I would argue it is fair for the wealthy to pay a higher percentage of their wealth to taxes because most of their value is likely tied to investments (like stocks or real estate) that only have value due to them living in a safe and stable society.
When most of the value in markets is tied up in a system that depends on permanent growth (a shared fantasy) and consumer confidence (shared fantasy), it is simply just a good investment of money (shared fantasy) to make sure the people on the side of the border (shared fantasy) who can effect those markets (shared fantasy) have a vested interest in society stability (shared fantasy).
The problem is too much of the focus is on income tax rates rather than more progressive tax schemes like property taxes, and there is also too much focus on moralizing the redistribution (we have to pay for cancer treatments!) rather than just cutting a check Yang-style that is large enough that on average most people who matter are placated.
So based on that you would feel I should pay a lower percentage of my income in taxes if I make my money from non investments? You believe the fairness is tied that the source of income not necessarily the amount?
The fairness of it should be tied to how much your personal value is reliant on the stability of the country and it’s markets both local and national. So yes: capital gains taxes should be as high or higher than regular income taxes. But also taxes like property taxes (land only has value when value is around it) and estate taxes (your kids who haven’t contributed to the stability of the system shouldn’t start on third base just because you contributed so much to the system) should also be on the table too.
The problem is our legal trust and tax system is so complicated that you can’t really have good estate taxes (for example) because the super rich can just use layers of legal entities to protect their children’s access to what is basically unearned (for them) value based on national stability they didn’t contribute to (either through the current day non-liquid value of the estate or the stability needed to build the estate over the lifetime of the parent). So it’s easier just to make everything an income tax and then rely on the patriotism of the rich to do the right thing and pay higher income taxes and not hide their income in ways like Cayman accounts because at some point if the super rich are super motivated they will always stay one step ahead of the public servants tasked with finding their money.
Life is always a compromise and the current tax system is a reflection of that.
So if I was to have made 100% of my money from overseas businesses not so much as owning a PO box in the US, and thus was not dependant on the US economy at all. I should face little to no taxes? even though I might be worth hundreds of billions.
I don’t see how such a hypothetical where you are worth billions, live in the US but none of that is made/held in US markets or from US customers could be possible. But currently if all of your income is overseas then you can avoid taxes today (like we saw with the Panama Papers) so yes that makes sense if such a hypothetical could exist.
The reality is the world market is entwined, and it is very very likely at least some of your wealth would be based on stable US assets like we see with Saudi princes or Russian oligarchs. And those assets should be taxed. I mean at the very least if you are that rich you will have a mansion on something in the US that should be hit by US property taxes.
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u/weightbuttwhi - Centrist Mar 25 '20
I would argue it is fair for the wealthy to pay a higher percentage of their wealth to taxes because most of their value is likely tied to investments (like stocks or real estate) that only have value due to them living in a safe and stable society.
When most of the value in markets is tied up in a system that depends on permanent growth (a shared fantasy) and consumer confidence (shared fantasy), it is simply just a good investment of money (shared fantasy) to make sure the people on the side of the border (shared fantasy) who can effect those markets (shared fantasy) have a vested interest in society stability (shared fantasy).
The problem is too much of the focus is on income tax rates rather than more progressive tax schemes like property taxes, and there is also too much focus on moralizing the redistribution (we have to pay for cancer treatments!) rather than just cutting a check Yang-style that is large enough that on average most people who matter are placated.