Economy The 400 wealthiest Americans last year paid a lower total tax rate than any other income group

[Rational Poster]

What did AoC suggest? 70 percent? lol.

https://www.jacobinmag.com/2019/01/ocasio-cortez-70-percent-tax-redistribution-wealth

"strawman"

Nobody is going to stay to pay a fucking 70 percent tax. Nobody.

The tax rate on the highest income earners was between 70-90% from like 1950-1970.

How did we survive?

 

[Mcountry]

My point was you act like it’s unheard of to tax rich people at 70% and I know it’s not: I think that is too high but a progressive tax I can support. Up to and even higher than 70%

Oh so now you agree that it should be a progressive taxation but not something ridiculous.

Thanks for agree to my original post. Thanks for playing.

 

[Mcountry]

The tax rate on the highest income earners was between 70-90% from like 1950-1970.

How did we survive?

pssst. They likely all didn't pay it and used loop holes.

The world isn't fair and people won't play nice.

 

[Renard]

From a psychological standpoint, income has no benefit on your happiness above $70K/year. If you don't tax them, they'll just spend the money on yet more frivolous luxury while if you had taxed them you would have the ability to dramatically change people's lives through housing, education, healthcare, etc.

 

[Ophydian]

While I agree that our tax system needs to be overhauled, I don’t necessarily want it to come at the expense of the rich. The rich should pay what they’re paying now, and the middle class should pay even less.

Why? The rich use more of your tax dollars than you do.

 

[panamaican]

Can I be for both taxing the wealthy AND smaller government?

Yes and I think most modern conservatives should be. It's fiscally sound.

My only alteration is that I've abandoned the phrase "smaller government" for "efficient government" because I think a lot of the smaller government rhetoric is just designed to disenfranchise poor people and thus reduce the need for proper taxes on the wealthy. Efficient government doesn't aim to harm the poor but still aims to reduce government waste. But that's my interpretation.

 

[Trotsky]

What did AoC suggest? 70 percent? lol.

https://www.jacobinmag.com/2019/01/ocasio-cortez-70-percent-tax-redistribution-wealth

"strawman"

Nobody is going to stay to pay a fucking 70 percent tax. Nobody.

Shocking that you don't know what you're talking about. No one left in the middle-century when the highest tax rate was above 70 percent. Likewise, no one is leaving prosperous countries with high tax rates.

Do you really think people are leaving the countries with the highest marginal rates (>50% = Aruba, Sweden, Japan, Denmark, Austria, Finland, Canada, Luxembourg, Belgium) to go to places with the lowest (Kuwait, Qatar, Oman, UAE, Monaco, Bahamas)? Of course not. And the high earners who use the latter countries as tax havens do so as the legal allowance of their home countries.

 

[nostradumbass]

Well that's not even true, considering that 45% of the country don't pay any federal income tax.

 

[PolishHeadlock2]

I didn't see the edit. That logic is more intuitive but is there any actual evidence to support that a rich person "gets more resources" from the government? They don't get "more" national defense, or infrastructure, and don't qualify for Medicaid. (yes I know this is an abstraction because the 400 richest Americans can get national policy bent to their will but I digress)

I'd argue they do get more national defense (and defense in general) and more infrastructure.

They have a lot more assets to protect and a wider variety of assets

 

[Trotsky]

Yes and I think most modern conservatives should be. It's fiscally sound.

My only alteration is that I've abandoned the phrase "smaller government" for "efficient government" because I think a lot of the smaller government rhetoric is just designed to disenfranchise poor people and thus reduce the need for proper taxes on the wealthy. Efficient government doesn't aim to harm the poor but still aims to reduce government waste. But that's my interpretation.

 

[Jack V Savage]

I didn't see the edit. That logic is more intuitive but is there any actual evidence to support that a rich person "gets more resources" from the government? They don't get "more" national defense, or infrastructure, and don't qualify for Medicaid. (yes I know this is an abstraction because the 400 richest Americans can get national policy bent to their will but I digress)

They absolutely derive far more benefit from national defense and from infrastructure. Generally benefit disproportionately from order in society and from the maintenance of property rights.

 

[zebby23]

Oh so now you agree that it should be a progressive taxation but not something ridiculous.

Thanks for agree to my original post. Thanks for playing.

?? the hell are you talking about? Take a nap and come back later. Or put the bottle down

 

[tinker_190]

Because this is an incredibly simplistic and reductionist way to look at a very complex issue.

Taxing low and middle income earners at the same exact rate as higher income earners significantly impacts their quality of life, while nothing changes for the higher income earners either way.

Tax fairness is a silly concept. They don't need to be fair and they shouldn't be. Tax fairness is just republican jargon for lowering taxes for their benefactors.

If tax fairness is a silly concept, why even debate this topic? As long as enough revenue is generated, that should be sufficient then, no? But simultaneously, the fairness is to be judged by the result after the fact and in line with a subjective value? I'm not a benefactor of any party (in fact association with me would probably be damning) but I am concerned with tax fairness.

well I would argue they pollute more air, have more waste and put more and bigger cars on the roads although the latter can be debated now with electric cars. I also feel the Uber rich have a moral duty to contribute back to society but I also digress

This is a more compelling idea, but you'd have to be willing to endorse the uber-wealthy as the moral ubermensch of society and endorse a more hierarchical orientation of society around this principle.

Also, there has to be a good Uber-driver vs uber-rich joke in here somewhere.

 

[Ophydian]

Shocking that you don't know what you're talking about. No one left in the middle-century when the highest tax rate was above 70 percent. Likewise, no one is leaving prosperous countries with high tax rates.

Do you really think people are leaving the countries with the highest marginal rates (>50% = Aruba, Sweden, Japan, Denmark, Austria, Finland, Canada, Luxembourg, Belgium) to go to places with the lowest (Kuwait, Qatar, Oman, UAE, Monaco, Bahamas)? Of course not. And the high earners who use the latter countries as tax havens do so as the legal allowance of their home countries.

This guy a country is proof positive that Republican propaganda to vote against your best interests works.

 

[TripleAz]

Now I dont get why dems are fleeing ny and cali, someone help me out.

 

[Mcountry]

Shocking that you don't know what you're talking about. No one left in the middle-century when the highest tax rate was above 70 percent. Likewise, no one is leaving prosperous countries with high tax rates.

Do you really think people are leaving the countries with the highest marginal rates (>50% = Aruba, Sweden, Japan, Denmark, Austria, Finland, Canada, Luxembourg, Belgium) to go to places with the lowest (Kuwait, Qatar, Oman, UAE, Monaco, Bahamas)? Of course not. And the high earners who use the latter countries as tax havens do so as the legal allowance of their home countries.

So you are under the assumption that you can just take 70 cents on every dollar of a wealthy person and not have them seek out other options to avoid that...because...Canada? You think wealthy Canadians are paying their fair share?

I have a good friend who lives near Toronto and owns his own business/gaming company. We've talked about taxes...he pays 15 percent. Something about insuring that his corporation is operating at zero income by years end or the like. My wife's an accountant, I'm not.



If you tried to pass a law to take 70 cents of every dollar I have...you better damn well bank on my seeking out means to avoid that. Because I'm not an idiot.

 

[ObamaPhoneLady]

Well that's not even true, considering that 45% of the country don't pay any federal income tax.

Shhhh. Let them circle jerk.

 

[Headkicktoleg]

Interesting Op-Ed on the erosion of America's Progressive Tax system



https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html

Almost a decade ago, Warren Buffett made a claim that would become famous. He said that he paid a lower tax rate than his secretary, thanks to the many loopholes and deductions that benefit the wealthy.

His claim sparked a debate about the fairness of the tax system. In the end, the expert consensus was that, whatever Buffett’s specific situation, most wealthy Americans did not actually pay a lower tax rate than the middle class. “Is it the norm?” the fact-checking outfit Politifact asked. “No.”

Time for an update: It’s the norm now.

For the first time on record, the 400 wealthiest Americans last year paid a lower total tax rate — spanning federal, state and local taxes — than any other income group, according to newly released data.


That’s a sharp change from the 1950s and 1960s, when the wealthy paid vastly higher tax rates than the middle class or poor.

Since then, taxes that hit the wealthiest the hardest — like the estate tax and corporate tax — have plummeted, while tax avoidance has become more common.

President Trump’s 2017 tax cut, which was largely a handout to the rich, plays a role, too. It helped push the tax rate on the 400 wealthiest households below the rates for almost everyone else.

The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980.

For middle-class and poor families, the picture is different. Federal income taxes have also declined modestly for these families, but they haven’t benefited much if at all from the decline in the corporate tax or estate tax. And they now pay more in payroll taxes (which finance Medicare and Social Security) than in the past. Over all, their taxes have remained fairly flat.

The combined result is that over the last 75 years the United States tax system has become radically less progressive.

The data here come from the most important book on government policy that I’ve read in a long time — called “The Triumph of Injustice,” to be released next week. The authors are Emmanuel Saez and Gabriel Zucman, both professors at the University of California, Berkeley, who have done pathbreaking work on taxes. Saez has won the award that goes to the top academic economist under age 40, and Zucman was recently profiled on the cover of Bloomberg BusinessWeek magazine as “the wealth detective.”

They have constructed a historical database that tracks the tax payments of households at different points along the income spectrum going back to 1913, when the federal income tax began. The story they tell is maddening — and yet ultimately energizing.

“Many people have the view that nothing can be done,” Zucman told me. “Our case is, ‘No, that’s wrong. Look at history.’” As they write in the book: “Societies can choose whatever level of tax progressivity they want.” When the United States has raised tax rates on the wealthy and made rigorous efforts to collect those taxes, it has succeeded in doing so.

And it can succeed again.

Saez and Zucman portray the history of American taxes as a struggle between people who want to tax the rich and those who want to protect the fortunes of the rich. The story starts in the 17th century, when Northern colonies created more progressive tax systems than Europe had. Massachusetts even enacted a wealth tax, which covered financial holdings, land, ships, jewelry, livestock and more.

The Southern colonies, by contrast, were hostile to taxation. Plantation owners worried that taxes could undermine slavery by eroding the wealth of shareholders, as the historian Robin Einhorn has explained, and made sure to keep tax rates low and tax collection ineffective. (The Confederacy’s hostility to taxes ultimately hampered its ability to raise money and fight the Civil War.)

By the middle of the 20th century, the high-tax advocates had prevailed. The United States had arguably the world’s most progressive tax code, with a top income-tax rate of 91 percent and a corporate tax rate above 50 percent.

But the second half of the 20th century was mostly a victory for the low-tax side. Companies found ways to take more deductions and dodge taxes. Politicians cut every tax that fell heavily on the wealthy: high-end income taxes, investment taxes, the estate tax and the corporate tax. The justification for doing so was usually that the economy as a whole would benefit.

The justification turned out to be wrong. The wealthy, and only the wealthy, have done fantastically well over the last several decades. G.D.P. growth has been disappointing, and middle-class income growth even worse.

The American economy just doesn’t function very well when tax rates on the rich are low and inequality is sky high. It was true in the lead-up to the Great Depression, and it’s been true recently. Which means that raising high-end taxes isn’t about punishing the rich (who, by the way, will still be rich). It’s about creating an economy that works better for the vast majority of Americans.

In their book, Saez and Zucman sketch out a modern progressive tax code. The overall tax rate on the richest 1 percent would roughly double, to about 60 percent. The tax increases would bring in about $750 billion a year, or 4 percent of G.D.P., enough to pay for universal pre-K, an infrastructure program, medical research, clean energy and more. Those are the kinds of policies that do lift economic growth.

One crucial part of the agenda is a minimum global corporate tax of at least 25 percent. A company would have to pay the tax on its profits in the United States even if it set up headquarters in Ireland or Bermuda. Saez and Zucman also favor a wealth tax; Elizabeth Warren’s version is based on their work. And they call for the creation of a Public Protection Bureau, to help the I.R.S. crack down on tax dodging.

I already know what some critics will say about these arguments — that the rich will always figure out a way to avoid taxes. That’s simply not the case. True, they will always manage to avoid some taxes. But history shows that serious attempts to collect more taxes usually succeed.

Ask yourself this: If efforts to tax the super-rich were really doomed to fail, why would so many of the super-rich be fighting so hard to defeat those efforts?

I like how your OP lies and says raising the progressive tax rate would result in 750 billion a year when really it's more about taxing companies and adding a wealth tax.

 

[ObamaPhoneLady]

Perhaps the ruling class would except a higher tax rate in exchange for the reintroduction of prima nocta?

 

[Trotsky]

So you are under the assumption that you can just take 70 cents on every dollar of a wealth person and not have them seek out other options to avoid that...because...Canada?

You need to look up what "marginal tax rate" means. I can sincerely say that it is the most systemically and mind-bogglingly not-understood routine political concept for conservative Americans.

You think wealthy Canadians are paying their fair share?

"Fair share" is subjective. Do I think they're paying a larger percentage than their US contemporaries? Yes, obviously.