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'Absurd!': US Billionaires Pay Lower Tax Rate Than Working Class for First Time
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this post was submitted on 04 May 2024
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They used to push for a flat tax where everyone, billionaires and minimum wage workers alike, would pay the same rate. They did one better and now billionaires pay a lower rate than everyone else. Steve Forbes was an idiot. They managed to do it far better than he could have ever imagined when he ran for President in the 90's. Fucking nepo babies...
Flat tax is an awful idea.
Say they make it 10%
When you make $30k a year, $3,000 has a much higer impact on your finances than someone who makes $3,000,000 and pays $300,000 in taxes. You keep $27,000, they keep $2,700,000. You lose a mortgage payment and a car payment. They have to buy a slightly smaller yacht.
On top of that, as already mentioned, their wealth comes from stocks and other non-wages income. Bezos famously only took $81,000 (I think?) in actual pay for many years, yet he’s one of the richest people on the planet. You think $8,100 in taxes is good enough for one of the richest people while you pay $3k out of your $30k?
Flat tax is a bad idea, and the only ones who want it are the wealthy and those who don’t understand that the wealthy could take whatever salary they want to pay as little tax as possible and just live off stocks, loans, which is how they already avoid paying taxes.
I agree that flat tax is unfair, but flat tax with no deductions would be better than current inverted scale where rich pay smaller percentage.
I don’t think you understand.
If flat tax would apply evenly to all sources, investment sales taxed at same rate as wages. No deductions. How would this not be fairer than the US current tax scheme?
You didn’t read what I said?
If a billionaire can take a salary of $80k at the hypothetical 10% tax and pay $8k tax while an IT professional making $200k has to pay $20k how is that fair? The billionaire takes money from capital gains (lower taxes) because they pay themselves in stock and funds, and/or uses loans (zero tax on loans- you know that, right?), puts his yacht under a shell company so no personal taxes on that, probably uses it for business trips so it’s use can be written off partially…and buys whatever the hell he/she wants. But pays less tax than the IT professional.
So you’re saying that’s just fine. That’s exactly how a flat tax works. That’s how rich people pay less than regular people.
No I do not think it's fine. I did read what you said, but from your reply it's obvious you didn't read what I said.
I said if "apply evenly to all sources, investment sales taxed at same rate as wages" From your reply "billionaire takes money from capital gains (lower taxes)". That's not the same rate is it.
I said "No deductions."From your reply "so its use can be written off partially" That's a deduction isn't it.
The current system where rich pay a lower tax rate because they can take advantage of things like capital gains and deductions is not fair or equitable. A flat rate system that eliminated things like capital gains and deductions would not be fair, but it would be fairer because it keep the millionaire mfrom paying a lower rate than the poor (or the software engineer).
Graduated tax that eliminated things like capital gains and deductions would be fairer still. Also gift exemption, inheritance exemption and other carveouts that unduly favor the wealthy should at least be be adjusted if not outright eliminated.
Because a business use of a yacht (hypothetically) is not income. You get your yacht but no worries about it being taxed as income. You also completely skipped loans, loans are not income and therefore not taxable under your scheme, and portfolio loans are a huge part of how the wealthy get spending money. Now before you reiterate yet again you said all sources I want you to think a minute that these taxes are going to be applied to you, too. Your 401k. That’s investment. Your home loan. You want to tax that? How about your car and student loans. More taxes? Still sound right? Do you want to make carve outs for those things? That sounds suspiciously like writeoffs or “deductions”.
We could sit here all day and quibble over what is and isn’t income, but at the end of the day you’re going to end up with exceptions, or “deductions”, and if you’re going to say “well, nobody making under ‘x’ amount should be taxed on a 401k…” and now we’re right back where we started with a rich person making less than ‘x’.
Flat taxes are not going to work.
They are not fair.
You need a wealth tax and you need a tax that attaches itself to the vehicles used by the wealthy to get money that is under- or not taxed. Tax personal or portfolio loans over 100,000 not used for housing, medical care, or education. Stock options issued in lieu of or along with salary as compensation should be taxed as income when sold. Do not tax individual personal retirement accounts that deliver less than “x” income or payout to persons of retirement age. This is how you tax wealth and protect the normal persons. Not 10% of the $81k salary the billionaire gives himself.
Not advocating for flat tax, I've said flat tax not fair, we're in agreement on that.
I stand by my statement that a flat tax scheme applied evenly to all sources of income with no deductions to shield income, is fairer than the current scheme. Your arguments that flat tax scheme is unfair are all true but do not repudiate that statement.
I say it again, fairer than the current scheme. Don't tell me not fair, I agree. Tell me how everyone paying the same rate would not be fairer than the current scheme where wealthy are able to pay a lower rate. Again, fairer than, not fair.
You’re talking out both sides. You agree yet disagree. I’ve already laid it out and you don’t seem to understand.
I understand, you are arguing quite ably against a point I didn't make and not addressing the point I did make.
Have a flat tax based on brackets.
5% for x income 10% for x income Top out at 30-40%
Problem solved
I think you forgot the /s or some people won't get it. Also it should go back to topping out at 90%
A 30% flax tax is higher than the mythical 90%.
The 90% range had so many deductions only 1 person hit it and even then it’s only on the income that exceeds that limit.
A 30% flat tax with no deductions is much more brutal to income but it’s fair.
Ahhh you aren't using the current definition of "flat tax". Flat tax is a single rate across all incomes. It still includes deductions, exemptions, credits etc.
I don't know the correct term for "no deductions tax". No exceptions? Non adjustable?
Your bracket concept is how it works now.
Flat means no deductions and an equal pay. It can still be done against brackets and be a flat tax.
No brackets work with credits and deductions. Someone with 100k in income could pay zero in taxes. A flat tax makes them pay taxes by removing deductions.
Personally I’d rather see a consumption tax but that freaks most people out.
"A flat tax is a tax with a single rate on the taxable amount, after accounting for any deductions or exemptions from the tax base. It is not necessarily a fully proportional tax." Wikipedia
It’s however the law wants to define it. All the bills I’ve seen pushed are a flat rate with no deductions.
Have you seen anyone propose a flax tax with deductions? I have not.
https://www.investopedia.com/terms/f/flattax.asp#:~:text=Key%20Takeaways%201%20A%20flat%20tax%20applies%20the,sales%20tax%20are%20a%20type%20of%20flat%20tax.
Employing a flat tax means that taxpayers cannot take deductions or exemptions.
Interesting! I had never heard that definition before. It's always been a single rate across the board with deductions still included whenever I've heard it discussed. I'll believe it though. Investopedia, while focused on the greediest of society, at least knows economics.
edit: weird words changed. swipe keyboard got the best of me.
I’ve never heard deductions being allowed. Maybe a few but for the most part it’s about an equal rate across everyone or at least a few small brackets.
Different plans define income differently. If we are trying to fix the astern income should be everything. Selling an investment home, dividends, selling stocks, w2. Etc.