If you looking at tax rate. Of course, high earner AKA "the rich" pay lower. If you look at the dollars, then the rich pay bulk of the tax.
For the first time on record, the 400 wealthiest Americans paid a lower tax rate
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Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#172Earlier quoted context omitted.
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
Yeah but that doesn't include their kickbacks, consulting fees, etc. Can active duty generals sit on the board of directors of companies? I seem to remember a startup I worked at had one either on the board or heavily involved as a consultant but I can't remember if he was active duty at the time.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#173It is absolutely intolerable that the US tax system is now flat and even slightly regressive.
Why?
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#174Earlier quoted context omitted.
They would just renounce their US citizenship and move to a country with lower taxes. That’s what Eduardo Saverin did.
They didn't do that in the 1950s, though. It does address an important point, though: should you pay tax based on where you live, or on where your income comes from? Governments invest a lot in their country, their citizens, education, a healthy market, etc. For foreign companies to profit from that healthy market but not pay taxes there, seems wrong. Similarly, for people to work in a healthy labour market but not p…
> They didn't do that in the 1950s, though.
In the 1950s there weren't any alternatives to the US. Europe and Asia were rebuilding from WWII. Central and South America weren't nearly as developed as today. Places like Singapore, Taiwan, and Korea were extremely poor. The english language wasn't as popular internationally. Intercontinental communication was expensive and low bandwidth. Travel was much more expensive. These communication and travel costs made investing in foreign ventures was a very risky endeavor. Nowadays, it costs nothing to video chat with people on the opposite side of the planet. And foreign investments are no longer the crapshoot that they used to be.
It's much, much easier to live and work in a foreign country today. And it's only getting easier as technology improves.
> Governments invest a lot in their country, their citizens, education, a healthy market, etc.
Do they? I find that most people are successful despite governments, not because of them. For example: One of the schools I went to as a child was structurally condemned while I attended it. The water wasn't fluoridated, so my parents had to pay for fluoride pills to protect my teeth. I don't feel beholden to the government I live under anymore than I feel beholden to my employer. My employer has taught me valuable skills, invested in equipment, training, and pays for health care. Does that mean I should pay dividends to them after I leave? I don't think so.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#175We should tax wealth not income. Yes I know it's hard to calculate. Doesn't mean we shouldn't do it.
Also financial penalties should be percentages of wealth, not fixed dollar amounts (perhaps with a floor). E.g. fine for littering is 1% wealth.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#176Earlier 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.
I know a marine general (just retired) and he drives a ten year old Ford Escape. Generals are paid well relative to the rest of the military but definitely are not paid obscene amounts.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#177Earlier quoted context omitted.
I didn't get that at all. Can you explain?
Generals do not earn millions in salary. To afford millions worth of automobiles, the general must have misappropriated funds.
> To afford millions worth of automobiles, the general must have misappropriated funds.
Or have, or at least have once had, a lucrative side business (military personnel can do this, legally.)
Or have inherited money.
Or have a spouse with a greater income or inheritance.
Or restore cars, such that the market value of their vehicles vastly exceeds the purchase price.
Or purchase cars that have significantly appreciated in value for other reasons (lots of high-end luxury cars that are limited run not only are pricey but limit sales to selected buyers, and the market value of the cars is almost immediately much higher than the purchase price and appreciates rapidly.)
Or a combination of the above.
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#178Earlier 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?
You buy an alpaca for $x,000 and declare yourself a breeder.
You can depreciate the cost of the alpaca much more quickly than most assets. You can also depreciate related assets - barns, fencing, farm machinery - even if you own these already, as long as you weren't previously using them for business purposes.
You can also deduct your losses against capital gains made elsewhere. And potentially save on property taxes, if your property becomes "agricultural".
Essentially there's a difference between an accounting loss created by depreciation and creative categorisation of spending and/or use of legitimate tax breaks, and a genuine out-of-pocket spending loss created by losing money on an "investment".
Your taxes are calculated on your accounting losses, not on your spending losses. The difference can be written off against taxes due on other income, reducing your final tax bill to zero - without having to spend the full "loss".
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#179I'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-…
There is no canonical neutral in politics. “Neutral” is just code for “stuff I agree with”. You don’t really want neutral content, you just want content that validates your existing beliefs.
The article lists a bunch of facts and numbers, why do you consider it “non-factual”?
Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate
#180What 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…
> 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.
Read the article again carefully, paying attention to the interactive graph, you will notice that it is discussing the change in total effective tax rate, which is why the total tax rate for the super wealthy in 1950 was 70% when the top marginal rate was 91%. Still massively higher than today's effective individual tax rates on the wealthiest.
> 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%.
That's not the effective individual tax rate at all. That's burden of tax revenue by population income percentile. You appear to be mixing terms.