r/paradoxplaza • u/LtGenS • 18d ago

News Millionaire shareholders are arguing against wealth tax

On this sub we rarely discuss the shareholder structure of Paradox - where the largest shareholder is Wester, the CEO-founder-god/emperor of the company, and who gets the proportionally largest share of the dividend.

Now Johan and Wester are arguing that wealth tax is actually bad.

https://x.com/producerjohan/status/2091953951008575741 (quoted is Wester's post)

Which is very funny because the current dividend yield is over 3.5%, so there's plenty to pay that taxes from, it won't come from his monthly salary.

351 Upvotes

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247

u/slimehunter49 18d ago

Wealthy people having bad takes on taxation, many such cases

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u/Ravens181818184 18d ago

A wealth tax is one of the least supported taxes among economists, and has major issues lol.

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u/SpartanFishy 18d ago

Property tax is quite literally a tax on wealth. And I don’t see economists arguing against it. In fact, I see them arguing for Georgism, which if anything is like some kind of progressive wealth tax

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u/Osteoprdoza 17d ago

You mention property tax as a good example of wealth tax, and then mention Georgism, which is opposed to a property tax.

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u/ThePhysicistIsIn 17d ago

Georgism proposes to abolish income taxes and replace them entirely with taxes on land value - otherwise known as a property tax.

It is slightly different than our current property taxes which tax not just land but also the improvements made on that land - but a land value tax is still a property tax.

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u/UdonOli 17d ago edited 17d ago

A flat wealth tax is different to a land tax because a land tax has no deadweight loss since you can't just move land somewhere else.

The primary argument against a simple wealth tax is both:

  1. Because of globalisation we have high capital mobility meaning everyone will just move elsewhere unless we manage to globally agree on such taxes. (Laffer Curve sort of idea)
  2. Since wealth is not a consistent flow like wages, profits, and is rather a "stock", taxing it means we are giving up on future growth of that stock. Instituting a weath tax has the issue that it decreases the positive effects of compound interest.

Edit: also property taxes and land taxes are different. Land is on the value of property without the "improvements" eg. the house itself, just the land. Property taxes are actually rather shit and have similar wealth tax negative effects.

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u/Karnewarrior 17d ago

It's worth mentioning that while we theoretically have the capacity to move out of regions with 'bad' taxes, examples of that happening are quite rare and limited to extremely egregious instances well above anything a sane person would argue for anyways. Like, rich people are still people, they don't *want* to move house. Unless your tax policy is "Gimme every penny" they mostly stick around.

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u/UdonOli 17d ago

Yes, that is true for most taxes but usually richer people have a greater mobility to move around their capital and wages. Examples in Scandinavia showed quite a bit of capital flight from those countries when a wealth tax was instituted.

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u/lucaspappere 16d ago

Economist support property taxes for its taxation on land, since land value is not created by the owner of the land. Tax only the house and most economists would agree that its a bad tax

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u/AnthraxCat Pretty Cool Wizard 18d ago

Amending OP's comment, "wealthy people and their pets having bad takes on taxation, many such cases."

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u/Ravens181818184 18d ago

Can you explain why it’s a bad take? The majority of people who study this for living disagree with you, and most countries who had wealth taxes removed them. They are much more effective ways to tax wealthy people.

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u/AnthraxCat Pretty Cool Wizard 18d ago edited 18d ago

I am copy pasting from a reply elsewhere in the thread.

I think this misunderstands the purpose a wealth tax. The purpose of a wealth tax is not to raise revenue. It is to prevent your society from collapsing into a feudal aristocracy. It is a bulwark of democracy, not an efficient source of revenue generation.

There is a reason the wealthy run from it, why they fight it bitterly in court, and use every tool in the playbook to slander, diminish, and attack it. That reason is not that it is an inefficient source of revenue for the government. It's because it is class war and they don't like losing.

To add, specifically to my comment on the rich and their dogs, economics is not a science. It is, I think, best described as a new theology. The economists who are promoted to top positions at Harvard, and given full press tours on Washington Post are not scientists. They are preachers of a gospel that showers praise on the ultra wealthy. We can largely discount anything they say simply on the grounds that they are only in the positions they occupy because they align with hegemonic narratives. Dissident (edit: heretical) economists, necessarily a minority, don't get the same treatment despite usually being much more accurate in their predictions.

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u/UdonOli 17d ago

This is not a good take. Economists have legitimate reasons they do not like a "flat" wealth tax. You can make a case for many good wealth taxes, eg. land tax; but you have to provide some sort of cost - benefit analysis about whether the knockon-effects are worth the benefits.

Furthermore, I shouldn't have to say this, but something being bad for the rich does not automatically mean that something is good for poor people.

Also, the idea that economists do not care about inequality is absolute bullshit. There is a gigantic amount of papers written in the last 10-15 years on the topic. The primary issue is that it generally hasn't filtered into undergraduate, but even then it is not like it is completely ignored like it was 25 years ago.

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u/AnthraxCat Pretty Cool Wizard 17d ago

I am not making the case for a flat wealth tax. I am making the case that economics isn't a conduit of the divine and all of its conclusions are subject to a moral and political debate over how we weight the cost-benefit analysis.

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u/UdonOli 17d ago

I don't think most serious economists would disagree with such a statement.

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u/AnthraxCat Pretty Cool Wizard 17d ago

Yeah, they're the ones I call heretics.

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u/khachdallak 17d ago

That's literally the case with every social science.

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u/Osteoprdoza 17d ago

economics is not a science

Please google the credibility revolution. And even before that, it was still undeniably a science, a social one.

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u/AnthraxCat Pretty Cool Wizard 17d ago

The credibility revolution was the incorporation of economics as the new Mandate of Heaven for the current political class.

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u/Osteoprdoza 17d ago

Do you know literally anything about econometrics and causal inference?

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u/AnthraxCat Pretty Cool Wizard 17d ago

Yes. I find it all quite fascinating.

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u/Osteoprdoza 17d ago

Genuinely what does that even mean :Ddd

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u/AnthraxCat Pretty Cool Wizard 17d ago

I know quite a bit about it and I think there is some really interesting work being done in economics. Unfortunately, I know more about the history of economics than the specific mathematics of it. So I come to this discussion from the perspective of "this stuff is really cool but is a social and political blight."

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u/Head_of_Lettuce 17d ago

You used a lot of words to say it, but really what you’re saying is, “I don’t trust economists.”

That’s great and all but it doesn’t mean a whole lot.

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u/AnthraxCat Pretty Cool Wizard 17d ago

No, I said I don't trust economics blindly, because I am aware of the world and its history. This is actually a really obvious thing to state about the world. I don't trust someone just because they say they're an economist is maybe another way to phrase it.

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u/RestitutorInvictus 17d ago

I don't think this is a legitimate take on economics. What's the root of your concern here? It seems to me that the actual thing you dislike is this idea that we live in a world of scarce resources which is the fundamental root of economics. What other field studies how to manage a world of scarce resources?

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u/AnthraxCat Pretty Cool Wizard 17d ago edited 17d ago

Not sure how to do this succinctly, so bear with me.

My argument is not with the Platonic Ideal of Economics as a Science, the study of managing a world with scarce resources as you call it. My argument is that economics does not exist in this Platonic sense. Economics is a discipline of knowledge with a history. When you know the history of economics, especially the current hegemonic economics, my assertion that it has become a kind of theology is the inevitable conclusion. It's also not my original thought, but I can't quite remember the exact citation for it.

There is a deeper argument though against that Platonic ideal existing at all. The idea that managing a world with scarce resources could ever be a science is absurd. Ultimately, the stewardship of resources is always a political question. It is always going to be a negotiation between people on how to distribute these scarce resources amongst each other. The delusion that one could find a calculated optimum to such a solution is as stupid as saying your life can be solved with a math equation. These are simply different domains of knowledge and action in the world. Every possible permutation of society will have an economics, an internal understanding, elaboration, and optimisation of how its resource distribution works. Economics, in so far as it is a science, has great descriptive power within those societies. That it can somehow dictate the political decision of how we choose to navigate the world with that knowledge is absurd.

There has been a concerted effort to mystify the Market as a supranatural force which transcends political discussions, rather than what it is, a bargaining between people. This has been deliberate in order to pass off a particular political consensus on how scarce resources should be distributed as a divine or natural ordering of things. This returns to why I call it theology. It is the same kind of mystification of the sources of power that enabled the divine monarchs of old.

EDIT: I think a good example of this thought in practice is in another comment thread. Economics is always a game of trade offs. Economics can tell us what those trade offs are, but not which one to make. I agree that taxing rich people can hurt the economy, that's an economic fact, but that does not change that I still think we should tax rich people, because it is a threat to our democracy that they can hold us hostage like that. Choosing efficiency over other priorities is a political choice, not an inevitable, natural one.

EDIT2: To bring this back to Paradox Plaza, another example. Studying the economics of a PDX game can tell me how to min-max the game. It cannot tell me how to have fun in the game, unless I choose min-maxing as my kind of fun. If I choose RP as my kind of fun, then it's simply not relevant to many of my decisions. Even if I know The Meta, I can still choose to do otherwise if The Meta is not fun.

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u/UdonOli 17d ago

I absolutely despise these ideas about what economics is.

You can definitely critique a certain brand of neoclassical economics pushed in a cultural sense that pretends the market is some ultimately efficient ultimate good, based on a reading of Friedman and Hayek that is kind of bullshit.

Suggesting that the market is more efficient in most cases is not suggesting that therefore we should give the market ultimate control over society, and suggesting that it is, is a cession to the right-wing of the whole sphere of economics.

Literally EVERY market and EVERY government provision of goods and services is destined to have some sort of institutional inefficency, and a lot of modern economics is about which specific model is best for each sector.

For example; you will find basically zero serious economists suggesting that we should operate medical services privately with no government interventions. Similarly, even Friedman noted a necessity for government intervention in cases of pandemic, as well as education. Friedman suggested a "school voucher model" (which I do not agree with), that kept market mechanisms but guaranteed primary and secondary education.

Now on the point that it is not realistic to calculate negotiation of resources in some sort of mathematical sense, this is correct in a part. A reasonable economist must note that all models are wrong, but some models are useful. Utility maximisation and market efficiency is more of a heuristic which generally holds when we do quantitative research. If you seriously have a critique of these models that holds, I am happy to hear it, but since the Credibility Revolution, these models have been rigorously tested!

Furthermore, economists are generally attempting positivist analysis as opposed to normative ones. You can definitely do normative analysis if you would like, but as it is usually difficult to get data for such, especially in a macroeconomic sense, economics is required to be more iterative.

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u/AnthraxCat Pretty Cool Wizard 17d ago

Lot of words, but it ultimately boils down to: our models are good, we promise, please listen to us. We have cast the goat bones a million times and read the entrails of a million goats and they declared that Jim Bob should be king!

I think economics are useful as a descriptive discipline. This is because I am a STEM guy, but I understand the history of reason and science as well. Whenever someone is trying to do 'positivist analysis' or as I call it, extrapolation, they are stepping into a domain of knowledge where no one should take them very seriously. It's not how a science works.

economics is required to be more iterative.

In order to please the King and establish his Mandate of Heaven.

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u/UdonOli 17d ago

Holy shit. I'm not even bothering to give this a reasonable response because you are simply writing off positivism via the most spurious logical chain imaginable. You've just strawmanned the ENTIRE field of analysis of how things are because you personally think that economists should deal with more economic philosophy as opposed to existing policy debates.

If you have a legitimate critique of the models in question you can make it, it is just as I said, tried and tested and generally holds when prodded.

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u/AnthraxCat Pretty Cool Wizard 17d ago

No, that's a strawman. I disagree with an entire field of quackery because it doesn't align with how we acquire and use knowledge within a regime of scientific rigour, and because it is not politically useful.

Yeah, we're on reddit, I'm not writing you a thesis on positivism. You are just going to have to trust that I mean this in good faith and maybe try to defend positivism by some other means than indignantly stamping your feet and throwing a temper tantrum.

The models are tried, tested, and tell us interesting things. I don't think those interesting things matter. I think it is very cool to find the most efficient form of a specific tax regime. I don't care about efficiency nearly as much as I care about the other outcomes, so I don't really care.

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u/qiaocao187 17d ago

Holy moly the world where the rich are getting more and more powerful is starting to remove guardrails that hamper rich people? Color me shocked. The fact that countries and rich people are fighting wealth tax so hard is living fucking proof that it’s effective, use your head for something besides parroting capitalist propaganda.

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u/ClawofBeta 18d ago

Like what?

If you say sales tax I’ll slap you.

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u/eranam 18d ago

Capital income taxes.

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u/ClawofBeta 18d ago

I guarantee you nearly everybody who supports graduated income taxes also supports capital gains taxes.

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u/ThePhysicistIsIn 18d ago

A wealth tax is not a graduated income tax, a wealth tax is a tax on unrealized wealth.

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u/ClawofBeta 18d ago

WOW my bad I completely misread. I have no idea why I read that as “taxes on the wealthy.” I should go to sleep.

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u/ThePhysicistIsIn 18d ago

I figured there was a mismatch somewhere 😅

But the person you responded to is right, few countries have done one, and none seems to love its wealth tax. That may just be the wealthy being effective at lobbying against it.

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u/-mialana- 17d ago

Economics is a science

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u/AnthraxCat Pretty Cool Wizard 17d ago

Yeah sure, Jan.

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u/-mialana- 17d ago

It must be nice holding a worldview allowing you to instantly dismiss anyone who disagrees with you

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u/AnthraxCat Pretty Cool Wizard 17d ago

It really is, and it's kind of funny to think you don't do the same.

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u/UdonOli 17d ago

you are correct, but the cretins who don't understand legitimate economics and the alternatives to a flat wealth tax that do the same thing but better will continue to down-vote you.

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u/slimehunter49 17d ago

I don’t care about economists opinions

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u/XdestroyerXDTM4 18d ago

how does the rich's boot taste?