UK top marginal tax rate right now is 45%. Many people pay it: doctors, lawyers, architects, not just greedy evil bankers with their big bad bonuses.
I don't want the ultra rich to have some special mega-tax to tax them for their obscene wealth. I want their effective income to be taxed the same as all these middle class people pay. As it keeps cropping up, they pay much less, via offshore wealth, accounting tricks etc.
I don't know enough about accounting to suggest how this should be done, but to me this ought to be the objective, not some punitive tax, referring to starving children in poor countries.
The point should be to reduce what doctors and carpenters alike to what the billionaires pay to “the crown”. A 42% tax rate is obscene. A 32% tax rate too. 10% should be the target.
I have moved from a high tax society(Sweden) to a low tax society and I prefer it.
I'm not defending the tax rate. I don't like tax, would happy pay less, equally someone has to pay the bill.
My point is rather that I want the millionaires to pay the same tax, not some special different one. We already have a social contract saying what people are supposed to pay.
I make 750k a year, give or take. I think I paid 150k in taxes, more or less, last year.
I would gladly pay 600k a year in taxes if it meant healthcare, education, housing, and food were secured for all.
Let me keep 20% of my work for luxuries I like, but the fact that I'm only paying like 20% is fucking criminal while people are starving in this country.
I recognize I'm differently wired and have different values than most, but like, there has to be a line between 20% and 80% tax rate that we can live with.
I’m generally with you, though I live in CA so my effective tax rate is around 50%.
I am very troubled when people who proclaim to be liberal move here—an area with high potential—to “strike it rich”, do so, and then immediately fuck off to another state where they can sell their vested shares without paying CA tax rates. CA does try to claw back avoided taxes from the worst offenders of this, but mostly they only go after people who move out on paper but still lead lives here.
One of the biggest problems though is that bumping marginal rates doesn’t affect the ultra-rich, who use tax-avoidance schemes like loans against invested assets to live off extreme wealth with nearly zero taxable income.
Probably because CA politicians want to spend tax money on things like providing $150k of housing loans to undocumented migrants
Losing out on a house bid as an American citizen to an undocumented migrant thanks to this policy, truly the type of stuff only a CA politician could come up with.
Well you pay for this stuff, your money goes to semi-private institutions like universities (healthcare, education) instead of bouncing through taxes first. This is non-tax compulsory payments (NTCP), no?
> housing, ...
Real estate is California's #1 industry, biggest sector in San Francisco and Los Angeles, and according to everyone, community regulations and tax-adjacent policies like Prop 13 are the biggest influence on housing prices. So you kind of do pay taxes, you are obligated by law to play by the housing rules there.
> food, ...
Government subsidies are the #1 source of profits for agribusinesses. Similar to saying Tesla's main source of profit was carbon credits. Kind of a junk analysis by one interpretation, kind of central to the business by another.
Anyway my point is the average person, according to some people, pays closer to 40% like many Europeans do, when you include orthodox defined NTCP. If you think deeply about how much you are forced to pay for by law or similar mechanisms, maybe it's higher.
You live in the world you want right now. NTCPs go to regular people too. University health systems are many states #1 employers. They are socialized in a way that matters. Maybe it isn't funded through taxes but do you see how that's kind of a moot point?
I think housing should not be a commodity. Medicine and education shouldn't be run for profit. (Ideally, commodity food would be grown for the common good, too.)
But also, I'm posting here in recognition that my politics aren't exactly common here. And that's ok!
If everyone that wealthy was left with 150k, there would be no businesses, and no jobs. We'd go from a mostly employed country to a mostly unemployed country and the governing class would become the 1% overnight and the previous 1% would be part of the 99% instantly.
That's not what OP says. You're talking about an absolute $150k, that is communism (everyone gets paid the same amount). He's talking about a fair percentage of taxes, paid by everyone, regardless of their income.
This way, people that are left with little can be helped, and people that are left with a lot can still enjoy their wealth.
I think 50% is fine, but taxes should be fair, no taxing already taxed goods or assets, and the ultra rich should not have ways to avoid paying their share like they do now.
Put your excess money where your mouth is and leave coercive government out of it.
You, personally, you can provide these things for people in need.
For example, I am in a similar financial situation. My family took in a Ukrainian refugee. We house, feed, clothe, and educate this refugee to provide one individual with exactly the things you bemoan others not having.
In your and my income bracket, it takes only caring enough and the true will to do something tangible for others.
For $300K of otherwise unused income you could support 4 people. So go support 4 people. And keep your hands and your politicians' hands off my finances.
He can't do it as efficiently as an organization can as it can see the bigger picture of what is needed where. He also probably doesn't want to spend hours of his life figuring out which people to give it to. Why duplicate effort?
> You're quite free to voluntarily send all your money to the Treasury.
Taxes should be fair for everyone of course. The original question was whether billionaires should pay more, and they should. The amount of money they have allows them to dodge the amount of taxes they truly owe. This gives them an unfair advantage over the rest of us, which only increases over time.
It should be taxed differently, but the core problem is that the ultra-wealthy never realize gains. They borrow against the value and then their inheritors pay off those debts with the assets which have now had a reset tax basis.
The sanest solution is to simply preserve cost bases for inherited assets.
"healthcare, education, housing, and food were secured for all."
Ah yes all of this provided to you by Big Government, who can at a whim withdraw these services if you are found to engage in WrongThink.
We already have seen Western governments like Canada financially banning grandmothers who donated to a trucker protest or the UK imprisoning people for tweets.
Do you really want a bunch of DC politicians to have the power of life and death, not to mention access to swaths of capital that they will inevitably use to engorge and enrich themselves?
Your 600k in taxes will go into the pockets of various interest groups that markup their goods and services because they know Uncle Sam will foot the bill.
I would ultimately prefer a system of small, local, community managed democratic syndicalism. But, if I have to live in a capitalist world I'd prefer to live in one where the people in power at least try to take care of people.
Ideally, no, it would be centralized in neither the wealthy nor the government. But I think "raise taxes" is an easier path to net good than "let's seize the factories and run federations of democratically run industries in the interest of the wellbeing of all".
It's also not mutually exclusive. I can and do give away huge sums until those taxes go up.
I'm buying land and putting it into conservation, giving to community land trusts, and other ways that essentially make permanent changes towards the world I want to live in.
One person giving away their money just means they don’t have the money and society still doesn’t have, say, Medicare for all. It takes a collective effort to get the collective gains we need to see.
There's a coordination issue here. I'm astonished that so many people fail to see it. The result of one person donating $600k to charity / the treasury is completely different than ten thousand equally-wealthy people all paying $600k.
This person is saying "I will cooperate in a prisoner's dilemma, if and only if I can arrange a binding agreement by which others cooperate too", and a bunch of people are replying "then go ahead and cooperate; let the rest of us be free to defect"!
(By the way... uh... what do you do to earn $750k? As someone earning about 1/20th of that amount, I'm curious for some pointers).
I don't think people like you should pay more taxes. The problem is at the much, much higher levels. The concentration of wealth like Musk, Bezos, and others have, should simply not exist.
Here's the criteria: Your wealth level isn't enough for you to have an oversized power over society. People like Musk have and they are not elected by the people. This threatens democracy itself.
> People like Musk ... are not elected by the people.
Untrue.
Everyone who bought a Tesla voted, with their dollars, to give Musk this wealth. Everyone who owns Tesla stock voted, with their dollars, to give Tesla this wealth. And everyone who voted, with their votes, for representatives that gave EV tax breaks voted to give Musk this wealth.
The man is rich because of economic and political cause and effect. Don't pretend the world that made Musk eye-bleedingly wealthy is somehow disconnected from the world of our collective actions.
A common objection is that the rich will 'just move' to avoid taxes. However, he goes in depth in his response, pointing out that the source of the wealth can't move, you tax that at the source.
I'm a little confused on this. What is the evidence that it didn't work in the 60s/70s? My understanding is that, though we definitely had "stagflation" and other problems, none of them were caused by higher taxes at the top end.
Now, granted, I don't know that I have ever seen it put forth that they were ideal levels or anything. I just have never heard the top end tax rate blamed for that. Biggest thing I have seen it blamed on would be employer tied insurance and the like.
Wealth, especially generational wealth, is a complicated problem in many aspects.
The biggest 'challenge' is once you get to various echelons... of all places, I heard it best described on reddit; It's like the reverse of MMO mechanics; Rather than low levels giving you lots of growth and higher levels requiring a lot of 'grind', the farther you get the easier it is to make more money, even 'doing nothing'.
A -huge- factor nowadays is property values as well, which doesn't help.
----
There is also the concern of 'other ways' people get into that echelon.
I think of those who exploit labor, flount the law, and honestly in some cases (maybe they aren't the 1% but) those who use their power of 'celebrity' to get people to spend waaaaaay too much money on 'signature' goods or whatever else they endorse (Air Jordans come to mind as an example.)
It is not money in first place... Wealth is kinda imaginary, a dream that most people believe in. Whole financial system is set up so that as long as numbers keep going up there is more money appearing... Unrealized gains. Commercial real-estate and home values. All of these are wealth. Most of them still go up in value thus in "wealth".
The answer is obvious, we put up gates to prevent competition. Every industry has so much red tape and list of approved products that it is impossible. Have a new product to solve house building in a timely fashion, hopefully you have hundred of thousands to pay for certification and then wait years for some government agency to approve your product for building.
It's rather disgusting how we grid locked ourselves with regulations. There used to be thousands of ISPs, banks, grocery stores, etc and we added red tape after red tape to restrict and allowed them to be all bought by the company that did the best.
Now we got like 3 banks, 3 ISPs, and 3 grocery stores with different names.
This seems awfully confident. I mean, have you interviewed every single billionaire? I doubt it. I'm sure there's many patterns or things linking them together.
All I know is that I, and also everyone else I know, would never let themselves have a billion dollars. That money would be long gone before they reach 1 billion. Impulsively spent on whatever they think is good for other people.
Could money be an addiction, like alcohol? Where some are predispositioned to want more and more and some don't care for it?
If we're talking about US specifically, if you go back several generations, the answer would be slavery and Native american genocide (then taking their land and natural resources)
The new money is mostly from tech/oil and exploiting globalization in smart ways.
Thomas Piketty's book, "Capital in the Twenty-First Century", has a bit to say on this. It argues that historically, and increasingly so today, the return on capital exceeds the return on labour. This means wealth is a positive feedback cycle: wealth earns more wealth, at the expense of those who only have their labour. Once someone hits a net worth threshold it snowballs from there. Agree with it or not, the book is quite readable.
Maybe there's something disfunctional about an economic system that lets ordinary people set up complex product and distributions systems, and then take all the money from them forever.
There's something in Europe called VAT that addresses this.
It's important to come up with some kind of solution. When the current system reduces to a single purveyor for every product sector, which we're heading for at breakneck speed right now, there will be only a few people owning the whole shebang, and nobody to buy the products because nobody else is needed/has a job at all.
What is value-add? Selling something for more than it cost you to make it, "adding value" as measured by revenues minus costs.
What are other words for that? profit, income
What are taxes on that? income taxes.
from the point of view of the govt, the VAT is just an ordinary income tax.
but instead of being paid by the businesses, it's paid by the consumers, discouraging them from buying high margin items, encouraging them to buy low margin items.
What is nice about VAT is that you can tax different goods differently. You can have low VAT on essentials, which everyone - poor or rich - needs, but have higher tax on luxury items. In that respect, it is similar to a progressive tax, except harder to avoid - even an ultra rich who has "no income" buys stuff.
Except of course there are gaping loopholes, for example businesses are effectively exempt from VAT, also you can buy stuff abroad where VAT is lower.
VAT is essentially flat-tax. Which like all consumption tax works against those that spend higher proportion of their income on buying things necessary for living...
I’d like a discussion around hard caps well beneath the “teens on a private island” level. It seems like we could determine the curve of corrosion that the idea of increasing wealth has on the brain with a few really unkind experiments.
What's often ignored is whether or not these are Realized Gains
I wouldn't be surprised if a huge majority of that $42T wasn't realized gains (sold and attributed as a Capital Gain).
It's hugely unfair to tax non-Realized Gains ... because that would be like you having the pay Income taxes on the appreciation of your home - even though you still live in your home and haven't "realized" those gains (to pay the capital gain taxes)
The larger problem in my mind is that a lot of asset purchases bestow a lot of tax deferment privileges because of how the tax code is presently written.
Consider someone who holds a lot of capital with unrealized gains but nonetheless needs cash flow. A common practice is to borrow against those unrealized gains, which itself doesn't count as income even though it nevertheless tends to result in a greater accession of wealth.
The play, hence, seems to be that we consider the borrowing against unrealized gains to be the taxable event, not a wholesale tax on all held assets.
One idea I read on Reddit is to only let people borrow against their cost basis, rather than the gains. If you want to borrow more, you're forced to sell your stock.
Isn't that the very principle of property taxes? And it has no relation to income, it's the very possession of property (or in this case, financial assets) that triggers it.
> Oxfam described the summit as a ‘real litmus test for G20 governments’, urging them to implement an annual net wealth tax of at least eight per cent on the ultra-wealthy.
All the governments should agree and play along. As soon a few don't, the wealth will flow there. It's seems trivial, to just increase the tax from 7% to 8%, what's the big deal, just 1% more. But there is a country which for some reason thinks it can profit more from the wealthy moving their money there so they set their rate at 7.5%.
The critical part is that wealthy lobby (i.e. bribe) politicians and have enough resources to drum up support from the public via various interest groups and so on. In public they'll agree with the need for more taxes, and more environment protections, all the feel-good topics. But behind the scenes, they'll put the finger on the scale in their favor.
The imputed tax rate is misleading since it conflates unrealized capital gains--assets that have appreciated in value but have not been sold--with income. I would be cautious about imposing "cures" that may cause more problems than the current level of income inequality.
Readit News
I don't want the ultra rich to have some special mega-tax to tax them for their obscene wealth. I want their effective income to be taxed the same as all these middle class people pay. As it keeps cropping up, they pay much less, via offshore wealth, accounting tricks etc.
I don't know enough about accounting to suggest how this should be done, but to me this ought to be the objective, not some punitive tax, referring to starving children in poor countries.
(It's a bit more complicated, but this table is a baseline)
I have moved from a high tax society(Sweden) to a low tax society and I prefer it.
My point is rather that I want the millionaires to pay the same tax, not some special different one. We already have a social contract saying what people are supposed to pay.
I would gladly pay 600k a year in taxes if it meant healthcare, education, housing, and food were secured for all.
Let me keep 20% of my work for luxuries I like, but the fact that I'm only paying like 20% is fucking criminal while people are starving in this country.
I recognize I'm differently wired and have different values than most, but like, there has to be a line between 20% and 80% tax rate that we can live with.
I am very troubled when people who proclaim to be liberal move here—an area with high potential—to “strike it rich”, do so, and then immediately fuck off to another state where they can sell their vested shares without paying CA tax rates. CA does try to claw back avoided taxes from the worst offenders of this, but mostly they only go after people who move out on paper but still lead lives here.
One of the biggest problems though is that bumping marginal rates doesn’t affect the ultra-rich, who use tax-avoidance schemes like loans against invested assets to live off extreme wealth with nearly zero taxable income.
Losing out on a house bid as an American citizen to an undocumented migrant thanks to this policy, truly the type of stuff only a CA politician could come up with.
https://www.msn.com/en-us/news/politics/california-democrats...
Well you pay for this stuff, your money goes to semi-private institutions like universities (healthcare, education) instead of bouncing through taxes first. This is non-tax compulsory payments (NTCP), no?
> housing, ...
Real estate is California's #1 industry, biggest sector in San Francisco and Los Angeles, and according to everyone, community regulations and tax-adjacent policies like Prop 13 are the biggest influence on housing prices. So you kind of do pay taxes, you are obligated by law to play by the housing rules there.
> food, ...
Government subsidies are the #1 source of profits for agribusinesses. Similar to saying Tesla's main source of profit was carbon credits. Kind of a junk analysis by one interpretation, kind of central to the business by another.
Anyway my point is the average person, according to some people, pays closer to 40% like many Europeans do, when you include orthodox defined NTCP. If you think deeply about how much you are forced to pay for by law or similar mechanisms, maybe it's higher.
You live in the world you want right now. NTCPs go to regular people too. University health systems are many states #1 employers. They are socialized in a way that matters. Maybe it isn't funded through taxes but do you see how that's kind of a moot point?
But also, I'm posting here in recognition that my politics aren't exactly common here. And that's ok!
A fantastic system, just ask the Soviet Union.
You, personally, you can provide these things for people in need.
For example, I am in a similar financial situation. My family took in a Ukrainian refugee. We house, feed, clothe, and educate this refugee to provide one individual with exactly the things you bemoan others not having.
In your and my income bracket, it takes only caring enough and the true will to do something tangible for others.
For $300K of otherwise unused income you could support 4 people. So go support 4 people. And keep your hands and your politicians' hands off my finances.
Taxes should be fair for everyone of course. The original question was whether billionaires should pay more, and they should. The amount of money they have allows them to dodge the amount of taxes they truly owe. This gives them an unfair advantage over the rest of us, which only increases over time.
If some of it is assets (stock), I firmly believe that should be taxed differently than earned cash wages.
The sanest solution is to simply preserve cost bases for inherited assets.
Ah yes all of this provided to you by Big Government, who can at a whim withdraw these services if you are found to engage in WrongThink.
We already have seen Western governments like Canada financially banning grandmothers who donated to a trucker protest or the UK imprisoning people for tweets.
Do you really want a bunch of DC politicians to have the power of life and death, not to mention access to swaths of capital that they will inevitably use to engorge and enrich themselves?
Your 600k in taxes will go into the pockets of various interest groups that markup their goods and services because they know Uncle Sam will foot the bill.
Ideally, no, it would be centralized in neither the wealthy nor the government. But I think "raise taxes" is an easier path to net good than "let's seize the factories and run federations of democratically run industries in the interest of the wellbeing of all".
It's also not mutually exclusive. I can and do give away huge sums until those taxes go up.
I'm buying land and putting it into conservation, giving to community land trusts, and other ways that essentially make permanent changes towards the world I want to live in.
This person is saying "I will cooperate in a prisoner's dilemma, if and only if I can arrange a binding agreement by which others cooperate too", and a bunch of people are replying "then go ahead and cooperate; let the rest of us be free to defect"!
(By the way... uh... what do you do to earn $750k? As someone earning about 1/20th of that amount, I'm curious for some pointers).
>I would gladly pay 600k a year in taxes if it meant healthcare, education, housing, and food were secured for all.
Don't be obtuse by saying "give it away".
Here's the criteria: Your wealth level isn't enough for you to have an oversized power over society. People like Musk have and they are not elected by the people. This threatens democracy itself.
Untrue.
Everyone who bought a Tesla voted, with their dollars, to give Musk this wealth. Everyone who owns Tesla stock voted, with their dollars, to give Tesla this wealth. And everyone who voted, with their votes, for representatives that gave EV tax breaks voted to give Musk this wealth.
The man is rich because of economic and political cause and effect. Don't pretend the world that made Musk eye-bleedingly wealthy is somehow disconnected from the world of our collective actions.
Highly recommended.
https://youtu.be/jFHGiq063rA?si=N64KIhk8ezl7tEEm
https://youtu.be/t9l7AYl0jUE?si=LUU_8mUpxw0upPk4
Now, granted, I don't know that I have ever seen it put forth that they were ideal levels or anything. I just have never heard the top end tax rate blamed for that. Biggest thing I have seen it blamed on would be employer tied insurance and the like.
That is the end game of extreme inequality.
I think you can criticize wealth while having it.
Also, the unhoused have cell phones too.
There is nothing ironic unless you are living in the year 1995.
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The biggest 'challenge' is once you get to various echelons... of all places, I heard it best described on reddit; It's like the reverse of MMO mechanics; Rather than low levels giving you lots of growth and higher levels requiring a lot of 'grind', the farther you get the easier it is to make more money, even 'doing nothing'.
A -huge- factor nowadays is property values as well, which doesn't help.
----
There is also the concern of 'other ways' people get into that echelon.
I think of those who exploit labor, flount the law, and honestly in some cases (maybe they aren't the 1% but) those who use their power of 'celebrity' to get people to spend waaaaaay too much money on 'signature' goods or whatever else they endorse (Air Jordans come to mind as an example.)
It's all kinda gross to me tbh.
It's rather disgusting how we grid locked ourselves with regulations. There used to be thousands of ISPs, banks, grocery stores, etc and we added red tape after red tape to restrict and allowed them to be all bought by the company that did the best.
Now we got like 3 banks, 3 ISPs, and 3 grocery stores with different names.
All I know is that I, and also everyone else I know, would never let themselves have a billion dollars. That money would be long gone before they reach 1 billion. Impulsively spent on whatever they think is good for other people.
Could money be an addiction, like alcohol? Where some are predispositioned to want more and more and some don't care for it?
The new money is mostly from tech/oil and exploiting globalization in smart ways.
There's something in Europe called VAT that addresses this.
It's important to come up with some kind of solution. When the current system reduces to a single purveyor for every product sector, which we're heading for at breakneck speed right now, there will be only a few people owning the whole shebang, and nobody to buy the products because nobody else is needed/has a job at all.
What is value-add? Selling something for more than it cost you to make it, "adding value" as measured by revenues minus costs.
What are other words for that? profit, income
What are taxes on that? income taxes.
from the point of view of the govt, the VAT is just an ordinary income tax.
but instead of being paid by the businesses, it's paid by the consumers, discouraging them from buying high margin items, encouraging them to buy low margin items.
Except of course there are gaping loopholes, for example businesses are effectively exempt from VAT, also you can buy stuff abroad where VAT is lower.
I wouldn't be surprised if a huge majority of that $42T wasn't realized gains (sold and attributed as a Capital Gain).
It's hugely unfair to tax non-Realized Gains ... because that would be like you having the pay Income taxes on the appreciation of your home - even though you still live in your home and haven't "realized" those gains (to pay the capital gain taxes)
Consider someone who holds a lot of capital with unrealized gains but nonetheless needs cash flow. A common practice is to borrow against those unrealized gains, which itself doesn't count as income even though it nevertheless tends to result in a greater accession of wealth.
The play, hence, seems to be that we consider the borrowing against unrealized gains to be the taxable event, not a wholesale tax on all held assets.
Example
- Let's say you bough a home for $100k - Property taxes are 1% of home value
In Year 1, you owe $1k in property taxes.
Let's say (dramatically) that property values double in Year 2.
- Now, you're $100k home is worth $200k
So your property taxes in Year 2 are now $2k.
-----
With taxing your unrealized gains at the nominal Federal & State income tax bracket.
- Your Federal Income tax rate might be 30% (dependent upon your earnings) - Your State Income tax rate might be 10%
So you have a combined 40% tax rate on "earnings"
Now in that example of your home going from $100k to $200k in Unrealized gains, you'd have to cut a check for $40K!
That's huge and most people wouldn't even have that kind of cash to pay.
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All the governments should agree and play along. As soon a few don't, the wealth will flow there. It's seems trivial, to just increase the tax from 7% to 8%, what's the big deal, just 1% more. But there is a country which for some reason thinks it can profit more from the wealthy moving their money there so they set their rate at 7.5%.
The critical part is that wealthy lobby (i.e. bribe) politicians and have enough resources to drum up support from the public via various interest groups and so on. In public they'll agree with the need for more taxes, and more environment protections, all the feel-good topics. But behind the scenes, they'll put the finger on the scale in their favor.