18 Comments

A sober-minded and fair analysis.

This progressivity is partially why I am skeptical of the "soak the rich" mentality so prevalent on the left. Especially when compared to other OECD nations, the U.S. has one of the most progressive tax systems in the developed world.

You can have a single-payer health system, and maybe free college and some other things, but the belief that it will all be financed by the 25,000 richest households in America just doesn't hold water.

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Fundamentally the Elizabeth Warren wing of the left sees taxation as punishment for bad rich people, as opposed to seeing it as a tool to enable social spending. And seeing taxation as punishment rather as a tool limits their ability to smartly advocate for taxes in a way that would actually fund their stated priorities.

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As per usual, framing any political goal in an adversarial rather than collaborative light will limit potential support. One of the fundamental drawbacks of tribal politics is casting the other side as the enemy rather than a source of potential votes that can be dipped into with clever messaging.

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"You can have a single-payer health system, and maybe free college and some other things, but the belief that it will all be financed by the 25,000 richest households in America just doesn't hold water. "

Double plus ditto. I personally would like a single payer system (or something like it), but I do believe that will mean a majority of people will probably have to pay more somehow.

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Is there a chart somewhere that does this for "share of total tax dollars paid"? I've seen charts to that effect from libertarian/conservative leaning sources (eg https://taxfoundation.org/publications/latest-federal-income-tax-data/ in the section "High-Income Taxpayers Paid the Majority of Federal Income Taxes") on federal income taxes and I'd love to see something similar that incorporates other tax data as well.

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I don't mean to be a skeptic, but most people who present analysis like this are more transparent about their work. It would help if you more specifically explained how you derived these figures.

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It's annoying when people torture a data set to make whatever point they want, then say, "well actually . . .". Boo.

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It's annoying when people torture a data set to make whatever point they want, then say, "well actually . . .". Boo.

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I love this I would love to share it with some of my friends. How does sharing work through this site? If I share it with them as a subscriber is there anyway for them to read it?

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Josh, are the general obligation bonds issued by states not used to borrow to balance their budgets? Are the revenue bonds not more borrowing to bridge the deficit spending?

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In general, state bonds (whether GO or revenue-backed) are supposed to be used to finance capital spending, not operating spending. For example, you might have revenue bonds backed by future bridge tolls, used to finance the construction of a bridge. Similarly, a school district might issue bonds to pay for school construction, but they’re not supposed to use the bond proceeds to pay teacher salaries. There are exceptions, but that’s how it’s supposed to work.

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I'm curious to see that answer, too. My guess (and it's only a guess because I'm very ignorant about such things) is that as long as the state has a schedule and a plan to pay for the bonds, it's not "borrowing" in the sense that Josh meant.....whereas the feds can just borrow and accept that there'll be a deficit/debt that, someday, somehow will be either paid off or funded enough to maintain the confidence and faith necessary for people to keep lending to the government.

But again, I'm pretty ignorant of the specifics (and even the generals).

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I could use help with language around countering when someone comes with the argument of “Jeff Bezos didn’t pay anything in federal taxes,” is this claim just factually wrong? Or are say the “top 0.01 percent able to avoid paying any taxes?”

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Similar to what Stephen said...Bezos' annual "income" largely is not by way of salary or hourly pay like the rest of us. Asset valuation and capital gains is where he makes the bulk of his money from year to year. I'd actually love to see a follow-up piece from Josh that explores capital gains tax and carried interest loophole.

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I get that, but when you have a stock purchase plan, you are taxed as income when the stock purchase award vests, then again when you sell the stock as capital gains. I know this is slightly different for officers, but it should be functionally the same way. This should mean that he WOULD pay income tax when the AMZN stock is awarded.

…unless he isn’t being awarded any stock and is just living off the investments he has, which in that case why not just become a limited partner and not be involved in the company business.

… which is what he did recently. So yeah I probably answered my own question

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You'll get no disagreement from me, and I don't mean for my comment to be definitive or anything resembling an expert take. It's the best I can do as far as I understand it and am more than happy to be corrected.

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He may not pay anything in federal income taxes per se. Most of his wealth is in the stock of Amazon, and he won't pay taxes until the stock itself is sold (believe Elon paid in excess of $11bn recently w/ a Tesla stock sale, not exactly chump change).

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He might never pay taxes. And thanks to the step up in basis, his heirs won't pay taxes either. Even when they sell the stock.

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