I don't think wealthy are paying much taxes, percentage-wise (significant in dollar value though). There are simply too many tax minimization instruments that they have at their disposal. It's the middle class that is carrying the brunt of taxation. So when they say "tax the rich", what they really mean is "tax the middle class and small business owners". Eventually, you would run out of "other people's money" and you will have a society of super-rich and super-poor. I suspect it won't be a good place to live in.

I was under the impressions that the "tax the rich" mentality actually aims to close these loopholes for the super-rich. The idea is (I think) that increasing taxes on the literal top 1% or 0.1% just a little is much more effective than increasing them across the board.

What we the little folk mean for "tax the rich" is indeed "tax the mega rich". What gets implemented for "tax the rich" is a different story, because lobby can more than often sway implementations.

i mean the low hanging fruit of "close these loopholes" would be reinstatement of a progressive income tax.

The ultra-rich certainly have tax minimisation schemes in place, but by saying that middle-class bears the brunt of taxation, I suspect you're falling victim to the fallacy that rich people don't think of themselves as rich[1]. In the UK at least, the tax burden is fairly progressive:

https://commonslibrary.parliament.uk/research-briefings/cbp-...

The top 1% of earners pay roughly 30% of all income tax. The top 10% pay roughly 50% of all income tax. Meanwhile, the bottom 50% pay roughly 10% of income tax.

That leaves to 50-90th percentile, who you might call "middle class" (although it's debatable whether someone in the 80-90 range is truly middle class) who pay approximately 30% of all income tax. So the whole middle class only pays as much tax in total as the 90-99 range, although their total of pre-tax income is double.

[1] https://www.businessinsider.com/most-millionaires-dont-think...

While this may all be true, a more sobering perspective comes from considering the impact on the individuals paying the taxes:

"the poorest fifth of people paid 22.9% on indirect taxes such as Value Added Tax (VAT) compared with 9.1% for the richest fifth" [0].

"As it stands, there is set to be both an Income Tax rise and Income Tax cut in 2024-25, and a further tax rise in 2025-26, with a net transfer from lower- to higher-income individuals" [1].

To return to parent comment's point, trickle-down economics have demonstrably failed. Taxes are avoided by the rich while punishing the poor - surely absolutely not what should be happening.

[0] https://www.ons.gov.uk/peoplepopulationandcommunity/personal...

[1] https://www.resolutionfoundation.org/publications/happy-new-...

There aren't very many historical examples of societies with high income tax, mostly because being able to effectively collect national income tax is a fairly new invention after all.

But the examples we do have include USA in the 1950s (top tax bracket 91%) and Sweden in the 1970s (top tax bracket 87%). Those are some of the most successful societies ever, especially in comparison to their peers at the time. Even the extreme right in these countries sees those eras as national high points.

I don't think there's evidence that taxation on its own creates stratified societies of super-rich and super-poor. For example, the problems of Brazil are largely unrelated to the tax rate.

That's exactly how Canada is like. Monopolies dominate the industries and middle class are dying

My hunch really is lowered taxes on the wealthy and low interest rates for insiders is all about the cap rate and cash-on-cash return.

Increased taxes do a number on those and make it easier for non finance parasites to compete for assets.

The obvious problem is that if wealthy people get more money, they literally can't spend it all, so the just invest it instinctively/based on reflex. But here is the problem, what if they don't invest their money? What if they keep 10% of it liquid? Spending money or investing it puts money in the hands of the rest of the economy. Not spending or not investing it means there is no income opportunity for anyone else, that money is essentially dead to the economy and dead money has to be replaced. This means people need to borrow money at the rate money dies, they need to go in debt to replenish all the dead money.

Here is a problem, at some point the debt load on the economy is so high, people refuse to take on more debt, but the system demands yet more debt. What happens? Since money is leaving the real economy and just doing nothing, deflation will occur, which will increase real returns above zero, even if the interest rate is already zero. We would expect that if people save more money and nobody borrows more money, that the return on money goes down but with deflation the opposite happens! Real returns start going up, which makes all economic activity in the pyhsical economy unprofitable. Imagine if you set a land value tax that is higher than anyone wants to pay, everyone would abandon the land and in the same way a too high return expectation makes people flee the physical economy into the financial economy.

In other words, the completely obvious and reasonable option of paying off your debt doesn't even exist, it simply is not a legal move in this board game we call the financial economy.

The completely obvious answer to this problem is to let yields become negative to counteract deflation, the end result is that the real return is zero, people get to pay off their debt, people who refuse to spend or invest get disincentivized from holding onto dead money and instead make it available to those who need it.

Here is another perspective: In functioning markets we expect that resources are allocated to those who have too few of them, like food being sold to starving people because they are willing to pay higher prices which solves food shortages as it becomes more profitable to become a farmer and produce food.

We should ask ourselves then, if farming works as intended (with some caveats) then why on earth does money not follow the same principle? Why doesn't the economy try to allocate money to those who need money the most? It is rational and efficient to do so, yet in our current economies we come up with tons of post rationalizations to defend the status quo. What we see instead is that money is allocated towards those who need it least, money compounds and allocates more money to those who already have too much. This is clearly inefficient, it means less total economic growth, it means lower wages for everyone, it means centralisation of the economy and increasing dysfunction as a result of valuing a handful of preferences more than everyone else's.

A negative interest rate on cash deallocates money away from those who don't need it and makes it available for those who need it. The wealthy can keep their wealth, they just have to keep it in the real world and not in some abstract "stores of values" that upon further inspection don't change in any shape or form even as their "value" changes. Spending more money on the same shiny rock doesn't make you wealthier, it just gives you the illusion of wealth. Imagine owning a kilogram of gold and doubling the population and thereby doubling the amount of gold buyers and thereby the price of gold, the real wealth doesn't exist inside the gold, it exists in the form of the doubling population, the owner of the gold did nothing to double the population so it doesn't make sense to give him twice the share in the economy just because the population doubled, that would mean someone else would have to give up their share in the economy.