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What "don't tax the rich" policies? 61% of Americans pay zero income tax. Why are the rich getting tremendously rich? Because the Federal Reserve has printed

What "don't tax the rich" policies? 61% of Americans pay zero income tax. Why are the rich getting tremendously rich? Because the Federal Reserve has printed money at an astonishing rate, which inflates asset prices. Who owns the most assets? The rich do. People are so focused on taxation (because it's something the average poor or middle class understands) when the real issue is the Fed (something most Americans aren't even aware of).

drunkpotato 5y ago
That income tax statistic is misleading. Most Americans do pay social security payroll taxes, which are income taxes, they’re just not called “income tax.”
- jdavis703 5y ago
  Even though social security is administered as a pay-go program, the amount of social security you can withdraw is based on how much you put in. This makes it much more like a forced savings account than a tax.
- shados 5y ago
  Social security is more of a forced 401k. You will get back the money (in theory), but yes, it's not progressive and impact the poor more than the rich. It's a bit of an iffy one. If the social security system rolled up into federal income tax, it would be much more progressive, but it would likely receive significant pushback in the political space (not knowing its history, I assume it was structured as a separate thing exactly for that reason. I should read up). Still, the point still stand: federal income taxes are quite progressive, and would surprise most people who wave their angry fist asking for the rich to be taxed more. The problem is mostly at the state and local level. The top 50% pays 97% of federal income tax. If you include most types of taxes, including social security, you end up with something a little less polarized: the top 1% have an effective tax rate of a little under 34%, while the poors are around 20%. One could easily argue it's not progressive enough, but it's still not the usual narrative of "I pay more taxes than millionaires". A a handful of ultra rich abuse loopholes to death to pay very little, and these people are averaged in the statistics (so the average rich person actually pays more than the stats show, if only a little). It's a minority though.
  - tshaddox 5y ago
    > Social security is more of a forced 401k. You will get back the money (in theory) Don't you get the value of the money back for all taxation, according to any theory that approves of taxation?
    - shados 5y ago
      Not nearly as directly though. Social security is basically money in -> money back. A glorified forced 401k, or at worse a kind of retirement insurance. It's a bit more separated. When I pay taxes, I don't get a direct return for it, I get (in theory) a fully functioning society. Social security would be a little closer to a sewer and water bill from the city (which you have to pay if you're a owner, but you get a sewer in exchange. Whether you like it or not). It's still not a great analogy because Social security is more deferred. It's really its own thing. Still, it doesn't work quite like a tax either. I personally wouldn't mind if it did though. It's one of those things where we'll pay for it one way or another. If there's an entire generation of people who can't properly retire and pay medical bill, we will pay for them through taxes anyway. May as well do it preemptively and efficiently.
      - medvezhenok 5y ago
        It's not quite a forced-401k though. Social security could technically be abolished (or payments diluted, etc) via an act of congress (even though politically unfeasible right now) - then you don't get anything out of your "investment". It's much harder to "abolish" a diversified 401k plan unless you abolish all private property (i.e. Russia 1917).
        shados 5y ago
        Yup, like I mentioned, it's really its own beast, and all analogies will be flawed in some ways. But it also doesn't work quite like other taxes, at least in practice.
    - jdavis703 5y ago
      > Don't you get the value of the money back for all taxation, according to any theory that approves of taxation? Roughly speaking, anyone paying more in taxes than the per capita spending is probably not receiving the full value of their taxes. We see this where most welfare (Pell Grants, SNAP benefits, Obamacare, etc) and tax credit schemes (CTC, electric car credit, etc) phase out as people pay more taxes.
kube-system 5y ago
Tax is the solution, though, because we should treat owner-occupied homes differently than investment homes. Owning a home to live in it should be more accessible than owning it for capital gains. The market doesn't and can't price in this externality any other way.
droopyEyelids 5y ago
Analyzing taxation by headcount doesn't provide much insight. The top 10% of Americans own about 85% of the wealth in America, and the entire bottom 90% only own around 15% of it.
aidenn0 5y ago
> Why are the rich getting tremendously rich? Because the Federal Reserve has printed money at an astonishing rate, which inflates asset prices. Who owns the most assets? The rich do. This is exacerbated by capital gains and dividends being taxed at a lower rate; if the gains due to asset inflation were being taxed at 37% instead of 15%, then at least all this money printing would help balance the budget a bit...
UncleMeat 5y ago
> 61% of Americans pay zero income tax. This was just last year. The norm is far lower, but was inflated by stimulus checks.

drunkpotato 5y ago

That income tax statistic is misleading. Most Americans do pay social security payroll taxes, which are income taxes, they’re just not called “income tax.”

jdavis703 5y ago
Even though social security is administered as a pay-go program, the amount of social security you can withdraw is based on how much you put in. This makes it much more like a forced savings account than a tax.
shados 5y ago
Social security is more of a forced 401k. You will get back the money (in theory), but yes, it's not progressive and impact the poor more than the rich. It's a bit of an iffy one. If the social security system rolled up into federal income tax, it would be much more progressive, but it would likely receive significant pushback in the political space (not knowing its history, I assume it was structured as a separate thing exactly for that reason. I should read up). Still, the point still stand: federal income taxes are quite progressive, and would surprise most people who wave their angry fist asking for the rich to be taxed more. The problem is mostly at the state and local level. The top 50% pays 97% of federal income tax. If you include most types of taxes, including social security, you end up with something a little less polarized: the top 1% have an effective tax rate of a little under 34%, while the poors are around 20%. One could easily argue it's not progressive enough, but it's still not the usual narrative of "I pay more taxes than millionaires". A a handful of ultra rich abuse loopholes to death to pay very little, and these people are averaged in the statistics (so the average rich person actually pays more than the stats show, if only a little). It's a minority though.
- tshaddox 5y ago
  > Social security is more of a forced 401k. You will get back the money (in theory) Don't you get the value of the money back for all taxation, according to any theory that approves of taxation?
  - shados 5y ago
    Not nearly as directly though. Social security is basically money in -> money back. A glorified forced 401k, or at worse a kind of retirement insurance. It's a bit more separated. When I pay taxes, I don't get a direct return for it, I get (in theory) a fully functioning society. Social security would be a little closer to a sewer and water bill from the city (which you have to pay if you're a owner, but you get a sewer in exchange. Whether you like it or not). It's still not a great analogy because Social security is more deferred. It's really its own thing. Still, it doesn't work quite like a tax either. I personally wouldn't mind if it did though. It's one of those things where we'll pay for it one way or another. If there's an entire generation of people who can't properly retire and pay medical bill, we will pay for them through taxes anyway. May as well do it preemptively and efficiently.
    - medvezhenok 5y ago
      It's not quite a forced-401k though. Social security could technically be abolished (or payments diluted, etc) via an act of congress (even though politically unfeasible right now) - then you don't get anything out of your "investment". It's much harder to "abolish" a diversified 401k plan unless you abolish all private property (i.e. Russia 1917).
      - shados 5y ago
        Yup, like I mentioned, it's really its own beast, and all analogies will be flawed in some ways. But it also doesn't work quite like other taxes, at least in practice.
  - jdavis703 5y ago
    > Don't you get the value of the money back for all taxation, according to any theory that approves of taxation? Roughly speaking, anyone paying more in taxes than the per capita spending is probably not receiving the full value of their taxes. We see this where most welfare (Pell Grants, SNAP benefits, Obamacare, etc) and tax credit schemes (CTC, electric car credit, etc) phase out as people pay more taxes.

kube-system 5y ago

Tax is the solution, though, because we should treat owner-occupied homes differently than investment homes. Owning a home to live in it should be more accessible than owning it for capital gains. The market doesn't and can't price in this externality any other way.

droopyEyelids 5y ago

Analyzing taxation by headcount doesn't provide much insight. The top 10% of Americans own about 85% of the wealth in America, and the entire bottom 90% only own around 15% of it.

aidenn0 5y ago

> Why are the rich getting tremendously rich? Because the Federal Reserve has printed money at an astonishing rate, which inflates asset prices. Who owns the most assets? The rich do. This is exacerbated by capital gains and dividends being taxed at a lower rate; if the gains due to asset inflation were being taxed at 37% instead of 15%, then at least all this money printing would help balance the budget a bit...

UncleMeat 5y ago

> 61% of Americans pay zero income tax. This was just last year. The norm is far lower, but was inflated by stimulus checks.