291–300 of 580 posts
Interesting, but Pro Publica’s calculation of effective tax rate as taxes payed divided by wealth increase is weird. I don’t think there’s a jurisdiction in the world that calculates tax that way, and there are good reasons for that.
Every time someone tries to make a tax targeting the ultra rich, it ends up hurting the moderately wealthy instead. Every. Single. Time. The worse tax situation is always the person who makes 500k in a good year, or sells a house they held for 25 years which went up a bunch in value. I suspect this is a significant factor in social mobility. Our tax system is punitive to people who try to leave the working class.
Interesting, but Pro Publica’s calculation of effective tax rate as taxes payed divided by wealth increase is weird. I don’t think there’s a jurisdiction in the world that calculates tax that way, and there are good reasons for that.
ProPublica confuses wealth with income. If you have $2b in wealth, and lost $1b in bad investments one year, you're still a billionaire, and your tax rate is 0%.
Let's say you operate a business netting you $1B and then buy a $1B pokemon card, which you sell for $0. You owe tax on $1B - $3000.
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Another point is that $500k is not in the 1% everywhere. In the Bay Area, it wouldn’t even put you at the top 5%. https://www.nytimes.com/interactive/2019/08/01/upshot/are-yo...
But the Bay Area's high prices are driven by scarcity + demand, not intrinsic cost. So if everyone had a higher tax burden, I'd expect costs to come down.
Californians will never vote away prop 13 so property taxes will never go up, even in this imaginary increased tax burden scenario. With incomes taxed higher, prices would not come down at all.
No one would want to sell their houses, as they could never afford a new one after taxes. Prices would continue to be propped up by real estate investment wealth that is largely unaffected by this increased tax burden. No one could afford to buy a first home as their income is taxed to a degree that saving up for a 20% down payment would require being in the 1% of CA income or saving up frugally for >10 years.
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>>A household that makes $500k on a good year is actually in the 1% statistically. They have left the working class long ago. They could work for about 7-10 years in their career and retire with an above-median salary (withdrawing following the 4% rule) in perpetuity. That is by definition not the working class: that family barely has to work in order to secure a lifetime of comfortable living. The "in a good year" q…
I think you're extending "working class" to mean "people who live on wages instead of capital". But most people make an additional distinction inside wage earners between workers and professionals, i.e. mechanics, factory workers, nurses, assistants vs. doctors, lawyers, software engineers, managers, etc. It's helpful in this little side discussion because policies that might affect people with (as GP says) any abili…
This is a meaningless distinction because there was a time where mechanics and factory workers also made 6 figure salaries. The divide should always be between someone who makes most of their money from labor rather than capital. Actors and basketball players are not people that I think should necessarily be more impacted by a wealth tax.
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How you feel about this is going to depend on where you are on the political spectrum. I fully support this decision based on where the country stands on inequality and socioeconomic power imbalances. It’s in the public interest to demonstrate the result of poorly constructed public policy (and thereby stoke inertia to fix it and erode wealth inequality). I’m happy to make my tax returns and income history public if…
So if someone wanted to demonstrate poor building codes by setting your house on fire, that would be okay too, since you know, it's in the public interest to demonstrate lax building codes? Privacy is a right that I would think more people on this forum would respect. I don't see why you're so happy to offer up the rights of others as sacrificial lambs to make some political point.
Yes, of course destroying property and incurring expenses for the local government is exactly the same as releasing records... oh no wait - its not at all the same.
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The problem isn't that it hurts the sheep as well, it's that it hurts the sheep almost entirely. Raising capital gains would be a decent idea that forces the rich to pay more. Basically zero support for it. Closing loopholes helps too, not what we're seeing in tax policy discussions which focus on rates instead. Raising the top rate on income when most of the ultra-rich's money comes from investment isn't making sens…
Arguably capital gains should be paid earlier so it’s a sunk cost. Being able to put it off is market-distorting. It’s hard to come up with a fair way to do it though. Maybe a requirement to save money in advance based on market price, like payroll deductions? Then once you actually sell, you might even get a bit of a refund, encouraging turnover. But that would affect people with cash-flow problems the most. And the…
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My Etrade account has that option. But I don't use it because it's risky. If you take out a loan collateralized by a stock, the stock could drop and you'd owe a lot of money. Selling the stock locks in the gain. Now, if you only need say 1/2 the value as cash and can absorb the risk of the stock going down, then it makes sense. Or if you want to "buy insurance" by taking out an opposite short position, that would als…
Why isn't there an option to take out a loan where a repayment option is to transfer the capital asset (at whatever the value happens to be at the time of repayment)? I.e. I don't get why the risky part of this loan can't be mitigated by the bank taking on the risk and managing it separately. Surely, there would be investors willing to back these types of collateralized loans?
Now why don't you plug in this scenario into any Black–Scholes calculator and see how much of a net credit at entry you get (if you even have one). That would be the maximum loan amount you'd be able to get under this scheme. If you could get one at all, the loan amount is tiny compared to the value of the asset.
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Maybe. But how? I think that, if you could somehow collect all the wealth and redistribute it equally, within a few years we would see disparity reappear. Some folks are better at accumulating wealth than others. It seems to me that you would have to keep reallocating wealth. And many would then ask, what's the motive for generating wealth if it's just going to be taken away from you?
This has happened before. After the end of WW2, the Allies decided to repudiate the ReichsMark (the German dollar) and issue a new Mark. Everyone who held ReichsMarks saw it go to zero. To get the economy going again, everyone was issued 50 of the new Deutsch Marks. Within a couple weeks, the people who had been wealthy before were rapidly moving ahead, and the ones who had not been were again at the bottom. I.e. the…
Every time someone tries to make a tax targeting the ultra rich, it ends up hurting the moderately wealthy instead. Every. Single. Time. The worse tax situation is always the person who makes 500k in a good year, or sells a house they held for 25 years which went up a bunch in value. I suspect this is a significant factor in social mobility. Our tax system is punitive to people who try to leave the working class.
My giving a shit about household capital gains went away when a partisan congress decided to buy redneck votes with punitive SALT rollback.