What you do think is the number one issue facing us at the moment?

If that were the only factor, we would see the same income and result inequalities today that we saw 100 years ago, since people have not gotten any more or less equal.

We have, however, seen a massive increase in inequality of outcomes. So there's something else at play. We should fix whatever that factor is.

And history is not something that should be ignored.
The difference today is a much larger economy. If everyone was still farming, there wouldn't be such differences. Should we "fix" that and return to farming?
 
I think rich people should pay taxes at rates similar in proportion to the rates everyone else pays. In gross terms it is more than everyone else but no-one gets more direct and indirect benefit from taxpayer funded governments and their programs than rich people. Their ability to persuade politicians - politics as a direct transaction with politicians, political parties and media rather than as an individual vote - and undisclosed, behind closed doors - looks like corruption to me.

Taxpayer funded governance protects their assets (sometimes even protects assets in other nations), provides or oversees economy wide infrastructure like roads, water, electricity that companies benefit from . It makes regulated markets within the rule of law, that protects their honest entrepreneurial efforts from Corleone Family style competition. They benefit from a pool of potential employees that have basic education and (elsewhere more so than USA) health care so employees are more productive and businesses more profitable for it. Union led worker ability protected by law to negotiate wages has resulted in lots of people having disposable income, which makes overall demand for goods and services. And whilst the bankruptcies and people out of work of a business losing competitiveness don't appear on the winning businesses' books they are on the nation's books. The winner doesn't always get that way by playing fair, by the rule of law - or from free markets. Vast wealth accumulation is often indicative of failures of free market competition as much or more than indicative of it's success.

We need governments to look beyond the shortsightedness that is free market economics or else the near term self interests of the influential wealthy forever trumps any longer term greater good for the many. Or else businesses will exploit community levels of education that previous taxpayers funded whilst refusing to fund future education. Or make their business more profitable by paying lower wages as a micro effect where every business doing that will cut the consumer demand they depend on as a macro effect.

For all their successes at accumulating and preserving their wealth their innate self interest makes their ability to influence political policy and tax policy is not matched with any wise and farsighted concerns for long term social and economic impact or any greater good; we need politicians and governments that aren't for sale for that.
 
I think rich people should pay taxes at rates similar in proportion to the rates everyone else pays. In gross terms it is more than everyone else but no-one gets more direct and indirect benefit from taxpayer funded governments and their programs than rich people. Their ability to persuade politicians - politics as a direct transaction with politicians, political parties and media rather than as an individual vote - and undisclosed, behind closed doors - looks like corruption to me.

Taxpayer funded governance protects their assets (sometimes even protects assets in other nations), provides or oversees economy wide infrastructure like roads, water, electricity that companies benefit from . It makes regulated markets within the rule of law, that protects their honest entrepreneurial efforts from Corleone Family style competition. They benefit from a pool of potential employees that have basic education and (elsewhere more so than USA) health care so employees are more productive and businesses more profitable for it. Union led worker ability protected by law to negotiate wages has resulted in lots of people having disposable income, which makes overall demand for goods and services. And whilst the bankruptcies and people out of work of a business losing competitiveness don't appear on the winning businesses' books they are on the nation's books. The winner doesn't always get that way by playing fair, by the rule of law - or from free markets. Vast wealth accumulation is often indicative of failures of free market competition as much or more than indicative of it's success.

We need governments to look beyond the shortsightedness that is free market economics or else the near term self interests of the influential wealthy forever trumps any longer term greater good for the many. Or else businesses will exploit community levels of education that previous taxpayers funded whilst refusing to fund future education. Or make their business more profitable by paying lower wages as a micro effect where every business doing that will cut the consumer demand they depend on as a macro effect.

For all their successes at accumulating and preserving their wealth their innate self interest makes their ability to influence political policy and tax policy is not matched with any wise and farsighted concerns for long term social and economic impact or any greater good; we need politicians and governments that aren't for sale for that.

Your presumptions aren't accurate. The average effective tax rate for the top .1% is 25% and the average effective rate for the average taxpayer is 22%.

The average taxpayer contributes to a 401k and has a standard deduction.
 
I think rich people should pay taxes at rates similar in proportion to the rates everyone else pays.

However... some of the richest (Multiple Billion Airs):::

Zuckerberg... Gates...Allen... Branson.. Buffet... Musk... Blakely... Turner... Ellison... Bloombert... often give money to good causes... an some have announced that they intend to give 1/2 of ther Billions to good causes after they die to help make the world a better place.!!!

"These ten billionaires are proving that the 1% don’t always keep most of the money."

https://www.dividend.com/how-to-invest/10-billionaires-that-are-giving-away-their-fortune/

The people who was smart enuff to make all that money will be the best to deside what it will be spent on...
so in the end... don't you thank the average person will benefit more under the current tax system.???
 
The difference today is a much larger economy. If everyone was still farming, there wouldn't be such differences. Should we "fix" that and return to farming?
In the 1900's most people weren't farming - and there were poor and rich then as well. It was the era of Rockefeller, Carnegie and Vanderbilt, although the Vanderbilts peaked a little before 1900. But the gap wasn't as large; there wasn't nearly as much wealth concentrated in those upper echelons.

So what was different? One clue comes from Carnegie's work called "The Gospel of Wealth." It called on the rich to use their wealth to improve society, expressed support for progressive taxation and an estate tax, and pushed philanthropy. He also warned about charity that tended to keep the poor, poor. Some notes from his gospel:

- He noted that heirs of large fortunes frequently squandered them in wasteful excess and ostentatious living, and he decried that.
- He gave advice on how to distribute accumulated wealth and capital to the communities they originated from.
- He advocated death taxes for those unwilling to give back: "By taxing estates heavily at death the State marks its condemnation of the selfish millionaire's unworthy life. It is desirable that nations should go much further in this direction."
- He was strongly in favor of progressive taxes: "Indeed, it is difficult to set bounds to the share of a rich man's estates which should go at his death to the public through the agency of the State, and by all means such taxes should be granted, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until of the millionaire's hoard, at least the other half comes to the privy coffer of the State.".

It was, in other words, a polemic on using the money to improve the infrastructure that allowed them to become rich in the first place, in the hopes that others could follow in their footsteps. Both via governmental and private channels.

Nowadays, people who pay a lot in taxes and give away large amounts to charities are considered stupid, evil, and something of a sucker. Indeed their charitable contributions are often the foundation of various conspiracy theories ascribing a desire to "take over the world" through nefarious means.
 
In the 1900's most people weren't farming - and there were poor and rich then as well. It was the era of Rockefeller, Carnegie and Vanderbilt, although the Vanderbilts peaked a little before 1900. But the gap wasn't as large; there wasn't nearly as much wealth concentrated in those upper echelons.

So what was different? One clue comes from Carnegie's work called "The Gospel of Wealth." It called on the rich to use their wealth to improve society, expressed support for progressive taxation and an estate tax, and pushed philanthropy. He also warned about charity that tended to keep the poor, poor. Some notes from his gospel:

- He noted that heirs of large fortunes frequently squandered them in wasteful excess and ostentatious living, and he decried that.
- He gave advice on how to distribute accumulated wealth and capital to the communities they originated from.
- He advocated death taxes for those unwilling to give back: "By taxing estates heavily at death the State marks its condemnation of the selfish millionaire's unworthy life. It is desirable that nations should go much further in this direction."
- He was strongly in favor of progressive taxes: "Indeed, it is difficult to set bounds to the share of a rich man's estates which should go at his death to the public through the agency of the State, and by all means such taxes should be granted, beginning at nothing upon moderate sums to dependents, and increasing rapidly as the amounts swell, until of the millionaire's hoard, at least the other half comes to the privy coffer of the State.".

It was, in other words, a polemic on using the money to improve the infrastructure that allowed them to become rich in the first place, in the hopes that others could follow in their footsteps. Both via governmental and private channels.

Nowadays, people who pay a lot in taxes and give away large amounts to charities are considered stupid, evil, and something of a sucker. Indeed their charitable contributions are often the foundation of various conspiracy theories ascribing a desire to "take over the world" through nefarious means.

You are talking about the Gilded Age (which was just a little earlier). The "rich" then tended to get there via monopolies so it was much closer to a zero sum game. Quoting Carnegie is neither here nor there.

Today when politicians talk about taxing the "rich" it isn't limited to Gates , Bezos, etc. It come down to the sub-millionaire level. Gates and group are just the scapegoats. Most of those do give away much of their wealth, as you already know.

My response to Ken's post above bears repeating, they aren't taxed less than the average person. The problem were are facing isn't how much the top 10%, 1% or .1% are taxed. They pay the majority of Federal Income taxes already.

Spending is the problem. There aren't enough rich to fund our current spending. I'm also not aware that people who give are seen as suckers. I also see little evidence that the government is particularly effective in what they do spend money on. Very few social problems are going away. I understand that your belief is otherwise.
 
Y...
My response to Ken's post above bears repeating, they aren't taxed less than the average person. The problem were are facing isn't how much the top 10%, 1% or .1% are taxed. They pay the majority of Federal Income taxes already.

Spending is the problem. ....
OK---as/re "income taxes" the super rich do not have that sort of income ---their income is "passive" and. so that is taxed as capital gains, which has a lower tax rate
eg: if I buy 1000 shares of a stock at 60, and it is now worth 180---I have an unrealized gain of 120,000---and will not be taxed until i sell
and then, I will pay 15%, meanwhile if I have an active income of 100,000 I will be taxed at 25% which is much more that the tax on the 120,000 gain. So---"tax the rich" would mean raising the capital gains tax---then, to be fair, the gain should be indexed to inflation---eg the above stock was held for 4 years, so does not accurately reflect one years earnings.-----it gets complicated---

The problem with government spending is that the congress is spending OPM(other people's money), and, so they are much less frugal than if they were spending their own money.
 
OK---as/re "income taxes" the super rich do not have that sort of income ---their income is "passive" and. so that is taxed as capital gains, which has a lower tax rate
eg: if I buy 1000 shares of a stock at 60, and it is now worth 180---I have an unrealized gain of 120,000---and will not be taxed until i sell
and then, I will pay 15%, meanwhile if I have an active income of 100,000 I will be taxed at 25% which is much more that the tax on the 120,000 gain. So---"tax the rich" would mean raising the capital gains tax---then, to be fair, the gain should be indexed to inflation---eg the above stock was held for 4 years, so does not accurately reflect one years earnings.-----it gets complicated---

The problem with government spending is that the congress is spending OPM(other people's money), and, so they are much less frugal than if they were spending their own money.

That was all taken into account in that effective tax rate that I quoted. The income tax rate is progressive so they pay more on their income, most wealthy people do have income in addition to possible realized long-term capital gains.

However, there is a reason for taxing long-term capital gains at a lower rate. It encourages investing (and additional risk) rather than simply saving that money. As you mentioned, those gains aren't reduced to reflect the effects of inflation and most of that gain, these days, is actually just inflation (debasing of the dollar).

The "rich" aren't the only ones who own stocks. Most people own stocks, at least though their 401k plan. That's not taxed until retirement. If you own an index fund outside of such a plan you also benefit from the long-term capital gains rate. Why would you want that taxed the same as wages?

You also don't take into account all of the tax exceptions that the average person has.
 
Quoting Carnegie is neither here nor there.
Feel free to ignore anything he posts. Since he 1) represents a time when there was not as big an income gap and 2) he discusses concrete mechanisms to keep it that way, it would seem relevant.
Today when politicians talk about taxing the "rich" it isn't limited to Gates , Bezos, etc. It come down to the sub-millionaire level.
Let's look at Biden's actual proposal here:

  • Tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income above $1 million and tax unrealized capital gains at death above a $5 million exemption ($10 million for joint filers).
  • Impose a minimum effective tax rate of 20 percent on an expanded measure of income including unrealized capital gains for households with net wealth above $100 million.

So new taes only for people making more than $1 million a year, or worth more than $100 million. Doesn't seem that bad, and is in line with Carnegie's recommendations.

I'm also not aware that people who give are seen as suckers.
A very prominent politician claimed that the reason he didn't pay taxes is that he "is smart." This is a common theme, expressed even within this thread.
Very few social problems are going away.
Slavery seems gone. Most diseases are now well managed. Racial bias is at least getting better.
 
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Let's look at Biden's actual proposal here:

  • Tax long-term capital gains and qualified dividends at ordinary income tax rates for taxable income above USD 1 million and tax unrealized capital gains at death above a USD 5 million exemption (USD 10 million for joint filers).
  • Impose a minimum effective tax rate of 20 percent on an expanded measure of income including unrealized capital gains for households with net wealth above $100 million.

So new taxes only for people making more than USD 1 million a year, or worth more than USD 100 million. Doesn't seem that bad, and is in line with Carnegie's recommendations.

It makes no sense, IMO. There's either a reason that long-term capital gains are taxed at a reduced rate (to encourage risk taking for investing) or there's not. If there is a reason then it would apply even more to those with the capital to make large investments.

It makes no sense to be as low as USD 1 million either since that's not just people whose wages are USD 1 million a year but it also includes anyone who sold land on a one time basis where there was USD 1 million in capital gains.

It also makes no sense (even though it's worded this way all the time) to make these limits for individuals and double it for couples. You are divorced and want to leave your USD 10 million estate to your heirs but your limit is USD 5 million so I guess you have to quickly get married?

It's the same with a house. If you live in a HCOL area and have USD 500k in equity in your house and you sell it, you're OK if you are married. If you aren't then you can only exclude USD 250k in gains. It's the same house. This makes no sense. Therefore you have to move every few years to start the clock over.

It's also ridiculous, IMO, to take 20 percent of someone's wealth every year. If all of their wealth is in a company that they started, they have to sell 20 percent of their stock every year? Why?

It's also not practical to tax wealth that isn't realized. Do they get to write off unrealized loss each year that the stock market goes down?


A very prominent politician claimed that the reason he didn't pay taxes is that he "is smart." This is a common theme, expressed even within this thread.

Like quoting Hitler, quoting Trump isn't a winner for any discussion, IMO.

Slavery seems gone. Most diseases are now well managed. Racial bias is at least getting better.

Sure, throwing victims to the lions seems gone as well as throwing virgins into volcanoes. Disease isn't a social problem, it's a health issue and it is still with us. Crime, poverty, inequality of outcome, no so much. Those are results of reality and the human condition.
 
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It makes no sense, IMO.
So you've gone from 'when politicians talk about taxing the rich, they are talking about taxing sub-millionaires' to 'OK it's not sub-millionaires, but it makes no sense.' I'll take it.
It's also ridiculous, IMO, to take 20 percent of someone's wealth every year. If all of their wealth is in a company that they started, they have to sell 20 percent of their stock every year? Why?
They don't. Read the proposal more carefully. They only get taxed on GAINS, not total wealth. Right now no one gets taxed on gains until they sell.
Do they get to write off unrealized loss each year that the stock market goes down?
Yes, and canny tax advisors will of course take advantage of that to reduce taxes on the rich.
Like quoting Hitler, quoting Trump isn't a winner for any discussion, IMO.
He is, however, the leader of one of the two American political parties - so his statements are quite relevant (unfortunately.)
Sure, throwing victims to the lions seems gone as well as throwing virgins into volcanoes. Disease isn't a social problem, it's a health issue and it is still with us.
Public health is indeed a social issue. One of the big reasons we are healthier overall is not necessarily vaccines, MRI machines or chemotherapy treatment regimes - it's sewers, and sinks in public bathrooms, and "wash your hands" "don't poop in the river" campaigns/laws.
Crime, poverty, inequality of outcome, no so much. Those are results of reality and the human condition.
Poverty is, on average, not getting worse, and other than the lowest quintile, all other groups are improving in income. So that's part of the problem solved.
 
They don't. Read the proposal more carefully. They only get taxed on GAINS, not total wealth. Right now no one gets taxed on gains until they sell.
That's unrealized gains. What is "gaining" is the stock value. To pay that would potentially require selling enough stock to pay the taxes. I don't think unrealized losses are going to be permitted (as opposed to realized losses).

...
Poverty is, on average, not getting worse, and other than the lowest quintile, all other groups are improving in income. So that's part of the problem solved.
It's not solved by taxing the rich. As they say, a rising tide lifts all boats.
 
Ah yes. Trickle-down economics. Because that has been proven to work.

There is no such thing as "trickle-down economics" other than as a political term of derision. Supply-side economics describes the supply-side and demand-side economics describes the demand side and they are both accurate descriptions.

I don't think this subject is in your knowledge base is it?
 
I would "right size" the military. Strategically assess what is most important and fully fund that and start to cut the rest. We should be concerned with China, Iran and Russia.

Local regions can take care of most of the rest. We don't need 800 bases in 80 countries. If we close any domestic bases, if that land is used by the public sector it will benefit the local economy more than the base did as well.

We need to put Social Security on a sound footing. The money you put in is the money you get out. That kind of a plan wouldn't be a burden. We also don't need to be "investing" in Treasuries. That's government debt. Government debt is what we are trying to get away from. The dollar is just debase year by year.

Medicare costs are expensive and inefficient. We need a single payer system even if it is largely run though the private sector. The current system is too much of a mishmash of government policies and guarantees, insurance, the private sector and we get the worst of each system.

Government employees cost the government, for a similar job, much more than they would cost the private sector. Government wages are a little less, in general, but overall benefits are much more. I think the average private sector job costs the employer about $90k including all benefits. In the government sector that number would be about $140k (as I recall).

The benefits in the government (public) sector are being paid for indirectly by the private sector. We know Congress votes great benefits for themselves but it's the same for the whole public sector. We should get that more in line with the private sector (or even slightly below since jobs are much more stable).

I think we should leave the step-up basis at death alone but since we have this large public debt, we could have a Federal Estate tax (at death) of no more than 10%.

We could raise everyone who pays Federal Income taxes no more than 2%.

That would be the extent of the tax increases, no populist "tax the rich", just small realistic incremental increases that I've mentioned.

To do anything else (large increases on one segment) is just politics and it's not serious. The main problem is that voters need to start voting for candidates of both parties that will go to Washington primarily to reduce the debt.

To do anything else is unsustainable and irresponsible.
 
That's unrealized gains.
Correct. Gains being the key word there.
It's not solved by taxing the rich. As they say, a rising tide lifts all boats.
A rising tide lifts all boats. But people aren't boats, and making the rich richer do not make the poor richer as well - unless there's some explicit pathway to make that happen (like, say, higher taxes from those richer people being put into infrastructure that helps the very poor.)
 
There is no such thing as "trickle-down economics" other than as a political term of derision. Supply-side economics describes the supply-side and demand-side economics describes the demand side and they are both accurate descriptions.

David Stockman was a Republican U.S. Representative from the Michigan and, later, the Director of the Office of Management and Budget under Reagan. His take on it:

"It's kind of hard to sell trickle-down, so the supply-side formula was the only way to get a tax policy that was really trickle-down. Supply-side is trickle-down theory."

So yes, there is 'such a thing' as trickle down theory and in fact it was Reagan's plan all along. You may not like the term any more, but Stockman stated that's exactly what it was.
 
To do anything else (large increases on one segment) is just politics and it's not serious.
History disagrees. At one point the top tax bracket was 91%. It worked. No one is suggesting anything that large these days, of course.
 
Correct. Gains being the key word there.

A rising tide lifts all boats. But people aren't boats, and making the rich richer do not make the poor richer as well - unless there's some explicit pathway to make that happen (like, say, higher taxes from those richer people being put into infrastructure that helps the very poor.)

Unrealized being the key word there.
 
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