7 ms·

You'd think that, until you have a conversation with someone who does accounting for the ultra rich and discover that the mortgage interest deduction is a joke

You'd think that, until you have a conversation with someone who does accounting for the ultra rich and discover that the mortgage interest deduction is a joke compared to the loopholes those people are able to take advantage of.

rayiner 7y ago
The key-word here is ultra-rich. See: https://www.irs.gov/pub/irs-soi/soi-a-ints-id1801.pdf https://www.irs.gov/pub/irs-soi/soi-a-ints-id1801.pdf. Average tax rate goes up with income up to the top 0.1% ($2.4 million+). It starts dropping at the top 0.01% ($11 million+). But at that point you're talking about just 5% of total income. Tax those people an extra 10 points more, and you get maybe another $50 billion. But if you taxed the top 50% an average rate of 21% (the same as the top 10%), you'd raise $500 billion more. We love to complain about billionaires and hedge fund managers, but 80% of the income in this country accrues to a group of people that has entry-level college graduates at one end and top Google engineers at the other end.
- perl4ever 7y ago
  To be a little more specific, the federal tax system relies on people who make very roughly around $200-$500K/year, because those making less have their numbers outweighed by their lack of income, and those making more have their income outweighed by their lack of numbers. The thing about the WSJ graphic that everybody made fun of: https://franklycurious.com/wp/2013/01/16/pity-the-rich/ https://franklycurious.com/wp/2013/01/16/pity-the-rich/ ...is that whatever people in that income range are really like, and however little sympathy they deserve, they are the golden goose that provides the lion's share of revenue for the government, so politically, there always has to be a game of chicken when tax increases are discussed. That's where the money is, so how much can be taken without harm to the economy? I would bet that expropriating billionaires would have surprisingly little effect, but most of the people who would like to do it think six figures is rich too.
  - rayiner 7y ago
    You don't need to "expropriate" anyone, and I'd rather not experiment on the folks running the companies (Google, Microsoft, Apple, etc.) that make America the envy of the world. Folks at the top 30% mark still benefit from income inequality. (That is to say, they earn a larger share of national income than their share of the population.) If you tax the entire top 30% an average of 25% you could increase revenues by double what Warren's proposed wealth tax would bring in. (And you wouldn't risk driving businesses and jobs to Canada.)
    - perl4ever 7y ago
      But folks (Sundar Pichai, Satya Nadella) running large companies are not usually billionaires. Bill Gates isn't running Microsoft any more, you know. And if he was, what difference does it make to anyone exactly how many billions in stock he has? The difference is the delta between the benefit of his charitable efforts and what anyone else would do with the money, and the parsimonious assumption is that it's about zero. Since, you know, he didn't get rich by solving the problems he's trying to solve now.
      - rayiner 7y ago
        The difference is that soon as he gets successful, he reincorporates Microsoft in Vancouver BC. Or people like Musk, who continue to use their personal wealth to bankroll new companies, move to Toronto.
        pen2l 7y ago
        That's not the only single factor for them to consider though. I doubt Musk would move to Toronto, or that he would ultimately benefit from moving to Toronto in the long run were these taxes to go in effect. Of the sea of other things to consider, including the pool of candidates, the business culture, the social culture, the infrastructure already in place, types of grants available, the federal funding available (which can come with strings attached, like: "you gotta stay incorporated in the States"), etc. it makes sense for them to stay in America more than any other place. Not to mention, the safety that is here for these people and their children, the great schools, the best medical care, their ties, and so on.

rayiner 7y ago

The key-word here is ultra-rich. See: https://www.irs.gov/pub/irs-soi/soi-a-ints-id1801.pdf https://www.irs.gov/pub/irs-soi/soi-a-ints-id1801.pdf. Average tax rate goes up with income up to the top 0.1% ($2.4 million+). It starts dropping at the top 0.01% ($11 million+). But at that point you're talking about just 5% of total income. Tax those people an extra 10 points more, and you get maybe another $50 billion. But if you taxed the top 50% an average rate of 21% (the same as the top 10%), you'd raise $500 billion more. We love to complain about billionaires and hedge fund managers, but 80% of the income in this country accrues to a group of people that has entry-level college graduates at one end and top Google engineers at the other end.

perl4ever 7y ago
To be a little more specific, the federal tax system relies on people who make very roughly around $200-$500K/year, because those making less have their numbers outweighed by their lack of income, and those making more have their income outweighed by their lack of numbers. The thing about the WSJ graphic that everybody made fun of: https://franklycurious.com/wp/2013/01/16/pity-the-rich/ https://franklycurious.com/wp/2013/01/16/pity-the-rich/ ...is that whatever people in that income range are really like, and however little sympathy they deserve, they are the golden goose that provides the lion's share of revenue for the government, so politically, there always has to be a game of chicken when tax increases are discussed. That's where the money is, so how much can be taken without harm to the economy? I would bet that expropriating billionaires would have surprisingly little effect, but most of the people who would like to do it think six figures is rich too.
- rayiner 7y ago
  You don't need to "expropriate" anyone, and I'd rather not experiment on the folks running the companies (Google, Microsoft, Apple, etc.) that make America the envy of the world. Folks at the top 30% mark still benefit from income inequality. (That is to say, they earn a larger share of national income than their share of the population.) If you tax the entire top 30% an average of 25% you could increase revenues by double what Warren's proposed wealth tax would bring in. (And you wouldn't risk driving businesses and jobs to Canada.)
  - perl4ever 7y ago
    But folks (Sundar Pichai, Satya Nadella) running large companies are not usually billionaires. Bill Gates isn't running Microsoft any more, you know. And if he was, what difference does it make to anyone exactly how many billions in stock he has? The difference is the delta between the benefit of his charitable efforts and what anyone else would do with the money, and the parsimonious assumption is that it's about zero. Since, you know, he didn't get rich by solving the problems he's trying to solve now.
    - rayiner 7y ago
      The difference is that soon as he gets successful, he reincorporates Microsoft in Vancouver BC. Or people like Musk, who continue to use their personal wealth to bankroll new companies, move to Toronto.
      - pen2l 7y ago
        That's not the only single factor for them to consider though. I doubt Musk would move to Toronto, or that he would ultimately benefit from moving to Toronto in the long run were these taxes to go in effect. Of the sea of other things to consider, including the pool of candidates, the business culture, the social culture, the infrastructure already in place, types of grants available, the federal funding available (which can come with strings attached, like: "you gotta stay incorporated in the States"), etc. it makes sense for them to stay in America more than any other place. Not to mention, the safety that is here for these people and their children, the great schools, the best medical care, their ties, and so on.