this post was submitted on 13 Aug 2024
77 points (97.5% liked)
Personal Finance
3829 readers
2 users here now
Learn about budgeting, saving, getting out of debt, credit, investing, and retirement planning. Join our community, read the PF Wiki, and get on top of your finances!
Note: This community is not region centric, so if you are posting anything specific to a certain region, kindly specify that in the title (something like [USA], [EU], [AUS] etc.)
founded 2 years ago
MODERATORS
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
Almost like the wealthy should be taxed 90% and healthcare should be free, and rent should be strictly regulated, and everyone should have a labor union.
How about this. If you make it to a net worth of $1 Billion, we get you a nice gold plaque that says, "Congratulations! You have won capitalism." Then, any income you earn after that is taxed at 100%.
Income and net worth are different concepts though. You can have a car and be too broke to buy gas.
I think you might be failing to envision just how much money a billion dollars is. If your net worth (Assets - Liabilities + Equity) = one billion dollars, you are among the wealthiest of the wealthiest people in the world.
Now, that probably isn't all just sitting in investments. I'll be very conservative and say half of it is. If you earned 4% annually on that $500M, which is a pretty decent average, you would gross $20 Million.
I don't know about you, but if I had $20 Million, I would never have to work another day for the rest of my life. You see where I'm going with this?
Wouldn’t the $20 Million be subject to the 100% income tax at that point, meaning the net worth billionaire wouldn’t be able to earn any income as it’s all taxed away?
Sure, but let's say they spent 20m. Then their net worth would be under a billion and the next couple of years of earnings would have a lower tax rate.
Even if they never were able to make money again, 20m goes into a billion 50 times. They could overspend for 50 years without making a cent on investments.
I'm sure they'd come up with fun new accounting loopholes though so their assets didn't appear to increase.
You can always move to a town in Greece, in the mainland (something smaller than 5k people), close to the beach. You can live amply with 20k euros per year (about $22k) for you and your spouse. Buying a house is about $100k to $150k, taxes are rather low for most professions, and you can have your own vegetable garden, trees, and chickens. Fresh fish, goat meat (best kind of meat for humans). Car repairs and other repairs are much cheaper than in the US (my husband was expecting a $2500 bill to replace the car engine's chain, and it was just $600).
If you're in your 30s right now, and you're going to live until you're 100, that's "only" 1.4 million euros. If you get a couple of kids, that's 1.8 to 2 mil euros. Definitely not 20 million though.
And can you get a Visa ?
Also, healthcare is free (in the public hospitals, they also have dentists in there), and education is free.
Yes, of course. There's even a treaty to not be double-taxed.
For the rest of your life!
What incentive is there to keep working at a 90% tax burden?
They did in the 40s and 50s when wealth ttaxes were that high. 10% of a billion is still a 100 million.
Well if they stop working they make 0. 10% of any income is still more than zero, and this would likely be bracketed so high that there'd be at least a million or two in lower tax bands.
Edit: also strictly, the comment you replied to said "the wealthy" this could refer to a wealth tax rather than an income tax, where stopping working would just remove the income but not affect the tax burden at all—i.e. a pretty terrible idea if you want to remain wealthy
No one makes that much money through work, it is through investments. Remove social security tax limits and beef up our nationalized retirement systems then tax investments to death. I don't care if people are disincentivised from investing in businesses that don't make any money. I know I'll ruffle some feathers with this but I truly believe all space travel investments should be redirected to something that can make an immediate difference for those already on the planet, like healthcare or services for those effected by climate change.
Why do people volunteer for free?
The Beatles' "Taxman" refers to a 95% tax rate that they were complaining about. Yet they still went on to produce more records and earn more money (and yes, work).
If someone has enough money to live a life of luxury, they'll keep doing what they do to earn that life of luxury.
People volunteer for causes they think are worthy. I would never do the work I get paid to do for free or for 10% of gross pay. I'd just find a less stressful job, work way less and make about the same.
I don't see any problem there! Lol
The issue is that right now I'm willing to put in the extra effort for the return early in my career. If the government were to effectively cap income potential, some workers who would otherwise be more productive (or who perform a highly specialized service) will not bother, creating a labor shortage and increasing costs. Not a smart move if you're a country with an inflation problem that's been trending very close to full employment.
It would also make occupations like medicine that have long runways to earning even less attractive.
Money is not the only motivator.
As well, someone in the top tax bracket paying 95% tax on their income over $500,000 is still making a lot more than someone in the bottom tax bracket paying effectively 0% tax.
good thing people who are this productive tends to not be billionaires
Fame and glory? You think Elon Musk notices an extra billion dollars here and there, or do you think he likes being the Lord of X and the Master of Tesla?