Concise

Quality over Quantity. The world is too complex for one tweet. Life is too busy for a whole book. So let's be Concise. One structured thread per week. Clear, useful ideas you can easily understand and apply. No noise. No filler.

@DanielPriestley …and that is why you need a lot of money for entrepreneurship. Because you’ll need money to test a hypothesis, and another one, and another one, and then fail and start again, and again etc..

Successful entrepreneurship is a lot like being a scientist. You have a hypothesis, you test it, and you let the data tell you what to do next. Most founders skip the testing and go straight to building. Then they're shocked when the market doesn't show up. Two tests I run before I commit to anything: 1. The 150 test. I run a small campaign to see how hard it is to get 150 people to signal interest. A waiting list, an expression of interest form, or a scorecard all work brilliantly. I want to know how much it costs, how long it takes, and what the signal tells me about market need. 2. The 30 test. I talk to 30 people, on the phone, on Zoom, or in small focus groups. I want to hear how they describe the problem in their own words. The language they use becomes the language I use back to them. Recently I had two ideas to test. I ran two waiting lists at the same time. One pulled in 750 people, and the other pulled in 5,500. I only had time for one, and now I knew which one. The data made the decision. Twenty years ago this kind of testing cost a fortune. Now it's cheap, fast, and getting easier. Don't look the gift horse in the mouth - just do it. Join my free 20-minute Masterclass on the exact marketing system I use to drive 8-figure growth: bit.ly/4e8puHR

@DanielPriestley @josermafe Yeah that’s a Strawman right there. Climbing a ladder is hard no matter where you are, it’s just that when you are at the bottom, the rungs are way further apart. That’s the point.

@josermafe If it’s that easy, go start a company, hire a bunch of workers, exploit them, keep the difference and then finally give it all to government to prove your point.

Los ricos no generan riqueza, los ricos se la quedan. Si generaran riqueza se llamarían trabajadores.

@DanielPriestley @DanNeidle Are these answers falsifiable?

@DanNeidle 1. High earners from 2015 have held onto the positions. 2. The cohort behind them were somehow derailed by Covid or algorithms. 3. This then corrected and a new cohort of younger high-earners have emerged who were well placed to leverage new technologies.

This is really weird and hard to explain. My first thought is that it's a data error of some kind. Any other theories?

@WesternColumn @DanielPriestley You need to be (drumroll) more Concise!☀️

@concise_msi @DanielPriestley That is the fundamental premise of game theory by the way & it has been wel tested in real world conditions. Unlike your supposed solution that can't be clearly explained. Instead it must be drawn out in a bureaucratic bloat of paperwork. This is why government fails to do thins

Ten reasons wealth taxes don’t work: 1.Europe already ran the experiment and quit. Twelve OECD countries had wealth taxes in 1990; only four do now. Those that still have wealth taxes don’t have CGT or IHT. 2.Norway proved how dangerous they are. A tiny rate hike was meant to raise ~$146m; instead $54bn of wealth fled and revenue fell by ~$448m net.  They hit the opposite of the target. 3.It will hit regular people. Governments typically bring in taxes on the “super rich”, then when it doesn’t work they lower the threshold. 4.Britain already wealth-taxes by stealth. Council tax, stamp duty, dividend tax, frozen thresholds, CGT, 40% IHT, luxury tax, private school tax - we have a diffuse wealth tax wearing a dozen costumes. 5.Wealth is a guess, not a fact. Income hit a bank account; wealth is an opinion about future value. You end up taxing and then litigating based on arguable estimates, every single year. 6.Most people can’t tell wealth from income. The politics sells because the public conflates “owns £10m of illiquid business” with “earns £10m” - they’re nothing alike. 7.It punishes illiquidity. Paper-rich, cash-poor founders must strip dividends from their own companies to pay - taxing ownership by gutting the thing that makes jobs. 8.The mobile escape; the rooted pay. Norway’s most-taxed man left for Switzerland in a weekend.  The regional business owner and the homeowner can’t so they get the bill. 9.It causes capital flight. More super-rich Norwegians left in 2022 than in the previous 13 years combined.  Capital is the most mobile thing there is. 10.It eats the seed corn. Wealth is just deferred investment the capital funding the next hire and the next business. It raises little, invites avoidance, and drains the capital base.  BONUS: 90% of what we call wealth now is intangible - intellectual property, data, algorithms, startup venture valuations, brand equity etc. The days of wealth being houses, factories and materials that can be seized are long gone. If you make your country anti-wealth you are basically making it anti-competitive in the modern economy.

You’re setting an oddly high bar. We do not usually require critics of existing systems to provide definitive “proof of possibility” (whatever that would even mean) before discussing alternatives. People argued for democracy, universal education, and women’s suffrage long before every institutional detail had been worked out. The question is not whether a random person on Twitter can draft a complete tax code. The question is whether the benefits of a wealth tax may justify the effort of designing one. And the analogy fails. The three-body problem is a law of physics. Tax systems are human institutions. We created companies, trusts, offshore jurisdictions, and tax treaties. Humans built these systems, and humans can redesign them.

@concise_msi @DanielPriestley No, I'm not claiming anything, you are. The burden if proof is on you. You advocate for a wealth tax, claim there must be a way to do, but provide no proof for why. It's like me saying there must be a solution for the three body problem, therefore we must act as if there is

@WesternColumn @DanielPriestley Ignorance bias. Just because some random guy can't come up with a detailed 1000+ page fully defensible tax solution and post it for you here on Twitter (I'd say X but that's an ugly name), you assume that therefore a solution doesn't exist.

@concise_msi @DanielPriestley Countries do not exist within a vacuum. They are constantly competing with eachother. If you want to scare off your wealthy, some other country will be more than happy to take them in at no cost to themselves. Your Government has no control over this without waging war

@macareuxmoine12 @tamosats @garyseconomics I do have my suspicious about this too. Do you have any way we could verify?

@tamosats @garyseconomics Most of them are bots.

Why does The Economist hate wealth taxes?

Good that you brought this up. This is precisely where governments need to improve their ability to determine where people genuinely live and conduct their economic lives. Otherwise, the incentive is obvious: remain in the same country in practice, but relocate “on paper.” That “on paper” problem is not a law of nature. It is a governance challenge, and governance can evolve. The important point is that society is often capable of solving such problems. It has solved more difficult problems. It simply does not always do so, because those with the greatest influence over institutions often benefit from exactly these “on paper” arrangements. At least for now.

@concise_msi @DanielPriestley Your argument against Capital flights is just that you can't move your house but you're arguing to tax a much broader set of wealth like stocks & bonds. Those very easily can be moved offshore. Businesses can also relocate as California is finding out right now

1. Extreme wealth and value creation A billionaire may create value, but that does not mean no problems are created. Extreme wealth can still produce disproportionate political, media and market power. It can push up asset prices, shape public debate, and influence the rules of society. 2. Immigration and inequality You’re describing arithmetic, not causation. A made-up room of 10 people does not prove immigration causes harmful inequality in the real economy. There are wages, taxes, labour shortages, productivity, age profiles, public services and long-term effects to consider. So yes, show the numbers. 3. High earners have options The fact that wealth (though definitely not all and the whole thing is questionable) can relocate does not mean it was created in isolation. Billionaires still rely on public institutions, infrastructure, workers, consumers, courts and laws. Dependence runs both ways. 4. Entrepreneurs allocate capital better than governments Markets are powerful, but they are not infallible. They allocate some resources efficiently, yet they also reward tobacco, gambling and predatory lending. Humans are not perfectly rational actors. Profit can come not only from creating value, but also from exploiting addiction, bias and imperfect information. Governments fail too. The question is which institution works better in which domain. 5. Benefits spending Welfare design and wealth concentration are separate questions. One can favour welfare reform while still believing extreme concentrations of wealth create economic and political problems. Millionaire exodus Migration responses exist, but they are often exaggerated. Wealthy people are tied to businesses, networks, family and institutions. Some will leave, others will stay. The question is the net effect on government revenue under a well-designed, joined-up policy. Wealth taxes failed for 30 years Policy failure does not prove policy impossibility. Poorly designed wealth taxes failing is not evidence that all wealth taxes must fail, any more than bad farming proves farming does not work. I will state this again. If we can go to the moon, we can create effective tax policies where at the end of the pipe, a well paid government sector (think Song China) will emerge, one that attracts talent. @garyseconomics this thread may have some back pocket stuff for you in there, though you may know of these lines of thought anyways

1. Quite a shift on the goalposts but fine… yes… extreme wealth isn’t bad depending on how it’s derived. If I create software and 100,000 people subscribe to it voluntarily because it’s of value to them and then I sell 10% of my company to willing investors to raise money for growth and that makes me worth £1Billion… no problems have been created. 2. The evidence is pure mathematics. If I have 10 people in a room with an average of $50,000 and then 2 people arrive with $0, the wealth inequality jumped up. Unfocused immigration has been a consistent issue in all western democracies that are now complaining about inequality - UK, USA, Canada, Aus, NZ, western europe, etc have the same issues. 3. Institutions rely more on high tax payers than tax payers rely on them because we now live in a globalised world where high tax payers have access to many options. It sucks but as it stands, the power has shifted into the court of the high earner / wealthy person which is why many smart countries have started rolling out the red carpet for them. 4. I could make the claim based on countless data points and examples but the underlying principle is that when a person makes a buying decision that impacts them personally and spends their own money they make more considered choices than a person who is spending money that is not theirs for things they will not use themself. Also, competitive markets produce winners faster because they are running faster and more frequent experimentation. The government is a monopoly with little accountability so its learning cycle is slow. 5. In previous generations in Briton, benefits were lower and less frequently used. This meant more money spent on more productive things and more productive people producing value as well as consumption. If inequality is a problem to be solved, having millions of people institutionally locked into the bottom is surely part of that problem Myth of millionaire exodus was based on US citizens leaving their state or the US. The UK is a transient country built with people from all over the world. We are one of the countries with the most duel citizens. The US is one massive market, the UK is a much smaller market. Given the lack of success over 30 years of wealth tax attempts, why make it a cornerstone policy when there are better approaches and more proven ways to raise living standards.

@DanielPriestley @GBNEWS @Caiwilsh Money can reasonably be described as a present measure of economic capacity, although that is a somewhat awkward way of putting it. But if that is true, does it follow that wealth is simply future money?

@GBNEWS @Caiwilsh Wealth isn’t money. Wealth is an approximate measure of a future economic capacity.

'When somebody is worth the same amount as the poorest half of the world that is the result of a grotesque system.' @Caiwilsh on Elon Musk becoming the world's first trillionaire.

1. “Pragmatic limits” A tax having limits doesn’t answer the underlying question: should extreme wealth concentration exist at all? 2. Immigration and inequality Could you point to solid causal evidence? Inequality has risen across countries with very different migration levels. 3. High earners fund institutions True, but their wealth also depends on public institutions, infrastructure, laws, and millions of workers. Their wealth also depends on the rest of society. 4. Entrepreneurs vs bureaucrats This assumes wealth holders are always better allocators of capital than democratic institutions. That’s unproven. 5. Benefits spending Again, this is a different debate. Welfare policy and extreme wealth concentration are separate issues. Final claim: wealth taxes do more harm “Well proven” is way too strong. Economists still debate wealth taxes, and outcomes depend heavily on design. This last bit is key. Bad farming doesn’t mean farming doesn’t work. Bonus: Wealthy people leaving Leaving is way more complicated than some make it out to be. For readers I recommend Concise Note #7: The myth of the millionaire exodus.

1.It is. Close to the extent that it pragmatically can be without doing more harm than good. Regardless of ideology, there are limitations whereby you are cutting off your nose to spite your face with taxation. 2. It’s entirely possible that the cause of rising wealth inequality is an influx of people who are economically poor. It’s actually not idea to have the cause of the measure be the measure itself… “wealth inequality is caused by wealth inequality” isn’t elegant. I personally believe the cause of wealth inequality is primarily the recent existence of new digital assets that massively favour a small group of digitally savvy people or those with existing assets that scale. Secondly it’s caused by government stimulus inflating the costs of homes and traditional assets. Third would be the widening of the base through untargeted immigration. Very distant would be billionaires buying more assets with their passive income (which wealth taxes may or may not address). 3. Institutions are broadly funded by high tax payers. If you destroy the class of people who generate surplus taxation there’s no money for funding institutions. A tiny minority of people generate more taxation than they consume from government and these people can increasingly be anywhere. Ideally you want to create the conditions where more of these types of people want to relocate into the economy and fund these institutions. 4. You can’t redistribute wealth that has relocated. Also, moving money from wealthy entrepreneurs into government bureaucrats is economically akin to taking Lewis Hamilton out of the car and putting in an uber driver. If you want a growth economy, you need people who have the ability to create it. 5. Hardly a separate topic. Why are we talking about higher taxes in the first place? To pay for the things government policy has mandated or normalised. Every £40 the government can save is £100 a productive person doesn’t need to be taxed on. By all means talk about wealth taxes. But if you do, expect sensible push back. They are well proven to do more harm than good and getting disagreement should be expected.

Thanks for replying. But most of these points seem to sidestep the central issue. 1. UK tax system is a mess Agreed. But a messy tax system doesn’t answer whether extreme wealth concentration should be taxed. 2. Immigration increased inequality Adding poorer people changes statistics, not necessarily inequality’s causes. 3. Wealthy countries are best Correlation isn’t causation. Rich countries also tend to have strong institutions, education, and welfare states. 4. Governments don’t redistribute well Even if some spending is inefficient, that doesn’t imply all redistribution is ineffective or undesirable. 5. Benefits are unsustainable This distracts from the issue. A country can debate welfare and wealth concentration simultaneously. With all due respect a lot of these points feel a bit like “let’s not talk about weath taxes, let’s talk about this other thing”. Let’s not overcomplicate it. The wealth of the extremely wealthy ultimately depends on the bottom 99%: people taking their mortgages, paying rent on the many properties they own, working in their companies, and buying from the businesses they own. So let’s take care of them.

A few of these issues would make wealth taxes hard to implement - the full box and dice makes it an ideological crusade that is destined to fail. What if the truth was more simple. 1. The UK tax system is now a complete mess. It’s not a well designed system for creating a vibrant economy it’s 50+ years of new rules and exemptions being cobbled together. A streamlined system designed from first-principles is what’s required as the most important step forward. 2. Wealth inequality was expanded when millions of people arrived without any wealth to begin with. It’s a mathematical certainty that if you bring in a few million people who have zero to start with you get a massive expansion at the bottom of the wealth pyramid. Add to that, when millions of people only have their labour to trade, the value of local labour drops. 3. Wealthy countries are the best countries. There are no people trying to cross the ocean to get into Ethiopia. Destroying wealth through taxation simply makes the country a poorer nation. 4. Governments don’t typically redistribute wealth. They use the new tax as a new way to leverage up more debt. Then they use the debt on low-productive spending to do things that would have been faster and cheaper if people had of done them for themselves. The transfer moves national private wealth to government generational debt. 5. Record levels of people on benefits is unsustainable. We now pay more in benefits than we collect from record high income taxation. One in 5 working age people doesn’t work. If you think the problem the UK has is that we’ve got 150 wealthy people, you are driven by envy not reality.

@Team687 @jr88030 @ZubyMusic Well I do believe a lot of “the poors” have jobs and they get paid for doing those. Isn’t that a possibility?

@concise_msi @jr88030 @ZubyMusic If not money just for existing, what are they getting paid for?

Some people really think that billionaires' wealth is just sitting in a massive vault like Scrooge McDuck... Hiding it away from the poors. 😂

@Team687 @GrumpyOldGit5 @jr88030 @ZubyMusic And I presume you have money on this somehow? When one is this certain about the future, it would be stupid not to put money on it!

@concise_msi @GrumpyOldGit5 @jr88030 @ZubyMusic No, the bottom 1% will just complain alot and actually do nothing more than to continue demonstrating their greed by demanding more handouts.

@Clgirl25 @ZubyMusic They have created "exchange value" not "social value". But their existence carries with it real social cost, in the form of asset price inflation, political power etc. Whatever value they created doesn't justify the social cost they bring about.

@concise_msi @ZubyMusic They have created more than a thousand times more economic value.

@MaxUtilitarian @realjonnyreb @ZubyMusic Jonny Patriot knows which way the cookie crumbles.

@realjonnyreb @concise_msi @ZubyMusic Well, there's that.

@PeteCourcy @Drewder @ZubyMusic In theory yes. In practice, companies are led by people. And people are very much incentivised to give up competition and sell their innovative company to a conglomerate, decreasing competition.

@concise_msi @Drewder @ZubyMusic Except that they're not good at creating monopolies, they're quite good at breaking them up - as large profits incentivize competition.

8/8 Creativity does not disappear. It moves upstream.

7/8 Execution becomes cheaper, while judgement, direction, and taste become more important.

Concise Note #19: Moving Creativity AI didn't destroy creativity. It moved it. A Thread 🧵