People love to talk about the marginal tax rates but not the average tax rates. And I think that’s right because the conversation should be focused on the wealthiest people.
That's an irrelevant diversion though, because the measure that matters when discussing the fairness of taxes is how much people are left with at the end after paying whatever taxes they pay, including sales tax, income tax, and any other kind of tax. And for those particular people you're talking about the answer is very little, next to none, and for the people for whom a wealth tax would even apply the answer is unimaginable amounts.
I'd say the fact that California remains the epicenter of tech despite its high taxes suggests concentration of talent matters far more than tax rates.
Both are important reasons for taxes.
"We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we cannot have both." (often attributed to Louis Brandeis, though he probably never said exactly the quote)
Taxation is one of the primary tools for avoiding destructive levels of wealth concentration.
Of course, the wealthy decry this as unfair wealth redistribution but all governments engage in constant wealth redistribution.
In the US we happen to have decided (since the Reagan era) that through increasingly regressive taxes the redistribution will almost always function upwards, ultimately resulting in the oligarchical dismantling of our government that we find ourselves in today.
> And for those particular people you're talking about the answer is very little, next to none...
So... where are the real resources coming from then? Because if these people aren't using them to support their living standards they must be doing something else. If we give one person enough money out of the tax pot to pay rent, that means the resources were redeployed from somewhere else that was about 1-rentworth of something.
Because I agree that the taxes aren't going to come out of the wealthy's living standards, but the implications of that in practice are not good.
Yes, and that "somewhere else" is others' excess profit.
That excess profit comes from (a) inventing or investing capital with a return or (b) paying less for goods / labor than they can be sold for.
Capitalist profit has always been equal parts ingenuity and fucking other people over, and as most often implemented makes no discrimination between the two.
The bargain by which this has traditionally been squared is "the person who made the profit gets to keep some of it" + "they pay the rest in taxes to support the society they're successful in and depend on."
Unfortunately over the years this has continually been eroded by capital's invasion into democracy, with the express purpose of neutering the latter part of that bargain.
Those who would be hit with a wealth tax are incensed by it precisely because it would be less avoidable than the myriad of loopholes that have been engineered into income taxes.
Yes. Focus on outcomes.
Pick a target amount of inequity. Act to hit that goal. Adjust as needed.
For example, I advocate restoring our gini coefficient from the current 0.48 (?) back to 1970s era 0.35. People smarter than me will figure out how to best measure inequity, ideal targets, and implementation details.
Arguing about all the misc tax rates, purposefully ignoring the macro, is an obfuscation strategy to prevent taking any action at all. Straight out of the CIA's field guide on sabotage.
(Social security and Medicare)
SS tax has a limit because benefits are also limited. It is a forced retirement plan where if you live long enough, you might get back what you paid in.
