Politics Wealth Tax

Both Sanders and Warren feature wealth taxes as the central means to fund their proposed spending on multiple social programs. I continue to be surprised that none of the other Dem candidates are calling them in this. While it’s not been tested in the courts yet, there’s certainly reason to believe that this is unconstitutional, as discussed in this NY Times article:

https://www.google.com/amp/s/www.nytimes.com/2019/11/07/opinion/wealth-tax-constitution.amp.html

There are certainly other lefty legal beagles who disagree, but I have to think that even if Warren or Sanders could get a tax like this through Congress (extremely unlikely) the five conservatives on the Supreme Court are likely to squash the tax proposal before it draws a dime.

Given that, in the view of many legal scholars , Warren and Sanders have built their whole platforms on a house of cards, why aren’t they being called on the carpet by their opponents?

e_blazer said:

Both Sanders and Warren feature wealth taxes as the central means to fund their proposed spending on multiple social programs. I continue to be surprised that none of the other Dem candidates are calling them in this. While it’s not been tested in the courts yet, there’s certainly reason to believe that this is unconstitutional, as discussed in this NY Times article:

https://www.google.com/amp/s/www.nytimes.com/2019/11/07/opinion/wealth-tax-constitution.amp.html

There are certainly other lefty legal beagles who disagree, but I have to think that even if Warren or Sanders could get a tax like this through Congress (extremely unlikely) the five conservatives on the Supreme Court are likely to squash the tax proposal before it draws a dime.

Given that, in the view of many legal scholars , Warren and Sanders have built their whole platforms on a house of cards, why aren’t they being called on the carpet by their opponents?

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i haven't read the times article nor seen the entirety of the proposed tax plans so should likely remain on the sidelines. that said imho this discussion will help show the difficulties in implementing Medicare for all, and why embracing it as core component of the party's platform, may drive unions and more blue collar workers away from the party and into the 'vote MAGA' camp. it seems it will take not just money=higher individual taxes to fund, and a difficult sell to the members of the unions already benefiting from negotiated Cadillac plan health care coverage. to drive away this key component of the traditional democratic base in this election cycle will likely lead to a disastrous result for democratic candidates. again IMHO. that said, the concept of taxing the rich is a popular idea across the voter demographic if polling is to be believed.
https://www.businessinsider.com/majority-americans-approve-elizabeth-warren-wealth-tax-plan-2019-1
https://morningconsult.com/2019/02/...althy-draws-more-support-than-ocasio-cortezs/
these are two polls that showed the popularity of Warren's plan and that only 20% were opposed to it. while i may not agree with Warren"s plan. i agree with the notion that the system is broken concerning the accumulation of wealth, and the disparity of incomes in relation to the top heavy distribution of it. the wealth tax is not the only way to address it. I believe in a more just distribution of this great nations goods. after watching Joe Kennedy III's STOU rebuttal, i still have hope for the party's future as a big tent, inclusive and social justice platform.

Trickle down has been redistributing wealth from the poor to the rich here in America since Ronald Reagan took America off of the New Deal. They give tax breaks to the wealthiest people and redistribute the tax burden to America's ever shrinking middle class. People like to complain about "the system" here in America, yet don't seem to mind the rich keeping their money out of it. But let someone truly in need have to dip into the system and people get irate.

Trickle down isn't working. Americans shouldn't have to live on crumbs here in the most powerful national on the planet.

Road Ratt said:

Trickle down has been redistributing wealth from the poor to the rich here in America since Ronald Reagan took America off of the New Deal. They give tax breaks to the wealthiest people and redistribute the tax burden to America's ever shrinking middle class. People like to complain about "the system" here in America, yet don't seem to mind the rich keeping their money out of it. But let someone truly in need have to dip into the system and people get irate.

Trickle down isn't working. Americans shouldn't have to live on crumbs here in the most powerful national on the planet.

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I’m not arguing that the rich aren’t paying enough; they aren’t. But that doesn’t mean that a wealth tax can be approved or that it will pass constitutional muster against a certain legal appeal. As far as I can see, Warren and Sanders are standing outside a candy shop and telling kids they deserve more candy and those rich people on the other side of the street should pay for it. Never mind that they don’t have a realistic plan to force those fat cats to do it.

e_blazer said:

I’m not arguing that the rich aren’t paying enough; they aren’t. But that doesn’t mean that a wealth tax can be approved or that it will pass constitutional muster against a certain legal appeal. As far as I can see, Warren and Sanders are standing outside a candy shop and telling kids they deserve more candy and those rich people on the other side of the street should pay for it. Never mind that they don’t have a realistic plan to force those fat cats to do it.

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re-establishing an inheritance tax proposals
increasing capital gains taxes proposals
hedge fund tax proposals
corporate tax increases
These would be separate from the wealth tax proposal that some candidates have endorsed as playing field levelers for wealth redistribution ie. taxes targeting the wealthy.

lawai'a said:

re-establishing an inheritance tax proposals
increasing capital gains taxes proposals
hedge fund tax proposals
corporate tax increases
These would be separate from the wealth tax proposal that some candidates have endorsed as playing field levelers for wealth redistribution ie. taxes targeting the wealthy.

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Yup, and I have no problem with increasing all of those for rich folks. They are all existing and legal forms of taxation. The wealth tax is new and is extremely unlikely to ever earn a dime of taxes yet both Sanders and Warren are counting on trillions of dollars from it to pay for their spending programs. Somebody on the dais ought to call bull shit.

This is the kind of stuff that makes it impossible to have a legitimate conversation sometimes.

SlyPokerCat said:

An easy wealth tax is increasing the tax bracket at the top of scale. Perhaps even implementing a higher tax bracket on higher income. That isn't unconstitutional.

The middle class were the only one's who got fucked by Trump's tax reform.

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It's also not a wealth tax. A wealth tax is actually charging a tax that is a percentage of a person's wealth, not their income. To me, it's pretty hard to see how that's not a "direct tax", which is unconstitutional without equal apportionment of the total tax to be raised to each state. As I've said above, I support increases in other legal forms of taxation. I'm not in favor of Sanders and Warren promising pie-in-the-sky goodies to voters based on a tax plan that is far more likely to fail than it is to become law.

There are just as many legal scholars who say that a wealth tax would not contravene the "direct tax" injunction, and those who think it is constitutional (or unconstitutional) are not purely split by liberal/conservative lines. The Supreme Court, in general, has tended to give government the benefit of the doubt when it comes to matters of taxation, even conservative Courts. While I think that Thomas, Alito and probably Kavanaugh would all be fairly sure votes to strike down a wealth tax, John Roberts and Neil Gorsuch haven't always hewed to conservative political lines--they're more willing to look at legal precedents even if it goes against what they'd, personally, want politically (as can be seen, for example, in Roberts' decisive vote on the ACA, which also incidentally pertained to tax powers by the federal government).

Thus, I don't think it's at all clear that such a tax would be struck down by the Supreme Court. Certainly, opponents of the wealth tax would have reason for optimism, but they'd probably be a lot more optimistic than is warranted. I think it's perfectly fine to be considering a wealth tax for now, until it's actually been put to the legal test. They should just have back up plans to pivot to if it is, in fact, struck down.

Minstrel said:

There are just as many legal scholars who say that a wealth tax would not contravene the "direct tax" injunction, and those who think it is constitutional (or unconstitutional) are not purely split by liberal/conservative lines. The Supreme Court, in general, has tended to give government the benefit of the doubt when it comes to matters of taxation, even conservative Courts. While I think that Thomas, Alito and probably Kavanaugh would all be fairly sure votes to strike down a wealth tax, John Roberts and Neil Gorsuch haven't always hewed to conservative political lines--they're more willing to look at legal precedents even if it goes against what they'd, personally, want politically (as can be seen, for example, in Roberts' decisive vote on the ACA, which also incidentally pertained to tax powers by the federal government).

Thus, I don't think it's at all clear that such a tax would be struck down by the Supreme Court. Certainly, opponents of the wealth tax would have reason for optimism, but they'd probably be a lot more optimistic than is warranted. I think it's perfectly fine to be considering a wealth tax for now, until it's actually been put to the legal test. They should just have back up plans to pivot to if it is, in fact, struck down.

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This quote from the article I linked makes me think it’s likely Roberts would rule against a wealth tax:

“On at least threesubsequentoccasions, Supreme Court majorities have said that taxes on real and personal property are direct taxes. Chief Justice John Roberts echoed these precedents in his opinion upholding the Affordable Care Act in 2012.”

But I agree it’s not a certainty that a duly enacted wealth tax would be struck down. I do think that the likelihood of such a tax being enacted is near zero considering pressures that would be brought to bear on Congress by lobbyists. But I would settle for someone at one of these debates at least pointing out the challenges of adopting a wealth tax and asking Bernie and Warren what happens to their plans if the golden goose they’re planning on for funding doesn’t pan out? Do they just punt and tell their backers “whoopsie”, or do they have a fallback plan? Seems like a reasonable question.

e_blazer said:

But I agree it’s not a certainty that a duly enacted wealth tax would be struck down. I do think that the likelihood of such a tax being enacted is near zero considering pressures that would be brought to bear on Congress by lobbyists. But I would settle for someone at one of these debates at least pointing out the challenges of adopting a wealth tax and asking Bernie and Warren what happens to their plans if the golden goose they’re planning on for funding doesn’t pan out? Do they just punt and tell their backers “whoopsie”, or do they have a fallback plan? Seems like a reasonable question.

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It's a reasonable question, but one politicians generally don't ask one another, in either party, for a couple of reasons.

One is that every candidate is essentially promising things they can't deliver--not out of pure dishonesty, necessarily, but because President is a weird position--outside of executive orders (which largely impact execution of existing laws), the President has no direct ability to impact law or policy. But you still have to talk about what you'll do, and Presidential candidates all want to believe and project that they'll have the ability to influence law-makers and make deals and get Congress to go along with their agenda. But you don't win the Presidency by promising small--no one wants to hear that. So they have to promise big. What's the point in calling out someone else's pie-in-the-sky when you're promising your own? As an informed voter, you have to view "promises" or "plans" as, essentially, the aspirations of the candidate and what they'd lobby for. Not what they'd do. They can't do most of it.

The other is that they may end up the Vice Presidential pick of the person who's policies they derided, and then that's just awkward--having to be a surrogate on the campaign trail, speaking for the policies you mocked as unworkable. George Bush the senior was in that uncomfortable position after calling Reagan's supply-side (or trickle-down) economics "voodoo economics." Then Bush lost the primary to Reagan and became his Vice President and had to stump for those voodoo economics. Oops.

That said, I'd echo what others have said--the wealth tax can be replaced by other types of legally proven taxes. But none of it matters all that much because I agree with you that it stands relatively little chance of getting through Congress. Some of it can be done (if Democrats manage to snare a narrow majority in the Senate) through budget reconciliation tactics, but not all of it. And that's only if A. Democrats do win a Senate majority, which right now they're the underdogs to do, and B. All the Democrats lined up behind it, which Senators like Joe Manchin probably wouldn't.

SlyPokerCat said:

I'm not equating what I said as being an actual "wealth tax." The easiest way to tax the rich is do as I said. Obviously there are multiple tax code items that allow people like Donald Trump to not pay taxes such as net operating losses from previous substantial losses.

Are you really that surprised though? You live in Oregon, yes? Every Republican running for governor runs on a platform that they will slash PERS knowing full well that will be litigated.

Same applies to presidential candidates.

At the end of the day, the wealthy should be paying more taxes. If they run on the wealth taxes platform then it turns into increasing the tax rates or adding an additional tax bracket, then awesome.

Kinda like how Trumps wall talk evolved into something different than was thrown around during his run.

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Oh, sure, there’s always political hyperbole in elections. But this is an entirely new tax that has very little chance of becoming reality, yet Bernie and Liz are out there with platforms promising major social gimmees in exchange for your votes. They may as well be proposing money trees as a source of funds.

SlyPokerCat said:

Every Republican running for governor runs on a platform that they will slash PERS knowing full well that Republicans can't win in Oregon.

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FTFY

PtldPlatypus said:

FTFY

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That platform certainly doesn't help. It immediately eliminates most of the people working under a PERS employer.

If they ran on a platform of creating a 4th tier or capping it at 100k or something reasonable, many people would be open to those ideas.

Not saying they would win....but, they don't even have a chance when they continue to bumble out the gates with that stuff.

SlyPokerCat said:

An easy wealth tax is increasing the tax bracket at the top of scale. Perhaps even implementing a higher tax bracket on higher income. That isn't unconstitutional.

The middle class were the only one's who got fucked by Trump's tax reform.

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Can confirm. Am middle class. Got fucked.

donkiez said:

Can confirm. Am middle class. Got fucked.

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Curious. Care to share? How your liability changed.

HailBlazers said:

Curious. Care to share? How your liability changed.

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Liability increased $3k approximately. I'm doing this year's taxes this weekend and so far it looks to be about the same but I won't know for sure till I am done.

And this is the phase of the tax cut that's not supposed to be painful for the middle class. In order to make it budget neutral over 10 years, so they could use budget reconciliation, they had the middle class tax cuts sunset after a few years. The tax cuts on the rich, of course, don't.

My tax return was better than last years, and Im middle class, getting back between Feds and State about 13k

TorturedBlazerFan said:

My tax return was better than last years, and Im middle class, getting back between Feds and State about 13k

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You have a bunch of kids. The child tax credit is better.

Middle class people who own homes and no kids got hosed. Not all, but that is pretty much the only demographic that got hosed.

The point is, there should NEVER be a tax cut that is detrimental to the middle class. Especially when rich people get tax cuts.

My situation is I pretty much broke even in total tax liability. And I have 1 kid.

SlyPokerCat said:

You have a bunch of kids. The child tax credit is better.

Middle class people who own homes and no kids got hosed. Not all, but that is pretty much the only demographic that got hosed.

The point is, there should NEVER be a tax cut that is detrimental to the middle class. Especially when rich people get tax cuts.

My situation is I pretty much broke even in total tax liability. And I have 1 kid.

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I have 4 kids but the tax credit didnt change that much, and our tax return was about 3.5k better so it wasn't just the extra kid.

TorturedBlazerFan said:

I have 4 kids but the tax credit didnt change that much, and our tax return was about 3.5k better so it wasn't just the extra kid.

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The child tax credit increased from 1,000 per kid to 2,000 per kid under trumps tax reform.

Also, there wasn't that much of a change from 2018 to 2019. 2018 was the first year of trumps tax reform. The big change was from 2017 to 2018.

2k of your increased refund was your new kid. The other I don't know. Your situation had to have changed somewhere. You should be able to tell easily just by comparing them.

SlyPokerCat said:

The child tax credit increased from 1,000 per kid to 2,000 per kid under trumps tax reform.

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Well only 1400 is refundable, but yeah it helps to have kids during tax season. Also I know not everyone can but we always put more in during the year to make sure were covered in the spring.

TorturedBlazerFan said:

Well only 1400 is refundable, but yeah it helps to have kids during tax season. Also I know not everyone can but we always put more in during the year to make sure were covered in the spring.

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1400 is refundable if you don't owe tax. Each kid takes off 2,000 from your total tax liability Meaning, you get to keep more of what you withheld.

I owe 10,000 in tax.
I have 1 kid.
I get a 2,000 credit.
I now owe 8,000 in tax.
I withheld 20,000.
I get a 12,000 refund.

My refund isn't limited to 11,400 because of the child tax credit.

SlyPokerCat said:

1400 is refundable if you don't owe tax. Each kid takes off 2,000 from your total tax liability Meaning, you get to keep more of what you withheld.

I owe 10,000 in tax.
I have 1 kid.
I get a 2,000 credit.
I now owe 8,000 in tax.
I withheld 20,000.
I get a 12,000 refund.

My refund isn't limited to 11,400 because of the child tax credit.

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Ok, but I didnt question any of that. All I did was say that year over we did slightly better then last year, and Id have to look again but Im pretty sure it wasnt all the tax credits. Also most of the people that are telling me they got screwed, are getting refunds just not as big as they want it to be. No one is saying that tax cuts for the wealthy is good, and just cause I mention I did better this year then last doesnt really make an argument that Trumps tax cuts were good for everyone.

TorturedBlazerFan said:

Ok, but I didnt question any of that. All I did was say that year over we did slightly better then last year, and Id have to look again but Im pretty sure it wasnt all the tax credits. Also most of the people that are telling me they got screwed, are getting refunds just not as big as they want it to be. No one is saying that tax cuts for the wealthy is good, and just cause I mention I did better this year then last doesnt really make an argument that Trumps tax cuts were good for everyone.

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Tax tables change based on what the irs and state want it to be. You can get a larger refund year over year because you increased your withholding or changed or exemptions or filing status. The tax tables were purposely changed so people would feel they had more cash in their pockets from 2017 to 2018. What happened is that many people underwithheld due to that and were annoyed because they have no idea about anything in the taxes world.

Refunds are great for people that get them but what matters is the tax paid year over year.

If you got 3500 more back of course it wasn't all credits. 2000 of it likely is from your additional child. You can compare your two returns to see very easily.

TorturedBlazerFan said:

Ok, but I didnt question any of that. All I did was say that year over we did slightly better then last year, and Id have to look again but Im pretty sure it wasnt all the tax credits. Also most of the people that are telling me they got screwed, are getting refunds just not as big as they want it to be. No one is saying that tax cuts for the wealthy is good, and just cause I mention I did better this year then last doesnt really make an argument that Trumps tax cuts were good for everyone.

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You should look at liability not return to make a better comparison. I have no kids so it appears that is why I am in the screwed bracket.

SlyPokerCat said:

Tax tables change based on what the irs and state want it to be. You can get a larger refund year over year because you increased your withholding or changed or exemptions or filing status. The tax tables were purposely changed so people would feel they had more cash in their pockets from 2017 to 2018. What happened is that many people underwithheld due to that and were annoyed because they have no idea about anything in the taxes world.

Refunds are great for people that get them but what matters is the tax paid year over year.

If you got 3500 more back of course it wasn't all credits. 2000 of it likely is from your additional child. You can compare your two returns to see very easily.

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I'm not really sure where you're trying to go with any of this.
I'm not opposed to taxing higher incomes more. I don't know exactly what my year over year taxation was, but I do know that throughout the year our living conditions were consistent and good, never really felt strapped financially, more just strapped for time. I do realize that not everyone had that experience.