Dylan Matthews just posted a Vox article “If you’re such an effective altruist, how come you’re so rich?” which addresses critics of effective altruism’s billionaires.
My TL;DR
A lot of recent criticism of EA seems to come from the fact that it has a couple of billionaires now as supporters
These billionaires however are some of the biggest donors to US candidates that would increase taxes on them
Open support for raising taxes, e.g. Moskovitz tweeted the other day: “I’m for raising taxes and help elect Dems to do it”
The broader EA community skews heavily left-of-center (typically supportive of higher taxes and social welfare)
Effective altruism was founded explicitly on voluntary redistribution of income from people in high-income countries to low-income countries (e.g. Giving What We Can) and most of the communities founders give a significant portion of their incomes
Given that the billionaires do exist, what else would you rather they spend money on?
That’s just my TL;DR – feel free to put in your own summaries, comments and critiques below.
I disagree with Moskovitz that raising taxes on American billionaires would be a good thing, and I think most EAs should also disagree.
Individuals who value the lives of all people equally, regardless of nationality, should prefer a system that does not increase taxes on EA billionaires , because the American government only spends its resources a bit more democratically and in a way that is far less efficient at improving wellbeing or reducing inequality, and in many cases has negative expected value.
95% of the world’s people, including all of the world’s poorest people, do not get a say in the American government’s spending through voting.
If they did, it is likely that they would vote to radically distribute USA’s wealth to poorer countries, rather than having close to 99% American GDP spent primarily on Americans.
The 5% who do get a say in the American government’s spending get a very indirect say via representative democracy.
And this group (and electorates in other rich democratic countries), have time and time again failed to elect leaders who are willing to enact policies which value the lives of all people equally.
And not only does the American government place less value on the lives of most of the world’s poorest people, the American government has time and time again actively spent its money on harming other countries for its own benefit: https://en.wikipedia.org/wiki/United_States_involvement_in_regime_change
So I feel comfortable saying I would rather Dustin Moskovitz and Sam Bankman Fried decide how to spend their wealth, than have someone like Donald Trump decide how to spend it.
I do think it’s possible that billionaires in general spend their money in a way that is even less efficient than the American government at improving wellbeing and equality, but I’d say with something like 80% confidence that this is not true.
The way I’d phrase this more succinctly, is: “sure Elon Musk is spending his money in badly, but why do you think Donald Trump will spend it in a better way?”
(By the way, I think this is a great example of a bias resulting from EA not being diverse enough. If EA was more international, we wouldn’t have so many EAs essentially endorsing American nationalism, which is very much antithetical to the idea of impartiality!)
EDIT: One idea I’d be interested in reading more about, is the idea of EA billionaires donating money directly to the governments of the poorest democracies.
EDIT 2: Based on discussion in replies, I realised I ignored a key consideration—how the taxes would be raised. I’d support massively raising a land value tax or other (successfully enforced) property taxes on US billionaires, because it wouldn’t affect EA associated billionaires that much.
EDIT 3: I was wrong to say that US government spending is only a bit more democratic than billionaire spending. Although US government spending is extremely undemocratic, it’s much more democratic than billionaire spending.
It’s worth flagging the obvious solution of supporting raising taxes on billionaires while allowing them to donate instead thanks to the charitable tax deduction. (I mention this in the comments to my post on Billionaire Philanthropy, which Dylan Matthews cites and draws upon for the “Given that the billionaires do exist, what else would you rather they spend money on?” argument.)
P.S. Speaking as a New Zealander, I’m pretty confident that most of my compatriots believe that American billionaires should pay more taxes!
Although donating and tax-deducting $100 only allows them to reduce their taxable income by $100, right? Which reduces their tax by $40, if their marginal tax rate is 40%. It would be better if charitable donations were actually counted as tax contributions (equivalently, if they were subtracted from tax owed).
Edit: this would mean some tax-evaders trying to donate to charities and then recapturing/embezzling back the funds, but still might be worth it.
In order to make this even remotely plausible, the rules for tax deductible charities would need to be far more stringent. And then you get a situation like we currently have in Austria, where not a single EA-aligned charity is tax-deductible at all.
Maybe you could do 70% with some intermediate level of stringentness. And plenty of EA charities are tax-deductible in the US, which is where much more of the wealth is.
Risking an understatement, I don’t think giving people a way to entirely circumvent any democratic process on the decision of what to do with their tax money is a good idea.
But if the government is giving them the way out of paying taxes, that isn’t circumventing the democratic process.
If I’m not wrong, in the UK some companies can invest some potential tax money into R&D instead, but since the government allows them to do this I don’t think it counts as circumventing the democratic process.
This is technically correct. I’ll rephrase to “I think it would be a bad democratic decision to let billionaires spend their tax money themselves without oversight”.
That is a very good solution which I would support!
I’d expect New Zealanders to largely want American billionaires to pay more taxes, but do you think the same would be true for New Zealanders who are into EA (and so are more dedicated to impartiality than most New Zealanders?)
Congress sets the budget, not the president. If you look at proposed white house budgets for the last few decades or so compared to what is enacted by congress, the final budget hews closer to congressional priorities. The exception to this is funding for military endeavors which constitute a significant portion of the discretionary budget. A chunk of military spending is determined by the president and their propensity for wars (see: Bush and the Iraq war, Obama and drone strikes).
The reasoning behind EAs not wanting to tax billionaires seems to be:
The average dollar spent by an EA billionaire is much more effective than the average dollar spent by the U.S. government.
It seems unlikely the U.S. will change its outlay substantially towards utilitarian values soon
Therefore, EAs should not encourage taxing billionaires
I think this is too narrowly focused. Some other considerations:
Billionaires are as wealthy as they are because they have an outsized role in setting the political agenda and writing the laws (especially since citizens united).
The U.S. government spending is not as effective as it could be because it prioritizes billionaire political preferences over utilitarian ones.
If billionaires were taxed more, the marginal increase in government spending would likely be spent on things preferred by the political group that was able to enact greater taxes on billionaires. My impression is that this political group would spend it in ways much more effective than the current average spending.
While returns to capital exceed the rate of economic growth, those worried about the well-being of the poor will eventually need to address income inequality. This is especially acute if economic growth cannot continue forever and wealth generation gets closer to being zero-sum. Given the political power wealth buys, it gets harder to correct wealth inequality the longer it goes on and concentrates except with destructive revolutions, if such revolutions are even possible.
At extreme levels of wealth inequality (arguably the U.S. is at such levels), wealth inequality reduces economic growth and competitiveness.
Well-being is not just absolute but also relative; people’s perception of their well-being is heavily influenced by how wealthy they are compared to others. Reducing inequality (to a point) can improve well-being. This is effect is non-linear and dependent on cultural values and on absolute well-being. I’m not sure what the “ideal” Gini coefficient is (https://en.wikipedia.org/wiki/Gini_coefficient), but in general people [prefer a far more equal distribution of wealth than present] (https://whorulesamerica.ucsc.edu/power/wealth.html).
My take on this is:
Taxing billionaires more is necessary to reduce income inequality.
Reducing income inequality is a valid instrumental goal. In developed countries, it is likely better at improving well-being than absolute wealth gains.
Taxing billionaires should be accompanied by efforts to direct the extra tax dollars effectively.
Just to spell this argument out in more detail: EA billionaires have 30B-50B. All billionaires combined have maybe 10-15trillion [1]. For taxing billionaires to be net negative, we approximately need the marginal EA dollar to be worth 200-500x that of marginal US congressional priorities (more precisely the delta between the marginal dollar used by marginal US federal gov’t and the marginal dollar used by non-EA billionaires).
I do think this argument basically clears. I think global health grantmakers in EA are trying to clear an 1000x bar (1000x better spending than increasing American consumption). Which is higher than 200-500x, but not by much.
We might also hope that EA billionaires will take up a larger fraction of billionaire wealth in the future.
(I think your other considerations are important but I have not given much thought to them. I may mull over this a bit after work today)
Source says 9T, but unclear because the source is 2019?
And this is excluding Bill and Melinda Gates Foundation, Rockerfeller Foundation etc
This argument hinges on a very specific and temporary situtaion. I don’t think this is the way you want to set long-term policy.
You also measure effectiveness in ways the public might not agree with, which is another part of why a democratic process here is important.
I think going forward, the difference in effectiveness between the average US billionaire dollar and average US government dollar will increase, given the chances of
more US billionaires being influenced by EA
more US EAs becoming billionaires
and
of Donald Trump winning in 2024.
I agree that a democratic process here would be good, but again I’d emphasise that US political system excludes 95% of people (and obviously, animals, children and future generations).
I was wrong to say that US government spending is only a bit more democratic than billionaire spending.
Although US government spending is extremely undemocratic, it’s much more democratic than billionaire spending.
It’s plausible to me that sacrificing this much impartially measured effectiveness to incorporate the opinions of 5% of adults is worth it, but I don’t think it is. (This somehow reads like it’s meant to be sarcastic / rude in tone, it isn’t meant to be!)
(I don’t know if this is what you’re getting at, but your comment prompted a bunch of thought in me.).
I find epistemic humility confusing.
I think I trust my own judgement about the proper marginal allocation of limited resources much more than I trust the judgement of the democratic process.
I also think I trust my morals about what’s right to do much more than I trust the implicit morals implied by the American democratic process (and to be clear, America is a really good country! Other countries are usually worse, probably).
I think these are contentious claims in some domains. One person’s modus ponens is another’s modus tollens.
I guess my perspective re:
Is something like “welp, epistemic humility is hard but I sure still basically think that I trust my judgement more, ah well. So much the worse for the democratic process, I guess.”
I can imagine on a surface level a reasonable person thinking “well the democracy process disagrees with me, so even though I spent several years carefully thinking about the proper allocation of limited resources, and I see clear causal reasons why people might be selfishly biased, and I see clear irrationalities on top of that, and even though the observed results of the democratic process is absolutely awful, the sheer number of disagreeing people is strong enough, and the track record of technocratic experts is bad enough, that basic epistemic humility tells me I ought to allocate resources by American people’s vote over that of my own motivated judgement.” But I can’t viscerally imagine living life like that, and I don’t know how to shape the full argument in a reasonable way.
I don’t think there’s an “agree to disagree” here, or at least not a clear one.
I think basically the synthesis view when “my own best judgement about what’s right to do” disagrees with “the aggregated beliefs of the democratic process” has to be something like “update against both my own judgement, and also update against the American democratic process.” I think how much relative weight you put on the two things is a hard question, but ultimately I place much more weight on my pre-existing views before factoring in this consideration, and relatively little weight on the American democratic process.
I do think “What will the average commonsensical American believe” is a part of my moral parliament for reasons of moral cooperation and humility. But I think it’s a relatively small part, compared to other considerations.
I want to write a detailed response to this, but usually that means I end up not writing anything, so I’ll just
state my main pointquickly write a jumbled mess:You can (and should) support the democratic process while also acknowledging that it currently works badly in regards for effectiveness, and wanting to improve it.
Your view seems to me to assume everything is static, and the quality of democratic decision making cannot change. I, on the other hand, think we can influence the public and democratic institutions to learn to analyze, compare numbers, and set priorities.
They won’t necessarily arrive at our priorities or solutions, but that might be because we’re a small group and we’re missing a lot of important things. I think I’m a smart person and I think you’re a smart person too, and we’ve learnt to employ some important tools in our thought process. The humility here doesn’t mean thinking “my contribution is comparable worthless”, but rather “small groups have very bad failure modes, I should use my contributions and synthesize them with the existing processes”.
Also as freedomandutility pointed out, most people aren’t represented by the American democracy specifically, and worrying about their welfare isn’t in the consensus. So I’m not saying “stop giving to developing countries and animal welfare because everyone doesn’t agree”. When I talk about democracy here I usually mean the recipients of aid should be part of the decision making, as well as most EAs together and not just boards of some non profits. The only part I really want the American democracy specifically to deal with is Americans’ tax money, because I feel it naturally belongs to the American people and not to the specific taxpayer.
Yeah, I think the basic argument holds at surface-level considerations.
It’s not just an argument against raising billionaire taxes, but also an argument for reducing them. It raises the question—what is the appropriate tax rate?
At one extreme is zero tax (or even subsidizing billionaires, which one could argue happens quite a bit). Would the world be better off with no billionaire tax and correspondingly much, much smaller U.S. government discretionary spending? Some people with certain political persuasions would say yes. But I think that undervalues the role of shared funding via government services. I’m skeptical billionaires would fill in the funding gap. Plus it ignores how wealth influences politics and wealth inequality influences well-being.
That’s a good point, I did think about the “reversal test” after I posted this comment and about whether I’d support lowering taxes on US billionaires, and I think I would.
But I think I excluded a key consideration—how the tax is raised. I’d support massively raising land value taxes or other property taxes (if they could successfully be enforced) on US billionaires.
But I think I’d support lowering other types of taxes on US billionaires to close to 0, depending on what proportion of the US government budget comes from taxing billionaires.
I strongly agree with most of this, and also wanted to point out that Congress decides on the budget, so thanks for writing that better than I would’ve.
But on this particular point:
I’ll say that I don’t know how the American left works, but here in Israel the social-democratic left (which I vote for) is very good at saying “Here are some important and ignored problems, we have to spend money to solve them” but then very bad at saying “Here’s where money needs to go to effectively solve the problems”.
In 2021 my party became part of the government for the first time in ~20 years, and were very good in working to enact laws, but bad in setting economic policy or in spending money from their ministries’ budgets.
Thanks for your comment!
Actually, I think my argument is weaker than this. My reasoning is that I think the average dollar spent by billionaires in general is more effective than the average dollar spent by the US government, but obviously this is disproportionately affected by the effectiveness of spending by EA-associated billionaires. I’d say this is the part of my argument I’m least confident about.
I think this is true, but I also think nationalism is a relatively larger constraint on the effectiveness than billionaire selfishness.
I agree with you, but I think it would still be less effective than if that money was spent by billionaires, because the political group here (progressive Democrats) still place much less value on foreign lives and prioritise global issues less than the average billionaire (again, the effectiveness of the average billionaire dollar is massively skewed by EA associated billionaires).
I don’t think we should be super confident in Piketty’s claims. However, I am strongly pro land value tax anyway, which could be a way to raise taxes on American billionaires, and would also spare most EA money, so I would support this particular approach to raising taxes on American billionaires.
But that being said, I’m not disregarding the importance of reducing inequality. Part of my argument is that “raising taxes on American billionaires will have a net effect of reducing inequality inside America, but of increasing global inequality”, unless the taxes are raised via land value tax, or perhaps another form of property tax.
I’m not entirely sure whether I want better growth in the USA or not because of climate concerns, but on balance I’d say that this is a downside. But I think less growth in the USA is outweighed by wellbeing gains from not raising taxes on billionaires.
This is an important point, but I expect the effect of relative income on wellbeing is driven primarily by income relative to people around you, and is not affected by distant billionaires.
Personally, I see reducing income inequality as a terminal goal too, but I think global wealth inequality matters far more than wealth inequality inside one country, and I think taxing American billionaires more (except for via land value taxes or other property taxes) will worsen global wealth inequality.
Thanks for writing this. I think the communist ideology of “Tax good. Billionaires bad” is ridiculous. I prefer, “Donating good. Founding companies good. Bureaucrats bad.”
I don’t think communist ideology is relevant here.
The ideologies at fault are:
nationalist ideology which barely values foreign lives or interests
naive statist ideology which overestimates how effective, democratic and good governments are
In fact, I think communists and European socialists are much less likely to hold these views than the mainstream American left.
Personally, I think “billionaires in general bad” too, but also “governments of rich countries, and in particular government of America, worse”.
Thanks for the comment—I agree with your point on the ideologies at fault! “Woke ideology” would have been more fitting.
I would still disagree with you haha, but never mind.
Hi Luke, your post raises an important and more general question, which is whether EA should continue avoiding cause areas and positions that are perceived as highly political and partisan (such as ‘soak the rich’ tax policies). I think we should avoid these.
You’re accurate that ‘The broader EA community skews heavily left-of-center’, but I think this is a serious problem that could handicap future movement-building and public credibility. Of course, for people who are left-of-center, it might not feel like a problem, because such folks share many of the same political priorities and political blind spots; but to those who aren’t in that in-group, it can be quite frustrating.
As a libertarian centrist, I was first attracted to EA 6 or 7 years ago because it seemed fiercely anti-partisan, frustrated by mainstream politics, skeptical about the efficiency of government do-gooding, and willing to choose its battles very carefully, so as not to alienate smart and ethical people of whatever political persuasion. The early EA ethos seemed to implicitly view many government programs as ineffective pseudo-altruism that wasn’t based on reason, evidence, or consequentialist considerations. EA also seems laser-focused on cause areas that were important, tractable, and neglected—and understood that almost every politically controversial issue is low in both tractability (since controversy undermines consensus about what to do) and neglectedness (since politically controversial topics get huge attention in media and huge funding in academia and lobbying).
But over the last few years, I’ve sensed some mission drift towards left-of-center political cause areas and views. This is exemplified some common tropes in EA Forum posts, such as contempt for Trump supporters and Brexit supporters, fierce anti-nationalism, stereotyping of older conservatives as witless reactionaries, increasing focus on reducing economic inequality (rather than just reducing poverty & promoting economic growth), etc.
In the current polarized social media landscape, I think the EA movement should be extremely careful not to sound like just another Leftist, globalist, Millennial/Gen Z activist movement. Of course there are in-group signaling benefits for promoting & rewarding the political views that happen to be common among current EAs. But in the long run, if EA is perceived by centrists, conservatives, libertarians, nationalists, religious people, etc as an unreflectively Leftist partisan movement, it will get a huge amount of political blowback and backlash, and it will alienate many of the most intelligent, capable, experienced, ethical, and helpful people in the world—including potential donors, researchers, and advocates.
These are all fair points. For myself, I’ll say that (a) we have a lot of evidence internally that Vox’s readership is pretty left-leaning and (b) I care a lot about persuading people of core EA ideas, like giving impartially and effectively, the importance of global poverty/animals/future people, etc. So naturally when I’m aiming to persuade, I tend to make arguments I think will make sense to the audience I know I have.
I didn’t intend the piece to alienate EAs who don’t have center-left politics, and apologize if I had that effect anyway. I agree that a strength of the movement is the relative lack of ideological litmus tests, and I hope that continues.
Hi Dylan,
Thanks for the reply. I do appreciate that Vox’s readership leans left, and it can be useful to tailor one’s messaging to the expected readership.
Trouble is, in the social media era, articles intended for one readership can easily get picked up, shared, mocked, trolled, satirized, and misunderstood by people from other political perspectives. So I’m worried about conservatives who see the article might end up thinking that EA is ‘just virtue signaling for liberal Vox readers’, or ‘just an excuse to push the Soros/WEF globalism agenda’, some such.
As one of the (few?) EAs with a substantial social media following among conservatives, I might be more tuned in to these issues than some other folks might be.
The takeaway is: political polarization has almost never been higher than it is today, mostly due to social media (if we agree with Jonathan Haidt’s take on it), and if EA becomes associated with the Left, whether strategically or accidentally, that will lead to big problems down the road.
As someone who is left-of-center, I agree that EA sometimes feels like it’s absorbing some bad ideas from the American centre-left (but I’m not 100% sure if I could find evidence for this).
I think a lot of it is because of Trumpism taking over the Republican Party, which has made having the Democrats in power important to many EA cause areas.
But I do think that a commitment to impartiality in EA has always implied fierce anti-nationalism, and I do think EA has always practically been a globalist movement.
But I agree that spending resources on partisan political issues is not going to be very cost-effective.
Hi, thanks for your comment.
I do worry that it exemplifies a certain strand of EA thinking that often assumes (without much epistemic humility) that Trump-style populism is obviously worse for EA cause areas, or for total expected sentient utility, than Biden-style woke Leftism is. For those of us who have been subject to censorship and cancellation by irrational woke activists, or who have seen how woke activism has undermined the values of reason, evidence, impartiality, and free speech in American academia, media, government, and corporations, that conclusion is far from obvious.
In my opinion, neither American political party is at all aligned with EA thinking, priorities, cause areas, or ethics, so we should be very wary of assuming that either party is a natural or reliable supporter of EA ideals and practices, or it necessarily better than the other party.
With regard to nationalism, that’s a more complex and nuanced debate that deserves a longer discussion. I think that many conservative nationalists (e.g. Yoram Hazony) view nationalism (for every nation) as the most effective and most stable way to promote overall global well-being, and to avoid exploitation by exploitative global institutions that don’t actually promote global well-being, and that often reflect the geopolitical interests of just a few powerful nations.
I don’t have time to write a full response, but I want to flag that:
Any choice here—including “promoting growth while ignoring inequality”—is very political. You cannot have an a-political movement fighting poverty.
I think Geoffrey used ‘political’ to mean ‘partisan’ in this context
This is my first post, as despite being aware of EA for quite some time, I’ve always been sceptical of it for reasons hinted at in this article. Inevitably, after reading a bit of EA stuff I start to think, “But what about power?” There seems to be an unwillingness to talk about power: how it’s exercised, how it can be controlled, how “we” can take control. I find the notion comical that you can consort with billionaires and retain even an iota of power. These are people who control more wealth than most of us can even understand. I find it similarly absurd to talk about donating to the Democrats as pro-tax. US democracy is crumbling and giving money to the hopelessly compromised and comically incompetent crew who are unwilling and unable to do anything about it—and who largely benefit from the system—isn’t going to do anything to change that.
I’ll finish by pointing out that I am here, and that what attracts me to EA and has drawn me here, is the sense that beneath the naivete about power there is an open mindedness. I think EA might present the opportunity to have outcome-focused conversations about power in a manner less bound by dogma or “realism” than other forums. And yes, I look forward to my argument being challenged with evidence of good EA writing on power!
I don’t think this matches EA’s historical experience of talking to billionaires fwiw.
I’ve just been reading up on earlier EA forum posts about democracy and billionaire spending in light of the FTX saga that broke this week.
This comment did not age well.
Lol I’ve lost a lot due to recent events, so on a personal level part of me really want to just agree with you and just say that we should wash our hands and agree to not interact with billionaires.
But I don’t know, I guess I still think I have at least an iota of power still. So I think the comment you replied to is still literally correct.
And I think it’s correct in spirit too, if maybe not for me personally.
Like, I think some other EAs who talk to billionaires have some power, though I guess I could be more cynical and I don’t know what constraints they’re operating on. Still, e.g. there are at least millions of bednets that would not be possible without consorting with Good Ventures and money that implicitly came from Facebook and Asana.
At the time I find the comment I replied to literally false. I still believe this.
I agree with you that the original comment, taken literally, is probably false and that EAs consorting with billionaires can still retain some power.
But I think the original comment by Berta had a good point in that there seemed to be a general naivete by EA about power and other people’s intentions. However, that is just from my vantage point as someone who does not work at an EA org and is not in any inner EA circle.
I think recent events have definitely lowered the general level of trust within the EA community. But that is not necessarily a good thing and I hope EA does not overcorrect, either. Getting the balance right will be tricky, but I think Berta was on the right track in that EA could benefit from thinking and talking about power more.
Thanks. Re:
I’ve updated slightly downwards on the value of special information for what it’s worth. Especially my own.
I think EAs should spend more time engaging with how to more evenly distribute power between different agents, but I think the best thinking on this is in the tradition of internationalist libertarian socialism, not in the mainstream American left.
I don’t think EAs should adopt the idea popular amongst American liberals, that giving more money to the US government, which is probably the world’s most powerful agent with a strong history of interfering with democracy in other countries, and was until recently run by Donald Trump, is an improvement on the status quo of billionaires having more power than they ideally should.
I’ll do a post on “what EA can learn from libertarian socialism” at some point.
EDIT: I do think there’s a case to be made that “evenly distributing power to reduce risks from reckless profit maximisation and authoritarianism” isn’t neglected, and is why EA doesn’t have much writing on it.
Thanks for contributing this critique, your invitation for argument, and your open-mindedness!
I think one important inequality in the distribution of power is that between presently living people and future generations. The latter have not only no political power, but no direct causal power at all. While we might decry a world where we have to persuade or compel billionaires -- or seek to become billionaires ourselves—to have much hope at large-scale influence, these tools are much better than anything future generations have got. Our power over future generations is asymmetric and terrifying: their mere existence may depend on our present choices. To the extent that we might care about the distribution of power intrinsically and not just because of the effects on welfare (I don’t personally find this view compelling), it seems like the highest priority redistributions of power are to those who have the least at present. One avenue of EA research I am excited about focuses on how we can build institutions and new systems of power to represent the interests of future generations in present political arrangements. You might also be interested in this analysis of opportunities for improving institutions by the Effective Institutions Project—which I think is very good EA writing on power.
Animals find themselves in a somewhat similar political situation to future generations: that is, basically powerless. Albeit for different reasons, of course.
Congrats on the first post and welcome to the forum!! I look forward to hearing views on EA and power. :-)
I can believe this for Moskovitz, but as for Bankman-Fried I don’t think “moving your company to the Carribbean” is a signal saying “I want to pay more taxes”.
I thought that was more to do with being a country that allowed them to operate at all rather than tax reasons.
Nevertheless it does send a certain signal to the public. The way things look is important, especially when it comes to completely legal ways to circumvent taxes—where intent plays a role.
The justification of crypto regulation requires background information that outside observers don’t have. Also, it’s impossible to judge from the outside whether or not tax savings was one of the arguments considered in addition to the regulatory situation.
He’s an American and still has to pay American taxes.
Yeah, if this is basically accurate then people really need to highlight this more frequently and immediately in response, as I’ve repeatedly heard the accusation that SBF just avoids taxes by living in the Bahamas. (Granted, in this case it’s about the company rather than his income, but the point is still relevant in case anyone doesn’t realize that, which seems to be a large number of people: being fully taxed by a country you don’t live in is not the most intuitive thing)
Not a tax attorney or even an interested amateur, but my guess is that unless he renounces citizenship, he still needs to pay American personal income taxes and American capital gains taxes. America has one of the most restrictive taxation system for expats in the entire world.
However, FTX likely does not need to pay US corporate taxes for their Bahamas branch (but they probably do need to pay US corporate taxes for their FTX US branch).
I’d be interested in knowing for sure—it would change my views a bit.
However, the taxes on the company itself, as well as the reason it moved to the Bahamas (to make profit off of what is basically a gambling platform in a way that’s illegal in the US), are still relevant.
I think this is a misleading title. The tl;dr you posted, or indeed the linked article itself, does not really argue that taxes are too low. At times it implicitly assumes it, or vibes with it, but there’s nothing in the article that would persuade someone who didn’t already believe it. In general I think linkposts should use the same title as the linked article, or else a title that describes its contents faithfully, rather than adding additional editorialising. Both the original title or subtitle would be better.
I totally agree both that the article doesn’t make the case that taxes are too low; and that linkposts should use the title.
I just used this title because it is the page title. However, the heading tag on the page is different to the page title. I also included the heading tag in the body of the post.
In light of current events, I wanted to thank Dylan Matthews for writing this
This seems relevant:
The top 1% of Americans have about 16 times more wealth than the bottom 50%
https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html
“The wealthiest 1% of Americans controlled about $41.52 trillion in the first quarter, according to Federal Reserve data released Monday. Yet the bottom 50% of Americans only controlled about $2.62 trillion collectively, which is roughly 16 times less than those in the top 1%. ”