It's an unpopular opinion (because of the propaganda campaigns waged by the wealthy), but a wealth tax is very much needed in this country. The income tax is fundamentally designed to prevent the accumulation of wealth. So us worker bees bear the costs of financing government, while the wealthy, who owing to their accumulated wealth, do not need or have an income, get to reap the benefits.
This is a game as old as the US income tax itself; the 16th Amendment wasn't passed to legalize income taxes (they were already legal), but to make sure Congress could tax income "from whatever source derived", since wealthy people were restructuring their income streams to try to avoid taxation.
They still do that today.
In any case, a wealth tax would be easy to game too. There is a lot of room for loopholes in the definition of wealth, what kind of wealth should be taxed, what the tax brackets should be, what kinds of deductions are allowed, etc.
I'm worried about the decline of the inheritance tax. It's happening all over the West. In France, "the incomes attained by the top 1% of French inheritors are already higher than those attained by the top 1% of workers".
We could be headed back to a Jane Austen -esque society where ambitious young people seek their fortunes in marriage, rather than in business.
There is a reason that investment firms exist: this process is a ratchet for making untaxed (or less-taxed) income.
If you pay them with income, you paid income tax.
If you pay them by liquidating assets (including assets you purchased with the loan money and then sold), you pay capital gains tax (unless you sell for a loss).
https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...
> The wealthiest 1 percent of American households own 40 percent of the country's wealth, according to a new paper by economist Edward N. Wolff.
Given that the US has 25% of the world's wealth, and the lower 99% of the US population has 60% of the US's wealth, it stands to reason that "the 99%" have a full 15% of the world's total wealth. Given that the US has ~4% of the world's population, surely resolving "the wealth disparity" is more likely to lower their position than raise it.
The top 10% has 75% of U.S. wealth, the top 20% has 87% of U.S. wealth. So carrying on about the 99% as if wealth is distributed in anyway evenly within that group is more than a bit silly. Especially when you look at the bottom 50% having a pittance, somewhere between 1-2% of U.S. wealth.
The next natural group after discussing the 1%'s wealth, isn't the other 99% just because 100-1=99...
So really your argument falls apart for me because most of the 99%, the bottom 70%, end up owning just about 1% of the world's wealth. And that's a fairly small slice of pie to be split between 227 million people. And before you show me the math that it's actually quite a bit per person. Don't forget that in reality the bottom 60% only has almost as much wealth as the whole next 10% and that most of the population isn't seeing the wealth you're describing.
https://www.theatlantic.com/magazine/archive/2018/06/the-bir...
In any event, I was not aware of that purported wealth distribution, but the median income in the US is $59k and the median income of the world is 9k. We can argue cost of living and so forth, but it is no exaggeration to say that nearly everyone in the US today is living on the upper crust of humanity in terms of wealth and lifestyle.
Across the political spectrum people tend to agree that keeping jobs in the US is a good thing while ignoring that that perpetuates the very form of wealth inequality they decry when talking about national politics. Not that I think they're wrong to argue that the government should favor its own citizens over others internationally, but it does seem rather hypocritical to me.
https://www.theatlantic.com/magazine/archive/2018/06/the-bir...
I do not deny that there is wealth inequality in the US nor do I have any elegant solutions to it, but I perceive a lot of self-interested hypocrisy around the issue. Surely fighting wealth inequality means cheering when manufacturing jobs are sent overseas, and the corporation's US base means that we can use economic leverage to enforce safety / wage standards on these new jobs in India / China / Mexico. This brings up the global median income, surely a good thing for anyone concerned with income equality.
The other problem is all the people crying about jobs going overseas aren't the same people crying for wealth equality necessarily. So again, it's incorrect to lump everyone and every viewpoint together when it's really a huge spectrum.
And on top of all that I would argue that arguing wealth inequality in the U.S. is fine because it exists in the rest of the world is a red herring. For starters, no nation, not even the U.S. is solely responsible for the state of the world and economies in every other country. And secondly, no nation is under any obligation to address the world's problems before addressing its own. And it's not effective to avoid the issue by shifting the scope around arbitrarily.
I am arguing a few other things:
* That it is hypocrisy for anyone to argue against wealth inequality in the US, but decry jobs going overseas
* That it is wrong to not care about wealth inequality in the world while moaning that we're only in the top 95th percentile of human wealth
* That things in the US are nowhere near as bad as they are commonly portrayed
>> The wealthy pay the vast majority [...] already
> I don't get why this is always trotted out?
Surely the context of the conversation explains why.
I am paying 0 (none, nada, nothing) income tax. But I am a taxpayer.
This[1] source paints a better picture, and I didn't even bother verifying the data - at least it considers other kinds of taxes.
Without the numbers, its kind of meaningless.. that is like saying bill gates moves to a town of 50 people, and suddenly pays 99.999% of the taxes.. its expected, unless you give the mean, median, etc, of income.. not just of how much he paid.
So they pay the majority. Good. They can pay more too.
In practice of course it is politically easier for government to borrow the money and spend more than income, until Greece happens.
Anyway, charging high-income employees more for SS and then paying them less on retirement would ruin the illusion that it is a retirement plan and not simple theft from the future.
I agree with your comment that it's easier to borrow the money. Look at our current government, that was supposedly fixated on budget deficits then when Obama is gone they pass a giant tax cut, increase the deficit (with the wish and a prayer that the deficit would go away), and now that there's clearly going to be a much larger deficit their answer is not cancel or reduce the unneeded tax cut for rich people - they want to cut benefits - this was all predicated before the tax cut.
I am not convinced this is accurate, at least in some cases. In some cases, suburbs raise much more capital in taxes per person, are often required by the state to give some back for redistribution (e.g. education), attract business much more these days than city centers, provide much needed infrastructure for city-based businesses to house their employees, and provide many services that are leveraged by urbanites unable to attain similar quality locally (e.g. hospitalization). The unfortunate realization is that many inner cities suffer due to government-based mismanagement and often lean on thriving surburban areas and state handouts to help. It goes both ways.
> If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes
Others believe to reduce the tax burden, you need to reduce expenditures, especially waste. The classist redistribution argument is a great way to let budget makers off the hook for mismanagement while blaming your peers.
Can you find a citation for this claim? Strong Towns did a blog about this and found that downtown areas produce far more tax revenue per acre than suburbs. Source : https://www.strongtowns.org/journal/2018/8/7/growing-lasting...
Another effect given is that suburbs and rural areas require far more investment in infrastructure per capita. In short, rural areas and suburbs require way more roads than downtown, and fewer people live there per mile of road to boot. So fewer people are paying taxes to support even more roads.
I would be very curious to see a study that showed the opposite effect, and how it could be possible.
Yes, but maintaining roads isn't a fixed cost by road length (or even surface area), its determined by volume and size of vehicle traffic, with heavier vehicles doing more damage, far out of proportion to their weight; a single heavy truck doing damage equivalent to 5-10,000 cars in some estimates.
Cities may have less road area per capita, but they have a lot higher utilization and a lot more heavier vehicles than on most suburban roads that have low density traffic composed almost entirely of passenger cars and light trucks.
Basically dealing with infrastructure in rural areas you can't pretend that the earth is stable & inactive and no rural place can afford the most durable materials.
I've worked in low density rural areas, though I've only lived in urban and low-density suburban areas, mostly the latter.
And, yes, if you have very little traffic and very little of that is heavy vehicle traffic, weathering becomes the dominant factor.
If you have signficant traffic, it becomes the dominant wear factor, even though you still have the full impact of weathering. High population density doesn't eliminate the freeze/thaw cycle.
> Basically dealing with infrastructure in rural areas you can't pretend that the earth is stable & inactive and no rural place can afford the most durable materials.
You can't pretend that in urban areas, either, which (among other factors) tend to be next to major waterways which have substantial impacts on stability.
> and no rural place can afford the most durable materials.
What you mean is “no rural place finds it cost effective to pay for the most expensive materials that are needed for heavily trafficked urban roads, because the maintenance cost with cheaper materials to keep roads in conditions suitable for the actual demands placed on them in those areas is lower than if the more expensive materials were used.”
Which gets back to my point that, sure, low-density areas have more linear distance of road per person, but also lower build and maintenance costs per unit of linear distance of road.
> In short, rural areas and suburbs require way more roads than downtown, and fewer people live there per mile of road to boot. So fewer people are paying taxes to support even more roads.
I know it can read like common sense (I won't ask for a study from you or anything), but it also reads like common sense that a more traveled road requires significantly more maintenance costs. These are just not binary things that you can answer this way.
> I would be very curious to see a study that showed the opposite effect, and how it could be possible.
Opposite effect of which part? Do I really have to provide a study to show some suburbs incur a financially heavier burden due to their neighboring city than vice versa?
Strong towns at least has numbers. So while you may disagree with the methodology at least there is one.
> This is the way these goal-driven ideologues muster support.
It sounds like you're equally biased, at least until you provide some competing numbers. Fine, use per capita. What did you come up with?
Strongtowns is not some hotbed of liberalism. They guy who started it grew up on a farm in a small town in Minnesota. He is anything but a "liberal."
In some cases, you may be right.
It is much more the norm that new development gets sweetheart deals waiving all sorts of taxes and fees (which would ordinarily fund the infrastructure costs the local government is about to be on the hook for because of the new development), on a mentality that it's the only way to attract development.
Which then means somebody else has to pay more to cover those infrastructure costs, because the people using the infrastructure aren't paying for it.
This same pattern repeats with both business and residential development, all over the country.
Here is an article with some actual numbers from Halifax, Nova Scotia:https://usa.streetsblog.org/2015/03/05/sprawl-costs-the-publ...
Some of the tables are pretty revealing in there.
Expanding the suburban sprawl means going to places where that infrastructure isn't already there, which means adding all of it and adding the burden of maintaining it. And when you then waive the taxes that are meant to pay for the infrastructure, where does the money come from? Out of somebody else's pocket.
People from New York might have some further input here.
https://www.bloomberg.com/news/features/2017-08-10/nobody-kn...
Low income folks just scraping by don't pay taxes as it is -- at least not income taxes.
This is completely wrong.
The poor either don't pay income taxes or pay very little income tax, because the marginal tax rates for low income levels are so low. That's by design.
Wherever the tax is levied - on corporations or on individuals - doesn't affect the incidence of the tax; that is, who really pays, at the end of the day. When you tax corporations, that actually increases the tax burden on the very poor. The amount that they are directly paying in April[0] might be the same, but the total burden of the tax is passed on to both workers and shareholders alike, in the form of lower wages, lower dividends, and lower share prices.
[0] well, withheld in every paycheck, but same idea
Have the rich write laws to tax themselves? We hope so.
The wealthiest 1400 people in the US pay as much tax as the least wealthy 50%.
EDIT: citation: https://www.bloomberg.com/news/articles/2018-10-14/top-3-of-...
If people want to reduce the tax burden on folks with low incomes just scraping by, the way to accomplish that is by increasing taxes on corporate profits, very large incomes, large inheritances, etc., expand enforcement against tax evasion, and eliminate legal or quasi-legal tax-avoidance loopholes. However, the wealthy in this country have largely succeeded in a 50-year campaign to redistribute wealth upward.