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> Look at tax rates between WW2 & Reagan and the growth in the wealth of the middle class during the same period Are you talking about income taxes? Because, y

by bhupy 6y ago

> Look at tax rates between WW2 & Reagan and the growth in the wealth of the middle class during the same period Are you talking about income taxes? Because, yes you're right that Federal income taxes are nowhere near what they were post-WW2, but... > and the growth in the wealth of the middle class during the same period ...the wealth of the upper class has grown to historic levels because the vast VAST majority of upper-class wealth right now (top 0.1%) is 1) in unrealized capital gains, and 2) once capital gains are realized, they are taxed at the same rate that they were all the way up until the 70's, where it spent a brief decade moderately higher than it is today. Bezos doesn't have $100B+ sitting around in a checking account, and a WW2-era marginal tax rate wouldn't really raise as much as you think it would. Most of the richest billionaires have a salary of $1.

sudosysgen 6y ago
Bezos doesn't have 100B$ sitting on a bank account, but he has a low-interest high throughput equity line against his hare portfolio that means that if he wants to cut a 5 billion dollar cheque in the next 30 minutes, he can. Which is pretty damn close to having 100B$ sitting around. If he did pay a high tax rate every time he realized his gains in any way or tapped his equity through a financial instrument, I think things would be much better. But right now Bezos can pay a realized tax rate of under 20% if he wants.
- bhupy 6y ago
  Yes, these billionaires take collateralized loans, but that doesn't change the fact that they will eventually HAVE to pay taxes. At some point, Bezos has to realize some gain somewhere to have cash to pay back the loan — and odds are, that will be taxed as capital gains, the rate for which has been essentially constant since WW2.
  - sudosysgen 6y ago
    Sure, but in practice the actual tax rate for the upper echelon of the world right now is much, much lower than that for common people or for the upper echelon back in WW2.
    - bhupy 6y ago
      That's factually incorrect. https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/ https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/
      - sudosysgen 6y ago
        That is only factually incorrect if you look at the 1% in terms of households and in terms of income. In reality, a multi-millionaire might not qualify as the top 1% in household income due to their reliance on capital growth instead of straight income. One might see a million dollar increase in net worth, while paying no taxes on it, and then using that million dollar as collateral to help finance more and more growth. The only tax you might end up paying might be capital gains tax of 20%, or even 15%, eventually, while if it was household income you would pay 45% in taxes. The shift of income from dividends to capital gains for the wealthiest is not reflected in your statistics, and so I don't think they can be used to answer my earlier comment. The data in your source indeed does not seem to consider capital gains tax, as they seem to reflect the top tax bracket on average for different states and locales, whereas if capital gains were considered in relation to the state in which they are realized, it would certainly be much lower.
        bhupy 6y ago
        > In reality, a multi-millionaire might not qualify as the top 1% in household income due to their reliance on capital growth instead of straight income. One might see a million dollar increase in net worth, while paying no taxes on it, and then using that million dollar as collateral to help finance more and more growth. The only tax you might end up paying might be capital gains tax of 20%, or even 15%, eventually, while if it was household income you would pay 45% in taxes. The shift of income from dividends to capital gains for the wealthiest is not reflected in your statistics, and so I don't think they can be used to answer my earlier comment. Except this was true during WW2, also. You have to do an apples-to-apples comparison of what the top 1% of income earners paid then vs now. The shift in income to capital gains tax doesn't matter since the capital gains tax is the same, and the shift would have simply happened quicker with income taxed the way it was. Also, collateralized loans don't change anything besides simply delaying when the tax is paid. One needs to realize some gain somewhere to be able to pay back the loan eventually. > The data in your source indeed does not seem to consider capital gains tax, as they seem to reflect the top tax bracket on average for different states and locales, whereas if capital gains were considered in relation to the state in which they are realized, it would certainly be much lower. Yes, but capital gains taxes have been the same, so in effect this source undercounts the intensity of this effect. It doesn't matter if there are more multi-millionaires today that do not qualify as the "top 1% of income earners", because they would pay the same capital gains tax then vs now.
mdkrkeo9 6y ago
It’s even worse then; they truly own less than they claim and are just de facto in charge because economists (who I’m sure have nothing to gain by it) let us know this is all exactly how it works If you see everyone as atomic agents of work, is Bezos worth so much because of cherry picked models favored by law, or is he himself distributing goods in a universally mathematically efficient way by some unknown force, invisible hands and “free markets (in a nation of laws?)”? If he’s literally doing it, wow! Ok. But if it’s mathematical efficiency it’s mathematical efficiency. Bezos didn’t measure it. He took object distribution and abstracted it. Wow! Business innovation! Nevermind guys like Krugman openly admit Hari Seldon like powers of bending social agency are exactly his goal That’s great if the people in charge are truly benevolent Old enough to wreck the planet and die before it’s a problem doesn’t really suggest to me they’re going to be motivated to voluntarily acquiesce to measurable anxiety this creates for folks that aren’t quite so old Again more disingenuous western BS That carbon emissions have detrimental effects on human health and the environment was pretty obvious in London and elsewhere back in the day But since it’s not in your neighborhood, those laws of physics that matter for computers are lying to us when we annotate the inputs differently? Ok. Yup. Shark jump achieved.
- bhupy 6y ago
  > If you see everyone as atomic agents of work, is Bezos worth so much because of cherry picked models favored by law, or is he himself distributing goods in a universally mathematically efficient way by some unknown force, invisible hands and “free markets (in a nation of laws?)”? > If he’s literally doing it, wow! Ok. But if it’s mathematical efficiency it’s mathematical efficiency. Bezos didn’t measure it. He took object distribution and abstracted it. Wow! Business innovation! I guess optimization of global supply chains in a way that enables anyone to practically materialize literally anything they want within 2 days might not count to you as a real “innovation”, so I’ll take a different angle. Half of Amazon’s revenue comes from Amazon Web Services. Starting a business today is easier than it has ever been, thanks in large part to AWS. I work at a small seed-stage tech startup, and our product runs on infrastructure that, until recently, was only available to giant blue chip corporations with the resources to employ 100s of engineers to maintain datacenters, databases, tooling, monitoring & alerting, load balancing, etc. All of that is now available to our tiny little team for a simple monthly subscription fee. You can attribute the value of most startups today to the availability of this infrastructure as a service. > That carbon emissions have detrimental effects on human health and the environment was pretty obvious in London and elsewhere back in the day Not sure how this is relevant to income tax rates, gig workers, or labor unions — but we probably agree that carbon emissions are bad. IMO we should tax emissions as much as possible.
clairity 6y ago
yes, the special rate for capital gains is ostensibly justified as an investment incentive, but it's unnecessary for that purpose. investors would still chase the highest returns for their capital. we should instead treat all income the same for tax purposes.
- bhupy 6y ago
  I mean, no disagreements there, I'm just attacking the inaccurate and often used WW2 era vs Reagan era income tax argument. Even back then, none of the super rich were paying that income tax rate, because the wealthiest people in the world owe their wealth to ownership in their corporations.
majormajor 6y ago
For every Bezos how many corporate higher-ups making millions a year from ever-rising executive salaries while tax rates on those salaries have fallen? I'm much less concerned with one Bezos than I am with thousands of multi-millionaires.
- bhupy 6y ago
  > corporate higher-ups making millions a year from ever-rising executive salaries Yes, the vast majority of corporate executive wealth is delivered through stock compensation vs cash compensation. Executive compensation can be in the millions of dollars per year, but that's nearly always in stock options[1]. The marginal income tax rate variation between WW2 and Reagan would not have changed this. Also, the scary wealth disparity numbers you see floating around are typically attributed to the growth in wealth of BILLIONAIRES (usually ultra paper rich founders). Put simply, the GDP has grown at historic rates over the last 40 years, and the gains from that have gone to the founder-class. Most non-founder executives aren't billionaires. [1] https://www.npr.org/sections/money/2016/02/05/465747726/-682-when-ceo-pay-exploded https://www.npr.org/sections/money/2016/02/05/465747726/-682...

by bhupy 6y ago

sudosysgen 6y ago

Bezos doesn't have 100B$ sitting on a bank account, but he has a low-interest high throughput equity line against his hare portfolio that means that if he wants to cut a 5 billion dollar cheque in the next 30 minutes, he can. Which is pretty damn close to having 100B$ sitting around. If he did pay a high tax rate every time he realized his gains in any way or tapped his equity through a financial instrument, I think things would be much better. But right now Bezos can pay a realized tax rate of under 20% if he wants.

bhupy 6y ago
Yes, these billionaires take collateralized loans, but that doesn't change the fact that they will eventually HAVE to pay taxes. At some point, Bezos has to realize some gain somewhere to have cash to pay back the loan — and odds are, that will be taxed as capital gains, the rate for which has been essentially constant since WW2.
- sudosysgen 6y ago
  Sure, but in practice the actual tax rate for the upper echelon of the world right now is much, much lower than that for common people or for the upper echelon back in WW2.
  - bhupy 6y ago
    That's factually incorrect. https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/ https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/
    - sudosysgen 6y ago
      That is only factually incorrect if you look at the 1% in terms of households and in terms of income. In reality, a multi-millionaire might not qualify as the top 1% in household income due to their reliance on capital growth instead of straight income. One might see a million dollar increase in net worth, while paying no taxes on it, and then using that million dollar as collateral to help finance more and more growth. The only tax you might end up paying might be capital gains tax of 20%, or even 15%, eventually, while if it was household income you would pay 45% in taxes. The shift of income from dividends to capital gains for the wealthiest is not reflected in your statistics, and so I don't think they can be used to answer my earlier comment. The data in your source indeed does not seem to consider capital gains tax, as they seem to reflect the top tax bracket on average for different states and locales, whereas if capital gains were considered in relation to the state in which they are realized, it would certainly be much lower.
      - bhupy 6y ago
        > In reality, a multi-millionaire might not qualify as the top 1% in household income due to their reliance on capital growth instead of straight income. One might see a million dollar increase in net worth, while paying no taxes on it, and then using that million dollar as collateral to help finance more and more growth. The only tax you might end up paying might be capital gains tax of 20%, or even 15%, eventually, while if it was household income you would pay 45% in taxes. The shift of income from dividends to capital gains for the wealthiest is not reflected in your statistics, and so I don't think they can be used to answer my earlier comment. Except this was true during WW2, also. You have to do an apples-to-apples comparison of what the top 1% of income earners paid then vs now. The shift in income to capital gains tax doesn't matter since the capital gains tax is the same, and the shift would have simply happened quicker with income taxed the way it was. Also, collateralized loans don't change anything besides simply delaying when the tax is paid. One needs to realize some gain somewhere to be able to pay back the loan eventually. > The data in your source indeed does not seem to consider capital gains tax, as they seem to reflect the top tax bracket on average for different states and locales, whereas if capital gains were considered in relation to the state in which they are realized, it would certainly be much lower. Yes, but capital gains taxes have been the same, so in effect this source undercounts the intensity of this effect. It doesn't matter if there are more multi-millionaires today that do not qualify as the "top 1% of income earners", because they would pay the same capital gains tax then vs now.

mdkrkeo9 6y ago

It’s even worse then; they truly own less than they claim and are just de facto in charge because economists (who I’m sure have nothing to gain by it) let us know this is all exactly how it works If you see everyone as atomic agents of work, is Bezos worth so much because of cherry picked models favored by law, or is he himself distributing goods in a universally mathematically efficient way by some unknown force, invisible hands and “free markets (in a nation of laws?)”? If he’s literally doing it, wow! Ok. But if it’s mathematical efficiency it’s mathematical efficiency. Bezos didn’t measure it. He took object distribution and abstracted it. Wow! Business innovation! Nevermind guys like Krugman openly admit Hari Seldon like powers of bending social agency are exactly his goal That’s great if the people in charge are truly benevolent Old enough to wreck the planet and die before it’s a problem doesn’t really suggest to me they’re going to be motivated to voluntarily acquiesce to measurable anxiety this creates for folks that aren’t quite so old Again more disingenuous western BS That carbon emissions have detrimental effects on human health and the environment was pretty obvious in London and elsewhere back in the day But since it’s not in your neighborhood, those laws of physics that matter for computers are lying to us when we annotate the inputs differently? Ok. Yup. Shark jump achieved.

bhupy 6y ago
> If you see everyone as atomic agents of work, is Bezos worth so much because of cherry picked models favored by law, or is he himself distributing goods in a universally mathematically efficient way by some unknown force, invisible hands and “free markets (in a nation of laws?)”? > If he’s literally doing it, wow! Ok. But if it’s mathematical efficiency it’s mathematical efficiency. Bezos didn’t measure it. He took object distribution and abstracted it. Wow! Business innovation! I guess optimization of global supply chains in a way that enables anyone to practically materialize literally anything they want within 2 days might not count to you as a real “innovation”, so I’ll take a different angle. Half of Amazon’s revenue comes from Amazon Web Services. Starting a business today is easier than it has ever been, thanks in large part to AWS. I work at a small seed-stage tech startup, and our product runs on infrastructure that, until recently, was only available to giant blue chip corporations with the resources to employ 100s of engineers to maintain datacenters, databases, tooling, monitoring & alerting, load balancing, etc. All of that is now available to our tiny little team for a simple monthly subscription fee. You can attribute the value of most startups today to the availability of this infrastructure as a service. > That carbon emissions have detrimental effects on human health and the environment was pretty obvious in London and elsewhere back in the day Not sure how this is relevant to income tax rates, gig workers, or labor unions — but we probably agree that carbon emissions are bad. IMO we should tax emissions as much as possible.

clairity 6y ago

yes, the special rate for capital gains is ostensibly justified as an investment incentive, but it's unnecessary for that purpose. investors would still chase the highest returns for their capital. we should instead treat all income the same for tax purposes.

bhupy 6y ago
I mean, no disagreements there, I'm just attacking the inaccurate and often used WW2 era vs Reagan era income tax argument. Even back then, none of the super rich were paying that income tax rate, because the wealthiest people in the world owe their wealth to ownership in their corporations.

majormajor 6y ago

For every Bezos how many corporate higher-ups making millions a year from ever-rising executive salaries while tax rates on those salaries have fallen? I'm much less concerned with one Bezos than I am with thousands of multi-millionaires.

bhupy 6y ago
> corporate higher-ups making millions a year from ever-rising executive salaries Yes, the vast majority of corporate executive wealth is delivered through stock compensation vs cash compensation. Executive compensation can be in the millions of dollars per year, but that's nearly always in stock options[1]. The marginal income tax rate variation between WW2 and Reagan would not have changed this. Also, the scary wealth disparity numbers you see floating around are typically attributed to the growth in wealth of BILLIONAIRES (usually ultra paper rich founders). Put simply, the GDP has grown at historic rates over the last 40 years, and the gains from that have gone to the founder-class. Most non-founder executives aren't billionaires. [1] https://www.npr.org/sections/money/2016/02/05/465747726/-682-when-ceo-pay-exploded https://www.npr.org/sections/money/2016/02/05/465747726/-682...