
Bill Gates Objects to Elizabeth Warren’s Wealth Tax, and She Offers to Explain - mitchbob
https://www.nytimes.com/2019/11/07/us/politics/bill-gates-elizabeth-warren-wealth-tax.html
======
RcouF1uZ4gsC
One thing that taxing billionaires will do is drive the wealth in
"Foundations" that are controlled by them.

If you have a billion dollars, all your pleasures and needs are taken care of.
The use for the excess money is ego and power.

Thus, if it is tax advantageous to put the money into a foundation, then you
will do it. Does anyone really draw a distinction between Bill Gates giving
money to a cause and the Bill and Melinda Gates Foundation giving money to a
cause? While the Gates Foundation is doing great things, it is probably very
ego gratifying to have the top scientists and philanthropists and heads of
governments coming to you asking for money. It is also a very powerful
position to be in charge of so much money.

Thus, if we have a wealth tax, we will see the money go from being the
billionaire's personal money, into being part of a foundation named after the
billionaire that they control.

~~~
pmoriarty
Let's close one loophole at at time.

Foundations can be tackled next.

~~~
manigandham
What "loophole" is being closed here? Having wealth?

~~~
notus
Having a disproportionate amount of wealth while others can't even meet basic
physical needs in the same country.

~~~
manigandham
How is that a loophole? Wealth inequality is inevitable in any society.

The problem is how govt spends money, not how much it collects.

------
jaypeg25
Bill Gates also said he'd be willing to double the amount of taxes he
currently pays, but you won't see that headline anywhere.

~~~
AlexandrB
How generous. That would bring him in line with what his secretary probably
pays[1].

[1] [https://money.cnn.com/2013/03/04/news/economy/buffett-
secret...](https://money.cnn.com/2013/03/04/news/economy/buffett-secretary-
taxes/index.html)

~~~
onlyrealcuzzo
In percentage terms? You realize Bill Gates literally has a multi-million
dollar tax bill every year, right?

Even if you cheat taxes egregiously, and even if your effective federal tax
rate is only 15% -- when you have $70Bn in wealth, your income (cheated to
extremes) is still going to be at least in the hundreds of millions. 15% of
that is still 10s of millions of dollars.

And as others pointed out, if you're going to pick fights with billionaires,
Bill Gates probably isn't the best place to start. You would be hard pressed
to convince many people here he's been a net-negative to human civilization.

~~~
zip1234
20% is long term capital gains rate if you make more than $453k

------
tim333
Wealth taxes have issues. Wikipedia:

>In 2004, a study by the Institut de l'enterprise investigated why several
European countries were eliminating wealth taxes and made the following
observations: 1. Wealth taxes contributed to capital drain, promoting the
flight of capital as well as discouraging investors from coming in. 2. Wealth
taxes had high management cost and relatively low returns. 3. Wealth taxes
distorted resource allocation, particularly involving certain exemptions and
unequal valuation of assets. In its summary, the institute found that the
"wealth taxes were not as equitable as they appeared"

------
apta
What seems to pass many (smart) people, is that fundamentally an interest-
based economy like we have today is going to lead to these large gaps in
inequality due to the predatory nature of interest. Instead of trying to patch
the situation with different taxes, people should work on moving away from an
interest-based economy into a system that is based on risk/reward sharing.

------
throwaway123x2
Why would a wealth tax be a bad thing?

~~~
JumpCrisscross
> _Why would a wealth tax be a bad thing?_

Valuing assets is complicated; for some assets, it's impossible. Furthermore,
selling assets is complicated; for some assets, it's impossible.

That is the logic behind taxing transactions. The only time we _know_ what
something is worth is at the instant it transacts. About the only time we
_know_ how liquid something is, is at the instant it transacts.

For a facile example, consider the founder of a private company. They now have
to sell 2% of their position each year, every year. That's a lot of work! And
it gets worse if one considers a bootstrapped business, where there aren't
lots of shareholders to sell to and there isn't a 409A valuation.

~~~
dubbel
I heard about an interesting way to efficiently valuate vastly diverse assets:
have the owners valuate them themselves. With the twist that the state has the
right to buy the asset at that validation. That incentives the owners to be as
precise as possible with their valuation, as they otherwise would either pay
too much tax, or run the risk to have to sell property at a loss.

~~~
JumpCrisscross
> _have the owners valuate them themselves. With the twist that the state has
> the right to buy the asset at that validation_

This was used in ancient Athens [1]: "By the procedure known as _antidosis_ a
person who was appointed to perform a liturgy could challenge another he
considered better able to afford the expense....the challenged person either
had to take over the liturgy or to accept an exchange of property with the
instigator of the procedure."

It was a private system, _i.e._ the payer and challenger were individual
Athenians. Neither party was the state. (If it's done automatically, it's
easily gamed. Own a Superfund site? Value it at $1 and put it to the state.
Have a buddy in government? Great! They just bought your WeWork shares at a
$47bn valuation.)

Given the history of civil asset forfeiture in America, we'd want to think
twice before enumerating this power to the executive branch.

[1]
[https://www.tandfonline.com/doi/pdf/10.1080/03585522.1992.10...](https://www.tandfonline.com/doi/pdf/10.1080/03585522.1992.10408249)

------
manigandham
The biggest problem with these tax plans is that they're always focused on
collecting more money without ever talking about where that money is actually
going. The government is absolutely useless at spending it well, and it won't
magically get better with even more money.

Wealthy powerful billionaires is a valid issue but there should be a better
strategy based on incentives for the greater good beyond just "tax them more".
A look at how much the Bill Gates foundation has done proves that wealth can
be deployed with positive impact, but sadly it's not something that gets much
news.

~~~
istjohn
I believe our society would be healthier if there were only three or four
orders of magnitude between the wealth of the richest and poorest households
in our nation. Thus taxing billionaires is a Good Thing (TM) regardless of
what the money is spent on. What gets done with the proceeds is just icing on
the cake.

Money is power, and an over-concentration of power is antithetical to a
democratic society. Bill Gates makes a show of his charitable spending,
rehabilitating his reputation as a ruthless, unscrupulous empire-builder,
meanwhile every year he gets richer.

~~~
foogazi
> I believe our society would be healthier if there were only three or four
> orders of magnitude between the wealth of the richest and poorest households
> in our nation. Thus taxing billionaires is a Good Thing (TM) regardless of
> what the money is spent on.

It’s always about dragging down instead of pulling up

~~~
CharlesColeman
>> I believe our society would be healthier if there were only three or four
orders of magnitude between the wealth of the richest and poorest households
in our nation. Thus taxing billionaires is a Good Thing (TM) regardless of
what the money is spent on.

> It’s always about dragging down instead of pulling up

Ok, tell me how you could reduce wealth disparity to only "three or four
orders of magnitude" by "pulling up," without doing something daft like
printing money and distributing it until the billionaires' wealth is inflated
away?

Some real problems are not solvable by win-win solutions.

~~~
manigandham
Because disparity is not the problem. Raising the standard of living at the
bottom is what matters, and putting in proper safeguards so that those at the
top cannot greatly interfere in things like government.

Spend better (education, healthcare, etc) while removing money from politics.
It would actually cost less and we could lower taxes for once for the rest of
us.

~~~
CharlesColeman
> Because disparity is not the problem.

That's debatable. Many people think it _is_ a problem, or at least an
undesirable situation.

> Raising the standard of living at the bottom is what matters, and putting in
> proper safeguards so that those at the top cannot greatly interfere in
> things like government.

Easier said than done. It may be impossible or impractical to neuter the
political power that comes with economic power.

~~~
manigandham
Why would they unless they are suffering at the bottom? How does it actually
affect you? Or is it just envy of those who have more?

If political power is created from economic power, then you're just
transfering even more power to politicians by creating wealth taxes. It is
concentrating it further.

~~~
CharlesColeman
>> Many people think [massive wealth inequality] is a problem, or at least an
undesirable situation.

> Why would they unless they are suffering at the bottom? How does it actually
> affect you?

You might want to spend some time thinking their alternate perspectives.

> Or is it just envy of those who have more?

Not any more than it being greed that's motivating you to take your positions.

It's generally not very enlightening to take personal swipes like you did
there.

> If political power is created from economic power, then you're just
> transfering even more power to politicians by creating wealth taxes. It is
> concentrating it further.

This seems to be hinting at a kind of libertarian worldview that sees the
government and politicians as some kind of unaccountable independent power.
That's not the only way to think about government, and I'd argue that it's a
pretty limited and ultimately unhelpful perspective.

A more democratic perspective is not so opposed to the people gaining more
power through their elected representatives.

~~~
manigandham
If you're able to tell me a max level of wealth needed then you can likewise
tell me a min level of comfort. So raise people up to that, and then what's
the complaint?

I came from a country and living that is far less than anything in the US, and
yet billions have it worse. Once you reach a good standard of living, what
perspective other than envy is there? And I'm talking about the collective,
not you.

> " _people gaining more power through their elected representatives_ "

What does taxes have to do with this? It solves nothing if those politicians
continue to spend poorly, as they are now and have been for a very long time.
I hear no solutions for this, only claims that somehow more money handed to
the govt will fix everything.

~~~
CharlesColeman
> If you're able to tell me a max level of wealth needed then you can likewise
> tell me a min level of comfort. So raise people up to that, and then what's
> the complaint?

For a democratic society to really work, it helps that individuals are _more
or less_ equal. Don't interpret more or less too rigidly. Past a certain
point, economic inequality breeds democratic disfunction and oligarchy.

> Once you reach a good standard of living, what perspective other than envy
> is there?

That's is a pretty messed up perspective. If a dictator provides you with what
he considers a good standard of living; is it envy to want to have some of the
power he denies you?

I suspect such accusations of envy are merely a way to defend the status quo
by delegitimizing critiques and proposals for change. I'm not saying you're
consciously trying to do that.

>>> If political power is created from economic power, then you're just
transfering even more power to politicians by creating wealth taxes. It is
concentrating it further.

>> This seems to be hinting at a kind of libertarian worldview that sees the
government and politicians as some kind of unaccountable independent power.
That's not the only way to think about government, and I'd argue that it's a
pretty limited and ultimately unhelpful perspective.

>> A more democratic perspective is not so opposed to the people gaining more
power through their elected representatives.

> What does taxes have to do with this?

Some of your questions are getting tedious. I quoted you some of the relative
context from the thread, so you can answer your question yourself. It's pretty
obvious.

> It solves nothing if those politicians continue to spend poorly, as they are
> now and have been for a very long time. I hear no solutions for this, only
> claims that somehow more money handed to the govt will fix everything.

This is hyperbole and a strawman. No one thinks more money will magically fix
these problems, but it's pretty clear withholding money from the government
has caused problems and will probably _prevent_ the many problems from getting
fixed at all. And even if all the money is wasted, there's still some value
gained from decreasing inequality through the actions of taxes.

~~~
manigandham
The difference is a dictator takes power. In a democratic and capitalist
system, there is nothing stopping you from gaining that power for yourself. So
what is there other than envy?

Taxes do not give more power to the people, if that's your answer. They
concentrate it in the hands of a few, except this time its politicians.

Withholding money from the government is already illegal. The only possibility
is an arbitrary judgement that there should be "more" paid, and if more money
won't magically solve these problems then why isnt the attention placed no
properly spending the money that is collected instead?

But the finance sentence hints at the real purpose - to take from those who
have. Inequality isn't the problem. It's proper isolation from power. Money
should be removed from politics, not poured into it.

~~~
CharlesColeman
> The difference is a dictator takes power. In a democratic and capitalist
> system, there is nothing stopping you from gaining that power for yourself.

lol.

The difference isn't as big as you think. It's just as accurate to say
"there's nothing stopping you from toppling a dictator and gaining his power
for yourself." You see that it's obviously complicated and difficult to do
such a thing, and you're ignoring similar complexities in your statement.

Obviously many barriers prevent a common man from "gaining that power for
[himself]." Things like not having the money (e.g. it helps to have money to
make money), connections, or luck. These are things that a pull yourself up by
the bootstraps capitalist fairy tale can't help with.

> So what is there other than envy?

A desire for democracy rather than aristocracy, for one.

Look, your question is the wrong one. It's clear you've internalized some
false beliefs about how fair the current system is, and that prejudices you
against those who want to change it. It would suggest you reflect and
critically examine those beliefs. I did that, and got over similar beliefs as
yours.

> But the finance sentence hints at the real purpose - to take from those who
> have.

No, that's not the real purpose, just your projection. The real purpose is to
help remedy society's problems, and I think it would be beneficial to _not_ to
have an aristocracy.

> Inequality isn't the problem. It's proper isolation from power. Money should
> be removed from politics, not poured into it.

I think I said it before, but that kind of isolation is impossible. It's not
the solution.

~~~
manigandham
A dictator is not elected. It specifically means people do not choose the
leader, whereas in a democracy you _do_ have the power vote for candidates and
run for office yourself.

Capitalism is nothing but an economic system where an individual owns the
means to production. That's it. Nothing more. You take the risks, create
leverage, and either suffer the failure or enjoy the profit. Nobody needs to
give you permission or gets to tell you what to do. It's the ultimate freedom
to create your own living.

Many complaints about capitalism are just complaints about life not being
fair. In that case, there is absolutely no other system that will give you
more opportunity.

Instead of telling me my question is wrong or saying I have inherent biases,
why not provide the actual argument? Otherwise I can just do the same to you
and we end up nowhere.

Again, if those at the bottom are at a sufficient level of comfort, then there
is no need to take from those above. And if political power is properly
isolated from the influence of wealth, just about every issue with the wealthy
now will go away.

~~~
CharlesColeman
> A dictator is not elected. It specifically means people do not choose the
> leader, whereas in a democracy you do have the power vote for candidates and
> run for office yourself.

So? It's just a society that's structured a little differently. There's
"nothing" stopping you from taking the insane gamble to topple the dictator,
and you would have a chance at success. Perhaps that chance can be reckoned as
being "fair."

> Instead of telling me my question is wrong or saying I have inherent biases,
> why not provide the actual argument?

I've told you already: your premises are flawed.

> Capitalism is nothing but an economic system where an individual owns the
> means to production. That's it. Nothing more. You take the risks, create
> leverage, and either suffer the failure or enjoy the profit. Nobody needs to
> give you permission or gets to tell you what to do. It's the ultimate
> freedom to create your own living....

> Again, if those at the bottom are at a sufficient level of comfort, then
> there is no need to take from those above. And if political power is
> properly isolated from the influence of wealth, just about every issue with
> the wealthy now will go away.

Again, _that kind of isolation is impossible._ Let's consider a simple,
extreme scenario that's illustrative: imagine a capitalist society where _one_
person has managed to own _everything_ , but deigns to employ all the common
people and provide them with a "sufficient level of comfort." Even if there's
still some nominal democratic system, it can't _truly_ function. He owns and
therefore controls the presses, the TV stations, and the servers, so only
messages he approves can get out. The economic power of his wealth gives him
control over the electoral system, and thus extreme political power. The
democratic processes would be turned into a sham. Attempts at "proper
isolation" would be incompatible with the rights of control that wealth
implies, and would amount to taking property away from the world-owner.

Furthermore: In this scenario, no one can capitalistically challenge the
world-owner's economic power, since he totally controls the resources they'd
need to do so. No one else has their own freedom or autonomy, since they live
in _his_ system. It's also likely they'll disagree with the his idea of what a
"sufficient level of comfort" is (as the history of shitty working conditions
attest that owners have poor sense of this). The common people who may want to
take away the world-owners wealth aren't driven by envy, they're driven by a
desire for freedom and autonomy of their own.

This scenario is extreme, but its broad features hold in other systems of
extreme inequality, such as a single corporate world-owner or an aristocracy.
Democracy functions best when there aren't the extremes of inequality. You
could say the same thing about capitalism, too (if your focus is on the
general welfare and not some individual).

There's all kinds of books and resources that go into these topics and ideas
much more skillfully than I can. I suggest you seek them out.

------
rubyn00bie
We have a system of checks and balances for our social system, but we have
quite literally _none_ on our economic system. This inequality of systematic
checks and balances on the economy has gradually, but fully, distorted the
power structure in America.

Most people in this country don't even understand that democracy and
capitalism aren't the same thing... Or that we only ever serve out one of
those, and it's factually not democracy. Why is that? Why do we say democracy
and mean capitalism?

Now without substantial adjustment to its ability to usurp and control power;
it will remain perpetually imbalanced with economic power vastly outweighing
the sum of our individual social power.

People in this thread want to talk about how this potential tax isn't fair
within the context of a corrupt system. Well, I can't argue against that, it
likely isn't fair, but that system itself is exceptionally corrupt. So, to
argue it within that context is to already have lost.

This tax is fair because we have no checks and balances on our economy and
this would be _the first_. This tax is fair because there are uncountable
externalities that these individuals do not pay for and cannot pay for because
it would be unreasonable burden for them to calculate it.

If you want to see the swap drain, stop letting the rich fill it. Stop
consolidating power into one vertical... Stop pointing at the government and
saying "look at how shitty and corrupt it is," because that corruption is
fueled by money. Distribute the money, distribute the power, and a lot of this
bullshit will fix itself.

... I'm done, this brought my headache back.

------
ethanwillis
I'm really tired of all these paywalled articles taking up space on the front
page.

~~~
tim333
There are usually ways around the paywall. Try the 'web' link or deleting
cookies. What works varies a bit by location.

------
baggy_trough
The wealth tax is unconstitutional unless the amount collected is apportioned
between states in accordance with their census population. Hope there are a
bunch of billionaires in West Virginia to carry the load!

~~~
masonic
Unless... nothing. There is no power to tax wealth in the Constitution.

~~~
teddyuk
I’m not American so sorry if I am being naive but can the constitution not be
changed?

~~~
big_chungus
It can, but takes a great deal of effort. The bar for a constitutional
amendment is much higher than, say, winning an election; this is a good thing,
as it prevents the constitution from being re-written every four years. A
politician may win a presidential or congressional election, but will not
likely convince the other half of the nation to support any such policy.
Income tax took a constitutional amendment, so yes, directly seizing money
from citizens would take one as well.

------
big_chungus
Wealth taxes are a bad idea. We already have one (inflation), which is a nasty
way to bypass the electorate and hits the poor hardest, but I don't think an
explicit one is any better. It seems to come from the Sanders-and-company
position of "billionaires should not exist"; many appear to believe that
morally, even were everyone else well-off, someone having that much more is
simply wrong. _Why_ is a "wealth tax" any better? Why shouldn't I be worried
about the precedent of the government taking someone's assets? This seems bad
for the same reasons civil forfeiture is bad.

Secondarily, I fail to understand the defense of such a policy by the "fair
share" argument. Can someone explain? Here's how I see it: I am splitting a
pizza among myself and seven friends. I cut it into eight pieces. My "fair
share" is one piece, and does not change because someone else is hungrier.
However, what the "fair share" of the "one percent" is, according to some
people, seems to scale based on how many programs said people want to
implement and how much they cost. Before anyone goes after my analogy, please
excuse it; I understand that it doesn't fit perfectly, that not everyone has
the same number of slices to start with, that the pie is not of constant size,
ad nauseum. But even if I am re-distributing pizza from those who have twice
as much to those who have half as much, the "just" amount doesn't fluctuate
based on the relative hunger of the people in question; why, then, should the
"fair share" increase because there are more things which people wish to fund?
The taxes seem to be devised to keep up with the policies, rather than the
government taking each person's "fair share" and doing as much as possible.

Effectively, it seems as though some people believe every dollar past a
certain amount is part of a cash reserve with which politicians may fund
things. This doesn't really seem "fair".

~~~
onlyrealcuzzo
LOL.

> We already have a wealth tax (inflation)

> which [...] hits the poor hardest.

A wealth tax does not hit the poor hardest.

~~~
big_chungus
Inflation does. The poor don't have financial advisors, stock trading, etc.;
many keep money in cash.

Sources:

[https://fivethirtyeight.com/features/inflation-may-hit-
the-p...](https://fivethirtyeight.com/features/inflation-may-hit-the-poor-
hardest/)

[https://www.iol.co.za/dailynews/why-inflation-hits-poor-
hard...](https://www.iol.co.za/dailynews/why-inflation-hits-poor-
hardest-11684646)

[http://www.poverty.ac.uk/inflation-low-income-households-
nec...](http://www.poverty.ac.uk/inflation-low-income-households-necessities-
reports/inflation-%E2%80%98hits-poorest-families-hardest%E2%80%99)

[http://www.washingtonpost.com/wp-
dyn/content/article/2008/03...](http://www.washingtonpost.com/wp-
dyn/content/article/2008/03/20/AR2008032003517.html)

[https://www.ft.com/content/77a36048-4ddd-11dd-820e-000077b07...](https://www.ft.com/content/77a36048-4ddd-11dd-820e-000077b07658)

[https://www.fin24.com/Economy/Poor-hardest-hit-by-
inflation-...](https://www.fin24.com/Economy/Poor-hardest-hit-by-
inflation-20140820)

[https://www.newstatesman.com/politics/2014/02/how-poor-
have-...](https://www.newstatesman.com/politics/2014/02/how-poor-have-been-
hit-hardest-inflation)

[https://www.sanders.senate.gov/newsroom/must-
read/inflation-...](https://www.sanders.senate.gov/newsroom/must-
read/inflation-hits-the-poor-hardest-washington-post)

[https://www.thetimes.co.uk/article/new-index-of-inflation-
sh...](https://www.thetimes.co.uk/article/new-index-of-inflation-shows-poor-
hardest-hit-6cvxs7dnd)

[https://business.inquirer.net/151537/poorest-households-
hard...](https://business.inquirer.net/151537/poorest-households-hardest-hit-
by-inflation-say-economists)

