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Comment by bb123 | Hacker News Reader

I disagree on the the thrust of the argument - that people (including comparatively wealthy individuals like doctors and lawyers) oppose changes to tackle wealth inequality because they don’t understand the gulf of wealth between them and the ultra rich. In my experience it has nothing to do with that - rather these people know that they will ultimately end up as the main target for any such law, not these billionaires. Time and time again the wealth of the middle classes ends up as collateral damage in attempts to tax the very top.

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This is absolutely it. Any taxes on just the ultra wealthy raise so little money for the rest of the population that any large scale money raising requires taxes on doctors, lawyers, engineers, small business owners, etc.

Pro-government spending advocates don’t like to emphasize this because people become a lot less supportive of these things when they see members of their own community getting hit.

I would say rhetorically that ex post facto (am i using that right? kind of like caused by definition) taxes on the ultra wealthy that don't achieve that aren't actually taxes that target the ultra wealthy, but rather just marketing.

I think Biden has tried get ahead of that issue with his no higher taxes on 400k pledge. We'll wait to see the reality though.

Biden's promise has already morphed into "household's making more than $400,000", not individuals.

Suddenly all those dual tech worker couples in Silicon Valley are wealthy!

Dual tech worker couples making more than $400k in Silicon Valley are wealthy, and always have been. There's no suddenly about it.

They aren't ultrawealthy members of the capitalist class, sure. But they are definitely wealthy, and pretending that they aren't is just phenomenally out of touch.

I don’t disagree but plenty of people I know who voted for Biden didn’t think it applied to them.

$400k per year barely lets you buy a home in the Bay Area.

And regardless, what makes you think they’ll stop at $400k? That’s the point. Eventually a tax bill gets passed some couple making $150k need to “pay their fair share”.

Who cares about the price of a house in San Francisco when your income makes it a struggle to buy weekly food.

If you're talking about buying a house anywhere, you're already outside the "I'm poor" status.

“Wealth” is not income. Thinking like yours changes the calculus on if specialization is worth it.

Train for 10 years to be a doctor to make $400k a year for 10 years at 50% taxes or just work for 20 years at 150k at 30%?

Context: According to [0], $400,000 is in the top 1% of individual income across the US. It's in the top 3% of household income within California [1] and top 2% in SF/Oakland/Fremont [2].

0: https://dqydj.com/income-percentile-calculator/

1: https://dqydj.com/income-percentile-by-state-calculator/

2: https://dqydj.com/2018-income-percentile-by-city-calculator/

Right, this puts them in the category of lawyers, doctors, small business owners, etc.

It’s no longer a tax on the rich, it’s just a tax on successful upper middle class.

It would certainly help if the ultra wealthy and global corporations would just pay their fair share rather than use possible combination of barely-legal structures to avoid being taxed, bribe officials to create special exemptions, offload money to tax heavens and scare-monger about losing jobs whenever an actual tax increase is due.

The USA cannot even properly finance the IRS to go after the super wealthy tax cheats. Their bought-and-paid-for politicians would rather the IRS stick it to the little guys, ffs.

the powerful write the rules. always has been the case.

do you know of any societies that managed to sustain a dynamic where that's not the case?

I literally cannot think of any at all. Just some very brief temporary aberrations.

Saying “the powerful write the rules” is pretty much tautological.

Of course the powerful write the rules. Most people access an individuals power based on their ability to make and break rules.

Well, yes. Might makes right, no question there.

The question is how far the powerful are willing to push the system in order to maintain their relative status (relative to each other, not to 'us') and how much the disenfranchised are willing to take.

If the powerful are careless, an angry mob will spice up the game. But of course that's just opportunity for other powerful entities to advance their relative status.

The top 10% are paying over 71% of income taxes in the US. Who are you to say what their "fair share" is?

No, The whole point is that 71% is not fair, it should be closer to 95%...

Based on what? Why not just say 100% at that point?

> Any taxes on just the ultra wealthy raise so little money for the rest of the population that any large scale money raising requires taxes on doctors, lawyers, engineers, small business owners, etc.

That's very much untrue. What is true is that no one even bothers reducing the favorable tax treatment of the ultrawealthy, only taxing high-end labor income and pretending. As long as both long-term capital gains and pass-through business income are extremely tax-favored, it doesn't matter what rates or brackets you set for normal income, you arent really taxing the ultrawealthy. You could raise tremendous revenue by eliminating those favorable categories and treating all income as income, and only raising nominal rates by adding new brackets above the current top bracket. The reason that isn't done isn't that you can't raise enough revenue that way, its because the ultrawealthy are very good at propagandizing that the forms of income they earn vastly disproportionately ought to be untouchable.

>The reason that isn't done isn't that you can't raise enough revenue that way

Nah, it's coz any bill that attacks the ultrawealthy can be spiked to attack the moderately wealthy instead (ideal) or as well as (failing that it's better to make them allies).

This is where lobby $$$ really pays off - when tweaking the less overtly visible finer details of bills.

This pairs with a PR campaign of:

* We simply dont have that much money.

* You'd be better off not taxing it because then we wont innovate and then youll be sorry.

* We will leave the country entirely and then youll be sorry.

* You're next on the government hitlist (weirdly this one works even seems to on people who earn, like, $40k a year).

> That's very much untrue

How so? It’s basic math. The middle and upper middle class is still responsible for the vast majority of income.

> you arent really taxing the ultrawealthy. You could raise tremendous revenue

See, you’re getting confused because it’s not “tremendous” in the scheme of tax revenue. The only thing that would accomplish is helping with income inequality (i.e. it’s punitive towards the rich). This is fine if that’s your goal but it’s not going to pay for anything like basic income, universal healthcare, or major infrastructure. It won’t even balance the existing budget.

> The reason that isn't done isn't that you can't raise enough revenue that way,

Yes it is, full stop. A 100% tax rate on the top .1% would bring in about 500 billion annually (~$3 mil * 150 mil filers * 0.001) . That’s not even enough to cover the “cheap” infrastructure bill being proposed.

> they earn vastly disproportionately ought to be untouchable.

Careful with that. You’re also talking about how much of the middle classes retirement is structured there. Long term capital gains are used by everyone.

What this attitude says to me is that too many people have more solidarity with the ultra rich than their peers. Not to even mention those whose income is lower than their own. Hence, a tax on the ultra rich, is somehow very likely - in their mind - going to affect them as well. On the contrary however, a benefits cut, or perhaps a benefit grant, is just a waste of cash and will never benefit them somehow, even though things like paid vacation in Europe is universal.

I'm sorry but to me this attitude hasn't worked out all that well for the common man in the US (no vacation, parental leave, health care etc), but still you believe in the propaganda by default.

Hah, I'm not from the US (I'm actually from one of those European nations you mention) and I see it from a different angle - the tax burden on higher income earners here is so enormous that people will find ways to work less to keep their earnings down, as the government just takes most of it. It has become a problem with doctors particularly - they will often opt to work fewer hours in order to earn less, as it simply isnt worth the extra time. This has made doctor access harder, which is a double disaster when you realise that the tax payer is the one who paid to train them in the first place. It is hard to argue that people paying tax in that bracket aren't doing enough already, and shouldn't be weary of any proposed increases in taxation.

> people will find ways to work less to keep their earnings down

Even if that is true and significant, I don't really find high income people skipping overtime to be major problem?

But I'm curious to read more about the claim that doctors skipping overtime due to high taxes, can you share a link?

Furthermore, the aim can't be to institutionalise overtime through tax cuts (I don't believe it would work either and those would in turn have other effects) but to increase the amount of doctors.

Sure: this is about a slightly different specific of taxation here, but its sums up the arguments the doctors have: https://www.bma.org.uk/bma-media-centre/bma-says-the-chancel...

Also to clarify - it isn't about overtime. Previously full time (40 hours a week)doctors have switched to part time (2-3 days a week), to avoid hitting the 60% rate.

That seems much more targeted and specific than the usual right wing talk about taxes causing high income people to work less (which implicitly values that above redistribution). It's also not a result (as in, X% of doctors have cut their working hours) but a plead (we may do this unless!).

> Time and time again the wealth of the middle classes ends up as collateral damage in attempts to tax the very top.

What are examples of this happening?

The problem is you can't tax freedom.

Having a big pile of leverageable assets, even if you have little income, gives you a lot of insulation from many of the costs and risks we all come across in life. For example, freedom from paying rent, freedom from having to obtain and service debt, and freedom from having to worry about job security.

Meanwhile your doctors and lawyers give 40% of their income to the state and still have student debt, mortgages, may be forced to live in a high CoL area, and may have to live with high stress.

And every day people don't really understand wealth. There's a dumb competition advertised on TV here in the UK where you can win a £3M ($4.2M) house on the coast, and a sports car. While it's glamorous, upending your life to move to live in this home is deeply impractical for most people. The cost of maintaining and protecting it would likely cost the entirety of a median UK salary. That's not freedom.

Absolutely. It reminds me of way back when the NDP (left-wing party in Canada) was asked "who is rich?" and the answer was "a family of 4 making more than $60k per year". That honesty did not go over well at all, but it's the truth. There aren't that many ultra-wealthy. To raise real money, the definition of rich pretty quickly drops to the top 10-25% of income earners and suddenly some dude making $80k per year is being told he's rich.

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