How does taking more money from billionaires and throwing it into the government pot lower inequality? Even if every penny were immediately distributed to every American it would not change inequality. Tax code, special treatment? That special treatment such as handling capital gains, dividends, depreciation, etc. applies to everyone.
In any case, higher taxes, changing the tax code, sending more money to Washington is all politics. If you want to cut off the billionaires source of wealth, it’s easy.
Want to get rid of billionaires and the rest of the super wealthy? Just ban IPOs. Yup, cut off the source of wealth. Why have the tax code support the creation of new industries, millions of jobs and technology innovation? Why allow businesses and their founders that improve life for all of us turn a hefty profit simply because the value of stock they sell increases? Who needs Amazon, Tesla, Walmart, Facebook, Microsoft or Twitter for that matter? Not sure what politicians would do without Twitter though. 😁
I understand that it’s legal, but Warren Buffett should not be taxed at an overall lower rate than his secretary (and FICA taxes need to be included in the comparison). Even in our retirement IRAs and 401k(s), we will pay income tax rates, not capital gains tax rates on the capital gains accumulated in those accounts. I agree that a new billionaires tax is a silly idea but there are a lot of benefits for being an owner rather than a worker in our tax code. How do we start to equalize this but still reward those who take risks by starting a company? Should we raise capital gains taxes? Limit the amount of excluded capital gains for inherited assets? Pay workers more but continue to tax at the same rates (this would also cut dividends to shareholders)?
Interesting back and forth here. I understand the idea that more could be extracted from the very rich and the proposed Biden budget has a scheme in to do that. It is probably a virtue signal to the far left since it looks like an unworkable tax scheme. I understand the arguments that folks like Elon Musk have leveraged ideas and resources and there are people making a good living as a result of his ideas. Same as with Jeff Bezos and Amazon (although Amazon workers seem to dispute that here and there). I understand that folks like Musk and Bezos couldn’t have done what they accomplished without the internet and the US military keeping us able to work and live.
My lack of understanding comes in what is to be gained with a 20% wealth tax. Why is it necessary to start grabbing in excess of the current tax code. At last count, 57% of taxpayers paid no federal income tax. Those who worked were of course expected to pay the payroll taxes. What is to be done with the money extracted with a new tax? Will that tax money make us better off than if we left it where it is now? If so, how? I know that it will make some people happier in the short run due to “fat cats getting their comeuppance” like the college kids who live in theoretical land and the baristas who got a degree or two that didn’t lead to better employment. The federal government can spend more than we all earn and there will still be some with more and some with less and some with next to nothing.
Anyway keep up the good thinking and discussion.
A Rabbi delivers the eulogy at a man’s funeral.
Old lady in the back row: “Give him some chicken soup! Give him some chicken soup!”
Rabbi: “Madame, it wouldn’t help.”
Old lady: “It couldn’t hurt.”
Perhaps it could hurt. Americans seem to becoming addicted to getting more from government either from what others pay or not paid for at all and passed on to future generations.
Richard D Quinn Blogging at Quinnscommentary.net and HumbleDollar.com @quinnscomments
“Americans seem to becoming addicted to getting more from government…”
And there you have it. This quote is typical of many debates on the topic:
“Your other questions presume that those who are wealthy worked hard and have made good choices while those who are poor are lazy and have made bad choices.”
Comme ci comme ça, there is a little truth in that presumption, and a lot of danger. If inequality is endemic in a population, there is a great percentage of hard working, conscientious, even frugal people who will struggle to simply survive. Perhaps the greatest harm of inequality is not that you’re poor, but the idea that it’s —your fault– you’re poor.*
“If you are poor or low-income and have lived your life accordingly, you have received a disproportional amount of wealth transfer (not to mention access to hundreds of government programs designed to improve your education and lift you out of poverty) and will continue to do so in old age.”
(rdquinn, Feb 18, 2012)
Disproportional? Think of it as enlightened self interest. If you are among the elite, or even semi-elite, you –need– those lower paid janitors, landscapers, factory workers, (baristas?) etc. Best to make sure they can at least survive and reproduce.
*The U.S., by most studies has one of the highest income inequality of all developed nations (including income/wealth transfers), yet the “poor” are probably better of here than in other, less unequal countries.
I actually resent your conclusion. I do not and have never said anything implying anyone is lazy. Many people do make poor choices and that is indisputable as is the fact some people face uncontrollable misfortune.
The wealthy along the lines of Bezos did work had, were smarter and greater risk takers than the rest of us, but made their wealth mostly through the actions of the stock market and so what? That should not make them targets while ignoring the global benefits resulting from their efforts.
If helping those that need it through government transfers is effective it seems to me we should have done a better job at reducing the need for assistance by now. Politicians can’t resist buying votes which may be why families earning $200,000 and more still received child care tax credits.
In any case, more taxes on the super wealthy will not, IMO, do one thing to decrease inequality.
Dick Richard D Quinn Blogging at Quinnscommentary.net and HumbleDollar.com Twitter @quinnscomments
“In any case, more taxes on the super wealthy will not, IMO, do one thing to decrease inequality. “
Again, IMO, it couldn’t hurt.
My Dad, I suppose, made poor choices. Mom’s brother worked for Caterpillar. Union job, good pay, healthcare and retirement. Also not lazy, FWIW. Dad wanted and had good opportunity to work there. Mom insisted her children would –not– live in the city.* Uncle Jim bought a new car every two years (Mechanics Illustrated said that’s the best way to avoid repair costs) and sent his kids to private school. Dad bought used cars and kept them running as long as possible, or at least until the loan was paid off (36 months, back in the day.) And retired on Social Security only.
Point being, the economic income distribution is what it is. Millions of workers like Dad are simply filling a billet. If not him, some other similar worker would be in that income bracket. Maybe Uncle Jim. Not because they are lazy or made poor choices, or their feet stink and they hate Jesus, but because —somebody— has to fill that slot. It’s the numbers, like musical chairs, somebody has to lose. I have three sisters now living on only SS. Two others have either good pensions or ample savings. None are lazy, all made reasonable choices for their situation, and some are paying much higher taxes than others. I see nothing wrong with redistribution of income. (Just now occurred to me that much of the taxes I pay now, or have paid, goes directly or indirectly to my sisters and Dad, when he was alive.) Fine by me.
Ironically, like my Dad, Jeff Bezos is also filling a billet. If not for him, someone else would have created Amazon, or something similar. Really no need to worry about excessively taxing him or others. They will still keep making money. (And providing goods, services, and jobs.)
“ I do not and have never said anything implying anyone is lazy. “
Or “made poor choices”? Not frugal enough? I think it is counterproductive to not recognize the causes (and results) of inequality.
*Dad never even wanted children, but that’s another story.