A Message from the Billionaire’s Club: Tax Us
nytimes.com
nytimes.com
What I see here is a small minority of wealthy people who are already invested in the social politics of being a wealthy progressive but are not putting the money where the mouth is. Are there wealthy progressives putting a Koch brothers strategy on their political goals? Why or why not?
[1] https://www.illinoispolicy.org/toilet-scam-could-flush-pritz...
Contrary to popular opinion, money doesn't automatically buy votes. Tax is a popular issue. This isn't like changing some minor regulation nobody has ever heard about. You can't bury the changes being advocated. And all the money in the world won't buy off every Grover Norquist from primarying Republicans who dare to raise taxes, however narrowly constrained.
This PR expands the Overton window around new tax rates at higher tiers, and that's good. It also helps defang the Grover Norquists by undermining their popular support.
The reason why we have such strong anti-tax now can be partially attributed to a highly successful creating of one's own audience through careful information feeding, powered by wealth, through multiple channels. Therefore, I don't see reason why the progressive wealthy cannot do the same manipulative tactics for their own purposes.
Would that increase or decrease the amount of taxes?
The fact that I can't even answer that simple question troubles me.
It shouldn't trouble you. Consider "if you have money coming in." What's "money coming in?" You could tax money transfers, but then my sending $10 from BofA to Citi would invoke a tax. Okay, so if the person on both accounts is the same no tax. Fine. What if some sends $10 from a sole account to a joint account? What if it's from a natural person to their single-member LLC? Et cetera, et cetera.
Broadly speaking, federal income taxes take down about 10% of GDP and payroll taxes a further 6% [1].
[1] https://en.wikipedia.org/wiki/Income_tax_in_the_United_State...
Well, we don't (AFAIK) know the total amount of non-GDP transfers of wealth that occur. If you limit taxed transactions to just the transactions that show up in GDP, then it's equivalent to asking what the current tax-to-GDP ratio is, which is easy to look up (it's much higher than 10%.)
It is similar to the message that "Adam Smith's capitalism" = "no regulations" when in fact Adam Smith was not against regulations. Regulations are the structure that markets are built upon. Otherwise, everything is caveat emptor (translation: let the buyer beware) all the time.
It is hard to know where the correct line between total freedom and total government control lies, but I have to assume it is somewhere closer to the middle than either extreme, but the middle never makes the evening news.
I think most Americans' experience with government is bad. Especially with taxes--they won't even tell you what you owe them. Often the electronic systems are just broken (Illinois' form a couple years back required a driver's license to submit payment, but the field only accepted 8 digits while IL DL numbers are 12 digits long). I personally don't have a problem with tax or government if there's a sane value proposition.
Safe water, safe food, safe(ish) drugs, roads, less air pollution, the mail, airplanes that fly safely, cars that are safe, fuel efficiency in cars, and thousands of other things are all generally good interactions with government that most people don’t attribute to government.
Yes, going to the DMV sucks. Doing your taxes is annoying. Thats about all most people think about when they say the government is bad.
I don't have these experiences when I deal with the private sector, and those dealings are also quite a lot cheaper than with the public sector.
This isn't to say that privatization is the answer or the only answer; I've had really good experiences with the governments of other countries and even in the US, value varies across agencies.
You are aware that much of what you just described, road construction, government websites, and many forms of traffic enforcement, is handled by private sector contractors?
Governments mostly just insist that good results happen, and can easily cause problems doing even that. Meanwhile other things run directly by governments do have a long track record of being worse than the private sector equivalents, and taxpayer interactions is clearly an important component of that.
Before the US federal government forced companies to act the country's polluted rivers caught fire repeated. The pollution that caused those rivers to catch fire didn't stop because of those companies' own will or because of the market's influence. The government needed to intervene, otherwise the pollution and fires would have continued.
> Governments mostly just insist that good results happen, and can easily cause problems doing even that. Meanwhile other things run directly by governments do have a long track record of being worse than the private sector equivalents, and taxpayer interactions is clearly an important component of that.
This is political dogma and not fact.
Services provided by governments optimize for vastly different outcomes than the private sector. It also seems that many people harshly judge government services while they ignore real problem that occur when those services are privatized.
I'm not the parent but I started this subthread. I didn't bring this topic up to advocate for privatization; I brought it up to note that advocates for more/bigger government might enjoy more political support if they focused on improving government ROI. Lots of countries have competent governments; I'm certainly sympathetic to those who think we should improve the efficiency of our government before we raise taxes.
Most of the value in government is setting standards so that society is more fair to those that have been ignored in the past. It struck me as odd in how they phrased this sentence. Now, I have to admit that the person that wrote the copy for this page has some kind of fetish for sharing building footprint measurements, but not height. So, I don't think copy editing is high on their list of skills.
The federal government was actually designed to be pretty inefficient in order to keep it small and out of people's hair. Government wasn't supposed to be good at making roads. It was supposed to be good at saying how wide those interstate highway lanes should be.
Don't even get me started on federal contract law and the FAR. I think it says somewhere around page 1312 in the FAR that government contracting should be as efficient as possible.
[0] https://www.bristoltn.org/202/Haynesfield-Aquatic-Center
Does it even reach that level?
Buyer implies contract -> contract law -> rule of law -> government.
And caveat emptor is a legal concept which again reinforces the above.
What's the Latin for 'Trade and hope the other guy doesn't have a bigger weapon'?
Or the Roosevelt quote.
Anyway, killing traders or customers is a good way to get out of business. (Only if there's enough "suckers" or your product is irreplaceable can you ever consider it. Such as with certain drugs.)
If the ultrarich want to be taxed, they are free to make a donation to the treasury any time. But they don't. Really makes you think.
Edit: consider the pirate game https://en.wikipedia.org/wiki/Pirate_game
It's quite possible for someone to believe that things would be better if they and everyone like themselves were taxed more, but that things would not be better if only a few of them paid more, and so it is quite sensible for them to push for more taxes on their group but not to donate absent such a tax increase.
Exactly this. They can talk all they want. Until I see them actually donating money to this:
https://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm
I'll agree with the cynic in you as well.
The letter came together in the last two weeks. Eighteen individuals, spread among 11 families, added their names. All are active in progressive research and political organizations, some of which are pointedly focused on the swelling gap between the richest Americans and everyone else.
That does sound quite like what you're suggesting, doesn't it?
"Some of" the 18 individuals means it's unlikely to be a majority (if it was a majority, the NYT would be motivated to use that stronger claim to its benefit).
Overall, IMO the claim is so vague, and so without solid, verifiable facts, that it is effectively a smokescreen of pretending-to-be-an-activist.
Most of those people spend a lot of money on philanthropy and progressive causes.
I trying to minimise my supermarket spend, that doesn't mean I would be averse to higher welfare standards, and other things that would push that spend up.
Plus I don't think I should have the right to decide what tax I should voluntarily pay, that's a decision for society to make, so I think its reasonable for a rich person to feel the same.
Why do things to minimise your taxes if you don't mind paying more and see it as a benefit to society?
Second, its a bit abstract, there isn't 'a cause', it's taxes, I don't like paying taxes, just like I don't like going to the dentist, but it needs to be done so I do it. The dentist says come back in 6 months, so I come back in 6 months. I trust that people who know about dentistry than I have reached the decision on 6 months for good reasons, and if more data comes to light, I would support them updating those recommendations, but I wouldn't voluntarily visit every 3 months, without that recommendation
Taxes directly pay for services seen or unseen. Not seeing garbage in the streets or having running water are examples. What kind of services do you use? Would you like to see more services or pay less taxes?
The proposal by the billionaire to tax themselves more becomes an efficient and pragmatic tactics when considered as closing up the path for the next batch of wannabe-billionaires.
I guess you can argue that they're WAY above $X and this is a way to prevent people who reach $X from climbing, but let's be honest the system is mostly rigged that way as it is.
Just goes to show how much of a pseudo-science economics is, which more often than not is co-opted by all kinds of different ideologies to push their agenda (more so macro Econ than micro)
For a long time, political economy was synonymous with economics. Once a broad political consensus was reached, however, politics was dropped to emphasize the economics based on that consensus.
Seems to me that no matter which political party the poor voted for, their economic agenda was always thwart by corporations need for cheap labor in countries near and far.
I vaguely remembering President Obama giving a rather technical explanation why nothing can be done to bring back the job for a laid off Midwesterner.
As for the Republicans, this new Yorker political cartoon[1] says it all: I am going to eat you. He tells it like it is.
And the one constant is that the college of economics (and business in general, but they don't claim to be a science) will have a definite political slant depending on who the most major donor is. And I feel that I need to clarify - not the faculty. Faculty in every department tend to wear their politics on their sleeves. I mean the classes and content has a definite political slant.
It's disgusting. When people talk about how higher education is nothing but an indoctrination for the youth into whatever liberal value is currently the most hated thing among conservatives, they really hit the nail on the head for the colleges of economics. But they tend to lean hard right, instead of left.
Not only this but the IRS allows you to over pay if you want to. If you really WANT to pay more in taxes you can! Just cut them a check, why would you rather have someone point a gun to your head before you give them a check?
I hear this mantra time often - sometimes in relation to charity, sometimes in the context of climate change action ('if it bothers you, why not just cycle to work?'. )
There is a big difference between an individual saying "here have some of my cash" and an individual saying "I think people like me should pay more tax".
First, there's there question of effectiveness: A donation by one individual isn't going to solve society's ills, much better to have a plurality of people making smaller contributions.
Then there's the human feeling as to what is 'fair'. Is it really fair that I solely tackle the burden of solving an ill while others in a similar position to me leach off my good will?'.
For this reasons and others people are more likely to say 'we should all pay more' rather than just saying 'take a pile of my cash''.
Yeah, one relies upon the threat of violence, the other one doesn't. I prefer minimizing the violent threats.
>First, there's there question of effectiveness: A donation by one individual isn't going to solve society's ills, much better to have a plurality of people making smaller contributions.
What specific "ill" are you trying to solve? Eliminate the national debt? Free college for all? Because taxing the wealthiest 1% at 100% isn't going to be enough. And if you can't specifically identify "society's ills" and an dollar amount needed to correct said "ills", then why should anyone be willing to contribute a dime? How about drone strikes in Yemen? Is that "solving society's ills"? I don't get to specify what programs my tax dollars fund, and I find it naive to think that taxes "help people", they certainly aren't helping the people in Yemen.
>Then there's the human feeling as to what is 'fair'. Is it really fair that I solely tackle the burden of solving an ill while others in a similar position to me leach off my good will?'.
Is it really good will at all if someone puts a gun to your head? If you really care and want help someone do you really give a rat's ass what other people are doing? Do you donate blood and then think "Why didn't that asshole over there donate their blood? Why is it on ME to donate blood! That's it!! I've had it, if they aren't going to donate then neither will I!".
>For this reasons and others people are more likely to say 'we should all pay more' rather than just saying 'take a pile of my cash''.
Maybe others will follow suit if they lead by example. Maybe the billionaire's who want to pay more taxes should just cut a check to the IRS and persuade their billionaire friends to do the same, rather than threatening them with violence.
I'm similarly sick of this tedious "threat of violence" trope. Any action decided collectively by the community and enforced is a threat of violence, yes?
Regulations to stop you torturing puppies? "That's bad - it's a threat of violence"
Regulations to stop you littering in national parks? "Threat of violence"
Speed limits, requirements that car manufactures meet minimum safety regulations, laws that stop chemical companies dumping in aquifers? - "threats of violence".
It's a cheap rhetorical trick and it doesn't make a case sound compelling.
People whit guns come and throw you in jail.
It isn't a "cheap rhetorical trick" it is the fucking truth.
>Regulations to stop you torturing puppies? "That's bad - it's a threat of violence"
I am not saying "never use a threat of violence". I am simply saying that if it isn't appropriate for an individual to use the threat of violence, then it isn't appropriate for the government to do so. Would I personally use violence to stop a robbery, sure, would I personally use violence to fund the arts, no.
So. Was it, for example, reasonable for governments to regulate production of CFCs to attempt to stop the growth of the ozone holes at the poles? I presume you wouldn't go out and smash the face of a person for selling a fridge. I presume therefore you would be against any kind of environmental regulation.
Are you really going to argue that you beating a fisherman for hauling in too much cod is exactly comparable to the government setting fishing quotas to avoid a species pretty much extinct?
If you really want to give more, than do. If you want to make sure you are still in top then stop..
But this is. He basicly says.. I think rich people like me should pay more. But I won't because my friends will have more than me and I will lose my status.
In general, this is to solve a coordination problem.
Imagine in the Prisoners' Dilemma (you would rather defect than cooperate, but you would rather everyone cooperate than everyone defect), you're at an equilibrium where everyone defects. If you cooperate, it just makes yourself worse off. But if you pass a law forcing everyone to cooperate, then everyone is better off.
Overpaying the IRS is a lot like cooperating in the Prisoners' Dilemma – if you're the only one who does it, it hurts you more than it helps the rest of the world (even if you wanted to help the rest of the world, it would be more efficient just to donate it directly to charity, or even start a charity yourself – which is unsurprisingly what most wealthy people actually do in that situation).
If only you donate $10m to the IRS, you might cause $5m of good in the world (50% is an example and not intended as an actual estimate of government efficiency - the math works similarly with any percentage) - you'd rather just donate it to charity. But if you raise taxes by $10m for 1000 wealthy people, the $10m you spend could cause $5000m of good in the world, making it well worth it.
This is like giving someone a bottle of water, when what they need is a well built.
A compounding factor is that billionaires are by nature, competitive. Giving away half of your net income puts you at a disadvantage against other billionaires who can use that against you. Taking away half of everybody's net income keeps the playing field level.
Maybe people don't like to be take advantage of by egotistic community members, and we also (and seen this in monkeys) we want fairness, if everyone is dodging paying taxes using some loopholes I feel cheated and an idiotic if I do not use the same loopholes.
This argument is so obvious wrong for me that I am inclined to believe is trolling.
Yep, which is why income tax is stupid. You SHOULD use all legal means to pay as little tax a possible.
A VAT tax would be the smart thing to do and would make it impossible for billion dollar corps. and billionaires to evade. That is how you fairly make sure everyone is contributing, not an income tax.
Because it's a Nash equilibrium. Government enforcement can adjust for these, which creates a more optimal outcome for society. Without enforcement, everyone will become a free rider in the long run.
The strategy is not unique to the Kochs by far, even if the intellectual have an absurd obsession with Kochs and see them as 100x more powerful then they actually are while they ignore 100s of other people who fund think tanks and policy initiatives and so on.
I’m all for billionaires paying more, but two things: the billions from billionaires don’t add much to taxes (it’d be more principle than anything), two, this is socialistic thinking on the part of the billionaires trying to coerce this on others. They don’t want to do it unless others do it.
By their logic, they would not rescue a drowning man unless there was a law requiring them to do so.
One can see the corruption of their logic with a simple example.
Paying more than you're legally required to is simply paying extra.
No, they don’t. There are no legal requirements to act in the best interest of shareholders. There are no directives to do so inside corporate charters.
Your phrasing of “act in the best interest of shareholders” is perhaps the silliest and most extreme version of the “maximize shareholder value” myth I’ve heard yet—a myth that first started being pushed by Friedman and his ilk in the 1970s, and has morphed into this common theme nobody even questions. It isn’t true. There is no such responsibility required of a corporation.
You either are missing the distinction here and conflating the corporation and its shareholders into a single entity, or you're inadvertently moving the goal posts. There is no obligation or responsibility for a corporation—or its directors—to operate in the best interest of shareholders. Which is what you originally stated. Corporations—and their directors—have no such legal or chartered responsibility. Again, it sounds like you've perhaps unwittingly transformed the myth of maximizing shareholder value—a fiction created in the 1970s that has zero legal or chartered basis—into this even looser, but far more extreme, version of a corporate responsibility to act in the best interest of shareholders.
As you're the one who advanced an argument against disengaging from tax avoidance based on the incorrect assertion that a corporation is obligated to act in the best interest of its shareholders, I'm not sure how to respond to your final question. If you accept that a corporation is not, neither by law nor by charter, obligated to act in the best interest of its shareholders, then what is your argument about paying or avoiding taxes? There is no legal obligation for directors to find every opportunity, creative method, and loophole to avoid paying corporate taxes. The directors of a corporation could absolutely, as the parent commenter suggested, "disengage from tax avoidance schemes". Nothing prohibits them from doing so. So ... what is your argument?
It isn't in the best interest of the corporation to unnecessarily give more money to the IRS than what they explicitly require. I don't understand how this distinction between shareholders and corporation comes into play at all.
Agreed.
> (which is as far as I'm concerned equivalent to the best interest of the shareholders with respect to the corporation...)
That's both an exceedingly simplistic mental model and quite a difficult-to-prove assumption of equivalent interests. Surely you can think of some very simple counterexamples where the corporate interests and shareholder interests frequently do not align.
Take the vast majority of Apple's history, for example—under Steve Jobs, Apple's purpose was to delight customers first, and leave benefits to other stakeholders, including shareholders, as a byproduct of achieving that purpose. From 1995-2012, Apple paid no dividends to shareholders. Sure, its stock went up, and shareholders who sold stock bought at earlier low per-share prices realized a return. But there's pretty much no question that for 17 years, Apple's interests—as understood and pursued by Jobs—did not align very well with shareholder interests. Jobs certainly never made decisions based on what was in the shareholders' best interests.
Or consider investments into R&D, which frequently are not in the best interests of the average shareholder—who often do not retain their shares over long enough periods of time where R&D investments (which are in the company's best interest) might actually align with shareholder interests (where massive capital expenditures are not, instead, returned as dividends).
Moreover, there are companies whose directors or owners might think their social and environmental responsibilities trump those of shareholders looking to make a buck. They may run a company in a way that feels responsible to them and in the company's best interest, while shareholders may vehemently disagree with those decisions.
In short, shareholders are responsible for looking out for their own interests. The companies they invest in are not, and cannot, focus[ed] on the shareholders' best interest. It really seems like you've somehow conflated a corporation into some kind of entity that is more like a democratically elected representative government whose job it is to represent and realize the interests of the electorate. That's simply the wrong mental model to have about corporations.
Have you spent much time studying the kinds of companies that are out there who make their shareholders' interests their primary motivation and concern? They are almost universally focused on meeting short-term demands and expectations. They often do not ever seem to follow any kind of long-term vision that leads to Big Things™ ... instead, they try to squeeze every last extra bit of dollar value out of the corporation to return it to stakeholders. Bluntly put, few of those companies are loved by their customers. And there are more people than Steve Jobs who believe a corporation's responsibilities ought to be focused on their customers over shareholders.
> It isn't in the best interest of the corporation to unnecessarily give more money to the IRS than what they explicitly require.
Says who? shawnz on HN? You may hold that opinion, but that carries with it quite a lot of assumptions and ideological baggage, which seems to mostly center upon the notion that a corporation's best interest is to capture and retain as many dollars as it can, society be damned. I'll agree that the last few decades of corporate activity in the US increasingly reflects such a perspective to a worrisome degree. But that's just a matter of perspective. There's zero legal obligation to take advantage of the market the government takes great pains and expense to define, protect, and advance and then avoid paying as much tax as you can get away with. Sure, there are all kinds of deductions and loopholes out there to make billions and pay $0 in taxes if you want it. But nobody is making corporations do that. You seem to believe there is some kind of definitive corporate best interest. There is not. They're a legal vehicle for engaging in commerce in concert with others, while enjoying the legal protections built into the market and held there by faith in the government to do its job continuing to advance and protect the interests of commerce. It's not crazy to imagine that a corporation's best interests can also include paying a reasonable share of taxes without a bunch of avoidance schemes. For example, stop taking certain deductions. Or perhaps refuse to park money in a foreign tax haven just because you can. It isn't unreasonable to expect a corporation consider social and environmental responsibility part of its best interests, instead of an annoying cost to avoid no matter what.
> I don't understand how this distinction between shareholders and corporation comes into play at all.
The distinction comes into play because, again, you argued "Corporations have a responsibility to act in the best interest of the shareholders, which includes not unnecessarily choosing to pay more taxes than you need to." Your argument about that responsibility was wrong. I wasn't actually trying to engage the tax question at first (though now I obviously am addressing it further to some extent). I am, however, primarily interested in helping you correct and update an invalid mental model about corporate responsibility to shareholders. Which is why I asked you—if you accept there is no such corporate responsibility to shareholders "best interests", then what's the argument for why a corporation is obligated to engage in as many tax avoidance schemes as they possibly and legally can so as to not pay one penny more than they could by engaging in all such schemes?
* Bezos enjoys the money he rightfully earned.
* His heirs are still rich - just not mega billionaires.
* The US gets an effective wealth tax.
* Bezos is incentivized to spend the money, much of it I'm sure charitably.
It seems like the fairest way to do things. Yes, there are tradeoffs like everything else. It would force private family-owned companies to sell. But I hate this idea of massive capital accumulation that just sits there. It's reminiscent of land ownership in medieval times. While we're at it we should change the laws about charitable foundations that force them to spend more rapidly and not create these semi-permanent structures that basically exist as Sphinxes for rich people. I'll add in one more: we should have a windfall wealth tax for all these tech billionaires.
That's not to say that they didn't get the ball rolling, or that the company would exist without them, just that the Ayn Rand moral calculus doesn't hold up to scrutiny.
Additionally, it's a good way to force capital-flight. People can just move their money to more favorable jurisdictions. Money goes to where it's most useful and least taxed.
Simply put, 90% tax on anything is going to result in a $0 tax revenue. Keep that tax reasonable and you might see some of it.
Vested equity that isn't liquid. It is technically an asset with a clear value (based off of a 409a, last round valuation, or from limited trading on private secondary markets). So founders must sell 2% each year to cover their tax bill, except that sale triggers other taxes so likely more in the 4-6% per year...
Does a VC fund have to send a statement through to LPs each year so they pay a tax bill on indirect holdings?
I could go on and on...
Our current tax code, similar to a representative democracy , isn't good, it just may be the least bad of all the options out there.
If you're going to downvote me, please explain why. I'm honestly perplexed.
On the flip side, they may have a sense of responsibility to contribute more, but no gauge of when the contribution is enough. If the government makes that decision, then they resolve themselves of making the judgement.
Because let's be honest, it's not like their living standards would be significantly damaged by paying a few more millions to the treasury.
In any case, you have to ask yourself why they're advocating for this stuff in the first place. These billionaires have international wealth. Raising the taxes fom them in the US is just going to drive capital overseas. It would make it harder for US-only business to compete with the international conglomerates if US taxes were raised.
If you want to see improvements domestically, it has little to do with income taxes. You need to raise tariffs and outlaw subsidies to businesses ("I'll give you 50B to build your new stadium in nowhere's-ville"). They'll be forced to invest domestically, pay domestic wages, pay for the infrastructure they need to support their businesses, etc.
Wanting to be taxed higher and avoiding being taxed are not mutually-exclusive.
Like wearing a helmet: I want laws to be passed to make illegal to not wear it, but since it's not illegal, I sometimes won't wear it.
I want everyone to be taxed fairly and equally, but since it's not like that, I'm going to keep as much money as I can.
The problem isn't a lack in revenue the problem is that we are spending it on the wrong stuff.
Hoarding wealth should be illegal.
In the meantime, I need as much of the money that _I earned_ as the gov't will deign to let me keep. Why? None of your damn business, that's why. I earned it, let me save or spend it as I please, without even more of gov't sticky-fingers rooting around in my damn pie.
Even if you taxed these people at 100% it’s a drop in the bucket. US federal, state, and local governments spent $7 trillion last year. (About $4 trillion federal, $3 trillion state and local.) Even a 10% annual wealth tax wouldn’t raise much—total wealth of the Forbes 400 is $2.7 trillion, so you’re looking under $300 billion per year. That’s a 5-6% increase in total taxes.
There is a proven model for taxation. Just do what Europe does! Sweden’s mythical 70% tax rate doesn’t kick in at $10,000,000 a year, or apply only to corporations. It kicks in at 1.5 times the average income, what would be under $60,000 in the US: https://taxfoundation.org/how-scandinavian-countries-pay-the.... (It’s actually 56%, not 70%, but still.) All the Scandinavian countries and most of Europe adopts the same approach. In Germany, the second highest tax rates (just 3% lower than the highest) kicks in under $70,000.
Europeans combine those income taxes with sales taxes (VAT), which average 20% in the OECD, and heavy payroll taxes. Indeed, if the US went to Spain’s tax system, tax revenue would go up $2 trillion, but income taxes would go down by a trillion.
For example, a billionaire can pay $60 million for a penthouse in Manhatten. However, most of that is getting ahead of the queue of people who want to live in Manhatten - if you liberated all the real resources (building labor hours, materials) that went into that penthouse, there is no way it would be sufficient to produce $60 million worth of warm meals. The best you can get is to swap a billionaire and someone else - which doesn't mean a net improvement.
The effects of a wealth tax are not going to be obvious; it is likely to cause really strange things to happen. It is not at all obvious that a wealth tax will liberate real resources for the use of ordinary people.
I'll admit to arguing against any tax, but I think the vocal activists are way overestimating how much good the money billionaires tie up in businesses does. We need real resources to be directed to creating new wealth for future consumption.
Whatever the problem is, it still isn't inequality. The only way to have an equal society is for everyone to be dirt poor.
The U.S. government has more than enough money to keep the peace, provide essential services and support people incapable of helping themselves. Cut some costs and improve efficiencies.
This type of bizarre story can only be about the United States.
A letter being published online on Monday calls for “a moderate wealth tax on the fortunes of the richest one-tenth of the richest 1 percent of Americans — on us.”
The “us” includes self-made billionaires like the financier George Soros and Chris Hughes, a Facebook co-founder, as well as heirs to dynastic riches like the filmmaker Abigail Disney and Liesel Pritzker Simmons and Ian Simmons, co-founders of the Blue Haven Initiative, an impact investment organization.
“We thought it would be a good idea,” Mr. Simmons explained by phone as he waited out a traffic jam in the Boston area. “Liesel and I decided to reach out to some other folks to see if they thought it was a good idea, too.”
The letter came together in the last two weeks. Eighteen individuals, spread among 11 families, added their names. All are active in progressive research and political organizations, some of which are pointedly focused on the swelling gap between the richest Americans and everyone else.
A recent analysis of a Federal Reserve report found that over the last three decades, the wealthiest 1 percent of Americans saw their net worth grow by $21 trillion, while the wealth of the bottom 50 percent fell by $900 billion.
The letter is addressed to all presidential contenders, and refers specifically to a plan offered by Senator Elizabeth Warren of Massachusetts. Her proposal would create a wealth tax for households with $50 million or more in assets — including stocks, bonds, yachts, cars and art. She estimates such a tax would affect 75,000 families, and raise $2.75 trillion over 10 years.
A desire to curb the rising concentration of wealth has long been part of the Democrats’ core message, but a Republican tax bill in 2017 that delivered the biggest benefits to Americans with the highest incomes reinvigorated the debate.
In recent months, Democrats including Representative Alexandria Ocasio-Cortez of New York and Senator Bernie Sanders of Vermont have offered up ambitious tax proposals targeted at wealthy taxpayers. At the same time, they have questioned whether vast family fortunes conferring outsize economic and political power are inimical to democratic values.
Surveys undertaken in the wake of those proposals showed that roughly seven out of 10 Americans supported higher taxes on the wealthiest Americans.
The swirl of attention provided an opportunity to advance the conversation around inequality, social responsibility and taxes, Mr. Hughes said.
“One thing that we collectively want to see is further research and more activism on policy design,” he added. His husband, Sean Eldridge, a founder of the progressive advocacy group Stand Up America and a former congressional candidate, also signed the letter.
The letter unequivocally declares that a wealth tax “strengthens American freedom and democracy” and “is patriotic.”
And it points out that economic researchers estimate that the richest 0.1 percent of Americans will pay 3.2 percent of their wealth in taxes this year compared with 7.2 percent paid by the bottom 99 percent. “The next dollar of new tax revenue should come from the most financially fortunate, not from middle-income and lower-income Americans,” the letter declares.
Ms. Simmons said a wealth tax could help deal with problems like the “lack of child care, educational debt, the opioid crisis and the climate crisis.”
She is part of the Pritzker family, the founders of one of the country’s largest private companies, which included the Hyatt hotel chain. Another family member, Regan Pritzker, president of the San Francisco-based Libra Foundation, also signed.
Members of the billionaire club have previously argued that they should be taxed more. In 2011, Warren E. Buffett, the founder of Berkshire Hathaway, published an essay noting that his effective tax rate was “actually a lower percentage than was paid by any of the other 20 people in our office.” His comments prompted President Barack Obama and others to push for a “Buffett rule” mandating that millionaires pay at least 30 percent of their income in taxes.
In 2014, Nick Hanauer, a Seattle-based entrepreneur, published a memo to “My Fellow Zillionaires” noting that “people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country — the 99.99 percent — is lagging far behind.”
He added: “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.”
Mr. Hanauer signed the letter published on Monday, as did Molly Munger, a lawyer whose father is Charlie Munger, vice chairman of Berkshire Hathaway. She and her husband, Stephen English, were co-founders of the Advancement Project, a civil rights organization. He also signed the letter.
Other names on the letter were Stephen M. Silberstein, co-founder of the software company Innovative Interfaces; the philanthropist and arts patron Agnes Gund and her daughter Catherine Gund, the founder and director of Aubin Pictures; Arnold S. Hiatt, chairman of the Stride Rite Charitable Foundation; Justin Rosenstein, a co-founder of Asana, which provides work-management tools; Robert S. Bowditch Jr., the founder of MB Associates, a real estate development firm, and his wife, Louise; and Mr. Soros’s son Alexander, deputy chair of the Open Society Foundations.
The final signatory was “Anonymous.”
By all accounts, there are many times more people who are not billionaires than billionaires. And in a functioning democratic republic, you would think that the billionaires would be taxed a lot more. But by now, even Joe the Plumber is thinking he will need those low low tax rates himself one day.
Look at the people in this very comment section advocating for 70% marginal rates for income above 1.5x the average income.
Not to mention that all the companies these guys own lobby against more taxes.
This is PR.
Edit: Does HN deny that people lie for their own benefit? Or do you merely disagree with my tone?
Step 2: Send in extra. Whatever they believe the rate should be. The IRS won't complain.
And perhaps give themselves a moat by making it harder for the competition or newcomers.
Great. So much for their altruism.
And, in fact, they know how this will play out:
1. Demand that “the rich” pay “their fare share”
2. “The rich” becomes anybody who earns more than basic subsistence income
3. “Their fare share” becomes whatever leaves just enough to get by
4. The actual rich create more loopholes so that only the middle 80% are actually impacted by these new tax hikes.
I just don't get it.
Here's a simple example of what I mean. The billionaires pushing this tend to have certain political ideas and tend to be active in politics. If they give just their money, then they have limited political effect. But if they can get _all_ billionaire's taxed and then lobby to use _that_ money to further their political ends (including for things those other billionaires don't agree with), they can amplify the power they have to make their pet social policies. I'm not interested in helping them do that.
That's sort of how government works. Taxes are not voluntary.
Otherwise, I'm going to assume they're publicly saying this and privately continuing to avoid taxation, because this is a cheap way to look virtuous and look like the good guys while in fact being quite confident nothing is going to happen to them.
Put another way: taxation is one cooperative solution to a prisoners' dilemma.
Charities handle it by encouraging people to make regular donations and by conducting campaigns to raise money for specific purposes.
Extra money received by the tax office might help to pay down some existing debt or some other one-off expenditure, but it cannot be used to make ongoing improvements to public services. However, I would not be surprised if they have to keep extra money aside, possibly for years, in case of a claim for a refund (or at least keep a budget line for it, which amounts to the same thing).