Here is a better algorithm to edify the masses: if someone is such a massive billionaire as to have the boldness to teach the public basic 5th-grade math, their wealth tax rate should be set at 10%. From that point on, the rate goes in proportion to their level of condescension.
How to convert between wealth and income tax
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Re: How to convert between wealth and income tax
#62The conversion would be more accurate if it compared wealth and capital gains taxes, no? A defining feature of wealth taxes is that they only tax those that make most of their income through capital gains. This is why they're popular among much of the population. Now the question is, if we lowered capgains tax rate by 20% but instituted a 1% wealth tax, would that be better or worse? My guess would be worse because w…
What makes them unenforceable?
Re: How to convert between wealth and income tax
#63[flagged]
Re: How to convert between wealth and income tax
#64> In fact the conversion rate between them is about 20. A wealth tax of 1% is equivalent to an income tax of 20%.
Sure, but you actually have to work for continued income. Wealth accumulates with no input once established.
Wealth has the ability to increase (capital gains) without having to pay tax until it changes hands, whereas when income increases it is immediately taxed at a higher rate. Additionally, wealthy people can use securities as collateral for near zero interest lifetime loans which also bypass having to pay income tax.
Re: How to convert between wealth and income tax
#65So make income tax a deduction on a wealth tax, and avoid penalizing people who do indeed pay top marginal rate income tax on a large salary/bonus.
Given that the ultrarich pay very little to no income tax then Paul’s argument is “don’t increase my income tax from unnoticeable to 20%”
Re: How to convert between wealth and income tax
#66[flagged]
This just isn't true, unless you're the president. Who is the single largest taxpayer in US history? I'll wait while you google it.
As a percentage of their income? Because that's the only number I care about. You don't get to hoard wealth off the backs of tens of thousands of workers and then act like paying a smaller percentage is some good deed being done. The more one benefits from society (and billionaires depend most on the financial security and infrastructure setup by society), the more one needs to pay back into the system they gained their wealth from.
Re: How to convert between wealth and income tax
#67Earlier quoted context omitted.
This just isn't true, unless you're the president. Who is the single largest taxpayer in US history? I'll wait while you google it.
Musk paid $11B in a year his wealth went up $86B on his way to likely being the first trillionaire. Are we supposed to cry about it? The median net worth in the US is ~$200k. A lot of middle-class folks have likely paid more taxes in their lifetime than their entire net worth .
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Re: How to convert between wealth and income tax
#68Earlier quoted context omitted.
Musk paid $11B in a year his wealth went up $86B on his way to likely being the first trillionaire. Are we supposed to cry about it? The median net worth in the US is ~$200k. A lot of middle-class folks have likely paid more taxes in their lifetime than their entire net worth .
Nope. Just not post things like "billionaires pay no taxes."
They don't pay zero tax, for sure.
But they certainly get clever about techniques to keep it as low as possible, for shockingly low effective tax rates.
https://www.propublica.org/article/the-secret-irs-files-trov... has a whole bunch of examples.
Re: How to convert between wealth and income tax
#69Wealth tax is highly impractical. Very high and inescapable death taxes is what we need. Like 80% after an initial exemption amount. https://www.yesigiveafig.com/p/the-summer-slide-part-3-the-t... https://m.youtube.com/watch?v=mX5U5DNUfBc
There are all kinds of irrevocable trusts that exist to remove assets from your taxable estate so that they can be passed to heirs without paying estate tax. Raising the estate tax (which is already 40%) would just make planning to use these techniques more attractive.
Re: How to convert between wealth and income tax
#70Isn't PG's conflation of Denmark's high income tax with a proposed wealth tax a clear flaw in his math and argument re: "the highest taxes in the world"? Why wouldn't you instead compare to other countries that also have both income and wealth taxes?