But then you say:
> all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation"
Why is avoiding taxes different than any other moral problem? Why cannot you say, "putting conmen in prison" in the end means "smart conmen will avoid prison". It's this moral defeatism that gets me.
Sure, there will be people who do immoral deeds and avoid being caught, but how are we better off by not trying to catch anyone?
It's even in the open, that the large corporations pay little taxes, everybody is a witness to that. You (as a society) can change that system if you want.
"Tax the rich" sounds kind of like a good idea at first but then you take into account the point about how the rich have lawyers, lobbyists, and accountants. Rich people and companies already figure out how to subvert tax laws. Why wouldn't they figure out how to subvert the new laws they are clamoring for too?
Put another way, is Bezos supporting this law because he wants to be worth less?
I'd prefer we solve things more directly. Break up big business via anti-trust. Stop businesses from buying one another. Rather than raising taxes let's just simplify the tax code so it's automatic and there is minimal ambiguity or flexibility for creative tax accounting. Let's bring legal cases on all the questionable tax strategies big companies are engaging in. Raising taxes to hope we catch the big guys doesn't seem like a smart plan to me. It seems more likely they'll dodge the increase and smaller companies will get hit with it.
Well, I don't see how it's feasible or desirable to do things more directly. You're saying BigCos are a problem, and you want to disincentivize their formation, then picking them on one-by-one basis will actually require more expertise and more effort, compared to having laws (e.g. tax laws) that apply broadly, and then enforce these laws.
We have laws precisely so that we wouldn't have to decide every case individually, and that the rules are clear to everyone, so they can avoid possible (and arbitrary) punishment.
I also think that as long as you want to tax all corporations the same, there will always be an inherent advantage in being big. That's why many people suggest progressive taxation in various forms to disincentivize such empire-building.
> Raising taxes to hope we catch the big guys doesn't seem like a smart plan to me.
This is a straw man - nobody is arguing just for raising taxes and then not enforcing those laws, we would love to enforce these laws of course. But having them is the first step to enforcement, I don't think your approach (enforce something without support from laws) is more viable, even legally. It requires more regulatory expertise, which you argue we are lacking compared to corporations.
Also nobody is really arguing against tax code simplification, but it only can get you so far.
Big governments love a couple big businesses because it’s much easier to infiltrate, influence, control and ultimately procur wealth with that small group of businesses rather than attempting to influence 100’s or even 1000’s of smaller and independent companies.
So the next time you see 3 domestic car companies, and 3 airplane makers, and 4 toilet paper makers, 3 oil companies, etc. Understand they want it that way because of control and $$$$.
In theory I am all for it but on the other hand what would be the allowed size? I can hardly imagine mom and pop shop producing Lithium Ion cells, starting foundry etc, etc. This measure could put country to severe disadvantage against any other that does not implement same measures.
To be more practical and keep competitive edge internationally I'd just milk big companies by way of taxes and make sure there are no loopholes and perks like foreign earning exceptions etc. And outlaw political corporate lobbying.
> all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation"
I think they are usually talking about avoidance (legal), not evasion (illegal). while some avoidance schemes do toe the line of outright evasion, I (perhaps naively) don't believe ultra-rich people routinely employ illegal tax strategies.
personally, I'm okay with the fact that some people will inevitably break the law and not get caught, as long as it's not pervasive. if nothing else, they will have to live with the anxiety that the music might stop for them at any moment.
what I'm not okay with are the "tax the rich" initiatives that look good when condensed to a set of talking points, but in reality are just a tax hike for the upper-middle that will be easily (and fully legally) avoided by the wealthiest people. convince me you have a solution for that before you come for even more of the wages I actually work for.
Isn't a complex tax code a moral problem for the same reason? The other way to attack the problem would be to simplify tax codes more.
Notice that there isn't an argument that Zuckerberg should have less money. There is an argument that Mr Jones should have more. As far as anyone on the left is concerned that would decrease equality (the obvious way to achieve it is less transfer payments from the middle class to the poor).
This is an oft-touted talking point, but not actually correct. If you add up all the numbers, most social welfare in the West proportionally goes to pensions and healthcare. Poverty relief is usually a smaller budget than corporate welfare. This article (0) shows the distribution for the US.
Additionally, part of US social welfare specifically enables companies like Walmart to get away with not paying their employees a living wage, so is de facto corporate - not social - welfare. In short: thinking of it in terms of "the poor are the problem" only helps hide the wealth transfer from the middle class to the upper class.
There is no way for the middle class to have more money while keeping the wealth for the upper class constant, because the system already trickles up middle class wealth. At some point, we should be expecting companies to pay their dues and change rules to make them: corporation tax, liveable wages, overtime compensation, emissions, pollution, workplace safety and perhaps even off time caused by burnout.
0: https://www.usgovernmentspending.com/us_welfare_spending_40....
UBI solves all these issues nicely. People get to spend the money in the way that works best for them. Because they aren't 100% tied to the corporations, the worst, lowest paying jobs gain leverage when negotiating.
While not the best solution, it is far better than current welfare. Even Milton Friedman supported UBI in this context.
They're just shackled to a government handout making them totally dependent on the government of the day's generosity or lack thereof.
This seems to relate to marginal income tax rates, not corporate taxes.
>and all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation".
They don’t have to. Simply eliminate deductions and credits and exemptions.
There’s nothing at all simple about switching from one to the other. (Grocery stores in particular would be extremely hard-hit and a lot of us rely on them to survive. The wheels would come off quickly if not carefully thought though.)
If the issue is it affecting poorer people adversely, then that should be addressed by making them less poor, e.g. the government giving them money.
Whole Foods could conceivably become the equivalent of a discount grocery by virtue of such integration, after Amazon bought up farms and distribution channels.
Simply? In a global world economy? There is nothing simple about it.
One could argue that the US is already an Oligarchy or more accurately an 'Oligarchic Plutocracy' which has accomplished all of the above.
Even I would refer to USA as democratic, but there is lot of evidence that the democratic component is pretty weak.
This seems like a false narrative to me.
For example, the policies Biden is putting forward tax household income at those above $400,000 annually and above, which is firmly in the 1%. This isn't your plumber or single babysitter.
In addition, they are discussing a minimum corporate tax rate and closing loopholes so that corporations and individuals can't pay 0% in income taxes, which is what many are paying now.
If the numbers at https://dqydj.com/average-median-top-household-income-percen... are correct, the "top 1%" household income threshold in the US in 2020 is $53lk. $400k is closer to the "top 2%" level.
More importantly, these numbers like "400k" tend to not be inflation adjusted (e.g. the cutoffs for the net investment tax and the additional medicare tax are not, cutoffs for phaseouts of the child tax credit are not, etc). And income percentiles grow faster than inflation. Looking at that same data table, it looks like the percentile boundaries grew 6%+ year over year from 2019 to 2020. If that's not a fluke caused by the pandemic in some way, then in 10 years you expect something like 1.79x growth in the cutoff numbers, which would put $400k at about the "top 8%" level at that point.
Is it possible that your idea of what level is "firmly in the 1%" is just a few years out of date?
Take the raw numbers. Yearly household income of $400,000 is not gong to affect the baby sitter or local contract plumber. I stand by my assertion that the OPs comment was attempting to distort the narrative.
Yes this may need to be adjusted for inflation down the road, like anything else.
I suspect that both of those claims are dubious, by the way. Someone with more wealth is in fact likely to employ more plumbers (due to having more toilets) and babysitters-per-child (full-time nannies, tutors, etc). And given how low-margin grocery stores are, I don't know that I'd expect a grocery shop owner to end up with $400k+ taxable income....
> Yes this may need to be adjusted for inflation down the road, like anything else.
My main point about the inflation bit is that it's disingenuous to introduce a new tax with a claim that it "does not affect the middle class" when you know with near-certainty that in 10 years or less it absolutely will. In fact you are banking on that to make the numbers you depend on actually work out.
Almost all proposals to "tax the rich" that do not come with automatic inflation adjustments built in are just proposals to tax the middle class in disguise.
Many EU states seem to get this very wrong.
I agree in principle, but reducing immigration and restricting free trade aren't policies that make the poor rich; they're policies that benefit those in possession of scarce resources at a cost to the rest of society.
Take steel tariffs for instance. They benefit the steelworkers, at the cost of every domestic industry that consumes steel. The entire economy pays to support an otherwise unprofitable industry.
Reducing immigration won't magically increase the supply of skilled workers. There aren't masses of unskilled poor who aren't going to college due to immigration putting downwards pressure on skilled wages. They aren't going to college because they lack the resources and opportunity.
Here's some ideas:
1. Tax stock buybacks similar to dividends. Or eliminate them entirely. This leads to...
2. Let unearned income tax brackets go up to the same % levels as earned income, only for different income levels. For example, if $400k in earned income is 38%, then maybe $2m in unearned income should also be 38%. Right now long term cap gains tops out at 15%, which is bullshit.
3. Since wealthy people borrow against their assets to spend, instead of selling assets and incurring taxes, place limits on interest deductions when doing this. There are already similar limits in place for mortgage interest deductions.
By using a tax ladder [1] (tax rate increases in steps).
He probably views it as an investment. Amazon has a keener interest than most in ensuring road maintenance is done properly and if that means a small increase to his tax bill he's probably ok with it.
He also desperately needs to score some progressive points. His reputation is getting trashed rn. I'm sure that factored in to his decision.
I'm skeptical of the notion that he wants this to keep competitors down.
Why wouldn’t he just advocate for road maintenance?
Edit: whoops, I didn’t read his actual statement. Tricked by CNN! Still, I’m a little skeptical of ascribing motivations to people like Bezos that aren’t in line with his past actions, but instead are in line with my personal politics, which is why I’m skeptical.
Something that people from middle class are not able to afford.
The other reason is that making difficult for members of middle class to accumulate wealth secures their own business, they are effectively killing the growth of potential competitors.
In the longer perspective this is very dangerous, it creates oligarchy, which, in turn, has all the incentives to restrict free market, free speech and democracy.
Middle class is important for the society since those are people who have time to engage themselves into public affairs, they don't have to spend all their time trying to earn money. In addition middle class is much more numerous than 1% of the wealthiest. As a result they give work to a lot of people who are down the social ladder. Both Mark Zuckerberg and some Mr. Jones, who owns a grocery shop employ a single babysitter, need a single plumber to fix their pipes, are able to eat the same amount of food, etc. So thousands of Jones are given job to much more people than single Mark Zuckerberg (obviously I am talking about Zuckerberg as a person, not his company).
That's why from the social perspective it is important to have as many Mr. Jones as possible. They give work to a lot of people, they drag them up. That's why taxing heavily middle class is a terrible idea and all the "tax the rich" regulations in the end mean "tax those who cannot escape taxation".