There's something virtuous about living beneath your means and ensuring that you can be self-sufficient in your retirement.
There's something virtuous about living beneath your means and ensuring that, at a minimum, you are not a burden to your family, but that ideally you provide them support rather than siphoning support from them. In order to do that, it's almost a given that you will die with money left over. (The alternative being feeding the bloodsuckers who sell annuities.)
One person's "hoarding of wealth" is another person's "natural outcome of frugal living and appropriate planning".
You speak of frugal living, but why live frugally amassing great wealth? There is a difference between having money to be self sufficient and sitting on billions of dollars
I think the frugal living they're talking about is not in the venn diagram overlap of those accumulating Billions of Dollars.
My understanding is that the point would be to not tax someone leaving a much less significant amount to their children, in the case of either an untimely or expected death, and rather using more targeted methods to prevent the accumulation of billions, like taxing those who accumulate billions.
Typically those billions aren't liquid, they're usually shares in some business you've built which you may not want to sell because it'll dilute your control in the business.
No, but our democratic institutions do. If I ended up parking my riches in a particular country, I'm OK with whatever I have to pay (or there're enough legal mechanism to make it less painful).
FWIW, it's not "obvious" that many poor people would decide that rich much pay a lot. That's not the case in US, for example. Sure, there're people who want to "make rich pay", but in general US system is already fair enough [1] (page links to multiple bipartisan sources).
> many poor people will decide that few rich people must pay more
I fail to see the problem, if you have more money than you could possibly use in a lifetime, why shouldn't that be redistributed through programs that benefit all of society, instead of whatever pet projects the rich person favors.
If the wealth was accumulated legally and fairly, as a result of creating such vast value for society that society willingly parted with their money for the goods/services from the company/ies that the wealthy person invested in and retained an ownership stake in, I don't find it obvious that society should have a further claim on the proceeds from the result of those transactions just because the owner "has too much money".
That person/family has shown some evidence that they're capable of investing money to generate an outsized return on that investment. I would tend to think they might be able to repeat that effect with the way they choose to reinvest the money, be it for societal value or charitable endeavors. I don't see evidence in balance sheets that governments have that same track record.
Society has made murder, theft, and rape illegal largely because of a fairly broad-based agreement that those are immoral.
Where there isn’t broad agreement on morality, I would prefer to avoid passing laws to regulate behavior and allow choice. (Roe v Wade/abortion being just one crystal clear case of this tension which I believe is generally best resolved in favor of individual freedom. I am free to follow my own morals where they are stricter than the law; I do not force others to follow them.)
> I fail to see the problem, if you have more money than you could possibly use in a lifetime, why shouldn't that be redistributed through programs that benefit all of society, instead of whatever pet projects the rich person favors.
Who decides that? The great and scholarly politicians we elect?
How many generations deep does "your family" run? Do you really think people with multiple billions of wealth were living beneath their means?
(I agree with your point if they are upper middle class or even have 10-50 million dollars of wealth). But when you are part of the top 0.1% of the population, there is no way you are living beneat your means to be self sufficient in retirement.
Those who "hoard" wealth do not do so by filling a swimming pool with gold coins like Scrooge McDuck. They invest in companies that provide jobs and the goods and services that the rest of us enjoy. Yes that is virtuous.
Sitting on billions of dollars in stock in a publicly traded company isn't really all that different from having a swimming pool full of gold coins. The day-to-day functioning of that company is not going to be affected if the billionaire sells shares to pay taxes rather than giving the shares to their children. An initial investment in a company is virtuous but once you have billions keeping that money in the family isn't really virtuous given that the alternative is contributing to the society that made the initial investment possible.
Investing in companies is contributing to society. Government is not society. Investing in Walmart so that the rural poor have more access to affordable goods is virtuous. And a whole lot of the contributions to government are absolutely not. Like the money that goes to build bombs to kill people in Yemen, or the money that funds your local police department's efforts to suppress protests against their unaccountable violence.
Do you mean supply of credit? Because additional money wouldn't drive demand for credit, it would drive supply as those with money look for places to lend it.
If you are saying an excess supply of credit leads to financial crises, I agree with you. But the federal reserve that intentionally pumps money into the big banks to make credit easy is a far bigger contributor.
I agree that Milton Friedman had his flaws, one of which is this very topic, he never properly connected the federal reserve, money expansion and easy credit to economic instability.
> They invest in companies that provide jobs and the goods and services that the rest of us enjoy. Yes that is virtuous.
They invest in companies and expect a return! If money was directly redistributed, then the people running and working for those companies might able to keep that value that they have created.
This is true to an extent, but in no way is someone worth $200 billion amassing the wealth the same way someone earning and saving $2 million over a lifetime.
This also implies that only the person investing would provide that function of providing goods, jobs and services. Since he government does the same (produce goods, jobs and services), does that the government is also moral? Why is one more moral than the other?
Not all jobs or service contribute to society. But if you invest in a company that provides goods and services that people don't want, that money is lost and you lose your ability to invest further.
When government provides a service that people don't want, that service can continue indefinitely, especially if the few who benefit can contribute back to the politicians who keep it going. Lockheed Martin and Boeing can contribute to some politicians to make sure that wars continue and they reap back way more than they contributed from the taxpayer who's only option is to vote between two pro-war candidates. Those jobs making bombs for Saudi Arabia to drop on Yemen don't contribute to society, they are a determent to society, yet they continue without end because nobody loses on that investment as long as the taxpayer can be forced to pay for it.
The same could be said about people who want to take other's money away. People are spend-thrifts enough as it is, a wealth tax just dis-incentivizes being fiscally responsible.
Suddenly 99% of the world is no longer discouraged from being fiscally responsible. Do I really care if a billionaire is fiscally irresponsible? Maybe for a single generation. After that, we're good.
What GP proposed was a Wealth Tax which is an additional tax on _living_ people who have a net worth over a certain amount.
What you linked is an Estate Tax (aka death/inheritance tax) which only applies when someone passes wealth on after death. If they decide to give all their money away to charity or otherwise spend it while they're alive it does not apply.
What we now recognize (and decry) as greed looks very similar to the force that created intelligent life from primordial soup. Greed, ambition, and Darwinian fitness seem close to synonymous.
Also, there's nothing uniquely American about considering greed virtuous[0].
Virtuous is subjective, but there is the age old goal of leaving the next generation better off than yours. It seems like a personal choice of whether to spend money responsibly, spend frivolously, give it away, or pass it on to whoever you want at any time to do any of those options.
I'm not sure where I stand on a wealth tax, but I would always be hesitant to tax money that in theory was already taxed when earned. I could certainly see the idea becoming more acceptable if the importance of community and a traditional, tight-knit family structure continues to erode.
> but there is the age old goal of leaving the next generation better off than yours
Hopefully we can strike a balance between leaving only your direct descendants better off and leaving everyone in the next generation better off.
> I would always be hesitant to tax money that in theory was already taxed when earned
This is incompatible with having an income tax and any other tax. Although, income tax isn't exactly well loved by economists, so maybe there is something to that.
>Hopefully we can strike a balance between leaving only your direct descendants better off and leaving everyone in the next generation better off.
You're thinking that taxing the wealth of a billionaire is guaranteed upon death. Therefore from your perspective there are two options: taxing the wealth or not taxing the wealth. Except taxation is the exception, not the rule.
If you know your wealth will disappear then you will try to get rid of it before it can disappear.
With the estate tax there is a strong incentive to just hand over your wealth to your children before you die or by spending it all on donations so the government can't take it.
I was just thinking in terms of the morality / virtuosity discussion there. In practical terms, there are of course massive problems with enforcement and the flight of wealth, for both estate taxes and wealth taxes.
There is lots of virtue in giving far more to society (remember that rational free markets are value exchanges, each party thinks they got a good deal).
Someone who has a lot of stored up value has given lots to society without receipt of anything but some electronic digits (yet). Plus if the government's rules were working they'd also have paid at least some taxes on all that stored wealth, leading to additional societal value.
in rational free markets sone does not need to give twice because the contribution to society is in the provision of things people want.
IMO most of the debate is missing that America doesnt have free markets and keeps trying to duct tape around it without fixing the actual bug.
I think it is virtuous to plan and prepare for your own security and the security of those who depend on you. But beyond that (like if you are rich enough for financial security to not matter much) I don't think it is inherently virtuous to save.
People used to argue that saving (investing) is better for the economy than spending (consumption). That's an argument for a lower capital gains tax. But you could argue the US has gone too far in favor of investors, at the expense of consumption. Presumably more $ in the hands of the 1% = more investment, more $ in the hands of the lower 50% = more consumption.
I don't have an answer, but to flip that question: If the very wealthy can live on passive income from accumulated wealth, then why can't all of society?
Let's liquidate all US billionaires and spread that money to every person in the US. Let's also set aside the question of how one could legally liquidate the billionaires.
OR, just parcel out land and give people seeds and allow them to trade with nearby neighbors... There's no longer a need for money and everyone gets to eat - which is all we really need. Beyond that, people can help each other build homes in smallish communities. Money, even on a planet with this many people, isn't necessary, because it's like people driving cars - the system works because everyone is operating to keep themselves alive. HN is not a fan of this take.
Because most people in society, across all wealth levels, refuse to live within their means. I was quite disappointed when I discovered this, because I thought that if I made enough money, I'd be able to support all my family. But then I started noticing that the people who were broke generally had newer cars and computers than I did, and that families with multiple six-figure incomes were spending their way into bankruptcy. And the government does it too, accumulating ever more debt.
You need a large amount of capital for it to do enough good for others (e.g. via investments into companies) that the returns you receive are enough to live on.
I can assure you the vast majority of billionaires did not become that by caring about creating jobs. They cared about the return. A return that does not have to come matched with creating good jobs.
Assuming you're American I believe you still have people in gov that got rich because of their family starting a pyramid scheme. I wouldn't call that a benefit to society.
Remember those guys in the 90's tanking company stocks and reputations then buying em up under the guise of saving them only to dismantle em and make their profit on the sale of the scraps? yeah they made money removing jobs.
Organizing is difficult. Wealth is created because they are able to appropriately organize people into the jobs they are most efficient. They are able to get people to work harder, produce more, and more efficiently use resources. You might not think efficiency is moral but it does result in a higher quality of life across the board. Why are tech companies currently the darlings? Because each was able to find efficient ways to do things, communicate, search, or combine or improve existing technologies. Instead of printing every book they can just be downloaded and on the same device you make calls. It isn’t a natural process, it requires leaders to make things efficient in order to make money. No one should care about “jobs” because they mean nothing. If one person could produce all the food needed to feed the world then we don’t need jobs. That is the progress these people bring and that is the only reason they are able to make money, by improving efficiency. If you are saying their are ways to make money that don’t improve efficiency, obviously that is true but rare, and even if the case where someone tanking company reputations, the owners of the company are not required to sell, look at Tesla which had the most short sellers of any company and a constant barrage of negative articles but that was all able to be overcome by Tesla’s owner Elon Musk.
Virtue should be paying your goddamn taxes, and donating the rest to the government (i.e. destroying it, to offset other inflationary measures the people elect to enact).
Anything else is either an affront to democracy, or at best is is morally neutral. E.g. what this guy did is morally neutral, and only good relative to the Carnegie knockoffs trying to launder their reputation.
Is there something virtuous about hoarding wealth?