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Per the IRS, the total income of the top 5% of households is $1685472000000, which, when divided among the 139,960,580 households submitting tax returns, comes

Per the IRS, the total income of the top 5% of households is $1685472000000, which, when divided among the 139,960,580 households submitting tax returns, comes out at $12,000 per household. That sounds like it's in the ballpark of what you'd need for healthcare, US idiosyncrasies notwithstanding. Now, of course nobody is realistically suggesting taking all that money. That would be neither fair nor useful. Because everybody agrees that some reward is necessary to motivate people, and that they should get to enjoy the spoils.

LiteskinKanye 9y ago
For one year...
rayiner 9y ago
That number just shows why “tax the rich more” isn’t the way to pay for services everyone uses like healthcare. Top 5% isn’t just Bill Gates and Warren Buffet. Bay Area engineers will hit that living alone. So will a couple where e.g. one person is a nurse and another is in IT. It’s a very expansive group. Total spending at all levels of government in the US is almost $7 trillion. So even if you tax the top 5% at 75%, you’re covering 17% of total expenditures. European countries don’t build their welfare states by heavily taxing the rich. In say Germany, an entry level office worker will pay 30%+ of their income in taxes and mandatory insurance.
- AnthonyMouse 9y ago
  > So even if you tax the top 5% at 75%, you’re covering 17% of total expenditures. And that's assuming a 75% effective rate, which you can't get at the 95th percentile without also charging high effective rates to the majority of people because it's not possible to charge more than a 100% marginal rate on the difference.
- ianai 9y ago
  So don't tax the rich more. Tax the ways by which the inequalities arise. Create counter forces against market concentration. For instance, if there really were alternatives to desktop Windows and Mac desktops (from the hardware through to software levels) then computers would be more affordable and wide spread. That affordability has an income increasing affect on the customer side.
  - paulryanrogers 9y ago
    How would this be enforced?
    - ianai 9y ago
      My bet is once you're talking enforcement the markets are already concentrating. Maybe something like UBI? I don't have all the answers. Maybe the federal government offers lower tax rates based on how many different states the company has a sizeable portion of its labor force. Ie near zero for being spread out everywhere.
- dmoy 9y ago
  > European countries don’t build their welfare states by heavily taxing the rich Idk according to my swedish coworker, there was a marginal tax rate of 70-80%++ from like 1940-1985 or something.
  - ztjio 9y ago
    In the US it went up to 90% in the early part of that timeframe.
    - AnthonyMouse 9y ago
      It's important to realize that nobody really paid those rates in the US. At the time the rules for what could be claimed as a deduction were so lax that people were making $80,000 or more in deductions against $100,000 in income.
      - retox 9y ago
        I've heard this argument a lot, does anyone have any good sources to confirm it?
  - rayiner 9y ago
    Sweden taxes everyone heavily: https://taxfoundation.org/how-scandinavian-countries-pay-their-government-spending https://taxfoundation.org/how-scandinavian-countries-pay-the.... The top marginal rate kicks in at 1.5 times the average income. Sweden also relies heavily on the 25% VAT, which is disproportionately borne by the lower brackets. Here is a hypothetical calculation of someone making $120k USD who is married with two kids: https://home.kpmg.com/xx/en/home/insights/2011/12/sweden-income-tax.html https://home.kpmg.com/xx/en/home/insights/2011/12/sweden-inc.... Such a person pays roughly 50% in total taxes. In the US it would be roughly 25% (in Maryland).
hueving 9y ago
I don't think you understand the vast gulf between the top 5% and the top 0.1%. If you hit the top 5% hard you are just going to slam tons of small business owners, software engineers, doctors, lawyers, professors, etc.
- flachsechs 9y ago
  yeah, the top 5% includes basically any married professional couple, and any above-average successful individual like a small business owner or lawyer or consultant. they aren't "rich" people, although they likely may be one day.
  - banned1 9y ago
    They aren't rich? Let me get my tiny violin out! It's not about whether they are rich but about whether they produce income that can be taxed to pay for the needs of the poor.
    - flachsechs 9y ago
      i didn't say they deserved your sympathy, you projected that onto me because you have a political agenda. good luck with the taxes thing though.
- banned1 9y ago
  But why would engineers be excluded? Why should a software engineer make $250k+? S/he is just sitting in a chair typing, while the person who cleans the bathroom or make the food in FB' cafeteria gets nothing. Isn't that unfair? I personally recommend that we start in small experimental grounds. The idea of starting in the Bay Area is good because engineers are pushing hard workers into poverty, but they they go around with masks hitting people on the head with sticks just because they speak their minds.
  - imtringued 9y ago
    That's just basic supply and demand and it's not unfair. Jobs where demand exceeds supply are paid more and more until people decide to train/retrain for that job. The unfair part is that the 250k income of the software engineer is increasing demand for housing until it's too expensive for the cleaner although the demand and therefore price are high enough to warrant more housing it's not getting build because of zoning laws.
srj 9y ago
It's not just about getting to "enjoy the spoils". You would be taxing 100% of income, making working at all meaningless. There would be no money to support the household.
oh_sigh 9y ago
Ok, take all that wealth and we would spend it in one year on health care. What do we do year two?
banned1 9y ago
I think the top 5% is not a complete source to pay for healthcare. But I think the top 15% is. Under some assumptions of incremental tax increases across the board, to distribute better and pay for healthcare needs, taxing the 80% at a flat 80% could do the trick.
alexashka 9y ago
I'd imagine it being more helpful to look at military spending and amounts of money big companies are hoarding (looking at you Apple) to see where the real issues lie. As long as people are ok with their money going into a mystery box they have no control over, holding no one accountable, how can we have anything BUT inequality? As long as companies are free to play tax games and suck money out of the economy and then hang on to it for as long as they feel like it - how can we have anything BUT a screwed up volatile economy? People talk about redistributing money as if there's a million rich people wiping their butts with 100$ bills and if only we could teleport that money outta their toilets, into the hands of those in need, we'd solve something. Real solutions to real problems come with infrastructure, accountability, transparency. They start in the mind, then go out into the real world. As long as in your mind it's republican vs democrat, rich vs poor or some other childish false dichotomy, we'll be right where we are, heading for serious social unrest.
- colejohnson66 9y ago
  Doesn’t Apple pay some of the highest tax rates?
  - alexashka 9y ago
    It's not so much about tax rates and I haven't looked into it too deeply - although I'm sure the big companies hire the best accountants to use every loophole in existence. I am referring to this: https://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-record-256-8-billion.html https://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-... Companies should not be allowed to simply hang on to 250 billion dollars. Imagine what could be done in science, infrastructure, services etc if 10% of that money went towards those things. There's a great Peter Thiel clip about this that sums it up very well: https://www.youtube.com/watch?v=2Q26XIKtwXQ https://www.youtube.com/watch?v=2Q26XIKtwXQ
    - colejohnson66 9y ago
      > Conpanies should not be allowed to hang on to 250 billion dollars. Why? They earned it. And have you seen how much Apple donates to charities? Bill Gates at one point had a net worth of over 100 billion dollars before donating a huge sum to charity. If 250 billion is too much, what is a good amount?
eli_gottlieb 9y ago
>Now, of course nobody is realistically suggesting taking all that money. Right, we're suggesting seizing the means of production. Don't redistribute, predistribute!

LiteskinKanye 9y ago

For one year...

rayiner 9y ago

That number just shows why “tax the rich more” isn’t the way to pay for services everyone uses like healthcare. Top 5% isn’t just Bill Gates and Warren Buffet. Bay Area engineers will hit that living alone. So will a couple where e.g. one person is a nurse and another is in IT. It’s a very expansive group. Total spending at all levels of government in the US is almost $7 trillion. So even if you tax the top 5% at 75%, you’re covering 17% of total expenditures. European countries don’t build their welfare states by heavily taxing the rich. In say Germany, an entry level office worker will pay 30%+ of their income in taxes and mandatory insurance.

AnthonyMouse 9y ago
> So even if you tax the top 5% at 75%, you’re covering 17% of total expenditures. And that's assuming a 75% effective rate, which you can't get at the 95th percentile without also charging high effective rates to the majority of people because it's not possible to charge more than a 100% marginal rate on the difference.
ianai 9y ago
So don't tax the rich more. Tax the ways by which the inequalities arise. Create counter forces against market concentration. For instance, if there really were alternatives to desktop Windows and Mac desktops (from the hardware through to software levels) then computers would be more affordable and wide spread. That affordability has an income increasing affect on the customer side.
- paulryanrogers 9y ago
  How would this be enforced?
  - ianai 9y ago
    My bet is once you're talking enforcement the markets are already concentrating. Maybe something like UBI? I don't have all the answers. Maybe the federal government offers lower tax rates based on how many different states the company has a sizeable portion of its labor force. Ie near zero for being spread out everywhere.
dmoy 9y ago
> European countries don’t build their welfare states by heavily taxing the rich Idk according to my swedish coworker, there was a marginal tax rate of 70-80%++ from like 1940-1985 or something.
- ztjio 9y ago
  In the US it went up to 90% in the early part of that timeframe.
  - AnthonyMouse 9y ago
    It's important to realize that nobody really paid those rates in the US. At the time the rules for what could be claimed as a deduction were so lax that people were making $80,000 or more in deductions against $100,000 in income.
    - retox 9y ago
      I've heard this argument a lot, does anyone have any good sources to confirm it?
- rayiner 9y ago
  Sweden taxes everyone heavily: https://taxfoundation.org/how-scandinavian-countries-pay-their-government-spending https://taxfoundation.org/how-scandinavian-countries-pay-the.... The top marginal rate kicks in at 1.5 times the average income. Sweden also relies heavily on the 25% VAT, which is disproportionately borne by the lower brackets. Here is a hypothetical calculation of someone making $120k USD who is married with two kids: https://home.kpmg.com/xx/en/home/insights/2011/12/sweden-income-tax.html https://home.kpmg.com/xx/en/home/insights/2011/12/sweden-inc.... Such a person pays roughly 50% in total taxes. In the US it would be roughly 25% (in Maryland).

hueving 9y ago

I don't think you understand the vast gulf between the top 5% and the top 0.1%. If you hit the top 5% hard you are just going to slam tons of small business owners, software engineers, doctors, lawyers, professors, etc.

flachsechs 9y ago
yeah, the top 5% includes basically any married professional couple, and any above-average successful individual like a small business owner or lawyer or consultant. they aren't "rich" people, although they likely may be one day.
- banned1 9y ago
  They aren't rich? Let me get my tiny violin out! It's not about whether they are rich but about whether they produce income that can be taxed to pay for the needs of the poor.
  - flachsechs 9y ago
    i didn't say they deserved your sympathy, you projected that onto me because you have a political agenda. good luck with the taxes thing though.
banned1 9y ago
But why would engineers be excluded? Why should a software engineer make $250k+? S/he is just sitting in a chair typing, while the person who cleans the bathroom or make the food in FB' cafeteria gets nothing. Isn't that unfair? I personally recommend that we start in small experimental grounds. The idea of starting in the Bay Area is good because engineers are pushing hard workers into poverty, but they they go around with masks hitting people on the head with sticks just because they speak their minds.
- imtringued 9y ago
  That's just basic supply and demand and it's not unfair. Jobs where demand exceeds supply are paid more and more until people decide to train/retrain for that job. The unfair part is that the 250k income of the software engineer is increasing demand for housing until it's too expensive for the cleaner although the demand and therefore price are high enough to warrant more housing it's not getting build because of zoning laws.

srj 9y ago

It's not just about getting to "enjoy the spoils". You would be taxing 100% of income, making working at all meaningless. There would be no money to support the household.

oh_sigh 9y ago

Ok, take all that wealth and we would spend it in one year on health care. What do we do year two?

banned1 9y ago

I think the top 5% is not a complete source to pay for healthcare. But I think the top 15% is. Under some assumptions of incremental tax increases across the board, to distribute better and pay for healthcare needs, taxing the 80% at a flat 80% could do the trick.

alexashka 9y ago

I'd imagine it being more helpful to look at military spending and amounts of money big companies are hoarding (looking at you Apple) to see where the real issues lie. As long as people are ok with their money going into a mystery box they have no control over, holding no one accountable, how can we have anything BUT inequality? As long as companies are free to play tax games and suck money out of the economy and then hang on to it for as long as they feel like it - how can we have anything BUT a screwed up volatile economy? People talk about redistributing money as if there's a million rich people wiping their butts with 100$ bills and if only we could teleport that money outta their toilets, into the hands of those in need, we'd solve something. Real solutions to real problems come with infrastructure, accountability, transparency. They start in the mind, then go out into the real world. As long as in your mind it's republican vs democrat, rich vs poor or some other childish false dichotomy, we'll be right where we are, heading for serious social unrest.

colejohnson66 9y ago
Doesn’t Apple pay some of the highest tax rates?
- alexashka 9y ago
  It's not so much about tax rates and I haven't looked into it too deeply - although I'm sure the big companies hire the best accountants to use every loophole in existence. I am referring to this: https://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-record-256-8-billion.html https://www.cnbc.com/2017/05/02/apples-cash-hoard-swells-to-... Companies should not be allowed to simply hang on to 250 billion dollars. Imagine what could be done in science, infrastructure, services etc if 10% of that money went towards those things. There's a great Peter Thiel clip about this that sums it up very well: https://www.youtube.com/watch?v=2Q26XIKtwXQ https://www.youtube.com/watch?v=2Q26XIKtwXQ
  - colejohnson66 9y ago
    > Conpanies should not be allowed to hang on to 250 billion dollars. Why? They earned it. And have you seen how much Apple donates to charities? Bill Gates at one point had a net worth of over 100 billion dollars before donating a huge sum to charity. If 250 billion is too much, what is a good amount?

eli_gottlieb 9y ago

>Now, of course nobody is realistically suggesting taking all that money. Right, we're suggesting seizing the means of production. Don't redistribute, predistribute!