1. Often, things become crimes that get prosecuted when they are done by the wealthy vs. normal people. To be clear, the reason for this is that governments/prosecutors want money and there is a lot of money in going after Kjell Inge Røkke for an illegal boating license but there isn’t for a father letting his 15-year old child drive in a parking lot. There’s a lot of money going after a billionaire for tax evasion but not in someone having a side hustle where they make money under the table selling $50k worth of widgets per year. This is going to lead to billionaires’ actions being surveilled more and thus gone after for crimes more often than the average person. The reward makes it worth it. Billionaires will have far more legal/monetary resources and thus you should naively expect more settlements, particularly without an admission of wrongdoing.
I suppose I recommend people think something like “ok, how bad was this really” when they look at billionaire crimes. Perhaps a litmus test of “would I remain friends with my average non-EA friend if I found out that they had done this”
2. The Giving Pledge has no restrictions on the charitable causes that signatories are allowed to support. As such, unfortunately, as you would likely expect, the vast majority of donations basically go to vanity projects to improve self-image that have little to do with trying to improve the world, let alone try to do so effectively. The median philanthropic gift in terms of impact is something like a generic climate organization with many philanthropic gifts going to building a building at a college to get their name on it or arts museums and such. A non-negligible amount is also tax evasion.
I suppose I recommend people think something like “ok, how bad was this really” when they look at billionaire crimes.
And also billionaire acquittals! Convictions just don’t correlate that well with commonsense morality, in both directions.
This project has honestly made me kind of nihilistic regarding interpreting white-collar crime; it seems like you often need to spend a very substantial amount of time digging into the details to actually understand how you should update on someone’s behavior. (I found this book helpful, for those interested in reading more.)
Point 1 strikes me as probably incorrect. While there may be more money to get in going after higher net worth individuals, it is also far more expensive because they can set themselves up with excellent legal representation. Unfortunately I don’t have a reference for this but I have a vague recollection of reading in multiple places that e.g. gutting the IRS disproportionately benefits the wealthy because the IRS then does not have the funding to pursue more complex and better defended cases, even though there is more money to be had there.
Similarly for other crimes, including things that are obivously wrong and not just ‘would I feel that bad if my friend did it’ level, I would expect there to be less of this reaching prosecution among the very wealthy than among average people who committed similar crimes (such as sexual or generally violent assault, especially when committed against people who are not themselves very wealthy)
Sorry, but in your first link it literally says “But, audit rates have dropped for all income levels—with audit rates decreasing the most for taxpayers with incomes of $200,000 or more. IRS officials said audit rates declined due to staffing decreases and because it takes more staff time and expertise to handle complex higher-income audits.” So I am confused by that reference, as it seems to be exactly what I said.
My general point was however not about taxes specifically, I just thought taxes might be one example. I am more generally surprised that people think for crimes overall that the wealthy are more persecuted. My impression is that most of human history indicates the opposite.
I misunderstood, perhaps. Audit rates are primarily a function of funding—so marginal funding goes directly to those audits, because they are the most important. But if the US government wasn’t being insane, it would fund audits until the marginal societal cost of the audit was roughly equal to the income by the state. The reason I thought this disagreed with you point is because I thought you were disagreeing with the earlier claim that “This is going to lead to billionaires’ actions being surveilled more and thus gone after for crimes more often than the average person. The reward makes it worth it. Billionaires will have far more legal/monetary resources and thus you should naively expect more settlements, particularly without an admission of wrongdoing.” This seems to be borne out by the model it seems we’re both agreeing with, that higher complexity audits are more worthwhile in terms of return.
And yes, I think that per person, the ultra-wealthy, rather than just the people making 200k+, are far more likely to be investigated and prosecuted for white collar crime, because they get more scrutiny, rather than based on whether or not they commit more crime, even though they are more likely to get off without a large punishment via lawyers. But the analysis looked at rates of guilt, not punishment sizes.
I agree that less money to the IRS will benefit the wealthy more but this is because the IRS already mainly audits wealthier people and thus less audits disproportionately reduces audits on the wealthy. This is similar to how tax cuts nearly always help the wealthy… because the wealthy pay the vast majority of taxes. It’s nearly impossible to cut taxes without the wealthy paying far less dollars in taxes than a middle class/poor person.
While more expensive to pursue cases against the wealthy, it is more than worth it when it comes to the increase in reward.
Some things to point out:
1. Often, things become crimes that get prosecuted when they are done by the wealthy vs. normal people. To be clear, the reason for this is that governments/prosecutors want money and there is a lot of money in going after Kjell Inge Røkke for an illegal boating license but there isn’t for a father letting his 15-year old child drive in a parking lot. There’s a lot of money going after a billionaire for tax evasion but not in someone having a side hustle where they make money under the table selling $50k worth of widgets per year. This is going to lead to billionaires’ actions being surveilled more and thus gone after for crimes more often than the average person. The reward makes it worth it. Billionaires will have far more legal/monetary resources and thus you should naively expect more settlements, particularly without an admission of wrongdoing.
I suppose I recommend people think something like “ok, how bad was this really” when they look at billionaire crimes. Perhaps a litmus test of “would I remain friends with my average non-EA friend if I found out that they had done this”
2. The Giving Pledge has no restrictions on the charitable causes that signatories are allowed to support. As such, unfortunately, as you would likely expect, the vast majority of donations basically go to vanity projects to improve self-image that have little to do with trying to improve the world, let alone try to do so effectively. The median philanthropic gift in terms of impact is something like a generic climate organization with many philanthropic gifts going to building a building at a college to get their name on it or arts museums and such. A non-negligible amount is also tax evasion.
And also billionaire acquittals! Convictions just don’t correlate that well with commonsense morality, in both directions.
This project has honestly made me kind of nihilistic regarding interpreting white-collar crime; it seems like you often need to spend a very substantial amount of time digging into the details to actually understand how you should update on someone’s behavior. (I found this book helpful, for those interested in reading more.)
Point 1 strikes me as probably incorrect. While there may be more money to get in going after higher net worth individuals, it is also far more expensive because they can set themselves up with excellent legal representation. Unfortunately I don’t have a reference for this but I have a vague recollection of reading in multiple places that e.g. gutting the IRS disproportionately benefits the wealthy because the IRS then does not have the funding to pursue more complex and better defended cases, even though there is more money to be had there.
Similarly for other crimes, including things that are obivously wrong and not just ‘would I feel that bad if my friend did it’ level, I would expect there to be less of this reaching prosecution among the very wealthy than among average people who committed similar crimes (such as sexual or generally violent assault, especially when committed against people who are not themselves very wealthy)
Data seems to indicate otherwise.
https://www.gao.gov/products/gao-22-104960
https://www.usatoday.com/story/money/2023/11/09/irs-uses-funding-to-audit-wealthy/71486513007/
Sorry, but in your first link it literally says “But, audit rates have dropped for all income levels—with audit rates decreasing the most for taxpayers with incomes of $200,000 or more. IRS officials said audit rates declined due to staffing decreases and because it takes more staff time and expertise to handle complex higher-income audits.” So I am confused by that reference, as it seems to be exactly what I said.
My general point was however not about taxes specifically, I just thought taxes might be one example. I am more generally surprised that people think for crimes overall that the wealthy are more persecuted. My impression is that most of human history indicates the opposite.
I misunderstood, perhaps. Audit rates are primarily a function of funding—so marginal funding goes directly to those audits, because they are the most important. But if the US government wasn’t being insane, it would fund audits until the marginal societal cost of the audit was roughly equal to the income by the state.
The reason I thought this disagreed with you point is because I thought you were disagreeing with the earlier claim that “This is going to lead to billionaires’ actions being surveilled more and thus gone after for crimes more often than the average person. The reward makes it worth it. Billionaires will have far more legal/monetary resources and thus you should naively expect more settlements, particularly without an admission of wrongdoing.” This seems to be borne out by the model it seems we’re both agreeing with, that higher complexity audits are more worthwhile in terms of return.
And yes, I think that per person, the ultra-wealthy, rather than just the people making 200k+, are far more likely to be investigated and prosecuted for white collar crime, because they get more scrutiny, rather than based on whether or not they commit more crime, even though they are more likely to get off without a large punishment via lawyers. But the analysis looked at rates of guilt, not punishment sizes.
I agree that less money to the IRS will benefit the wealthy more but this is because the IRS already mainly audits wealthier people and thus less audits disproportionately reduces audits on the wealthy. This is similar to how tax cuts nearly always help the wealthy… because the wealthy pay the vast majority of taxes. It’s nearly impossible to cut taxes without the wealthy paying far less dollars in taxes than a middle class/poor person.
While more expensive to pursue cases against the wealthy, it is more than worth it when it comes to the increase in reward.