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What lies beneath: Evidence from leaked account data on offshore banking use

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Re: What lies beneath: Evidence from leaked account data on offshore banking use

#121

Post by Ekaros »

sumtechguy wrote: post #89
supernova87a wrote: post #79

Can someone ELI5, what entities or convoluted mechanisms or businesses do very rich people create / have access to that they can minimize taxes, which the rest of us simply cannot take advantage of here in regular life?

You can have the same tools but not necessarily the same connections. The issue is usually capital. Most people do not have it. For example take Paris Hilton. When she had her DUI a few years ago her 500k car got repo'd. Wah? She stopped making payments on it. Payments?! Because she probably had it going through some business expense structure and was probably literally writing off the interest and payments. More tha…

Also in some cases with cars by my understanding leasing makes lot more sense than buying. Like Rolls Royces where lease payments might be lower than depreciation. So do you actually buy this thing, or just the use of it. When later might overall be cheaper. It's get bit weird with some commodities.

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#123

Post by Ekaros »

koheripbal wrote: post #37
tialaramex wrote: post #32

Earlier quoted context omitted.

1. There exist politicians who believe that forcing you to fill out the paperwork reminds you that taxes are evil. They're doing it for your own good, see? 2. There exist tax preparation companies which profit enormously from doing the paperwork for you and they'd miss out on that profit if the government just billed you.

The real reason is that Americans owe money on more income than the gov't is aware of, and if you're going to omit income, they want you to explicitly lie about it so you can be prosecuted for it.

Now is the punishment important part or eventually reclaiming it? In systems where taxes are done by agency and unreported income is found they still have to pay. Was pretty common with cryptos some time ago here.

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#124

Post by Ekaros »

AnimalMuppet wrote: post #93
NovemberWhiskey wrote: post #44

Earlier quoted context omitted.

You proceed from a fallacy. The IRS doesn't know how much tax you owe because Congress has created a massively complex system that includes using deductions to incentivize certain types of behavior, as well as using the tax system as a mechanism to deliver means-tested benefits.

Yeah. For example, one year I bought double-pane windows for my house, which were eligible for a tax deduction (on the grounds of promoting energy conservation). Either I have to tell the IRS that I bought those windows, or the IRS has to know that I bought windows . The second option is too close to dystopian nightmares for my taste.

No system handles that kind of case. But they do handle one where person doesn't take the deductions. And is happy without them.

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#125

Post by watertom »

eloff wrote: post #83
the_optimist wrote: post #39

Earlier quoted context omitted.

You’ll never see rich people argue for a wealth tax, but they sure as hell will parade demanding that we raise taxes on income of the service class.

That's factually incorrect. It's easy to make a list of rich people specifically saying tax the rich more. Leaving that aside, the 1% pay 38.5% of taxes, which seems quite fair as is. We already tax the rich quite heavily. I'd rather the focus be on compliance. Close the loopholes and catch the tax evaders. Wealth taxes, if you look at examples elsewhere both present and historically, are hard to do well. I worry the…

The tax code is lopsided in favor of the rich, it's not about paying a fair share, it's about the burden of the taxes. The burden of taxes on the non-rich is significantly greater than it is on the rich.

If I make $400K and I only need $75K to live, the burden of my taxes is negligible.

If however I make $80K and I need $75K to live, taxes are an unimaginable burden.

We fix the problem by evening out the burden, forget about loopholes, eliminate all but 2 deductions, dependents and primary residence, that's it.

Because the deductions have been eliminated lower the tax rate for each bracket to the effective tax paid for each bracket, the IRS has this data.

Then end capital gains tax, all income is taxed as earned income.

These changes will give 99+% of the population a tax break, and it will simplify taxes drastically for everyone.

The final step is to add 2 new brackets,

>$5M with a tax of 45% >$10M with a tax of 69%

The rich won't need to be making decision about if and when to eat, but the burden of taxes will get leveled out.

We'll also have enough money to pay for Universal Healthcare, and probably college tuition for everyone.

Go lookup the charts for income inequality for the U.S. When the GOP tax cuts from Reagan's first term took effect the income inequality gap started in earnest.

https://en.wikipedia.org/wiki/Income_inequality_in_the_Unite...

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#126

Post by lapinot »

ccn0p wrote: post #92
geggam wrote: post #88

Earlier quoted context omitted.

> Leaving that aside, the 1% pay 38.5% of taxes, which seems quite fair as is. We already tax the rich quite heavily. Given the fact the top 1% hold 43% of the global wealth I think they aren't paying their fair share... There is no need for someone to have 100 billion dollars they an struggle by with 10 billion easy enough .. or even 1 billion https://www.trtworld.com/magazine/top-1-percent-of-household...

so what's fair? 50%? 60? who decides? when does it stop?

I think any wealth (not income!) over something like 1M should be confiscated. :) There's no reason to have that much money and there's no way you personally have generated that wealth, most likely you just invested money early enough in something sucessful to extort money from it. This may sound provocating but it's actually quite a sound model, but which would also mean reconstructing what we mean by the economy... No capitalistic ownership (eg investment is at most a loan, you don't get propriety shares in exchange), no for-profit renting, ...

And obviously funnelling all that money and economic capital to some central state isn't gonna go well so levels below and above the state need to be reinforced.

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#127

Post by edouard-harris »

internetslave wrote: post #13

I have a conspiracy theory that there are far more rich people than we are lead to believe, also that most of us are just working to prop them up and keep them rich.

> there are far more rich people than we are lead to believe

This is almost certainly true — apart from oligarchs, dictators, and crypto billionaires, it's broadly understood that "500 richest" lists also miss a fair number of anonymous Omaha residents, for example.

> most of us are just working to prop them up and keep them rich

I think this part is probably a mischaracterization (though I could also just be misinterpreting what it means). To take the limit case, consider a wealthy dictator who stole absolutely everything he owns, and who flees his ruined country. In this scenario, the aggrieved parties are the people he stole his wealth from, as opposed to, e.g., the waitress who ends up serving him drinks on a Caribbean island.

That means to the extent you believe the "prop them up" part of the theory, you must also believe that most wealth concentrations arise more from things like theft, and less from things like value creation. My experience has been that this seems untrue today and almost certainly becomes more untrue every year (but I do understand that reasonable observers may disagree).

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#128

Post by everybodyknows »

alasdair_ wrote: post #95
TOSSAWAY_1 wrote: post #24

If the IRS knows how much money I owe why dont they just send me a bill?

In part, they know a bunch of stuff but not everything, so they want to see if you lie about the stuff they DO know about because that suggests you are also lying about stuff they don’t know about.

It’s a good theory, but is there supporting evidence?

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#129

Post by atweiden »

sumtechguy wrote: post #89
supernova87a wrote: post #79

Can someone ELI5, what entities or convoluted mechanisms or businesses do very rich people create / have access to that they can minimize taxes, which the rest of us simply cannot take advantage of here in regular life?

You can have the same tools but not necessarily the same connections. The issue is usually capital. Most people do not have it. For example take Paris Hilton. When she had her DUI a few years ago her 500k car got repo'd. Wah? She stopped making payments on it. Payments?! Because she probably had it going through some business expense structure and was probably literally writing off the interest and payments. More tha…

See also: non-profit hijinks, e.g. individually managed funds and supporting organizations. With enough upfront capital and some administrative legwork, tax-free wealth management turns into “philanthropy”.

Re: What lies beneath: Evidence from leaked account data on offshore banking use

#130

Post by makomk »

admissionsguy wrote: post #78
reedjosh wrote: post #75

Earlier quoted context omitted.

> Isn't that the whole basis of capitalism? I think it's only exacerbated by government intervention (corruption) and regulatory capture. I do agree that human nature tends to winners and losers, but right now the losers are being bashed over the head by a tool they think is helping them.

I mean fundamentally, accumulating capital would be pretty pointless if not for legions of poor(er) people willing to do whatever the owner of the capital wants them to.

One of the standard anti-capitalist arguments for redistributing wealth is that the super-wealthy do not, in fact, use their wealth to have others at their beck and call to an extent even remotely proportional to how much better off they are. The usual framing is that less wealthy people spend far more of their money on goods and services, therefore we're better off if they have the money instead of the super-wealthy, but of course it's the same thing really.
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