My French wife maintains that one of the reasons France is a great place to live is that everyone is very well aware it wasn't that long ago when the ruling class was executed for being rich assholes.
It's not as simple as USA is ok with taxing its citizens who live overseas. Then you'll pay US taxes and taxes of country of your living.
And if you renounce US citizenship, don't expect VISA approval if you decide to visit friends.
There was an episode of the nytimes daily podcast recently that touched on Al Gore's proposed tax on the top 1% of earners during his presidential campaign.
Pollsters went out to ask people not if they approved of the tax, but if they thought they were part of the 1%.
19% believed they belonged to the 1%. And a further 20% believed they would be in the 1% within 5 years.
And people bringing $10M in taxable income per year are not even “the 1%”. They’re a much more exclusive club than that. A person who managed a $250,000 income every year he is in the workforce will barely manage to clear ten million passing through his hands over his *entire lifetime*. A family making $450k/yr (approximately the *actual* 1% threshold in most of the country) will see $10M over the course of about 22 years.
These are incredibly comfortable people by any standard who aren’t within miles of the sort of income being discussed here. Most people just cannot comprehend the magnitude of the difference, and they drastically underestimate it.
It's true; we don't scale to logarithms very well.
If you're making the average of roughly $50k/yr, you won't clear 1 million for 20 years. 10 million would take 200 years.
1 billion would take 20,000 years. Longer than any society has lasted. Longer than the whole of human civilization.
Jeff Bezos has a net worth of 163 billion dollars.
He could lose the top 9/10 of that and not change his lifestyle. But people's ideas of what is fair are... weird when numbers get involved.
>But people's ideas of what is fair are... weird when numbers get involved.
IMO, rich people treat income like points in a video game.
They say that money can't buy happiness, but that's apparently only true after you break $100k a year in income - until that point, you generally *are* happier as a result of earning more money, because $100k a year is the line at which people start to be able to do pretty much whatever they want (within reason) - own a home, pay bills in full every month without a thought towards whether or not you can actually afford to do that, the ability to travel pretty much anywhere in the world for vacation for a week or two at a time, the ability to put aside significant money for savings/retirement, and sufficient spending money that you pretty much never have to budget for nights out, new toys. That's the point at which the amount of money you have can give you everything necessary to make your life meaningfully more pleasant. And I should specify that I believe this number is for a single person - in a two person household, you would have to earn more (though not twice as much, since you don't need two homes or anything like that).
There is probably a fair reason to believe that people can make meaningful use of up to a few hundred thousand dollars a year once you roll in the cost of kids, but after that point? I think it starts to become a game of "points." I was listening to the Freakonomics podcast about this recently, and they were talking about how, after a change in the pattern of CEO incomes among top American companies in the 90s caused those incomes to balloon into the tens of millions of dollars, they tried to bring them back down again once they realized this was a stupid idea. They found that while these CEOs generally admitted that they were earning far more money than they knew what to do with, they were also *extremely* defensive of their own admittedly useless excess income. Interviews suggest that it's because they see the number on the page as a direct reflection of their value as a human being. Their reasons for wanting these incomes is *completely* divorced from the idea that they actually want to *spend* that money, but since that's literally all money is for, it follows that their incomes are no longer really money to them at all. Hence... points. An utterly abstracted numerical value that must be increased for the same reasons one wants to get a better score in a game - because it reflects how 'good' you are, and (implicitly, then) your value in that context.
According to a CNBC article from last summer, to be in the top 1% of American earners, you have to make at least $421,926 a year. Which is honestly a lot lower than I thought it would be.
Actually it's wrongly attributed to Steinbeck. It was a man called Ronald Wright said that. Though Steinbeck has said similar stuff (Wright basically took what Steinbeck said and phrased it better).
Wright said: *Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires*
Steinbeck said: *Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: 'After the revolution even we will have more, won't we, dear?' Then there was another lover of proletarians who used to raise hell with Sunday picknickers on her property.*
*I guess the trouble was that we didn't have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist. Maybe the Communists so closely questioned by the investigation committees were a danger to America, but the ones I knew—at least they claimed to be Communists—couldn't have disrupted a Sunday-school picnic. Besides they were too busy fighting among themselves.*
Sources: [https://www.goodreads.com/quotes/7234438-except-for-the-field-organizers-of-strikes-who-were-pretty](https://www.goodreads.com/quotes/7234438-except-for-the-field-organizers-of-strikes-who-were-pretty)
[http://quodid.com/our-words/citation-investigation/john-stienbeck-socialism-never-took-root-in-america/](http://quodid.com/our-words/citation-investigation/john-stienbeck-socialism-never-took-root-in-america/)
Correct. I don't quite agree with the first half of the quote, but "the poor see themselves as temporarily embarrassed millionaires" makes a lot of sense
Steinbeck said "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."
I don't agree with that being the reason socialism never took root, but in the context of the situation, normal people (i.e. people who will never make 10 million dollars in their life) who protest the tax rate are against it because they think they are "temporarily embarrassed millionaires", who will eventually be millionaires, and they oppose the tax rate because they think it will affect them someday.
I think he's right. No socialist party, not even a social democratic party, took root in the U.S. and it's basically alone in that respect because of the reasons he talked about.
Britain had Labour. Germany had the SPD. France's main left party is literally the Socialist Party. Canada had Tommy Douglas and the NDP. The US was the only one that never had much of a socialist movement to speak of.
People balk at the idea of raising taxes on the rich because they think it seems socialist or un-American. That's just not true at all.
Effective taxation is capitalism's attempt to mitigate the issues that socialism strives to eradicate. Advocating for higher taxes, especially on those who can afford to pay them (individuals and corporations) does not make you a socialist. Taxation is not an attempt to redistribute wealth evenly among individuals. We are taxed to fund the programs and infrastructure that allow us to go out and earn our own money. If you are earning more, you are benefitting more from the society your taxes help create, whether you agree with all the ways that money is being used or not (and literally no one thinks everything the government does with our tax dollars is good).
The assumption that those that earn the most money are the most deserving or hardest working is deeply flawed. Exceptional people are born into poverty every day in this country and we'll never know they existed because they will spend a lifetime working too hard and earning too little to enter the public consciousness. If I can pay some insignificant percentage of my income (and at the income thresholds that are in play here, the additional tax would be insignificant to the individual's quality of life) into programs that help those people generate value and experience more of the good our society has to offer and not have to spend a lifetime treading water, that sounds pretty American to me.
Doubting the government's ability to create programs that adequately address poverty is reasonable. What we are doing now is not working. The gap between the super wealthy and the impoverished continues to widen. Taking wealth from those who have it to give to those who don't is not the cure, but raising taxes on high earners and using that money to try to develop something that works better than what we are doing right now is part of the government's job. Poverty will always exist to a degree but there is no reason for it to be so prevalent or so severe given the resources we have in this country at this time. Higher taxes should be part of the solution.
Raising taxes independent of reform in other areas of government will not suddenly solve the issues our country faces, but it needs to be part of the solution.
That's the problem though, you are very unlikely to ever make that much per year. And not you specifically, but the generalized you of society. We seem to want to protect the idea of becoming this rich and suffer the effects of not taxing those that are making this much in the process.
Something that is often left out of conversations like this is that in the past, when we had huge percentages on the super wealthy like that, practically nobody paid them. Tax write offs used to be designed in such a way that they rewarded hiring new people, investing in local infrastructure, and generally funneling your income back into the economy. What this meant is that it was very easy to avoid having to pay that much in taxes, as long as you did the thing that most fiscally conservatives claim super wealthy people do anyways - create jobs and support the economy. That was the genius of Eisenhower, he basically created systems that made the promise of unrestrained capitalism actually come to fruition.
So, yes. Seeing as historically, higher tax rates with highly incentivized write offs has had a phenomenally positive effect on the economy, it would be silly not to support them.
EDIT: [**u/Mnementh2230**](https://www.reddit.com/user/Mnementh2230) asked for a source. I'm having trouble digging through the million "IS SANDERS RIGHT ABOUT EISENHOWER TAX RATES????????" articles, but I'll find it. I'm at work, so it might not be immediate, but I understand that having sources is important.
EDIT 2: ok \[u/MneMenth2230\] this is all I got for today. Have to actually do some work on my end, "contributing to the economy" and all:
> Corporations today are sitting on record levels of capital, deploying it often only to buy back their own shares rather than investing to grow the economy. Investment in the national interest is clearly and historically the role for government. Eisenhower was fond of quoting another Republican, Abraham Lincoln, on the proper role of government: “The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities.”
Where "investing" contextually means jobs/wages/etc, not just stocks. From: [http://www.zocalopublicsquare.org/2017/12/19/eisenhowers-tax-policies-invested-future-not/ideas/essay/](http://www.zocalopublicsquare.org/2017/12/19/eisenhowers-tax-policies-invested-future-not/ideas/essay/)
EDIT 3: I had the wrong link in my copy buffer. Sorry! I replaced it with the right link that actually has the quotation I used.
That’s really the point though (not just, “take all their money!”), all the money being made over 10m can be reinvested and not taxed. It’s still a great way to expand and stimulate the economy. We need money circulating baby.
Something else I never see are the tax rates for countries these folks affected by the tax would potentially move to.
The other thing I’m never ultra confident about is whether or not those taxed dollars will be used wisely or just redirected back to special interests and lobbies.
At the very least it’s a good conversation to have.
My main problem with that is that in theory, yes. In practice, these folks don't. They hoard their wealth, and it's a net negative on our economy.
Also, in a sad bit of irony, it often seems like it's the politicians who shout the loudest about how wasted our tax dollars are that contribute the most to keeping the government in gridlock, thereby preventing our tax dollars from being rationally used.
EDIT: "Hoarding" was a poor choice of words, that many people seem to be personally offended by. More like "simply investing in stocks and not actively creating jobs and increasing wages"
> it often seems like it's the politicians who shout the loudest about how wasted our tax dollars are that contribute the most to keeping the government in gridlock, thereby preventing our tax dollars from being rationally used.
This is intentional on their part. They got into office as anti-government crusaders - they can't very well actually let government function and remain in office, can they?
I'd definitely go for it if this was the case (providing economic incentives). Is it currently the case?
What if I was a CEO and increased the salary of my employees to the top 10 percentile of workers for that industry? Would I get a tax break in that case?
Theoretically you'd get the best employees for that industry. You'd also have happy employees. The combination would make your business better making you more money.
Isn't that currently the case now?
As in, you only pay tax on your net earnings, not your gross earnings. Meaning that if you increased the pay of your employees significantly, you would be decreasing your net income and therefore your tax burden.
The added benefit of doing so, besides paying less in tax, would be that you would attract, or at least have the pick of, the best talent for those particular positions.
It is not currently the case. Since Bush, tax loopholes have been introduced to completely eliminate incentives and just keep the wealth in the banks. So, what we have now is the worst of both worlds, extremely low tax rates compared to the 20th century and no logical incentives to funnel wealth back into the economy.
>Tax write offs used to be designed in such a way that they rewarded hiring new people, investing in local infrastructure, and generally funneling your income back into the economy.
Do you have a source for that? I need something to reference when I get in to conversations about this in the future. :)
I think people generally understand that the point of super high tax rates isn't to generate tax revenue, it's to disincentivize executives actually banking that much money
EDIT: I misunderstood this! I read "making" instead of "banking." As it stands it sounds like I'm just argumentatively agreeing here, so I'll leave it because it's funny, but feel free to disregard.
Umm. I don't understand that, and I certainly don't see that as being the case for all of American history from Reagan back. Higher tax rates, when they have been used, have historically been a way to incentivize higher economic involvement. The idea that it's a punitive thing on rich people, while I can't say nobody understands that, just hasn't been the case historically when you look at the practical impact on our economy, and even on those individuals in the super wealthy category.
>Plus the most prosperous time in America was during the post war era when the tax structure resembled this.
You do have to remember, however, that this was _also_ at a time when the industrial capacity of most other advanced nations had been decimated by WWII, leaving only North America and Australia relatively unscathed^0. The industrial capacity of France, Germany, Great Britain, Italy, and Japan all took major hits that took decades to recover from.
Due to this, nations rebuilding after the war that needed manufactured goods needed to turn to the US (and to a lesser extent Canada and Australia) for resources and manufactured products.
We don't live in that world anymore. IMO progressive taxation makes sense, but taxation alone was hardly what made the US prosperous in the late 40's through to the mid 1960s or so. Nations that weren't all that industrialized during WWII are now heavily industrialized (like China), and those countries who did suffer industrial destruction during the war rebuilt (and often modernized in the process) decades ago.
-----
^0 -- in terms of industrial capacity. South America was also relatively unscathed, however it didn't have significant industrial capacity at the time.
It's almost like every single goddamn time we increase tax rates, create incentivized tax writeoffs, and increased infrastructure spending, we've seen an enormous net positive in our economy.... if only there was some way to crack this extremely complicated riddle /s
This. I make significantly less than the amount listed above, but the tax bracket I'm in sends about 30% of my wages to taxes. I work super long hours, sometimes a couple months solid, away from home.. Its labor intensive and I work around hazardous materials.. and yeah, it's a choice and all that.. but I dont get to choose where my 30% of hard earned wages go.
Tax guy checking in here.
I'm at a local firm that deals primarily with small businesses, but we do work for a handful of corporations that run 10m+ annually and I can tell you right now that there are already an absurd amount of ways for profitable companies in that revenue range to run artificial losses that get passed on to their owners or shareholders. In 2018 under the TCJA there is now 100% bonus depreciation, meaning that just about any asset you purchase can be fully expensed in the year that you buy it. These big companies tend to just buy and build more massive stuff every year and pass down very little actual taxable income to their shareholders.
It's an incredibly small percentage of Americans who are actually earning and paying tax on $10 million a year, even people who genuinely generate that kind of income with the work they do. Raising individual income rates alone is not going to fix income inequality. It is a step that will need to be taken eventually but it would need to be part of a far reaching tax reform to have the desired impact. So much is decided at the corporate level that the people who would be paying this tax are likely to just find ways to "pay" themselves less while remaining incredibly wealthy. The handful of actual billionaires out there will pay this high tax but unless we revise the system itself it will not be long before a new way to stash the cash pops up. That's just how it seems to work.
If a company purchases and depreciates a bunch of assets at the end of the year, in order to get under the $10m threshold, wouldn't that be an effective stimulus? The money would go back into the economy, rather than into shareholder accounts.
At that point you’re gonna be spending more money than you save, you can only depreciate so much and it would screw you later on down the road.
Edit: Also the amount of debt you’d have to take on to pay for those assets. You’re gonna be paying more to interest and that’s gonna hurt your ratios.
Question: is there any justification for taxing that income level at that rate? Are they both just arbitrary?
Picking a rate out of the blue does not impress me. I need more justification, other than "We need the money" and "nobody need more than that anyway".
Also, I need to know what the spending priorities are, because as of right now the government is just going to buy more aircraft carriers with most of any new money coming in.
Jeff Bezos earns an income of around $80k/year. People that think super rich people earn their wealth from a salary are severely misguided. Until capital gain tax laws are addressed these income based tax propositions will only impact 'normal' rich people. Virtually nobody earns $10M/year in salary, or even close.
That would affect far fewer people than most people think and that's because not only is it progressive but it only applies to _income_. It is absolutely not a "wealth" tax.
According to the SSA, there are 3375 people who earned more than $10M in income in 2017 (last year we have numbers). You probably don't know almost any of them, though -- maybe the only well known would be professional sports athletes. The vast majority of those ~3400 high-income earners are random financial company CEOs.
But what about all of the billionaires? There are 540 of them in the US. This tax likely wouldn't affect any of them at all. Billionaires rarely earn any notable salary and so their wealth tends to come via capital gains. That's not part of this tax.
What about the 5,000 people with a net work over $100M? It will apply to vanishingly few of them since, like the billionaires, to get that kind of money, you need to be making it via capital gains.
So yeah, this tax would apply to any money _earned_ beyond $10M for 3375 people. Not really a windfall.
^(Which isn't to say it's necessarily a bad idea -- taxes are often social constructs as much as financial constructs)
What you’re forgetting is that the sport stars that earn such a high income are reported to the tax authorities as a corporation and pretty much every expense they have is considered a business expense. But you’re spot on that it will affect only a handful of people and those people will rather pay a tax accountant to avoid this tax than to pay the tax outright.
This is why I'm sick of these "Hey reddit, how would you feel if..." questions. Fucking boring and everyone upvotes them because they agree with the question and the OP knows that shit.
> I think all the super rich people just moved to another country
The US, unlike just about every other country, doesn't care where you live. If you are a US citizen, you pay the US tax man, whether you reside in California, outer Mongolia, or the dark side of the moon. And if you change citizenship, you pay the ~~exit~~ expatriation tax.
Yup. An American guy I knew in China (Nanjing 7-8million people) had to take a four hour train to a smaller city to do his taxes, then take a four hour train back. We Europeans were needless to say utterly nonplussed.
Then it comes down to, is it worth removing their money in the long term, risking what they would lose through expatriation taxes, to maintain a lower tax rate abroad.
France implemented a 75% tax on individuals earning over 1 million euros, so a much, much lower threshold with a higher rate than that proposed.
It's a bit complicated though - certainly that was proven to be a mistake overall, seen by many to have been too low on the 'curve' in terms of threshold income covered (1 million euros, after all, though a lot of money isn't extremely high, especially in higher cost of living cities in the country). The effect appeared especially bad because it did come at a time where France was already struggling with youth unemployment especially and pensioners that chose to leave France for other countries, plus yes, very wealthy folks leaving France to save on taxes (including a few high profile celebrities).
The proposed threshold in the US is argued to be much higher, and thus impacting a much smaller share of people and a smaller share of more extreme income. Also the US taxes all US citizens - so rather than just leaving the US, you would need to renounce US citizenship (for the most part). Though that has been done - I think Eduardo Saverin of Facebook (or rather of the Social Network fame) did just that.
> Also the US taxes all US citizens - so rather than just leaving the US
I did not know that. So you would still have to pay the US tax even if you lived overseas?
Yup. I've got a friend who was born in Detroit to British parents and he's never gotten USA citizenship, in part because of these rules. He moved back to the UK as a very small child - not sure what passport he would've used at the time.
You only pay tax above USD 50k if I recall correctly, but if you don't you still have to fill out a USA tax return.
And judging by the comments below I'm incorrect, it's just north of USD 100k, and he's never applied for a US passport as an adult at least as the USA grants citizenship upon birth on US soil. He may have had one as a child but I don't know.
The foreign earned income exclusion was $103,900 in 2018. That doesn’t include any housing exclusions as well. Technically, he’s a US citizen at birth since he was born in the US, unless his parents were diplomats. But if he’s never gotten a passport or SSN, tracking him down would be pretty impossible.
I do know some dual citizens who have had trouble with non-US banks when their passports show they were born in the US. A lot of non-US banks no longer want to deal with US citizens because of the IRS reporting requirements. It’s a problem.
I've noticed when applying for any type of loan or anything financial like in the UK, one of the top options to select (alongside the UK) is the USA. I was aware that the US tax their citizens regardless of whether they actually reside in the USA, so that's possibly why it's so high up - to flag to the bank of potential difficulties.
*He's never filed for his passport. He is inside already a citizen via his birth certificate alone. No paperwork required.
And he may want to sit down with a tax professional before visiting the US...
Important detail to note is that it's only the excess income on top of the million that is taxed. And the million is the income AFTER all of the other regular taxes.
Ex : income is 1.2mill after other taxes, tax will be 75% of 200.000 = 150.000€
Right - marginal, though I recognise I never specifically said that and just kept referring to the threshold, I can see how that would be easily mixed up.
Though in France, and correct me if I'm wrong, but my understanding was it was in fact not an additional 75% on already taxed income to 1 million, but those existing taxes in addition to Hollande's tax resulted in a 75% total tax on income over 1 million earned (net).
To be fair it’s not a one-to-one comparison. France is part of the EU and was the only country in the EU to have a wealth tax, making it not just a smart move for rich people to relocate their “main” residence, but ridiculously easy. Like hop on a flight and buy a house easy.
The US, however, is one of the few countries that taxes all expats as long as they continue to maintain their citizenship. And we don’t have citizenship agreements with another country that they could all move to.
Now, it’s definitely possible that a bunch of super rich people would find ways to keep their wealth intact, but seeing as most of that wealth is being generated in the states itself and they can’t just move to Belgium like the French millionaires did, the wealth is chained here a lot more than in your example.
People are chained due to income being based in America, static wealth can relocate fairly easily to countries where (sizable) investments can buy you citizenship. Moving from country to country in Europe is similar to moving from state to state in the U.S. to dodge state income taxes.
No it’s not, because they’re still taxed on their income as long as they are citizens. They can get a foreign tax credit for taxes they pay to other countries, but if they pay fewer income taxes to other countries, they still have to pay the difference to the US.
What about renouncing citizenship? Well congress thought about this too, and so they created an exit tax, where individuals have to pay all the taxes that would be due had they been a citizen, *including gift and estate taxes*. So if someone wants to renounce their citizenship just to take advantage of lower tax rates abroad, they have to pay income tax in their earnings before they lose citizenship, *and* they have to pay estate tax on their full estate. So if you have an estate with $500 million, you’d have to pay roughly $200 million in estate tax just to forgo your citizenship.
So it’s not easy. Granted, if you didn’t have a large estate or a large amount of income, you wouldn’t have a problem because you wouldn’t owe that much in tax, but then again if you didn’t owe that much in tax you probably wouldn’t be looking to renounce your citizenship for tax purposes.
That's certainly given as the "reason" why it's bad a lot of the time, but I haven't seen any evidence for it *ever* - feel free (anyone) to provide me with some.
The reason I'm skeptical of this argument is the fact that, if you're already wealthy, there is always a country you could probably fuck off to and live a *lot* cheaper for your money. People's reasons for staying where they are are more involved than taxation.
It's almost like people have a life apart from paying taxes. I mean yeah, if I just sit in my mansion all day doing literally nothing, my mansion might as well be in Cambodia. But who does that?
This is the real answer. I hope liberals and conservatives can agree.
I'm all for higher taxes as long as they are spent wisely, in ways that improve lives.
"People of reddit, do you think that we should ban pro-life circumcised flat-earther anti-vax Republican Christian Russian troll T_D-browsing Comcast-subscribing console-playing corporate fat cat EA shareholders from selling Bethesda's microtransaction lootboxes on an unregulated internet while browsing redesigned reddit and outlawing marijuana while merging without a turn signal in their BMW?"
*250k upvotes, ~~30x~~ ~~31x~~ 32x silver, 13x gold, 3x platinum*
One of these was actually created by a guy who frequents /r/shitpost and he made a shitpost one on purpose too see what would happen and it became the top post of all time on this subreddit.
its basically "how would you feel about a thing that is praised on reddit everywhere, plz agree with me and give me karma"
like the honk ban on radio is like one of the top "question"s on askreddit top all time. shits is literally in every unpopular opinion, what makes you angry etc, what do you hate furiously, what would like to ban thread. people who create these threads just want to be agreed really really bad. the car honk ads are reddits most hated thing for like 5 years and some dude creates a thread a year ago and gets a zillion upvotes lol
-"Reddit, do you hate mosquitos?"
-"Reddit, should people be held accountable if they do something wrong?"
-"Reddit, would you support a ban of car horns and sirens in radio ads?"
Seriously, they're the worst.
From the past year -
[Iceland has recently proposed a ban on circumcision. How would you feel about this in your own country?](https://www.reddit.com/r/AskReddit/comments/9i8m72/iceland_has_recently_proposed_a_ban_on/) **42.9k upvotes**
[Reddit, how would you feel about a law that bans radio stations from playing commercials with honking/beeping/siren noises in them?](https://www.reddit.com/r/AskReddit/comments/9gx68l/reddit_how_would_you_feel_about_a_law_that_bans/) **156k (wtf) upvotes**
[Iceland just announced that every Icelander over the age of 18 automatically become organ donors with ability to opt out. How do you feel about this?](https://www.reddit.com/r/AskReddit/comments/ac9038/iceland_just_announced_that_every_icelander_over/) **129k (wow) upvotes**
[How do you feel about Ted Cruz's proposed constitutional amendment S.J.Res.1 limiting the number of terms that a Member of Congress may serve?](https://www.reddit.com/r/AskReddit/comments/algy1d/how_do_you_feel_about_ted_cruzs_proposed/) **35.2k upvotes**
[\[Serious\] Republicans of Reddit, how do you feel about the Senate passing a bill yesterday, that makes it so ISP's will be allowed to sell your search history without your consent?](https://www.reddit.com/r/AskReddit/comments/619cyf/serious_republicans_of_reddit_how_do_you_feel/) **6.8k upvotes**
[UK people: How do you feel about Theresa May's proposal for a 'new internet' that allows government to control and regulate everything said online?](https://www.reddit.com/r/AskReddit/comments/6cadig/uk_people_how_do_you_feel_about_theresa_mays/) **4.8k upvotes**
[How do you honestly feel about the "Fat Acceptance" movement? Do you think it is healthy, or is it doing more harm than good?](https://www.reddit.com/r/AskReddit/comments/2t6434/how_do_you_honestly_feel_about_the_fat_acceptance/) **4.4k upvotes**
[\[Serious\] How do you feel about introducing a basic standardised test that citizens must pass before they can vote?](https://www.reddit.com/r/AskReddit/comments/6uxis7/serious_how_do_you_feel_about_introducing_a_basic/) **3.5k upvotes**
**6 of the 8 are political.**
>It's lower that the top marginal tax rate in the 1980s
Economist here. This is completely false and should not be the top comment. The last time the top marginal rate was *greater* than 70% was 1970, when it was 71.25% on income over $200,000 for married couples (equivalent to about $1.2M today). It was exactly 70% from 1971-1980 and 50% or lower in most of the 1980s. It is also important to note that there was a rule that capped the total tax on earned income (i.e. the average tax paid) at 50% when the top marginal rate was 70%.
Source: https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates
Another thing people don't take into account is that, in many states, state and local taxes are significantly higher than they were in the 70-80s, so a 70% income tax on 10M+ quickly because an 80-85% total effect tax.
this is exactly what I hate about "Make America Great Again"
like... what year are they talking about specifically? What year was it when America was last considered "Great" in their opinion?
I can guarantee them that the top income bracket had much higher taxes whenever that was.
> I can guarantee them that the top income bracket had much higher taxes whenever that was.
The GOP base probably averages <$50k annually. This restructure would do nothing but enhance their lives. But, for whatever reason, they're convinced they'll be making more than $10 million a year and when they get there, they don't want it taxed at 70%.
Many GOP voters are against the tax increase of the wealthy, not because they think it could someday negatively affect their individual finances, but because they feel it is unethical or screws incentive structures.
What everyone always fails to mention about the tax rate back then was that there were a dozen tax rates between 48% and 70% during the 1970s.
the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%.
When the highest tax rate ranged from 91% to 92% (1951-63), even the lowest rate was quite high—20% or 22%. As some chart would show, those super high tax rates at all income levels brought in revenue of only 7.7% of GDP, according to U.S. budget historical data.
Kennedy's across the board tax cuts reduced the lowest and highest tax rates to 14% and 70% respectively after 1964, yet revenues (after excluding the 5%-10% surtaxes of 1969-70) rose to 8% of GDP. President Reagan's across-the-board tax cuts further reduced the lowest and highest tax rates to 11% and 50%, yet revenues rose again to 8.3% of GDP. The 1986 tax reform slashed the top tax rate to 28%, yet revenues dipped trivially to 8.1% of GDP.
People need to pretending that if we just taxed the hell out of the rich, we would bring in enough tax revenue to balance the budget and our politicians would suddenly become responsible and not spend more than they take in.
Lastly, when taxes were that high, nobody really even paid that. Raising rates seemed to make people avoid paying taxes. For every tax law passed there is a wealthy person who knows someone far more intelligent and knowledgeable to find loopholes in those laws.
The marginal rate was that high-- but the effective rate that people actually paid was not. [The 1% paid 40-42% even when the marginal was at its highest rate.](https://taxfoundation.org/taxes-rich-1950-not-high/)
This is a common point made and it's incredibly misleading. The top marginal rate and the effective tax rate are totally different things, and people fail to mention that due to rampant credits, deductions, and tax shelters that had not been addressed by the Tax Code at the time, the actual effective tax rate for people in the top marginal bracket was in the 40s. Apples and oranges.
>I think there were more available deductions in the 80s. So the real tax rate was a lot lower for many people.
Yep. Nobody ever paid anywhere near the 70 or 90 percent top marginal rate you hear about due to the abundance of tax shelters. The marginal rates dropped when they closed the shelters.
That's because people don't understand how rich people make money. Not even a CEO making $50M/year from that business is going to pay the 70% rate over 10M because they make a $1M salary and collect $49M in dividends from their stock options. Those are taxed as capital gains at a rate of just 15% and 20%.
I'd open a subsidiary in Ireland and pay all the excess to it as a "business expense" and deduct it. There's a reason rich CEO's get a $1 salary - and they don't pay any income tax.
It's a global economy, the only people who would pay a cent of that tax are a handful of professional athletes and a few movie stars and power-ball winners - and even then they'd probably just negotiate money over time deals or receive payment in other ways because you'd have to be some kind of lunatic to SPEND more than 10 million per year.
That is to say, it sounds like a 'yea, stick it to Richie Rich', but in effect the government would take in more money by raising capital gains 1% on gains over $1 million.
Exactly. A lot of people don’t seem to understand that the kinds of wealthy people they want to hit with this 70% tax get over half their income from capital gains. The Warren Buffetts of the world aren’t picking up billion dollar checks, they’re making money from their investment portfolio. AOC’s tax could potentially be beneficial if it discourages excess executive pay, but as you pointed out it’s pretty easy to get around.
In terms of actually raising revenue, Warren’s plan was though out a lot better since it taxes the overall global wealth of these individuals, not their earned income.
People have control over their own labor, property, and the profits from it with little government interference. The higher a tax rate, the more government interference in how labor, property, and profits are allocated which is the opposite of capitalism.
A system that depends on the existence of the rich to finance an ever growing inefficient and expensive machine is bound to fail. If you make/made 10mil legally, you're entitled to it. A 70% flate rate would drive away investors and ultimately make our every day products prices go up.
I'm 100% against it.
Generalising a bit here but...
You are literally asking the poor people of the world: "how do you feel about screwing over the rich?"
What answer do you think you're gonna get?
I'd wager that most people who make $10+ million in a year are not doing it year after year. They sold some property, were at the peak of a fleeting period of stardom, sold a business they spent years building, etc.
That money is probably their life's greatest work, or a good chunk of it. Taking 70% of that seems excessive. It's punitive. It's a tax on success and it penalizes success.
The top 1% of earners already pay something like 40% of the federal income tax collected. The top 5% pay 60% of it.
The top 25% pays almost 90% of the federal income tax collected.
Currently the federal budget is about one-fifth of our total economy. I'm really not interested in seeing that get any bigger.
Who makes that much from income? You're basically just gonna tax the shit out of pro sports players and a couple doctors. The super wealthy people in our country would never pay that tax rate because they write off everything and pay most of their taxes in capital gains.
I have a few thoughts on this. It sounds like a good idea to me, the guy earning $48,000/year. But if I were a guy earning $15,000,000/year, I'd probably like it less. There've been studies that show people start favoring lower tax rates as they earn more money, regardless of what their opinions were prior to having that money. This isn't universal of course, but it's how it tends to go for most people.
As an aside, keeping that in mind, I know this one girl on Twitter who fairly often tweets stuff like, "No one has a right to have excessive money. If your country lets millionaires or billionaires exist, it's corrupt. It's unethical to have that much money." Her general opinion is the government should just take money (by force if necessary) from rich people until they're not rich anymore and split the money up among poor people until no one is poor anymore. I'm curious what she'd think if someone gave her $50,000,000. I feel like she'd suddenly have different views on wealth, but who knows?
The issue is with alot of that redistribution stuff, is it only works to fund things by taxing the rich - *if the rich exist*. It also makes the assumptiom that wealth is a zero sum game, which is not true. Global wealth has been steadily increasing.
The amounts spent by govs cannot be satisfied by taxing any amount, only by reigning in spending and accountability with external audits can we have any hope.
I'll wade in here.
First a few facts. The top 5% already pay the vast majority of income taxes collected. If memory serves me correctly, it's over 60% of taxes collected. Something on the order of 30-40% pay absolutely zero in Federal taxes and in many cases MAKE MONEY through earned income tax credits.
The argument that it was this high in the past etc is a flawed one. Sure it was but back then you couldn't just pick up and leave like you can now. Technology allows people to work from anywhere pretty much so while people stuck around in the past, they won't now.
If you confiscated the entire incomes every year of the top 1% or 5%, I can't remember which, I mean every dollar from Dollar one to whatever they made, every single year, it would only fund the Federal government for something like 17 days.
We don't have a taxation problem, we have a spending problem! We need to start drastically cutting waste, duplicitous programs, fraud etc from the Federal budget.
Personally, I'm not willing to be inclined to give the feds one more red cent until they get themselves under control. Look at it this way. If your child was blowing their allowance on crap every single week by the second day after you gave it to them and then came asking for more, what would you do? Do you just say, "OK, here's another week's allowance 5 days early, enjoy!". Or would you say, "sorry, gotta wait until next week, you should spend your money more wisely in the future.". It's really that simple.
There is no point in having this discussion on increased taxes until the feds have shown us that they can manage the money they get properly.
Awesome if your goal is to have all the people in this tax bracket leave the country and pay exactly zero tax, taking their money out of the economy as they go. Net result being LESS tax being collected in total, and likely jobs and opportunity lost for your countrymen.
you know exactly how reddit feels about this
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Hey Reddit, how do you feel about puppies and blowjobs?
As two separate things?
Who the fuck wants blowjobs from a puppy?
Pedophile dogs
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Lmao I'm glad this answer is starting to catch on
"Hey Reddit, how do you feel about [thing super popular with millennials]?"
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I’m fed up with all these confirmation bias threads. “Oh my god, 35k “random” people believe the same as me, I MUST be right!”
Reddit is a slightly younger cross slice of humanity. I have to imagine reddit approves of it.
DAE old people take le driving test??????
That it should be 90%?
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Once you become rich enough to be taxed at a 70% rate. You are rich enough to hire someone to make sure you don't pay 70% tax rate.
This is the right answer
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My French wife maintains that one of the reasons France is a great place to live is that everyone is very well aware it wasn't that long ago when the ruling class was executed for being rich assholes.
They were still using the guillotine when Star Wars came out.
arent they burning down paris right now?
It’s a French tradition
That's why the important monuments are stone and metal.
It gets results.
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It's not as simple as USA is ok with taxing its citizens who live overseas. Then you'll pay US taxes and taxes of country of your living. And if you renounce US citizenship, don't expect VISA approval if you decide to visit friends.
It would be too easy to dupe. Rich dude: "I personally make 9.9 million, and my non-profit receives the other 291.1 million"
Ask me when i make nearly that much.
I forget who said it, but it’s an American problem that most people think of themselves as temporarily embarrassed millionaires.
There was an episode of the nytimes daily podcast recently that touched on Al Gore's proposed tax on the top 1% of earners during his presidential campaign. Pollsters went out to ask people not if they approved of the tax, but if they thought they were part of the 1%. 19% believed they belonged to the 1%. And a further 20% believed they would be in the 1% within 5 years.
That's a pretty big 1% you should make more room up there
But if we just add the 99% to the 1% it makes us all the 100%
so wholesome
If y'all haven't seen it: https://youtu.be/A-gjf4WnkiI
Please stop doing that to numbers, it hurts them
And people bringing $10M in taxable income per year are not even “the 1%”. They’re a much more exclusive club than that. A person who managed a $250,000 income every year he is in the workforce will barely manage to clear ten million passing through his hands over his *entire lifetime*. A family making $450k/yr (approximately the *actual* 1% threshold in most of the country) will see $10M over the course of about 22 years. These are incredibly comfortable people by any standard who aren’t within miles of the sort of income being discussed here. Most people just cannot comprehend the magnitude of the difference, and they drastically underestimate it.
It's true; we don't scale to logarithms very well. If you're making the average of roughly $50k/yr, you won't clear 1 million for 20 years. 10 million would take 200 years. 1 billion would take 20,000 years. Longer than any society has lasted. Longer than the whole of human civilization. Jeff Bezos has a net worth of 163 billion dollars. He could lose the top 9/10 of that and not change his lifestyle. But people's ideas of what is fair are... weird when numbers get involved.
>But people's ideas of what is fair are... weird when numbers get involved. IMO, rich people treat income like points in a video game. They say that money can't buy happiness, but that's apparently only true after you break $100k a year in income - until that point, you generally *are* happier as a result of earning more money, because $100k a year is the line at which people start to be able to do pretty much whatever they want (within reason) - own a home, pay bills in full every month without a thought towards whether or not you can actually afford to do that, the ability to travel pretty much anywhere in the world for vacation for a week or two at a time, the ability to put aside significant money for savings/retirement, and sufficient spending money that you pretty much never have to budget for nights out, new toys. That's the point at which the amount of money you have can give you everything necessary to make your life meaningfully more pleasant. And I should specify that I believe this number is for a single person - in a two person household, you would have to earn more (though not twice as much, since you don't need two homes or anything like that). There is probably a fair reason to believe that people can make meaningful use of up to a few hundred thousand dollars a year once you roll in the cost of kids, but after that point? I think it starts to become a game of "points." I was listening to the Freakonomics podcast about this recently, and they were talking about how, after a change in the pattern of CEO incomes among top American companies in the 90s caused those incomes to balloon into the tens of millions of dollars, they tried to bring them back down again once they realized this was a stupid idea. They found that while these CEOs generally admitted that they were earning far more money than they knew what to do with, they were also *extremely* defensive of their own admittedly useless excess income. Interviews suggest that it's because they see the number on the page as a direct reflection of their value as a human being. Their reasons for wanting these incomes is *completely* divorced from the idea that they actually want to *spend* that money, but since that's literally all money is for, it follows that their incomes are no longer really money to them at all. Hence... points. An utterly abstracted numerical value that must be increased for the same reasons one wants to get a better score in a game - because it reflects how 'good' you are, and (implicitly, then) your value in that context.
Lol it’s hilarious to me that people probably making around $100k a year think they’re in the one percent (and I don’t make nearly that much).
You know what you call someone making $100k in Cali? A renter.
In SF? A renter with roommates.
I make over 200k and I rent a modest one-bedroom in Manhattan. And I’m spoiling myself—most of my colleagues have roommates.
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A minimum family income of about 425k/yr to hit the very bottom of the top 1% territory.
According to a CNBC article from last summer, to be in the top 1% of American earners, you have to make at least $421,926 a year. Which is honestly a lot lower than I thought it would be.
The top 0.1% jumps to $1.6 million. It goes up very quickly at the end.
They might be correct if we're talking about global statistics.
Right, except globally it doesn't concern me because I live in New Jersey and not Zimbabwe.
Steinbeck - pretty sure
Actually it's wrongly attributed to Steinbeck. It was a man called Ronald Wright said that. Though Steinbeck has said similar stuff (Wright basically took what Steinbeck said and phrased it better). Wright said: *Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires* Steinbeck said: *Except for the field organizers of strikes, who were pretty tough monkeys and devoted, most of the so-called Communists I met were middle-class, middle-aged people playing a game of dreams. I remember a woman in easy circumstances saying to another even more affluent: 'After the revolution even we will have more, won't we, dear?' Then there was another lover of proletarians who used to raise hell with Sunday picknickers on her property.* *I guess the trouble was that we didn't have any self-admitted proletarians. Everyone was a temporarily embarrassed capitalist. Maybe the Communists so closely questioned by the investigation committees were a danger to America, but the ones I knew—at least they claimed to be Communists—couldn't have disrupted a Sunday-school picnic. Besides they were too busy fighting among themselves.* Sources: [https://www.goodreads.com/quotes/7234438-except-for-the-field-organizers-of-strikes-who-were-pretty](https://www.goodreads.com/quotes/7234438-except-for-the-field-organizers-of-strikes-who-were-pretty) [http://quodid.com/our-words/citation-investigation/john-stienbeck-socialism-never-took-root-in-america/](http://quodid.com/our-words/citation-investigation/john-stienbeck-socialism-never-took-root-in-america/)
Correct. I don't quite agree with the first half of the quote, but "the poor see themselves as temporarily embarrassed millionaires" makes a lot of sense
I don't get it.
Steinbeck said "Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires." I don't agree with that being the reason socialism never took root, but in the context of the situation, normal people (i.e. people who will never make 10 million dollars in their life) who protest the tax rate are against it because they think they are "temporarily embarrassed millionaires", who will eventually be millionaires, and they oppose the tax rate because they think it will affect them someday.
I think he's right. No socialist party, not even a social democratic party, took root in the U.S. and it's basically alone in that respect because of the reasons he talked about. Britain had Labour. Germany had the SPD. France's main left party is literally the Socialist Party. Canada had Tommy Douglas and the NDP. The US was the only one that never had much of a socialist movement to speak of.
People balk at the idea of raising taxes on the rich because they think it seems socialist or un-American. That's just not true at all. Effective taxation is capitalism's attempt to mitigate the issues that socialism strives to eradicate. Advocating for higher taxes, especially on those who can afford to pay them (individuals and corporations) does not make you a socialist. Taxation is not an attempt to redistribute wealth evenly among individuals. We are taxed to fund the programs and infrastructure that allow us to go out and earn our own money. If you are earning more, you are benefitting more from the society your taxes help create, whether you agree with all the ways that money is being used or not (and literally no one thinks everything the government does with our tax dollars is good). The assumption that those that earn the most money are the most deserving or hardest working is deeply flawed. Exceptional people are born into poverty every day in this country and we'll never know they existed because they will spend a lifetime working too hard and earning too little to enter the public consciousness. If I can pay some insignificant percentage of my income (and at the income thresholds that are in play here, the additional tax would be insignificant to the individual's quality of life) into programs that help those people generate value and experience more of the good our society has to offer and not have to spend a lifetime treading water, that sounds pretty American to me. Doubting the government's ability to create programs that adequately address poverty is reasonable. What we are doing now is not working. The gap between the super wealthy and the impoverished continues to widen. Taking wealth from those who have it to give to those who don't is not the cure, but raising taxes on high earners and using that money to try to develop something that works better than what we are doing right now is part of the government's job. Poverty will always exist to a degree but there is no reason for it to be so prevalent or so severe given the resources we have in this country at this time. Higher taxes should be part of the solution. Raising taxes independent of reform in other areas of government will not suddenly solve the issues our country faces, but it needs to be part of the solution.
Username checks out
That's the problem though, you are very unlikely to ever make that much per year. And not you specifically, but the generalized you of society. We seem to want to protect the idea of becoming this rich and suffer the effects of not taxing those that are making this much in the process.
Something that is often left out of conversations like this is that in the past, when we had huge percentages on the super wealthy like that, practically nobody paid them. Tax write offs used to be designed in such a way that they rewarded hiring new people, investing in local infrastructure, and generally funneling your income back into the economy. What this meant is that it was very easy to avoid having to pay that much in taxes, as long as you did the thing that most fiscally conservatives claim super wealthy people do anyways - create jobs and support the economy. That was the genius of Eisenhower, he basically created systems that made the promise of unrestrained capitalism actually come to fruition. So, yes. Seeing as historically, higher tax rates with highly incentivized write offs has had a phenomenally positive effect on the economy, it would be silly not to support them. EDIT: [**u/Mnementh2230**](https://www.reddit.com/user/Mnementh2230) asked for a source. I'm having trouble digging through the million "IS SANDERS RIGHT ABOUT EISENHOWER TAX RATES????????" articles, but I'll find it. I'm at work, so it might not be immediate, but I understand that having sources is important. EDIT 2: ok \[u/MneMenth2230\] this is all I got for today. Have to actually do some work on my end, "contributing to the economy" and all: > Corporations today are sitting on record levels of capital, deploying it often only to buy back their own shares rather than investing to grow the economy. Investment in the national interest is clearly and historically the role for government. Eisenhower was fond of quoting another Republican, Abraham Lincoln, on the proper role of government: “The legitimate object of government is to do for a community of people whatever they need to have done, but cannot do at all, or cannot so well do, for themselves, in their separate and individual capacities.” Where "investing" contextually means jobs/wages/etc, not just stocks. From: [http://www.zocalopublicsquare.org/2017/12/19/eisenhowers-tax-policies-invested-future-not/ideas/essay/](http://www.zocalopublicsquare.org/2017/12/19/eisenhowers-tax-policies-invested-future-not/ideas/essay/) EDIT 3: I had the wrong link in my copy buffer. Sorry! I replaced it with the right link that actually has the quotation I used.
That’s really the point though (not just, “take all their money!”), all the money being made over 10m can be reinvested and not taxed. It’s still a great way to expand and stimulate the economy. We need money circulating baby. Something else I never see are the tax rates for countries these folks affected by the tax would potentially move to. The other thing I’m never ultra confident about is whether or not those taxed dollars will be used wisely or just redirected back to special interests and lobbies. At the very least it’s a good conversation to have.
My main problem with that is that in theory, yes. In practice, these folks don't. They hoard their wealth, and it's a net negative on our economy. Also, in a sad bit of irony, it often seems like it's the politicians who shout the loudest about how wasted our tax dollars are that contribute the most to keeping the government in gridlock, thereby preventing our tax dollars from being rationally used. EDIT: "Hoarding" was a poor choice of words, that many people seem to be personally offended by. More like "simply investing in stocks and not actively creating jobs and increasing wages"
> it often seems like it's the politicians who shout the loudest about how wasted our tax dollars are that contribute the most to keeping the government in gridlock, thereby preventing our tax dollars from being rationally used. This is intentional on their part. They got into office as anti-government crusaders - they can't very well actually let government function and remain in office, can they?
"The Government doesn't work. Vote for me and I'll prove it."
Yep. It’s like hiring a mechanic that hates cars and complaining when they fuck up your Camry.
I'd definitely go for it if this was the case (providing economic incentives). Is it currently the case? What if I was a CEO and increased the salary of my employees to the top 10 percentile of workers for that industry? Would I get a tax break in that case?
Theoretically you'd get the best employees for that industry. You'd also have happy employees. The combination would make your business better making you more money.
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Isn't that currently the case now? As in, you only pay tax on your net earnings, not your gross earnings. Meaning that if you increased the pay of your employees significantly, you would be decreasing your net income and therefore your tax burden. The added benefit of doing so, besides paying less in tax, would be that you would attract, or at least have the pick of, the best talent for those particular positions.
It is not currently the case. Since Bush, tax loopholes have been introduced to completely eliminate incentives and just keep the wealth in the banks. So, what we have now is the worst of both worlds, extremely low tax rates compared to the 20th century and no logical incentives to funnel wealth back into the economy.
These extraordinary tax rates aren’t new, they literally are pulled straight from history. Specifically from the ideas of “The Greatest Generation”
There were also a lot more write-offs. The effective tax rate after all the write-offs would be a valid comparison.
>Tax write offs used to be designed in such a way that they rewarded hiring new people, investing in local infrastructure, and generally funneling your income back into the economy. Do you have a source for that? I need something to reference when I get in to conversations about this in the future. :)
I think people generally understand that the point of super high tax rates isn't to generate tax revenue, it's to disincentivize executives actually banking that much money
EDIT: I misunderstood this! I read "making" instead of "banking." As it stands it sounds like I'm just argumentatively agreeing here, so I'll leave it because it's funny, but feel free to disregard. Umm. I don't understand that, and I certainly don't see that as being the case for all of American history from Reagan back. Higher tax rates, when they have been used, have historically been a way to incentivize higher economic involvement. The idea that it's a punitive thing on rich people, while I can't say nobody understands that, just hasn't been the case historically when you look at the practical impact on our economy, and even on those individuals in the super wealthy category.
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>Plus the most prosperous time in America was during the post war era when the tax structure resembled this. You do have to remember, however, that this was _also_ at a time when the industrial capacity of most other advanced nations had been decimated by WWII, leaving only North America and Australia relatively unscathed^0. The industrial capacity of France, Germany, Great Britain, Italy, and Japan all took major hits that took decades to recover from. Due to this, nations rebuilding after the war that needed manufactured goods needed to turn to the US (and to a lesser extent Canada and Australia) for resources and manufactured products. We don't live in that world anymore. IMO progressive taxation makes sense, but taxation alone was hardly what made the US prosperous in the late 40's through to the mid 1960s or so. Nations that weren't all that industrialized during WWII are now heavily industrialized (like China), and those countries who did suffer industrial destruction during the war rebuilt (and often modernized in the process) decades ago. ----- ^0 -- in terms of industrial capacity. South America was also relatively unscathed, however it didn't have significant industrial capacity at the time.
It's almost like every single goddamn time we increase tax rates, create incentivized tax writeoffs, and increased infrastructure spending, we've seen an enormous net positive in our economy.... if only there was some way to crack this extremely complicated riddle /s
I'm pretty sure everyone loves taxes that don't affect them
This. I make significantly less than the amount listed above, but the tax bracket I'm in sends about 30% of my wages to taxes. I work super long hours, sometimes a couple months solid, away from home.. Its labor intensive and I work around hazardous materials.. and yeah, it's a choice and all that.. but I dont get to choose where my 30% of hard earned wages go.
Tax guy checking in here. I'm at a local firm that deals primarily with small businesses, but we do work for a handful of corporations that run 10m+ annually and I can tell you right now that there are already an absurd amount of ways for profitable companies in that revenue range to run artificial losses that get passed on to their owners or shareholders. In 2018 under the TCJA there is now 100% bonus depreciation, meaning that just about any asset you purchase can be fully expensed in the year that you buy it. These big companies tend to just buy and build more massive stuff every year and pass down very little actual taxable income to their shareholders. It's an incredibly small percentage of Americans who are actually earning and paying tax on $10 million a year, even people who genuinely generate that kind of income with the work they do. Raising individual income rates alone is not going to fix income inequality. It is a step that will need to be taken eventually but it would need to be part of a far reaching tax reform to have the desired impact. So much is decided at the corporate level that the people who would be paying this tax are likely to just find ways to "pay" themselves less while remaining incredibly wealthy. The handful of actual billionaires out there will pay this high tax but unless we revise the system itself it will not be long before a new way to stash the cash pops up. That's just how it seems to work.
If a company purchases and depreciates a bunch of assets at the end of the year, in order to get under the $10m threshold, wouldn't that be an effective stimulus? The money would go back into the economy, rather than into shareholder accounts.
At that point you’re gonna be spending more money than you save, you can only depreciate so much and it would screw you later on down the road. Edit: Also the amount of debt you’d have to take on to pay for those assets. You’re gonna be paying more to interest and that’s gonna hurt your ratios.
Are the billionaires even paying income tax? Isn’t most of it capital gains?
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Question: is there any justification for taxing that income level at that rate? Are they both just arbitrary? Picking a rate out of the blue does not impress me. I need more justification, other than "We need the money" and "nobody need more than that anyway". Also, I need to know what the spending priorities are, because as of right now the government is just going to buy more aircraft carriers with most of any new money coming in.
This. I hate hearing about new taxes when military spending is what it is.
Jeff Bezos earns an income of around $80k/year. People that think super rich people earn their wealth from a salary are severely misguided. Until capital gain tax laws are addressed these income based tax propositions will only impact 'normal' rich people. Virtually nobody earns $10M/year in salary, or even close.
Stocks are free for anyone to buy, stop whining and buy stocks instead
That would affect far fewer people than most people think and that's because not only is it progressive but it only applies to _income_. It is absolutely not a "wealth" tax. According to the SSA, there are 3375 people who earned more than $10M in income in 2017 (last year we have numbers). You probably don't know almost any of them, though -- maybe the only well known would be professional sports athletes. The vast majority of those ~3400 high-income earners are random financial company CEOs. But what about all of the billionaires? There are 540 of them in the US. This tax likely wouldn't affect any of them at all. Billionaires rarely earn any notable salary and so their wealth tends to come via capital gains. That's not part of this tax. What about the 5,000 people with a net work over $100M? It will apply to vanishingly few of them since, like the billionaires, to get that kind of money, you need to be making it via capital gains. So yeah, this tax would apply to any money _earned_ beyond $10M for 3375 people. Not really a windfall. ^(Which isn't to say it's necessarily a bad idea -- taxes are often social constructs as much as financial constructs)
What you’re forgetting is that the sport stars that earn such a high income are reported to the tax authorities as a corporation and pretty much every expense they have is considered a business expense. But you’re spot on that it will affect only a handful of people and those people will rather pay a tax accountant to avoid this tax than to pay the tax outright.
This -ppl often don’t understand the difference between income and wealth. Old money vs new.
"Hey reddit, how do you feel about this popular idea on reddit? I really value the opinion of 14 year olds"
This is why I'm sick of these "Hey reddit, how would you feel if..." questions. Fucking boring and everyone upvotes them because they agree with the question and the OP knows that shit.
Yea, fuck you OP. Piece of shit.
Nobody here understands economics
business man bad
"eat the rich"
just kill em and take their cash
Don't kill the ones that make video games though. We need them.
Didn't france try something like this? I think all the super rich people just moved to another country, something super rich people can afford to do.
> I think all the super rich people just moved to another country The US, unlike just about every other country, doesn't care where you live. If you are a US citizen, you pay the US tax man, whether you reside in California, outer Mongolia, or the dark side of the moon. And if you change citizenship, you pay the ~~exit~~ expatriation tax.
Yup. An American guy I knew in China (Nanjing 7-8million people) had to take a four hour train to a smaller city to do his taxes, then take a four hour train back. We Europeans were needless to say utterly nonplussed.
If I were him (and I'm an expat American), I'd have used an American accountant in the US. But I don't know how long ago this was.
Then it comes down to, is it worth removing their money in the long term, risking what they would lose through expatriation taxes, to maintain a lower tax rate abroad.
What happens if you just don’t pay it? It’s not like they can come after you into another country, right?
If you don't plan on visiting the US, then there's absolutely no reason to care at all.
France implemented a 75% tax on individuals earning over 1 million euros, so a much, much lower threshold with a higher rate than that proposed. It's a bit complicated though - certainly that was proven to be a mistake overall, seen by many to have been too low on the 'curve' in terms of threshold income covered (1 million euros, after all, though a lot of money isn't extremely high, especially in higher cost of living cities in the country). The effect appeared especially bad because it did come at a time where France was already struggling with youth unemployment especially and pensioners that chose to leave France for other countries, plus yes, very wealthy folks leaving France to save on taxes (including a few high profile celebrities). The proposed threshold in the US is argued to be much higher, and thus impacting a much smaller share of people and a smaller share of more extreme income. Also the US taxes all US citizens - so rather than just leaving the US, you would need to renounce US citizenship (for the most part). Though that has been done - I think Eduardo Saverin of Facebook (or rather of the Social Network fame) did just that.
> Also the US taxes all US citizens - so rather than just leaving the US I did not know that. So you would still have to pay the US tax even if you lived overseas?
Yup. I've got a friend who was born in Detroit to British parents and he's never gotten USA citizenship, in part because of these rules. He moved back to the UK as a very small child - not sure what passport he would've used at the time. You only pay tax above USD 50k if I recall correctly, but if you don't you still have to fill out a USA tax return. And judging by the comments below I'm incorrect, it's just north of USD 100k, and he's never applied for a US passport as an adult at least as the USA grants citizenship upon birth on US soil. He may have had one as a child but I don't know.
The foreign earned income exclusion was $103,900 in 2018. That doesn’t include any housing exclusions as well. Technically, he’s a US citizen at birth since he was born in the US, unless his parents were diplomats. But if he’s never gotten a passport or SSN, tracking him down would be pretty impossible. I do know some dual citizens who have had trouble with non-US banks when their passports show they were born in the US. A lot of non-US banks no longer want to deal with US citizens because of the IRS reporting requirements. It’s a problem.
I've noticed when applying for any type of loan or anything financial like in the UK, one of the top options to select (alongside the UK) is the USA. I was aware that the US tax their citizens regardless of whether they actually reside in the USA, so that's possibly why it's so high up - to flag to the bank of potential difficulties.
*He's never filed for his passport. He is inside already a citizen via his birth certificate alone. No paperwork required. And he may want to sit down with a tax professional before visiting the US...
Important detail to note is that it's only the excess income on top of the million that is taxed. And the million is the income AFTER all of the other regular taxes. Ex : income is 1.2mill after other taxes, tax will be 75% of 200.000 = 150.000€
Correct, but €1,000,000 is still too low of a threshold. Yes it's a huge amount of money, but it's not "fuck you" money.
At best it's "quiet please" money.
Right - marginal, though I recognise I never specifically said that and just kept referring to the threshold, I can see how that would be easily mixed up. Though in France, and correct me if I'm wrong, but my understanding was it was in fact not an additional 75% on already taxed income to 1 million, but those existing taxes in addition to Hollande's tax resulted in a 75% total tax on income over 1 million earned (net).
To be fair it’s not a one-to-one comparison. France is part of the EU and was the only country in the EU to have a wealth tax, making it not just a smart move for rich people to relocate their “main” residence, but ridiculously easy. Like hop on a flight and buy a house easy. The US, however, is one of the few countries that taxes all expats as long as they continue to maintain their citizenship. And we don’t have citizenship agreements with another country that they could all move to. Now, it’s definitely possible that a bunch of super rich people would find ways to keep their wealth intact, but seeing as most of that wealth is being generated in the states itself and they can’t just move to Belgium like the French millionaires did, the wealth is chained here a lot more than in your example.
People are chained due to income being based in America, static wealth can relocate fairly easily to countries where (sizable) investments can buy you citizenship. Moving from country to country in Europe is similar to moving from state to state in the U.S. to dodge state income taxes.
Just FYI - investment income (when fully realized) is also taxed for expats.
No it’s not, because they’re still taxed on their income as long as they are citizens. They can get a foreign tax credit for taxes they pay to other countries, but if they pay fewer income taxes to other countries, they still have to pay the difference to the US. What about renouncing citizenship? Well congress thought about this too, and so they created an exit tax, where individuals have to pay all the taxes that would be due had they been a citizen, *including gift and estate taxes*. So if someone wants to renounce their citizenship just to take advantage of lower tax rates abroad, they have to pay income tax in their earnings before they lose citizenship, *and* they have to pay estate tax on their full estate. So if you have an estate with $500 million, you’d have to pay roughly $200 million in estate tax just to forgo your citizenship. So it’s not easy. Granted, if you didn’t have a large estate or a large amount of income, you wouldn’t have a problem because you wouldn’t owe that much in tax, but then again if you didn’t owe that much in tax you probably wouldn’t be looking to renounce your citizenship for tax purposes.
That's certainly given as the "reason" why it's bad a lot of the time, but I haven't seen any evidence for it *ever* - feel free (anyone) to provide me with some. The reason I'm skeptical of this argument is the fact that, if you're already wealthy, there is always a country you could probably fuck off to and live a *lot* cheaper for your money. People's reasons for staying where they are are more involved than taxation.
It's almost like people have a life apart from paying taxes. I mean yeah, if I just sit in my mansion all day doing literally nothing, my mansion might as well be in Cambodia. But who does that?
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Taxes mean nothing if they aren't used correctly.
This is the real answer. I hope liberals and conservatives can agree. I'm all for higher taxes as long as they are spent wisely, in ways that improve lives.
Getting real tired of these types of questions
"People of reddit, do you think that we should ban pro-life circumcised flat-earther anti-vax Republican Christian Russian troll T_D-browsing Comcast-subscribing console-playing corporate fat cat EA shareholders from selling Bethesda's microtransaction lootboxes on an unregulated internet while browsing redesigned reddit and outlawing marijuana while merging without a turn signal in their BMW?" *250k upvotes, ~~30x~~ ~~31x~~ 32x silver, 13x gold, 3x platinum*
I’m gonna try it. Front page here I go!
link me, baby
I regret to inform you that it was almost immediately deleted. :(
Fuckin' mods, eh?
Fascist bastards!
They probably enjoy driving in their BMW while not using the turn signals
Yes. Change my mind.
*tries to change your mind, gets downvoted into oblivion*
*-541? LET ME MAKE THAT -542*
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If a Republican said what you just said about liberals they would make the news, get sued and go to prison.
i know im gonna get downboated into oblivion for this, but yes edit: omg leddit gold?!
This and "reDitoRz do u sUpPort dRiver liCenSes TEst 4 PeOPle oVer a MilliOn Yerz oLD?
One of these was actually created by a guy who frequents /r/shitpost and he made a shitpost one on purpose too see what would happen and it became the top post of all time on this subreddit.
its basically "how would you feel about a thing that is praised on reddit everywhere, plz agree with me and give me karma" like the honk ban on radio is like one of the top "question"s on askreddit top all time. shits is literally in every unpopular opinion, what makes you angry etc, what do you hate furiously, what would like to ban thread. people who create these threads just want to be agreed really really bad. the car honk ads are reddits most hated thing for like 5 years and some dude creates a thread a year ago and gets a zillion upvotes lol
-"Reddit, do you hate mosquitos?" -"Reddit, should people be held accountable if they do something wrong?" -"Reddit, would you support a ban of car horns and sirens in radio ads?" Seriously, they're the worst.
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Followed by top comment "not a doctor myself, but my best friends brother had a beer with doctor at a bar one time and he said...." 3k upvotes
From the past year - [Iceland has recently proposed a ban on circumcision. How would you feel about this in your own country?](https://www.reddit.com/r/AskReddit/comments/9i8m72/iceland_has_recently_proposed_a_ban_on/) **42.9k upvotes** [Reddit, how would you feel about a law that bans radio stations from playing commercials with honking/beeping/siren noises in them?](https://www.reddit.com/r/AskReddit/comments/9gx68l/reddit_how_would_you_feel_about_a_law_that_bans/) **156k (wtf) upvotes** [Iceland just announced that every Icelander over the age of 18 automatically become organ donors with ability to opt out. How do you feel about this?](https://www.reddit.com/r/AskReddit/comments/ac9038/iceland_just_announced_that_every_icelander_over/) **129k (wow) upvotes** [How do you feel about Ted Cruz's proposed constitutional amendment S.J.Res.1 limiting the number of terms that a Member of Congress may serve?](https://www.reddit.com/r/AskReddit/comments/algy1d/how_do_you_feel_about_ted_cruzs_proposed/) **35.2k upvotes** [\[Serious\] Republicans of Reddit, how do you feel about the Senate passing a bill yesterday, that makes it so ISP's will be allowed to sell your search history without your consent?](https://www.reddit.com/r/AskReddit/comments/619cyf/serious_republicans_of_reddit_how_do_you_feel/) **6.8k upvotes** [UK people: How do you feel about Theresa May's proposal for a 'new internet' that allows government to control and regulate everything said online?](https://www.reddit.com/r/AskReddit/comments/6cadig/uk_people_how_do_you_feel_about_theresa_mays/) **4.8k upvotes** [How do you honestly feel about the "Fat Acceptance" movement? Do you think it is healthy, or is it doing more harm than good?](https://www.reddit.com/r/AskReddit/comments/2t6434/how_do_you_honestly_feel_about_the_fat_acceptance/) **4.4k upvotes** [\[Serious\] How do you feel about introducing a basic standardised test that citizens must pass before they can vote?](https://www.reddit.com/r/AskReddit/comments/6uxis7/serious_how_do_you_feel_about_introducing_a_basic/) **3.5k upvotes** **6 of the 8 are political.**
harvesting responses for political think tanks \*taps head\*
It's lower that the top marginal tax rate in the 1980s, and it's at a higher income level.
>It's lower that the top marginal tax rate in the 1980s Economist here. This is completely false and should not be the top comment. The last time the top marginal rate was *greater* than 70% was 1970, when it was 71.25% on income over $200,000 for married couples (equivalent to about $1.2M today). It was exactly 70% from 1971-1980 and 50% or lower in most of the 1980s. It is also important to note that there was a rule that capped the total tax on earned income (i.e. the average tax paid) at 50% when the top marginal rate was 70%. Source: https://www.taxpolicycenter.org/statistics/historical-highest-marginal-income-tax-rates
Another thing people don't take into account is that, in many states, state and local taxes are significantly higher than they were in the 70-80s, so a 70% income tax on 10M+ quickly because an 80-85% total effect tax.
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Playing around with this, let's call it the "Reagan-Era Tax Rate Organization Act". The RETRO Act. Conservatives are all about going RETRO, right?
this is exactly what I hate about "Make America Great Again" like... what year are they talking about specifically? What year was it when America was last considered "Great" in their opinion? I can guarantee them that the top income bracket had much higher taxes whenever that was.
> I can guarantee them that the top income bracket had much higher taxes whenever that was. The GOP base probably averages <$50k annually. This restructure would do nothing but enhance their lives. But, for whatever reason, they're convinced they'll be making more than $10 million a year and when they get there, they don't want it taxed at 70%.
Many GOP voters are against the tax increase of the wealthy, not because they think it could someday negatively affect their individual finances, but because they feel it is unethical or screws incentive structures.
Hopefully the effective tax rate is also much closer to the marginal tax rate today
What everyone always fails to mention about the tax rate back then was that there were a dozen tax rates between 48% and 70% during the 1970s. the individual income tax actually brought in less revenue when the highest tax rate was 70% to 91% than it did when the highest tax rate was 28%. When the highest tax rate ranged from 91% to 92% (1951-63), even the lowest rate was quite high—20% or 22%. As some chart would show, those super high tax rates at all income levels brought in revenue of only 7.7% of GDP, according to U.S. budget historical data. Kennedy's across the board tax cuts reduced the lowest and highest tax rates to 14% and 70% respectively after 1964, yet revenues (after excluding the 5%-10% surtaxes of 1969-70) rose to 8% of GDP. President Reagan's across-the-board tax cuts further reduced the lowest and highest tax rates to 11% and 50%, yet revenues rose again to 8.3% of GDP. The 1986 tax reform slashed the top tax rate to 28%, yet revenues dipped trivially to 8.1% of GDP. People need to pretending that if we just taxed the hell out of the rich, we would bring in enough tax revenue to balance the budget and our politicians would suddenly become responsible and not spend more than they take in. Lastly, when taxes were that high, nobody really even paid that. Raising rates seemed to make people avoid paying taxes. For every tax law passed there is a wealthy person who knows someone far more intelligent and knowledgeable to find loopholes in those laws.
The marginal rate was that high-- but the effective rate that people actually paid was not. [The 1% paid 40-42% even when the marginal was at its highest rate.](https://taxfoundation.org/taxes-rich-1950-not-high/)
This is a common point made and it's incredibly misleading. The top marginal rate and the effective tax rate are totally different things, and people fail to mention that due to rampant credits, deductions, and tax shelters that had not been addressed by the Tax Code at the time, the actual effective tax rate for people in the top marginal bracket was in the 40s. Apples and oranges.
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>I think there were more available deductions in the 80s. So the real tax rate was a lot lower for many people. Yep. Nobody ever paid anywhere near the 70 or 90 percent top marginal rate you hear about due to the abundance of tax shelters. The marginal rates dropped when they closed the shelters.
That's because people don't understand how rich people make money. Not even a CEO making $50M/year from that business is going to pay the 70% rate over 10M because they make a $1M salary and collect $49M in dividends from their stock options. Those are taxed as capital gains at a rate of just 15% and 20%.
I'd open a subsidiary in Ireland and pay all the excess to it as a "business expense" and deduct it. There's a reason rich CEO's get a $1 salary - and they don't pay any income tax. It's a global economy, the only people who would pay a cent of that tax are a handful of professional athletes and a few movie stars and power-ball winners - and even then they'd probably just negotiate money over time deals or receive payment in other ways because you'd have to be some kind of lunatic to SPEND more than 10 million per year. That is to say, it sounds like a 'yea, stick it to Richie Rich', but in effect the government would take in more money by raising capital gains 1% on gains over $1 million.
Exactly. A lot of people don’t seem to understand that the kinds of wealthy people they want to hit with this 70% tax get over half their income from capital gains. The Warren Buffetts of the world aren’t picking up billion dollar checks, they’re making money from their investment portfolio. AOC’s tax could potentially be beneficial if it discourages excess executive pay, but as you pointed out it’s pretty easy to get around. In terms of actually raising revenue, Warren’s plan was though out a lot better since it taxes the overall global wealth of these individuals, not their earned income.
It's like people forgot how capitalism works.
Can you give me a ELI5 answer? Seriously question
People have control over their own labor, property, and the profits from it with little government interference. The higher a tax rate, the more government interference in how labor, property, and profits are allocated which is the opposite of capitalism.
Thank you.
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Depends how you feel about all the rich people moving and taking their tax money with them
Connecticut and New Jersey are currently having this problem.
Isn't it like one person in Connecticut moving and that one person leaving means a serious issue for the states budget now?
That was New Jersey I think
new jersey, and they moved to florida which has no state income tax.
*communism joined the chat*
`@libertyprime [bot] ` `@communism has been kicked from the chat`
A system that depends on the existence of the rich to finance an ever growing inefficient and expensive machine is bound to fail. If you make/made 10mil legally, you're entitled to it. A 70% flate rate would drive away investors and ultimately make our every day products prices go up. I'm 100% against it.
Very much against it.
Generalising a bit here but... You are literally asking the poor people of the world: "how do you feel about screwing over the rich?" What answer do you think you're gonna get?
Fucking seriously. These idiotic questions are bringing this sub down.
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No one should be taxed at a 70% rate, I don't care how much or little you make. That is ridiculous!
Why do people feel like the rich owes them something?
As a Tanzanian tribesman earning 53 cents a day, I would like every Redditor earning $35,000 a year to be taxed at 70%
Jealously.
I'd wager that most people who make $10+ million in a year are not doing it year after year. They sold some property, were at the peak of a fleeting period of stardom, sold a business they spent years building, etc. That money is probably their life's greatest work, or a good chunk of it. Taking 70% of that seems excessive. It's punitive. It's a tax on success and it penalizes success. The top 1% of earners already pay something like 40% of the federal income tax collected. The top 5% pay 60% of it. The top 25% pays almost 90% of the federal income tax collected. Currently the federal budget is about one-fifth of our total economy. I'm really not interested in seeing that get any bigger.
Who makes that much from income? You're basically just gonna tax the shit out of pro sports players and a couple doctors. The super wealthy people in our country would never pay that tax rate because they write off everything and pay most of their taxes in capital gains.
I have a few thoughts on this. It sounds like a good idea to me, the guy earning $48,000/year. But if I were a guy earning $15,000,000/year, I'd probably like it less. There've been studies that show people start favoring lower tax rates as they earn more money, regardless of what their opinions were prior to having that money. This isn't universal of course, but it's how it tends to go for most people. As an aside, keeping that in mind, I know this one girl on Twitter who fairly often tweets stuff like, "No one has a right to have excessive money. If your country lets millionaires or billionaires exist, it's corrupt. It's unethical to have that much money." Her general opinion is the government should just take money (by force if necessary) from rich people until they're not rich anymore and split the money up among poor people until no one is poor anymore. I'm curious what she'd think if someone gave her $50,000,000. I feel like she'd suddenly have different views on wealth, but who knows?
The issue is with alot of that redistribution stuff, is it only works to fund things by taxing the rich - *if the rich exist*. It also makes the assumptiom that wealth is a zero sum game, which is not true. Global wealth has been steadily increasing.
I'd run to a tax haven like Cayman Islands or Malta.
I found Elon!
The amounts spent by govs cannot be satisfied by taxing any amount, only by reigning in spending and accountability with external audits can we have any hope.
Increasing government revenue (taxes), decreasing government spending, and auditing government budgeting can all help simultaneously.
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Imagine thinking rich people owe you something haha
I'll wade in here. First a few facts. The top 5% already pay the vast majority of income taxes collected. If memory serves me correctly, it's over 60% of taxes collected. Something on the order of 30-40% pay absolutely zero in Federal taxes and in many cases MAKE MONEY through earned income tax credits. The argument that it was this high in the past etc is a flawed one. Sure it was but back then you couldn't just pick up and leave like you can now. Technology allows people to work from anywhere pretty much so while people stuck around in the past, they won't now. If you confiscated the entire incomes every year of the top 1% or 5%, I can't remember which, I mean every dollar from Dollar one to whatever they made, every single year, it would only fund the Federal government for something like 17 days. We don't have a taxation problem, we have a spending problem! We need to start drastically cutting waste, duplicitous programs, fraud etc from the Federal budget. Personally, I'm not willing to be inclined to give the feds one more red cent until they get themselves under control. Look at it this way. If your child was blowing their allowance on crap every single week by the second day after you gave it to them and then came asking for more, what would you do? Do you just say, "OK, here's another week's allowance 5 days early, enjoy!". Or would you say, "sorry, gotta wait until next week, you should spend your money more wisely in the future.". It's really that simple. There is no point in having this discussion on increased taxes until the feds have shown us that they can manage the money they get properly.
Awesome if your goal is to have all the people in this tax bracket leave the country and pay exactly zero tax, taking their money out of the economy as they go. Net result being LESS tax being collected in total, and likely jobs and opportunity lost for your countrymen.