We haven't really tried fixing the wealth gap since the Great Depression, so maybe it's time to give it another go.
Confiscating 100% of the ultra wealthy’s wealth would—for any reasonable definition of “ultra wealthy”—perhaps fund the government for a year or two.
Split-adjusted, Amazon IPO’d at $0.075 a share. If instead of raiding my $3 piece of Jeff’s billion, I had the good sense to give him that pittance 25 years ago, it’d be worth $7,400 today.
I don’t know why people don’t apply the same logic to people. The US is a highly competitive economy because of immigrants because it is a nice place to live. If that changes because of declines in living standards, it will be harder for those big companies to attract top talent in the US.
Investors will redirect their funds to friendlier jurisdictions. And entrepreneurs will go there too.
One the reasons European entrepreneurs go to the USA to start startups is exactly because the USA did not try this kind of shenanigans, while their native countries did.
As Margaret Thatcher said: “The problem with socialism is that at some point you run out of other people's money”.
- Margaret Thatcher.
Always odd when people quote Thatcher as if she was some kind of economic genius, rather than the architect of record unemployment, decline in manufacturing, record inequality and homelessness - all of which ought to sound familiar to Americans.
Countries with strong social safety nets, like Scandinavia, have some of the highest standards of living, longest life expectancies, and happiest populations in the world. That's Democratic socialism.
Neoliberalism hasn't "lifted nations out of poverty", it's increased inequality and instability for decades. If you remove China from the stats this is startlingly clear - and China is hardly pure capitalism/a free market.
And meanwhile, the planet is burning, we're losing species at extinction rates not far off asteroid levels, we've put plastic and PFAS into the entire biosphere making even rainwater unsafe to drink, etc.
> Mrs Thatcher was smart enough to recognize that
Thatcher increased poverty, unemployment, and inequality. Saying otherwise requires incredible delusion.
Which country exactly? Oil-rich Norway has about 5 million people and is basically a democratic Saudi Arabia. Sweden has more billionaires per capita than the USA - quite far from the egalitarian society socialists dream about. And they all have strong capitalist economies, with multinational corporations and such.
> China
China enjoyed unprecedented growth when they decided to allow capitalism and free markets. Conversely that growth slowed and problems starting to appear when scared of the entrepreneurs success, Xi decided to reign them in.
Other A/B tests abound: Venezuela, North Korea, Cuba, etc. My favorite is where I live, Eastern Europe. We were starving until we got rid of our socialist economies in the 90s and how we enjoy what is basically a luxury lifestyle: flights, cars, iPhones, city breaks and vacations in Greece.
> planet is burning
Do you think communist countries cared about the environment? They polluted even more. Read up on the Aral sea sometimes. Mao killed all the sparrows to such an extent they had to import new ones. Caring about nature is a luxury only rich people can afford. And only under capitalism people are allowed to create value and enrich themselves.
Who owns the oil Nick?
> Sweden has more billionaires per capita than the USA - quite far from the egalitarian society socialists dream about.
Sweden is regarded as one of the most egalitarian societies in the world.
> China enjoyed unprecedented growth when they decided to allow capitalism and free markets
Did the government retain significant control of the economy during that time?
> Other A/B tests abound: Venezuela, North Korea, Cuba, etc.
All countries which have been the victim of horrific sanctions and interference by the US, lest they prove that socialism can actually work.
> Caring about nature is a luxury only rich people can afford. And only under capitalism people are allowed to create value and enrich themselves.
Lol, some people really just buy anything.. This is tiresome. Believe what you like.
I actually lived under both systems so at least I can speak from my experience. I learned on my own skin which one I'd "buy". I am willing to bet you've never lived in any of those socialist paradises you admire. Give it a try please and then come back and give us economy lessons.
They still want access to our consumers, they still want access to the talent our universities produce, they still want the stability our economy provides, they still want to transact with the currency our military backs.
Tell them that if they want access to all that, they can pay their fair share of what it takes to provide all that.
The fact is that lower tax rates actually result in higher tax revenue. https://taxfoundation.org/research/all/federal/benefits-of-a...
Look at Apple paying an effective 1% tax rate on all European profits, just because some sneaky bois in Ireland decided that would be 'good for the economy'.
Was it good for Ireland? A little, though our reputation has suffered.
Was it good for Irish politicians? Have no doubt.
Was it good for Europe? Fuck no.
Was it good? Fuck no.
Folks seriously believe having one of the highest corporate tax rates in the world will have a positive effect are dreaming. Don't strawman with Ireland.
The world has seen tax rates lowered in a race to the bottom.
> Putting it back to 35% would put us as top 5 in the world.
See above.
> We have the data. This is a settled point. Tax revenue goes down and entire industries die and move away.
First off, no. Empirical evidence on the impact of lowering corporate tax rates shows mixed results. Implementation is key.
We've been in a well documented race to the bottom for about 50 years. We've been ignoring potential solutions like capital controls, sabotaging tax harmonization and international cooperation, and taking away the ability of the IRS to chase big fish.
American industry died because corporations chose to move their manufacturing to the places that were most willing to exploit their workers, with the backing of the same corporate-sponsored politicians cutting tax rates.
'The problem with neoliberalism is that sooner or later you run out of public goods to strip mine for temporary profits.'
> Folks seriously believe having one of the highest corporate tax rates in the world will have a positive effect are dreaming.
From 1952 to 1963 the corporate tax rate in the US was 52%, with the highest tax band set at 91%. The period and the years afterward were characterized by massive growth and decreases in inequality.
You could call it the heyday of the American Dream, when upward mobility was at a peak.
> Don't strawman with Ireland.
Ireland illustrates the point perfectly. Apple moved there so they could pay <1% tax across all Europe in a secretive sweetheart deal, and Ireland didn't even benefit all that much. Tax harmonization put an end to it. All very relevant and not at all straw, unless you're coming in with a hard bias...
> We haven't really tried fixing the wealth gap since the Great Depression, so maybe it's time to give it another go.
If you look at a graph of the percent of wealth held by the 1%, most of them start in 1979 to show an ever increasing trend. But if you look at a longer graph, you will see a larger U shape over the last century, with a higher peak pre-great depression than today.
No, they don't. There are enough mechanisms in the tax code that many of the ultra wealthy pay nothing close to this, or anything at all. Buffet has famously complained about this.
If you include FICA, it's more like the top 1% of income people pay ~30% of total tax (somewhere around there).
The bottom 50% of Americans own less than 3% of all wealth.
I really think that these figures need to start taking into account disposable income, so we can see just how fucking evil this situation really is. There's over 8 million hungry kids in the wealthiest country on the planet. Half a million families file for bankruptcy every year due to medical debt. Etc.
And people are arguing in all seriousness that we need to tax corporations and the wealthy even less, quoting Thatcher and cherry-picking misleading stats. Ugh.
So if I understood you correctly, yes, the rich pay a higher percentage of taxes if you ignore FICA, because the poor and middle class pay a much higher percentage of FICA.
Pedantically, only the social security part of FICA is capped. Medicare you still pay 1.45-2.35%, uncapped. But the 6.2% for social security is capped, and thus for the top end of the 1% ends up being a miniscule tax.
If you get rid of the social security cap, get rid of mortgage interest deduction, and add a wealth tax, that more or less solves the 2034 debt to <100% of GDP right there.
Also note that FICA is only on "earned income" (not interest, dividends, capital gains, rental income...), and is not subject to the standard deductions.
Of course the other way of looking at it is that fica ultimately just comes out of the pocket of the rich. If there were no payroll taxes, fica would just stay in the employers pockets. Employers are mostly the rich. Or may be it would get embezzled by the middle management due to increased principal agent problem without the payroll tax paper trail…
i.e. the top 1% of tax filers by income paid nearly 50% of all taxes collected.
This is accurate per the latest statistics released by the IRS, for tax year 2021; the top 1% of returns paid 45.78% of all taxes collected.
https://www.irs.gov/statistics/soi-tax-stats-individual-stat...
https://taxfoundation.org/data/all/federal/latest-federal-in...
It's funny. If you had 100 people in a room, there's one guy paying for about 45 people. And the next 4 people are paying for about 5 people each (20 total). And the lowest paid 50 people combined are paying for about 2 people total.
I think we should just not have the bottom half of income earners in the US pay any taxes. It wouldn't change the numbers much, and then it would be one less thing for them to complain about.
However, I don't expect anyone to put down their torches and pitch forks any time soon. It's too easy to use this to get people spun up, even above average educated people as in this forum.
Where does the vast, vast majority of the value of their work go? It goes to the asset class - the top 1 or 2 people.
And you call the top guy generous because he pays ~40% tax on the money the bottom 90% made for him.
Even as he buys politicians, runs monopolies, subsidizes fossil fuel, and strip mines the planet for even more.
Don't make out like the 50% of people making 2 or 3% of income are just ungrateful, or bad at math. The insane level of inequality in America is literally an existential threat to humanity.