TigerTalker142

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Hmmm, that data doesn’t seem to jive with the tax policy center data I have been referencing lately. I wonder if there is something I am missing?

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Oh man. Well what you linked is trying real hard to twist itself into a pretzel to say well actually the wealthy really aren’t even benefitting that much here. It knows it’s doing this because, it spends nearly 75% of the article, not talking about their own methodology or research, but instead talking about how you can’t actually believe anyone else’s reporting on this and that their interpretation is the only true representation of this data….CATO Institute was founded and is funded by the Koch Brothers so not really surprised that’s the bent here.

Anyways, their premise is that it doesn’t matter if magnitudinally by both % and dollar amount the TCJA reduces tax liability for the top earning quintiles significantly more then the other groups. That apparently tells you nothing about who benefits most. Instead you have to take the reduction in tax liability divided by the total individual tax burden, then use that % to show who actually benefits most. Given our progressive tax system, the highest quintile will always have the highest tax burden (and thus a much higher denominator), so would need significantly larger cuts to their tax liability(the numerator) relative to other quintiles for this equation to ever show the top quintiles benefiting most. It’s really disingenuous.

Ex. Someone with a 4% effective tax rate gets a 1% cut they received a 25% reduction. Someone with a 30% effective tax rate received a 3% cut they received a 10% reduction. The person with the 3% cut “benefits the least”.

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Yes, it is called the laffer curve.

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You can speculate there’s some laffer curve adjacent element at play to some extent at the absolute highest rates of the past 70 years, and there’s likely some merit to that, but generally it seems most economists are fairly critical of the laffer curve, or at the very least are incredibly skeptical that we’re on the wrong side of the curve at our current tax rates or even particularly close.

I’ve never suggested the wealthiest aren’t responsible for a large portion of tax revenues, in fact given the wealth and income disparity mathematically they have to be.

As the wage gap increases and earnings as a % of GDP increases for that cohort their progressivity ratio in the chart you posted would have to go up. The additional income they earn as the wage gap increases is more likely to be taxed at the highest marginal rate resulting in increases to this ratio.

You just keep posting charts that seem to show that income disparity is increasing.

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Tax revenue from the rich as a % of gdp is the same as it was in the 1950s

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If anything that just illustrates the point that there’s a major issue haha.

The chart seems to be saying that reducing the top marginal rate drastically has had minimal impact on the revenues generated by that group. In fact revenues seem to be growing. Even flat revenues imply they must be increasingly earning more as a share of GDP than the other cohorts to be able to make up for the shortfall that would otherwise be caused by the decrease in the top marginal rates.

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You think that 70mm you have left after paying your fair share of taxes should have a 3% asset tax on it?

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I think the 20 million above the 50 million dollar threshold could, and likely should be taxed, if the US government wants to find additional ways to raise meaningful revenues in a way that would have minimal impact on the demographic being taxed.

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Why are we punishing people who have been more successful than others, most likely through hard work? Shouldn’t tax rates just be the same across the board?

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It's not punishing. It's paying back into the system that gave them the opportunity to become so wealthy, that they, and their children, and their children's chidren would likely never need to work again a day in their life again. I mean in many cases we're literally talking about situations where it allowed the individual in questions parents or grandparents to become so wealthy that the individual with the $50m plus in wealth has never actually worked a day in their life.

Virtually anyone that gets to the level of wealth we described, did not just do so on the basis of them being a "harder worker" then everyone else that isn't as wealthy as them. They took advantage (rightly) of the system that's been set up through the work of 100's millions of others and trillions in tax revenue.

If they started their company in the US they had access to a highly educated workforce in large part funded by public dollars, as well as sources of cheaper labor that would have been in part subsidized by public dollars in the form of Medicare/Medicaid, SNAP benefits, social security, etc. They had access to sophsticated logistics pipelines who utilize public infrastructure to move goods. They had access to the best capital markets in the world to raise funding, and find partners for expansion and growth. Markets that are in large part so robust due to the federal governments willingness to use taxpayers dollars to back them in the event of emergency and to provide small business loans, grants, etc. to help subsidize industries and the growth of companies.

There's a million other cascading effects you can point to where taxpayer dollars in some way (directly or indirectly) subsidized their business or their upbringing or gave them an edge they otherwise wouldn't have had in another country.

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Shouldn’t tax rates just be the same across the board? You pay a certain percentage of your income and if we are making more money that percentage results in a higher amount of taxes paid. Why does the doctor have to give up a higher percentage of the money he made than the car salesman? If I make 100k a year, I pay 20k at a 20% rate. If I make 1mm a year, I pay 200k a year at a 20% rate.

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We're talking about wealth that is so beyond your numbers it's not even really comparible. Your example is essentially two W-2 employees working everyday and paying taxes on earned income that is directly correlated to the amount of hours they worked and time spent. Then implying they shouldn't be treated dramatically differently, just because the pay rate is higher for one. I can appreciate where you're coming from here, but even then I would make the argument that a progressive tax system here is still better due to diminshing marginal utility, and having access to markets that allows for excess income to compound with no extra hours or work put in. The doctor is still in a much more advantageous place with much less loss of "satisfaction" even at a higher effective tax rate.

However, the money we're talking about even considering a wealth tax on is not even remotely comparable to your examples. This is past anyone needing to work or spend time to generate this wealth. They already have it. The lowest threshold I threw out of $50 million can sit in a savings account or money market fund at today's rates and accrue ~$2 million dollars a year. So no work at all is done and it earns what your car salesman would earn in 20 years.

I think you, like many others, get stuck in a place where you don't even really appreciate how much money that level of wealth is or how it's completely decoupled from "work" or "effort". Even the high end of your example (which is a profession that has potentially the most expensive up front costs in the world, requires arguable the most schooling, is indispensible, in demand, and provides potentially the most objective sociatal benefit of any job) would make half (and most doctors make much less then $1m a year) of what the lowest threshold of wealth I put out there earns if for some reason all their wealth was just in a money market account (spoiler it would likely be earning much more). With zero effort expended on the part of the individual who is wealthy. That doesn't seem particularly "fair". I clarified this at the beginning, but again I'm also only saying tax them based on the wealth above that $50m mark.

As that other poster said, it doesn't even really mean anything at that point. It's numbers on a screen. Whether they have $50,000,000 or $1,000,000,000 they don't have to ever do anything again and they'll make more then 99% of the country every year. We're not doing these individuals some great injustice by levying a 3% tax. It's silly.

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Billionaires should be paying an ungodly tax on every dollar they make over $1B/year. Like 90% kind of ungodly. Those people at that level don't give a single frick about the money itself, it's nothing more than a game at that point. frick 'em

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Exactly this. It’s obscene how much money this is. As of Q1 of 2024 1% of the country held 30% of the wealth and the bottom 50% held less then 2%….if you want to generate meaningful revenue in this country with the least impact to the individual you need to go after the ultra wealthy. And you need to base it off wealth not income.

An annual 3% tax based on the value of total assets owned over say 50 million. Would not affect the quality of life of those individuals at all, and something like real estate or equities would almost certainly appreciate greater then that 3% in a given year. Or increase long term capital gains tax for people with say 50 million in assets to be taxed at ordinary income levels or to be some much higher number the more wealth you have.

If you have over $50 million in assets and you take a loan against assets you have to recognize any gains in those assets at that point up to the amount of the loan.

Plenty of ways to collect and those folks wouldn’t have to change how they live their lives at all. Not sure why we’re hellbent on making people who already have very little give up their healthcare to make up for a deficit, rather then go after revenue from people whose lives won’t be impacted at all.

You're absolutely correct. Certainly historically, if you were able to save diligently and live within your means you would likely be able to retire with a nice nest egg.

The video is speaking more to the current and future state of the average member of society's ability to actually be able to save enough wages to perpetuate this cycle, and posets that increasing asset accumulation with the richest likely will/already is having impacts on the average person's ability to do this.

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If you're putting $10M to work it's going to go 100X further than $100k, all else being equal. Think of all the jobs that's creating, all the benefits derived from $10M of invested capital.

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Yes, I understand the economic potential $10,000,000 has is greater then $100,000.

I was responding to his argument that people's lack of willingness to sacrifice or work hard is the reason we see less and less people being able to retire or be able to afford home's etc.

Owning assets that generate $10,000,000 doesn't correlate to how "hard" an indivudal worked or the sacrifices they had to make. In the same way that large swaths of society being increasingly unable to afford things that were previously affordable would not be primarily due to their lack of willingness to work hard and/or sacrifice.

Those two factors aren't the sole indicators of the wealth someone is able to generate.

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you think money is a finite resource?

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No, but many assets purchased with it (such as real estate) is.

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Because less people are willing to make the sacrifices necessary to do so. It isn't because of other more wealthy individuals.

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You think someone who generates 10 million dollars a year passively just from owning assets (that may have been passed down to them from some other individual) produces 100 times more value through their individual labor annually and/or has sacrificed significantly more through their life then a person who makes $100,000 a year? Wealth allows you to generate signficantly more wealth with less actual economic input/individual effort needed from the individual. Not necessarily a great metric of how hard an individual has worked and/or sacrificed.

Housing prices outpacing wage growth isn't a function of people not working or sacrificing enough.

Compound Interest Will Not Make You Rich

Interesting take on the impacts of wealth inequality.

Edit: So many comments within minutes of a 20 minute video haha.

If you were to actually watch, the point is that yes while some portion of society will make enough to support them through retirement and in some cases will even have some money left over to pass on. The path we're increasingly on is that those individuals are becoming fewer and fewer. The cause proposed is that increasingly finite resources and hard assets are being continually bought up by the ultra wealthy, who are growing their wealth faster then the economy can innovate/grow. So they just cannabilze what was previously owned by the middle class.

LINK

TLDR; This issue was already audited by the inspector general and cleared. Yes, there are millions of entries for folks older than 112 in the SSA database. No, they aren't being paid benefits, and the cost to manually correct these death dates and/or add dates in instances where no dates are on file (the vast majority of these cases) would have no positive benefit on cost savings for the SSA, so they aren't going to go back and do it. They have implemented new processes to increase accuracy in the future.

Additionally, the report indicated only 44,000 individuals born in 1920 or earlier were receiving benefits while as of the 2015 census there were 86,000 centenarians reported.

Also, the SSA does not pay claims to people older than 115, by rule.

LINK

This is a red herring of an issue, and has already been audited and information on it has been publicly available for years.