Is this tax proposal unfair?

[msc545]

Today, the United States has more income and wealth inequality than almost any major country on Earth, and it is worse now than at any time since the 1920s.

At a time when millions of Americans are working two or three jobs to feed their families, the three wealthiest people in this country own more wealth than the bottom half of the American people.

Over the last 30 years, the top 1 percent has seen a $21 trillion increase in its wealth, while the bottom half of American society has actually lost $900 billion in wealth. In other words, there has been a massive transfer of wealth from those who have too little to those who have too much. For the sake of our democracy and working families all over America who are struggling economically, that has got to change.

In order to reduce the outrageous level of inequality that exists in America today and to rebuild the disappearing middle class, the time has come for the United States to establish an annual tax on the extreme wealth of the top 0.1 percent of U. S. households.

This wealth tax would only apply to net worth of over $32 million and would raise an estimated $4.35 trillion over the next decade. Anyone who has a net worth of less than $32 million would not see their taxes go up at all under this plan.

Very fair!

Very unfair!

[exitseven]

I say it is fair but the problem is the ultra rich have armies of lawyers and accountants that can hide their wealth off shore so they never really pay their fair share. Then all of a sudden the wealthy is no longer people earning a billion dollars and decide it is anyone that earns over 100,000 dollars. So the middle class gets soaked again. We really should have a flat tax and everyone pays the same.

[WindAtMyBack]

A flat tax would mean that the lower classes pay MUCH more tax.

[msc545]

@WindAtMyBack effective tax, yes. That is a major problem.

[WindAtMyBack]

With a true flat tax "effective tax" would no longer have any meaning. Effective tax includes deductions. As soon as you introduce deductions it's no longer a flat tax.

The point is that a flat tax would lower the tax of upper income people. So lower income people would have to pay MUCH more to make up for it.

[exitseven]

@WindAtMyBack why do we need deductions., ? It will be like sales tax, everyone pays X% of their gross pay at the end of the year. The rich will find it harder to avoid taxes and it will be a much more fair system.

[WindAtMyBack]

"The rich will find it harder to avoid taxes"

What you propose would be a HUGE tax avoidance by the rich. It would dramatically lower their taxes, while increasing the taxes of everyone else.

Here's a simplified example of how it currently works.

Top 20% of income pays 20% tax
Next 20% pay 15%
Next 20% pay 10%
Next 20% pay 5%
Lowest 20% pay 0%

With a flat tax, the top 20% will pay less, and the bottom 20% will pay more. But it's even worse than that, because the top 20% pay tax on a much higher income, which means they pay far more than 20% of the taxes.

I think if you looked into it, a flat tax would not even be mathematically possible without a tremendous reduction in total tax revenue.

As for deductions, technically they are not needed. I only brought it up because you brought up effective tax. When you talk about effective tax, you are talking about deductions.

[msc545]

@WindAtMyBack Make up for it for what reason?

[WindAtMyBack]

If you have a reduced tax from one group, then you need an increased tax from other groups. That's assuming you want the same total tax revenue. If you are OK with dramatically lower total tax revenue, then you don't need to make up for it.

Dramatically lower total tax revenue is the ONLY way to have a flat tax rate that is the same for everyone (like the OP suggested).

If you just want a flat tax (meaning no deductions) but still have different tax rates for different incomes, that is something very different. It also introduces it's own problems and will increase the need for higher overall tax revenue.

[exitseven]

@WindAtMyBack If there were no deductions the rich would pay a percentage on their earned income. If they earned the money in the US then they pay a percentage f that number.

[WindAtMyBack]

Yes, but with a flat tax they would pay less, and others would pay far more.

Deductions are a different topic. A flat tax would not have deductions, but there is a lot more to it than that. Deductions are basically a way for the government to control people's money. People get a deduction ONLY if they use their money in a way the government wants them to. So it's not entirely their money if they can't do with it as they please. Deductions are government programs that are not part of the budget.

You can look at it this way. Let's say someone spends a million dollars on a program, and get a 37% tax write-off, then the effect is that the government spend 370K on that program, but get the

[WindAtMyBack]

Whoops, I accidentally hit submit.

Let's say someone spends a million dollars on a program, and gets a 37% tax write-off. The effect is that the government spends 370K on that program, and the person spends the other 670K. This is very effective use of that money on the government's part. They get the full program, but for only 37% of the cost.

The government loves playing this game and there are a lot of variations to it. They do it with individuals, with companies, with states, and with local governments. They use a small amount of money to control a much large amount of money. That's what deductions are all about. The government is controlling that money.

[exitseven]

Thanks for the MHO😎

[Hispanic-Cool-Guy]

I can support it. Reagan started this BS of giving the ultra rich big tax cuts 40 years ago, now the effects is what we see today with stagnant wages while cost of living constantly goes up and the richer gets richer and the poor gets more poorer.

[RealMarek]

The elites have unfairly transferred wealth from most people to themselves via mass immigration, covid lockdowns, regulatory intervention, environmental policy, the replacement of pensions with 401ks, monetary policy, bank and corporate bailouts… the list goes on and on. There is no remedy as long as the current elites, who despise common Americans, have a tight grip on all institutions of importance. A lot of that wealth is in the form of assets like land. What must happen is a policy of expropriation without compensation of the assets of the elites to the state, the replacement of the fiat dollar with gold-backed currency, the transfer of most federal land to the states (large fed holdings are a stranglehold on the economies of western states and studies have shown the states manage public lands better than the feds), and a complete re-write of the regulatory codes to prevent instead of fostering megacorporations. Programs would be needed to transition assets to homesteaders and smallholder-owned businesses. The reform of agriculture to gradually rehabilitate land from chemical fertilizer dependency and overspecialization to mixed livestock and crop use, as well as breaking agribusinesses stranglehold by allowing the saving of seeds for replanting, would create jobs for countless families and result in a much healthier food supply and population.

Mainstream conservatives and libertarians might cry that this is communism or theft, but if they are unwilling to take actions like these (i. e, wield power to shape the economy and society), but this shows how the regime uses them as containment. As such, they unwittingly support a status quo that puts them in the neoliberal banana republic in the firm grip of an elite that hates their guts.

[stepyo99]

This. The United States is far more broken than a simple wealth tax will fix.

[Anonymous]

Fairness is not the issue. The top 1% have all the money and the federal government have a massive defecit and is looking to expand the US military, taxing the working and middle classes won't get them the money they require. The majority of taxes are paid by the wealthy because the middle class has shrunk and working classes wages are low. A nation of minimum wage earners can't be taxed to give much. More and more the US is starting to mirror the old Roman Republic/Empire with virtually all the money in the hands of a few wealthy oligarchs.

[Opinion Owner]

Sorry to reiterate fairness is not the issue, if the federal government could get the wealth from the middle and working classes they would but they've been squeezing them since the 70s.

[WindAtMyBack]

"because the middle class has shrunk"

The middle class has shrunk because they've moved into the upper classes. The entire spectrum across the board is far richer than they were in the past. That includes the lowest classes.

[Opinion Owner]

@WindAtMyBack they've shrunk because there are simply less.

[WindAtMyBack]

It sounds like you are saying that they shrunk because they shrunk. But why?

What I said is true. There is a smaller percentage of middle class because they moved up, not because they've moved down.

[Opinion Owner]

@WindAtMyBack no because they died or no one replaced them. This is the first generation that's doing worse than the previous. Baby boomers like bill clinton are approaching 80.

[jshm2]

Hardly call that a proposal at all.

You need to understand taxation and economic policy better. You cannot just arbitrarily declare a few people pay x amount of tax because you want them to.

The problem isn't tax anyway, it's pay. America tends to have among the shittiest wages in the developed nations.

[WindAtMyBack]

What you propose would completely wreck the economy. It would have the exact opposite effect of what you want to accomplish. It would make it far worse for lower income people.

I don't know how you expect these people to pay the wealth tax when they don't have the money and have no way to get it. Quite simply, you have no idea what you are even talking about.

[msc545]

how would it make things worse for poor people who would see no change in their taxes as a result of this?

[WindAtMyBack]

1) Because it would completely wreck the economy.
(The 4+ trillion you mentioned is a fifth of the total money supply. I have no idea how you came up with that number in the first place.)

2) Because it would mean their taxes would go up.
(Because the wealthy would no longer be able to pay as much as they do now)

3) It would wreck the pension and other retirement funds of tens of millions people.
(Because it would completely crash the stock market which the majority of Americans depend on.)

In general it would be so devastating that it would affect pretty much every aspect of everyone, but hit the lower classes the hardest.

[msc545]

you keep talking about end effects without saying how what I proposed would lead to them.

[WindAtMyBack]

I already said why, in parenthesis.

You can't just take a fifth of the total money supply like that. Where is the money even going to come from? The uber wealthy certainly don't have that kind of money. Not even close.

The super wealthy are tax generating machines. Why penalize that? Let the people who are good at it keep generating taxes. Why redistribute the money to people who suck at generating income, and will ultimately pay far less taxes? It's a net loss in tax revenue.

What you are proposing is a short term increase in tax revenue, but a long term decrease. With the burden shifting downwards to lower income levels.

The uber rich don't have the money to do what you propose. The only way to get the money is to sell their stocks. Even then they won't be able to get it because it will crash the stock market long before they are able to sell their stock.

Most retirement funds are invested in the stock market. The majority of Americans also own stocks, usually through mutual funds. If the uber rich have to sell their stock to pay this tax you propose, the market will crash. The pension funds for state workers, union members, and other pension plans for normal people will crash. The retirement savings for ordinary people outside of official pensions will crash.

The stock market is not for the uber rich. The stock market is for ordinary people. If the uber rich are forced to enter the trading market to sell stocks, the ordinary people will severely suffer.

[Anonymous]

No but they'll leave the US and you'll raise nothing

[msc545]

I doubt they will leave. If they do, good riddance.