How to have a billion dollar exit with zero capital gains tax(axiomalpha.com)
axiomalpha.com
How to have a billion dollar exit with zero capital gains tax
https://axiomalpha.com/how-to-use-the-unlimited-tax-loophole/
304 comments
The "50-percent of gross income test" is actually that you have to meet 1 of 3 standards[1]:
Qualified Opportunity Zone Business QOF 50-percent of gross income test Q56. What is the 50-percent-of-gross-income test?
A56. Each taxable year, a QOZ business must earn at least 50 percent of its gross income from business activities within a QOZ. The regulations provide three safe harbors that a business may use to meet this test. These safe harbors take into account any of the following—
- Whether at least half of the aggregate hours of services received by the business were performed in a QOZ;
- Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or
- Whether necessary tangible property and necessary business functions were located in a QOZ.
Q57. Must a QOZ business meet all three safe harbors to satisfy the 50-percent-of-gross income test?
A57. No. A QOZ business satisfies the 50-percent-of-gross income test if it satisfies any one of these safe harbors. For example, if 50 percent or more of all the hours of services that a business receives and uses were performed in one or more QOZs, then the business satisfies the hours of services received test and, therefore, satisfies the 50-percent-of-gross-income test.
[1] https://www.irs.gov/credits-deductions/opportunity-zones-fre...
Qualified Opportunity Zone Business QOF 50-percent of gross income test Q56. What is the 50-percent-of-gross-income test?
A56. Each taxable year, a QOZ business must earn at least 50 percent of its gross income from business activities within a QOZ. The regulations provide three safe harbors that a business may use to meet this test. These safe harbors take into account any of the following—
- Whether at least half of the aggregate hours of services received by the business were performed in a QOZ;
- Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or
- Whether necessary tangible property and necessary business functions were located in a QOZ.
Q57. Must a QOZ business meet all three safe harbors to satisfy the 50-percent-of-gross income test?
A57. No. A QOZ business satisfies the 50-percent-of-gross income test if it satisfies any one of these safe harbors. For example, if 50 percent or more of all the hours of services that a business receives and uses were performed in one or more QOZs, then the business satisfies the hours of services received test and, therefore, satisfies the 50-percent-of-gross-income test.
[1] https://www.irs.gov/credits-deductions/opportunity-zones-fre...
Seems like you can, as long as you work in the office 50% of the time ("at least 50% of the hours worked by partners, contractors, and employees could take place in an OZ"), and the IP seems to be addressed by this quote from the article: "The IRS’ Final Regulations on QOZB’s gave a rather interesting but nuanced example of an intellectual property holding company with a headquarters in an QZ which DID qualify as a QOZB despite concerns about the 40% intangible property rule. This is a very relevant example for many tech companies [...]"
I'm not going to go read the IRS regulations because I'm not actually planning to implement this scheme but it seems plausible that it might work. As long as there isn't another COVID forcing everyone to work from home...
I'm not going to go read the IRS regulations because I'm not actually planning to implement this scheme but it seems plausible that it might work. As long as there isn't another COVID forcing everyone to work from home...
Anyone interested in the actual map, it can be found here:
https://cimsprodprep.cdfifund.gov/CIMS4/apps/pn-nmtc/index.a...
The purpose of the QOZ is to encourage investment in those areas, and it does this by favorable tax conditions.
Some of these areas are surprising, at least around me I see areas designated that aren't much different from the surrounding areas. And there are rural ones, too.
Looking at some of the ones above in street view, I can see why they're classified as they are, and I could certainly see a start-up choosing to place an office in one of those locations. Some are transit-close, even.
https://cimsprodprep.cdfifund.gov/CIMS4/apps/pn-nmtc/index.a...
The purpose of the QOZ is to encourage investment in those areas, and it does this by favorable tax conditions.
Some of these areas are surprising, at least around me I see areas designated that aren't much different from the surrounding areas. And there are rural ones, too.
Looking at some of the ones above in street view, I can see why they're classified as they are, and I could certainly see a start-up choosing to place an office in one of those locations. Some are transit-close, even.
It’s about who owned the land in 2017 and who was governor. Some states were less corrupt than others, but as a general rule OZs were and are mostly political grift with a few legit trades thrown in for cover.
The reason that HUGE tracts of OZs make no sense is that the “for development of blighted areas” thing is very thinly veiled bullshit.
The reason that HUGE tracts of OZs make no sense is that the “for development of blighted areas” thing is very thinly veiled bullshit.
The eligibility criteria:
The Opportunity Zone Selection Process
As prescribed by law, governors nominated which census tracts should be designated as Opportunity Zones by the U.S. Department of the Treasury. To be eligible for designation, a census tract must:
- Have a poverty rate of at least 20 percent; or
- Have a median income below 80 percent of that in the State or metropolitan area, or for rural census tracts, 80 percent of that in the entire State; or
- Be contiguous with a census tract meeting one of the above conditions and have a median income less than 125 percent of the qualifying contiguous census tract. [0]
[0] https://www.rd.usda.gov/sites/default/files/ImpactofOpportun...
The Opportunity Zone Selection Process
As prescribed by law, governors nominated which census tracts should be designated as Opportunity Zones by the U.S. Department of the Treasury. To be eligible for designation, a census tract must:
- Have a poverty rate of at least 20 percent; or
- Have a median income below 80 percent of that in the State or metropolitan area, or for rural census tracts, 80 percent of that in the entire State; or
- Be contiguous with a census tract meeting one of the above conditions and have a median income less than 125 percent of the qualifying contiguous census tract. [0]
[0] https://www.rd.usda.gov/sites/default/files/ImpactofOpportun...
I see the idea behind it, but I feel the end result will just be gentrification - which may not be a bad thing in the long run.
> I feel the end result will just be gentrification
It is literally a tax break for gentrifying. "Build in this poor area and you don't pay taxes".
It is literally a tax break for gentrifying. "Build in this poor area and you don't pay taxes".
There's an opportunity zone adjacent to Palo Alto that extends into Menlo Park. It has a Four Seasons hotel in it. There are other areas nearby that could use the investment incentive a lot more IMO. Who decided on these zones? Seems totally arbitrary.
I think that's East Palo Alto, a historically low income area:
https://opportunitydb.com/zones/06081612100/
Yeah but most of East Palo Alto isn't in the zone, and part of Menlo Park is.
The borders are based on census tracts with low average income. The complete list of zones is here: https://www.irs.gov/pub/irs-drop/n-18-48.pdf
I'm not sure who draws census tract lines.
I'm not sure who draws census tract lines.
Arbitrarily and Irish myself seeing three streets of Irish name makes me assume long term economic doldrums. Saying this isn't a good feeling but one generation removed from poverty that's what I am programmed to think. (I'm not young my mother was born in '31)
Governors. Many tracts were selected as political favors to donors to developers who already owned significant acreage in the OZ.
> Who decided on these zones?
The wealthy
The wealthy
Wow, this is awesome. So for even a small amount of money, such as in the Kara $1120 example, you simply need to have offices or even cowork in a particular area and you get to write off all capital gains taxes. I'll need to look more into this for my corporation...
Well, it's not "simply that", the corporation also needs to be registered in a particular way and the investment in that corporation needs to be done in a particular way, as the article describes - complying accurately seems tricky, but seems doable if you want to.
Assuming this is about being a US citizen and doing this:
Option B: Move to Puerto Rico, run your company from here, do Act 60, zero capital gains tax.
It's challenging to build a successful billion-dollar-exit company in PR, though.
Option B: Move to Puerto Rico, run your company from here, do Act 60, zero capital gains tax.
It's challenging to build a successful billion-dollar-exit company in PR, though.
why is it challenging? especially in a more remote friendly world we live in
Infrastructure sucks relatively to almost everywhere else in the US (better than other territories, probably better than parts of Alaska). Legal system is really bad (bad hybrid of old Spanish law, 1950s American law, and nearly a century of corruption). High costs (inherent to being on an island) combined with regulatory/etc. burden raising costs.
It makes sense for completely vertically integrated businesses which are highly profitable (some software, crypto, pharma production), but it's not a place you'd put most businesses. compared to Florida/Texas (low tax low cost), a lot of other parts of the US (low cost moderate tax), or CA/NY/etc. (high talent pool, high tax).
It can be done, it's just harder, and it's probably not worth saving 20% long-term capital gains (if successful) this way vs. a higher change of a successful outcome at all otherwise. But for some specific kinds of businesses it works great.
It makes sense for completely vertically integrated businesses which are highly profitable (some software, crypto, pharma production), but it's not a place you'd put most businesses. compared to Florida/Texas (low tax low cost), a lot of other parts of the US (low cost moderate tax), or CA/NY/etc. (high talent pool, high tax).
It can be done, it's just harder, and it's probably not worth saving 20% long-term capital gains (if successful) this way vs. a higher change of a successful outcome at all otherwise. But for some specific kinds of businesses it works great.
Pharma is no longer a great choice for PR. Several of the various federal advantages to locating there have expired
It still is relatively better to do pharma in PR than many other industries in PR, since it has an established workforce and a bunch of facilities, and there are PR-specific tax breaks under IRC 933 (just no longer 936). There's established pharma, and sometimes line extensions; not sure if anyone would put a new pharma startup here.
Microsoft lost their tax case so they're GTFO after >10 years, though; that probably also discourages similar IP-embodied manufacturing in pharma.
Microsoft lost their tax case so they're GTFO after >10 years, though; that probably also discourages similar IP-embodied manufacturing in pharma.
True. If you have to locate in PR, might as well be pharma. And there are no reasons to move existing lines.
Are you saying it's not challenging to have a billion-dollar exit?
Is this really what people strive for in the USA. To avoid contributing anything back to the country that helped them achieve everything they've ever wanted?
The government is not a charity. If they have deemed something to be non-taxable, it's because the government (and by extension, the people it represents) want to incentivize that particular activity, in this case investing in economically depressed areas.
If at some point we no longer want to incentivize that behavior, the government can simply remove the tax break. Moralizing about how people shouldn't engage in the behavior that the government is encouraging them to by offering tax incentives is beyond useless.
If at some point we no longer want to incentivize that behavior, the government can simply remove the tax break. Moralizing about how people shouldn't engage in the behavior that the government is encouraging them to by offering tax incentives is beyond useless.
The author suggests operating in areas near colleges because they're developed but the students artificially depress the wages (there's a big difference between a median income of $10k for a neighborhood of families vs college students). Selling these tax laws as the will of the people is a bit of a stretch.
Afaik the local governments choose the opportunity zones. They probably put those zones next to colleges because they met the requirements AND someone locally thought it would be a good idea to develop there. I definitely still think it's the will of the people deciding how to allocate some money that would otherwise sit in a stock much longer instead.
> If at some point we no longer want to incentivize that behavior, the government can simply remove the tax break.
Yes, as we’ve seen, it is very easy to get the government to repeal a loophole that enables a billion-dollar company to dodge a tax. Why, it is virtually child’s play! The poors just need to hire a lobbyist, outspend the tax-dodging lobbyists, and Bob’s yer uncle! The government, as you say, will simply remove the tax break.
Yes, as we’ve seen, it is very easy to get the government to repeal a loophole that enables a billion-dollar company to dodge a tax. Why, it is virtually child’s play! The poors just need to hire a lobbyist, outspend the tax-dodging lobbyists, and Bob’s yer uncle! The government, as you say, will simply remove the tax break.
This is why people should stop complaining about religions. Of course it's done for the tax break. You don't cede power when the government allows you to grab it. If you want your special interest group to thrive in the US, get with the program and exploit the tax loopholes before they're gone.
I can't imagine what it's like to live in your head. It's like you can't even grasp how what you said is wrong on so many levels.
The US government is the worlds largest charity, it also does a lot of other things. However it accepts donations and supports the poor, arts and sciences etc.
There are even plenty of things people might want to donate too that only governments do, the Red Cross etc are hardly building space telescopes or US highways.
There are even plenty of things people might want to donate too that only governments do, the Red Cross etc are hardly building space telescopes or US highways.
Taxes are not donations. You don’t go to jail if you refuse to give a donation.
Never said they where, but you can donate money to the US government:
https://www.gsa.gov/about-us/regions/welcome-to-the-greater-...
https://www.gsa.gov/about-us/regions/welcome-to-the-greater-...
> it also does a lot of other things.
I'm not sure if the positive contribution by US exceeds its negative contribution, such as destruction of Middle East and large parts of South America.
It’s difficult to compare. Seatbelts alone have saved significantly more lives than every middle eastern intervention cost but it’s hard to say how long before someone else came up with them.
What would have happened without an open GPS? Without TCP/IP or all that medical research etc etc.
Now try to figure out what WWII would have looked like without lend lease etcand I just have no idea.
PS: I doubt most charities are a net positive impact, but again it’s complicated.
What would have happened without an open GPS? Without TCP/IP or all that medical research etc etc.
Now try to figure out what WWII would have looked like without lend lease etcand I just have no idea.
PS: I doubt most charities are a net positive impact, but again it’s complicated.
> investing in economically depressed areas.
Except the wealthy play games like extending Harlem through central park to midtown so that they can fund building their own luxury apartments as economic development in a "depressed" area.
Except the wealthy play games like extending Harlem through central park to midtown so that they can fund building their own luxury apartments as economic development in a "depressed" area.
It's one of those irregular verbs, isn't it? I do business, he is cheating, they are corrupt.
> If at some point we no longer want to incentivize that behavior, the government can simply remove the tax break.
But then these corrupt, America-hating billionaires will spend millions digging up dirt on you, funding your opponents, and claiming you’re sending jobs to China.
But then these corrupt, America-hating billionaires will spend millions digging up dirt on you, funding your opponents, and claiming you’re sending jobs to China.
Or...the government is corrupt and used by the wealthy to write loop holes that allow them to escape paying taxes.
If you think it's corrupt for the government to offer incentives for people to invest in underserved areas where they otherwise wouldn't, by all means, write your representatives, or run for office yourself to end this corrupt practice.
Speaking out about it is also a valid action, you know. In fact if you want to be a single issue candidate and actually get elected, it’s probably a requirement.
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Seems to me that "the wealthy" could come up with simpler loopholes without the pesky requirement to actually invest money in depressed areas.
It's not like the actions proposed by this article amount to any investment at in those depressed areas, it's just registering your company there but not actually doing anything which would benefit that neighborhood.
That's not correct. The article glosses over this, but if you read it carefully:
> At least 90% of [the QOF's] assets must be “qualified opportunity zone property” which can be any combination of (1) stock in a QOZB corporation, (2) partnership interest in a QOZB structured as an LLC or other pass-through partnership entity, and/or (3) qualified opportunity zone business property. However, this requirement doesn’t take effect immediately which means the QOF has time to find qualifying investments without rushing. Additionally, the 90% rule temporarily loosens if you deposit more cash into the QOF.
So you have to invest the assets either in (qualified) property in the depressed area, or in a company (QOZB) in the depressed area, which then has to meet these requirements among others:
> At least 50% of [the QOZB's] total gross income is derived from the conduct of a business in a qualified opportunity zone.
> At least 40% of [the QOZB's] intangible property (e.g. patents, trademarks, etc) must be actively used inside a qualified opportunity zone.
> At least 70% of [the QOZB's] tangible property owned or leased by the business must be qualified opportunity zone business property.
If this is some giant conspiracy by "the wealthy" to get some tax benefits, it's odd that they have put so much effort into making sure there is actual economic benefit for the depressed areas.
> At least 90% of [the QOF's] assets must be “qualified opportunity zone property” which can be any combination of (1) stock in a QOZB corporation, (2) partnership interest in a QOZB structured as an LLC or other pass-through partnership entity, and/or (3) qualified opportunity zone business property. However, this requirement doesn’t take effect immediately which means the QOF has time to find qualifying investments without rushing. Additionally, the 90% rule temporarily loosens if you deposit more cash into the QOF.
So you have to invest the assets either in (qualified) property in the depressed area, or in a company (QOZB) in the depressed area, which then has to meet these requirements among others:
> At least 50% of [the QOZB's] total gross income is derived from the conduct of a business in a qualified opportunity zone.
> At least 40% of [the QOZB's] intangible property (e.g. patents, trademarks, etc) must be actively used inside a qualified opportunity zone.
> At least 70% of [the QOZB's] tangible property owned or leased by the business must be qualified opportunity zone business property.
If this is some giant conspiracy by "the wealthy" to get some tax benefits, it's odd that they have put so much effort into making sure there is actual economic benefit for the depressed areas.
> The government is not a charity.
Not unless you're extremely rich or extremely poor, that is.
Not unless you're extremely rich or extremely poor, that is.
> (and by extension, the people it represents)
This is where your argument breaks down. Gerrymandering has completely eliminated this as a reasonable belief in most places.
Most voters don't even care about issues, they care about parties, their team. As such, they don't care or want to incentive anything except their own team winning.
> the government can simply remove the tax break.
If most people want abortion to be legal, the government can simply legalize it.
Oh wait!
This is where your argument breaks down. Gerrymandering has completely eliminated this as a reasonable belief in most places.
Most voters don't even care about issues, they care about parties, their team. As such, they don't care or want to incentive anything except their own team winning.
> the government can simply remove the tax break.
If most people want abortion to be legal, the government can simply legalize it.
Oh wait!
> Most voters don't even care about issues, they care about parties, their team. As such, they don't care or want to incentive anything except their own team winning.
Seems like the problem is the voters then.
> If most people want abortion to be legal, the government can simply legalize it.
Per your earlier statement, that is not what most voters want. They want their team to win.
Seems like the problem is the voters then.
> If most people want abortion to be legal, the government can simply legalize it.
Per your earlier statement, that is not what most voters want. They want their team to win.
> Seems like the problem is the voters then.
Yes. That means that your claim
> it's because the government (and by extension, the people it represents) want to incentivize that particular activity
particularly the
> (and by extension, the people it represents)
is false.
----
> Per your earlier statement, that is not what most voters want. They want their team to win.
False. The vast majority of people want their team to win.
Simultaneously, most people want abortion to be legal.
These statements are both true. The logical fallacy is here is an inability to recognize that it's and, not or.
Yes. That means that your claim
> it's because the government (and by extension, the people it represents) want to incentivize that particular activity
particularly the
> (and by extension, the people it represents)
is false.
----
> Per your earlier statement, that is not what most voters want. They want their team to win.
False. The vast majority of people want their team to win.
Simultaneously, most people want abortion to be legal.
These statements are both true. The logical fallacy is here is an inability to recognize that it's and, not or.
It's not false. You're confusing stated preferences vs. revealed preferences. People might say they want to enshrine their legal right to abortion or that they don't want people to get tax breaks for investing in depressed areas, but they don't do anything that would actually make those preferences a reality (i.e. elect candidates based on those issue who will enact the policies people say they want). So when it comes down to it, people do not actually want those things enough to take the actions necessary to make them happen.
It is false. You're confusing people prioritizing their teams winning over wanting other things.
In an ideal world, they would want both and would get both. However they have to pick. Hence it is not that they don't want it, it is that they want it and cannot get it because they don't want to pay the cost of getting it.
In an ideal world, they would want both and would get both. However they have to pick. Hence it is not that they don't want it, it is that they want it and cannot get it because they don't want to pay the cost of getting it.
Do you also give all your information to a random caller that offers you a free cruise? I think you forgot that politicians are legally bribed to behave against the wishes and/or needs of the people.
You're right that moralizing is beyond useless. Instead let's define the bounds of our morality by our tax code. What can go wrong?
You're right that moralizing is beyond useless. Instead let's define the bounds of our morality by our tax code. What can go wrong?
I assume when you file your taxes, you refuse all deductions and tax credits that you're eligible for, because obviously the most moral thing is to give as much of your money to the government as possible, right?
Most of us don’t lobby the government to write laws that carve out near-zero tax burdens.
Which, with the growing wealth inequality, explains that why the tax burden on the middle income keeps stable or grows; while services and benefits keep shrinking.
Which, with the growing wealth inequality, explains that why the tax burden on the middle income keeps stable or grows; while services and benefits keep shrinking.
Tax returns with AGI over $200k represent 5.7% of returns filed and account for 61.7% of taxes paid. [1]
What ratio would you consider fair?
[1] Data is from 2019, the latest available from the IRS: https://www.irs.gov/statistics/soi-tax-stats-individual-stat...
What ratio would you consider fair?
[1] Data is from 2019, the latest available from the IRS: https://www.irs.gov/statistics/soi-tax-stats-individual-stat...
For starters, how about paying at least the capital gains rate?
For large businesses, they’re finding ways to pay less than 20%.
But tabulate all of the ongoing costs to build and maintain our national infrastructure, legal system (no business without the courts), law enforcement branches, etc.
Deduct the income taxes currently levied on wage earners.
Roughly, the rest of the money needs to come from corporate taxes and capital gains.
That’s not what’s happening though. Instead, it’s quite alright to double tax middle income earners.
If you recall, property tax deductions were capped and so overnight the Republican government found a way to increase the average earners’s budget. Mortgage interest deductions are next.
For large businesses, they’re finding ways to pay less than 20%.
But tabulate all of the ongoing costs to build and maintain our national infrastructure, legal system (no business without the courts), law enforcement branches, etc.
Deduct the income taxes currently levied on wage earners.
Roughly, the rest of the money needs to come from corporate taxes and capital gains.
That’s not what’s happening though. Instead, it’s quite alright to double tax middle income earners.
If you recall, property tax deductions were capped and so overnight the Republican government found a way to increase the average earners’s budget. Mortgage interest deductions are next.
> For starters, how about paying at least the capital gains rate?
> For large businesses, they’re finding ways to pay less than 20%.
People do pay capital gains tax when they realize capital gains. What makes you think they don't?
Businesses pay corporate income tax which is a different thing altogether. They're already double-taxed (when the company turns a profit, and again when they distribute those profits to shareholders).
> But tabulate all of the ongoing costs to build and maintain our national infrastructure, legal system (no business without the courts), law enforcement branches, etc.
> Deduct the income taxes currently levied on wage earners.
> Roughly, the rest of the money needs to come from corporate taxes and capital gains.
Not true at all. There are excise taxes, import duties, sales and property taxes (these fund local and state governments, which handle a lot of the courts and law enforcement), payroll taxes (paid by the employer, not part of the income tax). There are other options that are not implemented in the US, like VAT, land-value taxes, financial transaction taxes. The government also has other sources of funding like fines, fees, bonds, inflation. There are many things besides capital gains and corporate income taxes.
> If you recall, property tax deductions were capped and so overnight the Republican government found a way to increase the average earners’s budget. Mortgage interest deductions are next.
The average earner doesn't itemize deductions because they won't exceed the standard deduction, which was raised at the same time that the state and local tax deductions were capped. Those deductions were mainly a way to subsidize states that charge high state taxes (which happen to have more high earners) at the expense of states which charge low income taxes (and happen to have lower earners).
Mortgage interest deductions are already capped and again mainly benefit higher earners who can afford large mortgages that would actually have enough interest to make it worthwhile to itemize.
> For large businesses, they’re finding ways to pay less than 20%.
People do pay capital gains tax when they realize capital gains. What makes you think they don't?
Businesses pay corporate income tax which is a different thing altogether. They're already double-taxed (when the company turns a profit, and again when they distribute those profits to shareholders).
> But tabulate all of the ongoing costs to build and maintain our national infrastructure, legal system (no business without the courts), law enforcement branches, etc.
> Deduct the income taxes currently levied on wage earners.
> Roughly, the rest of the money needs to come from corporate taxes and capital gains.
Not true at all. There are excise taxes, import duties, sales and property taxes (these fund local and state governments, which handle a lot of the courts and law enforcement), payroll taxes (paid by the employer, not part of the income tax). There are other options that are not implemented in the US, like VAT, land-value taxes, financial transaction taxes. The government also has other sources of funding like fines, fees, bonds, inflation. There are many things besides capital gains and corporate income taxes.
> If you recall, property tax deductions were capped and so overnight the Republican government found a way to increase the average earners’s budget. Mortgage interest deductions are next.
The average earner doesn't itemize deductions because they won't exceed the standard deduction, which was raised at the same time that the state and local tax deductions were capped. Those deductions were mainly a way to subsidize states that charge high state taxes (which happen to have more high earners) at the expense of states which charge low income taxes (and happen to have lower earners).
Mortgage interest deductions are already capped and again mainly benefit higher earners who can afford large mortgages that would actually have enough interest to make it worthwhile to itemize.
Who are you in real life? You don't sound like someone who works in software programming for a living or understand what poverty is like. Are you an exec? A manager?
The utility of money decreases the more you have (outside of lifestyle inflation). When basic needs of society (like housing) aren't being met, there shouldn't be a cap on what the wealthy pay imo.
The "money" the very wealthy have is not cash sitting in a checking account but usually shares in some corporation. That absolutely has utility if you want to continue having a say in how your company is run. Besides, should the government come around and check for any property that it deems you're not sufficiently utilizing and confiscate it from you? It seems like that policy could be abused.
The government already controls a budget in the trillions of dollars - several orders of magnitude more than any private entity - and so far has not used it to meet basic needs like housing. What is the evidence that giving them additional money will solve the problem? It doesn't cost anything to relax zoning laws and let people build more housing.
The government already controls a budget in the trillions of dollars - several orders of magnitude more than any private entity - and so far has not used it to meet basic needs like housing. What is the evidence that giving them additional money will solve the problem? It doesn't cost anything to relax zoning laws and let people build more housing.
Not the OP but
> The "money" the very wealthy have is not cash sitting in a checking account but usually shares in some corporation. That absolutely has utility if you want to continue having a say in how your company is run.
So what? That’s the cost of of going public. That the wealthy found a way to abuse it (share classes) means they’ve made the stock market less useful for everyone else.
> Besides, should the government come around and check for any property that it deems you're not sufficiently utilizing and confiscate it from you? It seems like that policy could be abused.
You’re jumping the gun here but…
The government is already involved in property rights. There is no concept of ownership without a government supported legal framework.
A government is expected to be involved with limited resources, and discourage undesirable outcomes while encouraging good ones. My government does this through tax benefits and tax penalties.
I don’t see most people asking for more than this.
> The "money" the very wealthy have is not cash sitting in a checking account but usually shares in some corporation. That absolutely has utility if you want to continue having a say in how your company is run.
So what? That’s the cost of of going public. That the wealthy found a way to abuse it (share classes) means they’ve made the stock market less useful for everyone else.
> Besides, should the government come around and check for any property that it deems you're not sufficiently utilizing and confiscate it from you? It seems like that policy could be abused.
You’re jumping the gun here but…
The government is already involved in property rights. There is no concept of ownership without a government supported legal framework.
A government is expected to be involved with limited resources, and discourage undesirable outcomes while encouraging good ones. My government does this through tax benefits and tax penalties.
I don’t see most people asking for more than this.
> A government is expected to be involved with limited resources, and discourage undesirable outcomes while encouraging good ones. My government does this through tax benefits and tax penalties.
You mean like offering a tax break to incentivize investment in certain areas?
I don't think someone being able to continue owning a portion of a company they created is a undesirable outcome, do you?
You mean like offering a tax break to incentivize investment in certain areas?
I don't think someone being able to continue owning a portion of a company they created is a undesirable outcome, do you?
The wealthy and the government are generally rather intertwined wouldn't you agree? It's not a matter of budget but of sharing a scarce resource, something the wealthy and powerful, (and so by extension the government) are historically not so inclined to do. Taxation is a means of systematising the sharing of resources.
Yes.
Yes. The "privatize gains, socialize losses" thing isn't just an empty meme, it's a legitimate (read: "not strictly illegal") and highly profitable strategy.
it's not completely free money - you have to invest in qualified funds/businesses, which is located in areas of low economic opportunity that the gov't wants to incentivize businesses to start operating in.
This is effectively a tax incentive to open new businesses in these somewhat remote and low-income areas. I dont think it's a bad thing if it does indeed encourage job creation and economic activity in those areas that otherwise would've stagnated.
This is effectively a tax incentive to open new businesses in these somewhat remote and low-income areas. I dont think it's a bad thing if it does indeed encourage job creation and economic activity in those areas that otherwise would've stagnated.
I don't know why you're being downvoted. While I would commonly understand people want to avoid taxes, I think there's a real question in there:
Why don't people want to contribute back to an environment that enabled their success?
I have too many family members that will avoid acknowledging anything the government does for them.
"The social contract."
Why don't people want to contribute back to an environment that enabled their success?
I have too many family members that will avoid acknowledging anything the government does for them.
"The social contract."
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Because it's not what the VC's who run this site want the narrative to be and do everything they can to keep tech bros on their side.
> Is this really what people strive for in the USA. To avoid contributing anything back to the country that helped them achieve everything they've ever wanted?
You are working from a flawed model. Government spending is not tied at all to revenue. Over the past three years the federal government has dropped over 5 trillion dollars on the economy from a helicopter.
Why not take advantage of a loophole when money can and is being created out of thin air?
You are working from a flawed model. Government spending is not tied at all to revenue. Over the past three years the federal government has dropped over 5 trillion dollars on the economy from a helicopter.
Why not take advantage of a loophole when money can and is being created out of thin air?
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Capital gains tax is a parasitical tax that punishes people for being responsible with their after-tax money. It also creates massive, massive loopholes that can be abused.
The fairest solution is to scrap CGT and associated capital loss write-offs.
This allows the middle class to thrive by investing in productive enterprises and not getting taxed yet again to do so.
It's the worst kind of tax that punishes success by stealing your after-tax money.
As for your appeal to nation, the US will waste your money on slaughtering Afghanistani children with bombs and handing out cash to serial fraudsters (look up how many people on Social Security are actually real). Most tax money is wasted by government.
The fairest solution is to scrap CGT and associated capital loss write-offs.
This allows the middle class to thrive by investing in productive enterprises and not getting taxed yet again to do so.
It's the worst kind of tax that punishes success by stealing your after-tax money.
As for your appeal to nation, the US will waste your money on slaughtering Afghanistani children with bombs and handing out cash to serial fraudsters (look up how many people on Social Security are actually real). Most tax money is wasted by government.
There are two groups slicing the worker's cheese. One is the state, they claim tax. The other is the investors, they claim profit.
Calling out other parasites, don't forget you also are one.
Calling out other parasites, don't forget you also are one.
This can only be true if you hold humans in such low regard that you think they cannot make an informed choice about where to work and under which conditions.
Any example of a cooperative usually descends into chaos, an example being worker's unions which descend into criminality, corruption and pure evil (teacher's unions regularly defend sexual predator teachers, for example) more often than not.
It's also a pure fallacy and just plain wrong to suggest I claim profit from Cloudflare. Cloudflare has not and does not issue dividends, meaning all of the profit is reinvested in business operations or goes to the workers.
As an investor, I don't see a single cent of profit in this case.
Any example of a cooperative usually descends into chaos, an example being worker's unions which descend into criminality, corruption and pure evil (teacher's unions regularly defend sexual predator teachers, for example) more often than not.
It's also a pure fallacy and just plain wrong to suggest I claim profit from Cloudflare. Cloudflare has not and does not issue dividends, meaning all of the profit is reinvested in business operations or goes to the workers.
As an investor, I don't see a single cent of profit in this case.
> sexual predator teachers
You need to chill, dude. I am not defending child molesters. I am not even claiming that capital investment is evil. I am simply pointing out the fact that the relation is parasitic.
> As an investor, I don't see a single cent of profit in this case.
Then you aren't paying capital gains tax either, so I don't see the problem.
I'm curious though, do you also not expect to get any profit for this particular investment in the future? When you have got back your inflation adjusted initial capital + a modest interest + a reward for the risk, do you mail your share certificates back to Cloudflare with a note, thank you, good doing business with you?
You need to chill, dude. I am not defending child molesters. I am not even claiming that capital investment is evil. I am simply pointing out the fact that the relation is parasitic.
> As an investor, I don't see a single cent of profit in this case.
Then you aren't paying capital gains tax either, so I don't see the problem.
I'm curious though, do you also not expect to get any profit for this particular investment in the future? When you have got back your inflation adjusted initial capital + a modest interest + a reward for the risk, do you mail your share certificates back to Cloudflare with a note, thank you, good doing business with you?
You don't appear to understand how either stocks or CGT works.
Cloudflare does not issue dividends. Dividends are distributions of profit. If I bought Cloudflare stock at $30 and sold at $90, for example, the $60 profit I'm making isn't taken from Cloudflare, it's paid by the buyer on the other end of the stock trade, which is usually an institution or a retail buyer.
I'm not and are never "taking profit" from Cloudflare, in fact I provide them liquidity and also allow them to dilute my ownership in order to pay their employees in stock grants.
Selling shares doesn't really mean the company is hurt by it, especially since I'm a retail investor who doesn't have the capital to impact the price even a single cent.
Owning their stock when they aren't paying dividends is a bet that either growth of the company will inflate the price so I can profit, or it's a bet that they'll one day issue dividends (not anytime soon).
Cloudflare does not issue dividends. Dividends are distributions of profit. If I bought Cloudflare stock at $30 and sold at $90, for example, the $60 profit I'm making isn't taken from Cloudflare, it's paid by the buyer on the other end of the stock trade, which is usually an institution or a retail buyer.
I'm not and are never "taking profit" from Cloudflare, in fact I provide them liquidity and also allow them to dilute my ownership in order to pay their employees in stock grants.
Selling shares doesn't really mean the company is hurt by it, especially since I'm a retail investor who doesn't have the capital to impact the price even a single cent.
Owning their stock when they aren't paying dividends is a bet that either growth of the company will inflate the price so I can profit, or it's a bet that they'll one day issue dividends (not anytime soon).
From the company POV the capital investment is the outstanding shares. The shares need to be kept happy with some combination of immediate profit and continuosly growing projection of future profit (i.e. investing into growth), or they start to lose value in the market and become even more unhappy. Eventually investing into growth runs into diminishing returns and immediate profit becomes the dominant component.
The profit you get from buying and selling on the market is either a result of the shares being kept happy, or taking advantage of market mechanics. The latter is mostly a form of gambling that doesn't produce value.
The profit you get from buying and selling on the market is either a result of the shares being kept happy, or taking advantage of market mechanics. The latter is mostly a form of gambling that doesn't produce value.
It's not parasitic, it's symbiotic. Without profit-seeking capital, there would be no opportuinities for productive labor.
It starts off as symbiotic (you give capital for future profit), but becomes parasitic (you just keep leeching profit without giving anything more in return).
At least, that is what I plan to do. Stop working and live as a full-time parasite as soon as I can afford it. Maybe others here are more altruistic.
At least, that is what I plan to do. Stop working and live as a full-time parasite as soon as I can afford it. Maybe others here are more altruistic.
Buying a non-dividend stock and selling it a higher price does not cost the company a cent. The profit doesn't come from the company at all.
You can't think of any reason people would provide productive labor without their being profit-seeking capital? Do you really, truly believe that? If you do, I have a bridge to sell you.
> This allows the middle class to thrive by investing in productive enterprises and not getting taxed yet again to do so.
The same money isn't taxed again. Only the gains on top of that.
Some sort of tax on wealth or the proceeds of that wealth is necessary, otherwise you end up with a society where only the middle class pays tax while the people who benefit the most from society, the rich, live tax-free. It's either this or a simple wealth tax.
The same money isn't taxed again. Only the gains on top of that.
Some sort of tax on wealth or the proceeds of that wealth is necessary, otherwise you end up with a society where only the middle class pays tax while the people who benefit the most from society, the rich, live tax-free. It's either this or a simple wealth tax.
It's a free market approach. The alternative is that the government collects money everywhere equally and then go and invest/pump money into these area. If the area is tax negative (requires more government money than it brings in), then might as well give it tax breaks; if that economic activity can break it off the cycle.
The very fact that some of these places exist for a long time; means that it's not worth it to invest in them even with the tax breaks.
The very fact that some of these places exist for a long time; means that it's not worth it to invest in them even with the tax breaks.
I think, like most things, it’s a bell curve - the bulk of the people want to contribute a reasonable amount while some want contribute none and some extra. The glaring issue in the United States is how much capital is gained — though I prefer ‘allocated to’, as the people do the work — by a minuscule portion of the population and the paltry taxes they then pay.
> the bulk of the people want to contribute a reasonable amount
Not sure that’s correct. https://thehill.com/policy/finance/599753-study-57-percent-o...
Not sure that’s correct. https://thehill.com/policy/finance/599753-study-57-percent-o...
Apparently it’s the American dream. Over half of US workers pay zero federal tax. https://thehill.com/policy/finance/599753-study-57-percent-o...
Thank god for you. Wish I could upvote this 10x :-)
This is America...
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The government of USA is incredibly inefficient at getting anything done.
If I had billions of dollars I would always strive to legally pay as least taxes as possible and use the funds to contribute back the country in much more efficient ways, including investing in people who are provably getting shit done.
Here's the latest of a constant firehose of misuse of funds I've seen. The gist is that a Stanford professor is basically leeching $40K of tax money at a $5000/hr rate for "consulting" about social justice and equity in schools. I'd rather give that $40K directly toward educational supplies for underprivileged students, or to a hundred tutors and therapists at $50/hr, or something else.
https://nypost.com/2022/04/08/stanford-prof-calls-cops-on-be...
If I had billions of dollars I would always strive to legally pay as least taxes as possible and use the funds to contribute back the country in much more efficient ways, including investing in people who are provably getting shit done.
Here's the latest of a constant firehose of misuse of funds I've seen. The gist is that a Stanford professor is basically leeching $40K of tax money at a $5000/hr rate for "consulting" about social justice and equity in schools. I'd rather give that $40K directly toward educational supplies for underprivileged students, or to a hundred tutors and therapists at $50/hr, or something else.
https://nypost.com/2022/04/08/stanford-prof-calls-cops-on-be...
A state school professor (Berkeley) called out a private school professor (Stanford) for a $5k/hour BS consulting fee.
How does that make your case?
How does that make your case?
That BS consulting fee comes from my taxes.
Strange that you pick a minuscule—nay, pissant—cost, when you could point to other waste that is literally millions of orders of magnitude greater. The BS consulting fee cost you perhaps a hundred-thousandth of a penny. The unnecessary war in Iraq cost you tens of thousands of dollars. Billions in subsidies to oil companies that are earning record-breaking profits is costing you hundreds of dollars.
Don’t let clickbait distract you from the real pain.
Don’t let clickbait distract you from the real pain.
> literally millions of orders of magnitude greater
One order of magnitude is literally 10x (10¹) Two orders of magnitudes is 100x (10²) A million orders of magnitude would be 10¹⁰⁰⁰⁰⁰⁰. Millions of orders of magnitude would be larger still.
There are estimated between 10⁷⁸ to 10⁸² atoms in the universe.
Perhaps you meant to say “literally six to nine” rather than “literally millions”?
One order of magnitude is literally 10x (10¹) Two orders of magnitudes is 100x (10²) A million orders of magnitude would be 10¹⁰⁰⁰⁰⁰⁰. Millions of orders of magnitude would be larger still.
There are estimated between 10⁷⁸ to 10⁸² atoms in the universe.
Perhaps you meant to say “literally six to nine” rather than “literally millions”?
Indeed. The point remains: OP has been fooled into fretting about relatively nothing so that the real issues aren’t noticed.
Strange that you didn't see this part
"the latest of a constant firehose"
"the latest of a constant firehose"
Are you an Oxnard resident? How much of the school system is funded federally versus state versus locally?
I agree it’s wasteful, but this seems more an indictment of Stanford and the veneer of prestige.
It’s also tax dollars that put a check on the nonsense.
I agree it’s wasteful, but this seems more an indictment of Stanford and the veneer of prestige.
It’s also tax dollars that put a check on the nonsense.
Oh dang... Why didn't I find this information 6 months ago. I freaking hate my life right now.
You had a billion dollar exit 6 months ago and you hate your life right now?!
~$1M capital gain 9 months ago and it's too late to roll it into an opportunity zone.
I'm on the point of panic about taxes right now and still trying to sort out my expenses over the last 2 years which do include about $500k in investment in one of the poorest areas in the country. My location just happens to be gerrymandered out of the local opportunity zone though.
I'm on the point of panic about taxes right now and still trying to sort out my expenses over the last 2 years which do include about $500k in investment in one of the poorest areas in the country. My location just happens to be gerrymandered out of the local opportunity zone though.
Probably started a startup, but not from capital gains and not in an opportunity zone.
The closest opportunity zone is 5 miles away, includes a large mall, mixed use development, upscale retail spaces, a Trader Joe's, etc.
Meanwhile, I am surrounded by vacant lots, a large mall that is entirely dead and vacant, low income housing, one tiny strip mall with a convenience store, and another with a church, dollar store, and liquor store (a mile away).
I can see though that the OZ tract is tiny, whereas the tract I'm in is about 7 x larger and includes some more supermarkets and malls further away that are very active though not upscale.
Looks like a fairly straightforward case of economic gerrymandering.
Meanwhile, I am surrounded by vacant lots, a large mall that is entirely dead and vacant, low income housing, one tiny strip mall with a convenience store, and another with a church, dollar store, and liquor store (a mile away).
I can see though that the OZ tract is tiny, whereas the tract I'm in is about 7 x larger and includes some more supermarkets and malls further away that are very active though not upscale.
Looks like a fairly straightforward case of economic gerrymandering.
If you want to start a software company in a QOZ with, say, $1M of recent capital gains, more cash than you expect to use in the short term, what does the QOZB do with the cash to avoid breaking the 90% rule?
From the article:
> No more than 5% of a QOZB’s assets can be “nonqualified financial property”. Nonqualified financial property includes most types of financial assets such as stocks and bonds but excludes cash, loans with a term of 18 months or less, and accounts receivable acquired in the ordinary course of business.
Cash on hand is ignored.
However, I speculate that if you put said cash in an interest gathering bank account, the IRS might have a firmer view.
So you're likely capitalizing the business with cash on hand that cannot attract meaningful interest.
> No more than 5% of a QOZB’s assets can be “nonqualified financial property”. Nonqualified financial property includes most types of financial assets such as stocks and bonds but excludes cash, loans with a term of 18 months or less, and accounts receivable acquired in the ordinary course of business.
Cash on hand is ignored.
However, I speculate that if you put said cash in an interest gathering bank account, the IRS might have a firmer view.
So you're likely capitalizing the business with cash on hand that cannot attract meaningful interest.
This is gross.
Nope, this is on the net sale of the asset not gross income.
In terms of gross, you need at least 50% gross income in the qualified opportunity zone.
In terms of gross, you need at least 50% gross income in the qualified opportunity zone.
> The regulations provide three safe harbors that a business may use to meet this test. These safe harbors take into account any of the following:
> - Whether at least half of the aggregate hours of services received by the business were performed in a QOZ;
> - Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or
> - Whether necessary tangible property and necessary business functions to earn the income were located in a QOZ.
So "in" is flexible.
> - Whether at least half of the aggregate hours of services received by the business were performed in a QOZ;
> - Whether at least half of the aggregate amounts that the business paid for services were for services performed in a QOZ; or
> - Whether necessary tangible property and necessary business functions to earn the income were located in a QOZ.
So "in" is flexible.
This is an argument for either flat tax or a tax system without deductions, otherwise we will always have loopholes like this. You can’t have your cake and eat it too.
I will always advocate for a simple cash wealth transfer via UBI and increasing tax rates to whatever amounts needed to accomplish it, and remove all deductions/credits/exemptions, etc.
But in the meantime, it still makes sense for me to play the game with the rules as they are.
But in the meantime, it still makes sense for me to play the game with the rules as they are.
You still owe capital gains on the original proceeds, deferred a few years and with a possible 10-15% basis step up. This isn't zero capital gains tax.
If you happen to have a billion dollar exit on your reinvested capital gains that can be tax free, but you're still paying tax on the original gain.
If you happen to have a billion dollar exit on your reinvested capital gains that can be tax free, but you're still paying tax on the original gain.
It might as well be zero when the original "investment" is a token amount you put in at the founding of a startup.
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Flat tax on all the money you gained regardless of how. You make a dollar you pay 10 cents. Done.
... and let others pay for the upkeep of the country that enabled your success :).
If we keep putting special-interest clauses in our tax codes like these 'business opportunity zones' without expecting everyone who is capable to come in and exploit them to the maximum extent possible, that is really on us.
Of course! However, that argument is a bit moot when you consider the overlap that exists between political power and economic power, and more crucially this: https://yewtu.be/watch?v=PJy8vTu66tE
The intent is that people will show up and use them.
The main intent is that they be things like machine shops and the like that supply jobs and a bit of spin of economic activity (workers go get lunch etc).
Having people work in a coworking space may not be what they had in mind, but if those people go out to lunch in the zone, mission accomplished.
You can argue if that works well or not but the tax advantage does not exist in a vacuum.
The main intent is that they be things like machine shops and the like that supply jobs and a bit of spin of economic activity (workers go get lunch etc).
Having people work in a coworking space may not be what they had in mind, but if those people go out to lunch in the zone, mission accomplished.
You can argue if that works well or not but the tax advantage does not exist in a vacuum.
In many states OZs were selected as political handouts and were placed in areas where development was already planned. The characterization that they lifted up poor regions is pure horseshit.
It adds insult to injury that a billionaire real estate mogul made EXACTLY this argument when selling his tax policy and business conduct (I’m just being a good businessman, and I’ll fix the rigged system by getting rid of loopholes!), then turned around and got rid of special deductions for normal folks and created a massive special interest handout for real estate moguls.
To the surprise of absolutely nobody.
Apparently to the surprise of many! Some people really are terminally gullible.
How can you tell if a rich/powerful person is lying?
Rule of thumb: Their mouth is moving.
Rule of thumb: Their mouth is moving.
Rule of thumb: people don't get to be rich and powerful by being decent and honest.
This particular example inherited his fathers business, which was valuable enough that a half-share was sufficient to move him onto the Forbes 400 list.
Although his father also trained him not to be decent or honest.
Although his father also trained him not to be decent or honest.
got rid of special deductions for normal folks
I assume you're talking about the SALT deduction? The one that mostly benefits the highest income earners?
Interesting how when people personally benefit from a tax break it's "entirely justified", but when someone else does it's a "massive special interest handout".
I assume you're talking about the SALT deduction? The one that mostly benefits the highest income earners?
Interesting how when people personally benefit from a tax break it's "entirely justified", but when someone else does it's a "massive special interest handout".
A two earner household with a cop and a nurse benefited from SALT.
The average beneficiary of opportunity zones is generationally wealthy. A pair of tech workers pulling down 7 figures a year are stupidly wealthy and still would probably not have enough capital to be the primary beneficiary of an opportunity fund.
I’m not going to defend the salt deduction because I’m not a fan of it for the reasons you mention, but comparing SALT to opportunity zones is genuinely delusional.
Pitting the lower middle class against the upper middle class over a modestly regressive tax break while folks who haven’t worked in three generations pay a 0% tax rate on the fruits of others’ labor.
The average beneficiary of opportunity zones is generationally wealthy. A pair of tech workers pulling down 7 figures a year are stupidly wealthy and still would probably not have enough capital to be the primary beneficiary of an opportunity fund.
I’m not going to defend the salt deduction because I’m not a fan of it for the reasons you mention, but comparing SALT to opportunity zones is genuinely delusional.
Pitting the lower middle class against the upper middle class over a modestly regressive tax break while folks who haven’t worked in three generations pay a 0% tax rate on the fruits of others’ labor.
Generationally wealthy seems like a statement that needs some data there.
These investments can be as simple as opening a store. Youre putting up a straw-bogeyman that doesn’t actually exist.
These investments can be as simple as opening a store. Youre putting up a straw-bogeyman that doesn’t actually exist.
Citation sorely needed. What’s the name of that opportunity fund?
I hope you're not implying that my argument is wrong just because Donald Trump once said the same thing disingenuously.
... by investing in places deemed in need of investment, thereby providing jobs and skills and tax base (property, services, income taxes, unemployment taxes, growth in surrounding infrastructure)......
When an investor gets a billion dollar return, remember that is the value from a company that likely provides billions more to local economies.
When an investor gets a billion dollar return, remember that is the value from a company that likely provides billions more to local economies.
> When an investor gets a billion dollar return, remember that is the value from a company that likely provides billions more to local economies.
I have no idea why that would be true, especially if it's an online business where highly paid people go to a campus and don't leave until it's time to drive home.
I have no idea why that would be true, especially if it's an online business where highly paid people go to a campus and don't leave until it's time to drive home.
All Forbes 400 are billion dollar businesses. A tiny, tiny fraction are the type you describe. What makes you think most businesses are your cherry picked type? I see no evidence they constitute any more than a miniscule number of such companies.
Want a bigger list? Here's several thousand billion dollar companies: https://companiesmarketcap.com/
How many don't pay local property, income, unemployment, and other taxes?
Not every new company is an online mythical virtual company. When someone presents reasonable evidence, if your first reaction is to latch onto outliers and pretend they're common, you should check your biases versus reality.
Want a bigger list? Here's several thousand billion dollar companies: https://companiesmarketcap.com/
How many don't pay local property, income, unemployment, and other taxes?
Not every new company is an online mythical virtual company. When someone presents reasonable evidence, if your first reaction is to latch onto outliers and pretend they're common, you should check your biases versus reality.
The Forbes 400 are people (the 400 richest). You are thinking about the Fortune 100/500.
We're on a site about tech startups, reading an article about tax avoidance by a tech startup and many people on the board are saying they want to do that tax avoidance. I don't think I have to worry that I cherry picked the type of company as a tech startup.
> How many don't pay local property, income, unemployment, and other taxes?
Well, we're only talking about the founders/investors paying taxes (cause this is referencing their capital gains). So, the founders wouldn't pay local property (in the low-income district they commute to) or unemployment taxes at all, and the vast majority of their income comes from capital gains, which this is avoiding, so yeah, they don't really pay that either.
We're on a site about tech startups, reading an article about tax avoidance by a tech startup and many people on the board are saying they want to do that tax avoidance. I don't think I have to worry that I cherry picked the type of company as a tech startup.
> How many don't pay local property, income, unemployment, and other taxes?
Well, we're only talking about the founders/investors paying taxes (cause this is referencing their capital gains). So, the founders wouldn't pay local property (in the low-income district they commute to) or unemployment taxes at all, and the vast majority of their income comes from capital gains, which this is avoiding, so yeah, they don't really pay that either.
The tax breaks in question are not specific to your goal post moving subset of tech startups. The founder tax breaks are offered because they bring the benefits I mentioned to the areas specified in the tax breaks.
Furthermore, you're replying to my comment that companies pay significant local taxes.
So yes, if you ignore all other benefits companies bring to the region, ignore the purpose and benefits of those breaks, ignore the comment you're replying to, and ignore that most companies using these tax breaks don't fit your claims, then yes, you can be correct for goalpost moving post selected cherry picking. Congrats.
Furthermore, you're replying to my comment that companies pay significant local taxes.
So yes, if you ignore all other benefits companies bring to the region, ignore the purpose and benefits of those breaks, ignore the comment you're replying to, and ignore that most companies using these tax breaks don't fit your claims, then yes, you can be correct for goalpost moving post selected cherry picking. Congrats.
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Why should anyone have sympathy for a system that tries to take away your freedom by force if you don’t submit to it.
Stop paying your taxes for a moment, even a small amount say $2000 and witness how much expense the system is willing to spend to try and claw back that tiny amount from the individual.
The people enacting these systems don’t even “pay their share”, yet they’ll be the first to try and make you angry at others while taking profit from hours of your labor daily.
Stop paying your taxes for a moment, even a small amount say $2000 and witness how much expense the system is willing to spend to try and claw back that tiny amount from the individual.
The people enacting these systems don’t even “pay their share”, yet they’ll be the first to try and make you angry at others while taking profit from hours of your labor daily.
You were this close to getting it. The system will move heaven and Earth to get $2k from a random joe blow but will let a corporation just "sudo pay no taxes" and get out from paying BILLIONS.
The system is rigged.
The system is rigged.
My point is there are reasons for both those things. Yet the system isn’t honest about them.
Why would they be honest with you? The system always benefits the rich, since the beginning of time. Americans tell themselves a lot of lies about how low taxes mean freedom, when it just means we are getting screwed harder by the ultra-wealthy.
Tax is controlled and enforced by the elites. While all the elites are rich, not all the ultra-wealthy are elites.
When the government says "Billionaires" they are talking about the non-elite rich.
When the government says "Billionaires" they are talking about the non-elite rich.
I think it is about preventing others to retain those $2000, I guess spending money to go after one serves in order to save money to go after 100 at a later stage?
Why have sympathy for wealthy people who take from the common man when guillotines work just as well today as they did 400 years ago?
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Well I would not do that. Just gross, I mean for me, you can do as you wish, dodge this tax and that impost, and then of course end up greasing the wheels because the government is, morally speaking, forced to take bribes at that point if everyone's trying to become a billionaire without paying a dollar in capital gains. Forget the orphanage right? Or like do you want to make a 510c3 gift, or do a raffle, I mean from your perspective, I'm trying to see it from your perspective.
So like then instead of paying the orphanage tax you pay the Ferrari tax and the...the handbag tax of the brand, but like always dodging actual luxury taxes, just paying for the brand. Like paying for the advertising, the...the events, like the Rolex sailing thing? Dude I rather hang out with one of my evicted buddies than go to that shit. As long as I'm squandering money, rather buy Jonnie the beer he's asking for so he can sleep, without judging him. And at obviously placing the burden on myself to help him, like making sure I have coins in my pockets for the beggars before I leave my house. Or a couple times when he asked, I'd tell him to let me get some change I knew I had at home to bring him. It's this whole Christianity thing.
Though normally not talk about that, supposedly charity you're not meant to talk about. Well I guess it's not glamorous charity. And the whole thing about charity being private sort of works sort of doesn't, the Gates Foundation has a huge amount of publicity centered around, I think, the size of William Gate's fortune, reputed to be the world's greatest. But on the other hand, you have Laurene Powell Jobs, I knew someone she was indirectly paying wages to that had literally no idea where the money was coming from, like she used a corporation instead of a 510c3 for privacy and liberty in giving. So then Laurene Jobs came out in public, saying (paraphrase) this sucks, why rag on the Jobs's so much like they're niggardly, and then she opened up about the giving and then that someone I knew found out wages were coming from her. Basic reason it doesn't work is you can't know for sure, as a society, if the rich individual is giving anything at all or just hoarding. That's what's up in Chile, the rich just hoard. Acaparan in Spanish, but that's like a Communist-word. Well myself included, compared to Jonnie I'm rich, no two ways about it.
And that's why I love paying taxes, so taxes are the escape hatch for this moral dilemma, you can by all means tell everyone what you're paying in taxes. Taxes are not charity. If you pay...I think I paid $80 extra split half-and-half State of California and Federal taxes, which I could do by asking about a form at the temp job agency at which I worked this...this menial but mostly dignified labor role...so I payed an absolute tax rate of 45%. I have the W-2 still, looks like I earned $300, obviously outside income but that's not what's in question. So that's why I'm quoting numbers, as well as I can remember, because it's not charity, it's not like being a sugar daddy, it's like being a husband. The money is demanded and if I choose, due to what is considered a masochistic loophole which nobody ever uses or talks about, but which appeared on-screen as a pre-filled 0 so I could ask about it...so because the state demands money and it's obligatory in general, that has more dignity. Because if you can pay a bit, you ought to. Not like they have to throw a party for you to sign a little check, no, DEMAND it. Just like education for children, it's GOOD that's it be OBLIGATORY. OBLIGATORY. And if you want to teach your child more after school, by all means. And like no capital gains on a billion dollars? OBVIOUSLY TAXES ARE A STUPID POINT SYSTEM BECAUSE EVERYTHING IS A STUPID POINTS SYSTEM, THERE'S NO ALTERNATIVE, YOU'RE NOT AS CLEVER AS YOU THINK YOU ARE. Just submit.
Plus being a billionaire makes you a high-value target, in addition to a qualified investor, and there's more price discrimination. The only people that price-discriminate transparently are the Government. I would say they are the least predatory. If you really do pay up without avarice, they won't chisel you. And keep in mind the perk of having the FBI available for eg abductions or blackmail, extortion, what you might term "first world problems." But not if you're dirty from cheating the system. Totally different vibe.
Speaking as to USA, there's different situations. The worst thing, the absolute worst thing, is dropping your US citizenship, because everyone knows the only real reason for that is avoiding taxes, or for avoiding going to war. Or both. Then it's open season. When the US Government says, and tax lawyers repeat this, fat pigs get slaughtered, it means you have to show respect for the point system and only hack a little here and there in additive, not multiplicative ways. And in a manner that conforms to American values and norms. Like middle-class gets to carve out the primary residence from capital gains I think, that's a super American value.[1] Or like making your career about intellectual property, especially inventions. What would a house be without them? Or what would we be without them? Still apes, no clothes, no fire, no tools. Hands are for inventions, and hands make us special to the exclusion of everything else. Otherwise we'd be knuckle-dragging. Plus America had so many great inventors, endless, still does they're just...it's different like everyone's delegating now. Trying to find the innovation in another field, rather than banging them out on their own. Or AI.[2]
Like you can get very very rich in America, just accept the friction it comes with.
[1] And it's American in tandem with being favored by the tax system, the two are inseparable.
[2] Despite this being my line of business, soon to be hosted in www.fgemm.com, I have a negative view of matrix multiplication for this purpose. I think as a tool in a toolbox, to be used sparingly and not relied upon completely. Never a substitute for creativity, and thinking. And using your hands instead of just the brain, real inventors did that.
So like then instead of paying the orphanage tax you pay the Ferrari tax and the...the handbag tax of the brand, but like always dodging actual luxury taxes, just paying for the brand. Like paying for the advertising, the...the events, like the Rolex sailing thing? Dude I rather hang out with one of my evicted buddies than go to that shit. As long as I'm squandering money, rather buy Jonnie the beer he's asking for so he can sleep, without judging him. And at obviously placing the burden on myself to help him, like making sure I have coins in my pockets for the beggars before I leave my house. Or a couple times when he asked, I'd tell him to let me get some change I knew I had at home to bring him. It's this whole Christianity thing.
Though normally not talk about that, supposedly charity you're not meant to talk about. Well I guess it's not glamorous charity. And the whole thing about charity being private sort of works sort of doesn't, the Gates Foundation has a huge amount of publicity centered around, I think, the size of William Gate's fortune, reputed to be the world's greatest. But on the other hand, you have Laurene Powell Jobs, I knew someone she was indirectly paying wages to that had literally no idea where the money was coming from, like she used a corporation instead of a 510c3 for privacy and liberty in giving. So then Laurene Jobs came out in public, saying (paraphrase) this sucks, why rag on the Jobs's so much like they're niggardly, and then she opened up about the giving and then that someone I knew found out wages were coming from her. Basic reason it doesn't work is you can't know for sure, as a society, if the rich individual is giving anything at all or just hoarding. That's what's up in Chile, the rich just hoard. Acaparan in Spanish, but that's like a Communist-word. Well myself included, compared to Jonnie I'm rich, no two ways about it.
And that's why I love paying taxes, so taxes are the escape hatch for this moral dilemma, you can by all means tell everyone what you're paying in taxes. Taxes are not charity. If you pay...I think I paid $80 extra split half-and-half State of California and Federal taxes, which I could do by asking about a form at the temp job agency at which I worked this...this menial but mostly dignified labor role...so I payed an absolute tax rate of 45%. I have the W-2 still, looks like I earned $300, obviously outside income but that's not what's in question. So that's why I'm quoting numbers, as well as I can remember, because it's not charity, it's not like being a sugar daddy, it's like being a husband. The money is demanded and if I choose, due to what is considered a masochistic loophole which nobody ever uses or talks about, but which appeared on-screen as a pre-filled 0 so I could ask about it...so because the state demands money and it's obligatory in general, that has more dignity. Because if you can pay a bit, you ought to. Not like they have to throw a party for you to sign a little check, no, DEMAND it. Just like education for children, it's GOOD that's it be OBLIGATORY. OBLIGATORY. And if you want to teach your child more after school, by all means. And like no capital gains on a billion dollars? OBVIOUSLY TAXES ARE A STUPID POINT SYSTEM BECAUSE EVERYTHING IS A STUPID POINTS SYSTEM, THERE'S NO ALTERNATIVE, YOU'RE NOT AS CLEVER AS YOU THINK YOU ARE. Just submit.
Plus being a billionaire makes you a high-value target, in addition to a qualified investor, and there's more price discrimination. The only people that price-discriminate transparently are the Government. I would say they are the least predatory. If you really do pay up without avarice, they won't chisel you. And keep in mind the perk of having the FBI available for eg abductions or blackmail, extortion, what you might term "first world problems." But not if you're dirty from cheating the system. Totally different vibe.
Speaking as to USA, there's different situations. The worst thing, the absolute worst thing, is dropping your US citizenship, because everyone knows the only real reason for that is avoiding taxes, or for avoiding going to war. Or both. Then it's open season. When the US Government says, and tax lawyers repeat this, fat pigs get slaughtered, it means you have to show respect for the point system and only hack a little here and there in additive, not multiplicative ways. And in a manner that conforms to American values and norms. Like middle-class gets to carve out the primary residence from capital gains I think, that's a super American value.[1] Or like making your career about intellectual property, especially inventions. What would a house be without them? Or what would we be without them? Still apes, no clothes, no fire, no tools. Hands are for inventions, and hands make us special to the exclusion of everything else. Otherwise we'd be knuckle-dragging. Plus America had so many great inventors, endless, still does they're just...it's different like everyone's delegating now. Trying to find the innovation in another field, rather than banging them out on their own. Or AI.[2]
Like you can get very very rich in America, just accept the friction it comes with.
[1] And it's American in tandem with being favored by the tax system, the two are inseparable.
[2] Despite this being my line of business, soon to be hosted in www.fgemm.com, I have a negative view of matrix multiplication for this purpose. I think as a tool in a toolbox, to be used sparingly and not relied upon completely. Never a substitute for creativity, and thinking. And using your hands instead of just the brain, real inventors did that.
Unfashionable thought: pay your damn taxes.
Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.
Maybe if massively profitable businesses spent a bit more time doing the right thing then everyone would be happier.
Just a thought.
~ braces for inevitable downvotes ~
Loopholes are one thing and IMO should be closed but morality is another. The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.
Maybe if massively profitable businesses spent a bit more time doing the right thing then everyone would be happier.
Just a thought.
~ braces for inevitable downvotes ~
Honest to god, I'm kind of stunned by the people with tens to HUNDREDS of millions, liquid, that will go great lengths to avoid, even evade, taxes. You see people move to other countries for "tax purposes" alone. Or people that will create elaborate schemes.
Of course, I understand that if you're in that wealth bracket, the actual tax/accounting acrobatics is abstracted from you. You probably hire some consultant to do all the work, and in the day only pay a fee to get your tax cut by x.xx%. That's zero work for you, minus whatever time you spent on a meeting with the consultant.
But still, there are people that will be heavily involved in these things themselves.
Yes, it is a polarizing topic. Some people refuse to pay taxes because of how the money is spent - or they have some idea of how the money is spent. But from a pragmatic point of view...what's the difference between sitting on say $500MM in cash, and $800MM? It's either way going to be more money than you'll ever be able to spend. Hell, even the safest investments at that scale will yield more money than what most CEOs make in a year.
(With that said, I do have sympathy for the people living in countries where you have to pay wealth tax or tax on unrealized gains, which for founders means
1) taking out loans to pay taxes
2) increasing their yearly compensation, just to meet their tax burden or
3) to sell their equity
But these aren't really in the "exit" bracket)
Of course, I understand that if you're in that wealth bracket, the actual tax/accounting acrobatics is abstracted from you. You probably hire some consultant to do all the work, and in the day only pay a fee to get your tax cut by x.xx%. That's zero work for you, minus whatever time you spent on a meeting with the consultant.
But still, there are people that will be heavily involved in these things themselves.
Yes, it is a polarizing topic. Some people refuse to pay taxes because of how the money is spent - or they have some idea of how the money is spent. But from a pragmatic point of view...what's the difference between sitting on say $500MM in cash, and $800MM? It's either way going to be more money than you'll ever be able to spend. Hell, even the safest investments at that scale will yield more money than what most CEOs make in a year.
(With that said, I do have sympathy for the people living in countries where you have to pay wealth tax or tax on unrealized gains, which for founders means
1) taking out loans to pay taxes
2) increasing their yearly compensation, just to meet their tax burden or
3) to sell their equity
But these aren't really in the "exit" bracket)
> what's the difference between sitting on say $500MM in cash, and $800MM?
At least $15M a year over most 3 year horizons, or the insane compounding effect of $300M invested over the long haul. Your question makes sense from a "normal" perspective, but doesn't once you're UHNW [0].
> It's either way going to be more money than you'll ever be able to spend.
Not even close. At UHNW levels there are whole classes of things to "spend" on that ramp pretty quickly into 8, 9, 10+ figure values. Influence, power, status, prestige, legacy, ideology, politics, rinse, repeat. And the UHNW "brackets" are a real thing (you're either in the tres commas club or you're not, etc).
Sure, pay your taxes. But once you crack these numbers there are entire industries dedicated to helping you work the system, and it's unfortunately pretty workable (because there are substantial interests lobbying to make/keep it so).
[0] - https://en.wikipedia.org/wiki/Ultra_high-net-worth_individua...
At least $15M a year over most 3 year horizons, or the insane compounding effect of $300M invested over the long haul. Your question makes sense from a "normal" perspective, but doesn't once you're UHNW [0].
> It's either way going to be more money than you'll ever be able to spend.
Not even close. At UHNW levels there are whole classes of things to "spend" on that ramp pretty quickly into 8, 9, 10+ figure values. Influence, power, status, prestige, legacy, ideology, politics, rinse, repeat. And the UHNW "brackets" are a real thing (you're either in the tres commas club or you're not, etc).
Sure, pay your taxes. But once you crack these numbers there are entire industries dedicated to helping you work the system, and it's unfortunately pretty workable (because there are substantial interests lobbying to make/keep it so).
[0] - https://en.wikipedia.org/wiki/Ultra_high-net-worth_individua...
I agree.
"UHNW" people are crazy, evil and dangerous. There is no amount of stuff that will ever satisfy them. They will consume, and cheat on taxes, obsessively - until our natural world is destroyed.
It has come down to us vs. them. We didn't start this fight, but we are going to have to finish it.
"UHNW" people are crazy, evil and dangerous. There is no amount of stuff that will ever satisfy them. They will consume, and cheat on taxes, obsessively - until our natural world is destroyed.
It has come down to us vs. them. We didn't start this fight, but we are going to have to finish it.
You've got this class of people telling the rest of us we can't have decent affordable healthcare of places to live while they consume our entire life's salaries worth of resources on luxury items. Society simply can't afford people like this.
>At least $15M a year over most 3 year horizons, or the insane compounding effect of $300M invested over the long haul.
How about the insane compounding effect of a better funded society, through less multi-mill/billionaire tax avoidance?
>Your question makes sense from a "normal" perspective, but doesn't once you're UHNW
Or rather, it makes sense from a normal (non quotes) perspective, but not from the point of a power hungry sociopath.
How about the insane compounding effect of a better funded society, through less multi-mill/billionaire tax avoidance?
>Your question makes sense from a "normal" perspective, but doesn't once you're UHNW
Or rather, it makes sense from a normal (non quotes) perspective, but not from the point of a power hungry sociopath.
well, what's the ROI (or fiscal multiplier in econ speak) of spending 300M on housing vouchers but not building more houses?
or founding more border patrols instead of local police? or funding local police, which then spends it on legal fees to fight against releasing body cam footage?
also note, that I'm not saying the people who optimize away their taxes spend it better (yachts! country clubs in the middle of the desert!)
or founding more border patrols instead of local police? or funding local police, which then spends it on legal fees to fight against releasing body cam footage?
also note, that I'm not saying the people who optimize away their taxes spend it better (yachts! country clubs in the middle of the desert!)
There's a reason that every stupidly wealthy person who wants to throw their resources toward some goal either funds or starts a charity for the specific mission.
That's dependent on believing that your government spends money effectively.
> insane compounding effect of a better funded society
this "compounding" is not captured by the private individual, where as the compounding from the saved taxes is.
this "compounding" is not captured by the private individual, where as the compounding from the saved taxes is.
If you don't take tax at face value and see it as an optimization game, and only focus on what is to be gained (or what is to be lost), I can easily see why one might want to minimize their tax liability. To what lengths would you go to save 100'000$ a year? I don't earn that much, so I'd probably do a lot, as long as it's legal. I hate to advocate for the devil here, and I do believe everyone should be paying their fair share, but I don't think this issue is clear cut at all. Some ways to decrease one's tax liability exist due to government policies to encourage a particular behavior, sometimes it's to subsidize a behavior or a status quo. Tax isn't just a way to transfer wealth (but it often seems to be, and often is for the poorer part of countries), but it's also a way to shape behaviors. The unfortunate fact is that trying to incentivize or disincentivize certain behaviors for a large body of people will often introduce loopholes that can be exploited. However, some incentives end up being vital some livelihoods or behaviors that the country depends on. Not to say there aren't any cases where the loopholes are unambiguously bad.
If you don't see 800M as being different from 500M, then you'd just stop at 500 and never end up in that situation.
Your basic premise is flawed.
Your basic premise is flawed.
People don't become billionaires by paying their fair share and not screwing people over. I remember hearing jokes about how you need to be a sociopath to be a great business person, but the reality is that in order to maintain and grow massive wealth, you need to be willing to take advantage of others for personal gain and pay back literally the least you can get away with. Playing fair is for suckers.
Note that I'm not even talking about taxes. But tax avoidance also becomes a lot easier the more money you have.
Note that I'm not even talking about taxes. But tax avoidance also becomes a lot easier the more money you have.
Well, I, for one, have no such sympathy. I file that under "pay your damn taxes."
My brother's life was paid for by taxes. Went to the ER with a headache, turned out to be a brain annurism leading to 2 8rh plus surgeries and a month in the hospital. Bill was paid out of Minnesota state taxpayers fund. Otherwise he would have been bankrupt for life -- and without the surgery that life would not have been long.
My wife's life was saved twice by tax-funded health care. Won't share details here.
I happen to enjoy quite a few government services. Like "roads".
I'm happy to pay taxes.
I don't always like the way they are spent. I also don't like everything about my job, and if I had a dog I could probably find things about it that I didn't like.
Life is compromise.
My wife's life was saved twice by tax-funded health care. Won't share details here.
I happen to enjoy quite a few government services. Like "roads".
I'm happy to pay taxes.
I don't always like the way they are spent. I also don't like everything about my job, and if I had a dog I could probably find things about it that I didn't like.
Life is compromise.
Bingo.
When I left home at 15, I got into crime, as no-one would hire a smelly homeless kid.
Then when I turned 16, I was able to get a social security payment for "independent youths". I wasn't living in the lap of luxury, but I could actually pay rent in a flat and buy food, without committing crime.
So now that I'm earning a very decent wage as a dev, paying my taxes is the very least I can do to contribute to a country that supported me when I needed it.
When I left home at 15, I got into crime, as no-one would hire a smelly homeless kid.
Then when I turned 16, I was able to get a social security payment for "independent youths". I wasn't living in the lap of luxury, but I could actually pay rent in a flat and buy food, without committing crime.
So now that I'm earning a very decent wage as a dev, paying my taxes is the very least I can do to contribute to a country that supported me when I needed it.
It makes sense that people who benefit disproportionately from social spending would be pro-social spending, and vice versa for people who pay disproportionately more into the system. It troubles me to see comments here acting like the rich are all sociopaths, when really, everybody rich and poor is generally going to favor what is in their own best interests.
It troubles me to see apologist comments here for ultra wealthy tax avoidance.
Everybody avoids taxes to the maximum extent allowed. It is ubiquitous and expected.
You can literally defend almost any action by the argument that they are just maximizing their gains. Clearly they are. Should we roll over and accept it?
Well, it turns out that all conservatives and libertarians are VERY independently minded until they have a need that isn't covered by whatever the hell they're using to pull bootstraps with. Then suddenly they see a collective need for action for their particular issue.
I was going to say that this article should be titled “how to steal from society”, so I’ll join you in downvote-city, comrade.
I really think the opportunity zones were created for precisely the purposes described in the article. We’ve made a strategic decision to forego taxes in certain areas in order to incentivize investment in poor (traditionally minority) areas. The rules were created specifically so that people would use them.
It would rise to the level of cheating if you abuse the rules. Investing in an opportunity zone, starting a business there, improving property, employing people, re-investing there. These are all the intended effects of opportunity zones.
It seems like an awesome loophole, but it’s not. The hole was put there deliberately. It’s meant to be used.
If you’re curious, take a tour of your nearest opportunity zone. Imagine starting a business there. Imagine your employees shopping at the bodega on the corner, grabbing lunch on the street, using the run-down auto repair shop because it’s convenient. If you’re willing to locate your business in an area we’ve decided we want revitalized you can realize tax benefits. But there’s some risk, so do it with open eyes.
It would rise to the level of cheating if you abuse the rules. Investing in an opportunity zone, starting a business there, improving property, employing people, re-investing there. These are all the intended effects of opportunity zones.
It seems like an awesome loophole, but it’s not. The hole was put there deliberately. It’s meant to be used.
If you’re curious, take a tour of your nearest opportunity zone. Imagine starting a business there. Imagine your employees shopping at the bodega on the corner, grabbing lunch on the street, using the run-down auto repair shop because it’s convenient. If you’re willing to locate your business in an area we’ve decided we want revitalized you can realize tax benefits. But there’s some risk, so do it with open eyes.
Reducing your taxable income is stealing? So if I contribute to a Roth IRA, I am stealing too?
Depends on the spirit of the reduction and income levels. A Roth IRA was designed specifically for wage earners to have a tax-friendly investment vehicle to save for retirement. This benefits them and society. I don’t think you can say the same thing about the OP here.
The 401k was a literal tax loophole - it was never intended to be a tax-deferred retirement vehicle. Some accountant just noticed it in the tax code and figured that most Americans could actually take advantage of it.
https://www.northwesternmutual.com/life-and-money/your-401k-...
I assume you're sticking to your morals and don't use the 401k loophole?
https://www.northwesternmutual.com/life-and-money/your-401k-...
I assume you're sticking to your morals and don't use the 401k loophole?
> This benefits them and society. I don’t think you can say the same thing about the OP here.
The OP is given a tax incentive to build businesses in depressed economic zones and low-income areas.
Both roth ira and this special tax "loop hole" are incentives the gov't implemented to encourage a beneficial behaviour.
The OP is given a tax incentive to build businesses in depressed economic zones and low-income areas.
Both roth ira and this special tax "loop hole" are incentives the gov't implemented to encourage a beneficial behaviour.
The spirit of the tax benefit, like all tax benefits, was to help some special interest avoid their taxes.
I'd say if you did what Theil did and use your Roth to purchase your own startup, yes. If you use it to play the market or invest in index funds, no.
"How to take money from society whose elected representative set up a specific program to hand out"
Which I also refuse to take, myself, but for different reasons than refusing to steal.
Which I also refuse to take, myself, but for different reasons than refusing to steal.
Intent matters. Opportunity Zones are set up to incentivize actual businesses providing services to the local community, not to serve as vehicles for far-away rich arseholes to cheat money out of the taxman.
But if the rules don't enforce that, and allow far-away rich arseholes to use these zones to cheat money out of the taxman, then that's sloppy legislating. The loopholes need to be closed. Relying on the goodwill of people whose primary unifying characteristic is the hoarding of extreme amounts of money is a bad idea.
I agree and disagree.
I agree that it’s sloppy legislation and to that end the group to blame is the government (and ultimately the people).
But I disagree that if the rules don’t get enforced that it’s seemingly “ok” for people to exploit it. They should have common decency and ethical guidelines here. Probably why I’m not one of them.
I agree that it’s sloppy legislation and to that end the group to blame is the government (and ultimately the people).
But I disagree that if the rules don’t get enforced that it’s seemingly “ok” for people to exploit it. They should have common decency and ethical guidelines here. Probably why I’m not one of them.
I didn't say it was ok to exploit it. I say it's unavoidable that people will exploit it.
I do wish we could run society purely on goodwill and people's intrinsic morality, but we've got a society that pushes people to crave more and more wealth, and those two don't go together.
I do wish we could run society purely on goodwill and people's intrinsic morality, but we've got a society that pushes people to crave more and more wealth, and those two don't go together.
Maybe every society everywhere.
The fact is that wealth and power protect themselves and always have.
While crafting a fair society we must recognize this and deliberately skew the rules to favor those without wealth and power. In the US we mean we’ll but have utterly failed to do so. Our legal system is a prime example. The fact that we more often tax minimum wage workers than billionaires is another.
Our society is shamefully unfair. But I actually think opportunity zones are a step in the right direction.
The fact is that wealth and power protect themselves and always have.
While crafting a fair society we must recognize this and deliberately skew the rules to favor those without wealth and power. In the US we mean we’ll but have utterly failed to do so. Our legal system is a prime example. The fact that we more often tax minimum wage workers than billionaires is another.
Our society is shamefully unfair. But I actually think opportunity zones are a step in the right direction.
I apologize. The reading I had was you were kind of nonchalant about it in an almost accepting way. Though, I'd say there are many who would say it's ok "because you can", and I think they're irresponsible and disrespectful of themselves and their fellow humans.
I certainly don't think 'legal' necessarily implies 'moral'. Sometimes they're the exact opposite. There are also things that aren't legislated that should still guide us.
For example, it's not illegal to be an asshole to someone. But that doesn't make it okay either. It's not something that's ever going to be legislated, and I don't think it should be. Tax rules, on the other hand, should be legislated, because the same people will always take advantage of them if they can. I don't see purely voluntary tax as working (though a certain type of libertarian loves to suggest exactly that).
For example, it's not illegal to be an asshole to someone. But that doesn't make it okay either. It's not something that's ever going to be legislated, and I don't think it should be. Tax rules, on the other hand, should be legislated, because the same people will always take advantage of them if they can. I don't see purely voluntary tax as working (though a certain type of libertarian loves to suggest exactly that).
The problem is a fundamental disadvantage in available manpower. Billionaires employ literal armies worth of extremely well paid lawyers, accountants and other professionals continuously working on finding and exploiting loopholes involving multiple jurisdictions, whereas most of the public services sector is barely keeping up. (Yes I'm aware that especially at the federal scale, the ultra rich sometimes outright buy special tax breaks, but that's not the case we're talking about)
The solution would be to allow punishing breaking the intent of a law, but given how politicized even the justice system is these days, I'm not so sure if that's a good idea either.
The solution would be to allow punishing breaking the intent of a law, but given how politicized even the justice system is these days, I'm not so sure if that's a good idea either.
If you could specify the intent in a way that could be adjudicated, why couldn’t you just write the law better in a different dimension? “This applies only up to $X M/yr” or whatever.
Having someone later come along and try to devine what the “true intent” was and levy punishments for behavior clearly allowed by the law but against an imputed intent sounds worse for society based on laws than the avoidance of some taxes via a poorly written law.
Having someone later come along and try to devine what the “true intent” was and levy punishments for behavior clearly allowed by the law but against an imputed intent sounds worse for society based on laws than the avoidance of some taxes via a poorly written law.
The solution is tax reform. Make taxes and social programs broad and simple.
“This rule sucks because someone might cheat and not follow this rule.”
No people who cheat suck.
The rule of followed actually brings a lot of investment and improvement to areas that need it.
No people who cheat suck.
The rule of followed actually brings a lot of investment and improvement to areas that need it.
But the rules require that work be done in the area, that property be improved, that gains be reinvested in the area. Rich arseholes who never set foot in the area can still pour buckets of cash into areas WE DECIDED need it most.
This is HN. we welcome diversity of views. this view you espouse, is not actually a minority view, but still, its a divisive topic.
I'm a high tax kinda guy. If we all had Norway taxes, we'd have Norway sovereign fund and EV and lifestyle (but maybe without SAD, because we're not all that far north)
I'm a high tax kinda guy. If we all had Norway taxes, we'd have Norway sovereign fund and EV and lifestyle (but maybe without SAD, because we're not all that far north)
Norway oil is way more relevant for your thesis than Norway taxes
Yea right, so is the German oil for Germany. /s
You seem to be quite the expert on Norway. Can you elaborate how they prop up social services with oil money?
You seem to be quite the expert on Norway. Can you elaborate how they prop up social services with oil money?
Why do you feel offended?
OP had the thesis that the "Norway sovereign fund" is funded by high taxes. This fund is also known as the "Oil fund": The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector.
Conclusion: The Norwegian society is not just rich just because you are that smart. You obviously had a good portion of luck.
OP had the thesis that the "Norway sovereign fund" is funded by high taxes. This fund is also known as the "Oil fund": The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector.
Conclusion: The Norwegian society is not just rich just because you are that smart. You obviously had a good portion of luck.
I believe the parent comment is referring to this:
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
Lol, don't speak about high taxes if you don't even know how Norway and oil go together...
lol not like the us could do the same.
Norway oil [with a visionary who helped guide its investment] is more relevant..
https://news.ycombinator.com/item?id=19594153
The US has 6.7x more oil reserves than Norway: https://www.worldometers.info/oil/oil-reserves-by-country/
So US has around 9x less per capita since only ~5 million people live in Norway?
Since people are misreading this comment, either deliberately or because I have not been clear enough, I am going to assume good faith and edit the comment to be more clear.
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And 6.7x the amount of the Norwegian Government Pension Fund Global exceeds the entire annual budget of the US government.
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
https://datalab.usaspending.gov/americas-finance-guide/spend...
Imagine if the US could just magically borrow from next year's budget, but at zero cost? That's the net effect of having an entire additional several trillion dollars laying around.
In hard numbers, that 6.7x works out to around $9.3 trillion, of which it's a pretty safe assumption that you can "borrow" around 3% of it annually, forever. That works out to around $280 billion.
It ain't chump change. We could easily end homelessness in the US with that amount, and have much more left over to do even more social good.
https://www.verifythis.com/article/news/verify/social-justic...
After we take the 50-ish billion a year it would take to eradicate homelessness (keep in mind, we can sustain this in real terms approximately forever), let's move on to higher education. The Debt Free College act would reportedly cost the US $75 billion a year.
https://educationdata.org/how-much-would-free-college-cost
No problem. We've only spent half of what we can borrow in perpetuity from the future with this hypothetical sovereign wealth fund laying around.
Let's go for the triple crown and give everybody universal, employer-independent health coverage.
Oh, guess what? That was a trick. Implementing universal healthcare, simply replacing premiums by taxes, would save the US many more billions of dollars we could put to good use doing even more social good.
https://www.citizen.org/news/fact-check-medicare-for-all-wou...
Or maybe it would cost an additional $149 billion. Who cares? We're still under budget.
https://www.thelancet.com/journals/lancet/article/PIIS0140-6...
And, so, now, we've reached a point where nobody in the US needs to ever worry about student loans, medical costs, or homelessness again. (Well, okay, not nobody -- we still need to figure out something for the people who have taken out student loans already, but I think we can probably handle that.) It's not quite the extensive welfare state that Norway has, but it's pretty damn close.
Guess what happens to the labor market under those conditions? If you said "it becomes much more like a free market," you guessed right! And who can argue against that, really?
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And 6.7x the amount of the Norwegian Government Pension Fund Global exceeds the entire annual budget of the US government.
https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...
https://datalab.usaspending.gov/americas-finance-guide/spend...
Imagine if the US could just magically borrow from next year's budget, but at zero cost? That's the net effect of having an entire additional several trillion dollars laying around.
In hard numbers, that 6.7x works out to around $9.3 trillion, of which it's a pretty safe assumption that you can "borrow" around 3% of it annually, forever. That works out to around $280 billion.
It ain't chump change. We could easily end homelessness in the US with that amount, and have much more left over to do even more social good.
https://www.verifythis.com/article/news/verify/social-justic...
After we take the 50-ish billion a year it would take to eradicate homelessness (keep in mind, we can sustain this in real terms approximately forever), let's move on to higher education. The Debt Free College act would reportedly cost the US $75 billion a year.
https://educationdata.org/how-much-would-free-college-cost
No problem. We've only spent half of what we can borrow in perpetuity from the future with this hypothetical sovereign wealth fund laying around.
Let's go for the triple crown and give everybody universal, employer-independent health coverage.
Oh, guess what? That was a trick. Implementing universal healthcare, simply replacing premiums by taxes, would save the US many more billions of dollars we could put to good use doing even more social good.
https://www.citizen.org/news/fact-check-medicare-for-all-wou...
Or maybe it would cost an additional $149 billion. Who cares? We're still under budget.
https://www.thelancet.com/journals/lancet/article/PIIS0140-6...
And, so, now, we've reached a point where nobody in the US needs to ever worry about student loans, medical costs, or homelessness again. (Well, okay, not nobody -- we still need to figure out something for the people who have taken out student loans already, but I think we can probably handle that.) It's not quite the extensive welfare state that Norway has, but it's pretty damn close.
Guess what happens to the labor market under those conditions? If you said "it becomes much more like a free market," you guessed right! And who can argue against that, really?
Comparing a pension fund, which is designed to pay out over, well, indefinitely, to an annual budget, makes no sense. One is a rate. One is a total. It's like saying you can fly 400 mph but the earth is only 90 mega-miles from the sun and since 90 is less than 400 the sun is not that far.
Numerology doesn't work in economics.
The fact is that Norway has this luxury solely through massive per capita oil wealth. The US cannot come close to this.
Numerology doesn't work in economics.
The fact is that Norway has this luxury solely through massive per capita oil wealth. The US cannot come close to this.
Norwegian taxes are not too far off from CA or NY taxes to be honest. The marginal rate tops out at under 50%.
It’s worse for capital gains and they have a wealth taxes so a lot worse for some.
It’s worse for capital gains and they have a wealth taxes so a lot worse for some.
I'm not sure the top marginal rate is relevant unless you compare at what income it kicks in at?
The top CA or NY bracket is dependent on the top US federal bracket which kicks in at $537,000.
Not to mention the <cough> 25% VAT in Norway.
The top CA or NY bracket is dependent on the top US federal bracket which kicks in at $537,000.
Not to mention the <cough> 25% VAT in Norway.
This only applies to the upper middle class not the insanely rich though. Anyone who hires a tax attorney is not paying high taxes in this country.
That's just not true. The top 1% pay 33% of the tax (and the top 10%, "upper middle class", pay 70%). I think myth just causes confusion and misplaced anger.
Yes, but these stats obviously take into account only paid taxes and wealth that remains visible. If you have 50 bn$, of which 1 is kept and taxed locally, and 49 moved through shell companies to offshore tax heavens, you'll still end up as one of the top tax payers, even if you are evading about ~5000%. Obviously this is much harder to do if you earn 200k/year.
Yes, if the top 1% paid their fair share, they would pay more than 33% of the country's taxes. But nevertheless they do in fact pay 33% of the country's taxes.
so is not paying more than their per-capita ratio not a fair share? I think 33% for a 1% cohort is quite large.
Why does the relative amount of tax paid against the total networth matter in this instance?
Why does the relative amount of tax paid against the total networth matter in this instance?
Would you have someone who's broke and unemployed pay the same amount of tax as a billionaire?
Ideally taxes shouldn't be a large burden to anyone. The richer someone is, the larger absolute amount of taxes that person can pay for the same burden level. In fact, it's not just a fixed percent. The richer someone is, the larger percent of taxes that person can pay for the same burden level.
The rich got to where they are by using the infrastructure built by the government. A rich person gets more value from the government than a poor person, so thus it's fair that a rich person pays more in taxes.
Ideally taxes shouldn't be a large burden to anyone. The richer someone is, the larger absolute amount of taxes that person can pay for the same burden level. In fact, it's not just a fixed percent. The richer someone is, the larger percent of taxes that person can pay for the same burden level.
The rich got to where they are by using the infrastructure built by the government. A rich person gets more value from the government than a poor person, so thus it's fair that a rich person pays more in taxes.
What proportion of wealth do they have access to?
I don't think anyone has done the legwork to link "your taxes" and a moral aspect. There are a lot of basic unresolved questions (if Jeff Bezos pays more in taxes than you earn in your lifetime, has he payed his fair share? Why/why not? Are the standards used to work that out some sort of objective moral or just a reflection of personal interest speaking? A suspicious number of moral justifications involve other people paying all the taxes & not the moraliser). And a company like Apple has had a bigger positive influence on my lifestyle than a large number of government agencies. Some of those agencies are trying to make my life worse as far as I reckon it.
If the law says some entity must pay X tax it is uncertain what it would mean, in practice, to claim "their taxes" were really Y, some other amount they aren't legally obliged to pay.
> The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.
A business is a hypothetical entity, a term for a system of organising people to do things. Things that are measurably in high demand. It is profoundly uncertain that diverting money out of those systems is a good idea. Observing that businesses rely on their context does not start or end the argument about how much tax they should pay.
If the law says some entity must pay X tax it is uncertain what it would mean, in practice, to claim "their taxes" were really Y, some other amount they aren't legally obliged to pay.
> The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.
A business is a hypothetical entity, a term for a system of organising people to do things. Things that are measurably in high demand. It is profoundly uncertain that diverting money out of those systems is a good idea. Observing that businesses rely on their context does not start or end the argument about how much tax they should pay.
Why? Is there some correlation between the amount of capital gains I’ve made and the amount of money society needs? If I were to make less in capital gains does that mean society is missing out in some way?
I pay federal income taxes, payroll taxes, medicare and medicaid taxes, social security taxes, corporate taxes, state income taxes, city income taxes, property taxes, and more.
Why should I then pay a huge capital gains bill? Why should I feel morally obligated to do such a thing?
I think you’re missing all the taxes paid along the way to achieving a billion dollar business. For me it’s 47% per year. Far more than I would consider my fair share considering most people pay an effective rate of 0%.
I pay federal income taxes, payroll taxes, medicare and medicaid taxes, social security taxes, corporate taxes, state income taxes, city income taxes, property taxes, and more.
Why should I then pay a huge capital gains bill? Why should I feel morally obligated to do such a thing?
I think you’re missing all the taxes paid along the way to achieving a billion dollar business. For me it’s 47% per year. Far more than I would consider my fair share considering most people pay an effective rate of 0%.
As an American, I'd be more excited about taxes if I had access to affordable education, affordable healthcare, a well maintained infrastructure, and general social safety net. Now that I'm living outside of the USA & still subject to USA taxation, I'm even less excited about it.
Take heart - I filed Dutch taxes in 2021 and not American, for the first time! It's somewhat more but every single day I see the results of my taxes.
Still, if the tax loophole exists, it's hardly surprising that people use it. People should pay their taxes, but the government should also close these tax loopholes, or at least be a lot more strict about how they're used; I can imagine these opportunity zones exist to make it more attractive to set up shops and small businesses here in order to develop the area. It's not meant for app startups with billion dollar exits, so the rules should exclude those.
> It's not meant for app startups with billion dollar exits, so the rules should exclude those.
Adding more rules is generally favorable to the rich. The real solution is removing special-interest tax benefits like this in the first place.
Adding more rules is generally favorable to the rich. The real solution is removing special-interest tax benefits like this in the first place.
This is not finding some mysterious loophole though, but using a government designed program.
I think it is sad they exist, but clearly they are there to be used.
I think it is sad they exist, but clearly they are there to be used.
Have an upvote, I don't understand greed, why wouldn't you want to be in the fortunate position of having to pay CGT, it means things are going well.
> Unfashionable thought: pay your damn taxes.
>~ braces for inevitable downvotes ~
If you get downvoted it will be because you stated an opinion that is in no way controversial among these demographics and then pretended like you were making some noble stand based on principals when in reality you were just the first person to come along and say what half of everyone was thinking and you weren't really risking much blowback.
>~ braces for inevitable downvotes ~
If you get downvoted it will be because you stated an opinion that is in no way controversial among these demographics and then pretended like you were making some noble stand based on principals when in reality you were just the first person to come along and say what half of everyone was thinking and you weren't really risking much blowback.
The problem with taxes is that all the money effectively goes into a black hole from where senile, clueless or malicious politicians can draw to give to their friends, fall prey to unscrupulous suppliers (or be complicit and get a kickback, allowing them to "launder" public money into their own pocket) or spend it fighting stupid battles all while the country is falling apart (the UK as an example is notorious for constantly beating the "internet filtering" drum - low-income kids are starving and families can't afford heating bills, but porn on the internet is obviously a bigger problem).
I won't downvote and I agree with you in principle and wish I was lucky enough to live in a country where I can actually feel like I'm getting value out of my tax money, but as of right now that's not the case so I can totally understand tax evader's positions.
I won't downvote and I agree with you in principle and wish I was lucky enough to live in a country where I can actually feel like I'm getting value out of my tax money, but as of right now that's not the case so I can totally understand tax evader's positions.
This isn't a loophole as much as a completely designed tax break.
That's a different deal than some body squeaking around tax law; this was all about trying to change parts of the nature of capitalism's tendency to rerun money to capital more than to labor.
If you think it's misguided, I do too. Though I think it's good to invest in under invested areas, I also think we need to counteract the effects of the Henry George Theorem and also redistribute money from the land rents to people that do not own land.
Both are necessary to try to make our economic system more fair and more efficient. The fewer people that are allocating capital in capitalism, the worse it works. And pretty much all positive defenses of capitalism start with assumptions that most people are starting from somewhat similar places of wealth, or at least enough wealth that they are not destitute. Until we have that base level of security for all, we need things like massive redistribution, which includes carrots like opportunity zones, as well as sticks like taxes on land and monopolies.
That's a different deal than some body squeaking around tax law; this was all about trying to change parts of the nature of capitalism's tendency to rerun money to capital more than to labor.
If you think it's misguided, I do too. Though I think it's good to invest in under invested areas, I also think we need to counteract the effects of the Henry George Theorem and also redistribute money from the land rents to people that do not own land.
Both are necessary to try to make our economic system more fair and more efficient. The fewer people that are allocating capital in capitalism, the worse it works. And pretty much all positive defenses of capitalism start with assumptions that most people are starting from somewhat similar places of wealth, or at least enough wealth that they are not destitute. Until we have that base level of security for all, we need things like massive redistribution, which includes carrots like opportunity zones, as well as sticks like taxes on land and monopolies.
> This isn't a loophole as much as a completely designed tax break.
I strongly doubt that the outcome here is the intent of the tax break, which seems to be "pump money into poor areas and we'll let you off the CGT on the amount you invested in the area".
She "re-invests" a thousand dollars by starting a company that is just a few people in some co-working spaces, and walks away a few years later with hundreds of millions extra.
If she'd started a major factory employing large numbers of people in the local area then sure, that seems like the intent.
I strongly doubt that the outcome here is the intent of the tax break, which seems to be "pump money into poor areas and we'll let you off the CGT on the amount you invested in the area".
She "re-invests" a thousand dollars by starting a company that is just a few people in some co-working spaces, and walks away a few years later with hundreds of millions extra.
If she'd started a major factory employing large numbers of people in the local area then sure, that seems like the intent.
The business is hypothetical in the article, but the hypothetical is a software business, and is making money. So they didn't "just place people in some co-working spaces", they did work as employees and got paid, which brings in economic activity to a depressed region. Seems to be exactly what the tax break is intending.
This is much better a tax break than a city bidding for an amazon HQ with a custom tax break deal that they have to compete with other cities!
This is much better a tax break than a city bidding for an amazon HQ with a custom tax break deal that they have to compete with other cities!
> So they didn't "just place people in some co-working spaces"
It's quite literally what the article explains.
> they did work as employees and got paid, which brings in economic activity to a depressed region.
The regions are tiny, walkable across in the article. They're not bringing in workers to live, build a family and spend within a large metro area - they're "a space nearby a university". The economic activity brought in is a small number of employees buying some coffee, maybe lunch and then going home.
> Seems to be exactly what the tax break is intending.
You think that spend in co-working spaces is what the government wants to give up hundreds of millions of dollars for?
It's quite literally what the article explains.
> they did work as employees and got paid, which brings in economic activity to a depressed region.
The regions are tiny, walkable across in the article. They're not bringing in workers to live, build a family and spend within a large metro area - they're "a space nearby a university". The economic activity brought in is a small number of employees buying some coffee, maybe lunch and then going home.
> Seems to be exactly what the tax break is intending.
You think that spend in co-working spaces is what the government wants to give up hundreds of millions of dollars for?
Capitalism these days feels akin to joining a game of monopoly where everything has already been purchased. But feel free to have a jolly time going around the board and paying rent :)
Well, monopoly was introduced as satire in the first place in fact! A way to showcase some absurdities of capitalism
Not exactly a critique of capitalism, but of private land ownership. The Landlord Game was created by a Georgist, and Georgists consider land and capital to be entirely different economic factors with entirely different behaviors. Marxists often consider Georgism to be capitalism's last gasp.
At least in capitalism you can start a new business. The folly of the Monopoly board game is the limited spaces which makes things a zero-sum game. The world is only zero-sum when the government doesn’t let you build new stuff through artificial constraints. In a free market always get new stuff.
I can't think of a single thing that isn't inherently limited. Maybe the sun is practically infinite, though you're certainly limited by the amount of power you can capture. Land, natural resources, time, it all has limits.
The quantity of steel may be inherently limited, but we can still make more than what we have now.
Land behaves differently because of the extremely in elastic supply. And it's not very fungible; a lot in the middle of Nevavda hundreds of miles from the nearest freeway is not exchangeable with the same size lot in Palo Alto.
And the limit itself is the amount of iron ore; that would be considered economic land, but the steel may just be considered capital.
Land behaves differently because of the extremely in elastic supply. And it's not very fungible; a lot in the middle of Nevavda hundreds of miles from the nearest freeway is not exchangeable with the same size lot in Palo Alto.
And the limit itself is the amount of iron ore; that would be considered economic land, but the steel may just be considered capital.
The gp specifically mentioned land ownership, which makes the comparison more interesting.
Even without height restrictions, limited ownership of land still has the problems exhibited in the game.
Zoning and highly restrictive building codes were invented after Georgism, and are ways to further heighten the basic unfairness of land.
Local politics are dominated by landowners, as they tend to have the most control of, and greatest interest in controlling, the local levers of power.
It is ironically why I'm less concerned about private equity buying houses to rent than I am of local small time landlords buying houses. PE firms won't control local politicians in the same way that local landlords control politicians, because it's too much work and requires ridiculously intimidate knowledge of the local patronage networks.
Zoning and highly restrictive building codes were invented after Georgism, and are ways to further heighten the basic unfairness of land.
Local politics are dominated by landowners, as they tend to have the most control of, and greatest interest in controlling, the local levers of power.
It is ironically why I'm less concerned about private equity buying houses to rent than I am of local small time landlords buying houses. PE firms won't control local politicians in the same way that local landlords control politicians, because it's too much work and requires ridiculously intimidate knowledge of the local patronage networks.
Free market != capitalism, by the way. The market for the most part in "capitalist" America, has been captured.
Second, the world is a zero-sum game. In one breath folks will say "resources are limited, so we need to allocate to those who can use them best" or "life is unfair", and then in the next claim resources are unlimited and hard work is all you need, no need to get fussy about inequality.
Second, the world is a zero-sum game. In one breath folks will say "resources are limited, so we need to allocate to those who can use them best" or "life is unfair", and then in the next claim resources are unlimited and hard work is all you need, no need to get fussy about inequality.
That was the whole point for monopoly, to show how rigged the system is.
> That's a different deal than some body squeaking around tax law; this was all about trying to change parts of the nature of capitalism's tendency to rerun money to capital more than to labor.
No, this was a small group successfully lobbying to reduce their share of the costs of running society. AKA special interests.
> Until we have that base level of security for all, we need things like massive redistribution, which includes carrots like opportunity zones, as well as sticks like taxes on land and monopolies.
If you're going to redistribute wealth, do it in a broad, simple way (UBI/negative income tax). Not through millions of tiny special interest gifts like 'opportunity zones'.
No, this was a small group successfully lobbying to reduce their share of the costs of running society. AKA special interests.
> Until we have that base level of security for all, we need things like massive redistribution, which includes carrots like opportunity zones, as well as sticks like taxes on land and monopolies.
If you're going to redistribute wealth, do it in a broad, simple way (UBI/negative income tax). Not through millions of tiny special interest gifts like 'opportunity zones'.
While I think UBI is great, there still needs to be local investment to build communities, beyond just giving people money. I'm not convinced that opportunity zones are the way to do it, but in addition to giving people money, we need to build the economic infrastructure for people to use it in good ways. For example, in food deserts, getting grocery stores. That may require incentivizing businesses to take what they see as additional risks.
I agree with you personally, but really what we're talking about is playing sport against a team that continually bends and exploits the rules and comes out ahead. You can talk all you want about morality, but the facts are the facts.
Corporations have been doing it for decades, and anyone that doesn't do the same will continue to be taken advantage of.
Corporations have been doing it for decades, and anyone that doesn't do the same will continue to be taken advantage of.
I agree completely but it seems to be a game theory thing. It works better if everyone is happy but you can leech the system and disproportionally benefit of it without doing your part for it as long as the system does not collapse due to your actions.
I guess the worlds has some space for people who can be rewarded enormously through the work of the long tail and everything collapses when the number of people who act in that way passes the acceptable threshold.
Like, it's O.K. to have a royal family and bunch of elites around them who engage only in high life stuff like poetry, paintings and politics but you can't have half of the population be painters, poets and the other half work the land and have no life so to feed the elite half.
I think there was article on HN some time ago about the tolerable percentage of knights in the society.
I guess the worlds has some space for people who can be rewarded enormously through the work of the long tail and everything collapses when the number of people who act in that way passes the acceptable threshold.
Like, it's O.K. to have a royal family and bunch of elites around them who engage only in high life stuff like poetry, paintings and politics but you can't have half of the population be painters, poets and the other half work the land and have no life so to feed the elite half.
I think there was article on HN some time ago about the tolerable percentage of knights in the society.
If all you have to encourage people not to use those loopholes is an appeal to their morality, then you should not be surprised to find a bunch of amoral people and amoral corporations ignoring you.
The rich must be forced to do the right thing, otherwise they will not do it. Expecting otherwise is lunacy. Maybe one or two foolish and good ones will try to do the right thing, but they'll be swiftly out-competed in our hyper-efficient economy by those willing to break rules and cut corners.
The rich must be forced to do the right thing, otherwise they will not do it. Expecting otherwise is lunacy. Maybe one or two foolish and good ones will try to do the right thing, but they'll be swiftly out-competed in our hyper-efficient economy by those willing to break rules and cut corners.
Not just the rich. PEOPLE must be made to do the right thing.
I live in a former socialist country, and I hate the "we will tax the rich" (as in higher tax percentages) paroles I hear from our current left-leaning (even communist) parties here.
Why? (and I have mentioned this before, many times, even here)
Poor people already pay almost zero taxes.
Rich people avoid paying taxes at all.
And me, someone with an above average but below "rich" (engineers) paycheck get fucked by the taxes.
I don't want higher taxes for the rich, I just want the rich to pay the same tax rate as I do in the first place.
Why? (and I have mentioned this before, many times, even here)
Poor people already pay almost zero taxes.
Rich people avoid paying taxes at all.
And me, someone with an above average but below "rich" (engineers) paycheck get fucked by the taxes.
I don't want higher taxes for the rich, I just want the rich to pay the same tax rate as I do in the first place.
Let's look at it this this way - say you live in Texas and make $7.25 / hr. That's $7.25 * 8 hours * 260 days = $15080 / year. According to this tax calc (https://smartasset.com/taxes/income-taxes), you still have to pay $1407 in total federal income taxes, or 9.33%.
It may not sound a lot, but remember - when you're making that little money, every dollar counts. You could be living on the edge of poverty, where you just make enough money to cover your basic needs, but never make enough to save up anything.
Compare that to someone making, let's say $60k in Texas. You're not anywhere near a six-figure salary, but you'd still make 4 times more than minimum wage.
Same calculator shows that at $60k in Texas, you'll have to pay $10778 in taxes, or %17.96. Higher percentage, but you'll probably have a lot more to save than the minimum wage person in the previous example.
The "rich" engineers making $250k will have to pay 28.23% in taxes, even more than you.
Now the wealthy, they will probably never pay more than capital gains taxes at most - which is a capped figure, most places. And as others have mentioned, there's a whole industry dedicated to bringing down the taxes for wealthy people.
So while the middle and upper-middle class is bankrolling the nation in terms of tax %, I think it's important to remember that these things have to be seen in context. I have a 3-4 times higher tax rate than "poor people", but I make more than enough money to everything I need, post-taxes.
It may not sound a lot, but remember - when you're making that little money, every dollar counts. You could be living on the edge of poverty, where you just make enough money to cover your basic needs, but never make enough to save up anything.
Compare that to someone making, let's say $60k in Texas. You're not anywhere near a six-figure salary, but you'd still make 4 times more than minimum wage.
Same calculator shows that at $60k in Texas, you'll have to pay $10778 in taxes, or %17.96. Higher percentage, but you'll probably have a lot more to save than the minimum wage person in the previous example.
The "rich" engineers making $250k will have to pay 28.23% in taxes, even more than you.
Now the wealthy, they will probably never pay more than capital gains taxes at most - which is a capped figure, most places. And as others have mentioned, there's a whole industry dedicated to bringing down the taxes for wealthy people.
So while the middle and upper-middle class is bankrolling the nation in terms of tax %, I think it's important to remember that these things have to be seen in context. I have a 3-4 times higher tax rate than "poor people", but I make more than enough money to everything I need, post-taxes.
I live in slovenia.
A basic factory worker (a bit above minumum wage), earns 1200eur monthly gross, which (due to weird laws) costs the employer 1393eur (gross-gross), and the worker gets 831eur net out of that, meaning that the government takes around 40%. (the tax rate also includes pension and health insurance)
If you earn 5x times average pay (let's say you're becoming "rich"), that would make it 10k gross, costing your employer 11610eur, and you earning 5167eur net, meaning that the government takes around 55%.
Ok, similar enough,... but(!), with the same cost to your employer (11610eur), you can earn a lot more if you avoid taxes.
Lets say you start an independing contractor business in slovenia (a paper thing, you get the status) - this would make you pay a minimum of ~450eur monthly for health insurance and pension insurance (yes, this would also make you get minimal pension later, but wait for the rest of the math). Then you open a company in bosnia, where you pay ~100eur per month for bookkeeping, a mailbox, and other related costs, and then pay only 10% when you take out the profits. So your fixed monthly cost is around 600eur + 10% of the 11k of your gross gross left over, totalling to 1700eur, and earning 9900eur net, meaning that you effectively pay 15% in taxes. But that's not the worst part... if the company is registed in your girlfriends/brothers/mothers/... name, you (as a couple) still earn the same, but you're now (on paper) poor, so if you have a kid, with some paper turning, the kid will get free kindergarden and food (compared to almost 500eur monthly for two a bit above average paychecks). You might also get a government sponsored apartment to avoid high rents.
So yeah... at some point, dealing with bureaucrats in two countries goes from "not worth it" to "definitely worth it".
A basic factory worker (a bit above minumum wage), earns 1200eur monthly gross, which (due to weird laws) costs the employer 1393eur (gross-gross), and the worker gets 831eur net out of that, meaning that the government takes around 40%. (the tax rate also includes pension and health insurance)
If you earn 5x times average pay (let's say you're becoming "rich"), that would make it 10k gross, costing your employer 11610eur, and you earning 5167eur net, meaning that the government takes around 55%.
Ok, similar enough,... but(!), with the same cost to your employer (11610eur), you can earn a lot more if you avoid taxes.
Lets say you start an independing contractor business in slovenia (a paper thing, you get the status) - this would make you pay a minimum of ~450eur monthly for health insurance and pension insurance (yes, this would also make you get minimal pension later, but wait for the rest of the math). Then you open a company in bosnia, where you pay ~100eur per month for bookkeeping, a mailbox, and other related costs, and then pay only 10% when you take out the profits. So your fixed monthly cost is around 600eur + 10% of the 11k of your gross gross left over, totalling to 1700eur, and earning 9900eur net, meaning that you effectively pay 15% in taxes. But that's not the worst part... if the company is registed in your girlfriends/brothers/mothers/... name, you (as a couple) still earn the same, but you're now (on paper) poor, so if you have a kid, with some paper turning, the kid will get free kindergarden and food (compared to almost 500eur monthly for two a bit above average paychecks). You might also get a government sponsored apartment to avoid high rents.
So yeah... at some point, dealing with bureaucrats in two countries goes from "not worth it" to "definitely worth it".
given that they often precisely pay less taxes than you,
you can't really avoid wanting them to pay "higher" taxes
- higher than the ridiculously low numbers they pay,
given their army of lawyers, accountants and loopholes.
So, wanting them to pay a similar percentage to you,
DOES amount to them paying "higher" taxes.
When your size allows you to hold the pen when writing the tax laws, tax does not apply to you.
Tax is something the wealthy and society extracts from the taxable classes. They don't extract it from the rich, it is in direct opposition to the nature of being rich - rich is something you become, by being exempt from the rules that apply to 'lesser' creatures.
And if the low-income classes do not provide taxable income, I wonder why the republicans are so hellbent from prohibiting poor people from getting abortions. It suggests to me, they DO believe poor people serve some purpose, given that they insist on creation of new poor people.
In my country, foreign (or rather, multinational) corporations that invariably make huge profits, pay zero taxes, by doing the following:
- they transfer 'ownership' of critical company resources,When your size allows you to hold the pen when writing the tax laws, tax does not apply to you.
Tax is something the wealthy and society extracts from the taxable classes. They don't extract it from the rich, it is in direct opposition to the nature of being rich - rich is something you become, by being exempt from the rules that apply to 'lesser' creatures.
And if the low-income classes do not provide taxable income, I wonder why the republicans are so hellbent from prohibiting poor people from getting abortions. It suggests to me, they DO believe poor people serve some purpose, given that they insist on creation of new poor people.
I edited my post and added the "(as in higher tax percentages)", because this is the main thing that our left-leaning parties do.
We had a really shitty government for two years now, who did only one good thing, and that was to raise the general tax deduction, making our workers get a bit more net out of their gross income, and even the unions protested, because they "cared" about te governments budgets.
Now with the government change, we expect them to scrape that (because that would mean more money for the government, and the poor (their voters) would be least affected), and the paroles they'll use go along "taxing the rich". On the other hand, as you said, if you're rich, the "progressive" tax rates make it worth it to avoid taxes by funneling money around, and we (engineers, developers, etc.) get fucked, because we earn above average (and get hit with taxes hard), but still not enough to make it worthwile to do the whole tax-avoidance (legal) thing.
We had a really shitty government for two years now, who did only one good thing, and that was to raise the general tax deduction, making our workers get a bit more net out of their gross income, and even the unions protested, because they "cared" about te governments budgets.
Now with the government change, we expect them to scrape that (because that would mean more money for the government, and the poor (their voters) would be least affected), and the paroles they'll use go along "taxing the rich". On the other hand, as you said, if you're rich, the "progressive" tax rates make it worth it to avoid taxes by funneling money around, and we (engineers, developers, etc.) get fucked, because we earn above average (and get hit with taxes hard), but still not enough to make it worthwile to do the whole tax-avoidance (legal) thing.
Why? If you calculate it out taxing the rich can't help you. Even if it worked, it wouldn't provide a meaningful increase in government income. The "middle class" are the only ones that can be taxed to actually achieve sponsoring the government.
So while I understand the arguments for fairness, it cannot meaningfully affect my situation, and therefore it's a bit like an "there shouldn't be any homeless" type situation. Ideally, yes, I'd want the rich to pay. Practically, it's rather low on the priority list.
So while I understand the arguments for fairness, it cannot meaningfully affect my situation, and therefore it's a bit like an "there shouldn't be any homeless" type situation. Ideally, yes, I'd want the rich to pay. Practically, it's rather low on the priority list.
> I don't want higher taxes for the rich, I just want the rich to pay the same tax rate as I do in the first place.
But they don't, because of tax loopholes like these. If you want the rich to pay their fair tax, we definitely should "tax the rich". A couple of years ago, Warren Buffett pointed out that his secretary paid a higher tax rate than he did. Also because capital gains are taxed at a far lower rate than income.
But they don't, because of tax loopholes like these. If you want the rich to pay their fair tax, we definitely should "tax the rich". A couple of years ago, Warren Buffett pointed out that his secretary paid a higher tax rate than he did. Also because capital gains are taxed at a far lower rate than income.
I generally agree with you, but I think your reasoning is partially nonsense.
I haven't benefit very much from government infrastructure. Woo, we have roads now. Where multiple of my family members have died, and most of my family members have been traumatized by those deaths. The person who raised me nearly died in one, and it left us even further in the poverty trap than we otherwise would have been, because of millions of dollars in hospital bills, even with insurance, thirty years ago, that we spent decades paying off. Oh, internet? I had dial-up growing up in the 2000s because my local government sucked and the wider governments sucked.
Honestly, my education sucked. It was actively harmful to my development. Government incentives historically kept my family in poverty, leaving my societal background awful, and filled with terrible people. And, on top of all of that, every two years, there's a 50% chance that a government I despise becomes in charge. Even when a government I find tolerable is in charge, more goes to funding wars than anything I genuinely care about. "Billionaires aren't paying fair taxes!" becomes a campaign point, rather than anything that could genuinely help people, because no politician is interested in fixing things.
The one thing that is unambiguously good about the US government, the Postal Service, has been getting slowly dismantled and made inefficient over the last decades.
Evading taxes is the only morally correct thing to do in America. I'm not going to evade them, because I'm not a moral person and prefer the convenience of not being randomly investigated by the IRS.
We should tax billionaires and companies because billionaires and companies suck. That's the valid reason. Cloaking it in false-utilitarianism is nonsense. Taxation should be punitive.
I haven't benefit very much from government infrastructure. Woo, we have roads now. Where multiple of my family members have died, and most of my family members have been traumatized by those deaths. The person who raised me nearly died in one, and it left us even further in the poverty trap than we otherwise would have been, because of millions of dollars in hospital bills, even with insurance, thirty years ago, that we spent decades paying off. Oh, internet? I had dial-up growing up in the 2000s because my local government sucked and the wider governments sucked.
Honestly, my education sucked. It was actively harmful to my development. Government incentives historically kept my family in poverty, leaving my societal background awful, and filled with terrible people. And, on top of all of that, every two years, there's a 50% chance that a government I despise becomes in charge. Even when a government I find tolerable is in charge, more goes to funding wars than anything I genuinely care about. "Billionaires aren't paying fair taxes!" becomes a campaign point, rather than anything that could genuinely help people, because no politician is interested in fixing things.
The one thing that is unambiguously good about the US government, the Postal Service, has been getting slowly dismantled and made inefficient over the last decades.
Evading taxes is the only morally correct thing to do in America. I'm not going to evade them, because I'm not a moral person and prefer the convenience of not being randomly investigated by the IRS.
We should tax billionaires and companies because billionaires and companies suck. That's the valid reason. Cloaking it in false-utilitarianism is nonsense. Taxation should be punitive.
businesses yes. But governments abuse public spending - at least in the UK a significant chunk gets funnelled to conservative friends and family...why should I therefore want to fund that?
Seems like you need and try to convince people around you to vote for a party that wants high taxes on the rich (that include wealthy politicians), transparency on public expenses, public data on politicians resources, democratic control/revocation of elected representatives/public servants ? And forbid money owned medias by controlling their finances too ?
There are only two ways to take down an oligarchy, a revolution and its unavoidable oligarchic backlash with the help of antidemocratic violent forces or use of the Democratic tools that the oligarchy had to concede throughout the accidents of history to divide it further and reinforce democracy.
You will find it is quite hard though.
Abuse of taxes is not a party-specific issue. Until laws are passed to prevent this (which is probably a multi-decade lobbying effort), it will re-occur. You are right, it eventually boils down to "it is quite hard".
Why would a desire to pay less tax on your part influence a government’s misappropriation of the public purse?
That’s what voting is for surely?
That’s what voting is for surely?
Abuse of taxes is not a party-specific issue. Until laws are passed to prevent this (which is probably a multi-decade lobbying effort), it will re-occur. In the meantime, it's probably reasonable to be sour about paying taxes when it's subject to this practice by the receiver.
Voting only works if there are good options out there. If both options are equally crooked, there's no solution.
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The article isn't saying anything about not paying your taxes. It's about reducing the taxes you owe. Just like I do when I claim my standard deduction every year.
Can we also simultaneously hold the government accountable for efficient spending of the money?
I want 2x better government services for the same amount of taxes. The fact that no one questions government efficiency, but everyone is eager to pay taxes is delusional.
If I lived in Zurich or Tokyo, yes, I am happy to pay taxes.
I really don't want to give a dime to Oakland local government and California in general; I will do everything in my power and exercise all legal avenues to pay as little tax as I can.
I want 2x better government services for the same amount of taxes. The fact that no one questions government efficiency, but everyone is eager to pay taxes is delusional.
If I lived in Zurich or Tokyo, yes, I am happy to pay taxes.
I really don't want to give a dime to Oakland local government and California in general; I will do everything in my power and exercise all legal avenues to pay as little tax as I can.
Pay your tax first (a fair share at that) and then harp about unfair spending.
Have been. For years. I see dwindling QoL, infrastructure on stilts, power outages, anti-small-business bureacracy, woke government initiatives and dysfunctional law enforcement where I live.
I give my local and state government a solid 2/10 score.
I am a socialist where governments are efficient, liberatarian where governments are dysfunctional.
I give my local and state government a solid 2/10 score.
I am a socialist where governments are efficient, liberatarian where governments are dysfunctional.
>I am a socialist where governments are efficient, liberatarian where governments are dysfunctional.
At first glance this position seems reasonable, but ultimately it's short sighted - the game is iterative. Penalizing the public coffer ultimately results in higher costs over the long run as high ROI investments are left on the planning table. The attitude itself is a large part of why the American government is paralyzed and cannot effectively address issues: https://en.wikipedia.org/wiki/Starve_the_beast
At first glance this position seems reasonable, but ultimately it's short sighted - the game is iterative. Penalizing the public coffer ultimately results in higher costs over the long run as high ROI investments are left on the planning table. The attitude itself is a large part of why the American government is paralyzed and cannot effectively address issues: https://en.wikipedia.org/wiki/Starve_the_beast
This is a straw man. I’m speaking up for disproportional attention given to not holding the government accountable.
There should be more focus on why government is dysfunctional than about raising taxes. The situation is completely opposite today, extremely lopsided. Newspapers and journalism has stopped exposing government scandals and inefficiencies, but people are frothing over other things.
I want governments to work like Swiss agencies.
There should be more focus on why government is dysfunctional than about raising taxes. The situation is completely opposite today, extremely lopsided. Newspapers and journalism has stopped exposing government scandals and inefficiencies, but people are frothing over other things.
I want governments to work like Swiss agencies.
It's not a straw man at all.
Even in this post you restate the ideological underpinnings of starve the beast.
If you want governments to work like efficient machines, you need to invest in them, which requires political will that will only exist after dispelling the narrative that they are incapable of solving problems.
Also, I'm confused about the comment about newspapers and journalism. Do you have a source for that claim? My everyday experience is almost the exact opposite.
Even in this post you restate the ideological underpinnings of starve the beast.
If you want governments to work like efficient machines, you need to invest in them, which requires political will that will only exist after dispelling the narrative that they are incapable of solving problems.
Also, I'm confused about the comment about newspapers and journalism. Do you have a source for that claim? My everyday experience is almost the exact opposite.
What is a fair share? And what's the point of giving even more money to an entity that wastes most of it?
You position is irrational and seems to be from a place of envy over other's wealth than actual societal benefit.
You position is irrational and seems to be from a place of envy over other's wealth than actual societal benefit.
When people pay their taxes, they pay for politicians to come up with more ridiculous schemes like this, and more civil servants to administrate them forever.
You want to tell me when you do your taxes with your accountant you don't try to pay as little taxes as legally possible?
Mostly I just apply the straightforward rules until it seems fair. I don’t go making a seperate company to invest in a different company to hire workers in a specific area so that I can later pay zero taxes on capital gains.
Honestly, the level of bother is too much to keep track of for 20%, which is already really low.
Honestly, the level of bother is too much to keep track of for 20%, which is already really low.
Is it fair to contribute to a Roth IRA? Is it too much bother? Where do you draw the line?
I have an idea. I'll pay my damn taxes if you'll pay back your government-sponsored student loan. Deal?
This is such a common error in judgement, but I don't really know its name. Does anyone know? I'm genuinely curious.
I'm referring to the "I'll do X when others do Y" type of reasoning.
I'm referring to the "I'll do X when others do Y" type of reasoning.
> Does anyone know?
Sounds a bit like whataboutism.
Sounds a bit like whataboutism.
1) insane false equivalency
2) please don’t build straw men
3) please don’t be so combative
2) please don’t build straw men
3) please don’t be so combative
> I have an idea. I'll pay my damn taxes if you'll pay back your government-sponsored student loan. Deal?
What exactly are you trying to say here?
What exactly are you trying to say here?
You didn't really need to make that comment - the whole KKK thing speaks for itself.
Infrastructure is just a sliver of the fed budget. Education is funded by property taxes, also a sliver. "History" and "societal background" has absolutely not been "paid for by taxes".
If every working American contributed $8,000 in taxes we would have the same revenue as the insanely progressive system we have now. I don't think anyone here would advocate for zero taxes. I think they would simply advocate for less taxes.
If every working American contributed $8,000 in taxes we would have the same revenue as the insanely progressive system we have now. I don't think anyone here would advocate for zero taxes. I think they would simply advocate for less taxes.
>If every working American contributed $8,000 in taxes we would have the same revenue
You're not arguing for lower taxes; you're arguing for higher taxes on the poorest.
You're not arguing for lower taxes; you're arguing for higher taxes on the poorest.
someone who has a billion dollar exit is in a somewhat better position to pay those taxes than a person scraping by on minimum wage. What you seem to be advocating for here is not less taxes but pushing the taxes downward to people who can less afford them.
Maybe instead the federal government could do inventive things like substantially cut the military budget.
Maybe instead the federal government could do inventive things like substantially cut the military budget.
> The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.
Taxation is not a transaction you enter voluntarily; it's enforced by violence, and all these rationalizations don't matter as you don't have any choice anyway. So, taxation is either extortion, robbery or theft (I'm not sure which definition matches it better), and tax evasion is simply a moral obligation for everyone who believes that people should not be subject to violence.
Taxation is not a transaction you enter voluntarily; it's enforced by violence, and all these rationalizations don't matter as you don't have any choice anyway. So, taxation is either extortion, robbery or theft (I'm not sure which definition matches it better), and tax evasion is simply a moral obligation for everyone who believes that people should not be subject to violence.
>So, taxation is either extortion, robbery or theft
If ultimate enforcement through violence is the only determinant of whether or not something is a crime, then the very laws that dissuade other crime, say the robbery or theft that you refer to, are themselves blackmail, extortion or some other variation of violent crime.
This circular reasoning does not hold up to scrutiny, which is why it is almost only used in respect of taxation in libertarian circles and nowhere else.
If ultimate enforcement through violence is the only determinant of whether or not something is a crime, then the very laws that dissuade other crime, say the robbery or theft that you refer to, are themselves blackmail, extortion or some other variation of violent crime.
This circular reasoning does not hold up to scrutiny, which is why it is almost only used in respect of taxation in libertarian circles and nowhere else.
> the very laws that dissuade other crime, say the robbery or theft that you refer to, are themselves blackmail, extortion or some other variation of violent crime
No, because in these cases it's violence enacted in self-defense (often by proxy), and therefore not an aggression.
Defending yourself is not aggression. Going after somebody or their property is.
No, because in these cases it's violence enacted in self-defense (often by proxy), and therefore not an aggression.
Defending yourself is not aggression. Going after somebody or their property is.
>No, because in these cases it's violence enacted in self-defense
The use of coercive force is justifiable by the state or it isn't. If you now create justifications for why the use of violence in pursuit of self defense is valid, then you've conceded that the use of violence can be justified.
Which then means the "it's enforced by violence, and all these rationalizations don't matter as you don't have any choice anyway" no longer holds.
There are justifications for the use of violence, therefore we need some ulterior basis other than ultimate enforcement being premised upon the use of state violence in order to explain why 1) taxation is a crime, and further more that 2) that crime morally must be avoided.
You point towards the idea that Taxation is not a transaction you enter voluntarily, but the same can be said of your aggression theory; I didn't consent to any NAP with you, and the NAP is ultimately enforced by violence. I have no desire to abide by the NAP when it doesn't suit me as I never agreed to it.
Ultimately, whether it's the NAP, property rights or taxation, enforcement of pro-social behavior will require some scope, authority or justification which addresses more than just a single individual's consent. "I don't like taxes" is not sufficient an argument to state that you are morally obliged to commit tax evasion.
The use of coercive force is justifiable by the state or it isn't. If you now create justifications for why the use of violence in pursuit of self defense is valid, then you've conceded that the use of violence can be justified.
Which then means the "it's enforced by violence, and all these rationalizations don't matter as you don't have any choice anyway" no longer holds.
There are justifications for the use of violence, therefore we need some ulterior basis other than ultimate enforcement being premised upon the use of state violence in order to explain why 1) taxation is a crime, and further more that 2) that crime morally must be avoided.
You point towards the idea that Taxation is not a transaction you enter voluntarily, but the same can be said of your aggression theory; I didn't consent to any NAP with you, and the NAP is ultimately enforced by violence. I have no desire to abide by the NAP when it doesn't suit me as I never agreed to it.
Ultimately, whether it's the NAP, property rights or taxation, enforcement of pro-social behavior will require some scope, authority or justification which addresses more than just a single individual's consent. "I don't like taxes" is not sufficient an argument to state that you are morally obliged to commit tax evasion.
If choose to not make any money and own nothing, you pay no taxes. You can also "just move lol" to another country where there is no taxation.
>tax evasion is simply a moral obligation for everyone who believes that people should not be subject to violence.
Some people should definitely be subjected to violence. It's not hard to find examples where violence is justified. Even a Buddhist monk will forcefully stop a child from touching a venomous snake and make the child cry.
You don't enter life voluntarily, you don't go to school voluntarily, you don't go to the hospital voluntarily when you fell on your head, become unconscious and slowly bleed out...
>tax evasion is simply a moral obligation for everyone who believes that people should not be subject to violence.
Some people should definitely be subjected to violence. It's not hard to find examples where violence is justified. Even a Buddhist monk will forcefully stop a child from touching a venomous snake and make the child cry.
You don't enter life voluntarily, you don't go to school voluntarily, you don't go to the hospital voluntarily when you fell on your head, become unconscious and slowly bleed out...
Just curious - you don't believe that people should be subjected to violence, but how would a state be able to enforce sovereignty over its territory, without the means of violence? Implied or otherwise.
I know the US defense complex gets a lot of sh!t for its massive expenditure, but the hard reality is that no state on earth is going to invade the US, and thus threaten its citizens within the boarder, which is a result of tax money being spent on building the most powerful military in the world.
I know the US defense complex gets a lot of sh!t for its massive expenditure, but the hard reality is that no state on earth is going to invade the US, and thus threaten its citizens within the boarder, which is a result of tax money being spent on building the most powerful military in the world.
Just as I replied to a sister comment, defence is not aggression.
The fact is that we are all vastly better off under this social contract that we did not have a choice in agreeing to and that is enforced by violence.
> Taxation [is] enforced by violence... taxation is either extortion, robbery or theft
Perhaps, but less so than money. People wouldn't recognise other people as having millions or billions of wealth unless that was enforced through the violence of state capitalism, and a legal system protecting banks, creating cops and prisons.
Why would they? Millionaires aren't a natural concept; it's something our society allows.
Perhaps, but less so than money. People wouldn't recognise other people as having millions or billions of wealth unless that was enforced through the violence of state capitalism, and a legal system protecting banks, creating cops and prisons.
Why would they? Millionaires aren't a natural concept; it's something our society allows.
Justice (in any possible variety except “might is right”) isn't a natural concept too; it's something our society allows. You could also say that justice is a “social construct”.
So what? Does it mean that it's something not valuable or desirable? I don't think so.
So what? Does it mean that it's something not valuable or desirable? I don't think so.
The legal system is primarily a legal system, not a justice system.
Mainly, however, I am pointing out how absurdly reductionist it is for you to say “taxation is violence”. As you say, social constructs—taxation perhaps—can be “valuable or desirable”.
Mainly, however, I am pointing out how absurdly reductionist it is for you to say “taxation is violence”. As you say, social constructs—taxation perhaps—can be “valuable or desirable”.
Further, there are restrictions on what kind of business it can be. It can't be, for example, a golf course or a liquor store.