Tesla more valuable than Volkswagen

[Velma's Dad]

A very selective list of statistics.

I met a Spanish student who had won a scholarship to an "elite school" in Canada funded by Amancio Ortega.

And what does Dan Price mean by upper-crust institutions? Theatre? Opera? Art galleries?

The point is that wherever it goes, the money ends up sloshing about in the economy. "Elite schools" and "upper-crust institutions" still need to employ a range of people from cleaners to CEOs.

That's the trickle-down theory but it's been pretty comprehensively dismissed by many economists. I won't try to quote any data but there are plenty of analyses that show that wealth inequality (NB not the same as income inequality, even though related over time) is negatively correlated with 'useful' circulation of money in the real economy.

Basically, rich people put their money into assets (real or financial) that gets separated off from the real economy. In many cases they hold those assets in tax havens but even if not, there is very little if any taxation on wealth in most places, including the UK.

 

[Amarillo]

That's the trickle-down theory but it's been pretty comprehensively dismissed by many economists. I won't try to quote any data but there are plenty of analyses that show that wealth inequality (NB not the same as income inequality, even though related over time) is negatively correlated with 'useful' circulation of money in the real economy.

Basically, rich people put their money into assets (real or financial) that gets separated off from the real economy. In many cases they hold those assets in tax havens but even if not, there is very little if any taxation on wealth in most places, including the UK.

If you look at the Gini Index (income equality index) generally the most successful economies rank closer to the middle quartiles, and the least successful economies closer to the outer quartiles.

But that is far from the point I was trying to make. There are benefits in having a few people with enormous wealth as it helps diversify spending. Also, it seems, that immensely rich people tend to spend their money more wisely than governments spend taxpayers money. Just look at the real difference Bill Gates et al are making to the lives if millions in their targeted battle against polio and malaria compared with decades of governments' spending on the disease.

 

[Velma's Dad]

...Also, it seems, that immensely rich people tend to spend their money more wisely than governments spend taxpayers money. Just look at the real difference Bill Gates et al are making to the lives if millions in their targeted battle against polio and malaria compared with decades of governments' spending on the disease.

That's a very debatable statement! Who should decide whether spending a big chunk of society's surplus output is 'best' spent on alleviating polio and malaria in developing countries, rather than (say) investment in the national health service of the people who generated that particular chunk of wealth?

In the example you gave, it's Bill Gates who decides, but he is un-elected and unaccountable to the people from whom the money was 'made' in the first place. Some people (including me, and presumably you, as it happens) might well feel very positive about fixing polio and malaria, but why should a minority get to determine what's 'wise' in the use of huge chunks of the resources generated by society? Isn't that a plutocracy?

 

[Amarillo]

That's a very debatable statement! Who should decide whether spending a big chunk of society's surplus output is 'best' spent on alleviating polio and malaria in developing countries, rather than (say) investment in the national health service of the people who generated that particular chunk of wealth?

In the example you gave, it's Bill Gates who decides, but he is un-elected and unaccountable to the people from whom the money was 'made' in the first place. Some people (including me, and presumably you, as it happens) might well feel very positive about fixing polio and malaria, but why should a minority get to determine what's 'wise' in the use of huge chunks of the resources generated by society? Isn't that a plutocracy?

No. It is their money to spend as they wish.

Other than the sheer quantity of money given, it is no different to me tossing 10p in the slot in the top of the local plastic guide dog rather than giving it to the exchequer to spend as he pleases.

My money, my choice.

Gates’ money, his choice.

 

[soulstyledevon]

No. It is their money to spend as they wish.

Other than the sheer quantity of money given, it is no different to me tossing 10p in the slot in the top of the local plastic guide dog rather than giving it to the exchequer to spend as he pleases.

My money, my choice.

Gates’ money, his choice.

Yet Gates himself has been dismayed at the low level of tax contribution he makes to the US system.
He has stated in the past that taxation for Americans top 1% needs to be increased by some margin...

 

[Amarillo]

Yet Gates himself has been dismayed at the low level of tax contribution he makes to the US system.
He has stated in the past that taxation for Americans top 1% needs to be increased by some margin...

There are four main forms of income:
Employment
Investment
Capital gain
Gift/inheritance

I cannot understand why of those four, employment income is the most heavily taxed.

A change in the taxation regime is long overdue.

But that has nothing to do with the right of the very wealthy to dispose of their wealth as they see fit.

 

[Velma's Dad]

No. It is their money to spend as they wish.

Other than the sheer quantity of money given, it is no different to me tossing 10p in the slot in the top of the local plastic guide dog rather than giving it to the exchequer to spend as he pleases.

My money, my choice.

Gates’ money, his choice.

Okay then, a thought experiment: suppose a handful of very "successful" people managed to secure control of key assets (productive land, say) and, due to the fixed amount of land against the growing supply of labour (as people were breeding quite successfully) the "successful" landowners then found that the return on land rents grew consistently at a faster rate than the return on labour paid to the people who worked in the fields and rented the land, so that the landowners became proportionately richer and richer until a handful of them controlled most of the land assets.

And next, the now super-rich minority used their financial and 'soft' political power to influence the elected politicians so that the tax regimes made the returns on land much lower taxed than the returns on labour, and they "invested" the surplus returns in other asset classes that also generated rents, and they also influenced the politicians so that inheritance taxes were minimal so that the concentration of wealth increased generation by generation. And each of those generations sent their children to schools where they ended up with a much higher chance than average of securing high political office: in fact they ended up making up nearly all the most senior politicians.

Then the super-rich used some of "their" money as charitable donations to fund the welfare services that they decided were what the people really should have, while putting the bulk of their assets offshore (or at least into legalised onshore low/no tax structures only available to people with capital assets above a certain threshold, that most of the population weren't even aware of), so reducing the overall tax base available to the elected politicians to spend on things that voters themselves would actually have wanted, if enough tax money had been available.

You can see where I'm going with this, it's called history.

 

[Amarillo]

You can see where I'm going with this, it's called history.

You are now moving a long way from the suggestion that wealth be restricted to a billion, implying a tax > 100% on income for the super rich, or some other measure to restrict wealth.

Yes, there should be restrictions on mergers and acquisitions, and anti competitive behaviour, but if someone wants to give their cash to a donkey sanctuary, I can’t see a good reason to stop them from doing so unless the aim is to corner the market in second-hand previously abused donkeys for commercial purposes.

 

[Velma's Dad]

You are now moving a long way from the suggestion that wealth be restricted to a billion, implying a tax > 100% on income for the super rich, or some other measure to restrict wealth.

Yes, there should be restrictions on mergers and acquisitions, and anti competitive behaviour, but if someone wants to give their cash to a donkey sanctuary, I can’t see a good reason to stop them from doing so unless the aim is to corner the market in second-hand previously abused donkeys for commercial purposes.

Okay, but please consider this scenario: you are "successful"/lucky enough to have amassed a reasonably humongous chunk of money. Billionaires get a lot of stick, so let's give them a break and say you have just £500 million. You don't want to live a conspicuously blinged-up lifestyle (most rich people don't) and only have to draw down say £1m a year for living expenses, on which you are assessed at say £300k UK tax.

Your £500m assets are locked up in low/deferred tax structures, or held offshore. So little or no wealth-based taxes.

Now, you think, I really think the British government is rubbish at using my "hard earned" tax money, so I'm going to give some money to charities - the ones I think do a really good and important job, maybe stopping polio in Africa, or feeding donkeys. So you give a million pounds a year (0.2% of your total wealth), leading to regular headlines every year "million pound gift from Amarillo saves donkeys from lives of misery". Everyone thinks you're a shining beacon of noble philanthropy. You get invited to sit on boards of august bodies, you throw a paltry 20 or 30k (pocket change, to you) at the political party of your choice, and a seat in the Lords beckons.

Meanwhile your million pound annual charitable giving completely offsets your UK earnings, reducing your UK tax liability to... zero.

It's quite legal and some would probably say principled - you gave lots of money away after all. How do you feel about that?

 

[Amarillo]

Okay, but please consider this scenario: you are "successful"/lucky enough to have amassed a reasonably humongous chunk of money. Billionaires get a lot of stick, so let's give them a break and say you have just £500 million. You don't want to live a conspicuously blinged-up lifestyle (most rich people don't) and only have to draw down say £1m a year for living expenses, on which you are assessed at say £300k UK tax.

Your £500m assets are locked up in low/deferred tax structures, or held offshore. So little or no wealth-based taxes.

Now, you think, I really think the British government is rubbish at using my "hard earned" tax money, so I'm going to give some money to charities - the ones I think do a really good and important job, maybe stopping polio in Africa, or feeding donkeys. So you give a million pounds a year (0.2% of your total wealth), leading to regular headlines every year "million pound gift from Amarillo saves donkeys from lives of misery". Everyone thinks you're a shining beacon of noble philanthropy. You get invited to sit on boards of august bodies, you throw a paltry 20 or 30k (pocket change, to you) at the political party of your choice, and a seat in the Lords beckons.

Meanwhile your million pound annual charitable giving completely offsets your UK earnings, reducing your UK tax liability to... zero.

It's quite legal and some would probably say principled - you gave lots of money away after all. How do you feel about that?

It’s monstrous. But it is still a long way from my point that capping the wealth of the ultra-rich is wrong.

I’m 53, and haven’t worked since May 2017, and pay less tax on my investment income than I would pay on the same amount of employment income. That also is monstrous.

But tax reform, philanthropy and capping wealth are different matters only loosely related.

 

[Velma's Dad]

But tax reform, philanthropy and capping wealth are different matters only loosely related.

I'm going to have to come back and disagree, in that I think they're extremely closely related, at least when it comes to the wealthiest stratum. I say that because, as I've argued above, philanthropy is so often an instrument of social and political power, and that in turn ultimately has a massive influence on how governments make policy including setting taxes, and (not) capping wealth, or at least redistributing it through fiscal systems.

By the way, I'm not arguing that major philanthropists are bad people, many/most of course are extremely well-intentioned. But a lot has been written in recent years from both inside and outside the philanthropy world, about how philanthropy and political power intersect. This book review sums up some of the arguments pretty well, if you have any interest (sorry, as you can tell this is a special interest area of mine!):

Give and Take (SSIR)

Callahan does an excellent job showing the many ways that major donors' charitable giving overlaps with their political aims, but he could say more about the broader context in which they operate.

ssir.org

 

[Amarillo]

I'm going to have to come back and disagree, in that I think they're extremely closely related, at least when it comes to the wealthiest stratum. I say that because, as I've argued above, philanthropy is so often an instrument of social and political power, and that in turn ultimately has a massive influence on how governments make policy including setting taxes, and (not) capping wealth, or at least redistributing it through fiscal systems.

By the way, I'm not arguing that major philanthropists are bad people, many/most of course are extremely well-intentioned. But a lot has been written in recent years from both inside and outside the philanthropy world, about how philanthropy and political power intersect. This book review sums up some of the arguments pretty well, if you have any interest (sorry, as you can tell this is a special interest area of mine!):

Give and Take (SSIR)

Callahan does an excellent job showing the many ways that major donors' charitable giving overlaps with their political aims, but he could say more about the broader context in which they operate.

ssir.org

So what do you propose as a solution?

BTW I think that a financial transaction to gain political power or political influence is spending rather than giving.

 

[Velma's Dad]

So what do you propose as a solution?

BTW I think that a financial transaction to gain political power or political influence is spending rather than giving.

In respect of the issues I outlined I think there is certainly a case for removing, or maybe tapering off, the tax allowances for charitable donations above a certain annual threshold (don't want to deter ordinary people from giving). Billionaires can still give, but only after they've paid their taxes.

Osborne planned to do that in 2012 but chickened out (the year of the infamous 'pasty tax' budget).

The more difficult and broader question is how to properly tax wealth, across borders. Which is indeed a tough one and getting tougher with the shift away from international norms and cooperation.

 

[Calimili]

Knaus Tabbert IPO today, they sold so many caravans and motorhomes , also thx to Covid , they got public.
My Calimili M&A department is considering architecting (is it a verb?) a synergy with Tesla to produce the first electric Campervan.
EHU might become mandatory and think how long your holiday in Italy will be charging the batteries with 2A!
Relax guys, just being ironic!

 

[willwander]

Knaus Tabbert IPO today, they sold so many caravans and motorhomes , also thx to Covid , they got public.
My Calimili M&A department is considering architecting (is it a verb?) a synergy with Tesla to produce the first electric Campervan.
EHU might become mandatory and think how long your holiday in Italy will be charging the batteries with 2A!
Relax guys, just being ironic!

Brave.
Came in at lower end, had a little boost today, at least it's not bombed.

 

[GrumpyGranddad]

The money eventually ends up sloshing about within the system, diversifying spending according to the interests of the benefactor rather than the political whim of the politicians - think Tate (art galleries), Carnegie (libraries) and Peabody (Education) compared with Thatcher (Channel Tunnel), Blair (Millennium Dome), [and Johnson (HS2)].

So in the future we might have, Gates (vaccines), Musk (space exploration) and Bezos (preschooling).

On another note, has anyone else noticed the uncanny resemblance between Jeff Bezos and our very own @hotel california?

View attachment 65990
Hotel California

View attachment 65991
Jeff Bezos

If you earned £250,000 a day since the birth of christ you still wouldn't be as rich as Jeff Bezos

 

[GrumpyGranddad]

If you earned £250,000 a day since the birth of christ you still wouldn't be as rich as Jeff Bezos

 

[willwander]

At the start of this thread, January 2020, Tesla had just become more valuable then VW.

Today Tesla is worth $526 billion, more than 5 times the value of VW

Musk also became the 2nd richest man in the world this week, ahead of Bill Gates but still some way behind Bezos.

 

[soulstyledevon]

At the start of this thread, January 2020, Tesla had just become more valuable then VW.

Today Tesla is worth $526 billion, more than 5 times the value of VW

Musk also became the 2nd richest man in the world this week, ahead of Bill Gates but still some way behind Bezos.

Its incredible.
Almost unbelievable...

 

[GrumpyGranddad]

Its incredible.
Almost unbelievable...

And they’ve only recently shown a profit!
Crazy world - A single Bitcoin is predicted to reach between $100,000 and $180,000 in the coming year or so.

 

[Borris]

Its incredible.
Almost unbelievable...

What goes up..........

 

[Amarillo]

And they’ve only recently shown a profit!
Crazy world - A single Bitcoin is predicted to reach between $100,000 and $180,000 in the coming year or so.

Tulip mania...

 

[Bellcrew]

What goes up..........

Next someone will suggest that a black tulip bulb is not worth the price of a decent house in Delft, madness.

 

[johnyboy]

 

[soulstyledevon]

What goes up..........

Didnt I say that at the start of the thread...?
I think we’ve missed the boat now...