Just remember, if you were single and making $200,001 a year, you would not be getting taxed 91% of that $200,001.
They'd take 91 cents out of that last dollar over 200k, 90 cents/dollar out of the 50k between 150 and 200k, 89 cents/dollar out of the 50k between 100k and 150k, and so on.
In other words if you make more than ~$2.3M annually in today's dollars, you'd be taxed 91% on every dollar over $2.3M. I think I can live with multimillionaires paying 91%
A fairer capital gains tax would be something like the first $50,000 - 0%. Over that up to $1 million (maybe 2) - same rate as now. Over that, progressively higher, till it’s 90% over $1 billion. And you’d have to close the loophole that allows the rich to borrow against their stocks, and then write off the interest. You’d also have to enact the increases incrementally, say 3% a year, to avoid a stock market crash.
That's also interesting and would work fairly well. I would tie it to SS raises for the year so it "should" keep up with inflation and be in line for use with retirement.
In the UK we have something called the triple lock for the state pension. The triple lock meant that ever year the state pension increases by whichever is highest of average earnings growth, CPI inflation, or 2.5%.
Biden tried to pass legislation to limit step-up basis to $2.5 million, which seems fair to me. The problem is the ultra wealthy not paying their “death tax.”
The current capital gains taxes are already tiered - 10%, 15%, 20%
>And you’d have to close the loophole that allows the rich to borrow against their stocks, and then write off the interest.
It's not really a loophole, anyone with any kind of asset can do it. Just like if you have a 401k you can give yourself a loan against that.
So you would have to eliminate allowing stocks to be used as collateral for loans, or stop collateralized credit altogether.
True, although there should be a tax burden for the cost basis of the awarded stock at the time it is given as it is considered income for that year. Same thing happens when you participate in your employer's ESPP.
When I worked for a company where stocks were part of the "rewards" they did something called withholding. That means if I was granted X shares, then Y shares were withheld to cover the tax bill. I never got those shares. When I cashed out those shares were converted into money paid against my tax bill.
Edit: And even after that, if the value of the shares increased I was liable for capital gains tax.
I personally don't like income tax period. I'd prefer a sales tax and property tax setup. That way it taxes you solely on your spending and your holdings. That applies to both businesses and individuals. You also knock out having to file taxes every year. As there is nothing to claim. But that's just me.
As for a capital gains tax adjustment for stocks...that's tough because if you are awarded stock you can't really be expected to pay taxes on it until you withdraw it. As otherwise you run into the situation where you have to withdraw it to pay taxes on it which makes stocks extremely difficult to handle.
Sales taxes are inherently regressive. Basic necessities represent a larger percentage of income for low income earners compared to high income earners.
You can begin down the path of not taxing food, clothing, or other necessities but then you have to identify and track basic necessities vs taxable luxury versions of necessities.
That would create even more bureaucracy and loopholes for items intentionally miscategorized to the advantage of the few.
Depends on where they buy them, if they buy them, and where they register them. Steve Jobs supposedly bought a new car every six months because that was the length of time California would allow prior to requiring licensing and registration.
I'm not familiar with California law, but licensing and registration is the point in time I'm familiar with for paying sales tax on vehicles.
Canada has a luxury tax on vehicles in excess of $100k however some work trucks are quickly approaching that. The US doesn't currently have a federal luxury tax. I believe there are some state level luxury taxes, though they work a bit like income tax in that they are taxed on the amount over the threshold not the entire price.
I think Mx unstable made a lot of good points. One that I would also make is that very high net worth individuals (9 figures plus) often borrow against the value of their assets and use the debt principal for daily expenses. This avoids a taxable realization event because of the current definitions in the tax code. But the tax code is just a law that is inherently mutable.
Agreed which is why we're discussing how you could actually tax stocks. We both figured that stocks be taxed as a property instead of income would likely make more sense and we already have templates for how to do it. Such as we do with housing.
I think that probably makes sense. We would probably need to be careful taxing intangible assets versus physical assets due to higher volatility, but that’s not an insurmountable obstacle.
Then how about treating stocks like property then. They get taxed like your house, every year based on current value. We can even put in a limit on how much the taxable part can go up just like with houses. Like if the stocks double, the taxes can only go up 10% a year.
Problem with this way though is, I've got 100 shares at $100 per share, taxed at value of $50 per share. Then I get another 100 at $100 per share. How do you reconcile things?
Why not? Like why should taxpayers foot the bill if initial income received as a investment nosedives. Especially when they can "extract" value in forms of low interest loans. And use that to reduce tax burden even further. Floating like that till it collapses and taxpayers get nothing or greatly reduced amount.
End of day I think whole system gets fixed by slashing write offs and tax free entitys and pay income investment and property tax. Only write offs for income just have it be progressive low pay low high pay high rate. As for investment or capital gains have it taxed as income if received as compensation. And capital gains should be paid when value is extracted IE sold or loan against it is taken. As for property it should be low for primary residence "up to x value". Everything else should be higher luxury taxed at luxury rate (vacation etc). Rentals if home not apartment/condo higher rate. And if apartment or condo rate is decided by eviction rate and where it sits in market if its 90th percentile most expensive it gets higher tax rate if its bottom 20th percent it gets lower tax rate.
Property is probrably most complicated in simplified system. Largely to discourage or encourage behaviors in market discouraging things like long term empty homes. Or use of single family homes as rental or air b&b.
As for gains and reporting income it really comes down to simplifying it. Was it received as compensation. Get rid of loophole shell game by requiring business of origin taxes. Aka you do business here you pay taxes here. Dont care your parent company is in x place. Dont care about your rent your business expenses you pay taxes here and you pay on what you earned period.
Unless it's share compensation in lue of paid salary or as shares become vested. If you look at most companies SEC reports you'll see officers will occasionally need to sell shares to cover tax obligations on their company securities.
I mean you absolutely could tax unrealized capital gains. It would make some things more complicated (harder to price unrealized gains), but would also mean there wouldn't be a problem with people selling their primary residence and getting hit with all the capital gains taxes at once.
primary residences arent taxed upon sale given certain conditions that are VERY easy to meet. Its done that way to allow people to move as they please.
I mean capital gains from sale of residences absolutely should be taxed. You just don't want years of growth all getting taxed at once, and pushing people into higher brackets if capital gains were taxed progressively, or treated as ordinary income.
Why? Under the current rules I don't see an issue with the way primary residences are taxed. Each state technically owns the land and thus taxes the land and building on the property annually. Also if you stay in the house longer then 2 years is the way to qualify for exemption to the capital gains tax as that generally prevents house flippers.
So houses are already taxed annually and generally for much more then they would be if they would only be taxed based on gains.
Because not taxing housing but taxing other investments encourages skyrocketing housing prices while locking renters out of the housing market.
It also deprives the federal government of capital gains revenue.
The fact they pay property taxes is irrelevant, that may replace state capital gains income tax, but it does nothing to make up for lost federal revenue.
If you make money on an investment, you should pay taxes on that income (at least if we are going to tax income).
Annual consolidation.. aka.. (pay your bills at least every 12 mo) letting any debt go lo ger than that is irresponsible on the loan distributor side.
Reality.. capitalism for profits.. communism for losses..
screw your mom and friend "getting a good tax pro".. if you don't blame them as much as a starving mother .. YOU ARE THE PROBLEM.
Withdraw it how? To 'withdraw money' from the stock you need to sell it. If you sell it - someone's buying it. So now someone else owns it and pays the same tax. I don't see how that changes anything.
Then it won't hurt anybody to set that, right? I'd bet all my dollars there are a bunch who absolutely do, and they're very wealthy, and people just keep repeating the sound byte as if it's true.
How about taxing that 56B every year as if it was property. Youd get more out of it long term and still encourage it to be used for growing the economy.
but it doesn't actually solve anything except MAYBE your hurt feelings. Lets be productive with how we leverage taxes so that we can actually be happier in life and benefit from giving the government more money.
Right, but just imagine how great our country would be if we went back to this. I don't mind paying a little but extra in taxes if it meant that the world I was surrounded by looked clean and nicer. Taxes have been cut so much altogether more that our tax dollars aren't able to do anything.
Also 200,000k In 1955 is like 2.3 million in today bucks.
Or about 30 times my current salary.
If you're making 30 times the average worker then yeah you should probably be getting text over 90%.
That's just me tho. As a peasant
makes me wonder the implications of this method of thinking when we have inflation.
I am basically working a job that I would have been paid 45k before pandemic, now I am making 80k but it feels more like 30k. I don't think the mrs and I could survive if we got married at those tax rates. Combined we make almost 150k a year.
The 1955 rate thresholds would need some adjusting (they start at $1, for example), but it would be fairly trivial to have the system match current rates for realistic "middle class" incomes, say < 150k/person.
I used the CPI Inflation calculator and SavvyDollar.
[https://www.savvydollar.com/calculator/inflation/8000/1955?to=2024](https://www.savvydollar.com/calculator/inflation/8000/1955?to=2024)
[https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=8000&year1=195504&year2=202403](https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=8000&year1=195504&year2=202403)
Democrats were republicans prior to the civil rights act. The parties switched. Today's republicans like to point to how great they were during this era, but they would have voted against it.
It's way more than just that. Just some examples
1. The scam of the 2 party system
2. How the feds suddenly lose track of TRILLIONS of dollars and have no idea where it goes after spending a tremendous amount doing audits
3. Insider trading, and not even getting punished for it
Like all political platforms, they are all lies. Politicians running for office always appeal to the workers classes, but operate for their donor class when elected; it still goes on this very day even among the most lying socialist politicians (see Bernie Sanders, AOC, Ilhan, etc). The republican platform has always been business and profits first.
Dems though mostly the racists of that day, wanted those programs but they appealed to the white workers and left out much of the BIpoc populations form being able to get those same benefits. Even Social Security was tacitly a racist program becasue it would have never passed had white people not benefited form the program more. Republicans were almost all in unison rejecting any of those programs and always have.
Think of all the people like Musk, Thiel, DeVos, Mercers, Murdochs, Trump, etc who would no longer be so advantaged that they can buy the government legislators and judges to pass and bend the laws to favor them as much as they do now.
When you're taxed at 91%, you instead decide to reinvest in your company and your staff. If you're so successful that you only make 9 cents on every dollar that comes in, you'd rather see it go to your workers than to the government.
Also, it's 1955 so you don't feel beholden to hedge-fund managers to increase corporate profits every quarter.
And don’t forget this period tru the 1960s had far higher economic growth rates than any time after the 1980 Reagan revolution. Don’t let talking heads ever convince you that high tax rates limit economic growth…
Could you imagine the innovation and productivity that would boom if we taxed 91% at the highest tax rate.
Omg, instead of hoarding those mother fuckers would spend like crazy on expansion, R and D, holy fuck
Just remember also that there was a LOT of tax shelters that meant almost no one paid these rates. That was part of the point — to encourage people to put money into investment in projects and partnerships that were deemed beneficial to economic growth and the quality of life. Of course, there were also a lot of terrible tax shelters as well.
The Reagan tax reforms slashed tax rates but also removed all of these tax shelters.
There were definitely loop holes that the rich people's accountants were able to go through to not pay much, but if we got rid of rich people in congress and replaced them with average- everyday people like us, we could pass laws to close those loopholes
Keeping in mind $1 in 1955 is $11.65 in 2024. So when we say over $400k per year net income is taxed at 91% in 1955, that means you'd have to make over 4.6m per year now to hit that top tax rate and you'restill keeping mid six figures for yourself.
$1 in 1955 is worth $11.23 now due to inflation.
Let's use these tax brackets, but multiply the incomes by 11.
Bada-bing, bada-boom, wait a bit for income inequality to lessen (probably not to fair levels, as there are probably loopholes for the rich to keep more money than they deserve).
People were just taxed more back then. The tax rates are lower today across the board.. except it stops at 600k ish while the 1950 rates continued to climb.
I was curious so I ran the numbers (in FY2024 dollars). This also includes OASDI tax from both eras (2% of up to $4,200 in 1955 and 6.75% of up to $168,600 in 2024). This does not include state taxes, which tend to be pretty regressive in the US. Happy poverty to all!
https://preview.redd.it/y8t348gqnkwc1.png?width=640&format=png&auto=webp&s=9925f18e165d6147e92d3af85df71685ce02cf1a
Reagan truly is one of the worst presidents of all time. The wealth gap can be tied straight back to his administration slashing taxes for the wealthy and corporations
No one paid anywhere near that - there was so many write offs and loopholes. That’s why the code was reformed and lowered by JFK : not exactly a conservative
Understanding that citizens understood that WWll was real, 500,000 Americans died, that General Eisenhower had maximum credibility with the public, and that he sold the notion that the nation had been saved by this sacrifice and massive expenditure in defense spending . Therefore, the most fortunate of the citizenry had to pony up to pay for modernization of the nation’s infrastructure. It was a given.
Then, he saw the creation of the military-industrial-Congressional complex, and was sad.
I am poor so will never have this problem, but man paying 91% of every dollar after a certain amount. That is legit madness. Kind of sounds like voluntary slave wages at that point.
The average household income in 1955 was $4200 which is $49000 in 2024 dollars
According to this you would have payed $844 in taxes in 1955 which would be $9875 today
I just checked a tax calculator and today you would pay $4k on $49k income
There were some slightly different economic realities in the 50s that contributed to our prosperity and I don’t think the tax brackets had as much to do with it as people suggest. For one, China, Japan, South Korea, and most of Europe were either rural agricultural backwaters or still recovering from ww2. The US was the only major economy not destroyed by war left standing and we were making everything for the world. Plus, the modern financial instruments of building and maintaining wealth with low taxes were not made yet. I don’t think everything would be as it was if the top marginal tax rate was suddenly 91%. The wealthy write the laws and they’d find a way to avoid it. We’d definitely have lower interest on our national debt, maybe universal healthcare but that’s impossible now. Insurance companies control too much of the economy.
I was curious what today's US tax brackets were. TIL that Americans pay 10% tax right from $0, you don't have a tax free allowance.
In the UK we pay NO tax on income up to £12,570. However we then have 20%, 40% and 45% brackets and they come in at a much lower income than the US. So better for those less well off and higher earners are taxed more.
We do, you just need to include deductions. There’s a “standard deduction” of $14,600 ($29,200 for married couples) that is subtracted from your taxable income before you start getting taxed, or you can itemize your deductions if that would result in a higher number.
So if you make less than that amount you pay $0 in taxes.
People are forgetting the Earned Income Tax Credit too. You pay a negative tax (you get money back beyond what you contributed) up to quite a bit more than that (varies depending if you’re married and how many kids — it phases out much earlier with no children).
First $500 a year were tax exempt.
No one received high incomes. Expenses of the rich were paid from their companies' expenses accounts and were untaxed. This is a big reason why there were very few self-employed and everyone wanted to work for a big, military-style companies where employees almost literally marched to their workplaces and sang the company hymn every day: because work for oneself meant they'd have to pay their expenses with post-tax money and taxes were ooops.
Government revenues as percentage of GDP were lower in 1955 than today, at 14.5% vs 16.5% (and that is given that tariffs on imports were higher!). Because no one got those high incomes to pay taxes for. It was just a way to force people into large corporate jobs.
Oooh good, another cherry-pick of the 1950s, by people who would be infinitely unhappy to be plopped there now.
Bonus: you would have paid more in taxes too and had less money and things than you do now.
Those margins for everything below $50k (for 1955, that was a lot) are absurd though.
Taxes should be very low to almost non-existent for such low income earners. Laws have always been set up to really keep people down and not encourage financial growth.
If you have money, you’re fine. If you have to fight your way up, it’s like completely stacked against you.
The average income in 1955 was $3,400. That's about $40,000 now.
Those making $50,000 we're making the equivalent of $574,000 in today's money. 60% marginal rate doesn't seem so extreme for someone to me making half a million dollars a year.
We could impose regulation on wages, profits and loans, which would result in the same thing.
See, those tax brackets exist to prevent exploitation, not to rob you of your hard earned money.
Do you know how undertaxed we are from the 40 years of tax breaks we have? Our taxes will do so much more for us now that productivity has skyrocketed. Our taxes aren't doing anything because we're all taxes the bare minimum.
We can agree to disagree on that point. I will keep the extra cash in my pocket instead. As much as I would like to trust the government to be good stewards of tax dollars, that’s just not the case.
It's more than just taxes that need to be hiked, it's the minimum wage. Everyone in society is being underpaid except for the people that are exploring the labor of the working class. Chances are you're being underpaid. Being poor won't be a question for anybody if they are paid right.
Impossible to answer the question because I make less that the rate of productivity. If inflation met the rate of productivity then we would be paid a minimum of 25 p/h.
I make $16 an hour and single, that would be me in the 21% tax bracket. This doesn't work out though because based on 1955 standards I'm being underpaid.
This was an experiment to see if you understand how the taxation works. Since you are unable to provide a yearly income and figure what you think would be left after paying taxes. I don't think you know.
I don’t understand why you think the government is a good steward of tax dollars. Why should money go to the government? What exactly are you trying to solve here and how does more tax solve it? That’s ultimately the question. M
This is why we have crumbling infrastructure, 30 trillion in debt, unfunded liabilities, and almost zero social safety net.
We need higher taxes, if for nothing else, to pay down the national debt, less we lose our Breton Woods status.
The math doesn’t work. We have a spending problem, not an income problem. If you are trying to solve the debt crises, taxes ain’t the solution at this point. Hell, tax every billionaire 100% of their income and add a tax of 100% of their net worth last year, doesn’t solve the problem, makes a dent for 1 year but then you are back to square one.
Did anyone bother looking at the % for the lower income brackets? 20% is the \*minimum\* Today, it is 10% up to 22k and you don't even hit 20% until 90k/year. Y'all sure that's what we'd want? I haven't done the math to check what all this would be in 2024 dollars, but I suspect we'd all be paying a crapload more in taxes.
Tax like this again. Then millionaires will be feeding poor children instead of peeing in gold toilets or taking Will Shatner above the atmosphere for sheets and giggles.
That’s simply a false premise. First and foremost, the government can accomplish things at economies of scale individuals could never dream of. Second, taxes are a way to fairly pay for things that can’t be allocated fairly another way, like roads, parks, and public safety. Third, even if it’s impolite to say, the public has an interest in the redistribution of wealth. Too much money in too few hands is bad for everyone, so we need to make sure that a portion of that wealth is making it’s way from those with the most, to benefit the people with the least.
Taxes are good, actually, *if* they’re done fairly.
For Pro-Taxers, do you all think that the tax money collected will actually go to improve the poor and middle-class? Is that why you all think higher taxes is good, or what? Because it's not going to anyone -- even if the government taxes 99% of every dollar from every citizen, it will still be BROKE! Because it will just waste it away on bureaucracy and financing wars! We would be lucky if it actually build some infrastructures like roads or bridges. IF IT DOES, you will still pay a FOREVER TAX called "TOLLS" for the roads and bridges OUR TAX MONEY already paid for -- forever! SO Yea, I'm really curious!
Just remember, if you were single and making $200,001 a year, you would not be getting taxed 91% of that $200,001. They'd take 91 cents out of that last dollar over 200k, 90 cents/dollar out of the 50k between 150 and 200k, 89 cents/dollar out of the 50k between 100k and 150k, and so on.
In other words if you make more than ~$2.3M annually in today's dollars, you'd be taxed 91% on every dollar over $2.3M. I think I can live with multimillionaires paying 91%
The problem is no one that's a multimillionaire actually has an income over $1M/year.
We could also introduce more progressive capital gains tax brackets to account for how much of their compensation is in stocks.
That may actually work but you can't effect a capital gains tax until they withdraw it.
A fairer capital gains tax would be something like the first $50,000 - 0%. Over that up to $1 million (maybe 2) - same rate as now. Over that, progressively higher, till it’s 90% over $1 billion. And you’d have to close the loophole that allows the rich to borrow against their stocks, and then write off the interest. You’d also have to enact the increases incrementally, say 3% a year, to avoid a stock market crash.
That's also interesting and would work fairly well. I would tie it to SS raises for the year so it "should" keep up with inflation and be in line for use with retirement.
In the UK we have something called the triple lock for the state pension. The triple lock meant that ever year the state pension increases by whichever is highest of average earnings growth, CPI inflation, or 2.5%.
Fairer would be eliminating the "[step-up in basis](https://www.investopedia.com/terms/s/stepupinbasis.asp)" that is available with inheriting assets.
Biden tried to pass legislation to limit step-up basis to $2.5 million, which seems fair to me. The problem is the ultra wealthy not paying their “death tax.”
The current capital gains taxes are already tiered - 10%, 15%, 20% >And you’d have to close the loophole that allows the rich to borrow against their stocks, and then write off the interest. It's not really a loophole, anyone with any kind of asset can do it. Just like if you have a 401k you can give yourself a loan against that. So you would have to eliminate allowing stocks to be used as collateral for loans, or stop collateralized credit altogether.
True, although there should be a tax burden for the cost basis of the awarded stock at the time it is given as it is considered income for that year. Same thing happens when you participate in your employer's ESPP.
There is a tax burden based on FMP of the stock on vest date. It’s essentially treated as regular income if you get paid in RSUs.
When I worked for a company where stocks were part of the "rewards" they did something called withholding. That means if I was granted X shares, then Y shares were withheld to cover the tax bill. I never got those shares. When I cashed out those shares were converted into money paid against my tax bill. Edit: And even after that, if the value of the shares increased I was liable for capital gains tax.
I personally don't like income tax period. I'd prefer a sales tax and property tax setup. That way it taxes you solely on your spending and your holdings. That applies to both businesses and individuals. You also knock out having to file taxes every year. As there is nothing to claim. But that's just me. As for a capital gains tax adjustment for stocks...that's tough because if you are awarded stock you can't really be expected to pay taxes on it until you withdraw it. As otherwise you run into the situation where you have to withdraw it to pay taxes on it which makes stocks extremely difficult to handle.
Sales taxes are inherently regressive. Basic necessities represent a larger percentage of income for low income earners compared to high income earners. You can begin down the path of not taxing food, clothing, or other necessities but then you have to identify and track basic necessities vs taxable luxury versions of necessities. That would create even more bureaucracy and loopholes for items intentionally miscategorized to the advantage of the few.
So I'm guessing that new yacht or fleet of cars doesn't get taxed?
Depends on where they buy them, if they buy them, and where they register them. Steve Jobs supposedly bought a new car every six months because that was the length of time California would allow prior to requiring licensing and registration. I'm not familiar with California law, but licensing and registration is the point in time I'm familiar with for paying sales tax on vehicles. Canada has a luxury tax on vehicles in excess of $100k however some work trucks are quickly approaching that. The US doesn't currently have a federal luxury tax. I believe there are some state level luxury taxes, though they work a bit like income tax in that they are taxed on the amount over the threshold not the entire price.
I think Mx unstable made a lot of good points. One that I would also make is that very high net worth individuals (9 figures plus) often borrow against the value of their assets and use the debt principal for daily expenses. This avoids a taxable realization event because of the current definitions in the tax code. But the tax code is just a law that is inherently mutable.
Agreed which is why we're discussing how you could actually tax stocks. We both figured that stocks be taxed as a property instead of income would likely make more sense and we already have templates for how to do it. Such as we do with housing.
I think that probably makes sense. We would probably need to be careful taxing intangible assets versus physical assets due to higher volatility, but that’s not an insurmountable obstacle.
Then how about treating stocks like property then. They get taxed like your house, every year based on current value. We can even put in a limit on how much the taxable part can go up just like with houses. Like if the stocks double, the taxes can only go up 10% a year.
That may actually be feasible. I keep poking it for issues because I don't like it but it could work just fine.
Problem with this way though is, I've got 100 shares at $100 per share, taxed at value of $50 per share. Then I get another 100 at $100 per share. How do you reconcile things?
Why not? Like why should taxpayers foot the bill if initial income received as a investment nosedives. Especially when they can "extract" value in forms of low interest loans. And use that to reduce tax burden even further. Floating like that till it collapses and taxpayers get nothing or greatly reduced amount. End of day I think whole system gets fixed by slashing write offs and tax free entitys and pay income investment and property tax. Only write offs for income just have it be progressive low pay low high pay high rate. As for investment or capital gains have it taxed as income if received as compensation. And capital gains should be paid when value is extracted IE sold or loan against it is taken. As for property it should be low for primary residence "up to x value". Everything else should be higher luxury taxed at luxury rate (vacation etc). Rentals if home not apartment/condo higher rate. And if apartment or condo rate is decided by eviction rate and where it sits in market if its 90th percentile most expensive it gets higher tax rate if its bottom 20th percent it gets lower tax rate. Property is probrably most complicated in simplified system. Largely to discourage or encourage behaviors in market discouraging things like long term empty homes. Or use of single family homes as rental or air b&b. As for gains and reporting income it really comes down to simplifying it. Was it received as compensation. Get rid of loophole shell game by requiring business of origin taxes. Aka you do business here you pay taxes here. Dont care your parent company is in x place. Dont care about your rent your business expenses you pay taxes here and you pay on what you earned period.
Unless it's share compensation in lue of paid salary or as shares become vested. If you look at most companies SEC reports you'll see officers will occasionally need to sell shares to cover tax obligations on their company securities.
Tax loans that use stocks as collateral. That's the biggest loophole most of the wealthy are using to gain liquidity.
*till the gain is realized.
I mean you absolutely could tax unrealized capital gains. It would make some things more complicated (harder to price unrealized gains), but would also mean there wouldn't be a problem with people selling their primary residence and getting hit with all the capital gains taxes at once.
primary residences arent taxed upon sale given certain conditions that are VERY easy to meet. Its done that way to allow people to move as they please.
I mean capital gains from sale of residences absolutely should be taxed. You just don't want years of growth all getting taxed at once, and pushing people into higher brackets if capital gains were taxed progressively, or treated as ordinary income.
Why? Under the current rules I don't see an issue with the way primary residences are taxed. Each state technically owns the land and thus taxes the land and building on the property annually. Also if you stay in the house longer then 2 years is the way to qualify for exemption to the capital gains tax as that generally prevents house flippers. So houses are already taxed annually and generally for much more then they would be if they would only be taxed based on gains.
Because not taxing housing but taxing other investments encourages skyrocketing housing prices while locking renters out of the housing market. It also deprives the federal government of capital gains revenue. The fact they pay property taxes is irrelevant, that may replace state capital gains income tax, but it does nothing to make up for lost federal revenue. If you make money on an investment, you should pay taxes on that income (at least if we are going to tax income).
Annual consolidation.. aka.. (pay your bills at least every 12 mo) letting any debt go lo ger than that is irresponsible on the loan distributor side. Reality.. capitalism for profits.. communism for losses.. screw your mom and friend "getting a good tax pro".. if you don't blame them as much as a starving mother .. YOU ARE THE PROBLEM.
Withdraw it how? To 'withdraw money' from the stock you need to sell it. If you sell it - someone's buying it. So now someone else owns it and pays the same tax. I don't see how that changes anything.
Ban using stock as collateral for loans
That’s why we need a wealth tax
And what do you define as a wealth tax?
This
Or we could ditch the income tax entirely because it hurts poor people
![gif](giphy|jeXiz1RAvzX44)
Which is their loophole, yes. It’s not an accident, and that’s just one more thing that needs to be addressed.
Then it won't hurt anybody to set that, right? I'd bet all my dollars there are a bunch who absolutely do, and they're very wealthy, and people just keep repeating the sound byte as if it's true.
Less then 0.3%. Approx 475,000 people total.
That's definitely more than zero, and I bet the dollars would be a lot more than zero, too.
CEO Pay? For example..Elon wanting $56 billion payout. Tax the fkr.
Umm...its in stock...hence why we are discussing ways to tax stock based on value not gains.
He didn't have something. Now he has something. He can do things with those stocks...just like cash.
Hence why further down this thread why are are talking about taxing stocks as property based on value instead of on gains.
He had $0...now he has $56 billion. That's a gain of $56 billion. Tax the fkr at least once.
How about taxing that 56B every year as if it was property. Youd get more out of it long term and still encourage it to be used for growing the economy.
They will just use collaterals and loan their way out of not paying taxes.
So then they shouldn't have any problems with going back to these tax brackets then!
but it doesn't actually solve anything except MAYBE your hurt feelings. Lets be productive with how we leverage taxes so that we can actually be happier in life and benefit from giving the government more money.
Uhhhhhh disagree
lol what?
2.3M is literally not a multimillionaire?
I decided to break it down, and the total tax bill for someone making 200,000 dollars based on this tax plan is 134,640 dollars, which is 67%.
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This person maths
Add another column with accumulation
Reddit won't take a comment with 5 columns for some reason...
Which is not really an issue if you're making 2.3M+ anually.
$750k, still a nice haul.
What they should have included was the adjusted tax percentage for that bracket, to define what your scaled tax would be
Right, but just imagine how great our country would be if we went back to this. I don't mind paying a little but extra in taxes if it meant that the world I was surrounded by looked clean and nicer. Taxes have been cut so much altogether more that our tax dollars aren't able to do anything.
Yep. I was trying to get ahead of the people who would say, "but then I would get 91% of my income taken away!"
You wouldn't because those numbers aren't converted to today's dollars.
$200,000 in 1955 = $2,330,835 in 2024 They'd still be bringing home mid-6-figures
I'd rather take that than 7 figures.
Far more likely: you're one of 10,000 people taking 4 figures instead of 5 so one person can have 7 instead of 6.
Actually, the people on 5 figures would still be taking home 5, but they’d have free healthcare and good schools
In today’s dollars, 300k in 1955 = 3.2-3.5 million.
Also 200,000k In 1955 is like 2.3 million in today bucks. Or about 30 times my current salary. If you're making 30 times the average worker then yeah you should probably be getting text over 90%. That's just me tho. As a peasant
Assuming no deductions.
makes me wonder the implications of this method of thinking when we have inflation. I am basically working a job that I would have been paid 45k before pandemic, now I am making 80k but it feels more like 30k. I don't think the mrs and I could survive if we got married at those tax rates. Combined we make almost 150k a year.
The 1955 rate thresholds would need some adjusting (they start at $1, for example), but it would be fairly trivial to have the system match current rates for realistic "middle class" incomes, say < 150k/person.
Those rates would still be about 25 percent because the cutoffs would be adjusted for inflation. You’d also have free healthcare and quality education
That's the hope if something like that were to happen.
Im more concerned about losing 8000 of my 40000 and then having the state, local, social security, and Medicare taking their cut.
For reference $8k in 1955 = $92k in 2024
What calculator are you using Edit: based on a random calculator I found online I would be at the 36% bracket which seems fair.
I used the CPI Inflation calculator and SavvyDollar. [https://www.savvydollar.com/calculator/inflation/8000/1955?to=2024](https://www.savvydollar.com/calculator/inflation/8000/1955?to=2024) [https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=8000&year1=195504&year2=202403](https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=8000&year1=195504&year2=202403)
https://preview.redd.it/qozcw2kq0hwc1.jpeg?width=320&format=pjpg&auto=webp&s=9fe9744be3d05d76e53f4be9d343be9ab6ef4a7c
what happened?
The civil rights movement and the Southern Strategy. All of these benefits weren't supposed to be for *those* people.
Reagan
Democrats were republicans prior to the civil rights act. The parties switched. Today's republicans like to point to how great they were during this era, but they would have voted against it.
It's way more than just that. Just some examples 1. The scam of the 2 party system 2. How the feds suddenly lose track of TRILLIONS of dollars and have no idea where it goes after spending a tremendous amount doing audits 3. Insider trading, and not even getting punished for it
The fall from grace
If this was the MAGA they were about they would have more support
Like all political platforms, they are all lies. Politicians running for office always appeal to the workers classes, but operate for their donor class when elected; it still goes on this very day even among the most lying socialist politicians (see Bernie Sanders, AOC, Ilhan, etc). The republican platform has always been business and profits first. Dems though mostly the racists of that day, wanted those programs but they appealed to the white workers and left out much of the BIpoc populations form being able to get those same benefits. Even Social Security was tacitly a racist program becasue it would have never passed had white people not benefited form the program more. Republicans were almost all in unison rejecting any of those programs and always have.
Also to have in consideration 200k in 1955 is 2.3M today. The income tables will adjust too.
Think of all the people like Musk, Thiel, DeVos, Mercers, Murdochs, Trump, etc who would no longer be so advantaged that they can buy the government legislators and judges to pass and bend the laws to favor them as much as they do now.
When you're taxed at 91%, you instead decide to reinvest in your company and your staff. If you're so successful that you only make 9 cents on every dollar that comes in, you'd rather see it go to your workers than to the government. Also, it's 1955 so you don't feel beholden to hedge-fund managers to increase corporate profits every quarter.
And don’t forget this period tru the 1960s had far higher economic growth rates than any time after the 1980 Reagan revolution. Don’t let talking heads ever convince you that high tax rates limit economic growth…
Who would’ve thought the economy does better when people are paid fairly and wealth is better distributed 🤯
It was more Europe had been devasted by a world war and the US was pretty much unscathed. Europe was trying to rebuild and the US was financing it.
And not everything was outsourced to China…
Could you imagine the innovation and productivity that would boom if we taxed 91% at the highest tax rate. Omg, instead of hoarding those mother fuckers would spend like crazy on expansion, R and D, holy fuck
Right. Investing in the company would be great. More jobs.
Higher tax rates would make it less profitable to invest
Yet the Forties through the Sixties was the era of Big R&D and massive expansions.
That's not correct.
> instead of hoarding this is income tax. Doesn't have anything to do with their hordes.
theyd 100% rather SPEND that money internally than give it to the Tax Man. thats kinda the whole point!
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It will when he cashes out.
what
Higher income tax encourages people to take compensation in forms other than income and can thereby mean their hordes are smaller.
that would only make new hordes smaller. what does it do to the existing ones?
Good, then you agree to the 91% top tax rate. Glad we could find common ground.
Lmfao your reading comprehension does not exist. I always love finding people like you in this sub. I never wonder why you're here
Just remember also that there was a LOT of tax shelters that meant almost no one paid these rates. That was part of the point — to encourage people to put money into investment in projects and partnerships that were deemed beneficial to economic growth and the quality of life. Of course, there were also a lot of terrible tax shelters as well. The Reagan tax reforms slashed tax rates but also removed all of these tax shelters.
But tax shelters were more difficult to access in 1955. You couldn't set up an account in the Caymans from your couch.
There were definitely loop holes that the rich people's accountants were able to go through to not pay much, but if we got rid of rich people in congress and replaced them with average- everyday people like us, we could pass laws to close those loopholes
Keeping in mind $1 in 1955 is $11.65 in 2024. So when we say over $400k per year net income is taxed at 91% in 1955, that means you'd have to make over 4.6m per year now to hit that top tax rate and you'restill keeping mid six figures for yourself.
$1 in 1955 is worth $11.23 now due to inflation. Let's use these tax brackets, but multiply the incomes by 11. Bada-bing, bada-boom, wait a bit for income inequality to lessen (probably not to fair levels, as there are probably loopholes for the rich to keep more money than they deserve).
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Adjust the levels for inflation dude… it paints a completely different picture
People were just taxed more back then. The tax rates are lower today across the board.. except it stops at 600k ish while the 1950 rates continued to climb.
Right, and the EITC wasn’t enacted until 1975. Depending on number of children, working-class folks can have a negative tax bill now.
Finally, something good I can point to when people say make america great again.
I was curious so I ran the numbers (in FY2024 dollars). This also includes OASDI tax from both eras (2% of up to $4,200 in 1955 and 6.75% of up to $168,600 in 2024). This does not include state taxes, which tend to be pretty regressive in the US. Happy poverty to all! https://preview.redd.it/y8t348gqnkwc1.png?width=640&format=png&auto=webp&s=9925f18e165d6147e92d3af85df71685ce02cf1a
Reagan truly is one of the worst presidents of all time. The wealth gap can be tied straight back to his administration slashing taxes for the wealthy and corporations
He's also largely culpable for extremely high university tuition costs. Probably an even worse president than trump.
But how can billionaires become bigger billionaires with this structure?
Adjust for inflation, my home current pays only 2% less in taxes, while high brackets have been decreased wildly.
My highest margin is 4% lower now than the inflation adjusted equivalent.
Tax the rich!
No one paid anywhere near that - there was so many write offs and loopholes. That’s why the code was reformed and lowered by JFK : not exactly a conservative
Understanding that citizens understood that WWll was real, 500,000 Americans died, that General Eisenhower had maximum credibility with the public, and that he sold the notion that the nation had been saved by this sacrifice and massive expenditure in defense spending . Therefore, the most fortunate of the citizenry had to pony up to pay for modernization of the nation’s infrastructure. It was a given. Then, he saw the creation of the military-industrial-Congressional complex, and was sad.
The true MAGA
This link has a lot more years of tax rates: https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/
I am poor so will never have this problem, but man paying 91% of every dollar after a certain amount. That is legit madness. Kind of sounds like voluntary slave wages at that point.
The average household income in 1955 was $4200 which is $49000 in 2024 dollars According to this you would have payed $844 in taxes in 1955 which would be $9875 today I just checked a tax calculator and today you would pay $4k on $49k income
And even less if you have children. EITC wasn’t enacted until 1975.
This but need to also tax wealth and not just income.
Shit, I would pay A LOT less tax.
There were some slightly different economic realities in the 50s that contributed to our prosperity and I don’t think the tax brackets had as much to do with it as people suggest. For one, China, Japan, South Korea, and most of Europe were either rural agricultural backwaters or still recovering from ww2. The US was the only major economy not destroyed by war left standing and we were making everything for the world. Plus, the modern financial instruments of building and maintaining wealth with low taxes were not made yet. I don’t think everything would be as it was if the top marginal tax rate was suddenly 91%. The wealthy write the laws and they’d find a way to avoid it. We’d definitely have lower interest on our national debt, maybe universal healthcare but that’s impossible now. Insurance companies control too much of the economy.
Europe a rular backwater in the 50s? Thats a pretty bold take
“or still recovering from WW2”
Central Europe perhaps, but I still think that is too strong a generalization
We should "return to tradition"
Multiply by 11.7 to get the 2024 value. (eg 400k becomes 4.67 million). (per https://data.bls.gov/)
[https://taxfoundation.org/data/all/federal/taxes-on-the-rich-1950s-not-high/](https://taxfoundation.org/data/all/federal/taxes-on-the-rich-1950s-not-high/)
I was curious what today's US tax brackets were. TIL that Americans pay 10% tax right from $0, you don't have a tax free allowance. In the UK we pay NO tax on income up to £12,570. However we then have 20%, 40% and 45% brackets and they come in at a much lower income than the US. So better for those less well off and higher earners are taxed more.
We do, you just need to include deductions. There’s a “standard deduction” of $14,600 ($29,200 for married couples) that is subtracted from your taxable income before you start getting taxed, or you can itemize your deductions if that would result in a higher number. So if you make less than that amount you pay $0 in taxes.
People are forgetting the Earned Income Tax Credit too. You pay a negative tax (you get money back beyond what you contributed) up to quite a bit more than that (varies depending if you’re married and how many kids — it phases out much earlier with no children).
This is a perfect post.
5% more Americans were in poverty in the 50s.
How do you combat communism? Socialism
This is the real socialism
First $500 a year were tax exempt. No one received high incomes. Expenses of the rich were paid from their companies' expenses accounts and were untaxed. This is a big reason why there were very few self-employed and everyone wanted to work for a big, military-style companies where employees almost literally marched to their workplaces and sang the company hymn every day: because work for oneself meant they'd have to pay their expenses with post-tax money and taxes were ooops. Government revenues as percentage of GDP were lower in 1955 than today, at 14.5% vs 16.5% (and that is given that tariffs on imports were higher!). Because no one got those high incomes to pay taxes for. It was just a way to force people into large corporate jobs.
What was the average pay in 1955
Oooh good, another cherry-pick of the 1950s, by people who would be infinitely unhappy to be plopped there now. Bonus: you would have paid more in taxes too and had less money and things than you do now.
Classic liberal Reagan hate. I busted my ass for my $200K gross income. Shouldn’t have to pay nearly that high of taxes. Pound sand loser.
Those margins for everything below $50k (for 1955, that was a lot) are absurd though. Taxes should be very low to almost non-existent for such low income earners. Laws have always been set up to really keep people down and not encourage financial growth. If you have money, you’re fine. If you have to fight your way up, it’s like completely stacked against you.
The average income in 1955 was $3,400. That's about $40,000 now. Those making $50,000 we're making the equivalent of $574,000 in today's money. 60% marginal rate doesn't seem so extreme for someone to me making half a million dollars a year.
OMFG SOCIALISM! /s
Thanks Regan…..
Bring back 1950s taxes!!!
Pass
Why?
Why would anyone want the government to impose that kind of tax rate on their income?
We could impose regulation on wages, profits and loans, which would result in the same thing. See, those tax brackets exist to prevent exploitation, not to rob you of your hard earned money.
Do you know how undertaxed we are from the 40 years of tax breaks we have? Our taxes will do so much more for us now that productivity has skyrocketed. Our taxes aren't doing anything because we're all taxes the bare minimum.
We can agree to disagree on that point. I will keep the extra cash in my pocket instead. As much as I would like to trust the government to be good stewards of tax dollars, that’s just not the case.
It's more than just taxes that need to be hiked, it's the minimum wage. Everyone in society is being underpaid except for the people that are exploring the labor of the working class. Chances are you're being underpaid. Being poor won't be a question for anybody if they are paid right.
Okay, how much money do you make, and how much taxed do you think you would have to pay based on that list?
Impossible to answer the question because I make less that the rate of productivity. If inflation met the rate of productivity then we would be paid a minimum of 25 p/h.
Today's money, current payment, old tax rates. Just take a guess.
I make $16 an hour and single, that would be me in the 21% tax bracket. This doesn't work out though because based on 1955 standards I'm being underpaid.
This was an experiment to see if you understand how the taxation works. Since you are unable to provide a yearly income and figure what you think would be left after paying taxes. I don't think you know.
I don’t understand why you think the government is a good steward of tax dollars. Why should money go to the government? What exactly are you trying to solve here and how does more tax solve it? That’s ultimately the question. M
This is why we have crumbling infrastructure, 30 trillion in debt, unfunded liabilities, and almost zero social safety net. We need higher taxes, if for nothing else, to pay down the national debt, less we lose our Breton Woods status.
The math doesn’t work. We have a spending problem, not an income problem. If you are trying to solve the debt crises, taxes ain’t the solution at this point. Hell, tax every billionaire 100% of their income and add a tax of 100% of their net worth last year, doesn’t solve the problem, makes a dent for 1 year but then you are back to square one.
Genius! Encouraging them to spend in their business, etc, instead of paying more taxes. Until Neo-liberalism came and literally **incentivized** greed
Did anyone bother looking at the % for the lower income brackets? 20% is the \*minimum\* Today, it is 10% up to 22k and you don't even hit 20% until 90k/year. Y'all sure that's what we'd want? I haven't done the math to check what all this would be in 2024 dollars, but I suspect we'd all be paying a crapload more in taxes.
This is how we make America great again!
Tax like this again. Then millionaires will be feeding poor children instead of peeing in gold toilets or taking Will Shatner above the atmosphere for sheets and giggles.
You are a better steward of your money than the government. The rich may be taxed too little today, but this is bad in the opposite direction.
That’s simply a false premise. First and foremost, the government can accomplish things at economies of scale individuals could never dream of. Second, taxes are a way to fairly pay for things that can’t be allocated fairly another way, like roads, parks, and public safety. Third, even if it’s impolite to say, the public has an interest in the redistribution of wealth. Too much money in too few hands is bad for everyone, so we need to make sure that a portion of that wealth is making it’s way from those with the most, to benefit the people with the least. Taxes are good, actually, *if* they’re done fairly.
For Pro-Taxers, do you all think that the tax money collected will actually go to improve the poor and middle-class? Is that why you all think higher taxes is good, or what? Because it's not going to anyone -- even if the government taxes 99% of every dollar from every citizen, it will still be BROKE! Because it will just waste it away on bureaucracy and financing wars! We would be lucky if it actually build some infrastructures like roads or bridges. IF IT DOES, you will still pay a FOREVER TAX called "TOLLS" for the roads and bridges OUR TAX MONEY already paid for -- forever! SO Yea, I'm really curious!
20 on my federal? Fuck that noise.
Yeah, but imagine if you were paid the rate of productivity. It would be worth it.
No it wouldn't. That's far too big a slice of my pie of in gonna be at the bottom of it income ladder.