Re: Wealth and the Art of Avoiding Taxes

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> >   Hmm... I have problems with that model. Let's say I give you $100
> > million dollars (yeah, I'm a giving kind of guy!)... now you have done
> > nothing to earn that money. Does that make it any less yours that you
> > should do what you would like with?
>
> Certainly it affects my fairness arguments.  For a fuller understanding I
> would have to know where the $100 million came from.  Say, for example, it
> was from drug dealing; in that case even under the current laws that entire
> $100 million could be taken from you, and if you knew its origins you
> arrested.

  Mmm... let's say, I just happened to write a killer software application, 
had made several big book deals, and had stumbled on an original Rembrant. 
;-) 

> >   Now, let's consider someone who, through skill or the ability to fake
> > such, landed a some nice cushy exec jobs, got a few golden parachutes and
> > comes out with $100 million. He probably hasn't given much to society,
> > but does he really owe "society" a huge hunk of the money he has earned?
>
> Nobody is earning $100 million for that, and that is the point.  If someone
> manages to arrange for corrupt friends to be appointed to the board, and he
> manages to steal through their "approval" that much in corporate assets,
> then I guess it is up to the shareholders to bring a lawsuit.

  Don't be so sure. I know someone who did indeed make the better part of $100 
million from stock options in a golden parachute. They didn't have friends on 
the board either.

> So the better question to ask is, has he really "earned" that money, as you
> assumed in your question?  What does someone need to do to earn $100
> million? How much did Jefferson, Newton, Einstein, etc. - the people who
> made truly great contributions to society - "earn"?

  Not much, unfortunately. But, I think that is beyond the point. 

> >   What about the brilliant inventor who patents a tool that fixes
> > anything around the house. Through blood, sweat, and tears the inventor
> > makes $100 million. Does the inventor owe society the same hunk of money?
> > If not, because he did something useful, how should we judge what is
> > useful and what is not?
>
> If he makes money off sweat and blood that is a different category, though
> I do not believe you make $100 million off that, so at some point he is
> making money off monopoly (patent rights).  In the end all the money he
> makes is possible only b/c of society - were he living alone on the planet
> he would earn nothing of the $100 million.  This person has effectively

  Nor would it do him any good. ;-)

> exploited society's rules, that much is for sure, but the reward for this
> exploitation is not.

  The question, then, is whether that is always wrong. I don't think so. I'm 
all for weakening patents -- IMO, they should have price gouging protections 
built in (i.e. either get a patent and charge a fair price or don't get a 
patent and charge whatever you want)... but I'm not sure they are always an 
"exploitation."

> Anyway you are raising red herrings IMO.  The facts are far more simple
> than you imagine:  the really big money is inherited, not earned in any
> possible way you might imagine (other than perhaps having to hire someone
> to invest the money you inherited).

  Well, not the person who shall go unnamed with $100 mil. in the bank. He 
started off as a tour guide on bus trips. No inheritances involved (at least 
of any noticable amount -- maybe some aunt left him $800 or something :-)).

> >   The big investor may not give a lot to society, but actually he does in
> > less obvious ways. Let's say you buy into a mutual fund. If not for the
> > big investors, stocks probably wouldn't go up nearly as much and thus
> > funds wouldn't go up as much. For that matter, without investors there
> > would be no mutual funds, since someone must invest the money! Should the
> > investor get to keep the money he has earned?
>
> You keep using the moral-laden term "earned".  Earned how?  That is the
> question.

  Buying the right stocks, selling the bad ones. Studying what will be the 
next big thing and what is almost about to be the next bad thing...

> Clearly you believe in a class system.  The master who has to make the

  No, I clearly don't. I just don't believe the government should help level 
things out. If I have a bunch of money, tax me on interest and let me do with 
it what I will otherwise.

> decisions on how to employ the serfs in the fields or in battle - i.e., the
> elite who invest in stocks and start wars - have "earned" their state as
> masters, according to your logic, b/c they elect to exercise the power that
> is their birthright.  If you want to buy into servitude, that is certainly
> a choice people make, but to cover this decision in inapplicable words like
> "fairness" and "earned" and "deserve" really shows a fundamental
> misunderstanding of how the world is controlled.

  Well, a lot of that goes with my disagreement with your theory concerning 
the TLC, CFR, etc.

> Speech is free; power isn't.  And I wasn't against the censorship of
> "offensive material", as you put it, I was against the censorship of
> speech.  I personally don't believe pornography is "free speech" and am not
> worried about the "page three girls" or whatever smut is being used.  But
> the EU draft regs went beyond that supposedly to ban depictions of women in
> "stereotypical" roles, so for example some ancient text might be banned
> under them b/c they depict women as being homemakers or something of that
> nature.

 Right. That is indeed bad, I agree that it goes far too far (sticking to 
censoring "page three girls," as you put it, would be fine by me though). 
 

> Generally speaking, there are two types of property:  personal and capital.
>  How someone wants to use their personal property is not an issue in this
> debate; however, capital is, for capital represents social power.  The
> question for me is one about power in society, rather than the more general
> question of money in society.  How much money - i.e.. power - should one
> person have by virtue of birth, and how disempowered should another person
> be by virtue of birth? 

  IMO there should be no set limit... well, I mean, no one should be pennyless 
ideally, but on the other end, the sky should be the limit. If nothing else, 
go ahead and tax the people to bits while they are alive, but once they've 
paid the taxes don't tax them again on death.

> Concentrations of capital are inimical to a free society.  The more
> concentrated is capital, the more concentrated is power, the less
> democratic the society, and this is something which already was clear to
> the Founding Fathers as well as most leaders prior to the 20th Century,
> when the US government became totally corrupt.  And I believe from the
> perspective of industrialized powers, the US has by far the most unequal
> distribution of wealth.

  The question is how much wealth you need spread around to avoid issues. 
There is certainly much more of a middle class in the last century than any 
time that I'm aware of prior to it.

> You still are looking at a single payment stream at one point in time and
> try to reach general fairness conclusions from that.  AFAIC the money the
> elite receives is taken by force from the rest of society, based on a
> complex set of rules but all of which boil down to private ownership of

  Is private property ownership a bad thing?

> property as well as inheritance.  You either choose to play by these rules,

  So, what would you propose to do with people's property when they die?

> > You may not
> > like the richest 1%, but why should our feelings toward them mean that
> > they should be expected to carry a heavier load of the Government's
> > costs?
>
> Who said I don't like the richest 1%?

  I just inferred that based on your statements concerning the stunningly 
wealthy.

> And the point is they don't carry a load, they don't do squat, they simply
> get money by virtue of existing.  Like my Waltons example.

  Well, as I said, tax them on interest. I'm not against even a capital gains 
tax, just make it fair. Right now, it isn't fair, imo.

> If you are truly concerned about fairness to the individual, you should
> question why Mr. Walton is born with $5 billion and Mr. Johnson with
> nothing.  You should ask why Mr. Walton should get a tax-free annual income
> of $500 million, for the sake of doing nothing, while Mr. Johson, who works
> his butt off his entire life, must pay taxes on the income he earns and has
> no health insurance.  

  I think the thing here is there is no "inalienable right to health 
insurance, a nice job, and enough money to do whatever I want." There is the 
right to persuit happiness... no guarantee of it.

  And, for that matter, don't think that Mr. Walton is actually happier than 
Mr. Johnson. If you are around the rich much, you will quickly learn many 
(most?) of them are miserable and unhappy. 

  Money isn't everything as the saying goes.

> Indeed if you look at fairness to the individual
> there are many aspects of the distributive justice which strike me as
> grossly unfair, whereas even if Mr. Walton were taxed on 95% of the income
> he does nothing for, I would not consider that in any manner "unfair" (of
> course if he takes a job with the company, and actually does something,
> then that income should be treated just like Mr. Johnson's, but then Mr.
> Walton will have worked for it).

  The problem with that is insuring that you don't let Mr. Walton get through 
on a loop hole by getting a job that consists of sitting in his office and 
looking important. Suddenly every Wal-Mart major investor has a office and a 
title... and nothing is gained.


> If life is not fair I don't see why you are worried about the fairness of
> taxing the idle classes, to such a great extent that you would try to
> parcel up a complex series of transactions into a simple moment and judge
> fairness based on that.  It is as if trying to judge the fairness of family
> member A asking family member B to clean up some mess without knowing more
> about the total relationship - who made the mess, who benefits from
> cleaning it up, who already contributes what to the family, etc. - which in
> a normal fairness inquiry you must investigate.

  I'm mostly worried about making things less fair for some by government 
interference than making things more fair to others by government 
interference. In other words, I'd like to see the least amount of government 
interference possible. 

  Well, I must stop for the night. :-)

  -Tim

- -- 
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Timothy R. Butler       Universal Networks      www.uninet.info
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