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Comment by ObserverNeutral | Hacker News Reader

taxes aren't just a way to raise money for federal and local governments, they are also an elegant way which society has to allocate social hatred. You need a corporate tax because people hate corporations, a wealth tax is being discussed and on the horizon because people hate the wealthy...and so forth

In this case, of course there was a tax on wine in ancient Egypt in order to represent the social hatred which ensued when somebody saw a wealthy person consume a luxury item such as wine

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Public benefit, not hatred, is the primary motivation behind higher taxes on corporations and the wealthy. These taxes were at their highest in America around WWII and following - the money was used to fund the war. These taxes are at historic lows in America thanks to waves of major tax cuts for corporations and the wealthy since the 80s. Social services have been defunded in parallel. Taxes are raised for corporations and the wealthy because people who push for those raises want to live in a fairer society where everybody's right to a decent life is more important than a handful of people and corporations' right to hoard far more private property and power than they have any use for. Extreme inequality destabilizes societies and progressive taxes are a lever for the government to use to try and prevent that. Europe was at its historically highest level of inequality just before the outbreak of WWI. Everyone who enjoys living in a relatively stable society should have an interest in preventing extreme inequality.

> Public benefit, not hatred, is the primary motivation behind higher taxes on corporations and the wealthy

All taxes are essentially a re-do or a refund at the socieatal level

Corporations sell a product or a service, citizens see such product/service and think they might use it to improve their lives.

Then they decide to exchange some social status (represented by their net worth in USD) for the quality of life provided by that product or service.

Then they collectively realize that everybody had the same idea and that the corporation and its owners accumulated so much social status in the form of net worth flowing out of citizens and into the corporation/owners coffins.

Now they want all want a re-do/refund even though they voluntarily agreed to exchange part of their social status for quality of life and the corporation delivered on that.

What pushes people to claim a refund is :

1) They regret that everybody had the same idea as themselves and that they contributed to socially elevate that person so much

2) Hedonistic treadmill kicks in so the quality of life provided by that product/service doesn't feel as good as the first day you used it...so you are now even more regretful that you purchased it.

Witnessing the social elevation of somebody other than self (and having contributed to such social elevation) plus the hedonistic treadmill which makes the product/service not feel like something that is so special anymore compels people to come together and claim a refund in the form of taxation against those who were socially elevated

Instead of looking at tax rates, look at how much the government actually collected as a % of GDP. It's fairly flat.

Taxes seem more of a form of "societal sculpture" in our day, as there are carve-outs to enhance this virtue or punish that vice.

Blows my mind how we can have truly great software architecture like, e.g. Netflix, and a tax system that remains a Byzantine trainwreck.

Or, as Jonah Goldberg notes: "Complexity is a subsidy."

That doesn't even make sense. Why would you "need" taxes to "represent" social hatred?

To avoid violent fighting. People hate those who are doing better than themselves and thus they come together to bring those anomalies down.

Back in the days it was all done violently, nowadays it's done subtly via taxation

This is an extraordinarily bad take.

In the US we tax the marginal middle class dollar of income about 3x higher than we do a marginal dollar of investment income. Do we hate the middle class more than wall street? We tax canadian steel more than chinese PCBs. Do we hate the Canadians more than the Chinese?

More broadly, this would seek to interpret the lowest-tax anarchies as the most tolerant and loving societies and the highest-tax liberal democracies as most hate-filled, which seems equally suspect.

Your point applies to sin taxes. And... basically nothing else. In general tax policy works by starting reasonably fair and then loosening the screws on whichever demographic lobbies the best. So in fact corporate taxes are lower than personal taxes and VATs almost everywhere, etc...

> In the US we tax the marginal middle class dollar of income about 3x higher than we do a marginal dollar of investment income.

Marginal income middle class tax rate [0]: 22%, some at 24%

Marginal capital gains rate for a fairly generous set of assumptions that benefit your argument: 15%.

24% is 60% higher, not 300% higher, than 15%. That's more or less taking the best-case for your argument. Add FICA contributions (which earn credits towards your own Social Security payouts, so it's unclear exactly how to allocate this in current costs) and it's still way less than 200% higher, let alone 300%.

Lots of investment income is taxed at 23.8% (20% + 3.8% surtax). 24% is 0.8% higher than 23.8%, not 300% higher.

[0] - I took the first hit I could find: Pew Research defines middle class as 2/3 to 2x the median income, $40K to $120K in 2018.

The parent has a fair point though: why would capital gains ever be taxes at a rate different from income?

An attempt incentivize desirable behavior - long-term investment.

If you invest short term it taxes like income.

...you're right. I was figuring a marginal tax rate of about 40% and dividing by 15%, then rounding up. In practice the number is closer to 2x, as you said.

Why does that change the analysis?

If the magnitude of the difference doesn't change the analysis, why mention it in the first place?

"Income tax is significantly higher than capital gains, and that clearly contradicts the contention that we preferentially tax things we hate."

Do you actually disagree with that statement? If the essence of the argument doesn't change, why argue with numbers in the first place?

The second half of that statement is purely argumentative and as stated can neither be falsified nor proven true.

The first half of the statement is also not obviously true to me, given the large amount of wage income that is federally marginally taxed at 22 or 24% and the large amount of long-term capital gains that are taxed at 23.8%.

Is some wage income taxed higher than some investment income? Obviously, yes. Is that done specifically to disincentivize work? I don’t think so. Are long-term capital gains and qualified dividends taxed lower in order to incentivize long-term investing? I think so. Do we conclude from that that politicians hate workers more than investors? Exploring that requires looking at facts not yet in evidence here.

> The second half of that statement is purely argumentative and as stated can neither be falsified nor proven true.

OMG. I was paraphrasing YOUR COMMENT! Precisely because it's irrefutable nonsense.

[And the fact that you came back after nine hours to edit your comment to make it look like you had more to say is just... <chef's kiss>]

The edit window for comments on HN is 2 hours, so I most certainly and provably did not do the thing you have accused me of doing.

> More broadly, this would seek to interpret the lowest-tax anarchies as the most tolerant and loving societies and the highest-tax liberal democracies as most hate-filled, which seems equally suspect.

The level of hate towards the elites and those who are doing better than the mean is the same, anarchies solely express such hatred with violence and violent repossession of the stuff and the status accumulated by the "elites".

liberal democracies etc. do it annually, subtly via taxation.

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