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You Are Jeff Bezos

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Re: You Are Jeff Bezos

#71

Post by Isinlor »

coldpie wrote: post #60
deelowe wrote: post #54

Earlier quoted context omitted.

This only applies in the very limited scenario where you personally own the shares. What's to stop someone from setting up a trust, shell company or similar and then giving them all of the "wealth" while maintaining a controlling interest? From there, the individual simply extracts what they need when they need to. We're basically back to the original scenario only with more steps added in between. I assume there isn…

> I assume there isn't going to be an argument against companies "hording wealth." Mm, I dunno. Why not? Maybe Apple shouldn't be sitting on a massive pile of cash which could be put to some useful purpose.

A company owns a nuclear plant. Are they hording wealth?

"Facebook the company" owns "Facebook the website". Are they hording wealth?

Alphabet own the Google trade mark. Are they hording wealth?

My and my colleagues decided to make a joke cryptocurrency that nobody is using.

Elon Musk want to buy our company for 10 billion $, but we don't want to sell. Are we hoarding wealth?

Re: You Are Jeff Bezos

#72

Post by devoutsalsa »

missedthecue wrote: post #39
devoutsalsa wrote: post #24

Earlier quoted context omitted.

The wealthy borrow against their assets at stupid low interest rates, and those loans are not subject to income tax. Got a billion dollars in stock? Borrow as much as you need to pay for that yacht.

eventually you have to sell the stock to pay off the loan(s), triggering a tax event. If you wait until death, you get walloped by the estate tax, which is even higher than income tax.

Wait until you hear about inherited stock...

https://www.investopedia.com/terms/i/inherited-stock.asp

Say the stock you borrow against was purchased at $10, and is now worth $100. That's a $90 increase. You get hit by a bus and die. The stocks cost for tax purposes is increased to $100 for the heirs, meaning that $90 increase is not taxed as a gain (not sure about how it's tax as inheritance).

Re: You Are Jeff Bezos

#73

Post by unethical_ban »

deelowe wrote: post #54
lapetitejort wrote: post #29

Earlier quoted context omitted.

Taxing wealth acts as an incentive to spread the shares around the company instead of hoarding them. Don't want your wealth taxed? Let the workers enjoy the fruits of their labor. The same goes for ~90% brackets. Don't want your salary to be taxed at such a high rate? Put that money into R&D or worker's paychecks.

This only applies in the very limited scenario where you personally own the shares. What's to stop someone from setting up a trust, shell company or similar and then giving them all of the "wealth" while maintaining a controlling interest? From there, the individual simply extracts what they need when they need to. We're basically back to the original scenario only with more steps added in between. I assume there isn…

Perhaps a law that no entity can own more than X% of a company, and outlaw hedge funds? Thinking out loud here. I wouldn't snap my finger to make it happen, but I think it's fair for the layman to questions the status quo "why do organizations exist that allow small groups of people to play the game of timing arbitrage on the market to amass billions of dollars".

Re: You Are Jeff Bezos

#74

Post by unethical_ban »

iamricks wrote: post #45
belval wrote: post #8

Earlier quoted context omitted.

This is just another piece written by someone who does not understand how income tax works and is unable to appreciate that this problem is actually complicated. If Jeff Bezos net worth increases by 1 billion over a year, he hasn't realized any of the actual gains and that profit it purely on paper. If he chose to live on 1M$/year then he only has to pay 370k$ in taxes that's how it works for you and me and that's ho…

Doesn't the 300M he spent on the yacht get distributed into the economy? I don't understand why people want higher taxes on high income, i don't want the government to distribute that money. I rather it get distributed to the company and its employees building that yacht than adding it to the national budget.

The principle is simple: There are baseline needs in our society currently not met for a large number of people, and it is the responsibility of government to provide that baseline (food, water, shelter, basic healthcare). Beyond that, we should incentivize people to work in some fashion to be a contributing member of society.

Second and somewhat unrelated: The inequality gap is growing, shows no signs of shrinking meaningfully. The means of production are becoming more and more automated, so the owners will accumulate even more wealth while millions more lose their jobs and sources of social security. Thus, the government should ensure that the owners of the means of production are taxed to extract that accumulation and provide for the people.

Re: You Are Jeff Bezos

#75

Post by coldpie »

takinola wrote: post #66
coldpie wrote: post #14

Earlier quoted context omitted.

> Does it mean that we should tax wealth? Absolutely not. I'm not so sure. Maybe we should. Wealth hording is a real issue. I'm at least open to the idea. I agree with the rest of your comment.

What exactly is "wealth hoarding" and why is it a problem? I keep hearing this term and realize I just tune it out because it sounds like a political slogan. I am open to understanding though just in case this is a blindspot for me.

Numbers are all super ballparky, but the top 10% of US citizens hold about $60 trillion in wealth[1]. If you redistributed that to every American equally, that would put about $200,000 into each person's bank account[2]. I think that would do a lot to alleviate things like college debt, credit card debt, and all the myriad woes that come with poverty, all without printing a single dollar.

(Yes it's a complicated problem, you can't liquidate wealth like that, and obviously dropping two hundred K into everyone's bank account would probably create some weird issues. But that's a high-level overview of the problem.)

[1] https://en.wikipedia.org/wiki/File:US_Wealth_Inequality_-_v2...

[2] $60,000,000,000,000 / 300,000,000 people == $200,000 per person.

Re: You Are Jeff Bezos

#76

Post by thih9 »

I like the interactive novel as a medium to show how a really big amount of money translates to actions, decisions, power, etc.

I don't like that the actual content seems to present a very narrow and extremely simplified view. It reminds me of a political meme or a political cartoon.

Re: You Are Jeff Bezos

#77

Post by Swizec »

triceratops wrote: post #17
Swizec wrote: post #6

Earlier quoted context omitted.

> He's supposed to pay tax on income not on wealth. Yes. That’s the trap most of these arguments for taxing the rich fall into under the current system. Having money and making money are taxed differently. If you own a house and all of your neighbors sell theirs at a 30% markup, should you pay taxes on making $300,000 (for a 1mil house) this year? Maybe … seems kinda unfair though. You didn’t participate in those tra…

> If you own a house and all of your neighbors sell theirs at a 30% markup, should you pay taxes on making $300,000 (for a 1mil house) this year? In most places (not California) your property will likely be assessed higher and your taxes will be commensurately higher next year. Your house's increased value isn't treated like realized income, but its effect on your taxes isn't 0 either.

> Your house's increased value isn't treated like realized income, but its effect on your taxes isn't 0 either.

Yes true. My point is articles about “tax the rich” prey on people not understanding this.

The narrative is that “X rich person made billions and didn’t pay the same 30% tax as you!” … no they didn’t make anything. The value of their assets went up. They might even have negative cashflow to sustain that.

Re: You Are Jeff Bezos

#78

Post by throwoutway »

iliekcomputers wrote: post #2

I decided to "pay off personal taxes" >Here's where we get into the dicey business of what "personal worth" is, and how that translates to taxable income. >Answer: It usually doesn't, because rich people are master frauds and charlatans who exploit loopholes in tax code to avoid paying their fair share. >Jeff Bezos is worth $156 billion? You're using the top tax bracket of 37% and paying out $57.72 billion of that. Y…

You’re right. That’s not how it works because these are paper gains of capital (stock, which capital gains tax applies to) rather than income (W2).

Re: You Are Jeff Bezos

#79

Post by throwoutway »

missedthecue wrote: post #44
BitwiseFool wrote: post #13

>"End homelessness in the United States (-$20 billion)" Wow! Someone tell congress. $20 billion is nothing to those folks. The solution was here all along! Were it so easy...

the U.S. Department of Housing and Urban Development has a budget of almost $70 billion per year. Someone should fill them in that the internet figured out how to solve homelessness for a one-time payment only fraction of what they spend year-in year-out.

What are we paying them $70B for?!

Re: You Are Jeff Bezos

#80

Post by missedthecue »

devoutsalsa wrote: post #72
missedthecue wrote: post #39

Earlier quoted context omitted.

eventually you have to sell the stock to pay off the loan(s), triggering a tax event. If you wait until death, you get walloped by the estate tax, which is even higher than income tax.

Wait until you hear about inherited stock... https://www.investopedia.com/terms/i/inherited-stock.asp Say the stock you borrow against was purchased at $10, and is now worth $100. That's a $90 increase. You get hit by a bus and die. The stocks cost for tax purposes is increased to $100 for the heirs, meaning that $90 increase is not taxed as a gain (not sure about how it's tax as inheritance).

The cost basis resets, so say it goes from $100 to $110, the inheritor will only pay taxes on $10 of gains.

But that doesn't prevent inheritance tax, which on a billion dollar fortune will exceed 50%. Even more if you die in places like NY or CA.

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