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Really rich people are suddenly paying quite a bit more in taxes

washingtonpost.com

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Re: Really rich people are suddenly paying quite a bit more in taxes

#141

Post by muzz »

SlowComputer wrote: post #11
gopi wrote: post #8

Most of the these articles never consider state/local level income taxes. For a person in California the total top capital gain tax rate is more than 33%. This is actually the second highest in the world. If you consider the regular income tax its even much worse, currently the combined income tax rate in California is more than 50%

I live in California. I'm not "super rich" but we earn more than $1MM/year. For every additional dollar I earn, I only get to keep 47 cents of it, just counting _income_ taxes. In reality, only high earners pay taxes. And high-salaried people are getting screwed under Obama's war against the most productive citizens.

Are you a post-tax income maximizer? (If not, what are you maximizing?)

If so, it speaks to the higher income generating power you have in California that you can be taxed more there than elsewhere and it is still the optimal result for you.

Re: Really rich people are suddenly paying quite a bit more in taxes

#142

Post by brownbat »

harryh wrote: post #137
brownbat wrote: post #135

Earlier quoted context omitted.

I really liked the discussion of the Chamley-Judd model, especially in parable form. Question though: I worry that some individuals have the ability to recharacterize their earnings as either income or gains by shifting their contracts and methods of compensation.[0] If so, then you end up with odd results. Scenario 2 (a 50% tax on wages) turns into Scenario 1 (no taxes) for that subset of the population. Looks like…

Indeed if you look at the Wikipedia link I posted you'll find a section on "Avoidance of tax arbitrage between capital and labor incomes" which is exactly the problem you describe. Incidentally, when people talk about "tax shelters" and "complicated schemes the rich use to avoid paying taxes"(1) they're mostly talking about this. Though often they don't make that as clear as they should. 1. http://www.nytimes.com/201…

Yup, right there citing Reis (2007). Good stuff, thanks.

Re: Really rich people are suddenly paying quite a bit more in taxes

#143

Post by muzz »

Zhenya wrote: post #104
gnaritas wrote: post #77

Earlier quoted context omitted.

> I live in California. I'm not "super rich" but we earn more than $1MM/year. > And high-salaried people are getting screwed under Obama's war against the most productive citizens. Stop whining and blaming Obama; there's no war against productive citizens, you aren't a victim. You don't get to complain when you're among the wealthiest in the world that you don't get to keep enough money. 99.9% of the country makes le…

What does it matter what the rest of the world has? If he/she earned it legally, they deserve it. You don't get to make victims out of the rest of the world.

GP earned it in California and so is subject to California taxes in addition to Federal taxes

Re: Really rich people are suddenly paying quite a bit more in taxes

#144

Post by muzz »

anigbrowl wrote: post #88
jmspring wrote: post #10

I'm not a Trump fan, and despite likely tax hits, his proposal of simplifying the tax code (as many have done before him), getting rid of the IRS (yes jobs lost, but really, I got a certified letter owing $0.51 and they were "too busy with this category to answer. click ") would be a positive thing. One short summary of his proposal -- http://www.thepoliticalinsider.com/donald-trump-unveils-his-... I think a pure fla…

Obama also wanted to reduce income tax filing to a single-page affair. Almost all such proposals along these lines founder on the rocks of legislative buy-in. Given Trump's penchant for denouncing other people as idiots and worse, even if he were to be elected I'm skeptical about his ability to get anything substantial done. Sure, some in congress would be intimidated or enthused into working with him, but others wou…

I thought tax simplification was opposed by the tax-preparation industry: http://techcrunch.com/2013/03/27/turbotax-maker-funnels-mill...

Re: Really rich people are suddenly paying quite a bit more in taxes

#145

Post by muzz »

beachstartup wrote: post #43
SlowComputer wrote: post #11

Earlier quoted context omitted.

I live in California. I'm not "super rich" but we earn more than $1MM/year. For every additional dollar I earn, I only get to keep 47 cents of it, just counting _income_ taxes. In reality, only high earners pay taxes. And high-salaried people are getting screwed under Obama's war against the most productive citizens.

uh, you should probably move, instead of complaining about who's president.

the fact that they haven't moved speaks volumes about how much more income they can generate in California versus elsewhere

Re: Really rich people are suddenly paying quite a bit more in taxes

#146

Post by muzz »

anigbrowl wrote: post #81

Some had argued that allowing taxes to rise would lead to an epidemic of capital flight, but this has failed to take place in the two years since tax rates went up. While I'm not hopeful, it would be nice if economic debates in the coming election year were firmly grounded in empirical evidence. With the increased computer power at our disposal it should be easier to model the impact of policy changes on wealth distr…

Yes those arguments often turn out to be false. In California, we had an income tax increase on the "job creators" that many argued would cause the affluent to leave the state, and an "Amazon Tax" that many argued would reduce jobs in the state. Those predictions couldn't have been more at odds with the eventual reality.

Re: Really rich people are suddenly paying quite a bit more in taxes

#147

Post by dang »

poikniok wrote: post #53
voynich61 wrote: post #52

Earlier quoted context omitted.

You earn $1MM per year. That means either a) you spend way too much or b) you actually would be, even at an 80% tax rate, 'super rich'. I assume you live in an area where housing is expensive? That's a luxury you're paying for. Of course people who already have large sums of wealth should be highly taxed as well. But you cannot tell me that the state taking 50% of the income of someone who makes a million a year is t…

And you are a leech my friend, at least this man provides some service to the world, unlike you ...

Personal attacks are not allowed on HN. We ban accounts that do this, so please don't.

Re: Really rich people are suddenly paying quite a bit more in taxes

#148

Post by methos3000 »

SlowComputer wrote: post #11
gopi wrote: post #8

Most of the these articles never consider state/local level income taxes. For a person in California the total top capital gain tax rate is more than 33%. This is actually the second highest in the world. If you consider the regular income tax its even much worse, currently the combined income tax rate in California is more than 50%

I live in California. I'm not "super rich" but we earn more than $1MM/year. For every additional dollar I earn, I only get to keep 47 cents of it, just counting _income_ taxes. In reality, only high earners pay taxes. And high-salaried people are getting screwed under Obama's war against the most productive citizens.

Since this individual is paying way more in taxes than the 99%, should they not have better services from the Gov? Do we not as Americans assume the more we pay for an item or service the better the product? It's only fair?

Re: Really rich people are suddenly paying quite a bit more in taxes

#149

Post by newman314 »

harryh wrote: post #121
newman314 wrote: post #120

Earlier quoted context omitted.

Are you proposing that eliminating corporate taxes would mean that somehow you would make more at the end of the day and be taxed less overall? I'm not sure I see that happening.

If you eliminate corporate taxes then the shareholders of the corporation would make more money(1). You can then make up for the lost corporate tax revenue by taxing those shareholders more. It would be a simpler and more efficient system overall. 1. Probably also the employees would make more and the customers would pay less for products as well. This has to do with something called tax incidence.

Thanks. I'll have to read more about tax incidence.

But naively speaking, what's the incentive for a corporation to increase employee pay in this scenario rather than just maximize shareholder value?

Re: Really rich people are suddenly paying quite a bit more in taxes

#150

Post by inthewoods »

SlowComputer wrote: post #11
gopi wrote: post #8

Most of the these articles never consider state/local level income taxes. For a person in California the total top capital gain tax rate is more than 33%. This is actually the second highest in the world. If you consider the regular income tax its even much worse, currently the combined income tax rate in California is more than 50%

I live in California. I'm not "super rich" but we earn more than $1MM/year. For every additional dollar I earn, I only get to keep 47 cents of it, just counting _income_ taxes. In reality, only high earners pay taxes. And high-salaried people are getting screwed under Obama's war against the most productive citizens.

Why is this an issue with Obama? I understand he allowed a tax cut to expire that raised the top tax bracket, but it sounds like the issue you're having is more with California?

Also, productive those that make the most money. Having worked on Wall Street, I know an entire class of mutual fund managers that I would argue are negative value to society given that they've underperformed their index benchmark for years yet are making millions of dollars a year for their active management "service".

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