what would happen if governments made billionaires actually pay the appropriate amount of tax based on their income?
In: Economics
Many previous posts on this. Billionaires have to pay pay taxes like everyone else but they do not draw an income, so the tax amount is zero.
They live by borrowing from the banks with their wealth as collateral, and they live on borrowed money. When they need to pay it off, they borrow some more.
I see why no one touches this subject….. and that already happens in quite a few places. Just not the U.s. if they did that. Well companies would just move their business else where. I believe we are the only ones that taxes on income made in other countries. Also dare I say it. With someone making that much money after you tax them down to a few hundred mill. I’m not going to continue. Go research companies from other countries and their tax system
Billionaires are required by their country to pay taxes. The accountants and lawyers they pay to do their taxes on their behalf are experts in the tax laws of that country. These lawyers and accountants advise their clients what they must pay in order for them to be in compliance with those laws. Those billionaires follow that advice because they want to stay on the right side of the law.
To say that they don’t pay their fair share is inaccurate. They pay *what the law requires*. People who vilify them for following the law should focus their attention to the government officials who make the laws.
Income and wealth are two different things. Taxation of wealth vs income varies around the world. I think generally income is taxed „heavier“ (it is not quite clear to me how to meaningfully and quantitatively compare income vs wealth tax).
Some people think that the rich may just move their „tax location“ to another country. This is a common argument for politicians who are in favor of low taxes for the wealthy. Rich people usually have homes all over the world. Notably it is not entirely trivial to determine (and check/enforce) where someone needs to pay taxes. Again this will vary by country
An important question is how income or someone’s worth is defined. Most billionaires don’t have a big vault with billions in cash in it.
The government can decide how to calculate how much money one should contribute as taxes. It’s a political choice how the calculation will work. Do people who invest a lot need to be taxed? People who own a lot of property? People who have a high wage? Does everyone have to pay the same amount, or are we going to give a reduction to people with lower incomes…
Once they work out which calculation they will apply, the ball goes back to the other camp. All the tax specialists, like lawyers, accountants, individual people will start looking for loopholes. People are greedy, in the sense that they try to keep and make as much money as they can. So they will naturally try to find ways to pay as little taxes as possible.
Most people will stay within the law, and just find ways to avoid taxes. Some do it illegally and evade taxes. There are legal constructions that pool all the money and assets someone has in a virtual legal entity, and just give a small monthly payout to the real person. There are cases where objectively rich people still can apply for all kinds of grants because, on paper, they have a low income.
Your question assumes what’s happening at the moment is not fair but provides no definition of what you think fair would be. That aside most billionaires are that on paper rather than getting billion dollar incomes.
For example they have a billion dollar company with assets but it also has overheads and liabilities. That company often provides many people jobs who’s income is taxed. If governments overly tax the company they will incentive outsourcing to overseas which will mean job loses and cost the government taxable incomes. It also could mean losing industries overseas to places like China.
There’s so many aspects to it and I’ve barely scratched the surface and kept thing exceedingly simple but hopefully you get the idea. I’m also not saying what’s happening now is perfect or even right but is not nearly as simple as what people make it out to be.
Lot of rich people shilling going on here. I’m pretty bad at economics but I’ll give it a go. In a “perfect world” they all stay and agree to pay a larger portion in taxes, the vehicle for this can be an increased tax rate or closing tax loopholes which are being used to offset their tax responsibilities. In a less perfect probably closer to reality, some will leave, do a better job of shielding their finances (think off shores, shell companies, etc), or straight up old school tax evasion. The increase in the government budget is probably close to being stastically significant and if nothing else would go a long way to quelling anomosity between the financial classes.
Lmao
You mean (billionaires) governments making billionaires pay their fair share?
Billionaires write the laws.
You think they’ll agree on taxing themselves?
Lmao
Lot of rich people shilling going on here. I’m pretty bad at economics but I’ll give it a go. In a “perfect world” they all stay and agree to pay a larger portion in taxes, the vehicle for this can be an increased tax rate or closing tax loopholes which are being used to offset their tax responsibilities. In a less perfect probably closer to reality, some will leave, do a better job of shielding their finances (think off shores, shell companies, etc), or straight up old school tax evasion. The increase in the government budget is probably close to being stastically significant and if nothing else would go a long way to quelling anomosity between the financial classes.
They have expensive lawyers/accountants to minimise the tax they have to pay, and their wealth is tied into their assets and not their income. Eg Jeff Bezos could be paid $1 in income but he’s rich because his shares in Amazon are worth $200 billion.
The fairest system would tax them a % of their assets in addition to income tax – eg 1% per year. A person with a million dollars in assets would only have to pay $10000 a year in asset tax … but someone like Bezos would have to pay $2 billion
Latest Answers