From an opinion piece written for The Hill by Nancy Altman, co-director of Strengthen Social Security and a member of the Social Security Advisory Board:
Of the many giveaways to the super-rich in the Republican tax bill, the elimination of the estate tax stands out. This tax, the government’s most progressive source of revenue, does not affect 99.8 percent of Americans. Rather, it is paid by Republicans’ billionaire donors. ...
If Republicans don’t want the revenue from that top 0.2 percent of wealthiest Americans to run the government, let’s dedicate it to Social Security and use it to expand those modest but vital benefits for everyone. ...
[T]he bulk of income gains captured by the wealthy either fall above Social Security’s maximum earnings contribution cap (currently $127,200), or are unearned income on which they do not pay Social Security contributions.
Since the earnings of high-income workers have increased much more rapidly than the average in the last several decades, Social Security now covers only about 82 percent of all wages. In 2016 alone, those at the top paid $80 billion less to Social Security, only because the cap has slipped from covering 90 percent of wages, as Congress intended, to 82 percent today. Those are billions of dollars that should have gone to Social Security but instead stayed in the pockets of the wealthiest among us. Unquestionably, the richest are not paying their fair share into Social Security. ...
Isn’t it more than fair that their heirs, who had nothing to do with creating the wealth, receive most of it, but not every single penny of it? Isn’t it more than fair that a small piece of all that wealth go to the rest of us, without whom that wealth would never have been amassed? ...
22 comments:
This is typical soak the rich BS. The Estate tax is unfair because it is double taxation. Most Americans recognize the tax as unfair even if it does not effect them personally.
The reason there is a cap on Social Security contributions is because there is a cap on benefits and the law creates a correlation between how much you contribute and the benefit level.
Rather than spout off left wing talking points, the author should focus on the real problem. Both political parties have become beholden to corporate interests and thus give various tax breaks to special interests. These tax breaks amount to over a TRILLION dollars a year. If these were stripped out of the tax code it would go a long way to balancing the budget and funding legitimate government programs.
However, the Congress realizes that no one will fund their campaigns unless they can provide tax breaks. So the rest of us pay higher taxes so the well connected and Congress can scratch each others backs
Some of it is not really double taxation..it's more like half taxation.
For example, if a person takes their post-tax earnings and invests it and it grows and they sell the stock, they will pay capital gains tax. But if they die, their heirs can sell the stock and only pay taxes on the gains that occurred after the person died (the stepped-up basis).
I would be ok with changing the law so that heirs had to pay more capital gains taxes. There could be a threshold so when a guy with $600 in an investment account dies his heirs don't have to deal with taxes. But if you have hundreds of thousands of dollars in gains, I'm ok with some level of taxes being levied on it.
Whether that money should go to the trust funds? I'm inclined to say no, it belongs in general revenue. FICA taxes (both the rate and the tax cap) should be set at a level that makes Social Security solvent. But among the things that estate and inheritance tax revenues could go towards should be improving SSI. I'd like to see the FBR set at $1 above the poverty level, and some of the income exclusions increased and inflation-adjusted. And let's get rid of in-kind support and maintenance while we're at it.
@9:32
How is it double taxation? When money is transferred between individuals it is taxed. The fact that the money transfers due to the death of the first individual, I see no reason why the second individual would not be taxed.
Unless I am missing something. Is the estate taxed, and then the heir taxed as well?
I wont be leaving more than $5 Million to anyone so it isn't a problem.
If someone out there is willing to leave me millions, I will be happy to pay tax on it.
The whole argument is foolish. It's their money and property. Why should they be subject to forcible redistribution just because "they can afford it?" I can afford to buy coffee for 10 people every morning. Does that fact alone make it morally justifiable to force me to do so? As for the SS cap, it's there because benefits above that level are capped, too. That is, folks who pay in don't get anything extra so in effect to remove the cap means that they will pay more for less. Since the vast bulk of all taxes in America are already paid by those in the top 10%, at what point does it become wholly immoral and unacceptable to keep saying that "they need to pay more because they can afford to" And, finally, that bizarrely ignorant blanket statement that "Isn’t it more than fair that a small piece of all that wealth go to the rest of us, without whom that wealth would never have been amassed?" is precisely what is wrong with those folks so infected with the entitlement mentality. Last I check, we don't live in a socialist country where just because I have more than you means you are automatically entitled to some of it because it strokes your sense of "fairness." Puhleeze.
@2:24PM:
Ever heard of INCOME INEQUALITY? BTW, it has been on the rise for a very long time. Fewer and fewer people now share in the wealth of this country. It is extremely concentrated, I suggest you sit on your pompous a$$ and think about this. Your narrow focus no longer has any basis in fact or reality, In your words, “Puhleeze.”
What's wrong with income inequality? You want income equality? Go live in a socialist country. I work harder, I am more creative, I make unique products more people want to buy, I darn sure BETTER make more income than you. That's the American way. Nobody's makin' you stay.
@4:30 Income inequality is a part of capitalism, no doubt about it. We need that to have sufficient motivation to accomplish things. However, when government rigs the laws and regulations to benefit those already at the top at the expense of those not at the top, that is a problem. These tax cuts are not going to increase wages. All it will do is put more money in the pockets of those at the top, who will then stick it in the Cayman Islands and the average worker will see none of it.
@2:24
I cringe when I hear someone talk about "income inequality." It's a concept used to justify wealth redistribution - also known as "theft" - which is, of course, supposed to be against the law. There are reasons why income inequality exists, and nearly all of them are good. I fail to see why you think the fact that some folks make more than others is a bad thing. Why are you in favor of the gov't stealing my stuff (which I earned) and giving it to someone else (who did not earn it)?
4:30,
I don’t understand why you’re equating wealth with hard work. Look at Trump and his kids. Their most notable achievements came when they slid down the right birth canals.
Saying you "earned it" under this grotesque, victimizing, oligarchical capitalist system is so friggin' funny. It totally just ignores the fact that certain labor receives very little compensation relative to the fruits it produces (almost exclusively on the low end of wages, duh) and that certain people, by virtue of owning some capital, get a hugely disproportionate share of profits. Obviously, unless the outfit were wholly worker owned and controlled, there has to be some split between capital/ownership/management and workers, but to act like the current split is remotely fair, rational, etc. is just absurd.
Since we have some Austrian Econ mavens in the threads, explain to me this: Why can a worker produce goods worth $1,000 in a day (let's say the raw materials provided by capital total $100) and create $900 in new value yet that toil is worth (in wages and benefits) so much less than $900? Why does the fact that someone happens to have capital and hold all the cards mean they are entitled to such a huge proportion of the value added by the labor they employ?
You're going to say, well, the worker's skills must not be that rare because the market wouldn't allow wages to be so low if it were in fact both valuable labor and scarce labor. So then, how can such widely available, unremarkable labor that we apparently are up to our elbows in create $900 in value a day? Something in this market equation is very out of whack, because it seems one would expect the cost of goods that can apparently be produced so cheaply by a possible workforce of so many to drop. But we see it all the time--people being paid very low wages whose fruits are sold for orders of magnitude more than their wages/benefits. I'll go ahead and spoil it for you and say a big reason for this is folks with lots of capital and other assets constantly rent seeking.
4:38, if you think people should get to keep what they earn, then yes, income taxes should be low.
But then inheritance taxes should be high since heirs didn't do anything to earn the money they were given. So should sales taxes on luxury goods, as well as capital gains taxes (the property value on my house went up--most of that was not because of improvements I made to it, which I suppose could be deducted in a "you earn it, you keep it" system, but because of broader market factors like developers building stuff nearby).
And there's the "you didn't build this" factor. If you go to work, you do it on roads or public transit. If someone steals the cool stuff you make, you can call the cops. If your supplier rips you off, you can go to court. There's a postal service to ship what you make. There's copyright protection, and the air is breathable, and you don't have to worry about catching cholera or polio, and public education means that you can hire literate staff. So your income taxes shouldn't be zero, because tax-funded services are part of the reason your income is what it is
@4:38
Theft is an unlawful taking. Taxation is a lawful taking. In regard to the matter at hand, I think people are generally in favor of the government maintaining a progressive tax system as: those at the top are more able to carry the tax burden, those at the bottom are less able to do so, and the federal government requires funding to provide utilities, defense, and any number of other public goods.
You may object, arguing the upper class do not disproportionately use public goods, but that's not relevant. The unlimited access to public goods makes tying an individual's usage of public goods infeasible. We aren't about to kick out the upper class in the event of a war, nor can we prevent their use of public roads, police, fire departments, etc.
@4:41
Because with some notable exceptions - perhaps Mr. Trump is one - that is how wealth is created in this country. But don't take my word for it...talk to Bill Gates, Michael Dell, JayZ, Elon Musk, Tiger Woods, and a host of other individuals who, I'm absolutely certain, could shed more light on how to start with nothing and to then create something.
@5:12
--"...to act like the current split is remotely fair, rational, etc. is just absurd." ---
And by whose standard shall we measure fairness and rationality? Yours? Then it's not fair. Mine? Then it's imminently fair. See the problem? Perhaps you do not, at bottom. Asking the gov't to confiscate my wealth at gunpoint for their own benefit while simultaneously lecturing me on how fair and rational it is to do so, suddenly makes it quite "rational" in my mind to resist such an outcome with every means at my disposal. Theft by proxy is, sadly, still theft.
---"Why does the fact that someone happens to have capital and hold all the cards mean they are entitled to such a huge proportion of the value added by the labor they employ?"---
Uhh...beeecuzzz...they have the capital and hold all the cards. It sounds sarcastic, but it isn't really. They made the investment, they took the risks. Common sense would suggest that they "deserve" the lion's share of the fruits.
Might I suggest that the poor exploited employee set aside some of those wages on a regular basis (instead of buying the latest iPhone, or that new set of Beats, or that Starbucks latte) so that, eventually, he can acquire some capital, hold some cards, and then reap the very American benefits of prudent risk-taking and solid life decisions.
Mr/Ms 5:18:
See, I call BS on that whole spiel. It's my wealth, I should be able to give it to anyone I want to give it to. Why do you or anyone else get to tell me how to dispose of my money? The entire concept is so lame; it's like a bizarro Robin Hood story. If I leave my wealth to my son, gov't gets to steal a large percentage of it and use it however it pleases. On the other hand, If I leave it all to perfect strangers - a charity, for instance - well, then, gov't will actually lower and/or eliminate the tax burden through deductions for charitable donations, etc. Even if my son might actually need it more than anyone else! In absolutely no universe whatsoever does this make any kind of sense.
@5:43
You made the point that people in general favor a progressive tax system since "those at the top are more able to carry the tax burden, those at the bottom are less able to do so...." While this is probably true, the very real danger here is to make it so progressive that it ends up perverting itself and the goals it was originally designed to promote. At this point I'd say we are nearly there, and that "public" sentiment to go after "the rich" (for which see Bernie Sanders and his sycophants) is a dangerous signifier of the direction we are headed. See, right now the top 8% of income earners pay nearly 90% of all income taxes (according to Pew research) at a time when income taxes make up the largest source of U.S. gov't tax revenue (Pew, again). But contrary to your point that "those at the bottom are less able...," in fact those at "the bottom" - the bottom 30% of the population - are net TAKERS (Pew, of course). That is to say, not only do they not pay, they actually take out of the net tax revenue a huge chunk of the money paid in by the rest of us. It's kind of like the current state of the social security system, where fewer people are paying into the system in order to support a growing number of beneficiaries. And we all know which direction that's taking us. So why is the one "good" while the other is "bad?"
"Even if my son might actually need it more than anyone else!"
Jesus H. Typically the children of multimillionaires need over $5 million tax free more than anyone else. Leaving them with a trifling $8 million out of a $10 million estate is akin to sentencing them to a life of destitution! How will your needy children make it????
@9:32
Corporate and special interest welfare that benefits the super-rich, in addition to rampant legalized bribery of our elected officials (thanks Supreme Court) to accomplish same, is a cancer on our nation at the present, I grant you. I see proposals to modestly raise taxes on the super-rich as a way to claw back some of those ill-gotten gains during times in which other change is not yet possible. Reducing such corporate and special interest welfare would be a step in the right direction, but Congress is currently too deep in the special interests' pockets to crawl out into the light.
Great idea! Let's completely remove the connection between work and benefits in social security! Tax any and all times that money moves from one business or person or entity to another and give it to social security. After all, years ago we added the connection between social security benefits and taxable income so we can tax benefits to help the government pay for needs based programs. Please do not argue that the money went for roads, defense, medicare, etc. - after all nothing is earmarked for anything, just consider the false "lock-box" for social security trust funds or the $500,000,000 from medicare funds that were used to pay for Obamacare. Is the best solution modeled after an improved Townsend Plan? Should everyone living in the USA be guaranteed a fixed income? Why bother with increasing a minimum wage to $15? Or worrying that someone doesn't have housing, food, or a cell phone? Or insurance of any kind (heath, auto, flood, theft, etc.)? Government can pay for any financial need. Expecting that people work and pay for any of these things is just jobism. Unfortunately, the Townsend Plan required that beneficiaries had to be at least 60 and free from habitual criminality. Don't today's people need to be helped at any and all ages by the taxpayers? And we must never deny help to someone today just because of their history of criminality. Oh, what a beautiful, fair, and trouble free world we will have if the only, and I mean only difference between the rich and the poor is the freshness of their vegetables.
@10:15
Your language is vague. If the top 8% of income earners are earning 90% of the total income I have no issue with them paying 90% of income taxes. In regard to your suggesting I was incorrect in stating those at the bottom are less able to carry the tax burden, that would depend on how you define "at the bottom." While the bottom 30% of the population may be net "takers," I was referring to the structure of a progressive tax system in general. Those on the higher end are taxed more, and those on the lower end are taxed less.
While those at the extreme low end may take more than they pay in, that is expected. Then again, last I checked programs like food stamps, section 8 housing, etc. generally result in immediate consumer spending disproportionate to the actual benefits received, I am uncertain where your data is from (i.e. for every dollar of food stamps received, the recipient actually spends ~$1.40, pew).
Post a Comment