The question is how to determine the value of non liquid assets in order to implement a maximum wealth tax.
Suppose I own land or a private company or a collection of copyrights that become very valuable. Who and how determines when it crosses the $1B threshold, and how am I brought under said threshold. What if the asset is not easily divisible?
These are legitimate questions. In some ways they have analogs that have already been "solved" (perhaps not satisfactorily). Who and how determines the property tax you owe on a building or land? But I agree that these are not trivial to answer in satisfactory ways. Societies frequently have to come up with imperfect answers.
I know we can’t expect perfect solutions, but arbitrary blanket statement such as capping wealth at $1B make no sense to me.
Wealth (or money) is a proxy for power, and if the goal is to limit one’s power, I don’t see the purpose of an arbitrary dollar amount maximum that is extremely hard and probably litigious enforce to enforce.
It would be better to suggest capping the number of companies’ boards one can sit on, or limit the number of non broad market index fund investments one can have, or some other solution that directly attacks the problem of concentration of power.
And disincentivize people from working? That's not a sustainable economic system. For a properly sustainable system, consider how Islam solved this problem over 1400 years ago. Zakat is the only form of "tax" if you will that is mandated. Interest and other predatory practices are prohibited (e.g. shorting). Once the fundamentals are correct, everything else naturally falls into place. It has been reported that during the rule of Umar II, there were no poor people left in Iraq to accept Zakat (charity) since everyone paid their share. It would be nice to see that happen again, but the modern financial system won't let it happen.
One might argue that having $1B of assets (certainly liquid assets) is a fairly major disincentive to working.
High marginal tax rates on super-high levels of income and/or wealth doesn't discourage working. It just makes doing something to add another chunk to your income/wealth require something other than financial renumeration. There's plenty of evidence that humans do their best work when they have intrinsic and not extrinsic motivation.
Bezos is a case in point. I believe him to have an almost absurdly high level of intrinsic motivation (I worked with him for 15 months). He might like the wealth he has, but the things he will continue to do with his life, just like Amazon itself, get done for reasons beyond money.
> High marginal tax rates on super-high levels of income and/or wealth doesn't discourage working.
Do we have precedence for this? From what I'm aware, even when the US had high marginal tax rates which some dems seem to be calling to bring back, no one ever paid those rates because there are always ways for the very rich to reduce their income on paper, while still increasing their wealth.
I do agree with you that it takes a very special kind of person to have the wealth of Elon or Bezos and still continue to want to work, it's obviously more than money at that point. But those people are outliers. I know I wouldn't be motivated to spend more effort if it meant a proportional decrease in the total amount of money I would end up pocketing due to increased taxes.
Umar II is the one Umayyad caliph whose tomb wasn't sacked by the Abbasids when they took power. Would you care to enlighten us as to how this system went so wrong (Hint: it was Arab Muslims accumulating property and wealth over non-Arab Muslims, let alone non-Muslims)
Worse than disincentivizing people from working, it disincentivizes people from risking money on growth (building companies, doing startups, angel investing).
Interest isn’t predatory, it encourages growth and investment in building businesses. Look at the enormous wealth created by capitalism. Economic growth helps the most people the fastest, this model works.
That doesn’t mean there shouldn’t be protections on the lower bound and human rights, there should be. It also doesn’t mean there shouldn’t be environmental protections or regulations to effectively coordinate and prevent tragedy of the commons style failures. We should also prevent wealth being able to leverage political power (which isn’t easy).
It is by the very fact that the lender is owed money in the contract by doing basically nothing. Proper investment balances the risk between parties, so that one party does not have an inherent advantage over the other. This is part of running a moral and just society.
> Look at the enormous wealth created by capitalism
Red herring. The system is fundamentally unstable, by the very fact that people are on the lookout for the next economic crash because it's built into the system. When that happens, people with money are able to acquire even more assets, increasing the divide.
I'm all for people making money, as long as they do it the moral way. Interest is immoral and predatory.
The lender is paid for the service of lending money out (which incurs risk). You want to incentivize this behavior.
Without interest, it would be harder for people to get loans. Lots of financial services wouldn’t exist (or would demand some other form of payment). This would keep people who aren’t already rich unable to access capital.
People react to incentives, good incentives lead to beneficial behavior. Interest is extremely net positive, both for lenders and for borrowers (and society). Everyone wins.
Crashes aren’t really built into the system or a fault of capitalism, they happen because problems are hard to predict and the environment changes. The wealth created isn’t only for the rich: https://press.stripe.com/#stubborn-attachments everyone benefits from economic growth.
I think Islamic law (or really any religious framework) has very little of value to say on the topic of morality or running a productive society.
> The lender is paid for the service of lending money out (which incurs risk). You want to incentivize this behavior.
Not all forms of payment are ethical or moral (e.g. prostitution). This is an exploitative practice, and should definitely not be incentivized as we've seen time and time again the destructive effect it has on society and the economic system.
> This would keep people who aren’t already rich unable to access capital.
This is why Islam has Zakat laws to ensure the poor are lifted out of poverty. We keep seeing the dems trying to solve the problem by increasing taxation, but to no avail. Islam solved the problem over 1400 years ago.
> I think Islamic law (or really any religious framework) has very little of value to say on the topic of morality or running a productive society.
Morality does not exist without religion. Secondly, Islam has proven to have run one of the most successful societies of all time, and definitely the most moral since Islam came. We still benefit of the discoveries made during the Islamic Golden Age.
> "This is why Islam has Zakat laws to ensure the poor are lifted out of poverty."
Charity isn't as good as letting people get access to capital that they can leverage for themselves.
We're not going to agree on this so can probably leave it here.
I will say I think morality exists in spite of religion.
It's not hard to pick out examples where Islam fails on the morality issue, see: women's rights and the recent Charlie Hebdo murders, both driven by ideology.
As I originally pointed out, interest is prohibited in Islam, Judaism, and Christianity (at least) for a good reason. It's not ethical nor moral, in fact, it's destructive and parasitic.
> Charity isn't as good as letting people get access to capital that they can leverage for themselves.
It lifts people out of poverty to get them on their feet. There are many funds that provide people with access to capital (e.g. accelerators). Capital is not limited to interest bearing loans. The simplest example is pitching an idea to investors who in return own a portion of a potential company. If it works out, both parties benefit, otherwise, both parties equally took on the risk.
> women's rights
Those are cherry picked by anti-Islamic rhetoric drivers who have shown their ignorance and lies time and time again, and whose arguments fall apart the moment they're critically discussed. It's really meaningless talk that gets thrown around.
> and the recent Charlie Hebdo murders,
Easy refutation: you're going to have to show that Islam itself condones or required such murders to take place.
You just state it’s destructive for ideological reasons because of religious law, that’s not a good argument and it ignores contrary evidence. Why is taking a percentage of someone’s company better? If anything that’s more exploitive.
You’re the one cherry picking here and rationalizing anything that doesn’t fit into a narrative you’ve already decided is true. There won’t be any ability for us to agree, because you can’t update based on new evidence.
You can pretend Charlie Hebdo and any other negative action that’s clearly driven by ideologically motivated Islam is not “true Islam”, but then you’re just creating some special reference class that ignores the bad stuff.
I’m not trying to get into a fight. It’s rare for religious people to break free from their religion, but it’s possible. I succeeded when I was young and seeing counter arguments is part of it.
Yep, the one that guarantees women the rights to inheritance, not to mention that many other texts in Islam that order men to be lean and kind to women and not to exploit them (compare to what we see in the West today where women are sold as a commodity).
> but then you’re just creating some special reference class that ignores the bad stuff.
I'm not, because for any action that someone who ascribes to the religion does, we're able to go back to the texts and decide whether or not that was truly Islamic. There is no cherry picking or filtering. It's quite simple really. This isn't a "no true Scottsman" fallacy, it's going back to the Law books (Quran, Hadith, etc.) and checking whether what was done was legal or not.
> You mentioned accelerators - usually they operate by investing for a percentage of the company.
Yes. The trade off is that if the company fails, the accelerator loses the money they put into it, and the founder loses the time and effort. It's proper risk sharing. Now compare to a loan, where the founder not only owes the loan, but also the interest on top.
> you fear rebellion
The Arabic word is "nushooz". Look up what it means. Also, look up what "beating" means.
If someone defaults on their loan the bank gets nothing. If someone takes a loan and builds a successful business, the bank only gets the small agreed to percent return.
What you consider 'proper' is arbitrary and entirely determined by religious law.
> "Also, look up what "beating" means."
I know what beating means, this kind of denial of obviously bad stuff is one reason among many of why I find religion so distasteful. That entire section is written about how women are supposed to be obedient to men, the entire context is sexist.
With religion you start with an answer and make up reasons to get to your pre-determined answer. Outside of religion you start with evidence and struggle towards the truth.
> If someone defaults on their loan the bank gets nothing
Not before the bank coming after the assets of said person to try to grab as much as it can, destroying them in the process. Secondly, usurious money lending is obviously a very lucrative business by the fact that banks make billions in revenue. However, it is also extremely destructive purely by the fact that there exists trillions of dollars of debt (mortgages, auto, student, etc.), not to mention that the government itself is in debt and has to print money, devaluing the hard work of its citizens who worked and saved money, only to have it be worth less. Yet we cry because "the rich get richer", I wonder why?
We've already seen the effects on governments time and time again, most recently Greece and Lebanon. There is really no other way but to admit that it is a dangerous and predatory practice that benefits a relative few at the top of the economic ladder, at the expense of everyone else.
> this kind of denial
It's not denial because it is explicitly mentioned in Hadiths. We say things outright, and don't dance around the issue. Just one example: https://en.wikipedia.org/wiki/Farewell_Sermon
> You too have right over them, and that they should not allow anyone to sit on your bed whom you do not like. But if they do that, you can chastise them but not severely
You can see how it refers to infidelity.
Both the husband and wife have rights from each other, and for each other. "Sexism" is quite meaningless in this context. We're not leftists/feminists/latest fad of the day, and we're proud of it. Each sex has their rights and duties, and claiming "sexism" shows weakness in argument. You can read about many important women in Islamic history who rightfully left their mark.
> With religion you start with an answer and make up reasons to get to your pre-determined answer.
Depends on the religion. It's a blatant fallacy to group all religions together, very unintellectual to say the least.
