From the article: "[...] the BBC has not been able to confirm the claims, [...]"
I don't see a problem with the word "alleges" in this context, regardless of the pedigree of the publication.
But what is the solution? Most wealth of people like Elon Musk and Jeff Bezos is tied to ownership shares in their companies. I don't think it's fair to force them to sell shares so they can cover higher taxes. I also fear efforts to extract more tax money from them will ultimately just raise the bill for the middle class. The ultra wealthy can afford to hire a team of accountants to find the loopholes while small businesses are stuck with higher corporate tax rates.
One solution- if someone is taking out personal loans that function like income, let’s tax it like income. If someone really wants to live on 80k a year, that’s fine. But if they’re reporting 80k income but spending 10M, maybe they should be paying their fair share on that.
Edit- this has the benefit of completely avoiding the issue of unrealized gains and sticks to the issue of income...
It functions like income when they treat it like an average person treats their income. Spending on their home, their car, travel, etc. They’re using the loan to avoid taking income or realizing gains.
But yeah, I would be down for a more sensible sales tax situation. I’m sure there are a hundred ways to skin this cat.
How is that any different than paying with a credit card or using reward points? Those aren't taxable or treated like income so why should loans and mortgages be?
Someone sufficiently wealthy can push off taxes until they die and their heirs can use the step up basis[1] to avoid them entirely.
There's also a huge advantage in the ability to choose when one wants to pay taxes even if they eventually do get paid. Buffet loves to talk about unrealized gains as a loan from Uncle Sam at zero percent interest.
I think this is where at least talking about rather than a wealth tax a usage tax. Now some will fall through the cracks as a billionaire that lives like a middle class person would be taxed as such but that could be viewed as fair since the assumption is at some point the wealth will be spent and taxed. The trick of a usage tax though is some kind of baseline income or offset to prevent the inevitable result of permanent poverty as rich have the safety net of wealth and a usage tax just encourages them to hoard more and distribute less to employees.
Why would they need to sell anything? Just take a salary large enough to cover the wealth taxes. A CEO with a $100M net worth should easily be able to command a salary greater than $1M.
Some are. We live in an area where annual taxes are about 2% the value of the home. Home values have been skyrocketing and taxes along with them. Some people on fixed incomes can't afford it so are forced to sell. I think property tax should be abolished in general, but the problem with taxing ownership of a company is that owners are then forced to spend that much less on expenses to cover their tax burden (fewer jobs, or lower salaries for employees).
A lot of companies operate close to break-even or even at a loss. What happens with the owner of a $2m / year company must come up with a 10% wealth tax amounting to $200k, but the company is operating at break-even? Expenses must be cut to pay the tax. Ultimately hurts the lower and middle class the most.
> I don't think it's fair to force them to sell shares so they can cover higher taxes.
If the treshold is high (say $1B) then I don’t think it would be that unfair to tax stock like property at e.g 1% a year.
Diluting power would just be a secondary benefit in megacorps.
I just don't see that working in practice. I've worked hard to build a small company and can't imagine losing 1% a year. The longer I work the less I own. If this was the reality, people would find a way around it even if it meant incorporating in another country entirely. And lets be honest, it would start at 1% and go up from there. We pay almost 2% / year of our home value in property tax.
I'm not saying to stick the middle class with the tax bill - just pointing out that taxes on the rich usually end up being paid by the middle class whether intended or not.
The better solution is to cut spending and the need for more taxes in general.
A middle ground might be public tax info for the richest 100 people. Most of them are verifying their wealth for Forbes and Bloomberg rich lists anyway.
If anyone understands the reasoning behind the US capping your deductible net capital loss in any tax year at $3,000 vs allowing your full capital losses to be offset I'd be interested.
Idea is to prevent people from offsetting large incomes with capital losses. This simply appears unfair to many - earning lots of income but paying little tax.
A more sophisticated argument is that since you can control capital losses by choosing which assets to sell you would be able to manage your taxes. With enough assets and some planning you could never pay taxes despite having a large income.
The $3,000 cap prevents this. Similar approaches are used throughout the tax code to prevent abuses.
One big reason is to push "people" that are basically engaging in a trade or business in to being a formal business, and taking the losses as business losses.
I am not rich by any means, nor do I own a house/car/stocks etc. And I have a severe dislike for Bezos, Buffet, Bill Gates and other CEOs (I do like Elon though as he seems to be one of the few ceos who’s actually heavily involved with his products). I also hate the massive influence big tech and massive corporations have over politicians.
But I really don’t see the fascination of people with “we need to tax the rich more”. For what? To give even more money to the already bloated and corrupt government? The government has plenty of money and yet it’s not used to achieve anything positive. Places like Chicago, Baltimore get crazy amounts of money for decades but the lives of Americans living there hasn’t improved and kids are worse off today education wise. San Fran and LA have crazy taxes and yet have the worst homelessness crisis and defecation on the streets. What we should be talking about is taxing people less and getting rid of the massive bloat and corruption in the government. Getting rid of the lobbying power corporations have over Washington. Getting rid of insider trading being legal for congress and senate. Making any big tech with over a million users in the US into public utilities. Looking into how to make the military spending more efficient, stopping forever wars and cutting down on private contractors. Forcing universities to co-sign the student loans and use a percentage of the salary of the said student after graduation to pay back.
Taxing the rich just for the sake of it while the government gets to eat it all without any improvement in lives is silly.
I would recommend watching the first 4 minutes of this Walmart vs Morons podcast:
I've seen people complaining that the article is disingenuous because it conflates income taxes with capital gains taxes. My response is 'so what'. When you make above a certain income level, you don't need anymore income and can play around with reinvesting capital gains to push taxes into the future while amassing wealth. Sure, you're not realizing the income, but what you're doing, I think, is gaining power and influence. To me, it makes some sense to tax capital gains the same as income, at least above a certain amount.
Once you have a certain amount of assets, there's no need to realize any personal income. It becomes completely voluntary. If you have a billion in stock, you could leverage that to pay personal expenses. You could use an unrealized loss over there to balance out the cash you're taking in from a gain over there. You can use companies and foundations to execute any vision you have outside of your household. If you play that game long enough, your descendants will get a cost basis step up. Tax is essentially voluntary when you are that wealthy, where as it is completely mandatory for me. I see absolutely nothing disingenuous about questioning the biggest loophole of them all.
A more meaningful questions is: do you trust governments to provide services fairly and with accountability?
Framing the question in terms of politicians redistributing money sounds like an attempt to use base emotions to reach a foregone conclusion. I would like to think that framing the question in terms of governments providing services encourages people to examine how governments work and what they actually have to offer. In other words: you are welcome to debate the mechanisms of government in providing fair and accountable services. (Of course, it could just be that I am exhibiting a bias in the other direction.)
It's not a service if I can't opt out of paying for it. My money is being redistributed, through the implicit threat of force, to all kinds of things, whether they are good ideas or not. There are no competitors and I can't choose what my taxes are spent on. Politicians do not provide services, they redistribute money.
The only reason "your money" has any value at all is because it can be used to pay taxes. USD is not backed by anything other than the government's "threat of force" to collect taxes.
So in essence, taxes are a service to you, they make your money worth something to other people. Without that, we would be using soda pop bottles (or whatever) instead.
What is the alternative? It seems that now we are trusting the rich to pay their share, which--as a percentage of their wealth--is a rounding error in practice.
I think an alternative would be an economy where most people own some piece of the economic whole. For example through worker cooperatives as Richard Wolff advocates. Then everyone can share in the wealth of a healthy economy.
Why are we using wealth as the metric for what's a "fair share?" In terms of competing with everyone else for purchase of scarce goods and services, income is what matters.
I don’t trust politicians but as David Harvey has said, “wealth redistribution is the lowest form of socialism”.
The ideal way is that wealth is more equitably distributed before it is created. Instead of a system where business owners represent a tiny minority, who then grow very wealthy and are taxed, we could have a system where everyone owns a little piece of the economy. At its simplest this could be realized by a growth of worker cooperatives, though other schemes exist. [1]
So no, we don’t have to trust politicians to redistribute the wealth and we shouldn’t. But we can build a society where billions simply do not accrue to a tiny minority of the population.
Quid pro quo. I have zero issues if individuals want to conduct transactions with their full [individual] legal and financial liability on the line. But if/when one wants the privilege of government recognized legal and financial limited liability in transactions then I have zero issues with those transactions being regulated and taxed.
Me either but I just don’t think a system where people get super wealthy and then politicians tax them is a system that will also be a functioning democracy. Instead the super wealthy game the system. So sure, taxing the rich is fine, but I think we can do better.
> Instead of a system where business owners represent a tiny minority, who then grow very wealthy and are taxed, we could have a system where everyone owns a little piece of the economy.
Like 401k/HSA/DB pension fund investments in index fund ETFs?
Eh, it’s a complex issue but generally that won’t do. When I talk about the workers “owning” a piece of the economy I’m including an important part of most ownership which is executive control. If a group of workers own their business they can also control how the business is used. This leads to more democratic outcomes. And actually “ownership” as shorthand isn’t exactly accurate as Richard Wolff argues that the important part is worker control, but they do not strictly need to own the business - they could sell shares of their business to investors who would get a cut of profits. What is actually important is worker control over the means of production, and sometimes I use “ownership” as a slightly incorrect shorthand.
If your vote is as powerful as you claim, then explain to me how the wealth disparity has increased over time, and that most politicians weren't complicit in that process. Your politician allies are not your allies. Do you think it is difficult to lie to constituents and double-deal, especially when all of your peers are doing the same?
You were asking how to make those spending your money accountable (be it by spending your taxes or saved money through deductions or lower or absent taxes). You were seeking control, and I explained to you how and where you have it.
You implied that democratic control over your taxes was not enough. I wanted to point out you have far less control over how people who don't pay tax and who you don't elect. I am glad you now agree that democratic control is an altogether preferable situation than letting billionaires spend their money undertaxed as they please.
It was literally written because the United States government did not have a standing army and there were no immediate intentions to create one. Every other reason is secondary to that one.
> Extravagant as the supposition is, let it however be made. Let a regular army, fully equal to the resources of the country, be formed; and let it be entirely at the devotion of the federal government; still it would not be going too far to say, that the State governments, with the people on their side, would be able to repel the danger. The highest number to which, according to the best computation, a standing army can be carried in any country, does not exceed one hundredth part of the whole number of souls; or one twenty-fifth part of the number able to bear arms. This proportion would not yield, in the United States, an army of more than twenty-five or thirty thousand men. To these would be opposed a militia amounting to near half a million of citizens with arms in their hands, officered by men chosen from among themselves, fighting for their common liberties, and united and conducted by governments possessing their affections and confidence. It may well be doubted, whether a militia thus circumstanced could ever be conquered by such a proportion of regular troops. Those who are best acquainted with the last successful resistance of this country against the British arms, will be most inclined to deny the possibility of it.
> Besides the advantage of being armed, which the Americans possess over the people of almost every other nation, the existence of subordinate governments, to which the people are attached, and by which the militia officers are appointed, forms a barrier against the enterprises of ambition, more insurmountable than any which a simple government of any form can admit of. Notwithstanding the military establishments in the several kingdoms of Europe, which are carried as far as the public resources will bear, the governments are afraid to trust the people with arms. And it is not certain, that with this aid alone they would not be able to shake off their yokes. But were the people to possess the additional advantages of local governments chosen by themselves, who could collect the national will and direct the national force, and of officers appointed out of the militia, by these governments, and attached both to them and to the militia, it may be affirmed with the greatest assurance, that the throne of every tyranny in Europe would be speedily overturned in spite of the legions which surround it.
Get another loan. If you're rich your assets are growing and so refinancing an existing loan with a larger one gives you more cash to spend and to perform perfunctory maintenance on the loan until it's time for an even bigger loan.
Dying in debt to your trust fund just means the trust fund can write off a large loss before estate taxes.
We do tax capital gains. You pay taxes when you sell. Do you mean tax unrealized capital gains?
There is a reason you don’t owe taxes on a stock you haven’t sold yet. For one thing, what if you have to pay tax at one valuation, and then it goes down later.
I agree that taxing unrealized capital gains is a fundamentally flawed approach. However, the problem with the current system is that these ultra-wealthy people just end up borrowing against their equity, avoiding selling if possible.
I think it would make sense to count borrowing against equity as tax-wise equivalent to selling that same equity.
With that loophole closed, together with raising the capital gains tax, I think the tax system would be much more in line with what people expect from it.
But borrowing is not equivalent to selling, tax wise or any otherwise.
When you get a mortgage to buy a $750k house, do you want to be taxed as though you had $750k income that year? You’re just borrowing against the value of an asset after all.
Yes, but the difference is that borrowing against your unrealized investments is a way of dodging taxes. I think the tax code can handle that level of subtlety without paying attention to your flippant reductio ad absurdum.
Sure and borrowing $750k to buy a house is a nifty way for me to get $750k without having to pay income taxes on $750k worth of income. What an amazing loophole that gives me completely free money and no taxes!
What the government could do is stop loaning out money at 0% (i.e. printing free money which inflates assets, like stocks held by wealthy people). If the prime rate increased, the rate banks would charge on asset-backed loans would also increase, which would make it less attractive than just selling the asset and paying the capital gains tax.
Taxes on real estate work that way and are a favorite among economists. I borrow say $500k to buy a house. Then I’m taxed some % of the property value each year e.g 1%.
Real Estate is not the same thing as stock. There is a finite amount of land. You didn't make it. Ultimately it is a shared resource and we pay a fee to society while we are permitted the exclusive use (with some restrictions) of a small part of the planet we all share.
Anyone can start a company tomorrow and declare that they have a billion shares of stock in that company. They only become worth something because the person that started the company uses their own effort and ingenuity to make the company do something that is valuable to everyone else.
Yes property taxes have another dimension of “fairness” to them, but that’s not why economists favor them: it’s because they can’t easily be dodged and are easy to extract (knowledge of property ownership is pretty reliable).
Taxation isn’t necessarily based on what’s fair or rational, it’s a way of financing public expenses. It might be more logical from the perspective of the people as a whole to tax wealth more and income less (for example) even though wealth is less logical and “fair” to tax than income or consumption.
It should be possible to target this. Have it kick in say over $10 million or when a loan is backed by existing rather than new assets purchased with the loan.
They don't "avoid selling," at least in the way you and others are implying. They only delay selling. At some point the loan must be paid back, and at that point they will have to sell something or take income, which incurs either income or capital gains tax.
And a trivial way to work around your proposed rule: borrow without collateral. Why would a lender be willing to do this? Because they know the other party is wealthy, that in the event of bankruptcy they have ways to collect, they make money on interest, and it is tax efficient under your new rule.
And in the meantime, they get to retain the full power and influence that comes with the stock/company that they control. The wealth inequality issue is as much about power dynamics as it is about dollars and cents.
> borrow without collateral
And it would be trivial to write the law to prevent that loophole. If a person has any unrealized gain over a certain amount, then any personal loan, secured or not, would qualify for some sort of realized gain tax.
Personally, I think it is simpler and more elegant to implement a wealth tax. It would encourage the wealthy to take more income or dividends to cover the tax, and it would also help shift investments towards more profitable/cash flow positive ventures. For example, all of the tech unicorns burning loads of VC money to acquire negative cash flow would be penalized under such a scenario.
Borrowing against your stocks isn't a loop hole. You eventually have to pay the loan back, when you do, you sell stock, pay taxes on the profit of the sale, and use the rest to pay the loan.
You didn't avoid anything, you just deferred it until later.
By the way, if the bank "forgave" the loan, and said you don't have to pay it back, that forgiveness is taxed - usually in a form 1099. So there isn't a loop hole there, either.
The issue is when the ultra-wealthy take out loans against their investment assets (and thus, those unrealized capital gains).
By doing that, ultra-wealthy _are_ realizing the value of their investments without being taxed. That's how this wealth is being accessed, and that's a large component of what drives these ultra-low tax rates for the ultra-wealthy.
Then HELOC would be taxed which many middle class people rely on. Also its a loan so it need to be paid back. Will payments on private loans be deducted from income then?
This is not on topic, but to me it's ridiculous that something like HELOC exists and is somehow widely accepted. Like dude, you'll never pay down that debt. Your house is not an ATM machine.
The underlying assumption that prices only go up. It's so deep in the culture you don't even see the absurdity of not building any equity except for what's generated by upwards price momentum.
Well, population growth has been a constant throughout that culture and that nation's entire history, so all of the consequences of that are to be expected, no?
Housing prices always reverts back to CPI over multiple decades, i.e they offer no real capital gain. Robert Shiller wrote a lot about this.
Also I don't understand how a growing population leads to increasing prices, while there's so damn much unused land? Either there is enough new land, then people eventually spread out (and prices revert to the CPI, to the cost of construction), or there isn't enough land and homelessness increases as more and more people are completely priced out. Right now nearly every country is in the first situation.
> Either there is enough new land, then people eventually spread out (and prices revert to the CPI, to the cost of construction), or there isn't enough land and homelessness increases as more and more people are completely priced out.
It's not binary. People like to live near other people in cities. Demand to live close to one's job, friends, activities, and loved ones drives up prices in dense areas even with unlimited room to expand elsewhere.
Desirable locations are desirable even on an infinitely-sized map.
Solutions to taxation do not need to be black and white simple rules. The US tax code is already purported to be 70,000 pages. It would be perfectly reasonable to write one tax code for middle class people below a certain net worth that encourages wealth creation, family wealth, credit and investment. It would be perfectly reasonable to have a separate tax code for the ultra wealthy that curtails loopholes, tax shelters, dynastic wealth and offshore accounting. For example, some countries tax net worth over a certain number of millions.
The free step-up in basis at death makes no sense for the very wealthy. The rule originates from the difficulty in determining the basis of assets of dead people. The very wealthy have accountants that track this.
Warren Buffett can pay capital-gains tax AND estate tax.
What if? Most jurisdictions assess property taxes annually, and many of them regularly reassess the property value on which the tax is calculated, rather than waiting until a sale to reassess.
One question is whether we want to encourage pure ownership/holding of assets (the current stock ownership situation) or whether we want to encourage productive use of an asset (the current land ownership situation).
And additionally, a significant fraction of most people's net worth is in their housing. With a typical tax rate of 1%, most non-wealthy people are effectively already paying a large wealth tax on a huge fraction of their net worth. But if you are ultra rich and have most of your wealth in capital instead, you get away with practically no wealth tax at all. The system is rigged beyond belief.
Land can have buildings on it. It might have resources like water, oil, minerals, timber, that can be used. It's a shared resource and we pay society for exclusive use of it.
What "productive use" are you going to get out of a share of Amazon stock?
The company itself will do productive things, but taxing people to hold the stock is going to make them do what productive thing, exactly?
This isn't really true. If you receive RSUs as part of compensation, you have to pay taxes according to the value of the stock at the time of vesting. You also have to pay tax when you sell the stock equal to the difference in price from vesting.
You might get a refund or you might pay more taxes when you sell, but there is precedent to paying taxes on stock that you currently hold.
Isn’t that generally a problem where people get slammed with huge tax bills on stock they aren’t able to sell and may not have the cash available to pay?
>Isn’t that generally a problem where people get slammed with huge tax bills on stock they aren’t able to sell and may not have the cash available to pay?
No, I can't say I've ever heard of that happening. You should be able to sell to cover. This will typically happen during an open trading window and brokerages will offer an option for "sell to cover".
>Why would we want to do more of that?
I didn't make a value statement one way or the other. I'm just saying your claim is wrong and maybe your misunderstanding of taxation on stock is not the reason that unrealized capital gains aren't taxed.
Ok correct me if I'm wrong, but RSUs are given to you as a part of your income, right? You don't buy them? That would make sense then to tax them as compensation. If the company gave you other non-cash items as a form of compensation, you would have to pay tax on that too. If the company rents an apartment for you, the value of the rent would be considered income.
That is a lot different than buying a stock at $10, having it go up to $100, and you now have to pay taxes on the gain (which may be temporary, the day after you pay taxes it could go back to $10).
The caveat would be that the capital gain during sale is calculated based on the difference from the price at vesting. So the original taxation is carried with you while you hold the stock which is the mechanism that you thought didn't exist for a reason.
For the second paragraph, it's not so different from real estate market fluctuations. You pay taxes based on the value of your property at a specific date even if that value tanks the very next day.
I think you’re missing the point, capital gains is when you sell an asset. The article is talking about how much net worth grew due to asset appreciation. Not how much stock they sold. The article is arguing for a wealth tax, without admitting it.
It conflates income with unrealized capital gains.
You can make an argument that income and capital gains should be taxed at similar rates, but it feels like they are being purposely misleading in their presentation, when they use unrealized capital gains as the denominator.
> No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich.
It is clickbait, emotion inducing garbage. Buffett’s stance for higher taxes has nothing to do with the fact that he had less income than other rich people.
I expected better from ProPublica. Arguing for taxing unrealized gains is fine, but trying to make it seem like Buffett is doing something sneaky to churn emotions is bullshit writing.
I read through the ProPublica article. What I got from it was:
1. They have a lot of unrealized gains.
2. They have losses.
3. They take out loans against those gains. I assume the play there is "I'll deal with it later (after 20 years of inflation-rate interest)."
4. They set up charities.
5. They lose money owning sports teams.
Yes, that summarizes it, but all of that was already known and did not to be supported by leaked tax records. The root cause is automation and technology is allowing for more winner take all markets, combined with government money printing and reduced power of labor to negotiate for a bigger piece of the pie means assets keep getting more and more valuable.
Which lead to ever widening wealth gaps which might not be good for society, so taxing unrealized gains might be an answer.
What's your personal 'true' tax rate? Taxes paid divided by all income and all gains (unrealized capital gains, increase in real estate value, etc...).
I'm sure you don't know. No one knows or has a frame of reference. It was chosen to emphasize the narrative. It's like comparing the carbon/waste from mining, manufacturing, delivery and use of a electric car vs. the carbon from burning a tank of gas -- and saying "ah ha! the total lifetime of an EV is worse for the environment than driving around town in a gas car"
Actually what I saw was that it conflated wealth with income. Just because there are unrealized capital gains in someone's account doesn't mean they are avoiding taxes.
It’s hard to value a potential large liquidation. A market sell by Jeff Bezos of 40% of his Amazon stock to pay for income tax would destabilize the markets. Also, if there was no tax advantage to holding stocks long term, the entire stock market would have been liquidated to zero in q1 of 2020. market volatility would certainly be much higher than it is now.
It does not have to be. All would have to do is transfer the shares to a separate entity and then borrow against them while hedging downside with options
Borrow and lever up to pay taxes while shorting your main (too concentrated) holding with long put options. What could go wrong ?
The IRS would more likely end up allowing you to take depreciation against your securities like they do for real property (which is subject to property tax)
1) The "so what" is that capital gains is a different thing than wage income from an economics standpoint. Capital gains taxes have different economic effects than income taxes. Most economists agree that capital gains should be taxed lower than income. Most countries tax capital gains far lower than wage income. For example, in Canada only half of someone's capital gains are included in income, and is then taxed at the ordinary income tax rates.
2) Worse, the article just looks at paper wealth and ignores whether there is even a capital gain. If Amazon's stock price goes up, and Bezos makes $10 billion on paper, the IRS doesn't tax him on it. Which is fine--to actually do anything with that paper wealth, he needs to sell the stock or engage in a similar realization event, in which case that gain will be taxed.
> to actually do anything with that paper wealth, he needs to sell the stock or engage in a similar realization event, in which case that gain will be taxed
The ProPublica analysis that the BBC refers to [1] explains it: you borrow with the capital as collateral and then when you die the debt is repaid by selling some of the capital. But because of the stepped-up basis on death there is never a "realization" of positive gains.
Capital gains should be taxed as income when it's realized as income. You can't reinvest your capital gains without the tax penalty.
However, it is completely unreasonable for long term capital gains to be taxed any differently than normal income. A dollar earned should be a dollar taxed.
The idea is to incentivize long term investment while also trying to smooth out volatility by making short term investments less profitable. Or, put differently, people want day traders to be taxed at a higher rate than average people investing.
"Don't hate the player hate the game," is what comes to my mind.
I would guess it's all legal. It is still good to have transparency, which might potentially change things. I am not so sure though. After all, politicans are usually rich as well.
But: All of these super-rich have probably created many, many jobs. I guess all-in-all it is a positive game for society.
> But: All of these super-rich have probably created many, many jobs. I guess all-in-all it is a positive game for society.
Pinning the credit for job-creation on the rich is absurd. They'd have no motivation to hire anyone without demand, which is something that others provide.
Seem absurd? Yeah, of course it is, but keep the capital but take away the demand and see how long those jobs stick around. Lots of capital and little demand, few jobs created. Lots of demand and little capital... well, give it some time, and not even very much, and you'll have tons of capital and lots of jobs, both. So, which perspective, exactly, is absurd? (nb the judges will accept "both, equally" and "both, but crediting the super-rich with job creation is the more absurd of the two" as correct answers)
At a certain level of wealth, you are the game. Amazon’s famous HQ2 contest was literally about which city would bend its own tax laws to benefit them most.
What's secret? Income and capital gains brackets are public knowledge. Is who has the money really that important? If you think income over 100,000 should be taxed higher, you can already use the current brackets as reference(and compare to what other countries use, for example).
The tax laws are public, but it's hard for most of us to understand how those laws apply in practice to people whose taxes are radically more complicated than most, and are prepared by the best tax experts money can buy. We also don't know the inputs. I think there is public interest in seeing how the tax code works in practice. I'd wager the results are a lot of different than the average person naively assumes.
> What's secret? Income and capital gains brackets are public knowledge.
That you are speaking about income and capital gains brackets indicates that you don't actually know how the rich hide their money from the tax man.
It, at a first approximation, gets laundered through foundations and into trusts, that they retain control of, but don't really pay either set of taxes on.
We have a whole section of the government dedicated to figuring out whether people are evading taxes and then pursuing them for it. It could use some more funding, but that’s the appropriate way to do it.
What are you going to add by having uninformed members of the public inspecting tax returns they don’t understand? Keep in mind there are people who turn down raises because they think being in a higher tax bracket will cause them to lose money. These are the geniuses you want to catch tax evaders?
> What are you going to add by having uninformed members of the public inspecting tax returns they don’t understand?
Nobody's saying these people are illegaly evading taxes. The question is: "Should what they are doing be legal?". And that is absolutely a question for a layman. That's what representative democracy is all about. We get to collectively decide what is appropriate, and inappropriate in our society.
Enforcement of the rules is for an unelected executive and judiciary, with limited public input. Determining the rules is for an elected legislature, with significant public input.
There is no government department responsible for determining whether or not the current tax code is fair. We, the public, get to decide that.
Ok, the question you proposed to answer in your previous comment was “Are the rich evading taxes?” which I took to mean the public should be assessing the current legality of what individual rich people are doing.
Various tax strategies can be and are made public without needing to dox anyone. We are currently debating about them right now. So what do we gain by opening up everyone to identity theft and fraud?
As a point of order "we" don't make these decisions at all. We elect people who do. And, you can support something being legal/illegal on principle alone.
It isn't the fault of the driver that drives 100 mph nearly as much as it is the society that sets the speed limit to 110.
No fan of the billionaires, but they're just following the code. None of these things are "loopholes" or bugs, they're features. Stop voting in people that do the bidding of these ghouls and you might get somewhere.
How does tax treatment on loans taken out using unrealized capital gains as collateral work? In particular, has anybody here taken loans out on unvested RSUs?
It's bizarre to see the federal outcry here since in Norway, everyone's tax return is "public". (You can request to see anybody's but they do get a notification that you viewed it. It was anonymous until recently)
It's hard to argue against sunlight being the best disinfectant.
Is republishing it illegal? That system seems like it'd immediately have some outlet request to see everybody's tax return and reprint it to recover the anonymity.
As others have stated, the article conflates income taxes with capital gains taxes. It also conflates asset ownership with income. Saying someone is "worth" a certain amount simply because they have a large stake in a corporation is an oversimplification. What they really own are illiquid assets, intellectual property, etc. Put to use, they produce income for the corporation as well as it's shareholders and employees, all of which are taxed in various ways and various levels.
Shareholders and employees. Where do you think salaries come from? If employees could generate income in isolation they wouldn't need jobs would they? The assets of a company are a shared resource that benefit everyone involved with the company as well as the supply chain. Does it benefit shareholders more? Yes. Should tax loopholes be closed? Yes.
Politicians are just business people who haven't learned how to provide value in a free market. They still want money and power, but without providing things that people are willing to pay for. It is for this reason, I will never trust a politician to be benevolent when they want to increase taxes to prevent people from making "too much money." It's all an elaborate game, based on greed and envy, promising fairness, but actually stealing more from your pockets. Beware.
For people aggrieved by these abuses, I highly suggest the book "The Myth of Ownership" by Prof. Liam Murphy.
tldr: there is no such thing as "before tax income" as all income is only able to be earned because services paid for by taxes are satisfied necessary preconditions. Tying tax owed to services rendered calls for a change in the code to properly get to Elon's fair share.
Edit: Calm down, downvoters - its not a defense of billionaires. Quite the opposite.
We are publishing the tax secrets of the .001% - https://news.ycombinator.com/item?id=27434307 - June 2021 (463 comments)
ProPublica's Tax Story is Misleading - https://news.ycombinator.com/item?id=27441277 - June 2021 (ongoing)