Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals(theguardian.com)
theguardian.com
Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals
https://www.theguardian.com/us-news/2022/apr/13/wealthiest-americans-tax-income-propublica-investigation
53 comments
If your endpoint for inequality is “X% of people have Y% of wealth” and you also want to talk about income, then the income you talk about had better be “change in wealth.” Otherwise we get all kinds of intellectually dishonest equivocation about how to deal with the problem of billionaires, we need to tax the shit out of doctors and engineers. The incomes behind our staggering wealth inequality aren’t wage incomes!
If on the other hand you think unrealized gains aren’t important, then you should be thinking of inequality in terms of something else, like consumption. But consumption inequality is both much smaller absolutely and much slower growing than wealth inequality; it doesn’t make a good political rallying point.
If on the other hand you think unrealized gains aren’t important, then you should be thinking of inequality in terms of something else, like consumption. But consumption inequality is both much smaller absolutely and much slower growing than wealth inequality; it doesn’t make a good political rallying point.
So, what do you propose to make them pay their fair share?
Sibling comments hit the nail on the head with "fair share".
Here's a video from 2013, that outlines exactly how much tax Warren Buffet is paying. You can disagree with Schiff on his other ideas, but this particular analysis is spot on.
https://www.youtube.com/watch?v=tyv9uOozi7g
Here's a video from 2013, that outlines exactly how much tax Warren Buffet is paying. You can disagree with Schiff on his other ideas, but this particular analysis is spot on.
https://www.youtube.com/watch?v=tyv9uOozi7g
What is their fair share?
Whatever amount (or rate) required to restore the USA's 1970s era gini coefficient of ~36.
Their fair share of what? Income that they haven't actually received?
I think it's reasonably fair to point out that, sure, while these people don't have the extra wealth as income, they did indeed grow wealthier, and significantly so. And generally we tax when things make money.
A couple points about common rebuttals:
"It's not liquid so it's hard for them to pay taxes on it" - we already tax illiquid things like property taxes and when people get income that's not cash, like having debt forgiven or being given a gift of stocks. And people who have debt forgiven or are given stocks as income frequently aren't as likely to have cash to simply pay the taxes when compared to these extremely wealthy owners of capital.
"it might go back down and then they paid taxes on something they couldn't realize" - this applies to property taxes too, fwiw. But also, we deal with similar issues already - if you sell a stock at a loss, you can use it to reduce your taxable income. There's workarounds here if we are at all willing to attempt to tackle this.
And it's worth noting that, sure, this might be taxed when they do eventually sell, but:
1. there is not always a when. You can do lots of interesting things with assets like this, such as borrow against them.
2. money now is worth more than money later. Letting people defer paying taxes on unrealized capital gains is VERY generous tax treatment.
It's also worth noting that this doesn't have to make life hard for John Smith, Dirt Farmer, who owns $5000 of SPY. Just do what we do for other common scenarios like this - for instance, not having to pay capital gains tax on your first $X of cap gains for your primary residence.
A couple points about common rebuttals:
"It's not liquid so it's hard for them to pay taxes on it" - we already tax illiquid things like property taxes and when people get income that's not cash, like having debt forgiven or being given a gift of stocks. And people who have debt forgiven or are given stocks as income frequently aren't as likely to have cash to simply pay the taxes when compared to these extremely wealthy owners of capital.
"it might go back down and then they paid taxes on something they couldn't realize" - this applies to property taxes too, fwiw. But also, we deal with similar issues already - if you sell a stock at a loss, you can use it to reduce your taxable income. There's workarounds here if we are at all willing to attempt to tackle this.
And it's worth noting that, sure, this might be taxed when they do eventually sell, but:
1. there is not always a when. You can do lots of interesting things with assets like this, such as borrow against them.
2. money now is worth more than money later. Letting people defer paying taxes on unrealized capital gains is VERY generous tax treatment.
It's also worth noting that this doesn't have to make life hard for John Smith, Dirt Farmer, who owns $5000 of SPY. Just do what we do for other common scenarios like this - for instance, not having to pay capital gains tax on your first $X of cap gains for your primary residence.
What this does to John Smith, Dirt Farmer, is that his land went up $500/acre, and he's got 1000 acres, and now he's got an "income" of $500,000 this year, which he can't actually get until he sells the land, which he doesn't want to do until he retires. So the options are:
- He sells some of the land to pay the taxes.
- He takes out a loan to pay the taxes.
- We make a special carve-out for people in that situation so that the tax doesn't apply to them.
The third solution seems kind of fake to me. "We don't like the results of this set of rules, so we're going to make exceptions for all the results that we don't like." Maybe it's telling us that the rules aren't all that great?
> money now is worth more than money later. Letting people defer paying taxes on unrealized capital gains is VERY generous tax treatment.
They don't have the money yet. Charging them tax on money they haven't even received yet seems like very ungenerous tax treatment - abusive, even. It only makes sense if you have already defined unrealized capital gains to be income - but that's begging the question.
- He sells some of the land to pay the taxes.
- He takes out a loan to pay the taxes.
- We make a special carve-out for people in that situation so that the tax doesn't apply to them.
The third solution seems kind of fake to me. "We don't like the results of this set of rules, so we're going to make exceptions for all the results that we don't like." Maybe it's telling us that the rules aren't all that great?
> money now is worth more than money later. Letting people defer paying taxes on unrealized capital gains is VERY generous tax treatment.
They don't have the money yet. Charging them tax on money they haven't even received yet seems like very ungenerous tax treatment - abusive, even. It only makes sense if you have already defined unrealized capital gains to be income - but that's begging the question.
> - We make a special carve-out for people in that situation so that the tax doesn't apply to them.
Tax law does that all the time. Maybe you've heard of tax brackets. It's so that people who earn less pay a smaller tax rate. I don't see the trouble with that. It's applied in the other direction as well, e.g. with a maximum dollar value with medicare.
Tax law does that all the time. Maybe you've heard of tax brackets. It's so that people who earn less pay a smaller tax rate. I don't see the trouble with that. It's applied in the other direction as well, e.g. with a maximum dollar value with medicare.
Zero chance a wealth tax goes into effect in America without excluding farmland. That or the Electoral College does.
Oh, I'm not talking legislative probability. I was responding to the comment that it's somehow an unfathomable thought to have different 'carve outs' for different people in tax law (or anywhere, really) when that is standard practice in reality already.
big fan of this idea. I would be more sympathetic to not tax increase of stock values if it was not the largest driver of increased wealth. W-2 for the ultra wealthy is such a small chunk of their net worth's. houses and stock portfolio's are both assets, why is one taxed and the other not
I assume those to propose to tax unrealized gains are also going to allow deductions or refunds for unrealized losses, too. Right?
The top 1% of earners make 20% of the income but pay 40% of federal income taxes. Can you tell me why that's not fair?
The issue isn't with the top 1%. It's the top 0.01%, which make a big chunk of that 20% and pay almost nothing in tax.
This is irresponsible reporting at best, and manipulation at worst.
Later, the article makes this statement:
> Billionaires in tech pay the lowest tax rate, an average of 17% of their income
That seems to be > 3.4%
> Billionaires in tech pay the lowest tax rate, an average of 17% of their income
That seems to be > 3.4%
Reading the article, it says that the figures are looking at actual income, not changes in asset prices. It says the low figures come from a) lower tax rates from realized capital gain and b) deductions through charitable donations.
Capital gains in the US are taxed at a maximum rate of 20%[0] for long term holdings, vs income tax rates, which can go up to 37%.
Donations are also something that anyone can use to lower their own taxes, it's line 40 of the 1040 form.
So one can easily change the title to claim that the super wealthy donate more, but I suspect that's not as much of an eye-grabber of a headline.
There may be something to be said about donating to your own non-profits, but that's not what this article is about.
[0] https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...
Capital gains in the US are taxed at a maximum rate of 20%[0] for long term holdings, vs income tax rates, which can go up to 37%.
Donations are also something that anyone can use to lower their own taxes, it's line 40 of the 1040 form.
So one can easily change the title to claim that the super wealthy donate more, but I suspect that's not as much of an eye-grabber of a headline.
There may be something to be said about donating to your own non-profits, but that's not what this article is about.
[0] https://www.nerdwallet.com/article/taxes/capital-gains-tax-r...
> Reading the article, it says that the figures are looking at actual income, not changes in asset prices.
They used actual income... but not for the 3.4% figure that's in the headline. When using actual income (i.e. personal income and cap gains) to calculate tax rate, they ProPublica article said:
> Collectively, the top 400 paid an average tax rate of 22% from 2013 to 2018.
So... where did they get the 3.4% figure that's in the headline? By including unrealized cap gains:
> Then they pay very little in tax when it’s measured against their growing wealth. The top 25 wealthiest Americans got $401 billion richer from 2014 to 2018, but paid just $13.6 billion in federal income taxes, a “true tax rate,” as we called it, of 3.4%.
What's a "true tax rate?", you ask?
> To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period. We’re going to call this their true tax rate.
In other words, ProPublica invented the term 'true tax rate' to represent a fake tax rate that treats unrealized cap gains as income. The Guardian then wrote a headline that conflates the fake tax rate with the real tax rate.
Whenever you find yourself believing something that's not true, be sure to take a hard look at the source who mislead you. You'll find that it was rarely by mistake.
They used actual income... but not for the 3.4% figure that's in the headline. When using actual income (i.e. personal income and cap gains) to calculate tax rate, they ProPublica article said:
> Collectively, the top 400 paid an average tax rate of 22% from 2013 to 2018.
So... where did they get the 3.4% figure that's in the headline? By including unrealized cap gains:
> Then they pay very little in tax when it’s measured against their growing wealth. The top 25 wealthiest Americans got $401 billion richer from 2014 to 2018, but paid just $13.6 billion in federal income taxes, a “true tax rate,” as we called it, of 3.4%.
What's a "true tax rate?", you ask?
> To capture the financial reality of the richest Americans, ProPublica undertook an analysis that has never been done before. We compared how much in taxes the 25 richest Americans paid each year to how much Forbes estimated their wealth grew in that same time period. We’re going to call this their true tax rate.
In other words, ProPublica invented the term 'true tax rate' to represent a fake tax rate that treats unrealized cap gains as income. The Guardian then wrote a headline that conflates the fake tax rate with the real tax rate.
Whenever you find yourself believing something that's not true, be sure to take a hard look at the source who mislead you. You'll find that it was rarely by mistake.
Interesting. I hadn't read the Propublica article (frankly the parallax BS was annoying as hell) and I was going by the 4.1% figure for Michael Bloomberg in the linked article, which for all intents and purposes is close enough of a tax rate.
But yeah "We’re going to call this their true tax rate" is amateur hour. Who even allowed this crap to be published?
But yeah "We’re going to call this their true tax rate" is amateur hour. Who even allowed this crap to be published?
Putting aside the way these figures are calculated (addressed in sibling comments), I'm always surprised at the lack of interrogation of the charitable contribution deduction in these conversations. The way that the tax code is currently structured, everyone who doesn't itemize their deductions effectively subsidizes the charitable preferences of the ultra-wealthy. If we wanted to promote charitable giving in a more equitable manner, why not simply eliminate the charitable deduction entirely and then use all the extra revenue to give each individual a "charity voucher" which they could donate to a charitable organization of their choosing?
"Donations are also something that anyone can use to lower their own taxes"
This is false. It used to be less false, but now is mostly false.
In order to get any tax advantage from donations, you must itemize as all hyper rich do. Full stop. If you take the standard deduction as almost everyone else does (more than 90 %) then you get nothing for your charitable giving.
Note that when the hyper rich do give and get credit it is very often not to organizations that are very "charitable" at all. If you don't believe this to be true simply look up what a how "private foundations" and particularly "donor advised funds" work.
This is false. It used to be less false, but now is mostly false.
In order to get any tax advantage from donations, you must itemize as all hyper rich do. Full stop. If you take the standard deduction as almost everyone else does (more than 90 %) then you get nothing for your charitable giving.
Note that when the hyper rich do give and get credit it is very often not to organizations that are very "charitable" at all. If you don't believe this to be true simply look up what a how "private foundations" and particularly "donor advised funds" work.
You're entitled to a deduction of up to $300 (or $600 if married and filing jointly) for charitable donations even if you take the standard deduction.
I believe the comment is referring to the part of the report which explains the 3.4% figure is based on taxes paid relative to net worth growth. Specifically, it says :
“As we showed last year, the richest avoid income when they can. Then they pay very little in tax when it’s measured against their growing wealth. The top 25 wealthiest Americans got $401 billion richer from 2014 to 2018, but paid just $13.6 billion in federal income taxes, a “true tax rate,” as we called it, of 3.4%.”
“As we showed last year, the richest avoid income when they can. Then they pay very little in tax when it’s measured against their growing wealth. The top 25 wealthiest Americans got $401 billion richer from 2014 to 2018, but paid just $13.6 billion in federal income taxes, a “true tax rate,” as we called it, of 3.4%.”
Can someone explain the charitable donations deduction thing? I get the art appraisal example of getting it appraised more than its worth and getting a deduction for it. But assuming a person isn't doing that, how are charitable deductions even worth noting? Should you have to pay taxes for donating to charity? Am I missing some way of making money off donating?
This is what the article says
"Collectively, the top 400 paid an average tax rate of 22% from 2013 to 2018."
"The top 25 wealthiest Americans got $401 billion richer from 2014 to 2018, but paid just $13.6 billion in federal income taxes, a “true tax rate,” as we called it, of 3.4%"
"Collectively, the top 400 paid an average tax rate of 22% from 2013 to 2018."
"The top 25 wealthiest Americans got $401 billion richer from 2014 to 2018, but paid just $13.6 billion in federal income taxes, a “true tax rate,” as we called it, of 3.4%"
There is also tax loss harvesting, paying yourself via loans against assets, and using LLCs to purchase items like houses etc. to avoid taxation.
It doesn't surprise me that billionaires pay substantially lower rates than long-term capital gains would imply they should.
It doesn't surprise me that billionaires pay substantially lower rates than long-term capital gains would imply they should.
Disregarding the misleading headline, it is overall a tough problem to define if and how to tax wealth. Most people would agree that applying a blanket tax on unrealized gains is problematic (since it would force you to sell to pay for gains), but at the same time most people also agree that having $100B in TSLA/AMZN stocks and borrowing against those assets while paying less taxes than people in the $5M income bracket is also an issue.
This is fun HN bait because we discuss it every few weeks yet I haven't seen any real solution.
This is fun HN bait because we discuss it every few weeks yet I haven't seen any real solution.
The solution is marginal sales taxes.
It would require tracking everyone’s expenses on a federal, or even global level. But then you can really redistribute wealth based on how “richly” someone is living. And also tax them proportionate to their consumption, which kills two birds with one stone. And you don’t have to worry about borrowing against assets to sidestep income taxes.
First $50k you spend is at x% sales tax, next $50k is at x+y%, and so on.
It would require tracking everyone’s expenses on a federal, or even global level. But then you can really redistribute wealth based on how “richly” someone is living. And also tax them proportionate to their consumption, which kills two birds with one stone. And you don’t have to worry about borrowing against assets to sidestep income taxes.
First $50k you spend is at x% sales tax, next $50k is at x+y%, and so on.
One thing to note is that the wealthy will never pay any capital gains tax on their stock holdings.
While they are alive, they simply take out low interest loans against their stocks.
When they die, they pass on their stocks to their children taking advantage of the step up in basis: (https://www.investopedia.com/terms/s/stepupinbasis.asp)
So now their kids possess a ridiculous amount of stocks and will never need to pay any capital gains on them.
So yes, rich people who make a lot of money in unrealized capital gains are vastly underpaying taxes on their income. We should close the step up in basis tax loophole.
While they are alive, they simply take out low interest loans against their stocks.
When they die, they pass on their stocks to their children taking advantage of the step up in basis: (https://www.investopedia.com/terms/s/stepupinbasis.asp)
So now their kids possess a ridiculous amount of stocks and will never need to pay any capital gains on them.
So yes, rich people who make a lot of money in unrealized capital gains are vastly underpaying taxes on their income. We should close the step up in basis tax loophole.
Aren’t you omitting something here? Like the fact that the step up in basis happens after the inheritance tax is paid?
If I buy stock for $10 million and in 40 years it appreciates to $70 million (an average 5% annual growth), and then I die, my kids will pay inheritance tax on the $60 million capital gain. Then the new basis will become $70 million. What exactly do you propose it to be?
If I buy stock for $10 million and in 40 years it appreciates to $70 million (an average 5% annual growth), and then I die, my kids will pay inheritance tax on the $60 million capital gain. Then the new basis will become $70 million. What exactly do you propose it to be?
If they want to step up the basis, shouldn't they have to pay capital gains taxes on the difference?
The estate tax's average effective rate of 17 percent (2017) is below the capital gains rate.
The estate tax's average effective rate of 17 percent (2017) is below the capital gains rate.
That honestly sounds like the step up in basis is the issue here, especially if it's uncapped, rather than the lack of taxation on unrealized and possibly non liquid gains.
The Guardian reporting misleading headlines…as usual. The claimed 3.4% tax rate comes from calculating how much taxes they paid as a percentage of their net worth increase, not income.
You can make a valid argument that the way ultra-wealthy people are taxed isn’t fair and that unrealized stock/other investments appreciation should be regarded as income…but it isn’t as of now, making this headline at least misleading and at worse an outright lie.
You can make a valid argument that the way ultra-wealthy people are taxed isn’t fair and that unrealized stock/other investments appreciation should be regarded as income…but it isn’t as of now, making this headline at least misleading and at worse an outright lie.
The proposal discussed in TFA was a 20% minimum tax on income and unrealized gains, so it is reasonable that the issue is not framed in terms of simple income.
Not sure how you think this is being misleading.
Not sure how you think this is being misleading.
[deleted]
Is this just income taxes? Excluding capital gains and estate taxes (when they pass)? If so then this is not surprising. Most of the wealthiest people derive the vast majority of their wealth from capital gains, not income. And it looks like that's what's being described by the article:
> The difference in tax rates between the wealthiest Americans and the average worker comes down to two critical factors, according to the investigation: first, the wealthy have their income taxed at a lower rate because much of their wealth is accumulated through investments, like stocks; and second, the wealthy are able to use large charitable donations to get huge deductions.
TL;DR: Capital gains taxes are distinct from income taxes. Journalist courts clicks by conflating the two.
> The difference in tax rates between the wealthiest Americans and the average worker comes down to two critical factors, according to the investigation: first, the wealthy have their income taxed at a lower rate because much of their wealth is accumulated through investments, like stocks; and second, the wealthy are able to use large charitable donations to get huge deductions.
TL;DR: Capital gains taxes are distinct from income taxes. Journalist courts clicks by conflating the two.
So 0.001% of Americans pay 3.4% of income taxes?
How the fuck is that fair?
How the fuck is that fair?
Setting aside the gross misunderstanding of the actual article here, even if that were what the title said, you really don't understand wealth distribution in America if you think that number would be too high. There's an estimated $150 trillion in total household wealth in the united states, and the 400 richest Americans own $3.2 trillion of that, or 2.1%. But also realize that the wealth of the super rich is growing faster than the wealth of the bottom 90%, meaning that the income difference is actually much larger than this. Even with a flat tax, the top 400 Americans should be paying at least 3.4% of all income taxes in America. But given that a flat tax is morally abhorrent (the next $10,000 in income is meaningless to the standard of living of a billionaire, but life-changing to someone in poverty), it should be more than that.
You, like so many, vastly under-estimate how much richer the ultra-wealthy are than everyone else. Vastly.
https://mkorostoff.github.io/1-pixel-wealth/
You, like so many, vastly under-estimate how much richer the ultra-wealthy are than everyone else. Vastly.
https://mkorostoff.github.io/1-pixel-wealth/
>> you really don't understand wealth distribution in America
A false statement. I really do understand "wealth distribution in America". Using your terms. Although "distribution" there is a propaganda term. Wealth isn't distributed.
>> the wealth of the super rich is growing faster than the wealth of the bottom 90%
"Super rich" is another propaganda term. During stock market downturns your assertion is simply false. If the S&P falls by 50% will you say that the wealth of the "super rich" is collapsing so something needs to be done?
No, no you will not. Because that would be ridiculous.
>> Even with a flat tax, the top 400 Americans should be paying at least 3.4% of all income taxes in America
Don't agree. When you tax something, you get less of it. Don't tax success, tax failure.
>> But given that a flat tax is morally abhorrent
Don't agree.
>> You, like so many, vastly under-estimate how much richer the ultra-wealthy are than everyone else. Vastly.
False.
A false statement. I really do understand "wealth distribution in America". Using your terms. Although "distribution" there is a propaganda term. Wealth isn't distributed.
>> the wealth of the super rich is growing faster than the wealth of the bottom 90%
"Super rich" is another propaganda term. During stock market downturns your assertion is simply false. If the S&P falls by 50% will you say that the wealth of the "super rich" is collapsing so something needs to be done?
No, no you will not. Because that would be ridiculous.
>> Even with a flat tax, the top 400 Americans should be paying at least 3.4% of all income taxes in America
Don't agree. When you tax something, you get less of it. Don't tax success, tax failure.
>> But given that a flat tax is morally abhorrent
Don't agree.
>> You, like so many, vastly under-estimate how much richer the ultra-wealthy are than everyone else. Vastly.
False.
Really trying to avoid a personal attack here but you're really asking for one. I'm genuinely curious whether people like you actually think of themselves as a good person. Do you?
You've certainly "picked a team", and you've picked team billionaire over team humanity. While morally bankrupt, such a choice might at least make a weird sort of short-sighted sense if you are currently a multi-billionaire. Are you? Otherwise you've picked the wrong team.
Actually you've picked the wrong team even if you are a multi-billionaire. Would you rather be a stone-age emperor, or a space-age mere well-to-do? Making all of humanity better benefits the ultra-rich the most, since their boat is the biggest one floating on this ocean we all share. But I guess you often need that psychopathic mindset to get to the level of the top 400; they may be mentally incapable of helping others even when it benefits them. Help other people!? Who are not me!? Impossible.
Again: a semi-sensible short-sighted sort of local minimum if you're already a billionaire. But you're not, are you?
You've certainly "picked a team", and you've picked team billionaire over team humanity. While morally bankrupt, such a choice might at least make a weird sort of short-sighted sense if you are currently a multi-billionaire. Are you? Otherwise you've picked the wrong team.
Actually you've picked the wrong team even if you are a multi-billionaire. Would you rather be a stone-age emperor, or a space-age mere well-to-do? Making all of humanity better benefits the ultra-rich the most, since their boat is the biggest one floating on this ocean we all share. But I guess you often need that psychopathic mindset to get to the level of the top 400; they may be mentally incapable of helping others even when it benefits them. Help other people!? Who are not me!? Impossible.
Again: a semi-sensible short-sighted sort of local minimum if you're already a billionaire. But you're not, are you?
3.4% of their income in taxes. Not 3.4% of all income taxes paid in the country.
They paid $13.6 billion from 2014-2018. Total income taxes were about $1.5 trillion per year or about $7.5 trillion over the same timespan, so they paid about 0.18% of total income taxes.
They paid $13.6 billion from 2014-2018. Total income taxes were about $1.5 trillion per year or about $7.5 trillion over the same timespan, so they paid about 0.18% of total income taxes.
So 0.001% of people paid 0.18% of income taxes?
How the fuck is that fair?
How the fuck is that fair?
As per my other comment: vastly, vastly, vastly, VASTLY underestimating the size of the wealth gap in America.
https://mkorostoff.github.io/1-pixel-wealth/
https://mkorostoff.github.io/1-pixel-wealth/
"Gap" is a value judgement. I don't share your values.
It's not. They made way over 180x as much money as the average person.
Value-based pricing. They got the most value out of the country, they should pay the most for it.
The only thing that upsets be about this everyone should be paying 3.4%. The government wastes nearly everything that is handed to it. The old "oh but what about police and fire" compromises a micron of the what is sent to the government. All of it ends up in the pockets of Senator's friends.
This is a very myopic view that basically comes down to "I can't immediately think of thousands of different government services that require money, so they therefore don't exist and it all must be wasted."
Yes, there is some corruption and waste, especially in the DoD. It's a non-trivial percentage, and too high. I too wish we gave less money to the defense industry. But when a suspension bridge needs substructure repairs for $400 million, and that contract might go to a Senator's buddy's company, it represents corruption, but not necessarily a huge amount of waste. It's only waste if the company is actually significantly worse at delivering. There are some bad incentives, but mostly everyone is still incentivized to do the job right. I'm hesitant to estimate a percentage on the amount of taxes that are outright wasted due to corruption, but I have serious doubts it's higher than 10%. Yes, that's WAY TOO HIGH, but it's not close to "all of it minus a micron", like you say. Nor is it nearly enough for 3.4% to actually sustain everything; nor is 0% waste possible (but we should still try!).
Yes, there is some corruption and waste, especially in the DoD. It's a non-trivial percentage, and too high. I too wish we gave less money to the defense industry. But when a suspension bridge needs substructure repairs for $400 million, and that contract might go to a Senator's buddy's company, it represents corruption, but not necessarily a huge amount of waste. It's only waste if the company is actually significantly worse at delivering. There are some bad incentives, but mostly everyone is still incentivized to do the job right. I'm hesitant to estimate a percentage on the amount of taxes that are outright wasted due to corruption, but I have serious doubts it's higher than 10%. Yes, that's WAY TOO HIGH, but it's not close to "all of it minus a micron", like you say. Nor is it nearly enough for 3.4% to actually sustain everything; nor is 0% waste possible (but we should still try!).
The vast majority goes to defense, social security, medicare/medicaid. Which ones should we dump? I mean we'd have to dump them all to go to the tax rate you propose, but where should we start?
Warren Buffett is worth $100B. So if Berkshire Hathaway stock went up 10% in 2022, they'd say Warren Buffett made $10 billion in income, even if he didn't sell a single share.
Obviously extremely misleading and if I were more cynical, I'd accuse them of doing this only to push a political narrative or agenda rather than to report the facts as they are.