The billionaire tax would be just a way of removing that excess liquidity from the economy, they would get it back, because they are always benefiting from government, such as when the Fed injects liquidity in the stock market, that rejection in collaborating with the government is just a demonstration of pure greed.
Office Hours : This is an Open-Chat Session isn't it? If yes, is there a Link to get to it. Nobody will like what I have to say, but they NEVER HAVE - Anyone Open to Change? Authentic and "Truly Real' comments from a Societal-Ignored-Rejected Outcast?
It is very disappointing to learn of what kind of taker he is. Our government has handed him way to much freebies, plus providing education to his employees and all the logistics he needs to keep his business going. It is sad that he can't see all the things he takes, uses, and needs from tax payers in order to keep his wealth growing
To tax this level of income and wealth it takes keen expertise, in the realm of the OMB, or the CBO...
The "rich" have QE, low rates, and capital injections from the Fed, many safety nets, by the same token the rest ought to have also their safety nets, a job guarantee, a minimum guaranteed income, a social security fund, anything to prevent the boom and bust poverty.
If there is a monetary constraint of any king, and there is the possibility of resorting to taxation why not!?... Is fair that the "rich" participate in the wealth creation with taxes, why not!?... where is the taboo!?
There is a misconception of taxes, and a misperception.
Taxes mimic the discount rate, the discount rate marks the domicile, the tax rate gages the economy, the social function of taxation comes later, much later, these days we are smarter. That the social function of taxation is perverted, that is another story, and people do not really know how to tax.
How do we measure income and wealth, establish a criteria then, by sector, by size, by market risk, by whoever we have for the rest.
That would drive the market predatory, we are fine with regulation/deregulation, we do not need another Pandora box only for the sake of fiscal return.
This might be a political compromise for personal taxation that could work (seems unlikely, given the influence the target audience has on legislators), but a fairer strategy would be to include this consideration with a sliding scale income tax structure that comes all the way down the income ladder.
Mr. Reich, I believe that our Country is on the path to destruction. No more democracy and definitely no fair share of taxes being enforced. It’s a damn shame that people keep falling for the LIES OF THE SUPER RICH, THE LIES OF THE REPUBLICAN PARTY, and THE LIES FROM PEOPLE LIKE DONALD TRUMP WHO MAKES A LIVING COMPLETELY LYING HIS ASS OFF! I hate how they use social media and other outlets to help chip away at our democracy. People like you Mr. Reich have been sounding the alarm, but not enough people take it seriously. The rich have been able to do whatever the hell they want (EVEN GET AWAY WITH BREAKING THE LAW), while hard working Americans have to scrimp and scrape FOR EVERYTHING to make ends meet. All the serious problems we have here SHOULD NOT EXIST! But they do, because of the bull crap the wealthiest people get away with. Many of our government officials are wealthy too. Many of them are simply out of touch with how working Americans have to live.
Every president in my lifetime has failed in my eyes because of this issue we talk about right now (fair taxes). Either they did something but it didn’t make a difference, or they talked about doing something but it doesn’t get through, or they simply made the problems worse by not keeping things fair for all. Everything just needs to be revamped! Perhaps we could stop putting wealthy people in charge of our country! This is our Country too. How about we try an average American in this position, someone who knows how it feels to live paycheck to paycheck. Someone who knows how it feels to struggle with HEALTHCARE.
Average Americans are fed up with these kinds of struggles because we are told our government officials are trying to help it become more affordable. Some people have been helped, but I know many that are still struggling even with the help. Other countries found a way to make these things AFFORDABLE for all. While we have Harvard, Yale and other scholars running our country, some don’t care to help people in need, and the ones that do, have to deal with the people around them playing games! We have hit a WHOLE NEW LOW OF THIS GAME! Every individual out here giving FALSE INFORMATION ABOUT A VACCINE THAT CAN BENEFIT MOST AMERICANS, knows exactly what they are doing! They’ve taken misinformation and spread it as loud and far as they can. Our country is being attacked on all sides and even within….and the few billionaires are racing each other to go to space…….I AM JUST BEYOND FED UP WITH ALL OF THIS. We are living in the age of “ANYTHING GOES”. The wealthy finally paying their fair share of taxes, I seriously doubt that this change happens.
I Know 1st hand your frustration; we have alleged health insurance, yet we can
NOT afford to stay healthy due to the ripoff concept of 'co-pays, co insurances, deductibles, so we ignore our health; just doing self-triage; Healthcare is oxymoron
Most Critical Points:
1st the actual ‘Premiums’ for the Privilege of having the illusion of Health coverage; I call Premiums the extortion payments; and 2nd 'co-pays, co insurances, and deductibles are the Ransom payments.
My wife and I have an employer based ‘health’ insurance, yet can NOT Afford to keep ourselves healthy, truly healthy.
The Super-Rich don't give a damn for folks living paycheck to paycheck; they either don't want to know, or just laugh;
"Justice is two words for the rich: "Just Us". Is that original with you? It would make a great slogan on a sign for the "Occupy Wall Street Movement" and the "99% Movement"! Thanks for calling our attention to it!
Joe Manchin's argument is poor because the billionaire class creates jobs, but it is the people working there in those jobs that create the wealth, not the billionaire class per se.
If all paid their "fair share", in the end they would also benefit.
The wealth tax will have unintended consequences. Bad ones. Take Elon Musk, for example. He owns more than 200 million shares of Tesla (counting options). But he cannot spend those shares at Walmart. They are only paper wealth, not real wealth. He must sell them for cash. If he were to sell even a tiny fraction of his holdings, the share price would plummet. He cannot pay the tax without selling shares, or course: a lot of them.
If unrealized gains are taxed just like realized gains, there is no obstacle to selling. What Musk would do is sell shares and drive the share price down enough that his remaining holdings put him below the wealth tax threshold. Then he would only pay capital gains tax on the shares he sold, rather than on all of his shares.
Mere passage of such a tax would thus have immediate impact, devastating the share price of every company that has a large block of shares owned by a billionaire.
If that were true - and I'm not denying that it is - doesn't that imply that those shares are greatly overvalued? Isn't it a threat to our economic system, if the market cannot make a needed correction to prices because of the immense wealth of a few billionaires? Doesn't your argument, as you have presented it, actually argue in favor of the wealth tax?
No, Geordie, it does not. My point is that Elon Musk's fabulous wealth is not something that he can actually spend. If he were to try, it would mostly vanish. It is paper wealth, not real wealth.
I strongly believe that wealth over a certain point is morally wrong. So, apparently, do a lot of billionaires. Did Makenzie Scott (nee Bezos) not donate $2.6 Billion to charity already this year?
Maybe I'm missing something - why not sell enough shares to pay the wealth tax bill? If the shares are not overvalued the price shouldn't drop. If the price does drop, then won't the market eventually reach an equilibrium where the shares are not so concentrated in a few hands, and where the share price more accurately represents the true value of the company?
Share price of a stock does not represent true value. Instead it is the expected future value. Tesla (with 1 billion shares outstanding, 20% of them owned by Musk) is not worth a trillion dollars today. Forward looking Wall St expects it to be worth that much someday.
Like any commodity (eg, such as apples) when a large supply comes on the market (eg, in the autumn) the price drops. This can happen when many people each sell a few shares of stock or when one sells a lot of shares. The Efficient Market Theory holds that buyers and sellers will act to settle on the true value of a stock. Many people have made fortunes disproving that.
The only right way to get tax revenue from the wealthy is by removing loopholes in the estate tax, which brought in only $20 billion last year. These loopholes typically involve the use of trusts. If you think it is unfair for one person to earn a quarter trillion dollars, as Musk has so far, is it not even more unfair for one person to simply inherit that much?
Hi Shawn, I'm all for the estate tax, but I don't see why that should preclude a direct wealth tax, and I still disagree with you that the estate tax is "the only right way" to tax the wealthy. If many people own the shares - if they are not so concentrated - then I think it's unlikely that everybody would start selling their shares unless the shares were overvalued. But if instead the ownership of shares is extremely concentrated, and if one person can sell a huge number of shares - for example to pay a wealth tax - then, if I understood what you were saying, the price could drop even if the shares were not overvalued. But I would argue that's fine: that means the share ownership is much too concentrated to accurately and robustly price the shares, and a wealth tax is required to solve this problem by distributing these shares to more people. I'm no economist that's for sure, but that's my understanding.
The problems with a wealth tax, Geordie, are these: It would be unconstitutional because it's impossible to apportion it equally among the states by population. (A1 S8 C1) Alabama, for example, has zero billionaires, as do several other states. This is why the federal government no longer taxes land, only transactions and, of course, income, which is specifically exempted from apportionment by Article 16 that created it.
Also, the distinction between wealth and income is sometimes blurry. Lots of billionaires owe little or no income tax because they have no earned wages. Wealth only turns into taxable income when exchanged. Certain companies (eg, Warren Buffet’s Berkshire Hathaway) do not pay dividends and instead plow earnings back into their business. If no transfer of wealth—such as a dividend—ever happens, there is no shareholder income to tax.
Also, "wealth" is difficult to measure. Current plans would tax only the kinds that are easy to measure (eg, capital gains), and the wealthy would then switch to other kinds, such as closely held companies, fine art, large tracts of land perhaps overseas, derivatives, gold bullion, maybe even crypto-currency.
Taxing estates is so much easier. Plus, we do it now, although with many loopholes. Fix the estate tax and the IRS will get 40% of every billionaire's wealth, once each generation, until it gets all that wealth.
This is not the only area where Washington tries to layer brand new law atop old law that merely needs to be fixed. Immigration comes to mind.
As Finley Peter Dunne had Mr. Dooley say in 1902: "The job of a newspaper is to comfort the afflicted and afflict the comfortable" I think Robert's Newsletter is doing a pretty good job!
(Pancha Chandra): Robert Reich, you have an ethical pen that should shame the political, rich hypocrites of this world! These billionaires could use some of their wealth to make the world a better place. Yet, they pretend & look the other way! Name them & shame them to do better!
Inventions should be thought of as science experiments and continue to be improved upon and not bought and owned by investors. I believe that that type of ownership stifles innovation.
The billionaire tax would be just a way of removing that excess liquidity from the economy, they would get it back, because they are always benefiting from government, such as when the Fed injects liquidity in the stock market, that rejection in collaborating with the government is just a demonstration of pure greed.
Office Hours : This is an Open-Chat Session isn't it? If yes, is there a Link to get to it. Nobody will like what I have to say, but they NEVER HAVE - Anyone Open to Change? Authentic and "Truly Real' comments from a Societal-Ignored-Rejected Outcast?
It is very disappointing to learn of what kind of taker he is. Our government has handed him way to much freebies, plus providing education to his employees and all the logistics he needs to keep his business going. It is sad that he can't see all the things he takes, uses, and needs from tax payers in order to keep his wealth growing
Tax 'Em High
To tax this level of income and wealth it takes keen expertise, in the realm of the OMB, or the CBO...
The "rich" have QE, low rates, and capital injections from the Fed, many safety nets, by the same token the rest ought to have also their safety nets, a job guarantee, a minimum guaranteed income, a social security fund, anything to prevent the boom and bust poverty.
If there is a monetary constraint of any king, and there is the possibility of resorting to taxation why not!?... Is fair that the "rich" participate in the wealth creation with taxes, why not!?... where is the taboo!?
There is a misconception of taxes, and a misperception.
Taxes mimic the discount rate, the discount rate marks the domicile, the tax rate gages the economy, the social function of taxation comes later, much later, these days we are smarter. That the social function of taxation is perverted, that is another story, and people do not really know how to tax.
How do we measure income and wealth, establish a criteria then, by sector, by size, by market risk, by whoever we have for the rest.
There are low-hanging fruit solutions--fair and equitable; however, special interests and lobbyists evidently control the solutions: https://defazio.house.gov/media-center/press-releases/defazio-introduces-financial-transaction-tax-act-to-rein-in-wall-street
Makes Perfect Sense, and Well worth a try
That would drive the market predatory, we are fine with regulation/deregulation, we do not need another Pandora box only for the sake of fiscal return.
This might be a political compromise for personal taxation that could work (seems unlikely, given the influence the target audience has on legislators), but a fairer strategy would be to include this consideration with a sliding scale income tax structure that comes all the way down the income ladder.
Shell corps gotta go. Too much money leaving the states...
Pandora pandora.....publish more more more
We need to return to the 1950s and 60s tax codes
Mr. Reich, I believe that our Country is on the path to destruction. No more democracy and definitely no fair share of taxes being enforced. It’s a damn shame that people keep falling for the LIES OF THE SUPER RICH, THE LIES OF THE REPUBLICAN PARTY, and THE LIES FROM PEOPLE LIKE DONALD TRUMP WHO MAKES A LIVING COMPLETELY LYING HIS ASS OFF! I hate how they use social media and other outlets to help chip away at our democracy. People like you Mr. Reich have been sounding the alarm, but not enough people take it seriously. The rich have been able to do whatever the hell they want (EVEN GET AWAY WITH BREAKING THE LAW), while hard working Americans have to scrimp and scrape FOR EVERYTHING to make ends meet. All the serious problems we have here SHOULD NOT EXIST! But they do, because of the bull crap the wealthiest people get away with. Many of our government officials are wealthy too. Many of them are simply out of touch with how working Americans have to live.
Every president in my lifetime has failed in my eyes because of this issue we talk about right now (fair taxes). Either they did something but it didn’t make a difference, or they talked about doing something but it doesn’t get through, or they simply made the problems worse by not keeping things fair for all. Everything just needs to be revamped! Perhaps we could stop putting wealthy people in charge of our country! This is our Country too. How about we try an average American in this position, someone who knows how it feels to live paycheck to paycheck. Someone who knows how it feels to struggle with HEALTHCARE.
Average Americans are fed up with these kinds of struggles because we are told our government officials are trying to help it become more affordable. Some people have been helped, but I know many that are still struggling even with the help. Other countries found a way to make these things AFFORDABLE for all. While we have Harvard, Yale and other scholars running our country, some don’t care to help people in need, and the ones that do, have to deal with the people around them playing games! We have hit a WHOLE NEW LOW OF THIS GAME! Every individual out here giving FALSE INFORMATION ABOUT A VACCINE THAT CAN BENEFIT MOST AMERICANS, knows exactly what they are doing! They’ve taken misinformation and spread it as loud and far as they can. Our country is being attacked on all sides and even within….and the few billionaires are racing each other to go to space…….I AM JUST BEYOND FED UP WITH ALL OF THIS. We are living in the age of “ANYTHING GOES”. The wealthy finally paying their fair share of taxes, I seriously doubt that this change happens.
I Know 1st hand your frustration; we have alleged health insurance, yet we can
NOT afford to stay healthy due to the ripoff concept of 'co-pays, co insurances, deductibles, so we ignore our health; just doing self-triage; Healthcare is oxymoron
Most Critical Points:
1st the actual ‘Premiums’ for the Privilege of having the illusion of Health coverage; I call Premiums the extortion payments; and 2nd 'co-pays, co insurances, and deductibles are the Ransom payments.
My wife and I have an employer based ‘health’ insurance, yet can NOT Afford to keep ourselves healthy, truly healthy.
The Super-Rich don't give a damn for folks living paycheck to paycheck; they either don't want to know, or just laugh;
For them, justice is Two words= 'just us';
"Justice is two words for the rich: "Just Us". Is that original with you? It would make a great slogan on a sign for the "Occupy Wall Street Movement" and the "99% Movement"! Thanks for calling our attention to it!
Joe Manchin's argument is poor because the billionaire class creates jobs, but it is the people working there in those jobs that create the wealth, not the billionaire class per se.
If all paid their "fair share", in the end they would also benefit.
https://www.nytimes.com/2021/10/27/us/politics/manchin-billionaires-tax.html
The wealth tax will have unintended consequences. Bad ones. Take Elon Musk, for example. He owns more than 200 million shares of Tesla (counting options). But he cannot spend those shares at Walmart. They are only paper wealth, not real wealth. He must sell them for cash. If he were to sell even a tiny fraction of his holdings, the share price would plummet. He cannot pay the tax without selling shares, or course: a lot of them.
If unrealized gains are taxed just like realized gains, there is no obstacle to selling. What Musk would do is sell shares and drive the share price down enough that his remaining holdings put him below the wealth tax threshold. Then he would only pay capital gains tax on the shares he sold, rather than on all of his shares.
Mere passage of such a tax would thus have immediate impact, devastating the share price of every company that has a large block of shares owned by a billionaire.
Which shows that capitalism to work properly needs regulation!
If that were true - and I'm not denying that it is - doesn't that imply that those shares are greatly overvalued? Isn't it a threat to our economic system, if the market cannot make a needed correction to prices because of the immense wealth of a few billionaires? Doesn't your argument, as you have presented it, actually argue in favor of the wealth tax?
No, Geordie, it does not. My point is that Elon Musk's fabulous wealth is not something that he can actually spend. If he were to try, it would mostly vanish. It is paper wealth, not real wealth.
I strongly believe that wealth over a certain point is morally wrong. So, apparently, do a lot of billionaires. Did Makenzie Scott (nee Bezos) not donate $2.6 Billion to charity already this year?
Maybe I'm missing something - why not sell enough shares to pay the wealth tax bill? If the shares are not overvalued the price shouldn't drop. If the price does drop, then won't the market eventually reach an equilibrium where the shares are not so concentrated in a few hands, and where the share price more accurately represents the true value of the company?
Share price of a stock does not represent true value. Instead it is the expected future value. Tesla (with 1 billion shares outstanding, 20% of them owned by Musk) is not worth a trillion dollars today. Forward looking Wall St expects it to be worth that much someday.
Like any commodity (eg, such as apples) when a large supply comes on the market (eg, in the autumn) the price drops. This can happen when many people each sell a few shares of stock or when one sells a lot of shares. The Efficient Market Theory holds that buyers and sellers will act to settle on the true value of a stock. Many people have made fortunes disproving that.
The only right way to get tax revenue from the wealthy is by removing loopholes in the estate tax, which brought in only $20 billion last year. These loopholes typically involve the use of trusts. If you think it is unfair for one person to earn a quarter trillion dollars, as Musk has so far, is it not even more unfair for one person to simply inherit that much?
Hi Shawn, I'm all for the estate tax, but I don't see why that should preclude a direct wealth tax, and I still disagree with you that the estate tax is "the only right way" to tax the wealthy. If many people own the shares - if they are not so concentrated - then I think it's unlikely that everybody would start selling their shares unless the shares were overvalued. But if instead the ownership of shares is extremely concentrated, and if one person can sell a huge number of shares - for example to pay a wealth tax - then, if I understood what you were saying, the price could drop even if the shares were not overvalued. But I would argue that's fine: that means the share ownership is much too concentrated to accurately and robustly price the shares, and a wealth tax is required to solve this problem by distributing these shares to more people. I'm no economist that's for sure, but that's my understanding.
The problems with a wealth tax, Geordie, are these: It would be unconstitutional because it's impossible to apportion it equally among the states by population. (A1 S8 C1) Alabama, for example, has zero billionaires, as do several other states. This is why the federal government no longer taxes land, only transactions and, of course, income, which is specifically exempted from apportionment by Article 16 that created it.
Also, the distinction between wealth and income is sometimes blurry. Lots of billionaires owe little or no income tax because they have no earned wages. Wealth only turns into taxable income when exchanged. Certain companies (eg, Warren Buffet’s Berkshire Hathaway) do not pay dividends and instead plow earnings back into their business. If no transfer of wealth—such as a dividend—ever happens, there is no shareholder income to tax.
Also, "wealth" is difficult to measure. Current plans would tax only the kinds that are easy to measure (eg, capital gains), and the wealthy would then switch to other kinds, such as closely held companies, fine art, large tracts of land perhaps overseas, derivatives, gold bullion, maybe even crypto-currency.
Taxing estates is so much easier. Plus, we do it now, although with many loopholes. Fix the estate tax and the IRS will get 40% of every billionaire's wealth, once each generation, until it gets all that wealth.
This is not the only area where Washington tries to layer brand new law atop old law that merely needs to be fixed. Immigration comes to mind.
As Finley Peter Dunne had Mr. Dooley say in 1902: "The job of a newspaper is to comfort the afflicted and afflict the comfortable" I think Robert's Newsletter is doing a pretty good job!
(Pancha Chandra): Robert Reich, you have an ethical pen that should shame the political, rich hypocrites of this world! These billionaires could use some of their wealth to make the world a better place. Yet, they pretend & look the other way! Name them & shame them to do better!
Inventions should be thought of as science experiments and continue to be improved upon and not bought and owned by investors. I believe that that type of ownership stifles innovation.
Great idea to go along with a Universal Basic Income!