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How to convert between wealth and income tax

paulgraham.com

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Re: How to convert between wealth and income tax

#691

Post by tclancy »

bombcar wrote: post #383
tclancy wrote: post #291

Earlier quoted context omitted.

>Most people when they earn income save some of it. Therefore it is wealth taxed. This is one of those “check your privilege” moments and one where it is best to look at the median and not just the average when talking about household wealth in the US. Between 57% and 67% of U.S. adults are estimated to live paycheck to paycheck. They aren’t saving it, they’re going into debt because the only local grocery store is a…

Do they still live paycheck to paycheck after receiving a raise? If so, the problem likely isn’t the paycheck.

Ah, the old moral failing! It’s not that there are flaws in the system that could be improved, it’s the poor people who are sinful. Got it!

Re: How to convert between wealth and income tax

#692

Post by well_ackshually »

Nasrudith wrote: post #684
well_ackshually wrote: post #625

Earlier quoted context omitted.

>and pay those taxes with a smile on their face? Considering the alternative for them over the past millennia has been, inevitably that they get caught, hanged, quartered, beaten and other various violent methods: yes, they should smile, they're buying their lives with all that money :)

You clearly don't understand psychology at all. Rule by fear has a major downside that Machivelli warned about. If you keep people under threat all the time, as soon as the threat fails and you can no longer point a gun at your head they preemptively kill you and feel good about it . Threatening violence to get what you want always ends with you being out-violenced by a bigger thug.

It's only by fear if they don't understand how to restrain themselves. Behave well with all your wealth, and nothing will happen: it's the same reason why wealthy patrons of art and craftsmen were at least respected, and why things ended poorly for robber barons.

And no, I do not believe that Musk's flabby arms or Bezos' shiny head are a threat of bigger violence to me anyways.

Re: How to convert between wealth and income tax

#693

Post by BugsJustFindMe »

mannanj wrote: post #689
Nasrudith wrote: post #684

Earlier quoted context omitted.

You clearly don't understand psychology at all. Rule by fear has a major downside that Machivelli warned about. If you keep people under threat all the time, as soon as the threat fails and you can no longer point a gun at your head they preemptively kill you and feel good about it . Threatening violence to get what you want always ends with you being out-violenced by a bigger thug.

This is how alpha chimps function in their tribe. They resort to war and violence to prolong their rule, and it works for long enough, thats all they need for the cost-benefits to be worth it on their side. In humanity, being the alpha chimp, you can actually just run away from the tribe with all your wealth instead of outright die and form a new identity and start a life elsewhere and change your last name and go so…

https://www.independent.co.uk/news/world/europe/alpha-male-a...

Re: How to convert between wealth and income tax

#694

Post by BugsJustFindMe »

jeffreyrogers wrote: post #666
tony69 wrote: post #355

Earlier quoted context omitted.

By “raising death taxes”, I meant comprehensively, eliminating loopholes, as the sources I linked discuss more at length. Re: irrevocable trust, a cursory search revealed no legitimate use case imo, all use cases I see are proxies to skirt taxes or hide income/wealth. What would you consider a legitimate use case for one? Your point re: case law is well taken, but per [2] up until a few decades ago there was a cat-an…

> What would you consider a legitimate use case for one? Setting aside money to pay for a relative who can't provide for themselves, protecting assets if you are professional who faces high chance of being sued (e.g. surgeon), providing for children from a first marriage if you get married and predecease your second spouse.

> Setting aside money to pay for a relative who can't provide for themselves

Wealth transfer.

> providing for children from a first marriage if you get married and predecease your second spouse

Wealth transfer.

> protecting assets if you are professional who faces high chance of being sued

Dodging responsibility for professional malpractice?

Re: How to convert between wealth and income tax

#695

Post by trollbridge »

vannevar wrote: post #572
deeponey wrote: post #467

Earlier quoted context omitted.

this a million times. Land easy, already being taxed. Any regulated financial instrument, also easy, take the minimum average yearly price of held assets. Tricky things like privately held companies, maybe we solve that one later, but even then there are valuations made at various points, anchor to those, be conservative in every case. If the gov primarily exists to enforce property rights... then people should pay i…

If you properly taxed real estate in a progressive way, you wouldn't have to bother with taxing paper wealth at all---the collective value of paper is already reflected in the price of land. People with large paper fortunes inevitably buy real estate, and when they do, their paper wealth inflates the price. This is why median residential housing prices have dramatically outpaced median wage increases, along with anyt…

What level of property tax are you proposing?

Raising property taxes raises housing costs for everyone.

Re: How to convert between wealth and income tax

#696

Post by trollbridge »

rileymat2 wrote: post #503
deeponey wrote: post #467

Earlier quoted context omitted.

this a million times. Land easy, already being taxed. Any regulated financial instrument, also easy, take the minimum average yearly price of held assets. Tricky things like privately held companies, maybe we solve that one later, but even then there are valuations made at various points, anchor to those, be conservative in every case. If the gov primarily exists to enforce property rights... then people should pay i…

We already value private companies with a 409a valuation.

Most businesses in America are small and the owner has probably no idea what it is worth.

They are illiquid assets, not traded anywhere.

Re: How to convert between wealth and income tax

#697

Post by robocat »

well_ackshually wrote: post #625
credit_guy wrote: post #516

Earlier quoted context omitted.

Sure, the government has that goal too. But the government has many tools, and using taxes for that is using the wrong tool. Or maybe you think that billionaires owe us not only to pay taxes, but also to play nice, and pay those taxes with a smile on their face?

>and pay those taxes with a smile on their face? Considering the alternative for them over the past millennia has been, inevitably that they get caught, hanged, quartered, beaten and other various violent methods: yes, they should smile, they're buying their lives with all that money :)

> they're buying their lives

Extortion is the word that summarizes your point.

Re: How to convert between wealth and income tax

#698

Post by well_ackshually »

robocat wrote: post #697
well_ackshually wrote: post #625

Earlier quoted context omitted.

>and pay those taxes with a smile on their face? Considering the alternative for them over the past millennia has been, inevitably that they get caught, hanged, quartered, beaten and other various violent methods: yes, they should smile, they're buying their lives with all that money :)

> they're buying their lives Extortion is the word that summarizes your point.

Ah yes, extortion is not the part where their disproportionate centralisation of wealth threatens your very livelihood with every action they take. Extortion isn't when they happily tell you they're going to replace you with AI. Extortion isn't when they steal your money with unpaid hours, it isn't when they threaten to fire you if you don't shut the fuck up and do as they say, when they act as a state within the state, corrupting institutions and polluting the very ground you, your children and your food grow on, it's when they're being held accountable for their actions and told that if they're going to have a personal wealth equal to that of millions, they also have the sum of responsibilities of these millions.

Just so you know, careers as a bootlicker are kind of a dead end.

Re: How to convert between wealth and income tax

#699

Post by AnthonyMouse »

frmersdog wrote: post #646
AnthonyMouse wrote: post #619

Earlier quoted context omitted.

> Boy, that's going to suck for people whose credit situation has shut them out of most traditional housing situations. There are lots of apartments available with no credit check. They're more often of lower quality, but if your situation is such that you want to spend less on rent and have more left for something else (like paying off your debts), why is it a problem for people to be able to choose that? It's the s…

You don't know what you're talking about. The corporate takeover of most rentals (apartments and homes alike) near the roadways and transit these people need to get to their jobs (let alone in areas where they wouldn't have to commute) has made those rentals inaccessible. They use little-known credit reporting companies specific to the rental industry that have basically no regulatory oversight, and which allow landl…

> The corporate takeover of most rentals (apartments and homes alike) near the roadways and transit these people need to get to their jobs (let alone in areas where they wouldn't have to commute) has made those rentals inaccessible.

No they haven't:

https://econofact.org/factbrief/do-private-equity-firms-own-...

> They use little-known credit reporting companies specific to the rental industry that have basically no regulatory oversight, and which allow landlords to deny applications in an opaque way without liability.

And then you rent from someone else because in reality large corporations own only a small percentage of rental units.

> Housing voucher wait lists are years long; they're basically impossible to get on.

You're again only making the argument for getting rid of those grants people can't get anyway in favor of a UBI that everyone gets automatically.

> What you're talking about it taking people in those dire straits and forcing them to pay MORE money just to keep a roof over their heads

How are they paying more money for anything to receive $1000 in cash instead of a $1000 payment that can only go to a landlord?

> I am, once again, going to state that you don't seem to understand the topic at hand.

Re: How to convert between wealth and income tax

#700

Post by AnthonyMouse »

Manuel_D wrote: post #657
AnthonyMouse wrote: post #615

Earlier quoted context omitted.

> After the series of favorable deals, the value of each share in that corporation goes up. Thus it still incurs capital gains taxes. Only if you sell the shares, which they easily resolve by not doing. > People are good to try and evade taxes regardless of the tax mechanism. Which is why you should use the ones that are less susceptible to it rather than the ones that are more susceptible to it. Trying to identify t…

> The billionaire pays less on $10 in marginal income than a poor person, because the taxes and benefits phase outs result in absurdly high marginal rates on the poor. This is just patently false. The highest marginal income tax rate is 37%. If you've read articles claiming that billionaires pay some absurdly low tax rate, those articles are counting their capital gains as income. Which is just a flat out lie, since…

> This is just patently false. The highest marginal income tax rate is 37%.

Account for benefits phase outs as the tax on marginal income that they are and the marginal tax rate on lower income people is often well in excess of 37%. In some cases it has been in excess of 100% because many of the phase outs overlap and also combine with ordinary taxes.

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