Comment on Wealth inequality seems like the only outcome in a system where capital gains are taxed less than labor

DrFistington@lemmy.world ⁨4⁩ ⁨days⁩ ago

• Valmond@lemmy.world ⁨4⁩ ⁨days⁩ ago

  The central bank emits money, and gets it back with taxes. Without taxes we’d just have galloping inflation and probably wealth hoarding.

  Today we also have wealth hoarding, which could be at least alleviated with taxes, and taxing work more than capital gains is ofc utter bullshit. IMO.

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  • squaresinger@lemmy.world ⁨3⁩ ⁨days⁩ ago

    No, the central bank does not get money from taxes. That’s not how this works. That’s not how any of this works.

    The central bank emits money that turns into inflation. On purpose. Because the only thing worse than galloping inflation is no inflation or deflation.

    The way to not get galloping inflation is to not print crazy amounts of money.

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    Taxes are primarily there to fund the state (which has a much, much higher budget than what the central bank emits) and secondarily to discourage undesired behaviour.

    Income tax is used because it’s super simple to collect, compared to e.g. a wealth tax or a capital gains tax which is more complex. Together with property tax and VAT (or other forms of sales tax) it’s the backbone of most tax systems because these taxes are simple to calculate, are simple to collect and are hard to evade. Also, they disproportionally affect lower and middle classes so the rich people in power like them as well.

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    • spankmonkey@lemmy.world ⁨3⁩ ⁨days⁩ ago

      Income tax is used because it’s super simple to collect, compared to e.g. a wealth tax or a capital gains tax which is more complex.

      The real reason is that the people who are wealthy and make their money off of capital gains wanted to use the idea of income tax being easier to avoid being taxed themselves.

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      • squaresinger@lemmy.world ⁨3⁩ ⁨days⁩ ago

        It’s a bit of both, surely, but it really is much more difficult to move employees, real estate and sales outside of the country than it is to move capital outside of the country.

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• daniskarma@lemmy.dbzer0.com ⁨3⁩ ⁨days⁩ ago

  Because it’s the greater way for the government to get money.

  I’ll give my country example. 2023.

  State tax income was 270.000 million euros.

  Out of those 120.000 million were labor income tax.

  Business tax was 35.000 million

  Sales tax were 80.000 million.

  The rest were other taxes.

  Work is easy to tax, and more fair.

  Sale tax is 21% to everyone. Labor tax depends on your income. The more your income the more you pay, so it’s proportional.

  Removing all labor tax for sale tax would be highly unfair to people with low income.

  I’m more on the opposite route. Sale tax should be lower and income tax higher.

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  • ripcord@lemmy.world ⁨3⁩ ⁨days⁩ ago

    …what about capital gains tax?

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    • daniskarma@lemmy.dbzer0.com ⁨3⁩ ⁨days⁩ ago

      Taxed from 19% to 21% depending on quantity.

      The reality is that not enough people have a significant amount of capital gains. My country only have 30 people with over a billion euro. For contrast USA have 900. I think here only one million people have over one million euros in total net worth.

      The truth is that it’s not rational to pretend that society get sustained only taxing capital gains, even if they were taxed 100%.

      I’m all for augmenting capital tax, mostly because I don’t think there should be billionaires at all. But I do not think their disappear would make my taxes significantly lower. At the end of the day they are very few.

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  • DrFistington@lemmy.world ⁨2⁩ ⁨days⁩ ago

    Yeah, so you completely missed the point. A sales tax is based on consumption rates. People with more money will consume more and pay a higher tax which is appropriate because it’s proportional to not only their income but also they’re spending power. This brings us to our next point a person spending power doesn’t have anything to do with their earned income at least in the United States. If you were born rich and you never worked a day in your life you would never pay an income tax you would pay a nominal 15% capital gains tax on the trust fund that your parents set up for you and then keeping sales taxes low and property taxes low basically just subsidizes you.

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    • daniskarma@lemmy.dbzer0.com ⁨2⁩ ⁨days⁩ ago

      So increase capital gain tax. And run a net worth tax.

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