Im afraid you'd need to be pretty liberal with your definition of rich at this point to dig us out of this hole through taxes alone.
Tax wealth somehow, not just income. It's clear the accumulation has become a generational problem. Your great grandkids could cure cancer and bezo's could do nothing and yours would never have a fraction of the wealth his have.
Even with their preposterous salaries, NBA stars would have to work for millenia without spending anything before getting Bezos-level wealth.
> Your great grandkids could cure cancer and bezo's could do nothing and yours would never have a fraction of the wealth his have.
This isn't a problem.
It's frustrating that people honestly think this isn't a problem. What's the point of the system of economic value? It's supposed to make our exchange of good and services more efficient. What's more efficient about a handful of dudes hoarding effectively the entire supply? It works better when value is evenly distributed throughout the system. It's the whole point, in fact. If we allow it turn into a high score game where the winners are the ones with the best cheats we make a system that increases overall suffering, inefficiency, and rent-seeking.
They aren't hoarding supply. The value is tied to that business continuing to be useful.
The fact that people hold this opinion is part of the problem. Nobody can see beyond how a problem effects them, especially when it comes to wealth.
Also that this wealth is dependent on value. It's not like having cash. It's shares, whose value will go down if the company stops providing value.
Yes, in this theoretical world where stocks trend down over extended periods of time, I could see this being an issue.
In the fairy farts world of the US stock markets, we don't often see mega corps trend down. That's why every American pension is piled into SP500... Which is really driven by the growth of like 10 companies, tops.
But that's only if they keep generating value. Plenty of companies don't do that and we forget about them. Basing one's worldview only on peak performers is the apex fallacy[0].
[0] https://rationalwiki.org/wiki/Apex_fallacy (I know, I know, rationalwiki)
It doesn't need to hit peak. It just needs to be a good bit above where it was issued. Zuckerberg, e.g., could run this strategy indefinitely, even if meta dropped by 50%. He'll still defer the cap gains until his grave.
Once capital grows large enough it starts being able to bend the fabric of economic space around it. It begins to change rules and accumulate more capital merely because it's so big. This is a natural feature of capitalism. Properly attended to, fire makes steam and runs an engine. Left unchecked, it's a forest fire. Capitalism is like that. It needs moderating influences to keep it controlled and useful and not consuming everything it touches.
> Tax wealth somehow, not just income.
This is a critical point - in my opinion, wealth can't be at the same time a collateral to acquire more assets or to buy cheap money, and something that can't be taxed.
Either tax it or make credit/debt to be considered income after a certain net worth value, like 100 million would be more than enough.
>Tax wealth somehow
I don't unserstand how you can tax something that varies in value by double digit percentages every week. If Elon got taxed when TSLA was $450 per share, and six months later it's now $250 per share... How much should he be taxed? Should he be provided a tax refund?
We have computers in our pockets that can perform trillions of calculations per second; we have social media sites capturing terabytes or petabytes of data per second; we have LLMs with trillions of parameters. So it boggles my mind to see someone say "we can't tax wealth, that'd be too complicated! We'd have to do dozens of calculations per year!"
You're imagining taxes as being one big annual chunk, but it doesn't have to be that way. It could be more like sales tax: baked directly into how these financial instruments work. You're also imagining taxes as computationally difficult, but they're absolute baby math compared to something like rendering a single 3D frame -- they're only artificially difficult for people because Intuit lobbies to keep it that way.
People get infinitely creative with financial instruments like collateralized debt obligations over mortgage-backed securities, but as soon as we suggest taxing wealth people throw up their hands and go "there's no possible way to do it!"
>We have computers in our pockets that can perform trillions of calculations per second; we have social media sites capturing terabytes or petabytes of data per second; we have LLMs with trillions of parameters. So it boggles my mind to see someone say "we can't tax wealth, that'd be too complicated! We'd have to do dozens of calculations per year!"
No one is saying that it's "too complicated" to calculate someone's net wealth in basic securities. I did not make that claim. This is a poor strawman.
>You're imagining taxes as being one big annual chunk
No I'm not, you're talking to someone who pays taxes quarterly.
>It could be more like sales tax: baked directly into how these financial instruments work.
We already have that via capital gains and income taxes.
>You're also imagining taxes as computationally difficult, but they're absolute baby math compared to something like rendering a single 3D frame -- they're only artificially difficult for people because Intuit lobbies to keep it that way.
Again, I am not making that claim neither is anyone else. All the computation in the world doesn't solve for something that is inherently illogical.
>People get infinitely creative with financial instruments like collateralized debt obligations over mortgage-backed securities
These securities are logical to understand.
>but as soon as we suggest taxing wealth people throw up their hands and go "there's no possible way to do it!"
Again, do you get a tax refund if your tax liability went down due to depreciation? How do you levy wealth taxes on assets such as private businesses and ventures that do not have a clear appraisal value, or one at all? Most countries that levied wealth taxes has discarded them due to these difficulties, ones that compute can't solve.
Why don't you help brainstorm ideas instead of being dismissive? There is no right answer right now. Clearly in order for society to move forward in a healthy way, single individuals cannot amass wealth/power that is a millennia ahead of everyone else. The goal isn't to say you can't be wealthy. The goal is wealth/power cannot be obscenely beyond everyone else. These few individuals have more power than governments. This is a complex issue that requires a complex solution. There is no easy answer.
What's the threshold for obscene? That's an easy one, but still requires discussion.
Should a % of assets be frozen and redistributed after that threshold is reached?
Should we Logan's Run the top 10 richest and let the market adjust around that?
There's going to be some preposterous ideas! The answer won't be as simple as raise taxes. Regardless, these discussions need to take place so a good solution for the world can coalesce.
The OP just wants your hands off their money. They know it's a problem. It's not one they want solved. They probably also think they genuinely accumulated their wealth strictly from their own skillset with no external factors contributing to it.
Do they think they're a 100-billionaire too? Life goals I guess.
He can't eat with his shares. He can use them as collateral for debt. Presently, that's how he dodges taxes. You'd close that loophole.
> He can't eat with his shares. He can use them as collateral for debt. Presently, that's how he dodges taxes. You'd close that loophole.
You also don't get taxed on your debts, e.g. a mortgage. You pay interest on your debt instead.
>He can't eat with his shares.
You can't eat with your brokerage account either, what is the point?
>He can use them as collateral for debt.
Yes, you can use your brokerage account, house, etc. as collateral for loans, this is not new or unique.
>Presently, that's how he dodges taxes.
What does this even mean? Loans are not taxable as you have to pay them back.
>You'd close that loophole.
That's not a tax... This is what happens when you get your financial understanding from reddit comments.
The dodgy part is what happens after someone dies. The stocks get a one-time relief from capital gains as it moves to the heir. This gives opportunity for the heirs (or the estate) to sell the stocks to pay back the loan. That is the loophole.
The key here is that you need enough wealth to keep borrowing for rest of your life without touching your principle.
Too late to edit my comment, but one other thing:
>The stocks get a one-time relief from capital gains as it moves to the heir. This gives opportunity for the heirs (or the estate) to sell the stocks to pay back the loan. That is the loophole.
Yes, this step-up in basis happens because the estate is charged estate tax. Charging capital gains AND estate tax doesn't make sense, estate tax is typically higher than capital gains tax.
This is a key piece a lot of people don't understand.
> Charging capital gains AND estate tax doesn't make sense, estate tax is typically higher than capital gains tax.
They should be multiplicative. Everyone is supposed to pay capital gains. And everyone is supposed to pay the estate tax. They're both percentage taxes. It's not supposed to be "pick one".
>They should be multiplicative.
That doesn't make any sense.
>Everyone is supposed to pay capital gains.
Not true. You don't pay if you have capital losses, nor do you pay if you have capital gains in tax sheltered accounts, etc.
>They're both percentage taxes.
No one claimed otherwise.
>It's not supposed to be "pick one".
That's exactly how it is in many cases, even income taxes have been that way for decades (though SALT deduction now limited). Read up on double taxation and why it's typically avoided.
>The key here is that you need enough wealth to keep borrowing for rest of your life without touching your principle.
Correct. The OP likely knows this. Or they're totally ignorant to it. The fact that they think joe blow can execute the aforementioned strategy is vexing.
>Correct. The OP likely knows this.
Of course I know this.
>The fact that they think joe blow can execute the aforementioned strategy is vexing.
You don't understand the aforementioned strategy, nor do you understand wealth taxes vs estate taxes.
>The stocks get a one-time relief from capital gains as it moves to the heir.
Yes, that estate/inheritance taxes need reworking. This is not a wealth tax as discussed, this is an estate/inheritance tax which is different.
>This gives opportunity for the heirs (or the estate) to sell the stocks to pay back the loan. That is the loophole.
The loans are made whole by the estate, no one is taxed on proceeds from a loan, nor should they be.
Tax wealth above $100 million at ~90% upon death.
In other words, make all the money you want, get as rich as you want, but it goes back to the commons when you die and can't use it any more.
You have to ask if that kind of volatility would exist in a system that taxes wealth.
Taxing the rich will have all sorts of positive knock-on effects that will also go a long way towards fixing these issues.
Not really. The top 1% item roughly $50 Trillion in assets. In 2010…15 years ago…that was only $15 Trillion. If you look at the graph of the national debt and the graph of the money supply, i.e. money printing, you will find they basically overlap, correlate, track.
I assume I don’t have to point out that 50-36 is 15, i.e., basically the whole growth of assets has been roughly fueled by “money printing” fraud. (Yes, I’m simplifying a bit)
What has basically occurred, is a fraud, what is not really different than loan fraud. The people in charge of the bank also wrote themselves loans they didn’t have to pay back and left the bank with the $36 trillion debt as they pocketed the both the $36 Trillion in debt, as well as plundered all the assets, i.e., much of government spending not in excess of revenue.
It’s basically been a plundering operation that has only escalated over the last 25 years and is the greatest national security threat to the US and arguably the security of the whole planet’s civilization. It’s short sighted greed.
And yes, this whole community is heavily involved and engaged in it as the VC money has flown like water for 20 years now … backed by fraudulent government “money printing” that has plundered regular people.
It will have consequences, one way or another. The devil always comes to collect when you don’t expect and in the worst way. That’s not a superstition, it’s a metaphor of human nature learned over unknown millennia of the same catastrophic patterns.
Frankly, the only thing that could save anything is to constrain the and revalue currency by seizing the plundered assets of the roughly top 1%, maybe even 3%, and paying down the national debt. It would be painful like drug rehab, but the alternative is OD and death and far greater suffering.
I just want to point that while yes, this is true, there's no physical or economical law that mandates that printed money goes to the finance system.
This happens due to explicit government policy, one that has been relentlessly pushed all over the world since the 80s.
The top 11–12 richest individuals in the U.S. hold assets equivalent to the national budget deficit. Let’s not fool ourselves. The money is there.
The budget deficit so far. So yes, if we were to take all their money, the debt would go to zero for exactly one moment, then we would go back to spending more than we have immediately, but now with the chilling effect that taking wealth like that would have. Not super helpful.
No, you are just underestimating how rich the rich are.
Could you be overestimating how easy it is to take possession of their money given global free trade? In 10 years, what are the odds you and others will have finally, after all these years, actually managed to have “taxed the rich” as has been proposed as the solution to current debt levels for many years now? If we cannot be certain of those tax revenues from finally “taxing the rich”, then they cannot solve the debt problem and we therefore need to look for other solutions. Not that the wreckless and irresponsible cuts from DOGE are the solution. They are likely to increase the size and scope of the government in the long run, after impairing it’s efficiency and operational capacity in the short. Hopefully the dems don’t blow the opportunity this time.
The US government can (and regularly do) sanction entire countries, trade is only “global” and “free” to the extent permitted by Washington.
Saying that the rich could somehow avoid the US government by moving abroad is a fallacy.