Leaving that aside, the 1% pay 38.5% of taxes, which seems quite fair as is. We already tax the rich quite heavily.
I'd rather the focus be on compliance. Close the loopholes and catch the tax evaders.
Wealth taxes, if you look at examples elsewhere both present and historically, are hard to do well. I worry the government is not sufficiently competent ( now or in the future) to implement it correctly and it does more harm than good. It's very easy to drive capital offshore and take the potential investment and job creation with it.
Money at the top levels is not at all like money for the rest of us. For a middle class citizen, money is about consumption and freedom to do what you want (with enough of it).
At the top end of the distribution, money is no longer about consumption or freedom (since you can never realistically consume as much as they have, and you don't have to work after you've saved like $10M). Money at that level is a proxy for power - a group of oligarchs can basically have the power of a shadow government, but unelected. And the real question to ask is "how much power/leverage do we want an individual (or a group of rich oligarchs) to have in a democracy."
So taxing the rich is not even about spreading the wealth, necessarily - if you redistributed it directly you might get inflation by redirecting investment money into consumption. It's more about limiting the amount of power that a person can accumulate over others.
Does this not beg the question why not just limit power itself rather than limiting wealth with the target side effect that the wealthy will not easily purchase power as a result?
Why is almost the entire species seemingly addicted to the idea that the power itself is not the problem? You can erect regulations on the corrosive influence of money in politics until the cows come home but as long as the ROI on lobbying is positive, it's a given that's going to be the result.
On the other hand when there's no power to buy nobody buys it by definition. Adjust above extreme observation appropriately in order to justify the minimal possible tolerable conglomeration of power availability in any given system to find whatever tolerable level the reader ends up comfortable with. Or viewed uncharitably, arrive at the conclusion that's exactly what's already happened and the human affliction of slavish devotion to power is near universal and continuously growing and there's no way to escape it short of completely opting out of modern global civilization given the observed distribution of the population constantly seeking to increase it.
An extreme example of this would be a dictatorial regime where control of the government becomes a life-or-death concern for warring groups.
Maybe it's just a bug in humanity; control the world with this one weird trick.
Are there any credible studies on what would happen?
What about if you capped everyone’s net worth at 10m? Would that impact on the economy directly (e.g destroying money)?
But if you implement higher taxes at the to end, past what point do those people just leave, or leave on paper. There is an inflection point where the tax would actually do more harm than good. And nobody knows where it is. I'd like to see us get closer to it though, there is room to raise taxes on the very wealthy.
A bigger problem at that level is loopholes and compliance though.
If I make $400K and I only need $75K to live, the burden of my taxes is negligible.
If however I make $80K and I need $75K to live, taxes are an unimaginable burden.
We fix the problem by evening out the burden, forget about loopholes, eliminate all but 2 deductions, dependents and primary residence, that's it.
Because the deductions have been eliminated lower the tax rate for each bracket to the effective tax paid for each bracket, the IRS has this data.
Then end capital gains tax, all income is taxed as earned income.
These changes will give 99+% of the population a tax break, and it will simplify taxes drastically for everyone.
The final step is to add 2 new brackets,
>$5M with a tax of 45% >$10M with a tax of 69%
The rich won't need to be making decision about if and when to eat, but the burden of taxes will get leveled out.
We'll also have enough money to pay for Universal Healthcare, and probably college tuition for everyone.
Go lookup the charts for income inequality for the U.S. When the GOP tax cuts from Reagan's first term took effect the income inequality gap started in earnest.
https://en.wikipedia.org/wiki/Income_inequality_in_the_Unite...
Wealthy people can keep their money growing inside a corporation essentially forever. It never becomes “income”; instead they just borrow against the assets at exceedingly low rates of interest as well as classifying personal consumption items (like a private jet) as a corporate expense.
It’s possible to keep doing this until death, or even longer.
I agree with the general sentiment of your post (though I disagree that capital and labour should be taxed the same way). I'll also add the following: implement an LVT. It is the most economically “efficient” tax there is, and morally perfect at the same time. Then with the money you collect through LVT you can lower income tax.
If you include transfer like EITC, the US tax code is highly progressive and the tax burden on low income earners has only gotten less (e.g. Trump’s doubling of the standard deduction).
I would argue your plan to “fix” the tax code is already flawed if the basis of your changes is wrong.
maybe they are because conservatives design it that way? irs dont go after big corps because of luck of funds
Given the fact the top 1% hold 43% of the global wealth I think they aren't paying their fair share...
There is no need for someone to have 100 billion dollars they an struggle by with 10 billion easy enough .. or even 1 billion
https://www.trtworld.com/magazine/top-1-percent-of-household...
Us? The people? That's how you do decisions in a democracy.
And obviously funnelling all that money and economic capital to some central state isn't gonna go well so levels below and above the state need to be reinforced.
First off you can't buy a home in some parts with that kind of money. But that aside, you'd stifle most incentive to innovate, provide jobs, and live in your country. Anyone who thought they might pass your 1M limit will just leave to a country that doesn't do that. No offense, but I've never been interested in living in the US and you'd have to pay me quite a lot to accept a green card. I certainly wouldn't take it if offered freely, because it comes with a major tax liability. There are nicer places in the world by a variety of metrics.
So if you chase away everyone with wealth you'll be left paying 100% of the taxes instead of 60% and with no jobs to pay them with. Good luck with that!
Look to Soviet Russia, Cuba, Venezuela for examples of how that plays out.
Thanks for the compliment. I guess you must know better than Picketty (he doesn't exactly say what i said, but does promote very aggressive taxation of capital, which is the same goal more gently said). Go study for yourselve before insulting right and left. I know i did, i'm reading monthly issues of "le monde diplomatique".
> First off you can't buy a home in some parts with that kind of money.
Perhaps instead of 1M$ you'd prefer if i say "the equivalent of 100K ton of wheat at retail price"? Obviously i'm talking from the perspective of my local living standard which is west-european 500M people city.
> No offense, but I've never been interested in living in the US
None taken, me neither.
> So if you chase away everyone with wealth you'll be left paying 100% of the taxes instead of 60% and with no jobs to pay them with. Good luck with that!
Ok so that's the only argument of your comment. It has been debunked time and time again that for individuals, fleeing a country because of taxes is minimal. Corporations do that. And it can be fought by taxing international transactions (which every sane economy but the EU does anyway). Yes, in the end, it becomes a frontal fight between the financial and industrial establishment and your local economy, which obviously will need some negotiation because they can hurt you, but let it be clear that without them, it would work quite well (and in reverse, in my economy, it would be quite hard to practically be capitalistic). I don't even want to eradicate capitalism, i'd just want to not mainly depend on it for living and tip the balance to a much more reasonable state.
> Look to Soviet Russia, Cuba, Venezuela for examples of how that plays out.
You realize that my arguments were communist-ish? You're not gonna scare me off pointing at these countries! Obviously things went bad because the liberals virtually control the world, so these countries had to fight for everything, which breaks at some point. And obviously i'm not defending dictatorship (and please note i'm not using this strawman of the numereous capitalistic dictatorship against you).
>(he doesn't exactly say what i said, but does promote very aggressive taxation of capital, which is the same goal more gently said).
Well true, he doesn't say exactly what you said, because he doesn't anything like what you're saying. Taxing wealth above the relatively low ceiling of 1M USD at 100% would be ridiculous. He is, though, in favour of a progressive tax system that, crucially, reduces inequality below “tolerable” levels, where an “intolerable level” is a level which results in imbalances of power which undermine or destroy democratic rule and oppress those without wealth.
So his practicable suggestion is a global coordinated effort to tax wealth and reduce inequality, which his utopian suggestion is a trans-national socialist economy with true democratic control over the economy.
Also i'm not really sure what's so "ridiculous" about it. I'm not saying the next president of random country should do that. But after sufficient transitioning, in a state of the economy where we have "tolerable" inquality, we should lock it with a hard cap.
To make it even clearer, i believe most "things" should have a cap on how much you're able to posess (perhaps with exceptional derogations, or additional taxation): the number of houses, cars, land, gas, plane travels, eletronics, clothes. For most people it wouldn't be a constraint as the cap would be on the level at which you can realisticaly use it personally, but i think achieving that would prove a deep shift in mentality.
Yes, he didn't say anything remotely like you said. It's disingenuous to cite Picketty as if he would support your position.
> has been debunked time and time again that for individuals, fleeing a country because of taxes is minimal.
Because the difference in taxation is minimal. I used to live in Panama, I've personally meet people who fled tax rates in their home country. The low taxes was also my favorite thing about living in Panama. Personal anecdotes aside, what you're proposing is drastic enough that the emigration won't be minimal, it will be a mass exodus of the wealthy - you know the people paying for 40% of the services you benefit from.
> You realize that my arguments were communist-ish? You're not gonna scare me off pointing at these countries! Obviously things went bad because the liberals virtually control the world, so these countries had to fight for everything, which breaks at some point.
I don't know where to start with that without violating site guidelines and being uncivil to your intellect. Actually are you trolling me? I have trouble believing you could be serious right now.
There's a lot of bigger reasons communism failed. Your proposal would fail for much the same reasons. This comment of yours is so ignorant of history it is mind boggling.
People love to trot out the USSR as a failure, ignoring that a major part of that failure was due to Perestroika and Gorbachev.
As for Cuba, the US has waged terrorist campaign against them for 70ish years. Venezuela has had to deal with US interference and attempted coups as well.
You can't talk about communist/socialist societies and completely ignore the external forces acting against them.
P.S. Cuba and Vietnam are still around and still socialist.
Edit: Actually, looking at all your arguments here, you just scream about how socialism doesn't work and if you disagree then you're dumb. Get better, please.
Note I said communist, not socialist, which might include Scandinavian counties, and works just fine.
If you disagree, you don't know your history. Get educated.
I visited Cuba recently. It's improving now that they're embracing capitalism, partially.
But I still saw people plowing fields with oxen. I've seen very poor people in developing countries, but I haven't seen that first hand. The level of poverty in Cuba is pretty bad still.
>But I still saw people plowing fields with oxen. I've seen very poor people in developing countries, but I haven't seen that first hand. The level of poverty in Cuba is pretty bad still.
Do you think that has anything to do with the US embargo on Cuba? (Y'know, one of those external forces I was talking about originally).
Jobs don't need to be "created". Either there's stuff to do for people to live correctly or there isn't. If there is, try to find people who'd like to do it. If nobody wants, either people don't really need it, or it's a chore and organize it fairly and locally (division of labour makes no sense for non-qualified chores, it's just a byproduct of inquality: i'm not taking out my neighboors trash, what we could do tho is mutualize our chores). Then distribute the result of this work fairly. Everything else than life-support can be done without too much constraints, but i strongly believe that even that won't "naturally" be too much capitalistic.
Wealthy people will push for income taxes while trying to eliminate capital gains and inheritance taxes.
This conversation came up years ago when Bill Gates Sr tried to push for income taxes in Washington state and critics pointed out that it would not affect wealthy people.
Because of consolidation and the unique governance structure of the US, these folks are enormously powerful today.
Income tax taxes people who work for a living. Property + capital gains tax both tax assets appreciation and rent seekers (unless the investment is a high risk venture into a startup or something ambitious).
States without income taxes usually rely on sales or excise taxes. In a “high tax” state like New York, poor people don’t pay income tax nor sales tax on food or clothing. (A significant expense) Usually high tax pressure is from property tax.
In a state like South Carolina, you have income tax, but property taxes are very low. They make up for that by taxing food, which results in higher taxation for poor and elderly people.
Yet Washington is "regressive" since it doesn't have income tax. Los Angeles would actually be more "regressive" by this metric.
This is why i think its a psyop. Somebody wants the lower and middle classes to fight.
1: https://www.cdtfa.ca.gov/taxes-and-fees/rates.aspx
2: https://kingcounty.gov/independent/forecasting/King%20County...
If indeed there are lots of very wealthy people who are calling for higher income taxes on high earners (and I personally didn't think that was something so common as to be a stereotype) then that's hardly the worst thing they're doing.
It comes across as someone who really doesn't like taxes, probably because they've listened to too much propaganda generated by very wealthy people who have a vested interest in taxes being seen as a universally bad thing.
This is called “pulling up the ladder.”
The ‘Millionaires for Humanity’ don’t specify what taxes they’d like to see raised, but they emphasize they want it on themselves.
And from the third article:
> Several members, including Molly Munger, the daughter of Charlie Munger, the longtime vice-chairman of Warren Buffett’s firm, Berkshire Hathaway, have spoken in favor of a wealth tax.
Why does the middle class clamor to raise taxes on the rich, which won't appreciably benefit themselves, when they could instead push to lower taxes on themselves, which will benefit themselves?
Maybe different in Europe, but in the USA tax increases do not find their way back to benefits for the public.
I mean unless by "public" you mean the next country we want to "liberate" and bring "democracy" to...
"Money at the top levels is not at all like money for the rest of us. For a middle class citizen, money is about consumption and freedom to do what you want (with enough of it).
At the top end of the distribution, money is no longer about consumption or freedom (since you can never realistically consume as much as they have, and you don't have to work after you've saved like $10M). Money at that level is a proxy for power - a group of oligarchs can basically have the power of a shadow government, but unelected. And the real question to ask is "how much power/leverage do we want an individual (or a group of rich oligarchs) to have in a democracy."
So taxing the rich is not even about spreading the wealth, necessarily - if you redistributed it directly you might get inflation by redirecting investment money into consumption. It's more about limiting the amount of power that a person can accumulate over others."
The regulatory state, even if democratic, is fundamentally self-disregulating (as opposed to self-regulating).
Or, if you're a jaded cynic, the rich are mostly just greedy sociopaths. They want to minimize their own tax burden and give zero fucks about the betterment of society. They got theirs, screw everybody else.
When I lived in the US, the vast majority of my taxes went to the federal government and didn't come back in local benefits like schools and roads.
(Sure, federal money comes back to universities in the form of research grants which pay for foreign PhD students to work in bullshit paper mills. I've seen that firsthand. The wastage of federal money is near 100%.)
Separately, I've known lots of rich people. Of course, they are just like other people. They are not all greedy sociopaths. Grow up.
The money we pay in federal taxes (whether it be income or other taxes) doesn't just vanish into the ether, it comes back via various government programs.
Regardless of any specific programs I did or didn't list above, the money we pay in federal taxes doesn't just vanish into the ether, it comes back via various government programs.
A significant share of road and school funding comes from the federal government, which doesn’t levy property taxes. Another significant chunk usually comes from the State, which in many states does not rely on property taxes.