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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

#431

Post by rayiner »

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…

CEOs are probably a bad example for your point, because stock awards are generally taxed as income, not capital gains: https://www.forbes.com/sites/antoinegara/2016/09/01/apple-ce...

> However, the day Cook was awarded his multi-year payday Apple immediately withheld and sold 656,117 of Cook’s shares to cover his tax bill. All told, Apple sold $70.9 million in Cook’s stock at a price of $108.03, equivalent to or 52.1% of Cook’s total $135 million performance award.

You’re talking about a relatively small number of investors who derive most of their income from capital gains. (Capital gains account for just about 6% of total personal income.) It just so happens that many prominent examples (Trump, Buffet, Romney) happen to fall into that group. But even among CEOs, professional like Jack Welch (who pays over 30%) will take a lot or most of their compensation as ordinary income.

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

#432

Post by bsanr »

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?

Yes.

Though "punish" is an unnecessarily emotional word to use to describe a secondary function of taxation, which is to influence the structure of the economy writ large. It's been mentioned before that high marginal tax rates on top earners were almost never triggered, which is true. Instead of becoming personal income that could be used to wield undue influence on personal whims, wealth created by large enterprises (virtually the only way to accrue billions and billions of dollars of net worth) stayed within those organizations, where it could justifiably be used to raise wages and improve infrastructure, and where whatever use it eventually saw was validated by a support structure of interested parties with real sway.

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

#433

Post by mLuby »

troupe wrote: post #415
mLuby wrote: post #374

Earlier quoted context omitted.

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…

Agreed that's how taxing income currently works. But we're talking about taxing wealth. What you're describing is this:

    Buy at 1K
    Sell at 10K
    Taxed on 10K
    Buy at 10K
    Sell at 1K
I understand your concern about volatile assets, but aren't all assets (even currency and gold) risky over a long enough time period?

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

#434

Post by trystero »

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…

The chart actually shows the effective tax rate, with deductions accounted.

https://twitter.com/gabriel_zucman/status/118103695973867520...

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

#435

Post by MarcScott »

I've often wondered whether a 100% inheritance tax is the answer to all of this.

You can privilege your children with a private education, tuition, etc. You can't leave them any of your wealth.

If your kids are under 18 when you die, then they can receive a dividend but at 18 that ends. Your spouse should be able to take care of themselves, and not rely on your wealth.

No need for any other taxes whatsoever. Am I missing something?

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

#436

Post by tehsauce »

MarcScott wrote: post #435

I've often wondered whether a 100% inheritance tax is the answer to all of this. You can privilege your children with a private education, tuition, etc. You can't leave them any of your wealth. If your kids are under 18 when you die, then they can receive a dividend but at 18 that ends. Your spouse should be able to take care of themselves, and not rely on your wealth. No need for any other taxes whatsoever. Am I mis…

That would highly discourage anyone from investing in anything that lasts longer than themselves- probably disastrous consequences

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

#437

Post by dragonwriter »

MarcScott wrote: post #435

I've often wondered whether a 100% inheritance tax is the answer to all of this. You can privilege your children with a private education, tuition, etc. You can't leave them any of your wealth. If your kids are under 18 when you die, then they can receive a dividend but at 18 that ends. Your spouse should be able to take care of themselves, and not rely on your wealth. No need for any other taxes whatsoever. Am I mis…

A zero percent inheritance tax plus not exempting inheritance from normal income tax would be more fair.

(With generous provisions for advance recognizing income at the taxpayers discretion or for deferring recognition of windfalls that significantly exceed prior income.)

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

#438

Post by refurb »

WalterBright wrote: post #409
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…

> it has one, only one, progressive tax - the federal (not state) income tax The estate tax is very progressive, at 40% for estates over $11.4m, and 0% for estates worth less.

Many state taxes are progressive as well.

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

#439

Post by refurb »

MisterBastahrd wrote: post #387
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…

Citation? Try sales taxes. The poor aren't excluded from them, yet someone who is poor is far more likely to spend a larger percentage of their income on them than anyone with enough income to save and invest.

Most of the sales taxes I’ve seen exempt things like food and other necessities.

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

#440

Post by reitzensteinm »

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…

How about tax only on real terms, but on liquidation taxes are retroactively paid as though you bought and sold the asset each year.

This means you don't get an interest free loan from the government to continue to invest in an asset just because you haven't sold yet.

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