> segways smoothly into a controversial if not outright false water down ("...basically nobody paid...")
501 returns out of 50 million filers in 1963, with the top 1% paying on average just ~16% in 1962.
> before accelerating out of the corner into just stating a position on hotly contested stare decis as flat fact ("Corporate tax is meant to...").
The purpose of corporate tax in the US is to generate public revenue. The history shows this very clearly.
And just to be clear: the original comment conflated individual and corporate tax, and there's still an element of conflation in your comment.
C corporations, which most big businesses are organized as in the US, are taxed on their profits. If and when profits are distributed to shareholders, the shareholders pay tax on the dividends. This is double taxation. Owner-employees are taxed on their salaries. And when they dispose of their shares, they pay tax on the capital gains.
There are legitimate discussions to be had about wealth inequality, whether the current tax regime is suitable for the world we live in, etc., but the idea that punitive taxation (at the individual or corporate level) would be the best way to prevent exploitative business models and practices is dubious. This is exactly what tort law and consumer protection regulation is for.
The actual data: in 1963, 501 out of around 50 million filers were affected by the top marginal rate.
According to the Tax Foundation, the actual average effective tax rate for the top 1% of earners in 1962 was only ~16%. That's because, again, there were massive legal deductions, exemptions and shelters that were permitted to basically ensure that very few people actually paid this rate of tax.
You are correct that the wealthiest of the wealthiest (the top 1% of the top 1%) have seen their fortunes explode in recent years, and there are big issues with this.
But when you're talking about Facebook's despicable behavior and how to deal with it, I don't see how "bring back a marginal tax rate of 90%!" is a viable solution to this problem. The obvious solution is to ensure you have strong consumer protection laws and enforcement and a functioning tort law system.
I do think there is obviously an issue with the influence the wealthy have on regulators and their ability to play the court system, but here's a problem: the wealthiest of the wealthy are still going to be the wealthiest people even after you tax them, and the government's dependence on their wealth for tax revenue can become its own problem.
Taking the 1998 Tobacco Master Settlement Agreement as an example, you now have state and federal governments that rely heavily on continuing tobacco revenue because the hundreds of billions of dollars of settlement payouts are directly tied to the future sales of cigarettes. Therefore, the state and federal governments want people to keep smoking because if they don't, the tobacco companies wouldn't be able to keep up the settlement payments. It's quite perverse actually, and we should be wary of a similar Big Social Media settlement wherein the government has reason to push for Facebook's continued financial success.
> What I take serious issue with is the deceptive and uncharitable nature of your "correction", which didn't mention that the number I quoted was real and in effect up until 1963.
"Reagan-era" is the 1980s. You were off by almost two decades. That warranted a correction.
And as I noted, the number of people who this rate actually applied to was unbelievably small. To put it in precise terms: in 1963, only 501 returns out of approximately 50 million filers actually paid this rate. According to the Tax Foundation, the actual average effective tax rate for the top 1% of earners in 1962 was only ~16%. That's because, as I noted, there were tons of exclusions, deductions and shelters permitted, the biggest of which were removed as the tax rates were lowered.
Taking the position that tort law and consumer protection regulation, not punitive tax rates that will never actually be paid, is the way to deal with corporations behaving badly is common sense, not pro-oligarch.
> First, for accuracy: it was above 90% from WWII up until 1963.
Reagan took office in 1981. Is it that difficult to acknowledge that you posted something that was inaccurate, and move forward from it?
Also, as noted, basically nobody ever actually paid these rates.
> "The (developed) world" is not doing nearly as badly as the US. If the US was more closely aligned with Europe in terms of inequality, it'd be in much better shape.
Wealth inequality is higher in the US than it is in Europe, and this certainly has some nasty effects. But there's still significant wealth inequality in Europe and Europe has its own major economic problems, including wage stagnation, higher inflation (largely due to overdependence on imported energy), slower GDP and productivity growth, lower R&D spending, high structural unemployment (in some countries), greater reliance on bank lending due to weaker markets for equity financing, an overall environment that makes it harder for high-growth businesses to emerge, etc.
If you could somehow reduce wealth inequality in the US while avoiding the ills that plague Europe, then yes, the US would be "in much better shape."
We should also note that Europe isn't a country. In Sweden, the top 10% hold almost 75% of the wealth. In Germany, it's around 63%. Belgium has the lowest figure at around 43%. In the US, the top 10% holds 68% of the wealth, but what distinguishes it from countries like Sweden and Germany is the stunning growth in what the top 1% holds.
> I in no way claimed otherwise. Perhaps read my very short comment again, more carefully this time.
Your comment directly implied that taxation should be used to prevent companies from "getting to the point when it feels 'outlandish' to them to be punished for trying to destroy the society that granted them their wealth."
This isn't the purpose of taxation and if you tried to use it as such, you'd fail spectacularly.
First, for accuracy: the personal top marginal income tax rate during the Reagan-era was not 90%. When Reagan took office, it was 70%, which is where it had been since the 1960s. The Economic Recovery Tax Act of 1981 dropped it to 50% and when he left office it was at 28%. Basically nobody actually paid the top marginal rate because there were so many exclusions, deductions and shelters. Many of the biggest went away when the rates dropped.
As far as the corporate tax rate, the top marginal rate was 46% in the early 80s and dropped to 34% after the Tax Reform Act of 1986.
Accuracy aside, the big problem with your comment is that you're conflating consumer protection with tax rates. You can make all sorts of legitimate arguments about the wealth situation in the world today but let's first acknowledge that not every profit-making company engages in the type of despicable behavior Facebook has.
If corporations were taxed at 90%, you'd see mass conversions to pass-through entities, profit-shifting (moving to overseas domiciles) and capital flight, massive deductible spending to zero out taxable income, a huge drop in domestic investment, a huge increase in debt financing, and so on.
Corporate tax is not meant to be punish businesses for harmful actions they might theoretically engage in. That's what the tort system is for, and even then, the system is primarily compensatory with punitive damages reserved for egregious conduct.
So we don't need to use tax to stop Zuck from Zucking. We need the tort system to work and, arguably, stronger consumer protection laws that acknowledge the harms of these products much the way we eventually acknowledged the harms of products like cigarettes.
> If you managed to learn more from your fast food than your humanities degree...
It's not about learning "more". It's that earning a degree is an academic undertaking whereas working at a coffee shop is "real life".
There is no need to treat one as more or less valuable/useful than the other. They're just different kinds of human experiences. Learning is possible from both.
But even the market for "photographers" is arguably in secular decline. Smartphones and AI have turned everyone into a photographer. The world is awash in visual content.
> While you practice the thing you want to learn, you will not feel good, especially not starting out. This honestly is a bit of an understatement, it really sucks and depending on the task, odds are you may want to lie down for a bit when you’re done with your first practice session. You’ll also almost certainly perform significantly worse toward the end of the session. All this is your brain and muscles getting tired. It’s a good meta-skill to learn to self-assess and pick up on this.
> Learning something completely new from scratch is really awful, and at this point most people are very disheartened and want to give up, which is unfortunate, because if they got back to it the next day, they’d find it’s actually gotten tangibly easier.
This certainly applies to some people, but not all people, and I suspect that the people who actually take the time to "learn new things" are those who enjoy the process. People tend to avoid things they don't enjoy, especially when those things are discretionary, so telling the people who don't enjoy the process of learning new things to do so anyway is preaching to the wrong audience.
Sure. How did the fact that the internet was a revolutionary, civilization-changing technology that produced some of the best investments in history cause housing to become unaffordable?
If you're worried about asset prices and the affordability of housing, you should be far more upset at central banks/monetary policy than you are at the internet, ecommerce, smart phones, etc. You could also be upset at zoning laws, and tax and immigration policy.
> No, I think there is tremendous potential value in some areas.
So who is going to decide what has tremendous (real) value and what doesn't? And how are they going to force private individuals and enterprises to invest only in what has (in their estimation) value while at the same time ensuring that the level of investment permitted is sufficient to realize the value but not excessive so as to cause malinvestment?
> Exclusive: OpenAI Losses Increased Nearly 8X in 2025, With Spending Hitting $34 Billion
Start with the headline. He's comparing the net losses between 2024 and 2025, but $41.55 billion of the 2025 loss is a non-cash charge from "changes in fair value of convertible interests and warrant liability" tied to the for-profit conversion. He notes this but doesn't actually seem to understand (or want to explain) what that means.
It's a non-cash charge. This is not money actually going out. It's not an operating loss.
He could have used the increase in operating loss or expenditures to make his point, but he basically chose the biggest number he could find and present it in a way that distorts what it is. The only two possibilities seem to be that he is trying to be bombastic ("8X") or he actually doesn't understand what he's looking at.
> It then marked $3.74 billion of losses as “net loss attributable to noncontrolling members capital,” leaving the net loss attributable to the company as $5.09 billion.
> It’s unclear what this means, nor how OpenAI reconciled the removal of $3.74 billion in costs.
This is so strange because it's basic consolidation accounting: allocating a share of losses to minority equity holders. There's nothing sinister about it, and it's not anything that's being hidden. This is a standard practice for companies and anyone who is positioning himself as having the requisite expertise to comment about the financials of AI companies (or any companies for that matter) should know this basic accounting and an absolute nothingburger.
There are other aspects of his writing that are pretty distorted. Like, he states "I’m not sure how this company finds a way toward any kind of sustainability or profitability" while ignoring that OpenAI actually improved its gross margin from around 28% to 43%. Whether it ever becomes sustainably profitable is still a big question mark but again, someone acting as a financial commentator should know this stuff. So he's either feigning ignorance to sell his narrative (and newsletter subscriptions), or he's really ignorant.
I don't know why you're conflating the issue of income and wealth inequality with the fact that investments in "the internet" (and all the associated hardware and infrastructure) proved to be some of the best investments in history. And not because of monetary policy, financial engineering, and the like, but because the internet proved to be a civilization-changing technology.
A reporter doing his job well (in this context) would understand that using non-cash accounting events to make hyperbolic posts about cash burn is simply not honest.
I don't have a problem with skepticism around AI investments (I agree with a lot of the skepticism) but if you're going to make public arguments about these investments, you should have a grasp of basic accounting principles.
> Or in fact that this is all that's happening, _possible malinvestment_?
Speaking of rigid and binary thinking: do you think there's absolutely no value to LLMs and that every investment in them is malinvestment?
> Neolibs have the most rigid, binary and least creative minds I've ever encountered...
If it's so simple, why don't you explain how The Government is going to prevent private individuals and enterprises from investing in things that some people (who may or not be right) believe are worthless?
> Ed Zitron already completely defeated the comparison that this is just another dot com boom/bust with eventual payout
"This time it's different" is a story told by people at both extremes.
"There is unsustainable excess and malinvestment but it's not going to be the end of the world and there will be some really important and successful things that are left standing alongside some carnage" is a narrative that doesn't appeal to the masses for a variety of reasons. And people like Zitron, who profit by selling narratives, often avoid narratives that require nuance and balance because it forces them to produce more complex and detailed, and less bombastic, analyses.
I won't dismiss the human cost but boom and bust cycles have existed for a very long time. This isn't a new thing today, and it wasn't new then either.
You can view these things 100% cynically, or you can also consider the possibility that markets over (and also under) shooting are also a form of discovery in which the value of new business models, technologies, etc. are determined. While I'm not personally a fan of today's financial engineering and have concerns about direct government investments in particular, net-net it's probably better to live in economies where capital is abundant and malinvestment is possible, than to live economies where the opposite is true.
From the .com days, I personally observed four categories of outcome:
1. Total financial ruin. If we're being honest, this was often the result of individuals who got rich very quickly and spent even more quickly.
2. Survival. Lots of people got laid off and eventually found new jobs when the economy recovered. Their experience was valuable. A decent number of these people went on to ride the recovery boom and are comfortable if not "rich" today.
3. Survival with a story to tell. People who survived and came away with a story to tell ("at one point I was worth millions on paper and 6 months later I was laid off").
4. Huge windfall. Some people made a lot of money and through luck and/or smarts, managed to walk away from the implosion wealth intact.
The truth is that nobody can predict with certainty the future. Markets are the place where humans make bets about the future. Expecting entirely orderly markets in which everything moves at a predictable pace in a predictable way, where no participants win or lose too much, just isn't realistic.
> I don't understand the people who have the patience to listen to Zitron. It's all one-tone takes with no place for nuance...
But that's why some people give him the time of day. A lot of people prefer to see things in black and white because it's easier on the brain.
Basically, Ed is doing the easy part (pointing out the malinvestment) and not addressing the harder part, which is to predict what comes next in realistic terms. Because the idea that LLMs are just a $30-40 billion/year TAM and there's going to be an epic implosion that leaves only rubble is not the likely outcome.
It's a bit like the first .com boom. There was a huge amount of malinvestment and the bubble popping was painful, but there really was a business for people to buy stuff online, to consume paid content online, etc. The malinvestment got sorted and a couple decades on, immense wealth has been created.
501 returns out of 50 million filers in 1963, with the top 1% paying on average just ~16% in 1962.
> before accelerating out of the corner into just stating a position on hotly contested stare decis as flat fact ("Corporate tax is meant to...").
The purpose of corporate tax in the US is to generate public revenue. The history shows this very clearly.
And just to be clear: the original comment conflated individual and corporate tax, and there's still an element of conflation in your comment.
C corporations, which most big businesses are organized as in the US, are taxed on their profits. If and when profits are distributed to shareholders, the shareholders pay tax on the dividends. This is double taxation. Owner-employees are taxed on their salaries. And when they dispose of their shares, they pay tax on the capital gains.
There are legitimate discussions to be had about wealth inequality, whether the current tax regime is suitable for the world we live in, etc., but the idea that punitive taxation (at the individual or corporate level) would be the best way to prevent exploitative business models and practices is dubious. This is exactly what tort law and consumer protection regulation is for.