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Oh, ok so it's the government's place to steal money from people if they decide that person doesn't really need it? Who appointed the government the judge of what someone else needs? ....
Yes, it IS the government's place to confiscate money. It's in the Constitution. See the 16th amendment.
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Originally Posted by JonathanLB
It's not a question of "what's good for society,"....
That's exactly why the government passed the 16th amendment: to confiscate and reallocate money to make America a better place. Ideally tax policy is made to optimize economic activity and to keep the economy from becoming unbalanced.
I do not understand why people insist that such money is 'sitting idle'. Is it in a mason jar buried somewhere?
No. There are trillions of dollars in liquid accounts of billionaires, hedge funds and corporations. "US non-financial companies' cash and liquid investments will rise about 5% to $1.9 trillion at the end of 2017" -- Moody's.
Two facts prove there is a glut of excess cash:
The velocity of money is at historic lows (chart). Despite the fairly good economy, money is not circulating as fast as it used to. The only explanation for this is there's a good chunk of cash sitting idle in accounts, not moving; only a portion of available cash is actually circulating today.
Low interest rates with full employment. Why are rates so low in a good economy? When cash on hand exceeds investment needs, cash goes into money markets and other short term bond instruments. Rates are low because when short term bonds go to auction, there's a crowd of investors and institutions with tons of cash outbidding each other, willing to accept low interest rates. Conversely, when capital investment is "hot" and cash is put to work, there's little interest in investing in bonds, so interest rates go up.
This whole subject is a ridiculous discussion. EVERY billionaire would /could skirt this tax by setting up a foundation. They wouldn't be affected at all. Most of them already do this anyway.
"[there is] evidence that extreme wealth has a corrosive effect on the economy. Wealth inequality places immense resources in the hands of people unable to spend it productively, and keeps it out of the hands of those who would put it to use instantly..."
This is exactly what I posted earlier... that the global savings glut, where ultra-wealthy individuals and institutions have mountains of excess cash sitting idle and doing nothing, is grossly unproductive. We need a wealth tax to siphon up dead cash to put it to productive use.
Why not tax a billionaire? If someone has $2 billion, and taxes knocks it down to $1.5 billion, will he or she even notice? Their lifestyle won't change, they can still buy whatever they want and have every need fulfilled.
High-Income Americans Paid the Majority of Federal Taxes. In 2014, the bottom 50 percent of taxpayers (those with AGIs below $38,173) earned 11.27 percent of total AGI. This group of taxpayers paid approximately $38 billion in taxes, or 2.75 percent of all income taxes in 2014.
Yes, it is. It's not really an economic discussion, but a look at who we admire, and why, and what those people do to warrant any acclaim. Most extremely wealthy people are about as admirable and likeable as the grumpy old fart who runs the local wrecking yard, and "wanting to be rich" is an infantile desire for people who probably haven't grown out of wanting to be a fireman or astronaut, either.
So if we're no longer goggled by people with obscene piles of wealth, it's all good.
"[there is] evidence that extreme wealth has a corrosive effect on the economy. Wealth inequality places immense resources in the hands of people unable to spend it productively, and keeps it out of the hands of those who would put it to use instantly..."
This is exactly what I posted earlier... that the global savings glut, where ultra-wealthy individuals and institutions have mountains of excess cash sitting idle and doing nothing, is grossly unproductive. We need a wealth tax to siphon up dead cash to put it to productive use.
"Taxes rarely, if ever on the productive" leads to huge concentrations of wealth, and almost by the very nature of things, huge concentrations of power in a few hands - effectively an oligarchy of the rich (a.k.a. plutocracy). Without high taxes on the wealthy, especially the VERY wealthy, societies become an informal aristocracy. One without formal titles, to be sure, but an aristocracy nevertheless - similar to the antebellum South (even without the slavery issue) or Latin American areas without formal slavery.
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Originally Posted by Elliott_CA
Why not tax a billionaire? If someone has $2 billion, and taxes knocks it down to $1.5 billion, will he or she even notice? Their lifestyle won't change, they can still buy whatever they want and have every need fulfilled.
Why not? Maybe because Gordon Gecko did figure out how to water ski behind 100 yachts simultaneously. Or perhaps somehow billionaires physiology transforms from needing 2000 calories/day to 2 billion - unless I miss my guess.
"[there is] evidence that extreme wealth has a corrosive effect on the economy.
No, there is no such evidence.
Quote:
Originally Posted by Elliott_CA
Wealth inequality places immense resources in the hands of people unable to spend it productively
A common misunderstanding among those who never passed Econ 101 is that wealth is to be "spent." They think of wealth in terms of consumption items rather than investments.
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Originally Posted by Elliott_CA
..and keeps it out of the hands of those who would put it to use instantly..."
Of course, wealth isn't "kept" out of anyone's hands.
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Originally Posted by Elliott_CA
This is exactly what I posted earlier... that the global savings glut
Savings = Investment. Investment raises the GDP of Earth. Seriously - you're not suggesting we have an investment glut, are you?
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Originally Posted by Elliott_CA
where ultra-wealthy individuals and institutions have mountains of excess cash sitting idle and doing nothing, is grossly unproductive.
Of course, there is no excess cash. Nothing is "sitting idle and doing nothing."
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Originally Posted by Elliott_CA
We need a wealth tax to siphon up dead cash to put it to productive use.
Wealth is already productively deployed. Wealth taxes are widely discredited.
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Originally Posted by Elliott_CA
Why not tax a billionaire?
Billionaires are already taxed.
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Originally Posted by Elliott_CA
If someone has $2 billion, and taxes knocks it down to $1.5 billion, will he or she even notice?
The former employees might notice - you know, former employees of operations that were shuttered to pay the $500 million you propose.
Why vilify billionaires, after that it’s going to come down to millionaires, then the thousandaires. Give it a break, LA times.
Yup. Just like the Alternative Minimum Tax, originally targeting fewer than 100 "super earners" and which, since it purposely wasn't indexed to inflation, now affects the middle class--because, by virtue of their numbers, that's where the money is.
A common misunderstanding among those who never passed Econ 101 is that wealth is to be "spent." They think of wealth in terms of consumption items rather than investments.
And the common misunderstanding of those who have passed Econ 101 is that all is numbers, and those numbers are everything. The more they think so, the more likely they have lost touch with the fact that econ is largely a constructed mode of thought not unlike a religion whose tenets unsurprisingly reinforce one another.
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