Rich people already do that. Do you think the average "wealthy" person has their wealth in a vault full of gold like scrooge mcduck?
The rich don't pay income taxes. They have capital gains.
Corporations pay taxes on income. If you don't charge corporations income tax, then you have to charge workers even more income tax to make up the difference. I guess that's better for "the poor" somehow?
> if you include second- and third-order taxes.
This is a phoney concept.
> Your rent could be $1000 instead of $2000 if your landlord's income wasn't taxed so much.
More likely your rent would stay $2000 and your landlord would keep more of it.
This is ridiculous. Plenty of people who most Americans would call "rich" pay income tax.
If you earn, say a $300k - $1MM/yr salary, you are rich compared to most Americans in most areas, and you pay tons of income tax and potentially zero capital gains depending on how you manage your finances.
If you earn $1m/year you have high income and a path to become wealthy quickly. But you aren't actually wealthy in my eyes unless you have the asset portfolio to match.
Yeah no shit, by circular definition of "doesn't pay income tax."
> I was talking about "generational wealth" people.
That's obviously not the same word as "rich."
Ah so then you did get my meaning the first time. Which means pointing out that some people who may or may not have assets also pay high taxes on their salaried income was unnecessary.
> That's obviously not the same word as "rich."
High income isn't rich. "Rich" is someone who has a lot of assets and wealth. That's literally the dictionary definition of the word.
"Rich and paying no income tax" -> largely the top end of the top end. The vast majority of rich people pay lots of income tax.
I'll go out on a limb and guess that you land in the category that most Americans consider rich, but you think attention should really be directed towards the ultrawealthy. Totally reasonable and capital gains obviously needs to be the center of that discussion, but let's not try to get there by just moving the line of what "rich" is and helping people delude themselves into thinking $300k+/yr is middle class.
There's ire directed at high income earners who pay high income taxes? This is news to me. Why exactly?
> just moving the line of what "rich" is
Again that's the dictionary definition of rich. But never mind that. This segment of the "rich" (if you want to call them that) is already well-taxed on their salaried income - we both agree. What's left to say about them?
Standard arguments about inequality? CEOs for instance attract much ire from their pay, often in the form of comparisons to their pay relative to the janitor working there or whatever.
It's a useless discussion - the questions should be what needs to be done, and THEN figure out how to pay for it, if necessary.
After all, an easy argument against the OP is that if my "blue collar job" is saved by a tariff, I won't CARE that I'm spending 10% more on laptops, as I still have the job!
Trickle-down economics aka Reaganomics. Companies don’t change based on cost, they charge based on what the market will accept. If the market has people willing to pay $12 for a burrito and their costs lower, they’re going to charge $12 for burritos and keep the profits. Fast food restaurants will often have discount meal wars, but notice that it’s only promotional pricing that’s changed — promotions end when they’re not useful anymore and regular menu prices largely move in one direction. If costs and availability are unpredictable, like they were with fresh produce during the pandemic, they’d probably just stop selling the product rather than having to repeatedly raise and lower the cost, which is why McDonald’s got rid of salads.
The rental market in the US is increasingly dominated by larger corporate players that leave units to sit empty rather than lower their prices because lowering a price on one unit lowers the market value overall, which makes other nearby units less valuable. Rent maximizing platforms are even doing this among independent landlords and they’ve been criticized by the FTC for doing so.
Reaganomics is just a plausible ruse to get non-rich people to support policies that largely benefit the rich and large corporations.
* ~14k in federal income tax * ~6k in state income tax (varies by state) * ~6k for social security * ~3k for property tax (varies by location and property value) * ~1k for medicare
That's 34%. It's hard to imagine another 46% on sales tax, tariffs, usage tax, car tag, etc. You could argue for another 7k (7%) in second order payroll taxes, but I don't know what you could consider a "third-order" tax. Please enlighten me.
A landlord who rents to you at BELOW the cost of the mortgage + property taxes + maintenance may have his reasons (appreciation) but overall that's not a sustainable activity.
Perhaps the most obvious is gas taxes or CRV taxes on cans, those get passed along directly. If you doubled gas taxes tomorrow, the price paid at the pump would rise - it wouldn't just be absorbed by the company.
Now conversely, when you drop taxes, that doesn't necessarily immediately get passed along, but if there is competition, it eventually will.
How much of that is left over for your landlord to spend? When they spend it, how much of that money is going towards paying yet other peoples' taxes? Those are your third order taxes.
For every $1 you make, about 3 steps down the spending chain, only $0.2 is in the hands of the people and $0.8 is in the hands of the IRS. That's what I meant by an 80% taxation rate.
If taxes were lower, all of your stuff including rent could be vastly cheaper.
There are countries with far better infrastructure that have less taxes. The US loves spending tax dollars on a bunch of inefficiencies and meddling in the affairs of other countries I will never live in, with my money.
I will say that what you spend your money on has a huge impact of how much the IRS gets at the end of the day. For an extreme example, if you give the money to a 501c then it's not taxed, and there are several ways the 501c could spend the money that wouldn't be taxed....
Maybe if they taxed me less, I donate more to 501c's that do more per dollar than the government does.
Profit of a company is small percentage of the moving money. Like 50c of $6 chipotle meal is profit and not all of that goes to the owner. Taxing owner at 50% rate instead of 25% would only increase cost a few cents. Same with landlords, there are fixed costs and loan costs that reduce profit. 100% of paid rent is not direct profit...
Actual issue of the progressive tax is truely rich people using tax evasion tactics to avoid it by structuring their income so that it belongs to some other tax category that doesn't have progressive tax.
That's assuming those things are sold at cost rather than a significantly higher market value.
But market value can go way above costs, and does sometimes.
An interesting aspect of this is rental costs in VHCOL areas; often the rents are WAY, WAY below the mortgage cost of the same property.
Why do people believe rich people again?
If you want to go that far, you could argue that almost every dollar in circulation eventually goes through the tax system at some point, so taxation is nearly 100%! Of course, this is nonsense that doesn't tell you anything useful.
Those slippery bastards.
If that tax doubled next year, what would happen?
From the landlord's bank account, hopefully.
It could have gotten there in any number of ways. Rent is the most obvious, but there's also the landlord's own paycheck, their spouse's paycheck, other investment income, social security payments, alimony and child support payments, gambling winnings, inheritances, loans.
> If that tax doubled next year, what would happen?
If it's a tight property market, rents go up. If housing is plentiful, or the local job market is in decline, the landlord eats the loss.
It comes from me.
> If that tax doubled next year, what would happen?
It would cut into his maintenance budget, utilities would break down, and I'd start paying rent into escrow until he ponied up.
Or he'd raise the rent by no more than 10%
I'm a landlord, and lol no, that's not how that works.
The rent my agent decides to charge on my behalf is decided by what the market will tolerate. They're always pushing to raise it, until there's nobody around who wants to pay the higher number. It's very much a number-go-up dynamic — I even had to explicitly tell them not to raise it during the pandemic when they wanted to, when the UK cost-of-living crisis was in the news.
The tax I get charged doesn't change what my tenants pay at all.
If you are a middle class person with a salary in the US you are likely paying upwards of 80% in taxes if you include second- and third-order taxes.
Your rent could be $1000 instead of $2000 if your landlord's income wasn't taxed so much. Your Chipotle meal could be $6 instead of $12 if the franchise owner and their commercial property landlord weren't taxed so much, let alone the workers.