Comment by caslon
6 days ago
The top 1% of people make 20.7% of the country's income. Given progressive tax rates, they should be paying a lot more than 40% of Federal income tax revenue, but rates don't scale enough, and aren't lax enough on other classes.
Can you explain your reasoning behind "they should be paying a lot more"? I kept hearing that they didn't pay their "fair share" when in fact it appears they pay double. It just seems like whatever they actually pay, measured in dollars or as a percentage, will always be widely regarded as not enough.
There are a couple of key phrases in politics that get used because there is no actual justification. "Fair" is one of them. It is impossible to achieve fairness in the tax system under any circumstances, it is always taking from someone who - from the fact that it isn't voluntary - we can assume quite likely disagrees with how the money is about to be used. Taxes are fundamentally arbitrary.
So in practice, if "fair" is used in politics the appropriate reading is often as a euphemism for "I think we have the numbers to push this interpretation of the world on people; it'll be good for us".
Could you help me understand why an individual with one billion, needs two? At what point would you accept that someone has more money than they'd reasonably need? And if you just thought of a maximum amount, then, wouldn't the acceptable tax rate over that amount, be 100%?
> Could you help me understand why an individual with one billion, needs two?
Sure. https://news.ycombinator.com/item?id=43687828
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So every enterprise becomes state owned? Ilya Sutkever's new company is already worth 32B so 31/32 of it should be owned by the government in your world? Who makes the decisions for it?
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Assume you think the government is in a better position to spend that billion than the billionaire is to figure out what to buy or invest their money in?
I know he's out of favor with a lot of people, but would Elon have created SpaceX or The Boring Co or Neuralink, or helped start OpenAI if he hadn't had the spare billions to do so?
I'd much rather have multi-billionaires investing in the economy, and in the future, than giving additional money to the government.
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> when in fact it appears they pay double
They very obviously don't make only twice as much money as the bottom 80%, so how is that equal in the slightest?
You've mis-read the comment. This logic is not strictly related but it might help you understand what he was saying:
There are ~300 million people in the US who are not billionaires. If they earn, on average, $4 each that balances out a billionaire by income [0]. Since there are <1,000 US billionaires, the average american income would need to drop back to something around the $4,000 range for billionaires to be out-earning them.
This is why taxes tend to land heavily on the middle class, the billionaires don't control most of the money. If politicians want access to money, the biggest pot isn't the billionaires.
[0] And billionaires don't generally make billions in income because it is a wealth measure.
The top 1% aren't the billionaires. It's also not most of the millionaires. It's people earning a tiny bit less than 700k a year.
The suggestion is simply that the top 0.1% pay more - as they will be little affected by it.
It's important to distinguish between wealth and income. Like, I would say that a lot of HN readers are in the top decile of income in whatever country they live in, but far, far fewer are in the top decile of wealth.
Personally, I think that we should tax wealth more in general, and probably make the income tax a bit more progressive (I currently pay 52% which sucks, but if I had to pay a few pp more to get rid of homelessness and poverty in my country then I'd be ok with it).
> as they will be little affected by it
Everything you tax away from wealthy people is removed from their investments.
For example, if all of Musk's income above $1m were taxed away, the following companies would never have existed:
1. Tesla
2. SpaceX
3. Starlink
4. Neuralink
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What is the right percentage for the 1% to pay? State a percent.
I keep here this “the rich should pay more”, but rarely do I hear a number.
Whatever it takes to restore 1960s level of inequity.
By whatever measure works, eg old school gini coefficient or something more modern.
You're right though: food fights over decimal points and gaming the rules nicely obfuscates any constructive debate about what kind of society we want.
Your answer begs the question - why is the 1960’s the right target?
And if the Gini coefficient is calculated pre-tax and pre-benefit distribution, it’s not going to change with high taxes and high redistribution (and yes you mentioned it may not be the right measure).
And if the Gini coefficient is calculated based on income data from the US, do we know if the better Gini from 1960’s wasn’t just due to income not being reported to the IRS?
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Tax every dollar over $999,000,000 at 100%.
50% tax.
For perspective: UK tax rate bands are 40% between £50k-£125k, 45% above that. So 50% tax for the 1% isn't wild at all in absolute (although it's a big departure from the american approach to taxes, of course)