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Wealthiest U.S. executives paid little to nothing in federal income taxes

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Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#91

Post by sologoub »

dagw wrote: post #57
ykevinator3 wrote: post #51

Earlier quoted context omitted.

Agreed but paying an exec $1 in compensation salary and $100m in stock should also be illegal.

It shouldn't be illegal, it just be taxed at a reasonable level making it more equivalent to getting the same salary in cash.

It already is taxed as ordinary income - RSUs are taxed as cash when vested. Incentive stock options (you have to buy these out at strike price) are taxed as income for value at exercise less strike price.

The advantage of RSU over regular cash comp is that they can appreciate while not yet vested - it’s like putting your future salary into stock market, it can go up or down. Then when vested, it’s taxed as cash salary (no long term capital gains advantage here).

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#92

Post by jurassic »

QuixoticQuibit wrote: post #58
nickpp wrote: post #39

Earlier quoted context omitted.

Once a new tax is imposed, its limits and brackets are probably the easiest things to change about it. Moreover, if they aren’t inflation-adjusted, the Fed will make sure we’ll all get there pretty soon, just by printing money like they are doing these days. Anybody who has any legally earned wealth has already paid his fair share to the society by simply creating the corresponding value. Usually value creators get a…

So Jeff Bezos and Elon Musk (and other stupidly rich executives) created hundreds of billions of dollars of value themselves? Of course not. They got their through exploitation. Any profit that a business has is value not being paid back to the actual workers who created the value of the company through their labor. Nobody has ever worked for $100 billion. Or $1 billion. Or $100 million.

If your skill is moving boxes onto a delivery truck your work is not more useful/valuable as part of Amazon than at a small traditional company with no scalable internet components. The excess value in these companies should flow to those who took risks to set them in motion and continue leading them. Asserting this ownership premium is theft is pretty ridiculous on the face of it.

Also, imagine if the guy loading trucks for Amazon did make 100x more money just because he’s connected to a high-growth internet company. The economy would be thrown into chaos because no logistics workers would be willing to do less remunerative but essential work like unloading food at the grocery store without substantial wage increases that get passed to the consumer as higher food/gas/delivery prices. Many sectors without productivity growth would get annihilated by Baumol’s cost disease, and consumers would have to spend a much larger share of their income on anything that is trucked around (which is basically everything we buy).

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#93

Post by germinalphrase »

seanmcdirmid wrote: post #62
germinalphrase wrote: post #21

Earlier quoted context omitted.

“ It's not news that you don't pay taxes on invested assets you hold and don't sell.” Unless, of course, we’re talking about the only meaningful asset an average person might own -their house- then we tax its assessed value every year.

Property taxes fund local services and act as pressure for property to be put to productive use; they specifically exist so property isn’t used solely as a speculative investment. I’m not sure what a tax on general investment would do but discourage speculative investment in general.

“they specifically exist so property isn’t used solely as a speculative investment”

Judging by the increasing amount of US housing stock owned by investment firms, this doesn’t appear to be working.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#94

Post by jmpman »

jcadam wrote: post #67
mprev wrote: post #38

Earlier quoted context omitted.

Are you suggesting that governments are colluding with journalists to deliver a particular narrative? Or are you saying that journalists and their editors believe there's a need for wealth taxes and so they're pushing that line?

Probably some of both. A wealth tax would discourage investment and encourage consumer spending, and would hit the middle class the hardest. As usual - these things are always sold as being targeted at the "rich." Though, it would be interesting to see how people would try to game/avoid it. Instead of investing in stocks, a middle class person looking to preserve some wealth could buy things like physical gold/silver…

Do you define middle class as having wealth above $50M?

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#95

Post by nickpp »

QuixoticQuibit wrote: post #58
nickpp wrote: post #39

Earlier quoted context omitted.

Once a new tax is imposed, its limits and brackets are probably the easiest things to change about it. Moreover, if they aren’t inflation-adjusted, the Fed will make sure we’ll all get there pretty soon, just by printing money like they are doing these days. Anybody who has any legally earned wealth has already paid his fair share to the society by simply creating the corresponding value. Usually value creators get a…

So Jeff Bezos and Elon Musk (and other stupidly rich executives) created hundreds of billions of dollars of value themselves? Of course not. They got their through exploitation. Any profit that a business has is value not being paid back to the actual workers who created the value of the company through their labor. Nobody has ever worked for $100 billion. Or $1 billion. Or $100 million.

> Nobody has ever worked for $100 billion. Or $1 billion. Or $100 million.

Of course. However, some of us had had a positive impact on the society measurable in Trillions, usually through ideas and entrepreneurship. It is preferably for us a society to encourage such endeavors.

Neither Bezos nor Musk have created that value by themselves. They did it together with investors, partners, employees and clients, all of whom were rightly and fairly compensated and became better because of it.

The only unhappy are those who did not participate to any of it, but they have no right to complain, just envy.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#96

Post by gruez »

dagw wrote: post #57
ykevinator3 wrote: post #51

Earlier quoted context omitted.

Agreed but paying an exec $1 in compensation salary and $100m in stock should also be illegal.

It shouldn't be illegal, it just be taxed at a reasonable level making it more equivalent to getting the same salary in cash.

AFAIK that's already the case. People are conflating the value of the stock at the moment you're paid (which is taxed as regular income) and the gains that come afterwards (which is taxed as capital gains).

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#97

Post by lightcatcher »

NovemberWhiskey wrote: post #7
johnrbent wrote: post #4

Earlier quoted context omitted.

So less than 3.4% on average. How much do you pay?

I pay 0% federal income taxes on my wealth; the same as everyone else.

How much wealthier would you be if you paid no taxes at all in tax year 2020?

An example with some made-up numbers that could apply to some HN users:

Let's say your net worth was $500K at the start of the year, you earned $200K income in the year and spent $50K. Without taxes, your end of year net worth would be $650K. However, you pay $40K+ in taxes, which makes your net worth "Regular" people build wealth through income, while wealthy build wealth through appreciating assets. The point I take from headlines like these are not "US executives illegally avoid taxes", it is "tax rules favor the wealthy". Increasing tax on appreciated assets by raising capital gains rates, removing step-up basis, or (maybe) taxing unrealized gains could shift some of the tax drag on wealth from income earners towards asset holders. All of these would need to be done very carefully to not overly hurt small business owners, perhaps through something like a lifetime capital gains exemption (similar to gift exemption, apparently existed in Canada in the 80s[0]).

[0]: https://static.twentyoverten.com/5b9280ab0420c067d6b36505/Wo...

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#98

Post by sologoub »

germinalphrase wrote: post #17
chromatin wrote: post #8

Earlier quoted context omitted.

I pay zero percent on my wealth, just like you. You should consider revising your comment as you were duped by poor journalism.

Do you not consider property tax a wealth tax?

Real property (houses, land, etc) derive much of their value from the surrounding context - roads, population, jobs, etc. these are paid for collectively, so a property tax to me is more like HOA dues to the city/county that help make it livable.

However, if the property tax is higher than those infra needs, then a portion of it is totally a wealth tax. Just haven’t seen that in CA.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#99

Post by nickpp »

Retric wrote: post #85
nickpp wrote: post #31

Earlier quoted context omitted.

Not a historian but I suspect that property taxes were originally meant to pay for things like infrastructure, garbage, police, firefighters, schools, etc. Pretty much community costs incurred by the development of the area including and around your property. Of course, without actual transparence and accountability and considering the state of said infrastructure, schools, etc, it is hard to know where these taxes a…

That doesn’t explain taxing boats/cars/etc. The historic reality is property tax was equivalent to wealth tax for thousands of years. It’s only recently that intangible assets became so valuable.

Actually car taxes were also justified by infrastructure costs around here. No idea about boats, as I don't own one.

I suspect you may be right about property tax tough - historically land-owners were rich-lord types and had to pay "fealty" to the crown. So I guess tax history is complicated?!

There is also the modern issue of pollution taxes which should be taken into consideration. For example it's long past time for a carbon tax...

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#100

Post by SamoyedFurFluff »

NovemberWhiskey wrote: post #78
lastofthemojito wrote: post #36

Earlier quoted context omitted.

Previous discussion of this ProPublica story rightly pointed out that there was too much focus on billionaires (legally) not paying taxes while their assets are appreciating (but not yet sold), and not enough focus on the fact that often taxes aren't even eventually paid (a grey area mix of legal/illegal). From the original ProPublica article [0]: >It’s clear, though, from aggregate IRS data, tax research and what li…

Personally, I think if we're going to have a discussion on this, it ought to include some element of "why does the federal government keep getting more expensive at such an amazing rate?" It's astonishing to me that (in constant dollar terms), the tax receipts of the federal government have doubled since the height of the Cold War in the 1980s and are three times what they were during the Apollo program. They are est…

Makes sense to me given the ballooning healthcare costs and Medicaid/Medicare/VA, and then the aging population + social security underwater.
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