When people talk about complex tax codes and the “end of the quarter”, they don’t really consider how these things have evolved into farms of nearly-enslaved workers (accountants). Such horrendous workplaces do exist inside big companies: the job is to figure out how to pay the least tax, and time is of the essence. I knew someone who worked as such a finance person, at a contracting company for the oil industry, 7 days a week from 6 AM to midnight. Oh, he had a day “off” every few months but that was only because the quarter had just ended and literally the next day they started a new march of insanity, all for the numbers. Dozens of workers, hundreds; they all swore at each other, it was a disaster of over-stress and anger, and it was actually more common to find divorced people there than not.
When the Rich Said No to Getting Richer
201–210 of 229 posts
Re: When the Rich Said No to Getting Richer
#202Earlier quoted context omitted.
What if you make the rules so simple that there are NO loopholes and there is no/little possibility for tax avoidance?
Because most loopholes are in fact deductions that are there for a reason. The overall tax rate is too high (or it would be too expensive to lower the overall rate), so politicians give certain people sweetheart deals on certain things because they consider it relevant, thus offering someone, somewhere a tax break. Others are then free to use the same deduction for their benefit. The wealthy aren't stupid. They're ge…
Most loopholes are aimed at big corporations and high-income people ($1M+). You and I cannot take advantage of them easily.
Loopholes:
- obfuscate the fact that "certain" people, who should be paying 35% are not, in fact, paying a penny.
- give incredible power to the people who decide what "certain" group to reward with them or threaten to withdraw them
Re: When the Rich Said No to Getting Richer
#203I 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…
For a very long time, Swiss banks were bastions of impenetrable secrecy. The wealthy from all over the world used to stash their wealth there because they knew it was safe from prying eyes and even from the nearly all-powerful IRS. But then a couple of decades ago, the US government successfully made Swiss banks much more transparent -- to the effect that they are not nearly as reliable a safe haven for tax evaders as they were.
This doesn't mean that the wealthy have no more places to hide their money, but it does make it much more difficult for them, and is a sign of progress.
Re: When the Rich Said No to Getting Richer
#204Earlier quoted context omitted.
I dislike the myth that business leaders and entrepreneurs who are motivated by money do not matter. There are plenty of income-motivated people who are building meaningful products.
Sure, but income and wealth inequality is affecting our sociopolitical stability. Should we really prioritize their success over the lower and middle classes? How much higher should executive pay be compared to the workers? Why should executives get tens of millions per year while the laborers make $20-40k/yr?
Not totally sure what you're responding to. I was just commenting on this statement from the parent -
>The business leaders who really matter are motivated by their passion and curiosity, shaping their legacy, changing the world, etc.
I agree though. Most laborers work 10x harder than I do. I'm just rewarded from having some obscure knowledge. I do not necessarily agree that we should be going after individuals though. I think corporations are the correct target.
Re: When the Rich Said No to Getting Richer
#205Earlier quoted context omitted.
Walmart employs 2,200,000 today. McMillon's total pay is $19,800,000. Per employee, that's $9.
I agree with your top level point about CEO pay not being significant compared to corporate budgets. I'm just saying that companies that employ a lot of people aren't exactly a new phenomenon.
What is material to me is the notion that somehow the wealthy are responsible for the plight of the middle and lower class. In the US, the wealth that some enjoy is a side-effect of the economy's behavior. The economy behaves in the way it was designed* (not saying the designs are sound in all respects, but it is intentionally designed and its behavior reflects that design).
I'm not convinced that the income/wealth gap itself is 'the problem'. Therefore, taxing the wealthy at a greater level will not be 'the fix'.
What we want is for lower and middle income families to have more disposable income, less financial stress, and overall better quality of life. I believe that the most potent knob to affect that is the number of jobs available. Increasing the number of jobs increases the demand for workers. Increasing demand for workers increases the average pay. We can talk about the quality of the jobs as well, but I believe the primary influence from a macro-economic view is the number of jobs.
US unemployment is at a 10 year low[0]. So we should see pay (and inflation) creeping up over the next few years, barring some unforeseen economic disaster, and the lower and middle class will benefit.
[0] https://data.bls.gov/timeseries/LNS14000000
* One illustration that keeps coming to mind: Two investors invest in the same instrument. That instrument returns 10% per year. They hold the investment for 5 years.
Investor A invests $10,000 Investor B invests $100,000.
At time 0 the 'wealth gap' is $90,000. At 5 years, A's investment is worth $16,100 and B's is worth $161,000. The wealth gap has grown to $145,000. It seems to me that people are making the observation that this gap is increasing, and it is, but in reality, it's a natural manifestation of capitalist economies. We've been in a bull market for 7 years, it's borderline unprecedented, and one observable effect is that the gap in absolute $ between rich and poor is increasing.
Re: When the Rich Said No to Getting Richer
#206Earlier quoted context omitted.
A flat tax you only start paying above a certain threshold then? For sake of argument everything under 20k is tax free, you pay flat tax on everything above? Problem solved?
A lot of people would consider that flatly immoral, and as evidence that the poor aren't paying their fair share. Remember that Flat Tax is also called Fair Tax. The concept of fairness is central.
If everyone receives the same tax free allowance then it certainly is fair. Fairer and simpler.
Re: When the Rich Said No to Getting Richer
#207Earlier quoted context omitted.
Idk about you but I can't think of many former soviet block countries that have a healthy distribution of wealth between working, middle, and upper classes. Furthermore the list of countries given there are not places where you want to be poor.
ex-Soviet countries like Romania and Poland are definitely on their away up. Compare them to slowly declining western European countries like Italy and Spain.
Romania and Poland were never soviets. Communist, yes. Behind the Iron Curtain, yes. Members of the Warsaw Pact, yes (Poland is kind of obvious on this). But never soviets.
Re: When the Rich Said No to Getting Richer
#208Earlier quoted context omitted.
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, trave…
>If your company pays for your personal expenses like housing, it's taxable as income.
Sure, but it can be a strategy to reduce taxable income. My point is that people at the top end are highly incentivized to avoid taxes and will find ways to do so. I'm not making any policy prescription, tax policy is hard and I don't claim to know what's optimal or even necessarily better.
Re: When the Rich Said No to Getting Richer
#209I 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…
I would like to see a simplification of the tax laws for those on the lower and middle incomes.
It would also be nice to see something for independent contractors and smaller businesses.
Should we really be taxing a mom and pop shop at the same top marginal rate as a large corporation?
Re: When the Rich Said No to Getting Richer
#210I 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…
Well tax 'em all and close some loopholes. Most countries globally manage.