Economic, taxes, and tariffs discussion

[baldgriff]

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?

In my mind, a dollar earned is a dollar earned.... who cares how it is earned. I think I said that before and that I would do away with capital gains taxes.

[gcstomp]

what is great? put pen to paper on what? i didnt say anything that required a math problem. oh, BTW, it is unprecedented, and pretty hard to do, but we are doing it now. We are running ballooning ever increasing deficits, while the trailing 12 month stock market has been good (changing lately) and unemployment is at record lows (of stagnant wages). In our history, normally deficits go up when unemployment is high, market is poor. This cycle, with the Trump new deal, record wealth was siphoned to a select few uber wealthy, as well as companies who enjoyed record stock buybacks. This was a con job, a money grab, but its maybe 10th on list of issues I have with Trump.

[Sour Masher]

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?

I haven't looked closely, but because of the capital gains issue, Warren's 2% tax on wealth idea seems better than the 70% tax rate on income. And it amounts to about the same amount of revenue, but is fairer in terms of everyone rich paying it equally.

To answer your second question, something would have to give. My personal preference, in very simple terms, would be to spend about 1/2 of that additional revenue on reducing the debt and getting closer to balancing the budget and the other half on the two issues that I think are not only for the greater good morally as a society, but things that I think long term make fiscal sense. Those are allocating resources to bring us closer to universal healthcare than we are now, and allocating resources to converting our energy consumption into a more environmentally stable model.

As far as the 3rd thing you mention, I have never considered free tuition for all to be an urgent priority over the other three things. It is clear something must change--tuition costs have risen dramatically over the last couple of decades, as has student loan debt. However, many states are already making college more affordable for lower income students. More needs to be done to control costs, and make college more affordable for all. However, I worry making it free for all will just lead to more students whose career paths don't even require a traditional four year university degree to go to college, just cuz. There are other higher education paths, vocational training, apprenticeships, that make more sense for some. I have many friends with degrees that have nothing at all to do with the jobs they ended up with, and they will never make back the lost income they had from choosing to spend 4-5 years getting a BA and then working out of field from that degree. They just had no clue what they wanted to do, and college seemed like fun/a good idea. I don't think tax payers footing the bill for such students is a good idea. But again, the tuition rates are getting crazy. I'd never have been able to go to college and pay for it myself by working without going into massive debt at current tuition rates. It would not have happened. Given my fear of debt, I doubt I'd have gone to college.

[nots]

I haven't looked closely, but because of the capital gains issue, Warren's 2% tax on wealth idea seems better than the 70% tax rate on income. And it amounts to about the same amount of revenue, but is fairer in terms of everyone rich paying it equally.

To answer your second question, something would have to give. My personal preference, in very simple terms, would be to spend about 1/2 of that additional revenue on reducing the debt and getting closer to balancing the budget and the other half on the two issues that I think are not only for the greater good morally as a society, but things that I think long term make fiscal sense. Those are allocating resources to bring us closer to universal healthcare than we are now, and allocating resources to converting our energy consumption into a more environmentally stable model.

As far as the 3rd thing you mention, I have never considered free tuition for all to be an urgent priority over the other three things. It is clear something must change--tuition costs have risen dramatically over the last couple of decades, as has student loan debt. However, many states are already making college more affordable for lower income students. More needs to be done to control costs, and make college more affordable for all. However, I worry making it free for all will just lead to more students whose career paths don't even require a traditional four year university degree to go to college, just cuz. There are other higher education paths, vocational training, apprenticeships, that make more sense for some. I have many friends with degrees that have nothing at all to do with the jobs they ended up with, and they will never make back the lost income they had from choosing to spend 4-5 years getting a BA and then working out of field from that degree.

As for the Warren plan—aren’t folks just going to spread the money out amongst their family and file as individuals? How are you going to determine what someone’s net worth is? Who is going to determine the value of real estate and other big ticket assets (pro sports teams etc.). Surely we aren’t relying on a Forbes list for this. How about the value of someone’s personal brand (like the Kardashian name?) is that taxable? More importantly, how many people need to be hired by the IRS to determine and collect all of this? Her idea is so naive that I can’t believe it’s more than a campaign talking point, but I guess we will see. There would seem to be an awful lot of subjectivity in her plan to say the least.
PS- forgot one. These Uber wealthy have houses all over the world. What’s to prevent them from renouncing US itizenship like Mick Jaguar (and others) have renounced their UK citizenship to cheat the taxman?

[Fresno Bob]

Still waiting to find out why some think that the government should get one last piece of your money when you die. Why do people think an inheritance tax is an ok thing?

dynastic wealth benefits most from a strong, stable government, and should pay something extra to maintain it, especially when it doesn't kick in until after $11.2M per taxpayer

[nots]

Still waiting to find out why some think that the government should get one last piece of your money when you die. Why do people think an inheritance tax is an ok thing?

It sets at a pretty high amount ( I think over $5M) so I guess I’m a little agnostic on it. I do get the argument that a large farm (lot of land) or a small business may be forced to be sold by the heirs to pay the tax and that doesn’t seem fair. I guess I am open to hearing both sides of the argument on this one.

[baldgriff]

dynastic wealth benefits most from a strong, stable government, and should pay something extra to maintain it

Crap I deleted my post as you were responding. I didnt want to interrupt the existing direction of the conversation.

[nots]

dynastic wealth benefits most from a strong, stable government, and should pay something extra to maintain it, especially when it doesn't kick in until after $11.2M per taxpayer

I wouldn’t call a large family farm dynastic wealth.

[Fresno Bob]

as I've told my children, "you aren't the 1%, you are the 3%!"

[Fresno Bob]

I wouldn’t call a large family farm dynastic wealth.

I consider 8 figure property dynastic wealth

[Sour Masher]

In my mind, a dollar earned is a dollar earned.... who cares how it is earned. I think I said that before and that I would do away with capital gains taxes.

Wait, so instead of raining capital gains taxes to make them equal to income taxes, you'd eliminate them, so that people who make their money off of capital gains pay nothing?

[Sour Masher]

dynastic wealth benefits most from a strong, stable government, and should pay something extra to maintain it, especially when it doesn't kick in until after $11.2M per taxpayer

So true. An inheritance tax is a small price to pay for that wealth you are leaving your heirs still having value.

[baldgriff]

Wait, so instead of raining capital gains taxes to make them equal to income taxes, you'd eliminate them, so that people who make their money off of capital gains pay nothing?

NO! I would tax them at the same rate as any other earned income source. I dont care how you make the $100 bucks - you pay X% on each and every $100 unit no matter how it is made/earned.

[nots]

I just read the exemption is now over $11M. I don’t see any problem with folks paying a tax above that amount.

[nots]

NO! I would tax them at the same rate as any other earned income source. I dont care how you make the $100 bucks - you pay X% on each and every $100 unit no matter how it is made/earned.

Old article but it answers your question:

https://taxfoundation.org/why-capital-gains-are-taxed-lower-rate/