Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals • Hacker News Board

Re: Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals

#51

Post by JoshuaDavid » Fri, Apr 15, 2022, 3:09 AM UTC

cowvin wrote: post #47

One thing to note is that the wealthy will never pay any capital gains tax on their stock holdings. While they are alive, they simply take out low interest loans against their stocks. When they die, they pass on their stocks to their children taking advantage of the step up in basis: ( https://www.investopedia.com/terms/s/stepupinbasis.asp ) So now their kids possess a ridiculous amount of stocks and will never need…

That honestly sounds like the step up in basis is the issue here, especially if it's uncapped, rather than the lack of taxation on unrealized and possibly non liquid gains.

Re: Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals

#52

Post by credit_guy » Fri, Apr 15, 2022, 6:36 AM UTC

cowvin wrote: post #47

One thing to note is that the wealthy will never pay any capital gains tax on their stock holdings. While they are alive, they simply take out low interest loans against their stocks. When they die, they pass on their stocks to their children taking advantage of the step up in basis: ( https://www.investopedia.com/terms/s/stepupinbasis.asp ) So now their kids possess a ridiculous amount of stocks and will never need…

Aren’t you omitting something here? Like the fact that the step up in basis happens after the inheritance tax is paid?

If I buy stock for $10 million and in 40 years it appreciates to $70 million (an average 5% annual growth), and then I die, my kids will pay inheritance tax on the $60 million capital gain. Then the new basis will become $70 million. What exactly do you propose it to be?

Re: Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals

#53

Post by kozd » Fri, Apr 15, 2022, 9:07 AM UTC

credit_guy wrote: post #52

cowvin wrote: post #47

One thing to note is that the wealthy will never pay any capital gains tax on their stock holdings. While they are alive, they simply take out low interest loans against their stocks. When they die, they pass on their stocks to their children taking advantage of the step up in basis: ( https://www.investopedia.com/terms/s/stepupinbasis.asp ) So now their kids possess a ridiculous amount of stocks and will never need…

Aren’t you omitting something here? Like the fact that the step up in basis happens after the inheritance tax is paid? If I buy stock for $10 million and in 40 years it appreciates to $70 million (an average 5% annual growth), and then I die, my kids will pay inheritance tax on the $60 million capital gain. Then the new basis will become $70 million. What exactly do you propose it to be?

If they want to step up the basis, shouldn't they have to pay capital gains taxes on the difference?

The estate tax's average effective rate of 17 percent (2017) is below the capital gains rate.

Re: Wealthiest Americans pay just 3.4% of income in taxes, investigation reveals

#54

Post by feoren » Fri, Apr 15, 2022, 4:56 PM UTC

rufus_foreman wrote: post #43

feoren wrote: post #35

Earlier quoted context omitted.

Setting aside the gross misunderstanding of the actual article here, even if that were what the title said, you really don't understand wealth distribution in America if you think that number would be too high . There's an estimated $150 trillion in total household wealth in the united states, and the 400 richest Americans own $3.2 trillion of that, or 2.1%. But also realize that the wealth of the super rich is growi…

>> you really don't understand wealth distribution in America A false statement. I really do understand "wealth distribution in America". Using your terms. Although "distribution" there is a propaganda term. Wealth isn't distributed. >> the wealth of the super rich is growing faster than the wealth of the bottom 90% "Super rich" is another propaganda term. During stock market downturns your assertion is simply false.…

Really trying to avoid a personal attack here but you're really asking for one. I'm genuinely curious whether people like you actually think of themselves as a good person. Do you?

You've certainly "picked a team", and you've picked team billionaire over team humanity. While morally bankrupt, such a choice might at least make a weird sort of short-sighted sense if you are currently a multi-billionaire. Are you? Otherwise you've picked the wrong team.

Actually you've picked the wrong team even if you are a multi-billionaire. Would you rather be a stone-age emperor, or a space-age mere well-to-do? Making all of humanity better benefits the ultra-rich the most, since their boat is the biggest one floating on this ocean we all share. But I guess you often need that psychopathic mindset to get to the level of the top 400; they may be mentally incapable of helping others even when it benefits them. Help other people!? Who are not me!? Impossible.

Again: a semi-sensible short-sighted sort of local minimum if you're already a billionaire. But you're not, are you?