[candiddevmike]

My hotter take: we're in an economic death spiral. There isn't enough juice that can be squeezed short of mass wealth redistribution to reinvigorate the economy, and what is out there is locked up in stocks that don't translate to revenue. Slashing rates will just skyrocket prices and over inflate our monetary supply, and further tax cuts will only whittle away what's left of government services and social safety nets. Companies are going to start collapsing in a domino effect as liquidity dries up and contracts get cut.

[hmmokidk]

Massive wealth redistribution is just another word for Taxes.

When we taxed the rich we were happy. It’s literally all we gotta do.

[garciasn]

https://fred.stlouisfed.org/series/FYFRGDA188S Federal Receipts as a Percent of GDP measures total government revenue relative to the size of the economy, serving as a standardized way to track the federal tax burden over time.

Although the top marginal tax rate in the 1950s indeed exceeded 90%, federal receipts hovered around 17% of GDP; this was nearly identical to current levels, because loopholes and high income thresholds (roughly equivalent to $2MM for single/$4MM for couples) meant almost no one actually paid that top rate.

The effective tax rate for the top 1% was closer to 42% rather than 90%, demonstrating that extremely high statutory rates on paper do not necessarily generate proportionally higher government revenue.

[rich_sasha]

The total tax intake is fairly unambiguous. Personal tax bill for the vast majority of people is also quite clear. But when you get to the top 0.1% or whatever it is, things like "income" and "tax" get ambiguous. I suppose a lot of the ultra rich don't have much earnings, at best cap gains, and even that can be offset, boxed and off-shored ad nauseam.

Maybe instead of looking at the ultra rich we could look at what GDP fraction the "bottom 95%" contribute to the tax burden - is that more or less than before. Not sure where to look for this data but sounds like a nice little exercise.

[gruez]

>But when you get to the top 0.1% or whatever it is, things like "income" and "tax" get ambiguous. I suppose a lot of the ultra rich don't have much earnings, at best cap gains, and even that can be offset, boxed and off-shored ad nauseam.

But the denominator isn't "income", it's GDP. That's far harder to "offset, boxed and off-shored ad nauseam".

[rich_sasha]

Sure - but not at an individual level. If you're asking, how much tax are the rich paying now vs before, as a % basis, you need an individual numerator and denominator.

Maybe the total tax take now is 17% of GDP, same as before, but when measured correctly, the overall tax rate for the super-rich has gone down, and for the plebs gone up.

To even identify who the super-rich are in this exercise, you may need to be careful with the definition of "rich". If eg you go for highest income earners, you might find upper middle class people instead, with the super-rich having no supposed income as such.

[milesvp]

Raising taxes should never be seen as a way to raise revenue. Even if the Laffer curve has come under attack, there is still some profit maximizing rate which I’m positive most modern countries are beyond both at a static rate and at a growth and future revenue maximizing rate. No we don’t tax at this point to increase tax revenue. We do tax to shape what society looks like.

Right now society doesn’t look very good to so many people in the US it’s almost hard to talk about. Job growth is literally people saying, “hey, tomorrow, I can see it look better. We can spend time and resources to create something we all want more than today.” When job growth is low, that vision must also be low.

Taxation can turn that around in an industry. It can turn that around in aggregate. It does thay by both signaling to players, and by changing the game tree payout structure.

I think much of the taxation conversation right now is unfortunate because it keeps getting couched in terms of tax brackets, and that is almost a strawman at this point (even if many people think it’s important). I would say we need to tax the 1% differently. For instance, stock buy backs are currently a hugely distorting effect on the world economy. You can start by greatly taxing that.

The real thing people are talking about when talking about taxing the 1% isn’t just about tax brackets, it’s more about how taxes don’t materially effect people once they reach certain thresholds. It’s the same fundamental problem with traffic tickets. They are not proportional to general wealth so that means it’s a set of laws that apply less and less as one gains wealth which not only feels unfair, it is arguably a corrupting influence undermining the rule of law.

[garciasn]

I am choosing not to get involved in a discussion about tax policy miniutiae as I am not an expert in any related way; instead, I wanted to provide factual context to the oft-repeated 'America was better in the 1950s due to the tax rate on the rich,' claim so folks might be able to better understand what they're attempting to say.

[kiliantics]

It's about how the taxes are spent too. If the government cuts welfare and gives handouts and subsidies to special interests, that is not an effective redistribution.

[gilbetron]

It would be interesting to see the same graph broken down by wealth (preferably) or income quintile. Maybe higher tax rates don't mean more tax income, but it does mean more wealth redistribution.

[iamtheworstdev]

no one pays the top rate today either. I've spent a large chunk of my adult life in the top 5% of income earners and I've never had an effective tax rate over 17% that I can recall.

[loeg]

Your experience as a 95 %ile earner does not negate that people in the 99 %ile of earners pay the top rate. (I paid the top rate last year.)

[NickC25]

and the effective tax rate today for the ultra wealthy is 0.

Shit, a few years ago Jeff Bezos got a tax credit for his kids.

Think of how absurd that is. Jeff Bezos, the founder of a multitrillion dollar corporation that already receives billions in government contracts and subsidies, who owns a $500m yacht and a multibillion dollar real estate portfolio, asked for, and was given, a tax credit for his adult children.

[DetectDefect]

It really is this simple and this chart of Net Worth Held by the Top 0.1% demonstrates it well -

https://fred.stlouisfed.org/series/WFRBLTP1246

[bpt3]

That chart seems to demonstrate that there was a lot of inflation in the early 2020s, which I assume is not your point.

[daemonologist]

Here's one for share of net worth: https://fred.stlouisfed.org/series/WFRBSTP1300

(Note: I am not GP, and am not necessarily saying you can draw conclusions from this one chart, just that the change in net worth cannot be attributed solely to inflation.)

[bpt3]

You can argue it was primarily due to inflation (changes in the economy can never be attributed solely to any one thing).

The upper 0.1% largely owns things that are relatively safe from inflation (like expensive real estate in areas where increases in value have exceeded the rate of inflation for decades) while the lower 50 - 80% does not.

It's effectively impossible to prove definitively, but I find it hard to believe it's a coincidence that the share of wealth held by asset-heavy individuals shot up at the exact same time the money supply increased significantly, especially given that lower class wages were actually increasing faster than inflation and upper class wages at the same time.

[onraglanroad]

You thought that graph mirrored inflation? That $4 in 2000 was $24 today?

I find that difficult to believe.

[thehumanmeat]

My hotter take: We've been in a depression since '08 https://fred.stlouisfed.org/graph/?g=cMV

[lotsofpulp]

What if some of the population is experiencing a depression, some are in a recession, some are in stagnation, and some are experiencing an expansion?

[tonyedgecombe]

I don’t know about the US but growth in the UK has been anaemic since the financial crisis.

[gruez]

>excluding current transfer receipts

Why was this metric chosen? What does showing that current transfer receipts grew show we're "in a depression"?

[FireBeyond]

Yeah, there's absolutely a reason that we're not releasing a lot of key economic numbers and it's not because the government needs to clean house of people determined to sabotage things, and it's not because the numbers are so amazing that we have the "best economy the country has ever seen", either.

[NickC25]

this needs to be shouted from the rooftops. something drastic needs to happen or else we will be the harbinger of a large-scale societal collapse.

[UncleOxidant]

> we will be the harbinger of a large-scale societal collapse.

The harbingers are already here and have been for a while now. Harbingers are signs that things are breaking down. More like "or else we will have a large scale societal collapse".

[hackable_sand]

I've been saying this since last year too.

Sincerely, software developer turned fast food manager.

[saubeidl]

My even hotter take: This was always the inevitable result of shareholder capitalism.

The only outcomes left are either unchecked descent into fascism as oligarchs consolidate power and finish their government takeover before their current power base falls apart, or a successful socialist revolution.

This is what it's always been leading to.

[mrguyorama]

>This was always the inevitable result of shareholder capitalism.

Just capitalism. There's no actual or necessary distinction about what shape that capitalism takes.

A system where getting more money means you have more opportunity to generate more money by itself has all the feedback loop you need to consolidate over time, generate monopolies, and end up here.

Competition just doesn't happen in a free market. Actually competing, and trying to win marketshare or mindshare that way is too expensive, as there are much simpler and cheaper ways to impact a market.

Competition requires a fair market. This was fully understood by both Roosevelt trust busters, and both Teddy and FDR made big talk about "I'm not trying to kill business, I just want them to compete because that's such a force multiplier".

It doesn't take a socialist revolution. All it takes is like a gentle sprinkling of welfare and a fair and competitive market.

Granted, we have a lot of work to make the current market competitive. We've allowed so much consolidation that we would probably have to actively break up companies, we would have to nullify lots of contracts and IP rights and reduce the power a EULA can hold over you. Interoperability is necessary for competitive markets so we would have to roll back the DMCA anti-circumvention language. Improved customer rights would also help.

[SAI_Peregrinus]

> Competition requires a fair market.

Adam Smith's term in "The Wealth of Nations" is "freely competitive market". The "free market" bastardization came much later.

[b00ty4breakfast]

there is a saying that fascism is capitalism in crisis. I don't think this reactionary crisis response is restricted to capitalist economies or fascism. though. We can see this, for just one example, in the various persecutions of Jews in Europe during the middle ages any time there was a crop failure or a plague or some similar disaster.