The ultra rich don't pay the current tax rate, why would raising a tax they don't pay have any effect?

Until there's an aggressive international agreement on closing tax loopholes, raising the taxes only impacts the barely-rich (doctors, lawyers, etc).

> The ultra rich don't pay the current tax rate, why would raising a tax they don't pay have any effect?

The ultra rich don't pay the current nominal income tax rate, because their income isn’t of the kind subject to income taxes, much less the additional taxes levied on labor income. The simple solution to that is to wipe away the distinctions about source of income in taxation policy (for payroll taxes, that means also eliminating limitations in source of income that qualifies for benefits and the quantity of annual income taxed, but that doesn't prevent, e.g., additional “bend points” in benefit formulas to limit the benefit impact of larger incomes.)

> Until there's an aggressive international agreement on closing tax loopholes, raising the taxes only impacts the barely-rich (doctors, lawyers, etc).

That's only true if you raise taxes on the kind and amount of income that doctors and lawyers typically make. Equalizing taxes on capital and labor income by doing away with payroll tax limits and favorable treatment of long-term capital gains while dealing with non-repeatable income (like most long-term capital gains for any but the ultra-rich) by allowing both advance tax recognition of anticipated gains and deferment of windfall gains over a period of years would impact the haut bourgeoisie, but have only modest, and mixed, impacts on the barely rich.

> That's only true if you raise taxes on the kind and amount of income that doctors and lawyers typically make.

That's what Biden wants to do, terrible idea.

Removing favorable treatment of long term capital gains is also a terrible idea. Ideally, there should be 0% gains tax (and income tax), but people will settle for favorable treatment compared to income tax.

> Ideally, there should be 0% gains tax (and income tax) (...)

Why? Your income is disproportionally dependent on investments and expenditure made by society to pave the way to your ability to generate income. It's fair that those who benefit the most from society also help the most to preserve its uplifting impact on the people.

Islam has the superior approach. Look up Zakat laws.

It can be argued that the barely-rich are also a huge part of "the problem." Collectively, they wield a great deal of influence through their wealth, networks, and savvy, and instead of using it to solve "the problem," they are largely involved in an intra-class competition to secure the next open actually-rich spot (or to simply maintain their standard of living, and particularly that of their children, regardless of merit). Fortunes that could go to feeding dozens of children, educating dozens of youths, housing dozens of homeless men and women, instead go to ensuring that a handful of people can keep up with their neighbors in vying for a spot at Yale for their boy or girl. Sure, in the process many salaries are paid, but you could also use that same amount of money and have the recipients of that aid number in the dozens or hundreds rather than be a handful or so.

In the end, that spot at Yale will still be filled. The needle on the chances of it being Dr. and Mr. Irgendwas' child probably doesn't move that much, either.

Hate to burst your bubble but if you're one of the 25% of Americans who has an undergraduate degree or above you're likely part of that barely-rich who are part of "the problem" (from a global perspective making over $50k a year counts as barely rich). No one wants to admit to being a part of some "elite" minority because there's always someone else to blame who's higher up on the ladder.

Ultimately policy makes change not some expectation for individual morality.

> No one wants to admit to being a part of some "elite" minority because there's always someone else to blame who's higher up on the ladder.

The problem with that point of view is that ignores the corollary that most of the people are not held do blame because there's always someone else which is privileged and has direct control over their lives and livelihood.

Complaining that someone in the US earning $50k/year is responsible for the current state of affairs, when they can't even control their own lives, is miopic and sheer idiocy.

Agreed, that's the point. How do you think the doctors and lawyers feel (or to be more specific to HN--the people doing well in the tech sector)? Having a finger pointed at you for living your life without "doing something" when you're not part of the country leadership is an aspect of the "change" myth we're often subject to (i.e. it's your fault things are bad, not the actual people in charge).

*also depending on where you live, even within the US, $50k can be a decent salary.

Doctors and lawyers are not making $50k a year. $50k is not even the average annual income in this country; it is not the income of the barely-wealthy. This is the problem: people making multiples of $50k live fundamentally different lives from those making sub-$50k. They have money to burn, and they do just that, often on self-serving goods and services with limited ROI compared to what the same amount of money would buy people with more basic concerns. However, they want to align themselves with struggling families and individuals culturally, because it absolves them of responsibility for changing private and public policy towards the nature of labor and welfare, and provides cover for them to continue their mindless march into the Moloch of a false meritocracy.

If you're paying $30k-$50k a year to send your kid to a private school, we're not talking about the same kind of family as a people working one or two jobs sub-$20/hr just to make rent. No one listens to the latter; if you're the former, you have positioned yourself socially to be heard by the decision-makers and policy-executors. If you don't say anything except in your own defense, knowing what an educated person should know about poverty and suffering in America, even somehow envisioning yourself as among those suffering, that's a choice.

> $50k is not even the average annual income in this country;

You really should refresh your statistics. Average means absolutely nothing if you don't take into account how uneven the income distribution is, specially in the US where income inequality reached abismal levels.

To focus on the facts, the median household income in the US is close to $63k. Note it's median, not average, and note it's household income, and not anual income.

That means that in half of US households you still get a household income lower than those $63k even if you add two incomes. That's how half of the US population lives.

>[...] if you don't take into account how uneven the income distribution is, specially in the US where income inequality reached abismal levels.

I did, which is precisely why I used that figure in the first place. I made the (evidently correct) assumption that most people would know that the median income is lower than $50k and the average. Grandparent's "barely rich" figure doesn't even hit the (high-earner overburdened) average, yet is higher than the income the median earner brings home. It's damning and inappropriate from two angles, which brings into question his entire argument.

> Doctors and lawyers are not making $50k a year

For the most part, no.

> $50k is not even the average annual income in this country

That depends which average you are referring to. It's well above the median personal income (around $35K)—the median being usually the useful average for income statistics, but a little bit less than the mean personal income. (The most common “average income” number, though, is neither of those, but the median household income, which is close it $70K, but it doesn't really make sense to talk about an individual's income being average or not and looking at a household, instead of individual, metric to judge that.)

Generally, when one says average, they mean average. I used it deliberately because of the implicit comparison to be made between it and the median, and because of where it compares to the arbitrary $50k figure grandparent chose to swing the conversation around.

> Generally, when one says average, they mean average.

“Average” is an ambiguous term. The mode, median, and the various (harmonic, geometric, arithmetic) means are all averages.

In income statistics specifically, the usual average referenced is the median of the appropriate measure.

In context-neutral informal conversation, the arithmetic mean is the most common average.

If you want to be clear, its a good idea to avoid “average” and use the specific term for a measure.

I've heard of the median and mode being associated closely with the "average," but never as a synonym. Actually, I think it's much safer to assume that someone speaking of the average is referring to the mean unless they specifically say "median."

> I've heard of the median and mode being associated closely with the "average," but never as a synonym.

They aren't synonyms, they are more specific terms.

In colloquial language, an average is a single number taken as representative of a list of numbers. Different concepts of average are used in different contexts. Often "average" refers to the arithmetic mean, the sum of the numbers divided by how many numbers are being averaged. In statistics, mean, median, and mode are all known as measures of central tendency, and in colloquial usage any of these might be called an average value.

https://en.m.wikipedia.org/wiki/Average

Average

1a: a single value (such as a mean, mode, or median) that summarizes or represents the general significance of a set of unequal values

https://www.merriam-webster.com/dictionary/average

>In colloquial language

Further, if you go into the definitions of median, mean, and mode on Merriam Webster's, only "mean" actually mentions the word "average." It shows up in the "synonyms" section for median, hilariously, but not in the definition itself. It is then probably least incorrect to assume that average refers to the mean unless there is some previous understanding that it doesn't (and since you presented the other meanings within a hypothetical, obviously there was no such understanding).

In any case, since I brought up the word "average" in the first place, and in all reasonability meant it to refer to the mean, I don't know why you're still arguing with me about this. You read an marginal meaning into my text to make a pedantic point and have wasted both our times.

I have a degree and I've never made more than $35,000 in a year, pre-tax. This is not uncommon.

This is a strawman. It's not impossible to tax people.

Question: what do you think about a tax rate determined by wealth, rather than the first derivative of wealth (i.e. income)? When a person whose net worth is $10,000 earns $5,000, should they be taxed the same way a person whose net worth is $1000,000,000 earns $5,000 is taxed?

The reason your tax rate should be determined by your income, rather than the first integration of your income (i.e. wealth), is because just having wealth isn't hurting anyone. If I spend every evening in my garage fixing up an old car, and increase its value from $1000 to $2000, I've increased my wealth but I haven't negatively (or positively) affected anyone else. It might be useful as a means of generating government revenue but it isn't something that needs to be taxed on its own.

Spending money, however, does affect other people - it reorganizes their incentives to produce more of the thing you spent money on. This can lead to weird situations where a homeless person has 0 effect on market incentives even though all they want is a blanket, but a rich person can motivate tens of thousands of people to assemble her another yacht to leave at her vacation home. So you can make your car aa valueble as you like in the privacy of your own home, but as soon as you want to use that to start affecting market incentives (by selling it then spending the money), prepare to get taxed.

Technically a consumption tax would be better than an income tax, but most people spend most of their income so it isn't that different and it's easier to make an income tax progressive

Having wealth does influence the ability to spend money and work on things like regulatory capture rather than productive investments.

Wealth doesn't, income does. If I buy a car and work on it to add $1000 to its value, I've increased my wealth but have not changed my income or purchasing power until I realize those gains, at which point my $1000 income is taxed (as it should be)

The superior model that has proven to work is Islam's Zakat. It's sort-of-but-not-really a wealth tax. 0% income tax, 0% gains tax, and only people who hold commodities over a certain threshold are taxed (meaning the poor are exempted). Gold and silver holdings for example are taxed at 2.5%, with a different percentage for cattle and produce.

As to your example, you won't pay a wealth tax on your car if you increase its value under Zakat. Now if you want to use it as a currency (start flipping cars) then it's different.

We already do have such a tax: inflation. The fed increases the monetary supply and uses it to buy treasuries which help fund the government.

The problem is the rich have lots of options so you need to consider second order effects. If you print lots of money (as we are now), people and especially the rich tend to exchange their dollars for assets, such as stocks, art, etc. If you attempt to tax those assets as well, people will purchase other untaxed assets.

I'm also not sure it actually matters as much as people think. It's not like Gates, Bezos, Zuckerberg, or Musk are using their funds to compete with the average person, IE buy up all the beef. Them having less really won't make us more efficient at producing food or increase the amount of housing available in cities.

Yes, but one of those second order effects of inflation is the relentless drive for growth that's burning people out and contributing to climate change: inflation causes those with the most money to demand higher and higher rates of return on their investments (to keep up with inflation), which drives management (through pressure from the board) to drive organizations harder and harder, often to the detriment of long term objectives.

I would argue that drastically cutting inflation might help reduce income inequality over time.

It’s really frustrating how simple and true this is yet difficult to brand and market correctly.

I don’t think it’s difficult to brand and market correctly, Bernie Sanders did a great job.

Edit: Hacker News, where even mentioning Bernie Sanders gets you downvoted.

Punitive taxes on a minority group to satiate the flames of envy? That doesn't sound like productive policy.

Strawman. Also, the rich are not a minority. they project so much power that to call them a minority is almost racist.

It isn't about envy. I don't want everyone to have luxury cars and steak dinners every night. But I also don't think we should be subsidizing wal-mart, amazon, megacorps who continually rape our country and avoid taxes. We don't need to tax that much more to help balance the scales.

Of course, we can keep ignoring it. And then there will be blood. Look at history - it will come.