Wealth Tax Cons
Tax increases for those at the top can achieve two aims: providing revenue resources from those that have experienced the greatest gains in income, and countering economic and social inequalities.
As long as revenues are used to fund public services that matter to residents, there is no reason to think taxes would lead to out-migration. ... If states raise taxes on the rich, the top income earners will leave, causing not just a loss of tax revenue but also a shortage of high-skill workers.
The federal tax system is generally progressive (versus regressive)—meaning tax rates are higher for wealthy people than for the poor. ... This is because of programs such as the Earned Income Tax Credit, which gives lower-income working Americans tax refunds even if they don't owe taxes.
Why do the super-rich pay lower taxes? ... The rich pay lower tax rates than the middle class because most of their income doesn't come from wages, unlike most workers. Instead, the bulk of billionaires' income stems from capital, such as investments like stocks and bonds, which enjoy a lower tax rate than income.
Imposing higher taxes on the rich would actually help the economy grow faster, Democrats say. That's contrary to decades of Republican trickle-down orthodoxy that has made the total tax burden in the U.S. ... Elizabeth Warren and Bernie Sanders who favor taxing the rich, hitting roughly one of every 500 people.
Billionaires generally don't make their money from big salaries; their wealth is built on investments in companies and other assets, from real estate to art. The money they make on these investments is taxed differently than the money you make from working.
Selling assets at strategic times
Taxes on assets such as stocks and real estate investments aren't owed until they are sold. That helps people such as Jeff Bezos, the Amazon CEO, founder and richest person in the world, grow their wealth rapidly while avoiding a huge tax bill.
High marginal tax rates can discourage work, saving, investment, and innovation, while specific tax preferences can affect the allocation of economic resources. But tax cuts can also slow long-run economic growth by increasing deficits.
The rich may travel a lot, but they rarely change the state where they live and file their taxes. Only 2.4% of millionaires move across state lines in a given year. Low-income earners have almost twice that rate of migration (4.5%).
Reputation as the enemy of the rich
For a long time, France has been known for its extremely high tax rate policies that forced well-known millionaires, such as Gérard Depardieu (actor) and Bernard Arnault (the director of the luxury company LVMH) to leave the country and look for tax shelters in tax-friendly places.
The total number of millionaires in US equals to 18.6 million. There are 705 billionaires in the United States. There are 293,992 millionaire households in New Jersey.
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