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This isn't going to do much but hurt professionals like doctors, lawyers, software developers, traders, small business, etc who work for income. The truly weal

This isn't going to do much but hurt professionals like doctors, lawyers, software developers, traders, small business, etc who work for income. The truly wealthy people do not gain their wealth through income. They get it through capital gains ( stocks, homes, asset value increases ). Capital gains ( long term ) are taxed at 20%.

dudul 8y ago
Wait, software developers make $10 millions a year?
- porpoisely 8y ago
  No. The current top bracket is a few hundred thousand. https://www.bankrate.com/finance/taxes/tax-brackets.aspx https://www.bankrate.com/finance/taxes/tax-brackets.aspx Edit: To the people downvoting, I'm well aware that the current bracket won't be taxed at 70%. But there is a lot of room between $500K and $10 million. And I have feeling that there will be many brackets between the current top bracket and the new one.
  - ceejayoz 8y ago
    The polling is not about raising the current highest tax bracket to 70%, it's about adding a new one. From the article: > The New York Democrat kicked off a debate within her party in a Jan. 6 interview with "60 Minutes" during which she said she would support setting the highest tax, which she said would kick in at individuals 10 millionth dollar of income, at 70 percent.
  - stouset 8y ago
    Nobody I’m aware of is suggesting we tax the current top bracket at 70%, but that we make a new top bracket.
    - jedmeyers 8y ago
      There is already a thing called AMT so a new top bracket makes zero sense.
      - ceejayoz 8y ago
        The AMT's top rate is 28%, a far cry from the proposed new 70% bracket.
  - deleted 8y ago
    [deleted]
  - dwiel 8y ago
    It is unfortunate that the poll asked about changing the highest tax bracket, whereas Ocasio-Cortez suggested creating a new $10m tax bracket. They are very different things. Edit: I stand corrected. The picture in the article doesn't mention the new $10m tax bracket, but the actual poll question did.
    - dudul 8y ago
      That was the question. Scroll down and you'll see the details of the poll. The question was about taxing past $10M/year income.
    - detaro 8y ago
      From the embedded results table at the bottom of the article: > "AB2: Currently the top tax rate is 37%. Would you favor or oppose a tax proposal that would apply a 70% rate to the 10 millionth dollar and beyond for individuals making $10 million a year or more in reportable income?"
  - dudul 8y ago
    The question used in this poll seems to be "Do you favor a 70% tax rate to the 10th million dollar and above?"
  - dragonwriter 8y ago
    > And I have feeling that there will be many brackets between the current top bracket and the new one. So, you are arguing against your feeling, and not the actual proposal at issue?
xiphias2 8y ago
I'm not worried about software developers at all: taxation was already one of the main reason I didn't move to US from Switzerland (Swiss pension system is also amazing). I guess this would just mean even more innovators moving to Switzerland.
ceejayoz 8y ago
I'd consider someone with $10M annual income to be fairly solidly in "truly wealthy" category, assuming they're not being stupid with it.
bronco21016 8y ago
I find it hard to believe that any of the professionals you list make $10 million in taxable income. There are a few outliers but to act like all lawyers and doctors would be poor from a 70% rate over $10 million is just wrong. Your sentiment that the truly rich make their money outside of a typical paycheck is correct though. It’s a balancing act of how do we tax people who have accumulated so much wealth in capital vs taxing capital so much that people don’t invest in it. I don’t pretend to have the answer there but spreading disinformation that professional working people would be hurt by a 70% rate on every $1 over $10 million is pretty irresponsible.
- porpoisely 8y ago
  Please, stop using talking points like "disinformation". So sick of it. The point is that if you create a new tax bracket that is $10 million, there will be many new tax brackets between $10 million and the current top tax bracket of $500K. It is extremely naive to believe that creating such a high tax bracket will be a one off and it's extremely naive to believe creating such a high tax rate won't drag the lower ones a tad bit higher. Just like lowering the highest tax bracket and tax rate lowered the tax brackets and tax rates below it. Creating a new highest tax bracket will do the opposite. But then again, it's my opinion not "disinformation".
  - colonelxc 8y ago
    Why couldn't just a new tax bracket at 10mil be added? No need to stretch or modify any others.
    - felipellrocha 8y ago
      Seriously. These are things that are defined. There is really nothing stopping us from saying "Ok. Up to 500k is unmodified. Here is the curve that will be created above that level".
  - ryanmonroe 8y ago
    When you say "This isn't going to do much but ..." in response to an article about a specific policy proposal, and don't say what you mean by "this", the common-sense interpretation is that you're referring to the policy proposal in the article, not some other policy you think is likely to be enacted as a result.
UncleMeat 8y ago
Great. Increase that too. Not many devs are making 1m+ salaries.
BeeOnRope 8y ago
The top rate would apply to annual income of $10,000,000 and above. Maybe you know something I don't, but at least of the people I know there aren't many doctors, lawyers, software developers, etc hitting those numbers. The super rich make about half their income via capital gains, and the rest via various forms of income such as dividends, business income, etc. So such a change would certain impact at least a reasonable portion of their income. It does raise the question of whether a flat rate for capital gains makes sense.
marssaxman 8y ago
How many doctors, lawyers, software developers, traders, and other small business people do you know who work for incomes which are substantially greater than $10 million per year? We're not talking about 1%-ers here, nor even all of the 0.1%-ers; the people who would be affected by the proposed top marginal tax rate at all are an extremely elite group. This article claims there were about 16,000 people who earned $10 million or more in 2016: https://www.fool.com/investing/2019/01/09/who-would-pay-a-70-tax-rate-on-income-over-10-mill.aspx https://www.fool.com/investing/2019/01/09/who-would-pay-a-70...
dragonwriter 8y ago
> The truly wealthy people do not gain their wealth through income. Yes, they do. Gaining wealth is income. (It may be income that is subject to favorable tax treatment, but it's still income.) > They get it through capital gains ( stocks, homes, asset value increases ). Capital gains ( long term ) are taxed at 20%. You can add a new top bracket and tax long-term capital gains as normal income at the same time. Though if you do the latter, you should also: (1) Allow recognizing expected income for tax purposes in advance of realizing them, and also allow deferring large windfalls over a period of years, and (2) Inflation-correct asset basis values and balances of anticipated income on which tax has been prepaid.
tivert 8y ago
> The truly wealthy people do not gain their wealth through income. They get it through capital gains ( stocks, homes, asset value increases ). Capital gains ( long term ) are taxed at 20%. That just means that the capital gains tax needs to be made progressive like income tax to cover those people. If we're reforming income tax, there's no reason to not reform the capital gains tax at the same time.
chipotle_coyote 8y ago
What we're talking about here is Ocasio-Cortez's suggestion for a 70% marginal tax rate on income over $10M, right? Because this would be a new tax bracket, it would only apply to the money you earn over $10M. So first: how many doctors, lawyers, software developers, traders, small businesspeople, or etc. make over $10M in income? (You wrote "small business," but to be clear, we're not talking about business tax rates, we're talking about personal income.) In 2016, less than 20,000 IRS returns showed combined adjusted gross incomes of $10M or over. (That includes married couples pooling their income.) So for the incredibly vast majority of taxpayers, adding another tax bracket higher than the ones established now would have no effect at all. Period. Given that the top tax bracket in 2019 doesn't kick in until an AGI of $510K (or $612K for married), what are we talking about? Say, a new 50% tax bracket that starts at 5M and a 70% one that starts at 10M? How many people would truly be affected by this? Far under a million. Quite likely well under 200K. My mother had a financial adviser years ago who half-joked that his life goal was to pay personal income taxes of $1M a year. That gets at an essential truth that people who think that this tax would "hurt" people seem to miss. If I was in a position where a 70% marginal tax rate on income over $10M a year had any material effect on me whatsoever, it's not an exaggeration to say that I'd be too rich to care.

dudul 8y ago

Wait, software developers make $10 millions a year?

porpoisely 8y ago
No. The current top bracket is a few hundred thousand. https://www.bankrate.com/finance/taxes/tax-brackets.aspx https://www.bankrate.com/finance/taxes/tax-brackets.aspx Edit: To the people downvoting, I'm well aware that the current bracket won't be taxed at 70%. But there is a lot of room between $500K and $10 million. And I have feeling that there will be many brackets between the current top bracket and the new one.
- ceejayoz 8y ago
  The polling is not about raising the current highest tax bracket to 70%, it's about adding a new one. From the article: > The New York Democrat kicked off a debate within her party in a Jan. 6 interview with "60 Minutes" during which she said she would support setting the highest tax, which she said would kick in at individuals 10 millionth dollar of income, at 70 percent.
- stouset 8y ago
  Nobody I’m aware of is suggesting we tax the current top bracket at 70%, but that we make a new top bracket.
  - jedmeyers 8y ago
    There is already a thing called AMT so a new top bracket makes zero sense.
    - ceejayoz 8y ago
      The AMT's top rate is 28%, a far cry from the proposed new 70% bracket.
- deleted 8y ago
  [deleted]
- dwiel 8y ago
  It is unfortunate that the poll asked about changing the highest tax bracket, whereas Ocasio-Cortez suggested creating a new $10m tax bracket. They are very different things. Edit: I stand corrected. The picture in the article doesn't mention the new $10m tax bracket, but the actual poll question did.
  - dudul 8y ago
    That was the question. Scroll down and you'll see the details of the poll. The question was about taxing past $10M/year income.
  - detaro 8y ago
    From the embedded results table at the bottom of the article: > "AB2: Currently the top tax rate is 37%. Would you favor or oppose a tax proposal that would apply a 70% rate to the 10 millionth dollar and beyond for individuals making $10 million a year or more in reportable income?"
- dudul 8y ago
  The question used in this poll seems to be "Do you favor a 70% tax rate to the 10th million dollar and above?"
- dragonwriter 8y ago
  > And I have feeling that there will be many brackets between the current top bracket and the new one. So, you are arguing against your feeling, and not the actual proposal at issue?

xiphias2 8y ago

I'm not worried about software developers at all: taxation was already one of the main reason I didn't move to US from Switzerland (Swiss pension system is also amazing). I guess this would just mean even more innovators moving to Switzerland.

ceejayoz 8y ago

I'd consider someone with $10M annual income to be fairly solidly in "truly wealthy" category, assuming they're not being stupid with it.

bronco21016 8y ago

I find it hard to believe that any of the professionals you list make $10 million in taxable income. There are a few outliers but to act like all lawyers and doctors would be poor from a 70% rate over $10 million is just wrong. Your sentiment that the truly rich make their money outside of a typical paycheck is correct though. It’s a balancing act of how do we tax people who have accumulated so much wealth in capital vs taxing capital so much that people don’t invest in it. I don’t pretend to have the answer there but spreading disinformation that professional working people would be hurt by a 70% rate on every $1 over $10 million is pretty irresponsible.

porpoisely 8y ago
Please, stop using talking points like "disinformation". So sick of it. The point is that if you create a new tax bracket that is $10 million, there will be many new tax brackets between $10 million and the current top tax bracket of $500K. It is extremely naive to believe that creating such a high tax bracket will be a one off and it's extremely naive to believe creating such a high tax rate won't drag the lower ones a tad bit higher. Just like lowering the highest tax bracket and tax rate lowered the tax brackets and tax rates below it. Creating a new highest tax bracket will do the opposite. But then again, it's my opinion not "disinformation".
- colonelxc 8y ago
  Why couldn't just a new tax bracket at 10mil be added? No need to stretch or modify any others.
  - felipellrocha 8y ago
    Seriously. These are things that are defined. There is really nothing stopping us from saying "Ok. Up to 500k is unmodified. Here is the curve that will be created above that level".
- ryanmonroe 8y ago
  When you say "This isn't going to do much but ..." in response to an article about a specific policy proposal, and don't say what you mean by "this", the common-sense interpretation is that you're referring to the policy proposal in the article, not some other policy you think is likely to be enacted as a result.

UncleMeat 8y ago

Great. Increase that too. Not many devs are making 1m+ salaries.

BeeOnRope 8y ago

The top rate would apply to annual income of $10,000,000 and above. Maybe you know something I don't, but at least of the people I know there aren't many doctors, lawyers, software developers, etc hitting those numbers. The super rich make about half their income via capital gains, and the rest via various forms of income such as dividends, business income, etc. So such a change would certain impact at least a reasonable portion of their income. It does raise the question of whether a flat rate for capital gains makes sense.

marssaxman 8y ago

How many doctors, lawyers, software developers, traders, and other small business people do you know who work for incomes which are substantially greater than $10 million per year? We're not talking about 1%-ers here, nor even all of the 0.1%-ers; the people who would be affected by the proposed top marginal tax rate at all are an extremely elite group. This article claims there were about 16,000 people who earned $10 million or more in 2016: https://www.fool.com/investing/2019/01/09/who-would-pay-a-70-tax-rate-on-income-over-10-mill.aspx https://www.fool.com/investing/2019/01/09/who-would-pay-a-70...

dragonwriter 8y ago

> The truly wealthy people do not gain their wealth through income. Yes, they do. Gaining wealth is income. (It may be income that is subject to favorable tax treatment, but it's still income.) > They get it through capital gains ( stocks, homes, asset value increases ). Capital gains ( long term ) are taxed at 20%. You can add a new top bracket and tax long-term capital gains as normal income at the same time. Though if you do the latter, you should also: (1) Allow recognizing expected income for tax purposes in advance of realizing them, and also allow deferring large windfalls over a period of years, and (2) Inflation-correct asset basis values and balances of anticipated income on which tax has been prepaid.

tivert 8y ago

> The truly wealthy people do not gain their wealth through income. They get it through capital gains ( stocks, homes, asset value increases ). Capital gains ( long term ) are taxed at 20%. That just means that the capital gains tax needs to be made progressive like income tax to cover those people. If we're reforming income tax, there's no reason to not reform the capital gains tax at the same time.

chipotle_coyote 8y ago

What we're talking about here is Ocasio-Cortez's suggestion for a 70% marginal tax rate on income over $10M, right? Because this would be a new tax bracket, it would only apply to the money you earn over $10M. So first: how many doctors, lawyers, software developers, traders, small businesspeople, or etc. make over $10M in income? (You wrote "small business," but to be clear, we're not talking about business tax rates, we're talking about personal income.) In 2016, less than 20,000 IRS returns showed combined adjusted gross incomes of $10M or over. (That includes married couples pooling their income.) So for the incredibly vast majority of taxpayers, adding another tax bracket higher than the ones established now would have no effect at all. Period. Given that the top tax bracket in 2019 doesn't kick in until an AGI of $510K (or $612K for married), what are we talking about? Say, a new 50% tax bracket that starts at 5M and a 70% one that starts at 10M? How many people would truly be affected by this? Far under a million. Quite likely well under 200K. My mother had a financial adviser years ago who half-joked that his life goal was to pay personal income taxes of $1M a year. That gets at an essential truth that people who think that this tax would "hurt" people seem to miss. If I was in a position where a 70% marginal tax rate on income over $10M a year had any material effect on me whatsoever, it's not an exaggeration to say that I'd be too rich to care.