Assuming we agree with the premise that this amount of inequality is too extreme, what is to be done to reduce it? And in what way do we ensure this does not compromise the basic principles of our capitalist economy, e.g allowing the rewards to be commensurate with the risks, rewarding people who work harder and have more qualifications, and preserving ownership.
Nothing would stop somebody with money under this schema from continuing to invest. The mindset of "i dont want the government is taking my money!" is reactionary bullshit that has resulting in underfunded public serves, from the FDA to the IRS. The idea that no amount of money can be enough for one person is toxic, and antisocial.
Tax on capital gains do not work to tax them either since they don't sell their stocks but take loans against them.
In what way should these systems be changed, or new systems be used, to appropriately tax them without compromising their ownership of the companies they built?
- From the perspective of a communist, it's clear.
- From the perspective of a libertarian, it's clear.
- From the perspective of people who want to stay within the bounds of capitalism but would like to have some way to curtail inequality, a group to which I belong, it's not clear.
If you're of the same beliefs but are unable to present and defend a specific solution to address the problems presented, as I am, you should welcome those questions.
I'm not trying to fight you, I'm unclear on where you're unclear and trying to understand.
I'm not going to be able to comment on that with any confidence.
(And, yes, of course: establish a sensible annual exclusion, so no one accuses me of trying to demolish second mortgages for middle-class families, or whatever.)
What (good-faith) second-order drawbacks might this have? I'm genuinely curious about whether this would be a feasible idea.
Second, loans require repayment. Even if the bank accepts your stock directly as payment, there's a taxable transaction. I don't understand how loans evade taxation.
Third, marginal tax rates used to be MUCH higher than they are today. Example from USA Today: "For married people filing jointly in 1953, for example, any income above $200,000 was taxed at 90%, above $300,000 at 91%, and above $400,000 at 92%."
I don't understand fully how loans evade taxation either. What I've read is that it's a combination of:
- They can be carried forward into other loans.
- They don't repay them, they only pay the interests.
- They aren't close in amount to their actual net-worth.
So most of the money they own is not liquid and not subject to those taxes. Unless we're talking about a wealth tax, which I'd be interested in seeing an argument for as well.
> Some will argue that using this wealth for public benefit is not possible, because it's "tied up" in stocks, and therefore inaccessible. This is just not true.
On the featured site the last sentence links to the author's argument that taxing stocks is possible over a period of years or decades [1].
For context, the author of the site is Matt Korostoff.
[1] https://github.com/MKorostoff/1-pixel-wealth/blob/master/THE...
People would still be able to amass enough wealth to do whatever they want for themselves and their family and friends, they just wouldn't be able to amass so much money that its gravitational field starts to warp all of society.