It’s time to re-normalize taxes on the morbidly rich (and leave them where they are on working class people) so we can again have a growing economy and a prosperous middle class
Sep 28, 2022·edited Sep 28, 2022Liked by Thom Hartmann
One of the ways the morbidly rich use their unfathomable wealth is to engage in various forms of real estate speculation. As a result, their monies have contributed to the rising cost of rent, home prices, and thus homelessness.
In response, advocates for the homeless in Los Angeles have placed an innovative measure on the November ballot that deserves national attention. The measure calls for a 4-5% tax on real estate transactions over $5 million. Proceeds from this tax would assist seniors at risk of eviction, provide legal aid for renters facing illegal removal from their homes, promote construction of low-cost housing, and render direct aid to the homeless.
This is measure ULA (United for Los Angeles). Its principal sponsors are a host of organizations devoted to helping the homeless. The public face of this measure is comedian Adam Conover. Perhaps he might be available for an interview on your program?
A special word of thanks to the Orange Juice blog for making me aware of this initiative.
Since that tax on real estate transactions applies to the higher end, I wonder if it isn't related to discouraging the laundering of dirty money. Here's why I say that - a few years ago Vancouver was a magnet for laundering money, especially of Chinese origin. Simultaneously, money was being laundered through Vancouver-area casinos. The real estate market went sky-high, and homes for the working-class also followed the trend, making homebuying unaffordable for them. Local government introduced some measures to discourage this practice, which led to that money heading east, to Toronto and Montreal. As a result, Toronto has many condos sitting empty, purchased solely for investment purposes, not for living in. So I wonder if California isn't being preemptive in discouraging this type of money laundering from happening in their locality?
Very interesting question. I have no idea whether this is a factor. Also, it would not be a surprise if the LA initiative echoes what happened in Vancouver. The Vancouver policy seems to have worked!
Agree on the laundering, but it's possible some of it is just rich-bitches trying to find a safe place to park all that money we let them get cutting taxes. People know the stock market is a lot riskier, and it's too easy to follow the trail.
Thanks for this Primer on taxes and impact on the economy and people.
When I say people I’m referring to those average Americans, who are at the mercy of the wealthy, who also happen to be the most powerful in this and many other countries in the world. Power is money.
I always think of the Republicans like a scene from the Wizard of Oz.
As long as the truth is hidden , just like the Wizard, they retain wealth and power .
‘ I am the great and powerful Oz’ . Substitute Trump, Maga, Republican .
Then the curtain gets pulled aside and we know exactly who Oz is. A con man , a thief and a bully.
They’ve progressed , or regressed to thugs.
Thugs who possess all of the Character of an Oz.
Appears after all to be None.
The Wizard is a imposter. Good name for the current Republican Party.
Marx repudiated Ricardo’s so-called « Iron Law. » Workers, through the power of unions, do have a say in their wages. They don’t have to just take whatever the employer deigns to offer them. Unions are crucial in the struggle between employers and labor. That’s why Reagan had to kneecap them.
Republican brains are prone to think in good/evil terms. To them, government is bad and therefore, if you contribute to it, you are doing a bad thing. The "revenue-ers" will only spend their money wastefully. And there you have it, the last part of their tax-cut equation and propaganda. Reagan was a master at selling that message.
Good news is many young people and women have stop buying that nonsense. They know they ARE the government.
Also explains why Republicans realize they need to undermine the election process. Because the Democratic message is causing more people to become aware that more democracy is actually a good thing for the citizenry (hence not as beneficial for the morbidly rich), it becomes the enemy.
YES! The Republicans want to talk dollars and percentages of income not purchasing power or financial security. The purchasing power they are most interested in involves literally purchasing POWER of the political kind.
While Republicans are indeed the party of tax cuts for the wealthy, Democrats have unfortunately helped the Republicans to demonize the notion of taxation for the common good by consistently campaigning against the raising of taxes in the context of a Medicare for All type national health care system (among other social programs). Hillary Clinton refused to answer Bernie Sanders during the presidential debates when he asked her if she would join him in eliminating the Social Security tax cap of $108K. Americans have been trained by both political parties to look at taxation as an evil particularly as it pertains to programs that would help poor and marginalized communities. The negative messaging during campaigns including Democratic Party primaries is that the other candidate is going to have to raise taxes to pay for "X" social or infrastructure program. This is a losing strategy that makes it more and more difficult to raise taxes to save Americans from our health care system in crisis.
So last year regular working people paid about $1.2 Trillion into Social Security and Medicare. This money goes into the general fund, and is essentially 100% from workers -- the wealthy don't have salaries.
Individual income taxes were about $2 Trillion. Click on that. The wealthy spend a lot of time telling us they pay more than half of 'income taxes.' Waitresses and janitors might want to punch them, see above, given that they and most of us pay 15% from dollar one, plus the rest.
Total revenue was about $4 Trillion, in a Covid year, causing a great deal of deficit spending, but the topic here is where is the money coming from.
( we can afford a few trillion, the National Debt Clock is a lie, using facts . . . we have more than $130 Trillion in net household wealth. Net. We need an exposé. Regular people can relate to 'that's a lie!' Relating to $50 Trillion or $130 Trillion is harder, but $130 T is more than $1 million per household, with just under 130 million households in the census, for a start. Yeah, Bill Gates walks into a room, and everybody is a millionaire, on the average . . . it should be $2 million, and growing, to put a proper progressive exclamation point on things . . . )
Finding the breakdown of the $2 Trillion is another project for my 3rd year of excruciatingly educated and accomplished unemployment. Let's say 2/3 of those taxes come from the top 10%. It's usually the lackeys for the top 1% who are whining, but seems possible. ( also note almost $300 Billion in refunds . . . )
That would be $1.3 Trillion of taxes from the richest, and about $2 Trillion from the poorest, plus corporate income taxes, and fees etc.
But I'm going to take that back, because the Data Lab breakdown says $1.5 Trillion was withheld, and $800 Billion was 'other' Regular working people have income taxes withheld, rich people pay 'other,' like capital gains taxes, would be a good skeptical starting point for a deeper analysis. Then there is the $300 Billion of refunds. Who got that?
So with that starting point, we could estimate that 2/3 of income taxes come from working people, which would make the numbers about $2.6 trillion from working people, $700 billion from the wealthy. Careful, honest counting is called for, but won't change the main insight at all.
Regardless, it's clear that working people are paying most of the taxes. Your brilliant bit with the Denmark politician reminds me that the Netherlands has one of the highest wealth disparities in the world, and Denmark should be right there as well -- but with universal free health care, universal free education, child care, parental leave, and many, many more regular benefits. Doesn't make wealth disparity right or good -- but it's a damn sight better starting point!
Then there are the corporations, 40% owned by foreign interests. 40%! Give em another tax cut, they're not even from here! Hey, wait a minute . . .
For hyperbole, all I want, is to be taxed like a corporation. Stop calling my household revenue 'household income,' for starters! The money comes in, we pay fair and reasonable expenses, and then the authorities can tax the rest! Only fair.
But if we did that, only rich households would pay much of any taxes. . . Hey, wait a minute . . . !
ps Renters pay wealth tax. Renters pay all - *all* - of the property tax their landlords owe. The landlords then deduct that expense. It's a pass through, I'm not screaming for a change, just the recognition. Plus a deduction for renters. No big harm in double deduction, I'm betting.
Mortgage holders pay wealth tax. We pay the property tax for the part we own, and the part the bank owns. Again, this is mostly proper, these taxes fund community services, but there is something not quite right. . . .
. .. and that something is that . . .
The wealthy, overwhelmingly speaking *do not* pay wealth taxes!
1% on the top 10% would generate about $400 Billion per year, pay the interest on the debt at least, new money. ( see net wealth link above ) I bet we could progressivize that, and add some property assessors and auditors and find a bunch more wealth -- just imagine the screaming, please check with Nick, I bet he would accommodate, but he doesn't answer my emails -- anyway I bet we could get to $1 Trillion of new progressive, almost painless revenue. We pay 1.3% property tax here, that's typical, the wealthy can pay too. -- best luck to US, b.rad
sounds serious, thanks for the trouble . . . been using 'b.rad' in interstate commerce since 1995, but haven't found a way to make it more official . . .
What else should we know here, about your horizon? In Covid quarantine here, after a great week plus in Paris, cashed in all of our miles, amazing city. Statue of Tom J, Winston, the Stinker, I mean Thinker, the Kiss ( No. 1 ) on the boulevards, so much more. But United did not require masks on the return, where Lufthansa did, outbound. Mild symptoms, had 5 jabs, last one just before we left. Day 3. How about you? -- bonne chance!, b.rad
Ahhh...Paris! Went when I was young and beautiful. The Louvre, that Rodin Museum, and the whole insane beauty of it. Might be worth a serious case of covid, but I hate to travel now. Going to get the new shot soon. Savor that Paris afterglow.
Not mentioned is that the tax code is actually written by lobbyists at ALEC and other right wing organizations. Specific tax breaks are embedded in the tax laws to benefit specific individuals. It is incorrect to think that Reagan or his backers in Congress wrote anything but rather they rubber stamped the texts provided by their private backers.
To me, eliminate income taxes entirely, particularly when they are PROFIT taxes on businesses, which only make a profit if they want to.
We need to go to a federal sales tax paid on EVERY sale of EVERY THING. To help those who are struggling, we send a monthly check to every American to cover the first $40K.
2 things - flat tax is very much regressive. Someone’s got $10k, they pay 10% = $1k, and are left w $9k. Richer person has $10M, pays 10% = $1M, and are left w $9M, which is 1000x what the less rich person has.
Also, the wealthiest people still buy only x pair of pants, shirts, socks & shoes. Having millions of dollars doesn’t mean they will buy a million pairs of pants, shirts, socks & shoes. So they’re still left with 1000s of times wealth of the less well-off.
The answer is to progressively pry larger *proportions* of money away from the billionaires & mega-corporations. Back to the 1st example, someone w $10k taxed at 10% is left w $9k. Richer person has $10M and is taxed at 90%, and they *still* have $1M, which is *over 100x* what less rich person has.
The wealthiest entities have the kind of money that can’t be spend over 100 lifetimes - it’s just sitting, useless, in their pockets. That money should be taxed & used for the betterment of society - education, environment, housing etc.
I think you are repeating liberal dogma rather than thinking. I also suspect you've never really been poor, never had a month where you had to choose to heat or eat. I have. More important, everyone in my neighborhood was worse off than me.
First a 10% tax wouldn't be needed. A 1% tax would more than pay for everything. If we quit the endless, pointless wars, we could make it 0.1%, but most Americans think pointless, endless war is a GOOD thing, so I'm not suggesting we quit the largest waste of tax dollars in the solar system, maybe the galaxy.
So, let's assume 1% federal sales tax on EVERY sale, no exceptions. To exempt the first $100K, we need to refund $1,000 a year to everyone. Poor people would notice $1,000 a year, but the rest of us pay a lot more taxes and would see it as a huge tax cut.
So, we send every taxpayer a monthly rebate of $1,000/12 = $83 a month. That makes the first $100k tax free. I won't mind paying 1% on the rest, it's less than I pay now, and more important. Frankly, I'd gladly pay $10,000 to not have to keep all the receipts and fill out taxes.
People forget that no matter the tax structure, PEOPLE pay all taxes. Whatever they are charged, corporations pass along, so we'd pay 1% more for products, but less than the taxes we pay now for most people. We need to send everyone $2,000 a month to cover the price increase for poor people, or better yet, implement a living minimum wage indexed to inflation. Going to a sales tax, or VAT, would have other nations paying our taxes because they want US stuff. Every US sale overseas would contribute.
For example, Apple sales are $365 billion, of which $200 billion is outside the USA. A 1% tax would have Apple pay $3.65 billion a year in taxes, compared to zero now, and 40%, or $2 billion a year, would be paid by people outside the USA wanting Apple products.
The bottom line is a well run sales tax or VAT, whatever you want to call it, would ELIMINATE income taxes entirely. It would increase prices 1%, so we need to increase earnings of working people 1%, but most pay more than that in taxes now.
One of the ways the morbidly rich use their unfathomable wealth is to engage in various forms of real estate speculation. As a result, their monies have contributed to the rising cost of rent, home prices, and thus homelessness.
In response, advocates for the homeless in Los Angeles have placed an innovative measure on the November ballot that deserves national attention. The measure calls for a 4-5% tax on real estate transactions over $5 million. Proceeds from this tax would assist seniors at risk of eviction, provide legal aid for renters facing illegal removal from their homes, promote construction of low-cost housing, and render direct aid to the homeless.
This is measure ULA (United for Los Angeles). Its principal sponsors are a host of organizations devoted to helping the homeless. The public face of this measure is comedian Adam Conover. Perhaps he might be available for an interview on your program?
A special word of thanks to the Orange Juice blog for making me aware of this initiative.
Since that tax on real estate transactions applies to the higher end, I wonder if it isn't related to discouraging the laundering of dirty money. Here's why I say that - a few years ago Vancouver was a magnet for laundering money, especially of Chinese origin. Simultaneously, money was being laundered through Vancouver-area casinos. The real estate market went sky-high, and homes for the working-class also followed the trend, making homebuying unaffordable for them. Local government introduced some measures to discourage this practice, which led to that money heading east, to Toronto and Montreal. As a result, Toronto has many condos sitting empty, purchased solely for investment purposes, not for living in. So I wonder if California isn't being preemptive in discouraging this type of money laundering from happening in their locality?
Very interesting question. I have no idea whether this is a factor. Also, it would not be a surprise if the LA initiative echoes what happened in Vancouver. The Vancouver policy seems to have worked!
Agree on the laundering, but it's possible some of it is just rich-bitches trying to find a safe place to park all that money we let them get cutting taxes. People know the stock market is a lot riskier, and it's too easy to follow the trail.
Thanks for this Primer on taxes and impact on the economy and people.
When I say people I’m referring to those average Americans, who are at the mercy of the wealthy, who also happen to be the most powerful in this and many other countries in the world. Power is money.
I always think of the Republicans like a scene from the Wizard of Oz.
As long as the truth is hidden , just like the Wizard, they retain wealth and power .
‘ I am the great and powerful Oz’ . Substitute Trump, Maga, Republican .
Then the curtain gets pulled aside and we know exactly who Oz is. A con man , a thief and a bully.
They’ve progressed , or regressed to thugs.
Thugs who possess all of the Character of an Oz.
Appears after all to be None.
The Wizard is a imposter. Good name for the current Republican Party.
‘The Imposters. ‘
A much more genteel name than ‘The Liars’
Marx repudiated Ricardo’s so-called « Iron Law. » Workers, through the power of unions, do have a say in their wages. They don’t have to just take whatever the employer deigns to offer them. Unions are crucial in the struggle between employers and labor. That’s why Reagan had to kneecap them.
Republican brains are prone to think in good/evil terms. To them, government is bad and therefore, if you contribute to it, you are doing a bad thing. The "revenue-ers" will only spend their money wastefully. And there you have it, the last part of their tax-cut equation and propaganda. Reagan was a master at selling that message.
Good news is many young people and women have stop buying that nonsense. They know they ARE the government.
Also explains why Republicans realize they need to undermine the election process. Because the Democratic message is causing more people to become aware that more democracy is actually a good thing for the citizenry (hence not as beneficial for the morbidly rich), it becomes the enemy.
YES! The Republicans want to talk dollars and percentages of income not purchasing power or financial security. The purchasing power they are most interested in involves literally purchasing POWER of the political kind.
amen, Alis! We have met the government, and it is us! :)
While Republicans are indeed the party of tax cuts for the wealthy, Democrats have unfortunately helped the Republicans to demonize the notion of taxation for the common good by consistently campaigning against the raising of taxes in the context of a Medicare for All type national health care system (among other social programs). Hillary Clinton refused to answer Bernie Sanders during the presidential debates when he asked her if she would join him in eliminating the Social Security tax cap of $108K. Americans have been trained by both political parties to look at taxation as an evil particularly as it pertains to programs that would help poor and marginalized communities. The negative messaging during campaigns including Democratic Party primaries is that the other candidate is going to have to raise taxes to pay for "X" social or infrastructure program. This is a losing strategy that makes it more and more difficult to raise taxes to save Americans from our health care system in crisis.
Thanks Thom, brilliant set.
Hard to add to that list, but these seem important to me, you probably have covered them.
( .gov ) <https://datalab.usaspending.gov/americas-finance-guide/revenue/categories/>
So last year regular working people paid about $1.2 Trillion into Social Security and Medicare. This money goes into the general fund, and is essentially 100% from workers -- the wealthy don't have salaries.
Individual income taxes were about $2 Trillion. Click on that. The wealthy spend a lot of time telling us they pay more than half of 'income taxes.' Waitresses and janitors might want to punch them, see above, given that they and most of us pay 15% from dollar one, plus the rest.
Total revenue was about $4 Trillion, in a Covid year, causing a great deal of deficit spending, but the topic here is where is the money coming from.
( we can afford a few trillion, the National Debt Clock is a lie, using facts . . . we have more than $130 Trillion in net household wealth. Net. We need an exposé. Regular people can relate to 'that's a lie!' Relating to $50 Trillion or $130 Trillion is harder, but $130 T is more than $1 million per household, with just under 130 million households in the census, for a start. Yeah, Bill Gates walks into a room, and everybody is a millionaire, on the average . . . it should be $2 million, and growing, to put a proper progressive exclamation point on things . . . )
( .gov, hover far right - so to speak ) <https://www.federalreserve.gov/releases/z1/dataviz/dfa/distribute/chart/>
Finding the breakdown of the $2 Trillion is another project for my 3rd year of excruciatingly educated and accomplished unemployment. Let's say 2/3 of those taxes come from the top 10%. It's usually the lackeys for the top 1% who are whining, but seems possible. ( also note almost $300 Billion in refunds . . . )
That would be $1.3 Trillion of taxes from the richest, and about $2 Trillion from the poorest, plus corporate income taxes, and fees etc.
But I'm going to take that back, because the Data Lab breakdown says $1.5 Trillion was withheld, and $800 Billion was 'other' Regular working people have income taxes withheld, rich people pay 'other,' like capital gains taxes, would be a good skeptical starting point for a deeper analysis. Then there is the $300 Billion of refunds. Who got that?
So with that starting point, we could estimate that 2/3 of income taxes come from working people, which would make the numbers about $2.6 trillion from working people, $700 billion from the wealthy. Careful, honest counting is called for, but won't change the main insight at all.
Regardless, it's clear that working people are paying most of the taxes. Your brilliant bit with the Denmark politician reminds me that the Netherlands has one of the highest wealth disparities in the world, and Denmark should be right there as well -- but with universal free health care, universal free education, child care, parental leave, and many, many more regular benefits. Doesn't make wealth disparity right or good -- but it's a damn sight better starting point!
Then there are the corporations, 40% owned by foreign interests. 40%! Give em another tax cut, they're not even from here! Hey, wait a minute . . .
For hyperbole, all I want, is to be taxed like a corporation. Stop calling my household revenue 'household income,' for starters! The money comes in, we pay fair and reasonable expenses, and then the authorities can tax the rest! Only fair.
But if we did that, only rich households would pay much of any taxes. . . Hey, wait a minute . . . !
dreamin'. . . best luck to US -- b.rad
ps Renters pay wealth tax. Renters pay all - *all* - of the property tax their landlords owe. The landlords then deduct that expense. It's a pass through, I'm not screaming for a change, just the recognition. Plus a deduction for renters. No big harm in double deduction, I'm betting.
Mortgage holders pay wealth tax. We pay the property tax for the part we own, and the part the bank owns. Again, this is mostly proper, these taxes fund community services, but there is something not quite right. . . .
. .. and that something is that . . .
The wealthy, overwhelmingly speaking *do not* pay wealth taxes!
1% on the top 10% would generate about $400 Billion per year, pay the interest on the debt at least, new money. ( see net wealth link above ) I bet we could progressivize that, and add some property assessors and auditors and find a bunch more wealth -- just imagine the screaming, please check with Nick, I bet he would accommodate, but he doesn't answer my emails -- anyway I bet we could get to $1 Trillion of new progressive, almost painless revenue. We pay 1.3% property tax here, that's typical, the wealthy can pay too. -- best luck to US, b.rad
You haven't incorporated "b.rad"?
Love the foreign ownership reminder. Fought that where I live.
Personally, I am headed for dis-corporation of the final kind. We all are eventually, but need to create some good-trouble on route.
sounds serious, thanks for the trouble . . . been using 'b.rad' in interstate commerce since 1995, but haven't found a way to make it more official . . .
What else should we know here, about your horizon? In Covid quarantine here, after a great week plus in Paris, cashed in all of our miles, amazing city. Statue of Tom J, Winston, the Stinker, I mean Thinker, the Kiss ( No. 1 ) on the boulevards, so much more. But United did not require masks on the return, where Lufthansa did, outbound. Mild symptoms, had 5 jabs, last one just before we left. Day 3. How about you? -- bonne chance!, b.rad
Ahhh...Paris! Went when I was young and beautiful. The Louvre, that Rodin Museum, and the whole insane beauty of it. Might be worth a serious case of covid, but I hate to travel now. Going to get the new shot soon. Savor that Paris afterglow.
Not mentioned is that the tax code is actually written by lobbyists at ALEC and other right wing organizations. Specific tax breaks are embedded in the tax laws to benefit specific individuals. It is incorrect to think that Reagan or his backers in Congress wrote anything but rather they rubber stamped the texts provided by their private backers.
To me, eliminate income taxes entirely, particularly when they are PROFIT taxes on businesses, which only make a profit if they want to.
We need to go to a federal sales tax paid on EVERY sale of EVERY THING. To help those who are struggling, we send a monthly check to every American to cover the first $40K.
2 things - flat tax is very much regressive. Someone’s got $10k, they pay 10% = $1k, and are left w $9k. Richer person has $10M, pays 10% = $1M, and are left w $9M, which is 1000x what the less rich person has.
Also, the wealthiest people still buy only x pair of pants, shirts, socks & shoes. Having millions of dollars doesn’t mean they will buy a million pairs of pants, shirts, socks & shoes. So they’re still left with 1000s of times wealth of the less well-off.
The answer is to progressively pry larger *proportions* of money away from the billionaires & mega-corporations. Back to the 1st example, someone w $10k taxed at 10% is left w $9k. Richer person has $10M and is taxed at 90%, and they *still* have $1M, which is *over 100x* what less rich person has.
The wealthiest entities have the kind of money that can’t be spend over 100 lifetimes - it’s just sitting, useless, in their pockets. That money should be taxed & used for the betterment of society - education, environment, housing etc.
I think you are repeating liberal dogma rather than thinking. I also suspect you've never really been poor, never had a month where you had to choose to heat or eat. I have. More important, everyone in my neighborhood was worse off than me.
First a 10% tax wouldn't be needed. A 1% tax would more than pay for everything. If we quit the endless, pointless wars, we could make it 0.1%, but most Americans think pointless, endless war is a GOOD thing, so I'm not suggesting we quit the largest waste of tax dollars in the solar system, maybe the galaxy.
So, let's assume 1% federal sales tax on EVERY sale, no exceptions. To exempt the first $100K, we need to refund $1,000 a year to everyone. Poor people would notice $1,000 a year, but the rest of us pay a lot more taxes and would see it as a huge tax cut.
So, we send every taxpayer a monthly rebate of $1,000/12 = $83 a month. That makes the first $100k tax free. I won't mind paying 1% on the rest, it's less than I pay now, and more important. Frankly, I'd gladly pay $10,000 to not have to keep all the receipts and fill out taxes.
People forget that no matter the tax structure, PEOPLE pay all taxes. Whatever they are charged, corporations pass along, so we'd pay 1% more for products, but less than the taxes we pay now for most people. We need to send everyone $2,000 a month to cover the price increase for poor people, or better yet, implement a living minimum wage indexed to inflation. Going to a sales tax, or VAT, would have other nations paying our taxes because they want US stuff. Every US sale overseas would contribute.
For example, Apple sales are $365 billion, of which $200 billion is outside the USA. A 1% tax would have Apple pay $3.65 billion a year in taxes, compared to zero now, and 40%, or $2 billion a year, would be paid by people outside the USA wanting Apple products.
The bottom line is a well run sales tax or VAT, whatever you want to call it, would ELIMINATE income taxes entirely. It would increase prices 1%, so we need to increase earnings of working people 1%, but most pay more than that in taxes now.