Society, Holidays etc (split from Ossus tax thread)

[Big Phil]

snip

You missed two questions I had for you:

1. What prevents wealthy individuals from liquidizing their US assets and wealth and taking it overseas?
2. Would you confiscate wealth from foreign nationals who exceed the $100M cap?

[The Duchess of Zeon]

snip

You missed two questions I had for you:

1. What prevents wealthy individuals from liquidizing their US assets and wealth and taking it overseas?

Sorry about that. We'd have limits on external wealth transfer, of course. Britain implemented those in the 1940s and kept them around for several decades, so this is not unprecedented.

2. Would you confiscate wealth from foreign nationals who exceed the $100M cap?

If their US-based assets exceed 100 million, yes. There are very few foreign nationals who actually invest nearly that much into the US, however. Corporations would be held to completely different rules, so Toyota, Honda, etc, would be unaffected in their American operations.

[KrauserKrauser]

Do you have any knowledge as to why these limits were removed?

Please expand on these completely different rules for corporations, especially since you are effectively corporatizing individuals with >$100 million in assets. I would like to see what you think would be workable for businesses to operate in your vision of tax policy.

[Broomstick]

So, you have two reasons to keep "working"--which we all know means maintaining investments in the stock market, since most of these people no longer work--that are very obvious:

I question your presumption that the very rich no longer work. I have known only one billionaire personally in my lifetime, but he didn't (and still doesn't) sit all day at a desk managing his assets. He had at least 2 dozen private projects, ranging from developing electronic musical instruments to funding the construction of astronomical facility for a college out east, in which he was directly involved and which employed dozens of people (including, at one point, my Other Half back when he was capable of working).

Then we have people like Steve Fosset and Richard Branson who have a shitload of money each but, instead of sitting on their asses all day "managing their money" helped bankroll Rutan's private shot at space.

So please do back up your assertion that the super-rich typically do not work, that all they do is manage investments rather than engage in other endeavors.

[The Duchess of Zeon]

So, you have two reasons to keep "working"--which we all know means maintaining investments in the stock market, since most of these people no longer work--that are very obvious:

I question your presumption that the very rich no longer work. I have known only one billionaire personally in my lifetime, but he didn't (and still doesn't) sit all day at a desk managing his assets. He had at least 2 dozen private projects, ranging from developing electronic musical instruments to funding the construction of astronomical facility for a college out east, in which he was directly involved and which employed dozens of people (including, at one point, my Other Half back when he was capable of working).

Then we have people like Steve Fosset and Richard Branson who have a shitload of money each but, instead of sitting on their asses all day "managing their money" helped bankroll Rutan's private shot at space.

So please do back up your assertion that the super-rich typically do not work, that all they do is manage investments rather than engage in other endeavors.

But how many of those endeavours are in fact for a profit, rather than charitable? An astronomical facility for a college is definitely a charitable work, for instance, and could be funded as such above the wealth limit I proposed. Rutan's shot at space also hasn't turned any profit yet, to my knowledge--these were indulgences that rich people took because they had nothing better to do with their time, and at least one of the examples you mentioned was a charitable one anyway.

[The Duchess of Zeon]

Do you have any knowledge as to why these limits were removed?

Probably to aid in liquidity of foreign investment and due to lobbying by the rich. The British limits were utterly draconian, though. IIRC you couldn't even take 600 pounds sterling out of the country (or even LESS) without specific authorization.

Please expand on these completely different rules for corporations, especially since you are effectively corporatizing individuals with >$100 million in assets. I would like to see what you think would be workable for businesses to operate in your vision of tax policy.

I don't believe I'm really "corporatizing" people with $100 million in assets--can you explain how I'm treating them more like a corporation in your eyes?

[Broomstick]

So, you have two reasons to keep "working"--which we all know means maintaining investments in the stock market, since most of these people no longer work--that are very obvious:

I question your presumption that the very rich no longer work. I have known only one billionaire personally in my lifetime, but he didn't (and still doesn't) sit all day at a desk managing his assets. He had at least 2 dozen private projects, ranging from developing electronic musical instruments to funding the construction of astronomical facility for a college out east, in which he was directly involved and which employed dozens of people (including, at one point, my Other Half back when he was capable of working).

Then we have people like Steve Fosset and Richard Branson who have a shitload of money each but, instead of sitting on their asses all day "managing their money" helped bankroll Rutan's private shot at space.

So please do back up your assertion that the super-rich typically do not work, that all they do is manage investments rather than engage in other endeavors.

But how many of those endeavours are in fact for a profit, rather than charitable?

So... work for non-profit entities don't count? Then I wasn't employed from 1993 through 2007 because I worked for two non-profit corporations during that time. Neither of which, I hasten to add, were a "charity" in any sense of the word.

The electronic musical instruments were definitely for profit, as well as for promoting the arts.

An astronomical facility for a college is definitely a charitable work, for instance

Really? On what do you base that statement? A university or college is NOT a charity! It may be a not-for-profit institution, that doesn't make it a charity.

Rutan's shot at space also hasn't turned any profit yet, to my knowledge--these were indulgences that rich people took because they had nothing better to do with their time, and at least one of the examples you mentioned was a charitable one anyway.

Again - you are mistaking not intended for profit with charitable. While there is considerable overlap between the two categories they are not identical. Experimental aviation is most assuredly NOT a charity! Rutan doesn't do these things because he's a spoiled rich guy, he does it for a living. Branson most certainly engages in aviation projects for profit (see Virgin Atlantic) and has stated multiple times that he does expect, eventually, to see a profit from space tourism (that long term vs. short term planning you claim to promote). Of the examples given, Fossett probably comes closest to indulgent rich guy nevermind that his indulgences actually did push the envelope and employed a lot of people.

And - prove that the TYPICAL super-rich person does not work.

[The Duchess of Zeon]

So... work for non-profit entities don't count? Then I wasn't employed from 1993 through 2007 because I worked for two non-profit corporations during that time. Neither of which, I hasten to add, were a "charity" in any sense of the word.

The electronic musical instruments were definitely for profit, as well as for promoting the arts.

I guess I've just always associated non-profits focused on the enhancement of society with being charitable foundations.

Again - you are mistaking not intended for profit with charitable. While there is considerable overlap between the two categories they are not identical. Experimental aviation is most assuredly NOT a charity! Rutan doesn't do these things because he's a spoiled rich guy, he does it for a living. Branson most certainly engages in aviation projects for profit (see Virgin Atlantic) and has stated multiple times that he does expect, eventually, to see a profit from space tourism (that long term vs. short term planning you claim to promote). Of the examples given, Fossett probably comes closest to indulgent rich guy nevermind that his indulgences actually did push the envelope and employed a lot of people.

And - prove that the TYPICAL super-rich person does not work.

You know, I'm going to concede this aspect of things because I'd always associated charities and non-profits, which I can see was incorrect.

But super-rich individuals don't need to work to keep earning money--we can both agree to that, right? I mean that's obvious, their stock portfolios do the work for them. So clearly something else is motivating them.

[Broomstick]

I guess I've just always associated non-profits focused on the enhancement of society with being charitable foundations.

Understandable.

Let me put this in perspective for you - of the 31 or so primary Blue Cross Blue Shield companies in the United States, only two are for-profit companies. All the others are non-profit corporations. I can't imagine calling the largest family of health insurance companies in the world charities.

Really, what I think you want is for the money to not sit idle but to be re-invested in entities and operations that benefit society as a whole. If that is the case, perhaps you may wish to re-think how to best motivate people to do that.

You know, I'm going to concede this aspect of things because I'd always associated charities and non-profits, which I can see was incorrect.

But super-rich individuals don't need to work to keep earning money--we can both agree to that, right? I mean that's obvious, their stock portfolios do the work for them. So clearly something else is motivating them.

Um... those accolades you said we should all work for?

The super-rich are divorced from the need to work, in a sense they do live in the Star Trek world where people are motivated by factors other than mere money. Thus, they are truly free to pursue whatever interests them. Some, of course, live very self-indulgent lives. Others pursue other goals. In some cases, such as developing a private space ship, this may result in a LOT of money being spent with no clear objective payoff (though in Fossett's case it was quite clear his goal was not profit but setting records - he had over 100 world records at the time of his death, and since some of them were "firsts" they will forever remain on the books). In other instances profit may result either by design or as a secondary goal (the project my husband was involved in was primarily to promote various forms of ethnic music and bring it into the 21st Century - profit was a very nice side effect).

And, as for that billionaire I mentioned -- he isn't one any more. Post 9/11 he lost about 3/4 of a billion in the stock market, seriously depleting his wealth although certainly he still is very wealthy. The problem is, though, that that loss of wealth also ended a dozen projects he was working on and resulted in quite a few people becoming unemployed, losing grants, etc. That's an illustration of the problem of removing wealth from the hands of someone who actually re-invests in other projects.

So, again, perhaps what you need to achieve the goal of keeping the money in circulation for the benefit of society is not a confiscatory tax but some other mechanism to induce the wealthy and super-wealthy to undertake various projects and endeavors. There are a number of mechanisms that can be used - prizes, for example. The super-rich may not need money but they do have egos. Public accolades - not only the super rich but many corporations engage in various projects that benefits others for the positive publicity generated. Our tax code that allows deductions for charitable contributions likewise encourages give back to society. None of these methods are perfect, so I would suggest a combination of incentives, Or perhaps a luxury tax in kind - for example, if you wish to own a private jet perhaps you should be required to use it a certain number of times a year to transport less advantaged people to medical treatment. I'm sure there are many creative ways to encourage give-back to society without simply imposing a wealth cap.

[K. A. Pital]

In any case, it really boils down to you believing the needs of the many outweigh the needs of the one, and me believing that the needs of the many don't excuse trampling the rights of the one, at least not here within the United States.

Basically, yes. Arguing further would only be walking around this fundamental disagreement. I don't believe in inalienable natural rights at all, anyhow.

You said "Why has philantropy not, never once in history, ended poverty inside a nation then? And why have governments, via taxation, coped with that task?" Now it's alleviated rather than ended, huh?

Alleviated to a neglible rate is the same as "ended". Being more technically correct is something everyone should pursue when discussing such issues.

To make a point strong enough so you can no longer harp about the value of that needle in the hay:

4th largest world philantropy from Billy Gates: US$1.5 billion annual donations.
Yearly aid to lesser developed nations, by the German government: $10 billion yearly.
Government GNP redistribution inside a single rather small nation: Sweden: $200 billion plus yearly.

China's Great Leap Forward, perhaps, which was an unmitigated disaster for China?

China's Great Leap Forward wasn't a wealth cap. It was not anything close to a wealth cap of 100 million in an industrialized nation. You want examples where direct seizure of assets by the government led to improvement of the people's well-being? A recent example is the seizure of a huge swath of oil and gas sector by the government in Russia; in effect a post-facto legalized renationalization - it allowed to spread the superprofits via transfers and alleviate quite a lot of suffering.

You seem to think that wealthy people have some sort of inalienable right to their property. They do not. The well-being of the majority matters more, and that's our crucial disagreement.

[Big Phil]

China's Great Leap Forward, perhaps, which was an unmitigated disaster for China?

China's Great Leap Forward wasn't a wealth cap. It was not anything close to a wealth cap of 100 million in an industrialized nation.

My point in referencing the Great Leap Forward was that the Chinese people's personal items - pots, pans, etc., - were all requisitioned by the government in the name of economic progress. It's simply an example of one possible outcome of this sort of "seizure of assets to meet everyone's needs" attitude.

You want examples where direct seizure of assets by the government led to improvement of the people's well-being? A recent example is the seizure of a huge swath of oil and gas sector by the government in Russia; in effect a post-facto legalized renationalization - it allowed to spread the superprofits via transfers and alleviate quite a lot of suffering.

Was that oil and gas privately owned? If so, I assume it was government owned under the USSR, then snapped up on the cheap by some folks after the collapse. I still see that as being different than Duchess' proposed solution here in the United States.

You seem to think that wealthy people have some sort of inalienable right to their property. They do not. The well-being of the majority matters more, and that's our crucial disagreement.

I think that people have a right to life, liberty, and property (pursuit of happiness is kind of stupid). I wouldn't go so far as to say those rights are inalienable, but I do think that a society which regularly tramples upon the rights of individuals is essentially despotic, whether benevolent or not.

As you said, however, this disagreement is fundamental, and arguing about it further isn't going to accomplish anything.

[Big Phil]

1. What prevents wealthy individuals from liquidizing their US assets and wealth and taking it overseas?

Sorry about that. We'd have limits on external wealth transfer, of course. Britain implemented those in the 1940s and kept them around for several decades, so this is not unprecedented.

I'm not familiar with British wealth transfer laws, but if they were implemented in the 40's I imagine they were an emergency measure resulting from WWII.

2. Would you confiscate wealth from foreign nationals who exceed the $100M cap?

If their US-based assets exceed 100 million, yes. There are very few foreign nationals who actually invest nearly that much into the US, however. Corporations would be held to completely different rules, so Toyota, Honda, etc, would be unaffected in their American operations.

I can't imagine seizing the wealth of foreign nationals would be appreciated. I also can't imagine a majority of Americans supporting your plan - even if it benefits American directly they have historically taken a dim view of this sort of thing - Guatemala, Venezuela, etc.

[fgalkin]

snip

You missed two questions I had for you:

1. What prevents wealthy individuals from liquidizing their US assets and wealth and taking it overseas?

Sorry about that. We'd have limits on external wealth transfer, of course. Britain implemented those in the 1940s and kept them around for several decades, so this is not unprecedented.

I have already pointed out why this will not work

2. Would you confiscate wealth from foreign nationals who exceed the $100M cap?

If their US-based assets exceed 100 million, yes. There are very few foreign nationals who actually invest nearly that much into the US, however. Corporations would be held to completely different rules, so Toyota, Honda, etc, would be unaffected in their American operations.

100 million? That's not very much. There are estates in Greenwich, CT, where I work that cost more than that.

Have a very nice day.
-fgalkin

[The Duchess of Zeon]

The argument for the wealth cap is conceded; very strict and direct government controls on the payment of dividends and size of dividends to be paid could have the same desired effect of minimizing dividend payouts and thus freeing corporations of the endless tail-chasing of profits at all costs driven by the insatiable greed of the rich.

I would however propose as an alternative not a further tax on income, but instead a tax on wealth for people holding more than $100 million in assets... Each year, say, you receive a tax bill for 2% of the value of your assets above 100 million (the first 100 million would not be subject to the wealth tax), regardless of income. This forces you to succeed in at least making 2% of the value of your wealth above 100 million, each year, every year, or else you will lose more and more of your wealth until you're at 100 million. Conversely, if you make more than that, you pocket the rest as a profit which stands in addition to your existing assets.

Does anyone find this implementation to run afoul to the same objections as the first? It would seem to in fact push the so-called greed impulse to further levels, rather than dampen it, since they must endlessly chase their own tails to stay as wealthy as they are... ..It functions in short basically as a property tax, except on all assets, excluding the first 100 million in assets.

[KrauserKrauser]

I definitely don't have the same objections to it as the wealth siezure, it is an innovative tax plan that I have not seen before, it'll take some time to digest it.

I think it is actually fairly reasonable, given that your aim is to make sure that the wealth is being put to use in the economy. Add this to your existing program and then open the tax rates to negotiation and you have an interesting tax plan that still would not have a snowballs chance in hell of passing, but at least it is one I can understand and deem reasonable.