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As an accountant once told me unless you tax wealth then you can't fight this... and good luck getting an annual tax against wealth passed into law. Wealth has

As an accountant once told me unless you tax wealth then you can't fight this... and good luck getting an annual tax against wealth passed into law. Wealth has many of the same problems. Unless you're going to try to tax someone's global holdings (how?), it's much easier for a hedge fund billionaire to park (and enjoy) his money in Chilean wineries and Dubai-registered jets than it is for a mere millionaire. Sure, you can buy a little plot in the south of France or a condo in the Caribbean, but it will cost you a much larger fraction of your income to keep it up and travel to enjoy it. And trusts can shield wealth just as well as they can shield income. It's effectively impossible to make the top few hundred taxpayers pay an effective rate much higher than 15%. But other than some appeal to fairness, who cares? They're already paying thousands of times over what the median taxpayer is.

lifeisstillgood 11y ago
It always is the appeal to fairness - if the folks at the top get away with it, it's like Soviet Dachas, Popes with mistresses etc. The top must be made to be equal if society is to be equal. The how - is what is in the wind - international cooperation.
- rosser 11y ago
  ...if society is to be equal. What you're missing is that people who are in favor of these kinds of shenanigans tend also to be emphatically against this "equality" rubbish.
- twoodfin 11y ago
  "Get away with" paying $56M in taxes annually? That was the average "top 400" taxpayer bill in 2012. https://www.irs.gov/pub/irs-soi/12intop400.pdf https://www.irs.gov/pub/irs-soi/12intop400.pdf Life in the U.S. is good, but nobody is getting an "unfair" allocation of all the great benefits and opportunities the federal government provides if they're paying $56M for it.
  - rayiner 11y ago
    The average income of the top 400 taxpayers is $335 million/year. Had those people been born and grown up in Bangladesh, instead of the U.S., I doubt it would be 1/10th as much, if that. So $56 million a year doesn't sound so bad for the privilege of living in a society that enables wealth creation like few others.
    - twoodfin 11y ago
      Neither would $100M or $200M. And for someone making $50,000, paying a 50% effective rate sounds like a great deal compared to living in Bangladesh. I don't think that argument implies anything about what rates should be, which makes me wonder exactly what it's supposed to demonstrate.
      - rayiner 11y ago
        Presumably, it's "fair" to tax people somehow proportionally to the amount of benefit they derive from living in the U.S. with its government. If someone would make $10 million were they born in Bangladesh, but make $100 million having been born in the U.S, that excess $90 million is a benefit they derive from the U.S. and it's fair to tax them up to $89 million of that. They're still $1 million better off than the baseline. Now, that's the limit of what's morally "fair." What's "optimal," taking into account competing developed countries, may be a lot lower. But taxing up to that limit is "fair."
        lifeisstillgood 11y ago
        That's a really good argument - and emphasises the value of living in one country over another - very reminiscent of city state style arbitrage. I feel there is another "fair" - that of paying the same percentage of income or wealth as everyone else. This is easier to explain and appeals to a more monkey brain part of us. As an example (from the cbsnews link) While the tax rate on dividends has since jumped to 20 percent for people earning more than $400,000 annually, that's still far below the tax imposed on wages for America's highest earners. 20 percent on dividends !? That can't be right ? In the UK we get the same rate as all other income (40 rising to 45). Can I move ?
Lawtonfogle 11y ago
>But other than some appeal to fairness, who cares? You mean justice? And other than an appeal to justice, what is wrong with any injustice?
- wyager 11y ago
  Justice: taking as much as possible from people who I think can live without it.
  - minimuffins 11y ago
    Justice: fair distribution of the world's resources and an opportunity for a decent life, for everybody. Taking as much as possible is what the wealthy do.
    - wyager 11y ago
      "Fair" meaning "as I see fit", right? >Taking as much as possible is what the wealthy do. There's a difference between taking and earning. Some wealthy people take wealth (e.g. steal it), but most of them earn it. Bill Gates didn't take any of my money, but he earned some of it, because I decided that a product his company sold was worth the price. Taxation, on the other hand, is not earned money; it's taken.
      - redblacktree 11y ago
        Please see section 12.2 here[0], quoted below, for a refutation of the idea that "taxation is theft": """Consider the argument "How can we have a holiday celebrating Martin Luther King? After all, he was a criminal!" Technically, Martin Luther King was a criminal, in that he broke some laws against public protests that the racist South had quickly enacted to get rid of him. It's why he famously spent time in Birmingham Jail. And although "criminal" is a very negative-sounding and emotionally charged word, in this case we have to step back from our immediate emotional reaction and notice that the ways in which Martin Luther King was a criminal don't make him a worse person. A philosopher might say we're equivocating between two meanings of "criminal", one meaning of "person who breaks the law", and another meaning of "horrible evil person." Just because King satisfies the first meaning (he broke the law) doesn't mean he has to satisfy the second (be horrible and evil). Or consider the similar argument: "Ayn Rand fled the totalitarian Soviet Union to look for freedom in America. That makes her a traitor!" Should we go around shouting at Objectivists "How can you admire Ayn Rand when she was a dirty rotten traitor"? No. Once again, although "traitor" normally has an automatic negative connotation, we should avoid instantly judging things by the words we can apply to them, and start looking at whether the negative feelings are deserved. Or once again the philosopher would say we should avoid equivocating between "traitor" meaning "someone who switches sides from one country to an opposing country" and "horrible evil untrustworthy person." Our language contains a lot of words like these which package a description with a moral judgment. For example, “murderer” (think of pacifists screaming it at soldiers, who do fit the technical definition “someone who kills someone else”), “greedy” (all corporations are “greedy” if you mean they would very much like to have more money, but politicians talking about “greedy corporations” manage to transform it into something else entirely) and of course that old stand-by “infidel”, which sounds like sufficient reason to hate a member of another religion, when in fact it simply means a member of another religion. It's a stupid, cheap trick unworthy of anyone interested in serious rational discussion. And calling taxation “theft” is exactly the same sort of trick. What's theft? It's taking something without permission. So it's true that taxation is theft, but if you just mean it involves taking without permission, then everyone from Lew Rockwell up to the head of the IRS already accepts that as a given. This only sounds like an argument because the person who uses it is hoping people will let their automatic negative reaction to theft override their emotions, hoping they will equivocate from theft as "taking without permission" to "theft as a terrible act worthy only of criminals". Real arguments aren't about what words you can apply to things and how nasty they sound, real arguments about what good or bad consequences those things produce.""" [0]: http://raikoth.net/libertarian.html#moral_systems http://raikoth.net/libertarian.html#moral_systems
snowwrestler 11y ago
The risk of social unrest grows in approximate proportion to the amount of economic inequality, so the tax policy of a democratic government must be calibrated to redistribute enough wealth to prevent this from happening. That's the practical argument for progressive taxation. Redistribution doesn't have to mean taking cash from one person and handing it to another. Instead taxes pay for investments like national security, scientific research, infrastructure, education, health care, environmental health, etc. These raise the overall living standard, and if the rich pay a larger proportion of these costs, it is a form of redistribution.
- cmurf 11y ago
  That is the historical lesson: give up some of your bounty or give up all of your life. There's a country that once had such unrest about this that the people built machines to make it efficient to remove people's heads, they had so many to remove. And it wasn't just the rich who got caught up in this frenzy, at least one innovative chemist had his head removed and he wasn't all that well to do. So yes, it's destabilizing for ultra wealthy to keep trying to take all the marbles.
ryandrake 11y ago
> It's effectively impossible to make the top few hundred taxpayers pay an effective rate much higher than 15%. This is a problem that could be solved with sufficient political will. But, since our politicians are owned by these top few, and the government provides the framework under which these top few stay at the top, there is effectively zero chance that this political will could ever materialize.

lifeisstillgood 11y ago

It always is the appeal to fairness - if the folks at the top get away with it, it's like Soviet Dachas, Popes with mistresses etc. The top must be made to be equal if society is to be equal. The how - is what is in the wind - international cooperation.

rosser 11y ago
...if society is to be equal. What you're missing is that people who are in favor of these kinds of shenanigans tend also to be emphatically against this "equality" rubbish.
twoodfin 11y ago
"Get away with" paying $56M in taxes annually? That was the average "top 400" taxpayer bill in 2012. https://www.irs.gov/pub/irs-soi/12intop400.pdf https://www.irs.gov/pub/irs-soi/12intop400.pdf Life in the U.S. is good, but nobody is getting an "unfair" allocation of all the great benefits and opportunities the federal government provides if they're paying $56M for it.
- rayiner 11y ago
  The average income of the top 400 taxpayers is $335 million/year. Had those people been born and grown up in Bangladesh, instead of the U.S., I doubt it would be 1/10th as much, if that. So $56 million a year doesn't sound so bad for the privilege of living in a society that enables wealth creation like few others.
  - twoodfin 11y ago
    Neither would $100M or $200M. And for someone making $50,000, paying a 50% effective rate sounds like a great deal compared to living in Bangladesh. I don't think that argument implies anything about what rates should be, which makes me wonder exactly what it's supposed to demonstrate.
    - rayiner 11y ago
      Presumably, it's "fair" to tax people somehow proportionally to the amount of benefit they derive from living in the U.S. with its government. If someone would make $10 million were they born in Bangladesh, but make $100 million having been born in the U.S, that excess $90 million is a benefit they derive from the U.S. and it's fair to tax them up to $89 million of that. They're still $1 million better off than the baseline. Now, that's the limit of what's morally "fair." What's "optimal," taking into account competing developed countries, may be a lot lower. But taxing up to that limit is "fair."
      - lifeisstillgood 11y ago
        That's a really good argument - and emphasises the value of living in one country over another - very reminiscent of city state style arbitrage. I feel there is another "fair" - that of paying the same percentage of income or wealth as everyone else. This is easier to explain and appeals to a more monkey brain part of us. As an example (from the cbsnews link) While the tax rate on dividends has since jumped to 20 percent for people earning more than $400,000 annually, that's still far below the tax imposed on wages for America's highest earners. 20 percent on dividends !? That can't be right ? In the UK we get the same rate as all other income (40 rising to 45). Can I move ?

Lawtonfogle 11y ago

>But other than some appeal to fairness, who cares? You mean justice? And other than an appeal to justice, what is wrong with any injustice?

wyager 11y ago
Justice: taking as much as possible from people who I think can live without it.
- minimuffins 11y ago
  Justice: fair distribution of the world's resources and an opportunity for a decent life, for everybody. Taking as much as possible is what the wealthy do.
  - wyager 11y ago
    "Fair" meaning "as I see fit", right? >Taking as much as possible is what the wealthy do. There's a difference between taking and earning. Some wealthy people take wealth (e.g. steal it), but most of them earn it. Bill Gates didn't take any of my money, but he earned some of it, because I decided that a product his company sold was worth the price. Taxation, on the other hand, is not earned money; it's taken.
    - redblacktree 11y ago
      Please see section 12.2 here[0], quoted below, for a refutation of the idea that "taxation is theft": """Consider the argument "How can we have a holiday celebrating Martin Luther King? After all, he was a criminal!" Technically, Martin Luther King was a criminal, in that he broke some laws against public protests that the racist South had quickly enacted to get rid of him. It's why he famously spent time in Birmingham Jail. And although "criminal" is a very negative-sounding and emotionally charged word, in this case we have to step back from our immediate emotional reaction and notice that the ways in which Martin Luther King was a criminal don't make him a worse person. A philosopher might say we're equivocating between two meanings of "criminal", one meaning of "person who breaks the law", and another meaning of "horrible evil person." Just because King satisfies the first meaning (he broke the law) doesn't mean he has to satisfy the second (be horrible and evil). Or consider the similar argument: "Ayn Rand fled the totalitarian Soviet Union to look for freedom in America. That makes her a traitor!" Should we go around shouting at Objectivists "How can you admire Ayn Rand when she was a dirty rotten traitor"? No. Once again, although "traitor" normally has an automatic negative connotation, we should avoid instantly judging things by the words we can apply to them, and start looking at whether the negative feelings are deserved. Or once again the philosopher would say we should avoid equivocating between "traitor" meaning "someone who switches sides from one country to an opposing country" and "horrible evil untrustworthy person." Our language contains a lot of words like these which package a description with a moral judgment. For example, “murderer” (think of pacifists screaming it at soldiers, who do fit the technical definition “someone who kills someone else”), “greedy” (all corporations are “greedy” if you mean they would very much like to have more money, but politicians talking about “greedy corporations” manage to transform it into something else entirely) and of course that old stand-by “infidel”, which sounds like sufficient reason to hate a member of another religion, when in fact it simply means a member of another religion. It's a stupid, cheap trick unworthy of anyone interested in serious rational discussion. And calling taxation “theft” is exactly the same sort of trick. What's theft? It's taking something without permission. So it's true that taxation is theft, but if you just mean it involves taking without permission, then everyone from Lew Rockwell up to the head of the IRS already accepts that as a given. This only sounds like an argument because the person who uses it is hoping people will let their automatic negative reaction to theft override their emotions, hoping they will equivocate from theft as "taking without permission" to "theft as a terrible act worthy only of criminals". Real arguments aren't about what words you can apply to things and how nasty they sound, real arguments about what good or bad consequences those things produce.""" [0]: http://raikoth.net/libertarian.html#moral_systems http://raikoth.net/libertarian.html#moral_systems

snowwrestler 11y ago

The risk of social unrest grows in approximate proportion to the amount of economic inequality, so the tax policy of a democratic government must be calibrated to redistribute enough wealth to prevent this from happening. That's the practical argument for progressive taxation. Redistribution doesn't have to mean taking cash from one person and handing it to another. Instead taxes pay for investments like national security, scientific research, infrastructure, education, health care, environmental health, etc. These raise the overall living standard, and if the rich pay a larger proportion of these costs, it is a form of redistribution.

cmurf 11y ago
That is the historical lesson: give up some of your bounty or give up all of your life. There's a country that once had such unrest about this that the people built machines to make it efficient to remove people's heads, they had so many to remove. And it wasn't just the rich who got caught up in this frenzy, at least one innovative chemist had his head removed and he wasn't all that well to do. So yes, it's destabilizing for ultra wealthy to keep trying to take all the marbles.

ryandrake 11y ago

> It's effectively impossible to make the top few hundred taxpayers pay an effective rate much higher than 15%. This is a problem that could be solved with sufficient political will. But, since our politicians are owned by these top few, and the government provides the framework under which these top few stay at the top, there is effectively zero chance that this political will could ever materialize.