourage GDP growth or
| innovation.
|
| https://www.taxpolicycenter.org/statistics/historical-
| highes...
| Aarostotle wrote:
| We live in the most equal time in human history. The
| actual standard of living of the average person in most
| developed countries rivals that of royal families from
| just a couple of centuries ago.
|
| Don't confuse monetary inequality with _wealth_
| inequality. Measure by the standard of living, not
| monetary units.
|
| What are the actual differences between the life of the
| average American worker and Jeff Bezos? It's not that
| big. Jeff Bezos has the ability to buy luxuries most of
| us could never dream of, sure, but what about the
| essentials?
|
| Nearly everyone can get fresh, nutritious meat, as well
| as fruits and vegetables. High quality milk and dairy
| products. Frozen goods. Bacterial epidemics are unheard
| of. Our recent viral pandemic increased annual deaths by
| about 10-15% over baseline -- compare this to epidemics
| which used to wipe out entire populations. Life
| expectancy for all people, regardless of class, ranges
| between 2-3x human life expectancy in a state of nature
| (roughly 30 years). You can travel hundreds of miles in a
| day for only a few hours of labor worth of money. You can
| cross continents or oceans with a few day's of labor
| worth of money.
|
| Sure, Bezos can have a fancier car with someone driving
| or his own jet with a pilot flying, but at the end of the
| day, you can both take off from LAX and land at JFK 6
| hours later. You're both going to eat 2,000 calories of
| nutritious food. You both have running water. And, you're
| sitting here, both able to communicate with everyone in
| the world instantly.
|
| Let's not buy into the political propaganda about
| inequality, the reality of the situation is right in
| front of our eyes.
| SketchySeaBeast wrote:
| Lots of America struggles under the weight of trying to
| pay for basic health care and dental (50% of Americans
| have medical debt[1]) and for many education is utterly
| out of reach. 11.4% of America lives in poverty (poverty
| being defined as "a lack of those goods and services
| which are commonly taken for granted by members of
| mainstream society"). It's disingenuous to look at the
| state of things and say that because we have cellphones
| and cavemen didn't we're all doing fine.
|
| [1]
| https://www.forbes.com/sites/debgordon/2021/10/13/50-of-
| amer...
| memish wrote:
| They struggle more with being overweight. Most humans in
| most of human history struggled with having enough food
| and water to survive. They would trade their struggle for
| ours in a heartbeat.
|
| Americans are the people who complain when the wifi goes
| down or someone says the wrong word.
| SketchySeaBeast wrote:
| And cavemen would have thought the Roman's life pretty
| good too, but I don't know how that relates to the
| average American and billionaires unless it's an attempt
| to silence people and tell them to know their place.
| Societal inequality can still be a very real issue even
| if we're collectively on average doing better than a 19th
| century chimney sweep.
| Grustaf wrote:
| The problem with rich people is not that they live too
| comfortably, but that a person like Bezos can buy an
| important media property and control the political
| narrative that millions of people are exposed to.
| ryandrake wrote:
| > What are the actual differences between the life of the
| average American worker and Jeff Bezos?
|
| Here are just a few massive differences between the life
| of the average American worker and Jeff Bezos that have
| nothing to do with buying luxury goods:
|
| 1. Jeff Bezos can get an audience with any
| Congressperson, any State governor, most countries's
| heads of state and probably the President of the US, with
| a telephone call and likely with less than 24 hours
| notice. That person will listen to and likely be
| influenced by what he says.
|
| 2. Jeff Bezos's public statements can move global
| financial markets.
|
| 3. Jeff Bezos can (and does) own and control mass media
| companies which can amplify and downplay political issues
| and shape the outcomes of elections.
|
| 4. Through philanthropy, Jeff Bezos can, if he wants,
| simply decide what counts as a "public good" to be funded
| and supported, as opposed to the public deciding through
| the democratic process. Bezos is capable of offering an
| amount of support for his causes that dwarfs government-
| funding. We are merely lucky that billionaire
| philanthropists have so far focused on good things like
| curing malaria and not on evil.
| chrisseaton wrote:
| > Jeff Bezos can get an audience with any Congressperson,
| any State governor, most countries's heads of state and
| probably the President of the US, with a telephone call
|
| Can he?
| LunaSea wrote:
| Didn't you see how US state politicians danced to get the
| new Amazon offices located in their state?
| chrisseaton wrote:
| So some politicians took calls when it was directly
| relevant to their area of concern?
| its_ethan wrote:
| None of what you've said about Bezos is dependent on him
| having wealth though. If you could somehow construct a
| functioning society without money, there would still be
| _someone_ who has the exact same power /influence that
| you've described here.
|
| Basically, when you remove money, something else becomes
| the currency you're describing. Taking away billionaires
| wealth might actually make it harder to identify the
| people who have this influence. Rather than news outlets
| writing articles every other day about Jeff, you'd have
| some shady person high up in some unelected bureaucracy
| getting to wield this power. How is that better?
| kansface wrote:
| No one actually paid those rates, so it goes. The
| narrative is that part of lowering the rates was closing
| the loop holes...
| its_ethan wrote:
| Just curious, if 10% of people holding 70% of wealth is
| unreasonable, how do you reconcile 1% of Spotify artists
| getting 90% of all "streams"?
|
| Basically, you're saying that the current distribution is
| crazy/unsustainable (and maybe it is) but the
| distribution is actually not totally out of whack with
| the 80/20 rule (or Pareto principle).
|
| Just wondering where your confidence comes from that a
| functioning society doesn't actually depend somewhat on
| that distribution? i.e. that the general populace's sense
| of "fair" isn't _actually_ correctly calibrated at this
| distribution?
| wwarner wrote:
| Actually, it's not simply the proportion, but the fact
| that over time the proportion of wealth held by the
| richest has been growing really fast. So, to use your
| analogy, I agree that a small number artists commanding
| the lion's share of attention can be fair, but if over
| time, an ever smaller number commanded an ever greater
| share, very soon every one would be listening to one
| artist and one song, and fair or not I don't think that
| would be good for Spotify, audiences, artists or anyone
| else.
| its_ethan wrote:
| I think there's a valid point here, but I also think (at
| least anecdotally) that we are trending in the direction
| of _more people_ listening to _fewer songs_. (Would love
| to see some Spotify data on that front lol)
|
| I would argue that it's not going to collapse to 1 artist
| or 1 song for a similar reason that all wealth will never
| be in the hands of 1 person. If the rate of change (or
| just raw distribution) in wealth is unhealthy, that will
| present itself in the form of a less healthy economy.
|
| That will likely cause a bit of a churn and
| redistribution to sort of self correct. There's also the
| fact that wealth typically doesn't survive through
| generations all that well. If this _didn 't_ happen, the
| Rockafeller's/ Vanderbilt's/ Carnagie's from the past
| would still have the top wealth holdings - sure they are
| still incredibly well off and have a huge advantage from
| family name, but per a Forbes list none of them are in
| the top 2500 wealthiest.
| criley2 wrote:
| The problem isn't the 91% to the 99% in my opinion. In
| the United States, the 99th percentile for income is
| ~$300,000, which is a ton of money in a low cost of
| living (rural) area and a decent amount of money in a
| high cost of living (urban) area.
|
| But these are not the "capitalist class". They don't own
| significant portions of a company unless they started a
| small business (a lawyer or doctor running their own
| practice). They also generally had to go through an
| enormous burden to get there. A doctor for example might
| be nearly 40 years old with $500,000+ in debt before
| they're making $300k, and many doctors will never make
| that much, period.
|
| The funny part of "limiting income" is that it only
| affects the working rich, not the capitalist class. Steve
| Job's salary was $1 and many CEO's famously have
| basically no salary and compensation in stock.
|
| So what do you do? Tax their stock sales? We do and
| should do more. Force them to sell their stock for the
| benefit of the taxpayer? Ban them from even owning large
| amounts of the company? Have the government automatically
| own part of the company? All of these sound yikes to me.
| Phenomenit wrote:
| The same limits can be applied to organizations and
| constellations of organizations.
| toephu2 wrote:
| > if it meant equalizing opportunities for everybody
|
| It doesn't though. Taxing the rich, limiting the
| existence of billionaires is not going to do anything for
| equalizing opportunities.
|
| If you think so, then please tell me the name of one
| efficiently-run government organization?
| Johnny555 wrote:
| _If you think so, then please tell me the name of one
| efficiently-run government organization?_
|
| Why is government judged on efficiency rather than
| service?
|
| If there's a government agency with money to give to
| vision impaired people, and they set up a website
| (graphics heavy, non-ADA compliant of course) as the only
| way to sign up for the payments, that department would be
| extremely efficient - they might only be able to reach a
| fraction of their target market, but they'd do so very
| efficiently with little overhead and they'd even have
| money left over since they had so few applicants, so they
| could cut the budget next year!
|
| In contrast, if that same agency took $100M of their fund
| to set up offices across the country, and hire outreach
| staff to drive to the homes of qualified applicants to
| help them apply, that wouldn't be very efficient, but it
| would provide better service.
|
| Government is not a business and shouldn't be run like
| one.
| dlp211 wrote:
| > If you think so, then please tell me the name of one
| efficiently-run government organization?
|
| Please let this trope die. The US government is
| generally, and especially when it comes to welfare
| programs, efficient.
| toephu2 wrote:
| Welfare is one of the least efficient government programs
| in the U.S. It's rife with corruption. What makes you
| think it's efficient?
|
| "It currently stands at about 25 percent, as did in the
| 1970s. This means the ability of the poor to sustain a
| higher level of income independently of transfers has not
| changed over time."
|
| [1] https://www.richmondfed.org/publications/research/eco
| nomic_b...
| fallingknife wrote:
| All of my experience dealing with the government says the
| exact opposite.
| corrral wrote:
| > It doesn't though. Taxing the rich, limiting the
| existence of billionaires is not going to do anything for
| equalizing opportunities.
|
| > If you think so, then please tell me the name of one
| efficiently-run government organization?
|
| How are these two passages connected? If there's one
| efficiently-run government organization (there are, even
| in the US--benefits programs tend to be quite efficient,
| contrary to "common knowledge") then that proves... what?
| That taxing the rich would equalize opportunities? The
| two things have practically nothing to do with one
| another.
| int_19h wrote:
| Someone _earning_ more doesn 't hurt me.
|
| Someone taking the wealth that other people have produced
| with their labor is not earning, though. And a lot of us do
| think that _earning_ 300x what the average worker does is a
| physical impossibility.
| Johnny555 wrote:
| _There are plenty of people in the world who would think
| that anything over $500 /month is way more than enough for
| one person_
|
| You're not making a serious point if you're looking at
| world income to guide policy in the USA, or any other first
| world country, you're just making up a strawman.
|
| _do billionaires employ people_
|
| I'm sure they have a small household staff, maybe security,
| yacht staff, private pilots, so maybe in the small
| hundreds.
|
| But Tesla employees a 100,000 people, SpaceX employes
| 10,000 - both of those companies would exist regardless of
| Elon Musk's personal wealth. In fact, having so much wealth
| in one person is a liability to the company -- Musk can
| singlehandedly tank Tesla's stock.
| oh_sigh wrote:
| I'm just a run of the mill average joe, who has a rock that
| has been in my family for generations. Turns out some weird
| little cult likes my rock and wants to buy it for $1B.
|
| Should I be forced to sell my rock, because I'm getting a
| $500M tax bill from the government because some weird little
| cult said they would pay $1B for it - regardless of whether I
| want to sell my rock?
| yunohn wrote:
| I love how this thread is full of people simping for
| billionaires with absolutely ridiculous strawman scenarios
| like this one...
| googlryas wrote:
| Can you explain how it is a strawman? Someone else
| accused it of being a strawman, but then could only claim
| that it is "contrived", which is not the same as a
| strawman.
|
| So where's the strawman? Would the person in this
| scenario not be affected by a proposed wealth tax?
|
| Also, I don't really get how it is "simping for
| billionaires" in the slightest. If I said that
| billionaires shouldn't be pulled from their mansions and
| lynched, am I simping for them too?
| owisd wrote:
| It's not a straw man, I believe a better idiom would be
| 'the tail wagging the dog', i.e. you're using an extreme
| edge case to argue against the big picture proposal. A
| real tax would include the small picture details: payment
| plans, equity swaps, valuation tribunals, etc to cover
| the oddball cases. But none of that would matter, you
| would sell it and net the $500M.
| googlryas wrote:
| Even with payment plants ,equity swaps, valuation
| tribunals, it would still be the case that someone with
| more money than me can force me to sell anything I own to
| them, by placing a value higher than I can pay on it?
| evanlivingston wrote:
| Yes?
|
| Whether you're receiving the value of the asset or not,
| you're locking up the value of the asset and preventing a
| larger group of people from benefiting from the value of
| the asset, which is sort of the point of a wealth tax.
| Kon5ole wrote:
| The actual value being locked up is surely held by the
| cult, not the owner of the rock? They're the ones who
| claim to have a bn to spend on a rock after all, the
| other guy just has a rock. Why can't the cult spend their
| money on something better than the rock in the first
| place?
|
| In actuality it's not a rock of course. For a founder of
| a company the situation is more like you've spent most of
| your life building something you believe in and suddenly
| you have to sell it because a group of strangers believe
| that your thing is worth more money than you've ever seen
| in your life, and the government wants taxes based on
| that belief. That seems fundamentally unfair and wrong at
| least to me.
| oh_sigh wrote:
| What is the locked up value of the rock? I like it
| because it reminds me of my grandfather, and the cult
| that will buy it will lock it in their storage room.
|
| My point is: With a wealth tax, anyone with money can
| take anything they want from anyone without money, even
| if the person without money doesn't value something in
| the same way that the person with money does.
| dlp211 wrote:
| This is a contrived example that you've twisted yourself
| in knots to try and justify. There isn't a person on this
| planet that wouldn't sell an heirloom for $1 Billion
| unless the heirloom was actually worth ballpark $1
| Billion.
|
| The people that wouldn't sell it for a $1 Billion are the
| people that would give it a way for free, ie: those that
| have little value for money.
| dcow wrote:
| No it's really not. It's an illustrative example of how a
| wealth tax would (fail to) work. The issue at the core is
| that items only have value while they are exchanged. Fiat
| is the only thing with the characteristic of persistent
| value. So trying to tax standing wealth is fraught
| because wealth doesn't actually exist in that form.
| Apocryphon wrote:
| Then simply don't tax fixed assets. Sure, sure, then
| people will simply avoid taxes by converting cash and
| other assets into properties that are not directly
| taxable, but that's just how these cat-and-mouse games
| go.
| Johnny555 wrote:
| _Should I be forced to sell my rock, because I 'm getting a
| $500M tax bill from the government because some weird
| little cult said they would pay $1B for it - regardless of
| whether I want to sell my rock?_
|
| If you don't want to sell your rock, then set up a family
| trust to hold the rock with the provision that it can never
| be sold, then the rock will have effectively zero taxable
| value and you can keep it in the family forever.
|
| If you don't want to do that because you might want to sell
| it some day, then it's not really a family heirloom, it's
| an investment.
|
| Or, put the rock in a trust, tell the cult that they can
| take ownership in 100 years and have access to it once a
| year for ceremonies if they'll pay you $100M today.
| trgn wrote:
| There's a great thought proposal on how to tax assets
| fairly. In this system, you are taxed at the self-assessed
| worth of an asset. However, if somebody bids over that
| price, you are obliged either to sell it to them, or raise
| your self-assessment.
|
| It's somewhat of a game (joke perhaps), usually used in the
| context of ways to fairly assess land value.
| flashgordon wrote:
| So here is the thing. Your rock, your wish. It is wierd
| when you get to take interest free lines of credit on the
| 1B valuation on the rock and never pay the 500m in taxes :)
| adastra22 wrote:
| Either the rock gets sold and the income is realized and
| the taxes are paid then, or the rock ends up being
| worthless and the loan margin called for possession of
| the rock and the remaining value is taxed as income.
| Either way the taxes get paid in the end.
|
| Tax deference is not tax avoidance.
| whimsicalism wrote:
| I have the rock, it is now worth 1 billion dollars. I
| take out a 50 million dollar loan from the rock and put
| it into the stock market, which lets say has 2% average
| real returns over interest (probably low if i have 1
| billion in collateral).
|
| I pass the rock on to my children and die 20 years later.
| The 50 million is now worth 74 million.
|
| Both the rock and 74 million are stepped up to their
| current value when I pass it on to my children. The
| children repay the loan with their 50 million and now
| have 24 million and the 1 billion dollar rock still, tax
| free.
|
| How is that not tax avoidance?
| adastra22 wrote:
| Your issue here is the cost-basis step-up on inheritance,
| not anything to do with loans.
| whimsicalism wrote:
| I was just explaining how tax deference can be tax
| avoidance.
| trgn wrote:
| That's the key one.
|
| The tax code, today, in practice, already frowns very
| much on tax deference, and tries to inhibit it when
| possible. The AMT-schedule is purposely designed to pull
| tax forward, and precisely discourage strategies for tax
| deference e.g. to counter the abuses that would arise by
| using stock-based (or cult rocks) compensation to avoid
| income tax.
|
| Property tax (which is a wealth tax) is another way to
| siphon off tax on unrealized wealth.
| whimsicalism wrote:
| AFAIK neither of those things would stop the scheme I
| just described.
| trgn wrote:
| I'm not disagreeing with you. I only added that, from a
| tax collector perspective, tax deference and tax
| avoidance are on the same spectrum, and they will seek
| out mechanisms to make deference impossible. I gave an
| example of one of these mechanisms at the federal level
| (AMT) and one at the municipal level (property tax). But
| yes, doesn't mean there are other strategies to defer
| ("avoid") taxes still left.
| flashgordon wrote:
| So taking the avoidance vs deference analogy. If I borrow
| money for car, house, boat, plane tickets, but never have
| to pay it back where does that leave my obligations?
| adastra22 wrote:
| You do have to pay back eventually though. Why are you
| assuming the loan never comes due or is margin-called?
| thefaux wrote:
| Why is the rock yours? How did your family attain ownership
| of it? If the rock means little to you, why should you have
| it rather than the cult that actually values it? What if
| the cult wants to preserve the rock but you want to destroy
| it even though that will cause great pain to those who care
| about it? Why should you have permanent ownership of a rock
| just because your parents had it?
| oh_sigh wrote:
| > Why is the rock yours? How did your family attain
| ownership of it?
|
| The rock is mine because my family bought land a few
| hundred years ago, and the previous owner thought the
| rock was ugly and let it for us.
|
| > If the rock means little to you, why should you have it
| rather than the cult that actually values it?
|
| The rock means a lot to me, because it reminds me of my
| ancestors. I value it, but I just don't have a billion
| dollars to attach to it as its value.
|
| > What if the cult wants to preserve the rock but you
| want to destroy it even though that will cause great pain
| to those who care about it?
|
| I dunno. I think it is my rock and I can do with it what
| I want. But I don't want to destroy it, I just want to
| keep it where it has been for the past 200 years, near my
| family home's fireplace.
|
| > Why should you have permanent ownership of a rock just
| because your parents had it?
|
| Because that's how ownership works. If anyone can come
| take anything from you at any point, then I don't think
| you can ever be considered to own something.
| elefanten wrote:
| You set the table to abolish the notion of property. It's
| hard to extrapolate what effects that would have on
| modern societies... it hasn't really been tried. I'm not
| saying it's an inherently bad idea, but the proponents of
| that kind of idea always seem to paint rosy visions based
| on extrapolations from inappropriate samples.
|
| Maybe you can say you don't have to fully abolish
| property. But it remains especially hard to predict what
| second order behaviors any particular implementation
| would bring about, and what steady state would result
| from them.
|
| Per your example, if the expected ruling of society would
| be that gp doesn't get to keep the rock because they
| don't "care" about it... well, maybe people in their
| position would suddenly find themselves caring about the
| rock very greatly. Not even cynically -- if the choice
| presented to you is "value or no value", the limbic
| system suddenly becomes very persuasive.
| Apocryphon wrote:
| This strawman parable is so elegant in its contrivance that
| it deserves a Nebula Award.
| googlryas wrote:
| Can you explain how it is a strawman? I've never seen any
| kind of wealth tax proposed that takes into account how
| the wealth was acquired, or what form the wealth was in.
| Apocryphon wrote:
| It is an incredibly contrived, fantastical scenario that
| is too grating to even consider.
| googlryas wrote:
| Of course it is a contrived, fantastical scenario. But
| the point is: Does it meaningfully deviate from the key
| points for any wealth tax scenario?
| Apocryphon wrote:
| A wealth tax scenario, like all taxes in real life, will
| have its share of exceptions, carve-outs, and loopholes.
| Meaning the wealth assessment process will inevitably be
| far more involved than "a weird little cult offered a
| billion dollars for it."
|
| Now, from a parable perspective, does the post mirror the
| _principle_ of how wealth taxes work? Maybe, if you 're
| willing to equate _the entire market_ (or whatever
| communal entity we 're using for the basis of assessment)
| to a weird little cult.
| googlryas wrote:
| Ok, it is not a weird little cult, but literally everyone
| in the world who wants my rock because it is so
| beautiful. I don't see how that tangibly affects any part
| of the parable - which is forcing me to sell something I
| own because someone else with more money than I have
| wants it.
| Apocryphon wrote:
| Presumably physical collectible assets (maybe also
| virtual ones too for the NFT crowd) will be assessed
| differently from more liquid assets for the basis of
| evaluating a wealth tax, especially in the event of
| surging valuations from the collectibles market. If real
| life taxes, like say property tax in California, can be
| reined in by measures like Proposition 13, then there's
| no reason why a real-life wealth tax won't be subject to
| all sorts of internal controls and effects from lobbying.
| Thus protecting the "run of the mill average Joe" from
| having to suddenly sell his mythical rock.
| googlryas wrote:
| What about surging valuations in the equities market? If
| I'm worth $1B for a few moments because of a surging
| valuation, and then the government takes $900M of that,
| and then the stock crashes back to 1/100th of its peak,
| do I get my shares back?
| Apocryphon wrote:
| Just as current income taxes have a hard deadline in
| which financial assets are assessed, your extreme edge
| case is only applicable one day a year, rendering it ever
| the more trivial.
|
| Not to mention, the calculation for wealth would probably
| be based on something less temporary than a fleeting
| moment in the markets.
|
| Finally, the government would not directly take shares,
| so they would always be owned by you. Presumably with the
| stock price so much reduced you can simply purchase more
| at a pittance.
| googlryas wrote:
| I'm not sure if I would particularly care that it was
| just an edge case that caused me to miss out on $99M.
|
| They wouldn't take shares, but I would be forced to sell
| shares in order to pay the tax bill, because I don't
| actually have that money just laying around. So I had 10M
| shares @ $1/share, share prices go up to $100/share. I
| get hit with a $900M tax bill and sell 9M shares in order
| to pay it. Price goes back down to $1/share, leaving me
| with 1M shares. How exactly should I purchase more at a
| pittance? I spent all the money I didn't even have paying
| the tax bill, there's nothing left in my bank account to
| buy any shares.
| Apocryphon wrote:
| Buy it on margin, if the price has gone down so low you
| can easily get it approved
| googlryas wrote:
| Taking out a loan against an asset to buy more of that
| asset sounds like a horrible financial move.
| Apocryphon wrote:
| You can use your existing 1M shares as collateral
| seventhtiger wrote:
| It's a realistic scenario for illiquid assets like art
| and land. Antique roadshow has real examples filmed on
| camera.
| Apocryphon wrote:
| Right, and there would be exceptions made for edge cases
| like "someone uncovers a hidden treasure trove" or "oil
| is discovered"
|
| https://news.ycombinator.com/item?id=31745780
| googlryas wrote:
| So it is no longer "Billionaires shouldn't exist", but
| "Billionaires who build a successful business shouldn't
| exist, but if you uncover a hidden treasure trove you can
| be a billionaire"
| Apocryphon wrote:
| If you find a treasure trove worth billions of dollars,
| it is probably also of such archeological, historical,
| and cultural significance you are doing an immense
| service to humanity that you deserve it
| googlryas wrote:
| Maybe it is just someone's old pile of gold. Like the San
| Jose galleon. Sure, it will be cool when it is raised,
| but I'm not exactly sure that it is going to change the
| world by bringing it up rather than just leaving it
| there.
|
| By this same standard, maybe Amazon is doing an immense
| service to humanity, and that is why so many people use
| the site daily, and actually enjoy doing so. So maybe
| Bezos should get to keep his billions as well.
| Apocryphon wrote:
| Maybe I never weighed in on the question of whether there
| should be billionaires or not, but you have simply
| projected a strawman upon me, which is fitting because
| this whole thread was started because I said the
| aforementioned parable was a strawman.
|
| Currently, gold retails at $1808 an ounce. So it would
| take over 15.6 metric tons of gold to be even worth a
| billion dollars. That is substantially more than an "old
| pile", and probably of historical worth, like contained
| in a ruined temple or wartime vault or something
| colinmhayes wrote:
| Yes, if your rock is worth twice as much to the cult as it
| is to you you should have to sell it.
| dcow wrote:
| No. The rock is worth vastly more to the owner than the
| cult which is why they won't sell it. However, the value
| is intrinsic... it's priceless. It's worth infinitely
| much to the owner regardless of how much anybody else
| thinks it should be worth. Therefore, it's impossibly to
| tax the owner infinitely for their intrinsically valuable
| rock...
| memish wrote:
| That's an arbitrary cut off and it's not just about whether
| they will work less hard or not. It's about effective capital
| allocation. If they earned their wealth through smart capital
| allocation, why would you want to remove capital from proven
| allocators and forcibly move it to the least effective
| allocators?
|
| TLDR. Elon makes vastly better use of capital than the
| government does. He turned $180M into SpaceX and Tesla. They
| turn $180M into some bombs and maybe an unfinished train
| station if we're lucky.
| hooande wrote:
| buying twitter at $54/share is an effective use of capital?
| memish wrote:
| At the time, yes. Today one could get it for a lot
| cheaper.
| countvonbalzac wrote:
| This^ + how much capital did Elon Musk actually allocate
| to Tesla and SpaceX? It was much closer to $100m than $1
| billion or $100 billion.
| karpierz wrote:
| Lots of hidden assumptions here:
|
| 1. The objective of public policy is to maximize the
| efficiency of capital allocation.
|
| 2. Who is efficient at capital allocation is independent of
| public policy.
|
| 3. Efficiency of capital allocation is measured by stock
| market capitalization.
|
| 1) would assume that building a Lamborghini Veneno Roadster
| is a better allocation of capital than building 10 homes.
| Or treating 100,000 cases of malaria.
|
| 2) would assume that someone who benefits from government
| subsidies is intrinsically better at capital allocation
| than someone who doesn't.
|
| 3) would assume that tulips sellers were really, really,
| good capital allocators for a while, and then suddenly were
| terrible capital allocators. Or that the number of cars
| produced isn't really a relevant metric for an auto
| company.
| FabHK wrote:
| Very good points. Externalities and other market failures
| are also better addressed by governments than capital
| markets, as is well understood and was conceded even by
| Milton Friedman.
| whimsicalism wrote:
| > they earned their wealth through smart capital
| allocation, why would you want to remove capital from
| proven allocators and forcibly move it to the least
| effective allocators?
|
| 1. You'd certainly want to remove it before they pass it on
| to their children -> 60% of all wealth in the US is
| inherited, mostly by the very wealthy.
|
| 2. Those most likely to scoop up redistributed capital are
| the efficient capital allocators at _current time_ , which
| is better than calcified structure of efficient capital
| allocator from 1970 who has just put their money into index
| funds and passed their wealth on to their children.
|
| 3. Diminishing marginal utility of the dollar means strong
| first-order utility gains from redistribution of wealth
| which would need very large second-order impact on capital
| allocation effectiveness (and impact on behavior) to harm
| net utility.
| formerkrogemp wrote:
| SpaceX was funded by government contracts awarded to
| SpaceX. 'Ol Musky doesn't wave a magic wand for discerning
| capital deployment. He just gets lucky.
| memish wrote:
| Luck doesn't itself explain being able to repeat that
| level of complex achievement. You need >99 percentile in
| energy, intelligence and curiosity to pull that off.
| Apocryphon wrote:
| He was certainly lucky that the Obama administration was
| around to lend him money to finish the Model S and not
| declare bankruptcy, sure.
| madrox wrote:
| I appreciate the sentiment, but I'm more comfortable with
| wealth in the hands of progressive billionaires than a
| government that's likely to go on a regressive tear every
| four years.
| endorphine wrote:
| False dichotomy?
| Veen wrote:
| You're making a big assumption that billionaires are or
| will remain "progressive," whatever that word means to you.
| fleddr wrote:
| I think the wealth question is phrased wrongly: how much
| wealth is somebody allowed to have? Rather the question
| should be: how is such excessive wealth generated in the
| first place?
|
| Billionaire level wealth comes into existence by means of a
| concept that is alien and bizarre when you think more deeply
| about it:
|
| "Percentage-based future-facing ownership".
|
| Also known as "shares". Emphasis on the word "percentage".
| You're the 30% majority shareholder and founder of a startup
| worth some 1 million USD in total.
|
| 10 years later, it's turned into an empire. You're still the
| 30% shareholder but now of something worth 1 trillion.
|
| Superficially this looks reasonable to people but it is in
| fact bizarre. You scale up wealth from 300K to 300B just by
| the societal agreement that there is such a thing as
| percentage-based ownership of a variable thing. Which is a
| concept that is entirely made up and does not exist in
| physical reality. In a way it is future-capitalism. You lay
| claim on value that doesn't even exist yet nor will it
| actually be produced by you typically.
|
| This jump from 300K to 300B can't be justified or explained
| by "hard work", risk or any other personal attribute.
|
| Imagine you go fishing with friends. It's your boat. You paid
| for it and need to maintain it. So the friends agree to give
| 50% of fish caught that day to you, to cover costs and as a
| reward.
|
| The next day you meet your friends again and declare: by the
| way, actually 50% of all fish in the pacific ocean are mine.
|
| How so?
|
| I got "fish shares".
|
| But you wouldn't do any of the fishing???
|
| Fish shares don't care.
| lr4444lr wrote:
| It's not how hard they work - it's the risk-adjusted
| decisions they're willing to take.
| halfmatthalfcat wrote:
| Why stop at $100M? Why can't $1M be the most?
| sokoloff wrote:
| Because that provides ~$40K/yr in income during retirement.
| That seems like...way not enough to hold out as the
| absolute maximum.
| randomhodler84 wrote:
| A) inflation b) try to buy a house for 1M in a hcol place.
| Why would you set the max wealth less than that of a house,
| something that most humans have been able to own for most
| of human history, now out of reach for a generation.
|
| You need to realize that absolute numbers are meaningless,
| they are all relative to costs and inflation. Trying to
| lock down fiat absolutes is a moving target.
|
| What is a realistic wealth limit for BTC, out of 21M?
|
| Should nobody own more than 1/21Mth the Bitcoin? Less?
| More?
| FabHK wrote:
| Why can you only vote/have sex/drink/gamble when you're 18
| yrs? Why not at 12, why not at 30?
|
| The fact that there is a gray zone does not mean that no
| border must be drawn.
| cute_boi wrote:
| Well, there should be some objective parameters to
| determine such things.
|
| We can't vote/sex/drink/gamble because it is assumed that
| young people sucks. Maybe looking at the statistics
| government decided 18 years is good? I think if 12 year
| old can pass driving test then they should be allowed to
| drive. If 30 years can't pass, they must not be allowed
| to drive.
|
| So, how about we find objective paramters to determine
| what should be the best border to determine the elites?
| May be it is 100x minimum_salary? There are plenty of
| option I guess.
| dlp211 wrote:
| You know it's this kind of stuff that actually makes the
| tax code so complicated, but because you insist:
|
| An amount of wealth that would provide you a top %0.1
| lifestyle if you were to retire today based on a standard
| 60/40 portfolio (to be adjusted every N years to reflect
| new data) and actuary tables.
|
| It doesn't have to be this exact policy, but this isn't
| hard to think something like this up.
| ipnon wrote:
| "Probably" seems the key word here. Many people have a
| slight preference for a policy with wide ranging
| ramifications. It's better to be unconvicted on matters
| that are inconsequential, like whether tea or coffee is the
| superior beverage.
| iLoveOncall wrote:
| Because nobody wants to be living in 1970's China?
| memish wrote:
| Why can't $100,000?
| freyr wrote:
| Reminds of a CEO's tweet yesterday that software engineers
| making $400k+ are the real problem, and it got lots of likes.
| Today we day a billion is too much. Where do you draw the
| line (obviously, start with the billionaires and not with the
| workers), and who gets to decide?
| cozos wrote:
| Link to tweet please?
| foundart wrote:
| https://twitter.com/typesfast/status/1536406121249796096
| Johnny555 wrote:
| I don't think reaction to a twitter post is a good judge of
| how it would be received here -- many of the software
| engineers here are probably already earning over $400K in
| total comp. Well, at least before the recent market drop.
| pgodzin wrote:
| I don't think engineering salaries are "the real problem"
| but, they certainly are "a" problem for many companies
| whose business models don't print cash the same way FAANG
| companies do but try to compete on comp, and that's what
| the tweet was getting at.
| jerry1979 wrote:
| I'm not settled on this yet. I'm from the USA, and one thing
| that concerns me is the geopolitics of billionaires. What
| happens when USA taxes billionaires out of existence? Russia
| and China still have billionaires. Does that do something to
| the power relationships in the world? Is there such a thing
| as "our" billionaires?
|
| The other question I have has to do with feudalism. If we let
| "our" billionaires exist, does that mean that we keep
| feudalistic pressures at bay? Or do we enhance those
| pressures? Is that even the right question?
| tshaddox wrote:
| Would you apply that same form of argument to everything
| else that is illegal or strongly disincentivized? "We
| shouldn't ban/disincentivize x because people will just go
| do x in some other country" doesn't seem like an argument I
| would make for a large range of x's.
| munificent wrote:
| _> What happens when USA taxes billionaires out of
| existence?_
|
| This is a really good question.
|
| I believe the answer is that the USA will be better able to
| outcompete those countries that do have them. History has
| shown time and again that massive inequality is a huge
| barrier to maximizing the productivity of all of a
| society's members.
|
| It leads to cynism and corruption and breaks down
| cooperation. It forces a society to spend valuable
| resources on policing in order to keep the poor taking from
| the rich. It's just economically incredibly inefficient.
| You need some level of inequality to incentivize people but
| once you go beyond that, it's a net harm.
| kortilla wrote:
| > believe the answer is that the USA will be better able
| to outcompete those countries that do have them
|
| Based on what? The US already outcompetes these other
| countries in business success and average citizen income.
| What countries don't have billionaires that are
| competitive?
|
| > History has shown time and again that massive
| inequality is a huge barrier to maximizing the
| productivity of all of a society's members.
|
| History has literally never shown this. This is the first
| time we've had massive inequality while still having a
| solid middle class. The jury is still out on whether the
| instability of the past was just because of excessive
| poverty and no upward mobility or because wealthy people
| were there.
| oblio wrote:
| For every localized case, including critical ones such as
| the army, historically super rich and powerful people
| would distort the system.
|
| There are countless examples of rich or powerful and
| connected people buying officer posts, for example, and
| meritocracies (= equality of chances) stomping all over
| these corruped systems.
|
| There's little reason to believe rich people willingly or
| not, do not distort every market they're in. That's why
| they become rich, to be powerful.
| Johnny555 wrote:
| _Does that do something to the power relationships in the
| world?_
|
| The fact that you're even asking that is a reason we
| shouldn't have billionaires -- world power relationships
| shouldn't be based on the wealth of individual citizens.
|
| For example, what did Musk _really_ talk about when he met
| with the president of Brazil? Did he represent American
| interests, Amazon Inc 's interests, or Elon Musk's
| interests?
| nostrademons wrote:
| Are you advocating against billionaires & capitalism, or
| against power relationships?
|
| In theoretically egalitarian systems like communism, a
| committee makes decisions about how to allocate
| resources. Then whoever holds most sway over the
| committee holds sway over resource allocation. If you do
| it by direct democracy, then whoever owns the news media
| & ad platforms (or has money to do massive PR campaigns
| and ad buys) holds sway over resource allocation. You
| can't escape this: _somebody_ is going to make the
| decisions, unless you just run the world by computers and
| have humans slot in for menial tasks.
| pessimizer wrote:
| The question is who they're beholden to, i.e. who they
| derive that power from. The problem with the person with
| the most sway over a committee being able to make a
| decision is less because:
|
| 1) The fact that it's necessary to " _hold sway_ " is a
| result of the power not actually being held by that
| person, but being loaned to that person by the rest of
| the committee in a way that can be withdrawn at any time.
|
| 2) The committee members are all subject to the process
| that chooses them. _That 's_ the power center, and the
| character of that process defines the legitimacy of what
| the committee does. If a billionaire chooses them, the
| committee is a mask. If the people being governed choose
| them, that's the basis of popular sovereignty, and the
| justification for post-Enlightenment government in
| general.
|
| > whoever owns the news media & ad platforms (or has
| money to do massive PR campaigns and ad buys) holds sway
| over resource allocation.
|
| You're talking about other billionaires. The conversation
| is about not having billionaire.
|
| So this boils down to if billionaires choose a committee,
| billionaires will run things, and if people vote for a
| committee and billionaires control all of the information
| that those people get, billionaires will run things. You
| _can_ escape this if you don 't have billionaires.
| dadoge wrote:
| Good luck getting competing countries to agree on banning
| billionaires in one fowl swoop.
|
| This is a very idealistic and impossible to ever
| implement take
| kordlessagain wrote:
| So then you are also OK with gutting capitalism and
| limiting company's abilities to make mad profits?
| Because, you can't have one without the other.
| X6S1x6Okd1st wrote:
| Why do you think a wealth tax would limit a companies
| abilities to make "mad profits"?
| arrosenberg wrote:
| Or distribute the profits more broadly? No need to be
| dramatic.
| yellowapple wrote:
| If we can't have capitalism without neofeudalist
| exploitation of the working class for the sake of
| enriching a privileged ownership class, then yes, I would
| very much prefer to gut capitalism.
| Johnny555 wrote:
| I don't understand how a tax on personal wealth guts
| capitalism and limits a company's ability to make mad
| profits?
| gammabetadelta wrote:
| smsm42 wrote:
| Why not btw? I mean, why is it worse for somebody to have
| power because he worked and invested for decades and made
| optimal decisions (and probably some luck) than for
| somebody to have power because he was born into the right
| family, knows all the right people in The Machine, has
| nice hair and is able to conceal his rampaging cocaine
| habit long enough to make himself too big to fail?
|
| I get that "wealth gets power" is not ideal, but the
| alternatives we can see around don't seem to be much
| better. Somebody will have the power, and we as a society
| would need some proxy to use so that it won't lead to a
| disaster. Being able to create and run successful
| businesses (yes, I know not all rich people are self-
| made, etc. - it's an imperfect proxy, but to a large
| measure a working one) doesn't look that bad, compared to
| "being born with right last name" or "being born with the
| correct facial features"...
| guelo wrote:
| > has nice hair and is able to conceal his rampaging
| cocaine habit long enough to make himself too big to
| fail?
|
| You are indoctrinated into believing that democracy
| cannot work and good government is impossible.
| rglullis wrote:
| > good government is impossible.
|
| At the scale of continental countries like US (or any
| BRIC country), it is. The decision makers are simply too
| far removed from the people who get to live with the
| policies.
| smsm42 wrote:
| I am indoctrinated by the reality I am observing daily.
| And before you are tempted to tell me "oh, it's because
| $not_my_favorite_political_party prevents
| $my_favorite_political party from achieving its true
| potential as the paragon of democracy" - this happens
| regardless of your tribal squabbles.
| Philip-J-Fry wrote:
| I don't think anyone who says a billionaire shouldn't
| have power also believes that someone born into the right
| family should have power. Ideally those in power should
| be democratically elected by the people they hold power
| over and be protected from lobbying attempts by wealthy
| individuals.
|
| Someone like Elon Musk having political influence is a
| bad thing because he's raging capitalist that can, will,
| and does exploit those below him. It's why he has such a
| love for his Chinese labour force. They have less rights
| and they will work 16 hour days in his factory making the
| cars that make him money.
|
| Elon Musk is great as a wealthy private businessman,
| that's where capitalism firmly belongs. But he has no
| place in any sort of politics. Countries aren't run like
| businesses.
| xapata wrote:
| > (and probably some luck)
|
| I'd reverse the skill and luck relationship. Success at
| that magnitude is almost entirely luck (and probably a
| little skill).
| smsm42 wrote:
| When one becomes rich because of one IPO that went right
| - ok, let's say it's luck. When one creates several
| successful businesses in a row - no, sorry, I can't say
| "it's just dumb luck" anymore, it's more realistic to
| assume there's something else involved.
| Johnny555 wrote:
| Yeah, after the first successful IPO, the traveling IPO
| CEO has contacts at investment banks, media houses, etc
| and is on a first-name basis with many key analysts.
| That's why they keep getting brought in to help a company
| IPO, after you've done one, the subsequent ones are
| easier.
| nemothekid wrote:
| Taleb has a more succint way of putting it[1], but no it
| can still be luck just like hitting black in roulette
| several times in a row can also be luck.
|
| [1] https://mobile.twitter.com/nntaleb/status/15341727735
| 8051328...
| Domenic_S wrote:
| Hitting black multiple times in roulette is _always_ luck
| (barring cheating).
|
| What the tweet is saying, and it seems right, is that
| looking at a probability graph the _only_ way to get the
| billionaire-like outcome /outlier is to dramatically
| increase volatility, i.e. bet on long odds. If everyone
| went to work, maxed out their 401k, bought blue-chip
| stocks, and called it a day, basically nobody would have
| outlier net worth. But some people choose to increase the
| volatility of their money (buying crypto, starting a
| company, options trading, whatever) and as you'd expect
| 99.9999% of them don't get rich and the rest of them get
| uber-rich.
| whimsicalism wrote:
| There's no such thing as too big to fail in democratic
| politics and it is not a deterministic process of knowing
| people in "The Machine."
|
| FWIW, most wealthy people are wealthy because of
| inherited holdings and 60% of all wealth in the US is
| inherited.
| paisawalla wrote:
| There is significant income mobility in the US, which is
| why "the one-percent" discourse consistently fails to
| resonate with Americans. When 73% of Americans have spent
| at least a year earning a top 20% income [0], focusing on
| the inherited wealth of others comes off as whining. As
| long people feel that the pie grows, and that they can
| move themselves forward, these observations are at best
| statistical curiosities. They feel very much of a piece
| with the deboonkers on Twitter who tell the truck
| owner/operator facing 50% higher gas prices that
| technically there's no recession.
|
| [0]
| https://www.nytimes.com/2014/04/20/opinion/sunday/from-
| rags-...
| whimsicalism wrote:
| 73% of Americans being in the top 20% of income earners
| for one year in their lives does not in any way diminish
| what I am saying.
|
| The median dollar of wealth is inherited by the
| wealthiest top 5% of families, not earned as income -
| which your statistic doesn't even address.
| fallingknife wrote:
| > 60% of all wealth in the US is inherited
|
| Source? This fails the sniff test, as the amount of
| wealth has grown at such a rapid rate this seems almost
| impossible.
| whimsicalism wrote:
| https://www.washingtonpost.com/us-
| policy/2019/02/06/people-l...
| smsm42 wrote:
| As I suspected, it counts dollars. Moreover, it
| attributes any subsequent income for somebody that
| received an inheritance as "inherited" (up to certain
| exponential boundary). I.e. if you received an
| inheritance of $1000, spent it, and in 30 years since you
| became a millionaire, then the amount of wealth you have
| up to what you could have if you invested $1000 at
| certain rate would be still counted as "inherited". I am
| very far from being qualified to understand the dense
| math in the underlying article (http://www.piketty.pse.en
| s.fr/files/AlvaredoGarbintiPiketty2...) but with such
| assumption, I imagine we could arrive at 60%. But it
| doesn't mean what you think it means.
| whimsicalism wrote:
| > As I suspected, it counts dollars.
|
| What do you mean? It counts ownership stakes & stocks as
| well.
|
| > I imagine we could arrive at 60%. But it doesn't mean
| what you think it means.
|
| It means exactly what I think it means - if you get
| bequeathed $1 million dollars and get 8% returns from
| investing this, it doesn't mean you "self-made" $3.66
| million more 20 years later.
| smsm42 wrote:
| > There's no such thing as too big to fail in democratic
| politics
|
| Are you sure? Please tell me the top 10 names on the
| Epstein client list. I'll wait.
|
| > most wealthy people are wealthy because of inherited
| holdings and 60% of all wealth in the US is inherited.
|
| I'd like to see your sources. They probably counts by
| dollars, which is pointless, since one hyper-rich
| individual completely skews the picture - you can have a
| million self-made millionaires and one Elon Musk's son -
| and claim that the majority of millionaires is created by
| being Elon Musk's son. That's an obvious nonsense. It's
| like calculating average income of a people in a bar
| where Bill Gates just walked in, and making conclusions
| that everybody is rich. You need to count people, not raw
| dollars.
|
| Mine say:
|
| One measure of the percentage of the wealthy who are
| self-made is Forbes' own Forbes 400 list. In 1984, less
| than half the people on The Forbes 400 list of richest
| Americans were self-made. By 2018, in stark contrast,
| this same figure had risen to 67%.
|
| https://www.forbes.com/sites/rainerzitelmann/2019/06/24/a
| maz...
|
| Around 41.4 percent of the wealthiest one percent say
| they have inherited some money.
|
| https://www.peoplespolicyproject.org/2017/10/10/the-
| wealthie...
|
| The market research firm analyzed the state of the
| world's ultra-wealthy population -- or those with a net
| worth of $30 million or more. The report, which is based
| on 2018 data, "showed muted growth" in the number of
| ultra-wealthy people that year, "rising by 0.8% to
| 265,490 individuals," says Wealth-X. Of those folks,
| 67.7% were self-made, while 23.7% had a combination of
| inherited and self-created wealth. Only 8.5% of global
| high-net-worth individuals were categorized as having
| completely inherited their wealth.
|
| https://www.cnbc.com/2019/09/26/majority-of-the-worlds-
| riche...
| whimsicalism wrote:
| Relying on people to honestly self report on being
| transferred wealth.
|
| Counting people is not the important bit because I am
| concerned about the distributional equity of _wealth_ not
| _wealthy people_.
| [deleted]
| ObscureScience wrote:
| I somehow doubt he represented Amazon inc's interests.
| noncoml wrote:
| He obviously meant Tesla's
| Johnny555 wrote:
| yeah,true, typo on my part, I was just reading about
| Bezos in another post and about the Amazon rainforest in
| an article about the meeting. Too late to edit it now.
| PuppyTailWags wrote:
| Chinese billionaires still only exist at the mercy of
| China. Jack Ma, anyone?
| sdenton4 wrote:
| The most productive decades in the US correspond with its
| highest relative tax rates, between the fifties and the
| eighties. Thomas Piketty:
|
| "if you look at the long-run evolution, we've seen less
| concentration of wealth. So the top 10 percent of the
| wealth distribution today would have 60 percent in Europe,
| 70 percent in the U.S., as compared to 90 percent before
| World War I in Europe. This did not destroy the economy. If
| anything, this decline in the share of total wealth going
| to top 10 percent and the corresponding increase in the
| share going to the next 40 percent has contributed to a
| much faster economic growth in the 20th century than in
| previous centuries.
|
| "I think partly because it allowed more people to
| participate, to the economy. And also partly because it
| came also with the rise of education. And this was the true
| source of productivity in the long run, rather than the
| enormous level of inequality that we had before World War
| I. This theoretical discourse that more inequality, more
| concentration of wealth is always better for economic
| growth was made, of course, throughout history by people
| who had large concentration of wealth, certainly in Europe
| before World War I.
|
| "And this is a discourse that, in the 1980s, Ronald Reagan
| tried to tell Americans, basically tried to tell them, look
| we've gone too far with the New Deal, with Roosevelt, in
| terms of progressive taxation or wealth redistribution. We
| are going to cut top tax rate by two, where they're going
| to go down to 28 percent or 30 percent, as compared to the
| 80 percent, 90 percent top tax rate under Roosevelt. So the
| promise that was made by Reagan during the 1980s was that
| cutting top tax rate might lead to more inequality, but
| will also lead to so much more innovation, more economic
| growth. And the incomes of average Americans are going to
| grow much faster than they used to grow.
|
| "Except that this is not what we've seen at all. So if you
| look at the three decades after Reagan, 1990 to 2020, the
| growth rate of national income per capita in the U.S. was
| only 1.1 -- 1.2 percent as compared to 2 percent, 2.5
| percent in the period of 1950 to 1980, or 1950 to 1990,
| which itself was not particularly exceptional. It was the
| same -- 1910 to 1950, it was about 2 --2.5 percent. 1870 to
| 1910, around 2 percent. So in fact, the post-Reagan period,
| 1990-2020 has been particularly bad in terms of growth rate
| of national income per capita, which at the end of the day
| is the best economic measure we have of the increase in
| productivity and this should reflect innovation, et
| cetera."
|
| https://www.nytimes.com/2022/06/07/opinion/ezra-klein-
| podcas...
| throwaway894345 wrote:
| Also, billionaires' wealth isn't parked in a vault, right?
| It's invested in companies, so it's working in the economy
| whereas it would otherwise go to the government. It's not
| obvious to me that the government is going to provide more
| value for the public in general than industry, but I would
| like for that to be the case (an easy solution for
| inequality that doesn't shrink our economy overall).
| Johnny555 wrote:
| 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.
| DamnYuppie wrote:
| 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.
| Johnny555 wrote:
| 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.
| throwaway894345 wrote:
| 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.
| throwaway894345 wrote:
| 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?
| int_19h wrote:
| The government could, for example, issue loans at minimal
| interest rates to smaller businesses.
| throwaway894345 wrote:
| I'm pretty sure they've been doing that for years now,
| and it has been helping to drive inflation.
| shinryuu wrote:
| A lot of wealth is parked in shares of companies. I'm not
| sure to what extent that is actually productive...?
| throwaway894345 wrote:
| It's paying the salaries of those employees at those
| companies, so in what sense is it "parked"?
| SkyPuncher wrote:
| 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.
| jfk13 wrote:
| 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?
| JoeOfTexas wrote:
| None, none at all.
| namdnay wrote:
| 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
| TuringNYC wrote:
| >> 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.)
| RHSeeger wrote:
| 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.
| SoftTalker wrote:
| 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.
| saurik wrote:
| 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.
| krrrh wrote:
| Billionaires provide value as alternate sources of power to
| the state. Distributed sources of philanthropy that can
| target areas neglected by government are one thing
| (Carnegie's libraries, Bill Gates work on tropical
| diseases, Frick's art collection which he donated to the
| American people, alternate media and educational projects
| (Ford foundation's continued funding of NPR, Soros' Open
| Society Foundation, Koch funding of the Reason foundation
| and CATO etc, putting hyperbolic conspiracy theories aside
| these all enrich the political conversation and increase
| the opportunities for policy experimentation)). Secondly,
| billionaires have a good claim on being experienced and
| skilled deployers of capital. A wealth tax would have
| limited the capacity for private investment in EV, space
| flight, the acceleration of cloud computing.
|
| There are two common ripostes to this. One is that these
| are wasteful vanity projects, which just proves the point
| that there is value to this sort of decentralized system of
| capital allocation where some small percentage of total
| available capital is in the hands of quixotic individuals
| who can pursue aims that a majority of the population
| doesn't (yet) see the value of. The second objection is
| that these things should all be handled by the state. It's
| fine for people to want space exploration to be entirely
| handled by NASA for instance, but the record is pretty
| clear that US (and by extension humanity's) pace of space
| exploration has been absolutely transformed by the ability
| for private actors with substantial resources to make moves
| outside of an existing bureaucracy.
|
| The US government spends upwards of $4T dollars a year, and
| the media class has a much larger influence on politics
| than and group of billionaires could buy. Because most
| billionaires are entrepreneurs they also typically look at
| ways they can deploy capital that are underserved and where
| the state would be an inappropriate actor in terms of
| required risk and innovation. A group of talented weirdos
| that have the resources to move the needle on neglected
| projects is a feature not a bug.
| namaria wrote:
| >Billionaires provide value as alternate sources of power
| to the state.
|
| You haven't yet figured out that all institutions and
| corporations are merely instruments of the monied
| classes?
| yellowapple wrote:
| > Billionaires provide value as alternate sources of
| power to the state.
|
| Billionaires _are_ the state. They would not exist if the
| state didn 't specifically provide them with the
| mechanisms to amass such wealth at the expense of the
| rest of us.
| Johnny555 wrote:
| A wealth tax wouldn't prevent the Gates Foundation from
| existing, it would encourage it -- instead of keeping
| personal wealth that's going to be taxed, the would-be
| billionaire can set up a charitable foundation like the
| Gates Foundation to spend the money.
|
| Since the charity is run by a board and bound to abide by
| its charter, it's not the same thing as the person
| controlling the wealth himself. The Gates Foundation is
| not going to buy Bill Gates a private island with a $100M
| super yacht to get there.
| anotherfounder wrote:
| If there was fair taxation on billionaires, and there was a
| wage growth where all the productivity gains didn't only
| stay at the top, then I think folks would be less incensed
| at billionaires.
| emptysongglass wrote:
| You don't even need to discuss billionaires though to get
| some very bad effects. Take Denmark for example that
| taxes software engineers 50 percent of their salary (it's
| not unique to SWEs it's just because nearly all SWEs will
| make enough to fall into this bracket). I'm thoroughly
| examining other lower tax bracket countries to move to
| because why do I want to pay half of my salary until I am
| enfeebled and the state lets me enjoy my enfeeblement?
|
| Let's macrosize the perspective: why do you think Unity
| moved HQ from DK to the USA? Could it be the crushing
| taxes here?
|
| This is the issue. You really can't have it both ways.
| Yet many Americans love to fetishize a hatred for few
| very specific individuals without thinking through the
| whole causal chain that girds their economy.
| Johnny555 wrote:
| _Take Denmark for example that taxes software engineers
| 50 percent of their salary (it 's not unique to SWEs it's
| just because nearly all SWEs will make enough to fall
| into this bracket). I'm thoroughly examining other lower
| tax bracket countries to move to because why do I want to
| pay half of my salary until I am enfeebled and the state
| lets me enjoy my enfeeblement?_
|
| Denmark consistently ranks in the top 5 of countries with
| the best quality of life. A year of parental leave, great
| social welfare, universal healthcare and retirement
| benefits, etc.
|
| Including federal/state/local taxes, healthcare premiums,
| retirement contributions, disability insurance, etc, I
| pay close to 50% of my salary in the USA
|
| And I'd still worry about how I'll pay the bills if I
| lost my job.
|
| _why do I want to pay half of my salary until I am
| enfeebled and the state lets me enjoy my enfeeblement?_
|
| Because that's how the state pays for the enfeebled
| today? Are you really suggesting you want to leave
| Denmark to go somewhere with lower tax rates, then when
| you need social healthcare, you'll move back to Denmark
| and take advantage of the healthcare system that you
| didn't pay for?
| simonsarris wrote:
| Why shouldn't they exist, exactly? I think we should want
| more billionaires, ten times as many, at least!
| aerosmile wrote:
| > Will a CEO work less hard if he (and his peers) can only
| ever gain $100M in net worth before a wealth tax on assets
| kicks in?
|
| I empathize with the quick back-of-the-napkin math ("if we
| could just take Bezos' money and give it to the poor...").
| But I think there's an important nuance here.
|
| You're making it sound like the only group of people that
| would be affected by this are the folks with $0 in net worth,
| so that the upside is $100m. In reality, anyone who's ever
| earned the first $100m (not inherited or won in a lottery),
| only ended up accelerating their ambition and likelihood of
| doing a lot more. Case in point - all of the Paypal mafia -
| they are all working their asses off every single day, and
| none of them would have had the upside that you're talking
| about.
|
| In short, your proposal would basically mean that you're
| going to force into retirement anyone who demonstrates to be
| a 1000x doer. In the worst case scenario, the opportunities
| those people would have created would be lost for a long
| amount of time (eg: creating a domestic automaker that turns
| the ICE industry upside down). At best, you would be
| expecting from unproven people who have not yet validated
| their abilities to execute on those opportunities with the
| same level of success as the 1000x doers.
|
| So it seems to me that the question is not so much "what
| could we do with Bezos' money," but more "how much of Bezos'
| money are we comfortable with not being generated at all to
| ensure that he never has more than $100m."
| devoutsalsa wrote:
| Wealth taxes are an administrative nightmare. It's very
| difficult to reasonably price private assets in an illiquid
| market. Figuring out how much to charge and collecting it can
| cost more than you bring in. Patrick Boyle touches on this
| in...
|
| "Tax The Rich?" -- https://youtu.be/pgW4LWeUyVY
|
| My personal opinion is taxing the rich is good. Wealth tax
| specifically is problematic.
| systemvoltage wrote:
| We need more billionaires to exist. They _create_ wealth
| through enterprise.
|
| It is astounding how many people naively just think "Too much
| money = bad". Billionaires don't really have cash sitting in
| their houses. They created companies, often from scratch,
| that wouldn't otherwise exist.
|
| https://ourworldindata.org/economic-growth
|
| GDP per capita grew _because_ the wealth was created, not
| stolen. The entire pie got larger. We lifted people out of
| poverty from 90% in 19th century to what it is today 10%
| through capitalism and trade.
|
| We need more billionaires to create wealth and propel society
| forward.
|
| Crony billionaires, politicians, inheritance wealth, etc.
| need to be condemned and we usually throw the baby with the
| bath water along with the whole tub.
|
| Billionaire hate is getting out of control because people are
| convinced naively. I suspect some malaise in economics
| education.
| Apocryphon wrote:
| Has there ever been a study on how many "productive"
| billionaires there are, as compared to those who are simply
| rent-seekers?
|
| Or a study that has shown that billionaires ("job
| creators") are those who are the primary driving force for
| wealth creation?
|
| Or are the much-bandied Gates/Musk entrepreneur-
| industrialist types just a minority of billionaires, many
| of whom are just wealthy heirs or hedge fund owners or
| whatever
| bezier-curve wrote:
| You don't need an economics education to understand the
| implication of wealth being concentrated in the hands of a
| few people. This idea that billionaires generate wealth is
| myth.
| [deleted]
| kortilla wrote:
| These billionaires don't have a billion dollars in cash. They
| have a huge chunk of a company shares that are currently
| valued at >1 billion.
|
| So what you're proposing is just that a company's shares are
| taken away from the founders/execs as the company grows. It's
| not just that you're taking wealth away from them, but you're
| fundamentally forcing them to sell off control of the
| company.
| Johnny555 wrote:
| Well, I'm not proposing that people and companies do
| anything specific, it's up to them how to handle it. Maybe
| they'll choose to use less stock based compensation and
| more cash, maybe CEO's will end up with less compensation
| in general and the companies will retain more of that money
| for their own operations.
|
| _but you're fundamentally forcing them to sell off control
| of the company_
|
| That part is true. Billionaires can retain control of their
| company by being good leaders and providing value to the
| company, not because they started it 20 years ago and
| retained a huge amount of stock.
| cavisne wrote:
| To pay the wealth tax you would need to reduce your ownership
| in the company to pay the tax until eventually you are just
| another minor shareholder with a leadership position (for now
| at least). And eventually is not long (under Warren's
| proposal it would be ~5 years before jeff bezos was no longer
| a controlling shareholder).
|
| So the question really becomes, will the outcomes for the
| company be as good when no one leading it owns it or benefits
| directly from its success.
|
| Sounds familiar!
| toomanyrichies wrote:
| Is wealth tax paid on unrealized gains? If not, these
| billionaires would only pay the wealth tax when they
| liquidate their position in the company they founded. Until
| then, it's just paper wealth and not taxed.
| cavisne wrote:
| Proposed wealth taxes have been on unrealized gains.
|
| Without doing that it's pointless, billionaires even
| today never realize gains and just rotate through loans
| backed by their shares.
| jxi wrote:
| toephu2 wrote:
| > there should be a heavy wealth tax that makes it hard to
| become a billionaire
|
| Why does everyone want to tax the billionaires? What are you
| going to get out of it? Do you think taxing the billionaires
| is actually going to help the poor people?
|
| If so, riddle me this: Name one efficiently-run government
| organization.
| weakfish wrote:
| The postal service is a marvel of efficiency
| toephu2 wrote:
| Right.. which is why it is running at a net loss?
|
| "USPS's operating revenue was $77 billion for the 2021
| budget year, an increase of $3.9 billion, or 5.3%. It
| reported a 2020 net loss of $9.2 billion."
|
| https://www.reuters.com/business/us-postal-service-
| reports-4....
| Johnny555 wrote:
| It's a _service_. The US Highway system runs at a loss
| too if you treat it as a business.
|
| I can send a letter anywhere in t he country for 58
| cents, UPS or Fedex would charge $10?
| valenaut wrote:
| Of course it runs at a loss. It's a public service funded
| by taxes.
|
| The military also "runs at a loss"--should we expect it
| to be profitable?
| vaidhy wrote:
| There are 2 different metrics and I think you effectively
| shift from one to other as it suits you..
|
| Metric 1: They provide an efficient service. Posts reach
| on time (rain or shine), they have systems and process
| that make the organization not waste effort.
|
| Metric 2: They earn more money that what is spent by
| them.
|
| By metric 1, postal service, railways and public
| transport in most places, a large part of governmental
| services (DMV), medicare in US are efficient. Depending
| on your neighborhood, even police, fire and ambulance are
| efficient.
|
| by metric 2, most government services will not be
| efficient.. however, the government is not a business and
| I would argue that because people confuse 2 with 1 is why
| US does not have a better quality of life. The job of
| government is service using tax dollars.
|
| Take public transport for example. In my mind, it should
| be mostly subsidized and effectively free. Trying to make
| it a profit center makes it a "non-public" transport and
| you end up with limited services which has secondary
| effect of reducing mobility and restraining the economy.
| pineaux wrote:
| Well, its easy then: dont give it to government
| organisations, just give the money to other people directly
| in the form of a basic income. Set up a commercial bank
| owned by all the people of the US of A (you get one share
| when born and the share is non-fungible/non-tradeable) then
| let this bank fund small and medium bussinesses only. They
| are responsible for the majority of the work anyway. Tax
| land as well. Profits go to the shareholders and a well
| pages CEO, who also pays a hefty income tax. Rinse repeat.
| Set the maximum to a set multiple of the minimum. So you
| could become a billionaire theoretically, you Just have to
| make all Americans millionairs first.
| Petersipoi wrote:
| I actually like the idea. Unfortunately it will never
| happen, because ultimately the government decides what
| happens, and this plan doesn't help the government. Maybe
| make the current president the CEO of this bank or
| something and it could get some momentum. But then we
| have whatever idiot got elected most recently using the
| bank as a political weapon.
| [deleted]
| CardenB wrote:
| Maybe it is less about the tax revenue and more about
| preventing power imbalance. Why is it good to have so much
| power concentrated in the hands of one person?
| evandale wrote:
| I firmly believe Musk, Gates, and Buffet to name a few do
| more good with their money than if any government got
| their hands on it. Not all the billionaires are bad.
| cute_boi wrote:
| Looks like you need to look Shenanigans done by Musk,
| Gates etc. I don't know that much about Warren Buffet,
| but the main point is when you are billionaries you can
| earn kindness etc.. They hire PR agency so that gullible
| people like them.
|
| They are really not better than government because these
| people are the one who lobbies government to vest their
| selfish desires.
| phaistra wrote:
| > Looks like you need to look Shenanigans done by Musk,
| Gates etc
|
| You should check out the shenanigans that the US
| government gets away with. Whatever bad things Musk,
| Gates and crew is small fry compared to the government.
| dlp211 wrote:
| Taxes != spending so this is the wrong frame to view
| taxes through.
| Johnny555 wrote:
| _I firmly believe Musk, Gates, and Buffet to name a few
| do more good with their money than if any government got
| their hands on it. Not all the billionaires are bad._
|
| A side effect of a wealth tax is that instead of wealthy
| people building wealth that's just going to be taxed
| away, it would incentivize funding charitable foundations
| like the Gates Foundation. Bill Gates has done a lot of
| good with his foundation, but that doesn't meant that one
| person should control that much money.
| jfoutz wrote:
| Medicare?
| FabHK wrote:
| Funnily enough, virtually all health insurance systems
| world wide have a higher government component than the US
| one, and better outcomes at a lower cost.
|
| (Spot the outlier on the first graph:
| https://ourworldindata.org/the-link-between-life-
| expectancy-... )
| marcosdumay wrote:
| > Why does everyone want to tax the billionaires?
|
| Because they take a lot of value out of a shared society
| and concentrate too much power on their hands.
|
| > What are you going to get out of it?
|
| Reduce the power discrepancies, mostly, and money too.
|
| > Do you think taxing the billionaires is actually going to
| help the poor people?
|
| Yep.
|
| You are asking about government efficiency, but one of the
| reasons for the lack of efficiency is that billionaires do
| not want it.
| idoh wrote:
| To what extent do you think that billionaires earn the
| wealth that they have?
| marcosdumay wrote:
| That seems to vary a lot, so it's not viable to make
| policy based on it.
| passivate wrote:
| That which is asserted without evidence, can be dismissed
| without evidence.
| toephu2 wrote:
| The government is going to take all that new tax money
| from the billionaires and do what with it? Do you believe
| the government can efficiently manage the tax revenue to
| help the poor?. SF gov spends $60k/year per tent for the
| homeless [1] ..that's called a mismanagement of tax
| revenue (and probably massive corruption).
|
| [1] https://www.sfchronicle.com/politics/article/S-F-
| officials-w...
| Apocryphon wrote:
| the U.S. Army Corps of Engineers
| kiba wrote:
| Having a billion dollars is a side effect of our current
| system. Much more useful to focus on system level incentive
| than to focus on a small minority at the top.
|
| If there's people with budgets for yacht, then there are a
| much larger group of people with budgets for fancy houses.
|
| And an even larger group of people whose incentive is to see
| the price of their homes rise, contrary to the societal goal
| or providing affordable homes for everyone.
|
| If you implement a nationwide land value tax, I believe the
| wealth disparity will start to disappears and there may be
| less billionaires, but everyone will benefit.
| CardenB wrote:
| > Much more useful to focus on system level incentive than
| to focus on a small minority at the top.
|
| The issue is that the minority at the top can easily hinder
| development of system level incentive to cement their
| power, once they have achieved such a power imbalance.
| Aarostotle wrote:
| That's up to the CEO.
|
| Recognize that you -- and everyone else -- are relying on him
| to work just as hard, to take on just as much responsibility,
| while sacrificing more and more for every incremental dollar
| of value _he creates_.
|
| Your question implies a hope that the CEO will continue to
| take on massive responsibility and produce massive wealth,
| even when the main beneficiary of his productiveness will be
| the government, not him.
|
| If he doesn't choose to work harder, every incremental dollar
| disappears and the scheme fails. What happens then?
| runarberg wrote:
| This assumes that CEOs of massive heavily profitable
| company provide meaningful and productive contribution to
| the company, which is very much up for debate.
| snotrockets wrote:
| That's the beauty of it: the public benefit would remain
| the same.
| jonathankoren wrote:
| Lol. CEOs aren't some sort of demigods. In fact, most of
| them are just dumb shlubs that got lucky.
| Latty wrote:
| There should be an exponential wealth tax past a certain
| point. It's absurd anyone thinks it is sane to let people
| amass infinite wealth, eventually it just obviously
| fundamentally breaks democracy.
| snarkypixel wrote:
| There needs to be an asymmetrical rewards from taking a huge
| risk starting a startup. Otherwise people wouldn't do it and
| just work at big_company.
| chickenpotpie wrote:
| There's a middle ground that works better here. It's not
| like he wouldn't have started the company if his house was
| only $109million.
| stevenjgarner wrote:
| A wealth tax implies a tax on unrealized appreciated assets,
| which is beyond bizarre IMHO. So you buy a house for $500k
| somewhere. It surges in value to $1.2 million. You therefore
| have an unrealized capital gain of $700k. You are NEVER going
| to get that money until you sell it, and when you do you are
| going to pay a whopping amount of capital gain tax. But a
| wealth tax implies you pay that capital gain tax now. Okay so
| let's say you do. Then a year later there is a major
| correction to the real estate market (hmmm ... 2008). Your
| $1.2 million property (on which you paid a huge amount of
| wealth tax) is now worth say $700k. Do you get a tax refund?
| You never got the income. You should never pay the tax. No
| different if it is a $500k property or a $1 trillion company.
| It is not wealth until you have it.
| bradly wrote:
| The capital gains tax may never get paid. You can 1031
| exchange the property over and over again and then the
| gains are zeroed out when passed down generationally.
| theptip wrote:
| > You are NEVER going to get that money until you sell it
|
| If you need to unlock the equity you can get a HELOC. More
| generally, if you own an asset with a well-known pricing
| model you can use it as collateral for a loan.
|
| To your second point I believe you do carry over tax losses
| for some time.
| idiotsecant wrote:
| Yes, I see your point. 'Wealth' is what rich people have,
| in which case taxes on it's value don't make sense! That's
| ludicrous! 'Property', on the other hand, is what normal
| people have. The value of property _must_ be taxed, for the
| good of us all! Anything else would be silly.
| Johnny555 wrote:
| Oh, you mean like the property tax I pay on my unrealized
| house value?
|
| I don't get that tax back if I end up selling my house for
| half what it was taxed for last year. But I can appeal the
| evaluation for this year.
| stevenjgarner wrote:
| Depending on the jurisdiction, property taxes are usually
| a function of the property valuation. So at least if the
| property value goes down, theoretically so do your annual
| property taxes. The problem with a theoretical wealth
| tax, is that when the asset value goes down, too late
| you've already paid your wealth tax.
| elbigbad wrote:
| Your point seems a little orthogonal. If I pay tax on X
| value in year 1, value goes up and now I pay X*1.1 in
| year 2, then back to X in year 3 because the home value
| lowers again, I don't get a refund for the extra 10% paid
| in year 2 despite the fact that I never realized any
| value in the fact that my home appreciated for a year.
| Johnny555 wrote:
| Isn't that the same?
|
| If my house is worth $1M in 2022, I pay tax on that $1M
| of value. If it goes down in value to $500K in 2023 (and
| is reassessed), I'd pay tax on $500K value in 2023.
|
| If I own $1B of AMZN in 2022, I'd pay wealth tax on my
| $1B holdings in 2022, if the market tanks and AMZN is
| worth $50M in 2023, then I'd pay the wealth tax on $50M
| in 2023.
|
| Just as with property taxes, a wealth tax is generally
| annual based on current assets.
| Aeolun wrote:
| It feels weird I'd have to pay anyone just for owning
| something. Besides, how would you price private
| companies? Are those just going to be free?
| kelp wrote:
| I'm actually in this situation on my property taxes.
|
| In San Francisco there is a 2.5 month window to appeal
| your property tax assessment. I did that for 2020, and
| was successful (the hearing was like a year+ later) and
| they gave me a refund.
|
| I failed to do it for 2021, because I was under the
| mistaken assumption that they'd they'd also adjust my
| 2021 assessment after my appeal. They didn't. I guess
| that's on me?
|
| I just sold that property for a loss and 15% less than my
| tax assessment, and I'm well past the appeal period for
| 2021/2022 sales tax year. So I think I'm out of luck. I
| just over-paid by 15%.
| lovecg wrote:
| We don't have to be absolutist about it. Houses are not
| nearly as volatile as stock, so evaluating and taxing
| them as wealth is pretty feasible.
| stevenjgarner wrote:
| > Houses are not nearly as volatile as stock
|
| I know six million American households who lost their
| homes to foreclosure in 2008 that might disagree with
| that one.
| Johnny555 wrote:
| I live in a "hot" real estate market, my house has
| appreciated nearly 50% in 2 years. It's entirely possible
| that it will depreciate 20% or more over the next year.
| [deleted]
| rurp wrote:
| All of the serious wealth tax proposals I've seen have a
| rather high floor. A more practical hypothetical would be a
| person with 10m other assets worrying being taxed on the
| gains from their 5th vacation home.
| ipnon wrote:
| Billionaires are highly correlated with millionaires, which
| don't seem to be beyond the pale for critics of wealth
| inequality. Countries with billionaires rank much higher on
| quality of life than those without. It hurts to see Bezos and
| Musk in yachts but the side effect of their wealth is
| companies like Amazon and Tesla that have a net positive
| effect on society in terms of products and employment.
| jelliclesfarm wrote:
| Not to mention little old ladies, 50 year old ex fire
| fighters and retired unionized school teachers get full
| generous pensions because of stock market value of
| companies created by billionaires
| pmyteh wrote:
| Very little stock market wealth is held by pension funds
| on behalf of workers, as opposed to the already wealthy.
| See https://www.pensionsage.com/pa/Pension-scheme-
| holding-less-t..., for example. And the value on these
| schemes are disproportionately held by those who own
| and/or run companies rather than those who work in them:
| the Small Self-Administered Scheme is a popular means of
| UK tax avoidance for business owners who would like their
| capital gains tax free, and assets held in these schemes
| (on trust for the owner) will also be included in these
| figures.
|
| Returns on capital flow, unsurprisingly, to those with
| capital. And the concentration of capital in fewer and
| fewer hands is precisely the issue that people are
| objecting to.
| Apocryphon wrote:
| Yeah, about that:
|
| https://www.nytimes.com/2022/06/13/business/bear-market-
| time...
|
| > But 401(k) plans can still take a significant hit in
| market downturns. In 2008, for instance, as the S&P 500
| dropped 37 percent, the average 401(k) account balance
| for those who were in their 50s fell 24 percent.
|
| > People with retirement accounts are keeping more of
| their assets in stocks now, as opposed to bonds or a mix
| of other investments. "There has been a growing
| complacency of people keeping most of their nest eggs in
| stocks," said Monique Morrissey, who specializes in
| retirement at the left-leaning think tank Economic Policy
| Institute. "There has been a fundamental misunderstanding
| -- returns do not always average out."
|
| > "It's not just the loss from January; it's what happens
| going forward," she said. "If you were counting on the
| amount that you have in your 401(k) to continually grow,
| well, then you may never get to what you had planned
| for."
|
| Tying retirement plans to the market only looks good when
| there's a continuous bull market, less so when the bottom
| falls out.
| ineptech wrote:
| This isn't about yachts, it's about sensible policy.
| Corporations aren't a naturally occurring phenomenon whose
| autonomy we must respect; we wrote laws to allow them to
| exist because we thought they would be good for society.
| They mostly do, but when unfettered capitalism leads to bad
| outcomes, it needs to be fettered.
|
| So it comes down to: is a handful of pseudo-randomly
| selected[0] people having wealth on the scale of billions a
| good outcome or a bad one? Personally I think it's pretty
| obviously the latter, and if you agree then I struggle to
| see why a wealth tax isn't the obvious solution.
|
| 0: "It isn't random, they worked harder than everyone
| else!" Where would Microsoft be if Gates' mom wasn't
| friends with IBM's John Opel? Where would Amazon be if
| Bezos had been born 5 years earlier, or later? Etc.
| spullara wrote:
| I'm not as wealthy as them but I have never, ever had this
| feeling: "It hurts to see Bezos and Musk in yachts" Why
| does that hurt anyone? Doesn't it just help the people that
| make yachts and work on them?
| nickstinemates wrote:
| Some people are different than others. Some more so.
| yellowapple wrote:
| > Why does that hurt anyone?
|
| Because those yachts were bought with money skimmed off
| our labor.
| IMTDb wrote:
| Ah yes the famed 0 sum game.
|
| If that was the case, it should work both ways: when
| Bezos "lost" $20 billions of May 1st, how many skimmed
| labourers suddenly were able to afford $1 million houses
| ?
| int_19h wrote:
| The notion that employers are unfairly collecting
| economic rent from their employees doesn't require it to
| be a zero-sum game.
| yellowapple wrote:
| > If that was the case, it should work both ways
|
| Why would it? The notion that "it should work both ways"
| assumes that "both ways" are equally viable.
| mrcheesebreeze wrote:
| furthermore if many westerners woke up they would realize
| that many people envy them like we envy billionaires.
|
| The average joe in america and many other places has more
| money in a month than many have a year, the average
| american or european has access to luxuries other people
| dream off.
|
| We are rich by proxy of simply living in the states or in
| europe. Furthermore we also have more opportunities and the
| ability to become a millionaire too.
|
| We are envied by many places worldwide, we need to stop
| being angry at what others have and be better.
|
| I hate the anti-rich people talk because we could do far
| more productive things.
|
| besides, to many people we are included in that rich
| category we talk own about.
| rnxrx wrote:
| Do countries with more billionaires inherently rank higher
| in terms of quality of life, or do billionaires tend to
| live in places that already have higher quality of life
| (...particularly for the wealthy)?
| runarberg wrote:
| Or do the rich exploit workers in poorer countries,
| backing their wealth of the decreased quality of life in
| poorer countries?
| anony23 wrote:
| Or are the two things the same?
| robby_w_g wrote:
| > It hurts to see Bezos and Musk in yachts but the side
| effect of their wealth is companies like Amazon and Tesla
| that have a net positive effect on society in terms of
| products and employment.
|
| Corporations have a net positive effect on society, so we
| should sit by and watch the dragons add to their hoard?
| They don't need a billion dollars, it's just a video game
| to these people. They want to increase their high scores so
| they can be top of the leaderboard.
|
| Also, millionaires include people who saved a million
| dollars over their lifespan in order to retire. Retirees
| need that money if they want to live a modest lifestyle,
| pay for unexpected (or really expected at that age) health
| care costs, and support their grandchildren. It's a luxury
| we'd all be lucky to have and tragically many people
| weren't able to achieve. Add in an order of magnitude and
| what more do you get? What value does a person add to the
| world when they have a billion dollars instead of a
| million?
| runarberg wrote:
| It is worth noting that measures of quality of life are
| often conflated with wealth, even to a degree that they
| quite often use straight up economic metrics (like GDP) in
| their models.
|
| On top of that our global capitalist situation heavily
| favor exploitation in cheaper labor markets. So if you are
| a millionaire CEO in a rich country you are very likely to
| exploit your workers in poorer countries (or more likely,
| the workers of your providers and contractors) which
| overall increases the QOL in your country while decreasing
| it in your worker's country. Your correlation might be a
| cross causation.
| john_yaya wrote:
| "companies like Amazon and Tesla that have a net positive
| effect on society"
|
| Citation needed.
| ipnon wrote:
| My claim is that if these companies weren't useful than
| they wouldn't exist. People hate Bezos but they spend
| their money at Amazon. Methinks they doth protest too
| much!
| cute_boi wrote:
| People spend money on Amazon because it is convenient?
| However, I don't consider it to be net positive in
| current society. In many countries like India, many mom &
| pop stores are closed due to Amazon. They are destroyed
| thousands of business. Amazon is funneling money into its
| company which would have been distributed to multiple
| people. Seeing this drastic implications even CCP tried
| to clamp services like Amazon, Alibaba in China so they
| won't be too powerful.
|
| So, I think you need to prove how Amazon is net positive
| in society?
| hetspookjee wrote:
| You could argue the same for the likes of Philip Morris
| or the Sackler families business. Just that people are
| very willing to buy a product doesn't imply that it's
| good. So I wouldn't raise the fact that folks buying
| Amazon or Tesla products as a pointer that their products
| are any good perse.
| ipnon wrote:
| I think so. Cigarettes are enjoyable and Oxycodone is on
| the World Health Organization's Essential Medicine
| list.[1] You can also drive your Tesla off a cliff, or
| attack someone with a knife you bought from Amazon. The
| possibility of risky behavior doesn't necessarily make a
| thing useless.
|
| In the interest of full disclosure I enjoy the occasional
| cigar.
|
| [1] https://en.m.wikipedia.org/wiki/Oxycodone
| Apocryphon wrote:
| Amazon is immensely useful, but perhaps they are no
| longer a net positive to society. The goods and services
| they provide are certainly useful. But their status as a
| monopoly prevents a flourishing, competitive market that
| could address their failings. Amazon as a product is
| arguably poorer in quality than it used to be: just look
| at the state of their spammed-out reviews, scam products
| sold on their platform, etc. Their logistics offerings
| (built on poor working conditions) and AWS have certainly
| improved compared to the past. But other aspects have
| fallen short.
|
| Maybe we shouldn't speak of companies as being "net
| positive" or "net negative", but rather speak of what
| _could_ be improved if there was more competition, more
| companies, more market. Less monopolies.
| themacguffinman wrote:
| So what if their product is arguably poorer in quality
| than it used to be, so what if there are spammed-out
| reviews or whatever? You're not showing that any of their
| competitors are better in the eyes of most consumers, and
| they definitely have competitors, very large ones in fact
| (eg Walmart, AliExpress, eBay).
|
| If you think Amazon is unfairly using their monopoly to
| keep others out and capture the market, state your claim.
| If you think competitors _could_ do better, prove it with
| consumer choice.
|
| Walmart or Shopify or eBay or wherever you want to shop
| are just a click away. If consumers think they can do
| better, then they will. I have already ditched Amazon for
| all those reasons. But you cannot speak for others.
| Apocryphon wrote:
| Consumer choice is binary, but it's not always tied to
| quality. There are factors like information asymmetry.
| Superior competitors may not be able to get a word in
| edgewise when the dominant player is able to blanket the
| airwaves with its brand. A disproportionately dominant
| position becomes a kind of monopoly of its own when its
| reach and resources are so much greater than the next set
| of competitors.
|
| The competitors you list also aren't head-on in
| competition with Amazon. Aliexpress predominantly serves
| non-American markets. eBay, like it, is an auction site.
| Shopify does not have one central market, it's completely
| decentralized. Walmart is the most similar to Amazon, and
| perhaps with its acquisition of Jet.com and its growing
| investments in ecommerce, it may yet prove to be a
| lasting competitor. Stay tuned.
| themacguffinman wrote:
| No it's not always tied to quality, it's just tied to
| what they want. If consumers don't prioritize quality,
| that's their rightful choice in the market, it's no one
| else's place to tell them what they should prioritize.
|
| Greater reach and resources is part & parcel of being the
| top consumer choice. If they blanket the airwaves, if
| there is some asymmetry, still who cares? You're going to
| have to show how consumers do not have a choice or how it
| _doesn 't_ help consumers.
|
| Because regardless of how intense Amazon's marketing and
| reach get, their competitors are still one click away.
| Finding out about competitors is one search query away,
| one media article away, or one advertisement away.
| Frankly, if a consumer is unable to expend the minimal
| effort to find & choose an Amazon competitor to buy a
| product, they're basically not trying at all. And not
| trying is their choice.
| Apocryphon wrote:
| Consumers don't have a choice if there is information
| asymmetry and they are unaware of better offerings. And
| as I have illustrated, there is no single "Amazon
| competitor" as they are all online retailers in different
| spaces. Even Walmart's e-commerce initiatives are
| relatively new. A cursory search of competitors yields
| this list (https://www.shopify.com/blog/amazon-
| competitors) which has eBay (auction house, not in same
| class), Walmart (relatively new entrant to online space),
| Flipkart (India), Target (brick-and-mortar, smaller
| footprint than Walmart), Alibaba (China and APAC), Otto
| (Europe), JD (China), Netflix (only a competitor in
| streaming), and Rakuten (Japan and APAC).
|
| As far as anti-competitive behavior, I will defer to
| luminaries more informed than I
|
| https://www.yalelawjournal.org/note/amazons-antitrust-
| parado...
|
| https://www.natlawreview.com/article/amazon-wins-ruling-
| resu...
| ryan93 wrote:
| everyone is award apple brand cables are good quality
| compared to 4 dollar cables on amazon
| passivate wrote:
| There were a lot many years from the time of Amazon's
| inception till they became a monopoly. It seems like your
| "what could be" experiment has already been done. There
| was plenty of opportunity, but nobody managed to build a
| better competitor to them.
|
| It is a separate argument, but 'more competition' isn't a
| magical fix to everything. This sort of gating mechanism
| relies on the end user/consumer having good knowledge,
| sound judgement, etc. Also what is best for the consumer
| isn't best for the society. A wild example - For me, as
| the consumer I'm happy to get an iPhone for $200, but
| that might mean that Apple pays their employees below US
| minimum wage.
| passivate wrote:
| For me, I am convinced that they create jobs, spend money
| in the economy, help provide valuable goods and services
| to society, etc. Amazon is famous for not hoarding money
| but re-investing their profits. Most 401ks invest in
| index funds that are buoyed by the tech stocks. I don't
| have ready citations but I believe these to be relatively
| uncontroversial statements. This whole talk about "net
| positive" and what is "net" is a pointless discussion
| that is going nowhere. There is no way to prove anything
| unless we have an alternative universe without Amazon to
| study.
|
| What sort of citation will make you happy?
| runarberg wrote:
| States provide the infrastructure and educate the
| workforce which enables the job creations. Jobs would be
| created without the rich. See responses sibling post
| (https://news.ycombinator.com/item?id=31743755) about the
| issue with 401(k) (or pension funds in non-USA
| countries).
|
| This is indeed a very controversial statement because the
| rich are living a lifestyle which is at best
| unsustainable for the planet. They emit more greenhouse
| gas into the atmosphere for their own lavish lifestyles.
| They exploit poor labor conditions and lobby against
| every minor improvement. They don't contribute to our
| shared funds like regular people, decreasing the state's
| funds for more infrastructure which would have created
| more jobs. And they cause stress with their increased
| wealth disparity. Many research has shown perceived
| inequality is a significant stress producer. We may very
| well be bettor off without them.
| dgudkov wrote:
| History teaches us that people who don't want billionaires to
| exist eventually start not wanting millionaires to exist.
| SketchySeaBeast wrote:
| Does it? Is there an example of said gradual progression?
| tastyfreeze wrote:
| Just look at how the 17th Amendment was sold...
|
| https://www.crf-usa.org/bill-of-rights-in-
| action/bria-11-3-b...
| adastra22 wrote:
| > Ok, I'll admit it, billionaires should not exist at all,
| there should be a heavy wealth tax that makes it hard to
| become a billionaire. Will a CEO work less hard if he (and
| his peers) can only ever gain $100M in net worth before a
| wealth tax on assets kicks in?
|
| In my experience from having known a couple of mega-rich
| CEOs, yes. Even those who are not principally driven by the
| money or three-commas social signaling, they still want to
| leverage their accumulated assets into changing the world in
| some way. Take that away from them and they lose motivation,
| yes.
| azemetre wrote:
| What gives these individuals some sort of divine right over
| citizens in a democracy? I feel like people are ignoring
| that human history already went through this period in the
| era of monarchies and divine rule.
|
| It was a disaster then, it's a disaster now, and it'll be a
| disaster in the future.
| CardenB wrote:
| There's a gulf between sam altman and jeff bezos. We can
| still have rich people with the leverage to act efficiently
| without giving them the ability to buy entire nations if
| needed.
| corrral wrote:
| Cool. They can retire and one of the thousands of other
| people who can (and want to) do their job can step in. If
| that starts causing problems, companies need to work on
| training programs for their leadership. It'd be an amazing
| side-effect if this pushed us toward it being more common
| to "rise through the ranks" and end up CEO. And if it
| caused us to start generating tens of people with a $100m
| net worth for every one one billionaire we'd have had
| otherwise.
| asiachick wrote:
| why? So instead we have government officials with more money
| to hand to random cronies and massively wasted via graft?
|
| What I like about billionaires is they cut through the red
| tape and often through the inefficiencies. I actually like
| they don't need consensus to decide what to use their money
| for. I don't agree that taxing that money away from them is a
| net positive for society.
| fairity wrote:
| > Will a CEO work less hard if he (and his peers) can only
| ever gain $100M in net worth before a wealth tax on assets
| kicks in?
|
| Yes. You would increasingly see founders depart their
| companies as soon as a heavy wealth tax kicks in. It's
| difficult to prove that this would have large net negative
| impact on overall well-being, but I imagine it would.
| rglullis wrote:
| Why stop at 100M? Why not 50M? Why not 10M? Why not 250k?
|
| Trying to control the amount of wealth one "should" have is
| misguided. We should have ways to limit the amount of _power_
| that can be concentrated. If we did that, we would have a
| better shot at having a more equitable society:
| https://news.ycombinator.com/item?id=31317641
| pkulak wrote:
| Just because you can't immediately pinpoint where a line
| should be, doesn't mean that it shouldn't exist at all.
| rglullis wrote:
| True, but my argument is that this is the _wrong_ metric
| to be regulated.
|
| I don't care that there are people richer than me, I care
| that there are people with too much power on their hands.
| pkulak wrote:
| I'm okay with a poor, powerful person. That means they
| have their power through some means other than wealth
| accumulation; popular election or something. People who
| are powerful because of money usually didn't even get the
| money themselves. It's the new hereditary monarchy. Get
| rid of all the money, and you get rid of the undue power
| as well.
| Arrath wrote:
| In that case we will need to decouple money from power,
| somehow.
|
| Starting by no longer equating giving money to politicians
| as an exercise in free speech would be as good a place as
| any to start.
| rglullis wrote:
| There is a much easier way to do it [0], we just need to
| be willing to get rid of Corporativism.
|
| [0]: https://news.ycombinator.com/item?id=31317641
| Arrath wrote:
| "- no business entity can have more than 150 people."
|
| How is that supposed to work with any labor intensive
| process?
|
| E.g. I work on a construction project where there are
| over 220 field craft workers on day shift alone. Office
| staff and inspectors are another 100 or so. Night shift
| adds yet more.
|
| Should each of those be its own business entity?
| rglullis wrote:
| Yes, or your company will have to invest in automation.
| Both alternatives are good.
|
| Third option, we stop working on such large projects, and
| focus our collective efforts on making our societies and
| our environments more human-scaled. Again, it is an
| option that I see as _good_.
| Arrath wrote:
| At first brush, it seems that any gains in automation
| will immediately be offset by duplication of
| administrative minutiae in all these new, smaller
| business entities. Administration, payroll, regulatory
| compliance, safety programs, training programs etc etc
| this is the absolute opposite of improved productive
| ability, is it not?
|
| As to the third option, 'human scale' is just cresting 8
| billion individuals. We will never escape the need for
| massive infrastructure projects.
| rglullis wrote:
| > Administration, payroll, regulatory compliance, safety
| programs, training programs...
|
| These can be outsourced, automated and/or reduced in
| scope. Each company would be a lot more specialized in
| their function, so it wouldn't make sense to keep the
| same set of regulations and policies that we use for
| larger corporations.
|
| > We will never escape the need for massive
| infrastructure projects.
|
| Au contraire, I think that we only push for "massive
| infrastructure projects" because we are addicted to
| growth. Governments push for growth as a way to keep
| financing their debts, corporations push for growth as a
| way to justify their existence.
|
| If we were limited in our ability to grow and established
| that things needed to be settled organically, cities
| would be more dispersed _but still dense_ and suburbia
| would not exist. Global trade would be impacted, _but_ we
| would be forced to re-learn how to manufacture things
| locally. Governments would have to figure out ways to
| sustain the populations with tighter constraints, _but_
| we would not get things like the European dependency on
| Russian gas, etc.
| anonporridge wrote:
| This means that if your business grows to a multi billion
| dollar valuation, you are reward for your success by
| immediately losing controlling share of your business.
|
| This might mean that motivated found might work less hard to
| make their businesses as competitive and big as possible, and
| could slow down the pace of innovation.
| cwkoss wrote:
| The world would be a better place with fewer monolithic
| walled gardens. It would encourage CEOs to build $999M
| businesses that interoperate with other businesses on the
| free market rather than acting like a cartel controlled
| within a single organization.
| nipponese wrote:
| By current COIN marketcap he is barely a billionaire. I
| figure by the end of the month and another rate hike, he will
| no longer qualify as a billionaire.
| repomies69 wrote:
| That must be incredibly tragic for him.
| passivate wrote:
| By that same logic, why should USA salaries be higher than
| the rest of the developed world? Will you work less hard if
| you can only get $70,000 versus $200,000? The CEO is an
| employee. The owners of the company hire him/her to do a job.
| dcow wrote:
| If it's hard then it's still possible and where do you think
| the extra resources will have to come from to realize the new
| generation of billionaires?
| subdane wrote:
| Imagine if billionaires had the same _effective_ tax rate we
| do. That would be helpful enough.
| tastyfreeze wrote:
| I would like all levels of wealth to be treated the same. Why
| do we penalize people for being successful? If I knew you
| and, by some stroke of luck, you happened to become monocle
| and top hat wealthy I would congratulate you on your success.
| I would even buy you dinner to celebrate. I would not demand
| a share of your wealth just because you have a lot of money.
|
| There are some systemic issues that cause wealth inequality.
| We should focus on fixing those issue to enable more people
| to enjoy success. Not trying to take from the most successful
| individuals in the grand game of life.
| munificent wrote:
| _> Why do we penalize people for being successful?_
|
| I assume you mean "relative to people that are less
| successful". The answer is because the marginal value of
| wealth decreases the more you have.
|
| If you're poor, $1,000 is the difference between your kid
| seeing the doctor or not. If you're rich, it's a nice meal
| out.
|
| _> There are some systemic issues that cause wealth
| inequality. We should focus on fixing those issue to enable
| more people to enjoy success._
|
| The core systemic issue is that wealth is a positive
| feedback loop. The more you have, the more you can leverage
| it without _losing_ it in order to get more.
|
| Treating all levels of wealth the same is directly
| incompatible with resolving this positive feedback loop.
| You need a counterbalance that scales with the level of
| wealth, because the magnitive of the positive feedback loop
| does.
| tastyfreeze wrote:
| So? Are we not all to be treated equally under the law?
| It doesn't matter that higher income earners are able to
| pay more in taxes. The government is required to treat
| all individuals equally.
|
| Fix the problems that exacerbate wealth inequality.
|
| Remove regulations that inhibit competition.
|
| No business is too big to fail. (Most big banks would
| have been destroyed in 2008)
|
| Stop manipulating the currency to the benefit of the
| investor class.
| agumonkey wrote:
| > The best mindset is that you could be gone tomorrow.
|
| I find this a bit too cynical.., that said, it's also a good
| mental spot to not let your job define you define your job as
| much as possible. You try to make everything that you enjoy on
| a daily basis(hopefully you still have that possibility). Tasks
| that grow your skillset, new things, any reason.. so that if
| you're let go.. there's very few days you didn't profit.
| subsubzero wrote:
| Wow that severance is incredible! They reached out to me awhile
| ago but thought their whole platform being tied to crypto was
| extremely risky. Engineers need to save for bad times and have
| months and months of cash for downtimes as in 3-4 months there
| will be alot of people looking for jobs.
|
| Fun fact in 2009 I interviewed at google and the HM said that
| 500 people applied to the job I was interviewed at(onsite) and
| there were 3 others that were also brought onto the onsite, so
| 4 out of 500 getting a chance to interview, with only one
| making it. Lets hope it doesn't get that bad again.
| pram wrote:
| I mean, that was Google. In 2010 I got a Linux admin job from
| a 30 minute call so it's not like employment was an
| impossibility.
| myth_drannon wrote:
| Right, I got an incredible remote startup job in 2009 after
| two 30 minutes general phone interviews. It was my longest
| unemployment period ever of about 4 months. This time can't
| be as bad as 2008.
| lumost wrote:
| If there is a slight here, I suspect it's the belief that
| Coinbase was effectively a pump and dump on behalf of the
| founders and some investors - for which the employees were
| along for the ride.
|
| That Armstrong liquidated a large position and moved it into
| real estate, plus the lackluster stock performance compared to
| what coinbase was _likely_ promising employees leads to this
| feeling. For a while, coinbase was competing with the top firms
| in the world on Compensation - the employees probably missed
| out by joining.
|
| But that's the breaks, I doubt many employees would have been
| happier if the founders and core investors in coinbase were
| taking a bath to.
| taternuts wrote:
| I would love to get laid off with 3.5 months salary, what a
| dream
| [deleted]
| objclxt wrote:
| > Coinbase was also extremely generous with severance. 12 weeks
| plus two for every one year at the company, I think [...] Three
| and a half months of dev salary is pretty incredible.
|
| ...literally this is the minimum they can get away with in some
| jurisdictions. It's illegal in plenty of countries to conduct
| mass layoffs without either a consultation period or putting
| people on garden leave (i.e, severance).
| kamikaz1k wrote:
| Can you cite a few example jurisdictions? I am just curious
| because I've seen less before, even for companies with
| international presence.
| georgeburdell wrote:
| The WARN act in California is a good example [1]. They must
| give 60 days notice, but the way to get around this (it
| seems) is to lay off without warning and give 60 days pay.
|
| [1] https://www.shouselaw.com/ca/labor/wrongful-
| termination/warn...
| dabeeeenster wrote:
| In the UK: https://www.gov.uk/staff-redundant/redundancy-
| consultations
| ausbah wrote:
| >I think if employees feel slighted by being fired, they're
| fooling themselves. The best mindset is that you could be gone
| tomorrow. It gives you clarity and purpose. It also happens to
| be the truth.
|
| sorry but this reads like you drank the whole bowl of US
| corporate kool-aid. the insecurity and stress the comes from
| not knowing if you'll have a job tomorrow in literal insanity.
| 14 weeks severance shouldn't be seen an some benevolent gift
| from a god-brain billionaire, it should be the bare minimum if
| they still have the right to fire me in a whim
| usefulcat wrote:
| Sincere question: would you give up your right to quit "on a
| whim" if your employer gave up their right to fire you "on a
| whim"?
| cupofpython wrote:
| I would, yes. 30 day terms would work for me as it does for
| many business to business agreements. I dont agree with the
| other commentators entitlement to 14 weeks of severance pay
| in any situation, however
| Afforess wrote:
| Yes? The power imbalance there is obvious. Employers have
| much greater access to wealth, capital, and lobbyists. As
| an individual I have no such agency. So yes, trading away
| risk in exchange for fixed contracts is a great deal in
| most circumstances. Most of modern finance exists to
| exchange risk for dollars in some sense.
| flatiron wrote:
| i don't think that's equivalent. it's tremendously easier
| for a company to fill a position than a person get another
| position somewhere else. this is a billion+ company. some
| developers probably live paycheck to paycheck.
| Blahah wrote:
| No, because humans and their needs are much more important
| than companies and the profits of their owners.
| lkrubner wrote:
| This is not a hypothetical in Britain. Many categories of
| workers cannot be fired on a whim, nor can they quit on a
| whim. Many people prefer that trade-off.
|
| For example, in 2012, at Timeout, Aksel Van der Wal was
| promoted to CEO. He had previously been the CTO, and now we
| needed a new CTO. We made an offer to a person who had a
| great reputation as an engineering manager at another
| company. But he was on a contract he could not get out of,
| nor would his employer let go of him. So we had to wait 9
| months, while he finished that contract, before he could
| join us.
| babyshake wrote:
| Even if doing huge amounts of hiring during good times and
| quickly pivoting to doing large layoffs during bad times is
| ethical, it sure does seem wasteful and not indicative of
| great leadership. Although it does seem to be the norm now,
| if recent years are any indication.
| thethimble wrote:
| Well it's not clear that anyone could have predicted the
| timing of this downturn. Just a few months ago people were
| painting a very rosy picture for the future. In that
| context, metering investment can have a huge opportunity
| cost as well.
|
| I'm not advocating for CB - just suggesting that it's
| harder to predict the future than you are implying.
| baq wrote:
| Exact timing? No. General direction? There are people who
| made that call in November, plenty more joined January-
| February. Note the question is where does this end and
| those same people are the first to admit nobody knows,
| because the fed doesn't know - and the answer is, when
| the fed pivots.
| synaesthesisx wrote:
| We knew that rates going up was inevitable, and that
| crypto is essentially a sponge for excess liquidity. We
| knew that inflation was inevitable (to an extent) given
| the Fed's actions over the last two years. Upon
| observation of the current macroeconomic environment, it
| appears that either markets did not properly price in
| rate hikes, or there is something far worse happening
| that will ultimately trigger a valuations reset.
| TAForObvReasons wrote:
| That's still a very employer-centric view. If the company
| reasonably expects a downturn at some point, it should be
| preparing with right-sized sustainable hiring. It's not
| "metering investment" but rather "building a sustainable
| business". Rushing to hire as many people as possible,
| then firing during a downturn, creates the impression
| that employees are cannon fodder.
| [deleted]
| sacrosancty wrote:
| You still have your career and can get another job somewhere
| else. If your whole industry has collapsed so you have no
| alternatives, then that's a risk to prepare for in your
| general life plans. The world doesn't owe you comfort and
| security but you can easily create it for yourself if that's
| what you want. Also, obviously don't work at a crypto startup
| if you want that either!
|
| I've done this for myself. I can't be fired, and I have 3
| different "career" directions I'm going in at the same time.
| I'm not a high flier in any of them, but at least one is
| bound to always be available. That's comfort and security.
| moneywoes wrote:
| Any suggestions for getting this done? In a similar boat
| looking for some safety net. Are you describing overworked?
| derefr wrote:
| Someone could come along and ruin your life by framing you
| for some morally-awful social-presumption-of-guilt crime. Or
| a nuclear war could start tomorrow with a strike on your
| city. Or a tiny little meteorite could happen to fall
| directly on you. Or God could stop+terminate the VM
| containing the universe mid-run.
|
| The insecurity and stress are the human condition, my friend.
| That's what it means to be sentient.
| gusgus01 wrote:
| I think there's quite a statistical difference between
| being laid off and the situations you listed.
| ldthorne wrote:
| That is a false equivalency.
|
| We (theoretically) have control to improve and enhance
| workers' rights, and can make legislative changes to
| increase job security, or decouple the ability to live and
| subsist with employment.
| helmholtz wrote:
| What the fuck? So one should actively go out and seek more
| of it? To me, BECAUSE things are uncertain, there's even
| more value in things that can be made certain. Then, we at
| least have the hope of being free to devote our limited,
| anxiety-riddled, conflict-avoidant, procrastinating brains
| on the parts that matter. I don't want to have to worry
| about things like health insurance or the wham-baam-thank-
| you-ma'am nature of US Capitalist idiocracy.
| myle wrote:
| You are arguing that because very negative but also very
| unlikely events that we can't control, may happen, we
| shouldn't as society try to improve the conditions of our
| lives?
| ycta2022061413 wrote:
| Unfortunate that workers have internalized the idea that they
| are disposable tools and not long-term assets. It wasn't that
| long ago that large corporations like IBM and GE prided
| themselves on how many people they employed, how much salary
| they paid and even how much in tax $ they gave to the
| gov't[1].
|
| 1: https://www.npr.org/2022/06/01/1101505691/short-term-
| profits...
| antihero wrote:
| Get paid for two months to party/holiday/rest, the have
| another whole month (paid) to lazily job hunt in a crazy hot
| market and walk into the next place with a 10-30k raise.
| Happened to me a few times, was fucking awesome.
|
| Lack of healthcare would have been a worry but I'm in the
| U.K. where we get it free.
|
| How hard is it to fund your own US insurance on a tech salary
| to tide you over?
| Bluecobra wrote:
| > How hard is it to fund your own US insurance on a tech
| salary to tide you over?
|
| Healthcare is NOT cheap if you want to maintain the same
| plan. I had to pay $2K a month for a family plan under
| COBRA several years ago. This is the same as a mortgage
| payment for me. Typically your employer bears the majority
| of your insurance cost, but you pay all of it under COBRA.
| antihero wrote:
| Oh wow that is absolute madness. That covers your costs
| for pretty much everything, right?
| SahAssar wrote:
| The reason to have guaranteed severance for a long-ish time
| (3 months or so) is to soften your landing when the
| market/economy does not guarantee you a more well-paid job
| within that time. We might be entering one of those times,
| we might not, either way you should be prepared for it. If
| your employer has already made sure that you are prepared
| for it then that is less stress for you, which is good for
| everyone. It also means more predictable (although maybe
| higher) costs for the employer, which is usually good for
| them too.
|
| It seems like tech-workers assume that things will always
| be easy on them when history clearly doesn't bear that out.
| svachalek wrote:
| In the US there is something called COBRA, which allows you
| to continue the company plan for a year by paying the full
| amount (most companies will pay all/some of it while you
| are employed). It really depends on what kind of coverage
| and whether it's an individual or a family but it ranges
| from several hundred to over $1000 per month.
|
| The whole system sucks really, but in today's economy I
| think most of these people will be just fine just because
| so many companies are hiring.
| usefulcat wrote:
| Depends on your age and dependents, but in the US the cost
| of health insurance can easily be in the same price range
| as housing. Employees are often not aware of the actual
| cost since most or all of the premiums are often paid by
| the employer.
| baq wrote:
| The problem is the market is losing heat by the hour.
| There's absolutely no guarantee there's anyone hiring in a
| couple months. This year is very unlike the past ones.
| Closest analogue would be 2007 into 2008... until it's
| 2001. Stay alert, eyes on the ball at all times.
| AlexandrB wrote:
| I think the parent's statement was descriptive, not
| normative. The writing was on the wall when unions became
| scarce and "at-will employment" became the norm.
|
| The fact that things _shouldn 't_ be like this doesn't change
| the fact that they _are_ like this.
| Sindrome wrote:
| You signed an employment-at-will agreement. You have no
| rights.
| tschellenbach wrote:
| It does seem insane to me that healthcare is tied to
| employment.. that's just crazy
| bojangleslover wrote:
| It's not. You can buy (and deduct) it on healthcare.gov.
| Ask any self employed person.
|
| You're also paying it out of your salary with employer.
| There's no such thing as "employer match."
| nxm wrote:
| There's Medicaid for these situations
| cupofpython wrote:
| my healthcare was actually better when i was unemployed
| than it is with my current company
| boringg wrote:
| This part never makes sense to me. I've had friends stay in
| jobs to keep getting healthcare treatment - it's not great.
| Apocryphon wrote:
| It's a complete relic from the WWII era.
| xapata wrote:
| It's a relic from the days when Americans only wanted
| "upstanding citizens" to get subsidized healthcare.
| tzs wrote:
| It actually came about due to labor shortages during
| WWII. So many people were drafted into the military or
| voluntarily joining that employers were having trouble
| finding enough workers.
|
| To prevent this from leading to rampant inflation the US
| passed laws that regulated wages and prices, such as the
| Emergency Price Control Act of 1942 and the Stabilization
| Act of 1942.
|
| Insurance and pension benefits were not counted as wages,
| and so employers that could no longer legally raise wages
| to get people people to come work for them instead
| started offering health coverage.
|
| Americans, who before this had largely been on their own
| when it came to healthcare, liked this, and so even after
| the wage controls ended unions bargained to keep those
| benefits and over the next decade or two expand them to
| include vision and dental benefits.
|
| By the early '60s it was clear that there was a serious
| problem inherent in this. Employer sponsored health
| insurance had become that basis for nearly the entire
| American healthcare system. People who then left that
| system such as when they retired often found they could
| not afford to buy their own insurance. And so Medicare
| and Medicaid were created to try to handle people who
| could not get employer provided health insurance.
|
| We almost got major healthcare reform in the early '70s.
| Senator Kennedy proposed a single-payer system that would
| be available to every American. President Nixon proposed
| a system that pretty close to the ACA (aka Obamacare).
| Then Watergate happened and pushed healthcare reform to
| the back burner were it sat for around 40 years.
| boringg wrote:
| What glorious risk-free world do you live in? The low
| volatile relatively risk free last decade and a half just
| vanished the next 5 - 10 years is going to be a much rougher
| ride.
|
| 14 week severance bare minimum at a private company? That
| sounds very rich.
|
| [edited for better manners]
| alphabetam wrote:
| c) European.
| Broken_Hippo wrote:
| I was going to reply the same. Heck, you don't even have
| to actually _be_ European if you just read what
| protections you have in other places.
| daenz wrote:
| According to this[0], the absolute most generous package
| is the Netherlands, which offers 1/3 of your monthly
| salary for each year of employment. To receive 14 weeks
| of salary, you'd need to work at a company for 10 years.
| Coinbase was founded in 2012.
|
| Other "European" countries have much worse severance
| packages. So what Coinbase offered seems to be better
| than even the best country in Europe.
|
| 0. https://www.claimsattorney.com/2020/05/understanding-
| severan...
|
| EDIT>> Correcting years
| meheleventyone wrote:
| Don't mistake the legal statutory minimums with normal
| practice.
| daenz wrote:
| Are you suggesting that European countries regularly
| offer severances to all employees that exceed what is
| legally required? Can you provide a source?
| baq wrote:
| Yes, anecdotally, no recent evidence, though expect to
| gather some in the next year or two.
|
| The last time my company laid people off it have very
| generous severance packages, way above the legally
| required 1/3 months depending on duration of employment.
| Marsymars wrote:
| I don't know about Europe, but in e.g. Canada, employees
| are generally entitled to common law severance, which is
| significantly more than the statutory minimum severance.
| e.g. https://www.monkhouselaw.com/how-much-severance-pay-
| should-i...
| SahAssar wrote:
| Different countries have different laws, but at least in
| sweden it is common to be part of an income guarantee
| program (a-kassa, usually via a union but can also be
| outside of it: https://en.wikipedia.org/wiki/Unemployment
| _funds_in_Sweden). You get around 80% of your income for
| the first two thirds-ish of a year (200 days) and 70% for
| the rest of the year.
|
| It's obviously good that this is handled outside the
| employers control.
|
| After that you get the normal unemployment benefits from
| the state which is capped at a low but livable level.
|
| It is (in sweden) abnormal (and illegal) for companies to
| just fire people without cause, and the valid causes are
| pretty restricted. One of the few valid causes are lack-
| of-work (arbetsbrist), but even that triggers
| negotiations between the employer, the employee and the
| union, and is usually a last-in, first-out thing. The
| employment contracts are always including a fixed notice
| (I think it's 3 months regulated by LAS, can be lower if
| your on a trial employment up to 6 months).
|
| As an example, the klarna downsizing was major news in
| sweden a second time because of their obviously illegal
| way of handling firings.
|
| > Other "European" countries have much worse severance
| packages.
|
| Please give me a source.
| daenz wrote:
| >Please give me a source.
|
| The source is in my post. They cover France, Luxembourg,
| UK, and the Netherlands, and the first three are worse
| than the Netherlands.
| rocgf wrote:
| You are comparing apples and orages.
|
| Coinbase was generous, it could have chosen to give them
| exactly 0 and that would have been legal.
|
| You're taking the best case scenario in one case and
| comparing it to the norm in another country.
| daenz wrote:
| The person I was replying to was taking the norm in
| another country and suggesting it is as-good-as-if-not-
| better than what Coinbase offered.
| mlyle wrote:
| > which offers 1/3 of your monthly salary for each year
| of employment. To receive 14 weeks of salary, you'd need
| to work at a company for 3.5 years,
|
| 1/3rd of a month is 1.44 weeks. To get 14 weeks, that
| would be 10 years.
|
| You're right in that Europe generally provides less
| severance, but they do tend to sign fixed term, renewing
| employment contracts with rather lengthy notice periods
| for _either side_ to terminate it. E.g. in Switzerland,
| statutory minimum after 1 year of employment is end-of-
| calendar-month + 2 months of notice, but typical
| agreements extend this.
|
| Also, there's the whole concept where regulators are
| involved with layoffs and negotiate for payments and
| assistance in many jurisdictions.
| daenz wrote:
| Thanks for the correction!
| arrrg wrote:
| Long notice periods typically soften the blow in Germany.
| After the first six months (where both sides can call it
| quits with two weeks notice and without cause) the notice
| period is four weeks to the 15th or last day of the month
| (and firing people without cause is no longer possible).
| There are some circumstances when that notice period is
| not relevant (if the employee is caught stealing, for
| example), but those don't matter here.
|
| From 2-5 years it's one month (to the last day of the
| month), from 5-8 years it's two months, eventually maxing
| out at seven months after twenty years. That's the notice
| period for the employer. It can and often is asymmetric
| but can never be shorter for the employer than for the
| employee.
|
| However, these are the legal minimums. Many employers
| will have longer notice periods in their contracts which
| apply to both sides. Something like three months or so
| isn't uncommon.
|
| Severance pay can even lead to problems with the
| mandatory unemployment insurance (which in most cases
| will pay you 60 - without kids - or 67 percent - with
| kids - of your last net earnings for a year) that can
| reduce the payout from that insurance (and then it
| becomes a game of calculating severance vs unemployment
| insurance, which can be annoying).
| virissimo wrote:
| On the other hand, unemployment is consistently higher in
| Europe than in the US (and wages are lower), so pick your
| poison.
| rocgf wrote:
| I think it's an easy pick, to be honest.
| boringg wrote:
| The US.
| rocgf wrote:
| In Europe you have guaranteed minimum wage, can't be
| fired without good reason, healthcare, all sorts of other
| help if you lose your job, public transport/cheap means
| of getting around. It's not even close for the typical
| worker.
| raesene9 wrote:
| I see they cut off access for staff before telling them. not an
| atypical move, but I wonder if they were actually able to revoke
| all access, given there's systems like Kubernetes where some
| auth. types can't be revoked once granted.
| JamesSwift wrote:
| I would expect there to be a VPN in place with revokable login
| raesene9 wrote:
| As long as their cluster API servers aren't on the
| Internet.... which is a default for AKS, EKS, and GKE :)
| (there's 1.3M servers identified as Kubernetes directly on
| the Internet according to Shodan's latest stats).
| bombcar wrote:
| Which is why even with zero-trust and such, things like a VPN
| can be useful as a "catch-all".
| BonoboIO wrote:
| Being an employee in a high risk field like crypto is a tough
| business.
|
| You are everyday one day away from a massive market crash or
| crypto heist to be let go.
|
| (Yes, conventional companies too, but not to this extent)
| repomies69 wrote:
| On the other hand they could've been growing much more
| modestly, and then there wouldn't be any layoffs. Not much
| different to other IPOing companies, many are doing layoffs
| now. Crypto has little to do with it.
| greggsy wrote:
| People were gainfully employed during that period, and are
| receiving generous severance by any measure. The alternative
| is that those people aren't employed at all, or working in
| another job that might be just as risky. Crypto has _a lot_
| to do with it: The industry itself is known for its
| volatility, so there's some expectation that they took up the
| role with an understanding of the risks to those tenure.
|
| This isn't a McDonald's or Walmart hiring unskilled labour at
| low rates, knowing full well that people are replaceable.
| joshmarinacci wrote:
| Coinbase had over 5k employees?!!! WTF. What were they all doing?
| [deleted]
| sytelus wrote:
| And they still didn't have ability to provide statements!
| beefman wrote:
| About 10% as much as employees at FTX, apparently
|
| https://craft.co/ftx-exchange
| asdff wrote:
| Their API at least regularly times out for me. Probably half of
| them are in the server room with a fire extinguisher at all
| times.
| fortuna86 wrote:
| Gotta spend that seed rd money somehow
| habitue wrote:
| They're a public company
| fortuna86 wrote:
| My fault. They had to justify their stock price with a
| higher headcount somehow.
| Geee wrote:
| Probably customer service. They have about 100 million
| customers, so 1 employee per 20000 customers.
| muttantt wrote:
| The last thing Coinbase is doing is customer service...
| DoubleDerper wrote:
| Coinbase is notoriously poor at customer service, so this
| doesn't make sense.
|
| https://news.ycombinator.com/item?id=27653022
| oh_sigh wrote:
| 1 employee per 2000 customers seems like it makes perfect
| sense as to why customer service would be bad.
| nickjj wrote:
| It doesn't need to be.
|
| For example I do personal customer support for ~40,000
| folks who take one of my video courses (programming and
| tech related).
|
| I often write personalized multi-sentence responses to
| their issues and follow up to reply back to them as many
| times as needed to get it fixed within minutes or hours
| of a request coming in.
|
| I think the big difference there is it's my business. The
| best possible customer experience outcome is the only
| option in my mind, if it would even hint at being
| anything less then I wouldn't have this business anymore.
| arrosenberg wrote:
| The big difference is that you aren't involved with
| peoples' finances. There is a whole other level beyond
| the crazy you attract in services and retail.
| nickjj wrote:
| That's true, but upset developers are up on the list of
| "how can I word this to be the most passive / aggressive
| as humanly possible".
|
| To be fair I think customer support in general is a
| hostile environment for the receiver. Everyone coming at
| you is usually dealing with an unexpected issue in some
| way that's preventing them from being able to do what
| they wanted to do. There's been a huge range of things
| I've seen. Everything from super nice folks including
| huge amounts of details and are calm to nothing more than
| "it's not working" and in 1 case a death threat because
| Docker wouldn't run on his Windows box. I don't think it
| was a serious threat (I'm still alive), but he wasn't
| trying to be funny. He was really upset.
|
| I don't let those things phase me. I help everyone
| equally regardless of how they treat me. From doing this
| for 5+ years I've learned that people act way differently
| initially when unexpected things happen but more often
| than not they calm down and apologize afterwards.
| dubcanada wrote:
| Why? Presumably your product works, so at best you'd only
| have like 1% (20) customers with issues on any given day.
| 1 customer service agent should be able to attend to 20
| issues in a 7-8 hour shift.
| ghshephard wrote:
| Of course, when that customer service agent has to deal
| with 1% of 20_000 - 200 issues/day/agent - things start
| to add up.
| [deleted]
| ghshephard wrote:
| Particularly as it's actually 1 employee per 20_000
| customers.
| kube-system wrote:
| Having a lot of employees does not necessarily make
| customer service good. Telecoms and large retail banks top
| the list for the largest number of customer service
| employees, but often are notorious for bad service.
| jquery wrote:
| Prediction: Coinbase will do a reverse Robinhood and start
| offering traditional brokerage products as crypto is further
| exposed as a scam.
| [deleted]
| namanaggarwal wrote:
| Genuine question: At what point do we actually declare that we
| are in recession. Do we wait for GDP figures out these signs are
| enough to assume we are in bear markets now.
| davesque wrote:
| It's a legitimate question, although I wouldn't use stories
| about Coinbase as any indication about the answer.
| wollsmoth wrote:
| I think the actual rule is 2 quarters of GDP decline in a row.
| We had one, seems like we'll have another.
| Geee wrote:
| This is pretty good:
| https://trends.google.com/trends/explore?date=all&q=recessio...
| antoniuschan99 wrote:
| Politically it could be after midterms was an idea floating
| around
| fortuna86 wrote:
| Crypto was always a plaything for people that had extra money
| and no idea what to do with it. That extra money dries up,
| guess what happens to crypto.
| jeffbee wrote:
| Real GDP has to shrink for it to be a recession. GDP in the
| United States is currently growing strongly. The Conference
| Board is not predicting a recession in the U.S. in 2022, and
| they just updated their forecasts a few days ago.
| mehrdada wrote:
| > GDP in the United States is currently growing strongly
|
| Last quarter was -1.4% growth, so probably not growing
| strongly (but who knows, maybe just a blip...)
|
| https://www.wsj.com/articles/us-economy-gdp-
| growth-q1-116511...
| jeffbee wrote:
| And Q2 is anticipated to be +2.1%, based on late-Q2
| analyses. One quarter of stochastic sign change does not
| get you a recession.
|
| A more pessimistic view gives +1% for Q2: https://www.atlan
| tafed.org/-/media/documents/cqer/researchcq...
| justinzollars wrote:
| Atlanta FED GDPNow recently downgraded expectations:
| https://www.atlantafed.org/cqer/research/gdpnow
|
| This is typically an accurate measure.
| jeffbee wrote:
| Sure. And if GDP goes negative, and if employment falls
| etc etc then people will start saying recession. I was
| just trying to answer the GPs question, not predict
| whether or not this is a recession!
|
| By the way the official declaration by the U.S.
| bureaucracies of the onset of a recession typically lags
| the actual onset by a year or so.
| MisterBastahrd wrote:
| When growth actually slows. The stock market has little to do
| with whether we are in a recession. If it fell by 10K points
| tomorrow, most stocks would still be wildly overvalued.
| bad_alloc wrote:
| Some crypto collapsing does not mean it is a recession. The
| exploding prices for real goods and less and less people being
| able to afford basic things are the indicator for that.
| Johnny555 wrote:
| Recession is a loosely defined economic term where the exact
| definition depends on who's reporting it, traditionally, it's
| meant 2 quarters of decline in GDP growth. But now:
|
| _The NBER defines a recession as a significant decline in
| economic activity spread across the economy, lasting more than
| a few months, normally visible in real GDP, real income,
| employment, industrial production, and wholesale-retail sales_
|
| https://www.investopedia.com/terms/r/recession.asp
|
| But recession is a macroeconomic term that may not reflect the
| actual impact on consumers -- conusumers could be suffering
| through an economic downturn that's not technically a
| "recession".
| tootie wrote:
| Yeah, recession start and ends can only really be determined
| accurately in retrospect. And like you said it's marked by
| the decline meaning it starts when growth hits its high point
| and ends when it hits a low point. In terms "feeling" like a
| recession, it'll be more like midway through the descent
| until midway into a recovery. A stock market crash is
| frequently a leading indicator of a GDP recession though not
| always. We could be seeing the early signs of recession for
| the past six months, but we won't really know for a while.
| ErikAugust wrote:
| However, I did notice their prominent advertising at the NBA
| Finals...
| celestialcheese wrote:
| Probably already committed money. Still a terrible look.
| gnicholas wrote:
| It must have been hard for them to come up with an ad over
| the last couple months that they knew would be
| relevant/accurate no matter what happened in the markets. I
| wonder if they had a different ad prepped and then subbed
| this one in because of what happened. It was a visually
| simple ad and presumably could have been created at the last
| minute.
| willturman wrote:
| Crypto is dead.
| m00x wrote:
| Bold claims like this is what make people look like idiots
| when things turn around.
|
| With experience though, you can tell that people who make
| bold claims like this were always idiots gambling away their
| credibility, hoping the 50/50 lands in their favour.
| unicornmama wrote:
| ssharp wrote:
| I'm struggling to find a good analogy to these crypto
| boom/bust cycles, where the market continues to
| survive/thrive after the busts. The closest I can come up
| with is real estate, but there is a core underlying value
| in real estate in that people need space to
| live/work/shop/whatever -- so when speculative bubbles
| burst, there is pretty significant underlying demand. I
| have a hard time drawing that parallel the crypto.
| Certainly there are valuable use-cases but the main use-
| case still seems to be as a speculative investment.
| shrimpx wrote:
| It's like betting and gambling. The losers keep coming
| back thinking they can time it correctly this time
| around. The game is basically putting money in to get it
| higher, and timing the top. Crypto being largely
| meaningless in terms of value is a perfect medium for the
| game.
| mjr00 wrote:
| Not an asset class, but I'd draw parallels to Texas Hold
| 'Em. In 2003, Chris Moneymaker wins $2.5 million at the
| WSOP as an amateur who qualified through the internet;
| within a year, everyone is talking about hold 'em, their
| bankroll strategy, having poker nights with their
| buddies, how they're playing 12 tables at once online,
| etc. Culminates in massive mainstream acceptance, ads for
| Pokerstars running on major networks, and a major plot
| arc in a James Bond movie. But it turns out that nearly
| everyone is a loser in online poker; after all, at a 6
| person table, only 1 person wins (well, 2nd place usually
| gets their entry fee back, but still). Very few people
| become Chris Moneymakers; most just lose a bit of cash,
| some their life savings.
|
| Look at where hold 'em is now. It still exists, of
| course, but you don't see poker tournaments broadcast
| live on ESPN anymore. It's not even a very popular
| livestreaming category. It definitely went through a
| boom, then huge bust, and then a slide into... not really
| _irrelevancy_ , just kind of a continued existence.
|
| IMO, crypto is headed for the same fate. It will still be
| fun for a subset of people to gamble on altcoins, to pump
| and dump and run schemes of dubious legality. And just
| like I wouldn't count out a poker resurgence sometime in
| the next decade, I wouldn't count out another crypto
| spike in the future. People never stop loving easy money.
| wly_cdgr wrote:
| The flaw with your analogy is that poker continues to be
| hugely popular worldwide. Check WSOP.com any time this
| month
| isoprophlex wrote:
| Lets just hope the next craze doesn't use a bazillion
| kWh's of electricity
| djbusby wrote:
| A fool is born every minute. there is an endless supply
| of those who need to learn the hard way. Keeps the
| Boom/Bust cycle going.
| JumpCrisscross wrote:
| > _struggling to find a good analogy to these crypto boom
| /bust cycles_
|
| Casinos. Seriously [1].
|
| [1]
| https://pubs.aeaweb.org/doi/pdfplus/10.1257/jep.13.3.173
| aquadoggy wrote:
| In case you didn't get the reference, the Coinbase
| commercial entirely consists of comments saying "Crypto is
| dead" with various timestamps going back ten years, and
| then ... "Long live crypto".
|
| https://www.youtube.com/watch?v=fCEvIiY0mR4
| pphysch wrote:
| Still hodling beanie babies?
| wonnage wrote:
| There's no turnaround coming
| TameAntelope wrote:
| An equally as irrational position as, "Crypto is the best
| thing ever!"
| dkural wrote:
| Was there an Enron turn-around? Crypto does some mildly
| useful things, which could justify perhaps 1% of the
| resources going into it.
| thebean11 wrote:
| That's about as useful as pointing to some equally
| unrelated thing that did turn around. The truth is nobody
| here knows either way, and if you did you'd be in the
| process of becoming very wealthy on that knowledge. Let
| me make a wild guess that you will not actually be
| putting your money where your mouth is on this?
| TameAntelope wrote:
| Since we're just randomly linking unrelated things, FedEx
| turned their business around after their CEO saved it
| from bankruptcy at the blackjack table[0].
|
| [0] https://www.businessinsider.com/fedex-saved-from-
| bankruptcy-...
| spookthesunset wrote:
| I mean the end state of crypto isn't a very positive one.
| Either it will crash catastrophically or it will slowly
| fizzle out until the majority of people just forget about
| it. Either way, at some point virtually nobody will be
| using it.
| danuker wrote:
| As long as fiat currency keeps getting pumped out, people
| will want something else, more scarce, to hold their
| wealth in.
|
| That could be bonds, gold, stocks, real estate, or why
| not crypto? Crypto is easy to transfer.
| thinkharderdev wrote:
| Because it doesn't seem like Crypto is a good inflation
| hedge. If you're worried about inflation from unwise
| increases in the fiat money supply, then it seems like
| you want something with intrinsic value (real estate,
| other tangible assets, inflation protected bonds, etc),
| but crypto is the opposite of that. It's too volatile to
| be an actual currency so what is it exactly other than a
| purely speculative asset?
| fullshark wrote:
| The end state of crypto is the currency of illegal
| transactions, which are never going away.
| uncomputation wrote:
| Speculative assets rarely crash, despite people wanting
| the drama of it all. If ETH went to $100, enough people
| would buy it in the hopes it would skyrocket again and
| make them fabulously wealthy, pushing the price up, but
| lower than last time, until it cycled back and so on
| until it fizzles out.
| mushbino wrote:
| ...long live crypto.
| hintymad wrote:
| Why they need these many people for an exchange is puzzling. I'm
| sure there are many things to do, but shouldn't they grow their
| headcount organically and slowly?
| greggsy wrote:
| They have a few different service offerings, ranging from
| compliance to web3 infrastructure:
| https://www.coinbase.com/cloud/blockchain-infrastructure
|
| They also presumably have hefty cyber, legal and financial
| audit teams to protect their assets, and position themselves in
| preparation for any changes in the landscape (which has been
| pretty rocky to say the least).
| hintymad wrote:
| Still, why thousands of engineers?
| greggsy wrote:
| Didn't see any mention of engineers, or any specific part
| of their workforce. Could have been regional regulatory
| experts, marketing, admin, gardeners...
| bsuvc wrote:
| > shouldn't they grow their headcount organically and slowly?
|
| You would think so, but a lot of companies who are/were venture
| backed don't think this way.
|
| There is a tremendous pressure to use funding to accelerate
| growth, which can work fine in a good economy, but can be a
| disaster in a recession when no amount of capital can speed up
| growth.
| mrzimmerman wrote:
| Blitz-scaling is still the primary mindset at a lot of
| startups (at least where I've worked or the companies I've
| come into contact with). They may use some other term but the
| "grab market share as fast as possible and worry about
| profitability later" is the general strategy.
|
| I think this leads to a lot of companies making bad calls
| like over hiring or building awkward products. I'm not saying
| blitz-scaling can't be a strategy, I just think it's treated
| as the only strategy that matters and people end up in
| hammer/nail situations.
| julianlam wrote:
| When you have obscene amounts of money, your perception of what
| is normal goes out the window.
| jstummbillig wrote:
| Do tell.
|
| On a more serious note and the likely answer to the question:
| customer support for 100000000 customers (as has been pointed
| out elsewhere in this thread)
| hintymad wrote:
| I thought people would have learned from Uber's gross failure
| of overhiring by now and taken a few pages from Netflix's
| playbook
| azemetre wrote:
| What is Netflix doing differently? I know they had some
| internal struggles between different media faces (prestige
| content versus chasing the masses), are you referring to
| them paying high salaries but having a smaller workforce?
| hintymad wrote:
| They used to have small teams to build great systems,
| like 4 people taking care of a very sophisticated
| monitoring infra[1]
|
| [1] https://www.quora.com/Are-Netflix-employees-really-
| that-good...
| hardtke wrote:
| Is it an exchange or more like a lead gen company? I thought
| coinbase's business model was to advertise heavily to get
| newbie crypto investors on their platform and then to charge
| wildly inflated commissions compared to other exchanges. Kind
| of like a Rocket mortgage for crypto. Unfortunately in that
| business model gross revenue directly tracks the price of
| bitcoin.
| joering2 wrote:
| In my opinion this is what greed does to people. Doesn't matter
| your background. Armstrong was here on HN pointing out his vision
| of free exchange of currency at close to zero rates. He wanted to
| fight "the big guys", including credit cards mafia and PayPal
| mafia. What A WONDERFUL goal.
|
| What he ended up with, is obnoxious exchange rates @ Coinbase
| (triple what credit cards charge), hundreds of thousands of
| ruined lives, lots of suicides, and $100 million dollar mansion.
|
| What A RECORD.
|
| Don't get me wrong - I would love to live Armstrong's life
| (although I wouldn't be this shrewd), but as someone who believes
| in heaven and hell, I definitely would not want to die as
| Armstrong.
| djbusby wrote:
| "lots of suicides" - that's bold claim. In searches I've only
| found one related to CB. One is not "lots"
| joering2 wrote:
| you don't know cryptocurrency took a lot of lives??
|
| https://twitter.com/JohnBrownlow/status/1524375188426702849
| sytelus wrote:
| You can't attribute suicides of people investing in crypto
| to Armstrong. I think Armstrong had a great vision and ok
| execution (I would give grade D but not F). Overhiring was
| irresponsible. Out of control costs were unneccessory. But
| you have to understand that founders in this space have
| enormous pressure to grow, try new ideas and new products
| as they are constantly at risk by other players (Cashapp,
| Paypal etc).
|
| Before Coinbase, investing in crypto was super murkey even
| without all the volatility. They were able to make crypto
| accessible and provide marketplace that is not full of
| scams (so far). For people who controlled their risk by not
| exceeding crypto investment beyod 1% of their networth, it
| was great way to get in the market. If Ukrain war + COVID
| didn't exist, they had a decent chance realizing vision. If
| they can survive the storm, I think they would still be the
| most trusted crypto marketplace.
| catsarebetter wrote:
| Though my perspective is that you're taking some of this stuff
| really extreme, you are a talented visual writer and I enjoyed
| reading this comment a lot lol
| 99_00 wrote:
| They are doing layoffs because crypto is a speculative bubble
| fueled by liquidity. And now that liquidity is disappearing
| crypto is rapidly losing value.
|
| It's not because a person is greedy.
| a4isms wrote:
| Would this be the Coinbase whose CEO just spent $133 million on a
| home?
|
| https://www.ibtimes.com/inside-coinbase-ceo-brian-armstrongs...
|
| Capitalism is a harsh mistress.
| ForHackernews wrote:
| > Capitalism is a harsh mistress.
|
| Not for CEOs, it's not. He already got rich off the IPO.
| daenz wrote:
| There's nothing wrong with people collectively giving someone
| money.
| unethical_ban wrote:
| With the context of what wealth inequality is doing to
| society and what political power raw money brings to people,
| I posit there is a line where it is wrong.
| daenz wrote:
| If 1 million people want to give 1 person 10 dollars, and
| your response is "we should control how those 1 million
| spend their 10 dollars", and not "we should prevent
| politicians from selling their influence", then you're
| hurting the people you want to help.
| missedthecue wrote:
| Bezos is probably the most unpopular person in Washington.
| We don't have a president Bloomberg. I submit to you that
| you are vastly overestimating the amount of political power
| having money automatically brings someone.
| ihumanable wrote:
| Power and office are two different things. Someone can
| exercise a great deal of power in advancing or killing
| legislation while never holding office and allowing all
| the office holders to call them names on TV.
|
| What matters is what policies are enacted. Here's a nice
| video on the topic that summarizes a Princeton study
| https://www.youtube.com/watch?v=5tu32CCA_Ig
| [deleted]
| uncomputation wrote:
| If Armstrong was the sole CTO, COO, CPO, CLO, designer,
| marketer, advertiser, programmer, and researcher, then yes,
| all money should go to him. But Coinbase was made what it is
| by many people, the majority of which have nothing close to
| wealth Armstrong enjoys. Why shouldn't those people be given
| money?
|
| I agree there should be some incentive for entrepreneurs and
| the people who make "the business side" work, but doesn't the
| degree of difference between Armstrong and his average
| employee strike you as unfair?
| daenz wrote:
| >Why shouldn't those people be given money?
|
| They were given money: their compensation that they agreed
| and accepted as being fair payment for their labor.
| uncomputation wrote:
| Let's be conservative and say Armstrong has just a net
| worth of the house he bought: 150,000,000. If the average
| employee's salary is 150,000, Armstrong makes 1,000 times
| more than them. Does this seem fair? Does he deserve
| higher compensation for his entrepreneurial skills?
| Absolutely. But 1,000? It's hard for us to imagine the
| scale of 1,000 times greater than something but it seems
| excessive (and remember, this is being extremely
| conservative). Does he really work 1,000 times harder
| than the average employee?
|
| These aren't rhetorical questions by the way. I genuinely
| want to know, what do you think?
| Dma54rhs wrote:
| Programmers wages in America are for the vast majority of
| the world obscene as well. It depends where do you draw
| the line, American programmer is most likely the 1% for
| the world.
| uncomputation wrote:
| Don't really see the relevance here? America is also more
| expensive than the majority of the world. I'm not
| comparing the wealth of impoverished people to the
| average American programmer. I am comparing the wealth of
| Coinbase employees to the wealth of the Coinbase CEO,
| whose company is successful only because of those
| employees. If the American programmer is global 1%, then
| Armstrong would be global 0.001% so the inequality isn't
| changed.
| daenz wrote:
| You ignored my response to your post completely and re-
| iterated the exact same point, so I don't think you are
| listening or actually care to hear what I think, because
| if you did, you would know that I already answered you.
| roflulz wrote:
| as someone who has actually tried to start a company - he
| deserves it and more
| sytelus wrote:
| This is the most fundamental tenant of capitalism. The
| output is _perpetually_ distributed according to initial
| risk taken, not according to amount of day-to-day work
| performed. The property of capital is that it keeps growing
| (more or less) effortlessly. So you just need to capture
| initial capital and pay employees only _returns from
| capital_ , not the capital itself. Fun fact: Bill Gates has
| made vastly more money just sitting around in his
| "retirement" than working his ass off for 30 years in
| Microsoft every day.
| oh_sigh wrote:
| You'll be happy to learn that no one is confiscating the
| private assets of those who have been laid off.
|
| Also, its $133M, but let's be honest it's really like $110M for
| the land and then a $20M mansion on it.
| cyode wrote:
| Since this is Coinbase we're talking about, I assume the last
| $3M went to fees.
| greggsy wrote:
| It's entirely possible that he has used his unique position to
| make further gains on the crypto market. He may have also
| secured a loan on the basis of a future sale.
| jmyeet wrote:
| I honestly thought the pandemic would be the trigger for a
| recession. Clearly that wasn't the case (or at least it was a
| delayed effect). This doesn't seem to be a case where a single
| event triggered a recession (eg subprime in 2008). It seems to be
| a combination of events.
|
| Inflation is a big one. This one is interesting because the two
| biggest factors (housing and gas) are completely artificial price
| hikes. Housing is a double whammy because we had artificially
| cheaper housing in the last 2 years because of the pandemic. That
| makes price hikes seem worse than they are (note: there still are
| significant price hieks in rents). There's pent up demand from
| the pandemic. There's some institutional buying of homes (which
| honestly should be outlawed). But really it's just price hikes
| "because we can".
|
| Gas was triggered by Ukraine but that's just another "because we
| can" situation. The Biden administration could ban exports of
| refined petroleum products if they really wanted to apply
| downward pressure to gas prices. It's not that Biden has a bad
| energy policy. He seems to have no energy policy.
|
| And then there's crypto. What a lot of people are learning is
| that the only thing holding up the crypto bubble was the
| collective belief in continued speculative gains. That's
| literally it, even for the (supposed) stablecoins.
|
| I personally see crypto as a massive waste of energy (eg Bitcoin
| energy usage is about the same as Sweden's) for very little
| utility so I personally hoped the bubble would burst because
| crypto is such a massive example of a solution desperately
| searching for a problem. I can't say this was or is inevitable.
| Collective delusion can last a really long time. But I hope the
| bubble does burst.
|
| Obviously this sucks if you work (or, rather, _worked_ ) for
| Coinbase. At least they're getting some severance. It may be a
| rough time for finding a new job, even for software engineers,
| for a couple of years, something that hasn't really been true for
| >12 years.
| tootie wrote:
| > I honestly thought the pandemic would be the trigger for a
| recession
|
| Um, did you miss the 2020 recession? It was the sharpest
| decline in GDP and employment in national history. It was also
| met with an historic government response to stave off poverty.
| And you can absolutely still point to the current inflation as
| unwinding from pandemic.
| whimsicalism wrote:
| > But really it's just price hikes "because we can".
|
| This is just an absolutely wrong-headed understanding of what
| is causing inflation that is premised on some corporate
| benevolence that existed prior to 2020 that no longer exists.
| [0] The question to ask is "why are prices able to be raised
| now"? The answer is contracting supply and surging demand.
|
| [0]: https://twitter.com/Noahpinion/status/1525171240796712960
| idealmedtech wrote:
| Previous discussion (694pts, 550 comments)
|
| https://news.ycombinator.com/item?id=31738029
___________________________________________________________________
(page generated 2022-06-14 23:00 UTC)