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We are publishing the tax secrets of the .001%

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

#241

Post by MR4D »

dakial1 wrote: post #170
cj wrote: post #130

Earlier quoted context omitted.

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?

Debt is not a loss unless you default on it.

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

#242

Post by MR4D »

alex_young wrote: post #140
jedberg wrote: post #137

Earlier quoted context omitted.

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

You can also sell it and take the gains tax free in many cases.

Short of a 1031 exchange, I'm not sure how you would do that.

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

#243

Post by RC_ITR »

motohagiography wrote: post #203
nostrademons wrote: post #187

Earlier quoted context omitted.

> (up to something like $500k gain - over your cost basis which includes any capital improvement you made to the property) In a lot of markets this absolutely hits the "moderately wealthy trying to leave the working class". Bay Area houses that went for $1.2M in 2009 now go for about $3M, for a gain of $1.8M. That's well over the $500K exclusion, even including capital improvements. Few folks will shed a tear for peo…

The people who live in hot real estate areas for years made them the hot real estate areas. Real estate appreciation isn't free money. It's people who risked moving into an area and brought their culture with them. This is what creates the value. Just because middle class people benefit from the subsidy of low interest rates that create asset bubbles does not mean that the people who raised families in a neighbourhoo…

>brought their culture with them.

Yikes. Do you really think places like SOMA, SLU, DTLA, etc. got better because rich people brought their 'culture' there? I'd recommend you visit said places and see for yourself, most of the 'culture' is in adjacent (usually historically minority) neighborhoods.

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

#244

Post by MR4D »

dantheman wrote: post #227
MR4D wrote: post #205

Earlier quoted context omitted.

Unless a huge earthquake hits it, the Bay area will always be worth more than central Kansas. At a minimum, there is one simple reason for this - the amount of infrastructure investment over the years (power, sewer, roads, etc), of which there is basically none in central Kansas, but loads of in the bay area.

It has nothing do with physical infrastructure and everything to do with social infrastructure - the people and organizations that are located there. And the weather.

The value of the land at Burning Man is much lower than the Bay Area, even though it has many of the same people.

I think the infrastructure is pretty important. Disregarding it entirely seems a bit much. Even a bad neighborhood in Philly has more value per square foot than farmland in Kansas.

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

#245

Post by WalterBright »

carapace wrote: post #157
pmoriarty wrote: post #60

Earlier quoted context omitted.

The solution to this is to eliminate wealth disparity.

Maybe. But how? I think that, if you could somehow collect all the wealth and redistribute it equally, within a few years we would see disparity reappear. Some folks are better at accumulating wealth than others. It seems to me that you would have to keep reallocating wealth. And many would then ask, what's the motive for generating wealth if it's just going to be taken away from you?

This has happened before.

After the end of WW2, the Allies decided to repudiate the ReichsMark (the German dollar) and issue a new Mark. Everyone who held ReichsMarks saw it go to zero. To get the economy going again, everyone was issued 50 of the new Deutsch Marks.

Within a couple weeks, the people who had been wealthy before were rapidly moving ahead, and the ones who had not been were again at the bottom.

I.e. the people who knew how to make money still knew how to make money, and the people who didn't still didn't.

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

#246

Post by bpt3 »

eplanit wrote: post #55
itsoktocry wrote: post #49

Earlier quoted context omitted.

> Large grain of salt required. What exactly do I need to "take" with a large grain of salt? Have you been in seclusion for the past 20 years? I'm pretty sure we're at the point where the burden of proof is on the billionaires to demonstrate they aren't funnelling away their money, not vice versa.

Evidence isn't necessary for one who is already convinced. However, there is a lot that says that the 1% actually pay the vast majority of taxes collected: https://www.publishedreporter.com/2021/04/05/op-ed-top-1-inc... https://howmuch.net/articles/high-income-americans-pay-major... https://taxfoundation.org/top-1-percent-pays-more-taxes-bott...

> However, there is a lot that says that the 1% actually pay the vast majority of taxes collected:

Yes, that's an argument against people who want Europe-style social programs while simultaneously making the US tax code even more progressive than it already is (it's generally considered the the most progressive in the world).

It's true that the top 1% to pay most of the taxes, and it's also true that the top 0.1% or so pay a significantly lower tax rate than those in the income ranges just below that level.

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

#247

Post by WalterBright »

Shacklz wrote: post #218
carapace wrote: post #157

Earlier quoted context omitted.

Maybe. But how? I think that, if you could somehow collect all the wealth and redistribute it equally, within a few years we would see disparity reappear. Some folks are better at accumulating wealth than others. It seems to me that you would have to keep reallocating wealth. And many would then ask, what's the motive for generating wealth if it's just going to be taken away from you?

> And many would then ask, what's the motive for generating wealth if it's just going to be taken away from you? The same motivation that drives some folks to study e.g. philosophy, even though it's perfectly well known that this will never make you rich: Because they like it. You don't just e.g. found a company for the sake of money - you also do it because it allows you to do things on your own terms, it gives you…

Economies based on this idea tend to do very poorly.

For one thing, people won't have money to invest in new ventures.

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

#248

Post by tomcam »

hellbannedguy wrote: post #238
MR4D wrote: post #205

Earlier quoted context omitted.

Unless a huge earthquake hits it, the Bay area will always be worth more than central Kansas. At a minimum, there is one simple reason for this - the amount of infrastructure investment over the years (power, sewer, roads, etc), of which there is basically none in central Kansas, but loads of in the bay area.

Plus beaches, mountains, culture. (I do like Kansas people better than my neighbors though?)

Or Kansans, as we call them in the business

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

#249

Post by w4 »

Shacklz wrote: post #218
carapace wrote: post #157

Earlier quoted context omitted.

Maybe. But how? I think that, if you could somehow collect all the wealth and redistribute it equally, within a few years we would see disparity reappear. Some folks are better at accumulating wealth than others. It seems to me that you would have to keep reallocating wealth. And many would then ask, what's the motive for generating wealth if it's just going to be taken away from you?

> And many would then ask, what's the motive for generating wealth if it's just going to be taken away from you? The same motivation that drives some folks to study e.g. philosophy, even though it's perfectly well known that this will never make you rich: Because they like it. You don't just e.g. found a company for the sake of money - you also do it because it allows you to do things on your own terms, it gives you…

I’m not so sure. Running a business exposes you to tremendous personal risk, especially in a litigious country like the US. It’s also incredibly hard, most often fails, and typically confers less prestige than other much more reliable and substantially less risky high paying career paths (finance, law, medicine, consulting, etc).

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

#250

Post by ianbicking »

mlac wrote: post #24

I would really just like a flat tax. No loopholes or deductions. Very simple. It should not take a masters degree to understand the tax code. I recognize this is one of the main ways Policy is implemented (incentives can drive certain behavior), but we’ve got hundreds of years of complexity going on and I wouldn’t mind simplifying this. I don’t know where to start though.

A flat tax simplifies one little bit of math, and doesn't really address loopholes and deductions. If you have an income tax you have to calculate "income". If I have a little store and buy gum for $1.00 and sell it for $1.10, it will not work well if that's counted as $1.10 of income. That $1.00 is a deduction. We can't eliminate them. It's a "loophole" when we think the deduction is not in the spirit of calculating income, but that's not an objective criteria.

A flat tax removes the benefit of shifting income to different entities to pursue lower marginal taxes, but I don't think that's the kind of abuse we're looking at here, nor is that abuse particularly scalable.

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