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I'm actually one of the people who think that the top 0.001% are fine. People like Buffett and Gates own valuable companies. There's not much we can do to chang
by hacknat 11y ago
I'm actually one of the people who think that the top 0.001% are fine. People like Buffett and Gates own valuable companies. There's not much we can do to change income inequality there, largely because it's not income, it's someone's private property.
I think the truly disgusting income inequality is at the top 0.01-0.001%. The overpaid CEOs who make absurd amounts of guaranteed cash. We have a tax code that absolutely incentivizes CEOs to look out for their salaries and one time cash bonuses rather than any stock grants they get.
We used to have a tax code that favored capital gains in the extreme, but now we overly favor income. Which would your rather have? A grant of 10 million dollars in a volatile asset that has a one year lock out period and a 20% haircut, or a guaranteed 10 million dollars with no lock out and an effective haircut of ~40%. You're losing only 20% of the money as a guarantee. Most people seem to be interested in the latter option.
Whenever we have debates about raising capital gains tax Republicans rightly point out that capital gains tax doesn't actually generate that much revenue for the US government. They're right, but that's insane, given how much wealth we generate every year.
I'm all for paying people well, but make them earn it!
- RockyMcNuts 11y agoThe problem is, if you make all your income from investing, via dividends and capital gains, you pay 15% tax on it. The 'wedge' on the first dollar earned by a minimum wage worker is 15.3%. And then don't get me started on the deductions, Mitt Romney's IRA etc. that mean those guys can don't even pay the 15%. I don't think your math adds up...in NYC a huge cash bonus gets taxed at > 50% combined Fed, state and local. The CEO will always take something that's structured as future capital gain, not in 1 year, but whenever he decides to cash out. The tax system and rent seeking in this country is a disgrace.
- deleted 11y ago[deleted]
- encoderer 11y agoMinimum wage workers aren't paying any taxes after standard deduction and exemption. Capital gains is now 20%.
- RockyMcNuts 11y agofair enough, the top bracket (over $400,000) now pays 20% on long-term capital gains and dividends. http://www.fool.com/retirement/general/2015/12/14/long-term-capital-gains-tax-rates-in-2016.aspx http://www.fool.com/retirement/general/2015/12/14/long-term-... the idea that minimum wage earners aren't paying taxes is a nonsensical talking point with no basis in reality. It only works if you disregard FICA, which is economically unjustifiable and not done in other contexts (like quantifying big government's size and tax bite). The bottom line is there is a 15.3% wedge between what the minimum wage employer pays and what the employee receives, and that's what has economic impact. The EITC offsets a part of the wedge, but only a part of it.
- AJ007 11y agoThis Planet Money podcast is worth listening to, "When CEO Pay Exploded." A good exercise in the law of unintended consequences: http://www.npr.org/sections/money/2016/02/05/465747726/-682-when-ceo-pay-exploded http://www.npr.org/sections/money/2016/02/05/465747726/-682-...
- tamana 11y agoWhat's the difference between income and private property? Nothing relevant here. Owning stock is just a ticket to future income, a share of wealth created by employees. Same as a hired CEO payment.