U.S. Billionaire wealth would fund government for just 6 months; Billionaire income for only 6 weeks - Politics Forum.org | PoFo

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#15326859
Many on the Left seem to hold this idea that the national debt and increases in government spending is no problem because taxes can just be increased on the super rich.

But a mathematical analysis shows that even if the wealth of all the billionaires in the U.S. were completely confiscated, it would only be enough to fund the government for 6 months.
(And if rather, only all their income was taken, it would fund government for only 6 weeks)

U.S. Billionaire Wealth Would Fund Government For Just 6 Months, Nick Gillespie and John Osterhoudt, Reason (magazine), July 23, 2021


"There are 724 American billionaires worth a total of $4.4 trillion, according to Forbes. If it were somehow possible to liquidate all of that wealth without causing a market crash that would obliterate much of it in the process, we could cover roughly half a year of combined local, state, and federal spending."

Let's do some calculations.
The average inflation rate over the past 14 years (2010-2024) has been about 3%.
Let's suppose the average return on investments were 10%. When factoring in inflation, that would mean the real effective rate of return would be more equivalent to 7%.
So let us suppose the average billionaire has a taxable income which represents 10% of their saved wealth. (I think that is generous)

Let us suppose we diverted away all the income from billionaires (basically a 100% effective income tax rate), but let them keep just enough so that their saved wealth would not shrink (through the effect of inflation).
That would work out to $387.03 billion.
(the total net worth of U.S. billionaires was $5.529 trillion by the end of 2023)

In 2023, the U.S. federal government spent $6.13 trillion.
So the total billionaire income represents 6.3% of the federal government budget.

Or in other words, billionaire income would pay for only 23 days of federal government spending in a year.


(Hopefully it doesn't need to be mentioned that taking away ALL the income from billionaires would probably be unrealistic. Think about what a 100% tax on income means)


Although the article was published in 2021, they point out that if current trends continue, by 2050, just paying interest on the national debt will account for about a quarter of every dollar the federal government spends.
(But actually, as we found out a few years later, the timetable for that has been massively accelerating. Already by 2023, interest payments were 18.85 percent of what the government collected in taxes)

Then they criticized the governments so-called "Covid Relief", which was a massive spending bill, for only allocating "5 percent" of its total spending on actual Covid relief.

"In the years to come, the U.S. will have no choice but to raise taxes on everyone and slash Medicare and Social Security, which are the biggest budget-busters. But by then it will be too late for a generation of elderly people to plan accordingly. And a U.S. debt crisis could destroy the dollar and undermine our entire economy. "

The article's ending summary concludes with:

"There's no way to confiscate enough wealth to stave off our looming fiscal catastrophe. Instead of harping on rich people and their rockets, let's start talking about the looming debt crisis fueled by insane government spending and come up with actual ways to avert catastrophe."
#15326863
Puffer Fish wrote:Many on the Left seem to hold this idea that the national debt and increases in government spending is no problem because taxes can just be increased on the super rich.

But a mathematical analysis shows that even if the wealth of all the billionaires in the U.S. were completely confiscated, it would only be enough to fund the government for 6 months.
(And if rather, only all their income was taken, it would fund government for only 6 weeks)

U.S. Billionaire Wealth Would Fund Government For Just 6 Months, Nick Gillespie and John Osterhoudt, Reason (magazine), July 23, 2021


"There are 724 American billionaires worth a total of $4.4 trillion, according to Forbes. If it were somehow possible to liquidate all of that wealth without causing a market crash that would obliterate much of it in the process, we could cover roughly half a year of combined local, state, and federal spending."

Let's do some calculations.
The average inflation rate over the past 14 years (2010-2024) has been about 3%.
Let's suppose the average return on investments were 10%. When factoring in inflation, that would mean the real effective rate of return would be more equivalent to 7%.
So let us suppose the average billionaire has a taxable income which represents 10% of their saved wealth. (I think that is generous)

Let us suppose we diverted away all the income from billionaires (basically a 100% effective income tax rate), but let them keep just enough so that their saved wealth would not shrink (through the effect of inflation).
That would work out to $387.03 billion.
(the total net worth of U.S. billionaires was $5.529 trillion by the end of 2023)

In 2023, the U.S. federal government spent $6.13 trillion.
So the total billionaire income represents 6.3% of the federal government budget.

Or in other words, billionaire income would pay for only 23 days of federal government spending in a year.


(Hopefully it doesn't need to be mentioned that taking away ALL the income from billionaires would probably be unrealistic. Think about what a 100% tax on income means)


Although the article was published in 2021, they point out that if current trends continue, by 2050, just paying interest on the national debt will account for about a quarter of every dollar the federal government spends.
(But actually, as we found out a few years later, the timetable for that has been massively accelerating. Already by 2023, interest payments were 18.85 percent of what the government collected in taxes)

Then they criticized the governments so-called "Covid Relief", which was a massive spending bill, for only allocating "5 percent" of its total spending on actual Covid relief.

"In the years to come, the U.S. will have no choice but to raise taxes on everyone and slash Medicare and Social Security, which are the biggest budget-busters. But by then it will be too late for a generation of elderly people to plan accordingly. And a U.S. debt crisis could destroy the dollar and undermine our entire economy. "

The article's ending summary concludes with:

"There's no way to confiscate enough wealth to stave off our looming fiscal catastrophe. Instead of harping on rich people and their rockets, let's start talking about the looming debt crisis fueled by insane government spending and come up with actual ways to avert catastrophe."


Nobody is proposing that ONLY billionaires pay taxes. That is a red herring.

You don’t have to make old people and sick people suffer to protect the. $5.8 TRILLION of the billionaire class (yeah, that’s the new number folks). Take their marginal rate back to 70% —pre-Reagan, add a wealth tax, increase estate tax. Claw back our money AND nationalize the damn healthcare system to make it work for EVERYONE. That would be a good start. Tax reform would also have some positive effects on economic production and national health.
#15326867
Hakeer wrote:You don’t have to make old people and sick people suffer to protect the. $5.8 TRILLION of the billionaire class (yeah, that’s the new number folks).

Many on the Left like you want to take their wealth and spend it. But then what? You can only spend their wealth once.

At the very least, this doesn't sound like a very sustainable plan.
#15326881
AFAIK wrote:You've never heard of the multiplier effect? Money circulates through an economy and we can even attempt to measure this as the velocity of money.

I personally do not believe that economic theory is correct. (But that would be a discussion for a different thread; a long complicated debate, I'm sure)
#15326888
Puffer Fish wrote:Many on the Left seem to hold this idea that the national debt and increases in government spending is no problem because taxes can just be increased on the super rich.

But a mathematical analysis shows that even if the wealth of all the billionaires in the U.S. were completely confiscated, it would only be enough to fund the government for 6 months.

Do only billionaires now count as the "super-rich"?? $100M isn't enough? Some years ago, someone analyzed the lifestyles of the rich, and they found that after ~$50M, additional wealth made no real difference to one's lifestyle: you just have a bigger house, a bigger jet, a bigger yacht, more vacation villas with more servants, etc. Maybe now it would take $100M, but it certainly wouldn't take $1G.
"There are 724 American billionaires worth a total of $4.4 trillion, according to Forbes.

​OK, so that is not the top 1%. It is not even the top 0.01%. It's the top 0.0002%. And they still own more wealth than the bottom half of the whole population put together.

Just how unequal -- and unjust -- would it have to get for you to be satisfied?
The article's ending summary concludes with:

"There's no way to confiscate enough wealth to stave off our looming fiscal catastrophe. Instead of harping on rich people and their rockets, let's start talking about the looming debt crisis fueled by insane government spending and come up with actual ways to avert catastrophe."

Yeah, let's talk about that insane government spending, shall we?

Like Medicare and Medicaid, most of which goes to the pharma companies, hospital corporations, and other medical monopolies the rich, super-rich, and super-duper uber-rich own?

Like Obamacare, most of which goes to the health insurance corporations the rich, super-rich, and super-duper uber-rich own?

Like agriculture subsidies, which just shovel billions into the pockets of the corporate farming operations the rich, super-rich, and super-duper uber-rich own?

Like military spending, which mostly goes to the arms manufacturers and other sweetheart military contractors the rich, super-rich, and super-duper uber-rich own?

That insane government spending?
#15326891
Puffer Fish wrote:Many on the Left like you want to take their wealth and spend it. But then what? You can only spend their wealth once.

At the very least, this doesn't sound like a very sustainable plan.


Where did I say "once"? They are going to pay taxes every year just like the rest of us. The difference is that they will pay a lot more. Hell, some of them might even get down to $1 billion net worth.
#15326931
Puffer Fish wrote:Many on the Left seem to hold this idea that the national debt and increases in government spending is no problem because taxes can just be increased on the super rich.

But a mathematical analysis shows that even if the wealth of all the billionaires in the U.S. were completely confiscated, it would only be enough to fund the government for 6 months.
(And if rather, only all their income was taken, it would fund government for only 6 weeks)

U.S. Billionaire Wealth Would Fund Government For Just 6 Months, Nick Gillespie and John Osterhoudt, Reason (magazine), July 23, 2021


"There are 724 American billionaires worth a total of $4.4 trillion, according to Forbes. If it were somehow possible to liquidate all of that wealth without causing a market crash that would obliterate much of it in the process, we could cover roughly half a year of combined local, state, and federal spending."

Let's do some calculations.
The average inflation rate over the past 14 years (2010-2024) has been about 3%.
Let's suppose the average return on investments were 10%. When factoring in inflation, that would mean the real effective rate of return would be more equivalent to 7%.
So let us suppose the average billionaire has a taxable income which represents 10% of their saved wealth. (I think that is generous)

Let us suppose we diverted away all the income from billionaires (basically a 100% effective income tax rate), but let them keep just enough so that their saved wealth would not shrink (through the effect of inflation).
That would work out to $387.03 billion.
(the total net worth of U.S. billionaires was $5.529 trillion by the end of 2023)

In 2023, the U.S. federal government spent $6.13 trillion.
So the total billionaire income represents 6.3% of the federal government budget.

Or in other words, billionaire income would pay for only 23 days of federal government spending in a year.


(Hopefully it doesn't need to be mentioned that taking away ALL the income from billionaires would probably be unrealistic. Think about what a 100% tax on income means)


Although the article was published in 2021, they point out that if current trends continue, by 2050, just paying interest on the national debt will account for about a quarter of every dollar the federal government spends.
(But actually, as we found out a few years later, the timetable for that has been massively accelerating. Already by 2023, interest payments were 18.85 percent of what the government collected in taxes)

Then they criticized the governments so-called "Covid Relief", which was a massive spending bill, for only allocating "5 percent" of its total spending on actual Covid relief.

"In the years to come, the U.S. will have no choice but to raise taxes on everyone and slash Medicare and Social Security, which are the biggest budget-busters. But by then it will be too late for a generation of elderly people to plan accordingly. And a U.S. debt crisis could destroy the dollar and undermine our entire economy. "

The article's ending summary concludes with:

"There's no way to confiscate enough wealth to stave off our looming fiscal catastrophe. Instead of harping on rich people and their rockets, let's start talking about the looming debt crisis fueled by insane government spending and come up with actual ways to avert catastrophe."

A properly constructed tax code would, with rare exception, fully fund the Federal budget.
In addition it would restrain unnecessary or wasteful spending, and reduce the necessity of inflation.
#15327055
Truth To Power wrote:​OK, so that is not the top 1%. It is not even the top 0.01%. It's the top 0.0002%. And they still own more wealth than the bottom half of the whole population put together.

If you claim these billionaires hold more wealth than the bottom half of the population, and the wealth of these billionaires would not seem to go very far relative to the expenses of government, then that doesn't seem to bode well for expecting tax increases to be able to fund big increases in government spending, does it?
#15327076
Puffer Fish wrote:If you claim these billionaires hold more wealth than the bottom half of the population, and the wealth of these billionaires would not seem to go very far relative to the expenses of government, then that doesn't seem to bode well for expecting tax increases to be able to fund big increases in government spending, does it?

<sigh> With marvelous consistency, you are ignoring everyone between 50% and 99.9998%.
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