3 ms·

We've got crumbling infrastructure, cash-strapped schools, students loaded with debt, and the fallout from a housing bubble, but Mark Zuckerberg really needs th

We've got crumbling infrastructure, cash-strapped schools, students loaded with debt, and the fallout from a housing bubble, but Mark Zuckerberg really needs that new yacht. Doubling or tripling tax revenue from the super wealthy would not provide the funds to solve any of these problems, if indeed they would be solvable with "more money". There just aren't that many super wealthy people.

ryandrake 11y ago
Is this true, though? I agree there are not that many super wealthy people. But my guess is that these people are so mind-bindingly, astoundingly wealthy, that you could adequately fund most of the government simply by focusing on the top-N (for some value N).
- twoodfin 11y ago
  According to Forbes, there are ~500 billionaires in the U.S., with an average wealth of ~$4B. Let's say $2T total. If you assume they can make 10% annually on that wealth (probably optimistic), that's $200B/year. It is totally implausible given the history of U.S. tax policy and compliance, but let's say you could capture a 50% effective rate of that. That's $100B/year: Not even half the increase in U.S. tax revenue between 2013 and 2014 due to economic growth[1]. Did that extra $200B enable Congress and the President to solve significant problems last year? [1] And whether you believe in the Laffer curve or not, it's hard to imagine that levying a massive tax on billionaires' investment income would have a positive effect on economic growth & thus tax revenue from the non-super-rich.
  - ryandrake 11y ago
    Thanks for doing the math. We can nit-pick over assumptions but that puts it into better perspective. Perhaps the N in "Top-N" needs to be greater, but then you're no longer "focusing" on a particular income level as I initially argued for.
- rayiner 11y ago
  The federal budget is nearly $4 trillion. The top 400 Americans earn about $134 billion. The top 1% earns about $2 trillion. Even taxing them at 50% would only raise half of what was needed.
  - pen2l 11y ago
    I think you make an implicit claim by citing these numbers that taxing those 400 specific Americans more is not the solution to solving problems related to the state not having enough money. But isn't there an argument to be made that when these ultra-rich are stripped of their billions, they are less likely to spend money trying to do things to bend laws to their benefit? If Koch brothers / Soros did not have the billions they do, they'd spend a lot less gaming the system, thereby the larger population of non-rich having greater power in the system, in essence ensuring better democracy, do you agree?
    - rayiner 11y ago
      I don't think that spending in attempts of gaming the system really amount to much: http://freakonomics.com/2012/01/17/how-much-does-campaign-spending-influence-the-election-a-freakonomics-quorum/ http://freakonomics.com/2012/01/17/how-much-does-campaign-sp.... I think we have exactly the government one would expect from taking account of the demographics of voters. 2/3 of voters in midterm federal elections are 45+ and the median voter in municipal elections is pushing 60: https://www.minnpost.com/eric-black-ink/2015/07/tracking-turnout-older-voters-overwhelm-mayoral-elections-st-paul-and-other-c https://www.minnpost.com/eric-black-ink/2015/07/tracking-tur.... Given the demographics, I have a hard time seeing what exactly would be different if the rich had less power. I mean, are we going to raise taxes to make health care free for younger people, when the median voter is going to be eligible for Medicare in a few years anyway? And is it really rich people lobbying for more surveillance and resisting decriminalization of drugs, or is it my mother?
      - ryandrake 11y ago
        > And is it really rich people lobbying for more surveillance and resisting decriminalization of drugs, or is it my mother? While your mother may be voting for such policies, she is likely not lobbying for them (or writing them). The companies and high net worth individuals who have a financial stake in these policies are the ones doing that. Every piece of legislation that exists benefits a rich person in some way.
- bradleyjg 11y ago
  When you actually start doing the math it turns out that you need to tax the plain old rich as well as they super-duper-wealthy. That's what is problematic about rampant special pleading for expansive definitions of "middle class". There was recently an op-ed in the New York Times about this very subject.+ I encourage you to read the comments. Every time the issue is raised you get the same predictable whines about how tough life is on two or three hundred thousand dollars a year. A typical complaint is about how expensive Manhattan apartments are, which is like complaining that it is hard to make ends meet after making the monthly Ferrari payment. + http://www.nytimes.com/2015/12/28/opinion/campaign-stops/250000-a-year-is-not-middle-class.html http://www.nytimes.com/2015/12/28/opinion/campaign-stops/250...

ryandrake 11y ago

Is this true, though? I agree there are not that many super wealthy people. But my guess is that these people are so mind-bindingly, astoundingly wealthy, that you could adequately fund most of the government simply by focusing on the top-N (for some value N).

twoodfin 11y ago
According to Forbes, there are ~500 billionaires in the U.S., with an average wealth of ~$4B. Let's say $2T total. If you assume they can make 10% annually on that wealth (probably optimistic), that's $200B/year. It is totally implausible given the history of U.S. tax policy and compliance, but let's say you could capture a 50% effective rate of that. That's $100B/year: Not even half the increase in U.S. tax revenue between 2013 and 2014 due to economic growth[1]. Did that extra $200B enable Congress and the President to solve significant problems last year? [1] And whether you believe in the Laffer curve or not, it's hard to imagine that levying a massive tax on billionaires' investment income would have a positive effect on economic growth & thus tax revenue from the non-super-rich.
- ryandrake 11y ago
  Thanks for doing the math. We can nit-pick over assumptions but that puts it into better perspective. Perhaps the N in "Top-N" needs to be greater, but then you're no longer "focusing" on a particular income level as I initially argued for.
rayiner 11y ago
The federal budget is nearly $4 trillion. The top 400 Americans earn about $134 billion. The top 1% earns about $2 trillion. Even taxing them at 50% would only raise half of what was needed.
- pen2l 11y ago
  I think you make an implicit claim by citing these numbers that taxing those 400 specific Americans more is not the solution to solving problems related to the state not having enough money. But isn't there an argument to be made that when these ultra-rich are stripped of their billions, they are less likely to spend money trying to do things to bend laws to their benefit? If Koch brothers / Soros did not have the billions they do, they'd spend a lot less gaming the system, thereby the larger population of non-rich having greater power in the system, in essence ensuring better democracy, do you agree?
  - rayiner 11y ago
    I don't think that spending in attempts of gaming the system really amount to much: http://freakonomics.com/2012/01/17/how-much-does-campaign-spending-influence-the-election-a-freakonomics-quorum/ http://freakonomics.com/2012/01/17/how-much-does-campaign-sp.... I think we have exactly the government one would expect from taking account of the demographics of voters. 2/3 of voters in midterm federal elections are 45+ and the median voter in municipal elections is pushing 60: https://www.minnpost.com/eric-black-ink/2015/07/tracking-turnout-older-voters-overwhelm-mayoral-elections-st-paul-and-other-c https://www.minnpost.com/eric-black-ink/2015/07/tracking-tur.... Given the demographics, I have a hard time seeing what exactly would be different if the rich had less power. I mean, are we going to raise taxes to make health care free for younger people, when the median voter is going to be eligible for Medicare in a few years anyway? And is it really rich people lobbying for more surveillance and resisting decriminalization of drugs, or is it my mother?
    - ryandrake 11y ago
      > And is it really rich people lobbying for more surveillance and resisting decriminalization of drugs, or is it my mother? While your mother may be voting for such policies, she is likely not lobbying for them (or writing them). The companies and high net worth individuals who have a financial stake in these policies are the ones doing that. Every piece of legislation that exists benefits a rich person in some way.
bradleyjg 11y ago
When you actually start doing the math it turns out that you need to tax the plain old rich as well as they super-duper-wealthy. That's what is problematic about rampant special pleading for expansive definitions of "middle class". There was recently an op-ed in the New York Times about this very subject.+ I encourage you to read the comments. Every time the issue is raised you get the same predictable whines about how tough life is on two or three hundred thousand dollars a year. A typical complaint is about how expensive Manhattan apartments are, which is like complaining that it is hard to make ends meet after making the monthly Ferrari payment. + http://www.nytimes.com/2015/12/28/opinion/campaign-stops/250000-a-year-is-not-middle-class.html http://www.nytimes.com/2015/12/28/opinion/campaign-stops/250...