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Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

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Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#341

Post by marricks »

pingpongchef wrote: post #278
tstrimple wrote: post #195

Earlier quoted context omitted.

No one "forms their own opinion" in a vacuum. Your beliefs and opinions are influenced in a multitude of ways by your environment including the media you consume. Asking how the biases you have were formed is something everyone should be asking of themselves, and certainly doesn't seem like an inappropriate question.

Problem is that it's a subtle accusation of speaking in bad faith or an accusation of lacking agency. In order to have respect for the other person, you can't start from either of those positions.

Original comment was pretty threadbare, just “wealth taxes wouldn’t affect me but I don’t want them”. It’s worth knowing why they think that, especially if it’s getting upvoted so much.

We have to be able to ask these questions and assume they’re not attacks to have productive dialogues.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#342

Post by bhupy »

rayiner wrote: post #308

Do people really find these sorts of articles compelling? They're nothing more dressed up ad hominem--attack the messenger without engaging with the substance. Here are the facts that aren't in dispute: 1) Other countries that have tried wealth taxes have started abandoning them, most recently France and Sweden: https://www.cato.org/publications/commentary/why-europe-axed... . 2) There is little economic consensus on…

I'm also not convinced that wealth taxes in the US are constitutional, since wealth isn't income (unlike salaries, dividends, and capital gains), and the Federal government is explicitly prohibited from direct taxation with the explicit exception of income.

Same reason we don't have a Federal property tax.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#343

Post by benhurmarcel »

unethical_ban wrote: post #297
sempron64 wrote: post #125

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…

Like another person said, you look at potential enforcement and assume perfect adherence to a philosophy, or that everyone will be audited the same. They will not. Just like a small business is less regulated than a large one (often), or how smaller incomes are taxed simply while those with more money/more complex assets get audited more - the ultra-wealthy will certainly have more of their assets audited, and yes, t…

That's right. We had a wealth tax in France from 1989 until 2018. Most people by far never had to declare or justify anything related to this, because they were so obviously below the threshold. It didn't have any impact for the vast majority of taxpayers.

By the way it was replaced 2 years ago on a tax on real estate wealth only.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#344

Post by rayiner »

bhupy wrote: post #335
rayiner wrote: post #322

Earlier quoted context omitted.

That's actually an example of why wealth taxes aren't a great idea. If you invest money back into the business, that might reduce your profits, and therefore any corporate or income taxes. But that investment it will increase the long-term value of the company. Under a wealth tax, that would cause taxes for everyone who holds the stock to go up! In fact, if investing in say a new line of business causes the value of…

I generally agree with the opposition to wealth taxes (and no, I'm not wealthy), but I'll try to engage with this by providing what I believe is the strongest good-faith counterargument: > a wealth tax creates a perverse incentive to not invest back in the company. This is arguably a "good thing" because one could argue that it's "unfair" that large, high revenue / high income corporations allocate so much capital in…

> This is arguably a "good thing" because one could argue that it's "unfair" that large, high revenue / high income corporations allocate so much capital in our economy. It would arguably be better for them to pay the taxes and instead have that capital be allocated by a democratically accountable body: the government.

This is certainly "arguable." One of the very few things economists agree on is the market's are better at allocating capital than governments. That's one of the core functions of markets.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#345

Post by gamblor956 »

mox1 wrote: post #252
aaaxyz wrote: post #200

Earlier quoted context omitted.

Would that explain why a lot of companies these days are doing stock buybacks?

Yes, it is considered more tax advantaged method of returning capitol to shareholders. Dividends get taxed as corporate profits, then again as income downstream. Buybacks are not taxed at either stage.

Buybacks are taxed as capital gains rates (0%, 15%, or 20%), while dividends are subject to special dividend rates (0%, 10%, or 20%).

Dividends are thus actually preferred by most investors, and buybacks generally only advantage the biggest investors.

Additionally, corporations don't get special capital gains rates but do get dividends received exemptions for dividends from related company, so in many cases corporate shareholders would prefer dividends over share buybacks.

Buybacks are big not for tax reasons (because in most cases, companies make buybacks out of borrowed funds, not profits), but because they artificially inflate the stock price, which increases the value of the executive compensation packages of the executives that authorized the buyback.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#346

Post by missedthecue »

coliveira wrote: post #214
bobcostas55 wrote: post #189

Earlier quoted context omitted.

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…

You're mixing corporate income taxes an personal income taxes. Corporate income taxes are good because the business wants to avoid paying taxes so it will devise more ways to invest in the company. This is where investment capital will be coming from.

Why is investing in mostly flat or negative return projects assumed to be a net-good?

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#347

Post by panopticon »

ls612 wrote: post #300
mullingitover wrote: post #242

Earlier quoted context omitted.

> Near 50% of American pay zero federal tax. 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 m…

Problem there is that it ignores transfer payments. So the people making 2.8% of the national income are really taking home more than that since they (collectively, not every individual receives all of these) are receiving snap, section 8, tanf, social security/SSI, Medicaid, etc. From a post transfer perspective, America’s tax system is firmly progressive, but less so than European countries. The other side of that…

> The other side of that is that in America you have the opportunity to do quite well for yourself if you aren’t in one of the aristocratic elite families. That isn’t really the case in many of these European social democracies. Not only is there a safety net below you, but there is also a net above you as well.

Hasn't this been thoroughly debunked by economic mobility studies? The US regularly ranks below many European countries by this metric, and the nordic countries tend to dominate in this regard.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#348

Post by bhupy »

rayiner wrote: post #344
bhupy wrote: post #335

Earlier quoted context omitted.

I generally agree with the opposition to wealth taxes (and no, I'm not wealthy), but I'll try to engage with this by providing what I believe is the strongest good-faith counterargument: > a wealth tax creates a perverse incentive to not invest back in the company. This is arguably a "good thing" because one could argue that it's "unfair" that large, high revenue / high income corporations allocate so much capital in…

> This is arguably a "good thing" because one could argue that it's "unfair" that large, high revenue / high income corporations allocate so much capital in our economy. It would arguably be better for them to pay the taxes and instead have that capital be allocated by a democratically accountable body: the government. This is certainly "arguable." One of the very few things economists agree on is the market's are be…

Yep, I don't disagree.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#349

Post by jakelazaroff »

nickff wrote: post #229
jakelazaroff wrote: post #68

Earlier quoted context omitted.

> Taxes low? Start up something new, get it going. Taxes go up again? Sell it off (if they haven't already) and go back to early retirement doing whatever. Sure — if you're already wealthy enough to get by without any income, that might make sense. But for most business owners the alternative is "work for someone else", not "return to early retirement".

Well, you have to remember that taxes affect the expected outcome, as they reduce the upside of a positive outcome. Taxes do not mitigate the losses from a failure, and most people do not have the resources to sustain failures (without severe negative consequences). By reducing the expected outcome of a new venture, taxes discourage marginal entrepreneurs from starting businesses.

OP's point is that corporate taxes don't work like that. As a business owner, you can avoid taxes by reinvesting in your business, capturing the positive outcome by way of valuation. If corporate taxes are lower, owners are incentivized to extract profits rather than reinvesting them.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#350

Post by nickpp »

adverbly wrote: post #249
sempron64 wrote: post #125

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…

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 need to track every single taxpayer continuously just to know if that cutoff was reached.
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