We Need a Wealth Tax

[Hugo Stiglitz 23356]

[Hugo Stiglitz 23356]

 

[Hugo Stiglitz 23356]

 

[Guest]

The IRS is part of the Department of Justice?>?

 

Who fucking knew?  Punish those citizens!!!  Correct their behavior!!!

Edited March 2, 2021 by slorch

[Guest Lobo]

A 'Wealth Tax' (which is just an absurd name, it's a living estate tax)...would be incredibly punitive and regressive towards wealthy people of color whose families didn't get to benefit from multiple generations of no estate/death taxes back in the day.  Their newfound wealth would be confiscated and prohibitive of their ability to establish multi-generational wealth amongst their communities of color.  

the Wealth Tax is one of the most racist things progressives have ever come up with.  

[BradInATX 9208]

12 minutes ago, slorch said:

The IRS is part of the Department of Justice?>?

 

Who fucking knew?  Punish those citizens!!!  Correct their behavior!!!

 

The fact that a large portion of our country thinks that taxing multi-billionaires very tiny little fractions of their wealth is "punitive" is a testament to how the rich have gaslighted about 30% of the country into carrying water for them. 

I don't blame or resent you for falling for it. If they weren't good at exploiting people, they wouldn't be billionaires.

Edited March 2, 2021 by BradInATX

[Bone3421 716]

A 'Wealth Tax' (which is just an absurd name, it's a living estate tax)...would be incredibly punitive and regressive towards wealthy people of color whose families didn't get to benefit from multiple generations of no estate/death taxes back in the day.  Their newfound wealth would be confiscated and prohibitive of their ability to establish multi-generational wealth amongst their communities of color.  
the Wealth Tax is one of the most racist things progressives have ever come up with.  

Would it be less racist if we went back to the old top income bracket of 91% in the 50/60's. Dont think race has anything to do with a wealth tax fyi...I'll have to catch up and see what is all inside the bill but I believe we are talking about the bezos,buffett,gates and musk of the world

[Guest Lobo]

It would tax anyone with a living estate over $50mm.  That includes a lot of people of color.  Part of the reason white families have been able to pass along such massive sums of money from one generation to another is because for a huge chunk of American history, the death tax was either non-existent or de minimus.  Now that families of color are getting to accrue some real wealth, it would be a shame to halt that perpetual growth but taking a huge chunk of it.  It sounds like this tax is going after people worth in the tens of billions, but it would royally fuck over families of color with $50mm+ in assets for generations.  I work with family offices every single day, many of them minorities, this would fuck them over way more than it would their rich, white contemporaries.  Nevermind, I don't think you get the point.

[George 487]

So...what’s the number then?  At what point do people stop being poor so you can raise their taxes?

[gmr548 16463]

26 minutes ago, Lobo said:

A 'Wealth Tax' (which is just an absurd name, it's a living estate tax)...would be incredibly punitive and regressive towards wealthy people of color whose families didn't get to benefit from multiple generations of no estate/death taxes back in the day.  Their newfound wealth would be confiscated and prohibitive of their ability to establish multi-generational wealth amongst their communities of color.  

the Wealth Tax is one of the most racist things progressives have ever come up with.  

This just reminds me about the Chappelle bit about sticking around for the tax break when Trump won.

[DalTxHornFan 3084]

The compliance and enforcement aspects of this ill-conceived plan (were it to ever become law) would be a bonanza for accountants, lawyers, and business valuation professionals.  Do it!

 

[Bone3421 716]

It would tax anyone with a living estate over $50mm.  That includes a lot of people of color.  Part of the reason white families have been able to pass along such massive sums of money from one generation to another is because for a huge chunk of American history, the death tax was either non-existent or de minimus.  Now that families of color are getting to accrue some real wealth, it would be a shame to halt that perpetual growth but taking a huge chunk of it.  It sounds like this tax is going after people worth in the tens of billions, but it would royally fuck over families of color with $50mm+ in assets for generations.  I work with family offices every single day, many of them minorities, this would fuck them over way more than it would their rich, white contemporaries.  Nevermind, I don't think you get the point.

I get it...I just dont think its correct.

Like I said we use to tax the top bracket 91% ...80%...70% and now it's what down to 38% or so

So it would still tax whoever made it no matter skin color. Now we can agree that things are bad and were very bad for people of color and that definitely didnt let most accrue wealth. Wealth is wealth and taxes are taxes; race doesnt enter into wealth tax 2021. It should be viewed by class and there are a lot of poor people of all colors.

[Bone3421 716]

So...what’s the number then?  At what point do people stop being poor so you can raise their taxes?

30k???

[Guest Lobo]

Take a white family in 1865 with $10mm in assets.  They don't get taxed on at events of death on it at all for 50 years, and then the 50 years after that...it's taxed (due to exemptions and step-up in basis), very minimally.  In the 1970's, the estate tax becomes more egregious.  But all the while that original nest egg for that white family is growing exponentially.  And very little of it is going to the IRS.  

Black or Hispanic family in 1965 with $10mm in assets.  Every single time the estate tax is triggered, nearly half of it goes away.  It's impossible for them to catch up because the white family had a head start for almost 100 years with no taxes at death.  

Living estate tax will yield similar results.  The families of color will be eviscerated of a larger proportion of their wealth because they failed to get the decades-long head start.  I'm talking about true multi-generational wealth, not dot.com billionaires.  

There's a great AEI paper on it, I'm not explaining it well.  I'll post it here when I find it.  The living estate tax will be condemned to the same regressive fate as the death tax.  

[Incredulity 11532]

5 minutes ago, Bone3421 said:

I get it...I just dont think its correct.

Like I said we use to tax the top bracket 91% ...80%...70% and now it's what down to 38% or so

So it would still tax whoever made it no matter skin color. Now we can agree that things are bad and were very bad for people of color and let definitely didnt let most accrue wealth. Wealth is wealth and taxes are taxes; race doesnt enter into wealth tax 2021. It should be viewed by class and there are a lot of poor people of all colors.

The effective tax rates for top earners during that period was essentially the same as it is today.  No one paid 90% income tax rates.

[Incredulity 11532]

52 minutes ago, BradInATX said:

 

The fact that a large portion of our country thinks that taxing multi-billionaires very tiny little fractions of their wealth is "punitive" is a testament to how the rich have gaslighted about 30% of the country into carrying water for them. 

I don't blame or resent you for falling for it. If they weren't good at exploiting people, they wouldn't be billionaires.

50 million is a long way from multi-billions.

[workswithseed 2033]

5 minutes ago, Bone3421 said:

23 minutes ago, George said:

So...what’s the number then?  At what point do people stop being poor so you can raise their taxes?

30k???

If the minimum wage was $15 an hour with only federal income tax, they would only be left with $27,456 since they would go up to 12% tax bracket. That's not counting SS, and Other wage garnishments.

[Bone3421 716]

The effective tax rates for top earners during that period was essentially the same as it is today.  No one paid 90% income tax rates.

Yeah we just had a made up tax bracket for the older days....sure there was probably some ways around it but it was there for the wealthy.

[Bone3421 716]

Take a white family in 1865 with $10mm in assets.  They don't get taxed on at events of death on it at all for 50 years, and then the 50 years after that...it's taxed (due to exemptions and step-up in basis), very minimally.  In the 1970's, the estate tax becomes more egregious.  But all the while that original nest egg for that white family is growing exponentially.  And very little of it is going to the IRS.  
Black or Hispanic family in 1965 with $10mm in assets.  Every single time the estate tax is triggered, nearly half of it goes away.  It's impossible for them to catch up because the white family had a head start for almost 100 years with no taxes at death.  
Living estate tax will yield similar results.  The families of color will be eviscerated of a larger proportion of their wealth because they failed to get the decades-long head start.  I'm talking about true multi-generational wealth, not dot.com billionaires.  
There's a great AEI paper on it, I'm not explaining it well.  I'll post it here when I find it.  The living estate tax will be condemned to the same regressive fate as the death tax.  

I agree with the premise about the head start not arguing against that at all. My personal opinion is I just dont think it makes much difference for this particular idea.

[Guest Lobo]

It will when you consider than all families of color that have accrued $50mm+ in assets, 80% of them have done so in the last generation in this country.  Now we're going to start confiscating a chunk of that because there's too many wealthy white billionaires?  Seems like a round-a-bout approach is all.  

[DalTxHornFan 3084]

And what's so sacrosanct about $50MM?  Why not start the tax at $5MM or $10MM?  Those folks are way richer than most people.  They can probably afford to pay more, amirite?

 

Edited March 2, 2021 by DalTxHornFan

[Bone3421 716]

If the minimum wage was $15 an hour with only federal income tax, they would only be left with $27,456 since they would go up to 12% tax bracket. That's not counting SS, and Other wage garnishments.

Cant tell if your agreeing or not that 30k is the poor cut off lol....assuming agree

Let's go even farther and subtract just for easy round numbers 1500 a year for electric...1000 for water, 10400(200$a week) for food and 18000(avg rent is just under 1500)

So all that 30,900$ just by avg.

[Biff Tannen 45477]

I had no idea we were a country flush with multi-millionaire families of all colors. My family must just suck. 

[Bone3421 716]

It will when you consider than all families of color that have accrued $50mm+ in assets, 80% of them have done so in the last generation in this country.  Now we're going to start confiscating a chunk of that because there's too many wealthy white billionaires?  Seems like a round-a-bout approach is all.  

How many rich white billionaires were made recently...if you want to burn down the Rockefellers and Dupont's etc sure...I dont think it matters in 2021 ,rich is rich, and lots of people of every color will be effected equally (besides the Carnegie's and Hapsburg's..damn the old richies)

[DalTxHornFan 3084]

I also love the uniformed talk against the long-standing step-up in basis doctrine.  It's simply a way to make the IRS your family's business partner due to the impact of inflation over a person's lifetime.

[Bone3421 716]

It's only 2% your crying about people having 49 million after they're taxed on 50 million.....

[Guest Lobo]

So it’s not an annual tax?

[washparkhorn 9931]

Update on the state of the economy.

Spoiler

 

• Fed and US are using stimulus to slow down the decaying inflation rate.  
  • Most of the Fed "investing" has been to stabilize the financial sector. 
    • Reminder: Fed Chair is a Deficit Hawk Republican.
  • Fed says slow growth for 3 years.
• As an economic tool, taxes reduce inflation
  • Quells that feeling that money burning in your pocket impulse
  • Part of the invisible hand toolset.
• We are not an economy where there is money burning holes in the pockets of most Americans. We have the opposite problem for most.
• For our economy to work, we need people spending prudently in this economy
  • The economy works efficiently and at capacity by design when there is robust consumer spending.
  • Consumer spending drives innovation and growth in this economy.
• We have deployed libertarian austerity budgets for quite some time (measured by public investment as a share of GDP) 
  • We are laggards in the modern economic world.
  • Economically, austerity programs are no longer compatible with growth in the American economy. 
  • To balance, we increase public investment as a share of GDP and let that (through consumer spending) gently cushion and re-inflate in the economy. 
    • Post-Fordism Era policy principle that remains solid.
• The Fed is going back to lessons learned by the Great Depression and the Great Recession of 2007-09. 
• The focus now is preventing collapse, which would crater your pocketbook and the World's.

 

TLDR: Inflation is controllable; deflationary collapse is not. We are too close to the latter for the Fed's liking. So we add public investment to the mix of tools.  This is not unusual. This is orthodox economics. It is how the Western World works the problem of deflationary pressure in an economy. That is a primary concern at this rather unstable moment in the markets. 

[MaybeACoordinator 8349]

If you are a fan of the Dallas Cowboys or the Houston Texans you need a downright Stalinist inheritance tax if you ever want to enjoy winning NFL football again. Just imagine -- after the Warden kicked the bucket, or when Jerrah does, those families would be forced to sell the teams, and maybe some non-Evangelical non-idiot or non-Scotch-sozzled egomaniac could run the team for a couple decades.

But nope. They will just be handed down to generations of failsons forevermore. It really does make a nice and tidy little metaphor for America as a whole. We have an oligarchy, fast becoming a kakistocracy, ruling over an idiocracy. As these bloated and entitled and smug and self-satisfied family dynasties preside over consistently underachieving football teams, so our country underachieves under the hegemony of a bloated and entitled and smug and self-satisfied donor class. And as of right now, their grip is still tightening while so many of us are brainwashed into defending these assholes. 

So very, very many of us out here in the field mob who believe themselves to be house servants. And so many house servants who believe themselves in line to be lords of the manor. 

I used to believe that the billionaires in this country would be content to reduce us to a Mexico or a Brazil but today I believe they look more with envy at China. That's the last frontier in profits. Transport costs. If they can break us down to the level of Chinese peasants and stick us back in the fields and factories over here, they could quit blowing billions on fuel guzzling container ship fleets. And so many of us will help them all along the way at the ballot box, mocking those who call this folly as haters and commies.  

[Incredulity 11532]

Well seeing that both teams are worth a wee bit more than 5 million all the estates will have to come up with are around 2 billion or so for the death tax.

[Snake Diggity 4614]

9 hours ago, Lobo said:

It would tax anyone with a living estate over $50mm.  That includes a lot of people of color.  Part of the reason white families have been able to pass along such massive sums of money from one generation to another is because for a huge chunk of American history, the death tax was either non-existent or de minimus.  Now that families of color are getting to accrue some real wealth, it would be a shame to halt that perpetual growth but taking a huge chunk of it.  It sounds like this tax is going after people worth in the tens of billions, but it would royally fuck over families of color with $50mm+ in assets for generations.  I work with family offices every single day, many of them minorities, this would fuck them over way more than it would their rich, white contemporaries.  Nevermind, I don't think you get the point.

You’re kidding, right?  You actually think the net effect of a “living estate tax” would disproportionately affect people of color?  Wtf do you think they’d do with all that tax revenue?  What % of the super wealthy in the US are POC?

Im sorry, but the idea that we need to scrap ideas for new taxes as a tool to solve wealth/income inequality because those new taxes would impact super rich black people is fucking ridiculous on its surface, so if you’re going to seriously put that opinion forward, you need to bring a mountain of stats and research to support it.

ETA: I don’t think a wealth tax is feasible and even if it were I don’t think it’s the right solution to the problem of wealth inequality.  But I think saying it’s net effect would hurt POC is stupid.

Edited March 2, 2021 by Snake Diggity

[Guest Lobo]

The tax fucks over people of color who have accrued wealth.  The research has been done, go fucking find it yourself.  I don't really care that much.   I don't care about billionaires and I don't care about bullshit tax panaceas that aren't what they actually sound like.  Billionaires and the people that blame them for everything wrong in our country can all go fuck themselves.   

Having people liquidate 1-2% of their assets each year to cover the tax, that wrongfully assumes ease of liquidity and ignores the step-up-in-basis rules.  Do you know what would happen to that markets that one month of the year where people have to liquidate hundreds of billions in assets to cover these living estate tax bills over the course of a couple of weeks...global equities, the PE secondary markets, etc.  It would be a shitshow.  Believe it or not, most family offices don't just keep tens of millions of dollars lying around in checking accounts.  

Anyway, you guys got it all figured out.  There's a reason some of the most progressive administrations, way more progressive than Joe Biden, never even bothered attempting this.  It's not a political nightmare, it's a logistical nightmare.  Most people advocating for this don't even understand how the death estate tax works, there's an exempted amount, but was actually taxed...you just received a $1:$1 credit offset. 

Nobody has explained yet how the liquidation of assets would work to cover these tax bills.  Most of the people on here don't even understand how that works at death with asset valuation.  So many of these guys are paper wealth, saturated in their own company's stock.  What happens when we know that XYZ billionaire has to liquidate hundreds of millions of dollars of his own stock to cover this years billionaire tax?  It's gonna drive the price down when he dumps that much onto the open market, so people are gonna short it ahead of time and drive it down even further.  What about liquidating a private equity LP position?  That can take months, even years.  Is the cost of doing that or the capital loss because of how much they lost selling it so quickly...is all of that count against the tax itself?  All kinds of practical concerns that ripple throughout the rest of the economy and as usual, absolutely no credence paid attention to those concerns because this is somehow gonna cure all our spending woes.  

Edited March 2, 2021 by Lobo

[TwiceHorn 31184]

9 hours ago, DalTxHornFan said:

The compliance and enforcement aspects of this ill-conceived plan (were it to ever become law) would be a bonanza for accountants, lawyers, and business valuation professionals.  Do it!

 

This is the real problem with it.  It will set up perverse investment incentives to keep wealth out of easily valued cash-equivalent investments.

It would probably be more feasible and fundamentally fair to tax income and gains as they are made.

[BradInATX 9208]

You’re kidding, right?  You actually think the net effect of a “living estate tax” would disproportionately affect people of color?  Wtf do you think they’d do with all that tax revenue?  What % of the super wealthy in the US are POC?
Im sorry, but the idea that we need to scrap ideas for new taxes as a tool to solve wealth/income inequality because those new taxes would impact super rich black people is fucking ridiculous on its surface, so if you’re going to seriously put that opinion forward, you need to bring a mountain of stats and research to support it.
ETA: I don’t think a wealth tax is feasible and even if it were I don’t think it’s the right solution to the problem of wealth inequality.  But I think saying it’s net effect would hurt POC is stupid.

lol it's such a ridiculous take I just scrolled past it and laughed.

Taking fractional percentages of hoarded wealth from the one half of one percent of the uber-wealthy that are black is ruining the black community. How will LeBron's family make it?!?

Just to be perfectly clear, the billionaires can get the guillotine regardless of skin color.

[Guest Lobo]

Never said it was ruining the black community, I said it would disproportionately affect wealthy of people of color more than wealthy whites at the same net worth levels and their ability to establish, even at $50mm, multi-generational wealth within those families/legacies.  
We agree on so much over the last few years BradinATX, but your revolution might want to begin not with a bang, nor a whimper, but with some fucking reading comprehension.  Thanks for making me start my day agreeing with Slorch.  

I then began a long series of questions about the logistics of this that have not been addressed, and I'm betting dollars to donuts will not be addressed by this august panel of "They're rich, fuck 'em."  Yes, that feels good to say, but the death tax doesn't disrupt public markets, private markets, nor secondary markets to any real noticeable macro levels because wealthy people die all throughout the year.  And there's often years to prepare in many cases as they pass the 80/85 year old mark.  This proposal would create a shitshow of liquidation of stuff that ain't that liquid every year around the same time.  Explain to be how that is quelled.  I think $50mm is too low a starting point, should begin around $250mm, but again it mainly depends on what that net worth is based on in terms of liquidity.  But I'm fine in theory with taxing those people while alive, it's just the mechanics of it seem to be completely disregarded here and in D.C.  

But if FDR or LBJ or even Obama didn't bother taking a swing at this...I doubt centrist Biden is gonna do it (and I voted for the salty bastard).   

[Neonmoon 38127]

We are choosing between giving poor people medicine and rich people bragging rights at their 4th summer house in Aspen. And there are still people who are like, yeah, it’s not fair to the rich people 

[BradInATX 9208]

10 hours ago, Incredulity said:

50 million is a long way from multi-billions.

Fair, you're right. $50 million is still a shit ton, and taxing them $1 million of it isn't going to ruin their family's generational wealth.

[BradInATX 9208]

10 hours ago, DalTxHornFan said:

The compliance and enforcement aspects of this ill-conceived plan (were it to ever become law) would be a bonanza for accountants, lawyers, and business valuation professionals.  Do it!

 

Great. That's even more money that will move from the hoard piles of the  uber-rich into the middle class, who will inject it into the economy at a much higher rate than the super wealthy.

[Guest Lobo]

It does if you take $1mm/year away for 25 years from a closely held private company 

Guys, we're all on board here.  Truly wealthy people should pay more in taxes.  We get it.  Literally 200 posts in, we're just going in circles.  

Leave the identity politics/that guy over there is the reason my country is in shambles bullshit for the Trumpers.  

What we need to do now is to discuss not just the taxation policy itself, but the mechanics by which payers of those taxes would be/could be expected to pay.  

Narrator:  they wouldn't, it would another 4 pages of "who cares?  They're rich, make 'em pay whatever"...'cause that linear thinking is what fuels House Ways & Means

Edited March 2, 2021 by Lobo

[fuggled 576]

30 minutes ago, Lobo said:

And there's often years to prepare in many cases as they pass the 80/85 year old mark.  This proposal would create a shitshow of liquidation of stuff that ain't that liquid every year around the same time.  Explain to be how that is quelled. 

You're arguing that death is easier to foresee and prepare for than an annual tax.  It's hard to see how that argument holds water. 

It's going to be an annual tax.  Everyone will know it's coming, there's no reason people wouldn't/couldn't plan ahead for the appropriate amount of liquidity.  Also, don't we already deal with this for income tax?  If you're self-employed you have to estimate your income tax and pay quarterly or else you're hit with a penalty.  I'm not saying that's a perfect system, but you're argument that the logistics are impossible is a bit weak.

[BradInATX 9208]

2 minutes ago, Lobo said:

It does if you take $1mm/year away for 25 years from a closely held private company

If they get hit by the tax every year, that means the company has maintained a value of >$50 million and it's doing just fine. They'll be fine.

[Guest Lobo]

fuggled-Didn't say it was impossible, said it was a serious challenge that's not being addressed.  Kind of a big difference. 

You can prepare for the tax and still be placed in a burdensome position to liquidate assets.  They're not mutually exclusive.  What I was saying is that death taxes are triggered all throughout the year in our country.  When you have people liquidating public equities or private secondaries each quarter at a fairly uniform prescribed time...that's gonna fuck with pricing all the way down to pensions, IRA's, middle class brokerage accounts, etc.  Preparing for quarterly income tax is much more uniform because it's based on you know...your income for that quarter.  The valuation each quarter of a closely-held business or mutual fund portfolio for billionaries can swing by the hundreds of millions each quarter.  How does the IRS valuate those, what snap-shot do they use?  Someone worth $10bn, that can fluctuate from $7-$15bn in a single quarter and they could bee on their living estate tax by tens and tens of millions of dollars.  It's one thing to valuate at death for a one-off taxation event, but each year---with quarterly payments?  tell me how that will be handled?  

Edited March 2, 2021 by Lobo

[Guest Lobo]

3 minutes ago, BradInATX said:

If they get hit by the tax every year, that means the company has maintained a value of >$50 million and it's doing just fine. They'll be fine.

A company whose valuation is still the same amount after 25 years in business is doing just fine?  Wow, we're honestly hiring a new Controller next year and I like the cut of your jib 

[Incredulity 11532]

6 minutes ago, BradInATX said:

Fair, you're right. $50 million is still a shit ton, and taxing them $1 million of it isn't going to ruin their family's generational wealth.

One million annually.  Yes, that's material.  Turning 50 million of business assets(farm land, machinery, inventory,...) into 1 million of cash isn't simple or easy.  All it will do is concentrate wealth more.

The people this will royally fuck is small business owners/farmers who are just at the threshold.  The machinations for people at assets between 25 and 75 trying to not get over the threshold or squeak under will be massive.

[BradInATX 9208]

1 minute ago, Lobo said:

A company whose valuation is still the same amount after 25 years in business is doing just fine?  

Yes, a family worth $50mm in 25 years will be doing just fine.

Apparently people who have been making the same minumum wage for twelve years are doing just fine, so maybe the businesses should just suck it up and pull themselves up by the bootstraps.

[BradInATX 9208]

1 minute ago, Incredulity said:

The people this will royally fuck is small business owners/farmers who are just at the threshold.  The machinations for people at assets between 25 and 75 trying to not get over the threshold or squeak under will be massive.

Your contention is that this law is going to brutalize the salt of the earth types worth only $49 million because they'll have to put out extra effort to evade their taxes?

[Biff Tannen 45477]

Wasn't this supposed to be based on income and not net worth?

[Incredulity 11532]

9 minutes ago, BradInATX said:

Your contention is that this law is going to brutalize the salt of the earth types worth only $49 million because they'll have to put out extra effort to evade their taxes?

 

Save the working class hero riff.  Yes its a shit load of money and wealth.

Brutalize the market/create dislocations.  There will be a big disincentive at 50 million to accumulate wealth.  That will be a very real problem for the overall economy and drive asset accumulation by larger businesses.  Increasing the very problem it is alleged to be a remedy for.

 

 

Edited March 2, 2021 by Incredulity

[BradInATX 9208]

2 minutes ago, Incredulity said:

There will be a big disincentive at 50 million to accumulate wealth. 

That's the point.

[Guest Lobo]

The point is to cap the growth of small and mid-sized businesses that are privately/closely held?  And then allow the growth they could have had in the form of new production, new sales, new revenue, new hires, new growth---for that to pivot over to publicly held corporations instead who are exempt obviously from this wealth/living estate tax?  Do I have that right?