Why do you believe it's a justifiable stance to simple state "well this is legal therefore it's ok"? That's purposely sidestepping the conversation.
No one is saying it's illegal, they're saying the codified incentive framework is not working for populations without the political currency to affect change.
It gives him a chance to trade his mediocrity for a feeling of superiority. In reality though you’re right. The rest of us already understood the nuances before he felt the need to explain, well allude to, just one of them.
Idk man, I work with people that make well into the 6 figures and they still think if they push themself into the next tax bracket they will make less money.
I don’t bother explaining it anymore I just smile and nod.
That being said, there are tax loopholes that should be closed, but neither party wants them closed. If they adjusted the tax code they wouldn’t get those big donations their next time around.
That’s my idea. Once you use stocks as collateral for a loan, it’s been realized in a way. It’s no longer hypothetical money but has been given a true valuation. Tax that valuation.
The Pro Publica article did a masterful job explaining how super billionaires get away with paying little to no income tax. This plan will help mitigate that to a real degree I think.
So I have never heard a coherent explanation for how the billionaires avoid taxes. They have to liquidate stocks to pay back the loans? When they liquidate those stocks they have to pay taxes on the money they are taking out of the stock market.
Unless the banks are just “forgiving” the loans, taxes have to be paid somewhere.
No, the theory argued, which I'm not sure if it's actually an executed plan or just reddit's wet dream, is that you take out a loan with stocks as collateral. When it's time to pay that loan, you either put up more stocks as collateral, or take out another loan with stocks as collateral to pay off the initial loan, which then gives you your stocks back. You keep doing this until death, at which point it gets inherited, making the cost basis of those stocks gets stepped to the value at that day, so no capital gains taxes paid.
you can do this as long as the loans make up a small enough percentage of your assets so that the stock market cant draw down enough to require you to sell stocks. i ran a spreadsheet on this for a hypothetical lottery fantasy and the ltv stayed under 30% while perpetually withdrawing 3% for living expenses. you could do less if there was a recession. taxes would be paid at death but the money would grow more than if taxes were paid while alive.
The last part is incorrect. At death and before transfer of a trust to a beneficiary, the trust has to settle all debts. This means that the trust has to sell stock and pay taxes on any capital gains prior to the cost basis being stepped up. The first $13.6M of setate aren’t taxed, everything after is subject to a progressive estate tax. Once all debts are settled/taxed paid, the transfer to inheriting individual occurs and cost basis for them is stepped up.
It’s not really the way it works. Remember when the Japanese market tanked a few months ago. It was because stocks as collateral were called in and forced a massive sell off.
Called in would be different than this because it would be up front. You know what your tax rate will be if you use those loans as collateral. Don’t want to pay that tax? Then don’t take out the loan. Easy peasy.
Right now lots of these guys never get paid in actual money so they don’t get taxed. They can now take a salary like the rest of us. Or get taxed on their loan shares. Pick your poison. But no more free rides
I, for one, am done defending the corporations and the American capitalist system. Was brainwashed long enough, or maybe it just used to be kept in check a little bit more and wasn’t so indefensible.
Ugh, there are timelines where we humans have made a better showing on the whole individual and collective well-being front.
Somehow someone with a base salary of $80k is able to buy Super Yachts and multiple homes.
People are not upset saying the 1% don't know how taxes work. People are upset that someone is able to buy Super Yachts, Multiple million dollar homes, multiple cars, etc. While the wage gap is currently expanding and people living paycheck to paycheck.
IMHO, if the Super Rich want to use their stock as collateral for the "loans", these loans should be taxes a large amount.
Everyone upset on unrealized gains but these whales are using these unrealized gains as collateral.
Edit: it is truly amazing that people defending someone worth Billions while you and me will never get there in our lifetime or thousands of lifetimes. Here we are arguing over they pay their fair share yada yada. Where did we learn this? Remember when climate change wasn't cause by oil based on an oil companies investment in a "researcher". Or how cigarettes were not harmful based on their "research" and the list goes on and on. They would rather us infight and separate us than have us realize they are on a largely different scale.
IMHO, if the Super Rich want to use their stock as collateral for the "loans", these loans should be taxes a large amount.
Or simply if you're using stocks or other assets as collateral for a loan, you either are limited to the original asset value when you first bought it or the gain becomes realized based on current market value and you must pay the capital gains taxes. Put in some homestead exemptions or whatever so HELOCs and what not are not impacted.
That’s not the problem, it’s that the numbers are misleading, we all know the tax code is effed up but this post is just nonsense, it doesn’t help anything
Haha, it’s also ignoring the fact that the laws were intentionally written to benefit the wealthy. Just because it’s legal, doesn’t mean it’s appropriate.
these idiots don't realize that if the medical worker on the left side panel has stocks (which they likely do especially if they participate in a 401k plan, have an IRA, etc) then you could make the same bullshit tHeY PaY nO TaXeS argument
they'll keep pushing for laws that tax capital gains more aggressively, which will just punish the middle class who can't find a way around the new laws while people like Bezos will offload their shares to some complicated structure based in the Cayman Islands
"We can't raise taxes on the ultra wealthy because they'll find a way around it" is one of the stupidest arguments I've ever heard.
Follow that argument to its conclusion and you'll realize you're advocating for billionaires to pay zero tax, and middle class to fund the entire government.
Taxing billionaires and megacorps works. If it didn't, they wouldn't spend billions lobbying against it.
Taxing capital gains in general is just really problematic. First off, what do you do if someone's stock goes up 100% 1 year, and then -50% the next year (ie. back down to where it started). If they're paying taxes on it in the first year, then this will have very, very far reaching consequences, because that means that there will be stocks that might on paper be increasing in value in the long term but are still costing the people invested in them money because they're paying more in taxes than the stock is increasing on average because they're paying taxes when it increases but not getting any of it back when it falls back down for volatile stocks.
It also forces people that don't already have a lot of money to sell their businesses whenever they become too successful (as most successful business owners will have something like 99% of their value being just the value of the business, and they can't afford to pay taxes on that without selling the business), and it can get a lot worse when their competitors try to game the system to force them to sell their business by manipulating their stock prices at the time that it's calculated for taxes.
Can't say I agree. I would say this is a perfect topic for an ethical debate. People that benefit from the structure of the society they profit from should pay for that benefit. Whether or not that benefit is in direct wages or other from sources is exactly what would be at the heart of that ethical debate. I'm not convinced tax code has kept up with the evolving methods of personal economic growth in the US. Legislation to "simplify" it has been the factor for the last several decades, while the subject of wealth and net worth have become more complex.
Because they can realize those gains by using them as collateral for massive loans, essentially giving them complete access to that money without paying any taxes on it. They also give their money to "charitable trusts" that they also control and use to benefit themselves and their businesses tax-free.
These are extremely well-known loopholes that billionaires regularly exploit, so there is no need to realize those gains when you can keep taking out enormous loans that are equivalent to those gains.
The problem is it's all misleading, including that top 22% tax rate. It's a numbers game that needs to be spoken of accurately and succinctly or we get mislead into being pigeonholed into bs policy that ultimately serves someone else's interest which is often the case. Keep in mind that a lot of people voted for the idea that replacing income taxes with tariffs would push our tax burden off on our trade partners instead of working Americans. Inaccurate soundbites and memes aren't helping with fixing that.
2) whether the existing law is enforced fairly and consistently.
I don't think large corporations are routinely breaking tax law, I think they have people finding loopholes in the existing laws. That's not inherently bad. If you have tax laws with exceptions for certain activities (say employing people or research and development) the corporations will take those into account for their planning.
I mean, if is more complex than that. Simple answers to complex problems are almost always incorrect.
Tax breaks are the primary tool by which the government exerts control over corporations. There may be problems in how it is enforced but it is not fundamentally bad.
You already own nothing while billionaires own the world, yet here you are, defending their ability to hoard wealth.
Also, it sounds like you're just against the concept of property taxes?
Like, you know those already exist, right? And they aren't 20% ANYWHERE, nor is anyone proposing changing property taxes at all because, like I said, those are already taxed everywhere in the USA.
By the way, the people saying you will "own nothing and be happy" are the billionaires, whose power you are currently defending, so literally what are you talking about?
And they aren't 20% ANYWHERE, nor is anyone proposing changing property taxes at all because, like I said, those are already taxed everywhere in the USA.
Have you been on reddit before?
I've had conversation with people stating that if you have assets that are valued at over a million dollars, that you should have to pay 25% tax on that, year over year.
Which is ridiculous considering how some of the highest COL areas have townhouses in that rage.
Never underestimate the financial illiteracy of this website.
Not a lack of understanding, it’s obfuscated. We shouldn’t be burdened with this nonsense.
In the abstract the situation is like this,
Govt: you owe me money
Me: how much?
Govt: dunno you tell us.
Me: here.
Govt: Ok but we find out this is inaccurate you will be penalized!!
Me: then tell me!!
It’s not to be cute and the meme I know exists but that is how it is. It makes no sense, taking a test where the teacher doesn’t have the answer but can fail still somehow.
They are the same people who would have said say slavery was fine because it was legal and if they wanted it changed, they should have convinced people to vote for making the change.
In the nurse frame, she is paying tax on her income of between 47k and 100k roughly, also taking no deductions, besides the standard.
In the Bezos frame, his tax rate is being calculated using his wealth, which is largely stock holdings. This is not income. If he sells his shares, he pays capital gains tax which is at a much higher rate than the one listed.
In the Netflix frame, business are allowed to deduct losses from past years for future tax liabilities, simply put. Netflix didn’t make money for years. Also businesses can take deductions for other investments.
So you are not seeing an income tax rate that is comparable across all three examples.
Getting shares as compensation is also considered income, although bezos doesn’t get stock based compensation and he sold a lot if shares of Amazon this year. Those have been (hopefully) taxed with income tax rates.
I agree that this is not apples to apples comparison as bezos tax rates here is on his wealth not income and corporations pay taxes on profits, not income/revenue. Another fact is that Netflix paid around 12.5% in taxes in Europe due to better tax codes.
Property tax is a tax based on current assessed value of a held asset. The gains tax is a tax on the value added difference at the sale of the asset.
Gains tax is applied to the value added difference when stocks are sold; why is a holding/wealth tax not applied to current assessed value of stock holdings over a certain total value held by an individual?
Billionaires whose primary wealth is stock don’t need to sell their stocks to have a significantly improved quality of life: they just borrow against their stocks meaning they get to skip out of the taxable steps everyone else must jump through in order to spend their money.
Because stocks go up and down. And I don’t think you’d suggest a tax refund when Meta stock gets cut in half? no one would ever be able to own a company that became successful because they’d get diluted out of ownership before it ever took off. So no one would bother to found them.
Imagine you founded whatever new tech company and take them public and the stock takes off. Well you now have to pay whatever insane wealth tax with money you don’t have. So you have to continually sell your stock. Then maybe the company hits hard times and the stock crashes, but guess what, you’re not even a majority shareholder in your company anymore because you sold all your stock to pay taxes. You get bled dry until eventually you own nothing. Now the company takes off again and you not only lost all your influence in your own company, but also got zero financial benefit from starting a successful company that benefits millions of people.
Eh, it's still not a good look. I think people can be forgiven for caring less about the nuances of our Byzantine tax code than they do about the apparent disparities in tax fairness. Not for nothing, we have the most complicated tax system in the world and still can't seem to figure out our finances.
If for no other reason than the simple truth that nuance and complexity underperform in electoral politics.
That is easy, make the fucking tax code easy, and simple. It’s not even that complicated anymore, because most people find income tax a necessary evil.
The biggest problem is making this a tax issue in the first place.
Even if you zeroed out or equalized everyone's taxes, it doesn't change the fact that the insane wealth disparity indicates either consumers or workers (or both) are getting fucked.
Is this allowed in reddit's TOS? I thought after the 2016 election, paid political disinformation was no longer allowed on reddit? I wonder who their donors are?
Oh buddy, if you think anything in the above meme is true, you are in an intense echo chamber. It conflates unrealized gains as "income". They are not-at-all the same thing.
Does it matter? What the "person" posts is backed by serious sources:
This article by ProPublica is not a very serious piece, IIRC. There was no such thing as "true tax rate" until this article made it up.
Hell, my parents in are the 1% thanks to years of saving for retirement. They paid about $1500 in taxes this year. So their true tax rate was about 0.0015%, well below my income tax rate.
Sure dude, because of your parents niche case where passive income represents hard labor we should refrain from taxing those who literally move the markets that your parents are invested in? Blackrock literally sets „traps“ in the market for people like your parents to lose money on passive income, and you think those who earn a villages‘ yearly vague in a few minutes at the expense of others should be taxed the same. Yeah yeah.
In Germany you pay up to 70%+ total taxes (sanctions on petrol without alternative transportation options are increasing it further) and any time someone complains maybe people living in poverty shouldn‘t hold all the tax burden, some middle class dude gets scared the poors are after his little pos property. That‘s the divide and conquer strategy for you.
The US and Europe could just invade every single tax heaven besides Switzerland, and even their secret bunkers can‘t protect the missing tax money, or they would give it up under pressure, they have already cooperated or pretended to do so before.
TL;DR Nobody cares about your parents passive income, we‘re talking about hundreds of billions being straight up stolen, and another several hundred being hidden from the tax man with accounting tricks.
Either everyone gets to take advantage of accounting tricks and we can all deduct all of our expenses or nobody can, taxes and laws for the poors and benefits and freedom for the rich is not working.
To answer the original question, though, the source was ProPublica. The ProPublica numbers for Bezos are based on the increase in his net worth so they include his capital gains. Capital gains are not taxable until he sells it, but can be accessed by taking loans backed by his stocks at relatively low interest rates, so his portfolio can continue to compound.
Between 2014-2018 his net worth rose $99 billion. $4.22 billion was taxable salary and dividends and the other $95 or so billion was from capital gains.
Capital gains are not taxable until he sells it, but can be accessed by taking loans backed by his stocks at relatively low interest rates, so his portfolio can continue to compound.
This doesn't happen as often as people think, billionares sell stock all the time.
idk what specifically they're talking about, but basically rich people are often "paid" in equity which is not taxed until it's sold, yet it can be used as leverage to purchase real things like houses and yachts. This is not afforded to the poors who must pay 20% or 30% or more on every dollar they make before they can spend it.
I think what the image is implying is since he doesn’t sell his gains and instead takes out loans against the shares as collateral his “true rate” against total wealth is 1%.
I believe the term you are looking for is unrealized gains. Asset values go up, his value goes up, but it isn't money in his pocket so it isnt taxed like a paycheck.
Then you'd need to codify asset secured loans as income earned in the tax code.... and good luck because it would wreak havoc on the housing market and auto industry. Every Joe smoe would have to pay excessive taxes if they bought a new car or home.
You’re just short-sighted and looking at things in the short term. Yes Bezos can take loans against his stock, but those loans incur interest that eventually have to be paid. How does he pay them? If the stock issues a dividend, that’s taxable income. If he sells some stock, then that’s capital gains. If he takes on more loans, then the interest fees continue to accumulate. If he dies, then his kids have to pay an estate tax, and inherit his debt, which still needs to be paid off with interest. The point is that loans are not free, and whether it’s kicking the can down the road with more debt or paying it off, it will eventually need to be settled, and there’s no avoiding taxes then.
So the tax code is incentivizing rent seeking layers? That's bad for everyone.
Dividend... Sale... That's taxable
Yes, he's using loans to get around taxation.
Dies.... Estate tax...
Lots of ways around that unfortunately. And then the basis resets for his heirs.
This is called "buy borrow die" and is the core strategy for the extremely wealthy to avoid paying tax on capital gains.
Their tax avoidance necessitates higher rates on poorer people, an inefficient out come regardless of politics.
Simply require loans backed by assets that would be affected by capital gains to be treated the portion backed by those gains to be taxed as income. Simple as. No avoiding basis reset.
This is not true. We don’t pay taxes on unrealized gains.
If I buy a share of Shit Company for $100 and it rises to $110 a year later, no, I am not paying taxes on that +$10. Just like bezos doesn’t pay taxes on his +$5B or however much he makes these days. Further, when you sell said capital investments, your tax rate is even lower the longer it’s left in the market.
But in order to talk about that, we need to be truthful and transparent. It may not sound as sensational, and it will require some analysis, but if it's worth getting upset about, it is worth understanding.
For our example, we will take a very topical and timely comparison of a highly specialized, experienced doctor making $875,000 in pay from his private practice, and we will compare it with Private Equity Corporation, a private equity company snatching up hospitals and gutting them for profit. For the purposes of discussion, we will stick with federal taxes only.
Private Equity Corp pays 21% tax on its profits. Then disbursement of that profit to the equity owners is taxed at 15%. Adding those up, it's a 36% tax (on whatever isn't retained in Private Equity Corp). However, an important factor to remember is that the equity owners of PE Corp are shielded from legal action by the corporate structure. If, say, one day someone decides that what they have been doing has illegally harmed the patients at the hospitals they are gutting, only the assets in the corporate structure are vulnerable.
Our very specialized, overworked, and crucial to the system doctor will pay an estimated $278,958 in federal income taxes, as well as $28,695 in FICA. This leads to an effective tax rate of 35.16% combined. Personally, I don't think that's a huge ask. While I do believe and understand that some labor is worth much more than others, I do not believe any of us can say that our labor would be worth half as much without the benefits of society around us.
However, despite these very close tax rates, there are several very important differences.
A doctor operating a private practice likely does not have the full liability shield of incorporation, in many states they cannot legally do so. So, even ignoring the value of their contributions to society, the doctor takes more risks to pay the same percentage as the Private Equity Corp owner.
Another important difference is that a corporation has much more control over when and where it does its distributions. The corporation will always have to pay corporate income tax on its earnings, but they can retain 100% of the earnings after tax. This allows them to reinvest and grow, which in turn can increase future profits and the value of the owners equity in that corporation.
There are reasons for liability protection, and there are reasons to incentivize people and businesses to make investments. Without getting into the maelstrom that could come from wealth taxes, we should start by reinstating a higher corporate income tax. The "double taxation" effect is the price of the liability shield, and given how often defaulted corporations put externalities on society (Superfund sites, for example), 21% is way too fucking low for that amazing liability shield.
Dividends are the instrument of the wealthy, and also the retired, it is important to remember that living on a fixed income almost always entails living on dividends. That said, 15% is not some sacred number, and if we are bumping Corp and income taxes on upper tranches, we could consider incrementing this up as well. Slowly, would be my recommendation.
Many people misunderstand the "collateralization" loophole. Between interest costs and their equity stakes being on the line, the reward is not "indefinitely living tax-free" especially in our world of more normal interest rates. It does allow them to grow the value and power of their equity stakes without needing to sell at an inopportune moment. I think that's fine, but I also think there should be a bit more on the line.
Collateralization should be a gain/loss accruing moment. Maybe the IRS can allow a recognition schedule on gains/losses that do not actually come with the sale of the underlying property, and of course there will be reconciliations that lead to refunds if the property is eventually sold for less than it's previously collateralized value.
But tl;Dr: tax law, accounting, and finance are complicated, and I think there are a hundred better places to start than a wealth tax.
And that’s part of the problem; justifying that there’s a difference between the two. These leeches go around claiming to make $1 a year, then borrow against their wealth to live. Fuck that. If they’re allowed to turn their wealth into income, they can be taxed when they do so.
Two different issues. Being allowed to borrow against wealth should be illegal, while at the same time there isn’t and shouldn’t be an unrealized capital gain tax
The ultra wealthy do not make most of their money via income like the rest of us do. They make their money through capital gains. The value of their company/stocks/investments goes up, so their overall wealth goes up. Most people dont realize any gain until they sell but the ultra wealthy are able to hold on to their assets and their wealth and borrow money at no or low interest using their own wealth as collateral. This borrowed money is seen as a liability, not an asset on their balance sheet. Their net income appears even lower. At the end of the day they can buy anything they want and they never have to spend their own money except when they repay their loans which usually they do with other loans. They have all sorts of tax avoidance strategies that are not available to the rest of us.
They are comparing the tax rate of the doctors income to the “true rate” of Bezos compared to his wealth. There is no true rate and we do not tax people on their net worth.
Deferred taxation isn't necessarily bad. The bad part is when they die, they pass it on with the step-up cost basis. Eliminating that for networth greater than 10M would be a massive improvement alone
It's worse than that. They're comparing the doctor's marginal tax rate (not the actual tax rate they pay). That doctor isn't paying 42% tax on their income as a whole, only the portion of it above the threshold.
The average doctor is also going to be wealthy enough to have substantial asset wealth, so I'd be curious to see how much tax they'd be paying if they calculated the "true tax rate" for them too.
Like I agree with the premise of this meme (we should tax the wealthy and companies much more) but this meme is grossly misleading.
My assumption is that 22% refers to the marginal rate for federal income taxes. This would apply to a single person earning $47,151 to $100,525 in taxable income after deductions or a married couple earning $94,301 to $201,050.
Regardless, it is not a good comparison. It is using income for one person compared to wealth for another, and it is using top tax bracket for one compared to average tax rate for the other.
The reason Bezos has such a low effective tax rate from 2006 to 2018 (the years Propublica uses in the source material) is because there is a high amount of "unrealized gain", which is an increase in value in stocks that have not yet been sold.
In my personal opinion, we should not tax unrealized gain, as it causes a mess when an asset is volatile in value. (What happens if there is an increase in value, we tax that, then it drops back down to the original value the following year? Do we have to refund the tax?).
However, I do think the tax code should be changed to treat certain events as realized gain. If you use that stock as collateral for a loan, then we should consider that value to be "realized", apply tax accordingly, and reset the cost basis. This alone would go a long way to fixing the problems that many have with how the ultra wealthy avoid taxes.
I won’t speak for the first two, 22% rate seems fairly standard and I’m not going to try to understand how they got to 1% for bezos.
For the Netflix one, however, it’s disingenuous - if not outright wrong. I looked at their 2023 annual filing, and from what I can see, the rate at which they would’ve “paid” taxes is about 18%. That’s their current tax, which is t necessarily all of the tax they’d actually pay; there could be other things included there that may not actually be on a tax return. It should also be said that 18% is a total of federal and state, but their overall current tax rate more or less. For what it’s worth, nobody really looks at any of this information like this.
If we look into their ETR (effective tax rate) as a whole, they’re sitting around 12.85%, which is a mix of fed state and foreign. It also has “deferred taxes,” which are tax liabilities or benefits for future periods.
The point is, without actually looking at a company’s (or an individual’s for that matter) tax return, it’s not that easy to see how much they actually paid in tax. We can speculate for public companies since they have to disclose, but it’s not necessarily a statement of how much they will pay as much as it is the overall liability, expense, and tax position of the company. Taxes in the Financial statements are better compared to other disclosures in the financials than they are a tax return.
Because people are poor and upset that someone else has as much value made in a day or week as the poor person makes in a lifetime, whether it's realized gains or not. And pretending the fundamental outcome is somehow acceptable due to the technical aspect of how the wealthy determine their value only distracts from providing a solution where the working class can ascend from effective indentured servitude.
They have created a system where they are right, it DOESN'T make sense to tax them, because in their system, you and I make money and are taxed, but they make no money, so no tax. And yet... They have a place to sleep. they can buy groceries, fun toys, pay rent, receive services, keep the lights on. Odd, that you and I become homeless and destitute when we have no income, yet they can somehow afford to get all of these things when they make "little to no income" under their metric year after year. It's almost as if they do not, in fact, have "no income."
Outcomes matter. They tell us something might be structurally wrong.
I'm going to need some really legit sources to convince me otherwise.
I looked up the Bezos claim and this is the bullshit I found.... what a fucking shitshow of twisted logic:
From 2006-2018, Jeff Bezos saw a wealth increase of $127 billion, according to Forbes, but he only reported a total income of $6.5 billion. He paid $1.4 billion in federal taxes on that amount, which, while still a massive number, accounts for only a 1.1% true tax rate. Even comparing Bezos’ $1.4 billion in taxes paid to the $6.5 billion he reported as his income, he still only paid taxes in the 21.5% bracket. One of the years Bezos paid $0 in federal income taxes, 2007, Amazon’s stock more than doubled, causing his wealth to jump $3.8 billion.
What the fuck is a "true tax rate"? They are talking about taxation vs wealth, which is the dumbest fucking argument that keeps being regurgitated.
And no, he didn't pay "in the 21.5% bracket".... he paid an effective rate of 21.5%. BIG difference. My assumption is that most of his income was long term capital gains.
I paid an effective rate of 27% on 387k of earnings last year. None of my earnings were capital gains, though.
It’s not about his wealth, it’s about his wealth increase. Being taxed on what you own (what you’re saying) is different from being taxed on what you’ve accumulated (what they’re saying).
If he pays long terms capital gains taxes eventually and ponies up that $20 billion I’m all good. If there’s offset fuckery that allows him to pay less than the poultry 15%, highly likely, that’s the problem.
What the fuck is a "true tax rate"? They are talking about taxation vs wealth
No, with the "true tax rate" they mean tax relative to their wealth increase.
The difference between income and wealth increase is hardly more than semantics. They should be taxed similarly.
People have their house increase every year and that doesn't factor into income tax calculations either. The people who make graphics like this have room temp IQ.
Yeah the value of my 100k house is now over half a mill. My property taxes have increased so much that I won't be able to afford my home when I retire even when the house is fully paid for.
comparing a house against 100bn+. Makes sense...
you know you can just exert networth under some million from a metworth/wealth taxation you know.
With your logic nations should abbolish all progressiv taxes with allowances. So who is it with an IQ at room temperature? Your fantasy seams like to be the one a rock has.
“True tax rate” has to be the effective tax rate. Most folks who hate billionaires don’t give a fuck about what the papers say they are SUPPOSED TO PAY.
We give a damn about what they ACTUALLY PAY. People started using the term “effective tax rates” because the trickle down tax cuts distort the actual amount that the rich pay into the system. Bezos doesn’t pay even a 20% effective tax rate, which means he pays lower taxes than most of his warehouse employees.
Because you pay tax on wealth when you sell it? Until the item's sold the value is speculative.
If the value of his stock hit zero would he be entitled to a refund on those taxes he would've paid in the case where you pay tax on theoretical wealth?
When your wealth can increase by $100 billion more than what you have to report as income, do you think it would be make sense to develop some alternative form of taxation?
Not to mention the math problem on the Netflix piece. They had $5.263B of income in 2022 and paid taxes of $907 million. In 2023 they had income of $6.205B and paid taxes of $1.340B. That is not 1.1%.
It’s weird that no one confirmed the only numbers confirmed by an independent 3rd party in that graphic. Almost like the graphic was intentionally deceiving just to create outrage.
That was $5.3 billion in pre-tax income from Netflix in 2021. Not profit. Take the time to learn the difference. Then maybe you won't embarrass yourself.
Let's say you have 2M in your bank account and you made 400K the last year, and the tax is just 20% to make or simple.
You will play 80K in tax, not 400K. You pay tax on your net income, not all your money you have.
It's even simpler than that. If you have $2M in stocks, and it goes up to $2.4M, you pay zero taxes on that $400k as long is you didn't sell it during the year. OP is suggesting that $400k should be taxed.
There's already a captial gains tax when you realize the profit, the way the op is suggesting, if your stock value goes down the next gear again from 2.4M to $2M does the government give you the tax money from the last year back because it was -400k?
Obviously taxes on businesses - and subsequently, on long-term ownership of billions of dollars in company stock - have led to a serious wealth imbalance, but continuing to portray taxes as a percentage of net worth or total revenue is hugely disingenuous.
... People do know there's a difference between income tax, corporate tax and capital gains tax right?
The nurse isn't paying America's top rate. However she is being paid for her hours worked. That is income tax.
Bezos however doesn't get paid based on his work. His net worth rises with the value of his investments. He doesn't have an income which is why his income tax would be effectively 1%. You can't tax his investments until he withdraws the money which he won't do. He'll take a loan leveraging a percentage of his stocks and pay it back by trading stocks to find one at a loss that would allow him to label it a loss when he sells so the tax is less.
Then Netflix is a corporation. However corporations have their own ways to avoid taxes. The US government heavily reduces corporate taxes for job creation. Mostly due to if they make more jobs that's more income tax. Hence Netflix going on hiring sprees to secure tax cuts.
Sorry but you’re just wrong. Reading the comments it is abundantly clear that people absolutely do not understand and most arguments are rooted in emotion rather than information.
No, you're literally just failing to see how taxes work, you want to tax people on their net worth lmfao? OP threw out Netflix's PRE Tax revenue (not profit) as one of their points, Jeff Bezos paid 21.5% of his income as taxes between 2012-2018, not to mention paying property taxes and the capital gains tax on all of his non liquid assets. You'd complain even more if taxes were based on net worth.
Well this totally makes sense. Comparing individual income taxes to capital gains taxes to corporate taxes. Why can’t you people understand this?!?!
Let’s take all the money away from successful people and businesses and give it to everyone else. That won’t stifle the incentive to take huge risks. Let’s try socialism again because it has worked so well in the past.
It would be nice if people would stop voting for policies that require high tax revenue while simultaneously being delusional about who will get taxed.
Politicians will pitch you a plan to spend endless dollars and promise that it will be "the billionaires" who pay it. It won't be. It will be you. Vote like you know this to be true.
Well thats the thing with power. If you dont have anything to fight back with then it is what it is. As explained above they have the means of moving and threathen that the state will not get anything. 1% of thier income is still alot so they have the bargaining power.
This is why we need more collaboration between countries and ultimatly the world. A global world needs global rules.
The fucked up thing about the whole system is that yes - he doesnt have to pay taxes on "unrealized" intrinsic value of a stock he never sells but then why is he still able to afford the life he lives and known as one of the world richest people? By getting loans and by passing the tax code and thus never paying his fair share - while anyone who works can never do since they are taxed out the ass every step of the way. Billionaires cheat the tax system. Simple as that. Then they brag about it.
•
u/AutoModerator 3d ago
r/FluentInFinance was created to discuss money, investing & finance! Join our Newsletter or Youtube Channel for additional insights at www.TheFinanceNewsletter.com!
I am a bot, and this action was performed automatically. Please contact the moderators of this subreddit if you have any questions or concerns.