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How does that work? Surely you have to pay it back or you lose the asset so you can’t just use the cash you’ve raised to fund your living expenses.
Pay it back with revenue, so it's an outgoing from whatever vehicle borrowed the money, so not taxable
None of the money will ever go in Elons current account it'll all be pushed around holding cos etc. His house will be owned by Tedla tax evasion plc, his car by Spacex griftocrypto Ltd etc...
If you want a more drawn out argument for a wealth tax read Thomas Piketty's "Capital". It is long, but I found it interesting. For Piketty, dealing with wealth inequality is the reason for a wealth tax. He presents a wealth of data, but one thing that stood out for me is that seriously wealthy individuals and institutions (he looks at the dazzlingly well-endowed US universities) can achieve several percent more return on their investments than the rest of us. His wealth tax proposal is based on levelling the investment playing field in that respect.
I cannot recall whether pension funds etc count as dazzlingly well endowed for this purpose. There is a difference between being a fund manager with one investor and one with millions (not least in regulation).
Critics of Piketty argue that whereas his research into the history of capital ownership and the earnings therefrom in history in various countries is top notch, his arguments from then on are a bit hand-wavy. I am not really enough of an economist to take a firm position here.
I guess the above also gives a flavour of what some economists do, there is more to the discipline than the sort of ecomomics we tend to see a lot of in the media. Piketty regards himself as a particular type of social scientist, and thinks that all economists are in fact that. (I have made this point about the nature of economics on here before).
I've just started Piketty's Capital. In the fist chapter he presents an equation which pretty much encapsulates where we are with inequality today.If you want a more drawn out argument for a wealth tax read Thomas Piketty's "Capital". It is long, but I found it interesting. For Piketty, dealing with wealth inequality is the reason for a wealth tax. He presents a wealth of data, but one thing that stood out for me is that seriously wealthy individuals and institutions (he looks at the dazzlingly well-endowed US universities) can achieve several percent more return on their investments than the rest of us. His wealth tax proposal is based on levelling the investment playing field in that respect.
I cannot recall whether pension funds etc count as dazzlingly well endowed for this purpose. There is a difference between being a fund manager with one investor and one with millions (not least in regulation).
Critics of Piketty argue that whereas his research into the history of capital ownership and the earnings therefrom in history in various countries is top notch, his arguments from then on are a bit hand-wavy. I am not really enough of an economist to take a firm position here.
I guess the above also gives a flavour of what some economists do, there is more to the discipline than the sort of ecomomics we tend to see a lot of in the media. Piketty regards himself as a particular type of social scientist, and thinks that all economists are in fact that. (I have made this point about the nature of economics on here before).
r > g
Where r is the annual rate of return on capital (profits, dividends, interest, rent) and g is the rate of economic growth (income and wages). When the return on investments consistently outpaces overall economic and wage growth, inherited or accumulated wealth compounds faster than people can earn money through labour meaning that the rich will end up owning everything which is essentially Gary Stevenson's argument.
The only time in recent history when working has brought a greater return than capital is 1945-1970s when strong unions, government regulation and high taxes on super rich ensured asset wealth was kept in check. This is a historical blip and is now coming to an end. If something isn't done we're going to end up back in the Gilded age.
How does that work? Surely you have to pay it back or you lose the asset so you can’t just use the cash you’ve raised to fund your living expenses.
I think its called "Buy Borrow Die".
Here's JP Morgan explaining how the rich can use it to accumulate more and more wealth over generations...
How does that work? Surely you have to pay it back or you lose the asset so you can’t just use the cash you’ve raised to fund your living expenses.
I think its called "Buy Borrow Die".
Here's JP Morgan explaining how the rich can use it to accumulate more and more wealth over generations...
that’s a good summary of it. In simple terms it works because asset values rise faster than the rate of interest on the borrowing. Hence it’s always on the interest of the ultra rich to keep pushing asset prices up.
No wonder they are so against a wealth tax, the whole house of cards colapses
In addition, if Elon Musk or Jeff Bezos ask a bank for a loan they are going to get a considerably better interest rate than you or I.How does that work? Surely you have to pay it back or you lose the asset so you can’t just use the cash you’ve raised to fund your living expenses.
I think its called "Buy Borrow Die".
Here's JP Morgan explaining how the rich can use it to accumulate more and more wealth over generations...
that’s a good summary of it. In simple terms it works because asset values rise faster than the rate of interest on the borrowing. Hence it’s always on the interest of the ultra rich to keep pushing asset prices up.
BTW Jeff Bezos' Amazon salary is still $85,000 and he legally claimed and received a Child Tax Credit for his children on his 2011 federal income tax return.
He is heading in the right direction of wealth tax but it is not as simple as that.
My question is how much wealth is enough?
He is heading in the right direction of wealth tax but it is not as simple as that.
My question is how much wealth is enough?
we could start by asking the royal family or the Duke of Westminster. How about the Church of England that’s worth a fortune, its investment fund is valued at £11.6billion earning over £200m a year
I read this morning that the latest asset to own is a T rex fossilised skeleton. Just another asset to be aquired. It will no doubt spend its life in a a bonded warehouse, like so much art owned by the rich, at a free port so the owner doesn’t pay vat or import taxes on it
take a listen to one of the latest rest is politics with gabriel zucman. might be a 'leading' edition, thinking about it. he's in a similar vein to stevenson and they have collaborated. similarly, he argues that it's not a total solution, and estimates a wealth tax on the richest would raise ~ 5bn. not masses but not nothing. particularly as i heard on the radio just now that burnham faces a 5bn black hole...
the fact of the matter is that as US corporations have had an extractive effect on a lot of the other western economies, the extremely wealthy have had an extractive effect on all of us.
that’s a good summary of it. In simple terms it works because asset values rise faster than the rate of interest on the borrowing. Hence it’s always on the interest of the ultra rich to keep pushing asset prices up.
isn't this basically an endowment mortgage?
Not seen the program yet, but ive noticed a massive uptick in Dubai bellends and "property mogul" plonkers on the social media, slating it. its clearly touched a nerve.
Not sure a "wealth tax" is the best answer, rather just junk the whole system and start again with something with less loopholes and broadly fairer.
OK, so there's a lot of money in the UK economy, but a very high proportion is tied up and bundled away, and not in distribution and working
One of Garys key points is that that isnt how it works. It doesnt need to be "liquid" to be able to leverage against it.
Loads of money tied up one way or another is still able to be used as collateral to get loans and investment.
the interest rate on the loan is nothing compared to the interest on the assets.
Free money.
Theres a short video knocking aound that purports a welathy dude bought an entire apartment building in NY on a credit card, which means he got a couple of % cashback on the purchase AND he had 30 or 60 or so days to pay it off interest free, so he kept hold of the money for a further month or two, and the interest on that was in itself hundreds of thousands.
they say that socialists run out of other peoples money, when in reality its the wealthy capitalists who spend other peoples money, rather than their own.
One of Garys key points is that that isnt how it works. It doesnt need to be "liquid" to be able to leverage against it.
This. People are doing it all the time. They just aren't doing it to pay their share (and they should be).
An annual property tax has to happen. I'm also fully behind a windfall tax on all assets. What I'm not sure about is an annual general wealth tax, because within a few years it'll just be avoided... and avoided in a way that harms us as a nation more than it'll inconvenience those rearranging their wealth.
this is a solid explantation, (as far as i can tell)
https://www.tiktok.com/@thedailyshow/video/7095862535882231086
honestly i wonder if its cultural. Someone will always find a loophole, even with a government that is trying, someone will work out an exception thats been left open with good intentions.
It should be a point of pride to pay your taxes to the spirit of the intention, rather than the letter of the law. We should have an annual honours list that rank businesses and individuals that do, and shames those who dont.
It is fairly cultural, most people around the world pay their taxes and just accept it as something that is required. If everyone was able to dodge taxes using all sorts of different methods the country simply wouldn't be able to function.
Selfish people don't want to pay taxes as long as they are doing all right - see many rich people and Americans for examples.
