And what would happen if we did?
In Finland fines are based on percentage of yearly income.
We’re still waiting for Bezos to come here and get a massive speeding ticket to fix our budget for the next decade
They write the tax laws and buy the politicians to pass those tax laws. So no, we cannot tax the rich.
I like Bernie’s idea of taxing every trade on the stock market.
Even a 1 or 2% per trade would bring massive amounts of money, not even trying to make it progressive or anything.
Why that would be huge:
It would incentize the rich to hold stocks long term, this would lead to corporations thinking more than what profits are in 3 months.
Which translates to greater stability for other investors and job security for the people who work there.
But it’s never going to happen as long as
SmaugPelosi and people like her who’s main priority is personal wealth is running the Dem party. Because we all know Republicans will never support it.But if we don’t purge the Dem party of neo liberals, and fast, we’re all fucked. We can’t keep walking down the path of “the rich always get richer” like nothing is wrong.
Wealth is finite. And without taxes and regulations the people who already have a lot will always accumulate more faster than they can spend it.
With them hoarding all that wealth, no one else has any.
Not only that. It stops a lot of the AI micro trading bullshit
Meanwhile down on earth, you’ve just caused an entirely new class of derrivatives traded on sketchy and unregulated markets, increasing the risk of fraud to all, including small individual investors.
Wealth is finite
The size of the observable universe is ~93 billion light-years. So, you’re technically right, but…
I don’t understand what you’re trying to say, but I’m not expecting you clarifying to help
Well, a lot of stock trading isn’t as simple as just stock picking, buying and selling individual stocks.
Much of the market is made up of derivatives trading, such as options, where you aren’t trading the stock itself, instead you are trading the option to buy the stock.
The value of the option is derived from the value of the underlying asset, but it is not absolutely coupled to it (this is how a lot of the money is made, by finding market inefficiencies and capitalizing on things like slippage, where there is a mismatch in the value of the derivative and it’s underlying)
What the person above is saying is that, when it becomes no longer profitable to trade underlying assets directly, new derivative markets will be invented that trade around other underlying assets.
Think about unregulated Bitcoin trading for example, while contrived, imagine a crypto currency that is coupled with the price of another asset (these exist, like USDcoin) such as a stock, future, option, or something else.
I should add, typically the derivative kind of collapse into the underlying at some point, but in the case of an option, it might be traded 100 times before that happens, during each of those trades the actual asset (e.g. the underlying stock) doesn’t actually change possession, and a given side of the contract may or may not be changing possession. If you write a call option for a 100 shares of Ford you own, you aren’t selling the stock unless the actual call gets assigned and you are required to fulfill the contract, but the ‘buyer’ side of the contract could have been sold 100 times in the meantime.
All this to say, it’s complicated and there are lots of opportunities for shady shit to happen.
Yeah, and this should showcase just how bullshit the system is. IMO every one of those 100 trades in the middle should be taxed, this removes bullshit from the system, you can’t buy a contract saying you’ll buy the stock, because that would be buying something of that value and would be taxed. We need to start seeing those 100 trades, as what they are, i.e. a way to try to rig the system.
go lookup the tax rates in the 60s/70s. we used to
The highest bracket was taxed at 70% until Reagan’s first plan in 1981 lowered it to 50%.
It’s currently at 37% under Trump’s 2018 tax plan.
https://taxfoundation.org/data/all/federal/historical-income-tax-rates-brackets/
Keep in mind that’s Income Tax. Most rich people don’t actually have income, they have capital gains.
Right, that’s the real problem. We’re over hear bickering about income tax rates, while the wealthy are sitting there playing a shell game with : income? Find the income. Which cup is it under? If you tax the right one, you win a prize. Just like any shell game, the only way to win is to not play.
It’s possible, but usually harder because what makes the uber wealthy uber wealthy is that they own assets rather than have huge income.
So when they say Bill Gates, Elon Musk, Bezos or whoever has “X” billions, they’re talking about the value of assets they own (usually large stakes in successful companies) which has more of a parallel with how the middle class talk about their house (an asset) now being worth (whatever). It’s not liquid cash.
Taxes on assets are typically realised when those assets are sold or transferred because their value goes up and down and all over the place. And the uber wealthy do pay tax whenever they sell stock because they’re buying this mansion or that yacht. It’s just usually comparatively small to their full fortune which remains in stock.
So the difficult thing about taxing stock while it’s owned is, like I said, the value goes up and down quite dramatically at times. Should the government collect taxes on the buoyant times but then refund them during market downturns? That would be a nightmare. No government wants to be on the hook for refunds during a downturn.
And it can’t (I don’t think) just collect taxes when super valuable stocks are on the way up because that’s not actually cash. It’s just the market value if that stock were to be sold. So the most a government could do would be either to receive some of the stock as a tax payment (not much use to a government that wants to spend it) or force the owners of companies to sell stock and make a cash payment just because they’re successful.
Which sounds fine on the surface, but this messes up how ownership of companies works. Let’s say some good guy CEO (they do exist) has managed the growth of a multi billion business and to do so has brought in investors which now own 49% of the company, and he - the founder - owns 51%. If the company’s value on the market rose 20% you’d get news articles about how the founder now has “XX billion” since last year and that they “earn” so many hundreds of thousands a day compared to your average working class person. If the government forced the owner to part with 3% of their ownership of the company in order to pay this “growth tax” then the founder no longer has overall control of the company. It would be 48% founder owner, 49% investors and 3% whoever the government sell the taxed stock to in order to realise a cash value.
So it erodes ownership. Again I’m sure there are plenty reading this who think “so what?”. But I can tell you that much of the market value of stock, the reason it has the value it does, is in many cases because the market trusts the management of the ownership of the companies to continue to make profit. If you force the erosion of that just because the company did well then you destroy the way the market trusts and ascribes value to things. Which is why the way governments tax company is via profits and stock sales, where the value is already realised or where the decision to sell is not forced in the same way.
So what to do about this?
Well you can just increase the taxes on stock sale, or on dividend income. But what happens there is you snare the wealthy middle class with the same rope you were aiming at the uber wealthy. Again some might not think that a bad thing, but it’s unlikely to be as effective as people would like it to be. You’d generally be raising dividend tax by a percentage point or two on people receiving low six figure sums. Which would get some extra from the Elon Musks, but also would get the same amount from, say, a consultant surgeon, or a recent tech startup founder etc. My point being, there are not huge numbers of these people, compared to the rest of the population that government spending is spread over. The amount you end up raising is not huge compared to what seemed to be on offer when you look at Meta’s total net worth or something like that.
The ultimate answer is about ownership. But it has to be organic (personal opinion) so that it doesn’t cause disruption to the markets that end up hurting the most vulnerable (via job losses).
And the best way this is done is to simply suck it up and pay a little more for a non mega corp solution to something. Want Bezos to have less of the pie? Stop buying through Amazon just because it’s cheaper. Want Gates fortune to be more wide spread? Save yourself a ton of cash by using Linux instead of windows + office licences. Don’t like Elon musk? Stop using twitter, don’t buy a Tesla.
If you’ve done all these things I personally think it’s as much as you can do. You should put your efforts into making these boycots as easy for others to follow as possible (support your favourite FOSS project) etc. Pay for the online services you like so they don’t feel the need to resort to Google ads and on. Unfortunately in a free market such as the ones many of us live in (thinking Western world) the uber wealthy are mainly that because of the millions and millions of micro choices by consumers who are free to go elsewhere but just often don’t choose to.
While the ultra wealthy don’t have billions on hand, they do take loans against their assets, which we could tax more.
Why? Are any loans ever taxed?
There were tax evasion schemes in the UK where wealthy people could take loans from an offshore entity they contributed to and never pay the loans back. But this was shutdown fairly quickly by HMRC (British IRS) and a bunch of people were fined / went to jail. Don’t know if the same is true in America?
If a loan is acting as income (like it does for the ultra wealthy) then it should be treated like income and taxed accordingly.
How do you establish that a loan is or isn’t “acting as income”?
Those loans are often several times more than the yearly income and done more frequently.
My mortgage was many times my yearly income.
So then you just have frequency, which is easily gamed by getting fewer larger loans. Maybe one every three to five years? At that point it really is just a mortgage with stock as collateral rather than a house.
Like, you’re not wrong in your intuition that the system is problematic. Mine (and others) point is that the devil is in the details, and they’re not trivial.
But then the value goes WAAY up. Let’s assume you live in a very good house, and mortgage it you’re able to get 5 million out of it. Do you think someone like Jeff Bezos could live for 5 years with that?. You can do it fairly straightforward, everytime you take a loan, the full amount of that loan gets added, after a period of 5 years that value disappears, if at any point that value goes above 10 million, you start paying taxes on it. And the higher it goes the more tax you pay on it, just like how income tax has brackets, and just like how up to certain values are exempt.
For you or me if we were ever loan 10 million over 5 years we wouldn’t have a way to pay it back. For an Uber wealthy they do that fairly quickly, Bezos mention costs 600k a month, so he’ll get into the first bracket from just that in a year and a half.
People need to realize just how big the gap is, there are plenty of ways to tax extremely rich people without affecting the middle class by just putting the bracket so high up that it’s impossible for a middle class to reach it.
Theoretically, sure. Pragmatically, we just elected a fascist insurrectionist, and it’s not going to happen in the near future.
We?
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Yes.
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They would fight back, buy all our media sources, and buy our governments to make sure 1 didn’t happen.
Sounds familiar… oh wait…
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