Cornucopia of Schemes to Take Your Money
The Democrats are competing with each other with ideas to take your money and waste it.
For example, Senator Ron Wyden proposes taxing your money before you even have it.
Rethinking Capital Gains
Please consider Democrats’ Emerging Tax Idea: Look Beyond Income, Target Wealth.
Biden Plan
Former Vice President Joe Biden, the candidate most prominently picking up where Mr. Obama left off, has proposed repealing stepped-up basis. Taxing unrealized gains at death could let Congress raise the capital gains rate to 50% before revenue from it would start to drop, according to the Tax Policy Center, because investors would no longer delay sales in hopes of a zero tax bill when they die.
And indeed, Mr. Biden has proposed doubling the income-tax rate to 40% on capital gains for taxpayers with incomes of $1 million or more.
But for Democrats, repealing stepped-up basis has drawbacks. Much of the money wouldn’t come in for years, until people died. The Treasury Department estimated a plan Mr. Obama put out in 2016 would generate $235 billion over a decade, less than 10% of what advisers to Sen. Warren’s campaign say her tax plan would raise.
That lag raises another risk. Wealthy taxpayers would have incentives to get Congress to reverse the tax before their heirs face it.
Wyden Plan
Instead of attacking favorable treatment of inherited assets, Mr. Wyden goes after the other main principle of capital-gains taxation—that gains must be realized before taxes are imposed.
The Oregon senator is designing a “mark-to-market” system. Annual increases in the value of people’s assets would be taxed as income, even if the assets aren’t sold. Someone who owned stock that was worth $400 million on Jan. 1 but $500 million on Dec. 31 would add $100 million to income on his or her tax return.
For the government, money would start flowing in immediately. The tax would hit every year, not just when an asset-holder died. Mr. Wyden would apply this regime to just the top 0.3% of taxpayers, said spokeswoman Ashley Schapitl.
There are serious challenges. Revenue could be volatile as markets rise and fall. Also, the IRS would determine asset increases annually, requiring baseline values and ways to measure change. That’s easy for stocks and bonds but far more complicated for private businesses or artwork.
The rules would have to address how to treat assets that lose instead of gain value in a year, and how taxpayers would raise cash to pay taxes on assets they didn’t sell. Under Mr. Castro’s proposal, losses could be used to offset other taxes or carried forward to future years.
Warren Plan
The most ambitious plan comes from Sen. Warren of Massachusetts, whose annual wealth tax would fund spending proposals such as universal child care and student-loan forgiveness.
The ultra-rich would pay whether they make money or not, whether they sell assets or not and whether their assets are growing or shrinking.
Ms. Warren, who draws cheers at campaign events when she mentions the tax, would impose a 2% tax each year on individuals’ assets above $50 million and a further 1% on assets above $1 billion. Fellow candidate Beto O’Rourke has also backed a wealth tax, and it is one of Vermont Sen. Bernie Sanders ’ options for financing Medicare-for-All.
Won’t Stop There
Expect more and more radical ideas to pay for nonsense like the “Green New Deal”, an idea that will cost an estimated $51 to $93 trillion.
Elizabeth Warren backs the Green New Deal so she is the most desperate to raise the most money the fastest.
They claim this a tax only on the wealthiest citizens. It won’t stop there. It never does.
Mike “Mish” Shedlock
We need to go back to when America was great-with Ike’s 90% top tax rate. Not trillion dollar deficits. You conservatives remember when deficits were evil?way back in 2016?
There is an element of nonsense here. The rich are a continuous threat to all common freedom. They can buy whatever influence or Congresspeople they need. There is no real equality before the law relative to them, rich vs poor. This concern is backwards.
Historically correct facts:
All taxes that started out as “taxes on the rich” will end up taxes for everyone.
Government spending will always exceed taxes collected. No matter how much “new” tax revenue is collected, the entire amount plus will be spent.
The bigger government gets, the more regulations it passes and the more taxes it takes, the bigger the wealth gap will become.
“Historically correct facts:
All taxes that started out as “taxes on the rich” will end up taxes for everyone.”
Should read: my “monster-under-the-bed” fantasies include:
…
I imagine the harder these guys squeeze, the less inclined I will be to do anything productive. I also imagine there are a great number of productive US Citizens who feel the same way.
The taxes are on the inheritance set.,aka unproductive coupon clippers. So don’t give up your job at the french fry cooker.
“Someone who owned stock that was worth $400 million on Jan. 1 but $500 million on Dec. 31 would add $100 million to income on his or her tax return.”
Imagine having to sell some of that stock in order to pay the tax on the $100 million gain. Imagine workers 401K retirement funds shrinking as a result.
For each action, there is an equal and opposite reaction.
ALL the Big accounts will be dumping stocks around April 14 to cover the appraisal costs and the Fed&State taxes on their golf course resort and their Solar Power utility. A little market hit to your 401k/403b ? – each and every year ! … unless you and your friends also dump in April/March/Feb.
Who sez you can’t time the market?
Most stocks are held by pension funds, etc. Your pity for the poor billionaires is to be admired, but they still wont give you that money. And as for your example, how could anyone live on a mere $400,000,000?
Well, this discussion doesn’t bode well for the future does it? Treat the rich like the Nazis treated the Jews in the 1930s. There’s nothing we can do so we carry on the way we are. Except we can’t- the current system doesn’t work for enough people. How about we do what the Weimar government did in the 1920s? There was a panic on. The panic was not caused by an attempt to curb the hyper-inflation it was that the powers that were feared that they couldn’t print enough Reichmarks to keep the economy going. In the midst of the panic the economics minister rushed into the Reichsdag and announced that the government had found some underemployed printers and the supply of gazillion denominated marks would be maintained. The Reichsdag cheered- problem solved. Stop the rentiers, end price gauging remove the corporatists or face a bleak future. The centre is not holding, and if this discussion is anything to go by it is falling apart.
Warrens plan can’t be implemented. There’s no way to value all assets of everyone. If it is implemented, you can expect a market crash every December like clockwork.
And excessively taxing the wealthy has never worked. What will happen is the wealthy will move their assets overseas along with them and we’ll get nothing.
Can’t move real estate. Maybe a national property tax that is steeply progressive based on assessed valuations. I do not like property taxes, your land should never be threatened by the tax man because you had one bad year or fell on hard times. But, society is going to find a way to claw back some of the egregious excesses of the last 40-50 years of wealth accumulation from the top 10% and mostly 1%, it has to no matter what anyone here thinks about that, a nation that allows 1% of the people to take and keep almost 50% of the wealth is a dead nation walking. It is not sustainable. So, propose a better idea if you do not like the ones above.
Mish, there is one huge thing missing from the article and analysis you post today, you gave us the Warren plan, the Wyden plan, and the Biden plan, but you did not give us the Mish plan.
I am pretty sure you can see the problem with an economy and system of laws that allows 1% of the people to accumulate and keep more than 40% of all wealth, and at the current rate the top 10% will hold hold 100% of the wealth in just 33 years. https://www.commondreams.org/news/2019/08/05/if-inequality-continues-grow-current-rate-richest-americans-will-own-100-us-wealth
A large part of it is the financialization of everything, and I sort of like the jubilee proposal that would pretty much hand every household a quarter million or so provided that their debts are paid out of that first and they then only get the residual after their debts are paid. But, that would still leave the financialization in place, it would be a mere setback on the road to the richest few owning everything.
We now have an economy where a few thousand people are essentially winning the lotto every day or week of their lives, while the rest of us toil as their slaves and have to buy a lotto ticket as our only realistic hope of financial security because more than 90% of us damned sure are not going to get anywhere by labor alone.
That Mish is a recipe to end a nation. So, let’s hear your solution if you do not like the ones the democrats are proposing.
None of those plans will fix wealth inequality. What will happen is the super rich will relocate out of the US and we’ll actually lose tax revenue as a result.
I’m not even rich and seriously thinking about relocating.
I did relocate because I found my once middle class fixed income (in 2008) would no longer allow me to even rent a place I find minimally standard, and I do not want to be relegated to a choice of living accommodations that are in my opinion uncomfortable and dangerous. Now, I can’t even afford to leave. I had to return because the nation I went to could not take care of a simple ear infection so I had to return. That was Ireland in 2017. Their national health system is so bad, so screwed up that just getting that ear infection taken care of, well it was easier just to return. I am a citizen there because my father immigrated in 1949. Since they were forced into the EU it is not the same country at all. But do go for a visit, you will find out why so called “democratic socialism” just does not work. They have gone from Celtic Tiger to moribund welfare state with no national identity with a simple signature surrendering their sovereignty to the ECB and bureaucrats from Frankfurt.
We do have to do something about wealth inequality, we have no choice, but socialism is not the way to go. What would be ideal is if the very wealthy simply became philanthropists and decided that hoarding all that wealth was strangling capitalism itself. Then they would recycle the majority of that wealth, while still remaining very rich themselves, back into the society that created it. And we will all go together to Sugarcandy Mountain. In other words it isn’t going to happen.
It is down to the laws and rules of American capitalism. That is what allowed this situation to get so bad in the first place, the wealthy bought our political system and had them tip all the laws and regulations in their favor. Jekyll Island and the termination of Bretton Woods being just two of the more obvious grabs.
We could go back to real laws and rules and sound money that while not perfect would constrain the amassing of wealth as it once did, but remember that we hit our peak in both productivity and in equality when the top progressive tax rate was over 90% during the Eisenhower years. And the rich were still very freaking rich, had we remained at that point we would not even be discussing this. But, when an adult is working a full time job and his pay is not even adequate to buy shelter, a roof over his head, no less pay bills, start a family, or have any choices in life, then you are on borrowed time as a nation. So you are such great minds, find a way to fix the situation.
I say no matter what you do it is going to be called socialism, but that is why I favor a one shot deal followed by restoration of old principals, laws, regulations. Rather than ongoing socialism where government makes all the decisions through central planning and continuous tinkering with your life right down to how you get around and even what you eat as Sanders and his Borg want to do, give every household $X amount minus their current liabilities (mortgages, car loans, student loans, etc.) and while that would trigger inflation and cause a few other temporary dislocations those would shake out and supply and demand, prices, would again achieve equilibrium just with a 10%, or 50% or whatever your goal is of devaluation through this one time shock. Of course you have to follow through with reforms or we will just have to do it again in a few years, couple decades.
What I see here is a lot of crying about how damned unfair it is to TAKE from the rich to give to the poor. As if being poor were the choice of lazy people who actually prefer to be poor over laboring to make a better life and join the middle class through hard work. Your assumptions are all incorrect. Most of the very rich (at least 90% of them) did not labor to become rich and indeed do not even make investing decisions on their own now, it is all on auto pilot, they do not use their muscles and time or their genius to get vastly wealthy. All they have to do is be born to the right few thousand people that own it all, and sit back while others turn that vast wealth into all the wealth. And even those do not make the decisions anymore but computer algos do it for them. The first thing I would do is ban HFT, it is the modern equivalent of churning which is still illegal. Frontrunning is not a rich guy proving his superior mind in finance, it is an entrenched and unethical/illegal practice that allows the very rich to keep it all.
You will now have to start to remunerate fair pay for fair labor or the government will do it for you and you will not like that at all, trust me, I am poor and I will not like it either, none of us will. So, come up with a better way to change things, sitting back and whining or going full prepper and burrowing into the ground is not a solution.
I have a solution to wealth inequality. Simple.
Require a balanced budget and end all corporate bailouts.
Risk would get repriced back into the system, and billionaires would lose a ton of income from their government backed malinvestments.
It is the elimination of risk from the current system that has created the wealth inequality monster. How many billionaires (or retained) have been made by government bailouts?
That would be a good start.
“We could go back to real laws and rules and sound money that while not perfect would constrain the amassing of wealth as it once did, but remember that we hit our peak in both productivity and in equality when the top progressive tax rate was over 90% during the Eisenhower years.”
Remember, the U.S. was producer to the world when Eisenhower was President. The fact that the top tax rate was 90% back then was correlation, not causation. Being producer to the world was productive and created a middle class boom. Being producer to the world has done wonders for China.
The super rich can relocate if they value their billions more than they value their citizenship and I would say hasta la vista baby, but you are not taking one thin dime with you. That might be your wealth as long as you are here but it has a senior owner in the nation it was created. Hitler did that to the Jews, early on allowed them to leave Germany but they could take pretty much nothing except for the clothes on their backs, so it can be done. It would be as simple as denying wire transfers out of the country in excess of pick a number, $5,000, maybe $2,500. Good luck moving a billion dollars at $2,500 per day. It would take you 2,000 years.
Well, the poor of this country are better off than they were 50 years ago too.
The solution is not to penalize the wealthy. When the penalties for good choices were largely removed, the wealthy became even wealthier.
Now, I have a problem with crony capitalism. However, no matter how legislation is written, someone will bend the rules to their benefit.
Removing loopholes makes it harder, not easier, for a poor person to get wealthy.
I’m a low income specialist, and the low income have had massive improvements in their quality of life.
No family living in poverty today makes less than 50k, when benefits are included. That’s 2x what it was 50 years ago. The rich have gotten far richer, it’s true, but so have the poor.
Income measures income alone. It doesn’t measure things like government benefits, square footage of living spaces, quality of technology and medical care etc. The poor in America have never been as rich as today.
That just is not true. In 1969 – 50 years ago – even the poor making minimum wage could still rent a place, and it would not be at the Waldorf but it would be adequate. My Dad bought a house 3 doors away from the Pacific Ocean in California in 1968, he was an immigrant from Ireland, a bartender, married to a part time receptionist at a doctor’s office. Neither were what you would call skilled trade or “professional,” they put 6 kids through catholic school, expensive but that was a choice they made, Dad drove a 4 year old Corvair and she drove a 3 year old station wagon, we did not have a lot of money, we did not get to go to Disneyland but there were some treats. That house by the way was $16,800.
The same house 50 years on is “worth” over a million bucks, and while workers doing the same jobs today make about 500% of what Dad and his wife did, their expenses are well over 1,000% higher, especially housing which is many multiples of that.
If you really wanted to do something about wealth inequality without going “socialist” then fix that one thing, housing costs. But, you also have to fix healthcare costs because those also are thousands of percent higher and sooner or later we all need it. Ditto college, it is not in the interest of the nation to have an uneducated workforce. And educating the workforce should not end up with a workforce so indebted that they can never have the financial freedom to be independent.
There is no way out of the financial and monetary box we are now in, it will be resolved, you can help to resolve it in constructive ways that preserve our values of democracy and capitalism, freedom, or you can simply sit back and allow someone like Bernie Sanders to fix it for you, and none of are going to like that trust me.
If the people install him or one of his acolytes it will not be because people are lazy and want a handout, it will be because the rich have gone too far and the rest of the people simply did not have any choice in the matter because YOU did not give them an alternative to so called “socialists.” You want a Trump or someone like him? Then it is YOU who force Sanders or someone like him to be inevitable.
Using a comparison of the highest real estate market in the country to argue that the poor do not have it better today than 50 years ago isn’t a fair comparison.
Most of the country isn’t California or NYC. The poor making minimum wage can absolutely afford to rent a place or even outright own when you factor in government benefits.
Here’s a few stats you may find interesting:
That family could easily afford the median rent here. Most of my tenants who are all low income pay 499, which is quite affordable.
Additionally, their apartments are `1.5x larger than they were in 1969, they have air conditioning and all of them (except one) own cars.
The poor absolutely have it better today, overall, than 50 years ago.
Zip code 95531 (hometown) is FAR FAR from the wealthiest market in the country. Wages there are about equal to most of the rest of the nation, it is 357 miles down a two lane (mostly) highway to the bay area. In fact is 350 miles also to PDX, that makes it one of the most remote places in the lower 48 states you can live in.
Your arguments about relative poverty do not wash, poverty is poverty whether absolute or relative, they are still a trap which few ever get out of, class mobility in the US is at it’s lowest point ever.
And I know from my own experience that what was the break in point to the middle class here in rural southern Oregon was in 2009 no more than about $45k for a single head of household, because that was what I was paid, I was not really middle class but right on the cusp. Now, with 8.6% in raises since then I am decidedly nowhere near middle class, I am now barely renter/working class. So don’t tell me there has not been vast and TOWERING unreported inflation because I damned well know better.
By the way someone pointed out on the weekend that $61k was the median income, that is wrong, it is the median HOUSEHOLD income which consists of mostly two income households, the median income per income earner in the US is actually $40k.
Another fact for you, in 2015: Wealth inequality between homeowners and renters is striking: Homeowners’ median net worth is 80 times larger than renters’ median net worth.
Relative poverty is not a wash. Poverty is also not always poverty.
A poor person, making 20k in 1980, adjusted for inflation, is living a far more miserable life than a person making 20k today.
The person today qualifies for SO much more in government benefits.
No one in the USA makes less than 50k, when government benefits are included.
I make 28k a year. My family lives off of that. We own our own house (paid for in full), buy organic groceries, and take expensive vacations every year. I’ve also never had a car payment, and bought a fixer upper for 83k 10 years ago that I have a ton of sweat equity in. I’ve never received a dime from anyone after I left home at 18 and I’ve never received an inheritance.
Everything my wife earns (25k) we save. All of it. We invest it in real estate and have accumulated a 300k portfolio. I’m 41, so with a 52k annual income, we’ve accumulated more than much higher incomes do at 65.
It’s about choices. if you, as you say, are making 45k, you are right where we are for two of us, yet struggling. It’s likely you have made different choices. than others making the same as you.
I know all about renters….I manage an apartment complex. Renters, generally, make far far worse money choices than homeowners. It’s a statement that isn’t true for all, but most of the time, it is.
One can talk about wealth inequality all they want, but the conversation needs to focus on why people making the same salary end up in very different places.
Health care and personal choices.
Yes dbannist, do you know when US household income peaked? Adjusted for inflation US household income peaked at $4.04 in January 1973. A person that made just over 4 bucks an hour right before the oil embargo actually could afford to live better than we do today. I take home tax exempt $50k per year, in this county the median income is $47k per year, and that is BEFORE taxes. So I am above median, yet I either have to leave the state by the next rent increase in January, or stay and live in my car, I just can’t pay more than I am now.
Funny how economics is like that, long after, YEARS after you think an intolerable situation just can’t continue it does.
But, one day it all falls down. Everyone except the top 1% just gets screwed, and they rebuild like they did in the 30’s. I know, My great great grandfather built a retail empire in the Puget Sound area and one day in 1930 the bankers came to my great grandmother’s house and gave her half an hour to get her son and their clothes, personal things out of their house. They were allowed to take one car. Pretty amazing they had three, back then that was rich. My grandfather was raised in the lap of luxury till that day. There was even less explanation then than you would get now. No rules, just goons showing up at the door telling you to get out.
If you cannot afford rent on a 50k salary you either live in a very very high cost of living area or have quite a bit of debt.
I make about half of what you do and a 2k house here can be purchased for a mortgage payment of 400 a month, of 600 when taxes and insurance is considered. My total housing expenses here in NC, in a self-owned house is 650, which includes utitlities, taxes, insurance, mortgage, (when I had one) etc. Over half the country is like that. Washington state is NOT a good indicator of what the rest of the country is like, and basing policy on one’s own national geographic area instead of the whole country is bad policy.
A 50k salary is a good salary.
“I am pretty sure you can see the problem with an economy and system of laws that allows 1% of the people to accumulate and keep more than 40% of all wealth, and at the current rate the top 10% will hold hold 100% of the wealth in just 33 years.”
Mathematically, that will not happen.
Wealth disparity collapsed in the Great Depression decline of 1929-33. While it did not come close to the 1928 peak, wealth disparity increased during the Roosevelt era, in spite of the New Deal.
Wealth disparity as such is not ipso facto unjust. Bill Gates should have orders of magnitude more wealth and income than the stoner down the street. The real injustice today is government (including Fed) policies and actions which distort markets in all sorts of ways. Individuals are effectively forced to pay for things they never asked for: wars, welfare state programs, wealthy bailouts, etc etc. Only solution is to get government out of the economy.
The Tea Party should have figured this out, but the proof of how confused would-be capitalists are, or that there effectively is no pro-capitalism movement at all, is in the fact that they replaced Obama with Trump. One statist for another, different flavor. Dumb and dumber and fighting over the steering wheel.
My God, how long have you been reading this blog? Mish’s thoughts on wealth inequality are up and down its history.
You want to get rid of wealth inequality? End the Fed. Return to a Gold Standard. Reduce regulation and other forms of favoritism to Big Business. Remove Too Big to Fail. Reintroduce risk. Allow freer trade. Reduce the size of the government. Reduce taxes. Privatize. End Obamacare. etc etc etc.
Do people even read what our gracious host writes? I truly wonder sometimes.
I’m ok with Warren’s plan. It will force the very wealthy to invest their wealth in businesses development instead of just buying stocks and bonds. They will need a higher return to make a profit. If they can’t do it, it will be in their interest to sell their assets to someone who can.
Taxing unrealized gains seems pretty odd. Can you claim the taxes back when the market goes down?
Taxing wealth is also problematical — selling the farm to pay the taxes. In the sixties and seventies we saw old people on fixed income being ejected from houses for not being able to pay property taxes that were higher than their mortgages payments ever were. How many farms were sold to settle divorces? A system with deferred tax credits etc. will just be another boon for lawyers and manipulation. Any tax on non-commercial real estate seems laden with undesired effects.
These are measures targeting symptoms of a system in which the playing field is tilted. Recouping the water flowing downhill seems a losing battle. Fix the tilt, the incentives, the racketeering and monopolization (and the politics).
Taxes on property without a change in the disposition of such property seems at cross purposes with the rule of law. You should be able to avoid taxes by not selling and certainly when doing nothing; otherwise it is seizing. Taxes should be applied when people sell. And I don’t even support “capitalism”.
We stole this money fair and square! How dare you take some back! And how dare you raise taxes when you could just print! And don’t you dare raise taxes to anywhere near the level where they were during the greatest economic expansions in American history! Didn’t you hear that taxes are out of fashion? Deficits are all the new rage!
2 out of 3 ain’t bad. Sen Warren’s is the worst of them all because it taxes assets forever like property tax. The other proposals actually result in a more stable financial system by creating a negative feedback loop, without penalizing those who do not participate.
So I take it then that it is perfectly ok to bleed small-time savers for decades with negative real interest rates, but any imposition on the mega rich is met with howls of vitriolic outrage. I suppose this might just have something to do with political “donations” (aka ‘bribes’) and control of the news media through direct ownership or threats to withdraw advertising. That IS how the system operates, or am I wrong?
Who gives a crap if some billionaire/millionaire gets the shit taxed out them. Bring back Eisenhower with 92% marginal rate.!
Because you’re next. All the wealth of the ultra rich can’t pay for those boondoggles and they are tax-savy and internationally mobile. Unlike you.
As well as the fact that the people who make more money and have more assets create a lot of jobs. Soviet society showed what happens when the state creates the wealth.
I love these responses that do not know the history of our income tax and believe their money and assets will not be included, after a short interim period. People need to read a few history books. Or they could just see that Mish already said the same thing.
Quite so, the prevailing view of those who want to tax the rich into the ground is that millionaires and billionaires lock all their money in a vault like Scrooge McDuck.
Do some research, just about nobody paid that high rate. The effective rate after loopholes was not much higher than today for high earners.
Congress even passed a law to allow Eisenhower to keep more of his money from his book Crusade in Europe.
If everyone is doing so great then why is there even some support for these ideas ? Maybe everyone is not doing so great.
Why don’t they just print it like they always do… but then again, it ain’t about the money anymore, it’s about control and using force. Rome used to fabricate charges against its citizens to raise money. Some localities have been doing it here in the US for year under forfeiture laws. And then there are homeowner associations for those that like to live under more ridiculous rules
“about control” that’s a roger
It was under the Obama regime where the US made the sharp turn to 3rd world banana republicdum,where as pretending and propaganda trumps real solutions to problems,play make believe as opposed to making tough but necessary choices,none of these folks (other than pocohontas)gonna change that direction.
The USA started playing make believe under Nixon when it left the gold standard. Long before Obama, who is just one in a long line of illusionists.
“… a 2% tax each year on individuals’ assets above $50 million and a further 1% on assets above $1 billion. ”
Now, THAT’s a “problem” I would love to have!
Leon Trotsky would love the whole Democrat leftist goat rodeo: Class warfare at a screech, 100 years after Lenin ousted him from Bolshevik leadership, being keenly aware of the necessity of pulling the slats from under freedom and liberty carefully, one plank at a time. Here’s the wealth tax plank even now.
I’m convinced our only remaining hope is an 18% capped flat tax and balanced budget, exceeded only for a war’s duration.
We’ve got a million of our best minds wasting on devising wealth transfer laws and the dodging of them.
I like the flat tax idea too. But I think a flat 20% on earnings over say $30k would be more palatable to the masses.
Will not work for the same reason the current system is not working. Taking 20% of a poor persons income is one fifth of all that person owns. It assures that they will never rise out of their poverty no matter how long or hard they work. Remember that one of the definitions of poor is near zero or even negative net worth. Their income in a given year is all they have. But you believe it is fair to take 20% of that? If it is fair to take 20% of a poor persons entire world in a single year then it is fair to take 20% of a wealthy persons total world in a single year and there is no valid argument otherwise.
They would stay in a state of perpetual war, like right now in Afghanistan, which began before high school kids were born.
Yes, and on top of these, Democrats want to impose a financial transaction tax. Sanders is proposing a 1% tax on every stock trade (round turn).
Good grief…that’s 100 bucks on a $10K position! Apparently Bernie wants to send stock investors back to the pre-1980’s era, when it was very expensive to buy and sell stock.
Everyone will pay the FTT — even grandmother’s retirement account.
Ironic how the Democrats call themselves champions of the middle class, yet we always end up the main victims of their misguided policies…
People made better investing decisions back when the commissions were high. Once the commissions went to zero, their trading went up high and their portfolio performance went down low. People nowadays lose not only to passive indexes but even to monkeys who pick their stocks on a dartboard that are then held for longer periods than the regular people’s holding times.
Obviously, with all of the anti-establishment movements around the world, this is a global problem, because self-interested govts are broke. Even though they are out of other people’s money, govt thinks that blood letting is the next step. For example, the strongest economy in the EU now needs more money from their citizens, who are already the most heavily taxed – https://www.armstrongeconomics.com/world-news/taxes/germany-the-spd-proposed-wealth-tax/.
Things never change, which is why we are headed toward revolutions, civil wars, and world wars. Don’t let them take your gun(s).
Tax increases have no value in the modern economy. Our deficits are so vast that no taxation could cover them, plus loopholes like fake losses and offshoring money ensure that the wealthy will be able to evade while the middle/lower class will not.
This is gearing up to be the most pathetic election season ever. Blue team hides their servitude to the banks and the MIC with meaningless virtue signalling while the red team hides theirs under phony fiscal discipline and fake religiosity. There can’t be many more of these elections to come, it’s coming apart like the ’80s Soviet system.
It does also seem to me that the democrats raise taxes on the “wealthy” to supposedly pay for their social programs. The wealthy then just find loopholes to avoid it. The republicans then come along and cut those same taxes on the wealthy. The nett effect is that tax revenue stays constant irrespective of who is in charge while the deficit and the debt continues to balloon unabated
One way in which the taxes have NOT stayed the same and this is vital to our problems, revenues from corporations have dropped dramatically, by more than our deficits have increased as a share of national wealth.
I had a professor in college for my finance degree that made a compelling argument that corporations/businesses should not be taxed at all, because they do not pay the taxes anyway, rather they just build them into the prices they charge as a cost of doing business, they are all passed on to the end consumers. (this is really basically how the VAT works where it is instituted if that helps you to understand a VAT)
But, my reaction to this is that corporations are not people, but they are a collection of owners/shareholders who are people. They get the windfall of that situation and my prof would have said that they then would pay the taxes on the corporate profits that are their share of profits paid out by the companies. But they do not pay since they have been alleviated of most of their income tax rates, and what was not lowered by rates was loopholed into existence by rules like the carried interest tax laws. Off shored, unrealized capital wealth, etc. etc. and on and on. Even what is “earned” by the corporations is mostly not paid out realized yield to the owners, but retained as unrealized capital gains that have vastly ballooned the share prices (and stockholder wealth) far beyond any fundamental valuations. This was why the great Trump tax law did nothing for the nation, it repatriated trillions to America from offshore as one of it’s side effects/goals, but some 90% or more was then just plowed back into stock buybacks which further inflated the NSDAQ, Dow, S&P, Wilshire 5000, NYSE, and again on and on. Still unavailable to tax authorities. Not to mention bonds, chasing yield has driven down debt yields till some total and utter junk is now paying less than 2%, rather than by design of monetary authorities our interest rates are getting pushed to NIRP (real rates rather than nominal at least) and even then foreign funds are flooding in chasing yield as we are the last major economy with positive nominal rates. That in turn is forcing up the dollar making the situation even worse. This is one of the things that Trump just does not get, his stated goals are actually mutually exclusive, I do not think he even gets the inverse price/yield relationship of debt.
“Rather than by design of monetary authorities”. That’s a pretty choice phrase since the monetary authorities set the basic rate. The only way it isn’t by “design” is because the Central Banking fiat currency system they’ve created is completely out of their control. Frankenstein’s monster.
You do understand right, that the 40 YEARS of steadily falling interest rates we’ve experienced is essentially a Central Bank bribe to bond speculators to keep buying their worthless paper.
That is, to those speculators who aren’t already legally required to buy government debt.
They can either take your money and waste it, or borrow your money and waste it like the Republicans. Nobody proposes to not waste your money.
Rand Paul proposes to not waste your money, and he proposes realistic ways to accomplish that. Both parties ignore him, and apparently so do you Shamrock.
“The Democrats are After Your Money” … if you have more than $50M in wealth.
Well, not my problem.
It’s not a problem if I don’t have the money obviously. But to me it is not a problem even if I have that kind of money.
Same way the income tax was only introduced for the ultra rich in 1913
Just remember, the income tax was sold to voters in the same manner. “A tax that would only be on the evil rich”
Mish is right. If you have money, they want it. Be it your retirement fund, income or a business. You didn’t build that!
Not just your money or your life anymore, they want both. We are now all slaves to the government rulers.
Histrionics is not a solution, whining about the income tax is SOOOOooo 1914.
Public goods have to be paid for and if you want to do it inside a capitalist system that means taxes of some sort have to be paid by the people with the money to pay them.
I am so tired of faux capitalists bitching about taxes. They have always existed and they always will one way or another, so get creative, use your minds, propose a better way to tax or pay for public goods. Or, just sit there being about as helpful as a stone in other people’s shoes.
“Dems want to tax your wealth”…Huh uh, yah righto…and if you believe that I have a bridge in Brooklyn I’d like to sell yah. Obama & Hillary campaigned against each other trying to outdo the other promising to end Bush’s tax for the rich. Except Obama went out of his way to make them permanent. As for Medicare for all, for every $1 spent giving every single person including immigrants free Medicare for, you and me and Mish save $2 for each dollar spent on giving everyone Medicare for all. Eat them pretzels, bucko’s.
This is just noise.
No Way No How does “the rich” allow any (substantial) increase in taxes on passive income.