27 ms·

Panama: The Hidden Trillions

138 points by jonathansizz 10y ago

rrggrr 10y ago
Obama recently bemoaned the 8 trillion or so in wealth that is not circulating with much, if any, frequency in the US economy. As he and others have observed, it's sequestered overseas and at home, waiting for a time when confidence is higher and taxes lower. Unless a mechanism exists to prevent smart money from finding safe havens from taxes, instability and currency flux (Even China is currently failing at this task) redistribution and populist ideals are always due to fail. This is the message the "trickle down" and free market cheerleaders try to communicate, poorly.
- deleted 10y ago
  [deleted]
- zzleeper 10y ago
  TBH most of it is not about finding havens but about avoiding taxes.
- xmdgngsnsgnn 10y ago
  Or, you know, we could just seize the assets because of tax evasion. But that will never happen because our politicians are in the pocket of the robber barons.
  - tanto 10y ago
    I think most of them are actually robber barons themself. At least the ones with real influence.
  - nathan_f77 10y ago
    Most (if not all) of these cases are not dealing with tax evasion. It's actually legal tax avoidance, so there's no way to seize the assets because no-one has actually broken the law. Many countries have very low (or zero) tax rates, so you can legally set up a company and put your money there. I think one way to get rid of tax havens is with an international treaty to set some minimum tax rates, and have an embargo against any country that doesn't meet those requirements. It's not just the rich who are to blame, it's the countries that turn themselves into tax havens and make this all possible.
    - xmdgngsnsgnn 10y ago
      The laws say whatever politicians want them to say. If you pay the people who write the laws to turn your tax evasion into a legalized form of "tax avoidance," the inverse can just as easily be done to turn "tax avoidance" back into "tax evasion."
- oldmanjay 10y ago
  I suppose a case could be made that people are entitled to a share of the success that they didn't help provide, but no one ever even tries to make it. It's just assumed to be true. Care to make the case? If you lean on the nebulous idea that being born into a society is somehow a contribution to any particular success in general, I'm going to assume you're bullshitting. Fair warning.
  - sliverstorm 10y ago
    It's less a matter of what you are entitled to, and more that society doesn't work very well with gross disparity. I always argue it's in the interests of the wealthy to mind that everyone else is happy with the way things are. Otherwise you get violent populist uprisings. Stability & happiness of the whole country are in the interest of those on top of it.
    - mr_spothawk 10y ago
      enter the NFL, MLB, NBA & Netflix + cheap flat screen televisions.
      - brational 10y ago
        yep. and if we'd just clear up healthcare then the masses would be set and placated.
      - hbt 10y ago
        Keeping the population in line by fattening them up and distracting them only works if they believe in something bigger than themselves. With the lack of community and the focus on individual and the self, people will not be fulfilled if they know someone else is doing so much better. It's the classic monkey experiment with cucumbers. If all monkeys get cucumbers, they are all okay with it. If one monkey gets a cherry while the other gets a cucumber, the cucumber monkey feels it's unfair and gets angry. You can keep humans in shitty conditions if they believe in something bigger than themselves. That the shitty conditions are justified and therefore fair.
  - 10y ago
- afterburner 10y ago
  The rich and corporations hiding their money is precisely the problem with "trickle down" and an unregulated free market. The solution is not to give in and pay the extortion money (ie. cut taxes), but to reign them in.
throwaway1974 10y ago
Maybe Obama should consider a tax amnesty? Get money in from outside the US at a low tax rate (something is better than nothing right) and get it circulating in the US creating jobs and funding startups/ideas Just today we had news about one in Indonesia http://www.reuters.com/article/us-indonesia-tax-idUSKCN1200R7?il=0 http://www.reuters.com/article/us-indonesia-tax-idUSKCN1200R...
- tanto 10y ago
  Why should the biggest villains get amnesty when small time crooks get sentenced for life? I would rather prefer if the ones doing the worst crimes resulting in millions of people dying because of poverty get also sentenced for life.
  - twblalock 10y ago
    Are you more interested in punishing people, or repatriating money from tax havens and using it to solve national problems, including poverty?
    - xmdgngsnsgnn 10y ago
      >repatriating money from tax havens and using it to solve national problems, including poverty There is little evidence that this will actually occur, otherwise places like Panama would be utopian paradises from all of the foreign cash. You can't solve "national problems, including poverty," if you refuse to tax the incoming money and instead let it continue to sit in corporate coffers.
    - ionised 10y ago
      I'm interested in both.
- nradov 10y ago
  Tax amnesties just encourage future tax evasion, since everyone will always be waiting for another amnesty. They create a moral hazard by causing disrespect for the rule of law.
twblalock 10y ago
This is what you get when the majority of tax revenue comes from a small tax base. For example, according to Pew Research (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ http://www.pewresearch.org/fact-tank/2016/04/13/high-income-...): > In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%. In the state of California, "New figures from the Franchise Tax Board show that the wealthiest 1% of Californians paid 50.6% of the state income tax in 2012 — up from 41.1% in 2011. It means that of nearly 15 million tax returns, about 150,000 generated more than half the revenue." (http://www.latimes.com/local/la-me-cap-taxes-20140505-column.html http://www.latimes.com/local/la-me-cap-taxes-20140505-column...) It's not very healthy to collect taxes this way. As the LA Times article indicated, California's tax revenue fluctuates based on the incomes of a pretty small number of people. When a small number of people provide most of the tax revenue, yet the political discourse constantly accuses them of not paying a fair share, it's not hard to see why they feel persecuted and try to hide their money. It's also hard to say that they aren't paying their "fair share" when they provide more than half of the government's tax revenue. Anyone who wants them to pay more ought to provide some kind of objective way to calculate what someone's "fair share" of tax is, and that's probably impossible.
- cloudjacker 10y ago
  If you are concerned about people paying their "fair share" at all then you are playing by the wrong set of rules. Governments funding themselves by income tax is a 100 year old phenomenon. That particular form of passive revenue generation isn't an absolute. Governments subsidized roads and schools before then, whether it was from property taxes, nationalized industries, bond programs, outright expropriation or any other form of revenue generation. Compliance with passive taxation literally requires indoctrination, and there are people that reach a place in society where they can opt out of it. This isn't a "stance" I subscribe to, it is a reality I can perceive. It would be disingenuous for me to say I don't understand what is going on, or hand waive it away as saying these people neglect their "civic duty".
cryptozeus 10y ago
he says. “Previously, we thought that the offshore world was a shadowy, but minor, part of our economic system. What we learned from the Panama Papers is that it is the economic system.”
deleted 10y ago
[deleted]
marcrosoft 10y ago
Let us not forget countries have a need to compete just like companies. If a foreign country taxes more than others you must expect some companies/individuals to move their assets to a country that taxes at a lower rate. To expect otherwise would be unreasonable. This is not tax evasion, but people making rational decisions given their options.
- mixmastamyk 10y ago
  Well, it is not so easy to change countries as an individual. Not to mention you basically have to pay off the US and renounce citizenship to do so.
  - marcrosoft 10y ago
    This is just part of the decision making process. If lower taxes out weighs the downside, the decision becomes obvious.
- elchief 10y ago
  Paul Krugman, Nobel Prize winner, disagrees: https://hbr.org/1996/01/a-country-is-not-a-company https://hbr.org/1996/01/a-country-is-not-a-company
  - refurb 10y ago
    That blog post has absolutely nothing to do with the OP's point. It's talking about economic policy, not the rationale behind moving countries.
  - SixSigma 10y ago
    If we're going to appeal to authority Micheal Porter, the most cited author in business and economics and six-time winner of the McKinsey Award for the best Harvard Business Review article of the year agrees : Porter wrote "The Competitive Advantage of Nations" in 1990. The book is based on studies of ten nations and argues that a key to national wealth and advantage was the productivity of firms and workers collectively, and that the national and regional environment supports that productivity. He proposed the "diamond" framework, a mutually-reinforcing system of four factors that determine national advantage: factor conditions; demand conditions; related or supporting industries; and firm strategy, structure and rivalry. Information, incentives, and infrastructure were also key to that productivity.
panamaguy 10y ago
I'm doing a self funded start-up and I moved to Panama from SF to save on taxes. I was paying over 50% tax and now I pay 0% tax. By moving here my start-up went from unviable to very competitive. I am now able to undercut my only competitor and will likely drive them out of business sometime next year. Once that happens I'll raise my prices and make even more money. This is business; if I didn't do this someone else would do it to me. Same thing happened to me with a previous company and a Chinese competitor. Lost ten years of savings and 4 years of my life on that one. I much prefer living in the US but it was just impossible to make the numbers work. I could have survived with a 10-20% tax but there is no way that is happening in the near future in the US. The point I want to get across is; irrespective on what you think is fair the US tax rate is uncompetitive and driving small business out of the country. Big companies get to stay because they can afford the more expensive tax avoidance schemes. Little guys like myself are either driven out of business or out of the country.
- tome 10y ago
  > I am now able to undercut my only competitor and will likely drive them out of business sometime next year. Unless they also move to Panama?
- elorant 10y ago
  So why not having a company in Panama and just get a salary from it and keep reinvesting the profits? Why did you have to move there physically?
  - panamaguy 10y ago
    US taxes on global income if you're a tax resident of the US. There are ways to do it but at the low end it costs more than the taxes so it's not worth it.
    - mixmastamyk 10y ago
      I thought they also do it to expats, except for some token amount such as 100k/yr.
qaq 10y ago
It seems there is too much focus on what is "fair". If one looks at all the opinions it's very hard to come up with unified way to define what is "fair". Going by comments one of the unifying themes is "fair"being defined as "me" paying less and someone else paying more. I think many people feel if 1% payed more in taxes and the rest payed less it would lead to more disposable income in reality it would very likely lead to asset inflation just for a different class of assets.
hal9000xp 10y ago
There is a few GOOD aspects of offshore zones and financial secrecy laws which almost nobody takes into account. In authoritarian countries like Russia, corporate raids made by those who are close to law endorsement structures are pretty common thing. In order to do that, they often put high pressure to a company's owners. For them it's usually harder to put pressure on a company when it's not clear who are the owners. Another reason is that often authoritarian countries have ridiculous regulations regarding cross-border trading. So offshore company often is used as a shell company to facilitate easier cross-border trading. Sure, there is a big abuse of offshores but let's not forget that governments across the globe are not ultimate source of truth and goodness. If you turn down offshore zones, you will turn down many economies across the globe (especially economies of authoritarian countries which are at the bottom economic freedom rating). P.S. I lived 22 years in UZ, then 9 years in RU, now in NL.
zackmorris 10y ago
A lot of misinformation in the comments on this feed. I can't persuade their authors that their opinions are on the wrong side of history, but I can say that as I've become wealthier I've felt the desire to tip at least 20% and secretly donate to worthy causes. I’ve also felt troubled by this because it is charity. I'm voting with my dollars for the people and businesses that I believe contribute to my community. Take that to its logical conclusion and it means that the more money I have, the more influence I have in society. This is antithetical to my dream of a future where people are freed from fruitless labor and authoritarian control. We all live two lives - the one of our dreams and the one that happens while we’re making other plans. Right now the vast majority of us have been forced into a default life of making rent and reactionary decision making. Some of us have been lucky enough to find respite in yolo or living for others through our children. But fundamentally we’re still trapped in the rat race. I’ve come to the conclusion that money represents time that someone has sacrificed for someone else. So the quarter of my income I saved in my bank account last year represents one year of my life, and you can tell by that ratio roughly how much I make per year. Go down a few tens of thousands of dollars and the ratio falls to zero, or even negative. Go up a little the other direction and the ratio approaches 100% and then celebrity. About half of Americans have no savings, which means they aren’t being compensated for their lives, not really. So I’ve already stolen from them, by the fact that I have disposable income and they don’t. A handful of Americans make more money from their wealth than they would working, if they ever started (optional work is called a hobby). So they’ve already stolen from me, because I have to work and they don’t. Yet people make the argument time and again that people with the least amount of money (who have stolen the least) should pay higher taxes and the people who have “acquired” the most money should pay lower taxes as some kind of post-incentive. Riiight. So this old notion that taxation is theft doesn’t make sense because money itself is theft. Hoarding vast amounts of it from others so they have to work harder just leads to the vicious cycle of inequality we’re stuck in. No, the best way forward that I can see is to opt out of a high income and instead work every day towards a vision of the future where money isn’t needed anymore. Where people make bigger contributions doing what they want to do with their lives than they ever could by laboring under someone else’s thumb. This is going back to Jeffersonian ideas of trusting society as a whole to make governing decisions rather than leaving elites to pick winners and losers. I would rather take a median income to provide everyone else at least a basic income and watch our culture flourish than subscribe to a meritocratic ideal that crowns the fastest rat.

138 points by jonathansizz 10y ago

Obama recently bemoaned the 8 trillion or so in wealth that is not circulating with much, if any, frequency in the US economy. As he and others have observed, it's sequestered overseas and at home, waiting for a time when confidence is higher and taxes lower. Unless a mechanism exists to prevent smart money from finding safe havens from taxes, instability and currency flux (Even China is currently failing at this task) redistribution and populist ideals are always due to fail. This is the message the "trickle down" and free market cheerleaders try to communicate, poorly.

deleted 10y ago
[deleted]
zzleeper 10y ago
TBH most of it is not about finding havens but about avoiding taxes.
xmdgngsnsgnn 10y ago
Or, you know, we could just seize the assets because of tax evasion. But that will never happen because our politicians are in the pocket of the robber barons.
- tanto 10y ago
  I think most of them are actually robber barons themself. At least the ones with real influence.
- nathan_f77 10y ago
  Most (if not all) of these cases are not dealing with tax evasion. It's actually legal tax avoidance, so there's no way to seize the assets because no-one has actually broken the law. Many countries have very low (or zero) tax rates, so you can legally set up a company and put your money there. I think one way to get rid of tax havens is with an international treaty to set some minimum tax rates, and have an embargo against any country that doesn't meet those requirements. It's not just the rich who are to blame, it's the countries that turn themselves into tax havens and make this all possible.
  - xmdgngsnsgnn 10y ago
    The laws say whatever politicians want them to say. If you pay the people who write the laws to turn your tax evasion into a legalized form of "tax avoidance," the inverse can just as easily be done to turn "tax avoidance" back into "tax evasion."
oldmanjay 10y ago
I suppose a case could be made that people are entitled to a share of the success that they didn't help provide, but no one ever even tries to make it. It's just assumed to be true. Care to make the case? If you lean on the nebulous idea that being born into a society is somehow a contribution to any particular success in general, I'm going to assume you're bullshitting. Fair warning.
- sliverstorm 10y ago
  It's less a matter of what you are entitled to, and more that society doesn't work very well with gross disparity. I always argue it's in the interests of the wealthy to mind that everyone else is happy with the way things are. Otherwise you get violent populist uprisings. Stability & happiness of the whole country are in the interest of those on top of it.
  - mr_spothawk 10y ago
    enter the NFL, MLB, NBA & Netflix + cheap flat screen televisions.
    - brational 10y ago
      yep. and if we'd just clear up healthcare then the masses would be set and placated.
    - hbt 10y ago
      Keeping the population in line by fattening them up and distracting them only works if they believe in something bigger than themselves. With the lack of community and the focus on individual and the self, people will not be fulfilled if they know someone else is doing so much better. It's the classic monkey experiment with cucumbers. If all monkeys get cucumbers, they are all okay with it. If one monkey gets a cherry while the other gets a cucumber, the cucumber monkey feels it's unfair and gets angry. You can keep humans in shitty conditions if they believe in something bigger than themselves. That the shitty conditions are justified and therefore fair.
- 10y ago
afterburner 10y ago
The rich and corporations hiding their money is precisely the problem with "trickle down" and an unregulated free market. The solution is not to give in and pay the extortion money (ie. cut taxes), but to reign them in.

throwaway1974 10y ago

Maybe Obama should consider a tax amnesty? Get money in from outside the US at a low tax rate (something is better than nothing right) and get it circulating in the US creating jobs and funding startups/ideas Just today we had news about one in Indonesia http://www.reuters.com/article/us-indonesia-tax-idUSKCN1200R7?il=0 http://www.reuters.com/article/us-indonesia-tax-idUSKCN1200R...

tanto 10y ago
Why should the biggest villains get amnesty when small time crooks get sentenced for life? I would rather prefer if the ones doing the worst crimes resulting in millions of people dying because of poverty get also sentenced for life.
- twblalock 10y ago
  Are you more interested in punishing people, or repatriating money from tax havens and using it to solve national problems, including poverty?
  - xmdgngsnsgnn 10y ago
    >repatriating money from tax havens and using it to solve national problems, including poverty There is little evidence that this will actually occur, otherwise places like Panama would be utopian paradises from all of the foreign cash. You can't solve "national problems, including poverty," if you refuse to tax the incoming money and instead let it continue to sit in corporate coffers.
  - ionised 10y ago
    I'm interested in both.
nradov 10y ago
Tax amnesties just encourage future tax evasion, since everyone will always be waiting for another amnesty. They create a moral hazard by causing disrespect for the rule of law.

twblalock 10y ago

This is what you get when the majority of tax revenue comes from a small tax base. For example, according to Pew Research (http://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/ http://www.pewresearch.org/fact-tank/2016/04/13/high-income-...): > In 2014, people with adjusted gross income, or AGI, above $250,000 paid just over half (51.6%) of all individual income taxes, though they accounted for only 2.7% of all returns filed, according to our analysis of preliminary IRS data. Their average tax rate (total taxes paid divided by cumulative AGI) was 25.7%. By contrast, people with incomes of less than $50,000 accounted for 62.3% of all individual returns filed, but they paid just 5.7% of total taxes. Their average tax rate was 4.3%. In the state of California, "New figures from the Franchise Tax Board show that the wealthiest 1% of Californians paid 50.6% of the state income tax in 2012 — up from 41.1% in 2011. It means that of nearly 15 million tax returns, about 150,000 generated more than half the revenue." (http://www.latimes.com/local/la-me-cap-taxes-20140505-column.html http://www.latimes.com/local/la-me-cap-taxes-20140505-column...) It's not very healthy to collect taxes this way. As the LA Times article indicated, California's tax revenue fluctuates based on the incomes of a pretty small number of people. When a small number of people provide most of the tax revenue, yet the political discourse constantly accuses them of not paying a fair share, it's not hard to see why they feel persecuted and try to hide their money. It's also hard to say that they aren't paying their "fair share" when they provide more than half of the government's tax revenue. Anyone who wants them to pay more ought to provide some kind of objective way to calculate what someone's "fair share" of tax is, and that's probably impossible.

cloudjacker 10y ago
If you are concerned about people paying their "fair share" at all then you are playing by the wrong set of rules. Governments funding themselves by income tax is a 100 year old phenomenon. That particular form of passive revenue generation isn't an absolute. Governments subsidized roads and schools before then, whether it was from property taxes, nationalized industries, bond programs, outright expropriation or any other form of revenue generation. Compliance with passive taxation literally requires indoctrination, and there are people that reach a place in society where they can opt out of it. This isn't a "stance" I subscribe to, it is a reality I can perceive. It would be disingenuous for me to say I don't understand what is going on, or hand waive it away as saying these people neglect their "civic duty".

cryptozeus 10y ago

he says. “Previously, we thought that the offshore world was a shadowy, but minor, part of our economic system. What we learned from the Panama Papers is that it is the economic system.”

deleted 10y ago

[deleted]

marcrosoft 10y ago

Let us not forget countries have a need to compete just like companies. If a foreign country taxes more than others you must expect some companies/individuals to move their assets to a country that taxes at a lower rate. To expect otherwise would be unreasonable. This is not tax evasion, but people making rational decisions given their options.

mixmastamyk 10y ago
Well, it is not so easy to change countries as an individual. Not to mention you basically have to pay off the US and renounce citizenship to do so.
- marcrosoft 10y ago
  This is just part of the decision making process. If lower taxes out weighs the downside, the decision becomes obvious.
elchief 10y ago
Paul Krugman, Nobel Prize winner, disagrees: https://hbr.org/1996/01/a-country-is-not-a-company https://hbr.org/1996/01/a-country-is-not-a-company
- refurb 10y ago
  That blog post has absolutely nothing to do with the OP's point. It's talking about economic policy, not the rationale behind moving countries.
- SixSigma 10y ago
  If we're going to appeal to authority Micheal Porter, the most cited author in business and economics and six-time winner of the McKinsey Award for the best Harvard Business Review article of the year agrees : Porter wrote "The Competitive Advantage of Nations" in 1990. The book is based on studies of ten nations and argues that a key to national wealth and advantage was the productivity of firms and workers collectively, and that the national and regional environment supports that productivity. He proposed the "diamond" framework, a mutually-reinforcing system of four factors that determine national advantage: factor conditions; demand conditions; related or supporting industries; and firm strategy, structure and rivalry. Information, incentives, and infrastructure were also key to that productivity.

panamaguy 10y ago

I'm doing a self funded start-up and I moved to Panama from SF to save on taxes. I was paying over 50% tax and now I pay 0% tax. By moving here my start-up went from unviable to very competitive. I am now able to undercut my only competitor and will likely drive them out of business sometime next year. Once that happens I'll raise my prices and make even more money. This is business; if I didn't do this someone else would do it to me. Same thing happened to me with a previous company and a Chinese competitor. Lost ten years of savings and 4 years of my life on that one. I much prefer living in the US but it was just impossible to make the numbers work. I could have survived with a 10-20% tax but there is no way that is happening in the near future in the US. The point I want to get across is; irrespective on what you think is fair the US tax rate is uncompetitive and driving small business out of the country. Big companies get to stay because they can afford the more expensive tax avoidance schemes. Little guys like myself are either driven out of business or out of the country.

tome 10y ago
> I am now able to undercut my only competitor and will likely drive them out of business sometime next year. Unless they also move to Panama?
elorant 10y ago
So why not having a company in Panama and just get a salary from it and keep reinvesting the profits? Why did you have to move there physically?
- panamaguy 10y ago
  US taxes on global income if you're a tax resident of the US. There are ways to do it but at the low end it costs more than the taxes so it's not worth it.
  - mixmastamyk 10y ago
    I thought they also do it to expats, except for some token amount such as 100k/yr.

qaq 10y ago

It seems there is too much focus on what is "fair". If one looks at all the opinions it's very hard to come up with unified way to define what is "fair". Going by comments one of the unifying themes is "fair"being defined as "me" paying less and someone else paying more. I think many people feel if 1% payed more in taxes and the rest payed less it would lead to more disposable income in reality it would very likely lead to asset inflation just for a different class of assets.

hal9000xp 10y ago

There is a few GOOD aspects of offshore zones and financial secrecy laws which almost nobody takes into account. In authoritarian countries like Russia, corporate raids made by those who are close to law endorsement structures are pretty common thing. In order to do that, they often put high pressure to a company's owners. For them it's usually harder to put pressure on a company when it's not clear who are the owners. Another reason is that often authoritarian countries have ridiculous regulations regarding cross-border trading. So offshore company often is used as a shell company to facilitate easier cross-border trading. Sure, there is a big abuse of offshores but let's not forget that governments across the globe are not ultimate source of truth and goodness. If you turn down offshore zones, you will turn down many economies across the globe (especially economies of authoritarian countries which are at the bottom economic freedom rating). P.S. I lived 22 years in UZ, then 9 years in RU, now in NL.

zackmorris 10y ago

A lot of misinformation in the comments on this feed. I can't persuade their authors that their opinions are on the wrong side of history, but I can say that as I've become wealthier I've felt the desire to tip at least 20% and secretly donate to worthy causes. I’ve also felt troubled by this because it is charity. I'm voting with my dollars for the people and businesses that I believe contribute to my community. Take that to its logical conclusion and it means that the more money I have, the more influence I have in society. This is antithetical to my dream of a future where people are freed from fruitless labor and authoritarian control. We all live two lives - the one of our dreams and the one that happens while we’re making other plans. Right now the vast majority of us have been forced into a default life of making rent and reactionary decision making. Some of us have been lucky enough to find respite in yolo or living for others through our children. But fundamentally we’re still trapped in the rat race. I’ve come to the conclusion that money represents time that someone has sacrificed for someone else. So the quarter of my income I saved in my bank account last year represents one year of my life, and you can tell by that ratio roughly how much I make per year. Go down a few tens of thousands of dollars and the ratio falls to zero, or even negative. Go up a little the other direction and the ratio approaches 100% and then celebrity. About half of Americans have no savings, which means they aren’t being compensated for their lives, not really. So I’ve already stolen from them, by the fact that I have disposable income and they don’t. A handful of Americans make more money from their wealth than they would working, if they ever started (optional work is called a hobby). So they’ve already stolen from me, because I have to work and they don’t. Yet people make the argument time and again that people with the least amount of money (who have stolen the least) should pay higher taxes and the people who have “acquired” the most money should pay lower taxes as some kind of post-incentive. Riiight. So this old notion that taxation is theft doesn’t make sense because money itself is theft. Hoarding vast amounts of it from others so they have to work harder just leads to the vicious cycle of inequality we’re stuck in. No, the best way forward that I can see is to opt out of a high income and instead work every day towards a vision of the future where money isn’t needed anymore. Where people make bigger contributions doing what they want to do with their lives than they ever could by laboring under someone else’s thumb. This is going back to Jeffersonian ideas of trusting society as a whole to make governing decisions rather than leaving elites to pick winners and losers. I would rather take a median income to provide everyone else at least a basic income and watch our culture flourish than subscribe to a meritocratic ideal that crowns the fastest rat.