Billionaires should face a minimum tax rate, report says • Hacker News Board

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

#61

Post by ragestorm » Mon, Oct 23, 2023, 2:59 PM UTC

influx wrote: post #58

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…

What happens if they are forced to sell stock in companies they founded and control, and after the sale they no longer have a controlling interest?

They pay 2% on their wealth.

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

#62

Post by Cicero22 » Mon, Oct 23, 2023, 3:00 PM UTC

jandrewrogers wrote: post #34

VikingCoder wrote: post #20

Earlier quoted context omitted.

My wealth was $x one year. And $x + $y the following year. If I work my ass off doing manual labor, $y gets taxed more than if I merely own equity that got me the same amount. And people wonder why the middle class is dying.

In the US, the tax code is such that you pay taxes on capital when you've lost capital too, not just on the gains. This doesn't happen with normal wage income hence why it is treated differently. The lower tax rates on capital reflect the reality that you are paying taxes on the losses too. Tax rates ideally should be flat for all sources of income net of risk, loss, and inflation . To achieve this you either allow d…

I haven't heard that you're taxed when you lose money. My understanding was that If I invest $10,000 in a taxable account, lose $1,000, and withdraw the remaining $9,000, I won't pay taxes on the $9,0000 (ignoring transaction fees).

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

#63

Post by ndsipa_pomu » Mon, Oct 23, 2023, 3:02 PM UTC

ljm wrote: post #55

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…

I think having stronger employee rights such that a company's leadership can't increase their own compensation disproportionately to that of the average employee. A CEO earning 350x the average worker in their company suggests that the worker isn't benefitting from the company's success the same way the boss is, despite them driving the company's value through their labour. There's nothing inherently being wrong with…

> There's nothing inherently being wrong with a billionare

I disagree. The amount of money that a person can effectively use (or need) during their lifetime is likely to be less than half a billion. The people who have any kind of social conscience would reach their desired amount of wealth and wouldn't want to continue accumulating it as they know it's purely at the expense of other people and invariably the rich person has an extreme advantage in any negotiations. For someone to reach half a billion and then continue to exploit others to build their wealth higher and higher is clearly some kind of sociopath. Therefore, having a billion dollars is a clear sign that millions of people have been exploited by that billionaire.

> I think having stronger employee rights such that a company's leadership can't increase their own compensation disproportionately to that of the average employee

I like that idea, but it would need a way to count non-income benefits too. Also, using a mean average can be greatly skewed by the CEO's package, so maybe a median average would be more suitable.

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

#64

Post by philjohn » Mon, Oct 23, 2023, 3:02 PM UTC

clarkmoody wrote: post #29

claudiulodro wrote: post #26

Earlier quoted context omitted.

Why is it unthinkable to make billionaires generate some income to pay taxes? I pay property taxes on the "unrealized capital gains" of my house, and somehow I make it work.

Perhaps you shouldn't have to pay unrealized gains on your house?

Cool - how are the roads, local police, fire etc. getting paid for then?

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

#65

Post by thomasdub » Mon, Oct 23, 2023, 3:04 PM UTC

pclmulqdq wrote: post #54

claudiulodro wrote: post #26

Earlier quoted context omitted.

Why is it unthinkable to make billionaires generate some income to pay taxes? I pay property taxes on the "unrealized capital gains" of my house, and somehow I make it work.

You don't pay property tax on unrealized gains in your house. You pay it on the appraised value of your house. If you don't like that appraised value, you can appeal it (and many people do), and it often doesn't rise nearly as much as the actual value of the house.

"An appraised value" could work for companies too! Though, in fairness, for many billionaires the gains are pretty explicit i.e. we know the public stock price or the 409a valuation.

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

#66

Post by pclmulqdq » Mon, Oct 23, 2023, 3:05 PM UTC

jackmott42 wrote: post #15

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.

Elon bought twitter with unrealized capital gains.

He used a margin loan for part of it (you can think of this as extracting money from unrealized gains, but it's kind of different), liquidated shares for part of it (realizing a gain in the process), and will pay interest on that margin loan (realizing a gain for each payment) for the duration of the loan. If he wants to pay off the loan, he will have to realize a gain. The margin loan is effectively tax deferral, not tax elimination.

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

#67

Post by eli » Mon, Oct 23, 2023, 3:05 PM UTC

makomk wrote: post #49

eli wrote: post #41

Earlier quoted context omitted.

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 wi…

Maybe if you only read the headline?

I find the article pretty clear, though brief and not very well written. The actual report it's discussing is crystal clear.

The situation is that the wealthy keep getting wealthier without generating any taxable income. Obviously a minimum income tax rate could not possibly solve this problem unless we also redefine income.

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

#68

Post by HDThoreaun » Mon, Oct 23, 2023, 3:12 PM UTC

chatmasta wrote: post #59

sschueller wrote: post #52

Let's first change the law to not let them borrow against their unrealized assets tax free. In fact the tax to get a loan should be higher then if you sold your shares at a company to discourage this crap. Or limit the total amount or forbid it outright.

But they eventually need to sell some assets to repay the loan, right? They'll pay tax when they sell them.

If they have a 3% interest loan and their assets grow at 5% per year, then no, they never need to repay the loan.

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

#69

Post by ndsipa_pomu » Mon, Oct 23, 2023, 3:13 PM UTC

AnimalMuppet wrote: post #57

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…

I think we need to start treating indiscriminate internet commenting as a mental illness. That is: You state that we should treat extreme wealth hoarding as a mental illness. Well, who are you? A mental health expert? Someone with input to the diagnostic manual? Do you actually have a basis for why we should take your opinion seriously? Or are you just some random person pontificating on the net, the same as I would…

> I think we need to start treating indiscriminate internet commenting as a mental illness.

The damage caused by indiscriminate internet commenting is negligible (excepting the click-bait magnifying effects of certain social media networks). The damage caused by wealth hoarding is tangible and leads to corporations acting against the welfare of humanity in their pursuit of greed.

> You state that we should treat extreme wealth hoarding as a mental illness. Well, who are you? A mental health expert?

It's concerning that when posed with an opinion, you jump to an Ad Hominem point of view. Who I am is not important, and you should judge my comment on whether it raises an interesting point worthy of discussion or further consideration.

> Who did Warren Buffet exploit? What malfeasance did he do?

I don't know about him apart from what I just saw on Wikipedia, so I can't help dissect which people have been disadvantaged to gain him massive profits. There is mention of him being a philanthropist, but he is shown as sitting on a net worth of $117billion which can surely be put to better use than just him hoarding it.

However, your language indicates that you are trying to pick an argument, despite not actually providing any counter-argument, so I shall say "Good Day to you"

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

#70

Post by antisthenes » Mon, Oct 23, 2023, 3:16 PM UTC

claudiulodro wrote: post #26

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.

Why is it unthinkable to make billionaires generate some income to pay taxes? I pay property taxes on the "unrealized capital gains" of my house, and somehow I make it work.

> I pay property taxes on the "unrealized capital gains" of my house, and somehow I make it work

Is the tax assessed value of your house actually the same or higher as its most recent market value? If something happened that would put your house market value below its tax assessed value, then you typically won't have any "unrealized capital gains" at all.

Somehow I doubt that, it usually lags true market value by at least 3-5 years.