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America’s richest 400 families pay a lower tax rate than average taxpayer

12 points by ScottMann 5y ago

ScottMann 5y ago
There is something seriously wrong here. A better job needs to be done.
maxharris 5y ago
Solution: cut taxes for average taxpayers, balancing the budget by cutting spending. Everyone has a favorite program, so to make it politically easy, just cut every program by the same rate. At the turn of the last century, government spending was something around 3% of GDP. Today, it's about 36%. This figure goes way up whenever there is a new war or entitlement program. It can be cut.
sjtindell 5y ago
The problem is that no matter how you structure the rules, the wealthy will always be 1. connected and 2. able to hire the best accountants in the world. It’s impossible to get that money from them in my opinion. Your best hope is to incentivize them to spend it somehow.
- AnimalMuppet 5y ago
  Stronger: Since the wealthy will always be better connected, you don't get to structure the rules. They do.
AnimalMuppet 5y ago
Wealthy = assets. Taxes typically are on income, not assets. Better question: Do America's 400 highest-earning families pay a lower tax rate than the average taxpayer? I mean, it still could be the same answer, because in any given year, the highest earners may well have a large chunk of it from capital gains. But at least it's an apples-to-apples comparison (until we implement a wealth tax).
eyeball 5y ago
how much wealth do the 400 richest families own? how would the income distribution change if it were 100% confiscated and distributed to everyone else evenly?
- AnimalMuppet 5y ago
  It would change at least this much: The next 400 richest families would immediately move themselves and their assets to somewhere that didn't confiscate like that.
alexitorg 5y ago
I don't know the answer here. But this analysis includes a "comprehensive measure of their income that includes income from unsold stock". Should unsold stock (or land value) gains be taxed? A couple of problems I can think of: Fluctuations in stock values. From 1986 yo 2019 stocks have increased up to 37% and decreased by up 22% in a year (1). Dillution of ownership: If you taxed stock values over time, founders would have their ownership rate dilluted over time. Is it desirable to have founders automatically lose their majority share over time? e.g. I'm thinking of the effect of a 3% wealth tax. The analysis doesn't include company taxes: If a company is taxed at 21% of it's profits. Should this count towards the tax paid by the richest? Should investments in capacity/capital be taxed at the same rate as profit. Often a company increases in value as it reinvests its income in productive assets. Should that be encouraged and given a tax break or not? My current thinking is the 20th century system worked well before companies with strong network effects started making monopoly type profits and globalization allowed companies to invest surpluses outside of their home markets changed the game. (1) https://www.thebalance.com/stock-market-returns-by-year-2388543 https://www.thebalance.com/stock-market-returns-by-year-2388...

12 points by ScottMann 5y ago

There is something seriously wrong here. A better job needs to be done.

Solution: cut taxes for average taxpayers, balancing the budget by cutting spending. Everyone has a favorite program, so to make it politically easy, just cut every program by the same rate. At the turn of the last century, government spending was something around 3% of GDP. Today, it's about 36%. This figure goes way up whenever there is a new war or entitlement program. It can be cut.

sjtindell 5y ago

The problem is that no matter how you structure the rules, the wealthy will always be 1. connected and 2. able to hire the best accountants in the world. It’s impossible to get that money from them in my opinion. Your best hope is to incentivize them to spend it somehow.

AnimalMuppet 5y ago
Stronger: Since the wealthy will always be better connected, you don't get to structure the rules. They do.

AnimalMuppet 5y ago

Wealthy = assets. Taxes typically are on income, not assets. Better question: Do America's 400 highest-earning families pay a lower tax rate than the average taxpayer? I mean, it still could be the same answer, because in any given year, the highest earners may well have a large chunk of it from capital gains. But at least it's an apples-to-apples comparison (until we implement a wealth tax).

eyeball 5y ago

how much wealth do the 400 richest families own? how would the income distribution change if it were 100% confiscated and distributed to everyone else evenly?

AnimalMuppet 5y ago
It would change at least this much: The next 400 richest families would immediately move themselves and their assets to somewhere that didn't confiscate like that.

alexitorg 5y ago

I don't know the answer here. But this analysis includes a "comprehensive measure of their income that includes income from unsold stock". Should unsold stock (or land value) gains be taxed? A couple of problems I can think of: Fluctuations in stock values. From 1986 yo 2019 stocks have increased up to 37% and decreased by up 22% in a year (1). Dillution of ownership: If you taxed stock values over time, founders would have their ownership rate dilluted over time. Is it desirable to have founders automatically lose their majority share over time? e.g. I'm thinking of the effect of a 3% wealth tax. The analysis doesn't include company taxes: If a company is taxed at 21% of it's profits. Should this count towards the tax paid by the richest? Should investments in capacity/capital be taxed at the same rate as profit. Often a company increases in value as it reinvests its income in productive assets. Should that be encouraged and given a tax break or not? My current thinking is the 20th century system worked well before companies with strong network effects started making monopoly type profits and globalization allowed companies to invest surpluses outside of their home markets changed the game. (1) https://www.thebalance.com/stock-market-returns-by-year-2388543 https://www.thebalance.com/stock-market-returns-by-year-2388...