Make one simple change to capitalism: put in. A constitutional hard cap on personal wealth. Anything income or gift or whatever over 1 million goes 100% to taxes
You don’t understand where the vast majority of the wealthiest’s wealth comes from. There’s no “income” or “gift” at that level, it’s just the fact that they own things that are becoming more valuable over time. The vast majority of the increase in these people’s wealth over time is newly-created; it’s value that literally didn’t exist before, not an amount of cash money taken away from anyone else.
Speaking of value: net worth is just a valuation, a price tag. It’s the market saying “I would pay you $X for a share of this if you sold it”. If I buy a rookie baseball card for $5 and the player becomes famous for whatever reason and my card is now worth $100 because the demand significantly increased, my net worth increased by $95, but no one was deprived of $95 to make that so.
A hard cap on wealth is effectively legislating that if something you already own becomes too valuable, you’re not allowed to continue owning it anymore. And any sensible person should understand why that makes zero sense.
The vast majority of the increase in these people’s wealth over time is newly-created; it’s value that literally didn’t exist before, not an amount of cash money taken away from anyone else.
A wealth tax will go after that, and that will absolutely make sense. They can sell the shares they have in the companies, and that will make them think twice before cheating the system to grossely exagerate the value of their companies.
And if we talk about start-ups or other special cases where the CEOs can’t sell shares and/or we don’t really know their worth, we can have them give shares as payment. The gov will sit on them until they have actual value and sell them, or relesase them back if said value was lower than estimated at the time.
A hard cap on wealth is effectively legislating that if something you already own becomes too valuable, you’re not allowed to continue owning it anymore
I don’t know how else it would work. Do you? The alternative is that a handful of people are permitted own and control most of society’s resources while everyone else subsists on scraps. No one person should control the same amount of resources as a small or medium-sized government, except without the checks and balances that governments (should) have. Absolute power corrupts absolutely.
The way I imagine it working is that if you own stock in a company that now went up in value and now pushes your net worth above the cap, this puts you in a position where you now have more control than society permits you to have. In this case, some of your stock is sold off for taxes or parts of the company are split off and sold for taxes. You can of course proactively structure your business with the understanding that you’ll give up business unit x and y while keeping z if you do get close to the cap rather than waiting and having the government force your hand. Either way, the end result is that you have less control, the government gets tax money to fund social programs, and others take on some of the control you previously enjoyed by buying up your stock or business units (e.g., a worker collective pools their savings to buy it).
Not sure how well all that would work in practice, or all of the detailed policies that would be required to make it fair and avoid major disruptions to the market. All I know is what we have now is definitely not working.
That’s my point, actually. It doesn’t work in practice. Given that ultimately, it’s third parties that determine the value of things you own that are on the open market, placing hard limits like that would open the door to massive gaming of those systems. It’d also be practically impossible to enforce in any real way, as that would require an actual full audit (net worth figures you see in the media are educated guesses, not enough certainty for the application of law), during which the valuation of the assets in question can be manipulated downward in myriad ways.
The alternative is that a handful of people are permitted own and control most of society’s resources while everyone else subsists on scraps.
The poor aren’t poor because the wealthy are wealthy. Like I said, the vast majority of the wealthiest people’s wealth is not cash money, it’s a theoretical price tag going up over time. Over the past hundred years, the number of billionaires per capita has increased 7x, but a hundred years ago, poverty was MUCH more prevalent than it is today.
The two simply aren’t connected the way you assume they are, because wealth isn’t the zero-sum game you assume it is.
The way I imagine it working is that if you own stock in a company that now went up in value and now pushes your net worth above the cap, this puts you in a position where you now have more control than society permits you to have.
Really take a moment to think about this concept. You own a thing that’s valuable to others. If it becomes too valuable (a threshold defined completely arbitrarily, by the way) to others, “society” no longer “permits” you to continue owning it?
In this case, some of your stock is sold off for taxes or parts of the company are split off and sold for taxes.
In other words, the government will literally steal your stuff if the public decides it’s more valuable than the amount the government arbitrarily decided is too much?
the government gets tax money to fund social programs
Extremely wishful thinking. You’re actually more likely to net a loss of tax revenue overall attempting this, as people nearing the cap will rearrange their assets to avoid going over the cap, so no new revenue will be coming in, meanwhile the logistic cost of even determining whether someone is over the cap is certainly going to cost much more taxpayer money than what is brought in (which, again, is most likely to be literally zero or very close to it).
There is a reason that every country that’s previously attempted a policy like this aimed at the wealthiest has either since repealed it, or changed it such that it no longer targets the wealthiest (i.e. a ‘wealth tax’ that the middle class is made to pay as well). I’m interested in learning from their mistakes, not repeating them.
You make valid points and perhaps a wealth cap is a naive solution to the problem. Enhancing or even just properly enforcing existing anti-trust laws might be a better way to accomplish many of the same goals.
To your point about wealth not being a zero-sum game, it depends. There have been many innovators who have created wealth for both themselves and society as a whole and have been justly rewarded. I have no problem with that. Then there is wealth that is created via anti-competitive, exploitative, and rent-seeking practices. In many cases, a company will start off doing the former, then grow to be a huge monster that no longer innovates and instead continually enshittifies and becomes an overall parasite on society that blocks competition and stifles innovation, often capturing regulatory agencies and doing all sorts of unethical things with no consequences. At that point, the company and the individuals controlling it are no longer net contributors to society and need to be put in check, or otherwise, it does become a zero-sum game.
The poor aren’t poor because the wealthy are wealthy. Like I said, the vast majority of the wealthiest people’s wealth is not cash money, it’s a theoretical price tag going up over time. Over the past hundred years, the number of billionaires per capita has increased 7x, but a hundred years ago, poverty was MUCH more prevalent than it is today.
The poor are poor because while they’re paid peanuts, everybody else estimates the value they create through their work in very large numbers. It is absolutely a matter of work-value distribution. Calling that “wealth redistribution” is an artifact to prop the “tax is steal” propaganda.
Tax the companies “theoretical price tag” and see it adjusting to much more realistic numbers, that would be beneficial for everyone.
Lastly, we can keep saying all we want about one hundred years ago, but at the time, economic growth was 2 digits. Today it’s one digit, and almost all of it value goes straight up to the ultra-rich. Growth is decreasing but ultra-rich worth net keeps increasing at faster rate. How can one not see this is bonkers?
You don’t understand where the vast majority of the wealthiest’s wealth comes from. There’s no “income” or “gift” at that level, it’s just the fact that they own things that are becoming more valuable over time. The vast majority of the increase in these people’s wealth over time is newly-created; it’s value that literally didn’t exist before, not an amount of cash money taken away from anyone else.
Speaking of value: net worth is just a valuation, a price tag. It’s the market saying “I would pay you $X for a share of this if you sold it”. If I buy a rookie baseball card for $5 and the player becomes famous for whatever reason and my card is now worth $100 because the demand significantly increased, my net worth increased by $95, but no one was deprived of $95 to make that so.
A hard cap on wealth is effectively legislating that if something you already own becomes too valuable, you’re not allowed to continue owning it anymore. And any sensible person should understand why that makes zero sense.
A wealth tax will go after that, and that will absolutely make sense. They can sell the shares they have in the companies, and that will make them think twice before cheating the system to grossely exagerate the value of their companies.
And if we talk about start-ups or other special cases where the CEOs can’t sell shares and/or we don’t really know their worth, we can have them give shares as payment. The gov will sit on them until they have actual value and sell them, or relesase them back if said value was lower than estimated at the time.
I don’t know how else it would work. Do you? The alternative is that a handful of people are permitted own and control most of society’s resources while everyone else subsists on scraps. No one person should control the same amount of resources as a small or medium-sized government, except without the checks and balances that governments (should) have. Absolute power corrupts absolutely.
The way I imagine it working is that if you own stock in a company that now went up in value and now pushes your net worth above the cap, this puts you in a position where you now have more control than society permits you to have. In this case, some of your stock is sold off for taxes or parts of the company are split off and sold for taxes. You can of course proactively structure your business with the understanding that you’ll give up business unit x and y while keeping z if you do get close to the cap rather than waiting and having the government force your hand. Either way, the end result is that you have less control, the government gets tax money to fund social programs, and others take on some of the control you previously enjoyed by buying up your stock or business units (e.g., a worker collective pools their savings to buy it).
Not sure how well all that would work in practice, or all of the detailed policies that would be required to make it fair and avoid major disruptions to the market. All I know is what we have now is definitely not working.
That’s my point, actually. It doesn’t work in practice. Given that ultimately, it’s third parties that determine the value of things you own that are on the open market, placing hard limits like that would open the door to massive gaming of those systems. It’d also be practically impossible to enforce in any real way, as that would require an actual full audit (net worth figures you see in the media are educated guesses, not enough certainty for the application of law), during which the valuation of the assets in question can be manipulated downward in myriad ways.
The poor aren’t poor because the wealthy are wealthy. Like I said, the vast majority of the wealthiest people’s wealth is not cash money, it’s a theoretical price tag going up over time. Over the past hundred years, the number of billionaires per capita has increased 7x, but a hundred years ago, poverty was MUCH more prevalent than it is today.
The two simply aren’t connected the way you assume they are, because wealth isn’t the zero-sum game you assume it is.
Really take a moment to think about this concept. You own a thing that’s valuable to others. If it becomes too valuable (a threshold defined completely arbitrarily, by the way) to others, “society” no longer “permits” you to continue owning it?
In other words, the government will literally steal your stuff if the public decides it’s more valuable than the amount the government arbitrarily decided is too much?
Extremely wishful thinking. You’re actually more likely to net a loss of tax revenue overall attempting this, as people nearing the cap will rearrange their assets to avoid going over the cap, so no new revenue will be coming in, meanwhile the logistic cost of even determining whether someone is over the cap is certainly going to cost much more taxpayer money than what is brought in (which, again, is most likely to be literally zero or very close to it).
There is a reason that every country that’s previously attempted a policy like this aimed at the wealthiest has either since repealed it, or changed it such that it no longer targets the wealthiest (i.e. a ‘wealth tax’ that the middle class is made to pay as well). I’m interested in learning from their mistakes, not repeating them.
That’s for sure.
You make valid points and perhaps a wealth cap is a naive solution to the problem. Enhancing or even just properly enforcing existing anti-trust laws might be a better way to accomplish many of the same goals.
To your point about wealth not being a zero-sum game, it depends. There have been many innovators who have created wealth for both themselves and society as a whole and have been justly rewarded. I have no problem with that. Then there is wealth that is created via anti-competitive, exploitative, and rent-seeking practices. In many cases, a company will start off doing the former, then grow to be a huge monster that no longer innovates and instead continually enshittifies and becomes an overall parasite on society that blocks competition and stifles innovation, often capturing regulatory agencies and doing all sorts of unethical things with no consequences. At that point, the company and the individuals controlling it are no longer net contributors to society and need to be put in check, or otherwise, it does become a zero-sum game.
The poor are poor because while they’re paid peanuts, everybody else estimates the value they create through their work in very large numbers. It is absolutely a matter of work-value distribution. Calling that “wealth redistribution” is an artifact to prop the “tax is steal” propaganda.
Tax the companies “theoretical price tag” and see it adjusting to much more realistic numbers, that would be beneficial for everyone.
Lastly, we can keep saying all we want about one hundred years ago, but at the time, economic growth was 2 digits. Today it’s one digit, and almost all of it value goes straight up to the ultra-rich. Growth is decreasing but ultra-rich worth net keeps increasing at faster rate. How can one not see this is bonkers?
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