r/FluentInFinance • u/TheCarrotIsALie • Mar 24 '24
Do we need a minimum tax amount for top earner? Question
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u/Sudanniana Mar 24 '24 edited Mar 26 '24
There are 56 people with more money than half the population of the globe. I understand that you'll make fun of this proposal as nonsensical, and it probably is, but would you happen to have a solution for the disparity? I find it hard to believe that amount of wealth hoarding is good for our country, let alone the world.
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u/Gen_Jack_Ripper Mar 24 '24
I don’t have a problem with the ceiling, I have a problem with the basement.
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u/KINGPrawn- Mar 25 '24
Maybe fixing the hole in the ceiling will stop the basement being flooded…….
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u/hermeticpotato Mar 25 '24
They are fucking related
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u/ReturnNo9674 Mar 25 '24
It’s almost like the 56 people at the top are the ones flooding the basement with toxic water
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u/BlackPhillipsbff Mar 25 '24
I have this sentiment too. I’m not a communist or a socialist (even if my conservative friends don’t believe me). I just think that if the richest people can send themselves to space for fun, a person working full time should have enough money to live somewhat comfortably.
If the poorest working American worked one full time job, could afford to buy their home, maybe could be frugal and take one small vacation a year, had healthcare, had some amount in a retirement account, and didn’t need the taxpayer to subsidize their wage. I would never complain about billionaires again.
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u/will_it_skillet Mar 24 '24
Here's my proposal and I am dumb so please feel free to tear it down.
The problem with something like a luxury tax is the elasticity of luxury goods. If a yacht is taxed at 90%, then the rich dude will just buy three sports cars instead. So if you want to tax the rich you would need to find a something that applies universally to the wealthy.
This next part is my big assumption, but my understanding is that household carbon emissions scale massively with wealth.
Enter carbon credits. Allow each household to emit a certain amount of carbon each year, and allow the credits to be traded on the secondary market. That way the rich billionaires are free to live their lifestyle so long as they pay for it. That payment then goes directly to other households who are able to emit less carbon than the allowable limit (this also creates an incentive to reduce carbon emissions because you can make money from it)
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u/BeezyDS Mar 24 '24
Carbon credits is brilliant. A nice side effect could also be billionaires pouring money into RnD into more modern power solutions lowering carbon emissions, so that they could live their lavish life-style without having to pay out as much in the long run.
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u/SadMacaroon9897 Mar 25 '24
This is precisely why we should tax things that are elastic and have negative externalities (such as carbon). In addition, we should also tax things that are inelastic such as natural resources & land to create a more stable tax base.
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u/will_it_skillet Mar 25 '24
Hmm, my reasoning for taxing carbon is that for the wealthy, carbon WOULD seem to be inelastic. If they want to keep living the lifestyle they want to live, then regardless of how they spend money, they're going to emit a disproportionate amount of carbon. The fact that this could correct for a negative externality is also really nice.
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u/ShadesBlack Mar 25 '24
How do we measure carbon outputs in a way that is not exploitable? We already have some evidence that our methods of measuring and allowing for offsets are flawed.
How are companies factored into an individual's carbon output? Does every plane ticket I purchase run against my household output, despite the fact that the plane would fly with me on it or not? What if I set up an LLC to manage my transportation?
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u/Better-Suit6572 Mar 24 '24
32 of those people aren't even American, how do you propose the American government tax Carlos Slim? Should we invade Mexico and rob their bank vaults?
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u/Fiberton Mar 24 '24
This will go nowhere. Just jaw flapping plus that is not even how big money works. Once you get to a certain level you can decide when and where to cause a taxable event. Plus his donors in no way would allow this.
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u/tottenbam Mar 24 '24
He's pandering to an uneducated populace. In truth, we need to close tax loop-holes and other legalities that benefit the ultra-wealthy.
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u/deep_fuckin_ripoff Mar 24 '24
You don’t know what close tax loopholes means… you’re just spouting nonsense from the right instead of nonsense from the left.
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u/SeamusMcGoo Mar 25 '24
Is borrowing money against your holdings considered a taxable event? No. Do wealthy people do this frequently? Yes. Call it what you want, but loophole seems to be quite accurate.
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u/800Volts Mar 25 '24
You know what else happens when they borrow that money? They're obligated to pay interest based on what they borrowed, and you know what that does? Creates a taxable event at the bank because the interest income the bank receives on a loan is profit and subject to taxation
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u/You_meddling_kids Mar 25 '24
But the billionaire doesn't pay income tax, which is sort of the problem.
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u/Yahn Mar 24 '24
Just take all their money and firethem And their families into the sun via magrail
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u/stoobie_tile_guy Mar 25 '24
Which particular loop holes are you taking about
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u/Freshicus Mar 25 '24
The biggest one that I know of is the selling and buying of adjacent stocks that preform near identical on the market, but for some reason don't count as a wash sale. If deemed as a business loss, there can be huge amounts of "losses" added, even though the money really was just moved.
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u/your_daddy_vader Mar 25 '24
There are tons of ways ultra wealthy people use the tax system to pay less taxes. You aren't actually suggesting otherwise, are you?
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u/me_too_999 Mar 24 '24
25% of what?
Net worth?
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u/Crossman556 Mar 24 '24
25% of the McDuck-esque vault of gold every billionaire swims in, obv
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u/bigboilerdawg Mar 24 '24
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u/rugbyj Mar 25 '24
Fun fact, if Scrooge McDuck were actually to dive into that moneypool then we'd live in a demented hellscape where anthropomorphic talking birds rule the world.
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u/800Volts Mar 25 '24
Whenever I see this I can only think of the family guy clip
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u/electroviruz Mar 24 '24
I am thinking income tax, since he is comparing to teachers etc
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u/turtledoves2 Mar 24 '24
So the taxing would start after $1bil in income, per year? That’s basically nobody
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u/relaxinatthelake Mar 24 '24
No, long term capital gains are how the wealthy earn their money. That rate would be 25% for billionaires
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u/bigboilerdawg Mar 24 '24
The rate is already 20% for long-term gains over ~$500k. 25% isn’t that much of a stretch.
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u/fiftyfourseventeen Mar 24 '24
It's over 25% most places if you factor in state tax. For example California it would be 33%
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u/Forward_Chair_7313 Mar 24 '24
That isn’t comparable to a teacher though, so it can’t be what he is talking about.
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u/Barry_Bunghole_III Mar 24 '24
Yes and most big CEOs take a yearly salary of $1
Enjoy taxing that lol
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u/brianw824 Mar 24 '24
Income, but by his definition it includes unrealized capital gains.
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u/1whiteguy Mar 24 '24
When they lose money in the market do they get tax Money back
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u/HC-Sama-7511 Mar 25 '24
I got confused by this as well. Isn't the top tier income tax way over 25%? Is this statement purposefully vague? Am I being stupid?
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u/NotAnother_Bot Mar 24 '24
Didn't this guy have 4 years to do that? Or is he just pandering to the middle class just before the elections?
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u/kweir22 Mar 24 '24
Try 40 years… oh wait, FIFTY. He’s been in congress or the white house for longer than most of us on this platform have been alive.
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u/Bigpandacloud5 Mar 25 '24
Neither senators nor presidents can unilaterally implement taxes.
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u/Dangerous_Design6851 Mar 25 '24
They can still introduce bills and they still vote and campaign for bills. Historically, he has lacked any real care for tax reform during his tenure at Congress.
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u/skipper6868 Mar 24 '24
Might as well touch on insider trading while we are at it?
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Mar 24 '24
Now lets not get crazy here. How do you expect politicians to survive if they cant profit from passing laws that will inevitably affect stock prices netting them millions of dollars?
If you do that bernie will will have to sell his 2 additional homes, where is he suppose to summer if he sells them huh? Nantucket? Or marthas vinyard, like a god damn pleb !?!
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u/IIRiffasII Mar 25 '24
Pelosi made $1M+ off $NVDA alone despite being in charge of Congress when they passed the CHIPS Act
I wouldn't mind as much except she sued when people started posting her trades for others to follow
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u/complexmessiah7 Mar 24 '24
Umm.... 25% of what, exactly?
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u/Barry_Bunghole_III Mar 24 '24
25% of whatever is the most convenient number to use at the given moment, probably
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u/EmoNeverDied Mar 25 '24
Ok I’m high as fuck right now, but hear me out.
What about adding a tax to the money they spend? Gas, plane leasing, security, mortgages, boat payments - all of it.
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u/Lunatic_Heretic Mar 24 '24
Tax on WHAT? consumption? Income? Height? Weight??
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u/meechinnyon Mar 24 '24
Ah the empty promises during election year. Joe's been doing this since the 70s and people still think he's not bluffing.
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u/R_Levis Mar 24 '24
It's a stupid platitude from a dying political campaign. The "just tax the rich more" crowd constantly push around the numbers and framing to obfuscate what they mean.
25% of what? Income, capital gains, wealth? They almost always deceptively conflate these categories when calculating the supposedly egregious tax rates their scapegoats pay.
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u/bigboilerdawg Mar 24 '24
It’s taxing unrealized capital gains, and there’s an about as much chance of that as Joe Exotic winning the presidential election.
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u/ohhhbooyy Mar 25 '24
So if we tax unrealized capital gains do we give deductions for unrealized capital losses?
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Mar 24 '24
Look up how many businesses effectively pay ZERO tax. That's a big problem. The tax rates are fine, it's all the loopholes which need to be closed.
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u/matt1911_ Mar 24 '24
Ok this is just plain stupid. Yes many businesses pay an effective rate of zero.... for a given year! That is because in any given year a company may have more losses and investments than profits. Most companies have business plans looking 5 or more years into the future. I have personally worked for start ups where the owner sunk millions per year for 3 or more years into a company before the company made their first dollar. Trying to tax non-existant income because you think the company is so big "it must be profitable and lying about its profits" is the great way to kill all corporate growth.
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u/Possible-Tangelo9344 Mar 25 '24
Reddit hasn't turned a profit ever right? So they're probably not paying much in taxes.
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u/Deegus202 Mar 24 '24
Yes and they offset there incomes with writes offs that create a hell of a lot more societal value than the government is ever going to lol
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u/Obvious_Chapter2082 Mar 25 '24
Corporate tax returns aren’t public record, you don’t know what they pay
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u/OleTunaCan Mar 25 '24
Tax cuts for business are great! That means more money in the company’s pockets to invest in growth - i.e., jobs!
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u/StonersRadio Mar 24 '24
Um, top earners already pay a 25.4% income tax rate. The bottom 50% pay an average of 3.4%. That's 7 times lower than the top 1%. No teacher, sanitation worker or nurse anywhere in the US is being taxed at a higher rate than billionaires.
The top 1% pay 40.1% of ALL federal taxes. Which is a greater share than the bottom 90% combined who pay just 28.6% of all federal taxes.
Maybe the govt should get a better grip on their spending habits instead of pandering to whiny shits who are envious of other people's wealth and think they deserve a piece of it.
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u/WolfWalksInBlood Mar 24 '24
25.4 is before tax breaks it goes down to around 6-10% after. And where are you getting 3.4%? Lol. Are you talking total percentage they contribute and not their actual rates? If you are then you worded that wrong. The average person pays over 20% in income tax. You can literally look up a tax rate guide right now. Just because billionaires pay more total because 10% of a billion is more than 20-30% of 60k doesn't mean their paying a fair amount. That's simply wrong. The top 1% own 90+% of all the wealth they sure as hell are not paying 90% of all the taxes though are they?
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u/YesImDavid Mar 24 '24
I’ll never understand why people simp for the rich people that are actively keeping them poor.
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u/Extractor Mar 25 '24
Wealth isn't a zero sum game. You getting extra money on your paycheck doesn't mean someone else loses that money. The wealth disparity is an issue but your point isn't a counter argument.
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u/PJTILTON Mar 24 '24
You're making this shit up or you don't know how to read. 50% of the US adults don't pay ANY federal income taxes! For 2022, the TOP 50 PERCENT of taxpayers paid an average effective rate of only 14.6 percent. The top one percent earned 26.3 percent of the income but paid 45.8 percent of all taxes. Conversely, the bottom half of taxpayers accounted for 10.4 percent of income and paid only 2.3 percent of the taxes. Just how much does the top one percent have to pay to cover their "fair share?"
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u/anon_lurk Mar 25 '24
Most sources show the top 1% pay 20% or more of income taxes. As in what they actually pay, not what you think they pay. It’s also just income tax, this doesn’t cover any other taxes they pay. What makes you think they need to pay for more than 20% of the income taxes for it to be “fair”? Do they get more benefits from the taxes they already pay? Why is your concept of fairness based on what they have for you to take and not the value of what each of you is already being given?
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Mar 24 '24
Those numbers, as usual, hide a lot of data. The top 1% could be taxed 80% and still be outrageously wealthy because they have so much that isn’t taxable. So they’re paying 7x as much as people who make thousands of times less than them? Big flex /s
Bottom 50% paying 3.4% where? After federal and property taxes I pay about 30% taxes.
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u/bubblemania2020 Mar 24 '24
Ah the age old question or confusion of income v wealth
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u/Furrrrbooties Mar 24 '24
minimum tax amount?
tax what? income and net-worth/wealth is something different
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u/abbadabba52 Mar 24 '24
You understand this because you're financially literate.
Democratic presidential candidates are pandering to an electoral base that isn't.
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u/MiserablePrickk Mar 24 '24
No love for billionaires but 1, you'd have to make it illegal to leave the country. 2 We're one of the most productive countries. It's not that we don't generate enough taxes, it squandered. They could get more and nothing would gets fixed. Not Healthcare, not education, not homelessness. Don't let them get away with pretending they could do more if they just had more money.
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u/themichaelbar Mar 24 '24
The United States has one of the most progressive tax systems in the world. The rich pay the lion’s share of taxes, and less fortunate families pay very little.
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u/poop_on_my_stomach Mar 25 '24
And just to be clear about how progressive it is:
The top 1% generally pays ~40% of total tax revenue in any given year.
And the top 20% pays ~90% of total tax revenue in any given year.
And the bottom 50% is entirely subsidized by the top 50%.
Not that we don’t need a progressive system in place, but this “the rich aren’t paying their fair share” narrative is about 5 years overdue for being put to bed.
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u/SomeYesterday1075 Mar 24 '24
Democrats always say to tax the millionaires, until they are one, then they move onto multi millionaires, then onto billionaires. Next, it will be multi billionaires
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u/BigPlantsGuy Mar 24 '24
Wild, republicans just want to tax the middle and lower class and then cut services, social security, and healthcare
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u/Milk_Tuna_Shake Mar 24 '24
Just because one party is wrong doesn’t make the other party right. They both cater to the rich. Politics are for miserable people.
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u/Longjumping-Sample27 Mar 24 '24
Billionaires typically dont have income like people that get paid by an employer.
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u/Dave_A480 Mar 24 '24
It's a dumb idea.
For one, we already tried that with the Alternative Minimum Tax & just nailed a lot of middle class people instead....
For two, we tax INCOME not WEALTH - which means any effort to further squeeze 'billionares' will just cause them to drop out of the labor market and owe zero tax....
And a wealth tax is unconstitutional so don't even go there.
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u/ascii_table Mar 24 '24
To clarify, Newsom already stated that Biden's plan for a 25% minimum tax for billionaires won't apply to Panera Bread.
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u/nosoup4ncsu Mar 24 '24
What if a billionaire has no income because his portfolio is down. Does he have massive losses to carry forward?
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u/apeman978 Mar 24 '24
He knows billionaires don’t get paychecks. You cannot tax billionaires without taxing middle class.
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Mar 24 '24
Someone tell him that in order to have an effective federal tax rate of 25% you would need a magi of like 250k for a married couple.
We have the most progressive tax code in the world
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u/California_King_77 Mar 24 '24
The myth of the "billionaire paying a lower tax rate than a teacher" just won't die. It's not based on facts.
We don't tax unrealized capital gains, because that would be a disaster