I think it starts with a return to a progressive tax system with higher tax rates on upper incomes. In today's political climate, UBI would be dead on arrival.
Unpopular opinion: what the U.S. tax system needs is more progressivity at the middle class level. The U.S. has married couples with joint income over $100,000 per year paying a marginal Federal tax rate of at most 12%.
That's unfortunately the only solution. The wealth gap between poor and billionaires is irrelevant. What actually creates inequality is the difference between $150k and 60k.
I pay enough tax. I should not have to continue to pay more to make up for the frivolous government spending on "social justice programs", wars, more police, and bailouts for campaign donating companies.
More tax doesn't fix widespread, rampant, government corruption. The US takes in enough tax to have plenty of nice things. For citizens to see any benefit the military industrial complex needs to be defanged with prejudice, the US needs to pull out of all foreign police actions, etc.
The highways and roads I drive on are terrible. Let's start there. Why is that in such a poor state with me paying 35% marginal tax? Where is my money going? Yep that's right, "social justice consultants" and the military industrial complex.
On the UBI note it would never work out anyway. Yang's numbers were several order of magnitudes off similar to Bernie's healthcare numbers. We'd have to collect far more money than we could even with a progressive tax system and that's if we only offered it to actual naturalized citizens. If we offered to everyone who exists in America there's absolutely no way it would work simply by the numbers. These programs work in countries with defined borders, strong citizenship laws, homogenous cultures, and populations 1/10th the size of America. We are different. We need different solutions.
Absolutely agree about the tremendous amount of money wasted on the military and policing, but not sure why you’re putting “social justice consultants” in that same category, when they have many orders of magnitude less impact on the budget.
If we raised separate tax on land (that isn't a primary residence) and luxury property (aircraft, yachts, - anything exceeding 500k)...
Say you have a home you live in that's 300k. You also have a guest house you airbnb and make 50k/year on. There's considered 0 'value' in a primary residence, however you're making 50k/year value off your additional rent. So you'd pay tax on that, above and beyond any other tax.
If you have commercial or other real estate rentals you'd pay as well. The key is that you'd need to somehow peg the tax rate with inflation, and housing prices, etc...to basically make it a self-organized check-system to keep rents from rising, because rising rents means higher taxes.
Perhaps you actually tie the LVT to census data on homeless in a region, less homeless = less taxes, therefore creating solutions to that problem actually is a win:win...
> If we offered to everyone who exists in America there's absolutely no way it would work simply by the numbers.
I don't see why. You just appropriately set the amount paid out and the tax tier at which you cross into the red and are paying back into it. Are you suggesting that this threshold is barely above the poverty line? Because that's the only way it wouldn't actually work.
My marginal tax rate is already 50%. Why in God’s name do people think that the government deserves more of my earnings than I do? Every additional dollar I make busting my ass results in the government taking more than me. That’s sick.
I’m all for a flat tax with no tax loopholes but to increase my taxes more than I’m already paying is something I will never vote for.
Most people busting their ass working are the poor. Despite how they often present themselves, no CEO is working as hard as an Amazon delivery worker or warehouse supplier by any meaningful metric. The working poor of America are almost universally working more than 9-5 jobs to try to eke out a living, usually in high-stress critical work that is chronically undervalued (warehousing, delivery, EMT, nurses and orderlies, food preparation and serving, etc).
Not to mention, there is no way in which a worker can make a contribution to society that is literally billions of times greater than another. So, the fact the someone like Jeff Bezos can literally earn billions while others make pennies needs to be corrected theough a progressive tax rate - probably close to 95 cents on the dollar for every dollar over a few tens of million per year, like it used to be in America's golden age.
> Third, the point of taxes is not to change people’s income to better match the magnitude of their contribution to society.
The point of taxes is to provide a society where the guillotine doesn't come out. When it does it won't be the Musks and Bezos' of the world that the masses stop at.
This is a popular idea, but guillotine-heavy revolutions were pretty rare in the Western world, and modern revolutions in general, successful or not, were often a consequence of a lost war, not of usual misery in peace. Losing a war is dangerous for survival of any regime.
Peasants' revolts are another story, but too far back in history to be an useful analogy for today. They were also beaten to bloody pulp most of the time.
This person is ultra high income if their marginal tax rates are 50%. They didnt give numbers but using an online calculator [0] and assuming a high tax state (CA), you need to be above $500k a year income to hit 50% marginal rates. That is also assuming you are single, a married person would need a combined income nearly twice that to hit 50%.
I'm not the guy you're responding to, but I thought I had a reasonable strategy to simply calculate it. I can't do it for America, because I'm not sufficiently familiar with what data you have available and am instead going to do the analysis for Sweden.
In Sweden the labour share of GDP is 55%, however taxes on wages are 60% of the total government income, and a large remaining fraction of the taxes on work income. Another 30% is from VAT. Let's assume arbitrarily that half the VAT is paid by workers and not with income from capital.
Under this assumption, workers receive 55% of GDP in compensation before taxes, but pay 70% of all taxes.
If taxes on income were the same for workers as for capital then workers would pay 55% instead of 70%, so taxes would be 18% lower than they are now.
Its difficult to define terms like ultra rich and middle income earner, but my guess is that if you increased the top marginal tax rates such that rate on the "ultra rich" was something like 70% (including capital gains, etc), you could completely eliminate taxes for the bottom 50%.
The top 1% earners earned 21% of all U.S. income while paying 40% of all federal income taxes [0]. I would guess going from 50% to 70% would increase that share to would increase that percentage to 58%.
Old comment here, but I was assuming not just income tax to increase, but also to have capital gains, dividends, etc to be taxed at 70%. Current cap there is 20%, per my understanding, and a substantial amount of wealthy person's income is taxed at these favorable rates.
There was no such thing as income taxes until world war 1. So taxes increased ridiculously for 50 years and have been decreasing, as it should, ever since. I believe in paying taxes but not to my own detriment. I pay more than my fair share.
> Every additional dollar I make busting my ass results in the government taking more than me
Maybe don't think of it as "the government" getting your money, rather that you're investing into a fund of your nation's future. The key is making sure that investment is well utilized, and that requires us to all be properly invested.
Even assuming you live in a very high tax State like California, 50% marginal tax rate put you in, or close to the highest possible tax bracket. I live in a high tax state and earned above median income and my taxes (federal, state, medicare, and SS combined) was about 25% last year.
I think most people who advocate for flat tax advocate for a single bracket: a flat percentage with a single income deduction, which is asymptotically flat. So e.g. take 15% of (your income - 40k). This would not hurt the poor.
I am always amazed by such statements. Are you sure you have thought this through? What do mean with “asymptotically flat”?
As with the poorly understood correlation/causation relationship in statistics, there are many common misconceptions about how absolute and relative amounts influence the result of mathematical calculations.
The following example may highlight this:
Let’s say a person’s minimum financial need to simply stay alive and sane is $X. Now, take two almost identical people that only differ in their income: A’s income is bigger than B’s.
If you tax them both at a flat 15% (or any other rate), the richer will always benefit more from this than the poorer! The reason is because living, eating, and taking part in a society do not come for free.
Surprisingly, this is commonly not well understood and it also seems there are proclivities by some fellow rich and comfortable folk to intentionally avoid understanding this.
Proof by example:
Let’s see what their effective tax is after all the cost to stay alive has been deducted.
Excess Income = Income * (1 - 15%) - X
Let’s say A’s income is $150k and B’s is $40k, and the minimum amount X required to simply stay alive (not being homeless and having health insurance included) would be $25k. These figures are obviously simplified but anyone can feel free to use their own numbers and repeat the calculation. The general result will remain similar.
Then, A’s excess income will be $102.5k and B’s $9k. Relatively speaking, A will have made almost 11.5 times the amount of excess income than B, despite making not even four times as much as B (3.75 to be exact).
Excess income will be the only thing both of them can use to save and invest, purchase a house, or use it for all kinds of safety-net building and stress-reducing things.
What about a flat tax, where everyone is required to pay 15%...however everyone is guaranteed a minimum of 50k per year income, so if you earned 40k, you'd get a 10k credit.... which would likely offset all the taxes you did pay.
I think CEO pay should be pegged to average salaries too, and their tax bracket pegged to the differential between average salary in their company and some universally accepted "happiness" wage ...(like 70k I heard a few years back, but is probably closer to 80k now)..
If the average salary in your company is 50k, then you need to pay 30% extra in taxes. There also should be some sort of conversion from stocks to assumed 'income', so that the rich can't just use stocks to subvert paying taxes...
Everything you wrote is mathematically true no matter how you arrange your tax brackets unless you want brackets with negative marginal post tax income. So what is your point?
The point is (also mathematically speaking) that a flat tax is less fair to the poor than having a progressive tax with a zero marginal tax for incomes below what’s required for merely surviving (i.e. no tax for people without any excess income that can be saved). So there would be room for improvement but, as well-intended as it might be, a flat tax is not making things better for the poor.
You're changing the statement and also using bad logic. The statement was "does not hurt the poor [relative to the current situation]", not "make things better for the poor", or any standard of fairness you've arbitrarily picked. Moreover your logic is flawed, because, doing things one way or the other with taxation of the rich a priori has no effect on the poor, unless you are taking into account secondary effects like price inflation, but if you are I got news for you the government is fucking the poor in those sorts of metrics in far far worse ways than marginal effects downstream of tax policy.
If you're advocating a policy of "screw the rich to help the poor", you've probably never been poor. I have and let me tell you the least of my concerns was what rich people in general were up to with their money (except for the specific rich people that were keeping me employed)
Not sure I follow. I get the first order effects, but I'm hesitant to agree without an explanation of the second-order and systemic-level effects of such a policy.
There are other first order effects that government does (e.g
Inflation, arraignments for infractions, vehicle infraction revenue cutting) that drown out those second order effects. Fix those first.
You suggested them. The only real one I can think of is price inflation, and that's like nothing next to the destructiveness of the fed.
If you don't understand why arraignments for minor violations are awful for the working poor, you've probably never been poor. When I was poor I was lucky enough to not be hurt by arraignments (flexible work hours), but boy did I have sympathy for those people who were relentlessly fucked by that system. There was always at least one of them whenever I had to show up at court, and it wasn't hard to figure out how they got into those situations.
Only for those so poor that they aren't really paying any taxes. It's been estimated that if there were a flat tax that it would only need to be 10% of all corporate and personal income to be effective. Most working class folks pay well over that in the US.
I think "all corporate income" is doing some heavy lifting in that description. It would be a hell of a trick to pass a bill that made business expenses taxable.
You mean like the US? The top 1% earn 21% of all income and pay around 40% of all taxes. Or do do you mean it should be even more "progressive"? Might higher income people change behavior e.g. work less at the margins if that happens? Does that affect the total amount of tax income generated?
The top 1% don't work for income. They aren't going to do an extra 10 hours this week because they need to save for a new boiler, so why would restoring tax rates to Reagan era rates result in less work being done?
The poster means the top 1% of income tax payers. Also: you pay income tax on income whether you work for it or not. Try leaving your 1099-DIVs out of your income tax return and see how that works out.
The top 1% take out of the economy a LOT more than they put in. Anything that limits their ability to "earn" is benefiting the rest of society. It is also benefiting the environment & future generations' resource availability.
