The Problem With Taxing the Rich

tstorm823

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Lower corporate taxes won't do shit except inflate some bank accounts.
Lower corporate taxes absolute changes the economic incentive structure and encourages businesses in different ways.

Corporate taxes aren't a tax on the rich. That tax burden is ultimately shared by every stakeholder in the corporation: ownership, employees, customers, partners, etc. Corporate tax isn't a progressive tax.

If you want to tax the rich, tax the rich. Don't attack the companies out of a misguided belief that the only people who benefit from a corporation are the shareholders.
 

Satinavian

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The idea of taxing the rich is one about redistribution and fairness.

The idea of corporate tax is the idea to take a cut whereever wealth is created, ensuring that the whole economy contributes to the taxbase.

Both are valid tools, but for different goals.
 
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tstorm823

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The idea of taxing the rich is one about redistribution and fairness.

The idea of corporate tax is the idea to take a cut whereever wealth is created, ensuring that the whole economy contributes to the taxbase.

Both are valid tools, but for different goals.
I agree with this entirely, I just have a pet peeve for people failing to recognize the middle line here. I have a moment of blind rage whenever someone suggests corporate taxes should be higher to make the rich pay their fair share, because corporate taxes place at least some burden on everyone, rich or poor, but we have a progressive income tax system already established where we can target the wealth percentiles we want to.
 

McElroy

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Leaving the entire housing market to private investors is a mistake in the first place. Capitalism doesn't work without free choice and competition to bring prices down. With housing people have both no choice not to have a roof under their head and there is no competition. Quite the opposite, investors use it to inflate their wealth. Investors that use the property market to speculate and drive up prices and lock entire areas off for lower income people to have a home should simply be disowned. It's easy to legislate property prices and minimum wages that are an adequate reflection of living costs. It's a political choice not to do it.
I dunno, dude. It seems to me that there is always a high demand for apartments in downtown big cities, and it's only fair that demand increases prices. The best-paying jobs tend to be there too. Rent controlled apartments easily become commodities themselves with extra bureaucracy on top to determine who should be living there. What to do? Just mooooooooove xD. Improving (public) transportation is a given to make the whole work, of course, but it's often neglected. Telecommuting can bring some change to this also.
 

stroopwafel

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I dunno, dude. It seems to me that there is always a high demand for apartments in downtown big cities, and it's only fair that demand increases prices. The best-paying jobs tend to be there too. Rent controlled apartments easily become commodities themselves with extra bureaucracy on top to determine who should be living there. What to do? Just mooooooooove xD. Improving (public) transportation is a given to make the whole work, of course, but it's often neglected. Telecommuting can bring some change to this also.
Supply is often kept artificially low by city officials not giving building permits because of home owner lobby groups or investors using real estate as a tax deductible deposit. None of which is in the interest of the public. Should the only people able to afford this inflated rent be people whose corporate overlord paid for the lease? And is it even desirable to push every low to mid income out of a city(ie teachers, police officers, nurses etc that can't rely on remote working)? Or have a huge homeless problem?

It's extremely dumb short-term thinking for which California is now paying the price.
 

tstorm823

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Tangentially related to this discussion, as a personal anecdote, I will say that the prices for upper middle class housing in eastern PA has gone pretty insane since people started abandoning New York City. There's still plenty of affordable houses in small-town PA, but the amount people are paying for like a 4-bedroom house with a modest yard is eye-watering.
 

McElroy

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Supply is often kept artificially low by city officials not giving building permits
Building more is the only way to satiate the demand. I'm familiar with California's housing market on a meme level only so can't really comment further.
 

meiam

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The United States could crush tax havens with sanctions or any of the other tools it deploys against socialist governments. It doesn't because people who avoid tax can also bribe.
Should it also crush Delaware with sanction? Should the EU crush Ireland with sanction? Should the UK crush some of it's oversee territory with sanction?

And then moment those place are "crushed with sanction" company will just start asking around for other place to become more tax haven and there will be plenty of place more than happy to oblige.

It's easy to crush socialism government with sanction because the socialist government can't just walk over to another country and most country aren't interested in becoming socialist. Companies can easily move and there will always be countries willing to lower they're tax a bit for some massive new income.
 

Seanchaidh

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Should it also crush Delaware with sanction? Should the EU crush Ireland with sanction? Should the UK crush some of it's oversee territory with sanction?
If they refuse to stop helping tax avoiders, yes. What they are doing is basically theft.

And then moment those place are "crushed with sanction" company will just start asking around for other place to become more tax haven and there will be plenty of place more than happy to oblige.
Even if they are then going to get crushed by sanctions and so forth? Then crush them too.
 
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Seanchaidh

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I agree with this entirely, I just have a pet peeve for people failing to recognize the middle line here. I have a moment of blind rage whenever someone suggests corporate taxes should be higher to make the rich pay their fair share, because corporate taxes place at least some burden on everyone, rich or poor, but we have a progressive income tax system already established where we can target the wealth percentiles we want to.
That's not precisely what a progressive income tax system does, or at least not what ours does. Because it doesn't actually take wealth into consideration, just certain kinds of income. It misses long-term capital gains and it's also pathetically easy to avoid capital gains tax while still growing a fortune.
 
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tstorm823

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That's not precisely what a progressive income tax system does, or at least not what ours does. Because it doesn't actually take wealth into consideration, just certain kinds of income. It misses long-term capital gains and it's also pathetically easy to avoid capital gains tax while still growing a fortune.
I would be for having capital gains being taxed the same as other income. We can do that.

You can't take wealth into account outside of measurable things like cash because wealth is an abstract concept, subject to change at any moment, and utterly meaningless until people sell things.
 

Seanchaidh

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I would be for having capital gains being taxed the same as other income. We can do that.

You can't take wealth into account outside of measurable things like cash because wealth is an abstract concept, subject to change at any moment, and utterly meaningless until people sell things.
if it were truly meaningless, among other things it couldn't be used as collateral for a loan.
 

tstorm823

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if it were truly meaningless, among other things it couldn't be used as collateral for a loan.
I mean, imagine you owned a huge stake in GameStop a couple weeks ago, and that wealth was your collateral. Not really ideal.
 

Satinavian

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The main problem with wealth tax is that it is really hard to do properly. To tax it you have to evaluate the value of all types of thing that are not actually on the market. And the owners won't really help you to get a proper extimate, instead you are basically guaranteed that they will try to misrepresent the condition or the demand.
 
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Worgen

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Whatever, just wash your hands.
Every state has a tent city? Living costs and particularly housing costs are way too high in California. I'm not saying there won't be mass concentrations of wealth in California but it will be contrasted with extreme poverty and segregation plus gang violence. It's similar as South Africa and even here it shows how general socio-economic decline will eventually drag everything down with it. There is point where poverty and violence can no longer be contained to a few tents and poor neighbourhoods. It's no surprise many of the most high profile companies see the sign on the wall.
I'm in TX and you see some pretty big tent cities down here just driving around. Tons under overpasses lately.


Leaving the entire housing market to private investors is a mistake in the first place. Capitalism doesn't work without free choice and competition to bring prices down. With housing people have both no choice not to have a roof under their head and there is no competition. Quite the opposite, investors use it to inflate their wealth. Investors that use the property market to speculate and drive up prices and lock entire areas off for lower income people to have a home should simply be disowned. It's easy to legislate property prices and minimum wages that are an adequate reflection of living costs. It's a political choice not to do it. People should never have to spent more than half their income on rent.'Taxing the rich' in itself solves nothing because the political choices will remain the same. Rather than income more fair taxation would also be on dividend and royalty ie passive income, both almost non-existent in the entire western world and both almost exclusively for the rich and famous.Tax revenue should go where it is needed most, just as the government is there to provide protection where it is needed the most. The rich don't exist at the expense of the poor, that is just a false dichotomy. Income inequality is only a problem because the government isn't taking it's responsibility in one of the areas where the free market is actually counter productive. Housing and adequate means of living are basic human rights and when society at large fails to provide this then will income inequality indeed become a destabilizing factor. It's a failure of government.
The problem with this is when would you stop letting private investors do stuff? Early on in this country there was so much land they were practically giving it away. After WW2 the dream of owning a home became reality for a huge amount of the population. Really now even housing costs aren't that bad, but only if you look at it nation wide. The big problem with housing costs is that everyone wants to live in a few cities, if you are willing to avoid the coasts then costs become less stupid. When you have such a crunch on the amount of space available then either the costs rise or you end up having to do some kinda lotto system for houses and such because of all the demand.
 

TheMysteriousGX

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Lower corporate taxes absolute changes the economic incentive structure and encourages businesses in different ways.

Corporate taxes aren't a tax on the rich. That tax burden is ultimately shared by every stakeholder in the corporation: ownership, employees, customers, partners, etc. Corporate tax isn't a progressive tax.

If you want to tax the rich, tax the rich. Don't attack the companies out of a misguided belief that the only people who benefit from a corporation are the shareholders.
Shareholders are the only beneficiaries of the excess profit that a corporate tax targets.

Gotta shut down this "and then TheMysteriousGX paid more tax than General Electric" bullshit too.
 
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stroopwafel

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The problem with this is when would you stop letting private investors do stuff? Early on in this country there was so much land they were practically giving it away. After WW2 the dream of owning a home became reality for a huge amount of the population. Really now even housing costs aren't that bad, but only if you look at it nation wide. The big problem with housing costs is that everyone wants to live in a few cities, if you are willing to avoid the coasts then costs become less stupid. When you have such a crunch on the amount of space available then either the costs rise or you end up having to do some kinda lotto system for houses and such because of all the demand.
I totally agree with that. The only problem is that unfortunately it are mostly the cities where the jobs and economic opportunities are. The one silver lining with covid is that it has shown so much can be done remotely and that it isn't needed for everyone to flock into the same space.

Oh I'll fucking beg for it.
Hey now don't make me blush! ☺