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Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

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Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#201

Post by btilly »

tonystubblebine wrote: post #6

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future. I know this isn't always the case with everyone. And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. But this incentive is so blatantly obv…

As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high, I see that as an incentive to hide the profits by investing in the future.

Let me introduce you to how private equity works. They have figured out how to hide the profits by buying out the original owners!

They buy companies by having them borrow heavily to "invest" in buying out the previous owners. And then try to keep the corpse of the company looking good enough that they can flip to someone else. The trick is that debt payments count against profits so the new owner saves on taxes.

The people who set up the deal get paid in a variety of ways. But in the end what they get paid tends to be roughly proportional to how much money no longer goes to Uncle Sam. So when you see someone who got rich in private equity, like Mitt Romney, it isn't a bad approximation that their personal wealth reflects how much money the US no longer receives in taxes due to the deals that they structured.

Note, if you're over 50 you may remember the "junk bond kinds" of the 1980s. That's the same thing as private equity. They just rebranded themselves after their actions gave them a bad name.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#202

Post by [deleted] »

tonystubblebine wrote: post #83
s_dev wrote: post #46

Earlier quoted context omitted.

>As a business owner, when taxes are low, I see that as an incentive to pocket profits. But when taxes are high Where do you live that taxes are as volatile as petrol prices? Taxes change in Ireland but in terms of decades.

The United States. Corporate tax rate dropped from 35 to 21 in 2016. There is talk of reraising them and so I'm mostly projecting my behavior if they do get raised.

[deleted]

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#203

Post by benmccann »

0xB31B1B wrote: post #49

What frustrates me about this whole argument over wealth taxes is that the arguments aren't grounded in facts. The reality is that we "pay" for inequality with reduced productivity. A great example of this is "single family home neighborhoods" in urban areas. They have no societal benefit, they are essentially subsidized land use patterns for the well off, and it makes it harder for less well of folks to move to area…

If you're talking about single family homes - that's a property tax, which is not what people are normally talking about when they discuss a wealth tax

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#204

Post by patagurbon »

czbond wrote: post #127

Near 50% of American pay zero federal tax. The top 10% of all Americans pay 69% of all federal taxes currently. This is a point 'left out' of current discussions. Instead of increasing entitlements or adding yet more taxes - we lower the size of the government spending UNTIL it matches where most people pay for the services received in a more scaled manner. Source: https://taxfoundation.org/summary-latest-federal-inc…

That's not surprising, nor necessarily a problem. The top 20% of earners make ~50% of the income in the US. And those people will have more margin to make up for that bottom 10% that makes 1% of the income.

Per wikipedia

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#205

Post by tick_tock_tick »

mikepurvis wrote: post #27
muststopmyths wrote: post #15

Earlier quoted context omitted.

My guess: because they hope to be wealthy some day.

A famous formulation of that is: "John Steinbeck once said that socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires."

I mean it makes sense socialism removes any real chance of your country being successful so if you think your country has a chance accepting defeat would be horrible.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#206

Post by spaetzleesser »

rglover wrote: post #133

The real solution: a flat tax. 20% for everyone, regardless of take. A fair, non-political solution. Dismantle the IRS, ditch all of the complexity.

A flat tax is a big tax cut for higher incomes without reducing complexity. The complexity of the tax code is to determine taxable income. The flat tax doesn’t help with that. Once you have determined taxable income then calculating taxes owed is easy no matter how the curve looms.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#207

Post by TheDong »

bpsh wrote: post #184
TheDong wrote: post #75

Earlier quoted context omitted.

This is not accurate. For the US, [0] shows the 90% percentile to be $1.2 million net worth. This data is sourced from the federal reserve's survey [1]. [0]: https://dqydj.com/average-median-top-net-worth-percentiles/ [1]: https://www.federalreserve.gov/econres/scfindex.htm

Well I never said it was for the US, instead it's globally. If you are in the US you would have even more advantages.

The article this comment section is on is entirely about the united states and the wealthy in the context of the united states.

You would have had to make it explicitly clear that you were talking about something other than the rest of the comments (the whole world) for your comment to be read as such.

Anyway, comparing wealth between the developed world and the developing/less-developed nations is tricky, and needs to be done with care. I don't think using that number in this context is useful.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#208

Post by zdragnar »

nostrademons wrote: post #60
zdragnar wrote: post #34

Earlier quoted context omitted.

Strange. Business owner friends of mine have taken the opposite approach over the years. Taxes low? Start up something new, get it going. Taxes go up again? Sell it off (if they haven't already) and go back to early retirement doing whatever. Maybe it is largely the type of business that behavior changes. Their last venture was starting up an aquaponics farm in a borderline urban / suburban area, though I haven't kep…

I think the OP is talking about investing within the business. The business is a separate legal entity with its own income, expenditures, and assets that is under the control of its owner. Assuming that you want to continue owning the business as a going concern, it makes sense to maximize expenditures (by investing in the future) and minimize profits when tax rates are high. But if you're happy entering and exiting…

Ah yes, I did miss that, thank you.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#209

Post by thoughtstheseus »

Just throwing some thoughts out here. Wealth and income need to be broadly distributed to create somewhat equal power dynamics between people and communities. If the market is not creating that type of outcome government has stepped in through taxation and spending to mitigate this imbalance somewhat. If you want a smaller government more people need more wealth and income so they don’t need government services and can do it themselves.

Wealth taxes are great in theory but tough to implement. The value of large pools of assets can be easily reduced by marketability and liquidity discounts. See the real estate industry. I’d like to see wealth taxes work but I think having value accrue to people over capital is a better approach.

Re: Media Owned by Wealthy Are Quick to Tell You Wealth Taxes Are a Bad Idea

#210

Post by dmje »

I just see tax dodgers as morally redundant people. I try hard to think about it another way, but I just can't.

It seems obvious to me from reading extensively around this that we have very little basis for arguing the case for free will. Our entire existence: our personal lives, our business lives, our investments, our health, our wealth - are driven by luck.

I run a successful small business in the UK. I can squint and pretend that everything about this success is down to me, but the reality is:

I'm white

Middle class

Have a great family

Have had the luck to have a wonderful family background including supportive parental influence as well as a generational (mother + grandparents) financial safetynet all the way through my life.

Have (so far) had great luck as far as health is concerned.

Are ANY of these things down to me and my skill? No, none. They are down to luck.

Am I a good business person? Yes, I like to think so. What's that down to? Luck.

So for me, now, to turn around and say "No, I'm not paying my taxes. I don't believe in taxes. I don't believe in helping those less well off than me. I don't believe in helping people. I don't believe in the state"...? That is bullshit. Utter, total bullshit. And it makes me f*g sick when I see people gathering vast quantities of wealth and then somehow making out that they are somehow separate from the [majority] of people in this world who really badly need help.

We should all be getting off our fat, lucky arses and doing more to help people instead of squirreling away our wealth and pretending we're somehow special. And we should start by taxing the bejesus out of the wealthy. They [we] [I] can afford it.

Rant over. As you were.

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