Let's say you own your home and it increased in value last year. Do you feel like you "made" any money from that? Unless you sold it, probably not.
Only because I live it in and can't easily sell it to raise cash. Let's say you own some stock and it increased in value last year. Do you feel like you "made" any money from that? I did and it did and I do.
Stock is easier to sell, yes, but it's still just a gain on paper until you actually sell it. Otherwise, those gains could be lost next year. Or tomorrow.
Top 10% is the upper middle class, not the ultra rich. A successful surgeon making $1M per year is paying well over 40% a year in taxes, while Bezos is paying 1%.
Bezos pays 40% too. His assets are not income. Just like your assets are not taxed. Ok, but he does that loan-against-assets hack! Well the fact is that those loans eventually need to be paid, so at some point he will pay that 40% (unless he does the step-up basis hack when he dies) Ok, but he should be paying annually like everyone else! Well, technically he is, his assets, the company Amazon, pays a lot of taxes an…
Here is one source (with 2022 data): https://taxfoundation.org/data/all/federal/latest-federal-in... - The top 1% of income earners pay 40.4% of the total U.S. Federal Income Tax receipts - Top 5% pays 61.0% - Top 10% pays 72.0% - Top 25% pays 87.2% - Top 50% pays 97.0% ...of course that doesn't include payroll taxes (Social Security).
Focusing on a single tax is silly. We should look at all taxes paid across all levels of government. Federal income tax is one of the most progressive taxes out there, so of course that's what people focus on when they want to make the point that wealthy people are being sacrificed to the altar of taxation. If you look at all taxes, the share paid is remarkably close to the share earned. According to https://itep.org…
This seems to show the same gradation but with less magnitude. Was there some other point you were making?
This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. That's how they mistakenly come up with the number that he pays less than 1% in income tax. Investments, in general, are not income (unless held less than 12 months or if they pay dividends). Imagine you had to pay income taxes every year on the unrealized gains of your 401k,…
>>This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. Rich people always borrow money on the stocks they own. In effect, those unrealized gains help them borrow money which they spend like income. I will spend part of my paycheck to buy a cup of coffee and they will spend part of the loaned money to buy the same cup of coffee.…
Yes, "collateralization counts as realization" is the bare basement minimum of what we should do to fixed up the tax code, but I'm less offended by the scenario you described -- which involves skin-in-the-game capital allocation decisions, the whole point of capitalism -- than I am by the far more common situation where the assets just sit and grow and are rewarded for their sloth by a complete absence of tax on the one activity billionaires are best at: sitting back and getting paid for being rich.
I strongly doubt that this is going to have the effect that they want it to. It won't raise the taxes that they expect it to. It won't free up inventory. It will halt construction.
New York City rent exists at an equilibrium. The draw for people to move there is so intense, that any draw downs in rent are met with upticks in immigration. Adding housing stock in NYC is not like adding housing stock in Lawnsdale Ohio. Almost by definition you cannot out build the demand for housing.
> Almost by definition you cannot out build the demand for housing.
Would love to see some justification for this claim, which tacitly suggests that adding, say, 2M extra apartments over baseline would have zero effect on our housing market.
It’ll halt construction on luxury second homes? Wonderful!
Seriously. Instead of using that land to build a $250 million penthouse Ken Griffin only spends 10 days a year in, they could probably build enough housing for 500+ middle class families.
Who will build those homes? Who will pay for them? If it were a lucrative business to build those homes I'd assume someone would be building them but that does not seem to be the case. Why is this?
Oh shit, I didn’t realize the billionaires who can have multiple homes in Manhattan are crabs in the same bucket as us. Luckily the law is much more egalatarian and bars the rich and poor alike from sleeping under bridges or stealing bread.
NYC only has 154 billionaires. The percentage of NYC's second homes owned by NYC billionaires is fractional (59,000 total units). No, this will disproportionately negatively affect middle-class people and families and fuck them hard. > I didn’t realize the billionaires ... are crabs in the same bucket as us. All of us go to the same place in the end my dude. Life is too short and too hard to spend all your time livin…
This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. That's how they mistakenly come up with the number that he pays less than 1% in income tax. Investments, in general, are not income (unless held less than 12 months or if they pay dividends). Imagine you had to pay income taxes every year on the unrealized gains of your 401k,…
>>This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. Rich people always borrow money on the stocks they own. In effect, those unrealized gains help them borrow money which they spend like income. I will spend part of my paycheck to buy a cup of coffee and they will spend part of the loaned money to buy the same cup of coffee.…
The interest rate charged generates taxes, the purchases they make with the credit they borrow generate taxes, and the money they leave in their investments generate taxes through capital usage like paying employees, paying vendors, building facilities, etc. The government taxes every little thing so don't think that money is not generating taxes at all. It actually generates more federal and state taxes by staying invested and that's why unrealized gains are not taxed. The tax revenue outcome is better that way.
This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. That's how they mistakenly come up with the number that he pays less than 1% in income tax. Investments, in general, are not income (unless held less than 12 months or if they pay dividends). Imagine you had to pay income taxes every year on the unrealized gains of your 401k,…
>>This post makes the mistake of counting unrealized gains as income. That's not how taxes or investments work. Unrealized gains are NOT income. Rich people always borrow money on the stocks they own. In effect, those unrealized gains help them borrow money which they spend like income. I will spend part of my paycheck to buy a cup of coffee and they will spend part of the loaned money to buy the same cup of coffee.…
What is the loophole? That banks are allowed to give out loans to trusted clients? Are you proposing that banks can no longer loan to rich people or what? Why does the source of the collateral being a stock matter? A normal person gets a loan based on his home value, assets, other factors, all of which might appreciate faster than the interest rate. When does it become a loophole?
You really don't want loans to be taxed as income, that would cause a lot worse problems than rich people existing...