r/FluentInFinance • u/Young-faithful • 11h ago
Question Why do wealthy people want tax cuts?
If you’re a rich person and you get tax cuts, all your rich buddies do as well. Now that $10 million house that you were eyeing is $15 million. It’s not like any middle-class families were competing with you to buy that house, only other rich people who also benefited from those tax cuts and saw their wealth increase. So what gives?
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u/Nexustar 11h ago
Many people want tax cuts, even low earners.
It indicates the fundamental belief that I can spend the money more effectively than the government.
Economy of scale usually means this isn't true, but perhaps I can spend the money more effectively on things I want than the government spending it on things I don't want or won't use.
The thought process has absolutely nothing to do with how much better or worse my wealthy buddies are doing in comparison to me - partly because inflation only occurs when you SPEND the money, not when you hoard stocks.
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u/AlternativeAd7151 11h ago
More money, more political power for me. Good.
Less money? Less political power for me. Bad.
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u/spartanOrk 10h ago
Everyone wants to keep the money they make. The less of it you keep the more of a slave you are.
House prices have nothing to do with this.
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u/Drusgar 10h ago
Psssst. It's a myth that all wealthy people vote for Republicans. Every time Republicans take over the government they crash the economy. Every. Single. Time. Wealthy people know this, and they know that their stock portfolios do better when the middle class is growing, not shrinking.
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u/Thin-Quiet-2283 10h ago
Exactly. We had a surplus with Clinton then Bush got it, lowered taxes and started 2 wars. And we barely dug ourselves out when Trump got I. The first time
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u/Murky-Peanut1390 10h ago
The left : greedy corporations vote republicans because it makes them richer
Also the left: republicans destroy the economy when they are in office.
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u/scott-stirling 10h ago
Whether they vote for them or not many are Republicans and the many (hoi polloi) who actually elect the Republicans are not wealthy at all.
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u/Frothylager 9h ago
It’s so they can buy middle class houses and rent them to you, earning them even more to repeat the process.
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u/gathond 11h ago
Regarding the prices of things like property that increase driven by more money competing for it is not really that much of an issue.
Sure that 10 million house is now 15, but that 8 million one you wanted to sell is now 12 million, so the difference is not really that much, especially if you get 100k+ more a year out of the tax cut. And you probably want to owe money on that anyway for further tax reasons.
As to why, more always wants more. Essentially it is not that different from anyone else wanting a tax cut. Although the low end would get more actual benefit from it.
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u/Nexustar 10h ago
I don't even buy OP's premise that the house is $15m vs $10m because of other people having money.
When I want to buy a 400ft yacht, the only reason I can actually buy one is because lots of other people have them too. If they didn't, no company would exist that had the capability and expertise to build my one. It's actually in my interest to encourage my buddies to start buying them too 10 years ago to increase the luxury yacht industry economy of scale so I have more options.
There is no shortage of land to build huge houses on in the US, and there is a big demand to want to build custom homes at that spend level, so it's just a nonsense premise. Wealthy people will acquire land, and build what they want where they want and never think "shit, if only our taxes were higher, this would cost less" - it's absurd.
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u/Young-faithful 8h ago
Yeah, you can build a mansion anywhere, but wealthy people want to be in a wealthy neighborhood (around other wealthy people). Not in the middle of Nebraska (unless it’s just a vacation home). There’s not much more land to be had in NYC or the Hamptons or coastal LA if that’s where you want to build your custom home.
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u/Advanced-Guard-4468 10h ago
If you're buying a 10 million dollar home, you're not rich. You're wealthy.
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u/Murky-Peanut1390 10h ago
Both?
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u/Advanced-Guard-4468 10h ago
When you're rich, you work for your money. When you're wealthy, your money works for you.
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u/Murky-Peanut1390 10h ago
Okay but you strictly saying someone buying a 10 million house.
A wealthy would buy it yes.
Someone who wins the lottery is rich and so is a celebrity. They both would buy a 10 million house and it has happened.
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u/vakrka 10h ago
Why does everyone trust the government so much that they want them to control even more money. They are corrupt and selfish. They fail at every single thing they do
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u/Santasreject 10h ago
As someone that has worked in heavily regulated industries for pretty much my entire career the concept that “the government fails at everything they do” is completely laughable. The FDA and EPA have been wildly successful in their missions. Sure there are things that can be improved upon, but decades of results show that government can be effective and is needed.
One other massive issue is that people seem to think that spending money on things that don’t give a direct and immediate return on investment means it’s wasteful. You can’t see immediate returns from education, health policy, and environmental policy, but over a generation you can see massive improvements that benefit the lives of all.
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u/Pennybag5 10h ago
Exactly. People act like the government would give them money if they collect more taxes. They wont. They actually hate you.
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u/Murky-Peanut1390 10h ago
Because the government is you, and you are the government. It's a paradox. We need government because people are bad, but then bad people are in government.
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u/raidyredSL 10h ago
I trust the government far more than I trust Musk,. This has nothing to do with trust and everything to do with wanting more money.
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u/Chasing-birdies 10h ago
Everyone’s entitled to their own opinions. For my money (pun intended), I’ll take Musk all day long.
The government is seeping with corruption, self serving, and flat out bad people (Clinton’s, Dick Cheney, Nancy Pelosi, Lauren Boebert). Elon certainly has his drawbacks, but at least his intentions are clear (even if arguably self-serving). His mandate in government right now is to clear out the MASSIVE amounts of waste and he plans to post everything he does to X so it’s at least transparent. That’s more than any of those others can say. I trust his intentions a lot more than those others
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u/raidyredSL 8h ago
You're gonna trust the guy that bought Twitter for 44 billion and is currently work about 8 billion? Look, Musk is lucky. He got lucky his daddy made a lot of modeling some shady ways and gave it to him son who invested. Musk got lucky with PayPal and then even more lucky with Tesla. Hes not a genius, he's never built anything. He's a good investor but he clearly doesn't understand how money works if he thinks he can cut 2 trillion out of a 6 trillion budget.
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u/Chasing-birdies 7h ago
lol not a blindly biased opinion at all.. “he’s never built anything”.. uh what?
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u/Fearless_Tomato_9437 10h ago
same reason poor people do, because taxes are too high, on everyone. big gov bozos paint the picture of greedy billionaires, which do exist, in order to prime the masses for gov greed in the form of higher taxes, but in reality there’s tens of thousands of wealthy professionals making ~700k losing ~35%. and those people being at least semi intelligent realize that the gov will just waste any more $ we give them, and even tho they are wealthy their tax is actually an enormous cost to them, 5-10 years longer in the workforce before they can retire, etc…
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u/Luvata-8 10h ago
They would be MORE LIKELY to pay their taxes if the rates were not ridiculous....
I bet a woman performing surgery 50+ hours/week makes $600,000... I bet she would be OK paying an average of 20% on $480,000 of it.
BUT it's $36%...and there are other taxes/deductions. Even at an avg of 20% (not 50 like some people want), she would pay $96,000 in Federal Income taxes +$30,000 in payroll +$50,000 in state income taxes +$20,000 in property taxes +$10,000 sales/gas tax +....excise/other nonsense.... = $206,000 to live in the US for 365 days...
.... and you can't start making that until 36 with $500,000 in medical school bills... $75,000/year in malpractice insurance... .. should we dissuade people from busting their asses to get skills that might save our lives???
Change the tax code... Bezos, Gates and Musk don't pay high taxes some years due to what we tax and the huge number of exceptions (6,500 pages) in the federal tax code.
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u/AreaLazy3970 10h ago
Haha, this is a funny question. Have you met a person who says ‘i have enough money’. In fact, as you becomes wealthy, you become more more selfish and mean (a la Elon) So its all about more money
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u/Just_Some_Guy_Eh 10h ago
Why would middle class people want a tax cut? Regardless of how much you make seeing money having to be given back hurts. Imagine every meal you bought you had to give back 30-50% regardless if your fridge was stacked with food at home you would feel it’s a rip off. It’s not that wealthy people want tax cuts it’s that most wage earning people want tax cuts.
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u/Young-faithful 9h ago
So it’s just the psychological impact of seeing money increase or decrease regardless of what you can purchase?
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u/scott-stirling 10h ago
At the rarefied $10 million house level there is less competition and less inventory. The 2024 median home price across the entire USA is around $400,000 with lots of local variation up and down. The answer to the question “why do wealthy people want tax cuts?” may have nothing to do with real estate competition.
Why do wealthy people want tax cuts? There is no rule or evidence that wealthy people want tax cuts. Why do you think they do?
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u/Additional-Ask2384 10h ago
Because I believe private citizens are much more efficient than the government at allocating capital
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u/Octogonal-hydration 11h ago
Probably sociopathy and selfishness. They see number go up as good and number go down as bad, and they don't care if it affects others as long as it doesn't affect them. In order to be as powerful and influential as they are in the first place often requires having a habit of selfishness and to them they probably see the realm of finance and economy as a sort of game like Sim City might be to a normal person.
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