241–250 of 488 posts
Open Question: Why don't taxes actually go down over time? Who is capturing the value generated by productivity gains that might make things cheaper to run?
Near 50% of American pay zero federal tax. The top 10% of all Americans pay 69% of all federal taxes currently. This is a point 'left out' of current discussions. Instead of increasing entitlements or adding yet more taxes - we lower the size of the government spending UNTIL it matches where most people pay for the services received in a more scaled manner. Source: https://taxfoundation.org/summary-latest-federal-inc…
I was looking for the lucky duckies argument to rear its head. The Intercept has an article which does a great job of eviscerating it[1]
> ...when you take all U.S. taxes into account — federal income taxes, federal payroll taxes, federal corporate taxes, the federal estate tax, federal excise taxes, and the plethora of state and local taxes — the U.S. tax system is just mildly progressive.
> If the U.S. tax system were perfectly flat, the share of taxes paid by each group of Americans above would be equal to their share of income.
> Instead, the top 1 percent — with an average income of about $2 million — made 20.9 percent of America’s income, but paid 24.1 percent of America’s taxes. Few people will perceive this as a monstrous injustice.
> Meanwhile, the middle 20 percent of Americans— with incomes between $41,000 and $66,000 per year — make 10.9 percent of America’s income and pay 9.4 percent of America’s taxes. The bottom 20 percent, making less than $23,000, make just 2.8 percent of America’s income and pay 2 percent of America’s taxes. That is, the “lucky duckies” of the right’s imagination who pay little to nothing in income taxes are still paying a significant portion of their income in taxes overall.
[1] https://theintercept.com/2019/04/13/tax-day-taxes-statistics...
Earlier quoted context omitted.
Exactly. Some people seem to believe that wealth in shares of a company are in some way different from other types of wealth. Just sell shares an you'll be fine with your taxes. By the way, if you're the controller of a company, you can sell shares without voting power (this has always been a possibility).
I have $1,000,000,000 in my checking account. This is my wealth. I am not going to be taxed a single penny on this money. Why tax my "shares" wealth and not my wealth from my checking account? And if I have my shares, I don't want to sell them. I currently own X number of shares of dozens of companies, I don't have IRS breathing down my neck to sell them, why should Bezos have them breathing down his?! I pay taxes wh…
That's the point of a wealth tax, to in fact tax that checking account too. You seem to misunderstand how it would work and what the intent is. It doesn't treat your checking account differently from company ownership; both are wealth, a wealth tax suggests taxing both.
> I don't have IRS breathing down my neck to sell them, why should Bezos have them breathing down his?
You shouldn't if you're not wealthy (as in you have under 20 mil net worth). If you're wealthy, you can afford to pay a wealth tax, and your money will help those poorer.
Why shouldn't we be taking money from the rich and helping the entire country? Why should our country continue to have a wider and wider economic divide?
Anyway, the IRS absolutely would breath down your neck to give them money if you owed them taxes. If all your assets were stock, and you somehow triggered a large tax liability, you'd have to sell some stock to pay the IRS. That's already true. It's perfectly possible to trigger a tax liability larger than your liquid assets now, and have to sell stock to cover it.
But that's rare now. And with a wealth tax that would still be rare. Most people with 20MM+ net worth have liquid assets, or the ability to easily liquidate assets.
You're arguing about an edge case that almost certainly doesn't effect you in any way.
Earlier quoted context omitted.
This is so hidden in the debate that it is almost like a "secret". The more taxes you have on corporate income, the higher the incentive for corporations to invest in the company, so they can avoid paying taxes. This is good for the economy. On the other hand, lowering corporate taxes also generates a cascade of tax avoidance, since you have higher profits that generate the need for more complex tax avoidance schemes…
> This is good for the economy. Not at all clear to me this is the case.
See: https://fred.stlouisfed.org/series/M2V
Our current policy is to paper over bank liquidity or other problems by printing money. Big institutions and the mega-rich are hoarding massive quantities of cash. The economy as a whole would be better off if billionaires were doing stuff with their money rather than hoarding shares.
Earlier quoted context omitted.
> Near 50% of American pay zero federal tax. The top 10% of all Americans pay 69% of all federal taxes currently. This is a point 'left out' of current discussions. Nearly 50% pay no federal income tax. It's worth making that statement precise in this case, because saying they pay no federal tax is just a lie.
Federal income tax is what matters. So yes, everyone pays some sales tax, some property tax, FICA, etc. But what matters is income tax (for individuals).
https://www.taxpolicycenter.org/briefing-book/what-are-sourc...
Wealth taxes are a bad idea because they target everyone with wealth, regardless of the actual views they hold, regardless of the degree to which they have personally contributed to the collapse we are facing. The real inequality we have today is being perpetuated by outdated regulations, primarily from the 1930s. It's also being perpetuated by people that invest in Warren Buffet-style "value" stocks, which extract a…
> we have to stop making it illegal to build enough homes for people that need them There's already enough homes (in the USA, at least) to house all the homeless people in the country. Unfortunately, giving homes away wouldn't be profitable, and profit is all that seems to matter.
Earlier quoted context omitted.
This is so hidden in the debate that it is almost like a "secret". The more taxes you have on corporate income, the higher the incentive for corporations to invest in the company, so they can avoid paying taxes. This is good for the economy. On the other hand, lowering corporate taxes also generates a cascade of tax avoidance, since you have higher profits that generate the need for more complex tax avoidance schemes…
This is obviously fallacious, just consider the extreme case of 100% taxation. At the macro level the only source of investment funds is income that does not go to consumption. Lower the expected rate of return through taxation, and the result is inevitably a shift from investment to consumption. At the individual firm level it's obvious that taxation lowers the NPV of the firm's available projects - they are obvious…
At 100% tax rate I would expect that pattern to be magnified. As a board member, I'd use my success to hire or partner with anybody I had the slightest positive feeling for, until there is just enough money left over that I don't have the biggest target painted on my forehead.
As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…
> You pay taxes on all of your income. But businesses only pay taxes on their profit. It's a big, big difference that changes the incentives. It’d be insane to have it any other way for businesses. Whole swathes of low margin businesses would be impossible to operate. For example a super markets average margins are 3-5%. Corporate tax is (generally) on profits because you can deduct costs. It allows for the flow of m…
I'm not wealthy enough for a wealth tax to apply, but a wealth tax is a colossal privacy and administrative burden on _every single taxpayer_. Assets must be accounted for when calculating wealth, so the tax service will be required to track and value assets including vehicles, homes, and material good etc. for every citizen to see if the wealth tax would apply to them -- if we didn't report material goods, the wealt…
> wealth tax is a colossal privacy and administrative burden on _every single taxpayer_
I have not seen a single wealth tax proposal that doesn't have a gigantic cutoff where it would do nothing for 99%+ of the taxpayer base. Most proposals have a floor in the tens of millions.
I'm neither wealthy nor the media and I believe that wealth taxes are a bad idea, too.
Why? (I mostly agree but it's not a strong opinion)
Like that the market value of an asset can fluctuate wildly and become untethered from the actual rational value of the asset.
So imagine you're Bezos or Musk and you're not trying to be super rich per se but just trying to build a company according to your vision and so you have a bunch of equity in the company (so that you can control it) but no matter how loudly you proclaim that the market is overvaluing your stock the price keeps going up and now you have to sell lots of shares in order to pay the wealth tax assessed against your equity and you don't have a controlling vote anymore and your vision for your company just dies.
And maybe the hordes of people who think no single person should have a controlling share of a billion-dollar company are right - I don't know. But I'm pretty sure a large fraction of people who build companies (like Bezos or Musk) are doing it to build an enterprise, and not for the cash. Otherwise they'd just stop and have fun with their private jets at a certain point. So if a wealth tax were not going to let them keep control of their enterprise beyond the first decade, they probably would opt not to waste their time building it at all.
And maybe that's fine, but I'm not sure what society looks like in a world where people don't want to build companies.