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Income Inequality

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^You used to be able to value companies using a multiplier of EBITDA+assets, but since too many people on Wall Street give a free pass to long-term unprofitable companies with almost no assets that people "like" it became much more complex. That's how all those other methods came to be developed. Wall Street is very good at making its own industry larger.

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2 hours ago, Brutus_buckeye said:

The key point is that wealth tax is a taking of property (in this case economic capital) that was earned legally, already taxed by the government on the income side, and belongs to the person who legally earned it.

 

Bill Gates is a billionaire because of what he owns, not what he does.  Charitably, he had some good ideas 30 years ago (some may say he stole them).  His enormous fortune is because of the stock he owns, not because he's actively creating value.  He passively sucks up value from the working class.  He's not earning anything, he's collecting it because he owns something he built 30 years ago.  It's not all that much different than an heir getting a large sum of money from something a previous family member created.

 

But we can't have an honest discussion about any type of tax changes - be it a new wealth tax, the return to pre-Reagan tax brackets, an increased capital gains tax - because conservatives have "Grover Norquist'd" their brains for over a generation.


Very Stable Genius

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2 hours ago, Brutus_buckeye said:

Taking economic talking points from crazy Bernie only contributes to the dumbing down of society. I suggest you hitch your horse to someone not so crazy.

 

Btw, not taking talking points from Bernie (haven't even read too much into his version of the wealth tax or any other tax increases he might be proposing) but thank you for the ad hominem attack.  🙂


Very Stable Genius

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2 hours ago, Brutus_buckeye said:

The estate tax was shown to generate little to the treasury in the form of taxes and was solely meant to be redistributive. It is troubling in that manner

 

 

Taxes are not only valuable for filling the treasury, they are equally or more valuable for encouraging particular behavior.  That's what tax breaks do, that's why there is a "charitable deduction" -- to encourage charitable giving.  The estate tax and the gift exemptions encourage people to give their money away while they are still alive, and to limit the accumulation of wealth in families and the effects of such accumulation of wealth on society.

 

If you're against any estate tax are you against everyone having to pull themselves up by their own bootstraps?

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32 minutes ago, DarkandStormy said:

 

Bill Gates is a billionaire because of what he owns, not what he does.  Charitably, he had some good ideas 30 years ago (some may say he stole them).  His enormous fortune is because of the stock he owns, not because he's actively creating value.  He passively sucks up value from the working class.  He's not earning anything, he's collecting it because he owns something he built 30 years ago.  It's not all that much different than an heir getting a large sum of money from something a previous family member created.

 

I agree with some of that, but would argue you're omitting a very important section. Gates is not just collecting vast sums of money via investments (which I would say he has earned, since that's a by-product of his taking on risk in the first place), but is also redistributing a truly enormous amount with no real personal financial benefit.

 

Maybe he is bypassing the (American?) working class indirectly, but Gates is directly sending wealth  to low income and working classes via grants, endowments, etc,  in developing countries. Do we need the government taking that role then? It seems redundant. 

 

And as for the poster who made that crazy Bernie comment, eh, no reason to engage with someone like that. They obviously offer very little to conversation.

Edited by TBideon
omitted a few words

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2 hours ago, GCrites80s said:

The people deciding where the money goes is better than individual rich people choosing where it goes through NGOs.

But it is not your money. That is the key point. If I said I want to give $1000 of your money to Ohio Right to Life, you may have a problem with that. This is no different. The "People" are ganging up to take what he has justly earned and already paid taxes on.

 

2 hours ago, Gramarye said:

 

This argument proves too much, though.  You could make that argument for every kind of tax.  Income tax ... who owns your labor, you or the government?  Property tax ... who owns your house, you or the government?  Sales tax, franchise tax, VAT, tariff ... who owns your trade or business, you or the government?

Well, if you look at the history of taxation and the justification for it (by most groups, not all), it was to raise revenue to fund public goods. That would mean, government operations, military, police, fire, infrastructure, schools, etc. The idea was it is a shared goal of every citizen to contribute because it was the most efficient way to fund the public use and public goal that benefits everyone. The capital belongs to the individual, but they are paying for the services used and provided. Call it a tax or a fee you pay on income earned to cover the expenses. While it may be a coerced fee, at the end of the day, the paradigm of the people keeping their capital and then giving it to the government remains in tack. You have a choice to keep your income steady to prevent future tax obligations, and you have a choice to deploy your wealth in manners that you personally see fit. It is an individual liberty argument. 

 

The wealth tax works counter to that because it is essentially punitive. It is a tax on the rich solely intended to take money that the government feels is not being allocated according to the government's wishes, the government can take it from you. If you have more than the government desires, they can take it from you to create some arbitrary level that the powers that be feel everyone should live under. The fact that you have a few powers that be deciding how you spend your wealth should be concerning to everyone.  

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1 hour ago, DarkandStormy said:

 

Bill Gates is a billionaire because of what he owns, not what he does.  Charitably, he had some good ideas 30 years ago (some may say he stole them).  His enormous fortune is because of the stock he owns, not because he's actively creating value.  He passively sucks up value from the working class.  He's not earning anything, he's collecting it because he owns something he built 30 years ago.  It's not all that much different than an heir getting a large sum of money from something a previous family member created.

 

But we can't have an honest discussion about any type of tax changes - be it a new wealth tax, the return to pre-Reagan tax brackets, an increased capital gains tax - because conservatives have "Grover Norquist'd" their brains for over a generation.

Bill Gates became a billionaire because he developed a product that was best in its class for a while and built a company around it. Did it reach the point at one time where the value of the company was more than his individual labor? Of course it did. But, he was able to reinvest his capital back into the company to keep it growing and forgo paychecks when others were out enjoying themselves with their earnings. He saved, he invested and saw it grow. He should be allowed to reap those fruits of his investment. 

You look at it solely from the vantage point of what Microsoft is today and you feel he is too rich and does not deserve what he has. Whereas, if you looked at it from the sacrifice he made 40 years ago when the company was worthless, you can certainly be more apt to reward him for his sacrifice.

 

It is not about some liberal invented boogeyman called Grover Norquist it is about human nature

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1 hour ago, Brutus_buckeye said:

Bill Gates became a billionaire because he developed a product that was best in its class 

 

Because software is a lot like the record or movie or publishing business.  It costs X to record the record or film the movie or write & edit the book.  Then the money rolls in because they can be scaled mechanically.  

 

Software is even easier - the per unit cost of making Windows back in the 1980s and 90s was like $2 and now it's down to zero.  And you get to charge WAY more for it than a music CD or a movie ticket or a book.  

 

He was in the right business.  He wasn't any smarter than any of the top guys in any of those other businesses, or the guy who owns a chain of oil change places or a few Great Clips franchises.  

 

 

Edited by jmecklenborg

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2 hours ago, TBideon said:

I agree with some of that, but would argue you're omitting a very important section. Gates is not just collecting vast sums of money via investments (which I would say he has earned, since that's a by-product of his taking on risk in the first place), but is also redistributing a truly enormous amount with no real personal financial benefit.

 

Bill Gates retired a few decades ago to give his money away to good causes of his choosing.  And today he is worth far more than when he retired.  Which tells me he's not giving enough away and he's not sufficiently taxed -- see The Deficit, underfunded national road-and-bridge-maintenance, etc.

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41 minutes ago, jmecklenborg said:

He wasn't any smarter than any of the top guys in any of those other businesses, or the guy who owns a chain of oil change places or a few Great Clips franchises.

 

I don't know; being an innovative coder is pretty brainpower-intensive. He might not be/have been that business-savvy, if that's what you mean. But business savvy is more common than paradigm-setting software creativity, even if recent hardware advances are such that there's low-hanging fruit for software development. I'll give you that he was lucky to have the right skillset at the right time to capitalize on it to such a massive degree.

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^He bought DOS.  He didn't write it.  


 

Quote

 

When IBM introduced the IBM PC, built with the Intel 8088 microprocessor, they needed an operating system. Seeking an 8088-compatible build of CP/M, IBM initially approached Microsoft CEO Bill Gates (possibly believing that Microsoft owned CP/M due to the Microsoft Z-80 SoftCard, which allowed CP/M to run on an Apple II).[3] IBM was sent to Digital Research, and a meeting was set up. However, the initial negotiations for the use of CP/M broke down; Digital Research wished to sell CP/M on a royalty basis, while IBM sought a single license, and to change the name to "PC DOS". Digital Research founder Gary Kildall refused, and IBM withdrew.[3][4]

 

IBM again approached Bill Gates. Gates in turn approached Seattle Computer Products. There, programmer Tim Paterson had developed a variant of CP/M

-80, intended as an internal product for testing SCP's new 16-bit Intel 8086 CPU card for the S-100 bus. The system was initially named QDOS (Quick and Dirty Operating System), before being made commercially available as 86-DOS. Microsoft purchased 86-DOS, allegedly for $50,000. This became Microsoft Disk Operating System, MS-DOS, introduced in 1981.[5] Within a year Microsoft licensed MS-DOS to over 70 other companies,[6] which supplied the operating system for their own hardware, sometimes under their own names. Microsoft later required the use of the MS-DOS name, with the exception of the IBM variant. IBM continued to develop their version, PC DOS, for the IBM PC.[5] Digital Research became aware that an operating system similar to CP/M was being sold by IBM (under the same name that IBM insisted upon for CP/M), and threatened legal action. IBM responded by offering an agreement: they would give PC consumers a choice of PC DOS or CP/M-86, Kildall's 8086 version. Side-by-side, CP/M cost almost $200 more than PC DOS, and sales were low. CP/M faded, with MS-DOS and PC DOS becoming the marketed operating system for PCs and PC compatibles.[3]

 

 

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2 hours ago, Brutus_buckeye said:

Bill Gates became a billionaire because he developed a product that was best in its class for a while and built a company around it.

Was MS  really ever "best" at anything, or just the most ferociously marketed? I could see a VHS vs. Beta similarity where I remember most saw Beta as the better product.

 

I've been "wowed" by Apple quite a few times. MS was always just standard. 

 

Anyhow, lots of good points made on both sides today. 

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1 minute ago, surfohio said:

Was MS  really ever "best" at anything, or just the most ferociously marketed? I could see a VHS vs. Beta similarity where I remember most saw Beta as the better product.

 

I've been "wowed" by Apple quite a few times. MS was always just standard. 

 

Anyhow, lots of good points made on both sides today. 

 

Oh, that's just how the Right frames things. Anything that sells the best IS the best, no matter what. Like Nickelback.

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1 minute ago, GCrites80s said:

 

Oh, that's just how the Right frames things. Anything that sells the best IS the best, no matter what. Like Nickelback.

LOOK AT THIS PHOTOGRAPH.....yeah that'll be in my head all day.

 

Thanks, you demon!!!!

Edited by surfohio

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1 hour ago, Foraker said:

 

Bill Gates retired a few decades ago to give his money away to good causes of his choosing.  And today he is worth far more than when he retired.  Which tells me he's not giving enough away and he's not sufficiently taxed -- see The Deficit, underfunded national road-and-bridge-maintenance, etc.

He was also worth 100 billion dollars in 1999. At an average inflation rate of 2.2 percent a year, that would be in the $150 billion dollars range in 2019 dollars, whereas he's worth $106 billion today. And so he's down 50 percent from his "real" peak net worth, or has made a 6 percent return in twenty years.

 

Either way, stats are fun - but somewhat easy to manipulate.

Edited by TBideon
added content

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1 hour ago, GCrites80s said:

 

Oh, that's just how the Right frames things. Anything that sells the best IS the best, no matter what. Like Nickelback.

 

You've got a lotta nerve to say you are my friend
When I was down you just stood there grinnin'
You've got a lotta nerve to say you got a helping hand to lend
You just want to be on the side that's winnin'

 

 

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On 9/30/2013 at 3:45 PM, X said:

^agreed, I didn't even touch on the fact that it is largely other CEO's on those compensation committees.  If pizza delivery boys got to "consult" to determine what other pizza delivery boys were paid, our pizzas would come delivered to us in Porsches.

 

^^^Unfortunately, CEO pay doesn't correlate very well with corporate performance across the field, and their pay growth is well outpacing corporate profits, which are outpacing GDP, which is outpacing wages.  There is clearly a market breakdown.

 

A CEO should not be on a comp comm since his salary is determined by said board.  A non CEO Ex and two independent directors should be on the comm.  The CAO should be apart of the board.  I'm pretty sure the NYSE/NASDAQ and and congressional act have some outline/guidelines of board members. 

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12 hours ago, Brutus_buckeye said:

1) Shouldn't he have a choice what he does with his property? After all, he made the money, it is his personal property?    

 

good idea yes GIF by Robert E Blackmon

 

Exactly.  I find it strange that someone else has an opinion on how another persons money should be managed.

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10 hours ago, GCrites80s said:

^You used to be able to value companies using a multiplier of EBITDA+assets, but since too many people on Wall Street give a free pass to long-term unprofitable companies with almost no assets that people "like" it became much more complex. That's how all those other methods came to be developed. Wall Street is very good at making its own industry larger.

But even using EBITDA+assets is still fluid. In some years the value of a company would trade at X times EBITDA and other years it would be Y or Z. Point being, the value of a business is ultimately what someone is willing to pay for it at that given time.

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9 hours ago, GCrites80s said:

January 1 in the absence of sell dates. The IRS isn't stupid.

Its not like the stock market though where you have an efficient market. The arbitrary value assigned to the business at 1/1 is still not what it would sell for. I imagine if there is a wealth tax, you will see a rapid devaluing of asset.

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On 11/7/2019 at 9:58 AM, Brutus_buckeye said:

1) Shouldn't he have a choice what he does with his property? After all, he made the money, it is his personal property? Whose right of yours or the government's is it to confiscate that property that he has already paid taxes on?

 

2) The wealth tax in theory is rooted in jealous towards the rich and ultimately undermines the entire concept of freedom and property rights for which our nation was founded. It entirely changes the paradigm of personal property. With a wealth tax, you essentially have the government own the capital and have full control over the capital. They can take what they want from whomever they desire as they please. Capital ultimately is owned by the government and distributed as the government sees fit to caretakers. This flips the entire system of personal property upside down.   

His property was made using anti-competitive, monopolistic practices. In a true free-market system he should not have been allowed to create a monopoly which is the opposite of a free market. So now that he amassed a fortune by unethical practices, I'm supposed to feel sorry for him having to pay some taxes. Cry me a river. 

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It was a good thing that he got most people worldwide under one system. In 1985 you had such a wild mix of machines that didn't talk to each other very well. The IBM, Commodore, Atari 8-bit, Apple II, BBC Micro, Coleco ADAM, ZX Spectrum, MSX, TRS-80 and T.I. 99 didn't work much alike at all and had vastly different user bases -- that's just in the West. If you know the characteristics of those various machines it makes your head spin. Japan's computers couldn't work with ours at all. But universal compatibility didn't have to be done with a monopoly.

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27 minutes ago, freefourur said:

His property was made using anti-competitive, monopolistic practices. In a true free-market system he should not have been allowed to create a monopoly which is the opposite of a free market. So now that he amassed a fortune by unethical practices, I'm supposed to feel sorry for him having to pay some taxes. Cry me a river. 

He did it using the rules that were there at time. Tax his income that is a completely different argument to have. Tax the wealth is an issue that changes the paradigm because it is essentially saying the government can take your money if they don't like what you are doing with it (saving vs spending) or if they feel there is a higher and better use for it. THat is far different than a debate over what the income tax rate should be and why wealth taxes are immoral, and have pretty much failed in every other place it has been implemented.

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16 minutes ago, GCrites80s said:

It was a good thing that he got most people worldwide under one system. In 1985 you had such a wild mix of machines that didn't talk to each other very well. The IBM, Commodore, Atari 8-bit, Apple II, BBC Micro, Coleco ADAM, ZX Spectrum, MSX, TRS-80 and T.I. 99 didn't work much alike at all and had vastly different user bases -- that's just in the West. If you know the characteristics of those various machines it makes your head spin. Japan's computers couldn't work with ours at all. But universal compatibility didn't have to be done with a monopoly.

 

You forgot Tandy.  But I believe they were basically just IBM. 

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17 hours ago, TBideon said:

He was also worth 100 billion dollars in 1999. At an average inflation rate of 2.2 percent a year, that would be in the $150 billion dollars range in 2019 dollars, whereas he's worth $106 billion today. And so he's down 50 percent from his "real" peak net worth, or has made a 6 percent return in twenty years.

 

Either way, stats are fun - but somewhat easy to manipulate.

 

I was responding to your claim that Bill Gates was

Quote

redistributing a truly enormous amount with no real personal financial benefit.

 

How do you suppose Bill's life has changed by having a net worth of $106B vs. a net worth of $150B?  Truly, not "enormous." 

 

No one is crying.  Certainly no teacher, nurse, carpenter, plumber, fireman, police officer, soldier, sailor -- you get the picture.

 

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Just now, jmecklenborg said:

 

You forgot Tandy.  But I believe they were basically just IBM. 

 

Tandy was an "IBM-compatible". I always wanted one since they had 'em set up at Radio Shack (which was a place everyone literally had to go at least once or twice a month) but my folks just told me to use the Apple IIs at school that were so boring by 1991. The TRS-80 was also a Tandy.

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1 hour ago, Brutus_buckeye said:

He did it using the rules that were there at time. Tax his income that is a completely different argument to have. Tax the wealth is an issue that changes the paradigm because it is essentially saying the government can take your money if they don't like what you are doing with it (saving vs spending) or if they feel there is a higher and better use for it. THat is far different than a debate over what the income tax rate should be and why wealth taxes are immoral, and have pretty much failed in every other place it has been implemented.

And those rules are created by Rick lobbyists. So if Warren gets her way, the wealth tax will be the rules. 

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The Tandy 1000 we had (no hard drive) had "MS-DOS", not just DOS, and "MS PAINT".  Yes, the very first Microsoft Paint.  I drew about 25 things with that and they would be total gems to recover today, but I'm sure it's in the Rumpke landfill.  I remember spending a ton of time drawing The Pyramids at Giza.  

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55 minutes ago, jmecklenborg said:

The Tandy 1000 we had (no hard drive) had "MS-DOS", not just DOS, and "MS PAINT".  Yes, the very first Microsoft Paint.  I drew about 25 things with that and they would be total gems to recover today, but I'm sure it's in the Rumpke landfill.  I remember spending a ton of time drawing The Pyramids at Giza.  

 

You got look up 8-bit guy on Youtube.

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1 hour ago, freefourur said:

And those rules are created by Rick lobbyists. So if Warren gets her way, the wealth tax will be the rules. 

 

That may be the case, but there is something inherently unfair about taking someone's rightfully earned property.

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Just now, Brutus_buckeye said:

 

That may be the case, but there is something inherently unfair about taking someone's rightfully earned property.

There is also something inherently unfair in the way Gates amassed his fortune.  So I reject your assertion that it was rightfully earned. 

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8 minutes ago, Rabbit Hash said:

 

You got look up 8-bit guy on Youtube.

 

Not while I'm at work.  

 

I recall that there was free space on the program disk itself.  So you would of course load the program off the 5.25" floppy disk, but then you'd save your drawings on that very same floppy as well. 

 

My grade school's first computer lab had Radio Shack computers that looked like the ones off the cover of Krafwerk's Computer World.  We had 15~ computers for classes of 35 kids, so you either had to double or even triple-up on each computer.  The elaborate login procedure was written in chalk on the chalkboard.  

 

 

 

 

computer.jpg

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How do you draw a distinction between one who earns their fortune fairly and unfairly? Jobs stole from Xerox. Buffet has long supported economic floats, subprime lending (Clayton and Vanderbilt, for example), and monopolies. Bezos and the Waltons are responsible for brutal workplace and anti-labor practices to their benefit. Page has stolen code and trade secrets. Ellison...hmm... I can't think of any corruptions offhand. 

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1 minute ago, TBideon said:

How do you draw a distinction between one who earns their fortune fairly and unfairly? Jobs stole from Xerox. Buffet has long supported economic floats, subprime lending (Clayton and Vanderbilt, for example), and monopolies. Bezos and the Waltons are responsible for brutal workplace and anti-labor practices to their benefit. Page has stolen code and trade secrets. Ellison...hmm... I can't think of any corruptions offhand. 

How do you draw a distinction between which taxes are fair and unfair?

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^ Because as a country we have always valued individual property rights and that they are controlled by the individuals not the government and a wealth tax runs completely contrary to that principle

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7 minutes ago, Brutus_buckeye said:

^ Because as a country we have always valued individual property rights and that they are controlled by the individuals not the government and a wealth tax runs completely contrary to that principle

This is just circular logic.  We already have property taxes. 

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