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

#321

Post by secabeen » Mon, Oct 07, 2019, 5:58 PM UTC

hogFeast wrote: post #66

Oh boy, I can see how this ends. The US already has a very progressive system. The aim here appears to be: increase govt spending. Okay, the only way to do that (looking at other countries that have high shares of govt spending to GDP) is to reduce, not increase, the progressiveness of the tax system. The quantum of "taxes were higher in the past" is utterly wrong. They were marginally higher in the past but not by m…

>The US already has a very progressive system.

How can this be the case if the taxes actually paid (which is what the chart shows), is largely flat across income bands, between about 22 and 28%? Sure, between 1950 and 1980, the system was progressive, but the actual percentage paid by the wealthy has come down over the past 30 years, it's now much much less progressive than it was 50-70 years ago.

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

#322

Post by rayiner » Mon, Oct 07, 2019, 5:58 PM UTC

commandlinefan wrote: post #214

dmix wrote: post #141

Earlier quoted context omitted.

But when the politicians use this stuff to change the law it will most certainly be the first two (expanded far more broadly) who will be targeted. They always say hand wavy stuff about billionaires whenever they get asked about paying for grand projects. But we’ve all seen how that works out in real life every time. I highly doubt that sort of categorization will ever carry over when it matters.

You’re being wildly optimistic if you think the first two (the top 1%) will ever be meaningfully impacted by any tax law change. There’s a reason the super rich all line up in support of “higher taxes”: they know that these policies always affect the middle class and never touch the upper class. That makes it harder for anybody else to break through from middle class to upper class, which is exactly what the (upper c…

You’ve got it exactly backward. Taxes on the top 1% aren’t dramatically different in the US than in say Germany or the Netherlands. It’s taxes in the middle class that are dramatically lower.

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

#323

Post by DesiLurker » Mon, Oct 07, 2019, 6:00 PM UTC

gnicholas wrote: post #198

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…

disagree with both the points (inflation indexing & double taxation). when vast majority of the other income is for regular people is not 'corrected' for inflation then there no reason to do it just for investments. this produces a systematic tilting towards 'invested money' & over long periods that gives them huge advantage (e.g.. last 40 years). inflation is an emergent property of the monetary system we have, giving one group of people protection from it just puts thumb on the scale for them.

Double taxation is a standard BS argument too, the whole point of taxation is that govt 'deserves' a cut of the transaction for providing a safe stable environment for economic activity. this whole notion that the moment you got yours, no-one is allowed to touch it anymore is BS, its true for other activities we engage in like sales tax & getting help then why should value gained in stock market be absolved from it?

any activity that we choose to tax less is essentially being promoted so its no wonder that after financial crisis (& even now) most of the 'new money' went back in stock market instead of the real economy. this needs to end. if anything cr*p like HFT should be taxed more to ensure there is less incentive for that kind of skimming over the top.

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

#324

Post by Retric » Mon, Oct 07, 2019, 6:01 PM UTC

koheripbal wrote: post #313

rc_kas wrote: post #144

Earlier quoted context omitted.

Lower tax rate is indeed my definition of lower taxes. A lower tax payment is a different thing.

The problem is that "tax rate" is an ambiguous term because different kinds of income at taxed at different rates. So, for example, if someone makes most of their money on dividends, then they pay capital gains tax, and it appears like they are unfairly paying a lower rate than everyone else. ...but that's not a fair comparison because it's a different sort of income, with a VASTLY riskier risk profile. Taxing it at…

In the end the real tax rate is simply government spending as a percentage of GDP. Everything else is just shifting around who pays what and when not what the average ends up as. In the US that’s 41.6 percent GDP which is in line with Canada at 42%: https://en.m.wikipedia.org/wiki/Government_spending#As_a_per...

PS: Either lower taxes on capital gains or allowing people to deduct losses is reasonable in the name of risk, but we do both.

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

#325

Post by rhacker » Mon, Oct 07, 2019, 6:01 PM UTC

secabeen wrote: post #311

swebs wrote: post #159

Earlier quoted context omitted.

Maybe its time we start considering the Fair Tax plan again. https://en.wikipedia.org/wiki/FairTax

Why do we need the fair tax plan to create a flat rate, when the graph in this chart shows that the rate is already pretty flat? Today, most people pay between 22 and 28% taxes.

And the wealthy have moved their income address to a tax free state, saving them an additional 6-12%.

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

#326

Post by dev_dull » Mon, Oct 07, 2019, 6:03 PM UTC

> The overall tax rate on the richest 400 households last year was only 23 percent, meaning that their combined tax payments equaled less than one quarter of their total income. This overall rate was 70 percent in 1950 and 47 percent in 1980.

No it wasn’t. Is there even one historical example of someone paying 70% of their income as tax in 1950? Or was that simply the maximum theoretical income tax rate? That was just the maximum. Nobody paid that so it’s meaningless to compare these two numbers.

This looks like another confirmation-bias article to me.

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

#327

Post by rayiner » Mon, Oct 07, 2019, 6:04 PM UTC

coldtea wrote: post #77

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…

Is the purpose of taxes to fund the government or punish the rich? Because if it’s the former, then looking at the share of taxes paid by billionaires is highly relevant.

In the US, billionaires make just 1.3% of all income. 80% of income is earned by the bottom 99%. Confiscatory taxes would definitely achieve the second purpose, punishing the rich, but would have little effect on how much taxes ordinary people would have to pay to fund government.

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

#328

Post by ChrisLomont » Mon, Oct 07, 2019, 6:05 PM UTC

folbec wrote: post #40

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…

- They are NOT speaking of the 1% (such as medical professional or high income technical professionals) - They are NOT speaking of the 0.1 %. - They are speaking of the 0.01%. One person out of 10000. Not multimillionaires. 100 millionaires and billionaires. There is a very good reason why the tax foundating speaks of the 1% and not of the 0.1% or 0.01% : it is usefull to protect billionaires.

>it is usefull to protect billionaires

Income taxes aren't on wealth; they're on income.

Billionaires usually own most value in stock (and usually in a company they own or founded). The majority of the Forbes 400 are there due to founding a company that was found so useful to others, that the owner is worth billions.

When they sell ownership they get taxed at very high rates, and this is after their company being taxed (which is simply an income tax on owners, but called corporate tax). If they give the ownership to others (like children), they get taxed.

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

#329

Post by maccard » Mon, Oct 07, 2019, 6:05 PM UTC

0x0aff374668 wrote: post #240

darawk wrote: post #225

Earlier quoted context omitted.

> The USA has a large number of regressive taxes, which tax the poor more heavily than the rich. These have been steadily expanded. And it has one, only one, progressive tax - the federal (not state) income tax - which has been steadily made less progressive in recent years to the point where overall taxation is at best flat and more likely slightly regressive. Citation needed. Saying the US has "only one" progressiv…

> And that only increases as you get richer. Correct. Which is why income is such a miniscule fraction of the 1% (and above's) earnings. It's all out there in the open. Pick any CEO in the top-100 corporations. Look at their income. Then look at their overall earnings. The bulk falls under capital gains due to stock. Then there is deferred compensation, where taxes are lowered even MORE if you agree to postpone being…

> Pick any CEO in the top-100 corporations. Look at their income. Then look at their overall earnings.

Warren Buffet is probably the easiest person to look at here. A quick google says that [0] he made $11m in 2016, and on that he paid $1.85m in federal income tax, and he claims a large portion of the remainder was paid in state tax. Even ignoring his state taxes, yes he paid a marginal rate of 16%, but he still paid more in income tax than the average 1%er's salary. I'm certainly not a right wing advocate, but the spin associated with the "rich are not paying enough tax" doesn't really help the conversation much.

[0] https://fortune.com/2016/10/10/presidential-debate-donald-tr...

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

#330

Post by javagram » Mon, Oct 07, 2019, 6:06 PM UTC

gnicholas wrote: post #260

dragonwriter wrote: post #232

Earlier quoted context omitted.

> I completely agree that we should inflation-index assets for which electronic purchase/sale records readily available (stock purchased through brokerages). How are electronic records relevant? The information needed is expected, whether records or electronic or not, when doing capital gains now, so there's non rational need for electronic records. > For other types of assets, the inflation rationale is still a dece…

How do you prove how long you've held an asset, so the appropriate inflation adjustment can be done?

Don’t you already have to have a record of the cost basis of the asset to calculate capital gains?

So you already need a receipt or some record with the original purchase price, which probably has a time stamp on it.