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submitted 3 days ago* (last edited 2 days ago) by ccunning@lemmy.world to c/nostupidquestions@lemmy.world

I’m looking for serious answers to understand the mentality. Please avoid the snark. I know it’s low hanging and tempting but I’m pretty sure most, if not all, of use here on Lemmy “get it”.

I just can’t get out of my head how absurd it is that we, in the U.S. anyway, put so much of the tax burden on working class folks instead of those most benefiting from our economic system.

It seems to me the standard deduction should be at least the median personal income (~$40k) if not the mean(~$60k) with progressive tax brackets adjusted to cover costs thereafter and possibly a supplemental wealth tax.

But I’m not an economist so trying to understand why I’m wildly wrong and this would be a terrible idea either from an economic perspective or from a political perspective.

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[-] Randomgal@lemmy.ca 15 points 1 day ago

The argument is: They're poor, what are they gonna do a about it?

[-] AdNecrias@lemmy.pt 9 points 2 days ago

They are less powerful and easier to tax. It's all about power, The rich by themselves are less powerful than the masses when the masses are together. Which is why they're taxed at all. There's something more powerful

[-] ultranaut@lemmy.world 6 points 2 days ago

If you are talking about federal income taxes, they are actually progressive. The vast majority of the money collected comes from the top 50%, the 1% pays something like 25% of the total just by themselves. Its why Republicans and billionaires bitch about it so much and want to eliminate the federal income tax. In reality poor people are mostly impacted by sales taxes, and that's because of the basic economics involved that make sales taxes inherently regressive.

[-] Treczoks@lemmy.world 8 points 1 day ago

The problem is creative tax application AKA tax evasion. Somehow, rich people manage to pay way below what one would expect in relation to their income.

[-] Zacpod@lemmy.world 3 points 1 day ago

The rich control the laws and they don't want to contribute.

[-] Dasus@lemmy.world 10 points 2 days ago

Blind greed and incredible selfishness.

Basically you're trying to reason madness.

[-] weew@lemmy.ca 5 points 2 days ago* (last edited 2 days ago)

Rich people want to get richer. Rich people can afford to bribe/wine and dine/trade favors with the select few who actually write the law.

That is all. Nobody enjoys paying taxes, but the rich are just the ones in a position to actually do something about it.

[-] RBWells@lemmy.world 4 points 2 days ago

I think it's ok for everyone to pay something, and income tax is progressive.

Social security tax is regressive, and sales tax is regressive. So I'd remove the cap on social security, tax unearned income more, and exempt more necessary items from sales tax, if looking to get more from the more wealthy, as income tax is the only one working right - when I was poor my federal income tax was 0, when I was poor with kids I got a little more back than I paid in, now we are doing well, paying lots because we make more at work.

[-] jet@hackertalks.com 62 points 3 days ago* (last edited 3 days ago)

Just from a game theory perspective, a distributed group of people who are unorganized are unable to get their concerns addressed properly when it comes time to writing tax laws.

The rich and powerful, by virtue of being rich and powerful, have a voice in writing the tax laws. The distributed poor, do not. So it's much easier to satisfy income goals by taxing the group who has no feedback loop to the politicians

[-] humanspiral@lemmy.ca 5 points 2 days ago

They don't vote as much. They trust the media telling them that oligarchy is bestest for them. Talking point like Harris wants to raise taxes, and Trump wants to lower taxes ignores the context that those raises/lowers are on the rich/oligarchs, and being lower information/invested voters they get deceived.

Well over 95% of the public does not understand the tax code well enough to pay attention to tax proposals, and many poor/simplest tax filings are given to external services. Scamming the public on tax policy, and especially in electoral propaganda/deception, it is very easy to sell stronger oligarchy power over a declining America as if that will improve America if it is shouted loud enough.

[-] bear@lemmynsfw.com 6 points 2 days ago

Great question but you are asking the wrong people as you can see. You won't find serious arguments or alternative views here.

This really demonstrates what I dislike about Lemmy. Too many people who want to inject their political beliefs into every conversation. Supply side economics is a thing. Whether it works or not is highly subject to debate but it is an entire school of thought in economics.

[-] ccunning@lemmy.world 3 points 2 days ago

Yeah. I tried and failed to head it off at the pass. There are some good comments in here though.

[-] linearchaos@lemmy.world 13 points 2 days ago

The argument is that the rich and powerful are rich enough and powerful enough to corrupt the system and not have to pay taxes.

[-] harsh3466@lemmy.ml 38 points 3 days ago

The isn't snark. The answer is simply greed. The rich want to be richer. They want it all. It's a human flaw. The mentality is, "I don't care about anyone else, I want it all."

[-] vk6flab@lemmy.radio 28 points 3 days ago* (last edited 3 days ago)

Mathematics and Politics.

There are many more people who are "working class" than rich. The argument is that if you take some money from a lot of people, you get more money than if you take a lot of money from some people.

There's also the argument that if everyone pitches in, the overall burden for each individual is less.

What this fails to address is that the richer you are, the more you can play with your money and end up with nothing to tax. This is why the rich get richer and the rest of us don't.

Running through all that is a thing called "trickle down economics" which claims that the money from the rich ends up in society, but recent reviews of this have proven this to be nonsense. Politicians use this as an argument for the status quo.

Finally, the rich shape the narrative. Politicians are essentially elected by the rich through their manipulation of the story through their media empires and social media platforms.

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[-] Kit@lemmy.blahaj.zone 4 points 2 days ago

Something I never see mentioned is the risk of "brain drain". If you tax the rich too heavily, there's a possibility that they'll just move to another country with lower taxes, taking their companies (and jobs) with them.

[-] Waryle@jlai.lu 9 points 2 days ago

That's not brain drain. Brain drain is when high qualified people leave their country, mostly because of the lack of infrastructures costing them opportunities for studying or working in their respective field.

What you're talking about is capital flight. This is an issue that is systematically raised as a counter-argument by liberals in debates on taxation. The problem is that it is seriously overestimated:

  • Leaving a country is a lot more complicated than it sounds: you lose your family, your friends, your culture, your habits. Many millionaires who leave their country end up coming back after a few years.
  • You can't relocate your real estate investments.
  • Going abroad doesn't exempt you from paying taxes (especially exit taxes).
  • A country that wishes to do so can prohibit the relocation of a profitable company, or even nationalize it.
  • Many rich people who threaten to leave if taxes are raised end up doing the math: if there's a profitable business, they'll stay. And in a country that finances its infrastructure soundly and has a good distribution of wealth, there's profitable business to be had.
[-] GrammarPolice@lemmy.world 0 points 2 days ago

raised as a counter-argument by liberals in debates on taxation.

Which liberals are defending heavy taxation of the working class?

[-] Jakeroxs@sh.itjust.works 3 points 2 days ago

Not so much defending heavy taxation on the working class specifically, instead focusing solely on why the wealthy and mega corps have to have a low tax rate

[-] Waryle@jlai.lu 1 points 1 day ago
[-] phoenixz@lemmy.ca 4 points 2 days ago

Not sure if I agree. If you'd do that you'll lose CEO's, not the highly skilled workers that actually do the work..one might wonder howuch would be lost there.

Also, where would they go? Any developed country will have it much, MUCH "worse" for them than the US and the alternative is moving to heavenly places like Russia or China. Good luck with that.

[-] prole@lemmy.blahaj.zone 4 points 2 days ago

You're equating wealth with intelligence. Bad take.

[-] NutWrench@lemmy.world 22 points 3 days ago

Rich people have special access to the legislative machinery that you and I don't. Through ~~bribes~~ "contributions" they can craft laws that let them avoid paying their fair share of the tax burden. They can also "modify" pending legislation to remove the penalties for breaking those laws. It must be nice to live in a consequence-free environment.

[-] gedaliyah@lemmy.world 9 points 3 days ago

The sad truth is that this is exactly the answer. Rich people have more power by virtue of being rich.

[-] Empricorn@feddit.nl 1 points 2 days ago

Sorry, OP might judge this to contain some snark and as such, is ineligible. ☹️

[-] prole@lemmy.blahaj.zone 2 points 2 days ago* (last edited 2 days ago)

There is none. It's just avarice.

[-] sunzu2@thebrainbin.org 16 points 3 days ago

Because fucking over the poor is how the rich stay rich.

This is political science 101

[-] atro_city@fedia.io 16 points 3 days ago

It's the same as in every business: those making decisions think that the decision making is the hardest and most important part of the equation. Not only that, they believe that it is their right and that they worked very hard to get where they are.

There are two reasons they have to believe that:

  1. if they didn't, they'd feel that they didn't deserve it
  2. it also explains (to them at least) why there is inequality

The common argument that is brought up against change now is capital flight: "if businesses and rich people were taxed too much, they'd leave the country". There is a great fear that they will leave and take all the good jobs with them. The counter argument to that is: they aren't the only ones with brains to get a business going. Rich people aren't smarter than non-rich people, businesses that leave did employ people from whence they left and they also probably sold to the people in that area or country.

Now, of course the speed of departure, the political reaction, and the location are important.

Speed: instant departure can have a serious impact as the jobless might not be able to find other employment quickly. A graduated departure allows that however and also makes it possible for people to focus on other jobs/specialisations in the first place.

Political reaction: depending on where you are, providing recertification and training courses, having good welfare programs, and most importantly having an exit tax can help soften the blow of departure

Location: A big employer leaving a small town can be devastating. A small employer leaving a city, less so. A big employer leaving a city can burden the city, but the other factors are important.

[-] chicken@lemmy.dbzer0.com 8 points 2 days ago

IMO the most valid argument is that there are way more people making a middling income than people making a high income, so any reduction in taxes for those people would need a proportionally much larger increase in the upper brackets to maintain the same level of tax revenue, if it's possible to make the numbers work at all depending on how much of a tax break you want to give. The minimum amount to be taxed is set based on where the tail end of the bell curve is, the number of people who are poor enough not to be taxed is small.

Of course there's also the fact that the richest people don't get their money from having a job at all, it's all in investments, so messing with income tax rates doesn't even affect them.

[-] Trainguyrom@reddthat.com 2 points 1 day ago

To build off of this, if you collect $1000 in taxes from a million people and you've just pulled in a billion dollars. With 300 million people in the country that's a lot of tax dollars.

Obviously if you can tax 1000 out of every million dollars in wealth and individual earns in a year you can easily collect far more in taxes given how many multimillionaires will see their wealth increase by tens or hundreds of millions in a year.

This is all super reductive for simplicity. It's worth looking at how the super rich are able to avoid paying taxes. Are they not paying taxes because they're doing things with their money that is directly incentivized and generally better for the country than if they simply hoarded the same money, such as running the money through charities, clean energy installtions, etc? I'm honestly asking because i really don't know and I dont have the time right now to pull at that thread and research the question

[-] trolololol@lemmy.world 2 points 2 days ago

And that's the definition of capitalist vs working class. A top surgeon makes a lot of money yes, but they are still working class because their main income is from salary.

Earning a big salary or buying some stocks don't make anyone a capitalist. Being the owner of Johnson and Johnson, hiring an administrator and not working a day in your life does. And that's the kind of people who get richer with any crisis, holds the biggest part of Johnson and Johnson profits, and pays no tax at all.

If you can convince the lowest white man he's better than the best colored man, he won't notice you're picking his pocket. Hell, give him somebody to look down on, and he'll empty his pockets for you.

-Lyndon B. Johnson

[-] scarabic@lemmy.world 6 points 2 days ago* (last edited 2 days ago)

The standard deduction should be at least the median income…? Wouldn’t that mean that half of people would pay no income tax?

You might say this is what we should do, but I think it’s far from obvious.

If you earn $40k and the first $13k is untaxed, then you’re paying no taxes on about the first third of your income. And from there you begin paying in the lowest bracket.

If you make $100k, and the first $13k is untaxed, that’s the first 13% of your income, not 33%. And some of your income will be taxed at levels higher than anything the $40k earner pays. I just fail to see how this is placing the burden on the poor. It Is structured to do the exact opposite and give them the most breaks.

The fact that there’s one standard deduction for the whole country is insane, since $13k means something extremely different in different places.

But across the board I’d probably agree that the floor on the deduction should come up, and we should raise taxes on extreme wealth to make it up. But at least in its most essential form, income tax is already progressive.

So I don’t really get your question. But who am I fooling? I’m going to be downvoted into oblivion for going against the popular narrative on this.

[-] prole@lemmy.blahaj.zone 1 points 2 days ago* (last edited 2 days ago)

Going against the popular narrative? What would that be, that progressive tax brackets are the very fucking least we can do (and is clearly not enough)?

[-] scarabic@lemmy.world 2 points 2 days ago* (last edited 2 days ago)

No man read the top dozen voted root comments and you will see the narrative: rich people are using their political access to fuck you and get richer. The OP doesn’t even acknowledge progressive tax brackets. The entire system apparently is specifically designed to direct money out of starving people into the super wealthy. That’s the narrative. It’s right up there with “CEOs don’t do anything” and “you shouldn’t recycle because it’s just a scam cooked up by Big Plastic.” It’s actually hard to be a good liberal when those around me are dripping with this kind of horseshit nonstop.

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[-] neidu2@feddit.nl 6 points 3 days ago* (last edited 3 days ago)

20 years ago, the right wing propaganda machine was focused on (before they went full out fascist) low taxes for the "job creators" such as corporations and rich people, on the basis of that leading to more lucrative job opportunities for everyone else. The thinking was that the people and corporations in this low-tax environment would have incentives for creating jobs "here" instead of moving them overseas.

Not everyone on that side of the isle have realized that this results in jobs still ending up overseas, along with money that could've funded schools, roads, libraries, et al. And many of those who have realized it continue along the same path because it's too profitable for them to do so.

Remember this next time you hear slogans such as "trickle down economy", or Glitch McConnells favorite: "What's good for the goose is good for the gander".

[-] BackOnMyBS@lemmy.autism.place 6 points 3 days ago

I often wonder this myself. Why do rich people, who have so much wealth that it is unimaginable to us, not want to pay any taxes? It hampers the economy, makes it less adaptable to contractions, and makes the lives of the vast majority of the population much more difficult. At a macro level, I really don't see any benefits to it. So, here's my best guess.

  • Power & control. A poor and uneducated population is much easier to control than a financially stable and educated population. If people are fighting each other for survival and minimal luxuries, then they can't organize to improve their lives as a whole. Add to that being uneducated, they get their "education" via the media and are easily manipulated via propaganda.
  • Strength. Similarly, they want to feel strong by manipulating the system to get what they want. By getting the government to do what they want and finding loopholes to reduce their burden, they feel stronger than others. This gives them a sense of strength that they seek, which ultimately means safety for them.
  • Greed. They just want the numbers on their bank statements to be higher. Some people are proud of numbers, so the larger the number, the more proud they are. It doesn't matter if the number is relative, so the value doesn't really have any practical impact on their lives. They just want a larger number. I swear, sometimes we should just print fake bank statements wich ridiculous numbers, give them to the wealthy, and congratulate them. That's what they want: to be envied.
  • Lack of care. They literally do not care about others. It's not even an issue that fits in their heads. Find someone that is politically right-leaning and ask them what they think about the economic situation in a poor and war torn country. Their response would be indictive of how the wealthy think about us.
  • Narrow & short sighted. They can't see the whole picture. They're focused solely on their own relative position on the hierarchy and can't consider how their desires will impact the whole system in the long-term. They can't see that if the lower classes are complacent and uneducated, their products and creativity suffer. Look at Russia where people contribute just enough to get paid and all creativity is to please the elites. This stifles academic and scientific progress while also damaging integrity. People don't contribute to the economy because they have a personal drive. They contribute to please their superiors. This results in a terrible economy full of corruption and lack of ingenuity. The wealthy can't see that because they don't care about it. They just want to feel strong and in control.
[-] AmidFuror@fedia.io 5 points 3 days ago

It's very clear to me that everyone substantially richer than me should be paying the taxes, and everyone else and I should pay no taxes.

This attitude works pretty well at all but the very highest income levels.

[-] jaggedrobotpubes@lemmy.world 2 points 3 days ago

Incompetence at being selfish.

They think they're being selfish, but they fucking suck at it. They think selfish means "I don't want to pay taxes but fuck you you still have to pay I win you lose".

If they were even slightly competent at being selfish, they'd realize in about three seconds that doing things that way makes your town (and more) stressed out and shitty, and you still have to live there, and you can only build walls so high.

And even if we got rid of physics so you could build impossibly tall walls, now you've definitely lost because you had to build them in the first place, instead of being even remotely sensible and building a world where your neighbor would be happy to see you, or thrive peacefully and leave you be.

The "economics" of it are mostly about couching this damning and embarrassing realization in big words so that everybody stops paying attention because they yawned and lost interest.

[-] otp@sh.itjust.works 3 points 3 days ago

There are a lot more poor people than there are rich people. It's a game of numbers, and a slight increase on the middle class would often bring in more money than a substantial increase on the top percent.

Rich people also have a lot more loopholes they can abuse to pay less in taxes. Closing these loopholes could also potentially/occasionally disproportionately hurt lower or middle class people. They are possible to close, but (A) there's always more to find, and (B) lobbying means there could be political incentives to not close them.

There's also the arguments about raising taxes leading to innovation stagnating, or rich people moving to countries with lower tax rates. I'm not sure how much I buy those arguments.

That said, I'm not condoning these. In my country, I think we need to introduce more tax brackets. A doctor making less than $300,000/yr shouldn't be in the same tax bracket as a CEO making an over $800,000/yr salary before bonuses. But they are in the same tax bracket. That doesn't feel right to me.

[-] deadcatbounce@reddthat.com 1 points 2 days ago

The poor should pay the taxes because "only the little people pay taxes".

[-] deaf_fish@lemm.ee 2 points 3 days ago

There are many and they're all bad.

[-] Mango@lemmy.world 1 points 3 days ago

I'm pretty sure their argument is "because fuck everyone but us who can decide that."

[-] mwproductions@lemmy.world 2 points 3 days ago

"Because we can."

[-] OfCourseNot@fedia.io 1 points 3 days ago

Don't be fooled, taxes are just a way to extract the fruit of the poor folks' labor and give it to the rich and powerful. Always have been, since their inception. Not just in America, here in the (highly idealized by lemmy) EU I cost my company 3200€ a month, 1850€ go to my bank account and 1350€ to the government, plus up to a 21% vat from the things I purchase. Amazon pays literally 0€ in taxes.

[-] Crumbgrabber@lemm.ee 1 points 3 days ago

Lord Sauron is a simple working class person just like you and me. He received the diamond mines from his father only after he had proven himself. He knows what is best for all of us.

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this post was submitted on 29 Oct 2024
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