How would you actually tax the ultra wealthy?

Submitted ⁨⁨15⁩ ⁨hours⁩ ago⁩ by ⁨DireTech@sh.itjust.works⁩ to ⁨[deleted]⁩

Assuming billionaires were going to get a special tax, how would you actually determine how much to tax them? Sure some would be straightforward like Musk where it’s entirely derived from a few companies with known ownership stakes, but what about all the others?

We don’t even know the names of most of the billionaires. With all the games they can play to hide money, now made even easier thanks to the changes Trump made in his first few months, how would you even figure out who and what amount to tax? They don’t have a normal salary or easily documented income like everyone else.

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AstroLightz@lemmy.world ⁨1⁩ ⁨hour⁩ ago
A potential mathematical approach to equal taxation that works in any country:

Calculate the average income of every citizen. Let A = the average income (amount per year)

Set a baseline tax amount for the average (e.g. 10%). Let P = baseline tax percentage

Given a person’s income, calculate how far above or below they are compared to the average. Let I = a person’s income. We can calculate the difference, D, with D = I - A. A positive value means the person’s income is above average, whereas negative is below.

Calculate the difference as a percentage. Let Q = D / A

Calculate the percentage of the tax percentage. This will determine how much more or less a person will have to pay: R = Q * P

Finally, calculate the person’s unique tax amount: T = P + R. If R was a positive value, that means the person will pay more. If R was a negative value, they pay less. If R = 0, they pay the base amount.

Example: Let’s say the average income per year is $50,000 USD, and the baseline tax rate is 10%

So A =50,000 and P = 10% / 100 = 0.1

Given a person’s income: $30,000/yr:

I = 30,000

Calculate the difference:

D = 30,000 – 50,000 = –20,000 Q = –20,000 / 50,000 = –0.4 (–40%)

Calculate how much more/less the person pays:

R = –0.4 * 0.1 = –0.04 (–4%)

Calculate the unique tax amount:

T = 0.1 + (–0.04) = 0.1 – 0.04 = 0.6 (6%)

There might be a better set of formulas, but this is what I came up with. Let me know if I made a mistake in my math.
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- crwth@piefed.zip ⁨1⁩ ⁨minute⁩ ago
  So someone with an income of $1M (20A) has a tax liability of $2M, and earning $10M means you owe $200M? At least with traditional tax brackets, it’s hard (but not impossible) to accidently get marginal rates over 100%.
  
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Dagamant@lemmy.world ⁨5⁩ ⁨hours⁩ ago
The biggest loophole they use is taking out loans and using stock as collateral. Stock is supposed to be unrealized so if it is used as part of ANY transaction it should instantly become taxable.

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- Trex202@lemmy.world ⁨4⁩ ⁨hours⁩ ago
  Then every 5 years or so, force everyone to “realize” their stock value for taxation
  
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  - howrar@lemmy.ca ⁨2⁩ ⁨hours⁩ ago
    I feel like that just overcomplicates things. As long as they can’t use the money, they’re not causing harm, right?
    
    If you want a more continuous stream of income, a wealth tax would make more sense.
    
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- skankhunt42@lemmy.ca ⁨4⁩ ⁨hours⁩ ago
  I’ve heard this before but don’t understand how it works… Eventually they’ll need to pay it off, no? So they sell stocks to pay the loan?
  
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  - whoxtank28@lemmy.world ⁨2⁩ ⁨hours⁩ ago
    Its a buy borrow die strategy. You take loans and refi them to be larger and larger until you die, when you do, the cost basis is reset (so if your cost basis was 1,000,000, but you investments are now worth 20,000,000, your cost basis becomes an untaxable 20,000,000) this new “stepped up” untaxable money (in investments) is used to pay off the debt by selling some assets, lets say 5,000,000 in debt covered by selling (untaxable) investments. This would be for someone with a handful of millions of dollars, I can only imagine what it is like for someone who has hundreds of billions in assets…
    
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HubertManne@piefed.social ⁨2⁩ ⁨hours⁩ ago
I would do a small transaction tax like 1% that should hopefully put the brakes on short term trading and tax inheritance the same as lottery winnings. Tax investment the same as income. for corps tax them based on their entire holdings right up to their top owner with all its subsidiaires but they can deduct any tax they pay in authorized countries (so the way we do sanctions now we could take away their taxes being able to be deducted).

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AAA@feddit.org ⁨3⁩ ⁨hours⁩ ago
Demand full proof of ownership from any company and asset. If they provide strawman, tax those.

If they don’t provide verifiable information, seize the companies and assets and put them into public hands, or if that’s not possible (digital services for example) deny them to operate in your country. The actual owners will reveil themselves quickly. Then tax them.

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graycube@lemmy.world ⁨14⁩ ⁨hours⁩ ago
You have a special division of the IRS whose job is to identify the top few hundred wealthiest individuals and then tax them. These people wouldn’t have to self report like the rest of us.

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- trashcroissant@lemmy.blahaj.zone ⁨10⁩ ⁨hours⁩ ago
  Idk how it is in the US but in Canada, they already have all our numbers. Really wouldn’t be hard to enforce except many billionaires wealth doesn’t come from their income.
  
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  - lauha@lemmy.world ⁨5⁩ ⁨hours⁩ ago
    Just tax assets too
    
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HasturInYellow@lemmy.world ⁨5⁩ ⁨hours⁩ ago
With a large bladed machine.

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GreenBeard@lemmy.ca ⁨14⁩ ⁨hours⁩ ago
Two prongs. One, tax loans against stock options and publicly traded shares. Two tax foreign investment dividends that constitute more than 10% of the total value of a publicly traded company. Step one makes them live of dividends and realized assets. They can’t live off other loans of other people’s money and just keep hording assets, two pins them down and keeps them from trying to take their money and run to a tax haven.

They will eventually find a way around those, and you will have to adjust the tax code to accomodate, but that’s going to be true regardless. It’s a bit like digital hygene and cyber security. An endless arms race between states trying to build more effective risk management tools and people trying to exploit and the system and thus the people living within the system.

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- RememberTheApollo_@lemmy.world ⁨13⁩ ⁨hours⁩ ago
  I’d refine that slightly - tax loans on anything except those for a primary residence, and loans used to create businesses that employ less than 100 people, or any business in service of the loan recipient. I’m sure that could be refined quite a bit. The intent being that they can buy a primary residence like anyone else and not be taxed on it - restrictions would apply like they’d actually have to live there, not sell it for “x” years and not build another primary residence for “x” years or then be taxed on it. The businesses would have to be big enough to be useful, not a business of rich guy’s 2 buddies that would just use the “fake” business to throw venture capital back in the rich guy’s business, or the rich guy buy a yacht and the “business” be him paying his own crew through a shell company to drive him around in his own yacht.
  
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  - GreenBeard@lemmy.ca ⁨13⁩ ⁨hours⁩ ago
    The specifics are going to need refinement, yes. The broad principles should hold though. One tax that forces them to spend down accumulated wealth, one to punish trying to offshore profits to tax havens.
    
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- ChristerMLB@piefed.social ⁨9⁩ ⁨hours⁩ ago
  this sounds promising, but how do you tax one thing against another?
  
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  - GreenBeard@lemmy.ca ⁨1⁩ ⁨hour⁩ ago
    That’s going to take a lot of math and market analysis to work out the specifics of. I’m just one rando on the internet. This was more of a high level framework to start from. With a team of wonks and a bit of time you could pin down precise numbers.
    
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shittydwarf@sh.itjust.works ⁨14⁩ ⁨hours⁩ ago
Tax them? Nationalize their assets

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- cecilkorik@piefed.ca ⁨1⁩ ⁨hour⁩ ago
  The reason nationalizing things doesn’t work is because it makes billionaires mad, and billionaires use their money to get revenge, sabotage the shit out of the process and convince you it’s a failure with propaganda you don’t understand and get you to elect a government that undoes the nationalization or dismantles it or sabotages it further until it dies.
  
  The general public can be reliably played like a fiddle to go directly against their own best interests, at full speed. Case in point: Trump. Also Reagan. Also all politics ever, really. “I love the poorly educated” is quite possibly the only true thing Trump has ever said.
  
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deifyed@lemmy.wtf ⁨3⁩ ⁨hours⁩ ago
In my opinion, you’d establish a number that is the max amount anyone would need in a region per year, let’s say 1 million. For one million you could finance a place to live, a car, food for you and your family, hobbies and maybe a trip or two. Then multiply that by three. Just to shut down the ones who’d argue. Three times what ever the amount of money anyone would need is an obscene amount of money per year. Everything else goes to 1) the state to regulate the quality and cost of the community, and 2) entities that generate value and has jobs

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elevenbones@sh.itjust.works ⁨3⁩ ⁨hours⁩ ago
Take their moneys.

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Kolanaki@pawb.social ⁨5⁩ ⁨hours⁩ ago
100% of what they make over $1B.

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- AlecSadler@lemmy.dbzer0.com ⁨5⁩ ⁨hours⁩ ago
  I think OP is asking how you figure that out. In general, billionaires don’t “make” anything - on paper.
  
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  - Kolanaki@pawb.social ⁨5⁩ ⁨hours⁩ ago
    Close all the loopholes that let them skirt the capital gains taxes and other nonsense. Make it illegal to use stocks as collateral on loans. Etc.
    
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ChristerMLB@piefed.social ⁨9⁩ ⁨hours⁩ ago
I guess you tax assets more and salaries less - and work internationally to make tax avoidance harder and less profitable by taxing capital flows and by cracking down on tax havens.

Unless you can get a political consensus on it, I don’t think an inheritance tax will be very effective. Tax planners will find a way to transfer the wealth before it gets inherited, helped by certain kinds of politicians whenever they have power.

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Zannsolo@lemmy.world ⁨2⁩ ⁨hours⁩ ago
Tax stock when it is given for bonus or pay package. The gov gets the top end tax rate with of the stock to be sold over the next 12 months.

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melsaskca@lemmy.ca ⁨4⁩ ⁨hours⁩ ago
I would confiscate their rocket ships and satellites. All yachts designated as navy or coast guard. You could also do one of those lies about the stock market so it can be mutilated and raped to bring more profit, but for the citizenry, so it’s a good thing. /s

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hperrin@lemmy.ca ⁨14⁩ ⁨hours⁩ ago
That’s the thing. If you pay people to figure it out, they will. It’s only through massive defunding that the IRS has become completely incompetent. They used to be quite good at their jobs.

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zxqwas@lemmy.world ⁨8⁩ ⁨hours⁩ ago
Taxing the ultra rich is easy. Taxing them without screwing over someone else in the process is hard. They can afford the best lawyers and accountants to find loopholes and still consider it cheap.

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edgemaster72@lemmy.world ⁨14⁩ ⁨hours⁩ ago
Image

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DagwoodIII@piefed.social ⁨4⁩ ⁨hours⁩ ago
There’s just an upper limit on what any one person can own.

Ten houses, one private airplane, one yacht, and $100 million worth of ‘stuff.’

No more than 1% of any company.

That’s just off the top of my head for discussion. Feel free to jiggle with the numbers.

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- Broken_Orange_Juice@lemmy.world ⁨4⁩ ⁨hours⁩ ago
  No more than 1% of any company doesn’t sound reasonable. Imagine creating a company and only being allowed to own 1%. Heck, if you just made a company who even are you going to sell the other 99% to?
  
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  - DagwoodIII@piefed.social ⁨3⁩ ⁨hours⁩ ago
    This is the rate for billionaires.
    
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gandalf_der_12te@discuss.tchncs.de ⁨7⁩ ⁨hours⁩ ago
If somebody owns shares of $company_A, they have to pay 1% of the shares annually, which become public property. This way, the means of production (company shares) slowly become public property over time.

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- mitram@sopuli.xyz ⁨5⁩ ⁨hours⁩ ago
  I wouldn’t mind if those shares were converted into cooperatives after a while.
  
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reddit_sux@lemmy.world ⁨3⁩ ⁨hours⁩ ago
Take the number advertised on the Forbes list and their self reported number. Tax then according to which is the higher.

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j4k3@lemmy.world ⁨10⁩ ⁨hours⁩ ago
Super simple. Inheritance tax is enormous. You have the right to pass on as many “upper middle class trust funds for life” as you would like, but no other wealth of any kind is inherited.

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litchralee@sh.itjust.works ⁨14⁩ ⁨hours⁩ ago
I was going to write about how an existing tax agency (the California FTB) is already aggressive at tracking down high-earning residents that leave the state – whether in-fact or on-paper – in order to collect precisely what the state is owed per the tax code. That is, the FTB already engages and challenges the precise amounts that these former residents write on their final California tax returns, with some more spectacular results being some incredibly detailed timelines for when someone finally stops being a resident in California, as defined in state law.

But then I noticed that because of California’s proposed wealth tax (aka Billionaire Tax) on the November 2026 ballot, the SF Chronicle has already started a series of articles to answer the specific what-and-hows of the wealth tax. This is the first article, pertaining to enforcement, and it agrees that the FTB would be capable of pursuing any high-wealth individuals that the proposal would tax. sfchronicle.com/…/ca-billionaire-tax-mechanism-21…

This proposed tax in California is written as a one-time tax, so the question of whether high-wealthy people could flee the state is nearly irrelevant, because either they’re subject to the tax or they’re beyond the reach of the US courts (eg Venus). Almost. The remaining questions are legal in nature, and don’t really change how the tax would be pursued. Whether FTB simply hires a dedicated team or outsources to private investigators, the task is still straightforward: follow the money.

Unlike civil lawsuit plaintiffs, who have more limited means of chasing down a defendant’s assets in order to get paid on a judgement, the California tax authorities enjoy the benefit of the subpoena power, that can be used to compel companies and banks to tell the tax authorities about where and how wealth is being held. It is, after all, a core power of a US state to administer a tax, especially when the tax is authorized directly from the sovereign power (ie the citizenry). Any other result would conflict with the very purpose of a republic: to unyieldingly serve the people.

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eskimofry@lemmy.world ⁨9⁩ ⁨hours⁩ ago
America used to tax billionaires already in the 40s. Nothing new to invent here.

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BlameThePeacock@lemmy.ca ⁨14⁩ ⁨hours⁩ ago
100% inheritance tax on any value over 5 million, and slam shut any loopholes that get found.

Force them to either spend it stimulating the economy or give it up to society directly.

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SolidShake@lemmy.world ⁨13⁩ ⁨hours⁩ ago
It’s called an income bracket. We already have them in place.

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- SomeoneSomewhere@lemmy.nz ⁨13⁩ ⁨hours⁩ ago
  One of the big arguments is to tax wealth, not just income.
  
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  - SolidShake@lemmy.world ⁨12⁩ ⁨hours⁩ ago
    So. If I make 50,000 dollars a year but only need 40,000 to live. And I save that 10,000 a year for 20 years. You want to tax me on that $200,000 I saved? Lol wtf
    
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- K1nsey6@lemmy.world ⁨12⁩ ⁨hours⁩ ago
  Steve Jobs notoriously took an annual salary of $1 despite being worth billions. Many of them do the same thing to avoid taxation.
  
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the_abecedarian@piefed.social ⁨14⁩ ⁨hours⁩ ago
the only sure way is to abolish private property and give the businesses to the workers

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FinjaminPoach@lemmy.world ⁨12⁩ ⁨hours⁩ ago
With a gun to their head

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dgdft@lemmy.world ⁨12⁩ ⁨hours⁩ ago
Attainder.

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disregardable@lemmy.zip ⁨14⁩ ⁨hours⁩ ago
Flat tax on spending, flat tax on financial assets, flat tax on out of state transfers. Just no matter what anyone does with their money, it’s taxed.

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- HailSeitan@lemmy.world ⁨12⁩ ⁨hours⁩ ago
  regressive af
  
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- K1nsey6@lemmy.world ⁨12⁩ ⁨hours⁩ ago
  A flat tax is regressive and impacts the poor the hardest
  
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  - disregardable@lemmy.zip ⁨12⁩ ⁨hours⁩ ago
    you’re assuming nothing changes. I’m assuming we increase revenues by massive amounts and actually implement social welfare policy.
    
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- fodor@lemmy.zip ⁨10⁩ ⁨hours⁩ ago
  It’s actually more complicated than you think. Here’s the starting point of the complexity. When do you tax someone’s investment earnings? When do you tax someone’s business? When do you tax someone’s income from abroad? If they live part of their life abroad, how much of their income does your country tax? … If you think the above have simple answers, then you don’t understand the actual situations that people are living.
  
  It’s great to say that a flat tax is simple and it will work but in reality actually it’s not simple at all because there are always ways to gain the system and you have to find those and keep working on fixing them.
  
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