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

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

fair.org

Post reply on HN
Print view View original

301–310 of 488 posts

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

#301

Post by gamblor956 »

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…

And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them.

A business that is not making a profit does not pay income taxes. I don't have a single client that has voluntarily turned down making a profit because they'd had to pay some income tax on it.

The only time business income tax rates make a difference is when the business is choosing between multiple profit-generating activities and wants to maximize the net (post-tax) income by minimizing its tax burden.

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

#302

Post by Negitivefrags »

adverbly wrote: post #249
sempron64 wrote: post #125

I'm not wealthy enough for a wealth tax to apply, but a wealth tax is a colossal privacy and administrative burden on _every single taxpayer_. Assets must be accounted for when calculating wealth, so the tax service will be required to track and value assets including vehicles, homes, and material good etc. for every citizen to see if the wealth tax would apply to them -- if we didn't report material goods, the wealt…

I stopped reading when I hit: > wealth tax is a colossal privacy and administrative burden on _every single taxpayer_ I have not seen a single wealth tax proposal that doesn't have a gigantic cutoff where it would do nothing for 99%+ of the taxpayer base. Most proposals have a floor in the tens of millions.

Perhaps you should have continued reading because then you would have understood his point.

It doesn’t matter what the floor is, you still have to report all your assets to the IRS to prove you don’t meet it.

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

#303

Post by triceratops »

saddestcatever wrote: post #286
triceratops wrote: post #248

Earlier quoted context omitted.

Aren't health insurance premiums deductible for individuals too?

"If you bought medical insurance policies on your own for yourself or your family, you might qualify for a self-employment tax deduction on the premiums." [1] "If you are enrolled in an employer-sponsored health insurance plan, your premiums may already be tax-free. If your premiums are made through a payroll deduction plan, they are likely made with pre-tax dollars, so you would not be allowed to claim a year-end ta…

I'm confused. What's the difference between a "tax deduction" and paying with "pre-tax dollars"?

Do they mean if for example a company pays $5000/year in employee insurance, they can subtract $5000 from their tax bill? If so, that's a tax credit right?

As I understand it, a "tax deduction" is a deduction on taxable income (in the case of an individual) or profit (in the case of a company).

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

#304

Post by liuliu »

jurassic wrote: post #225
sempron64 wrote: post #125

I'm not wealthy enough for a wealth tax to apply, but a wealth tax is a colossal privacy and administrative burden on _every single taxpayer_. Assets must be accounted for when calculating wealth, so the tax service will be required to track and value assets including vehicles, homes, and material good etc. for every citizen to see if the wealth tax would apply to them -- if we didn't report material goods, the wealt…

I love that you brought up the surveillance aspect; I have not seen that discussed much elsewhere. A wealth tax seems impractical on many levels, including the increased burden of trying to document the value of your items for people of modest wealth levels. Unique or thinly traded luxury items have value that can't really be known until they are sold, which is why capital gains are taxed at the time of a sale. I'm t…

It is arguable whether wealth should be within right to privacy or not. As for items inheritably with illiquid market value, it is also arguable whether we should assess their ongoing market value at all. Real-estate on the other hand, would hardly be illiquid and the United States do have a reasonable assessment program for real-estate. The same cannot say for antique cars or artwork.

However, to combat the side-effect of wealth tax requires global governance, which in today's day and age, seems like a pipe dream.

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

#305

Post by mayneack »

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…

using "percent of taxes" is an arbitrary metric. Why not ask about percent of wealth? I assume because "taxfoundation.org" is in the business of lowering taxes, which is only one of many things to be optimized in the US government.

https://en.wikipedia.org/wiki/File:US_Wealth_Inequality_-_v2...

Eyeballing this chart suggests that the top 10% have more than 69% of the wealth, so paying 69% of the taxes seems like a good deal for them.

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

#306

Post by didibus »

tonystubblebine wrote: post #70
nostrademons wrote: post #60

Earlier quoted context omitted.

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…

Exactly. Corporate taxes are an incentive for businesses investing in themselves but, as I understand it, an disincentive for investors to invest in businesses. I'm mostly just bothered by how simplistic the debate is and how most people don't even understand this detail.

> but, as I understand it, an disincentive for investors to invest in businesses

I don't see this holding true. Can you explain how?

Like, yes as a personal investor you now have less to invest, because you are taxed more on your income. But of the money you have left after tax, investment is still investment. There's no other way to make money of your money then to invest it. So as long as you don't spend all the money immediately, the incentive to invest it is there.

Also, the companies you invest in will be incentivized to reinvest in themselves, thus their stock growth potential will be higher, so a good time to invest in them.

Finally, the biggest investors arn't individuals, but investment firms, and because they themselves are a company, they themselves are like all others more incentivized to reinvest into their business, thus they are more likely to want to take their profit and invest it some more, instead of cashing it out as revenue.

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

#307

Post by gen220 »

koolba wrote: post #211
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…

> You pay taxes on all of your income. But businesses only pay taxes on their profit. It's a big, big difference that changes the incentives. It’d be insane to have it any other way for businesses. Whole swathes of low margin businesses would be impossible to operate. For example a super markets average margins are 3-5%. Corporate tax is (generally) on profits because you can deduct costs. It allows for the flow of m…

> The real scam is when things like health insurance premiums are deductible for a company but not for an individual.

To be fair, that this "scam" is still alive today is mostly by accident.

It stems from WWII times, when stateside laborers were uniquely low in supply and high in demand, and when labor had ridiculous bargaining power.

Laborers couldn't really ask for higher wages, because that was politically impossible (appearing to be extorting wartime needs for money was/is a faux pas).

So companies began competing on "benefits": health, accidental death and disability insurance among them.

To help ease the burden on employers and employees, the IRS allowed businesses to "temporarily" deduct insurance premiums. (This relief came against the backdrop of unprecedented wartime tax hikes).

Postwar, it was unfeasible to remove this measure, as the majority of Americans who had insurance got it through their employers: it would upset both businesses who have to pay more, and employees who lose insurance.

Later, some government (I forget which...) signed this stopgap measure into the tax code, making it permanent.

Regardless of the interesting history, I agree with you, it should be universally deductible.

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

#308

Post by rayiner »

Do people really find these sorts of articles compelling? They're nothing more dressed up ad hominem--attack the messenger without engaging with the substance.

Here are the facts that aren't in dispute:

1) Other countries that have tried wealth taxes have started abandoning them, most recently France and Sweden: https://www.cato.org/publications/commentary/why-europe-axed....

2) There is little economic consensus on whether wealth taxes would be efficient or hamper economic growth: https://assets.aspeninstitute.org/content/uploads/2019/09/We....

3) Economists do generally agree, however, that consumption taxes on individuals are the most efficient and least distortionary strategies: https://www.npr.org/sections/money/2012/07/19/157047211/six-...

> Three: Eliminate the corporate income tax. Completely. If companies reinvest the money into their businesses, that's good. Don't tax companies in an effort to tax rich people.

> Four: Eliminate all income and payroll taxes. All of them. For everyone. Taxes discourage whatever you're taxing, but we like income, so why tax it? Payroll taxes discourage creating jobs. Not such a good idea. Instead, impose a consumption tax, designed to be progressive to protect lower-income households.

4) Warren's and Sanders' proposed wealth taxes would be dramatically higher than anything a developed country has attempted (up to 6% and 8%). And even based on the candidates' own projections, they would raise not very much money (under $300 billion per year, or less than 1/6 of what would be required to fund Medicare 4 All).

5) Billionaires just don't have that much money in the aggregate to warrant such an outsized attention in tax policy. All the wealth of all U.S. billionaires adds up to $3.4 trillion. Even if you confiscated it all in one go, that would fund the local, state, and federal governments for a bit over six months, without even accounting for the new spending proposed by Warren and Sanders.

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

#309

Post by conanbatt »

tw04 wrote: post #111
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…

>And especially investors have a case that higher corporate taxes reduce the value of their investments, possibly to the point of not making them. I know you aren't arguing against higher taxes, but my response to that is... and? Does Target benefit more from some random hedge fund buying up $20 million of their shares? Or from consumers buying $20 million in goods from them? Once a company has gone public, unless th…

> This belief that institutional investors mean more to the health of a business than ACTUAL SALES is baffling to me (not saying that's your stance).

Investors making money means more money to invest, which creates more companies and services.

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

#310

Post by entangledqubit »

DubiousPusher wrote: post #50
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…

> But businesses only pay taxes on their profit. Except in Washington State.

Are you referring to the B&O taxes (seems to be based on industry) or are there others around as well?

I could imagine some reasonable arguments for having a low tax like that around.

Post reply on HN