The wealthy get a free lunch on capital gains taxes. Let’s fix that.
The wealthy get a free lunch on capital gains taxes. Let’s fix that. VIDEO SOURCES.
How could changing capital gains taxes more revenue? Grace Enda and William G. Gale. 2020 1 14. Brookings. The rich benefit as Democrats retreat from tax on unrealized capital gains Greg Iacurci. CNBC. 2021 12 29. https://www.cnbc.com/2021/12/29/the-rich-benefit-as-democrats-forgo-tax-on-unrealized-capital-gains.html The Many Problems With Taxing
Why Is This Generation Struggling So Much? – Scott Galloway | Modern Wisdom Podcast 543
Would a “Wealth Tax” Help Combat Inequality? A Debate with Saez, Summers, and Mankiw
Why Wealth Matters: A Conversation with Morgan Housel (Episode #287)
Bernie Sanders Is Wrong About the American ‘Oligarchs’
“We do not have oligarchs in the U.S. the way countries like Russia do. Our millionaires and billionaires are prevented from pulling political puppet strings both by custom and by campaign finance laws which cap their financial contributions to some degree and require disclosures. Though companies do sometimes successfully lobby for government contracts and subsidies—Musk’s hypocrisy has been widely documented on this front—we don’t have widespread, unchecked corporatism where the government always serves to further companies’ bottom lines, or where companies become exempt from government scrutiny for having curried favor with the right people. And free marketeers tend to believe that the existing patchwork of subsidies and handouts ought to be stopped since they serve as market distortions, artificially propping up companies that wouldn’t succeed or be competitive on their own merits.
If Sanders’ point is not merely that wealthy people exercise undue influence on the political process (as oligarch implies) but rather that wealth accumulation always and everywhere ought to be prevented, as he insinuates when he mentions their superyachts, that’s an even weaker critique. People accumulate extreme wealth in this country most often through inventing a product or founding a company that millions or billions of people end up valuing highly. Consider Jeff Bezos, worth $177 billion, per 2021 numbers; Elon Musk, $151 billion; Bill Gates, $124 billion; Mark Zuckerberg, $97 billion; Warren Buffett, $96 billion; Larry Ellison, $93 billion; Larry Page, $91.5 billion; Sergey Brin, $89 billion. More often than not, that process is iterative, with tons of failures before striking gold. When a company is successful, those who were involved in its founding often scatter, taking their earnings and intellect and founding new companies, starting the whole iterative process over again.”
“Financial planning firm Ramsey Solutions’ 2021 millionaire study found that 79 percent of the 10,000 U.S. millionaires surveyed did not receive any inheritance from their families. Of those who did receive inheritances, who are in the top 1 percent, Federal Reserve data show those inheritances were to the tune of $719,000 on average. More than half of America’s billion-dollar companies have at least one immigrant founder who came to the U.S. as a kid. Extreme wealth, by and large, isn’t generated by investing inherited money, but by starting companies that bring value to millions of customers.”
“The ’08 financial crisis almost brought Tesla crashing down, and disastrous Falcon 1 launches around that same time almost left SpaceX in pieces. “That historic fourth flight on September 28, 2008 made the Falcon 1 the first privately built liquid-fueled booster to reach orbit,” writes Pethokoukis. “It saved the company. But would that launch have happened if Musk had left PayPal with $60 million less? Would Tesla have muddled into 2009 and beyond? Kaplan doesn’t think so.”
Nor does Musk, in fact.
Central planners like Biden and Sanders don’t appreciate how fragile many of today’s biggest and boldest companies—SpaceX, Tesla, and Amazon—once were. Serial entrepreneurs, who exit one venture and quickly invest their earnings in another, are oftentimes wealthy enough at exit that they would be hit with wealth taxes if the Biden plan or any of its evil twins become law. But two things must be kept in mind: Their wealth is rarely liquid, and that money often gets quickly invested into other ventures that we would lose out on if it had been taxed away.”
MIT Reinstates Standardized Testing Requirements for Admissions
“the Massachusetts Institute of Technology (MIT) announced that it would reinstate its SAT/ACT test requirement for applicants. In a departure from the trends set by other elite universities, MIT rolled back its admissions policy, implemented in the 2020–2021 admissions cycle, which made standardized test scores optional. Administrators cited key issues with “holistic” admissions standards, an increasingly popular method of equitably distributing open spots to students regardless of how well they perform on standardized tests.
In a statement explaining the decision, MIT Dean of Admissions and Student Financial Services Stu Schmill noted that MIT’s “research shows standardized tests help us better assess the academic preparedness of all applicants, and also help us identify socioeconomically disadvantaged students who lack access to advanced coursework or other enrichment opportunities that would otherwise demonstrate their readiness for MIT.”
Without an objective measure like a standardized test, low-income students—who may not have equal access to other pieces of the holistic pie, such as a plethora of Advanced Placement (A.P.) classes or numerous extracurriculars—have a harder time proving that they are academically prepared for an MIT education. A move that was intended to increase diversity and help low-income students, as it turns out, mostly helps low-scoring wealthy students—and makes it harder to identify talented yet underprivileged applicants.
MIT now distinguishes itself from other elite universities, a spate of which have removed their SAT and ACT requirements in recent years, primarily citing COVID-19 and diversity-related justifications for the policy change.
The original logic of such policies is based on the idea that SAT and ACT scores correlate strongly with income, which suggests that students from poorer households are denied admission to competitive schools solely because they can’t afford to ace the SATs.
However, omitting standardized test scores makes all applicants reliant on application materials that correlate even more highly with income, such as admissions essays. A 2021 Stanford study found that essays are actually more strongly correlated with household income than SAT scores. Thus, by omitting one income-correlated metric, one that is even more closely related to income takes prominence.
While wealthy parents can pay for test prep, they can’t take a standardized test for their children (well, almost never). However, with essay coaches and college counselors at their disposal, many wealthy students’ college essays can be manicured to fit exactly what schools are looking for.”
When It Comes to Climate Change, Wealth Equals Adaptation
“Adaptation and the development of low-carbon energy generation technologies will both be required to address and mitigate the challenges of man-made climate change. And yes, the world is slated to get warmer, but humanity is not running out of time to avert a harrowing climate future.
Again, when bad weather meets poverty, people die. The recipe for successfully adapting to climate change is continued economic growth and technological progress.”
When We Reject Immigrants, We Reject Trillions of Dollars in Wealth
“Virtually everyone, regardless of skill, is much more productive in the First World than the Third World.” And that doesn’t just apply to high-skilled immigrants. It also applies to very low-skilled immigrants, who, when they immigrate, can tap into labor markets with efficiently run firms, predictable legal systems, and ample capital”