Background
I love reading from Sam Altman. He has long argued how labour is being automated away and capital will become increasingly important. He recently posted this article and further argues for a corporate wealth tax.
A corporate wealth tax is problematic but Altman’s case that labour is being automated and that we should think about UBI is worth considering.
Companies + Land are taxed 2.5% of value per year
The government continuously sells these shares to pay for UBI, so I that puts the shares back out on the open market and out of government control.
Pretty quickly, what happens here is that companies don’t have any major owners or shareholders becuase they are diluted down (unless they keep re-buying shares, which generally is hard for founders who have most of their net worth in that same stock). Control of companies becomes diffuse and moves away from founders, like large corporates today (paypal, visa etc.). A lot of the success of high growth companies comes from a core individual or individuals, so dampening their ability to control a company and chart a long term vision seems like a problem.
Private companies pay in cash
Altman recognises the problem posed by private companies – which is that there is no clear market value for shares (so the government can’t easily receive shares and sell them to pay for UBI).
This is a big problem. It will incentivise companies to stay private and find ways to game the valuation system. There is a similar but maybe not quite as big issue for valuing land. Companies, especially those with low revenue or profits are very hard to value.
This all boils down to a corporate tax
Ultimately, I think the practical way to address companies is via a corporate tax, which we already have. It targets the profits of companies, so there isn’t an issue with being public or private, and it allows founders and investors to keep control over a business to chart a long term path that isn’t tied to short term and conservative thinkers/investors. Maybe it’s just that we should think about redirecting corporate tax into UBI rather than into a mixed fund of government monies.
The land tax, on the other hand, maybe makes more sense. Although I need to read more on the downsides there.