
A Message from the Billionaire’s Club: Tax Us - gilad
https://www.nytimes.com/2019/06/24/business/economy/wealth-tax-letter.html
======
SolaceQuantum
I'm somewhat baffled by this simultaneous behavior- if the rich want to be
taxed, they have all the wealth to make it happen. Hire lobbyists to close tax
loopholes. Hire lawyers to go after the rich who tax-evade or the accountants
that support them. Donate heavily to politicians who support taxing the rich.
Invest in muckraking journalism. Donate money to economics academia with
strings attached that force academia to teach taxing-the-rich doctrine.

What I see here is a small minority of wealthy people who are already invested
in the social politics of being a wealthy progressive but are not putting the
money where the mouth is. Are there wealthy progressives putting a Koch
brothers strategy on their political goals? Why or why not?

~~~
hitpointdrew
>I'm somewhat baffled by this simultaneous behavior- if the rich want to be
taxed, they have all the wealth to make it happen. Hire lobbyists to close tax
loopholes. Hire lawyers to go after the rich who tax-evade or the accountants
that support them.

Not only this but the IRS allows you to over pay if you want to. If you really
WANT to pay more in taxes you can! Just cut them a check, why would you rather
have someone point a gun to your head before you give them a check?

~~~
Angostura
> Not only this but the IRS allows you to over pay if you want to. If you
> really WANT to pay more in taxes you can! Just cut them a check, why would
> you rather have someone point a gun to your head before you give them a
> check?

I hear this mantra time often - sometimes in relation to charity, sometimes in
the context of climate change action ('if it bothers you, why not just cycle
to work?'. )

There is a big difference between an individual saying "here have some of my
cash" and an individual saying "I think people like me should pay more tax".

First, there's there question of effectiveness: A donation by one individual
isn't going to solve society's ills, much better to have a plurality of people
making smaller contributions.

Then there's the human feeling as to what is 'fair'. Is it really fair that I
solely tackle the burden of solving an ill while others in a similar position
to me leach off my good will?'.

For this reasons and others people are more likely to say 'we should all pay
more' rather than just saying 'take a pile of my cash''.

~~~
hitpointdrew
>There is a big difference between an individual saying "here have some of my
cash" and an individual saying "I think people like me should pay more tax".

Yeah, one relies upon the threat of violence, the other one doesn't. I prefer
minimizing the violent threats.

>First, there's there question of effectiveness: A donation by one individual
isn't going to solve society's ills, much better to have a plurality of people
making smaller contributions.

What specific "ill" are you trying to solve? Eliminate the national debt? Free
college for all? Because taxing the wealthiest 1% at 100% isn't going to be
enough. And if you can't specifically identify "society's ills" and an dollar
amount needed to correct said "ills", then why should anyone be willing to
contribute a dime? How about drone strikes in Yemen? Is that "solving
society's ills"? I don't get to specify what programs my tax dollars fund, and
I find it naive to think that taxes "help people", they certainly aren't
helping the people in Yemen.

>Then there's the human feeling as to what is 'fair'. Is it really fair that I
solely tackle the burden of solving an ill while others in a similar position
to me leach off my good will?'.

Is it really good will at all if someone puts a gun to your head? If you
really care and want help someone do you really give a rat's ass what other
people are doing? Do you donate blood and then think "Why didn't that asshole
over there donate their blood? Why is it on ME to donate blood! That's it!!
I've had it, if they aren't going to donate then neither will I!".

>For this reasons and others people are more likely to say 'we should all pay
more' rather than just saying 'take a pile of my cash''.

Maybe others will follow suit if they lead by example. Maybe the billionaire's
who want to pay more taxes should just cut a check to the IRS and persuade
their billionaire friends to do the same, rather than threatening them with
violence.

~~~
Angostura
> Yeah, one relies upon the threat of violence,

I'm similarly sick of this tedious "threat of violence" trope. _Any_ action
decided collectively by the community and enforced is a threat of violence,
yes?

Regulations to stop you torturing puppies? "That's bad - it's a threat of
violence"

Regulations to stop you littering in national parks? "Threat of violence"

Speed limits, requirements that car manufactures meet minimum safety
regulations, laws that stop chemical companies dumping in aquifers? - "threats
of violence".

It's a cheap rhetorical trick and it doesn't make a case sound compelling.

~~~
hitpointdrew
What happens if you don't pay your taxes?

People whit guns come and throw you in jail.

It isn't a "cheap rhetorical trick" it is the fucking truth.

>Regulations to stop you torturing puppies? "That's bad - it's a threat of
violence"

I am not saying "never use a threat of violence". I am simply saying that if
it isn't appropriate for an individual to use the threat of violence, then it
isn't appropriate for the government to do so. Would I personally use violence
to stop a robbery, sure, would I personally use violence to fund the arts, no.

~~~
Angostura
> I am simply saying that if it isn't appropriate for an individual to use the
> threat of violence, then it isn't appropriate for the government to do so.

So. Was it, for example, reasonable for governments to regulate production of
CFCs to attempt to stop the growth of the ozone holes at the poles? I presume
you wouldn't go out and smash the face of a person for selling a fridge. I
presume therefore you would be against any kind of environmental regulation.

Are you really going to argue that you beating a fisherman for hauling in too
much cod is _exactly comparable_ to the government setting fishing quotas to
avoid a species pretty much extinct?

------
bedhead
There's an easy and obvious solution: have extremely high estate tax rates for
estates valued above some threshold like (just picking a random high number)
$100 million. I have no problem with Bezos being worth over $100 billion - he
earned every penny. What I despise is the idea of his great-great grandkids
being multi-billionaires. So have an estate tax of 90% above $100 million,
think of what this accomplishes:

* Bezos enjoys the money he rightfully earned.

* His heirs are still rich - just not mega billionaires.

* The US gets an effective wealth tax.

* Bezos is incentivized to spend the money, much of it I'm sure charitably.

It seems like the fairest way to do things. Yes, there are tradeoffs like
everything else. It would force private family-owned companies to sell. But I
hate this idea of massive capital accumulation that just sits there. It's
reminiscent of land ownership in medieval times. While we're at it we should
change the laws about charitable foundations that force them to spend more
rapidly and not create these semi-permanent structures that basically exist as
Sphinxes for rich people. I'll add in one more: we should have a windfall
wealth tax for all these tech billionaires.

~~~
Bakary
The idea of a mogul having earned every penny seems absurd to me. They take
advantage of publicly funded research and infrastructure, a stable society,
and all sorts of positive externalities. There's a reason why you rarely see
tech startups emerge out of Sierra Leone.

That's not to say that they didn't get the ball rolling, or that the company
would exist without them, just that the Ayn Rand moral calculus doesn't hold
up to scrutiny.

~~~
1PlayerOne
Unfortunately, this simple argument is taken as if you are advocating
socialism. When this simple argument can not reach traction with the majority
of the citizenry, it feels hopeless.

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bretpiatt
Super difficult situation with many second and third order effects to sort
out, one particularly relevant to HN ..

Vested equity that isn't liquid. It is technically an asset with a clear value
(based off of a 409a, last round valuation, or from limited trading on private
secondary markets). So founders must sell 2% each year to cover their tax
bill, except that sale triggers other taxes so likely more in the 4-6% per
year...

Does a VC fund have to send a statement through to LPs each year so they pay a
tax bill on indirect holdings?

I could go on and on...

~~~
btown
For founders, an 83(b) like election should cover that case, if your funds
have never been liquid. But yea, this is tough. If you close all loopholes, it
almost starts to look like a VAT on private investments per vehicle, which
would disincentivize growth in so many ways.

~~~
bretpiatt
Being able to use 83(b) valuation would imply tax on book value which is not
really an accurate measure of the value and would favor a whole set of
structures and increase the amortization / accelerated depreciation / write-
down of assets.

Our current tax code, similar to a representative democracy , isn't good, it
just may be the least bad of all the options out there.

------
dexterdog
I never understood the logistics of a wealth tax. Wouldn't that require every
single person to document all of their wealth to prove that they are not in
the top bracket and this don't owe anything? If it doesn't what is to stop
somebody who is near the borderline from just refusing to document? Won't
there also be tons of loopholes to diversify your holdings to keep yourself
just below the cutoff?

~~~
lifeisstillgood
This is true of _any_ tax however - which is why the penalties for tax evasion
are astoundingly draconian - a simple scorched earth policy

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cpursley
What's stopping Billionaires from donating to the US government right now at
whichever rate they think is fair? There's an extra field for this on the tax
return document. Lead by example, etc.

If you're going to downvote me, please explain why. I'm honestly perplexed.

~~~
lvh
Nothing: but that doesn’t tax all billionaires equally. The point is that you
want George Soros _and_ Grover Norquist to pay.

~~~
Macross8299
Ah, so billionaires want to pay, but only if their ego isn't sufficiently
damaged by voluntarily reducing their stack.

Because let's be honest, it's not like their living standards would be
significantly damaged by paying a few more millions to the treasury.

~~~
lvh
The treasury is not out “a few million”.

------
nerdponx
Are these the same billionaires squirreling money away overseas to _avoid_
paying tax on it?

~~~
RandomBacon
It would be financially-irresponsible not to.

Wanting to be taxed higher and avoiding being taxed are not mutually-
exclusive.

Like wearing a helmet: I want laws to be passed to make illegal to not wear
it, but since it's not illegal, I sometimes won't wear it.

I want everyone to be taxed fairly and equally, but since it's not like that,
I'm going to keep as much money as I can.

~~~
1PlayerOne
Regardless of ulterior motives, objectively when even the billionaires are
saying the level of inequality is getting out of hand, something wrong is
happening...

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fyoving
Eliminating tax deductions and the perverse incentives they entail would be a
bigger boon than further taxing the successful and fortunate.

The problem isn't a lack in revenue the problem is that we are spending it on
the wrong stuff.

------
sascha_sl
2% on everything over 50M and 3% on everything over 1B is laughably little.
Preemptive low-end offer really. They make 3-4x that amount back just from
passive income over that year. What we really need is a much heavier curve
that essentially cuts off at least half after a certain point.

Hoarding wealth should be illegal.

------
lwhalen
Any individual or corporation is free to donate directly to the US General
Fund, which is where the vast majority of tax revenue goes:
[https://www.treasurydirect.gov/govt/resources/faq/faq_public...](https://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtFinance)

In the meantime, I need as much of the money that _I earned_ as the gov't will
deign to let me keep. Why? None of your damn business, that's why. I earned
it, let me save or spend it as I please, without even more of gov't sticky-
fingers rooting around in my damn pie.

------
rayiner
Taxing billionaires, or even millionaires, is a red herring. In 2014 (the most
recent date for which the IRS has collected this data), the top 400 taxpayers
earned $127 billion: [https://www.irs.gov/pub/irs-
soi/14intop400.pdf](https://www.irs.gov/pub/irs-soi/14intop400.pdf). There are
about 500 billionaires in the US, so this is a good proxy.

Even if you taxed these people at 100% it’s a drop in the bucket. US federal,
state, and local governments spent $7 trillion last year. (About $4 trillion
federal, $3 trillion state and local.) Even a 10% annual wealth tax wouldn’t
raise much—total wealth of the Forbes 400 is $2.7 trillion, so you’re looking
under $300 billion per year. That’s a 5-6% increase in total taxes.

There is a proven model for taxation. Just do what Europe does! Sweden’s
mythical 70% tax rate doesn’t kick in at $10,000,000 a year, or apply only to
corporations. It kicks in at 1.5 times the average income, what would be under
$60,000 in the US: [https://taxfoundation.org/how-scandinavian-countries-pay-
the...](https://taxfoundation.org/how-scandinavian-countries-pay-their-
government-spending). (It’s actually 56%, not 70%, but still.) All the
Scandinavian countries and most of Europe adopts the same approach. In
Germany, the second highest tax rates (just 3% lower than the highest) kicks
in under $70,000.

Europeans combine those income taxes with sales taxes (VAT), which average 20%
in the OECD, and heavy payroll taxes. Indeed, if the US went to Spain’s tax
system, tax revenue would go up $2 trillion, but income taxes would go down by
a trillion.

------
roenxi
The issue with wealth is that the amount of real resource that a person can
consume caps out somewhere in the low-medium millions.

For example, a billionaire can pay $60 million for a penthouse in Manhatten.
However, most of that is getting ahead of the queue of people who want to live
in Manhatten - if you liberated all the real resources (building labor hours,
materials) that went into that penthouse, there is no way it would be
sufficient to produce $60 million worth of warm meals. The best you can get is
to swap a billionaire and someone else - which doesn't mean a net improvement.

The effects of a wealth tax are not going to be obvious; it is likely to cause
really strange things to happen. It is not at all obvious that a wealth tax
will liberate real resources for the use of ordinary people.

I'll admit to arguing against any tax, but I think the vocal activists are way
overestimating how much good the money billionaires tie up in businesses does.
We need real resources to be directed to creating new wealth for future
consumption.

Whatever the problem is, it still isn't inequality. The only way to have an
equal society is for everyone to be dirt poor.

~~~
Bakary
I would say the biggest problem is that the most capable humans are for the
most part incentivized to work on shifting money around or producing goods and
services of dubious real value and/or with plenty of negative externalities.

------
nwp
I’ve never understood this kind of thinking. If you want to give your money
away you are absolutely free to do so. The Gates Foundation does wonderful
things. If you want to fund government, pretty much every public school system
of any real size has a foundation. If you legitimately want to pay more in
taxes just ensure you have a taxable event every year. Hold no investment for
a year and pay short term capital gains. Take zero deductions, etc, etc, etc.

------
citilife
One thing that I find strange, is why we always discuss _increasing_ taxes.
Why not _decreasing_ spending on ineffective things and try to improve the
government.

The U.S. government has more than enough money to keep the peace, provide
essential services and support people incapable of helping themselves. Cut
some costs and improve efficiencies.

------
jamisteven
Whats so damn funny about this argument is how people so foolishly think that
higher taxation of the top 1% equals them getting more money, it does not.
Those excess taxes go to big government, the money does not trickle down to
you, it goes to them.

------
INTPenis
Gee golly, thanks Mr. for letting us tax you like we do everyone else. Now
let's earmark those funds for anything BUT the military and we're on our way.

This type of bizarre story can only be about the United States.

------
tsss
Maybe they should start by paying the taxes they already owe.

------
wybiral
Well tell them to back Elizabeth Warren already.

------
natrik
_Enthusiasm for a wealth tax on the country’s thin sliver of multimillionaires
and billionaires may be unsurprising — after all, most Americans wouldn’t have
to pay it. But now the idea is attracting support from a handful of those who
would._

 _A letter being published online on Monday calls for “a moderate wealth tax
on the fortunes of the richest one-tenth of the richest 1 percent of Americans
— on us.”_

 _The “us” includes self-made billionaires like the financier George Soros and
Chris Hughes, a Facebook co-founder, as well as heirs to dynastic riches like
the filmmaker Abigail Disney and Liesel Pritzker Simmons and Ian Simmons, co-
founders of the Blue Haven Initiative, an impact investment organization._

 _“We thought it would be a good idea,” Mr. Simmons explained by phone as he
waited out a traffic jam in the Boston area. “Liesel and I decided to reach
out to some other folks to see if they thought it was a good idea, too.”_

 _The letter came together in the last two weeks. Eighteen individuals, spread
among 11 families, added their names. All are active in progressive research
and political organizations, some of which are pointedly focused on the
swelling gap between the richest Americans and everyone else._

 _A recent analysis of a Federal Reserve report found that over the last three
decades, the wealthiest 1 percent of Americans saw their net worth grow by $21
trillion, while the wealth of the bottom 50 percent fell by $900 billion._

 _The letter is addressed to all presidential contenders, and refers
specifically to a plan offered by Senator Elizabeth Warren of Massachusetts.
Her proposal would create a wealth tax for households with $50 million or more
in assets — including stocks, bonds, yachts, cars and art. She estimates such
a tax would affect 75,000 families, and raise $2.75 trillion over 10 years._

 _A desire to curb the rising concentration of wealth has long been part of
the Democrats’ core message, but a Republican tax bill in 2017 that delivered
the biggest benefits to Americans with the highest incomes reinvigorated the
debate._

 _In recent months, Democrats including Representative Alexandria Ocasio-
Cortez of New York and Senator Bernie Sanders of Vermont have offered up
ambitious tax proposals targeted at wealthy taxpayers. At the same time, they
have questioned whether vast family fortunes conferring outsize economic and
political power are inimical to democratic values._

 _Surveys undertaken in the wake of those proposals showed that roughly seven
out of 10 Americans supported higher taxes on the wealthiest Americans._

 _The swirl of attention provided an opportunity to advance the conversation
around inequality, social responsibility and taxes, Mr. Hughes said._

 _“One thing that we collectively want to see is further research and more
activism on policy design,” he added. His husband, Sean Eldridge, a founder of
the progressive advocacy group Stand Up America and a former congressional
candidate, also signed the letter._

 _The letter unequivocally declares that a wealth tax “strengthens American
freedom and democracy” and “is patriotic.”_

 _And it points out that economic researchers estimate that the richest 0.1
percent of Americans will pay 3.2 percent of their wealth in taxes this year
compared with 7.2 percent paid by the bottom 99 percent. “The next dollar of
new tax revenue should come from the most financially fortunate, not from
middle-income and lower-income Americans,” the letter declares._

 _Ms. Simmons said a wealth tax could help deal with problems like the “lack
of child care, educational debt, the opioid crisis and the climate crisis.”_

 _She is part of the Pritzker family, the founders of one of the country’s
largest private companies, which included the Hyatt hotel chain. Another
family member, Regan Pritzker, president of the San Francisco-based Libra
Foundation, also signed._

 _Members of the billionaire club have previously argued that they should be
taxed more. In 2011, Warren E. Buffett, the founder of Berkshire Hathaway,
published an essay noting that his effective tax rate was “actually a lower
percentage than was paid by any of the other 20 people in our office.” His
comments prompted President Barack Obama and others to push for a “Buffett
rule” mandating that millionaires pay at least 30 percent of their income in
taxes._

 _In 2014, Nick Hanauer, a Seattle-based entrepreneur, published a memo to “My
Fellow Zillionaires” noting that “people like you and me are thriving beyond
the dreams of any plutocrats in history, the rest of the country — the 99.99
percent — is lagging far behind.”_

 _He added: “If we don’t do something to fix the glaring inequities in this
economy, the pitchforks are going to come for us.”_

 _Mr. Hanauer signed the letter published on Monday, as did Molly Munger, a
lawyer whose father is Charlie Munger, vice chairman of Berkshire Hathaway.
She and her husband, Stephen English, were co-founders of the Advancement
Project, a civil rights organization. He also signed the letter._

 _Other names on the letter were Stephen M. Silberstein, co-founder of the
software company Innovative Interfaces; the philanthropist and arts patron
Agnes Gund and her daughter Catherine Gund, the founder and director of Aubin
Pictures; Arnold S. Hiatt, chairman of the Stride Rite Charitable Foundation;
Justin Rosenstein, a co-founder of Asana, which provides work-management
tools; Robert S. Bowditch Jr., the founder of MB Associates, a real estate
development firm, and his wife, Louise; and Mr. Soros’s son Alexander, deputy
chair of the Open Society Foundations._

 _The final signatory was “Anonymous.”_

------
choonway
missing the " if you can. haha" from the headline.

~~~
1PlayerOne
That is the punch line.

By all accounts, there are many times more people who are not billionaires
than billionaires. And in a functioning democratic republic, you would think
that the billionaires would be taxed a lot more. But by now, even Joe the
Plumber is thinking he will need those low low tax rates himself one day.

~~~
Macross8299
Because the "eat the rich"-style taxes DO eventually effect Joe the Plumber if
he owns a plumbing business.

Look at the people in this very comment section advocating for 70% marginal
rates for income above 1.5x the average income.

~~~
1PlayerOne
Can you give evidence of what you say? Do you own a small business by any
chance?

------
thespace123
Maybe they should pay for the NYTs paywalls first.

~~~
Bakary
You can disable Javascript on the site with ublock origin. Solves the issue.

------
dotdi
IMHO this is a PR move through and through. The TL;DR for me is "tax us; LOL
JK my money is on the Caymans".

------
snissn
Just send the irs a check

~~~
cpursley
I'm not sure why you're getting downvoted. There's an extra field on the US
tax return for this very purpose.

~~~
rtkwe
It's because it's saying the solution is the ephemeral voluntary charity of
some billionaires to the problem of wealth concentration. It's idiotic
because: a) they're never going to give away so much money as to make
themselves anywhere near not the among the wealthiest humans that have ever
lived. b) only the civically minding among them will do it meaning the more
amoral you are about wealth the better you do under the 'charity taxes' model.
Finally c) that charity is inherently unpredictable and is likely to dry up
when it's needed in national coffers the most so it's nothing to build a
budget on.

------
jumbopapa
Can't help but to feel like this is virtue signaling.

------
theseadroid
More tax or not, I'm not sure the US government is capable of using the tax
money effectively.

~~~
qntty
If distributing the wealth is the goal, the government is likely to do it much
more efficiently than the free market, since the free market will never do it.

~~~
theseadroid
I'm sure of that. I'm just comparing it with a few other governments, e.g.
Denmark/the Netherlands.

~~~
qntty
I certainly won't disagree with you there.

------
DamnYuppie
This is nothing more than grandstanding. There is nothing keeping them from
writing a check to the IRS at any time for any amount of money they want!

~~~
bulletsvshumans
Proposing coordinated action is different from taking individual action. For
instance, if the intent is to pay more taxes without reducing your wealth
relative to your peers, this strategy works, but writing a check to the IRS
does not.

~~~
commandlinefan
Well, they were coordinated enough to write a letter together - why not write
a check together instead?

------
nickik
If you want to spend money, just do it yourself. People directly trying to
help with education or whatever they believe the government spends on could so
more effectivly then threw the government.

Not to mention that all the companies these guys own lobby against more taxes.

This is PR.

~~~
Shivetya
welcome to the 2020 US Presidential election season, where the the NYT and
others float every trial balloon at the behest of their favorite candidates.

------
cyborgx7
Of course that is what they will say to your face. What are they going to do?
Say "haha, screw all of you!"? Doesn't change the fact that what they are
lobbying for is an entirely different thing.

Edit: Does HN deny that people lie for their own benefit? Or do you merely
disagree with my tone?

------
noonespecial
Step 1: Fire the army of accountants they no doubt have to find every little
tax trick and loophole to reduce the taxes they pay now.

Step 2: Send in extra. Whatever they believe the rate should be. The IRS won't
complain.

~~~
Upvoter33
This doesn't solve the problem generally. The goal is to get ALL such folks to
pay up, not just the volunteers.

~~~
brobdingnagians
So they aren't volunteering, they want to force other people to pay.

And perhaps give themselves a moat by making it harder for the competition or
newcomers.

Great. So much for their altruism.

~~~
zapita
I’m curious what you mean by “making it harder for the competition or
newcomers”. How exactly would they achieve that by lobbying for more effective
taxation of the super-rich?

~~~
Loughla
This is an argument against taxing the super rich that I just have never
understood. Don't tax the mega-rich, because I will be that one day, and it is
a disincentive for me to work hard if I can only be a billionaire instead of a
multi-billionaire.

I just don't get it.

~~~
brobdingnagians
Nah, that's not my argument. My argument is that a tax against billionaires
tends to increase the culture around "taxing more" and leaks out to taxing
their corporations or subtly changing the structure of the market so that the
incumbent corporation can handle it just fine, but newer ones have a difficult
time getting to the point where they can compete. I'm never going to be in the
mega-rich basket, and frankly, I don't want to be. But a lot of them are very
good at subtle PR and lobbying to change things that benefit themselves even
while making it look like they are doing something opposite. I don't trust
them, especially when they are doing something that looks "against their
interests" when they've never seemed to do that before in either their public
or personal lives.

Here's a simple example of what I mean. The billionaires pushing this tend to
have certain political ideas and tend to be active in politics. If they give
just their money, then they have limited political effect. But if they can get
_all_ billionaire's taxed and then lobby to use _that_ money to further their
political ends (including for things those other billionaires don't agree
with), they can amplify the power they have to make their pet social policies.
I'm not interested in helping them do that.

