Thats good. If you are a large corporation of extremely wealthy, you’re more likely to reinvest your money rather than keep it as profit if the tax rate is high enough.
Here’s the thing, though. To get to the point where the government is going to take “75% of every dollar you make”, you first have to get to that ‘certain amount’. Presumably, that ‘certain amount’ is pretty high and not easy to achieve. So, in order to get to the point that you are deciding to find other pursuits that are more value for you personally, you have already likely invested nearly all of your time getting to that point.
I’m trying to think of a good analogy for what I am trying to convey. Imagine a sprinter who says, “If I get to the end of the 100 meter race and the tape is broken, what’s the point? I’m not going to run as hard unless I get to break the tape.” My point is, you don’t know whether you get to break the tape unless you run the race and finish first, and the only way to be in a position to finish first is to run the race as hard as you can; it’s simply not a determination you can make before you start, and if you do decide to preemptively make it, you’ve pre-determined that it likely won’t happen.
You are taking how they live and work now and extrapolating to another set of circumstances.
“I see these people working very hard, they aren’t going to stop if you tax them 75% on marginal dollars” is basically just a statement of opinion.
The reality is that some people will adjust, and others will not.
Professional athletes in particular have a limited earning window and the tax rate probably isn’t going to effect that much.
Surgeons on the other hand I can see just adjusting their schedule to max out the dollars. Some will, some won’t, but overall I think having taxes like that is going to induce reductions in productivity of those people. Trading the summer off and not buying another porsche (cause you already bought a new porsche every year for the last decade anyway) might be a nice tradeoff.
Anyway there would clearly be a diversity in behavior of people but I don’t see how some people don’t reduce productivity at least somewhat under that scenario.
Reinvesting is how you get Bezos though. He reinvested Amazon profits for years without taking any profits just to grow as quickly as possible.
Why do you want to make it so hard to take money off the table? As an entrepreneur and someone that hangs out with a lot of other entrepreneurs I see a lot of people who already have a really hard time taking money off the table. It’s one of the biggest mistakes that I see entrepreneurs making on a regular basis. Don’t you want them to take some of that and spend it in the economy?
Keep in mind that “reinvestment” doesn’t mean the money is going to stay in the country or go into the local economy.
Which is why I broached the possibility that it would just open up opportunities for others. You appear to be in agreement that a wealthy doctor can just hold back to make a little less, since taxes are a disincentive to work, and since wealthy people can directly dictate their earnings like adjusting a faucet.
But, even if that happens, those patients still exist; the market of money is still out there to be had.
So, if some people reduce productivity, it just means others have a chance to be more productive. If we accept that people work based on their tax burden, and can control their effort to ensure that they control their earnings, other can just working up to that tax threshold. In the grand scheme of things, we as a society aren’t losing out.
Correct me if I’m wrong, but it seems like there is a finite amount of wealth to be had. When I hear “Tax the rich!” I don’t think of folks like neutro, he’s just comfortable but not wealthy enough to influence foreign government policies. Get down with your bad self and enjoy the world as you will.
But I DO think about people/organizations that are hoarding vast wealth. Not creating jobs, or investing in industries, or funding even local infrastructure, or doing really anything to suggest they are even human beings. Not only are they not helping society, they are actively harming it–sucking the wealth out of everyone just so they can…have it, I guess. It’s an old argument, but finding a way to identify and tax that hoarded wealth would incentivize Tha Rich to part with it on their own terms. Hmm, I can give 1 billion to the government, or I can contribute it to the development of this interesting tech or industry, or whatever other pet project I can come up with in my copious free time. The wealth belongs to the nation, and if the hoarding cripples the nation, then the hoarder is crippling the nation. If you're actually contributing to the betterment of the world and that process brings in billions of , then fine and good work. Clearly you’ve found a way to provide something that a lot of people want. Enjoy it and thank you for greasing the machinery of capitalism. Keep (most of) that income. But don’t just be sitting on it while the roads crumble and people starve. That’s just monstrous and you should be treated like the monster you are.
And until that happens it seems incredibly unjust to take one cent from a family living on even $50k/year. Sure, a family can survive on that, but there’s no room for extras–it’s enough to keep folks alive so they can get up and go to work again, and that’s it.
There may not be any other doctors to take up the slack. There is an artificial limitation on the number of doctors in the country. I’m not sure medical care is one of those things where we want to incent our best people to take more time off.
Regardless, this is just one of the many effects that ultra high tax rates will have. People will start going through machinations to avoid the taxes. Groups will also for special rates for their members. All of this is perfectly predictable.
I don’t understand why we can’t have a simple and objectively fair tax system that just works. Say a $10k deduction per person and then a flat tax. At least under that scenario almost the entire populace has skin the game. A tax increase hits everyone fairly.
Who do you think is hoarding wealth though? I hear this claim but I don’t understand who it is you are talking about or what hoarding means.
All of the wealthy people I can think of have their wealth invested in working companies. That’s the opposite of hoarding.
Yes, I should be subsidized for creating jobs and get an exemption on my personal taxes for the tax my companies pay. I like that idea a lot.
You’re wrong.
This is also one of the primary issues with wealth taxes. Not only is wealth not a fixed sum, it can be super difficult to even value things. And of course if your start selling it off to pay taxes the price will go down which might end up destroying more net wealth than the government gets from the tax.
I thought we were positing a world where people are perfectly rational actors motivated by their tax burden. Why, then, wouldn’t other people become doctors to take advantage of this opportunity. We were imagining a scenario where doctors are incentivized to earn up to $2 million; you don’t think others would fill that role?
Others have already explained to you why this would not be fair; you simply said the explanation was “made up” and dismissed it.
So much for equal treatment, huh?
Aren’t you relying on subsidies when you ‘create jobs’: do you teach your employees how to read and write? Do you pay their medical bills for them?
And aren’t you profiting off of their labor, in the form of profit.
Now, you want to be paid additionally for the privilege, too?
And you want a credit for the taxes your company pays; are you willing to consider it your alter ego in all other respects, too, such as when somebody sues it? Or does it exist as a separate legal entity when it suits you to reduce liability but should be considered the same as you when it has to pay for the cost of its participation in society.
So much for fairness, too, I see.
Exactly; you’d likely have all sorts of shenanigans to dump stocks at low points and otherwise minimize the amount of wealth subject to the tax.
Beyond that, you’d have the issue that in a lot of cases, the selling off of significant amounts of wealth can skew the market itself, dropping values and otherwise having an undue impact on the person doing the selling. Example- if someone had say… a 200 million ownership stake in some company because he’s a co-founder, and the govt. says he owes them 30 million in wealth tax, it’s entirely possible that selling 30 million in stock will affect the stock market such that the value of the remaining shares ends up LESS than 170 million. So not only did the guy pay his 30 million, but by doing so, reduced the value of what he got to keep. He started with 200 million, but ended up with say… 150 million after paying his 30 million in wealth tax, and that other 20 million just disappeared as a consequence of driving stock values down by selling a bunch.
That’s pretty terrible, IMO.
Sure, but the AMA limits of the number of slots pretty purposefully. It’s not exactly easy to become a surgeon to fill the gap. Note that immigration could work but it’s also being clamped down upon by the feds.
As for the rest of your comments you are basically just verging into anti-capitalism. It seems like your theory is that any money business owners make are ill gotten gains and this justifies your push for insane tax rates.
Employing people is not without significant risk. I’ve invested into projects that lost money but the employees all still got paid. That’s the bargain of employment, you get paid for your time. In our case since I’ve made multiple people multi-millionaires through giving them stock in the company as well they also get some bonus based on performance and success of the company.
I don’t accept the narrative that employment is some kind of bad bargain. I don’t accept the narrative that capitalism is bad. And I don’t accept the narrative that the government is justified in taking as much of my life’s work as it has.
All opinions, as usual worth what you pay.
Yes, it would destroy vast amounts of wealth. This includes people’s pensions, private savings etc.
There is a reason we don’t use wealth taxes. When you start chipping away at the economic base it makes everyone poorer.
You have made assertions about my opinions that are not accurate and not based on anything said here, or elsewhere.
My theory is not that any money business owners is ill-gotten gains. Rather, I just don’t think that you ought to be rewarded specially with extra tax incentives in addition to those profits. The money is reward enough.
I’m not pushing for “insane tax rates”, either. In fact, I think you’ll be hard pressed to find any tax rate which I’ve pushed. Based on your comments, however, it does sound like you think a 25% effective tax rate is insane.
I don’t think employment is some kind of bad bargain. There is a wide chasm between such a thought, however, and thinking that you need to be paid above and beyond what you’re earning because you employed somebody else.
In fact, that’s why I don’t think capitalism is bad. Rather, I accept that it provides rewards and doesn’t need the government to subsidize the incentive to earn a profit.
And, finally, I am simply perplexed by this “narrative” you speak, whereby you claim that the government has taken as much of your “life’s work” as it has.
If it has taken so much from you, why not simply leave? You can find lower tax rates, elsewhere. Perhaps Somalia is more your style.
IF that is ridiculous, why? Is it because you couldn’t make millions over there? Or because you like what American society has to offer? What exactly is it that forces you to ensure such a predatory nation as America?
You seem to be under the impression that you paid taxes with your money. You didn’t. You paid taxes with the government’s money that you were holding. I don’t think the bank gets upset when they have to give me my deposits when I withdraw them. Why do you get upset when you give the government its money?
People come up with all kinds of excuses for why they don’t owe the taxes that the democracy in which they live have decided they owe. You said it yourself, everyone gets a vote. We vote that you pay more taxes than we do. We like it that way. If you feel differently, cast your vote accordingly, and we’ll tally them all.
I’m not under the impression anyone actually cares how you feel about it. You’re not supposed to like it, you’re supposed to do it.
You still haven’t told us exactly how you incurred this liability. I for one think it would be hysterical to discover it’s your sales tax or employer FICA tax, money collected or withheld from others for the express purpose of turning over to the government.
Yes, everyone who doesn’t agree with you should move to Somalia.
Ok, you don’t think capitalism is bad. We just disagree on tax rates. That doesn’t mean you throw out the baby with the bathwater and move to Somalia.
Basically in your world the people who pay the majority of taxes aren’t even allowed to express their displeasure with it? Otherwise they should move to Somalia?
I’m not asking for anything other than fairness and for everyone in society to have a bit of skin in the game. Being told to move to Somalia is ridiculous.
Everyone is always curious about where wealth comes from. Although I don’t mind using myself as an example I’m not sure it’s really fruitful to get into the details. I will say that I’m not talking about corporate anything here, this is just personal taxes I’m whining about. I typically get income from multiple entities and it’s a mix of cap gains / dividends / earned income.
Corporate taxes were recently cut to 20% which was a nice cut and saved us a significant amount on the corporate side.
So, rather than just discuss the topic, you’re going to continue to misstate my words?
Where did I ever say, let alone suggest, that “everyone who doesn’t agree with [me] should move to Somalia”? I wrote a bunch of things, but that’s all you got out of my post? Convenient that you don’t have to actually respond to any arguments; just put Somalia in every sentence so you can be offended that I mentioned it.
How about, instead, you actually engage me in conversation? My point was to ask why you don’t move to another country with a lower tax base. It was the same question I raised earlier in this thread, which you had also ignored.
See, if you were honest and admitted that you were not able to make so much money in a country that didn’t have as much respect for the rule of law, or provided the same infrastructure, or offered the same workforce, you might have to consider that taxes are the cost necessary to enable you to make the money you did. It’s the old maxim, “you have to spend money to make money”. At that point, complaining about the cost of doing business misses the fundamental point that those costs are why you are able to make so much money.
And a similar point holds if you say something like, “I could earn this money elsewhere, but I prefer it here.” Again, that attitude is selfish unless the person who thinks that way wants to pay for the cost of the luxury this country provides.
So, why not Somalia? Taxes are low, and that’s what matters, right? Or do taxes actually do things that explain why Somalia is such a ridiculous thought that you were insulted at the mere suggestion that it would suit you?