For every $1M you have in the bank, you are required to employ 1 person @ a minimum salary of $50k/yr. Failure to do so will result in a $100k fine per $1M per year.
Posted by NukeDC@reddit | CrazyIdeas | View on Reddit | 115 comments
lordduzzy@reddit
You either over estimate how much a million dollars is, or how much 50k is.
If you put 1mil in a high interest CD because you're retired and just want to live off the interest, you're only making about 40k a year, after taxes probably closer to 30k. maybe 50-60k with stocks or other investments. Maybe you can hire them to make you more money, if you're business savvy, but realistically most of these people are just good at saving. They will just burn through their retirement faster and hurt the social security program.
WIth out first having social medicine, every one of these people will also be uninsured and contract employees. From the 50k "paycheck" they will be down to \~40k after taxes and their take home will be $32k after insurance. Decent insurance costs about $7-800/month in the US out of pocket.
I'd rather have tax breaks on returns from small businesses, and social medicine. Get rid of income tax, the rich people aren't paying it anyways, and instead do higher sales tax.
Ambitious_Wolf2539@reddit
I'm sorry, I disagree. The base concept is bad, not the management.
This is more of a fever dream than anything that has even any way to be made feasible.
lordduzzy@reddit
I get that. I was meaning more the concept of "If you have over x amount, then you will see tax/fines if you're not utilizing some percentage to promote the economy or invest in small business." At the core level it's not too unheard of. I'd just rather see other solutions.
Ambitious_Wolf2539@reddit
but realize that's occurring *already*. If you're worth billions, you're spending millions on financial advisors, etc etc.
The rich don't just sit on their money casually.
To be clear I'm not advocating for billionaires, but it's what is the problem with this idea. It's already being done.
lordduzzy@reddit
Oh I'm definitely with you there. Honestly that's why I lean in favor of other solutions.
Trickle down economics is bullshit though. The ultra wealthy aren't contributing to society in a significant way. They pay less in taxes that they should and most of their 'contributions' are more about avoiding taxes. Reassessing tax code would do more than they are now. What they are paying isn't creating more opportunities in a meaningful way, just another few bank employees at another massive chain that underpays employees.
Captain_Lou_Albano@reddit
Rich people pay basically ALL of the net income taxes in this country ALREADY though. The top 1% of income earners pay more in income tax than the bottom 90% COMBINED.
You should stop listening to AOC for economic guidance.
Grease_the_Witch@reddit
higher sales tax hurts the poorest the most
thatguy425@reddit
People would just move the money out of banks and into money market accounts. The only downside is it now takes me 2-3 days to get my money, oh well.
PrivacyPartner@reddit
This. People who come up with these crazy ideas don't actually have any experience or knowledge. They just think 1 million sounds like a lot and 50k is a good salary so let's go for it without propertly thinking it through.
This also ignores the fact that the median salary in the US is 48k, and if you're able to scrimp and save and invest your way to 1 million over 40ish years through 401k or other retirement vehicles without any major windfall, then youre just being punished by now having to give away decades of your life's work.....just because...
urbanviking318@reddit
With a caveat that businesses are no longer allowed to pass sales tax on to the consumer. It genuinely makes no sense that we pay their tax for them when they're the ones gaining revenue from the transaction.
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RevolutionaryScar980@reddit
i agree with solutions- but i personally think step 1 to solving the US tax issue is that everything should be income. income is income is income. i do not care how you got it.
Then we can figure the rest of this out.
lordduzzy@reddit
I would be on board with this, except the issues with LLCs and businesses. A personal income counts all money, but businesses get a write off for offices and cars etc. so if we dropped sales tax, anyone that know better would still filter their money through a company. I pay a percentage of everything but millionaires pay a percentage of what they can’t hide, while living in a mansion that’s a business expense.
Did you have a solution to address that?
RussiaIsBestGreen@reddit
Sales tax falls disproportionately on lower-income people, so if anything we’d be better off with the inverse: higher income tax and lower sales taxes. Even better would be to treat all income more similarly (something to accommodate the boom and bust cycle of some non-salary income, but otherwise it’s all on the same tax schedule).
lordduzzy@reddit
Insurance costs and income tax also fall disproportionately on lower incomes, literally everything involving spending money does. But it's not a flat 20% tax on everything, food, housing, utilities are taxed at a much lower rate. They would end up saving a ton if they are in the 30-40k range. Not taking the extra 20% out of their paycheck will make it much easier to pay an 20% tax on the next gaming console, or if they are buying a new blender. We'd probably would buy more responsibly too, if it was double the price and 20% tax, better to repair instead of replace.
The difference is made up by the billionaires paying the 20% when they build a fucking space ship.
RussiaIsBestGreen@reddit
At least in the US, income taxes are progressive and are significantly lower as a percentage on lower incomes. At 30k federal income taxes are 12% (ignoring deductions or credits, which will significantly lower it) while the highest bracket is 37%.
Property taxes might only be a few percent of the value of a property, but they’re every year for potentially decades, so relative to the price of the house, they could easily be far more than 20% in aggregate.
Sales taxes will hit clothing and shoes, materials for home repairs, and yes, entertainment. I don’t think taxing poor people more on gaming consoles is going to make them make better decisions. Those are potentially a very good value, as they can last for years and even still have some resale value. I don’t think taxing think incentives for repair are good, but is put that on the manufacturers to make more durable and repairable goods, rather than making everything more expensive and hoping it leads to better decisions. We’re dealing with the boot theory in economics here, after all.
That rocket isn’t going to be taxed. It’s a business expense.
lordduzzy@reddit
In that 30-40k range, it should only be about 4k annually paid in tax at 12% (omitting the first 12k which isn't taxed) Which is definitely less than I was thinking initially, but they are still paying \~7% for sales tax on top of that. (lower for food, depending on the state). At 30k in spending the 7% only adds up to be $2k a year. So at the moment it's rounded to about 6k combined, and if we triple the sales tax, it's fairly similar. The only notable difference is tax credits. But those could be issued in another way, I'm sure. One that doesn't require a form that you can go to jail for filling out wrong.
There isn't a perfect solution to the problem, but I do know that it's harder for billionaires to dodge sales tax than it is income tax. If it pumps more money into social programs then we'd be much better off.
The rocket may be a business expense, but each part, service, and raw material they paid for would be taxed higher.
therin_88@reddit
Well, definitely a crazy idea.
Since it would bankrupt you within a few years.
You're effectively requiring anyone with $1M or more to start a business. Which means they have to pay for accounting, insurance, employment taxes.
You may as well just force everyone to donate $50k/year to a charity -- they'd lose money much less quickly that way.
Mah_Name_Jef@reddit
You'll need to be making like 12-15% interest on that million every year to account for minimum salary, taxes, inflation, some interest for you. This idea is quite crazy and ungrounded.
goalie65@reddit
Why do people start with millionaire problems, and it escalates to billionaires so quickly. There are so few billionaires compared to millionaires.
me_too_999@reddit
So my pension, which has just $1 million and produces enough income for ONE person to retire, does what?
What about inflation?
That $1 million will be the equivalent of $250,000 in a decade. That's not even enough to hire someone at minimum wage.
thatguy425@reddit
Your pension isn’t in the bank. It says 1 million in the bank.
me_too_999@reddit
It's literally in a pension fund.....wait for it......in a bank.
thatguy425@reddit
Holy shit, no way!
lordloldemort666@reddit
You pay yourself a minimum of 50k duh. It says one person, doesn't mean that can't be you.
me_too_999@reddit
That works.
Caleth@reddit
The better solution here is treat capital income as taxible on the same scale as labor is. You're paying on the earnings, and then past a certain scale say $50 million you start owing a wealth tax at some percentage say 2%. It doesn't eliminate your annual growth rates which typically is 7%.
Additionally go back to the 80's tax code for how we treat things like wealth taxes and money held by corporations. Make Stock Buybacks illegal again.
There's better ways to execute what this person is trying to do with less hit to the people that can't really afford it.
The problem is when you're 20 and struggling to make ends meet $1mil sounds like a lot, but when it's what you have to survive the next 20 years on and pay medical bills with and and and it doesn't look so large, because it isn't and it probably took you decades to accumulate all that cash.
The people that need to have their assets looked at hard are up a few order of magnitude from where this person is aiming.
RevolutionaryScar980@reddit
i normally talk about a 100m wealth tax- since i am going to be honest; I have never known anyone with a net worth over 100m. I know a bunch in the 40-80m range. They are mostly founding named partners at law firms that did really well for themselves (and are mostly in their 60ies and up now). For lawyer context- 10 mil net worth is a sucessful solo/very small firm attorney nearing the end of their career. 20-30 mil is partner at large firm (again nearing the end of their career). The guys i know who are in that boat are really in the first category but at least 2 of them bought their building in the 70ies and the building they are in drove the ship more than the law firm they had.
So really 100m is an amount i can comprehend how you generate that much money. North of that is where my brain start to just assume you are a super villian.
Fireproofspider@reddit
It's a crazy idea, not necessarily a good idea.
But realistically you could play with the numbers (make it 10M instead of 1M for example) or you could play with the system. As the bank is required to invest your 1M into something that creates at least 1 job even though you technically still have your money.
Yung_Oldfag@reddit
I'd imagine 1 or 2 mil in stocks creates at least 1 job. If it does then the rich are all set because a ton of their money is in stocks. If 2 mil can't do it already we have big problems.
JustOnePotatoChip@reddit
You aren't thinking like a proper tax evading wealth hoarder I mean tax code fine-print exploiter. Your pension usually isn't in a bank :)
BboySparrow@reddit
How does this work with assets? Plenty of people in HCOL areas own a $1M house but don't have $1M in the bank. Do they still need to employ a person?
If someone's about to reach $1M, they would instead buy some gold so they no longer have $1M in the bank and avoid it again.
thatguy425@reddit
Well it says in the bank so anything else would be fine. Keeping a million in a bank is kinda of dumb financially anyways.
FlounderingWolverine@reddit
What about someone with a 401k account? Let’s say I’m a W2 worker working a mid-level business job in the Midwest. It’s absolutely realistic for that person to accumulate over $1M in their 401k in their lifetime. Do I suddenly have to pay someone $50k to be my servant or something?
Stuck_in_my_TV@reddit
A 401k is in the stock market, not the bank
_Diggus_Bickus_@reddit
Well basically no one has 1 million dollars in the bank. Even people worth 10-50 million wont
lapeni@reddit
You’d be surprised. My ex was a banker and she’d regular meet with boomers who had $1-3 million just sitting in a checking account.
Granted I think it’d be less common for someone with 10-50 because they are likely more financially literate.
JawtisticShark@reddit
Some bank accounts will pay 4-5% interest. But make this rule and people will just immediately exchange this for stocks or CDs or some other store of wealth. It’s a worthless rule
roblolover@reddit
a lot of people will have 1 mil+ especially streamers, youtubers, people who own successful sales business
LittleBigHorn22@reddit
They still don't keep it in the bank. You keep it in invested in something.
roblolover@reddit
sudden influx of money especially in those unsure of what to do with it, coupled with wanting to spend, there’s probably at least 100,000 individuals with 1 mil+ in the bank
LittleBigHorn22@reddit
Not for 1 year worth. And all they need is to employee 1 person to avoid it even if they did 1 year. I think at most this effects 10 people in the us.
roblolover@reddit
most people with 1 mil would already have employees anyway
LittleBigHorn22@reddit
Yeah no one reached over a million without investing it somehow. Musk and bezos might actually have that much sitting in the bank because its chump change to them, but they obviously employee enough people to cover the amount in the bank then.
ActiveLie3023@reddit
It doesn’t. It’s a stupid fucking half-baked idea this moron shat out on the internet.
_Diggus_Bickus_@reddit
A home owner saving for retirement and to put 2 kids through college can pretty easily hit a million just there. Like a normal suburb engineer. They don't need staff
Enough_Rub_3817@reddit
That's 5%... quite a lot
Trick-Property-5807@reddit
Based on currency and proposal, I assume we’re talking the US.
Requiring employment to be able to exist is actually the craziest part of this idea. What if….your ability to meet your basic needs wasn’t tied to the need to work?
coyote_rx@reddit
Can I hire myself?
AugustHate@reddit
tf am i gonna do with 50k
Soft_Cranberry6313@reddit
Why?
bat_man__@reddit
Having 1M and making 1M are very different things
Reelix@reddit
Where I live, $50k is the million equivalent, so let's adjust those numbers!
For every $50k you have in the bank, you are required to employ 1 person @ a minimum salary of $2.5k/yr. Failure to do so will result in a $5k fine per $50k per year.
Sounds good?
OkContest2549@reddit
This is a dystopian fiction premise, for sure. Great writing prompt for a creative writing class.
ZealousidealPound460@reddit
You’re the reason the founding fathers fought the revolution against tyranny of the Brits
SoloWalrus@reddit
This is basically the purpose of inflation - convince people to stick their money back in the market rayher than sit on it and let it depreciate.
xtravar@reddit
Thank you! It's rare to see someone advocating for inflation as a way to mobilize wealth. Which is basically what it is - a tax on stagnant wealth.
Now as for the ironic answer to OP's question: do my dependents count as employees?
rco8786@reddit
What does it mean to “have 1mm in the bank”?
The answer to that question is extremely complex, and not easy to determine.
Illustrious-Gas-8987@reddit
Shouldn’t be in the bank, 50k is 5% of 1 mil…
It should be for every 1 mil you make a year. That would be much better, it would be more like a tax that goes directly to creating a job, although 50k isn’t much for someone to live off of
Periwinkleditor@reddit
Doesn't say who I need to hire, nepobaby time!
DrBearcut@reddit
Define “in the bank” - cause you typically don’t keep that much in a savings account.
onyx_ic@reddit
Rich people dont keep their money in the bank. They have it in assets and stocks, investing in building wealth.
RapunzelLooksNice@reddit
Fine, but rich bastards do not have money, they have shares… And they borrow money from banks with those shares as collateral.
Appropriate_Rock1278@reddit
Unfortunately I think this will result in millionaires "hiring" their family and friends more than anything else. Once you get up to the hundred million to billion range yeah it could be useful... Or you just keep a harem popping out babies...er I mean new employees, constantly 😅
f_GOD@reddit
for every million you make there could be a $50k tax that goes 100% to a fund used to hire people to complete public works projects
Training-Bake-4004@reddit
This is just a wealth tax by another mechanism.
I’m not inherently against wealth tax, but this particular example is pretty wild (and bad and dumb).
canned_spaghetti85@reddit
So…. a ratio of 20 : 1
That’s what you’re proposing?
Fine. I’ll hire them.
My initial $1 million minus $50k = $950,000
Since they NOW work for me : Then resulting increase in revenue, for which I expect their labor to generate for me, should be at least $164,325.
That way.
Because of their $50k salary (tax deductible), employers is expected to pay match 6.4% contribution to social security on the employees behalf… which is $3,200 (also tax deductible)
$164,325 revenue - $50k salary - $3,200 contributions = $111,125 taxable profit.
Corporate tax is 28% , so I owe $31,115 to IRS… and keep $80,010.
Add that to my remaining bank balance $950,000, equals $1,030,010 at years end.
Which is fine because SAY if annual inflation is 3% anyway, then that original $1M would have lost $30k of its origin buying power… (thus the additional $30,000, needed to keep up with inflation)
Remember, the ratio is 20:1 , your rule.
So next year my $1,030,010 would imply I need to continue employing that same person for $51,500 salary.
Their $50,000 last year salary, to keep up with 1 year inflation at 3%, would have been $51,500 anyway.
Cool… so everyone’s happy, as it worked out anyway.
In fact, your proposal mandating me to hire another, actually helped preserve my fortune.. thereby insulating it from inflationary forces otherwise unavoidable anyway.
AndySixxLogger69@reddit
Use multiple accounts with $999,999 max in it
Commercial_Win_9525@reddit
Well.. math doesn’t math. There aren’t near enough unemployed people to even cover that. Even if you wanted to use the entire population in America there wouldn’t be enough people.
Paleodraco@reddit
I can see where you're going. You can't just sit on your money. Paying someone puts it back into the economy and, if you don't, you have to pay the fine that presumably is then used for social services.
Someone will immediately poke holes in this saying the stock market already does this or that you're already buying goods and services so why should you do this. Or that you can't be forced to spend your money. I get those arguments, but specifically for money that's just sitting in a checking account or low interest savings account, I like the idea.
duskfinger67@reddit
This doesn't really happen, though. The money that appears to be 'sat' in your account is actually being invested by the bank or has been loaned out to someone else.
The only money that is truly doing nothing is cash.
The actual value it would add is ensuring that the money is invested in your country, which is always a good thing. That said, there are about a million other ways to stimulate local investment, so I don't think this overly convoluted one is required.
lapeni@reddit
It’s crazy that people just sit money in a checking account (normal savings might as well be checking imo). People just handing the bank money.
My ex worked at a bank. I was shocked how often she’d tell me she had a client that day that had a 6-7 figure checking account balance
natesplace19010@reddit
Some people are so rich (Net worth over 10 million) that t he ey don’t care. They’d rather keep a million in checking so they go go buy cars in cash, or take extravagant vacations without worrying about moving their money around. They probably already have it set up so that a large portion of money goes right to investments and the million is just their regular use stuff.
lapeni@reddit
No. The type of person you described is insanely rare.
The people with $1-3M in a bank account are financially illiterate boomers who were successful and saved a lot.
+$10M people have their money invested. Transferring money from a brokerage account to a checking in order to buy a car is instant. Everything else on that list gets bought with credit cards. Now I’m sure they keep more in their checking than people with less money, maybe 250k. But they’re not throwing away a minimum 5% return on millions for a minor connivence
duskfinger67@reddit
This doesn't really happen, though. The money that looks like it is 'sat' in your account is actually being invested by the bank, or has been loaned out to someone else.
The only money that is truly doing nothing is cash.
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LegendOfKhaos@reddit
I like where you're going, but this should be more of a rule for businesses and based on an economic metric depending on the type of business.
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Seaguard5@reddit
I like this but with a higher cap.
Like $5M.
You have any idea how little $1M actually is these days?
You certainly can’t retire off it alone… $5M is more reasonable
James-Dicker@reddit
Nobody has a million liquid in the bank.
355822@reddit
Every dollar over $10 million is a stroke with a switch in a public spanking, for every year you have a total value over $10 million. IMO. Make it embarrassing and painful to hoard resources. Broadcast it on the internet for anyone to watch, unrestricted.
spiffiness@reddit
That $1M "in the bank" is already creating jobs. Even if it were just in a checking or savings account, the bank would be loaning out the vast majority of that money to other people who need the capital for their small business or other financially productive purposes.
But since the FDIC only insures the first, what is it now? 200k? in a bank account, most people with $1M of investible assets don't have it sitting in a bank account. It would be in an investment portfolio, providing capital assets for productive businesses.
No one's doing a Scrooge McDuck swimming in a pool of gold coins inside their private vault.
Most people that have $1M of investible assets have most of it in their 401k or other retirement investment portfolio, where it is invested via mutual funds that buy stocks and bonds, which provides capital for companies to buy the equipment and facilities they need to give people jobs producing goods and providing services.
HistorianOrdinary833@reddit
Do you really think people will keep cash in banks if this was a law?
Bulky-Leadership-596@reddit
So you realize that people like Musk, Bezos, Gates would be on the hook for at most 2 or 3 employees each, right? Nobody has tens of millions in the bank.
What billionaires do have are shares of ownership in companies, and those companies are already employing people.
The only people this harms is maybe retirees who cashed out their 401ks to avoid risk in their last days.
Merican1973@reddit
So if I work hard and accumulate $1M plus in savings I have to give it away?
Seems fair 🙄
Ok_Enthusiasm_300@reddit
Typical Reddit user
This is such a silly idea
tomqmasters@reddit
So you want to punish people who have not done anything wrong?
Better_North3957@reddit
Yep typical Reddit
Ok_Enthusiasm_300@reddit
Literal peak Reddit
mosquem@reddit
Other people have stuff and I WANT it, damn it.
Ok_Enthusiasm_300@reddit
So how do people who don’t own a company employ someone exactly?
This may be the worst idea I have ever heard, and you clearly don’t realize that 1 million isn’t as much as you think it is.
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Smoke_Santa@reddit
why, what is the reason for this justification? Can I hire my mom for 50k? Why should people making money be punished?
Yellow-Umbra@reddit
Literally just tax billionaires. $1 million is not even a lot of money anymore. Plus what are all these retirees going to pay the employees to do? Definitely a crazy idea
SnooOranges3696@reddit
Do kids and a housewife each count?
Jaymac720@reddit
Money in the bank and wealth are different things
IdubdubI@reddit
I’d just hire myself.
shezadaa@reddit
Most people dont have 1M in their bank account.
rednax1206@reddit
The crazy law idea isn't supposed to affect most people.
lifeslotterywinner@reddit
Not sure why you have downvotes. Seems simple enough.
DukeRains@reddit
I would hire one person to make sure I never get over 1.99 million dollars in my bank account.
Easy.
handingstage@reddit
You’re also missing that it takes more than just the 50k of to employ someone once you factor in taxes and any benefits. Itd be anywhere from 54-64k
PerspectiveViews@reddit
Who has $1 million in a bank? Buy treasury bills at least for a better yield.
ancientRedDog@reddit
Just tax them more. Especially anyone 50mil plus.
Sad_Watercress_7930@reddit
There would need to be a lot of rules around this... Or else multimillionaires would just register their mistresses as 50k hookers and probably end up saving money
flopsyplum@reddit
People will transfer the money from their bank to their brokerage..
bourj@reddit
I think $1 million is too low--$50 k is 5% of their base, which is way too much. But I think $2 million would work just fine.
Dawidian@reddit
eh. theres hundreds of things that could and should be done to fix economic inequality before this
Melodic_Plate@reddit
I don't get this. So just get some one to make you more money,?
Tbf this just shuffles automation but still work as normal business.
BanEvador137@reddit
People would just hire their families
Melodic_Plate@reddit
Yes if they only care about nepotism. But people with only 1 million could make use of that employee to make more money. Like hiring an assistant to schedule meetings, clients or customers depending on the niche.
A marketer to get more customers. Employees for the business.
Only thing I don't agree with is of your a farmer. Yes a farmer would be helpful but the equipment and land itself could cost alot but not produce as efficiently to hire a person per millions worth.
TrekkiMonstr@reddit
If you want a jobs program, just create a jobs program. This isn't crazy, it's just weird.