RichardGibbons

If the inclusion rate is increased, I don't consider this the highest probability scenario. To my recollection, when the capital gains rate changed in the past, the rate change typically took effect the day after the budget was released, not the day the budget bill was approved through royal asset.

Yep. Anyone who understands how options work recognizes that if one could reliably predict the market even two weeks out, one could become unbelievably rich in a couple years. So, pretty well everyone sensible who's thought about it has low confidence even in their own short-term predictions, let alone others'.

I'm pretty sure you're trying to insult me, but I can't quite figure it out. Good luck, orthopa.

While the broad rhetoric of this post doesn't make much sense to me, this is a fantastic idea. Does anyone know if there's some way to get something like "excess business deaths"? That would certainly be a useful data point. I'm guessing it might not be possible because when businesses die, there's not nearly the same amount of rigor involved in documenting that bankruptcy as we would with a human death. Maybe we can get approximate numbers at the end of 2021 based on 2020 tax filings? Any other ideas or anything I'm missing?

For me, this one totally resonates, which makes me think that the only people who should actually believe in conversion therapy are bisexuals. :)

This would be a neat experiment to run. I think for now, the countries that would best meet your criteria are probably Denmark for the former and Somalia for the latter.

Money is taxed when it is transferred between individuals. When someone dies, their money is transferred to a new individual. It's as reasonable to tax that money transfer as any other money transfer like wage payments, capital gains, revenue. Plus, if you're actually going to use the word "entitled", it's unclear to me why anyone is entitled to the money, since the only person who was actually entitled to the money is dead.

Yeah, I agree. I think the real challenge is to make the wealth redistribution better, without killing the incentives that lead to the massive wealth generation. As of the last few years, I've been leaning toward "massive death taxes". Like, you can get as rich as you like, but when you die, your kids are only at the 99th percentile of wealth, but not 99.1th percentile.

I don't think it's a matter of whether rich people can afford it. It's a question of what's optimal for the country long term. The evidence suggests that Investor20's points are correct: https://www.jec.senate.gov/public/_cache/files/0dc035df-5637-4f47-84cf-c9f0a304f395/optimal-capital-gains-tax-policy--lessons-from-the-1970s-1980s-and-1990s.pdf https://www.iedm.org/sites/default/files/web/pub_files/cahier0218_en.pdf I think the stepped up in basis for capital gains taxation at death does make sense, as right now, that stepped up basis discourages people from moving capital into the investment with the highest future returns.

Hmm, Denmark vs Sweden. Why would anyone choose to just have Denmark's trashed economy when they can instead have Sweden's equally trashed economy and but also five times the death rate? (Note the grey dots, the Scandinavian countries that are the best comparatives for Sweden.) Like, is it really that important to Trump fans that a bunch of extra people die without actually improving the economy? And if you're going to say, we "we should be like that country", why wouldn't you just choose South Korea? A tiny death rate and a robust economy. What's not to like?

This is a very good point that I fear will be lost as a result of the politicalization of the pandemic (at least in North America. I'm not sure about other places.)

I try, but you're certainly better at it than I am. I do wonder if today, the divide isn't actually left vs. right but rather reasoned vs. ideological. And that the latter is in the ascent, effectively forcing people to decide which extremist position to take. Yeah, if feel like one of the things that's lost with this populism is the ability to change your mind when the evidence change. Like, on the face of things, that's clearly the sensible way to view the world, yet almost everyone seems to believe that changing your mind is a sign of weakness or hypocrisy. The populist issue is magnified by the fact that it's very hard for the population as a whole to change directions quickly. Plus, the fact that the public generally believes that their two weeks of reading online articles on a topic puts them roughly at par--or ahead of--people who have literally spent 8 hours a day, 200 days a year, for 20 years researching, analysing, and thinking about a topic. Yeah, I live roughly in the geographic center of Vancouver. That's interesting to me that people in the know are starting to view it that way, because I hadn't seen any reasons for optimism in the underlying numbers. It does make sense to me that if knock off causes one by one, it'll have an effect, and that the best way to fix drug addiction is to avoid becoming addicted in the first place.

Yeah, cigarbutt is one of the most impressive posters on here in his determination to remain fair and intellectually honest. It's quite admirable. If only a third of people were like him, the world would be in a much better place.

B. But my bearish view is based on a large amount of data points I track, not just based on COVID alone. Those data points led me to sell out in mid Feburary and I was feeling like a fool for two more weeks back then. Right now those data points look even more exaggerated than in Feb. However, I've been weighing the two scenarios since last night. Sector rotation vs everything crash. I start to lean against the case of a sector rotation right now. When AAPL, TSLA, SHOP etc go bust, traditional value stocks could have their day. People who bought AAPL and TSLA have never bothered to look at what happened in 2000. Cisco was the equivalent of AAPL and TSLA today. When Cisco went into bust, it went down 90% while traditional value stocks like BRK went up 100% Thanks Muscleman--given that premise, your point of view makes sense to me. Thanks for explaining it.

To me, your comment seems to imply that: A) you view the Fed much more influenced by COVID case numbers than employment numbers. Or perhaps, B) you believe that the COVID case numbers are so strongly correlated to the employment numbers so that they're basically the same thing (i.e. if COVID cases decline to zero, employment will quickly return to high levels). Or, C) the Fed cares a lot about asset bubbles and sees this one, so they'll reduce stimulus even if employment hasn't recovered. Is one of these views basically your position? Because the evidence I've seen seems to suggest that the Fed is likely to be reluctant to reduce stimulus until employment numbers return to levels that cause significant inflation. So, I'm curious if you think A, B, or C above is true, or if there's something else that I don't understand about your reasoning that will help bridge that gap for me. Thanks!

I'm not quite sure what you're disagreeing with 100%, since my view of "socialism + capitalism" is basically "basic medical + rich people can get extra/expedited service by paying". The key point is that 100% capitalism just doesn't work in healthcare, and that's pretty clear because the USA has way higher costs, the same or worse outcomes, large numbers of people having awful financial outcomes from as a result of bad luck, and perverse, grossly-suboptimal economic outcomes where people have to hold on to a particular job to maintain health insurance. It's basically indefensible. It's worth noting that I'm in Canada (a public system), and this year people in my family have had two surgeries, both done privately, one in a public hospital and one in a private clinic. I'm open to the idea of a hybrid system, and it seems plausible to me that that a hybrid system might be optimal.

Socialism doesn't reduce individuals to numbers unless taken to an extreme like communism. And generally I agree that reducing individuals to numbers is a very bad thing. The appropriateness of socialism depends on the problem you're trying to solve. For justice and national defence, it seems clear that socialism is the way to go. Socialism--or socialism + capitalism--clearly works better for things like healthcare and basic research. And capitalism--or capitalism with only a touch of socialism--clearly works better for things like food and widget production and distribution. Also, capitalism breaks when one can make money by killing other people. That's why there's value in actually looking at the problem and different solutions rather than assuming that because your hammer is great at pounding in a nail, it will be equally good at cutting a board into two equal-sized pieces.

For me, socialism is insurance against catastrophic outcomes as a result of bad luck--unemployment insurance, medical insurance, insurance against being born in a dysfunctional family.... In socialism, you give up some extreme rewards to eliminate a some extreme catastrophes. In equity, you're taking socialism from 10% to 100%, and eliminating any and all differential outcomes. You're giving up 100% of your rewards to eliminate 100% of catastrophes. That's why I think it's reasonable to believe in socialism but not equity. If I'm shivering in the cold, it's reasonable to want to stand near a fire, but also reasonable to not want to be lit on fire.

I don't think that this is a given. The value people provide is the upper limit on their compensation, not the theoretical optimal amount they should be paid. It's also unclear to me how you factor in risk and ideas. Like, suppose you're the dude who had the idea, started the company, mortgaged your house for capital to get it started, and lost your marriage as a result of your focus on the company. And now today, 5 years later, you're responsible for 5% of the value of the company generates that year while your 5 employees are responsible for 95%, do your 5 employees deserve 19% of the profits? Plus, I find it an odd metric regardless, because the "value you provide" could change dramatically based on the business. e.g. a generic manual laborer might have a different value in Amazon's warehouse than McDonalds than wielding a sledgehammer doing demolition. So, if you accept the premise that people ought to be paid based on the value they provide, you're saying that with identical skills, the same laborer ought to be paid differently based on the company they work for. (Whereas, I think according to economic theory, as a result of competition, people with the same skills ought to be paid the same regardless of where they work.) That's why I find the whole discussion really confusing once you step away from the communist slogans like "everyone contributes so everyone shares" or "nobody deserves to be a billionaire or gets to be a billionaire as a result of their own work." I believe there ought to some balancing factors that stop the big winners from making the world completely unbalanced, but it's hard to find those balancing factors.

The problem with inequality is that it destroys social cohesion and destabilizes society. An unstable society is bad for the rich, the middle class, and generally the poor as well. It's only good for those who don't really have anything to lose. The problem with equality is that disincentives people. Most growth and innovation is caused by people striving to get ahead. So it seems clear to me that you want to have a reasonable degree of inequality, but not so much stuff becomes unstable. A solution I think might work is: 1. Ensuring the total compensation of the highest paid person of the company cannot exceed some multiple (say, 30) of the lowest-paid person (including contractors). 2. For business owners (e.g. Bezos), implement a massive death tax on extreme wealth (like 95% tax on assets above an inflation-adjusted $50M)

I found this argument interesting--thanks Cherzeca. Though obviously nothing is proven, on the face of it, the hypothesis seems reasonable to me because humans aren't homogeneous objects randomly bouncing around in a closed world. It seems reasonable to me that there are people with varying degrees of susceptibility to the virus (we already know this because there's dramatically different outcomes for people who are infected). Plus, the degree to which people spread it varies as well--super-spreaders are super-spreaders partly because they have a lot of exposure to a lot of people, so you'd expect them to get it early as well. What is the R0 for a population if you assume that 70% of super-spreaders and the 10% of people who are particularly susceptible to infection by that particular disease are immune because they've already had it? I think the R0 (and the level of infection to achieve herd immunity) would be lower than what you'd get from models where humans are assumed to be homogeneous. So, I don't think we should dismiss this theory out of hand.

Yeah, "delighted" would be how I'd describe it. Attached to a country that until the last few years has had strong democratic values, a belief in free speech and "innocent until proven guilty", and an eagerness to trade for everyone's benefit? Sign me up! If I could disconnect Canada from North America and move it anywhere else on the globe, I wouldn't. (Well, maybe in the Pacific Ocean, to the west of America, still attached to the continent, just to get some better weather.... 8))

Yep.

To summarize: March/April Orthopa: "Contact tracing is a waste of time! Everyone's already infected." (There are single digit deaths in America.) New Zealand/Taiwan/S.Korea/British Columbia: Do lots of testing and contact tracing America: Minimal tests Trump: "There's no problem (and if there were, it would be a Blue State problem, so that's actually a good thing!)" August New Zealand/Taiwan/S.Korea/British Columbia: The virus has been mostly contained. A tiny number of people have died. America: Millions infected. 200,000 people die. Trump: "We should do less testing. That's what I diagnose to be the main problem here." Orthopa: "There's too many people infected! Contact tracing is impossible, because while almost every other country has used it successfully, America hasn't! And Canadians are paranoid scared bitches! And asymptomatic people can pass on the virus! So there's no reason to test." RichardGibbons: "Should I say that infectious asymptomatic people might suggest one should do more testing, not less? … … Nah." Orthopa: "Dick."