Live data from Hacker News

Evidence from leaked account data on how elites use offshore banking [pdf]

brookings.edu

271–280 of 332 posts

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#271

Earlier quoted context omitted.

Sales taxes are completely regressive, because the rich do not spend much of their income. Even with the exemption for basic necessities, a person who earns 100x what you do will probably spend on the order of 5-10x more than you, thus making the tax very regressive.

Not at all, especially if you exempt basic necessities. Poor would still pay low to zero tax because those costs are a greater percentage of their income. And you could even subsidize the taxes with a universal monthly payout.

Such a scheme doesn't change things for the poor (defined by those who don't earn enough to pay any taxes). But it does change the effective tax rate ratio between the middle class and truly rich. The middle class will pay a higher effective tax rate than the truly rich, because the middle class spend more of their income.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#272
post #185

Earlier quoted context omitted.

> paper millionaires Is there some other kind of millionaire?

I'd imagine in this case it's more a matter of liquidity. It's one thing to say you have a million dollars to your name. The difference is that one person has to sell everything they own to command that value while someone else just calls their broker to have it liquidated from their rainy day fund.

Indeed, and in 2021 I think it’s pretty clear that owning a residence means you have a reasonably liquid asset.

But more to the actual point. To the extent a concept of “paper wealth” exists it should be confined to things that are genuinely unable to be converted into real money at all. For example stock options in a seed stage company are genuinely illiquid and may never be worth anything ever to anyone.

People living in a million dollar house and saying it’s not really wealth and shouldn’t count sound pretty out of touch to the rest of the world that doesn’t get to live in a million dollar house.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#273
post #62
post #51

Earlier quoted context omitted.

> I, the middle class engineer get fucked by the taxes Fwiw we feel like middle class but we’re really in the top 5% or higher. We’re the rich people these taxes and politicians talk about. The ultra rich/wealthy are a red herring, there’s only a few 10k of them of them. Only 614 people are billionaires. 7 figure income (salary) puts you in top 0.35% ... that’s 1,120,000 Americans. Not a whole lot. edit: top 10% star…

Middle class engineers make 7 figure salaries?

With stock, bonus etc. the higher rungs of engineers in FAANG pull down 7 figures, yes.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#274
post #190

Earlier quoted context omitted.

This is a staggering lack of perspective. The average American takes around ten years to make that amount of money. Tell them at the end of the year you’re going to give them the next nine years of paychecks as a Christmas bonus and then ask them if they feel financially independent.

This is a bizarre take. The average American is more likely to live in the equivalent of Flyover, Kansas than Sunnyvale, California. I've lived in both, more the former than the latter. I'm sure the person living in Sunnyvale would love to pay $55k for a nice brick two-story house (current price for one I grew up in) but that doesn't seem to be an option in Sunnyvale. Tell that hypothetical average American to buy a…

You're ignoring the people who make nowhere near 400k who also work in California, but have to do things like living in a trailer park, or winning a FAANG lottery for teachers in the local school district to have subsidised housing, or commute dozens of miles.

A little perspective is always a good thing.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#275
post #227
post #118

Earlier quoted context omitted.

Yeah that was a good one; promise a tax cut for the rich, and give a slight tax cut to the rich in low tax states and screw people in high tax states (which happen to mostly be were the proposer of the tax cut didn't get votes anyway). On the plus side, between the limit on SALT deduction and the increased standard deduction, the mortgage interest deduction is almost effectively dead; which is something that has need…

Why should people in states that do not have an income tax have to effectively subsidize the SALT tax deduction? Maybe it will make ca/ny think twice about having such high tax rates…

Do they fund the SALT deduction? NY and CA pay more in taxes to the Federal government than they receive back in inward investment. Sounds like it's the states with no state tax that are being subsised to me.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#276

Earlier quoted context omitted.

SALT is “state and local tax”... you can deduct state and local taxes from your federal taxes, but a few years ago they put a cap on it so you can only deduct $10,000. This really hurt tax payers in higher tax states.

I pay more now because of the SALT cap, but I still support the idea - why should residents of low tax states subsidize residents of high tax states, all other things being equal?

> I pay more now because of the SALT cap, but I still support the idea - why should residents of low tax states subsidize residents of high tax states, all other things being equal?

Under a federalist, state-first system, the federal government shouldn’t consider mandated transfers to state (including administrative subdivisions) government which plays the primary role in the conditions of local commerce which enables income as part of the free income of a taxpayer subject to taxation (this also avoids federal taxes altering the calculus of net benefit in state democratic decisionmaking on tax and spending.) In a federal-first, centralized system, ignoring state taxes consistently makes sense. In either case, a limited SALT deduction has no principled justification, and is simply an effort to use the power of federal tax policy to put a federal thumb on the scales of state decisionmaking to get the successful states whose economic success makes them net contributors to the federal government to adopt tax and spending policies more like those characterizing the politically-overrepresented but less successful states that are net drains on federal resources, leveling the playing field by making every place suck equally, so at least the former can’t make the latter look so bad any more, while advancing the Norquistian vision of shrinking the size of government to where it can be drowned in a bathtub, without concern for thr consequences, because ideology.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#277
post #75

Earlier quoted context omitted.

The fact that there are people making 10,000 times as much as the highest bracket in a single year suggests whoever is proposing these tax laws does not actually want to solve the problem. There should be brackets going up to a billion dollars, adjusted every time someone makes an order of magnitude more than the highest bracket. Also, making 400K does not make you rich. In California, you are actually bringing home…

Are you serious? 400K definitely makes you rich. As if you do that for 10 years you have 4M dollars, 20 years? $8M I get that COL lowers that, but if you are making 400K you're not renting.

> As if you do that for 10 years you have 4M dollars, 20 years?

If you're making 400k post-tax, sure. If that's pre-tax income, however, you're not making 4M after 10 years.

After federal taxes you're making closer to $286k, roughly. This is just for the privilege of being a US citizen - even if you don't necessarily spend the majority of your time in the country.

Assuming this is a CA software engineer, it's closer to $250k. This is just for the privilege of having a tax basis in CA.

Assuming you actually do live in the Bay Area as a single bachelor and would like the privilege of having your own apartment that you don't have to share with others (remember, you're "rich") a nice unit to yourself will run you roughly $3k/m -> $24k/y. So we're much closer to $225k/y.

Even assuming this person has no car, no social life, and no metabolism we're still running at roughly half of your projections. Which is still a fair chunk, to be sure. But it's still half of their money going towards the privilege of obtaining money.

EDIT: just saw this bit

> I get that COL lowers that, but if you are making 400K you're not renting

This depends, as buying is not always superior to renting, especially when you're talking a house. A house is a pretty big investment - so much so that a lot of financial circles still spend a lot of time between "get a home, what isn't equity is a tax write off" and "just rent, no surprise expenses, remain more liquid, invest the difference between your rent and a typical mortgage in the market".

The last time I was looking in the South Bay area, average prices for a 2 bedroom home in a suburb were ~$1.2m. This is a $240k down payment and ~$7.3k monthly (15 year conventional, down to ~$4.7 for 30 year but we're outside of the "10/20 years" we described above and paying more interest for it besides).

If we account for all that, we're looking at much closer to $190k being available to us after the privilege of living and working (that's adjusting for the taxes, but it's not so clean as interest is a sliding scale over the years) - just now we have a place to ourselves that cost us around a year or two of savings time just to start the house purchase and a recurring expense that's over double the nearby rent. This is largely not favorable to the majority of people unless they're wanting to lay roots. That said, given people seem to be leaving I'd imagine housing prices will become less steep in a matter of years; albeit whether it makes it more reasonable to buy than rent for those not looking to stay for 15+ years remains something of an open question.

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#278
post #190

Earlier quoted context omitted.

If you are making $400k in California, in places where you are likely to make that much, quite a lot of that is going to taxes and expenses. Sure, you might be able to save $2M over a decade, which makes you well off for sure, but "rich" is a bit of a stretch when all it affords you is paying a mortgage on a mid-century formerly middle-class house vaguely within commuting distance. Calling that lifestyle "rich" just…

This is a staggering lack of perspective. The average American takes around ten years to make that amount of money. Tell them at the end of the year you’re going to give them the next nine years of paychecks as a Christmas bonus and then ask them if they feel financially independent.

[deleted]

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#279

Earlier quoted context omitted.

This is a bizarre take. The average American is more likely to live in the equivalent of Flyover, Kansas than Sunnyvale, California. I've lived in both, more the former than the latter. I'm sure the person living in Sunnyvale would love to pay $55k for a nice brick two-story house (current price for one I grew up in) but that doesn't seem to be an option in Sunnyvale. Tell that hypothetical average American to buy a…

You're ignoring the people who make nowhere near 400k who also work in California, but have to do things like living in a trailer park, or winning a FAANG lottery for teachers in the local school district to have subsidised housing, or commute dozens of miles. A little perspective is always a good thing.

[deleted]

Re: Evidence from leaked account data on how elites use offshore banking [pdf]

#280
post #104

Earlier quoted context omitted.

This is the best lie ever told, "don't worry, these taxes wont affect YOU!". Every new tax inevitably falls onto the middle class, because they can't hire people to restructure their wealth and the poor pay no taxes. Lower taxes makes it less expensive for the rich to pay the government. Look at housing and food costs to see how the middle class are affected, they don't get welfare, social housing, or food stamps.

Aren't you completing dodging the fact that the comment/s above you are pretty obviously talking about income taxes? If you are in between (say) my salary and 400k, no amount of increase in the price of food is going to be a problem for you unless you are ludicrously bad with money. I'm not in favour of wanton taxes aimed at "the rich" as a political manoeuvre, but let's not be blinkered here.

"Restructure their wealth" poor phrase. Income isn't only salary, you're getting stocks/options. Consultants, not available to the middle class, can optimize your income.

CoL increase maybe not a problem, but its still an increase, if you're trying to tax the rich, you've hit the wrong target.

After a certain rate, as taxes rise, revenue falls. Feds keep spending, when they realize projected income will fall short, the goal line moves from 400K to 200K, then 100K, etc.

We should lower taxes and close the 1000's of loopholes, I would bet revenue goes up.

And I learned a new word today, "wanton"!

Post reply on HN