Political Memes

$5 million is far too low for a wealth tax but maybe ok for an income tax

In context here, I was sorta referencing a capital gains tax. Note the comparison with homestead sale exemptions.

70% is also too high.

Not sure whether I agree or disagree. It's in line (if a little on the high end) for the highest marginal rate in a lot of Europe. After a certain point, no human can claim to actually need the money they're making anymore, with a logarithmic return. As such, sharp taxation increases after that logarithmic point of return make sense from a strict "utility per dollar" mindset.

I think everyone could agree that a wealth tax of 2% on amounts over $1 billion would be fine

I simply don't think that's true. I think it's a no-brainer. But I don't think it's true. Wealth taxes terrify people who will never see that kind of wealth.

All unearned income over $500K could be taxed at 30% as well

I'm assuming you mean unrealized income? Yeah, that's where the problems start, and what my whole comment was about. Are you accounting for liquidity? For risk? Sometimes people simply have hundreds of thousands in unrealized income that they will never be able to realize because it will coincide with equivalent losses in past/future years. Again, the Bitcoin example I used elsewhere. Some people who genuinely do not have a lot of money were hit with some massive "unrealized gains" taxes greater than their entire net worth, possibly greater than they'd ever earn in their lives, due in part to the unregulated and volitile nature of bitcoin.

In fact, Bitcoin is the perfect example why we need to be incredibly careful with unrealized gains taxes. They're called unrealized for a reason, and realizing gains can be incredibly costly. You tax a single-owner business for sudden growth and the owner might find themselves owing more in taxes than money made, but selling the business to realize those gains would also involve destroying their source of income. In fact, the wrong capital gains tax would (as always it seems) decisively benefit large businesses and superwealthy individuals. They would go around buying those "taxed out of business" companies for pennies on the dollar because they could afford the taxes.

That's why it's complicated.

Corporate income taxes are what really need to rise. 35% at least

ALSO complicated. But I agree. There is a real risk of corporate flight, but I'm not convinced Delaware-Based corporations that primarily employ people in third-world countries are really providing much value in the US.

I don’t care if Apple says their IP is all owned by a tiny company in Ireland. They need to pay US taxes on all income generated in the US.

...they already do "pay US taxes on all income generated in the US". Apple pays a majority of their taxes to the US. The Ireland thing was largely about 10 years of crazy tax breaks back in the 80's based on loopholes that the EU cracked down on. Yes, their $170B profit is disgusting, and the $35B in taxes they pay are merely 20% of their margins... but it's not going away by just expecting them to pay based on US income. Corporate taxes are a complicated game with hundreds of deductions and thousands of defensible reasons for those deductions.

I've never loved that businesses pay taxes on profit, but individuals pay taxes on income. It's "understood" that hitting a business on the bottom-line is unreasonable, but individuals are often taxed on the very remediation techniques taken to deal with overwhelming debt (yes, in the US, debt forgiveness is taxed as income!)