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For the first time on record, the 400 wealthiest Americans paid a lower tax rate

nytimes.com

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Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#471

Post by coldtea »

tptacek wrote: post #375
jlmorton wrote: post #363

Earlier quoted context omitted.

> Is the purpose of taxes to fund the government or punish the rich? Government exists because of and for society, and the purpose of taxes is to create the greatest net benefit to society. Taxes are not to punish anyone, they are levied to fund services for society. Determining the optimum rate is complex and open to debate. But fairness is entirely irrelevant to the question. Whether the top marginal rate is 10%, o…

Right, but Rayiner didn't make any arguments about anyone's "inherent natural right to their capital" and I kind of doubt he believes in any such thing. His argument is subtler and much more important than that: if what we want are social services that resemble Europe's more than our own, what needs to change aren't the taxes on the top 1% of earners, but rather increased taxes on the middle class. Since I've seen Ra…

>if what we want are social services that resemble Europe's more than our own, what needs to change aren't the taxes on the top 1% of earners, but rather increased taxes on the middle class.

How about increased wealth taxation on the 1% of earners, and the 0.1% of owners?

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#472

Post by coldtea »

ameister14 wrote: post #397
jlmorton wrote: post #363

Earlier quoted context omitted.

> Is the purpose of taxes to fund the government or punish the rich? Government exists because of and for society, and the purpose of taxes is to create the greatest net benefit to society. Taxes are not to punish anyone, they are levied to fund services for society. Determining the optimum rate is complex and open to debate. But fairness is entirely irrelevant to the question. Whether the top marginal rate is 10%, o…

>We have a capitalist economic system, and it works pretty well for us, but that doesn't mean anyone has an inherent natural right to their capital. When it comes down it, property rights are all fictitious and exist only because society says it does. It's hardly wrong for society to decide to recoup some of what it has created. I fundamentally disagree with that point. Government exists to protect people and their p…

>I fundamentally disagree with that point. Government exists to protect people and their property.

Well, your property is not others property. So protecting someone having X property, means disallowing others to use that property.

But what gives you or anybody the right to your property anyway? Aside from papers, which don't mean anything in terms of justice, moral, fairness, etc -- only in terms of legality?

We were all caveman, naked and property less to begin with, so where did your rights to your property began?

Even if you think the current market system is fair, the starting point was not equality + market system, but whatever arrangements happened at a time of colonial plundering (off of native Americans), slavery, when even poor whites and women couldn't vote (the most part of US history), plus feudal arrangements (in most other places).

Even if someone got their current property "fair and square" in 2019 selling stuff at the market, said property got its start (and ended to the people that have it) from conditions that were anything but fair and square - and not even very long ago.

Before the abolition of slavery and universal vote, any kind of property arrangement (and any kind of inheritance and all the second and n-th order property arrangements since them), is unjust and moot.

So, as a member of a society, I don't see why someone should be allowed to own huge amounts of real estate or money...

>rights do not come from society, rights are internal and society functions to abridge them where beneficial.

Internal to what?

If someone has the power they can stomp on all your rights, including your "right to life" (as has happened in history time and again), and they and people would just laugh their asses off when they hear your complaint that you have "internal rights".

You only have rights because society collectively secured those rights, and gave them to its members (and it took lots of fighting to secure them in the first place). Heck, if you were a black person, without Rosa Parks, you might still not have the right to many things. And it wasn't much better for the average white throughout history.

And it wasn't even that it was thought of as injustice. To make such things be thought of as injustice (instead of having justice be whatever the king of lords etc say), also took a lot of fighting and ideological work. You could be killed as a slave that tries to escape, and you wouldn't even be considered just, but just a low-life critical, to the good law abiding citizens...

Nothing comes from nature or "internally".

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#473

Post by coldtea »

harryh wrote: post #368
coldtea wrote: post #366

Earlier quoted context omitted.

It could be out and working in the economy, instead of sitting, so, yes it does. Capital is a resource too...

Bank deposits aren't removed from the economy. That money is loaned out to other people. That's what banks do.

>Bank deposits aren't removed from the economy

For the ultra rich they go to so many channels, as to be effectively removed (else, they'd also be taxed as income to begin with). A deposit in Switzerland or Turks and Caicos doesn't do much good (if anything) to your local economy...

And of course, as a rich person you have all kinds of assets like real estate too...

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#474

Post by harryh »

coldtea wrote: post #473
harryh wrote: post #368

Earlier quoted context omitted.

Bank deposits aren't removed from the economy. That money is loaned out to other people. That's what banks do.

> Bank deposits aren't removed from the economy For the ultra rich they go to so many channels, as to be effectively removed (else, they'd also be taxed as income to begin with). A deposit in Switzerland or Turks and Caicos doesn't do much good (if anything) to your local economy... And of course, as a rich person you have all kinds of assets like real estate too...

Do you really think Turks and Caicos banks only loan money to islanders? Not much to invest in there. Capital easily flows across borders to the best investment opportunities.

Real estate is a bit tricky since it can be both consumption and investment. While I'd rather see taxes on imputed rent like they have in some countries to cover the consumption part, property taxes do a pretty good job.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#475

Post by kbutler »

mLuby wrote: post #433
troupe wrote: post #415

Earlier quoted context omitted.

It doesn't make it worthless, but right now you only pay income tax on assets with volatile valuations when you actually realize the gain because any gain on paper may not actually be realized. Let's say you invest $1000 in a highly risky stock. It does very well and goes up to $10,000. You haven't sold it, but the government taxes you a wealth tax of 20% so you pay $2,000. The next year it goes down to $1,000 again…

Agreed that's how taxing income currently works. But we're talking about taxing wealth. What you're describing is this: Buy at 1K Sell at 10K Taxed on 10K Buy at 10K Sell at 1K I understand your concern about volatile assets, but aren't all assets (even currency and gold) risky over a long enough time period?

The point is:

    Buy at 1K
    Hold while value goes up to 10K
    Tax on wealth at 10K
    (Next year)
    Tax on wealth at 20K
    ...
    (N years later)
    Sell at 1K
With a liquid asset like stocks, it is at least possible to pay the tax by selling part of the stock, and you could get a credit in future years for capital losses.

But what if the wealth is your elderly mother's home? Or the family farm or small business? It's really hard to sell part of those things to pay a "wealth tax" every year.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#476

Post by mcv »

refurb wrote: post #275
danans wrote: post #199

Earlier quoted context omitted.

I agree the title is click baity, but the ultra wealthy do pay a lower effective tax rate than me, and I'm probably in the top 10% of income percentile. But the observations of the article itself check out. The tax system has gotten radically less progressive over the last 50 years. The argument is over whether or not it should be made more or less progressive given current realities. People can differ in their opini…

It’s gotten less progressive? 2nd graph here [1] shows the top 1% has steady increased their share of all taxes since 1986. I have no idea what it looks like before 1986. [1] https://taxfoundation.org/top-1-percent-tax-rate/

The top 1% have also dramatically increased their share of income since 1986, while other incomes have stagnated. The increase in tax paid is entirely due to that larger income, as the effective tax rate they pay has gone down, sometimes even lower than what high middle class pays.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#477

Post by ChrisLomont »

MuffinFlavored wrote: post #452
ChrisLomont wrote: post #328

Earlier quoted context omitted.

>it is usefull to protect billionaires Income taxes aren't on wealth; they're on income. Billionaires usually own most value in stock (and usually in a company they own or founded). The majority of the Forbes 400 are there due to founding a company that was found so useful to others, that the owner is worth billions. When they sell ownership they get taxed at very high rates, and this is after their company being tax…

> Income taxes aren't on wealth; they're on income. What about estate taxes? Say a billionaire is holding 3,412,037 shares of SPY. 0 transactions buying or selling for the full fiscal year. Just dividends being paid out reinvesting. What taxes would this person pay?

That person is paying corporate income tax and taxes on dividends.

If you own an asset that is constantly paying taxes, you have lost that value to taxation. A stock shareholder owns a portion of the company. A stockholder loses value exactly equal to the amount of taxes the corporation paid.

This is why economists have the maxim: "companies don't pay taxes; people pay taxes." This doesn't mean companies don't pay tax; it means every dollar a company pays in tax is a dollar taken from some set of people.

Without corporate taxation, the shareholders would own a company which owns more cash. Academic literature has shown a dollar in cash at a company is worth a dollar in market cap, which is priced into stock values.

Now, depending on how dividends work, the billionaire likely also paid taxes on those, either at cap gains rates (remember, that income was also already taxed at the corporate level) or at personal income levels, depending on whether the dividends are classified as qualified dividends or non-qualified dividends.

Then, when the billionaire dies, the rest gets taxed if he/she passes it own. This rate for a billionaire is currently around 40%, and many states have an inheritance tax on top of that.

So the billionaire does and will pay significant amount of taxes over their lifetime.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#478

Post by ameister14 »

coldtea wrote: post #472
ameister14 wrote: post #397

Earlier quoted context omitted.

>We have a capitalist economic system, and it works pretty well for us, but that doesn't mean anyone has an inherent natural right to their capital. When it comes down it, property rights are all fictitious and exist only because society says it does. It's hardly wrong for society to decide to recoup some of what it has created. I fundamentally disagree with that point. Government exists to protect people and their p…

> I fundamentally disagree with that point. Government exists to protect people and their property. Well, your property is not others property. So protecting someone having X property, means disallowing others to use that property. But what gives you or anybody the right to your property anyway? Aside from papers, which don't mean anything in terms of justice, moral, fairness, etc -- only in terms of legality? We wer…

So the simplest way I think about this is similar to Locke's. You own yourself - nobody else has the right to own you. If you disagree with that, we can chat about it but I'm going to move forward with that as true.

Ok, so everything else is owned by everyone equally. (It's actually important that these things are all owned in commons rather than unowned.) In a state of nature, you walk over, pick up an apple off the ground. By applying your work to pick up the apple, it is now more your apple than it is other people's. That's where property comes from. An application of personal labor. It gets more complicated from there, but that's the start of it.

>You only have rights because society collectively secured those rights, and gave them to its members (and it took lots of fighting to secure them in the first place). Heck, if you were a black person, without Rosa Parks, you might still not have the right to many things. And it wasn't much better for the average white throughout history.

And it wasn't even that it was thought of as injustice.

More accurately, if you don't have the rights and only have those society gives you, it WASN'T an injustice. That's one of the reasons it is important that you have the rights innately. If you only have what society gives you, then it denying you things is totally within its rights and just.

In a practical sense, you only can exercise those rights society protects (if you want to remain a part of society). That doesn't mean you don't have them, which is why it can be unjust to deny you their use.

The conception of internal rights is one of the big reasons we don't have slavery or serfs anymore. You can laugh at it or say it's unrealistic, but it's surprisingly important that rights come innately rather than from external sources.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#480

Post by matthewdgreen »

lotsofpulp wrote: post #243
matthewdgreen wrote: post #138

Earlier quoted context omitted.

The distribution of income is a decision we’ve made as a society. Over the past few decades we’ve allowed more wealth and income to flow into a smaller number of hands, then we’ve enacted policies that reduce the effective tax rate on those particular taxpayers. This might be ok if we were collecting enough tax to fund our government, but in an environment where we’re running huge deficits, it’s not ok (nor is it fai…

It’s also due to technology allowing fewer and fewer people to “own” more of the production in society.

Over the past thirty years, a lot of the "technology" has been Chinese people building things overseas and shipping it to the US. There's technology in that, but it's mostly logistics and shipping, not robots or anything fancy.

NB: I'm not saying automation doesn't matter, or that it won't matter going forward. I'm saying that if no automation had happened at all, we'd almost certainly still be in this situation. The bulk of the distribution changes result from human decisions, not tech.

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