Tax the 1% (or not?)
2021 October 28 15:28 Eihposono 672¤ 1045¤
"Under today’s tax system, they don’t have to pay capital-gains taxes unless they sell their assets, and they can borrow against that wealth to finance their lifestyles."
The new Wyden plan tries to cap billionaires ability to get away with not paying taxes. What do you think? Good policy or bad?
I'm personally pro this decision. Every one should pay taxes to support the societal infrastructure they benefit from. It's obscene that they don't give back to the society that made them their money. Do you see an ethical argument that supports being a multi-billionaire?
https://www.wsj.com/amp/articles/how-the-billionaires-income-tax-would-work-11635325201
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2021 October 29 22:11 kaxline 622¤ 1467¤
I am way for this, for all the obvious reasons. The best argument against it in my mind is that we shouldn't have gotten to this point and there are better, more comprehensive, and more fair ways to get this tax revenue.
The more I see us argue and waste time over these different flavors of policy, the more I'm in favor of a flat 30% tax for everyone who currently pays taxes.
That's it. No loopholes. No industry of tax prep companies. No misunderstandings. No arguments. Nothing. Everyone gets it, everyone plays by the same rules. It just makes sense. One of those good ideas that will never happen, in my mind.
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2021 October 30 09:47 stuartscott 1343¤ 496¤
The difficulty is determining the amount to tax; 30% of what?
The current system is skewed toward income, but the 1%'s wealth is not from income, but instead in lots of early shares of successful companies. These shares are never sold and therefore never taxed, although they can be used to take a loan out. If they are truly unrealized gains then how can it be legal to consider them for any financial use cases until realized?
There needs to be a better way to calculate total taxable wealth, as if someone died and all their earthly possessions were piled up, how much would it be worth? That amount could then either be used to calculate 30%, or everyone is ranked and the higher your rank the more you pay?
I highly recommend Posner & Weyl's Radical Markets, they discuss several ideas to address broken parts of the status quo. One section looks at the problem of property being a monopoly, and proposes all property always being for sale - a true free market. The owner self-assesses a price at which they must immediately sell to anyone who can pay, which incentivizes owners to set a high price. The kicker is that price is used to determine your property tax, which incentivizes owners to set a low price, and thus it is self-balancing system and should result in property being correctly valued and always used efficiently.
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2021 October 30 16:03 kaxline 569¤ 424¤
I like that self-balancing idea, and maybe something novel like that is what ultimately wins out.
Maybe the law should recognize loans that are your primary source of cash and tax those? I don't have the brain for these things, but I feel like the policy needs to be simple to be fair. Something easy to understand.
Scott Galloway @profgalloway keeps saying that "Complexity is a tax on the poor," which really resonates with me. I think the main goal should be simplifying so that the rich aren't rewarded for being able to navigate all the wrinkles in the laws.
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2021 October 31 09:14 stuartscott 709¤ 140¤
I definitely agree it needs to be simpler, and it should be part of the education curriculums so not everyone needs to hire an expert just to file correctly and make the most of initiatives designed to help them.
When I moved to California I had no idea about the tax laws so I ended up using Intuit TurboTax which made it easier still seemed unnecessary - the government knew about my employment and my bank account so why couldn't they figure out how much I owed in tax?
A lot of the complexities are for people in unique situations, but they don't apply for the majority of people so why can't their taxes be automatically determined? - as we say in computer architecture "make the common case fast"!
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2021 October 31 15:55 kaxline 190¤ 90¤
OMG, automating taxes would be so awesome. And totally doable I imagine.
Did you ever watch Patriot Act? There was a great episode on taxes:
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2021 November 04 15:09 stuartscott 101¤ 79¤
That was a great episode, thanks for sharing. My already-low opinion of Intuit is now even lower 📉
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2021 October 31 08:29 Eihposono 751¤ 345¤
I agree the tax code currently is mostly just an elaborate structure to provide loopholes for people who can pay it, but the problem with flat taxes is they're regressive. Sure the billionaire pays more money, buy they're still left with a ludicrous amount of money to proved a subsistence for their family.
If you only make 20k a year, it's only 6k at 30%, but that's proportionally more of their wages and can have a bigger impact on their and their families life.
If we also provided better government guarantees, like health care, food services, housing etc. That might be more okay.
Perhaps better would be to just do away with many of the existing loopholes (like if you give to charity great, but you don't then get to write it off...)
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2021 October 31 16:00 kaxline 691¤
Yeah, I would only support a flat tax if it had an exemption for people below a certain income level. Right now people who make less are paying more than 30%, and the super rich are paying way less than 30%, so despite not being perfect, I think it would be an improvement over what we have now. Plus save a bunch of money in admin.
It looks like New Zealand might be a model to follow (not flat tax):
https://www.beehive.govt.nz/release/new-zealand-one-world%E2%80%99s-simplest-tax-systems
https://en.wikipedia.org/wiki/Taxation_in_New_Zealand
But even still, my head hurts trying to grok that. I think Stuart mentioned teaching the tax system in schools, which is a great idea.
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