ChatGPT thinks Genuine Realist is correct…

[Mick]

…sort of. The writer of this article used ChatGPT to determine the outcome if billionaires were taxed like middle-class people. Example used was 25 richest billionaires saw their wealth grow by $401 billion from 2014 to 2018. Because capital gains aren’t taxed until they are realized, and billionaires borrow against those gains until they die, they only paid about $13.6 billion in tax, a 3.4% rate. If they paid 20%, it would have been $80 billion.

The country could do a lot with $80 billion.

Middle class people can’t defer taxes because we tax work rather than wealth (except for property taxes).

Sounds like a recommendation for a wealth tax.

If Billionaires Paid Middle-Class Taxes | GOBankingRates

 

[Legend]

I’m all for treatment of borrowing against asset appreciation as income and taxing it.  It’s one of the more egregious gaps in the U.S. taxation scheme.

And, as is always the case when talking about Billionaires, the juice isn’t really worth the squeeze.  $80 billion is a drop in the bucket.   We have a spending problem, not a revenue problem.

I’m also a fan of crediting some proportion of tax base back to billionaire founders and growers.  So if Bezos founds a company that employs hundreds of thousands of people and still holds those shares, IMHO he should get partial credit for the income, SS, and Medicare tax base from those jobs.   I’d count that only for founders or people who bought very small companies and grew them.

By that measure, the Walton heirs don’t get credit, but Bezos probably gets a tax refund!

We should tax things we don’t really want more of.  If we don’t want more billionaire founders, then by all means, tax them.  I think GR and I would be on the same page to say we shouldn’t want a bunch of idle billionaire heirs and heiresses.  Founders?  We want them. Lots of them.

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Sic transit gloria mundi (so shut up and get back to work)

[Mick]

Great post. Couple of reactions:

1. At some point, the government will take the Willie Sutton approach to tax,; e.g., wealth is where the money is. Someone like AOC, Bernie, Zohran is going to get elected to a position of power.
2. The system is working pretty well. Total value of all American assets (corp/ personal/government) is over $200 trillion. Total liabilities, including unfunded obligations (not social security) is estimated at $93.8 trillion.
3. We do have a spending problem, to the point that it encourages support of nonproductive members of society. 200 years ago, those people were incapable and ceased to exist. Today, those people migrate to wherever they will be best treated; ergo, 1/3rd of the nation’s homeless live in California, the best economy in the USA by far, and would be fourth best in the world if it were its own country.

[Author]

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