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I cannot understand taxation for the sake of taxation. The purpose of taxation is to divert those funds to pay for something. "We want to fund a new healthcare

by alxmng 3y ago

I cannot understand taxation for the sake of taxation. The purpose of taxation is to divert those funds to pay for something. "We want to fund a new healthcare program, so we are going to pay for it by an increase in taxes" makes sense. "We want to tax billionaires because they should pay more tax" does not make any sense.

tombert 3y ago
I don't think that's actually true since the 70s with the introduction of modern monetary theory. If I understand that correctly, taxes serve effectively as a means of decreasing wealth disparity, subtracting money out of the economy, and ensuring that a minimal level of work gets done. They are not a means of paying for things, at least at the federal level. At the state level, where they don't control the money supply, I think it might matter more. I know that MMT is a bit controversial in economic circles, and I am very much not an economist, but that's my understanding.
- deleted 3y ago
  [deleted]
- worik 3y ago
  MMT is mostly magical thinking There is an element of truth
  - tombert 3y ago
    I'll admit that I'm getting my lay-person's understanding of it from "The Deficit Myth" by Stephanie Kelton, who is a real economist but I have no idea how respected she is in the fields of economics.
munificent 3y ago
> The purpose of taxation is to divert those funds to pay for something. That is a purpose of it. But another use of taxation is to act as a counter-balance against the natural property that power is self-reinforcing: When you're rich, that gives the power to increase your wealth. And as that system iterates over time, inequality increases. I think it would be a better world if we taxed the rich more even if we just straight up burned the money. But, also, you can do useful stuff with the money. If nothing else, you can use it to lower taxes on everyone else.
- deleted 3y ago
  [deleted]
- Ographer 3y ago
  Agreed, I see the billionaire tax as a bandaid to the wealth inequality that unchecked capitalism inevitably creates. Our system is built to funnel money away from the average worker and towards the top of management. Over time the boss wages grow and the labor wages shrink relative to the cost of living due to the incentives of those making the rules at the top. This solution seems crude, it takes a slice of money off the top to relieve the tax burden for those at the bottom. It doesn't fix the root cause of inequality but at least it's a patch.
  - _nalply 3y ago
    Why "bandaid"? Or asked differently, how would you fix the root cause of inequality?
    - munificent 3y ago
      I believe wealth tax is the best fix for the root cause of inequality. I see the root cause as being this observation: If you have power, you can use the threat of it to make people do things for you. Wealth is liquid power, and the threat of using it doesn't spend it. The effect of that is that inequality has a natural tendency to grow: those with a little more can use that as leverage to get even more and repeat that process over and over. Widespread progressive taxation is the most effective tool I can think of to act as a damping force on that positive feedback loop.
      - _nalply 3y ago
        I agree. How would you execute a wealth tax? People having power can avoid it by preventing legislation and after legislation by using loopholes.
        munificent 3y ago
lend000 3y ago
I assume there's a jealousy component. That being said, the current tax code is pretty unfair and stupid, but a wealth tax is not the answer. Fixing the tax brackets (which currently top out federally when you earn ~500K or so, instead of increasing exponentially up to the highest earners), and increasing the capital gains (including long term) tax brackets would go a long way to fix the problem. It baffles me when presumably smart people on HN overlook the simple solution and clamor for a wealth tax, which would be incredibly expensive and impractical to implement, require Orwellian surveillance of people's property, and would potentially upend the pattern of having the most productive people in society tying all of their net worth to their company, and not being beholden to short-sighted boards of directors.
- HumblyTossed 3y ago
  > I assume there's a jealousy component. Really? I somehow doubt that. I'm not jealous of Bezos, Musk, etc. With my income, I have money left over after I buy the essentials and the non-essentials. I honestly have no idea what I would even do with a billion dollars except give almost all of it away. I don't want a mansion. I don't want a million dollar sports car. I don't want to pay a captain a full time salary to sit in a marina waiting on me to decide to take a cruise. I don't want any of that. I don't. What I want if for kids to have free lunches and a great education. I want homeless to be taken in and given shelter and food. I wan't everyone to be able to just go see a doctor on a regular basis. Those are things I want. And the wealthy are keeping those things from happening. Either by electing (or being elected) people who won't do it or just not paying fair amount of taxes.
  - sokoloff 3y ago
    What's stopping you from voting for the things you want and voting for your own taxes to go up (and everyone making around the same as or more than you) to pay for it? Why target a few billionaires with an entirely new type of tax system rather than just increasing the rates and decreasing the legal deductions on the system we have now? You already admitted that you have more money than you need? Why not divert that, via taxation, to the things you want?
HumblyTossed 3y ago
> The purpose of taxation is to divert those funds to pay for something. The purpose of taxation is to shape behavior.
- AdrianB1 3y ago
  Not in the Constitution in my country, member of EU. What "EU Tax Observatory" wants is actually against the Constitution here.
TimPC 3y ago
I think it's a bit disingenuous to frame this problem as "we want to tax billionaires because they should pay more tax". While a small minority of people do actually feel that way, realistically the context is just about every government in the world is running a deficit nearly all the time and just about no one wants to lose programs they care about so we need some method of addressing that shortfall. Taxing the people who can most afford it, especially in ways that generate significant government revenue seems like the best solution to many.
barrysteve 3y ago
Tax everyone to slow movement, pull everyone closer together and claw back inflation. The Fed was running on cheap money for a long time, the pendulum swings the other way eventually..
worik 3y ago
Ask some doctors Ask some teachers The lack of cash is not the only problem, but generally it is a big problem
namuol 3y ago
Care to debate the theory behind this particular policy proposal? What problem is it aiming to solve? Is this problem really so bad? Why or why won’t it be effective at solving said problem? Etc. Structuring tax policy to incentivize behaviors deemed economically healthy is nothing new. You may not like this or agree with all the specific policies, but it’s still a thing. Why pretend otherwise? How those revenues are spent are again a matter of debate themselves and another topic altogether.
itishappy 3y ago
What's your tax bracket? Don't answer, but consider if it's higher than the 8% rate paid by America's billionaires.[0] Mine is, and so is that of every engineer, doctor, lawyer, and executive I know. Fast food workers pay 10%. Our taxes have been paying for something all along: yachts! [0] https://www.whitehouse.gov/cea/written-materials/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/ https://www.whitehouse.gov/cea/written-materials/2021/09/23/...
- deleted 3y ago
  [deleted]
avgcorrection 3y ago
Arguing for taxes because of (both) funding things as well as creating a more egalitarian society is absolutely an argument you see made in more social democratic societies (than the US).
lamontcg 3y ago
We've been conditioned to the current levels of revenue in our governments and that everything is "too expensive" to get done. This cuts off any discussion of what can be done by government on the other end and becomes a circular argument.

by alxmng 3y ago

tombert 3y ago

I don't think that's actually true since the 70s with the introduction of modern monetary theory. If I understand that correctly, taxes serve effectively as a means of decreasing wealth disparity, subtracting money out of the economy, and ensuring that a minimal level of work gets done. They are not a means of paying for things, at least at the federal level. At the state level, where they don't control the money supply, I think it might matter more. I know that MMT is a bit controversial in economic circles, and I am very much not an economist, but that's my understanding.

deleted 3y ago
[deleted]
worik 3y ago
MMT is mostly magical thinking There is an element of truth
- tombert 3y ago
  I'll admit that I'm getting my lay-person's understanding of it from "The Deficit Myth" by Stephanie Kelton, who is a real economist but I have no idea how respected she is in the fields of economics.

munificent 3y ago

> The purpose of taxation is to divert those funds to pay for something. That is a purpose of it. But another use of taxation is to act as a counter-balance against the natural property that power is self-reinforcing: When you're rich, that gives the power to increase your wealth. And as that system iterates over time, inequality increases. I think it would be a better world if we taxed the rich more even if we just straight up burned the money. But, also, you can do useful stuff with the money. If nothing else, you can use it to lower taxes on everyone else.

deleted 3y ago
[deleted]
Ographer 3y ago
Agreed, I see the billionaire tax as a bandaid to the wealth inequality that unchecked capitalism inevitably creates. Our system is built to funnel money away from the average worker and towards the top of management. Over time the boss wages grow and the labor wages shrink relative to the cost of living due to the incentives of those making the rules at the top. This solution seems crude, it takes a slice of money off the top to relieve the tax burden for those at the bottom. It doesn't fix the root cause of inequality but at least it's a patch.
- _nalply 3y ago
  Why "bandaid"? Or asked differently, how would you fix the root cause of inequality?
  - munificent 3y ago
    I believe wealth tax is the best fix for the root cause of inequality. I see the root cause as being this observation: If you have power, you can use the threat of it to make people do things for you. Wealth is liquid power, and the threat of using it doesn't spend it. The effect of that is that inequality has a natural tendency to grow: those with a little more can use that as leverage to get even more and repeat that process over and over. Widespread progressive taxation is the most effective tool I can think of to act as a damping force on that positive feedback loop.
    - _nalply 3y ago
      I agree. How would you execute a wealth tax? People having power can avoid it by preventing legislation and after legislation by using loopholes.
      - munificent 3y ago

lend000 3y ago

I assume there's a jealousy component. That being said, the current tax code is pretty unfair and stupid, but a wealth tax is not the answer. Fixing the tax brackets (which currently top out federally when you earn ~500K or so, instead of increasing exponentially up to the highest earners), and increasing the capital gains (including long term) tax brackets would go a long way to fix the problem. It baffles me when presumably smart people on HN overlook the simple solution and clamor for a wealth tax, which would be incredibly expensive and impractical to implement, require Orwellian surveillance of people's property, and would potentially upend the pattern of having the most productive people in society tying all of their net worth to their company, and not being beholden to short-sighted boards of directors.

HumblyTossed 3y ago
> I assume there's a jealousy component. Really? I somehow doubt that. I'm not jealous of Bezos, Musk, etc. With my income, I have money left over after I buy the essentials and the non-essentials. I honestly have no idea what I would even do with a billion dollars except give almost all of it away. I don't want a mansion. I don't want a million dollar sports car. I don't want to pay a captain a full time salary to sit in a marina waiting on me to decide to take a cruise. I don't want any of that. I don't. What I want if for kids to have free lunches and a great education. I want homeless to be taken in and given shelter and food. I wan't everyone to be able to just go see a doctor on a regular basis. Those are things I want. And the wealthy are keeping those things from happening. Either by electing (or being elected) people who won't do it or just not paying fair amount of taxes.
- sokoloff 3y ago
  What's stopping you from voting for the things you want and voting for your own taxes to go up (and everyone making around the same as or more than you) to pay for it? Why target a few billionaires with an entirely new type of tax system rather than just increasing the rates and decreasing the legal deductions on the system we have now? You already admitted that you have more money than you need? Why not divert that, via taxation, to the things you want?

HumblyTossed 3y ago

> The purpose of taxation is to divert those funds to pay for something. The purpose of taxation is to shape behavior.

AdrianB1 3y ago
Not in the Constitution in my country, member of EU. What "EU Tax Observatory" wants is actually against the Constitution here.

TimPC 3y ago

I think it's a bit disingenuous to frame this problem as "we want to tax billionaires because they should pay more tax". While a small minority of people do actually feel that way, realistically the context is just about every government in the world is running a deficit nearly all the time and just about no one wants to lose programs they care about so we need some method of addressing that shortfall. Taxing the people who can most afford it, especially in ways that generate significant government revenue seems like the best solution to many.

barrysteve 3y ago

Tax everyone to slow movement, pull everyone closer together and claw back inflation. The Fed was running on cheap money for a long time, the pendulum swings the other way eventually..

worik 3y ago

Ask some doctors Ask some teachers The lack of cash is not the only problem, but generally it is a big problem

namuol 3y ago

Care to debate the theory behind this particular policy proposal? What problem is it aiming to solve? Is this problem really so bad? Why or why won’t it be effective at solving said problem? Etc. Structuring tax policy to incentivize behaviors deemed economically healthy is nothing new. You may not like this or agree with all the specific policies, but it’s still a thing. Why pretend otherwise? How those revenues are spent are again a matter of debate themselves and another topic altogether.

itishappy 3y ago

What's your tax bracket? Don't answer, but consider if it's higher than the 8% rate paid by America's billionaires.[0] Mine is, and so is that of every engineer, doctor, lawyer, and executive I know. Fast food workers pay 10%. Our taxes have been paying for something all along: yachts! [0] https://www.whitehouse.gov/cea/written-materials/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/ https://www.whitehouse.gov/cea/written-materials/2021/09/23/...

deleted 3y ago
[deleted]

avgcorrection 3y ago

Arguing for taxes because of (both) funding things as well as creating a more egalitarian society is absolutely an argument you see made in more social democratic societies (than the US).

lamontcg 3y ago

We've been conditioned to the current levels of revenue in our governments and that everything is "too expensive" to get done. This cuts off any discussion of what can be done by government on the other end and becomes a circular argument.