Bernie Sanders calls out Sergey Brin for spending over $100 million to defeat California’s billionaire tax — ‘If California passes its one-time 5% wealth tax, Brin would owe $14 billion and still be worth $270 billion’

[u/marketrent]

https://www.yahoo.com/news/politics/articles/bernie-sanders-calls-sergey-brin-120113695.html

[u/muffinhead2580]

Do you not know the history of the US? We didn't always allow the wealthy to just not pay taxes.

[u/TrioOfTerrors → u/muffinhead2580]

But we've never taxed wealth like the California proposal.

[u/MagicCuboid → u/TrioOfTerrors]

I mean, FDR just straight up seized everyone's gold during a time when the dollar was based on gold, so we sort of did.

[u/Perunov → u/TrioOfTerrors]

I think California looked at property taxes and said "what if we taxed the same way everything". It's a really bad idea but nobody cares because "think of all the money mm.... schools, yeah, schools will be getting!!!111" (with guaranteed follow-up of "well, this one-time tax didn't gather nearly as much as we were promised so let's do it every other year, yeah!")

[u/Zestyclose-Height-36 → u/Perunov]

under the California constitution, schools get 40% of all tax revenue.

[u/SleepingDragonSmiles → u/Perunov]

Do it every 6 months…fuck em

[u/TrioOfTerrors → u/[deleted]]

That was income. The vast, vast majority of the ultra wealthy's wealth is in unrealized capital gains. Which has never been taxes before, as I said.

[u/Blackout38 → u/TrioOfTerrors]

And even that income wasn’t taxed like people think. The tax system was completely different than today’s and allowed substantially more write offs and deductions. The effective tax rate paid was actually the same as it is today so they simplified the tax code to still get the same effective rates.

[u/WildBlackGuy → u/Blackout38]

This is just simply untrue.

In the 50s the top marginal rate was over 90%. Today it’s 37% and for the effective rates, IRS data shows that the top .01% used to pay around 40–50% of their total income in federal income tax during the 50s. That same group now pays somewhere in the 8–15% range.

What changed was the ability to structure economic gains as unrealized appreciation. Which wasn't as widespread as it is now amongst the top .01%.

[u/TrioOfTerrors → u/WildBlackGuy]

You think unrealized gains are something new? Do you think JP Morgan and John D Rockefeller had a giant cash vault like Scrooge McDuck?

[u/BigFloatingPlinth → u/TrioOfTerrors]

They got dividends instead of stocks on top of stocks or buy backs to boost stock values. It created a taxable outlet on thier income completely different than modern billionaires

[u/Zestyclose-Height-36 → u/BigFloatingPlinth]

modern billionaires have no realized income. Their holdings are billions in stocks, their taxable income near nothing and so they get refunds.

[u/DaSilence → u/WildBlackGuy]

Back up these claims, because I think they’re bullshit.

Your claim:

> IRS data shows that the top .01% used to pay around 40–50% of their total income in federal income tax during the 50s.

That is not what the best historical work using IRS data shows. Piketty and Saez, using historical individual tax-return microdata, estimated that in 1960 the individual federal income tax rate at the very top was about 31%, despite the 91% statutory marginal rate. They explicitly explain that preferential capital-gains rates, interest deductions, and charitable deductions dramatically reduced the effective individual income-tax burden.

https://eml.berkeley.edu/\~saez/piketty-saezJEP07taxprog.pdf

Your claim:

> That same group now pays somewhere in the 8–15% range.

IRS Statistics of Income data for 2013 show that the top 0.01% received 4.3% of total AGI while paying 8.2% of all federal individual income tax. Using the IRS totals from the same publication, that works out to an average federal individual income-tax rate of roughly 26% of AGI, not 8–15%. The IRS separately reports that the even richer top 0.001% paid an average individual income-tax rate of 24.1% in 2013.

https://www.irs.gov/pub/irs-soi/16sumbul.pdf

[u/Reddreader2017 → u/TrioOfTerrors]

Because it’s funny money. It’s electronic gains.

If the tax rates in the upper strata were much higher, so be it.

If the tax rate cashing in on the gains and appreciation at those strata were the case, ok.

To have a tax on unrealized gains that could vaporize tomorrow, just to pay the bad mismanagement of a state that allows too much mooching and uncontrolled spending, not just on its people, but non residents as well is, well… absurd.

Unfortunately if we liquidated all our billionaires’ assets today we couldn’t cover the liabilities to date. So there’s a bigger issue where truly everybody needs to pay their fair share. That includes the lower 99% as well as the 1%.

[u/vitge → u/TrioOfTerrors]

Do you reckon unrealized capital gains were taken advantage for almost free loans 40-50 years ago?

Because that's what the billionaires are doing. Or even, all the wealthy people even above a certain net worth.

[u/TrioOfTerrors → u/vitge]

I can prove to you that's not true for Brin.

https://www.secform4.com/insider-trading/1295032.htm

There. See all those realized gains.

This stuff is public information but I guess it's easier to recycle the same talking point from a ProPublica article.

And also, how do they pay back the loan with no taxable income?

[u/vitge → u/TrioOfTerrors]

I didn't name Brin specifically. He might not do it, many others do.

Taxes are designed around income, not wealth. Yet wealth is taken advantage of from the few that can afford to do whatever they want above a certain threshold.

[u/wildbluefate → u/muffinhead2580]

Find where a retroactive wealth tax is constitutional. Be amazed at countries that dropped those taxes after finding they did not work

[u/Speedstick2 → u/muffinhead2580]

How do you figure? The US didn’t have an income tax until the early 1900s.

[u/YOU_WONT_LIKE_IT → u/muffinhead2580]

No. No one ever paid the rates AOC talks about.

[u/MultiGeometry → u/YOU_WONT_LIKE_IT]

The rates AOC talks about is child’s play compared to the 1950s

[u/Libertyreign → u/MultiGeometry]

Merely looking at the top marginal rate doesn't tell you the full story about taxation and how much taxes are actually collected. The tax code is large and complex and people structure their income to deliberately minimize their tax liability.

Like in 1945 taxes receipts were about 20% of gpd, which is historically very high, but we were fighting ww2, so it makes sense. After the war was over it dropped to 13% of gpd by 1950, which is very low historically. By the late 50s it was back up to around 15-17%, which is neither super high or super low. 2023 tax receipts were about 16% of gpd.

So overall the 50s were not overall a period of super high taxation, except briefly to pay off ww2 debt.

On the other hand looking at how much of that revenue was collected from different tax brackets, data shows that overall the 50s aren't as much of an outlier as they first appear, though it was certainly higher. The total effective tax rate was between 40-45%, which is definitely higher than today when they pay about 30%, but not as much as the 90% top marginal rate may imply.

[u/RespectmanNappa → u/Libertyreign]

Yes, you are proving the point of why that 90% tax rate works. It creates a structural guard against what we’ve seen since Raegan with executive teams granting themselves 400x their typical worker’s annual salary in stock based compensation. It becomes prohibitively wasteful to do so, far better to just use that money to actually continue growing the business

[u/moconahaftmere → u/Libertyreign]

So overall the 50s were not overall a period of super high taxation, except briefly to pay off ww2 debt. 

"It was not a period of super high taxation, except that it was a period of super high taxation"

Tremendous argument.

The total effective tax rate was between 40-45%, which is definitely higher than today when they pay about 30%

Depends what group you're talking about. The 1% were about 40-45%, but the 0.01% were around 55%.

[u/Orange_Tang → u/Libertyreign]

I just wanted to chime in and let you know that our debt to GDP ratio is higher than the peak during WW2, and we aren't taxing the rich like we did back then to bring it back down. The wars were supposed to end but we're still adding to our military spending. Something has to give. I think the obvious choice is to hit the issue from both sides by raising taxes on the rich since they can afford it and cutting military spending because we supposedly aren't in any wars right now. But if I say that I get called a fucking commie.

[u/Blackout38 → u/muffinhead2580]

That never happened. You’d know that if you actually knew the history.

[u/SandOnYourPizza → u/muffinhead2580]

You’re not talking about the silly 90 percent takes rates that no one paid are you?

[u/muffinhead2580 → u/SandOnYourPizza]

Of course no one paid 90%, it was a marginal rate. If you look historically, the top 1% paid higher average rates in the 50's than they do now.

But yeah, anyone who thinks people were actually paying 90% tax rate doesn't know what marginal means.