I suppose this could easily tip over into Great Debates but I’m genuinely curious…
A lot of democratic politicians keep saying “tax the rich! taxes must go up!” but is the tax rate even a problem? Seems to me the bigger problem is people (and corporations) who pay almost no taxes whatsoever by exploiting loopholes. So in one sense, increasing taxes on rich people who already pay taxes isn’t going to do much of anything.
Or am I totally off base?
“Exploiting loopholes” is that your definition of following the tax code? It’s easy to spout off or repeat tropes like “Amazon had $11 billion in profits and paid no taxes last year”.
We have a part of the tax code that when a company has losses, and can’t deduct them, it can carry forward those losses into future years to offset income they generate into the future. This isn’t some special loophole only permitted for Company’s run by Jeff Bezos, it’s permitted to be used by all companies. It’s there to help incentivize innovation and growth. Most companies when they begin are not immediately profitable, many struggle with losses for many years until their business plans come into fruition.
Amazon only recently began generating profits. It racked up losses for many years. Much in the same way that Tesla is currently.
Do we need tax reform? Yes, we need to make filing your taxes for people and companies simpler. Do we need to find ways to balance our federal budget? Definitely. That needs to come from increased taxes and a smaller federal budget.
The richest 400 families pay a lower tax rate than middle class. That’s overall taxes, not just income tax. This is not from obscure loopholes, this is from a lower tax rate and ways they can avoid paying.
So, if you are middle class and don’t like paying more than the Koch’s, you know who to thank. As for spending less, get back to me on that the next time your suspension goes out after running over a pothole or a bridge about to fall down is closed.
“Tax rate” is already an abstraction though. If I make $2M and pay $500k in taxes and you make $100,000 and pay 30k in taxes you are paying a higher tax rate but I’m writing a check that’s 15x larger. Of course the only way that would happen is if those are capital gains or dividends. Capital gains entail risk and dividends are double taxed.
Overall I don’t really see the problem. Rich people pay way more in absolute terms.
Watch it there neutron, you will be accused of supporting regressive taxes!
A country needs a certain amount of money to be run to a particular standard. Ideally, you should get that money from where it will be missed the least.
Why?
I would argue the opposite. Everyone gets a vote and everyone should be on the hook to pay for what the government comes up with. If you can’t pay because you are on hard times, that’s fine, some kind of minimum deduction seems good. But beyond that a fair amount of tax would be everyone paying the same IMHO. Note, not the same percentage, the same amount.
If I go to burger king they don’t charge me more based on my income. This is just an excuse to justify taking as much as possible.
Who misses money less???
The loss of any particular sum or percentage of money is felt less by people who have more money than by people who have less money. This is why, for example, accidentally dropping a couple of twenties in the street can be a budget-wrecking disaster for a poor person but may not even be noticed by a rich person. See also: Diminishing marginal utility of income and wealth.
Diminishing marginal utility is something made up to justify taking the money IMHO.
People who are productive can use that capital to do exciting things. Imagine if we had taxed away all of Elon Musk’s wealth for example.
Yes, your last $20 is valuable if it’s all you have. So a reasonable deduction on taxes makes sense. But that’s not an argument to soak everyone else.
ISTM that attitude is elevating dogma over acknowledgement of reality. You don’t want rich people to be disproportionately taxed, so you simply ignore the fundamental fact that losing, say, a hundred bucks or a day’s wages generally has much less negative impact on rich people than poor people. That’s all that diminishing marginal utility of wealth/income means.
Sure, but (a) not everybody who has a lot of money is productive, and (b) nobody AFAIK is seriously suggesting that taxation should take away all or even most of the money rich people have. Just that it makes sense to tax rich people more than poor people, since as a matter of simple practicality they can more easily spare the money.
Plenty of rich people in relatively high-tax countries are managing both to live very comfortably and to do exciting things with their capital despite paying a higher proportion of their income/wealth in taxes. I wouldn’t insult American rich people by assuming that they’re not capable of similar achievements and therefore mustn’t be subjected to a higher tax rate because it’ll bweak their poor widdle motivations and make them feel all sad. 
:rolleyes:
You know what the difference is between economics and geology? Nobody ever goes up to a geologist and says “Igneous rocks are bullshit!” Marginal utility isn’t even a debate, it’s a fundamental concept, and refusing to acknowledge it even exists disqualifies you.
Yes, you can be disqualified from a debate. Thinking you have the right to have an opinion is the real bullshit.
The economic part of it is fine. But people then use it to claim how people are supposed to feel about paying huge checks to the government and from that perspective it’s BS. The first time I wrote a huge check it made me question where the money went a lot more.
Meh, next time you write a check for $500k to the government we can talk. I really doubt you appreciate what it’s like to do that.
This number is utterly meaningless unless you also disclose the gross revenues that caused such a tax liability. Don’t be coy: how much?
I already listed it above $2M or so in round numbers. Did you guys think that was a hypothetical?
Nah, Derleth I’m with ya right up to where ya said, in essence, that neutro doesn’t have a right to an opinion. That’s the bs, not his wrong opinion. How ya gonna kick him (her?) out of the convo anyway?
My (hopefully) useful addition to this is…is…ah shoot, well we wore an onion on our belt…
Anyway I’ve had this discussion before. Soak the rich is basically the mantra of most people. I get it, but I think it’s kinda gross. People will come up with all kinds of excuses as to why anyone who makes more than them should get soaked before them.
I can’t. I can, however, say that unless someone’s living in the same world as me, trying to debate them is pointless.
Education is hard. Self-righteous ignorance is easy. The former can’t conquer the latter until the person to be taught renounces enough ego to admit they were wrong. neutro shows no sign of that so far, so I refuse to waste my time.
I guess my question is whether or not there’s really that much money to be had by sticking it to the rich more. They’re not pulling their weight in terms of taxes anyway, so go for it if that’s the case.
But if there’s really not that much money to be had in terms of governmental tax revenue(i.e. enough to materially change the Federal budget), then it sounds like sour grapes driven retribution / class warfare to me, and that makes me more than a little bit uneasy.