U.S. Politics: Gar Nicht Trump's Traumschiff!

[Ran]

3 hours ago, Kalbear said:

it is perfectly reasonable to punish those people, and she specifically proposed a mechanism - a very heavy estate tax.

I don't think that's punishment to them at all. After all, they are dead, and sane billionaires such as Gates and Buffett have repeatedly pointed out that the estate tax is far too low because they themselves don't see a punishment in it but rather a reasonable point that the greater part of their wealth does not need to be given to their offspring.

I suspect @Mlle. Zabzie is not suggesting a one-off super wealth tax that eats 90% of the estate and then is reduced substantially when there are no more billionaires (this is not particularly intended as a jest, since Piketty now argues that the right level of wealth tax is probably closer to 90%)

3 hours ago, Kalbear said:

And to be really clear on this - the effect that megawealthy have on a democracy is a fundamental problem.

The "mega-wealthy" have existed for a long time. Things like robust anti-trust laws, restrictions on corporate campaign donations, and I'm sure a number of other things came into being in part to address these, and the weakening of these things should be addressed, as the other things 

To be clear, I'm for higher taxes on the .1%, robustly higher. I'm for very high estate  taxes at the upper end. The country had some of its greatest growth in an era of marginal tax rates that approached 90% at the upper end.  I just think a wealth tax is the wrong way to go about it because it's not really the fault of Bill Gates or Warren Buffett that the American people and the American government made choices that dovetailed with their leading businesses which then allowed them to become very wealthy. Better to address all the myriad ways in which oversight and control has been ceded by American politicians, courts, and ultimately voters, some of which are genuinely things that can be addressed, rather than wishing for a wealth tax that doesn't address those issues and which is, in any case, certainly not going to be implemented. 

[Rippounet]

35 minutes ago, Ran said:

I just think a wealth tax is the wrong way to go about it because it's not really the fault of Bill Gates or Warren Buffett that the American people and the American government made choices that dovetailed with their leading businesses which then allowed them to become very wealthy. Better to address all the myriad ways in which oversight and control has been ceded by American politicians, courts, and ultimately voters, some of which are genuinely things that can be addressed, rather than wishing for a wealth tax that doesn't address those issues and which is, in any case, certainly not going to be implemented. 

The problem is how to do that in a world where politics tends to be dominated by the super-wealthy and their twisted ideology.
Gates and Buffett are -relatively- sensible individuals but their public interventions kinda give the false impression that billionaires are all as sensible and reasonable. In actuality, the Republican Party has been beholden to the super-wealthy's interests for the past... erm... 40 years? And the economic and social consequences of that are very real.
As has often been said in these threads, when the political balance swings too far right, at some point moderation is no longer a virtue but becomes part of the problem. A proposal like the wealth tax is the perfect symbol to rally the masses against what is basically the hijacking of political power by the few at the expense of the many. It's partly a way to mobilize voters and partly a scare tactic to show the elite that the game is up and they have to show willingness to compromise, lest they lose much more than they are willing to.
I honestly don't get why anyone who is not themselves part of the 1% would ever call for moderation when the 1%'s blind greed in the past decades is demonstrably the source of so many troubles, one of which actually threatens our entire species. A different way to put it is that we know for a fact that the current socio-economic structure poses an existential threat to mankind. In that context, discussing wealth taxes of a few percent seems ridiculously moderate to begin with. Anyone trying to be even more moderate... Is basically on the right. And since we all agree that this discussion is heavily ideological, we can drop the act and be quite frank about it: there are those who are on the side of the 99%, and those who are on the side of the 1%.

[DMC]

4 hours ago, Kalbear said:

Is the problem simply that the 16th amendment does not in particular grant something like a power with respect to property or other tax?

2 hours ago, Rippounet said:

It's partly a way to mobilize voters and partly a scare tactic to show the elite that the game is up and they have to show willingness to compromise, lest they lose much more than they are willing to.
I honestly don't get why anyone who is not themselves part of the 1% would ever call for moderation when the 1%'s blind greed in the past decades is demonstrably the source of so many troubles, one of which actually threatens our entire species. A different way to put it is that we know for a fact that the current socio-economic structure poses an existential threat to mankind.

Yeah this is why I think the differences of opinion here are largely cosmetic.  Let's remember that the 16th amendment was the first of the "progressive" amendments implemented in large part as a response to the unchecked and broadly corruptive influence of the uber-wealthy benefiting from the industrial revolution in a grossly disproportionate way, i.e. the Rockefellers, Carnegies, Vanderbilts, etc. 

The progressive era, not coincidentally, was also the highest period of polarization since the Civil War before our current predicament.  It was a political context that called for broad and bold structural change.  It's not exaggeration or alarmist to observe we're in a similar situation now, necessitating similarly bold structural changes.  In that vein, a wealth tax is a perfectly appropriate way in which to start that conversation in regards to tax policy.

[Mindwalker]

Are we sure that Gabbard isn't a Republican plant/ double spy?

[Paladin of Ice]

15 minutes ago, Mindwalker said:

Are we sure that Gabbard isn't a Republican plant/ double spy?

No.

In fact I think we feel fairly sure that she's a Republican who ran as a Democrat because it's impossible to get elected on the Republican ticket in Hawaii.

[Mlle. Zabzie]

@Kalbear The 16th Amendment permits Congress to collect "taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or enumeration."  This was needed because Article I, Section 9 provides that "No Capitation, or other direct, Tax shall be laid, unless in Proportion to the Census or Enumeration herein before directed to be taken." This limits the power of Congress to impose a direct tax (as opposed to an indirect tax, i.e., a consumption-type tax or tariff) except in proportion to the census.  The Supreme Court has defined in a bit greater detail what this means - cliff notes version is that a tax on the privilege of transferring property (e.g., the estate tax) is not an impermissible direct tax (Knowlton), a capitation (poll) tax is impermissible, a National tax on land ownership is impermissible (see Springer, Pollock, Hylton).  The Pollack case was the reason for the 16th Amendment as it held that the income tax was not constitutional (you can criticize the reasoning in Pollack, but it's pretty well-established now).  More "recently", the seminal case Eisner v. Macomber among many other things, includes a conclusion that a tax on personal property has similar constitutional infirmities to a tax on real property.  So anyhow, I think absent a Constitutional amendment, the wealth tax is dead in the water except as a theory.

Separately, and remembering my bias that as a policy matter, I think that the tax system should be used to raise revenue and not for social policy* in the first instance, I think the bigger issue that the US faces on the taxation front is not the wealth gap, but rather the historic, and growing deficit to GDP ratio.  Y'all, we broke.**  But more seriously, because of the cuts in the income tax rate, reductions in enforcement and collection, and increases in spending, we look like our deficit/spending/GDP ratios are on wartime footing (like WWII).  This is not sustainable, but certain people wander around talking about cutting taxes even more.  This is irresponsible.

Completely separately, we are going through a bit of global turmoil as taxation systems globally respond (belatedly) to the digital economy.  Every country wants a piece of profits associated with the big digital/cloud giants, but taxation systems are not built for this kind of property.    

 

* This is not to say that social policy should not be considered in formulating a tax system, but rather that it should not drive the construction of a tax system.  That is, social policy should inform the choices made among tax alternatives, but should not be the end goal itself.

**To be clear, I am not an anti-deficit monger or a balanced budget hawk.  Deficit spending is a responsible tool of fiscal policy, particularly where it is used for investment purposes.  That is not what is going on now.

[Centrist Simon Steele]

12 hours ago, ThinkerX said:

Regarding Warren's 'wealth tax.'  People here and elsewhere keep saying (correctly) that it will not pass.  However, from where I'm standing, it was never intended to pass.  Rather, it is an opening bid in a bargaining session.  Start with that, freak everybody out, ratchet down from there.  Republicans did this repeatedly to the democratic party all through the Obama years and beforehand.  There probably is some sort of tax on the wealthy - financial transactions or capital gains or some such that she can get and will pass muster.  This is just to get EVERYBODY freaked out.

I don't see how we can go back. I'm primed. No more billionaires. Anything less is an assault on the livelihood of the majority of people in this country.

[Mr. Chatywin et al.]

1 hour ago, Mindwalker said:

Are we sure that Gabbard isn't a Republican plant/ double spy?

 

1 hour ago, Paladin of Ice said:

No.

In fact I think we feel fairly sure that she's a Republican who ran as a Democrat because it's impossible to get elected on the Republican ticket in Hawaii.

I think these attacks are a bit unfair. She’s just weird, politically. That doesn’t make her some kind of Republican asset.

[Mindwalker]

8 minutes ago, Tywin et al. said:

 

I think these attacks are a bit unfair. She’s just weird, politically. That doesn’t make her some kind of Republican asset.

She decribed the Democratic party, specifically, as corrupt during the debate. Not even, you know, 'Washington.' She might as well have said, "y'know, if I don't make it, don't bother voting for a Democrat. They're all corrupt, you might as well keep Trump." That's not weird. It's deliberate.

[Mr. Chatywin et al.]

18 minutes ago, Mindwalker said:

She decribed the Democratic party, specifically, as corrupt during the debate. Not even, you know, 'Washington.' She might as well have said, "y'know, if I don't make it, don't bother voting for a Democrat. They're all corrupt, you might as well keep Trump." That's not weird. It's deliberate.

Didn’t basically every Sanders supporter call the party corrupt in 2016?

Look, as a longtime political operative, you have to make peace with the fact that most  political parties have some degree of corruption within its ranks. As do most corporations, companies, etc. Just hope and pray the watchdogs aren’t corrupt.

[Mindwalker]

7 minutes ago, Tywin et al. said:

Look, as a longtime political operative, you have to make peace with the fact that most  political parties have some degree of corruption within its ranks. As do most corporations, companies, etc. Just hope and pray the watchdogs aren’t corrupt.

Look, that's not my point. Of course they do. My point is Gabbard's behavior at this point in time. Whether she is in the pocket of the GOP or not - she acts as if she were.

As for Sanders 2016 I don't know and I don't care. Why should I care exactly?

[Mr. Chatywin et al.]

12 minutes ago, Mindwalker said:

Look, that's not my point. Of course they do. My point is Gabbard's behavior at this point in time. Whether she is in the pocket of the GOP or not - she acts as if she were.

As for Sanders 2016 I don't know and I don't care. Why should I care exactly?

She’s behaving like someone who knows their career is over. Nothing she’s doing is all that surprising.

With regards to Sanders and 2016, why do you care about Gabbard now and don’t care about Sanders in 2016? I was here very loudly saying that Sanders’ behavior was going to help nuke Clinton, and I was pretty damn right about it.  

[Leofric]

I haven't been following the 'wealth tax' discussion too closely, but as I was paying my property tax bill yesterday for my home, I thought about this.   Most middle class families are already paying a 'wealth tax' in that they are being taxed, at least at the local level, on what is usually their largest asset, their home.   This money is assessed to pay for essential services and infrastructure maintenance done by their local government.     For the wealthier citizens, especially the 1%, their homes and properties (unless the foundation of their wealth is real estate), makes up only a small portion of their assets.  

So a 'wealth tax' on other assets outside of property, such as large stock portfolios, seems reasonable to pay for essential services and infrastructure of the federal government, at a similar percentage as other property taxes.  

Concerns that stocks vary in value from year to year also applies to real estate,  which is handled by a property assessment.

[Which Tyler]

 

[Zorral]

6 hours ago, Rippounet said:

The problem is how to do that in a world where politics tends to be dominated by the super-wealthy and their twisted ideology.

 

[Mindwalker]

18 minutes ago, Tywin et al. said:

With regards to Sanders and 2016, why do you care about Gabbard now and don’t care about Sanders in 2016? I was here very loudly saying that Sanders’ behavior was going to help nuke Clinton, and I was pretty damn right about it.  

Because in 2016, I wasn't following the primaries/ elections that closely, as no-one in their right minds anticipated even the American people could elect someone like DT.

Because NOW Gabbard has to know that she's helping re-electing Trump.

I don't think I was even reading these threads in 2016, but kudos to you for being right. I could ask if you cared about Sanders then, why...

But I think we are giving Gabbard too much of the spotlight. I made a little quip (and totally stand by it), but that's that.

 

 

[Ran]

10 minutes ago, Leofric said:

I haven't been following the 'wealth tax' discussion too closely, but as I was paying my property tax bill yesterday for my home, I thought about this.   Most middle class families are already paying a 'wealth tax' in that they are being taxed, at least at the local level, on what is usually their largest asset, their home.

As noted up thread, however, current law doesn't permit a national property tax to be applied, a similarly constraint being placed on wealth taxes.

10 minutes ago, Leofric said:

 So a 'wealth tax' on other assets outside of property, such as large stock portfolios, seems reasonable to pay for essential services and infrastructure of the federal government, at a similar percentage as other property taxes.  

The national average property tax rate  is 1.08%, per Google. I've got no real problem with a 1% wealth tax for those with assets valued above $50 million. 2% or even 3% don't really bug me, but it's the 6% and higher figures which I think reach confiscatory levels because the amount of liquidation of assets to be able to pay it seems to me like it'll lead to a number of unhealthy results.

 

10 minutes ago, Leofric said:

Concerns that stocks vary in value from year to year also applies to real estate,  which is handled by a property assessment.

Property is pretty easy to assess. How do you assess the value of an entirely private company, however? Most don't really get valued until sold.  How do you assess the value of all of a wealthy person's holdings? Not just equities and homes and estates, but art objects and other collectibles whose value is higher than any retail price tag they may have had? How do assess every item of worth, like clothing, jewelry, watches, pens, etc., etc.? I don't know exactly how many properties there are in the United States, but every property owner almost certainly has a hundred times that many individual items of some sort of monetary value as part of their net worth. If I calculated my net worth at the moment, I've a library of a few hundred books -- how are those valued? How about the bed linens? What about some copies of old ASoIaF manuscripts that may have some value to collectors? What value do I place on some of the S1 limited knick-knacks HBO sent out to reviewers? I had an offer of $1000 once for the maester's box they sent, but is it worth that or more now? 

It's worth considering that the net worth calculations that get batted about are generally notional and not actually exact figures. I saw the news suggested Bill Gates has surpassed Bezos as the world's wealthiest man for the nonce, but no one -- not even Bezos or Gates -- could say for sure. Which, yes, it's a wonderful problem to have (for the billionaire) to be so wealthy that a couple billion off here and there is basically a rounding error. But you can bet that if a wealth tax were to pass muster, wealthy individuals would quite rightly argue to the courts that it would be entirely wrong for the IRS to impose a wealth tax without having a correct and accurate assessment of their wealth, and that they would contest valuations of things like art works or privately held businesses every step of the way. And who can blame them? Would you be happy if your wealth were assessed and they claimed you owed more taxes than you thought you should pay because they disagreed on a credit you claimed?

The IRS, already underfunded, would have to grow enormously to be able to do this. The courts would have to grow enormously too, to handle the litigation.

I think this is partly why @Mlle. Zabzie and others argue that consumption taxes and things like that are much more readily doable, because there's a very clear dollar figure attached to every transaction, and why estate taxes can work better because you'll deal with these estates much more infrequently than you would do if you had to do a fresh assessment each and every year of a wealthy person's wealth.

 

[Mlle. Zabzie]

24 minutes ago, Ran said:

As noted up thread, however, current law doesn't permit a national property tax to be applied, a similarly constraint being placed on wealth taxes.

The national average property tax rate  is 1.08%, per Google. I've got no real problem with a 1% wealth tax for those with assets valued above $50 million. 2% or even 3% don't really bug me, but it's the 6% and higher figures which I think reach confiscatory levels because the amount of liquidation of assets to be able to pay it seems to me like it'll lead to a number of unhealthy results.

 

Property is pretty easy to assess. How do you assess the value of an entirely private company, however? Most don't really get valued until sold.  How do you assess the value of all of a wealthy person's holdings? Not just equities and homes and estates, but art objects and other collectibles whose value is higher than any retail price tag they may have had? How do assess every item of worth, like clothing, jewelry, watches, pens, etc., etc.? I don't know exactly how many properties there are in the United States, but every property owner almost certainly has a hundred times that many individual items of some sort of monetary value as part of their net worth. If I calculated my net worth at the moment, I've a library of a few hundred books -- how are those valued? How about the bed linens? What about some copies of old ASoIaF manuscripts that may have some value to collectors? What value do I place on some of the S1 limited knick-knacks HBO sent out to reviewers? I had an offer of $1000 once for the maester's box they sent, but is it worth that or more now? 

It's worth considering that the net worth calculations that get batted about are generally notional and not actually exact figures. I saw the news suggested Bill Gates has surpassed Bezos as the world's wealthiest man for the nonce, but no one -- not even Bezos or Gates -- could say for sure. Which, yes, it's a wonderful problem to have (for the billionaire) to be so wealthy that a couple billion off here and there is basically a rounding error. But you can bet that if a wealth tax were to pass muster, wealthy individuals would quite rightly argue to the courts that it would be entirely wrong for the IRS to impose a wealth tax without having a correct and accurate assessment of their wealth, and that they would contest valuations of things like art works or privately held businesses every step of the way. And who can blame them? Would you be happy if your wealth were assessed and they claimed you owed more taxes than you thought you should pay because they disagreed on a credit you claimed?

The IRS, already underfunded, would have to grow enormously to be able to do this. The courts would have to grow enormously too, to handle the litigation.

I think this is partly why @Mlle. Zabzie and others argue that consumption taxes and things like that are much more readily doable, because there's a very clear dollar figure attached to every transaction, and why estate taxes can work better because you'll deal with these estates much more infrequently than you would do if you had to do a fresh assessment each and every year of a wealthy person's wealth.

 

Consumption taxes, btw, are tricky, because of their inherently regressive nature.  There are ways to ameliorate this, but it is certainly a concern in putting them into place.

One thing that isn't really being discussed and should be is getting rid of the capital gains preference.  I find the justification for the capital gains preference to be weak at best, and between getting rid of that and, AT A MINIMUM the step up on property at death would go a long way.

[Ran]

32 minutes ago, Mlle. Zabzie said:

Consumption taxes, btw, are tricky, because of their inherently regressive nature.  There are ways to ameliorate this, but it is certainly a concern in putting them into place.

Very true. VAT is very normal in Europe but it's not the best course (and I think this is why Saez and Zucman argued that the lack of it is why the US had a much more progressive tax system in the past compared to other nations).  I was going to suggest a luxury tax would be more progressive, but the US history with it is instructive. 
 

Quote

One thing that isn't really being discussed and should be is getting rid of the capital gains preference.  I find the justification for the capital gains preference to be weak at best, and between getting rid of that and, AT A MINIMUM the step up on property at death would go a long way.

I agree with both of those. FWIW, Gates does too -- he cited the absurdity that capital gains aren't at the same rates as labor income in his "infamous" remarks about wealth taxes that were taken out of context

 

[Mlle. Zabzie]

21 minutes ago, Ran said:

 

I agree with both of those. FWIW, Gates does too -- he cited the absurdity that capital gains aren't at the same rates as labor income in his "infamous" remarks about wealth taxes that were taken out of context. 

And unlike the wealth tax proposals, both of these proposals are feasible to push through in the medium term (not saying it will happen, but saying that there is a narrow path through the woods where they could happen).