Democratic Primaries
Related: About this forumWarren's wealth tax would solve economic inequality, says economist Gabriel Zucman
Taxing the rich to help the poor and middle class has defined the presidential campaigns of Senators Elizabeth Warren and Bernie Sanders.
Skeptics of the proposal argue that a wealth tax of this magnitude is impractical, and will not generate the revenue that Senator Warren and supporters anticipate. But French economist Gabriel Zucman, an early proponent of the tax, argues otherwise.
Zucman, now author of the book The Triumph of Injustice: How the Rich Dodge Taxes and How to Make Them Pay, joined The Final Round on Friday to discuss the profound effect the tax system has on American economic inequality, and how a wealth tax could change that.
The tax system is critically important to eradicating economic inequality
On Monday, Senator Elizabeth Warren unveiled an education plan that would dramatically increase federal funding for public schools over the next decade, siphoning money raised from her proposed wealth tax to cover the plans $450 billion cost. It is one of many proposals developed by the Massachusetts senator that depend almost wholly upon the success of her controversial wealth tax, which would impose a 2% annual tax on household net worth between $50 million and $1 billion.
Zucman said he believes such a tax could also be a solution to economic inequality exacerbated by the current U.S. tax system.
Financial deregulation; the collapse of the minimum wage; higher college costs; the declining role of unions. All of these things have mattered a lot [to American economic inequality], Zucman said. But, when you try to look at the income and the wealth of the very rich, the tax system is critically important.
https://finance.yahoo.com/news/warrens-wealth-tax-would-solve-economic-inequality-says-economist-gabriel-zucman-154526411.html
primary today, I would vote for: Joe Biden
Turin_C3PO
(13,649 posts)But, unfortunately, I think our RW Supreme Court would rule it unconstitutional.
primary today, I would vote for: Joe Biden
bluewater
(5,376 posts)Joking. Mostly.
primary today, I would vote for: Joe Biden
oldsoftie
(12,410 posts)The biggest being that during the years when the tax rates WERE so much higher, hardly anyone paid those rates. There were so many more deductions back in those days, and the highest rates were also reserved for only a handful of taxpayers.
Another flaw is the statement that "the rest of the population pays 25-30% of their income in taxes". 1/2 of the working population pay NO income taxes. Sure, they pay property tax & maybe state tax, but no INCOME tax.
And without a VAT tax, trillions of dollars in income avoids taxes altogether.
But no one wants to talk about what actually works, just about what feels good. There arent enough rich people to raise the money needed. Period.
primary today, I would vote for: Joe Biden
bluewater
(5,376 posts)primary today, I would vote for: Joe Biden
oldsoftie
(12,410 posts)And the SS cap should be raised a LOT or done away with completely.
And those who avoid income taxes also easily avoid SS taxes.
primary today, I would vote for: Joe Biden
bluewater
(5,376 posts)Yes, we realize poorer people (~50% of the workforce) don't pay much if any Federal income tax, but that doesn't make this statement untrue.
Walk me thru your point again please, I am a little unclear what you are getting at.
Is it "there aren't enough rich people to raise the money . Period." ?
A Wealth Tax is not an income tax, it's a tax on the accumulated assets a person has.
Currently there is a vast and growing wealth disparity in the USA:
Thanks.
primary today, I would vote for: Joe Biden
oldsoftie
(12,410 posts)No realistic tax plan targeting only the super rich will raise NEARLY enough money to pay for all the programs most people desire. There simply arent enough people that fall into that category. And that doesnt even factor in how much income or assets would simply vanish under wealth taxes. very easy to start dropping your net worth if you know whats coming.
Anyone who files taxes under "stated income"; money not covered by a W2 or 1099, can also EASILY avoid paying SS & income taxes. You merely dont admit how much you really made. I know dozens of people who do it every year. And think of how many jobs & professions earn income that is not covered by either a W2 or 1099. And this doesnt even factor in criminal money. A VAT tax captures ALL that money and makes the rich pay much more in taxes. They spend a lot of money keeping up that lifestyle.
Yes, a VAT would tax the poor. It taxes the poor in all the countries that have it and also have the programs, like health care, that we want. But you could also alleviate that with a monthly check to cover poverty wages.
You cannot double the national budget by solely taxing the rich. And anyone who looks at the numbers HONESTLY has to admit it
primary today, I would vote for: Joe Biden
bluewater
(5,376 posts)Warren is currently putting the details on her plan to fund Medicare for All, which would be possibly the major expense and addition to the federal budget.
A key part of that plan is to tax corporations for the current amount they are paying towards employee healthcare.
That alone would cover a huge part of the costs for MfA. THAT is an easy amount of money to account for since those corporations report it as a deduction on their taxes, there's no hiding it.
And, I might have to run soon, so let me say thanks for an interesting discussion.
primary today, I would vote for: Joe Biden
oldsoftie
(12,410 posts)Usually i just get yelled at.
primary today, I would vote for: Joe Biden
oldsoftie
(12,410 posts)You may get 2-300 billion. Nowhere near the 3-4 trillion everything desired costs.
EVERYONE has to pay more. Thats all there is to it
primary today, I would vote for: Joe Biden
bluewater
(5,376 posts)I am not making any claims about what a wealth tax of 2% on wealth over $50 million would bring in, but you named a number.
Could you show me how you calculated that?
And no rush, I am not trying to put you on the spot. I am just curious.
Thanks and have a nice evening!
primary today, I would vote for: Joe Biden
oldsoftie
(12,410 posts)If you taxed the ENTIRE 31T, you'd get around 5-600 billion. Not accounting for any creative planning by the super rich that would drop them below that 50M line.
primary today, I would vote for: Joe Biden
bluewater
(5,376 posts)I have no idea how many people have how much wealth over $50 million. If that wealth from that graph is concentrated in a few hands, the revenue would be much greater than if many more people had wealth over the $50 million.
Interesting data to keep an eye out for.
Thanks again for the Discussion and good night.
primary today, I would vote for: Joe Biden
Turbineguy
(37,206 posts)now we invest in starving billionaires.
Tax law is social and technological engineering. Right now it's geared to favor predators.
Never the less, there's still plenty to loot. The retirements of the upper-middle class and the social security trust fund are ripe for harvesting (as Romney called it).
primary today, I would vote for: Joe Biden
dsc
(52,129 posts)Look I think a wealth tax is a good idea and would be helpful overall but by no means would that relatively small tax solve inequality. They would still be paying less on their wealth than the majority of home owning lower middle and middle income people.
primary today, I would vote for: Joe Biden
Thekaspervote
(32,605 posts)Of becoming law and doing some good
primary today, I would vote for: Joe Biden
WobblyDem
(16 posts)It'd certainly help. A lot of why wealth taxes have struggled elsewhere in the world is because of tax loopholes either originating in the US, or in territories we have a pretty strong say in. America joining in to combat this eyewatering inequality would potentially do a lot to combat corruption here AND in countries without the benefit of the international spotlight. When people don't have billions to throw towards warping politics to retaining those billions...that they don't have to start with
Considering taxes average 40% all the way up to the first m/b(?)illion, where it nearly halves, this is hugely necessary.
Inequality is so dizzying and oligarchs so obviously dictating American politics that I really think we need a wealth tax closer to Bernie's plan:
32M-50M: 1%
50M-250M: 2% (Warren's starting here)
250M-500M: 3%
500M-1B: 4%
1B-2.5B: 5% (Warren's is 3% from here)
2.5B-5B 6%
5B-10B: 7%
10B+: 8%
BUT I'm absolutely over the moon that two people are even approaching this. It's about time we stopped letting billionaires pay for policy!
primary today, I would vote for: Undecided