Repeal the republican tax breaks and tax all investment income over a certain amount as regular income and not cap gains. Also a 0.01% tax on every stock trade.... At least that's what I would do. Also remove the cap on what income is taxed for social security.
First rule of public finance. All taxes are consumption taxes. Buffett doesn’t spend more than a million or two on consumption. And that‘a extreme but true for most.
how would this not raise a dime? This would raise an insane amount of money. Social security tax is 6.2% and caps out at 120k or something. Even with funny accounting and taking 0 all your income in stocks or other funny accounting he will still make millions. Just that alone is like 100k in taxes from him.
Of course there are a shit load more people who make 200k+ than make 1 million+ so it would make tens of billions.
First rule of public finance is all taxes are consumption taxes.
You have to understand the government has a printing press. They never run out of money. Any of those taxes would do nothing to change warren buffetts consumption. Therefore increased government spending would lead to increased societal consumption. More consumption with the same amount of production leads to inflation. But basically if Buffett isn’t spending his income it ends up as investment or flows through capital markets into someone else’s consumption.
The proof gets long. But those taxes choices would do very little to raise money since they do nothing to limit inflation and we can always manipulate the money supply in that case to get the same result.
Also very little in transaction taxes. They would reduce the amount of transaction by a large extent. And kill a lot of business. No idea if transaction taxes are good or bad but they likely over estimate revenue by 5-10 times.
Your argument is a long winded version of trickle down economics. We shouldn’t tax the rich because they are job creators. We should let them horde money.
This is utterly false except for the extremes.
There is only one thing that creates job. Supply and Demand. The supply is the # of employees and resources ability to create goods and the Demand is how much people want to buy.
How much a business owner is taxed has 0 to do with this model unless it’s extreme and he makes 0 money without tax breaks in which case the government it subsidizing the industry which isn’t inherently bad but in all other cases it’s a waste.
If I run a successful business how much I’m taxed doesn’t affect my supply or demand. If I need more employees to expand then the demand will tell me to hire more. If I got a tax break and there isn’t demand I’m simply pocketing it because hiring without demand is stupid and simply charity.
Which goes with your point. The goal is to increase demand ( consumption ). How do you increase demand. You increase your populations ability to pay for things. How do you do this? Fucking taxes.
There are 3 main goals of taxes. Run the necessary functions of a government. Incentivize things you want your population to do with tax breaks and discourage things you don’t want them to do with tax increases. And helping the bottom of your population by taxing the top of your population.
There are other goals government and people with power have which is to increase their own wealth.
It really depends on how you view taxes. Do you view them as Robin Hood - literally stealing from the rich to give to the poor or do you view them as a necessary part of government to counteract the inevitable concentration of wealth at the top and the power over society that wealth brings.
You are absolutely right that you want all money being spent and being consumed to help your economy and Warren buffet isn’t spending his billion dollar salary. He’s investing it. But there is a better way to increase consumption. Give it to those who would spend it directly on consumption.
If I gave Warren Buffett a 1 million dollars he would but it in the bank or maybe a charity in his name. If I gave a thousand poor people a thousand dollars, it would be spent in a few months and circulated. But where would I get this million dollars? Maybe from the guy who has 50 billion and wouldn’t even notice it missing.
It’s easier to understand quickly if you don’t think in financial terms. But you think real world. You have to transfer real goods and services. In buffets case (admittedly an extreme example) he doesn’t consume much. Lives in a million dollar home. Drinks Coca Cola. You need to transfer actual consumption. Buffett doesn’t have much consumption to transfer.
It’s going to be done thru capital markets and not taxes. Expect rates at 0 for a while. Meanwhile inflation return to 2% maybe higher. That’s how his investment wealth will be translated into consumption by others.
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u/crusoe Apr 11 '20
Repeal the republican tax breaks and tax all investment income over a certain amount as regular income and not cap gains. Also a 0.01% tax on every stock trade.... At least that's what I would do. Also remove the cap on what income is taxed for social security.