3 ms·

Quit taxing the ultra wealthy as if they're some regular joe pulling a yearly salary or hourly wages. Their wealth game is different, so tax them differently.

by bmitc 4y ago

rekabis 4y ago
I have been talking of a Net Worth tax for some time now. Start at a value that is truly eye-watering for your average citizen, one which the lower-99% will never reach in their lifetimes. Say, for argument, $10M. Implement an algorithm that plots out a Sigmoid Curve - 0% taxation at $10M, and increasing slowly at the beginning. Once it gets close to the inflection point, it rises rapidly to over 80% taxation, at which point it then slows down again, reaching 100% taxation for everything above the maximum value. Which would be set at something truly ridiculously high - say, $100M. That way, we have a smooth curve that cannot be “gamed” anywhere as easily as abrupt taxation levels. And we use simpler, market-valued assets from anywhere in the world that focus on how the hyper-wealthy sock away their wealth. As such, any sort of classic investment is most definitely on the table, especially if it is ever valued by an open market. Housing, land, gold, stocks, bonds, business partnerships, you name it. All on board for taxation. The nice thing about Sigmoid curves in a taxation role is that they start off incredibly gentle - you will likely not may much tax at all until you hit $25M of net worth, because it’s paid progressively on any amount above $10M. But at the same time, you pay 100% taxation on any net worth above $100M. It is truly a progressive tax, leaving plenty of room for the ambitious, but is punishingly draconian on the vampiristically greedy.
- hervature 4y ago
  Your whole comment just shows how little you understand about the problem. The problem is not that governments do not know what a "Sigmoid Curve" is. The problem entirely lies in "Net Worth tax". How do you determine net worth? With all the different types of corporations out there, you just move your net worth into an entity that you do not "own". Just like how my work laptop is not mine. If your conclusion is to tax businesses on net worth, that would be easily skirted with international boundaries and drastically lower business creation.
  - ryandrake 4y ago
    > With all the different types of corporations out there, you just move your net worth into an entity that you do not "own". Just like how my work laptop is not mine. This is the big problem with trying to tax the wealthy in America: There are just way too many ways to "not technically own" something, but still in reality be in complete control of it and benefit from it. Trusts, corporations, foundations: All these phony paper entities that you can "move" your stuff into in order to pretend to the government that it's not yours anymore, when it is in all reality totally controlled by you. I worked for a founder once where basically everything he owned and benefitted from was owned by a "charitable foundation" or something. His homes, cars, boats, everything. He probably paid zero in taxes, whereas I, a chump, paid the normal rate. Total scam, but hey, that's what you get when the wealthy write the law.
    - puffoflogic 4y ago
      > All these phony paper entities that you can "move" your stuff into in order to pretend to the government that it's not yours anymore You make it sound like this was something invented by tax -dodging capitalists getting one over on the government. But in reality the only reason paper entities exist at all is because government wills it so.
      - deleted 4y ago
        [deleted]
      - RestlessMind 4y ago
        > because government wills it so. And now you make it sound like tax-dodging capitalists have no influence over a government's will. Welcome to the world of Citizens United, lobbying and such.
- NotYourLawyer 4y ago
  10 million dollars is not that much money.
- strken 4y ago
  The problem with this is it basically just bans everyone from owning a company, and/or puts a limit on the growth of their company. Maybe you want that, but it's going to have weird implications around divesting wealth before the government can get to it and/or disincetivising companies to grow beyond a certain point.
- jjeaff 4y ago
  The problem with those super high rates now is that the super wealthy will just move overseas and renounce their citizenship. So you have to get other countries on board, the super wealthy are far too mobile.
donmcronald 4y ago
And when they complain it’s all “paper wealth”, offer to take that. Let them pay a wealth tax with stocks. Then set up a public trust to manage a huge fund that has a mandate to invest ethically and favor industries that are good for the advancement of everyone, not just the wealthy elite.
- notch898a 4y ago
  The only people I expect to manage wealth worse than greedy execs/capitalists is bureaucrats and politicians. As much as I oppose the idea, if it must be done, the only way I can see the government not squandering and corrupting all the money is to just immediately distribute it amongst the populace.
  - specialist 4y ago
    The arrow points the other way. Government spending is a loan, which is repaid thru taxes. Tax avoidance is the debtor defaulting on that loan. (Both morally and fiscally.)
refurb 4y ago
Exactly. If someone joins a start-up and cashes out with $10M, tax it at 60%, not 20% long-term capital gains. Nobody needs more than $4M.
- mjh2539 4y ago
  $4M at 3% annual interest is $120,000/yr. In some parts of the country (NYC, SF) that is barely enough (or even not enough) to retire on.
  - refurb 4y ago
    Nobody needs so much money they never have to work again. Great, you won the start-up lottery! You've got a nice nest egg, now go back to work. Or, go and move to mid-west and retire. US tax payers don't need to subsidize your lifestyle so you can live in NYC or SF.
    - horns4lyfe 4y ago
      Why?
      - refurb 4y ago
        Because the priority should be people who have nothing.
      - anonymouskimmer 4y ago
        Because the financial priority of the economic regulatory system (which includes taxes) should be the economy. And working people add to the economy much moreso than rich slackers.
  - anonymouskimmer 4y ago
    BS. I live in the SF bay area and we gross less than $100k/year supporting a two person household. $120k/year would be a bit over a 33% raise. Married filing jointly (MFJ) or Single (S) on the $120k/year in capital gains would be: MFJ: 0% up to $83,350. 15% above that amount. For a total tax of $5497.50 in federal taxes. S: 0% up to $41,675. 15% above that amount. For a total tax of $11748.75 in federal taxes. The California tax rates for income or capital gains are: MFJ: $3,623.42 plus 8% of the amount over $104,910. For a total of $4830.62 in state taxes. S: $2,918.91 plus 9.3% of the amount over $66,295. For a total tax of $7913.48 in state taxes. Net, after tax income is: MFJ: $9139.32 per month S: $8361.48 per month These both compare quite favorably to the average ~$6,200 after-tax income my household lives on. And that's without subtracting the $650 additional taken out for the pension (because a person living on interest doesn't need to subtract money for retirement, as they are effectively retired!!). Or the extra $180 or so taken out for other post-tax payroll deductions.

Quit taxing the ultra wealthy as if they're some regular joe pulling a yearly salary or hourly wages. Their wealth game is different, so tax them differently.

by bmitc 4y ago

Quit taxing the ultra wealthy as if they're some regular joe pulling a yearly salary or hourly wages. Their wealth game is different, so tax them differently.

rekabis 4y ago

I have been talking of a Net Worth tax for some time now. Start at a value that is truly eye-watering for your average citizen, one which the lower-99% will never reach in their lifetimes. Say, for argument, $10M. Implement an algorithm that plots out a Sigmoid Curve - 0% taxation at $10M, and increasing slowly at the beginning. Once it gets close to the inflection point, it rises rapidly to over 80% taxation, at which point it then slows down again, reaching 100% taxation for everything above the maximum value. Which would be set at something truly ridiculously high - say, $100M. That way, we have a smooth curve that cannot be “gamed” anywhere as easily as abrupt taxation levels. And we use simpler, market-valued assets from anywhere in the world that focus on how the hyper-wealthy sock away their wealth. As such, any sort of classic investment is most definitely on the table, especially if it is ever valued by an open market. Housing, land, gold, stocks, bonds, business partnerships, you name it. All on board for taxation. The nice thing about Sigmoid curves in a taxation role is that they start off incredibly gentle - you will likely not may much tax at all until you hit $25M of net worth, because it’s paid progressively on any amount above $10M. But at the same time, you pay 100% taxation on any net worth above $100M. It is truly a progressive tax, leaving plenty of room for the ambitious, but is punishingly draconian on the vampiristically greedy.

hervature 4y ago
Your whole comment just shows how little you understand about the problem. The problem is not that governments do not know what a "Sigmoid Curve" is. The problem entirely lies in "Net Worth tax". How do you determine net worth? With all the different types of corporations out there, you just move your net worth into an entity that you do not "own". Just like how my work laptop is not mine. If your conclusion is to tax businesses on net worth, that would be easily skirted with international boundaries and drastically lower business creation.
- ryandrake 4y ago
  > With all the different types of corporations out there, you just move your net worth into an entity that you do not "own". Just like how my work laptop is not mine. This is the big problem with trying to tax the wealthy in America: There are just way too many ways to "not technically own" something, but still in reality be in complete control of it and benefit from it. Trusts, corporations, foundations: All these phony paper entities that you can "move" your stuff into in order to pretend to the government that it's not yours anymore, when it is in all reality totally controlled by you. I worked for a founder once where basically everything he owned and benefitted from was owned by a "charitable foundation" or something. His homes, cars, boats, everything. He probably paid zero in taxes, whereas I, a chump, paid the normal rate. Total scam, but hey, that's what you get when the wealthy write the law.
  - puffoflogic 4y ago
    > All these phony paper entities that you can "move" your stuff into in order to pretend to the government that it's not yours anymore You make it sound like this was something invented by tax -dodging capitalists getting one over on the government. But in reality the only reason paper entities exist at all is because government wills it so.
    - deleted 4y ago
      [deleted]
    - RestlessMind 4y ago
      > because government wills it so. And now you make it sound like tax-dodging capitalists have no influence over a government's will. Welcome to the world of Citizens United, lobbying and such.
NotYourLawyer 4y ago
10 million dollars is not that much money.
strken 4y ago
The problem with this is it basically just bans everyone from owning a company, and/or puts a limit on the growth of their company. Maybe you want that, but it's going to have weird implications around divesting wealth before the government can get to it and/or disincetivising companies to grow beyond a certain point.
jjeaff 4y ago
The problem with those super high rates now is that the super wealthy will just move overseas and renounce their citizenship. So you have to get other countries on board, the super wealthy are far too mobile.

donmcronald 4y ago

And when they complain it’s all “paper wealth”, offer to take that. Let them pay a wealth tax with stocks. Then set up a public trust to manage a huge fund that has a mandate to invest ethically and favor industries that are good for the advancement of everyone, not just the wealthy elite.

notch898a 4y ago
The only people I expect to manage wealth worse than greedy execs/capitalists is bureaucrats and politicians. As much as I oppose the idea, if it must be done, the only way I can see the government not squandering and corrupting all the money is to just immediately distribute it amongst the populace.
- specialist 4y ago
  The arrow points the other way. Government spending is a loan, which is repaid thru taxes. Tax avoidance is the debtor defaulting on that loan. (Both morally and fiscally.)

refurb 4y ago

Exactly. If someone joins a start-up and cashes out with $10M, tax it at 60%, not 20% long-term capital gains. Nobody needs more than $4M.

mjh2539 4y ago
$4M at 3% annual interest is $120,000/yr. In some parts of the country (NYC, SF) that is barely enough (or even not enough) to retire on.
- refurb 4y ago
  Nobody needs so much money they never have to work again. Great, you won the start-up lottery! You've got a nice nest egg, now go back to work. Or, go and move to mid-west and retire. US tax payers don't need to subsidize your lifestyle so you can live in NYC or SF.
  - horns4lyfe 4y ago
    Why?
    - refurb 4y ago
      Because the priority should be people who have nothing.
    - anonymouskimmer 4y ago
      Because the financial priority of the economic regulatory system (which includes taxes) should be the economy. And working people add to the economy much moreso than rich slackers.
- anonymouskimmer 4y ago
  BS. I live in the SF bay area and we gross less than $100k/year supporting a two person household. $120k/year would be a bit over a 33% raise. Married filing jointly (MFJ) or Single (S) on the $120k/year in capital gains would be: MFJ: 0% up to $83,350. 15% above that amount. For a total tax of $5497.50 in federal taxes. S: 0% up to $41,675. 15% above that amount. For a total tax of $11748.75 in federal taxes. The California tax rates for income or capital gains are: MFJ: $3,623.42 plus 8% of the amount over $104,910. For a total of $4830.62 in state taxes. S: $2,918.91 plus 9.3% of the amount over $66,295. For a total tax of $7913.48 in state taxes. Net, after tax income is: MFJ: $9139.32 per month S: $8361.48 per month These both compare quite favorably to the average ~$6,200 after-tax income my household lives on. And that's without subtracting the $650 additional taken out for the pension (because a person living on interest doesn't need to subtract money for retirement, as they are effectively retired!!). Or the extra $180 or so taken out for other post-tax payroll deductions.