Wealth Cap

[JagerIV]

I've been thinking on this. Its obviously on a first step anti Libertarian, but and as any policy implemented, can be implemented badly, but I've been thinking about the principles behind it and its justifiability.

The basic idea is a Wealth Cap at a fairly high level, for both corporations and individuals, based on an objective measure. I was thinking 1% GDP. The details of how exactly that gets counted (specific year, 5 year rolling average, etcetera), are more details.

So, in 2020, 1% of GDP would be $200 billion.

For individuals, the only person who is listed with a worth over this is Musk, at about $240 billion. However, this is Net Worth, while I think "gross" worth would be more meaningful, so one can't hide the level of wealth one has by just taking on debts. Still, lets take $240 billion dollars as close enough to Musk's true wealth for illustrative purposes.

The goal would be to have it set up so the best solution for him is to divide his holding down. For example, he has two sons who seem to have just reached 18 years of age. If he gives each of them $40 billion dollars, his worth is reduced to $160 billion, still enough to be a major player, his practical power is not seriously reduced, but the number of financial sovereigns has increased from 1 to 3. Power has been divided.

Even better, if Musk instead of just giving money to his children, to get bellow the $200 billion limit divided his $40 billion surplus between his 40 closest friends and allies. A billion probably buys quite a bit of loyalty, but assets are now in individual, independent hands: Musk there is now in the position to be head of an informal, loyalty based system of first of equals, instead of the owner divvying up his assets to be managed by employees.

Such above would also represent a great increase in the number of billionaires, from about 614 in 2020 to 654 if Musk minted 40 new billionaires, a 6% increase.

Tesla, interestingly, only has assets of $60 billion, well below the $200 billion limit, so nothing would currently have to be done about Tesla itself.

GM in comparison does have $244 billion in assets, over the threshold. However, it is not overly so. A split into GM East and GM West, or some other split that makes sense to the shareholders, selecting new CEOs based on the preferences of the first and second largest stockholders, or however the decision gets made by the shareholders to divide up the company, doesn't require too extreme a shift.

Where you would get extreme shifts are many of the financial institutions. For example, Citigroup has about $2.3 trillion in Assets. Getting everyone just under the $200 billion threshold requires breaking citigroup into 12 new companies. On the other hand, that is still less than one new citigroup per state, so you can have Citigroup NY, Citigroup LA, Citigroup South, Citigroup Prarie, Etcetera.

So, with the examples showing the kind of outcomes being aimed for, why do this? In summary, it mostly comes down to breaking up and preventing dangerous concentrations of power. Dangerous for the following reasons:

1) Avoid too big to fail: Citigroup being 15 companies instead of 1 would likely raise the risk for any particular investment/holding, but the chance of overall failure, or moral hazard where any particular organization failing is too dangerous to accept, are minimized.

2) Dilute corporate power: current to conservative minds, people like Larry Fink of Blackrock has a $10 trillion dollar stick to wield against his enemies in order to encourage the adoption of ESG scores. If those $10 trillion were instead spread out over 50 $200 billion dollar asset management groups, Fink being one of 50, even if that 50 operated as a bit of a Cabal, would find pushing something like the ESG more difficult.

3) Isolate Political activism power. Under the current situation, if North Carolina does something Yankee culture disagrees with, political pressure can be applied to those in the HQ in New York city and the company overall bent to Yankee will though legally enforced means. If Citibank Carolinas is a legally distinct organization from Citibank NY, while pressuring the NY office can apply something, the channel is signifigantly weakend from ownership to the NY CEO trying to convince his co-equal Citibank Carolinas CEO in the Citibank club. And NY CEO is likely, even if in a superior situation less likely to push hard, since the Citibank group is undergrurded by trust, loyalty, and mutual interest, rather than legal ownership, and destroying that relationship could instead lead to a schim in the Citibank group, something he probably would not want to risk, especially over a bullshit issue.

4) Shift the balance of power away from banks (and financial institutions in general). Currently, GM dealing with Blackrock is the far junior partner in that relationship when GM needs to raise capital. If BlackRock is now 50-80 different companies however, and GM is say raising $25 billion dollars, it might be borrowing $1 billion from 25 different funds, which is slightly more complicated, but not immensely, especially compared to the size of project implied by a $25 billion capital raising, and puts GM in the position to be negotiating to make a deal with 25 out of about a 100 funds, rather than 1 giant one in Blackrock.

5) Limit ambition. I'm beginning to consciously believe society does need to apply limits to ambition, lest the over ambitious destroy society. Its acceptable to want to be President of the United States. It is not acceptable to wish to be God Emperor of the United States. Its not even acceptable to wish to be President for more than 8 years. Somethin similar should apply to the private sphere as well. Of course, you also don't want to overly harm the ability of the competent and ambitious to put their competence and ambition to good use. Thus the threshold is placed very high. And, it doesn't even really put a hard cap on empire building, merely its form: for lack of a better word, it merely requires "democratizing" his power: If Musk's dreams of an interplanetary SpaceX take and he builds a $1 trillion dollar company, Musk can still effectively control that, its just that his empire would be built on the trust and loyalty of 10-20 vassals, loyal to his vision and cause, but independent and powerful in their own right if they came to disagree with the vision or Musk betrayed their trust and loyalty.

6) Reversing, at least in part, the Managerial Revolution. Many institutions have moved far out of traditional capitalism, for example where the capital is owned and operated, to vast managers, appointed to lead huge Bureaucracies that they don't actually have any stake in. This seems to have a wide range of downsides, from the concentration of power, the mindset difference between a CEO who truly owns it as well, compared to one appointed as the mere head manager for owners who are often in the mass non-entities. This cap should hopefully increase the number of true sovereigns in the business world, and shift it a little bit back from a class of socialist minded managers of public goods to Owners of their own, personal fiefs.

Hopefully, that is a sufficient explanation of the idea I'm toying with. This is a relatively new thought for me. I'll probably have to go through and clean this up a little bit more after review, but I'm feeling a bit impatient and want to get my ideas out there for now.

Hopefully someone besides me finds this interesting.

 

[RichardClock]

No, stealing is bad.

 

[JagerIV]

No, stealing is bad.

Are overtime rules and term limits stealing? Are existing anti-monopoly rules stealing?

If we believe in limiting the power any particular public figure can have, why not apply the principle to the private citizen?

 

[Cherico]

The problem isn't that there are rich people rich people through out human history.

The problem isn't that there are elites you cant have any kind of government with out them.

The problem is, that the western worlds ruling elites are doing stupid cult bullshit that is making everything worse. We don't need saints, we don't need to steal from people we just need people to be less stupid.

 

[KilroywasNOTHere]

the issue here is (Just as it is with any system) who gets the right to control the means of production and by what right do they get to control it? By right of divinity? divinity is whatever the priesthood says it is. The King? A king bleeds and has vices just as any man. Society: aka the people? If the last several years have taught us anything that sapience and awareness is a learned skill, it's not something that comes naturally to people. When left to their own devices people are as easy to train as dogs, in some ways even easier.

You want fair, fairness is pistols at six paces last one standing gets all the loot. Fairness is a coin flip. "Heads I get the loot tails you get the loot. The only cure for slavery is self-determination but let's be real that requires too much work. it's much easier to expect someone else to do the hard/dirty work and then come up with a justification so we can live with ourselves. I'm with
Cherico. We don't need a holy caste. we need grit.

there is a difference between being tender hearted and not wanting to be as cold as steel, Vs being too lazy and not having the will to put in the actual effort to live. Too many people are the later pretending to be the former. it's how you end up with things like communism and socialism.

To be frank, I find it hilarious that we are going full circle to where we are entertaining the arguments that lead into communism. I warned everyone from the word go this is what would happen if we staired to long into the Abyss. how long before some of us here start to declare that "The left is on the right side of history, I just hate them by virtue of them being my enemy." at this rate, I give it about 3-5 years. Maybe sooner.

 

[JagerIV]

The problem isn't that there are rich people rich people through out human history.

The problem isn't that there are elites you cant have any kind of government with out them.

The problem is, that the western worlds ruling elites are doing stupid cult bullshit that is making everything worse. We don't need saints, we don't need to steal from people we just need people to be less stupid.

Wouldn't making sure there are more elites, and more truly sovereign elites, be a benefit though? $200 billion dollar wealth cap, which would adjust annually in some manner for changes in GDP and inflation, is hardly outlawing Elites. Especially when that cap is not tied to a tax, or at least ideally it should almost never come down to a tax, and instead encourages the spreading of that wealth to friends and family, rather than maintaining direct ownership over a truly immense amount of wealth?

No, stealing is bad.

Where in the above plan is there even really stealing? Forcing the super wealthy to democratize their wealth/power, and wield it in a less dictatorial way does not really seem to really meet any reasonable definition of stealing. It just forces the wealthy to build their empire on loyalty and trust, rather than government coercion. And for those not willing to empire build in a pro-social way, puts a (very high) cap on ambition and avarice.

 

[Cherico]

Wouldn't making sure there are more elites, and more truly sovereign elites, be a benefit though? $200 billion dollar wealth cap, which would adjust annually in some manner for changes in GDP and inflation, is hardly outlawing Elites. Especially when that cap is not tied to a tax, or at least ideally it should almost never come down to a tax, and instead encourages the spreading of that wealth to friends and family, rather than maintaining direct ownership over a truly immense amount of wealth?



Where in the above plan is there even really stealing? Forcing the super wealthy to democratize their wealth/power, and wield it in a less dictatorial way does not really seem to really meet any reasonable definition of stealing. It just forces the wealthy to build their empire on loyalty and trust, rather than government coercion. And for those not willing to empire build in a pro-social way, puts a (very high) cap on ambition and avarice.

the problem isnt money its getting people to be less retarded, and brother if we could fix that it would fix so many things....

 

[JagerIV]

the problem isnt money its getting people to be less retarded, and brother if we could fix that it would fix so many things....

Isnt the immense wealth concentration partially feed into the retardedness, for the various reasons described above? Sure, its no magic bullet, but I think a society with a (very high) wealth cap like described would be healthier than one without, for the various reasons described.

 

[KilroywasNOTHere]

Where in the above plan is there even really stealing? Forcing the super wealthy to democratize their wealth/power, and wield it in a less dictatorial way does not really seem to really meet any reasonable definition of stealing. It just forces the wealthy to build their empire on loyalty and trust, rather than government coercion. And for those not willing to empire build in a pro-social way, puts a (very high) cap on ambition and avarice.

but who controls the treasury? MAD works but it only works if the destruction is MUTUAL. Otherwise taking someone's wealth at gunpoint and calling it democratizing is still taking someone's wealth at gun point. Who watches the watcher and puts their head on the line so that they don't become elites in their own right?

I'm not generally one to pull a Tarkin, but having a certain amount of fear for your life can be healthy.

 

[prinCZess]

Where in the above plan is there even really stealing? Forcing the super wealthy to democratize their wealth/power, and wield it in a less dictatorial way does not really seem to really meet any reasonable definition of stealing. It just forces the wealthy to build their empire on loyalty and trust, rather than government coercion. And for those not willing to empire build in a pro-social way, puts a (very high) cap on ambition and avarice.

It creates a system in which government coercion is allowed free rein as an arbiter of defining and seizing 'excess'.

The only route you'd have an argument here is if the cap also applies to that government.
Of course, at that point you repeat the problem because the government is the arbiter of defining and seizing excess, and government excess would be excluded and made an exception instantaneously because it is the (only) route by which anyone greedy may accumulate.

 

[KilroywasNOTHere]

It creates a system in which government coercion is allowed free rein as an arbiter of defining and seizing 'excess'.

The only route you'd have an argument here is if the cap also applies to that government.
Of course, at that point you repeat the problem because the government is the arbiter of defining and seizing excess, and government excess would be excluded and made an exception instantaneously because it is the (only) route by which anyone greedy may accumulate.

Also those resources go somewhere unless you just burn them or throw them into space. So if they are confiscated, someone somewhere has them.

 

[bintananth]

I don't think there should be a wealth cap. That's flat out theft.

I do believe in progressive taxation. That is, the more you make - after business expenses - the higher the tax rate.

I think the highest marginal rate* mine ever hit was 42.8% and I didn't bitch.

* The tax on the next dollar of your income.

 

[Simonbob]

Looking at your idea?

The last years Federal Gov Spending, US, was 6 Trillion.

That's 6 thousand billions.



When you can get that under 200 billion, I'll be all in.

 

[bintananth]

Looking at your idea?

The last years Federal Gov Spending, US, was 6 Trillion.

That's 6 thousand billions.



When you can get that under 200 billion, I'll be all in.

The last time the US Gov't actually had a surplus was 2001.

 

[Agent23]

The last time the US Gov't actually had a surplus was 2001.

Yay, Bush/Obama forever wars and neocuck financial illiteracy.

 

[bintananth]

Yay, Bush/Obama forever wars and neocuck financial illiteracy.

Bush is when the tax cuts for the wealthy started. The 42.8% marginal I mentioned upthread was during Clinton. Toss in Social Security and Medicare ... it hit 50.5% for a bit before dropping due to cutoffs.

 

[Agent23]

Bush is when the tax cuts for the wealthy started. The 42.8% marginal I mentioned upthread was during Clinton. Toss in Social Security and Medicare ... it hit 50.5% for a bit before dropping due to cutoffs.

TBH I think that people should only get cuts if they:
1) Have children.
2) Have started a small business.
3) Are saving up on their own for retirement in some form of highly-diversified, low cost index funds.As things are going at least 20% of earnings will have to go towards retirement.

As a former libertarian, I am principally against some people paying higher percentages while others pay nothing, but anyone who generates massive amounts of money through crony capitalism, like the Bezoses and and Jeremy Diamonds of the world should be penalized in some way, same goes for all the rich politicians.

 

[bintananth]

As a former libertarian, I am principally against some people paying higher percentages while others pay nothing, but anyone who generates massive amounts of money through crony capitalism, like the Bezoses and and Jeremy Diamonds of the world should be penalized in some way, same goes for all the rich politicians.

I'm of the opinion that progressive taxes are a good thing because after a certain point you can't spend all of it no matter how hard you try.

 

[ProfessorCurio]

No single individual or interest group should ever control enough of the money supply to be capable of acting as an economic wrecking ball for the entire economy or for that matter a concentrated political powerhouse without restriction upon such for the same reasons private citizens should not own deadly nerve agents or nukes without restriction.
If something can be abused by a sufficiently motivated arse with a little bit of skill and luck then at some point it will be abused.
While some issues can be countered by printing more money that sets us up for an inflation catastrophe.
I care more about the sanctity and preservation of rights in general then I do just about the right to private property or ability to keep what you earn where where they extend to such limits.

Every right ought to have a logical limit:
Ones bodily sovereignty should not extend to the being late in pregnancy and capable of surviving independent of said womb and acting as a separate organism upon birth at that point and after anymore than the baby that depends upon your milk and handling.

Free speech should not include without need and while reasonably knowing what one is doing defrauding, causing lethal panic, or inciting the likes of rioting.

Your private property rights should not extend to that which you have stolen by force or fraud or to that which is illegal for reasonable reasons, without further encroachment, and to which the supermajority public doth consent.
Reasonable reasons ought to principally include the protection of other rights so long as restriction imposed is the minimum of what is needed or else such reasons should be yet stronger.


We need for our money to have the following traits:
Enough in circulation to be utilized effectively as a means of exchange for the common citizen and companies and private individuals handling significant projects.
A small enough quantity to maintain value and be feasible for the average citizen to easily manage their own cash and for trade with other countries to be handled reasonably.
For adjustments to the money supply and amount in circulation to be insufficient in scale to cause damaging disruptions.
And for no single private entity to be capable of using their shear percentage of wealth to forcibly disrupt, hamper, or force into allignment with them everyone else directly or indirectly.

 

[JagerIV]

but who controls the treasury? MAD works but it only works if the destruction is MUTUAL. Otherwise taking someone's wealth at gunpoint and calling it democratizing is still taking someone's wealth at gun point. Who watches the watcher and puts their head on the line so that they don't become elites in their own right?

I'm not generally one to pull a Tarkin, but having a certain amount of fear for your life can be healthy.

I'm not quite sure what this has to do with the current proposal. Maybe if you have a general anti government stance, maybe, but prior discussion with you do not give me the impression your a legit anarchist.

Treasury doesn't necessarily have much of anything to do with this. I'm just not really sure what point your trying to make in regards to this specific suggestion.

It creates a system in which government coercion is allowed free rein as an arbiter of defining and seizing 'excess'.

The only route you'd have an argument here is if the cap also applies to that government.
Of course, at that point you repeat the problem because the government is the arbiter of defining and seizing excess, and government excess would be excluded and made an exception instantaneously because it is the (only) route by which anyone greedy may accumulate.

Well, the US already does that, and has that moral authority, its part of the justification of progressive taxes, as well as the trust busting and anti monopoly rules. The government having the moral authority and duty to regulate and limit "excess" concentrations of private power is an at least 100 year old principle, and probably older.

This I think is a much fairer, less arbitrary, and much more effective means of achieving the ends desired with those laws.

I don't think there should be a wealth cap. That's flat out theft.

I do believe in progressive taxation. That is, the more you make - after business expenses - the higher the tax rate.

I think the highest marginal rate* mine ever hit was 42.8% and I didn't bitch.

* The tax on the next dollar of your income.

But, a progressive tax is mor theft than this wealth cap? Progressive taxes concentrates wealth and power in the government, while this spreads out wealth and power across multiple individuals.

Also those resources go somewhere unless you just burn them or throw them into space. So if they are confiscated, someone somewhere has them.

Where the wealth goes is described in the post though? If, for example, Musk has $250 billion and the cap is $200 billion, he gives $40 billion each to his two 18-19 year old sons. Or, if he doesn't believe his sons are ready for that amount of money, he divides it up between his loyal allies and underlings. Producing some 10-50 new billionaires.

The system I'm imagining is something like

1) Your cap is the $200 billion or so averaged over a 5 year period.
2)He goes over, and believes its not a temporary bump. He thus has 5 years to get his average below $200 billion.
3) So, he gifts billions to his loyal underlings, or transfers it to his of age children (so its clearly a real transfer of ownership, and not a paper one).
4) If he's incompetent and can't spread his wealth around fast enough, he pays some fine for being over, say 10% of overages. Enough to be painful so its not easier to just eat the fines every year, but low enough its not outright confiscatory. So, for example, if he ended the 5 year period with an average wealth of $210 billion, he pays a $1 billion dollar fine (10% of $10 billion).

Ideally though, this plan generates no income for the state. Because that's contradictory to the goals of it.

Looking at your idea?

The last years Federal Gov Spending, US, was 6 Trillion.

That's 6 thousand billions.

When you can get that under 200 billion, I'll be all in.

I actually have been toying with a scheme that gets its split down to a couple billion per person. Spitting government power is a different policy than private power, which this is concerned with. More steps and reforms necessary to work it as well.