Your first cite cites an Oxfam report:
“a new Oxfam report showing that the 62 richest billionaires own as much wealth as the poorer half of the world’s population” [my emphasis]
but, in the headline of that same article, this mutates into
“Richest 62 people as wealthy as half of world’s population, says Oxfam”
This is arguably true — it doesn’t say which “half” of the world’s population — but certainly misleading. And then Noam Chomsky — I thought he was a smart guy — comes up with
“[In 2015] … 62 individuals hold half the world’s wealth.”
The numerator (“62 richest people”) has grown even smaller since 2015, but it’s the denominator that is ambiguous. Many of the world’s poorest have negative net worth: are they reckoned as zero wealth in these calculations? Or negative? And much of the world’s wealth is owned by governments or by non-profits, and thus not included in total individual wealth.
This is in IMHO. Everyone has a right to an opinion here. You can state your opinion about their opinion, but do not tell them what they can and cannot post or can and cannot have an opinion about.
The mantra of “tax the rich” presupposes that we can have all the programs we want (universal health care, free college tuition, a robust plan to stem climate change, infrastructure maintenance and improvements, a strong defense etc. etc.) by taxing billionaires/the 1%, while maintaining or even reducing taxes on everyone else.
This not going to fly (economically or practically), and it’s highly disingenuous for politicians to claim it will.
Eventually the bill has to come due not just for “the rich”, but for the well-off and middle class as well. Most people will have to feel the pain to some extent.
The whole wealth tax is a sham and isn’t even feasible to enforce or even be attempted.
Let’s use Jeff Bezos as an example. The Federal Government is going to arbitrarily pick one day every year to measure his wealth. AMZN stock is a volatile security, so which day does the government want to pick? December 31st? So they end of the year is selected. It says that Bezos wealth is $85 billion and the government wants 3% of that, $2.6 billion. But almost all of Bezos’ wealth is tied up in his ownership of AMZN, so the government is going to force him to liquidate a portion of his company to pay his wealth tax.
Now that’s for the owner of a publicly traded company. What about people that privately own their companies, no publicly traded exchange to value them. What mechanism will be used to value their company’s, some journalist at Forbes? And then they are forced to sell off a portion of their private company to pay the wealth tax?
This thing would be tied up in the courts forever.
While I don’t disagree with any of this - valuation of illiquid assets is a big practical issue and this will contribute to its not taking effect - this is currently happening all the time with the wealth tax that middle class people face - the property tax. I don’t see why the ultra-rich should be exempt from its vagaries if everyone else isn’t.
Some of the wealthiest people alive agree that the wealthiest don’t pay enough in taxes (not that they’re necessarily paying more taxes voluntarily of course)
Some countries do have wealth taxes: France and Italy for example. I don’t know how well they work.
There are various ways to tax. Estate taxes make sense. Real estate taxes and taxes on corporate profits make sense since there’s little scope for confusion or wealth hiding: real estate is … real!
I like the idea of consumption taxes with different rates for different goods. Food might be untaxed, while luxury items are heavily taxed. Perhaps Bezos and Zuckerberg should be allowed to retain their huge wealth until they spend it.
But whatever the details, it is appropriate that the rich pay taxes at a higher rate than the poor. (Those who disagree may not even define the term “human society” the way most of us do.)
And, please, let’s stop pretending that the rich don’t have enough riches to bother taxing. If we exclude the first $2,000,000 of each household’s income, as reported on Form 1040 as AGI, this still leaves almost a trillion dollars of excess personal income nationwide available for a tax surcharge. (Note that our Doper friend above makes “only” $2 million and wouldn’t have to pay the surcharge.) And this trillion excludes income hidden from AGI.
One trillion dollars of “excess income” as so defined. That’s ‘trillion’ with a ‘T.’ (I just noticed I spelt ‘billion’ with an ‘M’ in the post I self-quoted above. :o )
The right-wingers complaining that the extra hundreds of billions available by restoring 1990’s tax rates are ‘chickenfeed’ or ‘a rounding error’ are the same ones who complain about the National School Lunch Program providing small fresh tomatoes to poor kids for 35¢ each.
You are talking about income, not wealth, AFAICT. So, how much income is left for households who make more than $2M a year, after they pay taxes on that amount?
Thus, supposing I make $10M a year. I pay standard tax on the first $2M (unless you mean we don’t impose taxes on incomes less than $2M), capital gains, etc. I also pay standard tax on the remaining $8M. Are you saying that the total amount remaining for all such taxpayers in the US is a trillion dollars?
I am not necessarily disputing this claim, but I want to be sure I understand it.
IIUC then maybe we raise rates such that the US government then gets all or most of the trillion. Thus the government simply confiscates all income over $2M a year. If you are including capital gains in that, that is going to have a depressing effect on investment. Even if it is only income tax, that will tend (to say the least) to discourage trying to earn higher incomes. Some wealthy doctor who does surgeries and earns $3M a year is going to be incentivized to work less, since anything he earns over $2M doesn’t benefit him. Maybe he should do more, just out of the goodness of his heart, but he or she probably won’t.
Or we tax away some lesser proportion of the income. If we spend it, we are currently running about a trillion a year or so in deficit. That fact needs to be included in any proposals to raise taxes on the rich, and then implement gaudy new spending programs. As in, raise taxes by $500B, raise spending by $800B, and then change the subject when the deficit gets mentioned.
And of course this all assumes the rich will sit still and be taxed. Again, not IMO a likely outcome. There is a reason that tax lawyers can make six figures, and one man’s loophole is another man’s simple fairness.
In my career, I’ve met and worked with wealthy people who earn millions of dollars a year in income. Unless they are professional athletes, these people are almost universally in some form of ‘sales’, with an unlimited ceiling, and their very high earnings are the result of their huge commissions (I’m specifically thinking of one guy who sold aircraft, and would earn six figure commissions on each sale, or a lawyer who has a ton of clients and puts 20% of each flat fee into his pocket; also, high end realtors and wealth managers, also with commissions).
[Now, as an aside, there are obviously people who make millions per year passively, based on income producing assets, but here we are talking about those actively working]
Based on my observations, these really successful people don’t make the same amount each year; for example, some year they may have a “good year” and make closer to $10 million. Other years they may have a more “normal” year where they only make a few million.
The difference? They will chalk it up to variances in the market or the economy, or pure luck. They will most certainly not chalk it up to, “well, I was really lazy one year and decided to take it easy.” The people I am thinking of are always working, usually always on the phone, and always hustling to close another transaction.
My point? The idea that multi-million dollar wage earners, if they have a higher tax burden, will stop working so hard is just not realistic. The people who reach that level make their huge amounts precisely because they are always working and never turning down business. They can’t just ‘only’ work a portion of the year to stop their earnings at a few million - if they did that, it would mean that they are not constantly hustling, which would topple the entire money-making operation.
(Consider that hypothetical doctor who makes $3 million a year doing surgery. That person would obviously not get to that point unless they have a top of the field reputation, lots of high end clientele, and a number of prominent successes - say, athletes they were able to help get back on the field of play. If that person decided to lay low to avoid taxes, you don’t think some other doctor - working 80 hours a week - won’t swoop in and tax all of those patients and start promoting themselves as the savant in the field?)
The only possible reason I could see it being otherwise is if people suddenly start getting taxed above 100%, which nobody is proposing. Even AOC’s 70% proposal (largely criticized when she had made it earlier) would only apply to earnings about $10 million. What, you think the guy who made $15 million last year, and $12 million the year before, is suddenly going to half-ass it because he would have owed an additional $3.5 million the $15 and $1.4million on the $12million?
I truly think that if people think that the ultra-wealthy wage earners would stop their efforts because of a huge tax burden, they’ve never seen how those people live and work.
If that’s the case, then ISTM that the companies are over-paying them.
If the company put a limit on how much they earned - after, say, $2 million in commissions per year the company just kept everything and didn’t pay any commission - that would be more profitable for the company and the sales people you describe would produce the same amount in sales because they can’t help themselves.
No, it’s not that. It’s that, if a person has a goal of making as much as they can, then they can’t just stop at some arbitrary point and say, “I’ve done enough”. If you take that attitude, you wouldn’t be successful in the first place. You are suggesting that a person who earns millions can just tweak their effort to come in under the tax ceiling; I think that’s an absurdity.
@ Shodan — So the only two alternatives are to leave the top tax rate (for income above $1 or $2 million) at the present historic-low level, or to increase that rate to 100% (or almost that high). No middle-ground is possible. Got it.
That’s kind of what I meant by saying the company is wasting money paying commissions above any arbitrary point - the sales people can’t and won’t stop, they will just continue to make as many sales as possible.
I don’t suppose you could trouble yourself to read my post all the way to the end. Or at least to the point where I said -
Ah well - Shodan’s Law. If they didn’t read it the first time, they won’t read it the second time either.
Spain does too but it comes and goes. Right now it’s set by each region, with the central government acting as the collector for most regions (our central treasury can act as a subcontractor for a lot of taxes which are defined at the regional or municipal level, they collect the money and pass it over to whomever ‘owns’ it); I think neither of the two regions which have their own collecting structures has it active. Sadly, the “divulgative” articles I find have all been written by people who assume anybody reading them knows how to read a P&L report, which I definitely don’t. There is some sort of 2M€ cutoff and about 200K people who will need to file that tax for this year, it’s always personal (not familiar), which I guess is linked to why so many rich people distribute the official ownership of their wealth among relatives as much as possible, but the rest goes way above my head.
It seems to be the kind of tax which is used as a sort of cushion, now I have it now I don’t depending on which way the political and economical winds blow.
Thats a strawman argument though. Its not about punish everyone who does better than me personally, its more about making sure the top 0.1% who have gained 90% of the wealth created in the last 50 years while their taxes have been cut are seeing their tax rates go up to compensate for the tax cuts they’ve gotten and the increase share of wealth and income that has gone to them. The share of income and wealth controlled by the top 0.1% keeps growing while their taxes keep getting cut.
Also it is undemocratic to have a handful of extremely rich people. They can buy politicians with their pocket change. The Koch network spent 900 million in 2016, which is a huge % of total funding on politics in that year. Rich people can buy media to promote their viewpoints, they can buy politicians. They can even (in more corrupt nations) buy cops, judges and soldiers. It poses a risk to democracy itself to have a handful of rich people with too much power.
The total tax rate in the US is around 25%. About 25% of GDP is collected in tax revenue. The OECD average is around 35%, with some nations closer to 40%. I’d be fine with a rate closer to 35% that comes from taxes on the rich as well as some higher taxes on everyone else if it meant universal health care, universal long term care, addressing climate change, free public college, subsidized daycare, etc.
Some ‘rich’ people are paying too much in taxes if anything. People in the 500k-1mm a year household income probably pay 40% of their total income in taxes. Thats not really fair to them, esp when you consider that some companies and rich people pay no taxes or at the very least far less in taxes. However I’d fully support taxing capital gains and dividends as regular income, and a wealth tax.
People that are significant wage earners, don’t work because they enjoy the hustle and just like making money regardless of who it goes to. They work and hustle because they money is going to them. Trust me, I am my own cite. If there was a diminishing return on my investment of my time, i.e. if you are going to take 75% of every dollar I make above a certain amount, then I’m going to find other pursuits that I find more valuable for me personally, than toiling for Uncle Sam.
You seem to be arguing that, if tax rates are too high, we as a society will lose out on the benefit of our most productive citizens, right? I mean, in this scenario, there’s no bad outcome for the doctor who decides to work less - it’s just more vacation or leisure time. Hell, if that’s what’s happening, that person probably is injecting more money into the economy: it tends to be easier to spend money when you aren’t working than when you are.
So, do I have it right that the problem is the lack of social benefit? We are telling people to not work so much because it is not profitable to do so, right?
If that be true, though, then doesn’t that just create a platform for a more diversified success among lots of different people. Take your doctor: clearly top of the field to be earning millions. Now, though, takes 3 months off during the summer, to avoid the tax hit.
Haven’t we just opened up the field of potential clients to those people who aren’t as successful? During those summers, aren’t doctors who haven’t cracked the million dollar a year mark going to fill the void, take on the patients, and work those extra hours.
In other words, if you are right, and people will hold back because their taxes are too high, does that really extract a social cost, if other people will make up for it with their own work? Per your theory, the incentive to slow down and work less only applies once you reach that tax threshold, correct?
— comes up with