22 ms·

Tax the rich. That is the fastest way to get excess money from inflation out of the system. All of the rhetoric about $1400 checks being the problem is just s

Tax the rich. That is the fastest way to get excess money from inflation out of the system. All of the rhetoric about $1400 checks being the problem is just smoke and mirrors. The trillions of dollars of PPP loans, money printing for corporations, etc. was the real problem. That excess money needs to be taken back and wealth taxes would do it.

deleted 3y ago
[deleted]
Justin_K 3y ago
Every year there are new "tax the rich" plans and some become law. Over the long haul, the government just blows the money and asks for more. Theses schemes are easy to sell to the voters but all they really do is let the government spend and waste more.
- 58028641 3y ago
  When have we taxed the rich?
  - kevdragon6 3y ago
    In 2020: Top 1% paid 42% of all collected income taxes. (1.5 million tax payers paid $722 Billion) Bottom 50% paid 2.25% (78 million tax payers paid $1.7 Billion) https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...
    - sroussey 3y ago
      The top 1% of that 1% pay almost nothing. This is what gets people all riled up about. And the 99% of the top 1% are the ones that pay. Mostly because it expensive to get around taxes, something the 1% of the 1% can easily afford.
      - qzw 3y ago
        It's not just the expense of getting around taxes, but also the difference in sources of income. If most of the income is on a W-2, there are just not as many ways to get around any income taxes. But if it's mostly business or investment income, that's like Minecraft for accountants.
      - cronix 3y ago
        And a lot of people always throws around terms like "almost nothing" without defining it in terms of actual dollars. Is it like 50M is nothing compared to their 10B net worth? What are we talking about/comparing here?
        sroussey 3y ago
        Trump paid zero for years. Privately, I know how to make investment income go to zero if you have enough of it. It’s all rather fascinating. Really, the top 5% of the top 1% could do it. But if you have less than $1m income (or cap gains), then it’s likely not worth it.
    - grogenaut 3y ago
      how much did those top 1% make in income out of the total?
      - _huayra_ 3y ago
        I'm glad you pointed this out. The parent comment to yours is the equivalent of people seeing a big red map of the US during the presidential race and saying "how come the Democrats win when there's so much red?!", as if land can vote -_-
        rmk 3y ago
        In America, land can vote, although not in the Presidential election. The Senate.
        jjeaff 3y ago
        Still not land voting. Seeing as RI gets the same number of votes as AK. And both senate candidates are selected by popular vote in the state, so even if most of the state is red, big blue cities can swing the vote.
        jack_squat 3y ago
        RI has the same approximate population as AK. What people mean when they say land votes, is AK compared to NY. AK has a population of < 1M while NY has a population of > 8 million. Proportionally, Alaskans have > 8x the representation in the senate that New Yorkers have.
        jjeaff 3y ago
        I haven't heard people say "land votes" (except in this thread). Only, "land doesn't vote".
        rmk 3y ago
        Not a proportional vote but a territorial vote nonetheless.
    - Caligatio 3y ago
      The trend that is more troubling is the effective tax rate for the 1% of earners is falling (34.47% in 1980 vs 25.99% in 2020) yet their share of total taxes paid is rising (19.05% in 1980 vs 42.31% in 2020). This just highlights the growing income gap between the 1% and everyone else.
      - johngladtj 3y ago
        Or perhaps it's just proving the laffer curve true.
    - oblio 3y ago
      If that's supposed to be some sort of rallying cry in their defense: https://www.youtube.com/watch?v=QPKKQnijnsM https://www.youtube.com/watch?v=QPKKQnijnsM The top 1% had almost 40% of the wealth in the US, in 2012. And that video is from 2012, from before Covid, now it's much, much worse, because since 2020 the top 1% have captured about 66% of the extra wealth created.
      - refurb 3y ago
        The top 1% have 40% of wealth and pay 40% of taxes? Sounds ideal to me.
  - tarsinge 3y ago
    From https://taxfoundation.org/historical-income-tax-rates-brackets/ https://taxfoundation.org/historical-income-tax-rates-bracke... the answer is between 1936 and 1981 (as a high as 90% for the highest bracket from 1941 to 1963).
    - WeylandYutani 3y ago
      Curiously the time conservatives want to go back too. HN is higher income bracket so they don't need the services the government provides- and have the arrogance to call it waste.
      - realjhol 3y ago
        Conservative here. We don't want to go "back" to anything - we reject the Whig history notion of linear history entirely. Rather there are things we want, and things we don't want, and enormous income taxes is decidedly one of the things we don't want.
  - Justin_K 3y ago
    In general the rich pay most taxes: https://www.heritage.org/taxes/commentary/1-chart-how-much-the-rich-pay-taxes https://www.heritage.org/taxes/commentary/1-chart-how-much-t... Rich people pay more property taxes. Rich people pay own companies, which pay corporate taxes. LA just enacted a wealth tax on 5m+ real estate. My point is how many times have we been sold the concept of "if we just bond or tax X, we can solve problem Y". These always turn out to be Big dreams where billions get spent and nothing really gets better. Look at the CA high speed rail diaster. Look at this one... The government sold a bond for homeless housing and raided the money for another project. https://calmatters.org/california-divide/2021/03/california-affordable-housing-bonds-disappear/ https://calmatters.org/california-divide/2021/03/california-... We don't have revenue problems, we have spending problems.
  - rs999gti 3y ago
    capital gains taxes Death tax Top level income tax rates Property taxes Sales taxes And for the self employed - estimated quarterly taxes
- jameslevy 3y ago
  What about the MMT concept of just taxing the rich and "burning" their funds as a targeted method of reducing the money supply?
  - trashtester 3y ago
    That actually sounds closer to Austrian concepts of inflation than MMT. Reducing the money supply in itself doesn't affect consumer prices, if it only affects money that was not in circulation anyway. In order to use taxes to counter inflation (when it is defined as increas in consumer prices), you need to tax those who would otherwise spend most of the money. The most efficient way is to tax the upper middle class.
    - brvsft 3y ago
      I save most of my money, but supposedly I was going to spend it anyway so actually it should be taxed? Infuriating take. Edit: Forgot to mention the obvious, if this is how you feel, why isn't a higher sales tax on certain items ideal? People scoff at sales tax proposals because they'd target the poor, but sales taxes could be implemented progressively too. Tax new cars, smartphones, etc. More expensive items get a higher tax, reducing the impact on poorer people.
      - trashtester 3y ago
        I'm not arguing for or against higher taxes. Just stating what I see about facts about the relationship between taxes and inflation under MMT thinking. (And I'm not a fan of MMT, btw.) Inflation happes when there's an imbalance between supply and demand. MMT argues for increasing deficit spending to fund all sorts of social programs. It also argues that the purpose of taxes is not to "balance the budget", but rather to tamper the inflation that tends to follow overspending. The alternative (increasing interest rates) doesn't work properly under MMT, since treasury bonds cannot have a real interest rate, or the deficit spending would eventually break down. That means that under MMT, purchasing power of consumers must be pulled back using taxation of various sorts, which only works if you tax the consumers. The problem with MMT (the way I see it) is that adjusting taxes to regulate inflation is probably an even more painful approach for most people than using the interest rate. Anyway, the fact you need to tax the actual consumers to fund social programs remains the same, even in more traditional social democratic/keynsian approaches, even if they use the interest rate to regulate inflation. If you look at northern Europe (where I live), taxes on the middle class are much higher than in the US. They're also higher for the poor, but with the increased social benefits, free healthcare, etc, it matters less for them. Oh, btw, a lot of the taxes collected ARE, as you propose, collected as sales or luxery taxes, as well as employers taxes (hidden income taxes) Where I live, the direct income tax is "only" around 45%. However, the base sales tax is 25%. The employers tax (tax on employers for paying salaries, in other words a hidden income tax) is 25% (if you make more than $100k). For some items, such as cars, fuel, alcohol, tobacco, cosmetics, sugar/candy, etc, there are additional taxes, often well over 100% of the base cost. All-in-all, I suppose, out of the salaray budget that my employer allocates to me, 75-80% ends up as taxes, somehow. And I'm middle class, not rich and not poor. If the left in the US really wants to have a European style welfare state, this is about the level that allows for that. If given the facts about this, I doubt many American's would want to switch. On the other hand, few people over here would want to switch in the other direction, too, since they're used to the taxes and the benefits they buy.
- an-allen 3y ago
  Justin, I don't know who you are but I’m so glad you are there. Ive be bombarded with tax the rich posts on a variety of my news outlets and theres always this echo chamber of supporters who are incapable of understanding that taxes just end up bloating the inefficiency of governments. If we really are about taking wealthy folks money, we are much better off if that capital enters the economy without government clipping the ticket. Here is Elon Musks 1 billion dollars in taxes. With his 1 billion dollars we can fund a wide ranging web of wasteful bureaucrats, or we can let Elon use his 1 billion to fund a capital project that generates jobs, technological advances, and builds a product that can be exported worldwide so that there is a positive impact on GDP. I prefer 1 billion of Elon capital projects over 1 billion of government programmes Every. Day. Of. The. Year.
closeparen 3y ago
Inflation is excess demand for goods and services. We raise interest rates in an inflationary environment because we want people to accumulate wealth in the form of financial assets instead of spending on real things. Raising taxes on high-income people could help if it goes far enough that we actually reduce our consumption. High income people have low marginal propensity to consume - that’s why it’s better to give regular people money when you want stimulus. Tax hikes targeted at the very high income would have to be very steep, or they’d just be absorbed by lower savings rates. As long as we’re entertaining weird taxes, progressive consumption tax is probably what you want here. Special sales taxes on big ticket luxury items (cars, boats, watches, etc) could also do the same thing a little less elegantly but in a more familiar way.
- bugglebeetle 3y ago
  Much of inflation is being driven-by corporate concentration, so the answer is to not tax wealthy individuals but corporate profits at much higher rates: https://scholarworks.umass.edu/econ_workingpaper/343/ https://scholarworks.umass.edu/econ_workingpaper/343/
  - Scoundreller 3y ago
    > not tax wealthy individuals but corporate profits at much higher rates Most wealthy individuals would take a haircut if corporate holdings were worth less. It mostly has the same effect. It's not like Bill Gates has all of his wealth in cash.
    - bugglebeetle 3y ago
      Sure, but the parent was talking about how taxing wealthy individuals would not tame inflation because of their (relatively) small impact on demand. The same is not true about how corporate profits filter back into the economy.
- VagueMag 3y ago
  > We raise interest rates in an inflationary environment because we want people to accumulate wealth in the form of financial assets instead of spending on real things. Yes and no. The Fed has a not-so-subtle goal of taming inflation in part by capping asset prices with its interest rate hikes.
speakfreely 3y ago
> Tax the rich. How do you define rich?
- 0xy 3y ago
  His income + $1
  - blitzar 3y ago
    Unironically I have watched this repeat out amongst friends and colleagues all my life. People with $5 million homes that are below average (but consider themselves to be about average globally at least) because there are houses worth 10 mil in the same street.
  - refurb 3y ago
    An alcoholic is someone who has one more drink than i do.
- saddd 3y ago
  Granular progressive taxation is the best answer to your question. Trying to define buckets with arbitrary thresholds is futile. It greatly benefits the top outliers, since the top bucket will have a huge disparity between its strictly defined lower bounds, and an infinite upper bound. There's no need to "define rich". A formula without defined bounds (this is the most important part) should determine how much tax you pay, and it shouldn't discriminate between different forms of income. More importantly, all net worth gains should be taxed equally.
  - Izkata 3y ago
    Pretty sure they're getting at what the wealth is stored in, not monetary bounds. Those are the details that often get ignored when the "tax the rich" soundbite is used.
  - deleted 3y ago
    [deleted]
  - 3y ago
devoutsalsa 3y ago
In my opinion… Wealth taxes are a not the best idea. Being taxed on something illiquid that can’t generate cash flow is the pinnacle of dumb taxation. For example, you have a piece of art. You’d have to sell something just to hold onto the art, and if you don’t have anything to sell, you’d have to sell the art itself just to pay for ownership of the art. It would make some sense to increase capital gains taxes instead of slapping people with a wealth tax. I say this as someone that would not be hit by a wealth tax. Also, the rich can simply move assets out of the country, and then you erode the very thing you want to tax.
- Spooky23 3y ago
  Didn’t say wealth tax, just tax. Taxing unrealized gains would be dumb. It’s pretty easy, hit dividends, income for social security and Medicare purposes without caps, etc. Eliminate deductions for margin interest, tax filing, legal, other fees. Put an excise tax on LLC formation and annual reporting, and require an annual filing of beneficial owners of corporate entities. Charge a higher fee for foreign and corporate owners.
  - r00fus 3y ago
    These are really good solid ideas that would also have a lot of popular support. Basically take all the loopholes that the .01% use and close or disadvantage them so they don't use them (or as much). Rich still get richer but the system stabilizes.
- TexanFeller 3y ago
  > Being taxed on something illiquid that can’t generate cash flow is the pinnacle of dumb taxation My house isn't very liquid, can't generate revenue very effectively, and I'm taxed every year on its current value. Guess us regular folks are already subject to a wealth tax.
  - devoutsalsa 3y ago
    You can rent out real estate. House hacking, Airbnb, boring rental, etc.
ursuscamp 3y ago
You’re implicitly admitting that “taxing the rich” will slow the economy and destroy demand.
TexanFeller 3y ago
> All of the rhetoric about $1400 checks being the problem is just smoke and mirrors. It was far more than $1400 checks. Student loans are STILL paused for goodness sakes. $3000/yr per child given to families. The enhanced unemployment checks were larger than regular checks for some people - even my wife who makes Ok money broke even without having to work for several months. For a couple years there was 2.5% 30yr mortgage financing and refinancing for everyone. That's just off the top if my head. It wasn't all for corporations, an insane amount of cash was thrown at regular people.
s1artibartfast 3y ago
Actually, you would have to tax the middle class. The rich are not driving inflation from consumption, the middle class is. The top 1% has 40% of the wealth, but they aren't buying 40% of groceries, gas, and consumer goods. Money sitting in a bank accounts doesn't drive inflation, consumers spending money does.
- Xeoncross 3y ago
  > The top 1% has 40% of the wealth ... Money sitting in a bank accounts I can assure you, the wealthy are not keeping their net worth under a mattress. They are purchasing and paying for assets like property and businesses. Not that they can't have cash they are waiting to deploy (AAPL, MSFT, & GOOG sure do) but they are wealthy because they own assets and use that to purchase other assets.
  - s1artibartfast 3y ago
    I totally agree that the money isn't in a mattress, but it might as well be for the impacts on inflation. Inflation is driven by consumers ability and willingness to pay higher prices. The 1% are not walking into the supermarket and buying up all the butter and driving up prices
    - Xeoncross 3y ago
      Inflation is because of the money printing. We have the same amount of assets, but suddenly there is over triple the amount of money floating around. More demand, but the same supply of resources means prices go up. Take a look at the feds balance sheet in 2008 and compare with now (https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL) It's no surprise we've had a bull run for over ten years.
      - s1artibartfast 3y ago
        Again, I agree with most everything of what you say, but how it connects to inflation. Printing money only leads to consumer good inflation when it circulates and gets into consumer hands. If you print the money and put it in the incinerator, you have no inflation. If you put it in a mattress, no inflation. If you print money and put it in APPL stock, no inflation. However, When you pay nurses, construction workers, software devs, and other workers, then you get consumer goods inflation. The problem with printing money is the trickle down effect. Like you said, it is supply and demand. AAPL corp or Jeff Bezos are not walking into a grocery store and buying all the butter. Prices go up when your worker is willing to pay more for butter. For some reason, many people think that if only we taxed the rich and gave it to workers to spend, then the price of butter would go down in the market. This is insane.
Xeoncross 3y ago
The $300,000,000 of stimulus checks was to ensure the population would pass the $6,100,000,000,000 of funding. It worked great, every tax payer got a few thousand and an indirect +$40,000 tax bill (the government has to get money from tax payers for it) they will be paying out PLUS inflation and other side-effects for years to come. Props to the rich for figuring out how to bait the people.
deleted 3y ago
[deleted]

deleted 3y ago

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Justin_K 3y ago

Every year there are new "tax the rich" plans and some become law. Over the long haul, the government just blows the money and asks for more. Theses schemes are easy to sell to the voters but all they really do is let the government spend and waste more.

58028641 3y ago
When have we taxed the rich?
- kevdragon6 3y ago
  In 2020: Top 1% paid 42% of all collected income taxes. (1.5 million tax payers paid $722 Billion) Bottom 50% paid 2.25% (78 million tax payers paid $1.7 Billion) https://taxfoundation.org/publications/latest-federal-income-tax-data/ https://taxfoundation.org/publications/latest-federal-income...
  - sroussey 3y ago
    The top 1% of that 1% pay almost nothing. This is what gets people all riled up about. And the 99% of the top 1% are the ones that pay. Mostly because it expensive to get around taxes, something the 1% of the 1% can easily afford.
    - qzw 3y ago
      It's not just the expense of getting around taxes, but also the difference in sources of income. If most of the income is on a W-2, there are just not as many ways to get around any income taxes. But if it's mostly business or investment income, that's like Minecraft for accountants.
    - cronix 3y ago
      And a lot of people always throws around terms like "almost nothing" without defining it in terms of actual dollars. Is it like 50M is nothing compared to their 10B net worth? What are we talking about/comparing here?
      - sroussey 3y ago
        Trump paid zero for years. Privately, I know how to make investment income go to zero if you have enough of it. It’s all rather fascinating. Really, the top 5% of the top 1% could do it. But if you have less than $1m income (or cap gains), then it’s likely not worth it.
  - grogenaut 3y ago
    how much did those top 1% make in income out of the total?
    - _huayra_ 3y ago
      I'm glad you pointed this out. The parent comment to yours is the equivalent of people seeing a big red map of the US during the presidential race and saying "how come the Democrats win when there's so much red?!", as if land can vote -_-
      - rmk 3y ago
        In America, land can vote, although not in the Presidential election. The Senate.
        jjeaff 3y ago
        Still not land voting. Seeing as RI gets the same number of votes as AK. And both senate candidates are selected by popular vote in the state, so even if most of the state is red, big blue cities can swing the vote.
        jack_squat 3y ago
        RI has the same approximate population as AK. What people mean when they say land votes, is AK compared to NY. AK has a population of < 1M while NY has a population of > 8 million. Proportionally, Alaskans have > 8x the representation in the senate that New Yorkers have.
        jjeaff 3y ago
        I haven't heard people say "land votes" (except in this thread). Only, "land doesn't vote".
        rmk 3y ago
        Not a proportional vote but a territorial vote nonetheless.
  - Caligatio 3y ago
    The trend that is more troubling is the effective tax rate for the 1% of earners is falling (34.47% in 1980 vs 25.99% in 2020) yet their share of total taxes paid is rising (19.05% in 1980 vs 42.31% in 2020). This just highlights the growing income gap between the 1% and everyone else.
    - johngladtj 3y ago
      Or perhaps it's just proving the laffer curve true.
  - oblio 3y ago
    If that's supposed to be some sort of rallying cry in their defense: https://www.youtube.com/watch?v=QPKKQnijnsM https://www.youtube.com/watch?v=QPKKQnijnsM The top 1% had almost 40% of the wealth in the US, in 2012. And that video is from 2012, from before Covid, now it's much, much worse, because since 2020 the top 1% have captured about 66% of the extra wealth created.
    - refurb 3y ago
      The top 1% have 40% of wealth and pay 40% of taxes? Sounds ideal to me.
- tarsinge 3y ago
  From https://taxfoundation.org/historical-income-tax-rates-brackets/ https://taxfoundation.org/historical-income-tax-rates-bracke... the answer is between 1936 and 1981 (as a high as 90% for the highest bracket from 1941 to 1963).
  - WeylandYutani 3y ago
    Curiously the time conservatives want to go back too. HN is higher income bracket so they don't need the services the government provides- and have the arrogance to call it waste.
    - realjhol 3y ago
      Conservative here. We don't want to go "back" to anything - we reject the Whig history notion of linear history entirely. Rather there are things we want, and things we don't want, and enormous income taxes is decidedly one of the things we don't want.
- Justin_K 3y ago
  In general the rich pay most taxes: https://www.heritage.org/taxes/commentary/1-chart-how-much-the-rich-pay-taxes https://www.heritage.org/taxes/commentary/1-chart-how-much-t... Rich people pay more property taxes. Rich people pay own companies, which pay corporate taxes. LA just enacted a wealth tax on 5m+ real estate. My point is how many times have we been sold the concept of "if we just bond or tax X, we can solve problem Y". These always turn out to be Big dreams where billions get spent and nothing really gets better. Look at the CA high speed rail diaster. Look at this one... The government sold a bond for homeless housing and raided the money for another project. https://calmatters.org/california-divide/2021/03/california-affordable-housing-bonds-disappear/ https://calmatters.org/california-divide/2021/03/california-... We don't have revenue problems, we have spending problems.
- rs999gti 3y ago
  capital gains taxes Death tax Top level income tax rates Property taxes Sales taxes And for the self employed - estimated quarterly taxes
jameslevy 3y ago
What about the MMT concept of just taxing the rich and "burning" their funds as a targeted method of reducing the money supply?
- trashtester 3y ago
  That actually sounds closer to Austrian concepts of inflation than MMT. Reducing the money supply in itself doesn't affect consumer prices, if it only affects money that was not in circulation anyway. In order to use taxes to counter inflation (when it is defined as increas in consumer prices), you need to tax those who would otherwise spend most of the money. The most efficient way is to tax the upper middle class.
  - brvsft 3y ago
    I save most of my money, but supposedly I was going to spend it anyway so actually it should be taxed? Infuriating take. Edit: Forgot to mention the obvious, if this is how you feel, why isn't a higher sales tax on certain items ideal? People scoff at sales tax proposals because they'd target the poor, but sales taxes could be implemented progressively too. Tax new cars, smartphones, etc. More expensive items get a higher tax, reducing the impact on poorer people.
    - trashtester 3y ago
      I'm not arguing for or against higher taxes. Just stating what I see about facts about the relationship between taxes and inflation under MMT thinking. (And I'm not a fan of MMT, btw.) Inflation happes when there's an imbalance between supply and demand. MMT argues for increasing deficit spending to fund all sorts of social programs. It also argues that the purpose of taxes is not to "balance the budget", but rather to tamper the inflation that tends to follow overspending. The alternative (increasing interest rates) doesn't work properly under MMT, since treasury bonds cannot have a real interest rate, or the deficit spending would eventually break down. That means that under MMT, purchasing power of consumers must be pulled back using taxation of various sorts, which only works if you tax the consumers. The problem with MMT (the way I see it) is that adjusting taxes to regulate inflation is probably an even more painful approach for most people than using the interest rate. Anyway, the fact you need to tax the actual consumers to fund social programs remains the same, even in more traditional social democratic/keynsian approaches, even if they use the interest rate to regulate inflation. If you look at northern Europe (where I live), taxes on the middle class are much higher than in the US. They're also higher for the poor, but with the increased social benefits, free healthcare, etc, it matters less for them. Oh, btw, a lot of the taxes collected ARE, as you propose, collected as sales or luxery taxes, as well as employers taxes (hidden income taxes) Where I live, the direct income tax is "only" around 45%. However, the base sales tax is 25%. The employers tax (tax on employers for paying salaries, in other words a hidden income tax) is 25% (if you make more than $100k). For some items, such as cars, fuel, alcohol, tobacco, cosmetics, sugar/candy, etc, there are additional taxes, often well over 100% of the base cost. All-in-all, I suppose, out of the salaray budget that my employer allocates to me, 75-80% ends up as taxes, somehow. And I'm middle class, not rich and not poor. If the left in the US really wants to have a European style welfare state, this is about the level that allows for that. If given the facts about this, I doubt many American's would want to switch. On the other hand, few people over here would want to switch in the other direction, too, since they're used to the taxes and the benefits they buy.
an-allen 3y ago
Justin, I don't know who you are but I’m so glad you are there. Ive be bombarded with tax the rich posts on a variety of my news outlets and theres always this echo chamber of supporters who are incapable of understanding that taxes just end up bloating the inefficiency of governments. If we really are about taking wealthy folks money, we are much better off if that capital enters the economy without government clipping the ticket. Here is Elon Musks 1 billion dollars in taxes. With his 1 billion dollars we can fund a wide ranging web of wasteful bureaucrats, or we can let Elon use his 1 billion to fund a capital project that generates jobs, technological advances, and builds a product that can be exported worldwide so that there is a positive impact on GDP. I prefer 1 billion of Elon capital projects over 1 billion of government programmes Every. Day. Of. The. Year.

closeparen 3y ago

Inflation is excess demand for goods and services. We raise interest rates in an inflationary environment because we want people to accumulate wealth in the form of financial assets instead of spending on real things. Raising taxes on high-income people could help if it goes far enough that we actually reduce our consumption. High income people have low marginal propensity to consume - that’s why it’s better to give regular people money when you want stimulus. Tax hikes targeted at the very high income would have to be very steep, or they’d just be absorbed by lower savings rates. As long as we’re entertaining weird taxes, progressive consumption tax is probably what you want here. Special sales taxes on big ticket luxury items (cars, boats, watches, etc) could also do the same thing a little less elegantly but in a more familiar way.

bugglebeetle 3y ago
Much of inflation is being driven-by corporate concentration, so the answer is to not tax wealthy individuals but corporate profits at much higher rates: https://scholarworks.umass.edu/econ_workingpaper/343/ https://scholarworks.umass.edu/econ_workingpaper/343/
- Scoundreller 3y ago
  > not tax wealthy individuals but corporate profits at much higher rates Most wealthy individuals would take a haircut if corporate holdings were worth less. It mostly has the same effect. It's not like Bill Gates has all of his wealth in cash.
  - bugglebeetle 3y ago
    Sure, but the parent was talking about how taxing wealthy individuals would not tame inflation because of their (relatively) small impact on demand. The same is not true about how corporate profits filter back into the economy.
VagueMag 3y ago
> We raise interest rates in an inflationary environment because we want people to accumulate wealth in the form of financial assets instead of spending on real things. Yes and no. The Fed has a not-so-subtle goal of taming inflation in part by capping asset prices with its interest rate hikes.

speakfreely 3y ago

> Tax the rich. How do you define rich?

0xy 3y ago
His income + $1
- blitzar 3y ago
  Unironically I have watched this repeat out amongst friends and colleagues all my life. People with $5 million homes that are below average (but consider themselves to be about average globally at least) because there are houses worth 10 mil in the same street.
- refurb 3y ago
  An alcoholic is someone who has one more drink than i do.
saddd 3y ago
Granular progressive taxation is the best answer to your question. Trying to define buckets with arbitrary thresholds is futile. It greatly benefits the top outliers, since the top bucket will have a huge disparity between its strictly defined lower bounds, and an infinite upper bound. There's no need to "define rich". A formula without defined bounds (this is the most important part) should determine how much tax you pay, and it shouldn't discriminate between different forms of income. More importantly, all net worth gains should be taxed equally.
- Izkata 3y ago
  Pretty sure they're getting at what the wealth is stored in, not monetary bounds. Those are the details that often get ignored when the "tax the rich" soundbite is used.
- deleted 3y ago
  [deleted]
- 3y ago

devoutsalsa 3y ago

In my opinion… Wealth taxes are a not the best idea. Being taxed on something illiquid that can’t generate cash flow is the pinnacle of dumb taxation. For example, you have a piece of art. You’d have to sell something just to hold onto the art, and if you don’t have anything to sell, you’d have to sell the art itself just to pay for ownership of the art. It would make some sense to increase capital gains taxes instead of slapping people with a wealth tax. I say this as someone that would not be hit by a wealth tax. Also, the rich can simply move assets out of the country, and then you erode the very thing you want to tax.

Spooky23 3y ago
Didn’t say wealth tax, just tax. Taxing unrealized gains would be dumb. It’s pretty easy, hit dividends, income for social security and Medicare purposes without caps, etc. Eliminate deductions for margin interest, tax filing, legal, other fees. Put an excise tax on LLC formation and annual reporting, and require an annual filing of beneficial owners of corporate entities. Charge a higher fee for foreign and corporate owners.
- r00fus 3y ago
  These are really good solid ideas that would also have a lot of popular support. Basically take all the loopholes that the .01% use and close or disadvantage them so they don't use them (or as much). Rich still get richer but the system stabilizes.
TexanFeller 3y ago
> Being taxed on something illiquid that can’t generate cash flow is the pinnacle of dumb taxation My house isn't very liquid, can't generate revenue very effectively, and I'm taxed every year on its current value. Guess us regular folks are already subject to a wealth tax.
- devoutsalsa 3y ago
  You can rent out real estate. House hacking, Airbnb, boring rental, etc.

ursuscamp 3y ago

You’re implicitly admitting that “taxing the rich” will slow the economy and destroy demand.

TexanFeller 3y ago

> All of the rhetoric about $1400 checks being the problem is just smoke and mirrors. It was far more than $1400 checks. Student loans are STILL paused for goodness sakes. $3000/yr per child given to families. The enhanced unemployment checks were larger than regular checks for some people - even my wife who makes Ok money broke even without having to work for several months. For a couple years there was 2.5% 30yr mortgage financing and refinancing for everyone. That's just off the top if my head. It wasn't all for corporations, an insane amount of cash was thrown at regular people.

s1artibartfast 3y ago

Actually, you would have to tax the middle class. The rich are not driving inflation from consumption, the middle class is. The top 1% has 40% of the wealth, but they aren't buying 40% of groceries, gas, and consumer goods. Money sitting in a bank accounts doesn't drive inflation, consumers spending money does.

Xeoncross 3y ago
> The top 1% has 40% of the wealth ... Money sitting in a bank accounts I can assure you, the wealthy are not keeping their net worth under a mattress. They are purchasing and paying for assets like property and businesses. Not that they can't have cash they are waiting to deploy (AAPL, MSFT, & GOOG sure do) but they are wealthy because they own assets and use that to purchase other assets.
- s1artibartfast 3y ago
  I totally agree that the money isn't in a mattress, but it might as well be for the impacts on inflation. Inflation is driven by consumers ability and willingness to pay higher prices. The 1% are not walking into the supermarket and buying up all the butter and driving up prices
  - Xeoncross 3y ago
    Inflation is because of the money printing. We have the same amount of assets, but suddenly there is over triple the amount of money floating around. More demand, but the same supply of resources means prices go up. Take a look at the feds balance sheet in 2008 and compare with now (https://fred.stlouisfed.org/series/WALCL https://fred.stlouisfed.org/series/WALCL) It's no surprise we've had a bull run for over ten years.
    - s1artibartfast 3y ago
      Again, I agree with most everything of what you say, but how it connects to inflation. Printing money only leads to consumer good inflation when it circulates and gets into consumer hands. If you print the money and put it in the incinerator, you have no inflation. If you put it in a mattress, no inflation. If you print money and put it in APPL stock, no inflation. However, When you pay nurses, construction workers, software devs, and other workers, then you get consumer goods inflation. The problem with printing money is the trickle down effect. Like you said, it is supply and demand. AAPL corp or Jeff Bezos are not walking into a grocery store and buying all the butter. Prices go up when your worker is willing to pay more for butter. For some reason, many people think that if only we taxed the rich and gave it to workers to spend, then the price of butter would go down in the market. This is insane.

Xeoncross 3y ago

The $300,000,000 of stimulus checks was to ensure the population would pass the $6,100,000,000,000 of funding. It worked great, every tax payer got a few thousand and an indirect +$40,000 tax bill (the government has to get money from tax payers for it) they will be paying out PLUS inflation and other side-effects for years to come. Props to the rich for figuring out how to bait the people.

deleted 3y ago

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