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The games played by the wealthy and well-advised are largely within the gray areas of tax code buried between legal avoidance and illegal evasion[1]...in other

The games played by the wealthy and well-advised are largely within the gray areas of tax code buried between legal avoidance and illegal evasion[1]...in other words, certain sophisticated behavior remains "legal" if the IRS never gets an opportunity to audit and pursue litigation against. Herein lies the moral hazard bullshit. To tilt these game-theoretic bets overwhelmingly in favor of the wealthy, assert continuous political pressure to defund IRS activity tasked with holding these actors legally accountable while shilling it to the ignorant public with a bullshit title like "Family and Small Business Taxpayer Protection" to bait popular support[2; § 251]. The CBO too is well-advised[3], but the wealthy very much dislike projected outcomes summarized[4] as: > The proposal, by contrast, would return audit rates to the levels of about 10 years ago; the rate would rise for all taxpayers, but higher-income taxpayers would face the largest increase. In addition, the Administration’s policies would focus additional IRS resources on enforcement activity aimed at high-wealth taxpayers, large corporations, and partnerships. [1] https://www.nber.org/papers/w28542 https://www.nber.org/papers/w28542 [2] https://www.congress.gov/bill/118th-congress/house-bill/3746 https://www.congress.gov/bill/118th-congress/house-bill/3746 [3] https://www.cbo.gov/publication/56467 https://www.cbo.gov/publication/56467 [4] https://www.cbo.gov/publication/57444 https://www.cbo.gov/publication/57444

refurb 3y ago
Right, but again, tax revenue hasn't change over time as a percentage of GDP. The government is taking in the same percentage as it was during WW2. And if you look at the percentage of all taxes paid by the wealthy, it's actually grown over time (become more progressive). Of course that doesn't mean that some rich end up paying less than expected, but overall, the data doesn't support the idea that the rich overall aren't paying a substantial amount of taxes.
- metaphor 3y ago
  All this talk of "data" is quickly feeling unmotivated without an ounce of cite. To be sure, use of the terms "progressive" and "substantial" in context here is quite misleading at face value, and every time you handwave this federal receipts as a percentage of GDP metric as if it somehow magically supports an argument that the wealthy are paying their equitable and sustainable share, it comes off even more as disingenuous. We need only disaggregate this total metric and recognize a long declining trend in tax receipts on corporate income as a percentage of GDP[1] to see how such an argument falls flat on its face. Furthermore, we can see from the CBO report previously cited[2] that at the individual income level, the largest gap in tax liabilities by a massive margin is from underreporting of business income, i.e. flow-through from partnerships, S corps, estates and trusts, rent and royalty, farm, and nonfarm proprietor income...and that doesn't even account for the sophisticated evasion that's happening right under our noses as previously mentioned. So if total receipts remain flat (as you point out) while receipts attributable to corporate income are clearly on a declining trend, it begs the question: who/what has been shouldering the implied delta? It should come as no surprise that corporate profits after tax is strongly correlated to public debt as a percentage of GDP[3], of course, with a grift catalyst that comes along every few decades that allows the cart to lead the horse for truly outsized profits before the inevitable reversion to the mean expensed by even more public debt. It should also be unsurprising that when public debt to receipts ratio[4] is levered over 6x with interest rates as high as they are (never mind the $82+ billion and snowballing negative carry by the Fed[5]), negative sentiment brews as private wealth locks in exit liquidity while the rest of the public braces to "socialize losses" in the long run. [1] https://fred.stlouisfed.org/graph/?g=17rUd https://fred.stlouisfed.org/graph/?g=17rUd [2] https://www.cbo.gov/publication/56467#_idTextAnchor018 https://www.cbo.gov/publication/56467#_idTextAnchor018 [3] https://fred.stlouisfed.org/graph/?g=17s68 https://fred.stlouisfed.org/graph/?g=17s68 [4] https://fred.stlouisfed.org/graph/?g=17saE https://fred.stlouisfed.org/graph/?g=17saE [5] https://fred.stlouisfed.org/series/RESPPLLOPNWW https://fred.stlouisfed.org/series/RESPPLLOPNWW
  - refurb 3y ago
    We need only disaggregate this total metric and recognize a long declining trend in tax receipts on corporate income as a percentage of GDP[1] to see how such an argument falls flat on its face. Speaking of handwaving, showing that corporate receipt are down a percentage doesn't negate the argument whatsoever because: 1) corporations aren't people, 2) corporate taxes make up a small part (6%) of total tax burden. Take a look at personal income taxes which are 42% of government revenues. https://taxfoundation.org/top-1-percent-pays-more-taxes-bottom-90-percent/ https://taxfoundation.org/top-1-percent-pays-more-taxes-bott... The percentage of all income taxes paid by the top 1% has increase from ~20% in 1990 to 35% in 2011. The tax burden has gotten more progressive over time, not less.

refurb 3y ago

Right, but again, tax revenue hasn't change over time as a percentage of GDP. The government is taking in the same percentage as it was during WW2. And if you look at the percentage of all taxes paid by the wealthy, it's actually grown over time (become more progressive). Of course that doesn't mean that some rich end up paying less than expected, but overall, the data doesn't support the idea that the rich overall aren't paying a substantial amount of taxes.

metaphor 3y ago
All this talk of "data" is quickly feeling unmotivated without an ounce of cite. To be sure, use of the terms "progressive" and "substantial" in context here is quite misleading at face value, and every time you handwave this federal receipts as a percentage of GDP metric as if it somehow magically supports an argument that the wealthy are paying their equitable and sustainable share, it comes off even more as disingenuous. We need only disaggregate this total metric and recognize a long declining trend in tax receipts on corporate income as a percentage of GDP[1] to see how such an argument falls flat on its face. Furthermore, we can see from the CBO report previously cited[2] that at the individual income level, the largest gap in tax liabilities by a massive margin is from underreporting of business income, i.e. flow-through from partnerships, S corps, estates and trusts, rent and royalty, farm, and nonfarm proprietor income...and that doesn't even account for the sophisticated evasion that's happening right under our noses as previously mentioned. So if total receipts remain flat (as you point out) while receipts attributable to corporate income are clearly on a declining trend, it begs the question: who/what has been shouldering the implied delta? It should come as no surprise that corporate profits after tax is strongly correlated to public debt as a percentage of GDP[3], of course, with a grift catalyst that comes along every few decades that allows the cart to lead the horse for truly outsized profits before the inevitable reversion to the mean expensed by even more public debt. It should also be unsurprising that when public debt to receipts ratio[4] is levered over 6x with interest rates as high as they are (never mind the $82+ billion and snowballing negative carry by the Fed[5]), negative sentiment brews as private wealth locks in exit liquidity while the rest of the public braces to "socialize losses" in the long run. [1] https://fred.stlouisfed.org/graph/?g=17rUd https://fred.stlouisfed.org/graph/?g=17rUd [2] https://www.cbo.gov/publication/56467#_idTextAnchor018 https://www.cbo.gov/publication/56467#_idTextAnchor018 [3] https://fred.stlouisfed.org/graph/?g=17s68 https://fred.stlouisfed.org/graph/?g=17s68 [4] https://fred.stlouisfed.org/graph/?g=17saE https://fred.stlouisfed.org/graph/?g=17saE [5] https://fred.stlouisfed.org/series/RESPPLLOPNWW https://fred.stlouisfed.org/series/RESPPLLOPNWW
- refurb 3y ago
  We need only disaggregate this total metric and recognize a long declining trend in tax receipts on corporate income as a percentage of GDP[1] to see how such an argument falls flat on its face. Speaking of handwaving, showing that corporate receipt are down a percentage doesn't negate the argument whatsoever because: 1) corporations aren't people, 2) corporate taxes make up a small part (6%) of total tax burden. Take a look at personal income taxes which are 42% of government revenues. https://taxfoundation.org/top-1-percent-pays-more-taxes-bottom-90-percent/ https://taxfoundation.org/top-1-percent-pays-more-taxes-bott... The percentage of all income taxes paid by the top 1% has increase from ~20% in 1990 to 35% in 2011. The tax burden has gotten more progressive over time, not less.