[HN Gopher] We are publishing the tax secrets of the .001%
___________________________________________________________________
We are publishing the tax secrets of the .001%
Author : jbegley
Score : 537 points
Date : 2021-06-08 12:36 UTC (10 hours ago)
(HTM) web link (www.propublica.org)
(TXT) w3m dump (www.propublica.org)
| bjornsing wrote:
| Interesting, but Pro Publica's calculation of effective tax rate
| as taxes payed divided by wealth increase is weird. I don't think
| there's a jurisdiction in the world that calculates tax that way,
| and there are good reasons for that.
| speapr wrote:
| The exact point is that because taxation does not consider this
| income, the vast majority of the money made by very rich people
| takes this form. Pro Publica's point is not that these people
| are breaking the law, but that the tax system should be
| different.
| WalterBright wrote:
| ProPublica confuses wealth with income.
|
| If you have $2b in wealth, and lost $1b in bad investments one
| year, you're still a billionaire, and your tax rate is 0%.
| jl2718 wrote:
| Nope. $3000 yearly passive loss exemption.
|
| Let's say you operate a business netting you $1B and then buy
| a $1B pokemon card, which you sell for $0. You owe tax on $1B
| - $3000.
| WalterBright wrote:
| If you have $2b in wealth, and lose $1b of it, you do not
| owe taxes on $1b.
| EricRiese wrote:
| That's not how you would want to implement the tax law, but it
| reflects the moral intuition.
| fairity wrote:
| One of the primary mechanisms for tax avoidance is taking out
| loans against appreciated capital assets to avoid realizing
| capital gains.
|
| What's stopping the average citizen from exploiting this tax
| avoidance strategy?
|
| For example, every time I try to submit an order to sell stock
| that results in short-term capital gains, my broker should be
| asking me whether I want to take out a collateralized loan
| instead.
|
| If there are loopholes in the tax system, they should be made
| readily accessible to all.
| MR4D wrote:
| Your example of loans is tax _deferral_ , not avoidance. As for
| your examples in general, those are really good.
|
| Collateralized loans on stock we usually call "margin loans"
| and are easy to get.
|
| Also, anyone in real estate will recognize the term "HELOC",
| where you can get a loan against the value of your home,
| presumably after its value has appreciated.
|
| I think both of those are fairly accessible, at least in the
| US.
| AdamN wrote:
| For the mega-rich it's tax avoidance. That money gets rolled
| into the estate or trust with the cost-basis resetting on
| death.
| lumost wrote:
| The average citizen can't borrow to pay off debts indefinitely.
|
| At ~2% interest the billionaire can borrow against their assets
| and _keep_ borrowing to pay off interest. The assets gain in
| value at 4-6% per year so they are actually coming out ahead
| and paying 0% tax.
|
| Even a middle class retiree typically needs to draw down their
| savings to pay expenses. Giving up 2% to avoid taxes wouldn't
| be viable. The bank would also observe that there is a higher
| risk that the retiree goes bust than a billionaire and not lend
| enough money for the scheme to be worthwhile.
| dillondoyle wrote:
| or even at all! large amount of Americans don't even have
| access to banking.
|
| The loans they can get are insanely (i think disgustingly)
| predatory.
|
| payday loans with fees can ed up being like 664% APR!!!!!
| Your 500 loan becomes 2000 you have to pay back in a couple
| months, which you obviously can't..
|
| https://www.cnbc.com/2021/02/16/map-shows-typical-payday-
| loa...
| Ericson2314 wrote:
| Right it's crucially important we leapfrog all this crypto
| and fintech nonsense by just doing "fed accounts for all"
| administered electronically and at the post office.
|
| Boring commercial banking should be utility, and any
| private sector offering will have to compete with a new
| non-grifter baseline.
| ajaimk wrote:
| You can:
|
| https://www.schwab.com/pledged-asset-line
| https://www.wealthfront.com/portfolio-line-of-credit
|
| And HELOCs are essentially the same for people who own a house
| but not stocks.
| fairity wrote:
| Got it, but why don't brokers more aggressively push this
| program onto clients? It seems like a win-win.
|
| The debtor avoids the elevated short-term capital gains tax.
|
| The bank gets interest payments on a loan that has an almost
| 0 default rate due to the loan being fully collateralized.
| cj wrote:
| > why don't brokers more aggressively push this program
| onto clients
|
| They do.
|
| Wealthfront (as just one example) features and advertises
| this prominently in their app.
|
| It's also very easy to do with Robinhood, simply withdraw
| cash using your margin. Interest rates are quite low. 2.5%
| with Robinhood, 3.65% with Wealthfront.
|
| There's a big "Borrow cash" button right when you open the
| Wealthfront app.
| relix wrote:
| You're basically describing a margin account. If you have a
| portfolio on a margin account at the broker, you can just
| withdraw money from it up to the amount that your margin
| allows. That automatically starts a loan for that amount,
| collateralised by your portfolio.
|
| The problem is that this is not nearly the same as selling
| stock and withdrawing the sales money, because you keep the
| risk that the stock will go down thus force liquidating
| your portfolio. You're conflating selling and borrowing,
| they're not identical except in these very vague tales
| about the ultra-rich.
| [deleted]
| iooi wrote:
| > It seems like a win-win.
|
| It's not a win-win, there's significant risk.
|
| > fully collateralized
|
| This is not true! The underlying asset fluctuates in value
| and is open to lowering significantly in value, leaving the
| bank holding the bag.
| AdamN wrote:
| Depends on what you spend the money on. If you take the
| margin and spend it on an asset, then you have the
| underlying stock as well as the asset to cover calls.
| Still requires correct thinking but the risk is mostly
| based on what you do with the loan.
| ac29 wrote:
| > leaving the bank holding the bag
|
| You probably underestimate the ability of banks to
| evaluate risk. Yes, they absolutely could end up
| underwater on an asset backed loan, but you also
| shouldn't assume that you can take out $1 in loans on
| every $1 of stock.
|
| On Schwab's page, they say: "Schwab Bank, in its sole
| discretion, will determine what collateral is eligible
| collateral and the loan value of collateral". So, if you
| have some recently highly-appreciated shares of AMC for
| example, they might decide they are not eligible
| collateral, or only offer to lend you $1 for every $5 of
| stock.
| influx wrote:
| LOL, yeah the banks have been so great at leverage in the
| past couple of decades in the USA that they have to get
| bailed out repeatedly.
| ajb wrote:
| "What's stopping the average citizen from exploiting this tax
| avoidance strategy?"
|
| Probably that the average citizen doesn't have capital gains.
| twinge wrote:
| Only 55% of Americans own stock:
| https://news.gallup.com/poll/266807/percentage-americans-
| own...
| iso1631 wrote:
| most of those will be in retirement plans which I assume
| aren't taxed?
| MR4D wrote:
| > which I assume aren't taxed?
|
| It depends on which kind of retirement account. Might be
| in Roths and Roths-401Ks which are taxed when the money
| goes in (treated as regular income), or IRAs and regular
| 401Ks which are taxed as regular income when the money
| comes out.
| repiret wrote:
| But neither Roth nor Traditional 401k/403b/457/IRA are
| subject to capital gains tax.
| Nbox9 wrote:
| If you are in the US you should brush up on your personal
| finances.
| notahacker wrote:
| Certainly not capital gains of the order of "all the spending
| money I need, without any worry about repaying it on time
| even if the asset goes back down in price."
| onlyrealcuzzo wrote:
| I've been saying this for years. Low interest rates are like a
| triple handout to the extremely wealthy.
|
| 1) pump up asset prices.
|
| 2) lower the rate at which you can borrow against unrealized
| gains to make avoiding taxes more attractive.
|
| 3) people use this savings to buy more assets. Repeat step 1.
| Virtuous cycle.
|
| I can't go to a bank and get a loan against $1M in my 401k at
| 2% interest. But I know people with $50M+ that are doing this.
| It's absurd.
| tomp wrote:
| Can you explain how this works, how it avoids tax? Taking a
| $100 loan still means you'll need an income of $100 (plus
| interest) future income and tax paid on this income...
|
| If you're gonna say "they benefit in the extra capital gains
| between now and when the loan is repaid" - no, that can't be
| it, that's exactly equivalent to taking a $100 loan and
| investing in stocks instead (i.e. leverage).
| jedberg wrote:
| The assumption is that you are using the money for an income
| generating activity like buying a rental property.
| tomp wrote:
| The correct expression to use to refer to such money is
| "loan", not "tax evasion".
| mciancia wrote:
| Hm, but income from rental is also taxed, isn't it? If so,
| how does it help?
| jedberg wrote:
| The income from the rental is taxed, but slowly over
| decades. You don't have to take that entire tax hit in
| one year.
| notahacker wrote:
| Also, people buying rental property from cash they earned
| from wages or selling their business pay tax on the
| wages/gains _and_ the rental income, not just the
| latter...
| alex_young wrote:
| You can also sell it and take the gains tax free in many
| cases.
| MR4D wrote:
| Short of a 1031 exchange, I'm not sure how you would do
| that.
| alex_young wrote:
| You can sell a house every 2 years and write off up to
| $500k in capital gains as long as it's been your primary
| residence for 2 of the last 5 years. Doesn't need to be
| consecutive.
| cj wrote:
| 1) You purchased $100 of SPY on June 15th, 2020
|
| 2) You're buying a house, and you need $100 today.
|
| 3) You sell $100 of SPY, and pay short-term capital gains (up
| to 37%)
|
| OR...
|
| 1) You purchased $100 of SPY on June 15th, 2020
|
| 2) You're buying a house, and you need $100 today.
|
| 3) You take a loan for $100
|
| 4) You wait until June 15th, 2021 and then sell $100 of your
| SPY holdings, paying long-term capital gains (15-20%)
|
| 5) You repay the $100 loan
|
| ...it doesn't really avoid tax. It's just an alternative way
| of accessing capital by taking out a loan instead of
| liquidating assets.
| dakial1 wrote:
| But if the asset sale + the debt leaves you at a loss
| wouldn't you be able to avoid paying the capital gaibs over
| the asset sale?
| cj wrote:
| The theoretical assumes SPY increased over the time
| period. If it decreased, you could of course sell it and
| pay 0% since your investment lost money, short/long-term
| gains wouldn't matter because there wouldn't be any
| gains.
|
| I might be misunderstanding your question though.
| MR4D wrote:
| Debt is not a loss unless you default on it.
| derivagral wrote:
| The above basically arbitrages long-term vs short-term
| capgains for the price of 1 APY cycle, right? That's ~23%
| for short in the USA, and up to income-level (37%?) for
| short-term. Quite a big difference for a 2-5% APY loan that
| you close after 1 year, and the numbers would seem to scale
| better the higher you go.
| [deleted]
| dakial1 wrote:
| https://youtu.be/8pBPZMUcsh0 They never sell, they borrow
| over that invested money and pay 3% (interest) instead of 37%
| (income tax)
| fryry wrote:
| Also available in the UK, Interactive Brokers margin loan. The
| interest rate is 1-2% p.a.
| jedberg wrote:
| My Etrade account has that option. But I don't use it because
| it's risky. If you take out a loan collateralized by a stock,
| the stock could drop and you'd owe a lot of money.
|
| Selling the stock locks in the gain. Now, if you only need say
| 1/2 the value as cash and can absorb the risk of the stock
| going down, then it makes sense. Or if you want to "buy
| insurance" by taking out an opposite short position, that would
| also make sense. But that short position will cost you money
| too.
|
| So it's not as straightforward as "just take out a loan". You
| need a very good (and expensive) tax accountant to run the
| numbers and figure out the best strategy for your situation.
| Most people can't afford that.
| fairity wrote:
| Why isn't there an option to take out a loan where a
| repayment option is to transfer the capital asset (at
| whatever the value happens to be at the time of repayment)?
|
| I.e. I don't get why the risky part of this loan can't be
| mitigated by the bank taking on the risk and managing it
| separately. Surely, there would be investors willing to back
| these types of collateralized loans?
| MR4D wrote:
| > ... bank taking on the risk...
|
| Banks don't take on risk. Seriously.
|
| That's another conversation to have, but the simple answer
| is do you want the value of _your_ checking account
| impacted by someone else 's purchase of Gamestop, or Enron?
|
| And that's why banks don't take risk.
| Nbox9 wrote:
| Banks loan money, and every loan includes some risk. If
| banks didn't take on risk than the 2007/2008 bailouts
| wouldn't have happened.
| MR4D wrote:
| I should have clarified - banks don't take on _market_
| risk.
| kccqzy wrote:
| You can simulate what you want by simultaneously buying an
| at-the-money protective put and selling an at-the-money
| covered call. Then regardless of future stock price
| movement, at expiration (i.e. when the "loan" needs to be
| repaid) you always transfer the stock away.
|
| Now why don't you plug in this scenario into any Black-
| Scholes calculator and see how much of a net credit at
| entry you get (if you even have one). That would be the
| maximum loan amount you'd be able to get under this scheme.
| If you could get one at all, the loan amount is tiny
| compared to the value of the asset.
| jedberg wrote:
| You'd need a crazy high interest rate to account for market
| volatility. If the bank could make accurate predictions as
| to the future value of the stock, they would just invest in
| the stocks.
|
| Loans against other assets are much less risky, because
| they are backed by actual things. If the bank screws up in
| predicting the future value of a house, they can still own
| the actual house and land if you default. With stocks it
| would be far more risky because stocks are far more
| volatile than houses.
| fairity wrote:
| Hm, is it possible to define a range for "crazy high
| interest"? As the debtor, I'd be willing to pay up to the
| difference in long-term and short-term capital gains
| (~15%). I guess where I'm going with this is: I don't
| understand why the average person ever pays short-term
| capital gains tax.
| sokoloff wrote:
| I pay STCG on option contracts written and on
| (profitable) short sales (where the holding period is
| defined to be short-term).
|
| Other positions have a defined thesis and, if that thesis
| gets invalidated, I close out the position sometimes at a
| gain. I do try to make most of my gains be LTCG, but
| trying too hard to optimize capital gains rates can lead
| to poorer investment decision-making/asset allocation.
| jedberg wrote:
| > I don't understand why the average person ever pays
| short-term capital gains tax.
|
| Because the risk of holding the stock is more than the
| difference in short vs long term capital gains.
|
| If the stock is worth $1000 in gains, I know I can sell
| it and lock in the gains today and pay my normal income
| rate. If I have to hold it for another 6 months, there is
| a huge risk that it drops more than the 5-10% difference
| in the tax rate for the average person.
| therealcamino wrote:
| Taking the short position on a stock you own is called
| selling short against the box. I don't know much about it,
| just had heard of it, but it sounds like it's been regulated
| in the US (to reduce its use for tax avoidance) since 1997.
|
| https://www.investopedia.com/terms/s/sellagainstthebox.asp
| adolph wrote:
| If one's broker had collateralized loans in their menu of
| options, what volume of gains are needed to overcome the
| initial setup costs of the loan?
| WalterBright wrote:
| > What's stopping the average citizen from exploiting this tax
| avoidance strategy?
|
| If your stocks go down, you still owe the full amount of the
| loan. If your stocks go to zero, you _still_ owe the _full_
| amount of the loan.
| tootie wrote:
| That's not a tax loophole though. You still have to pay back
| the loan with interest. And it has to be paid with cash from
| somewhere. People like Bezos do this primarily to retain their
| equity because it's worth more than money to them. It's their
| ownership stake. For others, they are just betting the assets
| will appreciate more than the cost of the interest. It's income
| optimization not tax avoidance.
|
| You can do the same thing with a HELOC. Otherwise you'd have to
| sell your house and pay cap gains then spend the net profit. I
| don't think a HELOC is tax dodge.
| AnimalMuppet wrote:
| Um, at various times I have had a home equity loan...
| jvanderbot wrote:
| What I don't understand is: If I (a wage slave) find a football
| sized diamond in my back yard, I'm suddenly very "wealthy".
| Should I be forced to pay taxes on that find because my wealth
| has increased?
|
| What if I want to keep that diamond but cannot afford to because
| of the taxes?
|
| Isn't that how business owners gain wealth: By the valuation
| defined by others to the thing they "found". Should we force
| Bezos et al to sell some of their stock in their companies to pay
| tax? Surely a $100m+ tax burden would do that?
| 34679 wrote:
| Should you be able to take out a million dollar loan against
| the diamond, use the loan to buy stocks, and claim a loss on
| the year? Then the stocks increase in value, you're able to
| take out a new loan against them, and use that to pay off the
| diamond loan. Now you have a diamond, stocks, and no taxable
| income. Of course, you rinse and repeat.
|
| Maybe we need to re-examine the definition of "realized gains".
| dataangel wrote:
| You don't pay capital gains taxes until you sell the stock. The
| IRS only taxes you when you cash out. Presumably the articles
| will show the wealthy "cashing out" via loopholes that evade
| the tax.
| mrkurt wrote:
| The trick is to cash out by dying. You can do this by living
| off loans against your unrealized capital gains. These then
| get paid off at your death, and there are all kinds of
| "simple" ways to keep estate untaxed.
| rbtprograms wrote:
| I have a friend who is a member of the ultra rich, and this
| is exactly how his family uses their portfolio. They
| currently can borrow with .03% interest through their
| brokerage.
| mrkurt wrote:
| You do own taxes if you find a diamond. You don't owe taxes if
| you buy a rock for $10 and it increases in value to $50m.
|
| If you want to keep something you find and can't afford to
| because of taxes, you either get a loan or have to sell it.
| LargeWu wrote:
| When you own stocks, you don't pay taxes every time the value
| of your portfolio changes. You only pay capital gains when you
| sell those stocks.
|
| Your example isn't really that much different. You would only
| really need to pay taxes on that diamond when you sell it, in
| which case you would just use the proceeds of the sale to cover
| that.
| jvanderbot wrote:
| Right. But the article (and I think the general consensus
| around the movement) states that the net worth (wealth) is a
| missed tax opportunity, regardless of whether it is
| liquidated. Is that correct?
| mjmahone17 wrote:
| > What if I want to keep that diamond but cannot afford to
| because of the taxes?
|
| Then you have to sell it. This is no different from game show
| awards, where the "car" you ein is taxed at the car's value, so
| unless you have enough savings, you have to sell the car to pay
| the taxes.
|
| I don't really see any problem with this though? Absolutely we
| should force Bezos to sell some of his stock to pay taxes:
| employees already have to do this when they're given stock
| grants, why should it be any different for owners?
| jvanderbot wrote:
| But why should someone be forced to sell parts of their
| business (stock) because that business has increased in
| value?
|
| Or is that not the claim being made here? Isn't that the vast
| majority of the richests' wealth?
| mciancia wrote:
| I mean, it's possible he paid tax on stock he got when he
| started Amazon. It just wasn't that much back then.
|
| Also, forcing people to selling stock seems like something
| that can be abused - imagine stock spike like we had with GME
| this year, during change of address year followed by
| significant drop. You would probably have to pay more tax
| than stock is actually valued at.
| scott_w wrote:
| This is a strawman argument.
|
| Bezos did not stumble across Amazon while digging weeds in his
| back garden. He built a successful business through a mixture
| of hard work, risk, his contacts, laws and infrastructure that
| we collectively paid for.
|
| It's not downplaying his efforts to point out that he now
| contributes proportionally less to the country than he benefits
| from. This isn't an accident, either. Bezos pays smart and
| connected people to push for lower taxes and then avoid as many
| of those as possible.
| jvanderbot wrote:
| No, it was a question, not an argument. Let me restate it:
| Buying a stock (or bitcoin) uses gobs of the same regulated,
| government-funded infrastructure. If that stock/coin becomes
| immensely valuable, that (the fact that I now have a high net
| worth) makes me "wealthy".
|
| What I'm asking is: Please clarify whether the intent is to
| tax people based on their net worth (wealth), not their
| income.
|
| The articles are not clear. They state that capital gains are
| lower than income taxes, but they are not 1%. Yet they state
| that Bezos paid less than 1% effective tax rate _on his
| wealth increases_. Implying that it 's obvious we should have
| taxed _that_. It 's not obvious. Presumably, and I'm asking
| for clarification here, he would _eventually_ be taxed on
| that wealth when he liquidates it.
|
| If so, forcing someone to liquidate by placing a high tax
| burden on them is unprecedented for stock holdings and other
| forms of wealth, but not unprecedented for, say, land
| valuations.
| scott_w wrote:
| Look at the countless issues raised by people being unable
| to exercise stock options for tax reasons. It's clear that
| taxing stock is NOT unprecedented.
|
| We've seen repeatedly over the past 50 years that Bezos
| will NOT be taxed of that wealth under the current system.
|
| There's nothing sacred about different types of wealth. The
| question is whether society can benefit more from taxing
| and redistributing that wealth, or whether Bezos can by
| hoarding it.
|
| I don't just mean the raw tax receipts either. Tax policy
| influences behaviour, too. This has ups and downs but
| arguing about finding diamonds in the dirt isn't a remotely
| similar analogue to the discussion at hand.
| jvanderbot wrote:
| > Look at the countless issues raised by people being
| unable to exercise stock options for tax reasons. It's
| clear that taxing stock is NOT unprecedented.
|
| It is unprecedented to tax someone on the value of their
| unsold stock. That's what a wealth tax would be: We force
| someone to pay taxes on something (their holdings / net
| worth) simply because it is valuable, but not necessarily
| because it was liquidated into cash (sold). (like we do
| with land, but not stocks).
|
| > There's nothing sacred about different types of wealth.
| The question is whether society can benefit more from
| taxing and redistributing that wealth, or whether Bezos
| can by hoarding it.
|
| I think the answer to my question is: Yes, taxing wealth
| is one way of extracting more public funds from those who
| are the most wealthy, and many such ways should be
| considered.
|
| I don't advocate for/against this, I just want to
| understand and find appropriate analogies.
|
| Propublica seems to have taken advocacy a priori, when
| comparing wealth to income, and that was confusing to me
| because it is actually a drastic change without precedent
| that I'm aware of (except perhaps land ownership).
| LargeWu wrote:
| When Jeff Bezos buys a yacht, he doesn't buy it with
| Amazon stock. He cashes out that stock and then buys the
| yacht.
|
| I think a fair approach would be to use their total net
| worth as the threshhold for which wealth taxes apply, but
| taxes are only paid when that stock is turned into actual
| money, or equivalent. If you're not cashing out your
| company holdings, if your wealth is only "on paper", then
| you owe nothing. But if you try to start cashing that
| out, then you owe the wealth tax, and you don't get any
| proceeds until you pay off that tax first. Note that this
| would be on top of capital gains taxes.
| jvanderbot wrote:
| But the article lays out wealth as a baseline, stating
| that taxes paid are a small percentage of the wealth
| increases. Wealth is _mostly unliquidated_ because it is
| stock.
|
| If I'm understanding the argument correctly, the
| proposition is that we should ( morally, not legally )
| have levied additional taxes on these folks because their
| net worth has gone up as calculated by the value of
| things they own, like stock. I find that surprising and
| somewhat unintuitive. Thanks for clarifying.
| LargeWu wrote:
| I think you're correct in how you're characterizing the
| general consensus around wealth tax - that people should
| be taxed based on all accumulated wealth, including
| unrealized gains. I don't know how practical that is. I
| think an approach that frames it as 100% capital gains
| and/or marginal income tax rate on equivalent to the
| first 2-3% of your total gross wealth is more workable.
| morelisp wrote:
| > It is unprecedented to tax someone on the value of
| their unsold stock.
|
| You mean unprecedented in the US, right? European
| countries have been trying various wealth taxes on and
| off for some time now, some of which count global assets
| including stocks.
| dkokelley wrote:
| Exercising stock options is a unique case. If I as an
| employer give you $10m worth of stock (through grants or
| options), you have something akin to an "income" of $10m
| on the receipt of that stock. (For the record I disagree
| with taxing stock grants/options until they're realized
| and the proceeds can be used to pay the accompanying tax
| burden.)
|
| If I give you $1 worth of stock and it appreciates to
| $10m, you have capital gains that will be taxed when you
| realize those gains.
| WalterBright wrote:
| The top 1% contribute 38.5% of Federal income tax revenue.
| ausbah wrote:
| the top 1% own 31% of all the net wealth in the US, which isn't
| the same as income - but gives a good idea of how
| disproportionate their share is
|
| 38.5% seems too low
|
| https://www.federalreserve.gov/releases/z1/dataviz/dfa/distr...
| WalterBright wrote:
| People creating wealth are not taking it from others. Wealth
| is not zero sum.
| akie wrote:
| Two questions:
|
| 1. How much of the wealth (and/or income) do they have?
|
| 2. If they paid their taxes like the rest of the population,
| what would this number be?
| koheripbal wrote:
| 1. We don't know. Wealth is not taxable. Income is taxed.
|
| 2. They already pay according to the same rules as everyone
| else.
| LatteLazy wrote:
| No, the top 1% of earners contribute that. Wealthy people don't
| have earned income. If you go to work, even as a ceo, even in
| the top 1% of earners, you're not wealthy.
| cm2187 wrote:
| Would be curious to see twitter blocking this story on the basis
| that this is the distribution of stolen data as they did last
| year...
| jtdev wrote:
| Twitter only does that when it facilitates manipulation of
| important elections. They've moved on to protecting Fauci,
| Harris, Biden from the harsh reality of their own incompetence
| and rapidly vanishing facade of legitimacy.
| [deleted]
| arbitrage wrote:
| oh gosh, something is definitely going to happen, this time, i'm
| sure!
| williamtwild wrote:
| If they distill this information down to things that any person
| can use then it will be useful.
| WalterBright wrote:
| Let's say you borrow and invest $1 million into a business
| startup, like buying farmland. The land goes up in value 10%. Now
| you owe $40,000 in taxes. But you only made a $50,000 profit
| farming it.
|
| How are you going to pay taxes on that "gain"? You already
| borrowed money to pay for the farmland, you can't borrow any
| more.
|
| The only way is by selling off parts of the farm, which may not
| be feasible.
|
| In other words, many enterprises will never start because it is
| an impossible business model.
|
| You'll just wind up crushing existing businesses and make
| starting new ones infeasible.
| EricRiese wrote:
| That logic doesn't really apply when you scale up to the ultra-
| billionaires. Shares of stock are plenty liquid.
| WalterBright wrote:
| The rest of it still applies. It makes the numbers not work
| for starting a business. Besides, selling off pieces of it
| means making less and less money off of it. You wind up
| working for the people you sold it to in order to pay the
| taxes.
|
| You might as well kiss entrepreneurship goodbye with wealth
| taxes.
| jl2718 wrote:
| Unless the float is much smaller than the cap.
| jtdev wrote:
| Our political leaders and absolutely terrible media are the
| villains here... not the rich people protecting their wealth.
| Kharvok wrote:
| The article seems to be toggling the conflation of income vs net
| worth.
| alfiedotwtf wrote:
| Side-note: although not part of the 0.001%, it's mind blowing
| that it's June 2021, and we still haven't seen Trump's promised
| tax return.
| geoduck14 wrote:
| Did Trump make that promise? Are you REALLY surprised he didn't
| fill that promise?
| standardUser wrote:
| Yes he did make that promise and no, of course no one should
| be surprised Trump lied directly and repeatedly to voters.
| digglet90 wrote:
| Imo, Wyoming or Sweden not something in between. Most economies
| do something in between and outrageously favour maintenance of
| large stores of ultimately unworkable existing wealth.
| asteriskseven wrote:
| Misleading title.
|
| The title of the article is "Why We Are Publishing the Tax
| Secrets of the .001%"
| kristjansson wrote:
| The conflation of change in mark-to-market net worth with income
| has got a whole lot to do with the constant breathless reporting
| of "Bezos/Gates/Buffet/... made/lost x BILLION dollars today"
| every time the market moves by more than a point.
|
| Sure, I get they want to beat the drum on wealth inequality, and
| perhaps that's a drum worth beating. But its a disingenuous
| disservice to pretend that these people are sitting on a massive
| pile of 'hoarded' liquid cash that could be redistributed in a
| meaningful without incurring massive losses. Might as well
| pretend that we could seize and sell all of the latest $100bn
| shitcoin and get $100bn USD to distribute.
| HWR_14 wrote:
| I never followed this chain of logic. The whole point behind
| the stock market is to treat any commonly traded stock as a
| liquid asset. Why do you think that this fails with respect to
| Bezos and Gates?
| chrismcb wrote:
| By definition a stock is not a liquid asset. It needs to be
| sold first. In order to be sold, you need a buyer. You don't
| always have a buyer.
| jonny_eh wrote:
| And yet I had to pay tax for exercising stock options from
| a startup I left, stocks I was never allowed to sell since
| the company was private.
| HWR_14 wrote:
| The stock market converts stock into a (more) liquid asset.
| The value of GOOG may vary day to day, but no one thinks
| that it's difficult to turn shares into cash.
| throw0101a wrote:
| > By definition a stock is not a liquid asset.
|
| "By definition"? Which definition are you using?
|
| Liquidity exists on a spectrum and is not binary:
|
| > _In business, economics or investment, market liquidity
| is a market 's feature whereby an individual or firm can
| quickly purchase or sell an asset without causing a drastic
| change in the asset's price. Liquidity involves the trade-
| off between the price at which an asset can be sold, and
| how quickly it can be sold. In a liquid market, the trade-
| off is mild: one can sell quickly without having to accept
| a significantly lower price. In a relatively illiquid
| market, an asset must be discounted in order to sell
| quickly.[1][2]_
|
| * https://en.wikipedia.org/wiki/Market_liquidity
| jdsully wrote:
| Bill Gates started selling off his microsoft stake in the
| late 90s. It took him more than two decades to get from 49%
| ownership down to the 1.9% he has today. It's hard for figure
| heads to divest without crashing the stock because it carries
| substantial signal risk.
|
| The stock market is only liquid at smaller scales, bigger
| transactions will have dramatic effects on the price.
| HWR_14 wrote:
| You're assuming Gates was trying to divest from MSFT.
| There's no evidence he was in a hurry.
|
| You are right that insiders selling can be a signal. That's
| why we have laws that govern their actions. But that's
| because it is assumed Gates knows more than the average
| MSFT investor.
|
| Yes, if Bezos woke up tomorrow and wanted to crash AMZN by
| selling his shares, he could. But he routinely liquidates
| over a billion dollars worth a quarter.
| jdsully wrote:
| No assumptions are needed. He created a public divestment
| plan and sold 20 million shares per quarter since. While
| it's normal for insiders to declare trades well in
| advance doing so decades prior is a bit notable. He was
| pretty upfront about wanting to diversify after Ballmer
| took over.
| taeric wrote:
| I think the market is more to treat the stake in a company as
| a liquid asset. Such that you can transfer stake to someone
| else for an agreed value.
|
| But, it is not the value that is liquid, necessarily. It is
| just the stake. In theory, there is intrinsic value to this.
| In practice? Much more complicated.
| throwaway2048 wrote:
| one way to put it, if amazon stock lost 98% of its value, Bezos
| would still have over 1 billion dollars worth of it.
|
| The day to day fluctuations may be relatively meaningless, but
| the amount of wealth controlled via it is very real.
| ksec wrote:
| Yes. Most people dont think about it that way. I am wondering
| if there are any simple free bitcoin / cryptocurrency making
| services? Get people to apply one crypto of their own, make 1
| billion coins. I buy one for one coin for $1. Now that person
| is instantly a _billionaire_.
| asdff wrote:
| If they didn't want to incur loss Bezos could just gift me his
| shares in Amazon
| Ericson2314 wrote:
| Yes, it's a bummer common discourse does this. While making the
| billionaires wealth seem more liquid would seem to overstate
| their power, I think the real issue is quite opposite.
|
| The popular understanding of capitalism is accurate prices and
| liquid goods, and only a few things (as contested in culture
| wars) are genuine separate axis. The reality is the real power
| of the billionaires isn't in their "net worth" (however good
| the accounting is), but in their power over the institutions
| they control. Look at the size of the flow in and out of those
| institutions, their capacity for investment. Realize also that
| even as we collectively have the wealth for much simultaneous
| investment, earlier investment has a profound and non-erotic
| effect on future history (e.g. car vs public transit, Unix
| being entrenched for 50+ years, etc.) This is the real travesty
| of billionaire power, not the ability of Bezos to buy big
| yachts or whatever.
| fvv wrote:
| Lol if i have a paint which value fluctuate every year i should
| pay taxes or receive credits according to this article.. same
| for car , house.. incredibly ingenuous article ... Why stop
| here.. My qi could have a potential value if i do a test and
| get a high score i should pay taxes ? Stocks or growing company
| shares should not pay taxes until you sold them because you
| didn't benefit from those until you sell them, if you decide to
| give your shares to your employees when you die.. and you die
| poor because your annual income was low and you never sold more
| shares than you needed why you should pay billion in taxes if
| the company is worth billions (or was worth billions at certain
| point in time ) ? This kind of tax system proposed may cause
| company fail because shares owners may be forced to sell shares
| to pay taxes on shares just because those.. shares exists ..
| absurd.. when the company pay taxes and you pay taxes on what
| you take and also pay vat and other taxes on what you spend ?
| Very ingenuous article imo taxes should not be avoided and
| should be equal, but should be on money you receive it spend
| not on some assets that grown in value ( btw note that indeed
| something like houses and cars often have some kind of taxes
| already recalculated on current value ) but this is a different
| type of tax based on usage and owning something that require
| maintenance (ie: city, roads,...) But why limit at public
| companies if i have a company which is losing money and have
| 10k shares and i sell one share to you at 1k because you
| believe in it , this same year i should pay money on 10mil$
| because iphotetical value of the company based on recent sale
| was 10mil ? And my net worth is now 10mil?
| fvv wrote:
| I will go further..let me be hypothetical.. in a closed and
| transparent system imho even income should not be taxed..
| only spending.. if i earn 10bil and spend 0 why should I pay
| ? If i donate those 10b to my children and he spend 0 and
| grow it to 100b or leave it in bank.. all spending 0 .. what
| is the difference of taxation here ? We both died homeless
| and hungry... We are doing the equivalent of buyback\ reverse
| printing on dollars...decreasing liquidity ....Until i spend
| what is the problem ?.. btw this is not a closed and
| transparent system so taxing liquid assets is ok.. it's when
| I spend that I'm going to use or abuse the system or the
| ecosystem depending on what I'm buying . So let me pay 9000%
| taxes on a dodo steak and 1% on tofu burger this way with
| ethic taxing policies i would be also incentivated to spend
| better and improve the world ..
| whiddershins wrote:
| Every time someone tries to make a tax targeting the ultra rich,
| it ends up hurting the moderately wealthy instead.
|
| Every. Single. Time.
|
| The worse tax situation is always the person who makes 500k in a
| good year, or sells a house they held for 25 years which went up
| a bunch in value.
|
| I suspect this is a significant factor in social mobility. Our
| tax system is punitive to people who try to leave the working
| class.
| dangus wrote:
| You're not actually talking about the "moderately wealthy."
| Just because billionaires are insanely wealthy doesn't change
| the fact that a household making $500,000 is _still incredibly
| wealthy._
|
| There's already an exemption for capital gains tax on the sale
| of primary homes. $500,000 for married couples, and you can
| remove the cost basis and cost of improvements from the
| equation.
|
| In other words, almost nobody is taxed on the sale of their
| primary home.
|
| A household that makes $500k on a good year is actually in the
| 1% statistically. They have left the working class long ago.
| They could work for about 7-10 years in their career and retire
| with an above-median salary (withdrawing following the 4% rule)
| in perpetuity. That is by definition not the working class:
| that family barely has to work in order to secure a lifetime of
| comfortable living if they don't inflate their lifestyle.
|
| In my view, your comment acts as an implication of support for
| regressive tax policy that hurts the _actual_ working class.
| No, moderately wealthy people _do not need help_. No, we are
| not temporarily embarrassed millionaires held back from
| generational wealthy only by government tax policy - that's a
| farce sold to us by the very billionaires that want to avoid
| being taxed. They want us to think that taxes hurt us more than
| they hurt them, which is mathematically not true.
|
| They want us to think that "if only our taxes were cut, we
| could go back to affording a middle class lifestyle." It's not
| true.
| dhd415 wrote:
| >>A household that makes $500k on a good year is actually in
| the 1% statistically. They have left the working class long
| ago. They could work for about 7-10 years in their career and
| retire with an above-median salary (withdrawing following the
| 4% rule) in perpetuity. That is by definition not the working
| class: that family barely has to work in order to secure a
| lifetime of comfortable living.<<
|
| The "in a good year" qualifier in both your comment and the
| parent comment means that your conclusion that this person
| has left the "working class" is untrue. It's not uncommon to
| get a windfall (stock option vesting cliff, inheritance,
| capital gains, etc.) that boosts income in a single year to
| many multiples of one's typical income. Such an occurrence
| does not boost the recipient out of the working class.
| Managed carefully, it can change their life (buy a house,
| turbo-charge retirement savings, etc.) but no one's buying a
| private island with a single year of $500k income.
| heavyset_go wrote:
| > _It 's not uncommon to get a windfall (stock option
| vesting cliff, inheritance, capital gains, etc.) that
| boosts income in a single year to many multiples of one's
| typical income_
|
| Estate taxes don't kick in for estates worth less than
| $11.58 million and most states make immediate family exempt
| from all inheritance taxes.
| dangus wrote:
| Of course it does. The working class doesn't get stock
| options, vesting cliffs, inheritance, or capital gains!
|
| Or much of a savings account or 401k, for that matter.
|
| The _option_ to stop working for more than a few weeks or
| months takes you squarely out of the working class.
|
| Basically, what I'm trying to say is that the parent
| comment to ours is attempting to advocate for taxing just
| the billionaires and not to tax the moderately wealthy so
| much. I think that's a flawed argument, because the
| moderately wealthy don't need help, and are perhaps even
| more wealthy than they realize.
| WalterBright wrote:
| > The working class doesn't get stock options, vesting
| cliffs, inheritance, or capital gains!
|
| robinhood.com would beg to differ. Anyone can invest in
| the stock market and get capital gains.
| HWR_14 wrote:
| Not at the 500k level most of them aren't getting capital
| gains. Or is this "anyone can be a multimillionaire -
| just play the lottery and get lucky" level of technically
| true?
| WalterBright wrote:
| They're getting capital gains any time they sell a stock
| for more than they paid.
|
| There's no magic threshhold of $500k.
| HWR_14 wrote:
| >There's no magic threshhold of $500k.
|
| In the US in 2021 (aka, right now) the magic threshold
| for capital gains is $445,850-$501,600 depending on
| filing status. So you're technically correct that $500k
| isn't a magic threshold, but it's certainly in the middle
| of it.
|
| But more importantly, you're going down a technical
| rabbithole. The point of this comment chain is "what
| happens to people experiencing a one-time windfall
| capital gains of $500,000". The response was "what about
| RH investors". My point was they weren't making 500k, so
| it was irrelevant that they made income taxed as a
| capital gain. And I stand by that.
| chrisseaton wrote:
| Plenty of normal working class people get options if they
| work at a tech company.
| frockington1 wrote:
| When I worked at Home depot as a lot boy I got stock
| options
| camgunz wrote:
| I think you're extending "working class" to mean "people
| who live on wages instead of capital". But most people make
| an additional distinction inside wage earners between
| workers and professionals, i.e. mechanics, factory workers,
| nurses, assistants vs. doctors, lawyers, software
| engineers, managers, etc.
|
| It's helpful in this little side discussion because
| policies that might affect people with (as GP says) any
| ability to make six figures in a year are pretty different
| than those that affect people without. The "works for a
| living" distinction isn't super relevant.
| nemothekid wrote:
| > _I think you 're extending "working class" to mean
| "people who live on wages instead of capital". But most
| people make an additional distinction inside wage earners
| between workers and professionals, i.e. mechanics,
| factory workers, nurses, assistants vs. doctors, lawyers,
| software engineers, managers, etc._
|
| This is a meaningless distinction because there was a
| time where mechanics and factory workers also made 6
| figure salaries. The divide should always be between
| someone who makes most of their money from labor rather
| than capital. Actors and basketball players are not
| people that I think should necessarily be more impacted
| by a wealth tax.
| bittercynic wrote:
| I don't want to diminish the importance of the
| distinction between income coming from wages vs capital,
| but I think there is also an important divide between
| people who are able to get ahead/accumulate wealth, and
| those who have to work as hard as they can just to scrape
| by.
| microdrum wrote:
| I agree.
|
| As someone from a poor family, never received inheritance of
| any kind, and now (40 years old) makes +/- $1M per year, I
| climbed through every 'tax bracket'. The income tax system is
| absolutely designed to make it very hard to move through
| working class into middle class, and then from middle class to
| upper middle class.
|
| Once you have escape velocity, you've got room to move with
| debt facilities and other options. Everyone wants to give you
| free, high quality banking services. It gets easier. But moving
| from, say $70K to $500K is very very hard specifically because
| of taxes.
|
| For a very long time, the cumulative sum of taxes I'd paid were
| more than the money I actually had in my account, to invest and
| pay for things.
|
| Ted Cruz was right, taxes should fit on a postcard for
| everyone.
|
| And no, unrealized investments shouldn't be taxed and no one
| except do-nothing journalists are surprised to learn that they
| aren't - this ProPublica article is really the definition of
| fake news.
|
| Actually let me just say what it is: propaganda leaked in order
| to build support for the president's tax increases, which are a
| very bad idea.
| cycomanic wrote:
| That you consider yourself upper middle class with an income
| of 1M a year already says a lot about how skewed your view is
| (not surprising there was some article on HN recently about
| research showing that the rich and the poor consider
| themselves middle class both). Sure you are not a billionaire
| but you are not middle class anymore, you earn 30 times the
| median income in the US. Now comparing yourself with the
| superrich might make you think you're not that rich, but you
| are.
| rllearneratwork wrote:
| have you heard about different cost of living in different
| places? What if the person plans to fund himself/herself in
| the retirement and pay for kids college rather than
| expecting all that "for free" from the government?
| ryandrake wrote:
| There is no metro region on Earth where $1M/year can be
| considered middle class.
| askafriend wrote:
| I'd say in SF, you need 500k to be reasonably
| middle/upper-middle class if you have kids (let's say 2).
| omgwtfbbq wrote:
| Eat the rich bitch.
| mrtnmcc wrote:
| Wait, I thought the first 250-500K home sale profit was not
| capital gain taxed in the US?
|
| https://www.investopedia.com/ask/answers/06/capitalgainhomes...
| cletus wrote:
| > The worse tax situation is always the person who makes 500k
| in a good year
|
| What's the problem here? Income tax rates are moderately
| progressive. They'll pay a higher marginal tax rate and a
| moderately higher total tax rate in this year. That seems fine
| to me.
|
| > or sells a house they held for 25 years which went up a bunch
| in value
|
| This is what I have a problem with. This house has already had
| plenty of favourable tax treatment, which could include:
|
| - Tax-deductible mortgage interest
|
| - Gains on that property deferred for up to 25 years. To give
| you a comparison, zero coupon bonds don't get this favourable
| tax treatment;
|
| - Possibly capped or even frozen property tax increases;
|
| - Long-term capital gains are generally significantly lower
| than income taxes
|
| Just how much tax subsidies does real estate need?
|
| > I suspect this is a significant factor in social mobility.
|
| Let me give you an example where this is definitely true. In
| Australia, pretty much every state charges stamp duty on the
| sale when you purchase property. It's typically in the 2-5%
| range. There are various exemptions and allowances for first
| home owners and the like (this varies from state to state).
|
| This was all meant to go away 25 years ago when the Federal
| government replaced a bunch of taxes with a consumption tax (ie
| the GST) but it didn't happen, largely because the states were
| addicted to the income, which became hugely significant as
| property prices skyrocketed in the early 2000s.
|
| The median price of a house in Sydney is now over A$1m. How do
| we expect anyone to have any kind of mobility when simply
| moving may result in a $50-100k+ tax?
|
| Now the US has some of this. For example, to buy my one bedroom
| apartment in NYC I had to pay a "mansion tax" (that's literally
| what it's called) but at least it was only 1%.
|
| My point is it could be much, much worse.
| xienze wrote:
| > Gains on that property deferred for up to 25 years.
|
| Well yeah, before that point it hasn't been sold, so paying
| taxes on unrealized gains on what the house "should" be worth
| is bullshit.
| cletus wrote:
| I agree, but my point is that this is a favourable tax
| treatment (which it is) because it doesn't have to be that
| way.
| xienze wrote:
| How is not charging someone tax on unrealized gains some
| special, favorable agreement? It's common sense for
| physical assets.
| swiley wrote:
| Something people forget is the high amount of churn among
| millionaires in the US. It's the billionaires you're trying
| to go after, 500k should be ignored.
| varelse wrote:
| $500K? Hell, ignore net worths below $50M and pile drive
| into everything above that. But you will then find out just
| how many sub millionaires erroneously believe they are
| temporarily embarrassed billionaires who will fight any
| attempt to raise taxes on our domestic overlords just in
| case. Which is the way they want it...
| willseth wrote:
| > sub millionaires erroneously believe they are
| temporarily embarrassed billionaires
|
| This is fucking spot on.
| nostrademons wrote:
| The issue, if I'm understanding the OP right, is that income
| taxes are moderately progressive _until you get to the levels
| where people make their living off wealth, not income_.
| Someone earning a wage is going to pay a monotonically
| increasing percentage of their income as they move up the
| scale. That 's fine. Someone who owns a holding company that
| itself owns 80% interests in a variety of LLCs that reinvest
| their profits to increase their paper valuation, and then
| takes out loans against the value of their holdings to pay
| for living expenses - could quite easily end up paying _zero_
| tax. Warren Buffett once posted that he pays half the tax
| rate that his secretary does (17% vs. 34% [1]), and Buffett
| doesn 't even partake of some of the tax avoidance strategies
| (like taking out loans against his holdings instead of
| selling them outright) that many other wealthy do.
|
| [1] https://www.forbes.com/sites/paulroderickgregory/2012/01/
| 25/...)
| whakim wrote:
| This is correct. Piketty's research has shown that as one
| moves to progressively higher echelons of the wealth
| distribution (top 5%, top 0.1%, top 0.01%), a higher and
| higher proportion of capital is accumulated through returns
| on capital rather than income. That being said, we
| shouldn't discount that while taxes on income are more
| progressive than taxes on wealth, they're still
| significantly less progressive than those of most other
| Western countries (and we have significantly higher levels
| of income inequality compared to those countries.)
| cletus wrote:
| Here's another way to put it.
|
| Up to a certain level you are taxed on what you EARN.
| Income tax is relatively progressive.
|
| Beyond a certain point you cease to be taxed on what you
| earn. Instead you are taxed on what you SPEND. By this I
| mean, you have unrealized or non-repatriated money and you
| only realize those gains and pay taxes on what you need to
| cover your expenditure.
|
| So if you gain $100m in a year but only spend $10m then
| you're only taxed on $10m and the other $90m probably grows
| tax free until you really need it. This might mean then
| that you're effectively paying a 4% total tax rate (40% of
| 10% of your income).
|
| But it gets worse. Because of zero interest rates, there's
| no point in paying tax on that 10% either. Instead you
| borrow $10m at 1.5% interest secured by your unrealized
| gains. If your unrealized gains grow at more than your
| interest rate you're coming out ahead. The worst case is
| you're deferring your taxes for years. The best case is
| you're effectively deferring them forever, or at least
| until interest rates increase to the point where realizing
| the gains is cheaper than borrowing.
| varelse wrote:
| Nothing like a barrier to entry to the top 1% to keep out the
| rabble! But yes, you've discovered the crab pot cheat code that
| will continue to keep things exactly where they've been and
| they will remain. Go ahead and propose a 1% tax on wealth
| beyond $50M. Even make sales to pay that tax 100% tax-
| deductible. It won't happen. Or how about a 50% inheritance tax
| on wealth beyond $100M? You're not getting that either when
| there's a sweet middle to upper middle class pile of Quatloos
| to mine and they don't have enough money to hire the right
| people to make that problem go away _.
|
| _ But I'm starting to think they need their own PAC and they
| could afford that.
| option wrote:
| that's the point - ultra rich main concern is not a number in
| the bank, but that they remain "on top", so of course they
| lobby for more taxes which would make it harder for others to
| approach them in the amount of wealth
| onlyrealcuzzo wrote:
| A house someone held for 25 years, fundamentally, doesn't seem
| any different than stocks someone held for 25 years. I'm not
| sure why we're obsessed with the idea that non-homeowners
| should subsidize homeowner's housing.
|
| If we really claim to live in a progressive society, shouldn't
| renters be getting the subsidy? I mean, sure, a small
| percentage of the population does have public housing. But that
| hardly compares to the amount of people saving $10k per year on
| taxes with the mortgage interest deduction on ~$1M homes in
| HCOL areas, and then another 15-20% on $250k ($37.5k-$50k) when
| they sell it.
|
| This is more than the average household makes per year after
| taxes...
|
| The long-term average for appreciation on housing is 2.75%. In
| the last 20 years, it's been well above that. But even still,
| the average home-owner with a $1M house is saving $20k+ in
| taxes per year.
|
| I mean - I get it. The average person buying a million dollar
| home these days probably has a marginal tax rate of >40%, and
| houses are wicked expensive. It's nice to save some taxes. But
| is this really the group that should be getting the savings?
| And isn't it possible all this is just manipulating the housing
| market further?
|
| I'm not sure about everyone else, but I'd rather my home be a
| place where I live than a meme-stock I speculate on.
| willseth wrote:
| Housing benefits need adjustment so a larger share goes
| toward people who need it more, but overall home ownership
| encourages people to raise families and build communities,
| which acts as a compounding benefit to society. i.e.
| subsidizing renters will have a positive short term benefit,
| but long term it benefits landlords.
| pydry wrote:
| One of the lobby tactics the ultra rich use is to try and push
| a tax hike/new tax to hit as many people as possible to stall
| its implementation.
|
| Then they also go on an all out propaganda offensive to act
| like it'll hit even more than that.
| Spooky23 wrote:
| My giving a shit about household capital gains went away when a
| partisan congress decided to buy redneck votes with punitive
| SALT rollback.
| fennecfoxen wrote:
| SALT deductions are a massive tax break for the wealthy. Your
| own partisanship that would see them restored is just as
| powerful, and the tax policy you advocate here is more
| regressive.
| triceratops wrote:
| > SALT deductions are a massive tax break for the wealthy.
|
| How?
|
| The point of being able to deduct state and local taxes
| from federal ones is to devolve power to as local a level
| of government as possible. You've already paid the local
| authorities some taxes, so now you owe the federal
| government less.
|
| SALT limits do the opposite of that.
| fennecfoxen wrote:
| SALT is a tax break for the rich because state and local
| taxes are progressive, the rich pay more per dollar
| earned, and the rich are much less likely to be taking
| the standard deduction.
|
| And when a state like New York or California decides to
| raises income taxes, it should not be understood that
| they are strengthening their participation in any power
| devolution scheme. It could work that way, but it
| doesn't. The Feds do not generally delegate their
| services like that.
| triceratops wrote:
| > the rich are much less likely to be taking the standard
| deduction.
|
| Not sure what that has to do with SALT deductions. My
| understanding is they were on top of the standard
| deduction, not as an additional line on itemized
| deductions.
| Spooky23 wrote:
| When I bought my home in 2008, I made $80k, and mortgage
| + taxes allowed me to itemize my charitable and some work
| expenses. It was not a ton of money, but helped with the
| community work that I do.
|
| I wasn't exactly living in the gutter, but would say I
| was "rich".
| fallingknife wrote:
| Why should 2 people with the same income, who get the same
| services for the federal government pay different federal tax
| rates? That's what SALT does, and it should have been
| eliminated entirely.
| vkou wrote:
| 2 people with the same income get different benefits, if
| one lives in a red state, and the other in a blue state.
| The red state is a net recipient of federal funding, the
| blue state is a net provider. Most red state economies
| would implode without this fire-hose of free money. Texas
| or Florida might be okay, the rest, not so much.
|
| The same thing plays out on the state level. Eastern
| Washington loves to complain about taxes, and I would love
| nothing more than to let it have its wish... As long as
| Western Washington can stop subsidizing it.
| Spooky23 wrote:
| I live in New York, which has a net outflow of Federal
| revenues that makes life in many states possible. Most of
| the states impacted have outflows like that.
|
| So frankly, I think it's fair for some Midwest farmer with
| land left barely fertile due to mono cropping to pay the
| full shot of capital gains on his farm, after all, the farm
| would be worthless without federal price supports,
| irrigation, levee systems, and direct payments for the
| corn. Likewise, the Floridian using the homestead laws to
| launder money in property should be paying the full shot on
| the Miami condo.
|
| When demographics starts shifting the congress in a few
| years, I'm sure similar scorched earth policy will happen,
| which sucks, becuase it will utterly destroy whatever rural
| economy exists in these states.
| fennecfoxen wrote:
| > Every time someone tries to make a tax targeting the ultra
| rich, it ends up hurting the moderately wealthy instead.
|
| Governments around the tax the middle class, because that's
| where the money is. Our current spending campaign _will_ result
| in substantial tax increases for the middle class; the only
| real questions are when, and how much (less if it 's sooner,
| more if it's later).
| karmajunkie wrote:
| > because that's where the money is.
|
| Except that its not. Did you actually read the article?
| heavyset_go wrote:
| > _Every time someone tries to make a tax targeting the ultra
| rich, it ends up hurting the moderately wealthy instead.Every.
| Single. Time._
|
| Get back to me when there is a good faith effort to raise the
| capital gains tax and/or institute a wealth tax instead of
| pretending that that "ultra rich" people derive their wealth
| from employment income.
| jl2718 wrote:
| And it will never change!
|
| Taking things requires force. Force only works against the
| powerless. That's tautological.
|
| And also tautologically, if you're benefitting from the use of
| force, it's because you are powerful, and you are exploiting
| the powerless. I don't care how poor or oppressed you think you
| are.
| bidirectional wrote:
| How does this effect social mobility? I agree the tax system is
| unfair towards those in the 1% but not 0.001%, but I don't see
| how it is so punitive that those earning 500k or owning
| appreciating assets are taxed back down to a lower social
| class. And no one reaches those upper echelons by saving their
| 500k/year or holding their house for a really long time.
| lacksconfidence wrote:
| The general idea is average people don't make 500k/yr. What
| they might do though is have a one time event that earns them
| 500k in a single year, like selling a small business or a
| house. In that one year where they finally did well the tax
| system comes in and hits them even harder with laws intended
| for someone who makes 500k every year.
| paganel wrote:
| Working-class people don't own small businesses worth
| hundreds of thousands of dollars, if you're in that
| position you're already middle-class.
| [deleted]
| ineptech wrote:
| I don't think you're describing an obstacle to change, you're
| describing the mechanism of change avoidance. Compare: "Gosh,
| every time we try to tax the wolves, it ends up hurting the
| sheep as well. Why can't our 100% wolf, 0% sheep Congress get
| this right? I guess it's just a hard problem!"
|
| The solution is not to give up, the solution is to _actually_
| tax the rich more. Also, your examples are awful: paying taxes
| on the sale of your house is extremely rare, and the reason
| your hypothetical person who makes $500k in a good year pays
| such a high tax burden is because we tax income more heavily
| than capital gains, i.e. the exact opposite of a "tax
| targeting the ultra rich".
| stmfreak wrote:
| No. The solution is for government to spend LESS. There is no
| amount of tax that can out earn Congress' appetite for pork,
| kickbacks, and voter bribery through wealth transfer.
|
| The only reason we are told to see the illiquid wealth of
| billionaires as a problem is the lie that Congress can spend
| that money better.
|
| They cannot.
| TimPC wrote:
| The problem isn't that it hurts the sheep as well, it's that
| it hurts the sheep almost entirely. Raising capital gains
| would be a decent idea that forces the rich to pay more.
| Basically zero support for it. Closing loopholes helps too,
| not what we're seeing in tax policy discussions which focus
| on rates instead.
|
| Raising the top rate on income when most of the ultra-rich's
| money comes from investment isn't making sense. There is also
| little interest in creating ultra-high tax brackets. I agree
| in principle with someone earning $5 million/year paying a
| higher percentage than someone earning $1 million/year. Many
| countries the top rate starts at $120,000ish in local
| currency.
|
| Taxes on the sale of a primary home is not as rare as you
| think. It may be a twice in a lifetime event for many people
| but if it costs you a fortune each time people are
| discouraged from buying starter homes and then upgrading as
| their family grows. Make this too expensive and people even
| choose to have fewer children rather than get a bigger house.
| People may also choose to avoid the real estate market early
| to wait for a realistic home and risk getting priced out
| entirely. Admittedly, capital gains taxes are less punitive
| than land transfer taxes in this regard but it's still a
| factor. A capped to $500K of capital gains on a primary
| residence of tax avoidance is useful for middle and upper
| middle class Americans. It's not a measure designed
| predominantly for the rich unless your definition of rich is
| so broad that it includes any property owner. We've seen what
| happens when you create markets where people can't move and
| it looks a lot like San Francisco. That's not something I'd
| want policies to try and replicate.
| weaksauce wrote:
| I think the only thing that would solve almost all the
| issues is taxing the movement of money in all forms at a
| small rate. there have been some thoughts on it by people
| smarter than I but the gist is you tax money every time it
| moves at a tiny percentage rate. the rate is so small that
| for the commoners are not affected much but the people that
| trade money or move money off shore or buy up large
| commodities would be the ones that pay the most. I'm sure
| there are some downsides to it but there are many upsides
| too.
| teachingassist wrote:
| I would say in general that you want to motivate money to
| move as much as possible - and the problem with excessive
| wealth is that the money is not moving.
|
| In an ideal world, I would tax money only when it is
| static.
| cpwright wrote:
| The problem with selling your home isn't the income tax on
| the gains. That would be new money you have. The problem is
| that the closing costs are very high and that you have to
| pay yearly property taxes on it whether or not you are
| selling it.
|
| In NYS, you would lose 2% for selling a home in transfer
| tax (of the value not the gain); and then if you are
| financing another home 1.25% of the mortgage value. So
| right there you've lit 3% of the two transactions on fire.
| That doesn't even count the non-government fees like
| commissions, attorneys (for you and the bank), title
| insurance, etc. that eat quickly eat up many thousands of
| dollars.
| TimPC wrote:
| Income tax on the gains tends to be bigger than these if
| you hold on to a property a while in a hot market. 20% of
| 400,000 is much bigger than 2% of 1,000,000 if you buy at
| 600,000 and sell at a million for example.
| ineptech wrote:
| > Raising capital gains would be a decent idea that forces
| the rich to pay more. Basically zero support for it.
|
| Zero support among whom, the wolves or the sheep? Taxing
| the rich more is generally popular[0] and this would
| accomplish that; it would seem like that's support.
|
| > Taxes on the sale of a primary home is not as rare as you
| think.
|
| I would need to see a source on this; I can't imagine a
| scenario in which any middle-class person pays any tax on
| their home at all, unless they live in an extreme-outlier
| of a neighborhood or find gold in their backyard.
|
| 0: https://money.com/wealth-tax-rich-tax-
| rates-2020-presidentia... for example
| zepto wrote:
| > Taxing the rich more is generally popular[0] and this
| would accomplish that; it would seem like that's support.
|
| This is a circular argument. Taxing the rich is popular,
| but the argument is that it would hurt everyone else.
| Hurting everyone else is not popular.
| rascul wrote:
| > I would need to see a source on this; I can't imagine a
| scenario in which any middle-class person pays any tax on
| their home at all, unless they live in an extreme-outlier
| of a neighborhood or find gold in their backyard.
|
| Could you elaborate on why they wouldn't pay tax on their
| home?
| ineptech wrote:
| Because there's a tax shelter for that case - see
| https://en.wikipedia.org/wiki/Taxpayer_Relief_Act_of_1997
| rascul wrote:
| Are you referring to this?
|
| > The act permanently exempted from taxation the capital
| gains on the sale of a personal residence of up to
| $500,000 for married couples filing jointly and $250,000
| for singles. This exemption applies to residences the
| taxpayer(s) lived in for at least two years over the last
| five. Taxpayers can only claim the exemption once every
| two years.
|
| As I interpret the text, the middle-class homeowner will
| have to live in a home for two out of five years before
| they can claim an exemption. This matches the experience
| of my father, who sold his home after about four years
| and had to pay federal tax on the profit.
|
| Is there something I'm missing or interpreting
| incorrectly?
| skybrian wrote:
| Arguably capital gains should be paid earlier so it's a
| sunk cost. Being able to put it off is market-distorting.
| It's hard to come up with a fair way to do it though.
|
| Maybe a requirement to save money in advance based on
| market price, like payroll deductions? Then once you
| actually sell, you might even get a bit of a refund,
| encouraging turnover. But that would affect people with
| cash-flow problems the most.
|
| And the biggest problem is that many people don't _want_ to
| sell and will resent any attempt to encourage it. Because
| encouraging turnover is equivalent to penalizing people who
| stay.
|
| There is no "natural" way to do this, anything can be
| considered a market distortion depending on your point of
| view.
|
| For large residential buildings in California, I've heard
| that apartment owners will essentially swap buildings for
| some kind of tax advantage. (I forgot what it was, though.)
| TimPC wrote:
| I think being able to put off capital gains on assets
| like homes and start-up stock is necessary for the tax
| system to not do awful things like force people to sell a
| home because it becomes too valuable or bankrupt someone
| who has stock options in a company that reaches a high
| valuation but has untraceable stock.
| skybrian wrote:
| We consider these awful because of tradition.
|
| The land tax advocates would say that people who own
| valuable real estate _should_ sell, they are hoarding
| valuable property.
|
| My scheme (which I'm not too serious about) would not
| force bankruptcy in the stock options scenario because
| you could give up some stock options to get your money
| back. Or possibly get a very low interest loan since it
| would be fully collateralized by the forced savings.
| yourapostasy wrote:
| _> For large residential buildings in California, I've
| heard that apartment owners will essentially swap
| buildings for some kind of tax advantage._
|
| You might be thinking of the federal-level 1031 exchange
| [1]. California's particularly distortive Prop. 13-based
| market has led to a separate Prop. 60 tax base exchange
| mechanism that might also fit what you saw [2].
|
| [1] https://www.investopedia.com/financial-
| edge/0110/10-things-t...
|
| [2] https://www.bosinvest.com/blog/tax-planning/dreaming-
| of-down...
| teachingassist wrote:
| > Basically zero support for it.
|
| Wealth taxes are _extremely_ well-supported, despite the
| media as an industry [and politicians] being owned by
| people strongly motivated to campaign against it all costs,
| e.g.:
|
| https://www.reuters.com/article/us-usa-election-
| inequality-p...
| paul_f wrote:
| The "idea" of wealth tax is liked, the reality is that is
| has never been implemented successfully. Everywhere it
| has been tried, it has been rolled back.
| ping_pong wrote:
| Wealth taxes don't work. It was tried in Europe in many
| countries and they ended up rolling them back.
| whakim wrote:
| It's true that a number of European countries that
| previously had wealth taxes no longer do. However,
| European countries only collect taxes on residents. If
| you wanted to avoid wealth taxes you could simply move to
| another country (and the bar to doing so is very low in
| the EU...), whereas the IRS collects taxes on US citizens
| regardless of where they live. So the situations are not
| totally analogous and it's not clear that a wealth tax in
| the United States would also fail.
| teachingassist wrote:
| First, this is not true. I live in a country in Europe
| and I paid a wealth tax today, in fact.
|
| Second, please re-read my comment above as to why you
| might have understood that.
| ping_pong wrote:
| Nothing you said contradicts what I said.
| bernawil wrote:
| That's interesting, can you expand?
| Super_Jambo wrote:
| America which claims global tax jurisdiction may have
| slightly different results.
| neolog wrote:
| https://en.wikipedia.org/wiki/Wealth_tax#Past_repeals
|
| There are two studies cited. One on the repeals is by
| "Institut de l'Entreprise" which seems to be a wealthy
| people's think tank [1] and the other is about why the
| wealth tax wasn't introduced in the UK [2]. I'm not
| convinced by the evidence here.
|
| [1]
| https://fr.wikipedia.org/wiki/Institut_de_l%27Entreprise
|
| [2] http://eprints.lse.ac.uk/42582/1/Why_was_a_wealth_tax
| _for_th...
| snovv_crash wrote:
| And yet that haven for the rich, Switzerland, has a
| wealth tax. Explain please?
| ojbyrne wrote:
| If a person makes $500k in a good year, they will get hit
| with higher taxes, but they're probably going to invest a lot
| in order to hedge against not so good years. Taxing their
| capital gains is a double whammy.
| willseth wrote:
| If the tax is on the gains it's still a single whammy.
| Alupis wrote:
| Just imagine Income Tax + Sales Tax... get taxed on what
| you earn, then taxed again when you go to spend it!
|
| This is a clever way to reduce purchasing power without
| making it seem as bad, ie. nobody really considers the tax
| on a new car purchase until they're signing the final
| paperwork... or even on a new T-Shirt. Depending where yo
| live, this sales tax is non-trivial too, sometimes up to
| 10%+.
| lotsofpulp wrote:
| Sales tax is the most visible tax. Maybe the richest of
| rich people do not consider it, but I have a hard time
| believing "nobody" considers it.
| Alupis wrote:
| Do you add up in your head how much that fast food meal
| will actually cost before you order it? How about when
| you try on new shoes? Probably not...
| lotsofpulp wrote:
| Yes, it is trivial to add 10% (or 30% for waited
| restaurants) to a number. Even if people did not for
| small purchases, with so many people living paycheck to
| paycheck, surely they notice an extra $50 to $150 for a
| TV or $3,000 for a car.
|
| One of Amazon and other online only retailers' biggest
| advantages until 2018 was that it did not have to charge
| sales tax to people in states without a physical Amazon
| presence. That meant you saved 7% or more buying from
| Amazon instead of locally. Basically everyone I know used
| to buy online to skirt sales tax.
|
| https://en.wikipedia.org/wiki/South_Dakota_v._Wayfair,_In
| c.
|
| It was a very big deal and politicians had been
| complaining about waning sales tax revenues.
| Wowfunhappy wrote:
| > Every time someone tries to make a tax targeting the ultra
| rich, it ends up hurting the moderately wealthy instead. Every.
| Single. Time.
|
| Could you please share some of the situations you're thinking
| about here? I'm not familiar.
| Mc_Big_G wrote:
| GFY
| u801e wrote:
| > Your dollars saved are worth much less than they were a
| few years ago and now your taxes are high
|
| Which makes me wonder why the general consensus about
| deflation is that it's not a good thing.
| [deleted]
| dang wrote:
| Please don't delete-edit your posts like that. It's not
| fair to the users who replied.
|
| And needless to say, attacking other users like that will
| get your account banned here. We've had to warn you
| multiple times in the past about breaking the HN
| guidelines. I don't want to ban you, so if you'd please
| review https://news.ycombinator.com/newsguidelines.html and
| fix this, we'd be grateful.
| iso1631 wrote:
| > Most of your gains are going to go to taxes, so you wait
| to sell or only sell a little
|
| So basically you're hoping for someone to get elected who
| will give you a ton of money (via a tax cut for the
| wealthy)
| dang wrote:
| " _Please respond to the strongest plausible
| interpretation of what someone says, not a weaker one
| that 's easier to criticize. Assume good faith._"
|
| " _Have curious conversation; don 't cross-examine._"
|
| https://news.ycombinator.com/newsguidelines.html
| realce wrote:
| If you have just enough assets to be "rich" but don't have
| enough to purchase tax assistance, you've become unprotected
| prey. Everyone that can afford this tax assistance has a
| lower cost of business than you, everyone poorer has a lower
| tax burden.
| ta1234567890 wrote:
| Very interesting concept. This happens with lawsuits. If
| you have enough money/assets to be an attractive target for
| a lawsuit, but you don't have enough to pay to defend the
| lawsuit, you are also "unprotected prey".
|
| An example: in SF/LA (California), a decent civil litigator
| will cost about $400+/hr. And a lawsuit will run for 1-3
| years. When you add all the legal costs up, it turns out
| that just to defend yourself, you'll need to spend about
| $100-$200k. So, unless you have quite a bit of money,
| you'll have to either default or settle in maybe not very
| favorable terms. Either way, you might end up bankrupt, in
| debt for a long time, or just with no savings at all.
| Wowfunhappy wrote:
| I'd love to see some data on how big a deal this really is,
| because I would normally assume that by the time you've
| reached the levels of wealth we're talking about, "tax
| assistance" is a trivial expense.
| kbelder wrote:
| I think at this level, tax protection isn't 'hiring a
| decent accountant' or 'donate $10,000 to charity', but
| instead is 'moving your base of operations off-shore' and
| things like that. Things you can do with a ten-million
| dollar income, but not a half-million.
| ta1234567890 wrote:
| Yes. And the reason for that is the cost of lawyers to
| setup and run the structure. Lawyers could actually
| charge less and open access to more people, but then it
| wouldn't be as exclusive.
| munificent wrote:
| Every single time someone tries to make a tax targeting the
| ultra rich, someone writes a comment just like this. Every.
| Single. Time.
|
| As far as I can tell, this comment is semantically identical
| to:
|
| "Every time someone tries a new cancer therapy, it ends up not
| helping the worst cancers."
|
| "The sting operation was a failure because it only caught low-
| and mid-level criminals."
|
| "We shouldn't use automated tests because some bugs cannot be
| caught by it."
|
| "Look, this bully is ten times stronger than my kid. He's gonna
| beat him up whether my kid wants him too or not. We should just
| accept that the kid is gonna get pummelled."
|
| There are at least four flaws I can see:
|
| 1. The obvious "perfect is the enemy of the good" argument.
| Unless you have an alternative proposed tax that is flawless,
| then the comment does not get closer to a world where people
| pay a share of taxes commensurate with their point on the
| wealth continuum.
|
| 2. By framing it as "hurting" the moderately wealthy, it
| applies a narrative that taxes exist to punish, that the
| extremely wealthy deserve that morally, and that the moderately
| wealthy do not. Every piece of that narrative is wrong. Taxes
| exist to fund services, not enforce moral orders. It's not like
| we have a higher tax rate for convicted criminals. The
| moderately wealthy also have a capacity to afford taxes higher
| taxes without lowering their quality of life, so a tax law that
| hits them too has not "failed". Even if taxes _were_
| punishment, this comment presents no actual evidence that the
| moderately wealthy are morally purer than the ultra-wealthy.
|
| 3. Some fraction of today's moderately wealthy are tomorrow's
| obscenely wealthy, so applying some tax pressure on them today
| is a step towards preventing them from escaping that tax burden
| tomorrow.
|
| 4. Equating people who make 500k in a year with "the working
| class" is... I don't even know what to say about it.
|
| 5. Forcing the ultra-rich to do extra work to dodge this new
| law is a net good. Defeatism, which seems to be the counter-
| proposal here, makes it _even easier_ for them to retain and
| acquire wealth. We should keep passing laws. Every time they
| find a loophole, close it. Vote out politicians that get
| bought. Make them keep jumping. Wear the fuckers out because
| eventually some will lose _if you keep trying_. If you let them
| win... well you let them win.
| silexia wrote:
| Very good point! I thought the same thing about the original
| comment, but you actually analyze the entire thing improved
| why it is incorrect. Thank you!
| paul_f wrote:
| Maybe you should focus on how you would avail the failures of
| past attempts:
|
| https://www.npr.org/sections/money/2019/02/26/698057356/if-a.
| ..
|
| >In 1990, twelve countries in Europe had a wealth tax. Today,
| there are only three
|
| >France's wealth tax contributed to the exodus of an
| estimated 42,000 millionaires between 2000 and 2012, among
| other problems. Only last year, French president Emmanuel
| Macron killed it.
| ipython wrote:
| I agree with your general point, but your specific example of
| selling highly appreciated real estate is a poor one, since you
| incur no tax when selling your primary residence (up to
| something like $500k gain - over your cost basis which includes
| any capital improvement you made to the property) as long as
| you lived there for two of the last five years.
|
| It's a huge tax advantage for homeowners. One could argue that
| it is in itself unfair as it advantages people who already have
| large assets over those who do not.
| jtdev wrote:
| It also encourages liquidity in the residential real estate
| market... which seems to be a net good thing.
| HPsquared wrote:
| When a person moves house, the proceeds from the sale of the
| old house are used to buy the new house. If someone has lived
| in an area for a long time, wants to move across the street
| to an otherwise identical house with the same value, why
| should they be taxed for that move but not for simply living
| in the first house?
| edmundsauto wrote:
| This is exactly what happens. If you buy house #2 within 90
| days, you can do a 1031 (I think?) property exchange. Then
| you don't pay taxes on the first sale.
| ejstronge wrote:
| This is generally only true for investors, not for people
| who buy real estate for the sole purpose of obtaining
| lodging
| w4 wrote:
| 1031 exchanges are not available to homeowners, they are
| exclusively available for investment properties.
| Homeowners receive a $250k/$500k tax shelter as discussed
| above.
| TheOtherHobbes wrote:
| And this is why property prices are insane.
|
| Investments of all kind receive generous tax breaks even
| when they're simple rent seeking.
|
| So you get the triple whammy of unaffordable prices with
| unaffordable rents with downward pressure on wages -
| because the rent-seeking behaviour of share holders is
| privileged over the value of the work that underpins it.
|
| It's not just a recipe for economic disaster for most of
| the population, it's also a recipe for political
| instability. In a democracy everyone should feel like the
| system is working in their interests.
|
| When essentials become unaffordable and pricing becomes
| punitive and extortionate, people get angry and start to
| act in insane ways.
| sp_nster wrote:
| The $250/$500k is a one-time benefit and you will
| absolutely take advantage of it when you sell your home.
|
| The idea of taxing this "profit" for the home owner would
| be insane. The investment and re-investment in real-
| estate drives a big majority of the economy.
|
| I'm for modifying 1031 for investors who rent their
| properties. \
| thrwn_frthr_awy wrote:
| For a 1031 exchange you can only exchange an investment
| property for another investment property. You cannot use
| it for your primary residence. You have 45 days after
| close of escrow on your sale to identify up to three
| properties to purchase. You then have 180 days from close
| of first property to close one of the three listed.
| flabbergasted wrote:
| This tax deferment only applies to investment property.
| As I understand it, if you're living there, then 1031 is
| not an option for you.
| nostrademons wrote:
| > (up to something like $500k gain - over your cost basis
| which includes any capital improvement you made to the
| property)
|
| In a lot of markets this absolutely hits the "moderately
| wealthy trying to leave the working class". Bay Area houses
| that went for $1.2M in 2009 now go for about $3M, for a gain
| of $1.8M. That's well over the $500K exclusion, even
| including capital improvements.
|
| Few folks will shed a tear for people who own a $3M house
| simply by virtue of living in a hot area, but that's exactly
| who the OP is talking about.
| omgwtfbbq wrote:
| >Few folks will shed a tear for people who own a $3M house
| simply by virtue of living in a hot area, but that's
| exactly who the OP is talking about.
|
| You lose a lot of money to taxes when you win the lottery,
| should we modify the tax code for those people too?
| ineptech wrote:
| "Well, this tax might still hit someone at the upper-upper-
| end of the middle class if they live in the fastest-
| appreciating real estate market in history" seems
| equivalent to admitting that it does not hit the middle
| class generally.
| whakim wrote:
| In the US, simply owning a house that's worth $3M (and
| literally zero other assets of any kind) puts you in the
| top 1.5% of the wealth distribution, per the WID. So I'm
| not sure how you could classify this scenario as
| "moderately wealthy trying to leave the working class."
| More like "extremely wealthy people trying to become even
| more wealthy."
| motohagiography wrote:
| The people who live in hot real estate areas for years
| _made_ them the hot real estate areas. Real estate
| appreciation isn 't free money. It's people who risked
| moving into an area and brought their culture with them.
| This is what creates the value.
|
| Just because middle class people benefit from the subsidy
| of low interest rates that create asset bubbles does not
| mean that the people who raised families in a neighbourhood
| or a city are somehow undeserving of the rewards on their
| equity.
|
| The idea that money not taken in taxes is an "expenditure,"
| or an advantage, and this idea of accounting for the
| hypothetical opportunity cost of not taking some peoples
| money as a tax privilege is bizzare.
| RC_ITR wrote:
| >brought their culture with them.
|
| Yikes. Do you really think places like SOMA, SLU, DTLA,
| etc. got better because rich people brought their
| 'culture' there? I'd recommend you visit said places and
| see for yourself, most of the 'culture' is in adjacent
| (usually historically minority) neighborhoods.
| vineyardmike wrote:
| > in adjacent (usually historically minority)
| neighborhoods.
|
| These are the people that brought their culture. Their
| housing is probably also well appreciated.
| RC_ITR wrote:
| It's amazing how often people on HN think that working
| class minorities have equal access to owning their own
| homes, despite huge evidence to the contrary.
|
| https://usafacts.org/articles/homeownership-rates-by-
| race/
| frockington1 wrote:
| In those places there is a huge value difference between
| the adjacent neighborhoods and the rich neighborhoods.
| This is primarily due to a culture of stability and
| safety
| RC_ITR wrote:
| What are you trying to say? That DTLA is safer/cheaper
| than Little Tokyo (you're wrong)? That SOMA is safer than
| the Mission(you're wrong)? That SLU is safer than Capitol
| Hill(you're wrong)?
| motohagiography wrote:
| Specifically, I said that rich(er) people go to those
| places because the people who were there before them made
| those places appealing. Poor(er) people who made due and
| built a community with businesses and neighboors that
| attracted others. As for why people who say 'yikes' seem
| to scare so easily, the concern is noted and ignored.
| tomerico wrote:
| Another point is that $500k is not in the 1% everywhere. In the
| Bay Area, it wouldn't even put you at the top 5%.
|
| https://www.nytimes.com/interactive/2019/08/01/upshot/are-yo...
| Wowfunhappy wrote:
| But the Bay Area's high prices are driven by scarcity +
| demand, not intrinsic cost. So if everyone had a higher tax
| burden, I'd expect costs to come down.
| bananabreakfast wrote:
| That's absurd. If everyone had a higher tax burden social
| mobility would be completely destroyed.
|
| Californians will never vote away prop 13 so property taxes
| will never go up, even in this imaginary increased tax
| burden scenario. With incomes taxed higher, prices would
| not come down at all.
|
| No one would want to sell their houses, as they could never
| afford a new one after taxes. Prices would continue to be
| propped up by real estate investment wealth that is largely
| unaffected by this increased tax burden. No one could
| afford to buy a first home as their income is taxed to a
| degree that saving up for a 20% down payment would require
| being in the 1% of CA income or saving up frugally for >10
| years.
| metalforever wrote:
| I bought in SF recently with a 5% down payment without
| waiving most of the contingencies.
| MR4D wrote:
| Unless a huge earthquake hits it, the Bay area will always
| be worth more than central Kansas.
|
| At a minimum, there is one simple reason for this - the
| amount of infrastructure investment over the years (power,
| sewer, roads, etc), of which there is basically none in
| central Kansas, but loads of in the bay area.
| dantheman wrote:
| It has nothing do with physical infrastructure and
| everything to do with social infrastructure - the people
| and organizations that are located there.
|
| And the weather.
| MR4D wrote:
| The value of the land at Burning Man is much lower than
| the Bay Area, even though it has many of the same people.
|
| I think the infrastructure is pretty important.
| Disregarding it entirely seems a bit much. Even a bad
| neighborhood in Philly has more value per square foot
| than farmland in Kansas.
| akiselev wrote:
| _> The value of the land at Burning Man is much lower
| than the Bay Area, even though it has many of the same
| people._
|
| You're proving GP's point. People from the Bay Area go to
| a desolate desert in the dead of summer _because of_ the
| social aspects of Burning Man - the land is worthless
| because its a desert, owned by the Federal government,
| and they only stay a week out of the year. They bring the
| infrastructure with them, from stadium audio equipment to
| porta-poties to wireless equipment.
| hellbannedguy wrote:
| Plus beaches, mountains, culture. (I do like Kansas
| people better than my neighbors though?)
| tomcam wrote:
| Or Kansans, as we call them in the business
| panarky wrote:
| What is the "intrinsic cost" of 1200 square meters of the
| Earth's surface?
| [deleted]
| hellbannedguy wrote:
| You are right, but if they crafted the right bill, I think we
| could tax the ultra rich, without affecting the asset rich
| widow, or the moderately wealthy.
|
| Give everyone one big tax day on a house. The family that
| bought a ranch style house years ago is allowed 1 huge tax
| holiday. That married $500k deduction is a joke, and needs to
| be increased.
|
| So, the widow living in the ranch style house should be exempt
| from taxes, say up to 3M, if she decides to move. With that
| money, she could move anywhere, and not worry about property
| taxes too? I know you guys don't like prop 13. (Only about 4-5
| counties in CA that will accept a recriprovial property tax
| transfer. Keep that in mind if older, and looking to move.)
|
| Let's face it, most Americans will only see one big pay day
| over an asset, and it's usually the family home.
|
| My point is only allow the tax holiday 1 time, and it would be
| for individuals whom make less than $500k/yr. Don't allow the
| tax dodge to go on forever, and abused by every ultra rich guy
| forever.
|
| Let Elisabeth Warren right the bill, and I would bet the lucky
| middle class 1 home asset person would not be affected by a
| wealth tax? Warren is wealthy. She is not ultrarich. She knows
| the difference.
| lumost wrote:
| That's the ultimate appeal of a wealth tax. Taxing a hundred
| millionaire, or billionaire, or even a 10 billionaire a
| progressive 4% annual tax won't affect someone making good
| money off of income in nearly every scenario.
| silexia wrote:
| I agree! All taxes should be wealth taxes. Or to be more
| clear - the only tax we have should be one wealth tax that is
| a single percentage and affects everyone at all levels
| equally. Maybe 3% per year or something.
| mlac wrote:
| I would really just like a flat tax. No loopholes or deductions.
| Very simple. It should not take a masters degree to understand
| the tax code.
|
| I recognize this is one of the main ways Policy is implemented
| (incentives can drive certain behavior), but we've got hundreds
| of years of complexity going on and I wouldn't mind simplifying
| this.
|
| I don't know where to start though.
| alok-g wrote:
| I would like to have discussions even for "constant" tax.
|
| Wrote more in the comments below:
|
| https://news.ycombinator.com/item?id=27434369
|
| https://news.ycombinator.com/item?id=27434819
| LatteLazy wrote:
| A flat tax removes the simliest fairest part of the tax code
| and leaves all the bullshit and loopholes behind. Don't make
| the mistake of thinking you're (and my) experience of the tax
| code is anything like the actual code. We only see 0.001%. It's
| easy to consider only the things we see after all.
| an_opabinia wrote:
| Economically, you sort of live in a flat tax. (https://www.nyti
| mes.com/interactive/2019/10/06/opinion/incom...)
|
| I know that's not what you mean. But if you simply filed a
| 1040EZ, then paid a 20% penalty when the IRS sends you a letter
| saying pay the rest of what you owe, expect to pay... 28
| percentage points effective instead of 26.
|
| This is to say that tax complexity is a red herring. You can
| already live in an almost zero-complexity tax obligation
| personally, as a wage earner, above and beyond what is
| officially prescribed. It's not really what it's about. It's
| probably not about saving money either.
| hellisothers wrote:
| Looks like the 1040-EZ is no longer used, could you elaborate
| on this "hack" you're suggesting is a flat tax solution?
| Ericson2314 wrote:
| That misses the point. The problem isn't income. The problem is
| there is no "simple" way to assess wealth.
|
| Actually, simplest thing to do mathematically is to skip the
| dollar-denominated accounting entirely, and just pay the
| government in kind i.e. asset forfeiture / putting the means of
| production in partial state control.
|
| e.g. the gov owns stock in a company based on the distribution
| of private ownership (is it equal like ESOP or unequal like
| Facebook and Google?), and without regard to the market price
| of the stock.
|
| I challenge the mathematically literate in America to really
| think through this.
| user3939382 wrote:
| Unfortunately Intuit (Turbotax) and the CPA trade groups lobby
| against any tax simplification whenever it comes up. Regulatory
| capture of our political process has corrupted it at every
| turn.
| dvh wrote:
| How about removing income tax (hard to measure, easy to avoid
| by rich) and increasing vat by the same amount. Vat could be
| even added to stocks (buying $5000 of Tesla stocks? Pay 20%
| vat. This could probably end all short term speculations as
| well). Definitely to yacht and houses, vacations, butlers and
| gardeners, gold doorknobs, Ferraris, swimming pools, 200" LCDs,
| hotel stays, massages, anything that is consumption really)
| breakfastduck wrote:
| Because this would absolutely shaft everyone other than the
| well off?
|
| Because there would be no way at all of scaling the tax based
| on income / wealth? So someone earning almost nothing with no
| wealth would be expected to pay the same tax as a
| billionaire?
| BarkMore wrote:
| See the Fair Tax proposal for one way to address this
| problem. https://en.wikipedia.org/wiki/FairTax
| ianbicking wrote:
| A large UBI would address this OK, but FairTax seems to
| really work to keep the tax as regressive as possible
| without being quite so bad as a flat VAT. A "welfare
| payment" for "low-income earners" means you have to be in
| the system ("earner"), that income still has to be
| calculated, and that the payment is stigmatized
| ("welfare") instead of presented as an entitlement.
|
| This also seems bad: "The proposed Fair Tax Act would
| apply a tax, once, at the point of purchase on all new
| goods and services for personal consumption" - "personal
| consumption" is arbitrary. A VAT tax applied everywhere
| for all goods would be fair and harder to avoid. Though
| even that seems like it would encourage financialization
| to hide material production.
| Ericson2314 wrote:
| Yes thanks. That thing sounds like a Trojan horse; VAT
| and UBI is much better.
| madaxe_again wrote:
| I don't know that flat tax is necessary - progressive taxation
| is a sane policy, as the marginal utility of money goes down
| the more of it you have, and therefore a larger tax burden is
| more easily borne - however addressing the gap between how
| asset and employment income are taxed is critical to combatting
| gross wealth asymmetry.
|
| I write this as a member of the asset-owning class. I wasn't
| always - I worked in the U.K., with my income automatically
| taxed via PAYE (Pay As You Earn), and paid between 20 and 45%
| effective tax rates on my earnings.
|
| Now, my income is rentals and investments, and my effective tax
| rate is nearer 5%, on a much larger income than I ever had from
| employment. I've not done anything special or weird, I've just
| paid capital gains and written down the allowable expenses. It
| would not be hard to pay no tax, just by restructuring my
| finances a little, but it doesn't sit well with me as it is.
|
| Honestly, it's nonsensical. At the very least asset income
| should be taxed at the same rates as labour income - but it
| should probably be taxed at a higher rate, as penalising
| productive labour and rewarding rent-seeking is ultimately
| contrary to the interests of everyone.
| short_sells_poo wrote:
| One could always tax land ownership. It cannot be hidden or
| escaped from. It's also the ultimate scarce resource and yet
| there are landlords who do nothing just draw rent from those
| who actually utilize the land.
|
| An addendum re the UK: it's funny how the UK tax scheme is so
| punitive on the middle class. Earn 100k pounds gross and take
| home 50k. But the moment you become an asset owner, you can
| basically optimize all of it away. The two income brackets
| "supported" by the UK tax regime are the poorest and the
| richest.
| lucideer wrote:
| > _I don't know where to start though._
|
| I would start with "cui bono" and look into learning about the
| various institutions in place who's main purpose is to maintain
| the complexity, that would stand to make significant losses (or
| disappear) if it were simplified.
|
| (just in case this sounds like pessimism or apathy, I don't
| necessarily think it is. But if one genuinely wants change, one
| does need to be aware of where hurdles lie)
| ianbicking wrote:
| A flat tax simplifies one little bit of math, and doesn't
| really address loopholes and deductions. If you have an income
| tax you have to calculate "income". If I have a little store
| and buy gum for $1.00 and sell it for $1.10, it will not work
| well if that's counted as $1.10 of income. That $1.00 is a
| deduction. We can't eliminate them. It's a "loophole" when we
| think the deduction is not in the spirit of calculating income,
| but that's not an objective criteria.
|
| A flat tax removes the benefit of shifting income to different
| entities to pursue lower marginal taxes, but I don't think
| that's the kind of abuse we're looking at here, nor is that
| abuse particularly scalable.
| naasking wrote:
| Flat tax is too regressive. What seems justified is a basic
| S-curve indexed by income, and where the left hand side dips
| below zero so those below a certain line effectively get a
| negative income tax to maintain a certain standard of living.
| dataviz1000 wrote:
| Agreed. Flat tax and sales tax are both regressive and both
| hurt the population the economy needs most to spend on
| consumption to be viable with circulation.
| mantas wrote:
| Flat tax + minimum non-taxable incomes is where it's at. Just
| set high enough threshold.
| alok-g wrote:
| Care to explain why? :-)
| pmoriarty wrote:
| Many of the ultra-wealthy have little or no income.
|
| What needs to be taxed is wealth, not income.
| f38zf5vdt wrote:
| A wealth tax will fail for the same reason the income tax
| has failed. The extremely wealthy will move their wealth
| into complex multinational financial vehicles and strut up
| to the tax authority saying, "See? I own very little." It
| becomes the legislative cat and mouse game, which
| governments lose when up against those with massive assets
| with which to lobby.
|
| There is not a good answer that I have found to the
| taxation issue. Wealth is self-sustaining over the short
| term like advantageous mutations are self-sustaining in
| biological systems.
| jlmorton wrote:
| > The extremely wealthy will move their wealth into
| complex multinational financial vehicles
|
| In Elizabeth Warren's proposal, they would be subject to
| a 40% exit tax on the wealth that they moved. If they
| didn't pay the exit tax, that would be fraud.
| frockington1 wrote:
| Who would wait long enough after that bill passed to keep
| their wealth in America? The second it went through
| congress the money would start pouring out
| jlmorton wrote:
| To be clear, in Warren's wealth tax proposal, it doesn't
| matter where the wealth is located. If you're an American
| citizen, you would be required to pay the tax on all of
| your wealth above $50 million, no matter where it is.
|
| The alternative is to move your money overseas and
| renounce your American citizenship, at which point you
| would owe a 40% exit tax.
|
| One could certainly hide their assets overseas, but that
| would be tax fraud, and if discovered would result in
| prison time for both accountant and wealthy individual.
| f38zf5vdt wrote:
| As with most laws, the intention is noble but the outcome
| may not be. Every time a new law seems to be passed
| "strengthening" the tax code, it seems mysteriously
| effective against those who can't afford to pay a law
| firm's retainer and a lobbying group's salaries.
| wsc981 wrote:
| I agree as well. Also, luxury goods (yacht, private
| airplane, (maybe) jewellery, etc...) should be taxed much
| heavier than bare necessities (food, clothing).
|
| I believe some basic amount of wealth should be tax free
| (e.g. x-amount of square meter living space per person in a
| household, a car with value up to 25.000 USD perhaps,
| etc...).
|
| I also believe many ultra-wealthy people setup foundations
| to control their wealth after their deaths, avoid paying
| inheritance tax and keep wealth inside the family by being
| able to decide who is on the board of such foundations.
| Foundations are also used to peddle influence. I believe
| for these reasons that donations to foundations should not
| be tax exempt.
| naasking wrote:
| I don't entirely disagree, but current political and
| economic structures aren't designed well enough for a
| wealth tax.
| silicon2401 wrote:
| I disagree, at least not with so simple an implementation.
| I don't want to live in a world where we're unable to
| escape working by constant taxes. There should be at least
| a minimum threshold where wealth is completely untaxed so
| that people can live freely and not have to work until they
| die. Enough for a house, some property and land, and a
| retirement fund. I'd consider it more justifiable to tax
| someone like Bill Gates with billions of dollars and
| millions of acres of land, but it's just unnecessary for
| taxes to be absolutely inescapable.
| LargeWu wrote:
| Most of the wealth tax proposals I've seen don't even
| kick in until you have tens or hundreds of millions of
| dollars. I don't think anybody needs to be worried about
| those people having to work until they die.
| pmoriarty wrote:
| _" I don't want to live in a world where we're unable to
| escape working by constant taxes."_
|
| I am against a system in which some escape work while
| others do not.
| alok-g wrote:
| So no one ever retires?
| axiosgunnar wrote:
| What incentive would I have in your system to be a frugal
| hard worker that practices delayed gratification instead
| of a dopamine-addicted wasteful lazy consumer?
| gugagore wrote:
| What incentive do I have in not-that-system to be a
| cooperative, generous hard worker that practices
| collectivism instead of a power-addicted exploitative
| ambitious business magnate?
|
| ^- is another awfully slanted question.
| silicon2401 wrote:
| > collectivism
|
| Collectivism is overrated and unnecessary. I'm a
| misanthrope and I don't want to live in a collective
| society, I want to live in a society where I can get away
| from other humans and keep to myself. Taxes and laws are
| enough to keep society civil and functional; going beyond
| that is imposing your own personal beliefs on everyone
| else, like a theocracy or dictatorship.
| gugagore wrote:
| You either missed my point or you are making my point.
|
| It is hard to tell!
| naasking wrote:
| > Collectivism is overrated and unnecessary.
|
| This is a pretty hilarious take IMO. Cooperation is
| literally the only reason humans are the dominant species
| on the planet. But sure, "overrated and unnecessary".
| silicon2401 wrote:
| This comment perfectly encapsulates the
| political/societal leanings I completely disagree with.
| This sentiment of "nobody can have anything nice unless
| there's enough for absolutely everyone to have an equal
| amount."
|
| Life's not fair, and no amount of politics or regulations
| will change that. There will always be some people with
| better health, more attractiveness, more intelligence,
| more charisma, better connections, more drive, better
| self-control, and so on. I have excellent physical and
| mental health despite hardly ever going to a doctor in my
| life; I have good genes and I have a natural interest in
| eating healthy and exercising. Some people are born into
| rich families and will never have to work a day in their
| life if they don't want to. Some people are beautiful and
| go about their life just shy of being worshipped because
| of their looks. That's life.
|
| I have zero problem with a world in which some people
| have a way better life than everyone else. My goal is to
| avoid bringing anybody down while bringing as many people
| as possible up. Let the rich guy be rich, and find a way
| to help the poor guy educate himself and get more
| opportunities. Let the beautiful people be beautiful, and
| help everyone else take care of themselves better and
| learn to make the most of what they have. It's anti-
| freedom and dictatorial to force everybody to wage
| slavery just because some people are born poor or are
| careless about their finances.
| naasking wrote:
| > This comment perfectly encapsulates the
| political/societal leanings I completely disagree with.
| This sentiment of "nobody can have anything nice unless
| there's enough for absolutely everyone to have an equal
| amount."
|
| That's not what the OP said. They said that they're
| against a system that permits some to escape work while
| others never can. In other words, some people can
| comfortably retire when they're old, and some are
| basically forced to work until the day they die, and some
| never have to work at all. That's not at all the same as
| saying that everyone should have equal outcomes at all
| levels of the game, so much as saying that everyone
| should eventually be able to cross the same finish line.
|
| > It's anti-freedom and dictatorial to force everybody to
| wage slavery just because some people are born poor or
| are careless about their finances.
|
| What you're failing to recognize is that wealth
| disparities are _artificially created by government
| policies_. The government isn 't going around dictating
| to people what is or is not beautiful, or dictating what
| you must eat so you will be healthy, or what you must
| wear to be fashionable, but they are dictating what every
| person must pay into the system to keep it running.
|
| It turns out, the people who are benefitting the most
| from the system are _not_ paying into that system. If you
| 're really interested in spreading freedom, then perhaps
| you should be more invested in the 99.9% whose financial
| freedoms are being curtailed in order to prop up that
| remaining 0.01%.
| mstipetic wrote:
| Won't that just increase prices of the things you've
| mentioned?
|
| I feel we should somehow work to become more distributed
| instead of forcing people to come to large cities because
| all the opportunity is there
| Stevvo wrote:
| Not a great reading experience to have to scroll through nearly
| endless fawning of "ooh look at how we are such responsible
| journalists" to get to the actual story.
| [deleted]
| eplanit wrote:
| Large grain of salt required. But, at least they were honest
| enough to state (in the middle of the article), that the
| information on which this is based is suspect:
|
| "We do not know the identity of our source. We did not solicit
| the information they sent us. The source says they were motivated
| by our previous coverage of issues surrounding the IRS and tax
| enforcement, but we do not know for certain that is true. We have
| considered the possibility that information we have received
| could have come from a state actor hostile to American
| interests."
| zepto wrote:
| > we do not know for certain that is true. We have considered
| the possibility that information we have received could have
| come from a state actor hostile to American interests
|
| If they have no way to verify or at least assure themselves
| that it isn't this, then they have no business publishing it.
|
| Also, many of their statements are just lies in that context:
|
| E.g. We are disclosing the tax details of the richest Americans
| ...
|
| Is a lie.
|
| "We are disclosing _what an unknown source who could be a
| hostile foreign agent has told us_ are the tax details of the
| richest Americans."
|
| Is true.
|
| It will be interesting to see whose secrets are included and
| whose are not. For example if they have Bloomberg's details, do
| they have Trumps?
| dougmwne wrote:
| They also state:
|
| "We have gone to considerable lengths to confirm that the
| information sent to us is accurate. We compared the tax data
| in our possession to other sources of the same information
| wherever we could find them, some of which were public (a tax
| return for a candidate for national office), others of which
| were private. In every instance we were able to check --
| involving tax filings by more than 50 separate people -- the
| details provided to ProPublica matched the information from
| other sources."
| zepto wrote:
| Sure, but it's likely that a state actor had this
| information too.
|
| Any credible attempt at deception would use as much
| corroboratable data as possible.
| Wowfunhappy wrote:
| I find it unlikely that even a state actor would have
| access to literally all the same private data that
| ProPublica has acquired over the years, _and_ that they
| 'd know what data ProPublica has and what can be safely
| manipulated.
| zepto wrote:
| This is a straw man. There is no reason they would need
| 'literally all' of Propublica's data. We don't know how
| many data points were verified, but it need not be many.
| dougmwne wrote:
| >In every instance we were able to check -- involving tax
| filings by more than 50 separate people -- the details
| provided to ProPublica matched the information from other
| sources.
|
| So we know it was at least 50 data points and not all of
| them were public. It was likely many hundreds of data
| points since it would be trivial to check more than one
| number if you already had 2 copies of a tax return pulled
| up.
|
| If we take ProPublica's words to be accurate, then how
| would a state actor know exactly which 50 individuals
| ProPublica would have access to given that they would
| have a vast network of contacts and can and did ask the
| individuals involved to review the information they
| received and point out any inaccuracies.
|
| Either these are real tax returns, ProPublica is lying or
| the state actor has a crystal ball.
| zepto wrote:
| > 50 individuals
|
| Still a straw man - how many of these 50 were public?
| It's only the private ones that matter.
|
| > It was likely many hundreds of data points since it
| would be trivial to check more than one number if you
| already had 2 copies of a tax return pulled up.
|
| How is this relevant? Multiple points from public sources
| don't show anything.
|
| The _only_ thing that matters is the number of sources
| who are both independent _and_ private.
|
| All an attacker would need to do is have access to a few
| of these private records and they could make their leak
| look genuine.
| dougmwne wrote:
| Yes, state actors have a lot of resources and
| capabilities, but omniscience is not one of them.
| zepto wrote:
| Why would they need omniscience?
| dougmwne wrote:
| Probability.
|
| Let's say a state actor had access to a whole pile of tax
| returns and wanted to manipulate them to change the
| conclusions ProPublica would draw. The state actor
| changes half the data points. Let's say ProPublica was
| able to check an average of 3 data points on those 50
| individuals they reviewed. The data point could have
| either been manipulates or untouched. I'd model this like
| a coin flip and say that if ProPublica didn't find the
| manipulation after checking 150 data points, it's like
| flipping 150 heads in a row or 2^150 or basically
| impossible.
| zepto wrote:
| This is a straw man.
|
| Firstly we have no idea how many of the 50 individuals
| data were public or not. All public data can be
| discounted since the state actor can just copy it.
|
| Secondly, for the private data, the definition of
| 'private' is unspecified. It really just means not part
| of a published record. If propublica has access to it,
| then why couldn't someone else?
|
| I agree that if there were 150 separate sources with data
| not disclosed anywhere else, it would be impossible to
| guess.
|
| But that's just a made up scenario.
|
| There could be many correct records that are public, and
| one or two that are private but available to (or even
| provided through another channel of) the state actor.
|
| As long as the fake records are not part of the public or
| private data propublica already has, there would be no
| way to verify them.
|
| This of course assumes that propublica's list of records
| itself is kept securely.
| Wowfunhappy wrote:
| I'm assuming good faith on ProPublica's part, that a
| reasonable amount of the data was private and that it was
| truly private. If I didn't trust them I wouldn't read
| their reporting.
| myWindoonn wrote:
| From the article:
|
| > Provenance is not essential; accuracy is. We have gone to
| considerable lengths to confirm that the information sent to
| us is accurate. We compared the tax data in our possession to
| other sources of the same information wherever we could find
| them, some of which were public (a tax return for a candidate
| for national office), others of which were private. In every
| instance we were able to check -- involving tax filings by
| more than 50 separate people -- the details provided to
| ProPublica matched the information from other sources.
|
| They did assure themselves by verifying any detail that they
| could corroborate, it seems.
| itsoktocry wrote:
| > _Large grain of salt required._
|
| What exactly do I need to "take" with a large grain of salt?
| Have you been in seclusion for the past 20 years? I'm pretty
| sure we're at the point where the burden of proof is on the
| billionaires to demonstrate they aren't funnelling away their
| money, not vice versa.
| eplanit wrote:
| Evidence isn't necessary for one who is already convinced.
|
| However, there is a lot that says that the 1% actually pay
| the vast majority of taxes collected:
|
| https://www.publishedreporter.com/2021/04/05/op-ed-
| top-1-inc...
|
| https://howmuch.net/articles/high-income-americans-pay-
| major...
|
| https://taxfoundation.org/top-1-percent-pays-more-taxes-
| bott...
| mtberatwork wrote:
| > Evidence isn't necessary for one who is already
| convinced.
|
| I suppose that cuts both ways then:
| https://theintercept.com/2019/04/13/tax-day-taxes-
| statistics...
| bpt3 wrote:
| > However, there is a lot that says that the 1% actually
| pay the vast majority of taxes collected:
|
| Yes, that's an argument against people who want Europe-
| style social programs while simultaneously making the US
| tax code even more progressive than it already is (it's
| generally considered the the most progressive in the
| world).
|
| It's true that the top 1% to pay most of the taxes, and
| it's also true that the top 0.1% or so pay a significantly
| lower tax rate than those in the income ranges just below
| that level.
| jdlshore wrote:
| The next article in the series states that the mass of
| citizens with equivalent wealth pay about 100x the tax.
|
| The billionaires may pay more tax individually, but they
| don't pay a fair share, if that's true. Given what we know
| about Trump's taxes and what Buffett has been saying, I
| found it entirely believable.
| Analemma_ wrote:
| "The top earners pay the majority of tax already!" is a
| smoke and mirrors argument to try and distract you,
| especially when they've been collecting all the income
| gains. Consider that if there are income gains which go
| exclusively to the wealthy but the tax code stays the same,
| by definition they will end up paying an increasing
| percentage of total tax revenue, even though this situation
| does _not_ mean their taxes need to be decreased -
| precisely the opposite.
| runjake wrote:
| OTOH, ProPublica reached out to Bezos, Musk, etc with this info
| and they essentially had no comment.
| hoppyhoppy2 wrote:
| See also https://news.ycombinator.com/item?id=27432326
| koheripbal wrote:
| This post should be marked as dup
| stakkur wrote:
| But we already know the 'secrets' of the .001%:
|
| 1. Hide income and assets whenever possible.
|
| 2. When #1 is not possible, structure visible income and assets
| to leverage the most advantageous tax rules.
| bwestergard wrote:
| In Finland, everyone's taxable income is a matter of public
| record. One theoretical benefit of such a policy is that it
| eliminates information asymmetries between workers and employers
| in wage bargaining.
| failwhaleshark wrote:
| That makes the lives of gold-diggers easier too.
|
| If it were opt-in that would be fine, otherwise it's an
| invasion of privacy of most people who aren't rich.
|
| It's almost as bad as having medical conditions and STIs test
| results listed publicly.
|
| Facilitating public exposure of counting other people's money
| doesn't help anyone except the rich to know if you can fight
| them in court or how much to bribe them.
|
| Fight wealth inequality with income-&-holdings-proportional
| fines; simple, government-calculated graduated taxes without
| complicated exemptions; elimination of corporate/wealth
| welfare; and expand economic-advancement-oriented welfare to
| those who aren't super-rich who can use it.
| lucideer wrote:
| > _If it were opt-in that would be fine_
|
| If it were opt-in it would be pointless. Surely that's
| obvious?
|
| > _Facilitating public exposure of counting other people 's
| money doesn't help anyone except the rich to know if you can
| fight them in court or how much to bribe them._
|
| This is a fair point, but I think these are relatively small
| individual downsides, which are also much more visible (and
| potentially addressable). Bribery is probably a harder nut to
| crack, but the legal system favouring the rich (& lawyered
| up) is something that one can potentially work toward
| balancing/mitigating with legislative measures.
| xutopia wrote:
| Funny thing my STI results are shared with my sexual partners
| and their partners too. It doesn't bother me one bit.
| sokoloff wrote:
| By you and them? Laudable and sensible.
|
| By the government? What business is it of the government to
| even _know_ who my sexual partner(s) is /are (especially
| for a negative test result)?
| failwhaleshark wrote:
| We already know, and we knew even before you did. Two of
| them were sent to test your disclosure practices, and you
| failed. You're an absolutely terrible person. How dare
| you!? Good day to you, sir/madame. I said "Good day!"
|
| /s
| toomuchtodo wrote:
| Communicable disease prevention. HIV infections are
| typically reported to the government, for example, and
| does not require patient consent (nor does such data
| sharing incur a HIPPA violation).
|
| > All 50 states require both physicians and laboratories
| to report to local or state health departments the names
| of persons newly diagnosed with Centers for Disease
| Control-defined AIDS [1]. However, because AIDS cases
| represent onset of the disease caused by HIV, HIV data is
| necessary to monitor the epidemic.
|
| https://journalofethics.ama-assn.org/article/hiv-and-
| health-...
| gota wrote:
| I disagree almost completely. I understand your concerns -
| but they are based on weighing personal freedom above all
| else, and I just don't. I think there's a tradeoff there and
| it is favorable in favor of disclosing tax information.
|
| To your points:
|
| > gold-diggers
|
| I'm not sure if this is an idiomatic term and out of my
| grasp, but if you mean that people will get romantically
| involved with others because of their money... this is a non-
| issue. Happy to debate it further, but it seems so silly and
| self-apparent that we shouldn't care at all about it
|
| > Invasion of privacy
|
| Arguably, but as long as only a minimum amount of _whats_ is
| public, with only the lump-sums published, I think its fine
| in context.
|
| > It's almost as bad as having medical conditions and STIs
| test results listed publicly.
|
| I think these are very different things, the difference is
| not just of severity. They are different classes of things.
| Financial information relates to money, which only makes
| sense in a society (money is for _trade_ ). A disease's
| effects are personal. When they aren't, you are obligated to
| disclose them and/or to comply to other rules (for example,
| to quarantine).
|
| > Facilitating public exposure of counting other people's
| money doesn't help anyone except the rich to know if you can
| fight them in court or how much to bribe them.
|
| I think the experience where this has been applied is
| precisely the opposite - the rich are the ones affected the
| most. And - if your justice can be bought, the problem has
| less to do with the knowledge that the other can't find back
| and more to do with the legal system in the first place.
|
| > Fight wealth inequality with income-&-holdings-proportional
| fines; simple, government-calculated graduated taxes without
| complicated exemptions; elimination of corporate/wealth
| welfare; and expand economic-advancement-oriented welfare to
| those who aren't super-rich who can use it.
|
| Can't argue with that, even if I wanted to, in fewer than 15
| pages. Complex stuff!
| failwhaleshark wrote:
| > this is a non-issue.
|
| Who are you to have the gall to claim conclusive knowledge
| of an unknowable without a shred of evidence? How do you
| think gold-diggers and con-artists work, hang-around at
| airports, golf-courses, and investment brokerages waiting
| for rappers with the most gold chains?
|
| > I think its fine in context.
|
| That's your opinion that you're deciding for other people.
| It's the only number that matters and yet you're stilling
| trying hard to trivialize it.
|
| > And - if your justice can be bought,
|
| Nope, you automatically lept entirely in the wrong
| direction: it's not the justice who can be bought that is
| the problem, but the rich knowing how to calculate exactly
| how to exploit and buy-off the poor. Think _Indecent
| Proposal_ or Bhopal rather than some Western movie about a
| crooked town sheriff.
| gota wrote:
| I think you're being downvoted our of tone, rather than
| content. So let me respond in reverse order, as the first
| point seems to be the most emotional for you
|
| >Nope, you automatically lept entirely in the wrong
| direction: it's not the justice who can be bought that is
| the problem, but the rich knowing how to calculate
| exactly how to exploit and buy-off the poor. Think
| Indecent Proposal or Bhopal rather than some Western
| movie about a crooked town sheriff.
|
| I absolutely think that the core issue is that the legal
| system can 'be bought', i.e., it can bankrupt people even
| if they are right. Reforming that shouldn't be completely
| impossible and would by definition solve the niche
| problem you are describing. Btw, as a rule _any_
| corporation can sue _any_ non-famously rich person and be
| sure that they threat of litigation costs will weight in
| their favor. Disclosed tax info worsens nothing from the
| current status quo.
|
| > That's your opinion that you're deciding for other
| people.
|
| It is opinion, yes. But all laws are someone's opinion
| 'deciding for other people'. And I mean absolutely all
| laws, even the most basic ones like the right to live or
| to have private property. It's all social constructs, and
| we decide which ones stand
|
| > Who are you to have the gall to claim conclusive
| knowledge of an unknowable without a shred of evidence?
| How do you think gold-diggers and con-artists work, hang-
| around at airports, golf-courses, and investment
| brokerages waiting for rappers with the most gold chains?
|
| I must say I'm surprised this issue seems important to
| you (and again - completely irrelevant to me). I
| absolutely don't care about something that I've only ever
| heard about in soap operas and have never, ever, heard of
| an example that bothered me in real life. I'm curious
| what makes this a relevant issue in your view, but I
| understand if its personal and you don't want to explain.
| But if you _don 't_ have any personal biases, let me
| argue that the problem of gold diggers is primarily a
| problem for the gold-dug (?). If a rich person doesn't
| want to marry/have a relationship with a person that only
| likes them for their money... then don't. I don't care,
| and I think nobody should
| a1369209993 wrote:
| > If a rich person doesn't want to marry/have a
| relationship with a person that only likes them for their
| money... then don't.
|
| I think the claim is that you _don 't know_ whether a
| person is only interested in you for your money, and that
| this colors every social interaction you have, romantic
| or otherwise, with a undertone of worrying that any
| generosity you display is being exploited by someone who
| will abandon you the moment the money runs out. Cf fair-
| weather friends, miserliness, etc.
| Frondo wrote:
| > That's your opinion that you're deciding for other
| people
|
| Others have spoken to your other points, but as for this,
| _yeah, exactly_.
|
| We're talking about how we'd organize society (or some
| aspect of it), the basis of which involves making
| decisions for other people, in the sense of developing
| rules that hopefully people will abide by as participants
| in the society even if they disagree.
| jessaustin wrote:
| _Who are you to have the gall..._
|
| Whoa, relax. ISTM GP is probably a typical human. "Gold-
| diggers" are not and have never been a major threat to
| reasonably well-adjusted people. For weirdos who
| temporarily possess more money than they deserve, perhaps
| "gold-diggers" are a spice of life. Fools and wealth are
| soon parted, but that's true no matter what gets
| published.
| syshum wrote:
| >>but they are based on weighing personal freedom above all
| else
|
| and this is largely the primary difference between American
| Culture /Politics and the rest of the world, specifically
| European nations
|
| European nations have always been more collectivist in
| nature, where the US was founded on Individualism, and
| Individual Freedom.
|
| There are signs that the US is losing this desire, and it
| saddens me because unlike you I do value personal freedom
| above all else, and I think the world needs a nation that
| continues to put personal freedom above everything else.
| kwhitefoot wrote:
| > think the world needs a nation that continues to put
| personal freedom above everything else.
|
| And you think that the US does that?
|
| Exercising personal freedom necessitates having the
| material and mental resources to buy stuff, to be able to
| move from place to place, to change jobs, etc. It seems
| to me that a plausible proxy measure for personal freedom
| is social mobility, the likelihood that you will be
| better off than your parents. As far as I remember the
| country with highest social mobility is Denmark.
| syshum wrote:
| The US has pretty good Social Mobility as well, it is
| complete myth that the "rich" in the US is stagnate, most
| of the Billionaires in the US are 1st Generation
| Billionaires, this highlights there are income and social
| mobility.
|
| As a personal anecdote, I am many times better of income
| and wealth wise than my parents even though we have the
| same education level and seemingly the same income
| opportunities, yet I have made better choices with my
| finances (learning from their [bad] example). My sibling
| is the same. One of my parents has zero retirement
| savings and will live off SocSec (likely with the
| assistance of me and my sibling). My other parent has
| slightly more savings but not by much and has lots of
| debt, both are within 5 years of SocSec retirement Age
| gota wrote:
| > As a personal anecdote, I am many times better of
| income and wealth wise than my parents even though we
| have the same education level and seemingly the same
| income opportunities
|
| Slightly off topic - I'd wager the overwhelming majority
| of the HN posters are signficantly better-off than their
| parents, solely by virtue of being tech-workers. We tend
| to forget, but at no point in capitalism's history has
| such a numerous caste of white-collar knowledge workers
| been so well compensated as we are now
|
| In your case it may well be mostly because of better
| financial decisions (especially if you are orders of
| magnitude better off, which is hard to do without
| consistent investment in any case), but for most of us
| this is also true just by 'placement luck'
| mola wrote:
| Perhaps they are losing this desire because it doesn't
| provide the well being it promises? Because personal
| freedom has become a meme abused by ultra rich to disable
| any effort to fix systemic problems in the US?
| syshum wrote:
| Except that is not true at all by any objective measure.
| [1]
|
| The Ultra Rich do not use Personal freedom to disable
| efforts, it uses Government Regulation to disable
| efforts, the Rich LOVE big government why do you think
| many billionaires vote Democrat, it enables them to
| control the economy to ensure the poor are kept poor and
| dependent on government. In the end we should look to
| Smash the State, Eat the Rich, and expand personal
| freedom [2]
|
| [1]https://www.youtube.com/watch?v=4J5s6aZCPSg
|
| [2]https://c4ss.org/content/30085
| dantheman wrote:
| The problems in the US are primarily due government
| regulations breaking markets in things like education,
| medicine, and housing.
| GordonS wrote:
| I wholeheartedly agree, and I'd be in favour of such a system
| here in the UK.
|
| That said, I'm not sure it would work in the US, where
| individualism has been taken to such extreme lengths - I could
| imagine it being used as bragging rights, rather than a source
| of moral embarrassment as it would be in Europe and
| Scandinavia.
| HatchedLake721 wrote:
| Moral embarrassment of what?
| mlac wrote:
| I would also think that this makes neighborhoods less
| financially diverse. I can't see someone with a higher than
| average income moving into a neighborhood knowing that their
| neighbors might make 1/4th as much. It puts a target on them.
| bennysomething wrote:
| I think "Diverse" is beginning to be the most over used and
| applied word of all time.
| mlac wrote:
| Financial Different-ness? Financial Disparity? I just
| needed a word to talk about things that were not uniform or
| the same.
|
| Also not saying that diversity in this case is a good thing
| or a bad thing - just that it exists and it may have
| interesting consequences or change with this policy. I
| would think making salaries public might limit
| gentrification. But it might also cause flight and impact
| the tax base. I do not think neighborhoods need to be
| uniformly financially diverse...
| lmilcin wrote:
| You obviously haven't been to Finland.
|
| In Scandinavia, the approach to other person earning couple
| of times more than you could be summarized by "good for you".
| mlac wrote:
| That's good it works that way in Finland, but my point was
| focused on the United States. I don't think making
| everyones' income public would suddenly make those in the
| US think like those in Finland. I also think the social
| services in Finland raise the bar for everyone - everyone
| has more basic services than in the United States, so it
| starts off more equal.
|
| This happens with any disparity - education, income,
| wealth. Differences in these cause some people to act
| differently. I've met many people who think earning
| $100,000 a year qualifies you as "rich", and there are a
| lot of people who think they won't have anything in common
| with someone who is educated beyond undergrad.
|
| I imagine it would suddenly be a metric on Zillow and
| Realtor - "average neighborhood income". People would self-
| select based on that, making neighborhoods less financially
| diverse. No one would want to be seen as the broke person
| in the neighborhood, and no one would want to way over-buy
| the neighborhood. Maybe you would, but people would "know"
| whether you could afford to live there or whether you were
| taking a house from someone else when you could afford to
| live in a nicer place. Either way, it would not be
| comfortable, not to mention if you lived somewhere for a
| while and your career took off - you'd then maybe out earn
| the neighborhood and be forced to move, rather than be able
| to remain and blend in.
|
| On my earlier comment, I guess 1/4 wasn't the right ratio.
| My point was more that someone making 200k may not move
| into a neighborhood where the average income is 50k, when
| they otherwise would have, because they would be viewed
| very differently among neighbors and it would be hard to
| blend in. This would lessen tax revenue for low-income
| areas as people would be less willing to move in.
|
| In general, talking about salary in the States is taboo,
| but not among hourly workers. If you hear a conversation
| about work between hourly workers, it generally comes out
| pretty quickly what they are making. I read an article
| stating it happens for price discovery - they mention it
| regularly so they can charge the right rates and work at
| the highest paying location.
| anovikov wrote:
| But earning couple of times less lol? ) I don't think
| anyone at all wants live in a place where most people earn
| a lot less than themselves.
| mantas wrote:
| Nah. A lot of people care about trashiness and culture
| much more. And boy that does not correlate with bank
| account.
| jessaustin wrote:
| It seems really weird not to have neighbors with
| different incomes. There would have to be really over-
| the-top HOAs and zoning to arrange such a situation.
| gmadsen wrote:
| maybe in extremes. like 100:1, but 2:1, 3:1 doesn't seem
| that bad... honestly better for social cohesion
| ghaff wrote:
| I can pretty much guarantee that in the semi-rural town
| where I live, there are households that are probably down
| around median US income (~$50K) and households making
| hundreds of thousands of dollars or more.
| Loughla wrote:
| In my rural area, I was one of the rich people in our
| area (combined dual income from my spouse and I of around
| 80-90k/year). People used to give me shit for being
| Richie Rich (all in good fun). The income level around
| here hovers around 100-150% of the standard federal
| poverty level. Generally, most people are lower income,
| with some people making 100k plus. But, everyone sort of
| lives the same life; we hang out in the same places, our
| kids go to the same schools, that sort of thing.
|
| Then real wealth started moving in to buy property as
| investments. Now we have people who have gates and armed
| guards. They have private police to scare the locals.
| They harass school board members for access to school
| vouchers for the private schools they are starting so
| their kids don't have to attend the public schools.
|
| It's different around here now. It's a lot less
| 'community' and all it took was about a half dozen really
| wealthy folks to upset the apple cart.
|
| Nobody jokes about money anymore in any context, and
| people seem to be a lot less happy than they used to be
| just in general.
| michaelt wrote:
| Eh, I imagine this matters a lot more at the lower income
| levels, due to marginal utility.
|
| If you're living in a trailer park because that's all you
| can afford, if you treble your income there's a good
| chance you'd move out right away.
|
| On the other hand, if you own two $150,000 Lamborghinis
| and a guy moves in next door with only a single $100,000
| Ferrari, are you going to be moving out because the
| neighbourhood is going down hill? Probably not.
| rongenre wrote:
| Anybody who buys in an "affordable" neighborhood - at least
| in CA - is making a lot more than their neighbors who've
| lived there for decades. If you're polite, you don't flaunt
| it.
| Hammershaft wrote:
| I am in favor of such a system.
| stjohnswarts wrote:
| I'm not, it's dumb and makes classism which is already a
| problem in the USA an even bigger problem.
| ksec wrote:
| >eliminates information asymmetries between workers and
| employers in wage bargaining.
|
| WOW! Never heard of this as an argument. I think it is a very
| good one for working class.
| LatteLazy wrote:
| (not OP)
|
| There is good evidence that when wages are public knowledge
| minorities and women get paid more too...
|
| https://time.com/5353848/salary-pay-transparency-work/
| LargoLasskhyfv wrote:
| Maybe. But imagine
|
| > _enables transparency_ between workers and employers in
| wage bargaining.
| anovikov wrote:
| You mean that workers know incomes of other workers in the same
| company and role and thus there is no way to negotiate wages
| with people individually basically linking them to their
| negotiation skills?
| jeffreyrogers wrote:
| Interesting. It seems to work for Finland. In some countries it
| would probably make you a kidnapping target.
| Cthulhu_ wrote:
| You become a kidnapping target by being rich, whether that's
| a matter of public record or just someone cruising the
| wealthier neighbourhoods is arbitrary.
|
| I mean over here you can't look up who makes how much, but
| the rough value of houses and neighbourhoods, which is used
| to determine property taxes, is public record.
|
| I'm sure there's some rich people / families living in
| otherwise underwhelming houses, but they're generally a
| minority.
| btilly wrote:
| Per _The Millionaire Next Door_ (see
| https://www.amazon.com/Millionaire-Next-Door-Surprising-
| Amer... for the link), most wealthy are those who have a
| reasonable income but good financial discipline.
|
| Which means that a shocking number of millionaires live in
| poor neighborhoods and have modest lifestyles.
|
| Those aren't the super-wealthy, of course. But most wealthy
| people can't be identified by where they live.
| zhdc1 wrote:
| > Those aren't the super-wealthy, of course. But most
| wealthy people can't be identified by where they live.
|
| This is particularly true for intergenerational wealth. I
| grew up in a area with fair number of affluent
| households. You couldn't realize it until you became
| familiar the community.
| Retric wrote:
| The millionaire next door uses an artificially low
| threshold for wealth. It's not a book about the wealthy,
| it's largely a book about retirement. 1M is only
| generating ~40k per year, if that's your savings you
| can't afford to live in an affluent area without a job.
| btilly wrote:
| That book was originally written decades ago. Its
| threshold corresponds to about $1.7 million in savings in
| today's world. Their median was $1.6 million, or about
| $2.7 million in today's dollars.
|
| And given that the people who attained that status on
| average lived in cheap neighborhoods, the fact that their
| income wouldn't stretch long in an affluent neighborhood
| isn't really a concern for them.
| Retric wrote:
| Even adjusting for inflation from 1996 half the
| population had 1.0 - 1.6 million.
|
| That translates to ~$1.7M - 2.7M, or an income of ~68k to
| 108k which is still not that significant.
| btilly wrote:
| Where do you get half the population from?
|
| According to the statistics that they gave, an estimated
| 3.5 million Americans were that wealthy. In 1996 the US
| population was around 270 million so we're talking about
| the top 1.3% of Americans by net worth.
|
| For more about what this group looked like, read
| https://www.washingtonpost.com/wp-
| srv/style/longterm/books/c....
| Retric wrote:
| That's what a a median of $1.6 million and a minimum of
| 1.0 million means. Half of their population was 1.0 to
| 1.6 Million the other half was over 1.6 million.
| pmoriarty wrote:
| The solution to this is to eliminate wealth disparity.
| tengbretson wrote:
| Why stop at eliminating wealth disparity when you can
| eliminate wealth?
| fennecfoxen wrote:
| This has been demonstrated feasible! We can all be
| similarly poor together.
| syshum wrote:
| Same thing, the only way to eliminating wealth disparity
| is to eliminate wealth.
|
| The Authoritarian Left that goes on and on about
| eliminating wealth disparity has no interest in lifting
| everyone up to be wealthy, not they want to seize the
| wealth and drag anyone down they deem is "too wealthy"
|
| Which is ironically always someone more wealthy than the
| person advocating for wealth redistribution, for example
| Bernie Sanders used to talk about "millionaires and
| billionaires" until he became a millionaire, now like
| magic only billionaires are a problem for him
| mola wrote:
| You know being a millionaire today has a massively
| different meaning than 20 years ago.
| losvedir wrote:
| What? Now you're making me feel old. I remember 20 years
| ago... it didn't seem that different from today. What's
| "massively different" about being a millionaire then? You
| mean, inflation-adjusted, how it's $1.5 million today?
| convolvatron wrote:
| you still get get to retire in comfort, but you don't get
| invited to the really swank parties
|
| seriously - maybe narcissism isn't the best character
| trait to structure your society around?
| carapace wrote:
| Maybe. But how?
|
| I think that, if you could somehow collect all the wealth
| and redistribute it equally, within a few years we would
| see disparity reappear. Some folks are better at
| accumulating wealth than others.
|
| It seems to me that you would have to keep reallocating
| wealth. And many would then ask, what's the motive for
| generating wealth if it's just going to be taken away
| from you?
| WalterBright wrote:
| This has happened before.
|
| After the end of WW2, the Allies decided to repudiate the
| ReichsMark (the German dollar) and issue a new Mark.
| Everyone who held ReichsMarks saw it go to zero. To get
| the economy going again, everyone was issued 50 of the
| new Deutsch Marks.
|
| Within a couple weeks, the people who had been wealthy
| before were rapidly moving ahead, and the ones who had
| not been were again at the bottom.
|
| I.e. the people who knew how to make money still knew how
| to make money, and the people who didn't still didn't.
| kapp_in_life wrote:
| I'm not familiar with this case study but was wouldn't
| that be due to retaining asset ownership? Even if the
| dollar became worthless, presumably I'd still control all
| my assets(the stocks in my brokerage/401k, my car, etc.).
| The companies I have ownership for would still be able to
| generate goods/services for Dollar2.0
|
| People storing money under their mattress presumably were
| in trouble, but doing that already puts you at risk of
| devaluation through inflation. And I'd imagine that most
| wealthy people are wealthy because they do exactly the
| opposite and hold assets instead of currency.
| pmoriarty wrote:
| This is why the system has to be designed to prevent
| concentrations of wealth or power.
| carapace wrote:
| How? (I'm not trolling, I'm sincerely curious. I respect
| and appreciate your viewpoint pmoriarty even though I
| don't always agree with you.)
|
| I feel like it's probably a bad idea to let individuals
| acquire so much wealth and power that they rival some
| nations, yet I haven't been able to frame an ethical way
| to prevent it if the "0.001%" have acquired their wealth
| legitimately, that is, by the rules we all must follow.
| Shacklz wrote:
| > And many would then ask, what's the motive for
| generating wealth if it's just going to be taken away
| from you?
|
| The same motivation that drives some folks to study e.g.
| philosophy, even though it's perfectly well known that
| this will never make you rich: Because they like it.
|
| You don't just e.g. found a company for the sake of money
| - you also do it because it allows you to do things on
| your own terms, it gives you prestige, it gives you the
| satisfaction of being 'successful'. In todays day and
| age, this is usually equivalent with 'generating wealth',
| but I'm a firm believer that this does not necessarily
| have to be the case.
| carapace wrote:
| Folks who want to start and run a business and give away
| their profit can already do so. E.g. Warren Buffet gives
| away half his wealth voluntarily. Or take the case of Dan
| Price https://en.wikipedia.org/wiki/Dan_Price
|
| Is it ethical to force people to give up against their
| will money that they (presumably) earned "fair and
| square"?
|
| Assuming we find that ethical formula (which seems
| dubious to me but let it ride for the sake of discussion)
| the next question is, would the people willing to work
| under that system be "enough"? And then we have to ask
| "enough for what purpose?"
|
| That gets into ethical and speculative issues that cut
| right to the heart of the human condition. Wendell Berry
| asked, "What are people for?" Bucky Fuller calculated
| that we could bring about a secular utopia for ~$25
| billion by sometime in the 1970's if we applied our
| technology efficiently to supplying our physical needs.
| I'm open to the idea that we don't need open-ended profit
| motive to create a good and worthwhile global society (in
| fact even Adam Smith thought the capitalist "greed is
| good" phase would be just that: a temporary phase between
| the old system and the new.)
| WalterBright wrote:
| Economies based on this idea tend to do very poorly.
|
| For one thing, people won't have money to invest in new
| ventures.
| w4 wrote:
| I'm not so sure. Running a business exposes you to
| tremendous personal risk, especially in a litigious
| country like the US. It's also incredibly hard, most
| often fails, and typically confers less prestige than
| other much more reliable and substantially less risky
| high paying career paths (finance, law, medicine,
| consulting, etc).
| Loughla wrote:
| I find it absolutely fascinating that your arguments are
| shot down on this board, because it's business, but that
| is literally what you're told on a constant basis if you
| want to go into the education field in the US.
|
| You don't do it for the paycheck, you do it because you
| like it. Why education, social work, and other human
| services fields, but not business? That is odd to me.
| w4 wrote:
| > _I find it absolutely fascinating that your arguments
| are shot down on this board, because it 's business, but
| that is literally what you're told on a constant basis if
| you want to go into the education field in the US._
|
| It's not actually that fascinating, and has a simple
| explanation: the people saying this about teachers are
| not the same people that are commenting here. It's a non-
| sequitur.
|
| The notion that educators (or anyone else for that
| matter) ought to accept bad pay or working conditions
| because of "passion" is completely objectionable.
| Teachers should be well-compensated for the important and
| difficult work they do.
| ldbooth wrote:
| The tax system is part and parcel with inequality.
| faeyanpiraat wrote:
| We tried that already. It wasn't pretty.
| Tostino wrote:
| When? When did we actually try that?
| jeffreyrogers wrote:
| > I'm sure there's some rich people / families living in
| otherwise underwhelming houses, but they're generally a
| minority.
|
| There are more than you think. Pretty much every city has a
| nice neighborhood where the wealthy residents live. The
| difference between someone worth $10mm vs someone worth
| $100mm is not visible from the street.
| 411111111111111 wrote:
| Does that difference matter when kidnapping? Its not like
| the 100mm person has more money readily available, as
| they'll likely both have the bulk invested/tied up in
| some way.
|
| You can only get their fluid money which is probably
| quite similar in a time sensitive situation like that.
| jeffreyrogers wrote:
| I would assume someone with $100mm in assets has more of
| it in liquid assets than someone with $10mm in assets (a
| large amount of which would be their home).
| madsbuch wrote:
| The kidnapping problem is on a whole other level.
|
| Denmark is known for "leaving babies in strollers outside of
| cafes". The Nordic social-liberal countries (Finland
| included) solve this problem not by opacity but by having
| social support and trust.
| frockington1 wrote:
| Dumb person here. What is "leaving babies in strollers
| outside of cafes"?
| a1369209993 wrote:
| When going into a cafe to order something, they leave
| their child (in a stroller) outside with the (allegedly
| justified) expectation that nothing bad will happen to
| it. (To be fair, babies aren't especially easy to
| liquidate if stolen, and strollers are inconveniently
| bulky, so this arguably says less about the _amount_ of
| crime than about how petty, blatant, and asinine the
| criminals are.)
| boruto wrote:
| > kidnapping target.
|
| Or a target for scamming.
|
| Seems privacy nightmare too. I hope there is an opt out where
| you don't ask and yours is private.
| mistrial9 wrote:
| some countries have a social "fabric" .. the USA is a
| geographic location with English-style law, and a lot of people
| who are very divided and increasingly antagonistic.. Try to
| build the Roman Empire, and you get Roman Empire problems in
| your population..
| bwestergard wrote:
| While the U.S. certainly has regional, class, and other
| subcultures, there is very clearly a national culture and
| "social fabric".
|
| The easiest way to see this, if you grew up in the U.S. and
| have not traveled much, is to read tourist guides for your
| own country.
| marcusverus wrote:
| Is this really the case? Imagine you're at a masquerade
| ball with 25 people from random countries around the
| western world, 5 of whom are Americans from various states.
| Everyone speaks perfect, mechanical, unaccented English,
| and you are not permitted to discuss dead-giveaway topics
| like geography, political parties/candidates, specific
| foods, etc. How confident are you that you could pick out
| the Americans?
| mustafa_pasi wrote:
| IMHO there is a common theme in the philosophy of life of
| most Americans. For example, many people have remarked on
| the high levels of optimism found in most Americans. It
| is one of my favourite American attributes.
| doytch wrote:
| How confident are you that you'd pick out the Spaniard?
| Or Belgian? Or Canadian?
|
| Generally, people overestimate the variation in their own
| compatriots and underestimate that in foreigners.
| anthonygd wrote:
| I have zero confidence I would be able to pick out the
| Spaniard, Belgian, Canadian or American.
|
| I'm having a hard time matching your generalization with
| my experience. When I started travelling I was surprised
| how similar people were regardless of where they were
| from.
|
| Sure you can dig into political views and find themes but
| those aren't consistent or pervasive enough to make
| predictions on an individual basis.
| MR4D wrote:
| > everyone's taxable income is a matter of public record
|
| That's an interesting approach. I have a couple questions out
| of curiosity.
|
| Does that include their "offshore" income? By that, I mean
| income earned outside of the country, not necessarily hidden.
|
| Also, what is income? If there is a billionaire investor and he
| loses $10 million, do you see that as well?
| koala_man wrote:
| Can't answer for Finland, but in Norway:
|
| >Does that include their "offshore" income?
|
| Yes. It counts as taxable income even if you end up paying 0%
| tax on it (such as via foreign tax credit).
|
| >Also, what is income?
|
| Net realized income. You can't tell the difference between
| earning $1M, and earning $10M and losing $9M, and earning
| $10M on paper but only selling $1M.
| taeric wrote:
| So what would the public record for Musk be? The number
| reporting usually quotes? Or a much smaller one? (Still
| large, of course.)
| fastball wrote:
| So lots of people saying the ultra rich are hard to tax because
| they take out loans against assets to fund the day-to-day. This
| then results in an argument about the morality/viability/etc of a
| wealth tax.
|
| But... why can't we just tax the loans?
| marcell wrote:
| If you tax loans that means every credit card purchase or
| mortgage would trigger a tax. If you receive a $400k loan for a
| mortgage, that would mean something like $100k in taxes for an
| upper middle earner.
| notriddle wrote:
| Small business owners take out loans in order to build up their
| company. Making that harder seems like something HN would
| implicitly dislike.
| hawk_ wrote:
| yes that's called interest which the fed is reluctant to raise
| to appease the same lot in the name of improving employment.
| jl2718 wrote:
| Your comment made me realize something.
|
| The government is funded by taxes and bond sales. Bond
| purchases absorb high interest rate demand across the entire
| market. If there weren't any taxes, there would be higher
| interest rates. So taxes are what subsidizes low interest
| rates. We're the ones paying the interest on their loans.
|
| Now it all makes sense. Mind is blown.
| jl2718 wrote:
| Tax is obsolete. You won't fix it with more.
| jedberg wrote:
| The people who will be most upset about this probably aren't the
| wealthy people themselves, but their lawyers and accountants.
|
| I have a lawyer friend who does estates for ultra-wealthy people.
| Each week, her whole firm gets together to review all new laws
| that have been passed that might change estates, and one of them
| does a "book report" on how to take advantage of old laws. They
| consider this their competitive advantage and how they win
| clients over other firms -- by being better at taking advantages
| of loopholes.
|
| I'm sure they'll be looking at this article to both gain ideas
| and check if any of their own clients are there and if any of
| their secrets are revealed.
| 1024core wrote:
| I'm not sure I agree with taxing the "wealth", instead of income.
| Sure, on paper, Buffett's wealth went up by $23B; but these are
| just imaginary numbers based on the whims of the market. The tax
| should be on what amount of money actually flowed into his bank
| account.
| lumost wrote:
| The problem is that there is no way to track what flows into
| his bank account. Evidence says that he can avoid being taxed
| on any dollars flowing to his bank account.
|
| This wasn't a huge problem a century ago due to the Estate tax
| ensuring that estates would shrink over time and eventually be
| taxed. In stark contrast to European laws that _required_
| estates to be maintained in their entirety to preserve the
| aristocracy. If Buffett can avoid tax during life and death and
| pass on a preserved estate then there is no guardrail against a
| gentle class. Fundamentally it also means that we 've setup a
| tax system more akin to a feudal system where workers pay taxes
| and aristocrats receive benefits.
| tannhauser23 wrote:
| What are you talking about? You think Warren Buffet can
| covertly sell his holdings and not have anybody find out? If
| he executes any sales the brokers will have the records; if
| he transfer the funds to any bank in the world, there will be
| plethora of records for regulators to access. There's no way
| he can secretly hide large transfers.
| kwhitefoot wrote:
| Off topic, just for your information: _gentile_ in English is
| not the same word as in, for example, French.
|
| The English word means _not-Jewish_ whereas I think you
| probably meant _gentle_ which has an archaic meaning of
| _noble_. See https://www.lexico.com/definition/gentle
| lumost wrote:
| Great Callout! I've updated the text to reflect the correct
| word.
| whakim wrote:
| The estate tax wasn't even enacted until 1916 so there wasn't
| a period of time where "estates would shrink over time" (for
| tax reasons, at least; the two World Wars plus inflation
| actually existing did lead to huge changes in the wealth
| distribution). And by the early 20th century land was no
| longer the single dominant form of capital in the portfolios
| of the wealthiest individuals.
| jl2718 wrote:
| You can follow this logic all the way down:
|
| - tax on wealth
|
| - tax on growth
|
| - tax on capital gains
|
| - tax on dollar deposits
|
| - tax on spending
|
| - tax on value-added
|
| - tax on labor
|
| Oh wait, that doesn't work at all.
|
| - no tax
|
| Which is the correct answer that ends up in everybody paying
| for the economy in proportion to their benefit from it. We're
| already operating like this:
| https://www.sifma.org/resources/research/us-treasury-securit...
| ggggtez wrote:
| But what do you think about him borrowing money using his
| "worthless" stock as collateral?
|
| Clearly the increase in stock price is valuable to banks. So
| why not the IRS?
| mathattack wrote:
| Over the long term it makes sense. Over the short term it's
| more difficult if the assets aren't liquid.
| bko wrote:
| > Many will ask about the ethics of publishing such private data.
| We are doing so -- quite selectively and carefully -- because we
| believe it serves the public interest in fundamental ways,
| allowing readers to see patterns that were until now hidden....
| We believe that disclosing the identities of billionaires who
| paid little to no taxes in years their fortunes grew by billions
| of dollars will help readers understand the magnitude of the tax
| advantages the ultrarich enjoy... Our publication of this tax
| data comes at a possibly pivotal moment in America's long, often
| contentious debate about the fairness of our tax system
|
| So it's okay to encroach on the privacy of private individuals as
| long as it serves a political purpose? To try to drum up support
| for higher tax rates? They're not even saying these individuals
| used their money to manipulate the tax code, but are merely
| beneficiaries of income with preferable tax treatment.
| jonathankoren wrote:
| Let's talk about the actual damage that could occur to an
| individual here. The fact of the matter is, billionaires are
| effectively isolated from all societal repercussions, where the
| average person simply isn't. Even if you waved a magic wand,
| and prevented them from making any money through any mechanism,
| and they just had spend their wealth, their lifestyle would not
| change _at all_. They literally can not spend the amount of
| money they have, in the years of life they have remaining. Even
| the threat of jail time isn 't a real threat, given the serious
| discrepancies in prosecution and sentencing guidelines, let
| alone the plausibility of someone pulling a Carlos Ghosn[0],
| which is much easier to do when you effectively have infinite
| resources.
|
| Now let's look at the other side. The societal benefit is
| making these effects current preferential policies concrete.
| Often politicians and other supporters of the super wealthy
| intentionally muddy the waters by talking about "small
| businesses", "family farms", and other middle class and upper
| middle class lifestyles. (e.g. The arguments made by against
| inheritance tax, that only affects net worths in excess of
| $11.7 million, or the arguments based on absolute dollar
| amounts rather than income or wealth percentages.) By making
| the effects concrete rather than abstract, it's much harder to
| argue that there is any sort of negative individual effects on
| ultra wealthy.[1]
|
| [0] https://www.bbc.com/news/world-50964040
|
| [1] For example: Even if you took half of Warren Buffet's
| wealth ($110 B) every year for the rest of his life (90 years
| old, today), he'd probably still die a billionaire. And even if
| he lived to be a 100, he'd still have $100 million.
| toomuchtodo wrote:
| How you feel about this is going to depend on where you are on
| the political spectrum. I fully support this decision based on
| where the country stands on inequality and socioeconomic power
| imbalances. It's in the public interest to demonstrate the
| result of poorly constructed public policy (and thereby stoke
| inertia to fix it and erode wealth inequality).
|
| I'm happy to make my tax returns and income history public if
| the wealthy are required to do the same.
| bko wrote:
| So if someone wanted to demonstrate poor building codes by
| setting your house on fire, that would be okay too, since you
| know, it's in the public interest to demonstrate lax building
| codes?
|
| Privacy is a right that I would think more people on this
| forum would respect. I don't see why you're so happy to offer
| up the rights of others as sacrificial lambs to make some
| political point.
| sophacles wrote:
| > So if someone wanted to demonstrate poor building codes
| by setting your house on fire, that would be okay too,
| since you know, it's in the public interest to demonstrate
| lax building codes?
|
| Yes, of course destroying property and incurring expenses
| for the local government is exactly the same as releasing
| records... oh no wait - its not at all the same.
| toomuchtodo wrote:
| A better analogy would be breaking and entering to collect
| evidence that a building was unsafe for occupancy, and I'd
| support that as well under the assumption that due process
| had failed and there was risk to those marginalized.
|
| I don't believe there is an absolute right to privacy. As
| always, there's nuance.
| sokoloff wrote:
| Does this hypothesize the lack of a functioning court
| system to issue a search warrant, the lack of observing
| the Fourth Amendment in the US (or equivalent in many
| other countries), or both?
| toomuchtodo wrote:
| No hard and fast rules. Like obscenity, a reasonable
| person believes the situation warrants it when they see
| it.
| bko wrote:
| So evidence obtained illegally outside of due-process is
| fair game in your book?
|
| I guess by saying "when due process failed" kind of makes
| it so since by definition it "failed".
| itsoktocry wrote:
| > _So evidence obtained illegally outside of due-process
| is fair game in your book?_
|
| So evidence of horrible crimes should be ignored if
| subjective "due-process" isn't followed? You do realize
| that the moneyed elite have disproportionate influence
| over "process" and law, right?
|
| Focus on the leaks and whether they are true, not the
| messenger.
| bko wrote:
| The "horrible crimes" of following the applicable tax
| laws. Got it.
|
| I'm not focusing on the messenger. I'm questioning the
| ethics to violate the privacy of private individuals to
| try to score political points.
| aaron-santos wrote:
| You're not advocating for modeling our actions, social
| interactions, behaviours, and relationships after our
| criminal justice system, right? Also you're not
| advocating for an equivalentcy between judicial
| evidenciary procedure and information gathering, and
| judicial due process and social due process, right?
| greenie_beans wrote:
| What? That house burning example is absurd and bad logic
| deeblering4 wrote:
| If you purposely set it on fire, thats arson. But actually
| yes, in many cases accidents are catalyst needed to make
| change happen for the benefit of the public.
|
| A dangerous intersection gets a traffic light _after_ a
| horrible car crash.
|
| A dangerous building design code gets corrected _after_ the
| doors wont open outward during a fire.
|
| Problems need to first come to light to be fixed.
| exotree wrote:
| They are not private individuals. They are individuals that are
| of public interest (much like celebrities) and hold significant
| sway over communities (much like public officials). This is
| pretty standard legal precedent.
| secondcoming wrote:
| Hi, exotree, I have declared you to be of interest to the
| public. What's your annual take-home pay?
| bko wrote:
| So privacy is only for those that aren't celebrities? Do you
| have some barometer for what makes a "celebrity"? Blue check
| mark?
|
| Right to privacy is a human right. Do you agree? If so, are
| there classes of human rights that aren't applicable to some
| groups of individuals?
| nzmsv wrote:
| It's actually very simple. If a year from now you find that
| the authors (Engelberg and Tofel, others?) of this project
| are still free then everyone whose data they published was
| a legit "celebrity" and the leak was OK with the current
| administration. If you suddenly discover that all of
| ProPublica are actually sex offenders and evade justice by
| hiding out in embassies (or something similar) then they
| overreached and leaked the wrong data on an off-limits
| "non-celebrity". Makes sense.
| deeblering4 wrote:
| Unfortunately you are speaking of ideals. In reality a
| person's right to privacy is dependent on many factors
| including their country, race, etc.
|
| With regards to celebrity, there is absolutely a tradeoff.
| On paper celebrities have the same civil rights as anyone
| else, but e.g. have you heard of the paparazzi before?
| bko wrote:
| > Unfortunately you are speaking of ideals. In reality a
| person's right to privacy is dependent on many factors
| including their country, race, etc.
|
| I disagree. A right is a human right. Human rights are
| not granted by a country, they can only be violated. My
| right to free thought and expression doesn't cease being
| a right if I'm in an oppressive state. A state can
| violate my rights but human rights are universal. You can
| disagree that privacy is a human right, and that's fine
| if you do.
|
| In regards to paparazzi, if you're in a public space, you
| don't have the same right. It's balance by the right of
| another person taking photos in that same public space.
| There is no expectation of privacy, so I'm free to snap
| your picture, same as I have a right to record a police
| interaction (despite what some legislation might have you
| believe). But that doesn't mean I have the right to break
| into your home and record you sleeping.
| deeblering4 wrote:
| I didn't disagree. I said it's an ideal.
|
| Do you seriously think the experience is the same in
| public between an average citizen and a celebrity? There
| is a huge trade off that a celebrity accepts when
| becoming a household name/face.
| nicoburns wrote:
| > Right to privacy is a human right. Do you agree? If so,
| are there classes of human rights that aren't applicable to
| some groups of individuals?
|
| Yes, but right to extreme wealth isn't. I don't think
| people should be able to control this amount of wealth at
| all, but while they can I think public scrutiny over their
| finances is entirely reasonable.
| exotree wrote:
| Courts exist for this reason. On one hand, you have the
| right to privacy (though it is not spelled out that
| clearly, it is inferred).
|
| On the other, you have freedom of the press clearly
| outlined in the first amendment. There is no perfect answer
| and it will be subject to some debate. But in this
| particular instance, precedence has made it clear that
| people of significant stature (and that could mean a blue
| check is a signal of that in court!) have less of a right
| to privacy when weighed against the first amendment.
| deeblering4 wrote:
| And the .001 consistently encroach on our political policies
| for private benefit.
|
| I see these tax loopholes as bugs/vulnerabilities in the tax
| code. And just like in software, bad actors have an incentive
| to keep the bugs in place.
|
| Shedding light on them is a first step towards greater
| awareness and eventual fixes.
| junon wrote:
| Ah yes, an eye for an eye.
| throwaway9980 wrote:
| The bad actors with the most incentive to keep the bugs in
| place are the same people that put the bugs into the system:
| lawmakers. They might occasionally close a bug, but they are
| not interested in preventing them being introduced. They sell
| these bugs/vulnerabilities. That's the business they are in.
| bko wrote:
| > Taxes aren't and shouldn't be secret.
|
| Cool. Would you mind sending me your tax returns (assuming
| you're in the US), or similar income history?
|
| You can oppose tax loopholes without encroaching on the
| privacy of others. To use your example, imagine dumping
| hacked Facebook user data because you don't like bugs in
| Facebook software
| deeblering4 wrote:
| > Imagine dumping hacked facebook user data because you
| don't like bugs in Facebook software
|
| No need for imagination here... This happens all the time.
| Data leaks are a regular outcome from security
| bugs/breeches.
| bko wrote:
| And it's just as unethical in that case as well
| deeblering4 wrote:
| Are you suggesting that the top "earners" who manipulate
| their taxes are acting ethically?
|
| These people deserve (and can afford) every ounce of
| scrutiny they receive.
| dnautics wrote:
| Suppose I like to donate to nonprofits supporting
| political dissidents of another nation and that makes me
| an assassination target, or hell political or adjacent
| orgs in this country (BLM, PP, NRA) and that makes me a
| harassment target
| jonathankoren wrote:
| What's the argument in keeping it secret? Politicians
| routinely (Trump notably being the exception) release these
| all the time.
| [deleted]
| silicon2401 wrote:
| That's an unfair response. It's reasonable to want the
| rules to change for society and be willing to play along.
| That's different from wanting to be the only one to do it.
| wegs2 wrote:
| I think, in this case, the rich encroach on my privacy enough
| that it seems proportionate.
|
| It's not okay to shoot your neighbor. It is okay to shoot your
| neighbor if they're shooting at you.
|
| When the rich stop trading my data, I'll fight for their
| privacy too.
| deeviant wrote:
| > So it's okay to encroach on the privacy of private
| individuals as long as it serves a political purpose?
|
| Interesting how your turn "public interest" into "political
| purpose".
| Jonnax wrote:
| Yes. It is.
|
| They are billionaires hiding their wealth.
|
| Leeches on society.
|
| The more money you have, the less right to privacy you have.
|
| That's my opinion.
|
| Your opinion seems to be that you accept that you're a peasant
| and you wish to lick their boots.
| throw_nbvc1234 wrote:
| > The more money you have, the less right to privacy you
| have.
|
| I'd change this to: The more power you have, the less right
| to privacy you have.
|
| Money is just one form of power. If there was a way to give
| up the "power" that money provides (without giving up their
| money) then I'd say they can regain their right to privacy.
| Transparency is needed for the people to keep those with
| power accountable (in a free society and/or without
| violence).
| [deleted]
| greenie_beans wrote:
| They obviously considered the ethics of this and decided to
| share for "the public interest" and not "a political purpose"
| as you say. What politicians do with this information is
| another matter. They're simply telling the story like
| journalists are supposed to do!
| strictnein wrote:
| Labeling something a "True Tax Rate" (paid taxes / wealth
| increase) isn't journalism, it's advocacy.
| greenie_beans wrote:
| Good point. I guess I see the advantages of the ultra rich
| as something that shouldn't be politicized. That's some
| bullshit that all stripes of political belief should agree
| on and change. Like, who wouldn't advocate for that?
| (Besides the ultra rich. And please don't say those who
| aspire to be ultra rich, because that's not a realistic
| argument/that idea should die)
|
| Edit: Can you explain why the phrase "true tax rate" is
| considered political advocacy?
| leetcrew wrote:
| > quite selectively and carefully
|
| > allowing readers to see patterns that were until now hidden
|
| am I being too cynical, or is this a "pick one" situation? what
| "pattern" are the readers supposed to see in this carefully
| chosen subset of the data? what patterns do the unchosen
| subsets show?
| exotree wrote:
| This is where trust comes in. Most people need a narrative
| and a story to follow the threads; they are not experts in
| determining what the data does or does not tell us, and
| someone has to attempt to do so.
|
| I'd give ProPublica the benefit the doubt here. They have the
| resources to hire the right talent, and that talent is likely
| empowered to keep conjecture at bay or properly disclosed.
|
| And, of course, you're unlikely to get all the data. Stories
| like this will nearly always, in some form or fashion, be
| based on a somewhat incomplete snapshot of data or documents.
| But taking that data and corroborating it with what we do
| know is often enough to add validity to the assumptions that
| are being reached by a publication such as ProPublica.
| geoduck14 wrote:
| Ok HN! We are intelligent, rational, and well intentioned- but we
| are also diverse! And it is great.
|
| Can someone please help me with the following! Why do we still
| compare WEALTH with INCOME tax?
|
| Of COURSE wealth is skewed: you go negative pretty fast (college
| and mortgage), and then you accumulate over time. It is a pretty
| rational progress. Income can vary over time - and the tax should
| vary, too.
|
| Why do we smash these two together? Are we DELIBERATLY pushing
| for a wealth tax? We we doing it underhandedly? Is it ACTUALLY a
| good idea?
| rexreed wrote:
| I also don't understand how wealth and income can be conflated
| like this. We have an income tax, so, no duh, we tax income,
| not wealth. Criticizing the income tax because it doesn't tax
| wealth is like criticizing sales tax because it doesn't tax
| property values. They aren't the same.
|
| I don't get how ProPublica can take such a stance. Either it's
| intentional, which is bad, or it's unintentional, which is even
| worse?
| ihumanable wrote:
| 80% of the actual article,
| https://www.propublica.org/article/the-secret-irs-files-
| trov..., is discussing this exact thing.
|
| This isn't a case where there's a journalistic sleight-of-
| hand, trying to conflate and confuse wealth and income. one
| could argue that the entire thesis of the article is that
| because we tax income and not wealth, those with wealth avoid
| ever realizing income, relying on loans instead of income.
|
| It's an article about the end result of taxing income instead
| of wealth, there's literally a massive interactive scrolling
| graphic that discusses it half-way through.
| rexreed wrote:
| Well yeah that's obvious. I could summarize this whole
| article by saying that wealthy people don't pay much income
| tax because they don't report much taxable income. Since we
| don't tax wealth separately from income, they don't pay
| much tax.
|
| There, I summarized all their intense reporting in an
| obvious way. What does it tell us? Nothing that we don't
| already know.
|
| All they are arguing about is taxing wealth separately from
| taxing income. That will never happen for many reasons.
| throwawaysea wrote:
| Surely people recognize that the related article purposely
| misleads readers by calculating false tax rates based not on
| income but paper wealth that is not real or recognized.
| ProPublica has a hard progressive bias, this article being one
| among many examples.
| f38zf5vdt wrote:
| It seems like this is missing the obvious focal point: loans
| taken out by individuals against assets like stock options and
| equities should be taxed as income. It's trivial to evade income
| tax when you have accumulated wealth in equities by taking out a
| loan against the equities and then progressively liquidating them
| at capital gains tax rates to fulfil the loan payments. If every
| loan taken out by Elon Musk or Jeff Bezos against their corporate
| assets were treated as income, I suspect we'd see a much larger
| share of tax paid by them.
|
| edit: How do I make the same point as u/fairity 5 minutes prior
| but accumulate down votes? lol
| imtringued wrote:
| Why does this matter? The real problem is that the capital
| gains tax rate is below the income tax you would have to pay
| for the same income. Either you adjust the capital gains tax
| upwards to match income taxes or you replace it completely with
| income taxes. You don't need a complicated loan tax.
| 34679 wrote:
| They explain it well in the full article:
|
| https://www.propublica.org/article/the-secret-irs-files-
| trov...
|
| >So how do megabillionaires pay their megabills while opting
| for $1 salaries and hanging onto their stock? According to
| public documents and experts, the answer for some is
| borrowing money -- lots of it.
|
| >For regular people, borrowing money is often something done
| out of necessity, say for a car or a home. But for the
| ultrawealthy, it can be a way to access billions without
| producing income, and thus, income tax.
|
| >The tax math provides a clear incentive for this. If you own
| a company and take a huge salary, you'll pay 37% in income
| tax on the bulk of it. Sell stock and you'll pay 20% in
| capital gains tax -- and lose some control over your company.
| But take out a loan, and these days you'll pay a single-digit
| interest rate and no tax; since loans must be paid back, the
| IRS doesn't consider them income.
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