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Max Power

Wealth Tax

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13 hours ago, Max Power said:

This was again brought up in the debate this week and not a single mention of if it is constitutional or not. 

That's not part of the script.  The script is to get all the spending in and then deal with the fallout of the wealth tax funding being unconstitutional. That way the spending never goes away.  They will recoup by levying huge income taxes, severely limiting tax shelters (401ks and IRAs get squeezed to very small contribution limits), and applying draconian estate taxes.  

There is no way that there will be a challenge to an idea that squelches the righteous indignation vote in these debates.

Edited by Sand

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52 minutes ago, Sand said:

That's not part of the script.  The script is to get all the spending in and then deal with the fallout of the wealth tax funding being unconstitutional. That way the spending never goes away.  They will recoup by levying huge income taxes, severely limiting tax shelters (401ks and IRAs get squeezed to very small contribution limits), and applying draconian estate taxes.  

There is no way that there will be a challenge to an idea that squelches the righteous indignation vote in these debates.

So then what is your suggestion? I'm not being snark, you are one of the more knowledgeable people here especially on these topics but it is much easier to play devil's advocate in this topic. Do you think the status quo is working? Or do you think wealth inequality threatens the republic? I am a capitalist but I fear the retribution, some of which we are seeing, if this continues. 

Now I don't deny the US has a balance sheet problem and the liabilities side probably needs more addressing but the asset side must also be addressed. Trump's tax cuts didn't help that but I think we need to increase revenue while also lower spending. Now when the richest 400 Americans are worth $2.96T and the US deficit is a $1T per year, you can only fund the government for 3-years by taking all their money. But as automation continues and more value accrues to the capital holders, the government safety net will also likely be increased. 

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1 hour ago, sporthenry said:

So then what is your suggestion? 

In short if "something has to be done" it will likely be in the form of more gradations in the capital gains tax and tweaking the estate tax.

It's easy to forget, though, that historically the economy had more income equality than we now have and we survived.  The after effects of WWII were unique.

It's also easy to forget that the effects of a socialist government doesn't bring the lower end of the scale up to equilibrate, it lowers everyone down to equilibrate. 

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8 hours ago, Sand said:

In short if "something has to be done" it will likely be in the form of more gradations in the capital gains tax and tweaking the estate tax.

It's easy to forget, though, that historically the economy had more income equality than we now have and we survived.  The after effects of WWII were unique.

It's also easy to forget that the effects of a socialist government doesn't bring the lower end of the scale up to equilibrate, it lowers everyone down to equilibrate. 

Can we tax something like miles of good traveled? To me that seems like the easy button. Amazon and Walmart are probably the two companies damaging our roadways the most. At least pass that part of the bill to them and call it a day. 

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1 hour ago, Max Power said:

Can we tax something like miles of good traveled? To me that seems like the easy button. Amazon and Walmart are probably the two companies damaging our roadways the most. At least pass that part of the bill to them and call it a day. 

Yes, we do this in the form of gasoline taxes.

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On 10/18/2019 at 1:11 PM, Sand said:

In short if "something has to be done" it will likely be in the form of more gradations in the capital gains tax and tweaking the estate tax.

It's easy to forget, though, that historically the economy had more income equality than we now have and we survived.  The after effects of WWII were unique.

It's also easy to forget that the effects of a socialist government doesn't bring the lower end of the scale up to equilibrate, it lowers everyone down to equilibrate. 

you are so right.

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On 10/19/2019 at 1:18 AM, Maurile Tremblay said:

Yes, we do this in the form of gasoline taxes.

Yes.  And these taxes get redistributed through Authorization Acts to States (current Auth Act is the FAST Act which ends 9-30-20) in the form of Federal Aid Grants  It's all managed by the Federal Highway Administration, part of the US DOT.  Title 23

There is a large shortfall of gas taxes collected to fund the FAST Act though.  It's not a self sustaining program and requires additional tax revenues.  Also worth noting, the FAST Act grants a certain Apportionment of funds to each State, but Congress sets an Obligation limit through the annual Appropriation of just how much of the Apportioned amounts each State can actually spend.  The Obligation limit has has been lower through the life of the FAST Act and the FHWA is in the process of rescission to recapture about $7.6 billion of unobligated funds.  

 

 

 

Edited by beef

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On 9/30/2019 at 6:53 PM, Shula-holic said:

Also key to note is there is a significant difference in tax evasion and tax avoidance.  When you talk loopholes,  you are referring to avoidance, not in that missing slice of the pie mentioned above.  Avoidance is not illegal, evasion is tax fraud.    I can kind of get on board somewhat with the statement the rich obviously do have more means to fight it, connections etc.  But getting on the wrong side of the IRS is a recipe for a miserable life.  I'd say from experience that most wealthy people do look for tax avoidance strategies, loopholes some would call them.  At the end of the day though they have no real interest in fighting a pitched battle in court with the IRS.  Most judgments from audits don't end up in tax court, but rather result in payments to dismiss the liability.  

I dont say evasion, I say avoision

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On 9/30/2019 at 12:45 AM, Max Power said:

A wealth tax on the richest Americans seems to be the go to answer whenever some of the Democratic candidates are asked how they intend to fund their plans.  While it appears to be highly popular, I am skeptical of of the idea. We don't do much to deter US money from being moved offshore by the ultra rich and I think implementing a wealth tax would only increase the number of people looking for Tax loopholes.  I worry some of the costs of these programs will trickle down to upper-middle class.

What are some forum thoughts on this?  Support it or not?  Will it work or backfire? 

 

 

 


The genius of the modern day GOP is its ability to get working class folks like the OP to oppose taxing the rich.   


 

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14 minutes ago, tommyGunZ said:


The genius of the modern day GOP is its ability to get working class folks like the OP to oppose taxing the rich.   


 

:whoosh:

Missed that one worse than a Trubisky throw.

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28 minutes ago, Max Power said:

:whoosh:

Missed that one worse than a Trubisky throw.

There are books written about it. Why does a poor working class guy in Kentucky care whether a millionaire is taxed an additional 3% ONLY AFTER they have made their first $50 million or whatever the numbers are???

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6 minutes ago, urbanhack said:

There are books written about it. Why does a poor working class guy in Kentucky care whether a millionaire is taxed an additional 3% ONLY AFTER they have made their first $50 million or whatever the numbers are???

A better question might be why it would work in the U.S. when France, Germany, and Sweden all abandoned this idea. 

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4 minutes ago, Shula-holic said:

A better question might be why it would work in the U.S. when France, Germany, and Sweden all abandoned this idea. 

I don’t know anything about these discarded attempts, I’d be interested in a link if anyone has one.

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On 10/18/2019 at 3:11 PM, Sand said:

 

It's also easy to forget that the effects of a socialist government doesn't bring the lower end of the scale up to equilibrate, it lowers everyone down to equilibrate. 

I don't understand what you mean by this statement.  I'm not even sure about your use of "equilibrate" as a noun so I'm substituting "equilibrium" in my mind.  Maybe I'm being confused by that.  Equilibrium/Equilbrate of what?  And how can everyone go down to some type of equilibrium?  By definition, equilibrium implies some sort of balance.

 

 

 

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1 minute ago, Juxtatarot said:

I don't understand what you mean by this statement.  I'm not even sure about your use of "equilibrate" as a noun so I'm substituting "equilibrium" in my mind.  Maybe I'm being confused by that.  Equilibrium/Equilbrate of what?  And how can everyone go down to some type of equilibrium?  By definition, equilibrium implies some sort of balance.

Equality, elimination of inequality.  I guess the perfect "balance" would be socialist utopia - everyone has the same everything.  And by everything I mean monetary resources.

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7 minutes ago, urbanhack said:

There are books written about it. Why does a poor working class guy in Kentucky care whether a millionaire is taxed an additional 3% ONLY AFTER they have made their first $50 million or whatever the numbers are???

I dont care. What I do care about is hearing this top 1% of 1% is going to pay for college, medicare for all, going green and so on and I'm skeptical.  

The top .1% could change the world tomorrow with their wealth if they wanted to and they don't.  So even if it does get implemented, I can see a scenario where they find ways to avoid paying (shocking right) and the bill comes due for others to eat. 

 

 

 

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28 minutes ago, Shula-holic said:

A better question might be why it would work in the U.S. when France, Germany, and Sweden all abandoned this idea. 

Because they don’t have same unregulated capitalistic society where being a millionaire and having wealth is coveted more than anything else?

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1 hour ago, tommyGunZ said:


The genius of the modern day GOP is its ability to get working class folks like the OP to oppose taxing the rich.   


 

It has been this way for 30+ years.   They're also good at convincing people that if there is a slight taxe increase on the ultra wealthy the next logical step is complete confiscation of all wealth in America and the institution of communism.  It's unbelievable. 

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2 hours ago, tommyGunZ said:


The genius of the modern day GOP is its ability to get working class folks like the OP to oppose taxing the rich.   


 

“A democracy can only exist until the voters discover that they can vote themselves largess from the public treasury.”

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1 hour ago, Max Power said:

The top .1% could change the world tomorrow with their wealth if they wanted to and they don't. 

The handful of richest people I know of are also the ones doing the most to change the world for the better, as far as I can tell.

Bill Gates, Warren Buffett, et al....

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2 hours ago, Max Power said:

The top .1% could change the world tomorrow with their wealth if they wanted to and they don't. 

Those folks are actively changing the world as we speak.

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1 hour ago, Maurile Tremblay said:

The handful of richest people I know of are also the ones doing the most to change the world for the better, as far as I can tell.

Bill Gates, Warren Buffett, et al....

Preet had a very interesting guest on last week named Anand Giridharadas, his premise disagrees with your statement.  Not sure where my own thoughts on it are but his views were interesting.  

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3 hours ago, urbanhack said:

Because they don’t have same unregulated capitalistic society where being a millionaire and having wealth is coveted more than anything else?

Not sure what that would have to do with turning away from the idea of a wealth tax.  If anything, that would lead them to all be in favor of it.

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2 hours ago, Sand said:

Those folks are actively changing the world as we speak.

Through business as well

Edited by Shula-holic

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9 hours ago, Sand said:

Those folks are actively changing the world as we speak.

But they are choosing where to help.   The gubbermint wants to decide for them.....

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6 hours ago, supermike80 said:

But they are choosing where to help.   The gubbermint wants to decide for them.....

Taking the most obvious example - do we think Bill Gates or Congress is more efficient and effective at allocating capital?

Yes, this is a rhetorical question.

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16 minutes ago, Sand said:

Taking the most obvious example - do we think Bill Gates or Congress is more efficient and effective at allocating capital?

Yes, this is a rhetorical question.

OK

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2 hours ago, Sand said:

Taking the most obvious example - do we think Bill Gates or Congress is more efficient and effective at allocating capital?

Yes, this is a rhetorical question.

I think I am more efficient and effective than Congress in allocating capital.  Yet, I still have to pay taxes.  Probably at more of a percentage than many $billionaires too.

Here's a rhetorical question.  Let's say we could go back in time and talk to a self-made $Billionaire like Bezos.  Picture him in 1997 driving in his Honda to the Post Office delivering that days' Amazon orders.  You say "Hey Jeff, here's the deal.  In 25 years you are going to be the world wealthiest person.  The richest man who ever lived.  Worth more than $100 billion dollars.  The only caveat is that you will have to pay a wealth tax."  Do you think Bezos says "Wealth Tax!  If that's the case I'll do a hard pass and get back to my day job"?

Personally, I'm not really for a Wealth Tax.  However, I do understand that there is a huge gulf between the rich and the not-rich.  And the rich are only solidifying their position at the very top to the expense of everyone else.  There is an vast unclaimed national resource from our population because they don't have the opportunity to have their "merit" shine.  And we should look for ways to mine that resource.  What are the blocks for those not in the top 1-10%?  The high cost of education; medical expenses; income inequality - just to name 3.  And if that is the stumbling block - we need to look to fix it and raise all of our boats without the fear tactics of resorting to calling it "SOCIALISM".  And if Bezos' net worth were to drop from $100 billion to $97 billion in order to solve these issues - I think even he would agree it's all worth it. (Again, I'm not saying a wealth tax is the answer - just an example here - the very rich need to help out)

The central issue is that the rich have the system gamed for them...and we are all losing out.

Glass floor is keeping Americas richest idiots at the top

 

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3 hours ago, siffoin said:

Here's a rhetorical question.  Let's say we could go back in time and talk to a self-made $Billionaire like Bezos.  Picture him in 1997 driving in his Honda to the Post Office delivering that days' Amazon orders.  You say "Hey Jeff, here's the deal.  In 25 years you are going to be the world wealthiest person.  The richest man who ever lived.  Worth more than $100 billion dollars.  The only caveat is that you will have to pay a wealth tax."  Do you think Bezos says "Wealth Tax!  If that's the case I'll do a hard pass and get back to my day job"?

I know that question was rhetorical, but of course everyone would answer: "If you're going to increase my chance of becoming extremely wealthy from the normal percentage (less than 1%) to something like 100%, and all I have to do is agree to pay a reasonable wealth tax (2% or whatever) down the road, then of course I'm in -- sign me up!"

But that's the wrong question for a couple of reasons.

First, enacting a wealth tax isn't going to hugely increase anybody's chance of becoming extremely wealthy. So that's not really the deal being offered in real life.

Second, and probably more importantly, the relevant question isn't about how much in taxes our 1997 Jeff Bezos would agree to pay in the future on the chance he becomes rich someday. The question is whether he should prefer to pay such taxes in the form of an income tax or a wealth tax. (We can offer him a similar bargain under either tax.)

The arguments I've seen for enacting a wealth tax in lieu of raising the income tax are not persuasive to me. Just the opposite. I think increasing the income tax or enacting a consumption tax, or both, as progressive as you'd like to make them, would be better for society than enacting a wealth tax.

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23 hours ago, siffoin said:

I think I am more efficient and effective than Congress in allocating capital.  Yet, I still have to pay taxes.  Probably at more of a percentage than many $billionaires too.

Here's a rhetorical question.  Let's say we could go back in time and talk to a self-made $Billionaire like Bezos.  Picture him in 1997 driving in his Honda to the Post Office delivering that days' Amazon orders.  You say "Hey Jeff, here's the deal.  In 25 years you are going to be the world wealthiest person.  The richest man who ever lived.  Worth more than $100 billion dollars.  The only caveat is that you will have to pay a wealth tax."  Do you think Bezos says "Wealth Tax!  If that's the case I'll do a hard pass and get back to my day job"?

Personally, I'm not really for a Wealth Tax.  However, I do understand that there is a huge gulf between the rich and the not-rich.  And the rich are only solidifying their position at the very top to the expense of everyone else.  There is an vast unclaimed national resource from our population because they don't have the opportunity to have their "merit" shine.  And we should look for ways to mine that resource.  What are the blocks for those not in the top 1-10%?  The high cost of education; medical expenses; income inequality - just to name 3.  And if that is the stumbling block - we need to look to fix it and raise all of our boats without the fear tactics of resorting to calling it "SOCIALISM".  And if Bezos' net worth were to drop from $100 billion to $97 billion in order to solve these issues - I think even he would agree it's all worth it. (Again, I'm not saying a wealth tax is the answer - just an example here - the very rich need to help out)

The central issue is that the rich have the system gamed for them...and we are all losing out.

Glass floor is keeping Americas richest idiots at the top

 

He said it was rhetorical..so he didn't want a reply.  

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On 10/23/2019 at 3:27 PM, supermike80 said:

He said it was rhetorical..so he didn't want a reply.  

Siffoin is an exception enshrined in the bylaws.

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If Bill Gates or some other billionaire wants to use their money to help they still have to work though regulations and processes. The government is a blunt instrument but it becomes that way because fixing things when you actually set down to do them get complex.

How is Gates money go to address fixing roads, getting health care working better, improving schools, advancing the military, etc?

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On 10/21/2019 at 4:22 PM, fatguyinalittlecoat said:
On 10/21/2019 at 4:16 PM, Shula-holic said:

A better question might be why it would work in the U.S. when France, Germany, and Sweden all abandoned this idea. 

I don’t know anything about these discarded attempts, I’d be interested in a link if anyone has one.

On France: 

France Tried Soaking the Rich. It Didn’t Go Well.
A wealth tax and sky-high rates on top incomes didn’t yield much revenue. 
By Noah Smith
November 14, 2019, 2:30 AM PST

In recent years, several prominent economists have brought attention to the problem of growing inequality. These scholars include Thomas Piketty, author of the best-selling book “Capital in the Twenty-First Century,” and Emmanuel Saez and Gabriel Zucman, who in a new book chronicle the rise in American wealth inequality. All three embrace the same solution:  much higher taxes. Piketty has declared that billionaires should be taxed out of existence, and he called for a global wealth tax, while Saez and Zucman helped Democratic presidential candidate Elizabeth Warren design her proposal for a U.S. wealth tax. Piketty and Saez have also suggested taxing top incomes at a rate of more than 80%.

Other economists have struggled to evaluate dramatic proposals like this. Studies on the effects of taxation when rates are moderate might not be a good guide to what happens when rates are very high. Economic theories tend to make a host of simplifying assumptions that might break down under a very high-tax regime. Historical experience is of some help, because the U.S. had very high top income taxes in the 1950s, but economic conditions could be very different now.

One way to predict the possible effects of the taxes is to look at a country that tried something similar: France, where Piketty, Saez and Zucman all hail from.

During the past few decades, as income inequality rose in most rich countries, it stayed relatively constant in France. The biggest reason is government redistribution in the form of taxes and social-welfare spending. France leads its rich-country peers, including the legendarily egalitarian Scandinavian countries, on both measures:

[Graph at link.]

France, therefore, shows that inequality, at least to some degree, is a choice. Taxes and spending really can make a big difference.

But there’s probably a limit to how much even France can do in this regard. The country has experimented with both wealth taxes and very high top income taxes, with disappointing results.

France had a wealth tax from 1982 to 1986 and again from 1988 to 2017. The top rate was between 1.5% and 1.8%, with the total tax rate on fortunes larger than 13 million euros ($14.3 million) hovering at about 1.4%. This is much less than the 6% top rate proposed by Warren (not to mention the 8% proposed by her fellow candidate, Senator Bernie Sanders), but it's close to the 2% rate Warren would impose on fortunes larger than $50 million.

The wealth tax might have generated social solidarity, but as a practical matter it was a disappointment. The revenue it raised was rather paltry; only a few billion euros at its peak, or about 1% of France’s total revenue from all taxes. At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium, which has a large French-speaking population. When these individuals left, France lost not only their wealth tax revenue but their income taxes and other taxes as well. French economist Eric Pichet estimates that this ended up costing the French government almost twice as much revenue as the total yielded by the wealth tax. When President Emmanuel Macron ended the wealth tax in 2017, it was viewed mostly as a symbolic move.

Another French experiment was the so-called supertax, a 75% levy on incomes of more than 1 million euros. Introduced by socialist President François Hollande in 2012, the supertax added to the exodus of wealthy individuals, most notably actor Gerard Depardieu and Bernard Arnault, chairman of LVMH Moet Hennessy Louis Vuitton. Star soccer players threatened to go on strike, and there was fear that France would become a wasteland for entrepreneurs. Meanwhile, the supertax raised much less money than even the wealth tax had -- only 160 million euros in 2014. The unpopular tax was repealed two years after its adoption.

France’s experiments with taxing the wealthy at very high rates didn’t raise much money and didn’t prove politically sustainable. The flight of wealthy individuals from the country probably helped reduce inequality on paper, but it's not clear that their departure left France better off.

It’s possible that similar tax experiments in the U.S. might be more successful than in France. The U.S. economy is much larger than France’s; although a French business owner who moves to Belgium can still do business and move about freely within the European Union, an American mogul who moves to Canada might find access to one of the world’s largest markets restricted. That might allow the U.S. to raise more money from high taxes than France ever could.

But it’s also worth noting that France’s wealth tax and supertax ultimately weren’t that important. Despite repealing the supertax, France managed to increase government revenue and to reduce inequality. The end of the wealth tax will probably be a similar story. France simply didn’t need these flamboyant taxes on the rich to have very high levels of taxation and social spending. That means the U.S. probably doesn’t need them either. Tax increases across the board -- on top incomes, capital gains, estates, pass-through businesses, corporations, and so on -- might not excite populist firebrands, but they’re probably a more effective strategy for fighting inequality.

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On 10/21/2019 at 9:18 PM, Maurile Tremblay said:

The handful of richest people I know of are also the ones doing the most to change the world for the better, as far as I can tell.

Bill Gates, Warren Buffett, et al....

You forgot the Clinton Foundation.

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20 hours ago, Maurile Tremblay said:

On France: 

France Tried Soaking the Rich. It Didn’t Go Well.
A wealth tax and sky-high rates on top incomes didn’t yield much revenue. 
By Noah Smith
November 14, 2019, 2:30 AM PST

 

  Reveal hidden contents

In recent years, several prominent economists have brought attention to the problem of growing inequality. These scholars include Thomas Piketty, author of the best-selling book “Capital in the Twenty-First Century,” and Emmanuel Saez and Gabriel Zucman, who in a new book chronicle the rise in American wealth inequality. All three embrace the same solution:  much higher taxes. Piketty has declared that billionaires should be taxed out of existence, and he called for a global wealth tax, while Saez and Zucman helped Democratic presidential candidate Elizabeth Warren design her proposal for a U.S. wealth tax. Piketty and Saez have also suggested taxing top incomes at a rate of more than 80%.

Other economists have struggled to evaluate dramatic proposals like this. Studies on the effects of taxation when rates are moderate might not be a good guide to what happens when rates are very high. Economic theories tend to make a host of simplifying assumptions that might break down under a very high-tax regime. Historical experience is of some help, because the U.S. had very high top income taxes in the 1950s, but economic conditions could be very different now.

One way to predict the possible effects of the taxes is to look at a country that tried something similar: France, where Piketty, Saez and Zucman all hail from.

During the past few decades, as income inequality rose in most rich countries, it stayed relatively constant in France. The biggest reason is government redistribution in the form of taxes and social-welfare spending. France leads its rich-country peers, including the legendarily egalitarian Scandinavian countries, on both measures:

[Graph at link.]

France, therefore, shows that inequality, at least to some degree, is a choice. Taxes and spending really can make a big difference.

But there’s probably a limit to how much even France can do in this regard. The country has experimented with both wealth taxes and very high top income taxes, with disappointing results.

France had a wealth tax from 1982 to 1986 and again from 1988 to 2017. The top rate was between 1.5% and 1.8%, with the total tax rate on fortunes larger than 13 million euros ($14.3 million) hovering at about 1.4%. This is much less than the 6% top rate proposed by Warren (not to mention the 8% proposed by her fellow candidate, Senator Bernie Sanders), but it's close to the 2% rate Warren would impose on fortunes larger than $50 million.

The wealth tax might have generated social solidarity, but as a practical matter it was a disappointment. The revenue it raised was rather paltry; only a few billion euros at its peak, or about 1% of France’s total revenue from all taxes. At least 10,000 wealthy people left the country to avoid paying the tax; most moved to neighboring Belgium, which has a large French-speaking population. When these individuals left, France lost not only their wealth tax revenue but their income taxes and other taxes as well. French economist Eric Pichet estimates that this ended up costing the French government almost twice as much revenue as the total yielded by the wealth tax. When President Emmanuel Macron ended the wealth tax in 2017, it was viewed mostly as a symbolic move.

Another French experiment was the so-called supertax, a 75% levy on incomes of more than 1 million euros. Introduced by socialist President François Hollande in 2012, the supertax added to the exodus of wealthy individuals, most notably actor Gerard Depardieu and Bernard Arnault, chairman of LVMH Moet Hennessy Louis Vuitton. Star soccer players threatened to go on strike, and there was fear that France would become a wasteland for entrepreneurs. Meanwhile, the supertax raised much less money than even the wealth tax had -- only 160 million euros in 2014. The unpopular tax was repealed two years after its adoption.

France’s experiments with taxing the wealthy at very high rates didn’t raise much money and didn’t prove politically sustainable. The flight of wealthy individuals from the country probably helped reduce inequality on paper, but it's not clear that their departure left France better off.

It’s possible that similar tax experiments in the U.S. might be more successful than in France. The U.S. economy is much larger than France’s; although a French business owner who moves to Belgium can still do business and move about freely within the European Union, an American mogul who moves to Canada might find access to one of the world’s largest markets restricted. That might allow the U.S. to raise more money from high taxes than France ever could.

But it’s also worth noting that France’s wealth tax and supertax ultimately weren’t that important. Despite repealing the supertax, France managed to increase government revenue and to reduce inequality. The end of the wealth tax will probably be a similar story. France simply didn’t need these flamboyant taxes on the rich to have very high levels of taxation and social spending. That means the U.S. probably doesn’t need them either. Tax increases across the board -- on top incomes, capital gains, estates, pass-through businesses, corporations, and so on -- might not excite populist firebrands, but they’re probably a more effective strategy for fighting inequality.

 

I don't have the answer.  But I do have a question to this which is:  Do you think Billionaires should pay a higher tax rate than the working class? Because they don't.  And perhaps we could start there.

In 2018, Billlionaires paid a lower tax rate than the working class

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1 hour ago, siffoin said:

I don't have the answer.  But I do have a question to this which is:  Do you think Billionaires should pay a higher tax rate than the working class? Because they don't.  And perhaps we could start there.

In 2018, Billlionaires paid a lower tax rate than the working class

Answer.  IMO, something that should be implemented pronto.

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5 hours ago, siffoin said:

I don't have the answer.  But I do have a question to this which is:  Do you think Billionaires should pay a higher tax rate than the working class? Because they don't.  And perhaps we could start there.

In 2018, Billlionaires paid a lower tax rate than the working class

Cant read that since I am out of free articles, but I read some other articles and it seems they started with a desired conclusion and worked backwards. For example they did not count the EITC. They do not count child tax credits. They also counted health insurance premiums as a tax. 

 

 

Edited by parasaurolophus

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11 hours ago, parasaurolophus said:

Cant read that since I am out of free articles, but I read some other articles and it seems they started with a desired conclusion and worked backwards. For example they did not count the EITC. They do not count child tax credits. They also counted health insurance premiums as a tax. 

 

 

It's a fair argument.  The article does discuss that: 

Quote

Not all economists accept Saez and Zucman’s analysis. It is based in part on their previous work, along with French economist Thomas Piketty, on the distribution of wealth and income in American society. Other economists have generated estimates of that distribution that show smaller disparities between the nation’s haves and have-nots. Saez, Zucman and Piketty have defended their research and maintain that their methods are the most accurate.

On the question of tax burden, Jason Furman, an economics professor at Harvard University who chaired the White House Council of Economic Advisers under President Barack Obama, noted that Saez and Zucman did not include refundable tax credits, such as the earned-income tax credit (EITC), in their analysis.

The credit, which is intended to encourage low-income families to work, “is part of the tax code,” Furman said. A person who paid $1,000 in federal income taxes and then received a $1,500 credit would have a total federal tax burden of -$500, but Furman said that under Saez and Zucman’s analysis, that person would instead show a burden of $0. That result would make total tax burdens at the lower end of the income spectrum appear higher than they are.

“The best estimates indicate that the tax system is progressive — with the rich paying a higher tax rate than everyone else,” Furman said.

Zucman countered that his and Saez’s analysis considers the EITC and other credits like it as transfers of income, akin to food stamps or jobless benefits, rather than tax provisions.

“If you start counting some transfers as negative taxes, it is not clear where to stop,” he said via email. “Do you treat the EITC as a negative tax? veterans’ benefits? medicaid? defense spending? … There’s no clear line and the results become arbitrary.”

There is general agreement among economists, however, that the tax burden of the rich has fallen considerably in recent decades.

“The rich definitely pay less in taxes than they did in the past and less than they should,” Furman said.

Sand's article from about discusses how the high earners (those making more than $10m) are 5x more likely to under-report their income than those make $200k or less.  So it's possible the super rich are paying even less than my article discusses because you can't measure what's not collected or income that is under-reported.  In addition the rich have access to income and wealth protecting strategies not really available to the middle class (things like LLCs, Partnerships, Trusts, Estates, Off-Shore Tax Havens etc).

Again.  I don't have any answers.  But let's be honest and call a spade a spade.  Our tax system is designed to enhance and protect the rich more than and at the expense of the not so rich.

We're $23 Trillion in debt and we're freaking out about a wealth tax on the super rich to better balance the scale (not that them doing so will make a dent in that $23T hole).

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On ‎9‎/‎30‎/‎2019 at 1:55 PM, rustycolts said:

Maybe if we quit waging never ending war we wouldn't need a wealth tax to achieve the things we want.  According to this web site  https://www.nationalpriorities.org/cost-of/   Every hour, taxpayers in the United States are paying
$11.76 million for Military Costs of War since 2001.

This needs more love.  Imagine spending $11.76M every hour on education, infrastructure and green energy.

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38 minutes ago, siffoin said:

It's a fair argument.  The article does discuss that: 

Sand's article from about discusses how the high earners (those making more than $10m) are 5x more likely to under-report their income than those make $200k or less.  So it's possible the super rich are paying even less than my article discusses because you can't measure what's not collected or income that is under-reported.  In addition the rich have access to income and wealth protecting strategies not really available to the middle class (things like LLCs, Partnerships, Trusts, Estates, Off-Shore Tax Havens etc).

Again.  I don't have any answers.  But let's be honest and call a spade a spade.  Our tax system is designed to enhance and protect the rich more than and at the expense of the not so rich.

We're $23 Trillion in debt and we're freaking out about a wealth tax on the super rich to better balance the scale (not that them doing so will make a dent in that $23T hole).

I actually disagree with this quite a bit. A very large % of people of people don't pay any federal income tax. Now of course there are tons of other taxes, but those are done on so many different levels that it is really hard to declare that it is any kind of unifying tax system. I don't think it is fair to describe a system where a small minority of people pay the majority of the taxes as some huge plan to protect the rich. I think plenty of other policies could be argued to do that, but taxation isn't one I consider. 

I also find that this discussion is so inconsistent at so many levels. Politicians complain about businesses not paying enough in taxes. Ok sounds fair...

But...then when discussion turns to things like property taxes and payroll taxes they make sure to assign property taxes to the renters and that all payroll taxes are assigned to employees. The argument becomes that these costs just get passed on. Well are costs passed on or not? Because if they are, then taxing a business more doesn't help anybody but politicians. 

If we discuss payroll taxes it is often presented that the rich don't pay their fair share. Ok, but is that a fair talking point? Who needs social security and medicare more when they get older? The person living paycheck to paycheck or the rich guy? 

I would love it if Jeff Bezos paid more in taxes and that didn't cost me any more money and there were no unintended consequences that outweighed it. I don't know him and it is personally beneficial to me and many other people. I am selfish enough that I would absolutely vote for such a plan. 

I just don't really know how we would go about that and I absolutely do not trust our government with more money. I am not saying nothing can be done, I just don't think any proposals on the table fix anything. 

 

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22 minutes ago, parasaurolophus said:

I actually disagree with this quite a bit. A very large % of people of people don't pay any federal income tax. Now of course there are tons of other taxes, but those are done on so many different levels that it is really hard to declare that it is any kind of unifying tax system. I don't think it is fair to describe a system where a small minority of people pay the majority of the taxes as some huge plan to protect the rich. I think plenty of other policies could be argued to do that, but taxation isn't one I consider. 

I also find that this discussion is so inconsistent at so many levels. Politicians complain about businesses not paying enough in taxes. Ok sounds fair...

But...then when discussion turns to things like property taxes and payroll taxes they make sure to assign property taxes to the renters and that all payroll taxes are assigned to employees. The argument becomes that these costs just get passed on. Well are costs passed on or not? Because if they are, then taxing a business more doesn't help anybody but politicians. 

If we discuss payroll taxes it is often presented that the rich don't pay their fair share. Ok, but is that a fair talking point? Who needs social security and medicare more when they get older? The person living paycheck to paycheck or the rich guy? 

I would love it if Jeff Bezos paid more in taxes and that didn't cost me any more money and there were no unintended consequences that outweighed it. I don't know him and it is personally beneficial to me and many other people. I am selfish enough that I would absolutely vote for such a plan. 

I just don't really know how we would go about that and I absolutely do not trust our government with more money. I am not saying nothing can be done, I just don't think any proposals on the table fix anything. 

 

Dude.  I don't have ANY answers.  But I do think it fair to say the tax law for the past 2+ decades has sided to favor the rich and the benefits haven't trickled down to the benefit of everyone else. That's one reason why the top 1% have more wealth than the bottom 90% and that gap grows larger everyday.  It seemed ####ed up to me.  But like I said - I don't have the answers.  I'll stick with my statement (the tax laws are designed to specifically benefit the uber rich/corporations).  I'd love to find answers and I appreciate your opinion.

 

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1 hour ago, siffoin said:

Dude.  I don't have ANY answers.  But I do think it fair to say the tax law for the past 2+ decades has sided to favor the rich and the benefits haven't trickled down to the benefit of everyone else. That's one reason why the top 1% have more wealth than the bottom 90% and that gap grows larger everyday.  It seemed ####ed up to me.  But like I said - I don't have the answers.  I'll stick with my statement (the tax laws are designed to specifically benefit the uber rich/corporations).  I'd love to find answers and I appreciate your opinion.

 

Always happy to have your opinion as well. I would love to hear your thoughts on ideas for laws regarding the market that would do more for the little guy. 

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8 hours ago, siffoin said:

It's a fair argument.  The article does discuss that: 

Sand's article from about discusses how the high earners (those making more than $10m) are 5x more likely to under-report their income than those make $200k or less.  So it's possible the super rich are paying even less than my article discusses because you can't measure what's not collected or income that is under-reported.  In addition the rich have access to income and wealth protecting strategies not really available to the middle class (things like LLCs, Partnerships, Trusts, Estates, Off-Shore Tax Havens etc).

Again.  I don't have any answers.  But let's be honest and call a spade a spade.  Our tax system is designed to enhance and protect the rich more than and at the expense of the not so rich.

I'd disagree with most of this.  We have a very progressive system and for the most part the rich bear a massive share of the tax burden.  Most of the items you talk about aren't wealth protection strategies - after all, a small mom and pop can be an LLC.  Off shore stuff has been cracked wide open and is tax evasion, not avoidance.  Etc.

Capital gains and dividend taxation is what drives these effective rates down, in general.  We have to be real careful in jacking those rates up as we do want to encourage investment (and the majority of rich folks' money is invested in businesses).  

The only area that's complete egregious is the carried interest loophole, which allows hedge fund guys to really tap dance around paying their fair share.  It's shameful, and neither Obama nor Trump was able to get it through.  Too much money flowing into congress critters to make it stick.

 

7 hours ago, Zerp said:

This needs more love.  Imagine spending $11.76M every hour on education, infrastructure and green energy.

We're the richest country the world has ever seen because of the military, not despite it.

 

6 hours ago, siffoin said:

That's one reason why the top 1% have more wealth than the bottom 90% and that gap grows larger everyday.  

Just my unsolicited opinion, but I'd put the #1 cause, far and away, as the super low interest rates we've seen in the last decade.  The rich had/have much more access to these funds and leverage them to make money.  I don't know what to do about it, but, let's face it, rates were way too low for way too long during Obama's turn at the helm.

Edited by Sand

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13 hours ago, Sand said:

I'd disagree with most of this.  We have a very progressive system and for the most part the rich bear a massive share of the tax burden.  Most of the items you talk about aren't wealth protection strategies - after all, a small mom and pop can be an LLC.  Off shore stuff has been cracked wide open and is tax evasion, not avoidance.  Etc.

Capital gains and dividend taxation is what drives these effective rates down, in general.  We have to be real careful in jacking those rates up as we do want to encourage investment (and the majority of rich folks' money is invested in businesses).  

The only area that's complete egregious is the carried interest loophole, which allows hedge fund guys to really tap dance around paying their fair share.  It's shameful, and neither Obama nor Trump was able to get it through.  Too much money flowing into congress critters to make it stick.

 

We're the richest country the world has ever seen because of the military, not despite it.

 

Just my unsolicited opinion, but I'd put the #1 cause, far and away, as the super low interest rates we've seen in the last decade.  The rich had/have much more access to these funds and leverage them to make money.  I don't know what to do about it, but, let's face it, rates were way too low for way too long during Obama's turn at the helm.

Carried interest is just the portion of the profit on the investment that the fund managers get a share of.  So if those returns are long-term gains and they get a portion of those gains then they are taxed at that rate lower rate.  I generally don't see the giant issue with carried interest if we are giving beneficial treatment to long-term gains, etc.  

That said being said taxing long-term gains at lower rates generally is something we should try and fix.  I understand the logic of trying to encourage investment but given the huge deficits we have that have been created larger by huge recent tax cuts and growing income equality raising this tax so all income is taxed at the same level makes sense to me as I think it can help in two areas.  First, it increases revenues while not hitting the middle class very hard since most of the middle class owns stock, etc. through tax deferred investment vehicles like 401ks.  Second, the rich are most able to afford such tax increases.   Sorry if you are in the top tax bracket, you can afford to pay tax on your gains at the highest marginal rate.   If you don't want to pay the tax then don't sell and keep the money invested (which is good for the economy).

1 trillion dollar deficits are not sustainable and they need to be attacked on both revenue and expense side.  Seems to me this is a painless way to do it.    

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15 minutes ago, Redwes25 said:

Carried interest is just the portion of the profit on the investment that the fund managers get a share of.  So if those returns are long-term gains and they get a portion of those gains then they are taxed at that rate lower rate.  I generally don't see the giant issue with carried interest if we are giving beneficial treatment to long-term gains, etc.  

 

I don't want to hijack, but I don't think it's quite that simple.  My limited understanding is that the investment managers receive a disproportionate share of the investment returns to reward them for management services provided.   Basically the investment managers share of the income is greater than their share of money invested (if any).  That sounds like compensation which would be ordinary income. 

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11 minutes ago, Tom Hagen said:

I don't want to hijack, but I don't think it's quite that simple.  My limited understanding is that the investment managers receive a disproportionate share of the investment returns to reward them for management services provided.   Basically the investment managers share of the income is greater than their share of money invested (if any).  That sounds like compensation which would be ordinary income. 

You are right they usually get like 15 to 20% of the returns and they are taxed on how those returns are taxed.  So if they have a short-term gain then it is taxed at ordinary income but if long-term gain it is taxed at long-term rates.  As I said, in the rest of my post I think we just scrape the whole idea of taxing long-term capital gains and other investment income (qualified dividends) at a favorable rate and this whole issue just goes away.  

Edited by Redwes25

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There needs to be an AMT for corporations.  If they have $11 billions in earnings, there needs to be a minimum of 15% tax they pay no matter how many deductions they have.  

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