We are publishing the tax secrets of the .001% • Hacker News Board

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

#251

Post by WalterBright » Tue, Jun 08, 2021, 5:02 PM UTC

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…

> What's stopping the average citizen from exploiting this tax avoidance strategy?

If your stocks go down, you still owe the full amount of the loan. If your stocks go to zero, you still owe the full amount of the loan.

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

#252

Post by ineptech » Tue, Jun 08, 2021, 5:02 PM UTC

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 don't think you're describing an obstacle to change, you're describing the mechanism of change avoidance. Compare: "Gosh, every time we try to tax the wolves, it ends up hurting the sheep as well. Why can't our 100% wolf, 0% sheep Congress get this right? I guess it's just a hard problem!"

The solution is not to give up, the solution is to actually tax the rich more. Also, your examples are awful: paying taxes on the sale of your house is extremely rare, and the reason your hypothetical person who makes $500k in a good year pays such a high tax burden is because we tax income more heavily than capital gains, i.e. the exact opposite of a "tax targeting the ultra rich".

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

#253

Post by sp_nster » Tue, Jun 08, 2021, 5:02 PM UTC

w4 wrote: post #235

edmundsauto wrote: post #217

Earlier quoted context omitted.

This is exactly what happens. If you buy house #2 within 90 days, you can do a 1031 (I think?) property exchange. Then you don’t pay taxes on the first sale.

1031 exchanges are not available to homeowners, they are exclusively available for investment properties. Homeowners receive a $250k/$500k tax shelter as discussed above.

The $250/$500k is a one-time benefit and you will absolutely take advantage of it when you sell your home.

The idea of taxing this "profit" for the home owner would be insane. The investment and re-investment in real-estate drives a big majority of the economy.

I'm for modifying 1031 for investors who rent their properties. \

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

#254

Post by greenie_beans » Tue, Jun 08, 2021, 5:05 PM UTC

strictnein wrote: post #163

greenie_beans wrote: post #19

Earlier quoted context omitted.

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.

Good point. I guess I see the advantages of the ultra rich as something that shouldn’t be politicized. That’s some bullshit that all stripes of political belief should agree on and change. Like, who wouldn’t advocate for that? (Besides the ultra rich. And please don’t say those who aspire to be ultra rich, because that’s not a realistic argument/that idea should die)

Edit: Can you explain why the phrase “true tax rate” is considered political advocacy?

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

#255

Post by gugagore » Tue, Jun 08, 2021, 5:06 PM UTC

axiosgunnar wrote: post #206

pmoriarty wrote: post #100

Earlier quoted context omitted.

"I don't want to live in a world where we're unable to escape working by constant taxes." I am against a system in which some escape work while others do not.

What incentive would I have in your system to be a frugal hard worker that practices delayed gratification instead of a dopamine-addicted wasteful lazy consumer?

What incentive do I have in not-that-system to be a cooperative, generous hard worker that practices collectivism instead of a power-addicted exploitative ambitious business magnate?

^- is another awfully slanted question.

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

#256

Post by xienze » Tue, Jun 08, 2021, 5:06 PM UTC

cletus wrote: post #236

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.

> The worse tax situation is always the person who makes 500k in a good year What's the problem here? Income tax rates are moderately progressive. They'll pay a higher marginal tax rate and a moderately higher total tax rate in this year. That seems fine to me. > or sells a house they held for 25 years which went up a bunch in value This is what I have a problem with. This house has already had plenty of favourable t…

> Gains on that property deferred for up to 25 years.

Well yeah, before that point it hasn’t been sold, so paying taxes on unrealized gains on what the house “should” be worth is bullshit.

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

#257

Post by WalterBright » Tue, Jun 08, 2021, 5:07 PM UTC

The top 1% contribute 38.5% of Federal income tax revenue.

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

#258

Post by LargeWu » Tue, Jun 08, 2021, 5:07 PM UTC

jvanderbot wrote: post #222

scott_w wrote: post #177

Earlier quoted context omitted.

Look at the countless issues raised by people being unable to exercise stock options for tax reasons. It’s clear that taxing stock is NOT unprecedented. We’ve seen repeatedly over the past 50 years that Bezos will NOT be taxed of that wealth under the current system. There’s nothing sacred about different types of wealth. The question is whether society can benefit more from taxing and redistributing that wealth, or…

> Look at the countless issues raised by people being unable to exercise stock options for tax reasons. It’s clear that taxing stock is NOT unprecedented. It is unprecedented to tax someone on the value of their unsold stock. That's what a wealth tax would be: We force someone to pay taxes on something (their holdings / net worth) simply because it is valuable, but not necessarily because it was liquidated into cash…

When Jeff Bezos buys a yacht, he doesn't buy it with Amazon stock. He cashes out that stock and then buys the yacht.

I think a fair approach would be to use their total net worth as the threshhold for which wealth taxes apply, but taxes are only paid when that stock is turned into actual money, or equivalent. If you're not cashing out your company holdings, if your wealth is only "on paper", then you owe nothing. But if you try to start cashing that out, then you owe the wealth tax, and you don't get any proceeds until you pay off that tax first. Note that this would be on top of capital gains taxes.

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

#259

Post by [deleted] » Tue, Jun 08, 2021, 5:09 PM UTC

jtdev wrote: post #189

cm2187 wrote: post #148

Would be curious to see twitter blocking this story on the basis that this is the distribution of stolen data as they did last year...

Twitter only does that when it facilitates manipulation of important elections. They’ve moved on to protecting Fauci, Harris, Biden from the harsh reality of their own incompetence and rapidly vanishing facade of legitimacy.

[deleted]

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

#260

Post by kwhitefoot » Tue, Jun 08, 2021, 5:09 PM UTC

syshum wrote: post #162

gota wrote: post #54

Earlier quoted context omitted.

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…

> think the world needs a nation that continues to put personal freedom above everything else.

And you think that the US does that?

Exercising personal freedom necessitates having the material and mental resources to buy stuff, to be able to move from place to place, to change jobs, etc. It seems to me that a plausible proxy measure for personal freedom is social mobility, the likelihood that you will be better off than your parents. As far as I remember the country with highest social mobility is Denmark.