Tax the Super Rich now or face a revolution

[Agloco]

I would tend to agree.

The question then becomes who pays what?

Aye, there's the rub.

No clue here. Apparently no one else has one either.....

I see another argument being thrown around about taxing the rich, and that's the notion that over taxation would lead to eventual stagnation due to the rich cutting their spending (shopping, creating jobs, etc). I heard it somewhere but don't remember.

I'm not an economic stalwart, perhaps you can shed some light on this?

[TheSullyMonster]

No clue here. Apparently no one else has one either.....

I see another argument being thrown around about taxing the rich, and that's the notion that over taxation would lead to eventual stagnation due to the rich cutting their spending (shopping, creating jobs, etc). I heard it somewhere but don't remember.

I'm not an economic stalwart, perhaps you can shed some light on this?

But the rich don't spend nearly as high a proportion of their wealth(as taxable purchases. IE, interest on a 1mil home is still tax deductible) as the poor.

If you're netting 30k a year with two kids, you're spending every penny. If you're netting 400k a year, your home, vacation home and 3 bmw's are paid off? Proportionally, you're putting a ton less sales tax into the system. A gallon of milk still costs the same. Sure, you drive your m3 like a maniac and get 10mpg compared to the civic's 30. But you're making 12 times as much, and only putting three times as much gas tax revenue in.

Thus, regressive income taxes.

[CosmicCowboy]

Excessive taxation eventually leads to tax evasion and avoidance. It changes the dynamics of the risk/reward. At a 39% tax rate it's not worth the risk to cheat. Kick that to 90% and I seriously reconsider.

[TheSullyMonster]

Excessive taxation eventually leads to tax evasion and avoidance. It changes the dynamics of the risk/reward. At a 39% tax rate it's not worth the risk to cheat. Kick that to 90% and I seriously reconsider.

Well yeah, I doubt there is some magic number, it should be somewhat dynamic. Or rather, that mythical number isn't static. Of course, nobody knows what ideal to aim for(and then adjust with changing economic and social health).

Thus, capital gains is taxed at 15%. No need to cheat if you're really uber-rich.

Accounting and tax preparation should be considered a creative or performance art, at the highest levels.

I wonder if I can find an analysis of say, the top 1% of wealth in the US, and how much of their income is taxed at 39.6% and how much is capital gains at 15%.

edit: But come on, it's not like dollar 400,000 is going to be at 39.6 and dollar 400,000 is going to be at 90%, it'll still be regressive.

[CosmicCowboy]

The Beatles were a great example. They were making loads of money but the UK government was only letting them keep a dime of every dollar they made. They renounced UK citizenship and moved to the US.

[vy65]

Just out of curiousity - who's being targeted here? Top 10%? Top 1%? Top 0.1%?

Is it fair to lump somone (taxing them at the same rate as) at the low-end of the 10% (roughly 160k) with someone at the high end (1.13mil)? If so, why?

[coyotes_geek]

Thus, capital gains is taxed at 15%. No need to cheat if you're really uber-rich.

Accounting and tax preparation should be considered a creative or performance art, at the highest levels.

I wonder if I can find an analysis of say, the top 1% of wealth in the US, and how much of their income is taxed at 39.6% and how much is capital gains at 15%.

Not that I've run the numbers, but I would think that if you eliminated capital gains tax rates entirely and just taxed it all as normal income, you could actually drop the marginal income tax rates and still end up with more revenue. Instead of taxing salary and benefits at 39.6% and cap gains at 15%, just lump them together and tax it all at something like 30% (or whatever magic number less than 39.6% makes sense). Seems like that would go a long way towards putting those working for their money and those living off investment income on the same field.

Just an idea...........

[coyotes_geek]

Of course if I were king, we'd go to this.

tax paid = (all income - the poverty level) X (one tax rate for everybody)

[TheSullyMonster]

Just out of curiousity - who's being targeted here? Top 10%? Top 1%? Top 0.1%?

Is it fair to lump somone (taxing them at the same rate as) at the low-end of the 10% (roughly 160k) with someone at the high end (1.13mil)? If so, why?

The capital gains rate, sure. It's that way currently.

I would support more steps in the higher income levels with a regressive income tax schedule, sure.

There would be more than one step between 160k and 1.13mil.

But really, it's capital gains and investments that are the tax shelters.

[vy65]

The capital gains rate, sure. It's that way currently.

I would support more steps in the higher income levels with a regressive income tax schedule, sure.

There would be more than one step between 160k and 1.13mil.

But really, it's capital gains and investments that are the tax shelters.

I wasn't focused on the capital gains rate. That said, chances are much higher that someone who makes 160k isn't going to have as much capital gains (or losses) as someone who makes 1.13mil. But that's besides the point.

While there is a big problem with the current treatment of cap gains - I also don't see the utility in taxing someone who makes 160k at the same rate as a millionaire. We don't tax someone who makes 30k the same as we tax someone who makes 300k - so why's there a difference?

inb4 30k <<< 160k, dip , that's why we tax them differently. My point is about the rate, not aggregate amount of tax paid.

[Bartleby]

Is it fair

Here we go again . . .

[ElNono]

Can you become a famous cardiovascular surgeon by luck?

Strawman... You can be a famous cardiovascular surgeon and not be rich...

[vy65]

Here we go again . . .

This time it's different. I'm only saying that it's ed to charge someone who makes 160 the same tax rate as someone who makes 1.13mil.

::That's it and that's all.

[Wild Cobra]

I didn't mean to imply that ALL poor people have character flaws, just the ones in my family.

Understood DarrinS. Wasn't sure or not if you were extending that analogy to America at large.

How many of you that disagree with the premise that we need to encourage people to work rather than be on the welfare systems?

I agree with Darrin, but I see it in others. How many of you have talked to someone on one or more social system? Their priority is rarely finding work. They already have a security blanket. Wouldn't one way to get them off the system to be to have an actual threat that they system may kick them off?

Yes, I know. Someone will attack that idea. First realize. It is only one of several things that can be done to make the social welfare systems less appealing to live in. People need to be motivated one way or another to be self sufficient instead of relying on others.

[Wild Cobra]

Yeah, I wasn't specific enough. Proportionally to the rich, no. Having been on both sides of the fence I'm completely torn (crappy I know.....). But yes, we need the per capita tax to rise for a bit.

How do you suggest we do that. From time to time, I have looked at the revenues generated. You can only remove so much. All the data I have seen suggests that no matter what rate you tax at the federal level, they get an average of 18.3% GDP in tax revenue. raising taxes create a short term increase in revenue, but it quickly returns to that 18.3% area. Decreasing taxes produce a short term loss of revenue, but same thing. It returns to that 18.3% area.

Now think about this concept for a moment.

This is why so many people advocate tax cuts rather than tax increases. Tax cuts allow for a larger economy. Higher taxes make for a smaller economy. When the economy is more prosperous, that 18.3% is a larger number.

Sure, there are practical limits. The problem is finding the lowest rate we can tax before that 18.3% starts dripping. Zero tax would produce zero revenue, at would 100% because people would stop working.

You are obviously intelligent. I ask you to look at the history of revenues and spending in percentages of GDP. Once you see this, you will agree we need to maximize our economy and keep spending under that 18.3% level.

Start here.

What is spending under this administration? Isn't it something like 21% or 22%?

[TheSullyMonster]

I wasn't focused on the capital gains rate. That said, chances are much higher that someone who makes 160k isn't going to have as much capital gains (or losses) as someone who makes 1.13mil. But that's besides the point.

While there is a big problem with the current treatment of cap gains - I also don't see the utility in taxing someone who makes 160k at the same rate as a millionaire. We don't tax someone who makes 30k the same as we tax someone who makes 300k - so why's there a difference?

inb4 30k <<< 160k, dip , that's why we tax them differently. My point is about the rate, not aggregate amount of tax paid.

If you're just speaking philosophically, cool. If you're responding to me specifically, did you not read the 2nd and 3rd lines of my post you quoted?

[CosmicCowboy]

Eliminate the capital gains tax and you eliminate life as we know it. Real estate investments suddenly don't work financially.

Want to pay $2000 a month for a apartment? Just go ahead and vote to eliminate capital gains.

[RandomGuy]

How many of you that disagree with the premise that we need to encourage people to work rather than be on the welfare systems?

I agree with Darrin, but I see it in others. How many of you have talked to someone on one or more social system? Their priority is rarely finding work. They already have a security blanket. Wouldn't one way to get them off the system to be to have an actual threat that they system may kick them off?

Yes, I know. Someone will attack that idea. First realize. It is only one of several things that can be done to make the social welfare systems less appealing to live in. People need to be motivated one way or another to be self sufficient instead of relying on others.

1) welfare systems in this country almost universally require work from those who are able.

2) lifetime limits and other disincentives have drastically limited the amount of time people on welfare actually stay on welfare. It is FAR less than you seem to imply.

3) Based on this, I don't think you have clue one what makes most people poor in this country.

Why don't you do some research on actual poverty, with data and , and get back to us.

[RandomGuy]

Eliminate the capital gains tax and you eliminate life as we know it. Real estate investments suddenly don't work financially.

Want to pay $2000 a month for a apartment? Just go ahead and vote to eliminate capital gains.

Making capital gains equal to labor in the tax code is simply a way to be fair to the people who work, as opposed to punishing labor and unfairly rewarding capital.

[RandomGuy]

How do you suggest we do that. From time to time, I have looked at the revenues generated. You can only remove so much. All the data I have seen suggests that no matter what rate you tax at the federal level, they get an average of 18.3% GDP in tax revenue. raising taxes create a short term increase in revenue, but it quickly returns to that 18.3% area. Decreasing taxes produce a short term loss of revenue, but same thing. It returns to that 18.3% area.

Now think about this concept for a moment.

This is why so many people advocate tax cuts rather than tax increases. Tax cuts allow for a larger economy. Higher taxes make for a smaller economy. When the economy is more prosperous, that 18.3% is a larger number.

Sure, there are practical limits. The problem is finding the lowest rate we can tax before that 18.3% starts dripping. Zero tax would produce zero revenue, at would 100% because people would stop working.

You are obviously intelligent. I ask you to look at the history of revenues and spending in percentages of GDP. Once you see this, you will agree we need to maximize our economy and keep spending under that 18.3% level.

Start here.

What is spending under this administration? Isn't it something like 21% or 22%?

The laffer curve. Yes, we have heard about this mythical creature.

Reality sort of works that way, but there is no "magic" level. No one, and I do mean no one, has ever gotten a good number for the "optimal" tax rates, and it isn't for a lack of trying.

Sorry, the laffer curve is a novelty. A shiny trinket that is nice to look at, but useless for practical people.

[Wild Cobra]

Making capital gains equal to labor in the tax code is simply a way to be fair to the people who work, as opposed to punishing labor and unfairly rewarding capital.

Why not just make all income taxed at the same rate as capital gains, with no exemptions?

[Marcus Bryant]

It's time to ditch these theories and balance the budget. That means increased tax collections and reduced expenditures, both of which our politics naturally function to prevent. Tax rates are too low across the board, and an increase does not mean the advent of socialism.

Further, we need to rethink the cost of maintaining an imperial military, as well as revamping the en lement programs to where those provide a guarantee to those who need it as opposed to everyone.

[Wild Cobra]

Tax rates are too low across the board, and an increase does not mean the advent of socialism.

Sure it does.

We need to get people off the government .

As for tax rates, why then does the revenue stay around a 18.3% average of GDP, no matter what the tax rates are? i would say we are around the optimum tax rate, and we should tax less, to the point that we see we are on the low side where larger economy and 18.2% would be a larger revenue than on the other side of the peak where 18.2% of a smaller economy would be less revenue.

[Marcus Bryant]

Better yet, let them starve so their inferior genes disappear.

[Marcus Bryant]

So what's the non-'socialist' rate of taxation?