When the Rich Said No to Getting Richer • Hacker News Board

Re: When the Rich Said No to Getting Richer

#161

Post by logfromblammo » Tue, Sep 05, 2017, 3:06 PM UTC

jazzyk wrote: post #81

zip1234 wrote: post #69

Earlier quoted context omitted.

Tax evasion is illegally not paying the taxes that are due. If you are taking advantages of legal loopholes, it is not tax evasion.

What if you make the rules so simple that there are NO loopholes and there is no/little possibility for tax avoidance?

I think the problem is not with the complexity of the tax code, but that those taxed by it have significant incentive to avoid paying taxes, and have the ability to manipulate information such that they can pay less.

No matter how you slice it, if government taxes "income", and your business is set up such that you decide what your "income" is, you can control how much tax you are bound to pay. The only way around it is to make people think that spending more money on more government is a good and sensible thing to do. Or perhaps that spending more money on higher employee payroll is a good and sensible thing to do.

Re: When the Rich Said No to Getting Richer

#162

Post by waisbrot » Tue, Sep 05, 2017, 3:07 PM UTC

harryh wrote: post #142

mywacaday wrote: post #47

I wonder how many more jobs would actually be created if CEOs pay was funneled into R&D or expansion or how many job cuts would have been avoided through the years

In 2016 GE (for example) spent 5.5 billion on R&D. Their CEO Jeffrey Immelt made about 20 million. I don't think a 0.363% increase in the R&D budget would make much of a difference.

So, if I could hire 20 researchers and spend $1m/year each on their salaries and equipment... your guess is that I would accomplish nothing?

Re: When the Rich Said No to Getting Richer

#163

Post by ringaroundthetx » Tue, Sep 05, 2017, 3:08 PM UTC

chollida1 wrote: post #2

I wrote this a few years ago in response to a similar piece: The problem is that the rich have the ability to take their income in alot of different ways. Tax income more, they'll take it as dividends. Tax dividends more, they'll take it as capital gains. Tax capital gains, they won't realize their capital gains until they can offset them with realized losses or they'll just get bank loans again't their stock holding…

Lets keep it going!

Tax stocks steeper and someone wealthy enough will create the same investment exposure in the futures market, where every trade gets a mixed lower capital gains rate automatically!

Make cash transaction reporting requirements over $10,000 for everything, and someone wealthy enough will get real estate totally exempt from it!

Get an APA or a private ruling from the IRS where they agree on all the ways you aren't going to pay them!

Tell everyone else this is a problem so you can write a law with a new tax change that really only benefits you and your friends, because all the constituents you pander to have a base of voters that only somewhat understands income tax!

Squad goals!

Re: When the Rich Said No to Getting Richer

#164

Post by ReverseCold » Tue, Sep 05, 2017, 3:08 PM UTC

brianwawok wrote: post #153

sharemywin wrote: post #131

Earlier quoted context omitted.

If you believe that too much wealth equates to too much power in a democracy then the simplest tax code would be all wealth over X is taxed at 100% all transgressions are punishable by death. Personally, I think that's a little harsh but some people only see black and white.

Hah my hft bot would double stock value of apple for 1 second and a bunch of automatic deaths would be handed down to investors.

I think gp said that it would be taxed at 100%, not that one couldn't keep over x at a time.

Re: When the Rich Said No to Getting Richer

#165

Post by Spooky23 » Tue, Sep 05, 2017, 3:08 PM UTC

chollida1 wrote: post #2

I wrote this a few years ago in response to a similar piece: The problem is that the rich have the ability to take their income in alot of different ways. Tax income more, they'll take it as dividends. Tax dividends more, they'll take it as capital gains. Tax capital gains, they won't realize their capital gains until they can offset them with realized losses or they'll just get bank loans again't their stock holding…

That's one way to think about it.

The reality is that people will calculate risk/reward based on the situations that they face. Tax enforcement is a pretty simple concept. You don't invest $1 in enforcement to net $1 in compelled compliance, you use enforcement to net $100 in voluntary compliance. Tax authorities can and do calculate how much they can harvest from enforcement activity.

Enforcement increases both the risk and impact when people do that risk calculation. If doing some shady bullshit to re-swizzle income has a X% risk of costing me $Y or Z months of bureaucratic torture, it's going to impact my decision process.

US Federal tax enforcement is a joke today. Through de-funding and neglect, the ability of the tax authorities at the Federal level to perform even basic enforcement activity has been kneecapped. To give a anecdotal illustration of the current situation, a friend of mine is a now-retired tax enforcement person. His particular speciality was staffed with as many as 75-100 people nationwide in the early 90s... when he retired earlier this year there were two other people in that function and most prosecutions in his speciality were being abandoned as no Federal people exist to testify at trial!

Re: When the Rich Said No to Getting Richer

#166

Post by openasocket » Tue, Sep 05, 2017, 3:09 PM UTC

11thEarlOfMar wrote: post #117

As CEO of GE, Jeffrey Immelt earned $17,744,236 last year. GE has 330,000 employees. If Immelt decided to take $0 and share his income equally with the remaining GE employees, he'd increase each worker's income by $53.77 per year. That's not going to do much to close either the wealth or income gaps. Part of what we are seeing is simply that corporations are getting so much larger than they've ever been in history. T…

I take issue with the notion that corporations are larger than they've ever been in history. Consider the East India Company. At its height, it was worth $7.4 trillion in modern US dollars, and controlled half of the entire world's trade. I couldn't find details for how many people it employed total, but it did have a standing army of 260,000. That's right, a private army controlled by a company. Hell, the company essentially ruled India for a century. This is a company that fought wars and controlled territory. https://en.wikipedia.org/wiki/East_India_Company

Not entirely on topic, but it's important food for thought.

Re: When the Rich Said No to Getting Richer

#167

Post by waisbrot » Tue, Sep 05, 2017, 3:09 PM UTC

slowmovintarget wrote: post #38

The damning phrase in the article is "which has left less money for everyone else." The economy is not a zero sum game.

It's not zero-sum, but it's also not the case that your money and mine are unrelated.

Re: When the Rich Said No to Getting Richer

#168

Post by splintercell » Tue, Sep 05, 2017, 3:10 PM UTC

openasocket wrote: post #132

chollida1 wrote: post #2

I wrote this a few years ago in response to a similar piece: The problem is that the rich have the ability to take their income in alot of different ways. Tax income more, they'll take it as dividends. Tax dividends more, they'll take it as capital gains. Tax capital gains, they won't realize their capital gains until they can offset them with realized losses or they'll just get bank loans again't their stock holding…

This is the Nirvana fallacy. Because we can't fix everything, there's no point in trying to fix anything. For example: "what's the point in having seatbelts? People still die in car crashes." The reality is, just like a seatbelts reduce the number of fatalities in car crashes, each loop hole closed makes things a little more difficult for people to shelter their assets.

But at what point, OP's criticism is a qualitative criticism of the approach being advocated?

For instance, if someone says that alternative medicine fails for n different reasons, would you say that the person is committing Nirvana fallacy or that there is something to say about the fundamental failures of alternative medicine?

The qualitative fault I'm trying to point out is that trying to tax 'rich people' is a failed attempt because no matter how effective you can implement your tax measures, at the end of the day people can move to other countries and your own country starts to suffer more than it benefits from the increased taxes.

It is a Nirvana fallacy if someone says "No matter how hard you try to curb murders, serial killers always keep finding new ways to commit crime", because at the end of the day, if all the serial killers move out of your country to a more serial killer friendly country, you don't actually suffer, you did your job.

On the other hand, in terms of taxes, you don't want your tax paying population to move out or be rendered incapable of producing wealth. That kind of 'equality' is not worth it.

Re: When the Rich Said No to Getting Richer

#169

Post by wavefunction » Tue, Sep 05, 2017, 3:11 PM UTC

ameister14 wrote: post #128

jrimbault wrote: post #59

Earlier quoted context omitted.

Because History started when the US began and there was no financial system before and nobody ever learned anything before.

First income tax in the UK was in 1842, first income tax in France was 1789 - could you find one that has been going since 1017 AD?

There aren't many sovereign nations that have been in existence since 1017 AD, so that sort of makes your question moot.

The Code of Hammurabi describes Babylonian taxes and the manners of levy. The Egyptians and Romans levied income taxes. There is of course the gafol/Danegeld/heregald of the Anglo-Saxons. You've got taxes/tolls paid by merchants on the Silk Road and certainly I've read of taxation in Ashoka's era and other sub-continental sovereignties.

You have the taxation/feudal levy system that existed even in archaic Greece where boats, rowers and soldiers were expected to be provided by patricians in times of war.

China (especially) and Japan have long histories of taxation.

The idea that recorded human history has been mostly without tax seems to be ahistoric.

Re: When the Rich Said No to Getting Richer

#170

Post by aianus » Tue, Sep 05, 2017, 3:11 PM UTC

ch4s3 wrote: post #105

tici_88 wrote: post #83

Earlier quoted context omitted.

The idea is to have everything taxed at the same rate: income, dividends, capital gains, whatever. So every source of 'money coming in' gets treated and taxed the same way. By having a flat tax it doesn't make sense to shift 'money in' under different categories because all gets taxed the same rate. So for example, income, capital gains, dividends would all be taxed at 10% or 15% or whatever.

Then why not hold stock, realize no gains by not selling it, and take out a loan with stock as collateral. Or, you could leave it all in a company that you own, draw no income and have the company pay for your housing, meals, travel, etc.

> Then why not hold stock, realize no gains by not selling it, and take out a loan with stock as collateral.

You can already do this today. Eventually you will need to sell and pay the taxes, eg. if interest rates rise and it's no longer worth it or when you die and have to pay the loans off.

> Or, you could leave it all in a company that you own, draw no income and have the company pay for your housing, meals, travel, etc.

If your company pays for your personal expenses like housing, it's taxable as income. Lots of SV companies pay for their interns' housing and the rent was always listed on their W2's.