4 ms·
Yes, the wealthy will always find loopholes to shield some fraction of their wealth from taxation. I don't recall the exact source (and it's a nightmare to sear
by joe-collins 6y ago
Yes, the wealthy will always find loopholes to shield some fraction of their wealth from taxation. I don't recall the exact source (and it's a nightmare to search for), but I read that the maximum effective tax rate, historically, is somewhere in the ballpark of 30% as a result of that behavior. (I would welcome a link if anyone recognizes this argument.)
Seen through that lens, applying higher statutory rates and more complex policies isn't driven by the realistic expectation that those rates will be paid in full. Rather, as some number of the very wealthy will fail to perfectly adjust to the new regime, even small increases in the rate collected are substantial increases in the absolute dollar amount.
- Wolfenstein98k 6y agoWhich should be carefully weighed up against the costs of the policy (namely collection costs, think about how you value art and stocks and who is going to do that, and how... and when it's valued... and what incentives that produces for the owner...). Not to mention the "trust" aspect for those who are wealthy. It will guarantee preemptive shielding and other arrangements which ultimately just add further mud to the US economic system. Not worth a fistful of dollars to be frittered away on general expenditure anyway. IMHO.
- joe-collins 6y agoThe pressures you describe induce diminishing returns, but they are still returns (up to the point that some threshold kicks in and the marginal gain goes straight to zero).