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

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

#61

Post by ulkram »

ninja3925 wrote: post #39

I have noticed that politicians always use extremes (many standard deviations away from the average) to illustrate a population.For example, Warren Buffet wealth is in the top 10. Yet, Warren's policies target the top 1% (top 10 is the top 0.00033% of the top 1%). He is not representative of the top 1% in any way!! Show me the median and let's talk. I am surprised people bite at this manipulative narrative. It seems…

False. The Ultra-Millionaire Tax Act would impose a tax on the wealth of the top 0.05 % of Americans (people with > 50 million in wealth).

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

#62

Post by bmitc »

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?

My understanding is that these ultra rich people have their wealth tied up in investments, so they never "see" any income despite their investments' massive growth. To get cash and buy things, they simply take out loans at super low interest rates using their investments as collateral. Basically, it's cheat codes.

It's probably why CEOs also like to take super low salaries.

What I don't understand is how their stock gifts or dividends don't trigger more taxes or why their taxes are indeed so damn low.

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

#63

Post by outlace »

What if we mandate that all workers must get part of their compensation in the form of company shares so that if the company explodes in value, it's not just the executives that become billionaires and the workers are just still going paycheck to paycheck? This seems common in the tech world but not so much in other companies.

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

#64

Post by nerdjon »

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?

This is something I have always been curious about but really not talked about in any of these studies.

(I am purposefully ignoring the companies not paying taxes since that I think is a valid issue if we are talking about income).

So Warren Buffet may have $84 billion in stocks and assets, but how much did he actually sell? How much money went from selling stocks to his bank account?

I think that number if far more important.

Yes it is true that we have excise taxes on cars and property taxes on homes, I feel like a just plain "wealth" tax is not the right solution.

I don't like the idea that the government can say, "you have X amount in stocks, you must sell a certain perfect so you can pay us in taxes". Which is what this sounds like to me? Or am I majorly missing something here. Taking the Warren Buffet example, he would have to come up with 2.5 billion in taxes

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

#65

Post by dahfizz »

kogus wrote: post #49

One answer would be a federal sales tax, combined with a Universal Basic Income. The UBI would be equal to the amount of the tax on up to some minimum income level (say, 50k / year). In other words, everyone gets a monthly check that is essentially a rebate on their sales tax up to the income threshold. That's simple, loophole-free, and avoids the privacy invasion that accurate income tax collections require.

This would also have the benefit that all money you save and don't spend is tax free. Normally you have to jump through hoops to save and invest pre-tax money.

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

#66

Post by littlestymaar »

cscurmudgeon wrote: post #26
aantix wrote: post #5

Earlier quoted context omitted.

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

https://www.npr.org/2019/03/01/699261950/why-a-wealth-tax-di... > ROSALSKY: In 1990, there were 12 countries in Europe that had a wealth tax. Today there are only three. Perret says they didn't work for a lot of reasons. Among other things, it costs a lot to enforce. It pushed rich people out of the country, and the wealth taxes didn't raise a lot of revenue. But > ROSALSKY: But Warren says that her proposal, which h…

> Perret says they didn't work for a lot of reasons. Among other things, it costs a lot to enforce. It pushed rich people out of the country, and the wealth taxes didn't raise a lot of revenue.

In France at least, it has been a topic of political debate for decades before the recent abolition and what's clear at this point is that it costed much less than what it brought (both in terms of law enforcement, and in terms of rich people moving out of the country).

> Unfortunately, nothing in her proposal justifies that. Why can't companies and people just move out of the US to avoid this?

A wealth tax isn't a tax on a company, it's a tax on the owner of the company so moving the company won't help here. And the owner leaving the US won't help either, since they will still have to pay taxes as long as they remain a US citizen. Renouncing to US citizenship would still be an option of course, but I'd expect the opportunity cost would be much higher than the cost of the tax itself.

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

#67

Post by X6S1x6Okd1st »

ninja3925 wrote: post #39

I have noticed that politicians always use extremes (many standard deviations away from the average) to illustrate a population.For example, Warren Buffet wealth is in the top 10. Yet, Warren's policies target the top 1% (top 10 is the top 0.00033% of the top 1%). He is not representative of the top 1% in any way!! Show me the median and let's talk. I am surprised people bite at this manipulative narrative. It seems…

> The Ultra-Millionaire Tax would apply to the wealthiest 100,000 households in America and generate at least $3 trillion in revenue over the next decade—all without raising taxes on 99.95% of American households.

Huh? 0.05% is 20x smaller than 1%

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

#68

Post by onlyrealcuzzo »

jeffbee wrote: post #42
aidenn0 wrote: post #29

Earlier quoted context omitted.

I would even go so far as to say the typical middle-class family has real property in an amount that exceeds their net-worth.

Median American net worth is $121k. Median home price is $380k. Typical real property taxes are .5% - 2%. Call it 1% and that makes the typical wealth tax on middle-class people roughly 3% per year.

>60% of homeowners are in debt on their house, though.

So they are getting appreciation on leverage.

I would argue the median homeowner is being subsidized, having a negative wealth tax.

The local government takes away 1%, but the Federal government pumps up your asset price by >2% - that's a -1% wealth tax (paid entirely through inflation by non-homeowners).

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

#69

Post by dahfizz »

belltaco wrote: post #41
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…

>Plus, a lot of that wealth is likely 'in' his company, which is really just fake money. Then maybe we should give the poor some of this "fake money" since it's fake and doesn't matter anyway. >EDIT: Repeat after me: net worth increases are not income. Net worth increases are not income. I mean, I "made" $250k last year in home appreciation, but that's just fake money. If they taxed me on it, it would come out of my…

> you can borrow against assets like this with secured loans

Okay, and how do you pay back these loans? That's right: with your income. You're just moving the problem around.

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

#70

Post by ulkram »

cscurmudgeon wrote: post #26
aantix wrote: post #5

Earlier quoted context omitted.

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

https://www.npr.org/2019/03/01/699261950/why-a-wealth-tax-di... > ROSALSKY: In 1990, there were 12 countries in Europe that had a wealth tax. Today there are only three. Perret says they didn't work for a lot of reasons. Among other things, it costs a lot to enforce. It pushed rich people out of the country, and the wealth taxes didn't raise a lot of revenue. But > ROSALSKY: But Warren says that her proposal, which h…

not an expert, but I thought the US is unique in that you can't escape taxes unless you renounce citizenship. and even then, there's an exit tax
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