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54 comments
Did you mean to say taxing wealth or taxing capital gains?
Taxing wealth (like real estate taxes) in essence means you never actually own anything, you’re just renting.
Taxing capital gains means that everything you ever own will also be taken from you in the form of taxes on inflated dollars.
The reason this website exists, and all the startups that have gone through YC, is because the tax on capital gains is low.
Preferential tax treatment of capital gains from small business investment is the reason we have venture capital. The risk adjusted returns are far too low otherwise. Note that Section 1202 provides the first $10million in gains entirely tax-free right now.
You can’t increase the tax rate and expect people to just make the same choices and end up with less to show for it. The more the government confiscates the upside, the less people will take the risk.
Taxing wealth (like real estate taxes) in essence means you never actually own anything, you’re just renting.
Taxing capital gains means that everything you ever own will also be taken from you in the form of taxes on inflated dollars.
The reason this website exists, and all the startups that have gone through YC, is because the tax on capital gains is low.
Preferential tax treatment of capital gains from small business investment is the reason we have venture capital. The risk adjusted returns are far too low otherwise. Note that Section 1202 provides the first $10million in gains entirely tax-free right now.
You can’t increase the tax rate and expect people to just make the same choices and end up with less to show for it. The more the government confiscates the upside, the less people will take the risk.
> Taxing capital gains means that everything you ever own will also be taken from you in the form of taxes on inflated dollars.
No, it doesn't. Taxing long-term capital gains as normal income but inflation-correcting basis values so that you are taxing real, rather than nominal, gains is quite easily something that could be done.
> The reason this website exists, and all the startups that have gone through YC, is because the tax on capital gains is low.
Once you have surplus assets to immediate needs, investing them for returns is natural, preferential tax treatment may increase the propensity to do so somewhat, but it doesn't create it; mostly, it just rewards those who are rich enough that they would be investors in any case.
No, it doesn't. Taxing long-term capital gains as normal income but inflation-correcting basis values so that you are taxing real, rather than nominal, gains is quite easily something that could be done.
> The reason this website exists, and all the startups that have gone through YC, is because the tax on capital gains is low.
Once you have surplus assets to immediate needs, investing them for returns is natural, preferential tax treatment may increase the propensity to do so somewhat, but it doesn't create it; mostly, it just rewards those who are rich enough that they would be investors in any case.
> Taxing capital gains means that everything you ever own will also be taken from you in the form of taxes on inflated dollars.
How? You're taxing gains so by definition, what you already own cannot be taken.
> The reason this website exists, and all the startups that have gone through YC, is because the tax on capital gains is low.
[evidence needed]
> You can’t increase the tax rate and expect people to just make the same choices and end up with less to show for it. The more the government confiscates the upside, the less people will take the risk.
Maybe, maybe not. The relationship between upside and risk is not purely linear. The human mind doesn't work like that. Rather it works in thresholds.
Wealthy people can never make as much money by working than by investing. So they have to invest. If the return on all means of investment is similarly increased, the situation doesn't change.
How? You're taxing gains so by definition, what you already own cannot be taken.
> The reason this website exists, and all the startups that have gone through YC, is because the tax on capital gains is low.
[evidence needed]
> You can’t increase the tax rate and expect people to just make the same choices and end up with less to show for it. The more the government confiscates the upside, the less people will take the risk.
Maybe, maybe not. The relationship between upside and risk is not purely linear. The human mind doesn't work like that. Rather it works in thresholds.
Wealthy people can never make as much money by working than by investing. So they have to invest. If the return on all means of investment is similarly increased, the situation doesn't change.
"> Taxing capital gains means that everything you ever own will also be taken from you in the form of taxes on inflated dollars.
How? You're taxing gains so by definition, what you already own cannot be taken."
His point is that you are taxing nominal gains, not real gains. Let's say you bought a house for $1mm in 2000, and sold it for approx. $1.5mm in 2017, owing $100k in capital gains (20% of the $500k nominal gain).
You are now left with $1.4mm. But the inflation calculator I'm looking at says $1mm in 2000 dollars is $1.45mm in 2017 dollars, so even though the government claims they are taxing gains, the real value of your dollars has declined.
How? You're taxing gains so by definition, what you already own cannot be taken."
His point is that you are taxing nominal gains, not real gains. Let's say you bought a house for $1mm in 2000, and sold it for approx. $1.5mm in 2017, owing $100k in capital gains (20% of the $500k nominal gain).
You are now left with $1.4mm. But the inflation calculator I'm looking at says $1mm in 2000 dollars is $1.45mm in 2017 dollars, so even though the government claims they are taxing gains, the real value of your dollars has declined.
>The latter is providing economic value (maybe, maybe not) through mere ownership (rent-collection)
I want to point out that "rents" are something else than collecting dividends. People who hold equities are not rent-seekers(for the most part). They are compensated for taking on risk in the economy. This serves a real, very important, function.
Rents are when political/other power is used to extract money out of a situation that you do not contribute to in any way. E.g. tax prep companies lobbying to make filing taxes complicated so their business can have a problem to exist for. That sort of behavior does nothing to contribute, it it is zero sum(no net wealth is generated by this behavior for anyone), as rents tend to be.
Not to be confused with rent, that you pay for living in a property, which is something completely different.
I want to point out that "rents" are something else than collecting dividends. People who hold equities are not rent-seekers(for the most part). They are compensated for taking on risk in the economy. This serves a real, very important, function.
Rents are when political/other power is used to extract money out of a situation that you do not contribute to in any way. E.g. tax prep companies lobbying to make filing taxes complicated so their business can have a problem to exist for. That sort of behavior does nothing to contribute, it it is zero sum(no net wealth is generated by this behavior for anyone), as rents tend to be.
Not to be confused with rent, that you pay for living in a property, which is something completely different.
One problem is that the two are difficult to separate once people have an incentive to confuse them. Note how much compensation now comes in the form of stock, for example, which is partly driven by lower capital gains taxes. It wouldn't be hard to shift things the other way: create a company for your assets and then pay yourself a healthy salary and bonus plan for managing your assets.
So however much they might be separate in theory, I think I'm fine if we just start with a 70% tax on all income over $500k, no matter the source. The more complicated the plan, the more likely people will dodge it.
So however much they might be separate in theory, I think I'm fine if we just start with a 70% tax on all income over $500k, no matter the source. The more complicated the plan, the more likely people will dodge it.
Yes.
A 4% wealth tax in the US could eliminate federal and state income taxes completely, and it would be far less regressive than the current scheme.
A 4% wealth tax in the US could eliminate federal and state income taxes completely, and it would be far less regressive than the current scheme.
Taxing wealth seems to have enormous practical problems though - does everyone have to have their entire life assessed each year?
> Taxing wealth seems to have enormous practical problems though - does everyone have to have their entire life assessed each year?
I'd bet people didn't have their entire incomes assessed each year before the advent of the income tax. The practical problems of a wealth tax don't seem like they'd be much greater than those from the income tax. Rather than generating W-2s and 1099s to document income, institutions might generate W-3s and 1100s to document account balances and assets. Capital gains tax could just turn into a capital tax, but remain assessed when the assets are sold.
I'd bet people didn't have their entire incomes assessed each year before the advent of the income tax. The practical problems of a wealth tax don't seem like they'd be much greater than those from the income tax. Rather than generating W-2s and 1099s to document income, institutions might generate W-3s and 1100s to document account balances and assets. Capital gains tax could just turn into a capital tax, but remain assessed when the assets are sold.
The former and latter are both rich. Your point is fair but the example is weak.
> raising taxes on the rich eventually costs the government revenue by discouraging work. The latest economic research suggests that this is true — but only if you raise the top tax rate higher than (approximately) 70 percent.
Why is maximizing government revenue a good idea? Shouldn't the government be encouraging private sector activity and encouraging people to do as much socially valuable work as possible?
Of course, not all income comes from activities that are socially valuable, and we'd do well to eliminate the harmful activities, but taxes aren't the way to do that. Taxes are a scythe that cuts down both the wheat and the weeds. I'd like to see the government focus on weedkiller policies and let the wheat grow.
Why is maximizing government revenue a good idea? Shouldn't the government be encouraging private sector activity and encouraging people to do as much socially valuable work as possible?
Of course, not all income comes from activities that are socially valuable, and we'd do well to eliminate the harmful activities, but taxes aren't the way to do that. Taxes are a scythe that cuts down both the wheat and the weeds. I'd like to see the government focus on weedkiller policies and let the wheat grow.
An assumption that is unsaid in all these pro-tax articles is that somehow taxation is some innately good thing, and letting those evil rich people keep their money is some fundamentally wrong thing. Why is it assumed so moral and good to give your money to the government?
>Why is maximizing government revenue a good idea? Why indeed. Arguments say it is because that money can be spent for higher purposes, fancy projects private investors will never do, etc... But if that is the case, and you extend that line of thinking ad absurdum, what is the point of letting people earn money at all? Why not confiscate 100% of it to spend more efficiently and better by the government? Obviously that would not work, as it would be communism.
>Why is maximizing government revenue a good idea? Why indeed. Arguments say it is because that money can be spent for higher purposes, fancy projects private investors will never do, etc... But if that is the case, and you extend that line of thinking ad absurdum, what is the point of letting people earn money at all? Why not confiscate 100% of it to spend more efficiently and better by the government? Obviously that would not work, as it would be communism.
> This week, Alexandria Ocasio-Cortez told 60 Minutes that she believes the U.S. should consider taxing incomes above $10 million at a 70 percent rate. Specifically, the congresswoman suggested that taxing the rich at such a rate would be preferable to forgoing major investments in renewable energy, and other technologies necessary for averting catastrophic climate change.
Agreed 100%. It will be interesting to see how much traction these ideas can get in today's political climate.
Agreed 100%. It will be interesting to see how much traction these ideas can get in today's political climate.
Why should they pay more? I haven't seen data otherwise, and I would be happy to admit that I am wrong, but what additional use of public goods and services that are funded by taxes do people making $10M+ use more than other people at the rate described?
If their use of public goods and services are greater that people making less money, is that use at a rate that would justify taking 70% of their income? Sincerely curious....
If their use of public goods and services are greater that people making less money, is that use at a rate that would justify taking 70% of their income? Sincerely curious....
> Why should they pay more? I haven't seen data otherwise, and I would be happy to admit that I am wrong, but what additional use of public goods and services that are funded by taxes do people making $10M+ use more than other people at the rate described?
Your mental model of taxes is wrong, or at least unconventional.
Taxes aren't a bill for public services personally consumed. For instance, we don't charge poor welfare recipients more tax because they use more services, and to do so would be nonsensical. Taxes typically also serve an economic leveling function.
Your mental model of taxes is wrong, or at least unconventional.
Taxes aren't a bill for public services personally consumed. For instance, we don't charge poor welfare recipients more tax because they use more services, and to do so would be nonsensical. Taxes typically also serve an economic leveling function.
His opinion is unconventional only to one side if the political aisle. Some view taxes as a means of redistribution, while others view it as a bill for the limited services government is to provide.
> His opinion is unconventional only to one side if the political aisle. Some view taxes as a means of redistribution, while others view it as a bill for the limited services government is to provide.
I think that overstates things, you'd have to venture pretty far into libertarianism before you find much of the latter view.
I think that overstates things, you'd have to venture pretty far into libertarianism before you find much of the latter view.
No you really don’t, taxes should be used to fund collective services that benefit society as a whole, you don’t need to go full Libertarian to think that taxes shouldn’t be used for wealth transfer, in fact you’ll find many even on the left that think the same way.
Having universal health care is good because a healthy society can function better, when done correctly it can also improved the level of medical care that the wealthy receive if only due to the fact that private healthcare now needs to be that much better.
Same goes for education more people with better education means a richer society as a whole.
Even public housing and unemployment benefits are a societal security improvement tool people with homes and with food on their tables are less likely to resort to criminal activities.
If anything you need to go pretty much to the left to find people that think that taxes are or should be used as a direct means of wealth redistribution.
Having universal health care is good because a healthy society can function better, when done correctly it can also improved the level of medical care that the wealthy receive if only due to the fact that private healthcare now needs to be that much better.
Same goes for education more people with better education means a richer society as a whole.
Even public housing and unemployment benefits are a societal security improvement tool people with homes and with food on their tables are less likely to resort to criminal activities.
If anything you need to go pretty much to the left to find people that think that taxes are or should be used as a direct means of wealth redistribution.
Thank you for the response - sincerely. I supposed it is unconventional.
I'm still struck by a few ideas. The first is that economic leveling needs to be done by force through the state. The second being that any new program needs to be funded by the wealthy - also by force of the state.
I would think using incentives would be the better approach? For example, let corporations repatriate overseas cash with a lower penalty and use that money to fund green R&D
I'm still struck by a few ideas. The first is that economic leveling needs to be done by force through the state. The second being that any new program needs to be funded by the wealthy - also by force of the state.
I would think using incentives would be the better approach? For example, let corporations repatriate overseas cash with a lower penalty and use that money to fund green R&D
> I'm still struck by a few ideas. The first is that economic leveling needs to be done by force through the state. The second being that any new program needs to be funded by the wealthy - also by force of the state.
We can't count on noblesse oblige to do it, and involving the state is how we involve democracy in the process.
> I would think using incentives would be the better approach? For example, let corporations repatriate overseas cash with a lower penalty and use that money to fund green R&D
In some ways that may depend too much on noblesse oblige to work (i.e. that the corporations won't subvert the goals of the incentives to benefit themselves) and in other ways be too much like a command economy (government closely directing private industry).
We can't count on noblesse oblige to do it, and involving the state is how we involve democracy in the process.
> I would think using incentives would be the better approach? For example, let corporations repatriate overseas cash with a lower penalty and use that money to fund green R&D
In some ways that may depend too much on noblesse oblige to work (i.e. that the corporations won't subvert the goals of the incentives to benefit themselves) and in other ways be too much like a command economy (government closely directing private industry).
> In some ways that may depend too much on noblesse oblige to work
Why are you suspicious on the noblesse of people who run companies but not on that of people who run governments?
Bureaucrats are not noble angels who came from heaven to help us. They are people acting on their own self-interest like everyone else.
Why are you suspicious on the noblesse of people who run companies but not on that of people who run governments?
Bureaucrats are not noble angels who came from heaven to help us. They are people acting on their own self-interest like everyone else.
> We can't count on noblesse oblige to do it
Exactly the problem. If the people with the big resources were taking care of the big problems, government would have a lot less to do.
And although I get that the taxation system is ultimately undergirded by the threat of force, so is most property ownership. E.g., consider John McCcain's 4-8 houses. [1] He obviously could only be in 1 at a time. If homeless people took the rest over, they would be ejected by force. Government force in specific. That's how democracy works: we come to agreements on how things should be run, and people who disagree sufficiently end up complying at the point of a gun. Libertarians who get the vapors at the violence underlying taxation but not property are not actually concerned about violence.
[1] https://www.politico.com/story/2008/08/mccain-unsure-how-man...
Exactly the problem. If the people with the big resources were taking care of the big problems, government would have a lot less to do.
And although I get that the taxation system is ultimately undergirded by the threat of force, so is most property ownership. E.g., consider John McCcain's 4-8 houses. [1] He obviously could only be in 1 at a time. If homeless people took the rest over, they would be ejected by force. Government force in specific. That's how democracy works: we come to agreements on how things should be run, and people who disagree sufficiently end up complying at the point of a gun. Libertarians who get the vapors at the violence underlying taxation but not property are not actually concerned about violence.
[1] https://www.politico.com/story/2008/08/mccain-unsure-how-man...
Could you kindly expound on how the incentive example I described would be like a command economy? And how would that be different from the capital gains tax rates we have now ( in the sense the government providing an incentive for investment)?
With regards to: >We can't count on noblesse oblige to do it, and involving the state is how we involve democracy in the process.
I believe it's the democratic part that bothers me - as, and excuse me if this is a poor analogy, like 3 wolves an one sheep voting on what to have for dinner.
I don't want you to think that I am ignorant of the fact that we do need some level of economic leveling for a well functioning society. My concern is how to best achieve that while preserving an individual liberty.
Again, appreciate the response.
With regards to: >We can't count on noblesse oblige to do it, and involving the state is how we involve democracy in the process.
I believe it's the democratic part that bothers me - as, and excuse me if this is a poor analogy, like 3 wolves an one sheep voting on what to have for dinner.
I don't want you to think that I am ignorant of the fact that we do need some level of economic leveling for a well functioning society. My concern is how to best achieve that while preserving an individual liberty.
Again, appreciate the response.
Why does the state exist if not to "use force" to make the lives of the people in the state better?
Also why are all these people who object to use of "of force" to levy and collect taxes but not you know, literally everything else that the state uses force to do?
Also why are all these people who object to use of "of force" to levy and collect taxes but not you know, literally everything else that the state uses force to do?
One thing comes to mind is that people making $10M+ have a lot more to lose and might benefit more from the safety that the defense budget provides.
That applies to the proportional part of the tax but not to the progressive part. As you go up in tax bracket from 10% to 37% you get less protection per dollar of earnings protected.
I fully realize I'm saying this because I'm not in that bracket, but if you make more than $10m/yr, do you really need the extra money that much?
Do the companies that you're starting or investing in with the $10m/yr you earn need that cash? Do you think Uncle Sam can do a better job of investing it than, say, Warren Buffett or Elon Musk?
It's not like rich people just sit around on piles of money like Scrooge McDuck. They put that money to work so that they can earn some interest. The government will happily just spend it, though. So should it be doled out by congresspeople to their friends, or should it be invested by someone shrewd enough to be making $10m/yr in the first place?
It's not like rich people just sit around on piles of money like Scrooge McDuck. They put that money to work so that they can earn some interest. The government will happily just spend it, though. So should it be doled out by congresspeople to their friends, or should it be invested by someone shrewd enough to be making $10m/yr in the first place?
> They put that money to work so that they can earn some interest
They put the money in things that will generate the highest return. The government will (hopefully) put the money in things that will benefit people, even if they don't have an especially high ROI in the short term.
I am not at all confident in the ability of capitalism to save the environment, for example.
They put the money in things that will generate the highest return. The government will (hopefully) put the money in things that will benefit people, even if they don't have an especially high ROI in the short term.
I am not at all confident in the ability of capitalism to save the environment, for example.
For example, how many billionaires have stepped up to fix Flint's water? Elon Musk did offer to send people water filters for their homes, but that doesn't address the root causes or the damage (property and health) already done.
https://www.wired.com/story/elon-musk-flint-water-plan/
https://www.wired.com/story/elon-musk-flint-water-plan/
And how many billionaires have filled a city's water with lead?
"Look at this problem a government caused that those nasty rich people haven't fixed!" is not a fantastic argument for making them give more money to the government.
"Look at this problem a government caused that those nasty rich people haven't fixed!" is not a fantastic argument for making them give more money to the government.
In the latter situation, the government will print the money they need for doling.
Then everyone will be making >$10m/yr as the value of the dollar drops to zero.
Then everyone will be making >$10m/yr as the value of the dollar drops to zero.
You make a false choice between "congresspeople and their friends" and "someone shrewd enough to be making $10m/yr"
Not all congresspeople are corrupt and not all those making $10m/yr are shrewd. These are classic government-bad capitalism-good strawmen.
Personally, I doubt most of the folks capable of spending/investing $10m/yr are actually making that money themselves.
In that case I would prefer the semblance of accountability I get from Uncle Sam instead of the supposed benevolence of random individuals spending money that fell in their laps.
Not all congresspeople are corrupt and not all those making $10m/yr are shrewd. These are classic government-bad capitalism-good strawmen.
Personally, I doubt most of the folks capable of spending/investing $10m/yr are actually making that money themselves.
In that case I would prefer the semblance of accountability I get from Uncle Sam instead of the supposed benevolence of random individuals spending money that fell in their laps.
This is a common misperception around the economics of taxation.
Look at it from the company perspective. There is a skill that is worth a lot of money to them which they want to acquire. If they are willing to pay $1mm more than their competitor for that skil, for that amount of money to actually go to recipient, it will now cost the company $7mm of profit.
That skill is no less valuable or essential to the company, it’s just effectively impossible to pay for it now. The extra money paid in taxes in order to acquire that skill comes off the balance sheet — and effectively is being taken away from the same pool of money that is being spent to hire workers at $50k/year.
The $50k/year worker can not do the job of the $10mm/year worker. 100 of them cannot do the job either (because so much key labor is not actually divisible).
It’s hurting the company balance sheet to effectively pay their most important employees, which hurts the company.
Likewise, the employee making $10mm+ per year is a visionary who, like an Elon Musk, is contributing to the economy in ways a lot more profound than a few extra cents in everyone’s welfare checks.
“No one needs more than a million dollars a year, just take everything above that to even things out” means you never have people willing to lay it all on the line to try to do something more as well.
Look at it from the company perspective. There is a skill that is worth a lot of money to them which they want to acquire. If they are willing to pay $1mm more than their competitor for that skil, for that amount of money to actually go to recipient, it will now cost the company $7mm of profit.
That skill is no less valuable or essential to the company, it’s just effectively impossible to pay for it now. The extra money paid in taxes in order to acquire that skill comes off the balance sheet — and effectively is being taken away from the same pool of money that is being spent to hire workers at $50k/year.
The $50k/year worker can not do the job of the $10mm/year worker. 100 of them cannot do the job either (because so much key labor is not actually divisible).
It’s hurting the company balance sheet to effectively pay their most important employees, which hurts the company.
Likewise, the employee making $10mm+ per year is a visionary who, like an Elon Musk, is contributing to the economy in ways a lot more profound than a few extra cents in everyone’s welfare checks.
“No one needs more than a million dollars a year, just take everything above that to even things out” means you never have people willing to lay it all on the line to try to do something more as well.
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Your example overlooks a very important step, namely that no matter pays extra for that employee, the employee will have to pay 70% of it in taxes as well. No employee ever says "I have a job now, but if you want me, that will cost you an extra $1MM/yr". We go to the highest bidder, and whether the bid is pre-tax or post-tax makes no difference if the tax rate is the same no matter which company you work for.
Except the tax rate isn’t the same everywhere or for every kind of dollar earned.
And so it’s basically a ceiling on what that company can pay an employee versus what the employee could go make on their own or elsewhere.
At $50k-$100k you can assume there are limits to what an employee can do. At $10m plus anything is on the table.
So instead of taking a raise, I take a day off per week. Or two.
And so it’s basically a ceiling on what that company can pay an employee versus what the employee could go make on their own or elsewhere.
At $50k-$100k you can assume there are limits to what an employee can do. At $10m plus anything is on the table.
So instead of taking a raise, I take a day off per week. Or two.
I'd be happy to see carried interest tax reform first. Even Trump wanted that. But yeah, didn't happen.
> Agreed 100%. It will be interesting to see how much traction these ideas can get in today's political climate.
Why not have skin in the game: We should tax anything above the federal poverty level at 100%. After all the government knows better how to spend the money.
Why not have skin in the game: We should tax anything above the federal poverty level at 100%. After all the government knows better how to spend the money.
There needs to be more focus on the capital gains tax. The super rich do not make most of their money from income. If we were to reclassify capital gains as income, the system would be more fair to people who make a living from wages while providing the government with additional revenue.
Not just the super rich pay capital gains tax. Reclassifying capital gains as earned income would hit me pretty solidly and I'm just a middle class guy hoping to one day achieve financial independence.
I'd hate that. I've never been rich, but I am a saver and I'm on the path to financial independence. To a large extent, my plan (the same plan advocated by Warren Buffet, Jack Bogle, etc.etc.) involves long term investing. (Yes, long-term investors pay capital gains taxes, especially mutual fund holders.) Reclassifying the taxing of capital gains could ruin this tried-and-proven scheme for the working class.
My first reality check in paying taxes came when our startup finally generated some real revenue. It was exciting... We started hiring employees, investing in a bigger office, etc. When time came to pay our taxes - it was a humbling experience. I felt sick to my stomach... We worked so hard for that cash and had to hand over SO MUCH MONEY to Uncle Sam. He was the greatest silent partner we had all along!
All of our money was going back into the company, so our growth rate of hiring new employees was directly impacted by how much we paid in taxes.
Do people honestly believe that it would better we pay Uncle Sam, than to hire more employees in our growing company?
All of our money was going back into the company, so our growth rate of hiring new employees was directly impacted by how much we paid in taxes.
Do people honestly believe that it would better we pay Uncle Sam, than to hire more employees in our growing company?
I suspect that if such a change were enacted a lot of money would simply flow out of visibility.
The siren song of sweet, sweet cash is so strong that even those you'd think would be happy tax payers turn out to be tax cheats:
https://windsorstar.com/entertainment/celebrity/model-bar-re...
https://www.cnn.com/2017/04/29/celebrities/bruce-springsteen...
The siren song of sweet, sweet cash is so strong that even those you'd think would be happy tax payers turn out to be tax cheats:
https://windsorstar.com/entertainment/celebrity/model-bar-re...
https://www.cnn.com/2017/04/29/celebrities/bruce-springsteen...
Apparently nobody understands that the super rich make their income from long term capital gains treatment on stocks and this won't touch the wealth of the top 1% meaningfully anyway.
TL;DR - Buffet, Gates, and Bezos will still be stupid rich and this won't solve anything.
TL;DR - Buffet, Gates, and Bezos will still be stupid rich and this won't solve anything.
> Apparently nobody understands that the super rich make their income from long term capital gains treatment on stocks and this won't touch the wealth of the top 1% meaningfully anyway.
Then why not create a higher-rate long term capital gains tax-bracket for those people, when you're also increasing the income tax rate for them?
Then why not create a higher-rate long term capital gains tax-bracket for those people, when you're also increasing the income tax rate for them?
Yes exactly, we need a progressive capital gains tax as well as a progressive income tax.
The other aspect is you just have corporations buying assets for the use of their owners which sidesteps income tax as a whole.
So is the argument here that if a CEO is going to face a 70%, or really anything > 50%, after a certain amount they are just not going to pay themselves more and instead pay their workers more?
I could really only see that working if they simply eliminated the corporate tax and treaded all entities as pass through entities so it was taxed as OID. This is something I'm not actually opposed to as it would force entities to pay out cash to stock holders and they can use that money for other things vs. it being held on the balance sheet for a decade.
Also what happens if they just pay themselves more and accept the fact that the government takes 70%? Does the government redistribute that back via EITC or buy more hellfire missiles?
I could really only see that working if they simply eliminated the corporate tax and treaded all entities as pass through entities so it was taxed as OID. This is something I'm not actually opposed to as it would force entities to pay out cash to stock holders and they can use that money for other things vs. it being held on the balance sheet for a decade.
Also what happens if they just pay themselves more and accept the fact that the government takes 70%? Does the government redistribute that back via EITC or buy more hellfire missiles?
I have one question. How does taxing the rich make the poor any better off ?
At the end of the day the poor will still be poor right?
At the end of the day the poor will still be poor right?
You sincerely believe that tax revenue would be lost to waste and graft with no benefit to the poor? Higher taxes sting me as much as the next USAer, but I think you're being obtuse.
No. I never said that.
I am simply stating we have a problem. That problem is we have poor people.
It's one thing to tax the rich if that will make poor people not poor. It's an entirely different thing if we are simply taxing the rich simply to give to socal programs that don't have a track record of turning poor people into self sustaining non-poor people.
I think taking from the rich to give to poor people is a bandaid. And probably will result in more poor people who will require government help.
So back to the topic. We want to tax rich people. How are we using that money to have a net less number of poor people year over year?
I am simply stating we have a problem. That problem is we have poor people.
It's one thing to tax the rich if that will make poor people not poor. It's an entirely different thing if we are simply taxing the rich simply to give to socal programs that don't have a track record of turning poor people into self sustaining non-poor people.
I think taking from the rich to give to poor people is a bandaid. And probably will result in more poor people who will require government help.
So back to the topic. We want to tax rich people. How are we using that money to have a net less number of poor people year over year?
Taxing somebody who earns $500,000 USD per year laboring is not the same as taxing somebody who earns $500,000 USD per year through ownership of capital.
The latter is undoubtedly very rich; the former might be, or might be on their way (assuming they save and sustain the income).
The latter is providing economic value (maybe, maybe not) through mere ownership (rent-collection); the former is economic providing value (probably) through selling their labor.
These things do not have the same systemic effects.
As Piketty makes clear, taxing labor was the preferred form of tax collection in the mid-20th century (when taxation increased most rapidly as a portion of global GDP) because most income was collected from labor after the capital destruction of the two world wars. Now, the proportion of income from capital to income from labor has almost doubled to ~8:1.
We do not live in the same world, and taxing wealth makes far, far more sense both morally and economically than taxing labor. They should not be sloppily conflated.