Bernie Sanders calls for income over $1B to be taxed at 100%
fortune.comOr maybe the government could take a serious look at how insane their spending is and do something about it. And Bernie is an idiot who thinks more money in government hands will solve problems. Social security and medicare are in trouble. Billions of COVID money went unaccounted for. The Department of Defense routinely loses track of billions in spending and the State Department is a hot mess of spending without accountability.
Wouldn’t that incentivize more intricate methods for large corporations to pay larger income? I understand what he’s going for, but I personally think that such a tax law might cause unintended consequences and perverse incentives
And our current tax laws don't?
So the incumbent "nobility" dont have to fear challenges to the status quo from the business arena. Circle back a minute fraction of such taxes to the common folks to keep consensus
You have to start somewhere. Zeitgeist will change as the electorate turns over. 1.8M US voters 55+ die every year, 4M voters turn 18. Who has been more lucky financially? Rhetorical question of course.
This is less politics and more first principles really. If we can arrive at the thesis that super wealthy people are more lucky than skilled [1] [2] [3] [4], we should build systems around the idea that there should be limits around the shared delusion of what wealth is. This is a bit like copyright, where the incentives were well intentioned, but the system and outcome has come off the rails.
Failing that, a central bank can inflate away wealth, depending on the desired outcome, circumstances, etc. Wealthy equality printer go brrrr.
[1] https://www.theguardian.com/business/2024/apr/03/all-billion...
[2] https://www.theguardian.com/books/article/2024/may/04/scott-...
[3] https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/20...
[4] https://blogs.scientificamerican.com/beautiful-minds/the-rol...
https://www.stlouisfed.org/institute-for-economic-equity/the... (obligatory St Louis Fed Wealth Inequality citation)
I don’t see how that’s practical when places like Monaco exist and are happy to welcome people who really don’t like paying taxes. It would have to be a worldwide effort.
US taxpayers must pay tax on global income. If we want to explore a wealth tax, securities ownership and transactions take place within the US jurisdiction. Your brokerage or the clearinghouse can send another form to the IRS for public equity, Carta or whomever manages the cap table can do so for private equity.
Unless you're only going to hold investment assets in Monaco while trying to relinquish US citizenship and not pay an exit tax? I suppose if you pull up stakes, don't pay US income tax, and don't step foot financially in the jurisdiction, you might be able to avoid this depending on your window of time between that decision and death.
Why relinquish citizenship, instead of e.g., keeping the assets in a holding company somewhere?
Because that holding company could still be found and taxed?
What do you mean: Taxing unrealized profits (assets that could be sold at a profit, but haven't been sold)? Or taxing foreign entities without a tax treaty?
This is why trust funds exist.
Again, it’s just a construct in a system. The rules can be changed at by time, and a piece of paper isn’t going to matter to a nation state political system.
I have a trust (several, actually), and I still know better that it is permitted to exist in its current incarnation, not a perpetual, immutable right or iron clad guarantee.
Yes, sure - but Monaco, Luxembourg, Switzerland, Liechtenstein etc is definitely not going to adopt the rules just because US did.
They will do the exact opposite - triple down, take this new enormous opportunity and develop hundreds of new ways to offer US people safe haven for their assets. Thousands upon thousands of new startup consultancies charging just few % fees will be founded and every wealthy person in the US will have to turn off their phones and stop checking the inbox because of all that cold calling and emailing these people will do.
Switzerland conceded to US FATCA reporting. Whomever has the most force wins. I don’t blame you if you’re wealthy and you take a calculated risk strategy (can’t take the monkey brain out of the human), just don’t cry when you fail at evasion.
Major corporations can’t withstand minor ransomware operators. What makes you think these jurisdictions can withstand superpower nation state efforts?
TLDR good luck, have fun.
Reporting is nice but doesn't change anything about the problem. OK so the US knows you are a beneficiary of a trust fund in Switzerland - what can they do about it? It's not you, so they can't tax the wealth. They can tax the income you get from that, but that means the wealth tax mission has failed.
You just want to argue, so I’m going to pass. I’m not here to change your mind, it doesn’t matter if I do unless you’re a legislator or decision maker in government.
No, I don't want to argue, I would like to understand how can anyone think this kind of idea can be implemented in the real world. I just don't see a way.
BTW I was never talking about evasion. No need for that. The wealthy people in government/legislature will never make it bulletproof, there's always a legal way - you might not get to keep 100% but you certainly won't pay 90-100%.
I don't even think it can be made bulletproof - does this mean corporations and funds are limited to 1B in size? What if it's a partnership without exact equity stakes? What if there are multiple people? What if some of them die, and later some are born? What if I get a non-equity obligation from a bank - "transfer all your wealth to us and we will pay out whatever you need up to X/year"?
And now, after you have done this and there are no more superwealthy and no more big corporations and funds, the 10th richest Chinese billionaire comes and buys everything all around the US - job well done? Or does this mean total economic isolation too?
> I don’t see how that’s practical
It's not and its probably not intended to be; its staking an extreme position to spur and frame discussion.
Im expecting someone here will argue that would remove the incentive to work hard.
Someone else in the thread suggested that it was just a start. So the question you're looking for is: "Will that be extended to cover me?" What kinds of people would start asking themselves that question?
Let's also introduce taxation of unrealized capital gains of >$1M to 90% and 100% for gains of >$1B for everyone, which we will start with Bernie with the former. /s