We could get rid of capital gains tax and tax it as normal income. We could also get rid of like kind exchange. This money could be used to lower or eliminate income taxes for the poor. It is all about incentivizing how we want capital to be invested for the benefit of society. Today we've decided that shareholders are primary for public companies. The stock market is at all time highs but it comes with a cost.
How about we abolish all taxes and just tax the total wealth? That will give people the incentive to work as opposed to making a quick buck and retiring.
How many people are looking to make a quick buck and retire? The people who are billionaires are billionaires because they are super competitive and super hard workers. Gates, Bezos, Jobs - you think they worked 8 hours a day when they were growing their companies? No, those guys are driven to succeed and that doesn’t just go away when you make X dollars.
- Benefitting by an initial position of advantage. Most often family or nation of origin, though gender, race, or religion also. "Winning the birth lottery".
- Benefiting by externalities.
- Exploiting monopoly advantage.
- (Frequently) Lobbying for advantage.
- (Frequently) Engaging in illegal activities.
- (Frequently) Engaging in unethical or exploitive activities.
There are numerous super-competitive hard workers who are not billionaires. Some were unlucky, some born in the wrong place or time, some burdened by consscience or ethics, some crushed by existing monopolies or entrenched interests.
I hate this argument. There are 20 billionaires in Africa, you’re saying they had an advantage of race and country of origin? 4 in Vietnam. 6 in Peru. 27 in Thailand. Your argument is another “blame the system / white men are evil” argument that just doesn’t hold up when put against facts.
> There are 20 billionaires in Africa, you’re saying they had an advantage of race and country of origin.
You conveniently skipped over the part where the comment you're responding to said "family or nation of origin". If anything, more billionaires in 3rd world countries got their wealth through corruption and family connections. Take the top billionaires in Africa:
1. Aliko Dangote: see "Family and Personal Life" on his Wikipedia page, which includes "He is the great-grandson of Alhaji Alhassan Dantata, the richest West African at the time of his death in 1955."
2. Nassef Onsi Sawiris: His Wikipedia entry starts with "is an Egyptian billionaire businessman, the youngest of Onsi Sawiris' three sons". Onsi Sawiris was a billionaire.
3. Mike Adenuga is more self-made, but even then, "his mother, Omoba Juliana Oyindamola Adenuga, was a businesswoman of royal Ijebu descent."
There are other more notorious examples from that list of billionaires, like Isabel dos Santos.
I'm interested to see how you re-evaluate your argument "when put against facts".
Lol, no. "Often or always" is used by people who realize the world is rarely black and white.
It's weird, you're arguing against a point that no one else is making. Of course there are many billionaires whose individual intelligence, innate gifts, hard work and diligence were crucial to them earning their fortune. Just as obviously as there are many billionaires who earned their fortune through family, connections, graft, etc. (It's also pretty easily arguable the majority of the wealthy earned their money this way, given that for every "self-made" rich person there are usually loads more family members/connections who inherit or benefit from that wealth).
But the larger point is that nobody makes their fortune in a vacuum - even all these "self-made" rich relied upon the structures of their society to enable their wealth accumulation, so it seems more than morally fair that that society has a claim to some of that wealth so the next generation can reap the same benefits. Just look at all the Internet billionaires, or billionaires who rely on GPS. Both the Internet and GPS were created by the government, and it seems fair to me that the government take a chunk of the wealth enabled by the enormous investments into those systems.
You named 3 of the 20 I listed. What about the 138 in India? All from warlords and inheritance? Mark Cuban? Elon Musk? Warren Buffet? Larry Ellison? Steve Jobs? Steve Mozniak? Ted Arison?
The continent of North America, with a population of 579 millions, has by my reckoning 672 billionaires.
Africa with a population of 1,216 millions has ... about 20 as you state (my tally from Wikipedia is 18, but I'll take the higher number).
By billions of population, that works out to 1,160/billion North America, and 16.4/billion for Africa.
It would seems odds might somewhat favour one born (or living in) North America. By a factor of roughly 70.
One might similarly compare Germany and India, with roughly similar counts of billionaires at 107 and 102, respectively, though slighly differing populations: 83 millions vs. 1.3 billions. The rate per billion works out to 1,289/billion for Germany and 75/billion for India, differing by a factor of 17.
There’s 300 oil billionaires in Saudi Arabia and ZERO in bordering Israel!!! C’mon, you are not trying to argue that every country/continent is completely identical in terms of economic development and access to resources, are you?
Your argument was that Africa and US should have the same billionaires per capita which is crazy, cause as I point out, a country/continent has or lacks certain natural resources that make extreme wealth possible.
I've apparently failed to communicate clearly. That is not at all my argument.
The assertion to which I ras responding, and disputing, was your statement: "The people who are billionaires are billionaires because they are super competitive and super hard workers."
There is the real issue of people holding onto illiquid assets which are difficult to monetize. E.g, the phrase "land rich, cash poor" comes to mind. Selling off small portions of land, or renting out a bedroom at a time, are difficult for logistical or regulatory reasons.
Not that I disagree with your sentiment. Just, there are non-trivial problems w.r.t. taxing wealth, as opposed to taxing income (which is probably already being paid in fungible, liquid, dollar bills).
In the US, up to $3k in losses can be deducted per year, the rest carries over and is eligible to be deducted the following year at the same $3k cap and with the same carryover rule.
I think removing the capital gains tax is a horrible idea.
Firstly, there are 2 types of capital gains. Short term gains are just taxed as normal income and long term gains are taxed from 0,15,20% depending on your bracket.
The whole purpose of lower taxes for longer gains is to incentivize longer term investments, encouraging people to stay in the market longer since any "lesser gains" could be offset by the lower taxes, and also fostering a much healthier type of growth as opposed to a quarterly focus.
If anything, I think short term gains should be taxed more. I think the current environment is quite unhealthy, with lots of speculation and people just getting a quick buck selling options on Tesla week to week.
The problem here is that when an "investor" "earns" a rate of return due to capital gains, we ought to recognize that these gains are not due to capital performing useful work (e.g., capital used to found a business) but are the result of speculation. Whether the speculation is long-term or short-term is immaterial. Because of this, aside from the company's IPO, stock market "investment" ought to be discouraged in favor of useful investment. Therefore I see no reason to tax capital gains at a rate lesser than that of income.
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