Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

bloomberg.com

Post reply on HN
Print view View original

271–280 of 323 posts

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#271

Post by orthecreedence »

vasilipupkin wrote: post #132
maxxxxx wrote: post #118

Earlier quoted context omitted.

And they would have had much more money to invest if their income tax had been lower. You don't seem to want to understand my point: Low taxes for investment benefits wealthy people disproportionately. Yes, lower income also get some benefit but the vast majority goes to the wealthy. Same for all the Republic "tax reform" proposals: A little tax cut for small incomes, large tax cut for high incomes.

it's a zero sum view of the world that is not correct. You could be lower income when you are 30 and wealthy when you are 65. So it's a lot of the same people that benefit. But more importantly, you are not considering the benefit of higher investment that the wealthy make because their investment taxes are lower. Higher investment leads to more economic activity and more jobs. In fact, the whole world has moved over…

> Higher investment leads to more economic activity and more jobs

In some cases. Investing in the stock market doesn't. It's just a somewhat randomized wealth redistribution system. If I invest $1M in IBM, IBM doesn't see any of that money. Nor do the investors in IBM. It might move the price of a fraction of a penny, but the money just goes to whatever person sold their stock.

So, some investment (private companies, municipal bonds, etc) leads to more economic activity, but not all investment. I'd be interested to see the breakdown.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#272

Post by jermaustin1 »

hippich wrote: post #191
jermaustin1 wrote: post #128

Earlier quoted context omitted.

People often forget about S-Corps. As the owner you W-2 yourself, then what is "left over" is a dividend. Since an S-Corp is a pass-through entity, you don't pay corporate taxes, and aren't getring the C-Corp double tax on your dividends. On the dividend, you don't end up paying toward FICA. Effectively saving you up to 15.3%. IRS rules stipulate you have to be paid a "reasonable" compensation, which most accountants…

i went through calculating it. that works only for narrow range of revenue/profits per year. if you max out fica taxes, you are at loss, since s-corp still pays its half of employee taxes. on top of it whole uncertainty of "right" amount of salary and possible audits made me steer away from converting my llc into s-corp. So while it might work for some - it is not a major "loophole" for top 0.1% (not even for top 1%…

It saves me accounting fees for the year ;). It comes out to just under $4k in savings for the year.

Not a major loophole, but its a nice little bonus.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#273

Post by TheAdamAndChe »

prostoalex wrote: post #266
TheAdamAndChe wrote: post #19

Earlier quoted context omitted.

Then why not try to structure our economy so that the lower and middle classes have more money to spend? It seems like that would be a pretty good way to get the economy moving more since giving poorer people money increases the velocity of money considerably[1]. [1] https://en.wikipedia.org/wiki/Velocity_of_money

Because that concept only works in an idyllic small town dominated by sole proprietors. The example they provide > Farmer spends $50 on tractor repair from mechanic. Mechanic buys $40 of corn from farmer. Mechanic spends $10 on barn cats from farmer. does not involve stuff made abroad, massive corporations with economies of scale eliminating the middleman, or foreign-owned entities. Most of that velocity will end up…

Then what do you recommend should be done? Because it should be obvious to most that increasing inequality, record-breaking corporate profits combined with a decreasing quality of life for most Americans outside of large cities is leading to a destabilization of our political system.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#274

Post by fencepost »

Legislators, the best investment money can buy.

It's amazing to witness the compound effects of interest^H^H^H^H^H^H^H^H long term changes in tax policy, particularly when the advantage becomes the new normal and is then the basis for further changes. How many people look at tax legislation based on how much better it is than 50 years ago?

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#275

Post by gozur88 »

danudey wrote: post #72
sharemywin wrote: post #41

Earlier quoted context omitted.

The problem is a strong multiparty system can get fringe elements in power. We also, need to rank candidates: https://www.scientificamerican.com/article/ranking-candidate...

> The problem is a strong multiparty system can get fringe elements in power. But as demonstrated, a two-party system can (will?) eventually lead to polarization, causing one of the only two options in the system to become a fringe element, and unfortunately the only option the people have now are the democrats or a party of right-wing extremists who are anti-woman, anti-poor, anti-education, anti-science, and white…

Neither party is a "fringe element" by definition. Half the people in the country can't be a "fringe".

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#276

Post by TheAdamAndChe »

arca_vorago wrote: post #207
danudey wrote: post #72

Earlier quoted context omitted.

> The problem is a strong multiparty system can get fringe elements in power. But as demonstrated, a two-party system can (will?) eventually lead to polarization, causing one of the only two options in the system to become a fringe element, and unfortunately the only option the people have now are the democrats or a party of right-wing extremists who are anti-woman, anti-poor, anti-education, anti-science, and white…

I don't have time to go into the length I want, but this comment is a perfect example of the myopia that polarizes peoples opinions. Both parties are equally part of the problem, and the people on both sides who fail to see that are also, including comments like yours. Please, don't try and turn this into a whataboutism and argue how much worse one party is, that's the trite and cliche response we always here that ne…

> Both parties are equally part of the problem, and the people on both sides who fail to see that are also, including comments like yours.

Be careful not to cause useless agurments. Both sides are at fault, of course, and it should be obvious that one side is currently more extreme than the other, just like the post above said. Such partisanship is a failure of the two-party political system that amplifies an us-vs-them mentality that people naturally get when under stress.

> this is why I support the unparty movement

I assume the unparty movement is a movement to completely remove parties, which wouldn't work in my opinion. It ignores the human tendency to form groups, and makes negotiations difficult if you don't have at least some centralization of power or method of organization. A multiparty system is a better balance IMO because it maintains natural human hierarchies while easing the adaptation of the government to changing demographics with different needs.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#277

Post by gozur88 »

kazagistar wrote: post #81
fortythirteen wrote: post #17

If capital gains taxes are raised, then someone who invests outside of a 401k or IRA gets double screwed.

Where does the double come from? Each dollar only gets taxed once... only the profit gets taxed when investing, not the principal, right?

The problem is inflation. Taxes aren't calculated on constant dollars, and it's really not reasonable to tax inflationary gains.

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#278

Post by Shikadi »

almonj wrote: post #189

Any person or group that manages to avoid paying taxes should be celebrated. The solution to this "problem" should not be that the wealthy pay more taxes, but that nobody should have to pay taxes since it is blatant theft that funds incompetent and evil people. Nothing that the government does is good. All money that goes to the government is either wasted or spent in ways that make society objectively worse. All fun…

Is this satire?

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#279

Post by walshemj »

inthewoods wrote: post #150
walshemj wrote: post #68

Earlier quoted context omitted.

If there is no difference between income and capital taxation people wont invest in companies. And companies wont last with out access to capital trust me I have chaired share holder meetings caused by lack of capital

You lost me as soon as you said "trust me."

so how many share holder meetings have you chaired trying to save a company from going bust?

Re: Why American Workers Pay Twice as Much in Taxes as Wealthy Investors

#280

Post by cylinder »

rhino369 wrote: post #134
cylinder wrote: post #6

The biggest lie is this nonsense about "double taxation," ie taxing money that's already been taxed is somehow unfair. So stupid. Capital gains tax shouldn't exist. It should all be one income tax. You can carve out discounts or exemptions for things like sale of PPOR, sale of family business up to a certain point, if you want.

You would have to start adjusting for inflation. If I bought an asset in 1980 and it just tracked inflation, you'd show a nominal 200% profit. But really, it's worth the same as before.

yes, but that's not really an issue. If it's not a real gain (inflation adjusted), then it's not income, and doesn't need to be taxed.
Post reply on HN