dckingsfan wrote:pancakes3 wrote:i object to the rallying cry of "fixing the tax code"
The rich aren't so much abusing the tax code to get rich but rather they have so much money that the tax laws are insignificant.
There's no "fixing" the tax code that would magically result in a more egalitarian distribution of wealth. The government didn't pick winners and losers, capitalism by design allocates resources in a way where there are winners and losers by definition*. This is just what late stage capitalism looks like.
Are there opportunities for abuse within the tax system? Absolutely. However, getting rid of those abuses (sheltering money) isn't going to reverse the trend of growing wealth inequality.
Also, I agree that Warren doesn't have the answers but I question if anyone has the answers. I'm ambivalent to a wealth tax, but I think that as a nation, the U.S. needs to edge towards embracing certain socialism policies to counteract the effects of growing wealth inequality. I also caution against having too harsh a stance against Warren because she proposed a flawed policy (much like taking a harsh stance against AOC). Perfect is the enemy of good.
First - if Warren is the nominee - I will be out walking for her. And that looks like it will be the case with Biden tied up in the Ukraine and folks wondering if Bernie will even make it to the election.
Second, of course fixing the tax code would take care of much of the problem. Tax receipts would go up and our social programs would be sustainable - that should be the #1 A++ issue. If earned income was taxed the same as investment income you wouldn't see near the disparity. If you fixed the loopholes with non-profits they couldn't move their money there and still maintain control without paying taxes on that income. If you took off the cap on payroll taxes that would also insure a fair tax rate. We got in this mess in the first place because of the tax code.
Fixing the tax code and getting tax receipts back to where they belong reduces (after transfers) income disparities.
When you talk about reducing wealth inequality then you have to force people to save money and invest in real estate, etc. But none of the proposals are advocating that. They are advocating funding of new programs not using the receipts of the new taxes to reduce wealth disparity directly. Another way to say it... 0/1,000,000,000 is still 0 or 1,000,000,000/0 is still infinity regardless of the number.
And define socialist policy. We are a democracy (political system) with social programs funded by capitalism. The only thing out of whack here is that congress bailed a long-time ago on their duties to manage receipts, outlays and continual streamlining and optimization of our social programs.
But maybe that is the key. Warren has been in the senate long enough to know that change isn't coming quickly. So she is proposing a quick fix vs. doing it the right way.
My 1/2 cent
1) I agree with all your suggestions 100%. This is low hanging fruit.
2) Furthermore, we got in this mess because of a decades long stealth campaign to cut taxes to the rich, and raise taxes on everyone else, starting with Reagan. With the GOP tax giveaway last year the ultra wealthy are paying LOWER taxes than everyone else. So the problem we are in now is a direct effect of really, really evil tax code shenanigans by the GOP. It is a tax code issue that will be solved by fixing the tax code to force the uber wealthy to pay more, not because it's fair but because every billionaire is a democracy-destroying policy failure. If we can manage to hold the tax code stable over the next few decades, yes, the problem will eventually be fixed.
So. Yes, we could fix our worst-in-the-developed-world wealth disparity tomorrow with a one-time 75% wealth tax, but the tax code would still need to be changed or we'll just end up back where we started 20 years from now.
As far as building the wealth of poor people, we need to think about why we have an increasing number of people in the informal economy. I have a guy who comes and mows my lawn in Anacostia, insists on me paying in cash because he doesn't have a bank account. The second time he did it the guy next door mugged him and took the cash. Guy drives around a little mini-motorcycle, got in an accident, broke his leg and has no insurance, has spent the last six weeks paying another guy to mow the lawn for him. Why doesn't he make a little landscaping business, formalize the business, get a bank account so I can pay with checks or credit cards, so his cash doesn't get stolen? Hire his guys formally and pay social security? Because it's fricking complicated and expensive.
Interestingly, he has a cash app now that charges $3 PER TRANSACTION. That's how much he's willing to pay to avoid having a bank account. I don't think he's selling drugs (he's got a girl he knocked up who won't let him see the kid unless he flies straight, which is why he's doing landscaping), I just think he doesn't want to be that visible, for some reason.
