Market politics

[wdolson]

A government is there to provide certain important things that everybody in the country needs. A legal system, a police force, etc. And it needs money to provide these things, which is what taxes are for.

So the government needs to take some money out of the system, and the only question is where to take it from. The most important things like drinking water, basic food, essential medicines, etc. should not be taxed. Ideally everybody has abundant access to these things, so taxing them and making them harder to obtain goes against that.

On the other end of the spectrum there are things such as owning a collection of expensive cars, $1k bottles of champagne, 3 vacation homes, etc. It's not that it wouldn't be cool if everybody could have these, but the economic resources spent on creating things like that are for now probably better spent on things like improving health care, improving education, or making sure everybody has at least 1 roof over their head. So in my opinion it makes sense to first and foremost tax this kind of consumption.

The result is similar to taxing high net worth and high income, in that people who can't afford to consume much will be better off by taking from well-off people, but it no longer incorrectly taxes every rich person as much, even if their wealth is actually mostly spent on philanthropy. Taxing high income and high net worth people who would've given most of their money to charity, is the same as taxing charity.

Regarding taxing the iPhone more heavily, the fact that an iPhone is relatively cheap doesn't matter. A hundred dollars isn't that much, but if it's spent on a freaking golden milkshake, I'd tax the hell out of that. Nobody needs a $100 golden milkshake, and the economic resources spent on that $100 golden milkshake would've been better spent on creating twenty $5 nutritious meals. An iPhone is a less extreme example, and maybe better compared to something like a $30 burger. Nothing wrong with people having $30 burgers, but it makes sense to tax the consumption of a $30 burger, which is not something anybody really needs, more heavily than the consumption of a $5 burger, which fits more in the category of essential food.

The cheapest new iPhone in the US is $229. Adding $100 to the price is pretty steep.

I'm not arguing against the government collecting taxes. Nor am I arguing against taxing the rich. Taxing luxuries sounds like a way to extract money out of rich people, but the richest people are not buying all that many luxuries. When there was a luxury tax the wealthiest people figured out how to get around it as much as possible and it became more a tax on the posers than the rich. (Not that taking posers down a peg isn't a good idea too, but that's a different argument.)

The wealth taxes proposed by Bernie Sanders and Elizabeth Warren are aimed to actually extract money from the super wealthy, but it has been tried in other countries and completely failed and it would require changing not just US law, but changing the constitution, which is essentially impossible in the current political climate.

Wealth that is sitting in one place and not moving in any way (tied up in some sort of investment or multiple investments) is pretty much impossible for governments to tax without a wealth tax. Governments can tax income and in the US the top federal income tax bracket was over 90% for a while after WW II. Reagan got elected with an outcry against the remains of those taxes in the late 70s. We have long since gone too far the other way.

My proposal is to get the wealthy to move their money around changing their investments. The wealthy that Sanders and Warren really want to punish are the sleaze bags who compiled a mountain of wealth playing financial games rather than creating anything. Changing how capital gains (money made from investments) are taxed could incentivize some types of investments and make some very expensive to invest in. That will incentivize these money people to chase the lower tax options and end up pumping money into investments that end up benefiting everyone, even if some of the sleaze bags also make a mint in the end. Most will lose money, which goes towards the goal of impoverishing them.

 

[feigen66]

The cheapest new iPhone in the US is $229. Adding $100 to the price is pretty steep.

I'm not arguing against the government collecting taxes. Nor am I arguing against taxing the rich. Taxing luxuries sounds like a way to extract money out of rich people, but the richest people are not buying all that many luxuries. When there was a luxury tax the wealthiest people figured out how to get around it as much as possible and it became more a tax on the posers than the rich. (Not that taking posers down a peg isn't a good idea too, but that's a different argument.)

The wealth taxes proposed by Bernie Sanders and Elizabeth Warren are aimed to actually extract money from the super wealthy, but it has been tried in other countries and completely failed and it would require changing not just US law, but changing the constitution, which is essentially impossible in the current political climate.

Wealth that is sitting in one place and not moving in any way (tied up in some sort of investment or multiple investments) is pretty much impossible for governments to tax without a wealth tax. Governments can tax income and in the US the top federal income tax bracket was over 90% for a while after WW II. Reagan got elected with an outcry against the remains of those taxes in the late 70s. We have long since gone too far the other way.

My proposal is to get the wealthy to move their money around changing their investments. The wealthy that Sanders and Warren really want to punish are the sleaze bags who compiled a mountain of wealth playing financial games rather than creating anything. Changing how capital gains (money made from investments) are taxed could incentivize some types of investments and make some very expensive to invest in. That will incentivize these money people to chase the lower tax options and end up pumping money into investments that end up benefiting everyone, even if some of the sleaze bags also make a mint in the end. Most will lose money, which goes towards the goal of impoverishing them.

Great analysis. Money is the database of allocation of resource. We should treat them as such. Instead of seeing them as division of wealth and poor, we should make sure money flow to the right place.

 

[JRP3]

I think part of the problem is value created in proportion to effort. Elon being something of an exception, few wealthy people have created anything of real value in proportion to their compensation. Specific example, Zuckerberg and Facebook. What if any is the benefit to the world of Facebook? Personally I never signed up, I hate the interface, and only go there rarely if someone posts a link to something that I can't easily find elsewhere. If it disappeared tomorrow I wouldn't notice. Other than a platform to collect advertising dollars and data what has he created of value?

Another example is Bezos and Amazon. I do use Amazon and like the convenience, but is his compensation proportional to the product value? And compared to the compensation of his workers?

Also sports figures, team owners, entertainers, producers, etc., their compensation is out of proportion to the "product" they deliver, which is basically just temporary distraction from reality.

I think there probably needs to be better regulation limiting executive compensation while increasing employee compensation. Also capital gains need to be taxed higher. I pay no taxes on long term gains up to $40k a year but someone actually working has to pay taxes on the $40k they earn. Our system is completely messed up.

 

[feigen66]

I think part of the problem is value created in proportion to effort. Elon being something of an exception, few wealthy people have created anything of real value in proportion to their compensation. Specific example, Zuckerberg and Facebook. What if any is the benefit to the world of Facebook? Personally I never signed up, I hate the interface, and only go there rarely if someone posts a link to something that I can't easily find elsewhere. If it disappeared tomorrow I wouldn't notice. Other than a platform to collect advertising dollars and data what has he created of value?

Another example is Bezos and Amazon. I do use Amazon and like the convenience, but is his compensation proportional to the product value? And compared to the compensation of his workers?

Also sports figures, team owners, entertainers, producers, etc., their compensation is out of proportion to the "product" they deliver, which is basically just temporary distraction from reality.

I think there probably needs to be better regulation limiting executive compensation while increasing employee compensation. Also capital gains need to be taxed higher. I pay no taxes on long term gains up to $40k a year but someone actually working has to pay taxes on the $40k they earn. Our system is completely messed up.

The problem is Elon got singled out. There are other 500+ wealthy CEOs doing much worse jobs. I don't understand their logic.

 

[JRP3]

Elon got singled out because he was the only one to respond directly to Bernie.

 

[wdolson]

Great analysis. Money is the database of allocation of resource. We should treat them as such. Instead of seeing them as division of wealth and poor, we should make sure money flow to the right place.

I haven't thought of it that way, but an interesting perspective.

I think part of the problem is value created in proportion to effort. Elon being something of an exception, few wealthy people have created anything of real value in proportion to their compensation. Specific example, Zuckerberg and Facebook. What if any is the benefit to the world of Facebook? Personally I never signed up, I hate the interface, and only go there rarely if someone posts a link to something that I can't easily find elsewhere. If it disappeared tomorrow I wouldn't notice. Other than a platform to collect advertising dollars and data what has he created of value?

Another example is Bezos and Amazon. I do use Amazon and like the convenience, but is his compensation proportional to the product value? And compared to the compensation of his workers?

Also sports figures, team owners, entertainers, producers, etc., their compensation is out of proportion to the "product" they deliver, which is basically just temporary distraction from reality.

I think there probably needs to be better regulation limiting executive compensation while increasing employee compensation. Also capital gains need to be taxed higher. I pay no taxes on long term gains up to $40k a year but someone actually working has to pay taxes on the $40k they earn. Our system is completely messed up.

We have screwy ways in which we reward certain types of work. I agree with you that top tier entertainers (including athletes) are overpaid for what they contribute. In those same professions you don't have to go down the tiers very far to a point where you're finding people who aren't able to make a living wage doing the same thing.

In the category of entrepreneurs, most are wealthy with lots of stock in the company they built, but their actual cash on hand is small. Many take only a small salary or essentially none at all. Some got rich bringing us entertainments like social media, others basically got rich figuring out a new way to do something old and being aggressive marketers like Amazon, and then there are those who actually contributed something to the world on their way to getting rich.

Elon is probably the most noble of the contributing entrepreneurs, but there are many others. Most tech entrepreneurs who got rich doing it contributed something along the way: Bill Hewlett, David Packard, Craig McCaw (developed a lot of the infrastructure in the cell phone industry), even Bill Gates, Steve Jobs, Sergey Brin and Larry Page. In some cases their companies have been guilty of some poor behavior but what they brought to the world has helped people in many ways and they did something new that had not been done before or not done right.

Most of an entrepreneur's wealth is tied up in their creation. They can cash out, but they have to do so slowly or they will crash the stock price. Bill Gates is cashing out his stake in Microsoft to do charitable work in the world. Warren Buffet has joined him. Putting a tax on entrepreneurs' wealth would hand the American company they built over to foreign interests and likely mean the company leaves the US. If the entrepreneur doesn't move the company's operations to avoid the taxes.

Most people who got rich as tech entrepreneurs are fairly modest about it. One of my SO's college classmates was one of the first employees at Microsoft. I met him once and he said, "let's face it, I won the lottery".

Another story I heard on NPR many years ago was an interview with one of the early employees at Intuit. She was just a data entry person, but the company reached a point where it was paying employees in stock. She was making one share an hour. Her husband was making enough she could afford to do that. Years later they calculated that it was the equivalent of $150/hr or something like that. She knew she was very lucky.

In the category of people who figured out how to legally steal their wealthy are the Wall Street tycoons, but also people who figured out how to get paid significantly more than they are worth. In some cases this includes getting paid in stock options, or some other way to avoid paying taxes, but they are still making a lot of money for doing something that is of little benefit to the world at large. If the CEO of GM makes $500K a year or $100 million a year it probably makes no difference to the person buying a new Bolt. They will get the same product and same service either way. They might even get a better customer experience if a competent CEO making $500K made changes that improved things for the customer.

A CEO who takes over a failing, established company and turns it around deserves some good compensation for that. Paul O'Neil did that with Alcoa. But there are quite a few CEOs who take over struggling companies and make big bucks running the company into the ground. That's a form of legal stealing.

Another way people legally steal is in the private equity business. The executives make big money "bailing out" companies by loading them with huge debt and gutting them and then the companies end up failing because of the huge debt. The US is feeling that pain this year because for years one of the favorite targets of these guys were small, often rural hospitals. Over the last decade a lot of these hospitals failed due to their debt burdens leaving rural communities with no health care. Doing this is how Mitt Romney made his money.

A lot of the established company CEOs in the US today got there by playing political games, not by being competent at anything. When Paul O'Neil was Treasury Secretary under GW Bush he hosted a round table of CEOs and his conclusion was he would never have hired any of them to manage a branch sales office in the middle of nowhere. In his opinion they were all incompetent. Their only skill is lining their own pockets.

As far as entrepreneurs whose companies are causing harm, taxing the entrepreneur isn't going to change anything. That's a job for regulators to step in and curb the toxic behavior. If the regulation hasn't been invented yet, Congress and state legislatures need to do something.

 

[eevee-fan]

"Over the last decade a lot of these hospitals failed due to their debt burdens leaving rural communities with no health care. Doing this is how Mitt Romney made his money."

Not knowing all the details, at first glance, I wold not put all this on the private equity folks... no one is forcing the hospital to borrow... perhaps the hospital should have looked at saving money instead of borrowing in order to spend more.

 

[alloverx]

Maybe the $30 burger is healthier than the $5 burger, so society is better off in the long run with it. Perhaps its at a place that pays the workers a higher salary. i.e. it all depends on the details.

 

[JRP3]

I met him once and he said, "let's face it, I won the lottery".

Exactly. Simply by being at the right place at the right time can make all the difference in the world. We like to think that wealthy people "worked harder", "earned it", or had something "special" but in reality much of it is chance.

Maybe the $30 burger is healthier than the $5 burger, so society is better off in the long run with it.

It's certainly not 6 times healthier and in fact may be less healthy if higher in fat.

 

[bkp_duke]

Anyone else hear about this? Is this propaganda, or did this level of mistake actually occur?

Half a million incorrect absentee ballot applications sent across Virginia, including to dead people

 

[JRP3]

Appears to be real. Nonprofit mails 587,638 erroneous absentee ballot applications to Virginia voters

"A misunderstanding of Virginia’s independent cities and counties apparently led a nonprofit voter registration group to mail 587,638 absentee ballot applications to Virginia voters that asked them to send the ballot back to the wrong election office."

 

[bkp_duke]

Yikes.

 

[bkp_duke]

As a follow up to the "freedom of speech" and "riots/protests" discussion.

Even in a the very liberal city of Chicago, the mayor has now taken a definitive stand against violent riots and looting.

I applaud her.

Chicago looting triggers over 100 arrests, 13 officers hurt as mayor warns criminals: 'We are coming for you'

“We are waking up in shock this morning,” Lightfoot said. “These individuals engaged in what can only be described as brazen and extensive criminal looting and destruction. And to be clear, this had nothing to do with legitimate, protected First Amendment expression.”


EDIT - apparently a Tesla store was among one of the shops broken into.

 

[bkp_duke]

This was not written by me, but was posted in response to the looting in Chicago.

Whether you agree with it or not, you need to recognize that it is how a large portion of this country feels, and exemplifies the large divide between groups:

What is privilege?....
Privilege is wearing $200 sneakers when you’ve never had a job.
Privilege is wearing $300 Beats headphones while living on public assistance.
Privilege is having a Smartphone with a Data plan which you receive no bill for.
Privilege is living in public subsidized housing where you don’t have a utility bill and where rising property taxes and rents and energy costs have absolutely no effect on the amount of food you can put on your table.
Privilege is having free health insurance for you and your family that's paid for by working people who can't afford health insurance for their families.
Privilege is having multiple national organizations promoting and protecting your race that's subsidized by federal tax dollars.
Privilege is having access to a national college fund that supports only your race.
Privilege is having a television network that supports only your race.
Privilege is the ability to go march against, and protest against anything that triggers you, without worrying about calling out off work and the consequences that accompany such.
Privilege is having as many children as you want, regardless of your employment status, and be able to send them off to daycare or school you don’t pay for.
Privilege is having most of your life paid for by the people who DO HAVE TO DEAL WITH RISING TAXES AND COSTS!...you know, us so called “PRIVILEGED” ones who pay while you TAKE TAKE TAKE


I understand the arguments of systemic race, and agree with some of them, but everyone on that side of the argument needs to understand that low to middle-income people that work daily frequently have the above viewpoint, and that also needs to be taken into consideration.

 

[Intl Professor]

A cautionary tale for those who drink heavily and/or thinking about whether you should quit. Easy for me to say because I was probably not chemically dependent since I never had trouble with quitting cold turkey, but it is a horrible way to die as my father-in-law demonstrated over the past few years. Yesterday he finally passed after his liver function shut down and his urinary system, heart, etc., age 67. It's a horrible way to die.

There was a humorous, if macabre note from the hospital when he was sent home four days ago. "If he doesn't die within 2-3 days, send him back and we will try to prolong life some more." Almost to say, we shall torture him some more until we finally kill him. One day he was making a terrible racket. A lot of saliva collected in his throat and he was breathing loud bubbles through it. It sounded like what is called a death rattle. I tried suggesting they turn him on a side to let it drain out so he didn't drown in his own saliva.

The grieving process there in rural Thailand is very helpful, almost all the village is involved. Many rituals. Very difficult for my wife who is stuck here. Covid-19 hits her hard. She can't get her passport renewed easily because the LA consulate is not open as usual, and since she is from US she would be in quarantine there and again on return.

Meanwhile, some days I can't get my "Depends" on without her help. (The sock extender might work. Technology to the rescue)

There is a character in even cowgirls get the blues by Tom Robbins, a hermit with shaman tendencies, who says something like: "Nothing is true, everything is sacred. Nothing is sacred, everything is true." A good head space for solving problems. Elon's got it.

The main character in the book is Sissy Hankshaw, a perfectly formed young woman except for her thumbs which were the size of baseball bats. She discovered their greatest utility one day while hitch-hiking when she successfully stopped a firetruck on the way to a burning house.

 

[JRP3]

Whether you agree with it or not, you need to recognize that it is how a large portion of this country feels, and exemplifies the large divide between groups:

Privilege is having multiple national organizations promoting and protecting your race that's subsidized by federal tax dollars.
Privilege is having access to a national college fund that supports only your race.
Privilege is having a television network that supports only your race.

Yes there are many racists who feel this way. I don't care if that's the way they feel, that divide will never be crossed until they change their views. Funny how the assumption in their rant is that only one race does all the things they are describing. Finally, by "large portion of this country" I think you mean a minority of the country.

 

[bkp_duke]

Yes there are many racists who feel this way. I don't care if that's the way they feel, that divide will never be crossed until they change their views. Funny how the assumption in their rant is that only one race does all the things they are describing. Finally, by "large portion of this country" I think you mean a minority of the country.

Woah woah woah. Put the BRAKES on bro.

You don't have to be racist to see that there are obvious double standards. You can have "black pride" and are labeled as "culturally sensitive" and "proud of your heritage". But if you have "white pride" you are racist. Basically, you can have pride in ANY race you are, except if you are white. My heritage is Irish, English, some Italian, and a bit of Heinz 57 for the rest. Despite no one in our family tree ever owning slaves or being a part of anything to do with slavery (and we have our tree documented back for over 400 years), if I express any kind of pride in "where my people come from" I would be labeled a racist, but that would not apply to virtually any other kind of race. Clearly a double standard.

 

[JRP3]

Of course there is a double standard, it's only recently that non-whites are "allowed" to have a voice in this country. Centuries of oppression doesn't get rectified quickly or cleanly. Right now there are sections of this country where being non-white means you are discriminated against openly on a daily basis. Frankly I have no need to express pride in my heritage. The deeds of my ancestors, good or bad, are irrelevant to my self image, but if I were a minority who's been treated as "less" because of my race and my heritage I can see a need to find positive affirmation from it.

 

[JRP3]

Voting "fraud" perspective:
https://twitter.com/dpakman/status/1292800567560019969?s=20

 

[wdolson]

Woah woah woah. Put the BRAKES on bro.

You don't have to be racist to see that there are obvious double standards. You can have "black pride" and are labeled as "culturally sensitive" and "proud of your heritage". But if you have "white pride" you are racist. Basically, you can have pride in ANY race you are, except if you are white. My heritage is Irish, English, some Italian, and a bit of Heinz 57 for the rest. Despite no one in our family tree ever owning slaves or being a part of anything to do with slavery (and we have our tree documented back for over 400 years), if I express any kind of pride in "where my people come from" I would be labeled a racist, but that would not apply to virtually any other kind of race. Clearly a double standard.

Many years ago I read a book that looked into the culture and Psychology around people's height. The author points out that different social rules apply to people based on their height. If someone is short, they can get away with being "scrappy" and confrontational, but someone who is very tall having the same behaviors is considered rude and obnoxious.

The same sort of rules apply to groups in the social pecking order. An underdog group having "pride" for their group is acceptable and is a rallying point for their cause. However for the dominant group to take on the same sort of attitudes and terms is seen as a jerk move.

In many cases the part of the dominant group that is taking on these attitudes and phrases does not see themselves as powerful, and they aren't powerful. They are an underdog too, but for reasons other than their ethnicity. The group that feels this way are largely the whites who have been hit the hardest by globalization. Some are still employed in their old jobs, but they have seen most of the people like them lose their jobs or have to give up a lot to keep their jobs over the last 40 years and they feel ignored in their suffering.

It is a fact that if you look at poverty in the United States, you get different answers depending on how you look at it. If you look at poverty per capita the worst poverty is among Native Americans and African Americans. The two ethnic groups that have been the most abused since before this country existed. Hispanics are also fairly high up in that group with whites and Asians doing better than any other group.

If however you look at raw numbers, how many people of each group are poor, whites are the largest slice of the pie. They are not as visible as poor minorities because poor whites more often live in rural areas in low density housing than in high density housing in cities. Poor whites also don't tend to get the level of police harassment poor people of color have to deal with. There are poor whites who have frequent contact with the police, but they are on the list of the "usual suspects" when anything happens.

White people also don't tend to get pulled over for driving while white. The police might pull over some white kid who looks like he's 16 driving a Bugatti, but generally they ignore white people driving cars of any type unless they are doing something wrong.

There are problems that people of color have dealing with police, which is a lot of what the term "white privilege" is about. I've had long discussions about the term with my SO because I think it's another example of terrible branding. And poor white people living in a trailer in the middle of nowhere hear that term and ask "what privilege?" And economically they are right. Probably educationally too. Poor white people often have poor access to quality education just like poor minorities often have.

There is also bias in hiring practices that play against people of color even today. Studies done where white and non-white people with equal qualifications interviewed for jobs, the white people got many more offers than the non-whites.

I see a situation where both sides are at least partially right. Non-white minorities do get discriminated against because they are non-white, but we have been ignoring the largest single ethnic group of poor in this country who also have problems and should be getting some attention too. They are very angry because the system has ignored them for 40 years. And I have heard people who are otherwise very liberal essentially blow them off as unimportant.

Even if people who want to see change for minorities don't really care about the whites who are marginalized, they should fake it for political reasons if nothing else. If there are reforms that address poverty that help all people in poverty regardless of their ethnicity, that's going to go a lot further politically than programs that focus on only a few ethnic groups.

There are also white people who are involved on the side of the disadvantaged whites who are doing OK. In some cases they came out of poverty and feel for their friends and family still stuck in the cycle. In other cases they are just jerks who joined the cause as a front for their own anti-social behavior. Still others see an unaddressed injustice and are trying to advocate for it.

Personally I believe that the situation with non-whites is more critical. Poverty and poor education are problems with both the under class of whites and non-whites, but the non-white group also has to deal with police abuse as well as soft racism due to their skin color like bias in job hiring. There are a few areas where job hiring has done reverse discrimination and hired non-whites over whites, but more often people are still getting overlooked for jobs they qualify for because of their skin color.

But the first step in healing this rift is to acknowledge that some white people have some of the same problems non-white people are complaining about too.