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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

#341

Post by xyzzyz »

gnicholas wrote: post #278
0x0aff374668 wrote: post #245

Earlier quoted context omitted.

"Double taxation" For such an in depth example you really missed this. I make $100,000 in year X. That covers two brackets, and my effective rate is, say, 25% federal. SO I have 75k left over. I invest 5k. It doubles to 10k. I'm then taxed on the 5k I earned. Not the 5k I invested. But do go on about double taxation.

> For such an in depth example you really missed this. Like many HNers, I'm on here in my spare time, while not running my startup or caring for my kids. Please forgive my not including every argument and counter-argument here. But to reply, if you bought stock on the stock market, then yeah that is double taxed because the corporation also pays tax on their corporate income. We could get into that whole can of worms…

Yes, and if you buy a can of Coke at the store with the proceeds of the sale, you're then triple taxed when you pay sales tax, and then the business owner is quadruple-taxed when he books some part of it as a profit, just like his supplier is quintuple-taxed when he is paid by store owner for the Coke supply, and so on, and so on.

Clearly, this is absurd: it is universally recognized that transactions often create tax events. There's no "double taxation" rule that doesn't allow "the same money" to be taxed twice, it's just we don't tax the same transaction twice.

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

#342

Post by saalweachter »

dr_dshiv wrote: post #255

>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. I thought those rates referred to income made above different cut offs, not the overall amount of money made...

In 1950, the top marginal tax rate was 91% on income over ~$2M in 2013 dollars.

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

#343

Post by kaibee »

dexterdog wrote: post #304
kaibee wrote: post #185

Earlier quoted context omitted.

I think there is a reasonably balance to be found somewhere between not being able to give your friend 5$ and being able to make everyone even tangentially related to you into billionaires that do nothing but collect and spend the interest on their wealth.

Bezos is with about $110B. He is "tangentially related" to far more than 110 people. There is a solid track record of inheritors of massive wealth pissing it all away in a generation or two so you don't have to worry too much about it.

> There is a solid track record of inheritors of massive wealth pissing it all away in a generation or two so you don't have to worry too much about it.

I don't think wasting billions of dollars is any better.

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

#344

Post by dragonwriter »

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?

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

The same way you prove cost basis; if you have adequate records of one, you’ll pretty invariably have both.

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

#346

Post by mcguire »

darawk wrote: post #225
jellicle wrote: post #207

Earlier quoted context omitted.

> The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. But they don't. That's the point. Your conventional wisdom is wrong. 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 bee…

> 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…

There are also:

* FICA, which is strongly regressive at the higher end.

* Sales taxes, which are also strongly regressive since (citation needed) the poor likely pay more of their income on taxable goods. ("There's only so much filet mignon you can eat," according to a government professor I once had.)

* Property taxes.

* Fees.

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

#347

Post by troupe »

mLuby wrote: post #317
troupe wrote: post #266

Earlier quoted context omitted.

Lets say you save $10,000 and invest it in a stock. It then goes up to $20,000. You are happy to pay taxes on that amount even though next year it might go back down again?

Nobody is happy to pay taxes, but yes. Year 1: pay taxes on $10K in savings, $100K house. Year 2: pay taxes on $10K in stocks, $80K house. Year 3: pay taxes on $20K in stocks, $120K house. Year 4: pay taxes on $0 in stocks, $100K house.

So year 4 your stock goes back down to $10k or even goes to $0 and you'd be fine with having paid taxes the wealth you had even though it wasn't actually realized as money?

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

#348

Post by TheSpiceIsLife »

brightball wrote: post #320
joshuamorton wrote: post #263

Earlier quoted context omitted.

No, according to this article, the 1% continue to pay a larger percent of their income. It is only once you move into the 1% of the 1% that the rate again decreases.

I’ll go ahead and preface this by saying “I don’t know” but for people at the very top, are there undisclosed tax incentives to encourage them to spend their money? By undisclosed I mean negotiated. When you are trying to get somebody to spend a ton of money to open a business, donate to charity, bring a bunch of jobs, etc is there a negotiation that happens to provide lower tax options to encourage that spending?

Evidently, as evidenced by every large spending project since the dawn of time (probably?).

As I posted elsewhere in these comments:

Everyone expects a discount on goods and services when purchase in bulk.

Why should taxes be any different?

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

#349

Post by coldtea »

rayiner wrote: post #327
coldtea wrote: post #77

Earlier quoted context omitted.

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…

>Is the purpose of taxes to fund the government or punish the rich?

Obviously it should do both.

Joking aside, if the purpose is to fund the government as good as you can (that is, societies central pool of resource to be able to produce democratically controlled and publicly available "nice stuff") then it makes sense to take as much as you can from the rich (which can afford it) and a normal amount from the average/poor (which can't afford to pay much).

A tax could be:

1) None. Then a country wouldn't be able to maintain e.g. an army or basic infrastructure, and either the country would be at the mercy of other countries that can, or the majority would be at the mercy of moguls that can afford to pay for those things. Some third world places are close to the latter.

2) Flat ($10K for a lawyer making $2M/year, $10K for a single mother of two juggling 2 jobs and making $40K). Most would agree that's bad.

3) Fixed ratio (e.g. 30% of said lawyer's income, 30% of the income of the single mother of two juggling two jobs). The lawyer is then left with $1.4M, more than enough to live in luxury, pander his kids etc, buy 4 new cars per year, etc, whereas the mother can barely survive and do basic spending or cover an emergency with the $28K that remain. Not sure how you find it, not a big fan.

4) Progressive scale. The government gets more from the lawyer (and as people getting richer) and not a fixed ratio. The reach still keep more than enough to do whatever BS they want (e.g. $2M - 60% is still 800K/year). Plus most of their money is not in income but wealth, and the ultra rich have already hid it through 2000 schemes.

>In the US, billionaires make just 1.3% of all income.

Property beyond a certain level should be taxed way worse than income. It's just hogging resources from society and giving to much power to money-based, as opposed to bloodline based, neo-feudal lords. Let's throw that majority of the wealth that they own into collective infrastructure for that "bottom 99%" (which, after all, earns 80% of income and pays more taxes).

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

#350

Post by decoyworker »

dexterdog wrote: post #137
iamgopal wrote: post #101

Their money working for them. I think this is as it should be. But, all kind of inheritance should be banned, or to be created at heavy tax. That way, a rich self made person got to have and spend his money any way he wants, and at the same time, undeserved millionaire and billionaire get taxed.

So you want it to just be illegal for any person to gift money to another person?

The person receiving should count it as income and have it taxed accordingly.
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