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We are publishing the tax secrets of the .001%

propublica.org

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Re: We are publishing the tax secrets of the .001%

#161

Post by bko »

itsoktocry wrote: post #70
bko wrote: post #17

Earlier quoted context omitted.

So evidence obtained illegally outside of due-process is fair game in your book? I guess by saying "when due process failed" kind of makes it so since by definition it "failed".

> So evidence obtained illegally outside of due-process is fair game in your book? So evidence of horrible crimes should be ignored if subjective "due-process" isn't followed? You do realize that the moneyed elite have disproportionate influence over "process" and law, right? Focus on the leaks and whether they are true, not the messenger.

The "horrible crimes" of following the applicable tax laws. Got it.

I'm not focusing on the messenger. I'm questioning the ethics to violate the privacy of private individuals to try to score political points.

Re: We are publishing the tax secrets of the .001%

#162

Post by syshum »

gota wrote: post #54
failwhaleshark wrote: post #21

Earlier quoted context omitted.

That makes the lives of gold-diggers easier too. If it were opt-in that would be fine, otherwise it's an invasion of privacy of most people who aren't rich. It's almost as bad as having medical conditions and STIs test results listed publicly. Facilitating public exposure of counting other people's money doesn't help anyone except the rich to know if you can fight them in court or how much to bribe them. Fight wealth…

I disagree almost completely. I understand your concerns - but they are based on weighing personal freedom above all else, and I just don't. I think there's a tradeoff there and it is favorable in favor of disclosing tax information. To your points: > gold-diggers I'm not sure if this is an idiomatic term and out of my grasp, but if you mean that people will get romantically involved with others because of their mone…

>>but they are based on weighing personal freedom above all else

and this is largely the primary difference between American Culture /Politics and the rest of the world, specifically European nations

European nations have always been more collectivist in nature, where the US was founded on Individualism, and Individual Freedom.

There are signs that the US is losing this desire, and it saddens me because unlike you I do value personal freedom above all else, and I think the world needs a nation that continues to put personal freedom above everything else.

Re: We are publishing the tax secrets of the .001%

#163

Post by strictnein »

greenie_beans wrote: post #19
bko wrote: post #2

> Many will ask about the ethics of publishing such private data. We are doing so — quite selectively and carefully — because we believe it serves the public interest in fundamental ways, allowing readers to see patterns that were until now hidden.... We believe that disclosing the identities of billionaires who paid little to no taxes in years their fortunes grew by billions of dollars will help readers understand t…

They obviously considered the ethics of this and decided to share for “the public interest” and not “a political purpose” as you say. What politicians do with this information is another matter. They’re simply telling the story like journalists are supposed to do!

Labeling something a "True Tax Rate" (paid taxes / wealth increase) isn't journalism, it's advocacy.

Re: We are publishing the tax secrets of the .001%

#164

Post by ipython »

whiddershins wrote: post #92

Every time someone tries to make a tax targeting the ultra rich, it ends up hurting the moderately wealthy instead. Every. Single. Time. The worse tax situation is always the person who makes 500k in a good year, or sells a house they held for 25 years which went up a bunch in value. I suspect this is a significant factor in social mobility. Our tax system is punitive to people who try to leave the working class.

I agree with your general point, but your specific example of selling highly appreciated real estate is a poor one, since you incur no tax when selling your primary residence (up to something like $500k gain - over your cost basis which includes any capital improvement you made to the property) as long as you lived there for two of the last five years.

It’s a huge tax advantage for homeowners. One could argue that it is in itself unfair as it advantages people who already have large assets over those who do not.

Re: We are publishing the tax secrets of the .001%

#165

Post by tomerico »

whiddershins wrote: post #92

Every time someone tries to make a tax targeting the ultra rich, it ends up hurting the moderately wealthy instead. Every. Single. Time. The worse tax situation is always the person who makes 500k in a good year, or sells a house they held for 25 years which went up a bunch in value. I suspect this is a significant factor in social mobility. Our tax system is punitive to people who try to leave the working class.

Another point is that $500k is not in the 1% everywhere. In the Bay Area, it wouldn’t even put you at the top 5%.

https://www.nytimes.com/interactive/2019/08/01/upshot/are-yo...

Re: We are publishing the tax secrets of the .001%

#166

Post by AnimalMuppet »

fairity wrote: post #109

One of the primary mechanisms for tax avoidance is taking out loans against appreciated capital assets to avoid realizing capital gains. What's stopping the average citizen from exploiting this tax avoidance strategy? For example, every time I try to submit an order to sell stock that results in short-term capital gains, my broker should be asking me whether I want to take out a collateralized loan instead. If there…

Um, at various times I have had a home equity loan...

Re: We are publishing the tax secrets of the .001%

#167

Post by ac29 »

iooi wrote: post #138
fairity wrote: post #115

Earlier quoted context omitted.

Got it, but why don't brokers more aggressively push this program onto clients? It seems like a win-win. The debtor avoids the elevated short-term capital gains tax. The bank gets interest payments on a loan that has an almost 0 default rate due to the loan being fully collateralized.

> It seems like a win-win. It's not a win-win, there's significant risk. > fully collateralized This is not true! The underlying asset fluctuates in value and is open to lowering significantly in value, leaving the bank holding the bag.

> leaving the bank holding the bag

You probably underestimate the ability of banks to evaluate risk. Yes, they absolutely could end up underwater on an asset backed loan, but you also shouldn't assume that you can take out $1 in loans on every $1 of stock.

On Schwab's page, they say: "Schwab Bank, in its sole discretion, will determine what collateral is eligible collateral and the loan value of collateral". So, if you have some recently highly-appreciated shares of AMC for example, they might decide they are not eligible collateral, or only offer to lend you $1 for every $5 of stock.

Re: We are publishing the tax secrets of the .001%

#168

Post by notahacker »

jedberg wrote: post #137
mciancia wrote: post #135

Earlier quoted context omitted.

Hm, but income from rental is also taxed, isn't it? If so, how does it help?

The income from the rental is taxed, but slowly over decades. You don't have to take that entire tax hit in one year.

Also, people buying rental property from cash they earned from wages or selling their business pay tax on the wages/gains and the rental income, not just the latter...

Re: We are publishing the tax secrets of the .001%

#169

Post by MR4D »

fairity wrote: post #109

One of the primary mechanisms for tax avoidance is taking out loans against appreciated capital assets to avoid realizing capital gains. What's stopping the average citizen from exploiting this tax avoidance strategy? For example, every time I try to submit an order to sell stock that results in short-term capital gains, my broker should be asking me whether I want to take out a collateralized loan instead. If there…

Your example of loans is tax deferral, not avoidance. As for your examples in general, those are really good.

Collateralized loans on stock we usually call "margin loans" and are easy to get.

Also, anyone in real estate will recognize the term "HELOC", where you can get a loan against the value of your home, presumably after its value has appreciated.

I think both of those are fairly accessible, at least in the US.

Re: We are publishing the tax secrets of the .001%

#170

Post by dakial1 »

cj wrote: post #130
tomp wrote: post #117

Earlier quoted context omitted.

Can you explain how this works, how it avoids tax? Taking a $100 loan still means you’ll need an income of $100 (plus interest) future income and tax paid on this income... If you’re gonna say “they benefit in the extra capital gains between now and when the loan is repaid” - no, that can’t be it, that’s exactly equivalent to taking a $100 loan and investing in stocks instead (i.e. leverage).

1) You purchased $100 of SPY on June 15th, 2020 2) You're buying a house, and you need $100 today. 3) You sell $100 of SPY, and pay short-term capital gains (up to 37%) OR... 1) You purchased $100 of SPY on June 15th, 2020 2) You're buying a house, and you need $100 today. 3) You take a loan for $100 4) You wait until June 15th, 2021 and then sell $100 of your SPY holdings, paying long-term capital gains (15-20%) 5)…

But if the asset sale + the debt leaves you at a loss wouldn't you be able to avoid paying the capital gaibs over the asset sale?
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