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The spacex IPO has happened and made Elon Musk a Trillionaire.
There are probably hundreds of potential topics from this story, feel free to go off on your own tangents.
What I am interested in is that this is a company that is building real world things, and not fake internet shit. It feels like a lot of new wealth and investment in America comes from and is directed to the internet. I think one of the main reasons has been that large investors are generally play-it-safe followers. They see which companies are newly striking it rich: Facebook, Amazon, Netflix, Google, Apple, etc. And they are happy to invest in copy-cats.
I'm hoping the spacex IPO has a similar effect. That investors start chasing new copy cats. But this time copy-cats of spacex rather than copy cats of facebook or google.
From what I can gather, the consensus on the left side of the political spectrum in the USA is that it's a great injustice that there exists a trillionaire in a world where there exists poverty. Now, there are a lot of implicit beliefs and values mixed up in such a judgment, such as the false notion that it would be possible to fix world poverty or even USA "poverty" with a trillion dollars in cash and that it would be possible for Musk to convert his net worth into a trillion dollars in cash (at its limit, people literally seem to believe that Musk has a bank account somewhere with 13 digits on its balance, claiming that he's "hoarding" the wealth, as if that wealth isn't actually in the form of various companies that are functioning to produce and sell things right now). It seems like it's mostly driven by a hatred of inequality and a desire to collect one's pound of flesh.
Which I think is perfectly reasonable. One of the many reasons Musk is able to have such a high net worth is the fairly dependable capitalist system that we all uphold and partake in, and demanding that he pay the government a fee for the sole reason to appease our envy, even at the cost to overall prosperity and wellbeing of humanity might not be ideal, but it's not unreasonable.
But, as many people have pointed out, Musk - and any billionaire - has most of his assets in productive companies, and the productive nature of those companies is what makes them so valuable, and so liquidating them to put more money in the government coffers would both be logistically very difficult and also likely destroy a lot of value. If the government were to take shares away from Musk to take partial ownership of his companies, that would also likely destroy a lot of value, both because some of the value is tied to Musk being the owner and because the government is likely to have lower ownership skills than the typical private owner. Furthermore, since Musk's - and, again, almost any billionaire's - net worth is defined mostly by the market price of shares of his companies, which are volatile, it's difficult to even figure out the correct value of his net worth to use for any sort of wealth tax.
So I'm left wondering what sort of wealth tax could be implemented, in a way that doesn't destroy too much value while still being meaningful enough to appease the envious (though some may argue that the limit does not exist for that one). It would probably have to take some sort of rolling average of net worth over a period of time, the tax would have to be something like in the form of non-voting shares, and perhaps we'd need to create a ton of new government bureaucracy jobs to manage the logistics of all of that. In effect making almost any company above a certain value automatically partially nationalized. It would have to be progressive without some sharp cutoff point so that there's no single value that any company owner is motivated to keep under. We'd also likely need to have laws around giving shares to family members in order to skirt around the wealth tax - either that or just accept the creation of essentially an aristocracy where successful company owners keep sharing their wealth with more and more family members while still being de facto owners in order to minimize their wealth tax burden. Along with a bunch more government jobs to enforce this.
Of course, I heavily doubt that any of the collected money would have meaningful impact on solving poverty. On net, with the additional government costs and the reduced income tax collections from the employees of these companies, it might actually leave less money to fight poverty than just the current system as-is. But that's not the point, the point is to take money away from really rich people.
I'm not an economist, so I'm probably missing a lot of things. Does anyone have any good ideas for how the USA could implement this without causing too much economic harm? Would be especially good if it could stand up to Constitutional scrutiny as well (of course, the Constitution can always be changed or ignored, but both tend to create a lot more friction and pain than otherwise).
A tax that could be implemented without actually destroying much value is requiring sufficiently large companies to employ worthies in well-paying sinecures. That is, presumably, the actual demand when you boil it down; much of the left side of the spectrum's representation is about how unfair it is that their degrees in fan fiction from a communist's ass don't automatically result in a high standard of living. Of course, that doesn't mean the median leftist believes this; most presumably are not the twitterati socialists who believe they should have a comfortably above median standard of living without doing any actual work, on the strength of their ideological purity(mostly expressed through degree-having). But the twitterati socialists are the representation to the public, and their enoblement would calm the rest of the leftists because they would no longer have an amplifier to their concerns.
The ringleaders, though, are doing just fine -- Bernie has several houses and a net worth of about $3M, whereas Warren's net worth is estimated at $12M.
Which is upper-middle-class wealth in a country as rich as America. I don't think there is anything surprising about, or wrong with a successful politician being upper-middle-class.
Taking Warren's $12 million net worth estimate at face value, this website calculates her wealth as being in the 98.5th American percentile. I guess she can still reasonably claim to be fighting against "the 1%"
Donald Trump was (probably - it is hard to be sure given how much he lies about his financial status) a billionaire when he announced he was going to fight against elites on behalf of the common man. I find his claim about as plausible as Warren's, but the target audience eat it up in both cases.
FWIW, the anti-super-rich lefties I see have stopped talking about "the 1%" and now talk about "the billionaires" which is a much smaller group. Too many upper-middle-class lefties are worried about the leopards eating their faces, I suppose.
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$12M is close to top 1% in wealth. $3M is 94th percentile. This is not the upper middle class.
Does this include her congressional pension?
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"Close to, but not in, the top 1%" is precisely what upper middle class means.
Also, wealth tends to accumulate over time. So "upper middle class wealth" for a 76-year-old like Warren is a higher dollar amount than it would be for us.
The only people who think that the upper class starts at 99% are people between 90%-99% who don't want to face the reality that they aren't middle class. "No officer, you don't understand, I'm only at 98.5%ile."
British usage assumes a pyramidal society, so there are more working class people than middle-class people and more lower middle than upper middle. To be considered upper class you traditionally needed to have a social network that includes hereditary peers, so upper-middle class stretches a long way up the income scale. A big 4/MBB/Magic Circle partner would definitely be considered upper-middle class, not upper (unless they were upper for family reasons).
In America, everyone except the underclass and the super-rich considers themselves middle-class. Americans don't generally use the term upper-middle class, but the term middle-class is used by both the people themselves and politicians appealing them to cover everyone from a plumber to a HENRY, and upper-middle class refers to the top echelon of that huge group. Paul Fussell's Class (published 1982 so somewhat out of date, but I am not aware of any book since which attempted to define upper-middle class in the US context) gives doctors, lawyers, small town real estate developers and middle-to-VP level managers at large companies as paradigmatically upper-middle class. Warren's $12 million accumulated over a successful career would be well within the achievable range for those professions, though probably above average.
The only time I have seen the words upper-middle class used seriously in an American political context was to describe the people on incomes of $250k-400k who might or might not benefit from Obama's partial extension of the Bush tax cuts, which is also close to but not in the top 1% and given the rising stock market since the Obama era seems consistent with a net worth reaching $3-12 million today.
The algorithm I use that works in any rich country:
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