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

#481

Post by AnthonyMouse » Tue, Oct 08, 2019, 3:59 PM UTC

reitzensteinm wrote: post #440

AnthonyMouse wrote: post #370

Earlier quoted context omitted.

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.

The problem there is that you effectively force liquidation in order to pay the taxes, even if you wouldn't have sold the asset. Not such a problem for index funds, but a big deal for small business owners who would have to sell a stake in their business as soon as it starts doing well in order to pay the tax on its higher current market value, which includes the net present value of expected future profits that haven't yet been realized and so can't be used to pay the tax today.

Having the government give people de facto interest free loans of their own money in order to continue to investing it is also optimal anyway, because the government borrows at an interest rate significantly lower than the average market rate of return. They actually come out ahead by lending the money to investors who are then collecting taxable interest on it, because the tax on the interest can be more than the rate the government pays to issue bonds in the meantime, not even counting the overall economic benefit of stimulating investment (i.e. more/better jobs for people who are themselves paying taxes).

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

#482

Post by captainbland » Tue, Oct 08, 2019, 4:09 PM UTC

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

Seems like the correct thing to do is just to send the very rich person the bill for the costs of investigating their tax arrangements if it is substantially obscure. This would both make investigating these arrangements financially viable and disincentivise people from setting up arrangements like that in the first place.

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

#483

Post by AnthonyMouse » Tue, Oct 08, 2019, 4:28 PM UTC

Forbo wrote: post #448

Forbo wrote: post #388

Earlier quoted context omitted.

What about a flat transactional tax that occurs any time money changes hands? I found this not too long ago and have been enamored with the idea: http://apttax.com/execsummary.php

Fuck me, right? Would be nice to know why this is seemingly such a shitty idea, but guess I'll never hear why.

The problem with it is that it creates a powerful incentive for vertical integration and puts everyone else out of business.

If you have a product that goes from mine to mill to factory to wholesaler to retailer to consumer, the tax is paid five times. But if the same company owns the mine as operates the retail store, it's paid only once.

That's an insurmountable advantage for vertically integrated companies, so no others remain and tax-wise you end up with the same result as sales tax or VAT (i.e. the tax is paid on the total final value) except that you've needlessly destroyed every non-vertically integrated business.

That is the problem that VAT solves, by giving longer supply chains the same tax treatment as vertically integrated corporations.

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

#484

Post by cpr » Tue, Oct 08, 2019, 4:38 PM UTC

LyndsySimon wrote: post #182

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.

I do recall that, and recall discussion of it after 9/11. As for what I infer is an implication of the 9/11 attack being motivated by a desire to cover this up, I can't find any reference to the outer ring of the west wing of the Pentagon being "the accounting wing". Even if it were, I can't imagine that we're doing our federal accounting in the 21st Century on paper that's stored only in one central location. That s…

https://www.washingtonpost.com/archive/local/2002/09/11/hard...

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

#485

Post by ggreer » Tue, Oct 08, 2019, 5:05 PM UTC

ajslater wrote: post #339

ggreer wrote: post #174

Earlier quoted context omitted.

> They didn't do that in the 1950s, though. In the 1950s there weren't any alternatives to the US. Europe and Asia were rebuilding from WWII. Central and South America weren't nearly as developed as today. Places like Singapore, Taiwan, and Korea were extremely poor. The english language wasn't as popular internationally. Intercontinental communication was expensive and low bandwidth. Travel was much more expensive.…

> It's much, much easier to live and work in a foreign country today. And it's only getting easier as technology improves. So let the current oligarchs exile themselves and we'll do what we can to make sure no more Bezos are created again. I wonder if your school situation has to do how schools are funded in the United States in particular. It sounds like your school needs more tax money from richer parts of the coun…

But I want more Bezos, Gates, Buffets, and Musks, not fewer.

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

#486

Post by ajslater » Tue, Oct 08, 2019, 5:10 PM UTC

ggreer wrote: post #485

ajslater wrote: post #339

Earlier quoted context omitted.

> It's much, much easier to live and work in a foreign country today. And it's only getting easier as technology improves. So let the current oligarchs exile themselves and we'll do what we can to make sure no more Bezos are created again. I wonder if your school situation has to do how schools are funded in the United States in particular. It sounds like your school needs more tax money from richer parts of the coun…

But I want more Bezos, Gates, Buffets, and Musks, not fewer.

They personally are not great people, but the system that has enabled them to hoard personal wealth and leave the streets full of the destitute will be destroyed.

The most important thing, of course, is to eliminate poverty and protect the planet. The next most important thing is destroy oligarch’s power so they don’t continue to jeopardize the most important things. And, practically in a scarcity economy, capture their mis allocated resources for better ends.

Wanting more wealth hoarded by the few is not a good thing to want.

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

#487

Post by walshemj » Tue, Oct 08, 2019, 7:42 PM UTC

vertex-four wrote: post #422

walshemj wrote: post #401

Earlier quoted context omitted.

Most of those are higher risk than interest on cash or TIPS (not all government bods are safe) ask the shareholders of Thomas Cook or Going back a bit Enron about risk.

Ask the people who worked for Thomas Cook about risk.

They will in the UK at least get some back pay via RB2 (I have had to fill out one of those).

RB2 Is the form you fill out if an employer goes bust, to get some cash from the government.

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

#488

Post by reitzensteinm » Tue, Oct 08, 2019, 8:10 PM UTC

AnthonyMouse wrote: post #481

reitzensteinm wrote: post #440

Earlier quoted context omitted.

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.

The problem there is that you effectively force liquidation in order to pay the taxes, even if you wouldn't have sold the asset. Not such a problem for index funds, but a big deal for small business owners who would have to sell a stake in their business as soon as it starts doing well in order to pay the tax on its higher current market value, which includes the net present value of expected future profits that have…

I'm saying that you do the calculations retroactively on sale. No taxes are due until then. Even if the asset spikes, no taxes are due if ultimately sold at a loss.

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

#489

Post by xyzzyz » Tue, Oct 08, 2019, 11:15 PM UTC

coldtea wrote: post #471

tptacek wrote: post #375

Earlier quoted context omitted.

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 Ra…

> 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. How about increased wealth taxation on the 1% of earners, and the 0.1% of owners?

It might work as punishment for some wealthy people, but won't bring enough extra income to significantly expand government spending.

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

#490

Post by vertex-four » Wed, Oct 09, 2019, 2:15 AM UTC

walshemj wrote: post #487

vertex-four wrote: post #422

Earlier quoted context omitted.

Ask the people who worked for Thomas Cook about risk.

They will in the UK at least get some back pay via RB2 (I have had to fill out one of those). RB2 Is the form you fill out if an employer goes bust, to get some cash from the government.

Yes, but you now don't have a job, even if you get paid for every hour you worked. Jobseekers is only a partial safety net. On the other hand, nearly everyone who saw their shares in Thomas Cook go to 0 had investments in a number of other things, so only took a minor hit.

The risk of investing is, in the large, "my £10,000 might be worth £9,500 tomorrow", not "tomorrow I might lose my job through no fault of my own and suddenly have to make a major lifestyle change".