>I don't understand why HN seems so concerned about nailing down its "value proposition".
You're getting sidetracked because of the particular phrase "value proposition" but a lot of people just use it as a stock meme to simply understand something even without any commercial product perspective.
You can read through this entire thread where people are having a hard time wrapping their head around what _it_ _is_ because the blog article doesn't explain it well.
The following various stock phrases use different words but are basically asking the same thing:
- "This is the solution to what problem?"
- "How's this different from Tailscale/Wireguard/QUIC/etc?"
- "What is the raison d'être ?"
- "ELI5?"
- "What's the value proposition?"
- "Why should I care about this?"
- "What's the use case for this?"
- "What's the motivation / rationale for this?"
- "What does this do?"
And then different commenters try different explanations and hopefully one will finally click for readers.
I mean this kindly, but this is so “engineer brained”
Maybe the game has changed with LLMs, but its been a running joke that engineers will build a startup/product/library/thing only to then realize they can’t get any users and that marketing and sales are hard.
Attention and mind share are more valuable than ever. If you can’t answer “Why should I care about X?” then you are fighting an uphill battle.
> Maybe the game has changed with LLMs, but its been a running joke that engineers will build a startup/product/library/thing only to then realize they can’t get any users and that marketing and sales are hard.
I agree with your premise, but you're still viewing this technology through the lens of "a successful product" versus "a successful piece of technology".
Plenty of open source projects stay open source and are popular without ever making any sales whatsoever. I'm not trying to project my own motivations on the Iroh team; they may want to build a product out of it. For me, though, the project has a lot of appeal already, because it exactly and excellently fulfills a technological need, not because they brought me in with a "it's x but for y" narrative.
It's still about getting users even if you're not charging money for it. If you want to make an open source thing and don't care about getting users then that's great for you I guess? And there's a good chance it'll stay that way unless you put at least some effort into getting them (eg even putting effort into a readme counts).
We use Iroh in production at work, and I'm absolutely in love with it. I'd describe it primarily as "Tailscale-style hole punching as a rust crate", but of course you can sprinkle a lot of cool p2p stuff on top of the basic QUIC connections.
fwiw, Tailscale happens to be mostly open source, not completely. Yes, I know Headscale exists, it does not implement all the Tailscale functions (not non-functional production type capabilities)
I can't tell what's worse: intentionally obscuring the fact that the vast majority of people would pay ~no wealth tax or unintentionally forgetting that the vast majority of people would pay ~no wealth tax.
On the other hand, almost a majority of people already pay no federal income tax anyways. Mitt Romney mentioned a number of 47% during his presidential campaign and that number was mostly true. https://www.politifact.com/factchecks/2012/sep/18/mitt-romne...
People love to talk about the marginal tax rates but not the average tax rates. And I think that’s right because the conversation should be focused on the wealthiest people.
> On the other hand, almost a majority of people already pay no federal income tax anyways.
That's an irrelevant diversion though, because the measure that matters when discussing the fairness of taxes is how much people are left with at the end after paying whatever taxes they pay, including sales tax, income tax, and any other kind of tax. And for those particular people you're talking about the answer is very little, next to none, and for the people for whom a wealth tax would even apply the answer is unimaginable amounts.
That's not all that matters. The main reason to have taxes is to fund the government, not to make society a more just society. And thinking that billionaires will just take a wealth tax as served, and perhaps will ask "can I have some more" is one way to think about this, but probably not the best way. A better way to think is that action might be followed by reaction. There is no manifest destiny for California to be the epicenter of tech.
California already has very high taxes. I think marginal tax rates are higher in California than for UK tax residents, certainly for CGT, and roughly similar for income tax.
I'd say the fact that California remains the epicenter of tech despite its high taxes suggests concentration of talent matters far more than tax rates.
Sure, the government has that goal too. But the government has many tools, and using taxes for that is using the wrong tool. Or maybe you think that billionaires owe us not only to pay taxes, but also to play nice, and pay those taxes with a smile on their face?
Billionares shouldn't exist. We shouldn't just tax them for the revenue. We should tax them to limit the undemocratic power that comes with excessive wealth.
Agreed. Humans evolved in a tribal, local community leadership system. To have as much wealth as millions of people that you never interact with should not exist as a person. It is against the system principles of humanity; either create a new species and turn the billionaires into them, or balance the system.
This is wishful thinking. Billionaires can vote with their feet, or can pay expensive lawyers and accountants to find all the possible loopholes to not pay those taxes. California wants to tax Elon Musk for his trillion dollars. But how much of that trillion dollars was generated in California? He has a very valid claim that a lot of it was generated in Texas, and he'll go all the way to the Supreme Court with that.
People can vote that a new tax should be levied on billionaires, but can't vote how those billionaires will react to the tax. Moving out of state is one option (see Larry Page, Sergey Brin, etc). Hiring armies of lawyers to challenge any wealth assessment is another. Litigating to the Supreme Court yet another. I'm not a billionaire and never will be, but if I can think of these few ideas, they can think of 100 times more.
Exactly. You can ask many things, like you can ask for world peace, and you can ask for universal brotherly love. If the ask has no chance to result in the outcome you desire, it's purely wishful thinking.
It feels to me you are asking "why can't we just eliminate billionaires". Well, they have a vote in that decision.
Considering the alternative for them over the past millennia has been, inevitably that they get caught, hanged, quartered, beaten and other various violent methods: yes, they should smile, they're buying their lives with all that money :)
Ah yes, extortion is not the part where their disproportionate centralisation of wealth threatens your very livelihood with every action they take. Extortion isn't when they happily tell you they're going to replace you with AI. Extortion isn't when they steal your money with unpaid hours, it isn't when they threaten to fire you if you don't shut the fuck up and do as they say, when they act as a state within the state, corrupting institutions and polluting the very ground you, your children and your food grow on, it's when they're being held accountable for their actions and told that if they're going to have a personal wealth equal to that of millions, they also have the sum of responsibilities of these millions.
Just so you know, careers as a bootlicker are kind of a dead end.
You clearly don't understand psychology at all. Rule by fear has a major downside that Machivelli warned about. If you keep people under threat all the time, as soon as the threat fails and you can no longer point a gun at your head they preemptively kill you and feel good about it.
Threatening violence to get what you want always ends with you being out-violenced by a bigger thug.
This is how alpha chimps function in their tribe. They resort to war and violence to prolong their rule, and it works for long enough, thats all they need for the cost-benefits to be worth it on their side.
In humanity, being the alpha chimp, you can actually just run away from the tribe with all your wealth instead of outright die and form a new identity and start a life elsewhere and change your last name and go somewhere not well known, and if you and your family does this for enough generations you are forgotten.
I think this might explain the rotten apples at the tip-top of our industrial/societal wealth classes. I think they are these people, played out over generations, having somehow survived the system that used to make it impossible to do this when at the chimp level (or even medieval maybe, maybe this new form of evasion only arose in the industrial age).
It's only by fear if they don't understand how to restrain themselves. Behave well with all your wealth, and nothing will happen: it's the same reason why wealthy patrons of art and craftsmen were at least respected, and why things ended poorly for robber barons.
And no, I do not believe that Musk's flabby arms or Bezos' shiny head are a threat of bigger violence to me anyways.
> The main reason to have taxes is to fund the government, not to make society a more just society.
Both are important reasons for taxes.
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we cannot have both." (often attributed to Louis Brandeis, though he probably never said exactly the quote)
Taxation is one of the primary tools for avoiding destructive levels of wealth concentration.
Of course, the wealthy decry this as unfair wealth redistribution but all governments engage in constant wealth redistribution.
In the US we happen to have decided (since the Reagan era) that through increasingly regressive taxes the redistribution will almost always function upwards, ultimately resulting in the oligarchical dismantling of our government that we find ourselves in today.
There is no consensus on what is "fair" to tax, you can find people arguing from 0% to 100%. And if we're talking about measures of fairness. A much better measure is something like trying to maximise the median living standard without sacrificing any one demographic.
> And for those particular people you're talking about the answer is very little, next to none...
So... where are the real resources coming from then? Because if these people aren't using them to support their living standards they must be doing something else. If we give one person enough money out of the tax pot to pay rent, that means the resources were redeployed from somewhere else that was about 1-rentworth of something.
Because I agree that the taxes aren't going to come out of the wealthy's living standards, but the implications of that in practice are not good.
> If we give one person enough money out of the tax pot to pay rent, that means the resources were redeployed from somewhere else that was about 1-rentworth of something.
Yes, and that "somewhere else" is others' excess profit.
That excess profit comes from (a) inventing or investing capital with a return or (b) paying less for goods / labor than they can be sold for.
Capitalist profit has always been equal parts ingenuity and fucking other people over, and as most often implemented makes no discrimination between the two.
The bargain by which this has traditionally been squared is "the person who made the profit gets to keep some of it" + "they pay the rest in taxes to support the society they're successful in and depend on."
Unfortunately over the years this has continually been eroded by capital's invasion into democracy, with the express purpose of neutering the latter part of that bargain.
Those who would be hit with a wealth tax are incensed by it precisely because it would be less avoidable than the myriad of loopholes that have been engineered into income taxes.
And in terms of real resources - who do you expect to have less and what do you expect them to have less of? Because "excess profit" is an economic concept, not a real thing.
By using progressive taxes, either wealth or income, those who benefited from the current system get to keep some of those excess benefits, while keeping less than they would under a no tax system.
No, I mean real resources as in tangible ones. Although in this case I'd also be interested in redirected labour even though that isn't really a tangible asset. Like if you were explaining to someone who didn't speak english and you had to point at the things that the wealthy control that you want to tax away from them, what real objects do you point at?
Excess profit is a stupid fairy tale told by the bearded idiot. It is literally impossible to not retroactively 'exploit' somebody. Not just in the practical 'need to know what the end user will do with it to avoid them making an excess profit' but if the value changes over time they need to somehow predict that perfectly or else be guilty of exploitation. The notion itself always assumes that the capitalist should get absolutely nothing because he isn't doing "real work" and then ignores how things fall apart without them, or how much that the worker would have to do to substitute for them.
Ironically the communists have managed to out-greed the capitalists through this one fantastical concepts. Capitalists accept that they need to pay people to get their inputs and try to make the most of it one way or another. Communists are kept up at night at by the thought that somebody else may have made a penny off of their labor, and think that they need to murder them for it.
The "excess" in "excess profits" means profits greater than what a fully-competitive, perfect market would allow.
No one would be paying Apple or Google 30% of their revenue if there were infinite alternative app distribution options.
The essence of post-capitalism is that a lack of market intervention allows monopolies to not just grow (probably fine in limited niches with regulatory bounds) but also to rent seek without investing and adding value.
So yes, profit is a motivational force that has outperformed all others to date in aligning individual action with market desires.
But the excess profit era the US has been sliding towards for decades is not a free market.
When was the last time a large corporation was forcibly broken up?
Pick a target amount of inequity. Act to hit that goal. Adjust as needed.
For example, I advocate restoring our gini coefficient from the current 0.48 (?) back to 1970s era 0.35. People smarter than me will figure out how to best measure inequity, ideal targets, and implementation details.
Arguing about all the misc tax rates, purposefully ignoring the macro, is an obfuscation strategy to prevent taking any action at all. Straight out of the CIA's field guide on sabotage.
There is very little debate that you should be taxed proportionally to your total wealth; I.e. that the rich should pay more than the poor. In fact the only people trying to debate this are the rich who want to avoid paying back towards the society that enabled their success.
> I.e. that the rich should pay more than the poor
How else could it work? The poor don't have enough money to tax them. That's why they're poor. Schemes where the rich don't get taxed are systems that tend towards the 0% tax for everyone end of the spectrum.
Social Security tax is the only tax that has a limit. Medicare tax applies to all wages and high earners even pay an extra percentage.
SS tax has a limit because benefits are also limited. It is a forced retirement plan where if you live long enough, you might get back what you paid in.
It’s 15.3% counting both sides, and capped. And it’s the only “tax” that is paid back, at progressive rates, because it’s a retirement annuity not an income tax.
If the government mandates it under threat of violence, it’s called a tax.
It could also be classified as an insurance premium, but a government mandating it is the key characteristic of a tax.
But the fact that the government reduces the annuity amount by increasing retirement age and benefit purchasing power means it is not insurance either. It is wealth redistribution from the working to the non working.
Yeah, that's how insurance works: it is wealth distribution from those who have not become (yet) an insurance case to those who have not.
If you have a car, you need to pay car insurance. Is that also a tax?
The concept of insurance is independent of mandatory or not. That should be obvious, I wonder why it isn't to you. Maybe your ideology prohibits clear thinking and makes you vote Trump?
>Yeah, that's how insurance works: it is wealth distribution from those who have not become (yet) an insurance case to those who have not.
In the context of differentiating between wealth redistribution and insurance, insurance does not redistribute wealth, insurance redistributes risk since underwriting in a competitive marketplace ensures you only a premium commensurate to your risks.
For example, the government mandates only liability insurance up to $x, for which the premium for the same coverage can be vastly different depending on each person's driving history. While this can be considered a tax because the government mandates it, one can see how this is not wealth redistribution since the "tax" being paid is at least partly dependent on one's risk profile.
Contrast this with a government mandated defined benefit pension contribution equal to a percentage of one's earned income, with a known fact that one's contributions will reflect their benefit less and less as the years go on. That is far more "wealth redistribution" than "insurance".
Another example is in the US, health insurance premiums are more tax than an actuarially calculated premium based on health risk. This is because health insurers are not allowed to price health insurance based on health risks. It is explicitly a redistribution of wealth from the young and healthy to the old and sick, due to the maximum age rating factor and inability to underwrite based on pre-existing health conditions.
If you're talking about property taxes, then renters pay that as well through their rent (which passes through the landlord before getting to the city/county).
Renters will always pay one way or another. You can name it wealth tax or property tax or house tax. It doesn't matter -- the result will be higher rent.
The point of my post was to indicate that just because you're a home owner (rather than a renter) does not make you special.
Property taxes are not wealth taxes, but fees for services rendered by the local government. Both home owners and renters (may) benefit from those fees.
In what sense are landlords "providing" housing? Is there an argument around like, stabilizing a demand floor for new construction or something, or is this one of those weird in-group terms that cover over what might otherwise be seen as a relationship of power or dominance?
Either way, if I rent out my house and pull in $5k/mo but spend $2k/mo on principal, $2k/mo on interest, and $1.5k/mo on miscellaneous costs, that $500 "loss" translates into me paying $500 for $2k in principal value, all while gaining the benefits of solid inflation-indexed real estate growth AND assistance up the amortization schedule. So even cash-flow negative rentals are usually pretty long-run lucrative.
This sounds like an investment that didn't pan out - I've had one or two of those myself, never pleasant. But are they providing housing? I guess in my mind the builders, equity incentive assistors, re-zoning advocates, etc might be 'providing housing'. How is a landlord providing housing?
And even if the house represents negative wealth - same property taxes apply to a house regardless of whether the owner owns it outright with no mortgage (wealthy) or if they're paying 8% interest on an underwater mortgage (negative wealth). And, unlike VCs, property taxes are paid - often for decades - before one even sees if they'll even realize any wealth from the estimated value of their home that they pay tax on.
> intentionally obscuring the fact that the vast majority of people would pay ~no wealth tax or unintentionally forgetting that the vast majority of people would pay ~no wealth tax.
I consider this fine, because proponents of a wealth tax consistently omit that it will ultimately be the middle class who pays the tax... the ultra-wealthy and wealthy can afford sophisticated strategies to render a wealth tax ineffective against them, and if that doesn't work they can just move somewhere else. Income tax was the same.
If you paid attention to proponents of a wealth tax in the US, you would be aware that they only ever suggest it for vast wealths of like $10 million+.
The Bay Area is one of the most expensive parts of the United States and $10M still means you own half a dozen houses. I’d say that’s reasonably “wealthy” from the perspective of the majority of the population who struggle to afford even one.
Anyone who owns two $500k houses is wealthy in 2026. I used to own two worth less than that and didn’t consider myself wealthy, but I was by the statistics.
Even that is subject to shenanigans... above a certain level of wealth the overhead of establishing companies, tax residencies, and complex debt arrangements become a rounding error.
Some of the mechanisms are loopholes, that might be closed l. But many start to interact with international business regulations that exist for considered reasons, and are harder to change even if it is serving as a loophole.
You end up with only the small wealth (one lifetime as a skilled professional) group getting caught
Sanction them and their companies. Sanction countries that accept these anti-society misanthropes. Bar them from the US and any territories, encourage our allies to bar them as well. Investigate those companies for crimes to the full extent of the law.
Nobody needs these billionaires; we can create new billionaires and new products. They think they bring some sort of ultra speciality but in reality they are doing something millions want to do and their monopolistic success is preventing others from succeeding; knocking these giants down makes rooms for new businesses and products. This is the entire thrust of a capitalistic economy.
As has happened in nearly every European state with wealth taxes. But the elephant in the room is that these policies give the same ineffective, corrupt and entirely worthless politicians even more money to "manage". The very definition of delusional wishful thinking.
this is the key fact. If a wealth tax were enacted and a responsible group were endowed with the money we might reap some value from a wealth tax. Giving American Politicians more tax money is like giving a heroine addict more heroine.
If the ultra wealthy move out a few people will lose their jobs (their family office, some accountants, some property managers will work the same job for someone else). But overall people will not be worse off.
We have been doing this exact experiment in Seattle sine 2024 when Bozos moved out. And last month Howard Schultz moved out as well. The sky did not fall.
Another example- did the average Londoner get better off when Russian oligarch parked their money in London in early 2000s? And likewise - was the average Londoner worse off when that money was frozen in Jan 2022 when Ukrainian war started? Not really…
You also lose the jobs the wealthy were paying for, and the taxes those employees would have paid, and the sales tax the wealthy are no longer paying, and so on.
There was no tax revenue to begin with-nobody paid income taxes in WA before the millionaire tax. The jobs the rich will take with are few and very specialized: tax accountants, security people, some administrative assistants. When billionaires leave whoever mowed their lawn or cleaned their pool will do the same job - for the next owner.
What the politicians will do with these taxes does not matter to me. The only thing I dispute is this sense of doom because, of my god, Bill Gates and Andy Jassy and Howard Schultz and Ballmer will pick up their toys and leave.
London is a highly housing-constrained city, so the most important way of answering this question is, what affect did freezing Russian oligarch money in Jan 2022 have on the London housing market? If it made housing cheaper or otherwise more available, it was good for the average Londoner; and if it did the opposite it was bad. I have no idea which effect dominated or if it even made an appreciable difference compared to everything else that affects the London housing market.
The level of delusional wishful thinking here defies belief. Seattle and all other US "left" strongholds are decomposing and falling apart, with parts of these cities worse off than the third world. Instead of realizing that it's ineffective, incompetent and detached from reality politicians that have brought ruin and misery, you want to hand them even more money.
Parts of these cities worse off than the third world? Have you been to a third world country? Or Seattle, for that matter?
The commonly scapegoated cities in the United States are not experiencing third world conditions. Appalachia is experiencing third world conditions. Hollowed out rust belt cities in the Midwest are experiencing third world conditions. These areas are not run by lefty politicians. The United States has a systemic problem, not a local one.
And yes, the systemic problem is that there are a tiny number of ultra wealthy people with wildly outsized influence on the government of the United States, doing everything they can to reduce the amount they need to pay in taxes while simultaneously ensuring they extract the maximum amount of profit from the US government's wildly excessive expenditures.
> Seattle and all other US "left" strongholds are decomposing and falling apart, with parts of these cities worse off than the third world
You can tell this is true because property values have plummeted and nobody wants to live there any more, right? Or, since that’s not true at all, possibly the people who craft the media you consume are not being fully honest.
I don’t really care about whatever taxes the politicians will heap on the rich. My point is that if the rich leave it will not the economic calamity so many pundits forecast. Life will go on without rich people.
Just look at Oregon for example. It’s a lot like WA state but without the billionaires. And it is a really nice place to live. If WA state ends up like Oregon I won’t mind.
The ultra rich are desperate to maintain their exclusive access to essentially pay no taxes through their "Buy, Borrow, Die" strategy (if you don't understand what that is you should stop and read this: https://gemini.google.com/share/e230bcecaaeb) and so they are using scare tactics / gaslighting around wealth taxes because a wealth tax would disrupt this essentially zero tax strategy.
"Buy, borrow, die" is a bit of a bogeyman of the Left; it's not a common strategy for HNW or UHNW individuals, and to the extent it is used, there are much better ways to close it than a wealth tax, which is coarse and rife with implementation issues.
The main implementation issue with a wealth tax is that it doesn’t at all interact with the capital gains tax. It’s easy to fix the implementation issue by integrating the wealth tax into the capital gains tax (call it unrealized capital gains tax for starters), make the tax refundable when an asset loses value, and netting it against the actual capital gains tax.
With this framing, the wealth tax isn’t a new tax; it is only prepaying the capital gains tax instead of allowing it to be deferred forever.
at least all financial assets (stocks, etc) are easy to assess value so why not start with that? same with gold, silver etc. Some minimal amount you can make it nontaxable to reduce administrative burden.
this a million times. Land easy, already being taxed. Any regulated financial instrument, also easy, take the minimum average yearly price of held assets. Tricky things like privately held companies, maybe we solve that one later, but even then there are valuations made at various points, anchor to those, be conservative in every case. If the gov primarily exists to enforce property rights... then people should pay in proportion to the rights that are being enforced on their behalf.
> Tricky things like privately held companies, maybe we solve that one later
So I spend 30 minutes to set up an LLC and then transfer my assets to that LLC. Now, I don't hold the assets; I hold a stake in a privately-held company.
Ultimately, the solution you come up with needs to be at least somewhat airtight; otherwise, it just penalizes people who spend less money on tax advisors. The generation of income is a fairly well-defined point where assets change hands and you can apply some quasi-clear rules. Ongoing taxes on the potential to make money are a lot harder. So I buy some gold bars or valuable paintings and stash them in the attic. Gold / Picasso appreciates. How do you tax me on that? Do I submit an inventory of everything I own to the government every year? How does the government check - do they get to rifle through my stuff every December?
And hey, here's a cool one: if my parent owns a company and puts it in their will that it's mine when they die, is that promise an asset I owe taxes on every year? It's clearly worth something: it's potential money down the line.
> So I spend 30 minutes to set up an LLC and then transfer my assets to that LLC. Now, I don't hold the assets; I hold a stake in a privately-held company.
Beneficial ownership is a well established concept in law, and this strategy simply would not work. If those assets are easily valued and liquid (stocks or whatever) then the taxes will just end up being passed through as the entity won’t be relevant for tax purposes. Sure you could try to hide assets or offshore them or whatever but you’d be running headlong into outright tax fraud at that point.
You would probably instead see less new public companies, more companies/divisions being sold to various groups under opaque structures and taken private, and a lot more weird borderline legal transactions done between private parties to pretend valuation of private companies or other assets are lower than reality.
> Gold / Picasso appreciates. How do you tax me on that? Do I submit an inventory of everything I own to the government every year? How does the government check - do they get to rifle through my stuff every December?
Yes, of course you would owe taxes on such things assuming they were over whatever exemption limits and such. The government can’t realistically check everyone. They just throw the more obvious offenders in prison when found and keep enough background “random audits” to keep folks scared enough into compliance.
And obviously the government has been making “hiding” such assets harder every year with the ratcheting up of KYC/AML laws. Over time you’d see these requirements for pretty much every major on/offramp for such assets like gold bullion dealers, coin shops, or auctions. A lot already are required to verify your identity and even report transactions. There is no more showing up to a car dealer and paying for a new car with a duffel bag full of cash, much less anonymously. Such a transaction is reported and you’d see this simply expand.
Property taxes exist at least in part because the asset is impossible to hide and more difficult than most to play games with valuation.
> And hey, here's a cool one: if my parent owns a company and puts it in their will that it's mine when they die, is that promise an asset I owe taxes on every year? It's clearly worth something: it's potential money down the line.
Presumably your parents would already be paying the wealth taxes owed on the asset in question. That someone might loan you money against a future inheritance seems immaterial but perhaps I’m missing something here?
If you properly taxed real estate in a progressive way, you wouldn't have to bother with taxing paper wealth at all---the collective value of paper is already reflected in the price of land. People with large paper fortunes inevitably buy real estate, and when they do, their paper wealth inflates the price. This is why median residential housing prices have dramatically outpaced median wage increases, along with anything else tied to real estate, like sports and concert tickets.
A progressive property tax would actually lower housing costs, by reducing real estate prices. There would be a homestead exemption, so there would be no impact on taxes for individual homeowners. I think it would tend to stabilize rents, as larger landholders would be forced to shed properties, which would be snapped up by smaller ones. The overall effect would be a decentralization of real estate, which in turn means a decentralization of wealth.
Let’s do the bog-standard obvious and sane thing and pick a single point in time, once a year and use the value then. Maybe, i don’t know, close of market on the last trading day of the year. At which point it won’t fluctuate again until the new tax year. Then, we can call it “mark to market” because we’re marking the value to the market at a point in time.
Finally, we stop with silly bad faith arguments because fluctuations in stock have been successful taxed for decades. This is how day-traders pay taxes, and it’s not even a little challenging to do.
A friend of mine, a few years ago, had his stock options vest. He didn't sell the stocks. The stocks tanked a few months later. The IRS said he owed income tax on the value of the stocks when they vested.
He owed more tax than his net worth, lost his house, everything, and wound up in a trailer.
He never saw the money he was taxed on.
> bad faith arguments
A person's net worth can have wild gyrations on a daily basis. It's not unusual for a stock to move 10% in a few hours. MSFT dropped something like a third of its value last year. What something is "worth" is an utterly arbitrary notion, and basing taxes on that is inevitably unfair an inequitable. (A lot of effort
and handwaving is done by accountants trying to guess at what something is "worth".) Heck, what is your house "worth"? Do you agree with the tax assessor? I once told the assessor that if he believed my house was worth what he assessed it at, I'd sell it to him at a 10% discount and he can flip it for what he thought it was worth. He wouldn't take the deal.
With taxes on income, that is fairly well understood and can be accounted for to the dollar.
So your friend had a large taxable event occur, ignored any advice that such tax event would persist over the tax year, and failed to act at any time to address his tax shortfall. Sounds like he had a shit tax/financial advisor. And to consume all of his net worth etc, the number of options that vested must have been quite large.
Not going to be sympathetic to someone YOLO'ing their compensation/taxes.
Not an issue. If you trade section 1256 contracts, the current tax code already requires you to report unrealized gains by calculating the gains as if they are sold on the last day of the tax year. Brokers have no issues calculating that and reporting that single number to the IRS.
You seem to forget that given the way taxes work, eventually, anyone, with any amount of money, will be considered "wealthy" because we'll keep running out of other people's money.
You're wealthy, or the definition will change to include you. The spice must flow.
>because we'll keep running out of other people's money.
that doesn't make a whole lot of sense, for two reasons. For one, as even Paul points out in the piece, a wealth tax below what's practically a risk free return on capital (~5%) doesn't eat into the capital stock, it simply means wealth grows slower, but still increases.
Secondly, there's no monotonous historical direction towards higher wealth taxes, in fact the opposite. We're living in an age of low wealth taxation, with only half a dozen countries or so, if I'm not mistaken, imposing one at all.
The risk free rate of return is usually only a point or two above inflation, and I’d argue that real wealth, rather than nominal wealth, is the true measure to look at to determine whether someone’s position has improved, stayed flat, or decreased.
> it simply means wealth grows slower, but still increases
But what does this mean? If you have a load of money in some companies, that's helping to fund their activities, and the companies' share price goes up a bit, you haven't gained any money. And you won't gain any until you sell some shares, which is already taxed.
The debt doesn't just go away, and interest is paid on it. It's not "free". Etrade's best rate is 10.45%. If your stocks go bust, you're still on the hook for the margin debt.
That’s not how it works, though. Buy, borrow, die doesn’t rely on retail margin rates. It’s closer to 3-5%.
Assets are used as collateral for loans that don’t require any repayment until death. Generally the borrower can borrow up to 75% of their collateralized asset, and that loan is not taxed. When they die the assets are passed to heirs and stepped up to their current value as the new cost basis. They’re sold to repay the loan and interest. No taxes paid on the loan “income”, no taxes paid on the capital gains, 3-5% interest paid for the outstanding balance of the loan and I’m sure some of that gets taxed. Because the collateralized asset stays invested the entire time, it usually grows faster than the interest that will eventually be paid.
The 10.4% margin rate is Etrade's best interest rate, and it's only for large amounts. I looked it up.
> When they die the assets are passed to heirs and stepped up to their current value as the new cost basis...no taxes paid on the capital gains
And then your entire estate is taxed at 40%.
> and that loan is not taxed
Of course it is not taxed. A loan is not income, and is not an asset. It's a liability.
> Because the collateralized asset stays invested the entire time, it usually grows faster than the interest that will eventually be paid.
The higher the return, the higher the risk. It is normal practice to borrow money to invest it hoping for higher returns than the interest. It is not a scam.
Let’s say you put $20M as collateral for an SBLOC loan. The collateral amount and grows at ≥7%/year and you’re charged interest on your loan of 4%/year. You pull $1M/year that goes into the loan. This goes on for 40 years.
At death the cost basis is stepped up to the value at the time of death. All capital gains are erased.
Next, the loan is paid back before any distribution to heirs. This is done at 0% tax rate because it happens before any distribution to heirs.
Finally, the heirs get what remains and any inheritance tax applies to that.
So you got to live with no income tax related to capital gains. The capital gains are wiped out upon death.
Had you paid taxes along the way, you’d leave about $37M to your heirs (and none of that would be touched by inheritance tax).
If you did the SBLOC strategy,
The portfolio grew to around $300M. The loan principal and interest are around $100M. Taxes are $64M. Your heirs get to keep $136M.
There’s less risk since there is never any sales over a longer period, so the returns approach the average.
There’s more tax paid by the SBLOC strategy, it just happens very acutely instead of over time. The heirs are also left with significantly more.
All you're saying is that you can borrow money and invest it and hopefully you make more off of the investment than the interest on the money.
A loan is not income. After all, when you borrow a half million to buy a house, you aren't charged income tax on that. You also are not charged income tax on stuff you charged on your credit card.
That's even better. You just transfer beneficial ownership and route dividends to a different bank account. And now you have a LOT more Americans literally invested in Amazon/X/Meta's success. But poor Jeff, he did have to sell his yacht (no, the other one).
Don't speak to loudly of this fact, otherwise some leftist politician could come to the conclusion that human capital – the discounted cash flow of one's future labor income – should be taxed as wealth, too.
:) Here is a crazy thought - what if we had some kind of a narrowed down, specific subset of normal language which would translate into specific computer-level instructions. So for example, instead of telling computer to read something from a file and transform it in a certain way, you actually had a specific instruction to open a file, which worked the same each time you used it and guaranteed to fail if you used it the wrong way? Wow, the possibilities are endless :)
Don’t be ridiculous, that would be extremely hard. Oppressive even, because it’s unattainable to an average person. And it is, otherwise there would be millions of programmers in the world. Was it unattainable or “we have to pay these suckers money, and they have rights and lives outside of work”? Bah! Just make sure to renew your subscription, agent will do the thinking and you bring the money.
But Paul Graham says that the guy from Replit whom he funded told him the source code is "object code" now, so we don't need to look at it all ? It must be utter wisdom since PG managed to get wealthy by selling some website during dotcom-mania so he must have insights we are missing?
> PG managed to get wealthy by selling some website during dotcom-mania
I don't remember how much he made selling the "quickly-killed startup bought by now failed internet giant".
But I'm fairly sure how much money he made building something other people used is peanuts compared to what he made investing early in companies where others built things, instead of him.
Behaviour Driven Development or Spec Driven Development are, loosely, forms of Test Driven Development where you encode the specification into the code base. No impedance, full insight, formality through code.
I think people get really dogmatic about “test” projects, but with a touch of effort a unit test harness can be split up into integration tests, acceptance tests, and specification compliance tests. Pull the data out as human readable reports and you have a living, verifiable, specification.
Particularly using something comparable to back-ticks in F#, which let test names be defined with spaces and punctuation (ie “fulfills requirement 5.A.1, timeouts fail gracefully on mobile”), you can create specific layers of compiled, versioned, and verifiable specification baked into the codebase and available for PMs and testers and clients and approval committees.
I started reading to find out why Yaml? In it's place I found a great post.
One thing though, I loved the "AUTH-1" numbering and the Yaml breaks that into an Auth section, with "1." subsection which I don't like nearly as much, the codification AUTH-1 is more referenceable/searchable.
I just started learning GitLab CI scripts and this was my first exposure to the concept of having executable code inside yaml files. I was like what kind of hell is this?
I don't understand why HN seems so concerned about nailing down its "value proposition".
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