How much would Bernie 2016 cost you?

How much would Bernie 2016 cost you?(medium.com)

9 points by jmorf 10 years ago | 10 comments

golergka 10 years ago |

One thing I don't see discussed in "tax the rich" discussions about US politics is that it actually often means "tax the capital". But capital is very mobile in modern world; the moment you increase tax on capital gains in US, markets rebalance, and capital moves to other parts of the worlds, reaching some kind of risk/gain equilibrium.

For me, an outsider, the US was always in contrast with other first world countries in terms of how lucrative it to the capital, and how powerful and healthy the whole economy is on a large scale, and how quickly it recovered after 2007, compared to other economies that were similarly affected. Everybody moves to US for jobs, or to start a business. Doesn't US left wing sees that as something worth preserving?

_yosefk 10 years ago | |

I don't really have an opinion on what the optimal capital gain tax rate is, but wrt your specific point of capital being mobile in the sense of being able to evade a higher tax rate (as opposed to being mobile in the sense of being able to choose what to invest in) - I'm not sure it is except for the few very, very rich people. If an American divests from US stocks and reinvests the capital in European or Asian stocks, AFAIK they still have to pay taxes for their capital gains, and Americans specifically even have to pay capital gain taxes if they move elsewhere, unless they renounce their citizenship. Certainly pension funds managing the capital of millions of Americans will pay a higher capital gain tax regardless of where they invest the capital and millions of Americans will not emigrate as a result. As to corporations, the US is making it tougher to escape its unusually high tax rate on profits by targeting "inversions" right now.

So while I'd guess that higher taxes will hurt growth at some point, I'm not sure that they're that easy to escape; perhaps I'm missing some obvious loopholes.

golergka 10 years ago | | |

Uhm, but private citizens don't usually invest themselves — if I understand correclty, typical 401k (or whatever american pension plans based on investments is called) is invested into huge funds and banks, which operate trillions of dollars in assets and can move them all over the world.

toyg 10 years ago | |

The US is not just a shining city on the hill; there are huge ghettoes and income disparity is sky-high in a way that is simply unimaginable to Europeans. Recently, these disparities have reached a point where both underclasses and lower-middle-classes feel they are being screwed a bit too much, because productivity gains from automation have gone entirely to capital owners. There is only so much you can tolerate in the name of "market adaptability"; after all, Europe might have its problems but from an economic perspective is still a powerhouse.

golergka 10 years ago | | |

Well, this seems completely logical to me, because freedom was always the central idea to US, for better or for worse. And freedom means nothing if it doesn't include freedom to fail without any safety nets.

chris_wot 10 years ago |

Lies, damned lies, and statistics.