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Old 09-04-2019, 04:18 PM
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Voyager is offline
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Originally Posted by Wrenching Spanners View Post
If you want an end to poverty, itís going to depend, among other things, on globalisation, innovation, and investment, not wealth transference. Some of that innovation is being done by start-ups with young smart people who hope to become rich. Some is being done by mega-corporation with investors who are already rich and want to become richer. The investment is going to be done by people who believe there are profits to be made in emerging markets, or companies that can connect to global markers. Globalisation is going to provide the networks to connect the poor people who want to make their labour more productive and more exchangeable for goods and services with the corporations who are going to provide them with jobs, goods and services.

Is a wealth tax of 1%-3% above $50 million going to stop the above from happening? No. What it will do is take money out of the system which will limit the investments and the money going into the R&D that produces the innovation. Check out Fiverr, a company that had its IPO back in June. (Itís Israeli based, but listed on the NYSE.) Their goal is to create a gig economy for professional services by connecting freelancers to companies with demand for those services via the Internet. If theyíre successful, and if they connect to a supply market of freelancers in the developing world, theyíve got the potential to generate a lot of positive activity, both economic and social. However, despite their stock price, it might be years before they generate a profit. Theyíre not going to be paying a dividend any time soon. Although their initial investors may have diversified a bit, most of them are maintaining their stakes. Itís a company that depends on long-term investors. And if any of its investors, such as the venture capitalists who enabled the companyís expansion to where it could have an IPO, are wealthy US investors, then a wealth tax on shares is going to eat away at their holdings. Theyíll be having to cash out before they want to, which discourages further investment, and will demand dividends to pay that wealth tax earlier than the company is ideally ready to pay them.

So hereís a company thatís poised to help the developing world that could potentially have its growth decelerated by a wealth tax. Itís more complicated than ďrich have money and poor donít have money; letís switch.Ē Thatís why conservatives donít like wealth taxes.
Wow, what an innovative concept Fiverr has. Except that I've found freelancers in Russia and India five years ago. Just a me-too company who clearly has sold you a bill of goods.
The Trump tax cut dumped a ton of money into corporations and the rich. Look up what it has done for business investment some time. Answer - not much. Lots of stock buybacks though. That really helps innovation and R&D. With low interest rates we've been awash in investment money for some time - it has driven up the stock market. Saying that taking some away is going to tank R&D is absurd.
Plus, the increased tax money is not going to be flushed down the toilet. Maybe it can pay for advanced research that is the basis of industrial R&D? Maybe it can pay to repair our infrastructure which has a high ROI. Maybe it can help do something about climate change which has an even higher ROI.

Who do you think staffs these start ups? Answer: young smart people who could afford to go to good universities, either here or abroad, and often to good grad schools here. If you want to increase the number of people who can work in start-ups you do it by improving the education and environment of smart kids who might not have access to computers and books today. Would free college help these kids? Probably a lot. Reducing the cost of state schools would help if you can't make them free.
Don't believe in the impact of free college? Check out City College in NY in the '30s. My mother could never have afforded an expensive college, but got a degree from Brooklyn College, Tons of poor kids got a great education there.