Economic, taxes, and tariffs discussion

[baldgriff]

Because labor should not be devalued relative to capital even more than it already is.

How would taxing labor and capital gains the same devalue labor? Capital gains are taxed lower than regular income thus valuing the investment income. If you tax them equally would you not be placing them on the same level?

[nots]

Interesting perspective and one for me to consider. However, it does tend to promote the "rich pay less" perspective which is so prevalent.

As a % of their net worth, yes, the rich pay less.
In terms of overall $, the rich (and almost rich) pay almost everything.
The key is striking a better balance. I just don’t think treating capital gains as ordinary income is the way to do it.
Most countries in the world have a VAT tax. They seem to be ok with it though, % wise, it falls more on the lower income.

[Sour Masher]

Are you advocating for doing away with state sales tax?

Not if we continue to have a progressive federal and state tax system, but I don't usually here this issue addressed by those advocating for flat income taxes.

[Sour Masher]

As a % of their net worth, yes, the rich pay less.
In terms of overall $, the rich (and almost rich) pay almost everything.
The key is striking a better balance. I just don’t think treating capital gains as ordinary income is the way to do it.
Most countries in the world have a VAT tax. They seem to be ok with it though, % wise, it falls more on the lower income.

A VAT is regressive, but the countries that use is have progressive income tax to balance that out. If one is advocating for a flat income tax while keeping sales tax or a VAT, what one is really advocating is for poorer people to pay a greater percentage of taxes than richer folks do--to an even greater degree than that is the case now.

[baldgriff]

As a % of their net worth, yes, the rich pay less.
In terms of overall $, the rich (and almost rich) pay almost everything.
The key is striking a better balance. I just don’t think treating capital gains as ordinary income is the way to do it.
Most countries in the world have a VAT tax. They seem to be ok with it though, % wise, it falls more on the lower income.

In terms of overall $ the rich already pay almost everything - so it seems that many on the left believe they should be paying for more everything. I dont know all the answers - and dont pretend to. I do think that our "progressive" tax system is really somewhat of a farce when you "charge" the rich more - but let them take way more in deductions, exemptions and loopholes. So they really dont pay the "progressive" tax but find a way to lower their actual income in a way that is counterproductive to why the tax levels are there in the first place.

[Sour Masher]

As a % of their net worth, yes, the rich pay less.
In terms of overall $, the rich (and almost rich) pay almost everything.
The key is striking a better balance. I just don’t think treating capital gains as ordinary income is the way to do it.
Most countries in the world have a VAT tax. They seem to be ok with it though, % wise, it falls more on the lower income.

Well put. The rich do pay a lower percentage of taxes based on net worth than poorer people, but it is true that just as the majority of wealth is in the hands of the top 1%, the top 1% also pay the majority of taxes.

To your point about capital gains taxes, I actually agree with you, but was bringing up the point with BG, because he is focused on fairness and everyone paying at the same rate, and a flat income tax will never be equal and fair in the way he wants it to be, if you allow people who have the resources to make income off of capital gains to pay lower taxes on that passive income than the people who get taxed for their actual labor. If your focus is entirely on fairness instead of what works best for our economy, one would have to advocate for either a progressive income tax system, to balance out the lower capital gains taxes or the same tax rate on all income, which would mean raising the capital gains tax.

You think there are better solutions to reach that balance, but BG has been clear and consistent on equal effective tax rates for all, and you cannot be for that type of equality and also be for both a flat income tax rate and a lower tax rate for capital gains. That is not equal.

[nots]

Well put. The rich do pay a lower percentage of taxes based on net worth than poorer people, but it is true that just as the majority of wealth is in the hands of the top 1%, the top 1% also pay the majority of taxes.

To your point about capital gains taxes, I actually agree with you, but was bringing up the point with BG, because he is focused on fairness and everyone paying at the same rate, and a flat income tax will never be equal and fair in the way he wants it to be, if you allow people who have the resources to make income off of capital gains to pay lower taxes on that passive income than the people who get taxed for their actual labor. If your focus is entirely on fairness instead of what works best for our economy, one would have to advocate for either a progressive income tax system, to balance out the lower capital gains taxes or the same tax rate on all income, which would mean raising the capital gains tax.

You think there are better solutions to reach that balance, but BG has been clear and consistent on equal effective tax rates for all, and you cannot be for that type of equality and also be for both a flat income tax rate and a lower tax rate for capital gains. That is not equal.

Which is why I find the people who complain about the rich not paying their fair share while also complaining or lamenting their$20,000 property and State income taxes are no longer deductible to be insufferable. If you can afford to pay 20k in those taxes, you are doing well and you are part of the (almost) rich.

[baldgriff]

You think there are better solutions to reach that balance, but BG has been clear and consistent on equal effective tax rates for all, and you cannot be for that type of equality and also be for both a flat income tax rate and a lower tax rate for capital gains. That is not equal.

Im not tax expert or anything, and some of this I actually have been thinking through during this conversation. Whether we agree or not - I am happy to hear that I have been clear and consistent. All to often I fear that is not the case.

[nots]

Attacking this from a different angle:
Let’s say we pass the 70% tax rate for folks over $10M year. There are about 18,000 of those people and let’s say they have an average income of $30M (which is really, really high)none of which is taxable at capital gains. That plan would bring in about $360B/yr.
Let’s say we rescind the Trump tax cuts, which would add another $230B/yr.
Let’s say we lower the defense spending to $400B/ yr which is about 40% lower than Obama’s lowest year and is about $375B less than now.
We just saved about 950B or enough to more or less balance the budget.
Where is the money going to come from for Medicare for all, free tuition, Green Deal etc?

[Sour Masher]

Im not tax expert or anything, and some of this I actually have been thinking through during this conversation. Whether we agree or not - I am happy to hear that I have been clear and consistent. All to often I fear that is not the case.

As you have been thinking through it, has the idea that maybe a progressive income tax IS fair, because we also have lower capital gains taxes, and almost all capital gains are earned by the wealthy? Isn't it unfair to have a flat income tax is the majority of income richer folks make is being taxed at a lower percentage that the labor of most Americans?

[gcstomp]

Just as a baseline of agreeing to facts, we do get this is golden age for wealthy. America's 1% hasnt controlled this much wealth since just before the great depression. https://www.marketwatch.com/story/we...ion-2018-07-19
The country as a total net worth has never been greater. But at same time 78% of workers live paycheck to paycheck, meaning 1 missed check and they cannot pay their immediate bills https://www.theguardian.com/commenti...k-robert-reich

Assume it takes $1.00 to run country. We know this is not working now, we are running a deficit, as we cannot currently afford that $1, we go further in debt every day. So, to pay that bill, we could tax the people who already are living paycheck to paycheck meaning zero savings and 1 missed check and cant pay bills. But they arent making anything to make a dent in taxes, raising tax rate to 100% on hundreds of millions of these poor shmoe people combined would have less effect than raising the taxes on the 10 top wealthy individuals, such as the Walton family. Or we could raise taxes on the wildly wealthy who have seen their historic wealth evermore increasing, to the point we have govt officials like Ross candidly say he has no idea why workers who missed their checks are on food lines. The absurdly wealthy, and these are not workers, the Walton family for instance attend an annual meeting but otherwise their job is to figure out what to do with absurd building sized mountains of wealth, at same time the Walmart workers are getting food stamps because they are living on poverty wages.

The issue will be forced beyond a breaking point and the let them eat cake response of lets talk what it should be, will be hey, more than 1 gun in hands of every man, woman, child in this country, here is the solution. When I say the serf/lord model currently being run, it is a trap of poverty for much of population.

BTW, Bezos wealth increased about 75 billion in past 2 years though that is net worth tied to stock. We need to talk about the Bezos/Walton type in a different category. Green deal, 1st know climate change caused by man is real, we are indeed at a tipping point, and its more than about money but about giving a damn about life after you. 2nd, the investments long term pay for themselves https://www.vox.com/energy-and-envir...-ocasio-cortez

Military budget should be maybe double the highest next country in world, so what number would that be? Medicare for all, relative to current broken system, something needs to be shaken out. How can US currently spend most per capita of world in medical but so many millions of people are without coverage. If US could have free (or some nominal amount) medical coverage for every single person in country, and pay same rate as other countries that also have universal coverage, we would be a net savings over current system.

[DMT]

Attacking this from a different angle:
Let’s say we pass the 70% tax rate for folks over $10M year. There are about 18,000 of those people and let’s say they have an average income of $30M (which is really, really high)none of which is taxable at capital gains. That plan would bring in about $360B/yr.
Let’s say we rescind the Trump tax cuts, which would add another $230B/yr.
Let’s say we lower the defense spending to $400B/ yr which is about 40% lower than Obama’s lowest year and is about $375B less than now.
We just saved about 950B or enough to more or less balance the budget.
Where is the money going to come from for Medicare for all, free tuition, Green Deal etc?

Why are deficits ok when they're going to the rich or to make bombs, but not for things that are going to benefit the future of our country?

I'm not pointing the finger at you, but clearly deficits aren't as problematic as Republicans have tried to lead us to believe (when they're not in control).

[nots]

As you have been thinking through it, has the idea that maybe a progressive income tax IS fair, because we also have lower capital gains taxes, and almost all capital gains are earned by the wealthy? Isn't it unfair to have a flat income tax is the majority of income richer folks make is being taxed at a lower percentage that the labor of most Americans?

I am not sure what you are saying here, but capital gains taxes account for about 10% of US IRS revenue. The majority of richer folks income is not from capital gains, though (obviously) the overwhelming number of people who pay capital gains are higher earners.

[nots]

Why are deficits ok when they're going to the rich or to make bombs, but not for things that are going to benefit the future of our country?

I'm not pointing the finger at you, but clearly deficits aren't as problematic as Republicans have tried to lead us to believe (when they're not in control).

I wasn’t making an argument about the deficit. I am making an argument against the idea that we can just increase taxes on the rich and everything will be fine. We aren’t close to paying for what we already have—-how can we continue to add new programs without a massive, massive form of taxation on nearly everyone (be it a VAT tax, elimination of Capital Gains, wealth tax etc).

[nots]

Just as a baseline of agreeing to facts, we do get this is golden age for wealthy. America's 1% hasnt controlled this much wealth since just before the great depression. https://www.marketwatch.com/story/we...ion-2018-07-19
The country as a total net worth has never been greater. But at same time 78% of workers live paycheck to paycheck, meaning 1 missed check and they cannot pay their immediate bills https://www.theguardian.com/commenti...k-robert-reich

Assume it takes $1.00 to run country. We know this is not working now, we are running a deficit, as we cannot currently afford that $1, we go further in debt every day. So, to pay that bill, we could tax the people who already are living paycheck to paycheck meaning zero savings and 1 missed check and cant pay bills. But they arent making anything to make a dent in taxes, raising tax rate to 100% on hundreds of millions of these poor shmoe people combined would have less effect than raising the taxes on the 10 top wealthy individuals, such as the Walton family. Or we could raise taxes on the wildly wealthy who have seen their historic wealth evermore increasing, to the point we have govt officials like Ross candidly say he has no idea why workers who missed their checks are on food lines. The absurdly wealthy, and these are not workers, the Walton family for instance attend an annual meeting but otherwise their job is to figure out what to do with absurd building sized mountains of wealth, at same time the Walmart workers are getting food stamps because they are living on poverty wages.

The issue will be forced beyond a breaking point and the let them eat cake response of lets talk what it should be, will be hey, more than 1 gun in hands of every man, woman, child in this country, here is the solution. When I say the serf/lord model currently being run, it is a trap of poverty for much of population.

BTW, Bezos wealth increased about 75 billion in past 2 years though that is net worth tied to stock. We need to talk about the Bezos/Walton type in a different category. Green deal, 1st know climate change caused by man is real, we are indeed at a tipping point, and its more than about money but about giving a damn about life after you. 2nd, the investments long term pay for themselves https://www.vox.com/energy-and-envir...-ocasio-cortez

Military budget should be maybe double the highest next country in world, so what number would that be? Medicare for all, relative to current broken system, something needs to be shaken out. How can US currently spend most per capita of world in medical but so many millions of people are without coverage. If US could have free (or some nominal amount) medical coverage for every single person in country, and pay same rate as other countries that also have universal coverage, we would be a net savings over current system.

That sounds great. Put pen to paper and tell us how you are going to pay for it.