Richard Wolff on Tax Reform


Tax reform shouldn’t be limited to the
income tax. It should be across the board to all the taxes because over the last
50-70 years all taxes in the United States, virtually every one, has
been shifted from corporations (who used to pay a lot) to individuals. And among
individuals it’s been shifted from the top to the middle and the bottom. And to
correct that, to reverse, that is easy and will raise more than enough money to do
a whole host of things that the American people need and want and deserve. I’m
only gonna give you four simple examples to show what tax reform could be to
expand on what Ocasio-Cortez pointed out. Let’s go. Number one:
the Social Security tax in this country. It already raises almost half the money
that the federal government gets. In other words the federal government gets
roughly half from the income tax and roughly half from the Social Security
tax, sometimes also called the payroll tax. Here’s how the Social Security tax
works: a certain percentage is taken out of your income for Social Security and
it is matched by money provided by the employer. But here’s the rub. It’s only
the first $125,000, roughly, that gets this tax
applied to it. So if you’re a wealthy person, suppose you earn $200,000 a year, or $400,000 a year or many millions a year, you don’t
pay the Social Security tax on all of it. You just pay on the first $120,000. Since that’s way more than the vast majority of Americans
get here’s the result: the vast majority of Americans pay a Social Security tax
but [for] the richest Americans, most of their income is not subject to the Social
Security tax. That’s unreasonable. That’s unnecessary. The Social Security tax
which is designed to give us a society in which people who spent a
lifetime of working are now retired and are decently able to live, that’s
something a civilized society does for itself.
Everybody should pay their share of that and if you applied the Social Security
tax, the same rate everybody pays, to all of the income a person earns then the
wealthy would finally have to pay and that would deliver billions of dollars
in new revenue to the government for public services and it would come from
the pockets of those most able to afford it. Good idea on both counts.
Let me give you a second example. Capital gains are taxed at a lower rate than
labor income. That’s right. You work for an hour using your brains and
muscles, you pay a higher tax on whatever you earn for your labor then if you got
capital gains. What is capital gains? It’s when you buy a share of stock for $5, hold it for awhile, and sell it for $10. The difference between
what you paid ($5) and what you get when you sell ($10) that’s a capital gain. Now
you didn’t have to work for that, you don’t have to do anything. You just had
to have something called money to play this game. And the income you earn is
taxed at a much lower rate than if you had worked. Now there’s no reason for
that. That isn’t fair. That isn’t appropriate. The argument that only if
you give the capital gains folks a break will they invest has been disproved all
over the place because we have many historical examples with higher capital
gains tax and lower and there’s no relationship that we have to worry about
here. And that would generate a huge amount of money. Let me give you the
third example. We have a property tax in the United States. Cities and towns rely
heavily on a property tax. That’s a tax that measures the amount of property you
have and then puts a tax on that property, not on your income, on what you
own. But here’s something you may not understood. Property taxes applied to
property in land, the value of the land you have, the value of a building you
have, the value of the automobile you own and the value perhaps of the inventory
of your business, But here’s the kind of property that
isn’t subject to a property tax: stocks, bonds, cash. Wow. Wow. Now here’s an
interesting fact that may help you understand this. The top 10% of
shareholders own something on the order of 70 to 75% of the shares. By exempting
what’s called “intangible property,” property in stocks and bonds, from the
property tax you’re exempting the richest people in
the country from paying a tax. You’re making the property tax apply only to
the property the mass of people have; a car, a home, some land on which the home
sits and so on. So if you wanted to be fair you’d extend the property tax to
all property. Suddenly trillions in stocks and bonds would be considered
property, subject to tax and that would bring in a revenue that is way larger
than what we now have and enable governments to do all kinds of things.
And the fourth example, and by the way there are more, but the fourth example is
the inheritance tax. Not that many years ago you could leave the first $600,000 worth of wealth when you die to your heirs tax-free. They
would only have to pay an inheritance tax on whatever was left to them when
you died that was more than $600,000 You know what the limit
is today? $11 million per person. So for a couple, leaving to say their wealth to
the children, $22 (2×11). $22 million can be left with no tax attached
to it. You know the United States was once a country where the idea, at
least a majority idea was, we should all start equally, have an equal chance in
life, so that our well-being depends on how hard we work, how talented we may be,
etc. We didn’t like the idea that some people would start with a silver spoon
in their mouth and other people with not enough to eat. We thought that was
unfair that two babies with no responsibilities either way should start
with such an unequal chance in life. And an income tax equals it if you apply
it to inheritance. Inherited wealth should pay a tax. We once did that in the
United States. We don’t do that anymore. We could go back to what we did
generating enormous income from the government and from who, from only the
very wealthiest who leave, say, more than a million dollars or more than half a
million dollars to their kids. Give them that advantage if that’s so important.
But$ 22 million per couple is extraordinary.
So Ocasio-Cortez was right more than she said. Tax reform can and should be done
across the board, wherever taxes are unfair [and] discriminatory, because they’re
always unfair and discriminatory in one particular way: the more you have, the
more the tax system has been manipulated and changed over several decades (at
least since the Second World War) to favor those at the top at the expense of
everybody else.




Comments
  1. The single tax on land values would release capital and labour from the burden of subsidising the feudal privileges granted by the state centuries ago. This is all we need. This would liberate the economy for both workers and entrepreneurs, make big state socialism entirely unnecessary.

  2. I think the only way to curb the insatiable greed of the oligarchy is to implement a MAXIMUM wage through taxation, like we had under Eisenhower (when the US had the largest middle class in world history). Adjusted for inflation, it would be about $2.6 million per year. But let's be generous to the greed crazed and make it $5 million per year, with a lifetime maximum of $100 million in personal assets (no one can own more than $100 million worth of assets at any one time). I've heard interviews with billionaire hedge fund managers and others, and deep down they are all bloody miserable. They are addicted to hoarding wealth, the same way hoarders are addicted to their material possessions, and drug addicts are addicted to their next hit. They can't stop on their own, and will destroy everything and every one around them to get "more". One fellow said that he became horribly depressed after getting a $950 million yearly bonus, and he was depressed because he heard that another guy at a competing firm got a $1 billion bonus! Meanwhile, people who work 2-3 jobs still can't cover their basic living expenses, and not because they aren't extremely responsible and frugal; over 40% of the homeless are fully employed. A maximum wage would end wealth addiction and hoarding behaviors,along with curbing the worker and environmental abuses and broken relationships that accompany them. It would also more evenly distribute the profits from human production and likely lead to greater quality in products, services, and an overall healthier society. The one percenters would howl in rage at first, but after a time they would surely come to understand that they ARE happier with less "stuff" With $5 million per year, they can still have four homes, a few luxury vehicles, and all the trips to spas they may desire. They may need to charter a jet instead of own their own luxury aircraft, but I'm sure they would survive the inconvenience!

  3. No no no. We have all been taught that any increase in tax is paid by the consumer. Whereas any tax savings is paid out in compensation to the corporate executives for exceeding quarterly expectations.

  4. Multi billion dollar companies make their wealth off the backs of, and from the pockets of the people. For them to not contribute back to the society they profit off of is criminal in my opinion.

  5. Social Security 2100. Pass it! Common sense. Follow my Congressman John Larson from Connecticut. His life's work.

  6. Death and Taxes are said to be inevitable. Debt however does not have to be inevitable. Inflation is the invisible tax we all pay with holding money instead of property.
    Real Estate which is land or structures on the land can decrease in value because of market conditions, but only when it is sold. Wealth can be gain from land if subdivided or minerals or agricultural products can be extracted from it. Rents can be made from sharing structures with someone else for income.
    To counteract inflation of fiat currency, I proposed that we base our economy on the READY KiLOWATT as a unit of exchange. Electricity is the input in practically making of everything. Few things are made by hand relatively.
    I would like to see material money disappear and replaced by digital accounting by smart phones. If I put a solar array on my property or wind mill the excess power could be exchanged on the grid. I would recieved a credit for the excess for the use of the excess. If I used more than I produce then I created their would be a debit to my account. This would increase energy conservation strategies. ⚡

  7. "The tax system has been manipulated and changed over several decades to favor those at the top at the expense of everybody else." I proposed this change to address this unfairness, reduce the cost and to improve the economy. Please read and comment. https://kioskfan.wordpress.com/2013/03/20/tax-ideas-or-how-to-improve-the-irs-by-eliminating-it/

  8. Property Tax? It is ludicrous and theft to tax property, other than real estate related, that is already paid for with after tax dollars. What is the justification? What is the governmental cost for someone holding property such as stocks and bonds?

    You use the word fair, and talk about extending the property tax beyond real estate.

    To justify taxing all property because real estate is taxed is a misdirection and disingenuous.

    The characteristics are much different and your linking the two is not sound thinking.

    Property taxes go towards township related expenses that I get the benefits of: Schools, police, fire, etc. If I am holding Google stock, or gold, or art, there is no such benefit and therefore there is no related expense for which I need to pay a tax.

  9. Aren't property tax supposed to be abolished all together… It is OK to tax all sorts of income and transactions… But you can not pay for the ground that you stand on. Just keep it simple. If you did not earn anything you can not be taxed on anything. That is the only way that you can live unbound to any government and free from people and society. Leave that way out for the people…

  10. Hate to say this but the wealthy would like u to mind your own business. Money and power equals not having to say your sorry.

  11. Let's be honest….
    Once USA was the nation everyone was looking up to and admired, because everything new and fancy, and most great ideas for development of the modern society came from USA, but then Reagan became president and it all just stopped.
    Reagan and decades of rightwing conservative political ideology has transformed USA from once beeing a proud and great nation in to a third world development country…

    Americans should forget this "socialist treath" and study the Scandinavian model….

  12. THE TAX-SYSTEM IS OUTDATED. MY PROPOSAL: 1. ALL MONEY VIRTUAL 2. ALL TRANSACTIONS REGISTERED 3. ONLY 25% TRANSACTION TAX. (NO INDIVIDUAL TAX, NO DEDUCTION) 4. BASIC INCOME.

  13. Ordinary people have no clue about all these things. Those with knowledge need to come forward to explain to the public. Thank you.

  14. Tax shareholders more than everyone else. Take the same from them that you would take from someone who wins big in Vegas. After all, investing is gambling. Tax it like what it is. Do not allow shareholders to take over unless they outright own it fairly. Too many businesses have completely disappeared because of shareholders and the CEOs they put in place. Banks need to be regulated very tightly. Oil companies regulated hard and heavy. No more free money to those who keep gaining more money on their own. Do not allow cities to bid on companies to come to their town. Highest bidder wins? Wtf? They should pay! Quit giving the rich free stuff! Make them pay! They can afford it! I'm sick and tired of demonizing the lower income people. It's time we cut the chord to corporations. Even the Liberal rich hire more foreign workers over Americans. Everyone demonizes the illegals and those seeking amnesty. Those are not who takes our jobs. They add to the economy, not drain it. Silicon Valley hires thousand of people from India on work visas. In fact, they bring in thousands more than the law allows and no o e does anything. They dont say anything in the media. Hell some cities have literally hired Visa workers, gave them uniforms, badges, and guns! Patrolling city streets as law enforcement! These are just a tip of the iceberg of what is going on that we never hear about. I have to seek news sources from other countries to hear what is going here! Thst is just insane. No real journalists any more. The very few that are out there, work for independent news media and they get bad mouthed like the poor people do.

    All I know is this, the poor, disabled, retired, children, we all may go down first. But then what? Oh! All those dreadful millionaires. They will get hit and join our ranks. Hmmmm… dont know if I will have much empathy for them. After all those with money who arent for hurting us, sure dont say anything or get together to help fight anything. They may be eaten alive. You know the saying, Eat the rich!

  15. 2:58
    Incorrect statement.
    Approx half of people pay ZERO income tax.
    12% Income Tax on income $10K – $40K and 22% tax on income up to $85K.
    Capital gains is taxed at 20% only if you hold it for at least 1 year otherwise it is taxed at a higher rate.

  16. Very Simple Solution
    "No tax on Income up to $100K per person"
    Everything you earn goes into your pocket, then a
    flat rate of 10% tax on income from $100K to $1 Million.

  17. Richard Wolff deserves a purple heart for his work. He's fighting for the regular guy. Where as most wars are fought for the moneyed interests.

  18. The type of tax Professor Wolff is talking about does not need to bring in more tax, it could simply reduce the tax people now pay …. I am in favour of Governments taking only what they need, but from everyone.

  19. untaxing earned income & taxing unearned income?
    how dare you, thats the exact opposite of the neoliberal agenda

  20. And why has it been changed over the years to favor large corporations and the wealthy? Because the campaign contributions they make buy them influence from the lawmakers who are supposed to be representing their constituents. Support candidates whose campaigns are funded by small donations (the people) https://www.justicedemocrats.com/home

  21. Sales tax is another regressive tax, the burden falls more heavily on the lowest income people, and yes, Dr. Wolff did say there were many more without mentioning sales tax. In my world I am eaten alive by income and sales taxation, but I also make less than $30k/yr., and am self-employed, so am keenly aware of how badly I'm being screwed.

  22. Repeal all taxes social security Medicare etc start over with a simplified transparent tax system im all for worker co ops and socialism in the workplace but I think our tax system is bloated confusing and is just as bad as major corporations…just think in 20-30 years if worker co ops are the new thing there might not be a need for welfare or extremely high taxes because wealth will be distributed amongst everyone the middle class would be back

  23. I am investing in the stock market but I am not rich. I am middle-class. The middle-class already pays most of the taxes, would you want to hit us with more?

  24. Yeah most people, especially trump supporters are really behind. They don’t know how broken our tax system has become. Most people vote on policies to get the rich richer and poor poorer! Super sad

  25. I am Norwegian and much of what is said here in effect. Pros: low cost higher education, an affordable fee for all health problems, a social security net(not prefect but enough for most people) and one of the easiest countries to go from rags too riches if you work hard. Start-ups companies have it easier.
    Con's: acompany like Apple or Google is almost impossible. A one billion a year income is almost impossible. Weak military. Non life threatening surgery have long wait lines. No Hollywood, Norwegian movie's crap. Government spending is wasteful on many occasions. Many people are never satisfied.

  26. This is what happens when government gets involved. Regulation brought nothing good at all, and the less government involvement the better off we'll be.

  27. Social Security is NOT a tax!
    It’s an involuntary WITHHOLDING for an involuntary retirement program that I will very likely be means tested out of ever receiving… forcing people to contribute to it without limit is manifestly unfair… liberal greed at its finest.

  28. 200,000 ISNT RICH! WE GOT A TINY RICKETY HOUSE ON MORTGAGE AND GOT ZERO SAVINGS AND DONT GO ON VACATIONS OR TO RESTAURANTS!

  29. This makes so much sense. Remove the cap on Social Security, tax all of the income. All of this makes sense. It boils down to the idea that if you give the rich tax breaks the idea that money trickles down. It doesn't. The ladt 40 years shows that. The rich got tax breaks on everything, we paid and paid, and finally, we have gotten poorer. We can buy less with our wages than we used to when the rich had to pay higher taxes. Our wages are stagnant. The gap between us, all of us, and the very wealthy has grown obscenely. You know what, a prosperous economy does not float ALL boats. It floats the yachts but leaves our tiny rowboats on a sandbar, stuck until we demand change. Bernie Sanders will get our boats going. Vote Bernie for the change we need.

  30. Like a tipical leftist this guy only tells half of the story :

    The investor did work for that money , he researched , studied and applied money which he had many times SAVED in order to invest and take a profit …..by the way he does it at his own peril and might lose everything …in the end if he gets a profit he is taxed …

  31. Even all your proposal are "unfair". You agree with property tax and cash you may own but the money you used to buy what you own and that which you saved, you already paid taxes on while you labored. So you're talking about taxing what you already own paid for by your 'after tax' earnings year after year after year. There is only one form of taxation that is fair and equal for rich and poor alike. That is abolishing the IRS which in itself would save billions of dollars and apply a tax at the same rate for everyone on every item purchased. No loopholes, no child credits, no deductions of any kind. Whether that tax is 20% or 50% it would be the same on a bicycle as on a car, yacht or Lear jet. Implementing this would bring in enormous amounts from the rich that they are experts at avoiding presently and which tools the government gives them to achieve, and drastically lower the burden on the middle and working class and even the poor. In fact I believe it would bring in enough revenue to eliminate poverty. Imagine how wealthy we would ALL become if we stopped meddling in other nations' affairs and ended regime change and wars. This insanity will never end if we allow these crimes to continue. We're spending trillions in the middle east yet we still haven't paid off the debt incurred by WW2 for Christ's sake

  32. The current system also exempts retirees, and the elderly who's earning potential has passed. There's tradeoffs in every deal..

  33. Trump tax reform was a joke and unfair. Lower income people and higher income people are in the same bracket. So, rich people pay less taxes. Tax reform won't impact to Trump because he doesn't pay taxes.

  34. Richard. The rich don’t pay more social security tax, because they would never get it back you moron.

    There is a cap on pay outs, so there’s a cap on payments.

  35. Richard you forget that the rich earn their money. It’s not your place to take away from someone that has earned their money.

    Inheritance tax? That money has often already been taxed multiple times. It’s taxed as income and it can be taxed over and over in investments. Your a total liar.

    AOC? She’s even more of an idiot than you!!!

  36. Thank you so much professor. Your videos are quick and easy for the average American to digest. You are a leftist hero

  37. A proposal to subject income > $250K to SS tax would increase SS revenues by $1.2T over 10 years.

    https://www.cbo.gov/budget-options/2018/54806

    Lifting the SS limit would be helpful, however most of the obscenely high income is not from wages but instead from passive income. In addition to removing a cap on SS taxable wages, all types of income (Dividends, Cap Gains, Rents) should be subject to it.

  38. Ok you forgot the morgage on a 500.000 home cost to payoff over 30 years is 1 Million dollars,so they charge twice.That is why rent is high and homeowners are broke using credit cards that charge 25% on fiat fairy money created on a keystroke .

  39. Taxes is mind control. Taxes only provide CONTROL to COMMUNISM. Taxes pay for nothing because the money is Fiat or TRUMP fake dollars.

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