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blitzar 9 hours ago

Having to pay a fat wedge of tax every year on what you "earn" sucks a lot of the life out of the compounding effect.

saghm 9 hours ago | parent | next [-]

When capital gains tax is so much lower than income tax, this holds even more true for people who work at the companies being sold for lots of money and make income in wages than the people who own the companies, and that just reinforces the original point

atwrk 8 hours ago | parent | prev | next [-]

Those taxes are the necessary condition in silly essays like this one from pg. Or why do you think those billionaires miraculously mostly end up in the US and not in countries like Sudan or Peru? I mean if those billionaires would actually be the wealth creators, not depending on society at large, they could become billionaires everywhere, right?

WalterBright 2 hours ago | parent [-]

Some countries have far more repressive governments.

ceejayoz 9 hours ago | parent | prev | next [-]

We pay those taxes because not having the services and societal stability those taxes pay for also sucks a lot of life out.

geysersam 7 hours ago | parent | next [-]

To add to that: There are also "compounding effects" from investments made by tax money, just as for any other investments, the difference is that the compounding gains are collectively owned and not controlled by an individual.

inigyou 6 hours ago | parent | prev | next [-]

In a healthy society that's the case. In an unhealthy one, who knows.

groundzeros2015 9 hours ago | parent | prev | next [-]

I think that’s their justification in the abstract, not the justification for most individual tax items.

ceejayoz 9 hours ago | parent [-]

I don't have to inspect every grain of rice with a magnifying glass to enjoy the overall dish.

groundzeros2015 8 hours ago | parent [-]

Are you arguing that we should have bad taxes because some taxes are good?

ceejayoz 8 hours ago | parent [-]

Yes, absolutely.

There's a cost to perfection. In our computing world, every extra nine of reliability is more expensive than the last, often with diminishing returns.

See also: Florida drug testing welfare recipients cost more than it saved. https://www.aclu.org/news/smart-justice/just-we-suspected-fl...

groundzeros2015 8 hours ago | parent [-]

You’re arguing that the cost to find bad taxes is not worth the savings. That’s not the same thing.

If I’ve already found with a poor justification or better yet, someone is proposing a new one. Shouldn’t we remove it?

ceejayoz 8 hours ago | parent [-]

I mean, I'd also argue that the definition of a "bad tax" is notoriously difficult to agree on.

For example:

https://x.com/NEWSMAX/status/1937470443168182386

> A government agency spending $300 million in taxpayer dollars to produce sterilized flies sounds like a dream scenario for a DOGE team looking to cut waste, fraud, and abuse.

A year later:

https://www.cnn.com/2026/06/09/business/what-consumers-shoul...

> Grocery shoppers could get hit with higher prices if the screwworm cases turn into a full-blown outbreak. That could cost $3 billion across the Southwest, according to a report by the Federal Reserve Bank of Dallas.

Good tax, or bad tax?

Returning to your question, though: Yes, I assert the cost of troubleshooting a "bad tax" may exceed the benefits of having addressed it.

groundzeros2015 8 hours ago | parent [-]

You’re weasling.

We don’t have to treat taxes as a pool we can look at the pros and cons of each one. Taxes are not benevolent and good by nature.

You seem to be suggesting here it’s impossible or too costly to weigh pros or cons. So I would not consider you for an administrative position

ceejayoz 8 hours ago | parent [-]

You're avoiding the points.

"Look at the pros and cons of each one" is an enormous handwave; I've provided very clear evidence of our inability to do that successfully in a very topical and concrete case.

satvikpendem 8 hours ago | parent | next [-]

What DOGE did is not one I'd consider proper review, so bringing them up doesn't necessarily help your point. There definitely are ways to look at each tax and determine its worth, in a non-partisan way.

ceejayoz 8 hours ago | parent [-]

> What DOGE did is not one I'd consider proper review…

This illustrates very well how difficult it will be to agree on good/bad tax.

> There definitely are ways to look at each tax and determine its worth, in a non-partisan way.

If you've found one, can I come to the Nobel ceremony?

satvikpendem 7 hours ago | parent [-]

Sure, although it doesn't require Nobel level effort to understand.

ceejayoz 7 hours ago | parent [-]

Go on. What are these practical "ways to look at each tax and determine its worth, in a non-partisan way" options?

satvikpendem 7 hours ago | parent [-]

It is already done today. Academic panels, economists writing papers on impacts of various policies like rent control, monetary policy, and yes, taxes. Are some of them politically motivated or have academic disagreements? Sure, all people have personal politics and biases. But that is better than throwing up ones hands and saying we should accept all bad taxes because good ones also exist. By that logic, any tax I suggest should be accepted by you, because there is no way to tell if it's good or bad right?

ceejayoz 7 hours ago | parent [-]

> Academic panels, economists writing papers on impacts of various policies like rent control, monetary policy, and yes, taxes.

We have those, and they disagree almost as much as the general public does. Economists get plenty partisan; they're human!

> By that logic, any tax I suggest should be accepted by you, because there is no way to tell if it's good or bad right?

No. But I'm deeply skeptical of "bad tax!" assessments from someone who's calling random people Marxists on this thread!

satvikpendem 7 hours ago | parent [-]

Why are you taking Marxist as an insult? Maybe that's your first issue, it's an accurate label for someone who believes in the labor theory of value which is something Marx came up.

And yes, economists are human of course (unless they're now AI). Not sure how that changes what I said. Just because they disagree doesn't mean what they do isn't better than throwing your hands up and saying it can't be done.

ceejayoz 7 hours ago | parent [-]

Again, you asserted:

> There definitely are ways to look at each tax and determine its worth, in a non-partisan way.

You then asserted those are:

> Academic panels, economists writing papers on impacts of various policies like rent control, monetary policy, and yes, taxes.

But Marx himself is an example of that process - an economist, writing papers on all this. You clearly don't agree with his conclusions, so now we're... right back where we started?

satvikpendem 7 hours ago | parent [-]

Nowhere did I say I have to agree with their conclusions to think that the work they're doing on analysis of policy is worthwhile, while your logic seems to be that it is not, which is what I disagree with. If that's not your argument then apologies.

ceejayoz 7 hours ago | parent [-]

> Nowhere did I say I have to agree with their conclusions…

So your functional way to effectively assess good/bad tax is ... not so functional.

satvikpendem 7 hours ago | parent [-]

No? I'm not an economist or policy maker so why does it matter what I think? As long as the economists can broadly agree, which they do on many topics, and enact that into policy, then that's fine. And is what happens today, functionally. So I really don't see how your argument to throw up your hands makes any sense, seems like you don't trust professionals to do their job.

Anyway, you're seeming to misunderstand me when I asked you questions as well, such as why you took Marxist for an insult for example when it accurately describes what I was talking about. I'm not the only one that will answer your questions, seems like there is some sort of sealioning you're doing in this thread.

ceejayoz 7 hours ago | parent [-]

> I'm not an economist or policy maker so why does it matter what I think?'

Do you vote?

satvikpendem 3 hours ago | parent [-]

> I'm not the only one that will answer your questions, seems like there is some sort of sealioning you're doing in this thread.

groundzeros2015 8 hours ago | parent | prev [-]

> You seem to be suggesting here it’s impossible or too costly to weigh pros or cons.

Sounds like you agree.

ceejayoz 8 hours ago | parent [-]

Yes, I agree, at least in part.

We are tweaking a multi-trillion dollar system impacting hundreds of millions of people directly and billions indirectly. The impacts of those tweaks take years or decades to (imperfectly!) assess. Many of the tweaks and their impacts are a matter of deep partisan and academic contention.

groundzeros2015 3 hours ago | parent [-]

The system is incomprehensible complex and unknowable, but it’s probably correct and can’t be improved.

What about new tax proposals? Shouldn’t we then reject them all to avoid butterfly effects in this carefully tuned ideal?

ceejayoz 3 hours ago | parent [-]

No one said it can't be improved.

I'm noting that our political system seems to generate lots of folks going "this is wasteful spending!" when it's… not.

That results in challenges in determining what's a "bad tax" and what's a "good tax", and the consequences of cutting programs may take time to show up.

vixen99 3 hours ago | parent | prev | next [-]

There again you might pay a lot of taxes and not get the services and have questionable societal stability. Ask some Brits about that.

IncreasePosts 8 hours ago | parent | prev | next [-]

You can still collect taxes without taxing people who have already been taxed in the form of needing to exchange a large fraction of their life for the wage.

ceejayoz 8 hours ago | parent | next [-]

I'm entirely onboard with reducing tax on low/mid income folks currently "exchanging a large fraction of their life for the small wage" in favor of increased taxes on the billionaire class, yes.

WalterBright 2 hours ago | parent [-]

We already have the Earned Income Tax Credit (EITC).

ceejayoz an hour ago | parent | next [-]

We already have all sorts of things that I like.

We seem to be making most of the changes in favor of the already very well-off, instead of, say, expanding the EITC.

https://commons.wikimedia.org/wiki/File:1960-_Tax_rates_of_r...

IncreasePosts an hour ago | parent | prev [-]

That covers maybe the bottom 30% of households, and realistically only if they have kids.

MagicMoonlight 6 hours ago | parent | prev [-]

[dead]

DrProtic 8 hours ago | parent | prev [-]

But the amount of tax we pay is because of inefficient, corrupt and incompetent government.

ceejayoz 8 hours ago | parent | next [-]

We have the current inefficient, corrupt, and incompetent government in the US because the anti-tax wealthy class threw an all-out tantrum over even the idea of paying a tiny bit more tax.

selfmodruntime 5 hours ago | parent | next [-]

I live in Germany and I pay almost 50% of my income in income tax and social tax. There is always "just that tiny bit more tax" that will magically fix the system (it won't).

Turns out paying more money to an already corrupt government doesn't turn it less corrupt. Go figure, hm?

ceejayoz 3 hours ago | parent [-]

> I live in Germany and I pay almost 50% of my income in income tax and social tax.

I live in the US and pay less raw tax than that, for sure.

But I reported $49k in medical expenses (premiums, deductible, copays, stuff they won't cover) last year on my taxes, and I've got two kids going to college in a year, which may cost $10-40k/year for each.

I'd rather your trade-off.

hparadiz 3 hours ago | parent [-]

You forget that the college expense is temporary while the taxes are forever. And Germany still makes you get private insurance for medical. A single year of taxes in Germany based on my current American income would pay for all of that you just said. So then my question for you is. What were you doing with your money in those other years? I hope it was saving it. Because otherwise I'm gonna eye roll hard at you wanting to increase taxes on everyone just to get a small cut in how much you pay during one fiscal year. Seems silly.

ceejayoz 3 hours ago | parent [-]

> You forget that the college expense is temporary while the taxes are forever.

I see you're unfamiliar with American student loans.

> And Germany still makes you get private insurance for medical.

We spend about double what you do for healthcare, inclusive of both private and public spending. https://commons.wikimedia.org/wiki/File:OECD_health_expendit...

> What were you doing with your money in those other years?

An enormous amount of it has been going to healthcare for about twenty years now. This wasn't our first year of such costs.

hparadiz 2 hours ago | parent [-]

I am very familiar with American student loans. I paid my 40k off in about 11 months by keeping my spending down that year. It was easy. I don't want to pay 15% of my income forever just because you can't budget. Also frankly your kids should be paying their own way through college. That's a nice gift you're giving them but it's 100% a discretionary expense and is basically you saying "I have so much money I can simply gift it to my kids". Shit I wish I had that.

ceejayoz 2 hours ago | parent [-]

> That's a nice gift you're giving them…

I never said I was - I'll certainly try to help where I can. I don't have that kind of money; see aforementioned healthcare costs! They're gonna need loans, it's probably gonna be quite a bit more than $40k, and I'm pretty dubious in the current job market that they're gonna have $40k in discretional annual income on the other end.

> I don't want to pay 15% of my income forever just because you can't budget.

And I don't want to go bankrupt from ever-rising medical costs, but here we are.

inigyou 6 hours ago | parent | prev [-]

We have an inefficient, corrupt and incompetent government in the US because we voted for it. And we keep voting for it. That's our revealed preference. We obviously like inefficient, corrupt, incompetent governments.

AndrewKemendo 8 hours ago | parent | prev [-]

And that government was corrupted by…wealthy business owners via regulatory capture!

hdgvhicv 9 hours ago | parent | prev | next [-]

People who earn money pay taxes

While at Amazon Jeff Bezos considers his worth to be 80k a year hence he was paid that much, and paid taxes in that salary.

If someone becomes a billionaire by being paid 50m a year for 40 years and paying taxes on that income then congrats.

WalterBright 2 hours ago | parent [-]

Bezos has paid $billions in capital gains taxes.

fractallyte 9 hours ago | parent | prev | next [-]

Only up to a certain threshold – after which you can afford "creative" accounting which reduces the tax burden and restores the compounding effect ;-)

dmurvihill 4 hours ago | parent | prev [-]

Luckily, billionaires don't have to worry about that.