Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Wealthiest U.S. executives paid little to nothing in federal income taxes

thestar.com

Post reply on HN
Print view View original

131–140 of 141 posts

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#131

Post by Retric »

s1artibartfast wrote: post #130
dexterdog wrote: post #129

Earlier quoted context omitted.

How do renters not pay property tax? It's part of the cost of the property that the rent is based on.

Not any more than I pay corporate taxes at the groceries because it is baked into the price of goods. In some places, property taxes could impact rent, but in many places it doesn't matter because the price of rent is much higher than the cost of owning the rental (including tax). This is most true in places where you can't build more housing inventory.

It’s not that home ownership isn’t more common as you move up the income scale. It’s that cars/homes become a smaller percentage of a persons income and overall wealth. At the extreme end, Bill Gates may own a 150 million dollar house, but that’s ~1/30th his annual income and 1/1,000th of his wealth. It’s not that nobody wealthy owns several properties, it’s that they generally have other things they want to spend their income on.

Meanwhile owning a car worth even 3k is 1/10th the income of some at 30k, and many people have much more expensive cars at that income level. Worse the rate is generally higher on cars than homes. Similarly, nobody actually rich is “house rich” the way retired people are where their house is 10-30x their annual income. (500k to 1.5 million house with a 50k income.)

So, even if you exclude rental income it’s still very regressive.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#132

Post by s1artibartfast »

Retric wrote: post #128
s1artibartfast wrote: post #124

Earlier quoted context omitted.

How is property tax regressive? Renters don't pay it and it is a flat tax across home value?

Because people generally spend a lower percentage of their income on cars and housing as their income increases. The minimums for shelter and transportation are hard to avoid. Put another way the percentage of people making say 50k with a 20+k worth of car(s) is greater than the percentage of people making 50 million a year with 20+ million in car(s). Similarly it’s not that rare for retirees to be house rich owning…

I see what you are saying. The question then becomes which taxes we want to be progressive or regressive, and what we want to tax in the first place.

I don't think everything needs to be taxed, or all taxes should be progressive.

In this light, I'm not sure what the rationale for a tax on yachts would be. It seems like it could be a way to generate government income, or discourage yacht ownership, but I'm not convinced these are sufficient reason.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#133

Post by s1artibartfast »

Retric wrote: post #131
s1artibartfast wrote: post #130

Earlier quoted context omitted.

Not any more than I pay corporate taxes at the groceries because it is baked into the price of goods. In some places, property taxes could impact rent, but in many places it doesn't matter because the price of rent is much higher than the cost of owning the rental (including tax). This is most true in places where you can't build more housing inventory.

It’s not that home ownership isn’t more common as you move up the income scale. It’s that cars/homes become a smaller percentage of a persons income and overall wealth. At the extreme end, Bill Gates may own a 150 million dollar house, but that’s ~1/30th his annual income and 1/1,000th of his wealth. It’s not that nobody wealthy owns several properties, it’s that they generally have other things they want to spend th…

Honest thanks, I got that from your other post. I would argue it is some sort modified regressive tax, where the bottom 35% of the people who don't own pay nothing, then your regressive tax percent of income kicks in.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#134

Post by noduerme »

Aqueous wrote: post #24
germinalphrase wrote: post #21

Earlier quoted context omitted.

“ It's not news that you don't pay taxes on invested assets you hold and don't sell.” Unless, of course, we’re talking about the only meaningful asset an average person might own -their house- then we tax its assessed value every year.

Fair enough - however, what would the equivalent of this look like for invested assets? We are basically forced to sell to cover every year to pay taxes on accrued value?

So... imagine there's some fictional ETF that rises at exactly the rate of inflation. At the end of a year, your $100k investment is $102k. Still buys the same number of Big Macs, potatoes, whatever.

You then have to pay tax on the $2k gain. You've lost purchasing power. Let's say your balance is now $101,800.

If you looked at this as monetary policy (rather than tax policy), wouldn't this essentially be a negative interest rate? Over time, wouldn't inflation rise exponentially?

Now, suppose the ETF tries to pace inflation + tax. Where does this extra money come from? Debt? Thus more inflation.

I find it interesting that the poster from Denmark considers it no big deal; Denmark has had negative interest rates for several years. That may make sense in a small, aging country that needs to stave off deflation, but the US currently has the opposite problem - inflation. Wouldn't a tax on inflationary "gains" send it into hyperdrive?

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#135

Post by legulere »

Aqueous wrote: post #14

I'm a little baffled why there have been all these articles of this category recently. It's not news that you don't pay taxes on invested assets you hold and don't sell. That's how it works for everyone who invests their savings. This isn't a 'tax-avoidance' tactic - it's just what owning something is. Are we really advocating for a world where you are taxed just for appreciation? Maybe we are but at least be honest…

> That's how it works for everyone who invests their savings.

In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.

Rich People disproportionately benefit from this. For saving for your pension there’s 401(k) in the US.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#136

Post by jpetso »

imtringued wrote: post #121
nickpp wrote: post #27

Earlier quoted context omitted.

During COVID governments spent and spent. Now the check must be paid. By us, as always. Since income is already taxed at about 50% pretty much everywhere in the developed world, it is time to tax the existing wealth. These articles are meant to prepare the public for it. They influence but also measure the public support for a wealth tax. It could be an all wealth or only a unrealized capital gains tax, similar to pr…

>During COVID governments spent and spent. Now the check must be paid. By us, as always It doesn't. The US is the deficit black hole of the entire world. All the trade surplus nations are suckers that give you free stuff. Germany wants to run an export surplus for all eternity. How are importing nations supposed to pay their debts back if Germany never reverses positions and starts a buying spree to balance its selli…

So you're basically saying that Germany's a sucker and Greece benefited from Germany's generosity. Sounds great in theory, but my impression was that despite all the debt haircuts, it was much less fun to be in Greece than Germany at the time.

If you win at (maintaining) debt, aren't you supposed to improve your lot in life? Just being a "deficit black hole" doesn't necessarily give you an edge, just like credit card debtors and beggars on the street always run the risk of getting hit hard at the slightest surprise, and often are. Whereas not being in debt is perhaps the nominally less efficient way, but it prevents you from getting messed up by your loan sharks again and again. In that sense, trade surpluses are a risk avoidance strategy and as such, make a good match for traditionally risk-averse Germany.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#137

Post by spywaregorilla »

nickpp wrote: post #101
spywaregorilla wrote: post #90

Earlier quoted context omitted.

If you are taxed 99 cents for every dollar you earn, you're still better off earning the dollar.

Motivation is a funny thing. For example if someone else benefits more than me from my own work, I may decide I'd rather not do it at all. After all, just relaxing, smoking weed and playing on my Xbox is a really awesome way to spend my time.

That analogy doesn't really work when it comes to investing.

edit: and if you're so wealthy that your tax rate is above 50% in this setup, it's probably fine if you want to smoke weed and play xbox. That's not a concern for the bottom 99%.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#138

Post by spywaregorilla »

hammock wrote: post #108
spywaregorilla wrote: post #90

Earlier quoted context omitted.

If you are taxed 99 cents for every dollar you earn, you're still better off earning the dollar.

Cash flow and earnings are not the same thing.

I'm not sure how that matters unless you are paying taxes on an accrual basis. Which you technically can do as an individual.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#139

Post by nickpp »

spywaregorilla wrote: post #137
nickpp wrote: post #101

Earlier quoted context omitted.

Motivation is a funny thing. For example if someone else benefits more than me from my own work, I may decide I'd rather not do it at all. After all, just relaxing, smoking weed and playing on my Xbox is a really awesome way to spend my time.

That analogy doesn't really work when it comes to investing. edit: and if you're so wealthy that your tax rate is above 50% in this setup, it's probably fine if you want to smoke weed and play xbox. That's not a concern for the bottom 99%.

> That's not a concern for the bottom 99%.

It should be: top 1% of income earners pay 40% of all federal income taxes. Also, entrepreneurs capture only a few percent of the value they create - the rest helping move forward the society and everybody else.

We, as a society, should encourage high contributors and value creators since we are all gaining from their work. Moreover, we should be extremely careful to not discourage potential high contributors through the populist measures we are taking.

Re: Wealthiest U.S. executives paid little to nothing in federal income taxes

#140

Post by spywaregorilla »

nickpp wrote: post #139
spywaregorilla wrote: post #137

Earlier quoted context omitted.

That analogy doesn't really work when it comes to investing. edit: and if you're so wealthy that your tax rate is above 50% in this setup, it's probably fine if you want to smoke weed and play xbox. That's not a concern for the bottom 99%.

> That's not a concern for the bottom 99%. It should be: top 1% of income earners pay 40% of all federal income taxes. Also, entrepreneurs capture only a few percent of the value they create - the rest helping move forward the society and everybody else. We, as a society, should encourage high contributors and value creators since we are all gaining from their work. Moreover, we should be extremely careful to not dis…

> It should be: top 1% of income earners pay 40% of all federal income taxes

That's income. This question is about wealth.

Post reply on HN