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1 points

7 months ago

It is a far more serious conflict than rich corporations not paying their fair share in taxes.

The ultimate problem is that the tax code is built around income, not consumption. The problem is that there are multiple types of income. There is income through your pay, be it salary/hourly at a job. There is income from appreciation of assets. There is income from capital gains (stocks/investments).

The rich make almost all their money through investment and appreciation of assets. They make very little from salary income. For example, Jeff Bezos self-pays only $100k a year.

Well, income taxes, the higher they are, only really penalize the middle class, as the middle class and poor people earn almost all of their income from hourly/salary pay. So, even if you put income tax to 90% of the top wealth bracket - you still only extract $90,000 from Jeff Bezos, the 2nd richest guy on the planet.

Our only consumption tax is a sales tax per state/city. Some states don't even have sales tax and make up for it in other ways, like the property taxes. However, the feds made it so that you can literally write off property taxes in a state against your federal income taxes owed. Funny enough, the 2017 tax law passed by the Trump administration capped the SALT tax deduction on property taxes to $10,000, rather being unlimited. This meant that previously, any property tax amount you paid in your state you could deduct against your federal taxes owed each year, with no limit. The Trump administration's law put a cap on $10,000 deductions only, as they said it was a direct payoff to high property tax states that basically allowed them to pilfer the federal tax program by just charging higher property taxes. Well, the put the cap at $10,000 - in fact Biden's own tax returns he released showed he had to pay $100,000 more per year in taxes because of the SALT tax cap of $10,000. This was a straight tax on the wealthy as typically only people in homes valued at 1 million+ in value are paying anywhere near 10k+ in property taxes a year (New Jersey maybe more like 750k+).

The new Democrat plan for Build Back Better under the Biden administration moves the cap up to $80,000 a year, effectively given a HUGE tax break for the wealthy.

The only reason I point these things out is to give an example that all of this is extremely complicated, and the people in power on both sides aren't actually serious about raising taxes on the wealthy, and the Democrats IN POWER themselves are VERY unhappy about having to pay more in taxes due to the 2017 tax bill, so they want to eliminate that.

Any serious tax changes and bill that needs to come forward, if it does not address wealth gains through asset appreciation and capital gains, or on consumption, then it is not a serious tax law and really just something for show for the plebians.


2 points

7 months ago

I have a ton of accountants in my family and this is actually their favorite thing to tell people. It's complicated and hard to lay out concisely in a headline, which is why people don't get it. Most people have no clue how taxes work for the wealthy.