f You Can’t Have Wealth Taxes, You Don’t Have a Country

Babba

Former Staff
Jul 2007
78,410
70,508
So. Md.
This piece is an interesting argument about how to go about taxing wealth at a rate that helps sustain, maintain and and help our country progress. Essentially, we need to enter into agreements with the rest of the world that reduces the number of tax havens so that the super rich have no choice but to pay their taxes. The lax tax laws that the wealthy have been functioning under since the 80s have been a big reason why we have such high debt. Insisting that our meager social safety net is the cause is absurd.

The costs of our government’s inability to police every inch of our 1,933-mile border with Mexico — and thus, perfectly enforce our legal restrictions on labor mobility — are miniscule if not nonexistent. Far from burdening middle-class taxpayers and straining the welfare state’s capacity, undocumented immigrants contribute an estimated $13 billion to Social Security and $3 billion to Medicare each year, despite their ineligibility for those programs’ benefits. Meanwhile, America’s undocumented population also increases our nation’s productive capacity, and thus, the size of the economic pie that can be diverted to publicly beneficial ends. These facts, combined with the undocumenteds’ greater propensity for abiding by our nation’s laws, means that the imperfections in our immigration enforcement system have gifted our country a lower crime rate, higher economic growth, and a smaller federal deficit.

By contrast, the costs of Uncle Sam’s failure to enforce existing taxes on the rich (let alone, to enact rates commensurate with popular preferences) have been exorbitant. By the IRS’s estimates, tax evasion costs the federal government roughly $450 billion in lost revenue every year. Much of this is achieved through underreporting, but a good chunk is attributable to the illicit movement of wealth across borders. Globally, upwards of $6 trillion in untaxed earnings are stowed away in tax havens, according to the estimates of economist Gabriel Zucman, a leading authority on the subject.
The author also points out how a majority of Americans think the wealthy don't pay enough in taxes but because of the concentration of wealthy in the hands of a few those few have an outsized influence over our government and our elected officials who write laws that benefit the few to the detriment of the many. And because policies and laws that would benefit the average American are ignored for the sake of the few, Americans have come to hate government because it doesn't work for them. I don't see how anyone could argue that most of our economic growth has benefited the wealthy in a far greater way than it has the vast majority of Americans and a big reason for that is the fact that the wealthy pay so little in taxes.

 
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Djinn

Council Hall
Dec 2007
52,678
40,017
Pennsylvania, USA
Many millions of Americans already pay a wealth tax. And nearly all of them are middle class.

As of last year, about 14 million Americans have at least 50% of their net assets tied up in their homes (Source - MarketWatch). These people pay property taxes based on the value of their homes. Given that they are paying a tax directly based on at least 50% of their net assets, this is a de facto wealth tax.

Wealthy people, of course, have most of their assets tucked away in investments and other financial mechanisms, so the percentage of their net wealth which is taxed is absurdly small.
 
May 2013
20,757
21,574
N Oregon Coast
I saw some reporting over the weekend that only one in fifteen millionaires gets audited and one in eight billionaires is audited. Why? The IRS is underfunded and lazy. Too much work, so they go after poor people and the middle class.

The Internal Revenue Service is in a bind. The agency's job is to collect the taxes that fund everything else in the government, from Social Security to the Post Office to Medicaid to the military's endless conflicts across the globe. But the IRS is struggling: According to Vox, Americans owe a cumulative $131 billion in unpaid taxes, enough to completely fund the Department of Education for two years. The bulk of that money is owed by the wealthiest people in the country, yet the IRS isn't attempting to collect it from them. Instead, as IRS Commissioner Charles Rettig confirmed in a letter to Congress recently, the agency literally can't afford to audit the rich, so it's pursuing the poor instead.​
ProPublica has published multiple stories on the sad state of the modern IRS over the past year. They found that a person is more likely to get audited if they make $20,000 a year than if they make $400,000. That's because it takes a lot less time, money, and people to investigate someone who receives the earned income tax credit, one of the government's largest anti-poverty programs, than it does to look into the complicated holdings and filings of someone else making 20 times as much. And even further up the economic ladder, things aren't any better: Millionaires were 80 percent less likely to be audited in 2018 than they were in 2011.​

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