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Millionaires group calls for wealth tax at virtual Davos

34 points by dane-pgp 5y ago

dane-pgp 5y ago
> While that spurred more than 130 countries to agree a deal to ensure big companies pay a global minimum tax rate of 15%, aimed at making it harder for them to avoid taxation, the millionaires said the wealthy still needed to contribute more. For too long we've let the supporters of inequality get away with arguments like "Well if you increased taxes on the rich / corporations, they'd just move somewhere else". While such claims may be true up to a point, they miss the fact that these coordination problems can be solved, even in the face of vested interests trying to profit off defecting from the common good.
- pdonis 5y ago
  > the supporters of inequality Opposing taxation is not the same as "supporting inequality". In fact, considering where the bulk of government spending goes, giving the government less to spend would probably reduce inequality.
  - dane-pgp 5y ago
    > giving the government less to spend would probably reduce inequality. If you have some data comparing inequality and tax revenue (as a percentage of GDP) for countries around the world, I'd love to see if there is some sort of correlation. Of course, a correlation wouldn't prove causation, but it would give me more confidence in what policy to support than your "probably".
- sva_ 5y ago
  Yeah that tax can't come soon enough, and I think it will happen at this point. It's probably too little, but a good start. I wonder if there have ever been any calculations for different countries, on how much they've missed out through this kind of tax evasion that has been going on. It's probably hard to quantify, but I'd still be curious to know in what ballpark it might be.
  - nightski 5y ago
    Are you in the U.S.? If so what specifically do you feel that tax revenue is going to do for you? The government is currently running a $1T-$1.5T deficit, meaning they haven't cared about tax revenue as it relates to spending in quite some time. I'd love to reduce wealth inequality but I just don't think throwing all that money at the government is a viable path towards that goal.
    - wolverine876 5y ago
      So what solution do you offer? It's just reactionary to oppose a solution. The anti-government stuff needs some support and nuance. Government isn't all good or bad; it is what we want it to be. If we want it to invest in our people, such as through education, health care, housinng, etc., nothing is stopping us. We're not powerless at all.
      - AnthonyMouse 5y ago
        The government giving you $100 for school is strictly worse than the government just giving you $100. You can spend it on school if you want to go to school, on housing if you want better housing, on child care if you need child care, or on whatever it is that you need. Which you know better than a committee of politicians who have never even met you. For anyone paying more than zero taxes, this is the same as a $100 tax cut. For anyone who is paying zero taxes, we can still do the same thing by giving them a tax credit (e.g. increase the EITC) and letting their effective rate be negative. This is better than subsidizing student loans (thereby inflating the cost of college) or any of the other bad ideas politicians have had over the years. But it forecloses the majority of political corruption. Which is why it's good, and also why it's unpopular.
        wolverine876 5y ago
        > Which you know better than a committee of politicians who have never even met you. If you haven't met your local elected representatives, that might be on you. It's not hard to meet them, and usually IME they make an effort to know voters. > The government giving you $100 for school is strictly worse than the government just giving you $100. We the people might be willing to fund schooling, but not other things. Regardless, I tend to agree with giving cash for charitable purposes. But where is this coming from? Who disagreed? > Which is why it's good, and also why it's unpopular. How do you know that? School vouchers are popular, and people could have said the same about them. These rants about government - that we see commonly - are somehow given a pass for establishing a factual basis and making strong arguments. But they don't really say much except express frustration.
- wolverine876 5y ago
  > For too long we've let the supporters of inequality get away with arguments like ... They always have arguments, but history shows that we can successfully tax wealthy people. It's not hard.
  - AnthonyMouse 5y ago
    This is not historically accurate. Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. But that's also around when we stopped enforcing antitrust, which is where the recent concentration of wealth actually came from.
    - wolverine876 5y ago
      > Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly.
      - AnthonyMouse 5y ago
        > I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The main problem with IRS audits is that they choose taxpayers at random to be subject to an expensive time consuming audit which the taxpayer doesn't get reimbursed for even if the IRS finds nothing wrong with their returns. Small business owners are generally the ones this happens to because they're the ones who exceed the income threshold to get audited and they're the ones with complicated tax returns that are expensive to audit. Democrats have figured out that if they encourage this, Republicans have to spend political capital preventing it or their constituents get really mad. This could be easily solved by having the government pay the taxpayer's time and expenses for the audit, but neither party really wants to do that because it would "cost money." (It costs money either way, but that way it would have to be formally accounted for and spread evenly among taxpayers instead of subjecting random unlucky ones to a disproportionate expense.) But tax evasion is different than tax avoidance. One is illegal, the other is restructuring your activities to minimize your taxes while still complying with the law, e.g. by arranging for profits to accumulate in a subsidiary in a country with a low tax rate. It's typically the latter that corporations and rich people do to have low tax burdens. > The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly. Before the 1980s the highest nominal tax rates were higher, but nobody actually paid them because there were so many loopholes. People were literally deducting the cost of their personal vehicle from their taxes etc. They closed the loopholes and lowered the top rates at the same time, which basically canceled out. Federal revenues as a percent of GDP have been essentially flat since the end of WWII: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S
- AnthonyMouse 5y ago
  The fundamental question nobody wants to answer is what is corporate tax supposed to be on? People keep saying "profit," but it's an international supply chain. Is the "profit" attributable to the jurisdiction where the product is designed? Where it's manufactured? Where it's sold? They're all in different countries. There is no principled way to attribute a specific portion of the profit to a specific thing -- they're each inherently necessary in order to make the money. Nobody wants to say "we are going to tax them in the place where they make the products" because then low tax jurisdictions would have a huge advantage to attract manufacturing. But it's the same thing if you say you're going to tax them in the place where the product is designed or sold or anything else. Making a choice allows them to arbitrage that choice. But not making a choice is even worse because then they get to arbitrage everything. The best one is to tax them where the customers are, because it's really hard to move the customers. But then "corporate tax" is just VAT. Which everybody hates specifically because it works, and therefore causes lower retirement account returns and higher consumer prices by the combined amount of money which is now going to the government. And that's really what the problem is. To have it not wreck the economy the change needs to be revenue neutral. Combine it with a tax cut for the working class in the same amount. Because then you might actually do something good. But most of the people asking for it are asking for it because they want to spend more money.
- vecplane 5y ago
  Not true - nations compete to attract talent and capital, and one means of attracting these things is lower taxes and favorable regulations. Are you arguing that nations should stop competing for talent and capital, because the taxes get a little too low in some places?
- mohanmcgeek 5y ago
  > these coordination problems can be solved If you focus too much on _punishing_ the companies rather than solving real problems such as government finance, you'll end up with ridiculous ideas like this. If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. AND even if that weren't the case, I as the sovereign, get to decide how much the tax should be. Not a bunch of edicts from people who can't run their own finances properly.
  - imtringued 5y ago
    >If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. Are you sure, what about a potential competing country that reduces taxes to 9%? The paradox of competition states that you will get none of the benefits of increased competition in a zero sum game like this. Taxes will be cut to 0%. So you can now either get rid of corporate taxes entirely or form a global consensus. The former is preferable but it would require land value taxes which are an even bigger threat to the rich than corporate taxes which are just a formality that is easily avoided. > Not a bunch of edicts from people who can't run their own finances properly. It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit?
    - mohanmcgeek 5y ago
      > what about a potential competing country that reduces taxes to 9%? If a country can manage its finances just fine while taxing corporations at 9%, what about them? > Taxes will be cut to 0%. As unrealistic as it sounds, this is bad exactly how? > It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit? No point in arguing with you then.
MarkMarine 5y ago
They must really be worried about some alternative to propose this.
- deleted 5y ago
  [deleted]
- timbit42 5y ago
  They're afraid of being eaten.
nikkinana 5y ago
They don't need a tax, they can just give their money away. What's up with taxes?
- wolverine876 5y ago
  Taxes are democratically controlled allocation of resources. We the people get together and decide what we want to do collectively. Wealthy people giving away their money is aristocracy or oligarchy, centering power in the wealthy - corrupt, and a threat to democracy and free markets.
  - vecplane 5y ago
    Democracy is two wolves and sheep voting on what's for dinner. The voting majority does not necessarily have a right to my property because they said so.
    - dane-pgp 5y ago
      You only have "a right to [your] property" because the voting majority agreed that that right should exist. Also, if democracy is two wolves and a sheep voting on what's for dinner, what do you think would happen in that situation if the wolves abandoned voting?
      - vecplane 5y ago
        Not so - property rights are a large part of human rights, inherent to being human. Others may ignore your rights and abuse your freedoms, but that does not make it acceptable, and it doesn't mean those rights and freedoms don't exist. The wolves and sheep are aggressors and prey. Your hypothetical is an analogy for theft - the majority 'taking' what it wants by disregarding the rights and freedoms of the minority.
        dane-pgp 5y ago
        > property rights are a large part of human rights "Human rights" isn't an excuse to not pay taxes, nor do they even forbid progressive tax policies. > Your hypothetical is an analogy for theft (For the avoidance of doubt, I am against theft and in favour of democracy, so I agree that my hypothetical of the wolves abandoning democracy was not something I thought would lead to a better societal outcome.) A society which accepts the principle of private property might agree that certain "taking" is theft, but a society can equally decide that the "taking" of tax payments is not theft. Just because a group is a minority and strongly opposes what the majority want, doesn't make the minority's desire inherently more moral than that of the majority, even if they express their desire in terms of "rights and freedoms".
jokethrowaway 5y ago
I can't wait to see what loophole they will find next to pay 0% and offload all these taxes to small businesses as usual. If they really cared they could just donate the money to the governments or, even better, donate to charities / setup a charity which will probably spend the money a little bit better than the government. This is just a new rule they want so they can say "Hey, we're good, this rule says we're paying taxes".
mercy_dude 5y ago
If anyone thinks people in Davis are for the common people and reducing their wealth difference with the elites, they are delusional. This group exists for one and one reason alone. That is to maintain the hegemony.
- benreesman 5y ago
  Perhaps the hegemony includes people smart enough and well-versed in history enough to understand that wealth inequality is rapidly becoming the greatest threat to the stability of the system that serves them so well. You can’t spend money with your neck in a guillotine.
jonplackett 5y ago
Can we just set capital gains tax at the same progressive rates as income tax? That would be an easy start.
- mistermann 5y ago
  This has a dependency on politicians tabling it and passing it, and with few exceptions and outside of rhetoric, the majority of politicians have demonstrated that they are "generally ok" with the way things are. This Davos suggestion seems to have a dependency on the voluntary generosity of the donors. Considering this, I think it would be pragmatic if the peoples of the world started having a serious group dialogue to start brainstorming and discussing the merits of some policy responses that we could take independent of government decision and implementation. Perhaps this would be a decent way to kick off some centralized implementation of direct democracy as I'd think a big chunk of the population is interested in this topic and it would be preferable to be able to capture metrics on preferences for various proposals.
- timbit42 5y ago
  It really is ridiculous that labour income is taxed more heavily than passive income. It should be the other way around.
rhacker 5y ago
Is it no longer possible to push wealth down through employees? Or is the business architecture so exacting now that it is literally impossible for a large company to funnel money anywhere but up? I suspect that the ladder is true. And this is because the money not funneling up is funneling out.
dogma1138 5y ago
Can you even get into Davos as a millionaire? I would guess that the PA/EAs of some private sector attendees have a 7 figures net worth…
vecplane 5y ago
Would the USA be better off by taxing people like Elon based on some percentage of his wealth? Does that include only his cash holdings, or real estate, or vested stock, or options, or other non-liquid assets and investments? Or is it better to let people like Elon do what he thinks is best with that capital? I'll side with Elon on this one.
- wolverine876 5y ago
  Should we just let rich people make decisions for the rest of us, for the country? If you think so, you can vote for them in elections. But power comes from us, not from whoever strikes it rich. It's not all or nothing, of course; Musk has plenty of resources regardless.
  - vecplane 5y ago
    I'm not arguing for that at all. I'm arguing that you don't have a right to other people's property just because they have a lot of it.
    - wolverine876 5y ago
      Who says otherwise? That is not the basis of taxation; the basis is we all have to chip in and make an equal sacrifice for the things we collectively decide. Musk has as much right to my money as I do to Musk's.
      - vecplane 5y ago
        Neither has any right to each other's property without consent.
        wolverine876 5y ago
        All taxation is void? And every other means of the same? What if you lose a civil suit against me?
- 5y ago
bigodbiel 5y ago
make us pay more taxes” is ironic. If they wanted to pay “more taxes” they could just as easily stop avoiding taxation (they’d even save up on lobbyists and tax lawyers). But then their rivals who disagree would continue their tax avoidance schemes, becoming wealthier than these “patriotic millionaires” and even, god forbid, forcing them (or their children) to work for the formers!
- wolverine876 5y ago
  Who in this group of people is avoiding taxes? It serves the interests of the status quo - and it's a well-trodden means of doing it - to attack the messenger rather than address the message.
  - wing-_-nuts 5y ago
    The same folks that argue for an overly complicated tax system with tons of loopholes. We should vastly simplify and eliminate most deductions. Taxes are a mechanism for funding the government, it should not be a tool used to encourage one behavior over another. We should have progressive tax system simple enough that my tax return should be able to fit on a post card.
    - wolverine876 5y ago
      So who in this group is arguing for an overly complicated tax system?
      - wing-_-nuts 5y ago
        Most of the .1%? Everyone that pays capital gains tax rates. Everyone that runs a business and gets to write off a ton of deductions? I could go on, but the loopholes are innumerable.
        wolverine876 5y ago
        But we are talking about the group in the OP. Have any of them advocated for it?
lend000 5y ago
In the US, there is a very thorough system for measuring the movement of money, and the tracking of potential income sources. Why not use the system we have, when much of modern wealth inequality can be explained by income tax brackets, instead of creating an extremely intrusive new boondoggle to measure everything everyone owns? (How does the government really know you are eligible for the wealth tax if you are not under some additional surveillance?) It's a rhetorical question: a wealth tax signals that you are doing something big, as opposed to caring about solving the problem. Someone like Bernie Sanders probably doesn't know any better, but Elizabeth Warren certainly does, and supports it anyway. The wealthiest pay 20% on capital gains, while the middle class pays an effective 30%+ federally when including social security, and that's just federal. Stretch out capital gains tax brackets and normal income tax brackets, such that nobody in the previous tax year would have made more than 10x the highest tax bracket. For example, you might have a 65% tax on capital gains above $1billion (which is a 5% discount on normal income of the same amount). Not as sexy, but now you have truly progressive taxes and the problem is more or less under control. This is likely applicable to many other countries. To close some more loopholes, count collateralization of assets as a mark-to-market sale (prevent people from lending against assets without paying taxes) and stop the easy money injections into the economy that aim to prevent a short term stock market recession at all costs. Note that the only times in the last few decades that wealth inequality decreased were during recessions [0]. [0] https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:1989.3,2021.3;quarter:128;series:Net%20worth;demographic:networth;population:1;units:levels https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
- wolverine876 5y ago
  > much of modern wealth inequality can be explained by income tax brackets Is that true? Much of wealth is inherited, for example. And once people like Bezos have hundreds of billions, income isn't going to address the issue. Finally, who should pay more tax, a billionaire who makes zero this year, or someone who has nothing and makes their first $50K? > a wealth tax signals that you are doing something big, as opposed to caring about solving the problem Do you have some evidence supporting that accusation? It's easy to make accusations.
uejfiweun 5y ago
I will NEVER vote for a wealth tax. It will inevitably be abused, loopholed, and twisted by the most powerful to preserve the status quo, and it will be the middle and working classes that get screwed by it. The income tax was originally passed as an emergency temporary measure only levied on the top percentages of earners, and over the years it has been contorted to become an enormous extraction of middle class purchasing power while the rich use loopholes like 1 dollar salaries. If a wealth tax is passed then I am absolutely certain that the same thing would happen, and the middle class would get screwed even more. It's human nature. And besides, it's freaking Davos that's calling for this... this is just PR. Catharsis.
- gruez 5y ago
  >while the rich use loopholes like 1 dollar salaries explain?
  - AnthonyMouse 5y ago
    You pay income tax on a salary in the year that you receive it. You pay capital gains tax on stock, which is at a lower rate, and don't pay the tax until you sell the stock. So Steve Jobs took a $1 salary but owned billions of dollars in Apple stock, which means when the iPhone came out he made billions of dollars in stock price appreciation and could defer paying any tax indefinitely by not selling the shares. Major executives also commonly make use of the company's private jets etc. for "business purposes" and so get to use them without it being considered taxable income -- and the corporation itself gets to deduct the cost. Meanwhile "business meetings" are so often in Las Vegas or some kind of tropical paradise.
    - gruez 5y ago
      >You pay income tax on a salary in the year that you receive it. You pay capital gains tax on stock, which is at a lower rate, and don't pay the tax until you sell the stock. You're still taxed on the value of the stock at the you received them. The reason why steve jobs had billions in apple stock isn't because apple paid him billions in stocks in the 2000s, it's because he had those shares decades ago when they were worthless. The billions came from appreciation on his part. It's independent of his position as CEO. Framing it as "loopholes like 1 dollar salaries" doesn't make any sense.
Shadonototra 5y ago
money as a currency should be banned universal food, universal healthcare, universal housing everything can be ultra optimized to make this as smooth and self sustainable as possible, we have the tech then we can focus on space exploration and prepare for when this planet will get inhabitable we just thinking like rats with this money, knowing how/who can/should build wealth and profit from some poor dude from Indonesia such a waste of time "me money, me do what i want, me want buy ipad" said the random javascript dude paid 500k a year while teachers are starving and streets all around the big cities are as dirty as some sink hole from bengladesh, full of cancerous cars, we been inhaling their smoke for decades, they know it's bad, they know :) we are literally a useless species
oliwarner 5y ago
$100k on $5m, $250m on $5bn. That's a serious amount on tax on wealth and a surprisingly low bar to entry, if assets are included. Many small business owners would be included. Still, $2.52tn is a hell of an annual development fund. You could do some actual good around the world, fix the climate, feed, clothe and educate the poor.

34 points by dane-pgp 5y ago

> While that spurred more than 130 countries to agree a deal to ensure big companies pay a global minimum tax rate of 15%, aimed at making it harder for them to avoid taxation, the millionaires said the wealthy still needed to contribute more. For too long we've let the supporters of inequality get away with arguments like "Well if you increased taxes on the rich / corporations, they'd just move somewhere else". While such claims may be true up to a point, they miss the fact that these coordination problems can be solved, even in the face of vested interests trying to profit off defecting from the common good.

pdonis 5y ago
> the supporters of inequality Opposing taxation is not the same as "supporting inequality". In fact, considering where the bulk of government spending goes, giving the government less to spend would probably reduce inequality.
- dane-pgp 5y ago
  > giving the government less to spend would probably reduce inequality. If you have some data comparing inequality and tax revenue (as a percentage of GDP) for countries around the world, I'd love to see if there is some sort of correlation. Of course, a correlation wouldn't prove causation, but it would give me more confidence in what policy to support than your "probably".
sva_ 5y ago
Yeah that tax can't come soon enough, and I think it will happen at this point. It's probably too little, but a good start. I wonder if there have ever been any calculations for different countries, on how much they've missed out through this kind of tax evasion that has been going on. It's probably hard to quantify, but I'd still be curious to know in what ballpark it might be.
- nightski 5y ago
  Are you in the U.S.? If so what specifically do you feel that tax revenue is going to do for you? The government is currently running a $1T-$1.5T deficit, meaning they haven't cared about tax revenue as it relates to spending in quite some time. I'd love to reduce wealth inequality but I just don't think throwing all that money at the government is a viable path towards that goal.
  - wolverine876 5y ago
    So what solution do you offer? It's just reactionary to oppose a solution. The anti-government stuff needs some support and nuance. Government isn't all good or bad; it is what we want it to be. If we want it to invest in our people, such as through education, health care, housinng, etc., nothing is stopping us. We're not powerless at all.
    - AnthonyMouse 5y ago
      The government giving you $100 for school is strictly worse than the government just giving you $100. You can spend it on school if you want to go to school, on housing if you want better housing, on child care if you need child care, or on whatever it is that you need. Which you know better than a committee of politicians who have never even met you. For anyone paying more than zero taxes, this is the same as a $100 tax cut. For anyone who is paying zero taxes, we can still do the same thing by giving them a tax credit (e.g. increase the EITC) and letting their effective rate be negative. This is better than subsidizing student loans (thereby inflating the cost of college) or any of the other bad ideas politicians have had over the years. But it forecloses the majority of political corruption. Which is why it's good, and also why it's unpopular.
      - wolverine876 5y ago
        > Which you know better than a committee of politicians who have never even met you. If you haven't met your local elected representatives, that might be on you. It's not hard to meet them, and usually IME they make an effort to know voters. > The government giving you $100 for school is strictly worse than the government just giving you $100. We the people might be willing to fund schooling, but not other things. Regardless, I tend to agree with giving cash for charitable purposes. But where is this coming from? Who disagreed? > Which is why it's good, and also why it's unpopular. How do you know that? School vouchers are popular, and people could have said the same about them. These rants about government - that we see commonly - are somehow given a pass for establishing a factual basis and making strong arguments. But they don't really say much except express frustration.
wolverine876 5y ago
> For too long we've let the supporters of inequality get away with arguments like ... They always have arguments, but history shows that we can successfully tax wealthy people. It's not hard.
- AnthonyMouse 5y ago
  This is not historically accurate. Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. But that's also around when we stopped enforcing antitrust, which is where the recent concentration of wealth actually came from.
  - wolverine876 5y ago
    > Tax avoidance was worse in the past than it is now. Many of the loopholes were closed in the 1980s. I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly.
    - AnthonyMouse 5y ago
      > I'm pretty sure the first statement is false, as IRS enforcement has been cut back and tax evasion is at record levels, which was the basis if a recent attempt to fund enforcement (rejected by the GOP who want to 'defund the IRS'). The main problem with IRS audits is that they choose taxpayers at random to be subject to an expensive time consuming audit which the taxpayer doesn't get reimbursed for even if the IRS finds nothing wrong with their returns. Small business owners are generally the ones this happens to because they're the ones who exceed the income threshold to get audited and they're the ones with complicated tax returns that are expensive to audit. Democrats have figured out that if they encourage this, Republicans have to spend political capital preventing it or their constituents get really mad. This could be easily solved by having the government pay the taxpayer's time and expenses for the audit, but neither party really wants to do that because it would "cost money." (It costs money either way, but that way it would have to be formally accounted for and spread evenly among taxpayers instead of subjecting random unlucky ones to a disproportionate expense.) But tax evasion is different than tax avoidance. One is illegal, the other is restructuring your activities to minimize your taxes while still complying with the law, e.g. by arranging for profits to accumulate in a subsidiary in a country with a low tax rate. It's typically the latter that corporations and rich people do to have low tax burdens. > The 1980s tax law changes greatly reduced the portion paid by the wealthy, if I understand correctly. Before the 1980s the highest nominal tax rates were higher, but nobody actually paid them because there were so many loopholes. People were literally deducting the cost of their personal vehicle from their taxes etc. They closed the loopholes and lowered the top rates at the same time, which basically canceled out. Federal revenues as a percent of GDP have been essentially flat since the end of WWII: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S
AnthonyMouse 5y ago
The fundamental question nobody wants to answer is what is corporate tax supposed to be on? People keep saying "profit," but it's an international supply chain. Is the "profit" attributable to the jurisdiction where the product is designed? Where it's manufactured? Where it's sold? They're all in different countries. There is no principled way to attribute a specific portion of the profit to a specific thing -- they're each inherently necessary in order to make the money. Nobody wants to say "we are going to tax them in the place where they make the products" because then low tax jurisdictions would have a huge advantage to attract manufacturing. But it's the same thing if you say you're going to tax them in the place where the product is designed or sold or anything else. Making a choice allows them to arbitrage that choice. But not making a choice is even worse because then they get to arbitrage everything. The best one is to tax them where the customers are, because it's really hard to move the customers. But then "corporate tax" is just VAT. Which everybody hates specifically because it works, and therefore causes lower retirement account returns and higher consumer prices by the combined amount of money which is now going to the government. And that's really what the problem is. To have it not wreck the economy the change needs to be revenue neutral. Combine it with a tax cut for the working class in the same amount. Because then you might actually do something good. But most of the people asking for it are asking for it because they want to spend more money.
vecplane 5y ago
Not true - nations compete to attract talent and capital, and one means of attracting these things is lower taxes and favorable regulations. Are you arguing that nations should stop competing for talent and capital, because the taxes get a little too low in some places?
mohanmcgeek 5y ago
> these coordination problems can be solved If you focus too much on _punishing_ the companies rather than solving real problems such as government finance, you'll end up with ridiculous ideas like this. If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. AND even if that weren't the case, I as the sovereign, get to decide how much the tax should be. Not a bunch of edicts from people who can't run their own finances properly.
- imtringued 5y ago
  >If I'm running a country and every other country in the world is taxing someone at 15% and i currently get $0, why shouldn't I offer to tax them at 10% if they moved their business to my shores? I get something instead of nothing plus other sources of taxation _because_ they're in my shore. Are you sure, what about a potential competing country that reduces taxes to 9%? The paradox of competition states that you will get none of the benefits of increased competition in a zero sum game like this. Taxes will be cut to 0%. So you can now either get rid of corporate taxes entirely or form a global consensus. The former is preferable but it would require land value taxes which are an even bigger threat to the rich than corporate taxes which are just a formality that is easily avoided. > Not a bunch of edicts from people who can't run their own finances properly. It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit?
  - mohanmcgeek 5y ago
    > what about a potential competing country that reduces taxes to 9%? If a country can manage its finances just fine while taxing corporations at 9%, what about them? > Taxes will be cut to 0%. As unrealistic as it sounds, this is bad exactly how? > It is mathematically impossible to run government finances properly. Why do you think, does the US have a structural deficit? No point in arguing with you then.

MarkMarine 5y ago

They must really be worried about some alternative to propose this.

deleted 5y ago
[deleted]
timbit42 5y ago
They're afraid of being eaten.

nikkinana 5y ago

They don't need a tax, they can just give their money away. What's up with taxes?

wolverine876 5y ago
Taxes are democratically controlled allocation of resources. We the people get together and decide what we want to do collectively. Wealthy people giving away their money is aristocracy or oligarchy, centering power in the wealthy - corrupt, and a threat to democracy and free markets.
- vecplane 5y ago
  Democracy is two wolves and sheep voting on what's for dinner. The voting majority does not necessarily have a right to my property because they said so.
  - dane-pgp 5y ago
    You only have "a right to [your] property" because the voting majority agreed that that right should exist. Also, if democracy is two wolves and a sheep voting on what's for dinner, what do you think would happen in that situation if the wolves abandoned voting?
    - vecplane 5y ago
      Not so - property rights are a large part of human rights, inherent to being human. Others may ignore your rights and abuse your freedoms, but that does not make it acceptable, and it doesn't mean those rights and freedoms don't exist. The wolves and sheep are aggressors and prey. Your hypothetical is an analogy for theft - the majority 'taking' what it wants by disregarding the rights and freedoms of the minority.
      - dane-pgp 5y ago
        > property rights are a large part of human rights "Human rights" isn't an excuse to not pay taxes, nor do they even forbid progressive tax policies. > Your hypothetical is an analogy for theft (For the avoidance of doubt, I am against theft and in favour of democracy, so I agree that my hypothetical of the wolves abandoning democracy was not something I thought would lead to a better societal outcome.) A society which accepts the principle of private property might agree that certain "taking" is theft, but a society can equally decide that the "taking" of tax payments is not theft. Just because a group is a minority and strongly opposes what the majority want, doesn't make the minority's desire inherently more moral than that of the majority, even if they express their desire in terms of "rights and freedoms".

jokethrowaway 5y ago

I can't wait to see what loophole they will find next to pay 0% and offload all these taxes to small businesses as usual. If they really cared they could just donate the money to the governments or, even better, donate to charities / setup a charity which will probably spend the money a little bit better than the government. This is just a new rule they want so they can say "Hey, we're good, this rule says we're paying taxes".

mercy_dude 5y ago

If anyone thinks people in Davis are for the common people and reducing their wealth difference with the elites, they are delusional. This group exists for one and one reason alone. That is to maintain the hegemony.

benreesman 5y ago
Perhaps the hegemony includes people smart enough and well-versed in history enough to understand that wealth inequality is rapidly becoming the greatest threat to the stability of the system that serves them so well. You can’t spend money with your neck in a guillotine.

jonplackett 5y ago

Can we just set capital gains tax at the same progressive rates as income tax? That would be an easy start.

mistermann 5y ago
This has a dependency on politicians tabling it and passing it, and with few exceptions and outside of rhetoric, the majority of politicians have demonstrated that they are "generally ok" with the way things are. This Davos suggestion seems to have a dependency on the voluntary generosity of the donors. Considering this, I think it would be pragmatic if the peoples of the world started having a serious group dialogue to start brainstorming and discussing the merits of some policy responses that we could take independent of government decision and implementation. Perhaps this would be a decent way to kick off some centralized implementation of direct democracy as I'd think a big chunk of the population is interested in this topic and it would be preferable to be able to capture metrics on preferences for various proposals.
timbit42 5y ago
It really is ridiculous that labour income is taxed more heavily than passive income. It should be the other way around.

rhacker 5y ago

Is it no longer possible to push wealth down through employees? Or is the business architecture so exacting now that it is literally impossible for a large company to funnel money anywhere but up? I suspect that the ladder is true. And this is because the money not funneling up is funneling out.

dogma1138 5y ago

Can you even get into Davos as a millionaire? I would guess that the PA/EAs of some private sector attendees have a 7 figures net worth…

vecplane 5y ago

Would the USA be better off by taxing people like Elon based on some percentage of his wealth? Does that include only his cash holdings, or real estate, or vested stock, or options, or other non-liquid assets and investments? Or is it better to let people like Elon do what he thinks is best with that capital? I'll side with Elon on this one.

wolverine876 5y ago
Should we just let rich people make decisions for the rest of us, for the country? If you think so, you can vote for them in elections. But power comes from us, not from whoever strikes it rich. It's not all or nothing, of course; Musk has plenty of resources regardless.
- vecplane 5y ago
  I'm not arguing for that at all. I'm arguing that you don't have a right to other people's property just because they have a lot of it.
  - wolverine876 5y ago
    Who says otherwise? That is not the basis of taxation; the basis is we all have to chip in and make an equal sacrifice for the things we collectively decide. Musk has as much right to my money as I do to Musk's.
    - vecplane 5y ago
      Neither has any right to each other's property without consent.
      - wolverine876 5y ago
        All taxation is void? And every other means of the same? What if you lose a civil suit against me?
5y ago

bigodbiel 5y ago

make us pay more taxes” is ironic. If they wanted to pay “more taxes” they could just as easily stop avoiding taxation (they’d even save up on lobbyists and tax lawyers). But then their rivals who disagree would continue their tax avoidance schemes, becoming wealthier than these “patriotic millionaires” and even, god forbid, forcing them (or their children) to work for the formers!

wolverine876 5y ago
Who in this group of people is avoiding taxes? It serves the interests of the status quo - and it's a well-trodden means of doing it - to attack the messenger rather than address the message.
- wing-_-nuts 5y ago
  The same folks that argue for an overly complicated tax system with tons of loopholes. We should vastly simplify and eliminate most deductions. Taxes are a mechanism for funding the government, it should not be a tool used to encourage one behavior over another. We should have progressive tax system simple enough that my tax return should be able to fit on a post card.
  - wolverine876 5y ago
    So who in this group is arguing for an overly complicated tax system?
    - wing-_-nuts 5y ago
      Most of the .1%? Everyone that pays capital gains tax rates. Everyone that runs a business and gets to write off a ton of deductions? I could go on, but the loopholes are innumerable.
      - wolverine876 5y ago
        But we are talking about the group in the OP. Have any of them advocated for it?

lend000 5y ago

In the US, there is a very thorough system for measuring the movement of money, and the tracking of potential income sources. Why not use the system we have, when much of modern wealth inequality can be explained by income tax brackets, instead of creating an extremely intrusive new boondoggle to measure everything everyone owns? (How does the government really know you are eligible for the wealth tax if you are not under some additional surveillance?) It's a rhetorical question: a wealth tax signals that you are doing something big, as opposed to caring about solving the problem. Someone like Bernie Sanders probably doesn't know any better, but Elizabeth Warren certainly does, and supports it anyway. The wealthiest pay 20% on capital gains, while the middle class pays an effective 30%+ federally when including social security, and that's just federal. Stretch out capital gains tax brackets and normal income tax brackets, such that nobody in the previous tax year would have made more than 10x the highest tax bracket. For example, you might have a 65% tax on capital gains above $1billion (which is a 5% discount on normal income of the same amount). Not as sexy, but now you have truly progressive taxes and the problem is more or less under control. This is likely applicable to many other countries. To close some more loopholes, count collateralization of assets as a mark-to-market sale (prevent people from lending against assets without paying taxes) and stop the easy money injections into the economy that aim to prevent a short term stock market recession at all costs. Note that the only times in the last few decades that wealth inequality decreased were during recessions [0]. [0] https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/#range:1989.3,2021.3;quarter:128;series:Net%20worth;demographic:networth;population:1;units:levels https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...

wolverine876 5y ago
> much of modern wealth inequality can be explained by income tax brackets Is that true? Much of wealth is inherited, for example. And once people like Bezos have hundreds of billions, income isn't going to address the issue. Finally, who should pay more tax, a billionaire who makes zero this year, or someone who has nothing and makes their first $50K? > a wealth tax signals that you are doing something big, as opposed to caring about solving the problem Do you have some evidence supporting that accusation? It's easy to make accusations.

uejfiweun 5y ago

I will NEVER vote for a wealth tax. It will inevitably be abused, loopholed, and twisted by the most powerful to preserve the status quo, and it will be the middle and working classes that get screwed by it. The income tax was originally passed as an emergency temporary measure only levied on the top percentages of earners, and over the years it has been contorted to become an enormous extraction of middle class purchasing power while the rich use loopholes like 1 dollar salaries. If a wealth tax is passed then I am absolutely certain that the same thing would happen, and the middle class would get screwed even more. It's human nature. And besides, it's freaking Davos that's calling for this... this is just PR. Catharsis.

gruez 5y ago
>while the rich use loopholes like 1 dollar salaries explain?
- AnthonyMouse 5y ago
  You pay income tax on a salary in the year that you receive it. You pay capital gains tax on stock, which is at a lower rate, and don't pay the tax until you sell the stock. So Steve Jobs took a $1 salary but owned billions of dollars in Apple stock, which means when the iPhone came out he made billions of dollars in stock price appreciation and could defer paying any tax indefinitely by not selling the shares. Major executives also commonly make use of the company's private jets etc. for "business purposes" and so get to use them without it being considered taxable income -- and the corporation itself gets to deduct the cost. Meanwhile "business meetings" are so often in Las Vegas or some kind of tropical paradise.
  - gruez 5y ago
    >You pay income tax on a salary in the year that you receive it. You pay capital gains tax on stock, which is at a lower rate, and don't pay the tax until you sell the stock. You're still taxed on the value of the stock at the you received them. The reason why steve jobs had billions in apple stock isn't because apple paid him billions in stocks in the 2000s, it's because he had those shares decades ago when they were worthless. The billions came from appreciation on his part. It's independent of his position as CEO. Framing it as "loopholes like 1 dollar salaries" doesn't make any sense.

Shadonototra 5y ago

money as a currency should be banned universal food, universal healthcare, universal housing everything can be ultra optimized to make this as smooth and self sustainable as possible, we have the tech then we can focus on space exploration and prepare for when this planet will get inhabitable we just thinking like rats with this money, knowing how/who can/should build wealth and profit from some poor dude from Indonesia such a waste of time "me money, me do what i want, me want buy ipad" said the random javascript dude paid 500k a year while teachers are starving and streets all around the big cities are as dirty as some sink hole from bengladesh, full of cancerous cars, we been inhaling their smoke for decades, they know it's bad, they know :) we are literally a useless species

oliwarner 5y ago

$100k on $5m, $250m on $5bn. That's a serious amount on tax on wealth and a surprisingly low bar to entry, if assets are included. Many small business owners would be included. Still, $2.52tn is a hell of an annual development fund. You could do some actual good around the world, fix the climate, feed, clothe and educate the poor.