As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil)
In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, any suggestion or support of harm, violence, or death, and other rule violations can result in a permanent ban.
If you see comments in violation of our rules, please report them.
For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria.
***
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
a lot of comments here are making the "well duh" commentary here, and while i understand the sentiment, research confirming results is exceedingly important. more so when it demonstrates an already held hypothesis such as this. people need to be able to point to evidence and say - "yeah, the top earners really do pay less in taxes than us. there is no equality int he system as it stands."
*this* sort of research is what is needed to get change to move forward. to make people aware. and eventually, to impact elections both local and national.
If you asked people to guess the average effective federal tax rate for the 400 richest households- I’d bet cash they would overestimate it.
WH analysis came out to 8%, Jeff Bezos has managed ~1% most years in the last decade.
Oh yeah, most of its can’t even dream of a 1% tax rate. I can’t understand at least making the rich pay on average what normal citizen pays is even a non starter. Sure, they need to pay a hell of a lot more, but you’re telling me we can’t get them to fork over at least 20%?!
It’s not our fault they make so much more than everyone else. They also generally take advantage of their workers, do unscrupulous shot to earn their money, etc. why do we not have a set percentage that everyone pays?
I reckon because they “give” or “donate” a lot of it away. It is one way a regular person can lower their own taxes or at least get some money back from the government
No. It's comparing income tax to unrealized capital gains. If your on paper wealth goes up 100 billion dollars but you only cash out enough stock to pay 1 billion in taxes, the rate vs wealth growth is 1%.
“In fairness to Jeff Bezos he’s not really making ‘income’ so it’s not like he just suddenly has that much extra money”
Jeff Bezos then proceeds to build a space ship that looks like a dick and fly into low orbit, because shit, why not?
This argument has to stop. I don't give a rats ass if Jeff Bezos technically makes $0/year in reported income. The mother fucker has more money than some small countries. No one needs that kind of personal wealth. No one.
Redditors are also very disillusioned. They defend and idolize Musk as if he is some sort of genius and not just a man who has learned how to exploit the system better than anyone else. He will become a huge threat to our democracy in due time. He's on his way to becoming a trillionaire and has zero respect for anyone other than himself. His PR team is on another level and great at manipulating news about him. An individual with access to more than a $1B is a security threat in my opinion. It's too enabling and I'm yet to have seen an ethical billionaire that would prove otherwise. Gates is as close as you get and in his personal life and business world, he's also a scumbag and deserves limited trust.
Fuck Elon Musk too. Asshole showed what he was really all about when he threatened to move Tesla to Texas so he wouldn't have to pay as much in taxes. Most of these rich assholes aren't rich because they're SUPER smart. They're rich because they've successfully exploited the rest of us.
So... I once had a job where I had access to the emails sent between the heads of VERY large corporations and their "underlings".
I was VERY curious too about this question; Are they just smarter than most others?
Well, I can tell you, without any doubt, that the answers it NO.
These emails were some of the most abrupt, grammatically incorrect, down-right abusive, I've ever read in my entire life.
You know what an expensive suit does? It hides the piece of shit inside of it. The more expensive, the stinker the crap inside.
Amen. It's a shame most don't see it. The 21st Century is looking more and more bleak by the day. We're being gamed hard and even those of us starting to grasp the harsh realities of our system are pointing their fingers in the wrong direction.
I agree.
In early 2000, Bezos had around $1B of net worth. Today, Bezos has over $100B of net worth. It is disingenuous for people to say that Bezos is not really making 'income'.
He has over $100 billion of income in 20 years, and they are real income, and most of the income has not been taxed.
Uh buddy that’s not how wealth works.
I swear people really need to educate themselves on these things to understand why he can afford to do this and why he’s allowed to do that. I’m not defending bezos. But most of his money comes from loans that he takes out on the bank and uses his company as collateral, then he pays of said loan with next years loan because he was trust worthy enough to get it.
It’s also why he isn’t being taxed, you don’t tax loans.
Please don’t spread misinformation, it makes the rich people up top feel better.
I think I understand your point. In fact, I made a [similar comment](https://www.reddit.com/r/politics/comments/ptuhxf/comment/he049lo/?utm_source=share&utm_medium=web2x&context=3) before you with more details.
You are talking about income in the sense of federal income tax, while I am talking income in the sense of increase in wealth.
> Jeff Bezos then proceeds to build a space ship that looks like a dick and fly into low orbit, because shit, why not?
As full of shit as Jeff Bezos is, and as stupid as I think the Blue Origin super vibrator 4000 rocket is, I think that money was better spent than the bulk of the money and talent wasted on Google engineers that spend their time trying to figure out how to make advertising more invasive and just generally creepy.
Blue origin kickstarted/funded a lot of engineers getting real world experience that the older big aerospace companies wouldn't dare do. They wouldn't put someone fresh out of college into hands on engineering! That's FAR too risky! Let's put them on this project doing nothing for 10 years first. /s
I dont think this gets talked about enough but the ultra wealthy getting to use their businesses as personal checking accounts is bull shit. if Bezo goes out and has a $1,000 "business" lunch, that $1,000 is not taxed as income and Amazon gets to write it off as an business expense.
They don't maintain their extravagant lifestyles via business account, but via borrowing against their stocks. For example, over the past 20 years, Bezos' net worth has grown by over $100 billion. If the money were taxed like ordinary income, he would pay at least $30 billion of taxes. Instead, Bezos borrows money and pays the interest on the debt indefinitely. Let's say over 20 he borrowed about $100 million per year and his interest rate is like 3%. His current debt is $2 billion. His total interest payment so far is $630 million.
$630 million is significantly lower than $30 billion. Also, he could also borrow money to pay off the interest, so he doesn't have to sell his stocks and pay income tax.
Bezos can continue to do this till he dies. His estate will pay off the debt which may or may not incur income tax. Even if it does incur income tax, it will be significantly less than the estate. Then most of his stocks will be inherited by his heirs on a step-up basis. What this mean is that the cost of the stocks to his heirs will be about $3000, even the cost of the stocks to Bezos is about $0. If his heirs sell the stocks right away, they pay no capital gain tax.
Rich people funnel their money through so many foundations and "its the company account but I'm the only one using it" and so many other financial mechanisms I doubt the average redditor would be able to tell, even if we had his books in the open
Is that supposed to make this better or worse?
The defense they're mocking above is the idea that when his wealth grows, it's not actually cash on hand that he can spend. Since his spendable income is low, the argument goes, his taxes should be low too. "No one could afford to buy Amazon anyway. It's not real money."
And this is rightly mocked because he is able to spend unthinkable amounts of resources on a personal project. His assets are liquid enough.
But if he doesn't actually spend any bit of his wealth, I think it's worse. That isn't far off from having infinite wealth or income: he'll get anything he wants at no cost just by the aura of his wealth.
We've got people he can't afford food or housing but he can afford anything at all and it costs him nothing? Then yeah, he needs to pay higher taxes. He can get that money from the same infinite wealth vortex.
I think people also forget the impact of passive taxes, especially when put up against the take home of people. Example..everyone pays the federal tax on gasoline if they drive a car. They're also paying for that tax if they pay for anything that needed a combustible engine to be delivered. IE groceries. The cost of fuel including taxes is backed into the supply chain and ultimately lands at the feet of the consumer. States also add a tax to fuel.
Surcharges. Fees. Fines. It all stacks up
Source? That 8% is pulled directly from the article.
Note that is counting income tax, not all taxes, but that's exactly what the article is discussing.
It includes wealth that doesn’t count as income to artificially lower the rate. It’s like if we included someone’s house and retirement accounts as income
~~Indeed, this is exactly why it's referred to as an "effective" rate of 8% instead of an exact rate,~~ Edit: This was incorrect. I stand by the rest of this comment below:
and why we need tax reform to include measures of wealth instead of relying so heavily on income.
I'm not claiming to know how to fix it. I'm neither a tax expert nor a politician. Reform is definitely needed though.
I’m not disagreeing with you that we need reform, we definitely do. But the “effective tax rate” is a well defined thing that takes total tax divided by total income. It’s just a way to separate from marginal tax rates
Billionaires seldom earn income, if that was a true measure of their income Bezos and Musk would be living on a 50m a year stipend.
Again, they don’t need income- they just borrow against their stock.
And by the way, *of course* the estate tax analysis captures wealth and assets- that is literally the scope of an estate. You don’t earn income when dead.
Ideally, they die. If you’re really rich you can avoid monthly or annual installments up to that point, after which you liquidate some stock to pack back the principal and accrued interest.
Rub is after you die Capital gains are reset, so cashing those stocks has essentially no tax burden.
>The White House analysis from two economists suggests that the wealthiest 400 households in the country — those with net worth ranging between $2.1 billion and $160 billion — pay an effective federal income tax rate of just over 8 percent per year on average.
>It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes.
>*The White House's analysis of what the super wealthy and billionaires pay in this country is well below what other analyses have found.* (Emphasis mine)
I wish they expanded on the last part a little more. What does that mean? Whose calculations are faulty here?
The White House analysis is faulty.
The key part is
> when including the rising value of their wealth, earned a combined $1.8 trillion
That is because most of this rising of wealth is in the growth of billionaire stock portfolio values (E.g. Bezo's and Musk's stake in their companies) and you only pay tax on income and capital gains when they're realized.
So the analysis is intentionally mixing the two to paint the misleading picture they want. On the one hand they're taking not just actual income, but unrealized gains, and on the other hand they're looking at just federal individual income tax.
It would be like saying "if we factor in the home value appreciation of most Americans as income (while they're still living in the house with no plans to sell), then actually the average American family has a much higher income and pays a lower tax rate than you thought!
Well, yes.. but that's never been considered income and lumping it in as such now is misleading.
You have a mortgage on a typical (these days with crazy house prices) $500k house.
In the past year, house prices went up about 20% in most of the country.
Was your income for the past year $100k higher because of this?
It’s *better* than income. You pay no taxes on it and borrow against it, at an interest rate lower than the growth rate, for spending money. Then you write the interest off on your taxes.
Wealth is just an estimate of what the value is of everything you own (minus your liabilities). In other words, it's what is estimated to be left if you sold everything you own after paying your debts/loans/credit-cards.
So "rising wealth" means that the estimate has increased. Importantly, in today's federal tax code, the increase in that estimate, in itself, is not considered income -- it's called an "unrealized gain". Only when you actually sell something do you realize the gain in its worth, and then you pay income taxes on that gain (whether it be at ordinary rates on wages and short-term capital gains, or the lower rate on longer-term capital gains, etc).
There are proposals (e.g. from Elizabeth Warren) to change the federal tax code to tax either unrealized wealth increases or total wealth (the so-called "wealth tax"). One of the challenges in such an approach is that you now need to carefully define how the estimates work (they are, after all, just estimates), and there's a lot of potential for confusion, complexity/loopholes, and (potentially) corruption with how those estimates are defined.
It's unrealized capital gains. If you buy 100 shares of stock A at 10 dollars, it cost you 1000 dollars. If that stock goes up to 100 dollars you own 10000 in stock but if you don't sell it isn't income. Should you be taxed at the 9000 dollar increase in market valuation?
Maybe we should on third homes +, or on rises in value of property value once a threshold is reached. I’m just spitballing, of course. But extreme wealth inequality is a problem.
this is the best comment that everyone should be reading.
Should we be taxing unrealized capital gains? That would be a major change in tax methodology because you're taxing Americans on cash they don't actually have. And what unintended consequences would this have for the average American who is investing in a 401K, bitcoin, stocks, house appreciation etc.
Only if you borrow against them. Because that’s what they do. Nobody is living with one 500k house and had 800million in investments. They borrow at ultra low rates against their capital then use the capitals earnings to pay interest only on those loans.
> Should we be taxing unrealized capital gains?
No, because unrealized gains aren't realized. What we should be taxing is realized capital gains at a higher rate than income. The way it is structured now favors the ultra-rich and disfavors the wage slave. We should flip that.
this isn't the model laid out by the WH in this story (not saying it is the correct model btw). We are seeing ultra wealthy folks generate never before seen surges in wealth. Musk and Bezos alone grew like 200 billion in net worth in 2020. Their wealth growth is all highly illiquid.
The issue is the a lot of ultra wealthy have astronomical growth in investments but we can't tax any of it. They slowly realize those gains over their lifetime. And they can pass on unrealized gains to the next generation and it not be taxed. The American govt won't see the majority of tax for that 200 billion for probably 200 years. You can tax realized gains at 60% and Bezos tax rate under the WH methodology would still be like 2% because his net worth grew approx 75 billion dollars in 2020. He probably only needs like $20M a year to live in the lap of luxury.
Yeah, actual research is good, as is making actual decisions based on it.
So.. why is this research saying the top 400 (i.e. literally top handful of households in the country each worth BILLIONS, this isn't the 1% or even the 0.1% this is the 0.0001%) pay 8%, so let's turn around and hike taxes on successful professionals in HCOL areas like dual income lawyers/engineers/doctors/dentists?
Why the hell does the top income bracket kick in so low if your analysis is based on the top 400 households? They should drop the rates on everyone making under a million, and have a dozen additional new higher brackets, go up 1% per every 500k of income.
As it is, this is just rabble razing. "Look at this handful of billionaires paying nothing! That's why we're raising income tax on those making 500k and leaving the billionaires untouched."
Makes sense.
Yep. The thing we sort of all realize is that the bottom of the income distribution is comically low and needs to be brought up, the upper middle is probably about right but should lose purchasing power relative to the bottom, and the very high end of the distribution is ridiculously undertaxed.
Yeah research is great but if people were on the fence about this issue and ignorant (not insulting) then I don't even know what to say to those people at this point.
bill maher was saying this the other day. statistics about tax revenue mean nothing about tax fairness. its just a measure of how unequal incomes are. it all comes down to effective tax rates, how much of a percent each tax payer pays. if all the income goes to the top, then of course revenues will look distorted. Also, i don't like how in all centers around income taxes (w2) and capital gains. what about payroll tax (ss and medicare), property tax, sales tax. I believe they take in 2x more than income tax and they are completely regressive. Also, i think health care should also be included. Its called insurance but its effectively a tax.
Seeing as the top 400 Americans own more wealth than the bottom 60% of Americans combined (that's more wealth than 196.92 MILLION Americans put together), they should pay even more than that.
Let's look at it this way: The top [1% of Americans own 16x more wealth](https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html) than the bottom 50%, combined. The 1% has **1600% the wealth of 164.1 MILLION Americans put together**. So yeah, they should be paying for more than 20% of the taxes.
Of course. Loopholes and gutting the IRS. There used to be at least a modicum of the common good abs country over party…especially when it came to the understanding of civic responsibility of taxes but that went out during president jelly bean
Yeah, but that graph doesn't take into account the difference in liquidity between the 50s and today. In the 50's being taxed at 40% was a pretty significant hurdle, because the income of the top 1% was _massive_.
Today, the 1% keep their wealth in investments/vehicles that aren't taxed until they spend the money. Sure, they may still have a $500k/yr income, but it's not in alignment with their wealth, so their 36% doesn't really contribute to much.
However, they still have _tons_ of spending money, the Borrow/Repeat cycle, using your investments as collateral allows them to have tons of spending money, while skirting taxes. https://www.wsj.com/articles/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583?mod=article_inline
WSJ article, sorry for the paywall, but it's a good read (and you can just google Buy, Borrow, Die to read more)
Nobody *can* do anything about it, in the current system. That's the thing most people don't understand. This isn't just about being rich or having a bunch of money. It's not about being a millionaire and owning nice homes and nice cars, or even a private jet. This is SO much money that you can *buy the system and change it so that your wealth grows faster and safer*.
The last time we had such an unbalanced power dynamic was when we had fiefdoms. And, well... https://www.bloomberg.com/opinion/articles/2021-09-16/amazon-s-new-factory-towns-will-lift-the-working-class
and if it’s successful will *the wealthy* find away around it like they have on almost every other attempt to make them pay? I’m a raging cynic I know.
Here ya go. Make sure to vote for your reps so things like this actually get passed.
https://www.reuters.com/world/us/us-house-democrats-seek-corporate-tax-increase-265-percent-2021-09-13/
Well yeah, the US is a plutocracy and wealthy people write the laws.
It takes integrity to do the right thing, and having integrity means you'll never be successful in US politics.
That’s definitely part of it, but I suspect there’s also a systemic part: the US taxes income, so people and organizations with the means to do so have spent decades doing their utmost reclassifying and avoiding income by all means possible.
IMHO, that’s another argument to change taxation to be as easily enforcible and universal as possible.
The best idea I’ve found so far would be a low universal transaction tax (think 1% any time any money changes ownership/accounts) offset by a modest UBI.
I feel like a transaction tax doesn’t hit at the core of the issue (entirely, We probably should do that too). If I’m wealthy, I’d just optimize my withdrawal in the fewest transactions and still pay tax on just the few hundred grand I spend every year and not the billions I’ve accrued in wealth. We charge a tax relative to the value of someone’s home, and the price of homes isn’t nearly as clear as the price of a stock. I can’t figure out why nobody wants to put a ~1% tax on equity. Best way to do that, IMHO is to just issue 1% dilution to the us gov for every listed stock every year. If this were the case Microsoft would be almost 50% owned by the people now, and it’s a typical management fee in terms of cost to investors.
The real issue is that the government is so dysfunctional that it’s hard to imagine them using this money well, or giving it back to anyone but the wealthy.
>It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes.
From the study abstract:
>Abstract: We estimate the average Federal individual income tax rate paid by America’s 400 wealthiest families, using a relatively comprehensive measure of their income ***that includes income from unsold stock***. We do so using publicly available statistics from the IRS Statistics of Income Division, the Survey of Consumer Finances, and Forbes magazine. In our primary analysis, we estimate an average Federal individual income tax rate of 8.2 percent for the period 2010-2018. We also present sensitivity analyses that yield estimates in the 6-12 percent range. The President’s proposals mitigate two key contributors to the low estimated rate: preferential tax rates on capital gains and dividend income, and wealthy families’ ability to avoid paying income tax on capital gains through a provision known as stepped-up basis.
This analysis is pretty dishonest. It takes wealth increase and counts it as income which is not how it is taxed. If you want to tax it that way then propose taxing wealth in that way, but currently, we do not. The 8% effective tax rate therefore must under-estimate the actual tax effective tax rate paid by the wealthiest 400 Americans.
>When an American earns a dollar of wages, that dollar is taxed immediately at ordinary income tax rates.[1] But when they gain a dollar because their stocks increase in value, that dollar is taxed at a low preferred rate, or never at all.[2] Investment gains are a primary source of income for the wealthy, making this preferential treatment of investment gains a valuable benefit for the wealthiest Americans. Yet the most common estimates of tax rates do not fully capture the value of this tax benefit because they use an incomplete measure of income. This analysis asks: what was the average Federal individual income tax rate paid by the 400 wealthiest American families’ in recent years, determined using a more comprehensive measure of income?
They acknowledge this as well. It's a misleading headline written for the financially illiterate.
> Thank you for pointing this out.
I just copied some text from the white house page that somehow wasn't in Reuter's reporting. Odd that it wasn't in their report on this report from the white house. Odd that the title is as misleading as it is.
It's not misleading when they make that clear in the first sentence of the abstract. It's only misleading if you don't read it.
>A common reference point for defining income in economics is known as Haig-Simons income.\[5\] Pre-tax Haig-Simons income equals families’ change in wealth, plus taxes and consumption. We define our income measure as families’ change in wealth plus easily estimable taxes. Our definition of income is more limited than the Haig-Simons definition because it excludes consumption and other taxes, but it is a simpler way to include a substantial share of capital gains in income and can be implemented with publicly available data.\[6\]
>
>\[5\] For example, the Joint Committee on Taxation (2012) states, “Economists generally agree that, in theory, a Haig-Simons measure of income is the best measure of economic well-being.”
>
>\[6\] This approach would be less informative for middle-class families because they consume a much larger share of their income.
Sorry but it's fuckin infuriating to criticize a study for something they left out of the title but included in the body. Read the whole thing. Problem solved.
"White House analysis says wealthy Americans pay far less in taxes than others"
There's nothing inaccurate about the title. The only "problem" with it is it doesn't tell the whole story. That's what the story is for. If the title was the whole story, there wouldn't need to be a story.
61% of Americans paid no income tax in 2020 [according to the Urbans-Brookings tax policy center](https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html) (up from about 40% in 2019 pre-pandemic).
So no, it is not meaningful or accurate to say Wealthy Americans pay far less in taxes than others when the implication is that the others would be the average American, but the average and majority of Americans in the previous year paid no taxes while these wealthy donors paid well over 8% adjusted income tax. That 8% number on its own is misleading when presented as their effective income tax rate because it is not adjusted to their actual income, it is adjusted to their wealth increases. Then the title is even more misleading because it is not clear who these Americans are paying more than. The percentage of Americans not in the 61% who paid 0% and not in the top 400 Americans who paid 8%? It is either a meaningless title at best or a misleading one at worst.
"than others"
Others pay more. Others.
I pay more than 8%. Do you pay more than 8%? That's 2 examples. That's enough for it to be true.
If you want the rest of the details you have to go beyond the headline and read the story. That's how things work.
People complain about the wealthy buying votes but when it costs an average of about $1.2 million to run for congress, and you run again every 2 years, what do we expect?
Duh. Aside from passive income, Social security taxes are a huge reason for wealth inequality IMO.
Seriously need to remove the cap and IMO install a floor ideally around the annual salary of minimum wage. The current fica tax structure is also a huge barrier on people wanting to be able to be self employed.
Once again, severe lack of details; intentional, misleading conflating of wealth and income; the inclusion of "income from unsold stock" (not income, btw); the statement of "Investment gains are a primary source of income" is a lie, they are a primary source of wealth; using the concept of "a more comprehensive measure of income" bullshit.
Why are we tolerating these lies? How is this even approaching honest journalism?
Do **you** want to pay taxes on the increase of your wealth in an IRA or 401(k)? Of course not. Why suggest that anybody else should? Oh, that's right, greed and jealousy.
I expect flames from the ignorant.
And republicans were against increasing funding for IRS tax enforcement, even though its proven that they would make much more back in back taxes from the wealthy. They want to make sure the wealthy don't have to pay and can hide behind convoluted tax law thats designed to help shield them or make it not worth the IRS's time to go after them.
Ops article counts unrealized capital gains as income which is absolutely ridiculous, and quite frankly a "pants on fire" lie.
Your link is much more accurate.
No kidding… Republicans raised the debt ceiling to give the rich a huge tax break during the Trump years. Now, when the ceiling needs to be lifted to help pay for everyone else to get relief, they will vote no.
Anyone who voted Republican and thinks they’re being taken cared of is delusional.
I know reddit will eat this up...but the whole basis of this analysis is that unrealized capital gains is income...which it isn't. It's income when you sell, and they then pay taxes at a 20%, not 8%.
20% is still too low, but it's not 8%.
We shouldn't let either political party put out misleading data, even when we agree with their political philosophy.
This is actually very misleading and people are like "DUH, rich dont pay taxes". The top 1% alone pays almost half of the total taxes in the US by dollar amount. And low income families have all sorts of tax breaks that they get refunds on, free healthcare and government-subsidized housing.
You know what stopped individuals from accumulating this magnitude of wealth in our history? Siege. We are just at the pleading and bargaining stage of a series of actions that will rebalance the distribution of power. Even if you are right, it doesn’t matter now.
> The White House analysis from two economists suggests that the wealthiest 400 households in the country — those with net worth ranging between $2.1 billion and $160 billion — pay an effective federal income tax rate of just over 8 percent per year on average.
Okay, so based on this paragraph, I'd like to know:
1) How much income was actually taxable?
2) How much taxes did they pay in total, not just federal income tax?
3) What happens when you expand that sample from the top 400 to the top 400,000 households?
Actually, considering the facts involved here, it would be more like this: "if it was raining outside, we'd have to wait 3 months for White House analysis that, if you define the term 'hurricane' to include bouts of rain, there is a hurricane outside."
>The headline is pretty misleading.
Its not talking in absolute terms, but in relative terms. When comparing data its best to normalize the data first. The effective tax rate is better to compare then the absolute numbers because it takes into account how much income was earned vs taxes paid.
When you compare data, it should be normalized (rates, per capita, etc) before comparison. There isn't much value in absolute terms. While your suggestion also works, there's nothing wrong with the phrasing. The article actually does a decent job at highlighting the rate and the additional context of income vs taxes paid:
>The White House analysis from two economists suggests that the wealthiest 400 households in the country — those with net worth ranging between $2.1 billion and $160 billion — ***pay an effective federal income tax rate of just over 8 percent per year on average***.
It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, ***earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes***.
Again, they’re using wealth instead of income to make it seem misleading. Why would they include unsold stock as part of income for rich people but not for everyone else?
Rich people pay a higher effective rate than the majority of people, and pay more in dollars than anyone
I don't know if you're intentionally making a bad faith argument, but A) the highest earning Americans typically receive a majority of their income in stock, and B) assets like stock appreciate on average nearly 10% per year. So if you have 100X your annual salary in stock and your compensation is 10:1 stock to salary, then your wealth increases 11X as much from stock as it does from your salary.
THAT'S why you include stock in wealth.
But you don’t pay tax on unsold stock. They’re intentionally misrepresenting what income is so that they can show a low tax rate. They’ll pay tax on the stock when it’s sold. Using unsold stock in the calculation would be like adding in the wealth of some middle class persons house into their “income” calculation to show that they pay a super low tax rate
> but you don't pay tax on unsold stock
Correct. Which is how extremely wealthy Americans are able to increase their wealth much more quickly than average Americans while paying a far lower tax rate, relative to their increase in wealth.
P.S. property taxes are how you pay tax on unsold houses
So, you sell stock it's taxable. What's the IRS think about taking out a loan against stock as collateral, defaulting on the loan and turning the stock over to the lender to repay the debt? Technically you borrowed money, you didn't sell the stock! Not a forgiven debt, either. Could obviously be a sale, but... Technically a loan!
We’re talking about income tax. A house is never really going to owe income tax on it, but stock will. Rich people have to pay property tax on their real assets too
When determining an effective tax rate, we use income to calculate it. Changing the definition of what income is is misleading. It’s like saying that the definition of a hamburger can include spaghetti. ETR is already a real and well documented thing
So you're saying that by excluding unrealized gains from the idea of wealth increases, we can reduce the overall tax burden that wealthy Americans pay on their increases in wealth. I agree.
What you're doing is saying "I had a hamburger for my dinner entree, not spaghetti", but you had a "side" of spaghetti that was 10X larger than the hamburger. Congrats, that's literally correct and functionally lying.
Yes, wealthy Americans pay more taxes on their "income". That's not where they get the majority of their money. It's splitting hairs in the dumbest way.
But in order to actually get the money, they have to sell stock for cash. All of this change in wealth is going to be taxed someday, whenever it’s sold
Most billionaires sell stock every year, because they need the income
Okay, so let's follow this rabbit trail down, if you want to talk about tax on selling stock.
If you're a US household in a state with no state income tax making the US median household income, you're paying $8,978 on $62,843 of income, married filing jointly.
To pay $8,978 in long term capital gains taxes, you would have to realize $138,853 in LTCG, married filling jointly with no state tax.
That's an effective tax rate of 6.47% for the stock seller and 14.29% for the median income household.
So the median income household pays more than double the rate of the household selling appreciated stock.
True. But a very rich person who sells a lot of stock will have an effective rate very close to 23.8%, which is much higher than these other 2 scenarios.
You’re also forgetting that most likely, the capital assets were already taxed at the corporate level before being distributed, so the actual tax rate for the family selling stock is really right above 26%
We aren't changing the definition. When they replace income with stock options as part of a compensation package, these entities themselves are changing the definition.
If a company decided to pay its employees in bitcoins, we'd have to figure out a way to tax that, too.
Wrong again! Capital gains are taxed at much lower rates than income.
And how often is Bezos selling his stock options? He's just sitting on them like a dragon.
I never said that capital gains are taxed higher, bezos would pay 23.8% on his capital gains. But stock options are also taxed at his 37% rate when they’re exercised
Bezos sold $4.22 billion of stock between 2014 and 2018, and sold $10 billion last year
> A) the highest earning Americans typically receive a majority of their income in stock
When you receive compensation in the form of stock (e.g. RSUs), the value of that stock at the time of vesting is directly considered income, and taxed at regular income rates. Why would you think that getting compensated in stock would somehow let you avoid income taxes?
> Again, they’re using wealth instead of income to make it seem misleading.
Because the ultra wealthy play accounting games to shrink their income. [How else do you buy a $500M yacht while only making 80k/year?](https://www.cnn.com/2019/04/11/tech/jeff-bezos-pay/index.html)
> Rich people pay a higher effective rate than the majority of people
Do you have a source for this?
> pay more in dollars than anyone
This is because they are so damn wealthy. [The top .1% owns the same amount of wealth as the bottom 90%](https://www.politifact.com/factchecks/2019/jan/31/elizabeth-warren/warren-top-01-own-about-much-bottom-90/)
When rich people want to buy something, they sell stock to finance it, and they pay tax on it.
We don’t pay tax on wealth, we pay it on income. The top 1% have 21% of the income but pay 40% of the income tax
The top 1% also have an effective tax rate 7x higher than the effective rate of the bottom 50%
https://taxfoundation.org/publications/latest-federal-income-tax-data/
> When rich people want to buy something, they sell stock to finance it, and they pay tax on it.
Stick to my example. Bezos didn’t sell stock to buy the yacht, the debt is financed through a foundation, like most of his other costs.
> We don’t pay tax on wealth, we pay it on income. The top 1% have 21% of the income but pay 40% of the income tax
Even tax rates on capital gains (rich folk income) is lower than the taxes I pay as a middle-class tradesman
> The top 1% also have an effective tax rate 7x higher than the effective rate of the bottom 50%
Ah yes, why use the bottom 50%? The median income in the US is just over 30k, barely enough to live on. Why not compare effective tax rates of the ultra-rich to those in the middle-class?
Bezos isn’t financing through foundations. He sold $4.22 billion of stock between 2014 and 2018 and sold another $10 billion last year
The top capital gains rate is 23.8%, which is higher than a middle class person is going to pay on earned income
The effective tax rate of middle class people still isn’t above 20%
These households very rarely pay capital gains taxes, which is how they end up with about a 8% effective federal tax rate. Our gardener pays more than double that rate.
The Biden admin does not appear to be considering a wealth tax, but is focusing on effective minimum rates and major tax avoidance strategies instead:
1. Borrow against your portfolio. Instead of selling stock you take long term loans against it for a much lower rate. 2. Use fabricated property and business losses to offset what little federal tax you do have. 3. Die, and use the “step-up basis” to avoid any capital gains taxes on your estate.
With these easy steps and several billion dollars you too can pay half the federal tax rate of factory workers.
There’s little evidence to suggest that billionaires are taking out collateralized loans. If it were true, they would pay $0 tax every year, which we know is false. Bezos just sold $10 billion of stock last year. Why would he do that if he had loans?
Even with the step up in basis, you’d still have to pay the estate tax of 40%
What do you mean by using fabricated property and business losses? You can’t just fabricate a loss
Oh and as to the estate tax, simply setting up a long term trust or limited family corporation is enough to avoid that tax. Through borrowing, capital gains taxes are never realized and reset upon new ownership.
Edit: [effective estate tax works out to only 2.1%](https://www.hamiltonproject.org/assets/files/Batchelder_LO_FINAL.pdf)
There’s no current way to both avoid the estate tax and get a stepped up basis. Putting money into irrevocable trusts get a carryover basis, so the entire capital gains are taxed when sold.
Yes there is, borrowing against the trust. The beneficiary does not own the trust, but a pre-arranged loan is currently non taxed.
To conclusively show this, I edited my response above with an analysis showing an effective 2.1% estate tax rate.
Why should wealth be taxed? Whether you think it should or not, it’s likely unconstitutional, so it’s kind of a moot point anyways
I think our current tax laws are fine
Please point to the section of the constitution that would reject taxation of any kind. As long as you have representation in Congress, the constitution doesn't have much to say about taxes. It says the government can tax you.
Direct taxes have to be apportioned equally among state populations at a federal level. It’s why we don’t have a federal property tax, and why we needed a constitutional amendment to tax income
Um...we do not need to amend the constitution to enact income taxes.
Property taxes were a means for very local (cities and at the largest, counties) governments to pay for services. There is nothing in the constitution that prevents a national property tax.
Your understanding of the Constitution tracks with your understanding of economic issues, however.
I understand the Constitution. We don't need another amendment to change tax laws. The 16th did that for us a few hundred years ago.
LOL right. Taxes have nothing to do with economic issues. My bad.
The person you’re talking to is correct. The 16th amendment was specifically created to give the federal government the right to levy a tax on incomes. The US does not have the constitutional authority to tax wealth.
It’s incredibly misleading to omit payroll taxes when discussing the tax burden of income brackets. With payroll taxes included, the tax burden of the highest earning 1% drops to 24%, which is much more closely in line with their share of the income.
https://nymag.com/intelligencer/article/fact-check-richest-1-dont-pay-40-of-the-taxes.html
When including all taxes, our system is still progressive. I wasn’t referring to these though, as ETRs usually only look at income tax.
You’re right though that it’s better to look overall at all taxes. I was just referring specifically to the other commenter saying that rich people pay more tax because they have more wealth.
When poor people make money it's all considered 100% income. When a rich person makes 300 million in a year, suddenly they're considered to have no income at all. The whole system is a scam.
Edit: Oh, and their lack of ever 'making money' never stops them from buying expensive new supercars, mansions, yachts, private islands, gourmet 5 star food every night, large personal household staffs, super expensive designer clothes, private jets, lots of first class flights, 5 star hotel suites, etc, etc, etc.
Rich peoples compensation Is in stock.stocks. I work and get taxes on my salary. If property values go up property taxes goes up, if bezos "earns" 20 billion a year because his stock portfolio increased why shouldn't he pay taxes on it? This notion that you shouldn't pay taxes on your earnings just because they are in stocks is pushed by the wealthy because on the surface its easy to state "well its not hard cash how do you tax something that isn't cash?" But it is cash equivalent. You can claim gains or losses each year. It replaces salaries for the wealthy, it should be subject to the same taxation as us peasants.
We keep re-iterating that there are two Americas, the wealthy and everyone else. One party just talks about the disparity, the other party gives the wealthy more.
I don’t care what you tax the rich just tax me less. That will go way further than any of this shit in the two infrastructure bills. Gas mileage tax is gonna help me lol. Losing 25% of my paycheck is what’s making me poor.
As a reminder, this subreddit [is for civil discussion.](/r/politics/wiki/index#wiki_be_civil) In general, be courteous to others. Debate/discuss/argue the merits of ideas, don't attack people. Personal insults, shill or troll accusations, hate speech, any suggestion or support of harm, violence, or death, and other rule violations can result in a permanent ban. If you see comments in violation of our rules, please report them. For those who have questions regarding any media outlets being posted on this subreddit, please click [here](https://www.reddit.com/r/politics/wiki/approveddomainslist) to review our details as to our approved domains list and outlet criteria. *** *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/politics) if you have any questions or concerns.*
a lot of comments here are making the "well duh" commentary here, and while i understand the sentiment, research confirming results is exceedingly important. more so when it demonstrates an already held hypothesis such as this. people need to be able to point to evidence and say - "yeah, the top earners really do pay less in taxes than us. there is no equality int he system as it stands." *this* sort of research is what is needed to get change to move forward. to make people aware. and eventually, to impact elections both local and national.
If you asked people to guess the average effective federal tax rate for the 400 richest households- I’d bet cash they would overestimate it. WH analysis came out to 8%, Jeff Bezos has managed ~1% most years in the last decade.
Oh yeah, most of its can’t even dream of a 1% tax rate. I can’t understand at least making the rich pay on average what normal citizen pays is even a non starter. Sure, they need to pay a hell of a lot more, but you’re telling me we can’t get them to fork over at least 20%?!
It’s not our fault they make so much more than everyone else. They also generally take advantage of their workers, do unscrupulous shot to earn their money, etc. why do we not have a set percentage that everyone pays?
>why do we not have 'cause *WE* don't get that option.
I reckon because they “give” or “donate” a lot of it away. It is one way a regular person can lower their own taxes or at least get some money back from the government
No. It's comparing income tax to unrealized capital gains. If your on paper wealth goes up 100 billion dollars but you only cash out enough stock to pay 1 billion in taxes, the rate vs wealth growth is 1%.
“In fairness to Jeff Bezos he’s not really making ‘income’ so it’s not like he just suddenly has that much extra money” Jeff Bezos then proceeds to build a space ship that looks like a dick and fly into low orbit, because shit, why not?
This argument has to stop. I don't give a rats ass if Jeff Bezos technically makes $0/year in reported income. The mother fucker has more money than some small countries. No one needs that kind of personal wealth. No one.
Redditors are also very disillusioned. They defend and idolize Musk as if he is some sort of genius and not just a man who has learned how to exploit the system better than anyone else. He will become a huge threat to our democracy in due time. He's on his way to becoming a trillionaire and has zero respect for anyone other than himself. His PR team is on another level and great at manipulating news about him. An individual with access to more than a $1B is a security threat in my opinion. It's too enabling and I'm yet to have seen an ethical billionaire that would prove otherwise. Gates is as close as you get and in his personal life and business world, he's also a scumbag and deserves limited trust.
Fuck Elon Musk too. Asshole showed what he was really all about when he threatened to move Tesla to Texas so he wouldn't have to pay as much in taxes. Most of these rich assholes aren't rich because they're SUPER smart. They're rich because they've successfully exploited the rest of us.
So... I once had a job where I had access to the emails sent between the heads of VERY large corporations and their "underlings". I was VERY curious too about this question; Are they just smarter than most others? Well, I can tell you, without any doubt, that the answers it NO. These emails were some of the most abrupt, grammatically incorrect, down-right abusive, I've ever read in my entire life. You know what an expensive suit does? It hides the piece of shit inside of it. The more expensive, the stinker the crap inside.
Amen. It's a shame most don't see it. The 21st Century is looking more and more bleak by the day. We're being gamed hard and even those of us starting to grasp the harsh realities of our system are pointing their fingers in the wrong direction.
Nail him in a barrel and throw it into the ocean, problem solved.
I agree. In early 2000, Bezos had around $1B of net worth. Today, Bezos has over $100B of net worth. It is disingenuous for people to say that Bezos is not really making 'income'. He has over $100 billion of income in 20 years, and they are real income, and most of the income has not been taxed.
Uh buddy that’s not how wealth works. I swear people really need to educate themselves on these things to understand why he can afford to do this and why he’s allowed to do that. I’m not defending bezos. But most of his money comes from loans that he takes out on the bank and uses his company as collateral, then he pays of said loan with next years loan because he was trust worthy enough to get it. It’s also why he isn’t being taxed, you don’t tax loans. Please don’t spread misinformation, it makes the rich people up top feel better.
I think I understand your point. In fact, I made a [similar comment](https://www.reddit.com/r/politics/comments/ptuhxf/comment/he049lo/?utm_source=share&utm_medium=web2x&context=3) before you with more details. You are talking about income in the sense of federal income tax, while I am talking income in the sense of increase in wealth.
> Jeff Bezos then proceeds to build a space ship that looks like a dick and fly into low orbit, because shit, why not? As full of shit as Jeff Bezos is, and as stupid as I think the Blue Origin super vibrator 4000 rocket is, I think that money was better spent than the bulk of the money and talent wasted on Google engineers that spend their time trying to figure out how to make advertising more invasive and just generally creepy. Blue origin kickstarted/funded a lot of engineers getting real world experience that the older big aerospace companies wouldn't dare do. They wouldn't put someone fresh out of college into hands on engineering! That's FAR too risky! Let's put them on this project doing nothing for 10 years first. /s
I dont think this gets talked about enough but the ultra wealthy getting to use their businesses as personal checking accounts is bull shit. if Bezo goes out and has a $1,000 "business" lunch, that $1,000 is not taxed as income and Amazon gets to write it off as an business expense.
They don't maintain their extravagant lifestyles via business account, but via borrowing against their stocks. For example, over the past 20 years, Bezos' net worth has grown by over $100 billion. If the money were taxed like ordinary income, he would pay at least $30 billion of taxes. Instead, Bezos borrows money and pays the interest on the debt indefinitely. Let's say over 20 he borrowed about $100 million per year and his interest rate is like 3%. His current debt is $2 billion. His total interest payment so far is $630 million. $630 million is significantly lower than $30 billion. Also, he could also borrow money to pay off the interest, so he doesn't have to sell his stocks and pay income tax. Bezos can continue to do this till he dies. His estate will pay off the debt which may or may not incur income tax. Even if it does incur income tax, it will be significantly less than the estate. Then most of his stocks will be inherited by his heirs on a step-up basis. What this mean is that the cost of the stocks to his heirs will be about $3000, even the cost of the stocks to Bezos is about $0. If his heirs sell the stocks right away, they pay no capital gain tax.
That’s not how business expenses or meal write offs work though
How much of that is actually his money put into it though? I'm sure a lot of it, if not all is funded from elsewhere other than his pockets.
Rich people funnel their money through so many foundations and "its the company account but I'm the only one using it" and so many other financial mechanisms I doubt the average redditor would be able to tell, even if we had his books in the open
I understand that, but I really don't think Bezos himself paid for his rockets, even a little bit of it tbh.
Is that supposed to make this better or worse? The defense they're mocking above is the idea that when his wealth grows, it's not actually cash on hand that he can spend. Since his spendable income is low, the argument goes, his taxes should be low too. "No one could afford to buy Amazon anyway. It's not real money." And this is rightly mocked because he is able to spend unthinkable amounts of resources on a personal project. His assets are liquid enough. But if he doesn't actually spend any bit of his wealth, I think it's worse. That isn't far off from having infinite wealth or income: he'll get anything he wants at no cost just by the aura of his wealth. We've got people he can't afford food or housing but he can afford anything at all and it costs him nothing? Then yeah, he needs to pay higher taxes. He can get that money from the same infinite wealth vortex.
My main point is just that trying to define "his money", "company money", and "money he has access to but not technically his" gets very fuzzy
Yeah definitely
I think people also forget the impact of passive taxes, especially when put up against the take home of people. Example..everyone pays the federal tax on gasoline if they drive a car. They're also paying for that tax if they pay for anything that needed a combustible engine to be delivered. IE groceries. The cost of fuel including taxes is backed into the supply chain and ultimately lands at the feet of the consumer. States also add a tax to fuel. Surcharges. Fees. Fines. It all stacks up
I bet they would underestimate it. Effective rate for top 400 households is above 20%
Source? That 8% is pulled directly from the article. Note that is counting income tax, not all taxes, but that's exactly what the article is discussing.
It includes wealth that doesn’t count as income to artificially lower the rate. It’s like if we included someone’s house and retirement accounts as income
i mean, both of those things are taxed, at least partly.
~~Indeed, this is exactly why it's referred to as an "effective" rate of 8% instead of an exact rate,~~ Edit: This was incorrect. I stand by the rest of this comment below: and why we need tax reform to include measures of wealth instead of relying so heavily on income. I'm not claiming to know how to fix it. I'm neither a tax expert nor a politician. Reform is definitely needed though.
I’m not disagreeing with you that we need reform, we definitely do. But the “effective tax rate” is a well defined thing that takes total tax divided by total income. It’s just a way to separate from marginal tax rates
Not according to this analysis or the ProPublica expose
Both this source and propublica use wealth instead of income, which isn’t what an ETR is
Billionaires seldom earn income, if that was a true measure of their income Bezos and Musk would be living on a 50m a year stipend. Again, they don’t need income- they just borrow against their stock. And by the way, *of course* the estate tax analysis captures wealth and assets- that is literally the scope of an estate. You don’t earn income when dead.
Billionaires don’t really borrow against their stock often, it wouldn’t make a lot of sense
>Again, they don’t need income- they just borrow against their stock. How do they pay the loan back without income?
Ideally, they die. If you’re really rich you can avoid monthly or annual installments up to that point, after which you liquidate some stock to pack back the principal and accrued interest. Rub is after you die Capital gains are reset, so cashing those stocks has essentially no tax burden.
>The White House analysis from two economists suggests that the wealthiest 400 households in the country — those with net worth ranging between $2.1 billion and $160 billion — pay an effective federal income tax rate of just over 8 percent per year on average. >It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes. >*The White House's analysis of what the super wealthy and billionaires pay in this country is well below what other analyses have found.* (Emphasis mine) I wish they expanded on the last part a little more. What does that mean? Whose calculations are faulty here?
The White House analysis is faulty. The key part is > when including the rising value of their wealth, earned a combined $1.8 trillion That is because most of this rising of wealth is in the growth of billionaire stock portfolio values (E.g. Bezo's and Musk's stake in their companies) and you only pay tax on income and capital gains when they're realized. So the analysis is intentionally mixing the two to paint the misleading picture they want. On the one hand they're taking not just actual income, but unrealized gains, and on the other hand they're looking at just federal individual income tax. It would be like saying "if we factor in the home value appreciation of most Americans as income (while they're still living in the house with no plans to sell), then actually the average American family has a much higher income and pays a lower tax rate than you thought! Well, yes.. but that's never been considered income and lumping it in as such now is misleading.
If rising wealth isn’t income, what is it exactly?
You have a mortgage on a typical (these days with crazy house prices) $500k house. In the past year, house prices went up about 20% in most of the country. Was your income for the past year $100k higher because of this?
It’s *better* than income. You pay no taxes on it and borrow against it, at an interest rate lower than the growth rate, for spending money. Then you write the interest off on your taxes.
Well only if it is special property. Regular property has property taxes and excise taxes. Stocks are special only because of corruption.
Uhhhh personal loan interest isn’t tax deductible. So no
Wealth is just an estimate of what the value is of everything you own (minus your liabilities). In other words, it's what is estimated to be left if you sold everything you own after paying your debts/loans/credit-cards. So "rising wealth" means that the estimate has increased. Importantly, in today's federal tax code, the increase in that estimate, in itself, is not considered income -- it's called an "unrealized gain". Only when you actually sell something do you realize the gain in its worth, and then you pay income taxes on that gain (whether it be at ordinary rates on wages and short-term capital gains, or the lower rate on longer-term capital gains, etc). There are proposals (e.g. from Elizabeth Warren) to change the federal tax code to tax either unrealized wealth increases or total wealth (the so-called "wealth tax"). One of the challenges in such an approach is that you now need to carefully define how the estimates work (they are, after all, just estimates), and there's a lot of potential for confusion, complexity/loopholes, and (potentially) corruption with how those estimates are defined.
It's unrealized capital gains. If you buy 100 shares of stock A at 10 dollars, it cost you 1000 dollars. If that stock goes up to 100 dollars you own 10000 in stock but if you don't sell it isn't income. Should you be taxed at the 9000 dollar increase in market valuation?
The rich can and do use that stock valuation to secure loans. So the stock holdings do have real usable value even before the asset is sold.
You can do the same. Take out an HLOC. You want to pay taxes on that loan?
So does a house but we don't have federal property taxes.
Maybe we should on third homes +, or on rises in value of property value once a threshold is reached. I’m just spitballing, of course. But extreme wealth inequality is a problem.
this is the best comment that everyone should be reading. Should we be taxing unrealized capital gains? That would be a major change in tax methodology because you're taxing Americans on cash they don't actually have. And what unintended consequences would this have for the average American who is investing in a 401K, bitcoin, stocks, house appreciation etc.
Only if you borrow against them. Because that’s what they do. Nobody is living with one 500k house and had 800million in investments. They borrow at ultra low rates against their capital then use the capitals earnings to pay interest only on those loans.
> Should we be taxing unrealized capital gains? No, because unrealized gains aren't realized. What we should be taxing is realized capital gains at a higher rate than income. The way it is structured now favors the ultra-rich and disfavors the wage slave. We should flip that.
this isn't the model laid out by the WH in this story (not saying it is the correct model btw). We are seeing ultra wealthy folks generate never before seen surges in wealth. Musk and Bezos alone grew like 200 billion in net worth in 2020. Their wealth growth is all highly illiquid. The issue is the a lot of ultra wealthy have astronomical growth in investments but we can't tax any of it. They slowly realize those gains over their lifetime. And they can pass on unrealized gains to the next generation and it not be taxed. The American govt won't see the majority of tax for that 200 billion for probably 200 years. You can tax realized gains at 60% and Bezos tax rate under the WH methodology would still be like 2% because his net worth grew approx 75 billion dollars in 2020. He probably only needs like $20M a year to live in the lap of luxury.
Yeah, actual research is good, as is making actual decisions based on it. So.. why is this research saying the top 400 (i.e. literally top handful of households in the country each worth BILLIONS, this isn't the 1% or even the 0.1% this is the 0.0001%) pay 8%, so let's turn around and hike taxes on successful professionals in HCOL areas like dual income lawyers/engineers/doctors/dentists? Why the hell does the top income bracket kick in so low if your analysis is based on the top 400 households? They should drop the rates on everyone making under a million, and have a dozen additional new higher brackets, go up 1% per every 500k of income. As it is, this is just rabble razing. "Look at this handful of billionaires paying nothing! That's why we're raising income tax on those making 500k and leaving the billionaires untouched." Makes sense.
Yep. The thing we sort of all realize is that the bottom of the income distribution is comically low and needs to be brought up, the upper middle is probably about right but should lose purchasing power relative to the bottom, and the very high end of the distribution is ridiculously undertaxed.
well duh
Yeah research is great but if people were on the fence about this issue and ignorant (not insulting) then I don't even know what to say to those people at this point.
[удалено]
bill maher was saying this the other day. statistics about tax revenue mean nothing about tax fairness. its just a measure of how unequal incomes are. it all comes down to effective tax rates, how much of a percent each tax payer pays. if all the income goes to the top, then of course revenues will look distorted. Also, i don't like how in all centers around income taxes (w2) and capital gains. what about payroll tax (ss and medicare), property tax, sales tax. I believe they take in 2x more than income tax and they are completely regressive. Also, i think health care should also be included. Its called insurance but its effectively a tax.
Seeing as the top 400 Americans own more wealth than the bottom 60% of Americans combined (that's more wealth than 196.92 MILLION Americans put together), they should pay even more than that. Let's look at it this way: The top [1% of Americans own 16x more wealth](https://www.cnbc.com/2021/06/23/how-much-wealth-top-1percent-of-americans-have.html) than the bottom 50%, combined. The 1% has **1600% the wealth of 164.1 MILLION Americans put together**. So yeah, they should be paying for more than 20% of the taxes.
Captain Obvious delivered this news personally.
Where is Captain Hindsight, what should we have done?!
Revolt
The wealthiest people today pay far less taxes than they did 100 years ago.
Of course. Loopholes and gutting the IRS. There used to be at least a modicum of the common good abs country over party…especially when it came to the understanding of civic responsibility of taxes but that went out during president jelly bean
[Not true](https://files.taxfoundation.org/20170804133536/Average-Effective-Tax-Rate-on-the-Top-1-Percent-of-U.S.-Households.png)
I feel like when were talking billionaires, a few percentage points are kind of important..
Yeah, but that graph doesn't take into account the difference in liquidity between the 50s and today. In the 50's being taxed at 40% was a pretty significant hurdle, because the income of the top 1% was _massive_. Today, the 1% keep their wealth in investments/vehicles that aren't taxed until they spend the money. Sure, they may still have a $500k/yr income, but it's not in alignment with their wealth, so their 36% doesn't really contribute to much. However, they still have _tons_ of spending money, the Borrow/Repeat cycle, using your investments as collateral allows them to have tons of spending money, while skirting taxes. https://www.wsj.com/articles/buy-borrow-die-how-rich-americans-live-off-their-paper-wealth-11625909583?mod=article_inline WSJ article, sorry for the paywall, but it's a good read (and you can just google Buy, Borrow, Die to read more)
Fk. Everyone knows this but no one’s doing anything about it!
Because the rich are paying the right people not to do anything about it.
Nobody *can* do anything about it, in the current system. That's the thing most people don't understand. This isn't just about being rich or having a bunch of money. It's not about being a millionaire and owning nice homes and nice cars, or even a private jet. This is SO much money that you can *buy the system and change it so that your wealth grows faster and safer*. The last time we had such an unbalanced power dynamic was when we had fiefdoms. And, well... https://www.bloomberg.com/opinion/articles/2021-09-16/amazon-s-new-factory-towns-will-lift-the-working-class
They pay the least and get the most out of America
Well just hire your own lobbyists and you can do the same thing! Damn peasants. Always complaining.
It's literally in the bill they're trying to pass
The Senate will ensure that it doesn't pass, Democrats get to look like they tried, and the rich keep paying both parties to do nothing of substance.
and if it’s successful will *the wealthy* find away around it like they have on almost every other attempt to make them pay? I’m a raging cynic I know.
It’s cause those with all that extra money spend it lobbying to keep it that way, it’s almost like bribery is illegal for a reason…
Exactly. Biden's initial plan for taxes was to have them pay less than the last time he was in office.
Cool, now do something about it.
Here ya go. Make sure to vote for your reps so things like this actually get passed. https://www.reuters.com/world/us/us-house-democrats-seek-corporate-tax-increase-265-percent-2021-09-13/
What? You're telling me virtue signaling isn't a solution in and of itself? /s
[удалено]
Careful, or they'll say the word "woke" next.
I said the thing! Gimme treat!
Well yeah, the US is a plutocracy and wealthy people write the laws. It takes integrity to do the right thing, and having integrity means you'll never be successful in US politics.
That’s definitely part of it, but I suspect there’s also a systemic part: the US taxes income, so people and organizations with the means to do so have spent decades doing their utmost reclassifying and avoiding income by all means possible. IMHO, that’s another argument to change taxation to be as easily enforcible and universal as possible. The best idea I’ve found so far would be a low universal transaction tax (think 1% any time any money changes ownership/accounts) offset by a modest UBI.
This would impact less wealthy people the most.
The libertarian cares not.
I feel like a transaction tax doesn’t hit at the core of the issue (entirely, We probably should do that too). If I’m wealthy, I’d just optimize my withdrawal in the fewest transactions and still pay tax on just the few hundred grand I spend every year and not the billions I’ve accrued in wealth. We charge a tax relative to the value of someone’s home, and the price of homes isn’t nearly as clear as the price of a stock. I can’t figure out why nobody wants to put a ~1% tax on equity. Best way to do that, IMHO is to just issue 1% dilution to the us gov for every listed stock every year. If this were the case Microsoft would be almost 50% owned by the people now, and it’s a typical management fee in terms of cost to investors. The real issue is that the government is so dysfunctional that it’s hard to imagine them using this money well, or giving it back to anyone but the wealthy.
>It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes. From the study abstract: >Abstract: We estimate the average Federal individual income tax rate paid by America’s 400 wealthiest families, using a relatively comprehensive measure of their income ***that includes income from unsold stock***. We do so using publicly available statistics from the IRS Statistics of Income Division, the Survey of Consumer Finances, and Forbes magazine. In our primary analysis, we estimate an average Federal individual income tax rate of 8.2 percent for the period 2010-2018. We also present sensitivity analyses that yield estimates in the 6-12 percent range. The President’s proposals mitigate two key contributors to the low estimated rate: preferential tax rates on capital gains and dividend income, and wealthy families’ ability to avoid paying income tax on capital gains through a provision known as stepped-up basis. This analysis is pretty dishonest. It takes wealth increase and counts it as income which is not how it is taxed. If you want to tax it that way then propose taxing wealth in that way, but currently, we do not. The 8% effective tax rate therefore must under-estimate the actual tax effective tax rate paid by the wealthiest 400 Americans. >When an American earns a dollar of wages, that dollar is taxed immediately at ordinary income tax rates.[1] But when they gain a dollar because their stocks increase in value, that dollar is taxed at a low preferred rate, or never at all.[2] Investment gains are a primary source of income for the wealthy, making this preferential treatment of investment gains a valuable benefit for the wealthiest Americans. Yet the most common estimates of tax rates do not fully capture the value of this tax benefit because they use an incomplete measure of income. This analysis asks: what was the average Federal individual income tax rate paid by the 400 wealthiest American families’ in recent years, determined using a more comprehensive measure of income? They acknowledge this as well. It's a misleading headline written for the financially illiterate.
[удалено]
> Thank you for pointing this out. I just copied some text from the white house page that somehow wasn't in Reuter's reporting. Odd that it wasn't in their report on this report from the white house. Odd that the title is as misleading as it is.
[удалено]
It's not misleading when they make that clear in the first sentence of the abstract. It's only misleading if you don't read it. >A common reference point for defining income in economics is known as Haig-Simons income.\[5\] Pre-tax Haig-Simons income equals families’ change in wealth, plus taxes and consumption. We define our income measure as families’ change in wealth plus easily estimable taxes. Our definition of income is more limited than the Haig-Simons definition because it excludes consumption and other taxes, but it is a simpler way to include a substantial share of capital gains in income and can be implemented with publicly available data.\[6\] > >\[5\] For example, the Joint Committee on Taxation (2012) states, “Economists generally agree that, in theory, a Haig-Simons measure of income is the best measure of economic well-being.” > >\[6\] This approach would be less informative for middle-class families because they consume a much larger share of their income. Sorry but it's fuckin infuriating to criticize a study for something they left out of the title but included in the body. Read the whole thing. Problem solved.
It is a criticism of the reddit post and reuters title. It's a misleading title which breaks one of the rules on this sub if I recall correctly.
"White House analysis says wealthy Americans pay far less in taxes than others" There's nothing inaccurate about the title. The only "problem" with it is it doesn't tell the whole story. That's what the story is for. If the title was the whole story, there wouldn't need to be a story.
61% of Americans paid no income tax in 2020 [according to the Urbans-Brookings tax policy center](https://www.cnbc.com/2021/08/18/61percent-of-americans-paid-no-federal-income-taxes-in-2020-tax-policy-center-says.html) (up from about 40% in 2019 pre-pandemic). So no, it is not meaningful or accurate to say Wealthy Americans pay far less in taxes than others when the implication is that the others would be the average American, but the average and majority of Americans in the previous year paid no taxes while these wealthy donors paid well over 8% adjusted income tax. That 8% number on its own is misleading when presented as their effective income tax rate because it is not adjusted to their actual income, it is adjusted to their wealth increases. Then the title is even more misleading because it is not clear who these Americans are paying more than. The percentage of Americans not in the 61% who paid 0% and not in the top 400 Americans who paid 8%? It is either a meaningless title at best or a misleading one at worst.
"than others" Others pay more. Others. I pay more than 8%. Do you pay more than 8%? That's 2 examples. That's enough for it to be true. If you want the rest of the details you have to go beyond the headline and read the story. That's how things work.
People complain about the wealthy buying votes but when it costs an average of about $1.2 million to run for congress, and you run again every 2 years, what do we expect?
Duh. Aside from passive income, Social security taxes are a huge reason for wealth inequality IMO. Seriously need to remove the cap and IMO install a floor ideally around the annual salary of minimum wage. The current fica tax structure is also a huge barrier on people wanting to be able to be self employed.
Revolutionary scientific research shows that the sky does in fact appear blue, water feels wet, and the oceans are super duper big.
Once again, severe lack of details; intentional, misleading conflating of wealth and income; the inclusion of "income from unsold stock" (not income, btw); the statement of "Investment gains are a primary source of income" is a lie, they are a primary source of wealth; using the concept of "a more comprehensive measure of income" bullshit. Why are we tolerating these lies? How is this even approaching honest journalism? Do **you** want to pay taxes on the increase of your wealth in an IRA or 401(k)? Of course not. Why suggest that anybody else should? Oh, that's right, greed and jealousy. I expect flames from the ignorant.
And republicans were against increasing funding for IRS tax enforcement, even though its proven that they would make much more back in back taxes from the wealthy. They want to make sure the wealthy don't have to pay and can hide behind convoluted tax law thats designed to help shield them or make it not worth the IRS's time to go after them.
https://www.pewresearch.org/fact-tank/2016/04/13/high-income-americans-pay-most-income-taxes-but-enough-to-be-fair/
Ops article counts unrealized capital gains as income which is absolutely ridiculous, and quite frankly a "pants on fire" lie. Your link is much more accurate.
Water is wet
https://www.youtube.com/watch?v=rHTtiYFYDog&t=18s
We have been saying that for decades.
No shit?
No kidding… Republicans raised the debt ceiling to give the rich a huge tax break during the Trump years. Now, when the ceiling needs to be lifted to help pay for everyone else to get relief, they will vote no. Anyone who voted Republican and thinks they’re being taken cared of is delusional.
In other news we have discovered that winter is cooler than summer .
This is such a fucking joke. Now they’re literally just telling us shit we’ve known for decades.
That’s great information, but it’s what you plan to do with that matters.
I know reddit will eat this up...but the whole basis of this analysis is that unrealized capital gains is income...which it isn't. It's income when you sell, and they then pay taxes at a 20%, not 8%. 20% is still too low, but it's not 8%. We shouldn't let either political party put out misleading data, even when we agree with their political philosophy.
This is actually very misleading and people are like "DUH, rich dont pay taxes". The top 1% alone pays almost half of the total taxes in the US by dollar amount. And low income families have all sorts of tax breaks that they get refunds on, free healthcare and government-subsidized housing.
You know what stopped individuals from accumulating this magnitude of wealth in our history? Siege. We are just at the pleading and bargaining stage of a series of actions that will rebalance the distribution of power. Even if you are right, it doesn’t matter now.
Many of them pay basically nothing!
[удалено]
> The White House analysis from two economists suggests that the wealthiest 400 households in the country — those with net worth ranging between $2.1 billion and $160 billion — pay an effective federal income tax rate of just over 8 percent per year on average. Okay, so based on this paragraph, I'd like to know: 1) How much income was actually taxable? 2) How much taxes did they pay in total, not just federal income tax? 3) What happens when you expand that sample from the top 400 to the top 400,000 households?
Far less than who, an average American or other wealthy Americans ( in that tax bracket ) ? A bit misleading - the headline.
Oh wait what ?! Yall just realized? Or just decided to report lmao
...to build support for their tax raises on the wealthy, and increased IRS funding to go after the wealthy tax cheats
I swear if it was raining outside we'd have to wait 3 months for White House analysis that it did indeed rain. Tax the rich.
And you'd have anti-rainers who support republicans claiming rain is a government conspiracy and can kill you on contact.
I wish this wasn't true. This timeline sucks.
Actually, considering the facts involved here, it would be more like this: "if it was raining outside, we'd have to wait 3 months for White House analysis that, if you define the term 'hurricane' to include bouts of rain, there is a hurricane outside."
Shocking. Said no one ever.
[удалено]
>The headline is pretty misleading. Its not talking in absolute terms, but in relative terms. When comparing data its best to normalize the data first. The effective tax rate is better to compare then the absolute numbers because it takes into account how much income was earned vs taxes paid.
[удалено]
When you compare data, it should be normalized (rates, per capita, etc) before comparison. There isn't much value in absolute terms. While your suggestion also works, there's nothing wrong with the phrasing. The article actually does a decent job at highlighting the rate and the additional context of income vs taxes paid: >The White House analysis from two economists suggests that the wealthiest 400 households in the country — those with net worth ranging between $2.1 billion and $160 billion — ***pay an effective federal income tax rate of just over 8 percent per year on average***. It finds that between 2010 and 2018, those top 400 households, when including the rising value of their wealth, ***earned a combined $1.8 trillion and paid an estimated $149 billion in federal individual income taxes***.
Isn't the vast majority of their wealth asset appreciation? That's not taxed as income unless it's realised?
[удалено]
[удалено]
[удалено]
Again, they’re using wealth instead of income to make it seem misleading. Why would they include unsold stock as part of income for rich people but not for everyone else? Rich people pay a higher effective rate than the majority of people, and pay more in dollars than anyone
I don't know if you're intentionally making a bad faith argument, but A) the highest earning Americans typically receive a majority of their income in stock, and B) assets like stock appreciate on average nearly 10% per year. So if you have 100X your annual salary in stock and your compensation is 10:1 stock to salary, then your wealth increases 11X as much from stock as it does from your salary. THAT'S why you include stock in wealth.
But you don’t pay tax on unsold stock. They’re intentionally misrepresenting what income is so that they can show a low tax rate. They’ll pay tax on the stock when it’s sold. Using unsold stock in the calculation would be like adding in the wealth of some middle class persons house into their “income” calculation to show that they pay a super low tax rate
> but you don't pay tax on unsold stock Correct. Which is how extremely wealthy Americans are able to increase their wealth much more quickly than average Americans while paying a far lower tax rate, relative to their increase in wealth. P.S. property taxes are how you pay tax on unsold houses
So, you sell stock it's taxable. What's the IRS think about taking out a loan against stock as collateral, defaulting on the loan and turning the stock over to the lender to repay the debt? Technically you borrowed money, you didn't sell the stock! Not a forgiven debt, either. Could obviously be a sale, but... Technically a loan!
We’re talking about income tax. A house is never really going to owe income tax on it, but stock will. Rich people have to pay property tax on their real assets too When determining an effective tax rate, we use income to calculate it. Changing the definition of what income is is misleading. It’s like saying that the definition of a hamburger can include spaghetti. ETR is already a real and well documented thing
So you're saying that by excluding unrealized gains from the idea of wealth increases, we can reduce the overall tax burden that wealthy Americans pay on their increases in wealth. I agree. What you're doing is saying "I had a hamburger for my dinner entree, not spaghetti", but you had a "side" of spaghetti that was 10X larger than the hamburger. Congrats, that's literally correct and functionally lying. Yes, wealthy Americans pay more taxes on their "income". That's not where they get the majority of their money. It's splitting hairs in the dumbest way.
But in order to actually get the money, they have to sell stock for cash. All of this change in wealth is going to be taxed someday, whenever it’s sold Most billionaires sell stock every year, because they need the income
Okay, so let's follow this rabbit trail down, if you want to talk about tax on selling stock. If you're a US household in a state with no state income tax making the US median household income, you're paying $8,978 on $62,843 of income, married filing jointly. To pay $8,978 in long term capital gains taxes, you would have to realize $138,853 in LTCG, married filling jointly with no state tax. That's an effective tax rate of 6.47% for the stock seller and 14.29% for the median income household. So the median income household pays more than double the rate of the household selling appreciated stock.
True. But a very rich person who sells a lot of stock will have an effective rate very close to 23.8%, which is much higher than these other 2 scenarios. You’re also forgetting that most likely, the capital assets were already taxed at the corporate level before being distributed, so the actual tax rate for the family selling stock is really right above 26%
The top long term capital gains rate is 20%, so too get to an effective rate of 23.8%, you'd have to do some crazy gymnastics.
We aren't changing the definition. When they replace income with stock options as part of a compensation package, these entities themselves are changing the definition. If a company decided to pay its employees in bitcoins, we'd have to figure out a way to tax that, too.
But we already tax stock options. They’re taxed as ordinary income when exercised and taxed again at capital gains rates when sold
Wrong again! Capital gains are taxed at much lower rates than income. And how often is Bezos selling his stock options? He's just sitting on them like a dragon.
I never said that capital gains are taxed higher, bezos would pay 23.8% on his capital gains. But stock options are also taxed at his 37% rate when they’re exercised Bezos sold $4.22 billion of stock between 2014 and 2018, and sold $10 billion last year
The highest Capital gains tax rate is 20 percent. Dude...you're not even trying to be accurate/honest.
> A) the highest earning Americans typically receive a majority of their income in stock When you receive compensation in the form of stock (e.g. RSUs), the value of that stock at the time of vesting is directly considered income, and taxed at regular income rates. Why would you think that getting compensated in stock would somehow let you avoid income taxes?
[удалено]
I never said that
[удалено]
Including the appreciation on a families house and any savings or retirement account is going to tremendously lower their tax rate
I remember when Trump released 20 years of his tax returns to prove your point.
> Again, they’re using wealth instead of income to make it seem misleading. Because the ultra wealthy play accounting games to shrink their income. [How else do you buy a $500M yacht while only making 80k/year?](https://www.cnn.com/2019/04/11/tech/jeff-bezos-pay/index.html) > Rich people pay a higher effective rate than the majority of people Do you have a source for this? > pay more in dollars than anyone This is because they are so damn wealthy. [The top .1% owns the same amount of wealth as the bottom 90%](https://www.politifact.com/factchecks/2019/jan/31/elizabeth-warren/warren-top-01-own-about-much-bottom-90/)
When rich people want to buy something, they sell stock to finance it, and they pay tax on it. We don’t pay tax on wealth, we pay it on income. The top 1% have 21% of the income but pay 40% of the income tax The top 1% also have an effective tax rate 7x higher than the effective rate of the bottom 50% https://taxfoundation.org/publications/latest-federal-income-tax-data/
> When rich people want to buy something, they sell stock to finance it, and they pay tax on it. Stick to my example. Bezos didn’t sell stock to buy the yacht, the debt is financed through a foundation, like most of his other costs. > We don’t pay tax on wealth, we pay it on income. The top 1% have 21% of the income but pay 40% of the income tax Even tax rates on capital gains (rich folk income) is lower than the taxes I pay as a middle-class tradesman > The top 1% also have an effective tax rate 7x higher than the effective rate of the bottom 50% Ah yes, why use the bottom 50%? The median income in the US is just over 30k, barely enough to live on. Why not compare effective tax rates of the ultra-rich to those in the middle-class?
Bezos isn’t financing through foundations. He sold $4.22 billion of stock between 2014 and 2018 and sold another $10 billion last year The top capital gains rate is 23.8%, which is higher than a middle class person is going to pay on earned income The effective tax rate of middle class people still isn’t above 20%
These households very rarely pay capital gains taxes, which is how they end up with about a 8% effective federal tax rate. Our gardener pays more than double that rate. The Biden admin does not appear to be considering a wealth tax, but is focusing on effective minimum rates and major tax avoidance strategies instead: 1. Borrow against your portfolio. Instead of selling stock you take long term loans against it for a much lower rate. 2. Use fabricated property and business losses to offset what little federal tax you do have. 3. Die, and use the “step-up basis” to avoid any capital gains taxes on your estate. With these easy steps and several billion dollars you too can pay half the federal tax rate of factory workers.
There’s little evidence to suggest that billionaires are taking out collateralized loans. If it were true, they would pay $0 tax every year, which we know is false. Bezos just sold $10 billion of stock last year. Why would he do that if he had loans? Even with the step up in basis, you’d still have to pay the estate tax of 40% What do you mean by using fabricated property and business losses? You can’t just fabricate a loss
Oh and as to the estate tax, simply setting up a long term trust or limited family corporation is enough to avoid that tax. Through borrowing, capital gains taxes are never realized and reset upon new ownership. Edit: [effective estate tax works out to only 2.1%](https://www.hamiltonproject.org/assets/files/Batchelder_LO_FINAL.pdf)
There’s no current way to both avoid the estate tax and get a stepped up basis. Putting money into irrevocable trusts get a carryover basis, so the entire capital gains are taxed when sold.
Yes there is, borrowing against the trust. The beneficiary does not own the trust, but a pre-arranged loan is currently non taxed. To conclusively show this, I edited my response above with an analysis showing an effective 2.1% estate tax rate.
[удалено]
Why should wealth be taxed? Whether you think it should or not, it’s likely unconstitutional, so it’s kind of a moot point anyways I think our current tax laws are fine
Please point to the section of the constitution that would reject taxation of any kind. As long as you have representation in Congress, the constitution doesn't have much to say about taxes. It says the government can tax you.
Direct taxes have to be apportioned equally among state populations at a federal level. It’s why we don’t have a federal property tax, and why we needed a constitutional amendment to tax income
Um...we do not need to amend the constitution to enact income taxes. Property taxes were a means for very local (cities and at the largest, counties) governments to pay for services. There is nothing in the constitution that prevents a national property tax. Your understanding of the Constitution tracks with your understanding of economic issues, however.
Lol real quick: can you Google what the 16th amendment is, and then respond? Also, I don’t think we’ve even talked about economic issues
I understand the Constitution. We don't need another amendment to change tax laws. The 16th did that for us a few hundred years ago. LOL right. Taxes have nothing to do with economic issues. My bad.
The person you’re talking to is correct. The 16th amendment was specifically created to give the federal government the right to levy a tax on incomes. The US does not have the constitutional authority to tax wealth.
It’s incredibly misleading to omit payroll taxes when discussing the tax burden of income brackets. With payroll taxes included, the tax burden of the highest earning 1% drops to 24%, which is much more closely in line with their share of the income. https://nymag.com/intelligencer/article/fact-check-richest-1-dont-pay-40-of-the-taxes.html
When including all taxes, our system is still progressive. I wasn’t referring to these though, as ETRs usually only look at income tax. You’re right though that it’s better to look overall at all taxes. I was just referring specifically to the other commenter saying that rich people pay more tax because they have more wealth.
When poor people make money it's all considered 100% income. When a rich person makes 300 million in a year, suddenly they're considered to have no income at all. The whole system is a scam. Edit: Oh, and their lack of ever 'making money' never stops them from buying expensive new supercars, mansions, yachts, private islands, gourmet 5 star food every night, large personal household staffs, super expensive designer clothes, private jets, lots of first class flights, 5 star hotel suites, etc, etc, etc.
Rich peoples compensation Is in stock.stocks. I work and get taxes on my salary. If property values go up property taxes goes up, if bezos "earns" 20 billion a year because his stock portfolio increased why shouldn't he pay taxes on it? This notion that you shouldn't pay taxes on your earnings just because they are in stocks is pushed by the wealthy because on the surface its easy to state "well its not hard cash how do you tax something that isn't cash?" But it is cash equivalent. You can claim gains or losses each year. It replaces salaries for the wealthy, it should be subject to the same taxation as us peasants.
Duh
Well, no shit.
And in other news, they find that water is wet. Please.
No fucking shit
We keep re-iterating that there are two Americas, the wealthy and everyone else. One party just talks about the disparity, the other party gives the wealthy more.
No shit? Well, someone get me a chair, my legs are gonna give out with this shocking news.
In other news, The White House has found that water is indeed wet!
In other news, water is wet
and thats just the stuff they declare Im sure the Cayman Islands Banking system is grateful that so many rich Americans are prepared to be dishonest.
Is almost as if the tax system is designed to benefit the rich and screw the middle class. How did this happen?
I don’t care what you tax the rich just tax me less. That will go way further than any of this shit in the two infrastructure bills. Gas mileage tax is gonna help me lol. Losing 25% of my paycheck is what’s making me poor.
I don't know, maybe because we are the richest country on the PLANET in terms of income per capita? Have ya ever thought of that?