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Excepting star-power labor (professional athletes, entertainers), most of the income in the upper tax brackets goes to the owners of capital. When stocks pay di
by solatic 5y ago
Excepting star-power labor (professional athletes, entertainers), most of the income in the upper tax brackets goes to the owners of capital. When stocks pay dividends, the dividends are taxed as income. If you raise taxes on upper-tax-bracket income, you just promote stock-based compensation instead: compensation in stock options (which are taxed as capital gains when realized, not income), stock buy-backs instead of issuing dividends (again, capital gains rather than income), etc.
The long-term capital gains tax rate, for those in high tax brackets, is 20%.
Go ahead, set the income tax rate for high tax brackets to seventy percent. It won't actually make a difference.
- ChicagoDave 5y agoThen you have to tax stock-based income. Any employee acquiring stocks must report it one time as income and get taxed on it. No capitalism back doors. However we figure it out, the wealthy need to pay more into annual tax revenues. A functioning society requires a large and happy middle class, affordable liberal arts college, strong K-12 teaching, and time off.
- Ankaios 5y agoAnother option to address the same basic issue is to fix estate taxes, which might be an easier fix. (Among other things, change the cost basis for the estate taxes to be the price when the asset was originally acquired, not the price when it was transferred to the inheritor.) Either way, I agree that it's critical to close the routes to avoiding taxes.
- datavirtue 5y agoBefore the stock yields anything the corporation is taxed. To follow that, allowing unprofitable companies to be publicly traded is corruption. As others have mentioned above, we are also suffering from a lack of financial regulations.