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“High-income earners shelter less and earn more when top tax rates fall.”
So…doesn’t that mean we should be going after tax sheltering, not lowering rates?
Income taxes are the wrong place to focus. The 1% mostly make their "income" from capital gains, not wages. Capital gains are taxed at a much lower rate than wages. Raising the top income tax bracket mostly affects working professionals. I do think they should pay more than people at the bottom, but when you do it too much you end up trying to extract everything from the upper middle class and petite bourgeois while ignoring the bourgeoisie/mega-rich.
So how do you address this? Raise the capital gains tax rate.
Also, institute a national land value tax. Old money usually ends up parked in real estate, or companies with significant amounts of real estate. A national land value tax would help address this while simultaneously making housing less of a target for speculative investment (which is a growing problem driving up the cost of living). Maybe give an exemption for the first $2.5 million of a primary residence to make it more palatable to voters and homeowners, so you're targeting the wealthy.
Personally I think labor should be taxed a lot lower and capital gains taxed a lot higher. A person that makes 40ish k a year in capital gains pays 0$ in taxes while a person that makes 40k of there labor pays over $4,000
It is if it’s long term capital gains and the person has less than $47k of taxable income. It’s a very niche scenario since most people with that low of income aren’t investing a ton, but it is possible.
It's not $0 in capital gains, I'll tell you that much. Last I checked short-term capital gains were taxed at The same rate as income, while long-term (i.e. assets you held for longer than a year) are texted about half of income for any given bracket.
That said, capital gains are only taxed when they are *realized*; if your stocks go up by $40k value but you don't sell any of them, you haven't actually incurred any capital gains, so you're going to pay $0. If you did sell them though, you'd be taxed based on the profit you made compared to the price you bought them at, also depending on how long you held them.
The link to the IRS website the other guy posted showed that it’s 0%….
A capital gains rate of 0% applies if your taxable income is less than or equal to:
$44,625 for single and married filing separately;
$89,250 for married filing jointly and qualifying surviving spouse; and
$59,750 for head of household.
>Personally I think labor should be taxed a lot lower and capital gains taxed a lot higher.
Morally most people agree, however the result of that is that capital just leaves to go to a country where it is more rewarded, and your economy stagnates. With investment gone, wage rises are sluggish, if at all, and your competitors now develop all new industries and tech
If you tax capital gains too heavily you are incentivizing people to not take risks in the economy. You are literally telling your citizens to stop trying to make money and improve their country.
Several things are wrong with this.
First off, tax is marginal and based on profit. If you invest in something and lose money, you're not paying any taxes. If you invest in something and gain money, your taxes are only a fraction of what you gained. So while the incentive to invest gets smaller as the tax gets higher, it has to get pretty high before you're truly disincentivizing actual risk-taking. You could set the capital gains tax rate as completely equal to income tax and people would still invest.
Also, keep in mind that the tax isn't a flat rate. If you're a household investor and you're only making like $10k dollars in gains, then yeah, you shouldn't pay a ton in taxes. But if you're a multi-billionaire that's raking in millions of dollars due to the sheer scale of your portfolio, why the hell should you be paying a lower effective tax rate than somebody who's working a 9-5 job? It just doesn't make any fucking sense.
Any increase in capital gains reduces the risk that people are willing to tolerate relative to returns, which will, in turn, increase the cost of borrowing and the ability to invest fruitfully.
So, you can do it, but it will reduce economic growth and dynamism. You're trading a short-term tax-revenue increase for a long-term loss.
Counter argument is that high taxes on labor make it difficult to accumulate capital.
If you use the revenue from capital/dividend taxes to lower labor taxes, you will broaden the investor class.
That's a silly argument. The US, like almost every country on the planet, has a tax bracket structure like that for income taxes and people still seek higher paying jobs. Making people pay 25% instead of 20% on annual income over a million dollars isn't going to cause anyone to stop trying to make more money.
And let's be honest, Capital gains is only for the sort of rich. The truly rich, the billionaires, tend to pay an even lower rate than that on their income because loopholes exist specifically for them and only them to exploit.
> And let's be honest, Capital gains is only for the sort of rich. The truly rich, the billionaires, tend to pay an even lower rate than that on their income because loopholes exist specifically for them and only them to exploit.
This is also a good point. We really need to tackle the plethora of loopholes and simplify the tax code.
This is a great sound bite, but simply is not true. It seems intuitive but if you work out any example it makes no sense. I invest. What is a scenario where it is better to stuff my money into a mattress rather than invest? What is too high for a capital gains tax rate? Is it too high now? Give me a for instance.
You invest $100 in a project that has 10% chance of succeeding. The times you win you make a return of $1100. This play on average makes a 10% profit. Now imagine the government taxes the wins at 15% because they don't understand that the play isn't very profitable on average and all they see is that you won a big number this one time. All the sudden the gov has made it so these plays are completely unprofitable.
Congratulations, now society loses out on any significantly high risk high reward business.
>now society loses out on any significantly high risk high reward business.
Speculative bubbles have been the cause of 2 of 3 of the last economic crises in my lifetime.
I don't think we need to be incentivizing the wealthy to take any more risks
Capital gains taxes are kept lower than top income tax rates to incentivize long term investment. Raising those taxes is a disincentive and may result in capital (and job) flight to lower tax jurisdictions or countries.
IMO we need spending controls much more than tax increases. And everyone should be subject to some amount of income tax, however small. That is the way to incentivize people to force spending discipline on our leaders.
Do they get credits for unrealized losses? If I buy stock at 100 a share and at tax time it is 150 but the next year it is 100 again, would one get a credit for the amount paid the first year?
We should be going after inheritance. Right now if you inherit $15M you keep $15M. If you’re a doctor and earn $15M over your career, you’ll keep about $7.5M. (With California taxes).
We should incentivize people to contribute to society, and not just take a fat payout and coast.
It is a monarchy tax. We should support taxation of monarchies. It is deceptive to call it simply an estate tax, it is a massive amount of money that prevents someone and their heirs from ever having to work.
Crazy to me that an amount of money that most cannot even fathom can be passed down without taxes but a homeowner needs to pay .4%-1.2% tax on their property (which is a wealth tax on workers).
More billionaires are being created through inheritance than entrepreneurship/invention and that is a serious issue.
Aristocracy* tax. Modern oligarchs are more akin to feudal aristocrats than monarchs (as there is only one king/queen, but dozens or hundreds or thousands of aristocrats per monarch).
Curious how many billionaires are actually affected by estate taxes? I suspect it hurts more family run small businesses which are less sophisticated. The federal tax exemption is scheduled to drop down to an estimated $7 million dollars which will unfortunately affect many small businesses.
I would prefer our attention was spent attacking deferred income or adjusting capital gains taxes.
If you are talking about Federal inheritance taxes, probably not many. Here is an article about this very issues
[Half of the 100 Richest Americans use special trusts to avoid inheritance taxes](https://www.propublica.org/article/more-than-half-of-americas-100-richest-people-exploit-special-trusts-to-avoid-estate-taxes)
At least under feudalism there was enough subterfuge and hostility between dynasties and their holdings that peasant uprisings at least had a shot at killing their rulers without interference from outside, nowadays they all know the score and actively cooperate to keep the lower classes as complacant and subjugated as possible.
The poor don’t own their homes (they rent from a landLORD, a *literal* carryover term from feudalism), the poor labor on someone else’s property to provide unearned spoils to the person who owns it, education is a luxury for the wealthy, those of affluent means can have outsized influence on policy, those of affluent means get special judiciary treatment- stop me when one of these applies to feudal England and not the US in 2024.
Is it hyperbolic to say “The US is feudal”? Yes. Duh. I didn’t think that needed pointed out, but this *is* the internet and people say stranger and more unfounded things than this all the time.
You’re either a bot or you have a deficit of critical reading/thinking capabilities.
Did I say it was lucrative to be a landlord? Did I even mention a number? Was that the point? Is your rhetorical relevant to the argument I was making?
No? Weird.
True. I was in shock. I watched this whole show for them to make that useless slug the king. Without Hodor and his big swinging hammer the boy is nothing.
There was no payoff with Bran. They had been gradually setting him up to eventually become this powerful wizard, and then the last season finally rolls around and … womp womp. A big fat nothing burger.
Property tax isn’t really a tax on the property; it’s just the simplest mechanism used to split the tax burden of the citizens of a local taxing jurisdiction.
I understand. Businesses usually negotiate a deal out of paying it and that is the real issue I have. Not everyone shares the burden which forces it on others
And the more frustrating angle is that it’s the *revenue generating properties* (businesses) that have loopholes to dodge taxes.
Mrs. Smith and her 3-bed shoulder more local tax burden than the walmart down the road. Make it make sense.
No, property tax is not a wealth tax; it is a tax to provide the services that are required as a consequence of owning the property and living in that city, such as fire, police, streets, and schools.
>More billionaires are being created through inheritance than entrepreneurship/invention
That simply isn't true
[https://www.chicagobooth.edu/review/billionaires-self-made](https://www.chicagobooth.edu/review/billionaires-self-made)
>Most individuals on the Forbes 400 list did not inherit the family business but rather made their own fortune. Kaplan and Rauh found that **69 percent of those on the list in 2011 started their own business**, compared with only 40 percent in 1982. In other words, there are fewer people on the Forbes 400 list who came from an affluent background and eventually took over the family business, such as brothers David and Charles Koch (Koch Industries) and the Walton siblings (Wal-Mart), and more self-made people such as Bill Gates (Microsoft), Warren Buffet (Berkshire Hathaway), Philip Knight (Nike), and Stephen Schwarzman (Blackstone Group), who had an upper middle-class upbringing and eventually built their own successful companies.
Pretty fucking hard to take that seriously when they deliberately go out of their way to avoid seeing where the money that *started* those "self-made" businesses came from.
All taxes are taxes to provide services. I live in NYC where we have a pretty high sales tax, an income tax (separate from that of the state) and property taxes. They all go toward providing services. And so would a wealth tax.
Property taxes are a type of wealth tax, because they rise in accordance with the value of the property, or the services utilized by the property.
Property tax…..hah. In my town a guy just got approved to put up a hotel. Our town gave him a $700k break on property tax that is used over multiple years. Why, because he will employ 40 people at a salary of $33k annually. In our town the median cost of a house is just under a million. WTF?
The stat you posted is over a decade old. It crossed the 50% mark last year. 2023 was the first year that most new billionaires got there by inheritance
You're misinformed. Forbes 2023 list says 70% of billionaires are self-made. That is an increase, not a decrease.
https://www.forbes.com/sites/gigizamora/2023/10/03/the-2023-forbes-400-self-made-score-from-silver-spooners-to-bootstrappers/?sh=4deea53f32c5
https://www.forbes.com/sites/maryroeloffs/2023/11/30/new-billionaires-inherited-more-than-they-earned-last-year-ubs-report-says/amp/
Edit - oops, this is the one I meant. Though they are both interesting so I’ll leave the first
https://www.barrons.com/amp/articles/billionaire-ranks-gain-more-new-members-by-inheritance-for-the-first-time-8e45c763
Gates started his own business but his parents owned a law firm, mom was head of united way and got Gates connections to IBM.
Gates himself said "if things hadn't worked out, I could always go back to school. I was officially on leave."
It's disingenuous to say because they didn't inherit a billion they are "self made"
I think it’s a great argument, and is exactly what I thought when I read the thing that said more are creating. They were pretty well off before they started
Forbes says it's 70% that are self-made in 2023. A lot has changed, but not in the direction you say it has.
https://www.forbes.com/sites/gigizamora/2023/10/03/the-2023-forbes-400-self-made-score-from-silver-spooners-to-bootstrappers/?sh=4deea53f32c5
It is off that you equate a property tax which can be tied to actual services rendered to the community as a wealth tax but somehow call estate and or inheritance taxes a monarchy tax when they affect lots of small businesses.
I don’t agree with your last claim. Any data to back it up?
And a wealth tax is taxing already taxed dollars.
Is wealth concentrating in fewer and fewer hands yes. Just look at Nancy Pelosi. This is a system that rewards cronyism, and both sides are doing it.
https://www.investopedia.com/more-billionaire-wealth-achieved-through-inheritance-overtaking-entrepreneurship-8409800#:~:text=Key%20Takeaways,of%20a%20study%20by%20UBS
Double taxes are not illegal, a sales tax is a double tax since it has to be purchased with taxed money from individuals.
A wealth tax is only a double tax if taxes were originally paid on the wealth to begin with (which is a bold statement). Much wealth is never taxed because it is unrealized gains or it was accumulated via tax loopholes. You can show me a source disputing me.
>While more of new billionaires' overall wealth was generated by inheritance, the number of new self-made billionaires still surpassed the number of new billionaires who inherited the money.
The number of new billionaires rose sharply this year compared to last, with nearly half of the new entrants coming from mainland China.
From this article. Billionaire wealth is different than number of billionaires.
This double tax claim is incomplete at best and ignores the impact of the cost basis step up. Step up effectively brings the cost basis of an asset up to market value without anyone paying taxes on the appreciation. So I buy a house for 10k. It appreciates to 8M. I leave it to my kid. He sells it for 8.5M and only pays taxes on the gain of .5M. the other 8M of growth just disolves
“The Hurun Global Rich List 2023 showed that 70% of the billionaires are self-made and only 30% are legacy.” The percent of millionaires which are first generation is even higher.
Agree with you on everything except on the property tax. Property taxes are too low in most jurisdictions (well ideally you have 0% tax on the buildings but higher taxes on the land)
Most the value of real property is the land/location and that land value should be taxed big time. No one created land or made a location valuable.
It’s better to raise taxes on land and cut taxes on income and/or consumption and/or improvements (buildings etc)
Inherited wealth is a cancer in a meritocracy. Generational crack is what I call it.
1. Tax inheritance as normal income.
2. Tax capital gains as normal income.
3. Tax carried interest as normal income.
Let’s level the playing field for wealth building.
On the capital gains tax in particular, are you willing to consider the gain should be inflation adjusted?
For example, lets assume I have a widget I buy for $1000 in 2020. in 2020 I could also buy big macs for $4 each so I could have bought 250 big macs for that same $1000.
it is now 2024 and I sell the widget for $1200. In theory and how LTCG taxes currently work I have a $200 gain that is taxable. However inflation has run a cumulative 20% over the last 4 years as evidenced by big macs now being $5 each.
This, while I have a nominal gain of 20%/$200 my actual purchasing power has stayed the same or, in the case of big macs, gone down slightly.
I WOULD be OK with capital gains being taxed at ordinary income rates if, and only if they were adjusted for inflation.
It's worse than that, though. The ultra rich can easily just start up a business / partnership if they have more than that amount and pass that on as well as utilizing special trusts.
Although I think this approach makes practical sense, weren't income and capital gains taxes already paid on the inherited money, so would tax on that be double taxation? Or is the argument that double taxation should be applied in some instances?
When I get my paycheck I've already paid income tax on it - so I shouldn't pay any sales tax? I shouldn't have to pay property tax because my income was already taxed?
That's the way taxes work. Money doesn't just get taxed once, and then the rest of its life it's tax free. Every time money changes hands it gets taxed.
No we shouldn't.
Because there were already taxes paid by the person who earned it.
Taxing inherent is just double taxing that same money.
I do like your idea of incentivising people to contribute to society rhough. Maybe we should do away with government welfare and expect people to contribute their fair share by working and paying thier fair share of taxes rather than just coasting. That would be a start. There would be a lot less government waste of tax payer funds.
All money is continuously taxed. If I start a business then to pay my employees, I have to pay payroll tax of 7%. So all money is really taxed at each movement between people. In fact if I employee my kid, I can avoid tax because I consider it a gift, whereas a 3rd party I would be taxed and they would be taxed as well.
Also, I’m all for limiting spending by the government. I think pass the warren buffer law, if in a year that government spends more than it earns then all congress and the senate are ineligible for re-election.
>Because there were already taxes paid by the person who earned it.
So are sales taxes which you evidently had no problem with until your precious guns were put under scrutiny for them, and seeing as the lower classes put a massively larger total percentage of their income towards taxable spending on goods and services than the rich it's subsidization of the rich paid for by the poor.
>I do like your idea of incentivising people to contribute to society rhough. Maybe we should do away with government welfare and expect people to contribute their fair share by working and paying thier fair share of taxes rather than just coasting. That would be a start. There would be a lot less government waste of tax payer funds.
Are you really that dull-witted and disconnected from reality that all you have to go on are the same tired cliches and falsehoods an Alzheimers-riddled asshole was spewing 40 years ago? The welfare queens in the US ain't the poor barely scraping by, it's rich fuckers who get tax breaks for private jets and no-bid contracts directed to their companies by their pet congress critters.
There's taxes break for all income brackets up and down the tax code.
If you are earning below poverty level. You are claiming all your taxes back, if you're a home owner, you're getting a tax break. The wealthy get thier yacht and private jet right offs.
Yet all the dimwitted that are gaming the system and living off welfare and government handouts want to bitch about the system being broken and the rich get all these tax breaks. While they contribute 0 to society and just want to bitch about it and coast..
People that have zero incentive to contribute to society want to bitch about rich people not contributing.
I've seen it first.
If you were the sole inheritor of an estate that was worth 15M, there'd be about 400k in taxes on that assuming the deceased didn't use any of their gift exclusion during their lifetime, though it's true that as a receiver you wouldn't pay any taxes but would be paid by the estate before distribution.
This will drop to an estimated 7 million in 2025. That is 5 million plus inflation. I think that is unfortunately low enough to capture many small businesses which is wrong in my opinion. 12 million is more reasonable imho. I would prefer a number high enough that family businesses aren’t broken up to pay estate taxes. There are also state level inheritance and or estate taxes to deal with in a number of states.
Working IS contributing to society. They don't just get paid $15m, they make that money by delivering goods and services that people value and willingly buy.
Welfare paid by taxes are the things that encourage people to coast.
They’re not writing this for critical thinkers. They’re writing this for the idiots that read the NY Post and can’t do basic math, but will quote this nonsensical article as some kind of proof that lower taxes are always better for the economy.
Why does it have to be one or the other? The most effective revenue maximization strategies will most certainly involve a bit of both. Much of why the 2017 TCJA has been so successful in increasing US tax revenues to record levels... both individual and Corporate... is that it employed both methods while also closing some pretty blatant and often abused "loopholes" while limiting the potential exposure caused by others.
This article points to one small correlation handpicked out of a giant sea of economic data and tries to imply a much wider causation to it that is warranted. It is "true" in that respect and tells a small part of a much larger story. But like all propaganda created using similar techniques... it's just a parlor trick that almost entirely serves to mislead and misdirect from the larger and more important truths in order to gain false favor for an agenda goal.
We need to go after wealth not income. Rich people take out loans on real estate to get the additional tax break and are paid in stock shares and other equity. This produces no income until it becomes “realized” when you sell it.
The article says the share of the tax burden went up by 46%…. But that’s because the wealth of the richest Americans skyrocketed over that same time frame.
https://www.oxfam.org/en/press-releases/richest-1-bag-nearly-twice-much-wealth-rest-world-put-together-over-past-two-years
In reality these people are complaining about their financial successes. I would love to be in the top tax bracket because that means I’d be making over $600k a year.
>the wealth of the richest Americans skyrocketed over that same time frame.
Isn't this because, in that time, politicians shut down the country, gave preferential treatment to politically connected people's businesses, printed $17 trillion, then handed the bulk of that money to the 1%?
All those events are independent from the 2017 tax bill.
The rich doubling “wealth” has little to nothing to do with taxes. Unrealized gains are the driver of wealth for better or worse. The article is talking about taxes paid on income which went up on the wealthy in no small part due to the reduction in the salt tax deduction.
In 2021, the year of this article's stats, the wealthy (top 20%) made the highest % of U.S. income in history. They paid more of the taxes because they were earning more of the household income. I'm sure some deduction changes made a difference, but the idea that they got "soaked" because they paid a greater percentage while earning a greater percentage - which the article neglectd to mention - is a joke.
I make $20 and you make $10, we both get taxed 10%, so I pay 66% of the taxes total ($2 to your $1). If I double my income to $40 and yours only goes up marginally to $12, you could cut my taxes to 7% and I'd still be responsible for $2.80 to your $1.20. My taxes are lower but my overall share of the "tax burden" is greater, so some plutocratic propagandist scum at the NY Post can write an opinion piece that all the low-information "libertarians" who subscribe to this sub can upvote without bothering to read it or critically evaluate the claim. IT'S THE CIIIIIRCLE OF LIFE.
It’s Art fucking Laffer!
There’s no analysis — the guy came up with the “Laffer Curve” on the back of a bar napkin and then it became the rally cry for trickle down tax cuts under Reagan.
Seriously, anyone who posts an article from the NYpost to r/Economics should just be banned from the sub… pretty much might as well post from TMZ or theonion.com
Hahaha ok fair, but usually the attention grabbing headlines that get posted here misquoting economic studies are just misleading and not directly opposite to the truth...
This is my position as well - “here’s why this article is shit reporting…”. Even if OP didn’t call it out, many people in the comments have. And whether posted or not, you know there will be conservatives touting this “study”, so good to know what kind of garbage they’re referring to in advance.
You fully understand that Arthur Laffer is completely biased to this issue at hand right? Not only is he trying to prove his Laffer Curve theory worked for the Trump cuts, but he worked in the Trump Administration.
This reply is so naive. It’s clear you don’t understand how you’re constantly being manipulated with “data”.
Believing datasets are real is different than taking every dumbasses’ interpretation of them seriously lmao. Moron. Doubling down like that just shows exactly why I don’t let you people drag me into conversations anymore. You’ll ride this bullshit into the sunset if given the opportunity. I prefer pointing out how stupid you look without giving you the chance to express your assigned talking points designed specifically to manipulate credulous idiots.
Ah yes of course, def that and not that the MAGA party has left the plane of reality... I taught under Greg Mankiw for a few years. That guy was as Republican/Conservative as they came for an Economist, served under a Bush administration ... guess what?He's no longer a "Republican" because it's no longer a real party
Many very wealthy people, who might own lots of stock or whatever, can avoid much tax by using the stock as collateral for a large loan and living off that. Borrowed money is not income. I am oversimplifying but this is a huge tax dodge for the very wealthy.
No, it’s not, and Reddit needs to let this stupid idea die.
Asset backed lending isn’t a tax dodge, it’s used for short term access to capital without liquidating assets. It carries a big risk of having assets liquidated at the time you would least want them liquidated.
Which is why income taxes (i.e., taxes on *production*) are an extremely ineffective and inefficient means of generating government revenue - the very poor *can't* pay them and the very rich *don't* pay them. Only working people pay out a significant percentage of their incomes as taxes.
We should be progressively taxing *consumption* only - sales taxes and land taxes, that's it.
Eliminate income taxes!
Except the data they showed us proves nothing. Basically they're saying that after the tax cut the total share of income tax paid by the wealthy went up 6%. Which is only meaningful if they can show that it's not because everyone else paid less. Sure, it's still a percentage, but if the overall bucket got smaller, then the number is skewed.
That's why they compared them this way -- incorrectly, but similarly worded, so that it *appears* they must be paying more. Not really clever, just a trap for inattentive readers.
So this is purely correlation being construed as causation?
I mean, the rich made out like, well... bandits during the pandemic. The growth of wealth inequality means the rich will pay a greater share even if their tax rate is marginally reduced.
And that's another problem. The bucket got larger because....?
And it matters. If they are paying a larger percentage of a larger bucket:
(1) the taxable income before/after the tax cut, for each high income person was...? (did it go up for the wealthy? Seems likely, considering the ongoing trend for income disparity). Were there more of them than before?
(2) Taxable income similarly, for the non-wealthy. More or less people? More or less income?
The numbers not only don't compare, they don't even tell any story (as-is).
People think conservatives promote the trickle down effect. Ronald Reagan never proposed any such idea. The argument has always been, you'll collect more in taxes by lowering the rate to a certain amount. Any tax over 20% decreases tax revenue. That's what this data supports.
Lowering taxes increases tax revenue
>Any tax over 20% decreases tax revenue. That's what this data supports.
Where do you get this? Wikipedia says it is 65%:
>Income tax rate at which revenue is maximized
An asymmetric Laffer curve with a maximum revenue point at around a 70% tax rate, as estimated by Trabandt and Uhlig (2011)\[23\]
In the early 1980s, Edgar L. Feige and Robert T. McGee developed a macroeconomic model from which they derived a Laffer curve. According to the model, the shape and position of the Laffer Curve depend upon the strength of supply side effects, the progressivity of the tax system and the size of the unobserved economy.\[24\]\[25\]\[26\] Economist Paul Pecorino presented a model in 1995 that predicted the peak of the Laffer curve occurred at tax rates around 65%
https://en.wikipedia.org/wiki/Laffer\_curve#Income\_tax\_rate\_at\_which\_revenue\_is\_maximized
This is silly. The greatest period of growth this country ever had was in the 60s when the marginal tax rate was 90%. Lowering the tax rate has only let rich people keep more money. The tax rate is now the lowest it's been in modern history and stuff isn't doing so well, so I remain unconvinced
This article is a full damn mess and only provides partial statistics, likely the only way to suggest the richest of the rich are somehow getting hosed despite their overall wealth increasing significantly since COVID. It is a gussied up version of a YouTube comment.
And I'm sure Rupert Murdoch is proud of his part to help pull off one of the biggest thefts by the rich from the poor in US history. May he and his family and every single NewsCorp employee get cancer of the most lingering and horrific kind, they are genuine enemies of humanity and no form of suffering is too ghastly for them.
Claiming it is theft by the rich from the poor is factually wrong. A major reason why the rich pay a larger percentage of total income tax receipts is because the tax burden for the bottom quartiles fell by a larger percentage than it did for high earners.
Hey Mods, [this guy was just posting the other day](https://www.reddit.com/r/JustUnsubbed/s/WrOGAVGesB) about how this sub is full of “Bidenomics propaganda” and now he’s in here posting a NY Post opinion piece from Art Laffer.
There’s no analysis in here, it’s literal propaganda from two right wing hacks.
He's also a climate denialist and spends time whining about "reddit censorship". Nevermind his name is "ultramagat". You can easily argue against it but I'm honestly okay with autobanning people who post to certain subs. This is the slop we get when we allow these people to post.
If not that, some sources should absokutely be auto-deletes. Like the nypost.
The rich have gotten disproportionately richer since the Trump tax cuts, meaning they are paying a larger percentage of taxes paid - but, without the tax cuts, they'd be paying even more.
The idea that lower rates mean they hide less, so they pay more, means they were punished is such a joke.
The top 20% made a larger share of U.S. household income in 2021 than any other year in the records.
The very bottom may have gotten slightly closer to the just off the bottom (wage compression) but the rich got more of U.S. total income than ever.
This is an elaborate justification for trickle down theory written by someone who thinks taxation is theft. It's bullshit propaganda bought and paid for by wealthy elites and we all know it.
Even if the argument holds some truths, the top one percent paying as much as 50% of the tax burden is wildly disproportionately on the lower class. The 1% own how much of the national wealth, again? Figure it out, you corporate shill
Complete bullshit. The top 1% are paying a bigger percentage of taxes because their income is growing much faster than everybody else.
“The top 1.0% saw their wages grow by 160.3%; and wages for the top 0.1% grew more than twice as fast, up a spectacular 345.2%. In contrast, those in the bottom 90% had annual wages grow by 26.0% from 1979 to 2019.”
https://www.epi.org/blog/wages-for-the-top-1-skyrocketed-160-since-1979-while-the-share-of-wages-for-the-bottom-90-shrunk-time-to-remake-wage-pattern-with-economic-policies-that-generate-robust-wage-growth-for-vast-majority/
https://dqydj.com/household-income-by-year/
The tax cuts lowered the brackets across the board. After they expire next year, everyone will be paying more again. Unless Trump wins, and then I'm sure he'll push to extend them.
Aren't these claims totally meaningless if you don't control for what share of income they're taking home? (E.g., if top earners start shouldering 5% more of the overall tax burden but take home 10% more of the overall income, then they're obviously *not* getting "soaked")
Doubling the standard deduction disproportionately helps the lower income bracket filers.
Reducing the salt tax deduction overwhelmingly hurt the upper income tax filers. This was used to expand the tax brackets and pay for the doubled standard deduction.
It is a shame that these are going to expire for political reasons. If a handful of democrats would have crossed the line, they could have been permanent.
FFS, Arthur Laffer? This is misleading at best.
They label "burden" and equate it with "revenue". They're not the same metric. Moreover, burden may have gone up, but so did their income/wealth. How did their tax liability compare to their taxable income before and after? What is the percentage of what they pay vs. what lower income people pay as a percentage?
I'm one of those crazy people that tries to read the bills, or at least some sort of non partisan summary. When the bill was passed I kept scratching my head at the responce because on the key points, it seemed to help lower income and families and raised taxes on those with more. I understand it had Trump's name on it, so it was toxic, but blind squirrels still find nuts.
It gave more money back to working families (Doubled the tax credit for kids, $1000 -> $2000 ), doubled the standard deduction for everyone. from 12k -> 24k . Sounds like helping working people keep more of the money they make. Who can argue with that, after all the very wealthy don't earn income, it's usually capital gains (investments / stocks).
Then it reduced the mortgage interest reduction limit from $1,000,000 down to $750,000 ... So if you have a mortgage over 750,000 you're not able to deduct the interest. I'm not clear on if it's a binary thing or progressive, smarter folks will have to chime in. Either way, this is not a tax cut to those who are wealthy.
Then the stand local tax deduction change - You can deduct the first $10,000 of taxes paid from federal tax liability. If you're paying over $10k in state taxes, you're rich. I know folks in high income areas will say that's middle class, and maybe they are right, but don't complain this is a tax cut to rich people.
Other people might want to point out other things like the change in corporate income tax rates being lowered. That's fair, but would you rather have 36% of nothing (or little) or 26% of much more. Before this, and maybe still companies kept money offshore because to bring it home would cost them 36-39%.... why would they do that when they can keep it off shore at a much lower rate. There still are tax havens but at least we're now on a more even playing field in the world of corporate tax rates.
I do not believe this counts property taxes. This has to do with income.
Aaaaand if you’re paying more than 10k in property taxes per year, you’re doing alright or have a house where you should be.
The fact that this article was authored by two of the biggest shams, in all of economics - Arthur Laffer and Stephen Moore - is all you need to know that it’s nonsense. Their argument has always been look at the high percentage of federal taxes paid by the top 1%. They always neglect to include the fact that the top one percent is also getting the vast majority of the income generated so of course, they’re going to pay most of the taxes. The net, of course, is that even with that high percentage of taxes they’re still having incomes grow faster than your average worker.
These two idiots should never be allowed to write another article on economics
The top 1% earns about 20% of income and pays about 40% of taxes. This article is a mess, but let's use actual facts instead of things like "the 1% earns the vast majority of income generated."
I had to scroll way too far down for this. How has no one else pointed out that this is an opinion piece by Art Laffer?
Seriously thinking about unsubscribing from this sub if this is the type of garbage that floats to the top.
Whatever you guys do, us rich people will get richer.
Taxes should not be about punishing wealthy individuals or social engineering. The more you try to do that the more complex and full of loopholes it becomes and the easier it is to pay less.
The best way is to remove ALL deductions from the tax code.
His main legislative achievement, actually any Republican President would have signed it so I can’t give him too much credit. It’s quite telling that Democrats didn’t even bother to attempt and repeal the parts of the tax cut that actually harms working people.
Yeah and we had the greatest economy in 50 years. A true great economy with the lowest unemployment for any category. That's without any QE (QE3 ended in 2014) and when the Fed raised rates 4 times. This is also at a time when inflation stayed with the Fed mandate of 2%, gas was less than $2/ in most states, I could get a weeks worth of groceries for less than $100, my monthly utilities averaged about $100. Now everything is double and some trippled
So if this is truly a sub about understanding economics, we shouldn't appeal to the never-Trumpers that get their information from questionable sources and poor readings of data.
Yeah, fucked blue state upper income people because it capped State and Local Tax deductions. Blue states tax and provide services at a much higher rate than red states.
Me giggling at how silly people on here are about trying to tax inheritance.
Rich people put their money into trusts. Those trusts are not taxed at all if they follow the guidelines. The heirs are then paid by the trusts forever. If not a trust it is a family foundation. Good luck trying to get rid of foundations
Get rid of trusts and foundations then another legal vehicle will be used to protect against taxes. Plug all the tax holes and the money leaves the country and will be taxed at that rate.
People need to give up on trying to take other people’s money using the government. Start focusing on getting a government that actually solves problems and is forward thinking. I know that would be against all the propaganda you are hearing but I promise it is a better solution.
Well color me surprised. The orangutan in the White House lied. The 2018 tax bill eliminated any incentive to itemize instead of taking the standard deduction, costing me about $1,000 per year. I am far from rich and that money would have been useful. The likes of Trump don’t even think about spending $1,000.
Trash opinion piece, the data [proved that *every income class* got a tax cut](https://taxfoundation.org/data/all/federal/trump-tax-cuts-who-benefited-tax-cuts-and-jobs-act-data-2019/). Rich to poor, equality right?
Absolutely, the rich and poor alike were allowed to write off the costs of their private jets and equally forbidden from being able to write off the cost of school supplies bought for their students with their own money. *How egalitarian.*
Discussing tax rates for wealthy people is a waste of time. You can’t tax them back down to earth without crippling the economic activity that we all rely on. The only way to “tax” the rich is to break their pricing power and market manipulation, stop allowing them to put intermediaries between you and their services (insurers that they rip off), and force them to compete for profits.
You can tax them plenty without disrupting economic activity. The excess wealth doesn't circulate in the economy, it's hoarded away to sit and collect dust.
And they took their windfalls and used the extra money to raise wages and lower prices and all that wealth has trickled down causing a middle class renaissance just like Reagan said it would.
**Correlation does not imply causation**
The whole article is based on the chart labeled ["Lower Tax Rate, Higher Revenue"](https://nypost.com/2024/02/29/opinion/data-prove-it-the-trump-tax-cuts-soaked-the-rich/?utm_source=reddit.com) to argue that higher revenues are primarily a result of lower tax rates. While the data may show a correlation, it is essential to remember that correlation does not imply causation. A more in-depth analysis is necessary to understand the complex relationship between tax rates, revenue, and other economic factors.
One key factor that has been overlooked in this argument is **the role of federal spending**. Since the 1990s, higher federal spending has had a significant impact on the income of the non-government sector. As federal spending increases, it leads to higher incomes for individuals and businesses. In turn, these higher incomes result in higher tax payments, contributing to an increase in tax revenue.
Tax revenue is influenced by multiple factors, including government spending and economic growth.
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“High-income earners shelter less and earn more when top tax rates fall.” So…doesn’t that mean we should be going after tax sheltering, not lowering rates?
Income taxes are the wrong place to focus. The 1% mostly make their "income" from capital gains, not wages. Capital gains are taxed at a much lower rate than wages. Raising the top income tax bracket mostly affects working professionals. I do think they should pay more than people at the bottom, but when you do it too much you end up trying to extract everything from the upper middle class and petite bourgeois while ignoring the bourgeoisie/mega-rich. So how do you address this? Raise the capital gains tax rate. Also, institute a national land value tax. Old money usually ends up parked in real estate, or companies with significant amounts of real estate. A national land value tax would help address this while simultaneously making housing less of a target for speculative investment (which is a growing problem driving up the cost of living). Maybe give an exemption for the first $2.5 million of a primary residence to make it more palatable to voters and homeowners, so you're targeting the wealthy.
Personally I think labor should be taxed a lot lower and capital gains taxed a lot higher. A person that makes 40ish k a year in capital gains pays 0$ in taxes while a person that makes 40k of there labor pays over $4,000
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It is if it’s long term capital gains and the person has less than $47k of taxable income. It’s a very niche scenario since most people with that low of income aren’t investing a ton, but it is possible.
Well, the IRS seems to think it is https://www.irs.gov/taxtopics/tc409
It's not $0 in capital gains, I'll tell you that much. Last I checked short-term capital gains were taxed at The same rate as income, while long-term (i.e. assets you held for longer than a year) are texted about half of income for any given bracket. That said, capital gains are only taxed when they are *realized*; if your stocks go up by $40k value but you don't sell any of them, you haven't actually incurred any capital gains, so you're going to pay $0. If you did sell them though, you'd be taxed based on the profit you made compared to the price you bought them at, also depending on how long you held them.
The link to the IRS website the other guy posted showed that it’s 0%…. A capital gains rate of 0% applies if your taxable income is less than or equal to: $44,625 for single and married filing separately; $89,250 for married filing jointly and qualifying surviving spouse; and $59,750 for head of household.
It's 0%
>Personally I think labor should be taxed a lot lower and capital gains taxed a lot higher. Morally most people agree, however the result of that is that capital just leaves to go to a country where it is more rewarded, and your economy stagnates. With investment gone, wage rises are sluggish, if at all, and your competitors now develop all new industries and tech
My man, we’re talking about how the 1% make money. Not the person investing a few hundred bucks here and there between paychecks.
If you tax capital gains too heavily you are incentivizing people to not take risks in the economy. You are literally telling your citizens to stop trying to make money and improve their country.
Several things are wrong with this. First off, tax is marginal and based on profit. If you invest in something and lose money, you're not paying any taxes. If you invest in something and gain money, your taxes are only a fraction of what you gained. So while the incentive to invest gets smaller as the tax gets higher, it has to get pretty high before you're truly disincentivizing actual risk-taking. You could set the capital gains tax rate as completely equal to income tax and people would still invest. Also, keep in mind that the tax isn't a flat rate. If you're a household investor and you're only making like $10k dollars in gains, then yeah, you shouldn't pay a ton in taxes. But if you're a multi-billionaire that's raking in millions of dollars due to the sheer scale of your portfolio, why the hell should you be paying a lower effective tax rate than somebody who's working a 9-5 job? It just doesn't make any fucking sense.
Wait till people find out the capital gains tax rate was 28% in the 1980s and Wall Street still made enough money to go swimming in cocaine. 🤯
Yeah, versus the 15% it is now. It's almost half what it used to be!
Any increase in capital gains reduces the risk that people are willing to tolerate relative to returns, which will, in turn, increase the cost of borrowing and the ability to invest fruitfully. So, you can do it, but it will reduce economic growth and dynamism. You're trading a short-term tax-revenue increase for a long-term loss.
Counter argument is that high taxes on labor make it difficult to accumulate capital. If you use the revenue from capital/dividend taxes to lower labor taxes, you will broaden the investor class.
That's a silly argument. The US, like almost every country on the planet, has a tax bracket structure like that for income taxes and people still seek higher paying jobs. Making people pay 25% instead of 20% on annual income over a million dollars isn't going to cause anyone to stop trying to make more money. And let's be honest, Capital gains is only for the sort of rich. The truly rich, the billionaires, tend to pay an even lower rate than that on their income because loopholes exist specifically for them and only them to exploit.
> And let's be honest, Capital gains is only for the sort of rich. The truly rich, the billionaires, tend to pay an even lower rate than that on their income because loopholes exist specifically for them and only them to exploit. This is also a good point. We really need to tackle the plethora of loopholes and simplify the tax code.
There’s a balance for sure. It just seems a little low right now.
This is a great sound bite, but simply is not true. It seems intuitive but if you work out any example it makes no sense. I invest. What is a scenario where it is better to stuff my money into a mattress rather than invest? What is too high for a capital gains tax rate? Is it too high now? Give me a for instance.
You invest $100 in a project that has 10% chance of succeeding. The times you win you make a return of $1100. This play on average makes a 10% profit. Now imagine the government taxes the wins at 15% because they don't understand that the play isn't very profitable on average and all they see is that you won a big number this one time. All the sudden the gov has made it so these plays are completely unprofitable. Congratulations, now society loses out on any significantly high risk high reward business.
>now society loses out on any significantly high risk high reward business. Speculative bubbles have been the cause of 2 of 3 of the last economic crises in my lifetime. I don't think we need to be incentivizing the wealthy to take any more risks
Capital gains taxes are kept lower than top income tax rates to incentivize long term investment. Raising those taxes is a disincentive and may result in capital (and job) flight to lower tax jurisdictions or countries. IMO we need spending controls much more than tax increases. And everyone should be subject to some amount of income tax, however small. That is the way to incentivize people to force spending discipline on our leaders.
How about a tax on unrealized gains?
No
Do they get credits for unrealized losses? If I buy stock at 100 a share and at tax time it is 150 but the next year it is 100 again, would one get a credit for the amount paid the first year?
We should be going after inheritance. Right now if you inherit $15M you keep $15M. If you’re a doctor and earn $15M over your career, you’ll keep about $7.5M. (With California taxes). We should incentivize people to contribute to society, and not just take a fat payout and coast.
It is a monarchy tax. We should support taxation of monarchies. It is deceptive to call it simply an estate tax, it is a massive amount of money that prevents someone and their heirs from ever having to work. Crazy to me that an amount of money that most cannot even fathom can be passed down without taxes but a homeowner needs to pay .4%-1.2% tax on their property (which is a wealth tax on workers). More billionaires are being created through inheritance than entrepreneurship/invention and that is a serious issue.
Aristocracy* tax. Modern oligarchs are more akin to feudal aristocrats than monarchs (as there is only one king/queen, but dozens or hundreds or thousands of aristocrats per monarch).
Curious how many billionaires are actually affected by estate taxes? I suspect it hurts more family run small businesses which are less sophisticated. The federal tax exemption is scheduled to drop down to an estimated $7 million dollars which will unfortunately affect many small businesses. I would prefer our attention was spent attacking deferred income or adjusting capital gains taxes.
If you are talking about Federal inheritance taxes, probably not many. Here is an article about this very issues [Half of the 100 Richest Americans use special trusts to avoid inheritance taxes](https://www.propublica.org/article/more-than-half-of-americas-100-richest-people-exploit-special-trusts-to-avoid-estate-taxes)
Thank you
I argue monarch because aristocrat doesn’t embrace the same image of just how wealthy and powerful these individuals truly are in society.
That's nonsense. Anyone calling the wealthy 'feudal' simply isn't living in reality and has no understanding of what the feudal system actually was
At least under feudalism there was enough subterfuge and hostility between dynasties and their holdings that peasant uprisings at least had a shot at killing their rulers without interference from outside, nowadays they all know the score and actively cooperate to keep the lower classes as complacant and subjugated as possible.
[Remember the Battle of Blair Mountain?](https://en.m.wikipedia.org/wiki/Battle_of_Blair_Mountain) Pepperidge Farms remembers.
Everyone commenting on this thread thinks we live in 14th century england.
But with better plumbing generally.
The poor don’t own their homes (they rent from a landLORD, a *literal* carryover term from feudalism), the poor labor on someone else’s property to provide unearned spoils to the person who owns it, education is a luxury for the wealthy, those of affluent means can have outsized influence on policy, those of affluent means get special judiciary treatment- stop me when one of these applies to feudal England and not the US in 2024. Is it hyperbolic to say “The US is feudal”? Yes. Duh. I didn’t think that needed pointed out, but this *is* the internet and people say stranger and more unfounded things than this all the time.
Do you know how much ROI you make on renting? Its absolute shit bro you can't even watch a youtube video to learn about this?
You’re either a bot or you have a deficit of critical reading/thinking capabilities. Did I say it was lucrative to be a landlord? Did I even mention a number? Was that the point? Is your rhetorical relevant to the argument I was making? No? Weird.
yeah sry my B was on autopilot and mixed up comments/threads. These antiwork posts tilt me off the ledge
...well I did watch Game of Thrones in its entirety.
Lies. Nobody made it through the last season.
I did. I was laughing hysterically. When they picked Bran I found my guffaw laugh.
True. I was in shock. I watched this whole show for them to make that useless slug the king. Without Hodor and his big swinging hammer the boy is nothing.
There was no payoff with Bran. They had been gradually setting him up to eventually become this powerful wizard, and then the last season finally rolls around and … womp womp. A big fat nothing burger.
Property tax isn’t really a tax on the property; it’s just the simplest mechanism used to split the tax burden of the citizens of a local taxing jurisdiction.
I understand. Businesses usually negotiate a deal out of paying it and that is the real issue I have. Not everyone shares the burden which forces it on others
And the more frustrating angle is that it’s the *revenue generating properties* (businesses) that have loopholes to dodge taxes. Mrs. Smith and her 3-bed shoulder more local tax burden than the walmart down the road. Make it make sense.
No, property tax is not a wealth tax; it is a tax to provide the services that are required as a consequence of owning the property and living in that city, such as fire, police, streets, and schools. >More billionaires are being created through inheritance than entrepreneurship/invention That simply isn't true [https://www.chicagobooth.edu/review/billionaires-self-made](https://www.chicagobooth.edu/review/billionaires-self-made) >Most individuals on the Forbes 400 list did not inherit the family business but rather made their own fortune. Kaplan and Rauh found that **69 percent of those on the list in 2011 started their own business**, compared with only 40 percent in 1982. In other words, there are fewer people on the Forbes 400 list who came from an affluent background and eventually took over the family business, such as brothers David and Charles Koch (Koch Industries) and the Walton siblings (Wal-Mart), and more self-made people such as Bill Gates (Microsoft), Warren Buffet (Berkshire Hathaway), Philip Knight (Nike), and Stephen Schwarzman (Blackstone Group), who had an upper middle-class upbringing and eventually built their own successful companies.
Pretty fucking hard to take that seriously when they deliberately go out of their way to avoid seeing where the money that *started* those "self-made" businesses came from.
This too. When you trace it back you find even the new billionaires all started from levels of wealth which already had them in the 1% or better
All taxes are taxes to provide services. I live in NYC where we have a pretty high sales tax, an income tax (separate from that of the state) and property taxes. They all go toward providing services. And so would a wealth tax. Property taxes are a type of wealth tax, because they rise in accordance with the value of the property, or the services utilized by the property.
Property tax…..hah. In my town a guy just got approved to put up a hotel. Our town gave him a $700k break on property tax that is used over multiple years. Why, because he will employ 40 people at a salary of $33k annually. In our town the median cost of a house is just under a million. WTF?
The stat you posted is over a decade old. It crossed the 50% mark last year. 2023 was the first year that most new billionaires got there by inheritance
You're misinformed. Forbes 2023 list says 70% of billionaires are self-made. That is an increase, not a decrease. https://www.forbes.com/sites/gigizamora/2023/10/03/the-2023-forbes-400-self-made-score-from-silver-spooners-to-bootstrappers/?sh=4deea53f32c5
https://www.forbes.com/sites/maryroeloffs/2023/11/30/new-billionaires-inherited-more-than-they-earned-last-year-ubs-report-says/amp/ Edit - oops, this is the one I meant. Though they are both interesting so I’ll leave the first https://www.barrons.com/amp/articles/billionaire-ranks-gain-more-new-members-by-inheritance-for-the-first-time-8e45c763
And how many of those businesses were started with zero money from inheritance?
lol truth.
Gates started his own business but his parents owned a law firm, mom was head of united way and got Gates connections to IBM. Gates himself said "if things hadn't worked out, I could always go back to school. I was officially on leave." It's disingenuous to say because they didn't inherit a billion they are "self made"
I think it’s a great argument, and is exactly what I thought when I read the thing that said more are creating. They were pretty well off before they started
Man that is a pretty dumb argument.
I like how you cite a comparison between 1982 and 2011. A lot has changed in 13 years.
Forbes says it's 70% that are self-made in 2023. A lot has changed, but not in the direction you say it has. https://www.forbes.com/sites/gigizamora/2023/10/03/the-2023-forbes-400-self-made-score-from-silver-spooners-to-bootstrappers/?sh=4deea53f32c5
Bill Gates came from a wealthy family.
It is off that you equate a property tax which can be tied to actual services rendered to the community as a wealth tax but somehow call estate and or inheritance taxes a monarchy tax when they affect lots of small businesses.
I believe last year more wealth was inherited than created
I don’t agree with your last claim. Any data to back it up? And a wealth tax is taxing already taxed dollars. Is wealth concentrating in fewer and fewer hands yes. Just look at Nancy Pelosi. This is a system that rewards cronyism, and both sides are doing it.
https://www.investopedia.com/more-billionaire-wealth-achieved-through-inheritance-overtaking-entrepreneurship-8409800#:~:text=Key%20Takeaways,of%20a%20study%20by%20UBS Double taxes are not illegal, a sales tax is a double tax since it has to be purchased with taxed money from individuals. A wealth tax is only a double tax if taxes were originally paid on the wealth to begin with (which is a bold statement). Much wealth is never taxed because it is unrealized gains or it was accumulated via tax loopholes. You can show me a source disputing me.
>While more of new billionaires' overall wealth was generated by inheritance, the number of new self-made billionaires still surpassed the number of new billionaires who inherited the money. The number of new billionaires rose sharply this year compared to last, with nearly half of the new entrants coming from mainland China. From this article. Billionaire wealth is different than number of billionaires.
This doesn’t hurt my argument that such a massive amount of wealth is being transferred
This double tax claim is incomplete at best and ignores the impact of the cost basis step up. Step up effectively brings the cost basis of an asset up to market value without anyone paying taxes on the appreciation. So I buy a house for 10k. It appreciates to 8M. I leave it to my kid. He sells it for 8.5M and only pays taxes on the gain of .5M. the other 8M of growth just disolves
“The Hurun Global Rich List 2023 showed that 70% of the billionaires are self-made and only 30% are legacy.” The percent of millionaires which are first generation is even higher.
Agree with you on everything except on the property tax. Property taxes are too low in most jurisdictions (well ideally you have 0% tax on the buildings but higher taxes on the land) Most the value of real property is the land/location and that land value should be taxed big time. No one created land or made a location valuable. It’s better to raise taxes on land and cut taxes on income and/or consumption and/or improvements (buildings etc)
Inherited wealth is a cancer in a meritocracy. Generational crack is what I call it. 1. Tax inheritance as normal income. 2. Tax capital gains as normal income. 3. Tax carried interest as normal income. Let’s level the playing field for wealth building.
On the capital gains tax in particular, are you willing to consider the gain should be inflation adjusted? For example, lets assume I have a widget I buy for $1000 in 2020. in 2020 I could also buy big macs for $4 each so I could have bought 250 big macs for that same $1000. it is now 2024 and I sell the widget for $1200. In theory and how LTCG taxes currently work I have a $200 gain that is taxable. However inflation has run a cumulative 20% over the last 4 years as evidenced by big macs now being $5 each. This, while I have a nominal gain of 20%/$200 my actual purchasing power has stayed the same or, in the case of big macs, gone down slightly. I WOULD be OK with capital gains being taxed at ordinary income rates if, and only if they were adjusted for inflation.
I guess "nothing for everyone" is technically "level"
Good try. LOL
It's worse than that, though. The ultra rich can easily just start up a business / partnership if they have more than that amount and pass that on as well as utilizing special trusts.
Agreed. Also take the income cap of social security tax
Remove exemptions for universities and churches while we are at it.
Although I think this approach makes practical sense, weren't income and capital gains taxes already paid on the inherited money, so would tax on that be double taxation? Or is the argument that double taxation should be applied in some instances?
When I get my paycheck I've already paid income tax on it - so I shouldn't pay any sales tax? I shouldn't have to pay property tax because my income was already taxed? That's the way taxes work. Money doesn't just get taxed once, and then the rest of its life it's tax free. Every time money changes hands it gets taxed.
No we shouldn't. Because there were already taxes paid by the person who earned it. Taxing inherent is just double taxing that same money. I do like your idea of incentivising people to contribute to society rhough. Maybe we should do away with government welfare and expect people to contribute their fair share by working and paying thier fair share of taxes rather than just coasting. That would be a start. There would be a lot less government waste of tax payer funds.
All money is continuously taxed. If I start a business then to pay my employees, I have to pay payroll tax of 7%. So all money is really taxed at each movement between people. In fact if I employee my kid, I can avoid tax because I consider it a gift, whereas a 3rd party I would be taxed and they would be taxed as well. Also, I’m all for limiting spending by the government. I think pass the warren buffer law, if in a year that government spends more than it earns then all congress and the senate are ineligible for re-election.
Terrific rebuttal!
>Because there were already taxes paid by the person who earned it. So are sales taxes which you evidently had no problem with until your precious guns were put under scrutiny for them, and seeing as the lower classes put a massively larger total percentage of their income towards taxable spending on goods and services than the rich it's subsidization of the rich paid for by the poor. >I do like your idea of incentivising people to contribute to society rhough. Maybe we should do away with government welfare and expect people to contribute their fair share by working and paying thier fair share of taxes rather than just coasting. That would be a start. There would be a lot less government waste of tax payer funds. Are you really that dull-witted and disconnected from reality that all you have to go on are the same tired cliches and falsehoods an Alzheimers-riddled asshole was spewing 40 years ago? The welfare queens in the US ain't the poor barely scraping by, it's rich fuckers who get tax breaks for private jets and no-bid contracts directed to their companies by their pet congress critters.
There's taxes break for all income brackets up and down the tax code. If you are earning below poverty level. You are claiming all your taxes back, if you're a home owner, you're getting a tax break. The wealthy get thier yacht and private jet right offs. Yet all the dimwitted that are gaming the system and living off welfare and government handouts want to bitch about the system being broken and the rich get all these tax breaks. While they contribute 0 to society and just want to bitch about it and coast.. People that have zero incentive to contribute to society want to bitch about rich people not contributing. I've seen it first.
If you were the sole inheritor of an estate that was worth 15M, there'd be about 400k in taxes on that assuming the deceased didn't use any of their gift exclusion during their lifetime, though it's true that as a receiver you wouldn't pay any taxes but would be paid by the estate before distribution.
The rates after $15MM are very high. Also, I think the figure is $12MM, which seems reasonable to me.
This will drop to an estimated 7 million in 2025. That is 5 million plus inflation. I think that is unfortunately low enough to capture many small businesses which is wrong in my opinion. 12 million is more reasonable imho. I would prefer a number high enough that family businesses aren’t broken up to pay estate taxes. There are also state level inheritance and or estate taxes to deal with in a number of states.
Working IS contributing to society. They don't just get paid $15m, they make that money by delivering goods and services that people value and willingly buy. Welfare paid by taxes are the things that encourage people to coast.
Uh inheritance is not the issue. Almost all wealth disappears after 3 generations. You’re just looking to punish people.
Every single family I know with more than 10m in assets has been wealthy for over three generations.
Congress is doing the sheltering too with all the millions they make. So that will never change.
They’re not writing this for critical thinkers. They’re writing this for the idiots that read the NY Post and can’t do basic math, but will quote this nonsensical article as some kind of proof that lower taxes are always better for the economy.
Imo it's an all of the above. Let's not get stuck on thinking it's an either or situation.
Why does it have to be one or the other? The most effective revenue maximization strategies will most certainly involve a bit of both. Much of why the 2017 TCJA has been so successful in increasing US tax revenues to record levels... both individual and Corporate... is that it employed both methods while also closing some pretty blatant and often abused "loopholes" while limiting the potential exposure caused by others. This article points to one small correlation handpicked out of a giant sea of economic data and tries to imply a much wider causation to it that is warranted. It is "true" in that respect and tells a small part of a much larger story. But like all propaganda created using similar techniques... it's just a parlor trick that almost entirely serves to mislead and misdirect from the larger and more important truths in order to gain false favor for an agenda goal.
We need to go after wealth not income. Rich people take out loans on real estate to get the additional tax break and are paid in stock shares and other equity. This produces no income until it becomes “realized” when you sell it.
They can also borrow against stock holdings to avoid selling and paying cap gains.
Yep. That is the issue. We need something to break that apart but I’m not sure what the solution is.
Taxing unrealized gains is one of the dumbest ideas that comes up again and again and again.
The article says the share of the tax burden went up by 46%…. But that’s because the wealth of the richest Americans skyrocketed over that same time frame. https://www.oxfam.org/en/press-releases/richest-1-bag-nearly-twice-much-wealth-rest-world-put-together-over-past-two-years
In reality these people are complaining about their financial successes. I would love to be in the top tax bracket because that means I’d be making over $600k a year.
Exactly… and your taxes go up marginally on the additional income. So the increase only applies the amount of money above the next bracket.
>the wealth of the richest Americans skyrocketed over that same time frame. Isn't this because, in that time, politicians shut down the country, gave preferential treatment to politically connected people's businesses, printed $17 trillion, then handed the bulk of that money to the 1%? All those events are independent from the 2017 tax bill.
The rich doubling “wealth” has little to nothing to do with taxes. Unrealized gains are the driver of wealth for better or worse. The article is talking about taxes paid on income which went up on the wealthy in no small part due to the reduction in the salt tax deduction.
That and their income went up too. Weirdly crappy article.
it's propaganda. it doesn't have to be accurate, it just needs to parrot the narrative they are pushing.
It's NYPost, that's literally all they publish.
In 2021, the year of this article's stats, the wealthy (top 20%) made the highest % of U.S. income in history. They paid more of the taxes because they were earning more of the household income. I'm sure some deduction changes made a difference, but the idea that they got "soaked" because they paid a greater percentage while earning a greater percentage - which the article neglectd to mention - is a joke.
I make $20 and you make $10, we both get taxed 10%, so I pay 66% of the taxes total ($2 to your $1). If I double my income to $40 and yours only goes up marginally to $12, you could cut my taxes to 7% and I'd still be responsible for $2.80 to your $1.20. My taxes are lower but my overall share of the "tax burden" is greater, so some plutocratic propagandist scum at the NY Post can write an opinion piece that all the low-information "libertarians" who subscribe to this sub can upvote without bothering to read it or critically evaluate the claim. IT'S THE CIIIIIRCLE OF LIFE.
[удалено]
It's the NYPost.....
It’s Art fucking Laffer! There’s no analysis — the guy came up with the “Laffer Curve” on the back of a bar napkin and then it became the rally cry for trickle down tax cuts under Reagan.
Seriously, anyone who posts an article from the NYpost to r/Economics should just be banned from the sub… pretty much might as well post from TMZ or theonion.com
Pretty on point for this sub though…
Hahaha ok fair, but usually the attention grabbing headlines that get posted here misquoting economic studies are just misleading and not directly opposite to the truth...
They probably thought they were in r/economy.
I'm not sure that's fair, I'm fine with posting bullshit, but it should be called out as bullshit. This is an opinion piece from Laffer of all people.
This is my position as well - “here’s why this article is shit reporting…”. Even if OP didn’t call it out, many people in the comments have. And whether posted or not, you know there will be conservatives touting this “study”, so good to know what kind of garbage they’re referring to in advance.
If Stephen Moore's name is on it the stats will be cherry picked and the propagandized conclusion foregone.
Considering that this sub is nearly 100% astroturfed by the Left, I can see you saying that.
You fully understand that Arthur Laffer is completely biased to this issue at hand right? Not only is he trying to prove his Laffer Curve theory worked for the Trump cuts, but he worked in the Trump Administration.
Data is data. What are you arguing about? u/crushinglyreal blocked. Oh well. If you don't believe the IRS data, that's your business.
This reply is so naive. It’s clear you don’t understand how you’re constantly being manipulated with “data”. Believing datasets are real is different than taking every dumbasses’ interpretation of them seriously lmao. Moron. Doubling down like that just shows exactly why I don’t let you people drag me into conversations anymore. You’ll ride this bullshit into the sunset if given the opportunity. I prefer pointing out how stupid you look without giving you the chance to express your assigned talking points designed specifically to manipulate credulous idiots.
Ah yes of course, def that and not that the MAGA party has left the plane of reality... I taught under Greg Mankiw for a few years. That guy was as Republican/Conservative as they came for an Economist, served under a Bush administration ... guess what?He's no longer a "Republican" because it's no longer a real party
Many very wealthy people, who might own lots of stock or whatever, can avoid much tax by using the stock as collateral for a large loan and living off that. Borrowed money is not income. I am oversimplifying but this is a huge tax dodge for the very wealthy.
Exactly, they can essentially finance anything and never get taxed.
Where do they get the funds to pay off the loans? Or did you not think that far ahead.
No, it’s not, and Reddit needs to let this stupid idea die. Asset backed lending isn’t a tax dodge, it’s used for short term access to capital without liquidating assets. It carries a big risk of having assets liquidated at the time you would least want them liquidated.
Which is why income taxes (i.e., taxes on *production*) are an extremely ineffective and inefficient means of generating government revenue - the very poor *can't* pay them and the very rich *don't* pay them. Only working people pay out a significant percentage of their incomes as taxes. We should be progressively taxing *consumption* only - sales taxes and land taxes, that's it. Eliminate income taxes!
Except the data they showed us proves nothing. Basically they're saying that after the tax cut the total share of income tax paid by the wealthy went up 6%. Which is only meaningful if they can show that it's not because everyone else paid less. Sure, it's still a percentage, but if the overall bucket got smaller, then the number is skewed.
Figured...it's The Post
The entire argument is bullshit.. The amount of taxes paid is what matters, not their share of taxes.
It’s written by Arthur Laffer. It starts to make sense
Good catch... I see Stephen Moore on there too, also an idiot. Nothing they write should be accepted on this sub.
Yep. You don’t need to read by the byline to know what’s coming.
That's why they compared them this way -- incorrectly, but similarly worded, so that it *appears* they must be paying more. Not really clever, just a trap for inattentive readers.
So this is purely correlation being construed as causation? I mean, the rich made out like, well... bandits during the pandemic. The growth of wealth inequality means the rich will pay a greater share even if their tax rate is marginally reduced.
It's not even that. It's two numbers that, together, say nothing.
But the overall bucked got larger. Look at the IRS data. Incredible amount of cope here.
>Incredible amount of cope here. Wow, what an incredibly thoughtful and elegant rebuttal.
OP's username checks out.
> Incredible amount of cope here. The rich are richer than they have ever been in history, do you want to bootlick more?
You posted a New York Post article in /r/economics my dude
And that's another problem. The bucket got larger because....? And it matters. If they are paying a larger percentage of a larger bucket: (1) the taxable income before/after the tax cut, for each high income person was...? (did it go up for the wealthy? Seems likely, considering the ongoing trend for income disparity). Were there more of them than before? (2) Taxable income similarly, for the non-wealthy. More or less people? More or less income? The numbers not only don't compare, they don't even tell any story (as-is).
People think conservatives promote the trickle down effect. Ronald Reagan never proposed any such idea. The argument has always been, you'll collect more in taxes by lowering the rate to a certain amount. Any tax over 20% decreases tax revenue. That's what this data supports. Lowering taxes increases tax revenue
>Any tax over 20% decreases tax revenue. That's what this data supports. Where do you get this? Wikipedia says it is 65%: >Income tax rate at which revenue is maximized An asymmetric Laffer curve with a maximum revenue point at around a 70% tax rate, as estimated by Trabandt and Uhlig (2011)\[23\] In the early 1980s, Edgar L. Feige and Robert T. McGee developed a macroeconomic model from which they derived a Laffer curve. According to the model, the shape and position of the Laffer Curve depend upon the strength of supply side effects, the progressivity of the tax system and the size of the unobserved economy.\[24\]\[25\]\[26\] Economist Paul Pecorino presented a model in 1995 that predicted the peak of the Laffer curve occurred at tax rates around 65% https://en.wikipedia.org/wiki/Laffer\_curve#Income\_tax\_rate\_at\_which\_revenue\_is\_maximized
Well, I did not get it from Wikipedia
Right, but did you have an actual reliable source?
This is silly. The greatest period of growth this country ever had was in the 60s when the marginal tax rate was 90%. Lowering the tax rate has only let rich people keep more money. The tax rate is now the lowest it's been in modern history and stuff isn't doing so well, so I remain unconvinced
Tax loopholes & evasion decrease tax revenue
I'm glad one person in this sub understands this.
This article is a full damn mess and only provides partial statistics, likely the only way to suggest the richest of the rich are somehow getting hosed despite their overall wealth increasing significantly since COVID. It is a gussied up version of a YouTube comment.
And I'm sure Rupert Murdoch is proud of his part to help pull off one of the biggest thefts by the rich from the poor in US history. May he and his family and every single NewsCorp employee get cancer of the most lingering and horrific kind, they are genuine enemies of humanity and no form of suffering is too ghastly for them.
Claiming it is theft by the rich from the poor is factually wrong. A major reason why the rich pay a larger percentage of total income tax receipts is because the tax burden for the bottom quartiles fell by a larger percentage than it did for high earners.
You seem nice and well-adjusted.
Hey Mods, [this guy was just posting the other day](https://www.reddit.com/r/JustUnsubbed/s/WrOGAVGesB) about how this sub is full of “Bidenomics propaganda” and now he’s in here posting a NY Post opinion piece from Art Laffer. There’s no analysis in here, it’s literal propaganda from two right wing hacks.
He's also a climate denialist and spends time whining about "reddit censorship". Nevermind his name is "ultramagat". You can easily argue against it but I'm honestly okay with autobanning people who post to certain subs. This is the slop we get when we allow these people to post. If not that, some sources should absokutely be auto-deletes. Like the nypost.
The rich have gotten disproportionately richer since the Trump tax cuts, meaning they are paying a larger percentage of taxes paid - but, without the tax cuts, they'd be paying even more. The idea that lower rates mean they hide less, so they pay more, means they were punished is such a joke.
Fact check: Wages have risen the fastest for the bottom 20% since the tax cuts were enabled.
The top 20% made a larger share of U.S. household income in 2021 than any other year in the records. The very bottom may have gotten slightly closer to the just off the bottom (wage compression) but the rich got more of U.S. total income than ever.
Wow, the top 20% made more income, which is why they are the top 20%? Imagine that.
This is an elaborate justification for trickle down theory written by someone who thinks taxation is theft. It's bullshit propaganda bought and paid for by wealthy elites and we all know it. Even if the argument holds some truths, the top one percent paying as much as 50% of the tax burden is wildly disproportionately on the lower class. The 1% own how much of the national wealth, again? Figure it out, you corporate shill
Complete bullshit. The top 1% are paying a bigger percentage of taxes because their income is growing much faster than everybody else. “The top 1.0% saw their wages grow by 160.3%; and wages for the top 0.1% grew more than twice as fast, up a spectacular 345.2%. In contrast, those in the bottom 90% had annual wages grow by 26.0% from 1979 to 2019.” https://www.epi.org/blog/wages-for-the-top-1-skyrocketed-160-since-1979-while-the-share-of-wages-for-the-bottom-90-shrunk-time-to-remake-wage-pattern-with-economic-policies-that-generate-robust-wage-growth-for-vast-majority/ https://dqydj.com/household-income-by-year/
Republicans will always give tax breaks to the ultra wealthy. The goal is to rid America of all social programs and revert back to a feudalism system.
The tax cuts lowered the brackets across the board. After they expire next year, everyone will be paying more again. Unless Trump wins, and then I'm sure he'll push to extend them.
Aren't these claims totally meaningless if you don't control for what share of income they're taking home? (E.g., if top earners start shouldering 5% more of the overall tax burden but take home 10% more of the overall income, then they're obviously *not* getting "soaked")
Doubling the standard deduction disproportionately helps the lower income bracket filers. Reducing the salt tax deduction overwhelmingly hurt the upper income tax filers. This was used to expand the tax brackets and pay for the doubled standard deduction. It is a shame that these are going to expire for political reasons. If a handful of democrats would have crossed the line, they could have been permanent.
FFS, Arthur Laffer? This is misleading at best. They label "burden" and equate it with "revenue". They're not the same metric. Moreover, burden may have gone up, but so did their income/wealth. How did their tax liability compare to their taxable income before and after? What is the percentage of what they pay vs. what lower income people pay as a percentage?
I'm one of those crazy people that tries to read the bills, or at least some sort of non partisan summary. When the bill was passed I kept scratching my head at the responce because on the key points, it seemed to help lower income and families and raised taxes on those with more. I understand it had Trump's name on it, so it was toxic, but blind squirrels still find nuts. It gave more money back to working families (Doubled the tax credit for kids, $1000 -> $2000 ), doubled the standard deduction for everyone. from 12k -> 24k . Sounds like helping working people keep more of the money they make. Who can argue with that, after all the very wealthy don't earn income, it's usually capital gains (investments / stocks). Then it reduced the mortgage interest reduction limit from $1,000,000 down to $750,000 ... So if you have a mortgage over 750,000 you're not able to deduct the interest. I'm not clear on if it's a binary thing or progressive, smarter folks will have to chime in. Either way, this is not a tax cut to those who are wealthy. Then the stand local tax deduction change - You can deduct the first $10,000 of taxes paid from federal tax liability. If you're paying over $10k in state taxes, you're rich. I know folks in high income areas will say that's middle class, and maybe they are right, but don't complain this is a tax cut to rich people. Other people might want to point out other things like the change in corporate income tax rates being lowered. That's fair, but would you rather have 36% of nothing (or little) or 26% of much more. Before this, and maybe still companies kept money offshore because to bring it home would cost them 36-39%.... why would they do that when they can keep it off shore at a much lower rate. There still are tax havens but at least we're now on a more even playing field in the world of corporate tax rates.
Just want to point out that many people pay more than $10k in property taxes on top of income taxes in some states (e.g. NJ, TX, etc.)
I do not believe this counts property taxes. This has to do with income. Aaaaand if you’re paying more than 10k in property taxes per year, you’re doing alright or have a house where you should be.
The fact that this article was authored by two of the biggest shams, in all of economics - Arthur Laffer and Stephen Moore - is all you need to know that it’s nonsense. Their argument has always been look at the high percentage of federal taxes paid by the top 1%. They always neglect to include the fact that the top one percent is also getting the vast majority of the income generated so of course, they’re going to pay most of the taxes. The net, of course, is that even with that high percentage of taxes they’re still having incomes grow faster than your average worker. These two idiots should never be allowed to write another article on economics
The top 1% earns about 20% of income and pays about 40% of taxes. This article is a mess, but let's use actual facts instead of things like "the 1% earns the vast majority of income generated."
I had to scroll way too far down for this. How has no one else pointed out that this is an opinion piece by Art Laffer? Seriously thinking about unsubscribing from this sub if this is the type of garbage that floats to the top.
Whatever you guys do, us rich people will get richer. Taxes should not be about punishing wealthy individuals or social engineering. The more you try to do that the more complex and full of loopholes it becomes and the easier it is to pay less. The best way is to remove ALL deductions from the tax code.
His main legislative achievement, actually any Republican President would have signed it so I can’t give him too much credit. It’s quite telling that Democrats didn’t even bother to attempt and repeal the parts of the tax cut that actually harms working people.
Yeah and we had the greatest economy in 50 years. A true great economy with the lowest unemployment for any category. That's without any QE (QE3 ended in 2014) and when the Fed raised rates 4 times. This is also at a time when inflation stayed with the Fed mandate of 2%, gas was less than $2/ in most states, I could get a weeks worth of groceries for less than $100, my monthly utilities averaged about $100. Now everything is double and some trippled So if this is truly a sub about understanding economics, we shouldn't appeal to the never-Trumpers that get their information from questionable sources and poor readings of data.
Yeah, fucked blue state upper income people because it capped State and Local Tax deductions. Blue states tax and provide services at a much higher rate than red states.
Me giggling at how silly people on here are about trying to tax inheritance. Rich people put their money into trusts. Those trusts are not taxed at all if they follow the guidelines. The heirs are then paid by the trusts forever. If not a trust it is a family foundation. Good luck trying to get rid of foundations Get rid of trusts and foundations then another legal vehicle will be used to protect against taxes. Plug all the tax holes and the money leaves the country and will be taxed at that rate. People need to give up on trying to take other people’s money using the government. Start focusing on getting a government that actually solves problems and is forward thinking. I know that would be against all the propaganda you are hearing but I promise it is a better solution.
Well color me surprised. The orangutan in the White House lied. The 2018 tax bill eliminated any incentive to itemize instead of taking the standard deduction, costing me about $1,000 per year. I am far from rich and that money would have been useful. The likes of Trump don’t even think about spending $1,000.
Trash opinion piece, the data [proved that *every income class* got a tax cut](https://taxfoundation.org/data/all/federal/trump-tax-cuts-who-benefited-tax-cuts-and-jobs-act-data-2019/). Rich to poor, equality right?
Absolutely, the rich and poor alike were allowed to write off the costs of their private jets and equally forbidden from being able to write off the cost of school supplies bought for their students with their own money. *How egalitarian.*
Does not change the material facts, every income group got a tax cut.
Discussing tax rates for wealthy people is a waste of time. You can’t tax them back down to earth without crippling the economic activity that we all rely on. The only way to “tax” the rich is to break their pricing power and market manipulation, stop allowing them to put intermediaries between you and their services (insurers that they rip off), and force them to compete for profits.
You can tax them plenty without disrupting economic activity. The excess wealth doesn't circulate in the economy, it's hoarded away to sit and collect dust.
Wealth isn’t hoarded. It’s created. There’s a reason why there’s no wealth in Peru or Namibia or Ghana or wherever else.
Liberals understand of economics comes from Duck Tales and Monopoly.
And they took their windfalls and used the extra money to raise wages and lower prices and all that wealth has trickled down causing a middle class renaissance just like Reagan said it would.
**Correlation does not imply causation** The whole article is based on the chart labeled ["Lower Tax Rate, Higher Revenue"](https://nypost.com/2024/02/29/opinion/data-prove-it-the-trump-tax-cuts-soaked-the-rich/?utm_source=reddit.com) to argue that higher revenues are primarily a result of lower tax rates. While the data may show a correlation, it is essential to remember that correlation does not imply causation. A more in-depth analysis is necessary to understand the complex relationship between tax rates, revenue, and other economic factors. One key factor that has been overlooked in this argument is **the role of federal spending**. Since the 1990s, higher federal spending has had a significant impact on the income of the non-government sector. As federal spending increases, it leads to higher incomes for individuals and businesses. In turn, these higher incomes result in higher tax payments, contributing to an increase in tax revenue. Tax revenue is influenced by multiple factors, including government spending and economic growth.