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We are publishing the tax secrets of the .001%

propublica.org

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

#391

Post by dillondoyle »

lumost wrote: post #144
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…

The average citizen can't borrow to pay off debts indefinitely. At ~2% interest the billionaire can borrow against their assets and keep borrowing to pay off interest. The assets gain in value at 4-6% per year so they are actually coming out ahead and paying 0% tax. Even a middle class retiree typically needs to draw down their savings to pay expenses. Giving up 2% to avoid taxes wouldn't be viable. The bank would al…

or even at all! large amount of Americans don't even have access to banking.

The loans they can get are insanely (i think disgustingly) predatory.

payday loans with fees can ed up being like 664% APR!!!!! Your 500 loan becomes 2000 you have to pay back in a couple months, which you obviously can't..

https://www.cnbc.com/2021/02/16/map-shows-typical-payday-loa...

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

#392

Post by asdff »

kristjansson wrote: post #388

The conflation of change in mark-to-market net worth with income has got a whole lot to do with the constant breathless reporting of "Bezos/Gates/Buffet/... made/lost x BILLION dollars today" every time the market moves by more than a point. Sure, I get they want to beat the drum on wealth inequality, and perhaps that's a drum worth beating. But its a disingenuous disservice to pretend that these people are sitting o…

If they didn't want to incur loss Bezos could just gift me his shares in Amazon

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

#393

Post by ihumanable »

rexreed wrote: post #207
geoduck14 wrote: post #61

Ok HN! We are intelligent, rational, and well intentioned- but we are also diverse! And it is great. Can someone please help me with the following! Why do we still compare WEALTH with INCOME tax? Of COURSE wealth is skewed: you go negative pretty fast (college and mortgage), and then you accumulate over time. It is a pretty rational progress. Income can vary over time - and the tax should vary, too. Why do we smash t…

I also don't understand how wealth and income can be conflated like this. We have an income tax, so, no duh, we tax income, not wealth. Criticizing the income tax because it doesn't tax wealth is like criticizing sales tax because it doesn't tax property values. They aren't the same. I don't get how ProPublica can take such a stance. Either it's intentional, which is bad, or it's unintentional, which is even worse?

80% of the actual article, https://www.propublica.org/article/the-secret-irs-files-trov..., is discussing this exact thing.

This isn't a case where there's a journalistic sleight-of-hand, trying to conflate and confuse wealth and income. one could argue that the entire thesis of the article is that because we tax income and not wealth, those with wealth avoid ever realizing income, relying on loans instead of income.

It's an article about the end result of taxing income instead of wealth, there's literally a massive interactive scrolling graphic that discusses it half-way through.

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

#394

Post by rascul »

ineptech wrote: post #331
TimPC wrote: post #271

Earlier quoted context omitted.

The problem isn't that it hurts the sheep as well, it's that it hurts the sheep almost entirely. Raising capital gains would be a decent idea that forces the rich to pay more. Basically zero support for it. Closing loopholes helps too, not what we're seeing in tax policy discussions which focus on rates instead. Raising the top rate on income when most of the ultra-rich's money comes from investment isn't making sens…

> Raising capital gains would be a decent idea that forces the rich to pay more. Basically zero support for it. Zero support among whom, the wolves or the sheep? Taxing the rich more is generally popular[0] and this would accomplish that; it would seem like that's support. > Taxes on the sale of a primary home is not as rare as you think. I would need to see a source on this; I can't imagine a scenario in which any m…

> I would need to see a source on this; I can't imagine a scenario in which any middle-class person pays any tax on their home at all, unless they live in an extreme-outlier of a neighborhood or find gold in their backyard.

Could you elaborate on why they wouldn't pay tax on their home?

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

#395

Post by RC_ITR »

vineyardmike wrote: post #336
RC_ITR wrote: post #243

Earlier quoted context omitted.

>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.

> in adjacent (usually historically minority) neighborhoods. These are the people that brought their culture. Their housing is probably also well appreciated.

It's amazing how often people on HN think that working class minorities have equal access to owning their own homes, despite huge evidence to the contrary.

https://usafacts.org/articles/homeownership-rates-by-race/

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

#396

Post by TimPC »

cpwright wrote: post #305
TimPC wrote: post #271

Earlier quoted context omitted.

The problem isn't that it hurts the sheep as well, it's that it hurts the sheep almost entirely. Raising capital gains would be a decent idea that forces the rich to pay more. Basically zero support for it. Closing loopholes helps too, not what we're seeing in tax policy discussions which focus on rates instead. Raising the top rate on income when most of the ultra-rich's money comes from investment isn't making sens…

The problem with selling your home isn't the income tax on the gains. That would be new money you have. The problem is that the closing costs are very high and that you have to pay yearly property taxes on it whether or not you are selling it. In NYS, you would lose 2% for selling a home in transfer tax (of the value not the gain); and then if you are financing another home 1.25% of the mortgage value. So right there…

Income tax on the gains tends to be bigger than these if you hold on to a property a while in a hot market. 20% of 400,000 is much bigger than 2% of 1,000,000 if you buy at 600,000 and sell at a million for example.

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

#397

Post by btilly »

Retric wrote: post #303
btilly wrote: post #179

Earlier quoted context omitted.

That book was originally written decades ago. Its threshold corresponds to about $1.7 million in savings in today's world. Their median was $1.6 million, or about $2.7 million in today's dollars. And given that the people who attained that status on average lived in cheap neighborhoods, the fact that their income wouldn't stretch long in an affluent neighborhood isn't really a concern for them.

Even adjusting for inflation from 1996 half the population had 1.0 - 1.6 million. That translates to ~$1.7M - 2.7M, or an income of ~68k to 108k which is still not that significant.

Where do you get half the population from?

According to the statistics that they gave, an estimated 3.5 million Americans were that wealthy. In 1996 the US population was around 270 million so we're talking about the top 1.3% of Americans by net worth.

For more about what this group looked like, read https://www.washingtonpost.com/wp-srv/style/longterm/books/c....

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

#398

Post by RC_ITR »

frockington1 wrote: post #327
RC_ITR wrote: post #243

Earlier quoted context omitted.

>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.

In those places there is a huge value difference between the adjacent neighborhoods and the rich neighborhoods. This is primarily due to a culture of stability and safety

What are you trying to say? That DTLA is safer/cheaper than Little Tokyo (you're wrong)? That SOMA is safer than the Mission(you're wrong)? That SLU is safer than Capitol Hill(you're wrong)?

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

#399

Post by Super_Jambo »

ping_pong wrote: post #361
teachingassist wrote: post #334

Earlier quoted context omitted.

> Basically zero support for it. Wealth taxes are extremely well-supported, despite the media as an industry [and politicians] being owned by people strongly motivated to campaign against it all costs, e.g.: https://www.reuters.com/article/us-usa-election-inequality-p...

Wealth taxes don't work. It was tried in Europe in many countries and they ended up rolling them back.

America which claims global tax jurisdiction may have slightly different results.

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

#400

Post by willseth »

onlyrealcuzzo wrote: post #329
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.

A house someone held for 25 years, fundamentally, doesn't seem any different than stocks someone held for 25 years. I'm not sure why we're obsessed with the idea that non-homeowners should subsidize homeowner's housing. If we really claim to live in a progressive society, shouldn't renters be getting the subsidy? I mean, sure, a small percentage of the population does have public housing. But that hardly compares to…

Housing benefits need adjustment so a larger share goes toward people who need it more, but overall home ownership encourages people to raise families and build communities, which acts as a compounding benefit to society. i.e. subsidizing renters will have a positive short term benefit, but long term it benefits landlords.
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