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Millionaires: Raise Our Taxes To Address Poverty, Fix Roads (go.com)
jones_supa writes from an article on ABCNews: More than 40 millionaires, including members of the Rockefeller and Disney families, are asking to have their taxes raised to help address poverty and rebuild failing infrastructure. The millionaires wrote a letter to Democratic Gov. Andrew Cuomo and top New York lawmakers proposing new, higher tax rates for the top 1% of earners in the state. The letter says that additional revenue would help addressing child poverty, homelessness and aging bridges, tunnels, water pipes and roads. "As New Yorkers who have contributed to and benefited from the economic vibrancy of our state, we have both the ability and the responsibility to pay our fair share," the letter states. "We can well afford to pay our current taxes, and we can afford to pay even more." The tax plan, known as the one-percent tax plan, was worked out in conjunction with the Fiscal Policy Institute, a left-leaning economic think tank.
What's stopping them from donating more of their wealth to address child poverty, and homelessness right now? The government already encourages that type of behavior. Why wait for tax legislation? Maybe these 40 millionaires and the left-leaning Fiscal Policy Institute want to force their morals on the rest of the 1%.
Then they shouldn't say "We can well afford to pay our current taxes, and we can afford to pay even more." They should make it clear that they also want to take from other people who have not signed on to their cause. But they never do. It's always this altruistic "Oh, we can pay more." So yeah, your answer goes in the "non-responsive to the actual situation" bucket.
If someone holds stock for 20 years and it goes from being worth $100,000 to $20,000,000 there is nothing to tax.
Any more than you can tax someone on their home value increasing or someone holding an asset that becomes more valuable with time.
Plus rich people are smart, you don't cash in the stock --- you do things like take a loan against the stock. Or you don't sell a building --- you sell the company that owns the building --- thus no real estate transaction occurred.
Corporation account and wealthy people accounting is in an entirely different dimension.
As a person who has a company I have perfectly legal (I declare everything) ways to completely avoid taxes paid by you little people. Whilst you get a bonus when you have extra performance, I control when my company pays me and simply put it off to a year when I have less earnings. The status of a Koch brother is completely different even my superior status. He has trust funds and international citizenship and can, easily, spend any given year as a resident of the United Arab Emirates with it's zero tax rate. Basically he chooses how much tax he pays and he chooses to pay nothing.
This is not about lack of money. It's about what's fair. You drive one little compact on the road. A rich guy like Gates has many trucks driving on the roads for him, just delivering the pharmaceuticals he has patented. Most of what the state spends it's money on; the police; the military; defending the rich; building infrastructure for the rich; is something that nobody should be donating to. These same people, who get most of the spending pay nothing. The need is not for the worth to donate. The need is to force the scrounging rich to pay up.
That depends upon how you define the 1%. If you use top 1% of "earners" where earners means earned income subject to income tax then the majority of the top 1% actually do make most of their money from their paychecks. From the very beginning nearly 8 years ago this whole sounding the drums to raise income tax on the "top 1%" has been a ploy by the wealthy investor class to raise taxes on highly paid upper middle class professionals rather than themselves.
So if I'm a Brit who advocates to change to right-hand traffic, but still drive on the left while the law has not changed, I am hypocritical?
Poor analogy. You confuse the mandatory with the optional.
[I first wrote this in 2012, so the "In the last year for which data is available" is wrong, and I could take the time to update the numbers, but the picture painted will not change...]
In the last year for which data is available, 2008, the highest marginal tax rate was 35%. This rate was paid on AGI above $357,700. Certainly someone with AGI over that value is in the well-to-do category, but may not be "millionaires and billionaires" (OTOH Mr. Obama seems to think income of $250,000 equates to "millionaire", but this is immaterial to my point). According to the IRS, the number of returns that were in this highest marginal rate was 971,510. So there's nearly a million households in this country that are, at least by the IRS bracket definition, "rich". Not too shabby, it seems the USA is indeed the land of opportunity.
According to the IRS, the cumulative amount of AGI subjected to this highest rate was $622,765,389,000, so let's round up to $622.8B. The taxes generated on this money is therefore $218B (the IRS reported $217,967,886,000). The overall effective rate for these returns (taxes paid / income) was 28.9%.
Let's assume for a moment (no matter how unrealistic the assumption is) that no one affected would change a lick of their income-generating behavior as a result if we raised the top marginal rate to 100%. How much revenue would that generate? Why, all of $622.8B, if no one modified their behavior in any way that affected their income and tax impact. That is, it would generate an additional $404.8B in revenue relative to the current 35% bracket.
If you added that $404B to the revenue pot, our deficit this year would still be over $1T...
There are two types of rich people: The economic value creators (Warren Buffet, Bill Gates, etc) and the lucky ones (Wall Street, Koch Bros).
The former don't care about higher taxes precisely *because* they generate economic value. If you take their money, it will go to teachers, police, etc, and will eventually filter through the economy to someone who wants to buy more Shaw carpet or Acme brick. What the tax man taketh from Warren Buffet, a slightly wealthier poor and middle class give back.
Meanwhile, if you're "lucky", if you got your fortune because you were in the right place at the right time, knew the right hands to shake and palms to grease, taxing them takes away the money forever. It isn't coming back.
So when you see the rich say we need higher taxes, it's usually people who actually generate value, and the ones who complain about higher taxes are usually the leeches on society.