Bill Gates Objects to Elizabeth Warren’s Wealth Tax, and She Offers to Explain(nytimes.com)
nytimes.com
Bill Gates Objects to Elizabeth Warren’s Wealth Tax, and She Offers to Explain
https://www.nytimes.com/2019/11/07/us/politics/bill-gates-elizabeth-warren-wealth-tax.html
202 comments
Let's close one loophole at at time.
Foundations can be tackled next.
Foundations can be tackled next.
What "loophole" is being closed here? Having wealth?
The loophole is that the largest taxes paid in the US are paid on income rather than wealth, which allows the most richest citizens to evade taxes by having a relatively small income while having an amount of wealth that is so large that it's hard for most people to wrap their brains around.
The US used to have an income tax that was over 90% for the highest income bracket. Bringing it back would be a step in the right direction, but not enough, as non-income-based wealth would be untouched. If it was up to me, I'd tax wealth over $1 million at 90%. It's laughable that these billionaires are complaining at being taxed a mere 6% on wealth over $1 billion.
The US used to have an income tax that was over 90% for the highest income bracket. Bringing it back would be a step in the right direction, but not enough, as non-income-based wealth would be untouched. If it was up to me, I'd tax wealth over $1 million at 90%. It's laughable that these billionaires are complaining at being taxed a mere 6% on wealth over $1 billion.
Wealth is just a static number. It goes up through income. You're talking about a double taxation for maintaining what you have which was already taxed on the way in.
There are different kinds of incomes like capital gains which is a different discussion and one that many people agree with raising.
> "I'd tax wealth over $1 million at 90%"
You'll lose most tax income. Every entrepreneur will leave. And the middle class (which builds up more than that over a lifetime) will be decimated. It's a great way to crash a nation.
There are different kinds of incomes like capital gains which is a different discussion and one that many people agree with raising.
> "I'd tax wealth over $1 million at 90%"
You'll lose most tax income. Every entrepreneur will leave. And the middle class (which builds up more than that over a lifetime) will be decimated. It's a great way to crash a nation.
"Every entrepreneur will leave."
It's been a long time since I looked in to this, but it used to be the case that if you gave up your US citizenship while having a net worth of over $100,000, it was assumed by the government that you were doing so for the purposes of tax evasion, and they'd continue to tax you for the next ten years.
The same could be done here, with the government getting 10 bites of 6% at wealth over $1 billion if the billionaire tries to run away. Taxation could also be made retroactive, if there was a political will to do it.
If some entrepreneurs leave others will step in to take their place.
As for the middle class being "decimated", I doubt it, as the median net worth in the US is only around $70k.
The majority of Americans won't be affected by taxes on millionaires.
It's been a long time since I looked in to this, but it used to be the case that if you gave up your US citizenship while having a net worth of over $100,000, it was assumed by the government that you were doing so for the purposes of tax evasion, and they'd continue to tax you for the next ten years.
The same could be done here, with the government getting 10 bites of 6% at wealth over $1 billion if the billionaire tries to run away. Taxation could also be made retroactive, if there was a political will to do it.
If some entrepreneurs leave others will step in to take their place.
As for the middle class being "decimated", I doubt it, as the median net worth in the US is only around $70k.
The majority of Americans won't be affected by taxes on millionaires.
So now the country is a prison? You won't have any millionaires if you tax their wealth at 90%. That's the point. And the top few pay a giant share of taxes.
Your plan does not lift anyone up and create wealth, it brings everyone down and destroys it.
Your plan does not lift anyone up and create wealth, it brings everyone down and destroys it.
No one would prevent anyone from leaving. They'd merely be prevented from evading taxes by leaving.
As far as creating wealth, I have no problem with it as long as it's shared. When it's hoarded by a tiny minority it leads to them having a greatly disproportionate concentration of power where they basically get to rule over the rest of us.
That's what I object to.
As far as creating wealth, I have no problem with it as long as it's shared. When it's hoarded by a tiny minority it leads to them having a greatly disproportionate concentration of power where they basically get to rule over the rest of us.
That's what I object to.
How is it hoarded? Becoming a billionaire requires creating massive value where millions of people willing pay you. The means of production that you leverage is due to capitalism, and the same freedom is offered to anyone else.
Nobody complains when the entrepreneur goes bankrupt from a failed business. Is society going to absorb those debts too then?
Wealth is power, but raising taxes is transferring it to politicians who already have political power. It's only being further concentrated, and that's a dangerous precedent that we can see from state-controlled economies like Russia and China.
Nobody complains when the entrepreneur goes bankrupt from a failed business. Is society going to absorb those debts too then?
Wealth is power, but raising taxes is transferring it to politicians who already have political power. It's only being further concentrated, and that's a dangerous precedent that we can see from state-controlled economies like Russia and China.
"Becoming a billionaire requires creating massive value where millions of people willing pay you."
There have been a number of articles posted to HN and elsewhere which argue that luck plays a great role in success. Furthermore, the rich need not be providing any value, as they could simply be ripping people off (with extremely egregious and famous examples like Enron or Madoff, but there are plenty of others, most of whom don't make the news), exploiting the poor (see Amazon's treatment of its warehouse pickers for another famous example that's pretty close to home.. or the use of sweatshop labor to build products the world round), or they could be bribing politicians to grant them favors in the form of laws that are beneficial to them or just outright government contracts which they don't deserve, or they could be manipulating consumers through advertising to buy stuff they don't need and otherwise wouldn't have wanted and that might not work anyway or have a variety of deleterious effects (like the endless list of quack cures throughout history which made their sellers very rich but the patients very sick)... the list goes on and on.
"Nobody complains when the entrepreneur goes bankrupt from a failed business. Is society going to absorb those debts too then?"
Remember the government bailouts of banks that were "too big to fail"?
"Wealth is power, but raising taxes is transferring it to politicians who already have political power. It's only being further concentrated, and that's a dangerous precedent that we can see from state-controlled economies like Russia and China."
I am against the concentration of power in the hands of politicians as well. There needs to be more, and more effective direct democracy in the US, rather than buring our heads in the sand and leaving up to the political class to worry about politics. That needs to be done hand-in-hand with a greatly improved education in civics, history, ethics, and reasoning, so people aren't so easily manipulated and mislead. In any case, there are lots of problems to solve, and the concentration of wealth is just one (though a critical part) of what needs to be done.
There have been a number of articles posted to HN and elsewhere which argue that luck plays a great role in success. Furthermore, the rich need not be providing any value, as they could simply be ripping people off (with extremely egregious and famous examples like Enron or Madoff, but there are plenty of others, most of whom don't make the news), exploiting the poor (see Amazon's treatment of its warehouse pickers for another famous example that's pretty close to home.. or the use of sweatshop labor to build products the world round), or they could be bribing politicians to grant them favors in the form of laws that are beneficial to them or just outright government contracts which they don't deserve, or they could be manipulating consumers through advertising to buy stuff they don't need and otherwise wouldn't have wanted and that might not work anyway or have a variety of deleterious effects (like the endless list of quack cures throughout history which made their sellers very rich but the patients very sick)... the list goes on and on.
"Nobody complains when the entrepreneur goes bankrupt from a failed business. Is society going to absorb those debts too then?"
Remember the government bailouts of banks that were "too big to fail"?
"Wealth is power, but raising taxes is transferring it to politicians who already have political power. It's only being further concentrated, and that's a dangerous precedent that we can see from state-controlled economies like Russia and China."
I am against the concentration of power in the hands of politicians as well. There needs to be more, and more effective direct democracy in the US, rather than buring our heads in the sand and leaving up to the political class to worry about politics. That needs to be done hand-in-hand with a greatly improved education in civics, history, ethics, and reasoning, so people aren't so easily manipulated and mislead. In any case, there are lots of problems to solve, and the concentration of wealth is just one (though a critical part) of what needs to be done.
Luck playing a part doesn't take away from the whole. You still need to work and create opportunities.
Ripping people off is already a crime. Exploiting the poor is a complex equation of personal choices and societal policies. Bribing politicians is an issue with govt politics (something I've stated several times). Poor corporate practices require regulation. Taxes do not solve any of these issues.
The bailouts were completely paid back with interest. It was one of the few examples of good govt spending and one of the best investments ever made. And it wasn't about saving a particular business but rather ensuring we don't go into a greater depression. Is that what you would've preferred?
Ripping people off is already a crime. Exploiting the poor is a complex equation of personal choices and societal policies. Bribing politicians is an issue with govt politics (something I've stated several times). Poor corporate practices require regulation. Taxes do not solve any of these issues.
The bailouts were completely paid back with interest. It was one of the few examples of good govt spending and one of the best investments ever made. And it wasn't about saving a particular business but rather ensuring we don't go into a greater depression. Is that what you would've preferred?
Bill Gates paid 10 billion taxes... on 100 billion. It's a mere 10%. That's a ridicule amount considering his wealth.
It's disgusting. Its what comes from 30+ years of reaganomics. People thru their governments should be able to create health and education programs, not hope some billionaire will be kind enough to save them.
How are taxes stopping this? This is poor govt spending. It will not be solved by giving the govt more money to spend poorly.
Excessive wealth (and therefore, power) is a bug. A wealth tax is a hotfix. Foundations can be addressed through the requirement that donations and control of the non profit receiving the gift is arms length, with punitive penalties for a failure to abide by said requirement. Gates and Buffett can still donate to a foundation, but then they aren't able to control it.
Most Americans will never be a millionaire or a billionaire. This is statistics, not feelings. There's no point in them supporting policies enabling such disparity in the economic system.
Most Americans will never be a millionaire or a billionaire. This is statistics, not feelings. There's no point in them supporting policies enabling such disparity in the economic system.
Who defines excessive? How will this solve disparities by giving more money to the govt to spend poorly?
I volunteer.
$10 million is enough that you can take 2.5% every year as $250k of income, and spend 0.5% on the fiduciary wealth manager's fees, and still have investment distributions and interest on the principal that outpace inflation in the long term. A household of one or two people can live its entire lifespan on that, without ever trading hours of labor for cash again, and then pass the same privilege down to a single heir, until civilization collapses.
$250k/year is a reasonable and sufficient retirement income. $10M is a plausible sum to accumulate through labor-selling alone, for one or two people each working for 2000 hours/year over 40 years, at an average combined rate of $175/hr, all while spending $100k/year on expenses and devoting $250k/year to savings. It does not blatantly flaunt the "diligent and/or intelligent work generates wealth" story.
The temporarily embarrassed millionaires all around the US can plausibly get there, if nothing else goes wrong, and they don't even have to cut expenses down, if they get paid enough per hour.
$250k/year is about 4x the median household income in the US. It can support most lifestyles less profligate than a person addicted to luxury travel, high-stakes gambling, top-shelf companionship-for-hire, or ultra-pure cocaine. And $250k/year can still be spent wisely and effectively by one household.
The thing about the government spending the money poorly is that they are still actually spending it. Spending is better for the poor than investing. When you spend money, the person you trade it to can go on to spend all of it themselves. When you loan it to them, or invest it, they have to give it back someday; it has strings attached. So the advantage of the wealth tax is in taking money that is not being spent, and putting it back into genuine circulation.
So then I take this reasonable number, and pad it by one order of magnitude, to absorb the edge cases that are still reasonable in person, but look bad on paper. Start the tax at $100 million in accumulated wealth, and tax 2.5% of everything in excess of that. Then deduct from that tax the payer's total spending (not loans or investments) in excess of $2.5 million, which is money that will count as someone else's income. If they can spend that much, the government doesn't have to spend it for them, and that spending will get taxed at a higher rate anyway, as income.
$10 million is enough that you can take 2.5% every year as $250k of income, and spend 0.5% on the fiduciary wealth manager's fees, and still have investment distributions and interest on the principal that outpace inflation in the long term. A household of one or two people can live its entire lifespan on that, without ever trading hours of labor for cash again, and then pass the same privilege down to a single heir, until civilization collapses.
$250k/year is a reasonable and sufficient retirement income. $10M is a plausible sum to accumulate through labor-selling alone, for one or two people each working for 2000 hours/year over 40 years, at an average combined rate of $175/hr, all while spending $100k/year on expenses and devoting $250k/year to savings. It does not blatantly flaunt the "diligent and/or intelligent work generates wealth" story.
The temporarily embarrassed millionaires all around the US can plausibly get there, if nothing else goes wrong, and they don't even have to cut expenses down, if they get paid enough per hour.
$250k/year is about 4x the median household income in the US. It can support most lifestyles less profligate than a person addicted to luxury travel, high-stakes gambling, top-shelf companionship-for-hire, or ultra-pure cocaine. And $250k/year can still be spent wisely and effectively by one household.
The thing about the government spending the money poorly is that they are still actually spending it. Spending is better for the poor than investing. When you spend money, the person you trade it to can go on to spend all of it themselves. When you loan it to them, or invest it, they have to give it back someday; it has strings attached. So the advantage of the wealth tax is in taking money that is not being spent, and putting it back into genuine circulation.
So then I take this reasonable number, and pad it by one order of magnitude, to absorb the edge cases that are still reasonable in person, but look bad on paper. Start the tax at $100 million in accumulated wealth, and tax 2.5% of everything in excess of that. Then deduct from that tax the payer's total spending (not loans or investments) in excess of $2.5 million, which is money that will count as someone else's income. If they can spend that much, the government doesn't have to spend it for them, and that spending will get taxed at a higher rate anyway, as income.
How does wealth that is not being spent affect you at all? How is it better for the poor? What do they gain exactly?
I think of the economy as a giant lazy river. A large quantity of life-critical fluid circulates endlessly, in a wide loop.
Most people spend 9 hours a day walking down to the river (commuting), filling their vessels (working), and carrying them back home (commuting). Some people also have an at-home cistern that they pour their vessels into (savings) that provides a buffer beyond the home's immediate needs.
A smaller number of people have gigantic reservoirs (rich). They don't go down to the river themselves to fill up. There's no way they could carry enough with their own buckets to fill even a fraction of the volume of their reservoir. Instead, other people pour in a little every time they make a trip to the river, perhaps as part of a deal to supply larger buckets, or shoulder yokes, or carts.
The big private reservoirs remove water from the normal water cycle. When people use the water, it flows back into the river somewhere downstream. Sometimes different stretches of the river experience droughts or floods, and that is what those little at-home cisterns are good for. During a drought, the river narrows, and not everyone is able to fill their vessels all the way. And those giant reservoirs--which aren't actually being used, but instead protected against leakage, siphoning, and evaporation--each slightly reduce the water flow downriver.
During a drought, some people may resort to begging water from a private reservoir owner. And if they have stout legs and shoulders, the owners agree: you can take a little of my water, if you promise to give more of it back later (loans). Sometimes, even in good times, someone will get water from a reservoir, because the reservoir is closer, and they need more than they can personally carry, and they promise to put more water back into the reservoir later (investment).
But as the water is locked up in private reservoirs, the river slows to a trickle, and only the rich can drink without pledging some of their future water-carrying capacity to someone else. The reservoirs grow larger; the river shrinks smaller.
Water that is used returns to the river. The poor and middle class need the river, as it is their only way to drink without mortgaging their future away to a rich person.
You might already see the problem here. The river comes from water that has been used and recirculated (spent!). When someone uses reservoir water, and pledges interest or investment return on it, they are committing to put more of the circulating public river into the unmoving private reservoir.
The only way to refill the river from the reservoirs, and keep it in circulation, is for their owners to use more water. Or for armed river rangers to order them at gunpoint to drain some of it back into the watershed. There is a little natural rainfall, and a little from people melting glaciers a little bit at a time by holding chunks of ice under their armpits, amounting to about 2% or 3% of the known volume of liquid water, but all those existing reservoir pledges have already exceeded that influx.
Most people spend 9 hours a day walking down to the river (commuting), filling their vessels (working), and carrying them back home (commuting). Some people also have an at-home cistern that they pour their vessels into (savings) that provides a buffer beyond the home's immediate needs.
A smaller number of people have gigantic reservoirs (rich). They don't go down to the river themselves to fill up. There's no way they could carry enough with their own buckets to fill even a fraction of the volume of their reservoir. Instead, other people pour in a little every time they make a trip to the river, perhaps as part of a deal to supply larger buckets, or shoulder yokes, or carts.
The big private reservoirs remove water from the normal water cycle. When people use the water, it flows back into the river somewhere downstream. Sometimes different stretches of the river experience droughts or floods, and that is what those little at-home cisterns are good for. During a drought, the river narrows, and not everyone is able to fill their vessels all the way. And those giant reservoirs--which aren't actually being used, but instead protected against leakage, siphoning, and evaporation--each slightly reduce the water flow downriver.
During a drought, some people may resort to begging water from a private reservoir owner. And if they have stout legs and shoulders, the owners agree: you can take a little of my water, if you promise to give more of it back later (loans). Sometimes, even in good times, someone will get water from a reservoir, because the reservoir is closer, and they need more than they can personally carry, and they promise to put more water back into the reservoir later (investment).
But as the water is locked up in private reservoirs, the river slows to a trickle, and only the rich can drink without pledging some of their future water-carrying capacity to someone else. The reservoirs grow larger; the river shrinks smaller.
Water that is used returns to the river. The poor and middle class need the river, as it is their only way to drink without mortgaging their future away to a rich person.
You might already see the problem here. The river comes from water that has been used and recirculated (spent!). When someone uses reservoir water, and pledges interest or investment return on it, they are committing to put more of the circulating public river into the unmoving private reservoir.
The only way to refill the river from the reservoirs, and keep it in circulation, is for their owners to use more water. Or for armed river rangers to order them at gunpoint to drain some of it back into the watershed. There is a little natural rainfall, and a little from people melting glaciers a little bit at a time by holding chunks of ice under their armpits, amounting to about 2% or 3% of the known volume of liquid water, but all those existing reservoir pledges have already exceeded that influx.
Wealth gets you access to the levers of power. A mere phone call from the likes of Gates, Buffett, or Zuckerberg will open more doors than most of us can dream of, and they don't have to spend a penny to do it.
The rich and powerful also tend to associate mostly with their own kind, which will skew their world view and priorities.[1]
The unspent money can also be used as collateral or leverage to earn more money.
Finally, the unspent money can be passed on to heirs to create an aristocratic class who inherit their status -- something the US founders were explicitly trying to avoid when founding the country. Unfortunately, the wealthy have found ways of subverting their intent.
[1] - For an example, see the excellent Born Rich documentary, made by one of the heirs to the Johnson and Johnson fortune, where he interviews all his friends, who were also born in to extremely wealthy families.
The rich and powerful also tend to associate mostly with their own kind, which will skew their world view and priorities.[1]
The unspent money can also be used as collateral or leverage to earn more money.
Finally, the unspent money can be passed on to heirs to create an aristocratic class who inherit their status -- something the US founders were explicitly trying to avoid when founding the country. Unfortunately, the wealthy have found ways of subverting their intent.
[1] - For an example, see the excellent Born Rich documentary, made by one of the heirs to the Johnson and Johnson fortune, where he interviews all his friends, who were also born in to extremely wealthy families.
Wealth provides power. This is obvious. It doesn't answer the question of how the poor are going to gain from these taxes.
Democracy. I'm actually fairly happy with how government operates for the most part. If you take issue, get involved. Complaining is free, but not impactful.
This is a discussion forum. How is the government going to solve wealth disparity with more money?
Labor regulations (an example would be increasing the minimum wage, $15 an hour gets thrown around and would provide workers with a living wage). Universal healthcare, preventing destitution from medical expenses and increasing worker mobility. Subsidized education preventing the need to go tens of thousands of dollars into debt for a degree employers can require at no cost to themselves. Big fan of a Green New Deal; the country needs a massive infrastructure overhaul, and it'd provide quality jobs to participants.
You squeeze more from capital (who has been raking labor over the coals for the last 40 years) for labor. What's capital going to do, leave the country? We'll tax it on the way out, and we still get to keep the market if you want access to it from the outside.
Disclaimer: My politics are firmly in the democratic socialist camp. Allow success, but not too much, and make failure cheaper and less painful.
You squeeze more from capital (who has been raking labor over the coals for the last 40 years) for labor. What's capital going to do, leave the country? We'll tax it on the way out, and we still get to keep the market if you want access to it from the outside.
Disclaimer: My politics are firmly in the democratic socialist camp. Allow success, but not too much, and make failure cheaper and less painful.
"an example would be increasing the minimum wage, $15 an hour gets thrown around and would provide workers with a living wage"
Not in most of California or any other 'wealthy' state, it wouldn't. I know people making $18/hr and more than half of their post-tax income is going to rent ALONE.
Not in most of California or any other 'wealthy' state, it wouldn't. I know people making $18/hr and more than half of their post-tax income is going to rent ALONE.
Super HCOL locations aside, it’s a solid start for most of America.
When wages increase, so do prices. Happens every time. So I really don't think that's a solid start for America, at all.
No, unfortunately for that idea raising the minimum wage simply raises the cost of living commensurately.
That has not been born out in data from Seattle and Washington DC where the minimum wage has been raised.
All of those things can be done with the money we have now, while probably costing less. Taxes and insurance are already socialist. I see no point in "democratic socialism" that isn't just better spending like I talked about, outside of some extreme views on limiting wealth.
My point remains that if these policies don't change now, more taxes will change nothing while concentrating more money/power into a few political hands that have proven to be bad at spending it.
My point remains that if these policies don't change now, more taxes will change nothing while concentrating more money/power into a few political hands that have proven to be bad at spending it.
[deleted]
Having a disproportionate amount of wealth while others can't even meet basic physical needs in the same country.
How is that a loophole? Wealth inequality is inevitable in any society.
The problem is how govt spends money, not how much it collects.
The problem is how govt spends money, not how much it collects.
What’s the link between those two?
And how does taking money from the billionaire help the people that can’t meet physical needs?
And how does taking money from the billionaire help the people that can’t meet physical needs?
Yes, but how? I agree and have spent a lot of (essentially useless) time on thinking about that, but this is complex unless you are a despot.
If we have no privacy left, you monitor all that you do on any foreign or local card/transfer etc (you ban crypto and put insanely high fines/prison on using it) and if that seems not to match what you reported as income/capgains/etc, you get an audit. What is the point of being rich and evading taxes if you cannot spend it? And if you move it to foundations etc, at least you cannot get to it, nor can you family if they live in this (fictional?) country as they would have to explain the same things.
In a society (probably a democracy?) where people value privacy and non-draconian laws, I cannot figure out how to make this work. Besides having educated and patriot people who actually would choose to pay taxes for the greater good. But these people do not start on their own (Bill Gates example of not minding to pay more tax) and they usually believe they can do better things with their money (for humanity). And that is usually not the case or way too biased; their right if taxing is paid fairly, but if evading, a problem.
If we have no privacy left, you monitor all that you do on any foreign or local card/transfer etc (you ban crypto and put insanely high fines/prison on using it) and if that seems not to match what you reported as income/capgains/etc, you get an audit. What is the point of being rich and evading taxes if you cannot spend it? And if you move it to foundations etc, at least you cannot get to it, nor can you family if they live in this (fictional?) country as they would have to explain the same things.
In a society (probably a democracy?) where people value privacy and non-draconian laws, I cannot figure out how to make this work. Besides having educated and patriot people who actually would choose to pay taxes for the greater good. But these people do not start on their own (Bill Gates example of not minding to pay more tax) and they usually believe they can do better things with their money (for humanity). And that is usually not the case or way too biased; their right if taxing is paid fairly, but if evading, a problem.
lidHanteyk(7)
It could be that some "egotistical and powerful" people think they can do something more meaningful with the money than the U.S. government would.
I'm reminded of the John Carmack article on Government and Taxes.
"So much of the government just grinds up money, like shoveling cash into a wood chipper."
It's worth reading (sorry can't find a better link, use this link and click to expand the first comment)
https://www.riverdavesplace.com/forums/threads/entreprenuer-...
I'm reminded of the John Carmack article on Government and Taxes.
"So much of the government just grinds up money, like shoveling cash into a wood chipper."
It's worth reading (sorry can't find a better link, use this link and click to expand the first comment)
https://www.riverdavesplace.com/forums/threads/entreprenuer-...
[deleted]
The Gates Foundation is definitely better than running a pedo island or putting up another building in Harvard, but whether it's outcomes are better than anyone else is not clear - https://www.forbes.com/sites/williammeehan/2019/10/25/philan...
[deleted]
Easy game : Tax the foundation. Everybody knows these foundations are a way to avoid tax and keep wealth intact.
Bill Gates also said he'd be willing to double the amount of taxes he currently pays, but you won't see that headline anywhere.
Maybe not the headline but it's right in TFA.
How generous. That would bring him in line with what his secretary probably pays[1].
[1] https://money.cnn.com/2013/03/04/news/economy/buffett-secret...
[1] https://money.cnn.com/2013/03/04/news/economy/buffett-secret...
In percentage terms? You realize Bill Gates literally has a multi-million dollar tax bill every year, right?
Even if you cheat taxes egregiously, and even if your effective federal tax rate is only 15% -- when you have $70Bn in wealth, your income (cheated to extremes) is still going to be at least in the hundreds of millions. 15% of that is still 10s of millions of dollars.
And as others pointed out, if you're going to pick fights with billionaires, Bill Gates probably isn't the best place to start. You would be hard pressed to convince many people here he's been a net-negative to human civilization.
Even if you cheat taxes egregiously, and even if your effective federal tax rate is only 15% -- when you have $70Bn in wealth, your income (cheated to extremes) is still going to be at least in the hundreds of millions. 15% of that is still 10s of millions of dollars.
And as others pointed out, if you're going to pick fights with billionaires, Bill Gates probably isn't the best place to start. You would be hard pressed to convince many people here he's been a net-negative to human civilization.
20% is long term capital gains rate if you make more than $453k
You realize you're talking about one of the highest-impact philanthropists in modern history, right?
> You realize you're talking about one of the highest-impact philanthropists in modern history, right?
Being a philanthropist shouldn't justify a low tax rate.
Being a philanthropist shouldn't justify a low tax rate.
He is paying taxes, and even agrees with paying more.
That's just it; you can never placate people who want to expropriate everything (or close to everything) from others. It's just never enough.
Attempts to tax people at 70% in France (even if it was marginal tax) went south very quickly. Incentive matters a lot because good work is really really hard.
Funny enough Gates seemed alluded to this on some interview I watched a while back.
Attempts to tax people at 70% in France (even if it was marginal tax) went south very quickly. Incentive matters a lot because good work is really really hard.
Funny enough Gates seemed alluded to this on some interview I watched a while back.
His secretary pays $20 billion?
I don't see why people keep making this same point; yes, Bill Gates pays a higher number of dollars in taxes, but the argument is the tax rate, and saying otherwise seems like you're being purposefully ignorant.
If a man who already pays more money in taxes than I'll ever see in my lifetime is willing to DOUBLE that amount, it should be commended. If he's not willing to pay 10X that amount, I have little problem with that.
1) Bill Gates knows damn well that it wouldn't be paying 100 billion dollars in the Warren tax plan; he's not an idiot. He's trying to poison the well.
2) Sure, I'm glad Bill Gates is willing to double that amount. Fun fact, Mr Gates, you don't have to wait until a tax is implemented, if you really think that way, you can donate money straight to the government: [0]
3) Taxes, at least in my lifetime, have always been a tax rate, not a number-of-dollars paid thing. If Jeff Bezos made 20 billion dollars last year, and paid only 1 billion in taxes, that would be a 5% tax rate. Living in NY, depending on my expenses and deductions, I pay upwards of 40% of my income in taxes. Yes, in one year, Bezos would have paid more to the tax pool than I ever would have, but it seems incredibly unfair that a person who has so much would be forced to give comparatively so little, especially since wealth hoarders could also afford to give a substantially higher percentage of their income without an appreciable quality of life change.
Granted, I know Bill Gates is, by wealth-hoarder standards, not too bad a guy. I don't think anyone here is arguing that he is, but come on; even if his dishonest framing of "being taxed 100 billion dollars" was true, which it isn't, it's not like his life would even change that much; he'd still be worth billions, he'd still have more money than he knows what to do with, he'd still be able to live a life of luxury on bank interest. Forgive me for not crying over his plight.
[0] https://fiscal.treasury.gov/public/gifts-to-government.html
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EDIT: The 20 billion Bezos thing is a contrived example. I do not know the tax rate for billionaires in NY; it was more a direct response to the "paid more in taxes than I'll ever pay" comment.
2) Sure, I'm glad Bill Gates is willing to double that amount. Fun fact, Mr Gates, you don't have to wait until a tax is implemented, if you really think that way, you can donate money straight to the government: [0]
3) Taxes, at least in my lifetime, have always been a tax rate, not a number-of-dollars paid thing. If Jeff Bezos made 20 billion dollars last year, and paid only 1 billion in taxes, that would be a 5% tax rate. Living in NY, depending on my expenses and deductions, I pay upwards of 40% of my income in taxes. Yes, in one year, Bezos would have paid more to the tax pool than I ever would have, but it seems incredibly unfair that a person who has so much would be forced to give comparatively so little, especially since wealth hoarders could also afford to give a substantially higher percentage of their income without an appreciable quality of life change.
Granted, I know Bill Gates is, by wealth-hoarder standards, not too bad a guy. I don't think anyone here is arguing that he is, but come on; even if his dishonest framing of "being taxed 100 billion dollars" was true, which it isn't, it's not like his life would even change that much; he'd still be worth billions, he'd still have more money than he knows what to do with, he'd still be able to live a life of luxury on bank interest. Forgive me for not crying over his plight.
[0] https://fiscal.treasury.gov/public/gifts-to-government.html
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EDIT: The 20 billion Bezos thing is a contrived example. I do not know the tax rate for billionaires in NY; it was more a direct response to the "paid more in taxes than I'll ever pay" comment.
He's paid more in taxes than probably any other citizen of the country.
And the Gates Foundation is indeed generous with how much impact it's had.
And the Gates Foundation is indeed generous with how much impact it's had.
Wealth taxes have issues. Wikipedia:
>In 2004, a study by the Institut de l'enterprise investigated why several European countries were eliminating wealth taxes and made the following observations: 1. Wealth taxes contributed to capital drain, promoting the flight of capital as well as discouraging investors from coming in. 2. Wealth taxes had high management cost and relatively low returns. 3. Wealth taxes distorted resource allocation, particularly involving certain exemptions and unequal valuation of assets. In its summary, the institute found that the "wealth taxes were not as equitable as they appeared"
>In 2004, a study by the Institut de l'enterprise investigated why several European countries were eliminating wealth taxes and made the following observations: 1. Wealth taxes contributed to capital drain, promoting the flight of capital as well as discouraging investors from coming in. 2. Wealth taxes had high management cost and relatively low returns. 3. Wealth taxes distorted resource allocation, particularly involving certain exemptions and unequal valuation of assets. In its summary, the institute found that the "wealth taxes were not as equitable as they appeared"
What seems to pass many (smart) people, is that fundamentally an interest-based economy like we have today is going to lead to these large gaps in inequality due to the predatory nature of interest. Instead of trying to patch the situation with different taxes, people should work on moving away from an interest-based economy into a system that is based on risk/reward sharing.
Why would a wealth tax be a bad thing?
> Why would a wealth tax be a bad thing?
Valuing assets is complicated; for some assets, it's impossible. Furthermore, selling assets is complicated; for some assets, it's impossible.
That is the logic behind taxing transactions. The only time we know what something is worth is at the instant it transacts. About the only time we know how liquid something is, is at the instant it transacts.
For a facile example, consider the founder of a private company. They now have to sell 2% of their position each year, every year. That's a lot of work! And it gets worse if one considers a bootstrapped business, where there aren't lots of shareholders to sell to and there isn't a 409A valuation.
Valuing assets is complicated; for some assets, it's impossible. Furthermore, selling assets is complicated; for some assets, it's impossible.
That is the logic behind taxing transactions. The only time we know what something is worth is at the instant it transacts. About the only time we know how liquid something is, is at the instant it transacts.
For a facile example, consider the founder of a private company. They now have to sell 2% of their position each year, every year. That's a lot of work! And it gets worse if one considers a bootstrapped business, where there aren't lots of shareholders to sell to and there isn't a 409A valuation.
The math becomes interesting with the Warren's proposed 6% tax for billionaires. After 12 years, the founder will have lost half the ownership of the company [ (1-0.06)^12 ].
There are some proposals for the owner valuing the company or giving the government shares in the company in lieu of cash. However, if you do that, within 15 years, the government will have a controlling stake in every pretty much every private company.
There are some proposals for the owner valuing the company or giving the government shares in the company in lieu of cash. However, if you do that, within 15 years, the government will have a controlling stake in every pretty much every private company.
> the government will have a controlling stake in every pretty much every private company.
Oh, that never goes wrong...
Oh, that never goes wrong...
Well of course that's the not so well hidden goal... If the government controls everything, then everyone can be equal!
I heard about an interesting way to efficiently valuate vastly diverse assets: have the owners valuate them themselves.
With the twist that the state has the right to buy the asset at that validation.
That incentives the owners to be as precise as possible with their valuation, as they otherwise would either pay too much tax, or run the risk to have to sell property at a loss.
> have the owners valuate them themselves. With the twist that the state has the right to buy the asset at that validation
This was used in ancient Athens [1]: "By the procedure known as antidosis a person who was appointed to perform a liturgy could challenge another he considered better able to afford the expense....the challenged person either had to take over the liturgy or to accept an exchange of property with the instigator of the procedure."
It was a private system, i.e. the payer and challenger were individual Athenians. Neither party was the state. (If it's done automatically, it's easily gamed. Own a Superfund site? Value it at $1 and put it to the state. Have a buddy in government? Great! They just bought your WeWork shares at a $47bn valuation.)
Given the history of civil asset forfeiture in America, we'd want to think twice before enumerating this power to the executive branch.
[1] https://www.tandfonline.com/doi/pdf/10.1080/03585522.1992.10...
This was used in ancient Athens [1]: "By the procedure known as antidosis a person who was appointed to perform a liturgy could challenge another he considered better able to afford the expense....the challenged person either had to take over the liturgy or to accept an exchange of property with the instigator of the procedure."
It was a private system, i.e. the payer and challenger were individual Athenians. Neither party was the state. (If it's done automatically, it's easily gamed. Own a Superfund site? Value it at $1 and put it to the state. Have a buddy in government? Great! They just bought your WeWork shares at a $47bn valuation.)
Given the history of civil asset forfeiture in America, we'd want to think twice before enumerating this power to the executive branch.
[1] https://www.tandfonline.com/doi/pdf/10.1080/03585522.1992.10...
Who in the government is going to decide which assets to buy from wealthy individuals?
This system seems ripe for abuse in the form of the owners overvaluing their assets and having corrupt/coopted government functionaries rubber stamping their purchase (and likely getting rewarded for it in some way by the owners who just made a huge profit at the government's expense).
This system seems ripe for abuse in the form of the owners overvaluing their assets and having corrupt/coopted government functionaries rubber stamping their purchase (and likely getting rewarded for it in some way by the owners who just made a huge profit at the government's expense).
[deleted]
> Valuing assets is complicated; for some assets, it's impossible.
And yet you can insure most assets against destruction and theft.
And yet you can insure most assets against destruction and theft.
Well, we can create a wealth tax that doesn't have that problem. I'd wager there aren't many billionaires who actually are primarily invested in illiquid assets. I'd say the larger objection is the principle that we shouldn't be multiply taxing people. A wealth tax basically means re-taxing the same wealth every year.
> we can create a wealth tax that doesn't have that problem
It's fundamental to the problem of valuation, so probably not.
> there aren't many billionaires who actually are primarily invested in illiquid assets
Most assets are illiquid, e.g. real estate.
To be clear, as a capital-markets guy, I love the idea of forcing more of the economy into the financial system. But as an American, it's totally unnecessary. Increase the take on transactions and remove the loopholes. Taxing wealth just creates artificial transactions to be taxed.
It's fundamental to the problem of valuation, so probably not.
> there aren't many billionaires who actually are primarily invested in illiquid assets
Most assets are illiquid, e.g. real estate.
To be clear, as a capital-markets guy, I love the idea of forcing more of the economy into the financial system. But as an American, it's totally unnecessary. Increase the take on transactions and remove the loopholes. Taxing wealth just creates artificial transactions to be taxed.
Most assets might be illiquid but that's not the same thing as most billionaire's assets being illiquid, and I said, we can create a wealth tax that doesn't have that problem. Particularly, if you look at the tech billionaires I'd wager none of them are primarily invested in real estate. Hell, if you want to be simple about it, you can just take whatever proportion you want to take and auction it.
There are obviously difficulties with valuations, but that doesn't make it impossible to have a wealth tax. Take Bezos, we can just take whatever proportion of AMZN stock he has, take the market value, and calculate the proportion to be handed over.
The thing you seem to be missing about a wealth tax is that it's not about taxing $17.02 or $17.03. It's about taxing $7Bn, and if you only get £6bn this year, well you're going to get more next year. It's so aggressively redistributive that the details actually don't matter as much as you expect.
The thing you seem to be missing about a wealth tax is that it's not about taxing $17.02 or $17.03. It's about taxing $7Bn, and if you only get £6bn this year, well you're going to get more next year. It's so aggressively redistributive that the details actually don't matter as much as you expect.
I'd wager there aren't many billionaires who actually are primarily invested in illiquid assets.
If that's true now, it sure won't be true for long after you pass the tax!
If that's true now, it sure won't be true for long after you pass the tax!
Exactly,
One BillG example is, how does one value his da Vinci assets? For one, the Codex Leicester:
https://en.m.wikipedia.org/wiki/Codex_Leicester
https://en.m.wikipedia.org/wiki/Codex_Leicester
From your link
>The manuscript currently holds the record for the second highest sale price of any book, as it was sold to Bill Gates at Christie's auction house on 11 November 1994 in New York for US$30,802,500 (equivalent to $53,222,898.79 as of 2019)
Sale value indexed to inflation wouldn't be a bad idea.
>The manuscript currently holds the record for the second highest sale price of any book, as it was sold to Bill Gates at Christie's auction house on 11 November 1994 in New York for US$30,802,500 (equivalent to $53,222,898.79 as of 2019)
Sale value indexed to inflation wouldn't be a bad idea.
[deleted]
Here's a thought experiment: You're a HN reader. You have had ideas to build a startup that can help the world solve a problem.
So you create it. You decide to fundraise, and that capital will help you succeed. You pay yourself a salary of $100,000/year, and put everything else into the company.
You raise $4 MM in a seed round, valuing your company at $20MM.
10-months later, your company is doubling growth YoY again, has a solid SAAS model, and low churn. You decide to raise again.
This time, you raise some more money for your company, and you're now valued at 70MM.
About a year later, you're growing just as fast -- but you see a new competitor is entering the ranks. It's time to scale even faster. So you go and raise again. In a fantastic series-B round, spread across TechCrunch and HN, you raise again, at a $200 MM valuation.
As the sole founder, you now own 50% of the company -- making you worth $100MM. Your salary has remained constant at $100,000/year though.
And then the wealth tax hits.
The new wealth tax says you're responsible to pay an annual tax of 2% on all assets over $50MM. Starting this year.
Which means that you, as a private founder with no liquid assets, are now responsible for $50MM * 2% = $1MM in taxes this year.
Even though your liquid income is $100,000, and you have barely that much in your bank account -- you need to come up with $1,000,000 in liquid cash this year. And since your valuation probably won't go down, it'll be at least that much, every year, for the rest of your life, until you shutter the company.
So you go and try to liquidate your shares. But unfortunately, it's not a public company --- and it's not that easy finding private secondary-market buyers willing to buy the half of the founder's entire stake.
So what do you do now?
As far as I can tell, this is how the wealth tax would work for startup founders.
So you create it. You decide to fundraise, and that capital will help you succeed. You pay yourself a salary of $100,000/year, and put everything else into the company.
You raise $4 MM in a seed round, valuing your company at $20MM.
10-months later, your company is doubling growth YoY again, has a solid SAAS model, and low churn. You decide to raise again.
This time, you raise some more money for your company, and you're now valued at 70MM.
About a year later, you're growing just as fast -- but you see a new competitor is entering the ranks. It's time to scale even faster. So you go and raise again. In a fantastic series-B round, spread across TechCrunch and HN, you raise again, at a $200 MM valuation.
As the sole founder, you now own 50% of the company -- making you worth $100MM. Your salary has remained constant at $100,000/year though.
And then the wealth tax hits.
The new wealth tax says you're responsible to pay an annual tax of 2% on all assets over $50MM. Starting this year.
Which means that you, as a private founder with no liquid assets, are now responsible for $50MM * 2% = $1MM in taxes this year.
Even though your liquid income is $100,000, and you have barely that much in your bank account -- you need to come up with $1,000,000 in liquid cash this year. And since your valuation probably won't go down, it'll be at least that much, every year, for the rest of your life, until you shutter the company.
So you go and try to liquidate your shares. But unfortunately, it's not a public company --- and it's not that easy finding private secondary-market buyers willing to buy the half of the founder's entire stake.
So what do you do now?
As far as I can tell, this is how the wealth tax would work for startup founders.
Here's a thought experiment. A million people read HN every day. Maybe one of them will go on to have this problem.
Meanwhile, inequality is stifling global growth and leading to protests that lead to riots that are starting to look like civil wars in several countries around the world.
But, you know, let's all pretend like we're future billionaires and only think about the future and not the present.
P.S. -- I'm sure there would be no less than 3 startups that would attempt to solve this problem if it ever materializes (which it won't because everybody in the US thinks they're a future billionaire).
Meanwhile, inequality is stifling global growth and leading to protests that lead to riots that are starting to look like civil wars in several countries around the world.
But, you know, let's all pretend like we're future billionaires and only think about the future and not the present.
P.S. -- I'm sure there would be no less than 3 startups that would attempt to solve this problem if it ever materializes (which it won't because everybody in the US thinks they're a future billionaire).
> which it won't because everybody in the US thinks they're a future billionaire
Well clearly not everyone in the US thinks that, or this plan would have literally 0% support; I live in the US and have no delusions of becoming a billionaire in this lifetime and I also support something akin to Warren's wealth tax (and would like to think that I could continue to even if I did somehow magically become a billionaire).
I don't think it can be simply reduced to "every American thinks they're going to be rich". I think a lot of Americans have this Ayn-Randian idea that billionaires truly "earned" their money, and that wealth-hoarders are a lot smarter (or better) than they are, and as a result deserve to keep their wealth, even at the expense of everyone else.
But I have issues with lumping together Americans like that; we're a pretty diverse country, with a pretty diverse set of opinions on tax policies.
Well clearly not everyone in the US thinks that, or this plan would have literally 0% support; I live in the US and have no delusions of becoming a billionaire in this lifetime and I also support something akin to Warren's wealth tax (and would like to think that I could continue to even if I did somehow magically become a billionaire).
I don't think it can be simply reduced to "every American thinks they're going to be rich". I think a lot of Americans have this Ayn-Randian idea that billionaires truly "earned" their money, and that wealth-hoarders are a lot smarter (or better) than they are, and as a result deserve to keep their wealth, even at the expense of everyone else.
But I have issues with lumping together Americans like that; we're a pretty diverse country, with a pretty diverse set of opinions on tax policies.
I think that's a big part of it, the "they earned it" bit. I think there are two other problems: people don't realize what the government does for them -- this is the problem of the "submerged state" -- and people think that government spending is, by default, wasteful.
Having seen the inner workings of a number of large companies (think Intel-sized), I'm quite confident that waste is almost always more a function of organizational size than sector; there are efficient government bureaucracies, and wasteful ones. Same for anything big beyond a certain scale.
A third thing I think is lost on a lot of people is what the impacts of wealth disparity are on the citizenry, and this is stuff that doesn't always have an immediately visible line connecting the two. But, one thing off the top of my head, public health in countries with greater wealth disparity tends to be worse.
There's more, and I'll edit the comment to provide more examples later, gotta run for now.
Having seen the inner workings of a number of large companies (think Intel-sized), I'm quite confident that waste is almost always more a function of organizational size than sector; there are efficient government bureaucracies, and wasteful ones. Same for anything big beyond a certain scale.
A third thing I think is lost on a lot of people is what the impacts of wealth disparity are on the citizenry, and this is stuff that doesn't always have an immediately visible line connecting the two. But, one thing off the top of my head, public health in countries with greater wealth disparity tends to be worse.
There's more, and I'll edit the comment to provide more examples later, gotta run for now.
Most of that million works at companies that started out years ago as one ambitious person's dream of becoming rich. It's a long pipeline and the chance of getting through is tiny, but that's how the economy works. If you eliminate that incentive, you will surely enjoy a short-term boost followed by a global economic decline that will be much harder to fix.
I genuinely do not think that I'll ever be worth a billion dollars in my life, and yet I still come to work every day. I also try and build cool new projects for fun.
Maybe I'm am outlier, but I doubt it; I think most people understand that the billionaire thing is a pipe-dream, and they work every day to pay their bills and if you're lucky to also work on stuff you're interested in. How exactly would that be affected by lowering the wealth-hoarding you're allowed to do?
Maybe I'm am outlier, but I doubt it; I think most people understand that the billionaire thing is a pipe-dream, and they work every day to pay their bills and if you're lucky to also work on stuff you're interested in. How exactly would that be affected by lowering the wealth-hoarding you're allowed to do?
[deleted]
Would we have more startups if Jeff Bezos were a Trillionaire instead of a Billionaire? You need to pay attention to the economics behind this, there is no evidence that people are aiming to earn $7Bn but wouldn't have bothered if they thought they'd only get $1Bn.
Exactly. If you were a new startup founder in this environment, wouldn't you likely do ANYTHING to not have a valuation >$49MM? Probably deciding not to raise more funding, not to scale, not to grow and help others.
I think that the side effects of a wealth tax might just end VC investing in high valuation companies altogether. I don't know if many people on HN see that as a positive.
I think that the side effects of a wealth tax might just end VC investing in high valuation companies altogether. I don't know if many people on HN see that as a positive.
I thought Warren's tax plan was the wealth over $50 million. Meaning that if you were worth $51 million, only one million would be taxed at 2%, meaning $20,000 would be payed.
The trouble with picking an arbitrary number like 50 million is the slippery slope it creates. Today we start with 2% over $50m. Tomorrow we will see a report that lowering it to $40m will help fund health care/fund climate change/(plug any socially acceptable agenda here) and the change will be voted in. A few decades after we'll wake up in an economy that will tax you heavily unless you're sharing your condo with your parents and a grandma [0] because someone has decided that it's an acceptable level of wealth.
[0] Anecdotal, but that was the way to get an apartment for my parents' generation back in Soviet Union and I really don't want to see it here again.
[0] Anecdotal, but that was the way to get an apartment for my parents' generation back in Soviet Union and I really don't want to see it here again.
Yes, I believe that's correct.
Well then I doubt it would be this apocalyptic thing of people trying to be worth $49,999,999.99, since being worth $50,000,001.00 would only give them an increased tax of $0.02.
I think most people would still be willing to keep working on stuff, and I don't see why VCs would stop investing in high-value companies altogether.
I think most people would still be willing to keep working on stuff, and I don't see why VCs would stop investing in high-value companies altogether.
> Meanwhile, inequality is stifling global growth and leading to protests that lead to riots that are starting to look like civil wars in several countries around the world.
This is patching one problem with another. The underlying economic system that is based on interest is playing a big role in this inequality. Instead of patching by adding more weird and unjust taxes, people should move away from an interest based economy.
This is patching one problem with another. The underlying economic system that is based on interest is playing a big role in this inequality. Instead of patching by adding more weird and unjust taxes, people should move away from an interest based economy.
If you cannot find a buyer who will take a cut of a $50MM valuation, then the company is in fact worthless. Liquidity is no barrier to this — there are plenty of financial instruments available to do this transaction, even if you can't actually transfer the asset itself. Taking on debt, for example.
Yes, it sucks, but forgive me if I don't shed a tear for someone who has to find a way to pay taxes on their $50M of assets. They absolutely do have options which aren't terrible.
If a "wealth tax" did pass, then expect countless startups who specialize in handling the arbitrage of this.
Yes, it sucks, but forgive me if I don't shed a tear for someone who has to find a way to pay taxes on their $50M of assets. They absolutely do have options which aren't terrible.
If a "wealth tax" did pass, then expect countless startups who specialize in handling the arbitrage of this.
Relevant reading: https://www.cato.org/publications/commentary/why-europe-axed...
Before repeal, European wealth taxes — with a variety of rates and bases — tended to raise only about 0.2 percent of gross domestic product in revenue, based on Organization for Economic Cooperation and Development data. That is only 1/40th as much as the U.S. federal income tax raises.
Yet for little revenue, wealth taxes are difficult to administer and enforce. They may require taxpayers to report the values of financial securities, homes, furniture, artwork, jewelry, antiques, vehicles, boats, pension rights, family businesses, farm assets, land, intellectual property, and much else. But owners do not know the market values of many assets, and values change over time, so costly wealth-tax compliance would only make accountants wealthy.
And what about wealth held abroad? There is no way the Internal Revenue Service would be able to track down and value everything U.S. residents owned on a global basis.
And here’s the kicker: Since the base of wealth taxes is net wealth, debt is deductible. That allowed wealthy Europeans to jack up their borrowing and invest in the exempted assets to shrink their tax bases. If a wealth tax were imposed in the United States, the farm lobby would most certainly get farmland excluded. Then rich people would borrow heavily and invest in farmland, thus shrinking the tax base and distorting the economy.
Before repeal, European wealth taxes — with a variety of rates and bases — tended to raise only about 0.2 percent of gross domestic product in revenue, based on Organization for Economic Cooperation and Development data. That is only 1/40th as much as the U.S. federal income tax raises.
Yet for little revenue, wealth taxes are difficult to administer and enforce. They may require taxpayers to report the values of financial securities, homes, furniture, artwork, jewelry, antiques, vehicles, boats, pension rights, family businesses, farm assets, land, intellectual property, and much else. But owners do not know the market values of many assets, and values change over time, so costly wealth-tax compliance would only make accountants wealthy.
And what about wealth held abroad? There is no way the Internal Revenue Service would be able to track down and value everything U.S. residents owned on a global basis.
And here’s the kicker: Since the base of wealth taxes is net wealth, debt is deductible. That allowed wealthy Europeans to jack up their borrowing and invest in the exempted assets to shrink their tax bases. If a wealth tax were imposed in the United States, the farm lobby would most certainly get farmland excluded. Then rich people would borrow heavily and invest in farmland, thus shrinking the tax base and distorting the economy.
Then tax capital revenues like dividends, benefits, and the like.
1. Why wouldn’t a private secondary market appear in response to the need for wealth tax share liquidation? It seems little different from a venture capital operation.
2. If you are worth $100MM you should be able to borrow 1% annually of your net worth until you can liquidate your shares.
2. If you are worth $100MM you should be able to borrow 1% annually of your net worth until you can liquidate your shares.
Couldn't you get a bank to loan you the money with your shares as collateral?
What you do is what all the billionaires do: take out loans backed by you assets rather than sell equity.
In this scenario the banks start profiting from startups, probably more in interest than the govt will get taxes.
In this scenario the banks start profiting from startups, probably more in interest than the govt will get taxes.
Because it will create a major incentive to take your money out of the economy and move it to a different jurisdiction that doesn't want a piece of it.
Do we even need a wealth tax?
Whatever you have you have already paid taxes on - why does the government need to take more?
Whatever you have you have already paid taxes on - why does the government need to take more?
To fund education and to avoid people to be crippled by college debts at 24.
To fund healthcare and to avoid diabetics to go bankrupt and die because they saved on insulin shot ; or all the people who have to take a second mortgage for basic cancer treatment, if they can, and finally go also bankrupt.
To fund crippling public infrastructure and investment.
To fund cultural events and promote art and diversity beside that culturaly dead hollywood movies pipeline ; scientific research ; libraries ; promote intelligent television programming not only motivated by a quick buck by pushing deep in your throat stupid ads for Coca-Cola and their fake, Mac Donald and other companies responsible for promoting detrimental products for health or envirronement ; to fund compagn to raise awareness on foundamental issues like global warming and stop the spread of misinformation by corporate chills or religious nutjobs.
The list go on and on...
All these public expense are the source of wealth redistribution.
To fund healthcare and to avoid diabetics to go bankrupt and die because they saved on insulin shot ; or all the people who have to take a second mortgage for basic cancer treatment, if they can, and finally go also bankrupt.
To fund crippling public infrastructure and investment.
To fund cultural events and promote art and diversity beside that culturaly dead hollywood movies pipeline ; scientific research ; libraries ; promote intelligent television programming not only motivated by a quick buck by pushing deep in your throat stupid ads for Coca-Cola and their fake, Mac Donald and other companies responsible for promoting detrimental products for health or envirronement ; to fund compagn to raise awareness on foundamental issues like global warming and stop the spread of misinformation by corporate chills or religious nutjobs.
The list go on and on...
All these public expense are the source of wealth redistribution.
> To fund education and to avoid people to be crippled by college debts at 24
Why are people crippled by college debts at 24?
Why are people crippled by college debts at 24?
Let me rephrase: why is punishing people for success a bad thing? Because it rewards mediocrity.
Where does the money go?
Healthcare, education, infrastructure... all of which badly need funding.
So colleges and hospitals will finally have more administrators than students/patients? ([0], but you can google more). I think, the problem is not the lack of funding, but terrible inefficiency and lack of transparency.
[0] https://www.aei.org/carpe-diem/chart-of-the-day-administrati...
[0] https://www.aei.org/carpe-diem/chart-of-the-day-administrati...
[deleted]
Medicare for all will drastically reduce the amount of administration for health care.
That's a very good question. IIRC, the current mess with inflated medical bills started when Medicare placed caps on some fees that were below the actual cost. So the hospitals had to recover the difference from those who are not covered. This killed transparency, promoting even more cost inflation through bullshit admin positions.
So now it's a tough spot. On once hand, if you apply the Medicare caps universally, many hospitals will go belly up. If you remove the caps and let them bill whatever they want, you will end up with a rapidly growing hole in the budget.
I would say, instead we need a solid system of rules on what you can and cannot bill, some auditing body and a way for the patients to dispute inflated bills at an affordable cost. Whether it goes out-of-pocket or from a tax-filled fund is IMHO not as important as the cost audit/dispute mechanisms.
So now it's a tough spot. On once hand, if you apply the Medicare caps universally, many hospitals will go belly up. If you remove the caps and let them bill whatever they want, you will end up with a rapidly growing hole in the budget.
I would say, instead we need a solid system of rules on what you can and cannot bill, some auditing body and a way for the patients to dispute inflated bills at an affordable cost. Whether it goes out-of-pocket or from a tax-filled fund is IMHO not as important as the cost audit/dispute mechanisms.
> Whether it goes out-of-pocket or from a tax-filled fund is IMHO not as important as the cost audit/dispute mechanisms.
IOW, more administration. Didn't this thread start with a complaint about administrative cost?
There are many examples of successful universal medical systems with different trade-offs that have been refined over the last 50 years. Canada, Britain, Germany, Switzerland, etc. Choose the set of trade-offs you prefer and copy it; reinventing the wheel is likely not going to end well.
IOW, more administration. Didn't this thread start with a complaint about administrative cost?
There are many examples of successful universal medical systems with different trade-offs that have been refined over the last 50 years. Canada, Britain, Germany, Switzerland, etc. Choose the set of trade-offs you prefer and copy it; reinventing the wheel is likely not going to end well.
> So colleges and hospitals will finally have more administrators than students/patients? ([0], but you can google more). I think, the problem is not the lack of funding, but terrible inefficiency and lack of transparency.
This is one of the proposed ways to pay for things like universal health care.
Additionally, your citation (https://www.aei.org/carpe-diem/chart-of-the-day-administrati...) is about public schools, not colleges and hospitals as you suggest.
This is one of the proposed ways to pay for things like universal health care.
Additionally, your citation (https://www.aei.org/carpe-diem/chart-of-the-day-administrati...) is about public schools, not colleges and hospitals as you suggest.
> Healthcare, education, infrastructure... all of which badly need funding.
Education is poorly funded? We spend more per student than any country except Norway as of 2015: https://nces.ed.gov/programs/coe/indicator_cmd.asp
The education system is not poorly funded. The money is poorly and inequitably allocated, and the system is poorly run.
Education is poorly funded? We spend more per student than any country except Norway as of 2015: https://nces.ed.gov/programs/coe/indicator_cmd.asp
The education system is not poorly funded. The money is poorly and inequitably allocated, and the system is poorly run.
> The education system is not poorly funded.
Every SpecialEd teacher and student would politely disagree with you. Not every aspect of education is funded differently, even when factoring i’m better budget management.
Every SpecialEd teacher and student would politely disagree with you. Not every aspect of education is funded differently, even when factoring i’m better budget management.
infrastructure I agree, but we should just move funds to do that. healthcare and education are both already spending way too much on. healthcare is pretty obvious, but education as well we spend more than most other countries
https://www.theguardian.com/us-news/2018/sep/07/us-education...
https://www.theguardian.com/us-news/2018/sep/07/us-education...
> healthcare and education are both already spending way too much on.
Huh? Currently on mobile so I don’t have the CBO file to link but I will when I get to my PC.
Anyway, Healthcare spending is not actually “too much” and instead is too low. When we expanded Medicaid and implemented the ACA, estimated costs were below actual cost by hundreds of billions to one trillion dollars due to the unknown number of people accessing healthcare. Healthcare is the one area in which there is not enough money being spent on lower income brackets and Medicaid/Medicare users.
Huh? Currently on mobile so I don’t have the CBO file to link but I will when I get to my PC.
Anyway, Healthcare spending is not actually “too much” and instead is too low. When we expanded Medicaid and implemented the ACA, estimated costs were below actual cost by hundreds of billions to one trillion dollars due to the unknown number of people accessing healthcare. Healthcare is the one area in which there is not enough money being spent on lower income brackets and Medicaid/Medicare users.
When people say infrastructure they usually mean roads. Roads are perhaps overextended already and making more or bigger roads ends up subsidizing urban sprawl. Anyways, outside of interstates, roads could just be handled entirely at the state or local level and paid for via use taxes. If we are trying to combat global warming, not building more or bigger roads is an easy place to start.
> When people say infrastructure they usually mean roads.
[citation needed]
Granted, I can only speak for myself, but when I hear the word "infrastructure" I'm picturing a smörgåsbord of different things:
- Roads
- Bridges
- Tunnels
- Rail lines
- Canals
- Levees
- Electrical delivery (power lines, distribution boxes, etc.)
- Telecommunications delivery (data lines, radio towers, etc.)
- Fuel delivery (pipelines, refineries, storage, etc.)
- Water delivery (pipelines, aqueducts, reservoirs, wells, desalination plants, etc.)
- etc.
This is consistent with Wikipedia's definition of "hard infrastructure" (as opposed to "soft infrastructure", which focuses on institutional structures/organizations).
[citation needed]
Granted, I can only speak for myself, but when I hear the word "infrastructure" I'm picturing a smörgåsbord of different things:
- Roads
- Bridges
- Tunnels
- Rail lines
- Canals
- Levees
- Electrical delivery (power lines, distribution boxes, etc.)
- Telecommunications delivery (data lines, radio towers, etc.)
- Fuel delivery (pipelines, refineries, storage, etc.)
- Water delivery (pipelines, aqueducts, reservoirs, wells, desalination plants, etc.)
- etc.
This is consistent with Wikipedia's definition of "hard infrastructure" (as opposed to "soft infrastructure", which focuses on institutional structures/organizations).
How does that help people that can’t afford to pay for everyday things?
Just off the top of my head...
By not bankrupting them as soon as they get sick.
By giving them an opportunity to go to college and improve their economic standing without taking on six figures of debt.
By giving them access to affordable reliable public transportation so they don't have to deal with the huge expense of owning a car.
By not bankrupting them as soon as they get sick.
By giving them an opportunity to go to college and improve their economic standing without taking on six figures of debt.
By giving them access to affordable reliable public transportation so they don't have to deal with the huge expense of owning a car.
By providing them a job with a decent living wage.
Why not to the military?
Two of these three things provably don't need even more money poured into them - money just needs to be spent more efficiently. In fact, they'd probably benefit from cutting some of the spending: many bloodsucking intermediaries will fall off and move to something else. Infrastructure could use a funding bump, I agree.
Healthcare, at least in the US, needs about 80 percent less "funding". The whole problem is that costs are out of control. Not that taxpayers are being insufficiently raped.
It would not be. It'd mean the rich are finally paying what they owe for all the externalities they currently get for "free," the rich in America get a free ride by not paying what they owe for what they get access to...
As my econ professors used to say, in America for a long while now, we're in fact a socialist country already... it just happens to be "socialism for the rich."
As my econ professors used to say, in America for a long while now, we're in fact a socialist country already... it just happens to be "socialism for the rich."
[deleted]
The biggest problem with these tax plans is that they're always focused on collecting more money without ever talking about where that money is actually going. The government is absolutely useless at spending it well, and it won't magically get better with even more money.
Wealthy powerful billionaires is a valid issue but there should be a better strategy based on incentives for the greater good beyond just "tax them more". A look at how much the Bill Gates foundation has done proves that wealth can be deployed with positive impact, but sadly it's not something that gets much news.
Wealthy powerful billionaires is a valid issue but there should be a better strategy based on incentives for the greater good beyond just "tax them more". A look at how much the Bill Gates foundation has done proves that wealth can be deployed with positive impact, but sadly it's not something that gets much news.
I believe our society would be healthier if there were only three or four orders of magnitude between the wealth of the richest and poorest households in our nation. Thus taxing billionaires is a Good Thing (TM) regardless of what the money is spent on. What gets done with the proceeds is just icing on the cake.
Money is power, and an over-concentration of power is antithetical to a democratic society. Bill Gates makes a show of his charitable spending, rehabilitating his reputation as a ruthless, unscrupulous empire-builder, meanwhile every year he gets richer.
Money is power, and an over-concentration of power is antithetical to a democratic society. Bill Gates makes a show of his charitable spending, rehabilitating his reputation as a ruthless, unscrupulous empire-builder, meanwhile every year he gets richer.
> I believe our society would be healthier if there were only three or four orders of magnitude between the wealth of the richest and poorest households in our nation. Thus taxing billionaires is a Good Thing (TM) regardless of what the money is spent on.
It’s always about dragging down instead of pulling up
It’s always about dragging down instead of pulling up
>> I believe our society would be healthier if there were only three or four orders of magnitude between the wealth of the richest and poorest households in our nation. Thus taxing billionaires is a Good Thing (TM) regardless of what the money is spent on.
> It’s always about dragging down instead of pulling up
Ok, tell me how you could reduce wealth disparity to only "three or four orders of magnitude" by "pulling up," without doing something daft like printing money and distributing it until the billionaires' wealth is inflated away?
Some real problems are not solvable by win-win solutions.
> It’s always about dragging down instead of pulling up
Ok, tell me how you could reduce wealth disparity to only "three or four orders of magnitude" by "pulling up," without doing something daft like printing money and distributing it until the billionaires' wealth is inflated away?
Some real problems are not solvable by win-win solutions.
Because disparity is not the problem. Raising the standard of living at the bottom is what matters, and putting in proper safeguards so that those at the top cannot greatly interfere in things like government.
Spend better (education, healthcare, etc) while removing money from politics. It would actually cost less and we could lower taxes for once for the rest of us.
Spend better (education, healthcare, etc) while removing money from politics. It would actually cost less and we could lower taxes for once for the rest of us.
> Because disparity is not the problem.
That's debatable. Many people think it is a problem, or at least an undesirable situation.
> Raising the standard of living at the bottom is what matters, and putting in proper safeguards so that those at the top cannot greatly interfere in things like government.
Easier said than done. It may be impossible or impractical to neuter the political power that comes with economic power.
That's debatable. Many people think it is a problem, or at least an undesirable situation.
> Raising the standard of living at the bottom is what matters, and putting in proper safeguards so that those at the top cannot greatly interfere in things like government.
Easier said than done. It may be impossible or impractical to neuter the political power that comes with economic power.
Why would they unless they are suffering at the bottom? How does it actually affect you? Or is it just envy of those who have more?
If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
>> Many people think [massive wealth inequality] is a problem, or at least an undesirable situation.
> Why would they unless they are suffering at the bottom? How does it actually affect you?
You might want to spend some time thinking their alternate perspectives.
> Or is it just envy of those who have more?
Not any more than it being greed that's motivating you to take your positions.
It's generally not very enlightening to take personal swipes like you did there.
> If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
This seems to be hinting at a kind of libertarian worldview that sees the government and politicians as some kind of unaccountable independent power. That's not the only way to think about government, and I'd argue that it's a pretty limited and ultimately unhelpful perspective.
A more democratic perspective is not so opposed to the people gaining more power through their elected representatives.
> Why would they unless they are suffering at the bottom? How does it actually affect you?
You might want to spend some time thinking their alternate perspectives.
> Or is it just envy of those who have more?
Not any more than it being greed that's motivating you to take your positions.
It's generally not very enlightening to take personal swipes like you did there.
> If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
This seems to be hinting at a kind of libertarian worldview that sees the government and politicians as some kind of unaccountable independent power. That's not the only way to think about government, and I'd argue that it's a pretty limited and ultimately unhelpful perspective.
A more democratic perspective is not so opposed to the people gaining more power through their elected representatives.
If you're able to tell me a max level of wealth needed then you can likewise tell me a min level of comfort. So raise people up to that, and then what's the complaint?
I came from a country and living that is far less than anything in the US, and yet billions have it worse. Once you reach a good standard of living, what perspective other than envy is there? And I'm talking about the collective, not you.
> "people gaining more power through their elected representatives"
What does taxes have to do with this? It solves nothing if those politicians continue to spend poorly, as they are now and have been for a very long time. I hear no solutions for this, only claims that somehow more money handed to the govt will fix everything.
I came from a country and living that is far less than anything in the US, and yet billions have it worse. Once you reach a good standard of living, what perspective other than envy is there? And I'm talking about the collective, not you.
> "people gaining more power through their elected representatives"
What does taxes have to do with this? It solves nothing if those politicians continue to spend poorly, as they are now and have been for a very long time. I hear no solutions for this, only claims that somehow more money handed to the govt will fix everything.
> If you're able to tell me a max level of wealth needed then you can likewise tell me a min level of comfort. So raise people up to that, and then what's the complaint?
For a democratic society to really work, it helps that individuals are more or less equal. Don't interpret more or less too rigidly. Past a certain point, economic inequality breeds democratic disfunction and oligarchy.
> Once you reach a good standard of living, what perspective other than envy is there?
That's is a pretty messed up perspective. If a dictator provides you with what he considers a good standard of living; is it envy to want to have some of the power he denies you?
I suspect such accusations of envy are merely a way to defend the status quo by delegitimizing critiques and proposals for change. I'm not saying you're consciously trying to do that.
>>> If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
>> This seems to be hinting at a kind of libertarian worldview that sees the government and politicians as some kind of unaccountable independent power. That's not the only way to think about government, and I'd argue that it's a pretty limited and ultimately unhelpful perspective.
>> A more democratic perspective is not so opposed to the people gaining more power through their elected representatives.
> What does taxes have to do with this?
Some of your questions are getting tedious. I quoted you some of the relative context from the thread, so you can answer your question yourself. It's pretty obvious.
> It solves nothing if those politicians continue to spend poorly, as they are now and have been for a very long time. I hear no solutions for this, only claims that somehow more money handed to the govt will fix everything.
This is hyperbole and a strawman. No one thinks more money will magically fix these problems, but it's pretty clear withholding money from the government has caused problems and will probably prevent the many problems from getting fixed at all. And even if all the money is wasted, there's still some value gained from decreasing inequality through the actions of taxes.
For a democratic society to really work, it helps that individuals are more or less equal. Don't interpret more or less too rigidly. Past a certain point, economic inequality breeds democratic disfunction and oligarchy.
> Once you reach a good standard of living, what perspective other than envy is there?
That's is a pretty messed up perspective. If a dictator provides you with what he considers a good standard of living; is it envy to want to have some of the power he denies you?
I suspect such accusations of envy are merely a way to defend the status quo by delegitimizing critiques and proposals for change. I'm not saying you're consciously trying to do that.
>>> If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
>> This seems to be hinting at a kind of libertarian worldview that sees the government and politicians as some kind of unaccountable independent power. That's not the only way to think about government, and I'd argue that it's a pretty limited and ultimately unhelpful perspective.
>> A more democratic perspective is not so opposed to the people gaining more power through their elected representatives.
> What does taxes have to do with this?
Some of your questions are getting tedious. I quoted you some of the relative context from the thread, so you can answer your question yourself. It's pretty obvious.
> It solves nothing if those politicians continue to spend poorly, as they are now and have been for a very long time. I hear no solutions for this, only claims that somehow more money handed to the govt will fix everything.
This is hyperbole and a strawman. No one thinks more money will magically fix these problems, but it's pretty clear withholding money from the government has caused problems and will probably prevent the many problems from getting fixed at all. And even if all the money is wasted, there's still some value gained from decreasing inequality through the actions of taxes.
The difference is a dictator takes power. In a democratic and capitalist system, there is nothing stopping you from gaining that power for yourself. So what is there other than envy?
Taxes do not give more power to the people, if that's your answer. They concentrate it in the hands of a few, except this time its politicians.
Withholding money from the government is already illegal. The only possibility is an arbitrary judgement that there should be "more" paid, and if more money won't magically solve these problems then why isnt the attention placed no properly spending the money that is collected instead?
But the finance sentence hints at the real purpose - to take from those who have. Inequality isn't the problem. It's proper isolation from power. Money should be removed from politics, not poured into it.
Taxes do not give more power to the people, if that's your answer. They concentrate it in the hands of a few, except this time its politicians.
Withholding money from the government is already illegal. The only possibility is an arbitrary judgement that there should be "more" paid, and if more money won't magically solve these problems then why isnt the attention placed no properly spending the money that is collected instead?
But the finance sentence hints at the real purpose - to take from those who have. Inequality isn't the problem. It's proper isolation from power. Money should be removed from politics, not poured into it.
> The difference is a dictator takes power. In a democratic and capitalist system, there is nothing stopping you from gaining that power for yourself.
lol.
The difference isn't as big as you think. It's just as accurate to say "there's nothing stopping you from toppling a dictator and gaining his power for yourself." You see that it's obviously complicated and difficult to do such a thing, and you're ignoring similar complexities in your statement.
Obviously many barriers prevent a common man from "gaining that power for [himself]." Things like not having the money (e.g. it helps to have money to make money), connections, or luck. These are things that a pull yourself up by the bootstraps capitalist fairy tale can't help with.
> So what is there other than envy?
A desire for democracy rather than aristocracy, for one.
Look, your question is the wrong one. It's clear you've internalized some false beliefs about how fair the current system is, and that prejudices you against those who want to change it. It would suggest you reflect and critically examine those beliefs. I did that, and got over similar beliefs as yours.
> But the finance sentence hints at the real purpose - to take from those who have.
No, that's not the real purpose, just your projection. The real purpose is to help remedy society's problems, and I think it would be beneficial to not to have an aristocracy.
> Inequality isn't the problem. It's proper isolation from power. Money should be removed from politics, not poured into it.
I think I said it before, but that kind of isolation is impossible. It's not the solution.
lol.
The difference isn't as big as you think. It's just as accurate to say "there's nothing stopping you from toppling a dictator and gaining his power for yourself." You see that it's obviously complicated and difficult to do such a thing, and you're ignoring similar complexities in your statement.
Obviously many barriers prevent a common man from "gaining that power for [himself]." Things like not having the money (e.g. it helps to have money to make money), connections, or luck. These are things that a pull yourself up by the bootstraps capitalist fairy tale can't help with.
> So what is there other than envy?
A desire for democracy rather than aristocracy, for one.
Look, your question is the wrong one. It's clear you've internalized some false beliefs about how fair the current system is, and that prejudices you against those who want to change it. It would suggest you reflect and critically examine those beliefs. I did that, and got over similar beliefs as yours.
> But the finance sentence hints at the real purpose - to take from those who have.
No, that's not the real purpose, just your projection. The real purpose is to help remedy society's problems, and I think it would be beneficial to not to have an aristocracy.
> Inequality isn't the problem. It's proper isolation from power. Money should be removed from politics, not poured into it.
I think I said it before, but that kind of isolation is impossible. It's not the solution.
True, money is a form of power. But now you're giving more monetary power to politicians who already have political power. Isn't that concentrating it further into fewer hands?
To state the obvious, in a democracy, politicians are elected, so the power they wield ultimately redounds to the citizenry.
That issue is that even fewer individuals will have more power, which is the single biggest challenge to democracy in the first place.
I'd much prefer taking money out of politics so that large wealth cant influence govt, at least before any changes to taxes.
I'd much prefer taking money out of politics so that large wealth cant influence govt, at least before any changes to taxes.
> The government is absolutely useless at spending it well
Corporations are absolutely useless at spending it well. The government, on the other hand, has a long list of successful projects that required a tremendous of money—the interstate system, the hoover dam, the moon landing, and so on. Are there initiatives that wasted a ton of money? Of course. But look at any major company, and you'll find the same thing. Apple wasted most of a billion dollars on a sapphire plant that couldn't make what they promised, Google bought Motorola for $12 billion and then sold it 2 years later for $3 billion, every company Verizon or Yahoo! bought turned to garbage. The list goes on and on and on.
Corporations are absolutely useless at spending it well. The government, on the other hand, has a long list of successful projects that required a tremendous of money—the interstate system, the hoover dam, the moon landing, and so on. Are there initiatives that wasted a ton of money? Of course. But look at any major company, and you'll find the same thing. Apple wasted most of a billion dollars on a sapphire plant that couldn't make what they promised, Google bought Motorola for $12 billion and then sold it 2 years later for $3 billion, every company Verizon or Yahoo! bought turned to garbage. The list goes on and on and on.
That's a strange way to look at it since the corporations have a much better ratio of wins to losses and have to manage profitability.
Regardless, the issue is government spending, not collection. I don't see how aggregating even more money into a few politicians is somehow going to solve anything, or what difference a few billion will make when the country spends trillions.
Regardless, the issue is government spending, not collection. I don't see how aggregating even more money into a few politicians is somehow going to solve anything, or what difference a few billion will make when the country spends trillions.
It's simple. Fund healthcare, education, earned income tax credits, student loan forgiveness, early childhood education, green energy, carbon sequestration. Fund the IRS so the tax code is enforced for the wealthy as vigorously as it is enforced for the poor. It's not hard to find huge societal wins that can be had with increased spending.
If the answer is as simple as spend more then we wouldn't have any problems since we already spend more (than we have) every year. Pour more billions into a black hole does nothing.
Programs are broken because of how money is spent, not because of how much.
Programs are broken because of how money is spent, not because of how much.
> If the answer is as simple as spend more then we wouldn't have any problems since we already spend more (than we have) every year. Pour more billions into a black hole does nothing.
So... you think that Warren is trying to add funding like a wealth tax, but... has no idea what to spend the money on?
So... you think that Warren is trying to add funding like a wealth tax, but... has no idea what to spend the money on?
That's a non-sequitur. I said the government is bad at allocating and using funds. Do you disagree with that statement? How does poorly spending trillions get fixed by spending a few more billion?
That's the problem. Solve that first, then move on to taxes.
That's the problem. Solve that first, then move on to taxes.
> since the corporations have a much better ration of wins to losses
Citation very much needed. When you look at all of the things that our government successfully runs, and all of the thing that corporations successfully run, I'll stick with governments every time.
Citation very much needed. When you look at all of the things that our government successfully runs, and all of the thing that corporations successfully run, I'll stick with governments every time.
The govt spends more money than it has, and forcefully collects money. Corporations need to make money to stay alive, and must voluntarily get paid.
What does "successfully run" mean? A few major projects have turned out well. But many are failing. Otherwise why the constant need for money cash? What is a few billion going to change that a few trillion didn't?
What does "successfully run" mean? A few major projects have turned out well. But many are failing. Otherwise why the constant need for money cash? What is a few billion going to change that a few trillion didn't?
What are you talking about? everything in this country is privately made
Every storefront, vehicle, food item, article of clothing, the device you are reading this on, is all made and funded privately
Government is a net cost on society
Every storefront, vehicle, food item, article of clothing, the device you are reading this on, is all made and funded privately
Government is a net cost on society
> What are you talking about? everything in this country is privately made
> Every storefront, vehicle, food item, article of clothing, the device you are reading this on, is all made and funded privately
Uh... dude, I got some news for you, about the country you live in.
Uh... dude, I got some news for you, about the country you live in.
We have a system of checks and balances for our social system, but we have quite literally _none_ on our economic system. This inequality of systematic checks and balances on the economy has gradually, but fully, distorted the power structure in America.
Most people in this country don't even understand that democracy and capitalism aren't the same thing... Or that we only ever serve out one of those, and it's factually not democracy. Why is that? Why do we say democracy and mean capitalism?
Now without substantial adjustment to its ability to usurp and control power; it will remain perpetually imbalanced with economic power vastly outweighing the sum of our individual social power.
People in this thread want to talk about how this potential tax isn't fair within the context of a corrupt system. Well, I can't argue against that, it likely isn't fair, but that system itself is exceptionally corrupt. So, to argue it within that context is to already have lost.
This tax is fair because we have no checks and balances on our economy and this would be _the first_. This tax is fair because there are uncountable externalities that these individuals do not pay for and cannot pay for because it would be unreasonable burden for them to calculate it.
If you want to see the swap drain, stop letting the rich fill it. Stop consolidating power into one vertical... Stop pointing at the government and saying "look at how shitty and corrupt it is," because that corruption is fueled by money. Distribute the money, distribute the power, and a lot of this bullshit will fix itself.
... I'm done, this brought my headache back.
Most people in this country don't even understand that democracy and capitalism aren't the same thing... Or that we only ever serve out one of those, and it's factually not democracy. Why is that? Why do we say democracy and mean capitalism?
Now without substantial adjustment to its ability to usurp and control power; it will remain perpetually imbalanced with economic power vastly outweighing the sum of our individual social power.
People in this thread want to talk about how this potential tax isn't fair within the context of a corrupt system. Well, I can't argue against that, it likely isn't fair, but that system itself is exceptionally corrupt. So, to argue it within that context is to already have lost.
This tax is fair because we have no checks and balances on our economy and this would be _the first_. This tax is fair because there are uncountable externalities that these individuals do not pay for and cannot pay for because it would be unreasonable burden for them to calculate it.
If you want to see the swap drain, stop letting the rich fill it. Stop consolidating power into one vertical... Stop pointing at the government and saying "look at how shitty and corrupt it is," because that corruption is fueled by money. Distribute the money, distribute the power, and a lot of this bullshit will fix itself.
... I'm done, this brought my headache back.
LinuxBender(5)
I'm really tired of all these paywalled articles taking up space on the front page.
There are usually ways around the paywall. Try the 'web' link or deleting cookies. What works varies a bit by location.
If you're using Firefox, Temporary Containers is a life saver: https://addons.mozilla.org/en-US/firefox/addon/temporary-con...
Im tired as well, but in another thread I read that you can go into "reader mode" in Safari, and you can read it just fine.
Clear your local storage, sessions, cookies, etc. for that particular domain. Chrome "developer tools" -> "application tab" -> "Clear storage"
[deleted]
The wealth tax is unconstitutional unless the amount collected is apportioned between states in accordance with their census population. Hope there are a bunch of billionaires in West Virginia to carry the load!
> The wealth tax is unconstitutional unless the amount collected is apportioned between states in accordance with their census population.
Or the implementation involves a Constitutional Amendment.
But, sure, just fixing income taxes so that they incorporate the function of payroll taxes within the progressive scheme, and do not favor capital income (but do accommodate irregular income in a manner which is fair by allowing advance and deferred recognition of income to smooth spikes from non-repeated events, which will often involve capital income) is both constitutionally more straightforward and simpler method of shifting the overall tax burden more onto the rich.
Or the implementation involves a Constitutional Amendment.
But, sure, just fixing income taxes so that they incorporate the function of payroll taxes within the progressive scheme, and do not favor capital income (but do accommodate irregular income in a manner which is fair by allowing advance and deferred recognition of income to smooth spikes from non-repeated events, which will often involve capital income) is both constitutionally more straightforward and simpler method of shifting the overall tax burden more onto the rich.
Unless... nothing. There is no power to tax wealth in the Constitution.
I’m not American so sorry if I am being naive but can the constitution not be changed?
It can, but takes a great deal of effort. The bar for a constitutional amendment is much higher than, say, winning an election; this is a good thing, as it prevents the constitution from being re-written every four years. A politician may win a presidential or congressional election, but will not likely convince the other half of the nation to support any such policy. Income tax took a constitutional amendment, so yes, directly seizing money from citizens would take one as well.
It can be but it is incredibly difficult to do so if there is not widespread support for the amendment. A partisan issue like this wouldn't have a real hope in the current political climate.
I believe it's considered a direct tax. Is that wrong?
Since there has never been a wealth tax, the matter is up for legal debate.
exasperated sigh Taxes are legal... Nothing unconstitutional about a tax on wealth. The bit about "uniformity" is already severely out-of-whack; so, arguing like it isn't doesn't make sense. Uniformity could also be implemented by tax bracket, et voila, problem mostly solved, but not like it ever was a problem.
The NYTimes had an article today about the difference between an income tax and a wealth tax, and how there is a constitutional problem with the wealth tax. https://news.ycombinator.com/item?id=21472442
Wealth taxes are a bad idea. We already have one (inflation), which is a nasty way to bypass the electorate and hits the poor hardest, but I don't think an explicit one is any better. It seems to come from the Sanders-and-company position of "billionaires should not exist"; many appear to believe that morally, even were everyone else well-off, someone having that much more is simply wrong. _Why_ is a "wealth tax" any better? Why shouldn't I be worried about the precedent of the government taking someone's assets? This seems bad for the same reasons civil forfeiture is bad.
Secondarily, I fail to understand the defense of such a policy by the "fair share" argument. Can someone explain? Here's how I see it: I am splitting a pizza among myself and seven friends. I cut it into eight pieces. My "fair share" is one piece, and does not change because someone else is hungrier. However, what the "fair share" of the "one percent" is, according to some people, seems to scale based on how many programs said people want to implement and how much they cost. Before anyone goes after my analogy, please excuse it; I understand that it doesn't fit perfectly, that not everyone has the same number of slices to start with, that the pie is not of constant size, ad nauseum. But even if I am re-distributing pizza from those who have twice as much to those who have half as much, the "just" amount doesn't fluctuate based on the relative hunger of the people in question; why, then, should the "fair share" increase because there are more things which people wish to fund? The taxes seem to be devised to keep up with the policies, rather than the government taking each person's "fair share" and doing as much as possible.
Effectively, it seems as though some people believe every dollar past a certain amount is part of a cash reserve with which politicians may fund things. This doesn't really seem "fair".
Secondarily, I fail to understand the defense of such a policy by the "fair share" argument. Can someone explain? Here's how I see it: I am splitting a pizza among myself and seven friends. I cut it into eight pieces. My "fair share" is one piece, and does not change because someone else is hungrier. However, what the "fair share" of the "one percent" is, according to some people, seems to scale based on how many programs said people want to implement and how much they cost. Before anyone goes after my analogy, please excuse it; I understand that it doesn't fit perfectly, that not everyone has the same number of slices to start with, that the pie is not of constant size, ad nauseum. But even if I am re-distributing pizza from those who have twice as much to those who have half as much, the "just" amount doesn't fluctuate based on the relative hunger of the people in question; why, then, should the "fair share" increase because there are more things which people wish to fund? The taxes seem to be devised to keep up with the policies, rather than the government taking each person's "fair share" and doing as much as possible.
Effectively, it seems as though some people believe every dollar past a certain amount is part of a cash reserve with which politicians may fund things. This doesn't really seem "fair".
LOL.
> We already have a wealth tax (inflation)
> which [...] hits the poor hardest.
A wealth tax does not hit the poor hardest.
> We already have a wealth tax (inflation)
> which [...] hits the poor hardest.
A wealth tax does not hit the poor hardest.
Inflation does. The poor don't have financial advisors, stock trading, etc.; many keep money in cash.
Sources:
https://fivethirtyeight.com/features/inflation-may-hit-the-p...
https://www.iol.co.za/dailynews/why-inflation-hits-poor-hard...
http://www.poverty.ac.uk/inflation-low-income-households-nec...
http://www.washingtonpost.com/wp-dyn/content/article/2008/03...
https://www.ft.com/content/77a36048-4ddd-11dd-820e-000077b07...
https://www.fin24.com/Economy/Poor-hardest-hit-by-inflation-...
https://www.newstatesman.com/politics/2014/02/how-poor-have-...
https://www.sanders.senate.gov/newsroom/must-read/inflation-...
https://www.thetimes.co.uk/article/new-index-of-inflation-sh...
https://business.inquirer.net/151537/poorest-households-hard...
Sources:
https://fivethirtyeight.com/features/inflation-may-hit-the-p...
https://www.iol.co.za/dailynews/why-inflation-hits-poor-hard...
http://www.poverty.ac.uk/inflation-low-income-households-nec...
http://www.washingtonpost.com/wp-dyn/content/article/2008/03...
https://www.ft.com/content/77a36048-4ddd-11dd-820e-000077b07...
https://www.fin24.com/Economy/Poor-hardest-hit-by-inflation-...
https://www.newstatesman.com/politics/2014/02/how-poor-have-...
https://www.sanders.senate.gov/newsroom/must-read/inflation-...
https://www.thetimes.co.uk/article/new-index-of-inflation-sh...
https://business.inquirer.net/151537/poorest-households-hard...
w1nst0nsm1th(1)
If you have a billion dollars, all your pleasures and needs are taken care of. The use for the excess money is ego and power.
Thus, if it is tax advantageous to put the money into a foundation, then you will do it. Does anyone really draw a distinction between Bill Gates giving money to a cause and the Bill and Melinda Gates Foundation giving money to a cause? While the Gates Foundation is doing great things, it is probably very ego gratifying to have the top scientists and philanthropists and heads of governments coming to you asking for money. It is also a very powerful position to be in charge of so much money.
Thus, if we have a wealth tax, we will see the money go from being the billionaire's personal money, into being part of a foundation named after the billionaire that they control.