51–60 of 98 posts
In 1944 the Federal income tax rate was as high as 94% for those making more than $200,000.
Posters will now stumble over each other to assure you that tax evasion was so widespread that actually the effective tax rate was lower than Reagan's wildest dreams.
Arranging your income to reduce the tax paid in accordance with the law isn't tax evasion.
Earlier quoted context omitted.
Nowadays you get taxed because your mate lent you 1200 dollars through Venmo because you couldn't make the security deposit for the new overpriced apartment. (Of course your mate will be taxed as well when you repay him.) But Jeff Bezos can borrow against stock that he owns. Income tax is completely meaningless when the 1%-ers have tax evasion strategies that Joe Citizen couldn't possible take advantage of.
The 1% aren't borrowing against stock - or if they are - it's minimal and not worth discussion. 99% of the borrowing is coming from people worth close to a billion or more (0.001%).
Again, just me brainstorming loopholes.
Earlier quoted context omitted.
Nowadays you get taxed because your mate lent you 1200 dollars through Venmo because you couldn't make the security deposit for the new overpriced apartment. (Of course your mate will be taxed as well when you repay him.) But Jeff Bezos can borrow against stock that he owns. Income tax is completely meaningless when the 1%-ers have tax evasion strategies that Joe Citizen couldn't possible take advantage of.
I'd encourage you to actually research how any of this works, because you are extremely misinformed and parroting the same lines that I see repeated verbatim around the internet by other misinformed people(ie "Bezos can just borrow against stock he owns and never pay any taxes!").
A reminder that comparing old tax rates with modern ones is very hard, since there was a huge amount of deductions available for the high income earners, and hardly anyone actually paid anywhere near the nominal 91%.
I don't understand why we don't just not tax income below say $20k. It can't be a lot of money for the government even in aggregate, and it would make a huge difference in low income people's lives, arguably larger than any of the government programs their taxes are going to fund.
The key problem for After the standard deduction, the net income tax rate for a single filer making $20k is 3.75%. For a couple filing jointly it's 0 up through $25.5k/yr. In both cases, the EITC guarantees those with at least one child a (substantially) negative effective tax rate, while single child-free filers are left with about a 2.6% effective rate.
Earlier quoted context omitted.
Wrong. If it's not a loan then it's a gift and that's not taxed either for $1,200 as I mentioned. No need to even report it if it's under $16,000 per year.
Venmo will happily send you a 1099 form if it's above the 600 dollar threshold. We have Joe Biden to thank for that. It used to be higher.
It means a transaction was reported and that you better have a good story about why the tax isn’t due and why you didn’t report it on your own forms
The people that are worried about the venmo 1099 are the people that have not been doing a lot more under the table
(Not to invalidate the rest of the population that is just irrationally afraid of tax collectors)
Earlier quoted context omitted.
The 1% aren't borrowing against stock - or if they are - it's minimal and not worth discussion. 99% of the borrowing is coming from people worth close to a billion or more (0.001%).
I have no idea if this is how they do it, but I imagine they somehow "mortgage" their shares, then use the money as their own. Any interest you pay on investments is tax deductible, so that would reduce their tax burden. Not to mention, most of it isn't taxed since they aren't realizing those gains. Again, just me brainstorming loopholes.
You can borrow against anything, if someone is willing to lend
Collateralized lending is the least constructive of all
Make it worth their while
I don't understand why we don't just not tax income below say $20k. It can't be a lot of money for the government even in aggregate, and it would make a huge difference in low income people's lives, arguably larger than any of the government programs their taxes are going to fund.
This is already the case and has been for quite some time. The table depicted at the link is shows tax rates before deductions. Think of it as a "top line" or "nominal" tax rate. People making under $20k (and more) have an effective tax rate of $0 in the USA. As Mitt Romney pointed out in 2012 [1]: "Forty-seven percent of Americans pay no income tax." [1] https://www.politifact.com/factchecks/2012/sep/18/mitt-romne..…
Earlier quoted context omitted.
The 1% aren't borrowing against stock - or if they are - it's minimal and not worth discussion. 99% of the borrowing is coming from people worth close to a billion or more (0.001%).
I have no idea if this is how they do it, but I imagine they somehow "mortgage" their shares, then use the money as their own. Any interest you pay on investments is tax deductible, so that would reduce their tax burden. Not to mention, most of it isn't taxed since they aren't realizing those gains. Again, just me brainstorming loopholes.
Also, carrying ever-increasing loans (including loans to pay the interest on the previous loans) until you die means you pay a lot of interest! The "buy, borrow, die" strategy only works if you withdraw about 1% per year or less, otherwise the loan interest will catch up to you, and eventually you'll be at risk of losing everything to margin calls. Meanwhile if you withdraw normally without loans, then you can withdraw more like 4% per year indefinitely and have way more money to spend per year even after paying tax. So "buy, borrow, die" only works for huge fortunes where you didn't plan to withdraw more than 1% per year anyway. It's not something that most rich people are going to do. It severely limits your cash flow during your lifetime simply for the sake of saving taxes for your heirs.
The people complaining about these loans have no idea how it actually works.