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

nytimes.com

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

#191

Post by throwawaysea »

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

The Pro Publica link you provided does not show they "audit the poor instead". It shows that the IRS audits poor and rich at the same rates. Unfortunately it seems Pro Publica is succumbing to the same forces as other journalistic outlets and has started to engage in sensationalist headlines.

Here is their title verbatim: > IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor

Here is the article's first sentence, verbatim: > The IRS audits the working poor at about the same rate as the wealthiest 1%.

They go on to say this: > ProPublica reported the disproportionate audit focus on lower-income families in April.

Per their own sentence, the poor and rich are audited at the same rate yet they go on to label this "disproportionate". That makes no sense.

Furthermore, they have defined rich and poor in arbitrary ways - the top 1% of taxpayers by income versus EITC recipients. The latter group is 25 million people - 7.6% of the US. So per capita, the "rich" are getting audited more frequently.

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

#192

Post by gok »

hn_throwaway_99 wrote: post #152
gok wrote: post #124

It's hard to figure out how they got that chart that I've now seen pasted about a dozen times around social media. They cite an unpublished book. But it looks comically wrong. The bottom decile's tax rate is nowhere near 25%. The entire bottom quintile's tax rate is around 3%, and less than 2% for federal taxes. Perhaps the book plays some games with what constitute a "tax rate?" For example, if you spend double your…

You should read the article before being so rudely dismissive (and comically wrong). He clearly states that the graph includes total tax burden, including payroll taxes, which is why the bottom quintile's tax rate is higher.

Payroll taxes are included in the total federal tax rate of around 2%.

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

#194

Post by SuoDuanDao »

maximente wrote: post #72
ggreer wrote: post #36

Earlier quoted context omitted.

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.

Money is nearly always enough to get someone through an immigration system. Even if immigrant X did avoid taxes at home and can be relied upon to do the same, the wealth they're bringing over will typically end up benefiting the new country's economy somehow. Canada's made a strategy of exactly this.

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

#195

Post by rolltiide »

eloisant wrote: post #119
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 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?

The crux of your observation is "fairness"

The crux of our observation is that "we're all getting hosed and you just want to ensure we are getting hosed equally?"

these things can't happen in a vacuum, no matter how much you respect something with the label 'government' on it you do have to factor in what its doing with its passive funding source. Even this article correlates tax policy that benefited the rich with low GDP growth, suggesting that the government would have been a better steward of additional money. It should consider other revenue regimes.

Capital tax is only perpetuated by inequality, as it is a stretch of taxation theory and a mere convenience. The state says "so you want us to take the money now, not gonna say no!" the non-capital class cheers

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

#196

Post by notatoad »

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.

If they were going to fly a plane into the pentagon to cover up 2.3T in missing funds, why would they bother to announce the shortfall beforehand?

You don't orchestrate an elaborate cover-up, and also publicly announce the thing you're trying to cover up.

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

#197

Post by rayiner »

solotronics wrote: post #76
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"

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.

Without some concrete statistics, it’s hard to analyze that. A non-trivial number of officers have family money.

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

#198

Post by gnicholas »

A couple of points regarding the lower rate of taxation for capital gains:

• Capital gains are not inflation-indexed, which is one reason to have a lower rate. Consider three individuals:

* Person A earned $100,000 working at BigCo in 2019

* Person B sold shares in 2019 that were purchased in 2017, for a (LTCG) gain of $100,000

* Person C sold shares in 2019 that were purchased in 1965, for a (LTCG) gain of $100,000

There's essentially no inflation to account for in cases A and B, since all of the relevant transactions happened relatively recently. But what about Person C? The real value of her investment has not increased by $100,000 — it's much less than that because of inflation. So one argument for a lower capital gains rate is to be fairer to people who have held investments a long time.

• Investments are more mobile than wage earners. This is just a fact about the world: I can invest in a different country more easily than I can move to a different country, which leads to "tax competition" for investment income moreso than for wage income. However, this doesn't mean much in the US, where we tax worldwide income (so it doesn't matter where you earn investment income, for the most part).

• Capital gains is "double taxation". It is true that if you tax capital, that is likely post-tax money. That is, it was earned at some time in the past and tax was paid at that time.

There is a notable exception, however: basis step-up at death (inherited assets don't trigger capital gains when passed to heirs. If the total estate is under the current limit, I believe around $10M, then no tax would be paid at all). There are other tax preferences like the primary residence $500k exemption, qualified small business stock exclusion (look it up, startup founders!) that allow people to realize lots of gains without paying any/full tax. There are also less-sexy things like muni bonds.

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

#199

Post by danans »

refurb wrote: post #118
danans wrote: post #108

Earlier quoted context omitted.

> 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.

I agree the title is click baity, but the ultra wealthy do pay a lower effective tax rate than me, and I'm probably in the top 10% of income percentile.

But the observations of the article itself check out. The tax system has gotten radically less progressive over the last 50 years. The argument is over whether or not it should be made more or less progressive given current realities.

People can differ in their opinions on that, but the historical trend is clear as day.

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

#200

Post by g2ah5z »

IggleSniggle wrote: post #168
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.

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 co…

There's a very simple solution to making the government less susceptible to regulatory capture - make it as small as possible.
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