Comment by rayiner
6 hours ago
Do those factors meaningfully change the picture? For example, total compensation for Fortune 500 CEOs is only $8.5 billion, which is a rounding error compared to total labor income. And CEOs at the bottom of that range make a few million, so it’s unlikely that CEOs in non-Fortune 500 companies are making the eye popping salaries you’re talking about.
Similarly, what percentage of wealthy people take loans against their assets to fund their lifestyle? You should be able to quantify this if it’s happening at scale.
The income share of the top 1%—so including run of the mill doctors and lawyers—has grown from 15% in 1970 to 21% today: https://ourworldindata.org/grapher/income-share-top-1-before.... There is no way that delta is enough to eat up all the income growth since then.
Some numbers
https://www.sciencedirect.com/science/article/abs/pii/S00472...
"The income tax base captures 60 % of economic income of the top 1 % of wealth-holders.".
I would love if only 60% of my income was taxed. Heck I'm now even taxed on used junk I sell using Paypal (that I bought with taxed income dollars and paid sales tax on). But a tax that includes that other 40% of the top 1%'s economic income, guys, we can't do that. But don't forget to file your Paypal taxes or waves at threat of prison.
"Focusing on the top 1 %, while total borrowing is substantial, new borrowing each year is fairly small (1–2 % of economic income) compared to their new unrealized gains" "1 % of wealth-holders (above $14 million in 2022)"
1-2% of $14,000,000 is $140,000 to $280,000 a year. The median personal income is $45,140. They are benefiting untaxed to the tune of 3-6 times the median American income.
1-2% of 100 million is 1-2 million dollars a year untaxed benefit (44x median income). That is substantial.
I would love to benefit annually by that 'insignificant' amount goin untaxed. We should either exclude all economic income below $140,000 to $2,000,000 from taxation or change to tax this loan scheme that allows the top 1% to avoid their share on income 44x the median and even higher.
That article actually proves the opposite of what you’re saying: “For the top 1 %, new borrowing each year is fairly small: 1–2 % of economic income. ‘Buy, borrow, die’ is not a dominant tax avoidance strategy for the rich.”
OP above said that billionaires pay for their lifestyle by taking loans they never pay lack, and the article says that isn’t a common approach.
> 1-2% of 100 million is 1-2 million dollars a year untaxed benefit (44x median income). That is substantial.
No, it’s not substantial because very few people make $100 million a year, while many people make the median income.
For example, billionaires last year added $1.5 trillion to their wealth, of which 56% was unrealized gains. If you take 2% of those gains as in the article, you get $16.8 billion that should be taxed as income but isn’t being taxed. I’d be fine taxing that money at the top marginal rate or whatever you want to do. But it would raise a piddling amount of money. That’s a rounding error compared to total AGI, which is over $15 trillion. The U.S. governments spend $16.8 billion every 14 hours.