Wealthiest U.S. executives paid little to nothing in federal income taxes(thestar.com)
thestar.com
Wealthiest U.S. executives paid little to nothing in federal income taxes
https://www.thestar.com/news/world/us/2021/06/08/wealthiest-us-executives-paid-little-to-nothing-in-federal-income-taxes-report-says.html
140 comments
I'm a little baffled why there have been all these articles of this category recently. It's not news that you don't pay taxes on invested assets you hold and don't sell. That's how it works for everyone who invests their savings. This isn't a 'tax-avoidance' tactic - it's just what owning something is. Are we really advocating for a world where you are taxed just for appreciation? Maybe we are but at least be honest about it - that this would be a radical change from the current concept of ownership.
I'm all for taxing the wealthy more, but I personally don't want to pay taxes yearly on an index fund I've held for 10 years and don't plan to sell until I retire, at which point I will pay taxes on the gains.
I'm all for taxing the wealthy more, but I personally don't want to pay taxes yearly on an index fund I've held for 10 years and don't plan to sell until I retire, at which point I will pay taxes on the gains.
Previous discussion of this ProPublica story rightly pointed out that there was too much focus on billionaires (legally) not paying taxes while their assets are appreciating (but not yet sold), and not enough focus on the fact that often taxes aren't even eventually paid (a grey area mix of legal/illegal).
From the original ProPublica article [0]:
>It’s clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.
>Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultrawealthy’s estate planning, showing hundreds of these trusts.
Other folks pointed out other examples of charitable self-dealing, where a wealthy person may give their money to a foundation, and then travel the world on behalf of the foundation, or have the foundation pay for family-owned businesses to do work under contract, etc. Some pointed out that there are laws against this sort of thing, other folks pointed out that enforcement of those laws is rare and difficult.
So, should we step up efforts to try to enforce today's rules that haven't seemed workable in the past? Or do you want to do the easy thing and have a wealth tax on things like securities?
0: https://www.propublica.org/article/the-secret-irs-files-trov...
From the original ProPublica article [0]:
>It’s clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.
>Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultrawealthy’s estate planning, showing hundreds of these trusts.
Other folks pointed out other examples of charitable self-dealing, where a wealthy person may give their money to a foundation, and then travel the world on behalf of the foundation, or have the foundation pay for family-owned businesses to do work under contract, etc. Some pointed out that there are laws against this sort of thing, other folks pointed out that enforcement of those laws is rare and difficult.
So, should we step up efforts to try to enforce today's rules that haven't seemed workable in the past? Or do you want to do the easy thing and have a wealth tax on things like securities?
0: https://www.propublica.org/article/the-secret-irs-files-trov...
Personally, I think if we're going to have a discussion on this, it ought to include some element of "why does the federal government keep getting more expensive at such an amazing rate?"
It's astonishing to me that (in constant dollar terms), the tax receipts of the federal government have doubled since the height of the Cold War in the 1980s and are three times what they were during the Apollo program. They are estimated to increase by another third in the next five years.
It's astonishing to me that (in constant dollar terms), the tax receipts of the federal government have doubled since the height of the Cold War in the 1980s and are three times what they were during the Apollo program. They are estimated to increase by another third in the next five years.
Makes sense to me given the ballooning healthcare costs and Medicaid/Medicare/VA, and then the aging population + social security underwater.
The U.S. defense budget alone is 750 billion.
The defense budget alone is bigger than all but 19 other countries GDP!
And that's only like 1/10th of the total budget.
(I'm using rough estimates so please correct me if I'm off)
The defense budget alone is bigger than all but 19 other countries GDP!
And that's only like 1/10th of the total budget.
(I'm using rough estimates so please correct me if I'm off)
I think it's best to simplify when possible. Just get rid of the charitable tax deduction or cap it at a certain amount.
But why? Do we not want to encourage charitable deductions?
Removing the deduction doesn't even penalize the rich, it would just hurt charities
Removing the deduction doesn't even penalize the rich, it would just hurt charities
“ It's not news that you don't pay taxes on invested assets you hold and don't sell.”
Unless, of course, we’re talking about the only meaningful asset an average person might own -their house- then we tax its assessed value every year.
Unless, of course, we’re talking about the only meaningful asset an average person might own -their house- then we tax its assessed value every year.
>-their house- then we tax its assessed value every year.
It depends on how the property tax is implemented. Is California's property tax with Proposition 13 a true "wealth tax" that people mentally think of in this thread?
Here's an example of a property in Silicon Valley being assessed at $146k but the real market value was $3+ million. The assessed value wasn't readjusted to the higher market value until it was sold in 2016: https://imgur.com/a/0OvqADN
The surveys I saw say majority of Californians (~64%) favor Proposition 13 and it's politically unpopular to repeal.
It depends on how the property tax is implemented. Is California's property tax with Proposition 13 a true "wealth tax" that people mentally think of in this thread?
Here's an example of a property in Silicon Valley being assessed at $146k but the real market value was $3+ million. The assessed value wasn't readjusted to the higher market value until it was sold in 2016: https://imgur.com/a/0OvqADN
The surveys I saw say majority of Californians (~64%) favor Proposition 13 and it's politically unpopular to repeal.
And the reason why we have prop 13 is because there was a period in which housing values in California increased dramatically, and we literally had seniors having to sell the homes they'd lived in for decades, because they couldn't afford the newly-assessed property taxes.
On the other hand, cap gains on the sale of your primary home are taxed extremely favorably.
Fair enough - however, what would the equivalent of this look like for invested assets? We are basically forced to sell to cover every year to pay taxes on accrued value?
Additional fun occurs when a government official stops by every year to take an inventory of household items.
Of course, there's always the problem that a lot of nominal asset appreciation is due to inflation.
Of course, there's always the problem that a lot of nominal asset appreciation is due to inflation.
So... imagine there's some fictional ETF that rises at exactly the rate of inflation. At the end of a year, your $100k investment is $102k. Still buys the same number of Big Macs, potatoes, whatever.
You then have to pay tax on the $2k gain. You've lost purchasing power. Let's say your balance is now $101,800.
If you looked at this as monetary policy (rather than tax policy), wouldn't this essentially be a negative interest rate? Over time, wouldn't inflation rise exponentially?
Now, suppose the ETF tries to pace inflation + tax. Where does this extra money come from? Debt? Thus more inflation.
I find it interesting that the poster from Denmark considers it no big deal; Denmark has had negative interest rates for several years. That may make sense in a small, aging country that needs to stave off deflation, but the US currently has the opposite problem - inflation. Wouldn't a tax on inflationary "gains" send it into hyperdrive?
You then have to pay tax on the $2k gain. You've lost purchasing power. Let's say your balance is now $101,800.
If you looked at this as monetary policy (rather than tax policy), wouldn't this essentially be a negative interest rate? Over time, wouldn't inflation rise exponentially?
Now, suppose the ETF tries to pace inflation + tax. Where does this extra money come from? Debt? Thus more inflation.
I find it interesting that the poster from Denmark considers it no big deal; Denmark has had negative interest rates for several years. That may make sense in a small, aging country that needs to stave off deflation, but the US currently has the opposite problem - inflation. Wouldn't a tax on inflationary "gains" send it into hyperdrive?
Eh - yes? What would be the problem with this?
On a practical level, if this was implemented, I am sure the market would quickly create funds that payed out at exactly the right level to fund this. Here in Denmark, ETF's are always taxed this way and any losses can be carried forward.
The one area where this can get problematic is things like a a big family business that is not providing enough profit to pay the tax. Such a business would end up getting liquidated, which makes sense from a free market perspective, but would make for some great "taxman killed family business"-headlines.
On a practical level, if this was implemented, I am sure the market would quickly create funds that payed out at exactly the right level to fund this. Here in Denmark, ETF's are always taxed this way and any losses can be carried forward.
The one area where this can get problematic is things like a a big family business that is not providing enough profit to pay the tax. Such a business would end up getting liquidated, which makes sense from a free market perspective, but would make for some great "taxman killed family business"-headlines.
Governments just spent the last year killing small businesses to the benefit of large ones, so this would help them finish the job.
Personally? I pay my wealth taxes out of my post-tax income.
Property taxes fund local services and act as pressure for property to be put to productive use; they specifically exist so property isn’t used solely as a speculative investment. I’m not sure what a tax on general investment would do but discourage speculative investment in general.
“they specifically exist so property isn’t used solely as a speculative investment”
Judging by the increasing amount of US housing stock owned by investment firms, this doesn’t appear to be working.
Judging by the increasing amount of US housing stock owned by investment firms, this doesn’t appear to be working.
Ya, but think if we had no property tax like China, it could be a lot worse.
Does China have a significant problem with supply-restricted housing being bought up and turned into rentals by investment firms?
No, rents are too low to be profitable (a $1 million apartment will only rent for $2k/month), and renovations decrease the value of the property (in China, you’ll often gut the apartment and redo the interior after purchase). They instead keep the apartments empty in the hope of selling them for a profit later.
Why? If you don't make any money you wouldn't pay any taxes. If you make a fortune you pay some taxes.
Property is a communal asset with communal benefit. Sitting on say an apartment in a big city and not using it means you are depriving someone else from using it to do a job, buy coffee, create economic and social activity. Empty apartment buildings do no one good.
Indeed, taxes exist to keep the middle class down, we should switch to a flat tax.
I’m not sure how regressive taxation is going to improve the middle class’s lot?
A flat tax on what? Income? Wealth?
I’m not against the idea so long as we make it progressive at the very bottom (though I understand my motivations there are explicitly moral ).
I’m not against the idea so long as we make it progressive at the very bottom (though I understand my motivations there are explicitly moral ).
Plus you get the fun of defining income.
Gross sales of some product? or do you get to deduct it's cost?
Is trading labor (for instance, two independent farmers helping each other) considered income?
Gross sales of some product? or do you get to deduct it's cost?
Is trading labor (for instance, two independent farmers helping each other) considered income?
On money held in bank accounts. Call it a negative interest rate. Apply it to bank accounts above the insurance limit.
Edit: What happens if they invest their money? That's the moment you have won!
Edit: What happens if they invest their money? That's the moment you have won!
You can't hold onto land without an army.
Agreed. My favorite breakdown of this view is from David Mitchell [1] I am not sure what would happen economically if we started taxing all assets, non-income, etc... How much should people pay yearly on wedding rings, gold teeth, clothes, music collections? Would we have to itemize all possessions and have them assessed?
[1] - https://www.youtube.com/watch?v=m2q-Csk-ktc [potentially nsfw language]
[1] - https://www.youtube.com/watch?v=m2q-Csk-ktc [potentially nsfw language]
I'm definitely going to make friends with a personal posession assessor, together we'll make sure that our enemies with gold teeth have those teeth valued higher. I'd bid that tooth up higher. It's got real value AND emotional value.
Which begs the question, how happy are we with what is happening economically right now?
To add to that, where are all our taxes being spent to make us happy? Have higher taxes historically resulted in everyone being happier? Is the money spent on the people? Here is one place in history we had really high taxes on the wealthy [1] but it does not say if it resulted in improved economy and everyone being happier. It looks more like it led to resentment and more defense spending.
[1] - https://teachinghistory.org/history-content/ask-a-historian/...
[1] - https://teachinghistory.org/history-content/ask-a-historian/...
the presumption there is that the pain is caused by not taxing enough, instead of, say, subsidies for the rich, stealing the value out of people's income through inflation, etc.
During COVID governments spent and spent. Now the check must be paid. By us, as always. Since income is already taxed at about 50% pretty much everywhere in the developed world, it is time to tax the existing wealth.
These articles are meant to prepare the public for it. They influence but also measure the public support for a wealth tax. It could be an all wealth or only a unrealized capital gains tax, similar to property taxes. They could start with executives and entrepreneurs who are mostly paid in stock. We will see.
These articles are meant to prepare the public for it. They influence but also measure the public support for a wealth tax. It could be an all wealth or only a unrealized capital gains tax, similar to property taxes. They could start with executives and entrepreneurs who are mostly paid in stock. We will see.
During COVID governments spent and spent. Now the check must be paid. By us.
The already wealthy benefitted immensely from the pandemic [0]. Hopefully, governments understand this and by "us", they realize they need to tax based on that, and not some scheme where the people already most negatively impacted have to bear the brunt of it.
0 - https://www.forbes.com/sites/chasewithorn/2021/04/30/america...
The already wealthy benefitted immensely from the pandemic [0]. Hopefully, governments understand this and by "us", they realize they need to tax based on that, and not some scheme where the people already most negatively impacted have to bear the brunt of it.
0 - https://www.forbes.com/sites/chasewithorn/2021/04/30/america...
>During COVID governments spent and spent. Now the check must be paid. By us, as always
It doesn't. The US is the deficit black hole of the entire world. All the trade surplus nations are suckers that give you free stuff. Germany wants to run an export surplus for all eternity. How are importing nations supposed to pay their debts back if Germany never reverses positions and starts a buying spree to balance its selling spree? Here is the thing. Germany never planned on its debtors ever repaying their debts because that is incompatible with an export surplus. They are giving out real goods for promises that they themselves consider worthless.
Consider Greece as an extreme example. Germany had a trade surplus with Greece and handed out loans. The debt to GDP ratio of Greece rose as a result. The 2008 crisis caused people to panic when they saw that Greece had rampant corruption but it was growing 5% despite the corruption. So what did they do? Germany forced austerity in the most idiotic way. Greece cut domestic spending but not foreign spending. The German trade surplus remained and thus the debt could never be repaid in the first place. The only way the Greek debt can disappear is if Germany imports Greek goods as this represents a flow of euros into Greece which then immediately flow back to repay the loans.
Thus the only logical solution to the regressive German export addiction is to not honor their debts and let them realize what they have done. Germany was voluntarily giving away its wealth at the expensive of its citizens. Export surpluses are something countries grow out of once they are developed. Only developing nations get to do it to kick start their economy.
It doesn't. The US is the deficit black hole of the entire world. All the trade surplus nations are suckers that give you free stuff. Germany wants to run an export surplus for all eternity. How are importing nations supposed to pay their debts back if Germany never reverses positions and starts a buying spree to balance its selling spree? Here is the thing. Germany never planned on its debtors ever repaying their debts because that is incompatible with an export surplus. They are giving out real goods for promises that they themselves consider worthless.
Consider Greece as an extreme example. Germany had a trade surplus with Greece and handed out loans. The debt to GDP ratio of Greece rose as a result. The 2008 crisis caused people to panic when they saw that Greece had rampant corruption but it was growing 5% despite the corruption. So what did they do? Germany forced austerity in the most idiotic way. Greece cut domestic spending but not foreign spending. The German trade surplus remained and thus the debt could never be repaid in the first place. The only way the Greek debt can disappear is if Germany imports Greek goods as this represents a flow of euros into Greece which then immediately flow back to repay the loans.
Thus the only logical solution to the regressive German export addiction is to not honor their debts and let them realize what they have done. Germany was voluntarily giving away its wealth at the expensive of its citizens. Export surpluses are something countries grow out of once they are developed. Only developing nations get to do it to kick start their economy.
So you're basically saying that Germany's a sucker and Greece benefited from Germany's generosity. Sounds great in theory, but my impression was that despite all the debt haircuts, it was much less fun to be in Greece than Germany at the time.
If you win at (maintaining) debt, aren't you supposed to improve your lot in life? Just being a "deficit black hole" doesn't necessarily give you an edge, just like credit card debtors and beggars on the street always run the risk of getting hit hard at the slightest surprise, and often are. Whereas not being in debt is perhaps the nominally less efficient way, but it prevents you from getting messed up by your loan sharks again and again. In that sense, trade surpluses are a risk avoidance strategy and as such, make a good match for traditionally risk-averse Germany.
If you win at (maintaining) debt, aren't you supposed to improve your lot in life? Just being a "deficit black hole" doesn't necessarily give you an edge, just like credit card debtors and beggars on the street always run the risk of getting hit hard at the slightest surprise, and often are. Whereas not being in debt is perhaps the nominally less efficient way, but it prevents you from getting messed up by your loan sharks again and again. In that sense, trade surpluses are a risk avoidance strategy and as such, make a good match for traditionally risk-averse Germany.
Are you suggesting that governments are colluding with journalists to deliver a particular narrative?
Or are you saying that journalists and their editors believe there's a need for wealth taxes and so they're pushing that line?
Or are you saying that journalists and their editors believe there's a need for wealth taxes and so they're pushing that line?
Probably some of both. A wealth tax would discourage investment and encourage consumer spending, and would hit the middle class the hardest. As usual - these things are always sold as being targeted at the "rich."
Though, it would be interesting to see how people would try to game/avoid it. Instead of investing in stocks, a middle class person looking to preserve some wealth could buy things like physical gold/silver from local dealers with cash, hide it under the floorboards, and definitely NOT report it on their taxes.
Though, it would be interesting to see how people would try to game/avoid it. Instead of investing in stocks, a middle class person looking to preserve some wealth could buy things like physical gold/silver from local dealers with cash, hide it under the floorboards, and definitely NOT report it on their taxes.
Do you define middle class as having wealth above $50M?
I am taking no position on this specific instance, but it is clear that government officials intentionally leak inside information to journalists with a particular worldview to push narratives into the public consciousness.
It's pretty clear that the British government over the last 12+ months have been doing just this with leaking Covid related announcements to the press prior to them being official announced.
I rarely see any news these days which are not pushing an agenda or another.
Politicians, journalists, governments, they all have their plans, ideas, biases and interests.
Politicians, journalists, governments, they all have their plans, ideas, biases and interests.
Or it's time to cut government payroll by 50%, shouldn't we at least explore this ?
Definitely. But considering that our only way to influence the government is by voting, I guess we can only vote politicians proposing a reduction in size and cost of the government. Sadly, not many like that left these days, as it simply isn't in their own interest.
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Except property tax is a wealth tax. So we have a wealth tax, it’s just highly regressive. https://en.wikipedia.org/wiki/Property_tax_in_the_United_Sta...
Property tax is interesting but probably in a different category as you are sharing space/property with a local government. I hope we have a historian here that knows the background and rationale on property tax. It is interesting that it is tied to the value of the property and not simply based on the size of the lot.
Not a historian but I suspect that property taxes were originally meant to pay for things like infrastructure, garbage, police, firefighters, schools, etc. Pretty much community costs incurred by the development of the area including and around your property.
Of course, without actual transparence and accountability and considering the state of said infrastructure, schools, etc, it is hard to know where these taxes actually go nowadays.
Of course, without actual transparence and accountability and considering the state of said infrastructure, schools, etc, it is hard to know where these taxes actually go nowadays.
That doesn’t explain taxing boats/cars/etc.
The historic reality is property tax was equivalent to wealth tax for thousands of years. It’s only recently that intangible assets became so valuable.
The historic reality is property tax was equivalent to wealth tax for thousands of years. It’s only recently that intangible assets became so valuable.
Actually car taxes were also justified by infrastructure costs around here. No idea about boats, as I don't own one.
I suspect you may be right about property tax tough - historically land-owners were rich-lord types and had to pay "fealty" to the crown. So I guess tax history is complicated?!
There is also the modern issue of pollution taxes which should be taken into consideration. For example it's long past time for a carbon tax...
I suspect you may be right about property tax tough - historically land-owners were rich-lord types and had to pay "fealty" to the crown. So I guess tax history is complicated?!
There is also the modern issue of pollution taxes which should be taken into consideration. For example it's long past time for a carbon tax...
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How is property tax regressive? Renters don't pay it and it is a flat tax across home value?
Because people generally spend a lower percentage of their income on cars and housing as their income increases. The minimums for shelter and transportation are hard to avoid.
Put another way the percentage of people making say 50k with a 20+k worth of car(s) is greater than the percentage of people making 50 million a year with 20+ million in car(s). Similarly it’s not that rare for retirees to be house rich owning say a 1+ million dollar house while having less than a 50k a year income. On the other hand someone making 50 million is extremely unlikely to have 1+ billion dollars in personal property.
It’s true the rich may own a yacht, but they are also likely to completely avoid paying personal property taxes on it.
Put another way the percentage of people making say 50k with a 20+k worth of car(s) is greater than the percentage of people making 50 million a year with 20+ million in car(s). Similarly it’s not that rare for retirees to be house rich owning say a 1+ million dollar house while having less than a 50k a year income. On the other hand someone making 50 million is extremely unlikely to have 1+ billion dollars in personal property.
It’s true the rich may own a yacht, but they are also likely to completely avoid paying personal property taxes on it.
I see what you are saying. The question then becomes which taxes we want to be progressive or regressive, and what we want to tax in the first place.
I don't think everything needs to be taxed, or all taxes should be progressive.
In this light, I'm not sure what the rationale for a tax on yachts would be. It seems like it could be a way to generate government income, or discourage yacht ownership, but I'm not convinced these are sufficient reason.
I don't think everything needs to be taxed, or all taxes should be progressive.
In this light, I'm not sure what the rationale for a tax on yachts would be. It seems like it could be a way to generate government income, or discourage yacht ownership, but I'm not convinced these are sufficient reason.
How do renters not pay property tax? It's part of the cost of the property that the rent is based on.
Not any more than I pay corporate taxes at the groceries because it is baked into the price of goods.
In some places, property taxes could impact rent, but in many places it doesn't matter because the price of rent is much higher than the cost of owning the rental (including tax). This is most true in places where you can't build more housing inventory.
In some places, property taxes could impact rent, but in many places it doesn't matter because the price of rent is much higher than the cost of owning the rental (including tax). This is most true in places where you can't build more housing inventory.
It’s not that home ownership isn’t more common as you move up the income scale. It’s that cars/homes become a smaller percentage of a persons income and overall wealth. At the extreme end, Bill Gates may own a 150 million dollar house, but that’s ~1/30th his annual income and 1/1,000th of his wealth. It’s not that nobody wealthy owns several properties, it’s that they generally have other things they want to spend their income on.
Meanwhile owning a car worth even 3k is 1/10th the income of some at 30k, and many people have much more expensive cars at that income level. Worse the rate is generally higher on cars than homes. Similarly, nobody actually rich is “house rich” the way retired people are where their house is 10-30x their annual income. (500k to 1.5 million house with a 50k income.)
So, even if you exclude rental income it’s still very regressive.
Meanwhile owning a car worth even 3k is 1/10th the income of some at 30k, and many people have much more expensive cars at that income level. Worse the rate is generally higher on cars than homes. Similarly, nobody actually rich is “house rich” the way retired people are where their house is 10-30x their annual income. (500k to 1.5 million house with a 50k income.)
So, even if you exclude rental income it’s still very regressive.
Honest thanks, I got that from your other post. I would argue it is some sort modified regressive tax, where the bottom 35% of the people who don't own pay nothing, then your regressive tax percent of income kicks in.
>I'm a little baffled why there have been all these articles of this category recently.
These articles are all based on one (exciting, if you're a data journalist) source - the tax returns that the IRS leaked to ProPublica. The leak may probably be part of an effort on the part of the US government to spin up narrative preparing the public for an increase in taxes.
More about coming taxes: https://denvergazette.com/wex/despite-campaign-promises-60-c...
These articles are all based on one (exciting, if you're a data journalist) source - the tax returns that the IRS leaked to ProPublica. The leak may probably be part of an effort on the part of the US government to spin up narrative preparing the public for an increase in taxes.
More about coming taxes: https://denvergazette.com/wex/despite-campaign-promises-60-c...
I feel like what people really want is a wealth weighted income tax, so your tax rate on income is based on how wealthy you are, not how much you made in a single year.
Under that system you would be rewarded for not productively generating any cash flow from the assets you own.
If you are taxed 99 cents for every dollar you earn, you're still better off earning the dollar.
Motivation is a funny thing. For example if someone else benefits more than me from my own work, I may decide I'd rather not do it at all.
After all, just relaxing, smoking weed and playing on my Xbox is a really awesome way to spend my time.
After all, just relaxing, smoking weed and playing on my Xbox is a really awesome way to spend my time.
That analogy doesn't really work when it comes to investing.
edit: and if you're so wealthy that your tax rate is above 50% in this setup, it's probably fine if you want to smoke weed and play xbox. That's not a concern for the bottom 99%.
edit: and if you're so wealthy that your tax rate is above 50% in this setup, it's probably fine if you want to smoke weed and play xbox. That's not a concern for the bottom 99%.
> That's not a concern for the bottom 99%.
It should be: top 1% of income earners pay 40% of all federal income taxes. Also, entrepreneurs capture only a few percent of the value they create - the rest helping move forward the society and everybody else.
We, as a society, should encourage high contributors and value creators since we are all gaining from their work. Moreover, we should be extremely careful to not discourage potential high contributors through the populist measures we are taking.
It should be: top 1% of income earners pay 40% of all federal income taxes. Also, entrepreneurs capture only a few percent of the value they create - the rest helping move forward the society and everybody else.
We, as a society, should encourage high contributors and value creators since we are all gaining from their work. Moreover, we should be extremely careful to not discourage potential high contributors through the populist measures we are taking.
> It should be: top 1% of income earners pay 40% of all federal income taxes
That's income. This question is about wealth.
That's income. This question is about wealth.
Cash flow and earnings are not the same thing.
I'm not sure how that matters unless you are paying taxes on an accrual basis. Which you technically can do as an individual.
Well said - but unfortunately that’s not what what anyone is talking about.
I personally don’t understand what collecting more taxes will even do for us. We are unable to agree on what to spend it on, so what’s the point. There won’t be universal healthcare or free college, and we mostly just send the money to social security, Medicare and defense, and our albatross education system. Stop collecting more taxes until we know what we want to spend it on.
I teach in a public high school. My gut instinct is that most “education” problems are actually education problems so much as manifestations of other social problems we are unwilling/unable to solve. Schools are just one of the few environments all Americans participate in (one way or another) so other problems become visible in a way they aren’t otherwise.
This is also why - in my non-expert opinion - the ‘high expectations’ and ‘full wrap around services’ educational models show positive impacts. They address (indirectly and directly) these externalities in a way that typical public school does not.
This is also why - in my non-expert opinion - the ‘high expectations’ and ‘full wrap around services’ educational models show positive impacts. They address (indirectly and directly) these externalities in a way that typical public school does not.
To your point, the same is true for policing. These things become the one funnel where all other problems get directed to (parenting, environment, media, etc), and just thrown into the laps of an institution that can’t make up for years of neglect or misguidance.
I think many people don't accept that explanation for the reason wealthy people aren't paying taxes, or don't accept it as complete.
For example, I don't pay taxes on the appreciation in my investment accounts, since I'm not spending that money, but I do pay taxes on my income, the money I'm actually spending. Meanwhile, some of the people identified by ProPublica are paying literally zero in taxes, and yet clearly spending more in a week or even day than I spend in a year.
THAT is what draws people to the story. "How does someone whose spending clearly outstrips mine by 10x or more pay less than I do in taxes?"
For example, I don't pay taxes on the appreciation in my investment accounts, since I'm not spending that money, but I do pay taxes on my income, the money I'm actually spending. Meanwhile, some of the people identified by ProPublica are paying literally zero in taxes, and yet clearly spending more in a week or even day than I spend in a year.
THAT is what draws people to the story. "How does someone whose spending clearly outstrips mine by 10x or more pay less than I do in taxes?"
I’m finding the idea of taxing wealth less strange the more I think about it. At this point I find it almost equivalently strange to taxing income. Assuming there were no income tax I feel like your second paragraph could be rephrased:
I’m all for taxing the rich more, but I personally don’t want to pay taxes yearly on wages I’m saving every year until I retire, at which point I will spend the savings and pay taxes on consumption.
Objectively, I’m not sure one is much better/worse than the other. One is just more familiar.
I’m all for taxing the rich more, but I personally don’t want to pay taxes yearly on wages I’m saving every year until I retire, at which point I will spend the savings and pay taxes on consumption.
Objectively, I’m not sure one is much better/worse than the other. One is just more familiar.
The main difference is wealth is only realized when it is liquidated. Investments appreciate and depreciate over time, so it makes sense to tax when you cash out. You could pay taxes on your retirement savings gains every year, and then then end up with less than you put in if value goes back down before you pull it out.
> That's how it works for everyone who invests their savings.
In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.
Rich People disproportionately benefit from this. For saving for your pension there’s 401(k) in the US.
In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.
Rich People disproportionately benefit from this. For saving for your pension there’s 401(k) in the US.
I think that a big part of it is that these executives are often living a lifestyle that involves consuming lots of expensive goods and services but pay less in taxes than someone with the same lifestyle who paid for that lifestyle via income from labor word.
>I'm a little baffled why there have been all these articles of this category recently. It's not news that you don't pay taxes on invested assets you hold and don't sell. That's how it works for everyone who invests their savings.
Since most of the population has absolutely nothing saved, capital gains taxes on their index funds are completely irrelevant.
I agree that having normal people paying cap gains on their savings is pretty ugly. However, there's some middle ground between that and people like Elon Musk paying themselves in shares, borrowing against them to live lavishly, and paying no income tax.
Since most of the population has absolutely nothing saved, capital gains taxes on their index funds are completely irrelevant.
I agree that having normal people paying cap gains on their savings is pretty ugly. However, there's some middle ground between that and people like Elon Musk paying themselves in shares, borrowing against them to live lavishly, and paying no income tax.
> Since most of the population has absolutely nothing saved, capital gains taxes on their index funds are completely irrelevant.
That’s not true for US - “ overall median net worth of U.S. households, which is $121,700.”[1]
Capital gains can be especially problematic on housing, where let’s say a retire bought in the 70s and now wants to downsize, that $250k individual or $500k married exception isn’t going to cover their “gain” on the house, when in reality only part of it is real gain. Let’s say the house was bought for $25k in 1970 (CA average at the time) and sold for 814k (CA average for April 2021). That’s 814k - 25k base price of the asset less 250k (assuming windowed filing single) = 539k taxable capital gain. However, that 25k in today’s money is more like $178k[2], so we are taxing inflation “gain” that’s not actually real value already.
The Biden approach of taxing cap gains over $1m is going to impact a lot more American dream type of regular people (sold home for a good gain, sold a small business, etc).
The Warren wealth tax approach is going to be next to impossible to collect.
Swiss have managed to pull off a wealth tax (0.3 to 0.5%) on all wealth and also have low income tax rates, compensated for with VAT and other consumption/use taxes[3].
Perhaps we can learn something there - I’d prefer to see lower income and gains taxes for most people to enable wealth building for most of the population and more focus on use of the money, e.g buying regular food should be no tax (it’s a necessity), but buying a private jet can be 50% VAT (value added tax). Buying a Camry same idea say 10% VAT (or no tax at all as necessity?), but buying a $500k sports car, can be 25% VAT. This way the regular folks leading regular lifestyles don’t end up heavily taxed, but luxury consumption is.
[1] https://www.cnbc.com/select/average-net-worth-by-age/ [2] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=25000&year1=19... [3] https://en.m.wikipedia.org/wiki/Taxation_in_Switzerland
That’s not true for US - “ overall median net worth of U.S. households, which is $121,700.”[1]
Capital gains can be especially problematic on housing, where let’s say a retire bought in the 70s and now wants to downsize, that $250k individual or $500k married exception isn’t going to cover their “gain” on the house, when in reality only part of it is real gain. Let’s say the house was bought for $25k in 1970 (CA average at the time) and sold for 814k (CA average for April 2021). That’s 814k - 25k base price of the asset less 250k (assuming windowed filing single) = 539k taxable capital gain. However, that 25k in today’s money is more like $178k[2], so we are taxing inflation “gain” that’s not actually real value already.
The Biden approach of taxing cap gains over $1m is going to impact a lot more American dream type of regular people (sold home for a good gain, sold a small business, etc).
The Warren wealth tax approach is going to be next to impossible to collect.
Swiss have managed to pull off a wealth tax (0.3 to 0.5%) on all wealth and also have low income tax rates, compensated for with VAT and other consumption/use taxes[3].
Perhaps we can learn something there - I’d prefer to see lower income and gains taxes for most people to enable wealth building for most of the population and more focus on use of the money, e.g buying regular food should be no tax (it’s a necessity), but buying a private jet can be 50% VAT (value added tax). Buying a Camry same idea say 10% VAT (or no tax at all as necessity?), but buying a $500k sports car, can be 25% VAT. This way the regular folks leading regular lifestyles don’t end up heavily taxed, but luxury consumption is.
[1] https://www.cnbc.com/select/average-net-worth-by-age/ [2] https://data.bls.gov/cgi-bin/cpicalc.pl?cost1=25000&year1=19... [3] https://en.m.wikipedia.org/wiki/Taxation_in_Switzerland
I honestly don't get it either. If you are jealous invest your money instead of hoarding it.
You're presuming these people have assets to invest.
I agree with you in general, but the index fund thing is a problem. Index funds/etf pay no CG taxes even when the stocks in the index change, where traditionally a mutual fund would pay taxes as they sell the old stocks and replace with new constituents.
But you still need to sell the index fund to realize an actual gain -- there's no income generated -- right?
yes that's the point, they pay less taxes than mutual funds.
Joe Public doesn't get any of that. They see the headline and run with it.
The recently proposed wealth taxes (e.g., Elizabeth Warren’s proposal) that work the way you’ve described would only start on wealth above $50 million.
So your framing of such a tax as a way to steal from your working-class retirement funds is incredibly disingenuous. Unless, of course, you have 8+ figures of wealth. In which case I hope one day you’re made to pay your fair share to society.
So your framing of such a tax as a way to steal from your working-class retirement funds is incredibly disingenuous. Unless, of course, you have 8+ figures of wealth. In which case I hope one day you’re made to pay your fair share to society.
Once a new tax is imposed, its limits and brackets are probably the easiest things to change about it. Moreover, if they aren’t inflation-adjusted, the Fed will make sure we’ll all get there pretty soon, just by printing money like they are doing these days.
Anybody who has any legally earned wealth has already paid his fair share to the society by simply creating the corresponding value. Usually value creators get a few percent of the created value, the rest being enjoyed by the society, by the rest us.
Anybody who has any legally earned wealth has already paid his fair share to the society by simply creating the corresponding value. Usually value creators get a few percent of the created value, the rest being enjoyed by the society, by the rest us.
>Once a new tax is imposed, its limits and brackets are probably the easiest things to change about it.
Just introduce a tax on money held in bank accounts. Doesn't matter if its above $100k or $1 million.
>Moreover, if they aren’t inflation-adjusted, the Fed will make sure we’ll all get there pretty soon, just by printing money like they are doing these days.
When people are stupid enough to "invest" into money you run into an obvious problem. The supply of money is limited. Every dollar that is being saved makes it harder to save the next. So you have to create new money as people save money. The conventional way is to run a government deficit. The better way is to stop regressive saving in money by introducing a negative interest rate for big accounts.
Investments don't matter. Even if the rich HODL all existing stocks someone can start a new company that you can invest into. Old businesses can also issue new shares without people being angry. None of this is zero sum. But saving money? Oh boy, that is the most zero sum way to "invest". The only reason the system hasn't collapsed is that the Fed is making sure that every time a dollar is being hoarded there is a new one to replace it.
Just introduce a tax on money held in bank accounts. Doesn't matter if its above $100k or $1 million.
>Moreover, if they aren’t inflation-adjusted, the Fed will make sure we’ll all get there pretty soon, just by printing money like they are doing these days.
When people are stupid enough to "invest" into money you run into an obvious problem. The supply of money is limited. Every dollar that is being saved makes it harder to save the next. So you have to create new money as people save money. The conventional way is to run a government deficit. The better way is to stop regressive saving in money by introducing a negative interest rate for big accounts.
Investments don't matter. Even if the rich HODL all existing stocks someone can start a new company that you can invest into. Old businesses can also issue new shares without people being angry. None of this is zero sum. But saving money? Oh boy, that is the most zero sum way to "invest". The only reason the system hasn't collapsed is that the Fed is making sure that every time a dollar is being hoarded there is a new one to replace it.
So Jeff Bezos and Elon Musk (and other stupidly rich executives) created hundreds of billions of dollars of value themselves?
Of course not. They got their through exploitation. Any profit that a business has is value not being paid back to the actual workers who created the value of the company through their labor.
Nobody has ever worked for $100 billion. Or $1 billion. Or $100 million.
Of course not. They got their through exploitation. Any profit that a business has is value not being paid back to the actual workers who created the value of the company through their labor.
Nobody has ever worked for $100 billion. Or $1 billion. Or $100 million.
If your skill is moving boxes onto a delivery truck your work is not more useful/valuable as part of Amazon than at a small traditional company with no scalable internet components. The excess value in these companies should flow to those who took risks to set them in motion and continue leading them. Asserting this ownership premium is theft is pretty ridiculous on the face of it.
Also, imagine if the guy loading trucks for Amazon did make 100x more money just because he’s connected to a high-growth internet company. The economy would be thrown into chaos because no logistics workers would be willing to do less remunerative but essential work like unloading food at the grocery store without substantial wage increases that get passed to the consumer as higher food/gas/delivery prices. Many sectors without productivity growth would get annihilated by Baumol’s cost disease, and consumers would have to spend a much larger share of their income on anything that is trucked around (which is basically everything we buy).
Also, imagine if the guy loading trucks for Amazon did make 100x more money just because he’s connected to a high-growth internet company. The economy would be thrown into chaos because no logistics workers would be willing to do less remunerative but essential work like unloading food at the grocery store without substantial wage increases that get passed to the consumer as higher food/gas/delivery prices. Many sectors without productivity growth would get annihilated by Baumol’s cost disease, and consumers would have to spend a much larger share of their income on anything that is trucked around (which is basically everything we buy).
> Nobody has ever worked for $100 billion. Or $1 billion. Or $100 million.
Of course. However, some of us had had a positive impact on the society measurable in Trillions, usually through ideas and entrepreneurship. It is preferably for us a society to encourage such endeavors.
Neither Bezos nor Musk have created that value by themselves. They did it together with investors, partners, employees and clients, all of whom were rightly and fairly compensated and became better because of it.
The only unhappy are those who did not participate to any of it, but they have no right to complain, just envy.
Of course. However, some of us had had a positive impact on the society measurable in Trillions, usually through ideas and entrepreneurship. It is preferably for us a society to encourage such endeavors.
Neither Bezos nor Musk have created that value by themselves. They did it together with investors, partners, employees and clients, all of whom were rightly and fairly compensated and became better because of it.
The only unhappy are those who did not participate to any of it, but they have no right to complain, just envy.
> The only unhappy are those who did not participate to any of it, but they have no right to complain, just envy.
What is right or wrong is just semantics, in reality a mob with pitchforks doesn't care about semantics.
Humans have forced the redistribution of resources concentrated in few hands since the beginning of time
As an entrepreneur the quality of life you provide to people has a really short shelf life, as soon as the hedonistic treadmill adjusts , people start looking at the monetary reward that the entrepreneur got for providing such quality of life...and all of a sudden they think it's not fair because hedonistic treadmill made that monetary reward becomes excessive in retrospect.
Bezos critics have been using Amazon in the current form ever since the early 2010s now, and Amazon rate of innovation has dropped, so hedonistic treadmill did catch up and now they want Bezos head.
Same thing happened with Microsoft. The transition from 3.1 to Win95 was something which shocked the whole world, people were talking about honorary President Bill Gates.
Rate of innovation slowed down from Win95 to Win98 and all of a sudden people began looking at Bill Gates 150B wealth back in 1999 and pressure mounted to break up Microsoft and arrest Bill Gates and expropriate his wealth
What is right or wrong is just semantics, in reality a mob with pitchforks doesn't care about semantics.
Humans have forced the redistribution of resources concentrated in few hands since the beginning of time
As an entrepreneur the quality of life you provide to people has a really short shelf life, as soon as the hedonistic treadmill adjusts , people start looking at the monetary reward that the entrepreneur got for providing such quality of life...and all of a sudden they think it's not fair because hedonistic treadmill made that monetary reward becomes excessive in retrospect.
Bezos critics have been using Amazon in the current form ever since the early 2010s now, and Amazon rate of innovation has dropped, so hedonistic treadmill did catch up and now they want Bezos head.
Same thing happened with Microsoft. The transition from 3.1 to Win95 was something which shocked the whole world, people were talking about honorary President Bill Gates.
Rate of innovation slowed down from Win95 to Win98 and all of a sudden people began looking at Bill Gates 150B wealth back in 1999 and pressure mounted to break up Microsoft and arrest Bill Gates and expropriate his wealth
Make the limit linked to income levels. Say 100 times the median income.
Agreed but paying an exec $1 in compensation salary and $100m in stock should also be illegal.
If you pay an exec $100MM in stock, they’re taxed on it the same as $100MM in cash, no? They’re just not taxed if their stock appreciates by $100MM and they never sell it. (And if they do sell it’s taxed as capital gains)
It shouldn't be illegal, it just be taxed at a reasonable level making it more equivalent to getting the same salary in cash.
It already is taxed as ordinary income - RSUs are taxed as cash when vested. Incentive stock options (you have to buy these out at strike price) are taxed as income for value at exercise less strike price.
The advantage of RSU over regular cash comp is that they can appreciate while not yet vested - it’s like putting your future salary into stock market, it can go up or down. Then when vested, it’s taxed as cash salary (no long term capital gains advantage here).
The advantage of RSU over regular cash comp is that they can appreciate while not yet vested - it’s like putting your future salary into stock market, it can go up or down. Then when vested, it’s taxed as cash salary (no long term capital gains advantage here).
AFAIK that's already the case. People are conflating the value of the stock at the moment you're paid (which is taxed as regular income) and the gains that come afterwards (which is taxed as capital gains).
Headline says:
>Wealthiest U.S. executives paid little to nothing in federal income taxes
Article says:
>$13.6 billion in federal income taxes
>Wealthiest U.S. executives paid little to nothing in federal income taxes
Article says:
>$13.6 billion in federal income taxes
Even worse they have
>$13.6 billion in federal income taxes on $401 billion of their wealth, which was tabulated by Forbes.
Wealth is not income!
>$13.6 billion in federal income taxes on $401 billion of their wealth, which was tabulated by Forbes.
Wealth is not income!
So less than 3.4% on average.
How much do you pay?
I pay 0% federal income taxes on my wealth; the same as everyone else.
By stressing "federal income taxes" I assume that you mean that there are local taxes on wealth.
I do not know how it is in USA, but in most countries there are taxes on wealth, typically at least on houses, cars and land.
Wherever I have seen the amount of those taxes, they were already too high in my opinion.
Moreover, the inheritance taxes are also a kind of tax on wealth and they are also quite high in many places.
In my opinion taxes on wealth should be reduced, not increased, because I have seen cases when someone happened to be jobless for some time, thus having no income. While without the burden of taxes on wealth they could have lived decently for a longer time, waiting for an opportunity, the necessity of paying the taxes could force them to sell their property at loss and risk becoming homeless. I do not think that is right.
On the other hand, when someone owns much more wealth than would be needed to ensure a decent life until dying of old age, then I would accept that it is right to tax the excess wealth.
However, I have seen too many cases when the introduction of taxes on wealth was justified as "tax for the rich", but in the actual law the taxation thresholds were so low that the taxes affected mostly the lower end of the middle class, not the really rich.
I do not know how it is in USA, but in most countries there are taxes on wealth, typically at least on houses, cars and land.
Wherever I have seen the amount of those taxes, they were already too high in my opinion.
Moreover, the inheritance taxes are also a kind of tax on wealth and they are also quite high in many places.
In my opinion taxes on wealth should be reduced, not increased, because I have seen cases when someone happened to be jobless for some time, thus having no income. While without the burden of taxes on wealth they could have lived decently for a longer time, waiting for an opportunity, the necessity of paying the taxes could force them to sell their property at loss and risk becoming homeless. I do not think that is right.
On the other hand, when someone owns much more wealth than would be needed to ensure a decent life until dying of old age, then I would accept that it is right to tax the excess wealth.
However, I have seen too many cases when the introduction of taxes on wealth was justified as "tax for the rich", but in the actual law the taxation thresholds were so low that the taxes affected mostly the lower end of the middle class, not the really rich.
>By stressing "federal income taxes" I assume that you mean that there are local taxes on wealth.
I'm just re-using the exact same phrasing from the article to point out how disingenuous it is.
I'm just re-using the exact same phrasing from the article to point out how disingenuous it is.
> However, I have seen too many cases when the introduction of taxes on wealth was justified as "tax for the rich", but in the actual law the taxation thresholds were so low that the taxes affected mostly the lower end of the middle class, not the really rich.
Don't be deluded. These taxes are targeting the middle-class and the upper-middle-class (which is considered the "rich").
The "very rich" like Bezos have most of their wealth in stocks. These stocks will considerably go down if you had a wealth tax, and as a result bring little tax income.
Don't be deluded. These taxes are targeting the middle-class and the upper-middle-class (which is considered the "rich").
The "very rich" like Bezos have most of their wealth in stocks. These stocks will considerably go down if you had a wealth tax, and as a result bring little tax income.
How much wealthier would you be if you paid no taxes at all in tax year 2020?
An example with some made-up numbers that could apply to some HN users:
Let's say your net worth was $500K at the start of the year, you earned $200K income in the year and spent $50K. Without taxes, your end of year net worth would be $650K. However, you pay $40K+ in taxes, which makes your net worth <=$610K. So effectively you paid $40K/$650K = 6.1% of your wealth in taxes.
"Regular" people build wealth through income, while wealthy build wealth through appreciating assets. The point I take from headlines like these are not "US executives illegally avoid taxes", it is "tax rules favor the wealthy". Increasing tax on appreciated assets by raising capital gains rates, removing step-up basis, or (maybe) taxing unrealized gains could shift some of the tax drag on wealth from income earners towards asset holders. All of these would need to be done very carefully to not overly hurt small business owners, perhaps through something like a lifetime capital gains exemption (similar to gift exemption, apparently existed in Canada in the 80s[0]).
[0]: https://static.twentyoverten.com/5b9280ab0420c067d6b36505/Wo...
An example with some made-up numbers that could apply to some HN users:
Let's say your net worth was $500K at the start of the year, you earned $200K income in the year and spent $50K. Without taxes, your end of year net worth would be $650K. However, you pay $40K+ in taxes, which makes your net worth <=$610K. So effectively you paid $40K/$650K = 6.1% of your wealth in taxes.
"Regular" people build wealth through income, while wealthy build wealth through appreciating assets. The point I take from headlines like these are not "US executives illegally avoid taxes", it is "tax rules favor the wealthy". Increasing tax on appreciated assets by raising capital gains rates, removing step-up basis, or (maybe) taxing unrealized gains could shift some of the tax drag on wealth from income earners towards asset holders. All of these would need to be done very carefully to not overly hurt small business owners, perhaps through something like a lifetime capital gains exemption (similar to gift exemption, apparently existed in Canada in the 80s[0]).
[0]: https://static.twentyoverten.com/5b9280ab0420c067d6b36505/Wo...
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I pay zero percent on my wealth, just like you. You should consider revising your comment as you were duped by poor journalism.
I'll admit, I read it as income. But it does make me start to think about the disparities in how wealth is generated across different classes of Americans. For me, wealth is almost 100% generated by my income, so I would say my income tax is basically a wealth tax.
> so I would say my income tax is basically a wealth tax.
Indeed, sounds like a great reason to abolish the income tax.
Indeed, sounds like a great reason to abolish the income tax.
You could calculate your income tax to wealth ratio though right?
The reason it’s important is that these executives are not paid “income”. Their wealth increases because it’s largely in shares of their companies and then they use non (or low) taxable events to get cash to buy their stuff.
This sort of activity is not available to people whose only source of cash is income.
I’m not sure it’s worth the unintended consequences of changing the tax laws to change this but it’s not poor journalism to point it out and start the conversation.
Edit: I just calculated mine and depending on how you value my home it’s between 5-9% for 2020.
The reason it’s important is that these executives are not paid “income”. Their wealth increases because it’s largely in shares of their companies and then they use non (or low) taxable events to get cash to buy their stuff.
This sort of activity is not available to people whose only source of cash is income.
I’m not sure it’s worth the unintended consequences of changing the tax laws to change this but it’s not poor journalism to point it out and start the conversation.
Edit: I just calculated mine and depending on how you value my home it’s between 5-9% for 2020.
From my point of view, it is poor journalism to use a clickbait headline ($13.6 billion is not little-to-nothing) and misleading presentation of data (incomes taxes of X on wealth of Y).
It's also lazy journalism as it just piggy-backs on top of the illegally-obtained IRS data from ProPublica, and produces all of its quotes from Twitter or other news media sources.
It's also lazy journalism as it just piggy-backs on top of the illegally-obtained IRS data from ProPublica, and produces all of its quotes from Twitter or other news media sources.
Do you not consider property tax a wealth tax?
I don't. Property that is held (which can be held in a variety of ways by a plethora of entities) is targeted separately, just as income is, just as capital gains are, which property can also generate.
Real property (houses, land, etc) derive much of their value from the surrounding context - roads, population, jobs, etc. these are paid for collectively, so a property tax to me is more like HOA dues to the city/county that help make it livable.
However, if the property tax is higher than those infra needs, then a portion of it is totally a wealth tax. Just haven’t seen that in CA.
However, if the property tax is higher than those infra needs, then a portion of it is totally a wealth tax. Just haven’t seen that in CA.
Property tax is more of a use tax e.g. a tax on imputed rent, not a wealth tax.
If it was a wealth tax, you would be able to deduct your liabilities i.e. the mortgage.
If it was a wealth tax, you would be able to deduct your liabilities i.e. the mortgage.
Wealth is not income
Corrupt police men in Indian sprawls know this for a long time. You cannot extract lots from a few rich drivers (in addition, you may face personal consequences as well).
The best spots are where you have a many middle class to lower class drivers, who need to be somewhere quickly, and will pay up. Smaller amounts, but continuously.
The best spots are where you have a many middle class to lower class drivers, who need to be somewhere quickly, and will pay up. Smaller amounts, but continuously.
One achieving this level of entrepreneurship can decide on their own how to pay back to society through sophisticated layers of charities and offshore businesses. Thank you for 3 EUR plastic Chinese smartphone handler, thank you for the 80k EUR car with 350km range, thank you for self-assembly cardboard furnitures, thank you for operating systems spying on me in real time.
I admit I don't know how this all works. But just a few naive questions: if these folks are taking out loans backed by the shares of their stock, how do you repay that loan without triggering a taxable event (ie selling shares). If we as a society want to prevent this from happening, can the government force the banks to raise the rates on these types of loans so it becomes less attractive for these individuals. The US could then require that some % of that loan to account for taxes.
My understanding is the essentially take out loans indefinitely using their assets as collateral. Loans to pay back previous loans, etc.
The 'grift' is that when they die, their inheritors are able to sell off said collateral to pay off the debt avoiding any cap gains on those sales due to the step-up basis after death.
The 'grift' is that when they die, their inheritors are able to sell off said collateral to pay off the debt avoiding any cap gains on those sales due to the step-up basis after death.
Charge a negative interest rate on their bank accounts. If their income is derived from selling assets they will lose a lot from the negative interest rates because they take the loan ahead of time.
Apparently, you roll the original loan into a new loan until you die?
Yes. This is how feudalism works.
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Let’s pass an exemption for top executives that they permanently owe 0 income tax in consideration of their role in creating countless jobs.
https://news.ycombinator.com/item?id=27441277 (267 points/12 days ago/404 comments)
https://news.ycombinator.com/item?id=27432326 (1031 points/13 days ago/970 comments)
https://news.ycombinator.com/item?id=27434307 (609 points/13 days ago/568 comments)
https://news.ycombinator.com/item?id=27474673 (37 points/9 days ago/21 comments)
https://news.ycombinator.com/item?id=27435983 (28 points/12 days ago/6 comments)
https://news.ycombinator.com/item?id=27546005 (25 points/3 days ago/8 comments)
https://news.ycombinator.com/item?id=27465272 (20 points/10 days ago//21 comments)