7 ms·

Personally I'm all for taxing the shit out of rich people (higher rates, treating capital gains as income, high inheritance taxes, abolishing loopholes that let

by Eridrus 11y ago

Personally I'm all for taxing the shit out of rich people (higher rates, treating capital gains as income, high inheritance taxes, abolishing loopholes that let companies stash profits overseas where they're not effectively reinvested, etc), but I feel like the argument around UBI is more likely to involve cuts, because if we gave every person in the US $100/month, it would cost the US $385 billion dollars, which is 10% of the entire federal tax budget.

gozo 11y ago
Yeah, that's one thing that seem strange to me. In the US you have all these highly profitable tech companies that stash their profits overseas, but at the same time complain how they can't find enough talent. While the middle class are now supposed to get UBI because they don't have enough education to stay in the workforce. How about instead you close the loopholes, reform taxes and direct the money towards education. On the other hand maybe Google could buy their own school in the Cayman Islands...
- MCRed 11y ago
  Please explain how Apple a company that made a computer in china, and then sells that same compute run china, and keeps the profits from selling the computer in China is "stashing its profits overseas". This argument presumes that all money made worldwide should be taxed in the USA. No country does that.
  - kobayashi 11y ago
    Exactly. The people arguing to "close tax loopholes" don't understand that it's not loopholes being used by companies who haven't yet repatriated large sums of money. It's a product of sovereignty. Those companies need to be incentivized to patriate their money, but the current tax regime simply makes keeping money abroad the financially responsible decision.
    - gozo 11y ago
      Well, I literally (literally) slept trough this discussion, but for the record please tell me how the "check the box" rule is not a loophole. It was a mistake from trying to make the tax rules simpler which wasn't supposed to happen and they've tried to repeal it multiple times without success. http://www.reuters.com/article/2013/05/31/us-usa-tax-checkthebox-insight-idUSBRE94T17K20130531 http://www.reuters.com/article/2013/05/31/us-usa-tax-checkth...
      - kobayashi 11y ago
        Hmm, that's an interesting article. Although I'm familiar with the commonplace tactic of oversees shifting of profits, I never knew that the legal principle described in the article as "check the box" was widely considered to be a tax loophole.
  - istjohn 11y ago
    The value of Apple's products is in the design and other intellectual property development, which is created in the US by American workers.
  - Eridrus 11y ago
    This isn't really what happens though, they avoid paying taxes in China too by running everything through their Irish subsidiary. And then it gets parked there while they demand a tax holiday so that they can distribute these profits to their shareholders.
  - JacobAldridge 11y ago
    Worth researching the concept of "Controlled Foreign Corporation". If I live in Missouri [1], have a manufacturer make a computer in China, sell it China, and run everything through my Chinese company ... the IRS would still tax me as if the profits came through the USA because the foreign company is deemed "controlled" through the USA. So Apple, due to their size and structure (many more shareholders) can create subsidiaries and shelter revenue to avoid tax in a way that I cannot. [1] I'm not 100% au fait with US Tax Law in this regard. Being an Australian and UK Citizen I know those jurisdictions more intimately, but understand the US is similar. This is separate to the USA's "citizen-based" (rather than residency or territory based) tax system, which chases income/tax for citizens around the world. The FEIE alleviates some of this, but Eritrea is the only other country that "does that".
- crdoconnor 11y ago
  >at the same time complain how they can't find enough talent. They won't ever stop complaining about that. More talent > more competition in the labor market > lower wages > a lower wage bill > higher profits Since the biggest cost for all tech companies is their wage bill, they'll lobby for anything that puts downward pressure on salaries.
  - louithethrid 11y ago
    > the more high tech companys, the more work is done by the tech > unemployment rises > labour costs undercut robots > less high tech companys. Its a plant, it will fix itself by promoting self-obsoletian.
merpnderp 11y ago
IT doesn't change your point, but it would cost $319 billion, not $385. There are 319 million people in the US.
- Eridrus 11y ago
  100 x 12 = 1200 319m x 1200 = 382b So it was still wrong, but ~380b is still roughly the right number.
- function_seven 11y ago
  and 12 months in a year.
- billforsternz 11y ago
  No. Per year not per month. 319x10^6 x $100 x 12 months = $382x10^9.
- twoodfin 11y ago
  There are 12 months in our non-metric years.
skybrian 11y ago
The tax does have to come from somewhere, preferably something we actually want to discourage like a carbon tax. (Since we're dreaming anyway.) On the other hand, the average person breaks even by design.
- marcosdumay 11y ago
  Well, for some definition of average, anyway. The income distribution is not normal, thus even if the tax is completely proportional, more than half the people would get more than they pay.
megaman821 11y ago
There would obviously have to be a change in the tax rate to balance things out. If we had a $10k/year UBI then a person make $100k/year would pay less than $5k taxes net if the tax code didn't change. I think if we a a 25-30% flat tax the numbers would make more sense.
crdoconnor 11y ago
Taxing the rich is good for us whatever happens, mostly because it will collapse the sky-high cost of property (and consequently rents).
- Asbostos 11y ago
  I'd argue that rents are high because too many people want to live near each other. Property that people want is a scarce resource so something has to stop people getting it - if not price then what? A waiting list? A lottery? If you set up your lifestyle so you're not dependent on being a short taxi ride from 100,000 other people, then you don't have to pay high rents at all. If you are dependent on that, then you must be doing something fantastically productive so you can afford to pay high rent.
  - dalke 11y ago
    > because too many people want to live near each other Your market analysis is incomplete. For example, http://www.theguardian.com/business/2014/feb/01/rich-overseas-investors-uk-eu-housing-market http://www.theguardian.com/business/2014/feb/01/rich-oversea... says "only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia." These are not people who live there, but want to invest in the London real estate market. By taking housing out of the market, they also increase the market rates through artificial scarcity. > if not price then what Different taxation for residents vs. non-residents. Rich people tend to have large places, so taxation based on square footage per resident. Set up building requirements that give preference to low-cost housing. There are many ways to tweak the economic landscape. > If you set up your lifestyle .. You make it sound so easy. Why not just set up your life to earn another $100K/year? > you must be doing something fantastically productive Why does that follow? If I inherited my $1 billion, I'm certainly able to afford a quaint $10 million penthouse in San Francisco even if just leave the money in an index fund. If I am a dictator who funneled money out of the country into my personal foreign bank account, leaving the country in poverty, would you say I was productive? Or if someone discovers oil on my land, and I exchange the drilling rights in exchange for 1% of the extracted revenue, making me rich enough to, say, move to Beverley Hills, was I really doing something fantastically productive?
jdietrich 11y ago
Negative income tax is a very slick mechanism for implementing a basic income. The administrative infrastructure is already in place, and it's very easy to tweak the tax code so that only poor people are net beneficiaries - you just nudge the standard deduction or the rate. $385bn is a big scary number. Transferring $100/person/mo from the top 10% to the bottom 10% of earners via taxation is perfectly straightforward. https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax

by Eridrus 11y ago

gozo 11y ago

Yeah, that's one thing that seem strange to me. In the US you have all these highly profitable tech companies that stash their profits overseas, but at the same time complain how they can't find enough talent. While the middle class are now supposed to get UBI because they don't have enough education to stay in the workforce. How about instead you close the loopholes, reform taxes and direct the money towards education. On the other hand maybe Google could buy their own school in the Cayman Islands...

MCRed 11y ago
Please explain how Apple a company that made a computer in china, and then sells that same compute run china, and keeps the profits from selling the computer in China is "stashing its profits overseas". This argument presumes that all money made worldwide should be taxed in the USA. No country does that.
- kobayashi 11y ago
  Exactly. The people arguing to "close tax loopholes" don't understand that it's not loopholes being used by companies who haven't yet repatriated large sums of money. It's a product of sovereignty. Those companies need to be incentivized to patriate their money, but the current tax regime simply makes keeping money abroad the financially responsible decision.
  - gozo 11y ago
    Well, I literally (literally) slept trough this discussion, but for the record please tell me how the "check the box" rule is not a loophole. It was a mistake from trying to make the tax rules simpler which wasn't supposed to happen and they've tried to repeal it multiple times without success. http://www.reuters.com/article/2013/05/31/us-usa-tax-checkthebox-insight-idUSBRE94T17K20130531 http://www.reuters.com/article/2013/05/31/us-usa-tax-checkth...
    - kobayashi 11y ago
      Hmm, that's an interesting article. Although I'm familiar with the commonplace tactic of oversees shifting of profits, I never knew that the legal principle described in the article as "check the box" was widely considered to be a tax loophole.
- istjohn 11y ago
  The value of Apple's products is in the design and other intellectual property development, which is created in the US by American workers.
- Eridrus 11y ago
  This isn't really what happens though, they avoid paying taxes in China too by running everything through their Irish subsidiary. And then it gets parked there while they demand a tax holiday so that they can distribute these profits to their shareholders.
- JacobAldridge 11y ago
  Worth researching the concept of "Controlled Foreign Corporation". If I live in Missouri [1], have a manufacturer make a computer in China, sell it China, and run everything through my Chinese company ... the IRS would still tax me as if the profits came through the USA because the foreign company is deemed "controlled" through the USA. So Apple, due to their size and structure (many more shareholders) can create subsidiaries and shelter revenue to avoid tax in a way that I cannot. [1] I'm not 100% au fait with US Tax Law in this regard. Being an Australian and UK Citizen I know those jurisdictions more intimately, but understand the US is similar. This is separate to the USA's "citizen-based" (rather than residency or territory based) tax system, which chases income/tax for citizens around the world. The FEIE alleviates some of this, but Eritrea is the only other country that "does that".
crdoconnor 11y ago
>at the same time complain how they can't find enough talent. They won't ever stop complaining about that. More talent > more competition in the labor market > lower wages > a lower wage bill > higher profits Since the biggest cost for all tech companies is their wage bill, they'll lobby for anything that puts downward pressure on salaries.
- louithethrid 11y ago
  > the more high tech companys, the more work is done by the tech > unemployment rises > labour costs undercut robots > less high tech companys. Its a plant, it will fix itself by promoting self-obsoletian.

merpnderp 11y ago

IT doesn't change your point, but it would cost $319 billion, not $385. There are 319 million people in the US.

Eridrus 11y ago
100 x 12 = 1200 319m x 1200 = 382b So it was still wrong, but ~380b is still roughly the right number.
function_seven 11y ago
and 12 months in a year.
billforsternz 11y ago
No. Per year not per month. 319x10^6 x $100 x 12 months = $382x10^9.
twoodfin 11y ago
There are 12 months in our non-metric years.

skybrian 11y ago

The tax does have to come from somewhere, preferably something we actually want to discourage like a carbon tax. (Since we're dreaming anyway.) On the other hand, the average person breaks even by design.

marcosdumay 11y ago
Well, for some definition of average, anyway. The income distribution is not normal, thus even if the tax is completely proportional, more than half the people would get more than they pay.

megaman821 11y ago

There would obviously have to be a change in the tax rate to balance things out. If we had a $10k/year UBI then a person make $100k/year would pay less than $5k taxes net if the tax code didn't change. I think if we a a 25-30% flat tax the numbers would make more sense.

crdoconnor 11y ago

Taxing the rich is good for us whatever happens, mostly because it will collapse the sky-high cost of property (and consequently rents).

Asbostos 11y ago
I'd argue that rents are high because too many people want to live near each other. Property that people want is a scarce resource so something has to stop people getting it - if not price then what? A waiting list? A lottery? If you set up your lifestyle so you're not dependent on being a short taxi ride from 100,000 other people, then you don't have to pay high rents at all. If you are dependent on that, then you must be doing something fantastically productive so you can afford to pay high rent.
- dalke 11y ago
  > because too many people want to live near each other Your market analysis is incomplete. For example, http://www.theguardian.com/business/2014/feb/01/rich-overseas-investors-uk-eu-housing-market http://www.theguardian.com/business/2014/feb/01/rich-oversea... says "only 27% of new homes in central London went to UK buyers, while more than half were sold to residents of Singapore, Hong Kong, China, Malaysia and Russia." These are not people who live there, but want to invest in the London real estate market. By taking housing out of the market, they also increase the market rates through artificial scarcity. > if not price then what Different taxation for residents vs. non-residents. Rich people tend to have large places, so taxation based on square footage per resident. Set up building requirements that give preference to low-cost housing. There are many ways to tweak the economic landscape. > If you set up your lifestyle .. You make it sound so easy. Why not just set up your life to earn another $100K/year? > you must be doing something fantastically productive Why does that follow? If I inherited my $1 billion, I'm certainly able to afford a quaint $10 million penthouse in San Francisco even if just leave the money in an index fund. If I am a dictator who funneled money out of the country into my personal foreign bank account, leaving the country in poverty, would you say I was productive? Or if someone discovers oil on my land, and I exchange the drilling rights in exchange for 1% of the extracted revenue, making me rich enough to, say, move to Beverley Hills, was I really doing something fantastically productive?

jdietrich 11y ago

Negative income tax is a very slick mechanism for implementing a basic income. The administrative infrastructure is already in place, and it's very easy to tweak the tax code so that only poor people are net beneficiaries - you just nudge the standard deduction or the rate. $385bn is a big scary number. Transferring $100/person/mo from the top 10% to the bottom 10% of earners via taxation is perfectly straightforward. https://en.wikipedia.org/wiki/Negative_income_tax https://en.wikipedia.org/wiki/Negative_income_tax