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The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

warren.senate.gov

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Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#121

Post by azth »

It's always interesting that this issue keeps coming up, whereas Islam solved it over 1400 years ago through the Zakat system.

An extremely reasonable 2.5% would be owed on money sitting in the bank for one lunar year (it's a form of "wealth tax" if you will). It has been documented that in Iraq during the Ummayad period where everyone paid their share of Zakat, there were no more poor people left to accept it.

And that's it, no income tax or messing around with it. It works.

Livestock and produce have a separate calculation, but most of us here are not in that business.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#122

Post by trutannus »

sna1l wrote: post #72
trutannus wrote: post #34

Earlier quoted context omitted.

They have no capital gains tax. Overall the wealth tax is a lower cost to individuals than the style of wealth taxes en-vogue in a lot of places now. Wealth taxes require liquidation of assets to pay, given the nature of wealth. When you liquidate assets, you pay cap gains tax and then have to pay the wealth tax. In Switzerland, you just pay the wealth tax. Basically, you have to be taxed to pay the tax in most place…

France is an interesting example. I believe their wealth tax targeted more than just the super rich and it led to a heavy exodus of millionaires from France. Also by not having an exit tax, it was easy enough for people to leave France to avoid this.

If I'm not mistaken, Switzerland the wealth tax hits everyone as well. The starting is something like 200K CHF. That said, the actual percentage is very low, like 0.2%. Having read a few bits of the Swiss tax code, I'd actually prefer to have this wealth tax like that over a cap-gains tax, since it would overall be a lower percentage of my capital asset appreciation than a CGT.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#123

Post by tablespoon »

sna1l wrote: post #72
trutannus wrote: post #34

Earlier quoted context omitted.

They have no capital gains tax. Overall the wealth tax is a lower cost to individuals than the style of wealth taxes en-vogue in a lot of places now. Wealth taxes require liquidation of assets to pay, given the nature of wealth. When you liquidate assets, you pay cap gains tax and then have to pay the wealth tax. In Switzerland, you just pay the wealth tax. Basically, you have to be taxed to pay the tax in most place…

France is an interesting example. I believe their wealth tax targeted more than just the super rich and it led to a heavy exodus of millionaires from France. Also by not having an exit tax, it was easy enough for people to leave France to avoid this.

> France is an interesting example. I believe their wealth tax targeted more than just the super rich and it led to a heavy exodus of millionaires from France. Also by not having an exit tax, it was easy enough for people to leave France to avoid this.

It probably wouldn't work that way in the US, since it has an exit tax and it also taxes income globally regardless of where you currently reside (and I'd imagine any wealth tax would work similarly).

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#124

Post by tablespoon »

avalys wrote: post #30

Most of the “ultra-wealthy” have their wealth in the form of stock in public companies. This is certainly true for the examples she lists. If they’re all going to have to sell 2% of their holdings each year to pay for this wealth tax, who are they going to sell to and where is the money going to come from? It seems like this is a recipe to generate some temporary funding for the US government by selling off our natio…

> Most of the “ultra-wealthy” have their wealth in the form of stock in public companies. This is certainly true for the examples she lists. If they’re all going to have to sell 2% of their holdings each year to pay for this wealth tax, who are they going to sell to and where is the money going to come from?

The stock market.

> It seems like this is a recipe to generate some temporary funding for the US government by selling off our national assets (e.g. ownership of major US companies) to foreign investors.

Without domestic ownership requirements, that will happen anyway, for instance: https://www.marketwatch.com/story/jeff-bezos-just-sold-nearl... ("Jeff Bezos has sold $6.7 billion in Amazon shares over the past week"). I reckon that's about 3% of his wealth.

And frankly, the wealthy have been expatriating US national assets for a long time, just not the paper financial ones. I don't see why we should be especially concerned with those, since what they mean is controlled entirely by US law.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#125

Post by jsilence »

dahfizz wrote: post #47
jsilence wrote: post #16

Earlier quoted context omitted.

Yeah, not taxing the rich also does not work. See the trillion Dollar tax break Pres. Trump and the GOP implemented. The savings were supposed to somehow trickle down to the "lower decks", but this has proven not to happen. Meanwhile the ultra rich are getting ultra richer and the rest is getting poorer. So lets globally coordinated tax the rich for a while in a way that they can not evade their net wealth to some ot…

> The savings were supposed to somehow trickle down to the "lower decks", but this has proven not to happen. Do you have more info on this? The middle class literally paid less in taxes due to Trump's cuts[1]. The rates were lowered across the board and the standard deduction (negligible to the 1%, a huge chunk of change to the middle class) was increased. [1] https://www.bloomberg.com/news/articles/2020-10-27/the-tr…

"...the Trump administration claimed that its corporate tax cuts would increase the average household income in the United States by $4,000. But two years later, there is little indication that the tax cut is even beginning to trickle down in the ways its proponents claimed."

https://www.americanprogress.org/issues/economy/news/2019/09...

https://www.rollingstone.com/politics/politics-features/trum...

https://www.salon.com/2020/12/27/50-year-study-of-tax-cuts-o...

https://www.motherjones.com/politics/2020/06/trumps-tax-cuts...

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#126

Post by [deleted] »

jeffbee wrote: post #81
onlyrealcuzzo wrote: post #68

Earlier quoted context omitted.

>60% of homeowners are in debt on their house, though. So they are getting appreciation on leverage. I would argue the median homeowner is being subsidized, having a negative wealth tax. The local government takes away 1%, but the Federal government pumps up your asset price by >2% - that's a -1% wealth tax (paid entirely through inflation by non-homeowners).

Yes, there are many exemptions in tax policy for real estate. We exempt the first $500k of gains from income taxes, for example. And our whole society is structured around "building equity" i.e. making housing cost more.

[deleted]

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#127

Post by satronaut »

monocasa wrote: post #112
satronaut wrote: post #109

Earlier quoted context omitted.

you can make money if you do your research. You won't make millions over night, but you have to start somewhere. Really though, if people learned how to properly budget their time and money, change their habits, and disassociate from groups that bring them down, they'll have positive changes in their life. You can lead a horse to water but you can't make it drink though.

You can technically make money with Herbalife too. Hell, I wouldn't be surprised if a greater proportion of people made money on Herbalife versus a YouTube channel.

maybe, but can you say the same on blogging or online e-commerce. Or if somebody supplements their income doing uber/lyft or doordash/instacart?

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#128

Post by vmception »

sour-taste wrote: post #76
vmception wrote: post #20

Okay I read this. It gives no details on what loopholes would be closed, and then conflated that with tax cheats and that a well funded IRS will solve both. A well funded IRS will just be rubber stamping the compliant tax reducing methods faster. Although most constituent's experience with the IRS is retroactive and adversarial, wealthier people's experience with the IRS is pre-emptive and collaborative. It is a tota…

I believe most of this is based on public reporting by propublica: https://www.propublica.org/article/the-secret-irs-files-trov...

Okay, I don't agree with the "true tax rate" terminology or methodology. Not necessarily in response to you, just that article and for anyone passing by.

Changing values of assets are not income. Taxing net assets would require so much extra liquidity that may not exist, and if people wanted to be compliant with a wealth tax they will have to avoid illiquid assets which would be the most counterproductive fiscal and monetary policy for the economy. You want to get more people to go into illiquid assets to make them liquid, big yikes.

It is disingenuous trying to equate "$1 added to their net worth" to a wage worker adding $1 to their net worth, even if it was purely for explanation purposes. But here it is intentionally made to seem like something else. Its would make more sense to add a sales/excise tax to the buyers that push up the price of assets as they are the only ones moving liquid value around. Like a new uptick rule. Makes more sense to tax appraisers for illiquid assets if they uptick. I don't think any of these make real sense, but makes more sense than taxes people subject to the whims of the market.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#129

Post by bradlys »

rlewkov wrote: post #90

The ultra wealthy, if not breaking the tax law, are paying what the government believes they should pay and are not avoiding anything. Congress wrote, voted on, and passed the tax laws.

> The ultra wealthy, if not breaking the tax law, are paying what the government believes they should pay and are not avoiding anything. Congress wrote, voted on, and passed the tax laws.

What would if the winning team always ended up writing the rules in such a way to where they were always winners and only winners could write next years rules?

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#130

Post by rufus_foreman »

ramblinrose wrote: post #108
csallen wrote: post #3

> In 2018, Warren Buffett had a net worth of $84 billion. The effective tax rate on his mountain of wealth? 0.006%—orders of magnitude lower than the tax rates paid by most middle-class families. What tax rate do middle-class families pay on their net worth? 0% I believe, since we don't have wealth taxes?

How is this the top comment? It does nothing to move the discourse forward. You are trying to slam the brakes by homing in on some tricky terminology. I wish this kind of comment would get downvoted into oblivion anytime the topic of a wealth tax comes up, whether or not you agree with it. The difficulty you are having in parsing out the comparison here is because the comparison is difficult to make (and possibly you…

>> Nowhere does it mention an existing "wealth tax"

Well of course not. There isn't one. And the Senate can't pass one because the Constitution (happy birthday) doesn't allow them. Elizabeth Warren knows that a wealth tax is unconstitutional. She swore to support and defend the Constitution. And she is championing a wealth tax.

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