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Comment by t0mbstone | Hacker News Reader

The key here is the phrase, "currently takes in".

There is a huge amount of taxes that the ultra-wealthy are currently NOT paying. In fact, the vast majority of income taxes are actually paid by the lower and middle classes, because once you hit a certain level of income you have enough money to pay professionals to help you shelter your money and avoid taxes.

For example, Warren Buffet only paid $1.8 million in taxes in 2015, even though his wealth was worth 72 billion at the time. His wealth literally grew 12 billion that year, and he only paid $1.8 million in taxes.

That means he paid only 0.015% in taxes, in terms of wealth growth vs income taxes paid.

Meanwhile, someone earning $100K would have paid around 20% of their income...

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Looking at IRS data, top 1% tax payers in US in 2018 paid 38.5% of the federal income taxes. Bottom 90% paid 28.6%. So I don't think they're as good as hiding their money in the Cayman Islands as you think they are: https://taxfoundation.org/federal-income-tax-data-2021/

In comparison top 10% of the Danish tax payers paid just 31.3% of the total income tax, despite Denmark having rather high taxation (the OECD method that puts it as #1 is controversial, but I pay e.g. a 42% marginal tax rate on any capital gains).

There's a large difference between:

'share of the total taxes the rich pay'

And

'the percentage of their wealth the rich pay'

It may only take the rich 5% of their income to pay the 38.5% of total taxes because they're capturing so much of the value generated in America and hiding it whereever.

If I buy a bar of gold it may go up or down in value. Until I cash out, that value is 'locked up'. Do not confuse income with wealth. They are locked at the hip and are very closely related but are not the same thing. That is where most of 'the rich' keep their 'money'. They do not keep most of it in large bank accounts. Take the top 2 guys right now. Most of their 'wealth' is in stocks for 2 companies that have had their valuation go extremely high. Oh they are rich. But if they cashed out they lose control of their companies. You can clearly see what is more important to them. Even the warren buffet example from above is someone who keeps his money in a company that buys other companies and makes them profitable. Lives extremely modestly and plays with coupons. His wealth is locked up in companies that makes jobs. You probably could tax them another 10-20% more and not really move the needle on what they pay. Because they manage their wealth not their income.

You're right but you're discussing something totally different.

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