Meredith WhittakerJul 25, 2024

Catching up on some of the "Little Tech" rhetoric from a16z. A lot more to say here.

But one thing that stands out as a rhetorical flaw in the pitch: curbing Big Tech startup acquisitions is listed as bad for little tech. Even as little tech is presented as the enabler of competition and innovation, contra Big Tech's market consolidation. Consolidation that is, of course, facilitated via acquisitions.

https://pmarca.substack.com/p/the-little-tech-agenda

THE LITTLE TECH AGENDA

Marc Andreessen & Ben Horowitz, July 5, 2024

Marc Andreessen Substack
Show threadMeredith WhittakerJul 25, 2024
Of course, VC's require an exit, and an acquisition is the classic exit. But a healthy and competitive innovation landscape does not.
operationrootAug 10, 2024
Show threadMeredith Whittaker

Taxing equity is also, of course, very alarming to investors.

But the argument that this hurts innovation and competition also falls flat IMO. Taxing unrealized investment value would check the overhype-to-acquisition cycle that makes VC's rich, but directs so much energy and capital into overvalued bullshit that doesn't meaningfully work/help people/etc.

Jul 25, 2024 at 10:37amWeb
Show threadHylke Bons 🥜Jul 25, 2024
@Mer__edith this is how it’s done in The Netherlands. no capital gains tax but you pay tax over your total net worth (even unrealised) on a certain date every year.
Show threadJens Oliver MeiertAug 10, 2024

@hbons, @Mer__edith, does that taxing unrealized gains ensure fairness (curious as that is an important value, too)?

Do you get all that tax money back if, say, the next day, a stock market crash wipes these gains? Less dramatically, if you have unrealized losses, do you get compensated for that?

Show threadHylke Bons 🥜Aug 10, 2024
@j9t @Mer__edith I don’t know the reasons for this system but it would be interesting to find out. no, you don’t get compensated for losses. but you pay less tax on your diminished assets the next year of course... :)
Show threadJens Oliver MeiertAug 10, 2024

@hbons, all down for us revisiting how we handle property (and also all in favor of better wealth distribution)—but that seems fundamentally unfair.

After all, it can bankrupt a person without them actually owning *anything*:

* Person owns $50,000 total and puts them in stock
* Stock explodes to $500,000 (not sold, i.e., gains aren’t realized)
* Person needs to pay, say, $100,000 in taxes
* Stock crashes to $10,000
* Person lost $140,000, is bankrupt.

It seems fairer to tax actual gains.

Show threadHylke Bons 🥜Aug 10, 2024
@j9t you can sell some stocks to cover the tax at that measuring moment. and there’s no capital gains tax. so I think in the end it kind of cancels out. having lived under the two different systems for me that was the case.
Show threadHylke Bons 🥜Aug 10, 2024
@j9t if your stock crashes 90% in one day that seems not very smart to invest in the first place and probably only happens to speculators. :)
Show threadJasonAug 25, 2024

@Mer__edith

Money is just a technology that filters a global signal to local action. The flaw in the desing, fear drives us to engineer stores of value because human lifespans have a spectrum of security. Fear drives us to store value in ways that corrupt that global to local signal. Maybe replace income tax with an appreciating asset tax that includes the artificial assets that are equities and land value? Makerspace for the old and unemployed with guaranteed access to startup funding?