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Couldn’t agree more. I read all his essays in my early 20s and became a huge fan. Not just startup advice wise, but general big picture stuff wise too. Then I

Couldn’t agree more. I read all his essays in my early 20s and became a huge fan. Not just startup advice wise, but general big picture stuff wise too. Then I saw his recent tweets and especially the essay about wealth tax, I was a bit disappointed. But as you said, his position is well earned. But I don’t see any useful real life advice from him anymore.

andrewprock 6y ago
"Suppose you start a successful startup in your twenties, and then live for another 60 years." Yes, let's just assume this is true. Please!
elevenoh 6y ago
>Then I saw his recent tweets and especially the essay about wealth tax, I was a bit disappointed. Why? He points out [the non obvious to many fact] that wealth tax kills compounding. And this is something to seriously consider.
- deleted 6y ago
  [deleted]
- cinntaile 6y ago
  He points out that a wealth tax compounds. It doesn't kill compounding, it just diminishes its effect in the same way that the TER for a mutual fund does.
  - clusterfish 6y ago
    > "wealth tax compounds" And that's a rather misleading way to characterize the effects of wealth tax. When you think of compounding you think of compound interest, where compounding means the actual interest ends up being MORE than what you might expect (numYears * annualInteredtRate * baseAmount) because baseAmount grows every year due to compounding. On the other hand, the wealth tax "compounding" works in the opposite direction, because baseAmount is reduced, not increased, by the tax over time, so the "compounding" aspect of the tax actually REDUCES the amount of tax you pay compared to a baseline where you didn't consider this effect, i.e. (numYears * annualTaxRate * baseAmount) I don't think this choice of words was accidental on PG's part, as he chooses his words very carefully. He just chose to weaponize his words this time to push his political opinion, to make wealth tax seem worse than it is, which is something I've sadly come to expect from his twitter, but never noticed leaking into his essays before.
- ishansharma 6y ago
  It’s my opinion but that was a very one sided view. And I need to read more on this but I don’t think the way he pointed it out is how anyone is proposing wealth tax.
  - fossuser 6y ago
    What PG describes is basically what's proposed - the main difference is that most American proposals have a floor before it kicks in. That floor is pretty high depending on the proposal ($30-50 million), but that doesn't stop the problem of equity ownership being eaten away over time when a lot of your worth is tied up into a successful company (like Bezos). You also get other incentive problems with things like angel investing. If someone is at the wealth cap they're less incentivized to risk money when they'll either lose it because the investment fails, or lose it because it gets eaten by the wealth tax. Other proposals have low floors where you just have the problem of a lot of wealth getting taken. In general it's good for a society to incentivize wealth creation/growth and still protect the lower bound of society. A wealth tax dis-incentivizes wealth creation - and for what? It just comes across to me as a 'hate the rich' policy that creates perverse incentives. Disclosures so people don't think there's hidden motivated reasoning here: - I'm nowhere near the wealth cap and probably never will be - I think trump is an idiot and the republican party is a disaster - I voted for Hillary and will vote for Biden. I still think the wealth tax is a bad idea and bad policy.
    - marcinzm 6y ago
      Why is disincentivizing the accumulation of massive wealth in a small subset of the population bad for society? What is the advantage to society of an individual accumulating tens of billions of dollars worth of wealth?
      - fossuser 6y ago
        It's dis-incentivizing wealth creation in general and taking ownership away from people that build companies. There's a compelling argument that growth (that accounts for human rights and protecting the environment) is the best way to help the most people the fastest: https://press.stripe.com/#stubborn-attachments https://press.stripe.com/#stubborn-attachments. Policy that dis-incentivizes wealth creation creates perverse incentives that limit growth. We're better off with policy that limits how wealth can be leveraged into political power, and policy that helps protect and improve the lower bound of society. That said, I think it's likely reasonable to limit how wealth can be passed down generations (to prevent things like dynastic wealth, but that's a separate issue and I don't know enough to really comment on it). Wealth creation isn't zero-sum, just because someone builds a business and creates wealth doesn't mean they're taking it from others. We want a society where people are incentivized to create and grow wealth as much as they can (within bounds for environment protection and human rights), not just to some arbitrary cap before it gets taken by the government. All of the above ignores real modern examples that directly leverage their wealth to do things that would not be done otherwise (Elon Musk: SpaceX, Tesla, Neuralink, Boring # Bezos: Amazon and Blue Origin # Gates: Health and Public Policy). I think the general argument in favor of growth is better than these specific examples though because it's a more systemic argument about incentives for the structure of a society rather than relying on individuals and their choices. There's also the implementation issues (which are real), but I'm not going to argue that bit just because a lot of good ideas are hard to implement but still worthwhile. The wealth tax though I think is both a bad idea and hard to implement. The bad idea bit is more important.
- jedberg 6y ago
  > Why? He points out [the non obvious to many fact] that wealth tax kills compounding. His analysis was deeply flawed to the point of being disingenuous. For one, it assumed that your wealth never grows once you get it. And for two, it completely forgot that there is a baseline on the wealth tax (the current proposal is at $50M). So no, it doesn't kill compounding, it just shrinks it a bit.
- cma 6y ago
  Unless our lightcone starts growing faster than polynomially, compounding can't happen for very long.
- darthrupert 6y ago
  I wonder how he reacts to the knowledge of one of the wealthiest countries having a wealth tax. Switzerland. It's below 1%, progressive, though. 2-6% (as Sanders suggested, I think?) would probably be much more harmful.

andrewprock 6y ago

"Suppose you start a successful startup in your twenties, and then live for another 60 years." Yes, let's just assume this is true. Please!

elevenoh 6y ago

>Then I saw his recent tweets and especially the essay about wealth tax, I was a bit disappointed. Why? He points out [the non obvious to many fact] that wealth tax kills compounding. And this is something to seriously consider.

deleted 6y ago
[deleted]
cinntaile 6y ago
He points out that a wealth tax compounds. It doesn't kill compounding, it just diminishes its effect in the same way that the TER for a mutual fund does.
- clusterfish 6y ago
  > "wealth tax compounds" And that's a rather misleading way to characterize the effects of wealth tax. When you think of compounding you think of compound interest, where compounding means the actual interest ends up being MORE than what you might expect (numYears * annualInteredtRate * baseAmount) because baseAmount grows every year due to compounding. On the other hand, the wealth tax "compounding" works in the opposite direction, because baseAmount is reduced, not increased, by the tax over time, so the "compounding" aspect of the tax actually REDUCES the amount of tax you pay compared to a baseline where you didn't consider this effect, i.e. (numYears * annualTaxRate * baseAmount) I don't think this choice of words was accidental on PG's part, as he chooses his words very carefully. He just chose to weaponize his words this time to push his political opinion, to make wealth tax seem worse than it is, which is something I've sadly come to expect from his twitter, but never noticed leaking into his essays before.
ishansharma 6y ago
It’s my opinion but that was a very one sided view. And I need to read more on this but I don’t think the way he pointed it out is how anyone is proposing wealth tax.
- fossuser 6y ago
  What PG describes is basically what's proposed - the main difference is that most American proposals have a floor before it kicks in. That floor is pretty high depending on the proposal ($30-50 million), but that doesn't stop the problem of equity ownership being eaten away over time when a lot of your worth is tied up into a successful company (like Bezos). You also get other incentive problems with things like angel investing. If someone is at the wealth cap they're less incentivized to risk money when they'll either lose it because the investment fails, or lose it because it gets eaten by the wealth tax. Other proposals have low floors where you just have the problem of a lot of wealth getting taken. In general it's good for a society to incentivize wealth creation/growth and still protect the lower bound of society. A wealth tax dis-incentivizes wealth creation - and for what? It just comes across to me as a 'hate the rich' policy that creates perverse incentives. Disclosures so people don't think there's hidden motivated reasoning here: - I'm nowhere near the wealth cap and probably never will be - I think trump is an idiot and the republican party is a disaster - I voted for Hillary and will vote for Biden. I still think the wealth tax is a bad idea and bad policy.
  - marcinzm 6y ago
    Why is disincentivizing the accumulation of massive wealth in a small subset of the population bad for society? What is the advantage to society of an individual accumulating tens of billions of dollars worth of wealth?
    - fossuser 6y ago
      It's dis-incentivizing wealth creation in general and taking ownership away from people that build companies. There's a compelling argument that growth (that accounts for human rights and protecting the environment) is the best way to help the most people the fastest: https://press.stripe.com/#stubborn-attachments https://press.stripe.com/#stubborn-attachments. Policy that dis-incentivizes wealth creation creates perverse incentives that limit growth. We're better off with policy that limits how wealth can be leveraged into political power, and policy that helps protect and improve the lower bound of society. That said, I think it's likely reasonable to limit how wealth can be passed down generations (to prevent things like dynastic wealth, but that's a separate issue and I don't know enough to really comment on it). Wealth creation isn't zero-sum, just because someone builds a business and creates wealth doesn't mean they're taking it from others. We want a society where people are incentivized to create and grow wealth as much as they can (within bounds for environment protection and human rights), not just to some arbitrary cap before it gets taken by the government. All of the above ignores real modern examples that directly leverage their wealth to do things that would not be done otherwise (Elon Musk: SpaceX, Tesla, Neuralink, Boring # Bezos: Amazon and Blue Origin # Gates: Health and Public Policy). I think the general argument in favor of growth is better than these specific examples though because it's a more systemic argument about incentives for the structure of a society rather than relying on individuals and their choices. There's also the implementation issues (which are real), but I'm not going to argue that bit just because a lot of good ideas are hard to implement but still worthwhile. The wealth tax though I think is both a bad idea and hard to implement. The bad idea bit is more important.
jedberg 6y ago
> Why? He points out [the non obvious to many fact] that wealth tax kills compounding. His analysis was deeply flawed to the point of being disingenuous. For one, it assumed that your wealth never grows once you get it. And for two, it completely forgot that there is a baseline on the wealth tax (the current proposal is at $50M). So no, it doesn't kill compounding, it just shrinks it a bit.
cma 6y ago
Unless our lightcone starts growing faster than polynomially, compounding can't happen for very long.
darthrupert 6y ago
I wonder how he reacts to the knowledge of one of the wealthiest countries having a wealth tax. Switzerland. It's below 1%, progressive, though. 2-6% (as Sanders suggested, I think?) would probably be much more harmful.