This is absolutely it. Any taxes on just the ultra wealthy raise so little money for the rest of the population that any large scale money raising requires taxes on doctors, lawyers, engineers, small business owners, etc.
Pro-government spending advocates don’t like to emphasize this because people become a lot less supportive of these things when they see members of their own community getting hit.
> Any taxes on just the ultra wealthy raise so little money for the rest of the population that any large scale money raising requires taxes on doctors, lawyers, engineers, small business owners, etc.
That's very much untrue. What is true is that no one even bothers reducing the favorable tax treatment of the ultrawealthy, only taxing high-end labor income and pretending. As long as both long-term capital gains and pass-through business income are extremely tax-favored, it doesn't matter what rates or brackets you set for normal income, you arent really taxing the ultrawealthy. You could raise tremendous revenue by eliminating those favorable categories and treating all income as income, and only raising nominal rates by adding new brackets above the current top bracket. The reason that isn't done isn't that you can't raise enough revenue that way, its because the ultrawealthy are very good at propagandizing that the forms of income they earn vastly disproportionately ought to be untouchable.
>The reason that isn't done isn't that you can't raise enough revenue that way
Nah, it's coz any bill that attacks the ultrawealthy can be spiked to attack the moderately wealthy instead (ideal) or as well as (failing that it's better to make them allies).
This is where lobby $$$ really pays off - when tweaking the less overtly visible finer details of bills.
This pairs with a PR campaign of:
* We simply dont have that much money.
* You'd be better off not taxing it because then we wont innovate and then youll be sorry.
* We will leave the country entirely and then youll be sorry.
* You're next on the government hitlist (weirdly this one works even seems to on people who earn, like, $40k a year).
How so? It’s basic math. The middle and upper middle class is still responsible for the vast majority of income.
> you arent really taxing the ultrawealthy. You could raise tremendous revenue
See, you’re getting confused because it’s not “tremendous” in the scheme of tax revenue. The only thing that would accomplish is helping with income inequality (i.e. it’s punitive towards the rich). This is fine if that’s your goal but it’s not going to pay for anything like basic income, universal healthcare, or major infrastructure. It won’t even balance the existing budget.
> The reason that isn't done isn't that you can't raise enough revenue that way,
Yes it is, full stop. A 100% tax rate on the top .1% would bring in about 500 billion annually (~$3 mil * 150 mil filers * 0.001) . That’s not even enough to cover the “cheap” infrastructure bill being proposed.
> they earn vastly disproportionately ought to be untouchable.
Careful with that. You’re also talking about how much of the middle classes retirement is structured there. Long term capital gains are used by everyone.
It would certainly help if the ultra wealthy and global corporations would just pay their fair share rather than use possible combination of barely-legal structures to avoid being taxed, bribe officials to create special exemptions, offload money to tax heavens and scare-monger about losing jobs whenever an actual tax increase is due.
The USA cannot even properly finance the IRS to go after the super wealthy tax cheats. Their bought-and-paid-for politicians would rather the IRS stick it to the little guys, ffs.
The question is how far the powerful are willing to push the system in order to maintain their relative status (relative to each other, not to 'us') and how much the disenfranchised are willing to take.
If the powerful are careless, an angry mob will spice up the game. But of course that's just opportunity for other powerful entities to advance their relative status.
I would say rhetorically that ex post facto (am i using that right? kind of like caused by definition) taxes on the ultra wealthy that don't achieve that aren't actually taxes that target the ultra wealthy, but rather just marketing.
I think Biden has tried get ahead of that issue with his no higher taxes on 400k pledge. We'll wait to see the reality though.
Context: According to [0], $400,000 is in the top 1% of individual income across the US. It's in the top 3% of household income within California [1] and top 2% in SF/Oakland/Fremont [2].
Dual tech worker couples making more than $400k in Silicon Valley are wealthy, and always have been. There's no suddenly about it.
They aren't ultrawealthy members of the capitalist class, sure. But they are definitely wealthy, and pretending that they aren't is just phenomenally out of touch.
I don’t disagree but plenty of people I know who voted for Biden didn’t think it applied to them.
$400k per year barely lets you buy a home in the Bay Area.
And regardless, what makes you think they’ll stop at $400k? That’s the point. Eventually a tax bill gets passed some couple making $150k need to “pay their fair share”.
Pro-government spending advocates don’t like to emphasize this because people become a lot less supportive of these things when they see members of their own community getting hit.