"Tax the Super Rich Now or Face a Revolution"

[Hamlet]

I'm talking about the total tax burden.

The super-rich pay mostly just income and capital gains taxes, since the other taxes (FICA, sales, property, sin) are highly regressive.

We've spent 30 years lowering the taxes that the rich pay while increasing the taxes that everyone else pays.

The world is not going to end if we go back to a 20% capital gains and dividend tax rate.

I assume you speak of capital gains and related.

Of which I say the road to poverty (for everyone) is paved with high taxes on capital. Be very careful of what you ask for as you just could get it.

In terms of income taxes, what you post is just not true.

 

[Hamlet]

I think the default position has become trying to figure out how to shift the tax burden away from the wealthy and onto the middle class.

Because they have over 200 years of history showing exactly how stupid the recipients of those taxes will behave with that money and the default condition should be trying to figure out how to give the idiots in charge less?

 

[Hamlet]

?

This was a remarkably short proof of Lindsay's law.

 

[MasterBlaster]

The world is not going to end if we go back to a 20% capital gains and dividend tax rate.

Don't assume that by increasing these taxes that everything else will stay the same and that now the government will have more.

Also keep in mind that the healthcare law already has upped the capital gains rate to 18.8% (from 15%) for taxpayers with incomes above $200/250k. Since lower income people don't claim many capital gains, effectively the rate is 18.8% for almost all of the taxpayers who claim any significant capital gains.

And no the world won't end, but it won't bring in the stated revenue and growth will slow even more.

In the end it just could be counterproductive.

 

[obgyn65]

I believe this is called greed...

why do some people feel entitled to someone else's money ?

 

[NW-Bound]

But, but, but don't most rich people also believe that "Greed is good"?

"Greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through, and captures, the essence of the evolutionary spirit. Greed, in all of its forms; greed for life, for money, for love, knowledge, has marked the upward surge of mankind and greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the U.S.A" - Gordon Gekko, character in the movie Wall Street.​

 

[jerome len]

I think they already tax the rich. If you live in California and are self employed you'll pay about 14% social security tax, the medicare part of this tax on your entire income. Then you'll pay 10% State tax and you'll pay 35% federal tax. And, if the liberals have their way, you'll pay 39.6% starting in two years, you'll also pay a new 3% health care tax (I think) and if you're retired, you'll pay tax on your social security and medicare benefits. Add it all up and the "rich" could be paying almost 2/3rds of their income in various taxes. Oh, yes, in California you also have a hefty sales tax and property tax.

Don't make a lot of money? Well, other than social security the bottom half of the tax filers pay no tax........some even get cash back.

Some of my numbers may be off a little but it's easy to understand productive people working less......why work hard for the tax man. So, don't think taxing the rich is the answer; if we raise taxes any further small business won't have the cash to invest and then who will create jobs? The answer is cut spending, we just can't keep giving healthy, capable people more and more freebies while taking from those that work hard and achieve success.

My Dad was a blue collar worker, I started work as a paperboy, I just hope that my kids have the chance to be successful as I did.......they won't if taxes keep going up and they won't be able to grow financially as a result of their hard work.

 

[mb]

Of which I say the road to poverty (for everyone) is paved with high taxes on capital. Be very careful of what you ask for as you just could get it.

Do you care to share any data that supports this, particularly for cap gains taxes in the 15-30% range? I would accept your contention for very high rates (~> 50%) but for lower rates I'm not convinced.

Look at the so-called Laffer curve. It's parabolic, not linear. That alone should give be a clue that this maybe highly sensitive to rate with possible maximums in the curve.

 

[MasterBlaster]

Look at the so-called Laffer curve. It's parabolic, not linear. That alone should give be a clue that this maybe highly sensitive to rate with possible maximums in the curve.

I'll go find some info on growth, total tax revenue, and capital gain tax rates if you let us know what exactly is the shape of the Laffer Curve, and where exactly we are on it.

 

[mb]

I think they already tax the rich. If you live in California and are self employed you'll pay about 14% social security tax, the medicare part of this tax on your entire income. Then you'll pay 10% State tax and you'll pay 35% federal tax.

I live in CA and I make significantly more than the average household and I pay a lot of taxes but according to my understanding this isn't a function of the CA income tax rate structure. This is based on the following facts:

• The marginal tax rate in CA is 9.3% for an income greater than $46,766. (Yes, that is higher than most states. I understand that.)
• The marginal tax rate increases to 10.3% for those making more than $1,000,000.
• The median household income in CA is $56,134.

Since median household income in CA is $56,134, this is essentially a "Flat Tax" for the upper 50% of households. It is certainly not a soak the rich tax structure unless you think that an additional 1% for those making more than $1,000,000 is confiscatory, in fact to me it seems pretty close to the Flat Tax that many advocate.

 

[traineeinvestor]

Even if a 100% wealth tax was imposed on the wealthy (however you define wealthy) and such a tax was implemented without the massive social and economic dislocation that accompanied previous instances when this happened (e.g. the communist regimes in Russia, China etc), it wouldn't be enough to solve the chronic overspending epidemic - I suspect that most, if not all, of the money would have been spent within a year or so (after which the tax base would have shrunk).

It will take a combination of unpleasantly higher taxes, unpopular and painful spending cuts, economic growth and inflation to address America's deficit problem.

As to comments that the "rich" pay proportionately less tax than the shrinking "middle class", this is only true if you conveniently ignore the double taxation that taxes on dividends and capital gains represent. A number of countries already at least partly recognise that double taxation is unfair and set their tax regimes accodingly.

As an aside, if you want to stimulate the economy, how about a one year tax holiday on dividends paid by listed companies to their shareholders - getting a lot of that cash off the corporates' balance sheets and into the hands of shareholders has at least the potential to create some spending and increase the circulation of money.

 

[mb]

I'll go find some info on growth, total tax revenue, and capital gain tax rates if you let us know what exactly is the shape of the Laffer Curve, and where exactly we are on it.

You made the original claim. I just asked for any supporting evidence that you may have.

I would like to try to separate the dogma from the data. IMHO both sides seem to have a lot of the former and little of the later.

 

[Ready-4-ER-at-14]

Part of the problem with inherited wealth is that there is no reset button in this country. Apparently in ancient biblical Israel there were redistributions of wealth to a bare minimum every so often. (try a search on "jubilee biblical")

Every seventh year it seems all debts were abolished. Every 49th or 50th year, rights to ancestral property was returned.

The way it is now, some people are virtually debt slaves for life due to non bankruptcy discharge debts (IRS, Student loans, certain judgments (perhaps)).

Also every couple of generations a family line is given a jump start should they have nothing left for real estate and have to live as renters and hire them selves out.

 

[mb]

It will take a combination of unpleasantly higher taxes, unpopular and painful spending cuts, economic growth and inflation to address America's deficit problem.

Yes, I agree.

As to comments that the "rich" pay proportionately less tax than the shrinking "middle class", this is only true if you conveniently ignore the double taxation that taxes on dividends and capital gains represent. A number of countries already at least partly recognise that double taxation is unfair and set their tax regimes accodingly.

Another good point.

 

[mb]

I also contend that a large country cannot keep a strong military without a strong economy. This has yet to be decided, but I still favor the same position.

Ha

Paul Kennedy, a Stanford professor, wrote a book called "The Rise and Fall of the Great Powers."

After reading the book my conclusion was that in most but not all cases a great powers becomes great by growing its economy. A great power falls by over extending itself (usually militarily) in an attempt to retain or expand power and influence.

 

[RetiredGypsy]

I think the default position has become trying to figure out how to shift the tax burden away from the wealthy and onto the middle class.

Who in turn should figure out how to get the government to stop spending so much in areas that are in their range of responsibilities, and cut out everything else entirely at the federal level.

Benjamin Graham said it's the responsibility of shareholders to keep the management in check. So to is it the citizens' responsibility to keep their government in check.

 

[samclem]

Benjamin Graham said it's the responsibility of shareholders to keep the management in check. So to is it the citizens' responsibility to keep their government in check.

But, shareholders get a say according to their shares in the company--the more shares they own, the more their votes count.

With governments, every citizen gets the same vote. Couple this with a propensity for people to have the government take assets from others for their own use, and it's easy to see how we got to our present situation.

 

[HFWR]

But, shareholders get a say according to their shares in the company--the more shares they own, the more their votes count.

With governments, every citizen gets the same vote. Couple this with a propensity for people to have the government take assets from others for their own use, and it's easy to see how we got to our present situation.

Our system of [-]reprehensible[/-] representative government is supposed to dampen, if not eliminate, this phenomenon.

 

[RetiredGypsy]

With governments, every citizen gets the same vote.

I think they've forgotten what they're supposed to be voting for.

 

[samclem]

Our system of [-]reprehensible[/-] representative government is supposed to dampen, if not eliminate, this phenomenon.

Yes, and it works somewhat. But, too often, it only amounts to the people electing someone who will vote to take their fellow citizen's things on their behalf.

If limits on these wealth transfers (e.g. exactly how much is each citizen required to give to other individuals, through the government?) were in the Constitution, at least it would take more of these reps and a majority of the Supreme Court to do damage of this kind.

I think they've forgotten what they're supposed to be voting for.

They know exactly what they are voting for--SFOP (Stuff From Other People)

 

[Hamlet]

I would be ok with removing the corporate income taxes entirely and setting the cap gains and dividend rates to ordinary income rates.

Given how good large companies have become at tax avoidance (GE actually had a negative tax rate last year, even though they were highly profitable), I suspect that this would be an increase from the 20% rate I've suggested.

As to comments that the "rich" pay proportionately less tax than the shrinking "middle class", this is only true if you conveniently ignore the double taxation that taxes on dividends and capital gains represent. A number of countries already at least partly recognise that double taxation is unfair and set their tax regimes accodingly.

 

[Hamlet]

And if you are living off of your father's estate, you are paying just 15% (plus whatever the companies you are invested in are paying, which is generally not much anymore with all the loopholes that they have weaseled out of Congress).

I agree that work is overtaxed, especially at the 80-100k range that still includes FICA.

I think they already tax the rich. If you live in California and are self employed you'll pay about 14% social security tax, the medicare part of this tax on your entire income. Then you'll pay 10% State tax and you'll pay 35% federal tax. And, if the liberals have their way, you'll pay 39.6% starting in two years, you'll also pay a new 3% health care tax (I think) and if you're retired, you'll pay tax on your social security and medicare benefits. Add it all up and the "rich" could be paying almost 2/3rds of their income in various taxes. Oh, yes, in California you also have a hefty sales tax and property tax.

 

[Independent]

As to taxing the rich - over the coming years that economic class will be expanding to include most of us on this board.
.

Most of the people on this board (at least those still w*rking) already pay higher marginal tax rates than the richest Americans. So maybe we can just get the rich up to our levels.

 

[Mulligan]

Do the richest 1% of our country believe that they are "divinely protected" and chosen for "great earthly wealth.?" The unemployment rate of America's young now stands at 21% compared to Egypt which has 25%. Will young Americans react with anger and hostility when they bear the brunt of tax increases? Will they be content when spending on education is drastically reduced while mortgage subsidies and entitlements for the elderly are left untouched as well as tax cuts for the rich? How long will it be before the "rest of the rich world explodes like Egypt?"

Paul Farrell of MarketWatch warns us that the U.S. is headed for a revolution and subsequent depression because the super rich simply don't care.

Tax the Super Rich now or face a revolution Paul B. Farrell - MarketWatch

This might sound like a dumb question but, how does taxing the rich more lower the unemployment rate? I understand if you taxed the wealthy more to reduce the debt, but still doesn't lower the unemployment rate. I guess if you handed out more welfare money they would buy a few more things which might stimulate economy a little bit. But wouldn't that just cause people to be less inclined to get a job if their handouts were enough to live on?

 

[Texas Proud]

This might sound like a dumb question but, how does taxing the rich more lower the unemployment rate? I understand if you taxed the wealthy more to reduce the debt, but still doesn't lower the unemployment rate. I guess if you handed out more welfare money they would buy a few more things which might stimulate economy a little bit. But wouldn't that just cause people to be less inclined to get a job if their handouts were enough to live on?

Well... an interesting question... and I will throw a half backed answer to you.... based on your post...

IF they tax the rich and give the money to the poor... then the poor might not want to look for work since they are getting enough to live on... this reduces the amount of people looking for a job which reduces unemployment... remember, the unemployed for unemployment is the number of people actively looking for work... get rid of everybody looking for work and wha-la.... no unemployment without creating one new job...


Aren't statistics grand