Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

warren.senate.gov

Post reply on HN
Print view View original

31–40 of 139 posts

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#31

Post by alasdair_ »

csallen wrote: post #3

> In 2018, Warren Buffett had a net worth of $84 billion. The effective tax rate on his mountain of wealth? 0.006%—orders of magnitude lower than the tax rates paid by most middle-class families. What tax rate do middle-class families pay on their net worth? 0% I believe, since we don't have wealth taxes?

Since most middle-class families have the bulk of their wealth in their primary residence, the effective tax rate is however much they are paying in property taxes divided by the equity in the home. In many cases this can amount to a sizable percentage of net worth.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#33

Post by lbriner »

In the UK (and I'm sure elsewhere), inheritance tax is the main vehicle to try and avoid dynasties being created once one person has accumulated massive wealth.

As others have said, it is income that is taxed, there will be plenty of people who own capital (e.g. inherited a large country house) and who don't have the cash to pay a tax on it and presumably it would seem unfair to force them to sell it (and hope they get decent money for it) in order to pay a tax on it.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#34

Post by trutannus »

sna1l wrote: post #18

It is interesting that everyone says that the wealth tax is hard to implement, yet it seems to be working well in Switzerland? https://www.bloomberg.com/news/articles/2021-02-16/swiss-wea...

They have no capital gains tax. Overall the wealth tax is a lower cost to individuals than the style of wealth taxes en-vogue in a lot of places now. Wealth taxes require liquidation of assets to pay, given the nature of wealth. When you liquidate assets, you pay cap gains tax and then have to pay the wealth tax. In Switzerland, you just pay the wealth tax. Basically, you have to be taxed to pay the tax in most places, where in Switzerland you just pay the tax without being 'double taxed'.

Liquidating assets to cover that tax works out to a lower overall tax burden on the individual than capital gains tax. Most nations that are mulling wealth taxes are considering them as an added tax layer, as opposed to the Swiss who use it as an indirect means to tax investments, rather than asking for a per-transaction gain payment. Nations that have done the approach that's opposite to Switzerland tend to reverse their wealth taxes, or see little benefit (France, for instance).

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#35

Post by [deleted] »

csallen wrote: post #3

> In 2018, Warren Buffett had a net worth of $84 billion. The effective tax rate on his mountain of wealth? 0.006%—orders of magnitude lower than the tax rates paid by most middle-class families. What tax rate do middle-class families pay on their net worth? 0% I believe, since we don't have wealth taxes?

[deleted]

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#36

Post by Closi »

iammisc wrote: post #8
csallen wrote: post #3

> In 2018, Warren Buffett had a net worth of $84 billion. The effective tax rate on his mountain of wealth? 0.006%—orders of magnitude lower than the tax rates paid by most middle-class families. What tax rate do middle-class families pay on their net worth? 0% I believe, since we don't have wealth taxes?

Yeah, this is written in extremely manipulative language. What was warren buffett's income in 2018? We have income tax, not wealth tax. Plus, a lot of that wealth is likely 'in' his company, which is really just fake money. I mean, I know accountants look at it and there is some overlap for taxes when doing things like options and share grants and FMV, but really, a company is worth zero until you sell it, like most…

> a company is worth zero until you sell it, like most assets.

I don’t think that’s quite true - I would say a better definition would be that a company is worth what someone will pay for it, regardless of if you actually sell it or not.

Stocks, piles of gold and cash are just different types of asset all of which have value.

And you have to really tax all of that, otherwise the wealthy will just avoid taxes by being paid in untaxable gold bricks and trade those for purchases rather than dollars.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#38

Post by umeshunni »

soberpeach wrote: post #14
anderson1993 wrote: post #2

Sigh... Wealth taxes don't work. Almost every single European country that had a wealth tax repealed theirs. The fact that Senator Warren is continuing to try to push a wealth tax shows how poor her policies are.

It depends how the wealth tax is implemented. European wealth taxes were primarily on capital like stocks, which are extremely easy to move, even easier than income. A wealth tax on land (an LVT) is literally impossible to avoid however since you can't move the land.

> A wealth tax on land (an LVT) is literally impossible to avoid however since you can't move the land.

Yeah, those are called property taxes and already exist.

Re: The Big Escape: How the Ultra-Wealthy Avoid Paying Taxes and How to Fix It [pdf]

#39

Post by ninja3925 »

I have noticed that politicians always use extremes (many standard deviations away from the average) to illustrate a population.For example, Warren Buffet wealth is in the top 10. Yet, Warren's policies target the top 1% (top 10 is the top 0.00033% of the top 1%). He is not representative of the top 1% in any way!! Show me the median and let's talk.

I am surprised people bite at this manipulative narrative. It seems to me that it discredits their arguments right away. In that sense, voter education would go a long way.

Post reply on HN