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

#161

Post by sgc » Mon, Oct 07, 2019, 4:29 PM UTC

greggman2 wrote: post #112

gnicholas wrote: post #79

Earlier quoted context omitted.

> 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?

buy real estate/business/other investment using leverage, and take deductions on the entire value if the tax code allows for it (which it often does). You just need to make enough to pay down the loan (increasing your equity) and break even on cash flow, and you are doing great. It helps keep rents lower since otherwise all landlords would need to cash flow. But it drives up property prices and thus the break even point due to higher demand, so maybe they offset each other - but how could we know?

The important take away here is that modern legislation dictates much of what our economy looks like. With other tax regulations we would invest completely differently, for better or for worse.

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

#162

Post by hogFeast » Mon, Oct 07, 2019, 4:29 PM UTC

wnissen wrote: post #133

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.

Probably comes from the Forbes 400 list, which has been published since 1982. Currently you need ~$2 billion in wealth to make that list. https://www.forbes.com/forbes-400/#123491f27e2f

I am not sure about that. Also, the Forbes list is mostly fictional. There are people who are worth vastly more than $2bn who are not on the list. There are people who probably don't have a positive net worth who are on the list.

Yes, it still sounds arbitrary and suspicious. Whiff of p-hackery.

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

#163

Post by cgag » Mon, Oct 07, 2019, 4:30 PM UTC

bogus_323423 wrote: post #91

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.

As always, nobody asks what we the people could do if we were just taxed at the same rate as these hated class enemies. We might spend it on things we actually want, which of course is to be prevented at all costs.

But then the government would have less money. What could be more important than the govt having more money?

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

#164

Post by skrebbel » Mon, Oct 07, 2019, 4:30 PM UTC

cpr wrote: post #75

hos234 wrote: post #34

Earlier 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.

I'm trying to deduct what you're implying, and as an armchair conspiracy theory fan¹, I love all of the options! This stuff is so nuts, it's lovely.

¹ I mean that I don't believe in the average conspiracy, but I love reading about them for the entertainment value

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

#165

Post by Reedx » Mon, Oct 07, 2019, 4:30 PM UTC

gorpovitch wrote: post #51

I'm tired to read articles written inside "Opinions" sections.(not that I necessarily disagree with it, you guys are explaining how this article is right or wrong better than me). I would really like (not intended at HN, it's a general crisis in my life) to read more articles about politics that are neutral and factually oriented. It seems like 90% of the political content I read twists facts and build cheap, cherry-…

Would love to see that as well. Unfortunately outrage generates a lot more clicks and social media engagement.

And politics are increasingly becoming intertwined with identity, which makes it even less cogent.

From Paul Graham's essay about this:

Politics, like religion, is a topic where there's no threshold of expertise for expressing an opinion. All you need is strong convictions.

...I think what religion and politics have in common is that they become part of people's identity, and people can never have a fruitful argument about something that's part of their identity. By definition they're partisan.

http://www.paulgraham.com/identity.html

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

#166

Post by refurb » Mon, Oct 07, 2019, 4:32 PM UTC

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.

If you look at countries with generous social programs, the tax rates for the middle class are very high. Like 50%.

Why? Sure the rich have a lot of money, but there aren’t that many of them.

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

#167

Post by zip1234 » Mon, Oct 07, 2019, 4:32 PM UTC

frenchyatwork wrote: post #135

zip1234 wrote: post #64

Earlier quoted context omitted.

It's not--the article is missing important aspects of tax such as deductions/exemptions and other forms of tax paid.

At some point, with the right deductions & exceptions, a tax that looks progressive on paper becomes flat/regressive in practice.

In general, I think a more complicated tax system favors those who can afford more accountants and lawyers.

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

#168

Post by IggleSniggle » Mon, Oct 07, 2019, 4:34 PM UTC

wffurr wrote: post #63

IggleSniggle wrote: post #28

Earlier quoted context omitted.

You do see it though. In your roads, your public libraries, educated working-class, your parks, your clean air, your safe-to-drink milk, etc etc etc

You also see it in the nuclear-powered aircraft carriers that drop bombs on civilians in other countries, the global surveillance system, military aid to despotic regimes with no regard to human rights, the border guards that imprison children and harass travelers.

A healthy democracy does require an engaged, educated voting populace to avoid being captured. I think the USA has been largely captured by the merchant kings who focus the populous not on their ability to change the nations trajectory, but instead on meaningless distractions.

Did you hear about the anti-gun nuns who bought a significant piece of ownership in the gun manufacturers? They have voting rights in those companies, and the manufacturers are slowly being forced to answer to them.

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

#169

Post by biddit » Mon, Oct 07, 2019, 4:35 PM UTC

throwing838383 wrote: post #95

It'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 take two issues with your reasoning around capital gains rates. One is on fairness, and one is on the systematic result.

With regards to fairness, it is inherently unfair to tax someone making $120k/year working a desk job at a higher effective rate someone who inherits $100M and makes all of their income from long term capital gains. The "2nd round of taxation" line are mental gymnastics. It's income. It's just the "haves" trying to push the rules further in their favor.

With regards to systematic results, taxing capital gains at a lower rate than other earned income increases the compound effect of wealth disparity. Those with wealth, whether earned or inherited, are able to keep more of it, than those without. The resulting extreme disparity is fundamentally unhealthy to our society. We are witnessing the symptoms of it now in the rise of nationalist and socialist movements, as the bottom half of this country is looking around wondering why the system isnt working for them.

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

#170

Post by IggleSniggle » Mon, Oct 07, 2019, 4:35 PM UTC

g2ah5z wrote: post #158

wffurr wrote: post #63

Earlier quoted context omitted.

You also see it in the nuclear-powered aircraft carriers that drop bombs on civilians in other countries, the global surveillance system, military aid to despotic regimes with no regard to human rights, the border guards that imprison children and harass travelers.

You also see it in crumbling roads, ancient subway systems, shitty public schools, dumb regulations that make the market less competitive, "affordable" housing initiatives that make housing less affordable, pointless subsidies for farmers, and unsustainable pension funds.

This is true. It requires much more from the general populous than just the cash. Few private citizen wants to invest the time to fix the allocation. It’s a classic free rider problem.