The few investigations following the aftermath of the Panama papers recovered a couple of billion dollars after several years of investigation.
The estimated evasion _in_the_EU_ using these off-shoring vehicles in Panama is around 100 to 200 billion. [0]
The 2023 Defense spending of the entire EU member states was about 270 billion.
What will happen is income taxes will increase for high earners who cannot evade income tax. And the 'super' rich will continue to own nothing on paper.
> income taxes will increase for high earners who cannot evade income tax
i.e., those pesky jumped-up merchants who think that $1M a year in wages entitles them to speak to us.
And who, despite what seems like limitless wealth to the lower middle class (I would know), don't have nearly enough to really influence on a major scale.
That is my question for all those prognosticating an upcoming violent uprising. The disparity in power has only risen in the last 100 years. A single well armed solider could kill tens to hundreds of civilians in minutes given the right conditions. How do you rise up in the face of such disparate conditions?
You seem to have missed the last twenty five years where the people of Afghanistan and Iraq beat the world's most powerful military and unlimited budget.
Asymmetric warfare is only going to get easier for the underdog with the advent of cheap drones.
If I was calling my campaign a victory, I’d be able to walk in my new territory without fear of being attacked and killed.
It might be a military success by some sort of conventional military definition. But it was a complete failure and utter waste by pretty much every other measure.
The person I originally responded to claimed that "the people of Afghanistan"(Actually the Taliban) defeated the "worlds most powerful military".
This is objectively false. Eventually, occupation became politically hard to motivate for an American public that was tired of war. But to claim the Taliban beat the US military is ridiculous. FWIW I was there.
People struggle to wrap their head around logic like yours because it is essentially just being pedantic.
- Before the war the Taliban controlled Afghanistan.
- The US (+ Allies) invaded and conquered the country.
- 20 years later the US Military has left the county.
- The Taliban now controls the country again.
- At no point during that 20 years was the Taliban actually "defeated" like claimed.
Whether you like it or not "Money and patience ran out" = losing the war.
There are many other "lost wars" where they were lost for the same reason. The most obvious one in this context being the Vietnam war.... which is also a popular one for people to argue that the US Military didn't lose either.
I was under impression that the Taliban is in charge of things in Afghanistan in 2025.
Is this not the case?
And furthermore to my original point do you think that the ubiquity of cheap drones on the battlefield in 2025 would make similar attempts to conquer Afghanistan by the US easier or more difficult if the US were to try the same again?
You are not at all addressing the point I made, that the military campaign against the Taliban was a swift and successful action. You stated that the Taliban beat the worlds most advanced military, which they didn't.
That the subsequent occupation ended with the Talibans return to power has nothing to do with the war itself but has political reasons.
In my opinion, the occupation could have ended completely different with a longer commitment. Unfortunately, the Iraq invasion happened and the American population had little long term interest in nation building, two nations at once.
FWIW Iraq and Afghanistan are very different places.
But this has nothing to do with the military campaign itself. When I was there and where I was(2010, northern Afghanistan), it was a fairly peaceful place. Things were progressing in the right direction.
Regarding your second question, I don't think that the Taliban would have great use of drones considering that we could use essentially the same counter measures we used against remotely operated IEDs(jamming).
Ukraine does not have access to the same equipment we did in Afghanistan.
EDIT:
This article pretty much reflects my views on what went wrong. The US government half assed the occupation and withdrew too early.
I'm not addressing the point you made because it's nonsensical.
Could you imagine a different set of circumstances where the year is 1950 and Adolf Hitler is still Fuhrer of the Third Reich and someone is arguing that America won WW2?
America lost in Vietnam, they lost in Iraq, and they lost in Afghanistan. The sooner you come to realize this and that your time spent in Afghanistan was a waste the sooner you'll have a more accurate worldview and can make better decisions than to sign up for what was at that point an obviously pointless war.
> I don't think that the Taliban would have great use of drones considering that we could use essentially the same counter measures we used against remotely operated IEDs(jamming).
Doesn't seem to be working out for either side in Ukraine.
No, I made a specific argument that the people of Afghanistan defeated the US military.
This absolutely did happen and their long fought victory has saddled the US with an tremendous monetary debt and social debt in the form of a fractured American society the consequences of which are an increasingly authoritarian America that is brutishly lashing out at their allies in that conflict.
America's loss in that conflict has cost America far more than we can imagine right now and the cost is only increasing by the day.
Exhausting the enemy’s desire to continue a fight is not only a way of winning a war militarily, most military victories are achieved that way; the surrender to the Taliban was not unusual in that regard.
That isn't what happened and there was no surrender. The commander in chief made primarily a political decision, and politics was the only motivation for the withdrawal.
Yes, Trump’s release of Taliban priosners and subsequent surrender of Afghanistan to them was a surrender.
> The commander in chief made primarily a political decision
Yes, the decision to abandon a war is always a political decision. It is, in fact, the political decision that every act in war is directed at getting the enemy to make.
There's this weird and frankly dolschtosslegende-ish trend in America post-Vietnam to characterize American victories in war as military and American losses as “political” as if the two were orthogonal categories, but the only military victory is achieving the desired political end, and if you feel like you were “winning militarily” and didn’t do that, then you just didn’t understand the context of the war and your sense of victory was misplaced.
Only after a voluntary retreat, so that is irrelevant since they didn't have power at the time of the treat, and were not a factor in the decision to retreat.
> It is a weird definition of "victory", when the end of the war was a hasty and poorly executed retreat.
Of course it was a victory. The Taliban were ousted within weeks and then the place was under US control for 20 years. If it wasn't a victory, the last 20 years would have been like the last year instead of what they were like.
A voluntary retreat is not a victory. You are arguing it is, which is extremely odd.
> Of course it was a victory. The Taliban were ousted within weeks and then the place was under US control for 20 years.
If the victory conditions were to be bogged down for 20 years wasting resources in an occupation that netted no benefits, only to have your enemy be back in the following day when you do your voluntary retreat, those are the most retarded victory conditions ever spelled out.
It would be like claiming victory against the Nazis if after some years both the US and USSR left Germany, and in the following day the Nazis were setting up concentration camps again.
I think you're taking the analogy too far with that, although it's my fault for using an analogy that makes it so easy.
My point was simply that the US had complete dominion over the area for 20 years and left voluntarily, not due to any pressure from the enemy. If you don't want to call that a victory, fine, whatever, but it doesn't seem like a surrender or loss to me.
Technology is a race between offense and defense and right now we're seeing offense leapfrog defense.
The status quo that we've known our whole lives has meant that anyone trying to assassinate a powerful figure will only get one shot at it before they're caught which does not allow them to learn from their mistakes and sends a chilling message to others who would do the same.
With remote controlled or autonomous drones the dynamic changes because people can operate from a distance -- perhaps even in an entirely different country that doesn't extradite. What's the defense against that?
At the end of the day the attacker only has to succeed once whereas the defender has to succeed every single time.
There may come a time where the ultra-wealthy and powerful decide that it isn't viable for them to be out in public due to the security risks so they will retire to a gilded cage -- which is still a cage -- and what's worse it reduces the search space for attackers to find them.
This doesn't even get into the near future advancements in biotechnology that will allow small groups of dedicated people to develop biological weapons that selectively target a wealthy person's family -- how can they defend themselves against that other than going into a fully sealed environment?
At the end of the day it'll end up being easier and better for these people to just make decisions that benefit the world at large instead of decisions that benefit themselves to the detriment of everyone else.
If you piss less people off less people want to kill you and in fact more people will want to defend you.
What are they going to do, pack up all the factories they own into a suitcase and fly away with them? Oh wait, they already gave them all away to China? So what's suppose to be the downside? Where's the threat?
That's from 2006 and yet, France still roars along even without the rich who were apparently so un-attached to where they lived that they'd rather ditch the country than pay their taxes.
What exactly is the argument made by all these alarmist "who will think of the the wealthy"? Tax the rich and many leave, so you don't get as much tax revenue. Don't tax the rich and you just don't get the revenue. The implication in all these seems to be "well then why not just lower taxes so then the wealthy will grace us with their presence?"
Um, because they're not paying their fair share, and the few who leave don't lead to a net loss in tax revenue/economic prosperity, that's why.
Everything in that article seems quite twisted in its presentation. Quotes like the following:
> Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.
The implication in that quote is "$2.6 gained but $125 lost, wow what a bad tax scheme", which is horribly irresponsible presentation. That's $2.6B/year in increased yearly tax revenues, but a loss of $125B/8 years (1998-2006) in capital, e.g. assets of some kind in the country. In most real-world cases where most of that flight happened early in those 8 years and the year-over-year capital flight goes down as folks acclimate to a tax regime, that's a totally acceptable trade off! In fact, that trade off might be a HUGE boon to France in the near term, let alone the long term. To actually know though, we need tons more information, information that isn't presented at all.
In short, bad article quotes rich guys who don't want to pay taxes saying "our life is so hard now that we've left a country that we liked but not enough to pay taxes on our insanely valuable assets, and that's actually hurting you more than us, so you should totally lower the tax rates on us."
i think the cost is seen more in opportunity losses. “if the rich investor leaves then who will pay. for the hermitage!”, as if investment is not entirely globalized at this point.
There’s an opening, right? Right or wrong, our (USA) allies are a little skeptical of the us at the moment, and France does still have a defense industry. If they can kick it into high gear and start selling more arms to their fellow Union-members, Europe can arm itself, and France will get some nice middle class engineering jobs.
Seems great for everyone other than US defense contractors.
> "They were asking me to pay taxes on money I didn't have," Payre said. "I had no choice but to leave the country."
> 1997, he owned shares that were worth $110 million -- on paper. French tax authorities required Payre to pay a wealth tax of 2.2 percent on the shares, based on what the shares would have been worth had he sold them at the market's highest point.
> But Payre said that he didn't have access to them because of stock market regulations that limited his ability to sell and that, in any case, a market dip had devalued the shares below that peak.
When you tax wealth, like say land or stocks, if the person is illiquid, they have to sell their assets to pay the tax. I would imagine that markets would crash every tax cycle due to people trying to pay their tax obligation.
Well, say you inherited 185 acres in the middle of nowhere that is valued at $500K. You make $150K a year. You can't really do anything with the land, it's all scrub brush by now and the government wants 30% in wealth tax to tune tune of $160K. What do you do?
Say you put all your savings into the market. You have $400K in assets and the government wants 20% of it ($80K), you either tighten your belt or you sell assets.
The wealthy, of course, will be in much better shape to handle this than your average guy who invested some of their income.
There's a big difference between a wealth fun and managing nationalized businesses. As a business owner, you're directly invested into your business doing well. And you have lots of knowledge about your business details. Some government clerk who ends up controlling your business doesn't have either.
This happens every time. Socialist government nationalizes businesses, drives most of them into the ground.
France seeks to solve its reckless spending problem by increasing taxes on the rich, and setting up yet another rediscovery of the Laffer curve? I can hardly believe it!
Why? The rich can easily diversify where there money is located, so their country being invaded wouldn't impact their wealth to much. They can also flee more readily than anyone else as they probably have their own jet. It would protect their nice house(s) in that country, but how much is insurance from invasion worth...
> Why? The rich can easily diversify where there money is located
Because you want to be in Paris. We’re also entering another xenophobic era. There is an argument to be made that the safest place for a Frenchman is probably in France. (Obvious counterpoints to that. And I’m speaking as an immigrant American.)
That might be the stated reason. It attempts to increase the overall tax take by increasing personal taxes on the rich, which will allow a new generation of bureaucrats and economists to re-learn the lessons that are already in the textbooks.
You know that the Laffer curve has basically no empirical support, right? Like it seemed to apply at really high levels of marginal tax (75%+) but there's been no replication at any lower levels.
The only economist I still here talking about it is Laffer, for obvious reasons.
If you are really pointing out the lack of conclusive evidence for the effects of a single factor in a complex real-world economy, you may have spent too many years in education playing with models and simulations, and too few years in the real world.
> If you are really pointing out the lack of conclusive evidence for the effects of a single factor in a complex real-world economy, you may have spent too many years in education playing with models and simulations, and too few years in the real world.
That's some quality assumptions you're making there, but whatevs.
You're the person who brought up the Laffer curve. Apparently (so Wikipedia tells me) https://en.wikipedia.org/wiki/Laffer_curve (section income tax rate as which revenue is maximised) around 65% is the point at which taxes stop being as effective.
That's interesting to me as I would have thought it was lower.
Note that because of how economics work, this number is from correlational data so is probably not as robust as an experimental approach might be (but unfortunately that's basically impossible to implement).
Both the French and the Brits have nukes. They're at no risk of hostile foreign invasion and everybody knows it. Entire libraries of books and whitepapers have been written about it.
If it were about self-defense: Build more nukes, build some mobile launchers capable of also launching targeting satellites, maintain the missile and submarine fleets, and your job is done. This can be done on current military budgets, or even smaller budgets.
It's not for "self defense". It's for foreign adventurism and geopolitical posturing. Like the opposite of realpolitik.
Besides, waging proxy wars is very far removed from self-defense.
Building outposts in, e.g., Cameroon to ward against Russian aggression over there is perhaps justifiable in some abstract respect, but it's rather the opposite of self-defense. (Without getting into complicated game-theoretical "we have to stop them over there so we don't fight them over here" justifications, which have long been discredited and have even become something of a joke.)
Oh no, the rich are leaving. Hope they manage to fit their assets into cabin baggage.
High paid workers, due to their skills are way more mobile than asset owners. I can be a software engineer in the Bay or Canary Wharf, but if I am a real estate tycoon, it’s not like I can take British homes with me to the US.
Europe needs to pay for its defense since the US is no longer willing to fund it. So it's either higher taxes (on people who can ostensibly afford it) or removing social programs.
Since the latter is absolutely political suicide, there is an attempt to do the former.
What's the worst that could happen? It's not like the rich pay taxes anyway - they just setup foreign shell companies (a la Panama papers).
Tax the assets, make the game fair for everyone - for both workers and people living off wealth. Only then we will see wealthy people start to create new productive assets. It doesn't matter if they leave - their assets will still be in our countries. If they don't want them - we will have someone not as greedy own the assets that will benefit all of us.
This whole rearmament talk makes me sick, it is as if Trump and the MIC have already won. Especially in Germany being affronted for questioning rearmament is insane.
Meaning it'll fail like all previous attempts and this will be yet another tax raise on people having a decent job, but nowhere near rich.
What people imagine this means is a tax on rich people. An appartment in the center of paris costs about 10.000 per month. If you calculate how much you need to own to afford that on interest income alone, it's 120000/4% = 3,000,000. Make it 4 million to cover eating out every day as well. That would be the lowest level I would see as super-rich.
But wealth tax, where it exists (e.g. Switzerland) starts at 111.059. This is in a country where a downpayment for a basic apartment would be at least 160000 (but more likely 200.000). So even in famously not-super-low-but-still-pretty-low-tax-Switzerland it's mostly taxing what you would call "professionals". People with a decent, but not spectacular, job (accountant, programmer, ... not FANG wages or doctors). Oh, and looking at the country's finances it becomes immediately clear: Switzerland is low tax because it also has very low unemployment/social support and very low pensions.
The solution to this USED to be inflation, government deficits of 10% even 20% in Southern Europe (before the euro was introduced, which transferred control of inflation to the independent ECB, preventing government deficits financed by inflation, as was the norm in the 1980s and 1990s for example)
French oligarchs will flee to the Galt's Gulch the neo-monarchists are building here in the US. Then, when the US electorate wrenches control back, they'll all get the same treatment here. Eventually they'll end up in Dubai.
Authoritarian regimes aren't very pleasant places to live, which is why Russian oligarchs send their families abroad.
Eventually they will have farted in all the elevators and they'll have to sit in their own stink.
The super-rich are already leaving Britain[1] so realistically if they want to raise more money they'll just tax workers a bit more since they're less economically mobile. No matter how much European politicians try to deny it, the Laffer is real, and long-term uncompetitive tax policies are not good for government income.
So, lots of foreign guys who were not paying taxes in britain while benefitting from a temporary exemption and that would leave as soon as this exemption ended, left early because the exemption period was shortenened.
Good. They were making houses more expensive and not paying taxes anyway.
What do you mean by donations? A 'donation' is the typical way to refer to giving money to a charity. Are you saying that charitable donations should be taxed?
Build a bunch of apartments above the grocery store. Then divide the land tax across all floors. Voila, the grocery store lowered its tax.
If the startup is able to produce a lot of value without taking much land, shouldn't that by encouraged? The employees will all buy houses with their earnings and pay tax on that land. They'll invest their money in other companies that also pay land tax. They'll buy groceries, supporting the store you mentioned. Etc.
The startup's URL is also "land" and should be taxed.
It was conceived in a time when all wealth arose from land, and doesn't account for a service or knowledge economy.
The ultra rich don't get that way from accumulating land, they accumulate intangible contracts and earning rights, 1s and 0s on a server.
The only answer I have heard from georgists is that the costs would would be passed from all of the teachers, farmers, and laborers to the ultra rich.
If that that were true, we could just replace everything with a sales or value added taxes.
I find that georgism appeals to a segment of people who are entirely preoccupied by urban real estate prices, and haven't thought through the implications for the broader economy
> Examples include […] and portions of the electromagnetic spectrum. Supply of these resources is fixed.
I even saw some folks argue that IP should be considered a form of land, although I’m not sure if this is a real opinion or some very-online-economics silliness. Anyway, maybe worth looking into.
—
> If that that were true, we could just replace everything with a sales or value added taxes.
I don’t see how this really follows. Land value is more like a wealth tax than an income tax, right? In the sense that it taxes something held, rather than inflow/outflow.
>I don’t see how this really follows. Land value is more like a wealth tax than an income tax, right? In the sense that it taxes something held, rather than inflow/outflow.
I agree it is on possession, or something held. The proposition follows not from that property, but the idea that taxes would "trickle up". The idea that it doesnt matter if warren buffet no little land, because taxes levied on farmers and renters would pass on the costs.
Land is much more evenly distributed than wealth and income. Similarly, consumption is much flatter than income.
Hmm. I think you might be right. At least, we should not predict that the tax burden will be successfully passed along to Warren Buffet. I mean, it would be a massive change to a very dynamic system so I don’t think we should make any confident predictions.
I dunno. The existence of Warren Buffet-s is something that a lot of people object to. But, I think if the very rich exist, but are not hoarding the gains of natural resources too much, it isn’t really a huge problem. If he gets a bunch of money through making good calls as to which businesses will be productive, that’s good for society as a whole. As long as that productivity doesn’t come from extracting rents.
When they leave, they take their investments, spending, and created jobs with them.
Many countries have confiscated everything from the rich, driven them out, and even mass murdered them. None resulted in the poor being better off - things just got worse for the poor.
That's the wrong question. The correct question is, "If California increased income tax, how many software developers would leave for another jurisdiction that did not increase income tax, and would the total tax taken from all software developers in California be higher or lower after?". There are also moral questions.
They also sit in the Bahamas for 6 months before becoming very bored and realising their friends and socio-cultural life in London isn’t easily replicated elsewhere.
Have you seen the stuff that has been outsourced from all of the West? They DO leave for cheaper places, whether that be because of taxes or wages. And if you really leave them no other choice, they might just go out of business.
You don't have to be greedy to not want to be robbed. You do have to be kind of tight with money, aka greedy, to run a competitive business. How often are you paying much more than you absolutely have to for anything? Our greed forces businesses to be run in a greedy way. It's called efficiency.
They outsourced industry, because the logic of industrial production is that all costs should be driven as low as possible and much human labor is fungible.
The claim here is that high taxes on earnings will cause capitalists to leave and take the jerbs with them. A different context, and a scenario that fails to consider the existence of domestic competition, capitalists' desire to sell into the most profitable market, preferences about where to live etc.
Yes it is slightly different but we are talking about people who start and run businesses, typically. Unless living here comes with some tremendous benefits that transcend money, they will leave. They generally have little loyalty to their homeland. I wouldn't either, if my homeland wanted to take me for all I'm worth in taxes. Not only would I consider leaving if I had more money, but I know of people who specialize in helping moderately wealthy leave. They cater to people who have a few million dollars and up.
>They outsourced industry, because the logic of industrial production is that all costs should be driven as low as possible and much human labor is fungible.
It's not just industrial production, it's the top jobs that people on this site need. Jobs in software and other kinds of engineering are increasingly under threat. There is some merit to seeking lower costs, and we benefit from that, but it's also possible to paint yourself into a corner from a national security standpoint. My point remains: the same cost-saving motive that drives wealthy people to preserve money in life and business is likely to push them out of the country if we oppress them.
There are many real-life examples of people fleeing for economic reasons. Why is it so easy to believe that day laborers or doctors would flee for greener pastures, but hard to believe that many wealthy business owners wouldn't?
There are plenty of examples of people redistributing wealth, whether through taxes or less palatable means that worked out well for the poor. There are also plenty of places that do nothing that are a disaster.
"Redistribution" at some point becomes blatant theft from productive people to give to unproductive people. I guess taxes need to scale up with wealth to some extent but it needs to be done in a way that doesn't encourage freeloading and doesn't encourage envy.
Would you support a return to the top marginal tax rate of 91% on the ultra-wealthy, like it was during the 1950s and 60s, when the U.S. economy was booming, infrastructure was being built, and income inequality was much lower?
Those rates were never paid, as the tax code also allowed for all sorts of deductions and tax shelters. What Reagan did was lower the tax rate in exchange for getting rid of those deductions and tax shelters.
The trouble with tax shelters is they tended to be crummy investments. The tax code incentivized shifting investment money from productive investments to crummy investments. This is not good for the economy.
Or look at it this way. If Musk was taxed at 91%, there would be no SpaceX, Starlink nor Neuralink. What wealthy people do is invest the money (you can only spend so much money on fine dining and snazzy clothes). Investing the money creates jobs and wealth that make the rest of us prosperous.
The idea that a 91% top marginal tax rate would stifle investment or innovation is misleading. Sure the ultra-wealthy will always use deductions and shelters to lower their effective tax rates, but even with those, they still paid significantly higher rates than the ultra-wealthy do today. And the economy didn’t collapse under those high rates—in fact, it grew at about 4% annually, and we built a thriving middle class.
Wealthy individuals and corporations still invested because the tax code encouraged reinvestment into productive ventures like infrastructure, research, and business expansion rather than hoarding wealth.
Reagan’s reforms didn’t simply eliminate crummy tax shelters—they slashed the top rate to 28%, which kicked off a massive concentration of wealth. And the idea that the wealthy always reinvest their money into productive ventures is a just-so story that is more myth than reality. A lot of that wealth today goes into stock buybacks, speculative assets, and offshore accounts that don’t create jobs or grow the economy.
Musk and his ventures are a terrible example. SpaceX and Starlink wouldn’t exist without billions in government contracts and subsidies. Public money was a huge driver of their success, not just private capital.
The idea that lowering taxes for the ultra-wealthy benefits everyone just doesn’t hold up to scrutiny.
But let's flip things, What tax rate do you think the ultra-wealthy should be subject to? Why that number? Personally, I don't claim to know enough about economics to be certain about this but I feel that the 1950s-1960s in America was a time of great growth for the middle class and government funded technological development and that the tax policy of the time likely played a large part in that.
> The idea that a 91% top marginal tax rate would stifle investment or innovation is misleading.
If you make $100,000, at a 91% tax rate you'd have $9,000 left over to invest. If you are taxed at 28%, you'd have $72,000 left to invest. $72,000 is greater than $9,000.
> And the economy didn’t collapse under those high rates
Right, because they weren't actually paying those rates.
> hoarding wealth
The wealthy do not hoard wealth. There are no Scrooge McDuck cash vaults. All their money is invested, not hoarded. If you tax the money away, it is no longer invested.
> kicked off a massive concentration of wealth
Wealth creation is not "concentrating" wealth. Wealth is not a fixed pie.
Musk did get government contracts for rockets. If he hadn't successfully delivered the goods, he wouldn't have been paid. Those rockets also cost 10% of what it would have cost NASA otherwise. A government contract is not a subsidy. SpaceX and Starlink were not subsidized.
I subscribe to C. Northcote Parkinson's observation that a 10% flat tax makes for the most prosperous economy while providing sufficient funding for the government. (He's mainly remembered for Parkinson's Law.)
> A lot of that wealth today goes into stock buybacks, speculative assets, and offshore accounts that don’t create jobs or grow the economy.
They do, except for offshore accounts, which benefit other countries. (All investments are speculative.) Stock buybacks are also investments.
> If you make $100,000, at a 91% tax rate you'd have $9,000 left over to invest. If you are taxed at 28%, you'd have $78,000 left to invest. $78,000 is greater than $9,000.
This is a misunderstanding of how marginal tax rates work. A 91% marginal rate only applies to income above a very high threshold. In the 50s and 60s, that rate didn’t kick in until income hit around $2 million in today’s dollars. So no, someone making $100,000 wasn’t being taxed at 91%. And the ultra-wealthy still had plenty of money left over to invest after deductions and shelters, which is why the economy grew so well.
> Right, because they weren’t actually paying those rates.
True, but they were still paying effective rates that were much higher than today’s ultra-wealthy. The top 0.01% today often pay effective rates around 20%, while back then, even after deductions, they were paying closer to 50-60%. That’s a big difference, and it contributed to a more equitable economy. Do you think that the economy is healthier today and that this is a result of the current tax policy?
> The wealthy do not hoard wealth. There are no Scrooge McDuck cash vaults. All their money is invested, not hoarded. If you tax the money away, it is no longer invested.
This is a cute image, but “hoarding” doesn’t mean stuffing cash under a mattress. Hoarding happens when money is funneled into assets that don’t circulate productively in the economy—things like luxury real estate, golf courses, art, or stock buybacks that inflate share prices without creating value. Investing in financial instruments that primarily benefit the ultra-wealthy doesn’t generate the kind of broad-based economic growth that happens when money flows through the middle class.
> Wealth creation is not “concentrating” wealth. Wealth is not a fixed pie.
True, but wealth concentration is still a problem. While wealth isn’t a zero-sum game, extreme concentration reduces economic mobility and slows down overall growth. When too much money pools at the top, it reduces aggregate demand, which is what drives a healthy economy. If you don't think that this is a problem with current levels of wealth distribution, what levels of wealth inequality would we have to see for you to consider a problem?
> A government contract is not a subsidy. SpaceX and Starlink were not subsidized.
This is semantics. SpaceX received millions in government contracts before proving its capabilities. Early-stage government money often functions as a de facto subsidy, reducing risk for the private sector. NASA essentially de-risked SpaceX’s early development, and without that, it’s unlikely SpaceX would have succeeded. Government contracts don’t magically appear out of nowhere—someone took a bet on Musk, and it was with taxpayer money. I think that's great, but we should have more tax money to make these kinds of bets and we can get that money by having higher taxes on the ultra-wealthy.
> I subscribe to C. Northcote Parkinson's observation that a 10% flat tax makes for the most prosperous economy while providing sufficient funding for the government.
A 10% flat tax? That’s fantasy land. It’s a cute theory that ignores the realities of modern economies. Flat taxes disproportionately burden the poor and middle class while letting the ultra-wealthy off the hook. There’s a reason no prosperous nation has implemented a flat tax at that level and maintained the kind of infrastructure, education, and public services necessary for sustained growth.
Even Estonia, often held up as a model of flat taxation, doesn’t follow that script. Estonia’s system isn’t a pure flat tax—there’s a 20% flat income tax plus a 33% payroll tax for social services. And importantly, Estonia relies heavily on VAT (value-added tax), which disproportionately impacts lower-income households.
> Stock buybacks are also investments.
Not really. Stock buybacks are often a way to boost share prices and executive bonuses. They don’t add productive value to the economy or create jobs. In fact, before 1982, they were considered a form of market manipulation and were illegal.
1. Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW.
2. No, they were not. They were tax sheltering their income. Nobody paid anything near 91%, unless they did not hire a tax accountant, which would be stupid. Wealthy people are rarely stupid with money, that's why they're rich. (ESPN ran a documentary once about NFL players suddenly becoming rich and just as suddenly going bankrupt because they had no idea how to manage it.)
3. Art is an investment (they expect it to appreciate). So are golf courses (golf players pay to use it). So is luxury real estate (real estate appreciates). Stock buybacks mean buying stock, which is an investment.
4. There's no evidence that "extreme concentration" does anything of the sort, especially since wealth is created, not concentrated. Bob creating more money does not take anything away from Fred. Bill Gates never took any money from me. Neither did Steve Jobs, nor Elon Musk, nor Jeff Bezos. Nor did they ever take money from you.
5. It is not semantics. Having an exchange at market prices is NOT a subsidy. A subsidy is a gift of money. NASA did not buy those rockets as a gift to SpaceX. NASA bought them because they cost 10% of what NASA rockets cost, and NASA used them. NASA did not bet on Musk. If the rockets didn't work, Musk would not have been paid. Musk was losing money, and one more explosion would have bankrupted him. But that one flew, and Musk got paid. NASA did not take a risk on Musk. Musk took the risk.
6. Parkinson is a better economist than you or I. Why not read his books? They're quite good. Do you know the US did not have an income tax until 1913? It was quite prosperous, including public education.
7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends.
> Stock buybacks mean buying stock, which is an investment.
This is wildly incorrect, in that the purpose of stock buybacks is to reduce the number of shares and juice metrics like earnings per share (which weirdly enough, lots of CxOs are bonused on).
> Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW.
Your first comment (around the 100k income and different tax rates) had the weird marginal/total tax rate confusion, so if you'd prefer to avoid that be more clear in the future. As an example, I pay 52% marginal, but about 35% overall.
> 7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends.
Correct, but I think this is a bad way and encoyurages non optimal behaviour.
As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others.
There's nothing nefarious about it.
> had the weird marginal/total tax rate confusion
I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate.
> I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate.
This isn't generally true. I'm in the top 5% of income earners in my country, and my marginal and effective tax rates differ by a significant amount (35 effective vs 52 marginal).
> As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others.
That's certainly one rationale. Personally, I dislike them in most cases (they make sense for companies that provide a bunch of compensation in stock). I personally think that dividends encourage market behaviour that is better (I'd never have sold my FB stock if they'd paid me a dividend), as well as reducing number go up as the only way to gain money from investing.
> though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others.
This is really dodgy from my perspective as by definition, a company has more information about their future earnings than another investor does. I realise that this ship has sailed, but personally I'd prefer to reduce dividend taxes for re-investments and ban most buybacks (but again, this is probably a niche position).
P.S. Income tax is based on income. If the wealthy were hoarding money, they would realize no income and no taxes will be collected. To generate income, the money has to be invested.
Correlation != causation. The US economy in the 1950s and 1960s was a very different beast - Europe (the main industrial competitor) was in ruins, wealth was very much more tied up in factories and plant, and less in equities and other soft assets. The currency was still tied to the gold price. It may as well have been another planet compared to today.
It depends - Western countries exist in a fiat currency world without a gold price tether, so governments that are sovereign in their own currency do not depend on tax receipts to provide services (the Eurozone is a different kettle of fish due to the common currency and lack of defined horizontal stabilisation).
Generally, if governments foresee the need to encourage economic activity, they should reduce tax rates. If they predict their economy is or will become overheated, they should increase tax rates. If they wish to buy votes from people who don't understand how money and tax work in an untethered fiat currency world, they should increase tax rates into the 90%+ range; however, this will cause economic disruption with some time delay, which those responsible will hope they can blame on the party in power at the time of the disruption.
Yes, I am more cynical now than I was 20 years ago.
Yeah? So, they are going to take their factories? They are leaving the biggest consumer markets to sell their trinkets in the giant Costa Rican market?
In Washington State, a tax on capital gains over $250,000 was recently instituted. Jeff Bezos, presumably the target of the tax, left the state just before it went into effect. Friends in the area have told me that many Microsoft wealthy people have left as well.
Seattle has instituted a number of punitive taxes on businesses in the city. There has been a corresponding boom in business across the lake in Bellevue.
The state has benefited a lot by being a low tax state in the past. It is no longer a low tax state. We'll see how that goes.
Musk is one of the more famous industrialists who left California over taxes.
If they were necessary for funding the country's defence, it is likely that it will also break the borders. France can't tax them to raise money to re-arm if they aren't there.
Peace through poverty in Europe would be an interesting development I suppose.
You know what? Let them leave. If they have business here, are they going to close shop and forego this market? No, they aren't. Can we still tax them for what they remmit to whatever the place they are? Yes, we can.
And where they will go? Once a major developed nation starts being serious on taxing the billionaires, the others will follow soon, or more probably, they will even coordinate among themselves to harmonize their rates.
Yeah, they could go to some third world hellhole where they could bribe the authorities and live in a Pablo Escobar's style compound. Will they do it? Will they subject themselves to the judicial insecurity that abunds in those places? To politician that manage the incredible feat of being orders of magnitude even more corrupt than the ones we have in washington?
All western nations used to have far higher top marginal rates for income and inheritance taxes. Far less loopholes, and yet here we are.
>...All western nations used to have far higher top marginal rates for income and inheritance taxes. Far less loopholes, and yet here we are.
When western nations had far higher top marginal rates for income there were far MORE loopholes, not less. Those high rates did not bring in much revenue. For example:
>...Of the $517 billion the Treasury collected in 1980, only $3 billion to $5 billion came from the 70 percent bracket — less than 1 percent of total tax revenue.
(This is one reason that democrats suggested lowering the top rate in 1981.)
Those high marginal rates encouraged all kinds of unproductive investments to take advantage of loopholes built into the law. Where people couldn't get around such high rates, there were deadweight losses from economic activity that didn't occur. Even if someone thinks it is morally ok to take that much of someone's income, those kinds of high rates simply hurt the economy.
The title of that link seem to imply it was a net loss, but the numbers in the body seem to imply that while ~10k millionaires left, the tax revenue loss from millionaires leaving was $5b in (theoretical) yearly lost tax revenue (it's not clear from the article if all those millionaires leaving were even paying taxes as it notes many of them were in a grace period after entering before taxes kicked in, and it doesn't link to the downstream report from ASI).
Given that there's a lot more than 10 thousand millionaires in Britain and they are sticking around to pay taxes (more than enough to cover the $5b from those who left), I don't see how that's actually a bad thing?
This opponents of this kind of discussion always argue assuming a binary. Either we keep the status-quo, or we will enter a socialist chaos.
We are discussing making a fairer tax system were billionaires pay more of a fair share, we are not proposing full communism where we confiscate all their money.
Is any marginal increase on taxes fatally destined to lead to capital flight? It looks like a lot of people are arguing exactly that. Well, in that case lets stop completely taxing the oligarchs! Trickle down stravaganza now!
> we are not proposing full communism where we confiscate all their money.
That's exactly what is usually being proposed - the difference is confiscating everything slowly over decades (rather than by immediate revolution).
The deception is that a 2% tax sounds tiny. If you have a retirement portfolio and are withdrawing money to live (drawdown) then that 2% can easily take > 50% of your wealth over decades. Financial literacy is understanding the power of compounding - yet when it is in reverse it isn't obvious. And when the victims are somebody else (people wealthier than yourself) we conveniently shut our ears to any complaints.
Ironically I think the core motivations of most proponents of wealth taxes are their own greed and envy. Tax anybody else but not moi...
The systematic driver is our aging demographics. Our governments need new taxes to pay for the infinite demand of health services, and the demands of the voting 65yo+ welfare state beneficiaries
If we are going to talk about fairness and greed and envy we should also be discussing how the billionaires benefit from government deficits, how a lot of our government investment is distorted by lobbying from the richest amongst us.
Our years of fiscal irresponsability, of adventures like ZIRP, Quantitative Easings and Stymulus made the rich even richer. Asset Inflation for the rich and purchasing power corrosion for the pleb is all cool and dandy, but it is destroying our societies, and the way we have to fix it is by reversing decades of Lobby facilitated regressive tax policies.
The billionaires benefit from having an educated society to work for them, infrastructure, the rule of law, security from thiefs as well as from foreign governments and organizations. The USMC existence is far more important for big oil magnates than for a public school teacher in Chicago.
I was lucky, I am generation X and I still managed to have a fully paid mortage, a decent, albeit modest, retirement fund, but what about my kids? What world are we leaving them? How can I look him in the eyes and tell, well kid, you're doing great on school, but sometimes I wonder if you shouldn't be playing because our government thinks that you having your own house in the future is something to be decided by the "free"markets, but at the same time, let's subsidize Big Tech to the tune of billions so they can build AI to make sure you won't have a job and will forever live of whatever I manage to pass to you or be a UBI slave.
Because you and I know that all this government money going to AI is motivated by the greed of oligarchs salivating at the prospect of shedding off whole mountains out of their payrolls.
Inflation is never a problem for this system when it is mostly confined to asset inflation. But as soon as we have too little unemployment, and workers start having to mute linked-in recruiter notifications, the calls for austerity start immediatly.
You complain about the poor acting politically for a more progressive taxation system, but why then the rich don't stop lobbying for subsides, why they don't stop lobbying for wars? Isn't it clear that they are they motivated by greed too and will use political power too to satisfy it?
Hollande tried to do this in France (75% effective rate on earnings above a million Euros).
Even his staunchly socialist regime had to admit its failure and abruptly reverse course in 2014, two years later. The tax raised just €260m in 2013 and €160m in 2014…. But caused an exodus of wealth and job creators
Article "Old Money, New Money Flee France and Its Wealth Tax": https://archive.is/Q0ETI has examples Belgium and the UK.
Payre built a successful high-tech company. Payre said the French government sent him a tax bill of nearly $2.5 million on paper assets he couldn't cash in. Payre moved his family to neighboring Belgium. Payre started a new company in Brussels that he said did nearly $32 million
Taittinger, who helped create the champagne label, said the French tax system not only helped force the sale of his family company but scattered the 38 family members involved in the corporation. "Half of my family left France because of taxes," said Taittinger. "They now live in England, Belgium and other countries where they were warmly welcomed -- unlike here."
Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.
[I've abridged the comments above] Harder to judge the value of talent flight versus capital flight. Anecdotally here in New Zealand I see smart gritty kids emmigrate, and we attempt to import other smart gritty people to replace them.
The few investigations following the aftermath of the Panama papers recovered a couple of billion dollars after several years of investigation.
The estimated evasion _in_the_EU_ using these off-shoring vehicles in Panama is around 100 to 200 billion. [0]
The 2023 Defense spending of the entire EU member states was about 270 billion.
What will happen is income taxes will increase for high earners who cannot evade income tax. And the 'super' rich will continue to own nothing on paper.
[0] https://www.europarl.europa.eu/cmsdata/116947/20170412_panam...
> income taxes will increase for high earners who cannot evade income tax
i.e., those pesky jumped-up merchants who think that $1M a year in wages entitles them to speak to us.
And who, despite what seems like limitless wealth to the lower middle class (I would know), don't have nearly enough to really influence on a major scale.
Those who don't learn from the past... <https://www.washingtonpost.com/archive/politics/2006/07/16/o...>
We're not getting any money from them now, so who cares if they leave.
Don't threaten me with a good time.
https://archive.is/Q0ETI
I think the US would be better off if a number of certain billionaires fled the country due to taxes.
There is a flip side though. How long do the working poor tolerate billionaires?
I think it’s coming and it makes sense.
With the advent of AI, robotics and killing drones the question becomes: "How long do billionaires tolerate the poor?".
That is my question for all those prognosticating an upcoming violent uprising. The disparity in power has only risen in the last 100 years. A single well armed solider could kill tens to hundreds of civilians in minutes given the right conditions. How do you rise up in the face of such disparate conditions?
You seem to have missed the last twenty five years where the people of Afghanistan and Iraq beat the world's most powerful military and unlimited budget.
Asymmetric warfare is only going to get easier for the underdog with the advent of cheap drones.
They didn’t though. This is just the same old tiresome revisionism. The US and allies defeated the taliban within weeks.
What failed was remaking Afghanistan into a modern democracy. Money and patience ran out.
But militarily, it was a total victory.
If I was calling my campaign a victory, I’d be able to walk in my new territory without fear of being attacked and killed.
It might be a military success by some sort of conventional military definition. But it was a complete failure and utter waste by pretty much every other measure.
But that’s not how this works.
It takes decades to subjugate the local population by the invading force and some local resistance will remain for a long, long time.
What you are describing does not sound like a victory to me.
If victory means "we are now bogged down in some decades-long occupation against guerrillas that drains resources and has no meaningful benefit".
The person I originally responded to claimed that "the people of Afghanistan"(Actually the Taliban) defeated the "worlds most powerful military".
This is objectively false. Eventually, occupation became politically hard to motivate for an American public that was tired of war. But to claim the Taliban beat the US military is ridiculous. FWIW I was there.
With a definition like that, the US won the Vietnam war too.
People struggle to wrap their head around logic like yours because it is essentially just being pedantic.
- Before the war the Taliban controlled Afghanistan. - The US (+ Allies) invaded and conquered the country. - 20 years later the US Military has left the county. - The Taliban now controls the country again. - At no point during that 20 years was the Taliban actually "defeated" like claimed.
Whether you like it or not "Money and patience ran out" = losing the war.
There are many other "lost wars" where they were lost for the same reason. The most obvious one in this context being the Vietnam war.... which is also a popular one for people to argue that the US Military didn't lose either.
I was under impression that the Taliban is in charge of things in Afghanistan in 2025.
Is this not the case?
And furthermore to my original point do you think that the ubiquity of cheap drones on the battlefield in 2025 would make similar attempts to conquer Afghanistan by the US easier or more difficult if the US were to try the same again?
You are not at all addressing the point I made, that the military campaign against the Taliban was a swift and successful action. You stated that the Taliban beat the worlds most advanced military, which they didn't.
That the subsequent occupation ended with the Talibans return to power has nothing to do with the war itself but has political reasons. In my opinion, the occupation could have ended completely different with a longer commitment. Unfortunately, the Iraq invasion happened and the American population had little long term interest in nation building, two nations at once.
FWIW Iraq and Afghanistan are very different places.
But this has nothing to do with the military campaign itself. When I was there and where I was(2010, northern Afghanistan), it was a fairly peaceful place. Things were progressing in the right direction.
Regarding your second question, I don't think that the Taliban would have great use of drones considering that we could use essentially the same counter measures we used against remotely operated IEDs(jamming).
Ukraine does not have access to the same equipment we did in Afghanistan.
EDIT:
This article pretty much reflects my views on what went wrong. The US government half assed the occupation and withdrew too early.
https://www.rollingstone.com/politics/politics-news/the-runa...
I'm not addressing the point you made because it's nonsensical.
Could you imagine a different set of circumstances where the year is 1950 and Adolf Hitler is still Fuhrer of the Third Reich and someone is arguing that America won WW2?
America lost in Vietnam, they lost in Iraq, and they lost in Afghanistan. The sooner you come to realize this and that your time spent in Afghanistan was a waste the sooner you'll have a more accurate worldview and can make better decisions than to sign up for what was at that point an obviously pointless war.
> I don't think that the Taliban would have great use of drones considering that we could use essentially the same counter measures we used against remotely operated IEDs(jamming).
Doesn't seem to be working out for either side in Ukraine.
You made a specific argument, that the Taliban defeated the US military. This absolutely did not happen.
I’ve said what I had to say, have a nice day.
No, I made a specific argument that the people of Afghanistan defeated the US military.
This absolutely did happen and their long fought victory has saddled the US with an tremendous monetary debt and social debt in the form of a fractured American society the consequences of which are an increasingly authoritarian America that is brutishly lashing out at their allies in that conflict.
America's loss in that conflict has cost America far more than we can imagine right now and the cost is only increasing by the day.
No, that never happened. The US was in control and then voluntarily left.
Exhausting the enemy’s desire to continue a fight is not only a way of winning a war militarily, most military victories are achieved that way; the surrender to the Taliban was not unusual in that regard.
That isn't what happened and there was no surrender. The commander in chief made primarily a political decision, and politics was the only motivation for the withdrawal.
> That isn't what happened
Yes, it is.
> and there was no surrender.
Yes, Trump’s release of Taliban priosners and subsequent surrender of Afghanistan to them was a surrender.
> The commander in chief made primarily a political decision
Yes, the decision to abandon a war is always a political decision. It is, in fact, the political decision that every act in war is directed at getting the enemy to make.
There's this weird and frankly dolschtosslegende-ish trend in America post-Vietnam to characterize American victories in war as military and American losses as “political” as if the two were orthogonal categories, but the only military victory is achieving the desired political end, and if you feel like you were “winning militarily” and didn’t do that, then you just didn’t understand the context of the war and your sense of victory was misplaced.
> Yes, it is.
No, it isn't. Wow, that was easy!
> Yes, Trump’s release of Taliban priosners and subsequent surrender of Afghanistan to them was a surrender.
No, it was a retreat. For it to be a surrender, the Taliban would have had to be in a position of power. They were not.
> Yes, the decision to abandon a war is always a political decision.
Except for the times it is solely a military position.
> Taliban would have had to be in a position of power.
They control the territory. The Taliban is in fact in a position of power. Doubly so now that it forced the US to retreat.
It is a weird definition of "victory", when the end of the war was a hasty and poorly executed retreat.
> They control the territory.
Only after a voluntary retreat, so that is irrelevant since they didn't have power at the time of the treat, and were not a factor in the decision to retreat.
> It is a weird definition of "victory", when the end of the war was a hasty and poorly executed retreat.
Of course it was a victory. The Taliban were ousted within weeks and then the place was under US control for 20 years. If it wasn't a victory, the last 20 years would have been like the last year instead of what they were like.
> Only after a voluntary retreat
A voluntary retreat is not a victory. You are arguing it is, which is extremely odd.
> Of course it was a victory. The Taliban were ousted within weeks and then the place was under US control for 20 years.
If the victory conditions were to be bogged down for 20 years wasting resources in an occupation that netted no benefits, only to have your enemy be back in the following day when you do your voluntary retreat, those are the most retarded victory conditions ever spelled out.
It would be like claiming victory against the Nazis if after some years both the US and USSR left Germany, and in the following day the Nazis were setting up concentration camps again.
so it won some battles but lost the war?
I mean, they came in, held dominion, and just didn't proceed to fully transform the country as they should have.
It's kind of like a UFC fighter pinning his opponent for 90% of the match and then suddenly forfeiting. I wouldn't call it fleeing or losing.
We may be arguing semantics, but a UFC fighter forfeiting is the definition of losing, no matter how much his win was apparent beforehand.
I think you're taking the analogy too far with that, although it's my fault for using an analogy that makes it so easy.
My point was simply that the US had complete dominion over the area for 20 years and left voluntarily, not due to any pressure from the enemy. If you don't want to call that a victory, fine, whatever, but it doesn't seem like a surrender or loss to me.
> My point was simply that the US had complete dominion over the area for 20 years and left voluntarily, not due to any pressure from the enemy.
Losing money, troops and public support in the field and back at home is a very real definition of losing.
It sure as hell wasn’t winning.
> The US and allies defeated the taliban within weeks.
But I'm the end, who had to flee and who is in power in Afghanistan since then?
> But I'm the end, who had to flee
No one fled.
They didn’t leave as winners.
They did more so than they did as losers.
It spent $2.3 trillion, lost 2,324 U.S. military and 3,917 contractors. And then there’s the hundred thousand afghan deaths.
What did the US get?
https://www.usip.org/publications/2022/11/afghanistan-was-lo...
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There are far more poor people than rich people, and in a world where even the homeless have smartphones the poor will also have drones.
The question then becomes "A rich man may be able to dodge taxes, but can he dodge drones?"
A "rich man" can afford jammers and more sophisticated jam resistant drones that track down the nuisance
It's not so simple.
Technology is a race between offense and defense and right now we're seeing offense leapfrog defense.
The status quo that we've known our whole lives has meant that anyone trying to assassinate a powerful figure will only get one shot at it before they're caught which does not allow them to learn from their mistakes and sends a chilling message to others who would do the same.
With remote controlled or autonomous drones the dynamic changes because people can operate from a distance -- perhaps even in an entirely different country that doesn't extradite. What's the defense against that?
At the end of the day the attacker only has to succeed once whereas the defender has to succeed every single time.
There may come a time where the ultra-wealthy and powerful decide that it isn't viable for them to be out in public due to the security risks so they will retire to a gilded cage -- which is still a cage -- and what's worse it reduces the search space for attackers to find them.
This doesn't even get into the near future advancements in biotechnology that will allow small groups of dedicated people to develop biological weapons that selectively target a wealthy person's family -- how can they defend themselves against that other than going into a fully sealed environment?
At the end of the day it'll end up being easier and better for these people to just make decisions that benefit the world at large instead of decisions that benefit themselves to the detriment of everyone else.
If you piss less people off less people want to kill you and in fact more people will want to defend you.
Nearly 20 years and France is doing fine. So maybe this is a good position to double down on?
What are they going to do, pack up all the factories they own into a suitcase and fly away with them? Oh wait, they already gave them all away to China? So what's suppose to be the downside? Where's the threat?
So what? If they eminently do not pay taxes, they are leeching off everyone else.
At least they will leech elsewhere.
That's from 2006 and yet, France still roars along even without the rich who were apparently so un-attached to where they lived that they'd rather ditch the country than pay their taxes.
What exactly is the argument made by all these alarmist "who will think of the the wealthy"? Tax the rich and many leave, so you don't get as much tax revenue. Don't tax the rich and you just don't get the revenue. The implication in all these seems to be "well then why not just lower taxes so then the wealthy will grace us with their presence?"
Um, because they're not paying their fair share, and the few who leave don't lead to a net loss in tax revenue/economic prosperity, that's why.
Everything in that article seems quite twisted in its presentation. Quotes like the following:
> Eric Pinchet, author of a French tax guide, estimates the wealth tax earns the government about $2.6 billion a year but has cost the country more than $125 billion in capital flight since 1998.
The implication in that quote is "$2.6 gained but $125 lost, wow what a bad tax scheme", which is horribly irresponsible presentation. That's $2.6B/year in increased yearly tax revenues, but a loss of $125B/8 years (1998-2006) in capital, e.g. assets of some kind in the country. In most real-world cases where most of that flight happened early in those 8 years and the year-over-year capital flight goes down as folks acclimate to a tax regime, that's a totally acceptable trade off! In fact, that trade off might be a HUGE boon to France in the near term, let alone the long term. To actually know though, we need tons more information, information that isn't presented at all.
In short, bad article quotes rich guys who don't want to pay taxes saying "our life is so hard now that we've left a country that we liked but not enough to pay taxes on our insanely valuable assets, and that's actually hurting you more than us, so you should totally lower the tax rates on us."
i think the cost is seen more in opportunity losses. “if the rich investor leaves then who will pay. for the hermitage!”, as if investment is not entirely globalized at this point.
[flagged]
There’s an opening, right? Right or wrong, our (USA) allies are a little skeptical of the us at the moment, and France does still have a defense industry. If they can kick it into high gear and start selling more arms to their fellow Union-members, Europe can arm itself, and France will get some nice middle class engineering jobs.
Seems great for everyone other than US defense contractors.
> other than US defense contractors
Not really. Europe needs to rearm in a hurry, and by a lot. There is not way to do that without help from the US defense contractors.
They're both trying to do wealth taxes, rather than (more) income taxes.
I suppose that could be interesting for wealth that isn't liquid?
yep, the comment above mentioned that [0]:
> "They were asking me to pay taxes on money I didn't have," Payre said. "I had no choice but to leave the country."
> 1997, he owned shares that were worth $110 million -- on paper. French tax authorities required Payre to pay a wealth tax of 2.2 percent on the shares, based on what the shares would have been worth had he sold them at the market's highest point.
> But Payre said that he didn't have access to them because of stock market regulations that limited his ability to sell and that, in any case, a market dip had devalued the shares below that peak.
[0] https://news.ycombinator.com/item?id=43394015
I am sure the governments can work it out the same way billionaires with bankers do.
Take possession of parts of their stock in a blind trust and just get dividends or take out loans against the stock and use that cash.
When you tax wealth, like say land or stocks, if the person is illiquid, they have to sell their assets to pay the tax. I would imagine that markets would crash every tax cycle due to people trying to pay their tax obligation.
And the more they sell, the more they have to sell after, driving the prices even lower. It's definitely a good recipe to crash the markets.
If the market is crashing once a year it’s no longer a crash. It’s arguably a prevention of a bubble forming.
Is this impossible to work out?
Well, say you inherited 185 acres in the middle of nowhere that is valued at $500K. You make $150K a year. You can't really do anything with the land, it's all scrub brush by now and the government wants 30% in wealth tax to tune tune of $160K. What do you do?
Say you put all your savings into the market. You have $400K in assets and the government wants 20% of it ($80K), you either tighten your belt or you sell assets.
The wealthy, of course, will be in much better shape to handle this than your average guy who invested some of their income.
Seems like it'd have to mean nationalizing some percentage of the corporations owned by the wealthy?
You could call it a sovereign wealth fund
There's a big difference between a wealth fun and managing nationalized businesses. As a business owner, you're directly invested into your business doing well. And you have lots of knowledge about your business details. Some government clerk who ends up controlling your business doesn't have either.
This happens every time. Socialist government nationalizes businesses, drives most of them into the ground.
You could also call it USSR.
France seeks to solve its reckless spending problem by increasing taxes on the rich, and setting up yet another rediscovery of the Laffer curve? I can hardly believe it!
This is for self defense. The rich would benefit massively from that.
Why? The rich can easily diversify where there money is located, so their country being invaded wouldn't impact their wealth to much. They can also flee more readily than anyone else as they probably have their own jet. It would protect their nice house(s) in that country, but how much is insurance from invasion worth...
> Why? The rich can easily diversify where there money is located
Because you want to be in Paris. We’re also entering another xenophobic era. There is an argument to be made that the safest place for a Frenchman is probably in France. (Obvious counterpoints to that. And I’m speaking as an immigrant American.)
You can live in Paris while your money lives all over the world. Geographic diversification to avoid invasion based asset forfeiture is what I meant.
> You can live in Paris while your money lives all over the world
Paris isn’t Paris if Moscow invades.
That might be the stated reason. It attempts to increase the overall tax take by increasing personal taxes on the rich, which will allow a new generation of bureaucrats and economists to re-learn the lessons that are already in the textbooks.
You know that the Laffer curve has basically no empirical support, right? Like it seemed to apply at really high levels of marginal tax (75%+) but there's been no replication at any lower levels.
The only economist I still here talking about it is Laffer, for obvious reasons.
If you are really pointing out the lack of conclusive evidence for the effects of a single factor in a complex real-world economy, you may have spent too many years in education playing with models and simulations, and too few years in the real world.
> If you are really pointing out the lack of conclusive evidence for the effects of a single factor in a complex real-world economy, you may have spent too many years in education playing with models and simulations, and too few years in the real world.
That's some quality assumptions you're making there, but whatevs.
You're the person who brought up the Laffer curve. Apparently (so Wikipedia tells me) https://en.wikipedia.org/wiki/Laffer_curve (section income tax rate as which revenue is maximised) around 65% is the point at which taxes stop being as effective.
That's interesting to me as I would have thought it was lower.
Note that because of how economics work, this number is from correlational data so is probably not as robust as an experimental approach might be (but unfortunately that's basically impossible to implement).
lol, lmao even
Both the French and the Brits have nukes. They're at no risk of hostile foreign invasion and everybody knows it. Entire libraries of books and whitepapers have been written about it.
If it were about self-defense: Build more nukes, build some mobile launchers capable of also launching targeting satellites, maintain the missile and submarine fleets, and your job is done. This can be done on current military budgets, or even smaller budgets.
It's not for "self defense". It's for foreign adventurism and geopolitical posturing. Like the opposite of realpolitik.
Having Russia roll through the states of all your principal trading partners is probably no fun. Adventurism is such a poor take in this case.
All of them? Really?
Besides, waging proxy wars is very far removed from self-defense.
Building outposts in, e.g., Cameroon to ward against Russian aggression over there is perhaps justifiable in some abstract respect, but it's rather the opposite of self-defense. (Without getting into complicated game-theoretical "we have to stop them over there so we don't fight them over here" justifications, which have long been discredited and have even become something of a joke.)
Oh no, the rich are leaving. Hope they manage to fit their assets into cabin baggage.
High paid workers, due to their skills are way more mobile than asset owners. I can be a software engineer in the Bay or Canary Wharf, but if I am a real estate tycoon, it’s not like I can take British homes with me to the US.
Rich people can always sell assets and then buy similar ones elsewhere. And them being rich, they don't have to do any of the paperwork themselves.
That’s… unironically a good thing. Most economies are currently being burned by asset price inflation
That's not a good thing. Most retirement accounts are tied to the market. If you crash it on purpose, you create millions of old broke people.
Only the tiniest sliver of the hyperwealthy's assets are physical. The vast majority is equity, which is relatively easy to move.
Europe needs to pay for its defense since the US is no longer willing to fund it. So it's either higher taxes (on people who can ostensibly afford it) or removing social programs.
Since the latter is absolutely political suicide, there is an attempt to do the former.
What's the worst that could happen? It's not like the rich pay taxes anyway - they just setup foreign shell companies (a la Panama papers).
Tax the assets, make the game fair for everyone - for both workers and people living off wealth. Only then we will see wealthy people start to create new productive assets. It doesn't matter if they leave - their assets will still be in our countries. If they don't want them - we will have someone not as greedy own the assets that will benefit all of us.
This whole rearmament talk makes me sick, it is as if Trump and the MIC have already won. Especially in Germany being affronted for questioning rearmament is insane.
"plots" ?
Meaning it'll fail like all previous attempts and this will be yet another tax raise on people having a decent job, but nowhere near rich.
What people imagine this means is a tax on rich people. An appartment in the center of paris costs about 10.000 per month. If you calculate how much you need to own to afford that on interest income alone, it's 120000/4% = 3,000,000. Make it 4 million to cover eating out every day as well. That would be the lowest level I would see as super-rich.
But wealth tax, where it exists (e.g. Switzerland) starts at 111.059. This is in a country where a downpayment for a basic apartment would be at least 160000 (but more likely 200.000). So even in famously not-super-low-but-still-pretty-low-tax-Switzerland it's mostly taxing what you would call "professionals". People with a decent, but not spectacular, job (accountant, programmer, ... not FANG wages or doctors). Oh, and looking at the country's finances it becomes immediately clear: Switzerland is low tax because it also has very low unemployment/social support and very low pensions.
The solution to this USED to be inflation, government deficits of 10% even 20% in Southern Europe (before the euro was introduced, which transferred control of inflation to the independent ECB, preventing government deficits financed by inflation, as was the norm in the 1980s and 1990s for example)
French oligarchs will flee to the Galt's Gulch the neo-monarchists are building here in the US. Then, when the US electorate wrenches control back, they'll all get the same treatment here. Eventually they'll end up in Dubai.
Authoritarian regimes aren't very pleasant places to live, which is why Russian oligarchs send their families abroad.
Eventually they will have farted in all the elevators and they'll have to sit in their own stink.
The super-rich are already leaving Britain[1] so realistically if they want to raise more money they'll just tax workers a bit more since they're less economically mobile. No matter how much European politicians try to deny it, the Laffer is real, and long-term uncompetitive tax policies are not good for government income.
[1] https://www.telegraph.co.uk/politics/2025/01/22/millionaire-...
So, lots of foreign guys who were not paying taxes in britain while benefitting from a temporary exemption and that would leave as soon as this exemption ended, left early because the exemption period was shortenened.
Good. They were making houses more expensive and not paying taxes anyway.
Should tax land more and income less. Income from work is at least productive, owning land is not. #Georgism
Inheritance and donations should be strongly progressively taxed.
> and donations
What do you mean by donations? A 'donation' is the typical way to refer to giving money to a charity. Are you saying that charitable donations should be taxed?
I'm guessing they are a non-native speaker of English and meant gifts.
thanks, exactly.
I mean gifts, a common way of evading inheritance taxes accross the world.
That makes sense, thanks.
hm... so a tech startup making millions in profits (tiny office for 10 people) should pay less taxes than a grocery store that barely breaks even?
I am not sure I'd agree.
Build a bunch of apartments above the grocery store. Then divide the land tax across all floors. Voila, the grocery store lowered its tax.
If the startup is able to produce a lot of value without taking much land, shouldn't that by encouraged? The employees will all buy houses with their earnings and pay tax on that land. They'll invest their money in other companies that also pay land tax. They'll buy groceries, supporting the store you mentioned. Etc.
The startup's URL is also "land" and should be taxed.
Exactly the problem with georgism.
It was conceived in a time when all wealth arose from land, and doesn't account for a service or knowledge economy.
The ultra rich don't get that way from accumulating land, they accumulate intangible contracts and earning rights, 1s and 0s on a server.
The only answer I have heard from georgists is that the costs would would be passed from all of the teachers, farmers, and laborers to the ultra rich.
If that that were true, we could just replace everything with a sales or value added taxes.
I find that georgism appeals to a segment of people who are entirely preoccupied by urban real estate prices, and haven't thought through the implications for the broader economy
Apparently “land” in the economic sense covers more than just the physical ground.
https://en.m.wikipedia.org/wiki/Land_(economics)
> Examples include […] and portions of the electromagnetic spectrum. Supply of these resources is fixed.
I even saw some folks argue that IP should be considered a form of land, although I’m not sure if this is a real opinion or some very-online-economics silliness. Anyway, maybe worth looking into.
—
> If that that were true, we could just replace everything with a sales or value added taxes.
I don’t see how this really follows. Land value is more like a wealth tax than an income tax, right? In the sense that it taxes something held, rather than inflow/outflow.
>I don’t see how this really follows. Land value is more like a wealth tax than an income tax, right? In the sense that it taxes something held, rather than inflow/outflow.
I agree it is on possession, or something held. The proposition follows not from that property, but the idea that taxes would "trickle up". The idea that it doesnt matter if warren buffet no little land, because taxes levied on farmers and renters would pass on the costs.
Land is much more evenly distributed than wealth and income. Similarly, consumption is much flatter than income.
Hmm. I think you might be right. At least, we should not predict that the tax burden will be successfully passed along to Warren Buffet. I mean, it would be a massive change to a very dynamic system so I don’t think we should make any confident predictions.
I dunno. The existence of Warren Buffet-s is something that a lot of people object to. But, I think if the very rich exist, but are not hoarding the gains of natural resources too much, it isn’t really a huge problem. If he gets a bunch of money through making good calls as to which businesses will be productive, that’s good for society as a whole. As long as that productivity doesn’t come from extracting rents.
Warren Buffet owns shares in many companies that own land, he would indirectly pay a ton of land tax.
thats just hand waving. Some companies have land, some dont. most valuable land is owned by homeowners.
The super-rich leaving really breaks my heart.
When they leave, they take their investments, spending, and created jobs with them.
Many countries have confiscated everything from the rich, driven them out, and even mass murdered them. None resulted in the poor being better off - things just got worse for the poor.
In another level: How many software developers are forgoing job offers in California due to it being a state with income tax?
The sensible ones will figure in the cost of living and tax level to see if the California high salaries are better.
NYC has also seen an exodus of wealthy taxpayers to Florida.
That's the wrong question. The correct question is, "If California increased income tax, how many software developers would leave for another jurisdiction that did not increase income tax, and would the total tax taken from all software developers in California be higher or lower after?". There are also moral questions.
They also sit in the Bahamas for 6 months before becoming very bored and realising their friends and socio-cultural life in London isn’t easily replicated elsewhere.
No they don't. That's just an ideological cliche.
Have you seen the stuff that has been outsourced from all of the West? They DO leave for cheaper places, whether that be because of taxes or wages. And if you really leave them no other choice, they might just go out of business.
Good, then less greedy people will start new businesses.
You don't have to be greedy to not want to be robbed. You do have to be kind of tight with money, aka greedy, to run a competitive business. How often are you paying much more than you absolutely have to for anything? Our greed forces businesses to be run in a greedy way. It's called efficiency.
They outsourced industry, because the logic of industrial production is that all costs should be driven as low as possible and much human labor is fungible.
The claim here is that high taxes on earnings will cause capitalists to leave and take the jerbs with them. A different context, and a scenario that fails to consider the existence of domestic competition, capitalists' desire to sell into the most profitable market, preferences about where to live etc.
Yes it is slightly different but we are talking about people who start and run businesses, typically. Unless living here comes with some tremendous benefits that transcend money, they will leave. They generally have little loyalty to their homeland. I wouldn't either, if my homeland wanted to take me for all I'm worth in taxes. Not only would I consider leaving if I had more money, but I know of people who specialize in helping moderately wealthy leave. They cater to people who have a few million dollars and up.
>They outsourced industry, because the logic of industrial production is that all costs should be driven as low as possible and much human labor is fungible.
It's not just industrial production, it's the top jobs that people on this site need. Jobs in software and other kinds of engineering are increasingly under threat. There is some merit to seeking lower costs, and we benefit from that, but it's also possible to paint yourself into a corner from a national security standpoint. My point remains: the same cost-saving motive that drives wealthy people to preserve money in life and business is likely to push them out of the country if we oppress them.
There are many real-life examples of people fleeing for economic reasons. Why is it so easy to believe that day laborers or doctors would flee for greener pastures, but hard to believe that many wealthy business owners wouldn't?
There are plenty of examples of people redistributing wealth, whether through taxes or less palatable means that worked out well for the poor. There are also plenty of places that do nothing that are a disaster.
The improvement of the poor correlates with free'er markets, not taxes.
If you mean free from billionaires and oligarchs, then yes.
Cuba doesn't have any. A fun place.
"Redistribution" at some point becomes blatant theft from productive people to give to unproductive people. I guess taxes need to scale up with wealth to some extent but it needs to be done in a way that doesn't encourage freeloading and doesn't encourage envy.
Well, it seems to me that the current situation of ever increasing wealth inequality is unsustainable.
Can you suggest some sort of middle ground?
There's no limit to people's ability to create wealth. Creating wealth made the US the richest country in the world. Why would you want to stop that?
Would you support a return to the top marginal tax rate of 91% on the ultra-wealthy, like it was during the 1950s and 60s, when the U.S. economy was booming, infrastructure was being built, and income inequality was much lower?
No.
Those rates were never paid, as the tax code also allowed for all sorts of deductions and tax shelters. What Reagan did was lower the tax rate in exchange for getting rid of those deductions and tax shelters.
The trouble with tax shelters is they tended to be crummy investments. The tax code incentivized shifting investment money from productive investments to crummy investments. This is not good for the economy.
Or look at it this way. If Musk was taxed at 91%, there would be no SpaceX, Starlink nor Neuralink. What wealthy people do is invest the money (you can only spend so much money on fine dining and snazzy clothes). Investing the money creates jobs and wealth that make the rest of us prosperous.
The idea that a 91% top marginal tax rate would stifle investment or innovation is misleading. Sure the ultra-wealthy will always use deductions and shelters to lower their effective tax rates, but even with those, they still paid significantly higher rates than the ultra-wealthy do today. And the economy didn’t collapse under those high rates—in fact, it grew at about 4% annually, and we built a thriving middle class.
Wealthy individuals and corporations still invested because the tax code encouraged reinvestment into productive ventures like infrastructure, research, and business expansion rather than hoarding wealth.
Reagan’s reforms didn’t simply eliminate crummy tax shelters—they slashed the top rate to 28%, which kicked off a massive concentration of wealth. And the idea that the wealthy always reinvest their money into productive ventures is a just-so story that is more myth than reality. A lot of that wealth today goes into stock buybacks, speculative assets, and offshore accounts that don’t create jobs or grow the economy.
Musk and his ventures are a terrible example. SpaceX and Starlink wouldn’t exist without billions in government contracts and subsidies. Public money was a huge driver of their success, not just private capital.
The idea that lowering taxes for the ultra-wealthy benefits everyone just doesn’t hold up to scrutiny.
But let's flip things, What tax rate do you think the ultra-wealthy should be subject to? Why that number? Personally, I don't claim to know enough about economics to be certain about this but I feel that the 1950s-1960s in America was a time of great growth for the middle class and government funded technological development and that the tax policy of the time likely played a large part in that.
> The idea that a 91% top marginal tax rate would stifle investment or innovation is misleading.
If you make $100,000, at a 91% tax rate you'd have $9,000 left over to invest. If you are taxed at 28%, you'd have $72,000 left to invest. $72,000 is greater than $9,000.
> And the economy didn’t collapse under those high rates
Right, because they weren't actually paying those rates.
> hoarding wealth
The wealthy do not hoard wealth. There are no Scrooge McDuck cash vaults. All their money is invested, not hoarded. If you tax the money away, it is no longer invested.
> kicked off a massive concentration of wealth
Wealth creation is not "concentrating" wealth. Wealth is not a fixed pie.
Musk did get government contracts for rockets. If he hadn't successfully delivered the goods, he wouldn't have been paid. Those rockets also cost 10% of what it would have cost NASA otherwise. A government contract is not a subsidy. SpaceX and Starlink were not subsidized.
I subscribe to C. Northcote Parkinson's observation that a 10% flat tax makes for the most prosperous economy while providing sufficient funding for the government. (He's mainly remembered for Parkinson's Law.)
> A lot of that wealth today goes into stock buybacks, speculative assets, and offshore accounts that don’t create jobs or grow the economy.
They do, except for offshore accounts, which benefit other countries. (All investments are speculative.) Stock buybacks are also investments.
> If you make $100,000, at a 91% tax rate you'd have $9,000 left over to invest. If you are taxed at 28%, you'd have $78,000 left to invest. $78,000 is greater than $9,000.
This is a misunderstanding of how marginal tax rates work. A 91% marginal rate only applies to income above a very high threshold. In the 50s and 60s, that rate didn’t kick in until income hit around $2 million in today’s dollars. So no, someone making $100,000 wasn’t being taxed at 91%. And the ultra-wealthy still had plenty of money left over to invest after deductions and shelters, which is why the economy grew so well.
> Right, because they weren’t actually paying those rates.
True, but they were still paying effective rates that were much higher than today’s ultra-wealthy. The top 0.01% today often pay effective rates around 20%, while back then, even after deductions, they were paying closer to 50-60%. That’s a big difference, and it contributed to a more equitable economy. Do you think that the economy is healthier today and that this is a result of the current tax policy?
> The wealthy do not hoard wealth. There are no Scrooge McDuck cash vaults. All their money is invested, not hoarded. If you tax the money away, it is no longer invested.
This is a cute image, but “hoarding” doesn’t mean stuffing cash under a mattress. Hoarding happens when money is funneled into assets that don’t circulate productively in the economy—things like luxury real estate, golf courses, art, or stock buybacks that inflate share prices without creating value. Investing in financial instruments that primarily benefit the ultra-wealthy doesn’t generate the kind of broad-based economic growth that happens when money flows through the middle class.
> Wealth creation is not “concentrating” wealth. Wealth is not a fixed pie.
True, but wealth concentration is still a problem. While wealth isn’t a zero-sum game, extreme concentration reduces economic mobility and slows down overall growth. When too much money pools at the top, it reduces aggregate demand, which is what drives a healthy economy. If you don't think that this is a problem with current levels of wealth distribution, what levels of wealth inequality would we have to see for you to consider a problem?
> A government contract is not a subsidy. SpaceX and Starlink were not subsidized.
This is semantics. SpaceX received millions in government contracts before proving its capabilities. Early-stage government money often functions as a de facto subsidy, reducing risk for the private sector. NASA essentially de-risked SpaceX’s early development, and without that, it’s unlikely SpaceX would have succeeded. Government contracts don’t magically appear out of nowhere—someone took a bet on Musk, and it was with taxpayer money. I think that's great, but we should have more tax money to make these kinds of bets and we can get that money by having higher taxes on the ultra-wealthy.
> I subscribe to C. Northcote Parkinson's observation that a 10% flat tax makes for the most prosperous economy while providing sufficient funding for the government.
A 10% flat tax? That’s fantasy land. It’s a cute theory that ignores the realities of modern economies. Flat taxes disproportionately burden the poor and middle class while letting the ultra-wealthy off the hook. There’s a reason no prosperous nation has implemented a flat tax at that level and maintained the kind of infrastructure, education, and public services necessary for sustained growth.
Even Estonia, often held up as a model of flat taxation, doesn’t follow that script. Estonia’s system isn’t a pure flat tax—there’s a 20% flat income tax plus a 33% payroll tax for social services. And importantly, Estonia relies heavily on VAT (value-added tax), which disproportionately impacts lower-income households.
> Stock buybacks are also investments.
Not really. Stock buybacks are often a way to boost share prices and executive bonuses. They don’t add productive value to the economy or create jobs. In fact, before 1982, they were considered a form of market manipulation and were illegal.
Sigh. So much here.
1. Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW.
2. No, they were not. They were tax sheltering their income. Nobody paid anything near 91%, unless they did not hire a tax accountant, which would be stupid. Wealthy people are rarely stupid with money, that's why they're rich. (ESPN ran a documentary once about NFL players suddenly becoming rich and just as suddenly going bankrupt because they had no idea how to manage it.)
3. Art is an investment (they expect it to appreciate). So are golf courses (golf players pay to use it). So is luxury real estate (real estate appreciates). Stock buybacks mean buying stock, which is an investment.
4. There's no evidence that "extreme concentration" does anything of the sort, especially since wealth is created, not concentrated. Bob creating more money does not take anything away from Fred. Bill Gates never took any money from me. Neither did Steve Jobs, nor Elon Musk, nor Jeff Bezos. Nor did they ever take money from you.
5. It is not semantics. Having an exchange at market prices is NOT a subsidy. A subsidy is a gift of money. NASA did not buy those rockets as a gift to SpaceX. NASA bought them because they cost 10% of what NASA rockets cost, and NASA used them. NASA did not bet on Musk. If the rockets didn't work, Musk would not have been paid. Musk was losing money, and one more explosion would have bankrupted him. But that one flew, and Musk got paid. NASA did not take a risk on Musk. Musk took the risk.
6. Parkinson is a better economist than you or I. Why not read his books? They're quite good. Do you know the US did not have an income tax until 1913? It was quite prosperous, including public education.
7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends.
> Stock buybacks mean buying stock, which is an investment.
This is wildly incorrect, in that the purpose of stock buybacks is to reduce the number of shares and juice metrics like earnings per share (which weirdly enough, lots of CxOs are bonused on).
> Yes, I am well aware marginal tax rates. For a rich person, the marginal tax rate asymptotically approaches all of the income. You didn't reply to my point, though, that money you tax away from people takes away from their investments. This is the point behind an IRA, FWIW.
Your first comment (around the 100k income and different tax rates) had the weird marginal/total tax rate confusion, so if you'd prefer to avoid that be more clear in the future. As an example, I pay 52% marginal, but about 35% overall.
> 7. Stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends.
Correct, but I think this is a bad way and encoyurages non optimal behaviour.
> juice earnings
As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others.
There's nothing nefarious about it.
> had the weird marginal/total tax rate confusion
I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate.
> I simplified it to emphasize that taxing money away from someone leaves them with less money to invest. The issue of tax rates being marginal is irrelevant to that point. Also, for a high income person which is what we are talking about, the marginal tax rate is his overall tax rate.
This isn't generally true. I'm in the top 5% of income earners in my country, and my marginal and effective tax rates differ by a significant amount (35 effective vs 52 marginal).
> As I said, stock buybacks are a method of distributing profits to shareholders without the high tax rate on dividends. That's why it's done, though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others.
That's certainly one rationale. Personally, I dislike them in most cases (they make sense for companies that provide a bunch of compensation in stock). I personally think that dividends encourage market behaviour that is better (I'd never have sold my FB stock if they'd paid me a dividend), as well as reducing number go up as the only way to gain money from investing.
> though another reason is to invest in one's own company, which is done in the belief that one's own company is a better investment than investing in others.
This is really dodgy from my perspective as by definition, a company has more information about their future earnings than another investor does. I realise that this ship has sailed, but personally I'd prefer to reduce dividend taxes for re-investments and ban most buybacks (but again, this is probably a niche position).
P.S. Income tax is based on income. If the wealthy were hoarding money, they would realize no income and no taxes will be collected. To generate income, the money has to be invested.
Correlation != causation. The US economy in the 1950s and 1960s was a very different beast - Europe (the main industrial competitor) was in ruins, wealth was very much more tied up in factories and plant, and less in equities and other soft assets. The currency was still tied to the gold price. It may as well have been another planet compared to today.
What do you feel that the top marginal tax rate should be in western countries today?
It depends - Western countries exist in a fiat currency world without a gold price tether, so governments that are sovereign in their own currency do not depend on tax receipts to provide services (the Eurozone is a different kettle of fish due to the common currency and lack of defined horizontal stabilisation).
Generally, if governments foresee the need to encourage economic activity, they should reduce tax rates. If they predict their economy is or will become overheated, they should increase tax rates. If they wish to buy votes from people who don't understand how money and tax work in an untethered fiat currency world, they should increase tax rates into the 90%+ range; however, this will cause economic disruption with some time delay, which those responsible will hope they can blame on the party in power at the time of the disruption.
Yes, I am more cynical now than I was 20 years ago.
Yeah? So, they are going to take their factories? They are leaving the biggest consumer markets to sell their trinkets in the giant Costa Rican market?
In Washington State, a tax on capital gains over $250,000 was recently instituted. Jeff Bezos, presumably the target of the tax, left the state just before it went into effect. Friends in the area have told me that many Microsoft wealthy people have left as well.
Seattle has instituted a number of punitive taxes on businesses in the city. There has been a corresponding boom in business across the lake in Bellevue.
The state has benefited a lot by being a low tax state in the past. It is no longer a low tax state. We'll see how that goes.
Musk is one of the more famous industrialists who left California over taxes.
If they were necessary for funding the country's defence, it is likely that it will also break the borders. France can't tax them to raise money to re-arm if they aren't there.
Peace through poverty in Europe would be an interesting development I suppose.
If they liquidate their assets it’s gonna be a lot more affordable to buy homes. I think that alone will warm your heart
The super-rich do not have enough houses to make a dent in the supply of homes.
You know what? Let them leave. If they have business here, are they going to close shop and forego this market? No, they aren't. Can we still tax them for what they remmit to whatever the place they are? Yes, we can.
And where they will go? Once a major developed nation starts being serious on taxing the billionaires, the others will follow soon, or more probably, they will even coordinate among themselves to harmonize their rates.
Yeah, they could go to some third world hellhole where they could bribe the authorities and live in a Pablo Escobar's style compound. Will they do it? Will they subject themselves to the judicial insecurity that abunds in those places? To politician that manage the incredible feat of being orders of magnitude even more corrupt than the ones we have in washington?
All western nations used to have far higher top marginal rates for income and inheritance taxes. Far less loopholes, and yet here we are.
>...All western nations used to have far higher top marginal rates for income and inheritance taxes. Far less loopholes, and yet here we are.
When western nations had far higher top marginal rates for income there were far MORE loopholes, not less. Those high rates did not bring in much revenue. For example:
>...Of the $517 billion the Treasury collected in 1980, only $3 billion to $5 billion came from the 70 percent bracket — less than 1 percent of total tax revenue.
https://www.politico.com/agenda/story/2019/02/05/democrats-7...
(This is one reason that democrats suggested lowering the top rate in 1981.)
Those high marginal rates encouraged all kinds of unproductive investments to take advantage of loopholes built into the law. Where people couldn't get around such high rates, there were deadweight losses from economic activity that didn't occur. Even if someone thinks it is morally ok to take that much of someone's income, those kinds of high rates simply hurt the economy.
The title of that link seem to imply it was a net loss, but the numbers in the body seem to imply that while ~10k millionaires left, the tax revenue loss from millionaires leaving was $5b in (theoretical) yearly lost tax revenue (it's not clear from the article if all those millionaires leaving were even paying taxes as it notes many of them were in a grace period after entering before taxes kicked in, and it doesn't link to the downstream report from ASI).
Given that there's a lot more than 10 thousand millionaires in Britain and they are sticking around to pay taxes (more than enough to cover the $5b from those who left), I don't see how that's actually a bad thing?
This opponents of this kind of discussion always argue assuming a binary. Either we keep the status-quo, or we will enter a socialist chaos.
We are discussing making a fairer tax system were billionaires pay more of a fair share, we are not proposing full communism where we confiscate all their money.
Is any marginal increase on taxes fatally destined to lead to capital flight? It looks like a lot of people are arguing exactly that. Well, in that case lets stop completely taxing the oligarchs! Trickle down stravaganza now!
> we are not proposing full communism where we confiscate all their money.
That's exactly what is usually being proposed - the difference is confiscating everything slowly over decades (rather than by immediate revolution).
The deception is that a 2% tax sounds tiny. If you have a retirement portfolio and are withdrawing money to live (drawdown) then that 2% can easily take > 50% of your wealth over decades. Financial literacy is understanding the power of compounding - yet when it is in reverse it isn't obvious. And when the victims are somebody else (people wealthier than yourself) we conveniently shut our ears to any complaints.
Ironically I think the core motivations of most proponents of wealth taxes are their own greed and envy. Tax anybody else but not moi...
The systematic driver is our aging demographics. Our governments need new taxes to pay for the infinite demand of health services, and the demands of the voting 65yo+ welfare state beneficiaries
If we are going to talk about fairness and greed and envy we should also be discussing how the billionaires benefit from government deficits, how a lot of our government investment is distorted by lobbying from the richest amongst us.
Our years of fiscal irresponsability, of adventures like ZIRP, Quantitative Easings and Stymulus made the rich even richer. Asset Inflation for the rich and purchasing power corrosion for the pleb is all cool and dandy, but it is destroying our societies, and the way we have to fix it is by reversing decades of Lobby facilitated regressive tax policies.
The billionaires benefit from having an educated society to work for them, infrastructure, the rule of law, security from thiefs as well as from foreign governments and organizations. The USMC existence is far more important for big oil magnates than for a public school teacher in Chicago.
I was lucky, I am generation X and I still managed to have a fully paid mortage, a decent, albeit modest, retirement fund, but what about my kids? What world are we leaving them? How can I look him in the eyes and tell, well kid, you're doing great on school, but sometimes I wonder if you shouldn't be playing because our government thinks that you having your own house in the future is something to be decided by the "free"markets, but at the same time, let's subsidize Big Tech to the tune of billions so they can build AI to make sure you won't have a job and will forever live of whatever I manage to pass to you or be a UBI slave.
Because you and I know that all this government money going to AI is motivated by the greed of oligarchs salivating at the prospect of shedding off whole mountains out of their payrolls.
Inflation is never a problem for this system when it is mostly confined to asset inflation. But as soon as we have too little unemployment, and workers start having to mute linked-in recruiter notifications, the calls for austerity start immediatly.
You complain about the poor acting politically for a more progressive taxation system, but why then the rich don't stop lobbying for subsides, why they don't stop lobbying for wars? Isn't it clear that they are they motivated by greed too and will use political power too to satisfy it?
Hollande tried to do this in France (75% effective rate on earnings above a million Euros).
Even his staunchly socialist regime had to admit its failure and abruptly reverse course in 2014, two years later. The tax raised just €260m in 2013 and €160m in 2014…. But caused an exodus of wealth and job creators
Where did they go to?
And did they end up coming back?
Article "Old Money, New Money Flee France and Its Wealth Tax": https://archive.is/Q0ETI has examples Belgium and the UK.
[I've abridged the comments above] Harder to judge the value of talent flight versus capital flight. Anecdotally here in New Zealand I see smart gritty kids emmigrate, and we attempt to import other smart gritty people to replace them.[flagged]
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