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Why are those the only two options? Is taxing wealthy people impossible?

rhino369 5y ago
You could. But you can only tax them so much. And the truly rich are able to avoid taxes by moving capital around. There are a lot of progressive spending proposals and they all can't be paid by just taxing the wealthy. Using that money to pay for benefits that mostly go to privileged people is not the best use of dollars. College graduates make more money on average, by a lot, 30 thousand dollars. Our current system address those who have loans but don't actually get high income. They barely have to pay their loans--and often don't pay anything. A person making 35k, with an average of 3.5% a year income growth won't pay a single cent under the PAYE program if they have a family of four.
- jessaustin 5y ago
  As was explained to me after the most recent insider leaks of income and tax information, a mere $70M wealth is enough to avoid taxes altogether. One "invests" one's wealth, and then lives off of revolving loans against those investments. Such a structure allows one to declare a $0 income every year for the rest of one's life. So, any particular change to our current system of taxation might be flawed. However, in general, we must change our current system of taxation. https://www.newsweek.com/warren-buffett-who-advocates-higher-taxes-defends-paying-least-among-americas-richest-1598830 https://www.newsweek.com/warren-buffett-who-advocates-higher...
rayiner 5y ago
The question is whether it’s practicable, and if it is, we should ask why other developed countries rely on heavy middle class taxes instead. The fact of the matter is that if you define “wealthy” as the top 1% (as Biden implicitly does by refusing to raise taxes on folks making up to $400,000), then there just isn’t enough money there to pay for a robust welfare state without raising middle class and upper middle class taxes. Doubling the tax rate on the top 1% (which isn’t in the cards) would raise $650 billion annually. That won’t even come close to closing the current budget deficit, and won’t pay for even a third of Medicare for all. It would pay for the Biden infrastructure plan, plus maybe free college, but none of the other things in the progressive wish list. Even if we take as drastic a step as doubling the tax rate on the top 1%, it would still be highly inequitable to distribute that money for free college before hitting priorities like universal healthcare, improved unemployment insurance, etc.

You could. But you can only tax them so much. And the truly rich are able to avoid taxes by moving capital around. There are a lot of progressive spending proposals and they all can't be paid by just taxing the wealthy. Using that money to pay for benefits that mostly go to privileged people is not the best use of dollars. College graduates make more money on average, by a lot, 30 thousand dollars. Our current system address those who have loans but don't actually get high income. They barely have to pay their loans--and often don't pay anything. A person making 35k, with an average of 3.5% a year income growth won't pay a single cent under the PAYE program if they have a family of four.

jessaustin 5y ago
As was explained to me after the most recent insider leaks of income and tax information, a mere $70M wealth is enough to avoid taxes altogether. One "invests" one's wealth, and then lives off of revolving loans against those investments. Such a structure allows one to declare a $0 income every year for the rest of one's life. So, any particular change to our current system of taxation might be flawed. However, in general, we must change our current system of taxation. https://www.newsweek.com/warren-buffett-who-advocates-higher-taxes-defends-paying-least-among-americas-richest-1598830 https://www.newsweek.com/warren-buffett-who-advocates-higher...

rayiner 5y ago

The question is whether it’s practicable, and if it is, we should ask why other developed countries rely on heavy middle class taxes instead. The fact of the matter is that if you define “wealthy” as the top 1% (as Biden implicitly does by refusing to raise taxes on folks making up to $400,000), then there just isn’t enough money there to pay for a robust welfare state without raising middle class and upper middle class taxes. Doubling the tax rate on the top 1% (which isn’t in the cards) would raise $650 billion annually. That won’t even come close to closing the current budget deficit, and won’t pay for even a third of Medicare for all. It would pay for the Biden infrastructure plan, plus maybe free college, but none of the other things in the progressive wish list. Even if we take as drastic a step as doubling the tax rate on the top 1%, it would still be highly inequitable to distribute that money for free college before hitting priorities like universal healthcare, improved unemployment insurance, etc.