Title should be “US leaders passed legislation that allowed for limitless future tax free earnings if redeemed after age 59.5”.
Propublica does good work, but they reduce their credibility when they put out clickbait to induce rage at a single person playing by the rules. Guess it is easier to get people riled up against one “evil” person than the myriad representatives the populace voted for.
There's two things I find worth considering as maybe-wrong:
1) non-public investment opportunities in combination with tax-free status
2) no sanity threshold to collect some taxes after your Roth balance becomes large enough
1 is maybe a violation of the spirit of what a Roth was designed to be used for. You should be able to invest (cash only would be dumb), but you shouldn't get tax free returns for every kind of investment you make. Public shares might be tax free, but using the Roth for venture capital or private investing seems a little wrong.
2 is just silly to me, and I blame lawmakers for that. No one needs $5b tax free, especially since you can't ever reach that with contribution limits.
In Canada we have something called the "Tax Free Savings Account" which functions in a very similar manner. EXCEPT when the CRA started figuring out people were using it for private assets, like non-public company shares, they changed the rules.
And it is yet another thing to say “in 1999, someone gambled $2k worth of equity and got lucky it grew to be worth a few billion 22 years in the future.”
That's not really what happened if you read the article. The Bush admin created a deliberate hole in the program to allow investors to convert holding to Roths. It's a weaponized tax shelter program. And it's one that can be exploited over and over. This is less a story that Thiel broke the rules and more that Republican policy used a clever trick to allow this to happen. You can still blame this on Thiel in a roundabout way since he is such a heavy Republican donor, this seems like a pretty straightforward case of regulatory capture.
It's another thing to say this was a program designed to help working people retire more comfortably and not as a tax shelter for risky investments. I know Thiel didn't do anything explicitly illegal so there's no recourse to recoup the taxes, but it's obviously skirting the spirit of the law. And a pretty easy regulatory update to cap the value of Roth withdrawals. No tax on gains up to $10M or something would protect 99.9% of savers and prevent this tactic from being weaponized.
I think it’s still worth being critical of individuals even if they follow all the rules. The super rich have the largest influence on society as a whole. They cast a vote on the status quo by endorsing anti-social policies with their actions. Just because something is legal doesn’t make it right. I’m not arguing any particular consequences etc. whatever. I also agree that ‘news’ which emphasises a misleading causality is not helpful.
Nevertheless, the super rich ‘legally’ avoiding the proportional contribution to society nominally expected of them _because they can_ is still anti-social behaviour and however the laws came to be is irrelevant in my opinion. Democracy is so flawed especially at the individual policy level I consider the argument that ‘the populace voted for this’ conservative in the worst most nebulous way, defending the status quo for no reason other than it is the status quo.
Of course policies that protect the super rich are beyond the normal reach of democracy because lobbying and donations are so prevalent.
Do we approve of this behaviour in a normative sense? That seems like a more important thing to keep in mind than if individual’s playing of the game is technically above board. Or how the rules came about. To me the details of the case amount to details of a symptom and what is of more interest is the underlying condition which is revealed.
FWIW I don’t know the details of the case I’m just trying to nudge the discourse in a direction I find more interesting.
> Nevertheless, the super rich ‘legally’ avoiding the proportional contribution to society nominally expected of them _because they can_ is still anti-social behaviour and however the laws came to be is irrelevant in my opinion.
Why do you put legally in quotes? Is it because you think there was zero downside risk to maxing out a Roth contribution with start up stock? The article conveniently leaves out all the possible downsides.
Seems like the problem is wealth inequality, and going after people who follow the rules (that they had no part in influencing) is a waste of time, and reduced quality of discourse due to decrease in trust.
I’m not saying anyone should go after them. They followed the rules, how do you go after someone who followed the rules?
I’m just saying that it’s still okay to condemn (just as an act of casting judgement) rule following when it’s anti social and the question of what sort of society we would like to live in is the more prescient point to bare in mind.
I put legally in quotes because I think legality is an unsound basis for reasoning about whether something is normatively okay or not okay.
I agree. I don't think it was the intent for people to amass a multi-billion dollar accumulation in their Roth account. And when we're talking about whether something is "right," or "wrong,"--which different from whether or not if it falls within the rules--I think we can look at the contribution limits as a hint of the intent.
I'd even go as far to say that the $5k/yr contribution limit of Roth account makes it pretty clear that Roth was not supposed to be used to gain tax privilege on vast sums of money.
It's a retirement account. How much money do people need for retirement? 22B? Give me a break.
> I don't think it was the intent for people to amass a multi-billion dollar accumulation in their Roth account
Intent doesn't matter now. The rule is the rule.
You can't call foul and say it's "wrong" when someone plays by the rules and wins.
If you want to advocate for changing the rules that's fine. But don't forget to consider the non-billionaire Roth holders out there, the ones that are "right", who may be affected by a rule change.
I'm not calling foul, and I do advocate for changing the rules. He amassed that position fair and square.
... but that doesn't mean that he gets to keep it either. There's an obligation to society, as much as the libertarian crowd hates to admit it. I think that there was an oversight in the rules, and with new data, we should change the rules. How about 1B max in your IRA? Or 500MM max? or 100MM max?
I will not cry over the loss of hundreds of millions of dollars in tax-sheltering privilege, and neither should you.
> I think that there was an oversight in the rules
I'm not sure about that. Ever heard of a "mega backdoor Roth"? It's a legal way for high income earners to contribute much more than the normal limits.
Besides, you're free to load up on TQQQ or penny stocks in your Roth if you're feeling lucky. If you lose it all, you will have squandered a great opportunity to gain tax-free wealth. Or, maybe you'll hit the jackpot and end up with a pile of tax-free money. Then if the rules change and you have to give it back you'll probably ease off of that whole "obligation to society" line.
>I'd even go as far to say that the $5k/yr contribution limit of Roth account makes it pretty clear that Roth was not supposed to be used to gain tax privilege on vast sums of money.
How is this clear? By the same reasoning, one could say the lack of specification of maximum tax free gains makes it pretty clear that Roth was supposed to be used to gain tax privilege on vast sums of money.
Then why would they put in a maximum contribution? Why have any limit at all if it is as you say it is?
Are you implying that the government was trying to create a lottery for tax shelter? Or a shelter that at the minimum benefits the wealthiest class? Sure--it's available to everyone, but how much wealth is being sheltered by the lowest 90% vs the top 10%?
>Do we approve of this behaviour in a normative sense?
What is the approximate amount of taxes for Mr. Thiel of which you would approve of? How much wealth should he retain?
If a single individual does not have the right to confiscate your wealth, but a collective body does, how many voters are required to confiscate your wealth?
Where exactly is this demarcation point? Is there a limbo zone where the morality of forcible confiscation begins to bend?
I don’t think that’s right. Thiel acquired all this money in his Roth IRA by directing his venture investments through it. You need money to make venture investments, and he got the money in his Roth by putting tons of PayPal stock in there. Now the rule is that you can only contribute $6,000 a year to the account, less back then, but thiel put huge amounts of stock in. This all happened pretty much the day before they took millions in funding which would’ve made his stock too valuable to put in the Roth. Imo that is fraud. He knew the stock was worth more than the limit and he still put it in the account. But since the value wasn’t officially set until the next week it’s too much of a hassle to prove that he mispriced the stock to the irs.
The government should still come after him for fraudulently misvaluing his company if the statute of limitations hasn’t expired. There is no chance Peter would’ve sold that stock to investors for whatever the Roth limit was.
They have identified that Blood Boy Man’s Roth alone is twice the size of his previously publicly estimated net worth. And through a tax loophole most normal people have no way of using. And clearly this wasn’t a deliberate loophole , it just got exploited into one. This seems like a good substantial article to me. I’m just curious if there are people here trying to indirectly undermine criticizing our “democracy is untenable” leader here, just like PG is shilling for Elon or Dave Chappelle is asking us to forgive Kanye. Keep moving the Overton window saying they al did nothing wrong it’s the system that’s broken, is that your message?
>And through a tax loophole most normal people have no way of using.
Source? As far as I know, everyone can contribute to a Roth retirement savings account.
>And clearly this wasn’t a deliberate loophole , it just got exploited into one.
Are you suggesting Thiel, in 1999, knew for a fact that his $2k worth of Paypal equity, would be worth far more in 2022? In which case, the fair market value of the equity would not have been $2k, and hence Thiel committed fraud?
The post you’re a replying to is referring to most Americans’ inability to participate in the very first funding rounds of nascent startups. The other part of the equation is the investment vehicle itself, which as you point out is available to all Americans below a certain income.
A typical American has nowhere near the access to founding shares in SV startups that a Peter Thiel would. I have no issue with self directed Roth IRAs but that doesn’t mean I need to create fictions about there being an even playing field.
I really don’t understand why so many people here are so hell bent on supporting disgustingly rich people exploiting every loophole like this. Surely you see this is wrong on a moral level? No one asked here to jail him, just to close the loophole.
I mean, I agree, and think the law should be changed to have some limits, but I wouldn't have enough info to think the law should be changed if I didn't know specific details about how some individuals are using it.
(Also, what this article only briefly touched upon but others get into more details of -- the way people like this get hundreds of MM in IRAs is by buying early stage stakes that aren't generally available to the public at "pennies per share". Banning these from IRAs would be one way to end this sort of thing).
>the way people like this get hundreds of MM in IRAs is by buying early stage stakes that aren't generally available to the public at "pennies per share". Banning these from IRAs would be one way to end this sort of thing).
They are pennies per share because they are huge gambles worth approximately nothing right now. Anyone can make their own LLC and contribute the max equity into their IRA right now. It just does not make sense for most since it will probably perform worse than buying SP500.
If it's such a gamble, how do these already really wealthy people wind up with hundreds of millions in their IRAs? There was an article about how it's pretty typical for the mega wealthy. They would seem to have access to something others don't. Anyway I'd say turning $6000/year into hundreds of millions or billions tax-free is not the policy purpose of a Roth IRA.
Unfortunately there is not much "myriad" in the candidate choices. To even reach a level of opportunity to compete in an election means to already sell out to some special interests. It just costs too much money to run with any hope of getting elected.
Both parties in the US cater to wealthy supporters, whether those supporters are actual humans, corporations as humans, or PACs. Those who want to protect their wealth spend a lot of money to ensure that all likely candidates will make or modify rules that benefit them.
It is very reasonable for us to direct our ire toward the wealthy individuals who make very public efforts to affect policies (very selfishly). And with the recent tally of $880 million spent by billionaires on the recent midterm elections, it's even more clear where we should direct our attention.
It doesn't really apply to TFA example, but that doesn't mean that there are not numerous (intentional) holes in the tax system which are designed to prevent wealthy people from having to give some back.
There are so many ways to avoid paying taxes if you are wealthy, only a few of which have been publicized (Warren Buffett vs secretary, Mitt Romney and the Bain Capital leak, Panama Papers revelations, etc.)
Regular people don't have those options; and a vastly greater percentage of their income (which is directly taxed already) goes into local taxes on gas, essentials, and any luxury purchases.
When we see another reminder of how unfair these systems are, and we know that their design comes from the people who benefit from them (like Thiel), it is reasonable to direct our ire toward them.
And finally, this doesn't even touch on the overt criminal tax avoidance that is well known to persist amongst this group. The Swiss bank leaks exposed some of these, and the US tax amnesty programs have further illustrated it. Even so, there's surely a lot more money hiding away that has not and never will be taxed.
I think it can be effective to put a face, so to speak, to an issue to show it isn’t some abstract problem and to also show the degree to which it is a problem.
The wording the article uses is intended to cause outrage at specific people, instead of the badly worded rules and/or the motivations of the people who enacted the rules.
> Yet, from the start, a small number of entrepreneurs, like Thiel, made an end run around the rules: Open a Roth with $2,000 or less. Get a sweetheart deal to buy a stake in a startup that has a good chance of one day exploding in value. Pay just fractions of a penny per share, a price low enough to buy huge numbers of shares. Watch as all the gains on that stock — no matter how giant — are shielded from taxes forever, as long as the IRA remains untouched until age 59 and a half. Then use the proceeds, still inside the Roth, to make other investments.
I wonder how the author determined PayPal had a “good chance of exploding in value”? Can they predict the future? Or is it using hindsight to make things seem less risky than they were.
Would you recommend a young person today to max out their Roth contribution with the equity of a startup they are working on?
The article also does not mention any of the downsides of Roth accounts.
> The wording the article uses is intended to cause outrage at specific people, instead of the badly worded rules and/or the motivations of the people who enacted the rules.
They also talk about the system, how it came to be, etc., for example:
“About a decade after the creation of the Roth, Congress made it even easier to turn the accounts into mammoth tax shelters.”
> Would you recommend a young person today to max out their Roth contribution with the equity of a startup they are working on?
In some sense, one could view the detailed reporting as a guidebook for how anyone can do this too!
>They also talk about the system, how it came to be, etc., for example:
True, I should credit the article for giving the background, but I would have preferred it to be the focus instead of someone who won the lottery.
>In some sense, one could view the detailed reporting as a guidebook for how anyone can do this too!
Roths have never been a secret. They just have had very low caps (still only $6k per person), and most people would rather 95% chance of getting 5% returns on their $6k investment rather than a 0.00001% chance of getting 1,000,000% return on their $6k investment.
Obviously, a richer person has more ability to gamble and thus profit from this, but the article frames it as a guaranteed mechanism to evade taxes (uses the term “side step”), when in reality, it is still very much a gamble (assuming there is no fraud).
> “About a decade after the creation of the Roth, Congress made it even easier to turn the accounts into mammoth tax shelters.”
Alternatively: "About a decade later, politicians continued to demonstrate an inability to make hard tradeoffs and goosed short-term tax revenue in exchange for long-term tax-free growth of these accounts. Now, some people are mad about that."
The author determined that because their was negotiating a venture deal when he put the stock in his ira. He knew it was worth many times more than he claimed because he was about to be given that valuation by investors.
Half of the text in the article feels like whining that someone followed the laws, in many cases (Roth conversions) paid their taxes early and then, in direct exchange, got tax-free treatment on withdrawals.
Imagine a series of multiplications, one of them being 0.80 to the taxpayer and the other 0.20 to the government. Then a series of transactions multiplies that account value by a value less than 1 (for losing investments) or greater than 1 (for winning investments).
Multiplication is commutative. Whether the 0.20 to the government is paid at the start or the end, it seems fair to me. The fact that the government got their money early and did not invest it as well as the Roth account holder is not a tax policy concern in my view.
For every case where a taxpayer invested well and won big, there are thousands of people who made a Roth conversion, paying taxes at that moment, and made investments that went to zero. In those cases, the government got paid more taxes than they’d have gotten without the Roth conversion.
This is how it starts... Roth IRAs have always been built on a flimsy promise: pay your taxes now, and pay no taxes later. I strongly suspect in the near future, those individuals that were responsible and actually saved for retirement will be seen as 'cheating the system's because they aren't paying taxes on their sizable Roth balance.
Articles that cherry pick a rare example to cause outrage are attempting to change the rules. Thiel played by the rules and got lucky with his Roth. That doesn't change the fundamental promise of the account.
People in this thread tend to be supportive of the idea that he is simply playing by the rules. While I have no reason to doubt the legality of this strategy, I question whether it ought to be legally appropriate for Peter Thiel to decide the valuation of his own investment (more or less) by himself. His initial deposit into his Roth IRA doesn't strike me as an arm's length independent valuation. It was simply the par-value of the stock, which AFAIU is a valuation for accounting purposes and not at all an independent appraisal of the stock's value.
That said, when this topic came up last year on Hacker News, it did make me rethink my own personal tax-sheltered strategy. (I'm in Canada, so I'm thinking about TFSA instead of Roth IRA). Before I had been following the advice to shelter my high-tax items, which for Canada would be bonds. But after reading about this, I've rearranged things to instead shelter (hopefully) high growth items (e.g. VTI). The idea being that by growing room in my sheltered accounts I can eventually save more on taxes than I would by sheltering bonds
I'd be interested in other people's comments on tax-sheltered-account strategies for tech workers.
All you need to pull this off is ground-floor access to a unicorn startup. The IRA rules are the minor term here.
Anyone could, provided they had an investment that gained as much as Thiel’s, do this.
Maybe there should be lifetime caps on tax protected withdrawals to prevent this kind of edge case, but that’s not how the laws were written.
There are other ways for wealthy to dodge taxes. Invest, borrow, die works slightly worse since you’re paying loan interest instead of capital gains taxes. But it’s still not paying taxes.
So yes, this is kind of interesting, but not that much more effective than the current tax dodging strategies.
Or just ban putting those kinds of investments into IRAs. "ground-floor access to a unicorn startup". Nobody that actually needs an IRA to fund a retirement has those kinds of vehicles in them (the vast majority don't have access to such if they wanted to), only really wealthy people using IRAs for a purpose they weren't intended for.
how is this done? I looked into the rules and you can't sell options or stocks from companies you have a controlling stake in into your own Roth. Friends and family can't either. I feel like you would have to be in a pretty special and unlikely situation to actually pull this off not even assuming the stock price actually increases much. I could be wrong about that.
I believe you could open a Roth, put dollars in it and buy anything your Roth broker would sell you in that tax protected container.
Exotic offerings are not going to be available to regular people, but if you could get access to bespoke financial product, like some exotic swap or derivative, or something else that would increase in value 1000000% or something else crazy, and you’re all set.
There are specific restrictions to what can go in a Roth, but I think all financial products are allowed.
You can’t put “a lottery ticket” in the IRA and win the lottery with that ticket and have it be tax protected, but only because it’s a physical object like a collectible.
If you do it through stonks though it’s fine the ways the laws are written.
Thiel is like a super villain straight from a comic. His own republic somewhere in the ocean, his blood boys, his disdain for democracy, where does this end?
Sure nothing wrong, but why would you get offended if they call him blood boy man? Doesn’t seem to have any connotations, literally a factual statement (assuming it really is true he uses or used blood boys).
Hard disagree. There are plenty of people in bad positions that need to do things that they would rather not. At one level it's having a job in the first place. I don't consider their consent to be unethical, it is the best choice they can make in the current situation, and the person asking for blood did not craft the entire situation.
All economic libertarians are super villains, but think that they're champions of freedom. What's interesting is that, imho, the entire concept of "super heroes" is actually fraught with libertarian ideology. In super hero narratives you have super powerful individuals battling each other, with incompetent governments unable to intervene to keep anyone safe.
Social libertarians are villains too. Both are antisocial, just in different ways. Society decides your role in it and what you owe it and how you can work for its benefit.
In as much as "left-libertarianism" is a vehicle for anarchism, I agree with you. In practise I find most left-libertarians actually just want liberty from puritanical or religious morality, and/or "nanny state" restrictions. For most left libertarians (in practice), if you let them smoke weed and ride a bike without a helmet, they're good. The problem is that left libertarians are captured by economic libertarians who pitch their policies as anti-authoritarian, but who are actually fascists.
There's a bit of kerfuffle in the UK about "ISA millionaires"[1]. ISAs are similar to US IRAs (Roth? the stocks and shares ones). Basically since they were created in the 1980s, even with the annual investment limits and a boring index fund it has been possible to accumulate over £1 million tax free. You're only allowed to invest in listed companies and there are small annual limits so it's highly unlikely anyone could have made "billions" this way. For example you absolutely could not use this for founder shares.
Everyone expects that one day a total fund limit will be introduced, but not so far.
£1 million isn't some staggering or offensive sum, IMO. As a retirement account, that will throw off £40K/yr with a 4% chance of failure (going broke) in 30 years or maybe £60K with 10% of going broke in 15 years and a 40% chance in 30 years.
£1 million is a completely reasonable retirement savings balance to target (and is lower than my family's own target), especially if you lived your life and want to retire in the most populated urban center in the UK.
I've tried to do this with founder stock over the years and my tax advisors (I switched at one point) both discouraged me from doing so. Not that I would have ended up with billions, but still, a big chunk of change. The nice part is if you do this when your stock is worth pennies you can still make (almost) the entire normal cash contribution, so the risk is low.
Congress keeps threatening to stop this by forcing accounts over some limit to make an immediate withdrawal, with all the negative tax consequences that would result. This pro publica piece implies that they don't think it will ever happen.
Roth IRAs are only supposed to be able to purchase publicly tradeable stocks. It will be interesting whether this is investigated because buying founder shares for a penny with your $5k/year limit is not supposed to be allowed.
It’s more interesting the people who actually publicly traded with their small inputs and now have millions per year that they can withdraw tax free.
Good for him. Creating wealth making everyone's life better and avoiding his money is used in murdering people overseas in wars or sending people who committed victimless 'crimes' such as trading marijuana to the prison for life.
It’s more likely than not his investments directly cause more deaths than they would through wars or whatever the American government you allege is doing you disagree with. Saying “I won’t pay taxes because I don’t agree with the government” is sovereign citizen level inanity. Especially because this dude has the power to move to another country anytime but chooses to abuse the system in this country. The least we can do is be objective about it and try to minimize such abuse.
1. Thinking avoiding (legally or not) paying taxes) for not agreeing with what the state does makes you someone who identifies as a sovereign citizen makes no sense. There are more than enough sane moral/ethical reasons why someone might want to avoid that... while still living in society and being a productive member of it. We're constantly sold the statism Kool-Aid that paying taxes is sacred and to turn a blind eye to how the money is used, but this is just not right.
2. He isn't even abusing anything. The state is abusing people's wealth, on the other hand.
Just replying to let you know that someone agrees with, ha ha.
In fact I don't buy the “temporary embarrassed millionaire” narrative. I think instead people who disagree with you do so because they truly don't believe in taxes at all or they disagree with a progressive tax system.
I was chatting with a coworker, who is probably the HN type you are describing, about taxes and though we were on different sides of the issue he agreed that taxes were necessary, did not dispute that. He disagreed that it should be progressive however - I think he favored a flat tax rate.
I told him that I saw the collected (collective) taxes as something like a pie (maybe pie chart): the taxes from the poor representing a wedge, the taxes from the middle class another wedge, etc. Slice it up to represent the U.S.'s current (progressive) tax rate — any kind of flat tax or regressive tax is clearly going to mean the rich pay less, the poor and/or middle class pay more.
We can argue as to whether governments collect too much in taxes but to say a flat or regressive tax is "more fair" (to anyone other than the rich) is just a wild notion in my mind.
Myself, I would be an embarrassed billionaire if that were to ever befall me.
For any "flat" tax to be workable, I think there has to be a generous per-person exemption. If you had a flat tax on all income over say $30K per adult and $15K per child, I think that would alleviate a lot of your (quite valid) pie-chart concern.
The enormous advantage to a flat tax rate is that everyone is in it together. If we have a discussion about whether government should tax more or less, it's hitting or saving all of us (or all of us that earn over the exemption amount anyway). Sure, it hits someone who earns 100x as much 100x harder, but it still hits everyone at least a little bit.
All of this "my plan doesn't raise taxes on anyone earning under $250K or $400K or $1M" is, to me, offensive and divisive. If you want to raise an extra $100K in taxes from someone earning $1.06M, you need to raise an extra $10K in taxes from someone earning $160K (assuming a $60K/yr exemption for a 2 adult household).
Why be productive then? Both for those who get basics anyway and for those who get taxed through the roof?
I'm using „productive“ instead of „work“ for a reason. It's easy find a BS „work“ to do. E.g. I could spend my days bicycling and pretend I'm making a map :) And build some software for fun, e.g. yet another todo app. But neither is productive for the society at large.
Ride my bicycle and write software for fun. Not caring about what society and/or market needs. Just writing software for the sake of it. E.g perfecting best-ever-made todo app.
Probably not. Just keep it perfecting forever locally. After all the fun is in programming, not dealing with publishing, making an icon, a sound name etc.
Even if I did publish it, I doubt a new app where 10000 already exists helps the society in a meaningful way. Current model, even if with all the flaws, ensures that the market votes what is actually productive or not. Command economy didn't work well. Such hobby-economy probably would be on the same level of inefficiency.
For those who do want, it may become out of reach too. First, taxes are now much higher to build all the housing and everything. Next, it will be harder to find workers if basic needs are there. Both to make money and build the yacht.
Finally, it will be harder to come up with a product. People consume lots of stuff they don't need. They've to work one way or another. Money is there so they spend it. Now if you just had your basic needs met, but didn't have disposable money.. It'd be much bigger step to go find employment to buy random stuff.
“Superyacht” is stand-in for anything beyond one’s basic human needs.
What is one person’s run if the mill property is another’s luxury.
For instance, In the discussion you wrote that you’d ride your bicycle and wanna code all day (which requires a computer, and presumably, since you’re on HN participating in thoughtful discussion, an internet connection). There are millions and millions of people who don’t have that, and to them, it is a big luxury item.
There's a big difference between a soft paddle boat and superyacht. Both are beyond basic needs.
A very basic computing device is rather cheap these days. Look at mobile internet penetration in Africa or Asia. Sure, not everybody has it. But it'd certainly make a basic needs list. In worst case - as a shared use devices in libraries. Especially given how modern society relies on digitalisation.
I agree, if we can somehow keep the very wealthy from using their wealth to control the rest of society through purchasing politicians etc. (No problem with them buying all the yachts and caviar they want).
I think that would stifle a lot of innovation. Some people are not going to take risks if you cap the reward. Others just won't put in the work if they know that it will be taken/forced away from them.
I don’t think so. Selling 95% (or whatever) percent of a company with $5m revenue per employee is not exactly a bad result.
It might stifle the type of megalomania that passes for innovation these days though, and would prevent concentration of wealth that stifles innovation through anti competitive behaviour.
I do mind money being taken from productive capacity and wasted on war, corruption or (ineffectively) on various type of quasi-religious social engineering and propaganda.
“Taxation is theft, purely and simply even though it is theft on a grand and colossal scale which no acknowledged criminals could hope to match. It is a compulsory seizure of the property of the State's inhabitants, or subjects.”
M. Rothbard :)
Well maybe you would change your opinion if private firefighters would arrive to your burning house and told you that they will buy it for 50 EUR, or they will let it burn to the ground. You will lose your hose in both cases.
I think you need to sign a contract with the firefighters before shit starts burning. Car insurance, health insurance, any similar market driven service would not let you insure AFTER the accident either.
There's a relevant quote about society being a parasite on the man with the hoe. Though I suspect it was coined by someone who's never tried to build a hoe without a society to help.
I'm all for people being able to opt out of paying all taxes, as long as society is free to opt out of all dealings with those who choose to do so, including being free to refuse them access to use any publicly financed facilities, including roads, and the ability to refuse to trade with them.
Irrelevant to my argument. Read "society" as "those preparing to continue to pay tax" if you wish.
The point being that organized societies consists of contracts, and I'm all for making that more so in the sense of letting those who feel coerced into them opt out. But the natural extension of that is that if you choose to owe a government nothing, then it and those who choose to remain part of what it govern has no duty to let you take part of its benefits either, as forcing them to do so would be just as much theft as taxation.
You don't get to expect to be able to choose one or the other.
Taxation is the foundation of currency, and creates all markets. Without taxes, there is no public purpose, and hence no society, unless you have a society that is sufficiently simple that you can operate it without money.
> - Taxation can happen via either currency or goods.
It's true that many early currencies are named after some commodity (shekel being a good example) because governments imposed a tax in a commodity and that then became the unit of account. It's the same principle though.
> - Governments manage societies, most happen to fund themselves via taxes.
Taxation is the sole means by which a government provisions resources away from the private sector, and to the public sector, unless your society is simple enough that you can run it without money (which is a pretty small society).
> I'm not sure what you mean by public purpose.
Things that we get by dint of belonging to a society, such as schooling and libraries.
And indeed, the first person to use libertarianism as the name of a political ideology, Joseph Dejacque, vigourously agreed with Proudhon on that, while he described Proudhon as "moderate anarchist, liberal, but not libertarian".
Rothbard coopted the term, which was then long established.
Taxation is theft, and any time somebody manages to get out of it, we should celebrate it. Especially as it contributes to breaking up the system based on violence and theft and paves the road for the rest of us to do the same.
Propublica does good work, but they reduce their credibility when they put out clickbait to induce rage at a single person playing by the rules. Guess it is easier to get people riled up against one “evil” person than the myriad representatives the populace voted for.