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Comparing what the top 10% paid vs bottom 50% is silly. The issue at hand is wealth inequality. Clearly the top earners are paying much more in tax from a clear

Comparing what the top 10% paid vs bottom 50% is silly. The issue at hand is wealth inequality. Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. Taxes are one of the only ways to curb wealth inequality within a capitalist system. Any other ideas? The problem is that wealthy people can afford to set up multinational tax avoidance schemes to avoid actually paying the amount they should be paying. One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. Taxes and public spending are obviously not perfect, there are plenty of inefficiencies throughout. Corruption must be targeted rigorously, otherwise inequality will actually increase. But there needs to be a constant effort to reduce wealth centralization.

warbaker 8y ago
Let's not conflate wealth with income. Generally, you get income by providing a service to the market in excess of that income (as perceived by the market, which can be wrong). If you have really high taxes, the only way to get rich is to be born rich. High estate taxes make a ton of sense from a social perspective. High income taxes, much less so.
chrismcb 8y ago
No one is comparing the top vs the bottom. The comparison is what the top and bottom pay now vs what they paid then
opo 8y ago
>...Comparing what the top 10% paid vs bottom 50% is silly. That isn't what was done. The comparison is over time. The claim is often made that the rich paid far more of a share of the taxes until Reagan lowered the rates. The data shows otherwise. >...Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. That is a somewhat simplistic and misleading way of describing the income tax system. Income is not the same as wealth, etc. but also the US has a more progressive tax system than just about any of the OECD countries. The top 10% in the US make about 33% of the market income and pay 45% of the income taxes: https://taxfoundation.org/news-obama-oecd-says-united-states-has-most-progressive-tax-system/ https://taxfoundation.org/news-obama-oecd-says-united-states... >...One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. There are reasons NO countries institute such policies for long. It isn't because high rates haven't been tried, it is because it ends up hurting the country. You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. >...French economist Eric Pichet in a recent academic paper has found evidence of capital flight as a consequence of the French wealth tax, namely, that it has cut French GDP growth by 0.2% per year. https://www.forbes.com/sites/jonhartley/2015/02/02/frances-75-supertax-failure-a-blow-to-pikettys-economics/#153b6a375df2 https://www.forbes.com/sites/jonhartley/2015/02/02/frances-7... >...But there needs to be a constant effort to reduce wealth centralization. This probably isn't the only criteria that people should be concerned about. If the top 50 tech companies in the US had been started in Europe instead of the US, that would have measurably lowered the wealth inequality in the US but most people would say the US is better off being a tech leader.
- undersuit 8y ago
  > You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. Comparing France to the US in this situation is wrong. If people making more than $10 million a year or with a wealth of more than $50 million are going to leave the United States we have ways to handle this, namely the Expatriation Tax, which France doesn't have. You need to compare France to an equal situation like the US State of New Jersey applying a higher income tax and losing their state citizens to fellow states in the collective federal territory of the United States.
  - opo 8y ago
    >...If people making more than $10 million a year or with a wealth of more than $50 million are going to leave the United States we have ways to handle this, namely the Expatriation Tax, which France doesn't have. I wouldn’t necessarily expect many people giving up citizenship, but I would expect (as the article talks about) politically connected groups getting tax breaks. I would also expect lots of money spent in less productive ways to avoid the high rates and if people can’t avoid the tax, there will be dead weight losses from economic activity that isn't done. >...You need to compare France to an equal situation like the US State of New Jersey applying a higher income tax and losing their state citizens to fellow states in the collective federal territory of the United States. No state has ever tried such a bad policy, but if they did, I would imagine moving would be on the mind of everyone who might be affected by wealth taxes and 75% rates.
    - undersuit 8y ago
      No state but New Jersey. https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida-1530481356 https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida... Why are you so biased? High rates of taxation is not bad policy. Bad policy is far more nuanced than that.
      - opo 8y ago
        >No state but New Jersey. https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida.. https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida.... Most people would agree that raising the max tax rate from 8.97% to 10.75%, is not anything like raising the max tax rate from 45% to 75% - never mind that France also instituted a wealth tax. >...Why are you so biased? High rates of taxation is not bad policy. All I’ve done is give evidence that countries have learned that very high confiscatory tax rates are counterproductive. (Much as the original article about Hollywood tax avoidance discusses.) You haven’t said what you mean by “high rates of taxation” or give evidence why you think they are good - it isn’t clear why you are accusing anyone else of being biased.

warbaker 8y ago

Let's not conflate wealth with income. Generally, you get income by providing a service to the market in excess of that income (as perceived by the market, which can be wrong). If you have really high taxes, the only way to get rich is to be born rich. High estate taxes make a ton of sense from a social perspective. High income taxes, much less so.

chrismcb 8y ago

No one is comparing the top vs the bottom. The comparison is what the top and bottom pay now vs what they paid then

opo 8y ago

>...Comparing what the top 10% paid vs bottom 50% is silly. That isn't what was done. The comparison is over time. The claim is often made that the rich paid far more of a share of the taxes until Reagan lowered the rates. The data shows otherwise. >...Clearly the top earners are paying much more in tax from a clear dollar to dollar perspective. They own all the wealth. That is a somewhat simplistic and misleading way of describing the income tax system. Income is not the same as wealth, etc. but also the US has a more progressive tax system than just about any of the OECD countries. The top 10% in the US make about 33% of the market income and pay 45% of the income taxes: https://taxfoundation.org/news-obama-oecd-says-united-states-has-most-progressive-tax-system/ https://taxfoundation.org/news-obama-oecd-says-united-states... >...One solution is to just jack up the rates. If 90% marginal rate on paper only actually results in 45% being collected, then that's still better than 39% marginal rate on paper vs. 15-20% truly collected. There are reasons NO countries institute such policies for long. It isn't because high rates haven't been tried, it is because it ends up hurting the country. You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. >...French economist Eric Pichet in a recent academic paper has found evidence of capital flight as a consequence of the French wealth tax, namely, that it has cut French GDP growth by 0.2% per year. https://www.forbes.com/sites/jonhartley/2015/02/02/frances-75-supertax-failure-a-blow-to-pikettys-economics/#153b6a375df2 https://www.forbes.com/sites/jonhartley/2015/02/02/frances-7... >...But there needs to be a constant effort to reduce wealth centralization. This probably isn't the only criteria that people should be concerned about. If the top 50 tech companies in the US had been started in Europe instead of the US, that would have measurably lowered the wealth inequality in the US but most people would say the US is better off being a tech leader.

undersuit 8y ago
> You need only look at France's experiment with a 75% marginal rate and a wealth tax in 2012 and was dropped in 2015. Comparing France to the US in this situation is wrong. If people making more than $10 million a year or with a wealth of more than $50 million are going to leave the United States we have ways to handle this, namely the Expatriation Tax, which France doesn't have. You need to compare France to an equal situation like the US State of New Jersey applying a higher income tax and losing their state citizens to fellow states in the collective federal territory of the United States.
- opo 8y ago
  >...If people making more than $10 million a year or with a wealth of more than $50 million are going to leave the United States we have ways to handle this, namely the Expatriation Tax, which France doesn't have. I wouldn’t necessarily expect many people giving up citizenship, but I would expect (as the article talks about) politically connected groups getting tax breaks. I would also expect lots of money spent in less productive ways to avoid the high rates and if people can’t avoid the tax, there will be dead weight losses from economic activity that isn't done. >...You need to compare France to an equal situation like the US State of New Jersey applying a higher income tax and losing their state citizens to fellow states in the collective federal territory of the United States. No state has ever tried such a bad policy, but if they did, I would imagine moving would be on the mind of everyone who might be affected by wealth taxes and 75% rates.
  - undersuit 8y ago
    No state but New Jersey. https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida-1530481356 https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida... Why are you so biased? High rates of taxation is not bad policy. Bad policy is far more nuanced than that.
    - opo 8y ago
      >No state but New Jersey. https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida.. https://www.wsj.com/articles/new-jerseys-tax-gift-to-florida.... Most people would agree that raising the max tax rate from 8.97% to 10.75%, is not anything like raising the max tax rate from 45% to 75% - never mind that France also instituted a wealth tax. >...Why are you so biased? High rates of taxation is not bad policy. All I’ve done is give evidence that countries have learned that very high confiscatory tax rates are counterproductive. (Much as the original article about Hollywood tax avoidance discusses.) You haven’t said what you mean by “high rates of taxation” or give evidence why you think they are good - it isn’t clear why you are accusing anyone else of being biased.