The Tax Thread

rolltide_21

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Well, Trump bragged he didn’t pay any in 2017; does that help?


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True, but I would like to see what honest people in that tax bracket actually pay. Well, you know, if these people actually exist [emoji3].


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twofbyc

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I’ll say this; there isn’t a single “wealthy” person in this country that pays the standard rate for their bracket (before they start taking deductions), and what they actually end up paying is much less. Much less.


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CharminTide

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After doing some thinking on this while driving today, I would be in favor of a more progressive tax plan. Like someone said earlier, it would get us back to what income tax started out to be. I would also add that I would like to see some breaks for the middle class if we raise the amount on the most wealthy. Regarding the percentage for the most wealthy, I'm not sure what the percentage should be. I would ask a few follow up questions, how large of a percentage do they actually pay on average right now? How much is adjusted for write offs, credits, etc? How much would raising the percentage change how much they pay? I would expect the adjusted percentage to be substantial, but Ive not researched it to find out so I could be wrong.
Hard to answer. I was able to locate this data from the CTJ. The federal taxes column gives you an idea of effective rates for the listed percentiles. Basically 25% for millionaires versus 20% and 16% for those making 81k and 48k, respectively.

Not a perfect resource, but better than nothing. LINK

 

rolltide_21

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Hard to answer. I was able to locate this data from the CTJ. The federal taxes column gives you an idea of effective rates for the listed percentiles. Basically 25% for millionaires versus 20% and 16% for those making 81k and 48k, respectively.

Not a perfect resource, but better than nothing. LINK

Thanks for posting, wasn’t in a position to research it.


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crimsonaudio

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Seems like we'd save a lot of money if there were an agency that reviewed itemized expenses from previous years, accounted for use and excess, and then audited the itemized budget proposal for the following year. Enact some form of punishment for over- or under-budgeting beyond a certain threshold and allow these auditors to request justification for unusual purchases, especially in Q4. A lot of work, but this kind of thing seems like a necessary step. Bet it would more than pay for itself.
Great idea here.

We need people like you in politics. Time for you to do your civic service! :)
 

92tide

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True, but I would like to see what honest people in that tax bracket actually pay. Well, you know, if these people actually exist [emoji3].


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i would guess that his tax dodges are mostly legal. it's the source of his income that is where the dis-honesty is.
 

crimsonaudio

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Great idea here.

We need people like you in politics. Time for you to do your civic service! :)
Just wanted to make the point that I'm not kidding. I don't necessarily agree with everything Charmin believes, but he's obviously a very intelligent, compassionate person who really wants what's best for people. We need people like him in office, as opposed to just about everyone in DC.
 

CharminTide

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Intriguing. This is something new from her.

Elizabeth Warren's wealth tax proposal is constitutional, experts say — and necessary

Sen. Elizabeth Warren (D-Mass.), a newly declared presidential candidate, has turbocharged the progressive attack on income inequality with a proposal for a “wealth tax” aimed at Americans with net worth of more than $50 million.

Warren herself hasn’t issued many details of her plan. But according to UC Berkeley economists Emmanuel Saez and Gabriel Zucman, who advised her on the proposal, the tax would be 2% on net worth above $50 million and another 1% on net worth above $1 billion. They say it would affect about 75,000 U.S. households, or less than 0.1% of the total, and raise $2.75 trillion over 10 years. That’s about 0.1% of gross domestic product per year.
 

crimsonaudio

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$275 billion annually (on average) seems like a drop in the proverbial bucket.

And I don't want honestly to hear anything about raising more money until it's attached with fiscally responsible cuts in overall spending.
 

Tidewater

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The highest margin tax rate in United States history was 100% (on incomes over $25,000/year).

FDR's Executive Order 9250, October 03, 1942

FDR said:
no salary shall be authorized under Title III, Section 4, to the extent that it exceeds $25,000 after the payment of taxes allocable to the sum in excess of $25,000.
I love pointing out that historical tidbit. I did not believe it when I first heard it, but, bigger'n Dallas, there it is.
 

Tidewater

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I am not opposed in principle (although I think it would cause massive international capital flight), but it is only constitutional insofar as we already ignore the provisions of the Constitution as it is.

Honestly interpreted, it most certainly is unconstitutional.
"Direct Taxes shall be apportioned among the several States which may be included within this Union." Taxes can be raised on incomes (not wealth)

The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration.
or they must be apportioned among the states in accordance with the Federal ratio ("the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.") A tax on wealth has to be apportioned among the states by the federal ratio.
 
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uafanataum

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I am not opposed in principle (although I think it would cause massive international capital flight), but it is only constitutional insofar as we already ignore the provisions of the Constitution as it is.

Honestly interpreted, it most certainly is unconstitutional.
"Direct Taxes shall be apportioned among the several States which may be included within this Union." Taxes can be raised on incomes (not wealth)



or they must be apportioned among the states in accordance with the Federal ratio ("the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.") A tax on wealth has to be apportioned among the states by the federal ratio.
By that logic property tax is unconstitutional because it is certainly a form of wealth.
 

Tidewater

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By that logic property tax is unconstitutional because it is certainly a form of wealth.
A state property tax is completely constitutional because states can do whatever they want, other than those powers that the people of that state denied the state in ratifying the federal constitution (Art. I, Section 10) or in their respective state constitutions.
 

CharminTide

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I am not opposed in principle (although I think it would cause massive international capital flight), but it is only constitutional insofar as we already ignore the provisions of the Constitution as it is.

Honestly interpreted, it most certainly is unconstitutional.
"Direct Taxes shall be apportioned among the several States which may be included within this Union." Taxes can be raised on incomes (not wealth)

or they must be apportioned among the states in accordance with the Federal ratio ("the whole Number of free Persons, including those bound to Service for a Term of Years, and excluding Indians not taxed, three fifths of all other Persons.") A tax on wealth has to be apportioned among the states by the federal ratio.
A state property tax is completely constitutional because states can do whatever they want, other than those powers that the people of that state denied the state in ratifying the federal constitution (Art. I, Section 10) or in their respective state constitutions.
I tend to agree. Even if this is ultimately deemed constitutional, it will take years in the courts that could span beyond one presidential term.

Unfortunately, the alternatives listed in the article (such as higher capital gains taxes) are much more of a blunt instrument than the scalpel Warren is proposing here. I do think the idea of taxing net wealth and strengthening the estate/gift tax are good methods of combating the generational entrenchment of wealth and worsening of overall wealth disparity, but this specific proposal seems fraught with legal issues that may not make it a practical war to wage.

Still, it may be worth a try. She shouldn't make this specific proposal the central plank in her platform given its legal tenuousness, but it doesn't seem like she is.
 

Tidewater

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I tend to agree. Even if this is ultimately deemed constitutional, it will take years in the courts that could span beyond one presidential term.

Unfortunately, the alternatives listed in the article (such as higher capital gains taxes) are much more of a blunt instrument than the scalpel Warren is proposing here. I do think the idea of taxing net wealth and strengthening the estate/gift tax are good methods of combating the generational entrenchment of wealth and worsening of overall wealth disparity, but this specific proposal seems fraught with legal issues that may not make it a practical war to wage.
The late Roman Republic had enormous wealth inequality issues. They tried anti-sumptuary laws. Then the Gracchi brothers suggested land redistribution, so the Optimates murdered them.

An empire is corrosive in a republic.
 
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Tidewater

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You propose a bold solution, good sir.
The Roman Republic collapsed for a number of ad hoc reasons, but one of them was a lack of respect for the provisions of the Constitution. It was illegal to even lay hands on person of the Tribune of Plebs (and all plebs were sworn to avenge anyone who violated that), but Optimates murdered the Gracchi, in both cases when they were in the office of Tribune. Another reason I am in favor of the most stringent compliance with the provisions of our Constitution. It is not perfect, but it's compromises do have the peoples' stamp of approval.

On the other hand, a republic requires independent yeomen for stability, Roman yeomen would fight when the state needed them to, and then go back to farming once the war was won. The late republic saw more and more wars, and more and more yeoman farmers losing their lands, and wealthy generals increasing hiring their soldiers, so soldiers came to have more allegiance to the wealthy generals than to the republic itself. The Gracchian reforms, had they been adopted, might have slowed the process of decay of the republic.
 

TIDE-HSV

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I tend to agree. Even if this is ultimately deemed constitutional, it will take years in the courts that could span beyond one presidential term.

Unfortunately, the alternatives listed in the article (such as higher capital gains taxes) are much more of a blunt instrument than the scalpel Warren is proposing here. I do think the idea of taxing net wealth and strengthening the estate/gift tax are good methods of combating the generational entrenchment of wealth and worsening of overall wealth disparity, but this specific proposal seems fraught with legal issues that may not make it a practical war to wage.

Still, it may be worth a try. She shouldn't make this specific proposal the central plank in her platform given its legal tenuousness, but it doesn't seem like she is.
I suppose everyone who's been here more than a few days knows that I have a master's of law in taxation from NYU. When I started practicing in 1963, the amount of property exempt from estate taxation was $600K and the personal income tax exemption was $600. Adjusted for inflation, that $600K would equate to right at 5 million today. Until last year, that's approximately was the unified credit was. Of course, a married couple always got to add theirs together. Last year, the credit was increased by approximately double to $11.2 million per person. (22 million for a couple.)

When I started to practice, I'd say that there was a general majority opinion that concentration of wealth was bad, per se. I think it came out of the abuses of the late 19th century and was bolstered by the Great Depression. Over a period of time, the public, a majority I think, has been sold on the proposition that accumulation of wealth is a good thing. The sources of the propaganda range all the way from the super-rich, who don't want to turn loose of what they have, to the preachers of the "prosperity gospel" on the right. Of course, for the great majority, this conviction is contra self-interest, but it's been bought, lock, stock and barrel. Naming the estate tax a "death tax" was a stroke of genius.

All this said, my observation over a period of decades, is that sentiment for taxing wealth concentration has declined sharply and I don't think the general opinion supports Warren's idea...
 

Tidewater

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All this said, my observation over a period of decades, is that sentiment for taxing wealth concentration has declined sharply and I don't think the general opinion supports Warren's idea...
I'm not so sure. I think it will be a tough slog in the federal courts (of course, the Constitution of the United States means whatever a federal judge wants it to mean, so who knows?), but if you were to confront the average citizen with the proposition, I'd bet a lot would support it.
There is a qualitative difference between someone with $100k/year in income with $500k in assets (including one's house) and someone earning $10 million dollars/year in income and $50 million in assets. Those are two different beasts.

The problem with Warren's policy would be capital flight. Rich people would not stand pat and be shorn like sheep. They would invest in London real estate (that's what Russian oligarchs do to protect their money) or find some other overseas asset in which to invest. If the CBO bases their analysis on the wealthy holding their money within reach if the U.S. tax collector, then that analysis is fundamentally flawed. Money would fly out of the U.S. until the cost of leaving and the risk premiums balanced.
 

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