‘Tis the season for tax reform, and in tax reform season, politicians talk about how changing the tax code will help small businesses grow and create more jobs.
I thought long and hard about what would most help a Bootstrapped Service Business (“BSB”) like ours grow faster and create more jobs, and it all comes down to improving access to meaningful investment capital – not small changes to tax rates, increasing deductions, payroll tax holidays, or tweaking regulations (which doesn’t even help if you happen to be a vassal with a feudal lord like the state of CA or NY…side gripe for another time).
Tim (from Wait But Why) did a very funny thing to one of our oldest and best friends, and I felt compelled to post it (names and brands have been changed). Continue reading
America does not have an income inequality problem so much as it has a wealth inequality problem. The top 1% make about the same total income as the bottom 40% combined, which is significant, but it is nothing compared to the wealth gap.
The top 1% have 139x as much wealth as the bottom 40%.
So, why are income and capital gains tax rates based on income, not wealth? This is an outdated and oversimplistic way to ballpark wealth, and modern technology makes it much easier for track wealth now than in the past.
If we want to devise a more sensible tax system, we should strongly consider basing income and capital tax rates on a metric I will call Liquid Net Worth, instead of the traditional “taxable income”. This ensures that tax rates are assessed on a more full picture of someone’s financial situation, not just their year-to-year income.
Ever since sharing economy companies burst on to the scene, there have been disputes between governments, like the State of California, and companies, like Uber, about the employee/contractor classification of its workers.
Some companies surrendered (Instacart), a few are still fighting (Uber), and some had to shut their doors because of the changes (Homejoy).
None of these policies are good for the long-term of labor in America. They massively discourage entrepreneurs from building business that revolve around human workers, and they accelerate the transition to a job-lite world that is built on robot, not human, labor.
I was fortunate enough to trek to Everest Base Camp this month, and I wrote this up about my experience.
It was mainly for friends and family and isn’t my tightest piece of writing, but I thought I’d post it on Finn’s Cave, because fck it, if you’re procrastinating so hard that you’re reading Finn’s Cave, you’re might be interested in this account.
There are a few people in the world who are lucky enough to be clever for their job – a job that pairs an excellent salary with extremely high upside.
Well-funded entrepreneurs, venture capitalists, private equity investors, and hedge fund managers are all put to work in the hopes that their cleverness will deliver outsized returns for limited partners (or investors in the case of entrepreneurs).
Additional Background If You Stumbled on this Post Randomly
Uber is everywhere – especially in the startup/technology world that I follow closely, mostly through podcasts. It is the source of deliciously spirited debate because it is a wonderful blend of ubiquitous consumer product and highly publicized startup juggernaut. And whenever I get in too many debates with people about one topic and get stuck on a plane with no wi-fi, I write out my arguments, which I occasionally publish and commit to the public record.