The Left is Eating Itself Pt. II

[dualstow]

the maga hat kid has committed a face crime...

Orwell in 1984:

It was terribly dangerous to let your thoughts wander when you were in any public place or within range of a telescreen. The smallest thing could give you away. A nervous tic, an unconscious look of anxiety, a habit of muttering to yourself — anything that carried with it the suggestion of abnormality, of having something to hide. In any case, to wear an improper expression on your face (incredulity when a victory was announced, for instance) was itself a punishable offense. There was even a word for it in Newspeak: facecrime, it was called.

Haha, yes!

[jacksonM]

At this point I can only hope the left eats itself because I have a hard time imagining that this story is going to end well if it keeps playing out the way it is. I grew up in the 60's and I've personally experienced violence in the streets both here and abroad but I've never seen the temperature in politics get this high before. The difference between this time and that is that you didn't have the MSM and social media working nonstop to fan the flames.

This is why I have all those gold coins.

[Kriegsspiel]

the maga hat kid has committed a face crime...

Orwell in 1984:

It was terribly dangerous to let your thoughts wander when you were in any public place or within range of a telescreen. The smallest thing could give you away. A nervous tic, an unconscious look of anxiety, a habit of muttering to yourself — anything that carried with it the suggestion of abnormality, of having something to hide. In any case, to wear an improper expression on your face (incredulity when a victory was announced, for instance) was itself a punishable offense. There was even a word for it in Newspeak: facecrime, it was called.

I read the same thoughtcriminal.

[sophie]

Well, at long last it's happened:

Democratic presidential candidate Elizabeth Warren is proposing an annual wealth tax, attempting to combat inequality and raise trillions of dollars with a significant new levy on the very richest Americans.

Ms. Warren’s proposal would impose a 2% annual tax on household wealth above $50 million and an additional 1% tax on wealth above $1 billion.

https://www.wsj.com/articles/democrat-e ... 1548369037

Won't it be fun when the IRS auditor has to pay a house call and figure out if that painting is really an original Picasso or just a copy, and how much to value a box of Cuban cigars, an antique car, handknit sweaters, and your wine collection. As in...I don't know what Elizabeth Warren is taking but I want some. Maybe it's those CBD candies in the grocery checkout line.

[dualstow]

I remember when you posted about a wealth tax and I thought you were crazy! Now the idea is really being floated by a serious candidate! Crazy!!

So, what country will our wealthy citizens flee to?

[Kriegsspiel]

Speaking practically, what does everyone think of the probability that the 2% or 70% tax changes get put into effect, with no loopholes baked into it?

[dualstow]

Unlikely, I guess? The article mentions Obama-era proposals that didn’t make it, and these go beyond those suggestions.

But, anything can happen. And of course, those with $50 million are nothing to cry over. It would set a dangerous precedent, though, and perhaps that would be enough to get some citizens thinking about exit plans. Oof, wait, we have an exit tax.

[Kriegsspiel]

Unlikely, I guess? The article mentions Obama-era proposals that didn’t make it, and these go beyond those suggestions.

But, anything can happen. And of course, those with $50 million are nothing to cry over. It would set a dangerous precedent, though, and perhaps that would be enough to get some citizens thinking about exit plans. Oof, wait, we have an exit tax.

I was thinking more like, there are about 86,000 Americans with a net worth over 50 million. That's what the internet told me. I would be surprised if none of them were big political donors, on BOTH sides, and they're not super pumped about their taxes skyrocketing. I can't see people that rich, at that level, rolling over and taking it like a bitch.

Swamp-power, baby!

[Kriegsspiel]

Then again, to self impwnlate myself, watch this.

[dualstow]

I was thinking more like, there are about 86,000 Americans with a net worth over 50 million. That's what the internet told me. I would be surprised if none of them were big political donors, on BOTH sides, and they're not super pumped about their taxes skyrocketing. I can't see people that rich, at that level, rolling over and taking it like a bitch.

Swamp-power, baby!

Right, that’s how we got into this mess in the first place. (I’m only being half-facetious). Lawyers dominate how much control..lawyers have, and the rich control taxes.

I benefit from the fact that dividends are taxed more favorably than sweat, but I’ll be the first to say it’s messed up.

[Kriegsspiel]

Hmm, I found my way to a Fox News poll,

• 70% favored increased taxes on families earning over $10 million a year.
• 65% favored increasing them on families earning over $1 million a year.
• 44% favored increasing them on families earning over $250,000 a year.
• 39% didn't favor increasing them for anyone.
• 13% want to increase taxes for everyone.

I guess we'll see what happens. I'm planning on decreasing my news intake frequency to twice a month because it's mostly depressing.

[sophie]

Well, at long last it's happened:

Democratic presidential candidate Elizabeth Warren is proposing an annual wealth tax, attempting to combat inequality and raise trillions of dollars with a significant new levy on the very richest Americans.

Ms. Warren’s proposal would impose a 2% annual tax on household wealth above $50 million and an additional 1% tax on wealth above $1 billion.

https://www.wsj.com/articles/democrat-e ... 1548369037

Won't it be fun when the IRS auditor has to pay a house call and figure out if that painting is really an original Picasso or just a copy, and how much to value a box of Cuban cigars, an antique car, handknit sweaters, and your wine collection. As in...I don't know what Elizabeth Warren is taking but I want some. Maybe it's those CBD candies in the grocery checkout line.

Of course, they say $50M now, but how long before it's $1M? I mean, if you're an underemployed, entitled socialist it's still unfair that someone has more than they do.

Exactly. Isn't this how the AMT started? Especially since I suspect the way this would evolve is that people will quickly realize that taxing net worth annually is a practical impossibility, and they'll limit it to financial accounts. Since that would reduce the amount exposed to the tax, they'll lower the threshold. This would be easy to do at any time, plus would happen automatically over the years due to inflation.

Likely there would end up being some discussion of how much money people need for retirement. It seems kind of specious to mandate that we fund our own retirements, then institute a tax on that pot of savings. I wonder how annuities and pensions would be treated under a wealth tax law? Seems an easy way to dodge the tax if they're not included. So is physical gold held privately BTW.

[jacksonM]

Well, at long last it's happened:



https://www.wsj.com/articles/democrat-e ... 1548369037

Won't it be fun when the IRS auditor has to pay a house call and figure out if that painting is really an original Picasso or just a copy, and how much to value a box of Cuban cigars, an antique car, handknit sweaters, and your wine collection. As in...I don't know what Elizabeth Warren is taking but I want some. Maybe it's those CBD candies in the grocery checkout line.

Of course, they say $50M now, but how long before it's $1M? I mean, if you're an underemployed, entitled socialist it's still unfair that someone has more than they do.

Exactly. Isn't this how the AMT started? Especially since I suspect the way this would evolve is that people will quickly realize that taxing net worth annually is a practical impossibility, and they'll limit it to financial accounts. Since that would reduce the amount exposed to the tax, they'll lower the threshold. This would be easy to do at any time, plus would happen automatically over the years due to inflation.

Likely there would end up being some discussion of how much money people need for retirement. It seems kind of specious to mandate that we fund our own retirements, then institute a tax on that pot of savings. I wonder how annuities and pensions would be treated under a wealth tax law? Seems an easy way to dodge the tax if they're not included. So is physical gold held privately BTW.

Same thing with the taxing of SS benefits. By not indexing these things to inflation it's obviously going to effect more and more people over time and I have to believe they weren't so stupid as to not know this when the law was passed. In other words it was an intended consequence. I'll be starting both SS and taking my first RMD this year and I've figured that the RMD will be just about enough to pay the tax on the SS. So you really have to hand it to the crooks in Washington.

Is all this talk of wealth taxes and other socialist ideas what's driving up the price of gold? If so, I guess we could call it a "gold lining".

[moda0306]

Is a "wealth tax" inherently socialist?

To me, the idea of imports... or income... or "sales"... or wealth... being the "right" tax base is an interesting debate, and obviously class does become part of the calculation, but if the government is going to collect $XXX Billion on an annual basis, either way that's dollars out of SOMEONE's pockets. I don't find a tax on wealth as inherently more "socialist" than a tax on consumption sales.

And considering how heavily the FICA/Medicare taxes respectively handle our two big federal "welfarish" expenditures (and how regressive these taxes tend to be compared to the federal income tax), that leaves a TON of what's left over as military expenditures, which (IMO) are essentially a protector of foreign trade and the most direct benefit to the owners of global corporate capital. To me, the best way to pay for the military would be a wealth tax. Let's be honest... the military ain't protecting the lives and liberties of ordinary Americans. They're protecting the investment right and profits of global corporations.

And none of that is to mention that sweat income is taxes far-more oppressively than capital income. When I see my doctor acquaintances with $250k of student loan debt being taxed at ordinary tax rates plus fica/medicare vs what someone with a portfolio of dividend, business income, muni interest, cap gains, etc. would pay (being able to deduct their basis in their investments, unlike the tuition of the doctor), I see capital getting a huge pass while simultaneously receiving the lions share of the "benefit" of our massive military spending...

[dualstow]

Is a "wealth tax" inherently socialist?

It is a redistribution of wealth and is socialist by definition, yes.

I do agree with your third paragraph. As someone who gets by partially on dividends, I think it is insane that they is taxed more favorably than sweat equity. It is simply unfair, and I could never be convinced otherwise.

[moda0306]

Is a "wealth tax" inherently socialist?

It is a redistribution of wealth and is socialist by definition, yes.

I do agree with your third paragraph. As someone who gets by partially on dividends, I think it is insane that they is taxed more favorably than sweat equity. It is simply unfair, and I could never be convinced otherwise.

dualstow,

But the redistribution of wealth is happening no matter what, even in a "non" wealth tax. Every other tax is re-distributive, in that it takes dollars that would otherwise be in the hands of consumers/businesses/etc and moves them to the treasury.

I think what makes the wealth tax more "socialist" is its mild focus on egalitarianism, but once again this is only marginally more socialist than high taxes in general. True "Socialism" would purge the "ownership" rights of the upper-classes, outlaw absentee ownership, and would have workers own the means of production. If I'm someone with a net-worth of $50 Million, or even a billion, that latter version of of "socialism" is millions of times more costly than "a wealth tax" as proposed by Warren.

[dualstow]

True "Socialism" would purge the "ownership" rights of the upper-classes, outlaw absentee ownership, and would have workers own the means of production.

Yup. I guess it's all a matter of degrees.

I totally agree with pug's post.
Well, oppressive taxes on business earnings are of course "disincentivizing" -- can I just say discouraging? But, punishing a household for saving as opposed to sales tax on a yacht is especially nefarious.

And, as I wrote earlier, it's not just about those with $50MM. It sets a precedent.

[Kriegsspiel]

"According to the economists who crafted the candidate’s proposal, her plan is meant to discourage the hoarding of wealth by the über-rich."

So let's take the economists (Emmanuel Saez and Gabriel Zucman, from ***Berkeley***) at face value. In the words of Craig Fugate (as quoted in Ted Koppel's book When The Lights Go Out),

Craig Fugate explained [the tools of the government], "which are extortion and bribes. Either I give you grant dollars to get you to do something you would not otherwise do, or I tax you to change behavior for what you will not otherwise do."

What are the behaviors that taxing wealth wants to change? "Hoarding" wealth, or to phrase it in a way that doesn't sound dysfunctional: "being wealthy." The wealthy are overwhelmingly wealthy because they own businesses. Not so much in the form of stocks, but businesses they own because they built them. Or they inherited businesses from their family members who built them. So when they say that the rich are "hoarding wealth" they are really saying "they own business that they built." Discouraging the "hoarding of business equity" doesn't sound like a great thing to me. It will amount to the government taxing business owners an additional 2%.



To paraphrase Steven Pinker, we shouldn't punish people for building businesses and creating wealth. Think about it, what's the natural state of the world? Poverty is what results from entropy, not wealth. Wealth isn't inevitable, it's kinda miraculous in the big scheme of things. If you read about how pretty much anyone becomes wealthy, they're creating something out of thin air. Or rather, out of entropy.

Her plan does not preclude an increase in the capital gains tax, however, or the addition of a death tax on capital gains. It is precisely these untaxed capital gains that have driven the buildup of generational wealth concentrated in the hands of a few dynastic families. link

If you look at history, clans maintained their wealth and status by not allowing their kids to marry outside the clan, or they married strategically. Since we don't do that anymore, I don't even think dynastic wealth is possible. I think the last multi-generational dynasty was the Rothschilds, and even they were the result of a quirk of Ashkenazi Jewish marriage practices in Europe and a tight-knit family structure, which have pretty much been rendered irrelevant. The multi-generational "dynastic" families here in the US aren't even really dynasties. I may be wrong, but it looks to me like each successive generation is becoming less wealthy than the last (I'm looking at families like the Waltons/Rockefellers/Morgans), instead of becoming more wealthy through capital alone, as Piketty/Saez would predict. Somewhat speculative.

---

Anyways, I think my main anxiety about these proposals is just how radical they are. No reduction in the scope of government spending, just punishing new taxes. My opinion is that small incremental changes work better than huge ones in the long run. I don't want them to execute some radical new tax plan and have crazy bad consequences as a result. And instead of trying to find more ways to extract wealth from citizens, I think they should be cutting their spending and scope.

So there's that. Come at me bros.

[moda0306]

Moda,

It seems to me that a tax like this disincentivizes production and innovation, just like 90% marginal rates do, which is what makes it so socialist. And why should you be penalized for saving? And wasn't this money already taxed once, as it was earned ? (With the exception of capital gains, which I suppose could be taxed whether or not they are realized, but then that would disincentivize capital investment, a whole other topic)

Every tax will come with potential/likely disincentives. A consumption tax will disincentivizes discretionary consumption, which is the other side of the coin of "production" and "investment" (all things produced are consumed.
All investment produces towards the end of consumption).

So taxes on economic activity (flow) or property/wealth (stock) are going to have a potential muting effect on economic activity.

It seems to me there isn't anything more inherently confiscatory by a wealth tax than a consumption tax. And if you want to debate about incentives, then this is very different than whether it's confiscatory.

[jacksonM]

There's an ongoing debate about whether or not a wealth tax would be constitutional. So I guess we can expect the next supreme court nomination battle to be even uglier than the last one.

[moda0306]

What are the behaviors that taxing wealth wants to change? "Hoarding" wealth, or to phrase it in a way that doesn't sound dysfunctional: "being wealthy." The wealthy are overwhelmingly wealthy because they own businesses. Not so much in the form of stocks, but businesses they own because they built them. Or they inherited businesses from their family members who built them. So when they say that the rich are "hoarding wealth" they are really saying "they own business that they built." Discouraging the "hoarding of business equity" doesn't sound like a great thing to me. It will amount to the government taxing business owners an additional 2%.

But the socialists don't believe they built those business because of hard work, innovation, intelligence or any thing else but privilege. Look at Obama's infamous quote, "They didn't build that."

That had to do with a bridge that wasn't built by the business owner that uses it to engage in business. As he said, "someone else made that happen."

He was not, as conservatives parrot, say that the business owner didn't build his business.

Although I will say that a "business" is built by multiple people. Employees. Vendors. Customers. The owner. And that's just the most directly-involved.

[dualstow]

Where it's feasible, I certainly like the idea of co-ops over places like Walmart.
Communism/Socialsm- all I have to say about it is, they tried it. A little welfare and protection here and there is a good thing, and I believe in some government programs. And regulation. I'm not a libertarian or anarchist, although I find that interesting.

What country has gone full socialist and really made it work?

[moda0306]

But the socialists don't believe they built those business because of hard work, innovation, intelligence or any thing else but privilege. Look at Obama's infamous quote, "They didn't build that."

That had to do with a bridge that wasn't built by the business owner that uses it to engage in business. As he said, "someone else made that happen."

He was not, as conservatives parrot, say that the business owner didn't build his business.

Although I will say that a "business" is built by multiple people. Employees. Vendors. Customers. The owner. And that's just the most directly-involved.

Except that owner takes all the risks. Capital risks, sweat equity risks, lost revenue doing something else risks. What risk do those in favor of redistribution of income take?

They don't take all of the risks. Purchasing anything you don't need comes with the risk of going broke, which means there's risks for consumers. Pollution and other externalities push risks to the surrounding community. The municipality taxpayers (all of them, not just business owners) essentially take on the risk of infrastructure being a boondogle. Employees take plenty of risks to their bodies and finances and families by "going the extra mile" for their boss. Also there is a pretty hefty amount of "Capital Risk" required to have many jobs. A well-maintained vehicle, an education, a wardrobe are a few. They also "risk loss revenue doing something else." Also I'd say that most corporations can handle a modest downturn in demand (by laying off employees) than employees can by that same adjustment. Labor has set itself up to be very exposed to layoffs, as collective bargaining (in the US) is mostly a thing of the past.

Yes the business owner deserves some for their extra risk. But the way you're posing it is a bit at odds with reality, especially if you're talking about someone with a net worth of $50 Million or more. Or income of $10 Million. Perhaps they built something. Perhaps they inherited it. Perhaps they figured out a way of adding little value while socializing costs, and gaming and exploiting systems around them to "own" and "profit" as much as possible with as little actual skin in the game as possible.

If a business owner uses our modern trade system (and the military that protects it) to exploit global labor at the lowest cost possible and appropriating as many public resources as possible, you can bet I'll sleep ok at night if they have to pay into a wealth tax system.

[moda0306]

Where it's feasible, I certainly like the idea of co-ops over places like Walmart.
Communism/Socialsm- all I have to say about it is, they tried it. A little welfare and protection here and there is a good thing, and I believe in some government programs. And regulation. I'm not a libertarian or anarchist, although I find that interesting.

What country has gone full socialist and really made it work?

It depends how you define "full socialism?"

Democratic state social democracy? (most wouldn't call this "Full Socialism")
Anarcho-syndicalist-ish "socialism" of worker cooperatives (a la Spanish Civil War era)?
Totalitarian State Communism?

I think most "true" socialists would only refer to the second as "full socialism."

I find socialist property/contract theories to be imprecise, goofy, and rife with problems.

Problem is I find capitalist ones to be similarly flawed. Just in a different way.

I probably mostly agree with the ideas that 1) more coops would be cool, and 2) welfare-state regulated capitalism is probably the "Best of both worlds."

I'm also a real sucker for Thomas Paine's ideas around citizens dividends for "the public" who IMO effectively own the land that "owners" should pay them rent for. I also think the idea of foreigners owning vast swaths of a country's natural resources is exploitative on its face and a recipe for disaster.

[Kriegsspiel]

But the socialists don't believe they built those business because of hard work, innovation, intelligence or any thing else but privilege. Look at Obama's infamous quote, "They didn't build that."

That had to do with a bridge that wasn't built by the business owner that uses it to engage in business. As he said, "someone else made that happen."

He was not, as conservatives parrot, say that the business owner didn't build his business.

I do remember that. I knew what he meant, but he sounded like a prick, the way he said it.

Although I will say that a "business" is built by multiple people. Employees. Vendors. Customers. The owner. And that's just the most directly-involved.

The person who starts the business is the first mover. Whoever owns the business deserves the profits of the business. The customers deserve the products they pay for, the vendors deserve the cash he gives them, the employees provide their services for wages. You can say they all contribute their part to "building the business," but only one of those categories deserves the profits of it.

Of course, people can start companies owned by the employees, like the British dude who's name escapes me. If they want. Or a non-profit. It seems business history shows us what the preference is; what motivates people to do it.