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.
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For the first time on record, the 400 wealthiest Americans paid a lower tax rate
111–120 of 504 posts
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#112What 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 t…
> since the capital invested was smaller than the tax losses generate
Can you give an example of how that works? As a non-rich person if I invest $100 it seems like the largest taxes I can pay is $100 (100% tax). How do I generate > $100 tax loss for a $100 investment?
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#113Earlier quoted context omitted.
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.
As though the US government would have to orchestrate several terrorist attacks just to obscure some bad finances which are basically meaningless anyway.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#114Earlier quoted context omitted.
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.
Each general is the CEO of a multi-thousand person organization. Whether CEO pay is reasonable is a different discussion, but it would be surprising if generals were not paid well.
Generals are not paid that well, at least not compared to a Silicon Valley software engineer's salary. I think they make ~$200k (https://militarypay.defense.gov/Portals/3/Documents/ActiveDu...), so if any of them are obscenely wealthy, best guess is they make a lot of money off of "speaking events" like any other person with political connections.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#115That 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
Would it help to start a fund specific to this purpose? I'd imagine there would be significant ROI on it, in the big picture sense. Relevant Article: https://www.citylab.com/life/2017/09/the-rise-of-public-sect...
I love the idea but the rich would lobby so hard against it like it's the end of the world.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#116What 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…
I’m not sure what point you’re trying to make, but it doesn’t seem to contradict my statement that “no, the rich don’t pay less taxes than the poor”.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#117Earlier quoted context omitted.
There were a lot more exemptions, deductions and credits back then so the effective tax rate was not even close to 70% and was not much higher than it is today. Not sure why this article didn't mention this at all but I can guess, coming from the New York Times and all.
Of course it's true that the effective rate was less than 70% (that was the top _marginal_ rate, just like 37% is the top marginal rate today); however I am curious to hear about the exemptions etc for rich people - my understanding is that these have gotten larger and more complex over time so it's surprising to me to hear that there were more loopholes in the 50s than today. Is there a source for this?
One used to be able to deduct any interest, not just mortgage interest. There was a sweetheart deal for oil production, to the point that 50s Hollywood actors would form corporations that mixed film production with oil business. Capital gains were quasi indexed to inflation in that your first 50% wasn’t subject to gains taxes.
The whole point of the changes in 86 (aka Reagan tax cuts) was to remove all those deductions/loopholes/shelters in return for a lower nameplate rate. The goal was to clear out bullshit stuff people were doing for tax reasons and replace it with useful economic activity.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#118Earlier quoted context omitted.
I agree, but the parent is responding to the article’s claim that the rich pay less. This isn’t in support of the parent’s comment, just trying to clarify the conversation and root out accidental straw men.
> the parent is responding to the article’s claim that the rich pay less. The article appears to be discussing the individual tax rates paid by the wealthiest, not the percentage of total tax paid. Those are two different things. The GP appears to have introduced the latter statistic, as often happens in this debate, to distract from the actual statistic under discussion.
I stated tax rate too. The bottom 50% effective tax rate is almost 1/10th of what the top 1%’s is.
Therefore, the headline of the article “the rich pay less than than you” is pretty clearly false.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#119It's misleading because the rich that they're talking about already paid a much higher rate when they originally got the money in earnings. It's just the 2nd round of taxation: the capital gains which is lower, as it should be. And let's not forget, taxes are extremely high on everyone. The US Govt spends 38% of all US GDP, currently (recently above 40%!). https://tradingeconomics.com/united-states/government-spendi.…
I don't see why capital gains should be taxed lower.
Money you get from working, from your blood and your sweat should be heavily taxed, but money you're earning just by already having money (whether it's from your work, inherited, donated from family members) shouldn't be taxed as well?
What's the logic here?
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#120Earlier quoted context omitted.
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.
Each general is the CEO of a multi-thousand person organization. Whether CEO pay is reasonable is a different discussion, but it would be surprising if generals were not paid well.
According to [0], a major general (O-8) makes something like $160k, depending on years of experience. I'm sure there's additional hazard pay and such, but you wouldn't expect a general to be making millions through their core pay.
[0]: https://www.navycs.com/charts/2019-military-pay-chart.html