Payroll taxes are the worst for small companies followed by strong labor law. Strong Labor laws are good if the company has 500-1000+ people but not able to fire someone within the month with reason is just dumb (I’m looking at Europe). It indeed causes many startups to hire 50% less people than they can.
I honestly don’t understand taxing anyone making less than something like 500K.
Don’t tax anyone earns less than this, focus all tax collection to top 1% and all big corps that makes more than 5M a year. With all those resource if this can be collected and obvious loopholes patched that’s it.
This would not only bring more tax, but also would fuel massive growth on the bottom line in terms startups and tons of innovation on the medium sized companies.
Most of the "we should just get all the taxes from rich people" arguments ignore two fairly important things.
The first is how asset markets works, i.e. why rich people are rich. It's because there are finitely many assets and whenever anyone rich gets more money, they use it to bid up the prices. But that makes high taxes on rich people do something unintuitive at scale: It takes away the money that was making the stock market go up. And then not only do they have less money, they also have less income, because the people who would have paid them for their stock also have less money, which makes stock prices go down. Which means that increasing their tax rate from e.g. 25% to 50% doesn't generate anywhere close to twice as much revenue, and it also lowers the growth rate in the tax revenue you get from them. Which means that raising the rate will, in the long term, inherently generate less revenue. Whether you end up underwater in 48 months or 48 years depends on what the existing and proposed rates are and what the economy looks like, but there is always some period of time after which a reduction in the compounding rate is going to absorb any percentage increase in the tax rate. At which point you're paying the recurring costs and lower compounding rate from the higher tax rate indefinitely in exchange for no additional revenue, and indeed for less government revenue.
And the second is that Congress wants money to spend, so they're going to do the things that cause them to have more money to spend. Now imagine what kind of non-tax policies they're going to implement if the tax system makes it so the only way they get more money to spend is if they transfer wealth from the poor to the rich. We don't actually have an effective solution to the principal-agent problem, so perverse incentives are bad, right?
If you do that in the USA, you're ignoring 79% of income. The top 1% earn a lot more than average but they're still small in number, and their collective income is only 21% of the total.
(And the USA is uncommonly high as regards income share received by the top 1%; Canada is at 11.5% and is fairly typical.)
Not taxing anyone under 500k would remove a very large share of tax revenue. Combining that with higher corporate taxes would be nice, but if it got pushed too high (which it would in this scenario) we would simply see corporate flight from the US to elsewhere or it would eliminate practically all the benefit of lower taxes from the less wealthy as the cost of goods would skyrocket.
There isn't really a silver bullet unless people in the US as a whole culturally become less consumerist and our entire economy is restructured around that fact.
> we would simply see corporate flight from the US
Good. If they don't want to pay for the physical and legal infrastructure to make their business possible here, then they can go elsewhere. I'm so tired of this cowardly excuse.
People who also say 'the rich will just stop' ignore that the rich work crazy hard trying to ensure they add to their billions. They already are past the point of noticeable returns for their quality of life, yet they keep at it.
In return for their super high taxes we should give them a 'contributor to society' chit or star or something. Then they can gamify over getting chits, instead of hundreds of billions more. I'll happily call Elon a '7 star citizen' and support such a game.
It's not an "excuse". I'm just saying what would happen. I'm not against raising corporate taxes and patching loopholes. I just know there would also be unintended consequences for even the less wealthy that many don't consider.
> I honestly don’t understand taxing anyone making less than something like 500K.
Don’t tax anyone earns less than this, focus all tax collection to top 1%
These numbers are useless unless you give me everyone's comparative worth.
If a top 1% individual is worth 1000x more than a bottom 50% individual, I would expect the numbers to be higher. If they are only worth 10x as much, it seems out of line and unfair to the higher payers.
> These numbers are useless unless you give me everyone's comparative worth.
If a top 1% individual is worth 1000x more than a bottom 50% individual, I would expect the numbers to be higher. If they are only worth 10x as much, it seems out of line and unfair to the higher payers.
Bottom 50% earners make on average 20-25k.
Top 1% earners make on average 800k-1m.
So top 1% average income is 35 -45x higher than bottom 50%.
Bottom 50% earn 11-13% of total US income. Top 1% earners 20-22% of total US income.
I don’t have an opinion of fairness either way. I’m just sharing data.
I honestly don’t understand taxing anyone making less than something like 500K.
Don’t tax anyone earns less than this, focus all tax collection to top 1% and all big corps that makes more than 5M a year. With all those resource if this can be collected and obvious loopholes patched that’s it.
This would not only bring more tax, but also would fuel massive growth on the bottom line in terms startups and tons of innovation on the medium sized companies.