Chasing wealth and income, present and past, onshore and offshore.

Berkeley, CA
Joined April 2014
Makes me think: What if billionaires transferred some percentage of their wealth each year to a big general purpose fund — like an SPAC if you will — with disruptive, scalable investments in education, health and infrastructure? Crazy? nytimes.com/2021/06/15/busin…
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Yes something like this — are we onto something?
Replying to @gabriel_zucman
Some kind of progressive crowdfunding arrangement?
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Perhaps shockingly, the best way to tax people with a ton of wealth is a tax on wealth
Question: What would be the best way to change the tax code to tax billionaires WITHOUT taxing unrealized gains? How would you do it? Please put your best ideas in the replies 👇
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Effective tax rates (including all taxes) by income group in the United States, 1950-2018 (Data, methodology, and open-source simulations: taxjusticenow.org/)
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The debate about billionaire taxes: Person A: wow, it’s disturbing that top billionaires pay no tax Savvy Twitter commentator: ahaha you fool you divided zero by a denominator I don’t like!!
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Gabriel Zucman retweeted
The world is one step closer to a new corporate tax system. Three questions drive attempted reform: When companies operate in multiple countries, who should get to tax their profits? How much should that tax be? Should there be a minimum rate? NEW EPISODE tradetalkspodcast.com/podcas…
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Simple computation inspired by the @propublica revelations: How would a 2% wealth tax change the amount of tax paid by the 25 wealthiest Americans?
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Gabriel Zucman retweeted
Finance leaders from the G7 countries agreed on a new global minimum tax rate of at least 15 percent that companies would have to pay regardless of where they book profits. How much additional revenue countries can gain from adopting a global minimum tax depends on the rate. 👇
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Yes — it's the minimum tax ("pillar 2") that matters! As the EU Tax Observatory report shows, the European Union could collect €170 billion / year with a 25% minimum tax — orders of magnitude more than what pillar 1 may generate taxobservatory.eu/wp-content…
It is extraordinary how focused the UK is on pillar one, which OECD estimates will bring in $5bn-$12bn worldwide - and how entirely uninterested the UK is in the global minimum tax rate, pillar 2, which we estimate at potentially more than that *for the UK alone*.
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Concretely, if the return to wealth is 4%, a 0.17% tax rate on wealth means a 4.25% income tax rate If return is 6% --> 2.8% income tax rate If return is 8% --> 2.1% income tax rate Bottom line: top 25 US billionaires had an effective income tax rate of 2%-4% in 2018
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Another way to look at this is to ask: how much would the top 25 billionaires have paid in tax if a 3% wealth tax had been in place in 2018? They would have paid $33 billion in wealth tax Which is 17 times what they paid in income tax!
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The story expresses income taxes paid as a fraction of what economists call Haig-Simons income (consumption plus change in net worth) The top 25% have a 3.4% effective tax rate relative to Haig-Simons income What if one looks at other definitions of income?
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A good measure of income is pre-tax national income (= roughly what billionaires would have to report if all their businesses were pass-through entities) Out of pre-tax income, the top 25 paid 2.5% in federal taxes in 2018 (assuming a rate of return of 7%, the US average) 2.5%!
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Anyway, lots of things to digest in this report, but the punchline is that the US tax system is severely regressive at the very top-end Which might not be totally optimal
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