There’s nothing special about a majority. However, somewhere between 70% and 90% there will be impacts to economic productivity, but studies don’t show that lower tax rates will cause people to work any less hard and thus drag down the economy.
We already have a wealth tax. I don’t see anything special about liquid assets as opposed to real estate. Unless we can eliminate the real estate tax which disproportionately hits the upper middle and lower upper classes, I don’t see a moral issue with doing the same for the ultrawealthy’s equities.
I think this is a double barrelled question, because financial success is a mixture of talent and opportunity. I don’t think that asking the ultrawealthy to pay their fair share of tax requires proving that they are worse people than the rest of us.
I agree. I think that the theoretical underpinnings of both capitalism and socialism are incorrect in these days of innovation.
Depends on what you mean by “meaningful”. A tax increase on the ultrawealthy will not cure the deficit, but it would meaningfully reduce it. I agree that to solve American budget issues you do need to expand the tax increases beyond the ultrawealthy.
Unless we’re going to consider inheritance gained through murder as “earned”, this is about as clear a distinction between the OP’s two categories as one can imagine.
Watch a Trump speech. Every time he lies, take a shot of everclear 190 proof. By the end of the speech, either what he’s saying will make sense or the person playing the game will be far beyond the point of caring about worldly affairs.
One little-mentioned aspect is that many conservatives view personal wealth as…personal, whereas many liberals view it as a public utility. Which is not to say that conservatives don’t believe the rich need to pay taxes, but many liberals view a billionaire’s wealth as “going to waste” if it’s sitting in his investment portfolio or bank accounts as opposed to being used to build highways, schools, hospitals, etc.
They see someone’s wealth and think, “Imagine all the good we could do with that.”
Imagine that you could personally end world hunger without taking even the slightest hit to your standard of living. Even if you’re a totally amoral sociopath, surely just going down in history as “the guy who ended world hunger” should be enough of a carrot dangled in front of you, considering that your net worth is so obscene that even such an act would not significantly diminish your fortunes, right?
Now imagine not doing that.
Then you can sort of get into the headspace people like me get into when we see people like Jeff Bezos say things like this:
“The only way that I can see to deploy this much financial resource is by converting my Amazon winnings into space travel. That is basically it.”
Frankly, I think it’s obscene, but that’s just me. I think that if someone is in a position to do a great amount of good at very little personal cost and insists on not doing it, they’re a shitty human being.
The majority is the point where I’m retaining more of my income than the government is taking. I don’t believe I should be paying miniscule taxes, but I think that every person, regardless of their level of income, is entitled to a greater share of their income than the government.
While I recognise it’s not a mainstream view, I’m personally opposed to property taxes. For one reason, the asset value of the property isn’t a measure of the wealth of the owner. If person A buys a property with cash, and person B takes out a 90% mortgage, person A has much more property wealth than person B, but they pay the same property tax. Person C buys shares instead of a property, and person D buys a Bugatti. Neither pay property tax. You can try and level the field by taxing equities and creating a luxury tax, but you’re ultimately going to be punishing savers and investors rather than spenders.
I don’t feel like doing the math at the moment (maybe later), but suppose we define the rich as the top 1% of income earners, and set an income tax threshold at the level where the 99% top out. Suppose we raise the tax rate of this threshold by 5% over the next lower tax band. We’re getting an increase of 10’s of billions of government revenue, which I’m sure would be helpful. However, against a 4.75 trillion budget, we’re only paying for 1%-2% of that budget. And this is working at the highest margins of income above threshold. Expanding the definition of the rich to the top 2% is not going to double those 10’s of billions of government revenue. It would probably be a 10-20% rise. Each time we increase your percentage of what qualifies as rich, we’re getting a lower margin of income above threshold. At a guess, to achieve a tax revenue increase of 5% of that 4.75 trillion budget, we’d have to increase taxes on the top 10% of income earners. At that point, we’re hitting far more than the ultra-wealthy and we’re hitting the upper middle class earners. That might be a reasonable fiscal decision, but we’re not going to get huge government tax revenue increases by only going after the super-rich.
I calculated that we could get a similar amount just from the multibillionaires that are a small fraction of the 1%. The list of American billionaires is almost 1000 long so it wouldn’t surprise me if they had $2 trillion total net worth, and by assuming they earn around 5% on that money (probably more for stocks, less for other categories) they have an income of $100 billion which would yield taxes of $10 billion, since right now they’re paying less on this money than everyone else, so we could easily alter it so they are paying only slightly more.
How do you think the multibillionaires, with their armies of tax attorneys and accountants, might react to your plan to extract more of their money from them?
Of course I do know that some will fund more Trumps in the future, but there are multibilionares that are aware that not paying enough is leading to the end of what we understand as what America is actually great about and becoming more so.
How is that 5% being determined? Dividends? Definitely that income should be taxed. I’m pretty sure it currently is, at least for direct payments to the investor. Wealth from stock price increases? You’re going to force people to realise they’re investments - sell their shares before they’re wanting to - in order to pay for the stock going up. Probably that would lead to some sort of rebalanced equilibrium between share increases and dividends, but if there’s any volatility in the stock market, which there will be, finding that equilibrium on tax day is going to be impossible.
There is no outcome that I can imagine that will be worse than the current state of things. To me, the worst case scenario is “they don’t pay it.” Tax attorneys and accountants are highly unlikely to set forest fires in protest - that’s not their style. Not even when they’re part of an army of CPAs & JDs.
I’m not sure whether to tax unrealized gains, but if so then those effects for fungible equities could be tolerated (except the odd case of where an employee, even a high level one, has options that they are prevented from selling, which would make it not quite right to force them to pay taxes on them prematurely.).
OK, first off, what is a “2% marginal tax on assets”? Is that a 2% tax on the increase in the value of the assets? That’s an unrealised capital gains tax, not a wealth tax, although I suppose that’s quibbling. Nevertheless, if that’s what’s being proposed, are there any numbers to back that up? "The richest one-tenth of the richest 1%” raising their assets by 50 times $300 billion a year doesn’t pass the smell test.
If the “marginal” is just a fluff adjective, and it’s an actual wealth tax, Warren’s basically proposing taking 20% of a person’s wealth above $50 million over the course of 10 years. So if someone has built up a successful business worth $150 million which has plateaued, Warren will force them to sell off $20 million in that business over a decade to pay their taxes. So someone earning only their salary is losing massive amounts in tax because their business has peaked. At that point, the owner would seek to divest the business in whatever way would disperse the ownership. Which sounds great in communistic terms. However, changes in ownership are fraught with risk. Warren’s proposal would basically devalue any family owned business above $50 million unless it was undergoing growth above 2%/year after tax.
Also, where would the valuation come from? The stock market?
I’m thinking more in terms of new money than old money, but the principle is the same. The government shouldn’t be forcing Mark Zuckerberg to sell his Facebook shares until he’s ready to. When he’s ready to diversify his holdings, he should pay tax on his realised gains. But based on ups and down in the stock market, where he’s not receiving any dollars? No.
The same goes for the Waltons, owner of a large portion of Walmart corporation. If their stock is doing nothing from a price perspective, they shouldn’t be paying any taxes on that lack of price volatility. But if the price shoots up, the idea that they should pay taxes on a notional profit, without actual receiving any cash from a sale of stock, is simply penalising them for having money in equities, rather than cashing out and spending it.
You know, this point sounds nonsensical when one takes into account that it is normal to give business owners a break if theirs efforts do peak. As in losing money.
Oh, and about this, saying insipid things such as not “passing the smell test” are silly when one can find with little effort who else does smell it positively.
A wealth tax is so impractical and such a deal breaker I wouldn’t vote for any candidate who talks about one on total net worth. Even if they were against someone twice as nutty as Trump.
If you own copyrights, patents, art, or other forms of wealth why would you pay a yearly tax on that? It’s bad enough paying real estate and car tax. If anything perhaps we should work on the repeal of all forms of wealth tax.
You don’t really understand geographical analogies do you? Plateaus, peaks, and downward slopes are all different geographical features. Creditors will go after business owners if their business declines into unprofitability such that the business can’t pay its loans. Note the word decline. A feature that occurs beyond a peak. If the business owner is smart, he’ll diversify his holdings before that happens. Ideally, when the business is at a high point and has maximised its profit potential. In other words a peak.
A wealth tax based on share price could force owners to sell their stock while the business was still increasing in value. The government is forcing the business owner to realise gains in share value at tax time, not when the owner makes the decision on when it’s best for himself and the business. I’m against that.