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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]

#91

Post by satronaut »

mrkurt wrote: post #73
nerdjon wrote: post #64

Earlier quoted context omitted.

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…

You're not really missing anything, but there's a giant loophole. If you have $84 billion (or even $20 million) in stocks and assets, you can borrow against them without converting them to income. Then you can die. Then your estate pays off the debt without paying income taxes. Thus, 0 income taxes over a lifetime of converting wealth to income.

but the investments generate tax's. If I invest 1 million dollars to hire 10 people at 100,000 $ each, they all pay income tax's. That income tax wouldn't be collected if it weren't for the investment.

* round nubmers ** you'd pay 150,000 usd on a 1 million dollar investment cashout

federal income tax on a salary of 100,000 USD times 10 is 151,040

So the government still gets their tax's (and more if you countother ancillary tax's) AND 10 people have a job

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

#92

Post by RandomLensman »

X6S1x6Okd1st wrote: post #56
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 Almost every single European country that had a wealth tax repealed theirs.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 sou…

Germany discontinued it after it was struck down by the supreme court because it only taxed liquid/easy to measure wealth. Any new wealth tax would have to extend to all forms of wealth and would therefore be very costly to administrate. Successive governments have so far refrained from creating a new version.

In fairness, the "old" wealth tax did not bring a lot of revenue.

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

#93

Post by bin_bash »

basseq wrote: post #82
Closi wrote: post #36

Earlier quoted context omitted.

> 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…

To clarify, if you were paid in gold, that's still income and you would still be taxed on the fair market value of that gold. It's income that's taxed, not USD. Same as stock grants: if you're paid in stock, you pay income taxes when that stock is granted, at the market value of that stock. You aren't taxed on the FMV increase of that stock until you sell it (at which point you're taxed on capital gains).

yes but billionaires never sell. They take out loans using their assets as collateral. That way they don't have to report income.

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

#94

Post by vonmoltke »

X6S1x6Okd1st wrote: post #56
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 sou…

From the article you cited (just above the examples):

> In 1990, about a dozen European countries had a wealth tax, but by 2019, all but four had eliminated the tax because of the difficulties and costs associated with both design and enforcement. Belgium, Norway, Spain, and Switzerland are the countries that raised revenue from net wealth taxes on individuals in 2019 with net wealth taxes accounting for 1.1% of overall tax revenues in Norway, 0.55% in Spain, and 3.6% in Switzerland for 2017.

The citation for those statements links back to the OECD, so they apparently don't count the Italian and Dutch taxes as "wealth taxes". The NPR transcript linked elsewhere says only three countries have it, so that interviewee may not be counting Belgium either (since the tax is solely on financial instruments and not total wealth).

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

#95

Post by X6S1x6Okd1st »

rlewkov wrote: post #90

The ultra wealthy, if not breaking the tax law, are paying what the government believes they should pay and are not avoiding anything. Congress wrote, voted on, and passed the tax laws.

Yeah and this is an initiative to change the law.

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

#96

Post by evilos »

dantheman wrote: post #24
jsilence wrote: post #16

Earlier quoted context omitted.

Yeah, not taxing the rich also does not work. See the trillion Dollar tax break Pres. Trump and the GOP implemented. The savings were supposed to somehow trickle down to the "lower decks", but this has proven not to happen. Meanwhile the ultra rich are getting ultra richer and the rest is getting poorer. So lets globally coordinated tax the rich for a while in a way that they can not evade their net wealth to some ot…

The rich already pay almost all of the taxes anyway. The government just needs to do less to balance the budget.

Well that is expected when they own most of the capital/money. That's not really a factor or surprising.

What is important is how much a person is paying as a function of how rich they are. Rich people get to pay way less and it's not fair. They can get around tax laws because their cash flows don't look like the average citizen's tax flows.

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

#97

Post by freshpots »

anonymoushermit wrote: post #7

You can tell how close we are to complete collapse by how hard they agitate for outright wealth confiscation, and how sloppy they are with their attempts at intellectual sleight-of-hand. Like clockwork, from a historical perspective.

Care to elaborate? Some further reading/sources?

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

#98

Post by mrkurt »

satronaut wrote: post #91
mrkurt wrote: post #73

Earlier quoted context omitted.

You're not really missing anything, but there's a giant loophole. If you have $84 billion (or even $20 million) in stocks and assets, you can borrow against them without converting them to income. Then you can die. Then your estate pays off the debt without paying income taxes. Thus, 0 income taxes over a lifetime of converting wealth to income.

but the investments generate tax's. If I invest 1 million dollars to hire 10 people at 100,000 $ each, they all pay income tax's. That income tax wouldn't be collected if it weren't for the investment. * round nubmers ** you'd pay 150,000 usd on a 1 million dollar investment cashout federal income tax on a salary of 100,000 USD times 10 is 151,040 So the government still gets their tax's (and more if you countother a…

Very few business pay salaries out of investment money. And even when they do, it's temporary. If salaries were paid with investments, the investments wouldn't ever become more valuable.

When you buy stock, you're not paying salaries. You're buying ownership of something that has value, generates income, and mostly intends to use that income to pay salaries.

The argument you're making is an argument against corporate income taxes. That's different.

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

#99

Post by commandlinefan »

mrkurt wrote: post #73
nerdjon wrote: post #64

Earlier quoted context omitted.

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…

You're not really missing anything, but there's a giant loophole. If you have $84 billion (or even $20 million) in stocks and assets, you can borrow against them without converting them to income. Then you can die. Then your estate pays off the debt without paying income taxes. Thus, 0 income taxes over a lifetime of converting wealth to income.

> you can borrow against them without converting them to income. Then you can die.

But surely you have to make payments on those loans before then... interest payments at least. You're either making those payments with the money you were loaned or from your regular income (that was taxed in the first place). At that point you might as well just pay the capital gains taxes because you're losing the same money to interest payments anyway.

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

#100

Post by leetcrew »

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 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.

this is a good definition for someone like me. if I had to liquidate all my assets today, I could easily figure out how much they are worth just by looking at existing bids.

while no less "true", this definition isn't very helpful at scale. warren buffet can't just sell all his berkshire stock by filling orders. depending on the circumstances of the sale, it could either be worth a lot more than n * last price or a lot less.

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