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

#371

Post by nickpsecurity » Mon, Oct 07, 2019, 6:53 PM UTC

ASTP001 wrote: post #44

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

Would it help to start a fund specific to this purpose? I'd imagine there would be significant ROI on it, in the big picture sense. Relevant Article: https://www.citylab.com/life/2017/09/the-rise-of-public-sect...

I've pushed for this before. Your idea: haven't read linked article yet. Mine was an organization that obfuscated working- to middle-class finances as much as rich. It would operate at cost with most legal stuff done as templates and accounting comouterized. It could be a public-benefit company, foundation, or co-op. They'd just charge annual fee to be in, consulting for anything complex, and everything external at cost plus minimal labor.

What yall think?

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

#372

Post by mcguire » Mon, Oct 07, 2019, 6:54 PM UTC

vonmoltke wrote: post #65

ivalm wrote: post #38

Earlier quoted context omitted.

The graph in article is effective, not marginal. The poorest do pay less in absolute numbers because they are poor, that's a statement of income inequality, not progressivity of the tax rate.

> The graph in article is effective, not marginal. The article is not very clear on that, and there is nothing to indicate such on the plot itself (which will be taken out-of-context at some point).

"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."

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

#373

Post by dragonwriter » Mon, Oct 07, 2019, 6:56 PM UTC

gnicholas wrote: post #357

DesiLurker wrote: post #353

Earlier quoted context omitted.

> The vast majority of other income is taxed in the year it is earned, so there is no/minimal inflation. but our annual raise are often in line with inflation should they be excluded? what about sales tax, thats directly effected by prices going up, should that be excluded to. and what about the receivers of these payment, its the hotdog I paid for is taxed already then why should the vendor have to pay tax again? th…

> but our annual raise are often in line with inflation should they be excluded? This misunderstands the point of indexing gains for inflation, or applying a lower rate to income that is mixed with inflation. The point is that you pay tax on the income in the year it is earned (or soon thereafter). It doesn't matter what the money was earned for, whether you got a raise, or anything else. The point is that it's all m…

> The point is that it's all money that you just got right now.

That's less true if you have hyperinflation, but at normal inflation rates ignoring inflation across the tax year is a pragmatic simplification with modest effect for gains that aren't long-term in nature (which may not exactly coincide with all income not subject to favorable taxation as LTCG.)

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

#374

Post by mLuby » Mon, Oct 07, 2019, 6:58 PM UTC

troupe wrote: post #347

mLuby wrote: post #317

Earlier quoted context omitted.

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?

Yes. Not sure why that's a strange concept…

Taxing assets instead of income doesn't magically make investments worthless.

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

#375

Post by tptacek » Mon, Oct 07, 2019, 7:02 PM UTC

jlmorton wrote: post #363

rayiner wrote: post #327

Earlier quoted context omitted.

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? Government exists because of and for society, and the purpose of taxes is to create the greatest net benefit to society. Taxes are not to punish anyone, they are levied to fund services for society. Determining the optimum rate is complex and open to debate. But fairness is entirely irrelevant to the question. Whether the top marginal rate is 10%, o…

Right, but Rayiner didn't make any arguments about anyone's "inherent natural right to their capital" and I kind of doubt he believes in any such thing. His argument is subtler and much more important than that: if what we want are social services that resemble Europe's more than our own, what needs to change aren't the taxes on the top 1% of earners, but rather increased taxes on the middle class.

Since I've seen Rayiner argue repeatedly on HN that European-style universal health care is a good idea, it stands to reason that what he's saying is that taxes need to increase across the board, not that any one cohort of payers needs to be shielded from increase.

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

#376

Post by mcguire » Mon, Oct 07, 2019, 7:02 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…

I was with you right up to

"• 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."

The "double taxation" argument is false, since it assumes that the entity paying the original tax and the entity paying the second tax are the same entity which is manifestly false. It is also malicious, since it is usually applied to dividends and in so doing converts the investment markets to a zero-sum game.

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

#377

Post by ranie93 » Mon, Oct 07, 2019, 7:06 PM UTC

refurb wrote: post #275

danans wrote: post #199

Earlier quoted context omitted.

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 opini…

It’s gotten less progressive? 2nd graph here [1] shows the top 1% has steady increased their share of all taxes since 1986. I have no idea what it looks like before 1986. [1] https://taxfoundation.org/top-1-percent-tax-rate/

I'd look for other sources to back your claims-- not just the tax foundation

https://krugman.blogs.nytimes.com/2017/11/11/the-tax-foundat...

https://economistsview.typepad.com/economistsview/2008/08/th...

https://www.cbpp.org/research/federal-tax/tax-foundation-fig...

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

#378

Post by thebigshane » Mon, Oct 07, 2019, 7:14 PM UTC

thebigshane wrote: post #220

cpr wrote: post #75

Earlier quoted context omitted.

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.

Yes, Rumsfeld did make this speech on the day before the attacks. It's actually a great speech too! He talks about the cumulative bureaucratic waste of the previous few years of the Department of Defense, and poor auditing. https://www.c-span.org/video/?c4623026/donald-rumsfeld-speec... https://www.cbsnews.com/news/the-war-on-waste/ https://www.quora.com/What-does-the-missing-3-trillion-dolla... But the section of th…

Forgot to note that, the money wasn't "missing" in the sense that it disappeared. It was definitely spent, over many projects, over many years. The problem he was trying to point out was that the auditing and tracking is poor and it is difficult to retroactively see where it was spent. I'm not trying to downplay it too much, because it obviously was (and IS) a huge problem. But there wasn't any implication of nefariousness or intentional fraud. (Caveat: There may have been smaller cases of fraud to make up that number, but the $2.3trillion itself wasn't implied to be all fraud).

It wasn't "wait, wtf happened to all this money? >:( ".

It was more "ah crap, we didn't do a good job tracking all this money... :*("

The nuance is subtle and easily hand-waved away by truthers, but such is politics.

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

#379

Post by Joeri » Mon, Oct 07, 2019, 7:17 PM UTC

AnthonyMouse wrote: post #365

makomk wrote: post #48

Earlier quoted context omitted.

Careful. The two articles rely on vastly different cherry-picked definitions of who counts as rich, and neither claim is even remotely true anymore if you use the other definition. The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. This NYT article on the other hand picks out the top 400, who apparently pay lower taxes but are much more aggress…

> The two articles rely on vastly different cherry-picked definitions of who counts as rich, and neither claim is even remotely true anymore if you use the other definition. One of the most important things to understand about tax discussions is that there are two broad classes of "rich" -- high paid salaried employees vs. wealthy investors. When you see claims like "the top 20% of people pay most of the taxes", that…

The rich spend a smaller share of their income, so a VAT scheme would in practice produce a regressive taxation scheme, with the lowest incomes paying relatively the most, because they have to spend all of their income.

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

#380

Post by chimi » Mon, Oct 07, 2019, 7:22 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…

> it's a different sort of income, with a VASTLY riskier risk profile

Yes, earning the money with labor is vastly riskier. Telling a financial advisor where to put money incurs no risk to your life.

Compare that to being a welder, tree feller, home builder, where your health or life is a daily concern.

I really don't understand why those who go out and work hard every day have to pay more in tax (as a percentage) than those that just sit on the couch and watch their wealth grow.