[Buttons840]

So lets raise taxes now and pay it off. Who should we tax? Should we squeeze blood from stones and try to get the poor to pay more taxes, or should we tax the wealthy?

Who am I kidding. The current administration showed us--what was it? last week?--that they prefer cutting taxes for the wealthy and increasing the deficit.

Republicans ALWAYS increase the deficit. Democrats usually do, but not always.

It looks like we'll probably let the generation that created this mess retire like normal, and instead try to fix it by making their children and grandchildren work until death.

[RickJWagner]

You can’t tax the rich enough to pay off the debt. They already pay the overwhelming majority of taxes.

One company alone— Berkshire Hathaway— paid almost $27 Billion in taxes for 2024. That’s about 5% of all corporate taxes paid.

To really make money, you have to tax a bunch of smaller fish, not a handful of bigger fish. You need big numbers.

That’s politically unpalatable, especially for Republicans. ( Though Democrats seem to have no appetite for it either. )

In the past, Republicans would cut taxes ( popular ) while not spending as much ( unpopular ). Democrats would not cut taxes ( unpopular ) while spending more ( popular ).

Sadly, today both parties are acting like undisciplined parents. Everybody wants to give out the treats ( spend big ) while nobody wants to earn the paycheck ( raise the taxes ). It’s a bipartisan formula for disaster.

[Buttons840]

> You can’t tax the rich enough to pay off the debt. They already pay the overwhelming majority of taxes.

Yes. This means that if we double the taxes on the wealthy we will roughly double our total taxes collected. A neat trick.

It's true that the top 50% pay 97% of taxes, but that's not the slam dunk you think it is, because the top 50% have 97.5% of the wealth (see sources).

Your suggestion to tax the poor is stupid, because the poor have nothing more to give. Even if we could extract 10x the amount of taxes from the poor, it would barely be a blip. If the bottom 50% paid 10x the taxes, then they'd be contributing, what, like 15% of all taxes? We're going to take from the poor, take food out of their mouths, for 15% more taxes? Like I said before, its like trying to squeeze blood from a stone, there's just nothing there to squeeze.

https://taxfoundation.org/data/all/federal/latest-federal-in... https://usafacts.org/articles/who-owns-american-wealth/

[fsckboy]

>Yes. This means that if we double the taxes on the wealthy we will roughly double our total taxes collected. A neat trick.

no, you won't, people change their financial decisions in the face of taxes. increasing taxes will slow the economy, bringing in a change of party in the whitehouse and congress, and taxes will be lowered again. high taxes don't work, and people don't like them.

>It's true that the top 50% pay 97% of taxes, but that's not the slam dunk you think it is, because the top 50% have 97.5% of the wealth (see sources).

taxes are on income, not wealth. the reason those percentage numbers and the wealth numbers come out the same is because poor people pay small or zero tax so it's as if their income is not counted

higher taxes on the wealthy will not benefit the poor, their taxes don't get lowered. However slowing the economy does hurt the poor

[Buttons840]

Taxes are on whatever we want to tax.

Instead of taxing income or spending, tax wealth. Will the wealthy make themselves less wealthy in order to avoid a wealth tax? I don't think so. Tax the top 1%; even with a wealth tax they'll still be able to afford multiple homes and a yacht--hell, there are people who can afford two homes and a yacht and don't even fall in the top 1%, so people will still be able to have plenty without ever actually paying a wealth tax.

[nradov]

There are some theoretical advantages to a wealth tax but in practice it would be extremely difficult to implement. The issue is that much wealth isn't cash in a bank account or holdings of publicly traded securities but rather equity in illiquid private investments. And some of that is offshore, so would you only tax wealth held in the USA by American citizens or would it apply more broadly?

Like one person I know is a German citizen living and working in the USA with a permanent resident visa, and she owns some forestry land in Canada. Should that land be subject to a wealth tax and if so how would you value it? Does the IRS then need to hire an army of bureaucrats to calculate valuations on those assets?

[Buttons840]

Tracking wealth seems hard. Tracking income seems hard. If we can do one, why not the other? Is tracking wealth harder than tracking income?

[fsckboy]

the stock market returns on average 7%. a 50% tax on on income means the stock market effectively returns 3.5%

a wealth tax of 1% reduces the return on the stock market for that year to 6%, but it compounds onto follow-on years; if you "wealth tax" every year, that effectively lowers the return on the market very dramatically. If the returns on the stock market are lowered dramatically, you will see a huge slowdown in the economy.

the point of this is, there isn't really such a thing as a "wealth tax", it's just a "multiplied income tax". it might be different in your head, but you're wrong, it's not different in reality. you are welcome for the free education.

the question is, why is the only thing you can think of "take money from people who have it". that's a zero sum game, no wealth creation. What makes market economies so wonderful to live in is their wealth creation.

Why does Elon have so much money? wealth creation. Here's why: without Tesla, the roads would not be empty of cars, people would just buy different cars. There are other car companies, GM, Ford, Nissan, Honda, Volkswagen, etc.

Tesla is not taking your money. Tesla is offering an alternative car to buy with your money. With no Tesla, you would plunk your money down on one of those other brands, but if you like Tesla's better, you buy one of those. That creates happiness, you are happier spending your money on a Tesla than on the alternatives. That's the money that Elon is collecting, GM's money and some extra for your excitement/satisfaction. And he deserves it because he created it and you are happy that he did. You would not be richer without Tesla. You would buy a different brand, and be out the same amount of money, and enjoy your car less. So when you think "we need to take Elon's money" you are essentially saying "I wish Elon didn't exist and I want the crappy Nissan for less money". That's a spiral into the ground because the other company's don't put as much value into their cars as Tesla and if you paid them less, they'd produce less.

If your response to this is "I would never buy a Tesla, I don't even like them", then I will just shake my head sadly at your inability to learn even more.

[Buttons840]

Most of your arguments are not applicable for the simple reason that 99% of people would not have a wealth tax under my proposal.

I suggested a wealth tax only on the top 1%. (Or on the top 0.1% might work better, the specific number isn't the main point.)

The top 1% didn't get there through average stock returns, so the stock arguments are not applicable. Most stock participants would not have a wealth tax.

One of the major themes of this entire thread is that retirement age will have to be raised, with some even saying that any retirement at all is unusual and unsustainable. So do please tell me more about market economics and their wealth creation. Why are we regressing in our market economy? What does it mean when the things that happen in a successful market economy aren't happening?

As for Elon. Even with my proposed wealth tax, he would still be the world richest man. Especially if he continues to run successful businesses. A wealth tax doesn't immediately erase all the wealth of those it applies to.

[missedthecue]

It will probably have to look something like western Europe with massive across the board tax increases. I make $60k a year in the USA and my tax rates are about 12%, with no VAT. They'd probably need to look more like France, where a $60k income is hit with a 42% effective tax (adjusted for progressive rates) before 20% VAT is paid at the store.

[fsckboy]

vat is simply corporate income tax, it's a tax on "value added", i.e. profit or income. I don't know in europe whether that is on top of other corporate income tax or not.

[MattPalmer1086]

VAT is not corporate income tax, and it is not levied on profit or income.

As a business, you can deduct VAT that you had to pay to others from the VAT you charged your customers, and you only pay the difference.

So the only people who end up paying are the final consumers. It is essentially cost neutral to a business - you just have to account for it properly.

UPDATE: in the UK, at least.

[lenerdenator]

And they then pass that expense off to the consumer, because praise be to the shareholders.

[Buttons840]

Companies can just raise prices without consequences? Is that free market competition in action?

Snark aside. I've always heard the idea was that free markets and competition would drive down prices, and that if a company was to just raise their prices, they would actually lose money because people would buy from a competitor with better prices. Turns out companies can just raise prices though. What does it mean when the things that happen in a healthy free market aren't happening?

[lenerdenator]

> Companies can just raise prices without consequences?

Well, when they have a monopoly, yes, yes they can.

> Is that free market competition in action?

No.

[WalterBright]

Tax cuts for the wealthy were not in the BBB.

[FreakLegion]

The BBB increased the QSBS exclusion and gross asset value limit by 50% and quadrupled the SALT deduction, among other things. I guess you could argue the meaning of "for the wealthy" here, but it would be hard to do in good faith.

[WalterBright]

> it would be hard to do in good faith

QSBS is capped, and the SALT deduction goes away with increasing MAGI. They're targeted at the upper middle class, not the wealthy.

The "S" in QSBS stands for "Small" business.

The previous limits were fixed, and this change seems to be adjusting it for inflation. It's been around since 1993. An inflation adjustment is not a "cut".

Even so, as I'm sure you're aware, these two items are not what people mean by "tax cuts for the wealthy". If you ask anyone (other than a tax accountant) what a QSBS deduction is, you'll get a blank stare.

[FreakLegion]

QSBS is only capped for sweat equity. My Series A lead gets a $200m exclusion. With the new $75m asset limit, the Series B lead will probably triple that.

Things like QSBS and carried interest are absolutely part of what people mean by "tax cuts for the wealthy".

[WalterBright]

> Things like QSBS and carried interest are absolutely part of what people mean by "tax cuts for the wealthy".

No they aren't. Nobody mentions them on the news/editorials, nobody's heard of them but you and I. What people meant is the marginal tax rate.

I am not a tax accountant, and never heard of them before your mention. I spent some time googling it, and it looks like the limits were adjusted for inflation.

[FreakLegion]

Yes, they are.

You're wrong that nobody's heard of these things and that they aren't in the news. Pick up the NYT or Fortune or any moderately substantive source. These issues have been discussed all over for decades, and they came up again repeatedly in the context of the BBB. QSBS and SALT came up because of their expansions, and carried interest came up because Trump promised to eliminate it but didn't. I didn't go digging for this information. It was handed to me.

More importantly you're wrong that people only think of tax cuts in terms of marginal rates, and that they need to know about specific schemes like QSBS and carried interest to include them in the broader idea of tax cuts for the wealthy. People have a general awareness that such schemes (popularly: "loopholes") exist and benefit the wealthy. The names of the schemes and how each one works don't matter. People know they exist and what they amount to.

So: The idea that people don't know about specific tax schemes used by the wealthy, and therefore don't think of these schemes as tax cuts for the wealthy, is wrong, and the idea that people need to know about specific tax schemes used by the wealthy in order to think of those schemes as tax cuts for the wealthy is also wrong. The first is wrong empirically, and the second is wrong logically.

[maxerickson]

If the baseline is whatever you say it is, what's the point of discussing it with you?

[WalterBright]

The baseline is the current tax rate.

[maxerickson]

The current tax rate for 2026?

[WalterBright]

The tax rate for the wealthy is the same in 2026 as in 2025 as in 2024.

[maxerickson]

Oh? And what would they have been without a change in the law this year?

[Buttons840]

Are you saying that extending that Trump tax cuts is not a tax cut, because it's only extending and maintaining the status quo?

Or are you saying the Trump tax cuts never benefited the wealthy at all?

[WalterBright]

> Are you saying that extending that Trump tax cuts is not a tax cut?

Of course. It's disingenuous to claim that not raising taxes is a "cut".

It's the same lie as claiming a reduction in a spending increase is a "budget cut".

There are actual tax cuts in Trump's bill, but they don't apply to the wealthy.

[Buttons840]

Can we agree that the taxes on the wealthy would be higher if the BBB was not passed?

It's not a "cut", it's just that the BBB makes taxes lower for the wealthy than they would have been without the BBB <eyeroll>.

[WalterBright]

The BBB repealed the tax increase, yes. That's not a cut, because the increase didn't happen.

[Buttons840]

So we agree that Republicans did things that resulted in the rich paying less taxes than they would have otherwise.

[ac29]

They cut taxes for the years 2026 and later. The TCJA tax cuts expire this year.