Multivariate analysis indicates that economic elites and organized groups representing business interests have substantial independent impacts on U.S. government policy, while average citizens and mass-based interest groups have little or no independent influence
It wasn't always like this.
[1] https://www.cambridge.org/core/journals/perspectives-on-poli...
It probably was bound to happen after extending the vote to all persons.
Regarding "if you are paying any income tax on income that you haven't yet spent, you're not doing it right"
I'm doubtful of this - if you live off capital, and you have no dividend paying stocks or bonds, isn't that unnecessarily risky? It seems like some assumptions are likely to be made, where you pre-plan your income according to your expected expenses, as opposed to selling shares of stock whenever you need money. Also, dividends or interest payments inherently provide a barometer of whether you're living beyond your means, assuming you're wealthy enough to live off of them.
IMO the correct threshold is "earns more than needed over some longish period of time", which is another way of saying "has income that isn't spent". If you use that definition, everyone who spends all of their income gets that treatment, because their unspent income is zero and the tax on that is zero.
Very rich is to be able to do that for both themselves and a staff.
Also: you should broaden your economic knowledge ... it's cute that you think unspent income isn't taxed. Directly taxed ... perhaps not. Now what happens if you want to do anything with that money (different from spending it). Tens of different taxes suddenly apply.
so if you've bought a second home, it is also taxed, so not unspent , but if you put more than 25.000 on a current account with 0% interest rate, you still have to pay tax as if you have made 4% (the system changed, this is to keep it simple for non Dutch readers). In that case it at least feels like unspent income tax.
Anyway, if you're in the position you need to pay this tax, you usually have nothing to complain about financially..
This is because you could get a mortgage for up to 125% of the price of the house bought and the interest on this loan could be fully deducted from income tax.
And to worsen things, you were not obliged to pay back on a monthly basis, but after 30 years you cannot deduct interest anymore the bank can ask for their money back (in practice it is mostly no problem if you can still pay the interest)
Now you can 'only' get a loan upto 100% of the price and need to at least save up for the extra costs (bank, notary, taxes) And you have to pay back a monthly amount to be allowed to deduct the interest paid from income tax.
But saving up very large amounts, which is common in many other countries, still is not done by most people...
The idea is you are going to invest / save the money and earn interest, get dividends or profit from the stock price itself.
The old system used a virtual profit of 4% a year, and over this 30% tax needs to be paid. That's 1,2% over the amount above EUR 25.000 (per person, so 50.000 if you're together with someone)
Mind you do not have to pay tax over the real profits, and also pay if you loose.
So if you make 8% a year, you are only taxed as if you've made 4% , but if you lost 8% you're still taxed for 4%
They are changing it to a way the rate reflects the real interest rate better, and many people want the real profits to be taxed.
I personally don't, because if you're just a bit good with ETF's you're easy beat the 4%
They don't separate income vs capital gain ?
In the case of profit tax, you only pay tax once over the real profit. (And can deduct loses)
So in case you have 100.000 at the start of the year, you pay 900 tax. (1,2% of 75.000)
Now if you make 100% profit and start the next year with 200.000, you'll pay 2.100 tax. Let's say you stop here and keep this amount for 4 years on a 0% interest account, you have to pay 2.100 every year. So a total of 9.300 tax
If there would be profit tax of 30% you would pay 30.000 once. (30% on the 100.000 profit)
So if you're an active succesful investor, the Dutch system mostly is way better.
But now people are complaining it is not fair, because a savings account doesn't return 4%.
Being an investor myself I fear we will get profit tax in the future.
And there is tax on your valuable possessions on the first of January, exceeding 25.000 a person, so 50.000 if you're together, ex. your first home and substantial ownership of a company. First home is tax free. Subtantial company ownership is taxed differently.
Valuable possessions include art and cars kept only as investment (gray area), cash (exceeding a certain limit), crypto currencies, second home(s), stocks, bonds, savings.. but not the things you use in your household, such as the family car(s)..
From an actual real world level, it’s unfair that the stock market is used to decide how good the economy is when 84% of the stock market is controlled by the top 10% richest segment of the population. It’s unfair that corporations get massive tax breaks provided by local municipalities for short term political wins in the establishment of jobs that they will summarily destroy if another town comes in wit better incentives 5 or 10 years down the line living that town in ruin when they leave. It’s unfair that companies are allowed to offshore their headquarters and pay no income tax at all to their countries of origin. It’s unfair that these giant companies can control and manipulate our political system with money.
The point is it’s irrelevant how you define rich, we have real unfair realities that we can look at and address. Coming up with an arbitrary definition of rich is a distraction rooted in no reality.
This is a very naive statement, with a heavy helping of dog whistling libertarian utopian memes and philosophical navel gazing.
But the stock market swings in response to economic reports like unemployment rate. The government doesn't report unemployment based on stock prices.