Doug keeps asking Bud how a “soak the rich” plan would work. (Yeah, they’re having that argument again.)
I thought I’d step in and help. I’ve got it all worked out:
Carnivals would be set up in each county across the country. Each one would feature a dunking booth. The richest people in each county would be placed, one at a time, on the seat in the booth. In large metropolitan areas, only billionaires would be used for this purpose. In the nation’s biggest markets, such as New York and Los Angeles, these would be famous billionaires. Mind you, we’re not just talking Jeff Bezos and Bill Gates, but some REALLY irresistible targets like, say, Kylie Jenner and Justin Bieber.
In Washington, it would be Trump in the booth.
Members of the middle class would be charged $100 a throw, folks below the poverty line only $20 (Doug will object to this approach, but he should reflect that if they can’t afford the $100, we don’t get anything). Some of them would be so eager, they would take out loans in order to throw until their arms wore out.
With the proceeds, we could have single payer.
We could have these carnivals periodically — say, once a month — and my next way to spend it would be on a 600-ship Navy.
Then, I’d start socking it away to save Social Security.
Oh, and we’d finally have those bases on the Moon and Mars I’ve been wanting.
The sky’s the limit. We’d be rolling in dough….
You don’t have to thank me. Just give me 1 percent of the proceeds. I’ll make do with that, and be content…
If we’re ever REALLY desperate for funds, we can take this approach.
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Oh, here’s an enhancement:
It would be cruel and unusual (but fun) to have Trump be the only attraction in Washington. We should give him breaks to dry off.
In those breaks, we’d replace him with Bernie Sanders, Elizabeth Warren, Alexandria Ocasio-Cortez, et al.
For those, we’d charge a cool million a throw. I mean, the billionayuhs should get to have their fun, too. And it would be silly to leave that money on the table…
Or we could have the Pentagon stop spending $5 million on lobster… And a trillion on unnecessary wars. No soaking required.
I’m right there with you — or I will be, once you identify an “unnecessary war” for me.
What are the “unnecessary wars” we’re engaged in now, for instance? Should we not have gone into Afghanistan after 9/11? You know, in order to eliminate the safe haven that the Taliban was providing for Al Qaeda? And if you think we should have, but should have left at some point after, at what point would have have been? Please provide a detailed appreciation of the strategic and tactical situation at that time, so I’ll understand why that was the time to leave…
I say this from a standpoint of not knowing WHAT we should do, frankly. I’d like us to be out of there, but personally I haven’t seen a moment when I thought we could say, “If we leave know, we know the situation won’t slide right back to where it was in 2001.”
Of course we should not have gone into Afghanistan or iraq… We know now what many of us knew then. It was a mistake. It did nothing but create even more animosity towards the u.s. And every time we kill innocent people there, we create more people who hate us. We wasted American lives and trillions of dollars on NOTHING. War mongers and defense contractors are a disgrace to this country.
“Of course we should not have gone into Afghanistan…”
Practically no one in this country agreed with you.
Yes, but what about now? Practically no one in this country agrees with you.
I can’t help that I was right then.
We’ve basically killed thousands of Americans and tens of thousands of innocent people because three airplanes in 2001 didn’t have a $5 lock on their cockpit doors. We use a bazooka to try a kill a mosquito. We think America knows what is best for other countries and will kill as many of their people to prove it.
At least we have some Democratic Presidential candidates who served and know that our efforts were a mistake. I will be supporting them to the fullest.
Arguably, most of America’s wars have been “unnecessary,” if by that we mean they were wars of choice. Which isn’t to say they were right or wrong, just that they weren’t forced on us by an external aggressor. The Revolution itself was a war of choice. So, too, was the War of 1812, especially since it was declared after the Brits had acceded to most US demands. The Spanish-American War was definitely a war of choice. So, too, in a sense was our participation in WW1, given that we could have remained out of it without suffering major injury. The Vietnam War was a war of choice as was the war against Iraq launched in 2003. None of them HAD to be fought, though there may have been advantages to doing so.
The only one of those wars that was perhaps unavoidable was WW1. After the Zimmerman telegram it’s pretty hard to see how we stay out. The War of 1812 was the 19th century version of Iraq. Pretty much nothing but an excuse to invade Canada. Spanish America war was based on a lie. Pure imperialism. Time to get out of the business of optional wars.
So… you had no problem with the Brits forcibly removing sailors from U.S. ships and pressing them into service in the Royal Navy?
Mr. Madison’s war was inconclusive and solved nothing. But it was certainly not just an excuse to invade Canada. And anyway, that didn’t work out so well…
By the way, y’all, I’m currently reading The Face of Battle by John Keegan. Kind of dry, but I like it. I’m currently in the middle of his detailed reconstruction of the battle of Agincourt. You know, the original “band of brothers.”
Oh, and now I suppose you’ll now say THAT war was unnecessary, and that it was purely about Henry V asserting his claim to France. And… you’d be right, about that portion of the Hundred Years War, anyway…
I’ve watched two versions of “Henry V” recently (Kenneth Branagh and Tom Hiddleston), and I must confess I found the Archbishop of Canterbury’s explanation of Henry’s claim to France a bit hard to follow each time:
An interesting thing (to me, anyway)…
I still think Kenneth Branagh’s version of the St. Crispin’s Day speech is the best I’ve seen. He’s a ham, but he makes the pep talk work.
Tom Hiddleston took an almost opposite approach in his “Hollow Crown” version. It’s very quiet, not at all bombastic or exhortative. He’s just quietly speaking to some of his lords, rather than giving a rousing speech to the army.
I’m curious what y’all think of it…
These are still arguable propositions.
The Zimmermann telegram was a flop. It failed to achieve its core purpose: to get Mexico to declare war against the US. Neutral rights and unrestricted submarine warfare were more significant than Zimmermann. Though neither absolutely necessitated a full-on declaration of war.
As for the impressment and the War of 1812, it was not mentioned in either the declaration of war nor the Treaty of Ghent that ended the war. So US officials apparently didn’t consider it that serious a matter. It was more a propaganda tool deployed by expansionist-minded Americans to gin up public support for war. Besides, a sizeable portion of US Navy crews consisted of British deserters – or those pressed into service by the US itself. So it wasn’t simply a matter of Brits taking Americans captive.
Technicalities… 🙂
I just like any explanation that might come from the pages of a Patrick O’Brian novel…
The Zimmermann telegram was a flop. It failed to achieve its core purpose: to get Mexico to declare war against the US.
-Mr. Smith
Whether the telegram was a success or a flop is irrelevant. Wilson didn’t want war. But that telegram suggested to most Americans at the time that Germany was a bona-fide threat. In hindsight it seems that WW 1 could have been avoided. But in the moment I get the urgency of the situation. But it does serve to illustrate how blinded politicians get when confronted with a threat from abroad. You can forgive the politicians of 1917 a bit since major wars had not been fought for a while. Too bad politicians from the 60s and 21st century didn’t learn the proper lessons from WW 1.
We should have just ignored the bombing of Pearl Harbor. The Japanese made a “mistake” to use the word I hear as excuses from convicted felons.
I like it!
There’s no need to soak anybody. If we treated all income equally, we would have a budget surplus. Stop the preferential treatment of unearned income and put all income onto the books for Social Security and Medicare. Right now, my income from capital gains and ordinary dividends are both capped at a 20% rate. If I had been granted stock options, they are not taxed until exercised, and then at a favorable rate if held more than a year. None of that nor my income from rentals pays FICA and very little Medicare tax. Royalties – no FICA. Salaries above $132,900, no FICA. That’s how Warren Buffett (and many others) pay a lower effective tax rate than a $75K per year firefighter.
Let’s also add a small 1/4 percent transaction tax on stock, commodities, options, and mutual fund trades. It will raise money and blunt the volatility caused by speculation, arbitrage, and Vegas-style securities trading. Our stock market should be driven by investment and earnings rather than rumor, manipulation, and gambling.
The problem is that you would have to redefine how Social Security works. Rich people would be paying in millions into what is SUPPOSED to be a personal “safety net” for retirement. If Oprah makes $100 million and has to pay in 15 million to Social Security/Medicare, she’s not getting that back later, right? And then how are you going to divvy up all that extra tax revenue?
Effective tax rates are meaningless. when you look at the total dollars contributed. The “rich” that people want to “soak” are already paying for most of the federal government outside of Social Security/Medicare. The top 1% of earners making around 500K a year pay 37.32% of federal taxes.
“The top 1 percent paid a greater share of individual income taxes (37.3 percent) than the bottom 90 percent combined (30.5 percent).”
https://taxfoundation.org/summary-latest-federal-income-tax-data-2018-update/
So instead of soaking the rich, maybe we should be thanking them instead. They are the driving force that keeps our government working. And that doesn’t include all taxes that are paid by the jobs those rich people are responsible for creating.
We don’t have a revenue problem, we have a spending problem.
We have a revenue problem and an income distribution problem. Never before has so much income been of the books for FICA. Pay disparity is a matter of too much power among the top earners and too little for the line workers.
As far as Oprah’s problem, we are a nation, not a collection of individual citizens all on our own. We need to act like it. Under-taxing high incomes may be as much a disincentive for using one’s wealth as over-taxing it (Thomas Jefferson).
The reason high income folks pay the biggest portion of taxes is because they have the income. By the way, huge deficits are the Republican modus-operandi since Reagan. Check the numbers.
Income inequality is a huge problem. Given the obvious fact that wealthy people don’t earn their wealth I have no problem taxing them much more. It’s the pragmatic thing to do. I’ve seen these meaningless numbers that show how the wealthy pay such a high % of government revenue. That merely proves how privelaged the rich really are.
By what logic are dividends capped at 20%?? I sort of understand the capital gains cap (although those arguments are overstated) But ordinary dividends? Comes about as close to free money as there can be. You inherit a bunch of stocks and pay zero inheritance tax up to $5mil. (No limit if Republicans get their way). Then pay a low rate on the dividends. The rich really do have it it ridiculously easy.
“Biden was wrong to say that he doesn’t have a savings account because he shares one with his wife. However, he doesn’t have ownership over any stocks and bonds — those all belong to his wife. We rate his statement Half True.” – https://www.politifact.com/truth-o-meter/statements/2014/jun/24/joe-biden/biden-says-he-has-no-stocks-bonds-or-savings-accou/ – POLITIFACT
Inheritance tax is one that should be illegal. You’re taxing something that has already been taxed once. If we’re going to go that route, let’s tax real estate sales. Let’s add another $15,000 (7.5%) to that $200,000 house for sale.
I’m sort of ambivalent on the inheritance tax, but… You’re not taxing an individual twice. The second time, you’re taxing someone else, who is receiving income he or she did not earn…
That said, I’m as I say ambivalent. I respect the natural desire to leave one’s estate to one’s children. But I’m more respectful of the will of the deceased than I am the rights of the heirs….
Which is why it’s smart to put large assets in a Trust.
When you and your wife pass, do you want your children to have to sell assets to pay taxes they inherited from the Warthen fortune? If you owned a newspaper, would you want the newspaper sold off and employees let go to pay the inheritance tax facing your children?
If we’re going to go with an inheritance tax, why not just have the government seize all assets of the deceased person and auction off all non-monetary items to highest bidder, with the proceeds and monetary assets going to the government?
Agree 100%. The assets that are passed down thru inheritance have already been taxed – -the income used to generate wealth, the dividends from investments, the property that is taxed yearly. There seems to be this desire to inflict one last grab at the wealth as “punishment” for being too successful.
I know, I know.. it only affects those awful rich people who deserve to be soaked as much as we can. They’re all just lucky lottery winners who don’t deserve to keep what they have accumulated within their family.
It’s always so easy to come up with brilliant ideas to take money from people who have more than you do.
Doug, you sound like a sensible person who has spent time in Minnesota, the state that is making California look sensible.
Boy, you guys have fallen for that old deceptive line big time. Over 70% of inherited assets have never been taxed at all. Most are unrealized capital gains, whether businesses, property, or houses (below the $450K lifetime limit even if realized). It’s not double taxation. You guys must think large estates passed along money that was kept in savings accounts. Fewer than 2% of estates were taxed under the old law (under $10.5 M), many less under current law (about $20M).
Were the businesses and property paying taxes while in the possession of the owner? If so, they generated tax income already.
As for the capital gains, aren’t those gains realized when an asset is sold? Why should someone who inherits a business pay a tax on the capital gain until they sell the asset? A ten million dollar home isn’t worth ten million until you sell it. And it still generates a ton of property taxes no matter who owns it.
Let’s say a 100 year old dude dies with a billion dollars in wealth. His 80 year old sole surviving son inherits the billion and pays tax on it. Let’s say he ends up with $600 Million. Then he dies a week later and leaves his $600 million to his only surviving 60 year old daughter. Now the daughter has to pay tax on the $600 million. Maybe she’s got 360 million left. She gets hit by a bus a month later (unlucky family!)… now her dog Fluffy is the sole beneficiary in the will. Buffy will then end up with about 200 million…. So essentially with the current system, 80% of the billion has gone to the government for no reason other than someone dying.
Cute story, but hardly a justification for the reality of extreme accumulation of wealth that has moved us into another gilded age.
If Fluffy can’t live well of of 200Mil she didn’t earn, she just needs to act cute enough to be adopted by a wealthier person.
Sounds like Fluffy is getting 200 million of free money. The other 800 million is money the rest of us don’t have to pay. Win-win is what you describe.
win-win = take-take
The $trillion Amazon paid zero income tax in 2017. Seems like Jeff Bezos heirs can’t claim double taxation as a hardship.
How many state sales tax dollars did they collect from people in SC ? How much federal income and FICA taxes did Amazon pay for its 600,000 employees? How much property tax did it pay for all of its buildings across the country?
Amazon is the greatest thing that happened to the U.S. economy this century. It is a marvel combination of logistics, technology, and entertainment content creation. Bezos created FROM SCRATCH a company that provides a marketplace to the world both for consumers and vendors. And he did that in 25 years.
You could have bought 100 shares of AMZN in 1997 for under $200. Those shares would be worth $170,000 today. Anyone could have done that. Not lucky people… ANYONE. Bezos bet on himself and won. He took the risks. He used his brain to come up with a plan and he worked hard for years to make it a reality. He didn’t steal his wealth so we shouldn’t think we can steal it back from him when he dies.
Search “luck and economics” or “luck and success” and see your opinion is a minority opinion. That won’t change your mind, but please try to understand why others believe differently than you.
Of course my opinion is the minority opinion. Otherwise those who aren’t successful would have to accept responsibility for their situation. It’s easier to just say successful people are lucky.
I’m perfectly fine with holding the minority opinion that successful people who attain wealth ethically through hard work deserve to be admired instead of hated. I don’t minimize their accomplishments. I also have no interest in taking more of their money from them simply because they have more. Some people are just better at what they do than the rest of us.
If I gave you or bud a million dollars, how much could you turn that into in five years? Would you have the ability to double it? And by ability, I mean not handing it to someone else to invest it. There are any number of people who would turn that million into zero in five years — not due to luck but due to incompetence.
Amazon going from zero to an $800 billion dollar company in 25 years isn’t luck. It is the result of a series of actions, most successful with plenty of failures thrown in (remember the Amazon phone?). I fully subscribe to the saying “Luck is the residue of design”.
You miss my point. I did not state my opinion, which is luck AND hard work are factors, and I don’t want to try to quantify which is more important. Understanding other intelligent people’s point of view is important, and understanding why other people think the way they do is the key to changing their minds,
If you gave me a million dollars, that would be one of the luckiest days in my life! I wouldn’t feel a need to double it; my wife and I are doing quite well in our “semi” retirement, thank you. Some of our success is due to luck, some due to hard work. I don’t live in a binary, either/or world. I live in a shades of grey world.
Doug,
We could go through a litany of successful corporations, companies, etc. that is a direct result of hard work, opportunity meeting demand, and thinking outside the box. A couple of examples, FedEx and UPS. We see both company’s trucks almost every day of our lives and don’t think about the impact they have on every day life. They provide a needed service and provide employment to approximately 1 million people not counting the ancillary corporation and company support necessary for both companies to operate. New trucks, uniforms, office supplies and equipment, buildings, fuel, packaging supplies, etc.
Yet both companies started from scratch and built up from hard work and taking a chance on an idea. But, how dare the ones who started both companies earn their fortunes off the backs of suppressed workers? Darn, it really bothers me when either one delivers to my home and the chains of oppression rattle all the way to my door. The poor delivery person is emaciated and living in poverty but the CEO is living an extravagant lifestyle. Soak the bastards now!!
Sarcasm? Yes indeed!
From “Does Success Come Mostly from Talent, Hard Work—or Luck?” Scientific American – Michael Shermer (November 1, 2017).
“The luck of being born in the first place—the ratio of how many people could have been born to those who actually were—is incalculably large, not to mention the luck of being born in a Western country with a stable political system, a sound economy and a solid infrastructure (roads and bridges) rather than, say, in a lower caste in India, or in war-torn Syria, or anarchic Somalia.
“The luck of having loving and nurturing parents who raised you in a safe neighborhood and healthy environment, provided you with a high-quality K–12 education and instilled in you the values of personal responsibility. If they were financially successful, that’s an added bonus because a key predictor of someone’s earning power is that of their parents.
“The luck of attending a college where you happened on good or inspiring professors or mentors who guided you to your calling, along with a strong peer cohort to challenge and support you, followed by finding a good-paying job or fulfilling career that matches your education, talents and interests.
“The luck of being born at a time in history when your particular aptitudes and passions fit that of the zeitgeist. Would Google’s co-founders Larry Page and Sergey Brin be among the richest and most successful people in the world had they been born in 1873 instead of 1973? Both are brilliant and hardworking, so they would probably have been successful in any century—but at the equivalent of nearly $45 billion each? It seems unlikely.
“What about intelligence and hard work? Surely they matter as much as luck. Yes, but decades of data from behavior genetics tell us that at least half of intelligence is heritable, as is having a personality high in openness to experience, conscientiousness and the need for achievement—all factors that help to shape success. The nongenetic components of aptitude, scrupulousness and ambition matter, too, of course, but most of those environmental and cultural variables were provided by others or circumstances not of your making. If you wake up in the morning full of vim and vigor, bounding out the door and into the world to take your shot, you didn’t choose to be that way. Then there is the problem of übersmart, creative, hardworking people who never prosper, so obviously there are additional factors that determine life outcomes, such as bad luck … and bad choices.”
Like Bob I’ve had more than my share of good luck in my life. I’ve also made some bad decisions. Not sure why that is such a sore spot for Libertarians to simply acknowledge luck plays a role in life. Doesn’t diminish the role of hard work.
Luck is one moment in time. Success occurs over a long period of time. Success is the result of action and response to the events that happen to occur luckily or unluckily throughout our endeavors in life.
As Nassim Taleb wrote in “Fooled by Randomness”: “Mild success can be explainable by skills and labor. Wild success is attributable to variance.”
Jeff Bezos isn’t Amazon, he didn’t earn a trillion dollars last year, it’s a publicly owned company.
Exactly. 57% % of Amazon shares are held by institutions. You know who benefits from that? People with 401K’s or state, federal, and local government pensions that invest in funds that hold AMZN. Amazon’s success trickles down to literally millions of people.
Brad is correct, inheritance income has NEVER been taxed. It’s new income and should be taxed. A sensible compromise would be something like a $1million.
Inheritance (or estate) tax brings in under 20 billion per year, and averages about a 17% rate on the estates that pay it despite the 40% nominal rate on the amount above the threshold.
The big dodge, I will repeat, is the favorably-treated unearned income and salary above the FICA cap $138K).
I would advocate phasing-out over about 5 years those tax advantages. Of course, in our politics, we seldom move deliberately, we just whipsaw whoever is affected by our changes. Phasing-in allows us to tweak, back-up, or narrow as we see unintended outcomes. That was the intent of the ACA (Obamacare) before the TEA party-fueled Republicans saw it as a vulnerability to be weaponized. Current single-payer or Medicare-for-all proponents are likely to be outmaneuvered by a sensible center that will move to phase-in single payer in a way that improves Obamacare without an unpredictable shock to the delivery system (providers mainly). A sudden single-payer replacement or jerk rightwise to a more market-controlled “premium support” or state-discretionary program would introduce turmoil into the provider network, and cost the most vulnerable access to coverage and services.
You miss my point. I did not state my opinion, which is luck AND hard work are factors, and I don’t want to try to quantify which is more important. Understanding other intelligent people’s point of view is important, and understanding why other people think the way they do is the key to changing their minds,
If you gave me a million dollars, that would be one of the luckiest days in my life! I wouldn’t feel a need to double it; my wife and I are doing quite well in our “semi” retirement, thank you. Some of our success is due to luck, some due to hard work. I don’t live in a binary, either/or world. I live in a shades of grey world.
Brad, sorry this ended up in the wrong place. It was meant to be a reply to Doug, so please delete if you’d like.
I distinctly remember just before I was born God asked me ” Which you want, looks or brains?”
I said “How about rich parents?”
He said “You’ve already got brains – you ain’t gettin’ nothing else?
What I find fascinating about this whole college admittance scandal is how absolutely unsurprising it is. Rich people are cheating to get their kids into good colleges? Duh. This really isn’t surprising. The rich and their children really do live in a different world from the rest of us. We’re rapidly becoming a plutocracy.
Yes. I bet Obama and Clinton children were admitted to their prestigious colleges solely on merit alone.
Did you see Chelsea Clinton is buying a $10 million dollar apartment in NYC? Good things come to those who work hard, right? Who’s worse – the person who starts a business empire with his father’s backing or the person who becomes famous and rich based solely on her parents’ last name? (You can include the Bush girls in that category as well).
I guess the Trump administration finally figured out that wealthy people fly in airplanes and therefore could be at risk if 737 max crashed. Took a while but just watch how this administration makes decisions that benefit the rich and the rest of us be damned.
When was the last time you actually were on a plane? Wealthy people aren’t going near a commercial airline.
If a single plane had crashed, you would be blaming Trump for that as well… or blaming private industry. What we need is a government run airline! Take over the entire industry!
So here’s a little challenge for the “soak the rich” crowd. I’ll give you a real life example and you tell me how the wealth tax would be calculated.
Jeannie Buss is an owner of the Los Angeles Lakers basketball team. That team is ESTIMATED to be worth $3.7B dollars. Remember – this is an estimate. The Buss family owns 66% of the Lakers (along with a myriad of other properties, companies, etc.).
Please tell me how you would calculate the wealth tax owed by Jeannie Buss… one of the rich people you want to soak. What is the VALUE of her ownership in the Lakers. Surely you’re not going to use an estimate from Forbes magazine to do this, right? That would end up being laughed out of court (after what would likely be years of litigation).
Elizabeth Warren’s wealth tax idea is enough reason to never vote for her.