> The bottom 50% pay no taxes and the top 1% still pay 40+% of federal taxes.
This tells us nothing unless we know how their relative income shares. If the bottom 50% earns only 20% of all income (just an example) this is quite fair. If they earn 60%, it's unfair.
The number of people who just trot out this statistic without context is quite tiresome.
And of course everyone pays sales tax, property tax (even if they're a renter), payroll tax and so on.
Varies by year, but top 1% share of income is around 21% right now in the US:
https://ourworldindata.org/grapher/income-share-top-1-before...
i.e. the US tax system is still fairly progressive despite what many people think.
See this chart: https://media4.manhattan-institute.org/wp-content/uploads/co...
True, though it's irksome how the chart conflates "Rich" with "High taxable income."
These are not the same, which is exactly the problem!
eg: The #1 most wealthy American is Larry Ellison, whose net worth increased $89B today with zero tax implications.
What do you think should happen to you if your house is more valuable in a year than the year before, even if you aren't selling or otherwise leaving that house?
This varies wildly depending state you live in - some states adjust property taxes for current value, some don’t (or do but with severe limits)
But do they do income-like taxes on the added value? This seems to be what people (GGP) are wanting from the increase in stock values, ie, unrealized capital gains.. which is frankly terrifying.
They increase property taxes, so yeah, you're getting taxed on a capital gain that you haven't realized yet (and won't until you...sell your house).
What do you think should happen to people's retirement accounts each year then?
Nothing. Retirement accounts are tax deferred or tax free. What a weird question to ask.
Well, if you want to tax the stocks that the wealthy own.. why wouldn't you want to tax the stocks that many regular people own? Where do you draw the line between the two?
Wealthy people's stock in retirement accounts would also not be taxed. This can be considerable: Peter Thiel's Facebook investment was made in an IRA.
I imagine there'd be some net worth number, excluding retirement accounts, that policy wonks could work up. You draw the line between "wealthy" and "regular" there. Or, more likely, several lines because there would be wealth brackets similar to income brackets. Without that it would be a regressive tax.
Why not just tax when someone SELLS the stock, or leverages it for a loan instead? You know, when they actually use it?
I'm actually against property taxes, or any kind of tax where you risk losing property just because you managed to live another year.
I don't disagree with that. But it's a much bigger discussion. Abolishing all property taxes means city and county finances need fundamental re-working.
I know what does happen. Property taxes go up. A wealth tax by another name.
Capital gains absolutely have tax implications. Just like my house rising $100K in (unrealized) value over a year.
Capital gains receive favorable treatment under US tax code but are also a realized gain by definition. That is you actually have to sell the asset and are taxed based on any profit earned.
An increase in the estimates value of your real estate holdings does not trigger a capital gain. Your municipality, however, may use it as an excuse to increase their assessment of the value of your property, which is used to calculate the tax they charge.
So you admit that many people do pay unrealized gains taxes on their largest asset (their house)?
Yeah it functions like a wealth tax, but the claim was that it was a capital gains tax, which it isn't.
His net worth increased due to asset appreciation. Nobody physically transferred him any money and it can fall back down tomorrow. Should he get a refund if Oracle stock tanks?
He pays less next year because Oracle stock is worth less. Just like property taxes on people's houses.
The math on taxing unrealized gains or losses doesn't work out for the reasons you pointed out. Property taxes, on the other hand, have been working for a long time.
That doesn't answer the question I posed. First off it conflates "high-earning" with "wealthy". Plenty of early career doctors are high earners but have a negative net worth. They pay more taxes than someone with millions in net worth but lower "income".
Secondly, just because the median earner pays a 2% average income tax rate while the top 1% pays on average 21% doesn't tell us anything about its fairness. It ignores income share.
Well, other than it's impossible for the bottom 50% of income earners to ever earn 60% of the income without weird communism in place...