That does not mean that he didn’t identify customers for the iPad. Market research is frequently inaccurate. Market research told AT&T that there was no market for cellphones, and they believed it.
The expectation of demand and the reality of demand are two different things. But show me a business plan that says demand will be 0 and the customer base will be nil.
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I’m not familiar with the iPad’s development, but regarding Oculus, I’d say the 10,000 people who pledged ~2.5m on kickstarter proves there is a market.
What percentage of capital gains which are taxed come from new ventures, and what percentage comes from standard market fluctuations?
Can’t find this number, but I found this interesting fact
However, even if increasing capital gains decreases venture capital slightly, this must be balanced against the benefits of increasing it on those not making investments in innovation. If only 5% of capital gains come from innovation, perhaps the slight decrease is worth it for social good.
Ultimately, Jobs recognized correctly that if he built the product people would buy it. When you’re evaluating an investment opportunity, you look at ROI. In ROI, the R is highly dependent on the future demand for your product. For Jobs there was no demand today, because there was no iPad today, but he expected demand in future that would drive returns on his investment.
WillFarnaby is suggesting that increasing consumption can’t happen without more production, as though encouraging production is the way to increase consumption. My point is that companies will not invest in production if they don’t have expectation of increased demand for the product.
If you’re meeting all the demand for your product, and you expect demand to be stagnant, you won’t get a return by investing in a larger factory. You get return by investing in a process that lets you lay off 5% of your workforce and maintain your volumes. You get a return by offshoring your help desk to India.
If you can increase demand, your investments will favor growth, hiring, construction, etc. rather than cost cutting.
To be fair… few people paid anywhere near 91% with all the available deductions and loop holes. That being said, good old Mitt would have paid closer to 50% than the disgusting 12.x% he disclosed during his campaign.
Though it will never happen, I am all for a consumer tax. Mr. Rich, Mr. Middle Class and Mr. Poor all pay 20% on anything they buy and keep almost their entire paycheck (save for SS/medicare)
Mr. Rich buys a yacht and a summer home
Mr. Middle class buys a 70" TV
Mr. Poor is buying a 5lb bag of navy beans
That IMO is strong foundation for some semblance of income equality.
Mr. Poor
…except for being regressive, and affecting Mr. Poor proportionally harder than the others?
Jobs did not make a serious investment in the iPad without basing it on something. Do you have a credible cite that Apple did market research and Jobs concluded that there was not demand for tablet computers? Jobs figured out how to fix the issues (mainly battery) that plagued the earlier tablets that were in the market and make the iPad consumer attractive. Including lessons from Newton.
Secondly, Jobs did not “bet” Apple on the iPad. It was not a bet the company bet. Or do you have a cite that following the success of the iPod, iPhone, MacBook Air, etc, that failure of the iPad would have resulted in bankruptcy of Apple.
You mean the part of Mr. Poor’s paycheck that does not go for food or housing? Especially since Mr. Poor is paying sales tax and payroll tax now, but very little in income tax.
Most Mr. Rich’s are unlikely to consume all or even most of their paycheck. Taxing consumption will have little impact on them. He has bought a yacht already if he wanted one.
My daughter rode with the daughter of a guy who became Mr. Rich after the company he helped found went IPO. He bought a helicopter. He bought some cars. He bought houseboats to get the docks. He bought toys. And his wife said she would leave him if he didn’t stop getting the crap already that she had to deal with. There are some limits.
I don’t think many people would dispute that increasing capital gains tax would have some difficult to quantify reduction in investment. I would sugest that:
Most investment is not in high-risk, high-growth areas. As such the potential loss would be small in comparison to the potential gains from the increased tax.
Society could (depending on what the money was used for) benefit more from the re-allocation of those funds than it would lose out from the small lose of investment.
Assuming that the money is re-distributed to the consuming classes, either directly through tax cuts or indirectly through services, the wider economy including risky start-ups benefit from increased demand.
The main supposition is of course that the money from any tax increase is used wisely, which is always far from certain.
Really? But taxes on income don’t inhibit work? All income, whether from labor or investment, should be taxed at the same, progressive tax rates. It is the only fair way.
I think the problem you’ve actually pointed out here is that it doesn’t make sense to treat all investments identically.
While I think your point has merit and is a popular thought (probably one of the reasons why we do not have a consumer or flat tax), I would posit that the effect is no worse than it is now and in fact much better because of the loop holes the “rich” always use. Can we agree that there should be NO SCENARIO where a multi-millionaire such as Romney should EVER pay a mere 12.9% income tax while the aforementioned Mr. Poor pays effectively 25-50% more?
THAT is obscene and IMO the very definition of the poor getting hit proportionally harder. With a consumer tax, sure the Rich are still impacted less but compared to the above scenario? I think not. In fact, I am not sure how much more disproportionate it CAN GET compared to where we are currently. Perhaps some controls could be introduced that help with more basics costs of living such as housing/rent so help level the field a bit. It is not just about future spending but I would offer that taxes on property for example should remain so that Mr. Rich’s 6 bedroom with a pool tax him more than Mr. Poor’s 1 bedroom shanty 
In the end, I think the poor have been and will always be hit harder (relative to their income) in a capitalist society but we can improve what is EASILY the most inequitable tax system this country has ever seen. Trickle down economics failed mightily for anyone not in the highest tax brackets (this coming from a guy who used to think Reagan walked on water… namely for his military/cold war stance and bravado) and we have solid evidence that the “job creator” label is disingenuous at best and a downright lie at worst.
For the record, I am active trader, have a very respectable salary and savings and pay taxes at or near the top bracket yet consider myself the middle class.
Sure, although that is a largely a matter for a discussion of capital gains rather than income.
Not a bad idea…but I think that’s begging the question of the fundamentally regressive nature of consumption taxation. When we start with regressive taxation, and then decide that maybe that’s not the best thing for our society, we then have to make changes to make it less regressive–to overcome the problems we implemented to begin with. I’m not sure that will end up with the simplification you seem to seek.
I agree on all points. With the caveat that I’m a bleeding heart and borderline socialist, so my definition of “inequitable” is not necessarily the same as yours. 
If you pay at or near the top federal bracket, you’re grossing $400k. I absolutely accept that you consider yourself to be middle class…but I’m not sure I agree. 97th percentile is not really “middle,” IMO.
Is 18.4% also obscene?
Yes it is!
Please do not confuse my targeting of Romney as firing from one side of the aisle (although to be fair, I see how that could be construed). Romney was just the one most people saw in the media so i used it as an example.
Rich is rich regardless of political views and I am sure MOST of the very politicians that we hear attack and defend the tax system enjoy lower taxes than most of us realize or would consider “fair”.
Well, yes. And you’ll note that Obama agreed, unlike Romney.
Let’s just make Income= Income. Capital Gains taxed the same as Earned.
President Obama, Mr. Buffett, and anyone else who thinks their own taxes aren’t high enough are free to send a check to the U.S. Treasury.
http://www.fms.treas.gov/faq/moretopics_gifts.html
Have they done so?
I don’t have an exact cite for you, because this was widely talked about in tech circles at the time and I drew the knowledge from memory. But I can easily give you another example that didn’t work out - the Segway. Dean Kamen was certain that it was going to revolutionize how we got around. He thought entire neighborhoods and even cities would be designed with the Segway in mind. Many analysts and journalists bought into the hype and predicted massive sales. However, Kamen was completely wrong and the product was a colossal flop with respect to its predicted market penetration.
History is full of innovative products that were going to change the world and didn’t. And of course, many innovative products DID change the world. The ones that did created new demand, and in many cases it was demand that didn’t exist at all until the product was available and people saw what it could do.
The personal computer itself was one of those. When they first came out, many people were simply baffled and had no idea what they would be used for. Hell, the manufacturers themselves didn’t know. They were in search of the ‘killer app’ to create demand for the thing they created, but had no idea what that app was. Then Visicalc came out for the Apple II, it created demand for a product that was having trouble justifying its existence to anyone other than a small number of hobbyists.
Or have a look at Microsoft Windows. Microsoft was notorious for tinkering with the operating system without consulting their market. Windows 8 relied on a vision of a common user interface pushed by a couple of big-wigs at Microsoft, against the opposition of the market and of Microsoft’s own engineers. And it failed. So did ‘Bob’, Microsoft’s attempt to create a dumbed-down operating system no one wanted. But other innovative products have succeeded because they tapped into a demand that was previously unknown.
Google is another great example of this. Google creates product after product, throwing them at consumers to see what takes, and killing the products that don’t. Instead of doing market research and responding to unveiled demand, they build stuff they think is cool, then find out if there is any demand for it. It’s a shotgun approach to product development.
Consumption can also drive supply, and I think that’s most true with commodities. When there is no differentiation or value change for products from different manufacturers, the market becomes more stable and predictable, and production changes respond to changes in demand.