How to earn a billion dollars
paulgraham.com475 points by kingstoned 15 hours ago
475 points by kingstoned 15 hours ago
The amount of negativity to this is depressing. No one seems to be contradicting anything he's saying here, instead it's just vacuous ideology "extraction" etc etc. Purposely narrow reading. I've got kids, I want people creating start ups they can work in, the alternative is too grim.
PG makes little effort to identify what it means to earn something. Some people consider effort the measure of whether something is earned. Some believe luck should be subtracted from result to get what is earned. Some say you cannot earn the benefits you receive from your genetics. No idea of what it means to earn something is given except for making users happy while "not cheating" (who decides what counts as cheating he doesn't say). No consideration for ideas such as economic rent, inherited advantages, or negotiating leverage are discussed.
There is no way anyone responding to him has a lazier argument than he does.
You saved $500k to buy a beautiful home. You don't know how to build a home.
I do. I take the $500k from you and then pay $450k to a bunch of employees who put in 40 hours a week. I take home $50k. I earn $50k.
Now, you like the home so much you tell all your friends about it.
I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.
Market forces decide how much you "earn". There are plenty of blue collar workers who work 3 jobs and live paycheck to paycheck. There are SWEs who work 20 hours a week and make the bank.
>I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.
This is the "rock star" fantasy. You do something that becomes wildly popular and can then walk away while still making epic amounts of cash. You didn't earn that $1B through continuous effort. It was all made by your initial idea. It just takes time for the cash to be delivered in full.
Do you deserve to profit off a good idea? Yes, and few would contest that. Do you deserve to profit so much that you never have to work another day in your life? Should the system let people retire after having one good idea? That's going to seem like a sub-optimal system to many. However, its important to note that ideas take capital to implement, and it's much more typical for rock star rewards to go to those with the capital than those with the ideas. That's a system that many more will find to be flawed.
They are rewarded, yeah. And then they could retire, or they could take that money and put it towards more good ideas, like what Elon has done his entire life.
If we don't have a system for that, then how would you incentivize people to take on bigger risks, bigger projects, etc?
Also, should the lottery not be a thing? What exactly are you advocating by this line of reasoning?
Consider what happens in academia.
Imagine that making a ground-breaking discovery in physics came with a prize of a billion dollars. One good idea, and you can retire. Would that not harm science? Many scientists would keep working after their first prize because it's what they love to do. Some would accuse them with being greedy after they've made a few more discoveries. "Hey, leave some money for the rest of us!"
What I'm trying to get at is that the rewards for certain things are badly out of whack with what is necessary to keep people both rewarded and motivated. At least, in terms of what is healthy for society and progress. In general, the closer people are to the money the more unreasonable the rewards are. Perhaps people who are further from the money but who contribute just as much (or more) to society are right to be concerned.
P.S. Musk bought companies with people who had a lot of good ideas and convinced governments (mainly the U.S. government) to pay for it. He's always been a capital guy, not an idea guy. He desperately wants to be in idea guy, but his ideas are things like re-branding Twitter to X and the Cybertruck.
> P.S. Musk bought companies with people who had a lot of good ideas and convinced governments (mainly the U.S. government) to pay for it. He's always been a capital guy, not an idea guy. He desperately wants to be in idea guy, but his ideas are things like re-branding Twitter to X and the Cybertruck.
Personally speaking, I am sympathetic to the idea that billionaires (especially Musk) are often created more by government policy than market forces. Although for some reason the push to stop governments minting billionaires by fiat seems rather weak, which makes me think a lot of people are being disingenuous on the topic. Or maybe just haven't thought about it much. There is a bizarre zeitgeist where first the government has to give a man billions of dollars because something needs to happen ASAP, then they have to take the billions away because nobody thought the thing needed to happen all that urgently.
There is an overlap in the vibe between the people who are unhappy that the government rewarded Musk and the people who, at the time, were clamouring that the rewards for things Musk was doing were too low. 10, 20 years ago it was all "there isn't enough funding for electric vehicles", "world is literally ending from climate change" and "who is going to put money into batteries".
I'm not saying capital guys have no place. Should they be rewarded to the tune of a trillion dollars though, especially if most of it ultimately came from government coffers? That seems extreme to me.
The people closest to the money are the people who have the most control over how and who its allotted to. We really ought to watch them more carefully.
> You didn't earn that $1B through continuous effort
Why does it have to be earned through continuous effort? It seems like you’re defending a sweeping assertion (that you can’t “earn” $1 billion), but retreating to a narrower position based on a very specific definition of “earn.”
Yes, you can’t become a billionaire performing fungible labor compensated on a periodic (hourly or annual) basis. But I don’t see why that’s the dividing line between “earned” and “unearned.” A lawyer charging hourly will never become a billionaire. But there’s been a couple of lawyers (Joe Jamail, Mark Lanier) who became billionaires by securing enormous verdicts for their clients. Are you saying lawyers “earn” their money only if they charge hourly, but not if they get a share of the money they recover for their client?
That seems to be a weird definition of “earned” versus “unearned.” Maybe you can say that money is unearned when it’s inherited. Or that it’s unearned when it’s just accrued interest. Or that it’s unearned if it’s through socially questionable activities like high frequency trading. But most billionaires didn’t get their money in those ways.
>You don't know how to build a home. >I do.
Do you? Sound like the people you hired built the home. Do you know how to do what they did? Did you do it? What did you do to earn that $50k?
> I hire more employees and I take $50k profit per house but I build 20k houses and make $1B. I earn $1B.
This hypothetical isn't possible. There's no way you can directly manage the construction of 20k houses in a human lifetime.
In this example, someone has come up with a way to build houses $50k more efficient than someone else. Otherwise, they wouldn't be at a competitive price that includes a $50k *profit* per house. (profit = the price of efficiency).
So a person figuring out how to scale their homebuilding methodology by teaching others and providing the *capital* with which they can implement that methodology isn't worth anything to you? I can't imagine a society that could work without these features -- we'd all be re-learning best practices every generation because there'd be no incentive to scale up ideas that work.
So if someone invents a cure for all cancer that costs $1 to make, and they sell it for $2, in your world the value created by the inventor is only the profit from the vaccines that person *personally* manufactures themself? That's an insane and backward world that I'm glad we don't live in.
Hot take but people should be paid for working instead of ripping off people with cancer because they got to call dibs on intellectual "property".
Without making any value judgement, there’s a very clear distinction between earning wages as compensation for labor (even very high wages) and increasing your net worth through ownership of a company. That’s a valid distinction no matter how hard the second person works.
I have no idea if this is what AOC meant, but it’s clearly not possible to earn $1B via wages in compensation for labor.
Depends on what you mean by wages. Floyd Mayweather Jr.‘s career earnings are over 1 billion. Celebrities can get extremely high compensation packages especially when you adjust for inflation without an ownership stake in anything. Finance can be similarly well compensated at the very top.
Often very high compensation packages happen to include shares, but that’s just the form of compensation not an inherent requirement. Of course all paths to a billion dollars are so unlikely it’s really not a reasonable target unless you have already passed most significant hurdles.
> I have no idea if this is what AOC meant, but it’s clearly not possible to earn $1B via wages in compensation for labor.
Non-founders CEOs have done this, like Tim Cook. Also, Taylor Swift.
The reason her startup was growing so fast was simply that users loved what she'd built.
You don't just make the thing. The founder didn't become a billionaire simply because users loved her product. You market it and you distribute it and you do all the things normally associated with business. Your ability to do those things "well" has lots of room to cheat. Hasn't Uber and Lyft skirted a bunch of laws? Aren't there still a ton of drivers who feel cheated? Aren't there a bunch of share bikes and scooters lying around cities and landfills? Isn't it fairly standard to throw tons of investor money at your CAC to buy "love" and sabotage competitors? He mentioned Facebook, isn't its origin story connoted with theft? I can see angles where these don't count as cheating for some. I can see slivers where there's only so many degrees of separation you hold the billionaire responsible for what happens downstream. Even if not done intentionally, the accumulated wealth still resulted from some cheating though, no?
And there's the stock market. If he means the stock price when he's talking about things people want, then I might agree. You need to manage the thing people love, and by "the thing people love" I mean your product, and by your "product" I mean your stock price. Most of the billionaires became so because of their equity. We're well down normalizing that your product doesn't need to be profitable (where people love it enough to pay more than it costs to make) for the stock price to soar.
It doesn't count as engaging with the argument if he doesn't engage with it. I'm almost surprised he bothered to respond.
Edit: Interesting downvote situation going on throughout the comments.
Yeah this analysis (Not yours - PG's) is pretty poor tbh either he is intentionally glossing over the tactics and strategy necessary for one to acquire such wealth - or - he really lacks the fundamentals that is value (of equity) is a function of free cash flows to equity, growth and risk. And guess what, immense cash flow potential doesn't fall out the sky. It requires doing certain things. Such things can be considered dirty by many people.
Anywho, I was really unimpressed with the post.
also his argument relies on consumers being in a stable situation. desperate people 'want' a lot of things which makes them easier to exploit
The responses to PG were remarkably substantive and specific, in the direction you point out and others! The high-horse complaint about "negativity" was easily the laziest and least specific thing in this thread.
I don’t agree. You may agree with them but your agreement is not the same as substantive.
The allegations of PG ducking AOC's definition of "earn," the allegations of missing externalities, all the specific controversies -- you have made no post over 20 words, no explanation of why you find any of this criticism substance free. If you have something to say, say it.
I think we can clearly say that capital gains are not earned.
Someone who lays bricks, "earns" their income; someone who's wealth increases as a bricklaying company's value increases, does not.
In this sense, it is indeed impossible to "earn" a billion dollars...
>Someone who lays bricks, "earns" their income; someone who's wealth increases as a bricklaying company's value increases, does not.
How does this follow? Is the management effort in organising a brick laying company not count as work? Does the RND effort of a bricklaying company not count as work?
I would have used housing speculation as my example tbh.
The parent post is not talking about managers, they receive a salary and are taxed at regular income rates. It's taking about shareholders. Someone who makes money by owning a stock should be taxed more aggressively that someone earning a salary, IMO.
> I think we can clearly say that capital gains are not earned.
No, we can't say that at all, because most businesses are small businesses, owned by the people who run them, and capital gains are the owners' income from running the business.
The money startup founders make, from building something as PG describes, is also capital gains. So again, no, we can't say at all that capital gains are unearned.
> no, we can't say at all that capital gains are unearned.
Yes, we can say this. The IRS classifies capital gains as unearned income.
All production requires labor AND capital.
Your labor alone without materials, without tools, or a farm, or a factory, is just you flailing your arms in the air and producing nothing. Capital is as valuable an input to production as labor. You cannot have one without the other.
It's so funny to see people on HN who have clearly overdosed on Marx but have never read Das Kapital, where even the man himself acknowledges the critical role capital plays in production.
So if I'm a brick layer and I decide to innovate and build a machine that can lay bricks faster and cheaper, and I hire people to help me do that, suddenly I've not actually earned anything? If I'm a farmer and I use a horse and a plow to plow my field instead of with my bare hands then I've not earned anything? Putting your capital towards these things is absolutely "earning" and the modern economy is just a generalization of that which enables capital and need to find each other more readily.
We should all go back to being hunter-gatherers? Or how do you propose this is going to work?
You gave examples of creating and inventing things and employing and leading people. Those are value creation.
I don't think I fully agree with it, but OPs point wasn't about any of that and instead said capital gains (and clarified further - fungible, uninvolved capital without any other contribution). That's really different. If you want to attack that maybe use an example of passive index investors or pension funds allocating capital to a vc.
Capital doesn't just magically increase for no reason. It increases to the degree the business produces more value for its customers. Most business fail to do this, which is why most companies fail. Other succeed, and attract investors who want to put more capital into the business to help it grow more.
Starting a company that becomes worth $1M by creating $1M in value is a literally a capital gain of $1M for whoever owns that business.
Maybe the person who started that business wants to sell. 10 people buy $100k each in shares. Now they own the business. They hire a manager to grow the business and expand and create more value. Now the business is worth $2M. Those new investors created another $1M in value by hiring the right manager and making good decisions. This is another capital gain.
None of this is accidental or magical. Businesses that do well produce capital gains, and most businesses fail, and produce no capital gians.
Clearly my example didn't resonate but in my mind there is no difference between me using my capital in my business and me using my capital in other people's business. A passive index investment is me using my capital in the broader economy. So I am a bricklayer. I take my capital. I give it someone to design a brick laying machine. Or I am a bricklayer. I take my capital. I invest in the S&P 500. When I have the brick laying design I go to someone with more money and negotiate them funding my brick laying machine company. Those are all capital gains. Where is that imaginary line? pg specifically talked about startup founders.
Capitalism isn't perfect but it's the best system we have. We need to educate people better about how it works and we need to regulate it so it's not abused. But capital gains, or interest, are "earned". They are also taxed, and when those taxes are used for the right goals by the government, result in improving things for everyone.
> capital gains, or interest, are "earned"
According to the IRS, "unearned income" is money received from sources other than employment, such as interest, dividends, rental income, and pensions.
We tax it at a vastly lower rate than ordinary income, and we tax it not at all for the purposes of exponential compounding, which is the application in which it is most problematic. What fraction of Elon's capital gains do you think have ever been realized?
I am almost certain (not sure how we can check) that Elon is paying a lot more taxes than the average person. He doesn't get more services for that money. The top 1% income earners pay something like 50% of the total individual's taxes + their companies pay a lot of taxes. He's basically subsidizing any service you're getting from the government.
We tax capital gains less because we want people to invest their money in companies. As I said, we can debate the tax rates, some might argue we should lower the tax on capital gains (double taxation?) some might argue we should raise it. We should absolutely have an evidence based rational discussion on these topics.
No, we can’t clearly say that. If we could, they wouldn’t be taxable.
Yes, we can clearly say that capital gains is unearned. Unearned income can also be taxable.
What happens to the person who earns their income laying bricks when an automatic bricklaying machine is built? Is it unethical for them to earn that income because they are operating the machine? What about the person who finds them people who need bricks laid because the person who lays bricks finds it hard to get good clients who aren't a pain?
I really wish people weren't so easily seduced by the labor theory of value.
I think you are arguing against a strawman. I've never heard someone suggest that the machine operator shouldn't be paid. Same for the other example who would clearly be doing labor.
Typical ownership heavy replies, which want to equate other people's effort to their own...
100%
A lot of comments seem to not assume that ownership is equivalent to 'earning'. Why does capital need to pretend their wealth growth is equivalent to the effort of labour.
Effort is irrelevant. If it takes me ten years to grow one apple, should I get paid the same as someone who can produce 1M apples? Productivity is what matters, not effort.
People are more productive when they have tractors and seed and fertilizer and all the other requisite capital inputs for growing apples. In fact, one can hardly think of anything productive one can do with zero capital inputs.
You do not live on an island. There is trillions of dollars worth of both capital and labor at work underneath your every waking moment that supports your life. Your level of effort means nothing to anybody.
>No one seems to be contradicting anything he's saying here
So the exact same thing PG is guilty of in the article?
He disagrees with the opposing statement, gives a lazy counterexample with 0 evidence that introduces at least two major assumptions that do the the entirety of the work for his "argument", and then takes another few paragraphs to effectively say "just grow exponentially, bro".
There's nothing to push back against except vague hand-wavey nonsense. PG is washed and the level of discourse in the thread matches the quality bar of his post, so I'd say it's pretty appropriate.
The prospect of AI replacing white collar jobs has supercharged HN’s socialist bent.
Having been on HN for 15+ years I have found it fascinating to witness the fawning and adulation over pg blog posts completely reverse and everyone has turned on him now.
It used to be if you criticized anything in his blogs you’d get downvoted to oblivion. Now criticism is the norm.
As far as I can tell it’s less a change in pg’s viewpoints (though the topics have evolved, and he has gotten more transparent perhaps), but a change in the public reaction to them.
I’m not sure if it’s the same people though, might just be the new generation.
I still like to read pg but he keeps writing about things outside of his domain. Here for example I trust him to talk about growth rates and how startups work. But I don’t trust him to talk about wealth inequality and how political leaders respond to it.
Growth rates are central to wealth inequality: the r>g observation (due to Piketty, Capital in the 21st Century) is that both historically and recently the returns to capital exceed the growth rate of the economy. Trusting someone whose fortune was built on "r" and is staked on "r" to do anything other than cheer-lead his own balance sheet would be nuts. Hear him out, but please hear what Piketty (& fiends) have to say as well.
It's almost as though people and culture change over time.
To be less glib, that amount of time is more than ample to see a generational change in a sector as fast-moving as technology. Perhaps some robust push-back on his ideas better represents the a zeitgeist of people being less happy with a maximalist winner-takes-all attitude to business or personal success.
One thing I noticed is on HN where PG no longer hangs out the comments have gone negative whereas on twitter/x where he posts people are positive (https://x.com/paulg/status/2066124279448559907 on earn $1bn). I guess people who like him follow there.
If you met anyone, anyone at all, who’s views on the world hadn’t changed in the last 15 years - and I don’t mean this last 15 years, I mean any 15 year period - what would you think of them?
That isn't a very interesting question. If someone thought that murdering innocents was a bad idea 15 years ago and still thinks it today, gold star. If they think murdering is OK as long as you get away with it, then the length of time they've held that view really doesn't influence how dangerous they are. The nature of the view matters, not how long it is held.
It is quite possible for someone to have thought about their views before they formed them and maintain stable opinions over 15 years because they are aligned with objective reality. That is good. Then there is the opposite where they've got ridiculous views that don't make sense and they stick with them despite all evidence out of stubbornness. That's bad. But again, the exact view and the nature of the evidence is what matters.
The new generation is struggling with self-determinism and individualism.
This should not come as a surprise when they are forced to live with roommates because they can't afford a house or even an apartment to themselves because every cent is being analyzed for optimal extraction from them.
The HN readership has changed massively in that timeframe, from the earlier Hackers and Painters / libertarian ideology to a much more socialist outlook. I could speculate about the reasons for this, but my theories would probably attract even more downvotes than just pointing out the obvious change in tone will.
There is a real shift I think plus maybe a new generation.
I blame the pandemic and social media.
15 years ago things were quite different:
* There were far fewer tech billionaries.
* The tech billionaries were not publicly associating with far-right figures or cryptofascist belives, or at least were doing so quietly while promoting ideas of technology as social progress
* A lot of the tech startups were seen as fighting entrenched interests grounded in regulatory capture and people had the illusion that the next generation of companies supplanting these wouldn't succumb to the same factors.
* Donald Trump as a phenomenon of current politics did not quite exist yet, so we didn't have to witness these people sucking up to him
That's just for starters.
The essay kind of misses the point, as the question was mostly about the meaning of word "earned".
"Earned income", for tax purposes, matches pretty closely the kinds of income many people consider genuinely earned in the moral sense. From this perspective, if a startup grows organically and the founders become rich, they have earned it. But if the growth requires capital (an investment, a loan, or the wealth the founders already have), the situation becomes less clear. How much of the success can be attributed to the contributions of the founders and how much is based on arbitrary choices made by wealthy people?
If you now assume that existing wealth is mostly unearned, any success made possible by arbitrary allocations of that wealth is similarly unearned.
Halfway through your second paragraph you started conflating income with wealth/capital.
The wealth controlled by a startup investor becomes earned income, in your words, when the founder receives pay for their work, in the form of cash or exercised options or whatever else.
To get that earned income, which is derived from wealth but is not the wealth, they have to earn it in the same way the wagies in your first paragraph earned it. The investor (on the board, presumably) has to vote him in as CEO and approve his pay package.
And just as retail customers don’t give their money away for no good reason, neither do investors.
You are focusing too much on legal definitions.
The intuitive difference is mostly between the many and the few. Between the ordinary people and the elite. If your money comes from many small streams, it looks likely that many people have independently determined that what you are doing is valuable. If there are a few large streams, the situation is less clear. Maybe your contributions are genuinely valuable, or maybe someone is picking favorites or choosing winners in advance. From that perspective, capital is a poison that permanently puts the reasons of your success in question.
I can't speak for his other essays but this article was not great. He basically does some maths to show exponential growth.
The definition of "earn" is not on the chopping block. Nor is what it means to "cheat" - which he introduces pretty early on.
And times change. With the announcement: "[Insert name] is a billionaire!"
It used to be: "Congrats to them for making the world better in some way and reaping the rewards."
Now it is: "What did they leverage to force another subscription on us?"
I would have liked the essay more if PG had actually engaged with AOC's claims. He just does some math and shows that exponential growth is fast.
What did the founder have to do to keep growing at 93%? Good solid business fundamentals and identifying a new solution can get you some growth. But eventually you've done all that and the only way to continue growing is extraction -- buy out your competition and raise margins, outsource your workers, enshittify your user experience. THAT is why no one "earns" a billion. The last $900M pretty much always requires using your resources in clever but unethical ways to extract money from customers and financial markets.
> I would have liked the essay more if PG had actually engaged with AOC's claims.
I don't see why he should have engaged with them any more than he did, because AOC's claims are BS. He gave them more attention than they deserve.
What he should have engaged with is, what happens when a startup stops being a startup? All three of his poster children for startups, Apple, Google, and Facebook, are now notorious for treating their users badly and making money in ways that at least a substantial number of people don't think are "earning" money, such as monetizing users' data. And at the last of those three, the founder is still in charge, so even if PG can argue that Zuckerberg earned what he got from Facebook in its startup phase, that doesn't mean he's earning the money he makes now from Facebook in the same way. (And the other poster child he mentions, AirBnB, can't be said to have clean hands either at this point.)
To me that's the biggest gap in PG's worldview more generally, that I never see him address in his essays: once the startup phase is over, the company drops off his radar and he pays no attention to the collateral damage it causes when it's a tech giant. (And of course AOC's claims have nothing to do with this genuine issue either.)
Did people become billionaires at those companies before or after they started being enshittified?
I think there are different views you can have here. I think PG is in the group that thinks if you get a billion dollars, you earned a billion dollars. His distinction is between getting the billion dollars honestly or dishonestly. The alternate view is that you can get 100 billion dollars, presumably honestly, but that doesn't mean you earned a billion dollars. The first group will say this is splitting hairs. The second group will say that is the whole point. It the company gets a billion dollars, did it earn a billion dollars? Even more to the point, if the company earns a billion dollars, does the founder/CEO, or whoever is refernced in this post, earn a billion dollars? I think the two groups will just see this differently.
> I've got kids, I want people creating start ups they can work in, the alternative is too grim.
I also have kids. I want them to live in a just society where billionaires, whom Mr. Graham proudly grooms, according to his telling of the matter, don’t actively undermine the ability of ordinary citizens to earn a living wage, to have a say in self-governance, and to enjoy universal healthcare.
I think you'll find its not billionaires stopping that, its elected officials.
Yes their are. Majority of elected officials are just their instrument. The amount of money billionaires spend shaping media, lobbying and campaigns to get power and push propaganda to determine who is elected makes the fight to get people like AOC who are working in the interest of society so much harder.
Just because you managed to get a billion dollars of value attributed to your name does not mean that you know how to earn a billion dollars or that you have the first worthwhile clue to share to anyone else how they should do it. It's the blind trap of the successful. They lose situational awareness and can no longer accurately map their actions onto the world they actually live in.
Which is probably why this immediately devolves into a bunch of silly math and equally silly proclamations that don't seem rooted in any actual defined course of action. This is less than worthless, it's actively harmful.
> I've got kids
And this requires _a billion_ dollars? Perhaps an intentionally narrowed scope would be good for some of the HN audience.
Never thought I'd see "think of the children" as an excuse to requiring billionaires but HN will always find a way to surprise you.
What do you expect the reaction to be when he's, at best, taking a political cheap shot by misrepresenting what someone said and spinning it into absurdity?
It's an ugly ugly post, and that's what set the tone.
I hope your kids grow up to become better people than those who would write what PG wrote, and not spread lies about their interlocutors with straw man BS.
It's also an insulting post. Yeah we can add, thanks. That was never the problem. PG think math is what we were missing?
What if -- bear with me here -- it's possible for bright, motivated founders to create startups that your kids can work in, but those founders could be content with merely making a hundred million dollars? Because, and I don't know if you know this so you may have to take it on faith, that is still so much money that said founder and their family and very likely their descendants can live in extreme luxury for the rest of their lives even if they stop working right then.
I don't know what the best solution to the problem of wealth inequality is, but I know that we need to collectively get over this "but if people think they will be limited to a mere hundred million dollars in wealth they will have no motivation whatsoever to work" nonsense. You know what the motivation is? It's still a hundred million dollars, that's what.
How exactly do you propose keeping a founder from becoming wealthier once their company scales past the point where they are worth a hundred million?
The market is supposed to do that. Once an opportunity is identified there is a rush to compete and margin disappears, so the people still get the new, better thing, but for much cheaper.
What can happen though is that companies figure out how to prevent meaningful competition to preserve high margins. They're worth millions for the innovation but they get to billions through anti-competitive and extractive practices.
Most things don't behave like pure commodities regardless of anything that can be considered monopolistic.
I agree with you on it being hard.
But we can start by not forgiving CG on death. That seems like a no brainer with no downsides.
No downsides I respect, at least. "We want to keep the business in the family" should be ignored.
100%. I don't understand how anyone defends the "death loophole" for capital gains. If you get rid of it you could actually get rid of estate taxes, which are a kludge to capture some of the capital gains that are given away by resetting the basis at death. It's a nutty system we have right now.
My question was how do you prevent anyone from having over 100M? No motte and baileys please.
Guillotines are the classic method, and they are likely coming if we don't change course.
Revolutionaries often overestimate the appetite in the general populace for revolution. Also I'm not sure guillotines will be able to do much against the killer drones that palmer luckey is making
tax?
On what? You force the company to break up and liquidate so they can pay taxes?
You force the founder to give up their private property just because it is valuable?
Remember these are not dollar bills in the founders bank account. It is just the company they created is now very valuable. It does not mean it is liquid.
Owners being able to lock the value generated by workers solely within their family for generations has been tried. It ends in feudalism.
Are you proposing changing inheritance laws or are you proposing forcing companies to sell their stock in a firesale to be in accordance with the IRS? Be clear in your propositions please.
Progressive taxation, taxes on CG, inheritance taxes, and a well funded and non-partisan IRS.
None of these will prevent someone from gaining more than 100M. That is what is under discussion. I am not against more progressive taxes.
Which party is the IRS partisan towards? What do you mean by partisan?