Jeff Bezos's gain during Covid is enough to give all his employees a $105k bonus(twitter.com)
twitter.com
Jeff Bezos's gain during Covid is enough to give all his employees a $105k bonus
https://twitter.com/_cingraham/status/1304077503560994818
38 comments
Well that's probably not true, if they tend to buy it, wouldn't they already have it?
I mean, when you see people win the lotto what's most common is they start buying luxury goods they couldn't afford before. That and paying off student loans/debt
You're focusing your argument on a specific person while ignoring the point about how a global increase in liquidity triggers global inflation.
Maybe, im no economist but wouldnt the psychological effects of cash windfalls be more applicable? I doubt these amounts would have much effect in the scheme of the global markets
This is actually a really good argument for not tying wages to company success. The baseline wage for Amazon employees should simply be the cost that it takes to house and feed them which is entirely different from the value they produce.
So you are saying they are way overpaid?
What incentive does Jeff have to pay Amazon employees any more than that?
No the baseline wage is what the market will bear. Employment is subjected to market forces just like the goods and services those employees produce. The common example is underwater welders: high demand, low supply (high danger factor) results in $300k/yr salary. Welders at the local muffler shop in my area pay around $20/hr, highly skilled welders get between $75-$100/hr depending on if their independent or work for a large shop, and experience.
875,000 people spread all around the world isn't a lot. The grocery stores in a city of 100,000 people aren't going to raise their prices because the 50 people who work in the local amazon fulfillment center have moved into the upper middle class. Maybe you'd see a slight rise in property values near major Amazon facilities, but in few other cases do amazon employees make up a significant portion of total demand.
A one-off sub-$200k payment isn't going to move a fulfillment center worker to upper middle class.
The fact that the author could make such a simplified blanket statement shows that the author has never run a business nor does he understand how corporations work.
There was some dumb tweet about how he could give everyone in the US $50K which was shown to be wrong after basic division (not to mention the inflation it would cause).
Now we are at dumb tweet #2. This is gains from his stock holdings. Selling all of it would mean he no longer owns any stake in Amazon. And its paper gains on a stock - it could double again in a year at which point the same people would whine that he sold too early so employees only got $100K instead of $200K.
And its price would drop as he sold it, creating an opportunity to whine about how all the regular stockholders of Amazon (who far outnumber employees) suffered at the expense of Amazon employees. Isn't that unfair too?
Maybe then we should go even broader and give it to all of the US? At which point you loop back to dumb tweet #1 and realize that would net to $500 or something per person and be completely eaten by distribution costs, inflation and landlords.
Then write an outrage piece on the landlords.
With enough envy & misunderstanding, you too can complain about how unfair everything is!
Now we are at dumb tweet #2. This is gains from his stock holdings. Selling all of it would mean he no longer owns any stake in Amazon. And its paper gains on a stock - it could double again in a year at which point the same people would whine that he sold too early so employees only got $100K instead of $200K.
And its price would drop as he sold it, creating an opportunity to whine about how all the regular stockholders of Amazon (who far outnumber employees) suffered at the expense of Amazon employees. Isn't that unfair too?
Maybe then we should go even broader and give it to all of the US? At which point you loop back to dumb tweet #1 and realize that would net to $500 or something per person and be completely eaten by distribution costs, inflation and landlords.
Then write an outrage piece on the landlords.
With enough envy & misunderstanding, you too can complain about how unfair everything is!
The current price is not usually what you would get if you sold down to zero, if you could.
There's some misunderstandings in this comment. Liquidating only his gains would not mean he no longer owns any stake in Amazon. And while you're right that selling some of the gains might cause the share price to dip, there's no need to sell shares. He could transfer the shares rather than cash.
But honestly the fine details of this hypothetical cash transfer don't matter. It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head. Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
But honestly the fine details of this hypothetical cash transfer don't matter. It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head. Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
> Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
Because we are the richest humans who have ever lived. The greatest king from 400 years ago doesn't have what I have.
So, maybe us who want to structure it this way are just not selfish and don't want to kill a golden goose while pretending destroying the rich through jealousy might help the real poor.
Because we are the richest humans who have ever lived. The greatest king from 400 years ago doesn't have what I have.
So, maybe us who want to structure it this way are just not selfish and don't want to kill a golden goose while pretending destroying the rich through jealousy might help the real poor.
> It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head.
The absurdity is subjective. As far as I personally am concerned, I could be as rich as Bezos, but I didn't put in the work and I didn't make various choices in my life, while he did. I am where I am and he is where he is, and I don't have a problem with that. I don't know that he ever broke any laws, and in my book that means he is entitled to enjoy the lawful fruits of his labor. I am truly happy to live in a country where people are not subject to confiscation of their hard earned gains because of some perceived "unfairness".
My son enjoys a lot a silly book series called "Diary of a Wimpy Kid". This series sold many hundreds of millions of copies, and most likely its author is a billionaire. He made millions of kids lough and be happy for a bit. My son can't wait for the next book, which is supposed to come out next month. If ideas like "tax billionaires 100%" were to pass, the next book would never exist.
The absurdity is subjective. As far as I personally am concerned, I could be as rich as Bezos, but I didn't put in the work and I didn't make various choices in my life, while he did. I am where I am and he is where he is, and I don't have a problem with that. I don't know that he ever broke any laws, and in my book that means he is entitled to enjoy the lawful fruits of his labor. I am truly happy to live in a country where people are not subject to confiscation of their hard earned gains because of some perceived "unfairness".
My son enjoys a lot a silly book series called "Diary of a Wimpy Kid". This series sold many hundreds of millions of copies, and most likely its author is a billionaire. He made millions of kids lough and be happy for a bit. My son can't wait for the next book, which is supposed to come out next month. If ideas like "tax billionaires 100%" were to pass, the next book would never exist.
>The absurdity is subjective. As far as I personally am concerned, I could be as rich as Bezos, but I didn't put in the work and I didn't make various choices in my life, while he did. I am where I am and he is where he is, and I don't have a problem with that. I don't know that he ever broke any laws, and in my book that means he is entitled to enjoy the lawful fruits of his labor. I am truly happy to live in a country where people are not subject to confiscation of their hard earned gains because of some perceived "unfairness".
You seriously underestimate the role of dumb luck involved at being at the center of just the right causal nexus. Not saying that he's not had to be willing to work hard. However, Don't deceive yourself into thinking Besos is somehow built of a stouter stuff than you or anyone else.
Circumstance doesplay into it A lot.
You seriously underestimate the role of dumb luck involved at being at the center of just the right causal nexus. Not saying that he's not had to be willing to work hard. However, Don't deceive yourself into thinking Besos is somehow built of a stouter stuff than you or anyone else.
Circumstance doesplay into it A lot.
> role of dumb luck
Dumb luck is winning millions at the lottery. I doubt Bezos, or Zuckerberg, or Musk, or Gates, ever did that.
What they did instead was take calculated risks. Like quitting a job at DE Shaw to start an online bookstore, at a time when online bookstores were not a thing. If you or I are senior executives at one of the most successful hedge funds in history, would we quit for a pie in the sky idea?
Well, he did, and Gates and Zuckerberg quit Harvard, and Musk went all in into rockets until he almost lost it all. The part of the iceberg that's not seen in this picture is the hundreds or thousands of entrepreneurs who risked it all and lost it all. We are on HN here, and from time to time we get a peek into the struggles of founders.
Attributing the success of various founders to "dumb luck" is lazy and disrespectful. I did not take these types of risks in my life, so I'm not rich. But I tip my hat to those who did, and got rich in the end. I could be very well be luck, but absent any evidence, I prefer to extend the benefit of doubt, and to just respect these guys for what they did in life.
Dumb luck is winning millions at the lottery. I doubt Bezos, or Zuckerberg, or Musk, or Gates, ever did that.
What they did instead was take calculated risks. Like quitting a job at DE Shaw to start an online bookstore, at a time when online bookstores were not a thing. If you or I are senior executives at one of the most successful hedge funds in history, would we quit for a pie in the sky idea?
Well, he did, and Gates and Zuckerberg quit Harvard, and Musk went all in into rockets until he almost lost it all. The part of the iceberg that's not seen in this picture is the hundreds or thousands of entrepreneurs who risked it all and lost it all. We are on HN here, and from time to time we get a peek into the struggles of founders.
Attributing the success of various founders to "dumb luck" is lazy and disrespectful. I did not take these types of risks in my life, so I'm not rich. But I tip my hat to those who did, and got rich in the end. I could be very well be luck, but absent any evidence, I prefer to extend the benefit of doubt, and to just respect these guys for what they did in life.
> But honestly the fine details of this hypothetical cash transfer don't matter. It's a thought experiment to demonstrate the absurd situation here: a handful of people in this country are amassing more wealth than entire nations while millions of people are struggling to keep a roof over their head. Structuring our society that way is a choice, and I don't understand why anyone thinks it's a sensible choice.
Redistributing that wealth wouldn't create any more houses or food, it would only bid up their prices. For example, in the bay area, rents steadily increased as salaries did because supply of housing stayed the same. Adding more money to a system with the same amount of goods being produced does not change anything. SF has been unable to build more housing, or maintain public infrastructure, or take care of the homeless and thats all in the midst of a tech boom and tons of tax revenue. Thats evidence to me that the problems are simply not about a lack of money.
Redistributing that wealth wouldn't create any more houses or food, it would only bid up their prices. For example, in the bay area, rents steadily increased as salaries did because supply of housing stayed the same. Adding more money to a system with the same amount of goods being produced does not change anything. SF has been unable to build more housing, or maintain public infrastructure, or take care of the homeless and thats all in the midst of a tech boom and tons of tax revenue. Thats evidence to me that the problems are simply not about a lack of money.
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Statements by journalists like this and actions like Bernie Sander's Make Billionaires Pay Act shows that either 1) a number of people have no understanding of how asset prices work or 2) they understand the underlying economics, and would rather stir up anger to implement their agenda than be honest.
An example I've been giving to people who are making the argument about billionaires making money during the pandemic is: Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill and condemns it so that it is now worthless. A week later, the city finds that they've made an error, and there is no toxic waste, so now your house goes back to being worth $300,000. A month after that, you get a tax bill in your mailbox for $100,000, 30% of your $300,000 asset gain.
An example I've been giving to people who are making the argument about billionaires making money during the pandemic is: Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill and condemns it so that it is now worthless. A week later, the city finds that they've made an error, and there is no toxic waste, so now your house goes back to being worth $300,000. A month after that, you get a tax bill in your mailbox for $100,000, 30% of your $300,000 asset gain.
Doesn't that argument depend on their net worth now being equal to (or at least not significantly greater) than it was before the pandemic (or market pricing in the risk of same) started? I.e. yeah, his net worth went up, but it went down first, so it's just coming back to "normal".
That doesn't seem to be the case here- Amazon's (and thus Bezos's) dip in early 2020 is practically invisible compared to its growth since then March, from what I see on https://finance.yahoo.com/quote/AMZN?p=AMZN
So...
Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill- its value drops to $225,000. A week later, the city finds that they've made an error, and there is no toxic waste- and, in fact, that in doing the testing, they discovered deposits of incredibly valuable minerals on your property, so now your house is worth $450,000. A month after that, you get a tax bill in your mailbox for $45,000, 30% of your $150,000 asset gain. (These numbers are based (rounded) on the actual data.)
That doesn't seem to be the case here- Amazon's (and thus Bezos's) dip in early 2020 is practically invisible compared to its growth since then March, from what I see on https://finance.yahoo.com/quote/AMZN?p=AMZN
So...
Imagine you own a modest $300,000 house. A city inspector comes by and finds that your property is located on an old toxic waste spill- its value drops to $225,000. A week later, the city finds that they've made an error, and there is no toxic waste- and, in fact, that in doing the testing, they discovered deposits of incredibly valuable minerals on your property, so now your house is worth $450,000. A month after that, you get a tax bill in your mailbox for $45,000, 30% of your $150,000 asset gain. (These numbers are based (rounded) on the actual data.)
You're accusing others of not understanding how asset prices work, then come up with a scenario that's inaccurate? Or do you claim to understand how asset prices work but not capital gains?
Please help me steelman your argument, assuming you aren't being disingenuous.
Please help me steelman your argument, assuming you aren't being disingenuous.
Holding an asset does not result in a capital gain. The Tax the Billionaires bill wants to tax holding an asset that has appreciated in value. Not only that, but they use a handpicked time boundary that from the bottom of the market crash to calculate a windfall tax.
Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC.
Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 - $12000 $8500 gain (on paper)
March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper)
To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC.
If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it.
So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it.
1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the numbers in my example: Yes 3) Is wealth inequality a giant problem in the country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No
However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.
Lets say you owned 1 BTC since the inception ($0 cost basis) and held it until today. The value of 1 BTC has fluctuated the entire time, but you've only ever owned 1BTC.
Here are a couple lows/highs during the period: Dec 2018 - $3500 Jun 2019 - $12000 $8500 gain (on paper)
March 2020 - $5500 Aug 2020 - $12000 $6500 gain (on paper)
To use the Bernie Sanders standard of 60% windfall gains, you'd owe $5100 from the 2018 crash and recovery. If these types of windfall taxes become a common thing, you'd owe an additional $3,900 from the 2020 crash and recovery. So you'd have paid $9,000 to hold your 1BTC.
If you sell your 1BTC today, you'd get $10,000. With your $0 cost basis, the entire $10,000 is a capital gain. Lets say your long term capital gains rate is 15%, you'd owe $1,500 in taxes when you sell it.
So for investing in 1 BTC, you'd have $8500 in your bank account, and would have paid $10,500 to hold it.
1) Is BTC more volatile than Amazon stock: Yes 2) Does that amplify the numbers in my example: Yes 3) Is wealth inequality a giant problem in the country: Yes 4) Will I shed tears if Jeff Bezos gets a giant tax bill in the mail: No
However, I think it does demonstrate the problem with taxing the change in value of an asset, vs your capital gain from when you sell it.
Inventing hypothetical scenarios where you are right isn't as strong an argument as you think it is. In the real world, a few people have too damn money and spend it in absolutely frivolous ways while millions of other people are being bankrupted.
You probably shouldn’t be smugly accusing others of not knowing how asset prices work (or pretending not to in order to advance an agenda) when you yourself clearly don’t understand how capital gains taxes work (or are pretending not to in order to advance an agenda). Losses are counted against your tax burden.
Apologies if I'm misreading your comment but capital gains (or losses) only apply when the asset is sold.
Given that nearly all Amazon employees get stock, it's quite likely that the average employee gained more than $100K in the last 7 months.
At high stock values, you don’t get many shares. It’s more like one share this year, and one share next year.
And a single share isn’t going to gain $100k.
And a single share isn’t going to gain $100k.
Of course Jeff isn't in the position to sell his entire Amazon shares, so the $150K is more symbolic than anything.
However, a 3%-6% wealth tax (or even a basic VAT) would help redistribute wealth and fund healthcare, infrastructure upgrades, energy security. 3% is fairly modest, but definitely do-able when you're Jeff Bezos.
However, a 3%-6% wealth tax (or even a basic VAT) would help redistribute wealth and fund healthcare, infrastructure upgrades, energy security. 3% is fairly modest, but definitely do-able when you're Jeff Bezos.
We normally try to tax income or consumption for a reason, because taxing capital is incredibly damaging.
And we could seize all of Bezos net worth, and it would only cover a few weeks of federal spending. Of course we could push it closer to 2 months including Bill Gates, Elon Musk, and Warren Buffett, but what do we do when we run out of billionaires in a couple years?
And we could seize all of Bezos net worth, and it would only cover a few weeks of federal spending. Of course we could push it closer to 2 months including Bill Gates, Elon Musk, and Warren Buffett, but what do we do when we run out of billionaires in a couple years?
It's also very difficult to cheat w.r.t. wealth taxes vs. income taxes, which for any appreciable amount of money are trivial to trace.
Who would buy $90B of Amazon shares at market price? The Chinese CCP?
I’d actually like see how they would run Amazon. I’m guessing we might complain even more about their data collection processes.
I’d actually like see how they would run Amazon. I’m guessing we might complain even more about their data collection processes.
If each Amazon employee created a company worth as much as Amazon, it would be enough to give every American a $4,250,000,000 bonus.
This is analogous to when bruce almighty grants every wins the lottery... https://getyarn.io/yarn-clip/71323533-cf3e-4176-b9f1-b22cfa0...