Posted by bifftastic 11 hours ago
If you’re lucky enough that you don’t need to work for your income, you should be taxed. A lot. How much? Enough to make sure you don’t become so rich that your children don’t need to work.
Being rich is not fair, it’s very rarely deserved, and it needs to be taxed unfairly.
1. Most people do not derive even a fraction of their income from interest on wealth.
2. Earning income from interest on wealth requires zero effort. That isn't true for salaries.
3. Income and wealth are totally different things. You can find a way to equate them in one contrived example but there are so many other factors involved in the real world.
Billionaires gonna billionaire.
The "example" discussing paying income tax on your $5 of return on your capital is similar nonsense. You don't pay anything on that gain unless it's income, which it isn't unless it's realized. So (assuming the various parameters of a wealth tax meant this mythical $100 person would indeed pay a wealth tax), the comparison is between zero income tax and some nonzero amount of wealth tax.
> None of them would speak of adding a "mere 20%" to the income tax rate, even though that's mathematically the same thing.
Plenty of politicians (e.g., Bernie Sanders, AOC) have pointed out that the top income tax rate during the 1950s was over 90%, and have suggested raising rates back or near to that level, which would be well more than a 20% increase in the income tax rate.
Off the top of my head:
* 'Income' generated from loans using shares pledged as collateral should be treated the same as if you sold those shares.
* Someone receiving an inheritance over x million dollars (carve out 95% of family farms and small businesses if you want), should pay taxes on it as if it were any other windfall
* Donor advised funds should have a 5% distribution / yr requirement, same as private foundations
* capital gains should probably be treated as regular income. I have no idea why 50k in gains on INTC is somehow privileged over the salary paid to a roofer working in the hot sun.
Who is the single largest taxpayer in US history? I'll wait while you google it.
To say the wealthy can afford to radically optimize taxes and that our system taxes capital much more lightly than labor seems accurate to me, but I just haven't seen offers for "pay zero tax for all your life" from high grade professionals.
If US citizens want that, they generally give up their citizenship, pay their exit tax, and live in a low tax jurisdiction. I do know people like this, and they are very unlike the 0.1% types you're referring to here, and they've given up the benefits of being a US citizen in exchange for their preferred lifestyle. (And paid a mark to market exit tax on all assets on their way out of the country)
Bezos did, in 2007.
https://www.propublica.org/article/the-secret-irs-files-trov...
> Consider Bezos’ 2007, one of the years he paid zero in federal income taxes. Amazon’s stock more than doubled. Bezos’ fortune leapt $3.8 billion, according to Forbes, whose wealth estimates are widely cited. How did a person enjoying that sort of wealth explosion end up paying no income tax?
Or the President (now permanently immune from audit, incidentally):
https://www.nytimes.com/interactive/2020/09/27/us/donald-tru...
> He had paid no income taxes at all in 10 of the previous 15 years — largely because he reported losing much more money than he made.
On paper, I'm sure. Let's not pretend that's reality.
Continuing to accept this person as a credible source of information isnt a reasonable thing to do.
The median net worth in the US is ~$200k. A lot of middle-class folks have likely paid more taxes in their lifetime than their entire net worth.
But they certainly get clever about techniques to keep it as low as possible, for shockingly low effective tax rates.
https://www.propublica.org/article/the-secret-irs-files-trov... has a whole bunch of examples.
The propublica number was like 4.5% or so if I recall, and does not count the taxes paid by the companies these people owned, nor does it imagine the financial benefits to say California teachers or firemen who co-own the companies through pension funds, nor does it reduce for effective wealth, nor does it reduce for unutilized wealth, e.g. if the stock price goes up and you don't sell or borrow against it, have you received benefit that makes sense to tax?
But if you net all those out and told me the effective rate was 12-15% on utilized capital, I wouldn't be surprised. I would be really surprised if it was $0 though.
Why should they? Should I get to count the taxes paid by my local water treatment plant workers because I shit in the toilet?
> nor does it imagine the financial benefits to say California teachers or firemen who co-own the companies through pension funds
They get taxed on that!
The funds don't get taxed on unrealized gains. Nor do the pensioners. They do get taxed on spendable income they get out of the fund's investments, just like the other owners of the company.
> [Should we look at the benefits to society of corporations paying taxes?]
I think so.
in other words, you are talking to someone in the stupid-wealthy class. you are not going to convince them of anything -- especially not that billionaires should pay more.
its like trying to convince Jon Moore (Phillip Morris USA CEO) that cigarettes should be banned.
The bottom of the list would be anyone who works for the state, as they are a massive net tax negative, followed by benefits recipients and pensioners, followed by low income workers, followed finally by the middle classes.
Are you sure you want that to be your guiding principle?
Get rid of the billionaire and the taxes still get paid.
Why do we credit those taxes to the billionaire rather than the employees?
You can tell from the way they talk about the subject that they don't understand what they're talking about.
> Each 1% of wealth tax is equivalent to 20% of income tax.
Mathematically sound.
> Politicians understand that an additional 20% income tax would be a lot. And indeed a US state that added 20% to its top income tax rate would have extraordinarily high taxes.
That's the point.
> In the median case, US state politicians talking about adding a "mere 1%" wealth tax are talking about causing the residents of their state to have the highest taxes in the world. That's not the sort of decision you make lightly.
Not "all of the residents". Specifically the ultra wealthy that have a billion dollars. 20% at that point, is 20% of lots. You still have lots left over.
Mathematical fairness isn't the point, which is one reason there isn't a flat tax rate.
> Mathematically sound.
Don't most wealth taxes that have been proposed have a certain level of wealth that you pay no taxes on? If so, doesn't that make this at least partially incorrect?
Maybe I'm missing something, but if I have $100 and have to pay a 1% wealth tax on it then sure that's roughly 20%. If I have $100, but I only have to pay a 1% wealth tax on everything over $90 that's more like a 2% income tax.
Income (or revenue), what is left over freom the paycheque (profits) and net worth (market cap) - applying a simple ratio to companies of revenue to market cap doesnt work, why would applying a simple ratio of income to net worth for people who live hand to mouth and billionaires work any better.
It's not about companies - it's about showing an equivalency between a Piketty-style tax of wealth setup and what we're used to thinking about in the US, an income-style tax setup on individuals.