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Ultra Millionaire Tax Proposal


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30 minutes ago, fatguyinalittlecoat said:

If you do this, can you figure out a way to do it in bite-sized chunks over time?  If you write some long essay then I'm going to feel like I need to write a long essay in response, which will be a bummer for me and nobody will read it anyway, if I even get around to it.  My preference would be for you to write a paragraph or two, then I respond with a paragraph or two, etc.  That seems more manageable and fun and it will encourage other people to join. 

I had envisioned my first post acknowledging the good arguments against capitalism. I.e., I'd try to make the case against capitalism as well as I can, but sticking only to arguments I believe to be valid.

If you feel like making a case for capitalism under similar constraints, that might be a fun way to begin. Subsequently, I'd make the case for capitalism and you could make the case against.

But that could lead to longish posts.

Alternatively, I could just provide a bare-bones outline of what I think are good and bad arguments for and against capitalism, and anyone who responds can select one or more points to attack or expand on. That seems like it'd fit your request better, and is probably the better way to go now that I think about it.

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Just now, Maurile Tremblay said:

Alternatively, I could just provide a bare-bones outline of what I think are good and bad arguments for and against capitalism, and anyone who responds can select one or more points to attack or expand on. That seems like it'd fit your request better, and is probably the better way to go now that I think about it.

Yeah this is probably easiest.  Any attempt to structure things more formally is doomed to failure.  Looking forward to it.

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1 hour ago, fatguyinalittlecoat said:

Seems to me like this isn't an either/or kinda thing.  I think we should be adopting many different strategies to attack both of these issues, and we should pursue them all in tandem so that if one strategy fails to address the problems in the way we want, other strategies will help too.  In my judgment a wealth tax would provide help in both areas.  Whether it's the absolute best way to accomplish either of these goals doesn't seem like the right question to ask, at least to me. 

As with consumption, expenditures of political capital involve trade-offs.

Consider poverty relief. It will require government spending. We could either (a) divert funds from other programs, (b) increase deficits, or (c) raise taxes.

Diverting funds from other programs is usually politically impossible. Let's say that macroeconomists tell us that bigger deficits are a bad idea right now. So we need to increase tax revenues.

But we have only so much political capital to expend on raising taxes.

My view is that increasing income taxes will both lead to better outcomes than enacting a wealth tax AND will require less political capital because it's less unpopular.

If I'm right about those things, I think the case for a wealth tax looks pretty bad.

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17 minutes ago, The General said:

In this case ultra wealth was described as 50 million. 

right now, the upper wage earners pay almost all the income taxes in the USA

its not enough - people want them to pay more

and when that more isn't enough then what ? 

 

understand we are approaching 30 Trillion in debt - there will NEVER be a balanced budget again, we will NEVER get that debt paid off and taxation will NEVER be spent properly and there will still be tens of millions of people who don't make a whole lot

this Robin Hood mentality doesn't work, never has worked, never will work

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11 minutes ago, Maurile Tremblay said:

As with consumption, expenditures of political capital involve trade-offs.

Consider poverty relief. It will require government spending. We could either (a) divert funds from other programs, (b) increase deficits, or (c) raise taxes.

Diverting funds from other programs is usually politically impossible. Let's say that macroeconomists tell us that bigger deficits are a bad idea right now. So we need to increase tax revenues.

But we have only so much political capital to expend on raising taxes.

My view is that increasing income taxes will both lead to better outcomes than enacting a wealth tax AND will require less political capital because it's less unpopular.

If I'm right about those things, I think the case for a wealth tax looks pretty bad.

Well, my posts have really just taken the position that "I think a wealth tax is a good idea."  Whether it is wise to expend political capital on it at this point is a different question.  I personally believe that if it  passed now the most likely outcome would be that it would be struck down by the Supreme Court, so I wouldn't be willing to invest significant political capital to get it to pass.

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33 minutes ago, Stealthycat said:

right now, the upper wage earners pay almost all the income taxes in the USA

You keep repeating this, but you are ignoring that there are lots of other taxes besides income taxes.  More to the point, the ultra-wealthy pay a far lower share of all taxes now than they have at any point over the last 70-ish years.

https://imgur.com/r/interestingas####/xhYCQh4

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1 minute ago, Rich Conway said:

You keep repeating this, but you are ignoring that there are lots of other taxes besides income taxes.  More to the point, the ultra-wealthy pay a far lower share of all taxes now than they have at any point over the last 70-ish years.

https://imgur.com/r/interestingas####/xhYCQh4

Good luck :lol:

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I actually prefer that taxes be based off of annual income. One can have considerable assets that depending on the year generate only breaks even On a given year. The only way one might be able to pay this type of wealth tax could force someone to sell some of those assets. 

Edited by lazyike
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1 minute ago, lazyike said:

I actually prefer that taxes be based off of annual income. One can have considerable assets that depending on the year generate only breaks even On a given year. The only way one might be able to pay this type of wealth tax could force someone to sell some of those assets. 

I'm not sure this is a good argument against a wealth tax.  I could be misunderstanding, but let's consider two scenarios.

1. John Doe has a ton of assets, mostly in "cash" or similarly liquid assets.  He is taxed on those assets and required to hand over N% of the cash.

2. Jane Doe has a ton of assets, mostly in illiquid assets.  She is taxed on those assets and sells some of the assets to pay the tax.

I'm not sure I see a difference in terms of benefit/harm.

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1 hour ago, Stealthycat said:

right now, the upper wage earners pay almost all the income taxes in the USA

This proposal has nothng to do with income though. It is a tax on wealth.

The idea is to balance out the fact that some ultra wealthy folks pay 750 dollars a year in income tax, while Joe Shmoe pays 10 times that

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15 minutes ago, Rich Conway said:

I'm not sure this is a good argument against a wealth tax.  I could be misunderstanding, but let's consider two scenarios.

1. John Doe has a ton of assets, mostly in "cash" or similarly liquid assets.  He is taxed on those assets and required to hand over N% of the cash.

2. Jane Doe has a ton of assets, mostly in illiquid assets.  She is taxed on those assets and sells some of the assets to pay the tax.

I'm not sure I see a difference in terms of benefit/harm.

Just thinking out loud here. It could be harmful if the assets were indivisible. ie.someone invests all their money into a piece of land (for speculation or to build something in later). Now their assets are basically their home and a large piece of land. It appreciates in value. Would they have to sell their home or land to pay for the taxes? Probably a pretty unlikely scenario, but could happen.

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22 minutes ago, Rich Conway said:

I'm not sure this is a good argument against a wealth tax.  I could be misunderstanding, but let's consider two scenarios.

1. John Doe has a ton of assets, mostly in "cash" or similarly liquid assets.  He is taxed on those assets and required to hand over N% of the cash.

2. Jane Doe has a ton of assets, mostly in illiquid assets.  She is taxed on those assets and sells some of the assets to pay the tax.

I'm not sure I see a difference in terms of benefit/harm.

Ok, not trying to be at all braggadocious and obviously I do not fall in the proposed wealth bracket here but I have experienced some years on the farm with some poor yields and poor crop prices. The current assets are grain are needed to pay off loans and family living on those years. The remainder and bulk of my assets are equipment and farm land. So would how would I  pay that wealth tax without selling equipment that I need to farm or some farmland?

Edited by lazyike
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4 minutes ago, tymarsas said:

Just thinking out loud here. It could be harmful if the assets were indivisible. ie.someone invests all their money into a piece of land (for speculation or to build something in later). Now their assets are basically their home and a large piece of land. It appreciates in value. Would they have to sell their home or land to pay for the taxes? Probably a pretty unlikely scenario, but could happen.

 

1 minute ago, lazyike said:

Ok, not trying to be at all braggadocious and obviously I do not fall in the proposed wealth bracket here but I have experienced some years on the farm with some poor yields and poor crop prices. The current assents in grain are needed to pay off loans and family living on those years. The remainder and bulk of my assets are equipment and farm land. So would how would I  pay that wealth tax without selling equipment that I need to farm or some farmland?

I guess these scenarios don't seem terribly likely to me when we're only talking about $50M+ values.  That said, perhaps there would be ways to handle such a scenario within the legislation.

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1 hour ago, fatguyinalittlecoat said:

Well, my posts have really just taken the position that "I think a wealth tax is a good idea."  Whether it is wise to expend political capital on it at this point is a different question.  I personally believe that if it  passed now the most likely outcome would be that it would be struck down by the Supreme Court, so I wouldn't be willing to invest significant political capital to get it to pass.

I think a wealth tax is a good idea compared to not having any taxes, or compared to funding the government entirely through tariffs and excise taxes (which may have been the original plan). But I think it's a bad idea to the extent that it trades off against a reasonably executed income tax or consumption tax.

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18 minutes ago, dawgtrails said:

This proposal has nothng to do with income though. It is a tax on wealth.

The idea is to balance out the fact that some ultra wealthy folks pay 750 dollars a year in income tax, while Joe Shmoe pays 10 times that

I don't think any wealthy folks legally pay only $750 (except in weird years where they realize losses). Tax evasion is another issue, but it'd probably be harder to police with a wealth tax than with an income tax.

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9 minutes ago, Rich Conway said:

 

I guess these scenarios don't seem terribly likely to me when we're only talking about $50M+ values.  That said, perhaps there would be ways to handle such a scenario within the legislation.

I can tell you that my farm operation has not had a positive cash flow a few of my years farming. Pretty sure there are some farmers in Iowa that experienced that this year.

Just another scenario that would likely happen this year for some. You own a chain of resturants/bars that are valued over 50 million. Going to be pretty tough to come up with the money for a 3% wealth tax when the party who owns this chain may even be looking at filing for bankruptcy this year even without this wealth tax.

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15 hours ago, Sand said:

Which means that nothing will get built.  This isn't a zero sum game.

(i.e. I respectfully disagree.)

If we're talking just about consumption, I think it's pretty much exactly a zero-sum game. If I consume something until it's used up, you can't also consume it (maybe with a small allowance for recycling?).

If we add production to the mix, I agree that it's not zero sum. If I consume only what I produce, my existence as a whole doesn't reduce anyone else's consumption.

But if we take my production for granted, my decision to buy and use a yacht does trade off against my ability to donate those same funds to a homeless shelter. What I do with those funds determines how certain limited resources are used: by increasing the demand for yachts, I'm causing lumber to be used, at the margin, for slightly more yacht-building and slightly less shelter-building.

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1 hour ago, Rich Conway said:
1 hour ago, lazyike said:

I actually prefer that taxes be based off of annual income. One can have considerable assets that depending on the year generate only breaks even On a given year. The only way one might be able to pay this type of wealth tax could force someone to sell some of those assets. 

Expand  

I'm not sure this is a good argument against a wealth tax. 

Right. @Sand mentioned money velocity above. From that standpoint, maybe forcing people to sell off some of their assets every year would be a good thing.

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52 minutes ago, FairWarning said:

The SS taxable ceiling is 142,800.  I think there should be no limit.

At the rate it's increasing they will get most folks soon.  They're boosting it about 5k/year at this point - in 2016 it was at 118,500.

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2 hours ago, The General said:

Medicare and Social Security seem to be pretty popular.

SNAP, welfare, children's health insurance program, medicaid, section 8 housing, pell grants, various block grants, head start.....those just off the top of my head.

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  • 3 months later...
12 minutes ago, urbanhack said:

You would think this is something most everyone could get behind.

In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.

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On 3/3/2021 at 2:29 PM, The Commish said:

SNAP, welfare, children's health insurance program, medicaid, section 8 housing, pell grants, various block grants, head start.....those just off the top of my head.

Basically the entirety of the Great Society programs.

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45 minutes ago, urbanhack said:

FYI, "wealth gain" is not a thing that's taxable under the US tax code.  For billionaires or for anybody.  The "tax rates" they're calculating in the article don't correspond to anything that exists in real life.

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7 minutes ago, IvanKaramazov said:

FYI, "wealth gain" is not a thing that's taxable under the US tax code.  For billionaires or for anybody.  The "tax rates" they're calculating in the article don't correspond to anything that exists in real life.

Very much - they're comparing tax paid to wealth, which isn't something that makes sense in our tax system.

I'd certainly love to see the details in Bezos' investment losses, etc.  This just appears to be an application of a tax writeoff that everyone has access to, though, not some special loophole only available to billionaires.

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1 minute ago, Sand said:

I'd certainly love to see the details in Bezos' investment losses, etc.  This just appears to be an application of a tax writeoff that everyone has access to, though, not some special loophole only available to billionaires.

I think you are right that these loopholes are available to everyone, it's just that practically speaking, 90% of taxpayers don't have the CPA firm looking into it, or even if they did, us regular folk don't have the kinds of investment gains/losses.

Can't we all agree that it is an incredibly dumb system that a billionaire can live a billionaire lifestyle, yet claim on their taxes that they lost money and get a tax refund?

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10 minutes ago, the moops said:

I think you are right that these loopholes are available to everyone, it's just that practically speaking, 90% of taxpayers don't have the CPA firm looking into it, or even if they did, us regular folk don't have the kinds of investment gains/losses.

Can't we all agree that it is an incredibly dumb system that a billionaire can live a billionaire lifestyle, yet claim on their taxes that they lost money and get a tax refund?

It's not a dumb system...it is a system crafted and specifically designed by the people who are benefiting from it the most. 

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28 minutes ago, the moops said:

I think you are right that these loopholes are available to everyone, it's just that practically speaking, 90% of taxpayers don't have the CPA firm looking into it, or even if they did, us regular folk don't have the kinds of investment gains/losses.

Can't we all agree that it is an incredibly dumb system that a billionaire can live a billionaire lifestyle, yet claim on their taxes that they lost money and get a tax refund?

I have no special expertise on the tax code, but people who do tell me that it's extremely difficult to write a tax code that a) doesn't bankrupt businesses that suffer losses and b) closes all possible loopholes that business-owners might exploit.  It's almost certainly much better for society to let a few rich people get off a little light than to write a tax code that extracts every possible penny from the richest people.

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42 minutes ago, the moops said:

I think you are right that these loopholes are available to everyone, it's just that practically speaking, 90% of taxpayers don't have the CPA firm looking into it, or even if they did, us regular folk don't have the kinds of investment gains/losses.

Can't we all agree that it is an incredibly dumb system that a billionaire can live a billionaire lifestyle, yet claim on their taxes that they lost money and get a tax refund?

They are available to everyone in the sense that "once you hit X, you can take advantage of this loophole", sure.  Practically, they aren't.  Never have been.  That's by design.

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10 minutes ago, IvanKaramazov said:

I have no special expertise on the tax code, but people who do tell me that it's extremely difficult to write a tax code that a) doesn't bankrupt businesses that suffer losses and b) closes all possible loopholes that business-owners might exploit.  It's almost certainly much better for society to let a few rich people get off a little light than to write a tax code that extracts every possible penny from the richest people.

Why not institute higher marginal tax rates?  I'm not talking about going from 37% to 39%, I'm talking about having 25+ brackets that make their way up to the 90% range as income increases.

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2 minutes ago, Dickies said:

Why not institute higher marginal tax rates?  I'm not talking about going from 37% to 39%, I'm talking about having 25+ brackets that make their way up to the 90% range as income increases.

That would not do anything to people like Bezos and other stock-heavy multi-billionaires.  They don't recognize the income until and unless they sell the stock.

For people like that, the optimal solution for tax purposes is probably applying mark-to-market principles (a deemed sale and repurchase transaction at the end of the calendar year) to certain high-wealth individuals (that regime currently applies to traders and dealers) to force them to recognize the stock appreciation.  That would have other problems though.

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1 hour ago, urbanhack said:

Probably one of the least suprising articles I have read.  Doesn't make a weath tax any better of an idea either.  I think increasing capital gains on incomes over 1MM and removing carried interest make sense.  Also, think the inhertinance tax threshold should be lowered.  I would suggest about $5mm.  

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1 hour ago, IvanKaramazov said:

FYI, "wealth gain" is not a thing that's taxable under the US tax code.  For billionaires or for anybody.  The "tax rates" they're calculating in the article don't correspond to anything that exists in real life.

Right, that's why the tax code needs a major overhaul in my opinion.  

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28 minutes ago, Dickies said:

Why not institute higher marginal tax rates?  I'm not talking about going from 37% to 39%, I'm talking about having 25+ brackets that make their way up to the 90% range as income increases.

You could definitely do this, but it wouldn't change the fact that the marginal tax rate on unrealized capital gains is still 0%.  We don't tax paper wealth.

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Just now, IvanKaramazov said:

You could definitely do this, but it wouldn't change the fact that the marginal tax rate on unrealized capital gains is still 0%.  We don't tax paper wealth.

I get that, but there are still years where they sell off shares and actually have taxable income.  Higher marginal tax rates would certainly modify their income taking practices as well, but it seems like a pretty simple short-term solution until we figure out how to solve the complex problem.

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1 hour ago, urbanhack said:

It's not a dumb system...it is a system crafted and specifically designed by the people who are benefiting from it the most. 

With an amazing and effective propaganda effort to get much poorer people to argue for it for them. 

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1 hour ago, IvanKaramazov said:

It's almost certainly much better for society to let a few rich people get off a little light than to write a tax code that extracts every possible penny from the richest people.

I don't think many are arguing that we extract every possible penny from the richest, but I don't see how it is better for society for these "few" ultra rich people to pay no income tax

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upwards of 30 trillion debt and this administration throwing money around like drunker sailors ...

increasing taxes on the wealthy won't make even a tiny dent in the trillions being spent on the future generations Credit Card

 

 

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2 hours ago, IvanKaramazov said:

Although if you would like to make the argument that long-time residents of LA and San Francisco should have to pay taxes on the unrealized capital gains tied to their houses, be my guest.

If you phase-in that wealth tax at around $25-50M in assets, so there aren't THAT many long-time residents of LA and San Francisco that would be hit by this.  I think the targets are are ultra-wealthy billionaire class.

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2 hours ago, Stealthycat said:

upwards of 30 trillion debt and this administration throwing money around like drunker sailors ...

increasing taxes on the wealthy won't make even a tiny dent in the trillions being spent on the future generations Credit Card

 

 

I’m old enough to remember the outrage of the Donald’s spending. OK as long as there’s a (D)?

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3 hours ago, the moops said:

I don't think many are arguing that we extract every possible penny from the richest, but I don't see how it is better for society for these "few" ultra rich people to pay no income tax

In particular when the trend if for those ultra rich to continue to amass more and more wealth while we automate away many low paying jobs.  Folks opposed to wealth tax may change their tune when their (or their kids) ability to earn wealth is severely impacted.

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