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

Tax details of US super-rich allegedly leaked

bbc.com

Post reply on HN
Print view View original

71–80 of 185 posts

Re: Tax details of US super-rich allegedly leaked

#71

Post by [deleted] »

imgabe wrote: post #14
01100011 wrote: post #5

I've seen people complaining that the article is disingenuous because it conflates income taxes with capital gains taxes. My response is 'so what'. When you make above a certain income level, you don't need anymore income and can play around with reinvesting capital gains to push taxes into the future while amassing wealth. Sure, you're not realizing the income, but what you're doing, I think, is gaining power and in…

We do tax capital gains. You pay taxes when you sell. Do you mean tax unrealized capital gains? There is a reason you don’t owe taxes on a stock you haven’t sold yet. For one thing, what if you have to pay tax at one valuation, and then it goes down later.

[deleted]

Re: Tax details of US super-rich allegedly leaked

#72

Post by daenz »

dougmwne wrote: post #24
01100011 wrote: post #5

I've seen people complaining that the article is disingenuous because it conflates income taxes with capital gains taxes. My response is 'so what'. When you make above a certain income level, you don't need anymore income and can play around with reinvesting capital gains to push taxes into the future while amassing wealth. Sure, you're not realizing the income, but what you're doing, I think, is gaining power and in…

Once you have a certain amount of assets, there's no need to realize any personal income. It becomes completely voluntary. If you have a billion in stock, you could leverage that to pay personal expenses. You could use an unrealized loss over there to balance out the cash you're taking in from a gain over there. You can use companies and foundations to execute any vision you have outside of your household. If you pla…

Do you trust politicians to redistribute money fairly and with accountability?

Re: Tax details of US super-rich allegedly leaked

#73

Post by vkou »

kapp_in_life wrote: post #25
vkou wrote: post #8

Earlier quoted context omitted.

> I would guess it's all legal. When it's all secret, we can't make an informed decision on whether or not it should be legal.

What's secret? Income and capital gains brackets are public knowledge. Is who has the money really that important? If you think income over 100,000 should be taxed higher, you can already use the current brackets as reference(and compare to what other countries use, for example).

> What's secret? Income and capital gains brackets are public knowledge.

That you are speaking about income and capital gains brackets indicates that you don't actually know how the rich hide their money from the tax man.

It, at a first approximation, gets laundered through foundations and into trusts, that they retain control of, but don't really pay either set of taxes on.

Re: Tax details of US super-rich allegedly leaked

#74

Post by BitwiseFool »

vkou wrote: post #8
shoto_io wrote: post #7

"Don't hate the player hate the game," is what comes to my mind. I would guess it's all legal. It is still good to have transparency, which might potentially change things. I am not so sure though. After all, politicans are usually rich as well. But: All of these super-rich have probably created many, many jobs. I guess all-in-all it is a positive game for society.

> I would guess it's all legal. When it's all secret, we can't make an informed decision on whether or not it should be legal.

As a point of order "we" don't make these decisions at all. We elect people who do. And, you can support something being legal/illegal on principle alone.

Re: Tax details of US super-rich allegedly leaked

#75

Post by spikels »

sec400 wrote: post #27

If anyone understands the reasoning behind the US capping your deductible net capital loss in any tax year at $3,000 vs allowing your full capital losses to be offset I'd be interested.

Idea is to prevent people from offsetting large incomes with capital losses. This simply appears unfair to many - earning lots of income but paying little tax.

A more sophisticated argument is that since you can control capital losses by choosing which assets to sell you would be able to manage your taxes. With enough assets and some planning you could never pay taxes despite having a large income.

The $3,000 cap prevents this. Similar approaches are used throughout the tax code to prevent abuses.

Re: Tax details of US super-rich allegedly leaked

#76

Post by robryan »

imgabe wrote: post #41
pontus wrote: post #35

Earlier quoted context omitted.

I agree that taxing unrealized capital gains is a fundamentally flawed approach. However, the problem with the current system is that these ultra-wealthy people just end up borrowing against their equity, avoiding selling if possible. I think it would make sense to count borrowing against equity as tax-wise equivalent to selling that same equity. With that loophole closed, together with raising the capital gains tax,…

But borrowing is not equivalent to selling, tax wise or any otherwise. When you get a mortgage to buy a $750k house, do you want to be taxed as though you had $750k income that year? You’re just borrowing against the value of an asset after all.

It should be possible to target this. Have it kick in say over $10 million or when a loan is backed by existing rather than new assets purchased with the loan.

Re: Tax details of US super-rich allegedly leaked

#77

Post by aaomidi »

daenz wrote: post #72
dougmwne wrote: post #24

Earlier quoted context omitted.

Once you have a certain amount of assets, there's no need to realize any personal income. It becomes completely voluntary. If you have a billion in stock, you could leverage that to pay personal expenses. You could use an unrealized loss over there to balance out the cash you're taking in from a gain over there. You can use companies and foundations to execute any vision you have outside of your household. If you pla…

Do you trust politicians to redistribute money fairly and with accountability?

There is a reason we do have the second amendment if they don't.

Like, it was literally written in the constitution for this purpose.

Re: Tax details of US super-rich allegedly leaked

#78

Post by bendbro »

pontus wrote: post #35
imgabe wrote: post #14

Earlier quoted context omitted.

We do tax capital gains. You pay taxes when you sell. Do you mean tax unrealized capital gains? There is a reason you don’t owe taxes on a stock you haven’t sold yet. For one thing, what if you have to pay tax at one valuation, and then it goes down later.

I agree that taxing unrealized capital gains is a fundamentally flawed approach. However, the problem with the current system is that these ultra-wealthy people just end up borrowing against their equity, avoiding selling if possible. I think it would make sense to count borrowing against equity as tax-wise equivalent to selling that same equity. With that loophole closed, together with raising the capital gains tax,…

They don't "avoid selling," at least in the way you and others are implying. They only delay selling. At some point the loan must be paid back, and at that point they will have to sell something or take income, which incurs either income or capital gains tax.

And a trivial way to work around your proposed rule: borrow without collateral. Why would a lender be willing to do this? Because they know the other party is wealthy, that in the event of bankruptcy they have ways to collect, they make money on interest, and it is tax efficient under your new rule.

Re: Tax details of US super-rich allegedly leaked

#79

Post by geoduck14 »

pontus wrote: post #35
imgabe wrote: post #14

Earlier quoted context omitted.

We do tax capital gains. You pay taxes when you sell. Do you mean tax unrealized capital gains? There is a reason you don’t owe taxes on a stock you haven’t sold yet. For one thing, what if you have to pay tax at one valuation, and then it goes down later.

I agree that taxing unrealized capital gains is a fundamentally flawed approach. However, the problem with the current system is that these ultra-wealthy people just end up borrowing against their equity, avoiding selling if possible. I think it would make sense to count borrowing against equity as tax-wise equivalent to selling that same equity. With that loophole closed, together with raising the capital gains tax,…

Borrowing against your stocks isn't a loop hole. You eventually have to pay the loan back, when you do, you sell stock, pay taxes on the profit of the sale, and use the rest to pay the loan.

You didn't avoid anything, you just deferred it until later.

By the way, if the bank "forgave" the loan, and said you don't have to pay it back, that forgiveness is taxed - usually in a form 1099. So there isn't a loop hole there, either.

Re: Tax details of US super-rich allegedly leaked

#80

Post by bradjohnson »

imgabe wrote: post #14
01100011 wrote: post #5

I've seen people complaining that the article is disingenuous because it conflates income taxes with capital gains taxes. My response is 'so what'. When you make above a certain income level, you don't need anymore income and can play around with reinvesting capital gains to push taxes into the future while amassing wealth. Sure, you're not realizing the income, but what you're doing, I think, is gaining power and in…

We do tax capital gains. You pay taxes when you sell. Do you mean tax unrealized capital gains? There is a reason you don’t owe taxes on a stock you haven’t sold yet. For one thing, what if you have to pay tax at one valuation, and then it goes down later.

This isn't really true. If you receive RSUs as part of compensation, you have to pay taxes according to the value of the stock at the time of vesting. You also have to pay tax when you sell the stock equal to the difference in price from vesting.

You might get a refund or you might pay more taxes when you sell, but there is precedent to paying taxes on stock that you currently hold.

Post reply on HN