Tax the Super Wealthy

[LoanShark]

Don’t agree with this concept whatsoever. The politicians start at the top and work their way down…pretty soon they’re coming for “you”, that worked, saved and invested wisely.

Why? Because you have “too” much.

I’m much more in favor of a flat tax…everyone should have some skin in the game.

[JGS1980]

That this would be a huge administrative burden and or a major shift for the first year is not a strong enough argument to not do anything.  After having lived and paid taxes in both Norway and France, once you get over the initial shift and start to make a change, alternate systems of taxation do exist and can be implemented.  I bring up Norway and France because the government sends you a pre-filled tax form.  They have your income and, in the case of Norway, an estimate of your taxable wealth.  Very similar to a property assessor, you can either accept the numbers as estimated and available from public records, or you can fight and maybe get a little relief, but it would be impossible for Bezos, Musk, etc. to pay zero tax in Norway...

There are different ways to solve this problem, but there are also examples and frameworks out there to start from.  Otherwise I do believe the direction America is headed is unsustainable even for another decade.  We will start to run up against having to make painful cuts to government spending and lowering the quality of life for 99% of the population, including all of the service industry - that just isn't going to go over well for long...  If it doesn't result in instability, then, at best, we will have a country that looks more like the Philippines or the Middle East - people looking abroad for work that actually pays a living wage and or subjugated domestic workers, and the wealthy handful that can afford to live in compounds and travel abroad, all while protecting their wealth and status against the powerless majority...

I know both of these outcomes (pre-filled tax forms and subjugation of service workers) sound alien and unacceptable to most Americans, but if we cannot find ways to address our problems democratically and make our lifestyle sustainable, then we are going to have to accept changes forced upon us.  And as it currently stands, the wealthy will get to decide what those changes look like.

This reminds me of the Michael Moore doc I just watched on Amazon Prime, Where to Invade Next.
(Moore 'invades' various countries to claim their ideas that work for govt policy)

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

I think, (and I haven't dug into this, but what a great project it would be) it would be really useful to have a really complete and accurate global tax calculator that you could put your before tax income into and learn, here's what I would be taxed in France, Sweden, Canada, Hong Kong. And here's what I get for those taxes.

I think the United States is overdue for a revolution. Not the bloody kind, but a revolution in awareness.
I wonder what the citizens of the United States would do if they actually knew what their taxes were relative to other low and middle class earners in other countries, and what they could be getting in infrastructure, health care and education if their taxes weren't going to line the pockets of the military-industrial complex.

And this isn't an argument against the military or the need for a strong one. It's about efficient spending, appropriate spending, and engaging for the right reasons.

Missy, I'm not a particularly militant individual....... but..... imagine what the military budget of Norway, Finland, Sweden, Denmark, Poland, Germany, France (etc...) would be if they didn't know that the USA continue to spend their money to support a huge military in their region?  There's been a bit of wake up call in that regard over the last 40 days.

Those countries give up POWER, and they get more social services. That's the trade-off.

As for awareness, I think there are plenty of Americans who are more than willing to give up social services for the secondary benefit of knowing that they are citizens of the most powerful country in the world, even if they live at a lower socioeconomic status than some of the countries that they protect. Go figure.

[Missy B]

That this would be a huge administrative burden and or a major shift for the first year is not a strong enough argument to not do anything.  After having lived and paid taxes in both Norway and France, once you get over the initial shift and start to make a change, alternate systems of taxation do exist and can be implemented.  I bring up Norway and France because the government sends you a pre-filled tax form.  They have your income and, in the case of Norway, an estimate of your taxable wealth.  Very similar to a property assessor, you can either accept the numbers as estimated and available from public records, or you can fight and maybe get a little relief, but it would be impossible for Bezos, Musk, etc. to pay zero tax in Norway...

There are different ways to solve this problem, but there are also examples and frameworks out there to start from.  Otherwise I do believe the direction America is headed is unsustainable even for another decade.  We will start to run up against having to make painful cuts to government spending and lowering the quality of life for 99% of the population, including all of the service industry - that just isn't going to go over well for long...  If it doesn't result in instability, then, at best, we will have a country that looks more like the Philippines or the Middle East - people looking abroad for work that actually pays a living wage and or subjugated domestic workers, and the wealthy handful that can afford to live in compounds and travel abroad, all while protecting their wealth and status against the powerless majority...

I know both of these outcomes (pre-filled tax forms and subjugation of service workers) sound alien and unacceptable to most Americans, but if we cannot find ways to address our problems democratically and make our lifestyle sustainable, then we are going to have to accept changes forced upon us.  And as it currently stands, the wealthy will get to decide what those changes look like.

This reminds me of the Michael Moore doc I just watched on Amazon Prime, Where to Invade Next.
(Moore 'invades' various countries to claim their ideas that work for govt policy)

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

I think, (and I haven't dug into this, but what a great project it would be) it would be really useful to have a really complete and accurate global tax calculator that you could put your before tax income into and learn, here's what I would be taxed in France, Sweden, Canada, Hong Kong. And here's what I get for those taxes.

I think the United States is overdue for a revolution. Not the bloody kind, but a revolution in awareness.
I wonder what the citizens of the United States would do if they actually knew what their taxes were relative to other low and middle class earners in other countries, and what they could be getting in infrastructure, health care and education if their taxes weren't going to line the pockets of the military-industrial complex.

And this isn't an argument against the military or the need for a strong one. It's about efficient spending, appropriate spending, and engaging for the right reasons.

Missy, I'm not a particularly militant individual....... but..... imagine what the military budget of Norway, Finland, Sweden, Denmark, Poland, Germany, France (etc...) would be if they didn't know that the USA continue to spend their money to support a huge military in their region?  There's been a bit of wake up call in that regard over the last 40 days.

Those countries give up POWER, and they get more social services. That's the trade-off.

As for awareness, I think there are plenty of Americans who are more than willing to give up social services for the secondary benefit of knowing that they are citizens of the most powerful country in the world, even if they live at a lower socioeconomic status than some of the countries that they protect. Go figure.

I think what I've bolded there is a false duality.  The whole question of militarization and how much is enough is a complex one, and I don't have the knowledge or numbers to say how much of American foreign military action has caused more militarization of 'opposite'  countries and generated more problems that wouldn't have otherwise existed, and how much of that has provided a power balance, that for instance discourages certain dictators to roll unimpeded across Europe.

And having said that, the US military is justifiably famous for its profligate waste and profiteering, and the enrichment of third-party providers, and the lack of spend transparency on many of their programs. I think if Americans were paying fairly for what they're buying in military product, and actually buying what they needed to use, the American govt could afford to dramatically improve educational opportunities and other things that actually serve Americans and their quality of life.

[YttriumNitrate]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

[Jon Bon]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

Thanks for positing that, yes defense spending is nowhere near 60%. CBO says 676B/4.4T = 15%  https://www.cbo.gov/publication/56324

Now yes lets absolutely talk about the spending we do on defense, but lets absolutely not take Michael Moore/Tucker Carlson's word for it eh?

I would also like to point out that only 6.6% of federal income comes from taxing corporations. On some level I feel that is criminally low, but I am not sure what we can really do about it. I don't trust politicians to not put 10 million loopholes into the law, and I don't blame corporations for having smart lawyers who take advantage of those loopholes.

[shureShote]

I’m much more in favor of a flat tax…everyone should have some skin in the game.

A big problem that was discussed a couple pages ago is “flat tax x% of _____”. What goes in the blank? (Hint: don’t say income…)

I am a big fan of that type of concept, but as others have argued quite a bit, it’s not so simple.

I am not a fan of punishing folks at the top,  and I am not a fan of handouts to those at bottom (within reason, which is yet another very difficult and complex thing).

I have read through the whole thread and it does seem that most posters are in favor of something, but I haven’t noticed many common points. That shows just how crazy complex the problem is.

I’d like to see some simplification of the tax code to shore up some of loopholes. Like the idea of some higher VAT style tax, and eliminating the step up basis.

[FIPurpose]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

Thanks for positing that, yes defense spending is nowhere near 60%. CBO says 676B/4.4T = 15%  https://www.cbo.gov/publication/56324

Now yes lets absolutely talk about the spending we do on defense, but lets absolutely not take Michael Moore/Tucker Carlson's word for it eh?

I would also like to point out that only 6.6% of federal income comes from taxing corporations. On some level I feel that is criminally low, but I am not sure what we can really do about it. I don't trust politicians to not put 10 million loopholes into the law, and I don't blame corporations for having smart lawyers who take advantage of those loopholes.

I took the person saying 60% of taxes to mean out of total tax revenue not total spending.

FY 2019 tax revenue was 3.46T so then 676/3460  = ~20%

But just the DoD spending doesn't include everything does it? I mean, 60% seems like a silly number.

You also need to include the ~200B spent on spent Vets in the VA
and another ~50B for the DoD and VA's share of the interest on the national debt.
That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

[YttriumNitrate]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

[SwordGuy]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

The only way to have a plausible claim that the US spends 60% or more on defense is to ignore half of what the US spends.  The most common way this is done is to divide spending into "Discretionary" and "Non-Discretionary" spending, then ignore the non-discretionary spending.   Watch for that terminology on the many misleading "Discretionary" pie charts floating about.

[Jon Bon]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

The only way to have a plausible claim that the US spends 60% or more on defense is to ignore half of what the US spends.  The most common way this is done is to divide spending into "Discretionary" and "Non-Discretionary" spending, then ignore the non-discretionary spending.   Watch for that terminology on the many misleading "Discretionary" pie charts floating about.

For some reason that one really bothers me, just feels like a dirty trick and is also so easily verifiable! Spending is spending, you can call it mandatory, discretionary, or unicorn transactions, it is all spending.

To really complicate matters I could take it the other way and throw in the states taxes and spending. Sure they have the national guard and all of that but I would assume states spend way less on "defense" then the federal government does. So total spending on defense would probably be less than 10% (this is a totally made up number and I have zero desire to actually do the math)

[wageslave23]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

The only way to have a plausible claim that the US spends 60% or more on defense is to ignore half of what the US spends.  The most common way this is done is to divide spending into "Discretionary" and "Non-Discretionary" spending, then ignore the non-discretionary spending.   Watch for that terminology on the many misleading "Discretionary" pie charts floating about.

For some reason that one really bothers me, just feels like a dirty trick and is also so easily verifiable! Spending is spending, you can call it mandatory, discretionary, or unicorn transactions, it is all spending.

To really complicate matters I could take it the other way and throw in the states taxes and spending. Sure they have the national guard and all of that but I would assume states spend way less on "defense" then the federal government does. So total spending on defense would probably be less than 10% (this is a totally made up number and I have zero desire to actually do the math)

Not to mention one of the main purposes, if not THE main purpose of federal government is protection and then second interstate affairs.  So defense spending should be the biggest part of the budget.  And as others said, we subsidize half the other countries in the world by providing them protection which allows them to woefully underspend compared to what they would need to spend if we didn't offer them protection. See Trumps threat to leave NATO if the other countries didn't start to pull their own weight.  See also all NATO countries turning to US to address the Russia crisis. Plus our taxes are much lower than many other comparable European countries. 

[Jon Bon]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

The only way to have a plausible claim that the US spends 60% or more on defense is to ignore half of what the US spends.  The most common way this is done is to divide spending into "Discretionary" and "Non-Discretionary" spending, then ignore the non-discretionary spending.   Watch for that terminology on the many misleading "Discretionary" pie charts floating about.

For some reason that one really bothers me, just feels like a dirty trick and is also so easily verifiable! Spending is spending, you can call it mandatory, discretionary, or unicorn transactions, it is all spending.

To really complicate matters I could take it the other way and throw in the states taxes and spending. Sure they have the national guard and all of that but I would assume states spend way less on "defense" then the federal government does. So total spending on defense would probably be less than 10% (this is a totally made up number and I have zero desire to actually do the math)

Not to mention one of the main purposes, if not THE main purpose of federal government is protection and then second interstate affairs.  So defense spending should be the biggest part of the budget.  And as others said, we subsidize half the other countries in the world by providing them protection which allows them to woefully underspend compared to what they would need to spend if we didn't offer them protection. See Trumps threat to leave NATO if the other countries didn't start to pull their own weight.  See also all NATO countries turning to US to address the Russia crisis. Plus our taxes are much lower than many other comparable European countries.

Yeah I was not really advocating either way, just annoyed when people take the position that we spend more on the military then we do on social programs.

Should it be more or less? Sure? Make your case, convince me, but its not like we have to wait in line for bread because we spent all our money on the new T-72 and nothing on the people either....

[EvenSteven]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

The only way to have a plausible claim that the US spends 60% or more on defense is to ignore half of what the US spends.  The most common way this is done is to divide spending into "Discretionary" and "Non-Discretionary" spending, then ignore the non-discretionary spending.   Watch for that terminology on the many misleading "Discretionary" pie charts floating about.

For some reason that one really bothers me, just feels like a dirty trick and is also so easily verifiable! Spending is spending, you can call it mandatory, discretionary, or unicorn transactions, it is all spending.

To really complicate matters I could take it the other way and throw in the states taxes and spending. Sure they have the national guard and all of that but I would assume states spend way less on "defense" then the federal government does. So total spending on defense would probably be less than 10% (this is a totally made up number and I have zero desire to actually do the math)

Not to mention one of the main purposes, if not THE main purpose of federal government is protection and then second interstate affairs.  So defense spending should be the biggest part of the budget.  And as others said, we subsidize half the other countries in the world by providing them protection which allows them to woefully underspend compared to what they would need to spend if we didn't offer them protection. See Trumps threat to leave NATO if the other countries didn't start to pull their own weight.  See also all NATO countries turning to US to address the Russia crisis. Plus our taxes are much lower than many other comparable European countries.

Yeah I was not really advocating either way, just annoyed when people take the position that we spend more on the military then we do on social programs.

Should it be more or less? Sure? Make your case, convince me, but its not like we have to wait in line for bread because we spent all our money on the new T-72 and nothing on the people either....

I'm also not arguing one way or the other here, but around 10% of US households were uncertain of having, or unable to acquire, enough food to meet the needs of all their members because they had insufficient money or other resources for food during the year.

Better than some countries, but still not great.

[Jon Bon]

You also need to include the ~200B spent on spent Vets in the VA and another ~50B for the DoD and VA's share of the interest on the national debt. That gets you to ~27% of tax revenue. Yeah, not sure where you're going to magically find a missing trillion annually to get to 60%.

Perhaps if you took the numbers from the CBO report Jon Bon posted, you could correctly claim that "Non-defense spending only accounts for 40% of discretionary spending" which would be in line with the numbers Moore uses. Add a healthy dose of spin/slant and you could get that to the US spending 60% of its taxes on defense.

The only way to have a plausible claim that the US spends 60% or more on defense is to ignore half of what the US spends.  The most common way this is done is to divide spending into "Discretionary" and "Non-Discretionary" spending, then ignore the non-discretionary spending.   Watch for that terminology on the many misleading "Discretionary" pie charts floating about.

For some reason that one really bothers me, just feels like a dirty trick and is also so easily verifiable! Spending is spending, you can call it mandatory, discretionary, or unicorn transactions, it is all spending.

To really complicate matters I could take it the other way and throw in the states taxes and spending. Sure they have the national guard and all of that but I would assume states spend way less on "defense" then the federal government does. So total spending on defense would probably be less than 10% (this is a totally made up number and I have zero desire to actually do the math)

Not to mention one of the main purposes, if not THE main purpose of federal government is protection and then second interstate affairs.  So defense spending should be the biggest part of the budget.  And as others said, we subsidize half the other countries in the world by providing them protection which allows them to woefully underspend compared to what they would need to spend if we didn't offer them protection. See Trumps threat to leave NATO if the other countries didn't start to pull their own weight.  See also all NATO countries turning to US to address the Russia crisis. Plus our taxes are much lower than many other comparable European countries.

Yeah I was not really advocating either way, just annoyed when people take the position that we spend more on the military then we do on social programs.

Should it be more or less? Sure? Make your case, convince me, but its not like we have to wait in line for bread because we spent all our money on the new T-72 and nothing on the people either....

I'm also not arguing one way or the other here, but around 10% of US households were uncertain of having, or unable to acquire, enough food to meet the needs of all their members because they had insufficient money or other resources for food during the year.

Better than some countries, but still not great.

Yeah sorry not a great metaphor, I was saying that yeah we have SNAP, SSI, Welfare etc etc. All the government money is not going to building tanks.

[Missy B]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

I'm the first to admit that I'm no expert on US budget and taxes. So color me confused.

https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html

[EvenSteven]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

I'm the first to admit that I'm no expert on US budget and taxes. So color me confused.

https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html

I believe the point was that federal income taxes are not the same as federal taxes. Social security and medicare are payroll taxes, not income taxes. So if one is going to include social security and medicare as part of the budget and expenditures, then you should also include payroll taxes as part of "federal taxes."

[Chris22]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

I'm the first to admit that I'm no expert on US budget and taxes. So color me confused.

https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html

I believe the point was that federal income taxes are not the same as federal taxes. Social security and medicare are payroll taxes, not income taxes. So if one is going to include social security and medicare as part of the budget and expenditures, then you should also include payroll taxes as part of "federal taxes."

Payroll taxes are supposed to be a specific payment into a specific program that you will benefit from later on in life, assuming you don’t die and it doesn’t go insolvent. Payroll taxes are not supposed to be used for the actually running of the government.

In my opinion, it is a very important point that some ~50-60% of Americans don’t pay income tax (I.e. contribute to keeping the government running); that they pay payroll taxes which are intended to benefit them specifically (in the form of SS and access to Medicare) in the future is besides the point.

[FIPurpose]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

I'm the first to admit that I'm no expert on US budget and taxes. So color me confused.

https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html

I believe the point was that federal income taxes are not the same as federal taxes. Social security and medicare are payroll taxes, not income taxes. So if one is going to include social security and medicare as part of the budget and expenditures, then you should also include payroll taxes as part of "federal taxes."

Payroll taxes are supposed to be a specific payment into a specific program that you will benefit from later on in life, assuming you don’t die and it doesn’t go insolvent. Payroll taxes are not supposed to be used for the actually running of the government.

In my opinion, it is a very important point that some ~50-60% of Americans don’t pay income tax (I.e. contribute to keeping the government running); that they pay payroll taxes which are intended to benefit them specifically (in the form of SS and access to Medicare) in the future is besides the point.

woosh

[EvenSteven]

One of the things I learned was that the US spends 60% of its taxes on defense. Having also just recently watched some other docs that referenced 'black' military spending that isn't accountable to congress, I shouldn't have been quite as shocked as I was. But it does explain why a country that does have substantial taxes offers so little to its population for the money they take.

Going back to the last pre-Covid year, total federal expenditures in 2019 were $4.4 trillion and the department of defense budget was $693 billion. That's roughly 15%. The difference between 15% and Moore's number is whether or not you think Social Security/Medicare (and their funding sources) are expenditures (or taxes).

Now, if you believe that military budget really is 60% of federal spending, you must also believe that 50%+ of people aren't paying federal taxes. If you believe military spending is only 15% of federal spending, you must also believe that the vast majority of people are paying federal taxes.

https://en.wikipedia.org/wiki/2019_United_States_federal_budget
https://en.wikipedia.org/wiki/Military_budget_of_the_United_States

I'm the first to admit that I'm no expert on US budget and taxes. So color me confused.

https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html

I believe the point was that federal income taxes are not the same as federal taxes. Social security and medicare are payroll taxes, not income taxes. So if one is going to include social security and medicare as part of the budget and expenditures, then you should also include payroll taxes as part of "federal taxes."

Payroll taxes are supposed to be a specific payment into a specific program that you will benefit from later on in life, assuming you don’t die and it doesn’t go insolvent. Payroll taxes are not supposed to be used for the actually running of the government.

In my opinion, it is a very important point that some ~50-60% of Americans don’t pay income tax (I.e. contribute to keeping the government running); that they pay payroll taxes which are intended to benefit them specifically (in the form of SS and access to Medicare) in the future is besides the point.

Which is fine. If you don't want to include SS and medicare taxes, then don't include social security and medicare as expenditures in the budget. The point by @YttriumNitrate , as far as I understood it, was to be consistent with the income from taxes and the spending.

[Undecided]

Speaking as a wealthy person, I'm all in favor of this. Inequality in the U.S. is out of control. If everyone had a place to live, sufficient food, access to affordable medical care and other basic survival needs, I wouldn't mind as much that there were some very rich individuals. As it is, it's egregious that a tiny number of people can hoard billions of dollars while kids go hungry and people with diabetes have to ration insulin.

The most useful thing about a wealth tax is that it would cut down on generational inequality. If capitalism is about merit, about using your skills and innovating to create value, why is there inheritance? Shouldn't everyone get the same fair shake when they start out, rather than some people getting to coast because their parents were rich?

I live in a country with a wealth tax; I pay it, as virtually all of us do in at least some small part. We also have a much lower estate tax rate than the US does, though (although it's difficult to compare the exclusions---in the US, it's based on the size of the estate, whereas here it's based on the amount that a particular heir receives, so there's some incentive to spread the wealth). Even though we're big on the socialized education and healthcare, we're not so opposed to the accumulation and perpetuation of wealth. I think that it's seen as a very significant factor in encouraging the financial productivity that is generally regarded as the benefit of capitalism; really taking away generational benefit from that would massively change how people choose to earn/save/invest in ways that aren't obviously beneficial.

[Undecided]

Two different issues. One can be against money and influence in politics while also not being against confiscatory taxes. Consider: if the government had fewer touch points on our daily lives, the ability of billionaires to influence government would be greatly reduced. A flat tax would be a great example of this.

So, according to you, massive inequality in our current system would be corrected if government, instead of regulating it away, chooses to take the guardrails off entirely???

I think the healthcare point above is a great example of what can happen when the government "keeps its hands off" our daily lives.

1. I think the massive inequality in our system is looked at incorrectly. I don’t care how far ahead of me Bezos, etc are. We’re better served looking at how far behind others are and trying to fix that. And just taking it from Bezos etc and giving it to others isn’t going to fix that.

2.  Yes, government tries to do too much at once and it distorts things. Look at our Byzantine tax code, where wealthy people can use a zillion tax avoidance schemes to lower their burden, schemes that are often not available to the common person. Throw a flat tax out there and top trying to use the tax code to force a zillion other behaviors and there are much less opportunities for fuckery.

1. Agree to disagree
2. I'd agree to a flat tax if you place it at 25% and only start it AFTER 300K in income. Deal? Also, bring back inheritance tax of 25% of anything over 2.5 million per individual.
[anyone want to do the math on that one?]

How about everyone pays 10k a year for the right to live in the US regardless of income.  If you wat to talk about fairness, that's the most fair.  If you go to Disneyland everyone pays the same amount to get in regardless of how much money they make or how many rides they go on.  Start with "fair" and then add some generosity.

As someone who pays a lot more than that to the US and doesn't even live there, I like it.

[rantk81]

A "Wealth Tax" of sorts can already be considered to exist on anything that is considered for taxes as capital gains -- when you consider inflation.

Now we have an inflation rate that is approaching 10% YoY.  Say for example you held an asset for a year, that appreciated at exactly the same rate as inflation: 10% in one year -- and then sold that asset.  In "real" dollars, you sold the asset for the same price you bought it for.  But since there was 10% inflation, and the asset increased in price by 10% in nominal dollars, you pay capital gains taxes on that fake "gain".  This taxable "fake gain" can be pretty massive, if you have several years of large inflation in a row (which looks likely.)

[EscapeVelocity2020]

A "Wealth Tax" of sorts can already be considered to exist on anything that is considered for taxes as capital gains -- when you consider inflation.

Now we have an inflation rate that is approaching 10% YoY.  Say for example you held an asset for a year, that appreciated at exactly the same rate as inflation: 10% in one year -- and then sold that asset.  In "real" dollars, you sold the asset for the same price you bought it for.  But since there was 10% inflation, and the asset increased in price by 10% in nominal dollars, you pay capital gains taxes on that fake "gain".  This taxable "fake gain" can be pretty massive, if you have several years of large inflation in a row (which looks likely.)

That's actually a good example of how the merely wealthy shoulder tax burdens that the super wealthy can easily skirt.  When you have enough millions in equities, banks are more than happy to accept this as collateral to secure a low rate loan.  So the bank gets a guaranteed return and the super wealthy don't have to pay tax to make their assets liquid. 

[rocketpj]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

 

[GuitarStv]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

Agreed.  Unearned wealth transfers from parent to child are a net negative for society (they defeat the any meritocratic practices in place).

[StarBright]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

[FIPurpose]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

[GuitarStv]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

+1

That's a great article that lays everything out very clearly.

[Undecided]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

Agreed.  Unearned wealth transfers from parent to child are a net negative for society (they defeat the any meritocratic practices in place).

I think the current 40% tax (successfully applied) strikes a reasonable balance between revenue collection and maintaining an important part of the incentive to establish vast fortunes (if you reject the premise that society benefits at all from people having an incentive to establish a vast fortunes, ok, but then why wait until death to impose the taxes?).

[Undecided]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

[GuitarStv]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

Agreed.  Unearned wealth transfers from parent to child are a net negative for society (they defeat the any meritocratic practices in place).

I think the current 40% tax (successfully applied) strikes a reasonable balance between revenue collection and maintaining an important part of the incentive to establish vast fortunes (if you reject the premise that society benefits at all from people having an incentive to establish a vast fortunes, ok, but then why wait until death to impose the taxes?).

I don't believe that society benefits at all from establishment of vast generational fortunes.

Waiting until death to impose taxes seems good because it keeps the primary meritocratic incentive of wealth generation (wealth and the power that it confers) that capitalism depends on in place better than early taxation would, while also sidestepping the establishment of a rich ruling class - who rule by accident of birth rather than personal merit.

[FIPurpose]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

[Undecided]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

Sorry for not being more direct. The AMT was originally meant to tax the super rich, but drifted to hit the middle class. The capital gains exclusion for homes was meant to shield all but the rich, but was allowed to be eroded by inflation. They are two very real examples of why people who are just comfortable (or maybe even a little rich) will be suspect of promises that “tax the super rich” policies won’t come to them.

[FIPurpose]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

Sorry for not being more direct. The AMT was originally meant to tax the super rich, but drifted to hit the middle class. The capital gains exclusion for homes was meant to shield all but the rich, but was allowed to be eroded by inflation. They are two very real examples of why people who are just comfortable (or maybe even a little rich) will be suspect of promises that “tax the super rich” policies won’t come to them.

Wikipedia says that only ~200k were hit with AMT in 2018 from the Trump tax cuts (though they put an expiration on it for 2025). That proves that congress is more than able to reduce taxes on the middle class. So this one way street of taxes always hitting the middle class is kind of lackluster.

[EvenSteven]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

Sorry for not being more direct. The AMT was originally meant to tax the super rich, but drifted to hit the middle class. The capital gains exclusion for homes was meant to shield all but the rich, but was allowed to be eroded by inflation. They are two very real examples of why people who are just comfortable (or maybe even a little rich) will be suspect of promises that “tax the super rich” policies won’t come to them.

This is tangential to the topic, but the effects of the AMT have always been a little unclear to me. What are the situations where middle class Joe's are being hit with the AMT?

[Chris22]

I believe AMT is less of a factor since Trump capped the SALT tax exemption at $10k. Prior to that, it was not unusual if you lived in a high tax state to have a lot of deductions (mortgage interest + property taxes + state income tax) that reduced your tax liability low enough that AMT kicked in. I remember my dad always bitching he was getting hit with it years ago, and his income wasn’t anything too crazy (<$200k in CT in probably late 1990s/into the 2000s) but I don’t remember exactly when he was being affected.

[EvenSteven]

I believe AMT is less of a factor since Trump capped the SALT tax exemption at $10k. Prior to that, it was not unusual if you lived in a high tax state to have a lot of deductions (mortgage interest + property taxes + state income tax) that reduced your tax liability low enough that AMT kicked in. I remember my dad always bitching he was getting hit with it years ago, and his income wasn’t anything too crazy (<$200k in CT in probably late 1990s/into the 2000s) but I don’t remember exactly when he was being affected.

That makes some sense, I also hear about stock options as compensation being involved in being taxed at AMT levels. I think part of it is the wide range of incomes that people consider "middle class." I usually default to thinking of a middle class income as the middle three fifths of the income distribution. 200k in 2000 is around 330K today, which is in about the 98th percentile, so I call that an upper class income, but people's definition of middle class vary widely.

[Chris22]

I believe AMT is less of a factor since Trump capped the SALT tax exemption at $10k. Prior to that, it was not unusual if you lived in a high tax state to have a lot of deductions (mortgage interest + property taxes + state income tax) that reduced your tax liability low enough that AMT kicked in. I remember my dad always bitching he was getting hit with it years ago, and his income wasn’t anything too crazy (<$200k in CT in probably late 1990s/into the 2000s) but I don’t remember exactly when he was being affected.

That makes some sense, I also hear about stock options as compensation being involved in being taxed at AMT levels. I think part of it is the wide range of incomes that people consider "middle class." I usually default to thinking of a middle class income as the middle three fifths of the income distribution. 200k in 2000 is around 330K today, which is in about the 98th percentile, so I call that an upper class income, but people's definition of middle class vary widely.

Less than $200k. I’m guessing because I don’t know when it was, nor the exact incomes in question. He was an engineer and I don’t think ever made more than $125k or so, and retired a few years ago so I’m guessing he was around $100k back then. Mom was a social worker making maybe $50k, and then got an office job and maybe was $75k. Maybe it was less around 2000 and that was more like 2010, I dunno. Anyways in HCOL CT it was comfortable but certainly not extravagant to the point he needed special taxes pointed at him.

[Fishindude]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

This idea would crush family farms which we all depend on to eat.   Many large farmers are "land wealthy" but don't necessarily make huge incomes.  The kids aren't necessarily growing up wealthy either.

These type of things are a slippery slope.   Where do you draw the line on what is considered super wealthy?
How about anyone that has more than me?

[FIPurpose]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

This idea would crush family farms which we all depend on to eat.   Many large farmers are "land wealthy" but don't necessarily make huge incomes.  The kids aren't necessarily growing up wealthy either.

These type of things are a slippery slope.   Where do you draw the line on what is considered super wealthy?
How about anyone that has more than me?

1. Every time these bills come up there is a gigantic exception clause given to family farms.

2. Every time they do a study on how many family farms would be hit by this. Answer: almost none of them. There are no poor, 10 million net-worth farmers. This is a complete myth that's held on since the 80's.

[EvenSteven]

I believe AMT is less of a factor since Trump capped the SALT tax exemption at $10k. Prior to that, it was not unusual if you lived in a high tax state to have a lot of deductions (mortgage interest + property taxes + state income tax) that reduced your tax liability low enough that AMT kicked in. I remember my dad always bitching he was getting hit with it years ago, and his income wasn’t anything too crazy (<$200k in CT in probably late 1990s/into the 2000s) but I don’t remember exactly when he was being affected.

That makes some sense, I also hear about stock options as compensation being involved in being taxed at AMT levels. I think part of it is the wide range of incomes that people consider "middle class." I usually default to thinking of a middle class income as the middle three fifths of the income distribution. 200k in 2000 is around 330K today, which is in about the 98th percentile, so I call that an upper class income, but people's definition of middle class vary widely.

Less than $200k. I’m guessing because I don’t know when it was, nor the exact incomes in question. He was an engineer and I don’t think ever made more than $125k or so, and retired a few years ago so I’m guessing he was around $100k back then. Mom was a social worker making maybe $50k, and then got an office job and maybe was $75k. Maybe it was less around 2000 and that was more like 2010, I dunno. Anyways in HCOL CT it was comfortable but certainly not extravagant to the point he needed special taxes pointed at him.

Right on. In 2000, a household would leave the middle class and move into the upper class of income around $87,000, using my middle 3/5ths definition.

The way Undecided's comment came across to me was that we shouldn't tax the top 0.001% higher than 27% of their income, because there is the possibility that the merely rich might also have their taxes increased. (Note that this is likely not what they meant, just the way their comment came across to me when first reading it.)

[Chris22]

I believe AMT is less of a factor since Trump capped the SALT tax exemption at $10k. Prior to that, it was not unusual if you lived in a high tax state to have a lot of deductions (mortgage interest + property taxes + state income tax) that reduced your tax liability low enough that AMT kicked in. I remember my dad always bitching he was getting hit with it years ago, and his income wasn’t anything too crazy (<$200k in CT in probably late 1990s/into the 2000s) but I don’t remember exactly when he was being affected.

That makes some sense, I also hear about stock options as compensation being involved in being taxed at AMT levels. I think part of it is the wide range of incomes that people consider "middle class." I usually default to thinking of a middle class income as the middle three fifths of the income distribution. 200k in 2000 is around 330K today, which is in about the 98th percentile, so I call that an upper class income, but people's definition of middle class vary widely.

Less than $200k. I’m guessing because I don’t know when it was, nor the exact incomes in question. He was an engineer and I don’t think ever made more than $125k or so, and retired a few years ago so I’m guessing he was around $100k back then. Mom was a social worker making maybe $50k, and then got an office job and maybe was $75k. Maybe it was less around 2000 and that was more like 2010, I dunno. Anyways in HCOL CT it was comfortable but certainly not extravagant to the point he needed special taxes pointed at him.

Right on. In 2000, a household would leave the middle class and move into the upper class of income around $87,000, using my middle 3/5ths definition.

I think if you did that by state you’d get a pretty different answer for Connecticut versus looking at the US as a whole.

Also in the 2000s, my parents had kids in college they were partially paying for (offset by scholarships) for most of the decade (00-06) so I’m sure they didn’t feel like Rockefellers ;)

[GuitarStv]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

This idea would crush family farms which we all depend on to eat.   Many large farmers are "land wealthy" but don't necessarily make huge incomes.  The kids aren't necessarily growing up wealthy either.

These type of things are a slippery slope.   Where do you draw the line on what is considered super wealthy?
How about anyone that has more than me?

1. Every time these bills come up there is a gigantic exception clause given to family farms.

2. Every time they do a study on how many family farms would be hit by this. Answer: almost none of them. There are no poor, 10 million net-worth farmers. This is a complete myth that's held on since the 80's.

My dad's a farmer . . . he lives in an area where there's a lot of family farming.  There's nobody anywhere near him who has a farm worth anywhere near 50 million dollars.  The average farm price in Canada is 2.6 million dollars according to stats-can (https://www.ctvnews.ca/canada/fields-of-dollars-soaring-farmland-prices-threaten-future-of-farming-in-canada-1.3932331).  In the US 89% of farms have a gross yearly income below 350,000 (https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/farming-and-farm-income/) . . . it doesn't sound like they would be sitting on 50 million dollars of assets either.

I really don't think 50 million dollars inheritance would have any real impact on family farms.

[FIPurpose]

I would be ok with not taxing the super wealthy while they are alive, but then taxing inheritances over $10 million by about 90-95%.  Hell, make it $50 million. 

Their kids get all the benefit of growing up wealthy, which is huge.  The people who got rich get to enjoy their wealth.  We don't end up with a large caste of Walton/Koch types who did nothing but be born into a particular family but go around dictating their privilege on the rest of us.  They already have the benefit of the best education and opportunities, and $50 million dollars.  If that isn't enough they can go somewhere else.

This idea would crush family farms which we all depend on to eat.   Many large farmers are "land wealthy" but don't necessarily make huge incomes.  The kids aren't necessarily growing up wealthy either.

These type of things are a slippery slope.   Where do you draw the line on what is considered super wealthy?
How about anyone that has more than me?

1. Every time these bills come up there is a gigantic exception clause given to family farms.

2. Every time they do a study on how many family farms would be hit by this. Answer: almost none of them. There are no poor, 10 million net-worth farmers. This is a complete myth that's held on since the 80's.

My dad's a farmer . . . he lives in an area where there's a lot of family farming.  There's nobody anywhere near him who has a farm worth anywhere near 50 million dollars.  The average farm price in Canada is 2.6 million dollars according to stats-can (https://www.ctvnews.ca/canada/fields-of-dollars-soaring-farmland-prices-threaten-future-of-farming-in-canada-1.3932331).  In the US 89% of farms have a gross yearly income below 350,000 (https://www.ers.usda.gov/data-products/ag-and-food-statistics-charting-the-essentials/farming-and-farm-income/) . . . it doesn't sound like they would be sitting on 50 million dollars of assets either.

I really don't think 50 million dollars inheritance would have any real impact on family farms.

And considering that most farms of that size are only growing corn or canola, and these crops are regularly overgrown anyways, losing a few would not hurt the food supply whatsoever. We could feed the entire US on probably half the farmland if we started using better farming practices.

[Undecided]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

Sorry for not being more direct. The AMT was originally meant to tax the super rich, but drifted to hit the middle class. The capital gains exclusion for homes was meant to shield all but the rich, but was allowed to be eroded by inflation. They are two very real examples of why people who are just comfortable (or maybe even a little rich) will be suspect of promises that “tax the super rich” policies won’t come to them.

Wikipedia says that only ~200k were hit with AMT in 2018 from the Trump tax cuts (though they put an expiration on it for 2025). That proves that congress is more than able to reduce taxes on the middle class. So this one way street of taxes always hitting the middle class is kind of lackluster.

You seem to have a backwards understanding here—the AMT existed for decades and slowly crept into the middle class in high-tax states, after having been created to tax the ultra wealthy who were paying (legally) low taxes in the basis of accounting deductions (as opposed to deductions for actual cash expenses). After many years of that unintended outcome, yes, it was “fixed” in 2018 (by making state tax bills non-deductible, not by raising the income levels or otherwise making a real fix). (As someone who saw my total state and federal taxes increase approximately 2% under the “cuts” of 2018, it didn’t seem much of a fix.) Regardless, it was a real problem for years. If you want to ignore fact because it interferes with your claim that these tax measures could never spread, you’ll excuse those of us who have gone through it if we’re not entirely convinced. That doesn’t mean I don’t think it’s a plausible idea, by the way, just that it’s naive to pretend there’s no meaningful chance of it spreading beyond the current intended audience (and so I think that should be a factor in how any such law is drafted).

[FIPurpose]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

Sorry for not being more direct. The AMT was originally meant to tax the super rich, but drifted to hit the middle class. The capital gains exclusion for homes was meant to shield all but the rich, but was allowed to be eroded by inflation. They are two very real examples of why people who are just comfortable (or maybe even a little rich) will be suspect of promises that “tax the super rich” policies won’t come to them.

Wikipedia says that only ~200k were hit with AMT in 2018 from the Trump tax cuts (though they put an expiration on it for 2025). That proves that congress is more than able to reduce taxes on the middle class. So this one way street of taxes always hitting the middle class is kind of lackluster.

You seem to have a backwards understanding here—the AMT existed for decades and slowly crept into the middle class in high-tax states, after having been created to tax the ultra wealthy who were paying (legally) low taxes in the basis of accounting deductions (as opposed to deductions for actual cash expenses). After many years of that unintended outcome, yes, it was “fixed” in 2018 (by making state tax bills non-deductible, not by raising the income levels or otherwise making a real fix). (As someone who saw my total state and federal taxes increase approximately 2% under the “cuts” of 2018, it didn’t seem much of a fix.) Regardless, it was a real problem for years. If you want to ignore fact because it interferes with your claim that these tax measures could never spread, you’ll excuse those of us who have gone through it if we’re not entirely convinced. That doesn’t mean I don’t think it’s a plausible idea, by the way, just that it’s naive to pretend there’s no meaningful chance of it spreading beyond the current intended audience (and so I think that should be a factor in how any such law is drafted).

This only works if you are looking at individual tax ideas. You just pointed out that despite no longer paying AMT, your taxes still went up. So simply pointing to AMT as the spreading of extra taxes from the rich to the middle class is still suspect. I can agree that there is an issue with AMT and high tax states, ( but also it's a little ridiculous when someone making $200k+ in the 90's is claiming "middle class" status) The AMT is also only marginally larger than regular taxes. An extra 2% is hardly comparable to what we've been talking about (raising billionaires' taxes by about 20%+). It still reads as a nothing burger to me.

Heck look at the estate tax. The exemption in the past 30 years has jumped up ~12MM dollars and the rate has dropped 15%.

A person complaining about the size of the AMT is also the exact same person whose estate taxes have plummeted in the same time period. I can understand preferring estate taxes to AMT, but the end state is still that taxes are regressive for the extremely wealthy.

[Undecided]

Interesting piece from Pro-Publica just came out today:

https://projects.propublica.org/americas-highest-incomes-and-taxes-revealed/

Great piece that really lays out why the wealthiest must have a special tax that hits their assets. They currently pay less than the rest of the top 1%. You have to create special rules that taxes them fairly on the progressive scale that we use.

People that use scare mongering about taxes making it to non-billionaires are actively protecting billionaires' preferred tax status.

I don't think taxing their wealth at death is enough, because people like Gates will hide it behind a charity org that can then be passed on to whoever he wants. The power remains and he avoids taxes on the majority of his wealth. Tax incentives on charity donations also have to be limited. The ultra wealthy also use 501-c3's differently than the rest of us.

Great, but I still paid AMT on my wage income for many years as a consequence of my state tax deduction (not what Congress intended) and paid capital gains taxes on the sale of my pleasant-but-middle-class home because the gain exceeded the one-enormous-seeming exemption (why the US wants to use tax policy to decrease mobility is beyond me), so I understand the fear that the only real trickle-down in the US is from taxes aimed at “the rich” that find their way to others.

The "Super Wealthy" don't pay AMT. We're not talking about the top 5%; we're talking about the top .001%. This is why you have to have a tax that hits their capital gains somehow, otherwise you're saying that their allowed to be taxed at much smaller rates than you. This is about fixing the regressive nature of the top end of the tax bracket. Not finding more revenue.

Sorry for not being more direct. The AMT was originally meant to tax the super rich, but drifted to hit the middle class. The capital gains exclusion for homes was meant to shield all but the rich, but was allowed to be eroded by inflation. They are two very real examples of why people who are just comfortable (or maybe even a little rich) will be suspect of promises that “tax the super rich” policies won’t come to them.

Wikipedia says that only ~200k were hit with AMT in 2018 from the Trump tax cuts (though they put an expiration on it for 2025). That proves that congress is more than able to reduce taxes on the middle class. So this one way street of taxes always hitting the middle class is kind of lackluster.

You seem to have a backwards understanding here—the AMT existed for decades and slowly crept into the middle class in high-tax states, after having been created to tax the ultra wealthy who were paying (legally) low taxes in the basis of accounting deductions (as opposed to deductions for actual cash expenses). After many years of that unintended outcome, yes, it was “fixed” in 2018 (by making state tax bills non-deductible, not by raising the income levels or otherwise making a real fix). (As someone who saw my total state and federal taxes increase approximately 2% under the “cuts” of 2018, it didn’t seem much of a fix.) Regardless, it was a real problem for years. If you want to ignore fact because it interferes with your claim that these tax measures could never spread, you’ll excuse those of us who have gone through it if we’re not entirely convinced. That doesn’t mean I don’t think it’s a plausible idea, by the way, just that it’s naive to pretend there’s no meaningful chance of it spreading beyond the current intended audience (and so I think that should be a factor in how any such law is drafted).

This only works if you are looking at individual tax ideas. You just pointed out that despite no longer paying AMT, your taxes still went up. So simply pointing to AMT as the spreading of extra taxes from the rich to the middle class is still suspect. I can agree that there is an issue with AMT and high tax states, ( but also it's a little ridiculous when someone making $200k+ in the 90's is claiming "middle class" status) The AMT is also only marginally larger than regular taxes. An extra 2% is hardly comparable to what we've been talking about (raising billionaires' taxes by about 20%+). It still reads as a nothing burger to me.

Heck look at the estate tax. The exemption in the past 30 years has jumped up ~12MM dollars and the rate has dropped 15%.

A person complaining about the size of the AMT is also the exact same person whose estate taxes have plummeted in the same time period. I can understand preferring estate taxes to AMT, but the end state is still that taxes are regressive for the extremely wealthy.

So you’re saying it’s ok with you if a tax on the super wealthy (as the AMT was originally intended) does spread to the merely affluent; yeah, that’s exactly why some of those people oppose special new taxes on the “super rich.” 

Also, you’ve doubled the amount of the estate tax exemption and ignored that the increase is a much more recent phenomenon.

I’ve simply pointed out that there are examples of mission drift in taxes on the “super wealthy” over the years. You said “non-billionaires,” but then you’re not worried about Chris22’s example of someone making a couple hundred thousand dollars being picked up, because that’s not “middle class.” There are people between middle class and billionaire status, and I don’t think those people are crazy to be nervous (for their own reasons) about special taxes initially aimed at billionaires.

[EscapeVelocity2020]

I got him by the AMT this year.  I'm no fancy-pants million dollar income ultra wealthy person, but I also don't see the AMT as an example of how taxes intending to hit the rich are now ruining the lives of the merely wealthy.  Overall, my tax rate (Federal income tax paid / total income) was still below 20%.

More frustrating to me is that Warren Buffet, Elon Musk, and Jeff Bezos all pay a lower income tax rate than I do.  They certainly 'have enough' to live the rest of their lives in comfort, so why do people defend their right to use tax loopholes and complain when the government tries to fix them?  They really are getting their money's worth when it comes to PR and influencing Congress.

If Biden's tax proposal were to go through and my net worth exceeds $100M someday, I'll also gladly pay an additional wealth tax.  If I make less income, I don't pay the AMT, and if my net worth were to drop below $100M, I wouldn't pay a wealth tax - oh the horror!

[FIPurpose]

So you’re saying it’s ok with you if a tax on the super wealthy (as the AMT was originally intended) does spread to the merely affluent; yeah, that’s exactly why some of those people oppose special new taxes on the “super rich.” 

Also, you’ve doubled the amount of the estate tax exemption and ignored that the increase is a much more recent phenomenon.

I’ve simply pointed out that there are examples of mission drift in taxes on the “super wealthy” over the years. You said “non-billionaires,” but then you’re not worried about Chris22’s example of someone making a couple hundred thousand dollars being picked up, because that’s not “middle class.” There are people between middle class and billionaire status, and I don’t think those people are crazy to be nervous (for their own reasons) about special taxes initially aimed at billionaires.

I'm saying that if the tax code changes and at the end you basically pay the same but now it's being structured under AMT instead of the regular tax bracket does it really matter? The problem with Chris22's example is that it is only looking at a single point of data in a very complicated system. It'd be like complaining about the price of milk going up but their total grocery bill staying the same. So what? I get that AMT is treated like a scary word, but unless there's some data showing that the AMT is causing a inverted tax structure then it doesn't mean anything. And that doesn't necessarily man that the answer is by changing the AMT portion either.

If at some point in the future a large number of people in the 120-200k income range are all using a CG-debt-death strategy that the super wealthy are using now, then including it further down may make sense. But that's not what people in the 1-2MM range do, so discussing this as even a likelihood doesn't make sense. I see this tax proposal being more akin to the estate tax than the AMT so if anything, I see the cap being raised quite consistently to stay far away from the majority of people.

[Fishindude]

Every time they do a study on how many family farms would be hit by this. Answer: almost none of them. There are no poor, 10 million net-worth farmers. This is a complete myth that's held on since the 80's.

The average decent, well run family farm around here is 1500 acres that could easily be worth $12 mil for the land alone, plus another couple mil in equipment & buildings, and possibly some livestock.
These folks aren't poor, but they certainly aren't baling money either.  $200k Annual income would be pretty normal for folks in this class.   It's a very capitol intense, risky, low margin business.  Be thankful you've got some folks that have chosen this career path.   We need them.