
How to tax the rich - prostoalex
https://www.economist.com/leaders/2019/02/02/how-to-tax-the-rich
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nabla9
The _effecitve_ marginal tax rate for the poor can be much higher than it is
for the rich.

> the effective marginal tax rate when a person moves from the bottom to the
> middle quintile is 1 - (15.4-12.9)/(12.6-2.2), or 76 percent.

[http://gregmankiw.blogspot.com/2018/06/an-effective-
marginal...](http://gregmankiw.blogspot.com/2018/06/an-effective-marginal-tax-
rate.html)

If you believe in basic economic concepts like: 1) people react to incentives,
2) diminishing marginal utility of income, or that 3) perceived fairness is
important for the functioning of the society, you should look at the effective
marginal tax levels in different income categories and at least even it out
and maybe add more to the richest.

Another way to increase taxes and level the playing field would be to remove
loopholes in taxation with sweeping taxing reform. Combined with higher
marginal tax rate for very high income individuals, Warren's proposal would
probably generate even more income than $2.75 trillion over decade.

Almost all economists agree, that the best way to tax the rich is taxing the
land and property. All taxation has some negative effects but property tax has
least harm and would be net positive. From this perspective Sanders has the
best proposal, but Warren's is also good.

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prostoalex
> Combined with higher marginal tax rate for very high income individuals

US economy has a non-negligible percentage of workers that are subject to
windfall distributions - relatively low income for a long period and one
excessively large payout upon success of some project. Book writers, movie
industry, professional sports players, engineers at pre-IPO startups, real
estate developers and everybody's favorites - hedge fund managers.

It's unrealistic to expect them to continue enjoying the same level of income
every year, for many it's simply a one-time chance at retirement money.

Excessive taxation on such income without accounting for the previous (and
future) years of low or no income seems unfair and will likely stall many
long-term ventures.

We could also introduce a 99.9% tax on Powerball winnings, but what does that
do to the long-term health of the lottery?

> the best way to tax the rich is taxing the land and property

In an economy where large shareholders of Apple are subject to such tax
(through their US residency) but large shareholders of Samsung (who happen to
be Korea residents) are not, aren't you providing a leg up to any foreign
money? (The actual companies are irrelevant, could be Ford and Toyota, or
Boeing and Airbus.) Foreign entrepreneurs based in Singapore or Monaco have
more spare cash to fund and operate their companies and invest in R&D. In the
long-haul does that make the US economy stronger?

Another issue is high-wealth but low-margin businesses. A family-owned
supermarket chain might bring a wealth of >$50 mil, but their annual earnings
on that might not be that outrageous. Under Warren's plan, they would
effectively have to part with 2% of the supermarkets each year, not having
enough cash on hands to pay the wealth tax bill. Is it a net win for the
economy?

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known
[http://archive.fo/RiTLT](http://archive.fo/RiTLT)

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sarcasmatwork
OP, did you read this, or just the title? Link = pay wall. Not helpful!

Taxing the rich tho is not a good idea because they will GO ELSEWHERE!

Anyone got a link that is not a paywall?

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nabla9
[https://outline.com/55xZSe](https://outline.com/55xZSe)

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sarcasmatwork
Thank you!

