Facebook: More rich people. Just what we need.

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So Facebook is going public, and a homeless artist is going to get $200 million. Nice. And a company that has spent eight years spying on your private life (with your consent, of course, although admit it, you didn't know exactly how the data mining worked and how much these folks now know about you) is going to pick up a few billion dollars for selling your secrets to advertisers. Thank you for using Facebook.

This is, of course, supposed to be great news for the state, since all of those folks who get rich off stock options will eventually sell some of the stock and pay a capital gains tax, and then they'll pay sales taxes on the fancy cars and houses they buy, and we should be so fucking happy that the great wealth will trickle down to the rest of us, since Mitt Romney has made it clear that it's unAmerican to complain about success.

I'm not complaining. Good for David Choe that he's going to instantly be a member of the 1 percent. And despite what the trolls on this site love to say, I don't hate rich people.

I just think they ought to pay fair taxes.

Because in the end, a lot of the people who get rich off Facebook were, frankly, in the right place at the right time. Let's take Mr. Choe. He just happened to accept stock instead of a few thousand dollars cash to paint a wall at a company the might not have gone anywhere. He might as well have bought a lottery ticket. Some of the folks at Facebook are immensely talented and should be rewarded; many of them are just the same as the employees at a thousand other companies, except that they happened to get hired by one that is going to make them rich.

Let's suppose that the state charged a capital gains tax of 35 percent on income of more than $10 million. Mr. Choe would wind up with $140 million instead of $200 million. I think he'd still do fine; his grandkids would never have to work. But the state would have an extra $50 million to, say, pay for housing and education so that other young artists wouldn't be homeless.

I'm glad Mark Zuckerberg has signed on with Bill Gates to give away half of his money. This is a wonderful thing. But charity isn't going to fix the mess that is the United States economy; it's not going to substantially narrow the gap between the rich and the poor (especially since a lot of this "charity" goes to places like Harvard University -- thank you Mr. Gates -- which don't exactly count as helping the truly needy).

No: Charity is fine as far as it goes, but this country desperately needs more money in the public sector -- yes, government -- to pay for things that charity typically doesn't (you think any of the Facebook crew are going to give $100 million to Muni?) and to reduce the wealth gap that is choking the economy to death.

And so far, what the folks in the tech world seem to want is more tax breaks.

Okay, now I'm going to post this on Facebook.

 

 

Comments

Choe is homeless by choice, not by circumstance. The New York Times described him this morning as "a very successful artist with gallery shows and pieces exhibited in major museums ... there is a trail of images of him partying with scantily clad women and spending large amounts of money on alcohol."

Posted by Guest on Feb. 02, 2012 @ 1:03 pm

Thank you for putting this in perspective.

Posted by Guest on Feb. 05, 2012 @ 11:24 pm

"Let's suppose that the state charged a capital gains tax of 35 percent on income of more than $10 million."

No, income is income, and gains are gains. You can't apply CGT to income and you can't apply income tax to cap gains. Two completely different things.

"many of them are just the same as the employees at a thousand other companies, except that they happened to get hired by one that is going to make them rich."

Again, wrong. These days, when choosing between job offers, it is crucial to assess the viability and potential of your employer. The good ones can make you a millionaire while the bad one other will fold and lay you off.

In other words, employees have to perform as much due diligence on their employers as vice versa. That takes skill and judgment, and not everyone has it.

Finally, if you really want to convince us that you don't hate rich people then don't title your piece "More rich people - just what we need" in that sarcastic way.

Posted by Guest on Feb. 02, 2012 @ 1:33 pm

Anyone getting that much income is most definitely extremely lucky - in many different ways.

Call it income or gains or winning the lottery, but taxes are a fact of life and they are a good fact of life because govt wouldn't run without them. Ya know, govt - the entity that arrests robbers, that puts out fires, that licenses your car, that builds the public transit and highways and streets you ride on, that educates you and your kids, that does research that finds cures for cancer and other diseases, etc etc etc.

Tim, you're right. These people's incomes (I'm calling all gains, whether capital or not, income) that are above a certain level should be taxed at higher levels. That's called a progressive income tax and that's good because those higher rates only kick in for that portion of the income above the amount where the rate kicks in - income below that is not taxed at the higher rate. That's fair.

That tax money will then be available to fund the many necessary things govt does (I just listed a few of the necessary things govt does). And that, ultimately benefits those paying those taxes since their kids will have good schools to go to, there's money for police and fire, important R&D that funds new companies and new industries can take place, etc.

If you want a place without govt or the taxes that funds it, go move to Somalia.

Posted by Guest on Feb. 02, 2012 @ 4:32 pm

He figured out which companies woud succeed. So did FaceBook employees. While those who went ot work for Enron were, well, dumb.

Do your due diligence. Or lose, loser.

Posted by Guest on Feb. 02, 2012 @ 4:40 pm

He was lucky that he had family wealthy enough to invest their money with him. Without that, he could've had all the smarts in the world and not gone anywhere.

Along the way, he's made some good picks and he's made some really awful picks, like all of us. He was lucky that his good picks came at the beginning, and his awful picks came at times when he could afford to lose billions. Had it been the other way around, he'd be bankrupt and you'd never have heard about him. But you would've heard about someone else, who was just as smart. But because they made some bad picks initially, you don't hear about them because they did go bankrupt.

The rich love to accentuate how they worked hard yadda yadda yadda. Maybe there's an element of truth for some of them. I guess that if you're stupid and lazy, you're pretty much guaranteed to fail. But the dirty little secret about the American dream is that even if you're smart and hard-working, that's no guarantee at all that you'll succeed. Luck plays a huge role.

Posted by Greg on Feb. 02, 2012 @ 5:47 pm

I've only known a very few people who would be considered very successful, but each of them had a real presence and energy.

When we start dismissing all success as luck, and therefore somehow undeserved, then we are on a national path ot mediocrity.

Posted by Guest on Feb. 03, 2012 @ 7:27 am

Part of what you see as presence comes as a *result* of success, not a cause. Wrap an ordinary shmuck in a suit, give him power... the ability to say "You're hired. You're fired," and he'll have "presence." And maybe he'll even develop "energy" too. Who wouldn't, when you have the power to lord over others, or at least the adulation of your peers and a job that showers you with money? You act the part of your station in life. This has been amply demonstrated in experiments.

And the other thing is that you'll say you deserve it. It's cognitive dissonance. Your brain is programmed so that it's difficult to see it any other way. And it's sort of understandable when you think about it. If you see others around you who are just as deserving, and yet you have so much more, a realistic outlook might make you conclude that you're being quite the swine. Much better to convince yourself that you're somehow "better."

I don't want to overemphasize the above. Not *all* is due to luck, and to argue against me as if that's what I'm saying, is to argue with a straw man. But I don't want to underemphasize it either, which is what we tend to do in America, aided in no small part by the elite who want us to see it that way. Of course they do. It benefits them. And they have the money to advance their version of the story.

I've known many successful people over the years. Some of them have done truly great things that others are unable to do. Most of them have not. But to a man, the one thing they all have in common is good fortune. And conversely I've known many unsuccessful people. Many of them have worked very hard, some of them are brilliant, but they've had some pretty bad luck.

There needs to be a balance in society. Meritocracy is important as an incentive for people to strive. But at the same time we need to maintain an safety net to mitigate the very significant effects of luck in personal outcomes. And the only way it can be maintained is by making sure that those who've been the most fortunate give back some of their good fortune to the society that allowed them to be so successful.

Posted by Greg on Feb. 05, 2012 @ 8:59 am

So you were inside his head when he came to that decision? Unless you are him, you weren't. Did he talk to you and explain his reasoning? Presumably no. So you don't know why he chose stock in FB.

So what if somebody from MySpace had called him instead. It's a similar company and had the head start which is almost always a huge advantage. Then what would that stock be worth? About nothing. So according to you, he's now a loser.

Fact of the matter is he had no idea what would happen to FB (or MySpace). He got extremely lucky - which my guess is he would happily admit to - to jump on a train that FB has become.

And there's no guarantee that FB will not lose its luster due to competitors or some knew format or whatever that catches on. Again look what happened to MySpace - they looked like they had the game won for good.

As for Warren Buffet, he had plenty of luck - especially when it mattered most, at the beginning. He's used good judgement since and built up his fortune over a long period of time so there's less luck than David Choi. But of course luck played a role with WB.

Fact is, there's no superman or superwoman out there. And a large % of people work reasonably hard but they didn't get some element of luck (usually many, and usually something that gets set in motion before the age of 20 that plays itself out eventually to fabulous wealth) that the multimillionaires or billionaires get.

The Koch bros are a good example of this. They inherit oil and chemical plants from their dad and build this element of luck that only a tiny % of the population is also a benefit of into billions of wealth.

But there's many examples less outlier than the Koch bros. The sons of and daughters of highly educated ppl that gets their kids a great education and sets them up to become millionaires are also lucky. They didn't choose their parents (or where they were born, etc).

So large income earners should be taxed - that portion of income above a very large number - at a very high tax rate (talking to you Mitt Romney!). They are doing good if they are at that tax rate and they are giving back to society which is only fair since they are the beneficiary of a stable society. In an unstable society, their wealth would be a fraction of what it is in a stable society.

Posted by Guest on Feb. 02, 2012 @ 5:47 pm

It's that the poor pay too much.

I'm happy for Romney to pay 15% tax as long as I can too.

He'll still be paying far more tax than me. But I'm not out to punish him.

Posted by Guest on Feb. 03, 2012 @ 7:28 am

"this country desperately needs more money in the public sector"

No it doesn't.

"This country desperately needs less public sector."

There ya go.

Posted by Guest on Feb. 02, 2012 @ 2:58 pm

Does the private sector educate most of the kids? Does the private sector pay for public transit and roads? Does it do basic medical research? Does it put out fires? Doesn't do any of those.

Of course it can't if it could but it would only do so if someone was paying for it. Lots of important things people won't pay for except via taxes. When it's public agencies doing these things, there's lots less invitations for corruption vs when a private co is doing them.

And my guess is you had no prob with GWB starting an unnecessary war in Iraq that will probably cost trillions. A war that was a give-away of many billions to the military - defense industry like Halliburton. A war that was started by a president at the same time he was cutting taxes - mostly to the benefit of those for which paying taxes was easiest in terms of its effects on their quality of life.

If we made those with extremely large incomes pay very high rates (as it was done in the 1940s, 1950s, and 1960s - three very properous decades for this country) and we had presidents that didn't get us into any wars and that cut the military budget big-time (by bringing home all the troops we have in all these countries), we'd be much better off.

Posted by Guest on Feb. 02, 2012 @ 11:51 pm

How much have you given or pledged to charity (not to meantion the poor)?

Posted by Guest on Feb. 02, 2012 @ 3:11 pm

19th century policies in a 21st century world will continue to fall short-a moratorium on increases in sales and employment taxes coupled with a 1% national VAT + 2% on services would be a start

Posted by Guest on Feb. 02, 2012 @ 3:16 pm

isn't a whiney little shit trying to force them .

The successful give back and the losers just take. 'Twas ever so.

Posted by Guest on Feb. 02, 2012 @ 3:42 pm

rates and give proportionally more to charity than rhe 'rich'.
no one whines louder than a rich person faced with a tax increases-

Posted by Guest on Feb. 02, 2012 @ 4:26 pm

Even if we had just one flat rate of tax, the rich would still pay far more tax.

Posted by Guest on Feb. 02, 2012 @ 4:42 pm

Zuckerberg just gave $100M to the Newark Public School system, and he's promised to do more philanthropic giving. That isn't giving to the public sector? That isn't addressing a societal mess? WTF?

Posted by DanO on Feb. 02, 2012 @ 3:20 pm

So many will not recall the hysterics the Bay Guardian went into when Pete Wilson tried to tax free newspapers, I suppose making things more "fair" in the eyes of Pete Wilson, bot not more "fair" in the eyes of the Bay Guardian.

If Bruce had let the paper unionize, mixed with Pete Wilson's everyone should pay their fair share tax, at this point the Bay Guardian would be just a memory?

Posted by Guest on Feb. 02, 2012 @ 4:13 pm

some people found a way to make some money, Redmond feels the need to change the rules to get some of that money and make things fairer.

Under the previous election system progressive got pummeled, so the system needed to be changed to make things fairer. Although the pummeling has just begun it seems.

There's a pattern here, somewhere.

Posted by Guest on Feb. 02, 2012 @ 4:18 pm

that did not exist 20 years ago are given a pass because the tax code hasn't kept up

Posted by Guest on Feb. 02, 2012 @ 4:29 pm

Thats why we pay innovators far more than we pay tax clerks.

Posted by Guest on Feb. 02, 2012 @ 4:43 pm

Yes, I read the article. I'm happy that Zuckerberg gave money to a public school system; it's what more of these billionaires should do. Good for him.

But charity is about one person deciding where his or her money should go. Taxes are about a society, through its elected representatives, deciding collectively where excess wealth should go. Not a perfect system, elected officials are corrupt, yeah, yeah, yeah, I agree. But I would rather have at least a chance at pushing elected officials to make the right choices than to rely on the whims of a handful of rich people who get to decide which school systems and which other worthy recipients get the money.

Posted by tim on Feb. 02, 2012 @ 5:01 pm

Without going through a google search, I seem to recall that there were serious strings attached to his "charity." In exchange for his millions, Newark schools had to change certain things according to his personal ideas about education (which tend toward already tried and failed "free market" type "reforms.") In other words, it wasn't exactly "charity," but more of an agreement to use Newark kids as lab rats in his little experiment.

Posted by Greg on Feb. 02, 2012 @ 5:56 pm

Tax breaks are designed to modify your behavior.

US foreign aid is usually to buy US goods.

Nobody does anything for nothing.

Posted by Guest on Feb. 03, 2012 @ 11:53 am

That's why I'm not a fan of paying for stuff with charity. For one thing, it's never enough. And sometimes it's counterproductive because it serves to take people's mind off the problem, as if it's somehow "taken care of," when it really isn't.

But there's a more fundamental problem. And that is democracy. Public schools should be controlled by and accountable to, the public. Every rich guy thinks the have awesome ideas, and they know better than the peons. Sometimes they do. Many times they don't (a lot of these "free market reforms" have proven to be complete disasters). But you know what? Even if their ideas are better, it's not their place to impose their ideas on others in a democracy.

In a democracy, we have school boards elected by the community who decide how to run things. In a properly functioning democracy, the Mark Zuckerbergs of the world pay their fair share of taxes to adequately fund the schools so that schools in poor communities can be just as good as those in rich communities. And if Mark Zuckerberg doesn't like the way the Newark school board is running things, then he can come to the meetings, get in line at public comment, and tell them his awesome ideas for making things better. And if he lives in Newark, he can vote against them the next time around if they don't listen. If his ideas are truly awesome, I'm sure most of the Newark community will agree and they'll elect a slate of "Zuckerberg's Most Awesome Ideas" candidates.

Well, at least that's the way it should work... *if* we had a functioning democracy as opposed to a pluto-kleptocracy.

Posted by Greg on Feb. 05, 2012 @ 9:16 am

precisely because there is no political interference or corruption or bribery etc.

The Gates Foundation spends it's money far more wisely than our government does, and I'd trust Gates to alleviate more suffering than a bunch of bureaucrats in cheap suits.

Ditto for Buffett, Zuckerberg etc.

Posted by Guest on Feb. 03, 2012 @ 11:55 am
Posted by Guest on Feb. 03, 2012 @ 12:02 pm

far more good overseas than the US government.

Posted by Guest on Feb. 03, 2012 @ 2:07 pm

on that standard

Posted by Guest on Feb. 03, 2012 @ 10:22 pm

and your businesses is what taxation/equalization is all about- no one does it by themselves- taxes are used to continue to fund the civic and social infastructure that supports us and allows commerce to continue to function-taxes are used to mitigate negative impacts of business/social behavior as well- its absurd to think changes in the tax code punish sucess or will impoverish 'innovators'- the very rich will remain very rich no matter what happens

Posted by Guest on Feb. 03, 2012 @ 10:02 am

How much of a hardship do you think it is to have a villa in Bermuda and flick a finger at the rest of us?

Posted by Guest on Feb. 03, 2012 @ 2:09 pm

look around- there are too many of them, thick like fleas, they like it here, and they will still be rich.

Posted by Guest on Feb. 04, 2012 @ 2:01 pm

So happy! But really happy when they sell shares and it is tax time!

Posted by Guest Charley_sf on Feb. 03, 2012 @ 11:32 am

And in any event, they'll only pay 15% tax.

America isn't Cuba. Not yet anyway.

Posted by Guest on Feb. 03, 2012 @ 11:54 am

if you don't think so, just wait a year

Posted by Guest on Feb. 03, 2012 @ 12:03 pm

These people worldwide give money to a company based in the Bay Area called facebook, then this company gives a lot of that money to people who live in the Bay Area that it employs, then these people spend this money in the Bay Area at places that employ other people in the Bay Area. At every step the government gets a cut, at every step money is agitating through the system.

What would the citizens of the area get out of higher state and federal taxes? Or even city taxes?

The federal and state taxes would take a majority out of the area. The city would just hand it over to the SEIU to never be seen again. The fringe lefts, "I want it because I want it" usually translates into handing more money over to unaccountable non profits and public employees. When it's all spent up they will be back for more.

The cost of a college education will keep climbing, the claims of spending more on 1 - 12 education will be a laugher, because that will never happen.

The left in this state have a certain base to pay off, and it's not any base that the average citizen is going to gain from being paid off.

Posted by matlock on Feb. 03, 2012 @ 2:24 pm

e-comerce, than it is some how 'right' to tax shoes and glasses of beer. We havent kept up because the system is bought off through elections and lobbiest. The wealthy use the 'entitled public sector' to drive wedges in the working/middle class. Rich people laugh. !% National VAT and 2% on services. Restore the bankruptcy option for student loans and let financial institutions fail if they gamble and lose, just like the rest of us.

Posted by Guest on Feb. 03, 2012 @ 3:36 pm

Isn't that we should tax transactions, it's that we should find a way to tax people who have money, because they have money, because he feels that he is owed it, because he has superior values to the rest of the world.

The system is lawyered and lobbyist upped from all sides, not just from business. The public sector is just part of that equation, defending the public sector and non profits while driving up taxes and fees isn't driving a wedge, it's pointing out that the citizens are footing the bill.

Footing the bill while the state's universities and community colleges get more costly and the roads fall apart. There will never be enough tax money to foot the bill for our progressives.

Posted by matlock on Feb. 04, 2012 @ 1:45 am

successful world leaders. Any other city on the planet would give an arm to have a company like FaceBook.

But no, of course, it's a bad thing because it doesn't fit with Tim's preference for losers and those who leech off those who work.

So sad; so pathetic.

Posted by Guest on Feb. 03, 2012 @ 3:38 pm

The progressives really want to keep their little slice of the world in a perpetual state of run down, they really despise people getting ahead, unless it is success as an employee of the government.

They oppose all change that might create some sort of private sector that will employee people, while demanding more from hotels and other business that are forced to remain in the city.

It really is amazing and so counter intuitive that it's really hard to accept, but thats what it has turned out to be. Someone has some money, the left has used up all the money at the state and local level paying off their base, so they want some of that money, they want some rules changes so that they can get it. Not caving into their greed and servility to ever more expanding government is called trolling.

Posted by matlock on Feb. 04, 2012 @ 1:54 am

on a failed prison system while defunding the schools and community health services that address mental illnes, trauma, addiction and so on- wars on two fronts on the Republicans watch were waged without being paid for with tax inceases for the first time in our history- starting the death spiral of debt- blame the left? wow

Posted by Guest on Feb. 04, 2012 @ 11:16 am
Posted by Guest on Feb. 04, 2012 @ 1:24 pm

comment as usual renders your point moot

Posted by Guest on Feb. 04, 2012 @ 1:55 pm

legislature has been controlled by democrats for a long time bro.

Posted by matlock on Feb. 04, 2012 @ 1:25 pm

means the minority can block whatever it wishes- but keep fiddling-Rome is burning

Posted by Guest on Feb. 04, 2012 @ 1:58 pm

Keep moving the bar back guest.

It's comical, elect democrats and they will adjust the budget priorities towards education, and then they keep getting outsmarted by the minority?

Entertaining, I usually vote democrat or not at all in most races, the number of republicans I have voted for in my life is numbered in the single digits. I have never been under the bizarre assumption that democrats didn't cater to a myriad of special interests. I have also never made these weird arguments about super majorities, because democrats hold such position in the state that they set the priorities. In the weak minded, democrats setting the priorities is meaningless.

Posted by matlock on Feb. 04, 2012 @ 5:47 pm

the virulent ' no tax ' state republicans aren't outsmarting anyone - they are simply cleaving to their meal tickets - blocking simple needed tax increases - Dick Blum is loathsome policy wise- I am not naive- I believe he is a democrat

Posted by Guest on Feb. 04, 2012 @ 6:48 pm

The thing that I am most constantly reminded of when I read tims articles is just how NOT_smart he is. No nuance, no big heavy thesis, just pure black and pure white. His blog posts have holes you could drive a semi through. Is there no "progressive" source of reading that is also intelligent, thought out?

Posted by Vibral on Feb. 04, 2012 @ 9:59 am

Why don't you give us an example of what you mean? How do we know you're not just another troll whose only purpose is to bash progressives.

Posted by Guest on Feb. 08, 2012 @ 1:01 pm