How the Rich Reap Huge Tax Breaks From Private Nonprofits • Hacker News Board

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#81

Post by UncleMeat » Sun, Jul 30, 2023, 1:35 PM UTC

zo1 wrote: post #52

UncleMeat wrote: post #33

Earlier quoted context omitted.

For a single person, you'll hit that tax bracket after more than $500,000 in income. This is an absolutely enormous amount of money - roughly 10x the median income. I have absolutely zero problem with income beyond this amount being taxed at 50%. I make around $600,000. My effective federal tax rate is in the low-mid 20s. I'd have to make way way way more money for my effective federal + state rates to approach 50%.

What about sales tax, VAT, fuel levies, consumption taxes, gift taxes, inheritance taxes, etc. Your state or country may not have all of the above. But they are all there to tax you to ridiculous amounts but not at the "start". Same goes for withholding or "Pay as you earn" taxes which serve to not let you see how much taxes you are paying. No one will be happy if more than half their labour is taken from then. We ca…

> What about sales tax, VAT, fuel levies, consumption taxes, gift taxes, inheritance taxes, etc. Your state or country may not have all of the above.

Sales tax adds less than 1% to my overall effective tax rate. Sales taxes are disproportionately low for high earners because high earners save larger portions of their income rather than spending it.

Gift and inheritance taxes don't start until eight figures. Not exactly something I'm especially worried about.

> Same goes for withholding or "Pay as you earn" taxes which serve to not let you see how much taxes you are paying.

???

You can adjust your W4. The very wealthy also have considerably more flexibility with withholding since less of their income is W2 income from an employer.

> No one will be happy if more than half their labour is taken from then.

If I made the 7+ figures annually or whatever I needed to approach 50% effective taxation I'd be pretty damn happy. If my taxes were raised considerably without a change in my income it wouldn't really change my life either. I'd just retire early a little bit later.

> it's a few steps away from slavery

Extremely high earners who have very high effective tax rates have some options available to them. They can change careers or work less to reduce their income. They'd just earn an income that was more comparable to the typical worker. Or they could stop working entirely - extremely high earners have plenty of opportunity to save enough money that they could live off a typical budget indefinitely using their savings. Or they can advocate politically for policies they prefer - even by spending their money to influence elections via nearly unlimited and unbounded political contributions.

Slaves can be arrested, tortured, and murdered for fleeing their captors. Heck, they can be tortured and murdered pretty much for no reason whatsoever. They can be raped and forced to bear their children of their captors. Their children (whether conceived through consent or through rape) can be permanently taken from them and also forced into slavery. They can have literacy denied to them. They can be worked to the bone in extreme conditions. And all this for a fat zero dollars in income over their entire lives.

So I'd say that there are more than "a few steps" between these things.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#82

Post by camgunz » Sun, Jul 30, 2023, 1:37 PM UTC

brigadier132 wrote: post #43

dools wrote: post #10

Earlier quoted context omitted.

The bigger problem is a fear of public spending because of perceived incompetence. The stigma comes from a time when only governments had run big bureaucratic systems. Now we can see there is little difference between public and private bureaucracies except for a lack of oversight on the latter. Still the stigma remains and all public spending is filtered through a profit making entity.

Can you actually give examples of competent public spending? The military is considered one of the competent parts of the US government and the amount of waste is staggering. On any given night 4000 people are sleeping on San Francisco's streets and the government can't solve that with a $636 million a year budget? The US spends more per student than any other nation and somehow we have worse educational outcomes?

I mean I think the tougher claim would be "there is no competent public spending in the US". The US across the Federal, State, and local governments alone spends a lot. It's pretty likely that some of it is competent.

But separately, what does "competent" mean? Is it a measure of waste, as in we could've done what the DoD does for less? Is it a measure of useless spending, as in we shouldn't have spent money on X because X doesn't work? I don't think the (narrowing to the federal government here) the US has a monopoly on wasteful or misguided spending. I think anyone here who's worked for a company can come up with plenty of examples of incompetent spending by their employer.

I think "the US is bad at spending money so it should spend as little money as possible" argument is really weird framing, because it implies that there's some entity out there that's actually good at spending money. But if anyone can find one at a large scale, or even define what "good" means, I'm interested.

Or, I'm sympathetic to a "large entities are necessarily bad at spending" argument, but then I think we need to assail big corporations with the same zeal we assail big government.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#83

Post by afavour » Sun, Jul 30, 2023, 1:38 PM UTC

prepend wrote: post #76

afavour wrote: post #60

Earlier quoted context omitted.

> I can't personally use libraries anymore because they've become defacto homeless shelters I’m sorry, I can’t take any of this seriously. I use my neighbourhood library regularly, take my kids there, it’s a wonderful place. I’m sorry you’ve had bad experiences (have you? Or did you just read online that libraries are full of homeless people?) but don’t extrapolate your experience out to a universal one.

For me libraries vary substantially. My local library in the burbs was nice, but they decided to close every Sunday and only open from 12-5 on Saturday. And oddly, 4 libraries about 10 miles apart from each other all closed after a storm due to rain damage. Even though they are different buildings build many years apart in different styles. It seems odd they wild all have water damage. And while they are closed to th…

> should we extrapolate our experiences into universal ones? What makes you think all libraries are great like yours?

I’m specifically saying we should not do that!

The OP asked for examples of competent public spending. I consider my local library to be one such example. Someone else’s library being awful doesn’t make mine an invalid example of competent spending, they’re two separate things.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#84

Post by avidiax » Sun, Jul 30, 2023, 1:38 PM UTC

zo1 wrote: post #59

jmyeet wrote: post #24

Private foundations are really a massive scam on the public purse so whenever you hear about the Gates Foundation and the like, remember it's just a tax dodge, nothing more. The way the rules work, a private foundation has to spend 5% of its capital on its intended purpose. Thing is, that 5% can include "administration" costs like paying salaries and benefits for the family. They really need to raise this to 10%, min…

Can someone explain how that charity foundation thing is a loophole? Who/what is avoiding taxes?

What do you want to do as a rich person?

* Own and enjoy fantastic properties:

- You own so many properties that you'll spend maybe a few weeks per year in each one

- So donate these properties to your own charitable foundation, give tours while you aren't there.

* Have lavish parties

- Call it a charity ball, hold an auction at some point, now you look great and the canapés are tax-free.

* Fly private

- Book a meeting for your charitable purpose wherever you are going. Now you can deduct at least part of the gas for the private jet.

* Enrich your friends and family members

- Give them sweet jobs in your foundation. Pay them competitive salaries without going through a competitive candidate search. Continue this even after you die, essentially a tax-free annuity.

* Lobby for your own business and ideological interests

- Your private foundation can advocate for all sorts of things. Fund self-serving studies. Give full-ride scholarships to top thinkers that think like you. Host tours, vacations, parties and events that benefit your position.

* Improve your social standing

- Give some money to PBS. Open a wing at a school or museum with your name on it.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#85

Post by camgunz » Sun, Jul 30, 2023, 1:39 PM UTC

willcipriano wrote: post #54

throwawayqqq11 wrote: post #14

Earlier quoted context omitted.

Do you know the last successful, citizen-only driven revolution? I would guess the french revolution ~1790 and it was a bloodbath. Today, the military technology has extended the power gap so much, that chopping heads off is no option for eg. north koreans without support from the outside. I think a violent revolution would only tighten the surveilance state.

The ven diagram of people who tell me that we can't possibly overthrow the government contrasted with people who say January 6th was a threat to democracy is essentially a circle.

We overthrow the government every two years.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#86

Post by metaphor » Sun, Jul 30, 2023, 1:40 PM UTC

refurb wrote: post #20

throwawayqqq11 wrote: post #16

Earlier quoted context omitted.

I think tieing tax income to gdp is as deceptive as hiding your income to dodge taxes. The ultra wealthy can shift their assets as they please, the poor cannot. Maybe thats the reason why the graph is steady.

I mean most of the really rich are rich from investments. Unless you're arguing that the banks and large companies are breaking the law by avoiding their reporting requirements to the IRS (to what benefit?) that makes no sense.

The games played by the wealthy and well-advised are largely within the gray areas of tax code buried between legal avoidance and illegal evasion[1]...in other words, certain sophisticated behavior remains "legal" if the IRS never gets an opportunity to audit and pursue litigation against. Herein lies the moral hazard bullshit.

To tilt these game-theoretic bets overwhelmingly in favor of the wealthy, assert continuous political pressure to defund IRS activity tasked with holding these actors legally accountable while shilling it to the ignorant public with a bullshit title like "Family and Small Business Taxpayer Protection" to bait popular support[2; § 251].

The CBO too is well-advised[3], but the wealthy very much dislike projected outcomes summarized[4] as:

> The proposal, by contrast, would return audit rates to the levels of about 10 years ago; the rate would rise for all taxpayers, but higher-income taxpayers would face the largest increase. In addition, the Administration’s policies would focus additional IRS resources on enforcement activity aimed at high-wealth taxpayers, large corporations, and partnerships.

[1] https://www.nber.org/papers/w28542

[2] https://www.congress.gov/bill/118th-congress/house-bill/3746

[3] https://www.cbo.gov/publication/56467

[4] https://www.cbo.gov/publication/57444

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#87

Post by makeitdouble » Sun, Jul 30, 2023, 1:43 PM UTC

tommiegannert wrote: post #65

dools wrote: post #10

Earlier quoted context omitted.

The bigger problem is a fear of public spending because of perceived incompetence. The stigma comes from a time when only governments had run big bureaucratic systems. Now we can see there is little difference between public and private bureaucracies except for a lack of oversight on the latter. Still the stigma remains and all public spending is filtered through a profit making entity.

The big difference is that I can choose not to pay a company I don't like, and that's fine. Governments will happily make my life crap if I don't pay taxes. I dislike greed as much as the next person, but the monopolized incarceration powers of governments are not to be forgotten. For some services, collective funding makes sense, like having hospitals that can stop the spread of diseases, or forcing pooling of money…

> The big difference is that I can choose not to pay a company I don't like, and that's fine.

Which phone company do you positively like ? Which internet operator are you paying because you want them to thrive ? How do you feel about Qualcomm and feeding them money ?

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#88

Post by cavisne » Sun, Jul 30, 2023, 1:43 PM UTC

tourmalinetaco wrote: post #3

throwawayqqq11 wrote: post #2

As a side note: One of the primary reasons of how the rich get richer and how public services (our society) degrade is, that we stopped taxing them. For decades now. Imho, its a shift of the represented interests in policies. We should stop pondering enshitification or greedflation an start seeing it as a systemic issue, that we can observe everywhere. https://en.wikipedia.org//wiki/Commodification#In_Marxist_th...

It should be noted we still “tax” them, as in the laws in place put income tax down, but they grow wealth by paying people full time to legally skirt taxation via schemes like this. However considering the current state of bloat governments are in, I’m not sure that extra money would actually mean anything. Except more to funnel into the military industrial complex and other black book projects.

I was reminded recently of a funny segment by a comedian about how everyone on Hollywood virtue signals about socialism and taxes, yet all of them use LLCs to avoid taxes.

The recent strike showed this off with the trend of publishing residual checks, all of them are made out to shell LLCs.

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#89

Post by mptest » Sun, Jul 30, 2023, 1:44 PM UTC

afavour wrote: post #60

brigadier132 wrote: post #49

Earlier quoted context omitted.

Taxes don't pay for utilities, I can't personally use libraries anymore because they've become defacto homeless shelters, the police suck. So now we are left with firefighters, national parks and local parks which I guess are not good targets for power hungry and incompetent politicians.

> I can't personally use libraries anymore because they've become defacto homeless shelters I’m sorry, I can’t take any of this seriously. I use my neighbourhood library regularly, take my kids there, it’s a wonderful place. I’m sorry you’ve had bad experiences (have you? Or did you just read online that libraries are full of homeless people?) but don’t extrapolate your experience out to a universal one.

My library has fricken 3d printers. It's quite obvious that guys' politics. "All taxes are theft" isn't the mature political position he believes it is... He was never serious lol. "Get rid of all taxes except road maintence and reduce everyone's taxes by 20%"

Re: How the Rich Reap Huge Tax Breaks From Private Nonprofits

#90

Post by JKCalhoun » Sun, Jul 30, 2023, 1:45 PM UTC

mycologos wrote: post #36

cavisne wrote: post #31

Earlier quoted context omitted.

A fraud whistleblower got a 200 million dollar bounty this year from the SEC

Cool! It looks like the SEC whistleblower program has more generous terms than 1% [1]: > The Commission is authorized by Congress to provide monetary awards to eligible individuals who come forward with high-quality original information that leads to a Commission enforcement action in which over $1,000,000 in sanctions is ordered. The range for awards is between 10% and 30% of the money collected. Submitting a tip ap…

> If you want anonymity you'll need to go through a lawyer

Sounds like a business opportunity then — the company just needs a lawyer on staff. Whistleblower fields the company with a tip, company splits the SEC reward with the whistleblower, maintains anonymity.