You Can't Feed The Poor By Taxing @JeffBezos ' Wealth

Odd as it sounds I assure you this is true

You can most certainly tax Jeff Bezos and use this to then feed the poor. But you cannot tax the wealth of Jeff Bezos and then feed the poor. Making this sort of rant more than a little misleading:

Genuine question, how do people STILL believe this shit?

The world has more wealth than ever, Elon is almost a trillionaire. We have more billionaires than ever.

How much MORE wealth do we need before normal people can afford the basics?

As with yesterday the basic point is this:

In the income approach, GDP is measured as the sum of compensation of employees (wages and salaries paid to employees and their employers’ social contributions), plus gross operating surplus (business profits) and gross mixed income (profits of the self-employed), plus taxes on production and imports less subsidies.

As we see wealth is not a part of GDP. Wealth is not income that is.

OK. But as we also know from GDP all incomes equal all production and also all consumption. This does mean - no, really, this is definitional - that if we desire to increase consumption by some sector of society then we’ve got to increase production across society. We might also say that we’d like to increase the consumption of one part of society by taking some income off one and directing that income to another — this works despite the fact that it’s akin to theft. We can move consumption of what is produced around. But we cannot increase consumption overall without increasing production overall.

So, think of that $200 billion in Amazon stock that Mr. Bezos apparently has stuffed under his mattress. We tax that, the 5% tax by Bernie Sanders say. $10 billion with which we can do such wondrous things like, say, feed the poor. Except we’ve not enabled ourselves to do that. The amount of food in the world is exactly what it was before we taxed. We’ve thus added $10 billion to the demand for food while increasing the amount of food by zip. More money chasing the same amount of goods is also known as inflation. We’ve just made food more expensive for everyone on the planet.

There’s also the issue of where that $10 billion comes from. This is wealth, this is money - by definition - not currently being consumed. Someone, somewhere, has to pay the $10 billion to Jeff so he can pay his tax bill. This clearly means some other people pay Jeff from their wealth to enable Jeff to pay his tax bill. As this cascades through the economy there is - must be - some amount - $10 billion, say - that would have been invested in something else other than Amazon stock which now will be. That’s the only way we can get some of the stock of wealth available for consumption now, by converting some of the stock of wealth into consumption now.

In order to increase inflation in foodstuffs we’ve just reduced the capital stock of society. Presumably something that will make society poorer in the future.

The only way out of this is if we say, well, acshully, we’re not going to spend the proceeds of a wealth tax upon consumption. Instead, we’re going to spend it on investing. But now it’s going to be investment by government!

And, well, OK. But this wealth tax only applies to billionaires, right? Those who, by very definition, have proven to be extremely efficient at the investment of capital. And whatever we do think of the investment performance of government - not a lot in my case - we’re certainly not going to start arguing that government is as efficient as the very tippy toppy of the 0.01% who have invested their way to becoming billionaires.

You can indeed - and we do already - tax the income of Jeff Bezos to increase consumption by the poor. But you cannot tax the wealth of the rich to increase consumption by the poor. Because taxing wealth doesn’t increase aggregate production therefore does not offer an opportunity to increase aggregate consumption.

Taxing wealth only works if we think that taking money off the most efficient investors on the planet - the billionaires - can be replaced by the efficiency of investment by politicians. And let’s be honest here. We have studied investment by Congresscritters and they do do better than the average fund manager or individual investor. But that 20% a year they gain from their insider information still falls a long way behind the returns of the most successful investors of our times, the billionaires people want to nick the money off.

Taxing income works, taxing wealth does not. QED.