Millionaires group calls for wealth tax at virtual Davos
reuters.com
reuters.com
For too long we've let the supporters of inequality get away with arguments like "Well if you increased taxes on the rich / corporations, they'd just move somewhere else". While such claims may be true up to a point, they miss the fact that these coordination problems can be solved, even in the face of vested interests trying to profit off defecting from the common good.
I'd love to reduce wealth inequality but I just don't think throwing all that money at the government is a viable path towards that goal.
The anti-government stuff needs some support and nuance. Government isn't all good or bad; it is what we want it to be. If we want it to invest in our people, such as through education, health care, housinng, etc., nothing is stopping us. We're not powerless at all.
For anyone paying more than zero taxes, this is the same as a $100 tax cut. For anyone who is paying zero taxes, we can still do the same thing by giving them a tax credit (e.g. increase the EITC) and letting their effective rate be negative. This is better than subsidizing student loans (thereby inflating the cost of college) or any of the other bad ideas politicians have had over the years.
But it forecloses the majority of political corruption. Which is why it's good, and also why it's unpopular.
If you haven't met your local elected representatives, that might be on you. It's not hard to meet them, and usually IME they make an effort to know voters.
> The government giving you $100 for school is strictly worse than the government just giving you $100.
We the people might be willing to fund schooling, but not other things. Regardless, I tend to agree with giving cash for charitable purposes. But where is this coming from? Who disagreed?
> Which is why it's good, and also why it's unpopular.
How do you know that? School vouchers are popular, and people could have said the same about them.
These rants about government - that we see commonly - are somehow given a pass for establishing a factual basis and making strong arguments. But they don't really say much except express frustration.
Most of these proposals, and the things people object to, are at the federal level.
A Senator from New York has 20 million constituents. If she met with each one for one minute, sixteen hours a day every day of the week for her entire six year term, she would have met with ~11% of them by the end of her term. And still not really know any of them.
> We the people might be willing to fund schooling, but not other things.
We the people are the ones receiving the money. If you want to spend yours on schools, go for it. Someone else wants to spend it on books, or private tutors, or compensating one of the parents to take time off of work to teach the children themselves.
> But where is this coming from? Who disagreed?
The existence of many of these programs that don't work like this.
The government will subsidize your student loans, which inflates the cost of education, but you don't get the cash equivalent of the subsidy if you work your way through college busing tables instead of borrowing money, or attend a less expensive school. You can't get the money if you want to buy the books yourself and then follow along with the lectures on OpenCourseWare.
> How do you know that? School vouchers are popular, and people could have said the same about them.
I should say popular with elected officials.
School vouchers are popular with the public and yet most states still don't have them.
> These rants about government - that we see commonly - are somehow given a pass for establishing a factual basis and making strong arguments. But they don't really say much except express frustration.
The general problem with government programs is that there is a powerful incentive to direct money to politically connected groups.
Why do we subsidize ethanol? Because it's made from corn grown in Iowa, which is the location of the Iowa caucuses. Why are the swing states the largest per capita recipients of federal money?
To get at the root of this, you need to look into the details of thousands of pages of federal legislation. Because the complexity is purposeful. There is a broad class of programs whose general goal is to transfer resources to the poor. That entire class of programs could be replaced with a single cash money tax credit, but it isn't. Because the purpose of most of those programs isn't to help the poor, it's to create jobs for government employees or subsidize specific products which the public is then forced to buy if they want the subsidies even if preferable alternatives are available in the market.
The complexity keeps people from rooting it out. Ordinary taxpayers don't have the time to look through the details of that much legislation to find just exactly how the corruption and inefficiency is costing them.
So you end up with just a general feeling that the government is ripping them off and no obvious path to correcting it.
But we have a great way of correcting it. We've corrected oodles corruption; our government has become measurably less corrupt over time. Of course it's not perfect, but we haven't stamped out cancer and car accidents either; we've made enormous progress and there is no need to stop now.
The defeatism serves the corrupt - and I guarantee you that they are the ones spreading it. What is amazing to me is seeing people, who have power, abandoning it because they are told they have none. It's like sports team walking off the field, when they are far superior to the opposition.
Most people don't want corruption. The only way for the corrupt to thrive is to get those people to quit.
> A Senator from New York has 20 million constituents.
Lol. Your example was a person with one of the 5 biggest constituencies in the country. Just go talk to your local rep. It's not hard. And it turns out, because so many morons believe what you tell them, they don't try to meet with the reps and they aren't so busy as they could theoretically be.
This argument is only sound if you assume things can't be made worse than the status quo. They obviously can.
Again, what is your solution?
That is the topic of the post you originally replied to anyways.
You're obviously living on a different planet than I am, because on the planet I live on, ordinary working people are basically powerless in determining where government spending goes. The government talks a lot about "investing in our people" and other such rhetoric, but its actual track record over decades is very poor.
What is stopping us from having influence? It's pretty straightforward - politicians who anger their constituents enough get replaced. Generally they stay within the limits. I see that defeatism and quitting prevents you from having influence. It's amazing to see people give away their power, but that's their choice.
The biggest problem I perceive is manipulation of the public through disinformation. The defeatism is the biggest source of disinformation. You have all the power, but your enemies have convinced you that you are powerless, to drop your weapons - and you went along with it!
I agree that this is a problem, but I suspect we disagree sharply about where the most dangerous disinformation is coming from.
If you mean that disinformation involves either misrepresenting facts, or (much more common and much more insidious) carefully choosing which perfectly valid facts to highlight and which ones to ignore, yes, I agree that's true. But the excuse disinformers always hide behind when called out on this is that choosing which facts to present always involves matters of opinion and judgment--after all, there are so many facts that it's impossible to present them all, so everyone has to pick and choose. And that is true: there are too many facts to present them all. That's why disinformation is so hard to combat: because there can never be an objective test for it. It's always going to come down to one person's opinion against another about whether a given presentation is a fair one or not.
> If we disagree about what is disinformation, there's a good chance you are wrong.
Huh? I'm the only one who could be wrong if we disagree? Who gave you papal infallibility?
So is stating your opinions and claiming they are facts. And so is shouting out certain facts loudly, in order to distract attention from other facts that you don't want people to pay attention to. And so is accusing someone else of doing one of these things, loudly, in order to keep people from noticing that you are doing another.
No, I'm not. I'm in the EU where those US tech giants successfully dodge paying any tax, which just isn't fair, especially for local businesses who already have a hard time competing without them having that advantage.
They always have arguments, but history shows that we can successfully tax wealthy people. It's not hard.
But that's also around when we stopped enforcing antitrust, which is where the recent concentration of wealth actually came from.
I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS').
The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly.
The main problem with IRS audits is that they choose taxpayers at random to be subject to an expensive time consuming audit which the taxpayer doesn't get reimbursed for even if the IRS finds nothing wrong with their returns. Small business owners are generally the ones this happens to because they're the ones who exceed the income threshold to get audited and they're the ones with complicated tax returns that are expensive to audit. Democrats have figured out that if they encourage this, Republicans have to spend political capital preventing it or their constituents get really mad.
This could be easily solved by having the government pay the taxpayer's time and expenses for the audit, but neither party really wants to do that because it would "cost money." (It costs money either way, but that way it would have to be formally accounted for and spread evenly among taxpayers instead of subjecting random unlucky ones to a disproportionate expense.)
But tax evasion is different than tax avoidance. One is illegal, the other is restructuring your activities to minimize your taxes while still complying with the law, e.g. by arranging for profits to accumulate in a subsidiary in a country with a low tax rate. It's typically the latter that corporations and rich people do to have low tax burdens.
> The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly.
Before the 1980s the highest nominal tax rates were higher, but nobody actually paid them because there were so many loopholes. People were literally deducting the cost of their personal vehicle from their taxes etc. They closed the loopholes and lowered the top rates at the same time, which basically canceled out. Federal revenues as a percent of GDP have been essentially flat since the end of WWII:
People are so concerned with law enforcement reform - when it's against rich criminals. Where's the law and order crowd? Get tough on crime!!!
But also, the way to avoid land value taxes is to build tall buildings on a small amount of land. Which is kind of the point -- an incentive to make more efficient use of scarce land. But then the guy who builds a skyscraper in a small town is paying the same amount of tax as the single family home next to it.
I'm still not sure what the Georgist solution to that is supposed to be. Like, alright, if you cover this town of 100,000 in single family homes you have enough housing for everyone, but with LVT there is a large tax incentive to replace 20 homes with a single building with 20 condo units in it. This continues until local rents fall to the level that they can't recover the cost of constructing more tall buildings, i.e. land values crash.
By then the town is 5-10% 20-unit buildings and the rest abandoned lots. Because the local demand for real estate square footage is completely satisfied so there is zero profit in building any more buildings there, but you've still only used 10% of the land. No one can make money by building more buildings on the other lots (construction cost exceeds collectable rents), but if they still have to pay a non-zero amount of LVT, that makes the lot have a negative value. Which implies that the end result is a land value of zero and therefore LVT revenue of zero.
That could still be worth doing -- it would eliminate rents attributable to land value -- but how would it generate any revenue? (And if the answer is "use zoning to prohibit construction of tall buildings" then you're just taxing the poor by making housing artificially scarce.)
Nobody wants to say "we are going to tax them in the place where they make the products" because then low tax jurisdictions would have a huge advantage to attract manufacturing. But it's the same thing if you say you're going to tax them in the place where the product is designed or sold or anything else. Making a choice allows them to arbitrage that choice. But not making a choice is even worse because then they get to arbitrage everything.
The best one is to tax them where the customers are, because it's really hard to move the customers. But then "corporate tax" is just VAT. Which everybody hates specifically because it works, and therefore causes lower retirement account returns and higher consumer prices by the combined amount of money which is now going to the government.
And that's really what the problem is. To have it not wreck the economy the change needs to be revenue neutral. Combine it with a tax cut for the working class in the same amount. Because then you might actually do something good. But most of the people asking for it are asking for it because they want to spend more money.
Are you arguing that nations should stop competing for talent and capital, because the taxes get a little too low in some places?
Opposing taxation is not the same as "supporting inequality". In fact, considering where the bulk of government spending goes, giving the government less to spend would probably reduce inequality.
If you have some data comparing inequality and tax revenue (as a percentage of GDP) for countries around the world, I'd love to see if there is some sort of correlation. Of course, a correlation wouldn't prove causation, but it would give me more confidence in what policy to support than your "probably".
If you focus too much on _punishing_ the companies rather than solving real problems such as government finance, you'll end up with ridiculous ideas like this.
If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore.
AND even if that weren't the case, I as the sovereign, get to decide how much the tax should be. Not a bunch of edicts from people who can't run their own finances properly.
Are you sure, what about a potential competing country that reduces taxes to 9%? The paradox of competition states that you will get none of the benefits of increased competition in a zero sum game like this. Taxes will be cut to 0%.
So you can now either get rid of corporate taxes entirely or form a global consensus. The former is preferable but it would require land value taxes which are an even bigger threat to the rich than corporate taxes which are just a formality that is easily avoided.
> Not a bunch of edicts from people who can't run their own finances properly.
It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit?
If a country can manage its finances just fine while taxing corporations at 9%, what about them?
> Taxes will be cut to 0%.
As unrealistic as it sounds, this is bad exactly how?
> It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit?
No point in arguing with you then.
And besides, it's freaking Davos that's calling for this... this is just PR. Catharsis.
explain?
Major executives also commonly make use of the company's private jets etc. for "business purposes" and so get to use them without it being considered taxable income -- and the corporation itself gets to deduct the cost. Meanwhile "business meetings" are so often in Las Vegas or some kind of tropical paradise.
You're still taxed on the value of the stock at the you received them. The reason why steve jobs had billions in apple stock isn't because apple paid him billions in stocks in the 2000s, it's because he had those shares decades ago when they were worthless. The billions came from appreciation on his part. It's independent of his position as CEO. Framing it as "loopholes like 1 dollar salaries" doesn't make any sense.
You don't think his work as CEO might have had something to do with it? Was he doing the job for $1 out of pure altruism?
And displacing a salary isn't really the point. Jeff Bezos could retire from working whatsoever and still be making more money than you (entirely in stock price appreciation) while not paying any taxes at all.
This isn't necessarily wrong -- they have to pay the tax if they want to spend the money -- but that's kind of the point. It's not really a loophole, and there are actually good reasons why it works that way, but it's also in practice a thing that enables very rich people to pay lower effective tax rates than random doctors and engineers.
maybe he gasp likes working as CEO?
>And displacing a salary isn't really the point.
right, but then it's not really the "$1 salary loophole", it's the "capital gains are treated differently than regular income" loophole. Specifically, getting a $1 salary has nothing to do with the loophole working. In a parallel universe where steve jobs were paid 1M/year and still had his initial stock grants, he'd still be a billionaire and benefit from the same tax lopphole.
Maybe he does. But if he has a billion dollars in stock and his being CEO caused the company to grow 6% a year instead of 4% under some other CEO, being CEO that year earned him an extra twenty million dollars.
> right, but then it's not really the "$1 salary loophole", it's the "capital gains are treated differently than regular income" loophole. Specifically, getting a $1 salary has nothing to do with the loophole working.
But it does, because a salary would be taxed at the ordinary income rate. Effectively zeroing it out avoids that. Meanwhile the company might grant him some stock options instead, which under the right circumstances might be taxed as capital gains.
I agree in this case you would have "earned" 20 million dollars or whatever by being CEO, but I disagree with equating this to regular income (and therefore worthy as labeling it a "loophole"). Let's push this to the extreme. If you owned a bunch of stocks in a company, and believed voting for a particular board chair would cause the company to grow 6% a year instead of 4%, does that also mean you "earned" $20 million dollars, and exploited a "loopphole" to avoid paying regular income taxes on it?
>But it does, because a salary would be taxed at the ordinary income rate. Effectively zeroing it out avoids that.
Right, but your "income" is composed of two parts:
1. your salary
2. whatever capital gains you stand to earn
Regardless of what the company paid you for your salary, you still stand to gain from the capital gains. The capital gain is where all the "loopholes" what we discussed are (ie. taxes being due only when you sell, being able to borrow against it). Regardless of whether you got paid $1M or $1 salary, you still benefit from the capital gains, and the tax loopholes on those gains. I suppose not having a salary will allow your tax return to show $0 owing rather than $xxx,xxx or whatever, but that's not really an accurate depiction of what the loophole is. Besides, I'm sure that bezos/jobs has other other stocks that pay dividends which are taxed immediately, and so his tax owing will never be $0.
Okay so we have this dude who likes working for no pay but he's getting all the money.
Meanwhile there are lots of poor people who need to work to feed themselves but don't get paid. Do you see a problem here? It's a quite simple market failure.
It's not a market failure because shareholders don't want just anyone (ie. "lots of poor people who need to work to feed themselves ") to be CEO, they want the best (ie. steve jobs). I'm sure steve jobs can ask for a multi-million dollar salary if he wanted it, and the board wouldn't even blink. As for why he's not asking for such a salary when he could, my guess is that he's doing it for non-monetary reasons (to appear more humble?), not as some part of diabolical tax-dodging scheme. The board certainly wouldn't consider hiring one of the "poor people who need to work to feed themselves" for minimum wage as CEO, just to save a few million dollars. The opportunity costs and/or damage that an incompetent person can do is too high to risk it.
https://www.forbes.com/sites/johnhyatt/2021/11/11/how-americ...
That's true; in practice executives may create a little flexibility in determining when they were received. This was a problem for Apple/Jobs:
https://www.cultofmac.com/460003/jobs-backdating-scandal/
regarding Jobs having super-appreciated Apple stock, I'm not a Jobs history expert but IIRC he sold all of his stock when he was ousted out of spite, keeping some token amount (internet suggests to be just one share to still get shareholder reports). That could be urban legend. IIUC his net worth dipped a lot in the 90s and he became a billionaire from Pixar's sale to Disney.
Yeah in that case it's less of a "loophole" and straight up fraud.
People will simply start to shift their wealth into areas that are loophole advantaged or hide it altogether in trusts, relatives and even something as banal as precious metals under the pillow.
It will never work.
Because the idea is very bad, but it sounds good. So instead of the people who understand the dynamics and the people who want to make positive change working together to support something that would actually work, they spend all their time fighting each other. You spend years arguing and the best case is that you defeat the proposal for a bad idea that makes things worse, which is also the goal of the people distracting you away from doing something that would actually work.
Every US jurisdiction has at least one; it's called “property tax”, a wealth tax that has very broad exceptions (i.e., everything except real estate.) Texas has the 6th highest of the 50 states + DC.
Taxing buildings is a bad idea for the same kinds of reasons as a wealth tax is a bad idea, but an actual wealth tax doesn't have exceptions. Or if it does, that makes it even worse, because whatever the exceptions are will create a powerful arbitrage opportunity. Which, in the case of property tax, is one of the reasons we under-invest in housing construction and have high housing costs. (Restrictive zoning is an even larger factor, but might not be if property tax mill rates were higher.)
Neither one of those things is categorically true of land (artificial land is a thing.)
> Taxing buildings is a bad idea for the same kinds of reasons as a wealth tax is a bad idea.
Whether or not it's a bad idea, it in fact exists, which was the question.
> but an actual wealth tax doesn't have exceptions
That's an unusual definition and doesn't seem like it matches any actual proposals that have been discussed with that name.
> Or if it does, that makes it even worse, because whatever the exceptions are will create a powerful arbitrage opportunity.
Why is this unconditionally a bad thing?
> Which, in the case of property tax, is one of the reasons we under-invest in housing construction and have high housing costs.
It’s really not, if it was, that problem would be inversely correlated with property tax rates, since those would determine the strength of that incentive.
"Land" is the surface of the planet. You can make "artificial land" in the sense that you e.g. cover the ocean with something that passes for ground, but that's just a type of building. It doesn't change the size of the earth. The ocean has land under it that was there before you showed up.
> Whether or not it's a bad idea, it in fact exists, which was the question.
There is obviously a meaningful difference between a "property tax" and a "wealth tax" or else people would not be talking about instituting a wealth tax instead of just adjusting the rate (if desired) on the existing "wealth tax."
> Why is this unconditionally a bad thing?
Suppose you have a wealth tax that applies to everything except precious metals. Stock market immediately crashes to the level that risk adjusted returns match those of holding metals while not paying the wealth tax, and metal prices skyrocket.
Insert whatever you like as the exception, same thing happens. How is that not unconditionally a bad thing?
And you get something similar even if there are no formal exceptions, because there will be types of property which are harder to measure and wealth will pour into them with high inefficiency in order to avoid the tax.
> It’s really not, if it was, that problem would be inversely correlated with property tax rates, since those would determine the strength of that incentive.
Measuring this is confounded by several other strong forces, zoning being the main one, but also just differences between housing markets in different areas. So it's hard to measure above background noise with low absolute differences in property tax rates.
But what makes you think this doesn't happen? If rents are $2000/month and you can build a new unit of housing for a risk-adjusted net present cost equivalent to $1999/month, it's profitable to do so. If the new unit will have $100/month worth of property tax due, now the rent has to be $2100/month before it's profitable to do so, and less housing is constructed causing rents to remain higher. What would cause this not to be true?
To the best of my knowledge, Texas does not have a wealth tax in the sense that is under discussion.
Right now the tax system is basically designed to make humans do as little work as possible. I don't mean that in a positive light. Employers don't want to hire people, they would rather hire machines because they are taxed less. Homeowners don't want to improve their home because they fear higher property taxes.
The unwillingness to do the right things, to head the right direction, for fear that the things is not perfectly done is a paralysis to be avoided.
There's two issues you raise that get conflated: 1. The above, that it will be loopholed, and dodged. Yet for many of the very rich it will have a meaningful impact. I'd rather start, than worry. 2. The fear that this gets used to extract wealth from the middle class. This is where the bulk of your words reside. Yet, even far-left democratic-socialist US politicians like Bernie Sanders only proposes taxing the top 0.1%[1], those presently making over 32m$.
To be so bound up in fear & uncertainty, to make oneself unwilling to act or try, to hold the belief of doom & misery as the only outcome of trying: it's far short of what a peoples should permit themselves.
Taxing people so the government can waste more money is not "the right thing".
> even far-left democratic-socialist US politicians like Bernie Sanders only proposes taxing the top 0.1%
As the GP pointed out, this is exactly how income tax was originally pushed through: by saying, oh, don't worry, it will only apply to the very top earners. Now look at it.
The fundamental problem with taxation of any sort is that, most of the time, the government is worse at spending the money than the people that it gets taxed away from. I don't see why a wealth tax would be any different.
We have to start doing something. The current situation is catastrophic. The 0.1% need to contribute, needs to chip in to the society they benefit from having around & working/selling-to, and in large part this super-strata of society is so busy re-investing their capital that they rarely have to directly help our society, fund our government; they face less tax burden than most. A wealth tax is a basic, simple, easy idea to make the well-monied investor class contribute something to society.
Ultimately government has to be able to respond & adapt. Once a law stops fitting it's purpose it needs to be amended, fixed, rewritten. To simply say we should admit defeat & give up government is defeatism that gets us nowhere. We need progress. We need progressivism. We need to be able to enact laws easier, to monitor their impact, to adjust them as we go. Legislating in my lifetime has been roadblocked by the most shrill, hostile, negative, condescending anti-government forces imaginable. At some point we need some space & time when we decide we are going to allow governing, when we will let ourselves make & adapt & improve laws. That has not happened in modernity, and that, that is the poison eating us away, and that is why disbelief is such a reigning popular toxin. When we say government degrades, saying things get worse, we're mistaking the symptom of this popular toxic anti-governance roadblocking for a cause; it's not government's fault it's been unable to make progress, to govern: it's been by design, by specific factions within America.
as opposed to our current tax system? afaik, it's also "abused, loopholed, and twisted by the most powerful to preserve the status quo, and it [is] the middle and working classes that get screwed by it."
Wealth tax is proposed [0] as a distraction from fixing the elite favoritism in the taxation of labor (income + payroll tax) vs. normal (just income tax) vs. capital (capital gains tax) vs. transfer (gift and/or estate tax) income.
It's a means of protecting the current tax system.
[0] Or, encouraged by elites as a focus when proposed by well-meaning activists who haven't really thought through the problems in the existing system well.
Who said anything about replacing the current tax system? They just propose to slap additional tax on your RSUs.
You can’t spend money with your neck in a guillotine.
That's a serious amount on tax on wealth and a surprisingly low bar to entry, if assets are included. Many small business owners would be included.
Still, $2.52tn is a hell of an annual development fund. You could do some actual good around the world, fix the climate, feed, clothe and educate the poor.
Or is it better to let people like Elon do what he thinks is best with that capital?
I'll side with Elon on this one.
It's not all or nothing, of course; Musk has plenty of resources regardless.
If Elon wants to create a charitable foundation with the mission of "Make humans a multi-planetary species", with himself as the chief executive, then society would probably be happy to let him transfer his wealth into that foundation (tax free) and continue making decisions about how it is spent.
So long as he's not infringing on the rights and freedoms of others in an unjust manner, why should he have to jump through hoops like that?
If someone succeeds in a country like America, it is because they have benefited from the roads and schools and legal system etc. that the government has put in place, paid for by taxation. If Elon is more wealthy than most people, it means he has benefited more from these services than them, and thus it is natural to expect him to pay more.
The question then becomes "How does society determine how much to bill Elon for?", and there are valid reasons to propose taxes based on income, or wealth, or consumption, or land, or some combination, or some alternative ways of generating revenue, such as only taxing corporate profit.
Ultimately these practical questions are for the people and their elected representatives to answer, but if the answer is "Money in your bank account is taxed, but money in your non-profit charity's account isn't", then Elon is welcome to jump through that hoop to reduce the money that goes to the government.
Anyway, plenty of other people manage to be motivated enough to benefit society without ever earning a single billion (and some people manage to earn or inherit billions without having a net positive contribution to society whatsoever).
It's better to tax away a percentage of his wealth and collectively decide how to use it. Elon Musk shouldn't get a bigger say in how to run our society simply because he has the most money.
It's kinda like someone parking illegally and the police being unable to fine the driver. So instead they start bribing the driver so he stops parking illegally.
I suspect that the ladder is true. And this is because the money not funneling up is funneling out.
It's a rhetorical question: a wealth tax signals that you are doing something big, as opposed to caring about solving the problem. Someone like Bernie Sanders probably doesn't know any better, but Elizabeth Warren certainly does, and supports it anyway.
The wealthiest pay 20% on capital gains, while the middle class pays an effective 30%+ federally when including social security, and that's just federal.
Stretch out capital gains tax brackets and normal income tax brackets, such that nobody in the previous tax year would have made more than 10x the highest tax bracket. For example, you might have a 65% tax on capital gains above $1billion (which is a 5% discount on normal income of the same amount). Not as sexy, but now you have truly progressive taxes and the problem is more or less under control. This is likely applicable to many other countries. To close some more loopholes, count collateralization of assets as a mark-to-market sale (prevent people from lending against assets without paying taxes) and stop the easy money injections into the economy that aim to prevent a short term stock market recession at all costs. Note that the only times in the last few decades that wealth inequality decreased were during recessions [0].
[0] https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
Is that true? Much of wealth is inherited, for example. And once people like Bezos have hundreds of billions, income isn't going to address the issue. Finally, who should pay more tax, a billionaire who makes zero this year, or someone who has nothing and makes their first $50K?
> a wealth tax signals that you are doing something big, as opposed to caring about solving the problem
Do you have some evidence supporting that accusation? It's easy to make accusations.
I forgot to add in the inheritance tax. Should be normal income subject to the same brackets. I don't really feel bad for the edge case heir who has to sell or donate their family estate because it's worth hundreds of millions of dollars and they can't afford the tax bill on its value.
And re: billions, Bezos has billions in unrealized gains, so actually it does. As far as anyone knows, no private individual actually has a stack of cash worth $100 billion sitting in a vault. These are gains waiting to be taxed, ideally by the system I proposed, but it will never happen because it would actually solve the problem.
> Do you have some evidence supporting that accusation? It's easy to make accusations.
Only the power of reasoning!
> Only the power of reasoning!
Reasoning depends on facts. Where are they?
But if this is the most important takeaway for you and you really want to preserve your adulation of certain pro-wealth-tax politicians, I'll say that it's impossible to truly measure how incompetent or well intentioned politicians are, so we can only reason that based on there being a simpler solution that hasn't been tried and is less glamorous, either the politicians have not thought of this simple solution or are aiming for something more beneficial for their political careers. Or maybe there is some brilliant reasoning as to why it wouldn't work which is just so obvious to them that they never thought it worth mentioning?
But then their rivals who disagree would continue their tax avoidance schemes, becoming wealthier than these “patriotic millionaires” and even, god forbid, forcing them (or their children) to work for the formers!
It serves the interests of the status quo - and it's a well-trodden means of doing it - to attack the messenger rather than address the message.
You realize that "they" isn't some sort of single entity or hivemind? At a individual level "stop avoiding taxation" suffers from a coordination problem. It'll be great if everybody stopped avoiding taxes, but if you're the only one doing it, you're just the schmuck paying the tax bill of everyone else.
If they really cared they could just donate the money to the governments or, even better, donate to charities / setup a charity which will probably spend the money a little bit better than the government.
This is just a new rule they want so they can say "Hey, we're good, this rule says we're paying taxes".
This Davos suggestion seems to have a dependency on the voluntary generosity of the donors.
Considering this, I think it would be pragmatic if the peoples of the world started having a serious group dialogue to start brainstorming and discussing the merits of some policy responses that we could take independent of government decision and implementation. Perhaps this would be a decent way to kick off some centralized implementation of direct democracy as I'd think a big chunk of the population is interested in this topic and it would be preferable to be able to capture metrics on preferences for various proposals.
The voting majority does not necessarily have a right to my property because they said so.
Also, if democracy is two wolves and a sheep voting on what's for dinner, what do you think would happen in that situation if the wolves abandoned voting?
Others may ignore your rights and abuse your freedoms, but that does not make it acceptable, and it doesn't mean those rights and freedoms don't exist.
The wolves and sheep are aggressors and prey. Your hypothetical is an analogy for theft - the majority 'taking' what it wants by disregarding the rights and freedoms of the minority.
"Human rights" isn't an excuse to not pay taxes, nor do they even forbid progressive tax policies.
> Your hypothetical is an analogy for theft
(For the avoidance of doubt, I am against theft and in favour of democracy, so I agree that my hypothetical of the wolves abandoning democracy was not something I thought would lead to a better societal outcome.)
A society which accepts the principle of private property might agree that certain "taking" is theft, but a society can equally decide that the "taking" of tax payments is not theft. Just because a group is a minority and strongly opposes what the majority want, doesn't make the minority's desire inherently more moral than that of the majority, even if they express their desire in terms of "rights and freedoms".
Roads, police, fire fighters, border security, armed forces, environment regulators, etc. I'm certainly open to debating what does and does not fall into this category for fair and acceptable taxation.
But to argue that 'we are taxing your wealth because you have too much' obviously falls outside of that category.
[0] https://www.economicshelp.org/blog/12309/concepts/diminishin...
There's a big difference between those things and taxing your whole net worth every year.
I'm not sure what essential philosophical or ethical objection there is to that, though, since money is constantly changing hands and being taxed (e.g. on the way in as income, and on the way out as consumption/sales tax). Moreover, as taxation changes incentives, it should be targeted to reduce socially negative actions, and arguably "wealth hoarding" is worse for society than "income", which is currently an accepted target for taxation.
I think the biggest "fairness" argument for a wealth tax, though, is that the average US household has a net worth of $120k, and pays $10k in total taxes per year, which is equivalent to an 8% wealth tax. (Of course it's true that if the household decided to not earn any money, it could greatly reduce its tax burden, but that's not really an option for most tax payers, whereas billionaires never have to work a day in their life).
So I would tie the wealth tax to be equivalent to the effective rate that the median household pays, but allow deductions for any other payments the wealthy person paid to the government or to charities. Also, for simplicity, the wealth tax should only apply to households above a certain wealth threshold, perhaps 10x or 100x of the median.
Who says that?
I am not aware of these meetings, where is it that they take place?
I think it's rather bizarre that no grassroots movement has arisen to work towards the general public getting together to actually decide what we actually want to do collectively, it's genuinely a very good idea.
> who has made promises that they most likely will not fulfill
That's just your assertion. It hasn't been my experience, and they can always be voted out of office.
> In elections you put an X beside someone's name
You can do a lot more than that, if you use the power you have been given in a democracy. Having worked on many elections, I can say that it amazes me how much power the few people doing the work have. To stand on the outside and say you are powerless is bizarre - like standing on the shore of the ocean and insisting there are no fish.
I'm referring to this: "We the people get together and decide what we want to do collectively".
To me, "we the people" means the population of the country, rather than a tiny subset who actually engage in political organization - I'm thinking (for starters) of something as simple as fine-grained surveys on various issues and policy proposals. Of course, most opinions are going to be pretty uninformed, but then whose fault is that? The population as it is, is a product of the system we've constructed to raise people in.
> That's just your assertion.
Is it a genuine point of contention that there is a substantial delta between what politicians promise and what they can be observed trying to achieve after election campaigning is over?
> It hasn't been my experience, and they can always be voted out of office.
So the saying goes. The system runtime certainly supports it, but the degree to which it is actually possible if one takes into consideration the given system state and historic behaviors makes it seem rather uncertain to me. Technically, what is and is not ~pragmatically/realistically possible is unknown.
> You can do a lot more than that, if you use the power you have been given in a democracy. Having worked on many elections, I can say that it amazes me how much power the few people doing the work have. To stand on the outside and say you are powerless is bizarre - like standing on the shore of the ocean and insisting there are no fish.
I can agree that people have some more power than they often think...but acting individually, how likely is it that one person can make significant change? Do we have substantial examples demonstrating it is possible, and few that demonstrate difficulty? And then also: how would our current state look plotted on an absolute scale of what is possible in the runtime, as opposed to what is possible in the system we've built within the runtime?
David Mitchell can explain better than me: https://m.youtube.com/watch?v=m2q-Csk-ktc
universal food, universal healthcare, universal housing
everything can be ultra optimized to make this as smooth and self sustainable as possible, we have the tech
then we can focus on space exploration and prepare for when this planet will get inhabitable
we just thinking like rats with this money, knowing how/who can/should build wealth and profit from some poor dude from Indonesia
such a waste of time
"me money, me do what i want, me want buy ipad"
said the random javascript dude paid 500k a year while teachers are starving
and streets all around the big cities are as dirty as some sink hole from bengladesh, full of cancerous cars, we been inhaling their smoke for decades, they know it's bad, they know :)
we are literally a useless species