Prof. Brian Domitrovic: Why High Taxes Benefit The Rich, Explained
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- เผยแพร่เมื่อ 12 มิ.ย. 2024
- When politicians raise taxes on the rich, what do the rich do to protect their $$$? This Prof. shows how high taxes actually made America less equal.
We always hear that the rich should pay taxes more, that our tax rates aren’t high enough. If only we raise taxes we can solve a lot of our problems - inequality would go down and maybe we’d even have more economic growth. Now the funny thing about this view is it really doesn’t comport with our historical experience at all.
LEARN MORE:
The Myth of Equality in the 1950s (video): Another myth of the 1950s is that there was economic equality. Prof. Brian Domitrovic explains why this is a myth. • The Myth of Equality i...
How Cronyism is Hurting the Economy (video): Prof. Jason Brennan explains why cronyism, like the tax cuts for certain businesses in the 1950s, is bad for the economy and argues why limiting the government’s power would help solve the problem. • How Cronyism is Hurtin...
The Good Ol' Days: When Tax Rates Were 90 Percent (article): Andrew Syrios compares the tax rates in the 1950s to those of the 1980s and today mises.org/library/good-ol-day...
TRANSCRIPT:
For a full transcript please visit: www.learnliberty.org/videos/wh...
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Yes, we updated the thumbnail
I was like... Was that dress from 4 years ago already? Has Covid made time warp for me that much?
Nice 😎👌🏻
@@MrAnothis don’t fall for it, they didn’t just change the thumbnail, you have resonated into a new timeline.
Smart lol, I wouldn't have clicked on it otherwise very likely.
and a damn good update it is
What’s crazy is thinking that wealthy people would bribe politicians to do something that harms them
what's crazier is thinking "everyone is going to do the right thing" 😂😂😂😂😂😂😂😂😂😂
you’re living in a crazy world because it’s happening and ALWAYS have been happening lol you’re dumb
They do if they don't consider a tax hike high enough for their companies to not be high enough, but high enough to destroy their competition.
tax me 2%? great i will charge 3% increase, lol
What rich people want is a tax just high enough to destroy their competition but not high enough to make the economy as a whole suffer, and that is what the bribe for. That is why most rich people are part of the the more leftist aligned parties in any country nowadays. There is nothing better to them than a party that wants to micromanage the economy under their control.
This is hilarious. This is not an argument for keeping taxes low, but an argument for limiting exceptions and lobbying.
Ikr? This video was insane I couldn't believe what I was hearing.
You are correct, this video is an argument against exceptions and lobbying
His point however, is that if it costs you 50.000 dollars to lobby your way out of paying 200.000 dollars in taxes, all the rich would keep lobbying nonstop (lobbying btw, can't actually be stopped, since it's pretty much impossible to have a flexible enough system to change that isn't susceptible to bad changes)
While with low tax rates, it costs you 50.000 dollars to lobby your way out of paying... 10.000 dollars? Not worth it.
Corrupt assholes aren't innately "assholes", they are innately "corrupt". His core argument is "lobbying is inevitable, and a huge waste of money, since it's dollars that only go from pocket to pocket, instead of doing anything" therefore "the system with less lobbying will net us more money to society"
Btw, I'm not defending him, I personally believe in a tax rate that is independent of income... but come on! How did you listen this guy for 5 minutes straight, and still miss his only main argument?????
Edit: Since I had already assumed it to be impossible, I am now very interested to hear how one could limit or banish lobbying, without restricting the system to the point of having eternal rules, or being exclusively controlled by those in power. What are your ideas?
And how do you propose stopping lobbying and exemption? The higher the tax rate the more willing people are to spend more money lobbying. Lower tax rate -> less incentive to lobby and make exemptions.
@@airiquelmeleroy I'd imagine that lobbying could be limited by restricting donations to politicians (I don't know much or have much of an opinion on any of this, just my honest thought).
Bit slow aren't ya
"Tax the Rich"
Billionaires with a 1 Dollar Salary: Yes I Agree!
Billionaires (Charge increase price of goods to 1000 percent)
You don’t have wealth taxes and other non income based taxes like the rest of the world? Cause thats exactly what our left propagandas is fasly claiming cause they just take income tax and ignore the other taxes that increase the tax loud by more then double and a lot more than normal tax payers have to pay.
But it obviously works greatly with the young left in our country who haven’t payed them self taxes yet and enjoy free education that they are not sure yet where it is coming from. They usually switch to middle voters after they start working and paying taxes themself while the new generation calls for more taxes. The circle of life i guess.
@@CaitSith87 yup
That's why the two right wing parties would do corporate tax and personal tax all day but would not touch capital gains. That's where the real money is.
That's the point of a wealth tax. Lmfao
*Honest question:* What's stopping the rich from keeping using loopholes even with low tax rates?
the higher the tax rate, the higher the reward for dodging it. Low tax rates would make the effort to dodge them not worth it. No one will invest in something (legal or not) if the return isn't relevant.
Nothing. If you can avoid paying taxes through loopholes, you’re gonna do it.
The video basically amounted to “high taxes bad and creates more inequality because loopholes” and makes it seem like people just want to raise the tax rate on the rich. That’s not what people mean when they say “tax the rich” or whatever it is they say.
They mean “actually tax them instead of letting them exploit loopholes.” That alone would be a great first step in reducing the growing wealth inequality that we have today.
@@thatguy_66 Yep agree, just delete those excemptions from the ruleset and the "ree dont tax rich ppl, its bad for growth" have no argument.
@@thatguy_66 no, it wouldn't. They would leave the economy or find another country.
I make a solid amount, and enough where it is worth it for me to give up my citizenship for 10 years, still live in USA and then buy back my citizenship in the future. My options is to pay 55% taxes for stupid and corrupt usage instead of helping people OR I can pay 0% in a tax haven country and still live in USA. If I were to pay 25%-35% I wouldnt even bother going through this effort
Some people actually believe that professional politicians know what they are doing. Some kids believe Santa Claus brings them presents.
But these adults believe so for reasons...
We have to explain them..
It's not that people are dumb
☮️
This is why being a politician should be a part-time job.
@@caster863 You are absolutely correct. It's more democratic, more egalitarian, and less likely to develop into a class of people who rule and people who follow. Law makers should have to make their living under the burden of the laws they pass.
fr -
But I also don’t blame them cuz yk we aren’t given any financial education in schools or colleges..
I actually learnt this by reading books but not everybody reads books and that also isn’t their fault-
@@morningglory.213 The proof of what you said is people graduating college with $30,000, $40,000, (or more or less) in debt due to signing student loans. It's wrong for anyone to call them educated.
in other words the richs like loopholes, not high taxes rates
No, those loopholes prevent competition, securing their position. Also please change your handle since you are not a libertarian.
high tax rates incentivize costly measures to find and create loopholes. the video is about how high tax rates create inequality, so the title doesn't make much sense
THe rich will find loopholes regardless
Yeah, the title has nothing to do with the content of the video.
What would be a flat tax rate?
One serious flaw with this analysis. Even though the top marginal tax rate went down over the decades, many of the old exceptions in the tax code remained, many were modified to suit the new marginal tax rates, and many more new ones were also added. As a result, the richest people in America were paying a continuously decreasing effective tax rate to point where today they pay a lower effective tax rate than most Americans. I agree with the sentiment, however, that marginal tax rates mean jack shit unless the loopholes and exceptions are also addressed.
also a note that his entire premise of "tax the rich is bad" is based on tax exemptions. okay then tax the rich with no exemptions? lol
there is a reason why europians were going to US between 1950-1990. there is also a reason why we are not migrating to US anymore. cuz america is now no better then where we live.
US was richer back then compared to rest of the world.
Shhh, let's ignore that fact and pretend that widespread corruption isn't the bigger issue.
@@filip6076 I don't know in what world you live in, but the rich on average will always have more leverage towards policy than the poor. The decision tree is simple. When you can make more money by paying/influencing/threatening politicians, you do. I don't know people who can do that who aren't rich.
I have a special kind of disrespect towards people who treat problems that haven't been solved for millennia as if they're easy. Unless you can demonstrate otherwise, you are one of such people to me. Everyone has their price. Even you. For me it's the safety of my family. This is why corruption is hard to deal with. Because everyone has their price, even if it's not money. Even though you won't take the money, rich people can pay the money to make your family unsafe.
But that's just the usual corruption. That happens whether or not tax is high. To me the worse part is money being hidden when they could've been used for productive purposes, just because you'll pay taxes if you show that money. That hurts economies.
The conclusion is a flawed logic. Its like saying you saw people in the gym cheating the execution and never gaining muscle, THUS the conclusion is that if you want big muscles you should never go to the gym.
Progressive taxing of course produces equality BUT of course you have to stop the rich making exceptions for them. duh..
@@night6724 ah yes the old " rich will move to another country argument".
then make the tax universal,or dont allow them to move their capital.
I heard Thomas Sowell explain it this way:"You can either have high tax rates, or high PARTICIPATION, but not both". Having a nominal tax rate that both rich and poor can readily afford to pay, nets you more actual MONEY in the end, which you would think would be the whole point. Using taxes to "send a message" to the rich, or as a political bludgeon, always ends up netting LESS money.
I don’t believe the rich are willing to leave any money on the table, if they can lobby their way out of a 10% tax they would. Honestly I believe anyone would try to pay as close to zero as possible, it’s an extension of our preservation instinct. A nominal tax rate is still a problem that the rich would try to eliminate
@waV.daV if you track the actual REVENUE taken in, before and after punitive tax policies are enacted, you see that what Dr. Sowell is talking about is true. These policies end up hurting the poor and Middle class, as the rich elect to simply not participate, and take their money elsewhere. It's not just simple greed, as the richest 1% in actuality, pay more than 40% of all taxes, which THEY could argue is unfair.
@@Popdaddy88 That's pretty much how Laffer's curve works... Example of that; Argentina has one of the highest tax burdens in the whole world... Each time the government increases a tax the revenue keeps dipping down
Why? Because people just try to avoid it like it is a plague (From the top all the way down to the common folk). Another example from Argentina; the equivalent of a mayor decided to cut down like +20 taxes (Which didn't even make like 5% of the revenue) and the overall revenue increased beyond of what has been before the cut
@Matty wow! And further proof that these policies are just a political dodge that politicians use to get votes, playing earning classes of people against each other.
EXACTLY!! this was born out under Harding's administration, and Reagan's, I believe
Also when people talk about the 50s being a great time of prosperity, one should consider the fact that the US was the only industrialized nation that was untouched in WWII; while everyone else was rebuilding their infrastructure from scratch as it had all been bombed to shit.
And funnily enough.... we were the ones making it possible. Imagine if after Japan surrendered and Operation Magic Carpet concluded, we'd gone "Alright chaps, we're done." and then packed up and left. Cue the Soviet Union rolling through Europe like a wrecking ball...
The Marshall Plan demonstrates how the American taxpayer is the single most influential force on the planet. Europe couldn’t have recovered in the manner it did without it, and the worldwide prosperity of free trade for all participating nations is secured and funded by the taxes of the American people.
But in turn America profited from the growth of the other countries otherwise America wouldn't have trading partners and their economy would have tanked. Instead Marshall plan was a smart investment move to create trading partners that will own you for life.
They definitely didn't do it for charity
@@Evanderj Well Europe is the largest importer of US goods at the time so it made sense economically that the US would want Europe to recover as fast as possible to buy US goods as soon as possible, not to mention the geopolitical power the US would gain for rebuilding the world's former center of power and the fact that they won't have to deal with loosing more merchant ships.
So was it or was it not a bad time for the US? Or does that fact depend on whether it supports your political religion?
People forget in the 1950s most of the world was still recovering from World War II. A lot of the prosperity that did happen was because the USA had little economic competition. That's not the case these days.
cmiller8492 we sold goods to Europe to rebuild.
The US can compete quite well enough these days, if, the "Free shipping" subsidy that makes everyone think China is some miracle country (including China) is removed.
cmiller8492 there were loans involved. Of course it was nothing like the Weimar Republic as they couldn’t pay it causing them to increase the money supply causing hyperinflation. Also China and Japan were not who they are today. Back then not many countries had the infrastructure.
cmiller8492 it’s not like they had zero money. They make money exporting goods as well. It wasn’t destroyed everywhere
cmiller8492 we didn’t recover until after the war and even in the 50s we had recessions. Part of what prosperity we had, had to do with lack of foreign markets and development.
So the issue isn't really the taxes, it's all the exceptions and loopholes that let the avoid paying tax
Bingo. But since poor people don't have their s%$t together, they don't get to lobby congress like rich people do.
@@Redditor6079 even if they did as human nature has shown the majority of people or a good portion are less than morally ideal or steadfast so it is unlikely anything good would come from it for Congress cares more about money than morality and even if they didn't the poor would just replace the rich and change replace the cycle, Not only would society and culture at large be changed but also economic and political corruption would have to be stamped out for anything resembling a stable free society to be established however it is incredible unlikely due to the multitudes of forces pushing against that.
Which you need with a high a tax rate, If you want to encourage growth.
Loopholes in the tax system aren't really loopholes they features placed into the system to ensure that the economy remains competitive. No modern economy can function without investment, particularly without foreign investment. If you tax the shit out of everyone no one has a reason to invest in your economy over others.
The US has such a large economy because the tax system incentive's investment from all over the world. The higher you want the offical tax rate, the more exemptions you need to remain competitive.
This is the problem with people who view taxes from a parasitic perspective, you don't consider where money is entering the system from.
Then the solution is to remove all exemptions. All loopholes. I don't care HOW you made the money or increased your net worth, you owe x^y. Oh, you don't have that much in liquid assets? Then start selling stocks or physical items until you can pay what you owe.
And having an exponential function be the entirety of tax code makes it so that poor people aren't losing everything they own, and middle class people aren't paying much more than poor people, but wealthy people are forced to keep the economy moving.
@@jaedenbailey6082 that's cute and all but you do that and all the wealthy people will jump ship and your businesses, housing will dry up making the economy worse than it is especially for middle class people. Reality is nothing is stopping the wealthy from leaving America and going to other countries with more lenient tax code.
I want a party that talks about reducing spending. I never hear that enough. It is disgusting. We can't just keep dumping our money into things that don't work
They’re going to find out the hard way when they have to bring a basket full of money just to buy a loaf of bread just like in the Weimar Republic of the 1920s Germany.
@@Big_Gbola for someone named hardtruth you spread too much misinformation
Things that don't work are generally every social program put into law by the Congress.
@@Big_Gbola Where to begin? You say libertarians but what you actually describe is liberal capitalists. Ignoring that , you think that freedom and liberty is only for the rich when in fact no right wing libertarian ever says this. Freedom and liberty result is people getting rich , they do not guarantee their continued success unless they provide value to society. Then you talk about free markets and bring up Chile but made no argument so i guess you ll remember it later. Then you talk about the IMF which every single liberal capitalist libertarian hates so again you either troll or spread misinformation. I can not in good faith believe you actually think libertarians support the IMF. Will also need source for that 1% owning 80% of wealth , which isn't even a problem if the people are happy with the services. Finally you bring up Africa which had socialist dictators and revolutions after many countries gained independence and you believe that liberty will result in socialist governments? Or you mean to say those diehard marxists were libertarians and liberal capitalists? All in all , your comment is not only irrelevant but filled with misinformation.
@@acrane3496 A middle ground solution would be to have the taxpayer pay taxes for public services but at least make them function as intended. Like , working Americans fund public education only for teachers to promote communist propaganda. Anyone with half a brain would immediately want to stop paying taxes for public education if he learnt what actually is taught in classrooms.
2.5% Economic growth and "only" 8% unemployment probably seemed like the "good times" after what people lived through in the 1930's and WWII.
What about now?
Thomas Sowell once argued that the employment numbers we're hugely inflated by the military expansion in personnel.
Well that just shows how much perspective can change things.
@@diegotobaski9801 Can't be worse than the bureaucracy over here in Germany.
We literally spend more than a trillion for social security programs.Which amounts to about 12,000 Euros per year per citizen. And most people don't have that kind of money available, proving that most of it goes to crooks.
During WWII unemployment rate was 3% in USA.
The correct title should be "Why The Rich Don't Care About High Taxes"
Or better: How the rich manages to avoid theft by the mafia called government.
“.... and also the middle class”
Everyone avoids taxes. Mostly the middle class underreported wages, including waiters, sole proprietors of a small business which include lawyers, doctors, etc.
The rich actually pay their taxes but they know the loopholes (currently) previously they made those loopholes excessively.
www.nolo.com/legal-encyclopedia/negligence-versus-tax-fraud-irs-difference-29962.html
It's not just about avoiding, your forgetting that the special treatment set up by loopholes exclusive for them disincentivizes competition or at least provides an additional extra barrier.
They like high taxes because it hurts their smaller businesses, regulations are higher hurdles put up behind them and a higher jump is required
Silent_Stalker That’s becoming more obvious now. Local governments are going after all the small businesses because the large businesses are saying it’s not fair that we have to do it and they don’t. In my area all these people trying to rent out their garage apartment or what not for extra income are getting hit with massive back taxes and business license penalties because the hotel lobby groups. Food trucks Are being hunted by the chain restaurant lobbies. It’s pretty wild to watch when the local government posts the signs that say “buy local”.
Large corporations love high taxes too because it hurts their next lowest competition. Corporate taxes are just another way for the executives to justify tax cuts on their own personal taxes and raising their salary's.
.
No one should like corporate taxes because all it accomplishes is making everything you buy more expensive.
The issue hasn’t been the tax rate for a long time. Inequality has little to do with income but more to do with wealth preservation and transfer. The tax rate isn’t the issue. Think about Jeff bezos, his worth is built upon land, and equity, which he can borrow against and defer the taxes on the gains. That’s what all the rich are doing.
Maybe we should stop taxing the rich and instead stop spending uncontrollably.
@@charlesatanasio1622 And that helps poverty how...
@@SoldierGeneral64 you don't help poverty you enable the impoverished to help themselves. You can't tax yourself into prosperity
@@williambenton9959 Sure but you can tax in order to have enough funding to support initiatives or programs that can be used against poverty.
@@SoldierGeneral64 not true you don't make poverty disappear, you just make poverty more comfortable. That isn't a bad thing, but you lose your footing bitching about inequality when most people below the poverty line in America live better than middle class people in the 1970's-80's
As the current meme says; when's the last time you saw an ad for a microwave?
You demonstrated that the rich DON'T like high taxes. They find them annoying enough that they go to great lengths to avoid them.
Fred Bretz huh? The rich do like high taxes because it keeps them rich by preventing others without loopholes from getting rich.
The video is saying high taxation helps already rich people to continue to consolidate their wealth and reduce the competition from other people who may eventually become their competitors. If you can exempt yourself from excessive taxation because you're already rich and can afford the lawyers and lobbying, but your smaller competitors can't afford the same thing, their chances of becoming future competitors are crippled leaving the richest to continue the cycle of receiving tax exemptions and government privileges, while others can't even get off the ground. Why compete with others, when you can stifle their success before it even begins?
@Kaizer VillainYeah I understand that, but I was pointing out that, high taxes they dislike > they're able to avoid but others can't > a new reason they like high taxes, which is the point of the video which OP apparently didn't get.
Yes they don't like paying tons of money, so they avoid it. And if they can avoid it and other can't, this gives them the one up on everyone, including their competitors. Thus they like high taxes in that context. We can pretend that we'll one day have an uncorrupt tax system, but that's a complete pipe dream.
@Kaizer Villain The wealthy often have power in government. The tax scheme is good for them because it has essentially broken the ladder that people use to climb to wealth. Now you need to cheat, struggle or find a loophole to become wealthy.
Kaizer Villain
of course they don’t like paying high taxes, what he is saying is they like high taxes exactly because they don’t pay them.
The name of the video isn’t “why rich like paying higher taxes” it’s just “why the rich like high taxes”
My favorite example of these tax exemptions done at the time was by Howard Hughes (at the time, one of the richest people in the world), who transferred his entire company to his medical charity (since non-profits were and still are except from income tax).
Surely proof is required that it is non profit, because if not that is just sad
@@leonardonetagamer If you've got that sort of money, chances are you can justify just about any expenditure as non-profit. If you can't, you just lobby for it to be made legible.
@@leonardonetagamer Easy to make a profit company into a legit non-p. The company can simply increase spending dramatically until profit zeroes. Bump salaries, begin nepotism hiring, buy real estate is favorite, see Apple’s enormous space ship HQ, but jets, make extravagant charitable donations which are actually influence and power buys.
Having a profitable company owned by a charity doesn't make personal income money somehow non taxable....
@@drebk True, personal income of employees or owners of legit non profits is taxable too. History shows higher personal income tax rates though create irresistible pressures to throw narrow exemptions into the tax code, for a very few or even one, as cited in the video.
Starting in 1950, male participation in employment began to decline from it's peak of about 88% in October of 1949, coinciding quite closely with the simultaneous increase of female participation in employment, effectively leading to doubling the workforce ( labor) while wages remain flat since about 1960. I often wonder why so few economists speak about such a massive change to labor in the United States over a relatively short time. In other words, women entered the workforce en masse, so that by the mid-1970's the labor pool had doubled as a direct result of "equality", but we never really talk about it as any cause for flat wages, labor being outsourced, productivity declining, worker safety/satisfaction declining etc.
you just described how rich people work around high taxes, not how they actually benefit from having them
"Show me an honest politician and I'll show you a broke S.O.B"
---- President Lyndon B. Johnson
.....................
Nice quote... However, I can't find any reference or connection of it to LBJ.
Probably why Bernie Sanders has always been one of the least wealthy Senators.
@@Anothernerdyloser314 Least wealthy = 3 houses....
@@Anothernerdyloser314 hahahaha
LBJ was an actual raging racist.
I always laugh when ever I hear rich people like Warren Buffet complain about how they aren't taxed enough. Like, the government is more than willing to accept donations
Buffet wonders why his secretary pays a higher tax rate than he does. Does it never occur to anyone to LOWER the secretary’s tax rate?
@@goatface6602 Or just reduce exemptions and see who complains. Give it one year. See what happens. Guarantee spending and taxation would change REAL fast.
Then again, no one would vote for that, because gotta hold the status quo.
*accept
Why would you even donate to the government
They will waste your money
The government is so incredibly inefficient
Okay but donating would be stupid, it would only reduce the urgency of the issue and thus incentivise kicking the can down the road, whilst impoverishing oneself.
This is not actually a problem with taxes, but with politics in general. Levers are pulled left and right by people who take advantage of power and obscurity, and that is inherent to all humans. We should let taxes be taxes and instead figure out ways to make sure people don't cheat the system in general.
imagine thinking that billionaires are looking out for u lol
If they cant get around the high tax they'll simply leave the country.
So u dont trust the entity ur giving money too. But believe one day there will be people that will do the right thing with ur money
@Mike kasich imagine thinking the people who will use you to "overthrow" them will act any differently. We're all in one big "animal farm" and some animals will make themselves more equal than others.
Why not a flat 10-20% for everyone that isnt at the very bottom of the income ladder? Aka anyone who actually has legitimate income.
Of course, the "Tax the Rich" crowd will simply come back saying something like "we just need to get better politicians who aren't corrupt"
and then continue to vote for the same corrupt politicians who shove promises of free stuff at them during the campaign.
I have never understood why democrats vote to give the government more power. The government is not made up of gods, it's made up of humans, and they are subject to weakness, prejudice, idiocy, and making mistakes just like the rest of us.
Obviously we need a government, but why should they be trusted with more power than they need? Why do so many people assume that the government is smart and trustworthy enough to do everything for us?
@@warrioroflight6872 it might SEEM obvious that we need a government, because we've always HAD a government. There are other ways.
imagine thinking that billionaires are looking out for u lol
@@JoeBizzle ikr nobody needs government AKA the most powerful gang in the country. taxation is extortion
Whatever you tax you decrease, whatever you subsidize you increase.
pkrangehit Not necessarily. Look at all the businesses that grow while taxes are paid.
Tax being poor.
@@michaelg7904 Yeah but imagine subsidizing those businesses lmao
@@ThatGuyDownInThe That's what happens when we buy/use their services. All the way down to the Ma 'n' Pa shops. :)
@@michaelg7904 yeah?
The reason why parts of the U.S. economy did well in the early 1950s was do to the fact that Industries/Factories, Power Plants, Railoads and Roads had been destroyed during WW2. America's Steel plants, Machinery and Tool factories were running 24/7 to help supply the rebuilding during the Marsha plan... as European and Japanese factories recovered...the purchasing of U.S. goods slowed... and American labor hours and jobs were cut leading to a serues if shortterm recessions during the 1950s....
100% correct!!!
@Lanz Friszt Damn, what an ignorant comment.
Love how this video doesn't actually talk about how high taxes benefit the rich, rather it just talks about how there were loopholes in the 1950s tax code.
So in other words: the rich weren't being taxed. This has nothing to do with the concept of implementing taxes on the highest earners.
Oy vey, muh rich.
The video doesn't touch upon the most critical aspect of it all, that being *why* the tax exemptions existed and were so plentiful. If rich people are to be taxed, they'd rather *pay* that money to lobbyists, politicians, and use bribery beyond compare to CREATE lower taxes for themselves, of which none of that money will be efficiently used to produce goods, nor will it go into the government coffers to (hopefully) be utilized effectively. It would all change hands amongst the elites, who would then spend it on personal items after laundering it, and not spend it on developing an industry (because why would they be productive when they get all their money without producing anything...).
The wealthy *should* be taxed like all citizens should, but we do not want to create a taxation system that is essentially stating "would you like to spend billions upon billions in taxation, or would yhou like to spend many hundreds of millions bribing politicians and becoming a superstar in the elite?". Certain taxes especially need to be considered for this, like capital gains taxes, so that a low enough rate allows for normal market operation. High capital gains taxes, for example, mean the rich people just never sell their property so they don't get taxed. They do not care enough to lobby for it to be lowered as they can get by without it.
high taxation is not so simple as a lot of people believe, even if we could just use a magic wand to somehow overcome human imperfection and corruption.
I’m taxed for earning a living and I’m taxed again for buying what I need to live. The standard deduction doesn’t even begin to cover it.
quick answer: the rich don't pay taxes
that guy who owns Facebook is a big example, he paid nothing a few years ago and probably still not paying a dime.
Luis Barros scince the rich won't pay the taxes they voted for the middle class will become more poor. Honestly though Mark Zuckerberg is a hack. I agree that there is no way he is paying his taxes. He probably has lobbyists to give him tax exemptions from the Dems high taxes, in return he kicks conservatives off his platform. A favor for a favor.
A simple answer, we do not tax wealth, only income.
Only the middle, (working), class pays "income" tax.
If you are a Billionaire you pay zero, money isn't taxed, if the Billionaire has an investment that goes up in value, he STILL doesn't pay income tax, he pays 15% capital gains. Compare to a Doctor making $200k a year that can pay up to 50% in payroll taxes between SS, Federal, and State taxes.
Meanwhile the rich with wealthy politicians pontificate that "no one needs more than $200k income", while sitting on more cash than they could spend in a thousand years.
And the press, and the public constantly conflate income with wealth.
@@Charlie-qi1xn while the rich may not pay all the taxes in accordance with the law. They still pay for more than half of all taxes in America
and he supports high taxes
Let's be honest, if we were rich back then we would have done the exact same thing. 91% tax rate!!! Rediculous!
A better title for this video would have been, "How Tax Loopholes Have Always Benefited the Rich and Have Led to Staggering Wealth Inequality That Will Soon Result in The Collapse of The United States"
That's just thet tax rate for highest tax bracket. For the money earned up to that point, the tax rate would be lower.
You would pay different amounts for different parts of your income. For example, even if you make 300k a year, you would still just pay 20% on the first, say, 35k, like anyone else. 25% on the amount between 35k and 45k, 30% on the amount between 45k and 55k...And so on and so forth. Its a debatable, but viable system of taxation.
Fr. I can’t blame them.
Let's be honest, we'll never be that rich.
Thomas Sowell put it best.
The whole “Tax the rich” idea assumes that rich people are an inanimate resource that will take no actions to insulate their wealth from being seized from them.
There comes a point where raising taxes lowers net tax income when the wealthy simply pick up and leave.
Edit: For the simpletons two words Cooperate tax. Is the corporate tax in a country too high incorporate elsewhere thousands of companies do business in countries while incorporated elsewhere Do you think McDonalds is incorporated in Beijing China New Delhi India?
Hell New York State recently had a mass exodus of wealthy residents because the local taxes got high enough that it wasn't worth staying.
Hell even if you don't leave spending hundreds of thousands if not millions on Tax Lawyers to find tax dodges is a lot more appealing as an option when you stand to lose hundreds of millions in taxes compared to a few hundred thousands
Where will they go? Pretty much every first world country has higher taxes.
@@tenkenroo When you're very rich you don't need to live in a first world country. In fact, it may be better not to. Can use your money to fund the sort of corruption that they can't dream of getting away with in a 1st world country. As least not as easily or openly.
@@tenkenroo Look up Puerto Rico, it’s a US territory and a tax haven to the rich.
@The Wolf bold of you to assume there are 0 countries that will not bend over backwards for Jeff Bezos or Bill Gates to make their life paradise just so they can have a piece of their pie regardless of being a first world country or not
Cool. Alongside the law that taxes the rich is another that says if you pick up to leave, you also leave behind access to American customers and American infrastructure to your business.
Oh you want to come back?
We really should stop pretending as though this problem isn't solvable.
It's a wealthy talking point to do so.
This isn't an argument in favor of lowering the taxes on the rich. It's an argument in favor of abolishing tax breaks.
Which is what needs to happen. And a Flat Tax should be standard rather than the way the government is doing it right now
flat tax? NO, flat tax benefits the rich, they wont pay it any way
In this system tax breaks aren't a thing. And lower taxes on the rich means they will have more money and they'll be able to open new locations, creating more jobs
Problem is the higher the taxes the more profitable it is to lobby for tax breaks exemptions and ways out of paying those taxes. High taxes also have necessary exemptions because look at small business owners it will look like they make six figures. But reality is many making 30-50k while spending tons on company cars 5-6 tanks of gas renting larger home to operate business out of it and don't actually ever have that money to live off of.
Thus you create business expenses exemptions otherwise they would make zero and either prices would have to raise drastically or that business would just be gone from economy. As tax code becomes more complicated and it remains profitable to lobby. It is also becomes easier to hide tax loopholes in thousands of pages of documents.
Simple answer flat tax remove ALL loopholes. Poor rich it doesn't matter as a person makes more they are still taxed exponentially higher. Aka you make a million dollars at a 10% rate and someone makes 10k at same 10% millionaire pays 100 times more anyways. By keeping it simple and not having "exceptions" to the rule aka you earn more/less you pay more/less. Everyone pays the same no matter what. Easier to enforce and when a politician goes to add a page to the 1 page tax code its pretty easy to spot and call them out.
Lastly reason why a flat tax would work is we are limited it would give us a more fixed budget. Fact is you can only milk economy for so much money before you cause retraction. There is a ceiling to how much tax revenue you can receive aka raise taxes past a certain point economy shrinks forcing revenue to stay same. We could predict maximize and say this is what you got force people to make cuts instead of trying promise tax increases that will never actually pay for their new program.
MrSporeowns Trickle up economics doesn't work.
I just love how in the comment sections every lefty strawmans this video as "MUH YOU'RE ADVOCATING LOWER TAXES FOR THE RICH AND HIGHER TAXES FOR THE POOR" when the main point is LOWER TAXES FOR EVERYONE.
That's what I read! Distortion or revision of History too! "when Americans weren't investing that income...wisely" or the way Gov. wanted. The so-called loopholes were select and corruptly against Producers who didn't represent Big Unions! Consumers are screwed in the end. No Middle Class. Just Rich & Poor, so Left can Keep power by DIVIDING Americans in Every Way!
If we have a 10 or 15% rate for everyone with no loopholes at all and no exemptions including corporations then would be fair to the rich and to the poor and just end the death tax, that's another way to the middle class to lose 50% to the government after they are gone went the rich find ways to transfer everything to their kids/family.
Most of the idiots posting don't even pay any taxes. They just want more free shit.
@@slanwar If you are a billionaire the easiest method is a "charitable foundation", the foundation owns everything, and is tax free. The children still live in the mansions, (as caretakers of course). Fly the private jets, the yachts, etc. They also get a salary several million a year, and make all the financial decisions, and no pressure to even make a profit, all tax free, and perfectly legal.
And only available to the very wealthy.
And we forge are own chains by asking for more taxes.
@@slanwar How do you recon that theft is ever "fair" ???
So it seems like what we actually need isn't higher taxes, but rather a reform to tax codes in order to take away or close up many or all of the loopholes, exemptions and general 'tricks' that can be used to circumvent paying taxes, which are used disproportionately by the rich.
In essence we should.... tax the rich.
The only issue is that they'll take their business to a different country if the tax rates become too high.
@@Swagbastian not only that, it also deters business creation which leads to lesser employments. Ye let’s tax the rich and overtime our wages will either go down or remain the same despite inflation, people really shouldn’t talk about “tax the rich” when they barely understand basic macro and microeconomics.
@@ryanspinoza6586 That's already happening so you might as well tax the rich, considering that the 1% are richer than the bottom 50%, I'm pretty sure they can afford it. If you understand basic macroeconomics you understand that trickle down economics doesn't work, it never did and it never will.
@@davidg8628 No one suggested to stop taxing the rich nor cutting it down, in fact most rich people do pay more taxes than the average person including you. But usually, when people say "tax the rich" they don't even have clue how much they should be taxed and I bet they want it to be unreasonably high because "they can afford it" lol. The point was, higher taxes doesn't automatically translate to more money, it may be in the short term but most certainly not in the long run.
@@ryanspinoza6586 Good and they should pay much more, many pay an effective tax rate lower than those from middle class, that's not acceptable. Warren buffet once said that he pays a lower effective tax rate than his secretary, if you think that's fair I don't know what else to say. Higher taxes translates to more money if you make the slightest effort to close all the loopholes that exist.
So what you are saying is, high taxes for the rich without exceptions are important. I can aggree with that.
Good luck on the "without exceptions" part.
So without exceptions it's ok to tax 91% of the wealth of someone?
That's literally a tyranny
Plus if you tax 91% it would also help the rich actually
It would create an anti competitive environment
Plus the super rich either would anyway create a loophole to run away from tax only leaving the struggling new comers in trouble
@@youtubeisabitch5758 there should not be someone owning billions of dollars (in some form) and having this much power over the people (unelectet/undemocratic!) after all.
True or False?
The most regressive tax is the debt monetization tax (inflation tax), it taxes the money spent and saved.
True
Yep. Inflation is a tax on savings.
Property tax rivals that.
False, because it's proportional to the amount of money you own. If you have a monetary debt, for instance, assuming nominal interest rates stay the same, inflation reduces the debt burden.
Poll taxes and sales/value-added taxes are more regressive.
@@alphamikeomega5728 Wrong. Also you forgot about payroll taxes.
You forgot the most important thing about increasing tax rates, the rich love them because they've built their business when taxation was low so increasing taxation at the present will prevent new business from emerging and competing with them. Then hey can just increase prices and their costumers will pay them because they have no alternatives.
Not just taxes but regulations too. Regulatory capture is a thing
@@juliantheapostate8295 Sure, but the damage of regulations on small businesses is easy to explain. It's much harder to explain why high taxation on big businesses is good for big businesses. They fail to understand that it is all about that huge initial investment and that smaller investment returns makes it impossible for emerging businesses to compete with already established ones. Also, no matter their numbers, smaller businesses can't compete with a giant one because only mega-giant-factories can produce cars, planes, cellphones and computers.
one other thing with high taxes is that it kills competition. Amazon can afford to pay a 50% tax on its profits, the corner store does not. so the corner store goes out of business and the only provider of any goods left is Amazon. besides that, is the fact that even if Amazon of any such corporation were to pay a billion in taxes, its not like you or me, the average person, will get any benefit from it. the politicians with pocket the money and we will be left with the illusion that things are better. the laws needed to reduce inequality have nothing to do with taxes or the economy in general. the laws that reduce inequality are labor laws that protect the average worker against abuse from bosses. if those at the top can't treat workers like slaves, the lives of people improve overall.
This is about income tax though. Not about corporate taxes.
The laws that you are talking about are what hurts small to medium businesses. While I completely agree that employee rights abuses have historically been horrendous, it is nit the way to reduce inequality. This is how you get oligopolies, since economies of scale (and trust in larger companies) will ensure that big companies will be able to provide everything for their employees, but the average mom and pop shop won’t be able to.
As he said in the video: the problem is not that the taxes are high, it’s that rich people have the ability to influence the law in any way they desire. So a good anti-corruption or anti-oligopoly legislation would solve our problems. But we all know this won’t happen unless something very drastic happens.
If taxing the rich wasn't possible, they wouldn't try so hard to discourage us from doing it.
Yeah they’ll just hop in their private jets and set up shop somewhere more amenable.
@@kevinaustin51 Let them it will at least rid the country of corrupting Misers and allow for the local economy to flourish of course the main downside is the large lost corporate jobs thus causing economic downturn however that downturn could be brief or not depending on action thus still making this option viable.
@@kevinaustin51 See people keep saying this, but where? Where would these businessmen go that is more friendly to them then the united states? Certainly not china. Its one thing to outsource labor but another entirely to move your legal HQ. The EU maybe? Nah. Mexico? Perhaps, but it lacks the stability the US has, with higher levels of corruption and the threat of cartels. So where?
@@sirsteam6455 I love the ‘just let them leave’ mentality. The proportion of taxes paid by the top 1% is huge (I think around 20% of all tax take)
What would be your proposal for backfilling this? Inevitably it’s the poor and middle class that end up having to pick up the tab.
@@unclegoon347 I'm no economist so of course I am ignorant to all the fine details in this subject ,however I think anyone can agree that a properly organized and maintained system is bound to work better then ours, which is corrupted and filled with holes meant to make the powerful more so while depriving the common person the ability to properly secure themselves financially.
If I had to make a proposal it would be rather simple being to reform the tax system to rid it of this corruption and flaw ,then depending on the status of the rich invest into local economies and other infrastructure that is often neglected to boost production and economic ability of local economies to make them less dependent on the rich and more independent.
Again I'm not an economist but even so I think this plan would work if properly planned and executed seeing how broad it is which allows for maneuverability if needed.
While almost every sane person will acknowledge the need for some kind of taxation to pay for basic government “services,” I’ve never understood the Democrat’s talking points that express religious affection for the state and its ability to seize property and wealth.
Maybe a necessary evil but hardly grand, moral, or praiseworthy.
Yes. Theft and coercion is enobled by political art.
Guy Flower - No. Absolutely not but, when I talk to people, at this point in history there is no question in my mind that the left favors more regulation and greater centralization and micro-management of citizens’ lives. The conservatives and libertarians primarily want to be left alone. Micro-analysis can come up with all sorts of exceptions on both sides but a collectivist worldview always defaults to an adoration of government. A belief in the founding principles of self-government...not so much.
Kaizer Villain - There are indeed factions within conservatism who have a strong religious twist to their position as there are also factions among “progressives” who are, for all intents and purposes, communist. Issues like abortion or gay marriage are niche issues that rile a lot of people’s passions - I’m not one of them. One can accuse either side of the political spectrum of claiming a “moral high ground” and it’s reasonable to be very annoyed at those who insist that disagreement is a hallmark of evil. It’s become pretty ridiculous when anyone favoring smaller government is automatically accused of being “racist” or a “Nazi” for wanting current immigration law enforced.
A citizen wishing to be left alone has nothing to do with wanting to commit “criminal acts.” Claiming that’s what I “meant” is just ridiculous. For decades, most sane people had a reasonable idea as to what the freedoms in the bill of rights meant. It wasn’t to “yell fire in a crowded theater” but to live unmolested by an overbearing state.
My views are not “questionable.” They’re clearly stated and represent a significant portion of the political spectrum.
The founding principles of self-government are grounded in enlightenment thought and represent a reasonable understanding of how governments have functioned through the ages. Wanting bread and circuses and “free college” etc. offers a good quick fix for those who have faith in centralized authority. Some of us are more skeptical.
If you want to live in a commune with compulsory membership, have at it.
Kaizer Villain - Well...there ya have it. 😀
@Kaizer Villain "So much so that this is how they tend to function even in other countries." Conservatism does not mean the same thing in America that it does in other countries. Europe in particular is largely a matter of what the government will do with its power over the citizenry, rather than a debate about whether they should have that power in the first place. Don't conflate disparate ideologies.
As for abortion, to frame it as something women do with their own bodies is to refuse to even allow the conservatives a chance to make their case. For conservatives, abortion is an issue of _killing an innocent person,_ nothing less and nothing more.
There are a few candidate issues you could cite, but ultimately, you can't require that someone be an anarchist to say they don't love government. The conservatives and libertarians primarily disagree on the exact purview of government for *particular issues,* while the left instead continues to insist everything be brought under the purview of the federal government. Even in the issues they purport to support "freedom," what they really want is for the government to force everyone to adhere to their world view and act according to it (e.g., they won't even leave a florist or baker who doesn't want to participate in a gay wedding alone, and they want to force religious organizations to pay into organizations that perform or support what they consider actual murder). There is no issue in which the left does not want government involvement.
So was the problem the high tax rate or the corrupt political system that allowed the croney exceptions?
Both, as they feed into themselves in a cycle they only benefit the rich and the politicians
The main problem with high tax rate is rich people just move their money to some other country.
High tax rates don't feed cronyism, allowing political contributions without limits feeds cronyism. Eliminate corporate and unions donations and then set a small limit on personal donations and have politicians funded by taxpayers so that all the cronyism policies go to benefit the taxpayers. It'll cost more up front but it'll cost less over time as the government works for the right people and starts making decisions that benefit those people instead of those with all the money.
If the video tried to show that High Tax Rate leads to croneism then it does a poor job at that. That may very well be the case. But what he is doing is just a case study of US economy at a specific time in US history. Not comparing if this has actually changed. Or if this is a trend you see in other nations.
Instead we are present with the narrative that rich people like taxes when the judging by the way they try to evade taxes, this is not the case. (Bet it though legal means or not.)
I would like to see some figure that we could compare rather then empty platitudes.
High tax rate does three big things first is makes it profitable to lobby aka if your tax a million dollars at 90% that is up to 900,000 they can spend lobbying before it no longer is profitable. Second is when its high like that some places can't operate I know several small business owners who "look rich" with hundreds of thousands. But after they buy company vehicle throw 5-6 tanks a gas in a week running around for company wear tear. Buying equipment office space ect. End result is actually 30-50k a year. If they were getting taxed at 90% there is no way they can operate thus business exemptions.
However the third and final and biggest nail in coffin is with all these "exceptions" it is extremely easy to hide a single exemption into thousands of pages of tax code. Thus transitioning from legitimate exemptions into crony exemptions and restarting the cycle.
The single biggest problem with tax code is the EXCEPTION TO THE RULE. Every single time it doesn't matter what it is will eventually break the rule.
I agree with the people saying that this is more about rich people liking the loopholes. I also agree that these loopholes should be closed. But I also think it’s highly tyrannical to tax people so high. Especially going as high as 91%.
If they fix loopholes , we wouldn't need more than 20%
@@Youneverknow100 Exactly
well when the us taxed the rich at 91% in the 50s it was sections of their money being taxed at that percentage so when you combined all the taxed money it would be a lower % like 20 for an direct tax
@@digimon99891 Except that’s still an overreach of power
Here's a crazy idea: close the loopholes that allow the rich to dodge taxes
If only it were that simple
When you speak metaphorically everything is easy
There are no "loopholes" there are tax exemptions which were implemented to encourage investment.
You close you're so called "loopholes" and you will see less and less investment over time. Why do you think OECD nations spend billions trying to convince other nations to raise their tax levels?
Because ROI is all that matters, if investors can get a better deal in another economy that's where they will go.
Here in New Hampshire there is no sales tax except on “restaurant food” and lodging. There is no income tax except on dividends. We call it “the rich tax”.
Calvin Coolidge must be taught to the young. He averted depression as Hoover and FDR spawned one.
Actually, FDR simply activated what had already been put in place by everyone from Harrison all the way to Hoover. Coolidge was a brief break from it, though I wish he's done more to get rid of it...
@@KingRandor82 Coolidge only continued what Harding began.
Ok. Now I want to know more. Harding and Coolidge did what? You have any links to look at?
Coolidge had some great ideas but...
With an expanding economy and expanding population the government will naturally become larger
@@Th3_Gael not naturally.. if the people vote libertarian
When faced with lower taxes will rich people subsequently stop hiding their taxable income? I know that's slightly out of the scope of this video but naturally this question is what follows
Probably
Regarding the oft-repeated figure of the top tax rate being 91% back in WWII days, I am not an expert on this topic but I do recall reading that with exceptions taken, and all legal loopholes, the actual top tax rate was something closer to today's top tax rate of around 40%. The more things change...
Shhh liberal is talking, don't throw around facts now.
@@christian2i wouldn’t this help a liberal viewpoint? Makes you think that if back then with 90 percent it was close to what we have now, just how low is the actual top tax rate? Issue isn’t how much the taxes are, but actually enforcing it
My father use to talk about the 95 percent tax rate and always wanted it to go back to it. I think he had no concept of what it actually does to people. My father tested as a genius in the 1940’s. He was a school teacher, but he always kept us poor and I never really understood it. He hated money. He helped invent a cherry picker and was offered a percentage of sales and he refused. He ALWAYS did things like that. He always looked after his students an screwed over his family. To this day I don’t get it.
@@icestationzebra8636 Sounds like a smart man to me... sorry that he neglected you but you can't have it all.
@@icestationzebra8636
Virtue signaling, sort-of, perhaps? It's human nature to always do what makes you feel good...what makes you happy. Even if it's somewhat nuts.
Also, stealing money from Jeff Bezos and putting it under the control of politicians isn't going to improve my life. Nobody can explain how that is going to make my life better.
The money doesn't belong to Bezos but to the Amazon corporation. Which invests it in jobs, newer products etc.
taxing bezos's personal income vs the company are different animals
@@gareginasatryan6761 Until Bezos writes everything of as business expense and gets payed in benefits. I have no problem with Bezos getting rich after running such a successful company but lets not pretend that personal income tax is hitting him the same way it effects others.
A Similar phenomenon is the money the government does receive from taxpayer's doesn't end up being put to productive use as well. I am curious to examine how efficiently the Swedish government uses resources and collected monies versus the U.S. government. I am seriously interested. Excellent video by the way!!!
well both are terrible at it i guarantee it
America: spends the most the biggest and most technological advanced military in the world.
Swedenistan: pay to house thousands of uneducated migrants for cheap labour for their corporations.
When you are spending someone else’s money you don’t treat it with the same respect that you spend your own hard earned money.
TH-cam recommended this video after 4 years.
“In the 1950s there was 4 recessions” proceeds to list two recessions that began outside the 50s
Well, speaking about the 60's. Everyone was living well, and the economy was on fire. Additionally, integration was happening, and literally everyone was doing better. A man with a job could buy a new car and a new house in the same year. 1964 laws were changed to help those with little, and I was one, as a child in the system, and I was 3 percent black. Some of my poorer relatives threw out the baby daddies, to get more government help. Overall, government help, appears to have made things worse.
Even the Playing Field. Otherwise it's a Rigged Game. No Corporate Welfare. Pay to Play like everyone else.
Thank you Captain Obvious. It's the obvious point that most seem to be missing. This is why we need Captain Obvious!
No welfare for anyone. If you see someone who needs help, reach into your own pocket and help that person.
I’ve said this a long time and I’ll say it again. Make the tax code 1 single page, and the rate 1 single rate. You want people to be able to rise in status in their lifetimes? You make it way harder by every step of the way taxing more. People hated trump, but did you know he wanted a tax plan that was 1 page? Guess what he got for it? Laughed at by all MSM, Democrats, and a lot of republicans to boot. Hate him or like him, you can’t argue having a much more simplified tax code would have been a step in the right direction…. Unfortunately it seems making headway with the crooks in congress may never happen.
Right on. I've thought this way for a while too. The exceptions I might make is to have deductions for children, mortgage interest, and charitable donations. The rate would be the same for all people, but a person's taxable amount could be lowered if they participated in any or all of the three aforementioned categories. Higher taxes just seem to grow government even more without significantly improving poor or even middle class peoples' lives.
50% of wage earners pay no federal income taxes, not sure how your idea of them now paying taxes will help them rise up...taxing income is garbage, tax consumption so everyone pays.
@@danmiller2916 there's no deduction for children anymore, it's now a REFUNDABLE CREDIT, so these baby mamas with no income can file a tax return and get 3000 or 3600 per kid paid to them, more welfare from the left
Seeing as everyone knows they're all insider trading but no one can touch them says everything you need to know about what headway we can expect against those "crooks in congress".
Indeed, but you know America, we’re known for our ten thousand page long laws lol.
Can someone explain how this video was uploaded 4 year’s ago but the thumbnail has a photo of aoc taken last year?
Higher tax rates function as a barrier to entry, the rich like a barrier to entry because it protects their economic power, and as this video shows the rich lobby for exceptions. This is the same reason we have licencing for business, the businesses themselves lobby for licencing so that they have less competition.
1:52 2.5% average in a decade is significant. The average economic growth in the US in the last decade was only 1.5%. Also part of the economic problems in the 1950s where caused by a rapid decrease in defense spending from 1945 to 1948 (about 41% of the GDP to about 7%). This made many companies shift production from military products to civil products which produced an overproduction crisis in 1949. The government reacted by creating the enemy USSR (which never really was a threat to the US) so that they could intensify cold war and save the military-industrial complex by raised military spending to about 14% until 1952. But this high military spending was not sustainable, so it dropped to about 10% at the end of the decade (which is still very high compared to about 1.2% to 1.5% in the 1920s, 2.1% in 1940, which was the last year before the US entered WW2 and even compared to the 4.3% in 2017). So the main problems of the US economy in the 1950s where structural problems because of the shift from war economy to peace economy, a shift that was never completed (the defense spending never got back to under 1.5% like in the 1920s, it was always over 4% except for 1997-2003, the lowest was 3.45% in 1999, after that the military-industrial complex used the "war on terror" to raise it again). US defense spending: www.usgovernmentspending.com/spending_chart_1792_2017USp_18s2li011lcn_30f_Recent_Defense_Spending
2:00 inequality was never higher in US postwar history than today. Read some statistics. E.g. the graphs here: en.wikipedia.org/wiki/Income_inequality_metrics#Ratios
The only reason the Federal government was created in the first place was for defense.
That was awesome! I was bummed when the video ended!
Well you have to close the loopholes first so billionaires actually pay taxes.
Simplify the tax code and get rid of the loopholes!!!
Like mortgage interest deduction? Medical deduction? Child tax credit? OK sounds good to me.
Criminalize theft and get rid of the mafia called government.
@@calysagora3615 And allow the real mafia to dominate. Great idea!
@@cmdrnachoman5864 That's a common statetheist non-sequitur, and a false dicotomy.
Obviously the damage "the government" mafia is able to do, the extortion rates they are able to extract, the open violence they can commit under the guise of their deity "the government", is ENTIRELY due to the legitimacy of authority that the sheeple hallucinate it having.
No one imagines the honest mafia to have any legitimacy to steal, destroy, kidnap or kill. This is why no mafia protection extortion scheme over 10% works , as people will start resisting, while governments regularly extort 50% and above. Often WAY more.
You somehow imagine that a monopoly on violence prevents or diminishes other forms of organized crime. In reality, government murder and theft is several orders of magnitude greater than all private crime combined could ever hope accomplish, and creates the markets for organized crime of all sorts.
Please, look up democide and ask yourself if the means of statetheism justifies its ends.
Then educate yourself on ways to have order and safety without universalized coersion and perpetual extortion ("tax").
I can recommend Robert P Murphy - "The market for security" ot David D. Friedman - "Law without government", or watch any interview of Dale Brown of Vipers Threat Management in Detroit.
Then check out Cell411 and PeaceKeeperApp for handy tools.
"But wouldn't warlords take over?"
-no;
th-cam.com/video/6Ak3TwNXA0w/w-d-xo.html
One way to simplify the tax code would be to eliminate tax "refunds" in excess of the actual amount of the specific tax paid, regardless of deductions and credits.
So the moral of the story: close the loopholes and end exemptions.
And who is going to close those loopholes? Rich politicians who take advantage of their
nothing immoral of avoiding taxes, taxes are what is immoral
The government simply needs a complete reboot. Taxation is theft, but I bet things would change if you took out all the write offs.
Taxation is theft.
Up until you realize that taxes are the only reason we have roads, stop lights, signs, etc.
Without those, how the fuck would you drive to work and make money in the first place? Taxes are a necessity for any capitalist nation.
@@Meloncholiac it's quite literally theft though. I never signed a contract with the government saying they could take the money I earned. While, yeah, it's needed to a certain degree, that doesn't change the fact that I never signed up for this government subscription service and have not given consent for them to take my money. So, "taxation is theft" is technically correct. Just sayin
@@rawman44 you can leave to another country where you get a better deal. You've been enjoying the benefits of people paying taxes, only fair if you chip in.
@@matta6088 you seem to misunderstand my comment
90% tax rate is ridiculous, so that's why corporations should get away with not paying any taxes whatsoever.
Yes that is income tax. Corporations avoid tax buy just making income. If they make 1mil and just invest it back in compony it will count as zero income.
thats interesting you actually dont provide any numbers showing inequalities became higher with higher taxes rates on the richs relativly to the poors
LibertarianTV the rich found ways not to pay wich would create a level where you're nit rich enough to bribe but rich enough to pay high taxes.
That is what he means.
I know right. The rich was still rich with all those exemptions. Besides, how can there be inequality when everyone's post-tax is similar.
@LibertarianTV yes! thank you. This professor might be stating some historical facts about the tax code, but his interpretation has nothing to do with liberty. When anyone (rich or poor) avoids getting their income stolen by the government, liberty is enhanced for everyone. If some billionaire burned away billions of dollars, this would reduce price inflation, and improve equality since the poor are always the ones most hit by inflation.
JP Bochi exactly
@Furion Let me get this straight. LibertarianTV and I are disagreeing with a video from Learn Liberty (which are usually pretty decent), and you are saying that we are the masses? What's you definition of masses? People that disagree with 99.8% of the population? If so, you do need to revisit your logic. Masses are indeed fucked.
*why do rich love high taxes ? Because they use tax heavens anyway* 😂😂😂
Thank you for such a wonderful information
So the problem wasn't the high tax rate, but the fact that there weren't laws preventing targeted tax exemptions like there are for targeted taxes.
Thank you!!! Finally, we can learn the truth from an economist, not a talking from a politician!
I think you mean a Koch-funded stooge
If u EARN MORE THAN $34k then you are in the 1% congratulations
Globally? Meaningless to someone earning $34K and trying to live in the peepulzzz republik of kalifornikation.
Yes, you need $34K a month minimum in Commiefornia.
You missed a number.
34k puts you in the 27th percentile. You have to make over 475k to be in the top 1%. (Used the income calculator for 2018/2019 data)
@@gregorythompson5334 The bottom 40% (60th percentile and below) of wage/salary earners in the USA had 25,000 a year or less, while median/bottom half (50%/50th percentile and below) had $34,000 a year or less, the average (33rd percentile, top 67% of income distribution or higher) had $45,000. These are just accounting for wages/salaries after retirement contributions, and are pre-tax figures given out by the Social Security Administration for 2019. They do not include any additional compensation, like fringe benefits paid per diem, such as healthcare benefits and on-site meals or even employee housing or recreational centers.
The figures include directly paid wages and salaries, plus tips and bonuses. The top 10% (90th percentile) had $100k a year or more, and the top 1% (1st percentile) had $300k a year or more. These figures are for 2019, BTW. I do not include any other income sources, such as net investment income sources like interest, ordinary or qualified dividends, short- or long-term capital gains, merchant and overdraft and other fees, royalties for patents or copyrights or trademarks, or insurance premium payouts collected.
U.S. Corporations earned approximately $1.8-$1.9 trillion in pre-tax corporate profits in 2019, and wages and salaries paid to W-2 employees and 1099 independent contractors accounted for a total national wage bill of approximately $8 trillion pre-tax and minus retirement account contributions. The government at all levels--federal, state, and local--took in just over $5.5 trillion in total tax revenue, corporations paid about $400 billion to $500 billion at all levels of government, whereas W-2s and 1099s paid around $2.5 trillion in personal income taxes, on top of about $1.2 trillion in Social Security and Medicare taxes.
Isn’t this more of an argument that taxing the rich isn’t necessarily bad, but if you’re gonna do it you have to also close a mountain of loop holes so they don’t avoid paying those taxes?
Thomas Sowell also talked about this trend of raising taxes on the wealthy resulting in the government taking in less money overall, but the reason he gave was that the rich used these loopholes or moved there money strategically so as not to pay the taxes. But you could solve that at least to some extent with better tax law I would think.
Also I have to wonder, if the wealthy can tax dodge with high taxes what’s stopping them from tax dodging with low taxes? Seems to me the loopholes are the real problem, no?
You don't find it kind of naive thinking that the solution you've put forward (better tax law) can easily be read as "Stop having corrupt politicians" which is tautologically not possible? Corruption, which is an expression of inefficiency in a given system, will always exist. It increases through various pressures from both within and without the system in question, usually though when the system itself expands. The larger the system, the more inefficiencies prevalent in it.
The rich will always exist, and always want to stay rich/become more so. This means they will always be looking to take advantage of loop holes and the corruption inherent in the system. You seem to be under the false belief that the failure point is not extracting the wealth from the obscenely wealth, when rather the failure point is the methods that are meant to hinder said wealthy (taxes) are actually being used by them to stifle competition and growth.
By lowering taxes across the board you may not be harming the big dogs, but that's fine if it opens up avenues for the little ones to grow and compete with them directly. When the ultra wealthy are forced to compete against upstarts then it cuts the metaphorical fat from whatever it is they produce. You can see the reverse happening now in all the big name companies. Cars are built to fail after so many years. Phones are designed to literally fall apart, etc. If the system wasn't crushing the upstarts via taxes, then you would see what the companies of yesteryear did. You'd see them making better, cheaper, longer lasting products that weren't designed to fail. Early Ford vs Current Ford if you will.
As for your final question, let me ask you something. Did you ever pirate digital products? Movies, games, music? The answer is most likely yes, because statistically speaking everyone has at one point, often many points really. Now, did you find yourself doing less of that when you used Netflix, or Spotify, or *insert cheap and good service here? That's because it wasn't worth it for you to pirate those products anymore. Pirating a game has less value if you can easily and cheaply get it on Steam during a sale. Pirating a movie makes less sense if you can watch it for a low fee on Netflix. etc
That's the answer to your question. Lower taxes aren't really worth dodging. Some might still do it, but at a certain point the money and time they spend attempting to do so is a net negative, to speak nothing of the potential criminal liabilities if caught. Why bother worrying about paying a pittance when they can just slap a quick payment down and move on?
Also raising taxes too high prevents wealthy individuals and businesses from wanting to run businesses in your country. 50% of 1 billion is better than 80% on nothing.
But no rich person pays 50% not even close
Read the novel “Cash McCall” to learn more of this.
If the question of "fiscal optimisation" arrises, this means your taxation system is overcomplicated.
Hear me out. What if… instead of cutting tax rates cross the board we just stop the cronyism. When at 3:58 he says the only way the rich would pay taxes is if it isn’t exorbitant amount, it looks to me as an incorrect assumption as under a market capitalist system companies will always look to avoid tax. To reiterate, if the rich don’t pay the appropriately high taxes, don’t cut the taxes, just make them pay it.
Absolutely! There is no situation where accepting that any group of people can avoid paying taxes will ever be beneficial to society as a whole.
Tax Rates are not the problem. Tax *Avoidance* is the real problem.
Instead of making new taxes (with brand new exemptions), we need to tighten the tax code with a Flat Tax. A Flat Tax is regressive, but a complicated Progressive Tax is always open to this kind of abuse, often making it even *more* regressive.
a flat tax would be nice
The thing I hate about the "rich don't pay their fair share" is that they never say what that fair share is - if you made in 90% the same people would still be screaming for the rich to pay their fair share.
The top 10% ($145k+) account for 70% of the tax revenues already. The imbalance is even more pronounced when you account for "cost of services received" across the income ranges. I'm curious what "fair" actually means as well, when that phrase is used.
@@WhiskeyPapa42 I've always thought taxes should be logaritmic.
If you earn 2x the money, you get to keep 1,5 times the money. (something like that).
imaginary example:
income - tax = net
*250 - (-105,56) = 355,56
*500 - (-33,33) = 533,33
1000 - 200 = 800
2000 - 800 = 1200
4000 - 2200 = 1800
8000 - 5300 = 2700
notice that on the very low end, you actually get extra. This could replace all kinds of benefits that make taxes complicated. But you always keep more for yourself when you earn more, so you still have incentive to go work and earn money.
Ofcourse this would only be for personal income tax. (income would be all money that a person receives except for the negative taxes ofcourse)
special cases like selling a house, car, artwork, ..., would be considered income but you get to substract the original buying price. (so you are only taxed on profit) If you didn't make a profit, it isn't counted. (so you can't artificially lower your income)
And you get to spread the profit over the number of years you owned the house/item (with a determined maximum years, f.e. 20years in the case of a house)
@@WhiskeyPapa42 What proportion of income (including capital gains, inheritance etc.) do the top 10% account for? What about that of disposable income?
Without these figures, it's meaningless to say the top x% pay y% of taxes, because you have no idea what x and y ideally _should_ be.
@@alphamikeomega5728 the top 10% account for.... 70%. That is the proportion.
@@WhiskeyPapa42 You not what is an imbalance? The top 1% being richer than the bottom 50%. They surely can afford paying higher taxes, in fact if it where to be fair the 1% alone should pay for 50% all the tax revenues.
Man I am glad no one is talking about reintroducing the backward taxes from 50's....
I never thought I would be clickbaited by a college professor talking about taxes
Closing the abusable tax exemptions and loopholes is the ENTIRE POINT when we say tax the rich. Obviously there's more to it than just the rate alone.
are there books to read on this subject?
Just study proper (Austrian) economics, and it will all make sense. The less crime, the more prosperity. Taxation is theft.
The recession in 1958 , which was the major one, had nothing to do with the tax rate, it was a combination of the post war economic boom ending, increasing interest rates on housing, and other countries catching up to the us in production. The policies used to fix the recession didn’t involve the tax rate either. The number of recessions after 1965 when lobbyists started to lower the corporate tax rate came in similar numbers each decade, but those ones were more severe.
I like it when they changed the thumbnail with AOC on her Chick-fil-A bag.
I mean, we couldn’t miss this opportunity
@@LearnLiberty based and redpilled
Great video. It's amazing how unravelling many common economic myths boils down to remembering elementary economics 101 principles like opportunity cost. A light bulb moment was when he said if the marginal income tax is that high it becomes very valuable to get an exemption written into the tax code.
Absolutely! Glad you enjoyed it.
This is misleading. Even though rich have more incentive to evade tax at 91% than at 10% or whatever, they still have enough incentive to evade tax at a lower rate, and they still do. The other side of the coin is that lower tax means lower public spending, hence the underfunded police, no security nets for unemployed etc. This video is evil, at it distracted attention from the most important solution to the problem - getting voters to take back control of the law from the few corrupt people that sit there.
@@ArgumentumAdHominem I appreciate the main point of your argument, but we should refrain from calling people evil. It distracts from the most important solution to the problem - a good faith democracy where people can discuss important issues in good faith. The most useful tool the corrupt have is division. Even though I'm skeptical of the thesis of this video, It's refreshing to hear this view point without all the "librul" jokes. Let's leave all that back in 2018 where it belongs. Respectfully
@@dumbr457 Thanks for your reply. With all due respect, I called the video evil, not the person. I believe that the video may do a disservice to the audience. I do not claim that I am 100% certain of my point of view, nor do I claim that the author did so with ill intent.
I do however have certain doubts about democracy. I fully believe in freedom of speech and the right of every citizen to determine how they want to be governed. However, I must admit that the systems currently in place, especially in US, are extremely far from what I would call intended democracy. Every single loophole conceivable is exploited into oblivion to create what we have now.
@@ArgumentumAdHominem lower public spending is always a good thing, all it means is that the money will finally go to the right places and not be wasted
We dumped that for tax rate cuts in the 1960's, but the wealthy still take their exemptions. The exemption/loophole game was made easier.
The exemption/loophole game was made unnecessary for many.
@@lordtalosgaming1448 and yet they continue doing it. The fact that there isn’t even a wealth tax in the US is so insane. Literally anyone with let’s say 5 million dollars or more will live comfortably for the rest of their lives, regardless of the tax rate, wealth tax, etc. most of the money will just sit there, doing nothing. Taxing them is simply common sense that hundreds of countries have figured out much better than the US. The fixes in broad strokes are easy. Wealth tax, end loopholes and exemptions for those who make over a certain dollar amount annually, end lobbying/bribery, as well as ending citizens United to boot. Make the tax code comprehensible and have the government do the math for you so tax season is super easy.
End result is a lot of tax money that the government can use to repair and expand infrastructure, public transportation, education, Medicare for all, Medicaid, and so much more. So many countries heavily tax the rich and place significantly more restrictions on their businesses, and yet they are vastly wealthy anyway. The same can be said for the USA, we just have some backwards thinking thanks to a lot of propaganda, including this video.
@@solkvist8668 I agree this video sidesteps the issue (lobbying) and makes misleading arguments like "the rich love high tax rates."
While ending bribery and lobbying are noble causes, they will remain a pipedream. Those with financial capital will ALWAYS seek to translate it to political capital. A democratic mode of government, at least on paper, seeks to distribute political capital, and challenges the ability of the rich to consolidate it. Each man and woman, regardless of income, gets only one vote to cast. However, the ultra-wealthy reserve the means necessary to simply terminate democracy if it gets too difficult in a demoratic setting to consolidate political power. Such an endeavor is too much effort and risk for too little reward, and so it hasn't happened yet; the rich are comfortable just undermining democracy, rather than replacing it altogether. The demolition of democracy will happen when the rewards eventually outweigh the risk and effort.
Now this is where we may have fundamental disagreements, or just lack of agreement. I simply don't believe everyone is entitled to equal slices of the political or economic pies. Only those with the will to amass power and wealth eventually succeed. Even in a democracy that intends to be equitable, hierarchies will emerge and persist.
Wisdom is wisdom and not what people make it to be. If an idea is asinine, no amount of sugarcoat will change it.
Now that's a strange kind of logic that we don't normally use.
"We shouldn't jail murderers because they would just change the criminal code". If that really was true, would you just give up and accept murder as part of life?
This video pretends to care about income inequality, while in reality, it's purpose is to just make you give up and shut up about it.
Does anyone have the text of the law? If someone could point me to it I'd be thankful.
Low taxes across the board no exemptions. Everyone pays
Your right doesn't really make sense to me why someone like the plumber pays at a 15-20% rate while the Doctor or successful Lawyer pays 40% just because they make more doesn't mean you get to take more then you would take from the plumber. Most of the time the taxes go into the welfare state or military the military is mostly fine except a few things but the social programs range from food stamp "also known as SNAP" to things like free phones remember Obama phones? Or things like Healthcare "Medicare/Obamacare" that turned out great I spent 8x more on a X-ray just last month compared to my old health plan back in 2007 before Obamacare over 1200$ dollars for a X-ray for my child even with insurance paying "apparently 75%".
No one pays, everyone gets extorted. Taxation is theft.
@Mike Jones Taxation and government makes everyone poorer, always. Abolish them and poverty will go away.
You mean the 1950's the largest single era of growth in the USA . Where CEO made 30 times what workers make , now its 300 times . The birth of the middle class.
So what if a CEO makes more money? Everyone is making more money and has a higher standard of living. Heck, split the Walmart CEO's salary evenly among walmart employees, and you'll see a $10/year pay increase each.
CEO salaries have not kept up with inflation, it has sky rocketed which is my point. There was a time from about 1790 to 1980 when a corporation or company did well you the work did well also. Not so any longer. Wages for workers have been flat over the past 20 years when you take in account inflation. So CEO and top executives are grabbing with both hands and spending our jobs overseas to boot. Stop defending them, they did not care about you.
I agree. CEO compensation has gotten a little out of hand- particularly in the US. I live in Australia now, and the middle class is still alive and well. Everybody is generally prosperous- of course, some more than others, but wages are high across the board. Things are changing here though also, and we are starting to see a shift towards the way things are in America.
I know CEOs don't care about me and I don't care about them, I don't even care how much the rich have but how little the poor have and standard of living keeps rising, even just to development in technology alone. Besides, how many CEOs are there? Let them have their 300x income and their 20 cars, I don't mind (except that it's creating jobs in the sportscar industry)
What really helps the middle class is not to redistribute top executive income, which like pointed out would make little difference, but giving opportunity for small and medium businesses to compete with the big ones. The rich do indeed like high taxes even if they wold have to pay it since it would crush competition. The amount of the tax regulations is a big hurdle too for competition since only full time legal teams are able to take full advantage of the currently 60000 pages of federal tax code.
Competition is what creates jobs and raises wages even without minimum wage to an amount that is livable.
This was posted 4 years ago, how does the thumbnail have the picture of the Aoc tax the rich dress from 2021?
It's now so complicated normal people specially American people barely know this. Higher tax keeps the status quo destroys competition and keeps the top people at the top
So then just dont allow the exemptions to exist, dont allow lobbying, dont allow politicians to be corrupted, and fire the corrupt ones.
What do you think created the incentive for all that in the first place.
It's like asking for stricter immigration border control without realizing that strict requirements incentivised people not to follow them.
Are there any books or anything to prove this further? Because I see a person talking but I'm a data guy.
Fenix What I see is a person purposefully misinterpereting stats and facts to make a controversial, and possibly viral, video that spreads misinformation.
It is one of the easiest ways to get attention and if he put a patreon link at the end, money as well.
@@kidmosey Are you saying you would prefer a flat percentage tax for everyone? Because that I agree with. The current system makes no sense and seems pretty arbitrary. Tax law should be kept simple, that this video got right. From that he went on a rant of simply hating rich people, though.
@@kidmosey They won't if you simplify the tax code and keep it simple. If you don't add exceptions in the first place, nobody can exploit them.
Kaleb Bruwer When it become more affordable to just pay the tax vs hire an army of lawyers to find loopholes I wonder if they actually would just pay
This video should have 20 million views.
What I want to know is why a video that is dated four years ago has a thumbnail with a picture taken less than a year ago.
Me to
The highest tax rate was 91%, but nobody paid that. The highest rate paid was probably around 40%.
Tokes Alotta you can say that but you have to back it up with something
@@yeboscrebo4451 tax records don't lie. Even today look at the taxes paid by the top 100 corporations,.....zero on billions in income.
In the 50's it was a running joke that "only the little people paid taxes".
Anyone who could afford their own accountant could easily find a way to exempt themselves.
"probably" isn't actually
Capn BillL isn’t that exactly what the video said?
Taxes as a percent of GDP ranged between 14.5%-16% when when the top marginal tax rate in the 1950's was 91%, less than now which is about 16.5% of GDP. We had a lot more "tax shelters" and ways to defer taxes then than now.
The tax code in the 1950's was about 12,000 pages. The first two were the tax tables. The rest of the pages were "earmarks" by Congressmen, on behalf of individual constituent donors providing "exemptions" from taxation, often for individuals, who found it less expensive to donate to their Congressman than to pay the full tax.
You can always make government spending more efficient, thereby lowering the amount government spends and needing less tax revenue.
Reasonable people would never say such a thing. The requirements for such a thing are impossible to satisfy.
I'm reasonable and I said it. Privatize education, healthcare (get rid of SocialistCare), and social security to begin with.
There is no incentive structure that would force an entity such as the government which is solely based on special interests and voting blocks to become efficient. That's why I call it unreasonable.
As long as their is a multi-billion dollar “tax advisory practice” that is lucrative for all involved and attracts some of the country’s best minds, no tax policy will efficiently move money out of deep pockets.
How does a 4 year old video have a thumbnail with a picture of AOC from just a few months ago?