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Rich People Don’t Pay Much In Taxes, A Stunned ProPublica Finds
Earlier this year, in "The Wealth Tax And Our Shared Insanity," I suggested that anyone worth $1 billion or more who hasn't figured out how to avoid paying most taxes has "failed as a rich person."
Although that assessment was meant to elicit a chuckle, it wasn't a joke. It’s mostly true. If you're rich and you're paying taxes, you're derelict in your duties as a rich person. That, even as you make good on your obligation to society, where you, like everyone else, enjoy all manner of perks os
My only real question as taxing companies and the wealthy is not even attempted and as you say it’s from a funding perspective irrelevant… why not just eliminate federal income taxes? Why should anyone owe the government a share of their survival wages. I mean if you’re making over $100k maybe you owe something but the first $100-150K of income does not need to be taxed as heavily as it is. State taxes I understand, they after all cannot issue currency, but federal taxes on someone making $35k a year are pretty insane at this point.
Given the MMT reality and our feudal late stage capitalism capture of most wealth by a tiny fraction of people, I was thinking along the same lines. Do we really need taxes at all?
The government might be able to maintain expenditures by printing $$$ and it’s not clear it’ll be inflationary in an environment where the wealth is mostly hoovered up (i.e. not spent and thus “neutered”)
they pay little in taxes b/c its an INCOME tax. once one has a small fiefdom, all personal expenses flow through ‘the business’, and just like in Cheers, sam malone wins a bet with the rich guy, one year’s wages: $1.
good article towards a flat tax. 3% of every $ that passes to you goes the feds. but as you mention, the US doesnt ‘need’ tax money to run its budget.
the people who pay the most are the tax donkeys in the middle….100k to about 400k see significant sums go to taxes. once above that addl income is protected on more of a long term basis and may never get taxed.
So, if the value of my house goes up $ 10,000, I shouldn’t pay taxes on it (remembering I received no additional cash to use to pay taxes) but if the stock of the company one of the super-rich founded goes up, they should pay tax. Where do we draw the line? It’s hard to feel sorry for Elon Musk, but where is he supposed to get the cash to pay taxes on the increase in value of his Tesla shares? It’s like the ’80’s good news-bad news joke: “I got them down $ 500 million on the price, but they want $ 10 million in cash”
You might be able to find a better analogy than that one. If my house goes up $10,000 in value it gets assessed higher by the property appraiser and then yes, my property taxes do go up the next year.
No doubt about that, but the mil rate probably isn’t too onerous. What kind of wealth or unrealized capital gains rates are being contemplated?
property tax gets updated every year based on assessed value, so you do pay for house value increase, at least in my neck of the woods it happens
Seems like a VAT is the answer, but how to do it and preserve a decent level of progressivity?
Can’t. Families with higher income spend a smaller portion of their income, so VAT will be less of their income than the percentage for lower income families.
Buffett said that after his death, “99.5% of what I have will go to some combination of taxes and disbursements to various philanthropies. Huge dynastic wealth is not desirable for our society,” he remarked.
Of course.
OTOH, huge wealth that allows you to skew the capitalist creative destructive machine during your life is not very desirable either. I mean, I don’t know for sure what Buffett kids are up to, but my bet is they didn’t have to worry about much even with dad giving away 50% of his wealth while alive and 99.5% when he dies. And Buffett grandkids were also well looked after, I would bet… I doubt college debt was a problem for them…
FWIW, this is not anti-Buffett or anti-rich people. I would vote for guys like Buffett or Bezos etc. if they were running for office.
Yes, running a business and running government are different but I imagine there’s a fair overlap in the skillset, notably when it comes to a willingness to experiment to improve efficiency and quality of outcomes for consumers/users/citizens.
To paraphrase the Washington post, the only interesting outcome of the article will be how much jail time the data leaker will get
The heart of the problem here is that the ultra-rich seem to have made money when they get richer as their holdings get more valuable. But the wealth isn’t money until the shares are sold. Buffett doesn’t take a huge salary like Musk. He doesn’t need to — he lives quietly in Omaha. The IRS only gets to tax income. It’s not clear to me that a “wealth” tax would be legal under the Constitution (remember we had to pass a Constitutional Amendment to even permit an income tax).
The very rich can get very wealthy without cash income but the folks H labeled as “technically rich” have a tougher time. I looked into those mechanisms the rich use and avoiding all taxes can, in fact, get very expensive. For US corporations to avoid US tax on overseas earnings they have to leave the money overseas. That’s no fun. For citizens, much the same thing is true. You can shelter a lot of increased wealth but you can’t make it into actual money without creating at least some prospect of a taxable event. My net worth has increased every year for the last 40 years, starting at essentially zero. Only a small part of that increase has been taxable so for the last decade with just a simple effort my average federal tax has ranged from 7.5-8.5%. Half of my increased wealth, although quite real, is tax exempt. Anyone can do what I have done but one thing needs to be clear, like with Buffett, although I have avoided a bunch of taxes, it’s my charities and my child who will end up with most of the money.
“Rather, it was news because of the lengths he (Trump) went to to avoid releasing his returns.”
I suspect and hope there will be more to it than the measly $750 he paid in taxes as a basis for why he refused to release his taxes…as he said to Hillary in their last 2016 debate paying little to no tax would mean “I’m smart.”
Money laundering for Russian crime bosses (oligarchs) perhaps … ?
…hopefully we’ll find out…