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USA generally has lower tax burden than other nations, but I don't think taxes on the bottom 90% need to change so much, the issue is in the massive surplus of
by jollybean 5y ago
USA generally has lower tax burden than other nations, but I don't think taxes on the bottom 90% need to change so much, the issue is in the massive surplus of those earning capital gains.
Surplus in California is not generated via income. It's capital gains - I think we need to rethink that.
i.e. what Picketty has been saying for a decade.
... and real estate in particular due to historically low interest rates.
- mrep 5y agoCalifornia taxes capital gains as a source of income without the IRS’s differentiation between long-term or short-term gains so they are one and the same to California.
- dragonwriter 5y ago> Surplus in California is not generated via income. It's capital gains Capital gains are income (just income that is federally taxed at a lower rate than “regular” income which, due to payroll taxes, is in turn taxes a lower rate than labor income.) Because investors > people getting money from random sources > workers.
- jollybean 5y agoCapital gains are traditionally taxed at a lower rate due to the risk involved. Businesses can carry over losses and get a tax shield from it, individuals cannot. One solution to the problem may be to make it so that if individuals want to claim capital gains, they have to do it in a separate account - maybe something that every bank can offer as easily as a chequing account. And allow gains looses to be rolled over or something like that - but while taxing at a higher rate. It'd be a neat idea to simplify the system and get institutional buy in so that everyone just has simple accounts: current, retirement, cap gains, and transactions on them are recorded in a way that taxes can be filed just with that data alone.