I don't know if this is due to their changes in moderation policy, or if AI has overwhelmed them, but I vastly preferred the old news feeds

You feed the Algorithm(tm) garbage and it returns you garbage, and somehow it's all the Algorithm(tm)'s fault.

Same experience. Then, after ignoring that, I've started getting posts from mystery people who seem like they could be aquaintences (because hobbies) but aren't -an improvement, but still off the mark.

I just want to go back to where you could use facebook to share what you're up to and see what other folks you know are up to; but apparently that's too 00's to hope for.

eg Facebook replacing people's email addresses, one wonders if it was partly a way to fight Google+ https://news.ycombinator.com/item?id=4151433

It’s been years and I’m still mildly annoyed about losing it.

My original account still exists and my face is in the videos as well but but I have no way to log in and support couldn’t or wouldn’t help me.

But do folks you know post? I’m under the impression that the slop churned out for clicks are all that’s left.

I post a lot less than I used to as well. At least in part this is because my feed is drowning in unwanted noise. Facebook's desparate attempts to wave stuff in my face 'for engagement' drive me away from posting more, so it becomes a vicious circle, driving down engagement, making people post less, round and round we go.

Maybe I'm weird, but if my friends aren't posting much, that's OK, that's what I came here to check. Instead I'm assaulted by noise, quite a lot of it either scammy or offensive.

I used to use it like a daily "here's what I'm up to today" blog, because my friends and family would see that and it was a cool way of sharing my life with them.

The, somewhere around 2014-ish, it was suddenly unsafe to post normal stuff without getting criticised. I had a whole series of arguments with folks about things that I or they had posted. I stopped posting as much, and started checking all my posts first, and deleting old ones.

Then in 2017 I got a stalker who messaged all my friends and family with shit about me. I had to make my friends list private and unfriend a bunch of people (no great loss). It felt even more unsafe.

Now I post travel pics and that's it. I miss the old safe space.

And now they have some way for "AI" to write your entire FB post for you. Which I'm sure will end well. Why think for yourself and write what you mean when you can let AI do all the thinking for you?

TikTok split screen slop is a xx million dollar business at this point so you can expect a huge investment to pump out even more slop YoY

- sex work is against Instagram TOS and they take active efforts to ban people doing it, including design features such as limiting people to exactly one offsite link per account which may not be to onlyfans

- because that's where the audience is and advertising there is effective, there's an entire industry in working out how to promote sex work on Instagram without getting banned

=> Insta ends up as part of the sales funnel despite actively trying not to be. See also Twitch. There is of course no evidence of them intentionally onboarding people into this, it's an emergent feature of being a site that posts images. Then have to censor aggressively, and even then sex work exists at a sort of "censorship shoreline".

On the other hand, Reddit and Twitter have never really cared, and only with some campaigning effort have they been made to censor nonconsensual intimate images. Twitter made its pornbot problem worse by selling bluetick promotion.

I don't especially know what these platforms could do to stem the issue, I just think it's one more reasons 13 year olds should play outside

"Stricter private messaging settings for teens To help protect teens from unwanted contact on Instagram, we restrict adults over the age of 19 from messaging teens who don't follow them, and we limit the type and number of direct messages (DMs) people can send to someone who "

With things like this, and now several states requiring that you must be 18 to use any social media, (because parents can't parent apparently?)

I wonder how much of a problem this really is?

I get it that smart teens will find ways to access naughty things no matter how many barriers are put in front of them..

But at some point we must look at parents and ask why 'children' would find it fine to spend lots of time staring at thirst traps.. I know kids that if someone was to put stuff like that in front of them they would push it away and tell multiple adults about it..

Of course I have also known parents that let their kids play grand theft auto at 6 years old.

So while I have tried to tell parents for years about what exists on game consoles and the internet and how they need to not only pay attention, but have open dialogue about sharing what they see and such.. it seems to me that most parents actually do not care what their kids see on the internets..

You could of argue that parents did not know what could be found online 20 years ago, but today's children had their parents grow up with unfettered access (most of them I believe) - and so they know and they don't care (again most I believe).

There are some vocal small groups screaming that there is a need to save the children, but I would assume most of them have kids with cell phones without any blocking systems installed.

That's not to say all. I do know a family that does not let any of their children watch TV, use the internet or cell phone - all their kids, 6yrs - 16 ..no TV even not at all and they would not even think about sneaking to use a cell phone behind their parents back.

Sadly as far as the world having a culture that onboards into sex work I believe has more to do with the rent is too damn high, food costs too much and people want designer / name brand things. If most women (and men) could easily earn a living wage within a few blocks of where they live, there would be much less onboarding period.

Sadly I have given up hoping that rent will be cut in half and wages will double anytime soon, if anything, I'd bet that if the wages double I think we'll see the same with the rent and food.

I know its progressive to consider sex work a perfectly good career choice but some of us still think its worth encouraging children to have some degree of modesty and keep sex a taboo topic to be explored with someone you trust.

And if you haven't noticed prostitution on instagram and twitter you just don't know the lingo, but basically city names + dates in the bio is a solicitation to DM for rates. "NYC 9/12-9/22, Miami 10/20-31", that kind of thing. Actually the one thing that impressed me about twitter is how much of a bubble this is, you don't stumble upon porn accounts in general, but once you follow a couple of accounts that promote sex work even politically (which I think people totally have the right to do, I do prefer the nordic model to whatever america is doing) you'll see hundreds of these.

Here's some funny fail videos...of girls in bikinis. Here's some sport images for the sport you are interested in, with far too revealing angles/images.

So I don't use Facebook any more, and feel much better for it.

Did you ever try Facebook purity (FBP) ?

If yes, did the forcing of chronological content into the feed, not work? Or did Facebook finally kill the widget?

FBP was the only thing that made FB bearable for a while, but im curious to other peoples experience with it

I don't even know how to find this feed people keep talking about.

You go to https://www.facebook.com

That's literally it. If you don't have a suite of adblockers and extensions like FB Purity installed, you'll probably see a ton of crap. If you don't see a ton of crap, I would love to know what sort of wizard spell you have cast to ward it off.

When the product is used as intended, it does a lot better than with zero engagement passively. The product is very tuned to people actually using it, which the average hacker news reader isn't.

Besides, even for my interests, I don't want to see a bunch of random if topical chaff. It's extremely rare for the algorithm to pick up on the kind of advanced, nuanced, and obscure discussions that I want to see, simply because they are invisible to it by their very nature.

Plus for whatever reason the algorithm thinks I'm super big on some things that make absolutely no sense... for example one recurring topic seems to be posts about various corporate logos and how they are constructed, yet I have never willingly engaged with anything on FB having to do with logos or graphic design. Another favorite topic it likes to show is really bad humor, like jokes so basic and elementary that I have a hard time understanding how anyone finds them funny. Oh and the obligatory horny bait.

It's nice that you've somehow managed to cajole your feed into something you can tolerate, but your post strikes me as suffering from the same kind of myopia common amongst tech workers who have never stepped outside their bubble. We as a group need to be pushing back much harder against the algorithmic slop that seems to dominate pretty much all popular social watering holes.

Personalised ragebait is obviously works well for that.

never click on anything on FB unless you see a lot more of it, including really rubbish variants. Read or post about history, and get conspiracy theories. An interest in science will get you pseudo-science.

I have nothing against sex content, but I do wish we could just click a button to say turn this off, like safe search. It can't be that hard to filter out all the weird shit, so I assume it makes them money.

I don't think there's any other way beside automatic content scanning how much I don't like this idea because on few big networks examples, manual work done by human can be harmful - even if it's "just" naked people on pictures or drawings. Not mention it's a hard labor. Requiring that content should be marked as nsfw under a threat of ban could be also a way but as above, people can avoid that.

It was called "New Wave Cinema".

> separate entities such as US, Global, and JP. Like laptop keyboards. That shouldn't be a wrong or unjust option

This is the maddest I have ever seen anyone be about Japan that didn't involve WW2. We don't even do this for China or Russia, who arguably cut themselves off in the other direction.

> None of even CJKV guys except J show this behavior

C is heavily censored. Japan is, officially, more censored than the US. Korean gatcha waifu games became a serious political issue that I think ultimately got a minister fired.

I followed zero person on Twitter and has zero followers, currently on my Twitter feed:

    - Racist shit like: https://x.com/barrystantonGBP/status/1828414194548461801, https://x.com/WarMonitors/status/1828498157589938272, 
    - People got bombed to shit: https://x.com/Nadira_ali12/status/1828380272322322536
    - People got shot: https://x.com/SteveInmanUIC/status/1828409629329760769, https://x.com/datsjackedup/status/1828372131727720509, https://x.com/Haqiqatjou/status/1828518967578706415
    - People fighting each other: https://x.com/SteveInmanUIC/status/1828440833835573529
    - People got mutated: https://x.com/_NicoleNonya/status/1828212958742081803, https://x.com/Nadira_ali12/status/1828241017096614366
    - Also post about this news: https://x.com/soaringeagle555/status/1828335179141963944

And it's not the worst day either, in those worst days, you saw people getting shredded (literal), animals eating each other etc with all the blood and graphic and more, in full HD. As well as, of course, political propaganda lies and misinformation, you know something can be summarized to "why we should kill them" and "why you should kill yourself", which is probably the most lighthearted content among those.

I mean, yeah sure, everyone have their freedom of speech to post shit like that, but WHY I HAVE TO WATCH IT? I never responded (liked, commented etc) on any of those. Why I'm keep seeing these? AFTER I've blocked hundreds of those accounts?

At this point, Elon Musk might as well turn his X.COM into an actual porn network, and it'll still be less harmful to the public than what it is now.

Maybe this also showed why a person with unaddressed mental problems should not be left in charge of anything social, just my guess.

After Musk took over, not only he removed the moderation team, he also introduced many policies that encourages extreme content (well actually, it encourages encouragements, but extreme content draws the most encouragements, which is a well-know phenomenon). For example the blue checkmark for sell and encouragement based revenue sharing.

Current problem that Twitter suffering is the result of those policies from Elon Musk himself. A YouTuber John Harris suspected that Musk is doing this to mock something (see https://www.youtube.com/watch?v=WYQxG4KEzvo), but I think it's just incompetent/lack of understanding, a bullied child turned an asshole, it often happens.

For a company with so much money and so much sophisticated technology, it never ceases to amaze me how broken their systems are. As a software engineer it doesn't surprise me though. You start to realize that it's people and organizational problems all the way down more so than the technology.

What's frustrating about Meta, and probably other companies that run social media sites, I'm sure, is that no matter how many times I swipe away posts I don't like on Threads, which is marked as a signal to show me fewer posts like this, I still get served similar posts or posts from the same account. Blocking takes too many pokes, but sometimes you gotta do what you gotta do. :)

The content that's filling the void is just filler, be it AI, clickbait, memes, etc.

But service owner cannot aggressively cut down on spams and baits because it will mess with the engagement metrics.

Recently dug into some of the pages that were presenting me content on FB. In this case, woodworking stuff. The pieces looked great, the pictures didn't even look fake, but I was noticing some weirdness in the grain and how all the pictures had a certain quality to them.. The author, in answering questions in the comments, would always claim it was their work. Yet they'd be pumping out complex pieces daily.. Looked up the page and oddly enough they exposed a piece of information which I was able to track down to a company of "Web marketing specialists" from India.. Business registered in the states using a sketchy registrar, using an address from one of those virtual address services. Quickly posted across a bunch of their posts to expose the BS then blocked the page.

Then not sure why, since I'm not a gardener, but crazy looking flowers, with instructions on how to care of them, and loads of people in awe about them, almost none realizing they were just AI photos with fake instructions..

Its ridiculous... If there's a buck to be made, people will abuse it. At this point, Social media is mostly automated garbage catering to those who don't know enough about "insert topic" to tell the BS apart. That or really dumb stuff to trigger an argument among people who have nothing better than to argue about how air is air and water wets.

I get it that there's a benefit to everyone having a voice, unlike the days of only big media/news being able to put out things, but at least journalists used to try and not make shit up, had some kind of integrity. Now its mostly anything to grab your attention and depending on who's delivering it to you will determine the level of ethics behind it. Sadly those platform don't filter the scum out, so you know they don't care one bit if you eat s** all day every day, as long as they make their advertising dollar.

Bold of you to assume those were people and not also AI

It's brutal. (i know this is my own fault for arguing with once probably) I constantly get recommend stuff about flat earth, portals around the world. It's like this weird toxic mix of new age cult with maga.

More generally to all media ... What happens when flat earthers start using AI to generate videos with "proof" the earth is flat, or fake videos of robots inside a vaccine?

this is definitely already happening but not how you think. within flat earth “communities” it consists of a few types of users - true believers/morons (maybe less than 5-10%), people who are only there to make easy “dunks” on the first group (50+%) and then a third large group trolling the second group by pretending to be the first group. The third group’s the one making these videos/content.

It's just classical trolling in a world where people no longer know how to deal with trolls, which is quite simple: don't feed them. Flat earthers by contrast are feasting like no troll ever before.

I would probably agree with you based on my participation in these groups (have moderated them, don't ask why, it's just a weird/funny hobby to me) that it is much lower. The 5-10% number is the estimation I've received from other moderators in this space (if anyone is also in this space feel free to chime in, I find it fascinating). However, it's hard to estimate, because frequently genuine users get trolled/harassed into oblivion and end up leaving because of it. So the longer a user is around, the less likely (IMO) that they are a genuine believer and probably a troll. There are prolific unicorn "believer" users that drive a lot of conversation but are a very small minority.

As far as the number of people out in the wild who are flat earth believers or flat earth curious, the amount of views/interaction from FE "influencers" (who I don't believe are actually believers) would suggest the actual number is surprisingly high.

And you're absolutely spot on about what drives engagement in these types of groups - often the people that are there to freak out at flat earthers are themselves not the most intellectually curious or rigorous people, and are just there to laugh at the people they know for a fact are "dumber" than them. Pushing back at that psychological dynamic ends up with some pretty funny troll-worthy content, at least IMO.

I found this out when the 10-year-old son attempted to lecture me on how I should "do my research"--by which he meant, study the Bible.

The idea that everything was made up of 4 elements (or a rather a combination of those) also assumed a round earth. Early things are heaviest and sink to the bottom, water is lighter than earth, air lighter than water and fire is lighter than air (that’s why the stars, made up of fire, are at the very top)

The church never disputed the earth being round. They were pretty adamant about it being the center of the cosmos though, with the sun orbiting it.

How true is this? To me this has the same feeling as people dismissing Trump as a joke candidate back in 2016. People dismissing opinions that can't get behind as 'trolling".

I don't doubt some just trolling but I have the sinking feeling that if we could metric it we'd be pretty dismayed at how many are not.

I'm convinced that almost all flat earthers, even the few "true believers" got their belief through reaction to the mainstream. Its not really a belief about the shape of the earth, its more a belief about how you can't trust the status quo. If everyone just stopped complaining about flat earthers, they'd all be gone within 20 years.

Just by repeating the words "flat earth" the debunkers are giving it a platform, and thereby profiting off it.

What you should be worried about isn't the many, but the few. As usual. Presidents, judges, party nomination committees etc. being fooled by fake private evidence. It's much easier to fool a few people, especially with evidence they can't examine too closely "for security reasons" or some other pretext.

If you've convinced people to look at private evidence, you've halfway there to fooling them already. And sometimes, they're happy to be fooled, because they really wanted to believe what the fake evidence pushes anyway.

Truth is, once a platform becomes that large, everyone and their peers jockeys to control their image upon it, whether it is an official request to de-prioritize posts, or even a comment brigade or mass reporting, this is the result of a platform becoming far too influential and massive to be effective for commoners, and far too vulnerable to money and influence to be an open and free community.

We all have the perfect inverse of deregulation and absence of moderation with Twitter, and we all know how bad that's going, while the management still tries to transition the mess back into a "pay for play" platform.

There is simply no way to manage platforms that large once they become popular pulpits... We need to return to an ecosystem of smaller community forums and apps based around individual topics that can maybe be aggregated in part or whole to news sites perhaps. And no, Mastodon and Reddit are not what I'm talking about either.... It would have to be something entirely different, more effective, more innovative, without ads & ad buying, with a better system of managing credibility and merit than paying for verification, and far less corrupt-able to work well.

There is no feed, but I can still join discussion groups related to my interests, and use the marketplace to buy and sell. Overall, it is a pretty good experience and I actually enjoy using facebook again.

They are the main reason I am still on FB. Occasional posts from friends, and I do post (three psots this mont, and that is pretty typical)

It's so funny scrolling down facebook now where every 20th black box is a post I sorta wanted to see.

It used to feel much more curated/tailored to my more esoteric interests, but now I get ai slop, race baiting, "breaking news" which is some fake right wing news account, etc. etc.

I actually have pretty good luck with YouTube Shorts and Reels suggesting content - perhaps because I religiously curate by blocking/disliking when possible.

Perhaps we need an adversarial AI Bot for social media that will curate people's feeds on their behalf.

Why does this come up so much? Yes... Google, Facebook, Instagram, they're all hamstringing their experience to spite you. They benefit and you lose.

I suppose there were warning signs, like every previous Internet technology eventually being used for advertising.

Said blowhard moving to using generative AI to come up with even crazier nonsense makes no difference. There is no logical reason for you, outside of whatever entertainment value you can find, to be listening to him in the first place and, even if only deep down, you know that.

What the heck are you talking about? Anyone paying attention from 2000-2015 could have seen this coming and predicted it quite well, and in fact did predict this.

They are labeled Luddites by those with much better financing, much stronger connections, and huge amounts of profit to be made.

The well-known tax dodge is to avoid realizing gains by borrowing against your stock. Say you pledge $1b as collateral on a loan. If interest rates are lower than your stock appreciation, the loan is free. So you don’t ever need to realize the gains, even though you are unlocking capital.

Of course, in the bear market you could get a margin call and have to liquidate at unfavorable prices (and pay taxes then). But not if you are keeping a big enough buffer.

You’re also introducing the risk of being liquidated if there’s a big drawdown in the asset. If you borrow against your stock and then there’s a 50% drawdown, you could easily find yourself worse off than if you had just sold the stock.

Even if losing 100% is unlikely, someone could lose control of their company. Say I own 51% of my company. Harris wants 25%. I sell my shares to cover it… if my math is right, I then own 38.25%, the year after that, 28.6%, then 21.5%, 16, 12, 9… the control is gone. I lost my company. Let’s say the company was worth $1B. At 9% ownership I’m now under the $100m net worth threshold. So I would have paid $420M in taxes. Then let’s say the stock tanks… I have been selling off shares flooding the market, the direction has been taken from me, the decisions aren’t good and I’m powerless to stop it, the company’s value drops by 85%. Had I never paid any taxes on unrealized gains, my stock would be valued at $76.5M, below the threshold of the tax. But instead, I paid the government $420M, my new position is $13.5M, and the company I founded and build from the ground up is slipping away.

This may be dramatic, but it could happen. $13.5M isn’t nothing, but it is when the government taxed you 420M.

And what happens when all this stock is sold and floods the market? Does the market crash? When the market tanks, what happens to everyone’s 401k, the middle class… they get screwed.

Someone tell me why I’m wrong, because this is there my mind goes with this stuff.

I wonder if we’ll start seeing more bootstrapped companies staying private, instead of everyone going after VCs who are looking for a big return, either through going public or an acquisition.

By the end of ten years you have barely a quarter of what you started with. If that was 51%, it's now 13% and the MBAs come to ruin your company.

All companies eventually go to zero and some of them do it without a lot of notice. How many people in the year 2000 expected Kodak to be bankrupt in a dozen years?

But that isn't even the main problem.

Suppose you own 51% of your company, i.e. a controlling interest. The company is doing very well under your leadership -- value doubles. But then you have to pay tax on the unrealized gain. The shares are your main asset so the only way to pay is to sell them. Now you no longer have a majority of the shares and control of the company moves to the soulless Wall St vampire squid which only cares how much money they can extract from your customers by any means necessary.

But it gets worse, and this time the "worse" includes for the government. You're forcing people to sell their shares in order to pay the tax, but selling shares, at scale? That lowers the stock price. Which lowers the amount of the capital gain. Which lowers the government's revenue. And the value of everybody's pension fund and 401(k).

Then it gets even worse for the government. Normally the way the stock market works is that it will go up by a little over 10% a year but then once in a while it will fall by 50% as the economy enters a recession. Right now what happens is that investors buy the stock, it goes up little by little, and when the recession hits they give back some of their gains but are still ahead of where they were when they bought the stock ten or twenty years ago. When the recession hits most of them still have an unrealized gain, so anyone who sells shares is still reporting a gain and paying taxes. Which the government desperately needs at that very moment to deal with the recession, because their other revenues will be down too. If the government taxes unrealized gains then government revenue from capital gains goes to zero when a recession hits, because basically nobody has a capital gain that year and the tax revenue from all past capital gains has already been spent. If you do this, the next time there is a recession the government is screwed.

> Say you pledge $1b as collateral on a loan. If interest rates are lower than your stock appreciation, the loan is free.

Which is exactly what the government does with unrealized capital gains. If they demand the money right now, it forces the shares to be sold, and since we're talking about something that happens at national scale, on net they'll be sold to someone outside the jurisdiction who doesn't pay US taxes. So the government gets the money now but they lose the future tax on the capital gain from the money that would have stayed invested in the stock market.

In other words, they get $100 now but that $100 in tax would have otherwise stayed invested and each year it would increase by 12%. Meanwhile the government is paying less than 4% on multi-year bonds. So tax revenue that would be collected by allowing the money to continue to be invested is by itself nearly as much as the government would pay to borrow it instead, before you account for the effects on capital gains of depressing stock prices by forcing sales.

Doing this could very realistically lower government revenue.

One of the reasons I'd like this policy even more if the shares were sold to the government and the government is forbidden from voting outside of exceptional (e.g valuation crash over x years) circumstances.

But the reality is that companies play games with voting rights on shares all the time, so your scenario is easily worked around by founders themselves.

Maybe unrealized gains tax can be formulated as "cushy gains tax" if riskiness can be quantified in a reasonable way based on an asset's age and metrics over time. Then if an asset's risk score is above X, you don't pay tax. If it drops below X, you start to pay tax.

This would probably lead to more innovation and fewer monopolies, as people are incentivized to invest in riskier companies, and companies are incentivized to self cannibalize to maintain a healthy risk score.

2. Properties are purposely, often by statute, assessed far less then they are bought for

3. There are tons of lawsuits around this, imagine the cost of every asset being scrutinized and potentially appealed!

This is emotional pleading, not a serious argument of any sort, based on the core premise of "this person has more money than me, and I don't like that, therefore I should get some".

Wealth and income inequality has well-studied negative effects on society.

The ability for a single person to own over $100m in assets is not a human right. It's not a protected class or status. It's an abhorrent misappropriation of human resources. It is a societal mistake.

And let's not forget, people like Elon Musk, Jeff Bezos, and Mark Zuckerberg have multiple THOUSANDS of $100 million dollars in net worth. This completely insane $100 million figure is so small to those men that you would have to earn $100 million every single year for over 30 lifetimes to get to their level of wealth.

It's not about demanding some of the money from the wealthy. That's a shallow way to think about it. It's about the inherent power imbalance and exploitation that comes along with being excessively wealthy like this.

Think for a second what would happen to you if Jeff Bezos banned you from using all Amazon products. Would the Internet even work anymore for you? You know, every company has the right to refuse service to anyone. This one man can basically cut you off from television, e-commerce, Internet, employment (if you do engineering work on AWS), even Thursday Night Football.

Because, factually, the statement "Well when you have over 100m in assets in your pile of gold in the dragon lair, its time to be extractive." is emotional and meritless. There's literally zero value here. It's an opinion. In fact, you doubled down on this throughout your response.

> It's an abhorrent misappropriation of human resources. It is a societal mistake.

This is also factless, meritless, emotional pleading.

> And let's not forget, people like Elon Musk, Jeff Bezos, and Mark Zuckerberg have multiple THOUSANDS of $100 million dollars in net worth...

As is all of this.

> It's not about demanding some of the money from the wealthy.

That's literally what you're doing.

> It's about the inherent power imbalance and exploitation that comes along with being excessively wealthy like this.

It's clearly not about the power imbalance and exploitation, because someone genuinely interested in curbing those effects would address them directly. The fact that everyone who claims to care about the destabilizing effects of concentrated wealth immediately goes to "we should take the wealth away" instead of "we should try to figure out why concentrated wealth is destabilizing and address that" is extremely strong evidence that the goal is, actually, to take money from the wealthy.

If you consider pointing out that you're not making logical arguments, and instead engaging in emotional pleading, to be insulting (especially when, upon that being pointed out, you can't make a rational argument and instead continue pleading), then you should take a step back, because there's a good chance you're engaging in advocacy and emotional manipulation as opposed to genuine, rational arguments in good faith.

As someone who thinks wealth inequality is a huge problem in the US - I'm genuinely curious as to what you would propose to address this problem "directly". Because to me, this tax proposal is addressing it directly.

Wealth inequality doesn't have any direct effects - merely having more money than someone else doesn't do anything. It's only after the money gets spent that you see negative effects, and the magnitude and type of spending determine the effects. It's more accurate to call this "spending inequality".

This proposal doesn't address the problem because it doesn't affect spending - only wealth. (a capital gains tax is actually a deceitfully name wealth tax) Wealth doesn't do anything until it's spent. That's the main problem with this proposal - it doesn't even try to address the problem it pretends to address.

As to how to actually address the problem: there's two types of wealth inequality that most people are concerned about - that between the super-rich and everyone else (discussed here), and that between the poor and everyone else (not discussed).

Thank you for engaging honestly, it's a breath of fresh air in this thread.

The ~wealth~ spending inequality problems of the super-rich seem to be mainly manifested in corruption - donating large amounts to political groups, and lobbying. You want to regulate/outlaw those specific things.

However, aside from corruption (which is a huge problem) most of the spending inequality problems seem to come from the middle and lower class. For instance, cost of housing and living - I think that that's being driven by the middle class having more access to capital in a supply-constrained environment (which is partially caused by big hedge funds buying up housing to rent it out - which again is a separate problem that can be addressed separately and isn't fixed by the capital gains tax). People like Zuckerberg aren't personally buying up housing all over the US on their own - this problem isn't at their level and this tax wouldn't help.

What you need is to remove barriers to competition and enforce antitrust laws.

You see a problem and you refuse to fix it, and instead look for a root cause that should be addressed instead, that will then fix the problem itself.

The problem with that kind of thinking is that that’s not how the real world works. The problem of homelessness is that people don’t have homes. It’s not something else. Give people homes and you solve it. But people with RCS try to solve it through jobs, training, education, etc. All those things are nice but they won’t fix the problem, which is that people are homeless.

Likewise, the problem of wealth inequality can only be solved by reducing wealth inequality. There is no other solution. Just tax rich people until they’re not rich anymore.

Have you considered how this is supposed to work? If being homeless means you get a free home, millions of people would purposely become "homeless" so they could eliminate their housing costs. Also, homes are quite expensive, especially in areas with high homelessness, so where does the money come from?

Meanwhile one of the primary actual causes of homelessness is zoning that prevents new housing from being built, causing people to be unable to afford it. If you just have the government buy up existing housing stock for the homeless, the scarcity is not resolved at all, you just cause new people to become homeless because you remove the housing they'd have bought from the market.

To actually solve it you can't just do the naive "have the government pay for it" thing, you have to understand the root cause, which is that you have to not just give housing to the homeless but build new housing across the overall market so it isn't in undersupply.

> Likewise, the problem of wealth inequality can only be solved by reducing wealth inequality. There is no other solution. Just tax rich people until they’re not rich anymore.

This is exactly the same level of not thinking it through. Mark Zuckerberg has billions and it gives him control over Facebook. But if you take his money and leave Facebook, someone will still be the CEO and that person will still have all of that power. The problem is not the money, it's the size of the company.

This is an ad hominem fallacy/attack. Instead of discussing the actual argument, you instead attack the person making it.

> Likewise, the problem of wealth inequality can only be solved by reducing wealth inequality.

This is an opinion, completely non-factual and unjustified by any reasoning. And, the only possible underlying belief from this paragraph is "some people having more wealth is intrinsically bad" - completely separate from the negative societal effects of that wealth, and from any moral framework that even allows you to describe "bad". You just believe that it's bad.

https://news.ycombinator.com/newsguidelines.html

Accusing others of astroturfing doesn't help the quality of HN, or your case against the poster. Please respond in a chill manner. Use the downvote and flag buttons if people are breaking the HN guidelines.

Is the centralization of power bad?

If yes to both, then the centralization of money is bad.

You have no argument against this. The best you can do is to attempt to refute the notion that money is tantamount to power, which will be laughable. But please do try.

We used to tax the rich much more than we do now, and government bureaucrats were not obscenely wealthy then as you seem to be implying.

Also, the US government spends more money than it accrues every year, so there isn't any consolidation of money happening in the government (nor will there be if taxes go up).

This is inaccurate. We used to have higher tax rates on paper but nobody actually paid them because the tax code of the time had many enormous loopholes that have since been closed, which happened at the same time as the rates were lowered. Real government revenue per capita has been increasing over time.

>It's an abhorrent misappropriation of human resources

It's not a misappropriation; for a company founder, they _created_ those resources. Without them, the resource wouldn't exist. And if you punish them a lot, such people will all go somewhere else, and then you'll have no businesses or jobs and everyone's standard of living will be worse. This has been demonstrated historically countless times, every single case of the government mass-appropriating the wealth of the wealth led to extreme poverty; Maoist China, Stalinist Russia, Pol Pot's Cambodia.

>Wealth and income inequality has well-studied negative effects on society.

Negative as defined by some left-leaning social scientists. Conversely, punitive taxation has been overwhelmingly shown by economists to lead to reduced growth in people's standard of living as measured by income and GDP.

Do we make them give 20% of their unrealized paint to members of the public so they can make their own paintings, hoping they too will fetch $1m each?

If the IRS took control of 20% of the paint, borrowed against it to fund the state, but then the artist decided to quit does the government somehow force them to paint?

If the artist said this ahead of time and this was priced into the future value of their paintings (now worth $0 because there will be 0 paintings) does the IRS revalue their unrealized gains down to $0bn?

You learned in school that electrons orbit atoms, but that’s not how it really works is it? Trying to reason with a simplified model in mind can only lead to misunderstanding.

Electrons don’t have orbits. Capital gains aren’t paint.

For me, it’s as simple as: you can only tax actual dollars, not unrealized, hypothetical capital gains. What’s the best way to get that point across?

Personally I disagree, because while the gain hasn’t been realized, you can act on the assumption that it can be realized at any point. There are really degenerate strategies once you get to this level of wealth, such as taking out loans with these “unrealized gains” as collateral and realizing the gains without paying taxes.

And there are better ways to deal with our oligarchs than braids dead proposals. Start breaking up their monopolies for one.

1. inflation - a regressive tax that disproportionately takes from the poor

2. taxation as a % of wealth - takes from everyone equally

The fact is the rich pay a WAY lower tax rate, we can spend the next 1000 years playing legal cat and mouse over how to tax these people but it doesn’t get us closer to option 2 unless the government gets aggressive about collecting tax.

Pointing out that toll roads are "pay for use" is factually true.

Capital gains tax is, factually, not "pay for use". There's no usage that is being metered.

You also claimed "Anyone with more than 100M in assets has used the system a shit ton" and I pointed out that there is no evidence that supports a strong correlation between how many assets someone has and how much value they've obtained from government services. This is, again, a fact - had you had any evidence against this, you could have put it here, in your reply. But no, you didn't have evidence, so you tried to (incorrectly) portray it as an "opinion".

You calling my true statements "opinions" proves that you cannot differentiate between opinions and reality. The fact that you think that pointing out that capital gains tax is not pay for use is a conjecture proves that you literally cannot tell the difference between facts and opinions.

Proposing that we should continue to throw more money at infrastructure, before diagnosing and fixing the problems that are causing that inefficiency (at which point, sure, double the infra budget - as long as we're getting good value, the absolute amount can go up as far as I'm concerned), is straight-up malicious.

The only people who make the argument to keep increasing the infrastructure budget before fixing the problems are those generically interested in throwing more money and power at the government, not those actually concerned about infrastructure (who will seek to fix the problem first).

... What people are suggesting is to take money from some productive enterprises and put it towards other productive enterprises such as education, medicine, public infrastructure, etc. Enterprises which have more benefits beyond simply increasing the bank account of entrepreneurs and fund managers.

Giving money to ineffective organizations is throwing good money after bad. I'd love to see competent government that can effectively use funds, but I'm not seeing a lot of evidence for it these days. There needs to be deep reform and anti-corruption efforts. Good luck doing that without the status quo powers pulling out all their dirty tricks.

This is a rather large assumption. One's assets might be invested inefficiently, as those who financed Elon Musk's takeover of Twitter have learned to their cost.

And once the asset is sold, that's a taxable event.

    > When calculating wealth tax, you must include any assets that you own at the end of the year. These assets must generally be valued at what the asset is worth on the open market. However, an exception is made in the case of housing, and a lower value, known as the tax value, must be used when calculating wealth tax.  

Two things stand-out to me:

(1) "assets must generally be valued at what the asset is worth on the open market". I guess there will be GAAP accounting rules about how to value less liquid assets. Tradable securities are easy to value; other things, like artwork are less easy to value. In the case of a car, an accountant could reasonably use an online used car marketplace to find a value. (The US has something called the Kelley Blue Book.)

(2) "an exception is made in the case of housing". It sounds like there is a totally different set of rules for taxing housing (land+building).

For the proposal to work you would need an estimate good to within less a percent. Or lawsuits galore.

This doesn't work if the shares have low-to-zero liquidity, similar to housing or land. In environments where it can take days to find a buyer, the price slippage could be more than the tax itself.

1. Assumes the asset in question is publicly traded.

2. Assumes the publicly traded asset has a non trivial amount of trade volume 3. Assumes asset price is relatively stable, moving in a narrow band along a clear trend-line

4. Assumes you have defined the price from the stock information (last trade before close. Daily average, etc)

5. Assumes holder's position is small enough not to affect stock price were they to sell.

And stocks are the easiest to do this with!

Look at the Trump vs NY court case for the value of his house in FL. Unlike the valuation imposed by government fiat, the valuation was agreed to freely by the parties. The courts found it excessive (and it might be) and proposed a valuation so ridiculously low it alone gives Trump grounds to appeal that the judge is either incompetent on the matter or has a personal bias and should anyway have recused himself.

Are we talking about Mar-a-Lago here?

> the valuation was agreed to freely by the parties

Which valuation is that? The one from Lawrence Moens?

The banks agreed to the valuation and under no coercion agreed to lend money with it as collateral. Trump pays off that loan and the banks are made whole.

By contrast my school board telling me my house is worth 600 k instead of 400 k scares the shit out of me. I can't agree to it and my only recourse are the courts. The school board has lawyers on staff so it costs them nothing if I sue.

This is just wrong. The very low valuation was not proposed by the NY court, but by the Palm Beach County tax appraiser. This is because the property is deeded for use as a social club rather than a private residence (a condition of sale when Trump purchased it iirc, and one which affects future disposal of the property) and as a commercial entity the value is appraised as a multiple of business income.

The art is very valuable, financially, because people are willing to pay for it.

However, absent the market clearing the asset, its value is impossible to objectively evaluate. Even if we had an objective function to evaluate art the basis of evaluation is incorrect - the artwork is valuable as an instrument of government corruption

So m, if we can't even agree on the reason why Hunter's artwork is worthwhile, how can we even possibly evaluate it?

I guess it's not impossible, we do it for property tax on real estate. There are real costs though.

Is that because the people making the loan aren't sophisticated enough to price those securities correctly in this context and so are being taken advantage of?

> a popular kind of financial engineering among very wealthy people

To use assets without a single universal price as collateral? I think everyone does this.

Obviously I am over-simplifying a little, but this is a real thing. Here's a more comprehensive explanation: https://smartasset.com/investing/buy-borrow-die-how-the-rich...

No, it's because using stock (and other securities) this way allows them to "convert" the stock into money without actually realizing the gains. Thus they derive benefit from the gains without actually paying capital gains tax.

They're deriving secondary benefit from ownership and they're paying interest for the facility with the ultimate expectation that they pay back the loan and the stocks never actually trade hands.

This is not much different from any interest bearing account. Should it be that you have to take all your money out of savings and ensure you earn nothing from it if you intend to offer it as collateral on a loan?

The difference is taxes. Interest on a savings account used as collateral is still taxed. Gains used as collateral in a loan are not taxed.

The parent poster is suggesting this loophole be closed - that the practice either be disallowed or considered realizing the gains for tax purposes.

When you are wildly wealthy you are not risking anything, risk is merely an input to the math equation that only goes one direction. Up.

And again, this is for publicly traded stock portfolios. Private farms won’t be broken up… yet :-)

"The proposal would impose a minimum tax of 25 percent on total income, generally inclusive of unrealized capital gains, for all taxpayers with wealth (that is, the difference obtained by subtracting liabilities from assets) greater than $100 million."

https://home.treasury.gov/system/files/131/General-Explanati...

And there are many private farms in America worth more than $100m. I have no idea what amount of that would be "unrealized capital gains", which is kinda the problem.

> Taxpayers would be treated as illiquid if tradeable assets held directly or indirectly by the taxpayer make up less than 20 percent of the taxpayer’s wealth. Taxpayers who are treated as illiquid may elect to include only unrealized gain in tradeable assets in the calculation of their minimum tax liability.

Which seems to suggest that if someone's wealth is mostly tied up in property or art or a private business, then they wouldn't be taxed on unrealized gains.

Why do people assume we always have to give more and more money to the government? What have they done with the $6 trillion they spend every year so far? What evidence is there that giving them more will improve anything?

Taxes are not for you to punish people you don't like. They're to fund the government enough to perform its necessary functions. That's all.

Governments can fund themselves in numerous ways, not just taxes. Either way you'll pay.

The key issue is do we want a federal government expenditure of 20-25% of the economy? I'd say no.

- Taxes - debt financing - seignorage

The latter two aren't taxes, but people end up paying for the expenses anyway.

Governments can also plunder other country's money. While this sounds very Roman empire, it's still a thing. Case in point freezing another country's foreign exchange reserves, refusing to return their gold, confiscating the interest on the reserves, etc

Should government spend 25% percent of GDP? Who cares. Governments shouldn’t aim for a specific number, they should spend enough to make sure full employment is achieved, according to saving desires and the private market’s appetite for investment.

Whatever the private market isn’t willing to invest, the government should take care of.

Whether that’s 10% or 50% is literally irrelevant.

We should be demanding ruthless efficiency from the government, not dreaming up new ways for them to take our stuff.

Cool, then let's just do away with them altogether. This is great news. All those people saying I needed to pay taxes so I can have roads and schools and a military and everything must be wrong.

It's not like the money is just sitting, liquid in a vault like Scrooge McDuck.

Idea: tax loans taken out using assets as collateral at regular income tax rates. After all, that money gets used like regular income (living expenses).

The taxed amount can then be added to the basis when the asset is sold. It would be like reverse of depreciation calculations.

Set an asset and loan value floor so it only affects people with assets $10M+.

After all, regular people pay taxes on annuities, which are similar in structure.

Disclaimer: IANA-Accountant, but I am a taxpayer who tries to legally minimize my taxes.

In the context of home ownership, a loan using an asset as collateral translates to a home-equity loan or reverse mortgage. If you want to protect ordinary home-buyers, set an asset value floor of say $20M.

However, I think most share "pledging" [1] by the uber-wealthy is done using company stock as collateral, so you could restrict the tax further by having it apply only to loans taken against stock holdings over some similarly high value floor.

1. https://aaahq.org/portals/0/documents/meetings/2024/ATA/Pape...

I don’t think it’s as simple as this. This will end up catching normal people (any mortgage, automotive loan, etc) but may result in tricky accounting/loan structuring to avoid having literal collateral for the billionaires you’re trying to hit.

I don’t think that taxing unrealized gains is the solution either, but I also don’t think doing nothing is the solution. This is a very tricky problem without an obvious solution (and it doesn’t help that the ultra-wealthy can fairly easily influence lawmakers).

So just have it kick in above $5M/year or something like that, and have it only apply to securities as assets. Not a lot of ordinary people are taking $5M+/year in loans against their stocks.

They take out loans and aren't taxed on it. But they have to pay taxes when they pay off the loans, and at that time they'll owe even more money meaning more stocks will have to be sold.

But wait, how are they avoiding that tax even then? Well they take out another loan. But eventually that stops. They can't take out infinite loans, so what is happening? When they die, there is some tax trickery that involves resetting the cost basis of assets, then selling them with 0 capital gains to pay off the loans. The simple fix is to only reset the values after the estate pays out, meaning that any assets sold to pay off any loans will have to pay the real tax on their value, and only afterwards is the cost basis reset when inheritors receive those assets.

That seems a much more minimally invasive change, and also seems much more in line with the intent of the existing tax code to begin with, as the cost basis should only reset for those inheriting and not for paying off existing debts.

I understand you're viewing it as a tax increase as the estate pays less tax on death under the current system, but sometimes you need to realise you're stuck in the overton window.

Whether or not you think any of the companies funded by YCombinator[0] are actually worth their valuation, you have to realize that there will be fewer such startups if a tax on unrealized capital gains is passed, and that VC activity, along with the future startups chasing their money, absolutely will move to countries without such a tax.

Again, maybe you actually believe the startup scene in the US is worthless, in which case, go ahead and advocate for an unrealized gains tax Just be honest with yourself that it will entirely shut down sectors that others view as critical to the country's future dominance.

[0] https://www.ycombinator.com/companies

That's a bold claim. The tax-averse amongst us say that, but in my experience investment flows to the best ideas / best distribution / best businesses. If those people are in the US because they're citizens, the capital will flow to the US, and investors will take the hit.

“Hold your shares or buy more at a discount” is incredibly out of touch with the average person who will be affected by an economic depression.

SVB would still be around today if it was possible to convince people to not panic sell

This is effectively similar to nationalization, along with the pros and cons that come with it.

Now obviously things like transaction fees need to be factored in, and timing should matter - you should have the option to increase your stated value if something changes (or even to say "yes, okay, it's really worth X" and keep the item at the higher valuation).

It also has all the other problems with estimating the true value of an asset.

I can explain it to you with a simple example:

Imagine, for instance, you're making 50k a year and have a brokerage account that has appreciated by 100k and that you're being taxed 20% on unrealized gains in year x. In year x+1, say your account falls back to where it was before. You paid 20k plus another 10k, and you will need to set aside another 10k. In essence, your income has been reduced to 10k, which could make daily life impossible for many people making 50k annually, especially those with families.

Either way, I’m far more concerned about Trumps $4k tax on me (in addition to the tax hike he implemented on me when he was president but I’ll let that slide).

> Actually, I think you are making this up.

Quoting New York Times: "The vice president supports the tax increases proposed by the Biden White House, according to her campaign."

...

"That’s how much more revenue the federal government would raise if it adopted a number of tax increases that President Biden proposed in the spring. Ms. Harris’s campaign said this week that she supported those tax hikes, which were thoroughly laid out in the most recent federal budget plan prepared by the Biden administration."

...

"The tax plan would also try to tax the wealthiest Americans’ investment gains before they sell the assets or die. People with more than $100 million in wealth would have to pay at least 25 percent on a combination of their income and their unrealized capital gains — the value of the appreciation in the stocks, bonds, real estate and other assets that they own but haven’t sold. The so-called billionaires-minimum tax could create hefty tax bills for people like Elon Musk who derive much of their wealth from stock they own."

> Either way, I’m far more concerned about Trumps $4k tax on me (in addition to the tax hike he implemented on me when he was president but I’ll let that slide).

He cut taxes did not increase taxes. This just tells me you are a lying shill for the Kamala Harris campaign. Do better.

Yeah I'd wait for her to specifically say that before you sell your unrealized gains in a panic and flee the country. The self martyrdom thing is super weird imo.

> He cut taxes did not increase taxes.

Look up the SALT deduction cap as part of the TCJA. I paid ~$3k more than I would have if the SALT deduction was intact and I itemized. I am a shill for the Kamala campaign though, because I support America.

Good luck getting it out of her anytime before the elections. If anything, she is going more socialist (more extreme left).

The right are currently targeting facebook and tech firms because they want to be able to influence the ‘algorithm’ to support their policies.

They are current churning out concepts such as the ‘censorship industrial complex’, and finding ways to publicize blame on “liberal Californian tech firms”.

The right wing think tanks are posturing about this from the perspective of free speech - while avoiding getting down into the weeds of trust and safety decision making.

I am on board with better freedom of speech protections - but not someone pontificating on principles, but ignoring the massive amounts of failure when you run moderation on “principles”.

This is where they lose credibility for me, and the power grab becomes apparent.

This letter is almost certainly to appease the Republican Party so that Meta is not dragged into hearings near the election.

This just isn’t true. Groups of people suspicious about medical treatment for religious reasons predate the 1970s considerably, and the antivax movement was famously an example of fringe right-wing and fringe left-wing people finding common cause.

> It's only very recently that the media has attempted to flip the script to say that Trump or right wingers are pro Russia.

This similarly betrays deep historical ignorance. Russia isn’t a communist state, it’s run by an oligarchy of rich white men who have beliefs about race, gender, and sexuality which have a lot in common with those of the people they make common cause with.

> And someone who spent their fortune and life focus on fighting climate change through the EV car revolution is somehow right wing?

He didn’t spend a fortune, he made one by sagely taking advantage of government subsidies and market demand. There’s nothing wrong with that but it’s hardly selfless to make yourself fabulously rich and there’s no evidence that he’s a climate activist in areas which don’t directly benefit his wealth. As to his political leanings, what makes him a right-winger is his years of support and endorsement of right wing positions and politicians.

Taxing unrealized gains will be extremely complex, and given that they aren't allowing us to deduct unrealized losses its a pretty shitty setup for the taxpayer.

We need to drastically simplify our tax code rather than further increase its complexity.

A huge question I have here is how unrealized gains on nonfinancial assets would be handles. How would the government determine the fair market value of a multimillion dollar mansion, for example?

More broadly, how would we justify only taxing unrealized gains on individuals? Or would this apply to corporations, banks, and financial institutions as well?

My point isn't actually any specific issue in the proposal, these are just examples of what could be a problem. Our tax code is massive and incomprehensible to almost everyone. Adding further caveats and stipulations just makes it worse. Taking an axe to much of the tax code seems like a much more reasonable approach in my book.

I don't know how that plays out with mansions though. Whether a mansion is worth $30M or $10M is often hard to predict with the pool of potential buyers being so low.

But yes, a tax on "unrealized gains" basically amounts to a property tax, not anything related to an income tax.

The main difference being that a property tax only takes into account the assessed value and ignores what you paid for it. They tax the value, not just unrealized gains.

(Edited to correct "inheritance tax" to the technically correct term, "estate tax")

If you're a billionaire who does the "take out loans against your unrealized cap gains" trick, then you, you know... can't sell your stock. So then your stock passes to your kids -- who, due to the stepped up basis, yes, do not have to pay cap gains on that stock.

But there's a 40% estate tax.

Estate tax generally isn't very relevant even to the ordinarily-rich, because it has an extremely high deduction (about $27M for a married couple), but for a billionaire it's absolutely relevant.

Now, sure, if you paid both the cap gains and the estate tax you'd pay that much more taxes, but if you compare a normally-wealthy person (pays 15-20% cap gains and 0% estate tax) and a billionaire (pays 0% cap gains and 40% estate tax), it's obvious that the billionaire, eventually, pays a much higher tax rate.

Yeah, the real loophole is step-up in basis with no corresponding tax event. What should really happen is that every step-up in basis should correspond to a tax event or, somewhat more speculatively, only net changes in basis should result in tax events. Incidentally, this would also give everybody access to reduced taxes due to unrealized losses (tax loss harvesting) instead of just people with accountants.

And there lies the loophole. These loans are often structured as some kind of business expense that can be paid from pre-tax income.

So, ultra rich people get to double dip here. No taxes on selling stocks for money, as there's a loan, plus no taxes on the income for paying it off.

Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.

We have gone 'after it' again and again, making the system more and more complex. So much that you can now out-lawyer the IRS if you have enough money. There is no 'personal' expense, everything is somehow a business need. There is no simple solution to this really. Whatever you do to hurt ten billionaires, the ten million small business owners will face the brunt of it.

>Also if you sell stocks you always pay tax on the capital gains regardless if there is a loan or not.

That is the point, you don't sell stocks that makes you a billionaire. Instead, you find more and more creative ways to leverage that stock for loans, for deals, for power/control, etc etc. Also see cross collaterals where the same asset is used for multiple purposes at the same time!

Taxing unrealized capital gains is just going to give these people more loopholes to play with.

But "tax the rich" seems to be the zeitgeist for whatever reason.

A) Loans need to be paid back, with interest. The person must either be selling assets or drawing in other (taxed) income to pay back the loan. A loan could delays the taxes to a future year to let someone buy a house or yacht or whatever without the full tax burden in year 1, but they still ultimately pay all the taxes

B) If they die while still having outstanding loans, their heirs pay a 40% inheritance tax on everything above like 10 million, so there is no magic avoidance of taxes there, just a change in whether it's capital gains tax today or inheritance tax tomorrow.

I'd love to be disproven if someone can explain a real tax loophole, but as far as I can tell, the "Billionaires avoid taxes by taking out loans" thing is completely untrue.

I'm not an expert on this, and I could be misunderstanding some subtlety here.

[1] https://www.irs.gov/statistics/soi-tax-stats-estate-tax-fili...

A perfect tax code would be impossible, a more simply one would be very doable.

We're talking about a campaign proposal here with no legislative draft so its a guessing game, but in my opinion any move similar to taxing unrealized gains will serve only to make it more complex and would not fall under the category of "good" for me.

Upper middle class its where highest quality of life happens, if one is smart enough to understand how happiness and life fulfillment works, to not die full of hard regrets. You can have meaningful true friendships. Enough to afford whatever is you need or desire to do, not enough to become self-entitled spoiled lazy disconnected from reality piece of shit parent and partner type of folks. No you don't need private jet or mega yacht or 5 mil hypercar for that, that's poor man's idea of what sort of quality wealth brings you in life.

It doesn't seem like a genie you'll be able to put back into the bottle without reducing the net tax take.

I pay taxes on the unrealized gains of my house appreciating in value over the years.

I'm not arguing one way or the other about whether various wealth tax ideas are good. But, I don't believe that the concept is as infeasible as some are making it out to be when it's been happening with property taxes for a very long time.

You pay taxes on the assessed value of your house. It doesn't matter what you paid for it, or how much equity you have in it. It's more of a use tax than a capital gains or wealth tax.

Also, just to add to the above discussion, it's even worse in practice than a tax on unrealized gains because I'll have to pay the same amount of tax every year if my house stays the same value. If it were a tax on the unrealized "gains" of my house, I'd pay $0 if it stayed the same value. And if the value of my house decreases, I'll still have to pay more than $0 in property tax, whereas a capital loss would mean I would pay at most $0.

So, I think I still stand by my sentiment that property taxes are more burdensome than a tax on unrealized capital gains.

So... is owning piece of a productive company "fake wealth"? Is it fake when you can leverage that valuation to have access to more credit and use that to buy real stuff (like property...)?

The only way to win with politics in social media is to avoid it or promote free speech

2. Where will the capital go (all the best investments are in the US), if this happens lots of great businesses will be available to buy at a discount to people with smaller than $100m stock portfolios

3. Potentially true but I would still set up my business in the US and just pay the tax, if I make $100m it’s $20m for the government and I rate that as a great deal to be honest.

4. Why is a one off 20% tax going to lose founders control, this is only about companies post IPO.

5. IANAL are you?

6. If the rich continue to be able to accumulate wealth without paying taxes on it forever I think that is the road to serfdom personally. Taxation of the rich will make everyone better off. I pay over 50% tax in Europe, maybe if the rich were paying their share this could be reduced!

---

The federal government has the ability to tax "income." Unrealized gains are not income as gains have not been clearly realized.

The closest legal definition for "income" comes from:

The Glenshaw Glass case

In Commissioner v. Glenshaw Glass Co., 348 U.S. 426 (1955), the Supreme Court laid out what has become the modern understanding of what constitutes "gross income" to which the Sixteenth Amendment applies, declaring that income taxes could be levied on "accessions to wealth, clearly realized, and over which the taxpayers have complete dominion". Under this definition, any increase in wealth—whether through wages, benefits, bonuses, sale of stock or other property at a profit, bets won, lucky finds, awards of punitive damages in a lawsuit, qui tam actions—are all within the definition of income, unless the Congress makes a specific exemption, as it has for items such as life insurance proceeds received by reason of the death of the insured party, gifts, bequests, devises and inheritances, and certain scholarships.

https://en.m.wikipedia.org/wiki/Sixteenth_Amendment_to_the_U...

See case law section

You've described the wrong type of tax. I make $100m and 20% goes to the government is not controversial. It's my business is valued at $100m and so I pay $20m to the government regardless of how much my company is "making".

> 4. Why is a one off 20% tax going to lose founders control, this is only about companies post IPO.

Got it. So no more IPOs and every public company is about to go private.

It specifically states that this only applies to individuals with 80% of their wealth in tradeable assets. No founder is going to lose control because this doesn’t apply to them!

You’re still going to end up making a higher valuation on the stock market than you would trying other means to avoid this tax.

I thought Harris was adopting the President's 2025 budget proposal [1], which doesn't specifically state this is specific to tradable assets, but according to the downvoters I'm wrong about that. As far as I can tell it provides no comment on how "wealth" is determined.

[1] https://home.treasury.gov/policy-issues/tax-policy/revenue-p...

I suppose the whole argument is moot anyway as the President doesn't pass a budget, Congress does. And this document is really about communicating priorities, not actual policy.

And if one wants to get really persnickety, Harris didn't actually say anything. Some people working for her campaign did.

https://www.nytimes.com/2024/08/22/us/politics/kamala-harris...

Starting with the pentagon, who hasn't ever passed a real audit. Their budget is nearly $1 trillion.

I wonder how much of that goes to kickbacks, fraud, graft, etc.

It is a completely ridiculous idea. You can't value "unrealized gains" without using a third-party agency to come up with a number (typically through 409a valuation). And even if the third-party agency comes up with such a number, there is no way to have liquid cash available to pay the tax. To give you an example, say you are a Founder with a Startup that received investments from investors, through various rounds of funding, and the Startup is now valued at $1 Billion. Assume also that you sit on 5 million shares, with 51% equity post all the dilution. You will have to pay tax on $510 million. This $510 million is "unrealized gain". It is an "estimate" of what you would receive if the company was hypothetically acquired for that amount by a bigger company on that particular day of valuation. Assuming 25% tax that would be $127.5 million. Where will you come up with that money? There is no secondary market where you can use your shares to raise that money. You will probably have to take a loan from banks (if they have that sort of liquid cash available for ALL unicorn startup founders/centamillionaires/actual billionaires) and that too with exorbitant interest. Why would anyone want to go through all that hassle? The other option is for you to sell some of the shares to raise money to pay tax. But that is self-defeating because you are devaluing your net worth by the same amount.

It is the most ridiculous idea ever.

EDIT:

> are doing to avoid paying tax including taking out loans against their own share portfolios

How is that tax avoidance? You do realize that when they pay the exorbitant interest on the loan, they are paying tax on the interest right? That is typically higher than if they just sold the shares and paid capital gains tax directly. Because here they are paying interest + tax.

High net worth individuals take out loans by risking their shares. Those shares are marked as lein. In other words, those shares get locked with the lender (bank in this case) and in case of the Founder not being able to repay due to bankruptcy, the lender can liquidate the assets (shares) and not be required to get the best value for it in the market.

This is not tax avoidance by any means. This is Capitalism 101: putting YOUR capital to use the way you see fit and taking personal risk along the way.

How should the founders and equity investors in a bootstrapped high growth unicorn that is neither public nor profit-making handle this proposed capital gains tax? Does this mean VC funds would need to set aside arbitrary amounts of cash to cover impossible-to-predict taxes on cap gains during, say, a 7 year window?

It could also make it harder to attract and keep talent, since the earliest stage employees often rely on equity grants as part of their compensation. Does this mean every early stage employee has to have deep enough pockets to cover cap gains tax pre-revenue? And what happens when the company implodes past the look-back for recouping tax overpayment?

It might make sense to focus on closing existing loopholes without creating new burdens and cash flow barriers that could disrupt the innovation and growth ecosystem with unintended second and third order consequences.

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Edit to add:

It's true that a peeved Wall St donated a fraction to Biden this season relative to the past, and — surely entirely unrelatedly — partnerships and private equity were taken out of the latest incarnation, leaving in publicly traded and the $100M holdings.

If passed, this will be tinkered with, encircling ever more to offset the loopholes inevitably used.

No it doesn’t, you’re arguing using a straw man here. They need to be publicly traded securities to be taxed as I understand it. Also paying taxes is a public good, even if you’re exceptionally wealthy.

That's not in dispute*, and the point is people can experience paper gains without being exceptionally wealthy, or even ramen profitable.

* To be fair, the notion of "tax" being just supposed public good versus requiring transactional value ("no taxation without representation") was a founding issue for the U.S.

These days, instead of citing nebulous public good, perhaps it could be thought of as NOA and SOA fees: Nation Owners' Association fees, and State Owners' Association fees. You can look for a different neighborhood, or contribute to improve this one.

> the notion of "tax" being just supposed public good versus requiring transactional value ("no taxation without representation") was a founding issue for the U.S.

This was a representational issue, not non-transactional taxation. Property taxes existed in many colonies 100 years before the revolution.

Not usually mentioned: even for this illiquid group there would still be an additional deferred tax of up to 10% on the unrealized capital gains upon exit.

* Once passed, anything like this is unlikely to escape tinkering until it matches most other versions, that are not limited to "tradable". Look at how worried farms are, for example, another relatively cash neutral but cap gain increasing growth (ahem) business.

Correction: without SEEMING exceptionally wealthy or even ramen profitable. By, say, kneecapping your own profit. So that you don't pay as much taxes. Which is the entire problem we're trying to solve.

In practice, these people ARE wealthy. Just perhaps not on paper (depending the paper you look at). Of course when you observe their life, they are obviously filthy rich.

So we have an accounting problem. The papers don't accurately reflect the reality.

On the contrary, many variations of proposals (they keep popping up) cover partnerships or other forms of company holders as well.

Even in the Harris plan, though not usually talked about, even for the illiquid not-tradable group there would be a new deferred tax of up to 10% on unrealized capital gains upon exit. To be fair, "exit" implies an ability to pay that.

The market volatility, job volatility, international competitiveness, and impact on innovation and entrepreneurship, that this will cause will be absolutely chaotic.

Assuming it works out exactly as you believe, do you believe this will solve the US's financial issues and burdens? Everything i've read say they expect $300-$500 billion over ten years. Let's just go wild and say we get 1 Trillion a Year, currently the deficit for just 2023 is estimated at 1.5 trillion. Again wouldn't solve this issue, and that's assuming we spent 0 on any more social programs or other welfare programs.

Instead, why not focus on specific tax laws you feel are lax and more importantly hold your representatives accountable for the run-away spending? I assume based on your position you would be encourage to spend more on social programs than we currently do? It's noble.. where's the money coming from though? It's all a bit too communistic to me.

We have seen time and time again that laws passed end up impacting the middle class. Congrats, currency inflation continues to run rampant, your house value is through the roof now.... And because you don't have the capital we're going to seize it for non-payment of unrealized gains.

I have yet to see a well thought out logical response to the impacts this sort of emotional lawmaking will bring.

Can you counter the above genuinely? I truly want to understand.