For the first time on record, the 400 wealthiest Americans paid a lower tax rate • Hacker News Board

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#71

Post by namdnay » Mon, Oct 07, 2019, 3:46 PM UTC

chriogenix wrote: post #42

throwaway13337 wrote: post #21

The argument for corporate income tax is misplaced. Many socialist countries have a low (or no) corporate income tax and that's goods. A country shouldn't tax the things it would like to encourage. In this case, that companies re-invest and not pull the funds out to pay investors. Capital gains tax should probably be mentioned. Why is it a much lower rate than income tax? Why not talk about that? Strange also that th…

basically this. in these mostly socialist countries, the top income bracket starts much much lower than in the US. these countries tax the middle class and consumption with VAT ranging from 15-21% on consumption. in spain the top bracket starts around 60,000 euros a year and its 45% not including local tax. these policies and similar ones in other countries in effect keep the rich rich and make it much, much harder f…

I agree that corporation taxes are a bad idea, however I don't understand your argument about the tax rates in spain. How do they "keep the rich rich and make it much, much harder for the poor/middle class to move up"? You said yourself that the marginal income above 60k is taxed at 45% - that's clearly heavily taxing the rich

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#72

Post by maximente » Mon, Oct 07, 2019, 3:46 PM UTC

ggreer wrote: post #36

Synaesthesia wrote: post #5

There’s so much that could be done if we taxed the ultra rich and huge corporations just a little bit more, and more effectively.

They would just renounce their US citizenship and move to a country with lower taxes. That’s what Eduardo Saverin did.

yeah, but there's no way he's not gray/blacklisted from entry on his new passport with that sort of outstanding tax bill.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#73

Post by [deleted] » Mon, Oct 07, 2019, 3:47 PM UTC

makomk wrote: post #48

tartoran wrote: post #3

That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705

Careful. The two articles rely on vastly different cherry-picked definitions of who counts as rich, and neither claim is even remotely true anymore if you use the other definition. The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. This NYT article on the other hand picks out the top 400, who apparently pay lower taxes but are much more aggress…

[deleted]

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#74

Post by jtms » Mon, Oct 07, 2019, 3:47 PM UTC

throwaway13337 wrote: post #21

The argument for corporate income tax is misplaced. Many socialist countries have a low (or no) corporate income tax and that's goods. A country shouldn't tax the things it would like to encourage. In this case, that companies re-invest and not pull the funds out to pay investors. Capital gains tax should probably be mentioned. Why is it a much lower rate than income tax? Why not talk about that? Strange also that th…

These days it’s either write at least some clickbait outrage pieces or go broke. Journalism as we used to know it is mostly dead.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#75

Post by cpr » Mon, Oct 07, 2019, 3:48 PM UTC

hos234 wrote: post #34

tartoran wrote: post #3

That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705

Yup. That's the strategy the Military uses - https://www.rollingstone.com/politics/politics-features/pent... "At a cost of $400 million, some 1,200 auditors charged into the jungle of military finance, but returned in defeat. They were unable to pass the Pentagon or flunk it. They could only offer no opinion, explaining the military’s empire of hundreds of acronymic accounting silos was too illogical to penetrate"

Remember when Rumsfeld announced that 2.3T USD were missing from the military? https://www.city-journal.org/html/americas-missing-money-157...

Yeah, nor do most people.

The date he announced that? September 10, 2001. The section of the Pentagon hit? The accounting wing with all the records.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#76

Post by solotronics » Mon, Oct 07, 2019, 3:49 PM UTC

hos234 wrote: post #34

tartoran wrote: post #3

That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705

Yup. That's the strategy the Military uses - https://www.rollingstone.com/politics/politics-features/pent... "At a cost of $400 million, some 1,200 auditors charged into the jungle of military finance, but returned in defeat. They were unable to pass the Pentagon or flunk it. They could only offer no opinion, explaining the military’s empire of hundreds of acronymic accounting silos was too illogical to penetrate"

This is just a single example but it was eye opening when my friend told me about one of his clients. He is the chief mechanic at an exotic car dealership and one of their biggest customers is an active duty general in the Marines, this guy has millions of USD worth of cars.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#77

Post by coldtea » Mon, Oct 07, 2019, 3:49 PM UTC

refurb wrote: post #19

What a shit article. It's well known that despite the high marginal tax rates of the past, very few people ever paid those. Deductions abound that have since been eliminated. What you should really look at is real effective tax rates by income level.[1] What you'll find is that the top 1% make 19% of all income, but pay 37% of all taxes, with an average tax rate of 27%. The bottom 50% earn 11% of all income, but only…

If society was a rich person with 1 billion paying $1M in taxes, and a regular person with $50K income paying $10K in taxes, the rich person would have paid nearly 99% of all taxes.

And yet, they would have paid a pittance compared to their income (not to mention wealth), and it would absolutely no impact on their purchasing power or lifestyle (where the 10K of the 50K could make the difference between having savings, or having a health operation, or sending the kids to college, and many other important things).

That's how irrelevant and unilluminating is this kind of metric...

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#78

Post by vonmoltke » Mon, Oct 07, 2019, 3:50 PM UTC

sweeneyrod wrote: post #46

hogFeast wrote: post #27

Earlier quoted context omitted.

Yes, there is no explanation of exactly how that number (400) was chosen. Given that the US is widely acknowledged to be one of the most progressive tax systems in the world, the burden of proof required here is far higher than the article attempts.

Widely known by whom? I'm not sure how that could be true even in theory; there is no universally agreed on definition of "progressive".

> there is no universally agreed on definition of "progressive"

"Progressive" is being used here as a technical term with a specific, greed-upon definition[1], not as a description for the leftist political movement that shares the term.

[1] https://en.wikipedia.org/wiki/Progressive_tax

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#79

Post by gnicholas » Mon, Oct 07, 2019, 3:50 PM UTC

refurb wrote: post #19

What a shit article. It's well known that despite the high marginal tax rates of the past, very few people ever paid those. Deductions abound that have since been eliminated. What you should really look at is real effective tax rates by income level.[1] What you'll find is that the top 1% make 19% of all income, but pay 37% of all taxes, with an average tax rate of 27%. The bottom 50% earn 11% of all income, but only…

> Deductions abound that have since been eliminated.

Yep, and those "deductions" are now referred to as "tax shelters" (post-1986). Basically, high-earners could invest a relatively small amount of capital into a "business" that was certain to generate large tax losses. These were things like llama farms or avocado farms. The entire purpose was to generate deductions, since the capital invested was smaller than the tax losses generated. The "investor" literally didn't care if he ever got his money back, since the deductions alone were worth the "investment".

Pretty much no one paid the highest rates of the past, because people who have that much money are well-advised, and it was very easy to avoid having that much taxable income.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#80

Post by elldoubleyew » Mon, Oct 07, 2019, 3:51 PM UTC

SmellyGeekBoy wrote: post #54

Synaesthesia wrote: post #5

There’s so much that could be done if we taxed the ultra rich and huge corporations just a little bit more, and more effectively.

The "more effectively" part is important here. Plenty of people will happily vote for increased corporation tax here in the UK to stick it to those evil billionaires and just end up ruining small businesses in the process (while of course the likes of Amazon, Google and Starbucks carry on paying essentially nothing).

So what's the problem with taxing them for egregiously more but ineffectively? What if we kept the current effectiveness but imposed, say, a 120% rate on the ultra-wealthy? Maybe they would end up needing to pay 40% of this but at least it would be a lot better than we are doing now.