A top marginal tax rate of 94% for people making over $1,000,000 USD per year is just common sense under capitalism. Spending it on those who need it instead of genocide is what’s controversial.
Very few people have income (salary) that high. What’s needed is higher capitals gains and wealth taxes, to avoid loopholes and living from credits against stock.
I think a better loop terminating clause would be until the top 1% hold less than 2% of total wealth… Or something like that, you may want to adjust the percentage to your use case 😅
Of course people will always try to get around things, but as part of something like this you would make that wire fraud and prosecute anyone found doing it.
How does that work in practice? Let’s say we want to tax people like Musk, Bezos, Zuckerberg. Let’s say for convenience we want to set the tax at 10% of their total net controllable assets.
Take Musk for example. He has an estimated net worth of $500 billion so we’re going to tax him $50 billion a year. To pay his taxes in the first year he’d have to sell 10% of his shares in his companies (since his wealth is concentrated almost entirely in stock).
What would happen if he offered 10% of his shares for sale on the open market? It would cause the stock price to tank since there aren’t enough buyers out there willing to pay the current price for those shares. As the stock price tanks, his net worth plummets along with it, say to $400 billion. Now he has to sell 12.5% of his shares to pay his $50 billion tax bill. But that means offering even more shares on the market which cause the stock price to drop even more.
At the end of the day, just forcing Musk to pay his tax bill could completely wipe out his company. Maybe that’s actually your goal, but it’s not clear how that will raise money to help people.
And that gets to the point I actually want to make: stock prices as a form of wealth are somewhat fictitious in nature, not unlike the way money is created by banks through fractional reserve banking. Trying to tax all those shares of stock is similar to creating a bank run. Rather than unlocking a bunch of wealth you can use for other purposes, you just end up destroying the wealth altogether.
Here’s a video by an accounting professor that explains what stock prices really mean by way of an analogy with baked beans (yes, he’s a British professor)!
I would argue he should be forced to divest from those shares as part of the tax, no one person should control that much of anything. If that crashes the price of his stock, so be it. It didn’t deserve that price if it does crash from that. The wealth was imaginary in the first place, so there’s no true loss from its destruction.
There is a loss though. By instituting this process, even if it was only applied to Tesla, you would crash the entire stock market because investor confidence would be lost.
You could say nothing would be truly lost in a stock market crash, but real people would still be severely impacted. The market crash would lead to bank runs which would topple the banking system, and then ordinary people wouldn’t be able to buy food or other necessities. It would be a disaster that would cause people to demand the old system be restored.
If investor confidence would be lost by appropriate taxes, then it must be unjust confidence. If the shares can’t be sold without impacting the stock price, then clearly they’re overvalued.
Their value is based on confidence in the current system. Change the system and the confidence is lost.
It’s like tickets to a movie. They’re valuable before the movie starts. After the movie’s over they’re worthless.
Put a total wealth tax on the stock market is like throwing sand into the gears. The whole system will fall apart. You can argue that it shouldn’t be that way but you’re currently in the system. The challenge is not to imagine how it ought to be, it’s how to get there without the whole house of cards crashing down around you.
A top marginal tax rate of 94% for people making over $1,000,000 USD per year is just common sense under capitalism. Spending it on those who need it instead of genocide is what’s controversial.
Very few people have income (salary) that high. What’s needed is higher capitals gains and wealth taxes, to avoid loopholes and living from credits against stock.
Fixing capitalism is a lost cause. What’s needed is a feast where we eat the rich.
And by rich, everyone means those with a dollar more than themselves, right?
No.
Eat the top 1%.
Rinse and repeat until there’s no longer a top 1%.
My day will come.
I think a better loop terminating clause would be until the top 1% hold less than 2% of total wealth… Or something like that, you may want to adjust the percentage to your use case 😅
You’re saying I might live after all?
You could still die if you inherit some wealth from the first few rounds of feasting and hold onto it …
So until the populations hits 99 people? Until the next baby is born.
Sounds about right.
I’d love a wealth tax but stashing your wealth in tax havens is super easy so idk what the point is
That’s why you don’t tax income, you tax net controllable assets.
I’m not an accountant but here’s how that might go
institute a family fund to hold all of your assets for you, registered in tax haven
don’t actually own part of the fund, so that it doesn’t count as an asset, but find a wag to keep control of it
Of course people will always try to get around things, but as part of something like this you would make that wire fraud and prosecute anyone found doing it.
How does that work in practice? Let’s say we want to tax people like Musk, Bezos, Zuckerberg. Let’s say for convenience we want to set the tax at 10% of their total net controllable assets.
Take Musk for example. He has an estimated net worth of $500 billion so we’re going to tax him $50 billion a year. To pay his taxes in the first year he’d have to sell 10% of his shares in his companies (since his wealth is concentrated almost entirely in stock).
What would happen if he offered 10% of his shares for sale on the open market? It would cause the stock price to tank since there aren’t enough buyers out there willing to pay the current price for those shares. As the stock price tanks, his net worth plummets along with it, say to $400 billion. Now he has to sell 12.5% of his shares to pay his $50 billion tax bill. But that means offering even more shares on the market which cause the stock price to drop even more.
At the end of the day, just forcing Musk to pay his tax bill could completely wipe out his company. Maybe that’s actually your goal, but it’s not clear how that will raise money to help people.
And that gets to the point I actually want to make: stock prices as a form of wealth are somewhat fictitious in nature, not unlike the way money is created by banks through fractional reserve banking. Trying to tax all those shares of stock is similar to creating a bank run. Rather than unlocking a bunch of wealth you can use for other purposes, you just end up destroying the wealth altogether.
Here’s a video by an accounting professor that explains what stock prices really mean by way of an analogy with baked beans (yes, he’s a British professor)!
I would argue he should be forced to divest from those shares as part of the tax, no one person should control that much of anything. If that crashes the price of his stock, so be it. It didn’t deserve that price if it does crash from that. The wealth was imaginary in the first place, so there’s no true loss from its destruction.
There is a loss though. By instituting this process, even if it was only applied to Tesla, you would crash the entire stock market because investor confidence would be lost.
You could say nothing would be truly lost in a stock market crash, but real people would still be severely impacted. The market crash would lead to bank runs which would topple the banking system, and then ordinary people wouldn’t be able to buy food or other necessities. It would be a disaster that would cause people to demand the old system be restored.
If investor confidence would be lost by appropriate taxes, then it must be unjust confidence. If the shares can’t be sold without impacting the stock price, then clearly they’re overvalued.
Their value is based on confidence in the current system. Change the system and the confidence is lost.
It’s like tickets to a movie. They’re valuable before the movie starts. After the movie’s over they’re worthless.
Put a total wealth tax on the stock market is like throwing sand into the gears. The whole system will fall apart. You can argue that it shouldn’t be that way but you’re currently in the system. The challenge is not to imagine how it ought to be, it’s how to get there without the whole house of cards crashing down around you.
“People have no actual confidence in capitalism if it can’t be quite so exploitative of people”
Tell me more
And (to those who don’t get the margin thing) that’s only on the amount above the amount taxed at lower rates.