instead of selling their investments to pay for their spending, rich people instead borrow money at super low rates. this causes them to not have to pay much in taxes. they dont have to pay capital gains taxes if they dont realize capital gains by selling. that's a big way the rich get by without paying much in taxes. we shouldn't be allowing that loop hole. they should have to pay a high tax bracket rate on the money that they borrow.
rich people should have to pay a consumption tax on the money they borrow
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@n8nrgim
they dont have to pay capital gains taxes if they dont realize capital gains by selling
Why should someone pay taxes on income they don't make?
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@Savant
rich people take a lot of the earth's resources to become rich. it's like a farmer of a giant farm insisting it's all his and he doesn't owe anybody else any responsiblity. it's only the rules of man that says that whole farm is his. in the real world, people would go plant trees and crops on that farm, and would fight the farmer to survive. it's a basic social contract that we need to make sure the rich pay their fair share because of that abuse of wealth hoarding. rich people shouldn't pay less in taxes than their secretaries. a consumption tax is a good way to level the playing field, to avoid letting them use borrowing as a loop hole.
this is all also why i suppose a wealth tax. that two percent tax on the wealth of rich people that elizaebeth warren supports.... sounds like a good idea to me. but that's another debate.
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@n8nrgim
Rich is a very large category. A lot of billionaires in the US started software companies or invested in creating some product. Not to mention that you'd be directly punishing investment anyway by taxing unrealized gains.
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@Savant
your vision is regressive. optimally, rich people should pay a higher percent of tax on their income than everyone else. what actually happens is they pay less. even if we didn't have a progressive system, and only had a flat tax, they even avoid that tax too... they pay less than everyone else. that shouldn't be allowed to happen. yes it is punishing to have consumption and wealth taxes, but so what. the rich want to live here, they enjoy the benefits of our system... there's no reason a consumption tax and meager wealth tax is a bad thing. the alternative is they pay nothing or next to nothing in taxes. that's just unfair. what i propose is a bare bottom request to help level the playing field. even with what i propose, they are still getting away with murder, and paying way less than everyone else.
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@n8nrgim
rich people should pay a higher percent of tax on their income than everyone else
You're advocating for taxing wealth, not income. Essentially taxing the same money twice. A well-designed regressive tax would tax the wealthy more, but only when they actually realize income. It's a small but significant distinction.
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@n8nrgim
your vision is regressive.
How is taxing economic productivity (income) particularly with the rich "regressive"
The only actual regressive taxes in America are sales tax and lotto tickets. You know, the kind of Taxes you see a lot of in Blue States where the poor get poorer.
Proposing a tax on borrowed money would be another regressive consumption tax.
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@Savant
well, i'm kind of advocating a wealth tax and a consumption tax, and i'd even advocate an ordinary income tax rate on capital gains at for a high enough amount. i know i'm being scatter shot about my proposals, i'll have to reorganize them and reargue them later.
according to you, our current capital gain taxes should be adequate as it is. but you are not doing a good job arguing why the rich should pay less in taxes than everyone else... why they should pay less as a percent than their secretary. why they should be able to use borrowing as a loop hole. you need to argue the philosophy of why we should be worried so much about the rich.
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@n8nrgim
why the rich should pay less in taxes than everyone else
I'm arguing that they should only pay taxes on the money that makes it into their hands. Unrealized gains are potential income, and they might lose all of it. If you want to talk about a progressive tax on income, then that's a different thing. Under your proposal, a rich person could pay taxes on money they never actually make.
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@Greyparrot
i'm just calling it what it is, by dictionary definitions. a progressive system is where the rich pay a higher percent of tax than everyone else. or higher amount in general. and it's regressive when the rich pay less. that's just the dictionary definition.
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@n8nrgim
OK, but poor people borrow money a lot too. You may fall into the same regressive consumption tax trap like the lotto.
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@Savant
a two percent wealth tax is meager. i know they are unrealized gains, but who cares?
why should the rich be able to use borrowing money as a loop hole to not pay taxes?
why do you care about saving them money? shouldn't we be more worried about the rich paying their fair share? you seem more worried about me making the rules different for the rich than everyone else, but why do you care to begin with? if we have a progressive system as our base, wouldn't our system be more consistent on those values, if we tried to get rid of all these loop holes? isn't it more fundamentally fair to make sure that the rich contribute to our society? the way it is, they could go most their lives without even paying taxes. that's ridiculous.
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@Greyparrot
my intention is only for the rich to pay a consumption tax
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@n8nrgim
a two percent wealth tax is meager
What you're taxing isn't actually wealth, it's potential wealth. The person could lose all of that money tomorrow but also pay taxes.
a loop hole to not pay taxes
It's not a loop hole. If they ever want to use the money, they will have to liquidate it, which requires paying taxes.
making the rules different for the rich than everyone else
I think unrealized gains should not be taxed for anyone. This does not afford the rich special treatment, and it still allows for a progressive income tax system.
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@n8nrgim
my intention is only for the rich to pay a consumption tax
And how would you enforce that? Can you even possibly imagine the kinds of loopholes in such a policy? One easy one I could think of off the top of my head would be getting an incomeless child to take out a proxy loan....
they could go most their lives without even paying taxes. that's ridiculous.
That's always going to happen when you set up an unfair tax system where nobody pays a flat fair share.
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@Savant
a person like jeff bezos can go his whole life without paying taxes. for some reason that you won't get into, you think this is just a fine outcome. you are not doing a good job arguing why we shouldn't try to get more taxes out of those who avoid paying taxes yet get rich. they're using loop holes. and on the wealth tax, why does it matter that they might lose it all some day? they might they might not. either way they should still be contributing meaningfully to the country. as it is, because of your vision, they can go their whole life without paying anything. you need to argue the philosophy better about why you care so much about rich people who dont pay much in taxes.
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@n8nrgim
can go his whole life without paying taxes
Because he's already made as much income as he needs. When he made that income initially, he paid taxes on it.
loop holes
Under current laws, the rich pay taxes on all income before they can use it. Capital gains aren't useful to the rich until they translate to income.
they might they might not
Taxing income avoids this risk. Capital gains that are lost shouldn't be taxed.
they can go their whole life without paying anything
The rich make income, which they pay taxes on. Anything they don't pay taxes on, they won't be able to spend.
why you care so much about rich people who dont pay much in taxes
I'm not singling them out. I don't think anyone should pay taxes on unrealized gains.
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@n8nrgim
Are you arguing under the assumption that the rich have not purposely designed the current unfair tax system? What makes you think the rich wouldn't embrace more unfairness and loopholes with your proposition?
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@Savant
the rich can borrow money their whole life and never pay a penny in taxes. why do you support this? a two percent wealth tax is meager, and is only trying to get at people who pay little or nothing in taxes. why do you not support that? for some reason, you keep making bare assertions that you just dont like the idea of them paying anything other than an income tax... but you keep not supporting your arguments with philsophy or barely any reasons. why do you care so much about rich people who pay nothing in taxes?
the rich can borrow money their whole life and never pay a penny in taxes. why do you support this?
So why do you support an unfair tax system where there is no standard rule for all?
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@n8nrgim
can borrow money their whole life and never pay a penny in taxes
They have to pay it back eventually or go bankrupt. For that, they need income, on which they will pay taxes.
why do you not support that?
By the rich, I assume you mean people who can afford to buy more things. Buying things requires income, hence, income should be taxed. Someone who borrows money and loses it is not rich, yet they would be taxed on money they never made, under your proposal.
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@Savant
billionaires probably aren't going to go broke. but either way, why not take tax from their consumption and wealth? what harm is there? if they go broke eventually, at least they helped support the government with meager taxes. these aren't huge things i'm asking for. most likely, they will either be just as rich when they die, or maybe a little more or less... still all the more reason they should have to support their government in the form of taxes
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@Savant
"They have to pay it back eventually or go bankrupt. For that, they need income, on which they will pay taxes."
id rather they pay taxes during their life. with your system, they could just borrow money their whole life and wait for their estate to pay it back when they die
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@n8nrgim
these aren't huge things i'm asking for.
You may achieve some amount of the effect you want, but it will be indirectly. If you support progressive taxation, then you should support taxing an increased percentage of income realized by the rich. That would ensure that you actually tax more privileged members of society (i.e. people who can afford more things.) A proposal can achieve some desired effects but still be poorly designed. It's this measure of inefficiency that I am addressing, not the principle of progressive taxation.
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@n8nrgim
they could just borrow money their whole life and wait for their estate to pay it back when they die
In that case, they'd be borrowing against assets they already have—accounting for the interest and taxes, they'd be borrowing significantly less than the value of their assets. This is not a net gain for them, because they'd be able to buy more by just liquidating their assets instead of borrowing.
If they did do such a thing, then the taxes are still being paid from their assets. That's money they wouldn't be able to spend during their lifetime.
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@Savant
we could just raise taxes on our progressive tax system. that might fulfill my desire for more taxes from the rich. but it wouldn't directly address people who go their whole life without paying taxes, or paying very little in taxes. to you it's about some ideal efficiency in our tax system not to go after them directly, not to tax things other than income... but the bigger picture is that everyone should have to chip in a more standard amount. if they just borrow money their whole life and never have income... they could get rich and never pay taxes. that's just unfair. i think u just need to be willing to think outside the box a little more. it sounds like you suppose progressive taxes, so it's a modest and logical step to support meager consumption taxes and wealth taxes. (and for rich people, a higher capital gains tax)
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@Savant
"In that case, they'd be borrowing against assets they already have—accounting for the interest and taxes, they'd be borrowing significantly less than the value of their assets. This is not a net gain for them, because they'd be able to buy more by just liquidating their assets instead of borrowing."
rich people borrow because it is a net gain for them. they borrow at one percent interest a year, while they keep their money invested, where their investment increases at twenty percent a year. it's never a net gain for them to sell their assets, cause they then have to pay income tax on it, and they can't make profit if they sell the assets.
where their investment increases at twenty percent a year.
If an individual's investments increase by twenty percent a year, they would likely be subject to capital gains taxes when they sell those investments and realize the gains. The tax would be levied on the profit made from the sale, which is the difference between the selling price and the original purchase price.
it's never a net gain for them to sell their assets
Then they don't actually have any tangible wealth. Like things you can actually use such as food, shelter, clothes...
Are you really rich if you do not have those things? Wealth envy is usually directed at people who have more of these tangible things.
A good analogy would be a homeless person with 10,000 scratch off tickets in his pocket. He isn't rich until he scratches them all and cashes those tickets in.
I am a non-expert but doesn't this just encourage underground borrowing? Look at the kind of countries we are talking about.
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@n8nrgim
instead of selling their investments to pay for their spending, rich people instead borrow money at super low rates. this causes them to not have to pay much in taxes. they dont have to pay capital gains taxes if they dont realize capital gains by selling. that's a big way the rich get by without paying much in taxes. we shouldn't be allowing that loop hole. they should have to pay a high tax bracket rate on the money that they borrow.
Why would you call a borrowing tax a "consumption tax", we already have that, it's called a sales tax.
Making borrowing more expensive will benefit the rich, and penalize everyone else, the rich would get richer, and everyone else would get poorer.