How to tax the rich

Paul Krugman wrote in New York Times – How to tax the rich.

Whether or not she becomes the Democratic nominee, Elizabeth Warren has brought something new to American politics; call it the charisma of wonkery. “Warren has a plan for that” has become a rallying cry for her supporters — and she has also impressed many serious policy experts with the sophistication of her proposals.

But can she pay for her plans? Leave aside Medicare for All, on which she has been cagily unspecific (and is very unlikely to happen even if a Democrat wins.) Many of the other Warren plans, for things like universal child care and enhanced Social Security, depend on raising money by taxing the wealthy.

The model for that kind of policy is Obamacare, which dramatically expanded health insurance without either increasing the deficit or raising taxes on the middle class, relying instead on a surcharge that only affected a small number of high-income taxpayers. But Warren is proposing the equivalent of several Obamacares. Could proposals like her wealth tax actually collect enough to pay for all of that?

Even some Democratic-leaning economists have been skeptical. A few months ago Larry Summers and Natasha Sarin argued that the rich would manage to avoid or evade much of the Warren wealth tax, so that it would raise much less money than promised. (Tax avoidance means using legal loopholes to skirt taxes; tax evasion means breaking the law to hide income from the tax man. Both happen, a lot, in real life.)

But last week two of my go-to tax experts, NYU’s Lily Batchelder and David Kamin, released a detailed paper titled “Taxing the Rich: Issues and Options” that, to my mind, answers many of these objections.

Let’s be clear: Nobody serious claims that higher taxes on the rich would cripple the economy. That’s a zombie idea that has been refuted by evidence time and time again, kept alive only by the fact that billionaires lavishly reward people who push it. As Batchelder and Kamin say, there’s extensive evidence that higher taxes don’t even do much to deter either work or saving among the wealthy, in part because much of the .01 percent’s income comes from things like monopoly rents that aren’t determined by effort.

On the other hand, the wealthy are quite successful at avoiding taxes. The estate tax raises much less money than you might expect given how big modern fortunes are. Capital gains tax receipts are quite sensitive to the tax rate, suggesting that raising that rate wouldn’t generate a lot more revenue.

What Batchelder and Kamin argue, however, is that effectively taxing large fortunes isn’t impossible, or even that difficult. It only looks that way because our current tax system is riddled with loopholes. In particular, we tax income and wealth from different sources at very different rates, creating many opportunities for smart lawyers and accountants to make wealth disappear from high-tax categories and reappear elsewhere. Taxes without these loopholes, like Warren’s proposed 2 percent tax on large fortunes, would eliminate most of these tricks.

And here’s the thing: There’s a lot of money at the top. Batchelder and Kamin suggest that various taxes on the wealthy could yield several trillion dollars in revenue over the next decade, perhaps on the order of 2 percent of GDP. That’s not remotely enough to pay for Medicare for All, but it’s enough to pay for some substantial new programs, and it would have the additional benefit of gradually reducing the extreme concentration of wealth in the hands of a small elite.

So can we soak the rich? Yes, we can.

Do you support this suggestion?

 

KL Tan

 

 

yyy
SPONSORED ADVERTISEMENT
Loading...

15 Responses to “How to tax the rich”

  • Darth Vader:

    Great idea tkl! Let’s start be soaking YOU and your good buddy gms first since both of you are staunch advocates of socialism. And yes, we SHOULD increase income tax on the wealthy, but NOT soak them like you advocate. You know why? It’s because they can easily move their wealth where taxes are lower, that’s why! Didn’t know this tkl? Thought you’re the (not-at-all) Great Sage (not) Equal To Heaven, the wisest, most omniscient being in the entire universe?! Oh wait, you CAN’T be intelligent! The very fact you advocate marxism PROVES that a single virus has an IQ a trillion times higher than you

    Really, it’s so sad that ANYONE would actually publish your garbage. Since you’re SO determined to “help” the country, how about you dump ALL your writings into an anerobic biodigester so that we can at least reduce fossil fuel consumption by producing biogas from from crap? In the meantime though, my good buddy R2-D2 tells me you eat from your rear orifice and expel wastes from your front orifice. Is this true? It MUST be, looking at all your writings…

    GD Star Rating
    loading...
  • Vote Wisely Please:

    GST is taxing the Poor, while the rich literally escape with lower income tax as a result.

    They are literally in favor of foreign students [giving them almost 1 million dollars a single month]

    They are literally in favor of foreign FTs like the CECA, flooding in foreign degrees to displace the locals particularly the Diploma, A Level, ITE, tipping the balance of its own academic and work placements “System”, thus “back-stabbing”, so to speak, these poor peoples whom had been loyal to them and trusted them with their system.

    Tell me what are the above for? Any advantage or purpose for the citizens? What have you gained from it? What future are they bringing in for you and your children futures?

    So how is the Amaravati Project? Does it benefit you? Do you trust anyone with failed and problematic projects like the Suzhou Industrial Park?, the Amaravati Project? etc…

    Are the above sufficient proof that you have been “Played” and neglected of cares as citizens. Selling your harmony, your children futures, your quality of lives etc. What will they Sell next?

    Vote wisely please.

    Deny 2/3, otherwise this country will be flooding with 10M displacing own children future. We need to take serious action to tell them to stop it.

    Under the PAPi, literally no more loves, no more lives, have to steal lunch boxes, become gojek or hawkers and good paying jobs goes to FTs.

    How much are you paying to the GST? [based on 80% spent]

    Take Home Pay Last 5 Yrs @ 7% Next 5 Yrs @ 9% Total Lost
    $1,000—————–$4,095——————–$5,265————-$9,360
    $1,500—————–$6,142.5——————$7,897.5———-$14,040
    $2,000—————–$8,190——————–$10,530———–$18,720
    $2,500—————–$10,237.5—————–$13,162.5———$23,400
    $3,000—————–$12,285——————-$15,795———–$28,080
    $4,000—————–$16,380——————-$21,060———–$37,440
    $5,000—————–$20,475——————-$26,325———–$46,800
    $6,000—————–$24,570——————-$31,590———–$56,160
    $7,000—————–$28,665——————-$36,855———–$65,520
    $8,000—————–$32,760——————-$42,120———–$74,880

    GD Star Rating
    loading...
  • TruBlu:

    oso,HOW TO STOP DISHING ‘SUBSIDIES’ to the RICH?!

    STOP F1 SUSBSIDIES,for instance???
    baby bonuses shud only be given to those living in 3/4 room HDB like in other cases of bonus issues periodically?

    stop subsidising RICH MINISTERS for major surgeries???
    their pay is oredy sky-high?

    so many FREEBIE$ FOR RICH but ‘LEVIES/TAXES’ on common sgs?

    tax system upside down?

    GD Star Rating
    loading...
  • Harder Truths:

    TKL – let’s start with YOU, shall we?
    I think you are filthy rich. Prove to me otherwise or we can start taxing you.

    Anyone can be rich – it depends on the definition. Are you poor? No? Then you must be rich. Then you should be Taxed until your *** drops off!!!

    GD Star Rating
    loading...
  • Happy Pappy Problematique:

    No honcho no way we gonna tax the Existentialism of Richness! That would pull us down into the realms of Mediocrity stoopid…. it’s not like flipping a coin to tax or not to tax, boy; it’s them complicated one!

    GD Star Rating
    loading...
  • PAP.GUARANTEE.WIN.GE2019/20:

    Dear KL Tan,
    Why must tax the rich ?

    People got rich because they work hard for it.

    If you are lazy and unmotivated, of course you will be poor.

    Instead of taxing the rich, we should tax the poor.

    Like some online store, if your purchase is below X value, the store will charge you a fees for not meeting their minimum order.

    Yes, we must do the opposite and tax the poor even more like 9% GST and 9% lazy and unmotivated tax.

    When the poor start work hard and motivated, then we reduce their 9% tax to 1%.

    Vote PAP. Vote 9% GST. Vote for more FT to solve our falling birthrate.

    PAP.GUARANTEE.WIN.GE2019/20

    GD Star Rating
    loading...
  • Bapak:

    Hey TKL, tell them don’t suka suka dropped the Estate Tax just for one guy and later reinstate it again. Believe there is a lot of money to be taxed there.

    GD Star Rating
    loading...
  • Pan Chin Lian:

    Tan Kin Lian is that you? Why KL Tan? Mai paiseh leh. Kuai kuai shi shi like a mouse as if you got something to hide.

    GD Star Rating
    loading...
  • Rabble-rouser:

    The Whole Concept of govt taxation was to:
    1. Collect monies for building Public Infrastructure & providing Public Goods, Healthcare system, Public School system, Essential Public services like Firefighting & Policing, Public transportation, etc; &

    2. Redistribution of Wealth from the wealthy to the less fortunate for them to get back on their feet using welfare payments, assistance schemes.

    But in most cases, taxes collected goes to feed a growing & unproductive govt Bureaucracy & fund politicians’ huge entitlement, privileges & hidden benefits.

    Like Charitable organizations, how much is collected, what proportion were used in the administrating the charity & how much used for charitable cause – determines their effectiveness. In some cases, the Charity were a fraud as 100% of donations ended up feeding the Charity promoters, the cause an excuse for donations! Don’t be fooled!

    In Developed Economies, the cost of govt have become very expensive. The more extensive the Govt’s reach, the greater budgets required to maintain the numerous & faceless bureaucrats.

    Politicians & their bureaucrats generate lots of “make-work” simply to justify their existence ie. creating committees, holding meetings, setting up new bodies to handle new projects, etc. But the reality is that they’re all for nothing, filed & forgotten after the findings & recommendations were made!

    The bigger the govt, the greater the need for more power & authority. But all these comes at a cost to the electorate. Govts don’t create economic opportunities nor create productive jobs. These come from Entrepreneurs & Businessmen! And they required the support of wealthy Capitalists to fund their ideas.

    The problem with higher taxation on the rich is that it creates it’s own problem. When this happens, the rich spends more time in preserving their wealth away from govt hands instead of investing. And govts end up chasing tax monies from the middle to lower income instead.

    S’pore already is a high taxation country inspite of the low corporate & income tax rates. The govt revenue collection scheme is one of the most brutal in the world.

    Look all around you, there are enforcement teams each with a quota to meet for writing up infringements notices & offences. Go to the subordinate courts @ Outram, there are always a long line of offenders to plead guilty & be fined.

    Tax evaders won’t get away as IRAS scoured the landscape look for potential tax evaders from their system. From simple hawkers (Roast meat sellers, durian suppliers) to private clinics & professional consultants, etc.

    One look at S’pore’s economic eco-system tells you that the govt saps the life out of S’pore.

    GD Star Rating
    loading...
  • cut and paste is plagiarism:

    talking as if pap doesn’t know it is the right thing to do but since the rich in Spore are all pap clan members, pap cannot do so without incurring wrath of elders such as mediocre Goh Cock Tong and jiak liao bee Tony Tan Kung Yam.

    GD Star Rating
    loading...
  • Kick Them Out:

    Just clean up the current regime and the findings will likely be enough to support any social program.

    GD Star Rating
    loading...
  • DLLM:

    @AP.GUARANTEE.WIN.GE2019/20:
    September 18, 2019 at 11:09 pm (Quote)
    Dear KL Tan,
    Why must tax the rich ?

    People got rich because they work hard for it.

    If you are lazy and unmotivated, of course you will be poor.

    Instead of taxing the rich, we should tax the poor.

    Like some online store, if your purchase is below X value, the store will charge you a fees for not meeting their minimum order.

    Yes, we must do the opposite and tax the poor even more like 9% GST and 9% lazy and unmotivated tax.

    When the poor start work hard and motivated, then we reduce their 9% tax to 1%.

    Vote PAP. Vote 9% GST. Vote for more FT to solve our falling birthrate.

    PAP.GUARANTEE.WIN.GE2019/20

    Response:

    Fucking How Lian AssHole rubber tapper. Don’t forget your money come from Singapore. Not because you are hard-working, it’s because the exchange rate that make you dirty rich. Hey mother fucker, if not because of liar LKY, I don’t think Malaysian can work here. SO PPISS OFF to yout rubber land.

    GD Star Rating
    loading...
  • Winnie the PooP:

    Crony Capitalism is an economy in which businesses thrive not as a result of risk, but rather as a return on money amassed through a nexus between a business class and the political class. This is often achieved by using state power rather than competition in managing permits, government grants, tax breaks, or other forms of state intervention[1][2] over resources where the state exercises monopolist control over public goods, for example, mining concessions for primary commodities or contracts for public works. Money is then made not merely by making a profit in the market, but through profiteering by rent seeking using this monopoly or oligopoly. Entrepreneurship and innovative practices which seek to reward risk are stifled since the value-added is little by crony businesses, as hardly anything of significant value is created by them, with transactions taking the form of trading. Crony capitalism spills over into the government, the politics, and the media,[3] when this nexus distorts the economy and affects society to an extent it corrupts public-serving economic, political, and social ideals.

    GD Star Rating
    loading...
  • PoliticalPigs:

    The rich will say let the wolves or men in sheep clothing lead the way. Easier for camel to enter the eye of a needle than to kick the rich man out of his tower of glory.

    GD Star Rating
    loading...
  • Freedom to ejaculate:

    I support taxing the richest more especially for SG.

    1. Singapore is notorious for having one of the highest Gini coefficient in the world.

    To the uninitiated, this means singapore rich-poor divide is widest.

    The rich are excessively protected.

    We should tax the richest much more.

    GD Star Rating
    loading...

Leave a Reply

 characters available


Scroll Down For More Interesting Stuff


Member Services
Self-SupportMembers Login
Sponsored Advertisement

Search On TR Emeritus
Sponsored Advertisement

Most Recent Comments
  • Smart: @pap Spore is not Smart nation “””70% sheep is not smart. giving pap 70% of the votes is as good as telling...
  • Ministers Protect Themselves: Salaries are low for the working public but things are getting very expensive. However...
  • a sad sad situation: did anyone in the family inform TC of their dire straits situation? if they had maybe they...
  • Harder Truths: Does not matter how needy you are – the servants of the government just do not care. Mostly FT...
  • Longanus Lee Albinus: Mr Tan seems to be having a health problem due to being rich. The 47% retirees who could not...
  • Longanus Lee Albinus: Good on you Mr Kin Lian. Hope you just dun repeat the vote splitting that allowed tony to win....
  • Pioneer heart aches: Felt so sorry or this family,wonder how multimillion dollar ministers sleep at night:bet you...
  • Samuel S: PC Ong said Study hard and work hard and we will be ok. But this case is about a person who contracted...
  • Harder Truths: Apologies- 2nd para should read “The division is racial – ethnicity – as the basis for group...
  • Harder Truths: Aziz – where did you get that idea – that the MP’s are passing themselves off as...
  • they will remain silent: Those multimillion-dollar salaried and bonused PAP leaders will pretend not to have seen or...
  • What is Wrong?: While they are collecting more money, the aged and elderly poor are collecting cardboard boxes!
  • Asd: This is not your own country it’s just a motel
  • There is a difference, bro: In the rule of nature, the race follows the papa. Religion, on the other hand, can be...
  • There is a difference, bro: yep thats it!: just another day in paradise–Phil Collins. the difference...
  • N.Jungne: Aziz, you’re spot on, unfortunately it has been misused.
Announcements
Advertisements
Advertisements
Visitors Statistic
Latest Statistic