11 ms·

Alexandria Ocasio-Cortez Wants to Raise Taxes on the Rich and Americans Agree

81 points by iron0013 8y ago

dragonbonheur 8y ago
From https://investinganswers.com/ https://investinganswers.com/ -- The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify. In essence, the marginal tax rate is the percentage taken from your next dollar of taxable income above a pre-defined income threshold. The marginal tax rate includes federal, state and local income taxes, as well as federal payroll and self-employment taxes. This differs from the average tax rate, which is the total tax paid as a percentage of total income earned.
deleted 8y ago
[deleted]
Chikodi 8y ago
Hard to identify with people who find this controversial
- claydavisss 8y ago
  You might find it more challenging when they will eventually consider you "rich". There's no way there's enough money in the top 1% to fund the programs and plans she wants. The only way will be through the upper middle class. YOU.
  - geofft 8y ago
    Are there many people who support this policy and don't support it for themselves, should they be upper-middle-class? I personally support a 70% marginal tax on all income over $100,000, and I make well over that. In particular the primary reason I support this is that the primary reason I want more than $100K income is competing in housing markets like SFBA and NYC. If everyone making over $100K is taxed heavily past that point, then the people competing for the same housing are on the same playing field as I am - if anything, I'm more competitive with people who make more than I do - and it also makes income equality better in general. (I don't actually care if the money goes to the government; you may as well burn it. The effect I'm interested in is changing post-tax incomes, not getting more revenue for the government)
    - pascalxus 8y ago
      are you just trolling for responses? well you got me. You can't possibly believe that 70% marginal on > 100k is anywhere near reasonable. Here in CA, that means, you're income taxes would be 83% plus medicare and social sec urity which is +8%, and let's not forget the company pays another 7% of your salary on top of that (you don't ever see that 7% - that's the part they pay), and that's not even counting all the other taxes you pay after that. at that point, everyone would have to quit their jobs. to say that it would ruin the economy is the biggest understatement of a lifetime.
      - anth_anm 8y ago
        They wouldn't be 83%, because it's a marginal rate.
        pascalxus 8y ago
        it's more than 83% when you take into account all the other taxes: there's not just federal and state income taxes, please take a look at your pay stub, there's a lot of other stuff on there.
        geofft 8y ago
        Please take a look at your 1040. My comment was about marginal rate. I would like the portion of my income above $100K to be taxed at 83%, and my income below $100K to be left alone. I would not like all of my income to be taxed at 83%.
      - geofft 8y ago
        Yes, and I live in NY which would also make marginal income over $100K have extremely diminishing returns. I do not understand your argument that everyone would have to quit their jobs. They just wouldn't fight for raises once they made it to $100K. I started my career making $95K out of college. I can't say I'm more than $5K/year happier now. I just spend more to keep up with everyone else, mostly on housing.
  - mempko 8y ago
    It's not about getting money to fund programs. It's a way to reduce inequality. The programs will be funded by deficit spending like all programs are.
    - AnimalMuppet 8y ago
      She initially proposed it as a way to pay for a particular program.
  - jonahhorowitz 8y ago
    The slippery slope is a terrible counterargument.
    - natalyarostova 8y ago
      A slippery slope isn't a good or bad argument on its own. It's just the mapping of a physical model of reality to data. Whether it's a good argument or not depends on its fit! In some cases it's a very strong model. For example, free speech seems to work best historically when there are enshrined rules that are never infringed. Obviously the fit is not perfect (e.g. yelling 'fire' in a theater), but it's a pretty strong fit. On the other hand, the model appears to fit pretty poorly for gay marriage, where they posit if you move from traditionalism, before you know it, people will be marrying dogs.
    - AnimalMuppet 8y ago
      My family has slipped on that exact slope. Before (IIRC) Reagan, the point at which different marginal tax rates apply wasn't adjusted for inflation for decades, perhaps ever. The result was exactly that middle class families (including mine) paid tax rates that were originally intended only for the rich.
  - iron0013 8y ago
    I think you might be surprised how much money is in the top 1%, and would probably find mind-blowing the amount of money in the top .01%
    - drc37 8y ago
      But why do you feel it is your right or the right of the government to take it from them? Because they happen to be more successful than you? I have never understood the logic of taking from the rich because they are rich. That always sparks the idea of true laziness in the person saying this.
      - iron0013 8y ago
        That's kind of a weirdly confrontational tone to take. If you already believe that "taxes are theft", then nothing I or anyone else can say will change your mind. However, the fact is that you made your money in one of the most money-making-amenable contexts in the history of this planet, and that's not an accident, and it's not a coincidence. This nation has been investing in itself--and investing in you--since long before either of us were born, in order to provide the societal context that allowed you to exercise the full extent of your god-given abilities in order to make your fortune. That's why you didn't die of cholera when you were 3, it's why you didn't join the job market as a barefoot and illiterate 12-year-old, it's why you can commute to work each day secure in the knowledge that some dude isn't going to pull up in a Toyota Hilux, jack your Beemer and sell you into slavery. To be a rich person in the United States and think "I made all this money, all by myself, because I'm some kind of genius Randian super-guy" is the pinnacle of deluded, parasitical vanity.
        hirundo 8y ago
        First sentence: > That's kind of a weirdly confrontational tone to take. Last sentence: > To be a rich person in the United States and think "I made all this money, all by myself, because I'm some kind of genius Randian super-guy" is the pinnacle of deluded, parasitical vanity. You see that as non confrontational?
- Rooster61 8y ago
  Hard to identify with people who find this to be beyond controversy. Is it that far out of the realm of reality that someone might disagree with this approach?
  - anth_anm 8y ago
    If they aren't rich? Yeah.
    - Rooster61 8y ago
      That's a vacuous, disingenuous argument that implies that anyone who is not rich and disagrees with this type of tax is objectively wrong. This is absurd and detrimental to constructive discourse.
- BeetleB 8y ago
  I think the real issue is it's easy to find people who like high taxes, as long as it's applied only to people much richer than they are. It comes off as a lot more sincere if people advocate for an increase on their own tax burden. The amount of revenue this will raise is rather low, compared to increasing the tax on, say, the middle class. You'll gain a lot, lot more if you revert the recent tax reduction on the middle class. I just looked at my numbers, and I thought my taxes wouldn't be impacted (high state income tax and real estate tax that can no longer be deducted). But even I saved quite a bit with the recent tax cuts. I obviously don't have a problem taxing people who make over $10M. But if I had to choose, I would instead revert the current tax cuts, even thought that would raise my tax burden.
- ProAm 8y ago
  Im opposed to providing the government more money when they cannot prove they successfully handle the tax revenue they already receive. I'd much rather see loopholes closed vs punishing people who are successful. I do not believe congress has my best interests in mind when they simply ask for more money instead of addressing their current situation.
- natalyarostova 8y ago
  Usually when it's hard to identify with someone, even if you still strongly disagree, it may mean you're not familiar with and giving a charitable reading to their best arguments from their most virtuous members. https://marginalrevolution.com/marginalrevolution/2019/01/taxes.html https://marginalrevolution.com/marginalrevolution/2019/01/ta...
- alasdair_ 8y ago
  The specifics matter. Ignore the time value of money for a moment and imagine you work for minimum wage for thirty years, building a business, then sell it and get ten million dollars for a single year, hoping to fund your retirement and pay for college etc. Compare that to getting $333K/year for thirty years - the taxes paid would be considerably different. Personally, I think that we need to look at taxes and earnings over a whole lifetime rather than on an arbitrary yearly basis.
gnicholas 8y ago
> It’s perhaps not surprising that Americans would support higher taxes on top earners given that tax rates on high income brackets were once much higher than they are today. The nominal rates were much higher once, but the effective rates were never that high. Before the '86 tax reform, there were many "investments" available to wealthy people that entailed zero risk but yielded guaranteed tax benefits — we now rightly call these "tax shelters". We should shed no tears that they are gone today, but we should also remember that the economic effects we saw previously were based on the effective tax rates (factoring in the sheltering activity), not the nominal rates. Now that these passive tax shelters are not available, the effective rates would be much closer to the nominal rates. Also, as a tax-lawyer-turned-startup-founder, I can guarantee that if we saw rates like this again, the biggest beneficiaries would be the lawyers and accountants who would restructure contracts to avoid these taxes.
- bryanlarsen 8y ago
  This is a very common argument, but aren't the rich already doing as much as possible to avoid the 39.6% rate?
  - blantonl 8y ago
    Yes, Defined Benefit Pension Plans, 401K profit sharing, etc. There are an enormous amount of vehicles to use to legally lower your effective tax rate for wealthy individuals - especially small business owners.
  - larrywright 8y ago
    This is my complaint too. People rant about the rich “paying their fair share”, but the problem here isn’t the tax rate applied to the rich, it’s that they don’t pay anywhere near it.
    - gnicholas 8y ago
      > People rant about the rich “paying their fair share”, but the problem here isn’t the tax rate applied to the rich, it’s that they don’t pay anywhere near it. Yes, but the rich nonetheless pay the lion's share of income taxes: The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent. from https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/ https://taxfoundation.org/summary-latest-federal-income-tax-...
rayiner 8y ago
Matt Yglesias’s podcast has a great segment in this. One point they make that isn’t mentioned in the article is that it wouldn’t raise all that much money, certainly not enough to fund broad social programs. Not enough people make more than $10 million a year to raise that much money from higher marginal rates. Its’s really more about punishing billionaires than raising money for social programs. https://art19.com/shows/the-weeds https://art19.com/shows/the-weeds
- village-idiot 8y ago
  There is a strong argument to be made for the usage of taxation to purposefully break up extreme fortunes, especially self sustaining ones. Although for that usage, the wealth tax and estate tax would be much more effective, even if politically heavy lifts.
  - NegativeK 8y ago
    Piketty's Capital in the Twenty-First Century essentially argues this, but more from a perspective of forcing investment back into the market to stay ahead of tax and inflation losses.
    - tptacek 8y ago
      Doesn't Piketty advocate for a wealth tax, not simply high income tax rates? Wealth taxes target accumulated fortunes, not earned income.
      - village-idiot 8y ago
        I'm not sure about Piketty per se, but I know that estate taxes are a common trick to break up self sustaining fortunes. The basic theory being that it might be ok for someone to amass quite a bit of wealth during their lifetime from their own labor, but it's not ok for their progeny to be permanently wealthy because of who their parents happened to be.
      - mushufasa 8y ago
iscrewyou 8y ago
This has been done before and it works. Taxes need a correction. But it’s hard to explain to the public or the ones who are against this because they listen to certain opinions. They need to have a simple message. Like three bullet points that anyone can read and get a message. No percentage comparisons between social classes, no comparison between old and new tax rates. None of that. Public tunes right out. E.g. (1) If you make over x in a year, you’ll be taxed at the new 70% rate, (2) if you make less than x, your taxes won’t change, (3) that’s it!!
- geofft 8y ago
  This is insufficient because a) point 1 is inaccurate, if you make over x in a year the portion over x is taxed at the new 70% rate, and this is already a point of confusion (perhaps intentional confusion) b) people who understand that worry they personally will be over x, so they don't care about 2 c) people who understand both a and c worry that the systemic effects of raising taxes on the rich is to lower job creation or to make America not-great again or something, so they're less interested in bullet points about the actual change than understanding how it affects the economy.
- smacktoward 8y ago
  > They need to have a simple message. It's hard to imagine a simpler message than "people who make more than $10 million a year should pay more taxes."
  - briandear 8y ago
    Except the top 1% of taxpayers accounted for more income taxes paid than the bottom 90% combined. The top 1% pay almost 40% of all income taxes.
    - millstone 8y ago
      $10 million is in the top .01%, who pay a lower rate than the top 1%.
avar 8y ago
Whatever anyone thinks about this policy proposal, most articles on this are really shallow, and e.g. don't mention: 1) That the French backed out of a similar tax recently[1]. Not discussing another major economy's recent experiment with this (well, 75% not 70%) seems strange. 2) The lack of discussion about how those subject to this tax might restructure their assets to avoid it. If you earn more than $10 million/yr you can hire a team of accountants to restructure things for you, has anyone speculated as to how the tax code will stand up to that if only this single variable is changed? 1. https://www.theguardian.com/world/2014/dec/31/france-drops-75percent-supertax https://www.theguardian.com/world/2014/dec/31/france-drops-7...
AimForTheBushes 8y ago
I think raising taxes is a good idea but arbitrarily making up the number is not. The idea that this would cover some 'Green Deal' ignores the 800 lbs gorilla in the room- a trillion dollar deficit year after year. We really need to figure out how to make the government more efficient and work in the allotted funding for it. Every politician wants to spend a whole bunch of money trying to push their agenda but it's always on credit.
- mempko 8y ago
  Trillion dollar deficit means there are a trillion dollars extra floating around in the private sector. Trillion dollars more in people's bank accounts. If there was no deficit spending, there would not be money floating around in circulation that isn't debt issued bank notes.
  - zozbot123 8y ago
    Exactly. And all this money sloshing around is what leads to inflation, so the central bank has to make up for it by doing things like "tapering" QE, raising interest rates, and generally crashing the economy.
  - AimForTheBushes 8y ago
    Once the deficit eclipses the total GDP it won't matter if there is extra money floating around because inflation will spiral.
    - millstone 8y ago
      Did you mean debt? The deficit is nowhere close to GDP. Japan has a much higher debt to GDP ratio than the US, and inflation of <1%.
- chefkoch 8y ago
  >ignores the 800 lbs gorilla in the room the defense budget?
cpr 8y ago
Looked at from a higher level: https://moneymaven.io/mishtalk/economics/progressive-lies-like-free-college-and-medicare-for-all-hide-cost-of-debt-0vidqfvLIEK3kpaUPdycFA/ https://moneymaven.io/mishtalk/economics/progressive-lies-li...
- millstone 8y ago
  How does that apply? AOC's proposal to raise taxes on the rich would not increase the debt.
Rooster61 8y ago
What frustrates me about income taxes (and really taxes in general) is that proponents often automatically presume that a larger amount of money flowing into the government is a wholly beneficial effect. I trust current US government officials to effectively use my tax dollars about as far as I can throw it. Entirely too much money is squandered on things that do no benefit whatsoever to those who pay into it, rich or poor. It's a deal-breaker for me, without even going into the problem of tax evasion available to the obscenely rich.
- UncleMeat 8y ago
  Proponents don't automatically presume this. It isn't axiomatic. We just look at the data and disagree with your assessment. Yes, there is a tremendous amount of inefficiency in the entire process. Some people look at this and think that taxes are therefore not a good plan. Other people look at this and think that despite the inefficiency taxes solve such an important need that it is worth it. The other problem with this sort of argument is that it works at literally every tax level. If federal income tax rates were 1% then your argument would work just as well at discouraging any tax hike. There is clearly an inflection point but it is worth examining where that point is.
  - Rooster61 8y ago
    > Proponents don't automatically presume this I respectfully disagree. Dogmatic clinging to political and economic ideals is rampant in society. People do this all the time. That doesn't apply to EVERYONE who holds the opposed opinion, though. Nor was it my intention to imply that. > Yes, there is a tremendous amount of inefficiency in the entire process. It's not just a matter of inefficiency. Inefficiency is intrinsic to any economic system as large and complex as that of the US, and that's to be expected. What isn't to be expected, or at least condoned, is the ACTIVE measures taken by those in office/places of power to squander money that is not naturally misappropriated by that complexity. Our current political/economic client is rife with this. > The other problem with this sort of argument is that it works at literally every tax level. The fact that an argument is right at every level isn't a problem, nor does it make it invalid. I'm of the opinion that no tax is going to be truly utilized correctly until the underlying problem of corruption is fixed. And please don't take my tone as accusatory. I do appreciate people taking a critical look at an issue and still coming up with the opposite of my stance.
effnorwood 8y ago
This has what to do with technology?
- Rooster61 8y ago
  https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html "On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups" I'm a hacker, and I find tax implementation to be a complex, interesting problem worthy of discussion.
lambdasquirrel 8y ago
Why the focus on income as opposed to capital gains? It's always struck me that only the very-very rich count on investment income.
- gnicholas 8y ago
  Income includes capital gains. No one has given enough detail on how this particular tax would be implemented, but surely it would capture both (and therefore be an even bigger tax increase on LTCG).
- RickJWagner 8y ago
  I don't like the idea of taxing capital gains. Buy-and-hold (and eventually sell) is one of the few paths to financial independence that are available to the common wage-earner. Many people have adapted the strategies suggested by Buffet, Bogle, etc. Many have succeeded. Don't kill one of the few publicly availble golden geese, please.
  - dorchadas 8y ago
    I wouldn't say it's available to the "common wage-earner", given that they live paycheck to paycheck.
larrywright 8y ago
Controversial, but I’ll say it anyway: the fairest tax is a flat tax. Take, say, 15% across the board for anyone making above a threshold. Then combine that with eliminating most if not all of the current tax deductions, so that everyone actually pays the amount they should. Someone who makes $100k/year pays $15k in taxes. Someone who makes $1M/year pays $150k. That’s fair. I’m certainly not the first to propose this, and I seem to recall that Intuit and others (H&R Block likely) lobbied hard against any attempt to simplify the tax code, as their services wouldn’t be needed any more.
- spullara 8y ago
  The reason 17% is so often raised as the right flat tax is that it has been the effective tax rate since the 1950s. https://cdn.theatlantic.com/static/mt/assets/business/marginal%20rate%20revenue%20graph.png https://cdn.theatlantic.com/static/mt/assets/business/margin...
  - larrywright 8y ago
    Thanks for that link - I didn’t realize that was the case. I remember 15% as the number that Malcom Forbes proposed when he ran for president in the ‘90s.
    - spullara 8y ago
      That was one of the references for 17% I was talking about: https://en.wikipedia.org/wiki/Steve_Forbes#Campaigns_for_president_and_major_issues https://en.wikipedia.org/wiki/Steve_Forbes#Campaigns_for_pre...
  - harryh 8y ago
    A flat tax of 17% on incomes would not net the government 17% of GDP. The flat tax would have to be much higher (close to 2x) to achieve that same income.
    - spullara 8y ago
briandear 8y ago
Milton Friedman (who is a few steps above AOC when it comes to economic policy knowledge): "All things considered, the personal income tax structure that seems to me best is a flat-rate tax on income above an exemption... I would combine this program with the abolition of the corporate income tax, and with the requirement that corporations be required to attribute their income to stockholders, and that stockholders be required to include such sums on their tax returns. The most important other desirable changes are the elimination of percentage depletion on oil and other raw materials, the elimination of tax exemption of interest on state and local securities, the elimination of special treatment of capital gains, the coordination of income, estate, and gift taxes, and the elimination of numerous deductions now allowed." However, this won't happen because those on the left and the right (i.e. "politicians") use the tax code as a means for punishing and rewarding to garner favor with contributors to their political campaigns. Here's Friedman speaking on that: https://youtu.be/TruCIPy79w8?t=13 https://youtu.be/TruCIPy79w8?t=13
- millstone 8y ago
  Huh? Many prominent economists support progressive income taxes. Heck even Adam Smith.
- geofft 8y ago
  > Milton Friedman (who is a few steps above AOC when it comes to economic policy knowledge): AOC has a degree from Boston University in economics. Friedman was a professional economist, of course, but as in any field there are lots of professional researchers with strong opinions in lots of directions, and we still listen to the folks with bachelor's degrees. You can find many computer scientists with many opinions on programming languages, but you wouldn't ignore people who got a bachelor's in CS simply because the professional researchers exist. (Otherwise we'd just shut down this site and read journals all day.)
  - masonic 8y ago
    AOC has a degree from Boston University in economics. Wikipedia says "International Relations and Economics", which is not the same as graduating as an Economics major.
peterwwillis 8y ago
raises hand Uh, I know where we can find money before we start adding more taxes. China, Russia, Saudi Arabia, India, France, United Kingdom, and Japan, combined, spend less on their military than we do. I get that she's a politician and all politicians have to play to their base, but can we not all agree, in any political arena, that the 674 Billion dollars spent on the military (over half of federal discretionary spending) is perhaps too high? I mean, what the actual fuck? How can anyone justify this? We're not even fighting any real wars, our Navy is in fucking shambles, our brand new fighter planes are a joke, and we're soon going to hire more contractors than actual soldiers. Just replace heating oil with $100 bills from the military industrial complex's pockets, it'll do more good for us.
- jki275 8y ago
  DOD is 27% of the US budget. Using the "discretionary spending" trick is being disingenuous. Let's fix SSDI and other entitlement abuse spending first. And the Navy needs more ships, but it's not "in shambles", and the JSF is the best aircraft that's ever been built, even if it did cost too much and take too long to get to IOC.
plainOldText 8y ago
So many politicians confidently propose solutions to complex systems such as the economy, yet some do not even understand basic things, such as the three branches of the government. [1] I saw recently on Paul Graham's twitter feed a paper that made the case for a 29% tax rate. From the paper: "the rate that incorporates innovation and maximizes a utilitarian social welfare function is just 29%." [2] I'm not saying I agree with the paper, but at least it provided a mathematical framework for studying taxation and considered important things such as incentives, innovation and economic growth, which in my view is a good starting point. [1] https://www.youtube.com/watch?v=N2xDm-Y4l_4 https://www.youtube.com/watch?v=N2xDm-Y4l_4 [2] https://www8.gsb.columbia.edu/faculty-research/sites/faculty-research/files/finance/Macro%20Workshop/toptax.pdf https://www8.gsb.columbia.edu/faculty-research/sites/faculty...
blue4 8y ago
I think it's common for people to want to tax people that have more, especially when the wealth gap is only widening. The state of things is the ever increase of the poor unable to break out of their class and the rich only getting richer. Maybe it would be a good idea to provide the ability to have an option to suggest where/how the funds will be used based on some of the nation/state level priority needs.
tomohawk 8y ago
Sure - raise rates to 100% on wealthiest 5%. It still wont pay for what she wants.
RickJWagner 8y ago
I'm generally pretty conservative, but I wouldn't mind higher rates on the very top earners. (Say 500k and above. When you get to the 1M tier, put taxes into the 90s.) But there's a catch: I'd also like decreased spending, at least until the Golden Fleece Awards stop finding easy targets. It would be nonsense to raise taxes on anyone unless the money is put to good use.
newintellectual 8y ago
"Americans agree." Oh really? I don't agree. Millions of others don't agree. Who exactly agrees? Others of a similar leftist bent? Sure, who didn't know that? How about "Serial killer X wants more victims and Americans agree"? After all, it's certain that some Americans would actually want that.

81 points by iron0013 8y ago

From https://investinganswers.com/ https://investinganswers.com/ -- The marginal tax rate is the percentage of tax applied to your income for each tax bracket in which you qualify. In essence, the marginal tax rate is the percentage taken from your next dollar of taxable income above a pre-defined income threshold. The marginal tax rate includes federal, state and local income taxes, as well as federal payroll and self-employment taxes. This differs from the average tax rate, which is the total tax paid as a percentage of total income earned.

deleted 8y ago

[deleted]

Chikodi 8y ago

Hard to identify with people who find this controversial

claydavisss 8y ago
You might find it more challenging when they will eventually consider you "rich". There's no way there's enough money in the top 1% to fund the programs and plans she wants. The only way will be through the upper middle class. YOU.
- geofft 8y ago
  Are there many people who support this policy and don't support it for themselves, should they be upper-middle-class? I personally support a 70% marginal tax on all income over $100,000, and I make well over that. In particular the primary reason I support this is that the primary reason I want more than $100K income is competing in housing markets like SFBA and NYC. If everyone making over $100K is taxed heavily past that point, then the people competing for the same housing are on the same playing field as I am - if anything, I'm more competitive with people who make more than I do - and it also makes income equality better in general. (I don't actually care if the money goes to the government; you may as well burn it. The effect I'm interested in is changing post-tax incomes, not getting more revenue for the government)
  - pascalxus 8y ago
    are you just trolling for responses? well you got me. You can't possibly believe that 70% marginal on > 100k is anywhere near reasonable. Here in CA, that means, you're income taxes would be 83% plus medicare and social sec urity which is +8%, and let's not forget the company pays another 7% of your salary on top of that (you don't ever see that 7% - that's the part they pay), and that's not even counting all the other taxes you pay after that. at that point, everyone would have to quit their jobs. to say that it would ruin the economy is the biggest understatement of a lifetime.
    - anth_anm 8y ago
      They wouldn't be 83%, because it's a marginal rate.
      - pascalxus 8y ago
        it's more than 83% when you take into account all the other taxes: there's not just federal and state income taxes, please take a look at your pay stub, there's a lot of other stuff on there.
        geofft 8y ago
        Please take a look at your 1040. My comment was about marginal rate. I would like the portion of my income above $100K to be taxed at 83%, and my income below $100K to be left alone. I would not like all of my income to be taxed at 83%.
    - geofft 8y ago
      Yes, and I live in NY which would also make marginal income over $100K have extremely diminishing returns. I do not understand your argument that everyone would have to quit their jobs. They just wouldn't fight for raises once they made it to $100K. I started my career making $95K out of college. I can't say I'm more than $5K/year happier now. I just spend more to keep up with everyone else, mostly on housing.
- mempko 8y ago
  It's not about getting money to fund programs. It's a way to reduce inequality. The programs will be funded by deficit spending like all programs are.
  - AnimalMuppet 8y ago
    She initially proposed it as a way to pay for a particular program.
- jonahhorowitz 8y ago
  The slippery slope is a terrible counterargument.
  - natalyarostova 8y ago
    A slippery slope isn't a good or bad argument on its own. It's just the mapping of a physical model of reality to data. Whether it's a good argument or not depends on its fit! In some cases it's a very strong model. For example, free speech seems to work best historically when there are enshrined rules that are never infringed. Obviously the fit is not perfect (e.g. yelling 'fire' in a theater), but it's a pretty strong fit. On the other hand, the model appears to fit pretty poorly for gay marriage, where they posit if you move from traditionalism, before you know it, people will be marrying dogs.
  - AnimalMuppet 8y ago
    My family has slipped on that exact slope. Before (IIRC) Reagan, the point at which different marginal tax rates apply wasn't adjusted for inflation for decades, perhaps ever. The result was exactly that middle class families (including mine) paid tax rates that were originally intended only for the rich.
- iron0013 8y ago
  I think you might be surprised how much money is in the top 1%, and would probably find mind-blowing the amount of money in the top .01%
  - drc37 8y ago
    But why do you feel it is your right or the right of the government to take it from them? Because they happen to be more successful than you? I have never understood the logic of taking from the rich because they are rich. That always sparks the idea of true laziness in the person saying this.
    - iron0013 8y ago
      That's kind of a weirdly confrontational tone to take. If you already believe that "taxes are theft", then nothing I or anyone else can say will change your mind. However, the fact is that you made your money in one of the most money-making-amenable contexts in the history of this planet, and that's not an accident, and it's not a coincidence. This nation has been investing in itself--and investing in you--since long before either of us were born, in order to provide the societal context that allowed you to exercise the full extent of your god-given abilities in order to make your fortune. That's why you didn't die of cholera when you were 3, it's why you didn't join the job market as a barefoot and illiterate 12-year-old, it's why you can commute to work each day secure in the knowledge that some dude isn't going to pull up in a Toyota Hilux, jack your Beemer and sell you into slavery. To be a rich person in the United States and think "I made all this money, all by myself, because I'm some kind of genius Randian super-guy" is the pinnacle of deluded, parasitical vanity.
      - hirundo 8y ago
        First sentence: > That's kind of a weirdly confrontational tone to take. Last sentence: > To be a rich person in the United States and think "I made all this money, all by myself, because I'm some kind of genius Randian super-guy" is the pinnacle of deluded, parasitical vanity. You see that as non confrontational?
Rooster61 8y ago
Hard to identify with people who find this to be beyond controversy. Is it that far out of the realm of reality that someone might disagree with this approach?
- anth_anm 8y ago
  If they aren't rich? Yeah.
  - Rooster61 8y ago
    That's a vacuous, disingenuous argument that implies that anyone who is not rich and disagrees with this type of tax is objectively wrong. This is absurd and detrimental to constructive discourse.
BeetleB 8y ago
I think the real issue is it's easy to find people who like high taxes, as long as it's applied only to people much richer than they are. It comes off as a lot more sincere if people advocate for an increase on their own tax burden. The amount of revenue this will raise is rather low, compared to increasing the tax on, say, the middle class. You'll gain a lot, lot more if you revert the recent tax reduction on the middle class. I just looked at my numbers, and I thought my taxes wouldn't be impacted (high state income tax and real estate tax that can no longer be deducted). But even I saved quite a bit with the recent tax cuts. I obviously don't have a problem taxing people who make over $10M. But if I had to choose, I would instead revert the current tax cuts, even thought that would raise my tax burden.
ProAm 8y ago
Im opposed to providing the government more money when they cannot prove they successfully handle the tax revenue they already receive. I'd much rather see loopholes closed vs punishing people who are successful. I do not believe congress has my best interests in mind when they simply ask for more money instead of addressing their current situation.
natalyarostova 8y ago
Usually when it's hard to identify with someone, even if you still strongly disagree, it may mean you're not familiar with and giving a charitable reading to their best arguments from their most virtuous members. https://marginalrevolution.com/marginalrevolution/2019/01/taxes.html https://marginalrevolution.com/marginalrevolution/2019/01/ta...
alasdair_ 8y ago
The specifics matter. Ignore the time value of money for a moment and imagine you work for minimum wage for thirty years, building a business, then sell it and get ten million dollars for a single year, hoping to fund your retirement and pay for college etc. Compare that to getting $333K/year for thirty years - the taxes paid would be considerably different. Personally, I think that we need to look at taxes and earnings over a whole lifetime rather than on an arbitrary yearly basis.

gnicholas 8y ago

> It’s perhaps not surprising that Americans would support higher taxes on top earners given that tax rates on high income brackets were once much higher than they are today. The nominal rates were much higher once, but the effective rates were never that high. Before the '86 tax reform, there were many "investments" available to wealthy people that entailed zero risk but yielded guaranteed tax benefits — we now rightly call these "tax shelters". We should shed no tears that they are gone today, but we should also remember that the economic effects we saw previously were based on the effective tax rates (factoring in the sheltering activity), not the nominal rates. Now that these passive tax shelters are not available, the effective rates would be much closer to the nominal rates. Also, as a tax-lawyer-turned-startup-founder, I can guarantee that if we saw rates like this again, the biggest beneficiaries would be the lawyers and accountants who would restructure contracts to avoid these taxes.

bryanlarsen 8y ago
This is a very common argument, but aren't the rich already doing as much as possible to avoid the 39.6% rate?
- blantonl 8y ago
  Yes, Defined Benefit Pension Plans, 401K profit sharing, etc. There are an enormous amount of vehicles to use to legally lower your effective tax rate for wealthy individuals - especially small business owners.
- larrywright 8y ago
  This is my complaint too. People rant about the rich “paying their fair share”, but the problem here isn’t the tax rate applied to the rich, it’s that they don’t pay anywhere near it.
  - gnicholas 8y ago
    > People rant about the rich “paying their fair share”, but the problem here isn’t the tax rate applied to the rich, it’s that they don’t pay anywhere near it. Yes, but the rich nonetheless pay the lion's share of income taxes: The share of income earned by the top 1 percent of taxpayers rose to 20.6 percent in 2014. Their share of federal individual income taxes also rose, to 39.5 percent. from https://taxfoundation.org/summary-latest-federal-income-tax-data-2016-update/ https://taxfoundation.org/summary-latest-federal-income-tax-...

rayiner 8y ago

Matt Yglesias’s podcast has a great segment in this. One point they make that isn’t mentioned in the article is that it wouldn’t raise all that much money, certainly not enough to fund broad social programs. Not enough people make more than $10 million a year to raise that much money from higher marginal rates. Its’s really more about punishing billionaires than raising money for social programs. https://art19.com/shows/the-weeds https://art19.com/shows/the-weeds

village-idiot 8y ago
There is a strong argument to be made for the usage of taxation to purposefully break up extreme fortunes, especially self sustaining ones. Although for that usage, the wealth tax and estate tax would be much more effective, even if politically heavy lifts.
- NegativeK 8y ago
  Piketty's Capital in the Twenty-First Century essentially argues this, but more from a perspective of forcing investment back into the market to stay ahead of tax and inflation losses.
  - tptacek 8y ago
    Doesn't Piketty advocate for a wealth tax, not simply high income tax rates? Wealth taxes target accumulated fortunes, not earned income.
    - village-idiot 8y ago
      I'm not sure about Piketty per se, but I know that estate taxes are a common trick to break up self sustaining fortunes. The basic theory being that it might be ok for someone to amass quite a bit of wealth during their lifetime from their own labor, but it's not ok for their progeny to be permanently wealthy because of who their parents happened to be.
    - mushufasa 8y ago

iscrewyou 8y ago

This has been done before and it works. Taxes need a correction. But it’s hard to explain to the public or the ones who are against this because they listen to certain opinions. They need to have a simple message. Like three bullet points that anyone can read and get a message. No percentage comparisons between social classes, no comparison between old and new tax rates. None of that. Public tunes right out. E.g. (1) If you make over x in a year, you’ll be taxed at the new 70% rate, (2) if you make less than x, your taxes won’t change, (3) that’s it!!

geofft 8y ago
This is insufficient because a) point 1 is inaccurate, if you make over x in a year the portion over x is taxed at the new 70% rate, and this is already a point of confusion (perhaps intentional confusion) b) people who understand that worry they personally will be over x, so they don't care about 2 c) people who understand both a and c worry that the systemic effects of raising taxes on the rich is to lower job creation or to make America not-great again or something, so they're less interested in bullet points about the actual change than understanding how it affects the economy.
smacktoward 8y ago
> They need to have a simple message. It's hard to imagine a simpler message than "people who make more than $10 million a year should pay more taxes."
- briandear 8y ago
  Except the top 1% of taxpayers accounted for more income taxes paid than the bottom 90% combined. The top 1% pay almost 40% of all income taxes.
  - millstone 8y ago
    $10 million is in the top .01%, who pay a lower rate than the top 1%.

avar 8y ago

Whatever anyone thinks about this policy proposal, most articles on this are really shallow, and e.g. don't mention: 1) That the French backed out of a similar tax recently[1]. Not discussing another major economy's recent experiment with this (well, 75% not 70%) seems strange. 2) The lack of discussion about how those subject to this tax might restructure their assets to avoid it. If you earn more than $10 million/yr you can hire a team of accountants to restructure things for you, has anyone speculated as to how the tax code will stand up to that if only this single variable is changed? 1. https://www.theguardian.com/world/2014/dec/31/france-drops-75percent-supertax https://www.theguardian.com/world/2014/dec/31/france-drops-7...

AimForTheBushes 8y ago

I think raising taxes is a good idea but arbitrarily making up the number is not. The idea that this would cover some 'Green Deal' ignores the 800 lbs gorilla in the room- a trillion dollar deficit year after year. We really need to figure out how to make the government more efficient and work in the allotted funding for it. Every politician wants to spend a whole bunch of money trying to push their agenda but it's always on credit.

mempko 8y ago
Trillion dollar deficit means there are a trillion dollars extra floating around in the private sector. Trillion dollars more in people's bank accounts. If there was no deficit spending, there would not be money floating around in circulation that isn't debt issued bank notes.
- zozbot123 8y ago
  Exactly. And all this money sloshing around is what leads to inflation, so the central bank has to make up for it by doing things like "tapering" QE, raising interest rates, and generally crashing the economy.
- AimForTheBushes 8y ago
  Once the deficit eclipses the total GDP it won't matter if there is extra money floating around because inflation will spiral.
  - millstone 8y ago
    Did you mean debt? The deficit is nowhere close to GDP. Japan has a much higher debt to GDP ratio than the US, and inflation of <1%.
chefkoch 8y ago
>ignores the 800 lbs gorilla in the room the defense budget?

cpr 8y ago

Looked at from a higher level: https://moneymaven.io/mishtalk/economics/progressive-lies-like-free-college-and-medicare-for-all-hide-cost-of-debt-0vidqfvLIEK3kpaUPdycFA/ https://moneymaven.io/mishtalk/economics/progressive-lies-li...

millstone 8y ago
How does that apply? AOC's proposal to raise taxes on the rich would not increase the debt.

Rooster61 8y ago

What frustrates me about income taxes (and really taxes in general) is that proponents often automatically presume that a larger amount of money flowing into the government is a wholly beneficial effect. I trust current US government officials to effectively use my tax dollars about as far as I can throw it. Entirely too much money is squandered on things that do no benefit whatsoever to those who pay into it, rich or poor. It's a deal-breaker for me, without even going into the problem of tax evasion available to the obscenely rich.

UncleMeat 8y ago
Proponents don't automatically presume this. It isn't axiomatic. We just look at the data and disagree with your assessment. Yes, there is a tremendous amount of inefficiency in the entire process. Some people look at this and think that taxes are therefore not a good plan. Other people look at this and think that despite the inefficiency taxes solve such an important need that it is worth it. The other problem with this sort of argument is that it works at literally every tax level. If federal income tax rates were 1% then your argument would work just as well at discouraging any tax hike. There is clearly an inflection point but it is worth examining where that point is.
- Rooster61 8y ago
  > Proponents don't automatically presume this I respectfully disagree. Dogmatic clinging to political and economic ideals is rampant in society. People do this all the time. That doesn't apply to EVERYONE who holds the opposed opinion, though. Nor was it my intention to imply that. > Yes, there is a tremendous amount of inefficiency in the entire process. It's not just a matter of inefficiency. Inefficiency is intrinsic to any economic system as large and complex as that of the US, and that's to be expected. What isn't to be expected, or at least condoned, is the ACTIVE measures taken by those in office/places of power to squander money that is not naturally misappropriated by that complexity. Our current political/economic client is rife with this. > The other problem with this sort of argument is that it works at literally every tax level. The fact that an argument is right at every level isn't a problem, nor does it make it invalid. I'm of the opinion that no tax is going to be truly utilized correctly until the underlying problem of corruption is fixed. And please don't take my tone as accusatory. I do appreciate people taking a critical look at an issue and still coming up with the opposite of my stance.

effnorwood 8y ago

This has what to do with technology?

Rooster61 8y ago
https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html "On-Topic: Anything that good hackers would find interesting. That includes more than hacking and startups" I'm a hacker, and I find tax implementation to be a complex, interesting problem worthy of discussion.

lambdasquirrel 8y ago

Why the focus on income as opposed to capital gains? It's always struck me that only the very-very rich count on investment income.

gnicholas 8y ago
Income includes capital gains. No one has given enough detail on how this particular tax would be implemented, but surely it would capture both (and therefore be an even bigger tax increase on LTCG).
RickJWagner 8y ago
I don't like the idea of taxing capital gains. Buy-and-hold (and eventually sell) is one of the few paths to financial independence that are available to the common wage-earner. Many people have adapted the strategies suggested by Buffet, Bogle, etc. Many have succeeded. Don't kill one of the few publicly availble golden geese, please.
- dorchadas 8y ago
  I wouldn't say it's available to the "common wage-earner", given that they live paycheck to paycheck.

larrywright 8y ago

Controversial, but I’ll say it anyway: the fairest tax is a flat tax. Take, say, 15% across the board for anyone making above a threshold. Then combine that with eliminating most if not all of the current tax deductions, so that everyone actually pays the amount they should. Someone who makes $100k/year pays $15k in taxes. Someone who makes $1M/year pays $150k. That’s fair. I’m certainly not the first to propose this, and I seem to recall that Intuit and others (H&R Block likely) lobbied hard against any attempt to simplify the tax code, as their services wouldn’t be needed any more.

spullara 8y ago
The reason 17% is so often raised as the right flat tax is that it has been the effective tax rate since the 1950s. https://cdn.theatlantic.com/static/mt/assets/business/marginal%20rate%20revenue%20graph.png https://cdn.theatlantic.com/static/mt/assets/business/margin...
- larrywright 8y ago
  Thanks for that link - I didn’t realize that was the case. I remember 15% as the number that Malcom Forbes proposed when he ran for president in the ‘90s.
  - spullara 8y ago
    That was one of the references for 17% I was talking about: https://en.wikipedia.org/wiki/Steve_Forbes#Campaigns_for_president_and_major_issues https://en.wikipedia.org/wiki/Steve_Forbes#Campaigns_for_pre...
- harryh 8y ago
  A flat tax of 17% on incomes would not net the government 17% of GDP. The flat tax would have to be much higher (close to 2x) to achieve that same income.
  - spullara 8y ago

briandear 8y ago

Milton Friedman (who is a few steps above AOC when it comes to economic policy knowledge): "All things considered, the personal income tax structure that seems to me best is a flat-rate tax on income above an exemption... I would combine this program with the abolition of the corporate income tax, and with the requirement that corporations be required to attribute their income to stockholders, and that stockholders be required to include such sums on their tax returns. The most important other desirable changes are the elimination of percentage depletion on oil and other raw materials, the elimination of tax exemption of interest on state and local securities, the elimination of special treatment of capital gains, the coordination of income, estate, and gift taxes, and the elimination of numerous deductions now allowed." However, this won't happen because those on the left and the right (i.e. "politicians") use the tax code as a means for punishing and rewarding to garner favor with contributors to their political campaigns. Here's Friedman speaking on that: https://youtu.be/TruCIPy79w8?t=13 https://youtu.be/TruCIPy79w8?t=13

millstone 8y ago
Huh? Many prominent economists support progressive income taxes. Heck even Adam Smith.
geofft 8y ago
> Milton Friedman (who is a few steps above AOC when it comes to economic policy knowledge): AOC has a degree from Boston University in economics. Friedman was a professional economist, of course, but as in any field there are lots of professional researchers with strong opinions in lots of directions, and we still listen to the folks with bachelor's degrees. You can find many computer scientists with many opinions on programming languages, but you wouldn't ignore people who got a bachelor's in CS simply because the professional researchers exist. (Otherwise we'd just shut down this site and read journals all day.)
- masonic 8y ago
  AOC has a degree from Boston University in economics. Wikipedia says "International Relations and Economics", which is not the same as graduating as an Economics major.

peterwwillis 8y ago

raises hand Uh, I know where we can find money before we start adding more taxes. China, Russia, Saudi Arabia, India, France, United Kingdom, and Japan, combined, spend less on their military than we do. I get that she's a politician and all politicians have to play to their base, but can we not all agree, in any political arena, that the 674 Billion dollars spent on the military (over half of federal discretionary spending) is perhaps too high? I mean, what the actual fuck? How can anyone justify this? We're not even fighting any real wars, our Navy is in fucking shambles, our brand new fighter planes are a joke, and we're soon going to hire more contractors than actual soldiers. Just replace heating oil with $100 bills from the military industrial complex's pockets, it'll do more good for us.

jki275 8y ago
DOD is 27% of the US budget. Using the "discretionary spending" trick is being disingenuous. Let's fix SSDI and other entitlement abuse spending first. And the Navy needs more ships, but it's not "in shambles", and the JSF is the best aircraft that's ever been built, even if it did cost too much and take too long to get to IOC.

plainOldText 8y ago

So many politicians confidently propose solutions to complex systems such as the economy, yet some do not even understand basic things, such as the three branches of the government. [1] I saw recently on Paul Graham's twitter feed a paper that made the case for a 29% tax rate. From the paper: "the rate that incorporates innovation and maximizes a utilitarian social welfare function is just 29%." [2] I'm not saying I agree with the paper, but at least it provided a mathematical framework for studying taxation and considered important things such as incentives, innovation and economic growth, which in my view is a good starting point. [1] https://www.youtube.com/watch?v=N2xDm-Y4l_4 https://www.youtube.com/watch?v=N2xDm-Y4l_4 [2] https://www8.gsb.columbia.edu/faculty-research/sites/faculty-research/files/finance/Macro%20Workshop/toptax.pdf https://www8.gsb.columbia.edu/faculty-research/sites/faculty...

blue4 8y ago

I think it's common for people to want to tax people that have more, especially when the wealth gap is only widening. The state of things is the ever increase of the poor unable to break out of their class and the rich only getting richer. Maybe it would be a good idea to provide the ability to have an option to suggest where/how the funds will be used based on some of the nation/state level priority needs.

tomohawk 8y ago

Sure - raise rates to 100% on wealthiest 5%. It still wont pay for what she wants.

RickJWagner 8y ago

I'm generally pretty conservative, but I wouldn't mind higher rates on the very top earners. (Say 500k and above. When you get to the 1M tier, put taxes into the 90s.) But there's a catch: I'd also like decreased spending, at least until the Golden Fleece Awards stop finding easy targets. It would be nonsense to raise taxes on anyone unless the money is put to good use.

newintellectual 8y ago

"Americans agree." Oh really? I don't agree. Millions of others don't agree. Who exactly agrees? Others of a similar leftist bent? Sure, who didn't know that? How about "Serial killer X wants more victims and Americans agree"? After all, it's certain that some Americans would actually want that.