They buy his securities. If they have a problem with him, they sell those securities. That's accountability. Putting a sticker on your Tesla that you bought it before knowing Elon was crazy isn't really accountability.
"Tax the rich"? No surprise. See President Obama's debate comment in response to the ABC reporter when President Obama acknowledged higher marginal rates on capital gains would reduce, not increase federal revenues: "
CHARLEY GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28 percent. It’s now 15 percent. That’s almost a doubling, if you went to 28 percent.
But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.
OBAMA: Right.
GIBSON: And George Bush has taken it down to 15 percent.
OBAMA: Right.
GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.
So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.
You misrepresented what Obama said, which doesn't surprise me. What he went on to say was to explain the root of this discontent: we're taxing labor at over three times the rate of capital. So if I amass a large sum of money and throw it into dividend payers and stocks, while every one else is living with a third rate social safety net, that might be a cause for concern.
In the meantime, this largesse COMPOUNDS over time.
I needn't explain what this has done to our political system, with help from SCOTUS.
Cutting taxes does not raise revenue. The simple fact is revenue always goes up as long as the economy expands. Cutting taxes doesn't juice revenue.
How did I misrepresent then-candidate Obama by quoting him, word for word?
My point was that "fairness", regardless of impact on revenue, has been a theme for 20+ years among progressives and some Democrats, and some Republicans and Independents, too!
Neither Mr. Gibson, nor then-candidate Obama actually had an accurate understanding on how public finance/tax provisions on capital investment actually affect growth.
You are right, revenues DO increase where there is economic expansion and growth.
But, your comments suggest marginal tax rates don't affect economic growth. it just isn't so.
Yes, the impact of a raise in marginal tax rates from 20% to say 28% might not be readily identifiable given all of the other factors impacting growth.
However, doubling or tripling the top marginal income tax rate on invested capital (as you suggest is needed for "fairness") would clearly dampen growth, and in turn, federal revenues, increasing our federal deficits from their already astronomical $1 - $2 Trillion a year, further increasing our national debt which is $39+ Trillion.
We've added $26+ Trillion to our national debt since President Obama increased spending via taxpayer subsidized coverage per Health Reform. We've added $35 Trillion since President George W. Bush took office - since our last balanced federal budget.
We do not have a revenue problem, we have a spending problem.
Since President George W. Bush and President Obama, neither Trump 1, Biden, nor Trump 2 has done anything to curtail spending in excess of revenues. So, while revenues have grown from $2 Trillion a year in 2001 to $5+ Trillion a year today, spending has increased even faster from $2 Trillion a year in 2001, to $7+ Trillion a year in 2026.
Without change, projections are we will have a national debt of $167+ Trillion in 30 years.
Last thing we need is a reduction in the rate of growth prompting a reduction in the rate of increased tax revenues.
You MISQUOTED him and the full exchange is on the internet.
Secondly, the remainder of your post, a waste of time and bandwidth, are nonsense.
If Bush had kept the Clinton era tax template in place, deficits, and therefore debt, would have been either level, or declining.
Tax policy has never moved the economy much, and the empirical evidence is there to prove it.
Recessions come and go, unemployment waxes and wanes, and the general economy doesn't really care where rates sit.
As far as blaming ACA for "spending," the financial crisis obliterated Federal revenues. That's what drove the debt up. By 2015, the deficit had been cut by about 70%. Higher taxes would have gotten us to a surplus, at least until the pandemic
Ive explained this 1000 times on line . No one is moved by empirical evidence or hard data, so blab away. I've only been at this for a mere three decades.
No. Perhaps you forget President Obama claiming George "W" Bush was unpatriotic for running a $160 Billion deficit in FY 2006. What we wouldn't give for a $160 Billion annual deficit these days.
During "W"'s presidency, in five out of the eight years, federal revenues exceeded revenues from every year of President Clinton's term in office.
And, other than a decline in FY 2008 - 2009 -2010 due to the Great Recession, revenues have consistently increased every year since 2003 and are now ~$5.6 Trillion.
However, spend has consistently increased even more and most every year! It grew from ~$2B in "W"'s first year, to $3.4 in President Obama's first year, to $4.1B in Trump's first year, to $6.0 in Biden's first year, and is now ~$7.4 Trillion.
Thanks for confirming, as you say, that people are not "moved by the empirical evidence or hard data."
Interesting that you assert "No one is moved by empirical evidence or hard data" yet post on an economist's (Ms. Schrager's) substack.
You need to be cautious when attempting to ascertain motives but I do wonder if some of the billionaire resentment is precisely because in America, it has generally been built through hard work, talent (and some luck).
It might be easier on the psyche of some of the anti-billionaires to merely attribute it to birth or something unearned.
Taxing individuals isn't going to work, but antitrust is more or less dead. Breakup of the major companies, which really are conglomerates at this point, isn't even peeking through the overton window.
We already tax assets via property taxes on our homes. This creates a run rate expense on an illiquid asset for both renters (their landlords pass along the tax) and homeowners. One can argue the price of the asset is discounted to reflect the tax costs as well as supply and demand for property (ie that without taxes, rents and house prices would be the same) but the doubling of mortgage rates post-COVID without a corresponding fall in home prices belies that (or pushes it into the “in the long run we are all dead” category of arguments).
So while I am against punitive taxation of classes of people based upon hate or envy, our property tax system shows the economy can tolerate an annual levy (say 1-2 pct) on illiquid assets (although the history of these in Europe hasn’t been successful). Like property taxes, it is better if this applies to everyone rather than a few scapegoats, and there’d have to be a way to exclude bonds and loans. Of course, a Federal asset tax would likely be illegal so I think it would be better to:
Replace the estate tax with a capital gains tax at death (with a generous exclusion)as Canada and several other countries already do.
Eliminate the tax deduction for transfer or untaxed, appreciated assets to foundations and endowments. When a wage earner gets paid, taxes are withheld, and if they then donate to charity they get those taxes refunded. A tycoon with appreciated assets should have to pay taxes on any transfer of ownership, and then those get taxes refunded if the transfer is to a charity- NOT get a deduction based upon on untaxed asset values.
Essentially, if you want a full charitable deduction then donate with after tax assets to an annual fund type program where the charity is meant to be disbursed promptly. If one wishes to donate to a foundation or endowment or charitable gift fund, it has to be with after-tax assets, and change the deduction rules so that only 1/20th of the amount is deductible, over the next 20 years- amortization of benefit rather than immediate, as this would match the structure of endowments/foundations.
A billionaire’s game is to sell “x” number of shares for yourself at capital gains tax rates and then transfer the same number of shares to your foundation (which maybe employs your kids or helps buy fame and influence for you). The partial deduction on the asset transfer reduces your effective tax rate on the shares sold in the personal account.
Used to drive me nuts when Buffett claimed his secretary paid higher tax rates than he did, and then argued for raising income taxes. Of course, Buffett is subject to capital gains taxes mostly, and higher income tax rates would reduce his effective tax rate by increasing the deduction on assets he transferred to the Gates foundation. Dishonest.
I’d love to see Capital gains and income taxes equalized (say 33 percent flat tax on everything over “x” in annual income, with few deductions), perhaps averaging Capital gains/losses out over a 10 year period to smooth them.
I’d also more to see the corporate income taxes eliminated and replaced with a tax on domestics revenues, with deductions for domestic wages paid and domestic CGS/inputs. Encourages paying people wages, encourages exports from domestic production and taxes imports.
High cost businesses like groceries wouldn’t pay much on their revenues. High margin businesses like tech companies would pay taxes (or their customers would) and the royalties they pay to tax havens for their own IP would no longer be deductible. Encourages keeping IP and investment at home.
Anyway- just a pipe dream. We’ll sail along until a crisis and then either inflate our way out or raise taxes on everyone but try to make the medicine go down smoother by pillorying some scapegoats.
And at least fix the capital gains rate in effect on the day of investment, not sale. Why should entrepreneurs and investors need to add rate risk to all the other risk they take? It evens out in the end and so easy to do.
You mention that the Europe has dynastic wealth whereas the US has home-grown its billionaires, however the baby boomers are about to transfer up to $124T in wealth (Michigan Journal of Economics) and the US will look very different if that happens. We need a serious conversation on step-up basis and estate/inheritance tax, not wealth tax.
Agree with you 100% on the wealth tax. But are shareholders really able to hold Musk accountable? The SEC & the EPA have had no luck
They buy his securities. If they have a problem with him, they sell those securities. That's accountability. Putting a sticker on your Tesla that you bought it before knowing Elon was crazy isn't really accountability.
"Tax the rich"? No surprise. See President Obama's debate comment in response to the ABC reporter when President Obama acknowledged higher marginal rates on capital gains would reduce, not increase federal revenues: "
CHARLEY GIBSON: All right. You have, however, said you would favor an increase in the capital gains tax. As a matter of fact, you said on CNBC, and I quote, “I certainly would not go above what existed under Bill Clinton,” which was 28 percent. It’s now 15 percent. That’s almost a doubling, if you went to 28 percent.
But actually, Bill Clinton, in 1997, signed legislation that dropped the capital gains tax to 20 percent.
OBAMA: Right.
GIBSON: And George Bush has taken it down to 15 percent.
OBAMA: Right.
GIBSON: And in each instance, when the rate dropped, revenues from the tax increased; the government took in more money. And in the 1980s, when the tax was increased to 28 percent, the revenues went down.
So why raise it at all, especially given the fact that 100 million people in this country own stock and would be affected?
OBAMA: Well, Charlie, what I’ve said is that I would look at raising the capital gains tax for purposes of fairness.
You misrepresented what Obama said, which doesn't surprise me. What he went on to say was to explain the root of this discontent: we're taxing labor at over three times the rate of capital. So if I amass a large sum of money and throw it into dividend payers and stocks, while every one else is living with a third rate social safety net, that might be a cause for concern.
In the meantime, this largesse COMPOUNDS over time.
I needn't explain what this has done to our political system, with help from SCOTUS.
Cutting taxes does not raise revenue. The simple fact is revenue always goes up as long as the economy expands. Cutting taxes doesn't juice revenue.
How did I misrepresent then-candidate Obama by quoting him, word for word?
My point was that "fairness", regardless of impact on revenue, has been a theme for 20+ years among progressives and some Democrats, and some Republicans and Independents, too!
Neither Mr. Gibson, nor then-candidate Obama actually had an accurate understanding on how public finance/tax provisions on capital investment actually affect growth.
You are right, revenues DO increase where there is economic expansion and growth.
But, your comments suggest marginal tax rates don't affect economic growth. it just isn't so.
Yes, the impact of a raise in marginal tax rates from 20% to say 28% might not be readily identifiable given all of the other factors impacting growth.
However, doubling or tripling the top marginal income tax rate on invested capital (as you suggest is needed for "fairness") would clearly dampen growth, and in turn, federal revenues, increasing our federal deficits from their already astronomical $1 - $2 Trillion a year, further increasing our national debt which is $39+ Trillion.
We've added $26+ Trillion to our national debt since President Obama increased spending via taxpayer subsidized coverage per Health Reform. We've added $35 Trillion since President George W. Bush took office - since our last balanced federal budget.
We do not have a revenue problem, we have a spending problem.
Since President George W. Bush and President Obama, neither Trump 1, Biden, nor Trump 2 has done anything to curtail spending in excess of revenues. So, while revenues have grown from $2 Trillion a year in 2001 to $5+ Trillion a year today, spending has increased even faster from $2 Trillion a year in 2001, to $7+ Trillion a year in 2026.
Without change, projections are we will have a national debt of $167+ Trillion in 30 years.
Last thing we need is a reduction in the rate of growth prompting a reduction in the rate of increased tax revenues.
You MISQUOTED him and the full exchange is on the internet.
Secondly, the remainder of your post, a waste of time and bandwidth, are nonsense.
If Bush had kept the Clinton era tax template in place, deficits, and therefore debt, would have been either level, or declining.
Tax policy has never moved the economy much, and the empirical evidence is there to prove it.
Recessions come and go, unemployment waxes and wanes, and the general economy doesn't really care where rates sit.
As far as blaming ACA for "spending," the financial crisis obliterated Federal revenues. That's what drove the debt up. By 2015, the deficit had been cut by about 70%. Higher taxes would have gotten us to a surplus, at least until the pandemic
Ive explained this 1000 times on line . No one is moved by empirical evidence or hard data, so blab away. I've only been at this for a mere three decades.
No. Perhaps you forget President Obama claiming George "W" Bush was unpatriotic for running a $160 Billion deficit in FY 2006. What we wouldn't give for a $160 Billion annual deficit these days.
During "W"'s presidency, in five out of the eight years, federal revenues exceeded revenues from every year of President Clinton's term in office.
And, other than a decline in FY 2008 - 2009 -2010 due to the Great Recession, revenues have consistently increased every year since 2003 and are now ~$5.6 Trillion.
However, spend has consistently increased even more and most every year! It grew from ~$2B in "W"'s first year, to $3.4 in President Obama's first year, to $4.1B in Trump's first year, to $6.0 in Biden's first year, and is now ~$7.4 Trillion.
Thanks for confirming, as you say, that people are not "moved by the empirical evidence or hard data."
Interesting that you assert "No one is moved by empirical evidence or hard data" yet post on an economist's (Ms. Schrager's) substack.
I didn't forget anything, Jack. And counting in nominal dollars is only the first of many rookie errors you've made.
Good day.
I'll keep my opinions about Ms. Schrager's "insights" to myself.
Bye, Jack. Not going down another rabbit hole with another rube.
That was almost 20 years ago.
"In Europe, wealth is usually dynastic; in America, almost all of our billionaires are self-made."
This is just a bad take, I'm sorry. I'll stay subscribed for now, but I'd challenge you to define "self-made."
You need to be cautious when attempting to ascertain motives but I do wonder if some of the billionaire resentment is precisely because in America, it has generally been built through hard work, talent (and some luck).
It might be easier on the psyche of some of the anti-billionaires to merely attribute it to birth or something unearned.
Taxing individuals isn't going to work, but antitrust is more or less dead. Breakup of the major companies, which really are conglomerates at this point, isn't even peeking through the overton window.
Eat the rich!
We already tax assets via property taxes on our homes. This creates a run rate expense on an illiquid asset for both renters (their landlords pass along the tax) and homeowners. One can argue the price of the asset is discounted to reflect the tax costs as well as supply and demand for property (ie that without taxes, rents and house prices would be the same) but the doubling of mortgage rates post-COVID without a corresponding fall in home prices belies that (or pushes it into the “in the long run we are all dead” category of arguments).
So while I am against punitive taxation of classes of people based upon hate or envy, our property tax system shows the economy can tolerate an annual levy (say 1-2 pct) on illiquid assets (although the history of these in Europe hasn’t been successful). Like property taxes, it is better if this applies to everyone rather than a few scapegoats, and there’d have to be a way to exclude bonds and loans. Of course, a Federal asset tax would likely be illegal so I think it would be better to:
Replace the estate tax with a capital gains tax at death (with a generous exclusion)as Canada and several other countries already do.
Eliminate the tax deduction for transfer or untaxed, appreciated assets to foundations and endowments. When a wage earner gets paid, taxes are withheld, and if they then donate to charity they get those taxes refunded. A tycoon with appreciated assets should have to pay taxes on any transfer of ownership, and then those get taxes refunded if the transfer is to a charity- NOT get a deduction based upon on untaxed asset values.
Essentially, if you want a full charitable deduction then donate with after tax assets to an annual fund type program where the charity is meant to be disbursed promptly. If one wishes to donate to a foundation or endowment or charitable gift fund, it has to be with after-tax assets, and change the deduction rules so that only 1/20th of the amount is deductible, over the next 20 years- amortization of benefit rather than immediate, as this would match the structure of endowments/foundations.
A billionaire’s game is to sell “x” number of shares for yourself at capital gains tax rates and then transfer the same number of shares to your foundation (which maybe employs your kids or helps buy fame and influence for you). The partial deduction on the asset transfer reduces your effective tax rate on the shares sold in the personal account.
Used to drive me nuts when Buffett claimed his secretary paid higher tax rates than he did, and then argued for raising income taxes. Of course, Buffett is subject to capital gains taxes mostly, and higher income tax rates would reduce his effective tax rate by increasing the deduction on assets he transferred to the Gates foundation. Dishonest.
I’d love to see Capital gains and income taxes equalized (say 33 percent flat tax on everything over “x” in annual income, with few deductions), perhaps averaging Capital gains/losses out over a 10 year period to smooth them.
I’d also more to see the corporate income taxes eliminated and replaced with a tax on domestics revenues, with deductions for domestic wages paid and domestic CGS/inputs. Encourages paying people wages, encourages exports from domestic production and taxes imports.
High cost businesses like groceries wouldn’t pay much on their revenues. High margin businesses like tech companies would pay taxes (or their customers would) and the royalties they pay to tax havens for their own IP would no longer be deductible. Encourages keeping IP and investment at home.
Anyway- just a pipe dream. We’ll sail along until a crisis and then either inflate our way out or raise taxes on everyone but try to make the medicine go down smoother by pillorying some scapegoats.
Apologies for the overlong rant
And at least fix the capital gains rate in effect on the day of investment, not sale. Why should entrepreneurs and investors need to add rate risk to all the other risk they take? It evens out in the end and so easy to do.
You mention that the Europe has dynastic wealth whereas the US has home-grown its billionaires, however the baby boomers are about to transfer up to $124T in wealth (Michigan Journal of Economics) and the US will look very different if that happens. We need a serious conversation on step-up basis and estate/inheritance tax, not wealth tax.
Apply capital gains taxes. Eliminate inheritance taxes.