Oh right, because everyone predicting this would happen in 2020 and 2021 was hastily banned from social media and given the greenlight by legacy media to be ostracized and marginalized by the body politic using the most utterly vacuous rhetoric imaginable.
All the tobacco executives now working in the pharma industry must feel accomplished.
Wait, I thought that it was socialism or something to complain about income multiples at public corporations? Did they suddenly get ostracized and marginalized from the body politic, after years of being a core part of the US political system? Jeessh, you blink and you miss it.
It was a lot better than that. The last time we had high marginal rates, they were 91% above $400k in 1963 dollars, which is ~$4 million 2023 dollars. Before Reagan we still had 70% marginal rate above what in 2023 dollars was about $725k.
How much revenue do you expect from such a tax bracket? You should do some napkin math to see if it’ll actually make a difference.
I suspect very few people report income in excess of $100M and an 80% bracket would do very little for society other than a vindictive gesture to placate the masses.
Not saying we should or shouldn’t…but it’s not gonna fix all our problems like people think.
> You should do some napkin math to see if it’ll actually make a difference.
The napkin math says: 3900 employees. 400M is 2435x median income in the company, so that's $164k. So if we gave the CEO the same income as the median, and split the 400M across everybody else, they'd all have received a $102k bonus, a 62%-of-median-income bonus.
You tell me if a 62% bonus for the year would make any difference in your life or not.
Very convenient of you to entirely sidestep discussion of the original point: “80% income tax bracket at >$100M”
It’s ridiculous that so many users of this startup accelerator forum want to ban private ownership. I guess I’ll bite…
Why would anyone start/own a company if the government is just gonna liquidate your legal ownership? It would be more lucrative to find the easiest job and do the bare minimum than be CEO under your half baked authoritarian system.
But why is this even a response in the first place to OP? Stick to the topic or else you come off like a religious zealot.
> Very convenient of you to entirely sidestep discussion of the original point
I didn't sidestep it at all.
If the top marginal rate is 80%, a company might think differently about how to distribute its revenue, and one option would be a more egalitarian distribution.
But even if the company doesn't, the tax rate itself creates redistribution options to the entire public. So the same sort of scenario applies, except that the beneficiaries might just be 2000 people in some sort of particularly acute situation, unrelated to moderna. You tell me if you think that would make a difference.
Also, tone policing is generally discouraged on HN.
> Why would anyone start/own a company if the government is just gonna liquidate your legal ownership?
I don't know. Ask the people who started companies when the top marginal rate was approx 90%. Seemed to work out ok for them.
I have not proposed banning private ownership. The issue is how much of the revenue from a corporation can end up as private income. You may see those as connected, or even the same issue. This is a problem, in and of itself.
Stock compensation is compensation. It can be distributed the same way as any other compensation: either handed out differently to other employees or taxed. At 90%.
> And your suggestion that anything remotely similar happened to the Reagan era corporations is plainly false.
This is getting tiresome. Highest marginal tax rate in the pre-reagan era was around 90%. People started companies. People got rich. Not Elon rich, or Bezos rich, but rich. The 90% tax rate didn't prevent them from being rich, it limited how rich they became relative to their income/compensation.
He already paid taxes on the compensation! He sold stock that had previously vested and taxes are calculated at the time of vestment.
What's so special about the Moderna employees? They already make much more than the median American income. You're redistributing wealth from the ultra rich to the rich. Even if the USGOV took 100% of that $400M, that'd be a whopping dollar per American.
History is littered with failed "utopian" communist/socialist states. The ultra rich will always be able to avoid taxes legally or illegally. They're not gonna report income that gets taxed at 90%. The math doesn't work out. If we magically take 400M additional taxes from 1000 individuals annually that wouldn't even cover our federal debt obligations.
EDIT:
It's telling that you need to resort to quips about goal posts. I suggest you take a moment to read about history and macroeconomics...your brain must be tired from all these mental gymnastics.
Ignoring all of your other garbage… starting a company is not an inherent good, and filtering out sociopathic career climbers would absolutely be an improvement.
Starting a company is not inherent good, but rather a prerequisite for a prosperous economy.
Who do you think maintains supply chains? Who is gonna sell food, energy, and build infrastructure? Entrepreneurship and capitalism for all its ugly tendencies has lifted more people out of poverty than any other system.
Where does this ideology come from that says people will produce goods/services for free? Nobody is going to build homes or drill for oil without a financial inventive.
How many buildings has Brendan Bechtel built? How many apples has Doug McMillon sold, let alone harvested? How many packages has Bezos delivered? How many rockets or cars has Elon built?
Selling shares for money to donate to charity is actually a tax mistake. I've done it and regret it. Just donate the shares to the charity and let them cash it out.
Surely the CEO has a tax advisor to advise... so this leads me to believe that very little of it will "go to the charities"
Pre-planned sales for execs are often buybacks or are sold to selected investors/shareholders.
Companies often impose limits on how many shares execs and employees in general can hold at any give. time, and most regulatory/legal frameworks put caps too.
In the UK for example when employees own more than 5% share in a company they are no longer treated as regular employees.
In general, I wouldn't have a problem with this. It was a preplanned stock sale, and the value of Moderna skyrocketed, predictably.
But, this...
"In a congressional hearing in March, Sanders highlighted that Moderna created its vaccine in partnership with the National Institutes of Health and received $1.7 billion in federal grant money for clinical development."
I'm not worried about it, this is probably some of the best 1.7 billion dollars the federal government has ever spent.
If the money came with strings, maybe the US government would have a little more money and Moderna stock holders a little less, or maybe we wouldn't have a Moderna. And the upside of the former is so smaller compared to the downside of the latter I think in this case we made the right choice.
Perhaps we should do a sovereign wealth fund kind of thing where that type of funding grants the US taxpayer some common shares with no voting preference -- but if you think pure ROI -- $1.7B in investment to save millions and millions of lives worldwide isn't actually that problematic.
It is not straight forward that in the counterfactual where we limited CEO pay with government grants in 2010 we would 100% still have a Moderna. I imagine CEOs would be a more hesitant to take government grants if we did. And if they didn't take the 1.7b maybe everything would be the same, or maybe the company would have died/rolled out the vaccine 2 years later.
How profitable do we want to make pandemic preparedness? I think we should make it wildly profitable.
Wouldn't that distort the competitive landscape for the other participants, though?
If I were running a business where one of the main customers was the government, shouldn't I be lobbying for the government to take a stake in me, and me only?
This is already the case, with the elites living in six different mansions "from the fruits of their labor", which was conveniently funded by tax dollars, tax dollars that large companies largely don't contribute to because of extremely favorable tax treatment for the capital class, while tens of thousands live and die on the street.
If the money came from stock sales, it didn't come out of the company's funding. It isn't that money that's funding this income. This income came from people who want to own a piece of the company's future success.
Now, I guess those people are anticipating maybe future profits to be made from NIH funds... but that's sort of the point of government grants to private enterprise. In return for putting their capital up to fund labs and equipment and research, investors expect to be compensated... and some of that compensation comes in the form of government contracts to produce lifesaving vaccines.
I’m curious to hear why it matters how much anyone makes. If the concern is that they’ll buy too much critical stuff, why not just limit that? If the concern is outsized political influence, why not stop that? Etc.
I will say it’s strange the government doesn’t have substantial stake in this company given the subsidies. Same with Tesla and many others too.
Let's say there are 1000 people in an economy with $1M floating around.
In one version of this scenario, every person ends up with $1000.
In another version, most people end up with $500, and one person ends up with $500,000.
This creates a scenario where the preferences of that one individual come to dominate the structure of the economy (because the preferences of the other 999 people will, in aggregate, be scatted and diverse).
So this sort of distribution of income system creates an outsize influence in the ongoing nature of the economy, for no reason than that one person was somehow able to end up with a revenue flow 1000x larger than anyone else.
Now, it could possibly that this person is very, very good at doing whatever they do to achieve such revenue. But is that any reason whatsoever to grant them such outsize influence over the nature of the economy?
Your analogy doesn’t make any sense. How exactly is the preference of the one individual dominant? Please do describe in detail.
People love to hate on the rich but forget that simply having money isn’t the actual problem. The problem are institutions that are easily influenced by money.
Or to put it simply, how is your wealth (and if youre on here you are wealthy by global standards) negatively affecting the global poor?
> How exactly is the preference of the one individual dominant?
The other 999 people will have a diverse set of preferences for services and goods within the economy. They will share some, and not others. But each of them has only $500 to spend on those services and goods, and so anything not widely shared among them doesn't offer much of an incentive in terms of potential income to anyone who might offer goods and services. If something doesn't appeal to a sizable majority of the 999, there's likely to be too little chance at sufficient revenue to pursue it.
By contrast, the high value individual has $500,000 available to spend on their own singular preferences for goods and services, providing a strong incentive for providers of those things to cater to this individual. The changes of being to have a reliable, significant revenue flow from doing what they want are quite good.
Consequently, the economy ends up being structured (to some degree) around the preferences of the wealthy individual, rather than the broader public.
Of course, this is not a "hard divide" ... obviously there will be some things that all 999 others (and even the 1 rich individual) want, and some part of the economy will respond to that. However, even for such basic things as, say, bread, preferences can be wildly divergent, meaning that a single provider is not likely to tap into the entire potential market for that generic. And obviously there are also risks in this thought experiment scenario, because there is only a single high wealth individual - fail to accurately target their preferences, and you're potentially worse off than catering to everyone else.
Obviously, a more realistic example would (e.g.) involve 1% (say, 3M) individuals of high net worth/income, amidst 330M+ individuals of varying levels of net worth/income. In this scenario, there is more scope for providers of goods and services to cater to relatively unpopular things, because amidst the 330M lower-income folk, there will likely be enough to make it potentially worthwhile.
But this is true only to a point. If enough of the lower income folk don't really have much disposable income at all, their preferences for non-essential items will not translate into actual purchases of goods and services that they may otherwise be desirous of.
And of course, with 1M high income people, their preferences will be more diverse than in the thought experiment. However, the deck is still stacked in favor of businesses that seek to cater to those with more money, because of the unbalanced distribution of wealth & income.
In this more realistic example (i.e. the contemporary USA), a sizable chunk of the economy remains focused on the preferences/needs of the majority. But a much bigger slice of GDP flows around the preferences and needs of the very wealthy than would be the case with a more balanced distribution of income/wealth, and I maintain that this constitutes a harm to the economy and the entire population.
This analysis is focused on economic power, not political power.
If it was about political power, it would still have to be noted that despite some effort, the fact that wealth doesn't literally buy you extra votes doesn't eliminate wealth giving you more influence over political priorities and decisions.
If I have $2B, but no interest in politics. I can get things made, I can buy out or price out competitors, I can buy property to obstruct/divert things that I do or don't want, I can launch companies doing things I think ought to be done ...
None of these require political power in the sense of actually voting nor in the sense of lobbying/bribing/donating to politicians.
Moreover, the people who will feel the effect of my spending/investment may be disjoint from the people who would feel the effect of me exerting political power via money.
I don’t think profits being made in part due to tax payers is an issue. It is an issue though that the taxpayers, through the government, do not have equity in the profit making machine, yes.
> Moderna created its vaccine in partnership with the National Institutes of Health and received $1.7 billion in federal grant money for clinical development.
Is the vaccine subject to any patents or other restrictions that would prevent a generic version? If so, why is this allowed when its development was largely paid for by the public?
"Clinical development" != "development". Given their existing platform, developing the vaccine itself took weeks and a fraction of that cost. Clinical development means solving manufacturing and distribution issues, running trials, ... once you have a promising candidate vaccine in hand.
It was extremely fortunate, as it turns out, that somebody had previously invested the megadollars to build that platform in hopes that it would turn out to be useful. It was a modestly risky bet, lots of biotech VC cash ends up being set on fire.
Nobody will invest in the next Moderna if they believe the Feds will effectively nationalize their investment if it turns out to be valuable/"essential" enough.
"My husband and I are both managers in tech and each make $600k a year"
First, good for them, I guess, but also people constantly conflate stock-based compensation (which is compensation but very, very rarely a fixed rate of income) or windfall years or capital gains and hand wave them all together as "salary."
In the scenario I encountered, the couple lucked out in they both work at the same place and the company stock has appreciated significantly, but what wasn't said is that they cannot sustain that income beyond one year.
It's quite possible to make over $1M in a year, at least on paper -- I've done it a few times in my career. Making that much year over year without any windfalls is certainly more challenging. I'd never state "yeah I make over $1M/year" in a windfall year.
That comparison to employee median salary, and not including in the headline the fact that this is from stock sales scheduled in advance, is a blatant attempt to sow outrage (clickbait) rather than honestly inform.
Just imagine if all $14000000000 of that went to the CEO & boards pockets and not just 29% of it. I'd expect less of these "well they saved lives" compliments for grift
Remember, it took a year for the vaccines to be available. In the meantime everyone was contracting the virus and virtually everyone recovered.
So if these vaccines magically reversed heart damage caused from contracting the virus, it's news to me and you should be able to cite a peer reviewed study not funded by the manufacturers or their investors.
Moderna's only commercial product is the COVID-19 vaccine[1]. But hey, you were told to get the exact number of doses necessary to ensure the survival of humanity and no more than that!
Going from Jonas Salk giving away the polio vaccine to profiteering off the most deadly pandemic in a generation tells you a lot about about the course of the past 100 years…
It's funny how COVID and vaccines instantly turn any conversation (even here) into kind of...mindless bias flailing? Many of these comments are A.) Antivaxx propaganda, B.) Whining about cancel culture.
The “guidelines” of this site went out the window a long time ago. Moderation occasionally comes by and clears out the worst flame bait, spam, and blatant off topic nonsense, but there’s just too much of it.
He deserves it. Basically one of the people pushing mRNA since 2011, more than 10 years ago. Regardless of the politics behind it (I'm particularly anti-covid vaccine myself after the dust has settled), it's indisputable that this technology has a pathway that works and could solve many diseases in the future.
People want it both ways. They want private business to use the free market to develop more efficient and better solutions than a socialized system, but also a limit to just how much that free market should compensate them.
Either you're a capitalist or you're not. If the company in question was Disney or Apple, this wouldn't be appearing on HN in any capacity.
This is obviously a false binary. There is a complex multi-variable gradient between the two extremes. People don't want it both ways - they want it somewhere in the middle, and they reasonably disagree about where.
In a way, they have, especially Disney, through IP laws. They have been granted protections which are not really fostering innovation and have just turned into rent seeking.
Indeed. Moderna was real science, real innovation, and mostly huge globs of real private capital at risk. And though I'm skeptical on almost anything "Covid", most people think he saved the world with this vaccine technology which has big potential in future. This is capitalism 101, and the spoils need to go to the victor for it to work.
Any government funding does muddy the waters slightly, but anything they did contribute I assume was for the public good.
As described in peer comments, mRNA was a platform developed in the decade prior with over $3 billion of private risk capital. The government came in to help them get the Covid vaccine to market using that existing platform.
