Twelve members of Congress will soon take on the crucial job of rearranging our country’s finances. They’ve been instructed to devise a plan that reduces the 10-year deficit by at least $1.5 trillion. It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness. That feeling can create its own reality.
Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here. The 12 should then turn to the issue of revenues. I would leave rates for 99.7 percent of taxpayers unchanged and continue the current 2-percentage-point reduction in the employee contribution to the payroll tax. This cut helps the poor and the middle class, who need every break they can get.
But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate.
A lot of times I'll see people say it's because they think they'll eventually be just as rich and want to enjoy the dream of being able to keep it all. I don't think that's much of it, though. I think it's indoctrination, something learned at the feet of their parents and peers who share their morality and politics. The politicians who espouse their morals also preach the evils of taxing the rich and that's good enough for them.
posted by empyrean at 5:10 AM on August 15 [+] [!]
(of course, the same could be said for property tax, and I'm a full-on supporter of that concept)
But it was likely taxed at an absurdly low capital gains tax rate. A one-time tax on wealth is a way to make up for years of abnormally low income and capital gains tax rates.
Writing checks to the IRS that include strings of zeros does not bother (me). Overall, we feel extraordinarily lucky to have been dealt a hand in life that enables us to write large checks to the government.
... It’s vital, however, that they achieve far more than that. Americans are rapidly losing faith in the ability of Congress to deal with our country’s fiscal problems. Only action that is immediate, real and very substantial will prevent that doubt from morphing into hopelessness... Job one for the 12 is to pare down some future promises that even a rich America can’t fulfill. Big money must be saved here.
Secondly, and I can't believe you are making me argue the socialist position, but you aren't "destroying that wealth." The idea that you are destroying it implies that it matters that all that money is in the control of one person vs. being spread around or being used to eliminate a debt which burdens everyone equally. We are slightly reducing one person's wealthiness, yes, (I only said 10%, but I pulled that number out of thin air, I could have said %50% or 2%). But the money is not being destroyed.
Vast stores of accumulated wealth in the hands of a few are not compatible with democracy. If you have a lot of money, without progressive taxation and capital gains, accumulating more money is rather a simple matter of doing nothing but collecting rents/interest. And then you can buy politicians and influence and distort democracy to your whim, until you're a king, having contributed nothing of value to society. Or your children are, or their children. (See the Rockefellers, Carnegies, etc).
gjc, you still didn't show how a wealth tax destroys wealth. It makes certain people less wealthy, but it doesn't reduce the amount of wealth in society as a whole. And maybe the relatively wealthy folk I know are strange, but they much prefer when the bank puts up a large portion of the money for whatever project than putting it all up themselves. Something about cash flow.
posted by wierdo at 8:28 AM on August 15 [+] [!]
No matter how much I agree, isn't Buffett just preaching to the choir here? Whose opinion is getting swayed by this?
"But for those making more than $1 million — there were 236,883 such households in 2009 — I would raise rates immediately on taxable income in excess of $1 million, including, of course, dividends and capital gains. And for those who make $10 million or more — there were 8,274 in 2009 — I would suggest an additional increase in rate."
That one can think of a stupid way to implement a wealth tax does not mean a wealth tax is unworkable. By that standard, we can do essentially nothing.
posted by wierdo at 9:12 AM on August 15 [+] [!]
You have a strange definition of wealth. Wealth is everything you own, minus what you owe, not just illiquid assets, savings, or whatever it is you're trying to say constitutes wealth.
I've give you a hint: How many media outlets are owned by the poor?
Therefore I say unto you, Take no thought for your life, what ye shall eat, or what ye shall drink; nor yet for your body, what ye shall put on. Is not the life more than meat, and the body than raiment?
Behold the fowls of the air: for they sow not, neither do they reap, nor gather into barns; yet your heavenly Father feedeth them. Are ye not much better than they?
Which of you by taking thought can add one cubit unto his stature?
And why take ye thought for raiment? Consider the lilies of the field, how they grow; they toil not, neither do they spin:
And yet I say unto you, That even Solomon in all his glory was not arrayed like one of these.
Wherefore, if God so clothe the grass of the field, which to day is, and to morrow is cast into the oven, shall he not much more clothe you, O ye of little faith?
Therefore take no thought, saying, What shall we eat? or, What shall we drink? or, Wherewithal shall we be clothed?
(For after all these things do the Gentiles seek:) for your heavenly Father knoweth that ye have need of all these things.
But seek ye first the kingdom of God, and his righteousness; and all these things shall be added unto you.
Take therefore no thought for the morrow: for the morrow shall take thought for the things of itself. Sufficient unto the day is the evil thereof.
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