Progressives Unveil OLIGARCH Act to Combat 'Existential Threat' of Extreme Wealth

According to a summary of the bill released by the Patriotic Millionaires—an advocacy group that helped craft the measure—the wealth tax would have four brackets:

  • 2% for all wealth between 1,000 and 10,000 times median household wealth;
  • 4% for all wealth between 10,000 and 100,000 times median household wealth;
  • 6% for all wealth between 100,000 and 1,000,000 times median household wealth; and
  • 8% for all wealth over 1,000,000 times median household wealth;

"In the unlikely event median household wealth fell below $50,000 from its current level of about $120,000, the thresholds would be fixed at $50 million, $500 million, $5 billion, and $50 billion respectively.”

The legislation would also require at least a 30% IRS audit rate on households affected by the new wealth tax.

theneverfox,
@theneverfox@pawb.social avatar

Next year, late summer.

theneverfox,
@theneverfox@pawb.social avatar

My understanding is that this would be x% of your total wealth, which is much more reasonable.

So you would pay an extra 2% of your total worth every year. So at a billion that’s 20 million, at 980 million 19 million and change, etc.

The numbers could be much higher, but this is a lot of funds. It also would take several generations for the inheritance to drop below “you’ll never spend this” to just “you can live on the interest”. Even with zero interest on their investments (which is absurd - so really this would more be a source of funds than anything). At least it would be a starting point

extant,

Isn’t the issue that they are currently hiding and obfuscating their income? Increasing the percentage is a great idea and all but 1% or 8% of zero is still zero.

neeeeDanke,

The legislation would also require at least a 30% IRS audit rate on households affected by the new wealth tax, according to the summary.

extant,

I don’t understand what this statement says. The it’s has to pick 30% of all households that make more than a thousand times the medium income? Is that lower than standard or higher? Why 30% and not 100%?

neeeeDanke,

since they took the effort to include it in the proposal, I would assume it is significantly higher. Where I live the standard often varies from state so state, because some states use a low enforcement rate to attract buissnesses (“as in yeah, our federal taxes aren’t cheaper here, but we if you cheat it’s not like we are gonna catch you…”).

I assume not a 100% because that would be a herculean effort and at a certain point if your chances of getting caught are high enough -and there are significant fines- you won’t need 100% because the risk is high enough to make most people not cheat out of fear of getting caught.

Rodeo,

It literally says “all wealth” and doesn’t talk about income at all.

This is exactly the kind of tax we need. I think its a very interesting idea to tie it to median wealth, though using household as opposed to individual wealth I’m not sold on.

extant,

The same point still stands regardless of it’s income tax or any other arbitrary constraint, if they hide their assets how do you apply this policy to that?

SCB,

Wealth taxes are super easy to avoid, so I’d much rather see something like cap gains+“luxury” sales/income taxes and such, but it’s a step in the right direction

Now raise taxes on everyone making over 100k and we’re really cooking with gas

MisterCreamyShits,

$100k aint that much and those people already have a heafty tax burden. Plus luxury taxes are easily avoided when yachts and planes are purchased in the Bahamas. What we need are 50% taxes on the money they borrow against their assets. Want to buy another mansion? Cool 50% tax on the money Goldman Sachs lends you against your Amazon stock. If I have to pay a tax to borrow against my 401k so should these assholes.

SCB,

$100k is 150% of median household income, and I’m talking about individual income. It is the boundary between 3rd and 4th quintiles of household income.

People are not overtaxed. They are dramatically undertaxed. I say this as a person earning over $100k - it’s not some weird snub. It’s just correct

dqydj.com/average-median-top-household-income-per…

Rich people do pay taxes on money removed early from 401(k)s, which is why they don’t do that.

I do strongly support raising taxes on money borrowed against assets over $150k or so

Not_Alec_Baldwin,

Warren Buffett doesn’t pay income tax because he doesn’t earn income.

The billionaires don’t have a billion in cash, they don’t earn a billion dollars a year. They hold assets worth that much.

Taxing wealth is the only way to combat the wealth gap.

SCB,

First off you’ll need to define “combat the wealth gap.” Difference between high and low isn’t really a relevant thing.

MisterCreamyShits,

$100k is a bad metric because somebody making $100k in the Bay Are or New York is basically in poverty. I make over $100k and I’m not well off at all. Not even close. And I’m not bad with money, have zero debt, save 15% in the 401k no kids and still things are tight.

SCB,

Yeah federal taxation doesn’t work based on “I should be able to put 15% into my 401(k) and live where I want.”

$100k is not basically poverty in LA/NY or everyone making under $100k would be below poverty and that’s considerably more than half the population (median household income - that is, generally 2 working adults - of 68k in NYC, and NYC is more expensive than LA).

CoderKat,

But income tax on paper is already higher for the $100k tax bracket than what the ultra rich pay. The ultra rich do everything in their power to not have an “income”. Hence why there’s this effort of taxing wealth instead.

SCB,

You should check out cap gains taxes

MetaCubed,

The cap gains tax that the richest people in the world never end up paying?

propublica.org/…/the-secret-irs-files-trove-of-ne…

From 2014-2018 Warren Buffet alone grew his personal wealth by 24.3B, reported 125M in income (0.51% of wealth), and paid 23.7M in taxes (0.1% of wealth). Over 4 years, this man paid taxes on a tenth of a percent of his income. Similar tax numbers under 5% apply for other billionaires.

The ultra rich never pay capital gains tax, loopholes allow them to have their income in portfolios, which isn’t taxed. Capital gains is only for realized gains. When your portfolio is worth billions, you don’t need to sell it to have spending money, you can take a loan against the value of portfolio.

Capital gains tax only affects those who don’t have a bank’s worth of money in their portfolio.

SCB, (edited )

My post was specifically that we should increase amount paid via cap gains so I’m not sure where you’re going here

These are laws we’ve written, not magic. We can change them

Edit: also wealth taxes, historically, are among the easiest to avoid via accounting, and the hardest to “fix” as laws

MetaCubed,

My point is that increasing the amount paid via cap gains does absolutely nothing if the mega rich don’t need to pay it in the first place.

SCB,

If you increase the amount paid, you are inevitably closing loopholes they use to avoid cap gains.

The two best ways to tax money are money in nnd money out because all of that is significantly harder to hide than wealth taxes.

Here’s an in-depth look at why:

…blogspot.com/…/wealth-and-taxes-part-iv.html?m=1

And a good, more generalized piece, on cap gains surging:

theguardian.com/…/why-capital-gains-tax-reform-sh…

Saneless,

Good thing the people who have to vote on it aren’t impacted by these brackets at all!

PatFussy, (edited )

Whats the point of taxing the lower end of the tax bracket? Its just another handicap they are incurring on the already marginalized class… i dont care about people saying not taxing the rich enough, stop taxing the fucking poor!

Whats 600k for a person making 10M? Probably no waterfall pool renovation this year.

Whats 200 for a person making 10k? Probably going homeless.

GojuRyu,

The 10k isn’t what they make. It is how many times the median wealth they have. So the poorest affected will have a thousand times more wealth than the median household.

betterdeadthanreddit,

What a travesty. Is a man not entitled to the sweat of the brows of everyone he’s screwed over to amass his fortune? Sure, I might not have two cents to rub together between paychecks but I’d better oppose this just in case I get rich some day.

4ce,

relevant

Irv,

The Supreme Court would veto it as unconstitutional even if passed. www.npr.org/…/is-a-wealth-tax-constitutional

quindraco,

“Veto” isn’t the correct term, but you are otherwise entirely correct.

drphungky,

Supreme court ruled income taxes unconstitutional a couple times too, they still eventually happened…

But yeah wealth taxes are a bad idea. Just close income tax loopholes for crying out loud.

Irv,

Income taxes required a constitutional amendment (the 16th) to get past the Supreme Court

drphungky,

Yeah but the point is they happened!

ALoafOfBread, (edited )
@ALoafOfBread@lemmy.ml avatar

For everyone saying this is not harsh enough, it is a WEALTH tax. Not income, wealth. All owned assets. Meaning any of these people who don’t increase their net worth by at least the amount of the tax each year will lose more and more of their total wealth year over year.

It isn’t intended to strip all mega rich people of all their stuff immediately - that obviously could never pass - but still is intended to open the door to wealth taxes and redistributive policies more broadly.

It’s a great move. If we can get anything like this passed, it is a significant victory.

PatFussy,

In other news, renting a house has never been more popular! On secondary news, rent has raised across america by 8% unilaterally

Stoneykins,

Are you describing right now or making a prediction I can’t tell

Spiralvortexisalie,

I think it is more the state of American media. Similarly to before 08 housing crash, many home builders got stuck with over valued houses no one would buy. So they rented them out so that it would generate income and not have to take a write down. If you watch CNBC it tells you how the housing market is somehow doing amazing if you look at perfectly curated numbers that do not add up. One of the common media pieces at the moment is how popular this new rental home trend is and how its so helpful and gracious to those who can’t afford homes. Example: www.cnn.com/2023/07/14/homes/…/index.html

drphungky,

I really love the floating design of the tax pegged to household income, but I’d probably oppose it due to exactly what you say: it opens the door to wealth taxes, which are by and large a bad idea.

We’ve proven time and time again that congress can’t properly tax the wealthy, and will always eventually default to squeezing revenue out of the middle class. 50 million as a minimum sounds nice and high until they add a bracket at 25 million, then 10, then before you know it there’s a non-inflation adjusted tax at 1 million or 500k. All that serves to do is hurt savers and the elderly (who will naturally have higher nest eggs being closer to retirement). This will 100% eventually come to pass, because taxing wealth is a further nudge towards a consumption (and therefore growth) based economy that publicly traded companies need to continue extracting wealth from consumers, so it will be lobbied for by all monied interests, both the rich and industry.

There are tons of other issues with a wealth tax like creating a new bureaucracy to measure wealth (not impossible, as some people say, just expensive), the fact that people are taxed for gains they may not have realized or just for leaving money in the bank or stock market, something that is actually good for the economy, and other complaints. It’s also just inferior to a better income tax, and expanding income taxes to eliminate the loopholes the megarich use, chief among them borrowing against collateralized debt. If someone gets a loan but puts up stock or properties as collateral, that loan should count as income. There are tons of other loopholes, and the fact that we’re ignoring low-hanging fruit and talking about wealth taxes shows me this is about scoring political points, not actually trying to reform how our government gets money.

NovaPrime,
@NovaPrime@lemmy.ml avatar

Just getting something like this out of committee and on the floor for debate would be huge. Unfortunately it stands no chance with the current congress

RagingNerdoholic,

Eight whole percent. I can hear their boots shaking now /s

Go with the Bernie plan. Anything over $1B is taxed at 100%. Shit, I think even that is too soft. Nobody needs even a fraction of that to for themselves and their children’s children’s children’s … to live like kings their entire lives.

Also, it’s always hilarious how American politicians are so obsessed with overly on-the-nose acronyms for legislation.

Zaktor,

You’re almost certainly confusing wealth taxes with income taxes. Bernie Sanders had a wealth tax plan, it ranged from 1%-8% depending on wealth. From $1B to $2.5B the rate was 5%.

renrenPDX,

Can someone ELI5 with examples? Is this based on income?

quindraco,

It’s based on wealth, and hence illegal - it would take an amendment to tax wealth, but this isn’t an amendment. So even if it could pass, it would be an entirely empty gesture.

treefrog,

Based on wealth. Like the tax we pay on houses but on total wealth. Stocks etc too.

But only for very wealthy people. It starts at 1000 times median wealth. So people 1,000 times richer than the median household.

donut4ever,

That’s it? The highest one is 8%? Wtf is this, a joke? No one needs billions of dollars. No one should hoard billions while others sleep in the streets. Hell, billionaires shouldn’t exist at all.

Edit: also where is the “assets” and stocks tax?

drphungky,

8% on wealth is actually insane. Stock market growth is only 10% on average, and average inflation of 3%. If they had average growth they’d be losing significant money (like 1-2%) each year. So in practice 8% is just a really slow seizing of all wealth, and prevents them from making any more money unless they’re taking huge gambles and getting huge paydays that beat the market (which they would be incentivized to do). I’m all for taxing the hell out of the rich, but that’s not a well designed system and creates really perverse incentives.

Alto,
Alto avatar

Considering that 8% only starts at one million times average household wealth, I've gotta say who the fuck cares. There is no justifiable reason for any singular person to have that much wealth. Not one.

zkfcfbzr,

8% seems fine considering it’s a wealth tax, not an income tax. In 7 years that takes away 56% of their wealth.

Granted, I’m not at all clear on what sort of assets constitute “wealth” here. How much of Musk’s $242.4 billion net worth that google currently spits out would be affected by this?

donut4ever,

It’s not like their wealth is not increasing. Fuck them, I wish I could tax them 90% after their first billion. No one needs one thousand million dollars. Holy shit! It’s a lot of money they’ll never ever spend. Also, I’d tax everything they own, even their stocks and other “assets” they use to avade taxes.

zkfcfbzr,

8% is a good figure. 8% gets real change and it gets it fast. This rhetoric helps nothing. Wealth taxes are very different from income taxes.

_cerpin_taxt_,

Why the fuck do I pay like 30% percent on my income? Fuck the IRS. Go after every single last billionaire tax dodger or stop taxing in general.

donut4ever,

I actually agree with you. There should not be tax on labor. I’m already helping society with my labor, why would you double down on me?

Alto,
Alto avatar

Wealth taxes are much different than income taxes, and as such have a lower percentage.

Whatsit_Tooya,

It’s so soft and yet there is still 0% chance of this going anywhere. That’s where we are smh.

donut4ever,

Yup. I’ve literally given up hope on this government. At this point, I’m just waiting for a total collapse of this country. It will happen, but I don’t know when.

RagingNerdoholic,

Have a fun 16 and a half-ish years

absentthereaper,
@absentthereaper@lemmygrad.ml avatar

I don’t think that report took into account the effect of feedback loops. I give it like ten, at the rosiest.

donut4ever,

It’s common sense. You can’t have infinite growth from a finite source. It just doesn’t work that way. Billionaires know this, that’s why some of them are actually building bunkers and “post apocalypse” places for themselves. They know it burns, yet, they keep playing with fire. Education and health of societies are very important, like the article says, but capitalism doesn’t care. Those short term profits are more important until they don’t mean shit anymore, or don’t even come by. I’m waiting patiently. I’ll be in my 50s. I grew up very poor in a 3rd world country and I know I will survive it easily.

absentthereaper,
@absentthereaper@lemmygrad.ml avatar

Sounds like where I’m at. The Paranoia Agent OP just keeps getting louder and louder in my head with every passing year.

https://external-content.duckduckgo.com/iu/?u=https%3A%2F%2Fi.pinimg.com%2Foriginals%2F09%2F7f%2F93%2F097f932ec69408953cb099e315409c87.gif&f=1&nofb=1&ipt=a6008c9ae917f212b9bc721828e796f1dcda1a5bf9f0932d058c8caa1f69a10d&ipo=images

rabbit_wren,

Paranoia Agent…now that’s a name I haven’t heard in a long time.

Alto,
Alto avatar

It's got a snowballs chance in hell of going anywhere, but it's nigh time a wealth tax entered the realm of possibility

zerkrazus,

Yeah, we have a better chance of pigs flying, getting struck by lightning, and winning the lottery all at the same time on the same day simultaneously than this has of actually passing both chambers and getting signed into an actual law. This type of thing will never pass when the very oligarchs it seeks to tax own the very government responsible for making it a law.

Sneptaur,
@Sneptaur@pawb.social avatar

This plan is so very soft on the billionaires and yet we are going to see it being resisted violently and with extreme prejudice.

twelvefloatinghands,
@twelvefloatinghands@lemmy.world avatar

Keep in mind it’s a wealth tax, not an income tax, so these numbers hit way harder than the income tax ones you’re used to.

Sneptaur,
@Sneptaur@pawb.social avatar

How so? It works help to have that context

Holomew,

Income taxes only effect money earned that year, and have plenty of loopholes to lower that amount significantly. A wealth tax is based on total wealth owned, so it hits every year at the full amount, assuming wealth never goes down. Think property taxes; you pay the same amount for your house tax every year, because you still own it. And if the value increases, so do the taxes.

Sneptaur,
@Sneptaur@pawb.social avatar

Thank you, that helps a lot.

Rodeo,

It hits the same as property tax hits, because property tax is also a form of wealth tax.

ATQ,

By temporarily embarrassed millionaires, no less.

slicedcheesegremlin,
slicedcheesegremlin avatar

Even most of the extremely rich aren't effected by this, if you calculate it out you need over 31,000,000 dollars before the lowest bracket kicks in.

joekar1990,

Uh my house will totally be worth that much so I hate this!

/S

jscummy,

What about the family farmers and small business owners?

/s

ZoopZeZoop,

Yes, percent should be about 10x what has been recommended.

givesomefucks,

Pretty sure thats the point.

Showing that the billionaires will react to practically nothing like it will destroy them. And hopefully maybe a few more people will realize they’re full of shit

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