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How America Soaks the Affluent

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DiabloWags
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9:59a, 3/5/23
The IRS recently released its income tax stats for 2020, and they show the top 1% of earners paid 42.3% of the country's income taxes. Thats a two decade high in the share of taxes the 1% pay. In 2001, the top 1% contributed 33.2% of income tax revenue.

That same 1% reported earnings of 22.2% of AGI on their tax returns, which means the share of taxes paid by the top 1% as a group is roughly DOUBLE their share of income.

Meanwhile, the top 5% of earners reported 38.1% of total AGI but paid 62.7% of all income taxes. The bottom 50% of earners reported 10.2% of AGI but paid 2.3% of all income taxes.

The liberal narrative from Biden and Bernie just doesnt match reality. The data clearly shows otherwise. The affluent do in fact pay more than their "fair" share.




It's a CULT.

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wifeisafurd
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In reply to DiabloWags • 10:42a, 3/5/23
DiabloWags said:
The IRS recently released its income tax stats for 2020, and they show the top 1% of earners paid 42.3% of the country's income taxes. Thats a two decade high in the share of taxes the 1% pay. In 2001, the top 1% contributed 33.2% of income tax revenue.

That same 1% reported earnings of 22.2% of AGI on their tax returns, which means the share of taxes paid by the top 1% as a group is roughly DOUBLE their share of income.

Meanwhile, the top 5% of earners reported 38.1% of total AGI but paid 62.7% of all income taxes. The bottom 50% of earners reported 10.2% of AGI but paid 2.3% of all income taxes.

The liberal narrative from Biden and Bernie just doesnt match reality. The data clearly shows otherwise. The affluent do in fact pay more than their "fair" share.




Be interesting to see if there are similar numbers for CA. The state relies way too much on income taxes versus other taxes, and income taxes would appear to be weighted heavily against the affluent wage earners. This has consequences.
Here are the states losing and gaining rich young professionalshttps://thehill.com sustainability infrastructure 364... What other state would have to seriously consider imposing an exit tax?

Wags makes a legitimate case that the tax burden is disproportionate, but I expect the usual retort commentary about billionaires escaping taxes. Why is that critical? The high income tax burdens imposed by governments is on people who make and report income, which often means high wage earners, like people who go to Cal. Also people living in high wage states get the shaft. An example of the opposite is Carl Icahn who borrows money against appreciated assets for cash flow to support his lavish life style, and users interest deductions to offset, in part, what little taxable income he generates. There is a limit to how to work this approach, which is why there is growing cottage industry to move the affluent off shore.

The problem is that high marginal tax rates cause distortions in taxpayer conduct. Take the EU example, where pretty much anyone who is wealthy leaves their high tax country (citizenship wise) and negotiates a private tax treaty Portugal, Malta, Andorra, and now even Greece, or any other the country with their special tax deals and "golden passport" programs. There are plenty of ways to switch income and wealth to these new home countires. And then there are the tax/citizenship treaties with Swiss Cantons or Monaco, which is more the American ex-pat approach because an EU passport has less value. This is not the greatest article, but it speaks to a trend that is deliberately kept below radar.
US Millionaires Are Going Abroad to Look for American Dreamhttps://www.businessinsider.com News
My old law firm now has a whole department for developing exodus strategies to leave California or other big tax states, as well as the US for high wage on net value clients.

This is what happen when you have a high profile war waged on your affluent. People forget like capital, the wealth have choices in the long run.
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DiabloWags
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In reply to wifeisafurd • 11:08a, 3/5/23
Solid post Wife.

I believe the LA Times reported that the top 1% of Californian's paid 46% of all income taxes in 2016.

The State's Legislative Analyst Office reported it to be 50% in 2012. See link below.

https://lao.ca.gov/LAOEconTax/Article/Detail/7
It's a CULT.

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bearister
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11:41a, 3/5/23
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax


https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax
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DiabloWags
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In reply to bearister • 11:47a, 3/5/23
bearister said:
The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax


https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax


A terribly bogus article based on a false premise.
And Im surprised that you dont understand why.

Wealth is NOT taxed in this country.
Propublica's "true" tax is a joke.


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bearister
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12:41p, 3/5/23
Of the 1%, by the 1%, for the 1% | Vanity Fair


https://www.vanityfair.com/news/2011/05/top-one-percent-201105
“Cancel my subscription to the Resurrection
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dajo9
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In reply to DiabloWags • 12:50p, 3/5/23
DiabloWags said:
The bottom 50% of earners reported 10.2% of AGI


Thank you for bringing this scandal to our attention.

The other scandal, as wiaf alludes to, is the ultra-wealthy avoiding income in the first place to dodge taxes.

Tax wealth. Boost low/middle wages.
Censorship has always been a tool of the fascist
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DiabloWags
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In reply to dajo9 • 12:53p, 3/5/23
dajo said:


Tax wealth.


Good luck with your socialist narrative.

Maybe you can get a job with the IRS and you can travel ALL OVER THE WORLD appraising people's art collections.


It's a CULT.

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dajo9
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In reply to DiabloWags • 1:00p, 3/5/23
DiabloWags said:
dajo said:


Tax wealth.


Good luck with your socialist narrative.

Maybe you can get a job with the IRS and you can travel ALL OVER THE WORLD appraising people's art collections.




Liberal. Not socialist.
Censorship has always been a tool of the fascist
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DiabloWags
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In reply to dajo9 • 1:12p, 3/5/23
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.
It's a CULT.

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bearister
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In reply to dajo9 • 1:15p, 3/5/23
Can't a Moderate be against income inequality too?

It never ceases to amaze me that the wealthy have not figured out that throwing an occasional crumb to the under classes will extend their very good gig for a much longer time.

"Federal Reserve data indicates that as of Q4 2021, the top 1% of households in the United States held 32.3% of the country's wealth, while the bottom 50% held 2.6%. In recent decades, wealth inequality has substantially increased in the United States."*

Wealth inequality in the United States - Wikipedia


https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States

* If the wealthy weren't getting so f@cked over by the tax system, these stats would be so much fairer to them.
“Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside”
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“I love Cal deeply, by the way, what are the directions to The Portal from Sproul Plaza?”
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blungld
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In reply to DiabloWags • 1:22p, 3/5/23
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.
Income and money are part of a social contract and construct, to believe that the wealthy create wealth without the country providing for them is delusional and a denial of the macro picture. It's symbiotic. You get great wealth (often ore than any person needs or deserves) and in exchange you re-contribute a relatively meager part of your earnings. All the playing with percentages you've quoted do not disguise inequity in the system and the responsibility of the wealthy to fund MORE than they do and not tax dodge and legislate against the needs of the many. Not socialism, just a fair and decent society with a healthy middle class that drives prosperity for all.
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dajo9
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In reply to DiabloWags • 2:10p, 3/5/23
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.


You described liberalism. Definitions of socialism are all over the map. I'm a liberal.
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dajo9
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In reply to bearister • 2:12p, 3/5/23
bearister said:
Can't a Moderate be against income inequality too?


Yes. But I'm a liberal.
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DiabloWags
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In reply to bearister • 2:58p, 3/5/23
bearister said:
Can't a Moderate be against income inequality too?

It never ceases to amaze me that the wealthy have not figured out that throwing an occasional crumb to the under classes will extend their very good gig for a much longer time.

"Federal Reserve data indicates that as of Q4 2021, the top 1% of households in the United States held 32.3% of the country's wealth, while the bottom 50% held 2.6%. In recent decades, wealth inequality has substantially increased in the United States."*

Wealth inequality in the United States - Wikipedia


https://en.wikipedia.org/wiki/Wealth_inequality_in_the_United_States

* If the wealthy weren't getting so f@cked over by the tax system, these stats would be so much fairer to them.

For starters, I would suggest that you read up on the author of the 12-year old article that you posted about wealth inequality, Joseph Stiglitz. I'm not sure if you've actually read these articles that you're posting (like the Propublica article) or if you are simply attracted to their "catchy" headline. Stiglitz has flip-flopped quite a bit when it comes to what he deems the causes are of wealth inequality. Perhaps you should read up on his views that have "bounced" around a bit so that you can have a much better understanding of whether or not he is crediible.

And yes, the Top 1% of households in the United States hold 32.3% of the country's wealth.

I would imagine that has a lot to do with how educated those households are.
Furthermore, it also does not mean that the "pie" of wealth is finite, as many
liberals here on Bearinsider have suggested.

It's a CULT.

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DiabloWags
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In reply to blungld • 3:04p, 3/5/23
blungld said:
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.
Income and money are part of a social contract and construct, to believe that the wealthy create wealth without the country providing for them is delusional and a denial of the macro picture. It's symbiotic. You get great wealth (often ore than any person needs or deserves) and in exchange you re-contribute a relatively meager part of your earnings. All the playing with percentages you've quoted do not disguise inequity in the system and the responsibility of the wealthy to fund MORE than they do and not tax dodge and legislate against the needs of the many. Not socialism, just a fair and decent society with a healthy middle class that drives prosperity for all.

And yet you totally dismiss the contributions that the wealthy have been making in paying their taxes.
You dont care about the actual statistics because to you, it's like a Trump supporter claiming "Fake News"

Moreover, somewhere in (there) lies the tenuous assumption that Govt (somehow) knows better what to do with taxpayer's money than they do. One look at the City of San Francisco having spent $1.1 Billion on homelessness in the previous fiscal year and literally getting nowhere tells you as much.

Not everyone can live in California where housing costs are extremely high due to a highly educated/skilled workforce.

That's why they have states like Arkansas.


It's a CULT.

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DiabloWags
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3:09p, 3/5/23
For those that are unaware of Joseph Stiglitz flip-flopping around on the causes of wealth inequality, they might wish to look further.

For example, in 2017 he wrote that "the American middle class is indeed the loser of globalization".

But he later argued that same year that the fall in wages and the disappearance of well-paid jobs in the United States are not due to free trade or globalization, but rather are inevitable collateral damage to the march of economic progress and technological innovation.

"The United States can only push for advanced manufacturing, which requires higher skill sets and employs fewer people. Rising inequality, meanwhile, will continue . . . "

Later in 2017, he again went back on what he had previously stated about globalization when it came to a drop in wages in the United States.

Stiglitz argued that the drop in wages in the United States is due to the actions of multinational companies rather than the globalization and the trade account imbalances between countries caused by free trade . . . claiming that "It was an agenda written by and for large multinational companies, at the expense of workers."

I dont have an issue with people posting articles from the likes of Joseph Stiglitz (even if theyre 12 years old and outdated when it comes to structural and regulatory aspects of the economy), but at least have some decent understanding of what the author is on the record for . . . and how much he has contradicted himself.









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DiabloWags
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In reply to dajo9 • 3:18p, 3/5/23
dajo9 said:
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.


You described liberalism. Definitions of socialism are all over the map. I'm a liberal.

Cool story.
It's a CULT.

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bearister
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3:29p, 3/5/23
Even if Christ came down from Heaven and announced on a mountain top that it is moral and ethical for the few to control the percentage of the national wealth that they do because they are smart, work hard and gosh darn it, they simply deserve it, it still might not convince the proletariat.

Isn't it just good business to keep the majority as reasonably happy as you can, for just a little bit more effort, so that you can keep your Shangri-La thing going as long as possible?

Sometimes Econ and Business majors can learn a thing or two from taking a history class.

Not Dealing With Wealth Inequality Could Collapse Civilization | by Glen Hendrix | Age of Awareness | Medium


https://medium.com/age-of-awareness/not-dealing-with-wealth-inequality-could-collapse-civilization-20914d820a17
“Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside”
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“I love Cal deeply, by the way, what are the directions to The Portal from Sproul Plaza?”
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OdontoBear66
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In reply to DiabloWags • 3:30p, 3/5/23
DiabloWags said:
dajo9 said:
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.


You described liberalism. Definitions of socialism are all over the map. I'm a liberal.

Cool story.
Yeh, but socialism basically equalizes poverty. It does not create wealth.
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Big C
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3:38p, 3/5/23

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.
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bearister
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In reply to Big C • 3:55p, 3/5/23
It will be explained to you shortly how you "just don't get it."
“Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside”
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“I love Cal deeply, by the way, what are the directions to The Portal from Sproul Plaza?”
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DiabloWags
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In reply to bearister • 4:03p, 3/5/23
It's so easy to become wealthy in the United States.
You just invest in the stock market and all of a sudden you're a MILLIONAIRE.

Stocks only go up, they never go down.
It's literally a risk-free investment.

As a result, the tax rate on short-term capital gains should be more like 70%

It's a CULT.

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In reply to bearister • 4:09p, 3/5/23
bearister said:
Even if Christ came down from Heaven and announced on a mountain top that it is moral and ethical for the few to control the percentage of the national wealth that they do because they are smart, work hard and gosh darn it, they simply deserve it, it still might not convince the proletariat.

Isn't it just good business to keep the majority as reasonably happy as you can, for just a little bit more effort, so that you can keep your Shangri-La thing going as long as possible?


Are you not aware that you can make $20 - $23 an hour working at IN-N-OUT?

Do you really want to pay the high school hostess at Applebee's or your local Pizza joint $25 an hour for seating people?

Shouldnt you be paying people based on their skill set and productivity?

Quite honestly, I'd like to see a farmworker make $25 an hour (instead of $14) and have access to full healthcare because no one that I know is going to do that kind of work in that kind of environment and last more than three days. They're productive. The hostess at your local restaurant is not.





It's a CULT.

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bearister
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In reply to Big C • 4:23p, 3/5/23
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?

“Cancel my subscription to the Resurrection
Send my credentials to the House of Detention
I got some friends inside”
—Jim Morrison

“I love Cal deeply, by the way, what are the directions to The Portal from Sproul Plaza?”
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In reply to bearister • 5:28p, 3/5/23
bearister said:
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?


LOL, I am actually a confirmed capitalist. Regulated capitalism. I am in favor of Americans becoming wealthy! And as they do (and forever after), they should pay their fair share in taxes, since they are able to live in a country that has the infrastructure in which people can become wealthy. The tricky and controversial part is defining what constitutes "fair".

I have a feeling that, with some help from the numbers crunchers, I could devise a system in which all Americans paid somewhere between 5-49% of their income in taxes (federal + state!) and we would still have more tax revenue than we do now. Something to do with closing loopholes.
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wifeisafurd
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In reply to blungld • 6:57p, 3/5/23
blungld said:
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.
Income and money are part of a social contract and construct, to believe that the wealthy create wealth without the country providing for them is delusional and a denial of the macro picture. It's symbiotic. You get great wealth (often ore than any person needs or deserves) and in exchange you re-contribute a relatively meager part of your earnings. All the playing with percentages you've quoted do not disguise inequity in the system and the responsibility of the wealthy to fund MORE than they do and not tax dodge and legislate against the needs of the many. Not socialism, just a fair and decent society with a healthy middle class that drives prosperity for all.
There is a huge disconnect here. As Wags will tell you probably with actual statistics, a lot of income and wealth these days is generated outside this county, or in the case of Californian outside the state for high end taxpayers. Wags just demonstrated that it is not a meager part of one's income outside of the ultra rich, and moreover that formual you suggest is not working in the high income states like CA and NY, where wealth distribution is at its worse. The guys getting soaked are not billionaires, it's the entrepreneurs and professionals who have to take high salaries and taxable money.

Go back and read Wag's post and try to apply some financial literacy. He is talking about people who earn income and the percentages they have to pay of the taxes collected. The percentage he is talking about doesn't include Carl Icahn, because Carl Ichan has essentially no taxable income. Carl is not in the numerator or denominator of the percentages . Yet when some liberal whack job comes out and starts screaming about raising income tax rates, you nod your head and start talking about fair share and concepts about meager amounts of taxes. Some guy who actually has employees and must put money back into his business in California to grow it, doesn't really see your confiscatory views of 53% or more percent of his income (this includes federal and state marginal rates, Obamacare surcharge and CA add-on fees) are not "meager" enough. Yet look what percentage of the overall taxes these guys pays. And in a bad economy when their income goes down, and there isn't enough taxes to cover all the social welfare spending you want, you scream injustice and wealth distribution. The narrative is off. This may come as shock, but 53% of a tax hit for Carl on no taxable income, really doesn't increase his taxes when you say it should now be what would you coal meager, ....60%, 70%, what would make you happy?

To respond to Dajo, who makes a valid point, we really have to look at what might work to increase income of the lower earners. At one point we had a tight job market (and we still do in some business sectors) and wages were rising. Maybe creating a strong jobs economy is good even if it creates some inflation (or put another way, maybe some inflation is the price we pay to reduce income equality, especially under current tax limitations). In regard to current tax limits, it really hard (and likely illegal w/o a constitutional amendment) to come-up with a workable tax scheme to go after the Carl Ichan's of the world. Maybe a flat rate use tax on taxes on assets over a certain value? The problem is Carl just moves

What makes this so bizarre to me is the one politician that seems to grasp this is of all people Gavin Newsom. He rejected supporting several of the last tax grabs supported by his party by saying income was too transferrable. It is like capital, it goes where it is liked. Yes Gavin often says some contradictory, poll induced stuff, and some things he supports don't alway help the economy. But if Gavin gets why soaking income earners with more taxes makes no sense, why don't you guys? The high end wage earner can move and zoom from another state, and they have had enough. There is a reason large law firms consider assisting their clients in this area a growth practice.


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In reply to Big C • 6:57p, 3/5/23
Big C said:
bearister said:
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?


LOL, I am actually a confirmed capitalist. Regulated capitalism. I am in favor of Americans becoming wealthy! And as they do (and forever after), they should pay their fair share in taxes, since they are able to live in a country that has the infrastructure in which people can become wealthy. The tricky and controversial part is defining what constitutes "fair".

I have a feeling that, with some help from the numbers crunchers, I could devise a system in which all Americans paid somewhere between 5-49% of their income in taxes (federal + state!) and we would still have more tax revenue than we do now. Something to do with closing loopholes.


I agree with everything here though I'd add that probably 99% of income earning Americans already pay 5% - 49% of their income in taxes.
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In reply to dajo9 • 7:09p, 3/5/23
dajo9 said:
Big C said:
bearister said:
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?


LOL, I am actually a confirmed capitalist. Regulated capitalism. I am in favor of Americans becoming wealthy! And as they do (and forever after), they should pay their fair share in taxes, since they are able to live in a country that has the infrastructure in which people can become wealthy. The tricky and controversial part is defining what constitutes "fair".

I have a feeling that, with some help from the numbers crunchers, I could devise a system in which all Americans paid somewhere between 5-49% of their income in taxes (federal + state!) and we would still have more tax revenue than we do now. Something to do with closing loopholes.


I agree with everything here though I'd add that probably 99% of income earning Americans already pay 5% - 49% of their income in taxes.

Right. The upper incomes, I would move them closer to the 49%... and close a lot of the loopholes. Also, my numbers might be off a bit. For example, that 49% ceiling might be "aspirational" for those who live in a state with a higher-than-average state income tax rate.
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wifeisafurd
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In reply to dajo9 • 7:25p, 3/5/23
dajo9 said:
Big C said:
bearister said:
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?


LOL, I am actually a confirmed capitalist. Regulated capitalism. I am in favor of Americans becoming wealthy! And as they do (and forever after), they should pay their fair share in taxes, since they are able to live in a country that has the infrastructure in which people can become wealthy. The tricky and controversial part is defining what constitutes "fair".

I have a feeling that, with some help from the numbers crunchers, I could devise a system in which all Americans paid somewhere between 5-49% of their income in taxes (federal + state!) and we would still have more tax revenue than we do now. Something to do with closing loopholes.


I agree with everything here though I'd add that probably 99% of income earning Americans already pay 5% - 49% of their income in taxes.
Loopholes is such an interesting term. I'm going to admit there are often unintended loopholes, created by shortcomings in legislation that were not obvious when drafted, that people like me have used to structure transactions or tell clients what to do. Eliminate them, sure, but I'm not sure that gets you much traction.

Then you get to the tough stuff, impacting pubic policy. One man's tax loophole is another man's stimulus. Tax loopholes are one of the great mysteries of modern politics that everyone thinks are bad, but never disappear.

Is allowing a federal tax deduction for state and local taxes a bad loophole (be careful how you answer with this crowd including me) ?

Is allowing loopholes like deductions or credits for alternative to fossil fuels bad? Are you willing to end domestic manufacturing tax breaks, low-income housing credits, and ethanol subsidies? The list that Congress has and will come up with is endless.

The single largest "loophole," according to Treasury data, involves multinational corporations. These companies can defer taxes on some foreign income by deferring dividend payments. And a crusading Democratic President supposedly was going to eliminate the deduction until he got a call from a certain group of donors.

The second largest loophole is the depriving the U.S. Treasury of over $100 billion in revenue over the next five years, is even more untouchable: tax-free interest on municipal bonds. You want to have a discussion on that one with Chancellor Christ?

Largest loophole number 3 is a manufacturing and extraction subsidy, called the Domestic Production Activities Deduction. So what is your response to domestic organized labor unions on this one?

Is manipulating the tax code in order to shape the economy really that bad? We don't live in an authoritarian country where some bureaucrats just tells people how they must act. We induce them. Maybe if I call it regulation, you will like it better?


,
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oski003
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In reply to dajo9 • 7:29p, 3/5/23
dajo9 said:
Big C said:
bearister said:
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?


LOL, I am actually a confirmed capitalist. Regulated capitalism. I am in favor of Americans becoming wealthy! And as they do (and forever after), they should pay their fair share in taxes, since they are able to live in a country that has the infrastructure in which people can become wealthy. The tricky and controversial part is defining what constitutes "fair".

I have a feeling that, with some help from the numbers crunchers, I could devise a system in which all Americans paid somewhere between 5-49% of their income in taxes (federal + state!) and we would still have more tax revenue than we do now. Something to do with closing loopholes.


I agree with everything here though I'd add that probably 99% of income earning Americans already pay 5% - 49% of their income in taxes.


72.5 million households -- or 40% of total households -- will pay no federal income taxes for tax year 2022
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DiabloWags
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In reply to oski003 • 7:53p, 3/5/23
Correct.
The lower brackets dont pay any taxes.

And of course, there's the standard deduction ($25,900 for married couples) along with all kinds of credits... child tax credits, earned income tax credits, HSA credits, IRA, etc.

https://www.fool.com/the-ascent/taxes/articles/you-wont-believe-how-many-households-will-pay-no-federal-income-tax-this-year/#:~:text=About%2040%25%20of%20American%20households,has%20been%20in%20the%20past.
It's a CULT.

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DiabloWags
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In reply to wifeisafurd • 8:06p, 3/5/23
wifeisafurd said:


What makes this so bizarre to me is the one politician that seems to grasp this is of all people Gavin Newsom. He rejected supporting several of the last tax grabs supported by his party by saying income was too transferrable. It is like capital, it goes where it is liked. Yes Gavin often says some contradictory, poll induced stuff, and some things he supports don't alway help the economy. But if Gavin gets why soaking income earners with more taxes makes no sense, why don't you guys? The high end wage earner can move and zoom from another state, and they have had enough. There is a reason large law firms consider assisting their clients in this area a growth practice.


Bingo!

I often wonder who the liberals like dajo think are going to wind up making up for the Top 1% who pay 46% of California's taxes ...should dajo get his way and marginal rates get raised to 70% .... and the Top 1% move out of California.

If the bottom brackets arent paying any taxes and the Top 1% are no longer carrying 46% of the tax burden, guess who's going to get hit with a higher tax burden?

Can you say the MIDDLE CLASS?

Gavin knows this.
But Bernie and dajo dont.


It's a CULT.

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Big C
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In reply to wifeisafurd • 8:11p, 3/5/23
wifeisafurd said:
dajo9 said:
Big C said:
bearister said:
Big C said:

Maybe some wealthy people pay a lot of taxes, while others are largely able to avoid them. If so, this should be addressed.

But when I take a bird's-eye view of American society today, one of the last improvement ideas that would occur to me is to make an adjustment that would allow wealthy people to be even wealthier.


Which one are you, Big C?


LOL, I am actually a confirmed capitalist. Regulated capitalism. I am in favor of Americans becoming wealthy! And as they do (and forever after), they should pay their fair share in taxes, since they are able to live in a country that has the infrastructure in which people can become wealthy. The tricky and controversial part is defining what constitutes "fair".

I have a feeling that, with some help from the numbers crunchers, I could devise a system in which all Americans paid somewhere between 5-49% of their income in taxes (federal + state!) and we would still have more tax revenue than we do now. Something to do with closing loopholes.


I agree with everything here though I'd add that probably 99% of income earning Americans already pay 5% - 49% of their income in taxes.
Loopholes is such an interesting term. I'm going to admit there are often unintended loopholes, created by shortcomings in legislation that were not obvious when drafted, that people like me have used to structure transactions or tell clients what to do. Eliminate them, sure, but I'm not sure that gets you much traction.

Then you get to the tough stuff, impacting pubic policy. One man's tax loophole is another man's stimulus. Tax loopholes are one of the great mysteries of modern politics that everyone thinks are bad, but never disappear.

Is allowing a federal tax deduction for state and local taxes a bad loophole (be careful how you answer with this crowd including me) ?

Is allowing loopholes like deductions or credits for alternative to fossil fuels bad? Are you willing to end domestic manufacturing tax breaks, low-income housing credits, and ethanol subsidies? The list that Congress has and will come up with is endless.

The single largest "loophole," according to Treasury data, involves multinational corporations. These companies can defer taxes on some foreign income by deferring dividend payments. And a crusading Democratic President supposedly was going to eliminate the deduction until he got a call from a certain group of donors.

The second largest loophole is the depriving the U.S. Treasury of over $100 billion in revenue over the next five years, is even more untouchable: tax-free interest on municipal bonds. You want to have a discussion on that one with Chancellor Christ?

Largest loophole number 3 is a manufacturing and extraction subsidy, called the Domestic Production Activities Deduction. So what is your response to domestic organized labor unions on this one?

Is manipulating the tax code in order to shape the economy really that bad? We don't live in an authoritarian country where some bureaucrats just tells people how they must act. We induce them. Maybe if I call it regulation, you will like it better?


,

Very true. I agree and appreciate you sharing your expertise. "Just close all the loopholes!" is a cliche. One which I just used, somewhat cavalierly.

Thought provoking thread, DiabloWags! The nuances of this topic are quite debatable.
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calpoly
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In reply to OdontoBear66 • 9:32p, 3/5/23
OdontoBear66 said:
DiabloWags said:
dajo9 said:
DiabloWags said:
dajo said:


Liberal. Not socialist.


Sorry, but you sound confused.

A primary tenet of socialist policy is a Government that redistributes income by taking income (the tax) from someone who earns more and giving the proceeds, as a subsidy, to someone who earns less.


You described liberalism. Definitions of socialism are all over the map. I'm a liberal.

Cool story.
Yeh, but socialism basically equalizes poverty. It does not create wealth.
It depends on how you define socialism. Some think the Scandinavian countries are socialist but they have some very wealthy citizens!
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