I know the Collisons are brilliant founders and I have long admired Stripe (I've used their Golang API client as inspiration many times in my own code) but it's kind of unfortunate how founder lore really minimizes employees. Stripe has 4,000 people working there, this article mentions only two other employees in passing (the CPO and CFO). Surely many others were brilliant contributors to Stripe's becoming a $95B unicorn, and staying one, beyond just the Collison Brothers. A culture in our industry that made employees feel more ownership would likely help with retention and recruiting.
I think that this is not just a story-telling problem.
It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees.
Why is he getting 100,000 from each employee ? Not because those employees send him a cheque. But because of particular outcomes of share capital, and corporate law. Decisions made in UK / US legal circles since before the USA was a USA.
These decisions have been part of 200 years of the most phenomenal growth in global human wealth ever, so there is a lot of baby in the bathwater. But look at say the German mittelstand - a different approach to local business banking. And compare european social-democracy to US welfare states.
There is a lot of room and flexibility between "totally dampen growth and human innovation" and "more equal sharing of life's burdens".
Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue. So the last 200 years of growth can be seen as a story of government funded and directed scientific achievement, given reign to rollout in a benign business climate, and the workforce provided via mass education and health programs, all of which funded by taxing the successful companies.
Is that an over simplification - hell yes. But so is "young founder has great idea and works hard".
> It is a wealth-sharing problem as well. I don't know much about stripe, but think of Bezos as a pretty good example - to a O(n) rounding he has 100 billion dollars and 1 million employees. Why is he getting 100,000 from each employee?
I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
Fundamentally, tech workers don’t seem to understand this point mainly because they are making more money than “everyone else.”
The other reason is that we as humans don’t understand big numbers. Big ape brains can’t understand the gap between $1 million and $1 billion let alone 100 billion.
If software engineers would have banded together a long time ago to get a larger piece of the pie like professional athletes, then….
That is an absurd exaggeration, unless by "senior engineers" you are including people who do a lot more than "just" engineering, e.g. build companies, build products, etc.
The reason NFL wages are so high is not just that they bring in a lot of money, it's that the players are to a large extent irreplaceable. If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome. So each of them commands a very large salary - because the alternatives are worse, and will lead to worse outcomes, which will lead to less money for the team.
And at the top end, the best players are a massive draw that makes teams tons of money.
Compare that to engineers. We are, to a much larger extent, replaceable. If Amazon can't hire the 1000 "best" engineers, going to the next 1000 will probably not noticeably impact their product. I'm not denying that there are talent differentials between engineers - I think it's even more than the commonly cited 10x. But it's still not that big, definitely not bigger than the difference in NFL players (since engineering is not competitive.)
Note that if you stretch the definition of software engineer to include people building and launching brand new products, building huge successful teams, etc, then you're getting into the realm of CTOs, CEOs, founders, etc, which are far less replaceable (I'm a good engineer, but I couldn't have built Stripe). But then we're talking about the people who are adequately compensated for their work.
> If you take the, say, 500 most talented players in the US at a given time, you can't just replace them with the next 500 most talented players and get the same outcome
I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players. Relative rank is what matters and it's why NCAA March Madness is so popular despite being made up of relatively low ranked players.
> I genuinely believe that a league made of the 500-1000 rank players would be just as (or at least almost as) entertaining as one with the top 500 players.
This is a popular enough theory that it's been tested multiple times. In the successful cases, the rival league still ended up trying to poach the top players and ended up merging with the other top league. In the less successful cases, the league went out of business.
Absolutely. I think it's worth thinking through the difference to software - because it's a competitive field, as you said, the relative rank matters, and therefore getting the best player is important for your team, unless they are for some reason no longer playing. E.g. Michael Jordan was a huge draw when he was playing, and made his team relatively better off (and the league as a whole).
In software, that's not the way it works. Or at least, the competitive business aspect of it is largely out of engineer's hands. Few businesses ultimately succeed because they wrote better code, IMO. Though interestingly, a bunch of startups only get big in the first place by having great code that allows them great speed/flexibility/etc. Stripe itself got big originally because its API was really great, which I'd attribute more to product than to engineers, except in this case it's kind of a merger of the two.
The AFL, WFL, USFL, XFL, AAFL, 2nd XFL and 2nd USFL would likely disagree.
"March Madness" is an anomaly, a single-elimination tournament with 48 games in one weekend with a history of upsets and buzzer-beaters. Additionally, college basketball and football in the US benefit greatly from the local and alumni network affinity for the programs, that doesn't exist with, say, minor league baseball or the NBA D-League.
The AFL was actually relatively successful since it forced a merger with the NFL. Meanwhile, at least according to a 30 for 30 documentary, the original USFL had a potentially viable niche as a second-tier spring league for awhile until they made the bizarre decision to switch to the fall football season and try to force an NFL merger.
I mean that if the NFL didn't exist then the AFL would be popular. A better example would be Japanese Baseball. A lot of those players are great but very few of them ended up transferring to the American leagues, yet the sport is still extremely popular in Japan.
While senior engineers don’t make NFL wages, the executives do (including some former senior engineers). Would it be fair to compare execs to NFL player instead? (While engineers are those work behind the scene to support the game)
You used that employee’s labor in conjunction with a bunch of other things to produce more value than the wages. If the value was in just the work alone and not the work directed at the right things in the right environment, there would be no point in working for Amazon and you could just collect the entire revenue yourself.
This is the main reason it’s completely illogical to expect that an employee receive most of the revenue their labor helped generate.
This is the answer and why the labor theory of value tends to fall flat without due consideration to the labor of managers and the cumulative returns of labor.
If your work earns $100k/y in revenue for a company, that doesn't mean your work created it entirely. The continued dividends of organization of the company, customer acquisition, legal apparatus, support of your entire organization made that revenue possible and are entitled to a share of it too. It took a village to make that revenue, unless it didn't, in which case: quit and do it yourself to keep all that money.
This is a self-correcting system that ensures everyone gets paid approximately what they contributed.
While you're right that you have to account for the entire organization, not just the engineers (obviously), the gap between what the owners earn compared to all other employees combined is still wildly disproportionate.
It's of course hard to precisely quantify these things, but the worsening gap between worker and owner incomes is quite obviously not proportional to any change in how much value owners add to a corporation compared to workers (if anything, workers' contribution has been increasing, not decreasing, as productivity tools and techniques have been advancing).
This same argument also applies to owners. If the org makes $100k in revenue and the owners take $10k of that, why don't you just leave to start your own firm and keep it all?
It's because there ARE contributions from the owner, even a passive owner has what I called "dividends from stored labor": they took on the risk, created a functioning company solving a problem, did the work of organizing the systems/structure that run the thing, and so they are entitled to a piece of the revenue as well (as that revenue couldn't have been earned without their contributions either).
No one says that owners are not entitled to a piece of the revenue, obviously they are, and doubly so when they are also doing their own work for the company.
My point was that owners currently get a disproportionately large piece, and that the gap between what owners get vs what workers get has been widening with time. And not only is it widening, but it is doing so while the relative contributions to the business' success are often narrowing (give the huge increases in worker productivity in most domains).
You're not taking risk premium into account. Owners run the risk of working for several years and getting absolutely nothing in return. Sometimes they put their own money into the company and never get it back.
No, on AVERAGE you get more value out of each employee than you pay in wages, if you turn a profit (let's put aside investing in growth / VC funding for simplicity). That's how you stay in business. That does not mean for each employee you are efficiently paying them based on the value created for the business, some may be underpaid and some grossly overpaid.
By its nature, the employee's wages are more valuable to them than the time and effort they are expending on the job. Otherwise, there would be no point to working.
What's happening here is gains from trade. I have a lot of free time and a set of skills, while my employer has a lot of money and the willingness to shoulder the risk that the work they're asking me to do won't be profitable for them in the long run. Both sides get something out of the deal.
On average that is true, but certainly employees who make minimum wage contribute a higher percentage of their salary than someone who earns 6 digits, to the point that the weapon who earns 6 digits may actually come out ahead depending on how many employees there are
It's about how and why the deal was structured that way.
Amazon is structured so that there is net 100,000 dollars of wealth in the deal betweeen you and him that goes to him (whatever goes to you, he also gets 100k.
I am sure you have no complaints, but why the 100k? why can't that be 50k to him and 50k to you.? Or 33, 33 and 33 extra in tax? or ...
And is the particular arrangement something that is fundamental and inviolable to creating the wealth Amazon did? Or is it just that because it was that way Amazon could beat the alternative universe Amazon ?
what is the phase space of "still generate wealth" and "society looks different"?
Fine, so what's stopping you from starting a business that does exactly the same thing Amazon does, except you make less money and you pay your employees more, and then you go ahead and poach Amazon's entire workforce? If that's actually possible, you should do that, because if you only end up half as rich as Jeff Bezos, you'll still be rich and all of your employees will be better off. What's stopping you?
If Amazon had had a competitor back in the day that had done just that - everything Amazon did, only shared more, then probably we would all be buying from ... err ... Mississippi.com. But this competitor would have had to pull all the right moves - as well as sharing differently.
And one day, yes there will be some innovative new company that will do to Amazon what they have done to Walmart. And maybe that company will have a competitor that will be a co-op and maybe they will have the edge. It has worked ok in the UK for John Lewis. But the lesson from John Lewis is they have to be good at all the basic stuff - and only then do they get to pick staff based on the nicer governance / culture / slight pay gap.
Building a company is hard. Building something like Amazon is freakishly hard. Which is why this "treat employees well" is basically never left up to the market and just tacked on afterwards in regulations.
And finally - yeah would Bezos exactly be hurting if he was half as wealthy. Neither of us think so - which kind of is my point. If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
The phase space available to us is larger than we think.
> Building a company is hard. Building something like Amazon is freakishly hard.
And that's the point.
> If there was some (weird) regulation that meant no-one can become richer than 10 billion dollars, and would need to improve share grants when they go over, guess what, Bezos would still have started Amazon, still done it all, and still have a yacht and a second wife.
I don't want to fixate on Bezos in particular, but there are probably a lot of founders who would be hesitant to start a company if, once that company became valuable enough, they would be forcibly divested from it by law and therefore be at risk of losing control. Even if you're a vision-focused founder who is intrinsically motivated by wanting the company you are founding to exist in the way that you want it to exist, with no regard to your own personal wealth, you're going to be hesitant with that sort of confiscatory regime. And that's setting aside the fact that building a large company is not only "freakishly hard" but also tremendously risky. If you have a wealth cap of 10 billion dollars thinking "10 billion dollars is enough motivation for anyone", sure, but there's a risk premium involved and the expected value is nowhere close to that number.
That's the easy part. Though I doubt investors will ever again allow 90s era Microsoft level of profit sharing
Amazon's secret sauce was cheap capital. Both tax holiday/avoidance and persuading Wall St to forego profits. A combo that's unlikely to be repeated any time soon.
There were hundreds of other e-commerce companies that were started around the same time, all of which had those exact same benefits. Most of them died in the dotcom crash.
I used to work for Amazon. I did not give Jeff Bezos $100,000. In fact, I actually made money out of the deal.
If you were a fairly senior SWE then customers gave Amazon a few million dollars for the work you did. Jeff got $2.8m, you $200k. On paper it's unfair, unreasonable, and unbalanced, but you agreed to it, and without Jeff you would have earned less. Maybe it's fine.
> If you were a fairly senior SWE then customers gave Amazon a few million dollars for the work you did.
This was early in my career, and I didn't work on anything customer facing, but there's still no guarantee of that. What if I'd worked on the Fire Phone?
The reality is that it's just not possible to start these kinds of Unicorn companies anywhere except in the USA. The EU's extreme policies contribute to an overwhelming burden of tax and employment regulations, which results in risk-averseness. So entrepreneurial Europeans go to USA to start their company.
That thesis is hard to square with the fact that it’s not that these unicorns are started in the US, it’s that they are almost all started in one metropolitan area.
The distinguishing factors here aren’t simply European regulations and taxes.
It's a matter of locality sure. But also access. SF and NYC have easy access to startup incubators and venture capital. Do you have a great idea and looking for an angel to give it a chance? You'll probably find it in New York or San Francisco. Pretty unlikely in Munich or Paris.
I realise it's maybe clear from the context of the thread, but it's worth reiterating that this is only true for unicorn-scale. There is plenty of startup capital available for good ideas in both Paris and Munich as well as many other European cities, they are just unlikely to breed unicorns.
I think this is important; I am in a bunch of startup hubs in the eu/uk as technical validator and tech expert and over the last 10 years of doing that, I haven’t heard 1 team that wanted to go for unicorn growth. There is money enough here for a healthy, profit making company; just generally (Revolut as counter example) not for burning a few 100m$ to become a (loss making) unicorn.
There might be a bit of observational bias here (better technical term?). HN is overwhelmingly about the tech industry, but most US companies are started outside of SF/California.
Most are started outside of California, yes, but there are plenty of large scale companies in the EU too. So unless we are limiting the discussion to large scale tech companies of the sort that are predominately in the Bay Area, the discussion just isn’t congruent.
Well that’s basically is my point. The thesis I was responding to was that tech unicorns don’t exist in Europe due to taxes and regulations.
If we are to take the content of your post at face value, that thesis is wrong. It was due to sand hill road being where sand hill road is. That may have something to do with taxes and regulations to a degree, but that isn’t a sufficient explanation.
> taxes and regulations could be a sufficient explanation for why unicorns are birthed in the US.
If that were the case, you would have to see unicorns in Delaware and Texas and many other places in the US, especially since many of these have a much more lax tax regime than California or New York.
The fact that unicorns are almost exclusively bred in two cities in the US actually suggests that the influence of the tax and employment regimes is overwhelmingly dwarfed by other factors.
Transferwise/wise too. I use it to pay employees in Europe. I remember going to Clearwater and seeing their logo on i4 all the time. It is a known company. Revolut also known but still doesn’t work well for US costumers.
It’s kind of like a payday loan type of micro-lending that integrates with merchants similarly to PayPal. I’ve never understood the appeal, it feels super predatory. But most creditors do, I guess. I first heard of it a few years ago when they did a huge ad campaign with a lot of the popular queens from RuPaul’s Drag Race.
I don't know, perhaps they're not predatory in usuary rate sense but I feel like using celebrities like A$AP Rocky and Keke Palmer to appeal to Gen Z to load up on consumer debt feels a bit questionable.
I realize Spotify was started in Europe but they opened an office in the US in 2010. That's 8 years before they went public. And within a year they had a mega office. They were regularly in the NYC real estate news for the next couple of years after as well for adding and outgrowing existing office space. Statista shows the US presence has almost double the Swedish employees.[1]
So that's the full list of successful startups for a developed economy polity with twice the population of America over the past 25 years... Not exactly impressive.
If Amazon’s board decided to reallocate the CEO’s compensation package and grant it to employees, it would increase the entry level salaries of warehouse workers from $18/hour to $18.45/hour.
Not a bad bump, but also historically low by Amazon pay bumps. But it’s also not going to solve income inequality… And very likely there are few people qualified to be CEO of Amazon who’d do the job for $18.45/hour.
The CEO of Amazon has a $212mm compensation package. That’s what I based my estimate off. And I’m sure we can all agree that $212mm is more than “hardly any salary.” I could retire on that amount, have my alma matter name a building after me and still have more money than I know what to do with.
I don't think the board is doing anything wrong, personally. I just don't think Jeff Bezos' income was ever anything close to what Andy Jassy is making, for the exact same reasons that Tim Cook's income is higher than Steve Jobs'.
the issue here is owner compensation, not CEO compensation. that is, wealth accrued by virtue of "owning" a company that other people are merely "employees" adding value to, but not receiving any of that value.
That language is based on the assumption that they're not already being compensated.
Their compensation is what they agreed to accept as payment for their labor. So they're already being compensated. If they want to "own" part of the company outside of this agreement, they need to buy a piece of it. If you want that as part of your employment agreement, negotiate it beforehand, either individually, or as part of a union effort. If you can't negotiate it through those efforts, then accept the fact that the employer believes they can get a better deal on the labor.
>Or you can grab some torches and sharp objects and hold them to his throat and change the terms of the negotiation.
Do all of your employees at From Day One own a portion of the company? Why shouldn't they "hold sharp objects to your throat", as the founder, to get a better deal than what they agreed to? If not, why not?
If they believe they’ve exhausted all other avenues for positive change, and if I personally have subverted and taken over roles best left to a democratic government, then of course they should.
This country, with its institutions, belongs to the people who inhabit it.
If they grow weary of the existing power structure and have not been given the ability to meaningfully participate in the institutions that govern the lives of themselves and their communities, then they most certainly should exercise their revolutionary right to overthrow those institutions.
You're re-contexualizing an Abraham Lincoln quote about the government to justify threatening the life of a private citizen. If you have an issue with the government not doing what you feel is its job, then maybe you should petition the government instead of advocating for some bizarre lynch mob (that, ironically, would be put down swiftly by the very government you should be petitioning). That's how "exhausting all other avenues" actually works.
"This country, with its institutions, belongs to the people who inhabit it."
Pretty sure the owner of the largest pile of wealth ever assembled and the top political newspaper in the country fits well within the framework of this country's institutions.
There's nothing bizarre about a mob coming for the assholes who hoard all the wealth and consign the masses to subsistence level existence. In fact this dynamic is probably the most enduring concept in human history.
I'm expressing a very uncontroversial opinion, which is that the state should have a monopoly on violence, and that the state should be run of, by, and for the people. If the roles that should be assigned to government ever become so corrupted by corporate interests that the institutions that control our life are no longer recognizable as democratic they should be overthrown by force if necessary.
This is the founding principle of America, and I'd be happy to advocate for it in any forum. It sounds like you have an alternate worldview and that's fine too, perhaps we can agree to disagree on this point.
Maybe our goal as a society shouldn’t be to decide who gets rich, but rather to do what it takes to ensure fair distribution of resources such that everyone’s basic needs for food, housing, healthcare, and education are met.
That’s difficult to do when wealth is concentrated among a very small group of people.
No, not really. Pointing out the injustice of a company mistreating and burning out its workers in order to produce one of the richest billionaires, usefully illustrates the inequality we face globally.
Some employees negotiate contracts where they are paid partially or fully in stock. Other employees negotiate contracts where they are paid all in cash. A lot of people don't want to wait for a payout or take on risk.
To be fair - many people in the billionaire class don’t sell any of their shares. The reason being that they can open pledged asset lines using those stocks - and never have to pay taxes as long as they never get called on their lines.
Not to mention the financial fallout of not having an experienced leader at the helm. Sure, it would coast for awhile without a leader, and I'm sure someone will try to explain to me how it could be run completely democratically, but eventually a competitor with a competent leader would eat their lunch.
I know one or two democratic countries that are doing OK despite being democratic.
Democracy doesn't have to be leaderless: we have a good few hundred years of experience in running entities many times more complex than a company using democratic processes, appointing leaders by vote etc.
There are many more governments than companies providing essential goods and services. And in times of crisis (say, flooding or fires), it's the military and other government entities that have to step in to fix things, never private companies.
This is technically true, but of course there are many other methods of increasing warehouse worker pay beyond reallocating the CEO's compensation package. The pie is not zero sum. For example, stock splits often result in market cap increases due to more liquidity / access. Amazon could issue some (or more?) stock options to its employees in the warehouse or elsewhere if they desired to do so, and it's not a foregone conclusion it would adversely affect their ability to retain a top tier CEO. Who knows, perhaps Amazon would see better worker retention resulting in increased efficiency if they had a more generous package for warehouse workers (not making this claim, but I disagree with the zero sum framing here).
> Oh and lest we forget, it is in the main scientific advances that have bought us the last 200 years, not founders or entrepreneurs, and those advances were funded almost fully by government out of ... tax revenue.
This doesn't ring true to me... the industrial revolution came from the steam engine. And so many later advancements like the light bulb, generators, cars, planes, mass manufacture of fertilizer didn't have much governmemt involvement.
I don't really follow your examples, but I think there's a part of startup comp structures that's worth calling out in general. Equity distribution ratios are way different than salary ones.
Your boss in a mature company may make 20% more than you, give or take. Your boss in a early stage startup may have 10x (or more!) more equity than you. Even if they don't have 10x to lose.
Yes I think that is more or less what I am talking about.
In a democracy the tendency is towards fairer equitable distribution of wealth (why FDR was called a traitor to his class, why Jim Crow laws exist etc).
It is one factor in why companies are not democracies- but I think (hope?) we may see much experimentation in democratic decision making to try and make it as speedy as hierarchical companies
(hmm - there is likely to be a speed / stability / waste trade off here?)
> It is one factor in why companies are not democracies
societal democracy works because everybody is born into a society equally.
A company democracy doesn't work because not everyone is "born" into the company - the founders are more born, since they put up initial capital. If the employees also put up capital, they will get an apportioned vote.
So a company _is_ a democracy, but the votes aren't tied to lives like in society, but tied to capital. Each dollar buys you a vote.
This values capital over labor to a far too large extent. The value of a (successful) company is overwhelmingly dominated by labor - including the labor of the founders and CEOs, to be clear - not by original capital investments. But, ownership is only afforded to those who contribute capital, and ~0% to those contributing labor (this does vary between companies, as some do offer equity as part of the labor contract, but typically only to certain employees; its very unlikely the cleaning person will be offered any equity, for example).
> The value of a (successful) company is overwhelmingly dominated by labor
but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.
If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer. It is this property of equity which makes capital more powerful.
you could artificially raise the power of labour by fiat law. But this law would distort the capital being spent - you might even find capital flight, if the law is very skewed towards labour.
> but those labour only decided to contribute their labour because they are guaranteed a wage - which is capital being spent.
That's only capital being spent if the company is not profitable. Otherwise, it's just reinvesting revenue back into the business. And a company that is going bankrupt may well become unable to pay employees' promised wages, which does happen occasionally.
> If you put up a job offer, where your wage is tied to the profitability of the business (aka, if you worked but the business didn't make any revenue or profit, you don't get paid), then you'd find that there aren't many who would take this offer.
While there are definitely people who are not happy with this kind of arrangement, it's not entirely unheard of either. Early stage start-ups often hire people on equity instead of wages; and co-ops where all (or most) workers are owners and only get paid if the business is successful also exist.
Here's the thing. The average person only cares about their economic growth up to a point. Study after study has concluded that once most people have "enough" money, adding more does not bring them any more happiness (with the rare exception of a increase being so substantial that it radically improves their social status -- let's say by at least an order of magnitude).
And studies have shown that people become unhappy when confronted with people who have significantly more than them - simply put, envy.
Therefore, one can easily argue that if economic growth is coupled to ever-increasing inequality, it actually begins to reduce overall human happiness after a point -- and if you "read the room" around the world, I'm pretty sure humanity has passed that point.
Just take a look at how society is structured today, where a 1% difference in achievement at some arbitrarily determined age can lead to a difference in expected lifetime income that is orders of magnitude larger. And that's not to mention the kind of personal wealth that, due to the properties of exponential growth, cannot help but grow, regardless of the competence of its owner.
Die-hard capitalists argue that this is the best economic system that we've ever had, but our sample size is very limited. We've only been trying this out for a minute fraction of humanity's existence, and the effects of this system have not reached a steady state. If the past few decades are any indication, capitalism has made the world worse off in many ways. It enabled our ancestors to leave us with many major unsolved problems, with blissful ignorance - issues that are given token acknowledgement in economics classes as "externalities," a term that doesn't even begin capture how important they really are for humanity's future.
I posit that overall human happiness plotted against economic inequality is maximized somewhere in between strictly enforced equality and the extreme levels of inequality that we see today. It doesn't take a genius to see it, but no one really talks about the middle. Perhaps sanity is too boring for this generation.
>to a O(n) rounding he has 100 billion dollars and 1 million employees.
Assuming those numbers are correct, I believe he got that 100 billion over time and over time he has had much more than 1 million employees, although probably the most amount of employees he has had at any one time was 1 million.
- Stop giving discounted tax rates for capital gains, make people pay the full income tax rate for any kind of income
- Abolish step-up basis, which allows dynasties to build tax-free wealth via "invest, borrow, die"-type strategies. Also other tax avoidance strategies used by the rich e.g. 503cs.
- Stop giving corporations special treatment under anti-trust law compared to other ways of organising. Give unions, workers' co-operatives, and other such organisations, the same rights to act in an organised way that corporations have. (And, conversely, start paying attention to corporate monopolies rather than using the narrow "consumer harm" standard that's been followed in recent years)
Why is the solution to "uneven tax structure" always to raise taxes? can we just lower income tax to same as capital taxes instead? Thats real money in your pocket.
Because most of the time when there's an "uneven tax structure" it's because one special interest group got themselves a tax break. Specific penalty taxes are quite rare.
Unlike wages, capital gains can be negative. And generally IRS doesn't compensate for losses, except for minuscule amount. Otherwise imagine Treasury having to refund trillions to Bitcoin bag holders. So lower rate reflects higher risk.
The capital being invested has already been taxed at the source.
Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business. I’m the one taking the risk yet the government benefits if that risk pays off but doesn’t compensate me if it doesn’t.
> The capital being invested has already been taxed at the source.
So? A worker has already paid all kinds of taxes in their life, but they still get taxed on their income.
> Capital gains shouldn’t even be taxed. I earned it, paid taxes on it; what I do with it beyond that is no one’s business.
Your original capital is yours, but if you get income from it, you should be taxed the same as any other income. My time is and should be my own to do with as I see fit, but I still get taxed if I get income from it.
> Your original capital is yours, but if you get income from it, you should be taxed the same as any other income.
capital is what makes future productivity improvements possible. If you took a risk investing your capital, but that return is taxed the same as wage income (which has zero risk associated with it), you would be discouraged from investing that capital, and instead consume more of it (ala, why invest in your business buying plant and equipment, when you could just go on a lavish vacation!).
The low capital tax is to encourage more capital investment, because those with capital has the choice to not invest (and thus society as a whole loses the potential benefits of such investment). People with wage income don't tend to have the option of _not _ working, so lowering their tax won't encourage _more_ wage income.
> capital is what makes future productivity improvements possible. If you took a risk investing your capital, but that return is taxed the same as wage income (which has zero risk associated with it), you would be discouraged from investing that capital, and instead consume more of it (ala, why invest in your business buying plant and equipment, when you could just go on a lavish vacation!).
The fairy tale that no one would invest if, instead of 100%, they were only allowed to keep, say, 50% of the profits is far-fetched. The game would go on, only with more (in the optimal case) redistribution and less accumulation among the already well-off. The issue here is the relative inequality caused by capital gains, which in the long run tears societies apart, because the middle class can no longer afford apartments/houses and vacations, and the lower class can no longer afford basic needs (food, health care, mobility).
Think the point they are making is the repeated taxation is semi-ridiculous.
1. Work a job and pay income tax
2. Invest remaining income, capital gains are taxes when liquidated.
3. Buy a car with the remaining gains, pay sales and property tax
4. Sell car, pay sales tax again
5. Reinvest money, earn gains, pay taxes on them
6. Repeat
The same money just keeps getting taxes. His point is that the money should be taxed once and only once.
A lower rate for the same amount of income in capital gains compared to salary makes sense. But why is the top rate for capital gains only 20% when it's 38% for income? (plus whatever the state adds on top). Why aren't there more brackets that go higher for capital gains as well?
> A lower rate for the same amount of income in capital gains compared to salary makes sense.
Why? This argument is often given as an axiom without any reasoning behind it.
There is often handwaving about "risk", but a worker has risks due to not being able to supply the labor that they are selling. They invested in their labor through paying for education and training.
Why is their "risk" not considered the same as capital "risk"?
> Why is their "risk" not considered the same as capital "risk"?
a worker gets paid when they worked - there's no capital risk. They took a risk when they invest in skills for the job, but that risk isn't capital risk. If you are saying that their job should compensate for the initial risk they took getting educated, then i would say this risk pay-off is embedded in the salary of the job they took.
> but a worker has risks due to not being able to supply the labor that they are selling.
Modern worker agreements (a.k.a most normal jobs) do not have downside risk if you can’t deliver. You just lose your job and stop gaining money. With capital investments you can easily undo 5 years of gains in 1 bad year.
The controversial answer might be that the wealthier brackets are more likely to be holders of financial investments, and the tax code seems to clearly benefit wealthier groups because the tax code is influenced BY the wealthier class through lobbying and the sorts.
If I had no context of the situation, I would see the lower % as a way to incentivize people to invest their money in things that would fall under capital gains.
The stock market grows by an average of something like 10% per year. Mutual funds charge a couple percent fees but usually still make a profit. If you are losing money long term as an investor then you’re a bad one
> Surely many others were brilliant contributors to Stripe's becoming a $95B unicorn, and staying one, beyond just the Collison Brothers.
From my experience working at several saas unicorns, in each companies there was 2-3 max people who where responsible for the success of the company. It is not that all others were useless but they all could have been replaced easily without having any impact in the success of the company.
I know this is difficult to hear as an employee but this is the truth. 99% of us are replaceable.
In my opinion and experience, working with skilled and nice people VS working with stupid and coward people for example has only an impact on the happiness of the employees but has no link with company performance. (company culture has no impact on company performance)
It's not difficult to hear, it's just not true. I don't know what sort of companies you've worked at where employees are completely fungible, but I've had the opposite experience, working with many talented and hard working people who make major contributions that help deliver hundreds of millions in revenue. Perhaps you joined them when they were already unicorns and the playbook / moat was already developed, but at startups there's nothing BUT the people. You think the Collisons are writing all the code and conceptualizing all the new products and figuring out how to take them to market, or creating and maintaining a high performing engineering culture, or [50,000 other things that need to happen to reach $95B]?
If that were true, it would be weird that companies work so hard to acquire, retain, and develop talent.
You can be very talented and do a ton of work without having a bigger business impact than another person doing 50% less than you.
At the end whether you have a design system, if you have infinite scalability, if you use node or Ruby, having that feature or that other feature it doesn't matter. The only thing that matter is the revenue the company make.
If what matters was the people then ngo would be unicorns
The OP claimed only 2-3 people in each company are "responsible" for the success of said company. You do not need to be the only person in the world who can do a job to have some, or even major, responsibility for the success of an organization.
I think you may be misinterpreting what OP meant (or perhaps I am, that's a real possibility). I read that as "There are only 2-3 specific people whose skills and contributions were so essential to the orgs success that the org would have failed without them specifically." Where you might have a front end developer who is technically "responsible" for facilitating millions of online transaction, there are likely thousands of other devs who could have done the same work. Among the 2-3 OP was referencing, there are very few who could have done what they did.
The case I was making is, it takes many people to turn a startup into a unicorn, and many of them are integral and make massively important contributions that, without them, would not have occurred. The degree to which those people are replaceable is difficult to say precisely, as it varies per person and per company, but I don't think being irreplaceable is the bar for being considered responsible. If a fireman pulls a kid out of a burning building, we don't care that many other fireman could have also done the same thing. The individual who did the critical work is responsible.
I have been at unicorn companies with C-suite executives that are clearly useless, or worse, net detractors playing political games that the people under them have to work around to get shit done. I have been at companies where one engineer is single-handedly keeping parts of the lights on, or conceptualizing and architecting critical systems, having an outsized impact well beyond their title and compensation. There seems to be a false idea here that the way companies run is "top down" - ie. the Collison brothers set out all the goals and strategies and products, and then the employees just execute their vision like pawns. Maybe there are companies like that, but I've never seen one, particularly a fast growing one.
I guess I just disagree that the number of people who would be deemed "responsible" for Stripe's success is 2-3. That seems, frankly, unbelievable to me having worked in companies with hundreds or thousands of employees and seeing how many different people it takes to build something massive, innovative, with multiple product or business lines. Not just taking marching orders but exercising their creativity, judgement, expertise, leadership skills etc.
>it's kind of unfortunate how founder lore really minimizes employees
It's far easier to tell the story of a handful of people than of thousands. The only successful approach to the latter is selecting some at random and telling their stories - but that still leaves most people out. I think it's an interesting and hard problem to tell a comprehensive story about a large group, but I'm not really sure if it can be done. Even Howard Zinn focused on (usually unsuccessful) opposition leaders more than the everyman in his narrative! In any event, I'd love to see someone succeed at making such a narrative, not necessarily about Stripe, but about anything really.
For sure. I understand why stories are told the way they are. I stand by my point though. And I do think there's a happy medium between Ayn Rand'ian style hero entrepreneur and telling the story of thousands that can be achieved with modest effort, since I've read a few of them.
Admittedly the absurdity of the headline is what triggered the initial thought for me, but the article lived up to the headline in this case.
“Founder Lore” like this, especially from Forbes, assumes an audience of investors who have money and non-investors who have essentially no power. These articles are purely about marketing and looking for lift among those who have money. The list of names who were involved in creating the article are a lot more important than the content.
Being able to hire brilliant people is a difficult skill too. I don't suspect Adyen have the same ability to hire great people that Stripe do and while they have a lot of complex problems a payments API is not the most glamorous of companies to work for.
> I've used their Golang API client as inspiration many times in my own code
For the last five years, I’ve requested an Elixir client.
I wish they would either build one or greatly improve the docs for people who aren’t using one of their first party API client libraries. It’s not like Stripe lacks the resources.
In fact an argument could be made that ignoring all but the most popular handful of languages runs counter to their goal of increasing the GDP of the internet. Increased friction for adopting new and productive languages means fewer do and devs remain in a slightly more ossified ecosystem.
Completely agree, I also had this problem but I guess that is one downsides of using a language that isn't particularly mainstream. Still with thousands of programmers it would be worth the return on the small investment.
They have libraries for: iOS, Android, React Native, Javascript, Ruby, Python, Go, PHP, Java, .NET. Have you seen how prevalent Elixir is statistically? It's actually pretty niche and downtrending[0]. Where do you draw the line? Where's the Nix, Julia, Nim, Rust, and Crystal libraries? It's good to express the desire for it so that it might be next in line, but these comments make it seem like it's an expectation, even when those libraries are all open source and are able to be whipped up by the community. You're correct that these are the downsides in building on something that isn't very mainstream.
I don't think it's down trending at all. Just look at the most recent Hiring thread on this forum!
Based on what I've been seeing, Elixir has been growing faster the past year or two than it was previously. Elixir Forum's posts and active users are going up and that's where people tend to ask their questions, rather than Stack Overflow. In fact, the lack of support from companies like Stripe is the single top complaint I hear. Most users are very happy with the language, tooling and community.
FWIW, I'd like to see a Stripe Rust lib, also. But it's far more important to just be make the guides better for people who aren't using a Stripe API client and maybe even make a guide for making a compliant API client. That way, you can be programming in something truly niche like Janet and still have a great experience with Stripe.
The information is all there, but it takes way more digging than it should to get at it.
I wonder if there is a format for API -> client automation that can be good enough, in the end Stripe have a rest API, with enough description it should be possible.
Okay so after a quick google it appears Microsoft are the "Simpsons already done it" of the programming world: https://github.com/Azure/autorest/
It'd probably be a good idea to add an Elixir backend for that and point it at the Stripe's API here: https://github.com/stripe/openapi
Interesting... I've spent a fair amount of time looking at Stripe docs while working on various projects over the years and never seen the openapi link before!
Purely in terms of seeing what structs are used in what what on what endpoints, the docs are fine. It's really when it comes to guides that it falls over since they invariably lean on language-specific API clients. This makes it easy to miss how headers are constructed, the required security-related details for webhooks, etc.
Whether ROI is positive or negative is not the correct thing to consider. Opportunity Cost is more important. Why would they create an Elixir client if there is something else they could do which has higher positive impact?
>but it's kind of unfortunate how founder lore really minimizes employees
Yes it is, And none more pronounced than those involving celebrity founders like Elon Musk; The achievements of SpaceX and Tesla are often showcased like 'his' alone in media like Iron Man waving his hand and Jarvis building the products.
One thing these founders are proven to be good at is getting very talented people to work for them and perhaps lately taking credit for all their efforts.
P.S. Not implying that Collison Bros are like that, I don't know enough about them and I like Stripe as a product.
