4 ms·

The top 1% of households in the US starts around $10M. That sounds like a lot, but consider it includes retirement accounts, value of a home etc. For a couple

The top 1% of households in the US starts around $10M. That sounds like a lot, but consider it includes retirement accounts, value of a home etc. For a couple in that bracket at about retirement age (and who might own their home and be expecting to retire on their savings), those people might be looking at a household income of $300-400K per year. I don't know, but it seems pretty unreasonable to start hitting them with an extra $120K tax bill annually. This is again the basic point that the other poster was making.

Epa095 3y ago
$10M sounds like a lot, because it is a lot. It's so much that if you make the median US income, you have to make it for ~300 years -tax free- to save up $10M. It's 50 years, tax free, on a good developer salary. It's so much that with 5% interest rate you can pay those $120k in tax and still get $380k a year, placing you among the top 5% wage earners in the US, while doing nothing more than own. Is so much, that when I dream about becoming independently wealthy, the amount I dream of is half of it. For people in retirement age it's even more obvious that it's a lof of money. Like, how do you even spend that much money before you die? As you probably understand by now, I definitely don't think it's unreasonable to hit them with an extra $120K bill a year, because $10M is a lot of money for any individual, or couple, to own.
- NovemberWhiskey 3y ago
  I mean, sure if you completely ignore investment returns; otherwise your numbers are bogus. The “safe” rate of retirement drawdown is generally accepted as 4% because inflation, bad years in the markets etc. In case it isn’t obvious, taxing wealth is basically taxing the older people in society, because they had more of a chance to accumulate wealth. Hitting people at retirement with a 25% marginal tax increase is just wrong and an unworkable policy proposal. Piketty’s proposal may work in countries with functional pension schemes, but not in the U.S. where personal wealth accumulation is necessary to extent a solid middle class lifestyle into retirement.
  - Epa095 3y ago
    Use 4% then. You're left with 280k (400-120) a year. That's 9 times the median US income, and very close to being in the top 5% income. Not to mention that capital tax is usually lower than income tax. Even ignoring investment returns completely, $10M is enough for anyone to live extremely comfortable the rest of their life, just using this money! Taxing the very rich (as the top 1% is) is reasonable, also when they are retired. You speak as if the money itself can't be used, only the returns. As if it's somehow 'not a lot of money' if it's not possible to live indefinitely on the capital gains alone. But I agree that it's unworkable, but only because this is a powerfull group (wealth is power after all). I think it's completely unrealistic for that reason alone. But it's a good idea, and $10M is a lot of money.
abeppu 3y ago
Would the crudest flat rate scheme be unappealing to people just above the threshold to which it applies? Sure. I don't think anyone's seriously advocating for Bezos and the successful small business owner to be paying the same rate. AnthonyMouse created a strawman to fight; getting from "very wealthy" to "only the top 100 billionaires" is kinda crazy. To use that to assert that the math just doesn't work on using a wealth tax to fund universal inheritance is kinda untenable. I think "wealthier than 99% of people in a rich country" is fair to call "very wealthy" but I can see how others would differ. I also hope you can see how the person with >10M in net worth would not be happy to pay 1.2% but can likely swing it (and under this crude hypothetical, stops paying it if they fall to merely being richer than 98.9% of their peers), but that the 100k would be life-changing and transformative for young people. Piketty's proposals for a wealth tax have varied over the years, but have at points in the past included 1% above 1M euros, 2% above 5M euros, 5-10% above 1B euros. He's trying to re-imagine a more equal society; the redistribution can't be small.

Epa095 3y ago

$10M sounds like a lot, because it is a lot. It's so much that if you make the median US income, you have to make it for ~300 years -tax free- to save up $10M. It's 50 years, tax free, on a good developer salary. It's so much that with 5% interest rate you can pay those $120k in tax and still get $380k a year, placing you among the top 5% wage earners in the US, while doing nothing more than own. Is so much, that when I dream about becoming independently wealthy, the amount I dream of is half of it. For people in retirement age it's even more obvious that it's a lof of money. Like, how do you even spend that much money before you die? As you probably understand by now, I definitely don't think it's unreasonable to hit them with an extra $120K bill a year, because $10M is a lot of money for any individual, or couple, to own.

NovemberWhiskey 3y ago
I mean, sure if you completely ignore investment returns; otherwise your numbers are bogus. The “safe” rate of retirement drawdown is generally accepted as 4% because inflation, bad years in the markets etc. In case it isn’t obvious, taxing wealth is basically taxing the older people in society, because they had more of a chance to accumulate wealth. Hitting people at retirement with a 25% marginal tax increase is just wrong and an unworkable policy proposal. Piketty’s proposal may work in countries with functional pension schemes, but not in the U.S. where personal wealth accumulation is necessary to extent a solid middle class lifestyle into retirement.
- Epa095 3y ago
  Use 4% then. You're left with 280k (400-120) a year. That's 9 times the median US income, and very close to being in the top 5% income. Not to mention that capital tax is usually lower than income tax. Even ignoring investment returns completely, $10M is enough for anyone to live extremely comfortable the rest of their life, just using this money! Taxing the very rich (as the top 1% is) is reasonable, also when they are retired. You speak as if the money itself can't be used, only the returns. As if it's somehow 'not a lot of money' if it's not possible to live indefinitely on the capital gains alone. But I agree that it's unworkable, but only because this is a powerfull group (wealth is power after all). I think it's completely unrealistic for that reason alone. But it's a good idea, and $10M is a lot of money.

abeppu 3y ago

Would the crudest flat rate scheme be unappealing to people just above the threshold to which it applies? Sure. I don't think anyone's seriously advocating for Bezos and the successful small business owner to be paying the same rate. AnthonyMouse created a strawman to fight; getting from "very wealthy" to "only the top 100 billionaires" is kinda crazy. To use that to assert that the math just doesn't work on using a wealth tax to fund universal inheritance is kinda untenable. I think "wealthier than 99% of people in a rich country" is fair to call "very wealthy" but I can see how others would differ. I also hope you can see how the person with >10M in net worth would not be happy to pay 1.2% but can likely swing it (and under this crude hypothetical, stops paying it if they fall to merely being richer than 98.9% of their peers), but that the 100k would be life-changing and transformative for young people. Piketty's proposals for a wealth tax have varied over the years, but have at points in the past included 1% above 1M euros, 2% above 5M euros, 5-10% above 1B euros. He's trying to re-imagine a more equal society; the redistribution can't be small.