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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).
It's an interesting problem, and I'm convinced this is going to be one of the largest issues facing society in the years to come, but at least I cannot think of any easy solution.
On the first hand, I broadly believe that wealth inequality is not a problem in and of itself - it makes no particular difference that someone else has much more than I do, as long as I have what I want and need myself. To an extent where it is a problem, in that wealth allows for the concentration of power, I've always thought that it was merely a symptom of the immutable fact that increasing technological progress allows for the increased centralization of power. If there was someone capable of expropriating the wealth of the billionaires, it merely means that that someone else has expropriated their power - the government can exert much more control than any private capitalist ever could.
On the second hand, empirically the median person really does not like experiencing wealth inequality, especially in the modern social-media driven age of envy. It's easy enough to say that if everyone was an enlightened buddha, then wealth inequality would not be a problem, but it's much like saying that resource allocation would be easy if everyone simply got along - simply impossible in practice. If it were possible to burn value in order to satisfy people's lizard hindbrains and improve social cohesion, I'm becoming more convinced that this would be a good thing, even if it were not optimal in terms of resource allocation.
On the third hand, it really does not seem like there's any level of reduced inequality that would actually satisfy the median person without ruinous consequences. Complaining about billionaires and trillionaires is a useful Schelling point, but in practice I do not see that "mere" centimillionaires worth 999 million are any less targets of jealousy - in practice most people are just envious of anyone with more than them, while believing that they're all fully deserving of what they themselves have. As others write below, there are many countries which already implement wealth taxes and/or have lower Gini indices than the US, but it doesn't seem to have meaningfully reduced the inherent envy that people feel towards those with more than them at all.
I feel like there's an empathy gap going both directions left-and-right with this kind of thing. In terms of economic value, the left is fine with doing just that (though arguably the left isn't fine with being fine with just that - hence why a lot of the beliefs are dressed up and obfuscated as not being fundamentally about envy), destroying value for the purpose of increasing equality. And in terms of criminal punishments, the right seems to be fine with slaking the bloodthirst of those who want to impose suffering on violent criminals, even possibly at the price of more suffering than necessary to innocents, as well as less optimal resource allocation. I don't think we know exactly why, but irrationally or pre-rationally, people really really commonly really really hate inequality and really really love imposing suffering on violent criminals. It seems reasonable that society be structured to satisfy these preferences to some extent, as one of many competing priorities that any functioning society must balance. Of course, the devil's in the details in how much we prioritize these preferences over others.
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