Billionaires Descend On Davos To Disparage The Communist Method Of “Taxation” And Announce Their New Plan: Pretending To Be Moral
Hmmmm. What is moral and what is not is best left to priests and philosophers. Are you one or both?
the revolutionary plan from New York congresswoman Alexandria Ocasio-Cortez
Not sure what’s “revolutionary” about going back in time to a plan that’s had bad results in the past, but…carry on.
he called out the Democrat over her plan to introduce 70% tax rates on anyone that has decided to have a lot of money, as all people are (of course) able to do.
I think it was Richard Branson who said that the easiest way to become a millionaire is to become a billionaire first, then start an airline. But I digress. :-)
wanting to avoid paying their fair share of tax.
Actually, the larger debate is what the definition of “fair” is, considering that ALSO is something definable only by priests and philosophers. Everyone I know wants to pay their fair share; however, what “fair” means is up for discussion.
where billionaires are now openly sharing their reluctance to help people below the poverty line, currently living on government support and help schemes alone.
Untrue. They’re expressing suspicion of government being a competent proxy between themselves and the people below the poverty line. And they’re wise to be suspicious, considering that government has a chequered history of competency.
“Well, name a country where [a 70% rate] has worked. Ever.” Unfortunately for Michael Dell, as Erik Brynjolfsson quickly pointed out, the U.S. itself actually had top marginal rates exceeding 70% in the post-Second World War period — in fact, the top marginal tax rate in 1952 and 1953 was 92%.
True. But Dell is correct that marginal rates that were actually paid has never “worked”, anywhere. It’s the uncomfortable truth that the hightaxophiles want to bury under the carpet.
What IS true is that when the US had rates like that, the tax code was riddled with tax shelters that allowed the rich to markedly lower their adjusted gross incomes. Data shows that from the 70’s to the 80’s, the rich did not pay a substantially larger effective rate of tax when the marginal rate was 70% compared to when it was dropped to 28%, because the tax shelters were also ended at the same time.
What’s also forgotten is:
- The rate of recessions was almost 2X as high when marginal rates were high compared to after they were dropped, and
- Those high marginal rates, and the economic inefficiency they contributed to, was a contributor to the recession-ridden period of the 1970’s to 1982, when inflation and unemployment in the US both hit double digits.
Another historical item in Dell’s favor is that many countries in Europe tried those sky-high rates at the same time, and have since dropped them precipitously, because of how ineffectual they were. Sweden, for example, had a 92% marginal rate on high income in the early 80’s; they then realized how counterproductive that was, and dropped the rate incrementally to its current 57%.
Although it is still a big jump from 36.4% to 42%, it is not correct to say that taxing all of the 1% at rates higher than 70% “worked under Eisenhower”.
Thank you for that admission.
Equally ridiculous, however, is the idea that lowering tax rates on the rich any further would promote job creation or “philanthropy”.
That’s not ridiculous in the least; there’s no question that job creation and philanthropy would be affected. How much? Well, not as much as the conservatives say it will, but more than the liberals want to admit. :-)
In fact, no matter how much billionaires claim to give to charitable causes it almost always works out to be less than what they would be paying if they paid even slightly higher taxes or stopped avoiding tax altogether.
Maybe, but we’ll work on the errors in that statement in a bit.
i.e., the electorate can no longer decide where they feel it should be put — making philanthropy projects susceptible to personal wishes, bribery and corruption without any of the money actually helping the people that need it.
That’s cute, the way you pretend that “the government” has the same objectives as “the electorate”. Would that that be true. “The government” is a monolithic mess that prioritizes MANY factors above “the electorate”. Corporate interests. Military considerations. Big-money special interests. Traditional objectives. Not “the electorate.”
And if “the electorate” is not in control, then common sense tells you you’d rather have that money in the hands of the person who was smart enough to earn it. (Unless you think the US needs to build more bombs, of course. Maybe you do.)
OK, now we’ll deal with your mangling of the pie charts.
Adding the percentage of spending that the U.S. government spends on specifically helping people or assistance projects, including science (1%), international affairs (1%), education (3%), veterans’ benefits (4%), Medicare and health (27%) and social security (33%) amounts to just under 70% of all federal spending on ‘assistance causes’.
That’s a broad brush, but rather than debate over what part of “international affairs” and “science” money actually HELPS people, let’s deal with the large error in your math.
Medicare, Medicaid, and Social Security are not funded out of income taxes. They have their own funding mechanisms, and BY LAW, cannot use income taxes in their funding. So, although they appear in federal pie charts of expenditures, they do NOT appear in federal pie charts of “where do your income taxes go.”
So, let’s cut that “just under 70%” to 70%-27%-33% = just under 10%.
Boy, that changes your premise, don’t it? :-)
If a billionaire pays the current top marginal rate of 37%, then the amount going to ‘assistance causes’ as part of his tax payments is 25.9% of their income. As a result, the only 2 philanthropists from the New York Posts’ philanthropy listings that beat this loosely-calculated 25.9% value are Warren Buffet and the controversy-plagued Gates Foundation.
You’ll want to rework that math, eh?
So is it really a shock that billionaires like Michael Dell are so against Alexandria Ocasio-Cortez’s tax proposals, which would mandate that their money actually does go to help people other than them?
Not at all. If I knew that only 10% of my additional taxes were going to help people, and 90% of it was going to go off and do other shit, I’d rather hold on to it myself as well.
For all the issues and criticism that any government gets for its inefficiency, it is clearly better at allocating money towards causes where it would substantially benefit people over a private corporation that gives money as an extension of a marketing department.
(Cough. Cough.) That statement should be immortalized in the list of “Most Sweeping Unsubstantiated Opinions Ever.”
(BTW, the fact that a corporation gives money as an extension of its marketing departing is a positive, not a negative.)
Hope that helps.