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Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the le

by zo1 11y ago

Progressive taxation is a perfectly acceptable solution. Somewhere, there was some notion that said: "Already-rich people probably make money faster than the less well-off", therefore: "We should tax them more to even things out a little and have an upward push for the less well-off. And on the upside is we have a bit more funding for the state/infrastructure/services.". The problem now comes that society in general are not happy with the outcomes of the above. It's now less about how to provide for a stable, secure society and infrastructure, and more about how will we "fix everything". I believe the very existence of a state means people will want it to fix things, because it's there. And now, someone needs to pay for all the "fixing".

danhak 11y ago
But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.
- zo1 11y ago
  There are arguably much more "regressive" things out there, that are completely avoidable. Inheritance tax, on the other hand, usually has a "lower-bound" that prevents the very poor from being affected. Taxes on investment? You mean, capital gains? Or something like dividends?
- throw_away 11y ago
  I don't understand how estate and capital gains taxes are regressive. Estate taxes (in the United States at least) only kick in on inherited assets > $5M or so (< 0.2% of estates). Capital gains are AFAIK assessed as normal income for short-term gains (so, progressive) and as a flat (neither progressive nor regressive) rate for long-term gains, and even then, only for people with actual investments, which excludes probably the majority of the poor. When I think regressive taxes, I think things that are flat fees, or else things like fica, which cut out after a certain income.
  - danhak 11y ago
    Regressive in the general sense--privileging those who already have access to wealth. The long term capital gains rate is a good example.
    - zo1 11y ago
      They are progressive by their implementations, and by the definition of the word progressive. What it sounds like you are trying to say is that it's not "progressive" enough for your liking. And then you turn the definitions upside down and label it "regressive".
- dvanduzer 11y ago
  Taxes on inheritance are not regressive when you include a sensible floor. Current US Policy places the floor so this tax only affects families somewhere in the upper 1-10% of wealth. Taxes on investment are complex. Considering the fact that most humans do not have anything approaching a real investment portfolio, it's hard to understand what you could mean when you say this kind of tax is regressive. A properly progressive income tax should mean that more people can join the investment class. If the taxation within the investment class is actually regressive, then maybe we worry about that when the majority of humans have this problem.
- mamon 11y ago
  Inherited wealth shouldn't be taxed at all: the testator has already payed the taxes when he was earning all those money he left. Taxing it again is just plain robbery.
  - digbyloftus 11y ago
    All taxation is already robbery. That doesn't get taken in to account when deciding what to tax and at what rate for any other source, I fail to see why inherited wealth should be the exception.
  - ryandrake 11y ago
    If you're worried about "double taxation" I've got some bad news for you: That money was taxed many, many, many times before. When it was earned through labor? Taxed. When it was spent in a store? Taxed. When the store owner made an investment in a company? Taxed. When that company issued a dividend? Taxed. "Taxing it again" is the normal state of things.
zappo2938 11y ago
My argument is that not that the state needs to be 'fixing' things. I'm not saying wealthy people should contribute more just because they are wealthy. It is very unhealthy for the whole if money and the amount of power and control that comes with money gets consolidated into the hands of a very few. We don't need billionaires. I'd much, much rather have 10 people with $100,000,000 than one billionaire; even better is a 1000 people with $1,000,000 to invest. They will keep on make smart investments because they will wont to keep that $1,000,000 or try to get to $2,000,000 or $3,000,000. With the number of people worth more than $250,000,000 that we have now is just a massive disaster that ended with $15,000,000,000,000 debt on the backs of everybody.
- zo1 11y ago
  >"My argument is that not that the state needs to be 'fixing' things." But that's exactly what you're advocating. According to this entire discussion, the state itself is broken in this case, and you want to use the state to cap/prevent the ultra-rich as a remedy to it being broken. How does that not count as "fixing things"? >"We don't need billionaires." Whether we need them or not is irrelevant, they simply exist. Or is their existence something you want to "fix"? >"With the number of people worth more than $250,000,000 that we have now is just a massive disaster that ended with $15,000,000,000,000 debt on the backs of everybody." No, sorry, you have no one but your politicians and political system to blame for that. If you know you have a fallible/corruptible system, and don't change it, then the fault is on you. By you I mean you and the general population. Consequently, if your political system means it is slow to change, and is susceptible to the whims of the public that is easily swayed by the media, then you have to rethink democracy.

by zo1 11y ago

danhak 11y ago

But taxes on inheritance and investment are totally regressive (and have become even more regressive), which undermines the benefits of a progressive system for earned income.

zo1 11y ago
There are arguably much more "regressive" things out there, that are completely avoidable. Inheritance tax, on the other hand, usually has a "lower-bound" that prevents the very poor from being affected. Taxes on investment? You mean, capital gains? Or something like dividends?
throw_away 11y ago
I don't understand how estate and capital gains taxes are regressive. Estate taxes (in the United States at least) only kick in on inherited assets > $5M or so (< 0.2% of estates). Capital gains are AFAIK assessed as normal income for short-term gains (so, progressive) and as a flat (neither progressive nor regressive) rate for long-term gains, and even then, only for people with actual investments, which excludes probably the majority of the poor. When I think regressive taxes, I think things that are flat fees, or else things like fica, which cut out after a certain income.
- danhak 11y ago
  Regressive in the general sense--privileging those who already have access to wealth. The long term capital gains rate is a good example.
  - zo1 11y ago
    They are progressive by their implementations, and by the definition of the word progressive. What it sounds like you are trying to say is that it's not "progressive" enough for your liking. And then you turn the definitions upside down and label it "regressive".
dvanduzer 11y ago
Taxes on inheritance are not regressive when you include a sensible floor. Current US Policy places the floor so this tax only affects families somewhere in the upper 1-10% of wealth. Taxes on investment are complex. Considering the fact that most humans do not have anything approaching a real investment portfolio, it's hard to understand what you could mean when you say this kind of tax is regressive. A properly progressive income tax should mean that more people can join the investment class. If the taxation within the investment class is actually regressive, then maybe we worry about that when the majority of humans have this problem.
mamon 11y ago
Inherited wealth shouldn't be taxed at all: the testator has already payed the taxes when he was earning all those money he left. Taxing it again is just plain robbery.
- digbyloftus 11y ago
  All taxation is already robbery. That doesn't get taken in to account when deciding what to tax and at what rate for any other source, I fail to see why inherited wealth should be the exception.
- ryandrake 11y ago
  If you're worried about "double taxation" I've got some bad news for you: That money was taxed many, many, many times before. When it was earned through labor? Taxed. When it was spent in a store? Taxed. When the store owner made an investment in a company? Taxed. When that company issued a dividend? Taxed. "Taxing it again" is the normal state of things.

zappo2938 11y ago

My argument is that not that the state needs to be 'fixing' things. I'm not saying wealthy people should contribute more just because they are wealthy. It is very unhealthy for the whole if money and the amount of power and control that comes with money gets consolidated into the hands of a very few. We don't need billionaires. I'd much, much rather have 10 people with $100,000,000 than one billionaire; even better is a 1000 people with $1,000,000 to invest. They will keep on make smart investments because they will wont to keep that $1,000,000 or try to get to $2,000,000 or $3,000,000. With the number of people worth more than $250,000,000 that we have now is just a massive disaster that ended with $15,000,000,000,000 debt on the backs of everybody.

zo1 11y ago
>"My argument is that not that the state needs to be 'fixing' things." But that's exactly what you're advocating. According to this entire discussion, the state itself is broken in this case, and you want to use the state to cap/prevent the ultra-rich as a remedy to it being broken. How does that not count as "fixing things"? >"We don't need billionaires." Whether we need them or not is irrelevant, they simply exist. Or is their existence something you want to "fix"? >"With the number of people worth more than $250,000,000 that we have now is just a massive disaster that ended with $15,000,000,000,000 debt on the backs of everybody." No, sorry, you have no one but your politicians and political system to blame for that. If you know you have a fallible/corruptible system, and don't change it, then the fault is on you. By you I mean you and the general population. Consequently, if your political system means it is slow to change, and is susceptible to the whims of the public that is easily swayed by the media, then you have to rethink democracy.