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I think in conversations like these most people on the successful side underestimate how valuable the starting advantages were, and most people not on the successful side overestimate how valuable the starting advantages were. Meanwhile almost everyone misunderstands what the advantages really are.

People will talk about the $300k loan Bezos started with and think "boy golly, with 300 THOUSAND dollars, I could do anything!" meanwhile millions of people with much more than that fritter it away on nothing, even if they are trying not to. It takes something more to be Bezos.

Whereas the proverbial Bezos will think about the grit and determination it took to march for decades through treacherous financial and political swamps, and think "would I have let a lack of an initial 300k stop me from even starting? Would I have failed to secure the capital and cooperation without that seed? Given the heroics I've pulled over the years? Hell no, that wouldn't have stopped me."

But here's the part that most people misunderstand. The 300k is a small advantage, it might have made a difference, and some cases might make THE difference, but it's only the most concrete, obvious advantage. The real thing is like this:

In my earliest memories I was pretty poor, but also in those memories both my parents were going to university, while my dad was packing fiberglass at a factory. Then they graduated and he got a job and we became suburban middle class, my dad staying at his big corporation for the rest of his life, while my mom more or less stayed at home although she went back to school and ended up about half way through a PhD program. I would think about what career I wanted as a child, and what school I might go to, that sort of thing.

Fast forward to my first wife who I met when I was 17. She is self described "british ghetto trash," and she emigrated because she couldn't escape her accent, in a phrase. She taught me what I didn't know about privilege, at a time before that was a term anyone was using for this purpose. The reality she knew in the council housing (ie projects) where she grew up was that her dad was a scam artist flake who floated in and out of her life without regard for the many promises he made, and whenever he pulled off a big one he'd show up and splash a little cash around before running off again. He was far from ashamed, he was a "2 types of people in this world!" type scammer. Her mom wasn't much better, basically scamming the government for benefits, working whatever angle she could but never actually "working working."

My ex never thought about careers or schools or anything. She thought about what scam she could pull to make it to next month. It was a weird series of events that brought her across the pond, and into university and beyond.

That's what Bezos had that my ex didn't have. He thought he belonged inside society, he thought he could do things and that people would let him. He thought that so very much that never even had to think it consciously. The same for her but opposite, the idea of participating in society at all, never mind changing it was utterly foreign to her experience.

I think it was crushingly more important than the 300k in terms of pivotal advantages. It sucks to start with bad cards, but it's much tougher to not be in the game in the first place.


This is such a good point. People tend to focus on money as the main form of privilege, but that internalized sense of “I belong here” might matter even more. It’s not just confidence—it’s a kind of default assumption that you’ll be taken seriously, that you’ll have options, that failure won’t wreck your life.

I’ve seen it in startups too. Some founders take bold risks because they know, consciously or not, that if it doesn’t work out, they’ll be fine. Others carry the weight of “I can’t afford to screw this up,” and that changes how they operate. Even if they’re equally capable, the emotional cost of risk is just higher when you don’t have that built-in safety net.

And from the outside, those differences are invisible. Both people might succeed, but one was playing on easy mode and didn’t know it. The other had to brute-force their way through every step. That gap is real, and we don’t talk about it enough.


Can't you just as easily make the opposite argument?

Founders that have a safety net have less drive and motivation to give it their all, because they have a safety net. They simply just don't have the same pressure to not fail, because if they do - no biggie.

The founder with no safety net, no real backup, needs to give it his all, because he's doomed if his idea doesn't work out.


I’m not sure you really can, at least not in the way it’s often portrayed. Founders usually need a high level of skill or a clearly transferable capability in something already valuable. That phrase gets repeated a lot, but the more I think about it, the more it feels like an oversimplification. Maybe there’s a version of it that works, but it’s probably more about reframing or uncovering hidden leverage than starting from zero.

Money, education, powerful parents, safety nets, a good upbringing: these things are levers that multiply the work you put into things. I think a lot of people put the maximum effort into their work and lives, but these levers mean that existing privilege will usually result in amplified results for the same input level of effort.

It’s both.

Upbringing, background, mindset, social safety nets (eg knowing that if you fail, you’ll still be fine) — these things are huge and make a huge difference.

But 300k then is about 650k today, and just the time this would buy me alone would mean I’d be able to dedicate my full energy to a few projects that, while I don’t think could ever reach the scale of Amazon, would at least have the potential to make a reasonable return on that initial investment. The 300k is a huge boost that a lot of people don’t have access to.

But you’re absolutely right. If you’re not in the game at all, it’s very difficult to get in, and those other non-financial benefits are a big deal.


> He thought that so very much that never even had to think it consciously.

This is such a huge part of it. Our upbringing gives us our culture and the set of ideas and expectations that form our "default mode" thinking.

If your default mode assumption is that you are capable and have agency, that investing in a long-term project will reliably produce long-term value, and that risks are often worth taking, you are set up to try to build something amazing.

But if your default mode is that you are a pawn at the whims of other people, that whatever you try to build can be easily swept away by chance or bad actors, and that you've got no room to fail, then at best you'll just try to eke out a stable existence with as little risk taking as possible.


Plus, this isn't just a mindset that people have in their heads, some chip on their shoulder from their upbringing holding them back: It's their actual reality.

Some people do have agency to act, and the assurance that their actions will produce value, and they are in fact not in catastrophic danger. And some people really do not have agency, they are pawns largely under the control of others, and live on a knife's edge where everything they have might be swept away by things entirely outside of their control. These realities shape whether it is even possible to take the risks that are necessary to reach success.


I agree, although in a way that mirrors my opening statement from OP: I think people who don't have this disadvantage tend to underestimate how real it is, and those who have it tend to overestimate how real it is.

> He thought he belonged... he thought he could do things and that people would let him.

This is a good point and, in the case of successful startup entrepreneurs, it may not rely solely on how much society grants or denies that belonging. Entrepreneurs tend toward a kind of selective irrationality in how they see themselves and in how they think others see them. Steve Jobs was always the first victim and/or beneficiary of his own reality distortion field. Internally, this lack of self-awareness would tend to help one ignore some of the emotional downsides of belonging being denied and externally to seize more belonging than is being granted - just through sheer chutzpah.

I've heard it said that many successful startup entrepreneurs feel all the insecurity of 'imposter syndrome' without processing any of the 'imposter' part. They tend to think they belong even when they objectively don't. While irrational, annoying and unhealthy, it's hard to imagine this doesn't have some advantages too.


> Whereas the proverbial Bezos will think about the grit and determination it took to march for decades through treacherous financial and political swamps

I cant help, but these people are frequently the swamp. They fit right in, they create it and they create horrible environment for everyone else.


It’s not just starting advantage, it’s also luck which gets talked about in the blog. You could start with a set of bad cards and still end up being much ahead than someone with good cards, if you have a little bit of luck.

> That you got lucky at a singular moment in history and now you're an old man is not an easy set of facts to accept.

This often gets talked about when we discuss CEOs and Billionaires, but it’s also equally applicable to engineers, managers and directors. You could go to the same college, start at the same company, work the same amount of hours, work similar projects, and bam, one of you gets laid off, the other one gets to see promotions and stock growth. And these successes then compound.


I think he means just try shit until something works better.


I am building a company that accepts user generated data, and one surprising struggle is getting my lawyers to stop writing shitty, overbroad, abusive TOS. They are just so used to it, and all the templates and boiler plate is designed to give me everything and the user nothing. And if I want to do better by ny users I have to fight and cajole my own lawyers and pay extra for them to do the extra work of writing terms that aren’t predatory because that is unusual and custom.

It sucks.


> It sucks.

It depends on your perspective surely? As a lawyer your job is typically to protect your client from legal risk, so if users are happy to sign a really expansive set of terms (which experience shows is the case) that gives grants lots of permission to do stuff with their data then that's low risk. If you as a business don't want that then you need to make it explicit that you're willing to take on some extra risk.


Also by using “standard boilerplate” they are using language with meanings well established by precedent. Craft your own version in “regular English” and it’s much more open to litigation.


Wishing you luck, you are doing some good work putting in the effort to respect the data of the user, something which stands out in a seas full of companies who do not care.


I'm pretty pissed that they baited and switched me--I bought a bambu printer on holiday sale under the previous terms, and they are now going to change the terms. Feels fraudulent.


They are a step on the road to fully responsive rpg worlds though, which don’t have to be text based.


It's been written at length here and elsewhere by game devs, but this isn't a thing that anyone would truly want. A purely AI generated or controlled world would have no constraints, and be fundamentally untestable - games aren't really games unless they have constraints. Even the 'purest' sandboxes have some kind of constraint buried within them, and I think you'd find an RPG of this type extremely boring, at least with current technology.


> this isn't a thing that anyone would truly want.

Citation needed.

> A purely AI generated or controlled world would have no constraints

That's a shitty AI then. Make a better one. I can play 2000 Vampire: The Masquerade games with 2000 different groups. They will each be different, but they will also be each distinctly Vampire: The Masquerade ttrpg games. If the AI you are thinking about can't do the same, then think of a better AI.

> at least with current technology.

Well. Who is the group who will make the "next technology"? Should we work on that, or just lay down on the ground and wait for it to fall from the sky? Testing what are the limits of the current technology (as done in the paper we are talking about here) is the way to get there. Or at least to systematically answer the question of where and what are we lacking.


> Citation needed.

Lol, a citation of what? This is my opinion statement and the rest of my post follows it.

> That's a shitty AI then. Make a better one. I can play 2000 Vampire: The Masquerade games with 2000 different groups. They will each be different, but they will also be each distinctly Vampire: The Masquerade ttrpg games. If the AI you are thinking about can't do the same, then think of a better AI.

Sure, I'll get right on that.

> Well. Who is the group who will make the "next technology"? Should we work on that, or just lay down on the ground and wait for it to fall from the sky? Testing what are the limits of the current technology (as done in the paper we are talking about here) is the way to get there. Or at least to systematically answer the question of where and what are we lacking.

I'm really unsure of what or who you are addressing here but it certainly isn't anything I've written in my post.


> citation of what?

Citation that nobody wants what you described? The sentence which I was quoting.

> This is my opinion statement

Your opinon can be that "I don't want this." "nobody wants this" is refers to things outside of your head. Do you see the difference between the two?

> it certainly isn't anything I've written in my post.

Your post is suffused with defeatism. The 3 "no"s it contains are: "nobody wants this", "with current technology this cannot be fun" and an implicit "we can't make the next technology". I believe each of those are wrong, and I'm calling you out on the attitude.


Ok, then what advances are being made in AI technology in this gaming that lends you such confidence? Care to make any citations yourself here? I don't really care what you think of my attitude, nor does it make for productive discussion or good posting.


> Care to make any citations yourself here?

Happily. I know you are wrong on the "nobody wants this" statement because I want it. With a sweeping generic statement like "nobody wants this" a single example is enough to disprove it. There you have it.

> what advances are being made in AI technology in this gaming that lends you such confidence?

There is a ton of experimenting going on. AI Dungeon and Deep Realms are the two obvious ones. I don't think anyone has found the golden solution yet, but that is also not evidence that no such thing exists.


I don't really buy this. I don't think the tech is quite there, although at this point it might be a matter of clever prompting more than a fundamental limitation depending on the type of game you have in mind. A strong enough DM AI could take a prompt like "I want to play a game with a similar loop to Satisfactory, set in Mordor at the beginning of the second age." And the AI could figure out from there, including devising appropriate constraints.


There's no reason why an AI-driven sandbox cannot have constraints, as well.

Now it's true that, with the current crop of LLMs, a persistent enough player would always be able to break through them. But if it takes conscious and deliberate effort, I think it's reasonable to say that whatever experience the person gets as a result, they were asking for it.


I mean this isn't it fun to generate ancient rome/alice in wonderland/medivial Poland kind of the world?


This looks really cool, great work. One thing I want to preregister though: I bet against the whole Entity subclass thing. 60% of the way through the first serious-business project, you're going to RUE THE DAY. I'll look forward to seeing what people do :)


I took it to mean "increasingly bloated over time relative to hardware, phased in a funny, irreverent way." It's a vibe thing, not a definition thing.


The point of the aphorism is specifically to dispel the notion that the straightforward definition of “purpose” is correct here.


More specifically, when a system that you naively expect should have the purpose of doing X is found to actually be doing Y, do not automatically assume that it means the system is failing to fulfill its purpose. Instead, look around and see if there are people who are benefitting from it doing Y instead of X, and who are maintaining the state where the system does Y instead of X. That would mean that the true purpose of the system - what it is being deliberately made to do - is Y instead of X.


I think that's the correct reading. What the system does is its purpose; an equivalence.


Why not just use the correct word? It seems weird to drag in an unrelated term just to redefine it. The word "purpose" divorced from intent seems to only have the utility of confusing the reader/audience.


I am pretty confused about why this conversation is happening, ie why this pithy little saying isn’t self explanatory, but the saying is supposed to be witty commentary.

For example, we make a system of speed limits to make roads safer, and we have a law enforcement system. We notice later that the roads are not safer, but that the police are vigorously enforcing the law and collecting the ticket profits from doing so. We ask: why does this system exist? What is the purpose of it? The naive answer is to make roads safer to drive on. The witty, savvy, cynical answer is: …

Ie the reason the system still exists in the way it does is because its real “purpose” is to be a revenue generating scheme for the police, regardless of the intent of whoever set it up in the first place, if indeed anyone did.


It exists in the way it does for multiple reasons in tension with one another.

If it was just trying to generate revenue for the police, it would be better at it.

Ditto, if it were just trying to make roads safer, or if its main objective was full compliance. (Which are related objectives, but not the same thing).

The reality is that political pressures exist which means neither full compliance nor the engineering interventions to make roads much safer are palatable to US voters, but there are pressures in the other direction which demand something must be done. Which is how we end up where we are.


FYI, this POSIWID concept has been heavily thought about, researched, reasoned, etc. within the cybernetics (or whatever you want to call it) community.

I am not going to do it justice, but the bottom line is that systems get complex very very fast (n! factorial complexity). Cyberniticians (or Stafford Beer at least) reason that we should just treat these systems as black boxes (and examine their inputs / outputs) as any attempt to explain or rationalize the inner working of the system itself (as you are trying to do) will never go well (again because of the complexity).


Think of all the broken systems that are left in place rather than fixed.


What is the “correct” word?


consequence? As in unintended consequences.


...presumably not "purpose"?

> that the straightforward definition of “purpose” is correct here.


Sounds like a witty aphorism would be useful in order to express the real meaning he was trying to get at, seeing as the word you're demanding doesn't seem to exist.


> ...presumably not "purpose"?

That was already very clear. But you clearly don't have any better suggestion.


About 137km diameter, so really big, but albedo (surface brightness, basically) still similar to other comets.


This object is thankfully not coming anywhere close to Earth, but an impact of an object this size with Earth would still not sterilize the biosphere, or even evaporate the oceans.


It'd certainly sterilize the vertebrate part of the biosphere: a significant part of its chemical composition (per the paper) should theoretically be CO and HCN. "Hypervolatiles" is the term the paper uses—primordial evils that can only exist in the coldest outer reaches of the Oort cloud, far away from the star that evaporates them.

I don't know the exact numbers, but for water ice the "frost line" is at about 3 au (between Mars and Jupiter)[0]—the line inside which icy comets and ice moons, like Europa, can't form. Presumably there's analogous zones for the increasingly volatile cryogenic ices, going out into the most distant regions—a solid carbon dioxide line, a carbon monoxide line, a cyanide line... The surface of Pluto, for example, is mostly solid nitrogen, with parts of solid methane and solid carbon monoxide [1].

[0] https://en.wikipedia.org/wiki/Frost_line_(astrophysics)

[1] https://en.wikipedia.org/wiki/Pluto#Geology


I don't think anything beyond the elemental composition of the impactor would matter much since the impact would heat it to a temperature at which it would be in chemical thermodynamic equilibrium, regardless of what its initial molecular composition was.


Nary a username more apt.


The KT impactor has been estimated to have been about 10 km in diameter and moving at 20 km/s.

A long-period comet, like an Oort cloud object, might impact at 50 km/s, instead of the 10-20 km/s of a near-Earth asteroid.

The physics might say that the energy might not be enough to literally vaporize the oceans or "sterilize" the biosphere, but the global ecosystem is fragile. This thing dropping on the planet would absolutely cause a mass extinction.


Oh, I didn't say the results wouldn't be utterly catastrophic. It's more a comment on just how surprisingly large an impact would be needed for sterilization.

https://iopscience.iop.org/article/10.3847/psj/ac66e8

(extrapolated > 700 km impactor needed for sterilization)


I think you should read the text a bit more closely. A 700km impactor would be required to completely boil the oceans into vapor, but the article mentions that a much more insanely huge impactor of between 2000 and 2,700km would be needed to genuinely sterilize the earth because it entirely melts the crust.

However, (and here I speak from reading many other sources on this subject), even something the size of that latter object (basically something the size of a planet like Pluto) might not be enough.

Other studies have indicated that it might be exceptionally hard for heat to transfer enough through the vast mass of the earth's upper mantle and crust to actually melt it uniformly even if hit by something like the object that may have formed the moon.

This impactor was also supposed to be roughly 2,500km across and some of the theoretical concepts around it argue that even in that absolutely cataclysmic scenario, at least a part of the crust remains intact and relatively cool below a depth of several hundred meters.

If such a thing were to be true in the context of modern earth, which teems with life in every single possible remotely habitable nook and cranny and crevasse, then even a colossal impact by a 2,700km planet-type object wouldn't sterilize the Earth of life.

If only part of the crust remained intact as described above, then after hundreds of thousands or a few million years, as the earth's partially molten surface cools, and an atmosphere reforms, water that also reforms from vapor would rain down to the surface again in a vast global storm like something out of the bible. As this happens and the oceans refill, the tiny organisms concealed during all that time inside the deep cracks hundreds of meters below the surface of that surviving part of our world's crust would then recolonize the surface eventually and cause life to flourish again.

The key things in this scenario are that for one, at least one small part of the crust remains intact and cool, at least below a certain depth, and secondly, that water vapor eventually re-condenses into rain.

One might think that water would be vaporized right into separation of its hydrogen and oxygen atoms by the heat of such impacts, but mostly no. For that to happen the water on Earth would need to be subjected to at least something like 3,000 degrees Celsius of sustained heat, and even a planet-sized impact wouldn't generate such temperatures over most of the world.


I wrote "> 700 km". I did that deliberately, and was not asserting that 700 km was enough.


Fair enough but why not just say the much larger other size they specifically mentioned. It's not about it being bigger than 700km but about it being enormously bigger (bearing in mind how volume expands cubed) to a specific size they also name.

Anyhow, sparked me into really thinking about all this again and the link you added was wonderful for that.


I don't think anymore absolutely 100% sterilization of all life on Earth is possible, we always end up talking about 99.999999% or similar. With exception of maybe super/hypernova of our Sun which ain't possible, or black hole passing directly through/very close to Earth, tearing apart every single atom making up this planet including all of us on quark level.


Colision with a planet or moon would do it, anything that turns the surface to lava really.


Even then there's a chance a few tardigrades hibernate on some material that shoots up and then comes back a few years later once the earth has cooled a bit.


I propose we do this intentionally - put a few tardigrades and some other extremophiles in a rad-shielded container inside a fully-passive reentry vehicle and throw it up into a graveyard orbit for a couple million years. Cheap insurance for life on earth!


I think they could be cooked by thermal radiation as the ejecta expands.


Probably most would be, but there are a lot of microorganisms and only a few need to get lucky.


Tardigrades were placed in the "extremophile" class with good reason. If anything could survive a truly catastrophic impact event, I'd say the smart money goes on the lowly "water bear" to win. :)


Tardigrades are not "extremophiles", which refers to organisms that live (grow, reproduce) in "extreme" environments ("phile" = "like, love"). Tardigrades can temporarily survive some rather extreme conditions, but they generally require fairly ordinary environments to actually live. (As suggested by common names like "water bear" and "moss piglet".)


Deep-earth chemoautotrophs might survive that. But ultimately, if the deep subsurface exceeds 150C, it would be hard to survive.


Intollerable stuffyness.


"The layer was deposited when an asteroid between 11 and 15 kilometres in diameter impacted Earth."

https://impacts.to/downloads/lowres/impacts.pdf#page=21

Sources: https://impacts.to/bibliography.pdf (search for K-Pg)


My quick back of envelope calculations...

Imply that the kinetic energy released upon the impact of such an object, show a group sheltering at the ISS (orbit at an altitude of between 370–460 km (200–250 nmi)) or the Tiangong (orbit between 340 and 450 km (210 and 280 mi) ) would not be likely to survive the impact from ejecta thrown into their orbital altitude...


OK I'm curious about this bit. How do you deduce the range of height of the ejecta from a calculation of the kinetic energy of the impactor?


You would start with kinetic energy of the impactor using the Kinetic Energy Formula.

https://www.calculatorsoup.com/calculators/physics/kinetic.p...

Let's go with 1.0E+16 Kg for mass and 25000 m/s for impact speed what gives about KE = 3.125E+24 J

Assume 10% of that goes into ejecta.Then use the formula for Velocity from Kinetic Energy.

https://calculator.academy/kinetic-energy-to-velocity-calcul...

What gives about 8000 m/s of initial speed.

Follow that using Maximum Height Formula from kinematics based on a Gravitational acceleration at g: 9.8 m/s²

https://www.omnicalculator.com/physics/maximum-height-projec...

We are looking at eject reaching orbits of 2500 Km to 3000 Km above Earth. Heat and corresponding vaporization effects excluded for simplification purposes.

Now we wait for an event to validate my calculations....


Taki taki, mi belta kopeng!


If it’s made of the same stuff as comets, there would be some value to blowing it up, since more parts would then evaporate before impact. Right?


"Puny rock couldn't even cook every last bacterium on our planets surface. Pathetic." - You


Maybe there's just no good solution here, but I think the original inspiration for this sort of law was about family homes. It's one thing to inherit stocks and have to sell some of them off, but it's much more complex to try to pass down a property that can't be arbitrarily subdivided. There are various options obviously, but I think enough people had to sell their beloved childhood home because of the tax obligation that came with the inheritance that someone thought there ought to be a law. Maybe your idea plus a carve out for a primary residence could work, but it doesn't seem politically feasible to me.


First of all, the estate/gift tax does not kick in until 13 M$, so that already covers that case.

Second, it is irrelevant. The capital gains tax that would be due on a normal step-up in basis during life is independent of the estate tax.

Assume there was no exemption and you bought stocks 20 years ago for 100 K$ that are now worth 1 M$. If you die, then your estate would need to pay estate taxes on 1 M$.

However, if instead you sold it the day before you died, you would need to pay capital gains on 900 K$. Then you pass away with N $ = (1 M$ - taxes) in cash. Your estate would then additionally need to pay estate tax on N $.

The step-up in basis is the difference between these cases. Your inheritors get your capital gains (step-up in basis) tax-free, but you still need to pay the estate tax.


Family homes rarely exceed $13M but farms and ranches can get up there. Seems like it should be easy to exclude agricultural land, but there's second-order consequences.

If farms and ranches are the best place to hide family wealth, then family wealth will pour into agricultural land. That inflates values and pushes out the actual ranchers and farmers. If farming is just a byproduct of your tax-avoidance strategy then you are unlikely to try too hard at it. We actually need farms, and nobody wants them to become tax-avoidance shells.


Yeah, I was thinking that despite the fact that the ultra wealthy use TFA's loophole, people who don't (i.e. net worth < $300M as the author explains) have a situation where:

A - In a universe with cost basis step-up on death, they die with gains taxed at 0% and then pay 40% estate tax on everything.

B - In a world without cost basis step-up on death, they die with gains taxed at the 20% long term rate and then pay 40% estate tax on what remains.

Thus:

The step-up causes less tax revenue by percentage from the >$300M crowd who use the BBD strategy, but it causes more tax revenue by percentage from the $13M<crowd<$300M who do not use the BBD strategy. The latter pay more tax with option A! 20% on a chunk and 40% on the remaining chunk is less government revenue than just 40% unchunked, especially if the capital gains being realized on death are a majority of the net worth.

I wonder which crowd has more worth-at-death in aggregate (in the absence of BBD and the like -- if estate tax were to be paid by all, no loopholes), given that the less wealthy crowd is a much larger population.


No, that is not how the math works.

N is your cost basis. M is the gain. E is the estate tax. G is the gains tax.

((N + M) * E) is tax on the automatic step-up, option A.

(M * G) + (N + M - (M * G)) * E is the tax on the non-automatic step-up, option B.

Reorganized to ((N + M) * E) + (M * G) * (1 - E), it is clear that option B is strictly more taxes for any estate tax less than 100%.


:slaps_forehead:

Of course, it would be long term (20%) and estate (40% but on slightly less), not one or the other. Mea culpa.


This is just a guess, but I think it might be more about the government not wanting to put valuations on complex assets. Let’s say I own a network of dry cleaners in Los Angeles. It’s a private business with no public business to compare it against. Cash flow is X, but is the business worth 10 million, 20m? How is the government supposed to determine what it’s worth? Now, let’s imagine your business is Koch Industries. We know it’s worth many billions but there’s a VERY broad range of what it might be. Without taking the stock public, its basically impossible even for top investors to value (investment bankers who value businesses for a living get it wrong all the time), let alone the government.

Even public businesses are not trivial to value for very large shareholders who don’t have the ability to easily sell all shares at once without moving the market quite a bit. But in any case, removing this loophole would just encourage the ultra wealthy to put their money into opaque businesses and then try to “value” them as low as possible. So it’s not so easy to fix.


Nah, the original inspiration wasn't about family homes. It was introduced in 1921, 5 years after income taxes became a thing, and was an attempt by Congress to remove a kind of double taxation that could (at that time) happen with estate taxes.

You would pay an estate tax (on the total value of something, regardless of its cost). And then you'd still (when you eventually sold it) owe capital gains tax.

Regardless of whether you think that particular reasoning makes sense, it definitely doesn't make sense if there's no estate tax (which there effectively isn't for most due to the multi-million dollar exclusion) since there's no risk of double taxation.

Step up basis was actually repealed in 1976. But there was immense pushback at the time around record keeping and Congress eventually agreed and retroactively cancelled the new law.

Whether the answer would be different today in this age of computerised record keeping .... ?


Isn‘t this a false dichotomy? Removing the cost basis step-up doesn‘t automatically mean any taxes are due on the inheitance - you could just keep the low cost basis and pay the tax once you actually realize your gains.


Exactly, today people get both: they inherit the assets with a stepped up basis, and also don’t pay tax


Don't you need money to pay the estate tax?


Oh, good point. For that, you could allow people to pay off estate taxes over multiple years, if the tax is higher than the available liquid assets.


Make an exemption for a primary residence. Everything else can go. Stop letting people hoard wealth like dragons.


There is already a 13.something million dollar exception. If the house is worth more than that it should be taxed anyway.


Without a cap, overpriced 8- or 9-figure residences will themselves become the vehicle of wealth transfer, rather than irrevocable trusts.


Make a cap on the value of house. What do people need $100 million stupid ugly houses for anyway. None of these billionaires have good taste anyway.


No. People have a right to their property, including wealth.


We're talking about what happens when someone dies. The estate tax already exists. Is that a violation of the right?


Is it that common for people to hoard dragons?


No, you have to be very wealthy to afford one.


I have twelve.


> It's one thing to inherit stocks and have to sell some of them off

More or less having to do that would be good for society and mildly annoying for the like five dozen existing corporate dynasties on the planet.


I think it was more about family businesses where the family would have to sell the business just to pay the taxes on it. Farms are also this way.


What are you talking about? Removing the step up basis doesn’t force anyone to sell anything. It just means when the asset is sold that capital gains are due—just as they would be if the original owner had sold it while alive—instead of disappearing into thin air.


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