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People need to read this and get it through their head - progressive tax rates don't work because the truly wealthy can afford to hire accountants to avoid tax

People need to read this and get it through their head - progressive tax rates don't work because the truly wealthy can afford to hire accountants to avoid tax to a huge degree. It disproportionately effects the middle class.

tormeh 9y ago
They already get most of their income through capital gains, so they dodge 30% on a tax that is about 30-40% percent to begin with. So, yeah, they pay about 25% tax on their earnings. Now how does that compare with most people's tax rate?
- lacampbell 9y ago
  Right. Progressive tax rates don't do what they're supposed to do, because of loop holes, and the fact that the very wealthy can afford accountants.
  - emodendroket 9y ago
    It's pointless to reform tax law in wage earners' favor, because the laws are written to their deficit? Is that your argument?
  - kasey_junk 9y ago
    The capital gains tax rate is neither a loop hole nor progressive.
- deleted 9y ago
  [deleted]
dragonwriter 9y ago
> People need to read this and get it through their head - progressive tax rates don't work because the truly wealthy can afford to hire accountants to avoid tax to a huge degree. It disproportionately effects the middle class. Progressive tax rates on non-capital income, with additional flat taxes on specifically labor income, and lower (but still progressive) rates on capital income hit both low-income workers (because of payroll tax, which bites them hardest due to declining marginal utility) and high-income workers (the part of the middle class that isn't "small business owners") hardest even before considering tax avoidance. A progressive tax on all income without special tax favor for capital and special tax penalty for labor would go a long way toward making things better, even with the possibility of the rich spending some of their money on less rich accountants to avoid some of their tax burden. Avoidance is a much smaller problem than the system being designed to favor the way the ultra-rich earn income from square one.
- lacampbell 9y ago
  Why not scrap income tax altogether and tax land value? It seems insane to me to punish people getting better jobs. But by owning expensive land you are in effect depriving others of using it. If you want to argue a moral basis for taxation, that is surely one. Taxing career advancement instead of property investment and absentee land owners sitting on property seems completely backward. But I never considered that tax laws were probably designed from day 1 to benefit the rich, since the wealthy are so much more influential in any government (including democracies).
- altstar 9y ago
  Is payroll tax paid by the person or the employer?

tormeh 9y ago

They already get most of their income through capital gains, so they dodge 30% on a tax that is about 30-40% percent to begin with. So, yeah, they pay about 25% tax on their earnings. Now how does that compare with most people's tax rate?

lacampbell 9y ago
Right. Progressive tax rates don't do what they're supposed to do, because of loop holes, and the fact that the very wealthy can afford accountants.
- emodendroket 9y ago
  It's pointless to reform tax law in wage earners' favor, because the laws are written to their deficit? Is that your argument?
- kasey_junk 9y ago
  The capital gains tax rate is neither a loop hole nor progressive.
deleted 9y ago
[deleted]

dragonwriter 9y ago

> People need to read this and get it through their head - progressive tax rates don't work because the truly wealthy can afford to hire accountants to avoid tax to a huge degree. It disproportionately effects the middle class. Progressive tax rates on non-capital income, with additional flat taxes on specifically labor income, and lower (but still progressive) rates on capital income hit both low-income workers (because of payroll tax, which bites them hardest due to declining marginal utility) and high-income workers (the part of the middle class that isn't "small business owners") hardest even before considering tax avoidance. A progressive tax on all income without special tax favor for capital and special tax penalty for labor would go a long way toward making things better, even with the possibility of the rich spending some of their money on less rich accountants to avoid some of their tax burden. Avoidance is a much smaller problem than the system being designed to favor the way the ultra-rich earn income from square one.

lacampbell 9y ago
Why not scrap income tax altogether and tax land value? It seems insane to me to punish people getting better jobs. But by owning expensive land you are in effect depriving others of using it. If you want to argue a moral basis for taxation, that is surely one. Taxing career advancement instead of property investment and absentee land owners sitting on property seems completely backward. But I never considered that tax laws were probably designed from day 1 to benefit the rich, since the wealthy are so much more influential in any government (including democracies).
altstar 9y ago
Is payroll tax paid by the person or the employer?