I’m looking for serious answers to understand the mentality. Please avoid the snark. I know it’s low hanging and tempting but I’m pretty sure most, if not all, of use here on Lemmy “get it”.
I just can’t get out of my head how absurd it is that we, in the U.S. anyway, put so much of the tax burden on working class folks instead of those most benefiting from our economic system.
It seems to me the standard deduction should be at least the median personal income (~$40k) if not the mean(~$60k) with progressive tax brackets adjusted to cover costs thereafter and possibly a supplemental wealth tax.
But I’m not an economist so trying to understand why I’m wildly wrong and this would be a terrible idea either from an economic perspective or from a political perspective.
The argument is that the rich and powerful are rich enough and powerful enough to corrupt the system and not have to pay taxes.
Its basic selfishness that people seem to not grow out of. Even the poorer class act selfishly so there is no difference when they are rich.
So the richer you get the less you want to contribute to gov programs and what not. Its always the “why would i want to give money to a gov that doesnt know how to use it? Or why is it my problem to help people who are lazy?” They are seemingly reasonable arguments but actually are immature
If you can convince the lowest white man he’s better than the best colored man, he won’t notice you’re picking his pocket. Hell, give him somebody to look down on, and he’ll empty his pockets for you.
-Lyndon B. Johnson
I often wonder this myself. Why do rich people, who have so much wealth that it is unimaginable to us, not want to pay any taxes? It hampers the economy, makes it less adaptable to contractions, and makes the lives of the vast majority of the population much more difficult. At a macro level, I really don’t see any benefits to it. So, here’s my best guess.
- Power & control. A poor and uneducated population is much easier to control than a financially stable and educated population. If people are fighting each other for survival and minimal luxuries, then they can’t organize to improve their lives as a whole. Add to that being uneducated, they get their “education” via the media and are easily manipulated via propaganda.
- Strength. Similarly, they want to feel strong by manipulating the system to get what they want. By getting the government to do what they want and finding loopholes to reduce their burden, they feel stronger than others. This gives them a sense of strength that they seek, which ultimately means safety for them.
- Greed. They just want the numbers on their bank statements to be higher. Some people are proud of numbers, so the larger the number, the more proud they are. It doesn’t matter if the number is relative, so the value doesn’t really have any practical impact on their lives. They just want a larger number. I swear, sometimes we should just print fake bank statements wich ridiculous numbers, give them to the wealthy, and congratulate them. That’s what they want: to be envied.
- Lack of care. They literally do not care about others. It’s not even an issue that fits in their heads. Find someone that is politically right-leaning and ask them what they think about the economic situation in a poor and war torn country. Their response would be indictive of how the wealthy think about us.
- Narrow & short sighted. They can’t see the whole picture. They’re focused solely on their own relative position on the hierarchy and can’t consider how their desires will impact the whole system in the long-term. They can’t see that if the lower classes are complacent and uneducated, their products and creativity suffer. Look at Russia where people contribute just enough to get paid and all creativity is to please the elites. This stifles academic and scientific progress while also damaging integrity. People don’t contribute to the economy because they have a personal drive. They contribute to please their superiors. This results in a terrible economy full of corruption and lack of ingenuity. The wealthy can’t see that because they don’t care about it. They just want to feel strong and in control.
IMO the most valid argument is that there are way more people making a middling income than people making a high income, so any reduction in taxes for those people would need a proportionally much larger increase in the upper brackets to maintain the same level of tax revenue, if it’s possible to make the numbers work at all depending on how much of a tax break you want to give. The minimum amount to be taxed is set based on where the tail end of the bell curve is, the number of people who are poor enough not to be taxed is small.
Of course there’s also the fact that the richest people don’t get their money from having a job at all, it’s all in investments, so messing with income tax rates doesn’t even affect them.
To build off of this, if you collect $1000 in taxes from a million people and you’ve just pulled in a billion dollars. With 300 million people in the country that’s a lot of tax dollars.
Obviously if you can tax 1000 out of every million dollars in wealth and individual earns in a year you can easily collect far more in taxes given how many multimillionaires will see their wealth increase by tens or hundreds of millions in a year.
This is all super reductive for simplicity. It’s worth looking at how the super rich are able to avoid paying taxes. Are they not paying taxes because they’re doing things with their money that is directly incentivized and generally better for the country than if they simply hoarded the same money, such as running the money through charities, clean energy installtions, etc? I’m honestly asking because i really don’t know and I dont have the time right now to pull at that thread and research the question
And that’s the definition of capitalist vs working class. A top surgeon makes a lot of money yes, but they are still working class because their main income is from salary.
Earning a big salary or buying some stocks don’t make anyone a capitalist. Being the owner of Johnson and Johnson, hiring an administrator and not working a day in your life does. And that’s the kind of people who get richer with any crisis, holds the biggest part of Johnson and Johnson profits, and pays no tax at all.
Incompetence at being selfish.
They think they’re being selfish, but they fucking suck at it. They think selfish means “I don’t want to pay taxes but fuck you you still have to pay I win you lose”.
If they were even slightly competent at being selfish, they’d realize in about three seconds that doing things that way makes your town (and more) stressed out and shitty, and you still have to live there, and you can only build walls so high.
And even if we got rid of physics so you could build impossibly tall walls, now you’ve definitely lost because you had to build them in the first place, instead of being even remotely sensible and building a world where your neighbor would be happy to see you, or thrive peacefully and leave you be.
The “economics” of it are mostly about couching this damning and embarrassing realization in big words so that everybody stops paying attention because they yawned and lost interest.
Because fucking over the poor is how the rich stay rich.
This is political science 101
The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?
You might say this is what we should do, but I think it’s far from obvious.
If you earn $40k and the first $13k is untaxed, then you’re paying no taxes on about the first third of your income. And from there you begin paying in the lowest bracket.
If you make $100k, and the first $13k is untaxed, that’s the first 13% of your income, not 33%. And some of your income will be taxed at levels higher than anything the $40k earner pays. I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.
The fact that there’s one standard deduction for the whole country is insane, since $13k means something extremely different in different places.
But across the board I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.
So I don’t really get your question. But who am I fooling? I’m going to be downvoted into oblivion for going against the popular narrative on this.
The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?
Half or more depending on mean or median. But that’s just a starting point for the discussion.
You might say this is what we should do, but I think it’s unreasonable to say that it’s a total head scratcher why we don’t already.
That’s not what I was intending to ask. Sorry if I phrased it poorly. I’m trying to understand the arguments against it because it’s what makes sense to me.
I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.
I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for be the ones who contribute the most. And those that are seeing the least benefit be exempt.
I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.
This is almost exactly what I suggested. I think we’re basically on the same page.
Yeah I think we may only differ on degree, and yes some of my confusion about your post came from phrasing. There are still some phrasing points I’m struggling on.
I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for
The poor benefit from roads, schools, firefighters, Medical/Medicaid, and utilities as much as anyone. But I think you had the super wealthy in mind. “Those who benefit from infrastructure” is an odd way to pinpoint the super wealthy.
be the ones who contribute the most.
This part is already true. Progressive tax brackets have them contributing the most as a proportion of pay, and far and away the most in absolute numbers.
And those that are seeing the least benefit be exempt.
The entire lower 50-60% of the economy is an extremely inclusive notion of “those who benefit the least.”
Again, phrasing.
I think the logical thing is to have those who most benefit from the infrastructure our taxes pay for
The poor benefit from roads, schools, firefighters, Medical/Medicaid, and utilities as much as anyone. But I think you had the super wealthy in mind. “Those who benefit from infrastructure” is an odd way to pinpoint the super wealthy.
Those who “most benefit” would be those who have been able to leverage the infrastructure and security provided to profit wildly. Not those who are just scraping by.
I think we do agree on all but degree like you said. And maybe mean/median income is too high. I was just trying to come up with a somewhat natural but objective breaking point. I think a more reasonable but also more subjective one might be the “living wage” which will certainly be much lower than mean/median but also much higher than $13k.
P.S. Tangentially related, I found this living wage calculator which put my current LCOL residence at ~$42k and my previous HCOL residence at ~$57k. Turned out to be much closer to Mean/median than I expected.
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Going against the popular narrative? What would that be, that progressive tax brackets are the very fucking least we can do (and is clearly not enough)?
No man read the top dozen voted root comments and you will see the narrative: rich people are using their political access to fuck you and get richer. The OP doesn’t even acknowledge progressive tax brackets. The entire system apparently is specifically designed to direct money out of starving people into the super wealthy. That’s the narrative. It’s right up there with “CEOs don’t do anything” and “you shouldn’t recycle because it’s just a scam cooked up by Big Plastic.” It’s actually hard to be a good liberal when those around me are dripping with this kind of horseshit nonstop.
Just from a game theory perspective, a distributed group of people who are unorganized are unable to get their concerns addressed properly when it comes time to writing tax laws.
The rich and powerful, by virtue of being rich and powerful, have a voice in writing the tax laws. The distributed poor, do not. So it’s much easier to satisfy income goals by taxing the group who has no feedback loop to the politicians
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Something I never see mentioned is the risk of “brain drain”. If you tax the rich too heavily, there’s a possibility that they’ll just move to another country with lower taxes, taking their companies (and jobs) with them.
That’s not brain drain. Brain drain is when high qualified people leave their country, mostly because of the lack of infrastructures costing them opportunities for studying or working in their respective field.
What you’re talking about is capital flight. This is an issue that is systematically raised as a counter-argument by liberals in debates on taxation. The problem is that it is seriously overestimated:
- Leaving a country is a lot more complicated than it sounds: you lose your family, your friends, your culture, your habits. Many millionaires who leave their country end up coming back after a few years.
- You can’t relocate your real estate investments.
- Going abroad doesn’t exempt you from paying taxes (especially exit taxes).
- A country that wishes to do so can prohibit the relocation of a profitable company, or even nationalize it.
- Many rich people who threaten to leave if taxes are raised end up doing the math: if there’s a profitable business, they’ll stay. And in a country that finances its infrastructure soundly and has a good distribution of wealth, there’s profitable business to be had.
raised as a counter-argument by liberals in debates on taxation.
Which liberals are defending heavy taxation of the working class?
They don’t
Not so much defending heavy taxation on the working class specifically, instead focusing solely on why the wealthy and mega corps have to have a low tax rate
Not sure if I agree. If you’d do that you’ll lose CEO’s, not the highly skilled workers that actually do the work…one might wonder howuch would be lost there.
Also, where would they go? Any developed country will have it much, MUCH “worse” for them than the US and the alternative is moving to heavenly places like Russia or China. Good luck with that.
You’re equating wealth with intelligence. Bad take.
Rich people want to get richer. Rich people can afford to bribe/wine and dine/trade favors with the select few who actually write the law.
That is all. Nobody enjoys paying taxes, but the rich are just the ones in a position to actually do something about it.
Blind greed and incredible selfishness.
Basically you’re trying to reason madness.
The poor should pay the taxes because “only the little people pay taxes”.
There are many and they’re all bad.
