All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices.

> All taxpayers (since they will have to make up for shortfalls) and recipients of defined benefit pensions (since they will have to accept reductions in benefits) are also indirectly exposed to changes equity prices.

But that needs to be put in its proper context. Even if you have a small amount of stock or indirectly benefit from stock prices in some way, it'd be stupid if you let that mentally tie yourself to the stock market.

For instance, shortfalls in taxes do not necessarily need to be made up by "all taxpayers." With progressive taxation, they can be made up by some taxpayers (which will likely consist of most HN commentators, since software engineers are relatively wealthy).

Not if the shortfall is made up via asset price inflation and dollar devaluation. Then the non asset owning class takes the brunt of the pain.

Which is what I believe has been happening for decades. Progressive taxation can help, but I doubt the political will exists to tax capital gains.

> I doubt the political will exists to tax capital gains

A friendly reminder that capital gains is taxed (when it is realized).* I assume that you are actually complaining about closing loopholes that exist for avoiding paying the full rate.

* Obviously this comes with the caveat that the tax code is large with lots of "loopholes" (in quotes because they were mostly intentionally created). Capital gains losses are somehow socialized as tax deductions and the "carried interest loophole" allows certain fund managers to treat capital gains as a different class of income.

The number of people in the US with defined benefit pensions is quite low and consistently falling.

> and the richest 10% of americans own 84% of all stock.

The top 20% of earners also handle close to 90% of the tax burden, while close to 50% of the population pay nothing in taxes.

Man, that 50% of the population that's able to buy things without paying sales tax is really fortunate. How do I sign up for that benefit?

You could move to Oregon...

...In all seriousness, the parent comment was probably referring to the Federal Income Tax.

Yes, I'm aware that's what he was referring to, but it's not the entirety of the tax burden in the US, and even people who pay nothing in income tax still pay taxes.

This is precisely why a flat tax disproportionally impacts lower income people.

Unless it’s a flat tax on capital assets.

I think it would be interesting to try out a model where _only_ capital assets are taxed. No sales tax, no income tax, no capital gains tax.

It should dampen the effect of the rich getting richer only from rent collecting, while still making sure the market allocates capital to where it provides the most economic value (I.e can be turned into enough revenue to pay the tax in question)

I agree with a wealth tax in principle, but it's not without many difficult implementation challenges. For example, someone's entire net worth could be held in art. How do you accurately gauge its value if it hasn't been sold in two decades?

Auction it out. Highest bidder on rent gets to keep it.

This doesn't make sense. You're now saying that the government is going to be in charge of inspecting every citizen's property and auctioning it for them?

I'm as liberal as they come, and that just seems ridiculous.

Yes. Perhaps not the government though, what I have in mind is an institution representing the commons and all individuals right to it. So the income from said auctions could not be used for arbitrary government spending but only for the interest of the commons: The ones agreeing to respect the ownership deal by being non-owners of the asset in question. I imagine most of the revenue would just be payed back as a dividend.

Edit: (I do not think of wealth in the form of art though. Imagine most wealth is tied up in capital assets$

There’s a good moral argument about dividing capital into land and other assets.

But I suspect that from an economical efficiency perspective that division is less interesting than between revenue and assets.

It's really more about dividing capital into the kind that is "natural" and limited - land, mineral rights, EM spectrum; some would also say copyright and patents - and the kind that is produced by human labor. It's a bit fuzzy in practice.

> 50% of the population pay nothing in taxes.

Sales tax is almost 11% here. And I'm in a red-leaning purple state, not "Taxachusetts" or anything. Property tax on vehicles. FICA ("it's not a tax!" yeah OK, but it is really)

> The top 20% of earners also handle close to 90% of the tax burden,

Only if you only count the income taxes, and ignore other (mostly regressive) payroll, excise/sales, and other taxes at the federal and state levels.

Including all those taxes, the top 20% still pay 66% of all taxes.

https://theintercept.imgix.net/wp-uploads/sites/1/2019/04/ch...

The top 20% also owns 86% of the wealth, so it seems like they are still coming out ahead.

Well, they do have all the money. Besides, the 19.9% shouldn't complain to the 80%. Rather, they should complain to the 0.1% whose lobbyists write the tax code in the first place. We can be sure they had their reasons to set up this level of progressive taxation rather than some other level.

That's because the top has looted the economy, leaving little or nothing for the rest of us. Its not a reflection on the bottom 50% at all.

I don't think it's because top are lotting, more like people at top have bigger leverage. But in all, all people are equally likely to loot if the places were changed.

> That's because the top has looted the economy

Can you explain how this happens? How does one "loot" one of the largest economies in the world?

Monetary policy and globalism. We've got an economy built on debt. We went from a production based economy 40 years ago to a consumption based one. We exported skills. We believed that a service-based economy was sustainable in the long run. We went off the gold standard and embraced an inflationary monetary policy that punished savers. Then we built a retirement system (including state pensions) dependent on yields, which causes retirement funds to chase ever riskier asset classes. We made debt so available for so many things, like education, healthcare, real estate, etc, and we made it so artificially "cheap" that it drove up prices. We never really recovered from the 2008 real estate bubble. The Fed's answer was to buy mortgage-backed securities by the trillions, and bailed out the people responsible without punishing anyone. So we kicked the can down the road and now, this downturn is so massive that we will not be able to escape the deep financial consequences and it is going to take years to overcome this. We have nothing left to borrow against and we're in tens of trillions in debt.

Thank God for this comment

The U.S. Dollar is backed by an ass whopping!

It's simple:

Think about it, a CEO of a big company is more likely to be in social circle of the politicians, judges and regulators.

They are more likely to be sympathetic to their immediate acquaintance who they see every week rather than those poor social economic class people who they have nothing in common with.

Add some dilllusion and descrimination in the mix, like "they are poor because they are lazy" and it becomes easy to make policies which benefit your immediate social circle.

And lot of poor people don't even have time or motivation to analyze those policies and even if someone manages to do that, they don't have enough influence to do anything about it.

Even simpler. The folks in a company that can write checks, write them to each other.

You pay people less than their cost of living, demand that the state make up the difference in food stamps and health-care subsidies, and then pocket the difference.

https://www.socialeurope.eu/time-for-postcapitalism

In a society where the bottom 50% have virtually no wealth and are in debt, how much do you think they should pay in taxes and how do you expect them to pay for it?

If someone making 1m/yr pays 1% in taxes and someone making 10k/yr pays 90%, the millionaire is still covering over 50% of the tax burden despite being impacted far less by the taxes on his wealth.

In that case, I would love to be handling 90% of the tax burden right now.

They pay sales tax, social security tax, and they never make anywhere near as much in wages as the value of what they produce, which is the biggest tax of all but since it’s a hidden, implicit tax, you can’t see it.

Sure, but without the bottom 50% the top 20% would not be able to make nearly as much money as they do.

Progressive taxation is aware of the exploitive nature of capitalism. Just because people are being exploited doesn't mean they don't contribute, much to the contrary.

I never said it was a good thing, its merely a statistic.

> opportunity is very limited and unequally distributed

Sorry, I don't subscribe to this idea.

I came from a blue collar family. Both parents work long hours to provide for our family. I was working when I was 12. I didn't own anything of value through HS or college. I worked several jobs to pay my way through college. I have lived a big chunk of my life below the poverty line. I didn't graduate in four years like most of my friends, but I was still able to get myself out of college, get a job and have been able to build a career out of almost nothing.

"Shouting into a void of ignorance". Such prose from a person who probably was gifted a nice comfy life, trying to tell the guy who had to bust his ass for everything he has that I'm ignorant? Now that's something.

Feel to take more of my fake internet points away, I don't care.

>I came from a blue collar family. Both parents work long hours to provide for our family. I was working when I was 12. I didn't own anything of value through HS or college. I worked several jobs to pay my way through college. I have lived a big chunk of my life below the poverty line. I didn't graduate in four years like most of my friends, but I was still able to get myself out of college, get a job and have been able to build a career out of almost nothing.

That's completely anecdotal, but I experienced nearly the same. I agree with the above poster that opportunity is limited and unequally distributed, and I would say you and I experienced a good bit of luck....not to minimize your struggles.

USA has a very low class & income mobility [1].

[1] https://www.forbes.com/sites/aparnamathur/2018/07/16/the-u-s...

> I never said it was a good thing, its merely a statistic.

You’re correct, you didn’t. You did, however, post it as a response to a statistic that highlighted inequality in stock ownership. That response could only be interpreted as justifying that inequality because the upper class pays the majority of taxes, while the lower effectively contributes nothing. Yet you fail to realize that the lower class suffers a much larger overall tax burden relative to percentage of income.

This is why you were downvoted, but not by me. In fact, this is my first comment on an internet discussion ever. I’m not trying to take away your “internet points”.

> Sorry, I don't subscribe to this idea.

You’re entitled to your opinion, but it doesn’t make it true. You suffer from survivorship bias. There’s plenty of sound research that dispels the narrative of abundant economic mobility. Notice I didn’t say there is no opportunity, but limited and unequally distributed.

To your final point, I apologize if I came off as snarky. I am a first generation, ESL immigrant. My life, while relatively comfy by global standards, has been anything but by US standards. I hope you’ll forgive my pointed prose, and realize that being hardworking and ignorant are not mutually exclusive. There are many things I’m ignorant to, and when it’s pointed out, I try not to be personally offended. Instead, I approach it as a learning opportunity.

Ignorance is offensive when it is willful and deliberate.

Sharing anecdotes about pulling yourself up by your bootstraps doesn't change the fact that the biggest predictors of your life outcomes are your parents incomes and your zip code.

{citation}

"Parental Income Has Outsized Influence on Children’s Economic Future"

https://www.pewtrusts.org/en/about/news-room/press-releases-...

"Your ZIP Code Might Determine How Long You Live—and the Difference Could Be Decades"

https://time.com/5608268/zip-code-health/

"New U.S. Census Bureau Research Maps the Roots of Social Mobility"

https://www.census.gov/newsroom/press-releases/2018/opportun...

The history of America is the wealthy allowing just enough blue collar folk to make it big, so that the bootstrap narrative keeps propogating. The "I did it, others can too" is the fuel that keeps the facade of social mobility alive and strong.

Only one remark: "tell the guy ... that I'm ignorant"

You can have a wealth of first-hand experience but that doesn't mean it translates to opportunities or behaviors of groups. So yes, you can be ignorant.

As someone else pointed out, class mobility is extremely low and income inequality is extremely high in the US. For your situation, the plural of anecdote isn't data.

From one person who was born into poverty to another, I'll gladly call you ignorant because my version of your story involved me taking out a loan against my personal health in order to take a risk that either could've put me above water or doomed me.

I'm missing a lot of my teeth but it got me out of poverty. Do you think that was a good trade? Do you think it's a good thing that people have to make such decisions to survive?

I think this is the crux of what drives me mad with these personal anecdotes of struggle. Is this the best we can do as a society, that a few poor people, through work and luck, can become less poor? What's the point of these stories, beyond just sharing one's personal experience? That the society we've got here is the best we can do?

because that drive to pull ones self up is what built the US into what it is today. without that drive what is the point of being more than what you are today? the struggle to be something more is literally the driving factor behind all of existence. the opportunity is out there for most people if they look hard enough. that said there are definitely some who need societal help to pull them out of a rut but it is most definitely not even close to a majority.

like others in this thread, i too came from a family living below the poverty line yet somehow turned that into a career despite not even having a degree. opportunity to me seems plentiful

What built the US into what it is today was its incredible amount of untapped resources, followed by military dominance and tapping into other countries' resources. Keeping people impoverished was (and is) not necessary for that.

Where exactly are you getting “keeping people impoverished” from? Is the assumption they will try and fail? What is forcing them to fail and therefor stay impoverished? The entire point is to move from having nothing to having something. Either you’re born into it, or someone who’s already earned it gives it to you.

I’m not going to bother with the other part of your comment as your clearly biased but I’ll assume you’re not insinuating that things magically happen without hard work, that just sounds silly.