The top 1% of America pays 40% of the federal income taxes.
Getting rid of the rich is probably a pretty bad idea for the rest of us.
Getting rid of the rich is probably a pretty bad idea for the rest of us.
When the top 1% are not in the top tax bracket, something is horribly wrong.
The federal income tax is based on income, not wealth.
They are not in the top bracket by choice - a luxury option unavailable to non-wealthy people in the working middle-class who actually are in the top tax bracket.
As you helpfully noted in your second half of your comment, high wealth, deliberately low income[0] means they are not in the top tax bracket[1] on the basis of their carefully calculated, tax-optimized income.
0. Taxable events need be overhauled to cover loopholes, including removing tax-advantages of borrowing against securities. The legal fiction that allows rich people to spend money not recognized as income is deleterious.
1. Warren Buffet, IIRC, noted his assistant was in a higher tax bracket than him.
There is no optimization for anything actually, its just income. There's lots of different forms of taxes that the US government takes part in as you know. Quitting your day job removes the income part until distribution/settlement for any owned assets.
You can argue for a wealth tax, but conflating two separate concepts is not how you do it.
My footnotes are the entirety of my argument, and it's not even as radical as a wealth tax. My argument has 2 easy steps:
1. Remove the arbitrage between actual liquidity events and the limited set of what the IRS currently considers taxable events. Borrowing against securities not being taxable is an example of what's broken. Arbitrage using trusts or LLCs needs to be deleted, based on controlling interests and/or ultimate beneficiary.
2. Align tax rates on capital gains vs. income
Is is also broken that you don't pay taxes on the mortgage you borrowed to buy a house?
Or the money you borrowed to buy a car?
What about the money you borrowed when using your credit card?
Or the money you borrowed to fund your college years?
For the vast majority of folk who take out the loans you listed, the loans are leveraged and are either unsecured, or secured by the car or property the loan was made out for, and therefore no underlying value to tax prior to the loan being issued. You knew this already, and I have doubts you're making this false equivalency argument in good faith.
Mortgage loans are secured by the house.
Car loans are secured by the car.
They are equivalent. There's nothing special about margin debt.
that 700K is income, but the billion is assets.
earning 700K is the income from $10 million in the stock market (although working to earn $700K is in exchange for you time while the income from $10 mil is passive. OTOH people with the work ethic to earn like that tend to like what they do.
a billion in the stock market is $70 million a year, a large number but far from a billion.
TLDR: 700K compares to a billion 1 in 1000, but the truth is closer to 1 in 100
They are arguing to take enough to destroy the businesses they create.
Remember Bernie Sanders saying billionaires should not exist? That's taking away 99.9% of Musk's wealth.
you're overcorrecting WAY too far. Tax rate percentages are much higher on high income people, and THAT is why they pay most of the federal budget, it's forced generosity paying the government.
and it's actually the top 20% who dominate income and taxes, but including that extra 19% is important because that is the class of people ("coastal elites") who have a (all too human) tendency to rig the system in favor of their children in terms of good schools, universities, learning high status pasttimes, "internships" at prestigious institutions, rent paid in high value/opportunity areas after university etc. These high income people basically earn their livings from the 1%.
(that should not be interpreted as a pure sign of oligopoly, capitalist markets measure productivity, and that's how it works out, production in these industries is highly valued by the populace, but turnover of these people is high, where the top of the list is almost invariably new people each generation.)
you wrote this, and I would call this "attempting to correct any misconception":
>This is a byproduct of wild wealth disparity, not because the rich are so generous with paying the government.
I'm saying that your formulation is not much better than what you are arguing against because you neglect graduated income tax. It's not because rich people have more money, it's because they are taxed at much higher rates, and lower income people are hardly taxed at all.