Sure it would be more appealing, now that there are only 500 people in the entire country affected by it.
The end result is still the same. There’s no reason to continue to earn more money and create more in the marketplace. The effect is still going to be selling those assets, and buying non US assets, or just shutting down growth when it reaches that plateau.
Guys that rich didn’t get that rich by being stupid. You hit $450M, you start selling off your stuff and buying gold bars to store in Switzerland before the benevolent US government forces you to sell your stuff and give the money to them.
It’s one thing to try and hide income when you get to keep 65% of it. It’s a far different thing when you won’t get to keep ANY of it, that’s big time incentive to use your considerable power to hide your wealth.
No, it’s not how ALL taxes work. Many taxes are imposed to pay for services that the government thinks should be provided. Most obvious: roads, police, fire, military, courts, regulation, schools, libraries.
Bridge tolls are imposed for a service, not just because someone thinks you are too rich.
No, because they buy a service, and it is your choice to buy stamps or use the service. Taxes are not voluntary. Mailing a letter is.
And I will consider a 100% confiscation of excessive wealth (whatever that is) different from mere income distribution due to inequalities whether real or only perceived, like Social Security, welfare, unemployment, etc. Ralph’s proposal sounds more like the former.
A progressive tax is the only way to make taxes at all fair.
Setting aside the basic fact that the wealthy get more out of the state than the poor, there’s the fact that the more money you have, the more money can be taken away with the same burden.
A person living hand to mouth could be pushed over into ruin by a 10% (to pluck a number out of the air) tax, while the very wealthy could easily maintain a high lifestyle at the same tax rate even paying a much higher absolute amount. That’s not fair.
A truly fair tax would impose the same burden upon all those taxed. The very rich should feel no more or less imposed upon by taxes than the middle class or marginally poor. It is, of course, likely impossible to perfectly determine how to do that across all economic classes and types of income. But a progressive tax is better in that respect than a flat tax.
There is something to be said for a flat tax system. It’s very simple. And largely immune to attempts at social engineering by taxation, which could render a progressive system quite unfair if they’re done badly or excessively. Perhaps it’s better to knowingly embrace an unfair system instead of kidding ourselves with flawed attempts at being fair. But it’s not fair in the sense you’re describing.
It’s always funny to hear people weeping for the difficulties millionaires face over taxes. Have they trained you guys to do any other tricks?
That said, Nader’s proposal is another reason why he shouldn’t be allowed within a hundred miles of any political office. Nor apparently should his father. A 100% tax is a dumb idea.
Most people want to be rich. In most cases, they will do things that benefit society in pursuit of wealth. If the government were to eliminate the possibility of becoming really rich (or becoming richer if you’re already rich) then society would lose the benefits associated with the pursuit of wealth.
You’re confusing two things:[ol][]The legal (or moral) right to confiscate property, and []The reason for doing so.[/ol]While “we think you have too much wealth and we want it for ourselves” indeed may be the true reason behind some taxes, it is rarely the reason given openly. Nader’s proposal seems to change that practice.
I don’t think you would want that idea to work out. It comes from the mistaken belief that there is only so much money and the rich are taking an unfair share of it.
The guy with $X million dollars usually got there because he created $X million in value, not that he stole $X million from the working class.
Take some guy who buys 100 acres at $1000/acre and turns it into an outlet mall. What used to be unused land is now generating $200/sqft in rent, provides jobs to the workers, etc. He deserves whatever profit he gets.
Sure, the rich should pay taxes like all of us, but it would be completely wrong to limit how much someone could make. And it would be bad for society.
I have a disproportionate amount of friends and family that are anything from simple multi-millionaires to well beyong that. Some people seem to think that millionaires have the same types of accounts and transactions as poor people just with more money. That is almost never the case. Rich people that got that way over time usually have money spread all over the place in a complex web. Much of that may not be on purpose. That is just how the wealth got created in the first place. Some of the people I know own shares (private, not public) in smaller businesses with a business parter(s). Let’s say one of those businesses does very well and 25% stake is now worth $1 million. There is no easy way to get that money out at any given time and it would a terrble idea to encorage someone to sell and disrupt a growing company because some screwed up rule.
That is but one simple example. Those are the rule and not the exception. They typically don’t just have one big checking account.
Imagine the stock market. You have a whole bunch of stock that is growing at an alarming rate. At some point, there is going to be lots of pressure for you to sell it if such a rule was in place. During a rapidly rising market like the late 1990’s, a whole bunch of people are going to need to sell their stock. What good does that do anyone?
The long-term effect of this policy would be that no one would strive to be really rich. Entrepreneurs wouldn’t take big chances. Venture capitalists wouldn’t put up their money. You change all sorts of investment decisions around the margins for the worse.
Look at it this way - let’s say the cap is 50 million. You’ve got 10 million dollars, and you’re thinking of investing in a risky business. There’s an 80% chance you’ll lose your 10 million, but there’s a 20% chance you’ll make 100 million. And an outside chance that you’ll make billions. So you invest the money, and your capital gets used productively to advance the economy.
But now the equation becomes, "I have an 80% chance of losing my 10 million, or a 20% chance of making 50 million, because the government will take the rest if I make more than that. Suddenly the equation doesn’t favor the investment, so no money changes hands, and a new business idea goes unfunded.
Setting a cap on what you can earn is just stupid. It punishes the most adventurous, the most talented, and the most driven people in society. Burt Rutan has dropped 20 million dollars on the SpaceShip 1. Think he’d do that if his only upside was to make 50 million on his longshot venture? Do you think he could get funding from the likes of Richard Branson if Branson was already capped out on what he can earn, so there was literally no upside for him and only the potential for embarassment and the loss of millions if the venture failed?
A flat 100% tax on any wealth over a cap would get you a one-time winfall as you essentially stole hundreds of billions of dollars in assets. Then the tax would stop collecting any revenue at all, because no one in their right mind is going to take risks or work hard to make money for the government. All you’ll do is shut down the engine of production and remove the concentrations of capital required in an industrial economy.
Stupid, stupid idea. If Ralph Nader thinks those are wise words to formulate policy by, he’s either ignorant of economics or secretly wants to shut down the economy and turn over production to the government where it can be ‘managed’ by people like him.
Sorry, but no, I am not the slightest bit confused. Your question was absolutely, completely unambiguous:
The government is given the LEGAL RIGHT - your words, not mine - to confiscate your property, based on you having “too much,” or how much of it you have or how it’s acquired or just about any reason or no reason at all, by the Constitution of the country you live in. That’s where the legal right comes from. You asked a question and that’s the answer.
This is entirely YHO. There are plenty of other, equally valid ways to view taxation, as in Menocchio’s example, where progressivity is fair.
I don’t buy this. While I don’t support the hypothesized 100% marginal tax rate at any level of income, I’m skeptical of purely economic-rationalist arguments of this sort that argue it wouldn’t generate any long-term revenue. ISTM that there are lots of people who are willing to work their butts off at various enterprises irrespective of how much money they’re going to make from it. Moreover, we saw that the hefty estate-tax levels of the pre-Bush-tax-cut days didn’t prevent lots of people from hustling to amass huge estates, much of which they weren’t going to be able to keep or to pass on to their heirs.
I’d need to see a lot more hard evidence before I’d be willing to accept the airy theoretical assumption that a 100% marginal tax rate will automatically kill off all income generation beyond the income level where the 100% rate takes effect.
(And anybody who uses the term “theft” or “stealing” to refer to legal taxation earns an automatic :rolleyes:. Argue all you like that a particular tax rate is excessive, unfair, counterproductive, whatever, but don’t try to shut down debate on it just by tagging it with the inaccurate label “theft”.)
Then I’m sure you will have no trouble supplying a cite that says that the (USA) government can tax me solely because I have too much money. Or a law that says that it may confiscate my property without giving a reason.
And while you’re at it, tell Nader’s Dader that he’s wasting his time, as the law already exists.
It’ll also make it much easier for people who thought that eminent domain had to have some sort of justification, however flimsy, like “public good”.
I agree with Shagnasty and Sam Stone on this one - a 100% tax would greivously damage the economy and society. Most people would see no incentive in working past that limit when they’d get nothing for their effort and there would be a massive stagnating effect.
A high tax rate is different. Even if you set it really high, the motivation is still there. If they had to, people would pay a 90% tax in pursuit of the other 10% - they’d complain but they’d do it. In fact arguably, you could argue a high tax rate would benefit society in ways beyond just raising revenue. A person who wants to have $50,000,000 would have to do something that earns $500,000,000 - the higher rate would force entrepeneurs to work harder and be more productive.
I’ll go a lot further than this - a cap on income that wasn’t some outrageously high number as to be ineffective would be so destructive to the economy that you would see a drastic reduction in income tax collected over time. It would be wildly distorting. People who didn’t stop working all together would expend major effort in dodging the tax. Capital that would naturally want to flow to certain investments would be diverted for tax purposes, leading to inefficiency.
For an example of the results of exactly this kind of foolishness, consider the ill-fated ‘luxury tax’. It had the same impetus - make the rich bastards pay more. It had all kinds of political support on the left, becasue it taxed the worst part of being rich - the high priced luxuries. What’s not to agree with? The government gets more money, the rich stop spending money as frivolously, or they pay through the nose if they do. It was a perfect socialist tax scheme.
And the end result? The tax, which was supposed to raise extra revenues for deficit reduction, kept getting its revenue estimate lowered over time as real world data came in. In addition, the boating and small aircraft industries were hit hard - the people who were punished were the laborers and technicians who worked in those industries - not the rich. They found something else fun to do with their money. All the stupid law did was divert capital to non-taxed industries and cause thousands of people to be laid off in boat manufacturing, airplane manufacturing, luxury car manufacturing and sales, etc.
These numbers are pretty well accepted now. The luxury tax lost a lot of money for the government. Even more so when you consider that two years later Ted Kennedy sponsored a tax CUT to the boatbuilding industry to help them recover after the idiotic tax was repealed.
The real long-term damage of a ‘wealth tax’ is the redirection of massive amounts of capital from where it would do the most could to where it would best avoid taxation. It creates a massive inefficiency, which lowers GDP over time, and therefore tax revenue. You create perverse incentives for trillions of dollars of money to be diverted from where market forces alone would direct it. The effects are impossible to predict, other than to say that the economy as a whole would become dramatically less efficient at providing goods and services.
This disinformation requires refutation. The very rich pay an enormous share of the overall tax bill.
In 2006, one estimate suggests they top 1% of earners will pay 27% of all income tax. (source: Tax Policy Center)
In 1999, prior to Bush’s tax cuts, the top 1% of earners paid 29% of all income taxes. (source: Congressional Budget Office.)
Whether or not this rate is fair or not is a matter for debate. But the idea that very wealthy people do not pay a very large amount of tax is demonstrable bullshit.
I don’t disagree with your figures - they’re pretty much in line with other statistics I’ve read. But they don’t mention the other half of the equation - what percentage of income does the top one percentile earn?
What? Am I that abstruse? No, only progressivity can actually be the most fair. Let me be as blunt about this as I possibly can. If the amount of money made has no relation to the amount of time, effort, & care spent by the worker, but instead is based merely on luck, social status, networking, & negotiation, while other people work themselves to death & end up in debt for their trouble, I consider the high income delinked from personal work little better than a layabout inheriting vast wealth or a scoundrel conning his way into wealth.
Screw 'em.
Oprah has ridiculous amounts of money; fine, she’s a nice lady. But there’s no way in hell that she’s working 1000x as hard as someone making 1/1000 of what she does. The government, which has obligations to protect the whole country, certainly has the right to go where the money is, & someone whose wealth is out of all proportion to their own effort is a perfectly reasonable target.
It’s not ridiculous at all.
One, it’s math. I cannot insist that we treat the unequal equally; & for you to insist that we must call the unequal equal is obscene. I am not saying that people are not to be treated equally; I am saying that their incomes are not equal, & I will not lie & say that they are.
Two, it’s honor. People who work for a living do so because they have to; not because it’ll make them famous or it creates a new technology; but because it allows them to survive. And those people should be treated decently, not just as beasts of burden to be worked to the bone & then turned into glue at the end because they’re not bigshots.
Three, it’s a belief that a lot of people have killed & died for for 100 years.
What you call talent I call skill. And working-class people in this country often work multiple jobs, for a total of over 80 hours a week, to support their families, & lose in opportunity costs the ability to develop higher skills. The deck is stacked against them, & all these self-righteous classical liberals (which is both the so-called left & so-called right in the USA, so it includes you) laugh & say, “Well, they were stupid, & made poor decisions when they were young, so they deserve what they get,” & congratulate the successful, who you take to be proven innately superior, a natural meritocracy, by their own success. Meanwhile, people with enough capital don’t have to work for money, their money works for them, so they live like aristocrats, with a very different relationship to money. And way up at the top, there’s some lifelong screw-up trust-fund baby who has so much money he can buy & sell you, let alone the guy mopping floors for the rest of his life. And you think that’s fair. But someone says the government needs to raise taxes & you call that unfair. :rolleyes:
Well, I’ve thought about it. First, unless there is serious inspection of what schools the money is going to, vouchers will just subsidize bad private schools. There are too many fly-by-night schools run by oddballs with an axe to grind. Rather, I think we should build a national school system (nationally funded, nationally directed) in this country which is so good that only the most self-deluded whackjob could call the public schools a failure, & the private schools would dry up & shrivel away because there would be no point. Or does that somehow only work in Germany, a country with deeper & older regional & ethnic divisions than our own?
As for your argument about Bill Gates & tax breaks. Obviously you fail to understand the principle of incentive. An incentive is to get you to do something you might not want to do otherwise, not a reward for having done something you would have done anyway. Businesses occasionally get tax breaks to move into an area, on the theory that they otherwise wouldn’t. Bill Gates has already made more money than existed 100 years ago, & not taxing him is, to put it mildly, unlikely to create another breakthrough that somehow helps great numbers of people. So, there’s no need to incentivize him for something that has already happened. You could offer Microsoft tax breaks for things they do in the future, but it looks like they’re doing a lot of it anyway, for the classic Adam Smith reasons; that it allows them to gain more wealth with the power they already have. They therefore are incentivized enough by the market; they can be taxed normally, even exorbitantly, because, at this point, low taxes are not what motivates them; more market share & more income is.
In fact, highly progressive tax rates can, if balanced just right, be a “boost” to the economy, & wealth taxes certainly are; in that it takes more gross income for the upper-end incomes to gain the larger net incomes, or just to maintain wealth. Meanwhile lower incomes lose less proportionately. A business that prefers to “waste” as little as possible of its money on taxes is thus incentivized to spread the wealth among its employees; high-end Pharaonic purchasing power is lost, but the middle-incomes actually have more, & as they spend more on leisure, the economy expands.
@Furt - those figures rather surprize me, but I must confess I am in the UK where we once did have tax that was just under 100%
Now our top rate of 40% bites at $60,000 which buys a lot less in the UK than the USA as the £ is grossly overvalued. Since average income is $45,000 one can see that a lot of lower earners are in the top bracket.
As Little Nemo points out, what percentage of the real income of say the top 10% is actually paid in tax - a figure that would be impossible to determine.
For a UK example Richard Branson’s Virgin Group is (I believe) registered in the Bahamas, and Jersey is oozing with expat British money. Philip Green’s shares are in his wife’s name, and conveniently she lives in Monaco.
Interesting that you left, skill, talent, and intellect out of your little list. The fact reamins that every day people work themselves up from nothing. You seem quite comfortable assuming that the people who make a lot of money have no skills, talent or intellect that leads them to these higher salaries. Look, luck plays a role sure. Some are born taller, stronger, better looking, smarter, better athletes, etc., such is the world. The only thing we owe people is an opportunity to improve their lot in life. And it is there. People do it all the time. You should get your nose out of the Chomsky/Zinn/Marx Reader and look around you.
Yes it is. And once again you leave intellect, skill, and talent out of the equation. Telling.
You seem to relish stating the obvious fro some reason. How can I say this, here: unequal numbers are unequal. How’s that, do we agree? :rolleyes:
Marx, is that you? First, someone’s motivation is not the business of the state. Different people are motivated by different things. Sure. at a base level they have to get food, clothing, etc., but if you can’t manage that in our society you’ve got serious peoblems. Millions have and continue to sneak into this country and prove that to be a fact. And no one is talking about not treating people decently. Nice attempt at a strawman.
And the more skillful will do better. As it should be.
I’d appreciate you not putting words in my mouth. Try to debate honestly, please. Some people are stupid, yes. Some are lazy. Some made poor decisions when they were young. Those things are all true. Some also just had bad luck, are started with having the odds stacked against them. Still, even those born into bad situations can and do do well.
The world is not always fair: story at eleven. I suggest you go on a two-month extended camping trip into a wilderness area and see how far “fairness” gets you.
PLease show where I bristled at the government raising taxes. This discussion concerns whether we shold all be taxed at the same rate, not what that rate should be. And again, please refrain from putting words in my mouth. It will actually help the discussion.
Huh? What axe to grind? And the bad schools would go out of business because a better one opened up down the street.
Why are you so adamant about how we get this enviable school system? You seem to be the one with the ideological axe to grind. And, by the way, we do have such a school system—for higher education. While our public school system continues to fail us, particularly in the inner cities—and if you don’t realize that I suggest you start doing some reading—our private colleges and universities are, indeed, the envy of the world.
I’m not advocatiing not taxing Bill Gates, only not taxing him at a higher rate. My example was offered to show that people like Gates make a contribution to society far beyond what they pay in taxes. And we shouldn’t be stripping away any incentives for them to do what they do.
But how about the next Gates? He hasn’t accomplished it yet, has he? And it benefits society greatly if the next Gates in highly incentivized to out Gates Gates.
And we do. Which is one of the reasons companies put so much into R&D, which they do not pay taxes on.
And in order to achieve those goals they need operating capital. The more you tax them, the less of it they have. What do you think might benefit society more: Microsoft, or Merck, or Genentech, or Ford, or McDonalds paying another $20 million in taxes or them plowing it back into R&D or creating more jobs?
Yet when John Kennedy cut the high tax rates of the rich from 90%, the governement took in more money. And enough with the baby primer on progressive tax rates. Do you think this is a new idea or something? The point is what is the fair thing to do. Taking what people have earned away from them is wrong. For every example you raise about some trust fund kid there’s a guy who made it on his own. Now if you want to argue that inherited wealth should be taxed at more, that’s a different argument. One that you’d be more successful at from a moral standpoint. It won’t work from a practical one, but it at least is a better moral argument.
And you skipped this:
And just to make matters easier, lets stipulate that we all came from the same neighborhood. PLease answer the questions above, because that is the crux of the matter.