I’m not going to go all Socialist on you — although some of you would like that — but I am going to kick around the idea of what is a “fair” amount of income tax to saddle impose on the rich.
And my case in point will be Elon Musk, who I regard as an idiot savant, a provocateur with an odd sense of humor and “fuck you” money.
Musk isn’t quite the world’s richest man, but that is clearly one of his goals. The 52-year-old South African — yes, he is African-American — is worth an estimated 210 billion dollars, and would like to be a trillionaire, which is 1,000 billions. (There are more than 100 countries with less than $200 billion in Gross National Product. You can think of Musk as a nation.)
Bernie Sanders would like to derail Musk’s trillionaire dreams. The 82-year-old Brooklyn-born Vermont U.S. senator calls himself a “Democratic Socialist” because calling himself what he is, a Socialist, would freak out too many people.
Bernie regards the rich as rapacious thieves, and is all the time saying they should pay their “fair share” of taxes. The problem is, he never defines what he means by “fair share.” And he has been asked.
He has defined a corporate tax rate, as 35%. (The average corporate tax rate of the G7, the wealthiest nations in the world, is 27%. Only three countries have a higher corporate tax rate than 35% — the economic powerhouses 😄 of Comoros, 50%, Puerto Rico, 37.5%, and Suriname, 36%.)
As for the personal tax rate, Bernie dodges using a number, even on his official tax-the-rich website.
No matter how hard I look, I can’t find a concrete number. It is odd that he says “fair,” but won’t say what it is. He might get further if he did.
He wants the rich to pay more so the poor(er) would pay less.
The question is how much less can the poor(er) pay?
In the last year for which we have statistics, 40.1% of American households paid no federal income tax. Zero. (Yes, the argument goes, they paid other taxes, such as sales, and Social Security, as do we all, but no federal income tax.)
Balancing the zero paid by 40.1%, the top 5% of taxpayers paid 42% of the revenue received by the government.
Does that seem “fair”?
Well, yes, if you believe that our progressive tax code — in which the higher earners pay a higher percentage than lower earners — is fair.
Some, mostly conservatives, say it is not, but the majority of Americans accept it as a form of leveling based on ability to pay.
Not fairness, but ability to pay.
Let’s look at it another way.
Joann is a single mother with two teenagers earning $75,000 a year. She pays about $11,553 in federal taxes. She can feel the tax bite. It makes a difference in where she shops, and where she lives, and where her kids go to school.
In 2021, Elon Musk paid federal income taxes of $11 billion, and it made absolutely no difference in what he buys, where he lives, or the welfare of his seven children.
The numbers are so big we sometimes forget what they mean. A billion is 1,000 millions.
What brings this to mind is a story that Musk is asking the shareholders of Tesla, the electric car operation he launched, to approve a $50 billion stock package for him. Tesla’s annual meeting is Thursday.
That shriek you heard was from Bernie.
And from me.
Is a $50 billion package fair? Is it right? Is it greed?
How much is enough, and is it the business of the government?
Here, Bernie does have an answer. It is a “tax on extreme wealth.”
The tax would be 0.1% surcharge applied only on net worth over $32 million, which affects 180,000 families.
“Over the last 30 years,” Bernie says, “the top 1% has seen a $21 trillion increase in wealth, while the bottom half of American society has actually lost $900 billion in wealth.”
The three richest individuals in America control more wealth than the bottom half of the American people.
Is that fair?
The extreme wealth tax would start at 1% on net worth over $32 million for a married couple, rising to 8% on wealth over $10 billion.
It is as constitutional as income tax itself, and inheritance tax, and taxes on investments.
The tax would raise $4.35 trillion over 10 years and would fund housing, child care and Medicare for All, says Bernie.
Does it “punish” the rich?
Well, maybe it does, in a way.
But it doesn’t hurt them. The top 0.1% wants for nothing, and never will. As much as I want to say that that what you have is none of the government’s business, I instead must ask how much is enough? Is greed limitless?
Billionaire Mark Cuban said getting rich is one of the most patriotic things you can do.
And then he added, “Pay your taxes. Lots of taxes. Hire people. Train people. Pay people. Spend money on rent, equipment, services. Pay more taxes.”
Getting back to the starting point of defining fairness, for me it is taking much more from people who will never even miss it.
So how do you define fairness?
The quasi socialists NEVER say what they really want. They want a ‘livable wage’ but never say what that is. They want ‘affordable health care,’ but dance around the meaning. They want ‘more money for schools,’ but never put a cap on ‘more.’ Ditto with the rich paying their ‘fair share.’ of taxes. To a socialist, ‘fair share’ would be 100%, as socialists hate the rich. It is not up to others to judge what is ‘too much’ money; the rich are entitled to as much as they want to earn– subject to their own definition of ‘too much’ and ‘greed.’ I take this position because the moment someone else decides for YOU how much YOU are entitled to, you enter the realm of ‘From each according to his ability, to each according to his needs.’ I am a proponent of a FLAT TAX, 12% (or whatever) from everyone — no deductions, no 2,500-page tax code. Maybe whichever bozo is running the government after the coming fiscal collapse and depression will finally see the light and fix our tax mess. (To think a penny stamp tax by the Brits was enough to piss off the colonies that caused them to riot and…well, you should know the rest.)
Stu, Regarding “It is as constitutional as income tax itself, and inheritance tax, and taxes on investments”, there is considerable disagreement about the constitutionality of a federal tax on wealth. There are reputable scholars on both sides.
It is Constitutional NOW. Can it change? Yes, and if it does I will write about that.
Stu, that’s the disagreement, whether it is constitutional NOW. You are free to assert you belief, but that does not make it constitutional.
A more accurate way to phrase it might be that it hasn’t been declared unconstitutional.
I remember when Wesley Snipes went to prison under HIS belief income tax was unconstitutional.
Like the death penalty, the taxes I mentioned are Constitutional NOW. That’s where I stand. Anything might be disqualified in the future, like Rowe, but I can’t live my life on “What ifs.”
I kind of like a flat tax on ALL income, above a certain level, meaning the poor would be exempt.
But is that “fair”? 😄
Everyone should have some skin in the game, even if it’s 1%. It is the price we should be willing to pay for living in the USA.
I believe it would all come off better if they changed the tone from “pay their fair share” or “punish” to simply “help.”
If I understand the fabric of the American mindset, most people detest being told they “owe it” or “don’t deserve what they have.” Yet the same people when help is needed, take pride in being generous – Americans more than anybody. Conventional Americans get offended by an 18% service charge on a restaurant bill but absent that, gladly tip 20+ %.
If today I need to be that political leader who concludes we need more tax revenue for essentials or to help the very vulnerable who despite their best efforts in life have been SOOL, probably the best way I could put it to our wealthiest is “America asks for your sacrifice and generosity.” Helping the most downtrodden is an American value and at times for the wealthiest to put in a little more that they are able to put in, is a most patriotic act.
Do we need more help from the rich? Then respect and honor them. Let’s not admonish them for being rich.
You are exactly right. Bernie frames the issue wrong.
Let’s cut taxes. The federal government is to big. We should pay for our self defence and everything else should be local. Before 1913 there was no income tax and people were able to prosper because they had more money in their pockets. Look how our government has wasted away our hard earned money on illegal immigration. Some much of our tax dollars are wasted.
Before 1913 might have been able to prosper and have money in their pocket. But from 1929 to 1939 the Great Depression changed all of that.
Wrong again, old man. Before 1913 import tariffs were the main government funding mechanism. It favored northern industrialists (protectionism) and hurt southern farmers. If elected little donnie j. promises to cut rich people’s taxes (again) and slap a tariff on all imports which will hurt the lower & middle classes by forcing them to pay more. In fact, the 2 biggest additions to the national debt were the Bush & Trump tax cuts.
You wanna cut the deficit; start by giving back your social security & Medicare.
One more fact, dannyboy, after the stock market crashed,the Republican -controlled Congress passed the Smoot-Hawley tariff bill which slapped exorbitant tariffs on most imports. Other major countries retaliated with their own tariffs & American imports & exports decreased by 2/3ds. It greatly worsened the depression and Hoover did little to alleviate the situation. Having observed Republicans for almost 60 years, Repubs represent corporations & the wealthy.
What would you, Bernie and any level of government do intelligently, honestly, competitively and effectively with even more of our taxes, regardless of whom it comes from? Taxes in the USA are meant to pay of essential services, not to punish, extort and take wealth from successful families.
We all know, or should know, that private business, excellent non union labor often at 25-45% less cost, and competitive markets are far more effective than anything government does.
We all know, or should know, that government at all levels squanders at least, pick your own percentage…10, 20, 30%, more?, of all taxes we pay to any level of government just to pay for the colossal government apparatus itself to turn around and use our taxes.
We all know, or should know, that those who work for and are elected to any level of public office are not our brightest bulbs by far. Not by a long shot. You want them to allocate even more of our money?
We all know, or should know, that the wealthy do not hoard their wealth in a vault like the cartoon character of Scrooge McDuck, but rather invest, start businesses, spend a lot of money on services employing thousands of others. They buy, use and build many things employing many others at fair competitive rates. Musk has done things no one else on earth has done.
We all know, or should know, that raising taxes on the wealthy, reduces the revenue brought in because there are many ways to move and to invest wealth out of the taxing categories that our not so bright bulbs, Backward and Looney Bernie being one of their heroes, have legislated to permit, that are legal and clearly support us all as Americans.
Just look at our not so bright bulbs in government close to home in City Council.
The two eager, woefully naive Worker Family Party Council members are working very hard to reduce the tax base for our own city by seeking special taxes on our wealthy residents. Those residents will naturally protect their assets and move out of Philadelphia, thereby substantially reducing our tax base since they support us by the huge amount of taxes, and many many civic donations, they pay now. If the WFP members and their colleagues were brighter, and really had the welfare of Philadelphia as their priority instead of their real goal of jealously punishing successful families, they would do the reverse and make Philadelphia attractive to wealthy families to bring more wealthy families here to increase our tax base.
Quickly, another example of too much tax money being criminally and maliciously squandered by government is our own public schools: every additional billion in taxes the schools are given, the teachers get raises and fewer responsibilities, many more non teachers are hired which is great of the union base, the schools’ ratings plummet, graduation rates plummet and many who are graduated, versus those who graduate with merit, are unemployable and often illiterate. Instead of setting a mission for such excellent schools so that people move into Philadelphia for the excellent education we offer our own students for the present budget of $4.6 Billion in taxes, we offer the level of education from which families flee from our city. Why?
What would you do with even more of anyone’s taxes?
What would be done with the money was answered by Bernie — housing, child care, Medicare for all.
Government can be wasteful and inefficient. So can private businesses, especially when forced to maintain an artificially high profit margin to satisfy Wall Street.
Bernie loves the “Nanny state”. Government has become the answer to many people’s needs – being dependent, and not being independent.
“Musk has done things no one else on earth has done.” You mean like buyout the original designers of the Tesla and market as his own.Buy Twitter, fire 2/3rds of the employees, enable White Supremacists to post anything they want, then run Twitter into the ground and sue people when they point it out. Even though he is not rocket scientist he is taking credit for the work of those who are in regards to Space X.
Then there is his drug use and his multiple failed marriages.
I totally agree with you. about Musk. He is complete POS.
I concur.
Hey Mr. Country Club, unions built the middle class. BTW, Mr. Gilded Age, is it fair that Tesla pays its’ line workers $22/hr while the megamaniacal Elon makes $47 billion? Elon & Bezos spend millions to fight unions. Amazon works its’ warehouse employees to death, and they get paid peanuts. You want to go back to the days of 12 hour/6 day workweek with just 2 days off (xmas & July 4th). You would get rid of things like OSHA and the EPA so you could gut worker safety. What’s next on your anti-labor agenda? You’re DEAD WRONG about Philly public schools & teachers. Philly teachers make peanuts compared ro rich suburbs like Lower Merion & Buckingham. Much of Philly school budget goes for maintenance & upkeep of decrepit, asbestos-ridden buildings that Republicans like you refuse to fix or replace. And the Phila school district is short of teachers (low pay).
What I think would at least as interesting as Stu’s article above, would be for him to research and then report on how many of the very wealthy and super-rich give away some portion of their wealth to whatever causes. Yes, it is partly a tax-dodge. But to some of them, it is a means of “giving back.” You could then use this information to complain about what is higher tax-worthy or not.
That research has been done, and it is why I feel that hating “the rich” is like every other form of bigotry. https://www.forbes.com/sites/phoebeliu/2023/10/03/the-forbes-philanthropy-score-2023-how-charitable-are-the-richest-americans/
Thanks for that link Stu. I figured someone must have done the research, and Forbes probably isn’t the only one. But it does show one basic thing – with the exception of a few, the vast majority are rather tight with their hoards. I agree that “hating the rich” is a form of bigotry. However, hating what they do – or don’t do (or complain about it anyway) with their spare spiff – isn’t. It’s a fair observation of them not contributing back enough to the people that helped make them wealthy.
I was an English major!
Put me in the “fair and equitable” column. I’m not privy, nor do I particularly care to research all the numbers involved. But the extreme wealth tax you mentioned might be a good starting point. The numbers can and should be hashed out. Another point you made was the corporate tax rate. One of the few things I think Donald Trump got right in his term in office (too early if I have to say first term yet) was lowering the corporate tax rate to be competitive with other Western countries. I would have preferred 25%, but he got 21%. Only numbers to quibble over, not concept.
I’m with A.+S.+M — don’t ask my dumbarse to do math!! But a return to the tax rates from the 1950s would do it for me, I think. That’s all. The changes in the tax code to benefit the upper classes made in the past 40 years have drained a lot of money from the economy. Just restore that and I think we’d be in better shape. Then again, it might wiser for me to go back in the other room and just write stuff rather than trying to do this evil math crap.
🙂
If the government taxed the rich at 100%, the money would run the federal government for about eight months. This according to the 2021 government expenditures.
Maybe if we cut some foreign aid, Bernie can get his housing and child care and more programs for those needy.
Foreign aid is less than 1% of the federal budget. The military gets 13%. Social Security is the largest expenditure — 40%. Just saying.
In 1965, CEO’s earned about 20 times more than the average worker. Today, it’s about 350 times more. CEO pay has risen by over 1,300% since Reagan was first elected President.
Raise inheritance taxes and cut the loopholes. The founding fathers never envisioned intergenerational transfers of wealth concentrated among the wealthy, like the Rockefellers, Mellons, Waltons (Walmart, which destroyed small businesses & small town business districts). Wealth=power.