With corporate tax off table, U.S. Democrats turn to billionaires
reuters.com
reuters.com
> They could also take deductions for any annual loss in value of those assets.
> House of Representatives Speaker Nancy Pelosi said on Sunday the plan has plenty of appeal but that it may only bring in $200 billion to $250 billion, requiring fellow Democrats to rely on other revenue raisers to fully pay for their plan.
> "The billionaires tax ... has an appeal, but it doesn't produce that much money," she told CNN.
This whole idea is thoroughly underbaked. In an economic downturn, the government could end up losing money in this scheme. And it would take less money from the wealthy than a garden variety VAT would.
But Pelosi shows that this runs into the usual problem of big-spending plans - they run out of other people to take the money from. Eventually, they have to take the money from you, no matter how much they promised the wouldn't...
[1] There are two versions of what "the problem" is. The first is that people can accumulate assets, completely untaxed, in the form of unrealized capital gains. The other problem is "we [Congress] don't have enough money". For either problem, VAT doesn't really address it.
They could donate it to their own foundations. After all, money doesn't matter directly, control of money matters.
They could split the money beforehand and "not be billionnaires".
Scale breeds corruption, monopoly and power imbalances which lead to market distortions. If you love the free market, you should support a progressive tax on revenue that would allow small businesses to compete with megacorps by taxing revenue based on corp size - make it financially beneficial to spin off smaller companies to be independent entities.
Billionaires are largely a symptom of excessive corporate power in our nation.
> …the abolition of the corporate income tax, … with the requirement that corporations be required to attribute their income to stockholders, and that stockholders be required to include such sums on their tax returns.
Basically treat all corporate income as pass-through income to shareholders. So if Acme Co has 1 million shareholders and they generate $100 million in revenue, each shareholder adds $100 in income to their personal income taxes next year. If corporations want to keep shareholders, they will need to pay out dividends at least enough to cover the tax bill. But that's between shareholders and corporations.
We'd be better off if every grocery store was independently competitive with other grocery stores.
In the end consumers just pay higher food prices.
Can you imagine instead of Tesla we had half a dozen electric car companies pumping out a few thousand units per year?
That would suck bad.
Just call for a national sales tax and be done with it. Later on, you can transition to a VAT once you see it fixes some of the problems with a pure sales tax.
I'd prefer real solutions to the tax system instead of applying more duct-tape to it.
The same for the climate plans. Any real solution requires an efficient carbon pricing market. Instead we get a subsidy on all electric cars other than Tesla.
We're spending the equivalent of 40%+ of our economy on government (federal + state + local). How does our return on investment look the past 20 years during the great spending growth bonanza (which, amusingly, George W Bush & Co. ushered in)? Extraordinarily poor.
The US spends like it's a Scandinavian nation, without the positive outcome. We have so little to show for our government spending it's quite grotesque.
That is a 5% tax estimate on total wealth, if you take the percentage of actual wealth increase then it is much higher.
To be honest a fixed percentage tax would then be better because it will force them to invest, too big percentage and they will have to take risky investments, and forcing people in that corner is not good.
It is better for the United States to look at Indian Tax structures and codes. Because that’s this country’s future. You can’t have a thin section of tax payers supporting the majority of the population.
Developed vs developing countries is not just about standard of living. It is about GDP and what percentage of the population is productive. By that measure, America is a developing country.
https://en.m.wikipedia.org/wiki/Developing_country A developing country is a country with a less developed industrial base and a low Human Development Index (HDI) relative to other countries.[1] However, this definition is not universally agreed upon. There is also no clear agreement on which countries fit this category.[2][3] The term low and middle-income country (LMIC) is often used interchangeably but refers only to the economy of the countries. The World Bank classifies the world's economies into four groups, based on Gross National Income per capita: high, upper-middle, lower-middle, and low income countries. Least developed countries, landlocked developing countries and small island developing states are all sub-groupings of developing countries. Countries on the other end of the spectrum are usually referred to as high-income countries or developed countries.
Arizona is more of a mixed right / left scenario, so Sinema should be slightly better positioned. She doesn't need to worry nearly so much about being voted out as Manchin.
When the EPA is paying $5000/piece for office chairs, they have all the money they need to combat climate change. The need to run like a startup.
Outside of the general "no" from some people w.r.t universal health care I think that's another reason the federal government has been so unproductive in just making it happen. You going to fire all of those people and completely re-tool the economy? It's not that easy.
But also the military while a large portion of the budget isn't that crazy relative to what we're doing. Should we pull out of Germany, Japan, and South Korea? Only sell weapons? Should we pull forces out of the Pacific and let China conquer Taiwan (or unify depending on your perspective)? I think it starts to get very complicated, very quickly.
-edit-
A quick tangent unrelated to your comment is that we've been trained to assume that all government spending is "waste" which is kind of irritating. Items like the infrastructure bill (or at least components of it at a minimum) can be viewed as investments with ROI instead.
The US is facing perma trillion dollar annual budget deficits, even with tax hikes.
You could reduce our military spending to a reasonable 2% of GDP - ~$450 billion - and the difference wouldn't even cover half of our debt interest per year at this point. The US probably needs to be spending $150-$200 billion on additional annual infrastructure spending at this point, for at least a decade. Entitlements or healthcare? Throwing an extra $100 billion at those per year is a drop in the bucket ($100b = ~2.6% of US healthcare spending per year).
For 20 years spending growth has been far outpacing economic growth, it has been plainly unsustainable for a long time. Now we're putting everything on the global reserve USD credit card.
You can't keep growing spending at 7-8% while your economy grows at half that rate or less - unless you're willing to go the currency debasement route, which is what they've chosen thus far.
Cutting military spending to politicians usually means something else, like cutting benefits to warriors who've already served (thus not really military spending).
I Ducked 'epa expensive office chairs' and got this : https://www.forbes.com/sites/adamandrzejewski/2015/10/01/epa...
The fact you are spreading it over 10 years does not make the 4k chair suddenly cheap.
Yes, some furniture pieces are very expensive. No, that's not always unjustifiable. Nice furniture that works well and will last continues to cost actual money—compare it to Ikea or Ashley Furniture or whatever, and it'll always look expensive. It's also possible they're under restrictions, explicit or implicit, about where they can spend that money—your budget-tier options are going to be limited or nonexistent if you're restricted to American companies, for instance. Given these figures, what they were not doing was giving any significant percentage of their employees insanely-nice furniture.
I'm also curious how many of the top-end items the piece singles out were for political appointees' offices. That could be corruption, sure, but it's a very different kind of issue from the EPA itself having a spending problem.
Meanwhile, $600/employee/yr seems well within the bounds of normal.
Piece is bullshit.
[EDIT] it's also—and this was the most credible-looking source I could find for this, mind you—some guy "reporting" on figures that an organization he heads came up with. Check the about-the-author bit at the bottom. So. There's that.
[EDIT EDIT] I just checked Herman Miller's price book. That $15,000 conference room table the article calls out (inattentive reader: "Oh my god, my dining room table only cost $300 at Ikea, that's insane!")? Based on what I'm seeing, it must have been enormous. Think "20 feet long" enormous. Tables that big are expensive. Are there cheaper ones? Yes. Are 100% of tables that size—which are in limited demand—going to seem absurdly expensive when presented this way? Also yes.
You sure do need a lot of characters though.
Who's "you"? Not me.
> and when you get called out on it with the Forbes article
I posted the Forbes opinion piece on my own, elsewhere, before spotting that someone else had also posted it. I was not "called out".
> You sure do need a lot of characters though.
So does the (bad, i.e. intentionally misleading) Forbes piece.
It's plainly shit judging just from what's in the piece itself, and it's written by an explicitly, as noted in the piece biased author. Is there a better piece on this? Everything else I could find was on very sketchy sites and repeated the same stuff. Of course since the numbers themselves, as gathered by an organization run by the person writing the piece, don't tell the story the article wants you to think it's telling, I think it's a fair guess that no such "good version" of this piece exists.
https://www.forbes.com/sites/adamandrzejewski/2015/10/01/epa...
However, the story is 1) old, 2) overblown crap, and 3) I can't find any other angles on this to fill in gaps—I'm wondering in particular whether some of their choices of vendors are due to requirements to spend X% of their non-wage budget with US companies, or other, similar pressure.
Regarding #2, once you work your way past the deliberately-bad use of math required to make this look like "news", it amounts to, "the EPA spent ~$600 per worker per year on office furniture and expenses related to office furniture like storage and moving fees"—which seems... entirely normal? Even low? The story only looks like a story at a glance because they intentionally misrepresent what's going on. All the pieces are there to figure it out, to their credit, but once you work through it it's not newsworthy whatsoever.
This is, as they say, fake news.
[EDIT] the piece also seems to rely on people not generally knowing what it costs to buy furniture that'll last 10+ years under heavy use. Even cheap large conference room tables are not cheap, actually. Now, if they're buying these then throwing them out after a couple years, and it's not just the political appointees at the top doing this, then there's reason to complain about the agency itself.
This is a painful read. $814 for a container for pencils? Really? Even more egregious is highly-paid (and I really mean, highly paid, even more than most SV people) employees who do not show up for work (the kicker: they also got bonuses, apparently)!
But this is chump change compared to some of the excesses of last year. The Paycheck Protection Program was basically a huge stimulus program, with many loans being 'forgiven'. That's right, going concerns that anticipated difficulties in operating their businesses (note that they had not actually run into trouble) took out these loans that were later forgiven. This program was nearly a trillion. That's a Trillion. With a T. I'm sure some of this saved businesses from going under, tiding them over until they could recover, but in a highly inefficient, wasteful way. Of course, it will be cast as 'Stimulus' when fiscally-minded people ask for an accounting, and more taxes, such as this one, which lays hands on unrealized gains, will be proposed to fund such 'Stimulus' benders!
I didn't look into the exact wording of the tax, but it would presumably apply to equity options the same as any other option. However, it would only apply to those who met one of the two criteria.
It seems pretty safe to say that regular individuals at the vast majority of start-ups would not be affected.
Really I think this question speaks to one of the core problems around taxation discussion of extreme-net-worth individuals; there is a huge difference between winning $20M in the start-up lottery, and being a literal billionaire.
https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#Bo...
Here, the proposal is that if the asset is held and grows in value, then it will be taxed without it being sold (i.e., the unrealized gains will be taxed).
I very much doubt if this will pass without legal challenges, and it may not stand up to close scrutiny in court.
Agree to disagree. What you’ve described is an Estate Tax or Gift Tax, which are not the same thing as a Wealth Tax.
A Wealth Tax is usually defined as a tax on the net wealth a person holds; transfers are not necessary. This is how both Wikipedia and Investopedia define it.
That is simply not true.
- Estate Taxes are about taxing the transfer of assets upon someone’s death.
- Wealth taxes are about taxing the overall net wealth someone has at a given point in time. Gains have little to do with it; there could be ten billion dollars in cash under your mattress and you would still be subject to a hypothetical wealth tax.
In case you are not convinced, here are an overwhelming number of links using this definition:
https://en.m.wikipedia.org/wiki/Wealth_tax
https://www.investopedia.com/terms/w/wealth-tax.asp
https://www.pgpf.org/blog/2021/03/what-is-a-wealth-tax-and-s...
At the same time, Congress needs to budget in a sane way.
60 year timeframe is probably off for most billionaires but the underlying point still stands.
https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to...
Eliminating all of the loopholes, re-evaluating the marginal tax rates, and taxes on corporate income or a VAT make sense. Unfortunately it seems to easy to whip up people into a frenzy about some of those solutions because they can't math.