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Comment by folbec | Hacker News Reader

- They are NOT speaking of the 1% (such as medical professional or high income technical professionals)

- They are NOT speaking of the 0.1 %.

- They are speaking of the 0.01%. One person out of 10000. Not multimillionaires. 100 millionaires and billionaires.

There is a very good reason why the tax foundating speaks of the 1% and not of the 0.1% or 0.01% : it is usefull to protect billionaires.

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But when the politicians use this stuff to change the law it will most certainly be the first two (expanded far more broadly) who will be targeted.

They always say hand wavy stuff about billionaires whenever they get asked about paying for grand projects. But we’ve all seen how that works out in real life every time. I highly doubt that sort of categorization will ever carry over when it matters.

You’re being wildly optimistic if you think the first two (the top 1%) will ever be meaningfully impacted by any tax law change. There’s a reason the super rich all line up in support of “higher taxes”: they know that these policies always affect the middle class and never touch the upper class. That makes it harder for anybody else to break through from middle class to upper class, which is exactly what the (upper class) politicians are shooting for when they pretend they’re going after “the 1%”.

You’ve got it exactly backward. Taxes on the top 1% aren’t dramatically different in the US than in say Germany or the Netherlands. It’s taxes in the middle class that are dramatically lower.

> There’s a reason the super rich all line up in support of “higher taxes”

Uh, they don't all do that, so there can't be a reason that they all do. Some of them do, some of them fund tax protest groups that work to shift he tax burden further from the rich to the working class.

Billionaires pay low tax rates because capital gains is taxed at lower rates. That’s true not just in the US, but in most of Europe as well.

So what’s the point? Even confiscatory 100% taxes on billionaires wouldn’t raise much money (about $127 billion per year, compared to the multi-trillion cost of social programs on the table). And getting rid of preferential treatment of capital gains would risk departing from what’s become an international consensus.

> And getting rid of preferential treatment of capital gains would risk departing from what’s become an international consensus.

I think we need a better reason than "because everyone is doing it" here.

“A bunch of liberal democracies which compete with us economically have converged on an overall framework” is a pretty compelling reason to me.

Ah take examples from liberal democracies only if it fits your agenda. How about single payer healthcare system? Do you like that as well? It is very well established that it works well.

I assume you mean universal health care. Single payer is just one way to do it, and not the dominant one. (The Dutch model, for example, is closer to Obamacare than it is to single payer.) But yes, I do think we should have universal health care. And we should pay for it the way other liberal democracies pay for it—taxes or mandatory insurance premiums on the middle class.

1. US population: 329,663,350

2. 0.01% is 32,966 people, not 100

3. There are 585 billionaires in the US [0]

4. Billionaires make up 0.00017% of the population

[0] https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe...

A) This is implied to mean people of working age, so under 20 doesn't count.

B) The 0.01% is not all billionaires, but they are all extremely high-net-worth individuals. These are people that are not only set for life, but with proper money management and tax planning, could carry on for generations without having to do a lick of work.

regarding 2: I think they meant millionaires with more than $100,000,000.

> 100 millionaires and billionaires.

There are over 500 billionaires. My point being that OP's point comes off as an emotional argument as opposed to a data-based one.

Edit: I now understand the OP meant "100-millionairs". Even so, the math is still off. As of 2015 there were ~5000 100-millionaires and billionaires in the US[1]. That's 0.0015% of the population.

[1] https://www.forbes.com/sites/chloesorvino/2015/06/15/5000-u-...

Slow down for a second. You're misreading the language.

By "100 millionaires" he means hundred-millionaires, that is, people who have one hundred million dollars or more. By "100 millionaires and billionaires", "hundred-millionaires as well as billionaires".

By "100 millionaires and billionaires" they meant "people with $1XXM or $XB". Not a clear phrasing, though!

>it is usefull to protect billionaires

Income taxes aren't on wealth; they're on income.

Billionaires usually own most value in stock (and usually in a company they own or founded). The majority of the Forbes 400 are there due to founding a company that was found so useful to others, that the owner is worth billions.

When they sell ownership they get taxed at very high rates, and this is after their company being taxed (which is simply an income tax on owners, but called corporate tax). If they give the ownership to others (like children), they get taxed.

> Income taxes aren't on wealth; they're on income.

What about estate taxes?

Say a billionaire is holding 3,412,037 shares of SPY. 0 transactions buying or selling for the full fiscal year. Just dividends being paid out reinvesting. What taxes would this person pay?

That person is paying corporate income tax and taxes on dividends.

If you own an asset that is constantly paying taxes, you have lost that value to taxation. A stock shareholder owns a portion of the company. A stockholder loses value exactly equal to the amount of taxes the corporation paid.

This is why economists have the maxim: "companies don't pay taxes; people pay taxes." This doesn't mean companies don't pay tax; it means every dollar a company pays in tax is a dollar taken from some set of people.

Without corporate taxation, the shareholders would own a company which owns more cash. Academic literature has shown a dollar in cash at a company is worth a dollar in market cap, which is priced into stock values.

Now, depending on how dividends work, the billionaire likely also paid taxes on those, either at cap gains rates (remember, that income was also already taxed at the corporate level) or at personal income levels, depending on whether the dividends are classified as qualified dividends or non-qualified dividends.

Then, when the billionaire dies, the rest gets taxed if he/she passes it own. This rate for a billionaire is currently around 40%, and many states have an inheritance tax on top of that.

So the billionaire does and will pay significant amount of taxes over their lifetime.

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