The wealth tax is back. We have previously discussed the constitutional and policy concerns surrounding the push by Democrats like Sen. Elizabeth Warren (D., Mass.) to introduce a wealth tax that would start with billionaires. It would not likely end there. The law would also apply the same type of California approach to wealthy families fleeing the tax grab with a huge “exit tax” so that there is no escaping from tax vortex. In addition, under the Ultra-Millionaire Tax Act, Warren and others would add $100 billion to increase tax audit and investigations.
The captivity tax highlights the wealth-redistribution mindset underlying Warren’s “experiment.” Warren thrilled audiences for years by telling the rich she was coming after “your Rembrandts, your stock portfolio, your diamonds and your yachts.” In one Democratic debate, she got applause by rubbing her hands together after stating that she would take some of the wealth of fellow candidate John Delaney, a self-made millionaire worth $65 million. She has now made good on that threat.
The reintroduction of Ultra-Millionaire Tax Act would add a 2% tax on households worth $50 million to $1 billion and a 3% tax on households worth more than $1 billion.
Warren is again repeating that talking point of President Joe Biden that billionaires pay less than the average citizen in taxes. That has been repeatedly challenged. The claim is based on dubious accounting. A commonly cited White House study from September, 2021 included unrealized capital gains in its analysis – something that neither wealthy nor middle class citizens are taxed on. Warren and Biden want that to change but it is a false measure on the current tax burden.
It is also worth noting that “the top 1 percent’s income share rose from 22.2 percent in 2020 to 26.3 percent in 2021 and its share of federal income taxes paid rose from 42.3 percent to 45.8 percent.” The top 50 percent of all taxpayers paid 97.7 percent federal income taxes,. The bottom 50 percent paid the only 2.3 percent.
We previously discussed the push in California to impose a retroactive tax on the many citizens and companies fleeing that state due to its high taxes and other problems. Warren wants to do the same nationally. So if businesses are fleeing the country due to these policies, they would have to essentially pay for the freedom in a type of captivity tax. It is incredibly short-sighted. We need these businesses and we will not be able to coerce them into saying by trying to make it more expensive to leave. Indeed, the captivity tax only magnifies the impression of a tax system that is becoming an extension of the eat-the-rich rhetoric used by Warren and others.
Politicians have long turned to the “Eat the rich!” battle cry when things are not working out politically or economically. When struggling in the 2020 Democratic presidential primaries, Sen. Elizabeth Warren (D-Mass.) pledged a wealth tax, declaring that she was coming after “the diamonds, the yachts, and the Rembrandts too.” Then-New York City Mayor Bill DeBlasio, another Democratic contender at the time, was barely registering in the polls when he promised that “we will tax the hell out of the wealthy.”
The Warren proposal would turn the eat-you-rich rhetoric to an all-you-can eat tax plan for the government.
There are major constitutional concerns raised by the plan to tax unrealized capital gains. However, this is clearly playing well with much of the base of the party.
The Wharton Budget Model at the University of Pennsylvania did find that Warren’s legislation would raise $2.7 trillion in revenue but it would also reduce capital by 3.1%, depress average hourly wages by 1.2% and reduce gross domestic product (GDP) by 1.2% in 2050.
You have to admit that a bad idea is like a bad penny, it keeps turning up. Warren never learns. Does she really think this will not drive money out of the country? Does she really think corporations will not create new companies and move assets? Do you know who gets hurt in the end? The American people and working people that will lose out on jobs due to stagnation.
History teaches that economics are very big motivators for people turning against their leaders. BTW, what is rich? They never tell you because that way they can drop it down to whatever they want. Remember Clinton’s wealth tax? That ended up hitting middle class people too. How did she do in the election? I rest my case.
Warren’s condescension of her ‘lessers’ is displayed quite well in this clip:
I hate that woman.
Who’s bright idea was it give our government(s) the power to tax and spend without adequate checks and balances? Wealthy is actually a subjective term. Sure, Warren can write a bill making it appear objective, but in reality it’s just a goalpost that will move when they deem it necessary to move. $1B today would just as easily be $1M tomorrow after revenues failed again to meet expenditures.
As long as our federal government continues making the citizens of this country less safe and secure in our lives, liberty and property; as long as they continue to gut our military; they are making many features of the Articles of Confederation look rational.
“Wealthy is actually a subjective term.” Indeed, just like “fair share”. Undefinable words are the bedrock of today’s modern Leftist ideologies.
Undefinableredefinable words are the bedrock of today’s modern Leftist ideologies.JAFO, that would be more accurate.
Yes, because sharply defined words and phrases create a means of judging actions. A totalitarian dictator does not want any standards to judge his/her conduct.
“Who’s bright idea was it give our government(s) the power to tax and spend without adequate checks and balances?”
Those who benefit from changes in the law. Olly, there is no reason for the federal government to spend the amount it does. We have 50 states (57, according to Obama). They and their counties are supposed to be spending the bulk of the money.
No business can be successful if it is as large or diversified as the US government. Return the power to the states!
Return the power to the states!
That was my point regarding the AoC. For all of Madison’s genius in crafting our fabulous constitution, it would appear in hindsight that both the federalists and anti-federalists never considered how it would weaken over time in direct proportion to the people’s ignorance of its governing principles.
Olly, many recognized that the Constitution was only as good as the people.
“A republic, if you can keep it.”
We all recognize the quote attributed to Franklin. But here is another quote: “The first man put at the helm will be a good one. Nobody knows what sort may come afterward. The executive will be always increasing here, as elsewhere, till it ends in a monarchy.”
I think it is appropriate to quote the Bug’s statement, which was already deleted. He answered my question with the following response: “WE gave our government the power to tax and spend.”
Bug thinks he is brilliant, but his statement is so shallow that it demonstrates ignorance expected to be found in a six-year-old. Bug wants to be noticed, and he is, but he is noticed for his stupidity, his addictions, and his sexual perversions. He has nothing else to offer.
“A commonly cited White House study from September, 2021 included unrealized capital gains in its analysis – something that neither wealthy nor middle class citizens are taxed on.”
That is the part that is how pension funds end up in the red, or out right failing. They always assume a rosy outlook and when that fails, they fail.
And what is to stop “unrealized capital gains” to just the rich? Now, it is billionaires. Two year from now it is millionaires. Then anyone making $500k or more. Then $250k. Then $100k. It is never enough with them.
Are they going to tax the sale of my home in say, 30 years, tomorrow?
Also, some EU countries tired the same. They also had exit taxes. Looked great on paper. But in the long term they lost more then they took in the short term.
Does our tax system need fixed? Yes. How to do it the right way needs a more in depth analysis and discussion that should also cover reigning in government waste and abuse, redundant programs, military spending on weapon systems that dont work or are only partially combat operational-able and paying illegals food, housing and healthcare.
Unrealized is another name for not real.
It is governments guess at what you would have made if you sold what you have right now.
But the gains from investment are specifically because people do NOT sell investments that perform.
I would further note that there is reason that capital gains taxes are low.
The correct rate for capital gains is ZERO.
Capital gains taxes are taxes on successful investment.
We want as much successful investment as possible.
Taxing capital gains is the most economically destructive form of tax their is.
Taxing unrealized capital gains is even stupider.
The only thing stupider than punishing successful investors, is punishing investors who MIGHT be successful.
Nothing will F#$K up an economy more than disincentivizing investment.
Kevin OLeary of Shark Tank is on the media right now ranting about the incredible stupidity of the Trump judgement.
The Reason that the US is the strongest global economy – and has been for almost a century is because in good times and in bad this is the best place in the entire world to invest.
There is massive idiocy on the left – but the right is not immune – the problem with Trumps bloodbath speech – was not the bloodbath remark but the tarrifing the crap out of sino-mexican cars.
Another common Reight wing economic idiocy is efforts to thwart foreign investment.
If China wants to invest int he US – we should welcome that. Foreign investment creates US jobs and US wealth.
The Chinese are not going to take US farms or office towers and transport them back to China.
A country should NEVER thwart another country from investing here.
Nor should we thwart another country from subsidizing goods sold in the US.
If the Chinese want to transfer wealth to the US – LE THEM.
Unrealized Capital gains taxes mean nothing more than taxing money not earned nor on hand. If anyone thinks that won’t hurt the economy has no idea of how an economy works. BTW, has Liz Warren built a business?
Unrealized capital gains is kind of imaginary, in a way. Because if you assume that the gain amount is what would be realized in a sale, then you can only assume that sale on a per person basis. Because if everybody started selling, the price would go downhill in a hurry.
That is the same reason the DJ Stock Index is misleading in a way, and subject to manipulation – it is based on the last sale.
If we ever get to the point where they can tax unrealized gains, then I nominate Judge Engoron for the position to head the office of portfolio valuation.
“Now, it is billionaires. Two year from now it is millionaires. Then anyone making $500k or more. Then $250k. Then $100k. It is never enough with them.”
Upstate, an example of what you are saying was a tax on only 155 high-income households. It was later called the AMT, and it can tax almost anyone. I decided to pull out a quote from Wikipedia on the AMT’s history. The only way to get things straightened out is to ensure people recognize a tax even when it is wrapped up in an all-inclusive price. We have the computing power to do such things.
“A predecessor “minimum tax” was enacted by the Tax Reform Act of 1969[24] and went into effect in 1970. Treasury Secretary Joseph Barr prompted the enactment action with an announcement that 155 high-income households had not paid a dime of federal income taxes.[25][26] The households had taken advantage of so many tax benefits and deductions that they had reduced their tax liabilities to zero.[27] Congress responded by creating an add-on tax on high-income households, equal to 10% of the sum of tax preferences in excess of $30,000 plus the taxpayer’s regular tax liability.[28]”
And, the tax on social security! Which, the $25,000 single minimum and $32,000 married minimum was set back in 1984 IIRC. Those numbers were never adjusted for inflation, and now, even people as bad off as I am, pay some tax on social security. Even worse, if a person has to go into a nursing home, and needs Medicaid to pay for it, they are only allowed to keep a certain amount, which varies from state to state. Some states, it is as low as $30 per month -Here is a chart, per state. Some of these maximums have remained unchanged for decades:
https://www.medicaidplanningassistance.org/personal-needs-allowance/
In spite of this, you have Republicans, like Nikki Haley and Ben Shapiro, advocating to raise the age for social security to 70. No, taxing the rich is preferable to that crap.
Floyd, I don’t think it is a matter of taxing the rich. Social Security was meant to provide a forced retirement plan for all and was not meant to be a person’s sole retirement. The government added things to it that did not belong and used Social Security money to balance our budgets. It is not even guaranteed to be paid to recipients.
There are many inequities in the Social Security program, so discussing a retirement age is similar to picking which bandaid to place on an abscess. It is not a solution.
By the way, they are already taxing the rich within the social security system. Those earning significant funds while on Social Security will pay taxes on up to 85% of their SS benefits. Those with low retirement income pay no tax on this money.
Did taxing the rich in the social security program solve the problem? No. The problem persists, so taxing the rich is not a problem solver.
True, but social security has become a de facto sole retirement for most people. They may have some “capital”, in the form of home equity, but they have to live somewhere. Hopefully they can downsize to a point where there is meaningful excess. Other people do not have employer pension plans. If they set up an IRA, and say they have $100,000 in it at retirement, one big medical bill could wipe it out. Others, simply do not make enough money to put any aside for retirement – being that it takes all they have to survive from week to week.
So, where can the taxes come from, but the rich? For example, Elizabeth Warren:
Elizabeth Warren has a net worth of at least $7.5 million. This number is based on estimates from the homes she shares with her husband, proceeds from her book sales, savings, mutual funds, and other assets. (I think the number is much higher, but what do I know?)
So, put a tax on wealth of 50% over $5 million. Let her cough up about a million and a half. And others, the same. Do not make that deductible. Continue this yearly until there is no deficit.
You would be surprised how quickly the budget gets balanced. I bet it takes less than one year!
Floyd, I am sympathetic to those who worked hard and suddenly, through no fault of their own, ended up with tremendous needs. Social Security is a retirement program, not a welfare program, and it needs to remain as such if it remains. One of the reasons Social Security is in bad shape is that instead of securing the program, we counted on taxing the rich and then stayed in the same position we were before. There are ways of fixing Social Security, at least in part, but the left wants more dependency rather than less.
If one lives on a total wealth of $5,000,000, that is not huge. You wish to reduce it to $3.5 million. If that is the case why should people becoming rich invest in their businesses when they can invest in their lifestyles? You are making the choice of investing in a business only to lose the investment or buy another Margarita while lounging at the pool on an expensive island.
Get to know apoptosis
Multicellular animals often need to get rid of cells that are in excess, in the way, or potentially dangerous. To this end, they use an active dedicated molecular programme. As important as cell division and cell migration, regulated (or programmed) cell death allows the organism to tightly control cell numbers and tissue size, and to protect itself from rogue cells that threaten homeostasis.
Hengartner, M.O., 2000. The biochemistry of apoptosis. Nature, 407(6805), pp.770-776.
http://ftp.columbia.edu/itc/gsas/g9600/2004/FrankeReadings/407770a0_r.pdf
TL;DR: follow the science!
“get to know apoptosis”
Estovir, apoptosis is understandable but doesn’t sound like a good analogy for the discussion. You can expand on your idea of “get (ting) rid of cells that are in excess” if you wish. Are you relating cells to money? Who should make that decision? The one who worked for the money or the dictator of the day?
Notice that Warren et al NEVER mention trying to tax the billions that universities like Harvard are sitting on. Harvard has THIRTY-NINE BILLION in untaxed endowment money and yet Warren has no issue with them????
Anyone here who supports Warren’s proposal to add a tax on unrealized gains is nothing more than a cowardly Marxist in disguise, who has only been waiting to emerge from the closet for a thug-enforced government thievery formula that suits his or her irrational biases. Government spending must be slashed to the very bone. That includes eliminating all corporatist subsidies, both direct grants, and tax breaks. Then do away with the assinine fiction that a corporation is a person under the law, replete with all the rights of a human individual. Grow a brain. The government is addicted to runaway spending and deficits. If it is permitted to confiscate unrealized assets of the very wealthy, as well as levy taxes on actual income, that will not even put a temporary dent in the problem. Just how long do you think it would take before they came after the appreciation in everyone else’s 401K plans?
guyventner, the rich pay the same sales taxes and realtor fees that you pay. They also pay the same tax on housing that you pay. Your statement makes it look like the rich are not paying these same taxes. The tax credit for building wind farms is because wind farms are not profitable in comparison to other investments. Your envy and your surface understanding of how things work reveals your level of education concerning economics. This is knowledge that you could easily find if you wanted to take the time before you ventured to pontificate on matters of which you have very little understanding. Warren is looking for people just like you to feed her “hate the rich” narrative to. She just uses a straw man and you think she hands you a match. By the way, have you noticed how much Warren’s wealth has grown since she’s been in office. Sucker.
Well said!
Wealth inequality has been increasing ever since Reagan promised trickle down. Trickle down doesn’t work. Wealth ineqality leads to social unrest. If you thought riots were bad when Floyd was killed. Wait until the police kill some people for steeling bread to take back to their families. We need to change our tax laws.
Wealth inequality is a straw man – a red herring.
The GINI index is a fraudulent measure – it ranks countries with high and rapidly rising standards of living tghe same as poor undeveloped nations with stagnant or dropping standard of living.
Regardless low inequality is NOT what you want. The affectation with inequality is a reflection fo the stupid idea that humans are ants.
That we are identical, that we have exactly the same abilities, wants and needs.
That is the route to Ruin.
We are NOT equal – and that is a GOOD thing.
The claim that income inequality leads to social unrest is only narrowly true.
It is historically only true when those at the bottom are starving or nearly starving and there is no chance of that improving.
That is not only not true True of the US today – it is not true globally.
Since 1965 the global population has more than doubled. Yet starvation has nearly disappeared.
There is nowhere on earth today that people are starving as a result of economic conditions or fundimental inability to feed themselves.
Starvation today ONLY exists in conjunction with political power struggles and warlords controlling food.
Not only is all starvation today purely political – but every country in the world is capable of feeding its own people.
This has all come about as a consequence of the very economic systems that you excoriate.
There is a radical difference between a poor country where nearly everyone is starving and a few powerful people are not – and live like the middle class in places like the US – and a country like the US in particular but most successful western nations where standard of living is rising.
The “poor” are in the top 1% in terms of wealth globally, but still the top 1% have millions of times what ordinary people do.
If you are starving – those at the top have enough food to eat – you will get “social unrest”.
If you are among the richest in the world – but the bottom of your own country – it is irrelevant to you whether Elon Musk has $200M or $1T.
I would further note that the “wealth” of the richest in countries like the US is 99.9999% invested in things that make all the rest of us better off.
If you liquidated Amazon and distributed its wealth equally – do you think anyone would be truly better off ?
Conversely if you liquidated 75% of the federal government – not only would people be better off but growth would skyrocket.
Musk would likely be worth 100 times what he is now qucikly.
But YOU would be worth twice what you are now – in the same time, and would be worth twice as much again shortly thereafter.
It quite litterally is completely irrelevant how well the top 1% are doing.
What matter is how rapidly the 99% are improving.
Adam Smith described the conditions necescary for that over 250 years ago.
Little else is requisite to carry a state to the highest degree of opulence from the lowest barbarism but peace, easy taxes, and a tolerable administration of justice: all the rest being brought about by the natural course of things.”
― Adam Smith
No one in the US is stealing bread to take back to their families.
This is not Les Miserables and early 18th century france, further the thesis that poverty causes crime has been roundlyh obliterated.
Crime causes poverty.
What are people stealing today ? Busting into Neiman Marcus or the Apple store is NOT stealing bread for your family.
In the last “social unrest” we saw – the BLM riots – people were running off with Flat screens and Guicci Bags, not loaves of bread.
Further historically that type of “social unrest” – is most destructive to those who engaged in it.
The french revolution – which is what you are parroting, lead to mass murder, more poverty and eventually to Napolean when the people tired of even worse poverty, anarchy and chaos, called for a powerful leader.
Did the social unrest in Cuba lead to a wealthy and prosperous nation ? Venezuela ? Haiti ?
Did the BLM riots make anything better ? Or the Rodney King Riots ?
Absolutely we need to change our tax laws – Flat tax that EVERYONE must pay.
It is very bad for the country 50% of the people pay almost the entire cost of govenrment.
If you expect voters to make good choices at the polls – they must pay the costs of the policies that result from their vote.
In economics there is something called moral hazard – that is what occurs when those who receive a benefit do not have to pay for it.
That is why Health care is so expensive in the US.
That is why everything in this country that has been increasing in price and/or decreasing in quality over the past 50 years is heavily subsidized or completely paid for by govenrment.
If you want people – rich and poor alike, to make good decisions – they must directly reap the rewards AND pay the costs of those decisions.
“There are major constitutional concerns raised by the plan to tax unrealized capital gains. However, this is clearly playing well with much of the base of the party.” Of course it plays well with people who collectively, combined, contribute only 2.9 percent of the nation’s income tax receipts. Duh, Doc. The problem of course, is that even 97.7% paid to government by the top 1% is never enough for the likes of FocahauntsUs. 100% paid by the 1% would *still* not be enough. Leftists have no definition for “enough” when it comes to collecting taxes from The People™.
Like ballot cleansing, this is another brilliant idea borrowed from Hitler. See Wikipedia “Reich Flight Tax”. In 1931, the Reich Flight Tax was enacted to get money from the wealthy who changed their domicile within Germany. But Hitler later used it to confiscate the estates of Jews forced to leave the country. Our progressives are running hard to try to catch up to Der Fuhrer.
Taxes are the fuel for the Government; however does the Government need Ultra Platinum 103 Octane or can it run on 87. Right now we’re giving it 212 octane without the related performance. Time to tax a hard look at one of the following; the FAIR tax, a national sales tax, or a value added tax. Only by cutting the “carbs” will Government spending ever be brought under control.
“The problem with socialism is that you eventually run out of other people’s money.” Margaret Thatcher
I doubt many politicians ever made anything, ran a business or had to make payroll. They live in La La Land. University faculty are paid a wage, get good benefits and a pension. Few, I suspect, realize that their pensions are linked to the success of corporate earnings.
It will be an interesting day when they have shot the whole wad and they have to fend for themselves in the real world.
She also said you can vote your way into socialism, but you have to shoot your way out.
I favor a flat tax with no deductions. It would bring simplicity and ease of compliance, encouragement of economic growth, reduction of tax evasion and avoidance, and greater transparency and fairness in the tax system. I have read, too, that hundreds of thousands of new jobs would be created under a flat tax system.
But . . . it’s hard to accomplish politically, because (a) there are so many vested interests in keeping the current tax system, and (b) it doesn’t lend itself well to the type of bombastic talking points, sound bites, and slogans that are the currency of modern political discourse.
What is being discussed is NOT an income tax – it is a wealth tax.
This is just about the most economically destructive type of tax there is.
All taxes pose many other problems – all taxes are economically distortive – they cause investment to move away from somethings and towards others.
Politicians – both left and right want to be able to steer investment – but it is ALWAYS a mistake to have investment shift from where the people have chosen – and that is what free markets mean – that people through their choices in the market decide what is important, to what those with power decide.
“I favor a flat tax with no deductions. “
Oldman, I don’t disagree but I think it might need to go further to prevent tax avoidance so that money cannot be put into wealth instruments that are merely a way of reducing taxes.
Flat “Consumption tax” Rate on the end product or service only (no VAT). Only enough tax collected to run the government’s Original/Amended Enumerated powers – not all the add-on, porky-pork, paper-pushing federal departments that exist for no other purpose than enriching members of government, it’s employees, and their crony-capitalist, crookedly-corrupt, friends and personal business. Is there anything simpler or “fair”?
JAFO, suppose a super-rich business owner decides not to take money from his investments and leaves it there. Should he be able to buy the art of Rembrandt, Henry Moore, and Da Vinci to decorate where he spends most of the time, while these objects are not taxed because they are business-related in name only?
S.Meyer, you’ve asked a question and stated a presumption. Leaving money in investments (presumption) is not taxable until its withdrawn for any reason, (question) including buying items for businesses – consumption tax (or use tax) must be paid at the time of sale. Can that purchase be deducted as a business expense on tax forms, maybe. Definately maybe. But a business “purchase” is every bit as much a sale as a consumer purchase/sale. No exceptions. Cheaters, when caught, forfeit any profit and the item(s) sold.
” Can that purchase be deducted as a business expense on tax forms, maybe.”
JAFO, where the line is drawn whether it be a business deduction or a charitable deduction is a very hazy line. How do you adjust that line?
I don’t, SMeyer. My focus for a consumption tax is strictly referring to the ‘purchase’ side only. As one example, every driver who buys fuel for their vehicle pays a fuel tax at the point of sale. The federal tax per gallon is paid by everyone who purchases fuel at the time of the transaction. The more fuel the driver buys, the more tax is paid. That’s what I mean by ‘consumption tax’. Buy a car, book, or have the siding replaced on the building you rent to someone else, all would be taxable at the point of sale via a consumption tax. Whether those taxes are deductable later on Uncle Sam’s Income tax form 1040, is a separate issue, like fuel for farming. Farmers claim the federal fuel tax as a credit toward Income Tax but the purchase of the fuel is still taxed at the time of delivery.
JAFO, that is basically a VAT (variant). Tax everything one buys at point of sale excluding a tax where it has already been applied, until it gets to the end user.
SMeyer, you might be making this far more complicated than I intended – just like VAT does. The point of sale already includes the costs of production, including labor and any/every accumulated VAT along the way. If I were a legislator I would write a consumption tax that gives no money to government before the point of sale, period. More money the consumer spends, the more revenue cleanly-collected going to government. Less paperwork hassle for everyone which is why it will never happen. It *should*, but won’t.
JAFO, it is simple once one gets the details down pat.
“If I were a legislator I would write a consumption tax that gives no money to government before the point of sale, period.”
You have to define the point of sale. Instead of investing in a business, would you permit a $100 Million piece of art not to be taxed if placed as an office fixture in an office that is a billing service? Let us say that the office is part of a person’s home. Let us say the point of sale is to a reseller. How about driveway gates for a private home? If the house is on the market?
If you think these things are simple, refer to the IRS cases.
SMeyer, you’re overthinking this…it’s almost as if you’re already looking for ways to cheat. As I said earlier, no exceptions on the sale of goods and services, period. Tax Credits on government forms after the purchases is *not* what I’m talking about in any sense. Why you keep injecting ‘investments’ into the conversation is a mystery. Perhaps your thinking is why the tax code is thousands of pages in length already, even worse when one adds in every state, county and municiple tax on everything, too. Repeal the 16th. Replace it all, including income and death taxes, with an easy-to-understand tax on everything when that ‘thing’ (or service) is purchased. Peppering me with ‘what-abouts’ isn’t working.
“SMeyer, you’re overthinking this… it’s almost as if you’re already looking for ways to cheat. ”
JAFO, perhaps you are not thinking about the details, so you can complain when people cheat. I want a tax system that is clear and easily defined. You use words that do not clearly define the system you desire.
“Why you keep injecting ‘investments’ into the conversation is a mystery. ”
I injected obvious tax questions that will be asked. What is office furnishings? If you can’t answer, I understand, but don’t blame me for your problem.
“Replace it all, including income and death taxes, with an easy-to-understand tax on everything.”
Your suggestion is problematic because you refuse to explain the easy-to-understand tax code, which could open the floodgates to litigation.
Why not try again and instead state what the word everything consists of? I provided concrete questions that you still need to answer.
Did you purchase the office furnishings? If yes, then those furnishings should have been taxed at the time of purchase. Go ahead deduct that tax paid LATER on government forms. It doesn’t change the fact you paid the tax at the point of sale.
“Did you purchase the office furnishings? If yes, then those furnishings should have been taxed at the time of purchase.”
JAFO, how do you distinguish office furnishings from factory equipment? If you tax everything at the point of purchase, you are talking about something that resembles a VAT.
“Go ahead deduct that tax paid LATER on government forms. It doesn’t change the fact you paid the tax at the point of sale.”
I don’t know what you mean. However, a VAT doesn’t tax those things already taxed and paid. It only taxes the new additions.
More ‘what abouts’? Dude, today’s tax code is nothing but ‘what abouts’ and ‘where as’s’. How can you agree it needs to be simplified then turn right around and ask for basically the same carve-outs, deductions and credits today’s bloated tax code already has? In other words (and as I originally stated/asked) what’s simpler than a single consumption tax at the point of sale? Instead of agreeing or disagreeing on the simplicity, I get ‘how about when, this and that’ and ‘investments/business credits and deductions’. Oy vey, I offer simple and your first (and only, so far) response to immediately ask how to make it complicated and under what conditions can it be so? We’re clearly not on the same ‘simple’ page. I’ve been upfront and clear, “every item and service is taxed” at the point of sale, not at every step along the way (like the Brits do with VAT. VAT is built into the costs that create the final selling price over there.) I’m not offering VAT. I suppose you could say I’m suggesting a national sales tax…I’d agree to call it that instead of VAT. There’s a difference. but what can be deducted on tax FORMS, after the tax was paid at point of sale, is NOT what I’m bringing into the thread – YOU ARE. To me, it’s a completely seperate transaction, completely unrelated to buying a stick of gum, even if that gum is for a business dedection later on. Yes, you can have one without the other in my example, they are not reciprocal causes to effects. Disagree? I’m ok with that. And if that’s the case then please, offer something as simple or better yet, ‘more simple’, than I’ve offered. It’d be interesting to have that discussion instead of the current I suggest, you pick-apart, chat.
“More ‘what abouts’? Dude, today’s tax code is nothing but ‘what abouts’ and ‘where as’s’. ”
Dude, if you wish to delve into policy, you need to be able to respond to the ‘what abouts.’ If you can’t do that, you are blowing smoke.
“How can you agree it needs to be simplified then turn right around and ask for basically the same carve-outs,”
JAFO, I didn’t ask for any carve-outs. Reread what was written. If you are not exacting with your words, you end up with an unnamed bureaucrat creating law and litigation.
“single consumption tax at the point of sale?”
I told you that sounded like a VAT, and you objected. Earlier, you said you weren’t discussing a VAT, but your words were ill-defined. For instance, what is the point of sale? Is it each step of the way or only to the end user? The meaning of the end user has to be defined as well.
You need help explaining yourself. Please don’t get mad at me for asking questions.
“every item and service is taxed” at the point of sale, not at every step along the way (like the Brits do with VAT.”
If so, we return to tax avoidance (no value judgment implied). What do you do about the Rembrandt hanging in a business’s office along with numerous other devices to hide money from being taxed? What about resellers? You can’t form a law by using examples (buying gasoline); it has to be written out to include these things. I am not against or for a consumption tax, but I definitely lean away from loopholes or poorly constructed laws.
JAFO, I don’t like what I see with a consumption tax or a VAT but either is better than the system we have today. I don’t like a flat tax either but it is better as well. Others might scream, but I consider using a type of consumption tax and a flat tax on high incomes with controls. My reasons for thinking about something of that nature are to lower the amount people pay so that cheating is more costly than savings and satisfy some of the socialist urges. The sources of money could be for different things, so the consumption part would become more expensive if the funds were for social programs. I am wedded to none because a simple plan can be devised but not passed because the interests of our legislators are in their well-being, not in the interests of the public.
Do you recognize how much shenanigans happen when big money is concerned? Look at the 501c3s, how the tax laws are bent, and the results of government efforts that too frequently make things worse.
As a final point, and not to add a whole new discussion, present-day technology makes the idea of a VAT more attractive, in part because it eliminates many definitions.
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I guess just wasn’t expecting an attorney-style, put them through the third-degree dialog, than most. I didn’t expect to hash out any legislation on this blog. It was just a simple suggestion. My bad – I guess. 🙄
JAFO, what you want is what I want. Unfortunately, in my quest to find satisfactory answers, I ask questions to learn from others. That is what these blogs are about. Neither of us have all the answers. Someone may have additional suggestions or criticisms that can move us forward.
The political and financial concerns of a few create an abdominal tax code. This blog has enough brainpower to make a far better one, and you are part of it.
“Like”, Since I can’t click it. 😊
Thanks, JAFO; I wish regular people would talk about these things because then they would become more aware of how good ideas are compromised by politicians who want to get reelected and those who want the government to support them.
One of my pet peeves is the tax deduction for charitable organizations and 501c3s. Charity is part of my life and what I believe in, but when it becomes organized under government agencies, which is what happens with the tax deduction, it goes rogue.
Today, illegal (not legal) immigrants are flown all over the country. They are helped to cross the border illegally to the detriment of the American public because of charities that have grown tremendously because of these types of actions. These charities get taxpayer money plus the charitable tax deduction that other Americans pay for. I won’t mention the high salaries, the political maneuvering, etc. I would do away with it all and continue to give to others as I have always done. Being charitable doesn’t mean getting something for one’s dollars or getting things others pay for.
good point.
The issue is. TAX WHAT. A federal sales tax. VAT. But ON WHAT? Manufacturing equipment? A new line that cost $100 million? Farm Fertilizer and Chemistry? It can run over $150per acre. Small farm one family is 1000 acres. The we get into what sales are tax exempt? A VAT tax could only get approved if the 16th amendment is repealed.
The good thing, the rich spend lots of money, generate lots of VAT
An open attempt at Marxism right before your eyes. Nothing short of Romanoving these people will suffice.
But is it really Marxism? Right now, the government is creating money and inflation. We have brought in millions of low-skilled illegal immigrants, and who benefits? Democrat elected officials, and rich people who need cheap (and hard-working) labor. So taxes have to go up. Sure can’t get it from the middle class. Plus, we spend about 16% of GDP on medical costs, and Medicaid is going broke very soon. We have a choice – end immigration, end welfare as we know it, end student loan programs, end the NEA, institute national health care, try to treat drug addicts with involuntary rehab and if unsuccessful – imprison them, execute criminals (murderers and drug dealers – inmates caught with drugs or weapons, inmates who rape other inmates or assault them in a major way), end offshoring, and end equal opportunity and civil rights protections for minorities OR continue to paste over these issues with deficit spending or cover the problems up with massive tax increases.
The country has let things get out of hand since the 1950s or so, and the glaring problems have been covered up with deficit spending. End the problems, or suffer with deficits/inflation, or increase taxes in a big way. And I don’t think the country is going to end the problems. It’s doable, but it will not happen.
You are correct about everything you say and the current objective is to destroy the country, which is the first step to Marxism. Illegal immigration is not about jobs; it’s about chaos
Here is an even better plan! Maybe Warren can push for this!
“In a national radio address on February 23, 1934, Huey Long unveiled his “Share Our Wealth” plan (also known as Huey Long’s “Share the Wealth” plan), a program designed to provide a decent standard of living to all Americans by spreading the nation’s wealth among the people. Long proposed capping personal fortunes at $50 million each (roughly $600 million in today’s dollars) through a restructured, progressive federal tax code and sharing the resulting revenue with the public through government benefits and public works. In subsequent speeches and writings, he revised his graduated tax levy on wealth over $1 million to cap fortunes at $5 – $8 million (or $60 – $96 million today).
Share Our Wealth Proposal
Cap personal fortunes at $50 million each — equivalent to about $600 million today (later reduced to $5 – $8 million, or $60 – $96 million today)
Limit annual income to one million dollars each (about $12 million today)
Limit inheritances to five million dollars each (about $60 million today)
Guarantee every family an annual income of $2,000 (or one-third the national average)
Free college education and vocational training
Old-age pensions for all persons over 60
Veterans benefits and healthcare
A 30 hour work week
A four week vacation for every worker
Greater regulation of commodity production to stabilize prices
Long advocated free higher education and vocational training, pensions for the elderly, veterans benefits and health care, and a yearly stipend for all families earning less than one-third the national average income – enough for a home, an automobile, a radio, and the ordinary conveniences. Long also proposed shortening the work week and giving employees a month vacation to boost employment, along with greater government regulation of economic activity and production controls. He later proposed a debt moratorium to give struggling families time to pay their mortgages and other debts before losing their property to creditors.
Long charged that the nation’s economic collapse was the result of the vast disparity between the super-rich and everyone else. A recovery was impossible while 95% of the nation’s wealth was held by only 15% of the population. In Long’s view, this concentration of money among a handful of wealthy bankers and industrialists restricted its availability for average citizens, who were already struggling with debt and the effects of a shrinking economy. Because no one could afford to buy goods and services, businesses were forced to cut their workforces, thus deepening the economic crisis through a devastating ripple effect.
“Our present plan is that we will allow no one man to own more than $50 million,” Long told the radio audience of millions. “It may be necessary, in working out the plans that no man’s fortune would be more than $10 or $15 million. But be that as it may, it will still be more than any one man, or any one man and his children and their children, will be able to spend in their lifetimes; and it is not necessary or reasonable to have wealth piled up beyond the point where we cannot prevent poverty among the masses.”
https://www.hueylong.com/programs/share-our-wealth.php
More at the link above.
Here is another blurb:
Long by-passed the negative press by distributing his own newspaper, The American Progress, and he spoke directly to a national audience through radio speeches and speaking engagements. After addressing a crowd of 15,000 in Pittsburgh, a local official estimated that Long could easily win 250,000 votes in his district if he ran for President. By 1935, Long was the third-most photographed man in America, after President Roosevelt and celebrity aviator Charles Lindburgh.
A political poll by the Roosevelt re-election team, the first national poll of its kind, revealed that Long was siphoning key Democratic support from FDR’s campaign. Democratic National Committee Chairman James Farley estimated that Huey could draw up to 6 million popular votes in the 1936 election. According to aides, Roosevelt hoped to “steal Long’s thunder” by embracing some of his causes.
Long’s rapid rise in national popularity is credited with Roosevelt’s Second New Deal of 1935, a more liberal version of his New Deal agenda, which included proposals for Social Security (old age pensions), the Works Progress Administration (public works projects), the National Youth Administration (financial aid and employment for students), the National Labor Relations Board (rights of unions to organize, minimum wage and 40-hour work week), the Public Utility Holding Company Act (regulation of public utilities), the Farm Security Administration (assistance to farmers), and the Wealth Tax Act (graduated income and inheritance taxes).
FDR was popular – though he likely would have lost to Wilke had the War not intervened.
But he was disasterous as president.
The great depression was worse int he US that much of the rest of the world.
The US had the unique distinciton of having a double dip Depression as a result of FDR’s policies.
FDR saw it as an opportunity to expand govt.
Obama did the same when he came into office 2008 recession.
Econ 101 is the deeper the recession, the steeper the recovery. Unless the Fed is mucking about and slowing recovery. By expanding fed Govt
Huey Long was one of the most corrupt scam artists in American history. Just like Warren, he played to the common man while enriching himself with government money.
Just like all socialists/communists – use up all the available capital trying to create that always-just-beyond-your-grasp utopia of free lunches for everyone. Are we going to allow the progs to destroy the greatest economy since the merchants of the Renaissance? We have one last chance, as Elon Musk predicts, to save this nation once and for all. If we don’t then the likes of warren will bleed us dry and allow china and russia to compete for world hegemony
The threat posed by China and Russia is NOT economic.
China is in trouble.
One of the reasons for the fear that China will invade Taiwan is to distract from its internal economic problems.
The left attacked the “Bloodbath” part of Trump’s speech, but the actual fault was fomenting a trade war.
I personally do not expect exploding Mexican production of sino-mexican cars.
But lets say the Chinese/mexican manage to produce cars that are a substantially better value that those made by Detroit.
The rather than make those artificially more expensive – we should buy them.
We are in the midst of many transitions – politically economically and globally.
Though the 10M illegal immigrants in the US may disrupt that.
Manufacturing is slowly returning to the US – we are the largest and wealthiest market in the world.
Except for labor – we also have the cheapest production costs in the world – we have the best transportation system in the world, the best logistics, the most reliable energy costs and the cheapest energy costs and for products produced in the US the lowest delivery cost.
The labor cost problem is being solved by automation.
Though it would also be possible to thwart those sino-mexican cars by building the factories in the US and using the 10M illegal immigrants to produce in the US rather than Mexico.
Regardless auto workers in Detroit will lose no matter what.
That is unfortunate, but it is how free markets work, it is a REQUIREMENT for rising standard of living.
Standard of living rises when less human effort is used to create more human value.
Rising standard of living ALWAYS means disruption of portions of the workforce as more efficient means of producing what we value allow us to produce more for less.
The ultimate threshold for the tax would be just above her income/asset level. As if by magic she’ll escape being subject to this unconstitutional plan
She (can I say that?), Bernie, and nearly every other Congress Critter always ensure they’re never ensnared in their own soak-the-rich tax schemes.
Punish people for achieving. Sounds like a plan and oh so what the Founding Fathers had in mind.
FREE PETER NAVARRO!!
Hasn’t it been clearly demonstrated, recently in so many areas, by so many DEI government functionaries, that none of them have even a slight grasp of the ethos of our constitution or the understandings of our founding fathers. And that is because their goal is not to support our constitution, but to tear it down because (in the now infamous words of our latest Supreme – it hamstrings government) that is their end goal.
Sadly, this tax increase is necessary. And better than the alternative of massive deficit spending. Not that this will fix that. But, yeah, screw the rich! Tax private jets! Tax yachts! Tax homosexuals without children! Tax college professors and DEI staff!
The US is currently collecting as tax revenue 21% of GDP – we have NEVER successfully done better than that,
The historical average is closer to 17-18%. Frankly 21% is surprisingly high and likely unsustainable.
The US does NOT have a tax revenue problem – it has a spending problem.
You can increase taxes all you want – we are at or past the point already where higher taxes will result in LESS revenue.
I know it is hard for left wing nuts to grasp – but people – even the rich produce BECAUSE of the wealth they get in return.
Increase taxes and you will decrease what is produced – you will decrease standard of living.
Several here talk about a flat tax – that is optimal.
But the BEST flat tax – is a fixed tax per person. Not a fixed percent tax per person.
The former produces the greatest incentive to produce.
You discussed at length Longs proposal.
But you failed to think – Why would anyone work under Longs scheme ?
If everything is free – why work at all ?
Incentives matter.
I do not think everything should be free. That is why I think welfare, as we know it, needs to be ended. That is why offshoring should be ended. And, why I think most anti-discrimination laws should be ended. People must work, but when they do work, when they put in their 40 hours per week, they should be able to live decently. I am a very unforgiving and harsh sort of person. The last thing I wish to do is make it easy for lazy bums to be comfortable lazy bums, at society’s expense. I am 70, pretty much a medical shut-in, and I still work 2 part-time jobs from home. Just to support a house full of critters, but still, if I can do it. . .
Unfortunately, my harsh ideas will not ever be implemented unless there is a serious crash, economic or war or natural disaster, and maybe not even then. So in the meantime, more taxes at the upper end of the financial spectrum, where they are less likely to increase prices (as opposed to income taxes) can’t hurt much. And maybe it is time for government to weaponize against the rich for a while, instead of on their behalf. That being said, I think Warren’s plan is going nowhere, but if it did, she is lowballing it. If it did pass, and the rich had to start selling stuff, that would be a hoot. Especially when the prices took a hit due to the massive selloffs.
The rich don’t do INCOME
They do Wealth Appreciation!
Time to do a 5% tax on the GROSS of all wall street transactions. I pay a sales tax on cars, realtor fee on housing….LET THEM PAY…regardless of “profit”
The rich have TAX scams to ERASE profits….Listen to Warren Buffett “For example, on wind energy, we get a tax credit if we build a lot of wind farms. That’s the only reason to build them. They don’t make sense without the tax credit.”
You do not seem to grasp that in some form or another – that wealth on Wallstreet is YOURS.
That is your 401K. Or that is the corporate investment that assures that your home or apartment will be built, that farms will provide food to your table., that you will have that smartphone or laptop.
All the value on wallstreet is the capital that is invested to produce what you want and need.
The correct tax rate for capital and investment is ZERO.
You note that wind farms are a scam. The way to fix the scam is to get Gvoernment OUT of the economy – not embed it deeper in.
Do you really think the people who are stupid enough to have subsidized wind farms would do better if they had more money to play with ?