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Facebook’s 99%: Later employees may pay almost double the tax rate

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Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#11

Post by cjdavis »

jdludlow wrote: post #8
jshen wrote: post #6

Earlier quoted context omitted.

"Of course her rate is higher." I think the vast majority of people would expect a billionaire to pay a higher tax rate than an upper middle class person. I wouldn't call that nonsense.

I'm sure that you're right, but then the vast majority of people are easily swayed by cheap political rhetoric. If they're playing by the same rules, which it appears that they are, then what's the problem? It's not like he hasn't already paid income tax on that money the first time he earned it, and his absolute tax bill is vastly larger than hers is. If not being jealous and covetous of those who make more than I d…

Nice straw, man.

Thinking that a progressive tax system is a good idea has nothing to do with being jealous and covetous of those who make more than you. If you disagree with a progressive tax system go right ahead and support your case, but you're not going to do that with bs arguments nobody is making.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#12

Post by krschultz »

jdludlow wrote: post #8
jshen wrote: post #6

Earlier quoted context omitted.

"Of course her rate is higher." I think the vast majority of people would expect a billionaire to pay a higher tax rate than an upper middle class person. I wouldn't call that nonsense.

I'm sure that you're right, but then the vast majority of people are easily swayed by cheap political rhetoric. If they're playing by the same rules, which it appears that they are, then what's the problem? It's not like he hasn't already paid income tax on that money the first time he earned it, and his absolute tax bill is vastly larger than hers is. If not being jealous and covetous of those who make more than I d…

The capital gains rate & structure is a legit policy question. Talking about flag burning laws, who wears a flag pin or not, those are cheap political squabbles.

Keep in mind, capital gains haven't always had a lower tax rate than ordinary income. There is no rule of nature that says it has to be that way. We could make the capital gains rate 0%, or 0% up to $200,000 and then 40% for everything over $200,000. Or we could make more than simply 2 rates based on the length of time it took for the gain. Or we could make it any number of other options.

Which one of these is preferable for economic or philisophical reasons is a good question. Warren's Buffet's secretary is no different than Joe the Plumber - they are a personification of the policy. It's hard to latch on to abstract reasoning but easy to see when presented as a comparison of two people.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#13

Post by walkon »

justincormack wrote: post #9
jdludlow wrote: post #8

Earlier quoted context omitted.

I'm sure that you're right, but then the vast majority of people are easily swayed by cheap political rhetoric. If they're playing by the same rules, which it appears that they are, then what's the problem? It's not like he hasn't already paid income tax on that money the first time he earned it, and his absolute tax bill is vastly larger than hers is. If not being jealous and covetous of those who make more than I d…

Capital gains are not really double taxation. Sure he paid tax, but then he earned more. Many countries charge income and capital gains at exactly the same rate, eg the UK does now.

How are they not being taxed twice? A company (which has owners) pays income tax on their profits, so the company and therefore, owners, have less capital remaining. Then, if the owners want to cash out anything from the post-income-taxed margin, they'll have to pay capital gains as well.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#14

Post by revelation »

citricsquid wrote: post #10
jshen wrote: post #6

Earlier quoted context omitted.

"Of course her rate is higher." I think the vast majority of people would expect a billionaire to pay a higher tax rate than an upper middle class person. I wouldn't call that nonsense.

Depends. The entire quip plays on peoples assumption they're both employees taking a standard wage and are "equal" besides the amounts. Unless I'm mistaken, Warren Buffet makes money from the ownership he holds, not as a salary, so the assumption people make ("of course he pays more", "what, he doesn't?!") is because they assume he's an employee and equal in everything but the amount, which isn't the case. He makes h…

I know you just want to make the case for a more differentiated view here, but what you are in fact doing is defending a higher tax rate on work than for capital gains through mere ownership.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#15

Post by diogenescynic »

jdludlow wrote: post #5

Can we please knock off the nonsense of this "Buffett secretary" talking point? Debbie Bosanke is estimated to make north of $200k per year, while Buffet is paying capital gains rates. Of course her rate is higher.

"Labor is prior to, and independent of, capital. Capital is only the fruit of labor, and could never have existed if labor had not first existed. Labor is the superior of capital, and deserves much the higher consideration." - Abe Lincoln

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#16

Post by mikeash »

citricsquid wrote: post #10
jshen wrote: post #6

Earlier quoted context omitted.

"Of course her rate is higher." I think the vast majority of people would expect a billionaire to pay a higher tax rate than an upper middle class person. I wouldn't call that nonsense.

Depends. The entire quip plays on peoples assumption they're both employees taking a standard wage and are "equal" besides the amounts. Unless I'm mistaken, Warren Buffet makes money from the ownership he holds, not as a salary, so the assumption people make ("of course he pays more", "what, he doesn't?!") is because they assume he's an employee and equal in everything but the amount, which isn't the case. He makes h…

Plenty of people know that he gets his money in a different way and still don't understand why that makes it OK for his tax rate to be so low.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#17

Post by jshen »

revelation wrote: post #14
citricsquid wrote: post #10

Earlier quoted context omitted.

Depends. The entire quip plays on peoples assumption they're both employees taking a standard wage and are "equal" besides the amounts. Unless I'm mistaken, Warren Buffet makes money from the ownership he holds, not as a salary, so the assumption people make ("of course he pays more", "what, he doesn't?!") is because they assume he's an employee and equal in everything but the amount, which isn't the case. He makes h…

I know you just want to make the case for a more differentiated view here, but what you are in fact doing is defending a higher tax rate on work than for capital gains through mere ownership.

Precisely. I inherited tens of millions, then invested it, should I pay a lower rate than a person that works for a living?

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#18

Post by jpdoctor »

They almost certainly don't understand the story: It's more likely worse than they are mentioning.

Most reporters have never heard of the 83B election. tl;dr = Zuck already paid the tax on his options for exercise, at par (0.001 $/share is typical.)

The tax system is truly brain-damaged.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#19

Post by jshen »

walkon wrote: post #13
justincormack wrote: post #9

Earlier quoted context omitted.

Capital gains are not really double taxation. Sure he paid tax, but then he earned more. Many countries charge income and capital gains at exactly the same rate, eg the UK does now.

How are they not being taxed twice? A company (which has owners) pays income tax on their profits, so the company and therefore, owners, have less capital remaining. Then, if the owners want to cash out anything from the post-income-taxed margin, they'll have to pay capital gains as well.

It's not that simple. One could just as easily make the case that workers get a lower salary due to higher corporate taxes, therefore they should pay a lower tax rate than owners. In short, it's not at all clear that a higher corporate tax rate is purely a tax on owners, and nothing else.

Re: Facebook’s 99%: Later employees may pay almost double the tax rate

#20

Post by newbusox »

revelation wrote: post #14
citricsquid wrote: post #10

Earlier quoted context omitted.

Depends. The entire quip plays on peoples assumption they're both employees taking a standard wage and are "equal" besides the amounts. Unless I'm mistaken, Warren Buffet makes money from the ownership he holds, not as a salary, so the assumption people make ("of course he pays more", "what, he doesn't?!") is because they assume he's an employee and equal in everything but the amount, which isn't the case. He makes h…

I know you just want to make the case for a more differentiated view here, but what you are in fact doing is defending a higher tax rate on work than for capital gains through mere ownership.

Well, there are lots of reasons as to why capital gains are taxed at a lower rate than ordinary income. I'm not advocating that any of them are correct (and, obviously, many countries tax capital gains and ordinary income at the same rate, or possibly capital gains at a higher rate), but you could argue that a lower tax rate on capital gains offsets the impact of double taxation (corporation is taxed on the income, then you are taxed on your income), or offsets inflation, or, probably most prominently, encourages investment which in turn can encourage innovation, and so on.

There presumably are other ways to reach these same results, but that's the policy choice we have made. I don't see it as much as valuing "mere" ownership over labor, just that we've made certain policy choices as to what incentives we want in our economy.

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