Lots of people say this but very few have a concrete idea of what is needed to accomplish this. What taxes are the rich going to pay? Who among the rich? How does one define "rich?" Et cetera.
Taxes on real estate are the obvious answer here. Every residential property you own after your first should increase your tax burden substantially, such that you are incentived to sell them rather than hoard them and rent them out.
And own stock instead, or petroleum or any kind of virtual asset offshore, on which there way more little tax, meanwhile renting a mansion at home that belongs to your own subsidiary? Perfectly doable for the rich, it will raise no tax gains at all.
Don’t get me started on “taxing virtual assets beyond the 30th you own”.
It really isn't that simple, because again, no one really can say how it is so simple, merely that it is, somehow. Economists also talk about this point often, and they also can't agree, generally speaking, on how to, or even if to, reduce the inequality gap.
The best solutions I've seen are land value taxes, inheritance and estate taxes, and taxes on loans backed by stock; and among the worst are unrealized capital gains taxes.
And pretty-much any of those taxes would help the situation, so long as ultimately they boil down to the rich paying more per year than their profit margins and therefore shrinking inequality (redistributed to the people).
This problem isn't complicated because it's intellectually challenging. This problem is complicated because the balance of power is overwhelmingly favorable to the rich, and they have many means to both disrupt the conversation in intellectual circles and to block any political means of making these necessary changes.
See economist Richard D. Wolff for extremely simple answers to the above problem. Ultimately it is simply the math of value flows. Current system? Inherently concentrates at the top. Adjust taxes (any of them!!) to reverse that.
> This problem isn't complicated because it's intellectually challenging. This problem is complicated because the balance of power is overwhelmingly favorable to the rich, and they have many means to both disrupt the conversation in intellectual circles and to block any political means of making these necessary changes.
It can be both, one does not preclude the other. As I mentioned in my other comments, one can't simply adjust taxes without thinking about higher order effects, and it takes intellectual capacity to even think about what to tax in the first place and how, in order to reduce these effects.
> See economist Richard D. Wolff for extremely simple answers to the above problem.
The simplest solution is a wealth tax. Once you reach a certain amount of wealth, you are taxed for it. So for instance you might be taxed 50% of your wealth above $1 billion, annually. You might be taxed 25% of your wealth above $100 million (up to the next cutoff, so a billion in this hypothetical). You might be taxed 10% of your wealth above $10 million but below the next cutoff, and so on.
We could even take this further and make it illegal to have too much money. But like all laws, what ultimately matters is enforcement. Currently the IRS doesn't even make much attempt to go after the rich for tax evasion, so writing stricter laws is irrelevant if we don't enforce the laws we already have.
I'm not saying this is perfect but it is a simple solution that directly addresses the issue of wealth inequality.
What is wealth? How do you define it? How can you tax it? If it's in stocks, what does it mean to tax it? If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company? If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid?
It's not as simple as "make it illegal to have above X amount of money" because it's not really even money at that point, no one has X billion in cash lying around, it's tied to some physical asset. This is just one problem to your statement, there are many others.
Anything you own with a quantifiable monetary value. Yes, even if that value is not fixed.
> If I own a company worth X billion, does that mean I have to sell my shares to withdraw enough cash to pay my taxes, thereby tanking the value of my own company?
Yes.
> If I pay a lot in a downturn but my company does better in a boom, will I get refunded the extra tax I paid?
No. How does that even make sense?
The answers to these questions are easy, people you just don't like them, because they mean that those who have a lot and feel like they "got it fair and square" suddenly have to (gasp) contribute to society rather than hoarding all of that money to themselves. Even though you start to hit massive diminishing returns in terms of effect on your actual lifestyle once you're getting up into the million range, and see barely any effect at all of additional wealth or income once you're past, say, 100 million. It becomes just a dollar-denominated high score, so that you can feel smug about How Great A Businessman You Are, while millions of people starve on the streets unnecessarily.
So if your company tanks the day after the tax year cut off you're suddenly stuck with billions in debt and no assets? Seems like a pretty good reason to put your money elsewhere.
This is what the IRS is for. It's one of the only government organizations that actually makes more money than is put into it. So we'd just give them more money and resources to do their job, which would include wealth evaluation. And to answer your "gotcha" question you do get taxed on stocks in this scenario.
If you want to nitpick that every solution isn't as simple as fizzbuzz then there's no real point having a discussion. There are plenty of other tax alternatives that are also quite simple, you just seem to be unhappy with anything that isn't perfect.
> If you want to nitpick that every solution isn't as simple as fizzbuzz then there's no real point having a discussion.
No, that's the entire point of having the discussion. If the solution can't answer even these types of questions, then there's no point having the discussion, because it breaks down even upon initial examination.
> This is what the IRS is for. It's one of the only government organizations that actually makes more money than is put into it. So we'd just give them more money and resources to do their job, which would include wealth evaluation.
Sure, I agree in giving more money to the IRS, indeed that's happened recently, but even they are not going to tax unrealized capital gains.
> but even they are not going to tax unrealized capital gains
You are completely missing the point of the conversation you started. Everything we're discussing is a hypothetical. In this scenario, they would tax that and everything else.
Anyway, I don't think that you're arguing in good faith and I'm moving on with my day. Cheers.
Ironically I feel like you are the one not arguing in good faith.
> Everything we're discussing is a hypothetical. In this scenario, they would tax that and everything else
Your hypothetical is "the government taxes everything". Then someone asked, "how would that work?" and your response was "everything we're discussing is a hypothetical!".
There are many obvious ideas around taxing wealth. The problem is that when you think about how they would work in reality things get very messy and difficult. Proposing the idea is not the hard part.
> Your hypothetical is "the government taxes everything". Then someone asked, "how would that work?" and your response was "everything we're discussing is a hypothetical!"
Because he was mixing reality with the hypothetical. He was saying the IRS doesn't work that way in reality, which has no bearing to the discussions we were having which is a hypothetical. I explicitly stated in a previous comment that the IRS would also evaluate wealth and tax based on that wealth, and then he responds talking about how they don't tax unrealized capital gains. In this scenario they do, so why does that matter?
You're the one who brought the IRS, a concrete institution, into this hypothetical discussion, talking about "just [giving] them more money and resources to do their job, which would include wealth evaluation." Okay? So when I asked something like, how would this work, because this is such a hand-wavey answer as to be a non-answer entirely (how would they determine wealth evaluation? Sounds to me like you're saying, they just would), you couldn't answer.
The reality is, like the sibling comment says, just proposing a simple solution doesn't work, that's not the hard part. The hard part is actually exploring and understanding the problem of what actually happens were an institution such as the IRS be assessing wealth for taxation.
You have proposed an idea which does not actually provide any solution to the difficult part of your idea, which is this bit: "this wealth is determined by the IRS".
"determined by the IRS" is passing the buck big time.
> In this scenario they do, so why does that matter?
Because you're skipping the most difficult and pertinent part of the solution. There's not much substance to proposing a wealth tax based on wealth brackets. All the difficulty and nuance of a wealth tax is in determining how to reasonably tax someone's wealth (E.g. assets and unrealized gains).
I wasn't even claiming my original idea had much substance because it is so obvious. I hardly think I've solved a real-world problem because the real problem is people and politics while we're discussing theory. But if you want a simple proposal to address wealth inequality that's one way to do it. And wealth evaluation isn't an impossible problem because wealth is regularly evaluated in every market - real estate, art, stocks, cash.
No solution is ideal. But it's not an intractable problem because it's regularly solved every day around the world for all sorts of reasons. If we created a branch of government whose purpose was to do this I think they could figure it out. So in that sense I'm offloading the problem to people whose job it would be to figure out the problem.
Anyway, I've spent way too much time arguing about something I don't even care about. Cheers.
I think you two peeps discussion illustrates the root problem with the whole issue to taxation and wealth. We start out with ideas for solving it, but quickly the scale of the mess that is the ‘wealth system’ quickly busts pretty much any solution. Trying to appreciate the true scale of the problem and any solutions becoming quickly impossible. And I think this is by design. It protects the system for the wealthiest…
Okay, no worries. It seems you wanted to reply to me but then are unable to show anything regarding your viewpoint when I ask questions about it, even, yes, in the hypothetical, so it's not worth my time to ask any questions either.
"What is wealth? How do you define it?" I think I've done myself an injury from rolling my eyes too hard. Tax departments have this incredibly hard question covered, for some time now
No, they do not have this question covered. Look at the few countries that actually have a net wealth tax and how inadequate their calculations are. This is not a solved problem by any means.
Economists are part of the problem. When the rich are getting richer and the poor work their asses off and still get poorer, then just about any solution is better and the more decent thing to do than keeping disagreeing about what is the best solution.
This is the exact same thinking that brought us the Four Pests campaign, or the cobra effect. They also thought that any solution was better and didn't think about the higher order consequences.
The goal is to make the system more fair, not eliminate one of the parties involved. Taking such an extreme position in an argument also doesn't help the situation.
The goal is to make the system more fair, not eliminate one of the parties involved. Taking such an extreme position in an argument also doesn't help the situation.
Yet it seems to me at least, that you are taking the extreme position. People are arguing for nuanced improvement, and discussing what issues may arise.
You're essentially saying "Enough talk, do random things". In fact, you're saying "do almost anything", which is quite extreme.
The point I made in the other sub-thread, is that many many other countries did that very thing. Whether by revolution, or elected and then massive change, these countries ended up with utter devastation, and in some cases 100% poverty.
I get you're frustrated. Fair enough. But waving away how difficult these issues are, just isn't workable.
To that end, I see people criticize:
* low interest rates
* high interest rates
* 0 interest rates
* quantitative easing
* methods to prevent bank collapses
* methods to reduce the depth of a recession
* methods to slow economic growth (reign in inflation)
Quite literally, no matter what anyone does, people are yelling "Idiots!" at the result. Meanwhile, the results compared to other nations aren't horrible.
I 100% agree that we need to look at ways to reverse the trend of wealth equity. But to say it's just simple and easy, just snap your fingers and try stuff?
> The point I made in the other sub-thread, is that many many other countries did that very thing.
If we examine the set of 'many other countries', does it consist 90% of dictatorships, that were already in poverty, and the methods chosen 70% violence?
What if, the aim of these actions was never to improve the economy, but instead was to consolidate power for the dictatorship in question and to remove elites that could pose competition?
What if the set of 'many other countries' is a very unfair example? The author is not suggesting violence, and we do not live in dictatorship?
Fuck the World Bank numbers. I’ve been to Sri Lanka and poverty is real over there.
Oh, and “According to the U.S. Census Bureau, the official 2017 poverty rate in the U.S. was 12.3%. However, other sources placed it as high as 17.8%. [snip] The 2021 poverty threshold in the United States is $26,246 for a family of four”.
So the poverty figures are relative to the wealth of the country? That makes the numbers meaningless to compare (since there is no standard cutoff - just pick a number that gives you a poverty rate of x%).
35 million people in the US live in poverty? That's total nonsense coming from the fictional "poverty line". If we stick to absolutes and define poverty as something as for example "not being able to house, feed, warm, clean or clothe oneself" (so basically - not being able to fill one of the basic human needs, due to insufficent funds) then there's almost no poverty.
Most things aren't so simple and still, it can be done. We got a man on the moon, we split the atom, we built software that can (almost) perform as well as a human being, surely we can tax the rich and corporations more to bring inequality down.
If people think taxes are too complicated (which I don't think is the case) so be it - You can simply transfer money to the poorer people, like what happened in Covid but focus on the poor. Every citizen will have a net worth number, everyone will get a sum of money, the less you have the more you get. Now that will be inflationary of course but the burden will go to the rich instead of the poor.
