I hope this works. The only way to save the economy and the society is by taxing the rich.
Think about it for a minute. The rich people hoard all the resources, financial assets, means of production and in the competition for resources they will (and are doing so) displace everyone else in the economy (and really from society also).
This means that those who are displaced have no means to participate in the economy. And not only that but also they will be pushed to the fringes of the society and exists in slum conditions. This will stiff the economy and hollow it out.
Let's say for arguments sake that the government taxes X hundred of millions of $ from the bezos/musks/gates/etc. and put that into the economy by
- indirectly or directly hiring people
- building infrastructure
- providing services for the citizens (education, health care etc)
- providing benefits to those who need.
All that money will immediately go back into the economy stimulating all kinds of economic activity. And essentially two weeks later that same X hundred million is back in the bank account of bezos/musk/gates and it can be taxed again!
By letting the uber rich hoard the wealth that wealth is essentially away from the economy providing very little economic activity.
In economy this is known as the "high propensity to spend". The "poor" (i.e. working/middle class people) have high propensity to spend, the rich have low propensity to spend.
Tax the wealth, not the work!
This has been done before and it can be done again!
Really rich people don't have a lot of money, they have a lot of assets that are considered to be worth a lot of money, typically companies. Companies are work. If you make the big owners ask for higher dividends, you tax the work indirectly.
You could of course tax the non-work wealth. Most of that is home ownership, few home owners consider themselves rich.
croon · 12h ago
If this was true there would not be millions/billions constantly spent on pushing for tax cuts and lobbying and hollowing out IRS enforcement.
justonceokay · 16h ago
The modesty of the landlord knows no bounds
freefaler · 6h ago
The landlord can raise the price because the supply of new apartments is low. With limited supply, the supply/demand equilibrium is going to a higher point.
Why is there a limited supply if people need places to rent?
Governmental regulation, financial regulation (e.g. Freddie Mac & Fanny Mae), zoning laws, overregulation on building that eats the margins and the with low supply the most profitable market is for "luxury" apartments with wider margins.
So if you want cheaper rent it's not that the landlord is greedy, it's that his greed can thrive because the market forces aren't working.
As Adam smith in 1776 wrote:
"It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
e.g. it's not from the benevolence of the landlord that we expect low prices, but from their regard of their own interest to rent the property that competes with many other properties available to rent.
bradlys · 6h ago
Collusion is a thing.
Arnt · 16h ago
Yeah, well. The richest person in the city where I live is rich because many thousand well-paid jobs are counted as part of her wealth. I've heard that she's not a nice person, but that hardly matters: If you want to extract money from that fortune, the money has to be squeezed from the many thousand jobs, because most of it is those jobs. (It's also the buildings it happens in, and the machines they use, but the largest part if the workforce.)
ethbr1 · 13h ago
Respectfully, I don't buy the power-not-actual-wealth argument.
If someone has wealth in non-liquid forms, they still have wealth.
Addressing inequality is going to mean governments and tax authorities take a broader view of wealth and methods to tax it.
There needs to be a new consensus that if wealth exceeds a certain level, it will be aggressively traced and progressively taxed.
Whether that wealth is in the form of currency, equity, corporate ownership, political power, or any of the other forms.
Because of the pyramidal distribution, it'd absolutely be feasible to say "If you have a net worth about USD$1b, you have a dedicated tax authority team who combs over your assets and calculate the minimum you should owe, using generally accepted accounting standards. Your choice how you choose to pay that."
And if they don't want to -- fine, your ability to travel in the first world is recinced. Have fun being rich, but you're not going to do it in Monaco.
Arnt · 12h ago
The wealth isn't particularly illiquid. That's not the problem I raise.
The problem I raise is that it largely is someone's jobs. If you want to tax the companies' overall value, part of the income from the work the companies do is going to go to the taxman. That money isn't gathering in a pile, unspent, today. So some employees are going to get fired or a pay cut, as a compensating cost-cutting measure. Which is fine so long as you understand that that's where the money is coming from. But you don't, right?
ethbr1 · 9h ago
I'd argue you're looking at it incompletely. If wealth is accreting in individuals, then those individuals need to be taxed more than they currently are.
Society shouldn't care if Bezos' wealth is increasing because the value of Amazon is increasing or because he struck gold on his property: the issue is that he and others own an outsized share of global wealth.
The answer is increasing how progressive tax rates are, especially at the ultra high-end.
If Bezos or other post-unicorn founders have to decrease their ownership stakes in "their" companies to pay their tax bills, that doesn't decrease the competitiveness of the businesses.
It just decreases their ownership.
Pretending that decreasing the wealth of the rich is incompatible with efficient business is a red herring used to justify individual control. Businesses can still run and people can be employed: individuals just won't have as much exclusive control over them.
And before the 'Think of small founders!' fig leave gets trotted out to cover obscene wealth, we're talking about T500-scale companies that are well past that size, and whose market distortion arguably threatens small founders much more. (Remember 'Be the next ____' instead of 'Be bought by the current ____'?)
sershe · 3h ago
I wish these kind of comments were backed by some numbers. European welfare states are paid for by taxes on the middle class. The wealthy already pay taxes disproportionately and taxing the wealth itself has an obvious problem, it's stock not flow, so given government spending it will last you a few years at best. Then what?
The way to fix the economy is to bring one metric back to what it was when the economy supposed ly worked in the past - per capital government spending
mrweasel · 17h ago
> I hope this works.
It won't. Richest people in the world are exceedingly wealth, but they're not that wealthy. I'm not suggesting that they shouldn't be taxed, they should, and much harder than is currently the case. We should move to remove the loop holes used and abused to make people like Bezos appear poor, in the eyes of the tax authorities, but it won't move much in terms of monetary value, because they're not that wealthy.
Let's tax Zuckerberg half of his wealth, that's roughly 2% of the US budget. That's a lot, but you can only do that once, maybe twice. You can certainly tax the wealthiest enough to fund quite a bit and if you pick the right things you can do a lot of good. It's just not enough to reshape society, which seems to be what most think would happen.
What I see as the biggest issue is the amount of societal damage these people are willing to do to amass their fortunes. I don't even care that Bezos is worth $250 billon, if he didn't exploit workers and deliberately destroys other business to accumulate that wealth. Same with Zuckerberg, he can be as rich as he likes, but he can't build that wealth of spying on users and generally being a dick. Musk... He can build all the cars and rockets he like, but stop undermining democracy through financial means.
Taxing billionaires hard won't stop their bad behaviour.
samiv · 17h ago
If the US government is 30 trillion dollars in debt someone is 30 trillion dollars in credit.
The money doesn't disappear. Now the problem is (in the context of United States) that the number #1 and #2 creditors are People's Republic of China and Japan. So the US cannot tax those entities.
But they can tax domestic creditors and wealthy individuals.
"Let's tax Zuckerberg half of his wealth, that's roughly 2% of the US budget. That's a lot, but you can only do that once, maybe twice. You can certainly tax the wealthiest enough to fund quite a bit and if you pick the right things you can do a lot of good. It's just not enough to reshape society, which seems to be what most think would happen."
No, the point is that you can do it over and over again.
Once you put that money into the economy it will flow all around it and most of the money will end up in the same place again. I.e in the bank account of Zuckerberg and it can be taxed again.
mrweasel · 16h ago
If we stick to Zuckerberg or Musk, a lot of their money isn't real, you can't really tax it directly. They'd have to offload a crazy amount of assets, including stocks. They'd lose a lot of their value if you had to sell it all of at once.
It's only real in the sense that they can use it as securities for loans or purchasing other assets. I'm not an economist, but it sounds like that would slow down the wealth generation of the riches people, and that would mean less taxable wealth next year.
You may be right. I still think address the increasingly egotistic and damaging behaviour would be better.
diggan · 14h ago
> I still think address the increasingly egotistic and damaging behaviour would be better.
If not by taxes, then how? Social pressure doesn't seem like it's working anymore, because individuals could just ignore that and still proceed like everything is normal. Genuinely curious about alternative solutions that doesn't involve taxation, since everyone seems to be so tax-avoidant.
mrweasel · 14h ago
Regulations and extremely high fines for breaking those regulation. In worst case, lose the right run a business in the future. The EU is getting closer to real fines, in terms of how large they need to be. The idea of using X% of turnover is good, but 4% isn't high enough.
In the case of companies like Amazon, force them to negotiate with unions.
How many Meta or Amazon size companies do you think the US government would need to shutdown for the industry to take notice? My guess is about two. Just close it down and let the shareholders take the lose. That way shareholders of other companies will insist that rules are followed. The government can sell of the assets and make some money that way.
diggan · 10h ago
> Regulations and extremely high fines for breaking those regulation
So say Musk gets convicted of "egotistic behavior", however that works, and he's hit with an extremely high fine. How is he supposed to be able to pay that fine without having to "offload a crazy amount of assets, including stocks", which according to you would be the problem?
Seems while the approaches are different, you'd still be in the same boat as if it was just taxed from the beginning, except you don't involve the judicial.
ethbr1 · 9h ago
Transfer assets to the tax authority at current market value minus discount, to satisfy his tax bill, then have those assets required to be sold to the public market over time?
Or he's welcome to borrow against his own assets and pay in cash.
logicchains · 17h ago
>Once you put that money into the economy it will flow all around it and most of the money will end up in the same place again. I.e in the bank account of Zuckerberg and it can be taxed again.
Money is not value, it's a proxy for value. By taxing capital and using it on handouts, you're essentially burning that value; it's like a farmer eating all their seeds rather than saving some for the next year's crop.
samiv · 16h ago
"By taxing capital and using it on handouts, you're essentially burning that value; "
If you tax the money from Zuckerber and give it out as "handouts" as you say, what do you think happens to the money?
You think it just disappears?
What happens that every $ that is given out to people who need it will use the money to buy things they need, their food, energy, their utilities etc. This consumption and the flow of money is exactly what lubricates the economic machinery and creates new growth.
When people have money to spend there are new things and services to build and sell!
If you deprive people from money, how do you create business when nobody can afford to buy whatever it is that you're making?
Henry Ford already knew this that if people don't have money to buy his cars he has no business!
logicchains · 17h ago
Spending money doesn't grow the economy; the economy grows by saving and investment. Punishing people who successfully save and invest by giving money to people who prefer to spend everything they earn leads to less savings and investment, and lower economic growth, as the poor economic conditions of Brazil and Spain demonstrate.
Rich people don't "hoard" the means of production, they create it. Confiscatory policies lead to less business creation; if Gates, Musk, Bezos, Zuckerberg and Page had not had the wealth to create the businesses that made them billionaires, those businesses wouldn't exist, the jobs and products they create wouldn't exist. Europe demonstrates this empirically with its complete lack of any big tech companies, a result of its hostile policies and cultural attitudes to entrepreneurship.
vitorgrs · 17m ago
Spain is actually one of the few countries in EU that is growing a lot, actually.
samiv · 17h ago
Investing in passive assets such as property that already exists does not create new economy.
"Rich people don't "hoard" the means of production, they create it."
Actually they do. Look at the GDP growth rates across western countries. 1-2%.
The wealthy people (since pandemic) have grown their wealth 10-20%. Where did that come from if the GDP didn't grow.
The only way they were able to do this was by literally hoarding wealth and by buying assets that already exist and by doing so displacing other people with less assets.
drcongo · 16h ago
Indeed. There's a whole street in London (The Bishop's Avenue) that's essentially unoccupied - every house on it is owned by foreign billionaires. Every now and then one of them knocks down the house and builds a new, more garish one in its place. It used to be stunning, now it's grotesque.
mafuy · 16h ago
I think the GP comment has some issues, but this is not the right way to address them.
If someone owns all the houses but does not rent them out at a reasonable cost, so people have to sleep on the street while the house stays empty, then I will call that hoarding. You don't really address that core problem.
koonsolo · 16h ago
Europe has plenty of startups. The real issue is scale-ups, where the main cause is lack of risk capital.
ethbr1 · 13h ago
> if Gates, Musk, Bezos, Zuckerberg and Page had not had the wealth to create the businesses that made them billionaires, those businesses wouldn't exist
Bullshit. They would have all created those businesses as long as their personal financial situation improved through them.
Arguing that it takes 0.1% wealth payoffs to incentivize business creation is false.
Someone would do it for anything greater than average, if there were global minimums, and a tax structure that allowed corporations to retain capital was used.
tzekid · 17h ago
In modern societies:
top 1% of earners pay roughly 30% of taxes
top 5% pay 65% of taxes
top 10% pay 80% of taxes
while bottom 50% usually barely make 2% of taxes.
Heavy redistribution of wealth is already in place and it's not making things better.
samiv · 17h ago
"Heavy redistribution of wealth is already in place and it's not making things better."
You're right, because the distribution is removing large groups of people from the economy.
Just for reference, this has been done before and it produced possibly one of the best economies (at the time) and it was very social democrat. This was the United States after the so called "New Deal".
And just to make it crystal clear, we're not talking about taxing working people. We're talking about taxing the obscenely wealthy people who just sit on massive amounts of wealth, whether it's stocks or property or yachts or mansions or gold and jewelry. You know the > 10-1000x millionairs
myrmidon · 17h ago
Sure, but how "heavy" is that redistribution though?
Top 1% paying 30% of taxes sounds like a really rough deal for them at first, but if those 1%ers already own over 30% of your country in the first place (which is the case in the US), then thats barely their "fair share", and you are not really achieveing any redistribution at all.
How can you be certain that the problem is "progressive taxation is not working" instead of "taxation does not help against wealth inequality because it is actually barely progressive"?
hnhg · 17h ago
Also the top 1% covers everything from the very affluent middle class to billionaires - the distance from the least rich part of the 1% to the richest part spans billions, much greater than the rest of the distribution's 99%.
cloverich · 16h ago
top 1% net worth is around 10 million says google. That's enough to live off and not need to work at any age. It's clearly not middle class.
hnhg · 14h ago
It depends on where you are. There are parts of the USA where a 10 million net worth does not mean you are "yacht rich" (but certainly very comfortable).
ethbr1 · 9h ago
No one has a right to live anywhere specific. That seems like an individual's problem rather than a government's.
ulrikrasmussen · 17h ago
But the top 1% still pays proportionally less of their wealth in taxes than the bottom 50%. Yes, they may pay a large fraction of the total taxes, but with what they own they should pay even more.
I think another big problem is that this extremely uneven distribution of wealth is a basic democratic problem. The reason we have states is, among other things, to put the allocation of our finite resources under democratic control. If the majority of those resources are on private hands, then states get less control and our votes have less power.
No comments yet
robin_reala · 17h ago
I’m not sure how your second statement follows your first? It’s implying that your numbers are “heavy” but not backing it up.
misterhill · 17h ago
A lot of people survive and tolerate a lifestyle that comes from these redistributions of things to people who no longer have direct access to means of survival like water and land. You really have to qualify what you mean in better.
Many rich people with heads should consider that the current situation is making things better than the next version of the French Revolution.
logicchains · 17h ago
>Many rich people with heads should consider that the current situation is making things better than the next version of the French Revolution.
The French Revolution was a revolution against the French government, and its high tax policies.
skywal_l · 16h ago
No. It was a revolution against a regime where the rich paid NO taxes.
Article 9 of the august decree – Fiscal privileges in the payment of taxes were abolished forever. Taxes were to be collected from all the citizens, in exactly the same manner, and plans were to be considered to set up a new method of tax collection. [0]
> Heavy redistribution of wealth is already in place and it's not making things better.
Really? Universal education and healthcare don't make things better?
koonsolo · 16h ago
Do you have a source for this?
myrmidon · 18h ago
I think increased automation and now AI are making wealth inequality problems inherently worse.
The existence (and prevalence) of food delivery work alone is a depressing portent in my view: If delivering food for objectively shitty pay is still a viable option for a lot of people, that signals to me that human labor has become borderline worthless (even in a wealthy/developed environment).
That makes the "american dream" (=> start from nothing, do a good job, become wealthy) increasingly less realistic.
I'm also afraid that this (preventing wealth inequality from getting out-of-control) might be a "practically unsolvable" problem for democracies in general (just like managing housing and public pensions): It is too easy to "sabotage" democratic progress for the negatively affected minority (and that minority is exceedingly powerful/well-positioned, too).
barney54 · 17h ago
AI hasn't had an impact yet.
Automation is great and has made things undeniably better. In the 1800s, 30% of the US GDP was tree cutting. https://x.com/AlecStapp/status/1939912893102760063 Before automation, nearly everyone was involved with agriculture. Today is much better.
myrmidon · 17h ago
I'm not saying that things are necessarily gonna get worse-- just that human work decreasing in relative value creates huge (new!) problems for our current wealth distribution mechanisms.
Maybe there is an easy way to have our cake and eat it, too (like consistent wealth taxation like the article suggests), but I'm doubtful.
In the past, basically every form of investment used to involve human labor to some degree-- meaning that every rich industrial magnate also automatically created opportunities for zero-net-worth workers/builders/employees.
But when your big investments just become server racks and industrial robots, then you no longer have this balancing mechanism, and you probably need to do something to prevent wealth concentration without bounds (and to guarantee opportunities for "worthless" individuals).
int_19h · 5h ago
Anything that increases productivity per person creates a potential for increasing wealth inequality, because the more each person can create, the more can be taken away from them by someone else. Pre-agricultural societies generally tend to be very egalitarian with no clear economic elites, but you start to see the wealthy elite class manifest in those of them where even without agriculture per-person yield is so high (e.g. PNW Salish) that it's possible for a few people to live off the surplus generated by the rest. Agriculture gives a massive boost to yields, and all societies that went down that route quickly lost their original egalitarianism. AI is just another step down the same road.
But note that this is a potential, not an inevitable outcome. This outcome is more likely because there is a positive feedback loop at play here: if you can somehow force people who generate wealth with their labor to surrender part of that wealth to you, you can use those resources to improve your ability to forcibly exploit others (e.g. by hiring more armed goons in a primitive society, or by bribing politicians who pass laws that are ultimately enforced by "public servant" goons in a more advanced society like ours). Simply put, wealth can buy power, and the resulting increase in power disparity can be used to extract more wealth from the people producing it. Thus the natural trend of technological advancement is towards income inequality ... but a society can still go against the current, it just takes a lot more effort on behalf of the citizenry.
ta1243 · 17h ago
In the US, over the last 45 years, work has increased in value about 3.5% a year, and the S&P about 9.5% a year.
Work is not valued, wealth is.
myrmidon · 17h ago
This is exactly what I mean-- I think also the whole housing affordability is just another side of this coin: Buying a home grew more expensive (in terms of median income) for decades, and that alone is a huge problem in my view, with no realistic solution that I can see (=> except demand implosion from a shrinking population, which would probably create twice the amount of problems that it solves...)
ta1243 · 15h ago
Housing costs in the western world is the root cause of everything. Housing costs on a monthly basis increase to take all income, because the demand for housing is higher than the supply.
You can't simply reduce your consumption, because you are reliant on everyone doing the same thing.
Rent controls don't help because that means housing simply has to be rationed in another way which is typically worse.
The solution is to increase housing supply in high demand areas.
ethbr1 · 9h ago
Has anywhere tried rent taxes to fund new construction?
It'd need to be strictly tied with a viable building method, to limit NIMBY problems, but would accomplish the goal.
If rent for class Y housing is $A, and the target price is a lesser $B, then tax the $A-$B difference at a high rate, with 100% of the tax proceeds being used to directly fund new class Y housing creation.
Bigger delta = more funding for new construcion
bluecalm · 17h ago
Why would you compare a unit of work (say an hour) to a cumulative index?
It just doesn't make any sense to compare those two values.
ta1243 · 12h ago
An hour of work buys far less of a percentage of the value of US companies than it did 20 years ago.
in 1983 a single "share" in the S&P, or a single unit of American business, cost $120, about 13 hours work at the median wage then of about $9/hr.
Today you would have work for about 200 hours at the median wage of $30/hr to buy the same single share ($6200)
Companies have ballooned in value relative to median earnings. And top 10%ile earnings too for that matter.
rckt · 18h ago
Considering how everything is rigged in favor for the rich I don't have high hopes for this. But it would be great if they really come up with a system that makes sense and offers equal tax regimes for everybody. Right now if I'm not mistaken in Spain the most taxed people (in terms of ratio) are those who earn < ~300K per year.
diggan · 18h ago
> Right now if I'm not mistaken in Spain the most taxed people (in terms of ratio) are those who earn < ~300K per year.
You are mistaken. Currently, the higher income you have here, the higher tax rate you have, where the highest tax rate on income sits at 47%, which you get hit by when your income is above 300K/year. People between 60K and 300K sits at 45%.
And then there are regional differences, someone in Andalucía don't pay the same amount of taxes as someone who lives in Catalunya for example, where the top tax rate is 50%.
Even taking into account other taxes we have, you still end up paying more in taxes the more you earn, unless you start engaging in schemes to lessen your tax burden, obviously. Although the social security is capped, so it does increase slower once you go beyond the cap, but it doesn't start regressing which your comment hinted at.
Edit: important to note that the tax rates are all marginal tax rates, maybe that was a bit unclear.
foota · 18h ago
Wow, a 45% tax starting at 60k is kinda unreal.
diggan · 18h ago
Why is that? Sure, not all of it goes directly to people who need it, but I generally feel fine paying that amount of taxes, because I myself got helped by others paying taxes when I was dirt-poor but still needed to go to the hospital.
If/once you reach that point (+60K/year), you already live a above-average life, why not share some of that with others who aren't as good/lucky as yourself? Seems like a no-brainer to me, but I might be too European to really grasp the problem.
Nextgrid · 18h ago
60k/year doesn't feel above-average considering the rent in Barcelona for example.
I wonder, have there been any studies/considerations for making rent tax-deductible for individuals? That would address this problem for example. There probably is a good reason for not doing it, but I wonder what it is.
diggan · 18h ago
> 60k/year doesn't feel above-average considering the rent in Barcelona for example.
Barcelona (and Madrid) are extreme examples though, not "average" by most measures. Take a look at houses/apartments just 30 minutes outside of Barcelona (not too familiar with Madrid) and it's way easier to find affordable places, and it's easy enough to get into the city with trains and buses.
rsanek · 16h ago
I don't know if I'd say "extreme example", >10% of the entire country lives in one of those cities.
diggan · 14h ago
Some quick "on top of my head" math tells me ~10% of the population in Spain lives in Madrid or Barcelona, so that pretty much makes it a minority in my head. Put another way, the majority (90%) of the Spanish population lives somewhere else than in Madrid or Barcelona.
Even if you count the greater metropolitan area (where I'm part of the Barcelona one myself, although I live 30 minutes away from the city), you only get up ~20% of the population living in either Madrid or Barcelona. Even then I'd say we're in minority compared to the people who don't live in either those "metropolitan" areas.
eithed · 18h ago
Accounting for wages being influenced by cost of living of the place you're registered in when determining tax bracket seems like a solution (but it's just my naive thinking)
zdragnar · 18h ago
It's a remarkably high rate for people accustomed to progressive tax systems with a sharper curve.
It's not hard for tech workers to start hitting top rates similar or higher than that in the US if you're in a high tax state, but at 60k you're more likely to top out at 39%, but because the curve is so steep the average (actual percentage of income) tax is only something like 22%. That includes extras like social security and Medicare.
Living in a state without any income tax will further lower those numbers.
diggan · 18h ago
> Living in a state without any income tax will further lower those numbers.
Sure, but how well are those without income supported in those states? Can they live a comfortable life even if they're unable to work? Can they go to the hospital and do life-saving surgeries without being in debt for the rest of their lives? Are there enough libraries and beyond-school activities everyone could use for free, regardless of income?
Once you hit those rates, I feel like you should stop thinking about how you can pay less in taxes, and figure out how you can support everyone else around you, otherwise what's the point of earning all that money in the first place?
zdragnar · 15h ago
> Sure, but how well are those without income supported in those states?
No income at all generally means you're eligible for either Medicaid or Medicare, or COBRA coverage if you're recently unemployed.
The worst off are people who have low paying jobs- they make too much for benefits (typically 138% or more of the federal poverty level) but not enough to afford employer-sponsored or private-market insurance.
ta1243 · 17h ago
> Once you hit those rates, I feel like you should stop thinking about how you can pay less in taxes, and figure out how you can support everyone else around you, otherwise what's the point of earning all that money in the first place?
Taxes are the fees you pay for living in a nice society
disgruntledphd2 · 17h ago
Try Ireland, 48% starting at about 45k.
Fun fact, Ireland has one of the most unequal distributions of income in the EU pre transfers/taxation, and one of the most equal distributions of income after taxes and transfers.
So this stuff sortof works.
More generally, taxation of wealth is generally a good idea, but it needs to be over as many countries as possible to avoid people just moving.
You can accomplish most of the same goals by taxing property, as that's most of global wealth and it's harder to move.
You also need to handle the extreme top of the distribution through some kind of taxation on stocks/investments but property tax gets you most of the way there.
jonathanlydall · 17h ago
I'm surprised that you seem to be surprised. In South Africa it's not super far off from that.
Ignoring smaller tax brackets, income in the bracket of USD 48,500 to 102,900 is taxed at 41% with any higher earnings taxed at 45% [0].
On top of that we have 15% VAT on essentially everything we buy. Also, any "luxury" imported item, including all electronics, also has an additional substantial import tax on top of that, e.g. an iPhone is something like 9%.
It gets even worse though, if I want decent quality health care, education and security I have to pay for all of those privately. Between my wife and 2 small kids, we pay at least USD 10,200 extra each year, and that's not including occupational, speech and physio therapy my now 5-year old, but prematurely born, is needing at the moment.
An "advantage" for someone like me though is that a very large portion of our population is very poorly educated and thus cannot demand much of a salary, meaning that the domestic cleaner/child minder I employ is very affordable.
Just the other day someone pointed out that the middle class here might not get much for their taxes (as we're essentially subsidizing the majority who are poor such that they tend to pay nothing except VAT) but on the flip side we wouldn't have domestic workers and gardeners be as affordable.
Most people don't understand how taxation works; in many places, there is progressive tax, which means you are not taxed at 45% or 50% or whatever, but only on the portions you make above certain thresholds.
exe34 · 18h ago
It's only 45% on money above 60k, it's not the entire paycheck.
No comments yet
beAbU · 18h ago
60k in Spain goes a relatively long way.
ta1243 · 17h ago
That's about 3 times median income in Spain.
In California someone on the median personal income of about $50k pays 18% income tax. In Spain (Madrid) someone on the median income of about €23k pays 19% income tax.
Double the median income and it's 27% in California and 27% in Spain
Four times median income and 33% California, 34% Spain
Andrew_nenakhov · 17h ago
That's socialism for you.
diggan · 17h ago
Yeah, it's great :) Me, with high income, can help those with lower income and even those that cannot work, and I don't have to do anything more than filling out some papers once a year. I wouldn't want it any other way.
danayfm · 17h ago
I love it too. Spain taxes paid me for all years full ride scholarships to anywhere in the world. Never needed to work while atudying. Then it allowed me to steal high paying jobs in the US with no student loans. And I wasn't even a good student, I was just poor AF.
I want the same for all Spaniards and will gladly pay high taxes if my family, friends, and my neighbors can also have that same opportunity.
diggan · 16h ago
Glad I'm not alone in wanting this for others :)
a-french-anon · 17h ago
No, it's not "can help", it's "forced to help under the threat of prison". Taxes aren't charity.
diggan · 10h ago
> Taxes aren't charity
That's a matter of perspective, isn't it? :)
> No, it's not "can help"
I could employ similar tax-avoidance schemes as other rich people regularly do, but chose not to. I could live outside the country for 51% of the year and also avoid taxes that way, but also chose not to.
Ultimately, you do have a choice on how to approach things, and how you see them. You see them as "The nanny-state is taking what's rightfully yours" then yeah, that's the perspective you have, but it's not a ground-truth and it isn't the only perspective.
Andrew_nenakhov · 17h ago
Move to Cuba then. It's like a little part of the USSR in a time capsule. Quite a surreal place for people like me who were born in the USSR.
diggan · 14h ago
> Move to Cuba then
What seems to indicate I didn't like where I currently live? Not sure why I'd want to live in something similar to the USSR, that sounds all-around bad. Did I misunderstand something or are you misunderstanding what I've been writing?
Andrew_nenakhov · 9h ago
I think you are misunderstanding socialism and what it brings to its victims. Cuba is a very good demo of what socialism eventually results in.
Philpax · 17h ago
Why would they do that when they're doing fine in Spain?
Hikikomori · 15h ago
You know Europe exist right?
lynx97 · 18h ago
See, nobody really wants to pay taxes, neither the rich nor the poor. Which makes them equal at least in this regard.
Frankly, I don't even know what my gross earnings would be, simply because the number is irrelevant and only makes a bad mood. All I consider is net income. This way, I dont have to be sour about taxes....
junga · 17h ago
> See, nobody really wants to pay taxes
Then my name must be Nobody.
consp · 17h ago
And the OP is the cyclops. Guess who wins in the end. (Sorry for the Homeric reference, couldn't let it go)
HamsterDan · 17h ago
It's a monstrous disincentive to increased productivity. If you're a smart, ambitious person who wants to work hard and advance your lot in life, are you really going to stay in Spain knowing that the government is going to take half of everything incremental thing you do?
This is basically inviting your best and brightest to move to the US and other low tax countries.
phil21 · 16h ago
I looked into this a long time ago, it’s only gotten “worse” since then as far as I know.
Assuming your money comes via income and you are not doing anything exceptional to optimize taxes, you are around that 50% or so rate on incremental income nearly anywhere you’d be able to make such incomes in the western world. Normalize for things like health insurance and it’s really not worth even considering a move for tax purposes in most cases.
The US is known as low taxes, low services - but it’s really within about 5% for high earning professional workers compared to even most social democracies. It’s a decidedly high tax low services place to live.
The largest difference in taxes in the US vs rest of the developed world seems to be the high tax brackets start much earlier on the income scale. It’s much better (for taxes at least) to be in the US as a median wage earner and it’s usually not remotely close.
Where things decouple is how capital and other forms of investment income are treated. That gets too complicated for me to understand, but it’s clear to me that a charitable take would be tax code has not kept up with how the wealthy increasingly earn their income.
diggan · 14h ago
> If you're a smart, ambitious person who wants to work hard and advance your lot in life, are you really going to stay in Spain knowing that the government is going to take half of everything incremental thing you do?
I'm smart (anecdotal, but still) and ambitious, and I moved to Spain, and I'm planning to stay here, yeah. Yes, I'm OK with the government taking the excess profits us "rich" people earn so others who cannot work still can survive and even get health-care, like the rest of us.
> This is basically inviting your best and brightest to move to the US and other low tax countries.
If that leads to all the soulless money-chasers move to the US, then that sounds like a positive to me. I prefer a society where everyone gets equal chance and a good life, regardless of income, and the ones who want to ruin that can continue to build their utopia in the US.
disgruntledphd2 · 17h ago
> This is basically inviting your best and brightest to move to the US and other low tax countries.
If you're in tech, you'll want to move to California, where you'll end up paying around 50% marginal, which is much the same as lots of Western Europe. So yeah, you'll make more money but you won't get significantly lower tax rates.
const_cast · 8h ago
> This is basically inviting your best and brightest to move to the US and other low tax countries.
The US is not a "low tax" country, it's just underdeveloped in social services. Which might give the impression the tax rate is low, but it's not - it's very high. Not only are you going to be paying income tax within 10% that of a western European nation, but you also have lots and lots of invisible taxes.
For example, did you know that about 30% of all compensation in the US goes just to providing health insurance and other benefits to employees? One of the downsides of having an underdeveloped health sector is that it's quite expensive.
Or, how about the fact that the average American spends 15% of their gross income just on transportation cost? Turns out having all that underdeveloped transit infrastructure isn't free. We pay for that.
eclecticfrank · 18h ago
Germany technically has a wealth tax. However, it is supended since 1997, because the methods of how real estate wealth was calculated were outdated and thus considered unconsittutional.
Tax is not collected, but the supporting law has never been revoked.
Interestingly, the court order in question demanded that real estate should be taxed higher than the status quo - instead, the conservative government decided not to collect that tax at all any more.
Wikipedia claims that this decision was partly due to the max tax rate being at 53% at the time. Today, it has dropped to 42%, but for some strange reason, the wealth tax has never been reinstated.
GardenLetter27 · 18h ago
This is the wrong way to look at the issue.
The super-rich don't stay rich by just sitting on their money, they invest it.
These countries should focus on encouraging investment there - by getting rid of bureaucracy and red tape, make it possible to hire across the whole EU a lot easier, without needing separate tax registration in every country, etc.
Lower the barriers to entry wherever possible - no long application processes for developments with endless consultations, no arbitrary minority language or qualification requirements, etc.
Income inequality is a good thing, but there needs to be equal access to education and opportunities and the lowest barriers to entry possible.
imiric · 18h ago
This is not so much about income inequality, but about making sure that the rich actually pay their taxes, or even more proportionally to their wealth when compared to lower income individuals.
Rich people will and should continue to exist. What they shouldn't be allowed to do is take advantage of loopholes and tax breaks just because they're wealthy. That alone should indirectly lead to lowering inequality, and, assuming we can trust that governments work efficiently and in equal interest of all their citizens (which is hardly a given), it should lead to a fair(er) distribution of wealth, instead of a growth of inequality.
In any case, it's easy to be cynical about this news, but it's a step in the right direction on paper. In stark contrast to what is happening in the US, for example.
bluecalm · 17h ago
>>This is not so much about income inequality, but about making sure that the rich actually pay their taxes, or even more proportionally to their wealth when compared to lower income individuals.
Sounds like you want to tax assets. Every country can start doing it right now with assets on their soil. No "global registry of wealthy people" is needed for that. Just look at the assets you control and tax them.
consp · 17h ago
Assets can be easily hidden by elaborate constructions over multiple nations, if you have the money to finance it you can save millions with it. Is it legal? Maybe yes, maybe no. Is it something desirable to society? No. This is why you need a registry.
bluecalm · 17h ago
What assets?
Land can't be moved, company offices can't be moved.
Just tax what you control and let others tax what they control. Why do you care if I have a pile of gold stored in Barbados. It doesn't influence your country in any way.
disgruntledphd2 · 17h ago
Yeah, this is possible. At an EU level it would probably work. It would be even more effective in the US because they charge tax on global income for citizens, regardless of residence.
regentbowerbird · 18h ago
> The super-rich don't stay rich by just sitting on their money, they invest it.
The specific issue here is that revenue from capital is taxed less than revenue from labor, thus disproportionally impacting the poor & middle class.
Can you explain how taxing the rich even less will solve this issue?
GardenLetter27 · 17h ago
Then the solution is to cut taxes on income, and cut government spending.
No complicated exemptions, or complicated progressive bands, just keep it simple and eliminate bureaucracy. Then people can manage their own pensions and insurance.
This could be accompanied by a Georgist Land Value Tax to encourage development and innovation too.
notrealyme123 · 17h ago
thats way more than currently most working jobs get taxed, and way less than returns for invested money gets taxed (at least when using "smart" tax strategies).
So yes, tax the rich +1
ur-whale · 17h ago
> Ideally there'd just be a 10% tax
With the added value that it mechanically keeps governments lean and fit, instead of the bloated, taxpayer money wasting leeches that they are in most socialist countries.
Socialism, a.k.a. a picture perfect example of the maxim "The Road To Hell Is Paved With Good Intentions".
High taxes that supposedly lead to social justice via re-distribution of wealth ALWAYS end up driving countries into the same ditch: gross abuse of public money making the poorest part of the population suffer the most.
Look at Venezuela, California and Cuba for perfect examples. Spain is not far ahead of them, check out their sovereign debt in case you have a doubt, and how many times they've had to be bailed out.
And if you have doubts that low taxes lead to healthier societies, it is indeed possible, I'd invite you to take a look at Switzerland, where taxes are super low, the institutions work like well-oiled Swiss watches, crime is quasi non-existent, infrastructures work, corruption is one of the lowest in the world and - yes - there are filthy rich people (who gives two fucks if they're rich? As long as your life is good. Unless jealousy of course.) but the so-called "poor people" in Switzerland have a way better life than most supposedly rich people in the rest of the world.
disgruntledphd2 · 17h ago
> With the added value that it mechanically keeps governments lean and fit, instead of the bloated, taxpayer money wasting leeches that they are in most socialist countries.
OK great, what do you want to cut?
Generally, it's about 25% on education, 25% on welfare, 25% on health and then everything else is another 25%. Which of those things do you want to cut?
Education is generally net positive as you need future taxpayers to pay for your pension, health could be privatised but then you'll have lots of avoidable deaths, one could additionally cut welfare but then you're basically hurting poor and old people, or cut everything else which means no roads or public transport which seems less than good.
I think the big misconception people have around taxation is that some level of government revenue makes the entire economy much more productive. Is there waste? Yeah, of course, but it tends to be much lower than in the private sector.
ur-whale · 16h ago
First: gee, I wonder how the Swiss do it.
To your points:
>OK great, what do you want to cut?
The answer is largely dependent on the country you're talking about.
But the generic answer: cut waste. That includes inefficiencies, duplication of effort, crazy useless shit the government wastes money on (see the unreal crap DOGE unearthed in the US for example), downright corruption. And when that's all said and done, cut every department budget equally by 50% the first year.
When you deal with a parasite like most governments are on the planet, less food means a way more efficient and smaller parasite.
> Education ...
Your not getting my point. This is not about picking winners and losers in the belly of the beast. This is about reducing drastically the size of government overall. Period.
Now if you want to pick apart winners and losers, sure, let's do this ...
In in ideal world, a government should stick to regal functions: externals security (army), internal security (police), justice (enforcement of laws, property and contracts). End of story.
If you believe that including things like health, education and welfare in the R&R of govt is a good idea (I don't, it creates monopolies, which are inherently corrupt inefficient), fine.
In that case, make sure they're properly starved (small budgets) so they operate at maximum efficiency, decentralized so even if they're taxpayer funded there's at least a modicum of competition to keep them meritocratic, honest and efficient.
> Education is generally net positive as you need future taxpayers to pay for your pension
In countries where retirement management was designed like a ponzi scheme (new investors buy in so early investors can benefit), and where the age pyramid looks like a freaking Christmas tree, you would unfortunately be correct. In a properly designed retirement system, this is utter BS.
Retirement system should only be minimally mutualized. In an honest retirement system, you should mostly rely on what you have set aside during your work life, 401k style. And certainly not pray that there will be, 50 years down the road enough of the same suckers you are now to pay for your sustenance. When people stop making babies, guess who's going to be left holding the bag? You. That's who.
> Is there waste? Yeah, of course, but it tends to be much lower than in the private sector.
I'd love to see the data backing this claim.
But if we're talking impressions, my observation after a rather long life is the exact opposite: the private sector is far, far more efficient than governments except when corporations get to monopoly status and essentially become mini-governments (via crony capitalism) and with the exact same illnesses.
disgruntledphd2 · 14h ago
> In in ideal world, a government should stick to regal functions: externals security (army), internal security (police), justice (enforcement of laws, property and contracts). End of story.
OK, so you want a 19th century government. That's a position that one can hold, but (unfortunately or fortunately) this is never gonna get voted for, so unless you're also against democratic voting, you should probably think about how to accomplish some of your goals in a society that actually can exist today.
> And when that's all said and done, cut every department budget equally by 50% the first year.
OK great, how do you choose who lives and dies? Cos that's basically what a 50% cut across the board will mean. Personally, I like that people without as much money as me don't starve to death on the side of the street, but obviously opinions differ.
> In an honest retirement system, you should mostly rely on what you have set aside during your work life, 401k style.
OK great, so your proposition is that poor old people should just die?
> And certainly not pray that there will be, 50 years down the road enough of the same suckers you are now to pay for your sustenance. When people stop making babies, guess who's going to be left holding the bag? You. That's who.
This is basically all developed world social security systems, so you're proposing again, that poor old people should starve to death on the side of the street.
More likely, what will actually happen here is that the voters (most of whom are poor) will vote themselves confiscatory taxes on people who have saved. And that's the better option! The worse one is that they'll just bring back the guillotine.
Note: I apologise for the potential emotionalisation of your points, but it's important to keep people aware of all the consequences of approaches like this.
While I definitely think that lots and lots of state problems exist, and could be fixed, I reckon that in many cases fixing these problems will require insourcing a bunch of work to the public sector. Good examples of where this would probably work are in constructing tendering and design, as well as software tendering and esign.
> But if we're talking impressions, my observation after a rather long life is the exact opposite: the private sector is far, far more efficient than governments except when corporations get to monopoly status and essentially become mini-governments (via crony capitalism) and with the exact same illnesses.
Having spent a bunch of my career in public sector orgs and the rest in the private sector all I can say is that they're about equally inefficient and stupid, just in different ways.
> I'd love to see the data backing this claim.
I'd love to see data backing your claims of the stupendous waste in government, but we can't always get what we want, I suppose.
lordleft · 18h ago
Is this not the same trickle down mantra that has been pushed across developed countries for decades and has only widened the gap between rich and poor? In the US, where this line was pursued since the 80s, real wages for most Americans have stagnated while the top 20% have seen their wealth increase astronomically. Merely improving the regulatory and investment climate for a country does not magically benefit most citizens in a society -- thoughtful taxation is one to correct that.
twoodfin · 17h ago
The median American household has a >30% higher real income today than in 1985.
And that doesn’t account for demographic changes: Households are smaller on average than 40 years ago and there’s been a significant surge in the foreign-born population, mostly from much poorer origins.
Further, while the inflation calculation includes some hedonic adjustments, it’s really hard to capture the aggregate of the thousands of diffuse lifestyle benefits of living in 2025 v. 1985. Personally, I’d miss burritos.
myrmidon · 16h ago
Sure, but a median house cost 3.5 years of (median) income in 1985, nowadays its 6. It sure is nice being able to afford tons of foreign-built electronic trash, but affording a home seems more relevant and important to me and by that metric things got worse.
twoodfin · 15h ago
Now we’re moving from broad income & wealth to a very specific good in housing.
Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions.
This is belatedly being recognized and addressed in a shockingly bipartisan manner for now.
But also worth noting that the median home today is much larger and nicer than in 1985. Interest rates have (even today) been low enough—and incomes high enough—that ownership rates for these bigger, better homes are a few ticks higher than 40 years ago, as well.
myrmidon · 14h ago
Don't get me wrong, I'm not even disputing your main point-- I do agree that things have gotten better for the average American over the last decades.
Though I still think that longer-term inflation adjustment (CPI based comparisons even more so) always warrant a critical look.
> Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions.
I'm not buying the whole "regulation is to blame for rising housing costs" at all. If it was, I would expect countless "housing havens": states/nations in the US/Europe with "correct regulation" and housing costs at least staying stable over the last decades: But I don't see those.
My take on this is that this is mainly a consequence of the Baumol effect; local-labor intensive products like houses, childcare, education suffer from strongly rising costs because wages increased generally; regulation cant/wont magically solve this.
But if you just compare wage development itself, things look much better over time than they actually are for the average person, because you omit this effect from your consideration by design.
So things actually improved much less for the average American than a first glance at your numbers suggests.
twoodfin · 12h ago
This chart I stumbled across yesterday at least matches my anecdotal understanding that, yes, there are places like Houston and Minneapolis where in fact what you’re looking for has happened, because supply has been allowed to rise to meet growing demand:
> Now we’re moving from broad income & wealth to a very specific good in housing.
Housing is pretty much the cornerstone of American society. It's the one thing the middle class has done to increase their wealth and security. It's not just a specific good - it's the poster-child of the American dream and American prosperity.
twoodfin · 6h ago
If you want to build your entire assessment of economic progress around the ratio of home prices to incomes, well, OK.
Obviously policymakers haven’t over-focused on that number, and to some extent that’s a big mistake that is hopefully now being corrected.
But it’s one number, and doesn’t even tell the story of housing affordability, let alone the state of the economy for the median citizen.
qeternity · 16h ago
This is not a result of income inequality. This is a result of measures intended to reduce income inequality, which of course almost universally make things worse.
The other lending that the US (and Western governments in general) massively subsidize is education. And look at what has happened to the cost of housing and education. They have both massively exceeded general rates of inflation.
The cure is worse than the disease.
bestouff · 18h ago
> Income inequality is a good thing
That's your opinion. I fail to see how the differences were have today make sense and could be good for the society.
newsclues · 18h ago
Take the global wealth, divide it by the population, and redistribute it evenly.
Suddenly a lot of productive assets are no longer working.
Do you think capital allocation will be better when it's being done by everyone?
johnecheck · 17h ago
Bad take. Obviously if you you cut a factory into a million pieces and hand them out, you've lost value.
Investment tools cover all your concerns here. (Hopefully paired with a regulatory framework that prevents scams (looking at you, crypto))
Jensson · 12h ago
> Investment tools cover all your concerns here.
Nope, since you decided that investments can't make you richer investment tools no longer works.
And if investments are allowed to make you richer you didn't solve wealth inequality, because most people will just spend and consume rather than invest in anything.
samiv · 17h ago
This is wrong.
The rich people are stiffling the economy and displacing a large swath of working people. This process will hollow out the economy and produce more poverty and more inequality.
For the wealthy people there are two ways to invest.
1. Invest in passive assets such as stock market, property, valuable items, gold etc.
2. Invest in new businesses.
What are they doing? Mostly 2. How do we know. Simple.. look at the real economies. The western economies are growing (barely) at around 1-2% per year. The wealthy (since pandemic) grow their wealth at 10-20% per year. Where is this growth coming from? Certainly not from new business development since the real economy is not growing. The only way it can come is by taking a bigger slice of the pie, i.e. displacing middle class by subsuming their wealth.
This is harmful to the economy and will lead to the collapse of the economy and the society.
GardenLetter27 · 17h ago
You are right that the problem is a lack of economic growth - and that is what must be addressed, e.g. by removing bureaucracy and harmful regulations.
Robert Zubrin's The Case For Nukes is a great book on this.
samiv · 17h ago
The bureaucracy and the regulation isn't the problem by and large.
If anything it just needs to be easier and more automated to navigate the regulation when setting up business.
I know that the capitalist really like to sing this song. "It's the regulation, just let us self regulate and we'll create so and so many jobs".
Yeah, just like they did in the 1800 hundreds. Abysmal working conditions, minimum pay, toxic waste dumping etc. etc.
Or how the banking sector has managed to blow up several times since "deregulation" in the -80s by Reagan. 2008 market crash anyone?
The problem is that there's less and less purchasing power. Even if you have a proven business case such as hairdressing or serving food your most important asset is a customer base who have money.
You start by putting money in the pockets of the people and suddenly all kinds of lucrative markets and business ideas become viable.
The regulation is needed to protect the society from all the harmful shorcuts that businesses would otherwise take. Such as poisonous food, toxic waste dumping, ponzi schemes and insider trading etc. etc.
bluecalm · 17h ago
>>The western economies are growing (barely) at around 1-2% per year. The wealthy (since pandemic) grow their wealth at 10-20% per year.
Imagine you are in Germany:
-you have a business that has modest profitability of 4% per year (profit/company value)
-your economy grows 1-2% per year
-your inflation is 2% per year
How much do you expect the company value to increase after a year? Right, it's 8 % - exactly how much DAX (German stock index) grew on average during last 10 years.
usrusr · 15h ago
We've seen effectively zero interest rates for longer than many can remember. If there's no investment it's not because of lack of capital but because of lack of optimism. When generationally rich do invest in something outside the safe game of landlordship (which is primarily defined by limited supply making chart lines point northeast just by merit of more capital joining the game) it's usually not because of n aeed or greed, but because they already have so much invested in the easy game that they feel a desire to risk some tiny fraction of it in something more exciting.
exiguus · 16h ago
Actually, there are plans to tax international investments at 1% [1] (i.e., making more money with money). This will basically stop bets on currency or commodities on the stock exchanges. Besides that, inheritance and wealth tax are also interesting fields for a regulation.
Investment can be rentseeking.
I can invest in buying a house to rent out raising housing prices and preventing someone else from owning it for themselves.
johnecheck · 17h ago
I don't think some heavy handed communist system should try to abolish all inequality either.
But does that mean income inequality is good?
Maybe in moderation, but I feel it's pretty obviously harmful when taken to an extreme. Policies to reverse the trend of concentrating wealth and power are worth considering.
aredox · 18h ago
They invest and then they extract ridiculous rents from their investments - leading to widespread burnout, perfectly fine businesses being closed and employees being laid off because they don't give double-digit returns, empty shop spaces because it would diminish their value to lower the rent, excessive appartement rents, etc.
And an economy oriented only along the wishes of the super-rich.
Money is the way you "vote" into the economy, and the more money is in the hands of a few, the less the economy actually adresses the needs of the many.
GardenLetter27 · 17h ago
The housing crisis isn't due to investment, but onerous government regulation that makes it near impossible to build - decades-long planning processes, dozens of consultations (local public, and NGOs, etc.)
That's exactly what I mean by removing bureaucratic processes to unlock investment.
But the "many" can learn useful skills and innovate to also make a lot of money. Everyone should be able to start a business easily - without excessive capital requirements or expensive notaries. STEM education should be free and widely available (or with very low interest loans if we let the loan interest be decided per subject, per student grades, etc.)
cloverich · 16h ago
Investment in sfh definitely plays a major role. It's not an either or situation. Build more houses. Make SFH investment homes unprofitable. Both will increase the homes on the market, lowering prices.
bluecalm · 17h ago
>> perfectly fine businesses being closed and employees being laid off because they don't give double-digit returns
Sounds like an opportunity to me.
>>empty shop spaces because it would diminish their value to lower the rent
Sounds like a problem land value tax solves - it should cost you to hold land ad if you can't pay you should give it up so others can make use of it.
>> excessive appartement rents
Sounds like land value tax + removing bureaucracy around building should solve that.
>>And an economy oriented only along the wishes of the super-rich.
I am not sure why you think anything in EU is along wishes of super-rich. It seems to me it's to the wishes of political cronies. I can guarantee you that "super-rich" would structure it differently.
>>Money is the way you "vote" into the economy, and the more money is in the hands of a few, the less the economy actually adresses the needs of the many.
And yet populist parties introducing anti-business policies win all the time.
It's true our parliamentary systems are terrible and undemocratic but it's not because super rich, at least not in EU.
tamat · 18h ago
so you want to help the rich so they can be richer...
tsimionescu · 18h ago
> The super-rich don't stay rich by just sitting on their money, they invest it.
Yes, mostly in the pockets of politicians who make sure to keep them super-rich.
This is why wealth inequality is a disaster: it allows the super-rich to control entire countries and keep themselves and their families rich and powerful.
Any kind of economic measure that still permits billionaires to exist is not going to address this simple fundamental problem. It's at best lipstick on the pig, not a long term solution to anything.
bluecalm · 17h ago
Politicians are cheap. You don't have to be super-rich to buy them.
Corrupt undemocratic parliamentary systems we have in EU are a huge problem but getting rid of super rich won't solve them.
Rygian · 17h ago
> getting rid of bureaucracy and red tape
90% of bureaucracy and red tape are Chesterton Fences that exist for a reason.
Remove those fences while being clear and transparent about who they protect and how they will be exposed.
Be aggressive about the remaining 10%.
And good luck telling which is which.
Hikikomori · 18h ago
Trickle down has never worked.
abenga · 17h ago
Any day now.
or
We are not trying it hard enough.
alpaccount · 15h ago
I've replied to a comment with this but I'll leave it here.
Reducing inequality in Brazil (even a tiny amount) is a DEAD SIMPLE problem that is not in any way related to the government taking more money from people (rich or poor), but, rather, in taking LESS money:
> The collection of federal taxes on the reserve base, shows that of the amount collected by the IRS of Brazil, the majority of the taxes are based on consumption, with approximately 53% on average of the funds raised by Revenue Federal Brazil and continue accounting for more than half of tax (52%) charged by the agency. This tax structure is even more perverse when we add the taxes collected at the state and municipal levels, which bring in the largest source of revenue. The tax burden on consumption is regressive. In Brazil those who earn up to twice the minimum wage spend 26% of their income to pay indirect taxes, while the tax burden for families with income higher than 30 times the minimum wage amounts to only 7%. Excessive taxation on consumption depresses demand directly affecting the economy, reducing the consumption of the middle and lower income families.
We're talking about a country where minimum wage is 260ish dollars a month, and a macbook costs TWICE what it costs in the US, where people make much more. We're structured in a way where only rich people have access to anything. You can tax said rich people more, but they'll just keep being the ones that can afford anything at all.
If Spain can get support from across the EU. And Brazil the same from BRICS then we could see change.
Best not to hold your breath though...
graemep · 18h ago
A lot of EU countries have enormous tax breaks for the rich.
There is a consensus that non-dom status (basically rich foreigners, very broadly defined, pay hardly any tax) in the UK needs to go. The main point made by people opposing this is that they can easily move to a number European (mostly EU) countries that have similar schemes and still only be a short flight away from the UK.
bluecalm · 17h ago
I don't understand why politicians call for taxing assets but fail to tax assets they control in their own country. Why are super rich non-doms a problem in UK? Oh, they own a lot of land and real estate? You can tax it right there.
Or maybe I do understand - it has nothing to do with trying to fix the problem but is just a populist agenda that sounds good and helps with winning elections.
graemep · 16h ago
Why should people living an a country not pay tax in that country? its a general principle that you pay tax on your income to the government of the country you live in.
If you regard progressive taxation as "populist", fine. I regard it as simple being fair.
To put it another way, why should there be a special exemption so super-rich foreigners do not have to pay tax?
> To put it another way, why should there be a special exemption so super-rich foreigners do not have to pay tax?
I do not know what you are referring to here. The non-dom issue is primarily about taxing income.
bluecalm · 16h ago
>>Why should people living an a country not pay tax in that country? its a general principle that you pay tax on your income to the government of the country you live in.
Terrible principle. You should pay proportionally to what you use/spend in the country. These days it's very difficult to say who lives where, especially in case of rich people. If someone spends 200 days in one country and 160 in another it's unfair to the latter country that 100% of the tax is paid in the first one. If someone spend their time across 3 countries current solutions don't make any sense at all.
That's why it makes sense to tax assets locally.
The concept of "tax residency" belonging to one country is just a terrible idea. It's the reason a lot of those abusive schemes exists. The way is to get rid of that principle and substitute it with something that is not easy to get around like taxing assets under your control.
>>To put it another way, why should there be a special exemption so super-rich foreigners do not have to pay tax?
There shouldn't be. They should pay on assets they use in your country. If they have income there you can tax income issuer (like payroll tax).
There is no need to tax income from abroad - let other countries who actually control assets that produce that income tax them.
graemep · 13h ago
you are still arguing for a special exemption for the rich - or do you think that anyone who invests abroad should be exempt on tax on income from those assets? It would also create more loopholes. It would also create an inceniltive to invest abroad.
A shift from taxing income to taxing assets instead might work. A wealth tax instead but its not easy. Land can be valued, so can publicly traded investments. What about ownership of privately held businesses or works of art? Where are yachts and aircraft taxed?
bluecalm · 10h ago
There shouldn't be tax on income. There should be tax on assets. Don't tax income from land, tax land value.
This also avoids a loophole that buying land and doing nothing on it means you pay very little taxes while patiently waiting for its value to increase because of other people who do productive things nearby
>>or do you think that anyone who invests abroad should be exempt on tax on income from those assets
Of course, those should be taxed where they are located. Much easier to tax companies where they operate than elusive "income" of increasing stock value.
>>What about ownership of privately held businesse
You don't need to tax wealth related to business. Your can make operating businesses more expensive by introducing taxes and fees on it and then not tax any income it still generates.
EU politicians intuitively know that's the way when talking about digital tax. Just tax "IP protection" as % of revenue in your country for example. Then you will get a share of Apple or Google no matter where it's registered as long as it has revenue in your country.
It's way easier to make Google generate 20% less profit than to tax 20% on its profits. It's also very easy to tax it where it's operates and not care about creative accounting tricks it uses to show less profit.
The current system means people living on Cyprus pay less tax on Google value than Americans. It's just a completely stupid system that breeds abuse.
v5v3 · 17h ago
People in the UK and other countries are heavily taxed at source. And they see it on their monthly wage slip.
And many people don't do a job they love, they do it as they need the money, and are miserable.
The 'look at at that group who are not paying their share and the party in charge is responsible , but we will change it if you vote for us' is one of the easiest plays to get votes and volunteers campaigning for you.
raverbashing · 18h ago
BRICS is just an acronym, it is void of any meaningful significance other than that.
Edit: "oh but it's an actual organization" yeah with still very little significance between pretending it's anything but a convenient proxy for the bigger members
diggan · 18h ago
> BRICS is just an acronym, it is void of any meaningful significance other than that.
I think your understanding of BRICS might be slightly outdated, did you read about the last time in the late 90s or something? It's beyond just an acronym today, with institutions actively involved, new initiatives and more.
gchamonlive · 18h ago
It's an actual organization actually, founded in 2009. They hold meetings globally, the next one set to be held here in Brazil in 4 days. Since it's an organizational to align economic goals among other topics, it's not unthinkable to have these kinds of discussions about progressive taxing. We can question the real effectiveness of BRICS for actually taxing the rich more extensively, but it is surely much more than an acronym.
v5v3 · 17h ago
Yes. It is the 2nd most powerful alliance after the USA/Canada/Australia/Europe one.
India seem a flaky member of the Brics, but rest seem very committed.
raverbashing · 18h ago
Yes. An organization that lacks any meaningful action besides bureaucratic merry-go-around
It's a puppet show essentially
gchamonlive · 17h ago
Completely orthogonal to it being an organisation and not an acronym
No comments yet
impossiblefork · 18h ago
I don't think, just an acronym, but my impression is that the only thing BRICS or BRICS+ agree on and are actively co-operating to achieve is collectively getting off the dollar and ending the effects of the so-called exorbitant privilege on themselves.
owebmaster · 17h ago
If that is the "only" thing, it is quite the ambitious goal
impossiblefork · 12h ago
Maybe, but should it really be hard?
Either one gets rid of the oil trade-- which I think is quite feasible, then the need to acquire dollars to buy these products goes away, so there's nothing more needed, or one negotiates something with one of the many countries which either have or could acquire the ability to produce oil where one bypasses the dollar trade.
Maybe, if they didn't have Russia in the group and had talked to more people about the sanctions, something like 'we need this, and the alternative is Russia-- can't you be flexible and not sanction Venezuela', they could have even used Venezuela.
rebanevapustus · 18h ago
> Brazil
One of the most violently unequal countries on the planet. Very proficient however in virtue signalling.
Propelloni · 17h ago
Like I said elsewhere, virtue signaling is moving the Overton window. It works pretty well for the alt-right, so we know it is working.
Reading the press release shows me that Spain and Brazil are aware that this is a hard problem. They are especially aware that a nation, or two nations, alone cannot solve it, thus they suggest a "global registry", which is basically a "abolish tax havens" again. Let's see how far we get this time, I wish them all the best.
octo888 · 18h ago
Also let's not forget Spain's endless corruption scandals. You aren't going to tax the people giving you money
diggan · 18h ago
> You aren't going to tax the people giving you money
Lol, why are we still being taxed then?
We do have endless corruption scandals though, that part is pretty accurate, but they still tax us like there is no tomorrow. At least we have pretty good healthcare, so it isn't all doom and gloom like the "news" want us to believe.
skirge · 18h ago
health insurance contribution is considered as tax in Spain?
owebmaster · 17h ago
Taxing wealth-extracting foreign corporations is a way to have resources to fix the inequality.
mvid · 18h ago
“The problem isn’t solved, so how dare they try to solve it”
pennaMan · 18h ago
They are not trying to solve it. They are pretending to solve it by masking the underlying issue and making things worse in the proccess.
actionfromafar · 18h ago
I don't have high hopes it will solve anything, but I'm also not sold on it making anything significantly worse.
exe34 · 18h ago
Worse for whom? If it's for people richer than me, I'm okay with it.
octo888 · 18h ago
That is completely obviously not what they meant
carlosjobim · 18h ago
Everybody who is richer than me are bourgeois scum and should have all their property confiscated.
Everybody who is poorer than me are lazy bums and shouldn't get any more help.
cucubeleza · 17h ago
Brazilian government is dumb as hell, just tax everything and waste money with idiot things and a lot of corruption, tax the rich will make then flee to another country like Arab Emirates or USA, so more money for then, less for the country, extremely common L of the Workers Party
mafuy · 16h ago
So what do you propose instead, since you seem to figured it all out?
cucubeleza · 16h ago
cut unnecessary spending (Brazil has TONS of it), cut taxes, cut bureaucracies and not hide inflation like they do it's a good start. And you, what's your propose? You also thing that tax rich people will make the other side richer?
alpaccount · 16h ago
> cut taxes
Yep, this is absolutely correct. I don't see how people don't realize this, the simplest way to make brazil less unequal is to REDUCE tax!
From wiki:
> The collection of federal taxes on the reserve base, shows that of the amount collected by the IRS of Brazil, the majority of the taxes are based on consumption, with approximately 53% on average of the funds raised by Revenue Federal Brazil and continue accounting for more than half of tax (52%) charged by the agency. This tax structure is even more perverse when we add the taxes collected at the state and municipal levels, which bring in the largest source of revenue. The tax burden on consumption is regressive. In Brazil those who earn up to twice the minimum wage spend 26% of their income to pay indirect taxes, while the tax burden for families with income higher than 30 times the minimum wage amounts to only 7%. Excessive taxation on consumption depresses demand directly affecting the economy, reducing the consumption of the middle and lower income families.
Taxing the rich will solve nothing (and let's be honest, this government is not aiming nor has the capacity to enforce it). Something much simpler is just let people be able to consume things, by removing taxes and cutting spending (probably not even necessary given how much the state already takes from its people).
Super simple, but, as usual, we love to overcomplicate it and play the popularity game.
solstice · 16h ago
Trevor Noah had a good take on the absurdity of stocks and unrealised gains with their Schrödinger's-cat-like qualities: https://youtu.be/Gqlbn2nPO-A?t=84
throwawayb2025 · 16h ago
Forcing rich people to invest in low return area might be better strategy. If they know how to make money productive, they can make that area grow faster so that gdp can grow faster.
This will ensure rich people money grows at higher rate only if gdp grows.
Asking government to manage money is very in efficient.
thisIsAtest25 · 18h ago
How are they going to do this? If they increase the tax burden on people's salaries, they'll start working informally (I live in Brazil and currently see that people look for various ways to escape income tax, whether by opening a company or choosing not to register formally (and they're not rich, but the state considers them rich, even earning ~$32k per year)). If they force companies to pay, the tax burden will be diluted into products/services, falling on the poorest. The right path is to reduce the size of the state - these policies will only make life worse for the poor. In a world with scarce resources, this problem has no solution.
tsimionescu · 18h ago
The state is the solution to this type of problem. Reducing the size of the state only serves to take resources away from democratic control and into the hands of private entities.
alpaccount · 15h ago
The state is anything but the solution in the Brazilian scenery. Full of incompetent/ignorant people who only have ambitions of further enriching themselves.
The brightest minds leave the country or aren't able to reach its full potential.
We're talking about a country where the government has repeatedly been found of the largest corruptions schemes in human history.
thisIsAtest25 · 17h ago
In a perfect world without greed and corruption, I would agree with you. However, I live in Brazil, where the state is constitutionally mandated to provide all basic necessities (healthcare, education, etc.) and we have one of the highest tax rates in the world. Additionally, corruption here is absurd.
Despite having enormous budgets, the services the state provides are inadequate. Many people choose to sacrifice an additional portion of their income (on top of what they already pay in taxes) to access these services privately. Even with extensive social policies and taxes on virtually everything you do — salary, consumption, transfers, inheritance, literally everything — quality of life remains poor. High tax rates actually breaks development.
We must be cautious about supporting policies that tax the wealthy more heavily, because when the state considers someone earning $2,000 per month to be 'rich'—which already happens, as evidenced by the current income tax brackets (IRPF)—these measures won't improve anyone's life.
alpaccount · 15h ago
Absolutely spot on:
> Many people choose to sacrifice an additional portion of their income (on top of what they already pay in taxes) to access these services privately.
In Brazil you pay taxes which are supposed to grant you health care, education, safety. None of that happens, so you pay (again) for private school, healthcare, insurance and so on. Anyone that lives/lived there knows this.
logicchains · 17h ago
> Reducing the size of the state only serves to take resources away from democratic control and into the hands of private entities.
The state is just private individuals with a monopoly on violence. The incredible degree of corruption in Brazil wouldn't exist if people working for the state didn't have any special privileges.
ozgrakkurt · 16h ago
Why is it bad to tax based on wealth and not on income?
mathiaspoint · 13h ago
Crazy so many people jump to follow political ideas from Brazil given its track record with inequality.
owenizzhr · 11h ago
Yeah, socialism always works. Look how well the retribution of wealth did for the Soviet Union, Cuba, China, even Russia today.
Socialism isn't the answer.
If you take away the individual rewards of success you are awarded with "SUCK-N-EXCESS,"
Look at some successful societies: Japan, New Zealand, Germany. Not socialist. Success was rewarded and societies benefited.
mg794613 · 17h ago
We can see a lot of knee-jerk responses from people with Stockholm syndrome.
- No, the rich won't run away.
- No, the rich are not carrying the country.
- No, caring for another or a lesser fortunate, isn't communism.
It's weird I have to say it, but some really need to hear it.
HamsterDan · 16h ago
If the rich won't run away, then Spain and Brazil don't need global action. They could just jack up taxes on the rich in their own countries. And since you've now pinky sworn that the rich will stay and pay the extra taxes, it won't have any adverse effects domestically.
RweInNd2Dy4Us · 10h ago
Absolutely? Wealthy Must Be Accountable Regardless Super Rich Lifestyle, Generosity Spreads Hopefully With Help!!! Mankind Needs Sensible Solutions Rich Or Poorer, Taxes Finance Programs For All People Needy?
ffsm8 · 17h ago
Trump ain't gonna stand for that. No chance in hell this isn't getting derailed
bluecalm · 17h ago
Instead of calling for more surveillance, government overreach, and other communist wet dream fantasies like a global registry of wealth they could have started by fixing things in their own countries.
One good way would be to start taxing assets they control like land. Tax land value and suddenly there will be incentives to build more. Tax land value under big touristic resorts and use that revenue to fund local services instead of killing middle class with taxes on their productivity as they are currently doing.
Instead of complaining about rich people buying big houses and a lot of land around just tax that - that aligns incentives and makes presence of rich people profitable for local communities.
What they want to do instead though is first tax assets people have in other countries which don't influence them what so over and then if those people want to leave they cry foul as well - you will stay and you will like it - exactly as in communist Cuba.
>>There’s a real need to know who the beneficial owners are behind companies and legal structures used to conceal wealth,” said Mr. Gascón
Maybe there is, maybe there isn't. If you tax assets and get rid of corporate income tax replacing it with revenue based taxes (like a new digital tax idea or a tax on big super market chains) and a land value tax then it doesn't matter who is behind what as the local entity has to pay anyway.
If you build an attractive country companies and people will pay you to live and do business there. Why are you so obsessed on their total wealth? Is it maybe more about control and power than paying your "fair share"?
The thing is they don't want fair taxation. They want to take wealth of productive people and give to their ever increasing number of cronies. This kind of toxic thinking geared towards punishing productivity and making sure no one gets ahead too far is a cancer in Europe and imo major reason old EU countries stagnate instead of growing.
newsclues · 18h ago
A billionaire is 1000x wealth of a millionaire.
A millionaire is 1000x the wealth as someone with a thousand bucks.
As someone closer to a net worth closer to $1000, it sure is funny watching the rich millionaires complain about the rich billionaires.
I bet the millionaires don't think the wealth transfers and confiscation they support for the billionaires, will ever be applied to them.
s_dev · 17h ago
>A millionaire is 100x the wealth as someone with a thousand bucks.
Run your math again through a calculator.
newsclues · 17h ago
not hitting a key on the keyboard isn't an error in calculating.
Did you not understand the point being communicated?
s_dev · 17h ago
>not hitting a key on the keyboard isn't an error in calculating.
It really is an error in calculating. That's the great thing about math, it doesn't care how you 'feel' or what you 'wanted to express'.
You need to update your comment and the error will be gone and not try to argue semantics.
guappa · 18h ago
> A millionaire is 100x the wealth as someone with a thousand bucks.
You're off by an order of magnitude.
newsclues · 17h ago
no, it was a typing error
WinstonSmith84 · 17h ago
Maybe these economies shall try to attract the wealthy before trying to tax them ... Or is that so that because of past fiscal policies, the wealthy are gone and are now missing out to the economy? :-)
The reality is that many (other) countries understand this and attract these wealthy people who contribute to their own economy - because wealthy people are more than people with a large bank account, it's usually entrepreneurs who will hire local workforce for their business, buy real estate, etc.
If one knows Brazil and especially Spain, the other reality is that this initiative is certainly driven by a socialist-populist agenda, nothing to see here.
Either way, this initiative is just a show, and sure to fail for many reasons.
ymgch · 17h ago
Brazil lacks the moral authority to promote any global action. End.
Think about it for a minute. The rich people hoard all the resources, financial assets, means of production and in the competition for resources they will (and are doing so) displace everyone else in the economy (and really from society also).
This means that those who are displaced have no means to participate in the economy. And not only that but also they will be pushed to the fringes of the society and exists in slum conditions. This will stiff the economy and hollow it out.
Let's say for arguments sake that the government taxes X hundred of millions of $ from the bezos/musks/gates/etc. and put that into the economy by
All that money will immediately go back into the economy stimulating all kinds of economic activity. And essentially two weeks later that same X hundred million is back in the bank account of bezos/musk/gates and it can be taxed again!By letting the uber rich hoard the wealth that wealth is essentially away from the economy providing very little economic activity.
In economy this is known as the "high propensity to spend". The "poor" (i.e. working/middle class people) have high propensity to spend, the rich have low propensity to spend.
Tax the wealth, not the work!
This has been done before and it can be done again!
https://en.wikipedia.org/wiki/New_Deal
You could of course tax the non-work wealth. Most of that is home ownership, few home owners consider themselves rich.
Why is there a limited supply if people need places to rent? Governmental regulation, financial regulation (e.g. Freddie Mac & Fanny Mae), zoning laws, overregulation on building that eats the margins and the with low supply the most profitable market is for "luxury" apartments with wider margins.
So if you want cheaper rent it's not that the landlord is greedy, it's that his greed can thrive because the market forces aren't working.
As Adam smith in 1776 wrote: "It is not from the benevolence of the butcher, the brewer, or the baker, that we expect our dinner, but from their regard to their own interest."
e.g. it's not from the benevolence of the landlord that we expect low prices, but from their regard of their own interest to rent the property that competes with many other properties available to rent.
If someone has wealth in non-liquid forms, they still have wealth.
Addressing inequality is going to mean governments and tax authorities take a broader view of wealth and methods to tax it.
There needs to be a new consensus that if wealth exceeds a certain level, it will be aggressively traced and progressively taxed.
Whether that wealth is in the form of currency, equity, corporate ownership, political power, or any of the other forms.
Because of the pyramidal distribution, it'd absolutely be feasible to say "If you have a net worth about USD$1b, you have a dedicated tax authority team who combs over your assets and calculate the minimum you should owe, using generally accepted accounting standards. Your choice how you choose to pay that."
And if they don't want to -- fine, your ability to travel in the first world is recinced. Have fun being rich, but you're not going to do it in Monaco.
The problem I raise is that it largely is someone's jobs. If you want to tax the companies' overall value, part of the income from the work the companies do is going to go to the taxman. That money isn't gathering in a pile, unspent, today. So some employees are going to get fired or a pay cut, as a compensating cost-cutting measure. Which is fine so long as you understand that that's where the money is coming from. But you don't, right?
Society shouldn't care if Bezos' wealth is increasing because the value of Amazon is increasing or because he struck gold on his property: the issue is that he and others own an outsized share of global wealth.
The answer is increasing how progressive tax rates are, especially at the ultra high-end.
If Bezos or other post-unicorn founders have to decrease their ownership stakes in "their" companies to pay their tax bills, that doesn't decrease the competitiveness of the businesses.
It just decreases their ownership.
Pretending that decreasing the wealth of the rich is incompatible with efficient business is a red herring used to justify individual control. Businesses can still run and people can be employed: individuals just won't have as much exclusive control over them.
And before the 'Think of small founders!' fig leave gets trotted out to cover obscene wealth, we're talking about T500-scale companies that are well past that size, and whose market distortion arguably threatens small founders much more. (Remember 'Be the next ____' instead of 'Be bought by the current ____'?)
It won't. Richest people in the world are exceedingly wealth, but they're not that wealthy. I'm not suggesting that they shouldn't be taxed, they should, and much harder than is currently the case. We should move to remove the loop holes used and abused to make people like Bezos appear poor, in the eyes of the tax authorities, but it won't move much in terms of monetary value, because they're not that wealthy.
Let's tax Zuckerberg half of his wealth, that's roughly 2% of the US budget. That's a lot, but you can only do that once, maybe twice. You can certainly tax the wealthiest enough to fund quite a bit and if you pick the right things you can do a lot of good. It's just not enough to reshape society, which seems to be what most think would happen.
What I see as the biggest issue is the amount of societal damage these people are willing to do to amass their fortunes. I don't even care that Bezos is worth $250 billon, if he didn't exploit workers and deliberately destroys other business to accumulate that wealth. Same with Zuckerberg, he can be as rich as he likes, but he can't build that wealth of spying on users and generally being a dick. Musk... He can build all the cars and rockets he like, but stop undermining democracy through financial means.
Taxing billionaires hard won't stop their bad behaviour.
The money doesn't disappear. Now the problem is (in the context of United States) that the number #1 and #2 creditors are People's Republic of China and Japan. So the US cannot tax those entities.
But they can tax domestic creditors and wealthy individuals.
"Let's tax Zuckerberg half of his wealth, that's roughly 2% of the US budget. That's a lot, but you can only do that once, maybe twice. You can certainly tax the wealthiest enough to fund quite a bit and if you pick the right things you can do a lot of good. It's just not enough to reshape society, which seems to be what most think would happen."
No, the point is that you can do it over and over again.
Once you put that money into the economy it will flow all around it and most of the money will end up in the same place again. I.e in the bank account of Zuckerberg and it can be taxed again.
It's only real in the sense that they can use it as securities for loans or purchasing other assets. I'm not an economist, but it sounds like that would slow down the wealth generation of the riches people, and that would mean less taxable wealth next year.
You may be right. I still think address the increasingly egotistic and damaging behaviour would be better.
If not by taxes, then how? Social pressure doesn't seem like it's working anymore, because individuals could just ignore that and still proceed like everything is normal. Genuinely curious about alternative solutions that doesn't involve taxation, since everyone seems to be so tax-avoidant.
In the case of companies like Amazon, force them to negotiate with unions.
How many Meta or Amazon size companies do you think the US government would need to shutdown for the industry to take notice? My guess is about two. Just close it down and let the shareholders take the lose. That way shareholders of other companies will insist that rules are followed. The government can sell of the assets and make some money that way.
So say Musk gets convicted of "egotistic behavior", however that works, and he's hit with an extremely high fine. How is he supposed to be able to pay that fine without having to "offload a crazy amount of assets, including stocks", which according to you would be the problem?
Seems while the approaches are different, you'd still be in the same boat as if it was just taxed from the beginning, except you don't involve the judicial.
Or he's welcome to borrow against his own assets and pay in cash.
Money is not value, it's a proxy for value. By taxing capital and using it on handouts, you're essentially burning that value; it's like a farmer eating all their seeds rather than saving some for the next year's crop.
If you tax the money from Zuckerber and give it out as "handouts" as you say, what do you think happens to the money?
You think it just disappears?
What happens that every $ that is given out to people who need it will use the money to buy things they need, their food, energy, their utilities etc. This consumption and the flow of money is exactly what lubricates the economic machinery and creates new growth.
When people have money to spend there are new things and services to build and sell!
If you deprive people from money, how do you create business when nobody can afford to buy whatever it is that you're making?
Henry Ford already knew this that if people don't have money to buy his cars he has no business!
Rich people don't "hoard" the means of production, they create it. Confiscatory policies lead to less business creation; if Gates, Musk, Bezos, Zuckerberg and Page had not had the wealth to create the businesses that made them billionaires, those businesses wouldn't exist, the jobs and products they create wouldn't exist. Europe demonstrates this empirically with its complete lack of any big tech companies, a result of its hostile policies and cultural attitudes to entrepreneurship.
"Rich people don't "hoard" the means of production, they create it."
Actually they do. Look at the GDP growth rates across western countries. 1-2%.
The wealthy people (since pandemic) have grown their wealth 10-20%. Where did that come from if the GDP didn't grow.
The only way they were able to do this was by literally hoarding wealth and by buying assets that already exist and by doing so displacing other people with less assets.
If someone owns all the houses but does not rent them out at a reasonable cost, so people have to sleep on the street while the house stays empty, then I will call that hoarding. You don't really address that core problem.
Bullshit. They would have all created those businesses as long as their personal financial situation improved through them.
Arguing that it takes 0.1% wealth payoffs to incentivize business creation is false.
Someone would do it for anything greater than average, if there were global minimums, and a tax structure that allowed corporations to retain capital was used.
Heavy redistribution of wealth is already in place and it's not making things better.
You're right, because the distribution is removing large groups of people from the economy.
Just for reference, this has been done before and it produced possibly one of the best economies (at the time) and it was very social democrat. This was the United States after the so called "New Deal".
https://en.wikipedia.org/wiki/New_Deal
And just to make it crystal clear, we're not talking about taxing working people. We're talking about taxing the obscenely wealthy people who just sit on massive amounts of wealth, whether it's stocks or property or yachts or mansions or gold and jewelry. You know the > 10-1000x millionairs
Top 1% paying 30% of taxes sounds like a really rough deal for them at first, but if those 1%ers already own over 30% of your country in the first place (which is the case in the US), then thats barely their "fair share", and you are not really achieveing any redistribution at all.
How can you be certain that the problem is "progressive taxation is not working" instead of "taxation does not help against wealth inequality because it is actually barely progressive"?
I think another big problem is that this extremely uneven distribution of wealth is a basic democratic problem. The reason we have states is, among other things, to put the allocation of our finite resources under democratic control. If the majority of those resources are on private hands, then states get less control and our votes have less power.
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Many rich people with heads should consider that the current situation is making things better than the next version of the French Revolution.
The French Revolution was a revolution against the French government, and its high tax policies.
Article 9 of the august decree – Fiscal privileges in the payment of taxes were abolished forever. Taxes were to be collected from all the citizens, in exactly the same manner, and plans were to be considered to set up a new method of tax collection. [0]
[0] https://en.wikipedia.org/wiki/Abolition_of_feudalism_in_Fran...
Really? Universal education and healthcare don't make things better?
The existence (and prevalence) of food delivery work alone is a depressing portent in my view: If delivering food for objectively shitty pay is still a viable option for a lot of people, that signals to me that human labor has become borderline worthless (even in a wealthy/developed environment).
That makes the "american dream" (=> start from nothing, do a good job, become wealthy) increasingly less realistic.
I'm also afraid that this (preventing wealth inequality from getting out-of-control) might be a "practically unsolvable" problem for democracies in general (just like managing housing and public pensions): It is too easy to "sabotage" democratic progress for the negatively affected minority (and that minority is exceedingly powerful/well-positioned, too).
Automation is great and has made things undeniably better. In the 1800s, 30% of the US GDP was tree cutting. https://x.com/AlecStapp/status/1939912893102760063 Before automation, nearly everyone was involved with agriculture. Today is much better.
Maybe there is an easy way to have our cake and eat it, too (like consistent wealth taxation like the article suggests), but I'm doubtful.
In the past, basically every form of investment used to involve human labor to some degree-- meaning that every rich industrial magnate also automatically created opportunities for zero-net-worth workers/builders/employees.
But when your big investments just become server racks and industrial robots, then you no longer have this balancing mechanism, and you probably need to do something to prevent wealth concentration without bounds (and to guarantee opportunities for "worthless" individuals).
But note that this is a potential, not an inevitable outcome. This outcome is more likely because there is a positive feedback loop at play here: if you can somehow force people who generate wealth with their labor to surrender part of that wealth to you, you can use those resources to improve your ability to forcibly exploit others (e.g. by hiring more armed goons in a primitive society, or by bribing politicians who pass laws that are ultimately enforced by "public servant" goons in a more advanced society like ours). Simply put, wealth can buy power, and the resulting increase in power disparity can be used to extract more wealth from the people producing it. Thus the natural trend of technological advancement is towards income inequality ... but a society can still go against the current, it just takes a lot more effort on behalf of the citizenry.
Work is not valued, wealth is.
You can't simply reduce your consumption, because you are reliant on everyone doing the same thing.
Rent controls don't help because that means housing simply has to be rationed in another way which is typically worse.
The solution is to increase housing supply in high demand areas.
It'd need to be strictly tied with a viable building method, to limit NIMBY problems, but would accomplish the goal.
If rent for class Y housing is $A, and the target price is a lesser $B, then tax the $A-$B difference at a high rate, with 100% of the tax proceeds being used to directly fund new class Y housing creation.
Bigger delta = more funding for new construcion
in 1983 a single "share" in the S&P, or a single unit of American business, cost $120, about 13 hours work at the median wage then of about $9/hr.
Today you would have work for about 200 hours at the median wage of $30/hr to buy the same single share ($6200)
Companies have ballooned in value relative to median earnings. And top 10%ile earnings too for that matter.
You are mistaken. Currently, the higher income you have here, the higher tax rate you have, where the highest tax rate on income sits at 47%, which you get hit by when your income is above 300K/year. People between 60K and 300K sits at 45%.
And then there are regional differences, someone in Andalucía don't pay the same amount of taxes as someone who lives in Catalunya for example, where the top tax rate is 50%.
Even taking into account other taxes we have, you still end up paying more in taxes the more you earn, unless you start engaging in schemes to lessen your tax burden, obviously. Although the social security is capped, so it does increase slower once you go beyond the cap, but it doesn't start regressing which your comment hinted at.
Edit: important to note that the tax rates are all marginal tax rates, maybe that was a bit unclear.
If/once you reach that point (+60K/year), you already live a above-average life, why not share some of that with others who aren't as good/lucky as yourself? Seems like a no-brainer to me, but I might be too European to really grasp the problem.
I wonder, have there been any studies/considerations for making rent tax-deductible for individuals? That would address this problem for example. There probably is a good reason for not doing it, but I wonder what it is.
Barcelona (and Madrid) are extreme examples though, not "average" by most measures. Take a look at houses/apartments just 30 minutes outside of Barcelona (not too familiar with Madrid) and it's way easier to find affordable places, and it's easy enough to get into the city with trains and buses.
Even if you count the greater metropolitan area (where I'm part of the Barcelona one myself, although I live 30 minutes away from the city), you only get up ~20% of the population living in either Madrid or Barcelona. Even then I'd say we're in minority compared to the people who don't live in either those "metropolitan" areas.
It's not hard for tech workers to start hitting top rates similar or higher than that in the US if you're in a high tax state, but at 60k you're more likely to top out at 39%, but because the curve is so steep the average (actual percentage of income) tax is only something like 22%. That includes extras like social security and Medicare.
Living in a state without any income tax will further lower those numbers.
Sure, but how well are those without income supported in those states? Can they live a comfortable life even if they're unable to work? Can they go to the hospital and do life-saving surgeries without being in debt for the rest of their lives? Are there enough libraries and beyond-school activities everyone could use for free, regardless of income?
Once you hit those rates, I feel like you should stop thinking about how you can pay less in taxes, and figure out how you can support everyone else around you, otherwise what's the point of earning all that money in the first place?
No income at all generally means you're eligible for either Medicaid or Medicare, or COBRA coverage if you're recently unemployed.
The worst off are people who have low paying jobs- they make too much for benefits (typically 138% or more of the federal poverty level) but not enough to afford employer-sponsored or private-market insurance.
Taxes are the fees you pay for living in a nice society
Fun fact, Ireland has one of the most unequal distributions of income in the EU pre transfers/taxation, and one of the most equal distributions of income after taxes and transfers.
So this stuff sortof works.
More generally, taxation of wealth is generally a good idea, but it needs to be over as many countries as possible to avoid people just moving.
You can accomplish most of the same goals by taxing property, as that's most of global wealth and it's harder to move.
You also need to handle the extreme top of the distribution through some kind of taxation on stocks/investments but property tax gets you most of the way there.
Ignoring smaller tax brackets, income in the bracket of USD 48,500 to 102,900 is taxed at 41% with any higher earnings taxed at 45% [0].
On top of that we have 15% VAT on essentially everything we buy. Also, any "luxury" imported item, including all electronics, also has an additional substantial import tax on top of that, e.g. an iPhone is something like 9%.
It gets even worse though, if I want decent quality health care, education and security I have to pay for all of those privately. Between my wife and 2 small kids, we pay at least USD 10,200 extra each year, and that's not including occupational, speech and physio therapy my now 5-year old, but prematurely born, is needing at the moment.
An "advantage" for someone like me though is that a very large portion of our population is very poorly educated and thus cannot demand much of a salary, meaning that the domestic cleaner/child minder I employ is very affordable.
Just the other day someone pointed out that the middle class here might not get much for their taxes (as we're essentially subsidizing the majority who are poor such that they tend to pay nothing except VAT) but on the flip side we wouldn't have domestic workers and gardeners be as affordable.
[0]: https://www.sars.gov.za/tax-rates/income-tax/rates-of-tax-fo...
Most people don't understand how taxation works; in many places, there is progressive tax, which means you are not taxed at 45% or 50% or whatever, but only on the portions you make above certain thresholds.
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In California someone on the median personal income of about $50k pays 18% income tax. In Spain (Madrid) someone on the median income of about €23k pays 19% income tax.
Double the median income and it's 27% in California and 27% in Spain
Four times median income and 33% California, 34% Spain
That's a matter of perspective, isn't it? :)
> No, it's not "can help"
I could employ similar tax-avoidance schemes as other rich people regularly do, but chose not to. I could live outside the country for 51% of the year and also avoid taxes that way, but also chose not to.
Ultimately, you do have a choice on how to approach things, and how you see them. You see them as "The nanny-state is taking what's rightfully yours" then yeah, that's the perspective you have, but it's not a ground-truth and it isn't the only perspective.
What seems to indicate I didn't like where I currently live? Not sure why I'd want to live in something similar to the USSR, that sounds all-around bad. Did I misunderstand something or are you misunderstanding what I've been writing?
Frankly, I don't even know what my gross earnings would be, simply because the number is irrelevant and only makes a bad mood. All I consider is net income. This way, I dont have to be sour about taxes....
Then my name must be Nobody.
This is basically inviting your best and brightest to move to the US and other low tax countries.
Assuming your money comes via income and you are not doing anything exceptional to optimize taxes, you are around that 50% or so rate on incremental income nearly anywhere you’d be able to make such incomes in the western world. Normalize for things like health insurance and it’s really not worth even considering a move for tax purposes in most cases.
The US is known as low taxes, low services - but it’s really within about 5% for high earning professional workers compared to even most social democracies. It’s a decidedly high tax low services place to live.
The largest difference in taxes in the US vs rest of the developed world seems to be the high tax brackets start much earlier on the income scale. It’s much better (for taxes at least) to be in the US as a median wage earner and it’s usually not remotely close.
Where things decouple is how capital and other forms of investment income are treated. That gets too complicated for me to understand, but it’s clear to me that a charitable take would be tax code has not kept up with how the wealthy increasingly earn their income.
I'm smart (anecdotal, but still) and ambitious, and I moved to Spain, and I'm planning to stay here, yeah. Yes, I'm OK with the government taking the excess profits us "rich" people earn so others who cannot work still can survive and even get health-care, like the rest of us.
> This is basically inviting your best and brightest to move to the US and other low tax countries.
If that leads to all the soulless money-chasers move to the US, then that sounds like a positive to me. I prefer a society where everyone gets equal chance and a good life, regardless of income, and the ones who want to ruin that can continue to build their utopia in the US.
If you're in tech, you'll want to move to California, where you'll end up paying around 50% marginal, which is much the same as lots of Western Europe. So yeah, you'll make more money but you won't get significantly lower tax rates.
The US is not a "low tax" country, it's just underdeveloped in social services. Which might give the impression the tax rate is low, but it's not - it's very high. Not only are you going to be paying income tax within 10% that of a western European nation, but you also have lots and lots of invisible taxes.
For example, did you know that about 30% of all compensation in the US goes just to providing health insurance and other benefits to employees? One of the downsides of having an underdeveloped health sector is that it's quite expensive.
Or, how about the fact that the average American spends 15% of their gross income just on transportation cost? Turns out having all that underdeveloped transit infrastructure isn't free. We pay for that.
Tax is not collected, but the supporting law has never been revoked.
https://de.wikipedia.org/wiki/Verm%C3%B6gensteuer_(Deutschla... (Sorry, no translation available)
Wikipedia claims that this decision was partly due to the max tax rate being at 53% at the time. Today, it has dropped to 42%, but for some strange reason, the wealth tax has never been reinstated.
The super-rich don't stay rich by just sitting on their money, they invest it.
These countries should focus on encouraging investment there - by getting rid of bureaucracy and red tape, make it possible to hire across the whole EU a lot easier, without needing separate tax registration in every country, etc.
Lower the barriers to entry wherever possible - no long application processes for developments with endless consultations, no arbitrary minority language or qualification requirements, etc.
Income inequality is a good thing, but there needs to be equal access to education and opportunities and the lowest barriers to entry possible.
Rich people will and should continue to exist. What they shouldn't be allowed to do is take advantage of loopholes and tax breaks just because they're wealthy. That alone should indirectly lead to lowering inequality, and, assuming we can trust that governments work efficiently and in equal interest of all their citizens (which is hardly a given), it should lead to a fair(er) distribution of wealth, instead of a growth of inequality.
In any case, it's easy to be cynical about this news, but it's a step in the right direction on paper. In stark contrast to what is happening in the US, for example.
Sounds like you want to tax assets. Every country can start doing it right now with assets on their soil. No "global registry of wealthy people" is needed for that. Just look at the assets you control and tax them.
The specific issue here is that revenue from capital is taxed less than revenue from labor, thus disproportionally impacting the poor & middle class.
Can you explain how taxing the rich even less will solve this issue?
Ideally there'd just be a 10% tax across the board - sales tax, income tax, etc. like the https://en.wikipedia.org/wiki/9%E2%80%939%E2%80%939_Plan
No complicated exemptions, or complicated progressive bands, just keep it simple and eliminate bureaucracy. Then people can manage their own pensions and insurance.
This could be accompanied by a Georgist Land Value Tax to encourage development and innovation too.
So yes, tax the rich +1
With the added value that it mechanically keeps governments lean and fit, instead of the bloated, taxpayer money wasting leeches that they are in most socialist countries.
Socialism, a.k.a. a picture perfect example of the maxim "The Road To Hell Is Paved With Good Intentions".
High taxes that supposedly lead to social justice via re-distribution of wealth ALWAYS end up driving countries into the same ditch: gross abuse of public money making the poorest part of the population suffer the most.
Look at Venezuela, California and Cuba for perfect examples. Spain is not far ahead of them, check out their sovereign debt in case you have a doubt, and how many times they've had to be bailed out.
And if you have doubts that low taxes lead to healthier societies, it is indeed possible, I'd invite you to take a look at Switzerland, where taxes are super low, the institutions work like well-oiled Swiss watches, crime is quasi non-existent, infrastructures work, corruption is one of the lowest in the world and - yes - there are filthy rich people (who gives two fucks if they're rich? As long as your life is good. Unless jealousy of course.) but the so-called "poor people" in Switzerland have a way better life than most supposedly rich people in the rest of the world.
OK great, what do you want to cut?
Generally, it's about 25% on education, 25% on welfare, 25% on health and then everything else is another 25%. Which of those things do you want to cut?
Education is generally net positive as you need future taxpayers to pay for your pension, health could be privatised but then you'll have lots of avoidable deaths, one could additionally cut welfare but then you're basically hurting poor and old people, or cut everything else which means no roads or public transport which seems less than good.
I think the big misconception people have around taxation is that some level of government revenue makes the entire economy much more productive. Is there waste? Yeah, of course, but it tends to be much lower than in the private sector.
To your points:
>OK great, what do you want to cut?
The answer is largely dependent on the country you're talking about. But the generic answer: cut waste. That includes inefficiencies, duplication of effort, crazy useless shit the government wastes money on (see the unreal crap DOGE unearthed in the US for example), downright corruption. And when that's all said and done, cut every department budget equally by 50% the first year. When you deal with a parasite like most governments are on the planet, less food means a way more efficient and smaller parasite.
> Education ...
Your not getting my point. This is not about picking winners and losers in the belly of the beast. This is about reducing drastically the size of government overall. Period.
Now if you want to pick apart winners and losers, sure, let's do this ...
In in ideal world, a government should stick to regal functions: externals security (army), internal security (police), justice (enforcement of laws, property and contracts). End of story.
If you believe that including things like health, education and welfare in the R&R of govt is a good idea (I don't, it creates monopolies, which are inherently corrupt inefficient), fine.
In that case, make sure they're properly starved (small budgets) so they operate at maximum efficiency, decentralized so even if they're taxpayer funded there's at least a modicum of competition to keep them meritocratic, honest and efficient.
> Education is generally net positive as you need future taxpayers to pay for your pension
In countries where retirement management was designed like a ponzi scheme (new investors buy in so early investors can benefit), and where the age pyramid looks like a freaking Christmas tree, you would unfortunately be correct. In a properly designed retirement system, this is utter BS.
Retirement system should only be minimally mutualized. In an honest retirement system, you should mostly rely on what you have set aside during your work life, 401k style. And certainly not pray that there will be, 50 years down the road enough of the same suckers you are now to pay for your sustenance. When people stop making babies, guess who's going to be left holding the bag? You. That's who.
> Is there waste? Yeah, of course, but it tends to be much lower than in the private sector.
I'd love to see the data backing this claim.
But if we're talking impressions, my observation after a rather long life is the exact opposite: the private sector is far, far more efficient than governments except when corporations get to monopoly status and essentially become mini-governments (via crony capitalism) and with the exact same illnesses.
OK, so you want a 19th century government. That's a position that one can hold, but (unfortunately or fortunately) this is never gonna get voted for, so unless you're also against democratic voting, you should probably think about how to accomplish some of your goals in a society that actually can exist today.
> And when that's all said and done, cut every department budget equally by 50% the first year.
OK great, how do you choose who lives and dies? Cos that's basically what a 50% cut across the board will mean. Personally, I like that people without as much money as me don't starve to death on the side of the street, but obviously opinions differ.
> In an honest retirement system, you should mostly rely on what you have set aside during your work life, 401k style.
OK great, so your proposition is that poor old people should just die?
> And certainly not pray that there will be, 50 years down the road enough of the same suckers you are now to pay for your sustenance. When people stop making babies, guess who's going to be left holding the bag? You. That's who.
This is basically all developed world social security systems, so you're proposing again, that poor old people should starve to death on the side of the street.
More likely, what will actually happen here is that the voters (most of whom are poor) will vote themselves confiscatory taxes on people who have saved. And that's the better option! The worse one is that they'll just bring back the guillotine.
Note: I apologise for the potential emotionalisation of your points, but it's important to keep people aware of all the consequences of approaches like this.
While I definitely think that lots and lots of state problems exist, and could be fixed, I reckon that in many cases fixing these problems will require insourcing a bunch of work to the public sector. Good examples of where this would probably work are in constructing tendering and design, as well as software tendering and esign.
> But if we're talking impressions, my observation after a rather long life is the exact opposite: the private sector is far, far more efficient than governments except when corporations get to monopoly status and essentially become mini-governments (via crony capitalism) and with the exact same illnesses.
Having spent a bunch of my career in public sector orgs and the rest in the private sector all I can say is that they're about equally inefficient and stupid, just in different ways.
> I'd love to see the data backing this claim.
I'd love to see data backing your claims of the stupendous waste in government, but we can't always get what we want, I suppose.
https://fred.stlouisfed.org/series/MEHOINUSA672N
Personal income is up more than 50%.
https://fred.stlouisfed.org/series/MEPAINUSA672N
And that doesn’t account for demographic changes: Households are smaller on average than 40 years ago and there’s been a significant surge in the foreign-born population, mostly from much poorer origins.
Further, while the inflation calculation includes some hedonic adjustments, it’s really hard to capture the aggregate of the thousands of diffuse lifestyle benefits of living in 2025 v. 1985. Personally, I’d miss burritos.
Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions.
This is belatedly being recognized and addressed in a shockingly bipartisan manner for now.
But also worth noting that the median home today is much larger and nicer than in 1985. Interest rates have (even today) been low enough—and incomes high enough—that ownership rates for these bigger, better homes are a few ticks higher than 40 years ago, as well.
Though I still think that longer-term inflation adjustment (CPI based comparisons even more so) always warrant a critical look.
> Yes, housing supply should be much more abundant. The constraint on supply has not been the 1%, but government regulation through zoning and environmental restrictions.
I'm not buying the whole "regulation is to blame for rising housing costs" at all. If it was, I would expect countless "housing havens": states/nations in the US/Europe with "correct regulation" and housing costs at least staying stable over the last decades: But I don't see those.
My take on this is that this is mainly a consequence of the Baumol effect; local-labor intensive products like houses, childcare, education suffer from strongly rising costs because wages increased generally; regulation cant/wont magically solve this.
But if you just compare wage development itself, things look much better over time than they actually are for the average person, because you omit this effect from your consideration by design.
So things actually improved much less for the average American than a first glance at your numbers suggests.
https://x.com/mattyglesias/status/1940111174722326580
Housing is pretty much the cornerstone of American society. It's the one thing the middle class has done to increase their wealth and security. It's not just a specific good - it's the poster-child of the American dream and American prosperity.
Obviously policymakers haven’t over-focused on that number, and to some extent that’s a big mistake that is hopefully now being corrected.
But it’s one number, and doesn’t even tell the story of housing affordability, let alone the state of the economy for the median citizen.
The other lending that the US (and Western governments in general) massively subsidize is education. And look at what has happened to the cost of housing and education. They have both massively exceeded general rates of inflation.
The cure is worse than the disease.
That's your opinion. I fail to see how the differences were have today make sense and could be good for the society.
Suddenly a lot of productive assets are no longer working.
Do you think capital allocation will be better when it's being done by everyone?
Investment tools cover all your concerns here. (Hopefully paired with a regulatory framework that prevents scams (looking at you, crypto))
Nope, since you decided that investments can't make you richer investment tools no longer works.
And if investments are allowed to make you richer you didn't solve wealth inequality, because most people will just spend and consume rather than invest in anything.
The rich people are stiffling the economy and displacing a large swath of working people. This process will hollow out the economy and produce more poverty and more inequality.
For the wealthy people there are two ways to invest.
1. Invest in passive assets such as stock market, property, valuable items, gold etc. 2. Invest in new businesses.
What are they doing? Mostly 2. How do we know. Simple.. look at the real economies. The western economies are growing (barely) at around 1-2% per year. The wealthy (since pandemic) grow their wealth at 10-20% per year. Where is this growth coming from? Certainly not from new business development since the real economy is not growing. The only way it can come is by taking a bigger slice of the pie, i.e. displacing middle class by subsuming their wealth.
This is harmful to the economy and will lead to the collapse of the economy and the society.
Robert Zubrin's The Case For Nukes is a great book on this.
I know that the capitalist really like to sing this song. "It's the regulation, just let us self regulate and we'll create so and so many jobs".
Yeah, just like they did in the 1800 hundreds. Abysmal working conditions, minimum pay, toxic waste dumping etc. etc.
Or how the banking sector has managed to blow up several times since "deregulation" in the -80s by Reagan. 2008 market crash anyone?
The problem is that there's less and less purchasing power. Even if you have a proven business case such as hairdressing or serving food your most important asset is a customer base who have money. You start by putting money in the pockets of the people and suddenly all kinds of lucrative markets and business ideas become viable.
The regulation is needed to protect the society from all the harmful shorcuts that businesses would otherwise take. Such as poisonous food, toxic waste dumping, ponzi schemes and insider trading etc. etc.
Imagine you are in Germany:
-you have a business that has modest profitability of 4% per year (profit/company value)
-your economy grows 1-2% per year
-your inflation is 2% per year
How much do you expect the company value to increase after a year? Right, it's 8 % - exactly how much DAX (German stock index) grew on average during last 10 years.
[1] https://www.europarl.europa.eu/workingpapers/econ/107_en.htm
But does that mean income inequality is good?
Maybe in moderation, but I feel it's pretty obviously harmful when taken to an extreme. Policies to reverse the trend of concentrating wealth and power are worth considering.
And an economy oriented only along the wishes of the super-rich.
Money is the way you "vote" into the economy, and the more money is in the hands of a few, the less the economy actually adresses the needs of the many.
That's exactly what I mean by removing bureaucratic processes to unlock investment.
But the "many" can learn useful skills and innovate to also make a lot of money. Everyone should be able to start a business easily - without excessive capital requirements or expensive notaries. STEM education should be free and widely available (or with very low interest loans if we let the loan interest be decided per subject, per student grades, etc.)
Sounds like an opportunity to me.
>>empty shop spaces because it would diminish their value to lower the rent
Sounds like a problem land value tax solves - it should cost you to hold land ad if you can't pay you should give it up so others can make use of it.
>> excessive appartement rents
Sounds like land value tax + removing bureaucracy around building should solve that.
>>And an economy oriented only along the wishes of the super-rich.
I am not sure why you think anything in EU is along wishes of super-rich. It seems to me it's to the wishes of political cronies. I can guarantee you that "super-rich" would structure it differently.
>>Money is the way you "vote" into the economy, and the more money is in the hands of a few, the less the economy actually adresses the needs of the many.
And yet populist parties introducing anti-business policies win all the time. It's true our parliamentary systems are terrible and undemocratic but it's not because super rich, at least not in EU.
Yes, mostly in the pockets of politicians who make sure to keep them super-rich.
This is why wealth inequality is a disaster: it allows the super-rich to control entire countries and keep themselves and their families rich and powerful.
Any kind of economic measure that still permits billionaires to exist is not going to address this simple fundamental problem. It's at best lipstick on the pig, not a long term solution to anything.
90% of bureaucracy and red tape are Chesterton Fences that exist for a reason.
Remove those fences while being clear and transparent about who they protect and how they will be exposed.
Be aggressive about the remaining 10%.
And good luck telling which is which.
or
We are not trying it hard enough.
Reducing inequality in Brazil (even a tiny amount) is a DEAD SIMPLE problem that is not in any way related to the government taking more money from people (rich or poor), but, rather, in taking LESS money:
> The collection of federal taxes on the reserve base, shows that of the amount collected by the IRS of Brazil, the majority of the taxes are based on consumption, with approximately 53% on average of the funds raised by Revenue Federal Brazil and continue accounting for more than half of tax (52%) charged by the agency. This tax structure is even more perverse when we add the taxes collected at the state and municipal levels, which bring in the largest source of revenue. The tax burden on consumption is regressive. In Brazil those who earn up to twice the minimum wage spend 26% of their income to pay indirect taxes, while the tax burden for families with income higher than 30 times the minimum wage amounts to only 7%. Excessive taxation on consumption depresses demand directly affecting the economy, reducing the consumption of the middle and lower income families.
We're talking about a country where minimum wage is 260ish dollars a month, and a macbook costs TWICE what it costs in the US, where people make much more. We're structured in a way where only rich people have access to anything. You can tax said rich people more, but they'll just keep being the ones that can afford anything at all.
source: https://en.wikipedia.org/wiki/Taxation_in_Brazil
Best not to hold your breath though...
There is a consensus that non-dom status (basically rich foreigners, very broadly defined, pay hardly any tax) in the UK needs to go. The main point made by people opposing this is that they can easily move to a number European (mostly EU) countries that have similar schemes and still only be a short flight away from the UK.
Or maybe I do understand - it has nothing to do with trying to fix the problem but is just a populist agenda that sounds good and helps with winning elections.
If you regard progressive taxation as "populist", fine. I regard it as simple being fair.
To put it another way, why should there be a special exemption so super-rich foreigners do not have to pay tax?
> To put it another way, why should there be a special exemption so super-rich foreigners do not have to pay tax?
I do not know what you are referring to here. The non-dom issue is primarily about taxing income.
Terrible principle. You should pay proportionally to what you use/spend in the country. These days it's very difficult to say who lives where, especially in case of rich people. If someone spends 200 days in one country and 160 in another it's unfair to the latter country that 100% of the tax is paid in the first one. If someone spend their time across 3 countries current solutions don't make any sense at all. That's why it makes sense to tax assets locally.
The concept of "tax residency" belonging to one country is just a terrible idea. It's the reason a lot of those abusive schemes exists. The way is to get rid of that principle and substitute it with something that is not easy to get around like taxing assets under your control.
>>To put it another way, why should there be a special exemption so super-rich foreigners do not have to pay tax?
There shouldn't be. They should pay on assets they use in your country. If they have income there you can tax income issuer (like payroll tax). There is no need to tax income from abroad - let other countries who actually control assets that produce that income tax them.
A shift from taxing income to taxing assets instead might work. A wealth tax instead but its not easy. Land can be valued, so can publicly traded investments. What about ownership of privately held businesses or works of art? Where are yachts and aircraft taxed?
This also avoids a loophole that buying land and doing nothing on it means you pay very little taxes while patiently waiting for its value to increase because of other people who do productive things nearby
>>or do you think that anyone who invests abroad should be exempt on tax on income from those assets
Of course, those should be taxed where they are located. Much easier to tax companies where they operate than elusive "income" of increasing stock value.
>>What about ownership of privately held businesse
You don't need to tax wealth related to business. Your can make operating businesses more expensive by introducing taxes and fees on it and then not tax any income it still generates.
EU politicians intuitively know that's the way when talking about digital tax. Just tax "IP protection" as % of revenue in your country for example. Then you will get a share of Apple or Google no matter where it's registered as long as it has revenue in your country.
It's way easier to make Google generate 20% less profit than to tax 20% on its profits. It's also very easy to tax it where it's operates and not care about creative accounting tricks it uses to show less profit.
The current system means people living on Cyprus pay less tax on Google value than Americans. It's just a completely stupid system that breeds abuse.
And many people don't do a job they love, they do it as they need the money, and are miserable.
The 'look at at that group who are not paying their share and the party in charge is responsible , but we will change it if you vote for us' is one of the easiest plays to get votes and volunteers campaigning for you.
Edit: "oh but it's an actual organization" yeah with still very little significance between pretending it's anything but a convenient proxy for the bigger members
I think your understanding of BRICS might be slightly outdated, did you read about the last time in the late 90s or something? It's beyond just an acronym today, with institutions actively involved, new initiatives and more.
India seem a flaky member of the Brics, but rest seem very committed.
It's a puppet show essentially
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Either one gets rid of the oil trade-- which I think is quite feasible, then the need to acquire dollars to buy these products goes away, so there's nothing more needed, or one negotiates something with one of the many countries which either have or could acquire the ability to produce oil where one bypasses the dollar trade.
Maybe, if they didn't have Russia in the group and had talked to more people about the sanctions, something like 'we need this, and the alternative is Russia-- can't you be flexible and not sanction Venezuela', they could have even used Venezuela.
Reading the press release shows me that Spain and Brazil are aware that this is a hard problem. They are especially aware that a nation, or two nations, alone cannot solve it, thus they suggest a "global registry", which is basically a "abolish tax havens" again. Let's see how far we get this time, I wish them all the best.
Lol, why are we still being taxed then?
We do have endless corruption scandals though, that part is pretty accurate, but they still tax us like there is no tomorrow. At least we have pretty good healthcare, so it isn't all doom and gloom like the "news" want us to believe.
Everybody who is poorer than me are lazy bums and shouldn't get any more help.
Yep, this is absolutely correct. I don't see how people don't realize this, the simplest way to make brazil less unequal is to REDUCE tax!
From wiki: > The collection of federal taxes on the reserve base, shows that of the amount collected by the IRS of Brazil, the majority of the taxes are based on consumption, with approximately 53% on average of the funds raised by Revenue Federal Brazil and continue accounting for more than half of tax (52%) charged by the agency. This tax structure is even more perverse when we add the taxes collected at the state and municipal levels, which bring in the largest source of revenue. The tax burden on consumption is regressive. In Brazil those who earn up to twice the minimum wage spend 26% of their income to pay indirect taxes, while the tax burden for families with income higher than 30 times the minimum wage amounts to only 7%. Excessive taxation on consumption depresses demand directly affecting the economy, reducing the consumption of the middle and lower income families.
Taxing the rich will solve nothing (and let's be honest, this government is not aiming nor has the capacity to enforce it). Something much simpler is just let people be able to consume things, by removing taxes and cutting spending (probably not even necessary given how much the state already takes from its people).
Super simple, but, as usual, we love to overcomplicate it and play the popularity game.
The brightest minds leave the country or aren't able to reach its full potential.
We're talking about a country where the government has repeatedly been found of the largest corruptions schemes in human history.
Despite having enormous budgets, the services the state provides are inadequate. Many people choose to sacrifice an additional portion of their income (on top of what they already pay in taxes) to access these services privately. Even with extensive social policies and taxes on virtually everything you do — salary, consumption, transfers, inheritance, literally everything — quality of life remains poor. High tax rates actually breaks development.
We must be cautious about supporting policies that tax the wealthy more heavily, because when the state considers someone earning $2,000 per month to be 'rich'—which already happens, as evidenced by the current income tax brackets (IRPF)—these measures won't improve anyone's life.
> Many people choose to sacrifice an additional portion of their income (on top of what they already pay in taxes) to access these services privately.
In Brazil you pay taxes which are supposed to grant you health care, education, safety. None of that happens, so you pay (again) for private school, healthcare, insurance and so on. Anyone that lives/lived there knows this.
The state is just private individuals with a monopoly on violence. The incredible degree of corruption in Brazil wouldn't exist if people working for the state didn't have any special privileges.
Look at some successful societies: Japan, New Zealand, Germany. Not socialist. Success was rewarded and societies benefited.
- No, the rich won't run away.
- No, the rich are not carrying the country.
- No, caring for another or a lesser fortunate, isn't communism.
It's weird I have to say it, but some really need to hear it.
Instead of complaining about rich people buying big houses and a lot of land around just tax that - that aligns incentives and makes presence of rich people profitable for local communities.
What they want to do instead though is first tax assets people have in other countries which don't influence them what so over and then if those people want to leave they cry foul as well - you will stay and you will like it - exactly as in communist Cuba.
>>There’s a real need to know who the beneficial owners are behind companies and legal structures used to conceal wealth,” said Mr. Gascón
Maybe there is, maybe there isn't. If you tax assets and get rid of corporate income tax replacing it with revenue based taxes (like a new digital tax idea or a tax on big super market chains) and a land value tax then it doesn't matter who is behind what as the local entity has to pay anyway. If you build an attractive country companies and people will pay you to live and do business there. Why are you so obsessed on their total wealth? Is it maybe more about control and power than paying your "fair share"?
The thing is they don't want fair taxation. They want to take wealth of productive people and give to their ever increasing number of cronies. This kind of toxic thinking geared towards punishing productivity and making sure no one gets ahead too far is a cancer in Europe and imo major reason old EU countries stagnate instead of growing.
A millionaire is 1000x the wealth as someone with a thousand bucks.
As someone closer to a net worth closer to $1000, it sure is funny watching the rich millionaires complain about the rich billionaires.
I bet the millionaires don't think the wealth transfers and confiscation they support for the billionaires, will ever be applied to them.
Run your math again through a calculator.
Did you not understand the point being communicated?
It really is an error in calculating. That's the great thing about math, it doesn't care how you 'feel' or what you 'wanted to express'.
You need to update your comment and the error will be gone and not try to argue semantics.
You're off by an order of magnitude.
The reality is that many (other) countries understand this and attract these wealthy people who contribute to their own economy - because wealthy people are more than people with a large bank account, it's usually entrepreneurs who will hire local workforce for their business, buy real estate, etc.
If one knows Brazil and especially Spain, the other reality is that this initiative is certainly driven by a socialist-populist agenda, nothing to see here.
Either way, this initiative is just a show, and sure to fail for many reasons.