7 ms·

Millionaires' Effective Tax Rate Has Been Cut by Half Since Mid-20th Century

99 points by wahnfrieden 3y ago

the_real_cher 3y ago
Not to mention rich people who store their money and assets instead of cash are much less affected by inflation. There's literally zero way I see of America not becoming a third world country in the coming decades.
- VHRanger 3y ago
  First sentence: sure! Second sentence: nonsense!
  - Enginerrrd 3y ago
    Eh... There's some definite risk. The US is dealing with increasing corruption and nepotism, aging infrastructure, sliding standard of living for lower income americans, a shrinking middle class, unsustainable federal debt/spending, and all of those problems are going to be greatly exacerbated by the impending demographics pinch. The question is not so much if we turn into a full 3rd world country, but to what degree our standard of living slips.
    - throwaway5959 3y ago
      What advanced nation isn’t suffering from most of those?
      - shiroiushi 3y ago
        >>The US is dealing with increasing corruption and nepotism, aging infrastructure, sliding standard of living for lower income americans, a shrinking middle class, unsustainable federal debt/spending, and all of those problems are going to be greatly exacerbated by the impending demographics pinch. >What advanced nation isn’t suffering from most of those? Japan. The infrastructure is generally fantastic, and well-maintained (new trains are being built, bridges aren't falling down randomly). Corruption and nepotism isn't increasing from wherever it was before, and is generally low to begin with. The standard of living for lower income people is quite good (everyone has health insurance, healthcare is inexpensive, medical costs for children are all free, living costs are generally low). The middle class isn't shrinking, it's very strong. Government debt is high, but it's all internal (owed to the people), not external. There's a demographics pinch, but every developed nation (plus the US and Russia) has this right now, frequently even worse than here (just look at China and South Korea). There are issues, like any place, (esp. the weak Yen currently) but not like the ones the US faces, nor on the same scale.
        wahnfrieden 3y ago
        Japan is embroiled in a massive corruption scandal
        shiroiushi 3y ago
        I never said it was corruption-free; every country has some corruption. It seems like it's being handled.
  - shiroiushi 3y ago
    Looking at the quality of life, infrastructure, physical safety, proliferation of firearms, etc., the US already looks like a 3rd-world country to me. It's why I moved out.
  - the_real_cher 3y ago
    we're going into 1 trillion dollars of interest PAYMENT debt every 100 days. I don't think the rich people will be the ones who pay the price for this.
- DoreenMichele 3y ago
  Some people have been joking about it being a third world country for years. It's supposedly a great place to live if you're rich. Not so much for a lot of other people living here.
  - grugagag 3y ago
    If you’re rich you can be fine almost anywhere in the world, barring a dictatorship or some war torn region. But if you’re not rich but have just a little bit, life outside of the US has the potential to be way better these days. Unless you work like a mule and don’t mind hustling your way into retirement or death.
- fumar 3y ago
  There is no accountability for the ruling class including political actors in the US. I enjoy the freedoms this country provides but I see risk across the very fabric of society. We are drowning as a country and it's to allow certain sectors or companies to rise indefinitely to the top of the capital market. What solutions can we deploy?
  - grugagag 3y ago
    I think we’re heading for the no solution territory. At least I don’t see politicians miraculously coming to their senses, everything is corrupted beyond repair.
    - over_bridge 3y ago
      Politicians 'come to their senses' when they interact with normal people and are accountable to them. Public funding of elections and bans on large private donations remove the incentive to only talk to rich people. Getting money out of politics needs to be a top priority. If money isn't a factor then all voices become equal and democracy can rear its head once more. I feel like modern presidential campaigns are just two team captains assembling as many billionaires as they can on their team. Biggest net worth team wins
      - grugagag 3y ago
        Ok then and who bans large private donations? Who can take money out of politics? Politicians won’t do it as it isn’t in their interest. It’s catch 22 all the way down. In theory you’re going in the right direction but the reality is stuck somewhere else…
        wahnfrieden 3y ago
        There's certainly no voting solution to that problem. Fleecing the public is a bipartisan effort.
- gravescale 3y ago
  If we're being literal, America can't be a third-word country because it's the very definition of a first-world country per Cold War allegiances.
  - felurx 3y ago
    Congratulations! You have ignored the point OP wanted to make by pointing out the original definition of a term that is used with another meaning nowadays. Is there something you believe this adds to the conversation? (Genuinely asking, because I fail to see it, and I don't want to accuse you of anything based on that.)
    - gravescale 3y ago
      It's, to me, an amusing juxtaposition of the OP claiming to be "literally unable" and the actually literal meaning of the adjacent term being incompatible. And maybe someone would learn that third-world doesn't specifically mean "poor"; they may be in today's 10000 or whatever. Chill.
      - the_real_cher 3y ago
        Ok
  - deleted 3y ago
    [deleted]
  - the_real_cher 3y ago
    [flagged]
aeternum 3y ago
Good narrative but the data doesn't support the claim: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S
- gruez 3y ago
  I looked at their source, which turns out to this google sheets page: https://docs.google.com/spreadsheets/d/1q2zxQihvTduZy-u0IADmj93qI5AwDttujM1WJCGKOaE/edit#gid=0 https://docs.google.com/spreadsheets/d/1q2zxQihvTduZy-u0IADm... which in turn seems to be based on IRS aggregate taxpayer data. Based on a quick of the IRS data referenced, the "effective rates" does seem to be actual effective rates (ie. calculated based on how much the IRS is getting, rather than calculating based on what the brackets are). That said, I can think of multiple reasons why they don't correspond to the graph above: 1. At least in the early data, millionaires don't make up that much of overall tax take. For instance in 1945 they only made up of 0.1% of overall tax receipts. That means the effective rate of 64% makes a negligible contribution to the effective tax rate of the entire economy as a whole. 2. The threshold for millionaires is also not adjusted for inflation, so you'd expect the effective tax rate to drop as the brackets are moved up to account for inflation.
  - quanto 3y ago
    Indeed. This whole article hinges upon a poor understanding of data, or worse, an intentional deception using data. A million dollars now is very different from a million dollars 70 years back. Even after adjusting for broad inflation, there are far more citizens have assets worth a million dollars due to home ownership and asset price increase.
- mint2 3y ago
  That’s a graph showing federal tax receipts being roughly constant? Good find but that supports the article, not contradicts it. receipts constant while millionaires taxes rates decreasing = the middle class pickup of the tab.
  - refurb 3y ago
mortify 3y ago
Although I've looked at the original report, it isn't clear if this $1M in annual income that they're comparing to the 1950's is inflation adjusted. The only comment I can find on this point appears to say that it isn't which makes it an unfair comparison because that's the equivalent of more than $13M today. The article avoids a bigger concern which is the size of government spending. In 1960 (I couldn't find older data) federal government spending was $144B. If we adjust for inflation, today's spending would be $1.6T. It's $9.7T. Perhaps the rich are paying less, but a government that increases spending by 6x is certainly contributing to the problem. Population has doubled size 1950 explaining some of the spending increases and spreading out some of the costs, but not all. It would be interesting to see if the number of "millionaires" has rise proportionally.
- gruez 3y ago
  > Although I've looked at the original report, it isn't clear if this $1M in annual income that they're comparing to the 1950's is inflation adjusted. The only comment I can find on this point appears to say that it isn't which makes it an unfair comparison because that's the equivalent of more than $13M today. So far as I can tell, they're not. See my sibling comment: https://news.ycombinator.com/item?id=40059084 https://news.ycombinator.com/item?id=40059084 For instance for the 1945 figures you can clearly see that they pulled the figures they pulled were for millionaires ("1,000 [in thousands] and over").
- karmakurtisaani 3y ago
  > Perhaps the rich are paying less, but a government that increases spending by 6x is certainly contributing to the problem. Just a side note, but government spending change makes more sense when measures against GDP, not just inflation adjusted raw numbers.
  - notdonspaulding 3y ago
    I see this claimed all the time, but I don't understand why this is assumed to be the case. GDP rises and falls with economic progress and innovation. If new LLM startups make a bunch of money, GDP goes up accordingly. But government spending is primarily geared towards defense, infrastructure, and benefits/entitlements. What makes those costs go up proportionally to GDP? A fighter jet doesn't directly cost more because Amazon rolls out a new Alexa device, does it? America doesn't suddenly grow thousands of miles of new coastline because Google opens a data center in Iowa, right? If Rivian builds 10,000 new EV trucks, how much more interstate highway must be built? I would expect government spending to ebb and flow as market prices fluctuate, and I get that they might be loosely correlated, but why is spending assumed to be so closely linked that we should expect it to be a function of GDP? What's the intuition I'm missing?
gedy 3y ago
If this does not include inflation then gtfo, big deal.
- UnlockedSecrets 3y ago
  'Effective tax rate' is a % of the total whole, So the quantity of that whole doesn't matter.
  - mandelbrotwurst 3y ago
    The premise is that the tax rate of millionaires is of interest as distinct from the tax rate of the typical person because millionaires are considered as having an above average amount of wealth, i.e. the topic at hand is how the wealthy are taxes relative to the less wealthy. If inflation moves typical amounts of wealth closer to millionaire levels, the analysis no longer provides the same level of insight into that topic.
  - Ancapistani 3y ago
    Of course it does. It’s comparing the effective tax rate of someone who made $1m 1945 dollars against someone who made $1m 1980 dollars, and implying that the same should apply to someone who makes $1m 2024 dollars. $1m in 1945 had the same purchasing power as $4.6m in 1980 - or $17.4m in 2024. Those are not at all the same socioeconomic classes.
xbmcuser 3y ago
When you have an economic system where most of the economic growth goes to a small percentage each year the system will keep compressing the wealth to one side till the system breaks. With the advancement in AI I think the problem is likely to be exacerbated as more of the economic growth is captured by corporations from the workforce.
- mikrl 3y ago
  I think it’s a natural property of the interaction between capital and technology. Let’s say in a hypothetical society, the richest person has 10 capital and the poorest have 0. The gap between richest and poorest is 10 capital, and we can assume some nonlinear distribution of population between the extreme. Let’s say technology 10xes your capital. Now the rich person is 100 capitals ahead of the bottom and the population wealth curve has been stretched. Let’s say technology e^xes your capital, now your wealth curve is even more complicated and the rich person (after successive iterations of technology) is far ahead.
CraigRo 3y ago
The lengths that people would go to avoid paying those marginal tax rates was legendary! https://www.latimes.com/business/la-fi-nocera-tax-avoidance-20190129-story.html https://www.latimes.com/business/la-fi-nocera-tax-avoidance-... There were also a lot of 'perks' paid for by companies, and a lot of spouses who didn't bother working. You can have a high marginal tax rate, but it tends to be economically counterproductive.
- harimau777 3y ago
  Companies paying for perks and spouses not having to work both sound like good things to me.
  - CraigRo 3y ago
    I know of an airport, a bunch of hunting and fishing lodges, teams of housekeepers, etc. that basically allowed the executives of a fortune 500 company to live a pretty amazing life as if they owned an estate without actually paying for any of it. As soon as marginal tax rates came down, these things got eliminated -- it was far more efficient to just pay people. Likewise, smart people tend to marry other smart people. If one does well, the other got taxed at 90%. Guess what actually happened? She didn't work. Huge huge loss for the economy.
    - 39896880 3y ago
      >Huge loss for the economy That’s fine. It’s okay for humans to choose to live their one and only life in a way that doesn’t directly benefit “the economy.”
      - CraigRo 3y ago
        If your husband works and hits the 50+% bracket, and you are younger and make less... You either have to make 3x what your nanny does before you even keep a dollar- any less and you are paying to work. This is incredibly disheartening friends have complained about being involuntary housewives bc it would cost them too much to go to work
2Gkashmiri 3y ago
Do one thing, make dividents you receive from companies as taxable at 30% instead of 0 or 10% and see how taxes get generated. All the bs about "marginal rate" and yet people will find ways. If you force companies to deduct and pay taxes and then remit balance to the shareholder, the taxes collection will happen. Also, increase capital gains tax. In India its 15 or 20%, short or long term which is too little. Make it 30%
- lifestyleguru 3y ago
  High capital gains and dividend taxes mean that the only way for poor to accumulate capital is through employment which is already brutally taxed, and then capital will be funneled as soon as possible into real estate. See real estate markets in Ireland, Canada, UK which have high both capital gains and dividend taxes. The rich will trivially evade these two taxes anyway.
  - 2Gkashmiri 3y ago
    poor don't accumulate capital. why do you think that? the majority of human population lives hand to mouth their entire lives. >then capital will be funneled into real estate as soon as possible. See real estate markets in Ireland, Canada, UK which have high both capital gains and dividend taxes. The rich will trivially evade these two taxes anyway. i dont get this. i am saying increase taxes on capital gains, that includes gains made from sale of real estate. let people hoard as much cash in a house, when they have to "sell", that is when capital gains get triggered on the profit. higher profit means higher taxes. what problem are you talking about these countries? also, how can rich evade divident and capital gains? i genuinely want to know
    - lifestyleguru 3y ago
      There is too much lobbying involved every time any government touches capital gains tax. Usually they end up changing capital gains tax only for stocks and bonds as they are rather virtual, while capital gains on gold, currencies, and especially real estate remain unchanged or even zero. > what problem are you talking about these countries? Check real estate prices in Toronto, Dublin, or London. > how can rich evade divident and capital gains? Charities, trusts, family foundations, own army of lawyers and accountants.
listenallyall 3y ago
> billionaires have benefited massively from the Trump tax cuts, with the U.S.’s 806 billionaires’ collective wealth hitting an all-time high this month of $5.8 trillion. This is double the amount of wealth they controlled in 2017, the year the bill was passed The S&P 500 was at 2300 at the start of 2017, and 4800 at the start of 2024. If billionaires' wealth doubled, it was mostly due to equities (and other assets like real estate) doubling, not due to tax cuts, as this passage implies.
- staticman2 3y ago
  The stock market went up in part due to the Trump corporate tax cuts.
deleted 3y ago
[deleted]
gravescale 3y ago
That's a million per year, not the usual definition of "net worth over a million" which is a rather lower bar considering plenty of quite normally-salaried or even retired people are sitting on a million in property value.
dc_ist 3y ago
We have millions of poor Americans voting against their self-interests to protect the thousand billionaires.

99 points by wahnfrieden 3y ago

Not to mention rich people who store their money and assets instead of cash are much less affected by inflation. There's literally zero way I see of America not becoming a third world country in the coming decades.

VHRanger 3y ago
First sentence: sure! Second sentence: nonsense!
- Enginerrrd 3y ago
  Eh... There's some definite risk. The US is dealing with increasing corruption and nepotism, aging infrastructure, sliding standard of living for lower income americans, a shrinking middle class, unsustainable federal debt/spending, and all of those problems are going to be greatly exacerbated by the impending demographics pinch. The question is not so much if we turn into a full 3rd world country, but to what degree our standard of living slips.
  - throwaway5959 3y ago
    What advanced nation isn’t suffering from most of those?
    - shiroiushi 3y ago
      >>The US is dealing with increasing corruption and nepotism, aging infrastructure, sliding standard of living for lower income americans, a shrinking middle class, unsustainable federal debt/spending, and all of those problems are going to be greatly exacerbated by the impending demographics pinch. >What advanced nation isn’t suffering from most of those? Japan. The infrastructure is generally fantastic, and well-maintained (new trains are being built, bridges aren't falling down randomly). Corruption and nepotism isn't increasing from wherever it was before, and is generally low to begin with. The standard of living for lower income people is quite good (everyone has health insurance, healthcare is inexpensive, medical costs for children are all free, living costs are generally low). The middle class isn't shrinking, it's very strong. Government debt is high, but it's all internal (owed to the people), not external. There's a demographics pinch, but every developed nation (plus the US and Russia) has this right now, frequently even worse than here (just look at China and South Korea). There are issues, like any place, (esp. the weak Yen currently) but not like the ones the US faces, nor on the same scale.
      - wahnfrieden 3y ago
        Japan is embroiled in a massive corruption scandal
        shiroiushi 3y ago
        I never said it was corruption-free; every country has some corruption. It seems like it's being handled.
- shiroiushi 3y ago
  Looking at the quality of life, infrastructure, physical safety, proliferation of firearms, etc., the US already looks like a 3rd-world country to me. It's why I moved out.
- the_real_cher 3y ago
  we're going into 1 trillion dollars of interest PAYMENT debt every 100 days. I don't think the rich people will be the ones who pay the price for this.
DoreenMichele 3y ago
Some people have been joking about it being a third world country for years. It's supposedly a great place to live if you're rich. Not so much for a lot of other people living here.
- grugagag 3y ago
  If you’re rich you can be fine almost anywhere in the world, barring a dictatorship or some war torn region. But if you’re not rich but have just a little bit, life outside of the US has the potential to be way better these days. Unless you work like a mule and don’t mind hustling your way into retirement or death.
fumar 3y ago
There is no accountability for the ruling class including political actors in the US. I enjoy the freedoms this country provides but I see risk across the very fabric of society. We are drowning as a country and it's to allow certain sectors or companies to rise indefinitely to the top of the capital market. What solutions can we deploy?
- grugagag 3y ago
  I think we’re heading for the no solution territory. At least I don’t see politicians miraculously coming to their senses, everything is corrupted beyond repair.
  - over_bridge 3y ago
    Politicians 'come to their senses' when they interact with normal people and are accountable to them. Public funding of elections and bans on large private donations remove the incentive to only talk to rich people. Getting money out of politics needs to be a top priority. If money isn't a factor then all voices become equal and democracy can rear its head once more. I feel like modern presidential campaigns are just two team captains assembling as many billionaires as they can on their team. Biggest net worth team wins
    - grugagag 3y ago
      Ok then and who bans large private donations? Who can take money out of politics? Politicians won’t do it as it isn’t in their interest. It’s catch 22 all the way down. In theory you’re going in the right direction but the reality is stuck somewhere else…
      - wahnfrieden 3y ago
        There's certainly no voting solution to that problem. Fleecing the public is a bipartisan effort.
gravescale 3y ago
If we're being literal, America can't be a third-word country because it's the very definition of a first-world country per Cold War allegiances.
- felurx 3y ago
  Congratulations! You have ignored the point OP wanted to make by pointing out the original definition of a term that is used with another meaning nowadays. Is there something you believe this adds to the conversation? (Genuinely asking, because I fail to see it, and I don't want to accuse you of anything based on that.)
  - gravescale 3y ago
    It's, to me, an amusing juxtaposition of the OP claiming to be "literally unable" and the actually literal meaning of the adjacent term being incompatible. And maybe someone would learn that third-world doesn't specifically mean "poor"; they may be in today's 10000 or whatever. Chill.
    - the_real_cher 3y ago
      Ok
- deleted 3y ago
  [deleted]
- the_real_cher 3y ago
  [flagged]

aeternum 3y ago

Good narrative but the data doesn't support the claim: https://fred.stlouisfed.org/series/FYFRGDA188S https://fred.stlouisfed.org/series/FYFRGDA188S

gruez 3y ago
I looked at their source, which turns out to this google sheets page: https://docs.google.com/spreadsheets/d/1q2zxQihvTduZy-u0IADmj93qI5AwDttujM1WJCGKOaE/edit#gid=0 https://docs.google.com/spreadsheets/d/1q2zxQihvTduZy-u0IADm... which in turn seems to be based on IRS aggregate taxpayer data. Based on a quick of the IRS data referenced, the "effective rates" does seem to be actual effective rates (ie. calculated based on how much the IRS is getting, rather than calculating based on what the brackets are). That said, I can think of multiple reasons why they don't correspond to the graph above: 1. At least in the early data, millionaires don't make up that much of overall tax take. For instance in 1945 they only made up of 0.1% of overall tax receipts. That means the effective rate of 64% makes a negligible contribution to the effective tax rate of the entire economy as a whole. 2. The threshold for millionaires is also not adjusted for inflation, so you'd expect the effective tax rate to drop as the brackets are moved up to account for inflation.
- quanto 3y ago
  Indeed. This whole article hinges upon a poor understanding of data, or worse, an intentional deception using data. A million dollars now is very different from a million dollars 70 years back. Even after adjusting for broad inflation, there are far more citizens have assets worth a million dollars due to home ownership and asset price increase.
mint2 3y ago
That’s a graph showing federal tax receipts being roughly constant? Good find but that supports the article, not contradicts it. receipts constant while millionaires taxes rates decreasing = the middle class pickup of the tab.
- refurb 3y ago

mortify 3y ago

Although I've looked at the original report, it isn't clear if this $1M in annual income that they're comparing to the 1950's is inflation adjusted. The only comment I can find on this point appears to say that it isn't which makes it an unfair comparison because that's the equivalent of more than $13M today. The article avoids a bigger concern which is the size of government spending. In 1960 (I couldn't find older data) federal government spending was $144B. If we adjust for inflation, today's spending would be $1.6T. It's $9.7T. Perhaps the rich are paying less, but a government that increases spending by 6x is certainly contributing to the problem. Population has doubled size 1950 explaining some of the spending increases and spreading out some of the costs, but not all. It would be interesting to see if the number of "millionaires" has rise proportionally.

gruez 3y ago
> Although I've looked at the original report, it isn't clear if this $1M in annual income that they're comparing to the 1950's is inflation adjusted. The only comment I can find on this point appears to say that it isn't which makes it an unfair comparison because that's the equivalent of more than $13M today. So far as I can tell, they're not. See my sibling comment: https://news.ycombinator.com/item?id=40059084 https://news.ycombinator.com/item?id=40059084 For instance for the 1945 figures you can clearly see that they pulled the figures they pulled were for millionaires ("1,000 [in thousands] and over").
karmakurtisaani 3y ago
> Perhaps the rich are paying less, but a government that increases spending by 6x is certainly contributing to the problem. Just a side note, but government spending change makes more sense when measures against GDP, not just inflation adjusted raw numbers.
- notdonspaulding 3y ago
  I see this claimed all the time, but I don't understand why this is assumed to be the case. GDP rises and falls with economic progress and innovation. If new LLM startups make a bunch of money, GDP goes up accordingly. But government spending is primarily geared towards defense, infrastructure, and benefits/entitlements. What makes those costs go up proportionally to GDP? A fighter jet doesn't directly cost more because Amazon rolls out a new Alexa device, does it? America doesn't suddenly grow thousands of miles of new coastline because Google opens a data center in Iowa, right? If Rivian builds 10,000 new EV trucks, how much more interstate highway must be built? I would expect government spending to ebb and flow as market prices fluctuate, and I get that they might be loosely correlated, but why is spending assumed to be so closely linked that we should expect it to be a function of GDP? What's the intuition I'm missing?

gedy 3y ago

If this does not include inflation then gtfo, big deal.

UnlockedSecrets 3y ago
'Effective tax rate' is a % of the total whole, So the quantity of that whole doesn't matter.
- mandelbrotwurst 3y ago
  The premise is that the tax rate of millionaires is of interest as distinct from the tax rate of the typical person because millionaires are considered as having an above average amount of wealth, i.e. the topic at hand is how the wealthy are taxes relative to the less wealthy. If inflation moves typical amounts of wealth closer to millionaire levels, the analysis no longer provides the same level of insight into that topic.
- Ancapistani 3y ago
  Of course it does. It’s comparing the effective tax rate of someone who made $1m 1945 dollars against someone who made $1m 1980 dollars, and implying that the same should apply to someone who makes $1m 2024 dollars. $1m in 1945 had the same purchasing power as $4.6m in 1980 - or $17.4m in 2024. Those are not at all the same socioeconomic classes.

xbmcuser 3y ago

When you have an economic system where most of the economic growth goes to a small percentage each year the system will keep compressing the wealth to one side till the system breaks. With the advancement in AI I think the problem is likely to be exacerbated as more of the economic growth is captured by corporations from the workforce.

mikrl 3y ago
I think it’s a natural property of the interaction between capital and technology. Let’s say in a hypothetical society, the richest person has 10 capital and the poorest have 0. The gap between richest and poorest is 10 capital, and we can assume some nonlinear distribution of population between the extreme. Let’s say technology 10xes your capital. Now the rich person is 100 capitals ahead of the bottom and the population wealth curve has been stretched. Let’s say technology e^xes your capital, now your wealth curve is even more complicated and the rich person (after successive iterations of technology) is far ahead.

CraigRo 3y ago

The lengths that people would go to avoid paying those marginal tax rates was legendary! https://www.latimes.com/business/la-fi-nocera-tax-avoidance-20190129-story.html https://www.latimes.com/business/la-fi-nocera-tax-avoidance-... There were also a lot of 'perks' paid for by companies, and a lot of spouses who didn't bother working. You can have a high marginal tax rate, but it tends to be economically counterproductive.

harimau777 3y ago
Companies paying for perks and spouses not having to work both sound like good things to me.
- CraigRo 3y ago
  I know of an airport, a bunch of hunting and fishing lodges, teams of housekeepers, etc. that basically allowed the executives of a fortune 500 company to live a pretty amazing life as if they owned an estate without actually paying for any of it. As soon as marginal tax rates came down, these things got eliminated -- it was far more efficient to just pay people. Likewise, smart people tend to marry other smart people. If one does well, the other got taxed at 90%. Guess what actually happened? She didn't work. Huge huge loss for the economy.
  - 39896880 3y ago
    >Huge loss for the economy That’s fine. It’s okay for humans to choose to live their one and only life in a way that doesn’t directly benefit “the economy.”
    - CraigRo 3y ago
      If your husband works and hits the 50+% bracket, and you are younger and make less... You either have to make 3x what your nanny does before you even keep a dollar- any less and you are paying to work. This is incredibly disheartening friends have complained about being involuntary housewives bc it would cost them too much to go to work

2Gkashmiri 3y ago

Do one thing, make dividents you receive from companies as taxable at 30% instead of 0 or 10% and see how taxes get generated. All the bs about "marginal rate" and yet people will find ways. If you force companies to deduct and pay taxes and then remit balance to the shareholder, the taxes collection will happen. Also, increase capital gains tax. In India its 15 or 20%, short or long term which is too little. Make it 30%

lifestyleguru 3y ago
High capital gains and dividend taxes mean that the only way for poor to accumulate capital is through employment which is already brutally taxed, and then capital will be funneled as soon as possible into real estate. See real estate markets in Ireland, Canada, UK which have high both capital gains and dividend taxes. The rich will trivially evade these two taxes anyway.
- 2Gkashmiri 3y ago
  poor don't accumulate capital. why do you think that? the majority of human population lives hand to mouth their entire lives. >then capital will be funneled into real estate as soon as possible. See real estate markets in Ireland, Canada, UK which have high both capital gains and dividend taxes. The rich will trivially evade these two taxes anyway. i dont get this. i am saying increase taxes on capital gains, that includes gains made from sale of real estate. let people hoard as much cash in a house, when they have to "sell", that is when capital gains get triggered on the profit. higher profit means higher taxes. what problem are you talking about these countries? also, how can rich evade divident and capital gains? i genuinely want to know
  - lifestyleguru 3y ago
    There is too much lobbying involved every time any government touches capital gains tax. Usually they end up changing capital gains tax only for stocks and bonds as they are rather virtual, while capital gains on gold, currencies, and especially real estate remain unchanged or even zero. > what problem are you talking about these countries? Check real estate prices in Toronto, Dublin, or London. > how can rich evade divident and capital gains? Charities, trusts, family foundations, own army of lawyers and accountants.

listenallyall 3y ago

> billionaires have benefited massively from the Trump tax cuts, with the U.S.’s 806 billionaires’ collective wealth hitting an all-time high this month of $5.8 trillion. This is double the amount of wealth they controlled in 2017, the year the bill was passed The S&P 500 was at 2300 at the start of 2017, and 4800 at the start of 2024. If billionaires' wealth doubled, it was mostly due to equities (and other assets like real estate) doubling, not due to tax cuts, as this passage implies.

staticman2 3y ago
The stock market went up in part due to the Trump corporate tax cuts.

deleted 3y ago

[deleted]

gravescale 3y ago

That's a million per year, not the usual definition of "net worth over a million" which is a rather lower bar considering plenty of quite normally-salaried or even retired people are sitting on a million in property value.

dc_ist 3y ago

We have millions of poor Americans voting against their self-interests to protect the thousand billionaires.