Why we should raise taxes on the rich

[lpetrich]

There is a certain problem with paying more than one's share in taxes. The Tragedy of the Commons. The problem with (say) Warren Buffett deciding to pay more is that his opponents, like Charles Koch, then laugh all the way to the bank at how much more they have relative to him.

 

[Jason Harvestdancer]

You are advocating taxation as a public policy tool. Isn't taxation supposed to be about funding the government?

If only life were so simple.

I suppose if I have sufficient wealth that I don't have to ever worry about money, except for which luxuries to purchase, then yes, your observation is correct.

Taxation, however, should reflect wealth. If you have a lot, and the government you live under is protecting that wealth, then you owe it relative to that wealth.

Well, yes. In terms of funding the government, the government can collect more from those who have more than it can from those who have less.

I'm just trying to remind people what the actual purpose of taxation is, how the rich paying more is a function of them having more, and not about other factors. If other factors occur they should be incidental at best, or at least secondary, to the actual purpose of taxation.

 

[Horatio Parker]

https://www.nytimes.com/2017/09/05/opinion/rich-getting-richer-taxes.html?ref=opinion

A great article and one of the primary reasons why I vote straight Democratic - despite the party's flaws. Since the Reagan tax cuts of the 80's we've seen incomes for the wealthy soar while gains for others have been marginal at best - and even then often as a result of having to hold down several jobs at once or finding ways to work overtime without getting paid overtime. The high marginal tax rates stopped the excessive consumption that we see now in the uber wealthy. With high marginal tax rates, there was no incentive to cut workers salaries or hours since if you, as a CEO, took more income, then it would just go to taxes. That meant more money for the masses to spend on things. Whereas the rich don't really spend their money as much - their's only so much consumption one can do.

With so much money tied up in the super wealthy our economy stagnates.

I would however state that perhaps one policy does not fit all times. High marginal rates can stifle some entrepreneurial spirit. At times a lower marginal rate may be better.

SLD

You are advocating taxation as a public policy tool. Isn't taxation supposed to be about funding the government?

The gov, since the US has a sovereign currency, could fund itself without taxes. But then the weakened imperative to acquire US currency would affect the value.

Also, without taxes there's no guarantee of sufficient goods and services for the govt to run itself. In macroeconomese, regulating aggregate demand.

Ruml's purposes of taxation:

1) as an instrument of fiscal policy to help stabilize the purchasing power of the dollar; (2) to express public policy in the distribution of wealth and of income as in the case of the progressive income and estate taxes; (3) to express public policy in subsidizing or in penalizing various industries and economic groups; and (4) to isolate and assess directly the costs of certain national benefits, such as highways and social security.

 

[dismal]

You are advocating taxation as a public policy tool. Isn't taxation supposed to be about funding the government?

If only life were so simple.

I suppose if I have sufficient wealth that I don't have to ever worry about money, except for which luxuries to purchase, then yes, your observation is correct.

Taxation, however, should reflect wealth. If you have a lot, and the government you live under is protecting that wealth, then you owe it relative to that wealth.

You seem to ignore that a lot of what the government does is not "protecting" wealth, but taking it and redistributing it.

At what income should a person at least pay for their own expected transfer payments?

I.e., contribute positively to paying for all that infrastructure that creates and protects wealth as opposed to being a net taker from the government.

Or, put another way, what percentage of people should be net takers and what percentage should be net payers?

 

[Elixir]

You seem to ignore that a lot of what the government does is not "protecting" wealth, but taking it and redistributing it.

GOP philosophy is to do that to the minimum required to quiet the rabble while the rich take advantage of legalized means of stealing as much as they can from the commons.

 

[dismal]

You seem to ignore that a lot of what the government does is not "protecting" wealth, but taking it and redistributing it.

GOP philosophy is to do that to the minimum required to quiet the rabble while the rich take advantage of legalized means of stealing as much as they can from the commons.

Yes, I saw that in their platform.

Nonetheless, there is reality. A large portion of what our government does is transfer money about.

 

[ksen]

http://truth-out.org/buzzflash/commentary/the-absurd-amount-of-entitlements-that-go-to-rich-people

And most of that transferring money about goes to the wealthy.

 

[dismal]

http://truth-out.org/buzzflash/commentary/the-absurd-amount-of-entitlements-that-go-to-rich-people

And most of that transferring money about goes to the wealthy.

Shockingly, this is wildly incorrect.

This document shows taxes and government transfers received by income quintile in Table 1.

https://www.cbo.gov/sites/default/f...016/reports/51361-householdincomefedtaxes.pdf

 

[thebeave]

There is a certain problem with paying more than one's share in taxes. The Tragedy of the Commons. The problem with (say) Warren Buffett deciding to pay more is that his opponents, like Charles Koch, then laugh all the way to the bank at how much more they have relative to him.

So? We should discourage rich people from paying more than their share in taxes because the other rich people will go "neener neener, I got more than you now"?

 

[ksen]

http://truth-out.org/buzzflash/commentary/the-absurd-amount-of-entitlements-that-go-to-rich-people

And most of that transferring money about goes to the wealthy.

Shockingly, this is wildly incorrect.

This document shows taxes and government transfers received by income quintile in Table 1.

https://www.cbo.gov/sites/default/f...016/reports/51361-householdincomefedtaxes.pdf

Hold on, it's gonna take me a minute to find a banana to compare to the orange you compared to my apple.

brb

 

[dismal]

Shockingly, this is wildly incorrect.

This document shows taxes and government transfers received by income quintile in Table 1.

https://www.cbo.gov/sites/default/f...016/reports/51361-householdincomefedtaxes.pdf

Hold on, it's gonna take me a minute to find a banana to compare to the orange you compared to my apple.

brb

Hmm, not sure if your problem is with math or reading here.

The table directly rebuts your claim "most of that transferring money about goes to the wealthy" by showing exactly how much money is transferred to each income quintile.

Do you need me to explain it to you?

Look at the row "government transfers". Is the amount in the column "highest quintile" conspicuously bigger than other quintiles?

 

[T.G.G. Moogly]

If only life were so simple.

I suppose if I have sufficient wealth that I don't have to ever worry about money, except for which luxuries to purchase, then yes, your observation is correct.

Taxation, however, should reflect wealth. If you have a lot, and the government you live under is protecting that wealth, then you owe it relative to that wealth.

You seem to ignore that a lot of what the government does is not "protecting" wealth, but taking it and redistributing it.

At what income should a person at least pay for their own expected transfer payments?

I.e., contribute positively to paying for all that infrastructure that creates and protects wealth as opposed to being a net taker from the government.

Or, put another way, what percentage of people should be net takers and what percentage should be net payers?

Not all wealth is income, and not all tax is federal tax. The simplest and most equitable arrangement is to tax based on wealth, which includes income. You will no doubt agree that the wealthy and the wealthiest pay far less in taxes relative to the wealth they control.

 

[Loren Pechtel]

You seem to ignore that a lot of what the government does is not "protecting" wealth, but taking it and redistributing it.

At what income should a person at least pay for their own expected transfer payments?

I.e., contribute positively to paying for all that infrastructure that creates and protects wealth as opposed to being a net taker from the government.

Or, put another way, what percentage of people should be net takers and what percentage should be net payers?

Not all wealth is income, and not all tax is federal tax. The simplest and most equitable arrangement is to tax based on wealth, which includes income. You will no doubt agree that the wealthy and the wealthiest pay far less in taxes relative to the wealth they control.

Wealth based taxes put a serious crimp in the growth of entrepreneur-owned businesses and they are catastrophic for not-yet-profitable startups.

 

[T.G.G. Moogly]

Not all wealth is income, and not all tax is federal tax. The simplest and most equitable arrangement is to tax based on wealth, which includes income. You will no doubt agree that the wealthy and the wealthiest pay far less in taxes relative to the wealth they control.

Wealth based taxes put a serious crimp in the growth of entrepreneur-owned businesses and they are catastrophic for not-yet-profitable startups.

That's because the tax codes as they exist today are a cobbled-together mishmash. No tax system properly legislated will do that to a business or startup anymore than it will do that to an average joe with income and a house. To do so is counterproductive. If I own most of the wealth then I am using most of the infrastructure and I should pay most of the taxes. In the U.S. that is clearly not the case.

 

[Loren Pechtel]

Wealth based taxes put a serious crimp in the growth of entrepreneur-owned businesses and they are catastrophic for not-yet-profitable startups.

That's because the tax codes as they exist today are a cobbled-together mishmash. No tax system properly legislated will do that to a business or startup anymore than it will do that to an average joe with income and a house. To do so is counterproductive. If I own most of the wealth then I am using most of the infrastructure and I should pay most of the taxes. In the U.S. that is clearly not the case.

You're not addressing my point at all. I'm showing the downside of wealth taxes.

 

[GenesisNemesis]

I've always wondered if people will "walk the walk" rather than just "talk the talk" if and when they find themselves suddenly getting a lot of money. For example, if you win the lottery, will you do as much as you can to minimize the taxes on your winnings (as smart, sensible people will do), or will you say, "Gosh, I really should pay my fair share of taxes on all this money. I'm going to write an extra big check to Uncle Sam right away!"

If you would try to minimize your taxes, then shouldn't you STFU about rich people not paying enough?

I wouldn't try to minimize if I had a shitload of money. Since I have principles, I would in fact give a lot of the money to causes I agree with. What am I going to do with all that money, sit on it? I wouldn't even want the money considering how selfish people often are and would try to exploit me because of it. That's one reason I don't play the lottery. Another reason is simply that I don't want the attention. That's more important to me than shitloads of money.

 

[T.G.G. Moogly]

That's because the tax codes as they exist today are a cobbled-together mishmash. No tax system properly legislated will do that to a business or startup anymore than it will do that to an average joe with income and a house. To do so is counterproductive. If I own most of the wealth then I am using most of the infrastructure and I should pay most of the taxes. In the U.S. that is clearly not the case.

You're not addressing my point at all. I'm showing the downside of wealth taxes.

Duh, Loren, I'm showing the downside, regressive nature of taxation in the U.S. Wealth taxation needn't be any more of a burden than that bit of wealth taxation we call income. Every piece of that wealth, just like income, can be itemized and taxed accordingly. If you do not tax wealth than you force the costs onto those with less wealth. Maybe you prefer that. I certainly do not. Taxation does not destroy wealth as you seem to be implying.

From my perspective where we all pay property taxes, your defense of wealth taxation would mean I pay more on my modest home than does the owner with ten times the house and property just blocks away? Why? Because taxing wealth - our homes - somehow destroys us. It does not. Make that house a business, same thing. Wealth taxation is what we do but because the wealthy write the tax codes the less wealthy get screwed.

 

[Loren Pechtel]

You're not addressing my point at all. I'm showing the downside of wealth taxes.

Duh, Loren, I'm showing the downside, regressive nature of taxation in the U.S. Wealth taxation needn't be any more of a burden than that bit of wealth taxation we call income. Every piece of that wealth, just like income, can be itemized and taxed accordingly. If you do not tax wealth than you force the costs onto those with less wealth. Maybe you prefer that. I certainly do not. Taxation does not destroy wealth as you seem to be implying.

From my perspective where we all pay property taxes, your defense of wealth taxation would mean I pay more on my modest home than does the owner with ten times the house and property just blocks away? Why? Because taxing wealth - our homes - somehow destroys us. It does not. Make that house a business, same thing. Wealth taxation is what we do but because the wealthy write the tax codes the less wealthy get screwed.

You're not addressing the cases I mentioned--situations where you have wealth but not income.

 

[Elixir]

Duh, Loren, I'm showing the downside, regressive nature of taxation in the U.S. Wealth taxation needn't be any more of a burden than that bit of wealth taxation we call income. Every piece of that wealth, just like income, can be itemized and taxed accordingly. If you do not tax wealth than you force the costs onto those with less wealth. Maybe you prefer that. I certainly do not. Taxation does not destroy wealth as you seem to be implying.

From my perspective where we all pay property taxes, your defense of wealth taxation would mean I pay more on my modest home than does the owner with ten times the house and property just blocks away? Why? Because taxing wealth - our homes - somehow destroys us. It does not. Make that house a business, same thing. Wealth taxation is what we do but because the wealthy write the tax codes the less wealthy get screwed.

You're not addressing the cases I mentioned--situations where you have wealth but not income.

Like a wad of c-notes stuffed under a mattress?
Real properties are taxed, and I think stocks should be taxed similarly. I have to pay tax on my home even if it is worth less than last year and no income is realized on it. Why should stocks be any different? Because the wealthy put their money there, that's why.

 

[Loren Pechtel]

You're not addressing the cases I mentioned--situations where you have wealth but not income.

Like a wad of c-notes stuffed under a mattress?
Real properties are taxed, and I think stocks should be taxed similarly. I have to pay tax on my home even if it is worth less than last year and no income is realized on it. Why should stocks be any different? Because the wealthy put their money there, that's why.

I'm not talking about stocks. The problem comes from startup and early-growth-phase businesses. Everything they've got is going into the company. Those are the ones screwed by wealth taxes.