Tax Rate for the Rich: Difference between revisions
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But 61% of the people think the rich don't pay a fair share. [https://www.pewresearch.org/short-reads/2023/04/07/top-tax-frustrations-for-americans-the-feeling-that-some-corporations-wealthy-people-dont-pay-fair-share/]. | But 61% of the people think the rich don't pay a fair share. [https://www.pewresearch.org/short-reads/2023/04/07/top-tax-frustrations-for-americans-the-feeling-that-some-corporations-wealthy-people-dont-pay-fair-share/]. | ||
=Key Points= | |||
*{{check}}Tax system has transitioned from an income tax system to a wage tax system through the 'buy-borrow-die' scheme. [https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3242314] | |||
*Thus, as suggested above, Income Tax Brackets mean little due to loopholes at the top. | |||
==Notes== | |||
*COVID transfered $1.2T to the wealthy [https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax] | |||
*The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code. | |||
*{{check}}Proposal by Edward McCaffery - A progressive spending tax is a practical, well supported idea that I have explored at great lengthelsewhere. | |||
*Reagan slashed tax shelters, meant to hide income tax, but retained the 'buy borrow die' that was available to the wealthy all the time. p29 | |||
*when Warren Buffett revealed that he had just under $40 million ($40,000,000) in taxable income for the calendar year 2010,108 he did not reveal, and his tax forms did not have to reveal, that he also had over $8 billion ($8,000,000,000) in unrealized appreciation that year from his shares of Berkshire-Hathaway stock alone.109 This basic analytic fact, true for over a century, helps to provide one of the optical illusions hiding the rather flat universal wage tax. | |||
*fatal problem with Democratic or liberal tax policy in the post War era: because taxes fall primarily on wages, redistribution, if any, has to occur from more highly paid to lower paid workers or the non-working poor. The middle class is pitted against the lower class while the upper class sits on the sidelines. This is not a recipe for social stability. p8 [file:///home/marcin/Desktop/ssrn-3242314%20(1).pdf] | |||
*NB - capital in the form of autonomous productive systems at the community scale can leapfrog the wage tax pickle | |||
*Corporate tax is only 10%, majority is payroll and income. p13. [file:///home/marcin/Desktop/ssrn-3242314%20(1).pdf] | |||
=Deriving Solutions= | =Deriving Solutions= | ||
*First, is there a problem? Some say yes, some say no. The top 1% pay 25% of all income tax. [https://www.pgpf.org/article/how-do-we-tax-the-top-1-and-what-that-means-for-the-federal-budget/]. | *First, is there a problem? Some say yes, some say no. The top 1% pay 25% of all income tax. [https://www.pgpf.org/article/how-do-we-tax-the-top-1-and-what-that-means-for-the-federal-budget/]. Top 1% own 30% of wealth. So the taxation amount seems to be fair? However, the super-rich pay much lower rates. Now the top 0.1% owns $20T, or about 14% of all wealth (and of course the skew is higher the richer we go) | ||
*Flat rate across the board could be fair. Devil's in the details. So we can start with a ridiculous low rate such as 10%, or lowest bracket in the US system. This way, the US tax system is perfectly fair - but only up to $11k. People say a 'flat rate is regressive'. [https://www.google.com/search?sxsrf=ALeKk026QG9BbsZl0rNsBS9KmerMgczY_w%3A1602863734253&source=hp&ei=dsKJX6q8DJDYsAXHkpG4Cw&q=is+a+flat+tax+rate+fair+for+the+world&btnK=Google+Search&oq=how+to+configure+nvidia+geforce+gtx+1650+super+on+linux+mint&gs_lcp=CgZwc3ktYWIQAzIFCCEQoAEyBQghEKsCMgUIIRCrAjoOCAAQ6gIQtAIQmgEQ5QI6DgguELEDEMcBEKMCEJMCOggILhDHARCvAToLCC4QsQMQxwEQowI6CAgAELEDEIMBOggILhCxAxCDAToFCAAQsQM6AggAOgQIABAKOgYIABAWEB46CAghEBYQHRAeOgcIIRAKEKABUMsQWOmzAWD8tAFoBnAAeACAAeQGiAGhS5IBDTExLjQ3LjMuMi42LTGYAQCgAQGqAQdnd3Mtd2l6sAEG&sclient=psy-ab&ved=0ahUKEwiqz4DcvLnsAhUQLKwKHUdJBLcQ4dUDCAk&uact=5] Not if we start the bottom bracket at the minimum level - or even no taxes up to a certain level - and continue the 10% to higher brackets up to huge incomes - but without loopholes and writeoffs. You simply pay tax on your net. | *Flat rate across the board could be fair. Devil's in the details. So we can start with a ridiculous low rate such as 10%, or lowest bracket in the US system. This way, the US tax system is perfectly fair - but only up to $11k. People say a 'flat rate is regressive'. [https://www.google.com/search?sxsrf=ALeKk026QG9BbsZl0rNsBS9KmerMgczY_w%3A1602863734253&source=hp&ei=dsKJX6q8DJDYsAXHkpG4Cw&q=is+a+flat+tax+rate+fair+for+the+world&btnK=Google+Search&oq=how+to+configure+nvidia+geforce+gtx+1650+super+on+linux+mint&gs_lcp=CgZwc3ktYWIQAzIFCCEQoAEyBQghEKsCMgUIIRCrAjoOCAAQ6gIQtAIQmgEQ5QI6DgguELEDEMcBEKMCEJMCOggILhDHARCvAToLCC4QsQMQxwEQowI6CAgAELEDEIMBOggILhCxAxCDAToFCAAQsQM6AggAOgQIABAKOgYIABAWEB46CAghEBYQHRAeOgcIIRAKEKABUMsQWOmzAWD8tAFoBnAAeACAAeQGiAGhS5IBDTExLjQ3LjMuMi42LTGYAQCgAQGqAQdnd3Mtd2l6sAEG&sclient=psy-ab&ved=0ahUKEwiqz4DcvLnsAhUQLKwKHUdJBLcQ4dUDCAk&uact=5] Not if we start the bottom bracket at the minimum level - or even no taxes up to a certain level - and continue the 10% to higher brackets up to huge incomes - but without loopholes and writeoffs. You simply pay tax on your net. | ||
Latest revision as of 08:21, 13 January 2025
Income tax brackets for the USA in general: this tells us little, because the super-rich do not pay the 37%. [1]
Who pays? Not these guys:
The top wealth Americans pay betweeon 0.1% and 3% tax rate on income. Their growth in wealth is 10x of their income. [2]
Why do average americans support lower taxes for the rich? Because they think the rich deserve it [3]: 'we find strong support for fairness-based explanations'. Fairness-based explanations are this [4].
But 61% of the people think the rich don't pay a fair share. [5].
Key Points
Tax system has transitioned from an income tax system to a wage tax system through the 'buy-borrow-die' scheme. [6]- Thus, as suggested above, Income Tax Brackets mean little due to loopholes at the top.
Notes
- COVID transfered $1.2T to the wealthy [7]
- The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code.
- Proposal by Edward McCaffery - A progressive spending tax is a practical, well supported idea that I have explored at great lengthelsewhere.
- Reagan slashed tax shelters, meant to hide income tax, but retained the 'buy borrow die' that was available to the wealthy all the time. p29
- when Warren Buffett revealed that he had just under $40 million ($40,000,000) in taxable income for the calendar year 2010,108 he did not reveal, and his tax forms did not have to reveal, that he also had over $8 billion ($8,000,000,000) in unrealized appreciation that year from his shares of Berkshire-Hathaway stock alone.109 This basic analytic fact, true for over a century, helps to provide one of the optical illusions hiding the rather flat universal wage tax.
- fatal problem with Democratic or liberal tax policy in the post War era: because taxes fall primarily on wages, redistribution, if any, has to occur from more highly paid to lower paid workers or the non-working poor. The middle class is pitted against the lower class while the upper class sits on the sidelines. This is not a recipe for social stability. p8 [file:///home/marcin/Desktop/ssrn-3242314%20(1).pdf]
- NB - capital in the form of autonomous productive systems at the community scale can leapfrog the wage tax pickle
- Corporate tax is only 10%, majority is payroll and income. p13. [file:///home/marcin/Desktop/ssrn-3242314%20(1).pdf]
Deriving Solutions
- First, is there a problem? Some say yes, some say no. The top 1% pay 25% of all income tax. [8]. Top 1% own 30% of wealth. So the taxation amount seems to be fair? However, the super-rich pay much lower rates. Now the top 0.1% owns $20T, or about 14% of all wealth (and of course the skew is higher the richer we go)
- Flat rate across the board could be fair. Devil's in the details. So we can start with a ridiculous low rate such as 10%, or lowest bracket in the US system. This way, the US tax system is perfectly fair - but only up to $11k. People say a 'flat rate is regressive'. [9] Not if we start the bottom bracket at the minimum level - or even no taxes up to a certain level - and continue the 10% to higher brackets up to huge incomes - but without loopholes and writeoffs. You simply pay tax on your net.