The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
As it is, they'll ship your job to india if it proves to be more profitable than keeping you on. The tax the CEO pays on his porsche doesn't matter.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
What you're essentially saying there is that we shouldn't tax items because if we do, rich people will spitefully get rid of our jobs. I mean honestly, with the wording presented, you're proposing we're being extorted. Which is actually a really good argument for taxing the ever living shit out of them and replacing them with people who can use the money responsibly.
That said, I think you meant that they'd leave the country and take the companies with them. But we rarely see that (more frequently, you see the company move, but the execs all stay in the US because it's a really great place to be rich), and quite frankly if your job was easy and cheap to outsource, they've probably already done so.
But the reality of the situation is that the tax rate on the rich, via income or luxury taxes, seems to have absolutely no impact on employment rates. So I'm not really seeing a problem with higher luxury taxes in order to adjust behavior in much the same way sin taxes are intended to do. Quite frankly if you're looking at a brand new Aston, chances are you don't give a fuck about the price tag getting padded out, you're buying it as a status symbol. And you're definitely not going to move to some mythical awesome country with a low tax rate so you can buy it without paying taxes. That's about as honest a threat as the whole lucky ducky "Ima quit my job and go galt because welfare is fucking awesome" threats.
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AtomikaLive fast and get fucked or whateverRegistered Userregular
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
Maybe I don't understand what you're saying.
If you're advocating Reaganomics, that's what's already going on, and it works for shit.
If you're saying that under higher luxury penalties, the ultra-wealthy will buy their goods from overseas, I struggle to understand how they're going to save money by buying houses, cars, and private schools in India or Vietnam and shipping them over here.
So on thread topic more: Isn't cost of living adjustment in taxes more covered by STATE taxes? The feds can happily just say "you make X, deal with it", and the states have a more fine grained idea of what that means to them and how much it's worth.
I find it hard to believe that a single person making 100k in any state is legitimately barely making ends meet. I say this as one: yes, I spend most of my money, and yes, most of it is wasteful luxury spending. I could own a cheaper place easily, but I like mine. It's a luxury to own it. I could own a far cheaper car, but I like mine. It's a luxury. I could eat out less and buy things on sale, but.. luxury!
I mean, that's what luxuries are: thing you like but don't need. If you have a shitload of luxuries you enjoy, you're not barely making ends meet.
Have 3 kids and a 200k household? That's what deductions for dependents are for: to ease the tax burden difference considering you have more people to take care of on that budget. But uh, you're still living a pretty comfortable life, and probably own a 40+ inch TV and everything else we just take for granted as not being an actual luxury until you compare it to people actually struggling to make a living.
got done doing a return for a family making $115,000 and they ended up getting a $5,000 refund. real estate, especially the stuff you can do with it, is a very large tax shelter item. it used to be much much worse prior to the 1986-7 changes in the tax law, but even now with gain exclusions and section 121 you see a lot of families wrapped up their wealth in real estate and actually getting a tax benefit, the mortgage interest deduction, for doing so. in some cases, depending on the terms of the loan, the government is basically paying for a good chunk of your mortgage.
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AtomikaLive fast and get fucked or whateverRegistered Userregular
So on thread topic more: Isn't cost of living adjustment in taxes more covered by STATE taxes? The feds can happily just say "you make X, deal with it", and the states have a more fine grained idea of what that means to them and how much it's worth.
Not all States have income taxes. Perhaps not coincidentally, these States are typically the easiest to live in and offer the most dollar utility.
Also, cities and states have control over things like property tax, which disproportionately affect property owners.
It ain't all apples and oranges, which is basically the root of the problem. In NYC, I paid federal, State, and city taxes, as well as union dues. My dad in East Texas pays only federal income tax and county property tax. Along with his farm subsidy, it's how he affords a 40 acre ranch on $40k a year.
a farm subsidy combined with a tax-assessment for farm property means he can probably end up paying much less property taxes on that 40 acre ranch.
on a semi-related note something that happens in new jersey is that a lot of wealthy people will purchase 5+ acre lots and assess it as farm property so it's 1) business property, and 2) has a lower property tax value. what ends up happening is they sell the lot at a gain for another like-kind property and end up not paying any tax on the gain (the gain takes away from the basis of the new property. if you start to develop a house there, then yeah I believe there is some clawback, but only a limited amount. Like, if you did the exchange for a 6 acre property, you could build a house on 1 acre and have the rest farm assessed and just like, keep a bee hive or chickens or something. it seems like a major way to avoid paying tax on accumulated wealth.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
So the fact that the CEO of EAD makes less than the CEO of Boeing while simultaneously working a more difficult job, due to the structure of the company incorporating language barriers, and making better airplanes means...what, exactly?
Nobody needs an upper class with access to tax free luxuries. If everybody went Galt they'd be replaced by people who actually wanted to do their job. We certainly aren't suffering from a lack of room at the top at the moment. And the people who currently occupy it have hardly covered themselves in glory to suggest that their skills and talents are irreplaceable. I mean, I'll destroy the world economy for just 75k a year and tips. That's a bargain!
Also, cities and states have control over things like property tax, which disproportionately affect property owners.
Property tax disproportionately affects people who don't sleep under bridges. Everyone else pays it since landlords don't just eat the cost for their rental units. Well, everyone aside from priests, &c.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
Wait, people still believe this after the policies of 2000-2008 and the result we are all suffering through? Because what actually happened was that tax cuts on the wealthy drove jobs to India and China in pretty big numbers. Now correlation might not be causation in this, but lowering taxes on the wealthy sure did not create any jobs for us the last time we tried.
But what rich person is employing the hard working people working for MicroSoft? Bill Gates? So if he dies tomorrow all those people will be out of work? Nope. It is not the wealthy who gives the rest of us the method to live, it is every worker, from the bottom up.
And lets say that everything that happened with the US economy between 2000-2008 was a statistical fluke, your theory still can not explain the economical stability and high performance of Scandinavia and Germany, where even the wealthy have to pay taxes and follow the law.
So on thread topic more: Isn't cost of living adjustment in taxes more covered by STATE taxes? The feds can happily just say "you make X, deal with it", and the states have a more fine grained idea of what that means to them and how much it's worth.
Not all States have income taxes. Perhaps not coincidentally, these States are typically the easiest to live in and offer the most dollar utility.
Also, cities and states have control over things like property tax, which disproportionately affect property owners.
It ain't all apples and oranges, which is basically the root of the problem. In NYC, I paid federal, State, and city taxes, as well as union dues. My dad in East Texas pays only federal income tax and county property tax. Along with his farm subsidy, it's how he affords a 40 acre ranch on $40k a year.
Texas seems to just run a sales tax. But they also seem to just run a massive deficit and just mauled school spending last I looked.
Anywho, usage taxes seems to be where the thread was turning. If you wipe out income tax and instead sales tax and luxury tax, you need to sit around trying to tune it to get back to where we are now: making some form of progressive taxation system tracking along with income, without actually being able to look at income.
Also, cities and states have control over things like property tax, which disproportionately affect property owners.
Property tax disproportionately affects people who don't sleep under bridges. Everyone else pays it since landlords don't just eat the cost for their rental units. Well, everyone aside from priests, &c.
nitpick: the land-value component of the tax is eaten by the landlord; the tax on the property built atop the land falls on the tenant (or other taxpayers, as exemptions go) and landlord, depending on local elasticity of supply/demand for rental sites.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Ayup. This works very well, with a few provisos that we keep in mind that we are pretty bad at identifying luxury goods. Opportunity cost is a fictitious counterfactual, remember... and people can be pretty inventive at putting their income toward quantity instead of quality if we tax quality heavily.
Also, consumption taxes of this nature, even a broadly progressive consumption tax that evades the above problem, do very little about underlying wealth inequality - indeed that is likely to become and remain high. Taxing wealth is economically costly though, elasticity and all that. It is difficult to deal with wealth inequality via direct progressive taxation for the simple reason that the material quality of life of the middle and lower classes depends heavily on the quantity of accumulated capital that they can rent from their probably-wealthy-owners (welcome to capitalism!). And taxing wealth without discouraging capital accumulation is annoyingly difficult. It may be necessary to accept wealth inequality in order to achieve more a egalitarian consumption distribution.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Ayup. This works very well, with a few provisos that we keep in mind that we are pretty bad at identifying luxury goods. Opportunity cost is a fictitious counterfactual, remember... and people can be pretty inventive at putting their income toward quantity instead of quality if we tax quality heavily.
Also, consumption taxes of this nature, even a broadly progressive consumption tax that evades the above problem, do very little about underlying wealth inequality - indeed that is likely to become and remain high. Taxing wealth is economically costly though, elasticity and all that. It is difficult to deal with wealth inequality via direct progressive taxation for the simple reason that the material quality of life of the middle and lower classes depends heavily on the quantity of accumulated capital that they can rent from their probably-wealthy-owners (welcome to capitalism!). And taxing wealth without discouraging capital accumulation is annoyingly difficult. It may be necessary to accept wealth inequality in order to achieve more a egalitarian consumption distribution.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
just so we're clear: this is basically nonsensical. There are states with very high taxes on luxury goods, right now. Observe their economic statistics.
More precisely: global movement of wealth to escape consumption taxes is only a concern for the government's revenue service (and it is not a terribly large concern, given that tax-free-zones in even very small countries fail to utterly ruin their economies). But taxing consumption more generally does not diminish the profitability of employing labour (it is worth thinking about the cases where it might, and thereby realize that those are not very plausible...).
Holders of nominal assets are not necessarily wealthy, it is just that the wealthy, by virtue of owning much stuff, also tend to own much nominal assets. But anybody on a nominal pension/etc. is also hurt by inflation.
It is worth being careful when considering inflation just to tax away nominal wealth, thus...
Have 3 kids and a 200k household? That's what deductions for dependents are for: to ease the tax burden difference considering you have more people to take care of on that budget. But uh, you're still living a pretty comfortable life, and probably own a 40+ inch TV and everything else we just take for granted as not being an actual luxury until you compare it to people actually struggling to make a living.
If you're comparing anything to people struggling to make a living, everyone's problems will always look petty, but it's not that ridiculous to look into a similar tax burden on people with sometimes dramatic cost of living differences as being a form of unequal tax burden. I mean, if you want to just talk comparatively, the average person in the DRC is doing far worse than Americans near the poverty line, but just because there's a greater injustice going on doesn't mean that this stuff isn't a problem that might be worth fixing.
Holders of nominal assets are not necessarily wealthy, it is just that the wealthy, by virtue of owning much stuff, also tend to own much nominal assets. But anybody on a nominal pension/etc. is also hurt by inflation.
It is worth being careful when considering inflation just to tax away nominal wealth, thus...
That was said with at least half a tongue firmly in cheek. Inflation is not magical. It does seem that the best way to help the poor is to push unemployment really low. Inflation can be part of that, depending on the circumstances, but so can plenty of other things.
Well, that is at present a cyclical problem. Cyclical and long-term public finance decisions tend to diverge. Right now raising taxes is not generally likely to help employment. In the long run the revenue's gotta come from somewhere, though. IAPW we spend now and pay it back later but we are very much not IAPW. Imma lookin' at you, Congress.
So the defense for "You make $100,000 and shouldn't be taxed more" is that they live somewhere more expensive but have the benefit to not live somewhere expensive? Yeah that's a good reason.
I pay $1100 for rent where I live. I don't need to, I can pay $500 if I wanted too. But it is a luxury good I wanted so I pay more for it. That means jack shit about how much my income is taxed, and really, should have nothing to do with it. I could live in NYC for $2100, or across the river for $800. And my disposable income would increase immensely by living there. It's not like a box of cheeze-its is $10 a box in NYC. I spent a weekend and I think shit was cheaper there than where I lived at the little stores everywhere. If I want to fucking Rite-Aide on the corner where I live a bottle of soda would be almost $4. But then again, that's the convenience fee we're really talking about.
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
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AtomikaLive fast and get fucked or whateverRegistered Userregular
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Ayup. This works very well, with a few provisos that we keep in mind that we are pretty bad at identifying luxury goods. Opportunity cost is a fictitious counterfactual, remember... and people can be pretty inventive at putting their income toward quantity instead of quality if we tax quality heavily.
Also, consumption taxes of this nature, even a broadly progressive consumption tax that evades the above problem, do very little about underlying wealth inequality - indeed that is likely to become and remain high. Taxing wealth is economically costly though, elasticity and all that. It is difficult to deal with wealth inequality via direct progressive taxation for the simple reason that the material quality of life of the middle and lower classes depends heavily on the quantity of accumulated capital that they can rent from their probably-wealthy-owners (welcome to capitalism!). And taxing wealth without discouraging capital accumulation is annoyingly difficult. It may be necessary to accept wealth inequality in order to achieve more a egalitarian consumption distribution.
I guess the major risk with my proposal is that ultra-wealthy people may choose to just sit on their money, opting to go lower down the op-cost scale instead of paying the premiums on prestige.
Though I have a hard time believing that those people, when given the opportunity to save McDuck-levels of income, are just going to put the cash into money silos. Reinvestment, in anything, will have to occur at some point I'd gather.
Most rich people sit on their money regardless. We have someone in our extended family who is... let's say, old money. The only thing they do is invest. They make a pretty low wage in terms of taxable income, but the invest a large percentage of their wealth. But that percentage? It's not even a going to make a dent in their ability to afford their lavish life style.
While I absolutely feel for people in NYC making $100,000 even with the increase in taxes on that money, they are still very wealthy. Again, someone in our extended family works in NYC. They drive 2 and a half hours a day to work just because they can afford to. They have a little rinky dinky trailer and he basically has $90,000 in income he can just flush down the toilet if he wanted. Which he does.
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
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Dr Mario KartGames DealerAustin, TXRegistered Userregular
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
We can fix this particular facet in its entirety through trade policy. Any economic advantages jobs or products would have overseas can and used to be completely nulled at the border. You make it the only game in town.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
We can fix this particular facet in its entirety through trade policy. Any economic advantages jobs or products would have overseas can and used to be completely nulled at the border. You make it the only game in town.
Well it's not like the rich really make jobs. They don't just hire people to give them a wage. Supply/Demand and basic economics are what really create the jobs here, rich people just pay the check to get higher returns. As always, people are a commodity to be exploited, just like any other thing in business.
If they want to ship all the jobs to Malaysia, tax the shit out of import goods. Tax the shit out of call centers that transfer out of the country. Suddenly it's no longer cheaper to have that, you're right, that is a good plan. I don't know how possible it is but I'm surprised no one has levied it yet.
But I'm not sure how people will react to $200 nikes, or $100 jeans. Though maybe well, knowing that they're made by factory workers in America who probably are making a higher quality good because they have union protection (most likely) instead of some 6 year old in Cambodia stitching it together with his 3 remaining fingers. If jeans lasted 10 years instead of 1, that would probably be acceptable.
bowen on
not a doctor, not a lawyer, examples I use may not be fully researched so don't take out of context plz, don't @ me
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
Wait...what? Outsourcing has nothing to do with the taxes imposed on CEOs' personal purchases. Unless you're suggesting that the nation's wealthy citizens will mass-exodus to the 3rd world to get cheaper BMWs? I'm pretty sure it doesn't work that way... Any schmo with a median income job could jump over to Ethiopia and have roughly a billionty-eleven times the local median income, but somehow people aren't all over that.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
We can fix this particular facet in its entirety through trade policy. Any economic advantages jobs or products would have overseas can and used to be completely nulled at the border. You make it the only game in town.
Well it's not like the rich really make jobs. They don't just hire people to give them a wage. Supply/Demand and basic economics are what really create the jobs here, rich people just pay the check to get higher returns. As always, people are a commodity to be exploited, just like any other thing in business.
If they want to ship all the jobs to Malaysia, tax the shit out of import goods. Tax the shit out of call centers that transfer out of the country. Suddenly it's no longer cheaper to have that, you're right, that is a good plan. I don't know how possible it is but I'm surprised no one has levied it yet.
But I'm not sure how people will react to $200 nikes, or $100 jeans. Though maybe well, knowing that they're made by factory workers in America who probably are making a higher quality good because they have union protection (most likely) instead of some 6 year old in Cambodia stitching it together with his 3 remaining fingers. If jeans lasted 10 years instead of 1, that would probably be acceptable.
People already buy $200 shoes and $100 jeans in droves. I don't imagine it would go over well if those were the only shoes and jeans, or the minimum price for such (especially for kids, since you literally cannot make a pair of pants that will last a 5 year old 10 years, unless they're like covered in velcro straps or something), but it's not like the profit margin on currently-sweatshop-produced shoes and jeans is so small that they couldn't increase the production cost by orders of magnitude without staying in the black.
As much as leftist as this forum is, this is just plain goosey. You need an upper class with access to luxuries without taxes. Like it or not, they are the ones who run companies or do certain jobs that gives the rest of the society the method to live. You start imposing these taxes and the next thing you know, your job and the wealth behind it is shipping to India or any place in the third world where there isn't any restrictive taxes on things. Then maybe people can sit there gloating on how "equal" everyone is while they are out of jobs.
We can fix this particular facet in its entirety through trade policy. Any economic advantages jobs or products would have overseas can and used to be completely nulled at the border. You make it the only game in town.
Well it's not like the rich really make jobs. They don't just hire people to give them a wage. Supply/Demand and basic economics are what really create the jobs here, rich people just pay the check to get higher returns. As always, people are a commodity to be exploited, just like any other thing in business.
If they want to ship all the jobs to Malaysia, tax the shit out of import goods. Tax the shit out of call centers that transfer out of the country. Suddenly it's no longer cheaper to have that, you're right, that is a good plan. I don't know how possible it is but I'm surprised no one has levied it yet.
But I'm not sure how people will react to $200 nikes, or $100 jeans. Though maybe well, knowing that they're made by factory workers in America who probably are making a higher quality good because they have union protection (most likely) instead of some 6 year old in Cambodia stitching it together with his 3 remaining fingers. If jeans lasted 10 years instead of 1, that would probably be acceptable.
People already buy $200 shoes and $100 jeans in droves. I don't imagine it would go over well if those were the only shoes and jeans, or the minimum price for such (especially for kids, since you literally cannot make a pair of pants that will last a 5 year old 10 years, unless they're like covered in velcro straps or something), but it's not like the profit margin on currently-sweatshop-produced shoes and jeans is so small that they couldn't increase the production cost by orders of magnitude without staying in the black.
The federal and state governments could also (theoretically) use some of the revenue from import tariffs or additional sales tax on $200 shoes and $100 jeans to subsidize domestic production of more affordable clothing.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Do you really want the government picking winners and losers when it comes to corporations? If you label Mercedes a luxury car while a Ford isn't, you're playing some pretty serious favorites in the car market that will have a distorting effect. Assuming there is a sales tax, the guy who buys the Mercedes versus the guy buying the cheaper Ford is already paying a higher amount of tax on the purchase.
And the proposal to tax people for sending their kids to private school is just bad public policy. That would basically mean the government was imposing a financial punishment for caring about your kids' education. Isn't that the exact opposite of what we want to do when it comes to education?
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The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Do you really want the government picking winners and losers when it comes to corporations? If you label Mercedes a luxury car while a Ford isn't, you're playing some pretty serious favorites in the car market that will have a distorting effect. Assuming there is a sales tax, the guy who buys the Mercedes versus the guy buying the cheaper Ford is already paying a higher amount of tax on the purchase.
And the proposal to tax people for sending their kids to private school is just bad public policy. That would basically mean the government was imposing a financial punishment for caring about your kids' education. Isn't that the exact opposite of what we want to do when it comes to education?
While I agree with you, I don't think it's an intractable problem. Instead of higher income taxes for people with salaries above the median, which negatively impacts people who are forced to pay more for housing and such due to where they live, impose a higher sales tax on goods that are significantly more expensive than the median price. It might or might not actually be feasible... I imagine you'd have to restrict the scaling taxes to certain types of products and you would need to compare national average prices since the exact same good can cost wildly varying amounts depending on where you buy it. But it seems fair to me that if you want to buy $4000 shoes or a $2million car you pay a luxury tax.
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Do you really want the government picking winners and losers when it comes to corporations? If you label Mercedes a luxury car while a Ford isn't, you're playing some pretty serious favorites in the car market that will have a distorting effect. Assuming there is a sales tax, the guy who buys the Mercedes versus the guy buying the cheaper Ford is already paying a higher amount of tax on the purchase.
And the proposal to tax people for sending their kids to private school is just bad public policy. That would basically mean the government was imposing a financial punishment for caring about your kids' education. Isn't that the exact opposite of what we want to do when it comes to education?
I think your argument is a bit nitpicky, and I have to wonder if it's made in good faith, if you'll pardon the offense.
I agree that you can't just arbitrarily tax Product X because it has a higher social status than Product Y; Mercedes makes plenty of fleet vehicles and working trucks. But if you're spending $120k on a sedan from Germany, I think the national economy has an imperative to ask you to rather consider the $50k luxury sedan made in America and keep your money circulating in our economy, or pay a premium on a good that doesn't have a tangible benefit from the opportunity cost that also does little to benefit the national economy.
Same thing with the schools; if your local economy is to the point where you are compelled to send your kids to private schools, wouldn't those public schools greatly benefit from your patronage? Here are two different studies showing that, controlling for socioeconomic class of the individual student, there are no strong corollaries between higher achievement and private education in high schools:
Basically, private schools' most lucrative offer is that the kids of wealthy parents don't have to sit in old classrooms next to poor people's kids. That's pretty much the definition of "luxury": Something inessential but conducive to pleasure and comfort.
the taxing private school idea is kinda silly and in no way would help or accomplish anything other than pissing off people.
I mean, this is from that very same article you linked
Isn't that just because richer private-school kids can afford to be coached more before the SAT? No — remember that this study carefully controlled for socioeconomic status. Rather, it appears private schools do more to develop students' critical-thinking abilities — not just the rote memorization required to do well on achievement tests.
In short, today's study shows that sending your kid to private school — particularly one run by a holy order like the Jesuits — is still a better way to ensure that he or she will get into college. Just don't expect all education experts to agree.
If you're going to promote consumption taxes there really is no way to do it progressively outside of basically tying rates to income every year come tax day. Even then it likely wouldn't really work. It's going to be regressive and that's just the nature of things. However, the money doesn't just go sit in Fort Knox, you spend it. Spend it on programs and public services that overwhelmingly assist the poor and voila you have an overall progressive welfare state thanks to the totality of it. Maybe rich people are the only ones who can afford to drive a Bugati, but taking the bus entails waiting 4 minutes and paying a quarter. &c.
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
The simplest solution would probably involve extremely large luxury taxes levied on items with a large opportunity cost gap. Let rich people pay for the prestige they want. You want to send your kids to private school when the local schools are fine? Pay up. Mercedes instead of a Ford? Pay up. Armani instead of Old Navy? Pay up.
Do you really want the government picking winners and losers when it comes to corporations? If you label Mercedes a luxury car while a Ford isn't, you're playing some pretty serious favorites in the car market that will have a distorting effect. Assuming there is a sales tax, the guy who buys the Mercedes versus the guy buying the cheaper Ford is already paying a higher amount of tax on the purchase.
And the proposal to tax people for sending their kids to private school is just bad public policy. That would basically mean the government was imposing a financial punishment for caring about your kids' education. Isn't that the exact opposite of what we want to do when it comes to education?
That's just a problem of implementation. It'd be much easier to flag certain luxury items based on retail price. Just going by the car example (because retail would be a lot messier and we're not actually drafting legislation here), If your non-commercial vehicle costs >$60,000 flag the luxury tax.
Also, as it is we already tax people that send their kids to private schools. Personally I wouldn't be in favor of an additional tax, because they're freeing up bandwith of the public school their child would otherwise attend. That said, I wouldn't be in favor of a voucher or tax credit either.
That's just a problem of implementation. It'd be much easier to flag certain luxury items based on retail price. Just going by the car example (because retail would be a lot messier and we're not actually drafting legislation here), If your non-commercial vehicle costs >$60,000 flag the luxury tax.
Also, as it is we already tax people that send their kids to private schools. Personally I wouldn't be in favor of an additional tax, because they're freeing up bandwith of the public school their child would otherwise attend. That said, I wouldn't be in favor of a voucher or tax credit either.
Buy a new vehicle for $59,999.99!
Incidentally, property taxes and fines/levvies go to providing public schooling anyway. Why should there be an additional tax if you choose not to use those services
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
While I absolutely feel for people in NYC making $100,000 even with the increase in taxes on that money, they are still very wealthy.
Argh... No. They. Aren't. $100,000 isn't even "comfortable". All that amount is in NYC means is that you can pay the bills for your completely non-extravagent lifestyle without chest pains.
Again, someone in our extended family works in NYC. They drive 2 and a half hours a day to work just because they can afford to. They have a little rinky dinky trailer and he basically has $90,000 in income he can just flush down the toilet if he wanted. Which he does.
He must be making considerably more than $100,000 to have $90k in disposable/flushable income. At $100,000 your net take home is only about $67,000.
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Deebaseron my way to work in a suit and a tieAhhhh...come on fucking guyRegistered Userregular
That said, yeah fine, raise taxes on $100,000 incomes, but please don't say it's wealthy or imply that it's somehow a threshhold for ballerness. It really isnt.
People making $100,000 to $450,000 may already be paying higher proportional taxes than someone making a flat $1,000,000 or more because of a parallel tax system called the AMT. Apparently, raising rates actually reduces the number of people that fall into AMT.
Schools receive income based on the number of students attending them. They also need a threshold amount of funding (students) before they can pay for basic upkeep of facilities and staff and after that the marginal dollar value of each student increases. These are fixed costs which losing a significant portion of the student population would make them unable to pay.
If one made the sales tax start at around $20-$30 per item (and made special exceptions for other big ticket essentials) it would be much less regressive though.
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As it is, they'll ship your job to india if it proves to be more profitable than keeping you on. The tax the CEO pays on his porsche doesn't matter.
What you're essentially saying there is that we shouldn't tax items because if we do, rich people will spitefully get rid of our jobs. I mean honestly, with the wording presented, you're proposing we're being extorted. Which is actually a really good argument for taxing the ever living shit out of them and replacing them with people who can use the money responsibly.
That said, I think you meant that they'd leave the country and take the companies with them. But we rarely see that (more frequently, you see the company move, but the execs all stay in the US because it's a really great place to be rich), and quite frankly if your job was easy and cheap to outsource, they've probably already done so.
But the reality of the situation is that the tax rate on the rich, via income or luxury taxes, seems to have absolutely no impact on employment rates. So I'm not really seeing a problem with higher luxury taxes in order to adjust behavior in much the same way sin taxes are intended to do. Quite frankly if you're looking at a brand new Aston, chances are you don't give a fuck about the price tag getting padded out, you're buying it as a status symbol. And you're definitely not going to move to some mythical awesome country with a low tax rate so you can buy it without paying taxes. That's about as honest a threat as the whole lucky ducky "Ima quit my job and go galt because welfare is fucking awesome" threats.
Maybe I don't understand what you're saying.
If you're advocating Reaganomics, that's what's already going on, and it works for shit.
If you're saying that under higher luxury penalties, the ultra-wealthy will buy their goods from overseas, I struggle to understand how they're going to save money by buying houses, cars, and private schools in India or Vietnam and shipping them over here.
I find it hard to believe that a single person making 100k in any state is legitimately barely making ends meet. I say this as one: yes, I spend most of my money, and yes, most of it is wasteful luxury spending. I could own a cheaper place easily, but I like mine. It's a luxury to own it. I could own a far cheaper car, but I like mine. It's a luxury. I could eat out less and buy things on sale, but.. luxury!
I mean, that's what luxuries are: thing you like but don't need. If you have a shitload of luxuries you enjoy, you're not barely making ends meet.
Have 3 kids and a 200k household? That's what deductions for dependents are for: to ease the tax burden difference considering you have more people to take care of on that budget. But uh, you're still living a pretty comfortable life, and probably own a 40+ inch TV and everything else we just take for granted as not being an actual luxury until you compare it to people actually struggling to make a living.
Not all States have income taxes. Perhaps not coincidentally, these States are typically the easiest to live in and offer the most dollar utility.
Also, cities and states have control over things like property tax, which disproportionately affect property owners.
It ain't all apples and oranges, which is basically the root of the problem. In NYC, I paid federal, State, and city taxes, as well as union dues. My dad in East Texas pays only federal income tax and county property tax. Along with his farm subsidy, it's how he affords a 40 acre ranch on $40k a year.
on a semi-related note something that happens in new jersey is that a lot of wealthy people will purchase 5+ acre lots and assess it as farm property so it's 1) business property, and 2) has a lower property tax value. what ends up happening is they sell the lot at a gain for another like-kind property and end up not paying any tax on the gain (the gain takes away from the basis of the new property. if you start to develop a house there, then yeah I believe there is some clawback, but only a limited amount. Like, if you did the exchange for a 6 acre property, you could build a house on 1 acre and have the rest farm assessed and just like, keep a bee hive or chickens or something. it seems like a major way to avoid paying tax on accumulated wealth.
So the fact that the CEO of EAD makes less than the CEO of Boeing while simultaneously working a more difficult job, due to the structure of the company incorporating language barriers, and making better airplanes means...what, exactly?
Nobody needs an upper class with access to tax free luxuries. If everybody went Galt they'd be replaced by people who actually wanted to do their job. We certainly aren't suffering from a lack of room at the top at the moment. And the people who currently occupy it have hardly covered themselves in glory to suggest that their skills and talents are irreplaceable. I mean, I'll destroy the world economy for just 75k a year and tips. That's a bargain!
Property tax disproportionately affects people who don't sleep under bridges. Everyone else pays it since landlords don't just eat the cost for their rental units. Well, everyone aside from priests, &c.
Wait, people still believe this after the policies of 2000-2008 and the result we are all suffering through? Because what actually happened was that tax cuts on the wealthy drove jobs to India and China in pretty big numbers. Now correlation might not be causation in this, but lowering taxes on the wealthy sure did not create any jobs for us the last time we tried.
But what rich person is employing the hard working people working for MicroSoft? Bill Gates? So if he dies tomorrow all those people will be out of work? Nope. It is not the wealthy who gives the rest of us the method to live, it is every worker, from the bottom up.
And lets say that everything that happened with the US economy between 2000-2008 was a statistical fluke, your theory still can not explain the economical stability and high performance of Scandinavia and Germany, where even the wealthy have to pay taxes and follow the law.
Texas seems to just run a sales tax. But they also seem to just run a massive deficit and just mauled school spending last I looked.
Anywho, usage taxes seems to be where the thread was turning. If you wipe out income tax and instead sales tax and luxury tax, you need to sit around trying to tune it to get back to where we are now: making some form of progressive taxation system tracking along with income, without actually being able to look at income.
nitpick: the land-value component of the tax is eaten by the landlord; the tax on the property built atop the land falls on the tenant (or other taxpayers, as exemptions go) and landlord, depending on local elasticity of supply/demand for rental sites.
Ayup. This works very well, with a few provisos that we keep in mind that we are pretty bad at identifying luxury goods. Opportunity cost is a fictitious counterfactual, remember... and people can be pretty inventive at putting their income toward quantity instead of quality if we tax quality heavily.
Also, consumption taxes of this nature, even a broadly progressive consumption tax that evades the above problem, do very little about underlying wealth inequality - indeed that is likely to become and remain high. Taxing wealth is economically costly though, elasticity and all that. It is difficult to deal with wealth inequality via direct progressive taxation for the simple reason that the material quality of life of the middle and lower classes depends heavily on the quantity of accumulated capital that they can rent from their probably-wealthy-owners (welcome to capitalism!). And taxing wealth without discouraging capital accumulation is annoyingly difficult. It may be necessary to accept wealth inequality in order to achieve more a egalitarian consumption distribution.
Alternative:
INFLATION! HOORAY!
just so we're clear: this is basically nonsensical. There are states with very high taxes on luxury goods, right now. Observe their economic statistics.
More precisely: global movement of wealth to escape consumption taxes is only a concern for the government's revenue service (and it is not a terribly large concern, given that tax-free-zones in even very small countries fail to utterly ruin their economies). But taxing consumption more generally does not diminish the profitability of employing labour (it is worth thinking about the cases where it might, and thereby realize that those are not very plausible...).
Holders of nominal assets are not necessarily wealthy, it is just that the wealthy, by virtue of owning much stuff, also tend to own much nominal assets. But anybody on a nominal pension/etc. is also hurt by inflation.
It is worth being careful when considering inflation just to tax away nominal wealth, thus...
If you're comparing anything to people struggling to make a living, everyone's problems will always look petty, but it's not that ridiculous to look into a similar tax burden on people with sometimes dramatic cost of living differences as being a form of unequal tax burden. I mean, if you want to just talk comparatively, the average person in the DRC is doing far worse than Americans near the poverty line, but just because there's a greater injustice going on doesn't mean that this stuff isn't a problem that might be worth fixing.
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That was said with at least half a tongue firmly in cheek. Inflation is not magical. It does seem that the best way to help the poor is to push unemployment really low. Inflation can be part of that, depending on the circumstances, but so can plenty of other things.
I pay $1100 for rent where I live. I don't need to, I can pay $500 if I wanted too. But it is a luxury good I wanted so I pay more for it. That means jack shit about how much my income is taxed, and really, should have nothing to do with it. I could live in NYC for $2100, or across the river for $800. And my disposable income would increase immensely by living there. It's not like a box of cheeze-its is $10 a box in NYC. I spent a weekend and I think shit was cheaper there than where I lived at the little stores everywhere. If I want to fucking Rite-Aide on the corner where I live a bottle of soda would be almost $4. But then again, that's the convenience fee we're really talking about.
I guess the major risk with my proposal is that ultra-wealthy people may choose to just sit on their money, opting to go lower down the op-cost scale instead of paying the premiums on prestige.
Though I have a hard time believing that those people, when given the opportunity to save McDuck-levels of income, are just going to put the cash into money silos. Reinvestment, in anything, will have to occur at some point I'd gather.
While I absolutely feel for people in NYC making $100,000 even with the increase in taxes on that money, they are still very wealthy. Again, someone in our extended family works in NYC. They drive 2 and a half hours a day to work just because they can afford to. They have a little rinky dinky trailer and he basically has $90,000 in income he can just flush down the toilet if he wanted. Which he does.
Well it's not like the rich really make jobs. They don't just hire people to give them a wage. Supply/Demand and basic economics are what really create the jobs here, rich people just pay the check to get higher returns. As always, people are a commodity to be exploited, just like any other thing in business.
If they want to ship all the jobs to Malaysia, tax the shit out of import goods. Tax the shit out of call centers that transfer out of the country. Suddenly it's no longer cheaper to have that, you're right, that is a good plan. I don't know how possible it is but I'm surprised no one has levied it yet.
But I'm not sure how people will react to $200 nikes, or $100 jeans. Though maybe well, knowing that they're made by factory workers in America who probably are making a higher quality good because they have union protection (most likely) instead of some 6 year old in Cambodia stitching it together with his 3 remaining fingers. If jeans lasted 10 years instead of 1, that would probably be acceptable.
Wait...what? Outsourcing has nothing to do with the taxes imposed on CEOs' personal purchases. Unless you're suggesting that the nation's wealthy citizens will mass-exodus to the 3rd world to get cheaper BMWs? I'm pretty sure it doesn't work that way... Any schmo with a median income job could jump over to Ethiopia and have roughly a billionty-eleven times the local median income, but somehow people aren't all over that.
People already buy $200 shoes and $100 jeans in droves. I don't imagine it would go over well if those were the only shoes and jeans, or the minimum price for such (especially for kids, since you literally cannot make a pair of pants that will last a 5 year old 10 years, unless they're like covered in velcro straps or something), but it's not like the profit margin on currently-sweatshop-produced shoes and jeans is so small that they couldn't increase the production cost by orders of magnitude without staying in the black.
The federal and state governments could also (theoretically) use some of the revenue from import tariffs or additional sales tax on $200 shoes and $100 jeans to subsidize domestic production of more affordable clothing.
And the proposal to tax people for sending their kids to private school is just bad public policy. That would basically mean the government was imposing a financial punishment for caring about your kids' education. Isn't that the exact opposite of what we want to do when it comes to education?
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While I agree with you, I don't think it's an intractable problem. Instead of higher income taxes for people with salaries above the median, which negatively impacts people who are forced to pay more for housing and such due to where they live, impose a higher sales tax on goods that are significantly more expensive than the median price. It might or might not actually be feasible... I imagine you'd have to restrict the scaling taxes to certain types of products and you would need to compare national average prices since the exact same good can cost wildly varying amounts depending on where you buy it. But it seems fair to me that if you want to buy $4000 shoes or a $2million car you pay a luxury tax.
I think your argument is a bit nitpicky, and I have to wonder if it's made in good faith, if you'll pardon the offense.
I agree that you can't just arbitrarily tax Product X because it has a higher social status than Product Y; Mercedes makes plenty of fleet vehicles and working trucks. But if you're spending $120k on a sedan from Germany, I think the national economy has an imperative to ask you to rather consider the $50k luxury sedan made in America and keep your money circulating in our economy, or pay a premium on a good that doesn't have a tangible benefit from the opportunity cost that also does little to benefit the national economy.
Same thing with the schools; if your local economy is to the point where you are compelled to send your kids to private schools, wouldn't those public schools greatly benefit from your patronage? Here are two different studies showing that, controlling for socioeconomic class of the individual student, there are no strong corollaries between higher achievement and private education in high schools:
http://www.cnn.com/2011/POLITICS/07/25/beck.norway/index.html?hpt=hp_c1
http://www.time.com/time/nation/article/0,8599,1670063,00.html
Basically, private schools' most lucrative offer is that the kids of wealthy parents don't have to sit in old classrooms next to poor people's kids. That's pretty much the definition of "luxury": Something inessential but conducive to pleasure and comfort.
I mean, this is from that very same article you linked
like, how would taxing that help
That's just a problem of implementation. It'd be much easier to flag certain luxury items based on retail price. Just going by the car example (because retail would be a lot messier and we're not actually drafting legislation here), If your non-commercial vehicle costs >$60,000 flag the luxury tax.
Also, as it is we already tax people that send their kids to private schools. Personally I wouldn't be in favor of an additional tax, because they're freeing up bandwith of the public school their child would otherwise attend. That said, I wouldn't be in favor of a voucher or tax credit either.
Buy a new vehicle for $59,999.99!
Incidentally, property taxes and fines/levvies go to providing public schooling anyway. Why should there be an additional tax if you choose not to use those services
Argh... No. They. Aren't. $100,000 isn't even "comfortable". All that amount is in NYC means is that you can pay the bills for your completely non-extravagent lifestyle without chest pains.
He must be making considerably more than $100,000 to have $90k in disposable/flushable income. At $100,000 your net take home is only about $67,000.
If one made the sales tax start at around $20-$30 per item (and made special exceptions for other big ticket essentials) it would be much less regressive though.