Go ahead raise taxes in the wealthy, I dare you


#1

France’s wealth tax has driven 10,000 people with about 35 billion euros ($41 billion) in capital abroad in the past 15 years, Prime Minister Edouard Philippe said.

The tax – currently applies to personal assets of more than 1.3 million euros – is being changed in the budget presented by Philippe’s government this week. As promised by President Emmanuel Macron in the election campaign, the tax will now only apply to real estate, meaning other forms of wealth such as shareholdings in companies will be exempted starting next year.

“When someone leaves the country because of the wealth tax… collectively all French lose,” Philippe said. And changing that “is something I’ll defend,” he said.

Shortly after the United Kingdom’s latest big tax hike, Great Britain’s millionaires started voting with their feet. And the result hasn’t been pretty for the British treasury.

Raising the country’s top income tax rate to 50 percent has cost the UK 7 billion pounds — about $11.2 billion — since 2010, according to London’s Daily Telegraph newspaper, as wealthy taxpayers have intentionally worked less, deferred income to future years, moved their earnings overseas or left the country entirely.

Whatever the reason, the British treasury has been the big loser.

“Tax paid by the top earners fell from 13.4 billion pounds before the top tax rate came in to 6.5 billion pounds in 2010/11,” The Daily Mail reported on Tuesday.

Prime Minister Gordon Brown pushed the tax increase through Parliament before the 2010 elections swept his liberal Labour Party from power. During the 2009-2010 tax year, more than 16,000 Britons claimed annual incomes of more than 1 million pounds.

After the tax increase, that number plunged to just 6,000.


#2

California is for the moment insulated by perfect weather. Even this will change as the Dem. legislature who gleefully describe themselves as “tax and spend liberals” enact ever more confiscatory laws. Every cycle there are a number of progressive new ideas to steal from businesses, and some even make the ballot. Unfortunately CA has more takers than payers and takers never consider the costs of their handouts, not do Democrat legislators.

We left CA because it is going over a fiscal cliff, and total revenues are less than one fourth the state’s unfunded pension liabilities. Anyone who works harder than the hammock rider class will be punished severely for staying.


#3

There is a reason that so many of those businesses go to Texas… unfortunately they congregate in places like Austin that was very business friendly and then work tirelessly to turn it into the very governance that ran them off in the first place…


#4

Below is a Center for Budget and Policy Priorities piece on the upcoming tax reform process being pushed by the Republicans. It is dependent on the wishful thinking that so much economic growth will be generated that it will pay for itself. This gives a general outline and as details are released we should look at individual items before making any determinations about the basic framework that was proposed.


#5

This thread is all over the map. The original post is about tax structures in France and the UK.

Then we move to California.

Then Texas.

Then the current GOP tax proposal.


#6

I think the original point was universal… tax the wealthiest too much and they will take their money and job creation with them…


#7

Unfortunately most people fail to recognize the reality of taxation and the proof France and the UK have provided.

Money will leave high tax places when it reaches the point of pain for the wealthy.

California raised their progressive state tax to13.3% for the wealthy and some responded by moving to Nevada. Perhaps another 5% will move more money.

The US currently has the most progressive Federal Income tax in the world and a few are leaving with their fortunes. The right wants to lower taxes and simplify the system. The left wants to raise taxes on the wealthy which could easily spark movement as it did initially in California.

In the end, the goal of tax policy is to raise enough revenue to meet the government’s spending requirements while having the least impact on market behavior. However, the US tax code has long failed to meet this goal. We distort market decisions and the allocation of resources with our current tax code which tends to hamper job creation impacting economic growth and tax revenue.

On the other side of the coin, spending which is never addressed.

Have a great day.


#8

Fair enough - that wasn’t clear to me initially. I read the article and assumed the intent was to discuss tax increases within the domain of the EU. That had me doing some thinking on appropriate categorization (i.e., #Europe or #Economics). The I started reading the responses with the context of the EU in mind. No big deal. I try to do my job as janitor here very quietly. Occasionally, I need some help :wink:


#9

Thanks for the context @LouMan I just wanted to make sure everything was in its right place.


#10

And it’s a thankless job which is ignored by most so Thanks for being there and providing the opportunity to communicate sometime unsuccessfully with others.


#11

I think a good description of this bill is going to be “The Reduce Donald Trump’s Taxes Bill:”

  • Kill AMT (all that made him pay taxes in 2005)
  • Kill Estate Tax
  • Reduce tax on pass-through entities (which is how Trump earns money)

#12

Is the the politics of envy I detect???


#13

Of course most small business are structured as passthrough entities… this is precisely the target market. You can be cynical about it if you like but small business needs a lot of relief from state and federal bureaucracy

I think the entire issue around estate tax interesting. You know how long a newly minted after tax lottery millionaire stays that way?.. for most it is only a couple of years… the spending becomes so pervasive that many wind up in bankruptcy court. Of the few who do see the money as seed capital for a business, they invest, they buy, they hire and they are taxed over the life of their business. Either way, that millionaire puts money back in circulation … Neither way does the money sit idle… If a person stuck a cool million in the old ‘richie rich’ home vault in 2000, today the value of that money would have depleted by over 400k… Another example of use it or loose it…

The ATM is, if Trumps tax plan eliminates most deduction, a waste of time… It was designed to prevent the wealthy from itemizing their taxes to nothing… pay attention to what deductions are removed before you complain about removing this paper waster from the tax code.


#14

Kill the AMT.
That also affects people in the middle class as well as upper middle class.
When the deduction ratio to pay gets to high belly up for the AMT.
Obviously you’ve never been a victim.

Kill the state tax.
How many times should a person/family pay taxes on the money they earned?
nothing to leave your heirs?

Reduce axes on pass thru entities.
The current high taxes paid as a sole proprietor keep me from working more often, I work 3-4 months a year and that is more than enough in taxes. It’s less than with 7 employees but still more than the average worker.


#15

Your article from the left wing cbpp really only presents one side (why is that not surprising). The left never talks about reducing handouts, because the left’s central premise is forced wealth redistribution.

Republicans are actually OK with higher taxes- if they are getting something other than more layabouts, for that money. Republicans are happy to spend on infrastructure, happy to help the deserving poor; they are just tired of Democrats paying legions of undeserving poor to collect bene’s and vote D every time.

As a people Republicans are charitable to those who really cannot help themselves; it was Republicans who drove to Texas to help rescue people who were majority Democrats. Republicans do differentiate between the poor who cannot help themselves (deserving) and the poor who are either too lazy or criminal to help themselves. Democrats simply don’t do this sort of thing, they see the poor as lifelong Democrats who will always vote for a handout, and make sure that anyone who questions how some become poor is labeled ‘greedy’ or ‘racist’.

The purpose of this tax cut is to lure corporations back to the US (at least until the Dems regain power)- after all 20% of a lot is better than 35% of a little.


#16

I personally love the headline 1.5 trillion dollars.

Or 150 billion a year.


#17

Check out this video… this is where you learn about the presidents tax plan… these are the people who inform you…

The fact that the president does business in the environment that exists is really a revelation. If every business stopped doing business because it would be unprofitable to bring some aspect of their business back to the US… beyond the many jobs already exported because of stupid tax and regulatory laws… a lot more jobs would disappear. You need the environment first… then business will change… it will not happen the other way around.

I don’t think Trump should loss leader all of his businesses as an inspiration to others to commit suicide (I mean he is already donating his presidential salary for the cause) until the tax and regulatory problems are fixed… then if he still doesn’t move businesses back then people can complain…


#18

All of that talk and not a single source posted.

I am putting in some links to what I think are excellent sources of information on the current tax system in the USA that are important to understand as we discuss the proposed tax reform and get ready to communicate with our legislators. There are a lot of myths out there and it is important to counter them with facts. I am putting in only a few of the sources, but ones that I think are important and reliable - OECD, Center for Budget and Policy Priorities, Citizens for Tax Justice, Wallet Hub, and FRED of the St. Louis Fed.

A common response when it is pointed out that the majority of the tax reduction is going to the rich is to say that the rich pay most of the tax. That is true only if you ignore FICA (social security tax) and state and local taxes. I am putting in a link to a table that shows that the different socioeconomic groups make about the same contribution to total tax revenue as their share of the nationall income. I have followed this over the years and towards the end of the Obama administration it became modestly more progressive, one of the reasons the rich donors to the GOP hate Obamacare so much. Citizens for Tax Justice is definitely liberal, but they stay in the fact based universe.

During the ACA debate there was a lot of talk about winners and losers in Federal revenue versus Federal benefits received. Of course, the non-Medicaid expanding states lost out. I am putting in a link to information on which states are surplus and which are deficit states in Federal taxes paid versus benefits received. Of course, a subtext is that some of the GOP Congress is trying to limit the state and local tax deduction which will hurt blue states more. If you happen to live in a blue state but a district with a GOP congressperson hammer them on this issue. WalletHub has tracked this for years and maybe seem less ideologically skewed than sites such as Mother Jones if you want to communicate with conservatives.

https://wallethub.com/edu/states-most-least-dependent-on-the-federal-government/2700/

When people start talking about how America’s tax rates are high and corporate taxes are high, you need to do a reality check with people and having comparison data from other countries is useful. The OECD has good comparative data. Total taxes as a percent of GDP in the USA are some of the lowest in the OECD countries. As far as corporate taxes, it is also below the OECD average when looking at taxes paid rather than the nominal rate. If one thought that tax breaks would be given up by corporations if rates were lower you can dream on.

It is proposed that estate or inheritance taxes, or what the GOP refers to as death taxes, be eliminated and it is sold as helping small businesses and family farms even though only about 50 small businesses or farms had to pay estate taxes per year. Only 0.2% of estates are subject to the estate tax and the amount of estate tax actually paid comes out to about 1/6 of value of the estate and a married couple’s estate would not be subject to tax until it reaches $ 11 million. Also, most estates are from unrealized capital gains and if not taxed at the time of inheritance they will never be taxed. Since welfare payments are thought to be so damaging to the psyches and work ethic of the recipients perhaps the inheritance tax could be sold as a program to help the chlldren of the wealthy by strengthening their work ethic. The Center for Budget and Policy Priorities is definitely liberal but also stays in the fact based universe.

Finally, the deficit and debt used to be important to the GOP. Reminding your GOP congresspeople of that would be important. The St. Louis Fed has good data that is easy to chart on the debt, deficit and a host of other economic indicators.

Good luck to ALL - particularly to those of you who live in blue states with a GOP congressperson or senator. I think they are the targets.


#19

Tax corporate profits.

A nifty idea until you figure out who really pays corporate taxes.

If you have ever owned, ran a business you know that taxes lis rent, utilities, employs are a cost of doing business and built into your pricing model. The taxes are paid by the CONSUMER. By the people buying the product or services.

Will reducing corporate taxes lower prices? Probably not however prices may not rise, jobs may not be lost, jobs may not b off shored.

It’s really not hard.

p.s. That’s from personal experience as I own a business and I pay no taxes as my customers pay the tax via higher cost.

I do find it humorous when looking at all taxes. A pathetic attempt at redirecting the conversation.
Local taxes support local services.
State taxes support state services.
Federal Income taxes support federals services.

It seems to be fine for people to pay taxes to support their local services.
It seems to be fine to pay taxes to pay for state services.
Somewhere along the line it was no longer acceptable for some people to pay for the largess of the federal government which they demand.


#20

This is why I think that removing the exemption for state taxes is a good one. This shifts the burden of services back to the states where fiscal discipline is a necessary by product of not having a the FED in you business model… Of course states that are already robbing people are squealing the most about this… As you say… rarely when people talk about taxes to they ever talk about the expenses that ‘require’ them… @DieHard wants to skim over the fact that we do not get good return for our investment and current programs do cause state dependence… Shifting that focus back to the states is a good start on having that dialogue.