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For the first time on record, the 400 wealthiest Americans paid a lower tax rate

nytimes.com

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Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#221

Post by Supermancho »

throwawaysea wrote: post #191
tartoran wrote: post #3

That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705

The Pro Publica link you provided does not show they "audit the poor instead". It shows that the IRS audits poor and rich at the same rates. Unfortunately it seems Pro Publica is succumbing to the same forces as other journalistic outlets and has started to engage in sensationalist headlines. Here is their title verbatim: > IRS: Sorry, but It’s Just Easier and Cheaper to Audit the Poor Here is the article's first sen…

> Per their own sentence, the poor and rich are audited at the same rate yet they go on to label this "disproportionate". That makes no sense.

60% of 1000 is less than 60% of 2 million. The cost/benefit of auditing the poor is likely inverted at a small scale. At a large scale, it's the right call. It makes sense, from a particular point of view.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#222

Post by dragonwriter »

commandlinefan wrote: post #214
dmix wrote: post #141

Earlier quoted context omitted.

But when the politicians use this stuff to change the law it will most certainly be the first two (expanded far more broadly) who will be targeted. They always say hand wavy stuff about billionaires whenever they get asked about paying for grand projects. But we’ve all seen how that works out in real life every time. I highly doubt that sort of categorization will ever carry over when it matters.

You’re being wildly optimistic if you think the first two (the top 1%) will ever be meaningfully impacted by any tax law change. There’s a reason the super rich all line up in support of “higher taxes”: they know that these policies always affect the middle class and never touch the upper class. That makes it harder for anybody else to break through from middle class to upper class, which is exactly what the (upper c…

> There’s a reason the super rich all line up in support of “higher taxes”

Uh, they don't all do that, so there can't be a reason that they all do. Some of them do, some of them fund tax protest groups that work to shift he tax burden further from the rich to the working class.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#223

Post by JeromeLon »

eloisant wrote: post #119
throwing838383 wrote: post #95

It's misleading because the rich that they're talking about already paid a much higher rate when they originally got the money in earnings. It's just the 2nd round of taxation: the capital gains which is lower, as it should be. And let's not forget, taxes are extremely high on everyone. The US Govt spends 38% of all US GDP, currently (recently above 40%!). https://tradingeconomics.com/united-states/government-spendi.…

I don't see why capital gains should be taxed lower. Money you get from working, from your blood and your sweat should be heavily taxed, but money you're earning just by already having money (whether it's from your work, inherited, donated from family members) shouldn't be taxed as well? What's the logic here?

Let's say that the 20% rate applies to income tax, corporation tax, dividend tax and capital gain tax.

When a company allocates $100 to its employee, the employee receives $100 of salary, pays $20 of income tax, and ends up with $80.

When a company allocates $100 to its shareholder, it's first considered as profit, so the company pays $20 in corporation tax, the shareholder receives $80 of dividends, pays $16 of dividend tax, and ends up with $66.

When a company has $100 profit but does not distribute any dividends, it has to pays $20 in corporation tax, so the shareholder value increases by $80, so if the shareholder sells the share, he receives $80 of capital gain, pays $16 of dividend tax, and ends up with $66.

So, yes, if the all the tax rates are the same, you actually end up taxing capital more than salaried income, which would be a big incentive against creating your own company.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#224

Post by standardUser »

A lot of convoluted discussion going on here. The simple truth is that in America we tax income earned from having wealth at a much lower rate than income earned from work.

And lower income earners pay a larger portion of their income to payroll taxes than the highest income earners.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#225

Post by darawk »

jellicle wrote: post #207
makomk wrote: post #48

Earlier quoted context omitted.

Careful. The two articles rely on vastly different cherry-picked definitions of who counts as rich, and neither claim is even remotely true anymore if you use the other definition. The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. This NYT article on the other hand picks out the top 400, who apparently pay lower taxes but are much more aggress…

> The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. But they don't. That's the point. Your conventional wisdom is wrong. The USA has a large number of regressive taxes, which tax the poor more heavily than the rich. These have been steadily expanded. And it has one, only one, progressive tax - the federal (not state) income tax - which has bee…

> The USA has a large number of regressive taxes, which tax the poor more heavily than the rich. These have been steadily expanded. And it has one, only one, progressive tax - the federal (not state) income tax - which has been steadily made less progressive in recent years to the point where overall taxation is at best flat and more likely slightly regressive.

Citation needed. Saying the US has "only one" progressive tax is a bit ridiculous. The income tax is by far the largest tax almost anyone pays. It's certainly the largest tax I, and everyone I know, pay. And that only increases as you get richer.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#226

Post by Supermancho »

lonelappde wrote: post #212
swebs wrote: post #159

Earlier quoted context omitted.

Maybe its time we start considering the Fair Tax plan again. https://en.wikipedia.org/wiki/FairTax

LPT: an organization with an opinion in its name is not a trustworthy organization.

> an organization with an opinion in its name is not a trustworthy organization TO ME

You have a strange life for that to be considered a "tip".

I'm usually ok with the Federal Reserve or Green Peace or Humane Society or whatever.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#227

Post by astrodust »

swebs wrote: post #159
tartoran wrote: post #3

That is correct, the rich don't pay any taxes at all (whenever the can). The was a recent thread on HN regarding tax audits [0]. What I got from that is that the IRS cannot afford to audit the rich because their taxes are complicated and they don't have enough resources to do so. They choose to audit the poor instead because, it is simpler.. link [0]: https://news.ycombinator.com/item?id=21176705

Maybe its time we start considering the Fair Tax plan again. https://en.wikipedia.org/wiki/FairTax

Ah, yes, the "tax the living hell out of the working poor" tax plan.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#228

Post by zzzeek »

kevinwang wrote: post #215
jellicle wrote: post #207

Earlier quoted context omitted.

> The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. But they don't. That's the point. Your conventional wisdom is wrong. The USA has a large number of regressive taxes, which tax the poor more heavily than the rich. These have been steadily expanded. And it has one, only one, progressive tax - the federal (not state) income tax - which has bee…

The actual article contains charts that seem to support the claim that the top 1% pay higher taxes

barely, and the point of the chart is that over the past 70 years the gap has gone from being being very progressive to almost flat or regressive based on income level.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#229

Post by taeric »

xenocyon wrote: post #29
adnzzzzZ wrote: post #7

Earlier quoted context omitted.

There were a lot more exemptions, deductions and credits back then so the effective tax rate was not even close to 70% and was not much higher than it is today. Not sure why this article didn't mention this at all but I can guess, coming from the New York Times and all.

Of course it's true that the effective rate was less than 70% (that was the top _marginal_ rate, just like 37% is the top marginal rate today); however I am curious to hear about the exemptions etc for rich people - my understanding is that these have gotten larger and more complex over time so it's surprising to me to hear that there were more loopholes in the 50s than today. Is there a source for this?

Famously, the nominal top rate used to be in the nineties.

Re: For the first time on record, the 400 wealthiest Americans paid a lower tax rate

#230

Post by dv_dt »

kevinwang wrote: post #215
jellicle wrote: post #207

Earlier quoted context omitted.

> The top 1% are indeed audited at about the same rate as the working poor, but they also pay higher taxes than everyone else. But they don't. That's the point. Your conventional wisdom is wrong. The USA has a large number of regressive taxes, which tax the poor more heavily than the rich. These have been steadily expanded. And it has one, only one, progressive tax - the federal (not state) income tax - which has bee…

The actual article contains charts that seem to support the claim that the top 1% pay higher taxes

I think there is a key language ambiguity here. Whatever your position on what the rich should pay, there is a question of what is being paid as a proportional rate of total income, vs what is being paid in absolute terms. Confounding that difference are also issues of income tax rate, vs capital gains rates and wealth vs income.

The wealthy pay in absolute terms, more dollars, but they pay a lower rate than others.

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