Quit taxing the ultra wealthy as if they're some regular joe pulling a yearly salary or hourly wages. Their wealth game is different, so tax them differently.
If someone joins a start-up and cashes out with $10M, tax it at 60%, not 20% long-term capital gains.
Nobody needs more than $4M.
Or, go and move to mid-west and retire. US tax payers don't need to subsidize your lifestyle so you can live in NYC or SF.
$120k/year would be a bit over a 33% raise.
Married filing jointly (MFJ) or Single (S) on the $120k/year in capital gains would be:
MFJ: 0% up to $83,350. 15% above that amount. For a total tax of $5497.50 in federal taxes.
S: 0% up to $41,675. 15% above that amount. For a total tax of $11748.75 in federal taxes.
The California tax rates for income or capital gains are:
MFJ: $3,623.42 plus 8% of the amount over $104,910. For a total of $4830.62 in state taxes.
S: $2,918.91 plus 9.3% of the amount over $66,295. For a total tax of $7913.48 in state taxes.
Net, after tax income is:
MFJ: $9139.32 per month
S: $8361.48 per month
These both compare quite favorably to the average ~$6,200 after-tax income my household lives on. And that's without subtracting the $650 additional taken out for the pension (because a person living on interest doesn't need to subtract money for retirement, as they are effectively retired!!). Or the extra $180 or so taken out for other post-tax payroll deductions.
As much as I oppose the idea, if it must be done, the only way I can see the government not squandering and corrupting all the money is to just immediately distribute it amongst the populace.
Government spending is a loan, which is repaid thru taxes.
Tax avoidance is the debtor defaulting on that loan. (Both morally and fiscally.)
Start at a value that is truly eye-watering for your average citizen, one which the lower-99% will never reach in their lifetimes. Say, for argument, $10M.
Implement an algorithm that plots out a Sigmoid Curve - 0% taxation at $10M, and increasing slowly at the beginning. Once it gets close to the inflection point, it rises rapidly to over 80% taxation, at which point it then slows down again, reaching 100% taxation for everything above the maximum value.
Which would be set at something truly ridiculously high - say, $100M.
That way, we have a smooth curve that cannot be “gamed” anywhere as easily as abrupt taxation levels. And we use simpler, market-valued assets from anywhere in the world that focus on how the hyper-wealthy sock away their wealth.
As such, any sort of classic investment is most definitely on the table, especially if it is ever valued by an open market. Housing, land, gold, stocks, bonds, business partnerships, you name it. All on board for taxation.
The nice thing about Sigmoid curves in a taxation role is that they start off incredibly gentle - you will likely not may much tax at all until you hit $25M of net worth, because it’s paid progressively on any amount above $10M. But at the same time, you pay 100% taxation on any net worth above $100M.
It is truly a progressive tax, leaving plenty of room for the ambitious, but is punishingly draconian on the vampiristically greedy.
This is the big problem with trying to tax the wealthy in America: There are just way too many ways to "not technically own" something, but still in reality be in complete control of it and benefit from it. Trusts, corporations, foundations: All these phony paper entities that you can "move" your stuff into in order to pretend to the government that it's not yours anymore, when it is in all reality totally controlled by you.
I worked for a founder once where basically everything he owned and benefitted from was owned by a "charitable foundation" or something. His homes, cars, boats, everything. He probably paid zero in taxes, whereas I, a chump, paid the normal rate. Total scam, but hey, that's what you get when the wealthy write the law.
You make it sound like this was something invented by tax -dodging capitalists getting one over on the government. But in reality the only reason paper entities exist at all is because government wills it so.
And now you make it sound like tax-dodging capitalists have no influence over a government's will. Welcome to the world of Citizens United, lobbying and such.