1. why have a wealth tax? we should tax unearned wealth because the presence of unearned wealth disincentivises workers who would otherwise contribute to society. when we tax unearned wealth, the remaining wealthy people are people who have earned their wealth; and so we send a signal ‘the best way for you to be privately wealthy is for your work to align with public utility maximisation’ which privately incentivises work which helps increase utility.
unearned wealth includes: hereditary wealth, wealth due to being at the right place at the right time (you just so happened to buy a tract of land that contains your nation’s entire supply of unobtanium / you just so happened to found a company that became the dominant news outlet for the entire world when other similar but less well timed companies failed)
on my original point about monopolies: monopolies are a special case of ^above. The loss of utility due to monoplies is recognised by economists as deadweight loss.
2. why will [countries where the game-theory supports the creation of ultrarich people] never have a wealth tax because pirate games? Suppose a whole bunch of us got together and demanded that wealthy oligarchs pay a wealth tax. the wealthy oligarchs could instead take a small amount of money and bribe 51% of us to defect, while keeping their money piles. therefore we will never have a wealth tax. re [countries where the game-theory supports the creation of ultrarich people]: nicky case’s wonderful interactive game theory primer tells us that the specific payoffs/noise in zero sum games decide which strategies (cooperate, defect) tend to survive. I suspect countries with ultrawealthy tend to have payoff/noise combos that result in dominant strategies that would participate in pirate games
but hang on, what about the democracies that do have wealth taxes? > Norway recently tried to increase their wealth tax. a whole bunch of rich people left Norway. I do not constitute this as a successful raising of the wealth tax > [wikipedia] at its peak, only 12 countries have a wealth tax, representing as a whole less than 6% of global GDP; they are exceptions not rules (Austria, Denmark, Finland, France, Germany, Iceland, Italy, Netherlands, Norway, Spain, Sweden and Switzerland)
3. what to do instead? marry rich this is not easy. EA consultants are in some ways marrying rich people.
Paying the (ongoing, repeated) pirate-game blackmail (“pay us or we’ll impose a wealth tax”) IS a form of wealth tax. You probably need to be more specific about what kinds and levels of wealth tax could happen with various counterfactual assumptions (without those assumptions, there’s no reason to believe anything is possible except what actually exists).
less than 6% of global GDP; they are exceptions not rules (Austria, Denmark, Finland, France, Germany, Iceland, Italy, Netherlands, Norway, Spain, Sweden and Switzerland)
It is 16%, not 6%.
(Approximately, Germany is 4.7% of global GDP, France is 3.1%, Italy 2.2%, Spain 1.5%, Netherlands 1.1%, Switzerland 0.9%, Sweden 0.6%, Austria and Norway 0.5% each, Denmark 0.4%, Finland 0.3%.)
we will never have a wealth tax because pirate games, so marry the rich v2
original: https://www.lesswrong.com/posts/G5qjrfvBb7wszBgWG/daijin-s-shortform?commentId=4b4cDSKxfdxGw4vBH
1. why have a wealth tax?
we should tax unearned wealth because the presence of unearned wealth disincentivises workers who would otherwise contribute to society. when we tax unearned wealth, the remaining wealthy people are people who have earned their wealth; and so we send a signal ‘the best way for you to be privately wealthy is for your work to align with public utility maximisation’ which privately incentivises work which helps increase utility.
unearned wealth includes: hereditary wealth, wealth due to being at the right place at the right time (you just so happened to buy a tract of land that contains your nation’s entire supply of unobtanium / you just so happened to found a company that became the dominant news outlet for the entire world when other similar but less well timed companies failed)
on my original point about monopolies: monopolies are a special case of ^above. The loss of utility due to monoplies is recognised by economists as deadweight loss.
2. why will [countries where the game-theory supports the creation of ultrarich people] never have a wealth tax because pirate games?
Suppose a whole bunch of us got together and demanded that wealthy oligarchs pay a wealth tax. the wealthy oligarchs could instead take a small amount of money and bribe 51% of us to defect, while keeping their money piles. therefore we will never have a wealth tax.
re [countries where the game-theory supports the creation of ultrarich people]: nicky case’s wonderful interactive game theory primer tells us that the specific payoffs/noise in zero sum games decide which strategies (cooperate, defect) tend to survive. I suspect countries with ultrawealthy tend to have payoff/noise combos that result in dominant strategies that would participate in pirate games
but hang on, what about the democracies that do have wealth taxes?
> Norway recently tried to increase their wealth tax. a whole bunch of rich people left Norway. I do not constitute this as a successful raising of the wealth tax
> [wikipedia] at its peak, only 12 countries have a wealth tax, representing as a whole less than 6% of global GDP; they are exceptions not rules (Austria, Denmark, Finland, France, Germany, Iceland, Italy, Netherlands, Norway, Spain, Sweden and Switzerland)
3. what to do instead? marry rich
this is not easy. EA consultants are in some ways marrying rich people.
Paying the (ongoing, repeated) pirate-game blackmail (“pay us or we’ll impose a wealth tax”) IS a form of wealth tax. You probably need to be more specific about what kinds and levels of wealth tax could happen with various counterfactual assumptions (without those assumptions, there’s no reason to believe anything is possible except what actually exists).
Thank you for this insight!
It is 16%, not 6%.
(Approximately, Germany is 4.7% of global GDP, France is 3.1%, Italy 2.2%, Spain 1.5%, Netherlands 1.1%, Switzerland 0.9%, Sweden 0.6%, Austria and Norway 0.5% each, Denmark 0.4%, Finland 0.3%.)
Applied to a local scale, this feels similar to the notion that we should employ our willpower to allow burnout as discussed here