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Raising Corporate Taxes Would Fund the Government for Four Days

5 points by cinquemb 6y ago

maerF0x0 6y ago
This reminds me of the "eat the rich" phrases from occupy wallstreet days. I forget the exact maths, but roughly speaking it was like if we created a 100% wealth tax for all the billionaires it would run the economy for like 2-3 months, but then what? Who would we tax 100% then? The challenge with focusing on the 1% is it's such a small group that anything you take from them becomes extremely diffuse across 99%. IMO the real win is getting the 99% to be 100% more productive (and not via more hours!) eg education, less bullshit work, technology and augmentation.
- asdffdsa 6y ago
  Why's this downvoted?
  - aaron-santos 6y ago
    The poster confuses billionaires with 1%. Maybe this was a casual comment, but when we're in this part of the wealth distribution tiny changes in percents reflect enormous changes in wealth. In fact billionaires are the top ~0.000625% of households w.r.t wealth(800/128M households*100). Whereas the threshold for 1% of wealth is ~$11M. Something to ask oneself is how much wealth is held by the 1% who are also not billionaires and how many days of funding the government does this represent?
    - maerF0x0 6y ago
      Yes this is a good point. As i recall (more than a decade ago!) the wealth taxes suggested during occupy wallstreet were mostly proposed for "Billionaires" and even "0.1%" was thrown around. It amplifies my point though if we go up to a number that seems unfathomable (such as billionaire) the slice of people is so minuscule that even 100% taxation (effective, not marginal) dissipates into nearly effectively nothing per person across the remainder. For example America's billionaires have about $4T of wealth[1]. If we taxed 100% of it out of their hands we'd only get 2-3 of the recent bailout bills passed, and there would be approximately 0 billionaires to tax the next time around. [1]: https://americansfortaxfairness.org/issue/net-worth-u-s-billionaires-soared-1-trillion-total-4-trillion-since-pandemic-began/ https://americansfortaxfairness.org/issue/net-worth-u-s-bill...
- sirtaj 6y ago
  Didn't labour productivity already grow quite significantly? As I understand it, wages and productivity growth for the 99% tracked quite closely until the mid-70s, after which productivity kept growing in leaps and bounds but wages stagnated. Am I incorrect?
  - maerF0x0 6y ago
    You're not wrong, and globally poverty has been plummeting. Standard of living has been rising faster than income because all consumed goods have been vastly improved over time.
    - sirtaj 6y ago
      Cost of education and healthcare has outpaced wage growth though, hasn't it? The 2-3 months you've calculated above represent 20-25% extra money to spend on those, much more if you hold the biggest expenditures (military and social security) at the same level. So it seems that the 1% could significantly fund the things you're hoping for.
      - maerF0x0 6y ago
        >The 2-3 months you've calculated above represent 20-25% extra That would be a one time boost and then it'd be gone forever (not a recurring revenue) . remember it would degrade wealth/asset base by 100%. Not to mention the issue that you cannot spend assets the way you can cash, you'd have to find a buyer for them (such as foreign countries or the federal reserve), but then you've basically either nationalized the whole economy or sold it off to a foreign entity.
        sirtaj 6y ago
        > That would be a one time boost and then it'd be gone forever (not a recurring revenue) I'm not sure it has to be non-recurring. Right now the 1% (just the 1%, not all non-labour wagers) takes home around 20% of national income in the US. If this was in line with the historical 10%, that's a significant yearly sum.
- didibus 6y ago
  A tax is recuring no? So effectively it would continue to fuel itself from YoY riches being made. You have to grow the pie AND make sure people get a more proportionally fair share of it. I think both these things are possible together. Though I recon the argument that it could be the appeal to have a giant slice of it that maybe motivates some to take the risks needed to double the size of the pie in the first place. I think maybe we've just gotten a bit out of hand with the range between min and max slice sizes of the pie. When some workers get a share of the pie too small to feed their hunger, and they're getting skinnier by the day, maybe something isn't working right. Especially when you also have some getting a slice so big that they can't even eat it all. So in theory, you tax the pie itself, and then everyone takes their proportional share of what's left, but if that leaves some with barely any, you have a problem. And the quickest fix is to have those taking bigger slices take slightly smaller ones to compensate. The alternative is to make an even bigger pie, but that takes a lot longer, and it doesn't mean people will be owed a bigger slice from it either.
  - maerF0x0 6y ago
    > When some workers get a share of the pie too small to feed their hunger, and they're getting skinnier by the day, Fully agree. But thinking such a way is shortermism on the behalf of capitalists. I think we need to do more to encourage longtermism across the whole populace. Things like capital gains tax favorability is one example of such a help.
  - anm89 6y ago
    I truly wish you could get to live in your utopia and reap the benefits or consequences whichever way it may fall. Would you actually sign on the dotted line?
    - didibus 6y ago
      I don't know why you call it a utopia, it's literally how most of the western countries currently operate and have been for a long time now, why do you think they have a graduated income tax. It's been around since 1862 in the US, and I think at this point it's fair to say it's been well battle tested. That you need to make some tweaks and small course corrections to it overtime is normal. That people who take more risk and produce more value deserve a bigger share, well while morally you can be against that idea or disagree with the risk or effort they've put in, incentives for people to try things to get richer also has proven itself a necessity to grow the economy overall, which is growing the pie in my analogy. But it is also in the interest of everyone for the system which enabled those same people to grow the pie in the first place, and gave them the opportunity to take risks and be competitive in the markets which got them a bigger slice in return to make sure that this whole system is sustainable and doesn't come crashing down. That's why minimum standards of living must be met, education must be available to all, and why graduated taxes were put in place 150+ years ago. There's ton of studies and research on these economic models, and most alternatives are theoritical, while this one has been going on for 150+ years like I said, and has a pretty good track record. Doesn't mean it can't be improved on further and also doesn't mean it must be static throughout, course correcting some of its variables as the environment changes seems reasonable to me, and most likely a necessity.
- xg15 6y ago
  > IMO the real win is getting the 99% to be 100% more productive (and not via more hours!) This doesn't make a lot of sense to me. If you only talk about productivity and nothing else, the benefits of productivity increase will go 100% to the employer and nowhere else. If an employee produces two gizmos in the time they used to need for one gizmo, but there is no change in hourly pay or total hours worked, then the employer gets two gizmos for the price of one, and that's all. Neither the employee nor the state gain anything from this. (In many cases, the increase in productivity comes with a more stressful or hazardous working environment, so there is even some risk this is a net loss for the employee) To pass on the benefits more fairly, you'd have to also raise taxes on employee wages and mandate pay rises and higher minimum wages. And I'm sure, as soon as someone would try that, a hundred blog posts like this one would pop up to argue why this is the worst thing imaginable. (Also, you could ask, why do you need the productivity increase at all? Why not just raise taxes and mandate pay rises right now?) Finally, why a 100% productivity increase? Why not 50% or 200% or 1000%? If we're talking in terms of "days the federal government is funded", how many days of funding would a 1% increase cover?
- 3finmunchousen 6y ago
  Funny you should say that https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ While there is certainly the naive view that we just take the money and spend it, the more serious view is that extreme wealth concentration is indicative of inefficiencies and rent seeking. Wealth beyond some level becomes irrelevant with regard to lifestyle but not with regard to political power. It's mine and others contention that the outsized power billionaires wield results in a poorly organized society that overvalues their interests and neglects the needs and potential of the masses. For example https://en.m.wikipedia.org/wiki/Rudy_Kurniawan https://en.m.wikipedia.org/wiki/Rudy_Kurniawan If the average person buys an old used car and it blows up - tough shit, buyer beware. However, if you and your billionaire friends spend outlandishly on wine and both you and the auction house fail to take steps to verify that the wines are genuine - we'll literally make a federal case out of it. Personally, I'm annoyed that a Koch brother can call up the FBI about the rich person version of being sold oregano instead of weed and not get howling laughter as a response.
Imnimo 6y ago
Any tax adjustment will look insignificant if you measure it in terms of how many days worth of all government spending it will fund. Like how many days would you have expected? Four days feels like a lot to me.
- AnimalMuppet 6y ago
  Well, all right, it will pay for 1% of next year's government. That's not nothing, but it's also not revolutionary. (I do believe that corporations should pay their taxes. Rather than raise rates, though, I'd rather close loopholes. At least start there...)

5 points by cinquemb 6y ago

This reminds me of the "eat the rich" phrases from occupy wallstreet days. I forget the exact maths, but roughly speaking it was like if we created a 100% wealth tax for all the billionaires it would run the economy for like 2-3 months, but then what? Who would we tax 100% then? The challenge with focusing on the 1% is it's such a small group that anything you take from them becomes extremely diffuse across 99%. IMO the real win is getting the 99% to be 100% more productive (and not via more hours!) eg education, less bullshit work, technology and augmentation.

asdffdsa 6y ago
Why's this downvoted?
- aaron-santos 6y ago
  The poster confuses billionaires with 1%. Maybe this was a casual comment, but when we're in this part of the wealth distribution tiny changes in percents reflect enormous changes in wealth. In fact billionaires are the top ~0.000625% of households w.r.t wealth(800/128M households*100). Whereas the threshold for 1% of wealth is ~$11M. Something to ask oneself is how much wealth is held by the 1% who are also not billionaires and how many days of funding the government does this represent?
  - maerF0x0 6y ago
    Yes this is a good point. As i recall (more than a decade ago!) the wealth taxes suggested during occupy wallstreet were mostly proposed for "Billionaires" and even "0.1%" was thrown around. It amplifies my point though if we go up to a number that seems unfathomable (such as billionaire) the slice of people is so minuscule that even 100% taxation (effective, not marginal) dissipates into nearly effectively nothing per person across the remainder. For example America's billionaires have about $4T of wealth[1]. If we taxed 100% of it out of their hands we'd only get 2-3 of the recent bailout bills passed, and there would be approximately 0 billionaires to tax the next time around. [1]: https://americansfortaxfairness.org/issue/net-worth-u-s-billionaires-soared-1-trillion-total-4-trillion-since-pandemic-began/ https://americansfortaxfairness.org/issue/net-worth-u-s-bill...
sirtaj 6y ago
Didn't labour productivity already grow quite significantly? As I understand it, wages and productivity growth for the 99% tracked quite closely until the mid-70s, after which productivity kept growing in leaps and bounds but wages stagnated. Am I incorrect?
- maerF0x0 6y ago
  You're not wrong, and globally poverty has been plummeting. Standard of living has been rising faster than income because all consumed goods have been vastly improved over time.
  - sirtaj 6y ago
    Cost of education and healthcare has outpaced wage growth though, hasn't it? The 2-3 months you've calculated above represent 20-25% extra money to spend on those, much more if you hold the biggest expenditures (military and social security) at the same level. So it seems that the 1% could significantly fund the things you're hoping for.
    - maerF0x0 6y ago
      >The 2-3 months you've calculated above represent 20-25% extra That would be a one time boost and then it'd be gone forever (not a recurring revenue) . remember it would degrade wealth/asset base by 100%. Not to mention the issue that you cannot spend assets the way you can cash, you'd have to find a buyer for them (such as foreign countries or the federal reserve), but then you've basically either nationalized the whole economy or sold it off to a foreign entity.
      - sirtaj 6y ago
        > That would be a one time boost and then it'd be gone forever (not a recurring revenue) I'm not sure it has to be non-recurring. Right now the 1% (just the 1%, not all non-labour wagers) takes home around 20% of national income in the US. If this was in line with the historical 10%, that's a significant yearly sum.
didibus 6y ago
A tax is recuring no? So effectively it would continue to fuel itself from YoY riches being made. You have to grow the pie AND make sure people get a more proportionally fair share of it. I think both these things are possible together. Though I recon the argument that it could be the appeal to have a giant slice of it that maybe motivates some to take the risks needed to double the size of the pie in the first place. I think maybe we've just gotten a bit out of hand with the range between min and max slice sizes of the pie. When some workers get a share of the pie too small to feed their hunger, and they're getting skinnier by the day, maybe something isn't working right. Especially when you also have some getting a slice so big that they can't even eat it all. So in theory, you tax the pie itself, and then everyone takes their proportional share of what's left, but if that leaves some with barely any, you have a problem. And the quickest fix is to have those taking bigger slices take slightly smaller ones to compensate. The alternative is to make an even bigger pie, but that takes a lot longer, and it doesn't mean people will be owed a bigger slice from it either.
- maerF0x0 6y ago
  > When some workers get a share of the pie too small to feed their hunger, and they're getting skinnier by the day, Fully agree. But thinking such a way is shortermism on the behalf of capitalists. I think we need to do more to encourage longtermism across the whole populace. Things like capital gains tax favorability is one example of such a help.
- anm89 6y ago
  I truly wish you could get to live in your utopia and reap the benefits or consequences whichever way it may fall. Would you actually sign on the dotted line?
  - didibus 6y ago
    I don't know why you call it a utopia, it's literally how most of the western countries currently operate and have been for a long time now, why do you think they have a graduated income tax. It's been around since 1862 in the US, and I think at this point it's fair to say it's been well battle tested. That you need to make some tweaks and small course corrections to it overtime is normal. That people who take more risk and produce more value deserve a bigger share, well while morally you can be against that idea or disagree with the risk or effort they've put in, incentives for people to try things to get richer also has proven itself a necessity to grow the economy overall, which is growing the pie in my analogy. But it is also in the interest of everyone for the system which enabled those same people to grow the pie in the first place, and gave them the opportunity to take risks and be competitive in the markets which got them a bigger slice in return to make sure that this whole system is sustainable and doesn't come crashing down. That's why minimum standards of living must be met, education must be available to all, and why graduated taxes were put in place 150+ years ago. There's ton of studies and research on these economic models, and most alternatives are theoritical, while this one has been going on for 150+ years like I said, and has a pretty good track record. Doesn't mean it can't be improved on further and also doesn't mean it must be static throughout, course correcting some of its variables as the environment changes seems reasonable to me, and most likely a necessity.
xg15 6y ago
> IMO the real win is getting the 99% to be 100% more productive (and not via more hours!) This doesn't make a lot of sense to me. If you only talk about productivity and nothing else, the benefits of productivity increase will go 100% to the employer and nowhere else. If an employee produces two gizmos in the time they used to need for one gizmo, but there is no change in hourly pay or total hours worked, then the employer gets two gizmos for the price of one, and that's all. Neither the employee nor the state gain anything from this. (In many cases, the increase in productivity comes with a more stressful or hazardous working environment, so there is even some risk this is a net loss for the employee) To pass on the benefits more fairly, you'd have to also raise taxes on employee wages and mandate pay rises and higher minimum wages. And I'm sure, as soon as someone would try that, a hundred blog posts like this one would pop up to argue why this is the worst thing imaginable. (Also, you could ask, why do you need the productivity increase at all? Why not just raise taxes and mandate pay rises right now?) Finally, why a 100% productivity increase? Why not 50% or 200% or 1000%? If we're talking in terms of "days the federal government is funded", how many days of funding would a 1% increase cover?
3finmunchousen 6y ago
Funny you should say that https://www.epi.org/productivity-pay-gap/ https://www.epi.org/productivity-pay-gap/ While there is certainly the naive view that we just take the money and spend it, the more serious view is that extreme wealth concentration is indicative of inefficiencies and rent seeking. Wealth beyond some level becomes irrelevant with regard to lifestyle but not with regard to political power. It's mine and others contention that the outsized power billionaires wield results in a poorly organized society that overvalues their interests and neglects the needs and potential of the masses. For example https://en.m.wikipedia.org/wiki/Rudy_Kurniawan https://en.m.wikipedia.org/wiki/Rudy_Kurniawan If the average person buys an old used car and it blows up - tough shit, buyer beware. However, if you and your billionaire friends spend outlandishly on wine and both you and the auction house fail to take steps to verify that the wines are genuine - we'll literally make a federal case out of it. Personally, I'm annoyed that a Koch brother can call up the FBI about the rich person version of being sold oregano instead of weed and not get howling laughter as a response.

Imnimo 6y ago

Any tax adjustment will look insignificant if you measure it in terms of how many days worth of all government spending it will fund. Like how many days would you have expected? Four days feels like a lot to me.

AnimalMuppet 6y ago
Well, all right, it will pay for 1% of next year's government. That's not nothing, but it's also not revolutionary. (I do believe that corporations should pay their taxes. Rather than raise rates, though, I'd rather close loopholes. At least start there...)