fair.org? Ha! Confiscating others money is hardly "fair" but here we are.
> Confiscating others money
You can see it as a subscription fee for the service of upholding private property rights instead.
Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
281–290 of 488 posts
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#282Wealth tax unconstitutionality is not some 'dream'. I think that a wealth tax is a great idea, but I dont see any good way of implementing it. The constitution (16th amendment) only specifically allows for income taxes, not property taxes. What makes the famous carriage tax legal is that its a tax on consumption and spending, and is therefore not a direct tax. The carriage tax was never argued to be a property tax, t…
Why can't there just be a new amendment? Income tax was "unconstitutional" before the 16th amendment, right?
Sure, you could pass a new amendment. That requires 2/3 majority in both houses which I think would be tough. Most of my issues with it are in the implementation, its just not practical. Theres lots of other insightful comments here talking about that issue.
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#283If wealth flight is really going to be your justification for being against a wealth tax, at bare minimum name the country the wealthy are going to flee to in order to avoid it. The US has a significantly lower marginal tax rate compared to pretty much any nation in Europe.
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#284As 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…
> But when taxes are high, I see that as an incentive to hide the profits by investing in the future.
That isn't really the societal win you're making it out to be though. If you "pocket" profits, i.e. pay them to investors, the investors just go out and invest them again in something else. Which is actually better, because it reduces concentration of wealth inside of corporations. Instead of one corporation growing ever larger because they have to invest internally or be subject to punitive taxes, you get many new independent companies being formed as investors seek out new opportunities for the money they receive as dividends.
The other problem is that there are many forms of investment that are taxed differently. Government bond interest typically isn't taxed. Real estate appreciation typically isn't taxed until sale, which means they can be deferred indefinitely. Investing in foreign corporations will be subject to the tax rates in those other countries. So if you increase the domestic corporate tax rate, investment moves from domestic companies to things like real estate speculation and foreign companies, which may not be desirable.
Moreover, multinational corporations arrange for profits to be declared in whichever jurisdiction has the lowest taxes, so increasing the tax rate on domestic corporations disadvantages them against multinationals that won't be paying those taxes.
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#285Earlier quoted context omitted.
Lower taxes means you have higher profit post-tax. You would not need to avoid paying taxes on post-tax money.
I think the GP is saying that one avoids taxes by investing in things that grow the company, jobs, R&D, etc. I don’t know if this scales all the way up when all the big co’s move their HQ’s offshore. Perhaps we need diff positions for diff business sizes.
If so, they are confused because they are thinking of expenses as paying for themselves with the taxes saved. A business with a lower tax rate would make the same investments and have more money left over, or make more investments with the same money.
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#286Earlier quoted context omitted.
> 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…
Aren't health insurance premiums deductible for individuals too?
"If you bought medical insurance policies on your own for yourself or your family, you might qualify for a self-employment tax deduction on the premiums." [1]
"If you are enrolled in an employer-sponsored health insurance plan, your premiums may already be tax-free. If your premiums are made through a payroll deduction plan, they are likely made with pre-tax dollars, so you would not be allowed to claim a year-end tax deduction." [2]
[1]: https://www.nerdwallet.com/article/taxes/self-employment-tax... [2]: https://www.investopedia.com/are-health-insurance-premiums-t...
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#287Eh, true wealthy people are against a tax that hurts them, but that doesn't mean that their argument is without merit.
Think about what a wealth tax means. Say I found a company like WeWork (bear with me and try to forget the shenanigans pulled by their CEO). Things are going pretty well and before you know it, we raise money at a $200 million valuation and my stake is 50%. On paper I'm now worth $100 million dollars, but that money isn't in my bank account... it's an imaginary number that my investors decided to invest at. Based on E. Warren's wealth tax plan, I now owe 2% of my wealth above $50M. So where do I get that $1 million from? I don't have cash or liquid assets, so likely I have to dilute my shares to get some personal money. No problem... investors will understand.
So I go on for a few years paying some taxes on my new wealth, 3-5% of my equity a year. Now, the company has grown and we raise a big amount of money. Say Softbank gives us $5 billion at a $20 billion valuation, and i've been diluted to 25% at this point, but now I'm worth $5 billion on paper. Under EW's plan, I owe 3% of my wealth above $1 billion, plus 2% of wealth between 50M and 1B. My tax bill is gonna be $139,000,000. Again, my wealth doesn't exist in the bank... it's in my private shares. But okay, I raise money from investors to dilute my shares and pay taxes... at this point they expect it.
OK... now I make plans to take my company public. Finally I'll have some real liquid money and paying these taxes will be easier, because I can just sell shares on the open market. But wait, I put some feelers out and the market thinks my company isn't worth $20 billion... it thinks it's worth $10 billion. Do I get a refund for past tax payments?
The point is that the government will have a very hard time determining what things are worth. It's easy to tax income or sales, because those are known values. The price of WeWork, or a Picasso for that matter are not. So what's gonna happen? I can guarantee that billionaires are gonna come up with a 1000 ways to claim that they are worth much less than they are. They'll start taking companies private. They'll put money into hard-to-value and illiquid assets. Some will revoke their citizenship and move elsewhere. On the whole, it may not gonna be great for the economy, even though in a sense there's a moral justness to it.
There are better ways to tax the wealthy. Higher capital gains taxes and estate taxes to name a few (estate taxes run into the same issues as wealth taxes, but at least it doesn't burden people to value their property every year).
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#288Near 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…
The top 10% of Americans have much more than 69% of the disposable income. The majority of Americans aren't able to afford a surprise $250 expense.
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#289I'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…
I stopped reading when I hit: > 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.
You stopped reading...and missed the whole point. The idea was, to say if a tax doesn't apply to someone you still need to do a deep valuation of their assets. Someone could hide 10M in a painting and live in a regular house, have regular "income".
Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea
#290Earlier quoted context omitted.
The top 10% of wage earners pay all the tax. But they're not the top 10% by wealth or unearned income. Those guys are getting off free. Reducing income tax by properly taxing inheritance, cap gains or wealth itself would help people who work for a living instead of sitting on their arses and jealousy guarding what their grandfather's grandfather's grandfather brought over from the old country.
The amazing thing is we can ALL buy assets and be the "grandfather's grandfather's grandfather". It isn't hard. Even very small wealth compounds incredibly after 150 years.
> we can ALL buy assets and be the "grandfather's grandfather's grandfather".
How many families/people are wealthy on the basis of the earnings of a regular person in 1870 and their incredibly compounded wealth? The answer is likely none.