If you have a billion dollars, all your pleasures and needs are taken care of. The use for the excess money is ego and power.
Thus, if it is tax advantageous to put the money into a foundation, then you will do it. Does anyone really draw a distinction between Bill Gates giving money to a cause and the Bill and Melinda Gates Foundation giving money to a cause? While the Gates Foundation is doing great things, it is probably very ego gratifying to have the top scientists and philanthropists and heads of governments coming to you asking for money. It is also a very powerful position to be in charge of so much money.
Thus, if we have a wealth tax, we will see the money go from being the billionaire's personal money, into being part of a foundation named after the billionaire that they control.
Foundations can be tackled next.
The US used to have an income tax that was over 90% for the highest income bracket. Bringing it back would be a step in the right direction, but not enough, as non-income-based wealth would be untouched. If it was up to me, I'd tax wealth over $1 million at 90%. It's laughable that these billionaires are complaining at being taxed a mere 6% on wealth over $1 billion.
There are different kinds of incomes like capital gains which is a different discussion and one that many people agree with raising.
> "I'd tax wealth over $1 million at 90%"
You'll lose most tax income. Every entrepreneur will leave. And the middle class (which builds up more than that over a lifetime) will be decimated. It's a great way to crash a nation.
It's been a long time since I looked in to this, but it used to be the case that if you gave up your US citizenship while having a net worth of over $100,000, it was assumed by the government that you were doing so for the purposes of tax evasion, and they'd continue to tax you for the next ten years.
The same could be done here, with the government getting 10 bites of 6% at wealth over $1 billion if the billionaire tries to run away. Taxation could also be made retroactive, if there was a political will to do it.
If some entrepreneurs leave others will step in to take their place.
As for the middle class being "decimated", I doubt it, as the median net worth in the US is only around $70k.
The majority of Americans won't be affected by taxes on millionaires.
Your plan does not lift anyone up and create wealth, it brings everyone down and destroys it.
As far as creating wealth, I have no problem with it as long as it's shared. When it's hoarded by a tiny minority it leads to them having a greatly disproportionate concentration of power where they basically get to rule over the rest of us.
That's what I object to.
Nobody complains when the entrepreneur goes bankrupt from a failed business. Is society going to absorb those debts too then?
Wealth is power, but raising taxes is transferring it to politicians who already have political power. It's only being further concentrated, and that's a dangerous precedent that we can see from state-controlled economies like Russia and China.
There have been a number of articles posted to HN and elsewhere which argue that luck plays a great role in success. Furthermore, the rich need not be providing any value, as they could simply be ripping people off (with extremely egregious and famous examples like Enron or Madoff, but there are plenty of others, most of whom don't make the news), exploiting the poor (see Amazon's treatment of its warehouse pickers for another famous example that's pretty close to home.. or the use of sweatshop labor to build products the world round), or they could be bribing politicians to grant them favors in the form of laws that are beneficial to them or just outright government contracts which they don't deserve, or they could be manipulating consumers through advertising to buy stuff they don't need and otherwise wouldn't have wanted and that might not work anyway or have a variety of deleterious effects (like the endless list of quack cures throughout history which made their sellers very rich but the patients very sick)... the list goes on and on.
"Nobody complains when the entrepreneur goes bankrupt from a failed business. Is society going to absorb those debts too then?"
Remember the government bailouts of banks that were "too big to fail"?
"Wealth is power, but raising taxes is transferring it to politicians who already have political power. It's only being further concentrated, and that's a dangerous precedent that we can see from state-controlled economies like Russia and China."
I am against the concentration of power in the hands of politicians as well. There needs to be more, and more effective direct democracy in the US, rather than buring our heads in the sand and leaving up to the political class to worry about politics. That needs to be done hand-in-hand with a greatly improved education in civics, history, ethics, and reasoning, so people aren't so easily manipulated and mislead. In any case, there are lots of problems to solve, and the concentration of wealth is just one (though a critical part) of what needs to be done.
Ripping people off is already a crime. Exploiting the poor is a complex equation of personal choices and societal policies. Bribing politicians is an issue with govt politics (something I've stated several times). Poor corporate practices require regulation. Taxes do not solve any of these issues.
The bailouts were completely paid back with interest. It was one of the few examples of good govt spending and one of the best investments ever made. And it wasn't about saving a particular business but rather ensuring we don't go into a greater depression. Is that what you would've preferred?
Most Americans will never be a millionaire or a billionaire. This is statistics, not feelings. There's no point in them supporting policies enabling such disparity in the economic system.
$10 million is enough that you can take 2.5% every year as $250k of income, and spend 0.5% on the fiduciary wealth manager's fees, and still have investment distributions and interest on the principal that outpace inflation in the long term. A household of one or two people can live its entire lifespan on that, without ever trading hours of labor for cash again, and then pass the same privilege down to a single heir, until civilization collapses.
$250k/year is a reasonable and sufficient retirement income. $10M is a plausible sum to accumulate through labor-selling alone, for one or two people each working for 2000 hours/year over 40 years, at an average combined rate of $175/hr, all while spending $100k/year on expenses and devoting $250k/year to savings. It does not blatantly flaunt the "diligent and/or intelligent work generates wealth" story.
The temporarily embarrassed millionaires all around the US can plausibly get there, if nothing else goes wrong, and they don't even have to cut expenses down, if they get paid enough per hour.
$250k/year is about 4x the median household income in the US. It can support most lifestyles less profligate than a person addicted to luxury travel, high-stakes gambling, top-shelf companionship-for-hire, or ultra-pure cocaine. And $250k/year can still be spent wisely and effectively by one household.
The thing about the government spending the money poorly is that they are still actually spending it. Spending is better for the poor than investing. When you spend money, the person you trade it to can go on to spend all of it themselves. When you loan it to them, or invest it, they have to give it back someday; it has strings attached. So the advantage of the wealth tax is in taking money that is not being spent, and putting it back into genuine circulation.
So then I take this reasonable number, and pad it by one order of magnitude, to absorb the edge cases that are still reasonable in person, but look bad on paper. Start the tax at $100 million in accumulated wealth, and tax 2.5% of everything in excess of that. Then deduct from that tax the payer's total spending (not loans or investments) in excess of $2.5 million, which is money that will count as someone else's income. If they can spend that much, the government doesn't have to spend it for them, and that spending will get taxed at a higher rate anyway, as income.
Most people spend 9 hours a day walking down to the river (commuting), filling their vessels (working), and carrying them back home (commuting). Some people also have an at-home cistern that they pour their vessels into (savings) that provides a buffer beyond the home's immediate needs.
A smaller number of people have gigantic reservoirs (rich). They don't go down to the river themselves to fill up. There's no way they could carry enough with their own buckets to fill even a fraction of the volume of their reservoir. Instead, other people pour in a little every time they make a trip to the river, perhaps as part of a deal to supply larger buckets, or shoulder yokes, or carts.
The big private reservoirs remove water from the normal water cycle. When people use the water, it flows back into the river somewhere downstream. Sometimes different stretches of the river experience droughts or floods, and that is what those little at-home cisterns are good for. During a drought, the river narrows, and not everyone is able to fill their vessels all the way. And those giant reservoirs--which aren't actually being used, but instead protected against leakage, siphoning, and evaporation--each slightly reduce the water flow downriver.
During a drought, some people may resort to begging water from a private reservoir owner. And if they have stout legs and shoulders, the owners agree: you can take a little of my water, if you promise to give more of it back later (loans). Sometimes, even in good times, someone will get water from a reservoir, because the reservoir is closer, and they need more than they can personally carry, and they promise to put more water back into the reservoir later (investment).
But as the water is locked up in private reservoirs, the river slows to a trickle, and only the rich can drink without pledging some of their future water-carrying capacity to someone else. The reservoirs grow larger; the river shrinks smaller.
Water that is used returns to the river. The poor and middle class need the river, as it is their only way to drink without mortgaging their future away to a rich person.
You might already see the problem here. The river comes from water that has been used and recirculated (spent!). When someone uses reservoir water, and pledges interest or investment return on it, they are committing to put more of the circulating public river into the unmoving private reservoir.
The only way to refill the river from the reservoirs, and keep it in circulation, is for their owners to use more water. Or for armed river rangers to order them at gunpoint to drain some of it back into the watershed. There is a little natural rainfall, and a little from people melting glaciers a little bit at a time by holding chunks of ice under their armpits, amounting to about 2% or 3% of the known volume of liquid water, but all those existing reservoir pledges have already exceeded that influx.
The rich and powerful also tend to associate mostly with their own kind, which will skew their world view and priorities.
The unspent money can also be used as collateral or leverage to earn more money.
Finally, the unspent money can be passed on to heirs to create an aristocratic class who inherit their status -- something the US founders were explicitly trying to avoid when founding the country. Unfortunately, the wealthy have found ways of subverting their intent.
 - For an example, see the excellent Born Rich documentary, made by one of the heirs to the Johnson and Johnson fortune, where he interviews all his friends, who were also born in to extremely wealthy families.
You squeeze more from capital (who has been raking labor over the coals for the last 40 years) for labor. What's capital going to do, leave the country? We'll tax it on the way out, and we still get to keep the market if you want access to it from the outside.
Disclaimer: My politics are firmly in the democratic socialist camp. Allow success, but not too much, and make failure cheaper and less painful.
Not in most of California or any other 'wealthy' state, it wouldn't. I know people making $18/hr and more than half of their post-tax income is going to rent ALONE.
I'm the person paying literally the cheapest apartment rent in the entire county, because of being grandfathered in due to long tenancy. $1300/mo. Everyone else in the same complex, for fewer or the same amenities, pays easily $300 more. Rent everywhere else runs about $1800 and quickly rising.
My point remains that if these policies don't change now, more taxes will change nothing while concentrating more money/power into a few political hands that have proven to be bad at spending it.
The problem is how govt spends money, not how much it collects.
And how does taking money from the billionaire help the people that can’t meet physical needs?
If we have no privacy left, you monitor all that you do on any foreign or local card/transfer etc (you ban crypto and put insanely high fines/prison on using it) and if that seems not to match what you reported as income/capgains/etc, you get an audit. What is the point of being rich and evading taxes if you cannot spend it? And if you move it to foundations etc, at least you cannot get to it, nor can you family if they live in this (fictional?) country as they would have to explain the same things.
In a society (probably a democracy?) where people value privacy and non-draconian laws, I cannot figure out how to make this work. Besides having educated and patriot people who actually would choose to pay taxes for the greater good. But these people do not start on their own (Bill Gates example of not minding to pay more tax) and they usually believe they can do better things with their money (for humanity). And that is usually not the case or way too biased; their right if taxing is paid fairly, but if evading, a problem.
I think this assumes far higher governmental competence and efficiency than is warranted.
Probably because billionaires don't stay wealthy, probably because politicians are generally really bad at spending tax money, probably because how would Tesla exist.
There needs to be a class of people that can say 'f*ck it' and bet the farm to make moonshots.
> However, wouldn't it be even better if the benefits were not just received by the public, but steered by the public as well?
You need to consider real world politics and not only consider political ideology. Right now if you were to implement your plan you'd give Trump more money to build his wall. I don't imagine that is what you'd want. Don't think about what you want to do, also think about what you don't want to happen.
Plus you are proposing shift money (power) from 607 individuals (billionaires in the USA) to 535 individuals (members of congress). You've not solved the problem, you've just moved it to an a group of self serving individuals that wouldn't understand the value of money.
I have read somewhere that the main reason capitalism has worked well over communism is, capitalism explicitly does not put a cap on wealth (and therefore, money) a person can accumulate since different people bring different values in society and the moment you put a cap on that, the person will lose motivation and stop even bringing the expected value for the cap that is being proposed.
I'm in no way arguing for/against taxing the wealthy and do not have a well-informed stance in this issue. Because, I also think money breeds money and if you are wealthy, the probability of you gaining more wealth increases exponentially.
Personally, I think maximum salaries or maximum wages will not work since it inherently has some disadvantages - do you propose an absolute maximum value for everyone in this world? or do you propose region wise or based on some other criteria? If region wise, just like remote work salaries, people will start gaming the system etc etc ... I think this discussion goes far more than keeping billionaires rich and discounting the segment of people who might end up in that list sometime in future, but maybe they are holding themselves back from giving more value to society because of these laws?
I don't know what you've read, but one of the important features of (capital-C) Communism is a great reduction in what can be held as personal property. A Communist typically would not argue that people be restricted in how much money they hold, but that people be restricted from holding any money at all, since money has no use within a Communist commune. I'm not arguing at all for Communism.
Yah, we tried that in WW2 and now we are stuck with employer paid healthcare. I'd rather not.
You can also take risks and get rewarded. That's what individual freedom and capitalism provides. Otherwise are you going to also cover the losses of every failed business?
> "Why are you interested in keeping billionaires rich? ... Are you really so insulted at the idea of sharing the wealth?"
This is a ridiculous non-sequitur. Some will always be richer than others. As long as the minimum standard of living is raised, there is no need to envy and take from those at the top.
What created the middle class in America and western world was created thanks to redistribution of wealth through a tax sheme taxing you more according to your wealth, and these taxe paying for public expense, like medical care, instruction, public infrastructure and so on.
Neo-liberal policies and tax reform removed that burden from the wealthiest and cut "public funding" shifting the cost of services assumed once by a strong State to individuals, like instruction.
That's how wealthiest are now allowed to accumulate more and more wealth, and middle class is burdened under a crippling amount of debt.
15 years ago, Bill Gates wealth was "only" 50 billions. Now it's 100. And in 20 years it will be 200. On the other end, diabetics are dying because they have to save on insuline shots, people affected by cancer has to fill for bankrupties because of the cost of their treatment, people avoid visiting the doctor for serious issues unless it's a matter of life or death. Cuba has a better life expectancy rate than the Us.
If you want to take from the winners then you need to cover the losers. Now we could have a nice balance (reasonable taxes spent well for the public good) where both sides benefit but if you want to go extreme at the top then don't expect everything to work out.
Either way, nobody has yet answered the question I've asked a dozen times: How does a govt poorly spending trillions get fixed by spending a few more billion?
But that wasn't the question, and as expected you haven't provided an answer although you hinted at what I've been saying all along near the end. The reality is that the more taxes won't make a difference, only a change in incentives.
Wealth mobility in the USA is pretty high. It's entirely possible for billionaires to stop being billionaires, or for people to temporarily become rich and then lose it again. Lots of stories like that out there. Elon Musk has made fortunes and lost them several times, I think.
Taxation is not an illegal or immoral appropriation of property
Obviously it's not illegal by definition.
Immoral? Yeah, I think a 100% tax rate i.e. communism would be deeply immoral. And taxes today are very high, and frequently lead to huge misallocation of resources. I think you could easily argue for lower taxes from a moral position.
I'm reminded of the John Carmack article on Government and Taxes.
"So much of the government just grinds up money, like shoveling cash into a wood chipper."
It's worth reading (sorry can't find a better link, use this link and click to expand the first comment)
Even if you cheat taxes egregiously, and even if your effective federal tax rate is only 15% -- when you have $70Bn in wealth, your income (cheated to extremes) is still going to be at least in the hundreds of millions. 15% of that is still 10s of millions of dollars.
And as others pointed out, if you're going to pick fights with billionaires, Bill Gates probably isn't the best place to start. You would be hard pressed to convince many people here he's been a net-negative to human civilization.
Being a philanthropist shouldn't justify a low tax rate.
Attempts to tax people at 70% in France (even if it was marginal tax) went south very quickly. Incentive matters a lot because good work is really really hard.
Funny enough Gates seemed alluded to this on some interview I watched a while back.
2) Sure, I'm glad Bill Gates is willing to double that amount. Fun fact, Mr Gates, you don't have to wait until a tax is implemented, if you really think that way, you can donate money straight to the government: 
3) Taxes, at least in my lifetime, have always been a tax rate, not a number-of-dollars paid thing. If Jeff Bezos made 20 billion dollars last year, and paid only 1 billion in taxes, that would be a 5% tax rate. Living in NY, depending on my expenses and deductions, I pay upwards of 40% of my income in taxes. Yes, in one year, Bezos would have paid more to the tax pool than I ever would have, but it seems incredibly unfair that a person who has so much would be forced to give comparatively so little, especially since wealth hoarders could also afford to give a substantially higher percentage of their income without an appreciable quality of life change.
Granted, I know Bill Gates is, by wealth-hoarder standards, not too bad a guy. I don't think anyone here is arguing that he is, but come on; even if his dishonest framing of "being taxed 100 billion dollars" was true, which it isn't, it's not like his life would even change that much; he'd still be worth billions, he'd still have more money than he knows what to do with, he'd still be able to live a life of luxury on bank interest. Forgive me for not crying over his plight.
EDIT: The 20 billion Bezos thing is a contrived example. I do not know the tax rate for billionaires in NY; it was more a direct response to the "paid more in taxes than I'll ever pay" comment.
And the Gates Foundation is indeed generous with how much impact it's had.
>In 2004, a study by the Institut de l'enterprise investigated why several European countries were eliminating wealth taxes and made the following observations: 1. Wealth taxes contributed to capital drain, promoting the flight of capital as well as discouraging investors from coming in. 2. Wealth taxes had high management cost and relatively low returns. 3. Wealth taxes distorted resource allocation, particularly involving certain exemptions and unequal valuation of assets. In its summary, the institute found that the "wealth taxes were not as equitable as they appeared"
Valuing assets is complicated; for some assets, it's impossible. Furthermore, selling assets is complicated; for some assets, it's impossible.
That is the logic behind taxing transactions. The only time we know what something is worth is at the instant it transacts. About the only time we know how liquid something is, is at the instant it transacts.
For a facile example, consider the founder of a private company. They now have to sell 2% of their position each year, every year. That's a lot of work! And it gets worse if one considers a bootstrapped business, where there aren't lots of shareholders to sell to and there isn't a 409A valuation.
There are some proposals for the owner valuing the company or giving the government shares in the company in lieu of cash. However, if you do that, within 15 years, the government will have a controlling stake in every pretty much every private company.
Oh, that never goes wrong...
This was used in ancient Athens : "By the procedure known as antidosis a person who was appointed to perform a liturgy could challenge another he considered better able to afford the expense....the challenged person either had to take over the liturgy or to accept an exchange of property with the instigator of the procedure."
It was a private system, i.e. the payer and challenger were individual Athenians. Neither party was the state. (If it's done automatically, it's easily gamed. Own a Superfund site? Value it at $1 and put it to the state. Have a buddy in government? Great! They just bought your WeWork shares at a $47bn valuation.)
Given the history of civil asset forfeiture in America, we'd want to think twice before enumerating this power to the executive branch.
This system seems ripe for abuse in the form of the owners overvaluing their assets and having corrupt/coopted government functionaries rubber stamping their purchase (and likely getting rewarded for it in some way by the owners who just made a huge profit at the government's expense).
And yet you can insure most assets against destruction and theft.
It's fundamental to the problem of valuation, so probably not.
> there aren't many billionaires who actually are primarily invested in illiquid assets
Most assets are illiquid, e.g. real estate.
To be clear, as a capital-markets guy, I love the idea of forcing more of the economy into the financial system. But as an American, it's totally unnecessary. Increase the take on transactions and remove the loopholes. Taxing wealth just creates artificial transactions to be taxed.
The thing you seem to be missing about a wealth tax is that it's not about taxing $17.02 or $17.03. It's about taxing $7Bn, and if you only get £6bn this year, well you're going to get more next year. It's so aggressively redistributive that the details actually don't matter as much as you expect.
If that's true now, it sure won't be true for long after you pass the tax!
>The manuscript currently holds the record for the second highest sale price of any book, as it was sold to Bill Gates at Christie's auction house on 11 November 1994 in New York for US$30,802,500 (equivalent to $53,222,898.79 as of 2019)
Sale value indexed to inflation wouldn't be a bad idea.
So you create it. You decide to fundraise, and that capital will help you succeed. You pay yourself a salary of $100,000/year, and put everything else into the company.
You raise $4 MM in a seed round, valuing your company at $20MM.
10-months later, your company is doubling growth YoY again, has a solid SAAS model, and low churn. You decide to raise again.
This time, you raise some more money for your company, and you're now valued at 70MM.
About a year later, you're growing just as fast -- but you see a new competitor is entering the ranks. It's time to scale even faster. So you go and raise again. In a fantastic series-B round, spread across TechCrunch and HN, you raise again, at a $200 MM valuation.
As the sole founder, you now own 50% of the company -- making you worth $100MM. Your salary has remained constant at $100,000/year though.
And then the wealth tax hits.
The new wealth tax says you're responsible to pay an annual tax of 2% on all assets over $50MM. Starting this year.
Which means that you, as a private founder with no liquid assets, are now responsible for $50MM * 2% = $1MM in taxes this year.
Even though your liquid income is $100,000, and you have barely that much in your bank account -- you need to come up with $1,000,000 in liquid cash this year. And since your valuation probably won't go down, it'll be at least that much, every year, for the rest of your life, until you shutter the company.
So you go and try to liquidate your shares. But unfortunately, it's not a public company --- and it's not that easy finding private secondary-market buyers willing to buy the half of the founder's entire stake.
So what do you do now?
As far as I can tell, this is how the wealth tax would work for startup founders.
Meanwhile, inequality is stifling global growth and leading to protests that lead to riots that are starting to look like civil wars in several countries around the world.
But, you know, let's all pretend like we're future billionaires and only think about the future and not the present.
P.S. -- I'm sure there would be no less than 3 startups that would attempt to solve this problem if it ever materializes (which it won't because everybody in the US thinks they're a future billionaire).
Well clearly not everyone in the US thinks that, or this plan would have literally 0% support; I live in the US and have no delusions of becoming a billionaire in this lifetime and I also support something akin to Warren's wealth tax (and would like to think that I could continue to even if I did somehow magically become a billionaire).
I don't think it can be simply reduced to "every American thinks they're going to be rich". I think a lot of Americans have this Ayn-Randian idea that billionaires truly "earned" their money, and that wealth-hoarders are a lot smarter (or better) than they are, and as a result deserve to keep their wealth, even at the expense of everyone else.
But I have issues with lumping together Americans like that; we're a pretty diverse country, with a pretty diverse set of opinions on tax policies.
Having seen the inner workings of a number of large companies (think Intel-sized), I'm quite confident that waste is almost always more a function of organizational size than sector; there are efficient government bureaucracies, and wasteful ones. Same for anything big beyond a certain scale.
A third thing I think is lost on a lot of people is what the impacts of wealth disparity are on the citizenry, and this is stuff that doesn't always have an immediately visible line connecting the two. But, one thing off the top of my head, public health in countries with greater wealth disparity tends to be worse.
There's more, and I'll edit the comment to provide more examples later, gotta run for now.
Maybe I'm am outlier, but I doubt it; I think most people understand that the billionaire thing is a pipe-dream, and they work every day to pay their bills and if you're lucky to also work on stuff you're interested in. How exactly would that be affected by lowering the wealth-hoarding you're allowed to do?
I think that the side effects of a wealth tax might just end VC investing in high valuation companies altogether. I don't know if many people on HN see that as a positive.
 Anecdotal, but that was the way to get an apartment for my parents' generation back in Soviet Union and I really don't want to see it here again.
I think most people would still be willing to keep working on stuff, and I don't see why VCs would stop investing in high-value companies altogether.
This is patching one problem with another. The underlying economic system that is based on interest is playing a big role in this inequality. Instead of patching by adding more weird and unjust taxes, people should move away from an interest based economy.
Yes, it sucks, but forgive me if I don't shed a tear for someone who has to find a way to pay taxes on their $50M of assets. They absolutely do have options which aren't terrible.
If a "wealth tax" did pass, then expect countless startups who specialize in handling the arbitrage of this.
Before repeal, European wealth taxes — with a variety of rates and bases — tended to raise only about 0.2 percent of gross domestic product in revenue, based on Organization for Economic Cooperation and Development data. That is only 1/40th as much as the U.S. federal income tax raises.
Yet for little revenue, wealth taxes are difficult to administer and enforce. They may require taxpayers to report the values of financial securities, homes, furniture, artwork, jewelry, antiques, vehicles, boats, pension rights, family businesses, farm assets, land, intellectual property, and much else. But owners do not know the market values of many assets, and values change over time, so costly wealth-tax compliance would only make accountants wealthy.
And what about wealth held abroad? There is no way the Internal Revenue Service would be able to track down and value everything U.S. residents owned on a global basis.
And here’s the kicker: Since the base of wealth taxes is net wealth, debt is deductible. That allowed wealthy Europeans to jack up their borrowing and invest in the exempted assets to shrink their tax bases. If a wealth tax were imposed in the United States, the farm lobby would most certainly get farmland excluded. Then rich people would borrow heavily and invest in farmland, thus shrinking the tax base and distorting the economy.
2. If you are worth $100MM you should be able to borrow 1% annually of your net worth until you can liquidate your shares.
In this scenario the banks start profiting from startups, probably more in interest than the govt will get taxes.
Whatever you have you have already paid taxes on - why does the government need to take more?
To fund healthcare and to avoid diabetics to go bankrupt and die because they saved on insulin shot ; or all the people who have to take a second mortgage for basic cancer treatment, if they can, and finally go also bankrupt.
To fund crippling public infrastructure and investment.
To fund cultural events and promote art and diversity beside that culturaly dead hollywood movies pipeline ; scientific research ; libraries ; promote intelligent television programming not only motivated by a quick buck by pushing deep in your throat stupid ads for Coca-Cola and their fake, Mac Donald and other companies responsible for promoting detrimental products for health or envirronement ; to fund compagn to raise awareness on foundamental issues like global warming and stop the spread of misinformation by corporate chills or religious nutjobs.
The list go on and on...
All these public expense are the source of wealth redistribution.
Why are people crippled by college debts at 24?
So now it's a tough spot. On once hand, if you apply the Medicare caps universally, many hospitals will go belly up. If you remove the caps and let them bill whatever they want, you will end up with a rapidly growing hole in the budget.
I would say, instead we need a solid system of rules on what you can and cannot bill, some auditing body and a way for the patients to dispute inflated bills at an affordable cost. Whether it goes out-of-pocket or from a tax-filled fund is IMHO not as important as the cost audit/dispute mechanisms.
IOW, more administration. Didn't this thread start with a complaint about administrative cost?
There are many examples of successful universal medical systems with different trade-offs that have been refined over the last 50 years. Canada, Britain, Germany, Switzerland, etc. Choose the set of trade-offs you prefer and copy it; reinventing the wheel is likely not going to end well.
This is one of the proposed ways to pay for things like universal health care.
Additionally, your citation (https://www.aei.org/carpe-diem/chart-of-the-day-administrati...) is about public schools, not colleges and hospitals as you suggest.
Education is poorly funded? We spend more per student than any country except Norway as of 2015:
The education system is not poorly funded. The money is poorly and inequitably allocated, and the system is poorly run.
Every SpecialEd teacher and student would politely disagree with you. Not every aspect of education is funded differently, even when factoring i’m better budget management.
Huh? Currently on mobile so I don’t have the CBO file to link but I will when I get to my PC.
Anyway, Healthcare spending is not actually “too much” and instead is too low. When we expanded Medicaid and implemented the ACA, estimated costs were below actual cost by hundreds of billions to one trillion dollars due to the unknown number of people accessing healthcare. Healthcare is the one area in which there is not enough money being spent on lower income brackets and Medicaid/Medicare users.
Granted, I can only speak for myself, but when I hear the word "infrastructure" I'm picturing a smörgåsbord of different things:
- Rail lines
- Electrical delivery (power lines, distribution boxes, etc.)
- Telecommunications delivery (data lines, radio towers, etc.)
- Fuel delivery (pipelines, refineries, storage, etc.)
- Water delivery (pipelines, aqueducts, reservoirs, wells, desalination plants, etc.)
This is consistent with Wikipedia's definition of "hard infrastructure" (as opposed to "soft infrastructure", which focuses on institutional structures/organizations).
By not bankrupting them as soon as they get sick.
By giving them an opportunity to go to college and improve their economic standing without taking on six figures of debt.
By giving them access to affordable reliable public transportation so they don't have to deal with the huge expense of owning a car.
As my econ professors used to say, in America for a long while now, we're in fact a socialist country already... it just happens to be "socialism for the rich."
Wealthy powerful billionaires is a valid issue but there should be a better strategy based on incentives for the greater good beyond just "tax them more". A look at how much the Bill Gates foundation has done proves that wealth can be deployed with positive impact, but sadly it's not something that gets much news.
Money is power, and an over-concentration of power is antithetical to a democratic society. Bill Gates makes a show of his charitable spending, rehabilitating his reputation as a ruthless, unscrupulous empire-builder, meanwhile every year he gets richer.
It’s always about dragging down instead of pulling up
> It’s always about dragging down instead of pulling up
Ok, tell me how you could reduce wealth disparity to only "three or four orders of magnitude" by "pulling up," without doing something daft like printing money and distributing it until the billionaires' wealth is inflated away?
Some real problems are not solvable by win-win solutions.
Spend better (education, healthcare, etc) while removing money from politics. It would actually cost less and we could lower taxes for once for the rest of us.
That's debatable. Many people think it is a problem, or at least an undesirable situation.
> Raising the standard of living at the bottom is what matters, and putting in proper safeguards so that those at the top cannot greatly interfere in things like government.
Easier said than done. It may be impossible or impractical to neuter the political power that comes with economic power.
If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
> Why would they unless they are suffering at the bottom? How does it actually affect you?
You might want to spend some time thinking their alternate perspectives.
> Or is it just envy of those who have more?
Not any more than it being greed that's motivating you to take your positions.
It's generally not very enlightening to take personal swipes like you did there.
> If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
This seems to be hinting at a kind of libertarian worldview that sees the government and politicians as some kind of unaccountable independent power. That's not the only way to think about government, and I'd argue that it's a pretty limited and ultimately unhelpful perspective.
A more democratic perspective is not so opposed to the people gaining more power through their elected representatives.
I came from a country and living that is far less than anything in the US, and yet billions have it worse. Once you reach a good standard of living, what perspective other than envy is there? And I'm talking about the collective, not you.
> "people gaining more power through their elected representatives"
What does taxes have to do with this? It solves nothing if those politicians continue to spend poorly, as they are now and have been for a very long time. I hear no solutions for this, only claims that somehow more money handed to the govt will fix everything.
For a democratic society to really work, it helps that individuals are more or less equal. Don't interpret more or less too rigidly. Past a certain point, economic inequality breeds democratic disfunction and oligarchy.
> Once you reach a good standard of living, what perspective other than envy is there?
That's is a pretty messed up perspective. If a dictator provides you with what he considers a good standard of living; is it envy to want to have some of the power he denies you?
I suspect such accusations of envy are merely a way to defend the status quo by delegitimizing critiques and proposals for change. I'm not saying you're consciously trying to do that.
>>> If political power is created from economic power, then you're just transfering even more power to politicians by creating wealth taxes. It is concentrating it further.
>> This seems to be hinting at a kind of libertarian worldview that sees the government and politicians as some kind of unaccountable independent power. That's not the only way to think about government, and I'd argue that it's a pretty limited and ultimately unhelpful perspective.
>> A more democratic perspective is not so opposed to the people gaining more power through their elected representatives.
> What does taxes have to do with this?
Some of your questions are getting tedious. I quoted you some of the relative context from the thread, so you can answer your question yourself. It's pretty obvious.
> It solves nothing if those politicians continue to spend poorly, as they are now and have been for a very long time. I hear no solutions for this, only claims that somehow more money handed to the govt will fix everything.
This is hyperbole and a strawman. No one thinks more money will magically fix these problems, but it's pretty clear withholding money from the government has caused problems and will probably prevent the many problems from getting fixed at all. And even if all the money is wasted, there's still some value gained from decreasing inequality through the actions of taxes.
Taxes do not give more power to the people, if that's your answer. They concentrate it in the hands of a few, except this time its politicians.
Withholding money from the government is already illegal. The only possibility is an arbitrary judgement that there should be "more" paid, and if more money won't magically solve these problems then why isnt the attention placed no properly spending the money that is collected instead?
But the finance sentence hints at the real purpose - to take from those who have. Inequality isn't the problem. It's proper isolation from power. Money should be removed from politics, not poured into it.
The difference isn't as big as you think. It's just as accurate to say "there's nothing stopping you from toppling a dictator and gaining his power for yourself." You see that it's obviously complicated and difficult to do such a thing, and you're ignoring similar complexities in your statement.
Obviously many barriers prevent a common man from "gaining that power for [himself]." Things like not having the money (e.g. it helps to have money to make money), connections, or luck. These are things that a pull yourself up by the bootstraps capitalist fairy tale can't help with.
> So what is there other than envy?
A desire for democracy rather than aristocracy, for one.
Look, your question is the wrong one. It's clear you've internalized some false beliefs about how fair the current system is, and that prejudices you against those who want to change it. It would suggest you reflect and critically examine those beliefs. I did that, and got over similar beliefs as yours.
> But the finance sentence hints at the real purpose - to take from those who have.
No, that's not the real purpose, just your projection. The real purpose is to help remedy society's problems, and I think it would be beneficial to not to have an aristocracy.
> Inequality isn't the problem. It's proper isolation from power. Money should be removed from politics, not poured into it.
I think I said it before, but that kind of isolation is impossible. It's not the solution.
Capitalism is nothing but an economic system where an individual owns the means to production. That's it. Nothing more. You take the risks, create leverage, and either suffer the failure or enjoy the profit. Nobody needs to give you permission or gets to tell you what to do. It's the ultimate freedom to create your own living.
Many complaints about capitalism are just complaints about life not being fair. In that case, there is absolutely no other system that will give you more opportunity.
Instead of telling me my question is wrong or saying I have inherent biases, why not provide the actual argument? Otherwise I can just do the same to you and we end up nowhere.
Again, if those at the bottom are at a sufficient level of comfort, then there is no need to take from those above. And if political power is properly isolated from the influence of wealth, just about every issue with the wealthy now will go away.
So? It's just a society that's structured a little differently. There's "nothing" stopping you from taking the insane gamble to topple the dictator, and you would have a chance at success. Perhaps that chance can be reckoned as being "fair."
> Instead of telling me my question is wrong or saying I have inherent biases, why not provide the actual argument?
I've told you already: your premises are flawed.
> Capitalism is nothing but an economic system where an individual owns the means to production. That's it. Nothing more. You take the risks, create leverage, and either suffer the failure or enjoy the profit. Nobody needs to give you permission or gets to tell you what to do. It's the ultimate freedom to create your own living....
> Again, if those at the bottom are at a sufficient level of comfort, then there is no need to take from those above. And if political power is properly isolated from the influence of wealth, just about every issue with the wealthy now will go away.
Again, that kind of isolation is impossible. Let's consider a simple, extreme scenario that's illustrative: imagine a capitalist society where one person has managed to own everything, but deigns to employ all the common people and provide them with a "sufficient level of comfort." Even if there's still some nominal democratic system, it can't truly function. He owns and therefore controls the presses, the TV stations, and the servers, so only messages he approves can get out. The economic power of his wealth gives him control over the electoral system, and thus extreme political power. The democratic processes would be turned into a sham. Attempts at "proper isolation" would be incompatible with the rights of control that wealth implies, and would amount to taking property away from the world-owner.
Furthermore: In this scenario, no one can capitalistically challenge the world-owner's economic power, since he totally controls the resources they'd need to do so. No one else has their own freedom or autonomy, since they live in his system. It's also likely they'll disagree with the his idea of what a "sufficient level of comfort" is (as the history of shitty working conditions attest that owners have poor sense of this). The common people who may want to take away the world-owners wealth aren't driven by envy, they're driven by a desire for freedom and autonomy of their own.
This scenario is extreme, but its broad features hold in other systems of extreme inequality, such as a single corporate world-owner or an aristocracy. Democracy functions best when there aren't the extremes of inequality. You could say the same thing about capitalism, too (if your focus is on the general welfare and not some individual).
There's all kinds of books and resources that go into these topics and ideas much more skillfully than I can. I suggest you seek them out.
I'd much prefer taking money out of politics so that large wealth cant influence govt, at least before any changes to taxes.
Corporations are absolutely useless at spending it well. The government, on the other hand, has a long list of successful projects that required a tremendous of money—the interstate system, the hoover dam, the moon landing, and so on. Are there initiatives that wasted a ton of money? Of course. But look at any major company, and you'll find the same thing. Apple wasted most of a billion dollars on a sapphire plant that couldn't make what they promised, Google bought Motorola for $12 billion and then sold it 2 years later for $3 billion, every company Verizon or Yahoo! bought turned to garbage. The list goes on and on and on.
Regardless, the issue is government spending, not collection. I don't see how aggregating even more money into a few politicians is somehow going to solve anything, or what difference a few billion will make when the country spends trillions.
Programs are broken because of how money is spent, not because of how much.
So... you think that Warren is trying to add funding like a wealth tax, but... has no idea what to spend the money on?
That's the problem. Solve that first, then move on to taxes.
Citation very much needed. When you look at all of the things that our government successfully runs, and all of the thing that corporations successfully run, I'll stick with governments every time.
What does "successfully run" mean? A few major projects have turned out well. But many are failing. Otherwise why the constant need for money cash? What is a few billion going to change that a few trillion didn't?
Every storefront, vehicle, food item, article of clothing, the device you are reading this on, is all made and funded privately
Government is a net cost on society
Uh... dude, I got some news for you, about the country you live in.
Most people in this country don't even understand that democracy and capitalism aren't the same thing... Or that we only ever serve out one of those, and it's factually not democracy. Why is that? Why do we say democracy and mean capitalism?
Now without substantial adjustment to its ability to usurp and control power; it will remain perpetually imbalanced with economic power vastly outweighing the sum of our individual social power.
People in this thread want to talk about how this potential tax isn't fair within the context of a corrupt system. Well, I can't argue against that, it likely isn't fair, but that system itself is exceptionally corrupt. So, to argue it within that context is to already have lost.
This tax is fair because we have no checks and balances on our economy and this would be _the first_. This tax is fair because there are uncountable externalities that these individuals do not pay for and cannot pay for because it would be unreasonable burden for them to calculate it.
If you want to see the swap drain, stop letting the rich fill it. Stop consolidating power into one vertical... Stop pointing at the government and saying "look at how shitty and corrupt it is," because that corruption is fueled by money. Distribute the money, distribute the power, and a lot of this bullshit will fix itself.
... I'm done, this brought my headache back.
People who have this stance typically seem to understand "business transactions", i.e. two parties exchanging something that the other values, so I guess I'll try to keep it simple:
If you exist in a country with internet to post a comment on HN, you have taken something of value from the government of that country, and it's fair and reasonable to compensate them for that value by paying taxes. The cost of those services is never 0, and so the tax should never be 0.
So what's the ceiling?
I don't have a dog in this debate, but it seems like people would gain from at least having a cursory understanding of the basic arguments and counter-arguments so they don't repeat the same fallacies over and over.
This is a decent source: https://slatestarcodex.com/2017/02/22/repost-the-non-liberta...
All of these have been funded with taxes, and odds are that you've benefited (directly or indirectly) from them. Did you feel you deserved these benefits? Would you feel entitled to them despite paying no taxes?
Or the implementation involves a Constitutional Amendment.
But, sure, just fixing income taxes so that they incorporate the function of payroll taxes within the progressive scheme, and do not favor capital income (but do accommodate irregular income in a manner which is fair by allowing advance and deferred recognition of income to smooth spikes from non-repeated events, which will often involve capital income) is both constitutionally more straightforward and simpler method of shifting the overall tax burden more onto the rich.
Secondarily, I fail to understand the defense of such a policy by the "fair share" argument. Can someone explain? Here's how I see it: I am splitting a pizza among myself and seven friends. I cut it into eight pieces. My "fair share" is one piece, and does not change because someone else is hungrier. However, what the "fair share" of the "one percent" is, according to some people, seems to scale based on how many programs said people want to implement and how much they cost. Before anyone goes after my analogy, please excuse it; I understand that it doesn't fit perfectly, that not everyone has the same number of slices to start with, that the pie is not of constant size, ad nauseum. But even if I am re-distributing pizza from those who have twice as much to those who have half as much, the "just" amount doesn't fluctuate based on the relative hunger of the people in question; why, then, should the "fair share" increase because there are more things which people wish to fund? The taxes seem to be devised to keep up with the policies, rather than the government taking each person's "fair share" and doing as much as possible.
Effectively, it seems as though some people believe every dollar past a certain amount is part of a cash reserve with which politicians may fund things. This doesn't really seem "fair".
> We already have a wealth tax (inflation)
> which [...] hits the poor hardest.
A wealth tax does not hit the poor hardest.