How often have tax cuts for the rich trickled down? Never.

[Tsing Tao]

The danger and intellectual laziness with the OP's premise is lumping everyone in with "billionaires".

The vast majority of employers in the United States are small businesses with an LLC structure. That type of business owner will typically have the majority of his or her net wealth tied up in that business. And growing that business is their primary concern. For an LLC owner, you report all profits and losses on Schedule C of your 1040 return. For these small business owners, tax cuts can typically mean they can invest more into their businesses.

Tax the Rich is just a phrase the self-woke apply without understanding any of the mechanics.

It gets them votes, though - for the sheer simplicity that the general public is a few sandwiches short of a picnic.

 

[themickey]

The danger and intellectual laziness with the OP's premise is lumping everyone in with "billionaires".

The vast majority of employers in the United States are small businesses with an LLC structure. That type of business owner will typically have the majority of his or her net wealth tied up in that business. And growing that business is their primary concern. For an LLC owner, you report all profits and losses on Schedule C of your 1040 return. For these small business owners, tax cuts can typically mean they can invest more into their businesses.

I think the article was directed more to the top end (those uber large corporations) rather than 'the vast majority of employers in the United States'.

This looks like the tax system of a plutocracy,” they wrote.
Thanks to years of tax cuts for the rich, the 400 richest Americans now pay a lower tax rate than the bottom 50%.
.....that cutting taxes for the rich not only increases economic inequality, but delivers ever more political power into the hands of the affluent while increasing their incentive to lobbyfor even more tax breaks. (Tax cuts enable them to keep more of their income gains.)

 

[bone]

I think the article was directed more to the top end (those uber large corporations) rather than 'the vast majority of employers in the United States'.

It's a naive article and an insane idea with disastrous ramifications. A 1% wealth tax on the top 1% is going to cost jobs and I'll tell you why. It doesn't differentiate between pure liquid cash wealth and assets invested in job creation and job maintenance.

A restaurateur with three restaurants in, let's say, NYC is going to have a business valuation, of, let's say conservatively - $45M. That will place him in the top 1%. Most of his "wealth" is tied up in his three restaurants - building, equipment, etc.. Even if he leases the building and each one of his restaurants has gross revenues of $3M - each individual restaurant is going to be valued as a multiplier; lets say 5.

So each year, this guy is going to have to come up with $450,000 on top of everything else in order to pay this "wealth tax". Where's he going to get that? Remember that gross revenues are before expenses. All of his money is tied up in his restaurants. Even if he pays himself a salary of $900,000 per year - he's going to have to either take a 50% pay cut or he's going to have to fire staff or sell a restaurant.

What about a successful independent automotive garage owner? He's got $7M tied up in real estate, tools, equipment, and lifts. His equipment costs are huge. Let's say that he wants to expand and add another garage location. His accountant tells him no way. His garage is valued at 5 times annual revenue, and if he adds another garage he'll have to pay $500,000 each year as a wealth tax. And he might only pay himself $250,000 per year at present because his materials costs are so high.

 

[themickey]

It's a naive article and an insane idea with disastrous ramifications. A 1% wealth tax on the top 1% is going to cost jobs and I'll tell you why. It doesn't differentiate between pure liquid cash wealth and assets invested in job creation and job maintenance.

A restaurateur with three restaurants in, let's say, NYC is going to have a business valuation, of, let's say conservatively - $45M. That will place him in the top 1%. Most of his "wealth" is tied up in his three restaurants - building, equipment, etc.. Even if he leases the building and each one of his restaurants has gross revenues of $3M - each individual restaurant is going to be valued as a multiplier; lets say 5.

So each year, this guy is going to have to come up with $450,000 on top of everything else in order to pay this "wealth tax". Where's he going to get that? Remember that gross revenues are before expenses. All of his money is tied up in his restaurants. Even if he pays himself a salary of $900,000 per year - he's going to have to either take a 50% pay cut or he's going to have to fire staff or sell a restaurant.

What about a successful independent automotive garage owner? He's got $7M tied up in real estate, tools, equipment, and lifts. His equipment costs are huge. Let's say that he wants to expand and add another garage location. His accountant tells him no way. His garage is valued at 5 times annual revenue, and if he adds another garage he'll have to pay $500,000 each year as a wealth tax. And he might only pay himself $250,000 per year at present because his materials costs are so high.

Ya mate, you keep reflecting back to middle income workers.
It was not about them.

$45M. That will place him in the top 1%.

Is not the top 1%
Market cap of Microsoft is $1,840,000,000,000 and you mention $45,000,000
LOL

 

[bone]

The two leading proponents of the wealth tax in the United States are calling for 2% annual at $50M individuals and 1% for $30M married or 1% on $16M single filing.

This "wealth tax" proposed by Senators Sanders and Warren is on individuals and households and it's based on gross asset valuation.

It is a regressive tax and it is a cumulative tax. In other words, you are paying each and every year above and beyond normal income tax, capital gains, and estate tax rates.

https://taxfoundation.org/wealth-tax/

Ya mate, you keep reflecting back to middle income workers.
It was not about them.
Is not the top 1%
Market cap of Microsoft is $1,840,000,000,000 and you mention $45,000,000
LOL

 

[themickey]

The two leading proponents of the wealth tax in the United States are calling for 2% annual at $50M individuals and 1% for $30M married or 1% on $16M single filing.

This "wealth tax" proposed by Senators Sanders and Warren is on individuals and households and it's based on gross asset valuation.

It is a regressive tax and it is a cumulative tax. In other words, you are paying each and every year above and beyond normal income tax, capital gains, and estate tax rates.

https://taxfoundation.org/wealth-tax/

Maybe we are going off in a tangent......

U.S. billionaires have grown their collective wealth by $1 trillion since mid-March.....

....is how the article began

 

[bone]

The article you quote is quite misleading by design. The link I provided above gives Senator Warren's entire wealth tax plan that she touted during her Presidential campaign - and it's for more than billionaires.

Maybe we are going off in a tangent......

....is how the article began

 

[themickey]

The gist of it I thought was dispelling the myth; 'less taxation for the rich increased employment and led directly to the trickle down effect which helped the battlers.'

 

[KINGOFSHORTS]

It trickled down to Asia as they moved factories overseas. The irony of all things is if they kept taxes to the 1950s-60s levels and not open the Clinton options loophole they would have no incentive to close factories and move them to Asia because it would not have made a difference to them.

The biggest irony of all was all these tax cuts,Options loopholes, etc.. gave CEOs etc.. big incentives to close factories, lay off white collar folks for H1B visa or overseas employees.

 

[ironchef]

U.S. billionaires have grown their collective wealth by $1 trillion since mid-March. That's more than it would cost to send a $3,000 stimulus check to every person in America.

Could it be just an illusion?

Last I checked, Bezos still lived in the same house, owned the same number of AMZN shares, driven in the same car and flew on the same GulfStream.

OK AMZN stock price had double during the period but had the AMZN real worth doubled as measured by the goods it produced/sold?

In looking at wealth and wealth equality, I like to look at both relative and absolute: In relative term, are the wealth inequality more now than back in colonial time, are the poor better off than in colonial time in the US. I think the answers to the first is no and the second is yes.