Tax details of US super-rich allegedly leaked • Hacker News Board

Re: Tax details of US super-rich allegedly leaked

#41

Post by imgabe » Tue, Jun 08, 2021, 9:50 PM UTC

pontus wrote: post #35

imgabe wrote: post #14

Earlier quoted context omitted.

We do tax capital gains. You pay taxes when you sell. Do you mean tax unrealized capital gains? There is a reason you don’t owe taxes on a stock you haven’t sold yet. For one thing, what if you have to pay tax at one valuation, and then it goes down later.

I agree that taxing unrealized capital gains is a fundamentally flawed approach. However, the problem with the current system is that these ultra-wealthy people just end up borrowing against their equity, avoiding selling if possible. I think it would make sense to count borrowing against equity as tax-wise equivalent to selling that same equity. With that loophole closed, together with raising the capital gains tax,…

But borrowing is not equivalent to selling, tax wise or any otherwise.

When you get a mortgage to buy a $750k house, do you want to be taxed as though you had $750k income that year? You’re just borrowing against the value of an asset after all.

Re: Tax details of US super-rich allegedly leaked

#42

Post by zorak8me » Tue, Jun 08, 2021, 9:50 PM UTC

arn wrote: post #11

01100011 wrote: post #5

I've seen people complaining that the article is disingenuous because it conflates income taxes with capital gains taxes. My response is 'so what'. When you make above a certain income level, you don't need anymore income and can play around with reinvesting capital gains to push taxes into the future while amassing wealth. Sure, you're not realizing the income, but what you're doing, I think, is gaining power and in…

It conflates income with unrealized capital gains. You can make an argument that income and capital gains should be taxed at similar rates, but it feels like they are being purposely misleading in their presentation, when they use unrealized capital gains as the denominator. No one else’s taxes are viewed through that lens.

I am confused. They were clearly discussing unrealized gains as wealth throughout the article. What am I missing here?

Re: Tax details of US super-rich allegedly leaked

#43

Post by frankbreetz » Tue, Jun 08, 2021, 9:51 PM UTC

aaronschroeder wrote: post #17

But what is the solution? Most wealth of people like Elon Musk and Jeff Bezos is tied to ownership shares in their companies. I don't think it's fair to force them to sell shares so they can cover higher taxes. I also fear efforts to extract more tax money from them will ultimately just raise the bill for the middle class. The ultra wealthy can afford to hire a team of accountants to find the loopholes while small bu…

The simple solution is to close the loopholes. Complexity is a tax on the middle class

Re: Tax details of US super-rich allegedly leaked

#44

Post by perfunctory » Tue, Jun 08, 2021, 9:51 PM UTC

Thomas Piketty proposes a progressive annual global wealth tax of up to 2%. I think it's a good idea.

Re: Tax details of US super-rich allegedly leaked

#45

Post by H8crilA » Tue, Jun 08, 2021, 9:52 PM UTC

kevinsundar wrote: post #22

astuyvenberg wrote: post #18

Earlier quoted context omitted.

The issue is when the ultra-wealthy take out loans against their investment assets (and thus, those unrealized capital gains). By doing that, ultra-wealthy _are_ realizing the value of their investments without being taxed. That's how this wealth is being accessed, and that's a large component of what drives these ultra-low tax rates for the ultra-wealthy.

Then HELOC would be taxed which many middle class people rely on. Also its a loan so it need to be paid back. Will payments on private loans be deducted from income then?

This is not on topic, but to me it's ridiculous that something like HELOC exists and is somehow widely accepted. Like dude, you'll never pay down that debt. Your house is not an ATM machine.

Re: Tax details of US super-rich allegedly leaked

#46

Post by JumpCrisscross » Tue, Jun 08, 2021, 9:52 PM UTC

marsrover wrote: post #38

sec400 wrote: post #27

If anyone understands the reasoning behind the US capping your deductible net capital loss in any tax year at $3,000 vs allowing your full capital losses to be offset I'd be interested.

Because the country is fundamentally broken.

> the country is fundamentally broken

As in people ascribe ongoing debates to the system being broken, yes.

Literally in this thread we have good arguments for reducing capital gains tax exclusions and special treatments and arguments for.

Re: Tax details of US super-rich allegedly leaked

#47

Post by duped » Tue, Jun 08, 2021, 9:53 PM UTC

01100011 wrote: post #5

I've seen people complaining that the article is disingenuous because it conflates income taxes with capital gains taxes. My response is 'so what'. When you make above a certain income level, you don't need anymore income and can play around with reinvesting capital gains to push taxes into the future while amassing wealth. Sure, you're not realizing the income, but what you're doing, I think, is gaining power and in…

Capital gains should be taxed as income when it's realized as income. You can't reinvest your capital gains without the tax penalty.

However, it is completely unreasonable for long term capital gains to be taxed any differently than normal income. A dollar earned should be a dollar taxed.

Re: Tax details of US super-rich allegedly leaked

#48

Post by lotsofpulp » Tue, Jun 08, 2021, 9:53 PM UTC

zorak8me wrote: post #42

arn wrote: post #11

Earlier quoted context omitted.

It conflates income with unrealized capital gains. You can make an argument that income and capital gains should be taxed at similar rates, but it feels like they are being purposely misleading in their presentation, when they use unrealized capital gains as the denominator. No one else’s taxes are viewed through that lens.

I am confused. They were clearly discussing unrealized gains as wealth throughout the article. What am I missing here?

Look at this sentence in the Propublica article:

> No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich.

It is clickbait, emotion inducing garbage. Buffett’s stance for higher taxes has nothing to do with the fact that he had less income than other rich people.

I expected better from ProPublica. Arguing for taxing unrealized gains is fine, but trying to make it seem like Buffett is doing something sneaky to churn emotions is bullshit writing.

Re: Tax details of US super-rich allegedly leaked

#49

Post by atlgator » Tue, Jun 08, 2021, 9:53 PM UTC

As others have stated, the article conflates income taxes with capital gains taxes. It also conflates asset ownership with income. Saying someone is "worth" a certain amount simply because they have a large stake in a corporation is an oversimplification. What they really own are illiquid assets, intellectual property, etc. Put to use, they produce income for the corporation as well as it's shareholders and employees, all of which are taxed in various ways and various levels.

Re: Tax details of US super-rich allegedly leaked

#50

Post by tldrthelaw » Tue, Jun 08, 2021, 9:53 PM UTC

It isn't the fault of the driver that drives 100 mph nearly as much as it is the society that sets the speed limit to 110.

No fan of the billionaires, but they're just following the code. None of these things are "loopholes" or bugs, they're features. Stop voting in people that do the bidding of these ghouls and you might get somewhere.