Continuations

Senator Elizabeth Warren yesterday proposed a wealth tax. It is a way of dealing with the rising inequality issue that I also discuss in World After Capital. I propose a longer term way of getting to a similar place via demurrage, but I am supportive of a wealth tax. I believe it will have to be broad based though and include all large accumulations of wealth, including in trusts, foundations, endowments and all other pools that don’t have clear existing offsetting obligations (such as pensio...

The discussion around taxing wealth, and in particular billionaires, has been illuminating. Not in the sense of learning something new but rather seeing who is willing to make or defend bad takes instead of engaging in any level of critical thinking. To make it clear on where I am on this issue, I am in support of a wealth tax, although I think there is a lot of room for discussion on how to best accomplish this. There are a few takes out there though that particularly bother me. The first is...

The latest Senate version of the “Tax Cuts and Jobs Act” has a stab in the eye for startups. It proposes to tax certain stock options and RSUs at the time of vesting. An earlier House version also contained this provision, but the House removed it. Startups are a key part of innovation. Often joining a startup means accepting a lower cash compensation for a higher potential upside. This upside usually comes in the form of stock options or other stock based compensation such as restricted stoc...

My partner Fred has come out in support of taxing carried interest as income instead of capital gains. I agree with Fred’s position because I do not believe that this change will result in less investment in startups. Taxes generally cause distortions and as a first approximation, taxing something at a higher rate tends to lead to less activity. Sometimes that is the desired outcome. For instance, if the US were to tax CO2 emissions we would expect to see companies attempt to reduce their emi...

I have written in the past about how having richer information channels is letting us overcome various historic dichotomies. For instance we had to distinguish between private and public companies because disclosing information was costly. We relied entirely on the signaling of degrees, but now in many fields people can easily show their work directly. The worker-contractor distinction is similarly the result of not having enough realtime information sharing. There was a time when the overhea...