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

warren.senate.gov

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

#51

Post by intended »

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…

I was an IB/PE financial analyst in another life and tax optimization by moving cash flows around is not only a thing, it’s the norm.

Plus if your argument were fair, we wouldn’t be seeing the kind of wealth concentration in the system.

It’s essentially a sign that financial engineering is an un-checked force multiplier which regulation has not kept up with.

Finally - asset appreciation is real, yes interest rates have been low and would typically be inflationary - however we’ve also had multiple massive disasters in a short span of time which have crushed demand and economic activity.

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

#52

Post by einpoklum »

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 Almost every single European country that had a wealth tax repealed theirs.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.

Yeah, peace doesn't work too, every single European country that's tried it has reneged on it at least once in the past century, except maybe Switzerland and the Vatican.

More seriously though, issues like wealth taxation, capital gains taxation, inheritance taxes etc. are I would say more of a reflection of the relative strength of large property owners (a.k.a. "Capitalists" or "The 1%" to use other colloquial terms) versus the rest of the populace, to set economic-cultural norms and influence legislation.

Certainly, if such a tax is put in effect, many of the wealthy would make an effort to hide their assets away, possibly even abroad. But if the (federal) state wanted to cope with or overcome this potential tendency - which it really does not in the ultra-bought-off US political system, including Ms. Warren - there are many ways it could do so, both on the national and international levels. Not to mention how US corporations already employ asset and activity off-shoring to evade taxation.

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

#53

Post by mrkurt »

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?

Around 1%, in the form of property taxes. That's a tough number, though, because property taxes apply even when people are under water on their mortgages or rent.

The only wealth taxes the US has are property taxes. We all just think of wealth as the stuff that doesn't get taxed. The richer you get, the less of your wealth is taxable. The poorer you get, the more you pay wealth taxes.

In theory, we tax rich people when they convert their wealth to income. In practice, they all convert their wealth to income by borrowing against it, then dying, then having their estate pay their debts tax free.

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

#54

Post by puchatek »

aantix wrote: post #5
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.

Why don't wealth taxes work? Which countries repealed?

Germany suspended it's wealth tax and some parties are now contemplating whether to reactivate it. Might be just pre-election noise but who knows

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

#56

Post by X6S1x6Okd1st »

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.

Germany: Discontinued

Finland: Discontinued

Luxembourg: Discontinued

Sweden: Discontinued

France: Discontinued*

Spain: Current

Netherlands: Current

Norway: Current

Switzerland: Current

Italy: Current, but excludes assets held within the country

Belgium: Current

So 5 discontinued & 6 current? That doesn't seem like "Almost every single"

https://en.wikipedia.org/wiki/Wealth_tax#Current_examples

Do you have a better source for what countries had it an discontinued it? For what it's worth I am here considering Financial property exclusively, France still has it's property tax which can be considered a wealth tax.

I am struggling to find write ups that don't just echo "they all repealed it" but list the specific countries.

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

#57

Post by monocasa »

Bhilai wrote: post #32

> Name: Elon Musk, Net Worth: $19.9 billion, Federal Income Tax Paid: $8,410 How is this possible? Why does Elon Musk pay less taxes than an average person who works in Tech?

A tiny salary, and not realizing capital gains on the stock but instead taking out margin loans using his stock as collateral.

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

#58

Post by intended »

Closi wrote: post #36
iammisc wrote: post #8

Earlier quoted context omitted.

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…

I mean do we need to sell Apple to know it’s worth money ? The existence of the stock market immediately makes it possible to convert assets into liquidity - something which firms do regularly.

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

#60

Post by fairity »

Bhilai wrote: post #32

> Name: Elon Musk, Net Worth: $19.9 billion, Federal Income Tax Paid: $8,410 How is this possible? Why does Elon Musk pay less taxes than an average person who works in Tech?

His net worth is stored in company shares, which doesn't get taxed until it's sold.
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