"Nobelesse oblige" really only works with patents of nobility, or some similar level of broadly-accepted societal respect and privilege that the obliged can count on. That's the quid pro quo. You can't expect it to continue while you are actively trying to tear down the respect and privilege of the wealthy and also strip them of their wealth.
And I'm not convinced that it's the billionaires of silicon valley who defected first.
Huh. How does that work, and what's the reasoning? I'd expect the marginal sucker to still be profitable, and there's only so many high rollers. I'd expect a policy goal like that to end as a nearly-zero-sum game between the casinos themselves. Which I wouldn't expect them to want.
Or is the idea that the *city* doesn't want less-than-wealthy gambling tourism, and is willing to mess with the casinos over it?
They've raised prices for everything. They shut down major roads for car races with expensive seating for days which not only means difficulty for local traffic but which also blocks off the Bellagio fountain.
I haven't seen anything solid about whose idea this was or the details of their thinking. People in business aren't immune to fads.
We're not a "democracy" in the way Plato was using the term.
In Aristotle's refinement of Greek political philosophy our system is a polity. It is meant to have the best features of rule by the one, few and many, with checks and balances in place to prevent the bad results of those systems of government (tyranny, corrupt oligarchy, and mobocracy.) There's certainly a fair argument it failed to accomplish those tasks, but it is definitely not a "democracy" as either Aristotle or Plato would use those terms.
Nope, LLM writing that is unsteered is currently low quality, and the vibe given off by LLM writing is a good indicator that the interpretive labour to understand and dissect the text is not worth it.
People use them to promote their substacks. They have an agent browse dozens/hundreds of random substacks, post a worthless empty-calorie comment like the above ("Fascinating perspective, $BLOG_AUTHOR! It's a sobering reminder of how $PARAPHRASE_OF_AUTHORS_POINT. What are your thoughts on $ENGAGEMENT_BAITING_QUESTION?") and hope a few people click on them.
Sadly these spambots are often barely distinguishable from regular commenters and go undetected. Maybe there's a lesson for humans there.
Specifically about 10 out of every million Americans read SSC, and about 4 out of every million Swiss.
According to a chat with an AI, where I laboriously copied some numbers in, these are some top countries for SSC readership, along with a few reference countries like Russia and India. Columns are: country name, total # readers in 2024 survey, approximate readers-per-million.
In slightly more words, they have a somewhat better understanding of economics, they're more solidaric, they're less polarised and tribal, and (still) less prone to fall for populist promises and easy solutions. There are absolutely cases where the population of a canton or of the whole country voted in a referendum against paying lower taxes, or against such eat-the-rich idiocy.
These are all "in average" and "still" etc., and not the same everywhere. (Some of the cities and much of the French-speaking part are less rational. Somewhat. In average.)
I had thought about addressing this. If there is an IQ difference, I don't think it's large enough to be relevant, and less so in comparison to the other aspects.
In an individual, I would not expect 5 points to make a difference. An average IQ difference over the entire population might explain *why* some of those aspects are different. The smartest person still has to coordinate with others to actualize their intelligence in the world, and they can't build better community infrastructure on their own. On the other hand, it makes sense that, even absent any special coordination, a smarter population of people working together might nail building in those "other aspects" from the start.
First of all, I agree. But processing speed and such abilities don't necessarily protect from ideology bullshit, they just make it easier to rationalise it, or you wouldn't have so many Ashkenazi believers in [insert something that is flabbergastingly foolish to you]. Personally, I can't believe they're falling for that. No, I think it's the culture/mentality/social tradition.
I concede it's not easy to quantify factors that mutually influence each other, though. And a (very superficial) 'net search I had done didn't even give comparable average IQ numbers: Switzerland is typically given at 100-101, and California at 95-97, but it seems this is suffering even more than usual from the distortion that the CA scores are indirect, from scores that involve knowledge and education. I have some general problems about the asserted correlation, but in this context, we'd have an interest to keep IQ as separate as possible from education. Another issue is who counts: not everybody can vote (in Switzerland, typically only citizens, and only in some cities non-citizens with a long-term residence permit), which may exclude lower-IQ groups as well as higher-IQ groups. And I'm not sure about how many naturalised immigrants of either the furner or the expat type tend to vote. That seems similar to California (basically US citizens resident in CA), but the demographic and voting dynamics might differ, eg, MIT graduates born anywhere in the US may settle SF and vote, while Brits and EU citizens coming from the Sorbonne, Munich or Oxford or in fact ETH Zurich can't vote in Switzerland.
Switzerland has had strong traditions of serious self-rule going back to 1291. I recently reread the old Time-Life book on Switzerland from about 1964. It emphasizes that responsibly participating in public policy debate is central to a Swissman's self-conception of manhood.
At that point women were not allowed to vote. (The Time-Life book says, more or less, that that's only fair because inside the Swiss home is an absolute matriarchy, which is pretty funny from a post-1969 perspective.)
Los Angeles, in contrast, was in the 20th Century the world capital of making up activities that are more fun than talking about public policy, like movies and skateboarding.
I noticed this while moving back and forth between L.A. and Chicago. Local news broadcasts in Chicago pay close attention to what Alderman X said to Alderman Y, whereas L.A. local news treats local politics as boring and prefer to cut to some wacky thing somebody is doing in their backyard.
In general? Many. The problem is that it's not simply linear, say higher IQ = capitalism with protection of the weak and cultural liberalism. Depending on other factors, better hardware can make people come up with cleverer ways to rationalise their nonsense.
I think it's more culture than IQ. The places that vote most strongly against this will be rural white areas in California with not that impressive IQs, but which have a cultural norm against freeloading.
While I have issues with the way Europeans tax everybody so much, one thing it does do is make everyone involved in the process of good government. When a misuse of funds means *your* taxes have to go up to fix the problem, you care about the structures involved.
Meanwhile in the US, most of the tax debates are "here's how we make sure SOMEONE ELSE pays" and once it's someone bad paying the taxes, efficiency moves from needed to irrelevant to actively discouraged.
and they have less wealth inequality. I think it’s being somewhat elided throughout this discussion that the inequality *itself* is the problem. Taxes on the 1% pay for a lot of stuff! and that’s good! But massive disparities are toxic to civic virtue and the functioning of a republic
I'm interested in an explanation of how? It seems unclear and dubious to me that inequality is needed/useful to produce value. (Not defending Communist countries here, I'm genuinely wondering what's the argument.)
Value is generated through the creation of more from less. More value needs to be generated from the product than the cost of production. This includes labor. Some people provide significantly more value than others. Paying people more than the value of the labor they provide would defeat the point of paying them to work. You can pay them less than their value, of course. That creates more value with less expenditure. On the other hand, the owners need to accumulate capital for the sake of generating further value. As long as they are taxed at all, the value they generate through these investments contributes to the wealth and power of the country as a whole, regardless of how much the workers are being exploited.
There is a fundamental issue here in how you define equality that I think explains the pattern. People compete over status, not money. Beyond basic needs, money is only really desired to the degree that it buys status. So in a communist country there is very little incentive to start a business because if you are too successful, the profits will just be taken from you before you accumulate enough wealth to buy high status.
But while the communist country is equal in wealth, it is extremely unequal in power, and power in the form of official government positions buys you a ton of status. And in communist countries you see intense competition for this, often with deadly consequences for the losers.
The difference is that competing for money in the free market has massive positive externalities, while competition for government office does not. When Jeff Bezos builds Amazon, I get next day delivery of anything I want to my door. When Elon Musk launches Starlink and pushes Viasat out of business I get a massively upgraded internet connection. But when some commissar pushes out another, I get nothing. It's just new boss same as the old boss.
It is pretty much the other way round. If you produce something that a lot of people value and are willing to buy, you will likely make a lot of money in a large rich country like the USA.
why should I bust my ass to be productive if i'll end up with the same material wealth as someone who watches TV all day? Inequality is an essential incentive.
Very much agree with the direction you're going here, but would change "wealth inequality" to "unaffordable cost of living."
If you can't afford housing and healthcare, of course the rich are going to look like they're hoarding wealth. In reality, the cost of living crisis has very little to do with the fact that some people are billionaires. The real causes are much more boring, like NIMBY laws and market-destroying healthcare regulations.
Lol they are polarised and tribal, but their tribe is the canton and direct democracy happens on the canton level. It's not some ideal example of multiculturalism, but rather of natural segregation by mountains. Don't try to speak French in a Wintherthur bar, you will be called a welsch (slur for French-speakers, interestingly same etymological roots as Wales).
Or it had smarter voters. A recent proposal is to cap the population at 10 million people, in a country where the overwhelming majority of immigrants are other Europeans.
A population cap for an area with limited resources (which is all of them) would actually be the smartest policy I have ever heard of a democratic government adopting.
At most that proposal just suggests that 100,000 voters were keen enough on the idea to sign it and for it to be put to ballot. That is 1.1% of the population. Hardly representative?
And? Switzerland is wealthy, but a large part of the appeal of living there seems to not just being in a rich society, but to live in a nice place. A large population is a direct threat to that niceness, especially in a mountainous terrain, where enlarging infrastructures is often difficult or impossible.
My guess is it’s a small country with a strong cultural emphasis on being informed about initiatives.
Switzerland is kind of a weird case in general though. Yglesias has a whole post about how the Swiss government and economy shouldn’t work as well as they do, and that it seems like there’s something distinctive about Swiss culture that makes it work as well as it does.
The ability of the government to do counter-proposals, and the inability of proposals that have gathered enough signatures to just be withdrawn unless a counter-proposal got over 50% of the vote.
This is not the most recent Swiss federal initiative. It's a year old, ancient news by now! And it was rejected in a landslide. Almost all initiatives are rejected, this is pretty much working as intended (a check on elected officials which is rarely needed), see https://www.250bpm.com/p/swiss-political-system-more-than for a good overview.
Right, I think the question is how come you need to pay bribes to make people withdraw their stupid initiative, as opposed to just trusting the voters to reject it without spending a fortune. To the best of my knowledge the former is unheard of in Switzerland, and with the one you bring the NO side spent just half a million (scaled by GDP it would be 2 million in CA).
I would also be interested in the answer to that question. Might it be feasible to just ask some of the people involved in this decision why they did not? That may get you part of the way there. If getting these answers is of serious interest to people, perhaps there is someone in the SSC network we could tap who can do a proper interview and write it up. It will answer what the perceptions of the voting situation is such that the voters aren't trusted, though not why the situation is (or is perceived) that way. Switzerland is an interesting angle for analyzing how the situation could potentially be different, but probably has *too* many structural and cultural variables different to make strong claims about what needs to change.
Institutional design is often the most favourable explanation, as opposed to theorizing on intelligence, in my opinion.
TLDR: it's likely the form the referenda elections take place. Switzerland has specific elections, combined with a high turnout, but in California these initiatives are just another set of boxes to choose between during a general election (which often have tens of positions up for vote at once).
The hurdle signatures for putting a Swiss popular initiative (constitutional reform) ahead is far lower. It is just 100,000 within an 18 month period as on Wikipedia (cannot get access to the reference, but quoted below (Ref A)). It is then put out to vote through a popular election and Cantonal vote (the vote goes to "Yes" for the Canton if it has a popular majority in the Canton). A double majority is required, and the vote must get at least a 40% turnout in the popular vote for a "Yes" vote to hold.
Result: fringe political projects are more likely to be put to vote (100k threshold), but less likely to pass; if insufficient numbers are interested in the initiative, the 40% isn't met and the vote is thrown out. Smaller, perhaps more rural, conservative cantonal voters' votes are over weighted through the Canton majority requirement. Regional cleavaging reduces the ability of concentrated political interests in say Zurich crowding out all other voices in the room and passing an initiative.
Contrast to California:
In California at least 5% of the number of people who voted in the most recent governor election - a minimum of roughly 550k based on the '22 election (ref B) - are required for an initiative to be put to the popular vote. Compared to Switzerland, such referenda are less likely to be held (per capita, more voters are required to get the ball rolling).
This isn't necessarily an obstacle:
Let's quickly think about how the two manage representation as well. California's electoral systems from what I can tell are majoritarian. Minority issues receive relatively limited representation as a result. Ballot initiatives are where minority groups go for this representation.
Switzerland has a PR voting system. The largest party has only 27% of the seats, and accordingly minority opinions are more accorded for, so don't need to use these initiatives for their opinion.
Nor are said Swiss minorities they likely to get what they want:
The hurdle in Switzerland is far higher than in California; at least 40% of the nation needs to care enough for success (granted, a number historically met - ref C), even if you need fewer signatures than California, but in California, to have a chance at success only 5% need to sign the initiative; at the election, it doesn't matter how many turn up.
That being said, turnouts are historically high in California as well (50+%), though crucially, the quality differs, this turnout often just being another scribble on a ballot most were going to fill out anyway given these referenda are mostly held during primary/ general elections.
The cost to turn out has already been paid, making the threat of a legitimate (high turnout) outcome, driven by low-information voters who have just heard of an initiative ticking a box, far higher than Switzerland. Specific referenda elections are held in Switzerland, ensuring that voters who turn out are at least the slight bit informed on the issue, even if not massively more so.
I think this last point is crucial to explaining the difference.
Ref A: Cormon, Pierre (2015), Swiss Politics for Complete Beginners (2 ed.), Geneva, Switzerland: Slatkine, ISBN 978-2-8321-0607-5
OK so just to clarify, if 40% turn out to vote yes, and the remaining 60% don't care enough to turn out, then the initiative goes through? I would think a problem with the dedicated-referenda system is that it selects for highly passionate people who are not thinking as clearly about the issue.
Per the Wikipedia article on the subject, it seems like Swiss initiatives have much longer delays built into the system. Since the opinion of the federal council and Parliamentary deliberation are mandatory, it can take years from the initiative's initiation (and signature collection) until it appears on a ballot.
An initiative like the one discussed here might also run afoul of unity-of-purpose rules, if the relevant authorities consider the hospital-spending provisions to be too remotely linked to the wealth tax.
It might be a jurisdictional difference, then, whether "tax one thing to spend on another" is a single issue or two separate issues. If this initiative were so easily defeated under a single-issue requirement, I imagine it would have been already.
There was a recent Swiss estate tax ballot initiative. It failed but caused a minor panic and some consideration of flight by high net worth individuals.
The Netherlands has had a wealth tax for quite a while now. And as of now it still taxes fictitious gains.
This has not caused its economy to blow up or a mass exodus of high net worth individuals.
Then again the Netherlands isn't much of a personal tax haven(it's more of a corporate tax haven) like Switzerland is so it has fewer HNWIs to lose, having a similar rate to France or the UK.
The Netherlands puts a tax on legible savings, investments, and non-primary-residence homes.
It's kind of a worst-case take on a wealth tax, because you only have about 50K of wealth saved before you have to pay it, so it hits a lot of middle-income people, while very rich people can make their wealth illegible.
But they're moving away from it, because it's been ruled unconstitutional! The Dutch Supreme Court ruled it violated the European Convention on Human Rights!
Now they're trying to switch to taxing unrealized capital gains but that doesn't start until 2028 so we haven't seen yet what it's going to do. A bunch of people are claiming it will cause a massive exodus, and I don't know if they're right, but it will take until 2028 to happen so I'm not putting down any markers yet.
The current system also kinda, sorta taxes unrealised gains. It just taxes them assuming that everyone gets the same return on investment regardless of what the actual return is. The change for 2028 is... actually looking at the return so you're not taxing people on money they haven't actually made.
They don't have uncapped campaign funding, and every initiative undergoes a governmental review. In other words, SEIU wouldn't have been allowed to run ads in favor of their initiative, and the mail-in ballot would have come with a "VOTE AGAINST: this is an obvious cash grab, here's why" brochure.
The cultural differences are part of the answer, but I think a big part is also that Swiss voters are better informed. That's not the same as being smarter.
As a Swiss voter, together with my voting ballot I get a leaflet with information. For each proposition, apart from basic facts (what are we voting about) it also contains a Pro and a Contra statement. In the Pro statement the proponents give a steelman version of why the proposal is good. In the Contra statement the opponents give a steelman version of why the proposal is bad. On top of that, you get the recommendation of the government, of the parliament (with the number of Yes/No votes in the parliament), and of each political party.
This means that high-quality two-sided information is just very very easily available. Of course, some voters still ignore it, but even for people who only consume social media otherwise, they literally just have to open a leaflet.
There are propositions which are truly contested. In some cases, it's genuinely hard to predict what the ramifications of a proposition are going to be, and parties and people are split over the question. But then there are other propositions where it's jut blatantly obvious what the right answer is. If I see in the leaflet that the government, the parliament and all political parties from left to right suggest no, then that's what I vote. There are many propositions where one side gets a 60-70% majority, on cantonal or communal level it's even often 80-90%.
Is it out yet? If yes, is there perhaps an online version? I would be interested to know what it contains on that issue. Are there any parties that recommend to accept the proposition? Was there a vote in the parliament about the issue, or other cues what people think about it?
The page currently says that the guide for the June 2 election will be available in April, so I wouldn't expect the guide for the November election before September.
> The cultural differences are part of the answer, but I think a big part is also that Swiss voters are better informed. That's not the same as being smarter.
> As a Swiss voter, together with my voting ballot I get a leaflet with information. For each proposition, apart from basic facts (what are we voting about) it also contains a Pro and a Contra statement. In the Pro statement the proponents give a steelman version of why the proposal is good. In the Contra statement the opponents give a steelman version of why the proposal is bad.
That can't be any part of the explanation for why SEIU can threaten California but an analogous group can't threaten Switzerland, because you haven't yet managed to describe a difference between Switzerland and California.
"For each proposition, apart from basic facts (what are we voting about) it also contains a Pro and a Contra statement. In the Pro statement the proponents give a steelman version of why the proposal is good. In the Contra statement the opponents give a steelman version of why the proposal is bad."
As a former California voter, I am fairly sure California ballots also have this stuff. I don't believe there is a formal endorsement section, but I seem to recall the pro/con arguments mentioning individuals or groups who fell on their particular side of the issue.
Switzerland also has a strong cultural norm of "concordance" - that all parties try and work together in the end. That means they don't have a coalition/opposition or a two-party system like the UK or US.
That actually happened around the millennium with one Christoph Blocher of the Swiss People's Party, he threatened to "take his party into opposition" and everyone else came together and called his bluff.
If you imagine that bad actors such as Dave Regan of SEIU strike with uniform probability across the human species, California will be expected to have about 4x as many political bad actors as Switzerland, due to 4x the population.
I suspect this matters a lot, since individual bad actors, if they find a niche, can have disproportionate impact (e.g. by crowding out good actors or destroying valuable norms).
I furthermore suspect that there are compounding/nonlinear effects through adding more bad actors, e.g. if they form nepotism networks or feed off of each other in political polarization.
Another way of making this argument is that high-population democracies are more vulnerable to Goodhart issues, since greater population means more searches for ways to game the democratic objective function.
This theory predicts that the most populous democracies (read: the ones with the greatest geopolitical clout) will also tend to have the crappiest leadership. And the more we do to "empower the people" and "democratize political participation" through e.g. social media, the worse the problem gets. What a cursed planet.
It does, in a way. Every few years they vote on a referendum to cut some point or other that they agreed in bilateral talks with the EU, which would probably invalidate the entire trade agreements, lead to tariffs, and be very bad for the economy.
Okay, but regarding the last paragraph... isn't it so that the fundamental problem the ballot proposition / direct democracy system, them? Hate the game, not the player? Seems like a good example of why direct democracy isn't worth the possible results of gameability, in the end.
The California system is not the same as the federal USA system. There's no ballot proposition mechanism for the whole of the USA. That's only in California in particular.
Absolutely hate the player. Hate the player twice as hard, for ruining an otherwise good game. In the absence of a way to ostracize the player from playing, you still ultimately have to discard the game. But you can still hate them in the same way you can hate a player of an actual game who ruins it and forces you to stop playing because they won't stop exploiting the loopholes that everyone else politely ignores.
But it's not atypical. It's an inevitable consequence given both the incentives created by the system and the existence of beings would take advantage of those incentives. It's like getting mad at the bears invading your neighborhood after you left food everywhere. You are responsible for creating good systems.
It's reasonable to express hatred towards the player when you would benefit from them acting less egregious, while acknowledging you likely are just as susceptible to enormous amounts of wealth.
It would be strange to get mad at rats infesting your home. That's simply what they do. Doesn't mean you can't build systems to deal with them. Anger, however, is unnecessary. What is necessary is action.
If you stand in relation to the other players as a human being to a bear, you need more mental institutions. People without more mental capacity than a bear should be institutionalized; it is cruel to have them running about.
But it's not a case of friends having a boardgame night where you can have a gentleman's agreement to maintain the fun with at most social pressure to back it up. It's a game of vast amounts of crucial political influence and billions of dollars. You pretty much by definition need something more than gentleman's agreements and social pressure to ensure that loopholes don't get abused, to the degree it's possible at all.
Kinda yes, but also saying "social pressure is not enough" is a good way to undermine the social pressure. I think I see this happen too often, and it seems like a self-fulfilling prophecy.
Hypothetically speaking, we could imagine a society that believes in social pressure, where people avoid doing the worst things, because if they start abusing the loopholes too much, first people start spitting on them on the streets... then they start having a problem hiring employees, because people also spit on their employees on the street... and finally someone loses temper and shoots them, and the jury says "seems not guilty to me, your honor".
There are advantages and disadvantages of both, of course.
Agree it’s badly written, but can the extremely wealthy not see the writing in the wall and get ahead of this and pass a good law? They are so good at anticipating threats and risks in business context, but somehow so oblivious in social context.
Came here to say this. Not just the extremely wealthy themselves, but every centrist and moderate who cares about good tax policy. Populists respond to situations in predictable ways: increasing billionaire wealth plus fiscal challenges plus lack of a wealth tax *will* lead to calls for a wealth tax. You can either keep hoping the left wing populists never ever get their way, or you can try and reach some kind of compromise, like a better tax.
Inequality is also rather extreme, and lots of other factors pushing up costs of living, which means adjusted for CoL it might not be that much.
Though of course all the usual public spending heavyweights (healthcare, education, infrastructure) suffer from incredible low productivity. (The first two mostly because of how labor intensive they are, the last is mostly because the unimaginably poor cultural and regulatory environment, but this is the main culprit anyway. People don't understand and don't value efficiency.)
“Adjusting for Purchasing Power Parity (PPP)—known domestically as Regional Price Parities (RPP)—reveals a startling economic "equilibrium."
While the raw (nominal) dollar amounts suggest that San Francisco and New York City are vastly outspending Dallas, the "Real Service Value" tells a different story. When you strip away the airport/utility "businesses" and consolidate all layers of Dallas government (City, County, Hospital, and Transit), all three cities provide almost the exact same "Real Value" of government services per resident.”
“The "Tax Efficiency" Paradox
While the Service Value is nearly identical, the Tax Burden required to generate that value is where the cities diverge:
1. Dallas Efficiency: Because Dallas has no state or local income tax, it generates this $10,208 in "Real Value" using a much smaller slice of its residents' income. It relies on property taxes and a massive "supply-side" advantage (low cost of land/labor).
2. NYC/SF Complexity: These cities must levy heavy income taxes and business fees just to keep up with the "Real Value" provided in Dallas. They are essentially running in place—paying twice as much for the same "unit" of government.”
the biggest factors driving cost of living in california are self-inflicted by the government of california (housing policy and various regulations). Simply getting out of the way of developers would decimate the cost of living without spending a dime of taxpayer money.
It's difficult for any government to spend a dollar, on any margin, in a way that doesn't improve at least one citizen's life. The productive are not slaves to the unproductive.
There are all sorts of claims of government spending that is actually worsening a citizens life like the 45 foot nude woman statue or that the police is actually oppressing the population so it should be defunded.
The whole point of this is that this measure will likely _directly_ lower revenue, unlike others which only operate indirectly by expanding the invisible graveyard... I.e. the government often raises $1 now means it never raises the $5 it otherwise would have later.
But this is so stupid that it means the government raises $1 now that means it never raises the other $5 it thought it was going to _now_!!
Combined net worth of all US billionaires: ~$8 trillion
So every 2 years, US citizens give their government more money in tax revenue than all US billionaires will see in their lifetime. It is more than enough money to accomplish everything progressives want.
In fact, the US already spends more per capita on healthcare than any other country. Yet what are our results? A bloated, disfunctional healthcare system that is unaffordable for the working class.
Throwing more money at the problem can't fix this. The only solution is for the government to decide to start spending wisely.
In addition, I find the whole "tax the rich" thing to be very little more than pure envy, in the precise way that's part of the 10 commandments. "How dare they have more than I do. Bring them down, even if it net hurts society."
Wait I don't understand, how's passing good law supposed to prevent this? Isn't whatever good law there is will be challenged and possibly repealed by SEIU every two years?
The argument is that, if the existing law was good enough, SEIU wouldn't get enough votes to put their bad version on the ballot in the first place because they wouldn't find enough bad things to say about the existing law.
Well, that's democracy, isn't it? Bad ideas and bad people rise to the top all the time. In the long run, you can pull them back down by the same means you made them rise up, and hope they were not bad enough to inflict permanent damage to the (political) system itself.
This is exactly why at the federal level we have a republic and not a direct democracy, though. Sure the people can still elect bad representatives, but the idea is that the representatives will on average be good enough and they will have the time to actually learn about the measures they’re voting on and make decisions based on what will actually be good instead of just what sounds good. And for all the failures of representative democracy, California is showing why it’s still better than direct democracy.
But the amount of effort required to defend is more than it is to promulgate the bad ideas in the first place. It’s why the marketplace of ideas concept isn’t working.
The past 80 years have been quite good for the democracies of the global West, so its negative effects can't have been all that decisive. To claim flat-out that it "isn't working" seems wrong.
Generally, it is much harder to change something that to leave it as it is, and I would count the hundreds of millions the SEIU keeps spending on failed ballot initiatives as evidence for this, not against.
Most would argue there's way too much institutional inertia, not too little, as you seem to believe.
That's a silly argument, because these people aren't voting on the merits of the ballot initiative, they're largely SEIU members voting to put money in their own pockets.
What exactly are the "merits of the ballot initiative" if not their self-interest? If they have the numbers and the unity to vote their preferred way, then...yay democracy? In the end, nobody's going to vote against their own interests, so why should they.
Now, what I do recommend, in case of doubt, is to have such laws checked by some constitutional court of law on the state or federal level, whichever applies. But that goes for all laws, whether derived by direct democracy or through the representative legislation. But if the law is constitutional, then by all means, put it in effect and let people live with the consequences of their own decisions.
You tell me, dude. You're the one who said if a good law is passed, then a bad ballot initiative will fail, which of course pre-supposes that laws are either good or bad.
I think I did tell you, "dude". If an existing law is good enough, meaning it mostly satisfies the preferences of the people it concerns, then the proposal for a marginally better law might not mobilize the numbers of voters required to have that new version pass. As a law-proposer you can get out of this conundrum only to a degree - you can't increase the promises indefinitely because even as that would attract more people lured by these escalating promises, you lose even more on the other end because they start believing (very reasonably) that you are promising things that reality can't provide, and your proposal is going to fail at that end. So it's kind of a natural control loop with negative feedback, which is a good thing generally.
Feel free to disagree with my point, but to my embarrassment I don't know how to make it much clearer.
There is a significant population (especially in California) who will vote for hurting billionaires, regardless of the current law.
I vaguely recall a survey of pro-gun-control people asking them what new laws they'd like to see passed, which found that they overwhelmingly propose things that are *already* codified in law.
One point against this: In Denmark, which has a very high but very reasonable tax rate and a large welfare system, the same kind of law has just been proposed by the left populists, and lots of voters are in favour of it.
Remember the part where they need to get a million signatures to put anything on the ballot.
If there's a popular wealth tax already on the books, it'll be a lot harder to get signatures to add a new dumb one, let alone repeal the existing popular one.
That's not how signature gathering works in practice though. How it works in practice is paid signature gatherers hang out outside grocery stores and such, and they say anything they want to passersby, like "Do you think we should make California's tax code more fair? If so sign this ballot initiative."
Maybe a few dozen high information citizens would stop to ask the actual terms of the ballot proposition (which the signature gatherer may not even know) and consider their general knowledge of the current state of the tax code and decide whether the proposition sounds reasonable or not before agreeing to sign.
But in general it is true that getting a proposition on the California ballot is just a matter of money and effort.
Perhaps. It's a compelling story, but I also don't buy that there's literal zero influence of an initiative being more or less popular. How much it matters is an open question, and I agree that 'very little' is within the potential range.
That said, there's also the step of actually *passing* the initiative, where I do think whether it is popular or unpopular is much more definitive. Of course, you could say that this extortion racket relies on rescinding the ballot initiative before voting, so it doesn't matter if it passes; but it's at least a much less credible threat if the initiative is much less likely to pass.
Think like a r*t. You have a pretty young thing outside, who will talk to (and maybe give numbers) to anyone who will listen and sign her form. It's just a form, after all, you aren't even voting yet.
Last time there was a 16 year old at the farmer's market, I tried to ask her about the form she was waving around (it was "pro-retain"), did she know anything about the people she was trying to retain? Could she give one case that she liked how they'd decided? "Why are you asking me? I'm just sixteen years old." I'd have been embarrassed as a sixteen year old to be trying to get people to sign up, without knowing jackall about what they were signing up for.
We've had a heavy amount of aggressive prolesthysizing outside our store this year, more than I ever remember in the past, and...I gotta say, the cynical view is correct here, at least from what I've seen. Each day it's some completely new setup - fund the schools! reduce wealth inequality! pro-nurses (honest at least)! tax code fairness! reduce cost of living! And a hundred others. All to get signatures for this same damn thing, which the gatherers can't explain the nuts and bolts of even if you do attempt to interrogate. Now, one could certainly argue that the median passerby at this location is quite stupid, so it's just sensible market fit - we are next to a college, after all - but I find the brazenness to be a tipoff on the merits. Good laws don't need this sort of deceitful "and my axe too" wheedling to get signatures.
But, yes, it'd be harder to pull this sort of wool if an actually-sensible popular law were already on the books. (I hope. Populist fervor has many fine people on both sides these days.)
this is spot on to what my experience with petitioners is as a resident of california. Very rarely do I find one that will actually discuss with me what the proposition is and what they think about it. It seems (though i have no evidence) like they are just being paid to gather sigs, not that they are "true believers" so to speak
The term for these people among California campaign staffers is "carnies." My aunt collected signatures for random ballot initiatives she neither supported nor understood because she was recently unemployed and it was a temp job that accepted anyone capable of standing for 3 hours at a time.
I remember standing in line for a concert and there was a carny asking for signatures on a recreational Marijuana initiative. When I looked at the form, I realized it was some obscure tax issue and the guy was just telling everyone it was about weed to get more signatures. When I confronted him about it he said he got paid by the signature.
That feels like the right answer. It is a democracy, so the very rich need to convince and show their value to the voters. At some point you have to trust the voters can make decisions in their own interest or you have to give up on the idea of democracy.
Its hard to identify what tax rate would get the discussion to move away from "Tax the Rich". The Top 1% earn 22% of all income and pay 40% of all income taxes (https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2025/). Capital Gains taxes already exist, so what would it take to turn the attention away from it? I'm not convinced that raising Capital Gains to Income tax level or eliminating the cost basis change on death will actually change the discussion.
Billionaires and very high net worth people typically pay very low rates of tax relative to income because of various ways they can hack their income. I'd like to see billionaires deemed to have an income of at least 5% of their wealth over $1b and taxed at ordinary income rates on that income.
Put a poison pill in the bill so that the tax is automatically defunct if the 5% wealth tax goes into effect. Then present voters with the binary choice: the big ugly corrupt ballot initiative or the mild reasonable alternative.
Also there are all kinds of badly designed features of the ballot initiative which could simply be better designed. For example, perhaps those founders with paper wealth could be permitted to hand over common stocks of their company to California revenue service rather than having to liquidate them. That would solve the unrealized gains issues.
If people aren’t spending their wealth, then they are just doing the public service of allocating capital to productive causes. Billionaires live off a much smaller percentage of their wealth than the rest of us.
They do live off a smaller percentage of their wealth but they have no obligation to use their money for productive causes, and they spend a lot of money on unproductive ones. For example: super-yachts, massive sprawling play farms, ineffective charities, pleasure trips on private jets, and famously a child abuse island. I understand the island isn't typical, but the others are.
The warren buffets of the world who live truly frugally and devote their wealth almost exclusively to generating more productive assets are a minority.
In contrast, if we tax the billionaires more, 100% of those funds can be spent productively on activities chosen by the people's elected representatives.
>"In contrast, if we tax the billionaires more, 100% of those funds can be spent productively on activities chosen by the people's elected representatives."
Productively? In the People's Republic of California? Fat fucking chance.
That was a reach, admittedly, but I'd be willing to bet that a greater proportion of California's income than billionaires' collective income is spent on a mix of healthcare, education, housing, and poverty alleviation.
Perhaps the billionaires might actually have a small edge on actual good done in those areas, considering the effective charities that a small minority of them donate to. But the proper comparison there is the marginal good done by the extra money the tax generates relative to whatever small decline in donations to effective charities results from a top-up of ordinary tax rates to a 15% tax (CA's top rate iirc) on 5% of wealth.
With the possible exception of the ineffective charities, those are all examples of taxable spending. A typical billionaire might devote 10% of their wealth to that. The other 90% goes to things like expanding the business that made them a billionaire and may make them a multibillionaire. Since that business is clearly producing something worthwhile enough that customers voluntarily paid many billions of dollars for it, we probably don't want to disincentivize more of the same.
I dispute this creates a disincentive. Deeming 5% of wealth as annual taxable income (taxed at a 15% rate iirc in CA) applies without respect to whether the wealth is used productively. So, spend the money more or less productively and the same tax applies, but if you want to continue to grow your wealth, you'll do so most effectively through building income-generating assets.
Monopsonies are not "voluntary", as monopolies are not. Sam Walton would spank the pants off his heirs, were he still alive. And then roll out a new business, to drive Walmart out of business for good.
Being a billionaire proved you gained your money by doing productive, good things because the only way to make money is by doing productive, good things. We know all billionairs only made their money by doing productive, good things, because they have billions of dollars.
Super yachts are hella productive. It's "space age technology" (or the equivalent.) And Child Abuse Island is very typical for people that rich (massive play farms, $4000 a night sleepaway camps and such... those exist too, but they aren't much better than normal sleepaway camps for adults.)
Billionaires are extremely good at finding productive uses for capital which is why they earn great returns on it on average. Forcing billionaires to liquidate their investments leads directly to job losses and less productivity in the economy. Which hurts poor people.
Poor people are already hurt by poor healthcare and high housing costs and all the social services we can't have because it's not in the budget. There were far higher tax rates in the 1950s and they still managed full employment. So there's a way to do it! It's probably not difficult either--full employment is just a matter of who is spending the money to employ people, and whether it's 30% govt 70% private or 35% govt 65% private with more employment in health and education you can get to the same number employed.
What good law can cure anti-rich bigotry? Does the average voter even know what the top marginal income tax rate is in California? Do you? Unless the "good law" is so ruinous that it stops tech billionaires from prospering--which would be the same thing as killing the tech industry--it won't address the root of the grievance, which is precisely the prosperity of the tech billionaires.
>unless the "good law" is so ruinous that it stops tech billionaires from prospering--which would be the same thing as killing the tech industry
We call this 'capitalist realism' and it's exactly the ideology we're fighting against.
It's physically impossible to have a large tech company where the profits and ownership are spread more evenly across all workers, instead of pooling into the hands of one billionaire? Why?
Is it because the billioanires are Randian ubermensch who single-handedly provide all of the innovation and dynamism to the entire organization, and the actual researchers who invent new technologies and workers who implement them would be simply unable to do their jobs without a shining heroic CEO to look up to? And that CEO can't be heroic and inspiring unless he has a billion dollars?
The fact that the dominate business model in the tech industry pools all the money and power in the hands of a tiny number of powerful weirdos should be seen as a failure mode of modern capitalism, not a necessity without which we cannot have people doing labor. That's just propaganda.
Are you of the opinion that tech workers are underpaid? Or that our compensation isn't adequately tied to the equity value of our companies? Because speaking as a tech worker I gotta say I haven't heard that in very long while.
>Are you of the opinion that tech workers are underpaid?
Yes, in the sense that Uber drivers and Doordash deliverers and Amazon factory workers are all tech workers.
I acknowledge that the tech industry has a small cadre of elite workers who are paid well (though generally not treated well). But they are also the primary force pushing deskilling of labor and breaking of unions/etc in many sectors, creating tons of impoverished workers across the economy. In way, way larger numbers than the high-end programmers they employ.
If you are currently in the elite class that gets a portion of the spoils... great, I am happy for you. You're not the person I'm worried about protecting, here.
"Yes, in the sense that Uber drivers and Doordash deliverers and Amazon factory workers are all tech workers."
Literally none of those people are tech workers. Their labor does not contribute to the technology, it is simply assisted by the technology. The only thing they don't have in common with their usually-comparably-paid counterparts in less technical companies is that their job is easier.
When we say that the tech sector is creating jobs, those people are counted. Tech companies are the ones hiring/managing them, that's who they have to negotiate their wages with.
We can taboo the phrase 'tech worker' if you want, but I'm talking about people who work for and are in negotiation with companies that we call 'tech companies'.
It's perfectly legal for any collective to establish a company that everybody owns an equal share of. That somehow this structure isn't exactly prominent should be a strong hint about its competitiveness.
In an economy where most corporations were already collectives, 5% of the workers of a successful company leaving to start a new venture would take 5% of the equity in that company with them, and use that to stake their new venture.
Yes, we do indeed live in an economy where wealth inequality is so high that normal people don't have access to the capital needed to start new companies and try new ideas. This is not a good thing.
VCs are perfectly happy to invest outrageous sums into all sorts of crazy ventures hatched by penniless dropouts. Surely a mature collective with a great business plan would be a much more enticing investment proposition?
I think you're thinking about like 5-10 examples of that ever happening, mostly many decades ago, and also conflating 'penniless dropouts' with 'upper-middle-class to rich kids getting tons of support from their parents while they make their first prototypes'.
Workers, and people as a whole, are fundamentally conservative. CEOs, and in general "top dogs" and people seeking to become "top dogs", tend to be far more ... revolutionary.
When you let your entire company get infected by "conservative" -- you get Pittsburgh's Steel Industry, which failed to modernize, and then failed catastrophically. Some of that's union, some of that's management, but it's all "conservative."
No they wouldn't. No company can actually run on that basis; no company is actually equally divided among all employees. Sometimes companies try; it never ends well.
There's a simple logic to the failure of coops. Firstly, investing in your employer is a terrible financial decision, in full generality, publicly-owned, private for-profit, coop, or anything else. It means that conditions when you lose your job are highly correlated with times when your assets drop in value, which is the *opposite* of what you want in your investments. This means that secondly, if you let your owner-employees sell** their stake, most of them will; the only thing that could get them to refuse is class consciousness, which has never ever existed. And thirdly, if you *don't* let them sell, they now very rationally want to at all costs avoid downside risks, that increase the chance that they lose their job and their investment at once. Which means they are in favor of stagnation over change; the prospect of growth has to be very large to be worth the risk of shrinkage, and so they make the rational choice to take only very conservative bets. And fourthly, the larger the company the stronger this effect gets, because the growth incentive shrinks.
Also, there's no guiding vision because it's a lot easier to convince twelve people of a bold strategy than twelve hundred. This isn't necessary for growth but it's usually necessary for *big* growth on the scale the tech industry achieves.
**Or otherwise hand over the value to someone else in exchange for money in some way involving loans against collateral etc.
Anyone of those employees being screwed by the man can start a company and become billionaires. But guess what? They can’t because most companies fail and it turns out to be a terrible idea to start one. Any serious attempt at building a company will take 10 years of your life and go nowhere. You will forego a decade of better opportunities. And when you’re done, your experience won’t be valued as much as a “real” job. Additionally, the lifestyle and mental health of being a founder sucks. Founders who build extraordinarily successful companies are extraordinarily rich because the appeal has to be very high for people to go after it. Of course you can say, well let’s cap the wealth you can make, but that only makes sense from the lens of looking at a few thousand billionaires. In reality a fairly successful founder after taking all that risk, might make 1/100 or 1/1000 wealth ($10M to $50M), after grinding 10 years and working a few more years at the acquirer. The billionaires are not representative.
Finally, very rich people tend to continue doing capital allocation throughout their life, investing in other companies and looking for mis priced assets. This sort of capital allocation is difficult, and it’s a real contribution to society. And while these people might grow their number for their own vanity, they don’t consume it to the same extent 1000 middle class people would if that wealth was divided. So they are mostly stewards of collective wealth in exchange for status.
Tax estate, tax consumption. Make your own money. Or not. Learn to live with what you have. The state should help the less fortunate, as in the bottom 20%, not those who wished they were billionaires but aren’t and are resentful for it.
People with middle-class careers are resentful because the quality of their jobs have degraded relative to previous generations, not because they missed the chance they never took at becoming a billionaire. With few exceptions, depending on location, today's teachers, firemen, police, etc have fewer benefits than they did in the 90s and will have to work longer.
>Is it because the billioanires are Randian ubermensch who single-handedly provide all of the innovation and dynamism to the entire organization, and the actual researchers who invent new technologies and workers who implement them would be simply unable to do their jobs without a shining heroic CEO to look up to? And that CEO can't be heroic and inspiring unless he has a billion dollars?
A CEO can't be heroic or inspiring unless he has money to pay his workers with. The only other realistic option for the role of capital allocation is the government, and I really doubt Donald Trump and Jasmine Crockett are going to be able to do that job non-catastrophically.
Setting aside the question of startups, workers are paid out of the revenues of the company, not out of the CEO's personal checkbook. You don't need a single person owning all the equity in the company for a company to pay its workers.
Now, it is true that we have such massive wealth inequality at the moment that most people are living paycheck to paycheck, and only the very wealthy have the slack needed to start a new venture and fund it until it turns profitable. But that's not a virtuous fact about those people, it's a major failure mode for our economy, and exactly the type of thing that ideas like a wealth tax are trying to fix.
Let me put it this way: imagine the world where 1% of people have enough money to found a startup, and the rest can't do it even by banding together or borrowing. What are the odds that most of the good ideas for startups, and most of the talent for running them, all falls within that 1% of people? How much wasted potential is there in the 99% of the population you can't draw new ventures from?
The revenues of the company determine the valuation of the company, which will be the dominant factor in determining the taxable wealth of the owner. A billionaire isn't someone who has a billion dollars in cash or a billion dollars in toys, it's someone who owns a company whose ~$5E9/yr revenue justifies a billion dollars in market cap, That the revenue doesn't pass through the owner's personal bank account on its way to the workers, doesn't exempt it from counting towards the owner's wealth,
What I'm saying is that the company doesn't need to have a single owner in order to pay its workers. The shares could be divided up among the workers, and it would still have the revenues and cashflow needed to pay everyone.
Good ideas aren't the problem with startups. Sound Fiscal Discipline is. So yeah, the top 1% are likely to have the most successful businesses, because they don't make unprofitable ones.
The Bottom 25% of startups are in general: restaurants. They're full of people with promising products (the food's yummy) who don't know jack about being a chef, and making food that's profitable.
People are still living paycheck to paycheck, though, because of several other things totally screwed up about the economy. You can go here for a fable that might help it make more sense. https://x.com/ESYudkowsky/status/1815090947514142759?lang=en
It's misleading because it includes e.g. people who make $200k, have most of their assets in illiquid investments, and depend on the next paycheck for cash flow to pay the bills.
In reality, only 13% of Americans can't afford a $400 emergency expense. While that's not good, it doesn't paint quite the same picture of "massive wealth inequality" as the narrative of "60% of Americans live paycheck to paycheck".
"workers are paid out of the revenues of the company, not out of the CEO's personal checkbook" is factually incorrect. For startups with no revenue, there is no such source of cashflows. For businesses operating at a loss, employees still get paid up until they can't anymore because there's not enough capital coming in to stop bankruptcy. I have personal experience in the latter.
The government can't do good capital allocation because the incentives of the job are inherently to use the money *now* for purposes of vote-buying or other things of value for the person *now* in the position.
Principle-agent problem.
One notes that a hired CEO, while having the principle-agent problem, does not have it in so aggravated a form, because his reputation turns on being thought good at running a business.
TL;DR: What we have works, changing it in the way you want would destroy it entirely, and replacing its societal benefits would be difficult if not impossible.
The whole point of the VC system is low probabilities of enormous success. So yes, it is structurally necessary that if they get enormous success they get, and keep, enormous rewards.
It is, at least in theory, possible to have an alternate tech industry that produces very valuable companies and products that don't concentrate the profits of that value in the hands of the people who started and led the company that got there. But nothing like venture capital as we currently know it would be interested in funding that industry, and it's not clear who would. And it's not clear if the really huge public benefits from things like Craigslist, Netflix, and Amazon woud ever have gotten started if people were making an ordinary effort to start an ordinary valuable company rather than making moonshots.
Moonshots went out of business, bro. That was the whole dotbomb. Then Netflix feasted on the corpse (extra bandwidth that became "please use it" bandwidth) and got big.
Anthropic was a moonshot. OpenAI was a moonshot. Cursor was a moonshot. Uber was a moonshot. Google turned into Alphabet expressly so that they could separate Google (stable company) from 'the Other Bets' (moonshots), and get their employees to stay within the Google umbrella when they went off to found their moonshot companies. Very explicitly.
The startup industry is 90% moonshots and the VCs consider the other 10% to be failures.
Hi! I have a company, and if you loan me some money, I'll double your money in two years.
... you ever tried telling VCs about a company like that? Holy shit did it take TONS of time and effort to find someone willing to take a chance on a "sure bet." (Sixteen times the profit was what the original investor bagged. Ca-ching!)
Your problem was that no one believed you because it's not a trustworthy-person thing to claim. This is not a problem for a moonshot plan.
If you have a business plan to make a trillion dollars, and it might work, but you'll find flaws in it, and probably you'll find enough that you fail, but there's a small but significant chance that you patch enough of them, well enough to succeed, that's very good and if you only make tens of billions it's probably still a good investment. There will be several more opportunities to invest more money if and only if you've demonstrated your plan was sound or you're skilled at patching the plan as you go along or both, so they can give a small number now and only risk more as they gain confidence.
If you're claiming you can double their money in two years as a sure bet, (A) you're claiming $20 bills are lying on the sidewalk and it's more likely you're deluded than correct, (B) if your business plan has even one significant flaw, it could easily wipe things out and lose them money, and (C) you're asking them to risk a lot more money, now rather than later.
Also that's not what VCs see themselves as doing. You wanted private equity or something, not venture capital.
I feel obliged to point out that worker coops are not in fact illegal. If you want to build your own tech company that distributes the profit to its employees, you are free to do so. That this is rarely done suggests that a wealthy owner (or at least a profit motive) is in fact necessary
1. We're living in a system with huge levels of wealth inequality, and have been for centuries. That means that the capital needed to start a company and be competitive is already restricted to the hands of a tiny elite, and the financial instruments and institutions and regulations relating to starting and running a business are built around that assumption. Just because it is hard to form a co-op and be competitive with it in that environment, does not necessarily imply they can't be competitive in a different system less hostile to them.
2. Naturalism fallacy. Even if we assume co-ops can't compete on the market very well, that doesn't mean they aren't a good thing we should try to push towards. Even if you 100% buy into market realism and believe that every possible example of efficiency and advantage in the market translates directly into a benefit to consumers, most consumers are also workers. Imagine the case where widgets sold by a billionaire-led company are 3% cheaper, but the workers at a co-op take home 30% more income and enjoy their jobs 90% more. The the billionaire corp will win on the open market, but almost every citizen in the country would be happier if all big corps were co-ops.
Combining these two reasons, I'm not satisfied with the just-so-story of 'co-ops are not common today, therefore they must be bad'. There are lots of good things we want to pursue that don't happen spontaneously under current conditions, you could even call that the central purpose of public policy.
> We're living in a system with huge levels of wealth inequality, and have been for centuries.
False. The 20th century had the **least* unequal wealth of any century since the invention of farming. AI might make the 21st regress, not yet clear.
> Naturalism fallacy
No, that's something completely different. Nothing about industry is natural, and that's a good thing.
> Imagine the case where widgets sold by a billionaire-led company are 3% cheaper, but the workers at a co-op take home 30% more income and enjoy their jobs 90% more. Then the billionaire corp will win on the open market,
False. The ability to attract better workers - more experienced, more intelligent, more skilled, and/or in other ways superior - from them getting 10% more income, let alone 30%, would be worth *far* more than a 3% price hike per unit. There is not a publicly-traded company in the world that wouldn't take a 3% profit-per-unit cut to all their offerings in order to be able to offer their workers 5% more take-home pay, without any promise of better morale beyond that. They'd have fewer problems and increase in volume, and almost certainly make >5% more profit per quarter starting within a year.
In general, you're forgetting that a job is an investment, and it's bad to have correlated investments. If I work for Google, I should not put 5% of my investment fund in Google stock. I would likely get stock options; the strategic decision is to sell them as soon as possible. My employer would love me to be heavily invested in the success of my employer; I would rather be invested in it as little as possible, and put all my investments somewhere uncorrelated, that probably won't fail if my employer is in a position where it might have to fire me. (Or even better, anti-correlated; if I work for a coal mine, I should put a lot of money in solar, wind, and nuclear stocks.) Companies offer stock options, investments in the future of the company, not because they are good for the workers, but because they are good for the company. And the workers realize this, and sell quickly! If you gave them the option to sell them all on the second day at work, they'd do it, which is why you can't.
In short: a coop at scale, like REI, exists only through coercion.
>The 20th century had the **least* unequal wealth of any century since the invention of farming.
If this is true, which I don't accept without evidence, then sure, I should have said 'millennia' rather than 'centuries'. Doesn't really weaken my point.
> Nothing about industry is natural,
Industry occurs in the natural world, and follows natural law.
The heart of the naturalism fallacy is deriving a moral 'ought' from a factual 'is', which is what everyone here is doing.
You could argue that it's more properly the 'just-world ' fallacy, I suppose, but that one's more about individual virtue and rewards, than about the is->ought conflation. I'm pretty sure naturalism fallacy is the most correct.
>The ability to attract better workers - more experienced, more intelligent, more skilled, and/or in other ways superior
I never said you have to pay every employee the same amount, or give them the same amount of equity. If a smart corporation would pay more for better employees, then a smart co-op can vote to give them more equity.
>In general, you're forgetting that a job is an investment, and it's bad to have correlated investments.
What you're forgetting is that *most people don't have significant investments*.
I agree that, if you could have $100k salary and $100k stocks and divide them however you want, you'd generally want them to be diversified to limit risk, like any portfolio.
But if your options are having $100k salary and $100k in risk-correlated stocks, or having $80k salary and no stocks, you're still better off in the former case.
I'm talking about reducing wealth inequality and giving normal people a share of productive capital. That's better for them than the current system, even if it also has some problems.
"It's p/h/y/s/i/c/a/l/l/y impossible to have a large tech company where the profits and ownership are spread more evenly across all workers, instead of pooling into the hands of one billionaire? Why?"
High time preference and hyperbolic future discount.
The unevenness would be restored at once by employees who sell their shares for quick cash. And it would spread as people have disasters or situations where they need money and are unwilling to borrow while they own the shares.
If you don't let them sell, you are holding their shares in trust for them, and that's not ownership.
The only way around it would be to have a company that hires only Randian ubermenschen who have the risk tolerance and low time preference. And even there, employees would cash it in order to start their own, independent companies.
It's those who say they "struggle to pay their monthly bills" as opposed to those who say they're "living paycheck to paycheck". The latter includes 45% of people making $20,000 *per month*, which means it's utterly ridiculous. That kind of money isn't even near-poor by Bay Area standards and we're the most expensive place in the country.
My point was about most people not having enough liquid wealth to become entrepreneurs through their own capital.
I agree it's a problem that households making over $200k are living paycheck to paycheck, but they are, and it means that they can't realistically save up enough money to start a business.
Unfortunately, the sort of low-information voters who fall for this sort of thing, will predictably fall for claims of "...but the billionaires cheat and use loopholes so they don't pay any taxes under the current system, that's why we need new taxes". They will predictably fall for this, because they already have fallen for it. And it will be particularly easy to convince them to fall for it again, if the tax law SEIU or whomever is proposing to replace, is one that was written by billionaires.
There is no amount of taxes a billionaire can pay, not even 100.00% of their actual income, that will convince an idiot socialist that the billionaire isn't lying and secretly paying no taxes. And there aren't enough non-idiot socialists to change things. So in the land of the socialists, the only winning moves for billionaires are to GTFO or to fight a scorched-earth delaying action against basically any new taxes.
> There is no amount of taxes a billionaire can pay, not even 100.00% of their actual income, that will convince an idiot socialist that the billionaire isn't lying and secretly paying no taxes.
Good to have someone defending the billionaires paying a super low effective tax rate. Must be an idiot to want them to pay proportionally similar to the rest of the population. Maybe they will favor you for your brave work!
Everyone know that closing loopholes and methods of tax evasion is socialism.
‘the top 400 Americans paid an average total effective tax rate of 24% in 2018–2020’
But 24% is not low. Is it? And to increase it you would have to increase capital gains tax, because that's where most of their income comes from. And increasing capital gains tax will lower investment. Capital gains tax SHOULD be lower than high brackets of income tax. There is a good reason for that.
It's not low, but it's much less than I pay; or for that matter much less than I would pay if I lived in California.
The people who really get screwed in the current system are the upper middle class, people who earn enough to pay the top tax brackets but don't earn enough to _not_ pay the top tax brackets.
“Earning enough” has nothing to do with it. Billionaires are paying the same income tax as you are. It’s just that their money mostly come from capital gains, not salary.
Ballot initiatives under CA law are “sticky” - pass a related law first, and the initiative overrides it. Pass the initiative first, and various procedural and statutory checks block you from legislating over it.
It’s one of the problems with the initiative process - there’s zero room for iteration, improvement, or evolution.
Yeah, if you oppose every version of a wealth tax an equal amount no matter how good/bad or moderate/extreme it is, then the good ones have no competitive advantage over the bad ones, and the one that actually gets passed will be a random draw.
Wealth taxes are just bad tax policy. There’s no way to make them fair and efficient, so you end up with something that makes the income tax code look clear and rational. If you think wealthy people aren’t taxed enough targeted consumption taxes are the way to do it.
Why would you need to? You’re talking about a book keeping artifact: “if I could sell all this crypto today at the current prices it’s worth a kajillion dollars”. But you can’t do that, it’s a fiction. Sometimes a useful one, but it’s still not something with any real tangible impact on the world. It only has an impact when they actually sell those tokens and spend the dollars that result, and that’s when it makes sense to tax it: when you have real numbers verified by a market transaction
There are a lot of “bookkeepping artifacts” in the lives of billionaires that will never be taxed. “Peter Thiel grew his Roth IRA from an initial investment of less than $2,000 to over $5 billion, benefiting from tax-free growth on his investments in successful startups like PayPal and Facebook. This strategy has raised concerns about the use of Roth IRAs by ultra-wealthy individuals to avoid paying taxes on significant gains.”
Sure. Yes, there are. This is called "being rich". So tax the money when they spend it. Why does this solution not work? What is wrong with people having very large ledger entries against their names that makes it a subject of public policy?
Being rich is great. Wealth shielded from tax in offshore accounts, family trusts used to hold assets indefinitely, and so-called family charities is not so great. There are too many bookkeeping artifacts. SEIU appraoch is not helpful, but neither is "waiting" for extreme wealth to be spent.
It's a tax on the specific form of wealth with the worst historical ratio of positive and negative externalities... at least among those still widely considered legitimate. Stockpiles and production machinery for nerve gas, or ozone-depleting CFCs, or radium-based "medicine," or some esoteric blockchain thing, might have it beat, but shutting those down is much easier.
Naively, it would feel that what the wealthy should do is just get the heck out of California and make sure to choose a place that cannot be controlled by a socialist-leaning and ignorant electorate.
Why would the obvious move be to pass a good law, rather than simply change residence to somewhere more accomodating? Miami has been welcoming tax refugees from New York for some time.
A growing number of people are expressing strong discontent and decreasing utility with wealth inequality. This is most pronounced in California, but also a national trend (I don’t know enough about international to say further).
To the extent that the very wealthy are invested in the status quo, I think it is in their best interest to get ahead of the secular trends here, and too pass some reforms that will increase utility for this growing population discontented with wealth inequality. It is in everyone’s interest and also the global utility to get this solved in some way, whether it aligns with any one person’s sense of efficiency or justice.
I’m not prescribing a solution or making judgement about which solutions are better or best, but that I’m surprised the very wealthy don’t recognize that it is in their own self interest to address the wealth inequality. And this ballot initiative is an example of that, but more extremely examples will show up in California and nationally.
I will also address the “leave the state” rebuttal and say this is trending to being a national issue. I don’t expect them to want to leave the United States in bulk, we all want those see this work out.
Zooming out, I’m surprised more that they aren’t trying to answer the question “what reforms would address the discontent, much of which maybe come from envy.” I don’t know what the answer is, but the people with the most to lose are ingenious, hard working, well-resourced, and solved some of the hardest problems out there, so I have faith they could future something out if they wanted!
"so I have faith they could future something out if they wanted!"
That kind of abuse is literally a prescription for insanity. Do you want them to crack? Because they could get acquitted as "not guilty by reason of insanity."
By definition, if you express "strong discontent" to "wealth inequality" you are objecting that someone has more than you do and nothing else, and that is the *definition* of envy. The only "decreasing utility" you experience is self-inflicted.
I'm not sure that direct democracy has ever been considered a universal good, even as much as capitalism has been.
In particular, the average voter is not – and should not have to be – an expert in evaluating the technical merits of a proposal. However, when "the devil is in the details," that technical evaluation carries leading-order importance. Good and bad proposals can carry the same value-laden language, even leading sometimes to "dirty tricks" where (e.g.) a coal lobbying group proposes the Renewable Energy for Puppies and Kittens Initiative that just happens to make solar panels ruinously expensive.
Direct democracy seems to function best first as an escape valve, to push through select pieces of legislation only after the representative apparatus fails to represent. However, even that carries powerful second-order effects, where representatives are excused for non-representation _because_ things can go directly to the ballot.
Often, the representatives do not have enough expertise to evaluate the technical merits of a proposal. Quite famously, they made exporting random number generators of sufficient quality illegal (briefly).
That's definitely a problem, but at least in theory a stable representative government can have professional staff perform this kind of analysis through direct office budgets, caucus services, or shared parliamentary/congressional services. The cost of analysis on any one bill gets amortized over the many legislative items considered in a session.
For initiatives, voters don't have even the theoretical benefit of this sort of potentially-established procedure. The government could try to provide a technical opinion of its own, but that has a credibility problem when the initiative is notionally proposing something precisely because the elected government won't consider it.
Man, you're really into this "make more government jobs" thing, aren't you? In practice, the affected companies come into the representatives office and explain exactly how they f***cked up. And it gets fixed real soon like.
Yeah, ballot initiatives seem to be a poor idea, and the best play with them is to vote no, even if you broadly support the aims (progressive is a racheting game, so you can't actually remove recycling when it's no longer profitable, as that's not "progress").
The claim is that voters are too ignorant or stupid to know good policy. But now it turns out that the politicians are also, apparently, too ignorant or stupid to know good policy, and must rely on hired experts or friends like think tanks. So why not just take the middle men out and let the experts run the country ?
The American people view the experts' response to Covid better than they view the Dems/Biden, who in turn they view as having had a better response than Republicans/Trump. So, if anything, COVID suggests we'd all be happier if we did let experts run the country.
I bet that legislators would find a way around that, by somehow attaching a clause to each piece of legislation they pass that effectively says "if this legislation is vetoed then all schools and hospitals will shut down".
I can think of dumb ways to do this with laws that say things like "add 1 to the number in register A" and "schools are only funded if the number in register A equals the number in register B" but I won't bother to bore you with them.
I agree that this sounds like political extortion through the ballot process. But isn't this what corporate and private actors have done for years? The example I always think of is sports team owners who threaten to leave a city unless they get public funding for a stadium. Or businesses that threaten to relocate unless they get preferential tax treatment (which is legislative, rather than a referendum, but amounts to the same thing). It's all bad, but this is just the labor movement sinking to the same depths that some companies have done in the past. The reason it shows up in such a blatant way is that labor unions don't have the unfied-entity advantages that a team owner or a single business have.
There's a qualitative difference between 1) choosing to leave for greener pastures and 2) weaponizing the apparatus of government to extort value from private groups under pain of regulatory strangulation. You're offering examples of 1 but suggesting that the union's repeated intentional efforts at 2 constitute the same behavior. They don't.
"Sure, it's bad to blackmail your boss over his secret sexual preferences if he doesn't give you a raise, but isn't that the same as what the high-performing employees have been doing for years, saying they'll accept an external offer if they don't get a raise?" No, no it's not.
Well-said. There's a moral difference between A) walking away from a contract negotiation because its terms aren't beneficial to you and B) imposing a contract that harms the other party.
Contracts should be mutually beneficial, so there's nothing wrong with telling the other party (e.g. a state or city) "You're not contributing enough for this to be worth my time and money." In theory, if the second party would still benefit even after sweetening the deal, then that's what they'll do. Otherwise, the deal will fall apart--which would be lamentable, but better than either side agreeing to something that hurts them.
This is not at all what the SEIU is doing. They're forcing the other side to choose between a contract that hurts them a lot and a contract that hurts them a little. The other side *can't* walk away from the negotiation without becoming fugitives from the law.
Is all “voting by feet” or “threatening not to vote” extortion?
For example, if I threaten to not vote for my representative because he or she is anti-abortion, is that extortion? If I threaten to leave the state and take my business with me because my state bans abortion, is that extortion?
Maybe not an individual level. Maybe people have concerns bc SEIU, among others, have way more power. If Google threatens to leave and take 20,000 jobs that’s a big threat. If Joe Schmo threatens to leave, then who cares ? But isn’t this just the power of organizing and solidarity ? SEIU has managed to build a giant organization of devoted members and a large war chest to fight for its interests, so why haven’t you ? Why not organize a bunch of people into the “Council for Evidence-Backed Policy,” build a giant mailing list with 100,000 dues paying members, build a giant war chest, and start influencing politicians to pass “evidence backed policy”
Why not sacrifice large amounts of your valuable time and many assets to fighting off an evil actor? After all, it's not as if it's your life that they are wasting with their cruelty, either way.
The better analogy is to large businesses' regulatory capture, preventing competition from newcomers who cannot afford the cost of compliance. That has much the same signs as this measure, with laws benefiting themselves at the expense of others, and phrased in such a way as to appeal to less-than-perfectly informed voters.
Extortion is bad, but "give us what we want or we leave town" is a much less bad form of extortion than "give us what we want or we blow up the entire healthcare system".
Yes. It is bad when any major actor does it. But the same should apply when a business closes the one factory that supports a town. Businesses should have free to close or relocate as needed, but to hang that over the head of a community to extort tax breaks is not different from what a union does to extract their own rents. I would have a lot more sympathy for the arguments in this post if the same people who decry labor extortion were to oppose business extortion. Any negotiation involves a stand where one party says that if its terms aren't met that it will walk away. But to say it is bad when labor pulls a political move but that it's just "the economics" when business does it is hiding a power preference behind a supposedly neutral position.
"This proposition isn’t being sponsored by some generic group of Piketty-reading leftists."
Wasn't it drafted in part by Saez?
Between this and the NY AI rent-seek bill I am very thankful that we have a conservative SCOTUS. The only thing between us and the Europeanization of the economy.
“In our benchmark estimate, the total effective tax rate—all taxes paid relative to economic income—of the top 0.0002% (approximately the “top 400”) averaged 24% in 2018–2020 compared with 30% for the full population and 45% for top labor income earners. This lower total effective tax rate on the wealthiest is substantially driven by low taxable individual income relative to economic income.”
The uber wealthy are able to have their income delivered in special ways that avoids being taxed at a reasonable proportional rate. This makes zero sense. Particularly when we’re in a deficit.
This is not due to some mysterious or sneaky loophole. Tax rates on capital gains are lower than regular income, and the wealthier you are the greater the proportion of your income comes from capital gains. There is no special trick here.
Yeah it’s super easy to avoid taxes by being paid in certain ways available to the most wealthy only. They also avoid many of the downside with access to different types of credit. Like you said it’s not that complicated and should be fixed.
FWIW they use Haig-Simons as their definition of income, which considers changes to paper wealth to be income. You can come to all sorts of wacky conclusions with that definition of income when used at the individual level (it makes a lot more sense in the context of a firm, however).
The argument that changes in paper wealth should count as personal income is usually that they can borrow against their paper wealth. It is an exceptionally shitty argument because either that lending has to be paid back (with interest), or the collateral is forfeited.
It's a disingenuous rhetorical sleight of hand that Zucman etc are repeatedly guilty of.
Haig-Simons isn’t a trick, it’s a measure of actual increase in ability to pay. And no, the claim isn’t that a loan is itself income. The claim is that current law lets wealthy people consume against appreciated assets without realizing gains, then often erase those gains at death via stepped-up basis. That is a real tax preference for capital over wages, not ‘rhetorical sleight of hand.’
It's totally a rhetorical sleight of hand precisely because it's not "actual increase in ability to pay" because it has to be paid back (or the collateral forfeited). You may as well be calling a credit card "income" by this asinine logic. These are the kinds of shallow mental gymnastics that make people roll their eyes at the proposals made. It is transparently a conclusion in search of a rationalization.
Why does income become materially different in a way that allows you to pay less proportionate taxes once you are able to afford to pay for all of your reasonable needs and wants?
This would be less of an issue if social services in the USA were reasonable or if there was not an affordability crisis.
It's not. See my comment above. "Economic income" doesn't even correspond to income in the way most people think about it (it includes e.g. appreciated assets).
This is true, but capital gains is also an inherently variable form of income which if taxed at the normal rate simply won't happen at the most economically beneficial levels. I try to think of an alternative and it comes out as something like the capital gains tax rate is equal to the regular rate, but all capital gains taxpayers have to pay into an insurance fund that compensates those who experience losses, and the insurance is taken out of the payable tax. Maybe that would work. It's certainly not an easy thing compared to just having a lower rate, but it may be more politically durable
Let's say someone offers you a three year contract with a $50,000 salary, and your other option is to invest with an average expected return of $50,000 each year, but it may range from $150,000 to a loss of $50,000. If you get more than a $50,000 average there's a diminishing return in real value because you can already afford groceries at $50,000 - but far enough below and maybe your retirement fund is drained and you'll be house poor in retirement and have difficulty affording groceries
The $50,000 salary is more valuable unless you remove the uncertainty from the investment income
>This could be an existential threat to the Silicon Valley model of building startups that are worth billions on paper before their founders see any cash.
I don't quite understand this argument. Do these founders ever see any cash in the traditional sense from their activities? I thought it's "billions on paper" all the way down, or all the way up, as it were. My impression was that even the billionaires including Musk, Bezos et al. who are long out of the founding game, barely ever convert their stock to cash and instead borrow money against their stock when they want to buy another yacht?
If your startup is now publicly-traded or otherwise liquid, then you can either sell or pull stunts like that to get money to pay the tax. If you have a valuable startup which isn't liquid yet, then you could potentially be on the hook for a steep wealth tax despite not being able to turn your wealth into anything that can pay a tax.
I think a better approach to doing a wealth tax for people like that (assuming a wealth tax is going to happen, whether or not it's a good idea) would be to allow startup founders and other such people to pay directly in their stock and let the government handle converting into cash.
This is probably a bad idea. The government can time its sales, directly interfering with the normal operations of the publicly-traded markets for potentially political reasons rather than normal economic reasons. It also would have huge amounts to trade, further distorting the normal operations of the market, and at timings that might align with all sorts of unusual incentive structures.
If it's non-malicious (LOL. LMAO.) then forcing Dario Amodei to sell 5% of his stock of Anthropic in 2023 is not the point, let alone the many private companies which are "paper unicorns" but collapse before the IPO, and were never in practical terms worth that much, let alone possible to liquidate into a form that paid the demanded taxes.
That bullet point is an explainer, not an argument, which is clear from the very next sentence:
> Since most billionaires keep most of their wealth in stocks, any wealth tax will need some way to reach these (cf. complaints about the “buy, borrow, die” strategy for avoiding taxation)
Scott's just connecting the dots from scratch so that people understand 1) the bill hits assets, not money and 2) why that is.
1. The company goes bankrupt and the paper wealth wealth never gets cashed in at all
2. They sell shares into a follow on round of investment, and pay capital gains
3. They get acquired by another company and pay capital gains on the full value of their shares
4. They IPO and sell shares into the public market and are taxed on the capital gains
The idea that these people never sell their shares is an idiotic conspiracy theory that can be disproved by looking at the insider transaction filings of any of those companies.
> In the same way, SEIU seems to have found a bug in direct democracy ... Seems like an ignominious end for California’s ballot proposition system.
Hmm, although the specific details of this scheme seem specific to direct democracy, I'd say pretty much every political system has the same types of issues! You don't need a ballot proposition system to extort money from a political system.
If you're going to have direct democracy you should do what Athens did and force all the voters to go to the Agora to listen to pro and cons debated for the day before voting.
Well, if you're electing a president that's representative democracy rather than direct democracy. As long as the politicians elected are afraid of being voted out if they mess up they've generally got a lot of incentive not to do a lot of stupid but nice sounding things, though this isn't perfect.
In the California ballot question case you'd probably have to have people in a lot of different high school gyms watching debates over television and then voting afterwards if you wanted to do it this way. Or just restrict direct democracy to polities where everyone can fit in the town hall.
The virtual Agora called the Internet has unlimited capacity. Make sure people who aren't present for the entire online session with their webcams on don't get to vote. AI can watch the webcam stream and see if the attendee is paying attention.
That's an interesting concept, but hardly solves the problem of ill-informed voters following charismatic leaders to ruin. In fact, that very thing happened in Athens with Alcibiades's proposal for at attack on Syracuse.
Didn't the ancient Greeks, or one of their states at some time, have a system whereby if someone proposed a law and this was not voted to be adopted then the proposer was executed? Sounds like an ideal principal to bring back into effect for people like this Dave Regan!
While execution is extreme, maybe some form of disincentive is needed against bad proposals. Maybe the loser needs to pay for the legal/marketing expenses of the other side?
I was in the local union in NH in the 1980s while working at the state psych hospital. It was the State Employees Association and mostly decent folk 'from right heah.' Then it affiliated with SEIU and within a year I got out. It ended up costing me personally when I had a harassment complaint against my department. I could have used them. But I would do it again anyway. They kept insisting that the national connection would give us access to "resources" so that we could have a greater voice. That mostly seemed to be bringing up big guys from NJ to stand with toes over the edge of the designated areas to accost people to vote for Democratic presidential candidates. Did you ever shake hands with a guy who cuts sheet metal for a living?
I think unions are a great idea. It's a shame ours have all metastasized.
Capital likely wouldn't fight unionization so hard if it wasn't a one-way ratchet; like how French companies are hesitant to hire because it's so difficult to legally fire a bad pick.
If a union had to be recertified by secret ballot after each contract term, both management & the union bosses would be on better behavior.
People talk about how bad the French economy is because of this stuff, but first google result suggests long term average GDP growth in France around 3.0%, vs 3.2% in the US.
I know that when you're talking about long-term cumulative growth curves, .2% isn't actually insignificant. On the other hand, they get a legal minimum of 5 vacation weeks per year, I'd give up a lot of the little bullshit consumerist stuff I waste money on for that.
France has zero actual innovation, and they're basically the best in Europe. It's amazing Mistral still exists after the EU basically regulated AI out of existence, and they're continually being brain drained of their best talent to SF, for reasons like the comp differential I posted there.
As a French worker, I do feel like the social goods provided by that money (paid holidays 5 weeks/year, free healthcare even if I lose my job, public transportation and infrastructure, easy-to-fill taxes, cleaner energy, etc...) are worth it. But then I'm not my employer.
High unemployment rate is bad, but not the worst thing ever. In fact, in an economy with wealth growing faster than its labor needs, I feel like unemployment is fine... As long as it doesn't make your life suck.
From what I understand unemployment in the US is much more of a dire situation than it is in France.
No, they get eradicated by existing unions in direct competition with them, in alliance with governments who want it to be easier to negotiate with a whole industry at a time. This has happened a dozen times.
"Capital" is not a faction; by construction it is composed of people in competition with each other who cannot safely coordinate if they want to. It does not take actions as a class; it cannot.
(Nor can unions as a class, but new unions can be destroyed individually by single big-union competitors in the same market.)
Well of course they have. The way "unions" work in the USA is by being a government-condoned monopoly (of labor, in a given area/sector). You can tell, because so many of them treat union membership as a prize to be carefully hoarded, instead of giving it out to virtually any entry-level worker in the sector as a way to increase their mass bargaining power.
In the Nordic countries they have a different idea of what a union means.
I am trying to wrap my admittedly feeble mind around the concept of a retroactive tax. How far in the wayback machine can one push this? I guess maybe it's proposed by the same people who champion reparations from people who never did the bad thing then but are being forced to pay for it now.
I agree that retroactive changes to the tax code are bad, and an economic version of ex post facto convictions, however I'd like to point out that the right wing recently did the same thing (the BBB tax changes were passed July 4 2025 and affect the entire 2025 tax year, Jan 1 2025 to Dec 31 2025)
This is not the same because the general legal principle is against punishing someone with a law passed retroactively. Not benefitting them with a law passed retroactively
The Supreme Court has upheld retroactive taxes as long as the retroactivity is “rationally related to a legitimate legislative purpose.” See US v Carlton 512 U.S. 26, 31 (1994). So a tax could theoretically be applied far in the past as long as it could meet that (low) standard. (Haven’t done a deep dive on this issue so take this analysis for what it’s worth)
Well, thanks. Looks to me like the words "rationally" and "legislative purpose" are difficult to imagine belonging in the same sentence these days . . . especially in CA.
> "... a bug in direct democracy: it incentivizes interest groups to search for the most destructive possible ballot initiative that might nevertheless get approved by low-information voters, since this gives them leverage..."
There's a solution to this - well before the vote, randomly select 5% of the eligible voters to vote on this proposition (different for each proposition) and inform them that they are the only ones voting on it. This incentivizes these voters to educate themselves on the issue. The hope would be that they treat it as a civic responsiility, like jury duty, and put serious effort into it. (No guarantee of course - no system of government is guaranteed to work.)
I suspect that 5% would be too many, the incentives too dilute, to really change anything.
We can find a number that might work. But it would also incentivize these voters to reach out to the SEIU and to various billionaires and say "now how much am I bid for my vote on this issue?". If we get it down to a dozen or so voters, we can maybe sequester them like a jury to prevent that, but now there's the question of how we get them unbiased information to make the decision; if we just let them have internet access, they'll be back to emailing the SEIU.
Well, the incentive would be 20 times greater than at present. But even if that isn't a crudely rational reason to do research (even though small chance of big effect may work out as positive expected return), the less crude effect may be for voters to see it as a special responsibility that they will take on.
Yes, sortition/Citizen's Juries are one of the classic proposals for this kind of problem. Typically they say something like 1000 people rather than 5%.
At 5%, most people will end up being selected at some time, fostering the feeling that they are involved in the system. Also, I have in mind them voting in the usual way, with them learning about the issue in the usual ways, just hopefully more intensively. I imagine "Citizen's Juries" involve them meeting each other and discussing, which might be good, but might also be bad (social pressure, etc.).
> At 5%, most people will end up being selected at some time, fostering the feeling that they are involved in the system.
Fostering the frustration that they were forced to be involved in the system, more like. 5% has basically no advantages over 100%. You'd still have minimal individual impact on outcomes, it would cost *more* to run an election than for 100%, and there's little or no reason to think that people would be more motivated to investigate issues if they're one of 14,000 voters (registered, Wyoming) or 30,000 (eligible, North Dakota, no registration roll exists) than if they're one of 280,000 or 600,000. If not more. There's a reason why none of the serious proposals or roadmap considers anything as large as 1% of the registered voters; it does almost nothing to help. You're reinventing ideas discarded long ago as lacking sufficient benefits to justify the increased costs and enormous political difficulties. You should probably look them up; I gave you the standard keywords to search for, which you apparently chose to ignore entirely.
Huh?? Why the hostility here? Why the scorn for anyone making a suggestion, then clarifying it and offering a further justification, without first reading your favourite references?
And why are you so confidence that people will not feel involved in the system if they are asked for their opinion 5% of the time, but instead see it as being "forced to be involved"? Has anyone tried this? If you know that it's been tried, why didn't you tell us the details of what happened? And if you don't know of anyone trying it, it's ridiculous to think that you can get a definitive answer by armchair theorizing. People aren't that simple.
And I note that what seem to be your preferred methods of sortition and liquid democracy have not actually been adopted anyplace I've heard of, so I don't see "political difficulties" as being a good argument against trying something a bit different.
Well, if you can get 874,641people to back you, it sounds like a there is a good opportunity to do exactly the same thing to SEIU. A ruinous ballot proposal or pay out a few million. Hell, id sign on for that.
Is it possible that the design flaws that threaten startups are a feature, not a bug? (To clarify: is it possible that some people at SEIU wouldn't mind taking the startup scene down a notch, not just as a threat in an extortion attempt, but because they denuinely dislike it)
"Seems like an ignominious end for California’s ballot proposition system", seems like incredible optimism. I'm pretty sure the ignominy of California's ballot proposition system is barely coming to a middle; I'm not sure I can see an end that doesn't involve an apocalypse of some sort.
Possibly California can serve as a warning to other polities thinking about ballot-proposition direct democracy, and some of them can get it right. That's not as good as California being the nation's hub of innovation, but it's something.
Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
They do go to some lengths to inform people, but I think you’re falling into the trap of assuming Europeans are just better without any real evidence. Rural Switzerland is extremely conservative and xenophobic
> They do go to some lengths to inform people, but I think you’re falling into the trap of assuming Europeans are just better without any real evidence.
Are the crime rates not evidence? I'm not talking about minorities here, a quick search showed me that the homicide rate for US whites is over three times higher than those in European countries.
I don’t think that really has any baring here, does it? I can pick arbitrary statistics that make the US look good and Europe look bad. For instance, Europe’s economic growth over the past decade has been abysmal, most European countries are so racist (in average) they’d make Strom Thurmond blush, and so on. These are all things where there are real differences (as in the US homicide rate) but I don’t think there’s any evidence that Europeans on the whole are less polarized - I’m not up to date on Swiss politics but certainly when I last looked into it that’s not how I’d have described it.
> Europe’s economic growth over the past decade has been abysmal
Because of policies prioritizing social good that are not conductive to growth.
> most European countries are so racist (in average) they’d make Strom Thurmond blush
That would actually help with maintaining social cohesion. Keeping outsiders as outsiders means they can afford to only interact with their own kin, who they can trust.
In fact, it's likely the *opposite* of being highly polarized. In 1960 the United States of America was highly **un**polarized. And we certainly had lots of conservative, xenophobic rural Americans then! In fact, the existence of those conservative xenophobic rural Americans was a major factor in maintaining the unpolarized state of politics. There were two axes, economic/philosophical liberal vs. conservative and racism/xenophobia, and both parties were divided along both, with many cross-party coalitions occurring in Congress and within the states, because those in each party who agreed on one axis but not the other crossed the aisle to push for policies that supported the thing they agreed on.
Also, for low-information, it's irrelevant, and I'm certainly not guessing without evidence. For decades Switzerland got *utterly voluntary* >90% voting rate. After a brief experiment with digital voting, IIRC they're down to merely 60-70%. You don't get that without people actively interested in politics and voting for a purpose. Maybe not for its own sake - the drop in in-person voting between before and after the digital voting experiment suggests social pressure - but at least as a means to an end, they're interested.
I used to be really proud of living in a state with a culture of citizen initiatives. But after fifty years of seeing how they work, my standard policy is to vote “hell, no” unless I have some really good reason to believe in it. Sometimes this is when there is a “pro” argument in the voters’ guide but no “con” argument submitted — but even that isn’t a lock. And I absolutely vote against initiatives that are constitutional amendments; even normal initiatives are too sticky.
>Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
Prosecutorial discretion. Ballot measures can expand people's rights by legalizing things (with judges throwing out charges brought against people for legal behavior) but prosecutors can choose not to bring charges for violating referendum-passed laws like this tax thing.
> Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
I've got a direct democracy system (rather than ballot proposition system) that uses AI and does this.
Here's a scheme I came up with in an afternoon of thinking about it:
* People vote through the voting app.
* Direct democracy alignment on priorities - “voting” is now not about which professional liar / 90-year old multi-millionaire half-corpse you think should be in charge of everyone, it’s about citizens staking a capped amount of vote tokens to weight high-level objectives (economic growth, homicide and other crime rates, UBI, immigration, equity / DEI, CO₂, etc.). As in, you get a standardized menu of items you can stake your tokens against, but you only get so many tokens, so prioritization and trade-offs are built-in.
* AI proposal - The AI proposes legislation to attain the aggregated democratically defined priorities, with a detailed prompt outlining the total budget and soliciting it to consider the homeostatic landscape, to predict the primary, secondary, and tertiary effects, to outline the monitoring KPI’s and thresholds, and to define a good sunset or re-evaluation time for any proposed legislation.
* Futarchy vetting - Prediction markets and digital-twin sims price the KPI impacts before enactment, as a human check on AI predictions, and as an overall evaluation ground over many such proposals, so we can understand the overall landscape of which proposed legislation will move various needles the most. This is federally funded so there’s enough alpha in there that smart people / companies will be doing this full time.
* Democratic vetos - A stratified random sample (≈ 1 - 10k citizens depending on locality) gets the top 3 AI-optimised bundles for each priority, plus the market scores, and can veto any of them in the aggregate if enough decide to veto. This caps downside from model myopia and value-misalignment, and keeps democratic participation in the loop, without the pernicious regulatory capture and misaligned incentives we get today from full time politicians, lobbying groups, and industry insiders.
* Monitoring and execution - Smart-contract escrow releases more funds only if real-time KPIs or GANTT charts track forecast bands, limiting boondoggles and downsides.
What does voting look like? You open an app and allocate your voting tokens to the high level priorities you care about.
Occasionally, you’ll get a push notification to decide whether to veto some random bills or not, which you can ignore or answer as you like. Done.
It scales to every locality size - from the HOA, to municipal, county, state, and federal level.
And at a shot, we’ve eliminated political parties, politicians, lobbyists, industry insiders, regulatory capture, and most of the other ills that plague politics today.
> Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
The problem is the way that initiatives are selected, not the fact that they are voted upon. If initiatives are chosen by the elected representatives then there probably won't be any truly-disastrous initiatives put up.
California seems to have a terrible system in which the way you get a ballot initiative on the ballot is to collect some vast number of signatures (apparently around 850000). This means that the only way to get anything on the ballot is to be a well-funded well-organised conspiracy with a lot of skill at getting random low-information voters in the street to sign things they haven't read.
One thing to note about 'buy borrow die' is that while it got quite a lot of press and is now a passed-around meme, it doesn't appear to happen especially often. There are a lot of legal issues around how the meme would allege it works, but regardless, it doesn't show up in the data (in notable part because the super-rich don't consume most of their income): https://www.sciencedirect.com/science/article/abs/pii/S0047272725002178
"it also incentivizes the hunt for loopholes: addictive products that can take advantage of seemingly-tiny wedges between what people will buy and what’s good for them. Cigarettes, casinos, payday loans, and social media all demonstrate that these wedges collectively form a multi-trillion dollar niche."
An economist (or at least an economist who believes in markets) would question Scott's claim to know what's good for consumers better than the consumers themselves do. Cigarettes were not created to fill a wedge between what people will buy and what's good for them - they were mostly viewed as a pleasurable vice. The evidence of the extent of harm became visible later, and smoking has become much less popular since. Payday loans get an especially bad treatment by people who know what other people need, but they fill a real need for people with low assets and no savings to come up with quick cash to cover some emergency, like car repairs that allow the borrower to get to work. Similar analysis could be made for casinos and social media.
"In the same way, SEIU seems to have found a bug in direct democracy: it incentivizes interest groups to search for the most destructive possible ballot initiative that might nevertheless get approved by low-information voters, since this gives them leverage over anyone willing to bribe them into withdrawing their poison pill."
It seems to me that direct democracy is the bug. Representative democracy was widely adopted, especially in the United States, because history, particularly Greek and Roman examples, had many examples of easily-persuaded voters adopting bad or tyrannical policies. The initiative system was proposed during the Progressive era as a way of getting around entrenched interests that were seen as gaming the system and obstructing needed changes. It came with its own problems, which have been seen before in California.
"Similar analysis could be made for casinos and social media."
I agree you could analyze everything this way, but I've talked to gambling addicts (and nicotine addicts) and they don't think of their consumption behavior as a reasonable choice which fits their needs.
I'm less willing to put payday loans in this category than I used to be, especially after seeing stuff like Klarna that encourages people to finance their DoorDash order at crazy interest rates. Although you can always tell a story where people really need a burrito right now and rationally have very high time discounting rates and so on, I think if you're not ideologically committed to that story, it makes more sense to think of them as just not making very good choices and thinking "Haha, I can pay it later, which means it's basically free now!" I think the more you're familiar with how lots of people think, the more plausible this becomes.
Speaking as someone who has been addicted seriously enough that I spent six months not leaving my room except sneaking out late at night to steal and eat some of my flatmates food, and who destroyed my life and potential choices at the time because of my addiction, the choices that addicts make are still choices that we/they are responsible for. We/They do in fact have the option to say no and stop. Blaming capitalism is bullshit.
I don't think there's a binary "blame addicts" / "blame capitalism". The number of marijuana addicts went way up when marijuana switched from being illegal to being advertised on every billboard. We can debate all day whose "fault" it is, but that seems less interesting than the brute fact that it's a political choice whether we think it's worth having those extra people be addicted vs. not.
And, as the man above you said, neither you nor I nor voters have any cause to stand in judgement for these people when they can stand for themselves. They are making a choice. That you don't like it doesn't mean it ought to be enforced by political power.
It probably is, though I imagine it would have to be a constitutional amendment initiative, which I believe requires a larger signature count to qualify and a supermajority of votes. I normally vote against proposed amendments, as they are even harder to undo than normal initiatives, but this one I’d be all for.
> ... it’s no surprise that California, a state full of bad socialists, is considering bad socialist policy. But I think this is the wrong perspective. This proposition isn’t being sponsored by some generic group of Piketty-reading leftists. It’s the project of SEIU ...
What SEIU does is precisely socialism in synecdoche. What you're gesturing at as more principled socialism acts in this way toward every industry, not just healthcare.
Socialism is the same as this type of racketeering, except being organized and benefiting one industry, it's done by the entire proletariat for the sake of their class interests. The only difference is scale.
Direct democracy is a terrible idea. Effective, stable democracies elect representatives who take accountability for their work.
Billionaires are a failure of public policy.
Both these ideas can be true at the same time.
No person has ever 'made' a billion dollars. Some people have 'made' a million dollars.
If you have put the effort in, built a scalable business in the seventh attempt, and floated your luck to ONE BEEEElion Dollars, that's nice. Now pay up. Taxing insane capital growth is a normal and natural function of a society.
As someone that believes in a national wealth tax and massive capital-redistribution in the age of AI, I was going to vote against the CA measure purely on the wrong jurisdiction problem: Individual states cannot tax stuff that can easily escape their grasp at the stroke of a pen.
However, I disagree that the gaming of direct democracy by the SEIU is any worse than the gaming of our utterly corrupt pay-for-play representative democracy by the wealthy and powerful interest groups.
At least direct democracy directly relies on the voters who are the ultimate source of legitimacy. That it requires voters to be well informed is correct but I will take that any day over pay-for-play corruption after the election at which point voters no longer have agency.
So CA's direct democracy is very much needed as a counter against the corruption of representative democracy even if it can be gamed in some instances.
It might not be worse, but that doesn't make it good.
Direct democracy requires voters to be well-informed, so what does it imply when they are *not* and a jurisdiction still uses direct democracy? For the moment, let's put the question of whether CA in particular is well-informed enough to support direct democracy. What happens in a direct democracy when voters are certainly not well-informed? Does voting still have legitimacy, do voters have agency?
I suspect it just moves where the pay-for-play is located. However, that relocation supports your argument that even a sometimes-corrupted direct democracy may function as a necessary counter against corrupted representative democracy: it decentralize power so anyone wanting to rule it all has to play multiple, less individually-decisive games. With any luck, the different games close each others' loopholes.
>What happens in a direct democracy when voters are certainly not well-informed? Does voting still have legitimacy, do voters have agency?
I think so. In direct democracy voters are deciding on an individual policy question and so by definition they are being given agency to make a concrete choice on an issue. If they choose badly they have no one else to blame except themselves.
In representative democracy, not all issues are litigated before the election. The representative uses personal discretion to pass legislation and he/she can be bribed easily to pass policies that would never pass if voters were asked to vote directly on said policy or block legislation that most voters would want if allowed to vote on.
Our low-info voters regularly elect rapists, convicted criminals and other shady figures to high office.
So "low-info voters choose poorly" applies both to individual policy votes and the selection of representatives themselves.
Having more avenues to error-correct than fewer is therefore better.
>"Having more avenues to error-correct than fewer is therefore better."
Not necessarily. There may be multiple disjoint sets of policies that are internally coherent, with each candidate representative representing one. Direct democracy opens the door to selecting an incoherent policy set.
Representatives merely coarse-grain over voters. Since district lines are arbitrary to some extent reflecting pre-existing power structures, the result of a direct democracy can sometimes differ from what you would get given a particular gerrymander. I don't buy the idea that one is necessarily more "coherent" than the other.
>Whereas letting the populace make policy choices à la carte results in:
>- repeal tax Y
>- start program R anyway.
Under our representative Democracy the American voters have been consistently voting for 16-19% GDP in taxes and 22-24% GDP of spending for many many decades now. Since money is fungible, voter incoherence simply gets aggregated into the national debt in our current representative democracy. It does not solve anything.
If you wish to impose some high level constraints to prevent incoherence under some interpretation those constraints need to be enshrined in the constitution. Voters should not be able to pass arbitrary laws even under direct democracy.
No, the Supreme Court has upheld retroactive taxes multiple times. See US v. Carlton, 512 U.S. 26, 31 (1994). The prohibition on "Ex post facto laws" only applies to criminal laws.
While I hate that capitalists find loopholes to exploit the system and loot spoils from the rest of us, and I hate that labor organizations find loopholes to exploit the system and loot spoils from the rest of us, I'm always skeptical when someone advances the solution of 'so lets close all the loopholes being used by labor organizations!' and ends it there.
Given that I'd prefer to live in a world where both sides are disarmed, that doesn't necessarily mean that things will be better if one side gets disarmed unilaterally. If you tell me there is a loophole that lets labor extort capital, and doesn't hurt anyone else, then I'm directionaly in favor of it... those two groups are definitionally in conflict with each other, and I think capital currently has way too much power in that relationship.
That said, if Scott is saying he's done more research and this loophole 1. only helps a tiny amount of the labor class, and maybe helps special interest orgs claiming to represent labor more than the actual workers, and 2. does hurt everyone else in salient ways, then sure, I'll provisionally lean against it, pending having the attention span to look into it more on my own.
But I still want to register my skepticism of this type of argument... You can make perfectly good critiques of only one side of a conflict, and still end up unbalancing the system and pushing it further from the optimal equilibrium. Classic isolated demands for rigor.
Labor & capital are capable of positive-sum interactions; the pie can grow.
Land, however, due to its fixed supply can at best participate in zero-sum interactions.
Any pie growth the first two factors achieve ends up captured by rent; landowners benefit by masquerading as capitalists, simultaneously deflecting labor hostility to actual capitalists and free riding on their defense against the deflected hostility.
Okay, so if direct democracy is demonstratedly inadequate because of *broad gesturing at California*, and representative democracy with the reps chosen by direct democracy is tolerable but not much better, then what's the better policy for choosing reps for representative democracy?
Lottery from the population that's 90%-confidence impacted by the proposal, weighted by the size-certainty product?
Ex post facto laws, as prohibited in the federal and California constitutions, are laws that make previously innocent action criminal. Changes to the tax law don’t count, since they do not make any previously legal action into a crime. We see this in many, many years when the tax rates are changed mid-year. (Even so, you would see a lot of resistance to a change in the tax law that forced everybody to recompute, say, their 2023 returns.)
There are plenty of things wrong with the “billionaire tax”, but this particular objection isn’t one of them.
I see this as a general problem with ballot initiatives in general. Any sort of well-organized special interest group can easily gather enough signatures to put their pet issue on the ballot. They give it a nice friendly name, then fill it with technical details that the average voter won't be able to understand. If it wins, they get a huge win, and the state legislature is powerless to overturn it becomes it outranks them. If it loses, no big deal, they just give it a new name and come back in two years. With more and more of these initiatives on the ballot, it becomes harder and harder for even well-informed voters to study them all. And just to add insult to injury- the number of signatures is both *low* enough that any large organization can gather them easily, but also *high* enough that a regular well-intentioned citizen can basically never reach that point.
To be fair, this is also sort of a problem with any democratic system- you can just keep proposing a law no matter how many times it fails. But at least in congress, you've got a party system to set an agenda and prevent too many spurious laws from coming up to vote, and a whole staff to read the proposed laws and explain what's really going on with them. We gotta get rid of this state-level direct democracy nonsense.
> “ […] an existential threat to the Silicon Valley model […]”
I didn’t need to read anymore to know to fully support the SEIU’s scheme (whatever it is) that will force Silicon Valley to move to Detroit (or wherever)!
Sure, I mean there's always missing steps in every argument.
This is an argument that SEIU is a terrible horrible organisation that makes things worse for everybody. To get from that to SEIU delenda est you need an additional assumption that terrible horrible things should be destroyed.
> you need an additional assumption that terrible horrible things should be destroyed.
That *is* a big step. What if I believe that before we get the Paradise, the Apocalypse needs to happen first?
From that perspective everything good is bad (it delays the Apocalypse, and therefore the Paradise), and everything bad is good (it brings the Apocalypse, and therefore the Paradise, closer).
From that perspective, SEIU is working hard to bring the Marxist Paradise to the workers.
> What if I believe that before we get the Paradise, the Apocalypse needs to happen first?
At the very least, the source of society's ills needs to be destroyed before it can be replaced with something better. All sustainable systems resist change, good or bad. They will not willingly destroy themselves.
separate question: why would a billionaire object to losing 5% of their wealth to pay for healthcare given that this money is effectively meaningless to them?
Probably because it will be 5% this year, 5% next year and so on until they lose most of their wealth and control of the companies they built. There is no way that this initiative passes but the next "one time" one is rejected because "oh we just had one time tax a year ago". Pretending otherwise is either being disingenuous or stupid.
They don't have enough money to pay a 5% wealth tax; they'd have to liquidate a great deal of wealth to do that. And if this wealth were effectively meaningless to them, they wouldn't have gone through the very considerable trouble of acquiring it. You may be typical-minding, assuming that because *you* can't think of how to meaningfully use gigabucks, it's meaningless to people who are in fact very different than you.
I mean the objection is that's it's 5% of "wealth". The very definition of unrealized asset is that it's not here yet. We already have lots of tools to tax realized wealth, but taxing unrealized ones is always idiotic.
Billionaires are not your friend. Why do you expect them to want to pay for your healthcare? They probably don't want to pay for healthcare because they're greedy.
Ignoring for now the question of the efficacy of health care taxation, I'm also confused about exactly why billionaires care about their unspendable amounts of money.
I have more money than I ever expected to as a child, and although I'm not a miser or anything and feel like I appreciate it, I also find that I hate losing it and could always use more. Some reasons:
- Once I have more money, I start to think of things like "If I lost my job tomorrow and never got it back, could I live off savings indefinitely?"
- And things like "If the world is too messed up for my children to make a normal living, could they live off my savings indefinitely?"
- It now seems reasonable to me to invest in friends' startups / other startups I care about, and this is expensive enough that even having a lot of of money means I can make a significant different / angel investment in ~10 companies. If I had more, this number would go up. I would love to be able to throw $100K at a magazine I liked and thought deserved to exist, without worrying about whether it would ever make it back. And I'm saying $100K because that's the sort of thing that seems almost attainable if I were one level richer than I am now, but I'm sure the real billionaires are thinking this about, like, $100M to fund the Washington Post or something.
- It now seems reasonable to me to make big charitable donations, of the type that significantly expand a small charity's capacity, or get big charities to consider making me an advisor or somebody they keep in the loop about their activities. Again, even a large amount of money would let me do this ~10-20 times in my life (although getting reader contributions through ACX Grants very significantly expands this).
- I have friends who are richer than I am, and I always kind of feel like I'm getting away with something or owe them a favor when they invite me to their rich person parties which are much nicer than any party I could reciprocate with, and if I were richer, maybe I would feel like *they* owe *me* for coming. I admit this doesn't apply as much to a tax which makes everyone poorer, but maybe people haven't emotionally made that update.
- Speculatively, if I were Elon Musk level rich, I would want to do Elon Musk level things like buying Twitter, or buying elections, and that's so expensive that even Elon has to think twice about affordability (this isn't true by the numbers, Elon has $800B and Twitter only cost $40B, but it seems to be true in practice, maybe because most of Elon's wealth is illiquid in some sense I don't understand).
I have less than 1/10,000 as much money as top billionaires but maybe these same sorts of concerns apply to them too?
I guarantee you that, whatever your level of wealth, you've probably got plans as to how to use all of it, and you will notice 5% of it not being there any more. And not in a way that will motivate you to do good works that benefit the people who are taking your money, or even tolerate their presence any more than they have to.
Off-topic, but you can stop ChatGPT from producing such unreadable text by including something like the following in your user prompt: "Write in complete paragraphs, made up of complete, grammatically correct sentences. Avoid using bullet points. Avoid excessive use of bold for emphasis."
Warning: please make fewer assertions, more arguments.
(in particular, as written this sounds basically like the thesis statement of totalitarianism; I think if you are trying to assert something different, it needs to be more specific)
Haha, it sure does sound like it. But I think you've already discussed in an article whether democracy is for the people to have the choice to have any wall color you want, to have the choice to be able to force everyone to have specific wall color you want.
I think you've also touched on a subset on libertarianism that wonders if a totalitarian state is the way to go that can actually implement "true libertarian" irl. Essentially you concentrate everything to one entity (the state?), and then have that one entity do it as little as possible. We already have that for violence (and maybe we can say that as working fine?). For capitalists, we may also have that for any rent-seeking behavior ("thou shalt not have moat"?). Of course ideally we don't want to have it at all, but this configuration may prove more stable instead of devolving into local warlords in a second.
But wouldn't it stifle innovation? One could also argue that centralized violence makes us all weak, and there's also argument that the reason china fell behind in 19th century is that they were too centralized for their own good compared to Europe that had to compete with each other. But that's another discussion entirely. I think libertarians also always have uneasy relationship with copyright.
Regardless, local warlord (union) bad. Either have it be as big as possible or none at all.
Side note: I thought this is how "there is no god but God" supposed to work. By concentrating all supernatural beliefs to one entity only, you're eliminating all beliefs to anything else and should result in a more rational behavior overall.
What on Earth makes you think that a union would be interested in helping you do that?
In what sense would a union be interested in helping their members? In what way are their interests aligned with helping their members out? The union's interest is in maintaining a huge swath of angry underpaid workers; having well-paid and happy workers is very much contrary to their interests.
nah that's not true. I'm a member of a union and they work for me. My mom was a member of a union and they worked for her. The leadership are elected by the members. The Starbucks union is way more concerned with the interests of starbucks workers than the starbucks corp. is -- the starbucks corp. is just responsible to its shareholders. where did you get this cynical view of unions? have you ever been in one?
Yeah, I don't think this describes most people's opinions with unions, and it also seems like potentially an argument against all forms of human organization (it's the old "why should doctors cure you, their interest is in keeping you sick forever so you keep visiting them?")
Is "pro union" "pro everything a union does"? What is the union was abducting people and holding them for ransom, would you make this same post defending them?
"And the thing is, people seem to get very, very, VERY upset when a union uses a cynical tactic that we wouldn't even consider worth mentioned if someone else did it.
Abuse a local ballot system to extort money from someone who would be harmed by the initiative? Let's talk about every neighborhood group that has met a developer who needs local approval to go ahead. If I told you Republicans were using this tactic, would you even look surprised? If a corporation were fighting tooth and nail just to not spend $5 on safety regulations, would it be considered the end of ethical policy?"
Since you aren't going to read the very next paragraph in the full version I linked to from above, I'll post what I said next from it here:
I'm sure Scott and others would agree those (frequent) examples are bad, but you don't go writing "Boeing Delenda Est" over their lawyer fighting for Boeing to save a buck. George W Bush (the one who's a saint compared to Trump, these days) put constitutional amendments on ballot measures to ban gay marriage... just to get more of their voters to show up and vote for Bush. YES VIRGINIA POLITICAL GROUPS USE THE BALLOT SYSTEM LIKE A POLITICAL TOOL.
The foundational assumption of this argument is that if a billionaire tax has passed, then billionaires will leave the state that has *made them a billioniare* to save a portion of their wealth they will never notice. Which might be true (and might not), but that seems about as cynical as what SEIU is doing here.
When anyone else practices self-interest in politics we say that's just the way it is, and the other side has to fight back. But when unions do it, it's a major public crisis.
I think the debate about "how effective the tax might be" is, in practice, the only kind of debate that can be had. Debates based on morality are notoriously subjective (and usually religious) and cannot be resolved other than by force.
I don't think that's a common line of argument because most people don't consider rich people to be "minorities" in any relevant sense. If the proposal were to take 5% of the wealth of, say, Hindus, I'd have stronger moral objections. People convicted of first degree murder are also numerically a tiny minority, but few people have much sympathy for them.
Now just to be absolutely clear, I don't think anyone sane believes billionaires are all morally equivalent to first degree murderers, or that any and all anti-billionaire actions are morally justified. I'm just saying that they're the same type of "minority" in the statistical sense, so arguing against the proposal on practical grounds is the better strategy to use here.
• Get rid of the basis step up, estate tax, and lower capital gains tax rate.
• Treat inheritances as taxable income, possibly with an option to spread out over a few tax years.
However, Biden tried to get rid of the step up and there was a huge pushback from rural democratic representatives, so I’m skeptical we’ll ever see a reform like that.
Can you explain "the whole point of the step up"? I thought step up was an attempt to avoid doing this?
More to the point, although we do tax estates in some ways, this is a claim that if the state wants more of billionaires' money, it's more effective to ramp up that method rather than add the other ad hoc methods being described here.
The step-up was implemented to prevent the same appreciation from being taxed twice: once by the federal estate tax (on the total value) and again by capital gains tax (on the growth). The step up simply reflects that a tax event occurred upon death based on the assets' present-day value (my comment was asking if this is much different from treating death as a virtual liquidation event), and so their basis should be updated to match that present value.
Doesn't this make the whole step up basis thing people keep complaining about, often in conjunction with the supposed "buy, borrow, die" strategy, a non-issue?
What then exactly is the problem with "buy, borrow, die", even if it was actually commonly used? When they die their assets are liquidated to pay back any outstanding loans, which triggers a taxable event, and the remainder is transferred to heirs which is subject to estate tax. Or is there some common workaround to avoid paying estate tax that makes people think the step up basis is a big deal?
There are ways to have an asset avoid estate taxes, but not without also avoiding the step-up. It's both or neither. And since the estate tax is considerably higher than the capital gains rate, my guess is that most billionaires will end up doing all they can to avoid the step-up.
So no, it probably doesn't deserve the attention it gets.
SEIU also represents a significant chunk of government employees, at least in SF as I understand it, and as such may be a significant contributor to the poor state capacity of CA state and local governments.
It's a shame, though, because people extracting taxes from the people who manage to evade taxes all the time is otherwise an inspiring idea. Since the issues have been clearly identified, surely we should be discussing doing it again but correctly, with most of the the objections resolved?
Unions at their worst may be what makes my blood boil more than anything. At their worst, they're essentially a group people who take a dollar from everyone else and then share that huge sum amongst themselves. The result is a concentrated benefit for the group leaders and members, and a diffuse cost on the rest of the entire world. How much worse off is the rest of America (and the rest of the world for that matter) due to the fact that unions control our ports and want to keep them manual and inefficient? Probably a larger cost than the benefit that the typical ILWU West Coast dockworkers receives in the form of his ~$200,000 average salary. All of it cloaked in the language of support for the little guy, helping the workers, and taking a stand against the evil rich.
Every union I've ever joined or worked with has been great and produced huge value for its members. Every union I've ever read about online is a corrupt plague that accomplishes nothing and chokes productivity.
Sorry, but I think I'll be believing the evidence of my lying eyes today.
Well my belief is that most unions produce huge value for their members, I'm not arguing that at all. I'm also only talking about a small subset of unions "unions at their worst."
I mean by definition union should benefit its members... At the expense of everyone else. It's a monopoly after all and the more a monopoly exercises its power, the more everyone suffers.
Right, but the idea is for *everyone* to be in a union, so that their identity as consumers and their identity as workers are both represented in the market.
When you break labor power and favor the consumer over the worker, you set incentives towards a consumerist society where everyone is overworked to buy trinkets they don't really need. Lots of workers would trade fewer hours for less gewgaws, directionally from the current equilibrium; but you need a way for them to exert their preferences as workers for the market to incorporate that want.
Many people already choose to not buy new trinkets and choose to not work that much. But there are also a lot of people who do want new trinkets and choose to work more. Letting people make their own choices is good.
I don't know who has the option to choose to work 32 hours a week or 26 hours a week, every company I've ever applied at has a standard 40 hour workweek, and many labor laws are structured around that assumption.
Congratulations for the people who do have the ability to make that type of decision, but I don't think it's available to most people in most industries.
And the whole point of a co-op *is* that the workers can make their own decisions about how to do their work, instead of having a boss that tells them what to do. Making their own decisions far more than the current system.
...that's the whole point of free markets? Companies compete to offer the most to consumers in order to get their money? The Invisible Hand and all that?
I'm saying, the whole system is designed to optimize benefits to consumers, and that's how we've always measured its success. And that's worked really great, but when a metric becomes a target it stops being a good metric, and I think we've overshot favoring consumers to the point of neglecting other things and becoming worse off.
I don’t think my views on wealth taxes are shaped too much by whether or not I believe in taxing the rich. I believe in taxing the rich AND I am diametrically opposed to wealth taxes. I think that regular income tax should gradually go up to 50% for the top tax bracket and that capital gains taxes and inheritance taxes should increase too (In my ideal world there would also be some sort of constitutional amendment capping federal taxation at 50% of income).
This is much more reasonable and closer to what other countries have successfully implemented, unlike wealth taxes which always get rolled back for being impractical/not working. Ireland, Austria, Germany, Denmark, Nederland, Iceland, Finland, Luxembourg, Sweden, France and India all ended up getting rid of their wealth tax.
Also, anyone that has ever been involved with the personal finances of a startup founder understands how ridiculous a wealth tax would be. The founder with a billion dollars on paper and -100k in the bank account is not a myth made up to make billionaires seem more relatable. Many billionaires are not in that situation but some founders of highly valued private companies are.
You think we tax nouns, like "the rich", but really we tax verbs, like "working" and "investing". Decide the behavior you want less of, and tax that. I want more investment and less consumption, so I like a VAT. I'd love less carbon dioxide emissions, but that couldn't even pass in Washington State. I want a better city and less empty buildings, so I want a land value tax.
Billionaires are a byproduct of free markets. Free markets create power law distributions. Individuals are free to make choices. Those choices result in some people starting companies (the vast majority of whom will have a poor financial outcome). Those choices result in people investing in, working for, and buying from those companies. And those same choices lead to some people becoming billionaires. Society votes with their actions to decide who will become a billionaire (put aside inheritance which I believe should be taxed much higher). So you want to take wealth away from billionaires? Why not also take power law fame away from the famous? Make a law to limit the number of instagram followers anyone can have. How about people that were born really smart, is that fair to the rest of us? How about people that get to live in much better weather? Should we rotate people throughout the country so we all get to experience living at a ski resort or the beach? How about brands that are much more successful than others? Should we limit how many shoes Nike is allowed to sell? How many tickets should Taylor Swift be allowed to sell? How many world cups should Brazil be allowed to win?
The argument against billionaires is driven by the same old socialist sentiment of being annoyed that others have it better than we do. Would the world be better if we all truly had the same opportunities down to the genetic makeup? Maybe, maybe it would be dystopian. But either way that’s not the world we live in.
There’s an optimal taxing strategy, and this might change if AI redefines labor. And because the world is not optimal, there are things we could be doing better. But that’s not what drives the anti-billionaire sentiment. It’s not people with spreadsheets trying to figure out the optimal way to make everyone better off. It’s just driven by a much more primal energy.
Likewise, the very rich could be better about conspicuous consumption. Jeff Bezos does a disservice to his social class. Our tax code is designed to promote philanthropy. Those that benefited from free markets should acknowledge that meritocracy exists in theory, but that in practice they benefited from their genetics and upbringing, and even after that foundation, extraordinary success is largely correlated with luck. And that it was ultimately the actions of millions of people, which made them successful. They should be humbled by that and do what they can to give back and make the world a better place.
But doing destroy the most effective engine of wealth creation in history, for most people involved, because of feelings. Have some rigor.
On Twitter there are a lot of people crowing "you should have voted GOP." They seem to think that if you agree with 25% of their platform you should ignore the other 75%.
I think the point is if you can see past the propaganda for the 25% maybe you can try to see past the propaganda for the other %75. And it doesn’t need to be %100 it just needs to be more than whatever % you have for the democrats.
The ultimate problem is that the California Constitution has created a non-scalable direct democracy. We can hate the player, but this is the game. We are not a bunch of city states in Greece anymore.
The goal needs to be constitutional reform. We could do worse than simply patterning the state government after the architecture of the federal government.
But almost any pattern would be better than our current pattern. I hope the billionaires who have chosen not to leave will help us get there.
The Billionaire Tax Act is indeed a horrible proposal. But some kind of taxation on wealth is needed. Two main reasons: (1). Paying your fair share. A big portion of the benefits government provides (courts, police, even infrastructure) accrues to the owners of wealth in proportion to the size of their wealth. And (2). Income from labor (even white collar labor) is likely to become a declining share of the economy. We need better taxes on capital or income from capital in any case as AIs take over. See this for example:
Taxing wealth has a bunch of issues that taxing transactions does not. I'm quite willing to hear that we should constrain or eliminate the tax-free step-up at death. It's already a measureable event.
> Paying your fair share. A big portion of the benefits government provides (courts, police, even infrastructure) accrues to the owners of wealth in proportion to the size of their wealth
That seems fair enough. But nowadays of course, the taxes that you pay scale super-linearly with your wealth (or at least super-linearly with your income), so if we want people to pay their fair share then it will be a lot lower for the rich.
If we wanted to take this argument seriously then we'd note that some benefits that the government provides scale linearly (justifying a flat tax) and some are flat (justifying a poll tax), and we would figure out the proportion of each and land on a solution that's somewhere between flat tax and poll tax.
Tax spending on luxuries. How you define a "luxury" is open to debate. Is a car a luxury? A house? As someone without either, I consider them so.
Spending taxes can be regressive if they are applied broadly. But they can be progressive if their scope is narrowed. Most states use a sales tax for revenue, but exempt things like food. Taxing food is massively regressive. Poor people spend more of their income on food than rich people.
Tax purchases above a certain dollar amount. Tax categories of luxury: expensive imports, high-value cars and houses. Tax yachts, but not small boats.
Just ideas I am throwing out there. Of course, the richest already pay the lions share of the taxes. Is it just to tax them more?
Or, better idea: just spend less. Its always the spending. Libertarians have understood this for decades. Most governments have a spending problem, not a revenue problem. California has lots and lots of revenue. So do the Feds. But their appetite for spending in limitless.
I find this framing to be basically ridiculous. Inheritance is 100% earned, but by the person giving the inheritance. It's their money, they should get to allocate it to their offspring if they want. Tax it, sure, but it's a very strange world view to me that would allow me to give my money to onlyfans with a minimal tax but that giving my money to my own children should be punitively taxed.
> "Paying your fair share. A big portion of the benefits government provides (courts, police, even infrastructure) accrues to the owners of wealth in proportion to the size of their wealth"
Doesn't a flat tax already account for this? EG if everyone is taxed 20%, then billionaires are already taxed in proportion to the size of their wealth?
Yes. A flat tax on *wealth* takes care of it. But be sure that you are taxing the wealth where the wealth lives, rather than taxing the owner of the wealth in whatever tax haven he lives in.
We should not tax wealth, because wealth is investment that increases everyone's living standards. We should tax consumption, which is when resources are taken out of investments and consumed. Progressive consumption taxes are the most efficient and the most fair.
I was initially tempted to make an argument in response to this post that direct democracy is bad, but I don’t think that’s the strongest argument here nor does it get to the root of the problem. Too be sure, as you wrote, CA voters rejected SEIU’s dialysis proposal three times.
Those ballot initiatives came in 2018, 2020, and 2022 - just two years apart! And yet do we not vote for House representatives every two years ? You mention that both sides have had to spend millions of dollars on campaigning, but is not the same true of all political running for office ? Presidential candidates must spend millions, sometimes billions, of dollars every four years.
The article makes it sound like CA is on the precipice of enacting some very bad policy every two years but isn’t the same true of elections ? The people, if they wanted to, could give all 435 House seats to the “Destroy Everything” Party in 2026, and they could do it again in 2028, in 2030, etc every two years. So is America also on the precipice of self-annihilation, or at least enacting really bad policy, every 2-4 years because of regular elections ?
One claim here is that the voters don’t have to expertise to know what is good or bad policy. Everyone knows ballot initiatives are written to be as confusing as possible or in ways that make it sound good to voters so that they will vote for whatever the ballot initiative proposers want. Generally speaking, we could make an argument for a Republic that the voters are smart enough to know that things are bad but not smart enough to know the intricacies of good and bad policies. For example, the voters are smart enough to know the economy is in the dump, or that crime is bad, or that rent is too high, but they aren’t smart enough to know the exact policy which will fix the economy, or reduce crimes, or lower the rent.
Yet experience has cast doubt that the voters are smart enough to know that the economy is bad, or that crime is high, or that the rent is too high. Well maybe not the left own. But the entire vibecession of the last 3 years was arguing that voters think inflation is too high when it isn’t. They want deflation when that would destroy the economy. The voters think crime is high, when, as you recently wrote, it really isn’t. So this cast doubts on the voters’ judgement of even these basic things
Circling back to SEIU, even if CA got rid of the voter proposition system or raised the bar, couldn’t SEIU just go directly to politicians to influence them ? We know billionaires and corporations already do this, so why couldn’t any other large, powerful, and wealthy organization do this too ?
At the end of the day, everyone wants government to enact good policy. As Acemoglu and Robinson argued in “the narrow corridor” democracy is a Sisyphean battle where people are always fighting. If the people have too much power they do dumb policy, and if the rich and elites have too much power, they enact terrible policy for everyone but is good for them ie they create extractive institutions and policies. SEIU is operating like an extractive institution here. Ultimately, however, they cannot be “delenda’d” It can only be fought by people who disagree with their policy. It turns out millions of dollars defeating bad policy is the cost of doing business in democracy
>"Circling back to SEIU, even if CA got rid of the voter proposition system or raised the bar, couldn’t SEIU just go directly to politicians to influence them ?"
Who's to say they aren't already? The ballot proposition approach is just much easier because hoi polloi ignorantly emote about issues.
That's just mean. (And bad discussion practice, if its a valid position you should be able to give reasons for your position. - Unless it's axiomatic, but that would be a rather weak first principle.)
Banned for this comment. Out of deference to you having a long history of other good comments and being a paid subscriber, the ban is only for 30 days.
It's probably time to start talking about breaking up California, and it is definitely time to constitutionally ban public sector collective bargaining.
Honestly I don't really know what the upper bound is on what public employees can ask for, union or non-union.
In the private sector, there's a balance because if you pay employees too little, they leave, but if you pay employees too much, you're not cost competitive with other firms and you lose customers.
In public sector, streetlight maintenance, garbage collection, street paving, arresting criminals, etc. are kind of a steady stream of guaranteed work, so what's the disincentive for paying employees high salaries?
It seems like the only disincentive is that the voters might get angry and vote in someone to lower costs. But I think right now California voters are typically going to side with labor. Whether they're unionized or not doesn't really matter.
There was a guy in Washington who was famous for launching initiatives for anyone with the money, usually for conservative or business causes. He was pretty successful, until he got caught taking from the pot and was barred from the business. These kinds of "initiative entrepreneurs" are pretty common, I think.
I agree. I would like to read an in-depth review of Piketty's Capital in the 21st century. To me there wasn't anything leftist in it, other than the author's transparent worry about growing wealth-gaps. The rest seemed like a fine rational analysis of history and financial mechanisms.
Well, I was going to do "A World Appears" the new book on consciousness research by Michael Pollan. That will be easy. One of Piketty's doorstoppers is another level entirely. I agree someone needs to do it. The deadline's in May, I think.
In Oakland, SEIU 1021 is the largest union of city workers, and 25% of SEIU 1021 members have left the union and are trying to switch to a new union called Oakland Workers United. One of their greivances against SEIU is too much spending on Oakland political candidates, including giving $50,000 to Mayor Sheng Thao AFTER the FBI raided her home in a corruption investigation. SEIU delenda est. https://www.oaklandreport.org/p/20220223-oakland-seiu-decertification
> And there’s a clear path to the latter - as Silicon Valley tires of Trump’s random acts of economic devastation, some tech leaders are starting to regret their flirtation with right-wing populism and wonder whether the other side has a better offer
At the same time, the federal government under Trump is the only force powerful enough to remove socialists from California (and other states) and stop these "democratic" challenges to their power. It seems to me they have more to gain from putting in their lot with the right.
...Why couldn't they? What's physically stopping them? They've already threatened to take control of the state. The leadership can be replaced. Those who have the most to lose from leftist policy will welcome them with open arms.
How many would risk their necks to protect them? California is not a pure blue state. I'm sure many of the officers would love to be given an opportunity to beat in the heads of leftists who threatened their livelihood and prevented them from doing their jobs.
The same question is true for the federal officers, many of whom won't want to get shot for whatever nonsense justification Trump has for trashing the constitution.
Mate, you're the one who suggested that Newsom should betray his oath in order to push your preferred policies. Is it only nonsense if you disagree with them politically? People have their reasons for tearing down this unnatural order of the weak reigning over the strong, something you should be able to sympathize with. The only proof they need of their superiority is their victory.
#NotAllUnions, I've worked with/for some solid ones in the past, but...ugh, shit like this only exacerbates the rate at which whatever love I had for the labour movement withers and dies. Organizing to improve conditions at a private company, working against the short-sightedness of management to forge a stronger business in the long run, yeah, sure, you do you. Running a shakedown racket like some sort of two-bit Huey Long, intentionally becoming a Defect-playing stationary bandit when there's not much ruin left in a nation...yeah, I'll side with the people who already provide more than half the tax revenue (distributed to everyone via normal government processes!), largely by creating goods and services people actively like rather than are forced to purchase, thanks.
It's funny, before I got my current non-unionized job (so before Operation Right Kidney) I was on track to join SEIU as an IHSS worker. They always seemed like friendly folks, looking out for my wages, benefits, and working conditions! Shame it couldn't have been left at that; a union that doesn't get involved in politics seems mostly unobjectionable, but of course the Iron Law encourages these sorts of power-hungry expansion tactics. The temptation is simply too great, the D vulnerability simply too ripe a target not to exploit.
Prima facie this is trivially awful behaviour (in a hilarious kind of way), but I must say that the theme of the demanded concessions being "allow the union to expand into such-and-such hospital" makes it sound ever-so-slightly Robin Hoodish to my ears. Employers banning workers from joining whatever unions they like seems self-evidently villainous to me, so that playing dirty to thwart such restrictions becomes understandable even if not condonable. Am I missing something?
As someone who left California some two decades ago, and has no plans to return: I say let them. California's government is odious. This sort of thing might actually force the people keeping the lights on to finally vote with their feet. I understand this would impose massive hardships on the people of California, but let's be real here: leaving is an option for almost anyone who isn't incredibly poor (and California's leviathan government is part of what keeps poor people poor.) Nothing would make me happier than to watch Silicon Valley decamp to Texas or some other (tax-wise) fair-weather state. Perhaps Florida? The government of California does not deserve them.
The weather (the actual weather) is lovely; perhaps with a far more limited government, more people could enjoy that weather. California with libertarian government: there's an idea.
The problem is that Florida and Texas are both moving away from limited government. Both are full of resentful poors who hate the rich, just for different reasons.
I think California's initiative system works OK for social policies like affirmative action or bilingual education, but not for budgetary policies, like allocating $10 billion in 2008 to build High Speed Rail from Los Angeles to San Francisco. Anything with a substantial dollar number attached to it should be restricted to legislative action.
This doesn't solve the problem though. This merely makes scapegoating easier. Instead of 20 million (or whatever it is) stupid voters to blame, you have a small legislative body, and the guy who drafted the legislation is the favored scalp. Legislators are only too happy to spend other peoples money: it's not their money, and usually they do it in a way to gain goodwill (in the from of votes) from a bloc; yet somehow they never face the consequences of spending all that money on their pet project. There is no referendum on the money spent. You still wind up with barrels of pork. And some asshole with perfect teeth smiling for the cameras.
The problem, as always, is the spending. I would like to see legislation capping the maximum amount spendable on legislation. If it costs too much, too bad, time to work with the private sector.
The issue is that voters are pretty clueless about anything involving arithmetic, while state legislators, deplorable as they tend to be, have lobbyists that they listen to, and the lobbyists at least can do math.
For example, how many voters in 2008 recognized that voting $10 billion to build a High Speed Rail through the transverse ranges and into downtown San Francisco was never going to be the full amount, it was just a down payment on what would likely cost more in the range of $100 billion if it ever is finished?
Thank you for this glorious, feel-good story. I had never heard of Dave Regan before, but as of now I'm a huge fan.
Maybe California ought to get rid of ballot initiatives, or at least make them much harder. Because who knows what kind of bad actors will use bad initiatives to make the world a worse place. But in the meantime, it sounds like Dave Regan is kicking ass and taking names. I'll take it.
Think of it as buying a stable society without angry mobs of pitchforks. You can feel this is unfair or unjust or inefficient or illogical, but in fact history is full of examples of this happening. It also might be rational in a “maximize aggregate utility” sense — if a lot of people have very unhappy lives, then those who like the status quo have some incentive to do something about it, or the unhappy majority will upset the status quo.
This is either flat out ahistorical or at best, a tautology. History is full of one time levies and poll taxes. Only if you eccentrically define the next poll tax as the “same” tax, are you able to make the argument. And I think that's kind of abusing the language.
I'm reminded of another classic American canard, “temporary dictatorships are never temporary.” While it's not typical for dictatorial powers to be voluntarily relinquished, it's certainly not unknown. From modern times, Simon Bolivar provides one prominent example. While FDR and Lincoln died at the height of their powers, in both cases, their successors voluntarily gave up emergency powers that had accrued to the American presidency.
Yes it is time billionaires and their sycophant writers and think tanks accept the idea that people would rather see them part with some of their obscene wealth than see the US bankrupt.
This way you can have a less destructive and effective wealth tax, e.g. along the lines you suggest.
If not, it's going to be done very poorly. The rigidity trap is powerful though, historically, people will just not part with their money until they see the guillotine. Let's hope the current barons are smarter.
>If not, it's going to be done very poorly. The rigidity trap is powerful though, historically, people will just not part with their money until they see the guillotine. Let's hope the current barons are smarter.
What makes you think it will be done at all? Billionaires are already moving to Florida, outside of California's grasp. There's no reason to think some socialist revolution is on the horizon. The socialist movement has never been more alienated from the white working-class, and Hispanic working-class voters are more likely to like Republicans or moderate Democrats.
Replace "socialist" with "left-populist anti-billionaire" or whatever it is you call your movement and my point remains the same. "We can do this the easy way or the hard way" only works if you're a credible threat.
Cut spending. The rich already pay the majority of taxes. The U.S. has the most progressive federal income tax in the world. The only way to maintain current spending would be to massively tax the middle class as Europe does.
It’s flawed but if this is the only way we can tax billionaires I’d take it. 90% going to healthcare services for the public is really not that bad.
The initiative text is a little more specific: that 90% health bucket could be used for things like restoring federal or state cuts, protecting Medi-Cal and other coverage programs, supporting safety-net providers, preventing facility closures, and making payments to providers. The Legislature would still decide the actual appropriations within those limits.
Even if you support a wealth tax, this ballot measure is not the way to do it. The best way would be to acknowledge that tax system is actually fine and it's the inheritance system is a problem (just get rid of stepped up basis). But barring that, the most straightforward way would be to require that people with more than a billion dollars in equity must periodically realize some percentage of their portfolio, perhaps 10% every 5-10 years so as to avoid destroying new companies as soon as they are founded.
This measure is worded in such a way that founders will literally be taxed more than their entire net worth if they suffer unlucky timing (the company value crashes when they have to pay) or if they have a substantial number of controlling shares compared to overall equity. That's not a fringe worry, billion dollar unicorns crash frequently - Luminar, Novavax, Pelton, Nikola all crashed more than 97% in a one year span. As it turns out, stocks do not always go up. Holding a stock is a high risk, high reward bet on the future value of a company. It can backfire very easily. And as far as controlling shares go, investors accept those terms for a reason - they trust the founder to consider the long term health of the company more than they trust other investors. Not every company has to be set up like this, but there is no good reason to effectively ban this arrangement through extremely punitive taxes.
Basically, if this ballot measure passes, Silicon Valley will cease to exist. The current successful founders will stay on top and there will be a severe slowdown in the number of innovative new companies.
Your proposals are no doubt better but I have no faith in them happening and will take a nasty stick at this point. Perhaps it can be seen as a consequence of rigging the system more and more in favor of the ultra wealthy.
Am I really supposed to care about it being unfair to billionaires or Silicon Valley ceasing to exist at this point?
In what way has the system been rigged in favor of the ultra wealthy? You should care about fairness to billionaires and Silicon Valley ceasing to exist because those are the engines of growth in our economy that improve global living standards. Monopoly has not happened. This proposal is a huge net negative. What advantage would it have at all?
Look at any statistics about wealth accumulation. I find it really hard to take you seriously. Complete lack of awareness of obvious counterpoints to most of what you’re said. Lazy rhetorical debater.
I still tend to the position that extreme wealth disparity is problematic and has a tendency to feedbackloop into evermore extremes (because wealth often accumulates more wealth), to destabilize democracies and to lead to something like the Epstein class and to vastly differing starting positions, which undermines the foundations of liberalism, and that something like Ingrid Robeyns economic limitarianism (https://en.wikipedia.org/wiki/Limitarianism_(ethical) and https://en.wikipedia.org/wiki/Ingrid_Robeyns) ) probably would be an utilitarian net benefit.(Especially if it could be coordinated globally.)
But what would be the case for inequality here? Is it thought to be more productive?
> But what would be the case for inequality here? Is it thought to be more productive?
Let's see:
1. Basically all technological and economic progress is driven by the <10% of humanity
2. This is good for everyone - it grows the pie, improves quality of life, and creates jobs, goods, and services that didn't exist before, and businesses in general are a manifestation of said technological and economic progress
3. Billionaires, ~75% of whom are self-made in America, solved some problem so well for so many people that they created a company so huge and which provides SO much value that they incidentally became billionaires.
4. For every billionaire, there's a company that drove more than 1000x that amount of value to people in the world, in products and services, in jobs, in economic growth, and more
5. Punishing people for solving problems so well for so many people and dragging everyone upwards by some huge amount seems like an a priori bad idea.
Whatever you punish, you get less of - we really want fewer globe-spanning companies lifting our economy up, providing hundreds of thousands or millions of jobs, and solving problems that billions of people are happy to pay to have solved by them?
I look at members of Epstein's friend group and for the most part I see people who worked hard and contributed to society. Not all of them, Trump is contemptible, but most are good people. It would be bad if I learned that people I admired were actually pedophiles, which I'll keep in mind in case anyone presents actual evidence of that being true.
> But what would be the case for inequality here? Is it thought to be more productive?
A person with a lot of wealth is probably going to be better at maintaining it than a person with no wealth. There's good reasons to think this: many wealthy people have histories of turning non-wealth into wealth, and even those who inherited their wealth usually also inherited genes from those who became wealthy through work.
If the problem with ballot initiatives is low-information voters, why not ensure that all voters are high-information voters? I’m always surprised by the things that politicians and others assume are immutable. Isn’t the lesson to be drawn from recent (last 100 years say) history show us that such assumptions are misplaced?
>Gavin Newsom cares about the tech industry. And SEIU cares about Gavin Newsom. Governor Newsom has been eyeing the Democratic presidential nomination in 2028. He needs a reputation as a Sensible Moderate and plenty of billionaire donors. And there’s a clear path to the latter - as Silicon Valley tires of Trump’s random acts of economic devastation, some tech leaders are starting to regret their flirtation with right-wing populism and wonder whether the other side has a better offer. If everything goes exactly right, he can make it work. Instead, there’s this wealth tax, coming at the worst possible time. Newsom really, really wants it to go away.
It seems like this could be at least partially patched by removing the ability to withdraw ballot initiatives - "once the signatures have been gathered, it's the will of the people that it be on the ballot".
This would prevent the extortionate offers to withdraw the ballot propositions, and thus reduce the incentives on SEIU, although there would still be the incentive from "if you don't cave, we will keep doing this over and over".
Another potential fix is to treat "do X or we will put forward a ballot initiative" as criminal extortion, although there are issues with that (in particular, "do X or we will put forward a ballot initiative to do X over your head" seems legit; it's "do X or we will put forward a ballot initiative to do Y" that's the issue here).
There is another similar type of extortion in San Francisco called Community Benefits Agreement.
When my tech company was going to open a new office in a building that was vacant for decades, some Hispanic community groups said they would delay it for years with lawsuits and red tape unless we paid up, and they did agree to pay millions of dollars.
Incredible. I'm now convinced we will have to fight a war without end against the unions. It will not be enough to cripple them but they must be destroyed such that there's no chance of them forming again.
And what's to stop the NLRA from being enacted again? The only way to permanently rid the country of unions is to stop labor from organizing in any capacity.
Odd question. What stops any bad law from being enacted? If you're in a position to repeal the NLRA on the basis of learned lessons, you're also in a position to pass a better law.
Ridding the country of unions shouldn't be the goal. For one thing, the USA tried that before - it was very bloody and it *did not work*. And the unions can and sometimes do serve an actual purpose in advocating for workers.
I am not really understanding the hostility to the union that this provokes.
I'm assuming that everything you've determined about the actions of SEIU are in fact correct. And I'll even stipulate (though I don't believe it at all) that losing the billionaires would be a terrible blow to California.
I still don't see that SEIU's conduct is much more blameworthy than, for example, Amazon's, or some hedge fund, or any other beast in the legal person bestiary. Yes, the union is playing a dirty political game in order to advance its own ends... that's what it's supposed to do.
I feel like billionaires achieved their billionaire status by playing some pretty dirty political games as well. At the very least, a union by its nature exists to help a group of people, and not just one.
Of course, plenty of people have written books excoriating Bezos et al. for all they've done wrong. An odd blog post excoriating this union is hardly the end of the world. I think it's just... perhaps it's this: everyone seems to accept that billionaires will play a crooked game to advance their personal wealth. We shrug and say, cost of capitalism. It's a problem, but one we have to live with (and contain through the power of democracy and rule of law). But when a union plays a crooked game on behalf of working people, that's unexpected, and beyond the pale, and must be destroyed.
I suggest that the machinations of unions are just as much a product of the capitalist system - with which you seem to agree in the post - and therefore should be met with just the same shrug. Perhaps you are, and I'm misreading the tone. This post doesn't feel very shruggy.
Ultimately, I hope Newsome is a good enough politician to defeat this political threat, and go on to hurt the Republican Party so badly that they reform into a functioning organisation rather than a funnel for nutbags. If Newsome isn't good enough to see off the threat from a local union, perhaps he's not man enough for the bigger job.
> I still don't see that SEIU's conduct is much more blameworthy than, for example, Amazon's, or some hedge fund, or any other beast in the legal person bestiary.
Those people are growing the economy. SEIU is not. This is what this all boils down to. If those people were engaging in anti-competitive practices, they would be just as blameworthy. But they aren't. As long as the pie grows, why would it matter how many people get burned?
"I still don't see that SEIU's conduct is much more blameworthy than, for example, Amazon's, or some hedge fund, or any other beast in the legal person bestiary."
And?
One could easily frame it as those others are as blameworthy -- if true -- and bust them all.
Yes, that's fair. But no one is busting billionaires - they're getting richer and distorting the politics of developed countries. Whereas union busting is an actual ongoing problem.
Moreover, I think unions are very good for the economy. Unlike Jimmy above, who thinks that billionaires "grow the economy", I note that there have always been billionaires (massive landowners); but the world economy really took off in the 20th century when unions briefly had an important place in it. So I actually think it would be much better to bust the billionaires than to bust the unions.
Questions of whether their existence are good are not relevant to whether their practicing blackmail is good.
Also, conflating landowners with modern-day billionaires is silly, because we can all see that the world economy took off only when owning land ceased to be the major portion of their property.
Legal persons can't be good or bad. Morality is for humans. I don't think we should blame companies for being rapacious - we should simply legislate to prevent that rapacity from damaging too many people. Similarly, a union should not be blamed for playing the legal and political game. If the union's actions appear to be destructive, then those actions should be prevented by changing the rules of the game. But a union is just a piece of paper. Assigning moral qualities to it is the mistake that I'm pointing out (I'm not sure if Scott makes this mistake).
Landowners vs billionaires
This is a more interesting historical point. But I think it misses the causal chain of events. I agree that the world economy took off when new forms of wealth were invented. But I think that happened precisely because of increasing participation, the extension of political rights, and the general enrichment of the population, which meant that rich people stopped doing business and culture purely within a tiny circle of their inbred friends.
"I agree that the world economy took off when new forms of wealth were invented. But I think that happened precisely because of increasing participation, the extension of political rights, and the general enrichment of the population,"
History is big and complex, and there's no one thing that "came first".
For example, in Britain we learn about the agricultural revolution and industrial revolution as a pair of linked events. The agricultural revolution brought a wave of urbanisation, and created new forms of civil society. This was also the Enlightenment, when... all sorts of things were happening.
As I say, I could be wrong about this. But what you're saying sounds a bit too simple and absolutist, and I can't see that it makes a strong argument against what I was suggesting.
I'm glad I'm not in the position of contemplating spending a hundred million dollars for the fourth time vs. wondering how much gasoline and matches I could buy with that money.
Why don't we tax when the billionaires take out the loans against the collateral? Treat it as a gain, and then when they pay it back, they get a tax credit. That way revenue is happening now instead of much later (or not at all if they evade the taxes upon death.)
Because that would be taxing them twice on the same income. Once when they take out the loan, and again when they earn the money to pay back the loan. Which is a thing even billionaires have to do.
And because if we're even pretending that we're being fair and not going all in on class warfare, we'd have to do the same thing when a family e.g. takes out a home equity loan to pay for remodeling or for their kid's college education or to start a business or whatever.
Is it really taxing twice? Those same assets get sold later instead of sooner, but it's still the same amount of taxes in the end (as long as the step-up doesn't happen at death in your scenario). The loan gets paid back and the taxes are essentially returned, replaced by the sold assets' taxes.
It IS a tax dodge to take out a loan instead of selling something. As a landlord with two rental properties, I have low-cost loans that give me untaxed capital that I can use for whatever, while deferring taxes on the paper gains in perpetuity (as long as I don't try to realize those gains by selling the property outside of a 1031 exchange.) This seems unfair.
A similar issue involved American Medical Response (AMR) getting a ballot measure passed to avoid hundreds of millions of dollars in back-pay.
California has a labor law I happen to disagree with which requires that employees working so long of a shift to get a half-hour meal break. AMR took the view that as long as they could find a 30 minute period in an ambulance shift where someone didn't have any work assigned they'd complied.
The government disagreed, arguing that the meal break needed to be forward-looking. That is, you needed to know that you would have half an hour in which you could heat up your lunch and eat it in peace. This meant over a hundred million dollars in costs for AMR.
So they put a ballot measure up claiming that your grandma having a heart attack would be left to die so that paramedics could sit on their ass and eat lunch. Which has never happened. (and for complex reasons never would happen) And, if California has stupid laws, paramedics should get to benefit from them as well.
But the measure passed. Because there's a suicide epidemic among first responders and everybody things that they get paid too little for the work they do. But heaven forbid they have an opportunity to eat a health lunch (instead of just being lectured about how healthy habits are important but never get an opportunity to actually eat healthy food).
One on hand, was disgusted to read this and go over to the breakroom to discover my hospital's employee union is SEIU. On the other hand, for some reason us pharmacists, and only pharmacists, are non-union here, like even our pharmacy technicians are union.
Why dont policy wonks with all our brilliant ideas try to pull to the same trick? Where's the "save the environment" proposal which is a thinly veiled "ban all zoning and allow California forver to exist" amendment?
"Nobelesse oblige" really only works with patents of nobility, or some similar level of broadly-accepted societal respect and privilege that the obliged can count on. That's the quid pro quo. You can't expect it to continue while you are actively trying to tear down the respect and privilege of the wealthy and also strip them of their wealth.
And I'm not convinced that it's the billionaires of silicon valley who defected first.
“Some people have mystical experiences and see God. There in Las Vegas, I _saw_ Moloch.”
If you haven't read "Medications on Moloch," you should https://slatestarcodex.com/2014/07/30/meditations-on-moloch/.
You're talking to a robot, unfortunately.
oh man, you may wanna check your prions
Las Vegas has been made a lot more expensive in a bid for getting high rollers and no one else. I have no idea whether that's Moloch.
Huh. How does that work, and what's the reasoning? I'd expect the marginal sucker to still be profitable, and there's only so many high rollers. I'd expect a policy goal like that to end as a nearly-zero-sum game between the casinos themselves. Which I wouldn't expect them to want.
Or is the idea that the *city* doesn't want less-than-wealthy gambling tourism, and is willing to mess with the casinos over it?
They've raised prices for everything. They shut down major roads for car races with expensive seating for days which not only means difficulty for local traffic but which also blocks off the Bellagio fountain.
I haven't seen anything solid about whose idea this was or the details of their thinking. People in business aren't immune to fads.
Democracy isn't a modern system, and Plato wrote about its failure modes over 2000 years ago.
We're not a "democracy" in the way Plato was using the term.
In Aristotle's refinement of Greek political philosophy our system is a polity. It is meant to have the best features of rule by the one, few and many, with checks and balances in place to prevent the bad results of those systems of government (tyranny, corrupt oligarchy, and mobocracy.) There's certainly a fair argument it failed to accomplish those tasks, but it is definitely not a "democracy" as either Aristotle or Plato would use those terms.
I would call it an aristocracy. That is because international agreements and constitutional limits effectively result in rule by judges and lawyers.
This is an LLM spambot.
I've wondered what the point of these is. Who benefits from a bot like this writing comments here?
Nope, LLM writing that is unsteered is currently low quality, and the vibe given off by LLM writing is a good indicator that the interpretive labour to understand and dissect the text is not worth it.
People use them to promote their substacks. They have an agent browse dozens/hundreds of random substacks, post a worthless empty-calorie comment like the above ("Fascinating perspective, $BLOG_AUTHOR! It's a sobering reminder of how $PARAPHRASE_OF_AUTHORS_POINT. What are your thoughts on $ENGAGEMENT_BAITING_QUESTION?") and hope a few people click on them.
Sadly these spambots are often barely distinguishable from regular commenters and go undetected. Maybe there's a lesson for humans there.
Why doesn’t Switzerland seem to suffer this problem despite a much more extensive implementation of direct democracy?
I got curious, looks like the number of Swiss readers of this blog, per capita, is around 1/2 the USA:
https://docs.google.com/forms/d/e/1FAIpQLSdTw4xhkP5Awgn0xhL4ScjvZp8ieaojGrnSPgDTM-lSH8m--g/viewanalytics
Specifically about 10 out of every million Americans read SSC, and about 4 out of every million Swiss.
According to a chat with an AI, where I laboriously copied some numbers in, these are some top countries for SSC readership, along with a few reference countries like Russia and India. Columns are: country name, total # readers in 2024 survey, approximate readers-per-million.
New Zealand 77 ~14.8
United States 3420 ~10.2
Israel 89 ~8.9
Australia 213 ~8.2
Ireland 42 ~8.2
Finland 43 ~7.7
Canada 302 ~7.6
United Kingdom 480 ~7.2
Norway 34 ~6.2
Denmark 32 ~5.3
Switzerland 38 ~4.3
Sweden 45 ~4.3
Germany 353 ~4.2
Czechia 36 ~3.3
Netherlands 59 ~3.3
Austria 22 ~2.4
Singapore 13 ~2.2
Poland 57 ~1.5
France 96 ~1.4
Spain 46 ~1.0
Italy 32 ~0.5
Russia 68 ~0.5
Brazil 44 ~0.2
India 40 ~0.03
It has smarter voters.
This is pretty much the answer.
In slightly more words, they have a somewhat better understanding of economics, they're more solidaric, they're less polarised and tribal, and (still) less prone to fall for populist promises and easy solutions. There are absolutely cases where the population of a canton or of the whole country voted in a referendum against paying lower taxes, or against such eat-the-rich idiocy.
These are all "in average" and "still" etc., and not the same everywhere. (Some of the cities and much of the French-speaking part are less rational. Somewhat. In average.)
Maybe the commenter above just meant
Swiss IQ > California IQ
which is also true and relevant.
By how much?
At least 5 points.
Source: thin air?
I had thought about addressing this. If there is an IQ difference, I don't think it's large enough to be relevant, and less so in comparison to the other aspects.
In an individual, I would not expect 5 points to make a difference. An average IQ difference over the entire population might explain *why* some of those aspects are different. The smartest person still has to coordinate with others to actualize their intelligence in the world, and they can't build better community infrastructure on their own. On the other hand, it makes sense that, even absent any special coordination, a smarter population of people working together might nail building in those "other aspects" from the start.
First of all, I agree. But processing speed and such abilities don't necessarily protect from ideology bullshit, they just make it easier to rationalise it, or you wouldn't have so many Ashkenazi believers in [insert something that is flabbergastingly foolish to you]. Personally, I can't believe they're falling for that. No, I think it's the culture/mentality/social tradition.
I concede it's not easy to quantify factors that mutually influence each other, though. And a (very superficial) 'net search I had done didn't even give comparable average IQ numbers: Switzerland is typically given at 100-101, and California at 95-97, but it seems this is suffering even more than usual from the distortion that the CA scores are indirect, from scores that involve knowledge and education. I have some general problems about the asserted correlation, but in this context, we'd have an interest to keep IQ as separate as possible from education. Another issue is who counts: not everybody can vote (in Switzerland, typically only citizens, and only in some cities non-citizens with a long-term residence permit), which may exclude lower-IQ groups as well as higher-IQ groups. And I'm not sure about how many naturalised immigrants of either the furner or the expat type tend to vote. That seems similar to California (basically US citizens resident in CA), but the demographic and voting dynamics might differ, eg, MIT graduates born anywhere in the US may settle SF and vote, while Brits and EU citizens coming from the Sorbonne, Munich or Oxford or in fact ETH Zurich can't vote in Switzerland.
Based on Garret Jones' model from his book on IQ, 5 points of national IQ lead to 30% higher GDP per capita.
Switzerland has had strong traditions of serious self-rule going back to 1291. I recently reread the old Time-Life book on Switzerland from about 1964. It emphasizes that responsibly participating in public policy debate is central to a Swissman's self-conception of manhood.
At that point women were not allowed to vote. (The Time-Life book says, more or less, that that's only fair because inside the Swiss home is an absolute matriarchy, which is pretty funny from a post-1969 perspective.)
Los Angeles, in contrast, was in the 20th Century the world capital of making up activities that are more fun than talking about public policy, like movies and skateboarding.
I noticed this while moving back and forth between L.A. and Chicago. Local news broadcasts in Chicago pay close attention to what Alderman X said to Alderman Y, whereas L.A. local news treats local politics as boring and prefer to cut to some wacky thing somebody is doing in their backyard.
Has anyone checked for correlations between IQ and voting?
In general? Many. The problem is that it's not simply linear, say higher IQ = capitalism with protection of the weak and cultural liberalism. Depending on other factors, better hardware can make people come up with cleverer ways to rationalise their nonsense.
I think it's more culture than IQ. The places that vote most strongly against this will be rural white areas in California with not that impressive IQs, but which have a cultural norm against freeloading.
According to this website I found (https://worldpopulationreview.com/country-rankings/average-iq-by-country), Switzerland average is 100.84 and US average is 101.04. However, looking at the state level (https://worldpopulationreview.com/state-rankings/average-iq-by-state), California is the 3rd lowest at 95.5.
(I'm actually surprised California is so low, I thought it would've been somewhere in the top half!)
While I have issues with the way Europeans tax everybody so much, one thing it does do is make everyone involved in the process of good government. When a misuse of funds means *your* taxes have to go up to fix the problem, you care about the structures involved.
Meanwhile in the US, most of the tax debates are "here's how we make sure SOMEONE ELSE pays" and once it's someone bad paying the taxes, efficiency moves from needed to irrelevant to actively discouraged.
Switzerland doesn't tax so much.
95.5 Includes a lot of non citizens and They can't vote.
and they have less wealth inequality. I think it’s being somewhat elided throughout this discussion that the inequality *itself* is the problem. Taxes on the 1% pay for a lot of stuff! and that’s good! But massive disparities are toxic to civic virtue and the functioning of a republic
They're also very good for creating value. You can't have both equality and productivity, as others have found out the hard way.
I'm interested in an explanation of how? It seems unclear and dubious to me that inequality is needed/useful to produce value. (Not defending Communist countries here, I'm genuinely wondering what's the argument.)
Value is generated through the creation of more from less. More value needs to be generated from the product than the cost of production. This includes labor. Some people provide significantly more value than others. Paying people more than the value of the labor they provide would defeat the point of paying them to work. You can pay them less than their value, of course. That creates more value with less expenditure. On the other hand, the owners need to accumulate capital for the sake of generating further value. As long as they are taxed at all, the value they generate through these investments contributes to the wealth and power of the country as a whole, regardless of how much the workers are being exploited.
There is a fundamental issue here in how you define equality that I think explains the pattern. People compete over status, not money. Beyond basic needs, money is only really desired to the degree that it buys status. So in a communist country there is very little incentive to start a business because if you are too successful, the profits will just be taken from you before you accumulate enough wealth to buy high status.
But while the communist country is equal in wealth, it is extremely unequal in power, and power in the form of official government positions buys you a ton of status. And in communist countries you see intense competition for this, often with deadly consequences for the losers.
The difference is that competing for money in the free market has massive positive externalities, while competition for government office does not. When Jeff Bezos builds Amazon, I get next day delivery of anything I want to my door. When Elon Musk launches Starlink and pushes Viasat out of business I get a massively upgraded internet connection. But when some commissar pushes out another, I get nothing. It's just new boss same as the old boss.
It is pretty much the other way round. If you produce something that a lot of people value and are willing to buy, you will likely make a lot of money in a large rich country like the USA.
why should I bust my ass to be productive if i'll end up with the same material wealth as someone who watches TV all day? Inequality is an essential incentive.
Very much agree with the direction you're going here, but would change "wealth inequality" to "unaffordable cost of living."
If you can't afford housing and healthcare, of course the rich are going to look like they're hoarding wealth. In reality, the cost of living crisis has very little to do with the fact that some people are billionaires. The real causes are much more boring, like NIMBY laws and market-destroying healthcare regulations.
Switzerland is not known for affordability.
From what I can tell, there's also far more local power, at the canton level. California is quite centralized by comparison.
So there are many more alternatives, and stupid things don't affect as many people.
And the canton has much less leeway to spend money on stupid things before they're obviously stupid and run out of money.
[edit]It also helps that there are a lot fewer Swiss. Their population is less than a quarter of California's.
Lol they are polarised and tribal, but their tribe is the canton and direct democracy happens on the canton level. It's not some ideal example of multiculturalism, but rather of natural segregation by mountains. Don't try to speak French in a Wintherthur bar, you will be called a welsch (slur for French-speakers, interestingly same etymological roots as Wales).
Or it had smarter voters. A recent proposal is to cap the population at 10 million people, in a country where the overwhelming majority of immigrants are other Europeans.
https://www.dw.com/en/switzerland-swiss-population-cap-limit-referendum/a-75941387
A population cap for an area with limited resources (which is all of them) would actually be the smartest policy I have ever heard of a democratic government adopting.
This is a fully general argument for the population increasing at any point in history.
At most that proposal just suggests that 100,000 voters were keen enough on the idea to sign it and for it to be put to ballot. That is 1.1% of the population. Hardly representative?
It's polling at 50-50. The smart money says it will lose as mainstream parties campaign against it, but still.
And? Switzerland is wealthy, but a large part of the appeal of living there seems to not just being in a rich society, but to live in a nice place. A large population is a direct threat to that niceness, especially in a mountainous terrain, where enlarging infrastructures is often difficult or impossible.
My guess is it’s a small country with a strong cultural emphasis on being informed about initiatives.
Switzerland is kind of a weird case in general though. Yglesias has a whole post about how the Swiss government and economy shouldn’t work as well as they do, and that it seems like there’s something distinctive about Swiss culture that makes it work as well as it does.
https://www.slowboring.com/p/why-does-switzerland-work-so-well?utm_campaign=posts-open-in-app&triedRedirect=true&_src_ref=google.com
Maybe we should look at whether there are incentives to obfuscate initiatives or not.
The ability of the government to do counter-proposals, and the inability of proposals that have gathered enough signatures to just be withdrawn unless a counter-proposal got over 50% of the vote.
Say more?
How do you know that they don't? The most recent Swiss federal initiative on the ballot seems to be one which 'requires that economic activities do not consume more resources and release more pollutants than is permitted for the preservation of natural resources." https://www.admin.ch/gov/en/start/documentation/votes/20250209/environmental-responsibility-initiative.html
This is not the most recent Swiss federal initiative. It's a year old, ancient news by now! And it was rejected in a landslide. Almost all initiatives are rejected, this is pretty much working as intended (a check on elected officials which is rarely needed), see https://www.250bpm.com/p/swiss-political-system-more-than for a good overview.
Oh, it was the most recent listed on Wikipedia.
>And it was rejected in a landslide
Great, but we are talking about a CA initiative that has merely made it on the ballot. Lots of CA initiatives lose by landslides!
https://en.wikipedia.org/wiki/2022_California_Proposition_26
https://en.wikipedia.org/wiki/2022_California_Proposition_27
https://en.wikipedia.org/wiki/2022_California_Proposition_29
Right, I think the question is how come you need to pay bribes to make people withdraw their stupid initiative, as opposed to just trusting the voters to reject it without spending a fortune. To the best of my knowledge the former is unheard of in Switzerland, and with the one you bring the NO side spent just half a million (scaled by GDP it would be 2 million in CA).
I don't know that framing it as a bribe is particularly edifying.
A bribe is not generally formalized by a written contract between briber and bribee. What Scott described is a bribe.
I would also be interested in the answer to that question. Might it be feasible to just ask some of the people involved in this decision why they did not? That may get you part of the way there. If getting these answers is of serious interest to people, perhaps there is someone in the SSC network we could tap who can do a proper interview and write it up. It will answer what the perceptions of the voting situation is such that the voters aren't trusted, though not why the situation is (or is perceived) that way. Switzerland is an interesting angle for analyzing how the situation could potentially be different, but probably has *too* many structural and cultural variables different to make strong claims about what needs to change.
A few things:
Institutional design is often the most favourable explanation, as opposed to theorizing on intelligence, in my opinion.
TLDR: it's likely the form the referenda elections take place. Switzerland has specific elections, combined with a high turnout, but in California these initiatives are just another set of boxes to choose between during a general election (which often have tens of positions up for vote at once).
The hurdle signatures for putting a Swiss popular initiative (constitutional reform) ahead is far lower. It is just 100,000 within an 18 month period as on Wikipedia (cannot get access to the reference, but quoted below (Ref A)). It is then put out to vote through a popular election and Cantonal vote (the vote goes to "Yes" for the Canton if it has a popular majority in the Canton). A double majority is required, and the vote must get at least a 40% turnout in the popular vote for a "Yes" vote to hold.
Result: fringe political projects are more likely to be put to vote (100k threshold), but less likely to pass; if insufficient numbers are interested in the initiative, the 40% isn't met and the vote is thrown out. Smaller, perhaps more rural, conservative cantonal voters' votes are over weighted through the Canton majority requirement. Regional cleavaging reduces the ability of concentrated political interests in say Zurich crowding out all other voices in the room and passing an initiative.
Contrast to California:
In California at least 5% of the number of people who voted in the most recent governor election - a minimum of roughly 550k based on the '22 election (ref B) - are required for an initiative to be put to the popular vote. Compared to Switzerland, such referenda are less likely to be held (per capita, more voters are required to get the ball rolling).
This isn't necessarily an obstacle:
Let's quickly think about how the two manage representation as well. California's electoral systems from what I can tell are majoritarian. Minority issues receive relatively limited representation as a result. Ballot initiatives are where minority groups go for this representation.
Switzerland has a PR voting system. The largest party has only 27% of the seats, and accordingly minority opinions are more accorded for, so don't need to use these initiatives for their opinion.
Nor are said Swiss minorities they likely to get what they want:
The hurdle in Switzerland is far higher than in California; at least 40% of the nation needs to care enough for success (granted, a number historically met - ref C), even if you need fewer signatures than California, but in California, to have a chance at success only 5% need to sign the initiative; at the election, it doesn't matter how many turn up.
That being said, turnouts are historically high in California as well (50+%), though crucially, the quality differs, this turnout often just being another scribble on a ballot most were going to fill out anyway given these referenda are mostly held during primary/ general elections.
The cost to turn out has already been paid, making the threat of a legitimate (high turnout) outcome, driven by low-information voters who have just heard of an initiative ticking a box, far higher than Switzerland. Specific referenda elections are held in Switzerland, ensuring that voters who turn out are at least the slight bit informed on the issue, even if not massively more so.
I think this last point is crucial to explaining the difference.
Ref A: Cormon, Pierre (2015), Swiss Politics for Complete Beginners (2 ed.), Geneva, Switzerland: Slatkine, ISBN 978-2-8321-0607-5
Ref B: https://elections.cdn.sos.ca.gov/ballot-measures/pdf/statewide-initiative-guide.pdf
Ref C: https://www.bfs.admin.ch/bfs/fr/home/statistiken/politik/abstimmungen.html
OK so just to clarify, if 40% turn out to vote yes, and the remaining 60% don't care enough to turn out, then the initiative goes through? I would think a problem with the dedicated-referenda system is that it selects for highly passionate people who are not thinking as clearly about the issue.
Per the Wikipedia article on the subject, it seems like Swiss initiatives have much longer delays built into the system. Since the opinion of the federal council and Parliamentary deliberation are mandatory, it can take years from the initiative's initiation (and signature collection) until it appears on a ballot.
An initiative like the one discussed here might also run afoul of unity-of-purpose rules, if the relevant authorities consider the hospital-spending provisions to be too remotely linked to the wealth tax.
>An initiative like the one discussed here might also run afoul of unity-of-purpose rules
California also has a similar requirement. https://law.justia.com/cases/california/supreme-court/4th/21/1142.html
It might be a jurisdictional difference, then, whether "tax one thing to spend on another" is a single issue or two separate issues. If this initiative were so easily defeated under a single-issue requirement, I imagine it would have been already.
We of course have no idea how the interpretation of the rule differs between CA and Switzerland.
>"tax one thing to spend on another"
This really isn't that, though. It isn't "tax cars to spend on forests." It is tax a particular group of people. That is no where close to two topics. It is simply "raise revenue to pay for X." See, eg, https://scholar.google.com/scholar_case?case=14427321562405618482&hl=en&as_sdt=6,33
There was a recent Swiss estate tax ballot initiative. It failed but caused a minor panic and some consideration of flight by high net worth individuals.
The Netherlands has had a wealth tax for quite a while now. And as of now it still taxes fictitious gains.
This has not caused its economy to blow up or a mass exodus of high net worth individuals.
Then again the Netherlands isn't much of a personal tax haven(it's more of a corporate tax haven) like Switzerland is so it has fewer HNWIs to lose, having a similar rate to France or the UK.
The Netherlands puts a tax on legible savings, investments, and non-primary-residence homes.
It's kind of a worst-case take on a wealth tax, because you only have about 50K of wealth saved before you have to pay it, so it hits a lot of middle-income people, while very rich people can make their wealth illegible.
But they're moving away from it, because it's been ruled unconstitutional! The Dutch Supreme Court ruled it violated the European Convention on Human Rights!
https://news.bloombergtax.com/tax-insights-and-commentary/week-in-insights-dutch-unrealized-gains-tax-is-a-surprise-reform
Now they're trying to switch to taxing unrealized capital gains but that doesn't start until 2028 so we haven't seen yet what it's going to do. A bunch of people are claiming it will cause a massive exodus, and I don't know if they're right, but it will take until 2028 to happen so I'm not putting down any markers yet.
The current system also kinda, sorta taxes unrealised gains. It just taxes them assuming that everyone gets the same return on investment regardless of what the actual return is. The change for 2028 is... actually looking at the return so you're not taxing people on money they haven't actually made.
They don't have uncapped campaign funding, and every initiative undergoes a governmental review. In other words, SEIU wouldn't have been allowed to run ads in favor of their initiative, and the mail-in ballot would have come with a "VOTE AGAINST: this is an obvious cash grab, here's why" brochure.
"They don't have uncapped campaign funding"
I wasn't able to find a source that supports this claim, can you please provide one?
"every initiative undergoes a governmental review"
Interesting to learn that "managed direct democracy" is a thing.
> I wasn't able to find a source that supports this claim, can you please provide one?
I checked again and realized I was wrong, thank you for challenging me. There's no cap on funding, but you have to disclose the identities of major donors (> 15k CHF). The total volume looks low enough compared to a hundred million spent in California, though: https://www.efk.admin.ch/en/transparency-in-political-funding-budgeted-receipts-for-popular-votes-of-8-march-2026-are-now-available/
The cultural differences are part of the answer, but I think a big part is also that Swiss voters are better informed. That's not the same as being smarter.
As a Swiss voter, together with my voting ballot I get a leaflet with information. For each proposition, apart from basic facts (what are we voting about) it also contains a Pro and a Contra statement. In the Pro statement the proponents give a steelman version of why the proposal is good. In the Contra statement the opponents give a steelman version of why the proposal is bad. On top of that, you get the recommendation of the government, of the parliament (with the number of Yes/No votes in the parliament), and of each political party.
This means that high-quality two-sided information is just very very easily available. Of course, some voters still ignore it, but even for people who only consume social media otherwise, they literally just have to open a leaflet.
There are propositions which are truly contested. In some cases, it's genuinely hard to predict what the ramifications of a proposition are going to be, and parties and people are split over the question. But then there are other propositions where it's jut blatantly obvious what the right answer is. If I see in the leaflet that the government, the parliament and all political parties from left to right suggest no, then that's what I vote. There are many propositions where one side gets a 60-70% majority, on cantonal or communal level it's even often 80-90%.
California voters get the same leaflet, though I couldn’t say how many read it.
Is it out yet? If yes, is there perhaps an online version? I would be interested to know what it contains on that issue. Are there any parties that recommend to accept the proposition? Was there a vote in the parliament about the issue, or other cues what people think about it?
It's not out yet. The Voter Information Guide is available online (once it exists); you can see past ones at https://www.sos.ca.gov/elections/voting-resources/voter-information-guides .
The page currently says that the guide for the June 2 election will be available in April, so I wouldn't expect the guide for the November election before September.
> The cultural differences are part of the answer, but I think a big part is also that Swiss voters are better informed. That's not the same as being smarter.
> As a Swiss voter, together with my voting ballot I get a leaflet with information. For each proposition, apart from basic facts (what are we voting about) it also contains a Pro and a Contra statement. In the Pro statement the proponents give a steelman version of why the proposal is good. In the Contra statement the opponents give a steelman version of why the proposal is bad.
That can't be any part of the explanation for why SEIU can threaten California but an analogous group can't threaten Switzerland, because you haven't yet managed to describe a difference between Switzerland and California.
"For each proposition, apart from basic facts (what are we voting about) it also contains a Pro and a Contra statement. In the Pro statement the proponents give a steelman version of why the proposal is good. In the Contra statement the opponents give a steelman version of why the proposal is bad."
As a former California voter, I am fairly sure California ballots also have this stuff. I don't believe there is a formal endorsement section, but I seem to recall the pro/con arguments mentioning individuals or groups who fell on their particular side of the issue.
Switzerland is much smaller. Probably helps make politics feel more visceral and less performative, maybe?
Switzerland also has a strong cultural norm of "concordance" - that all parties try and work together in the end. That means they don't have a coalition/opposition or a two-party system like the UK or US.
It's also complicated a bit by some cantons electing their representatives with different systems to others - see https://econfip.org/policy-briefs/majoritarian-versus-proportional-representation-voting/ .
What would happen if a politician attempted to break this norm?
That actually happened around the millennium with one Christoph Blocher of the Swiss People's Party, he threatened to "take his party into opposition" and everyone else came together and called his bluff.
If you imagine that bad actors such as Dave Regan of SEIU strike with uniform probability across the human species, California will be expected to have about 4x as many political bad actors as Switzerland, due to 4x the population.
I suspect this matters a lot, since individual bad actors, if they find a niche, can have disproportionate impact (e.g. by crowding out good actors or destroying valuable norms).
I furthermore suspect that there are compounding/nonlinear effects through adding more bad actors, e.g. if they form nepotism networks or feed off of each other in political polarization.
Another way of making this argument is that high-population democracies are more vulnerable to Goodhart issues, since greater population means more searches for ways to game the democratic objective function.
This theory predicts that the most populous democracies (read: the ones with the greatest geopolitical clout) will also tend to have the crappiest leadership. And the more we do to "empower the people" and "democratize political participation" through e.g. social media, the worse the problem gets. What a cursed planet.
It does, in a way. Every few years they vote on a referendum to cut some point or other that they agreed in bilateral talks with the EU, which would probably invalidate the entire trade agreements, lead to tariffs, and be very bad for the economy.
Switzerland has a wealth tax: https://taxsummaries.pwc.com/switzerland/individual/other-taxes
I lived in Switzerland for a couple of years, and my general feel was that it tended to have slightly worse economic policy than the US.
I'm no expert but would be cautious in assuming Switzerland is some pinnacle of good governance. It didn't seem that way.
Okay, but regarding the last paragraph... isn't it so that the fundamental problem the ballot proposition / direct democracy system, them? Hate the game, not the player? Seems like a good example of why direct democracy isn't worth the possible results of gameability, in the end.
I'd imagine some might also say that whatever type of democracy the US have also isn't worth it if it can result in a Trump in power (twice).
Well, yes, both of these elements are currently evidently a part of the American system - they're not alternatives to each other!
That's a self-solving problem, at least...
Since there are more options than direct democracy and whatever the USA is doing otherwise, this seems a pointless whataboutism.
The California system is not the same as the federal USA system. There's no ballot proposition mechanism for the whole of the USA. That's only in California in particular.
Absolutely hate the player. Hate the player twice as hard, for ruining an otherwise good game. In the absence of a way to ostracize the player from playing, you still ultimately have to discard the game. But you can still hate them in the same way you can hate a player of an actual game who ruins it and forces you to stop playing because they won't stop exploiting the loopholes that everyone else politely ignores.
> Absolutely hate the player. Hate the player twice as hard, for ruining an otherwise good game.
I find it weird to get mad at horses for not being able to do math. You work with what you have.
I think the argument is that this is a very atypical horse and most political organizations aren't this bad.
But it's not atypical. It's an inevitable consequence given both the incentives created by the system and the existence of beings would take advantage of those incentives. It's like getting mad at the bears invading your neighborhood after you left food everywhere. You are responsible for creating good systems.
It's reasonable to express hatred towards the player when you would benefit from them acting less egregious, while acknowledging you likely are just as susceptible to enormous amounts of wealth.
It would be strange to get mad at rats infesting your home. That's simply what they do. Doesn't mean you can't build systems to deal with them. Anger, however, is unnecessary. What is necessary is action.
If you stand in relation to the other players as a human being to a bear, you need more mental institutions. People without more mental capacity than a bear should be institutionalized; it is cruel to have them running about.
> If you stand in relation to the other players as a human being to a bear, you need more mental institutions.
I don't. Let's not pretend we're not just animals. Some are just easier to work with than others.
What do you make of the park ranger claim that there's an overlap between the smartest bears and the stupidest people?
Alternatively, patch the loopholes with something more robust than a gentleman's handshake deal.
But it's not a case of friends having a boardgame night where you can have a gentleman's agreement to maintain the fun with at most social pressure to back it up. It's a game of vast amounts of crucial political influence and billions of dollars. You pretty much by definition need something more than gentleman's agreements and social pressure to ensure that loopholes don't get abused, to the degree it's possible at all.
Kinda yes, but also saying "social pressure is not enough" is a good way to undermine the social pressure. I think I see this happen too often, and it seems like a self-fulfilling prophecy.
Hypothetically speaking, we could imagine a society that believes in social pressure, where people avoid doing the worst things, because if they start abusing the loopholes too much, first people start spitting on them on the streets... then they start having a problem hiring employees, because people also spit on their employees on the street... and finally someone loses temper and shoots them, and the jury says "seems not guilty to me, your honor".
There are advantages and disadvantages of both, of course.
Behold! We caught your Goldfinger reference. Well done
The movie or the band?
The novel
I don’t live in California so I don’t want to read the whole thing. Can you point it out? I always love a good Ian Fleming Bond reference.
"Once is happenstance. Twice is coincidence. Three times is enemy action"
Ah, Auric’s utterance. Good one. Thank you.
Scott likes that one.
https://slatestarcodex.com/2014/12/17/the-toxoplasma-of-rage/
And it's a good line!
That's like saying you caught the Cato reference in the title.
Agree it’s badly written, but can the extremely wealthy not see the writing in the wall and get ahead of this and pass a good law? They are so good at anticipating threats and risks in business context, but somehow so oblivious in social context.
Came here to say this. Not just the extremely wealthy themselves, but every centrist and moderate who cares about good tax policy. Populists respond to situations in predictable ways: increasing billionaire wealth plus fiscal challenges plus lack of a wealth tax *will* lead to calls for a wealth tax. You can either keep hoping the left wing populists never ever get their way, or you can try and reach some kind of compromise, like a better tax.
Without fiscal responsibility, government spending and entitlements will just increase alongside tax revenues.
... I mean, as long as that spending goes to goods and services that improve citizen's lives, then... ok?
California and New York don’t have revenue problems. Their spending is out of control.
Inequality is also rather extreme, and lots of other factors pushing up costs of living, which means adjusted for CoL it might not be that much.
Though of course all the usual public spending heavyweights (healthcare, education, infrastructure) suffer from incredible low productivity. (The first two mostly because of how labor intensive they are, the last is mostly because the unimaginably poor cultural and regulatory environment, but this is the main culprit anyway. People don't understand and don't value efficiency.)
“Adjusting for Purchasing Power Parity (PPP)—known domestically as Regional Price Parities (RPP)—reveals a startling economic "equilibrium."
While the raw (nominal) dollar amounts suggest that San Francisco and New York City are vastly outspending Dallas, the "Real Service Value" tells a different story. When you strip away the airport/utility "businesses" and consolidate all layers of Dallas government (City, County, Hospital, and Transit), all three cities provide almost the exact same "Real Value" of government services per resident.”
“The "Tax Efficiency" Paradox
While the Service Value is nearly identical, the Tax Burden required to generate that value is where the cities diverge:
1. Dallas Efficiency: Because Dallas has no state or local income tax, it generates this $10,208 in "Real Value" using a much smaller slice of its residents' income. It relies on property taxes and a massive "supply-side" advantage (low cost of land/labor).
2. NYC/SF Complexity: These cities must levy heavy income taxes and business fees just to keep up with the "Real Value" provided in Dallas. They are essentially running in place—paying twice as much for the same "unit" of government.”
Per Gemini.
the biggest factors driving cost of living in california are self-inflicted by the government of california (housing policy and various regulations). Simply getting out of the way of developers would decimate the cost of living without spending a dime of taxpayer money.
It's difficult for any government to spend a dollar, on any margin, in a way that doesn't improve at least one citizen's life. The productive are not slaves to the unproductive.
> The productive are not slaves to the unproductive.
Sorry to disappoint, but the US is still a capitalist nation, so.... yes, they are.
Hell, I'm technically a landlord (rent a room to a friend). I do zero productive work for that income, just pure positional rent-seeking.
>Sorry to disappoint, but the US is still a capitalist nation, so.... yes, they are.
"Slavery is when you get paid."
I see you do not bother to dispute that your view is that wasteful government spending is impossible.
There are all sorts of claims of government spending that is actually worsening a citizens life like the 45 foot nude woman statue or that the police is actually oppressing the population so it should be defunded.
The whole point of this is that this measure will likely _directly_ lower revenue, unlike others which only operate indirectly by expanding the invisible graveyard... I.e. the government often raises $1 now means it never raises the $5 it otherwise would have later.
But this is so stupid that it means the government raises $1 now that means it never raises the other $5 it thought it was going to _now_!!
In this context of this article, yes; I thought OP was making a broader claim.
Sadly in the US, the opposite is the case.
2025 IRS revenue: $5.1 trillion
Combined net worth of all US billionaires: ~$8 trillion
So every 2 years, US citizens give their government more money in tax revenue than all US billionaires will see in their lifetime. It is more than enough money to accomplish everything progressives want.
In fact, the US already spends more per capita on healthcare than any other country. Yet what are our results? A bloated, disfunctional healthcare system that is unaffordable for the working class.
Throwing more money at the problem can't fix this. The only solution is for the government to decide to start spending wisely.
very amen to this.
In addition, I find the whole "tax the rich" thing to be very little more than pure envy, in the precise way that's part of the 10 commandments. "How dare they have more than I do. Bring them down, even if it net hurts society."
No. The government is unjust in which citizens whose lives it chooses to improve.
Is it fiscally responsible to give up your income for no reason?
Wait I don't understand, how's passing good law supposed to prevent this? Isn't whatever good law there is will be challenged and possibly repealed by SEIU every two years?
The argument is that, if the existing law was good enough, SEIU wouldn't get enough votes to put their bad version on the ballot in the first place because they wouldn't find enough bad things to say about the existing law.
I mean it sounds like SEIU is adept at obfuscating bad law in good sounding words, regardless on how good current law is.
Well, that's democracy, isn't it? Bad ideas and bad people rise to the top all the time. In the long run, you can pull them back down by the same means you made them rise up, and hope they were not bad enough to inflict permanent damage to the (political) system itself.
This is exactly why at the federal level we have a republic and not a direct democracy, though. Sure the people can still elect bad representatives, but the idea is that the representatives will on average be good enough and they will have the time to actually learn about the measures they’re voting on and make decisions based on what will actually be good instead of just what sounds good. And for all the failures of representative democracy, California is showing why it’s still better than direct democracy.
But the amount of effort required to defend is more than it is to promulgate the bad ideas in the first place. It’s why the marketplace of ideas concept isn’t working.
The past 80 years have been quite good for the democracies of the global West, so its negative effects can't have been all that decisive. To claim flat-out that it "isn't working" seems wrong.
Generally, it is much harder to change something that to leave it as it is, and I would count the hundreds of millions the SEIU keeps spending on failed ballot initiatives as evidence for this, not against.
Most would argue there's way too much institutional inertia, not too little, as you seem to believe.
That's a silly argument, because these people aren't voting on the merits of the ballot initiative, they're largely SEIU members voting to put money in their own pockets.
What exactly are the "merits of the ballot initiative" if not their self-interest? If they have the numbers and the unity to vote their preferred way, then...yay democracy? In the end, nobody's going to vote against their own interests, so why should they.
Now, what I do recommend, in case of doubt, is to have such laws checked by some constitutional court of law on the state or federal level, whichever applies. But that goes for all laws, whether derived by direct democracy or through the representative legislation. But if the law is constitutional, then by all means, put it in effect and let people live with the consequences of their own decisions.
You tell me, dude. You're the one who said if a good law is passed, then a bad ballot initiative will fail, which of course pre-supposes that laws are either good or bad.
I think I did tell you, "dude". If an existing law is good enough, meaning it mostly satisfies the preferences of the people it concerns, then the proposal for a marginally better law might not mobilize the numbers of voters required to have that new version pass. As a law-proposer you can get out of this conundrum only to a degree - you can't increase the promises indefinitely because even as that would attract more people lured by these escalating promises, you lose even more on the other end because they start believing (very reasonably) that you are promising things that reality can't provide, and your proposal is going to fail at that end. So it's kind of a natural control loop with negative feedback, which is a good thing generally.
Feel free to disagree with my point, but to my embarrassment I don't know how to make it much clearer.
There is a significant population (especially in California) who will vote for hurting billionaires, regardless of the current law.
I vaguely recall a survey of pro-gun-control people asking them what new laws they'd like to see passed, which found that they overwhelmingly propose things that are *already* codified in law.
Then perhaps what they actually want is for the existing laws to be more consistently enforced.
That also is wishful thinking.
What's your point? When you ask people what they wish for, obviously those are the sorts of thoughts you'll collect.
One point against this: In Denmark, which has a very high but very reasonable tax rate and a large welfare system, the same kind of law has just been proposed by the left populists, and lots of voters are in favour of it.
Remember the part where they need to get a million signatures to put anything on the ballot.
If there's a popular wealth tax already on the books, it'll be a lot harder to get signatures to add a new dumb one, let alone repeal the existing popular one.
That's not how signature gathering works in practice though. How it works in practice is paid signature gatherers hang out outside grocery stores and such, and they say anything they want to passersby, like "Do you think we should make California's tax code more fair? If so sign this ballot initiative."
Maybe a few dozen high information citizens would stop to ask the actual terms of the ballot proposition (which the signature gatherer may not even know) and consider their general knowledge of the current state of the tax code and decide whether the proposition sounds reasonable or not before agreeing to sign.
But in general it is true that getting a proposition on the California ballot is just a matter of money and effort.
Perhaps. It's a compelling story, but I also don't buy that there's literal zero influence of an initiative being more or less popular. How much it matters is an open question, and I agree that 'very little' is within the potential range.
That said, there's also the step of actually *passing* the initiative, where I do think whether it is popular or unpopular is much more definitive. Of course, you could say that this extortion racket relies on rescinding the ballot initiative before voting, so it doesn't matter if it passes; but it's at least a much less credible threat if the initiative is much less likely to pass.
Think like a r*t. You have a pretty young thing outside, who will talk to (and maybe give numbers) to anyone who will listen and sign her form. It's just a form, after all, you aren't even voting yet.
Last time there was a 16 year old at the farmer's market, I tried to ask her about the form she was waving around (it was "pro-retain"), did she know anything about the people she was trying to retain? Could she give one case that she liked how they'd decided? "Why are you asking me? I'm just sixteen years old." I'd have been embarrassed as a sixteen year old to be trying to get people to sign up, without knowing jackall about what they were signing up for.
We've had a heavy amount of aggressive prolesthysizing outside our store this year, more than I ever remember in the past, and...I gotta say, the cynical view is correct here, at least from what I've seen. Each day it's some completely new setup - fund the schools! reduce wealth inequality! pro-nurses (honest at least)! tax code fairness! reduce cost of living! And a hundred others. All to get signatures for this same damn thing, which the gatherers can't explain the nuts and bolts of even if you do attempt to interrogate. Now, one could certainly argue that the median passerby at this location is quite stupid, so it's just sensible market fit - we are next to a college, after all - but I find the brazenness to be a tipoff on the merits. Good laws don't need this sort of deceitful "and my axe too" wheedling to get signatures.
But, yes, it'd be harder to pull this sort of wool if an actually-sensible popular law were already on the books. (I hope. Populist fervor has many fine people on both sides these days.)
I've seen this too. I wish there was a way to sign *against* the propositions.
> Good laws don't need this sort of deceitful "and my axe too" wheedling to get signatures.
I disagree. I think they do because they're competing for attention against bad laws which use it.
this is spot on to what my experience with petitioners is as a resident of california. Very rarely do I find one that will actually discuss with me what the proposition is and what they think about it. It seems (though i have no evidence) like they are just being paid to gather sigs, not that they are "true believers" so to speak
The term for these people among California campaign staffers is "carnies." My aunt collected signatures for random ballot initiatives she neither supported nor understood because she was recently unemployed and it was a temp job that accepted anyone capable of standing for 3 hours at a time.
I remember standing in line for a concert and there was a carny asking for signatures on a recreational Marijuana initiative. When I looked at the form, I realized it was some obscure tax issue and the guy was just telling everyone it was about weed to get more signatures. When I confronted him about it he said he got paid by the signature.
SEIU has 700,000 members in California.
What level of wealth tax do you think would prevent lefty voters from wanting more?
1
Wrong. https://en.wikipedia.org/wiki/Pomperipossa_in_Monismania
That feels like the right answer. It is a democracy, so the very rich need to convince and show their value to the voters. At some point you have to trust the voters can make decisions in their own interest or you have to give up on the idea of democracy.
The proposition that voters can make decisions in their own interests has been repeatedly disproven.
Its hard to identify what tax rate would get the discussion to move away from "Tax the Rich". The Top 1% earn 22% of all income and pay 40% of all income taxes (https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2025/). Capital Gains taxes already exist, so what would it take to turn the attention away from it? I'm not convinced that raising Capital Gains to Income tax level or eliminating the cost basis change on death will actually change the discussion.
Billionaires and very high net worth people typically pay very low rates of tax relative to income because of various ways they can hack their income. I'd like to see billionaires deemed to have an income of at least 5% of their wealth over $1b and taxed at ordinary income rates on that income.
Put a poison pill in the bill so that the tax is automatically defunct if the 5% wealth tax goes into effect. Then present voters with the binary choice: the big ugly corrupt ballot initiative or the mild reasonable alternative.
Also there are all kinds of badly designed features of the ballot initiative which could simply be better designed. For example, perhaps those founders with paper wealth could be permitted to hand over common stocks of their company to California revenue service rather than having to liquidate them. That would solve the unrealized gains issues.
If people aren’t spending their wealth, then they are just doing the public service of allocating capital to productive causes. Billionaires live off a much smaller percentage of their wealth than the rest of us.
They do live off a smaller percentage of their wealth but they have no obligation to use their money for productive causes, and they spend a lot of money on unproductive ones. For example: super-yachts, massive sprawling play farms, ineffective charities, pleasure trips on private jets, and famously a child abuse island. I understand the island isn't typical, but the others are.
The warren buffets of the world who live truly frugally and devote their wealth almost exclusively to generating more productive assets are a minority.
In contrast, if we tax the billionaires more, 100% of those funds can be spent productively on activities chosen by the people's elected representatives.
>"In contrast, if we tax the billionaires more, 100% of those funds can be spent productively on activities chosen by the people's elected representatives."
Productively? In the People's Republic of California? Fat fucking chance.
That was a reach, admittedly, but I'd be willing to bet that a greater proportion of California's income than billionaires' collective income is spent on a mix of healthcare, education, housing, and poverty alleviation.
Perhaps the billionaires might actually have a small edge on actual good done in those areas, considering the effective charities that a small minority of them donate to. But the proper comparison there is the marginal good done by the extra money the tax generates relative to whatever small decline in donations to effective charities results from a top-up of ordinary tax rates to a 15% tax (CA's top rate iirc) on 5% of wealth.
It's parody. You can tell it's over the top by the sentence you quoted.
With the possible exception of the ineffective charities, those are all examples of taxable spending. A typical billionaire might devote 10% of their wealth to that. The other 90% goes to things like expanding the business that made them a billionaire and may make them a multibillionaire. Since that business is clearly producing something worthwhile enough that customers voluntarily paid many billions of dollars for it, we probably don't want to disincentivize more of the same.
I dispute this creates a disincentive. Deeming 5% of wealth as annual taxable income (taxed at a 15% rate iirc in CA) applies without respect to whether the wealth is used productively. So, spend the money more or less productively and the same tax applies, but if you want to continue to grow your wealth, you'll do so most effectively through building income-generating assets.
Monopsonies are not "voluntary", as monopolies are not. Sam Walton would spank the pants off his heirs, were he still alive. And then roll out a new business, to drive Walmart out of business for good.
Being a billionaire proved you gained your money by doing productive, good things because the only way to make money is by doing productive, good things. We know all billionairs only made their money by doing productive, good things, because they have billions of dollars.
Super yachts are hella productive. It's "space age technology" (or the equivalent.) And Child Abuse Island is very typical for people that rich (massive play farms, $4000 a night sleepaway camps and such... those exist too, but they aren't much better than normal sleepaway camps for adults.)
you mean if we tax, 100% of those funds can be spent on political favors.
Billionaires are extremely good at finding productive uses for capital which is why they earn great returns on it on average. Forcing billionaires to liquidate their investments leads directly to job losses and less productivity in the economy. Which hurts poor people.
Poor people are already hurt by poor healthcare and high housing costs and all the social services we can't have because it's not in the budget. There were far higher tax rates in the 1950s and they still managed full employment. So there's a way to do it! It's probably not difficult either--full employment is just a matter of who is spending the money to employ people, and whether it's 30% govt 70% private or 35% govt 65% private with more employment in health and education you can get to the same number employed.
I generally agree with the idea, but suggesting that 100% of that revenue would be used productively by the government is absurd.
Land value tax?
What good law can cure anti-rich bigotry? Does the average voter even know what the top marginal income tax rate is in California? Do you? Unless the "good law" is so ruinous that it stops tech billionaires from prospering--which would be the same thing as killing the tech industry--it won't address the root of the grievance, which is precisely the prosperity of the tech billionaires.
>unless the "good law" is so ruinous that it stops tech billionaires from prospering--which would be the same thing as killing the tech industry
We call this 'capitalist realism' and it's exactly the ideology we're fighting against.
It's physically impossible to have a large tech company where the profits and ownership are spread more evenly across all workers, instead of pooling into the hands of one billionaire? Why?
Is it because the billioanires are Randian ubermensch who single-handedly provide all of the innovation and dynamism to the entire organization, and the actual researchers who invent new technologies and workers who implement them would be simply unable to do their jobs without a shining heroic CEO to look up to? And that CEO can't be heroic and inspiring unless he has a billion dollars?
The fact that the dominate business model in the tech industry pools all the money and power in the hands of a tiny number of powerful weirdos should be seen as a failure mode of modern capitalism, not a necessity without which we cannot have people doing labor. That's just propaganda.
Are you of the opinion that tech workers are underpaid? Or that our compensation isn't adequately tied to the equity value of our companies? Because speaking as a tech worker I gotta say I haven't heard that in very long while.
>Are you of the opinion that tech workers are underpaid?
Yes, in the sense that Uber drivers and Doordash deliverers and Amazon factory workers are all tech workers.
I acknowledge that the tech industry has a small cadre of elite workers who are paid well (though generally not treated well). But they are also the primary force pushing deskilling of labor and breaking of unions/etc in many sectors, creating tons of impoverished workers across the economy. In way, way larger numbers than the high-end programmers they employ.
If you are currently in the elite class that gets a portion of the spoils... great, I am happy for you. You're not the person I'm worried about protecting, here.
"Yes, in the sense that Uber drivers and Doordash deliverers and Amazon factory workers are all tech workers."
Literally none of those people are tech workers. Their labor does not contribute to the technology, it is simply assisted by the technology. The only thing they don't have in common with their usually-comparably-paid counterparts in less technical companies is that their job is easier.
When we say that the tech sector is creating jobs, those people are counted. Tech companies are the ones hiring/managing them, that's who they have to negotiate their wages with.
We can taboo the phrase 'tech worker' if you want, but I'm talking about people who work for and are in negotiation with companies that we call 'tech companies'.
It's perfectly legal for any collective to establish a company that everybody owns an equal share of. That somehow this structure isn't exactly prominent should be a strong hint about its competitiveness.
In an economy where most corporations were already collectives, 5% of the workers of a successful company leaving to start a new venture would take 5% of the equity in that company with them, and use that to stake their new venture.
Yes, we do indeed live in an economy where wealth inequality is so high that normal people don't have access to the capital needed to start new companies and try new ideas. This is not a good thing.
VCs are perfectly happy to invest outrageous sums into all sorts of crazy ventures hatched by penniless dropouts. Surely a mature collective with a great business plan would be a much more enticing investment proposition?
I think you're thinking about like 5-10 examples of that ever happening, mostly many decades ago, and also conflating 'penniless dropouts' with 'upper-middle-class to rich kids getting tons of support from their parents while they make their first prototypes'.
Workers, and people as a whole, are fundamentally conservative. CEOs, and in general "top dogs" and people seeking to become "top dogs", tend to be far more ... revolutionary.
When you let your entire company get infected by "conservative" -- you get Pittsburgh's Steel Industry, which failed to modernize, and then failed catastrophically. Some of that's union, some of that's management, but it's all "conservative."
No they wouldn't. No company can actually run on that basis; no company is actually equally divided among all employees. Sometimes companies try; it never ends well.
There's a simple logic to the failure of coops. Firstly, investing in your employer is a terrible financial decision, in full generality, publicly-owned, private for-profit, coop, or anything else. It means that conditions when you lose your job are highly correlated with times when your assets drop in value, which is the *opposite* of what you want in your investments. This means that secondly, if you let your owner-employees sell** their stake, most of them will; the only thing that could get them to refuse is class consciousness, which has never ever existed. And thirdly, if you *don't* let them sell, they now very rationally want to at all costs avoid downside risks, that increase the chance that they lose their job and their investment at once. Which means they are in favor of stagnation over change; the prospect of growth has to be very large to be worth the risk of shrinkage, and so they make the rational choice to take only very conservative bets. And fourthly, the larger the company the stronger this effect gets, because the growth incentive shrinks.
Also, there's no guiding vision because it's a lot easier to convince twelve people of a bold strategy than twelve hundred. This isn't necessary for growth but it's usually necessary for *big* growth on the scale the tech industry achieves.
**Or otherwise hand over the value to someone else in exchange for money in some way involving loans against collateral etc.
Anyone of those employees being screwed by the man can start a company and become billionaires. But guess what? They can’t because most companies fail and it turns out to be a terrible idea to start one. Any serious attempt at building a company will take 10 years of your life and go nowhere. You will forego a decade of better opportunities. And when you’re done, your experience won’t be valued as much as a “real” job. Additionally, the lifestyle and mental health of being a founder sucks. Founders who build extraordinarily successful companies are extraordinarily rich because the appeal has to be very high for people to go after it. Of course you can say, well let’s cap the wealth you can make, but that only makes sense from the lens of looking at a few thousand billionaires. In reality a fairly successful founder after taking all that risk, might make 1/100 or 1/1000 wealth ($10M to $50M), after grinding 10 years and working a few more years at the acquirer. The billionaires are not representative.
Finally, very rich people tend to continue doing capital allocation throughout their life, investing in other companies and looking for mis priced assets. This sort of capital allocation is difficult, and it’s a real contribution to society. And while these people might grow their number for their own vanity, they don’t consume it to the same extent 1000 middle class people would if that wealth was divided. So they are mostly stewards of collective wealth in exchange for status.
Tax estate, tax consumption. Make your own money. Or not. Learn to live with what you have. The state should help the less fortunate, as in the bottom 20%, not those who wished they were billionaires but aren’t and are resentful for it.
People with middle-class careers are resentful because the quality of their jobs have degraded relative to previous generations, not because they missed the chance they never took at becoming a billionaire. With few exceptions, depending on location, today's teachers, firemen, police, etc have fewer benefits than they did in the 90s and will have to work longer.
>Is it because the billioanires are Randian ubermensch who single-handedly provide all of the innovation and dynamism to the entire organization, and the actual researchers who invent new technologies and workers who implement them would be simply unable to do their jobs without a shining heroic CEO to look up to? And that CEO can't be heroic and inspiring unless he has a billion dollars?
A CEO can't be heroic or inspiring unless he has money to pay his workers with. The only other realistic option for the role of capital allocation is the government, and I really doubt Donald Trump and Jasmine Crockett are going to be able to do that job non-catastrophically.
Setting aside the question of startups, workers are paid out of the revenues of the company, not out of the CEO's personal checkbook. You don't need a single person owning all the equity in the company for a company to pay its workers.
Now, it is true that we have such massive wealth inequality at the moment that most people are living paycheck to paycheck, and only the very wealthy have the slack needed to start a new venture and fund it until it turns profitable. But that's not a virtuous fact about those people, it's a major failure mode for our economy, and exactly the type of thing that ideas like a wealth tax are trying to fix.
Let me put it this way: imagine the world where 1% of people have enough money to found a startup, and the rest can't do it even by banding together or borrowing. What are the odds that most of the good ideas for startups, and most of the talent for running them, all falls within that 1% of people? How much wasted potential is there in the 99% of the population you can't draw new ventures from?
The revenues of the company determine the valuation of the company, which will be the dominant factor in determining the taxable wealth of the owner. A billionaire isn't someone who has a billion dollars in cash or a billion dollars in toys, it's someone who owns a company whose ~$5E9/yr revenue justifies a billion dollars in market cap, That the revenue doesn't pass through the owner's personal bank account on its way to the workers, doesn't exempt it from counting towards the owner's wealth,
...yes, I know.
What I'm saying is that the company doesn't need to have a single owner in order to pay its workers. The shares could be divided up among the workers, and it would still have the revenues and cashflow needed to pay everyone.
No billionaire is needed for this to work.
Good ideas aren't the problem with startups. Sound Fiscal Discipline is. So yeah, the top 1% are likely to have the most successful businesses, because they don't make unprofitable ones.
The Bottom 25% of startups are in general: restaurants. They're full of people with promising products (the food's yummy) who don't know jack about being a chef, and making food that's profitable.
Sure they make unprofitable ones. They can survive business failure better. More important, they can tide the business over a bad patch better.
>Now, it is true that we have such massive wealth inequality at the moment that most people are living paycheck to paycheck
The median net worth for households in America is 193K.
People are still living paycheck to paycheck, though, because of several other things totally screwed up about the economy. You can go here for a fable that might help it make more sense. https://x.com/ESYudkowsky/status/1815090947514142759?lang=en
> Now, it is true that we have such massive wealth inequality at the moment that most people are living paycheck to paycheck
That's a misleading claim from a bad survey by a financial services (read: loan) company: https://www.slowboring.com/p/this-economic-myth-needs-to-go-away
It's misleading because it includes e.g. people who make $200k, have most of their assets in illiquid investments, and depend on the next paycheck for cash flow to pay the bills.
In reality, only 13% of Americans can't afford a $400 emergency expense. While that's not good, it doesn't paint quite the same picture of "massive wealth inequality" as the narrative of "60% of Americans live paycheck to paycheck".
"workers are paid out of the revenues of the company, not out of the CEO's personal checkbook" is factually incorrect. For startups with no revenue, there is no such source of cashflows. For businesses operating at a loss, employees still get paid up until they can't anymore because there's not enough capital coming in to stop bankruptcy. I have personal experience in the latter.
The government can't do good capital allocation because the incentives of the job are inherently to use the money *now* for purposes of vote-buying or other things of value for the person *now* in the position.
Principle-agent problem.
One notes that a hired CEO, while having the principle-agent problem, does not have it in so aggravated a form, because his reputation turns on being thought good at running a business.
TL;DR: What we have works, changing it in the way you want would destroy it entirely, and replacing its societal benefits would be difficult if not impossible.
The whole point of the VC system is low probabilities of enormous success. So yes, it is structurally necessary that if they get enormous success they get, and keep, enormous rewards.
It is, at least in theory, possible to have an alternate tech industry that produces very valuable companies and products that don't concentrate the profits of that value in the hands of the people who started and led the company that got there. But nothing like venture capital as we currently know it would be interested in funding that industry, and it's not clear who would. And it's not clear if the really huge public benefits from things like Craigslist, Netflix, and Amazon woud ever have gotten started if people were making an ordinary effort to start an ordinary valuable company rather than making moonshots.
Moonshots went out of business, bro. That was the whole dotbomb. Then Netflix feasted on the corpse (extra bandwidth that became "please use it" bandwidth) and got big.
Anthropic was a moonshot. OpenAI was a moonshot. Cursor was a moonshot. Uber was a moonshot. Google turned into Alphabet expressly so that they could separate Google (stable company) from 'the Other Bets' (moonshots), and get their employees to stay within the Google umbrella when they went off to found their moonshot companies. Very explicitly.
The startup industry is 90% moonshots and the VCs consider the other 10% to be failures.
Hi! I have a company, and if you loan me some money, I'll double your money in two years.
... you ever tried telling VCs about a company like that? Holy shit did it take TONS of time and effort to find someone willing to take a chance on a "sure bet." (Sixteen times the profit was what the original investor bagged. Ca-ching!)
Your problem was that no one believed you because it's not a trustworthy-person thing to claim. This is not a problem for a moonshot plan.
If you have a business plan to make a trillion dollars, and it might work, but you'll find flaws in it, and probably you'll find enough that you fail, but there's a small but significant chance that you patch enough of them, well enough to succeed, that's very good and if you only make tens of billions it's probably still a good investment. There will be several more opportunities to invest more money if and only if you've demonstrated your plan was sound or you're skilled at patching the plan as you go along or both, so they can give a small number now and only risk more as they gain confidence.
If you're claiming you can double their money in two years as a sure bet, (A) you're claiming $20 bills are lying on the sidewalk and it's more likely you're deluded than correct, (B) if your business plan has even one significant flaw, it could easily wipe things out and lose them money, and (C) you're asking them to risk a lot more money, now rather than later.
Also that's not what VCs see themselves as doing. You wanted private equity or something, not venture capital.
I feel obliged to point out that worker coops are not in fact illegal. If you want to build your own tech company that distributes the profit to its employees, you are free to do so. That this is rarely done suggests that a wealthy owner (or at least a profit motive) is in fact necessary
2 basic responses here:
1. We're living in a system with huge levels of wealth inequality, and have been for centuries. That means that the capital needed to start a company and be competitive is already restricted to the hands of a tiny elite, and the financial instruments and institutions and regulations relating to starting and running a business are built around that assumption. Just because it is hard to form a co-op and be competitive with it in that environment, does not necessarily imply they can't be competitive in a different system less hostile to them.
2. Naturalism fallacy. Even if we assume co-ops can't compete on the market very well, that doesn't mean they aren't a good thing we should try to push towards. Even if you 100% buy into market realism and believe that every possible example of efficiency and advantage in the market translates directly into a benefit to consumers, most consumers are also workers. Imagine the case where widgets sold by a billionaire-led company are 3% cheaper, but the workers at a co-op take home 30% more income and enjoy their jobs 90% more. The the billionaire corp will win on the open market, but almost every citizen in the country would be happier if all big corps were co-ops.
Combining these two reasons, I'm not satisfied with the just-so-story of 'co-ops are not common today, therefore they must be bad'. There are lots of good things we want to pursue that don't happen spontaneously under current conditions, you could even call that the central purpose of public policy.
> We're living in a system with huge levels of wealth inequality, and have been for centuries.
False. The 20th century had the **least* unequal wealth of any century since the invention of farming. AI might make the 21st regress, not yet clear.
> Naturalism fallacy
No, that's something completely different. Nothing about industry is natural, and that's a good thing.
> Imagine the case where widgets sold by a billionaire-led company are 3% cheaper, but the workers at a co-op take home 30% more income and enjoy their jobs 90% more. Then the billionaire corp will win on the open market,
False. The ability to attract better workers - more experienced, more intelligent, more skilled, and/or in other ways superior - from them getting 10% more income, let alone 30%, would be worth *far* more than a 3% price hike per unit. There is not a publicly-traded company in the world that wouldn't take a 3% profit-per-unit cut to all their offerings in order to be able to offer their workers 5% more take-home pay, without any promise of better morale beyond that. They'd have fewer problems and increase in volume, and almost certainly make >5% more profit per quarter starting within a year.
In general, you're forgetting that a job is an investment, and it's bad to have correlated investments. If I work for Google, I should not put 5% of my investment fund in Google stock. I would likely get stock options; the strategic decision is to sell them as soon as possible. My employer would love me to be heavily invested in the success of my employer; I would rather be invested in it as little as possible, and put all my investments somewhere uncorrelated, that probably won't fail if my employer is in a position where it might have to fire me. (Or even better, anti-correlated; if I work for a coal mine, I should put a lot of money in solar, wind, and nuclear stocks.) Companies offer stock options, investments in the future of the company, not because they are good for the workers, but because they are good for the company. And the workers realize this, and sell quickly! If you gave them the option to sell them all on the second day at work, they'd do it, which is why you can't.
In short: a coop at scale, like REI, exists only through coercion.
>The 20th century had the **least* unequal wealth of any century since the invention of farming.
If this is true, which I don't accept without evidence, then sure, I should have said 'millennia' rather than 'centuries'. Doesn't really weaken my point.
> Nothing about industry is natural,
Industry occurs in the natural world, and follows natural law.
The heart of the naturalism fallacy is deriving a moral 'ought' from a factual 'is', which is what everyone here is doing.
You could argue that it's more properly the 'just-world ' fallacy, I suppose, but that one's more about individual virtue and rewards, than about the is->ought conflation. I'm pretty sure naturalism fallacy is the most correct.
>The ability to attract better workers - more experienced, more intelligent, more skilled, and/or in other ways superior
I never said you have to pay every employee the same amount, or give them the same amount of equity. If a smart corporation would pay more for better employees, then a smart co-op can vote to give them more equity.
>In general, you're forgetting that a job is an investment, and it's bad to have correlated investments.
What you're forgetting is that *most people don't have significant investments*.
I agree that, if you could have $100k salary and $100k stocks and divide them however you want, you'd generally want them to be diversified to limit risk, like any portfolio.
But if your options are having $100k salary and $100k in risk-correlated stocks, or having $80k salary and no stocks, you're still better off in the former case.
I'm talking about reducing wealth inequality and giving normal people a share of productive capital. That's better for them than the current system, even if it also has some problems.
"It's p/h/y/s/i/c/a/l/l/y impossible to have a large tech company where the profits and ownership are spread more evenly across all workers, instead of pooling into the hands of one billionaire? Why?"
High time preference and hyperbolic future discount.
The unevenness would be restored at once by employees who sell their shares for quick cash. And it would spread as people have disasters or situations where they need money and are unwilling to borrow while they own the shares.
If you don't let them sell, you are holding their shares in trust for them, and that's not ownership.
The only way around it would be to have a company that hires only Randian ubermenschen who have the risk tolerance and low time preference. And even there, employees would cash it in order to start their own, independent companies.
> most people are living paycheck to paycheck
This is simply not true. It's a lie. Roughly 22% of Americans are living paycheck to paycheck by a fairly reasonable definition.
Can you link the definition?
It's those who say they "struggle to pay their monthly bills" as opposed to those who say they're "living paycheck to paycheck". The latter includes 45% of people making $20,000 *per month*, which means it's utterly ridiculous. That kind of money isn't even near-poor by Bay Area standards and we're the most expensive place in the country.
First one was paywalled, this one is 24%: https://institute.bankofamerica.com/content/dam/economic-insights/paycheck-to-paycheck.pdf
My point was about most people not having enough liquid wealth to become entrepreneurs through their own capital.
I agree it's a problem that households making over $200k are living paycheck to paycheck, but they are, and it means that they can't realistically save up enough money to start a business.
Unfortunately, the sort of low-information voters who fall for this sort of thing, will predictably fall for claims of "...but the billionaires cheat and use loopholes so they don't pay any taxes under the current system, that's why we need new taxes". They will predictably fall for this, because they already have fallen for it. And it will be particularly easy to convince them to fall for it again, if the tax law SEIU or whomever is proposing to replace, is one that was written by billionaires.
There is no amount of taxes a billionaire can pay, not even 100.00% of their actual income, that will convince an idiot socialist that the billionaire isn't lying and secretly paying no taxes. And there aren't enough non-idiot socialists to change things. So in the land of the socialists, the only winning moves for billionaires are to GTFO or to fight a scorched-earth delaying action against basically any new taxes.
> There is no amount of taxes a billionaire can pay, not even 100.00% of their actual income, that will convince an idiot socialist that the billionaire isn't lying and secretly paying no taxes.
What is this based on?
Well, there's an example in the very next comment...
Could you be less cryptic and just answer the question?
No they are just running on a think tank dialogue tree and they are out of branches
Good to have someone defending the billionaires paying a super low effective tax rate. Must be an idiot to want them to pay proportionally similar to the rest of the population. Maybe they will favor you for your brave work!
Everyone know that closing loopholes and methods of tax evasion is socialism.
‘the top 400 Americans paid an average total effective tax rate of 24% in 2018–2020’
https://www.nber.org/papers/w34170
But 24% is not low. Is it? And to increase it you would have to increase capital gains tax, because that's where most of their income comes from. And increasing capital gains tax will lower investment. Capital gains tax SHOULD be lower than high brackets of income tax. There is a good reason for that.
It's not low, but it's much less than I pay; or for that matter much less than I would pay if I lived in California.
The people who really get screwed in the current system are the upper middle class, people who earn enough to pay the top tax brackets but don't earn enough to _not_ pay the top tax brackets.
“Earning enough” has nothing to do with it. Billionaires are paying the same income tax as you are. It’s just that their money mostly come from capital gains, not salary.
Ballot initiatives under CA law are “sticky” - pass a related law first, and the initiative overrides it. Pass the initiative first, and various procedural and statutory checks block you from legislating over it.
It’s one of the problems with the initiative process - there’s zero room for iteration, improvement, or evolution.
Yeah, if you oppose every version of a wealth tax an equal amount no matter how good/bad or moderate/extreme it is, then the good ones have no competitive advantage over the bad ones, and the one that actually gets passed will be a random draw.
Wealth taxes are just bad tax policy. There’s no way to make them fair and efficient, so you end up with something that makes the income tax code look clear and rational. If you think wealthy people aren’t taxed enough targeted consumption taxes are the way to do it.
For example how would targeted consumption get at Trump family billions of crypto profits? https://fortune.com/crypto/2025/09/02/trump-world-liberty-financial-crypto-blockchain-token-wealth-bitcoin/
Why would you need to? You’re talking about a book keeping artifact: “if I could sell all this crypto today at the current prices it’s worth a kajillion dollars”. But you can’t do that, it’s a fiction. Sometimes a useful one, but it’s still not something with any real tangible impact on the world. It only has an impact when they actually sell those tokens and spend the dollars that result, and that’s when it makes sense to tax it: when you have real numbers verified by a market transaction
There are a lot of “bookkeepping artifacts” in the lives of billionaires that will never be taxed. “Peter Thiel grew his Roth IRA from an initial investment of less than $2,000 to over $5 billion, benefiting from tax-free growth on his investments in successful startups like PayPal and Facebook. This strategy has raised concerns about the use of Roth IRAs by ultra-wealthy individuals to avoid paying taxes on significant gains.”
Sure. Yes, there are. This is called "being rich". So tax the money when they spend it. Why does this solution not work? What is wrong with people having very large ledger entries against their names that makes it a subject of public policy?
Being rich is great. Wealth shielded from tax in offshore accounts, family trusts used to hold assets indefinitely, and so-called family charities is not so great. There are too many bookkeeping artifacts. SEIU appraoch is not helpful, but neither is "waiting" for extreme wealth to be spent.
>There’s no way to make them fair and efficient,
Land value tax seems like a solid starting point.
A land value tax is not a wealth tax but I agree it’s a good idea
It's a tax on the specific form of wealth with the worst historical ratio of positive and negative externalities... at least among those still widely considered legitimate. Stockpiles and production machinery for nerve gas, or ozone-depleting CFCs, or radium-based "medicine," or some esoteric blockchain thing, might have it beat, but shutting those down is much easier.
Naively, it would feel that what the wealthy should do is just get the heck out of California and make sure to choose a place that cannot be controlled by a socialist-leaning and ignorant electorate.
Sealand?
Why? They can just go to a state that is more friendly to wealth.
Why would the obvious move be to pass a good law, rather than simply change residence to somewhere more accomodating? Miami has been welcoming tax refugees from New York for some time.
Exit >>> voice
What "good" law is possible here? The wealthy are extremely heavily taxed already and provide the majority of funding for public services.
Is the assumption here that billionaires can buy passage of laws at will?
Only non billionaires believe that...
What California billionaires actually do instead is relocating to Florida or Nevada. That actually *is* very easy for them.
> can the extremely wealthy not see the writing in the wall and get ahead of this and pass a good law?
No, there's no such thing as "getting ahead of this", because later laws supersede earlier ones.
I’ll rephrase using rationalist framework:
A growing number of people are expressing strong discontent and decreasing utility with wealth inequality. This is most pronounced in California, but also a national trend (I don’t know enough about international to say further).
To the extent that the very wealthy are invested in the status quo, I think it is in their best interest to get ahead of the secular trends here, and too pass some reforms that will increase utility for this growing population discontented with wealth inequality. It is in everyone’s interest and also the global utility to get this solved in some way, whether it aligns with any one person’s sense of efficiency or justice.
I’m not prescribing a solution or making judgement about which solutions are better or best, but that I’m surprised the very wealthy don’t recognize that it is in their own self interest to address the wealth inequality. And this ballot initiative is an example of that, but more extremely examples will show up in California and nationally.
I will also address the “leave the state” rebuttal and say this is trending to being a national issue. I don’t expect them to want to leave the United States in bulk, we all want those see this work out.
Is there any reason to believe that such reforms will do anything address the envy and greed motivating such discontent?
Zooming out, I’m surprised more that they aren’t trying to answer the question “what reforms would address the discontent, much of which maybe come from envy.” I don’t know what the answer is, but the people with the most to lose are ingenious, hard working, well-resourced, and solved some of the hardest problems out there, so I have faith they could future something out if they wanted!
"so I have faith they could future something out if they wanted!"
That kind of abuse is literally a prescription for insanity. Do you want them to crack? Because they could get acquitted as "not guilty by reason of insanity."
"much of which maybe come from envy"
By definition, if you express "strong discontent" to "wealth inequality" you are objecting that someone has more than you do and nothing else, and that is the *definition* of envy. The only "decreasing utility" you experience is self-inflicted.
As it turns out, all that such reforms would do would be to *feed* the envy and greed.
That might count as "addressing" it...but not in a good way.
Don't forget insurance regulations, prop 13 and the Gann limit.
I'm not sure that direct democracy has ever been considered a universal good, even as much as capitalism has been.
In particular, the average voter is not – and should not have to be – an expert in evaluating the technical merits of a proposal. However, when "the devil is in the details," that technical evaluation carries leading-order importance. Good and bad proposals can carry the same value-laden language, even leading sometimes to "dirty tricks" where (e.g.) a coal lobbying group proposes the Renewable Energy for Puppies and Kittens Initiative that just happens to make solar panels ruinously expensive.
Direct democracy seems to function best first as an escape valve, to push through select pieces of legislation only after the representative apparatus fails to represent. However, even that carries powerful second-order effects, where representatives are excused for non-representation _because_ things can go directly to the ballot.
Often, the representatives do not have enough expertise to evaluate the technical merits of a proposal. Quite famously, they made exporting random number generators of sufficient quality illegal (briefly).
That's definitely a problem, but at least in theory a stable representative government can have professional staff perform this kind of analysis through direct office budgets, caucus services, or shared parliamentary/congressional services. The cost of analysis on any one bill gets amortized over the many legislative items considered in a session.
For initiatives, voters don't have even the theoretical benefit of this sort of potentially-established procedure. The government could try to provide a technical opinion of its own, but that has a credibility problem when the initiative is notionally proposing something precisely because the elected government won't consider it.
Man, you're really into this "make more government jobs" thing, aren't you? In practice, the affected companies come into the representatives office and explain exactly how they f***cked up. And it gets fixed real soon like.
Yeah, ballot initiatives seem to be a poor idea, and the best play with them is to vote no, even if you broadly support the aims (progressive is a racheting game, so you can't actually remove recycling when it's no longer profitable, as that's not "progress").
The claim is that voters are too ignorant or stupid to know good policy. But now it turns out that the politicians are also, apparently, too ignorant or stupid to know good policy, and must rely on hired experts or friends like think tanks. So why not just take the middle men out and let the experts run the country ?
Looks at the COVID years.
I think that answers itself.
This is, of course, the classical problem of government from the dawn of political philosophy in Plato.
The American people view the experts' response to Covid better than they view the Dems/Biden, who in turn they view as having had a better response than Republicans/Trump. So, if anything, COVID suggests we'd all be happier if we did let experts run the country.
https://www.theargumentmag.com/p/the-covid-political-backlash-disappeared
The experts overtly lied to us in order to manipulate us to do what they wanted in ways that hurt us and did no good.
Those who view this as better are part of the problem.
That's a good point.
Direct democracy, if it exists at all, should be limited to a people's veto: outright repeal of specific legislation only.
I bet that legislators would find a way around that, by somehow attaching a clause to each piece of legislation they pass that effectively says "if this legislation is vetoed then all schools and hospitals will shut down".
I can think of dumb ways to do this with laws that say things like "add 1 to the number in register A" and "schools are only funded if the number in register A equals the number in register B" but I won't bother to bore you with them.
Ah, but repealing the act would affect the poison pill clause as well.
If legislators were numerate enough for anything more nuanced we'd be in a much better world than the one we actually occupy.
I agree that this sounds like political extortion through the ballot process. But isn't this what corporate and private actors have done for years? The example I always think of is sports team owners who threaten to leave a city unless they get public funding for a stadium. Or businesses that threaten to relocate unless they get preferential tax treatment (which is legislative, rather than a referendum, but amounts to the same thing). It's all bad, but this is just the labor movement sinking to the same depths that some companies have done in the past. The reason it shows up in such a blatant way is that labor unions don't have the unfied-entity advantages that a team owner or a single business have.
There's a qualitative difference between 1) choosing to leave for greener pastures and 2) weaponizing the apparatus of government to extort value from private groups under pain of regulatory strangulation. You're offering examples of 1 but suggesting that the union's repeated intentional efforts at 2 constitute the same behavior. They don't.
"Sure, it's bad to blackmail your boss over his secret sexual preferences if he doesn't give you a raise, but isn't that the same as what the high-performing employees have been doing for years, saying they'll accept an external offer if they don't get a raise?" No, no it's not.
Well-said. There's a moral difference between A) walking away from a contract negotiation because its terms aren't beneficial to you and B) imposing a contract that harms the other party.
Contracts should be mutually beneficial, so there's nothing wrong with telling the other party (e.g. a state or city) "You're not contributing enough for this to be worth my time and money." In theory, if the second party would still benefit even after sweetening the deal, then that's what they'll do. Otherwise, the deal will fall apart--which would be lamentable, but better than either side agreeing to something that hurts them.
This is not at all what the SEIU is doing. They're forcing the other side to choose between a contract that hurts them a lot and a contract that hurts them a little. The other side *can't* walk away from the negotiation without becoming fugitives from the law.
Is all “voting by feet” or “threatening not to vote” extortion?
For example, if I threaten to not vote for my representative because he or she is anti-abortion, is that extortion? If I threaten to leave the state and take my business with me because my state bans abortion, is that extortion?
Maybe not an individual level. Maybe people have concerns bc SEIU, among others, have way more power. If Google threatens to leave and take 20,000 jobs that’s a big threat. If Joe Schmo threatens to leave, then who cares ? But isn’t this just the power of organizing and solidarity ? SEIU has managed to build a giant organization of devoted members and a large war chest to fight for its interests, so why haven’t you ? Why not organize a bunch of people into the “Council for Evidence-Backed Policy,” build a giant mailing list with 100,000 dues paying members, build a giant war chest, and start influencing politicians to pass “evidence backed policy”
Why not sacrifice large amounts of your valuable time and many assets to fighting off an evil actor? After all, it's not as if it's your life that they are wasting with their cruelty, either way.
The better analogy is to large businesses' regulatory capture, preventing competition from newcomers who cannot afford the cost of compliance. That has much the same signs as this measure, with laws benefiting themselves at the expense of others, and phrased in such a way as to appeal to less-than-perfectly informed voters.
That's a fun solution to this kind of thing; if the ballot is defeated, make the proposers leave the state.
If the threat doesn't work, for the sports team or business, the threatener pays the price. Frequently this does in fact happen.
If the Nurse's Guild's threat doesn't work, their targets and the people of California pay the price.
An "either the curtains go or I do" ultimatum is very different from "nice dialysis clinic you got there, shame if anything happened to it."
Extortion is bad, but "give us what we want or we leave town" is a much less bad form of extortion than "give us what we want or we blow up the entire healthcare system".
Yes. It is bad when any major actor does it. But the same should apply when a business closes the one factory that supports a town. Businesses should have free to close or relocate as needed, but to hang that over the head of a community to extort tax breaks is not different from what a union does to extract their own rents. I would have a lot more sympathy for the arguments in this post if the same people who decry labor extortion were to oppose business extortion. Any negotiation involves a stand where one party says that if its terms aren't met that it will walk away. But to say it is bad when labor pulls a political move but that it's just "the economics" when business does it is hiding a power preference behind a supposedly neutral position.
False equivalence. Both sides can walk away in the factory case. SIEU is preventing the other side from walking away.
It's the retroactivity that makes it different. If it only applied prospectively, it'd be perfectly equivalent, yes.
100%
"This proposition isn’t being sponsored by some generic group of Piketty-reading leftists."
Wasn't it drafted in part by Saez?
Between this and the NY AI rent-seek bill I am very thankful that we have a conservative SCOTUS. The only thing between us and the Europeanization of the economy.
“In our benchmark estimate, the total effective tax rate—all taxes paid relative to economic income—of the top 0.0002% (approximately the “top 400”) averaged 24% in 2018–2020 compared with 30% for the full population and 45% for top labor income earners. This lower total effective tax rate on the wealthiest is substantially driven by low taxable individual income relative to economic income.”
https://www.nber.org/papers/w34170
The uber wealthy are able to have their income delivered in special ways that avoids being taxed at a reasonable proportional rate. This makes zero sense. Particularly when we’re in a deficit.
This is not due to some mysterious or sneaky loophole. Tax rates on capital gains are lower than regular income, and the wealthier you are the greater the proportion of your income comes from capital gains. There is no special trick here.
Yeah it’s super easy to avoid taxes by being paid in certain ways available to the most wealthy only. They also avoid many of the downside with access to different types of credit. Like you said it’s not that complicated and should be fixed.
FWIW they use Haig-Simons as their definition of income, which considers changes to paper wealth to be income. You can come to all sorts of wacky conclusions with that definition of income when used at the individual level (it makes a lot more sense in the context of a firm, however).
The argument that changes in paper wealth should count as personal income is usually that they can borrow against their paper wealth. It is an exceptionally shitty argument because either that lending has to be paid back (with interest), or the collateral is forfeited.
It's a disingenuous rhetorical sleight of hand that Zucman etc are repeatedly guilty of.
Haig-Simons isn’t a trick, it’s a measure of actual increase in ability to pay. And no, the claim isn’t that a loan is itself income. The claim is that current law lets wealthy people consume against appreciated assets without realizing gains, then often erase those gains at death via stepped-up basis. That is a real tax preference for capital over wages, not ‘rhetorical sleight of hand.’
It's totally a rhetorical sleight of hand precisely because it's not "actual increase in ability to pay" because it has to be paid back (or the collateral forfeited). You may as well be calling a credit card "income" by this asinine logic. These are the kinds of shallow mental gymnastics that make people roll their eyes at the proposals made. It is transparently a conclusion in search of a rationalization.
Those gains would have to be realized to pay back the loans at death.
Would it be sufficient to just get rid of stepped-up basis to silence the complaints about margin loans? I don't think so.
Why is "economic income" the appropriate denominator?
Why does income become materially different in a way that allows you to pay less proportionate taxes once you are able to afford to pay for all of your reasonable needs and wants?
This would be less of an issue if social services in the USA were reasonable or if there was not an affordability crisis.
It's not. See my comment above. "Economic income" doesn't even correspond to income in the way most people think about it (it includes e.g. appreciated assets).
This is true, but capital gains is also an inherently variable form of income which if taxed at the normal rate simply won't happen at the most economically beneficial levels. I try to think of an alternative and it comes out as something like the capital gains tax rate is equal to the regular rate, but all capital gains taxpayers have to pay into an insurance fund that compensates those who experience losses, and the insurance is taken out of the payable tax. Maybe that would work. It's certainly not an easy thing compared to just having a lower rate, but it may be more politically durable
capital gains is calculated when the asset is sold
Let's say someone offers you a three year contract with a $50,000 salary, and your other option is to invest with an average expected return of $50,000 each year, but it may range from $150,000 to a loss of $50,000. If you get more than a $50,000 average there's a diminishing return in real value because you can already afford groceries at $50,000 - but far enough below and maybe your retirement fund is drained and you'll be house poor in retirement and have difficulty affording groceries
The $50,000 salary is more valuable unless you remove the uncertainty from the investment income
>This could be an existential threat to the Silicon Valley model of building startups that are worth billions on paper before their founders see any cash.
I don't quite understand this argument. Do these founders ever see any cash in the traditional sense from their activities? I thought it's "billions on paper" all the way down, or all the way up, as it were. My impression was that even the billionaires including Musk, Bezos et al. who are long out of the founding game, barely ever convert their stock to cash and instead borrow money against their stock when they want to buy another yacht?
the tax includes wealth on paper
If your startup is now publicly-traded or otherwise liquid, then you can either sell or pull stunts like that to get money to pay the tax. If you have a valuable startup which isn't liquid yet, then you could potentially be on the hook for a steep wealth tax despite not being able to turn your wealth into anything that can pay a tax.
I think a better approach to doing a wealth tax for people like that (assuming a wealth tax is going to happen, whether or not it's a good idea) would be to allow startup founders and other such people to pay directly in their stock and let the government handle converting into cash.
This is probably a bad idea. The government can time its sales, directly interfering with the normal operations of the publicly-traded markets for potentially political reasons rather than normal economic reasons. It also would have huge amounts to trade, further distorting the normal operations of the market, and at timings that might align with all sorts of unusual incentive structures.
Doesn't the tax regime carved around "RSU compensation" already do this, albeit to a lesser extent?
The whole reason this tax is crazy is because it would tax that paper wealth, forcing all of the billionaires to liquidate in order to pay it
It was my impression that was precisely the point, and not some unforeseen consequence?
You get them to write up a list of all their assets. Then you have a list of things to go after.
Or, if you find out they forgot about their 3 BTC hanging around somewhere they never sold, you can send them to jail.
If it's non-malicious (LOL. LMAO.) then forcing Dario Amodei to sell 5% of his stock of Anthropic in 2023 is not the point, let alone the many private companies which are "paper unicorns" but collapse before the IPO, and were never in practical terms worth that much, let alone possible to liquidate into a form that paid the demanded taxes.
Yeah, even if they come up with the money to pay the tax, would they get a tax rebate if the investments go belly up? I doubt it.
That bullet point is an explainer, not an argument, which is clear from the very next sentence:
> Since most billionaires keep most of their wealth in stocks, any wealth tax will need some way to reach these (cf. complaints about the “buy, borrow, die” strategy for avoiding taxation)
Scott's just connecting the dots from scratch so that people understand 1) the bill hits assets, not money and 2) why that is.
Shares in privately held companies aren't very liquid. That's the issue.
In descending order of likelihood:
1. The company goes bankrupt and the paper wealth wealth never gets cashed in at all
2. They sell shares into a follow on round of investment, and pay capital gains
3. They get acquired by another company and pay capital gains on the full value of their shares
4. They IPO and sell shares into the public market and are taxed on the capital gains
The idea that these people never sell their shares is an idiotic conspiracy theory that can be disproved by looking at the insider transaction filings of any of those companies.
> In the same way, SEIU seems to have found a bug in direct democracy ... Seems like an ignominious end for California’s ballot proposition system.
Hmm, although the specific details of this scheme seem specific to direct democracy, I'd say pretty much every political system has the same types of issues! You don't need a ballot proposition system to extort money from a political system.
Exactly. This is a more public subspecies of a larger phenomenon.
direct democracy is less predictable than legislation, so there's maybe more room to threaten people
Or just predictably irrational…
So why doesn't someone start loudly asking the union president why he's playing defense for the Trump Administration?
If you're going to have direct democracy you should do what Athens did and force all the voters to go to the Agora to listen to pro and cons debated for the day before voting.
The 2024 presidential election had over 150 million voters, and I don't know where you're going to find an Agora that fits that many people.
Well, if you're electing a president that's representative democracy rather than direct democracy. As long as the politicians elected are afraid of being voted out if they mess up they've generally got a lot of incentive not to do a lot of stupid but nice sounding things, though this isn't perfect.
In the California ballot question case you'd probably have to have people in a lot of different high school gyms watching debates over television and then voting afterwards if you wanted to do it this way. Or just restrict direct democracy to polities where everyone can fit in the town hall.
The virtual Agora called the Internet has unlimited capacity. Make sure people who aren't present for the entire online session with their webcams on don't get to vote. AI can watch the webcam stream and see if the attendee is paying attention.
I'll send a Teams Invite.
Put them in the cube https://www.reddit.com/r/theydidthemath/comments/18oq1y3/request_could_all_humans_on_earth_today_could_be/
That's an interesting concept, but hardly solves the problem of ill-informed voters following charismatic leaders to ruin. In fact, that very thing happened in Athens with Alcibiades's proposal for at attack on Syracuse.
Androclean disinformation !!!
Didn't the ancient Greeks, or one of their states at some time, have a system whereby if someone proposed a law and this was not voted to be adopted then the proposer was executed? Sounds like an ideal principal to bring back into effect for people like this Dave Regan!
While execution is extreme, maybe some form of disincentive is needed against bad proposals. Maybe the loser needs to pay for the legal/marketing expenses of the other side?
True and as you probably gathered my proposal was tongue in cheek
If only! Sometimes I wish we could.
I was in the local union in NH in the 1980s while working at the state psych hospital. It was the State Employees Association and mostly decent folk 'from right heah.' Then it affiliated with SEIU and within a year I got out. It ended up costing me personally when I had a harassment complaint against my department. I could have used them. But I would do it again anyway. They kept insisting that the national connection would give us access to "resources" so that we could have a greater voice. That mostly seemed to be bringing up big guys from NJ to stand with toes over the edge of the designated areas to accost people to vote for Democratic presidential candidates. Did you ever shake hands with a guy who cuts sheet metal for a living?
I think unions are a great idea. It's a shame ours have all metastasized.
>I think unions are a great idea. It's a shame ours have all metastasized.
Well, that's largely because any small new ones that try to start up get eradicated by capital. So only the old powerful ones are left.
We need to make it a lot easier for new unions to form without retribution.
Excellent point
Capital likely wouldn't fight unionization so hard if it wasn't a one-way ratchet; like how French companies are hesitant to hire because it's so difficult to legally fire a bad pick.
If a union had to be recertified by secret ballot after each contract term, both management & the union bosses would be on better behavior.
People talk about how bad the French economy is because of this stuff, but first google result suggests long term average GDP growth in France around 3.0%, vs 3.2% in the US.
I know that when you're talking about long-term cumulative growth curves, .2% isn't actually insignificant. On the other hand, they get a legal minimum of 5 vacation weeks per year, I'd give up a lot of the little bullshit consumerist stuff I waste money on for that.
Would you accept their high unemployment rate (the thing Ghillie Dhu is talking about in his comment) for it?
> People talk about how bad the French economy is because of this stuff
Comparing France vs California (so ~worst in the US) specifically:
https://imgur.com/a/qkIwD07
France has zero actual innovation, and they're basically the best in Europe. It's amazing Mistral still exists after the EU basically regulated AI out of existence, and they're continually being brain drained of their best talent to SF, for reasons like the comp differential I posted there.
As a French worker, I do feel like the social goods provided by that money (paid holidays 5 weeks/year, free healthcare even if I lose my job, public transportation and infrastructure, easy-to-fill taxes, cleaner energy, etc...) are worth it. But then I'm not my employer.
High unemployment rate is bad, but not the worst thing ever. In fact, in an economy with wealth growing faster than its labor needs, I feel like unemployment is fine... As long as it doesn't make your life suck.
From what I understand unemployment in the US is much more of a dire situation than it is in France.
No, they get eradicated by existing unions in direct competition with them, in alliance with governments who want it to be easier to negotiate with a whole industry at a time. This has happened a dozen times.
"Capital" is not a faction; by construction it is composed of people in competition with each other who cannot safely coordinate if they want to. It does not take actions as a class; it cannot.
(Nor can unions as a class, but new unions can be destroyed individually by single big-union competitors in the same market.)
Well of course they have. The way "unions" work in the USA is by being a government-condoned monopoly (of labor, in a given area/sector). You can tell, because so many of them treat union membership as a prize to be carefully hoarded, instead of giving it out to virtually any entry-level worker in the sector as a way to increase their mass bargaining power.
In the Nordic countries they have a different idea of what a union means.
I am trying to wrap my admittedly feeble mind around the concept of a retroactive tax. How far in the wayback machine can one push this? I guess maybe it's proposed by the same people who champion reparations from people who never did the bad thing then but are being forced to pay for it now.
I agree that retroactive changes to the tax code are bad, and an economic version of ex post facto convictions, however I'd like to point out that the right wing recently did the same thing (the BBB tax changes were passed July 4 2025 and affect the entire 2025 tax year, Jan 1 2025 to Dec 31 2025)
Trump 1 passed tax cuts that similarly lowered taxes, IIRC including the *previous year*!
This is not the same because the general legal principle is against punishing someone with a law passed retroactively. Not benefitting them with a law passed retroactively
The Supreme Court has upheld retroactive taxes as long as the retroactivity is “rationally related to a legitimate legislative purpose.” See US v Carlton 512 U.S. 26, 31 (1994). So a tax could theoretically be applied far in the past as long as it could meet that (low) standard. (Haven’t done a deep dive on this issue so take this analysis for what it’s worth)
Well, thanks. Looks to me like the words "rationally" and "legislative purpose" are difficult to imagine belonging in the same sentence these days . . . especially in CA.
> "... a bug in direct democracy: it incentivizes interest groups to search for the most destructive possible ballot initiative that might nevertheless get approved by low-information voters, since this gives them leverage..."
There's a solution to this - well before the vote, randomly select 5% of the eligible voters to vote on this proposition (different for each proposition) and inform them that they are the only ones voting on it. This incentivizes these voters to educate themselves on the issue. The hope would be that they treat it as a civic responsiility, like jury duty, and put serious effort into it. (No guarantee of course - no system of government is guaranteed to work.)
So - representative democracy, with the representatives chosen by lottery?
https://en.wikipedia.org/wiki/Sortition
I suspect that 5% would be too many, the incentives too dilute, to really change anything.
We can find a number that might work. But it would also incentivize these voters to reach out to the SEIU and to various billionaires and say "now how much am I bid for my vote on this issue?". If we get it down to a dozen or so voters, we can maybe sequester them like a jury to prevent that, but now there's the question of how we get them unbiased information to make the decision; if we just let them have internet access, they'll be back to emailing the SEIU.
Well, the incentive would be 20 times greater than at present. But even if that isn't a crudely rational reason to do research (even though small chance of big effect may work out as positive expected return), the less crude effect may be for voters to see it as a special responsibility that they will take on.
secret ballots! Just make it impossible for a voter to verify who they actually voted for
"We will pay you X amount if this measure passes/fails" is probably equally as effective and doesn't need verification of individual action.
So... Nielsen lawmaking.
Yes, sortition/Citizen's Juries are one of the classic proposals for this kind of problem. Typically they say something like 1000 people rather than 5%.
Liquid democracy would also be nice.
At 5%, most people will end up being selected at some time, fostering the feeling that they are involved in the system. Also, I have in mind them voting in the usual way, with them learning about the issue in the usual ways, just hopefully more intensively. I imagine "Citizen's Juries" involve them meeting each other and discussing, which might be good, but might also be bad (social pressure, etc.).
> At 5%, most people will end up being selected at some time, fostering the feeling that they are involved in the system.
Fostering the frustration that they were forced to be involved in the system, more like. 5% has basically no advantages over 100%. You'd still have minimal individual impact on outcomes, it would cost *more* to run an election than for 100%, and there's little or no reason to think that people would be more motivated to investigate issues if they're one of 14,000 voters (registered, Wyoming) or 30,000 (eligible, North Dakota, no registration roll exists) than if they're one of 280,000 or 600,000. If not more. There's a reason why none of the serious proposals or roadmap considers anything as large as 1% of the registered voters; it does almost nothing to help. You're reinventing ideas discarded long ago as lacking sufficient benefits to justify the increased costs and enormous political difficulties. You should probably look them up; I gave you the standard keywords to search for, which you apparently chose to ignore entirely.
Huh?? Why the hostility here? Why the scorn for anyone making a suggestion, then clarifying it and offering a further justification, without first reading your favourite references?
And why are you so confidence that people will not feel involved in the system if they are asked for their opinion 5% of the time, but instead see it as being "forced to be involved"? Has anyone tried this? If you know that it's been tried, why didn't you tell us the details of what happened? And if you don't know of anyone trying it, it's ridiculous to think that you can get a definitive answer by armchair theorizing. People aren't that simple.
And I note that what seem to be your preferred methods of sortition and liquid democracy have not actually been adopted anyplace I've heard of, so I don't see "political difficulties" as being a good argument against trying something a bit different.
Ignoring prior art entirely to the point of refusing to even look up what they mean demonstrates you are not trying to bring new ideas to the table.
If you had looked them up you would have found they _have_, actually, been tried. Historically, at scale; in modern times, in small numbers.
that's no good
Well, if you can get 874,641people to back you, it sounds like a there is a good opportunity to do exactly the same thing to SEIU. A ruinous ballot proposal or pay out a few million. Hell, id sign on for that.
Reminds me of Prop 34 in 2024. But it's very expensive to do this, and it only barely passed.
Is it possible that the design flaws that threaten startups are a feature, not a bug? (To clarify: is it possible that some people at SEIU wouldn't mind taking the startup scene down a notch, not just as a threat in an extortion attempt, but because they denuinely dislike it)
Thank you for covering this. It reminds me of the corrupt, vampiric policies that ground society to a halt in "Atlas Shrugged".
"Seems like an ignominious end for California’s ballot proposition system", seems like incredible optimism. I'm pretty sure the ignominy of California's ballot proposition system is barely coming to a middle; I'm not sure I can see an end that doesn't involve an apocalypse of some sort.
Possibly California can serve as a warning to other polities thinking about ballot-proposition direct democracy, and some of them can get it right. That's not as good as California being the nation's hub of innovation, but it's something.
Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
Switzerland.
No, they don't seem to have highly polarized nor low-information voters.
They do go to some lengths to inform people, but I think you’re falling into the trap of assuming Europeans are just better without any real evidence. Rural Switzerland is extremely conservative and xenophobic
> They do go to some lengths to inform people, but I think you’re falling into the trap of assuming Europeans are just better without any real evidence.
Are the crime rates not evidence? I'm not talking about minorities here, a quick search showed me that the homicide rate for US whites is over three times higher than those in European countries.
I don’t think that really has any baring here, does it? I can pick arbitrary statistics that make the US look good and Europe look bad. For instance, Europe’s economic growth over the past decade has been abysmal, most European countries are so racist (in average) they’d make Strom Thurmond blush, and so on. These are all things where there are real differences (as in the US homicide rate) but I don’t think there’s any evidence that Europeans on the whole are less polarized - I’m not up to date on Swiss politics but certainly when I last looked into it that’s not how I’d have described it.
> Europe’s economic growth over the past decade has been abysmal
Because of policies prioritizing social good that are not conductive to growth.
> most European countries are so racist (in average) they’d make Strom Thurmond blush
That would actually help with maintaining social cohesion. Keeping outsiders as outsiders means they can afford to only interact with their own kin, who they can trust.
That's irrelevant, on both counts.
In fact, it's likely the *opposite* of being highly polarized. In 1960 the United States of America was highly **un**polarized. And we certainly had lots of conservative, xenophobic rural Americans then! In fact, the existence of those conservative xenophobic rural Americans was a major factor in maintaining the unpolarized state of politics. There were two axes, economic/philosophical liberal vs. conservative and racism/xenophobia, and both parties were divided along both, with many cross-party coalitions occurring in Congress and within the states, because those in each party who agreed on one axis but not the other crossed the aisle to push for policies that supported the thing they agreed on.
Also, for low-information, it's irrelevant, and I'm certainly not guessing without evidence. For decades Switzerland got *utterly voluntary* >90% voting rate. After a brief experiment with digital voting, IIRC they're down to merely 60-70%. You don't get that without people actively interested in politics and voting for a purpose. Maybe not for its own sake - the drop in in-person voting between before and after the digital voting experiment suggests social pressure - but at least as a means to an end, they're interested.
Seems like you could do it by describing the law it would replace, and letting that law's supporters write the description.
I used to be really proud of living in a state with a culture of citizen initiatives. But after fifty years of seeing how they work, my standard policy is to vote “hell, no” unless I have some really good reason to believe in it. Sometimes this is when there is a “pro” argument in the voters’ guide but no “con” argument submitted — but even that isn’t a lock. And I absolutely vote against initiatives that are constitutional amendments; even normal initiatives are too sticky.
>Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
Prosecutorial discretion. Ballot measures can expand people's rights by legalizing things (with judges throwing out charges brought against people for legal behavior) but prosecutors can choose not to bring charges for violating referendum-passed laws like this tax thing.
The quality of a dish is limited by its ingredients. Paprika can only do so much.
If legal engineering were sufficient to produce good outcomes, Liberia would be a superpower.
> Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
I've got a direct democracy system (rather than ballot proposition system) that uses AI and does this.
Here's a scheme I came up with in an afternoon of thinking about it:
* People vote through the voting app.
* Direct democracy alignment on priorities - “voting” is now not about which professional liar / 90-year old multi-millionaire half-corpse you think should be in charge of everyone, it’s about citizens staking a capped amount of vote tokens to weight high-level objectives (economic growth, homicide and other crime rates, UBI, immigration, equity / DEI, CO₂, etc.). As in, you get a standardized menu of items you can stake your tokens against, but you only get so many tokens, so prioritization and trade-offs are built-in.
* AI proposal - The AI proposes legislation to attain the aggregated democratically defined priorities, with a detailed prompt outlining the total budget and soliciting it to consider the homeostatic landscape, to predict the primary, secondary, and tertiary effects, to outline the monitoring KPI’s and thresholds, and to define a good sunset or re-evaluation time for any proposed legislation.
* Futarchy vetting - Prediction markets and digital-twin sims price the KPI impacts before enactment, as a human check on AI predictions, and as an overall evaluation ground over many such proposals, so we can understand the overall landscape of which proposed legislation will move various needles the most. This is federally funded so there’s enough alpha in there that smart people / companies will be doing this full time.
* Democratic vetos - A stratified random sample (≈ 1 - 10k citizens depending on locality) gets the top 3 AI-optimised bundles for each priority, plus the market scores, and can veto any of them in the aggregate if enough decide to veto. This caps downside from model myopia and value-misalignment, and keeps democratic participation in the loop, without the pernicious regulatory capture and misaligned incentives we get today from full time politicians, lobbying groups, and industry insiders.
* Monitoring and execution - Smart-contract escrow releases more funds only if real-time KPIs or GANTT charts track forecast bands, limiting boondoggles and downsides.
What does voting look like? You open an app and allocate your voting tokens to the high level priorities you care about.
Occasionally, you’ll get a push notification to decide whether to veto some random bills or not, which you can ignore or answer as you like. Done.
It scales to every locality size - from the HOA, to municipal, county, state, and federal level.
And at a shot, we’ve eliminated political parties, politicians, lobbyists, industry insiders, regulatory capture, and most of the other ills that plague politics today.
> Serious question: is it even possible to engineer a ballot proposition system that will give generally good results in a world of highly polarized low-information voters?
The problem is the way that initiatives are selected, not the fact that they are voted upon. If initiatives are chosen by the elected representatives then there probably won't be any truly-disastrous initiatives put up.
California seems to have a terrible system in which the way you get a ballot initiative on the ballot is to collect some vast number of signatures (apparently around 850000). This means that the only way to get anything on the ballot is to be a well-funded well-organised conspiracy with a lot of skill at getting random low-information voters in the street to sign things they haven't read.
One thing to note about 'buy borrow die' is that while it got quite a lot of press and is now a passed-around meme, it doesn't appear to happen especially often. There are a lot of legal issues around how the meme would allege it works, but regardless, it doesn't show up in the data (in notable part because the super-rich don't consume most of their income): https://www.sciencedirect.com/science/article/abs/pii/S0047272725002178
"it also incentivizes the hunt for loopholes: addictive products that can take advantage of seemingly-tiny wedges between what people will buy and what’s good for them. Cigarettes, casinos, payday loans, and social media all demonstrate that these wedges collectively form a multi-trillion dollar niche."
An economist (or at least an economist who believes in markets) would question Scott's claim to know what's good for consumers better than the consumers themselves do. Cigarettes were not created to fill a wedge between what people will buy and what's good for them - they were mostly viewed as a pleasurable vice. The evidence of the extent of harm became visible later, and smoking has become much less popular since. Payday loans get an especially bad treatment by people who know what other people need, but they fill a real need for people with low assets and no savings to come up with quick cash to cover some emergency, like car repairs that allow the borrower to get to work. Similar analysis could be made for casinos and social media.
"In the same way, SEIU seems to have found a bug in direct democracy: it incentivizes interest groups to search for the most destructive possible ballot initiative that might nevertheless get approved by low-information voters, since this gives them leverage over anyone willing to bribe them into withdrawing their poison pill."
It seems to me that direct democracy is the bug. Representative democracy was widely adopted, especially in the United States, because history, particularly Greek and Roman examples, had many examples of easily-persuaded voters adopting bad or tyrannical policies. The initiative system was proposed during the Progressive era as a way of getting around entrenched interests that were seen as gaming the system and obstructing needed changes. It came with its own problems, which have been seen before in California.
There are no solutions, only tradeoffs.
"Similar analysis could be made for casinos and social media."
I agree you could analyze everything this way, but I've talked to gambling addicts (and nicotine addicts) and they don't think of their consumption behavior as a reasonable choice which fits their needs.
I'm less willing to put payday loans in this category than I used to be, especially after seeing stuff like Klarna that encourages people to finance their DoorDash order at crazy interest rates. Although you can always tell a story where people really need a burrito right now and rationally have very high time discounting rates and so on, I think if you're not ideologically committed to that story, it makes more sense to think of them as just not making very good choices and thinking "Haha, I can pay it later, which means it's basically free now!" I think the more you're familiar with how lots of people think, the more plausible this becomes.
Speaking as someone who has been addicted seriously enough that I spent six months not leaving my room except sneaking out late at night to steal and eat some of my flatmates food, and who destroyed my life and potential choices at the time because of my addiction, the choices that addicts make are still choices that we/they are responsible for. We/They do in fact have the option to say no and stop. Blaming capitalism is bullshit.
I don't think there's a binary "blame addicts" / "blame capitalism". The number of marijuana addicts went way up when marijuana switched from being illegal to being advertised on every billboard. We can debate all day whose "fault" it is, but that seems less interesting than the brute fact that it's a political choice whether we think it's worth having those extra people be addicted vs. not.
And, as the man above you said, neither you nor I nor voters have any cause to stand in judgement for these people when they can stand for themselves. They are making a choice. That you don't like it doesn't mean it ought to be enforced by political power.
Ballot initiatives just seem generally terrible. Is it possible to make a California ballot initiative to end all California ballot initiatives?
It probably is, though I imagine it would have to be a constitutional amendment initiative, which I believe requires a larger signature count to qualify and a supermajority of votes. I normally vote against proposed amendments, as they are even harder to undo than normal initiatives, but this one I’d be all for.
Sounds like something out of Atlas Shrugged.
As a Tumblr post I once read stated: Ayn Rand protagonists are fake, but Ayn Rand villains are terrifyingly real.
> ... it’s no surprise that California, a state full of bad socialists, is considering bad socialist policy. But I think this is the wrong perspective. This proposition isn’t being sponsored by some generic group of Piketty-reading leftists. It’s the project of SEIU ...
What SEIU does is precisely socialism in synecdoche. What you're gesturing at as more principled socialism acts in this way toward every industry, not just healthcare.
Can you explain?
Socialism is the same as this type of racketeering, except being organized and benefiting one industry, it's done by the entire proletariat for the sake of their class interests. The only difference is scale.
Direct democracy is a terrible idea. Effective, stable democracies elect representatives who take accountability for their work.
Billionaires are a failure of public policy.
Both these ideas can be true at the same time.
No person has ever 'made' a billion dollars. Some people have 'made' a million dollars.
If you have put the effort in, built a scalable business in the seventh attempt, and floated your luck to ONE BEEEElion Dollars, that's nice. Now pay up. Taxing insane capital growth is a normal and natural function of a society.
Pay for the way that was paved by the poor.
>"No person has ever 'made' a billion dollars."
Counterpoint: Taylor Swift
My uncle made a billion dollars. He worked at the US Mint.
Second counterpoint: J.K. Rowling
Warning: in the future, please make arguments rather than just posting emotionally-charged slogans.
As someone that believes in a national wealth tax and massive capital-redistribution in the age of AI, I was going to vote against the CA measure purely on the wrong jurisdiction problem: Individual states cannot tax stuff that can easily escape their grasp at the stroke of a pen.
However, I disagree that the gaming of direct democracy by the SEIU is any worse than the gaming of our utterly corrupt pay-for-play representative democracy by the wealthy and powerful interest groups.
At least direct democracy directly relies on the voters who are the ultimate source of legitimacy. That it requires voters to be well informed is correct but I will take that any day over pay-for-play corruption after the election at which point voters no longer have agency.
So CA's direct democracy is very much needed as a counter against the corruption of representative democracy even if it can be gamed in some instances.
It might not be worse, but that doesn't make it good.
Direct democracy requires voters to be well-informed, so what does it imply when they are *not* and a jurisdiction still uses direct democracy? For the moment, let's put the question of whether CA in particular is well-informed enough to support direct democracy. What happens in a direct democracy when voters are certainly not well-informed? Does voting still have legitimacy, do voters have agency?
I suspect it just moves where the pay-for-play is located. However, that relocation supports your argument that even a sometimes-corrupted direct democracy may function as a necessary counter against corrupted representative democracy: it decentralize power so anyone wanting to rule it all has to play multiple, less individually-decisive games. With any luck, the different games close each others' loopholes.
>What happens in a direct democracy when voters are certainly not well-informed? Does voting still have legitimacy, do voters have agency?
I think so. In direct democracy voters are deciding on an individual policy question and so by definition they are being given agency to make a concrete choice on an issue. If they choose badly they have no one else to blame except themselves.
In representative democracy, not all issues are litigated before the election. The representative uses personal discretion to pass legislation and he/she can be bribed easily to pass policies that would never pass if voters were asked to vote directly on said policy or block legislation that most voters would want if allowed to vote on.
Our low-info voters regularly elect rapists, convicted criminals and other shady figures to high office.
So "low-info voters choose poorly" applies both to individual policy votes and the selection of representatives themselves.
Having more avenues to error-correct than fewer is therefore better.
>"Having more avenues to error-correct than fewer is therefore better."
Not necessarily. There may be multiple disjoint sets of policies that are internally coherent, with each candidate representative representing one. Direct democracy opens the door to selecting an incoherent policy set.
Representatives merely coarse-grain over voters. Since district lines are arbitrary to some extent reflecting pre-existing power structures, the result of a direct democracy can sometimes differ from what you would get given a particular gerrymander. I don't buy the idea that one is necessarily more "coherent" than the other.
By "coherent" I meant something like:
Candidate A:
- implement tax X
- use the revenue to start program R
Candidate B:
- cut program S
- use the savings to repeal tax Y
Whereas letting the populace make policy choices à la carte results in:
- repeal tax Y
- start program R anyway.
The point is that "Having more avenues to error-correct than fewer is therefore better." does not hold unconditionally.
>Whereas letting the populace make policy choices à la carte results in:
>- repeal tax Y
>- start program R anyway.
Under our representative Democracy the American voters have been consistently voting for 16-19% GDP in taxes and 22-24% GDP of spending for many many decades now. Since money is fungible, voter incoherence simply gets aggregated into the national debt in our current representative democracy. It does not solve anything.
If you wish to impose some high level constraints to prevent incoherence under some interpretation those constraints need to be enshrined in the constitution. Voters should not be able to pass arbitrary laws even under direct democracy.
Isn't a tax that applies before it's passed an ex post facto law and therefore unconstitutional?
(Serious question.)
EDIT: I was wrong below. Article 1 Section 10 also prohibits the states from doing it. My bad.
The constitution only prohibits Congress from passing ex post facto laws.
It applies to states too.
You're right. I forgot it was mentioned twice; once for congress, once for the states.
The 14th amendment extends many restrictions on Congress to the states. I don't know offhand if this is one of them.
No, the Supreme Court has upheld retroactive taxes multiple times. See US v. Carlton, 512 U.S. 26, 31 (1994). The prohibition on "Ex post facto laws" only applies to criminal laws.
OK, thanks!
While I hate that capitalists find loopholes to exploit the system and loot spoils from the rest of us, and I hate that labor organizations find loopholes to exploit the system and loot spoils from the rest of us, I'm always skeptical when someone advances the solution of 'so lets close all the loopholes being used by labor organizations!' and ends it there.
Given that I'd prefer to live in a world where both sides are disarmed, that doesn't necessarily mean that things will be better if one side gets disarmed unilaterally. If you tell me there is a loophole that lets labor extort capital, and doesn't hurt anyone else, then I'm directionaly in favor of it... those two groups are definitionally in conflict with each other, and I think capital currently has way too much power in that relationship.
That said, if Scott is saying he's done more research and this loophole 1. only helps a tiny amount of the labor class, and maybe helps special interest orgs claiming to represent labor more than the actual workers, and 2. does hurt everyone else in salient ways, then sure, I'll provisionally lean against it, pending having the attention span to look into it more on my own.
But I still want to register my skepticism of this type of argument... You can make perfectly good critiques of only one side of a conflict, and still end up unbalancing the system and pushing it further from the optimal equilibrium. Classic isolated demands for rigor.
>"…those two groups are definitionally in conflict with each other…"
That's what landowners want you to think, but it's not so.
Just tax land.
I know that Georgism is said to solve many things, but how does solve the relationship between capital and labor?
As long as bosses and employees exist, they're fighting to divide the same pie between themselves. I don't see how land tax changes that.
Labor & capital are capable of positive-sum interactions; the pie can grow.
Land, however, due to its fixed supply can at best participate in zero-sum interactions.
Any pie growth the first two factors achieve ends up captured by rent; landowners benefit by masquerading as capitalists, simultaneously deflecting labor hostility to actual capitalists and free riding on their defense against the deflected hostility.
It sounds like the problem would be solved if billionaires made a good law to tax billionaires
They don't need to, it already exists
Wouldn't the destruction of Silicon Valley be a good thing for AI safety and society in general?
Regrettably, it is quite possible to do AI in Texas, or in China for that matter.
Okay, so if direct democracy is demonstratedly inadequate because of *broad gesturing at California*, and representative democracy with the reps chosen by direct democracy is tolerable but not much better, then what's the better policy for choosing reps for representative democracy?
Lottery from the population that's 90%-confidence impacted by the proposal, weighted by the size-certainty product?
Computer mediated algorithms.
Can somebody explain to me how a retroactive tax is constitutional? I thought Ex Post Facto laws were straight-up illegal
Ex post facto laws, as prohibited in the federal and California constitutions, are laws that make previously innocent action criminal. Changes to the tax law don’t count, since they do not make any previously legal action into a crime. We see this in many, many years when the tax rates are changed mid-year. (Even so, you would see a lot of resistance to a change in the tax law that forced everybody to recompute, say, their 2023 returns.)
There are plenty of things wrong with the “billionaire tax”, but this particular objection isn’t one of them.
I see this as a general problem with ballot initiatives in general. Any sort of well-organized special interest group can easily gather enough signatures to put their pet issue on the ballot. They give it a nice friendly name, then fill it with technical details that the average voter won't be able to understand. If it wins, they get a huge win, and the state legislature is powerless to overturn it becomes it outranks them. If it loses, no big deal, they just give it a new name and come back in two years. With more and more of these initiatives on the ballot, it becomes harder and harder for even well-informed voters to study them all. And just to add insult to injury- the number of signatures is both *low* enough that any large organization can gather them easily, but also *high* enough that a regular well-intentioned citizen can basically never reach that point.
To be fair, this is also sort of a problem with any democratic system- you can just keep proposing a law no matter how many times it fails. But at least in congress, you've got a party system to set an agenda and prevent too many spurious laws from coming up to vote, and a whole staff to read the proposed laws and explain what's really going on with them. We gotta get rid of this state-level direct democracy nonsense.
I wonder whether unions tend to greater frankness in their public statements and if so whether that’s a feature of organizing workers
> “ […] an existential threat to the Silicon Valley model […]”
I didn’t need to read anymore to know to fully support the SEIU’s scheme (whatever it is) that will force Silicon Valley to move to Detroit (or wherever)!
This does not at all seem to be an argument that SEIU delenda est
Sure, I mean there's always missing steps in every argument.
This is an argument that SEIU is a terrible horrible organisation that makes things worse for everybody. To get from that to SEIU delenda est you need an additional assumption that terrible horrible things should be destroyed.
> you need an additional assumption that terrible horrible things should be destroyed.
That *is* a big step. What if I believe that before we get the Paradise, the Apocalypse needs to happen first?
From that perspective everything good is bad (it delays the Apocalypse, and therefore the Paradise), and everything bad is good (it brings the Apocalypse, and therefore the Paradise, closer).
From that perspective, SEIU is working hard to bring the Marxist Paradise to the workers.
> What if I believe that before we get the Paradise, the Apocalypse needs to happen first?
Then clearly you believe that the world is a terrible horrible thing that should be destroyed. No contradiction here!
> What if I believe that before we get the Paradise, the Apocalypse needs to happen first?
At the very least, the source of society's ills needs to be destroyed before it can be replaced with something better. All sustainable systems resist change, good or bad. They will not willingly destroy themselves.
separate question: why would a billionaire object to losing 5% of their wealth to pay for healthcare given that this money is effectively meaningless to them?
Probably because it will be 5% this year, 5% next year and so on until they lose most of their wealth and control of the companies they built. There is no way that this initiative passes but the next "one time" one is rejected because "oh we just had one time tax a year ago". Pretending otherwise is either being disingenuous or stupid.
They don't have enough money to pay a 5% wealth tax; they'd have to liquidate a great deal of wealth to do that. And if this wealth were effectively meaningless to them, they wouldn't have gone through the very considerable trouble of acquiring it. You may be typical-minding, assuming that because *you* can't think of how to meaningfully use gigabucks, it's meaningless to people who are in fact very different than you.
Exactly.
If billionaires are objecting to losing 5% of their wealth, why do you still believe that money is effectively meaningless to them?
>given that this money is effectively meaningless to them
Where would you get a crazy idea like that?
I mean the objection is that's it's 5% of "wealth". The very definition of unrealized asset is that it's not here yet. We already have lots of tools to tax realized wealth, but taxing unrealized ones is always idiotic.
They do object, it doesn't matter why.
Billionaires are not your friend. Why do you expect them to want to pay for your healthcare? They probably don't want to pay for healthcare because they're greedy.
What makes you think the money is meaningless? Their behavior strongly suggests it is not
Ignoring for now the question of the efficacy of health care taxation, I'm also confused about exactly why billionaires care about their unspendable amounts of money.
I have more money than I ever expected to as a child, and although I'm not a miser or anything and feel like I appreciate it, I also find that I hate losing it and could always use more. Some reasons:
- Once I have more money, I start to think of things like "If I lost my job tomorrow and never got it back, could I live off savings indefinitely?"
- And things like "If the world is too messed up for my children to make a normal living, could they live off my savings indefinitely?"
- It now seems reasonable to me to invest in friends' startups / other startups I care about, and this is expensive enough that even having a lot of of money means I can make a significant different / angel investment in ~10 companies. If I had more, this number would go up. I would love to be able to throw $100K at a magazine I liked and thought deserved to exist, without worrying about whether it would ever make it back. And I'm saying $100K because that's the sort of thing that seems almost attainable if I were one level richer than I am now, but I'm sure the real billionaires are thinking this about, like, $100M to fund the Washington Post or something.
- It now seems reasonable to me to make big charitable donations, of the type that significantly expand a small charity's capacity, or get big charities to consider making me an advisor or somebody they keep in the loop about their activities. Again, even a large amount of money would let me do this ~10-20 times in my life (although getting reader contributions through ACX Grants very significantly expands this).
- I have friends who are richer than I am, and I always kind of feel like I'm getting away with something or owe them a favor when they invite me to their rich person parties which are much nicer than any party I could reciprocate with, and if I were richer, maybe I would feel like *they* owe *me* for coming. I admit this doesn't apply as much to a tax which makes everyone poorer, but maybe people haven't emotionally made that update.
- Speculatively, if I were Elon Musk level rich, I would want to do Elon Musk level things like buying Twitter, or buying elections, and that's so expensive that even Elon has to think twice about affordability (this isn't true by the numbers, Elon has $800B and Twitter only cost $40B, but it seems to be true in practice, maybe because most of Elon's wealth is illiquid in some sense I don't understand).
I have less than 1/10,000 as much money as top billionaires but maybe these same sorts of concerns apply to them too?
Interesting. These do still seem like considerations that depend on changes in order of magnitudes of wealth, not 5%.
I guarantee you that, whatever your level of wealth, you've probably got plans as to how to use all of it, and you will notice 5% of it not being there any more. And not in a way that will motivate you to do good works that benefit the people who are taking your money, or even tolerate their presence any more than they have to.
Off-topic, but you can stop ChatGPT from producing such unreadable text by including something like the following in your user prompt: "Write in complete paragraphs, made up of complete, grammatically correct sentences. Avoid using bullet points. Avoid excessive use of bold for emphasis."
"Avoid emojis, unless specifically told to use them. Avoid praising the user, unless specifically asked to evaluate the quality of an idea."
Im pro union. I need them when negotiating with the super rich
The only union that should matter is union of people, the monopoly of monopolies, a.k.a the state. Any separate monopoly inside of it weakens it.
Warning: please make fewer assertions, more arguments.
(in particular, as written this sounds basically like the thesis statement of totalitarianism; I think if you are trying to assert something different, it needs to be more specific)
Haha, it sure does sound like it. But I think you've already discussed in an article whether democracy is for the people to have the choice to have any wall color you want, to have the choice to be able to force everyone to have specific wall color you want.
I think you've also touched on a subset on libertarianism that wonders if a totalitarian state is the way to go that can actually implement "true libertarian" irl. Essentially you concentrate everything to one entity (the state?), and then have that one entity do it as little as possible. We already have that for violence (and maybe we can say that as working fine?). For capitalists, we may also have that for any rent-seeking behavior ("thou shalt not have moat"?). Of course ideally we don't want to have it at all, but this configuration may prove more stable instead of devolving into local warlords in a second.
But wouldn't it stifle innovation? One could also argue that centralized violence makes us all weak, and there's also argument that the reason china fell behind in 19th century is that they were too centralized for their own good compared to Europe that had to compete with each other. But that's another discussion entirely. I think libertarians also always have uneasy relationship with copyright.
Regardless, local warlord (union) bad. Either have it be as big as possible or none at all.
Side note: I thought this is how "there is no god but God" supposed to work. By concentrating all supernatural beliefs to one entity only, you're eliminating all beliefs to anything else and should result in a more rational behavior overall.
What on Earth makes you think that a union would be interested in helping you do that?
In what sense would a union be interested in helping their members? In what way are their interests aligned with helping their members out? The union's interest is in maintaining a huge swath of angry underpaid workers; having well-paid and happy workers is very much contrary to their interests.
The union leadership is elected by, and thus accountable to, its membership.
nah that's not true. I'm a member of a union and they work for me. My mom was a member of a union and they worked for her. The leadership are elected by the members. The Starbucks union is way more concerned with the interests of starbucks workers than the starbucks corp. is -- the starbucks corp. is just responsible to its shareholders. where did you get this cynical view of unions? have you ever been in one?
Yeah, I don't think this describes most people's opinions with unions, and it also seems like potentially an argument against all forms of human organization (it's the old "why should doctors cure you, their interest is in keeping you sick forever so you keep visiting them?")
Is "pro union" "pro everything a union does"? What is the union was abducting people and holding them for ransom, would you make this same post defending them?
https://www.tumblr.com/bambamramfan/810356018535071744/seiu-delenda-est?source=share
"And the thing is, people seem to get very, very, VERY upset when a union uses a cynical tactic that we wouldn't even consider worth mentioned if someone else did it.
Abuse a local ballot system to extort money from someone who would be harmed by the initiative? Let's talk about every neighborhood group that has met a developer who needs local approval to go ahead. If I told you Republicans were using this tactic, would you even look surprised? If a corporation were fighting tooth and nail just to not spend $5 on safety regulations, would it be considered the end of ethical policy?"
There is a marked difference between trying to protect your own selfish interests and flat-out extorting third parties.
You are quite the knave if you think none of those groups "extort third parties" https://www.latimes.com/local/lanow/la-me-ln-homeowner-developer-pacts-20170330-story.html
All of those things are terrible and very worthy of mention
Since you aren't going to read the very next paragraph in the full version I linked to from above, I'll post what I said next from it here:
I'm sure Scott and others would agree those (frequent) examples are bad, but you don't go writing "Boeing Delenda Est" over their lawyer fighting for Boeing to save a buck. George W Bush (the one who's a saint compared to Trump, these days) put constitutional amendments on ballot measures to ban gay marriage... just to get more of their voters to show up and vote for Bush. YES VIRGINIA POLITICAL GROUPS USE THE BALLOT SYSTEM LIKE A POLITICAL TOOL.
The foundational assumption of this argument is that if a billionaire tax has passed, then billionaires will leave the state that has *made them a billioniare* to save a portion of their wealth they will never notice. Which might be true (and might not), but that seems about as cynical as what SEIU is doing here.
When anyone else practices self-interest in politics we say that's just the way it is, and the other side has to fight back. But when unions do it, it's a major public crisis.
I can't tell if anyone is arguing that singling out a VERY tiny minority of the population and taking 5% of their stuff is just wrong?
Is this an argument being advanced? Or is the debate all about how effective the tax might be?
I think the debate about "how effective the tax might be" is, in practice, the only kind of debate that can be had. Debates based on morality are notoriously subjective (and usually religious) and cannot be resolved other than by force.
I don't think that's a common line of argument because most people don't consider rich people to be "minorities" in any relevant sense. If the proposal were to take 5% of the wealth of, say, Hindus, I'd have stronger moral objections. People convicted of first degree murder are also numerically a tiny minority, but few people have much sympathy for them.
Now just to be absolutely clear, I don't think anyone sane believes billionaires are all morally equivalent to first degree murderers, or that any and all anti-billionaire actions are morally justified. I'm just saying that they're the same type of "minority" in the statistical sense, so arguing against the proposal on practical grounds is the better strategy to use here.
>But there are better ways to do this (for example, taxing at liquidation and treating death as a virtual liquidation event)
Don't we already basically do this in the form of estate taxes? That's the whole point of the step up.
Personally I think it would be much cleaner to:
• Get rid of the basis step up, estate tax, and lower capital gains tax rate.
• Treat inheritances as taxable income, possibly with an option to spread out over a few tax years.
However, Biden tried to get rid of the step up and there was a huge pushback from rural democratic representatives, so I’m skeptical we’ll ever see a reform like that.
Can you explain "the whole point of the step up"? I thought step up was an attempt to avoid doing this?
More to the point, although we do tax estates in some ways, this is a claim that if the state wants more of billionaires' money, it's more effective to ramp up that method rather than add the other ad hoc methods being described here.
The step-up was implemented to prevent the same appreciation from being taxed twice: once by the federal estate tax (on the total value) and again by capital gains tax (on the growth). The step up simply reflects that a tax event occurred upon death based on the assets' present-day value (my comment was asking if this is much different from treating death as a virtual liquidation event), and so their basis should be updated to match that present value.
And yes, I completely agree on point two.
Doesn't this make the whole step up basis thing people keep complaining about, often in conjunction with the supposed "buy, borrow, die" strategy, a non-issue?
What then exactly is the problem with "buy, borrow, die", even if it was actually commonly used? When they die their assets are liquidated to pay back any outstanding loans, which triggers a taxable event, and the remainder is transferred to heirs which is subject to estate tax. Or is there some common workaround to avoid paying estate tax that makes people think the step up basis is a big deal?
There are ways to have an asset avoid estate taxes, but not without also avoiding the step-up. It's both or neither. And since the estate tax is considerably higher than the capital gains rate, my guess is that most billionaires will end up doing all they can to avoid the step-up.
So no, it probably doesn't deserve the attention it gets.
SEIU also represents a significant chunk of government employees, at least in SF as I understand it, and as such may be a significant contributor to the poor state capacity of CA state and local governments.
It's a shame, though, because people extracting taxes from the people who manage to evade taxes all the time is otherwise an inspiring idea. Since the issues have been clearly identified, surely we should be discussing doing it again but correctly, with most of the the objections resolved?
Unions at their worst may be what makes my blood boil more than anything. At their worst, they're essentially a group people who take a dollar from everyone else and then share that huge sum amongst themselves. The result is a concentrated benefit for the group leaders and members, and a diffuse cost on the rest of the entire world. How much worse off is the rest of America (and the rest of the world for that matter) due to the fact that unions control our ports and want to keep them manual and inefficient? Probably a larger cost than the benefit that the typical ILWU West Coast dockworkers receives in the form of his ~$200,000 average salary. All of it cloaked in the language of support for the little guy, helping the workers, and taking a stand against the evil rich.
They're special interest groups, but for some reason one that some people don't want to label as such.
Every union I've ever joined or worked with has been great and produced huge value for its members. Every union I've ever read about online is a corrupt plague that accomplishes nothing and chokes productivity.
Sorry, but I think I'll be believing the evidence of my lying eyes today.
Well my belief is that most unions produce huge value for their members, I'm not arguing that at all. I'm also only talking about a small subset of unions "unions at their worst."
I mean by definition union should benefit its members... At the expense of everyone else. It's a monopoly after all and the more a monopoly exercises its power, the more everyone suffers.
Right, but the idea is for *everyone* to be in a union, so that their identity as consumers and their identity as workers are both represented in the market.
When you break labor power and favor the consumer over the worker, you set incentives towards a consumerist society where everyone is overworked to buy trinkets they don't really need. Lots of workers would trade fewer hours for less gewgaws, directionally from the current equilibrium; but you need a way for them to exert their preferences as workers for the market to incorporate that want.
Many people already choose to not buy new trinkets and choose to not work that much. But there are also a lot of people who do want new trinkets and choose to work more. Letting people make their own choices is good.
I don't know who has the option to choose to work 32 hours a week or 26 hours a week, every company I've ever applied at has a standard 40 hour workweek, and many labor laws are structured around that assumption.
Congratulations for the people who do have the ability to make that type of decision, but I don't think it's available to most people in most industries.
And the whole point of a co-op *is* that the workers can make their own decisions about how to do their work, instead of having a boss that tells them what to do. Making their own decisions far more than the current system.
Where did co-ops come into the picture?
So we need consumer's unions as well then? In what way are consumers "favored" over workers? What incentives operate towards a consumerist society?
...that's the whole point of free markets? Companies compete to offer the most to consumers in order to get their money? The Invisible Hand and all that?
I'm saying, the whole system is designed to optimize benefits to consumers, and that's how we've always measured its success. And that's worked really great, but when a metric becomes a target it stops being a good metric, and I think we've overshot favoring consumers to the point of neglecting other things and becoming worse off.
I don’t think my views on wealth taxes are shaped too much by whether or not I believe in taxing the rich. I believe in taxing the rich AND I am diametrically opposed to wealth taxes. I think that regular income tax should gradually go up to 50% for the top tax bracket and that capital gains taxes and inheritance taxes should increase too (In my ideal world there would also be some sort of constitutional amendment capping federal taxation at 50% of income).
This is much more reasonable and closer to what other countries have successfully implemented, unlike wealth taxes which always get rolled back for being impractical/not working. Ireland, Austria, Germany, Denmark, Nederland, Iceland, Finland, Luxembourg, Sweden, France and India all ended up getting rid of their wealth tax.
Also, anyone that has ever been involved with the personal finances of a startup founder understands how ridiculous a wealth tax would be. The founder with a billion dollars on paper and -100k in the bank account is not a myth made up to make billionaires seem more relatable. Many billionaires are not in that situation but some founders of highly valued private companies are.
You think we tax nouns, like "the rich", but really we tax verbs, like "working" and "investing". Decide the behavior you want less of, and tax that. I want more investment and less consumption, so I like a VAT. I'd love less carbon dioxide emissions, but that couldn't even pass in Washington State. I want a better city and less empty buildings, so I want a land value tax.
Billionaires are a byproduct of free markets. Free markets create power law distributions. Individuals are free to make choices. Those choices result in some people starting companies (the vast majority of whom will have a poor financial outcome). Those choices result in people investing in, working for, and buying from those companies. And those same choices lead to some people becoming billionaires. Society votes with their actions to decide who will become a billionaire (put aside inheritance which I believe should be taxed much higher). So you want to take wealth away from billionaires? Why not also take power law fame away from the famous? Make a law to limit the number of instagram followers anyone can have. How about people that were born really smart, is that fair to the rest of us? How about people that get to live in much better weather? Should we rotate people throughout the country so we all get to experience living at a ski resort or the beach? How about brands that are much more successful than others? Should we limit how many shoes Nike is allowed to sell? How many tickets should Taylor Swift be allowed to sell? How many world cups should Brazil be allowed to win?
The argument against billionaires is driven by the same old socialist sentiment of being annoyed that others have it better than we do. Would the world be better if we all truly had the same opportunities down to the genetic makeup? Maybe, maybe it would be dystopian. But either way that’s not the world we live in.
There’s an optimal taxing strategy, and this might change if AI redefines labor. And because the world is not optimal, there are things we could be doing better. But that’s not what drives the anti-billionaire sentiment. It’s not people with spreadsheets trying to figure out the optimal way to make everyone better off. It’s just driven by a much more primal energy.
Likewise, the very rich could be better about conspicuous consumption. Jeff Bezos does a disservice to his social class. Our tax code is designed to promote philanthropy. Those that benefited from free markets should acknowledge that meritocracy exists in theory, but that in practice they benefited from their genetics and upbringing, and even after that foundation, extraordinary success is largely correlated with luck. And that it was ultimately the actions of millions of people, which made them successful. They should be humbled by that and do what they can to give back and make the world a better place.
But doing destroy the most effective engine of wealth creation in history, for most people involved, because of feelings. Have some rigor.
>"How about people that were born really smart, is that fair to the rest of us?"
DON'T GIVE THEM IDEAS.
If they're willing to follow the villain's playbook from "Atlas Shrugged" I wouldn't put "Harrison Bergeron" past them.
On Twitter there are a lot of people crowing "you should have voted GOP." They seem to think that if you agree with 25% of their platform you should ignore the other 75%.
I think the point is if you can see past the propaganda for the 25% maybe you can try to see past the propaganda for the other %75. And it doesn’t need to be %100 it just needs to be more than whatever % you have for the democrats.
The ultimate problem is that the California Constitution has created a non-scalable direct democracy. We can hate the player, but this is the game. We are not a bunch of city states in Greece anymore.
The goal needs to be constitutional reform. We could do worse than simply patterning the state government after the architecture of the federal government.
But almost any pattern would be better than our current pattern. I hope the billionaires who have chosen not to leave will help us get there.
This is so helpful. Shared with fellow Californians that may have voted for this.
The Billionaire Tax Act is indeed a horrible proposal. But some kind of taxation on wealth is needed. Two main reasons: (1). Paying your fair share. A big portion of the benefits government provides (courts, police, even infrastructure) accrues to the owners of wealth in proportion to the size of their wealth. And (2). Income from labor (even white collar labor) is likely to become a declining share of the economy. We need better taxes on capital or income from capital in any case as AIs take over. See this for example:
https://rationalreciprocity.substack.com/p/taxing-capital-in-the-21st-century
Taxing wealth has a bunch of issues that taxing transactions does not. I'm quite willing to hear that we should constrain or eliminate the tax-free step-up at death. It's already a measureable event.
>"Paying your fair share."
"Fairness is an argument for idiots and children."
Warning: I don't know what you're doing here, but please do less of it.
People disagree about what a fair share is. Some people may believe that the current amount of taxation is fair.
> Paying your fair share. A big portion of the benefits government provides (courts, police, even infrastructure) accrues to the owners of wealth in proportion to the size of their wealth
That seems fair enough. But nowadays of course, the taxes that you pay scale super-linearly with your wealth (or at least super-linearly with your income), so if we want people to pay their fair share then it will be a lot lower for the rich.
If we wanted to take this argument seriously then we'd note that some benefits that the government provides scale linearly (justifying a flat tax) and some are flat (justifying a poll tax), and we would figure out the proportion of each and land on a solution that's somewhere between flat tax and poll tax.
Tax spending on luxuries. How you define a "luxury" is open to debate. Is a car a luxury? A house? As someone without either, I consider them so.
Spending taxes can be regressive if they are applied broadly. But they can be progressive if their scope is narrowed. Most states use a sales tax for revenue, but exempt things like food. Taxing food is massively regressive. Poor people spend more of their income on food than rich people.
Tax purchases above a certain dollar amount. Tax categories of luxury: expensive imports, high-value cars and houses. Tax yachts, but not small boats.
Just ideas I am throwing out there. Of course, the richest already pay the lions share of the taxes. Is it just to tax them more?
Or, better idea: just spend less. Its always the spending. Libertarians have understood this for decades. Most governments have a spending problem, not a revenue problem. California has lots and lots of revenue. So do the Feds. But their appetite for spending in limitless.
It would be better to tax inheritances than wealth. Inheritances are definitionally unearned.
I find this framing to be basically ridiculous. Inheritance is 100% earned, but by the person giving the inheritance. It's their money, they should get to allocate it to their offspring if they want. Tax it, sure, but it's a very strange world view to me that would allow me to give my money to onlyfans with a minimal tax but that giving my money to my own children should be punitively taxed.
Are inheritances not already subject to estate tax?
> "Paying your fair share. A big portion of the benefits government provides (courts, police, even infrastructure) accrues to the owners of wealth in proportion to the size of their wealth"
Doesn't a flat tax already account for this? EG if everyone is taxed 20%, then billionaires are already taxed in proportion to the size of their wealth?
Yes. A flat tax on *wealth* takes care of it. But be sure that you are taxing the wealth where the wealth lives, rather than taxing the owner of the wealth in whatever tax haven he lives in.
The top 1% earns 22% of all income and pays 40% of all income taxes: https://taxfoundation.org/data/all/federal/latest-federal-income-tax-data-2025/
What is a "fair share"? How much is enough? One could argue that it would be more fair if they were only to pay 22% of all income taxes.
We should not tax wealth, because wealth is investment that increases everyone's living standards. We should tax consumption, which is when resources are taken out of investments and consumed. Progressive consumption taxes are the most efficient and the most fair.
I was initially tempted to make an argument in response to this post that direct democracy is bad, but I don’t think that’s the strongest argument here nor does it get to the root of the problem. Too be sure, as you wrote, CA voters rejected SEIU’s dialysis proposal three times.
Those ballot initiatives came in 2018, 2020, and 2022 - just two years apart! And yet do we not vote for House representatives every two years ? You mention that both sides have had to spend millions of dollars on campaigning, but is not the same true of all political running for office ? Presidential candidates must spend millions, sometimes billions, of dollars every four years.
The article makes it sound like CA is on the precipice of enacting some very bad policy every two years but isn’t the same true of elections ? The people, if they wanted to, could give all 435 House seats to the “Destroy Everything” Party in 2026, and they could do it again in 2028, in 2030, etc every two years. So is America also on the precipice of self-annihilation, or at least enacting really bad policy, every 2-4 years because of regular elections ?
One claim here is that the voters don’t have to expertise to know what is good or bad policy. Everyone knows ballot initiatives are written to be as confusing as possible or in ways that make it sound good to voters so that they will vote for whatever the ballot initiative proposers want. Generally speaking, we could make an argument for a Republic that the voters are smart enough to know that things are bad but not smart enough to know the intricacies of good and bad policies. For example, the voters are smart enough to know the economy is in the dump, or that crime is bad, or that rent is too high, but they aren’t smart enough to know the exact policy which will fix the economy, or reduce crimes, or lower the rent.
Yet experience has cast doubt that the voters are smart enough to know that the economy is bad, or that crime is high, or that the rent is too high. Well maybe not the left own. But the entire vibecession of the last 3 years was arguing that voters think inflation is too high when it isn’t. They want deflation when that would destroy the economy. The voters think crime is high, when, as you recently wrote, it really isn’t. So this cast doubts on the voters’ judgement of even these basic things
Circling back to SEIU, even if CA got rid of the voter proposition system or raised the bar, couldn’t SEIU just go directly to politicians to influence them ? We know billionaires and corporations already do this, so why couldn’t any other large, powerful, and wealthy organization do this too ?
At the end of the day, everyone wants government to enact good policy. As Acemoglu and Robinson argued in “the narrow corridor” democracy is a Sisyphean battle where people are always fighting. If the people have too much power they do dumb policy, and if the rich and elites have too much power, they enact terrible policy for everyone but is good for them ie they create extractive institutions and policies. SEIU is operating like an extractive institution here. Ultimately, however, they cannot be “delenda’d” It can only be fought by people who disagree with their policy. It turns out millions of dollars defeating bad policy is the cost of doing business in democracy
>"Circling back to SEIU, even if CA got rid of the voter proposition system or raised the bar, couldn’t SEIU just go directly to politicians to influence them ?"
Who's to say they aren't already? The ballot proposition approach is just much easier because hoi polloi ignorantly emote about issues.
Direct democracy has the same failure mode as social media: it preferentially amplifies the dumbest ideas.
Democracy is two wolves and a sheep deciding whats for dinner.
Can you at least make an effort to support this claim?
That's just mean. (And bad discussion practice, if its a valid position you should be able to give reasons for your position. - Unless it's axiomatic, but that would be a rather weak first principle.)
Banned for this comment. Out of deference to you having a long history of other good comments and being a paid subscriber, the ban is only for 30 days.
It's probably time to start talking about breaking up California, and it is definitely time to constitutionally ban public sector collective bargaining.
Honestly I don't really know what the upper bound is on what public employees can ask for, union or non-union.
In the private sector, there's a balance because if you pay employees too little, they leave, but if you pay employees too much, you're not cost competitive with other firms and you lose customers.
In public sector, streetlight maintenance, garbage collection, street paving, arresting criminals, etc. are kind of a steady stream of guaranteed work, so what's the disincentive for paying employees high salaries?
It seems like the only disincentive is that the voters might get angry and vote in someone to lower costs. But I think right now California voters are typically going to side with labor. Whether they're unionized or not doesn't really matter.
Warning: please make fewer extreme assertions, more arguments.
Is this in response to this particular post or to a pattern of behavior on my part?
why can't I threaten to relocate to guam state if someone raises my taxes?
we should socialize tax-avoidance
(yes, just a vent-comment. not a serious-engagement comment)
There was a guy in Washington who was famous for launching initiatives for anyone with the money, usually for conservative or business causes. He was pretty successful, until he got caught taking from the pot and was barred from the business. These kinds of "initiative entrepreneurs" are pretty common, I think.
Ron Unz did that before he went off the deep end, motivated by ideology, not money.
https://en.wikipedia.org/wiki/Tim_Eyman
He was a fixture in local politics for a good while. Just some real classic local Republican stuff (derogatory).
"This proposition isn’t being sponsored by some generic group of Piketty-reading leftists."
That's obvious, the actual wealth tax that Piketty proposed was much more sensible.
I agree. I would like to read an in-depth review of Piketty's Capital in the 21st century. To me there wasn't anything leftist in it, other than the author's transparent worry about growing wealth-gaps. The rest seemed like a fine rational analysis of history and financial mechanisms.
The book review deadline is coming up. I'll consider it.
Consider me a reviewer or co-conspirator, if you are interested.
Well, I was going to do "A World Appears" the new book on consciousness research by Michael Pollan. That will be easy. One of Piketty's doorstoppers is another level entirely. I agree someone needs to do it. The deadline's in May, I think.
In Oakland, SEIU 1021 is the largest union of city workers, and 25% of SEIU 1021 members have left the union and are trying to switch to a new union called Oakland Workers United. One of their greivances against SEIU is too much spending on Oakland political candidates, including giving $50,000 to Mayor Sheng Thao AFTER the FBI raided her home in a corruption investigation. SEIU delenda est. https://www.oaklandreport.org/p/20220223-oakland-seiu-decertification
> And there’s a clear path to the latter - as Silicon Valley tires of Trump’s random acts of economic devastation, some tech leaders are starting to regret their flirtation with right-wing populism and wonder whether the other side has a better offer
At the same time, the federal government under Trump is the only force powerful enough to remove socialists from California (and other states) and stop these "democratic" challenges to their power. It seems to me they have more to gain from putting in their lot with the right.
It’s not at all clear to me that that’s true. Why do you think the federal government could stop California from introducing a wealth tax?
...Why couldn't they? What's physically stopping them? They've already threatened to take control of the state. The leadership can be replaced. Those who have the most to lose from leftist policy will welcome them with open arms.
> They've already threatened to take control of the state. The leadership can be replaced.
Gavin Newsom would order state and local police to shoot back.
How many would risk their necks to protect them? California is not a pure blue state. I'm sure many of the officers would love to be given an opportunity to beat in the heads of leftists who threatened their livelihood and prevented them from doing their jobs.
The same question is true for the federal officers, many of whom won't want to get shot for whatever nonsense justification Trump has for trashing the constitution.
Mate, you're the one who suggested that Newsom should betray his oath in order to push your preferred policies. Is it only nonsense if you disagree with them politically? People have their reasons for tearing down this unnatural order of the weak reigning over the strong, something you should be able to sympathize with. The only proof they need of their superiority is their victory.
>Why do you think the federal government could stop California from introducing a wealth tax?
The Interstate Commerce Clause lets the federal government do basically anything.
#NotAllUnions, I've worked with/for some solid ones in the past, but...ugh, shit like this only exacerbates the rate at which whatever love I had for the labour movement withers and dies. Organizing to improve conditions at a private company, working against the short-sightedness of management to forge a stronger business in the long run, yeah, sure, you do you. Running a shakedown racket like some sort of two-bit Huey Long, intentionally becoming a Defect-playing stationary bandit when there's not much ruin left in a nation...yeah, I'll side with the people who already provide more than half the tax revenue (distributed to everyone via normal government processes!), largely by creating goods and services people actively like rather than are forced to purchase, thanks.
It's funny, before I got my current non-unionized job (so before Operation Right Kidney) I was on track to join SEIU as an IHSS worker. They always seemed like friendly folks, looking out for my wages, benefits, and working conditions! Shame it couldn't have been left at that; a union that doesn't get involved in politics seems mostly unobjectionable, but of course the Iron Law encourages these sorts of power-hungry expansion tactics. The temptation is simply too great, the D vulnerability simply too ripe a target not to exploit.
Prima facie this is trivially awful behaviour (in a hilarious kind of way), but I must say that the theme of the demanded concessions being "allow the union to expand into such-and-such hospital" makes it sound ever-so-slightly Robin Hoodish to my ears. Employers banning workers from joining whatever unions they like seems self-evidently villainous to me, so that playing dirty to thwart such restrictions becomes understandable even if not condonable. Am I missing something?
>"Am I missing something?"
Yes, the NLRA stacks the deck for unions over both employers *and* workers.
As someone who left California some two decades ago, and has no plans to return: I say let them. California's government is odious. This sort of thing might actually force the people keeping the lights on to finally vote with their feet. I understand this would impose massive hardships on the people of California, but let's be real here: leaving is an option for almost anyone who isn't incredibly poor (and California's leviathan government is part of what keeps poor people poor.) Nothing would make me happier than to watch Silicon Valley decamp to Texas or some other (tax-wise) fair-weather state. Perhaps Florida? The government of California does not deserve them.
The weather (the actual weather) is lovely; perhaps with a far more limited government, more people could enjoy that weather. California with libertarian government: there's an idea.
I think asking people to leave their friends, family, neighbors, and jobs is pretty toxic.
No one is asking them to.
The problem is that Florida and Texas are both moving away from limited government. Both are full of resentful poors who hate the rich, just for different reasons.
I think California's initiative system works OK for social policies like affirmative action or bilingual education, but not for budgetary policies, like allocating $10 billion in 2008 to build High Speed Rail from Los Angeles to San Francisco. Anything with a substantial dollar number attached to it should be restricted to legislative action.
This doesn't solve the problem though. This merely makes scapegoating easier. Instead of 20 million (or whatever it is) stupid voters to blame, you have a small legislative body, and the guy who drafted the legislation is the favored scalp. Legislators are only too happy to spend other peoples money: it's not their money, and usually they do it in a way to gain goodwill (in the from of votes) from a bloc; yet somehow they never face the consequences of spending all that money on their pet project. There is no referendum on the money spent. You still wind up with barrels of pork. And some asshole with perfect teeth smiling for the cameras.
The problem, as always, is the spending. I would like to see legislation capping the maximum amount spendable on legislation. If it costs too much, too bad, time to work with the private sector.
The issue is that voters are pretty clueless about anything involving arithmetic, while state legislators, deplorable as they tend to be, have lobbyists that they listen to, and the lobbyists at least can do math.
For example, how many voters in 2008 recognized that voting $10 billion to build a High Speed Rail through the transverse ranges and into downtown San Francisco was never going to be the full amount, it was just a down payment on what would likely cost more in the range of $100 billion if it ever is finished?
How do you get the interstate highway system via the private sector?
Thank you for this glorious, feel-good story. I had never heard of Dave Regan before, but as of now I'm a huge fan.
Maybe California ought to get rid of ballot initiatives, or at least make them much harder. Because who knows what kind of bad actors will use bad initiatives to make the world a worse place. But in the meantime, it sounds like Dave Regan is kicking ass and taking names. I'll take it.
Think of it as buying a stable society without angry mobs of pitchforks. You can feel this is unfair or unjust or inefficient or illogical, but in fact history is full of examples of this happening. It also might be rational in a “maximize aggregate utility” sense — if a lot of people have very unhappy lives, then those who like the status quo have some incentive to do something about it, or the unhappy majority will upset the status quo.
Please provide some examples then
There's no such thing as a one time tax, only a tax with undefined frequency. Which should be treated as infinite frequency until proven otherwise.
It seems like you are torturing the human language. In a way that is guaranteed to make communication more difficult.
It's not about language. It's an empirical statement. Temporary taxes become permanent, as a rule.
This is either flat out ahistorical or at best, a tautology. History is full of one time levies and poll taxes. Only if you eccentrically define the next poll tax as the “same” tax, are you able to make the argument. And I think that's kind of abusing the language.
I'm reminded of another classic American canard, “temporary dictatorships are never temporary.” While it's not typical for dictatorial powers to be voluntarily relinquished, it's certainly not unknown. From modern times, Simon Bolivar provides one prominent example. While FDR and Lincoln died at the height of their powers, in both cases, their successors voluntarily gave up emergency powers that had accrued to the American presidency.
Yes it is time billionaires and their sycophant writers and think tanks accept the idea that people would rather see them part with some of their obscene wealth than see the US bankrupt.
This way you can have a less destructive and effective wealth tax, e.g. along the lines you suggest.
If not, it's going to be done very poorly. The rigidity trap is powerful though, historically, people will just not part with their money until they see the guillotine. Let's hope the current barons are smarter.
>If not, it's going to be done very poorly. The rigidity trap is powerful though, historically, people will just not part with their money until they see the guillotine. Let's hope the current barons are smarter.
What makes you think it will be done at all? Billionaires are already moving to Florida, outside of California's grasp. There's no reason to think some socialist revolution is on the horizon. The socialist movement has never been more alienated from the white working-class, and Hispanic working-class voters are more likely to like Republicans or moderate Democrats.
Who's talking about socialism? This is just a tax on outlier wealth. Ok, the question is more: who's trying to conflate the two?
Replace "socialist" with "left-populist anti-billionaire" or whatever it is you call your movement and my point remains the same. "We can do this the easy way or the hard way" only works if you're a credible threat.
But how do you plan to pay for this budget and these debts? Don't you think the richest should pay more?
California has the second-highest state and local tax collections per capita in the country.
https://taxfoundation.org/data/all/state/state-local-tax-collections-per-capita/
It doesn't need any more revenue.
Cut spending. The rich already pay the majority of taxes. The U.S. has the most progressive federal income tax in the world. The only way to maintain current spending would be to massively tax the middle class as Europe does.
It’s flawed but if this is the only way we can tax billionaires I’d take it. 90% going to healthcare services for the public is really not that bad.
The initiative text is a little more specific: that 90% health bucket could be used for things like restoring federal or state cuts, protecting Medi-Cal and other coverage programs, supporting safety-net providers, preventing facility closures, and making payments to providers. The Legislature would still decide the actual appropriations within those limits.
Even if you support a wealth tax, this ballot measure is not the way to do it. The best way would be to acknowledge that tax system is actually fine and it's the inheritance system is a problem (just get rid of stepped up basis). But barring that, the most straightforward way would be to require that people with more than a billion dollars in equity must periodically realize some percentage of their portfolio, perhaps 10% every 5-10 years so as to avoid destroying new companies as soon as they are founded.
This measure is worded in such a way that founders will literally be taxed more than their entire net worth if they suffer unlucky timing (the company value crashes when they have to pay) or if they have a substantial number of controlling shares compared to overall equity. That's not a fringe worry, billion dollar unicorns crash frequently - Luminar, Novavax, Pelton, Nikola all crashed more than 97% in a one year span. As it turns out, stocks do not always go up. Holding a stock is a high risk, high reward bet on the future value of a company. It can backfire very easily. And as far as controlling shares go, investors accept those terms for a reason - they trust the founder to consider the long term health of the company more than they trust other investors. Not every company has to be set up like this, but there is no good reason to effectively ban this arrangement through extremely punitive taxes.
Basically, if this ballot measure passes, Silicon Valley will cease to exist. The current successful founders will stay on top and there will be a severe slowdown in the number of innovative new companies.
Your proposals are no doubt better but I have no faith in them happening and will take a nasty stick at this point. Perhaps it can be seen as a consequence of rigging the system more and more in favor of the ultra wealthy.
Am I really supposed to care about it being unfair to billionaires or Silicon Valley ceasing to exist at this point?
Monopoly and consolidation has already happened.
In what way has the system been rigged in favor of the ultra wealthy? You should care about fairness to billionaires and Silicon Valley ceasing to exist because those are the engines of growth in our economy that improve global living standards. Monopoly has not happened. This proposal is a huge net negative. What advantage would it have at all?
Look at any statistics about wealth accumulation. I find it really hard to take you seriously. Complete lack of awareness of obvious counterpoints to most of what you’re said. Lazy rhetorical debater.
I still tend to the position that extreme wealth disparity is problematic and has a tendency to feedbackloop into evermore extremes (because wealth often accumulates more wealth), to destabilize democracies and to lead to something like the Epstein class and to vastly differing starting positions, which undermines the foundations of liberalism, and that something like Ingrid Robeyns economic limitarianism (https://en.wikipedia.org/wiki/Limitarianism_(ethical) and https://en.wikipedia.org/wiki/Ingrid_Robeyns) ) probably would be an utilitarian net benefit.(Especially if it could be coordinated globally.)
But what would be the case for inequality here? Is it thought to be more productive?
Or is it just a race to the bottom dynamic?
> But what would be the case for inequality here? Is it thought to be more productive?
Let's see:
1. Basically all technological and economic progress is driven by the <10% of humanity
2. This is good for everyone - it grows the pie, improves quality of life, and creates jobs, goods, and services that didn't exist before, and businesses in general are a manifestation of said technological and economic progress
3. Billionaires, ~75% of whom are self-made in America, solved some problem so well for so many people that they created a company so huge and which provides SO much value that they incidentally became billionaires.
4. For every billionaire, there's a company that drove more than 1000x that amount of value to people in the world, in products and services, in jobs, in economic growth, and more
5. Punishing people for solving problems so well for so many people and dragging everyone upwards by some huge amount seems like an a priori bad idea.
Whatever you punish, you get less of - we really want fewer globe-spanning companies lifting our economy up, providing hundreds of thousands or millions of jobs, and solving problems that billions of people are happy to pay to have solved by them?
>lead to something like the Epstein class
I look at members of Epstein's friend group and for the most part I see people who worked hard and contributed to society. Not all of them, Trump is contemptible, but most are good people. It would be bad if I learned that people I admired were actually pedophiles, which I'll keep in mind in case anyone presents actual evidence of that being true.
> But what would be the case for inequality here? Is it thought to be more productive?
A person with a lot of wealth is probably going to be better at maintaining it than a person with no wealth. There's good reasons to think this: many wealthy people have histories of turning non-wealth into wealth, and even those who inherited their wealth usually also inherited genes from those who became wealthy through work.
If the problem with ballot initiatives is low-information voters, why not ensure that all voters are high-information voters? I’m always surprised by the things that politicians and others assume are immutable. Isn’t the lesson to be drawn from recent (last 100 years say) history show us that such assumptions are misplaced?
The broader point (the expected value part from the first half of my comment) also stands. It is weaker, but still there.
>Gavin Newsom cares about the tech industry. And SEIU cares about Gavin Newsom. Governor Newsom has been eyeing the Democratic presidential nomination in 2028. He needs a reputation as a Sensible Moderate and plenty of billionaire donors. And there’s a clear path to the latter - as Silicon Valley tires of Trump’s random acts of economic devastation, some tech leaders are starting to regret their flirtation with right-wing populism and wonder whether the other side has a better offer. If everything goes exactly right, he can make it work. Instead, there’s this wealth tax, coming at the worst possible time. Newsom really, really wants it to go away.
He should pledge not to enforce the tax.
I'm pretty certain that would violate his oath of office as Governor.
Some things are worth violating an oath over.
He's already protecting illegal immigrants, so why not this too?
It seems like this could be at least partially patched by removing the ability to withdraw ballot initiatives - "once the signatures have been gathered, it's the will of the people that it be on the ballot".
This would prevent the extortionate offers to withdraw the ballot propositions, and thus reduce the incentives on SEIU, although there would still be the incentive from "if you don't cave, we will keep doing this over and over".
Another potential fix is to treat "do X or we will put forward a ballot initiative" as criminal extortion, although there are issues with that (in particular, "do X or we will put forward a ballot initiative to do X over your head" seems legit; it's "do X or we will put forward a ballot initiative to do Y" that's the issue here).
There is another similar type of extortion in San Francisco called Community Benefits Agreement.
When my tech company was going to open a new office in a building that was vacant for decades, some Hispanic community groups said they would delay it for years with lawsuits and red tape unless we paid up, and they did agree to pay millions of dollars.
I couldn’t believe that this was legal.
https://en.wikipedia.org/wiki/Community_benefits_agreement
Incredible. I'm now convinced we will have to fight a war without end against the unions. It will not be enough to cripple them but they must be destroyed such that there's no chance of them forming again.
It's really not so much "the unions" as it is the NLRA giving them monopoly-forming abilities they shouldn't have.
And what's to stop the NLRA from being enacted again? The only way to permanently rid the country of unions is to stop labor from organizing in any capacity.
Odd question. What stops any bad law from being enacted? If you're in a position to repeal the NLRA on the basis of learned lessons, you're also in a position to pass a better law.
Ridding the country of unions shouldn't be the goal. For one thing, the USA tried that before - it was very bloody and it *did not work*. And the unions can and sometimes do serve an actual purpose in advocating for workers.
> What stops any bad law from being enacted?
Not giving the people who would advocate for such laws political agency, either by disenfranchising them or removing them from the country outright.
Well, we can begin with that. The Commerce Clause justification is ludicrous
I am not really understanding the hostility to the union that this provokes.
I'm assuming that everything you've determined about the actions of SEIU are in fact correct. And I'll even stipulate (though I don't believe it at all) that losing the billionaires would be a terrible blow to California.
I still don't see that SEIU's conduct is much more blameworthy than, for example, Amazon's, or some hedge fund, or any other beast in the legal person bestiary. Yes, the union is playing a dirty political game in order to advance its own ends... that's what it's supposed to do.
I feel like billionaires achieved their billionaire status by playing some pretty dirty political games as well. At the very least, a union by its nature exists to help a group of people, and not just one.
Of course, plenty of people have written books excoriating Bezos et al. for all they've done wrong. An odd blog post excoriating this union is hardly the end of the world. I think it's just... perhaps it's this: everyone seems to accept that billionaires will play a crooked game to advance their personal wealth. We shrug and say, cost of capitalism. It's a problem, but one we have to live with (and contain through the power of democracy and rule of law). But when a union plays a crooked game on behalf of working people, that's unexpected, and beyond the pale, and must be destroyed.
I suggest that the machinations of unions are just as much a product of the capitalist system - with which you seem to agree in the post - and therefore should be met with just the same shrug. Perhaps you are, and I'm misreading the tone. This post doesn't feel very shruggy.
Ultimately, I hope Newsome is a good enough politician to defeat this political threat, and go on to hurt the Republican Party so badly that they reform into a functioning organisation rather than a funnel for nutbags. If Newsome isn't good enough to see off the threat from a local union, perhaps he's not man enough for the bigger job.
> I still don't see that SEIU's conduct is much more blameworthy than, for example, Amazon's, or some hedge fund, or any other beast in the legal person bestiary.
Those people are growing the economy. SEIU is not. This is what this all boils down to. If those people were engaging in anti-competitive practices, they would be just as blameworthy. But they aren't. As long as the pie grows, why would it matter how many people get burned?
"I still don't see that SEIU's conduct is much more blameworthy than, for example, Amazon's, or some hedge fund, or any other beast in the legal person bestiary."
And?
One could easily frame it as those others are as blameworthy -- if true -- and bust them all.
Yes, that's fair. But no one is busting billionaires - they're getting richer and distorting the politics of developed countries. Whereas union busting is an actual ongoing problem.
Moreover, I think unions are very good for the economy. Unlike Jimmy above, who thinks that billionaires "grow the economy", I note that there have always been billionaires (massive landowners); but the world economy really took off in the 20th century when unions briefly had an important place in it. So I actually think it would be much better to bust the billionaires than to bust the unions.
Questions of whether their existence are good are not relevant to whether their practicing blackmail is good.
Also, conflating landowners with modern-day billionaires is silly, because we can all see that the world economy took off only when owning land ceased to be the major portion of their property.
"Whether...good"
Legal persons can't be good or bad. Morality is for humans. I don't think we should blame companies for being rapacious - we should simply legislate to prevent that rapacity from damaging too many people. Similarly, a union should not be blamed for playing the legal and political game. If the union's actions appear to be destructive, then those actions should be prevented by changing the rules of the game. But a union is just a piece of paper. Assigning moral qualities to it is the mistake that I'm pointing out (I'm not sure if Scott makes this mistake).
Landowners vs billionaires
This is a more interesting historical point. But I think it misses the causal chain of events. I agree that the world economy took off when new forms of wealth were invented. But I think that happened precisely because of increasing participation, the extension of political rights, and the general enrichment of the population, which meant that rich people stopped doing business and culture purely within a tiny circle of their inbred friends.
I'm no historian, and I could be wrong.
"Legal persons can't be good or bad. Morality is for humans."
Non-sequitur. This legal person is clearly the agent of humans.
"I agree that the world economy took off when new forms of wealth were invented. But I think that happened precisely because of increasing participation, the extension of political rights, and the general enrichment of the population,"
Impossible. The Industrial Revolution came first.
History is big and complex, and there's no one thing that "came first".
For example, in Britain we learn about the agricultural revolution and industrial revolution as a pair of linked events. The agricultural revolution brought a wave of urbanisation, and created new forms of civil society. This was also the Enlightenment, when... all sorts of things were happening.
As I say, I could be wrong about this. But what you're saying sounds a bit too simple and absolutist, and I can't see that it makes a strong argument against what I was suggesting.
I'm glad I'm not in the position of contemplating spending a hundred million dollars for the fourth time vs. wondering how much gasoline and matches I could buy with that money.
Why don't we tax when the billionaires take out the loans against the collateral? Treat it as a gain, and then when they pay it back, they get a tax credit. That way revenue is happening now instead of much later (or not at all if they evade the taxes upon death.)
Because that would be taxing them twice on the same income. Once when they take out the loan, and again when they earn the money to pay back the loan. Which is a thing even billionaires have to do.
And because if we're even pretending that we're being fair and not going all in on class warfare, we'd have to do the same thing when a family e.g. takes out a home equity loan to pay for remodeling or for their kid's college education or to start a business or whatever.
Is it really taxing twice? Those same assets get sold later instead of sooner, but it's still the same amount of taxes in the end (as long as the step-up doesn't happen at death in your scenario). The loan gets paid back and the taxes are essentially returned, replaced by the sold assets' taxes.
It IS a tax dodge to take out a loan instead of selling something. As a landlord with two rental properties, I have low-cost loans that give me untaxed capital that I can use for whatever, while deferring taxes on the paper gains in perpetuity (as long as I don't try to realize those gains by selling the property outside of a 1031 exchange.) This seems unfair.
I wouldn’t say this is so much a bug of direct democracy as it is the natural and unavoidable outcome. SEIU didn’t discover the problem, they’re just a high-profile exploiter of it https://jeremyl.substack.com/p/direct-democracy-is-undemocratic?r=74nn5&utm_medium=ios
A similar issue involved American Medical Response (AMR) getting a ballot measure passed to avoid hundreds of millions of dollars in back-pay.
California has a labor law I happen to disagree with which requires that employees working so long of a shift to get a half-hour meal break. AMR took the view that as long as they could find a 30 minute period in an ambulance shift where someone didn't have any work assigned they'd complied.
The government disagreed, arguing that the meal break needed to be forward-looking. That is, you needed to know that you would have half an hour in which you could heat up your lunch and eat it in peace. This meant over a hundred million dollars in costs for AMR.
So they put a ballot measure up claiming that your grandma having a heart attack would be left to die so that paramedics could sit on their ass and eat lunch. Which has never happened. (and for complex reasons never would happen) And, if California has stupid laws, paramedics should get to benefit from them as well.
But the measure passed. Because there's a suicide epidemic among first responders and everybody things that they get paid too little for the work they do. But heaven forbid they have an opportunity to eat a health lunch (instead of just being lectured about how healthy habits are important but never get an opportunity to actually eat healthy food).
One on hand, was disgusted to read this and go over to the breakroom to discover my hospital's employee union is SEIU. On the other hand, for some reason us pharmacists, and only pharmacists, are non-union here, like even our pharmacy technicians are union.
And so the eternal game of whack-a-mole which we play against Moloch's hierophants rolls on.
Why dont policy wonks with all our brilliant ideas try to pull to the same trick? Where's the "save the environment" proposal which is a thinly veiled "ban all zoning and allow California forver to exist" amendment?