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Ah yes, the obligate vacant comment about donating to the Federal Government when there's talk of taxes being too low on the wealthy. Get a new line. The probl

Ah yes, the obligate vacant comment about donating to the Federal Government when there's talk of taxes being too low on the wealthy. Get a new line. The problems in this country, including the mess that is the tax system, cannot be solved by snarky comments like "donate your money if you think taxes are too low." They require a longitudinal and deep response.

rayiner 6y ago
The problems in this country also cannot be solved by empty rhetoric about “taxes being too low on the wealthy.” Taxes on the wealthy in the US aren’t dramatically lower than in Europe. The top tax bracket in Germany is 45%, versus 37% + state. So if you live in any of the 9 states with a top state bracket of 8% or higher, including New York and California, the top income tax bracket is actually lower in Germany. Capital gains taxes in Germany are also similar accounting for state capital gains taxes. So how does Germany pay for its expansive welfare state? It has a 42% bracket that kicks in at 57,000 euro. In California, the marginal dollar income tax at that level is just 26% (federal plus state). It also has a 20% VAT. In both Germany and the US, the vast majority of income is earned by the bottom 99%. In the US, we don’t tax those people enough. (Or we tax them what they want to be taxed. I can’t help but notice that while half the country wants European-style social services, nobody is proposing European-style taxes on people making under six figures, or a VAT. Even Sanders promised not to raise taxes on people making below $250,000. The math just doesn’t work. Americans—the bottom 99% that makes 80% of all income—have chosen to be taxed less than Europe in return for less social services than Europe.)
- newacct583 6y ago
  You're quoting nominal rates and not effective taxation. The very wealthy don't pay their "marginal dollar" in "income tax" at a 37% federal bracket (plus state), they pay it in capital gains tax at 20%. If they pay it at all, given that in fact much income at these levels is sheltered from tax entirely via international tricks. There's plenty of analysis out there showing how the very wealthy in the US pay less effective tax than middle class families. That's not "empty rhetoric". It's a genuine problem and something we should be trying to solve.
  - rayiner 6y ago
    Capital gains is 20% federal plus state (13% in California). Germany’s capital gains rate is 30.5%, lower than California and New York. Regardless, there is just not enough capital gains income for that to matter. For example, Biden’s plan to tax capital gains as ordinary income for taxpayers making over $1 million per year is expected to bring in less than $50 billion a year in revenues. Eliminating the capital gains preference entirely would raise only $130 billion annually. As to the “very wealthy”—Tim Cook’s tax rate on his $135 million bonus a few years ago was 52%. The people you’re talking about aren’t even ordinary wealthy people: CEOs, movie stars, and the like. What you’re talking about the Warren Buffets of the world that make money through investments. But there’s just not very many of those people. The IMF estimates the global cost of individual tax avoidance at $200 billion per year: https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-.... Say half that is attributable to the US. That’s about the same as the cost of the deductions for mortgage interest and local property taxes. Federal, state, and local governments tax more than $5 trillion annually. One party is proposing new spending amounting to several trillion more annually. In the face of those numbers, talking about $50 billion or $100 billion issues with respect to the taxation of the very wealthy is indeed empty rhetoric. You hear a lot of talk about billionaires this and billionaires that. The total income of all billionaires in the US is $130 billion, or about 1% of all income. It just doesn’t matter very much what the tax rate is on people who comprise only 1% of the tax base. Spending 90% of your time talking about tax issues that could fund at most 10% of your proposed new spending is empty rhetoric. Meanwhile, German levels of taxation on the middle class, and a German-style VAT would raise trillions annually. Guess why nobody talks about that.
    - lifeformed 6y ago
      I don't know why you say hundreds of billions of dollars isn't worth taking about, compared to trillions. $150B is 15% of $1T, a sizable chunk. And the total income of US billionaires being just $130B doesn't quite capture the complete picture, when their combined wealth is in the trillions, and their assets keep growing.
- adrianN 6y ago
  Arguably taxes on the wealthy are too low in Europe too. There is constant talk about taxing the wealthy more in Germany for example.
- sandworm101 6y ago
  >> Taxes on the wealthy in the US aren’t dramatically lower than in Europe. Apples and oranges comparison. The US government is fundamentally different concept of national government. Between healthcare and the military, US per-citizen spending it far beyond, as European examples, Germany (more than double). In short, the US has to tax more because its government is so much bigger. Add to that the greater wealth disparities in the US, taxes on US rich need to be higher if the US ever wants to climb into the black. Germany: 399 billion / 83 million people = ~$5,000/person/year US: 3.8 Trillion / 328 million people = ~$12,000/person/year
  - vxNsr 6y ago
    >Germany: 399 billion / 83 million people = ~$5,000/person/year >US: 3.8 Trillion / 328 million people = ~$12,000/person/year Apples and oranges comparison. The US subsidies most EU militaries. NATO spending is a great example. US is the only member who actually fulfills their obligations. Basically GP is more right than you
    - sandworm101 6y ago
      It doesn't matter what the money is being spent on. For purposes of budget and tax, all that matters is that the money is being spent. The US chooses to spend more, to have a big government. Other countries choose to spend less and have smaller governments. They both have to get the money somewhere.
  - sokoloff 6y ago
    > In short, the US has to tax more because its government is so much bigger. It seems reasonable to point out that there’s another direction we could go to solve that imbalance. (Could be across the board or in certain categories.)

rayiner 6y ago

The problems in this country also cannot be solved by empty rhetoric about “taxes being too low on the wealthy.” Taxes on the wealthy in the US aren’t dramatically lower than in Europe. The top tax bracket in Germany is 45%, versus 37% + state. So if you live in any of the 9 states with a top state bracket of 8% or higher, including New York and California, the top income tax bracket is actually lower in Germany. Capital gains taxes in Germany are also similar accounting for state capital gains taxes. So how does Germany pay for its expansive welfare state? It has a 42% bracket that kicks in at 57,000 euro. In California, the marginal dollar income tax at that level is just 26% (federal plus state). It also has a 20% VAT. In both Germany and the US, the vast majority of income is earned by the bottom 99%. In the US, we don’t tax those people enough. (Or we tax them what they want to be taxed. I can’t help but notice that while half the country wants European-style social services, nobody is proposing European-style taxes on people making under six figures, or a VAT. Even Sanders promised not to raise taxes on people making below $250,000. The math just doesn’t work. Americans—the bottom 99% that makes 80% of all income—have chosen to be taxed less than Europe in return for less social services than Europe.)

newacct583 6y ago
You're quoting nominal rates and not effective taxation. The very wealthy don't pay their "marginal dollar" in "income tax" at a 37% federal bracket (plus state), they pay it in capital gains tax at 20%. If they pay it at all, given that in fact much income at these levels is sheltered from tax entirely via international tricks. There's plenty of analysis out there showing how the very wealthy in the US pay less effective tax than middle class families. That's not "empty rhetoric". It's a genuine problem and something we should be trying to solve.
- rayiner 6y ago
  Capital gains is 20% federal plus state (13% in California). Germany’s capital gains rate is 30.5%, lower than California and New York. Regardless, there is just not enough capital gains income for that to matter. For example, Biden’s plan to tax capital gains as ordinary income for taxpayers making over $1 million per year is expected to bring in less than $50 billion a year in revenues. Eliminating the capital gains preference entirely would raise only $130 billion annually. As to the “very wealthy”—Tim Cook’s tax rate on his $135 million bonus a few years ago was 52%. The people you’re talking about aren’t even ordinary wealthy people: CEOs, movie stars, and the like. What you’re talking about the Warren Buffets of the world that make money through investments. But there’s just not very many of those people. The IMF estimates the global cost of individual tax avoidance at $200 billion per year: https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-global-tax-havens-shaxon.htm https://www.imf.org/external/pubs/ft/fandd/2019/09/tackling-.... Say half that is attributable to the US. That’s about the same as the cost of the deductions for mortgage interest and local property taxes. Federal, state, and local governments tax more than $5 trillion annually. One party is proposing new spending amounting to several trillion more annually. In the face of those numbers, talking about $50 billion or $100 billion issues with respect to the taxation of the very wealthy is indeed empty rhetoric. You hear a lot of talk about billionaires this and billionaires that. The total income of all billionaires in the US is $130 billion, or about 1% of all income. It just doesn’t matter very much what the tax rate is on people who comprise only 1% of the tax base. Spending 90% of your time talking about tax issues that could fund at most 10% of your proposed new spending is empty rhetoric. Meanwhile, German levels of taxation on the middle class, and a German-style VAT would raise trillions annually. Guess why nobody talks about that.
  - lifeformed 6y ago
    I don't know why you say hundreds of billions of dollars isn't worth taking about, compared to trillions. $150B is 15% of $1T, a sizable chunk. And the total income of US billionaires being just $130B doesn't quite capture the complete picture, when their combined wealth is in the trillions, and their assets keep growing.
adrianN 6y ago
Arguably taxes on the wealthy are too low in Europe too. There is constant talk about taxing the wealthy more in Germany for example.
sandworm101 6y ago
>> Taxes on the wealthy in the US aren’t dramatically lower than in Europe. Apples and oranges comparison. The US government is fundamentally different concept of national government. Between healthcare and the military, US per-citizen spending it far beyond, as European examples, Germany (more than double). In short, the US has to tax more because its government is so much bigger. Add to that the greater wealth disparities in the US, taxes on US rich need to be higher if the US ever wants to climb into the black. Germany: 399 billion / 83 million people = ~$5,000/person/year US: 3.8 Trillion / 328 million people = ~$12,000/person/year
- vxNsr 6y ago
  >Germany: 399 billion / 83 million people = ~$5,000/person/year >US: 3.8 Trillion / 328 million people = ~$12,000/person/year Apples and oranges comparison. The US subsidies most EU militaries. NATO spending is a great example. US is the only member who actually fulfills their obligations. Basically GP is more right than you
  - sandworm101 6y ago
    It doesn't matter what the money is being spent on. For purposes of budget and tax, all that matters is that the money is being spent. The US chooses to spend more, to have a big government. Other countries choose to spend less and have smaller governments. They both have to get the money somewhere.
- sokoloff 6y ago
  > In short, the US has to tax more because its government is so much bigger. It seems reasonable to point out that there’s another direction we could go to solve that imbalance. (Could be across the board or in certain categories.)