And then Person C worked really hard, saved a bunch of his money, made some smart investments, and has amassed a savings of $2,000,000 in stock interests. Their investments appreciate at 5% and they liquidate that appreciation annually for an income of $100,000, which they use to fly to various countries and build houses to help underprivileged families.
That person also gets to keep an extra $13,000. That’s because tax rates are based on objective measures, and not based on a value judgement of who is lazy and who is generous and who comes home tired after work and who spends time helping his kids with homework.
Banzai
2876
Sure, person B and C both need to pay more. Totally objective. No values judgements. They have more, so they should pay more. Simple as that.
KevinC
2877
Seems like a distinction without a difference to me. My money got taxed on the way in and it gets taxed when it goes out. It doesn’t matter that it’s for the item vs for the money, it’s all dollars out of my pocket.
Yes, and wealth tax would also go towards the costs of a functioning society which supports everything we do: infrastructure, education, medical care, etc. etc. Whatever point you’re trying to make is missing the mark for me.
There most definitely is. It’s all the government and infrastructure that gives US dollars meaning as a currency.
Timex
2879
If you’re taking those loans out to pay your bills though… there’s no profit. That’s an expenditure.
You guys are acting like it’s just a magical money making machine, and that’s not really how it works. Even if you were to take out a loan to pay off the original loan (because you actually spent that original loan to pay bills and buy yachts and crap), then you are still ultimately in the hole… and now you need to pay back THAT loan.
Ultimately, unrealized wealth is just that. It’s unrealized. You can’t spend it. You can potentially use it as collateral, but that’s not the same as realizing it as liquid wealth that you can then spend on things (objects, power, etc.).
Yeah man, unrealized wealth is just an illusion and doesn’t actually help the parasite class leech forever off of society, living lives of obscene luxury while lighting the planet on fire and immiserating billions.
It’s clear as day.
It’s helpful to know that Bezos basically lives the life of a pauper, because there really is no way for him to take advantage of his wealth. I feel so much better!
(Again, the question for me isn’t whether the wealthy can avoid realizing any gains, it’s whether realizing some gains has any effect on the inexorable growth of their fortune.)
All this talk makes me wish for something simpler.
A 80% to 100% inheritance tax on anything valued of 1 million is a good start. Followed by extreme limits on what can be out into a trust.
Honestly, the idea of inheritance seems the antithesis of the America ideals of pulling yourself up by the boot straps anyway. We want to have the best and brightest get to the top, working hard and all that, and I think the only way to do it is to level the playing field, which I think an extremely high inheritance tax can help achieve.
Money is the currency used to pay taxes, but you’re getting taxed on the item, not on the money.
For example, if I make $30,000 in a year, I’m taxed based on the total amount of money I received. The tax calculation is based on the amount of money.
But if I spend $30,000 in a year, I’m taxed based on the items I buy. If I buy a car for $30,000, then I pay sales tax on that purchase. If I spend $30,000 on cigarettes, then I pay sales tax and cigarette tax. If I spend $30,000 on gumballs, then I don’t pay anything in tax. I’m paying taxes based on what I buy, not on the amount of money itself.
I mean, you’re right. You got taxed when you earned the money, and you got taxed again when you spent it.
Yeah, it’s really horrible how Jeff Bezos employs 575,000 people and provides convenient shopping and cheap shipping for millions more. When writers can make a book, post it to Amazon without having to go through a publisher, and then they make money when that book is purchased electronically so that someone can immediately read it on a device that doesn’t require wasteful printing on paper, I just think about how Jeff Bezos is just leeching off society by not doing anything to push society forward and improve anyone’s lives.
I’m sure it’s not lost on you that those 575k people are the ones generating the value and not Bezos himself.
Right, but those 575,000 people also need a company to provide the structure. If those 575,000 left the company tomorrow and started their own company, it would be years before they could build up another company to provide the same kind of service and generate that same value (if they ever got there at all).
It’s also not lost of my that those people are getting paid even if they ultimately don’t generate value for the company at all. For example, let’s say that Amazon wanted to create their own competitor to the iPhone, and they spent years developing and manufacturing it, only to have it fail spectacularly in the market. That theoretical phone ultimately generated $0 in value for the company, but all of the hundreds or thousands of people who worked on it got paid for multiple years of work.
I don’t know about anybody else, but I’m pretty confident that if Bezos had to pay a 2% wealth tax, he’d go right on doing what he’s been doing, ‘generating more wealth’. It’s not like we have to choose between having Amazon and taxing Bezos. We can do both!
KevinC
2890
As I said, a distinction without a difference. So what? You keep pointing out the difference but not why it should matter or how that explains why we can’t (or shouldn’t) have a wealth tax.
Anyway, not trying to be a jerk but I feel like this merry-go-round has been going on for a while (this thread, I don’t mean interaction between you and I) so I don’t think there’s point in continuing it.
Because there’s a general concept that money is not taxed twice for the same transaction. So if I receive a $30,000 salary and taxes are taken out when it is received, then I don’t have to pay taxes again on that same money just for having it. Or if I pay $100 for a car registration, then that $100 is deducted from my taxable income, so I’m not paying taxes on the money I used to pay taxes. Same thing with property tax: If I pay $1000 for property tax, then I don’t also pay income tax on that money.
The reason I’m making the distinction is because people generally don’t like the idea of money being taxed twice. So if I earn $30,000 and pay taxes when I receive it, I don’t expect to pay additional taxes year after year on that money. A wealth tax would be taxing the same money twice (or more): once when it is earned, and then annually after that.
I’m just trying to clarify why people would see having income taxed twice as distinct from income tax (when the money is received) and sales tax (when an item is purchased).
Property tax. We’re 500 posts in and that idea keeps leaking out of your brain.
KevinC
2893
Do people like being taxed once? :)
No you wouldn’t, because someone making $30,000 a year doesn’t have $30,000 in wealth. It goes to rent and food and it’s gone. And the rent covers the mortgage on a property that is taxed and the purchase of the food is taxed.
I’m just boggled that people keep saying cars aren’t taxed, but I’ve been assessed personal property tax each year on my vehicles when I lived in AR, MN, and NC…
