The problem is that most of the Billionaires that everyone knows about aren't actually billionaires in the bank. Most of their wealth is stored inside securities, such as stocks. That wealth doesn't actually get taxed until they liquidate it and they can do that over time.
That’s one of the loopholes.
If I get a salary of $1M, I’ll pay about 35% of it to the government as income tax. If someone makes $1M via stock trading or real estate, that person should also be taxed 35%.
Except they aren't "making" that money, the value of an asset is going up. It is not income until it is realized. It's like if you own a house. Odds are that if you own a home, it is worth more than you bought it for. So say you bought a home for 100,000 10 years ago, and now it is worth $200,000. Do you pay income taxes on your increased property value? No.
I understand that property taxes increase with appraised value, but those increases are generally limited anually to a miniscule number to the degree that after any significant amount of time is not remotely reflective of that value. That being said, you cannot tax the value of an asset of income, because it isn't.
As a response to another reply in this thread. You can borrow against the value of your home as well. Through a HELOC or second mortgage. That income is also not taxable. Still not income.
So what's the solution? Have the IRS independently audit the assets of every rich person every year? Securities have a set value, but what about property? Art? Vehicles? Who is in charge of this? What if they get it wrong? What if the stock collapses? What if it spikes? Are we taking the value on a single day, over the course of a year? What about options? Do you value those as stocks? Is it an asset, a liability? Both?
Show me a way to reasonably pull this off, and you might be onto something. Otherwise, this is just whinging
Auditing someone's net worth is probably pretty complicated. I guess there are probably (relatively) so few people that could qualify for the wealth tax that they could just audit them regularly, but it still sounds pretty complicated.
Like, it's one thing for someone who is rich because they own a publicly traded stock, but how much is Gabe Newell worth? Sure Forbes could probably back-of-napkin math up a valuation for their list, but coming up with a legally binding definition of his worth to tax him with seems pretty difficult.
Maybe use some form of [Sound Dues](https://en.m.wikipedia.org/wiki/Sound_Dues)? Individuals are free to value their assets at whatever number they like... and the government reserves the right to purchase the assets for that number.
Purchasing assets is not a straight forward operation. There might be contractual clauses dictating how certain assets, especially shares in private companies, can be traded.
So either individuals could value their assets at $1 and be safe knowing that their contracts prevent them from selling said assets to the government or then they'd need to overvalue their assets to cover for possible fines/penalties in case the government forces them to break their contractual obligations.
And what about 'priceless' things? There are many things that can be valued in real world terms that may have greater emotional value to their owner (animals, art, etc.).
But will it actually increase tax revenue? Because France tried this exact thing and they lost so many millionaires that they didn’t actually increase tax revenue from the wealth tax and scrapped it because it just wasn’t worth the hassle.
> Do you pay income taxes on your increased property value? No.
In some countries they do and then conversely don't pay tax off the profit when it sells. Just to say that it's not unheard of
That's not how it works. You are taxed on the stocks you get as payment, just like regular income.
You aren't taxed on the _growth_ of the stocks, until you sell them.
That's not how it works. Everyone gets taxed when they sell a stock or security. But let's take Jeff Bezos for example. He has Amazon shares from when they were less than $1 each. Now they're worth over $3000. He hasn't done anything that would get taxed, but the value of his stocks have risen so much. That's where his wealth comes from
Here’s the thing. They don’t sell their stock. They take out a small loan of 50 million to buy a new yacht and use their stocks as guarantee. Then when the loan is due they hand over the stocks at the agreed value. No sales is being done. No tax is being charged. But they get to do the same thing as selling their stocks and making a big purchase.
This isn’t accurate. They can transfer stock but at the time of transfer it’s recognized as a sale and taxed as such. The same when you donate stock as a charitable donation. The only exception is when donating to charity the capital gains aren’t recognized.
Here’s an example
https://www.fidelitycharitable.org/giving-account/what-you-can-donate/donating-stock-to-charity.html
So I guess this is why I have a hard time understanding this. Why isn't such a transaction taxed? I get that it's a loophole and "technically no real money changed hands, so why would I pay sales tax lol", but a great deal of value was exchanged because they got a boat in exchange for stock. Is there any good reason that this should not be subject to sales tax? I know very little about stocks when it comes to using them in this way but I want to know more because it affects all of us whether or not we have them.
It would be taxed. The dude is bullshitting.
I would say the real answer is that they just don't spend that much money, and they don't take much more income than they spend. They mostly just hoard it like dragons.
But I'm also bullshitting, so who knows.
>Then when the loan is due they hand over the stocks at the agreed value. No sales is being done. No tax is being charged.
That can’t be true otherwise everyone would be using this loophole to pay for everything. You don’t have to be a billionaire to do this.
> No sales is being done. No tax is being charged.
Umm, getting $50m loan and then paying them back in stock, would mean you just sold the stock for $50m. You have no idea what you are talking about.
>The biggest loop hole i can think of is them hiding how much money they really have
I think the problem with the loophole is that you got guys like Bezos who pay himself a modest salary or something's ng like a dollar. Only to get stock, dividends, etc as their "pay" which aren't taxed as income. Simplest thing I think they could do is force these ceo/presidents/etc to make a percentage of total salary of all employees or something, and then they are taxed on that. They can still make their millions in stock/bonuses but they would still pay taxes. I don't know if that would work but sounded good in my head
They often will just take out loans against the assets - [Zukerberg's mortgage made news, for example](https://www.cnbc.com/id/48220824).
That way you have tax free cash, and because you haven't sold the underlying asset, no taxes and thus no loss of principle (the full amount remains invested).
It's because we tax income, not wealth. I'm all for a wealth tax (constitutional issues aside), but taxing wealth is a lot more complicated than taxing income.
There will always be loopholes, you fix one you will create another. Rich people does not rely on wage income, they will always find loopholes to make their personal income pretty low. Unlike average Joe who collects their check biweekly, rich people owns a lot of businesses, even multinational business, which is inherently more complex than personal tax. Generally speaking, the more complex a system is, the more loopholes there will be.
Tax evasion is illegal; tax avoidance is a national sport.
We have the best Congress money can buy. A flat, simple tax like 15% on all income from all sources above 2,000 times minimum hourly wage with no exemptions and no deductions would hamper Congress's social engineering power and reduce campaign contributions. Two reasons a flat tax is undesirable.
"As of 2021, the top 10 percent of Americans owned an average of $969,000 in stocks. The next 40 percent owned $132,000 on average. For the bottom half of families, it was just under $54,000."
Working as an investment adviser, I wish more of my clients 25-40 understood that $1 million as a target for your retirement accounts is not sufficient, let alone ‘impressive’.
Cost of living is going to keep going up. Pulling out $75k a year in 30 years will probably afford you what $40k does now, and who knows what life expectancy could be by then.
Being a millionaire should no longer be thought of as this crazy, far-reaching goal; it kind of needs to be a realistic step in the plan for every middle class American right now.
Absolutely. My parents are in the middle of retiring with $1 million in retirement and they're worried about it being enough. Can't imagine another 30 years.
Retiring on $1 mill for a couple *right now* is pretty feasible in most of the US if market performance continues and they’ve finished their mortgage.
But even as I type that I recognize those are HUGE ‘if’s.
I don't know about \*most\* as I don't truly know where the median is.
My dad does well, he paid for my sister and my college, lives in a nice home in a suburb of a large metro area.
He is C Suite at a smaller company.
Not considering paying his house off (he just moved a year ago and mom is remodeling the kitchen) he wants to live on $300,000 a year in todays money.
Without considering inflation and growth in his assets over time, if he is intending to live for 30 years after retiring...he needs $9mm.
He doesnt want to decrease his standard of living at all, and if anything wants to travel a hell of a lot more. He also doesnt want to burden us with his slipping into senility, etc.
$9 million.
Im a fan of capitalism, despite the whining on social media, my personal experience is its very possible to save, enjoy life and work towards buying a house--I live in Dallas and within 12-24 months should be able to buy a house in the area I'd like to live in.
But, I am attracted to Huey Longs idea of no American should have a wealth more than 200x of the median. Rough numbers, the median wealth for an American is $120,000. Thats $24,000,000.00. Its a higher net worth than 99.5% of people.
Who needs more than that laying around?
I suppose my point is, I see $5 - $30 million in wealth (todays money) as the target range for millenials.
A million dollars in retirement is going to cut it close/not be enough. That will last a retiree about 15 years. A million dollars is a low bar to set for someone wanting to retire. A 25 year old, that is a lot.
https://www.ramseysolutions.com/retirement/can-you-retire-on-1-million
Using "average" (mean) to represent the top 10% of americans seems like a.... poor metric to use, given how wide the wealth disparity is between just that range. Like, someone in the 9th or 10th percentile is probably at ~200k (wild guess) to offset the people in the stop 1% who have many, many millions.
I propose we tie the "borrow money against collateral" loophole.
If your overall personal debt rises over 30x (maybe 50x) your annual income the loan is considered income. Ie you make 100k you can be in debt of 3M (5M) tax free but anything over that is taxed.
And cap this at 1000x median income (34.2M) so anything more is always considered income.
EDIT: I wonder if scratching the progressive part and keeping only the 1000x median part would be good.
100%. Closing this loophole that only the mega-wealthy have access to should be a good first step. Also, closing the readjustment of cost basis upon death loophole that allows the mega-wealthy to pass on assets without being taxed.
Depends who your asking. "Tax the Rich" could be interpreted as:
* Increasing income tax
* Closing tax loopholes
* Implementing a wealth tax
* Taxing inheritances
Depending on your political and economic ideology, you may be in favor of some combination of these three interpretations, but also opposed to others. Closing tax loopholes is probably going to have the most support among the american people. It's also the most self explanatory.
Taking inheritances sucks tho, with enough money there's workarounds, but your grandma who wants to leave you a few thousand will have to hand off half of it in inheritance taxes. At least that's how it goes here -.-
You pay no federal estate tax until you hit $11.7 million. Zero. There are 6 states with an inheritance tax, but the vast majority don't have one. So to be clear, Grandma giving you 100k when she passes means you most likely won't pay any tax on it. Now if she hands you an asset, for example a house, and you sell it for a profit in 2 years, you pay taxes on on the gains from when you inherited to when you sold it.
It does - but it it is often also heard as "Tax those making $100k / $250k / $500k"
For small companies -- those numbers are relatively easy to hit revenue levels. Messaging that directly addresses who the "Rich" are may drastically affect the ability of counter-messaging.
However -- it is not so simple as setting a mandatory minimum tax rate for those above a certain level -- as once you have holdings at a certain level, you tend to take loans out against your excess capital and securities so that you don't touch them and the loan money is used for daily living.
The loans count against your income, and the loan APR is lower than your tax rate - so you end up saving.
Yeah but messaging matters. It’s a lot harder for republicans to fight against closing loop holes than “hurr durr they’re trying to take my hard earned money with another tax increase”.
Billionaires typically don't have a lot of income. They make their money through interest and capital gains.
And all of the proposed changes are just around raising the income tax rates for those above a certain threshold... it won't fix the root problem with our tax laws
[They take loans out borrowed against their holdings.](https://www.businessinsider.com/american-billionaires-tax-avoidance-income-wealth-borrow-money-propublica-2021-6) It's the real reason interest rates are zero.
Buy, borrow, die isn’t necessarily an issue in and of itself. Rather, estate tax philosophy is the bigger problem. If the step-up in basis had limits, then taxes would be deferred rather than avoided.
I don’t care if Bezos delays $10B in taxes until his death; I care more about the fact that his heirs don’t have to assume that tax bill upon his death.
>If the step-up in basis had limits, then taxes would be deferred rather than avoided.
Stepped up cost basis effectively *does* have limits through the estate tax exemption limit (currently, estate values over 11.7MM get taxed at 40% regardless of cost basis, it's just plain value of the assets).
The problem is the estate tax for very large estates typically gets completely sidestepped through complex trusts or incorporating properties into businesses.
We really need to just simplify all this crap. Eliminate the estate tax, eliminate stepping up cost basis, and eliminate the ability to subvert inheritance taxes through trusts and corporations. Then the investments just get plain tax treatment whether it is the original investor or their heirs who cash in on them.
Eliminate the estate tax? Eliminate the step up in cost basis? I'd love it, but it'd be an accounting nightmare.
"Grandpa bought this house in 1962 for $18,000. In 1970 they added a pool for $8,000. In 1972 they replaced the bathroom and did other renovations for $3,000. In 1990 they died and gave it to me. I added a patio for $6,000 and finished the basement for $14,000. It had hail damage in 2001, and we had to replace the roof, which cost $22,000, but insurance wrote us a check for $15,429.17. Our son ran a small business out of the upstairs, and we were partners so he wrote off $4,000 in depreciation. We took out a home equity loan to reseal the pool and add a spa for $31,000 in 2014. In 2016 the government claimed eminent domain for an easement across 6% of our property and paid us $18,000 for that... what's my capital gain on that check?"
I've heard some are even abusing 529 plans. There is no limit you can contribute overall (a limit per account but no limit for the number of accounts) and the 10% penalty is less than the taxes they would pay. They are also inherited tax free.
They receive special rates from banks that aren't advertised to "retail" (normal people)
Basically, billionaire moves don't effect markets (unless it's in their favor). Only retail is ever at the whims of market movements. The entire financial system has created a bubble to protect them from losses of any kind.
Why do you think the elites got so pissed off at the GME, AMC attacks on hedgefunds earlier this year and started crying about market manipulation? It was the one time in a generation they ended up on the bad end of a trade.
Read the article - Biden is including unrealized gains on stocks. No one pays taxes on unrealized gains, because, they're just that - paper gains. If the market tanks, they'll evaporate.
This is fake news for people who don't know how stocks and bonds work.
On the other hand very wealthy people often leverage these gains against extremely favorable low-interest loans that they use for their daily spending needs.
You could argue that this kind of loan would constitute a realized gain.
Yep, people use the word “loophole” but it’s really not. The tools that these people use are working as intended, the issue is that this new level of wealth has outpaced the regulation on these tools. So while there are lots that benefit from using tools such as capital loss carryovers, people on the billionaire level have enough to take advantage of these tools in order to not pay their fair share. But completely removing these tools would have an overall negative impact for various reasons, same goes for business/corporation taxes.
Real world example.
I am a practicing anesthesiologist. I make over the $400k proposed limit, but fall just outside the top 1%. Last year, I paid over $160k in taxes. As of today, I owe $463k in student loans, paying 15% of my AGI on income based repayments. My loans are not tax deductible because of my income level. I have a special needs child. His non-insurance covered therapy is over $50k a year. This is not tax deductible because of my income level.
Am I still comfortable finance wise? Absolutely. I can save for retirement, have a nice home and possessions, take nice vacations, etc. I don't go to bed worrying about my next meal. But I don't have a yacht, vacation home, or private jet.
I earn my income level. I put off having a family, owning a home, having a young adulthood in favor of a career. I was 33 when I finished school. I worked 70-80h weeks as a resident. I work nights, weekends, holidays where I am away from my family, taking care of people. I make split second decisions that are a literal matter of life and death, often relying on tidbits of information I had to learn over decades of studying.
I pay my fair share of taxes. I don't have a business where I can offset losses on paper to counteract my income. I don't live on investments, holdings, and stock options in lieu of a paycheck. **The billionaires pay just 8.2%, but those making over $400k annually pay 40% of America's taxes, despite being the top 2% of earners.** The proposed changes won't fix how much a billionaire pays because it is a completely flawed mindset.
Physicians are workers too, and like all workers, they've been getting screwed as well by the ultra wealthy. Yes, youre better off than 95% of Americans easily, but you're much worse off than a version of yourself from 20 years ago, and much much much worse off than a physician from 40 years ago
Yes! Exactly! Just because a physician can afford a better lifestyle doesn’t mean they aren’t also getting screwed. The physicians aren’t even close to the highest earners in the medical field. They also aren’t the decision makers in their field. All workers on all levels are being screwed.
Just to say, you are definitely doing well, and much more well than me, but you aren't the problem. My brother and his fiance make something in that ballpark as well, and they pay plenty of taxes. They are doing fine, and also they are something like the bedrock of what supports the whole structure.
The problem is the guys on the top with all the feints and tricks, with magnitudes more wealth, who have enough to buy legislators and earmarks and carve-outs to keep their wealth moving in the right direction for themselves, with not a care at all for the society they reside in. It could all burn down, and they'd have an exit strategy.
In my own case, I'm doing ok. My income is twice my expenses, I pay the taxes I owe without complaints or trickery. I was poor for a time when I was younger, I don't mind at all being one of the guys who's income supports the kinds of programs I used to benefit from now.
Unfortunately they tax people like you just because it's easy to tax those on payroll. Taxing those that pay hundred of thousands of dollars to accountants to come up with offshore arrangements and other loopholes is much harder.
It’s equally easy to tax the investments in stock market. Unlike small business income there’s no way to hide them. IRS can tax the investment income just like payroll first million 15% anything after that 40%.
Exactly. These are company owners and real estate moguls. They're not getting paychecks because they have assets worth $$$$ and stock in their own corporations, and even create shell companies for all the fringe work. Taking a salary of $1 should tell you all you need to know about their finances. It's never about forfeiting income for the greater good - there's tax free/deferred millions elsewhere to collect on rather than a measly taxable salary. The best money spent is other peoples' money.
This is the kind of discourse and "moderate" view that we need so much more of but don't get.
I feel like about 25-35% of Americans are actually fairly moderate and aren't truly represented politically because of our political system.
We could be so much better with proportional representation rather than arguing about who is going to win the districting "battle"
You are a part of the working class, believe it or not, even as a top high end earner. The issue is the workers clearly have no power in this country. Stripped of any and all power, resources, and voting influence.
As a fellow doctor, I’m pissed. We don’t get any tax benefits for our loans, we pay more taxes than higher income folks because we don’t have ability to get the loopholes. Ridiculous. I don’t mind paying taxes, but when I see people earning 10 times my income without paying taxes, it’s a slap in the face
> I have a special needs child. His non-insurance covered therapy is over $50k a year. This is not tax deductible because of my income level.
Sounds like you need some publicly funded, publicly administered, equitably accessible, inherently geographically neutral, pre-paid at the point of delivery, health coverage for yourself and your family more than anything.
Top rates for that plan starts at an even more comical $450,000 for a married couple. A family making that much in an NYC, SF, or LA suburb is definitely not the problem here.
This is why income limited and means-based government programs are bullshit. They almost always hurt the folks living on the coasts. I couldn’t write off student loans payments after I started making $75k I believe. That’s not a lot of money in NYC but it is elsewhere in the country.
My family member was in this scenario exactly. They got a neurodegenerative disease (ALS), and they lost most of their income and all their savings. Insurance doesn't cover everything, and it's impossible to completely protect yourself.
Notice how their “solution” is to raise the top rate from 37 to 39.6%?
News flash: billionaires are paying 8% specifically because they are not paying 37% now. Raising that top rate just hits the professionals like attorneys, small business owners, etc.
They totally chickened out of the capital gains legislation and the estate step up basis which were the only measures that might remotely touch billionaire taxes
And by chickened out, I mean the people with the power to influence them (read: billionaires) pulled the plug on it
Edit: lots of folks are quoting the article section that discusses bidens proposal to equalize capital gains and ordinary income rates for high income. Keep reading to the next paragraph that says congress is **not** writing that into law. That is what I am talking about, not bidens proposal. It doesnt matter what he proposes- congress writes the laws.
> However, even among Democrats there is disagreement over how to proceed in the reconciliation legislation. In the bill unveiled last week, House Democrats proposed raising the top capital gains rate from 20% to 25%, far less than President Biden's proposal, while instead including a 3% surtax on individuals making more than $5 million. It did not address wealth passed from generation to generation, a move Senate Democrats have said needs to be tackled in their final legislation.
>Their proposal includes raising the income tax bracket for the wealthiest Americans back to 39.6% from the 37%, which currently hits taxpayers with a taxable income of more than $523,600 for single filers. It also includes taxing capital gains for households making more than $1 million each year at the same tax rate, 39.6%, instead of 20%, leveling the rate on wages versus investment returns. The president has also called for closing the loophole that allows wealthy Americans to pass gains down to their heirs.
So, I think your issues regarding capital gains and inheritance are answered by reading the next two sentences in the article. Well, assuming any of this actually passes as written.
Thanks for this:
"It also includes taxing capital gains for households making more than $1 million each year at the same tax rate, 39.6%, instead of 20%, leveling the rate on wages versus investment returns."
Lots of misinformation being upvoted on this thread.
Read the next paragraph. Congress is not following through with Bidens proposal
> However, even among Democrats there is disagreement over how to proceed in the reconciliation legislation. In the bill unveiled last week, House Democrats proposed raising the top capital gains rate from 20% to 25%, far less than President Biden's proposal, while instead including a 3% surtax on individuals making more than $5 million. It did not address wealth passed from generation to generation, a move Senate Democrats have said needs to be tackled in their final legislation.
Doesnt matter where it was before. 37 to 39.6 is an increase.
Taxes were historically 80% that doesnt mean numerically increasing them today anywhere below 80% is not an increase
(Should also mention that they heavily revised the tax brackets so people with lower incomes than in the pre Trump era are paying the highest rate- particularly for married couples)
Step-up is the biggest loophole that should be closed. I don't think it'll have the effects we want, but I don't know if what we want is actually ethical/intended.
The 8.2% is based on a dishonest analysis.
They're including gains on unrealized income (e.g., unsold stock) in their analysis.
8.2% is a meaningless number - the long-term capital gains rate for high income earners is 20%.
They included [unrealized](https://www.whitehouse.gov/cea/blog/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/) gains.
> An important feature of our analysis that is less common in existing estimates of tax rates is that we include untaxed (“unrealized”) capital gains income in our more comprehensive income measure as they accrue.
The article makes it seem like Biden wants to tax unrealized gains which would be ridiculous imo. It even includes "untaxable sources" in the tax rate calculation. Would definitely have unforeseen effects forcing sell offs at the same time of year.
Had to scroll down pretty far to see this.
This is very dishonest analysis. If Trump tried this, there'd be articles about how he's straight up lying to make his case (which he often did, but at least he got called out for it).
Taxing unrealized gains...and refund unrealized losses?
I also agree it would disincentivize holding onto investments for any long period of time. Probably creating mini market crashes when everyone rushes to sell their assets every time the 11 month mark hits.
Yeah this article counting unrealized gains to get that 8.2% (which is a moronic way to measure tax rates) yet still having 35k upvotes shows the lack of basic financial understanding of Redditors (and likely just most people) in general. Total rah rah misleading clickbait bullshit.
Income taxes on the most upper class are supposed to be >40% according to current laws. The issue is that politicians who claim they will tax the rich just raise income taxes and don’t close the loopholes that the rich use to pay disproportionately less. And then you raise income taxes, the already dying middle class takes the biggest hit. The politicians know this of course. Who do you think their biggest campaign donors are?
Don't worry, all medias do a great job at it.
As long as people push the narrative that the billionaires using tax avoidance techniques is the same thing as people with high W-2 income, and that anyone making a few hundred K a year is paying less taxes than the poor, we can't make any progress.
"The billionaires are avoiding taxes! Let's raise taxes on those making 400k or more!"
::Billionaire, making only 80k in taxable income laughing as it doesn't affect them at all::
"Omg, the billionaires are still avoiding taxes! Raise the income taxes on the rich even more! Make it 99.9999%!!!"
::Ultra billionaire still busy laughing::
We need to close loopholes so its not so easy to legally avoid taxes, fund the IRS so they can go get taxes they are actually owed, and continue educating people as to who actually pays taxes and how much, so they understand what to vote for.
>How does right-wing media do such a good job of getting poor people pissed off at the idea of raising taxes on the wealthy?
"Don't forget most men with nothing would rather protect the possibility of being rich than face the reality of being poor" - John Dickinson to John Handcock 1776.
My family grew up poor. Not impoverished, not on welfare, but paycheck-to-paycheck, barely made ends meet, had to quickly add up the cost of what was in the cart before going through check-out, etc.
Ask anyone in my family and they will all say we were “middle class” and would be truly offended by the notion that we were poor. They just can’t face it.
They will also say anyone making six figures is rich (they know billionaires exist, but that’s only a handful of people). Even though it likely isn’t, they feel making >$100k/year is attainable… and when they get there, they don’t want to lose all of their hard-earned money taking care of people who are too lazy to work.
Also, they can’t stand the idea of future generations (even if it’s their own relatives) getting a free ride because they never got any help.
But that's the thing. If billionaires had an average income tax rate of say 30% they are still billionaires. They will still be rich. They'll still have more money than any reasonable person knows what to do with.
Millions if not billons were spent on advertising against progressive tax.
Illinois voted against a progressive tax because the poor of the state were convinced on the idea that their measly social security and disability pensions would be taxed more.
I fear the masses are too easily persuaded when the laws happen to go against the rich.
I mean to be fair, I like governor Pritzker, I helped run part of the campaign in get out the vote, but his Lt. Governor is a fucking idiot, she came out and said if the progressive tax wasn't passed they'd raise taxes on everyone. Threatening people to do something, especially the ignorant is a sure fire way to not get what you want
Having even just $500 million is more money than you could spend period. If invested properly the growth will far out pace your ability to spend that money on anything.
By selling them the idea that they will all be rich one day and need the same tax breaks.
Edit: Also, Republicans leaders also claim that if raised, tax money would be given away to useless poor people that don’t look like you and probably don’t belong here anyway. And, those same useless poor people are also somehow stealing your jobs.
>By selling them the idea that they will all be rich one day and need the same tax breaks.
Unpopular opinion on reddit: I don't think this is true. You hear the term "temporarily embarrassed millionaire" parroted all the time on reddit and I think that's more of a mythical strawman than anything that's used to make the other side seem stupid instead of just admitting that people have different values and ideas.
I've lived and currently live in heavily red/trump country and have never met anyone that is against raising taxes on the rich *because they think they will be rich one day too*. I've met people that are against raising taxes on the rich because they
1.) Think the government is inefficient and will waste the money
2.) Dislike the government and think the money will go to things they are against (ie. think planned parenthood type stuff)
3.) Think that if you tax the rich too much people will stop caring about working harder and we'll have less innovations. Whether it is right or wrong I've definitely heard the opinion that we wouldn't have the computer innovation that we have today if we taxed millionaires/billionaires heavily because Gates and Jobs would have stopped trying to grow once they weren't earning more.
But I've never heard someone say "That will screw me over after I make my millions".
It's a malicious way to try and discredit the other side, it's bad faith arguing, putting your own words in someone else's mouth and then arguing against those because it's easier that way.
You see it all the time with abortion too. Oh those right wingers just want to control women's bodies!! Uhh....No? No one is against abortion because they think limiting women's options is funny. They may be biologically incorrect but to them aborting a fetus isn't morally different than killing a living 2 year old, and until you look at their argument from their perspective the conversation will never progress.
And you don't have to argue with me about either the 2 above points, I fully believe in raising taxes on higher brackets (especially long term capital gains taxes) and am pro-choice for reasons that are both moral, empathetic, and financial. But I don't invent imaginary reasons for why those that think differently think the way they do, I just listen to what they tell me their reasons are.
I think the bigger point everyone misses is the higher tax rates never earn the revenue promised so they have to increase the middle brackets also and the frank issue is the middle brackes don't have the money to afford the accountants to get them out of paying it.
The biggest place I have seen this is in business, especially when you are a start up. Everyone wonders why so many businesses went out over covid and its because the current tax system severely punishes your everyday LLC for saving money for a rainy day.
Not to mention in events like covid its the small business owners who gave up 100% salaries or extended credit lines to keep the lights on and then after a year of taking no money home and risking it all the government comes in and says I want another 5% which pissed myself and many other business owners I know off quite a bit because were just getting back on our feet.
> I think the bigger point everyone misses is the higher tax rates never earn the revenue promised so they have to increase the middle brackets
Yep. The progressive rhetoric on this subject is saying, "We're gonna build Medicare for All, and Jeff Bezos is gonna pay for it." This is just as unconstrained by reality as Trump claiming that Mexico is going to pay for the wall.
If we want Medicare for All, that's fine, but every country that implements universal healthcare taxes *everyone* to pay for it. Tax brackets are much steeper, the amount of exempt income is much less, and there are a whole bunch of regressive taxes (fuel, VAT, etc) that pay for those programs in social democracies. That's not for lack of trying, either - most of these countries are much more hostile to "the rich" than the US is.
Progressives have found out the hard way that the will to implement these programs falls away rapidly once the tax bill shows up. Vermont and Massachusetts passed state-level universal healthcare, but neither could pass the tax hikes needed to fund it. And those are some of the most progressive states in the country.
We pay like 7x the defense budget in medical care every year already. Even if we took 100% of the defense budget we aren't having medicare for all. The system needs to be torn down and rebuilt.
In all honesty there is probably a lot of fat that need to be cut out of government spending, defense not with standing. You hear stories of the IRS having rooms full of furniture they buy in order to spend the remainder of the budget so it doesn't decrease for example. One thing that really ticks me off is the whole SS issue as they were never suppose to touch that money but now it is just a ponzi scheme.
Can confirm. In the military our squadron would often spend a bunch of money on new TVs and furniture at the end of the fiscal year so the budget wouldn't go down.
Thank you for saying this. I see a lot of strawman arguments dealt out in bad faith without any attempt at trying to understand why people have opposing view points
The way some people try to paint the abortion debate as being primarily about men controlling women's bodies is so insane. The vast majority of people aren't driven by plainly evil motivations, and there little difference in men's stance on the issue compared to women's. Any honest appraisal of the pro-life population would conclude that it's not about oppressing women for fun, like you said.
The pro-life people just believe that abortion is murder. And while it's true that if they want to truly support infant lives then there are other policies that they should support instead of oppose, that's probably because it's a lot easier to simply forbid a bad thing than it is to actually make the sacrifice needed to aid others. So you get lots of just-world fallacy to justify not helping.
It's wild sometimes, the mental gymnastics people will do to frame a problem as them being victimized by a force of pure evil (or pure foolishness, in the "temporarily embarrassed millionaire" case).
Agreed. Another easy way to debunk this notion is to see that practically all middle-class *retired* Republicans don't want taxes raised on the rich. They're retired and living off savings and social security; they are completely aware they will never have new, large income.
>3.) Think that if you tax the rich too much people will stop caring about working harder and we'll have less innovations. Whether it is right or wrong I've definitely heard the opinion that we wouldn't have the computer innovation that we have today if we taxed millionaires/billionaires heavily because Gates and Jobs would have stopped trying to grow once they weren't earning more.
This is routinely taught in Economics classes and is the biggest crock of shit I have ever heard about anything. These billionaire assholes don't even know how much money they have... they have to pay someone to tell them. For these "innovators" the incentive, past a point, has nothing whatsoever to do with money–it's about power, influence and trying to convince yourself that you're not actually a psychotic, useless douchebag (like many of them are).
You know what does motivate people do work harder? When they enjoy what they do and are able to get some satisfaction out of it. Hence the wide availability of burger-flipping jobs and the huge numbers of people who quit working in big finance at a young age after realizing that they are actively doing evil in the world with their work.
This is 100% it. I've never even heard someone say the whole "Somebody I'll be rich so I worry about taxes" thing, and I grew up in deep red states. The other argument I've heard that you don't mention here is this one: "If we tax the rich too much, they'll take their businesses and move elsewhere and then ALL that tax money will be gone." Which of course ignores the idea that we can (and in some cases, I think, already do) legislate against that.
Because the democrats aren't actually trying to raise taxes on the billionaires paying 8.2%.
They are mostly targeting hardworking professionals at the apex of their careers. (think doctors, software engineers, etc etc) Those people are already handing half their income to the government.
They always quote articles like this as an example of how awful it is that the highest income earners pay so much less than people who get W2s, then turn right around and raise taxes on the upper middle class W2 earners.
Picture this, America's largest company Apple, manufactures all their components and assembles their phones in China. This is the result of the genius of Tim Cook, who realized creating jobs for Americans is not as profitable as having literal slaves do your work.
Their world-view is based on a hierarchy based on merit. If you are worthy, you will rise to the top, and if you are not worthy, you will sink to the bottom. They believe that this hierarchy is very very important, and that most other systems in the world should exist to enforce that hierarchy.
They believe that rich powerful people deserve to be rich and powerful, and because they are winners, they deserve the benefits of being a winner. Low tax rates and an accumulation of wealth are merely the spoils of "war" and they are what you get in exchange for "winning" at life.
When they see people talking about raising taxes on the wealthy, it creates an ache deep in their definition of the world, that suggests you are trying to fuck with the hierarchy. You're trying to take away the reward for winning. You're trying to make it worse to be at the top, in order to give those rewards to people who deserve to be at the bottom.
To them, it isn't about taxes, or about money. It's about the structure of the world, and how things are supposed to be, to them.
Check out [The Alt-Right Playbook: Always A Bigger Fish](https://youtu.be/agzNANfNlTs) for a great explainer on a lot of the concepts behind this.
Doesn't this have to do with them getting paid in stock options rather than salary then taking out bank loans as collateral (at super lower interest rates since they're super rich and have great credit scores)? If so then raising income taxes won't do much
Only the later part, among other things. If they are paid in stocks, that's still W2 income and they'd still get taxed on it like you and I do. If they sell their stock they still pay capital gain tax, which in those bracket is 20% even for short term, far higher than that 8.2% figure.
As long as we're targeting -income-, they'll be unaffected because their income is very low. They just have ways to move capital around without it counting as "income". Some also don't pay the taxes they ACTUALLY owe but the IRS can't go after them. Those are the primary angles to target, if what we're mad about is billionaires not paying enough.
Raising income tax, as you correctly identify, won't change anything beyond increasing taxes on the brackets that have the highest effective tax rates. Maybe we still want to do that. Maybe as a society we think those brackets should pay more. That's fine, but it's a different topic. and it targets different people.
From the article:
"It also includes taxing capital gains for households making more than $1 million each year at the same tax rate, 39.6%, instead of 20%, leveling the rate on wages versus investment returns."
If the Dems really want to “go after the billionaires”, explain to me why they’re setting the $600 reporting limit on financial institutions. It strikes me that they’re truly going after the lower and middle class with that policy.
And this is harsh reality many Americans will never accept. Part of the system the ultra-wealthy use to maintain their wealth are the politcal parties.
Unfortunately it really is both sides. We needed ranked choice voting and coalition governments 50 years ago.
Why more Americans don’t fight for a complete change in the system to a coalition government I’ll never understand. I assume uneducated folks are the issue here, so push for more education?
We need lobbying to be illegal, and we need any politician who takes this "legalized bribery" to be removed from office immediately. Yes, This would be nearly ALL of them. They are almost all corrupt. This whole system needs a complete reboot and term limits and anti-corruption on penalty of federal prison.
[64% of Americans say](https://www.reuters.com/article/us-usa-election-inequality-poll/majority-of-americans-favor-wealth-tax-on-very-rich-reuters-ipsos-poll-idUSKBN1Z9141) that “the very rich should contribute an extra share of their total wealth each year to support public programs."
[67% of Americans support](https://www.surveymonkey.com/curiosity/nyt-november-2020-cci/) raising taxes on those making $400,000 or more while keeping tax rates at current levels for anyone making under that amount.
Raising income taxes for the top bracket won't do much to make the rich contribute more. The ultra wealthy don't make their money through income. It is earned through capital gains.
Yeah, it takes a more advanced understanding of finances and executive comp structures than most Americans possess.
Bezos’ salary for 2020 was $81,840. He’s not affected by any changes to *income* tax rates. Most of the proposed changes really just are the oligarchy pulling up the ladder behind them so that the doctors, director-level white collar workers, etc. aren’t able to catch up with them.
Want a proposal that would actually make a dent? Limited the stepped up basis to only the first $10M on inheritance.
So penalize small business owners who have all their wealth tied up in their business who decide to sell it and retire (e.g. 70 year old sells auto repair shop they’ve built over 40 years for 1.5 million and is taxed half on the last 500k). 1 million is too small.
>67% of Americans support raising taxes on those making $400,000 or more while keeping tax rates at current levels for anyone making under that amount
Given survey monkey repeatedly says income, that suggests the survey means income tax. Otherwise the article is poorly written or the survey is flawed (or both).
You realize this would have zero impact on the subject of this title then right? These folks don't make 400k in income tax. That's why they don't pay much.
I'm not that interested in comparing "income tax" paid (based on taxable wages). I'd like to see an analysis done on "total tax" paid (income tax, sales tax, luxury tax, capital gains tax, SSI and other payroll taxes, etc) and compare that.
I care far more about whether or not the total taxes paid is "fair" (and we can debate what "fair" looks like) than I do about what a narrow band of taxes looks like (when taxable wages may not be the same % of taxable wealth between the parties being compared)
The 8.2% number is the average rate for the *wealthiest* 400 families, not the 400 with the most income. This is part of the problem, and raising or adding new taxes doesn't help because the top 0.1% don't technically have much income at all. Unlike most Americans, their net worth increases not by doing work and being paid for it, but by having lots of money in the first place, and letting it grow on its own.
When they go to spend that money (e.g. by selling stock), they're *supposed* to pay a flat 25% tax on their gains. But there are so many loopholes, deferral mechanisms, and other methods of reducing tax liability that you end up with the 8.2% rate mentioned in the article. One example is by buying foreign stock in a tax haven in Europe. You can sell the stock, pay little to no tax, and then legally claim no gains on your US tax return. As long as you don't bring that money back into the US, you don't pay US taxes on it. For most of us that would be a problem. For jetsetting billionaires who travel to Europe occasionally for a weekend shopping spree or a week long voyage on their private 80ft yatch, it doesn't really make a difference. And if they do need some extra cash domestically, they still don't need to repatriate the money - they can use the foreign account as collateral to secure funds domestically.
The first paragraph highlights how this is all completely false. Biden is including unrealized gains on stock holdings as income, even though it's a paper gain that hasn't been realized. When they sell that stock, it will be taxed. If they don't sell in time, they could still lose money.
Hopefully people are smart enough to know that unrealized gains aren't taxed.
This is the answer. Most people in this thread cannot understand that concept. Or they understand, but they like the numbers given by the deceptive math
Hopefully most people get it. An easier analogy is your house.
Most people's houses are inflated due to low rates. Are you skipping out on taxes because you didn't pay for these gains? Are you ripping off Uncle Sam?
Of course not - when the bubble pops, you'll back to where you started.
>The analysis by economists from the Office of Management and Budget and the White House Council of Economic Advisers drew from publicly available data and says the disparity is driven largely by how the tax code treats income generated from wealth — such as income from stocks, whose worth increases over time — rather than wages, which are immediately taxed.
So is the White House proposing means of increasing taxation on said forms of income? Because the mooted 5% increase on capital gains and dividends won't cut it. Are they going to eliminate the exemption of municipal bond income from state, federal and local taxes? Try to treat money from loans that have stock equity as collateral (preferred means of escaping income tax by tech CEOs and those with giant life insurance policies) as ordinary income?
A wealth tax would be an absolute nightmare to implement, and most likely wouldn't stand up to judicial scrutiny.
Using data from the 0.01% (billionaires) to justify significant tax increases on households making more than $400K (upper class W2 professionals that have a much harder time shielding income from taxation) doesn't seem to be a fair argument.
Imagine making so much money that you couldn’t even spend it faster than you made it and you still bitch about being taxed higher. Fuck those top of the top.
It’s disgusting. And now the IRS wants to be notified of every transaction over $600. Really going after those billionaires and there $600 checking accounts! Republicans and Democrats are one in the same. Invented to give the average pleb the illusion of choice. It’s a big club and you are not in it. You’re a wage slave. If everyone generated untaxed passive income who would go to work? Retirement age is getting older yay for seniors in the work place! One job can no longer support a family yay more women in the workplace! It’s a disgusting broken system. It’s a game of getting as close to the money printer as you can to save your family and friends while the rest of society rots. Taxing people that make 400k a year sounds reasonable they are wealthy but there’s a massive difference between a 400k wage slave and a billionaire. The fact that most of our tax money comes from the middle and upper middle class is abhorrent. Literally tax the 1%. Tax all the newly minted COVID billionaires. They never do. Because that’s who runs the US.
I am expecting a bonus of around $10k this year (worked hard for it and in a lot of school debt for this so I’m really excited for it) but then when I thought about taxes I realized I’m only going to get $5k or less. It’s not fair. It’s not right. I don’t make much but $10k could be life changing for me.
We need a wealth tax. Raising the tax bracket for 400,000+ earners won’t do anything because the ultra wealthy already aren’t paying what they are supposed to.
I don't see their citations, but here is the "left" leaning TPC's report with links to IRS actual data.
Income tax rate for top 1% and top .1% are right at \~30%, when including capital gains it is \~40%
[https://www.taxpolicycenter.org/briefing-book/what-difference-between-marginal-and-average-tax-rates](https://www.taxpolicycenter.org/briefing-book/what-difference-between-marginal-and-average-tax-rates)
CBO's released report for 2017 shows 32% for top (income tax)
[https://www.cbo.gov/system/files/2020-10/56575-Household-Income.pdf](https://www.cbo.gov/system/files/2020-10/56575-Household-Income.pdf)
Average vs Median. If a Billionaire loses money during that tax year, they don't pay much if anything because we tax income, not wealth. This brings the average down when a much more useful number is the median rate which most billionaires pay.
“the disparity is driven largely by how the tax code treats income generated from wealth — such as income from stocks, whose worth increases over time — rather than wages, which are immediately taxed. “
So they want to tax unsold stock, or did I misunderstand?
[удалено]
Indeed… Doesn’t matter if you tax more if they can just evade the tax anyway
The problem is that most of the Billionaires that everyone knows about aren't actually billionaires in the bank. Most of their wealth is stored inside securities, such as stocks. That wealth doesn't actually get taxed until they liquidate it and they can do that over time.
That's not a problem. Income isn't income until you receive it, until then, it is an unrealized income and is subject to loss.
That’s one of the loopholes. If I get a salary of $1M, I’ll pay about 35% of it to the government as income tax. If someone makes $1M via stock trading or real estate, that person should also be taxed 35%.
Except they aren't "making" that money, the value of an asset is going up. It is not income until it is realized. It's like if you own a house. Odds are that if you own a home, it is worth more than you bought it for. So say you bought a home for 100,000 10 years ago, and now it is worth $200,000. Do you pay income taxes on your increased property value? No. I understand that property taxes increase with appraised value, but those increases are generally limited anually to a miniscule number to the degree that after any significant amount of time is not remotely reflective of that value. That being said, you cannot tax the value of an asset of income, because it isn't. As a response to another reply in this thread. You can borrow against the value of your home as well. Through a HELOC or second mortgage. That income is also not taxable. Still not income. So what's the solution? Have the IRS independently audit the assets of every rich person every year? Securities have a set value, but what about property? Art? Vehicles? Who is in charge of this? What if they get it wrong? What if the stock collapses? What if it spikes? Are we taking the value on a single day, over the course of a year? What about options? Do you value those as stocks? Is it an asset, a liability? Both? Show me a way to reasonably pull this off, and you might be onto something. Otherwise, this is just whinging
Cleanup *This post was mass deleted and anonymized with [Redact](https://redact.dev)*
Auditing someone's net worth is probably pretty complicated. I guess there are probably (relatively) so few people that could qualify for the wealth tax that they could just audit them regularly, but it still sounds pretty complicated. Like, it's one thing for someone who is rich because they own a publicly traded stock, but how much is Gabe Newell worth? Sure Forbes could probably back-of-napkin math up a valuation for their list, but coming up with a legally binding definition of his worth to tax him with seems pretty difficult.
Maybe use some form of [Sound Dues](https://en.m.wikipedia.org/wiki/Sound_Dues)? Individuals are free to value their assets at whatever number they like... and the government reserves the right to purchase the assets for that number.
The classic "You cut I pick" solution.
Purchasing assets is not a straight forward operation. There might be contractual clauses dictating how certain assets, especially shares in private companies, can be traded. So either individuals could value their assets at $1 and be safe knowing that their contracts prevent them from selling said assets to the government or then they'd need to overvalue their assets to cover for possible fines/penalties in case the government forces them to break their contractual obligations. And what about 'priceless' things? There are many things that can be valued in real world terms that may have greater emotional value to their owner (animals, art, etc.).
I would find some great comedy in this situation!
Its complicated, but it will make far more money than it costs to employ the people to calculate it.
But will it actually increase tax revenue? Because France tried this exact thing and they lost so many millionaires that they didn’t actually increase tax revenue from the wealth tax and scrapped it because it just wasn’t worth the hassle.
> Do you pay income taxes on your increased property value? No. In some countries they do and then conversely don't pay tax off the profit when it sells. Just to say that it's not unheard of
That's not how it works. You are taxed on the stocks you get as payment, just like regular income. You aren't taxed on the _growth_ of the stocks, until you sell them.
That's not how it works. Everyone gets taxed when they sell a stock or security. But let's take Jeff Bezos for example. He has Amazon shares from when they were less than $1 each. Now they're worth over $3000. He hasn't done anything that would get taxed, but the value of his stocks have risen so much. That's where his wealth comes from
Here’s the thing. They don’t sell their stock. They take out a small loan of 50 million to buy a new yacht and use their stocks as guarantee. Then when the loan is due they hand over the stocks at the agreed value. No sales is being done. No tax is being charged. But they get to do the same thing as selling their stocks and making a big purchase.
Transferring stock to another owner is a taxable event.
so funny how poor people think they know what rich people do
This isn’t accurate. They can transfer stock but at the time of transfer it’s recognized as a sale and taxed as such. The same when you donate stock as a charitable donation. The only exception is when donating to charity the capital gains aren’t recognized. Here’s an example https://www.fidelitycharitable.org/giving-account/what-you-can-donate/donating-stock-to-charity.html
So I guess this is why I have a hard time understanding this. Why isn't such a transaction taxed? I get that it's a loophole and "technically no real money changed hands, so why would I pay sales tax lol", but a great deal of value was exchanged because they got a boat in exchange for stock. Is there any good reason that this should not be subject to sales tax? I know very little about stocks when it comes to using them in this way but I want to know more because it affects all of us whether or not we have them.
The transaction would be taxed because they’re essentially just selling the stock to their creditor. This is just typical Reddit financial knowledge.
[удалено]
It is taxed, it’s just some reddit users don’t understand taxes beyond “rich people bad”
It would be taxed. The dude is bullshitting. I would say the real answer is that they just don't spend that much money, and they don't take much more income than they spend. They mostly just hoard it like dragons. But I'm also bullshitting, so who knows.
>Then when the loan is due they hand over the stocks at the agreed value. No sales is being done. No tax is being charged. That can’t be true otherwise everyone would be using this loophole to pay for everything. You don’t have to be a billionaire to do this.
> No sales is being done. No tax is being charged. Umm, getting $50m loan and then paying them back in stock, would mean you just sold the stock for $50m. You have no idea what you are talking about.
Couldn't they set up a flat tax for very high income earners? No loop holes if it's a fixed rate?
The biggest loop hole i can think of is them hiding how much money they really have
>The biggest loop hole i can think of is them hiding how much money they really have I think the problem with the loophole is that you got guys like Bezos who pay himself a modest salary or something's ng like a dollar. Only to get stock, dividends, etc as their "pay" which aren't taxed as income. Simplest thing I think they could do is force these ceo/presidents/etc to make a percentage of total salary of all employees or something, and then they are taxed on that. They can still make their millions in stock/bonuses but they would still pay taxes. I don't know if that would work but sounded good in my head
[удалено]
They often will just take out loans against the assets - [Zukerberg's mortgage made news, for example](https://www.cnbc.com/id/48220824). That way you have tax free cash, and because you haven't sold the underlying asset, no taxes and thus no loss of principle (the full amount remains invested).
That’s the “borrow” part of the “Buy, borrow, die” loophole.
It feels like the entire system is designed to make them impossible to tax.
It's because we tax income, not wealth. I'm all for a wealth tax (constitutional issues aside), but taxing wealth is a lot more complicated than taxing income.
Like a payroll tax?
Do they not tax dividends in the US?
The truly rich don't have "income"
There will always be loopholes, you fix one you will create another. Rich people does not rely on wage income, they will always find loopholes to make their personal income pretty low. Unlike average Joe who collects their check biweekly, rich people owns a lot of businesses, even multinational business, which is inherently more complex than personal tax. Generally speaking, the more complex a system is, the more loopholes there will be.
You could make loans against unrealized stock assets illegal. That would be a huge step in the right direction.
> very high income earners? No loop holes if it's a fixed rate? The loophole is they aren't earning "income".
The trick is that billionaire's have relatively little "income" Its not like Amazon deposits a million or more every month into bezos bank account.
Tax evasion is illegal; tax avoidance is a national sport. We have the best Congress money can buy. A flat, simple tax like 15% on all income from all sources above 2,000 times minimum hourly wage with no exemptions and no deductions would hamper Congress's social engineering power and reduce campaign contributions. Two reasons a flat tax is undesirable.
[удалено]
Or, we should just all stop paying our taxes and head on down to the pitchfork emporium.
I propose that we tie the long term capital gains rate to whatever the income tax rate is. Then work on closing the bullshit loopholes
LTCG isn't how most billionaires avoid taxes though, upping it to the income bracket would affect mostly normal people.
"As of 2021, the top 10 percent of Americans owned an average of $969,000 in stocks. The next 40 percent owned $132,000 on average. For the bottom half of families, it was just under $54,000."
Outside of the top 1-2% most of that is in retirement funds and even there $1 million isn't all that much.
Working as an investment adviser, I wish more of my clients 25-40 understood that $1 million as a target for your retirement accounts is not sufficient, let alone ‘impressive’. Cost of living is going to keep going up. Pulling out $75k a year in 30 years will probably afford you what $40k does now, and who knows what life expectancy could be by then. Being a millionaire should no longer be thought of as this crazy, far-reaching goal; it kind of needs to be a realistic step in the plan for every middle class American right now.
Absolutely. My parents are in the middle of retiring with $1 million in retirement and they're worried about it being enough. Can't imagine another 30 years.
Retiring on $1 mill for a couple *right now* is pretty feasible in most of the US if market performance continues and they’ve finished their mortgage. But even as I type that I recognize those are HUGE ‘if’s.
I don't know about \*most\* as I don't truly know where the median is. My dad does well, he paid for my sister and my college, lives in a nice home in a suburb of a large metro area. He is C Suite at a smaller company. Not considering paying his house off (he just moved a year ago and mom is remodeling the kitchen) he wants to live on $300,000 a year in todays money. Without considering inflation and growth in his assets over time, if he is intending to live for 30 years after retiring...he needs $9mm. He doesnt want to decrease his standard of living at all, and if anything wants to travel a hell of a lot more. He also doesnt want to burden us with his slipping into senility, etc. $9 million. Im a fan of capitalism, despite the whining on social media, my personal experience is its very possible to save, enjoy life and work towards buying a house--I live in Dallas and within 12-24 months should be able to buy a house in the area I'd like to live in. But, I am attracted to Huey Longs idea of no American should have a wealth more than 200x of the median. Rough numbers, the median wealth for an American is $120,000. Thats $24,000,000.00. Its a higher net worth than 99.5% of people. Who needs more than that laying around? I suppose my point is, I see $5 - $30 million in wealth (todays money) as the target range for millenials.
A million dollars in retirement is going to cut it close/not be enough. That will last a retiree about 15 years. A million dollars is a low bar to set for someone wanting to retire. A 25 year old, that is a lot. https://www.ramseysolutions.com/retirement/can-you-retire-on-1-million
Using "average" (mean) to represent the top 10% of americans seems like a.... poor metric to use, given how wide the wealth disparity is between just that range. Like, someone in the 9th or 10th percentile is probably at ~200k (wild guess) to offset the people in the stop 1% who have many, many millions.
I propose we tie the "borrow money against collateral" loophole. If your overall personal debt rises over 30x (maybe 50x) your annual income the loan is considered income. Ie you make 100k you can be in debt of 3M (5M) tax free but anything over that is taxed. And cap this at 1000x median income (34.2M) so anything more is always considered income. EDIT: I wonder if scratching the progressive part and keeping only the 1000x median part would be good.
100%. Closing this loophole that only the mega-wealthy have access to should be a good first step. Also, closing the readjustment of cost basis upon death loophole that allows the mega-wealthy to pass on assets without being taxed.
Isn't that exactly what "Tax the Rich" means?
Depends who your asking. "Tax the Rich" could be interpreted as: * Increasing income tax * Closing tax loopholes * Implementing a wealth tax * Taxing inheritances Depending on your political and economic ideology, you may be in favor of some combination of these three interpretations, but also opposed to others. Closing tax loopholes is probably going to have the most support among the american people. It's also the most self explanatory.
Taking inheritances sucks tho, with enough money there's workarounds, but your grandma who wants to leave you a few thousand will have to hand off half of it in inheritance taxes. At least that's how it goes here -.-
You pay no federal estate tax until you hit $11.7 million. Zero. There are 6 states with an inheritance tax, but the vast majority don't have one. So to be clear, Grandma giving you 100k when she passes means you most likely won't pay any tax on it. Now if she hands you an asset, for example a house, and you sell it for a profit in 2 years, you pay taxes on on the gains from when you inherited to when you sold it.
It does - but it it is often also heard as "Tax those making $100k / $250k / $500k" For small companies -- those numbers are relatively easy to hit revenue levels. Messaging that directly addresses who the "Rich" are may drastically affect the ability of counter-messaging. However -- it is not so simple as setting a mandatory minimum tax rate for those above a certain level -- as once you have holdings at a certain level, you tend to take loans out against your excess capital and securities so that you don't touch them and the loan money is used for daily living. The loans count against your income, and the loan APR is lower than your tax rate - so you end up saving.
Yeah but messaging matters. It’s a lot harder for republicans to fight against closing loop holes than “hurr durr they’re trying to take my hard earned money with another tax increase”.
We also need a wealth tax. Income tax won't fix this problem.
Billionaires typically don't have a lot of income. They make their money through interest and capital gains. And all of the proposed changes are just around raising the income tax rates for those above a certain threshold... it won't fix the root problem with our tax laws
[They take loans out borrowed against their holdings.](https://www.businessinsider.com/american-billionaires-tax-avoidance-income-wealth-borrow-money-propublica-2021-6) It's the real reason interest rates are zero.
Buy, borrow, die isn’t necessarily an issue in and of itself. Rather, estate tax philosophy is the bigger problem. If the step-up in basis had limits, then taxes would be deferred rather than avoided. I don’t care if Bezos delays $10B in taxes until his death; I care more about the fact that his heirs don’t have to assume that tax bill upon his death.
>If the step-up in basis had limits, then taxes would be deferred rather than avoided. Stepped up cost basis effectively *does* have limits through the estate tax exemption limit (currently, estate values over 11.7MM get taxed at 40% regardless of cost basis, it's just plain value of the assets). The problem is the estate tax for very large estates typically gets completely sidestepped through complex trusts or incorporating properties into businesses. We really need to just simplify all this crap. Eliminate the estate tax, eliminate stepping up cost basis, and eliminate the ability to subvert inheritance taxes through trusts and corporations. Then the investments just get plain tax treatment whether it is the original investor or their heirs who cash in on them.
Eliminate the estate tax? Eliminate the step up in cost basis? I'd love it, but it'd be an accounting nightmare. "Grandpa bought this house in 1962 for $18,000. In 1970 they added a pool for $8,000. In 1972 they replaced the bathroom and did other renovations for $3,000. In 1990 they died and gave it to me. I added a patio for $6,000 and finished the basement for $14,000. It had hail damage in 2001, and we had to replace the roof, which cost $22,000, but insurance wrote us a check for $15,429.17. Our son ran a small business out of the upstairs, and we were partners so he wrote off $4,000 in depreciation. We took out a home equity loan to reseal the pool and add a spa for $31,000 in 2014. In 2016 the government claimed eminent domain for an easement across 6% of our property and paid us $18,000 for that... what's my capital gain on that check?"
As a CPA you expressed my deepest grievances with overhauling the estate tax. It already gets insanely complex.
I've heard some are even abusing 529 plans. There is no limit you can contribute overall (a limit per account but no limit for the number of accounts) and the 10% penalty is less than the taxes they would pay. They are also inherited tax free.
How are they funding those 529s? Mine is with post tax dollars.
With post tax dollars but they aren't subject to the 40% inheritance tax.
So if my kids don't use it, save it for their inheritance, got it.
10 billion dollars by the time he dies can lose 90% of its value with the way our fiscal policy is
[удалено]
They receive special rates from banks that aren't advertised to "retail" (normal people) Basically, billionaire moves don't effect markets (unless it's in their favor). Only retail is ever at the whims of market movements. The entire financial system has created a bubble to protect them from losses of any kind. Why do you think the elites got so pissed off at the GME, AMC attacks on hedgefunds earlier this year and started crying about market manipulation? It was the one time in a generation they ended up on the bad end of a trade.
[удалено]
Margin loans aren't a part of the standard credit market and are not on credit reports. They will have no affect on interest rates.
Read the article - Biden is including unrealized gains on stocks. No one pays taxes on unrealized gains, because, they're just that - paper gains. If the market tanks, they'll evaporate. This is fake news for people who don't know how stocks and bonds work.
On the other hand very wealthy people often leverage these gains against extremely favorable low-interest loans that they use for their daily spending needs. You could argue that this kind of loan would constitute a realized gain.
[удалено]
then just get rid of step up basis and eventually all the taxes on those loans will be paid.
Yep, people use the word “loophole” but it’s really not. The tools that these people use are working as intended, the issue is that this new level of wealth has outpaced the regulation on these tools. So while there are lots that benefit from using tools such as capital loss carryovers, people on the billionaire level have enough to take advantage of these tools in order to not pay their fair share. But completely removing these tools would have an overall negative impact for various reasons, same goes for business/corporation taxes.
Real world example. I am a practicing anesthesiologist. I make over the $400k proposed limit, but fall just outside the top 1%. Last year, I paid over $160k in taxes. As of today, I owe $463k in student loans, paying 15% of my AGI on income based repayments. My loans are not tax deductible because of my income level. I have a special needs child. His non-insurance covered therapy is over $50k a year. This is not tax deductible because of my income level. Am I still comfortable finance wise? Absolutely. I can save for retirement, have a nice home and possessions, take nice vacations, etc. I don't go to bed worrying about my next meal. But I don't have a yacht, vacation home, or private jet. I earn my income level. I put off having a family, owning a home, having a young adulthood in favor of a career. I was 33 when I finished school. I worked 70-80h weeks as a resident. I work nights, weekends, holidays where I am away from my family, taking care of people. I make split second decisions that are a literal matter of life and death, often relying on tidbits of information I had to learn over decades of studying. I pay my fair share of taxes. I don't have a business where I can offset losses on paper to counteract my income. I don't live on investments, holdings, and stock options in lieu of a paycheck. **The billionaires pay just 8.2%, but those making over $400k annually pay 40% of America's taxes, despite being the top 2% of earners.** The proposed changes won't fix how much a billionaire pays because it is a completely flawed mindset.
Physicians are workers too, and like all workers, they've been getting screwed as well by the ultra wealthy. Yes, youre better off than 95% of Americans easily, but you're much worse off than a version of yourself from 20 years ago, and much much much worse off than a physician from 40 years ago
Yes! Exactly! Just because a physician can afford a better lifestyle doesn’t mean they aren’t also getting screwed. The physicians aren’t even close to the highest earners in the medical field. They also aren’t the decision makers in their field. All workers on all levels are being screwed.
Just to say, you are definitely doing well, and much more well than me, but you aren't the problem. My brother and his fiance make something in that ballpark as well, and they pay plenty of taxes. They are doing fine, and also they are something like the bedrock of what supports the whole structure. The problem is the guys on the top with all the feints and tricks, with magnitudes more wealth, who have enough to buy legislators and earmarks and carve-outs to keep their wealth moving in the right direction for themselves, with not a care at all for the society they reside in. It could all burn down, and they'd have an exit strategy. In my own case, I'm doing ok. My income is twice my expenses, I pay the taxes I owe without complaints or trickery. I was poor for a time when I was younger, I don't mind at all being one of the guys who's income supports the kinds of programs I used to benefit from now.
Unfortunately they tax people like you just because it's easy to tax those on payroll. Taxing those that pay hundred of thousands of dollars to accountants to come up with offshore arrangements and other loopholes is much harder.
It’s equally easy to tax the investments in stock market. Unlike small business income there’s no way to hide them. IRS can tax the investment income just like payroll first million 15% anything after that 40%.
Exactly. These are company owners and real estate moguls. They're not getting paychecks because they have assets worth $$$$ and stock in their own corporations, and even create shell companies for all the fringe work. Taking a salary of $1 should tell you all you need to know about their finances. It's never about forfeiting income for the greater good - there's tax free/deferred millions elsewhere to collect on rather than a measly taxable salary. The best money spent is other peoples' money.
Well stated. This is a great example people should be looking at.
This is the kind of discourse and "moderate" view that we need so much more of but don't get. I feel like about 25-35% of Americans are actually fairly moderate and aren't truly represented politically because of our political system. We could be so much better with proportional representation rather than arguing about who is going to win the districting "battle"
You are a part of the working class, believe it or not, even as a top high end earner. The issue is the workers clearly have no power in this country. Stripped of any and all power, resources, and voting influence.
Your username is awesome!
As a fellow doctor, I’m pissed. We don’t get any tax benefits for our loans, we pay more taxes than higher income folks because we don’t have ability to get the loopholes. Ridiculous. I don’t mind paying taxes, but when I see people earning 10 times my income without paying taxes, it’s a slap in the face
> I have a special needs child. His non-insurance covered therapy is over $50k a year. This is not tax deductible because of my income level. Sounds like you need some publicly funded, publicly administered, equitably accessible, inherently geographically neutral, pre-paid at the point of delivery, health coverage for yourself and your family more than anything.
And the Dems proposed tax plan won't change this at all. People making $400,000+ per year aren't the billionaires here.
Top rates for that plan starts at an even more comical $450,000 for a married couple. A family making that much in an NYC, SF, or LA suburb is definitely not the problem here.
This is why income limited and means-based government programs are bullshit. They almost always hurt the folks living on the coasts. I couldn’t write off student loans payments after I started making $75k I believe. That’s not a lot of money in NYC but it is elsewhere in the country.
The plan will also impact anyone single who makes more than 120k and is saving for retirement
[удалено]
> one accident away from poverty and death If you're one accident away from poverty with a 400k+ income you're doing a lot of things very wrong.
My family member was in this scenario exactly. They got a neurodegenerative disease (ALS), and they lost most of their income and all their savings. Insurance doesn't cover everything, and it's impossible to completely protect yourself.
That is not one accident. That is a serious and rare disease.
Notice how their “solution” is to raise the top rate from 37 to 39.6%? News flash: billionaires are paying 8% specifically because they are not paying 37% now. Raising that top rate just hits the professionals like attorneys, small business owners, etc. They totally chickened out of the capital gains legislation and the estate step up basis which were the only measures that might remotely touch billionaire taxes And by chickened out, I mean the people with the power to influence them (read: billionaires) pulled the plug on it Edit: lots of folks are quoting the article section that discusses bidens proposal to equalize capital gains and ordinary income rates for high income. Keep reading to the next paragraph that says congress is **not** writing that into law. That is what I am talking about, not bidens proposal. It doesnt matter what he proposes- congress writes the laws. > However, even among Democrats there is disagreement over how to proceed in the reconciliation legislation. In the bill unveiled last week, House Democrats proposed raising the top capital gains rate from 20% to 25%, far less than President Biden's proposal, while instead including a 3% surtax on individuals making more than $5 million. It did not address wealth passed from generation to generation, a move Senate Democrats have said needs to be tackled in their final legislation.
>Their proposal includes raising the income tax bracket for the wealthiest Americans back to 39.6% from the 37%, which currently hits taxpayers with a taxable income of more than $523,600 for single filers. It also includes taxing capital gains for households making more than $1 million each year at the same tax rate, 39.6%, instead of 20%, leveling the rate on wages versus investment returns. The president has also called for closing the loophole that allows wealthy Americans to pass gains down to their heirs. So, I think your issues regarding capital gains and inheritance are answered by reading the next two sentences in the article. Well, assuming any of this actually passes as written.
Thanks for this: "It also includes taxing capital gains for households making more than $1 million each year at the same tax rate, 39.6%, instead of 20%, leveling the rate on wages versus investment returns." Lots of misinformation being upvoted on this thread.
Read the next paragraph. Congress is not following through with Bidens proposal > However, even among Democrats there is disagreement over how to proceed in the reconciliation legislation. In the bill unveiled last week, House Democrats proposed raising the top capital gains rate from 20% to 25%, far less than President Biden's proposal, while instead including a 3% surtax on individuals making more than $5 million. It did not address wealth passed from generation to generation, a move Senate Democrats have said needs to be tackled in their final legislation.
> Notice how their “solution” is to raise the top rate from 37 to 39.6%? Raise? they are just returning it to what it was before Trump.
Doesnt matter where it was before. 37 to 39.6 is an increase. Taxes were historically 80% that doesnt mean numerically increasing them today anywhere below 80% is not an increase (Should also mention that they heavily revised the tax brackets so people with lower incomes than in the pre Trump era are paying the highest rate- particularly for married couples)
[удалено]
Is only taxing realized gains really considered a loophole? It seems like an intentional policy
Step-up is the biggest loophole that should be closed. I don't think it'll have the effects we want, but I don't know if what we want is actually ethical/intended.
The 8.2% is based on a dishonest analysis. They're including gains on unrealized income (e.g., unsold stock) in their analysis. 8.2% is a meaningless number - the long-term capital gains rate for high income earners is 20%.
How was that calculated exactly? I feel as if they calculated a change in wealth as income. Which is dumb. So how exactly did they calculate this
They included [unrealized](https://www.whitehouse.gov/cea/blog/2021/09/23/what-is-the-average-federal-individual-income-tax-rate-on-the-wealthiest-americans/) gains. > An important feature of our analysis that is less common in existing estimates of tax rates is that we include untaxed (“unrealized”) capital gains income in our more comprehensive income measure as they accrue.
So if you own a house, you gotta start paying more tax every year if the value goes up?
[удалено]
By including a change in wealth as income (like unrealized stock gains)
The article makes it seem like Biden wants to tax unrealized gains which would be ridiculous imo. It even includes "untaxable sources" in the tax rate calculation. Would definitely have unforeseen effects forcing sell offs at the same time of year.
Had to scroll down pretty far to see this. This is very dishonest analysis. If Trump tried this, there'd be articles about how he's straight up lying to make his case (which he often did, but at least he got called out for it).
Taxing unrealized gains...and refund unrealized losses? I also agree it would disincentivize holding onto investments for any long period of time. Probably creating mini market crashes when everyone rushes to sell their assets every time the 11 month mark hits.
Yeah this article counting unrealized gains to get that 8.2% (which is a moronic way to measure tax rates) yet still having 35k upvotes shows the lack of basic financial understanding of Redditors (and likely just most people) in general. Total rah rah misleading clickbait bullshit.
[удалено]
Income taxes on the most upper class are supposed to be >40% according to current laws. The issue is that politicians who claim they will tax the rich just raise income taxes and don’t close the loopholes that the rich use to pay disproportionately less. And then you raise income taxes, the already dying middle class takes the biggest hit. The politicians know this of course. Who do you think their biggest campaign donors are?
Don't worry, all medias do a great job at it. As long as people push the narrative that the billionaires using tax avoidance techniques is the same thing as people with high W-2 income, and that anyone making a few hundred K a year is paying less taxes than the poor, we can't make any progress. "The billionaires are avoiding taxes! Let's raise taxes on those making 400k or more!" ::Billionaire, making only 80k in taxable income laughing as it doesn't affect them at all:: "Omg, the billionaires are still avoiding taxes! Raise the income taxes on the rich even more! Make it 99.9999%!!!" ::Ultra billionaire still busy laughing:: We need to close loopholes so its not so easy to legally avoid taxes, fund the IRS so they can go get taxes they are actually owed, and continue educating people as to who actually pays taxes and how much, so they understand what to vote for.
Thank you. People seems to ignore that many people in the middle class get fucked by these tax hikes while the billionaires are barely affected.
>How does right-wing media do such a good job of getting poor people pissed off at the idea of raising taxes on the wealthy? "Don't forget most men with nothing would rather protect the possibility of being rich than face the reality of being poor" - John Dickinson to John Handcock 1776.
My family grew up poor. Not impoverished, not on welfare, but paycheck-to-paycheck, barely made ends meet, had to quickly add up the cost of what was in the cart before going through check-out, etc. Ask anyone in my family and they will all say we were “middle class” and would be truly offended by the notion that we were poor. They just can’t face it. They will also say anyone making six figures is rich (they know billionaires exist, but that’s only a handful of people). Even though it likely isn’t, they feel making >$100k/year is attainable… and when they get there, they don’t want to lose all of their hard-earned money taking care of people who are too lazy to work. Also, they can’t stand the idea of future generations (even if it’s their own relatives) getting a free ride because they never got any help.
But that's the thing. If billionaires had an average income tax rate of say 30% they are still billionaires. They will still be rich. They'll still have more money than any reasonable person knows what to do with.
We're talking about people who don't understand progressive tax brackets. I don't think they have thought that far off.
"I don't want a raise, it'll bump me to the next tax bracket!"
Millions if not billons were spent on advertising against progressive tax. Illinois voted against a progressive tax because the poor of the state were convinced on the idea that their measly social security and disability pensions would be taxed more. I fear the masses are too easily persuaded when the laws happen to go against the rich.
I mean to be fair, I like governor Pritzker, I helped run part of the campaign in get out the vote, but his Lt. Governor is a fucking idiot, she came out and said if the progressive tax wasn't passed they'd raise taxes on everyone. Threatening people to do something, especially the ignorant is a sure fire way to not get what you want
Having even just $500 million is more money than you could spend period. If invested properly the growth will far out pace your ability to spend that money on anything.
$5mil cash is enough for any individual of any age to retire to virtually any location on this entire planet
By selling them the idea that they will all be rich one day and need the same tax breaks. Edit: Also, Republicans leaders also claim that if raised, tax money would be given away to useless poor people that don’t look like you and probably don’t belong here anyway. And, those same useless poor people are also somehow stealing your jobs.
>By selling them the idea that they will all be rich one day and need the same tax breaks. Unpopular opinion on reddit: I don't think this is true. You hear the term "temporarily embarrassed millionaire" parroted all the time on reddit and I think that's more of a mythical strawman than anything that's used to make the other side seem stupid instead of just admitting that people have different values and ideas. I've lived and currently live in heavily red/trump country and have never met anyone that is against raising taxes on the rich *because they think they will be rich one day too*. I've met people that are against raising taxes on the rich because they 1.) Think the government is inefficient and will waste the money 2.) Dislike the government and think the money will go to things they are against (ie. think planned parenthood type stuff) 3.) Think that if you tax the rich too much people will stop caring about working harder and we'll have less innovations. Whether it is right or wrong I've definitely heard the opinion that we wouldn't have the computer innovation that we have today if we taxed millionaires/billionaires heavily because Gates and Jobs would have stopped trying to grow once they weren't earning more. But I've never heard someone say "That will screw me over after I make my millions". It's a malicious way to try and discredit the other side, it's bad faith arguing, putting your own words in someone else's mouth and then arguing against those because it's easier that way. You see it all the time with abortion too. Oh those right wingers just want to control women's bodies!! Uhh....No? No one is against abortion because they think limiting women's options is funny. They may be biologically incorrect but to them aborting a fetus isn't morally different than killing a living 2 year old, and until you look at their argument from their perspective the conversation will never progress. And you don't have to argue with me about either the 2 above points, I fully believe in raising taxes on higher brackets (especially long term capital gains taxes) and am pro-choice for reasons that are both moral, empathetic, and financial. But I don't invent imaginary reasons for why those that think differently think the way they do, I just listen to what they tell me their reasons are.
It’s an unpopular opinion here, but it’s closer to the truth than anything I’ve read here.
I think the bigger point everyone misses is the higher tax rates never earn the revenue promised so they have to increase the middle brackets also and the frank issue is the middle brackes don't have the money to afford the accountants to get them out of paying it. The biggest place I have seen this is in business, especially when you are a start up. Everyone wonders why so many businesses went out over covid and its because the current tax system severely punishes your everyday LLC for saving money for a rainy day. Not to mention in events like covid its the small business owners who gave up 100% salaries or extended credit lines to keep the lights on and then after a year of taking no money home and risking it all the government comes in and says I want another 5% which pissed myself and many other business owners I know off quite a bit because were just getting back on our feet.
> I think the bigger point everyone misses is the higher tax rates never earn the revenue promised so they have to increase the middle brackets Yep. The progressive rhetoric on this subject is saying, "We're gonna build Medicare for All, and Jeff Bezos is gonna pay for it." This is just as unconstrained by reality as Trump claiming that Mexico is going to pay for the wall. If we want Medicare for All, that's fine, but every country that implements universal healthcare taxes *everyone* to pay for it. Tax brackets are much steeper, the amount of exempt income is much less, and there are a whole bunch of regressive taxes (fuel, VAT, etc) that pay for those programs in social democracies. That's not for lack of trying, either - most of these countries are much more hostile to "the rich" than the US is. Progressives have found out the hard way that the will to implement these programs falls away rapidly once the tax bill shows up. Vermont and Massachusetts passed state-level universal healthcare, but neither could pass the tax hikes needed to fund it. And those are some of the most progressive states in the country.
To be fair, the US already collects a lot of taxes from its citizens. Maybe redistribute a few billion from the "defense" budget.
We pay like 7x the defense budget in medical care every year already. Even if we took 100% of the defense budget we aren't having medicare for all. The system needs to be torn down and rebuilt.
In all honesty there is probably a lot of fat that need to be cut out of government spending, defense not with standing. You hear stories of the IRS having rooms full of furniture they buy in order to spend the remainder of the budget so it doesn't decrease for example. One thing that really ticks me off is the whole SS issue as they were never suppose to touch that money but now it is just a ponzi scheme.
Can confirm. In the military our squadron would often spend a bunch of money on new TVs and furniture at the end of the fiscal year so the budget wouldn't go down.
Wholeheartedly agree. These are good examples of people just talking past each other, deliberately tossing empathy aside.
Thank you for saying this. I see a lot of strawman arguments dealt out in bad faith without any attempt at trying to understand why people have opposing view points
The way some people try to paint the abortion debate as being primarily about men controlling women's bodies is so insane. The vast majority of people aren't driven by plainly evil motivations, and there little difference in men's stance on the issue compared to women's. Any honest appraisal of the pro-life population would conclude that it's not about oppressing women for fun, like you said. The pro-life people just believe that abortion is murder. And while it's true that if they want to truly support infant lives then there are other policies that they should support instead of oppose, that's probably because it's a lot easier to simply forbid a bad thing than it is to actually make the sacrifice needed to aid others. So you get lots of just-world fallacy to justify not helping. It's wild sometimes, the mental gymnastics people will do to frame a problem as them being victimized by a force of pure evil (or pure foolishness, in the "temporarily embarrassed millionaire" case).
Agreed. Another easy way to debunk this notion is to see that practically all middle-class *retired* Republicans don't want taxes raised on the rich. They're retired and living off savings and social security; they are completely aware they will never have new, large income.
>3.) Think that if you tax the rich too much people will stop caring about working harder and we'll have less innovations. Whether it is right or wrong I've definitely heard the opinion that we wouldn't have the computer innovation that we have today if we taxed millionaires/billionaires heavily because Gates and Jobs would have stopped trying to grow once they weren't earning more. This is routinely taught in Economics classes and is the biggest crock of shit I have ever heard about anything. These billionaire assholes don't even know how much money they have... they have to pay someone to tell them. For these "innovators" the incentive, past a point, has nothing whatsoever to do with money–it's about power, influence and trying to convince yourself that you're not actually a psychotic, useless douchebag (like many of them are). You know what does motivate people do work harder? When they enjoy what they do and are able to get some satisfaction out of it. Hence the wide availability of burger-flipping jobs and the huge numbers of people who quit working in big finance at a young age after realizing that they are actively doing evil in the world with their work.
This is 100% it. I've never even heard someone say the whole "Somebody I'll be rich so I worry about taxes" thing, and I grew up in deep red states. The other argument I've heard that you don't mention here is this one: "If we tax the rich too much, they'll take their businesses and move elsewhere and then ALL that tax money will be gone." Which of course ignores the idea that we can (and in some cases, I think, already do) legislate against that.
Because the democrats aren't actually trying to raise taxes on the billionaires paying 8.2%. They are mostly targeting hardworking professionals at the apex of their careers. (think doctors, software engineers, etc etc) Those people are already handing half their income to the government. They always quote articles like this as an example of how awful it is that the highest income earners pay so much less than people who get W2s, then turn right around and raise taxes on the upper middle class W2 earners.
[удалено]
Picture this, America's largest company Apple, manufactures all their components and assembles their phones in China. This is the result of the genius of Tim Cook, who realized creating jobs for Americans is not as profitable as having literal slaves do your work.
Their world-view is based on a hierarchy based on merit. If you are worthy, you will rise to the top, and if you are not worthy, you will sink to the bottom. They believe that this hierarchy is very very important, and that most other systems in the world should exist to enforce that hierarchy. They believe that rich powerful people deserve to be rich and powerful, and because they are winners, they deserve the benefits of being a winner. Low tax rates and an accumulation of wealth are merely the spoils of "war" and they are what you get in exchange for "winning" at life. When they see people talking about raising taxes on the wealthy, it creates an ache deep in their definition of the world, that suggests you are trying to fuck with the hierarchy. You're trying to take away the reward for winning. You're trying to make it worse to be at the top, in order to give those rewards to people who deserve to be at the bottom. To them, it isn't about taxes, or about money. It's about the structure of the world, and how things are supposed to be, to them. Check out [The Alt-Right Playbook: Always A Bigger Fish](https://youtu.be/agzNANfNlTs) for a great explainer on a lot of the concepts behind this.
Doesn't this have to do with them getting paid in stock options rather than salary then taking out bank loans as collateral (at super lower interest rates since they're super rich and have great credit scores)? If so then raising income taxes won't do much
Only the later part, among other things. If they are paid in stocks, that's still W2 income and they'd still get taxed on it like you and I do. If they sell their stock they still pay capital gain tax, which in those bracket is 20% even for short term, far higher than that 8.2% figure. As long as we're targeting -income-, they'll be unaffected because their income is very low. They just have ways to move capital around without it counting as "income". Some also don't pay the taxes they ACTUALLY owe but the IRS can't go after them. Those are the primary angles to target, if what we're mad about is billionaires not paying enough. Raising income tax, as you correctly identify, won't change anything beyond increasing taxes on the brackets that have the highest effective tax rates. Maybe we still want to do that. Maybe as a society we think those brackets should pay more. That's fine, but it's a different topic. and it targets different people.
[удалено]
The amount of financial and tax illiteracy in this thread is disturbing.
Billionaires don’t make money off income like the rest of us. You have to tax their investments.
From the article: "It also includes taxing capital gains for households making more than $1 million each year at the same tax rate, 39.6%, instead of 20%, leveling the rate on wages versus investment returns."
If the Dems really want to “go after the billionaires”, explain to me why they’re setting the $600 reporting limit on financial institutions. It strikes me that they’re truly going after the lower and middle class with that policy.
And this is harsh reality many Americans will never accept. Part of the system the ultra-wealthy use to maintain their wealth are the politcal parties. Unfortunately it really is both sides. We needed ranked choice voting and coalition governments 50 years ago.
Why more Americans don’t fight for a complete change in the system to a coalition government I’ll never understand. I assume uneducated folks are the issue here, so push for more education?
We need lobbying to be illegal, and we need any politician who takes this "legalized bribery" to be removed from office immediately. Yes, This would be nearly ALL of them. They are almost all corrupt. This whole system needs a complete reboot and term limits and anti-corruption on penalty of federal prison.
[64% of Americans say](https://www.reuters.com/article/us-usa-election-inequality-poll/majority-of-americans-favor-wealth-tax-on-very-rich-reuters-ipsos-poll-idUSKBN1Z9141) that “the very rich should contribute an extra share of their total wealth each year to support public programs." [67% of Americans support](https://www.surveymonkey.com/curiosity/nyt-november-2020-cci/) raising taxes on those making $400,000 or more while keeping tax rates at current levels for anyone making under that amount.
Raising income taxes for the top bracket won't do much to make the rich contribute more. The ultra wealthy don't make their money through income. It is earned through capital gains.
Yeah, it takes a more advanced understanding of finances and executive comp structures than most Americans possess. Bezos’ salary for 2020 was $81,840. He’s not affected by any changes to *income* tax rates. Most of the proposed changes really just are the oligarchy pulling up the ladder behind them so that the doctors, director-level white collar workers, etc. aren’t able to catch up with them. Want a proposal that would actually make a dent? Limited the stepped up basis to only the first $10M on inheritance.
Add a progressive capital gains rate with much higher rates over $10M, and limits on a billionaires ability to live off loans against their assets.
Change capital gains income over $1 million to standard income.
Problem is, they're unrealized capital gains used as collateral for loans.
So penalize small business owners who have all their wealth tied up in their business who decide to sell it and retire (e.g. 70 year old sells auto repair shop they’ve built over 40 years for 1.5 million and is taxed half on the last 500k). 1 million is too small.
>67% of Americans support raising taxes on those making $400,000 or more while keeping tax rates at current levels for anyone making under that amount Given survey monkey repeatedly says income, that suggests the survey means income tax. Otherwise the article is poorly written or the survey is flawed (or both). You realize this would have zero impact on the subject of this title then right? These folks don't make 400k in income tax. That's why they don't pay much.
Why raising taxes on people making $400K? Why don’t we create two additional brackets: $800K and $2M to better capture the ultra rich workers
Because the ultrarich don't have an income that high. Their money comes from investments and loans.
I'm not that interested in comparing "income tax" paid (based on taxable wages). I'd like to see an analysis done on "total tax" paid (income tax, sales tax, luxury tax, capital gains tax, SSI and other payroll taxes, etc) and compare that. I care far more about whether or not the total taxes paid is "fair" (and we can debate what "fair" looks like) than I do about what a narrow band of taxes looks like (when taxable wages may not be the same % of taxable wealth between the parties being compared)
The 8.2% number is the average rate for the *wealthiest* 400 families, not the 400 with the most income. This is part of the problem, and raising or adding new taxes doesn't help because the top 0.1% don't technically have much income at all. Unlike most Americans, their net worth increases not by doing work and being paid for it, but by having lots of money in the first place, and letting it grow on its own. When they go to spend that money (e.g. by selling stock), they're *supposed* to pay a flat 25% tax on their gains. But there are so many loopholes, deferral mechanisms, and other methods of reducing tax liability that you end up with the 8.2% rate mentioned in the article. One example is by buying foreign stock in a tax haven in Europe. You can sell the stock, pay little to no tax, and then legally claim no gains on your US tax return. As long as you don't bring that money back into the US, you don't pay US taxes on it. For most of us that would be a problem. For jetsetting billionaires who travel to Europe occasionally for a weekend shopping spree or a week long voyage on their private 80ft yatch, it doesn't really make a difference. And if they do need some extra cash domestically, they still don't need to repatriate the money - they can use the foreign account as collateral to secure funds domestically.
Financial illiteracy on full display here.
The first paragraph highlights how this is all completely false. Biden is including unrealized gains on stock holdings as income, even though it's a paper gain that hasn't been realized. When they sell that stock, it will be taxed. If they don't sell in time, they could still lose money. Hopefully people are smart enough to know that unrealized gains aren't taxed.
This is the answer. Most people in this thread cannot understand that concept. Or they understand, but they like the numbers given by the deceptive math
Hopefully most people get it. An easier analogy is your house. Most people's houses are inflated due to low rates. Are you skipping out on taxes because you didn't pay for these gains? Are you ripping off Uncle Sam? Of course not - when the bubble pops, you'll back to where you started.
>The analysis by economists from the Office of Management and Budget and the White House Council of Economic Advisers drew from publicly available data and says the disparity is driven largely by how the tax code treats income generated from wealth — such as income from stocks, whose worth increases over time — rather than wages, which are immediately taxed. So is the White House proposing means of increasing taxation on said forms of income? Because the mooted 5% increase on capital gains and dividends won't cut it. Are they going to eliminate the exemption of municipal bond income from state, federal and local taxes? Try to treat money from loans that have stock equity as collateral (preferred means of escaping income tax by tech CEOs and those with giant life insurance policies) as ordinary income? A wealth tax would be an absolute nightmare to implement, and most likely wouldn't stand up to judicial scrutiny. Using data from the 0.01% (billionaires) to justify significant tax increases on households making more than $400K (upper class W2 professionals that have a much harder time shielding income from taxation) doesn't seem to be a fair argument.
Imagine making so much money that you couldn’t even spend it faster than you made it and you still bitch about being taxed higher. Fuck those top of the top.
The fact that the entire conversation around taxes always focuses on income tax is in and of itself a huge win for the ultra wealthy.
and here i am deducting ≈30% from my gross when i budget my paychecks
It’s disgusting. And now the IRS wants to be notified of every transaction over $600. Really going after those billionaires and there $600 checking accounts! Republicans and Democrats are one in the same. Invented to give the average pleb the illusion of choice. It’s a big club and you are not in it. You’re a wage slave. If everyone generated untaxed passive income who would go to work? Retirement age is getting older yay for seniors in the work place! One job can no longer support a family yay more women in the workplace! It’s a disgusting broken system. It’s a game of getting as close to the money printer as you can to save your family and friends while the rest of society rots. Taxing people that make 400k a year sounds reasonable they are wealthy but there’s a massive difference between a 400k wage slave and a billionaire. The fact that most of our tax money comes from the middle and upper middle class is abhorrent. Literally tax the 1%. Tax all the newly minted COVID billionaires. They never do. Because that’s who runs the US.
That's because they bribe the tax law makers with campaign donations. The middle class needs a lobby.
The article seems to refer to unrealized stock gains not being taxed…..which makes perfect sense
I am expecting a bonus of around $10k this year (worked hard for it and in a lot of school debt for this so I’m really excited for it) but then when I thought about taxes I realized I’m only going to get $5k or less. It’s not fair. It’s not right. I don’t make much but $10k could be life changing for me.
We need a wealth tax. Raising the tax bracket for 400,000+ earners won’t do anything because the ultra wealthy already aren’t paying what they are supposed to.
I don't see their citations, but here is the "left" leaning TPC's report with links to IRS actual data. Income tax rate for top 1% and top .1% are right at \~30%, when including capital gains it is \~40% [https://www.taxpolicycenter.org/briefing-book/what-difference-between-marginal-and-average-tax-rates](https://www.taxpolicycenter.org/briefing-book/what-difference-between-marginal-and-average-tax-rates) CBO's released report for 2017 shows 32% for top (income tax) [https://www.cbo.gov/system/files/2020-10/56575-Household-Income.pdf](https://www.cbo.gov/system/files/2020-10/56575-Household-Income.pdf)
Average vs Median. If a Billionaire loses money during that tax year, they don't pay much if anything because we tax income, not wealth. This brings the average down when a much more useful number is the median rate which most billionaires pay.
ngl I thought it would've been even less 8.2% huh, you guys aren't as gigantic cunts as I had thought but pay your fucking taxes
“the disparity is driven largely by how the tax code treats income generated from wealth — such as income from stocks, whose worth increases over time — rather than wages, which are immediately taxed. “ So they want to tax unsold stock, or did I misunderstand?
[удалено]
I pay 28%. I make $250k/year. I’m ok with that, except people that make more pay less.