Inequality in your country has risen dramatically the past 30 years. That's what your legislators are trying to address. A lot of value is created in the early stages. Should that be exempt? Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society.
Undue† wealth inequality is tied to the sort of rent-seeking that this tax will enable. Given the inordinate ways to classify and exempt movable property from a wealth tax (even greater than the existing insanity in income taxes), it is essentially inevitable that this will invite more lobbying and corruption, net more rent-seeking, and compound existing inequality.
† vs. inevitable/natural wealth inequality, associated with real disparities in productivity and the nature of sampling individuals on a widening curve
This is sadly true, but we have to fix our libertine taxing authority and corporate law in any case. These are assets that are not adding to overall societal welfare, so I would rather criminalize and tax the thing society needs to change rather than the gains to productivity being taxed in the current system.
> Remember, companies don't exist primarily to pay back investors, their first objective is to contribute to society.
If a company does pay back investors, that almost always means that it has contributed to society on net. Let me explain.
If people don't pay for a company's products, that company will go out of business. Unlike a government, a company has little coercive power. If I refuse to use Facebook, Mark Zuckerberg can't send men with guns to my home and force me to create an account. Even companies that benefit from network effects (such as social media companies) must build compelling products that people want to use.
Now one could claim that most people are mistaken in what they want, or that they lack the knowledge to understand what they're really getting into, but that would also mean that you disagree with the notion of democracy (since those same mistaken, ignorant people will pick the policies and leaders that control our lives).
There are only a few ways that a company can capture value without creating it. The first is fraud, which is illegal. The second is coercion. That means using violence (or the threat of violence), blackmail, or if they lean upon the state to coerce people. This is usually illegal, though there are some exceptions such as patent trolls. The third way is if they create negative externalities. For example: if I buy a car from a car company, I am better off but everyone else is slightly worse off from the pollution I create and the increased risk of being run over. The way we solve externalities is through insurance and taxes. If I'm required to have liability insurance for my vehicle, and I'm required to pay taxes based on how much my vehicle pollutes, then I pay the costs of my externalities and am properly incentivized to alter my behavior. Perhaps I drive less than I otherwise would. Perhaps I buy a vehicle that pollutes less.
As long as we ensure that parties pay the cost of the externalities they create, we can be confident that any profitable firms are creating more value than they capture. That means they're a net benefit to society.
Of course if we follow this logic, this means that some rather ridiculous firms are beneficial to society. Is World Wrestling Entertainment, Inc beneficial to society? As far as I can tell, WWE is a way to get people to pay outrageous amounts of money to watch roided-out actors pretend to fight. But if WWE pays for their externalities (such as actors' medical bills), who am I to judge? Everyone involved knows what they're getting into and consents. So what if I think the whole enterprise is a colossal waste of time and resources? I'm sure those people think the same of some of my interests.
The alternative to this is a world in which the majority decides for everyone what is beneficial to society or not. Considering the competence of the average voter (and the competence of our government), I'd prefer to err on the side of non-intervention.
> If I refuse to use Facebook, Mark Zuckerberg can't send men with guns to my home and force me to create an account. Even companies that benefit from network effects (such as social media companies) must build compelling products that people want to use.
If this was 2008 you may have an argument. It isn't and in 2020 I have no choice about using Facebook. Even if I delete my account I am still their product just by virtue of being on the web. Or existing.
Last year I was tagged in a photo from a camping trip by a person I met on that trip. That person's brother's girlfriend used to work with a guy I know from a totally different circle of people. He asked me about my camping trip because FB made the connections just based on who is in the picture.
I don't need a FB account for this to be possible, deleting my account doesn't prevent this.
Zuckerberg doesn't need to send goons to my house. He already has surveillance on my camping trips.
> As long as we ensure that parties pay the cost of the externalities they create, [...]
Right but we don't do that. The rest of your argument collapses when this assumption doesn't hold.
> The alternative to this is a world in which the majority decides for everyone what is beneficial to society or not.
You mean like a democracy?
> Considering the competence of the average voter (and the competence of our government), I'd prefer to err on the side of non-intervention.
Woah so who gets to make choices for the unwashed masses?
> Last year I was tagged in a photo from a camping trip by a person I met on that trip. That person's brother's girlfriend used to work with a guy I know from a totally different circle of people. He asked me about my camping trip because FB made the connections just based on who is in the picture.
First, most of your ire should be directed at whoever uploaded the photo to Facebook. Second, please notice how far afield you had to go to try and shape this conversation into "Facebook is coercing me": a friend asked you about your camping trip.
Compare that to what happens if you don't do things that the government wants you to do. If I don't go to jury duty, men with guns will come to my home and put me in a cage. If I don't pay 40% of my wages to the government, men with guns will come to my home and put me in a cage. Even though I object to how that money is being spent (such as bombing people in the middle east or developing ever more horrifying weapons of war), I am coerced under threat of violence into funding such atrocities.
But please go on about how terrible it was that your friend asked you about your camping trip.
> You mean like a democracy?
Should a democracy vote on which vehicle we must all drive? Which movies we must all watch? Which jobs we must work? Of course not. Likewise for which businesses each of us patrons. The crowning achievement of our constitution isn't the form of representation (which mostly serves to prevent violent revolution), but the concept of human rights: No matter how much people want to vote for it, the government is forbidden from doing certain things to you.
When corporations effectively control customer choice and eliminate competition, then yes, a democracy should break up the corporation to restore a level playing field. US anti-trust laws that were fairly applied in the past are not being applied today. This is a position independent of whether a wealth tax is applied or not. Big companies have become far too big with mergers and anti-competitive practices - they need to be broken up - for the very health and continuance of precious capitalism.
> It sounds like you're saying that profit is all that matters and you can't contribute to society without making a profit.
Those who advocate for a wealth tax seem to only care about money too, don't they? Why taxing wealth in particular? How about "taxing" beautiful and healthy? There's a huge prettiness gap in this country.
I simply argued that in a system where certain failure modes are ameliorated, a company that creates more value than it captures is a net benefit to society.
If I argued that strawberry cake was a net benefit to society, would you dismiss my views as "all that matters is strawberry cake and you can't contribute to society without making strawberry cake"? Of course not. So too for economics.
The facebook not forcing you to create account does not sound that good on a day when they force Oculus users to log in with one. Unless you live totally off the grid you are forced to interact with corporations and at every turn they have more power.
They are usually fine. The inequality was way higher for most of the history and hungry peasants are no match for the army. We just remember the cases when the revolution won because it’s a good story. And the result was usually worse conditions for the poor.
I’m afraid that social equality peaked in XX century. Automation makes imposing social order so much easier, we might be stuck with this one for a while.
Those hungry peasants weren't educated. You have far more bright people in the 99.9% today than in the 0.1% cream at the top.
Unless you decide on complete and utter genocide, An Army is utterly no match for clever people who will utilise every inch of their ingenuity in guiding riots, carrying out guerilla warfare with committed assassins targeting the 0.1% (and their families).
And a nation who chooses to kill its citizens 'en masse via its military forces will not be a nation for very long. There will be civil war.
Without shared prosperity, a nation will shatter very soon. A revolution doesn't need to "win" for the prosperous to loose their lives by the million-fold.
My €0.05