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Billionaires should face a minimum tax rate, report says

bbc.com

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Re: Billionaires should face a minimum tax rate, report says

#41

Post by eli »

baronswindle wrote: post #36
eli wrote: post #16

Earlier quoted context omitted.

Only because of how we've chosen to define income.

The proposal in the article is to tax wealth at an annual rate of 2%. Not realized gains. Not unrealized gains. Wealth. Under such a system — unless I've badly misunderstood something — if a billionaire's assets decreased in value over the course of a year, they would still pay 2% on their assets. I can't think of any sense in which a decrease in the value of one's assets would be defined as income. I have an opinion…

Seems silly to debate a hypothetical tax you extrapolated from a single sentence.

The "billionaire's tax" Biden proposed earlier this year is closer an income tax that also includes unrealized gains and only if there are tens of millions in unrealized gains in that year.

That said: you pay property tax even if the value of your home declines. It's not that crazy.

Re: Billionaires should face a minimum tax rate, report says

#42

Post by chollida1 »

seanhunter wrote: post #39
pclmulqdq wrote: post #7

Unrealized capital gains are not income. This article wants a wealth tax because they think this is "income" that is going untaxed.

It may be surprising, but wall street firms (for example) don't have a concept of "Unrealized capital gains". They mark to market on a daily basis and book the pnl and pay whatever tax. I know that at Goldman (where I worked) this is almost a religion, and I would expect it is the same at JPM and Morgan Stanley. One reason the author is probably suggesting this is that there are a wealth of schemes whereby income can…

> It may be surprising, but wall street firms (for example) don't have a concept of "Unrealized capital gains".

This is just false in my experience, well atleast for how you've stated it.

It may be true for some particular company but I don't know a single fund that doesn't track unrealized cap gains. Specifically around this time we start to look at how to defer realizing these gains till next year to push off the tax burden until the new year.

I mean, alot of large in the money option trades get written at this time of year just to lock in a price on a position that expires next year. We wouldn't do this if we didn't track unrealized cap gains.

Heck, the single largest impediment to growing wealth is taxes, we fixate an awful lot on the type of tax we pay and when we pay it.

Maybe you can expand on your response as it seems completely false to me that the concept of Unrealized cap gains doesn't exist.

Re: Billionaires should face a minimum tax rate, report says

#43

Post by lotteryland »

chollida1 wrote: post #42
seanhunter wrote: post #39

Earlier quoted context omitted.

It may be surprising, but wall street firms (for example) don't have a concept of "Unrealized capital gains". They mark to market on a daily basis and book the pnl and pay whatever tax. I know that at Goldman (where I worked) this is almost a religion, and I would expect it is the same at JPM and Morgan Stanley. One reason the author is probably suggesting this is that there are a wealth of schemes whereby income can…

> It may be surprising, but wall street firms (for example) don't have a concept of "Unrealized capital gains". This is just false in my experience, well atleast for how you've stated it. It may be true for some particular company but I don't know a single fund that doesn't track unrealized cap gains. Specifically around this time we start to look at how to defer realizing these gains till next year to push off the t…

This is indeed false for the kinds of people and companies they own that matter for this discussion.

Re: Billionaires should face a minimum tax rate, report says

#44

Post by Nasrudith »

ndsipa_pomu wrote: post #30

I think we need to start treating extreme wealth hoarding as a mental illness. If someone has a net worth of more than a $billion for an appreciable amount of time, then they should be locked up to protect the world from their malfeasance and prevent them exploiting yet more people. A possible exception would be when someone inherits a vast fortune, and maybe they should be allowed some time to demonstrate that they…

That is just plain stupid rhetoric as a talking point. When are we going to start splitting up nations to prevent them from compromising their sanity for reaching multi-billion dollar budgets? Arbitrary caps inevitably run into problems, especially when they aren't inflation indexed.

Re: Billionaires should face a minimum tax rate, report says

#45

Post by pclmulqdq »

seanhunter wrote: post #39
pclmulqdq wrote: post #7

Unrealized capital gains are not income. This article wants a wealth tax because they think this is "income" that is going untaxed.

It may be surprising, but wall street firms (for example) don't have a concept of "Unrealized capital gains". They mark to market on a daily basis and book the pnl and pay whatever tax. I know that at Goldman (where I worked) this is almost a religion, and I would expect it is the same at JPM and Morgan Stanley. One reason the author is probably suggesting this is that there are a wealth of schemes whereby income can…

It is true that they often choose mark securities to market on their balance sheets, and by doing that, they need to put that change in the balance sheet on their income statement. When that happens, in accrual accounting terms, it's income.

Those markings don't create cash, though. In cash terms, they are no different. Individuals are largely taxed in cash terms.

Re: Billionaires should face a minimum tax rate, report says

#46

Post by jstarfish »

psychoslave wrote: post #13
dinkblam wrote: post #4

it is easy to make the headlines by just telling people what they want to hear. hard truths, not so much.

People can be envious of the richest percentile when they are simply richer. They start to look at them with hate only when according to usual metrics, a few become ever more rich while most actually see their wealth level decrease whatever the legal path they take. This is not good for anyone, because history show that the next expectable step is blood bath, be it through mass repression or cutting heads of the perc…

History might play out differently if the targets could escape to lunar habitats in their respective private rockets.

We're almost in James Bond supervillain territory.

Re: Billionaires should face a minimum tax rate, report says

#47

Post by ProllyInfamous »

ndsipa_pomu wrote: post #30

I think we need to start treating extreme wealth hoarding as a mental illness. If someone has a net worth of more than a $billion for an appreciable amount of time, then they should be locked up to protect the world from their malfeasance and prevent them exploiting yet more people. A possible exception would be when someone inherits a vast fortune, and maybe they should be allowed some time to demonstrate that they…

>such an obscene amount of money that giving it away is going to take years.

If you earned, untaxed, one dollar EVERY SECOND (non-stop) it would still take you over thirty years to "earn" a billion dollars.

A million seconds is only (just-over) eleven days, for comparison.

Re: Billionaires should face a minimum tax rate, report says

#49

Post by makomk »

eli wrote: post #41
baronswindle wrote: post #36

Earlier quoted context omitted.

The proposal in the article is to tax wealth at an annual rate of 2%. Not realized gains. Not unrealized gains. Wealth. Under such a system — unless I've badly misunderstood something — if a billionaire's assets decreased in value over the course of a year, they would still pay 2% on their assets. I can't think of any sense in which a decrease in the value of one's assets would be defined as income. I have an opinion…

Seems silly to debate a hypothetical tax you extrapolated from a single sentence. The "billionaire's tax" Biden proposed earlier this year is closer an income tax that also includes unrealized gains and only if there are tens of millions in unrealized gains in that year. That said: you pay property tax even if the value of your home declines. It's not that crazy.

The whole point of proposals like the one the entire linked article is about is to make it seem like vast sums of money can be raised from seemingly small taxes on a few wealthy people by definining those taxes as an annual percentage of total wealth rather than income. The framing is meant to trick readers into mentally comparing the 2% tax it proposes and the 0-0.5% tax it claims the wealthy are currently paying with the familiar 20-40% or more they have to pay on their own income, when in reality the two are calculated in vastly different ways and the article gives readers no way of putting it in any more meaningful context.

Re: Billionaires should face a minimum tax rate, report says

#50

Post by ndsipa_pomu »

Nasrudith wrote: post #44
ndsipa_pomu wrote: post #30

I think we need to start treating extreme wealth hoarding as a mental illness. If someone has a net worth of more than a $billion for an appreciable amount of time, then they should be locked up to protect the world from their malfeasance and prevent them exploiting yet more people. A possible exception would be when someone inherits a vast fortune, and maybe they should be allowed some time to demonstrate that they…

That is just plain stupid rhetoric as a talking point. When are we going to start splitting up nations to prevent them from compromising their sanity for reaching multi-billion dollar budgets? Arbitrary caps inevitably run into problems, especially when they aren't inflation indexed.

Clearly there's a substantial difference between an individual and a nation of people.

So, what would you suggest instead of an arbitrary cap? Just carry on and let these individuals continue to destroy the world so that they can continue hoarding more wealth than they can ever use?

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