alt Hacker NewsIt's funny, because even though he got the math right, PG got the reasoning completely wrong.
> Each 1% of wealth tax is equivalent to 20% of income tax.
Yes, this is the right part. Taxing wealth at 1% is equivalent to taxing income at 20-25% (depending on which return you count as baseline)
> It's clear that politicians don't get this from the way they talk about a "mere 1%" wealth tax. None of them would speak of adding a "mere 20%" to the income tax rate
On the opposite, they understand it right, and PG is completely wrong here: it's not about adding income tax rate to someone that already pay income taxes, it's about making wealthy people, who don't currently pay this tax rate, pay the same rate as people living from their income.
> So in the median case, a state adding an additional 20% in income tax would have a total marginal tax rate of 37% + 4.75% + 20%, or 61.75%.
Bezos, Musk, Zuck and the likes (or even PG himself, likely) don't pay 40% tax on their wealth growth, they currently pays 0%.
In fact, to make them pay as much tax as their employees, there should be a 2% wealth tax, not 1%. Hence, a “mere 1%” is in fact a very generous proposal by leftists politicians and economists, as it would still mean the wealthy only get half the rate of working people.
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> pay 40℅ tax
Offtopic but I thought your percent looked weird. Turns out, that's the "care of" symbol (℅, U+2105) and not percent (%, U+0025).
> In fact, to make them pay as much tax as their employees, there should be a 2% wealth tax, not 1%.
Indeed.
Andrew Mellon writing in 1924 "Taxation: The People’s Business.": "The fairness of taxing more lightly incomes from wages, salaries and professional services than the incomes from business or from investments is beyond question. In the first case, the income is uncertain and limited in duration; sickness or death destroys it, and old age diminishes it. In the other, the source of income continues; the income may be disposed of during a man’s life, and it descends to his heirs."
https://en.wikipedia.org/wiki/Andrew_Mellon
Via "Our Tax System Should Make You Furious" (interview with a Boston College Law School professor who specializes in tax law and estate planning):
https://www.nytimes.com/2026/04/17/opinion/ezra-klein-podcas...
> it's not about adding income tax rate to someone that already pay income taxes, it's about making wealthy people, who don't currently pay this tax rate, pay the same rate as people living from their income.
That's exactly it. I've been really shocked at the willful ignorance (or deceit) coming from the billionaire class on this. I mean, OBVIOUSLY the practical operation of the tax regime is unfair at the top end. If you put a billion dollars in assets somewhere, almost any asset (including e.g. stock in a company you can't sell because you need to own it), growth of that asset is (1) trivially liquid via loans[1] or deals and (2) COMPLETELY UNTAXABLE IN PRACTICE because there's never (ever!) going to be a point where it's traded or converted in such a way that it becomes a "capital gain".
[1] e.g. Bezos goes to Citi or whoever and writes up a contract for a $100M loan to be collateralized with ever-appreciating AMZN shares, likely at a deeply discounted rate (low risk, plus the "keep Jeff in the rolodex" benefit to the bank) then pays it back on schedule with another loan taken out on his now-even-larger stake in AMZN. Who pays the tax here? It's not "income"!
I really like the way you framed it. I've never really been against a wealth tax but making it equivalent to income feels fair to me. I don't think the math works out with rates where they are today, though.
I guess the simplest approach is, if you're making money, it should be taxed fairly, regardless of how you're making it.