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That’s not what I’m saying. I’m saying that their effective tax, as a percentage of their wealth is, much lower than everyone else. Progressives think that a pr

That’s not what I’m saying. I’m saying that their effective tax, as a percentage of their wealth is, much lower than everyone else. Progressives think that a progressive income tax is progressive, because they view taxation through the lens of income, but the primary source of most wealth (not most peoples’ wealth, but most wealth) is derived from property. Why stop at 20%? Map peoples’ wealth on a normal curve and then look at which parts of the curve pay the bulk of income tax. Saying the top 20% of income earners pay 87% of income taxes says very little, actually, about who, exactly is paying the bulk of income tax relative to wealth. I mean probably most people on hacker news are in the top 20% income earners in the US for crying out loud. Are most of us wealthy? Not relative to how much wealth is out there.

manfredo 7y ago
> I’m saying that their effective tax, as a percentage of their wealth is, much lower than everyone else. Income tax is collected as a percentage of people's income, I'm not sure why you're referencing wealth here. And judging tax as a percentage of wealth is not a very sound approach: * You have someone that makes $50,000 and has lived frugally and saved up $500,000 over the span of decades. * You have someone that makes $250,000 a year and spends nearly all of their money as they earn it, and so only has $50,000 saved. The former will pay $4,342 in federal income taxes (filing as single) and thus pay under 1% of their wealth in income taxes. The latter will pay $58,424 in federal income tax and thus pay over 100% of their wealth in income taxes. Am I to understand that this situation is unfair because the former is paying a smaller percentage of their wealth as compared to the latter, and that the former should be paying more than the latter? Judging taxes as a function of people's wealth is not a sound approach because people's wealth has much more to do with their financial decisions than their income. Why should frugal people who save more be taxed more heavily than someone who makes as much (or even more) but spends their money? This portion of your comment seems to indicate a fundamental misunderstanding of income vs. assets: > ...they view taxation through the lens of income, but the primary source of most wealth (not most peoples’ wealth, but most wealth) is derived from property. Property (in other words, the assets people own minus their debt) is wealth. Talking about how the source of wealth is derived from property is nonsensical - wealth and property are two words for the same thing: net assets. Income is the delta of people's wealth. If you have an annual income of $X then your wealth is increasing by at most $X each year. Gains from increased value of assets (capital gains) are another source of wealth. These are taxed, too, but at the time that the assets are sold rather than immediately. Inheritance is another source of wealth and that is taxed as well. Income is taxed because income, not property, is the source of people's wealth. It's valid to think of "income" as short for "incoming property".

manfredo 7y ago

> I’m saying that their effective tax, as a percentage of their wealth is, much lower than everyone else. Income tax is collected as a percentage of people's income, I'm not sure why you're referencing wealth here. And judging tax as a percentage of wealth is not a very sound approach: * You have someone that makes $50,000 and has lived frugally and saved up $500,000 over the span of decades. * You have someone that makes $250,000 a year and spends nearly all of their money as they earn it, and so only has $50,000 saved. The former will pay $4,342 in federal income taxes (filing as single) and thus pay under 1% of their wealth in income taxes. The latter will pay $58,424 in federal income tax and thus pay over 100% of their wealth in income taxes. Am I to understand that this situation is unfair because the former is paying a smaller percentage of their wealth as compared to the latter, and that the former should be paying more than the latter? Judging taxes as a function of people's wealth is not a sound approach because people's wealth has much more to do with their financial decisions than their income. Why should frugal people who save more be taxed more heavily than someone who makes as much (or even more) but spends their money? This portion of your comment seems to indicate a fundamental misunderstanding of income vs. assets: > ...they view taxation through the lens of income, but the primary source of most wealth (not most peoples’ wealth, but most wealth) is derived from property. Property (in other words, the assets people own minus their debt) is wealth. Talking about how the source of wealth is derived from property is nonsensical - wealth and property are two words for the same thing: net assets. Income is the delta of people's wealth. If you have an annual income of $X then your wealth is increasing by at most $X each year. Gains from increased value of assets (capital gains) are another source of wealth. These are taxed, too, but at the time that the assets are sold rather than immediately. Inheritance is another source of wealth and that is taxed as well. Income is taxed because income, not property, is the source of people's wealth. It's valid to think of "income" as short for "incoming property".