Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

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

nytimes.com

Post reply on HN
Print view View original

411–420 of 504 posts

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

#411

Post by TheSpiceIsLife »

Jweb_Guru wrote: post #402
TheSpiceIsLife wrote: post #335

Earlier quoted context omitted.

> The wealthy pay in absolute terms, more dollars, but they pay a lower rate than others. There’s at least one perspective where this makes sense: Everyone expects a discount on goods and services when purchased in bulk. Why should tax be abt different?

Paying taxes is not "buying the government" and paying higher taxes is not buying "more" of it, or buying it in bulk. For starters: bulk rates are lower, in part, as an incentive to get people to buy more of a product at once. Since paying taxes is (ostensibly) mandatory, this doesn't apply.

Ostensibly being the key word here as there appears to be some scenarios where none of those things are true.

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

#412

Post by dexterdog »

decoyworker wrote: post #350
dexterdog wrote: post #137

Earlier quoted context omitted.

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.

Gifts are taxable above a certain point which is kind of crazy since taxes were already paid on the initial income.

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

#413

Post by jellicle »

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…

For most taxpayers, social security and medicare payroll taxes (highly regressive) are the largest tax they pay.

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

#414

Post by aeternum »

JeromeLon wrote: post #223
eloisant wrote: post #119

Earlier quoted context omitted.

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?

Let's say that the 20% rate applies to income tax, corporation tax, dividend tax and capital gain tax. When a company allocates $100 to its employee, the employee receives $100 of salary, pays $20 of income tax, and ends up with $80. When a company allocates $100 to its shareholder, it's first considered as profit, so the company pays $20 in corporation tax, the shareholder receives $80 of dividends, pays $16 of divi…

This was more true in the past.

Now, companies often put all profits into R&D avoiding both dividend tax and corporation tax. Investors are much more willing to value companies based on growth rather than actual dividends.

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

#415

Post by troupe »

mLuby wrote: post #374
troupe wrote: post #347

Earlier quoted context omitted.

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.

It doesn't make it worthless, but right now you only pay income tax on assets with volatile valuations when you actually realize the gain because any gain on paper may not actually be realized.

Let's say you invest $1000 in a highly risky stock. It does very well and goes up to $10,000. You haven't sold it, but the government taxes you a wealth tax of 20% so you pay $2,000. The next year it goes down to $1,000 again and you sell it. In terms of actual profit/loss you haven't made or lost any money. However, you've paid twice as much in tax as you originally invested. (Pick any percentage you want as a wealth tax and you run into the same issue.)

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

#416

Post by ScottBurson »

AnthonyMouse wrote: post #370
Retric wrote: post #324

Earlier quoted context omitted.

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 r…

Really what we should do with capital gains is allow people to deduct losses including inflation , so that we tax the total real value gain at the ordinary rate, and do so when the money is actually divested rather than only moved from one investment security to another (because one of the arguments for lower capital gains rates is that higher rates causes money to be locked into securities the investor wouldn't othe…

> what we should do with capital gains is allow people to deduct losses including inflation

Yes, I've come to this conclusion too. The long-standing argument that capital gains rates should be low is about what happens, for example, if your gain on an investment exactly matches inflation: you'd pay taxes on it, but you haven't made any profit in real dollars. The right fix for that is not to divide your paper gain by some amount before taxing it; it's to subtract the loss due to inflation. In times of low inflation, as we have now, this won't make much difference, but if inflation picks up again at some point, it will make quite a large difference.

Of course, such a plan raises the question of exactly what inflation estimator one should use. I'm not enough of an expert to have a strong opinion, but the T-bill rate [0] seems like a reasonable first cut, since it's a good estimator for the risk-free rate of return. Paper gains from holding T-bills would thus not be taxed at all.

Whatever the inflation estimator used, the more important (and likely more controversial) aspect of the proposal is that gains beyond that amount be taxed as ordinary income. The argument is one of simple fairness: once the inflation problem is handled, how can one justify doing otherwise?

[0] https://www.investopedia.com/terms/t/treasurybill.asp -- Okay, I see there isn't just one rate, since the rate depends on the maturity interval, but we can go with the highest one, which is the one for the 52-week bill. This creates the oddity that holders of shorter-term bills will actually get a tax credit, but it will be small; I think we can live with this.

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

#417

Post by kryogen1c »

Retric wrote: post #324
koheripbal wrote: post #313

Earlier quoted context omitted.

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 r…

Dont tariffs on imports\exports make this not true? Or is simply true enough?

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

#418

Post by rayiner »

xg15 wrote: post #393
rayiner wrote: post #319

Earlier quoted context omitted.

Billionaires pay low tax rates because capital gains is taxed at lower rates. That’s true not just in the US, but in most of Europe as well. So what’s the point? Even confiscatory 100% taxes on billionaires wouldn’t raise much money (about $127 billion per year, compared to the multi-trillion cost of social programs on the table). And getting rid of preferential treatment of capital gains would risk departing from wh…

> And getting rid of preferential treatment of capital gains would risk departing from what’s become an international consensus. I think we need a better reason than "because everyone is doing it" here.

“A bunch of liberal democracies which compete with us economically have converged on an overall framework” is a pretty compelling reason to me.

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

#419

Post by kaibee »

dexterdog wrote: post #410
kaibee wrote: post #343

Earlier quoted context omitted.

> 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.

Where is it wasted? It gets invested or spent.

> pissing it all away
Post reply on HN