Taxes

[Bengalzona]

(03-22-2019, 11:59 PM)TheLeonardLeap Wrote: Yes, we had a top rate of 70% for about 60 years, and not a single soul ever actually paid 70%. My scenario was if you removed all the loopholes, deductions, and the like and actually forced them to pay 70%. If you maintain all the loopholes, it wouldn't work, because people would simply find ways to not have to pay anywhere near that much in taxes, and we couldn't maintain current standards. If you look it up, there are people who did research. When the tax rate was at 70% in 1980, the top 1% only *actually* paid about 23%.

https://www.wsj.com/articles/how-wealthy-americans-like-jack-benny-avoided-paying-a-70-tax-rate-11547807401
(It's a subscribe article, but the fact that it exists at least tells you I am not just making it up, lol.)

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Also, you are in for a world of shock if you think the top 25% far exceeds the $300-400k range.

https://www.investopedia.com/personal-finance/how-much-income-puts-you-top-1-5-10/

Top 5% in 2017 had an average wage of $299,810.
To break into the top 10% in 2017, you needed to earn $118.400.
To break into the top 1%, $716,766.
To break into the top 0.1%, $2,756,865.

Now those numbers don't include capital gains and such, and is just income, but the point remains. Your scenario would involve taxing 70% on people making less than $100k/yr. That means people making $100k/yr would be only getting $30k/yr. According to the poverty line, if the $100k job was their only income, and it was a family of 5, 70% tax rate would leave them right at the poverty line ($29,420 in 2018).

Where reach people get real rich is stock worth and the like, which isn't "income". That could probably be adjusted, but you sure don't want to go 70% there, or people are going to stop investing in the economy and just hoard all of their wealth like Scrooge McDuck in a vault, rather than put it back into circulation.

Yeah. You are right about the average incomes. I was thinking weath rather than income (something I often self-righteously accuse others of...LOL!).

But certainly we can hit up that top 1%, eh. They got more money than they know what to do with. Let's get 'em!!!

[*TheLeonardLeap*]

(03-23-2019, 12:28 AM)Bengalzona Wrote: Yeah. You are right about the average incomes. I was thinking weath rather than income (something I often self-righteously accuse others of...LOL!).

But certainly we can hit up that top 1%, eh. They got more money than they know what to do with. Let's get 'em!!!

Deal, let me go change into the proper attire.

[Bengalzona]

(03-23-2019, 12:34 AM)TheLeonardLeap Wrote: Deal, let me go change into the proper attire.

Obviously, my point in the questions here is not to make serious policy proposals, which would pretty much be political poison to any politician that endorsed them.

BTW - Our household combined gross is well into six figures. Some of these things could affect me!!!!!!!

[Benton]

(03-22-2019, 11:59 PM)Bengalzona Wrote: I'm less optimistic. I don't think the wealthy do think it will end. In fact, I think the greater emphasis of the wealthy on politics during the past 40 years is an indication that this is a complete power grab and a bisection of society into a medieval two class society.

I don't think that ever ends. But I do think the rich have learned that you can fleece a populace for a while, and eventually they get tired of being hungry. Eventually the overwhelming majority will enact change through politics (New Deal, civil rights, etc.) or force (American Revolution, labor riots, etc).

[*TheLeonardLeap*]

(03-23-2019, 12:37 AM)Bengalzona Wrote: Obviously, my point in the questions here is not to make serious policy proposals, which would pretty much be political poison to any politician that endorsed them.

BTW - Our household combined gross is well into six figures. Some of these things could affect me!!!!!!!

That's actually another reason I support a single flat tax rate for everyone. The brackets don't really account for cost of living. Same reason why I am all for State-decided minimum wage (and city-decided minimum wage) but not a huge fan of increasing the federal minimum wage a ton.

I know a couple who work in DC. They are right around that 5% bracket, but the cost of living is so much higher there that it isn't anything like if they made the same amount of money in Cincinnati.

A household making $250k and living in Alexandria, VA is the same cost-of-living-wise as a household making $160k in Cincinnati. It's still healthily upper-middle class, but it's not quite as impressive sounding.

If you live in Brooklyn, NY you need to make $250k/yr to have the same cost of living adjustment as someone making $127k/yr in Cincinnati.

There's just too much variation between cost of living in this country that brackets will never really properly cover them, and then to try to fix that you are delving back into the mess of deductions and the like which brought us to where we are now. Flat rate just makes too much sense.

[fredtoast]

(03-22-2019, 07:47 PM)TheLeonardLeap Wrote: If you closed off all loopholes and such and it was a straight 70%, it would probably stop working because people would get tired of working for $1m and only coming home with $300k. Or earning $250k and only actually getting $75k. 

Meanwhile a house earning $75k get to go home with $75k.

You don't understand how tax brackets work.

Even with a 70% bracket the billionaires would pay the same tax on the first $75K as a person just making $75K.

[fredtoast]

(03-23-2019, 01:06 AM)TheLeonardLeap Wrote: There's just too much variation between cost of living in this country that brackets will never really properly cover them, and then to try to fix that you are delving back into the mess of deductions and the like which brought us to where we are now. Flat rate just makes too much sense.

Flat tax makes no sense at all.  It does nothing to take into account different costs of living and it is an extreme penalty for the poor and middle class.

[fredtoast]

(03-22-2019, 11:59 PM)Bengalzona Wrote: I'm less optimistic. I don't think the wealthy do think it will end. In fact, I think the greater emphasis of the wealthy on politics during the past 40 years is an indication that this is a complete power grab and a bisection of society into a medieval two class society.

Just look at the most recent tax revisions.  More benefits for the wealthy.

Money wins elections so the people (corporations) with the money get the breaks.

[Brownshoe]

Having a 70% tax rate on the rich is just ridiculous. I've been starting up my trucking company from nothing and I grossed over 2 million last year. The taxes as they are right now was way too much. I would have been able to buy a couple more trucks and employ more drivers for those trucks if I didnt have to pay so much in taxes. I only have 3 trucks right now, so a couple more would have increased the amount I made and would've increased how much I would have been taxed next year because I would have made even more. It's so hard for someone new to start their own shit and make it successful because of the cost of everything. You shouldn't punish someone who is working their ass off for making more money. You should promote it so more people would want to do it.

[Brownshoe]

(03-23-2019, 11:49 AM)fredtoast Wrote: Flat tax makes no sense at all.  It does nothing to take into account different costs of living and it is an extreme penalty for the poor and middle class.

Sure it takes in account of different cost of living. If a poor family spends 1k and the flat tax is 10% then they will only pay 100. If a middle class family spends 10k then they will pay 1k and if a rich family pays 100k then they will be taxed 10k. Seems more fair than any other system.