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Just from a game theory perspective, a distributed group of people who are unorganized are unable to get their concerns addressed properly when it comes time to writing tax laws.
The rich and powerful, by virtue of being rich and powerful, have a voice in writing the tax laws. The distributed poor, do not. So it's much easier to satisfy income goals by taxing the group who has no feedback loop to the politicians
The isn't snark. The answer is simply greed. The rich want to be richer. They want it all. The mentality is, "I don't care about anyone else, I want it all."
Edit: removed a redundant sentence
Mathematics and Politics.
There are many more people who are "working class" than rich. The argument is that if you take some money from a lot of people, you get more money than if you take a lot of money from some people.
There's also the argument that if everyone pitches in, the overall burden for each individual is less.
What this fails to address is that the richer you are, the more you can play with your money and end up with nothing to tax. This is why the rich get richer and the rest of us don't.
Running through all that is a thing called "trickle down economics" which claims that the money from the rich ends up in society, but recent reviews of this have proven this to be nonsense. Politicians use this as an argument for the status quo.
Finally, the rich shape the narrative. Politicians are essentially elected by the rich through their manipulation of the story through their media empires and social media platforms.
Rich people have special access to the legislative machinery that you and I don't. Through ~~bribes~~ "contributions" they can craft laws that let them avoid paying their fair share of the tax burden. They can also "modify" pending legislation to remove the penalties for breaking those laws. It must be nice to live in a consequence-free environment.
The sad truth is that this is exactly the answer. Rich people have more power by virtue of being rich.
Sorry, OP might judge this to contain some snark and as such, is ineligible. ☹️
It's the same as in every business: those making decisions think that the decision making is the hardest and most important part of the equation. Not only that, they believe that it is their right and that they worked very hard to get where they are.
There are two reasons they have to believe that:
The common argument that is brought up against change now is capital flight: "if businesses and rich people were taxed too much, they'd leave the country". There is a great fear that they will leave and take all the good jobs with them. The counter argument to that is: they aren't the only ones with brains to get a business going. Rich people aren't smarter than non-rich people, businesses that leave did employ people from whence they left and they also probably sold to the people in that area or country.
Now, of course the speed of departure, the political reaction, and the location are important.
Speed: instant departure can have a serious impact as the jobless might not be able to find other employment quickly. A graduated departure allows that however and also makes it possible for people to focus on other jobs/specialisations in the first place.
Political reaction: depending on where you are, providing recertification and training courses, having good welfare programs, and most importantly having an exit tax can help soften the blow of departure
Location: A big employer leaving a small town can be devastating. A small employer leaving a city, less so. A big employer leaving a city can burden the city, but the other factors are important.
The argument is: They're poor, what are they gonna do a about it?
The argument is that the rich and powerful are rich enough and powerful enough to corrupt the system and not have to pay taxes.
If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you.
-Lyndon B. Johnson
Blind greed and incredible selfishness.
Basically you're trying to reason madness.
They are less powerful and easier to tax. It's all about power, The rich by themselves are less powerful than the masses when the masses are together. Which is why they're taxed at all. There's something more powerful
IMO the most valid argument is that there are way more people making a middling income than people making a high income, so any reduction in taxes for those people would need a proportionally much larger increase in the upper brackets to maintain the same level of tax revenue, if it's possible to make the numbers work at all depending on how much of a tax break you want to give. The minimum amount to be taxed is set based on where the tail end of the bell curve is, the number of people who are poor enough not to be taxed is small.
Of course there's also the fact that the richest people don't get their money from having a job at all, it's all in investments, so messing with income tax rates doesn't even affect them.
And that's the definition of capitalist vs working class. A top surgeon makes a lot of money yes, but they are still working class because their main income is from salary.
Earning a big salary or buying some stocks don't make anyone a capitalist. Being the owner of Johnson and Johnson, hiring an administrator and not working a day in your life does. And that's the kind of people who get richer with any crisis, holds the biggest part of Johnson and Johnson profits, and pays no tax at all.
To build off of this, if you collect $1000 in taxes from a million people and you've just pulled in a billion dollars. With 300 million people in the country that's a lot of tax dollars.
Obviously if you can tax 1000 out of every million dollars in wealth and individual earns in a year you can easily collect far more in taxes given how many multimillionaires will see their wealth increase by tens or hundreds of millions in a year.
This is all super reductive for simplicity. It's worth looking at how the super rich are able to avoid paying taxes. Are they not paying taxes because they're doing things with their money that is directly incentivized and generally better for the country than if they simply hoarded the same money, such as running the money through charities, clean energy installtions, etc? I'm honestly asking because i really don't know and I dont have the time right now to pull at that thread and research the question
20 years ago, the right wing propaganda machine was focused on (before they went full out fascist) low taxes for the "job creators" such as corporations and rich people, on the basis of that leading to more lucrative job opportunities for everyone else. The thinking was that the people and corporations in this low-tax environment would have incentives for creating jobs "here" instead of moving them overseas.
Not everyone on that side of the isle have realized that this results in jobs still ending up overseas, along with money that could've funded schools, roads, libraries, et al. And many of those who have realized it continue along the same path because it's too profitable for them to do so.
Remember this next time you hear slogans such as "trickle down economy", or Glitch McConnells favorite: "What's good for the goose is good for the gander".
The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?
You might say this is what we should do, but I think it’s far from obvious.
If you earn $40k and the first $13k is untaxed, then you’re paying no taxes on about the first third of your income. And from there you begin paying in the lowest bracket.
If you make $100k, and the first $13k is untaxed, that’s the first 13% of your income, not 33%. And some of your income will be taxed at levels higher than anything the $40k earner pays. I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.
The fact that there’s one standard deduction for the whole country is insane, since $13k means something extremely different in different places.
But across the board I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.
So I don’t really get your question. But who am I fooling? I’m going to be downvoted into oblivion for going against the popular narrative on this.
Going against the popular narrative? What would that be, that progressive tax brackets are the very fucking least we can do (and is clearly not enough)?
No man read the top dozen voted root comments and you will see the narrative: rich people are using their political access to fuck you and get richer. The OP doesn’t even acknowledge progressive tax brackets. The entire system apparently is specifically designed to direct money out of starving people into the super wealthy. That’s the narrative. It’s right up there with “CEOs don’t do anything” and “you shouldn’t recycle because it’s just a scam cooked up by Big Plastic.” It’s actually hard to be a good liberal when those around me are dripping with this kind of horseshit nonstop.
The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?
Half or more depending on mean or median. But that’s just a starting point for the discussion.
You might say this is what we should do, but I think it’s unreasonable to say that it’s a total head scratcher why we don’t already.
That’s not what I was intending to ask. Sorry if I phrased it poorly. I’m trying to understand the arguments against it because it’s what makes sense to me.
I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.
I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for be the ones who contribute the most. And those that are seeing the least benefit be exempt.
I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.
This is almost exactly what I suggested. I think we’re basically on the same page.
Yeah I think we may only differ on degree, and yes some of my confusion about your post came from phrasing. There are still some phrasing points I’m struggling on.
I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for
The poor benefit from roads, schools, firefighters, Medical/Medicaid, and utilities as much as anyone. But I think you had the super wealthy in mind. “Those who benefit from infrastructure” is an odd way to pinpoint the super wealthy.
be the ones who contribute the most.
This part is already true. Progressive tax brackets have them contributing the most as a proportion of pay, and far and away the most in absolute numbers.
And those that are seeing the least benefit be exempt.
The entire lower 50-60% of the economy is an extremely inclusive notion of “those who benefit the least.”
Again, phrasing.
I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for
The poor benefit from roads, schools, firefighters, Medical/Medicaid, and utilities as much as anyone. But I think you had the super wealthy in mind. “Those who benefit from infrastructure” is an odd way to pinpoint the super wealthy.
Those who “most benefit” would be those who have been able to leverage the infrastructure and security provided to profit wildly. Not those who are just scraping by.
I think we do agree on all but degree like you said. And maybe mean/median income is too high. I was just trying to come up with a somewhat natural but objective breaking point. I think a more reasonable but also more subjective one might be the “living wage” which will certainly be much lower than mean/median but also much higher than $13k.
P.S. Tangentially related, I found this living wage calculator which put my current LCOL residence at ~$42k and my previous HCOL residence at ~$57k. Turned out to be much closer to Mean/median than I expected.
I think you need to take a step back and stop talking about income tax. Instead, talk about wealth distribution overall. What about businesses? What about corporations? What about passive income? What about savings that's passed to children? What about inheritance tax? What about tax fraud and tax evasion? And I meant to separate those explicitly, because there are many weak points in the tax code that allow for companies to take advantage of the ability to send money overseas, for example.
If all you're doing is adjusting the standard deduction or the base exemption or the top threshold for social security payments, you're ignoring the gigantic high-dollar figures that are happening with the billionaires and the largest corporations in the world. And if you ignore them, then there's no way you can fix the corruption that's plaguing modern society.
Of course I think you were trying to keep your focus narrow, which is a reasonable thing to do, but it's also worth noting in at least one comment that the big picture involves much more important questions about how we should allow wealth to be redistributed.
I often wonder this myself. Why do rich people, who have so much wealth that it is unimaginable to us, not want to pay any taxes? It hampers the economy, makes it less adaptable to contractions, and makes the lives of the vast majority of the population much more difficult. At a macro level, I really don't see any benefits to it. So, here's my best guess.
If you are talking about federal income taxes, they are actually progressive. The vast majority of the money collected comes from the top 50%, the 1% pays something like 25% of the total just by themselves. Its why Republicans and billionaires bitch about it so much and want to eliminate the federal income tax. In reality poor people are mostly impacted by sales taxes, and that's because of the basic economics involved that make sales taxes inherently regressive.
The problem is creative tax application AKA tax evasion. Somehow, rich people manage to pay way below what one would expect in relation to their income.
Great question but you are asking the wrong people as you can see. You won't find serious arguments or alternative views here.
This really demonstrates what I dislike about Lemmy. Too many people who want to inject their political beliefs into every conversation. Supply side economics is a thing. Whether it works or not is highly subject to debate but it is an entire school of thought in economics.
Yeah. I tried and failed to head it off at the pass. There are some good comments in here though.
It's very clear to me that everyone substantially richer than me should be paying the taxes, and everyone else and I should pay no taxes.
This attitude works pretty well at all but the very highest income levels.
Rich people want to get richer. Rich people can afford to bribe/wine and dine/trade favors with the select few who actually write the law.
That is all. Nobody enjoys paying taxes, but the rich are just the ones in a position to actually do something about it.
They don't vote as much. They trust the media telling them that oligarchy is bestest for them. Talking point like Harris wants to raise taxes, and Trump wants to lower taxes ignores the context that those raises/lowers are on the rich/oligarchs, and being lower information/invested voters they get deceived.
Well over 95% of the public does not understand the tax code well enough to pay attention to tax proposals, and many poor/simplest tax filings are given to external services. Scamming the public on tax policy, and especially in electoral propaganda/deception, it is very easy to sell stronger oligarchy power over a declining America as if that will improve America if it is shouted loud enough.
There are a lot more poor people than there are rich people. It's a game of numbers, and a slight increase on the middle class would often bring in more money than a substantial increase on the top percent.
Rich people also have a lot more loopholes they can abuse to pay less in taxes. Closing these loopholes could also potentially/occasionally disproportionately hurt lower or middle class people. They are possible to close, but (A) there's always more to find, and (B) lobbying means there could be political incentives to not close them.
There's also the arguments about raising taxes leading to innovation stagnating, or rich people moving to countries with lower tax rates. I'm not sure how much I buy those arguments.
That said, I'm not condoning these. In my country, I think we need to introduce more tax brackets. A doctor making less than $300,000/yr shouldn't be in the same tax bracket as a CEO making an over $800,000/yr salary before bonuses. But they are in the same tax bracket. That doesn't feel right to me.
I think it's ok for everyone to pay something, and income tax is progressive.
Social security tax is regressive, and sales tax is regressive. So I'd remove the cap on social security, tax unearned income more, and exempt more necessary items from sales tax, if looking to get more from the more wealthy, as income tax is the only one working right - when I was poor my federal income tax was 0, when I was poor with kids I got a little more back than I paid in, now we are doing well, paying lots because we make more at work.
The rich control the laws and they don't want to contribute.
Something I never see mentioned is the risk of "brain drain". If you tax the rich too heavily, there's a possibility that they'll just move to another country with lower taxes, taking their companies (and jobs) with them.
That's not brain drain. Brain drain is when high qualified people leave their country, mostly because of the lack of infrastructures costing them opportunities for studying or working in their respective field.
What you're talking about is capital flight. This is an issue that is systematically raised as a counter-argument by liberals in debates on taxation. The problem is that it is seriously overestimated:
You're equating wealth with intelligence. Bad take.
Not sure if I agree. If you'd do that you'll lose CEO's, not the highly skilled workers that actually do the work..one might wonder howuch would be lost there.
Also, where would they go? Any developed country will have it much, MUCH "worse" for them than the US and the alternative is moving to heavenly places like Russia or China. Good luck with that.
Incompetence at being selfish.
They think they're being selfish, but they fucking suck at it. They think selfish means "I don't want to pay taxes but fuck you you still have to pay I win you lose".
If they were even slightly competent at being selfish, they'd realize in about three seconds that doing things that way makes your town (and more) stressed out and shitty, and you still have to live there, and you can only build walls so high.
And even if we got rid of physics so you could build impossibly tall walls, now you've definitely lost because you had to build them in the first place, instead of being even remotely sensible and building a world where your neighbor would be happy to see you, or thrive peacefully and leave you be.
The "economics" of it are mostly about couching this damning and embarrassing realization in big words so that everybody stops paying attention because they yawned and lost interest.
There is none. It's just avarice.
There are many and they're all bad.
The poor should pay the taxes because "only the little people pay taxes".
You didn't tell us what you meant by "shoulder the burden". Maybe you should have, or at least if you did it would allow more focused answers.
Some people that I have spoken with are fans of a flat tax. They think that income tax should be 10% on everyone, no matter what. They think that is fair.
In order to maintain that belief in fairness, they also need to magically forget about: the ultra rich, passive income, capital gains, the existence of businesses that have a different tax code, and the fact that they probably actually endorse various tax breaks.
On a side note, I think one of the underlying causes of people being willing to try to forget all of these obvious facts of life is the gut assumption that big banks and ultra rich people who are running scams or finding loopholes are doing so in a very complicated way, so there's no chance we could figure out what's happening and stop it. But what forensic accountants point out from time to time is that many of the scams and loopholes are new variations on old tricks. We can understand how they work, but it takes effort, because the names change and the money moves in slightly different ways.
Lord Sauron is a simple working class person just like you and me. He received the diamond mines from his father only after he had proven himself. He knows what is best for all of us.
I'm pretty sure their argument is "because fuck everyone but us who can decide that."
"Because we can."
Don't be fooled, taxes are just a way to extract the fruit of the poor folks' labor and give it to the rich and powerful. Always have been, since their inception. Not just in America, here in the (highly idealized by lemmy) EU I cost my company 3200€ a month, 1850€ go to my bank account and 1350€ to the government, plus up to a 21% vat from the things I purchase. Amazon pays literally 0€ in taxes.