>The state will, as always, become reliant on it and find ways to expand it to wield more power and pay debts that were taken on to “collect/spend in advance” as they’ve done countless times.

This hasn't been true for the income tax [0], nor the capital gains tax [1], nor (at least in Silicon Valley) for real estate taxes[2], which are closest to a wealth tax. It's a reasonable thing to consider, but given the evidence we have, should not be a driving consideration.

[0] https://bradfordtaxinstitute.com/Free_Resources/Federal-Inco...

[1] https://en.wikipedia.org/wiki/File:Federal_Capital_Gains_Tax...

[2] https://www.boe.ca.gov/proptaxes/decline-in-value/

edit: I was misinformed re: income tax, tracking only the top rate.

> This hasn't been true for the income tax

Well that's false, the income tax in the United States originally was promised only to ever apply to the ultra-rich. Now every tax payer pays it.

> Now every tax payer pays it.

Well that's false. In 2018 44% paid no federal income tax.

https://www.marketwatch.com/story/81-million-americans-wont-...

> Well that's false. In 2018 44% paid no federal income tax.

Source kinda sucks bec its looking at all americans not income earners which is what we're talking about.

But even so as others have said the point stands, originally income tax was only for the uber rich and now a large majority of workers pay it.

Also every single worker pays payroll tax regardless of income level, that's something the article doesn't address.

Every tax payer pays at a minimum their time and stress to file the paperwork, many don't realize that best effort is probably good enough for them, those who are fortunate can spend $150 to a leech of a lying, scheming company to reduce that burden.

The notion that the time and stress involved with the paperwork is onerous enough to merit being considered payment seems tenuous to me. The gov't has been pushing (as hard as it can) free file services for all of the years that I've been doing taxes. Using those free file options, I--a standard W-2 worker who doesn't make much--complete my taxes in about 15 minutes these days. The companies that convince people to pay them to do that tiny amount for paperwork are also working to hide how ridiculously quick and stress-free it is for one of those 44% to do their taxes.

That's a bit of an over generalization. It gets more tedious for people with multiple jobs, investments, a business, etc. Not to mention, many places also require state and local tax paperwork. The companies that charge money, including TurboTax, lobby to keep the tax codes complex so they can keep charging people money.

I don't stress out over my taxes anymore, but just about everyone else I know does. Of say the 100 closes people you know, how many of them file on the last day, how many people ask for extensions, how many people give up and hire someone to do it for them? That alone should speak volumes.

That's because of corrupt American politicians and lobbying by Intuit, not something inherent to an income tax. Many countries have a simpler income tax process.

The IRS allows many people to file taxes electronically for free (https://www.irs.gov/filing/free-file-do-your-federal-taxes-f...) as do some private companies.

Sure, it's not fun, but it's not an overwhelming burden for those with a simple 1040.

Just reading the instructions, noting all the exceptions, and assembling the forms takes hours.

finding that information isn't easy.

Google "free tax file". It's the top hit. I think it's also on your W2's your employer gives you. I'm not sure if it could be made easier, but open to suggestions.

Used to be hidden and had disclaimers that it couldn't be used if income was over 50k or something ridiculous, making it unusable in CA.

It's still about 1000x more complicated than filing in New Zealand, which is comparable to filing on the California site. Basically a 15 minute wizard on a web page.

Still got social security and medicare though which contribute to the tax wedge on income and employers pay those for 100% of employees.

Not everyone is salaried, especially at these levels where you're not earning enough to pay any income tax.

Hourly employees pay it too and because it is a withholding tax, you pay for it even if you are below the standard deduction and don't file a tax return because it is automatically taken out of your paycheck by your employer when you get paid. Self employed people also have to pay both sides of it and they have to file if their income is above $400 a year so the only way your really getting out of it is if your employer is paying you under the table or you are self employed and made less than $400.

It still shows the point clearly enough, as 56% isn't the ultra rich. People who fear a wealth tax doing the same already have precedent.

Now, maybe if the wealth tax was combined with a significant reduction in income tax, say 0 tax for the first $100,000 a year people make, then people might be a bit more willing to support the notion. But just a new tax, with the promise it won't impact you? Can't blame people for lacking any trust.

It's ironic how now everyone is bringing out the slippery slope arguments, after years and years of tax cuts for the rich reduced social services and increasing wealth inequality, all based on the promise that cutting taxes for the rich would benefit the average person. Well that was a lie, after several decades of increasing efficiency and economic growth the middle class can look back at essentially at no increase in wealth and the only reason that household disposible income has somwhat increased is because now both adults in the family are working (+plus often high school and college kids are working large proportions as well).

If there was ever a slippery slope it was the slippery slope of cutting more and more taxes for the rich.

Well given those taxes are passed on to the middle class, and the fear is that a new tax will also be passed on to a middle class, I don't see any irony.

I even suggested that lowering taxes on the middle class and below while introducing a new tax on the rich would be the a method to prevent people from being concerned with the tax eventually impacting them. With all the 'tax the rich' rhetoric, why not include a 'and not the poor' as well?

I suppose everyone's definition of ultra-rich is different. There are many people who feel that earning $60k/year is unattainable in their lifetime. For them, the income tax rates (and proposed wealth tax rates) probably seem too low.

I agree that it's easy to tax people wealthier than you. When it might affect you, there's less support.

Do you have a reference for this "promise"?

In the 50s through 70s, there was a much higher income tax on the upper income brackets: the tax was much more progressive. Ronald Reagan dramatically lowered the income taxes on the high income people and kicked off the dramatic increase in economic inequality that we've seen over the past 50 years. The GOP destroyed much of the promise of the American Dream in this case. Is this what you mean?

It was supposed to be a temporary tax to fund the Civil War, but like most/all taxes, the "temporary" became permanent. (1)

From Wikipedia - In 1913, the top tax rate was 7% on incomes above $500,000 (equivalent to $12.9 million in 2019 dollars) and a total of $28.3 million was collected.

1 - https://www.mwattorneys.com/blog/first-income-tax-was-suppos...

I don't know what was promised, or by who, but the first federal income tax after passage of the 16th amendment applied to only the richest 3% of the population.

https://en.wikipedia.org/wiki/Revenue_Act_of_1913

Only 3% of the nation had any income above $3K, and they only paid a 1% (!) tax on the income above that threshold. That's how it was sold to the public.

Compare that to the general income tax today, and who it applies to: the floor now includes ~60% of people with any income at all, and the lowest possible income tax rate is 10%, e.g. 10x higher.

And literally everyone pays income tax in the form of Social Security and Medicare. (For whatever reason, if an income tax is pre-allocated to particular government spending, it's no longer an "income tax" in some people's eyes. The tax effect is identical and you need the 16th Amendment to allow it, so IMO it should be lumped in with the other income taxes we pay.)

This is not true. Only about 60%ish of Americans pay income tax. While those who do aren’t just the ultra wealthy, certainly not all Americans do.

Others have already pointed this out, but you're ignoring Social Security and Medicare which are both income taxes, just pre-allocated to specific government spending programs. 100% of tax payers pay these income taxes, including the self-employed.

Your graphic only goes to 2009. Note that long-term capital gains moved up from ~15% to ~24% under Obama, and Biden has another plan to increase it[0].

[0]https://taxfoundation.org/joe-biden-tax-plan-2020/

Here is an article that directly contradicts your assert. It discusses how congress promised to only tax the really rich and then through drift and power grab we’re all paying taxes. https://soundmindinvesting.com/articles/view/promises-made-p...

Not that you're necessarily wrong, but I find it fascinating that the state of social trust is so low in the united states that the most powerful and resonant arguments against potential laws are even if the law is good, a future law in the same vein might go too far and thus even the good law should be shot down.

You can see this on a variety of topics. Gun control legislation, immigration reform, healthcare reform, etc. Reasonable laws are perpetually overshadowed by the boogeyman on the horizon.

It depends on what one sees as reasonable (also see the difference between reasonable and rational). Take the gun control that you referenced as an example. It's likely that there is a vast difference in knowledge of the technical as well as legal aspects of firearms between gun owners and non-gun owners. So the law could be rational, but the two groups could differ on the reasonablenes. I see the slippery slope argument less today than I did in years past.

In my opinion, most proposals by either side on a variety of topics are not good options. They have become hard-line battle cries for their respective party in order to motivate hardcore supporters to come out to vote, particularly in the primaries in which the radicals comprise a larger share than in general elections.

What you find "fascinating" is a culture that is over 200yr old. What you are complaining about has been a constant part of our culture since the 1770s and ingrained in Federal law in 1789.

> Reasonable laws are perpetually overshadowed by the boogeyman on the horizon.

Because that’s exactly what’s happened in the past. We don’t just get ONE piece of gun legislation and that’s the end of it, every so many years we keep on getting pushes for more. For immigration reform, we didn’t just get ONE amnesty of illegal immigrants and then strict immigration control which was promised back during the Reagan administration, we got complete acceptance of continued illegal immigration and renewed calls for amnesty.

The smart money is always on not trusting the government.

It's like when we deign policy we never have KPI's, OKR's, or any other metrics associated with it to define what we agree what success is. Everything is an ideological battle to claim a new trench and push the opposition back a trench.

I think we'd get along better if we first proposed and found agreement upon which metrics we want to achieve (gun deaths at x%, or a decline of x% by such and such date, etc) and then implement policy that get there. And then correct as needed.

There was a time when universities had a very disproportionate amount of males VS females. So we passed policy that was designed to make a university degree more achievable for females. And it has worked, which is great! However, we never really implemented an end condition to this policy. And the entrenched apparatus that makes it's living or achieves ideological goals continue the policy, as-is, in a never ending battle.

If we would have said "we want 50% of college students to be female by x-date" (or better, we want to maintain a balance of 50/50) then we could have either stopped the policies that were used to correct the initial condition or modify them to hold it steady at 50%. But we haven't and now 56% are females and it's growing and any suggestion that we either need to hold off on these policies now that we achieved the goal or even correct it to get more males into universities is immediately labeled sexist, etc.

I think it's easier to get a diverse group of people to work towards a common goal when you define the end condition (put a man on the moon) rather than using vague descriptions of what would be a better world. At the very least it stops skeptics from just flat out saying "no, as it will never end".

States like the US can just spend in advance without taxing, there’s no necessary relation. We’re not on the gold standard anymore. The point of a tax isn’t to pay for things, it’s to attempt to control inflation and the money supply, and to combat inequality. The idea that a state (read nation, for US states things are different) would become reliant on such a tax to pay for things doesn’t hold water. It may become ‘reliant’ on it as a means to reduce inequality but that’s another matter.

The avoidance issue is a big one and the mechanism of making sure people pay is at least as important as where one sets the floor. Cross border capital flows can be pernicious.

Piketty gets into how different rates of capital accumulation create huge rifts between people who own appreciating assets like land and equities and people who don’t who primarily earn wages. The idea behind the wealth tax is to try and narrow the rift.

>The point of a tax isn’t to pay for things, it’s to attempt to control inflation and the money supply, and to combat inequality.

A significant proportion of Americans would disagree with you that it's the government's business to "combat inequality". Most people agree with taxes to help the needy and fund infrastructure, but it's a harder sell that the government should punish people just for being too successful.

>Piketty gets into how different rates of capital accumulation create huge rifts between people who own appreciating assets like land and equities and people who don’t who primarily earn wages. The idea behind the wealth tax is to try and narrow the rift.

But he doesn't outline clearly what the problem with this rift is. To quote the criticisms section of the Wiki page on his book (https://en.wikipedia.org/wiki/Capital_in_the_Twenty-First_Ce...):

"One strand of critique faults Piketty for placing inequality at the center of analysis without any reflection on why it matters.

According to Financial Times columnist Martin Wolf, he merely assumes that inequality matters, but never explains why. He only demonstrates that it exists and how it worsens.[36] Or as his colleague Clive Crook put it: "Aside from its other flaws, Capital in the 21st Century invites readers to believe not just that inequality is important, but that nothing else matters. This book wants you to worry about low growth in the coming decades not because that would mean a slower rise in living standards, but because it might ... worsen inequality."[35] "

Inequality by itself is not bad, in fact if you have an extreme society with no inequality you've essentially produced perfect socialism and a society where everyone is equally poor and there is no innovation, no difference in outcomes.

Extreme inequality tends to destabilize society. At some point all the multitude of have nots get sick of their lot and rise up and take from the haves by force.

So I would say inequality is good, in manageable doses. The question is are we headed to a managable place?

Yes, inequality is about morality. I'll push back on any current thought that requires abandoning morality.

I disagree -- I think unfairness is about morality, and in many of these conversations people often conflate inequality with unfairness.

A perfectly equal society can also exhibit a great deal of unfairness, and a perfectly fair society would most likely be unequal.

"Fairness" should be the metric under discussion, not inequality.

Definitely morality, but also the stability of a society. The provision of the good life to the people, etc.

I don't understand why you think the slippery slope argument works for the rate and threshold, but not for the existence.

The problem with wealth taxes is not slippery slope, but rather that wealth can be obfuscated and moved around much more easily. Transactions are easy to tax; wealth worth taxing is about what you control, rather than stuff you have.

There's good reasons the most successful wealth taxes are land taxes. You can't easily move land.

Just for some historical context: US income tax rates started at 1% and ended at 6%, and applied to an extremely small amount of the population.

What does "ended at 6%" mean here? As far as I can tell, all income earners in the US pay at least 15.3% income tax in the form of Social Security and Medicare taxes.

This is exactly what happened with the US federal income tax. It was originally only a small amount, and only on the wealthy. Now it's gradually been expanded to everyone.

> It was originally only a small amount, and only on the wealthy.

This is a bit misleading. The first income tax of 1861 was on incomes over $800, which inflation-adjusted is about $23000. The next year the threshold was lowered to $600 or about $17,000 in today's dollars. Currently the standard deduction is $12,200. Certainly some creep, but it doesn't quite fit the described jump from only the wealthy to everyone, except perhaps to the degree that nearly everyone in the US today is wealthy compared to the average citizen in the 1860s.

Rates have certainly gone up since then (originally a 3% rate), but top rates today are quite low by modern standards - they were higher than today from the 1930s through the late 80s. Typical average rates have been on a slow downward trend since WWII.

I think you are also being a bit misleading, you do mention how much richer people are today but this really can't be overstated. In 1861, only 3% of the population earned more than $800 per year. So the original income tax only applied to the very rich.

And wasn't it also supposed to be temporary to pay for the war?

Yep, there was no income tax till 1913.

https://en.wikipedia.org/wiki/History_of_taxation_in_the_Uni...

Slippery slope is a logical fallacy [0], which you likely already knew. Of course, that doesn't make your argument wrong, just fallible.

I think it's arguable that taxes only ever go up. Income taxes on the rich used to be near 90% in the top bracket, so it's not a one way ratchet. That said, I agree government tends to expand and needs to fund that growth somehow. But I think it's much more likely that need manifests as an increase in the wealth tax rate rather than a lowering of the wealth threshold. The billionaires have so much more money than everyone else (and so much more than they need) that it will be much more politically popular to raise the wealth tax on them than it would to expand the pool. Not to mention, there are more of us.

I'm not advocating a wealth tax, and I think it's problematic for other reasons, but I don't think the slippery slope argument is much more than fearmongering in this case.

[0] https://en.m.wikipedia.org/wiki/Slippery_slope

Ahh the classic HN logician that spots someone mentioning slippery slopes and reflexively calls it a logical fallacy.

The history of taxes in the US (and especially California--remember the "temporary" 13.3% highest marginal rate?) has more slippery slopes than 6 flags fiesta Texas. It's not fear mongering, its a very solid argument against new taxes.

Nonsense. The top marginal tax rates in the US used to be much, much higher than they are today.

It was not reflexive. Perhaps you misread my post.

My reading of the way the slope slips is that rates go up, not that the minimum threshold is lowered. This reflects historical tax law changes, political sensibilities, and basic economic theory. This was all in my original post as well, so I'm not sure it'll land this time, but I'm a bit offended that you have mischaracterized my post as reflexive, implying thoughtlessness, when I believe it was anything but.

My opinion restated, billionaires have more to fear from this than any of the rest of us do.

I have seen many instances of "slippery slope" fallacies actually happening. While I don't want to name specific examples, due to it getting into unnecessary politics, I am able to recall at least 3 BIG instances of it happening.

A logical fallacy doesn't mean the claim is wrong, just that it doesn't logically follow. I think it's still worth pointing out when the claim is presented as fact.

Oh, I completely agree with that. Bad wording on my part. Usually when I talk about such things I add something to denote it as my opinion/fear.

Sadly it is legitimate to some extent IMO.

> Slippery slope is a logical fallacy [0], which you likely already knew.

Falsely asserting a slippery slope—that A must lead to B which must lead to C when none of these things are inevitable—is a logical fallacy. It is not a fallacy to point out that the grass is wet and the hill is steep and suggest that perhaps we should put up a sign advising people to stay away from the edge. The argument is simply that this is a dangerous situation which we would do best to avoid, not that anyone who goes near the edge will inevitably lose their footing.

> The billionaires have so much more money than everyone else …

Do they really? It seems to me that what they mainly have is not money but rather illiquid assets, i.e. capital. That includes stocks, which can be sold—at the expense of giving up control of the company—but also stock options which can't be exercised immediately and tons of actual capital equipment, inventory, buildings, and so forth which can't readily be put to other use.

> Income taxes on the rich used to be near 90% in the top bracket, so it's not a one way ratchet.

Keep in mind that they never actually collected anywhere near that much. Those 90% brackets were purely theoretical.

I've responded to the logical nature of the fallacy in other comments, so won't rehash. I thought I was clear in the original post, but apparently not.

There are many millionaires for whom what you describe is a problem. I assure you that billionaires do not have a problem with liquidity unless they want to.

Sure, nearly every opinion or argument is fallible. I'm not explicitly trying to create a slippery slope or fear monger. A slippery slope tends to lead to unintended consequences. I don't think expanding the net is unintended - I believe it's the deliberate goal. Our history suggests this w/r/t income taxes, etc.

I don't think the net will be widened, I think when more tax funds are needed, the gauge of the net will be adjusted to catch more fish from the same people. i.e. They'll increase the rate from 3% to 5%, not expose lower wealth individuals to the new tax.

You're partially correct. They'll increase the rate from 3% to 5% and then a new rate of 1% for the 30m-50m bracket and make it progressive.

This is not what actually happened in several European countries that had wealth taxes. In fact, they found the taxes ineffective at collecting revenue, and abandoned them. This isn't exactly a recommendation of wealth taxes (which I'm skeptical of), however it is evidence that your assumptions about what would happen are not inevitable.

> These things always get a wider, and wider net until anyone just starting to get ahead is caught in it.

No, they don't. You only have to go back a couple years in the US for an example where tax rates for the wealthy were massively cut.

But that doesn't answer the complaint. The original idea of income tax was also that only the wealthy would pay, not the middle class. Yet here we are.

Tax rates for the wealthy were cut? That's great, for them. Were tax rates cut for the middle class? Did any of the lower class no longer have to pay income tax? That's what would be a response to nemo44x. (What would be a response to me would be for there to be no income tax for anyone in the lower 90% of income. That would be back to the original intent, and would reverse all the years of scope creep.)

Yes, here were are because it turns out that modern societies with their amenities depend on taxation. What's the problem with that? If it were such a humongous deal you'd have more people voting for tax cuts.

OK, but it may well turn out that future versions of "modern society" depend on the revenue from wealth taxation, not just for those with wealth above $50 million, but with wealth above, say, $50 thousand.

Remember what the argument in the local thread is. nemo44x stated that "these things" (things like the wealth tax) always expand to cover more people than they did at the beginning. rurp said that the income tax cuts a couple of years ago disproved that. I said that the expanding scope of income tax over the last 107 years supported nemo44x, not rurp.

Your arguing that that's OK, because we want the society that results. That may be. But that's a different claim than "this won't expand to hit everybody".

The only promise the government will keep is what's in the Constitution. I find it unreasonable that a government should keep promises from times when I wasn't even alive.

I wish you had made this as a top level comment. This should be at the top, not the pro wealth tax comment. Like you said, the net always gets wider and wider.

> Fuck off dude.

You can't do that on HN, regardless of how wrong someone else is or you feel they are. Perhaps you don't owe "dude" better, but you owe this community better if you're posting here.

I'm dismayed to see that you've been making a habit of posting like this, as well as unsubstantive comments generally. If you keep doing that we're going to have to ban you, so would you please review https://news.ycombinator.com/newsguidelines.html and take the spirit of this site more to heart?

exactly. Also money printing will mean that 50 mil in 10 years is more like 10 mil now.

Personally, this and income tax increases make me seriously consider moving out of CA (where I’ve been a resident for a very long time)

You shouldn't even need to consider those two points - just leave that miserable state.