they would threaten to move all operations to somewhere like the Cayman Islands which makes no fucking sense
Yes.
They would fight back, buy all our media sources, and buy our governments to make sure 1 didn't happen.
Sounds familiar... oh wait....
Yes.
In theory - sure. In practice - all countries in the world have to agree to raise taxes, even though individually they are better off betraying this agreement and lowering them, thereby attracting the rich and ending up with more, not less, money.
And if all countries agree to tax the rich the way they should, we might as well go and build socialism everywhere, because not having everyone onboard is a main issue there too.
Why are you arguing against reality? In the world today, some states and countries tax the rich at higher or lower rates than other states and countries, and it's certainly not true that the rich all leave the high tax rate places. The data doesn't lie. You can argue about why they don't all leave, but the facts are there for you to see.
You don't need uniformity around the United States or the world in order to tax the rich effectively. But people like to say what you said, so that you don't even try to tax them.
But I think it would be fun to run an experiment. Why don't we jack up taxes on the ultra-rich across the United States. If the ultra rich move to Venezuela, then all of the savings they have in the US stock market will be taxed at an even higher rate and we will actually get more money from them. And if they were working any cushy CEO jobs, those jobs will now be open for other American citizens, and I'm sure there were plenty of people willing to apply... Of course it doesn't have to be the US. Pick any country, try the same experiment, and get back to us.
It’s probably not possible at this point. If there was some kind of revolution, poor people could have access to healthcare, education, shelter, and food. You know, basic dignity and hope for a better future. But the problem is that hopeless wage slaves are better for capitalism.
Every country would have to do it. A party here in Switzerland wanted to drastically increase inheritance tax for certain large inheritances, and the rich people threatened so hard to leave the country that everyone believed them and now nobody supports it anymore. (They said their children would not be able to pay the tax because most of their wealth is supposedly in company shares, so if they died their children would have to sell off the companies to Cineese companies which nobody in Switzerland liked to hear)
Of course that's not true. We have data from around the world showing it's not true. It's not even true within the United States if you look at state taxes.
Why not pay in shares?
No. If someone's rich they can lobby if they can lobby they will act within theyre best interest.
Theoretically, sure. Pragmatically, we just elected a fascist insurrectionist, and it's not going to happen in the near future.
We?
Yeah, that's fair. US mindset, I'm just still processing our shitshow.
They write the tax laws and buy the politicians to pass those tax laws. So no, we cannot tax the rich.
The newly elected government is actually quite cost efficient in this regard. Since they already are all crooked business men, they don't need to pay anyone to get those tax laws passed.
go lookup the tax rates in the 60s/70s. we used to
The highest bracket was taxed at 70% until Reagan’s first plan in 1981 lowered it to 50%.
It’s currently at 37% under Trump’s 2018 tax plan.
https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/
Keep in mind that's Income Tax. Most rich people don't actually have income, they have capital gains.
Right, that’s the real problem. We’re over hear bickering about income tax rates, while the wealthy are sitting there playing a shell game with : income? Find the income. Which cup is it under? If you tax the right one, you win a prize. Just like any shell game, the only way to win is to not play.
It's possible, but usually harder because what makes the uber wealthy uber wealthy is that they own assets rather than have huge income.
So when they say Bill Gates, Elon Musk, Bezos or whoever has "X" billions, they're talking about the value of assets they own (usually large stakes in successful companies) which has more of a parallel with how the middle class talk about their house (an asset) now being worth (whatever). It's not liquid cash.
Taxes on assets are typically realised when those assets are sold or transferred because their value goes up and down and all over the place. And the uber wealthy do pay tax whenever they sell stock because they're buying this mansion or that yacht. It's just usually comparatively small to their full fortune which remains in stock.
So the difficult thing about taxing stock while it's owned is, like I said, the value goes up and down quite dramatically at times. Should the government collect taxes on the buoyant times but then refund them during market downturns? That would be a nightmare. No government wants to be on the hook for refunds during a downturn.
And it can't (I don't think) just collect taxes when super valuable stocks are on the way up because that's not actually cash. It's just the market value if that stock were to be sold. So the most a government could do would be either to receive some of the stock as a tax payment (not much use to a government that wants to spend it) or force the owners of companies to sell stock and make a cash payment just because they're successful.
Which sounds fine on the surface, but this messes up how ownership of companies works. Let's say some good guy CEO (they do exist) has managed the growth of a multi billion business and to do so has brought in investors which now own 49% of the company, and he - the founder - owns 51%. If the company's value on the market rose 20% you'd get news articles about how the founder now has "XX billion" since last year and that they "earn" so many hundreds of thousands a day compared to your average working class person. If the government forced the owner to part with 3% of their ownership of the company in order to pay this "growth tax" then the founder no longer has overall control of the company. It would be 48% founder owner, 49% investors and 3% whoever the government sell the taxed stock to in order to realise a cash value.
So it erodes ownership. Again I'm sure there are plenty reading this who think "so what?". But I can tell you that much of the market value of stock, the reason it has the value it does, is in many cases because the market trusts the management of the ownership of the companies to continue to make profit. If you force the erosion of that just because the company did well then you destroy the way the market trusts and ascribes value to things. Which is why the way governments tax company is via profits and stock sales, where the value is already realised or where the decision to sell is not forced in the same way.
So what to do about this?
Well you can just increase the taxes on stock sale, or on dividend income. But what happens there is you snare the wealthy middle class with the same rope you were aiming at the uber wealthy. Again some might not think that a bad thing, but it's unlikely to be as effective as people would like it to be. You'd generally be raising dividend tax by a percentage point or two on people receiving low six figure sums. Which would get some extra from the Elon Musks, but also would get the same amount from, say, a consultant surgeon, or a recent tech startup founder etc. My point being, there are not huge numbers of these people, compared to the rest of the population that government spending is spread over. The amount you end up raising is not huge compared to what seemed to be on offer when you look at Meta's total net worth or something like that.
The ultimate answer is about ownership. But it has to be organic (personal opinion) so that it doesn't cause disruption to the markets that end up hurting the most vulnerable (via job losses).
And the best way this is done is to simply suck it up and pay a little more for a non mega corp solution to something. Want Bezos to have less of the pie? Stop buying through Amazon just because it's cheaper. Want Gates fortune to be more wide spread? Save yourself a ton of cash by using Linux instead of windows + office licences. Don't like Elon musk? Stop using twitter, don't buy a Tesla.
If you've done all these things I personally think it's as much as you can do. You should put your efforts into making these boycots as easy for others to follow as possible (support your favourite FOSS project) etc. Pay for the online services you like so they don't feel the need to resort to Google ads and on. Unfortunately in a free market such as the ones many of us live in (thinking Western world) the uber wealthy are mainly that because of the millions and millions of micro choices by consumers who are free to go elsewhere but just often don't choose to.
In point of fact, mark to market taxation already does exist for various individuals and certainly for large numbers of businesses. Your long comment suggests that you don't know what that is, and if you're interested you could read up on it.
The short story is that depending on the situation, a person or a business might pay taxes each year on the value of their assets, assuming said assets had been purchased on January 1st and sold on December 31st, even though in reality nothing was bought or sold. This system is already in place in various ways. It exists. There's no theoretical problem with expanding it.
Thanks. Yes will certainly read up on it. I've come to finance somewhat backwards, having to learn very specific technical things for working in IT and I'm now working backwards to some generalities I might have totally missed.
Is this a tax on the market cap of the company though? Or is it a tax on assets it holds?
I believe the general sentiment is "Bezos / Amazon is worth XX billion why can't the state have a slice of that for social good?" But I think various existing taxes are smaller and too far removed from the headline value of the market cap of the business. And there isn't anything that would enrich the public purse to that degree short of having a comparable stake in the ownership of the business.
I think Germany actually does something like this but I don't know much about it.
Ultimately I think it's right that something feels a bit 'wrong' about one man like Musk, Bezos, Gates having control over such huge wealth, but as I was saying above those complaints generally ignore that this is a value of an asset not cash and it's not like the government could do something with Amazon shares if it has them other than just sell them. The complaints also generally ignore that these uber wealthy are paying tax whenever they sell stock to have more cash on hand, and that one day whenever they cash out of the company entirely, that'll be a windfall tax take for the government too.
I get that the inequality feels wrong. But it's hard not to feel like it's "we the people" that make Amazon (or whatever) so valuable by continually choosing to trade with it. Same way professional footballers have an absurd amount of money. But then millions of people are all willing to spend $x to watch them specifically play. If we don't like it we have other choices, but we don't want to.
How dare you come up with a nuanced take on this topic instead of screaming “eat the rich”!
There’s also the very important concept of a capital gains tax. Why does their income from stock sales get to be taxed at a special low rate, as if it weren’t income? That’s ridiculous
We’d go a long way toward evening it out just by deciding
Assets are taxed all the time (real estate tax, car tax.. ). So taxing the value of a share portfolio at the 31st of December each year is perfectly doable. And if it has depreciated since last year, you get a tax deduction.. which is capped by the income tax to maximally reach 0... No carrying over till next year.. or maybe 1 year.. whatever, that's implementation details.
How much do you tax these assets is the point that needs consideration.. it's not fully income... But a percentage is only fair. And if this means people need to realize gains to pay for it.. that's fine... Why would it not be?
And borrowing against an asset portfolio should mean that it counts as realizing gains of the asset portfolio and the amount is seen as income and thus taxed. (You loan 10 million against your shares, that's income) And to avoid fallout for the normal people you can build in a threshold and exclusions for example for the first million in your lifetime.. or for the mortgage on your primary residence with a cap at the median house price or .. something. So for these people borrowing against assets means they can keep the assets… but pay interest on the loan. Alternatively they can actually realize the gains and pay cash.
It's not hard at all, it's a matter of political will, and writing proper laws that state your objective and exceptions.
While the ultra wealthy don't have billions on hand, they do take loans against their assets, which we could tax more.
I like Bernie's idea of taxing every trade on the stock market.
Why that would be huge:
It would incentize the rich to hold stocks long term, this would lead to corporations thinking more than what profits are in 3 months.
Which translates to greater stability for other investors and job security for the people who work there.
But it's never going to happen as long as ~~Smaug~~ Pelosi and people like her who's main priority is personal wealth is running the Dem party. Because we all know Republicans will never support it.
But if we don't purge the Dem party of neo liberals, and fast, we're all fucked. We can't keep walking down the path of "the rich always get richer" like nothing is wrong.
Wealth is finite. And without taxes and regulations the people who already have a lot will always accumulate more faster than they can spend it.
With them hoarding all that wealth, no one else has any.
Not only that. It stops a lot of the AI micro trading bullshit
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