[HN Gopher] America's billionaires pay an average income tax rat...
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       America's billionaires pay an average income tax rate of just 8.2%
        
       Author : fIoat
       Score  : 32 points
       Date   : 2021-09-23 20:28 UTC (2 hours ago)
        
 (HTM) web link (www.cbsnews.com)
 (TXT) w3m dump (www.cbsnews.com)
        
       | ChrisLomont wrote:
       | What if they also pay taxes that are not listed as income taxes,
       | say, like the majority of corporate taxes? [1]
       | 
       | This leaves significant portions of their effective taxes off the
       | table.
       | 
       | [1]
       | https://www.cbo.gov/sites/default/files/cbofiles/attachments...
        
         | BirdPlusPlus wrote:
         | The unfortunate truth about corporate taxes is they're not
         | really possible. There are two possible outcomes.
         | 
         | 1. The business cannot absorb the levied tax into its overhead
         | and shuts down. Production and operations cease. Said business
         | doesn't buy materials or supplies, workers become unemployed,
         | and customers do not shop. Result: a net revenue loss in sales,
         | payroll, and income taxes.
         | 
         | 2. The business can absorb the levied tax into its overhead...
         | which is then offloaded onto the consumer whose buying power
         | and standard of living decreases.
         | 
         | Follow the money long enough and you'll find most taxes are
         | paid by the individual consumer in roundabout and convoluted
         | ways.
        
         | maerF0x0 wrote:
         | I think OP's point is that say the company is "theirs" and
         | earns $100M . Now the company pays, say, 25% corporate tax
         | rate. So there is 75M to pay the owner. Owner takes it as
         | income and now pays 25% tax, so they're left with 56M .
         | Effective tax is ~44% at that point from the original $100M.
         | 
         | I argue with my friends that tax rate is less important than
         | turn over rate. My spending is someone else's income, so with
         | enough generations of spending/income all the money becomes
         | 99.999% the government's.
         | 
         | Eg: I pay $1 to my friend, he pays 20c tax and keeps 80c. Then
         | pays back to me 80c. I pay 16c tax and keep 64c. pay it again,
         | 12.8c tax, keep 51.2 --> in 3 generations we're already at
         | nearly 50% tax.
        
       | secabeen wrote:
       | This analysis includes as income a portion of the value of un-
       | taxed stock gains, so it's not a traditional measure.
        
         | phendrenad2 wrote:
         | I don't understand how people keep making this mistake, unless
         | it's not actually a mistake, and is just a way to generate
         | outrage-inducing headlines.
        
           | secabeen wrote:
           | It's the latter.
           | 
           | There is probably some value in taxing unrealized stock
           | gains. If you purchased Google stock via options at the IPO,
           | and have still yet to sell it, it would be reasonable to
           | consider a portion of that profit locked in, and somehow tax
           | it. It would be complicated, and challenging, but leaving
           | that stock entirely untaxed until it is sold or inherited
           | incurs different problems.
        
             | fIoat wrote:
             | One thing to consider is having a large amount of stocks
             | allows you to borrow on margin and move other people's
             | money around in ways the less wealthy cannot. I wonder if
             | the aim here is to tax the power, not necessarily the
             | wealth.
        
       | Rebelgecko wrote:
       | It seems like that figure is predicated on a nonstandard
       | definition of "income" that includes things that aren't actually
       | income.
        
         | tedjdziuba wrote:
         | The standard populist playbook of conflating "rise in value of
         | an asset a person owns" with "income".
        
         | marwatk wrote:
         | I've never understood this argument. If I buy a can of soda
         | with 'already taxed' money for $.50 and sell it for $1, is that
         | not $.50 of income that hasn't been taxed? What makes stock
         | special?
        
           | solveit wrote:
           | Because you don't get taxed until you actually sell the can
           | of soda.
        
             | spiderice wrote:
             | Exactly this. The more appropriate example is you buy a can
             | of soda for $0.50. Hold on to it until the value goes to
             | $2.00, then to $3.00, and eventually sell it at $1.00. You
             | are then taxed on that $0.50 of income. But why would it
             | make sense to tax them at the $2.00 and $3.00 price points
             | if they didn't even sell the soda?
        
           | rsj_hn wrote:
           | They are counting unrealized gains, so your example doesn't
           | apply.
        
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       (page generated 2021-09-23 23:01 UTC)