I hate to be a jerk about this, but the headline bugs me. When I first heard the phrase "social justice", I assumed it meant that the people who did the work reaped the rewards. Sort of like the Little Red Hen.
But here, "justice" seems to mean the opposite. No matter how the poker game works out, the dealer redistributes the winnings to everyone including those who made foolish bets.
For what it's worth, I think that capital gains should be taxed at a lower rate because people are putting their own wealth on the line. Someone who buys a stock with $100 could lose the entire $100. Yet if that person gets a dividend of, say, $3 in return for the investment, the authors want this $3 to be treated like ordinary income. But people in regular jobs don't put any capital at risk. The worst that can happen is that the boss cheats them and they don't get paid. In other words, they don't get the $3. They don't put any of their savings at risk.
If they don't get paid, they have lost the entire value of their labor. Why is this worth less than money? If anything it should be worth more. There are only so many hours in the day.
Well yes, but if you don't get paid your promised wages, you can generally call up a government agency and get them to make your employer pay up. If you buy stock and it drops by 90%, nobody is going to help you.
>you can generally call up a government agency and get them to make your employer pay up.
Thats not how it works, you can pay out of pocket for a lawyer to help you, but people in this position can't generally afford a lawyer. Take a look at all the stories of Trump not paying employees, they didn't have a government hotline to call that got Trump to pay up.
> The Department of Labor's Wage and Hour Division (WHD) is responsible for enforcing the Fair Labor Standards Act (FLSA). The most common remedy for wage violations is an order that an employer make up the difference between what the employee was paid and the amount he or she should have been paid.
> The WHD conducts investigations as a part of its enforcement of the FLSA and many investigations are initiated by worker complaints.
Not only that, but it can go beyond civil actions:
> Employers who willfully violate the minimum wage or overtime laws are subject to civil penalties of up to $1,000 for each willful violation. Willful violations of the FLSA may result in criminal prosecution and the violator can be subject to a fine of up to $10,000. A second conviction may result in imprisonment.
Yes, but to couch Department of Labor's Wage and Hour Division as a phone number you call to get your money is not how it works.
Nearly 50% are denied after a 6 month process on average. Like disability claims or VA claims or immigration application...or any other administrative legal action, you generally need a lawyer to navigate through the process successfully.
But perhaps you have a personal experience you can share where you called and they got your unpaid wages from your employer.
A 50% chance of recovery in 6 months is still a drastic improvement over a 0% chance of recovery if you lost money in stocks.
Also, loss of wages accumulates over time and you're probably going to look for another job or quit if you're not getting paid. But you could easily invest several years of worth of salary in the stock market, and lose the majority if it crashes hard enough.
>A 50% chance of recovery in 6 months is still a drastic improvement over a 0% chance of recovery if you lost money in stocks.
Not from a taxation standpoint. And investors shouldn't get better tax rates than workers because their is a non-zero chance of losing their investment, if nothing else the deduction of their loss is already built into the system so why give them additional lower rates?
>But you could easily invest several years of worth of salary in the stock market, and lose the majority if it crashes hard enough.
The only people who can "invest several years of worth of salary in the stock market" are independently wealthy people. Again 40% of the country don't have $400 in savings, the numbers speak for themselves the median savings of the top 10% is $170k (even that wouldn't be several years of salary for them).
Risk has nothing to do with capital gains being lower than payroll/income taxes.
All capital represents what was at some point someone's labor. So I labored, was paid, then hired people to labor in exchange for money, then made more money from the products of labor, then risked the value of that labor in an investment. It's not less, and not more.
Given the current market conditions, a person must risk $100 to get a return of about $3 max. The capitalist needs to put about 30 times as much at risk for the same reward.
All other forms for risk except stock investment are treated like ordinary income. If I start a company but sell no stock, and wholly self fund, then all my profits are treated like ordinary income.
You’re right they don’t put their capital at risk.
Laborers are putting something much more valuable at risk: their time. Those at the lowest rungs of the social ladder are also putting their literal bodies at risk.
Yes, time is wonderful and it's a very limited thing, but they're not putting as much on the line. They only risk $3. The capitalist has to risk 30 times as much to get the same reward.
I think what's worse is that the basic nature of taxes is not taken into account, which is allegedly desired government activities, and instead some sort of moral compensation for existing a la christian church.
The consolidated US government already collects 33% of GDP in taxes: how about consuming the worst performing services of the government? I'm sure there's at least 5% of spending thats a no-brainer pure loss to society.
It's a bit more complex than that though. I'd argue time is a more important commodity than money you put down. You could argue that money was earned by previous time, but the rich poor divide probably isn't going to change withe the latter attitude.
Why couldn't you write a rule specifically for that? E.g. if it's your own capital, it's the capital gains rate, if it's somebody else's capital it's income.
you don't understand because your values are not aligned to the values of the people making this proposal. I value a just society where most people can live with dignity above the opportunity to become mega rich, you don't.
There is large spectrum from we redistribute everything to we redistribute nothing. We can probably all agree that "justice" doesn't exist at either extreme, but it is also a vague term and its exact location on that spectrum will vary based on personal opinion. That said, a lot of people believe the location of "justice" on that spectrum is closer to the "we redistribute everything" side than where we currently sit and a move to more redistribution would therefore yield more justice. That is the opinion put forward in the article and hence the headline.
>I think that capital gains should be taxed at a lower rate because people are putting their own wealth on the line.
Its a luxury to have wealth you can invest and grow without actually having to work for a wage. Plus you are overstating the downside, because if they lose their $100, its a tax write off on their next bet they win. If passive income is such a burden because the taxes you are paying, then don't invest and get a job and pay the higher payroll/income taxes, believe it or not no one really cares, just the same as investors don't really care that the rank and file employees who are making them returns don't have healthcare, don't have pensions and are living hand to mouth.
> But people in regular jobs don't put any capital at risk.
You are justifying taxing the working class at a higher rate for being poor.
>They don't put any of their savings at risk.
Because they are living hand to mouth and don't have savings...and thats not because of "foolish bets" at the poker table. The US doesn't have the lowest social mobility rate in the World for nothing or because people are going out and blowing their wealth on bad decisions. The system isn't just stacked against social and economic mobility...the capitalists are actively trying to indebt the working class for life, and the numbers suggest they have been winning for decades now.
Not only that, but the parent is disregarding the human capital put on the line. Time spent educating and specialising is the equivalent of a bet at times.
An important thing to note about the Saez effective tax rate analysis is that it ignores transfer payments back to low income individuals. Other important assumptions have a big impact on calculated rates.
Suffice to say the analysis that Saez did with Piketty, shows that the top income earners have a much higher tax rate (40% vs. 30%).
This is a pretty good analysis of the issues.[1]
Saez and Zucman (2019) argue that the U.S. has a relatively proportional tax system across all income levels. However, federal taxes are progressive, as shown by Piketty and Saez
(2007), Auten and Splinter (2019), The Urban-Brookings Tax Policy Center, the Joint Committee on Taxation, the U.S. Treasury, and the Congressional Budget Office.
After reading some articles and thoughts about this topic, I found this old quote in one of them which sums up what I feel:
We can have democracy in this country, or we can have great wealth concentrated in the hands of a few, but we can't have both.
Louis D. Brandeis
This was quoted in early 20th century, but I think it gets even more relevant with technological progress, as the rich have first access to tools which further perpetuates their superiority over lower classes. One important tool is to dominate major media channels, and distract the public discussion away from things like corruption, transparency and democracy.
I raised this in the previous discussion, but the fact the "top 400 earners" is a specific subgroup is really suspicious.
Typically you'd pick a nice round number. The top 100, the top 500, the top 1000. But they picked the top 400. Why?
My guess is they ran their analysis and realized their conclusion isn't supported unless they used the top 400. Notice the tax rate is nice and progressive for everyone else except that one subgroup.
Tax is money we contribute to a collective fund and then we elect representatives to spend it for the common good. With me so far?
The people who contribute the most should have a proportional say in how it’s spent. This is “fairness”. Numerically there will be more people who contribute less and fewer people who contribute more under a regressive system.
All of us share the benefits of social programs and health care even if we are not directly benefiting. Society works, and people can regain health, etc. and start contributing to the overall pool of tax money again.
At no point should tax become a method to redistribute wealth - although that’s exactly what it’s become.
We can all agree that some people earn so little they don’t have to pay into the “common benefit fund” (tax) but then shouldn’t they lose the right to decide how the funds are spent?
If we take your thought experiment to the extreme, it could look like this:
The wealth divide continues widening.
After generations, and the "snowball effect", Jeff Bezos' great-grandchildren end up paying all the taxes because everyone else in the country makes so little (only enough to survive) that they don't have to pay in.
At this point, a single-family has a say on how the money will be spent.
And you may accept this scenario, but now that same family literally controls the movement of all food and people (through our road systems), our country's national defense, and most importantly, the ability of any of the rest of the poor people in the country to ever not be poor forever after.
So, using proportional representation (as you appear to advocate) and the idea that even modest returns on very, very large amounts of money will eventually overtake the rest of the economy, we have moved from a democracy to a monarchy or oligarchy.
I don't want my hard-earned saving to be taken away, so I am sympathetic, but there is still the real-world problem that if money isn't forcibly redistributed at a rate that eats into the "magic" of compound interest, it is only a matter of time before there is a problem.
And if it must be redistributed, I rather it is redistributed to the government for the good of all, rather than just handed out evenly among everyone.
I agree with taxing the rich more, perhaps by adding a few more tax brackets. The fact that these numbers do not include the EITC (earned income tax credit) is crazy. That would push the bottom quintile to near-zero or even a negative tax rate. This is fitting the data to a narrative, and comes off as dishonest.
You're saying "taxes will be too high on the masses" but this proposal would reduce taxes on everyone below the 95th percentile (or perhaps 90th?) in income. If almost everyone gets less taxes, how will that make them too high for the masses? You can disagree on whether it'd be practical, or whether the knock-on effects would be good, or whether the philosophy behind the decision is something you agree with, or any number of other things, but... I don't see how you can see a proposal that explicitly lowers taxes in almost every bracket, and say most people are going to complain about their taxes going up.
The calculation would be even more lopsided if health insurance was considered a tax. That's the sort of thing you have to do if you want compare American taxes against taxes in other first world countries.
I do think taxes on the wealthy are too low. But I also think it's politically unlikely for the tax rate to get to fairness, and I also think there's simply not enough money to go around. For sure other countries with more fair tax systems do have qualitatively less wealth inequality and my bias is I consider that a social good.
But I think we're getting the diagnosis wrong. Everyone in the economic system is agreeing to participate in such a way that emphasizes elite labor. And it is that elitism in labor that causes people lower down on the ladder to see far lower wage increases. e.g. a doctor today makes 8x the salary of a nurse, whereas 30 years ago a doctor made 4x the salary of a nurse. OK so which "free market" is getting that differential wrong? Today's or the one 30 years ago? There is a cultural perception that, oh I have to see a doctor for this problem, when a nurse would suffice - this demand of needing only experience. And what you get are wealthy people seeing docs for b.s. issues because they can afford it, but it's totally unnecessary, and reduces the capacity for the doctor for things they should see.
Anyway, it's not a meritocracy, it's not a free market, we have capitalism failure and govenment failure and all we really have innovated over the past fifty years is - well not much. Not even the insults in the adversarial bickering about how to solve it have improved.
More unpopular than taxes, I suspect, would be adding noise (or randomness if you prefer) to elite education entry requirements. That way it's not just about wealthy parents lowering ladders in the form of money and access to elite schools for their very average children. More people need more opportunity to get ahead. We're not going to get to equal wealth, there isn't enough of it, and we probably would all agree we would like the looks of such an engineered society anyway.
One interesting rule might be to keep people with a certain amount of money from meddling in politics. Like you track all the money, and rich people are not allowed to influence politics at all. That would destroy the strangle hold that various groups with a lot of money have on American or hell global politics. Trump should not be allowed to be President. There should be an inverse relationship between money and power. The more money you have, the less power you have to do anything political with that money.
Maybe like we make a new category of money that can only do certain things and is heavily regulated and watched. And that's the sort of money that you can have way up there in the clouds, you can't have regular people money which is the money we have right now.
That then would move the discussion from how much they have, to what they can do with it.
This would never pass muster in the context of freedom of speech.
Instead, we should just remove money from politics entirely: campaigns should be publicly financed at a fixed amount each cycle, and term limits should be set on all elected offices.
Politics should not be a career. I want a Congress that's comprised of representatives from a variety of trades and occupations: farmers, doctors, engineers, construction workers, and so on.
Representing your district or state in government should be a seen as a public service of finite length — almost akin to a tour of duty in the military.
Term limits should also be placed on Justices. Say 10 years with a rolling limit i.e. a sitting president can only 'place' 2 justices, any other justices would need to be chosen by the house (which is more fairly distributed by #s). The senate would have to ratify/approve still but unanimous house vote chooses the supreme court. This would ensure no party controls the justice system. It might even be beneficial if they just 'alternate' maybe the president gets first pick, then the house, then the president.
I think the house/justice system could also be increased quite a bit. I don't know the numbers but I'm pretty sure the # of house members is in-line w/ population of the early 1900s and is due a major overhaul, I think I heard the house could easily be tripled in size allowing a more diverse/population-centric voice.
We could potentially double the house and justices, perhaps even having two supreme courts running simulatenously if there are enough cases for that, and each court could have a 'leader' who becomes tie breaker for the other court when needed.
But major change is almost inevitably never going to happen in America, especially in our current climate. Maybe after 2020 when the power shifts which I'm hopefully it will shift somewhat more progressive, but then again all shit could break loose again, there's still a good year for things to hit the fan.
Widening the 'voice' of America is something that will probably net benefit democrats of Republicans, as GOP is really good at controlling districting and making themselves seem a bigger 'bloc' then they really are. Though, I think that is shifting a lot of states for instance are instituting non-partisan redistricting committees to handle district changes and updates without the involvement of elected officials. Even here in Utah they voted for this to happen, so that's a good thing.
Getting money out of politics though is desperately needed. I totally agree that campaigns should have a fixed amount. If they do allow donations they should only allow up to 1000 per individual and $0 from organizations. Corporations are NOT individuals NOR are they citizens.
PACs should ONLY be able to push for/against propositions and issues NOT elected officials. All candidate videos should ONLY be sanctioned/pushed by the candidate not by pacs and super pacs.
Who gets on the ballot is determined by laws designed to protect the two party system.
Even so, getting on the ballot requires campaigning, which requires money. For example, there is no ballot for 2020 yet, but there's a heluva lot of campaign money being spent right now.
There's also that nasty Electoral College thing that makes the presidential election effectively 50 sub-elections. That requires each candidate to register in each state to get on their ballot. No doubt, there's fees for that.
I used to think that the best (and only real effective) way to get money out of politics was to get the power out of politics. If the government can't subsidise companies/sectors, protectionism shrinks. Wherever there's opportunity for influence to be bought, I thought, money would find a way.
Recently there was an article on here that had a different opinion -- that there's really surprisingly little money in US politics. Worth a read:
Or, perhaps, publicly fund campaigns and eliminate money as a representation of free speech. Hand out X tokens to every voter each year which represent contributions and let them distribute as they wish.
I much prefer to have private money buying politicians than public money. The latter makes the politicians conspire together against the public: after all, they all win the longer, more expensive and flamboyant campaigns are.
Anecodtally Argentina has public funding, and the biggest two parties ended up keeping all the public money for campaigning, and small parties have no chance. Do you think the Libertarian or Green party or Mormon parties iwll get the same money as the Dems and Reps?
This is why the public funding being in hands of American's makes good sense. I like Yang's proposal give all American's $500 in political cash, let them choose who to give it to. If they choose nobody then it goes back into the fund for the next election.
This would also encourage politicians to actually reach out and 'touch' people enough that they give a shit to donate their political cash to that person. It might make more people get out and vote and participate in the election process. When more people vote democracy benefits.
I understand the concept, but still wary. First, this means people have a proxy to sell their vote (il give you my 500 dollar boucher for 100 cash), second it spends more money in campaigns than naturally.
There are central premises of democracy at stake here. If monetizing political power is good then we ahouls build a way to sell votes directly.
500 dollar's isn't gonna go that far... I mean that's 100 billion dollars (assuming 200 million adults who'd all use the voting cash), but that's between ALL candidates across ALL races including congress, senate, presidential, etc... It's also inclusive of 'issues' and 'local' candidates.
The candidate then can raise 0 dollars from sources that is not the public fund. Currently corporations can give 500k or more, unlimited if they pay a Super PAC supporting their candidates/issues.
If we make lobbyists, and political donations illegal EXCEPT for what the people give via the voucher system it makes it more fair than it currently is now.
Is it really that? Being rich is neither a human right nor a protected class. Anyone can go from rich to merely upper class easily. All the rich have to do is give away their money.
To be clear, I don’t support this but I am trying to understand why you make it sound like a human right violation.
Reversing the 2010 Citizens United decision would be a good start. Campaign finance reform (the flavor espoused by Bernie Sanders, perhaps) would be another great step. Unfortunately the recent history in this realm is one of dismantling the apparatuses that kept the exchange rate of money to political influence high. Crony, corrupt, corporate-subsidy capitalism rules, and politics is its servant.
I like what represent.us is doing pushing for 'anti-corruption acts' across America. If you watch their progress it really is having an effect on democracy.
Enacting something like that in congress would be a HUGE win for America.
But here, "justice" seems to mean the opposite. No matter how the poker game works out, the dealer redistributes the winnings to everyone including those who made foolish bets.
For what it's worth, I think that capital gains should be taxed at a lower rate because people are putting their own wealth on the line. Someone who buys a stock with $100 could lose the entire $100. Yet if that person gets a dividend of, say, $3 in return for the investment, the authors want this $3 to be treated like ordinary income. But people in regular jobs don't put any capital at risk. The worst that can happen is that the boss cheats them and they don't get paid. In other words, they don't get the $3. They don't put any of their savings at risk.