My question is how many people have absolutely no ties to the stock market? I'm pretty far from any definition of rich, but I still have a 401k, so you're not likely to see me rioting because the S&P 500 is in the green.
[0] https://news.gallup.com/poll/190883/half-americans-own-stock...
But that needs to be put in its proper context. Even if you have a small amount of stock or indirectly benefit from stock prices in some way, it'd be stupid if you let that mentally tie yourself to the stock market.
For instance, shortfalls in taxes do not necessarily need to be made up by "all taxpayers." With progressive taxation, they can be made up by some taxpayers (which will likely consist of most HN commentators, since software engineers are relatively wealthy).
Which is what I believe has been happening for decades. Progressive taxation can help, but I doubt the political will exists to tax capital gains.
A friendly reminder that capital gains is taxed (when it is realized).* I assume that you are actually complaining about closing loopholes that exist for avoiding paying the full rate.
* Obviously this comes with the caveat that the tax code is large with lots of "loopholes" (in quotes because they were mostly intentionally created). Capital gains losses are somehow socialized as tax deductions and the "carried interest loophole" allows certain fund managers to treat capital gains as a different class of income.
The top 20% of earners also handle close to 90% of the tax burden, while close to 50% of the population pay nothing in taxes.
...In all seriousness, the parent comment was probably referring to the Federal Income Tax.
This is precisely why a flat tax disproportionally impacts lower income people.
I think it would be interesting to try out a model where _only_ capital assets are taxed. No sales tax, no income tax, no capital gains tax.
It should dampen the effect of the rich getting richer only from rent collecting, while still making sure the market allocates capital to where it provides the most economic value (I.e can be turned into enough revenue to pay the tax in question)
I'm as liberal as they come, and that just seems ridiculous.
Edit: (I do not think of wealth in the form of art though. Imagine most wealth is tied up in capital assets$
But I suspect that from an economical efficiency perspective that division is less interesting than between revenue and assets.
Progressive taxation is aware of the exploitive nature of capitalism. Just because people are being exploited doesn't mean they don't contribute, much to the contrary.
Sales tax is almost 11% here. And I'm in a red-leaning purple state, not "Taxachusetts" or anything. Property tax on vehicles. FICA ("it's not a tax!" yeah OK, but it is really)
Can you explain how this happens? How does one "loot" one of the largest economies in the world?
The U.S. Dollar is backed by an ass whopping!
Think about it, a CEO of a big company is more likely to be in social circle of the politicians, judges and regulators.
They are more likely to be sympathetic to their immediate acquaintance who they see every week rather than those poor social economic class people who they have nothing in common with.
Add some dilllusion and descrimination in the mix, like "they are poor because they are lazy" and it becomes easy to make policies which benefit your immediate social circle.
And lot of poor people don't even have time or motivation to analyze those policies and even if someone manages to do that, they don't have enough influence to do anything about it.
Only if you only count the income taxes, and ignore other (mostly regressive) payroll, excise/sales, and other taxes at the federal and state levels.
https://theintercept.imgix.net/wp-uploads/sites/1/2019/04/ch...
* Middle-class Americans consistently pump money into the stock market generically (not information trading), raising the value of all your stocks over time.
* Now you have a gun to their head to support policies that pump up the value of your stocks even more.
* Also, when shit hits the fan, they can't easily cash out, but you can. Both on a mega-scale (recession), and individual stocks (when companies tank, you sell first, and 401k index or diversified funds take a hit).
I'm not an expert in this stuff but it smells from miles away.
You make a very interesting point!
I wonder what a "reverse 401k" program would look like (e.g. box the wealthy into aligning their actions with the interests poor/middle class while only marginally benefiting themselves).
Any attempt to recognize classes exits will lead to class war. Everyone is upper class, or waiting to join upper class, anytime now.
Pensions? Those also don't seem to work all that well.
However (thanks, Federal Reserve!), you get punished with interest rates below inflation, so people, increasingly desperate to protect their savings from inflation, put their money in risky investments (not just the stock market, also overpriced real-estate, etc).
However, you typically can borrow money from your 401k, and pay no penalty, which makes it a good option if you need temporary liquidity.
If I ever have a full year gap between jobs (like some kind of a long sabbatical), I'm going to be doing a lot of Traditional to Roth converting, for exactly this reason.