Are the $Richest on Earth under-$taxed? See what the $Billionaires said about it:

[sear]

ZURICH, Jan 19 (Reuters) - A group of more than 100 billionaires and millionaires has issued a plea to political and business leaders convening virtually for the World Economic Forum: make us pay more tax.

The group calling itself the "Patriotic Millionaires" said that the ultra-wealthy were not currently being forced to pay their share of the global economic recovery from the pandemic.

"As millionaires, we know that the current tax system is not fair. Most of us can say that, while the world has gone through an immense amount of suffering in the last two years, we have actually seen our wealth rise during the pandemic - yet few if any of us can honestly say that we pay our fair share in taxes," the signatories said in an open letter, published on the occasion of the World Economic Forum's "virtual Davos", which began on Jan. 17.

Over the course of the two years of the pandemic, the fortunes of the world's 10 richest individuals have risen to $1.5 trillion - or by $15,000 a second - a study by Oxfam this week showed.

According to a study conducted by the Patriotic Millionaires together with Oxfam and other non-profits, a progressive wealth tax starting at 2% for those with more than $5 million and rising to 5% for billionaires could raise $2.52 trillion, enough globally to lift 2.3 billion people out of poverty and guarantee healthcare and social protection for individuals living in lower income countries.

Millionaires group calls for wealth tax at virtual Davos

A group of more than 100 billionaires and millionaires has issued a plea to political and business leaders convening virtually for the World Economic Forum: make us pay more tax.

www.reuters.com

There are two separate issues:

a) CAN we tax the $rich? Or is the current system stacked so far in their favor that they are beyond the reach of additional government taxation?

b) IF we can, when, & how $much?

 

[Borg Refinery]

One only need look at tax rates in the 40s, 50s and 60s to see that high taxes do not make businesses or rich individuals flee their countries, however with the proliferation of offshoring, you will need to close down tax havens and make them more transparent first. The IRS has wide and sweeping powers to keep Americans from going to a tax haven. It's time to use them, but that's moot when the SCOTUS will rule in favour of the rich 10 times out of ten (presuming the cases against the IRS go to the highest courts in the land - after all corporations are going to challenge all this in court aren't they?).

That said, there is a fair level of tax and I think 40s/50s/60s rates w4ere fair - rates in the UK in the 1970s of 90% tax on the richest were simply idiotic and really did make people flee the country.

 

[sear]

The IRS has wide and sweeping powers to keep Americans from going to a tax haven. It's time to use them, but that's moot when the SCOTUS will rule in favour of the rich 10 times out of ten

It's been financial "cat & mouse" for centuries. U.S. Founder Benjamin Franklin mentioned it:

"Our Constitution is in actual operation; everything appears to promise that it will last; but in this world nothing is certain but death and taxes." Benjamin Franklin

In living memory:

In 1990, the Joint Committee on Taxation projected that the 1991 revenue yield from the luxury taxes would be $31 million. The actual yield was $16.6 million. Why? Because -- surprise! -- the taxation changed behavior: fewer people bought the taxed products. Demand went down when prices went up. Washington was amazed. People bought yachts overseas. Who would have thought it?
According to a study done for the Joint Economic Committee, the tax destroyed 330 jobs in jewelry manufacturing, 1,470 in the aircraft industry and 7,600 in the boating industry. The job losses cost the government a total of $24.2 million in unemployment benefits and lost income tax revenues. So the net effect of the taxes was a loss of $7.6 million in fiscal 1991, which means the government projection was off by $38.6 million.

When a luxury tax took wind out of yacht sales

www.baltimoresun.com

I've read strident objection to the income tax Laffer Curve. Not sure why. It's logical. To paraphrase William F. Buckley Jr:
- zero% tax is anarchy, 100% tax is slavery, therefore appropriate tax% is somewhere in between.

 

[Shiftless2]

The IRS has wide and sweeping powers to keep Americans from going to a tax haven ...

US persons (citizens and permanent residents) are subject to US income tax on their world wide income regardless of where they live.

As for those so called "tax havens", what people don't seem to understand is that those places have their own tax system in place. A tax system that meets their needs. So the obvious question is "Why should they adopt the same tax system that the US has?" And why should the US think it has the right to force their tax system on a separate independent country?

BTW, the article cited in the OP makes the classic mistake of confusing income and wealth. The two are not the same and cannot be treated the same.

 

[Borg Refinery]

The problem Shiftless, is that with low tax rates, western countries cannot afford to meet the needs of the citizenry wrt state expenditure. Who will pay for the pensions etc?

It's not fair for the rich to hoard all their frickin wealth in tax havens IMHO. There should be a globally agreed minimum tax rate, but you made many good points incl the IRS taxing world wide income, I read that before but had assumed that if you relinquish US citizenship you're no longer liable to be taxed? Bojo renounced his US citizenship for this very reason - he was born in NYC.

 

[Shiftless2]

I've read strident objection to the income tax Laffer Curve. Not sure why. It's logical. To paraphrase William F. Buckley Jr:
- zero% tax is anarchy, 100% tax is slavery, therefore appropriate tax% is somewhere in between.

On the Laffer curve itself:

Almost everything Republicans get wrong about the economy started with a cocktail napkin

How an oversimplified drawing on a napkin changed US history.

qz.com

Have to say that I attended a conference in the late 80's where Art Laffer was the keynote speaker. Fascinating talk and, at the time, I was naive enough to believe him. Unfortunately his predictions did not prove to be true.

To paraphrase William F. Buckley Jr: - zero% tax is anarchy, 100% tax is slavery, therefore appropriate tax% is somewhere in between.

But that's not the idea behind the Laffer curve (or at least the applications of it).

 

[sear]

The problem Shiftless, is that with low tax rates, western countries cannot afford to meet the needs of the citizenry wrt state expenditure. Who will pay for the pensions etc?

Socialized medicine drives up government cost, taking tax rates with it.
U.S. citizens may get a little less from their governments than those in the U.K.
So we may pay less tax. That's half the story. The rest of the story is longevity, and healthcare outcomes.

"To paraphrase William F. Buckley Jr: - zero% tax is anarchy, 100% tax is slavery, therefore appropriate tax% is somewhere in between." s #3

But that's not the idea behind the Laffer curve (or at least the applications of it).

My understanding of Laffer Curve fundamentals: three different basics:
- At 99% tax the citizen / tax payer doesn't derive enough income from it to justify the time / labor.
- At 1% tax the government doesn't derive enough revenue to cover operating costs.
- At the Laffer Curve peak, government derives maximum revenue. Increasing tax above the peak, and the disincentive reduces labor participation.

The anecdote to support this (I have not independently corroborated):
JFK lowered taxes. BUT !!
Before the JFK tax cuts the tax rate was so far above the Laffer peak the reducing the tax rate increased tax revenue.

 

[Shiftless2]

... I read that before but had assumed that if you relinquish US citizenship you're no longer liable to be taxed? Bojo renounced his US citizenship for this very reason - he was born in NYC.

If someone renounces their US citizenship they are still subject to an "exit tax". My understanding is that the logic behind this is a belief that the only reason someone would renounce their US citizenship is taxes. So the gov't is determined to get it's pound of flesh.

US Exit Taxes: The Price of Renouncing Your Citizenship

Many expats are required to pay an exit tax when renouncing their US citizenship. Click here to learn more today!

www.greenbacktaxservices.com

To digress, taxes aren't the only reason someone might renounce their US citizenship. [FATCA comes to mind (google it) but there are others.]

... with low tax rates, western countries cannot afford to meet the needs of the citizenry wrt state expenditure. Who will pay for the pensions etc?

So the rest of the world should be forced to follow the US system when they've got one that works for them?

As for pensions, if they're properly funded there should be no need to inject additional funds via taxes. That said, Social Security and Medicare were never properly funded - the funding shortfall for those two programs combined is somewhere north of $130 Trillion (yes, that's with a "T"). To put that in perspective the total value of all real property in the US is somewhere in the $50 Trillion range.

This article is over a decade old but the situation hasn't improved in the intervening time

Social Security and Medicare: Trying to Tackle Two 800-pound Gorillas

While many people worry about the billions of dollars spent bailing out banks, auto makers and other sectors, shortfalls in Medicare and Social Security are what could ultimately sink efforts to revive the U.S. economy. As 78 million baby boomers begin to retire, funding for the government's two...

knowledge.wharton.upenn.edu

It's not fair for the rich to hoard all their frickin wealth in tax havens IMHO. There should be a globally agreed minimum tax rate ...

You're confusing wealth with income. The two are not the same and only income is subject to tax.

 

[Shiftless2]

Socialized medicine drives up government cost, taking tax rates with it.
U.S. citizens may get a little less from their governments than those in the U.K.
So we may pay less tax. That's half the story. The rest of the story is longevity, and healthcare outcomes.

But the increased taxes (which are a small percentage of the total tax bill) is offset against a reduction in premiums for medical insurance. For the record, Canada manages to insure everybody at roughly half the cost per capita that the US spends.

As for life expectancy you'll notice that the US is nowhere near the top of this chart. In fact it ranks 46th on the list.

Life Expectancy by Country and in the World (2024) - Worldometer

List of countries and dependencies in the world ranked by life expectancy at birth, both sexes, males and females. World Population Life Expectancy with historical chart

www.worldometers.info

 

[Borg Refinery]

lol so you're suggesting those poor, poor widdle overtaxed rich folk should get away with avoiding billions and billions in taxes because.. some minor technicality - then hiding behind pedantic word definitions when you full-well know what I meant when I said they hide their wealth (clearly referring to money in THAT context) in tax havens..?

With the unbelievable levels of inequality and poverty in our world you're actually sticking up for the tax avoiding billionaires and multinationals who are ripping off the American people daily?

lol even billionaires think they're undertaxed, how wrong can you be?

 

[Shiftless2]

lol so you're suggesting those poor, poor widdle overtaxed rich folk should get away with avoiding billions and billions in taxes because.. some minor technicality - then hiding behind pedantic word definitions when you full-well know what I meant when I said they hide their wealth (clearly referring to money in THAT context) in tax havens..?

You're still confusing assets (wealth) and income.

If someone owns a million dollars in stock and the value appreciates to two million that's not income. It's not income until it's sold and they realize that gain. Until then it's just paper. And if you were to somehow tax that increase in value (without them selling the stock) where are they going to get the money to pay the tax?

Or something a little more mundane. The original purchase price of a 1960 Corvette was $3,900. Today that same car is worth about $100,000. Suppose you're fortunate enough to own one of those things - should you be taxed on the $96,000 increase in value or shouldn't you pay taxes on that gain until you sell the car?

Or you bought your house for $200,000 and today it's worth $500,000. That's an increase in your net worth (i.e., wealth) but it's not income. If you had to pay tax on that $300,000 increase in value without selling the house, where are you going to get the money to pay those taxes?

And what makes you think that these individuals and companies are ripping off the American people? After all, not all of them are American. And not all of them live in the US.

But back to tax payable - regardless of where the "money" is located, Americans are still required to pay US income tax on any income earned. All that it being in a tax haven (whatever you mean by that) means is that it's not taxed by the tax haven - it does not mean that it's exempt from US taxes.

And if someone lives in (and is a citizen of) a so called tax haven and is doing business there, why should the US have any right to their income and why should the US think it has a right to force that country to change their tax laws to correspond with the US's.

 

[sear]

Alright.
I'll need the view from both sides of this coin to sort out a little reality.

S2's unspoken premise seems to be a citizen's healthcare $costs may be a liability. BUT !! Though it's undeniably that individual citizen's liability, it only impinges on his income, not his capacity to pay.

"... a long habit of not thinking a thing wrong, gives it a superficial appearance of being right, .... Time makes more converts than reason." Thomas Paine / Common Sense

"A precedent embalms a principle." Benjamin Disraeli 1804 - 1881

"The despotism of custom is everywhere the standing hindrance to human advancement." John Stuart Mill 1806 - 1873

That may be the tradition, and or the status of current U.S. practice. I'd be careful to conflate that with being right.

BR #10

From each according to his ability, to each according to his need. -- Karl Marx

Obviously "soak the $rich" isn't a very popular mantra at the Beverly Hills country club. BUT !!
- Soak the poor - doesn't rate well on the viability scale.

How close can we get to an objective standard for a taxation scheme that is both viable (it eliminates deficits) and equitable (acceptable to the citizens that pay it)?

 

[Shiftless2]

S2's unspoken premise seems to be a citizen's healthcare $costs may be a liability. BUT !! Though it's undeniably that individual citizen's liability, it only impinges on his income, not his capacity to pay.

Medical bills are the number one cause of bankruptcies in the US.

 

[sear]

Medical bills are the number one cause of bankruptcies in the US.

Spit Hapins !

There are problems. Among them:

Air conditioning of a sort first came to the White House through tragedy. In an effort to cool the stifling sickroom of mortally wounded President James A. Garfield, U.S. Navy engineers prepared an improvised air conditioner in the summer of 1881. An electric blower forced air through a box with thin cotton screens that were kept wet with ice and ice water. Pumped through a duct into Garfield’s bedroom, the device pushed the temperature down to 80 degrees and lowered the humidity.

Keeping Cool in the White House

During the 19th century Washington’s infamous summer heat and humidity presented challenges to presidents and their fami...

www.whitehousehistory.org

The problem: once such extraordinary measures are taken with anyone, the pretense is that it's available to everyone. Now within broad margins it doesn't work that way. There are various levels of healthcare. Help me / us understand S2 #13.

If I want to buy a car, isn't it a matter of what I can afford? If I want a $2 $Million $Dollar tricked out Lambo, isn't it simply a matter of whether I can meet the dealer's price? And if all I can afford is the rusted out Yugo he's parked out back awaiting the crusher, then it's the Yugo, or walk. Right?
Same with a house, or a business suit, or restaurant?

So if the healthcare needed to keep an otherwise dying citizen alive is beyond his means? Why not just let him drop dead? Wouldn't such policy provide incentive for citizens to be more wealthy?

 

[Shiftless2]

If I want to buy a car, isn't it a matter of what I can afford? If I want a $2 $Million $Dollar tricked out Lambo, isn't it simply a matter of whether I can meet the dealer's price?

So if I want my child to live isn't it simply a matter of whether or not I can meet the price?

 

[sear]

isn't it

You probably know that better than I do. I'd be careful about considering any status quo an ideal.

We may be contaminating the gene pool by altering the criteria of which blood-lines continue to contribute to it. Merit basis makes sense. You may recall Oliver Wendell Holmes, Buck v. Bell

Three generations of imbeciles are enough.” Supreme Court Justice Oliver Wendell Holmes, Jr. in Buck v. Bell - May 2, 1927

That was about eugenics.
But I'm not sure this is different enough to dismiss / disregard it.

 

[Borg Refinery]

That's awful.

 

[sear]

That's awful.

'tis.
BUT !!
It's an awfulness that impacts that one individual.
Even if with the best of intentions, enabling those to breed that would otherwise not potentially affects all mankind.

That's not a dictate from Lord sear. It's merely an observation. "Actions have consequences."

 

[Borg Refinery]

Yeah, that's what the Danish authorities thought when they tied the tubes of thousands of Inuit women in Greenland or when the United States forced involuntary sterilization on thousands in the 1910s. It's also in line with a lot of Nazi thinking that the inferior shouldn't breed.

Others can subscribe to those views if they want, freedom of speech and all.

 

[sear]

Danish authorities ... tied the tubes of thousands of Inuit women in Greenland ...

Right.
I mentioned "eugenics" in post #16. Venn diagram fans may find substantial overlap between eugenics and healthcare prioritization. They are quite different.

Further:
In the cases you cite the eugenics regime was to weed out those GOVERNMENT deemed undesirable.

What I'm suggesting has nothing to do with government subjective preference. The complication for the gene-pool is socialized medicine alters healthcare eligibility, tainting if not removing the merit basis.

Also worth mentioning:
selection is already standard practice. "Troubled pregnancies" such as spina bifida, anencephaly, many etceteras are included among reasons for pregnancy termination. There's no one-sided coins. But such pregnancy termination may benefit society, for it may, it may substitute a subsequent pregnancy and birth of a healthy child.
In that case, the aborted pregnancy if carried to term might have delivered a human that needed $millions in healthcare, and potentially (as in the case of anencephaly) never contribute. They're a net drain on resources.

You (& or some others) may think I'm taking a side in this debate.
Not so much.

I'm instead doing my best to advocate from the perspective of the lay scientist. EITHER approach has consequences, risks, and benefits. I think it's important to bear in mind, "free" healthcare for everyone might seem a panacea. It is not. And worst case scenario, it may, particularly over millennia, substantially degrade the human race.
I think that's an error we should not make lightly.

"Among life's perpetually charming questions is whether the truly evil do more harm than the self-righteous and wrong." Jon Margolis