
Jeff Bezos's gain during Covid is enough to give all his employees a $105k bonus - davidbarker
https://twitter.com/_cingraham/status/1304077503560994818
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ryan_h
Statements by journalists like this and actions like Bernie Sander's Make
Billionaires Pay Act shows that either 1) a number of people have no
understanding of how asset prices work or 2) they understand the underlying
economics, and would rather stir up anger to implement their agenda than be
honest.

An example I've been giving to people who are making the argument about
billionaires making money during the pandemic is: Imagine you own a modest
$300,000 house. A city inspector comes by and finds that your property is
located on an old toxic waste spill and condemns it so that it is now
worthless. A week later, the city finds that they've made an error, and there
is no toxic waste, so now your house goes back to being worth $300,000. A
month after that, you get a tax bill in your mailbox for $100,000, 30% of your
$300,000 asset gain.

~~~
consz
You're accusing others of not understanding how asset prices work, then come
up with a scenario that's inaccurate? Or do you claim to understand how asset
prices work but not capital gains?

Please help me steelman your argument, assuming you aren't being disingenuous.

~~~
ryan_h
Holding an asset does not result in a capital gain. The Tax the Billionaires
bill wants to tax holding an asset that has appreciated in value. Not only
that, but they use a handpicked time boundary that from the bottom of the
market crash to calculate a windfall tax.

Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until
today. The value of 1 BTC has fluctuated the entire time, but you've only ever
owned 1BTC.

Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 -
$12000 $8500 gain (on paper)

March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper)

To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from
the 2018 crash and recovery. If these types of windfall taxes become a common
thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So
you'd have paid $9,000 to hold your 1BTC.

If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the
entire $10,000 is a capital gain. Lets say your long term capital gains rate
is 15%, you'd owe $1,500 in taxes when you sell it.

So for investing in 1 BTC, you'd have $8500 in your bank account, and would
have paid $10,500 to hold it.

1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the
numbers in my example: Yes 3) Is wealth inequality a giant problem in the
country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the
mail: No

However, I think it does demonstrate the problem with taxing the change in
value of an asset, vs your capital gain from when you sell it.

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brodouevencode
The fact that the author could make such a simplified blanket statement shows
that the author has never run a business nor does he understand how
corporations work.

~~~
umeshunni
You should generally assume that journalists don't understand math or
economics. If they did, for one, they wouldn't be journalists.

~~~
exclusiv
Seriously. And you're lucky if you get an actual journalist too.

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zaptheimpaler
There was some dumb tweet about how he could give everyone in the US $50K
which was shown to be wrong after basic division (not to mention the inflation
it would cause).

Now we are at dumb tweet #2. This is gains from his stock holdings. Selling
all of it would mean he no longer owns any stake in Amazon. And its paper
gains on a stock - it could double again in a year at which point the same
people would whine that he sold too early so employees only got $100K instead
of $200K.

And its price would drop as he sold it, creating an opportunity to whine about
how all the regular stockholders of Amazon (who far outnumber employees)
suffered at the expense of Amazon employees. Isn't that unfair too?

Maybe then we should go even broader and give it to all of the US? At which
point you loop back to dumb tweet #1 and realize that would net to $500 or
something per person and be completely eaten by distribution costs, inflation
and landlords.

Then write an outrage piece on the landlords.

With enough envy & misunderstanding, you too can complain about how unfair
everything is!

~~~
drewrv
There's some misunderstandings in this comment. Liquidating only his gains
would not mean he no longer owns any stake in Amazon. And while you're right
that selling some of the gains might cause the share price to dip, there's no
need to sell shares. He could transfer the shares rather than cash.

But honestly the fine details of this hypothetical cash transfer don't matter.
It's a thought experiment to demonstrate the absurd situation here: a handful
of people in this country are amassing more wealth than entire nations while
millions of people are struggling to keep a roof over their head. Structuring
our society that way is a choice, and I don't understand why anyone thinks
it's a sensible choice.

~~~
credit_guy
> It's a thought experiment to demonstrate the absurd situation here: a
> handful of people in this country are amassing more wealth than entire
> nations while millions of people are struggling to keep a roof over their
> head.

The absurdity is subjective. As far as I personally am concerned, I could be
as rich as Bezos, but I didn't put in the work and I didn't make various
choices in my life, while he did. I am where I am and he is where he is, and I
don't have a problem with that. I don't know that he ever broke any laws, and
in my book that means he is entitled to enjoy the lawful fruits of his labor.
I am truly happy to live in a country where people are not subject to
confiscation of their hard earned gains because of some perceived
"unfairness".

My son enjoys a lot a silly book series called "Diary of a Wimpy Kid". This
series sold many hundreds of millions of copies, and most likely its author is
a billionaire. He made millions of kids lough and be happy for a bit. My son
can't wait for the next book, which is supposed to come out next month. If
ideas like "tax billionaires 100%" were to pass, the next book would never
exist.

~~~
salawat
>The absurdity is subjective. As far as I personally am concerned, I could be
as rich as Bezos, but I didn't put in the work and I didn't make various
choices in my life, while he did. I am where I am and he is where he is, and I
don't have a problem with that. I don't know that he ever broke any laws, and
in my book that means he is entitled to enjoy the lawful fruits of his labor.
I am truly happy to live in a country where people are not subject to
confiscation of their hard earned gains because of some perceived
"unfairness".

You seriously underestimate the role of dumb luck involved at being at the
center of just the right causal nexus. Not saying that he's not had to be
willing to work hard. However, Don't deceive yourself into thinking Besos is
somehow built of a stouter stuff than you or anyone else.

Circumstance doesplay into it A lot.

~~~
credit_guy
> role of dumb luck

Dumb luck is winning millions at the lottery. I doubt Bezos, or Zuckerberg, or
Musk, or Gates, ever did that.

What they did instead was take calculated risks. Like quitting a job at DE
Shaw to start an online bookstore, at a time when online bookstores were not a
thing. If you or I are senior executives at one of the most successful hedge
funds in history, would we quit for a pie in the sky idea?

Well, he did, and Gates and Zuckerberg quit Harvard, and Musk went all in into
rockets until he almost lost it all. The part of the iceberg that's not seen
in this picture is the hundreds or thousands of entrepreneurs who risked it
all and lost it all. We are on HN here, and from time to time we get a peek
into the struggles of founders.

Attributing the success of various founders to "dumb luck" is lazy and
disrespectful. I did not take these types of risks in my life, so I'm not
rich. But I tip my hat to those who did, and got rich in the end. I could be
very well be luck, but absent any evidence, I prefer to extend the benefit of
doubt, and to just respect these guys for what they did in life.

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umeshunni
Given that nearly all Amazon employees get stock, it's quite likely that the
average employee gained more than $100K in the last 7 months.

~~~
bradknowles
At high stock values, you don’t get many shares. It’s more like one share this
year, and one share next year.

And a single share isn’t going to gain $100k.

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GaryNumanVevo
Of course Jeff isn't in the position to sell his entire Amazon shares, so the
$150K is more symbolic than anything.

However, a 3%-6% wealth tax (or even a basic VAT) would help redistribute
wealth and fund healthcare, infrastructure upgrades, energy security. 3% is
fairly modest, but definitely do-able when you're Jeff Bezos.

~~~
valuearb
We normally try to tax income or consumption for a reason, because taxing
capital is incredibly damaging.

And we could seize all of Bezos net worth, and it would only cover a few weeks
of federal spending. Of course we could push it closer to 2 months including
Bill Gates, Elon Musk, and Warren Buffett, but what do we do when we run out
of billionaires in a couple years?

~~~
captainredbeard
It's also very difficult to cheat w.r.t. wealth taxes vs. income taxes, which
for any appreciable amount of money are trivial to trace.

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valuearb
Who would buy $90B of Amazon shares at market price? The Chinese CCP?

I’d actually like see how they would run Amazon. I’m guessing we might
complain even more about their data collection processes.

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juniper_strong
If each Amazon employee created a company worth as much as Amazon, it would be
enough to give every American a $4,250,000,000 bonus.

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maerF0x0
And if he did there'd be massive inflation in all the things his employees
tend to buy.

This is analogous to when bruce almighty grants every wins the lottery...
[https://getyarn.io/yarn-
clip/71323533-cf3e-4176-b9f1-b22cfa0...](https://getyarn.io/yarn-
clip/71323533-cf3e-4176-b9f1-b22cfa05e2e0)

~~~
aaron-santos
This is actually a really good argument for not tying wages to company
success. The baseline wage for Amazon employees should simply be the cost that
it takes to house and feed them which is entirely different from the value
they produce.

~~~
valuearb
So you are saying they are way overpaid?

~~~
aaron-santos
What incentive does Jeff have to pay Amazon employees any more than that?

