Maine Democrats move to repeal estate tax breaks for wealthy
Democratic members of the legislature’s Tax Committee voted last week to advance a bill that would lower the threshold for the state’s estate tax in a move advocates hope will restore a measure of fairness to the Maine tax code.
Over the course of his administration, former Governor Paul LePage raised the estate tax threshold, which he referred to as the “death tax,” from $1 million to $5.6 million for individuals or $11.2 million for joint estates of married couples. During the June 6 work session, lawmakers were considering two bills, LD 518 and LD 420, which would undo LePage’s cut and lower the exclusion amount to $1 million and $2 million, respectively.
Kicking off the discussion, committee chair Rep. Ryan Tipping (D-Orono) explained that the estate tax was conceived early in the history of America to “allow for social upward mobility” and to “make sure we don’t end up having an oligarchy that can continue to stay in power just because they amassed wealth through different generations.” ...
The committee voted along party lines to advance LD 420, which would bring the individual exclusion to $2 million, to the floor for a vote.
Advocates say that the estate tax is one of the last remaining avenues this session that could recoup some of the revenue lost as a result of LePage’s extensive tax rollbacks, which particularly benefited the state’s wealthiest individuals.
“This one change for those who have accumulated wealth has created a hole often of millions of dollars each year in our state budget,” John Kosinski of the Maine Education Association said in testimony to the committee.
The Guardian June 6 - Jonathan Aldred
‘Socialism for the rich’: the evils of bad economics
The economic arguments adopted by Britain and the US in the 1980s led to vastly increased inequality – and gave the false impression that this outcome was not only inevitable, but good.
In most rich countries, inequality is rising, and has been rising for some time. Many people believe this is a problem, but, equally, many think there’s not much we can do about it. After all, the argument goes, globalisation and new technology have created an economy in which those with highly valued skills or talents can earn huge rewards. Inequality inevitably rises. Attempting to reduce inequality via redistributive taxation is likely to fail because the global elite can easily hide their money in tax havens. Insofar as increased taxation does hit the rich, it will deter wealth creation, so we all end up poorer.
One strange thing about these arguments, whatever their merits, is how they stand in stark contrast to the economic orthodoxy that existed from roughly 1945 until 1980, which held that rising inequality was not inevitable, and that various government policies could reduce it. What’s more, these policies appear to have been successful. Inequality fell in most countries from the 1940s to the 1970s. The inequality we see today is largely due to changes since 1980.
In both the US and the UK, from 1980 to 2016, the share of total income going to the top 1% has more than doubled. After allowing for inflation, the earnings of the bottom 90% in the US and UK have barely risen at all over the past 25 years. More generally, 50 years ago, a US CEO earned on average about 20 times as much as the typical worker. Today, the CEO earns 354 times as much.
Any argument that rising inequality is largely inevitable in our globalised economy faces a crucial objection. Since 1980 some countries have experienced a big increase in inequality (the US and the UK); some have seen a much smaller increase (Canada, Japan, Italy), while inequality has been stable or falling in others (France, Belgium and Hungary). So rising inequality cannot be inevitable. And the extent of inequality within a country cannot be solely determined by long-run global economic forces, because, although most richer countries have been subject to broadly similar forces, the experiences of inequality have differed.
Vanity Fair: Conscience-Stricken Billionaires Beg 2020 Candidates: Take Our Money
George Soros, Abigail Disney, and 17 other zillionaires say a wealth tax is “the least we can do.”
New York Times
Who Gets to Own the West?
A new group of billionaires is shaking up the landscape. ...
The purchase also placed the Wilkses high on the list of well-heeled landowners who are buying huge parcels of America. In the last decade, private land in the United States has become increasingly concentrated in the hands of a few. Today, just 100 families own about 42 million acres across the country, a 65,000-square-mile expanse, according to the Land Report, a magazine that tracks large purchases. Researchers at the magazine have found that the amount of land owned by those 100 families has jumped 50 percent since 2007.
Much of that land stretches from the Rocky Mountains down into Texas, where, for some, commercial forests and retired ranches have become an increasingly attractive investment.
Battles over private and public land have been a defining part of the West since the 1800s, when the federal government began doling out free acres to encourage expansion. For years, fights have played out between private individuals and the federal government, which owns more than half of the region.
But now, with wealthier buyers purchasing even larger parcels, the battle lines have shifted. Many local residents see these new owners as a threat to a way of life beloved for its easy access to the outdoors, and they complain that property that they once saw as public is being taken away from them.
A wealth tax isn’t the best way to tax the rich
A HOST of public opinion data confirms that Americans favor higher taxes on the wealthy. It would seem that taxing the rich is so popular that even the rich are for it, or at least some of them. An open letter published June 24 by 19 very wealthy people, including Abigail Disney and George Soros, declared that “America has a moral, ethical and economic responsibility to tax our wealth more.” Billionaire Eli Broad chimed in with a pro-wealth-tax New York Times op-ed. Certainly their self-abnegating spirit is consistent with the policy tendency that Democratic candidates expressed during their first debates; and the letter spoke favorably of a direct tax on wealth similar to the one Sen. Elizabeth Warren (D-Mass.) has proposed, which would put a 2 percent levy on assets above a $50 million threshold and 3 percent on assets over $1 billion.
We couldn’t agree more with the letter writers that the United States needs to raise more federal revenue and that “the next dollar of new tax revenue should come from the most financially fortunate, not from middle-income and lower-income Americans.” Undeniably, too, the 2017 tax law that President Trump and a Republican Congress enacted showered billions of dollars worth of tax relief on upper-income people and businesses. Incredibly, news reports indicate the Trump administration is considering executive action to create yet another tax reduction that primarily benefits the rich — indexing capital gains to inflation. This would fly in the face of public opinion and, more importantly, could cost the treasury between $10 billion and $20 billion per year, according to Leonard E. Burman of the Tax Policy Center.
Unlike the open letter’s authors and Ms. Warren, however, we are not convinced that a wealth tax is the optimal means of raising taxes on those who can afford to pay more. In addition to a likely constitutional challenge, the measure would encounter implementation problems — especially the consistent valuation of assets ranging from land to rare art — similar to those that have caused most European nations that tried a wealth tax to abandon it. Indeed, it’s all too likely that a wealth tax would bring in less revenue than advocates anticipate, in part because millionaires can afford the best accountants and lawyers. What’s more, a wealth tax of the kind Ms. Warren proposes would not distinguish between wealth accumulated through enterprise and innovation, which is socially productive, and wealth gained through inheritance or rent-seeking, which is not.
A better approach would be to repeal those provisions of the 2017 tax law that restored favored treatment to large estates; to reduce the favorable treatment of capital gains in general; and to eliminate the huge break for profits on the sale of stock by people who inherit it from rich benefactors. These measures are all clearly constitutional, all readily administrable by the existing Internal Revenue Service apparatus — and all well-calculated to raise substantial amounts from the top 1 percent, or less, of the income scale. A wealth tax is certainly a bold and spectacular proposal; what the country needs most, however, are effective ones.
Vox - Matthew Zeitlin
Can Elizabeth Warren build a bigger welfare state without taxing the middle class?
It’s hard to build a Nordic welfare state on the backs of the rich alone.
During the second night of the first Democratic debate, moderator Savannah Guthrie asked Bernie Sanders a pointed question: “My question to you is, will taxes go up for the middle class in a Sanders administration? And if so, how do you sell that to voters?”
The Vermont senator defended his plans in his typical populist way, saying, “Health care in my view is a human right and we have got to pass a Medicare-for-All single-payer system.” But then he added, “Under that system ... the vast majority of the people in this country will be paying significantly less for health care than they are right now,” and acknowledged that Guthrie was “quite right” — that middle-class taxes would have to go up for that to happen.
It was a rare moment when someone running for the Democratic presidential nomination admitted that their spending ambitions would have to be paid for by taxes that touch not just the wealthiest Americans but taxpayers further down the bracket. Government-provided health care programs tend to be quite popular, and majorities think the rich pay too little in taxes. But for the same reason, no one much likes talking about raising middle-class taxes, even if it’s to provide social services that are popular.
Universal health care, government-funded or -provided child care, generous parental leave, free college: When you squint at the left flank of the Democratic primary, where Sanders and Elizabeth Warren support some or all of these policies, you see a vision for a radically different America. For the most part, this different America will be paid for by the rich and corporations.
Too much money (and too few places to invest it)
A truly bizarre trend is having an impact on the economy — wealthy people and corporations have so much money they literally don't know what to do with it.
Why it matters: At a time when growing income inequality is fueling voter discontent and underpinning an array of social movements, the top 1% of earners and big companies are holding record levels of unused cash.
The big picture: U.S. companies raked in a record $2.3 trillion in corporate profits last year, while the country's total wealth increased by $6 trillion to $98.2 trillion (40% of which went to those with wealth over $100,000).
So, where is all the money going? The IMF notes large companies around the world are overwhelmingly and uniformly choosing not to reinvest much of it into their businesses. They're hoarding it in cash and buying back stock.
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Maybe they should try investing in Guillotines, Inc.? I feel like that's a stock with massive growth potential.
"There's no play here. There's no angle. There's no champagne room. I'm not a miracle worker, I'm a janitor. The math on this is simple; the smaller the mess, the easier it is for me to clean up." -Michael Clayton
Invest it in average/low income neighbourhoods and needs. The Giving Pledge. The Giving Pledge is a campaign to encourage wealthy people to contribute a majority of their wealth to philanthropic causes.
To which Trump replied, Fuck the law. I don't give a fuck about the law. I want my fucking money.
MarketWatch: Here’s what 2020 Democratic candidates have said about universal basic income
Baltimore Sun Editorial
Don’t soak the rich, squeeze them like it’s 2009
The increasing concentration of U.S. wealth in the hands of a relative few has gotten much attention among the Democratic presidential candidates. Small wonder. The wealthiest three families now have as much ($248.5 billion) as the bottom half of all Americans ($245 billion). You don’t have to be a card-carrying socialist to question the wisdom of this concentration of wealth. Unfortunately, some of the possible fixes, like Sen. Elizabeth Warren’s outright tax on the assets of the super rich (a $2.75 trillion, 10-year initiative) may strike some Americans as too extreme, or at least too difficult to accomplish.
Well, Maryland’s own U.S. Sen. Chris Van Hollen has devised a more modest and straightforward approach to preserving a republic that won’t be wholly dominated by the offspring of the Buffets, Gateses or Bezoses and their ilk, and it deserves more attention than it has received since its unveiling last month. His aptly-named plan, the Strengthen Social Security by Taxing Dynastic Wealth Act, would return the estate tax and gift tax to 2009 levels (bumping it from 40% to 45%) while lowering the exemption to $3.5 million (or $7 million for married couples). The new revenue would then be be deposited entirely into the Social Security trust fund to help cover retirement, death and disability claims for many years to come.
In a recent meeting with The Sun’s editorial board, Senator Van Hollen noted that the Social Security half of his proposal was no accident but an attempt to broaden support for raising the estate tax which, despite being maligned as a “death tax” by Republicans, has been part of the U.S. tax code for a century (with a brief interruption in 2010). It is paid by fewer than 2% of heirs who come into a financial windfall. And the idea of dedicating the estate tax to Social Security? That was promoted more than a decade ago by none other than the late Robert M. Ball, perhaps the nation’s leading Social Security expert of the 20th century. And since Mr. Ball’s death in 2008, trust fund finances have only gotten shakier with reserves expected to be depleted by 2034. ...
Is the proposal perfect? Probably not. The affluent can always find tax avoidance loopholes that aren’t available to the rest of us, but again, that’s not a good reason to give up on tax fairness. Admittedly, the senator probably can’t convince President Donald Trump or most Senate Republicans to get behind such a measure, but the 2020 election could lead to some early retirements. After that, a return to 2009 estate tax rates might look a whole lot more do-able.
Back in the Good Olde Days the rich were taxed at 70+ percent. Even Laffer, that darling of the Republicans, calculated that there would still be incentive to maximize profits with tax rates of up to 50 percent. Bring on the 50 percent for the rich!
Trump: Er hat eine größere Ente als ich.
Putin: Du bist kleiner als ich.
Putin: Du bist kleiner als ich.
I agree with increasing tax rates.
The other thing I would do is increase the tax rate on capital gains based on the holding period. I'd have 1-3 years, 3-5 years, and >5 year long term capital gains rates.
The other thing I would do is increase the tax rate on capital gains based on the holding period. I'd have 1-3 years, 3-5 years, and >5 year long term capital gains rates.
MAGA - Morons Are Governing America
The World’s Wealthiest Family Gets $4 Million Richer Every Hour
The numbers are mind-boggling: $70,000 per minute, $4 million per hour, $100 million per day.
That’s how quickly the fortune of the Waltons, the clan behind Walmart Inc., has been growing since last year’s Bloomberg ranking of the world’s richest families.
At that rate, their wealth would’ve expanded about $23,000 since you began reading this. A new Walmart associate in the U.S. would’ve made about 6 cents in that time, on the way to an $11 hourly minimum.
Even in this era of extreme wealth and brutal inequality, the contrast is jarring. The heirs of Sam Walton, Walmart’s notoriously frugal founder, are amassing wealth on a near-unprecedented scale — and they’re hardly alone.
The Walton fortune has swelled by $39 billion, to $191 billion, since topping the June 2018 ranking of the world’s richest families.
Other American dynasties are close behind in terms of the assets they’ve accrued. The Mars family, of candy fame, added $37 billion, bringing its fortune to $127 billion. The Kochs, the industrialists-cum-political-power-players, tacked on $26 billion, to $125 billion.
So it goes around the globe. America’s richest 0.1% today control more wealth than at any time since 1929, but their counterparts in Asia and Europe are gaining too. Worldwide, the 25 richest families now control almost $1.4 trillion in wealth, up 24% from last year.
GQ: Why Andrew Yang’s Universal Basic Income Proposal Has Been Gaining Ground
The cash-guarantee proposal has new fans, but what is UBI exactly?
Poll: 70 Percent of Americans Feel Angry at Political System That Favors Insiders With Money and Power
Will an angry electorate bring about change?
According to a new NBC News/Wall Street Journal poll released on Sunday, Americans are just as angry with the nation’s political and financial establishment as they were before Trump was elected.
Seventy percent of Americans told pollsters that they feel angry “because our political system seems to only be working for the insiders with money and power, like those on Wall Street or in Washington.”
That number overall has barely budged since October 2015. However, Republicans are less angry than Democrats. Twenty-nine percent of Republicans said they are angry, compared to 39 percent expressing anger in 2015. Fifty-four percent of Democrats expressed anger now, but in 2015 only 44 percent said so.
Women under 50, Hispanics, and African Americans saw the biggest increases. For women, the poll registered a 10 percent spike, while Hispanics rose by 11 points and African Americans ticked up five percentage points.
“The question that decides the 2020 election may no longer be ‘Are you better or worse off than you were four years ago?’ but instead ‘Are you as angry as you were four years ago?’ And if that’s the question, the answer is a deafening yes,” Democratic pollster Jeff Horwitt of Hart Research Associates told NBC News.
Wall Street Journal - Richard Rubin
Democrats' emerging tax idea: Look beyond income, target wealth
The income tax is the Swiss Army Knife of the U.S. tax system, an all-purpose policy tool for raising revenue, rewarding and punishing activities and redistributing money between rich and poor.
The system could change fundamentally if Democrats win the White House and Congress. The party’s presidential candidates, legislators and advisers share a conviction that today’s income tax is inadequate for an economy where a growing share of rewards flows to a sliver of households.
For the richest Americans, Democrats want to shift toward taxing their wealth, instead of just their salaries and the income their assets generate. The personal income tax indirectly touches wealth, but only when assets are sold and become income.
At the end of 2017, U.S. households had $3.8 trillion in unrealized gains in stocks and investment funds, plus more in real estate, private businesses and artwork, according to the Economic Innovation Group, a nonprofit focused on bringing investment to low-income areas. Most of the value of estates over $100 million consists of unrealized gains, said a 2013 Federal Reserve study. Much has never been touched by individual income taxes and may never be.
Democrats are eager to tap that mountain of wealth to finance priorities such as expanding health-insurance coverage, combating climate change and aiding low-income households. Their ideas range from new rules on inherited assets, to a plan by Sen. Ron Wyden for annual taxes on unrealized gains, to a proposal from Sen. Elizabeth Warren’s to tax wealth itself. These come atop more conventional proposals to raise income taxes and expand estate taxes.
“The whole tax system is stacked in favor of the tax-avoidance crowd,” said Mr. Wyden, who would lead the tax-writing Finance Committee if Democrats retook the Senate. “When you stand up and you say, hey look, you’ve got one system for a cop and a nurse and another for highfliers to pay what they want to, when they want to, everybody nods.”
DCReport: How the Rich (and Their Kids) Avoid Taxes … Forever
I'd take it one step further. I'd have 1 hour rates, 1 day rates, 1 week rates, one month rates etc. That would put an end most of the short term shenanigans that screw up the stock market.
WaPo: $1,000 a month, no strings attached
A Mississippi program giving low-income mothers a year of “universal basic income” reflects an idea gaining popularity with Democrats even as restrictions on public benefits grow.
New York Times
How a Trump Tax Break to Help Poor Communities Became a Windfall for the Rich
NEW ORLEANS — President Trump has portrayed America’s cities as wastelands, ravaged by crime and homelessness, infested by rats.
But the Trump administration’s signature plan to lift them — a multibillion-dollar tax break that is supposed to help low-income areas — has fueled a wave of developments financed by and built for the wealthiest Americans.
Among the early beneficiaries of the tax incentive are billionaire financiers like Leon Cooperman and business magnates like Sidney Kohl — and Mr. Trump’s family members and advisers.
Former Gov. Chris Christie of New Jersey; Richard LeFrak, a New York real estate titan who is close to the president; Anthony Scaramucci, a former White House aide who recently had a falling out with Mr. Trump; and the family of Jared Kushner, Mr. Trump’s son-in-law and senior adviser, all are looking to profit from what is shaping up to be a once-in-a-generation bonanza for elite investors.
The stated goal of the tax benefit — tucked into the Republicans’ 2017 tax-cut legislation — was to coax investors to pump cash into poor neighborhoods, known as opportunity zones, leading to new housing, businesses and jobs.
The initiative allows people to sell stocks or other investments and delay capital gains taxes for years — as long as they plow the proceeds into projects in federally certified opportunity zones. Any profits from those projects can avoid federal taxes altogether.
Patriotic Millionaires: In Revenue Shortfalls, Don’t Fine the Poor – Tax the Rich
Almost Half of Americans Now Back Yang-Style Basic Income
Americans are increasingly in favor of universal basic income (UBI), according to a Hill-HarrisX poll released Wednesday.
The national poll, which asked 1,001 registered voters whether they believe the “government should have a [UBI] program,” found that 49% are in favor of such a policy — up 6% from a similar poll released in February. Voters who oppose a UBI policy dropped from 57% in February to 51% in Wednesday’s poll. ...
Young voters, however, remain largely more in favor of a UBI program than those older than 65. Among voters between the ages of 18 and 34, 72% were in favor of UBI. By contrast, only 26% of voters over 65 expressed support for such a program.
US income inequality jumps to highest level ever recorded | Markets Insider
Income inequality last year reached its highest level in more than half a century, as a record-long economic expansion continued to disproportionately benefit some of the wealthiest Americans.
A key measure of wealth distribution jumped to 0.485 in 2018, the Census Bureau said Thursday, its highest reading since the so-called Gini index was started in 1967. The gauge, which uses a scale of 0 to 1, stood at 0.482 a year earlier.
Alabama, Arkansas, California, Kansas, Nebraska, New Hampshire, New Mexico, Texas, and Virginia saw income inequality rise significantly last year. Washington, DC, and Puerto Rico saw the highest Gini index readings, while Utah was among the lowest.
Real median household income rose by 0.8%, to $61,937, in 2018, a slightly smaller increase than in the three previous years, the Census Bureau said. The economy has expanded steadily over the past decade, which has helped to push the unemployment rate to historic lows.
But a majority of growth has gone to higher-income earners and the owners of financial instruments, said Timothy Smeeding, a professor at the University of Wisconsin at Madison who studies poverty and economic mobility.
"Wages remain low, there is a lack of childcare for single-parent families, and so on. Work alone won't solve poverty — unless wages and earnings pick up substantially," he said. "It still takes government aid for families with children and others who do not earn enough, despite working 40-plus hours a week."
CNBC: Warren Buffett and Bill Gates agree that the rich should pay higher taxes—here’s what they suggest