It is with a heavy heart that we must tell you America's richest continue to pay not quite as much tax as you do The leak of US federal tax returns filed by the world's richest tycoons sent shock waves this week. To put it simply, the headlines stemming from the ProPublica report appear damning. According to the leaked documents the non-profit saw, in 2007 and 2011, Jeff Bezos, today the world's richest person, didn't pay a thing in …
> are Trump's super secret tax records included?
They aren't, and I'd submit that doesn't even matter at this point, because Trump is under investigation for tax fraud and tax evasion. Criminal proceedings are under way.
What's interesting is how little Jeff Bezos, Elon Musk, Bill Gates, Carl Icahn and the like pay in federal taxes. As in zero.
Bezos' lawyers and accountants finessed his tax returns so well, they made him qualify for child tax credit. Yes, you read that right: Bezos received money back from the IRS: In 2011, Bezos reported so little income that he qualified for — and claimed — a $4,000 child tax credit.
There are many possible solutions to the problem, but none will happen.
- A wealth tax, 1% per year on assets over $100 million.
- Ban share buybacks and tax companies that hold too much cash. That will force them to spend it or payout dividends, and then tax dividend income as regular income, no special breaks.
- Fully tax all capital gains as income after some small lifetime maximum has been reached. The only exception would be for investing directly in a company, not when investing in the secondary market
The fixes are obvious and simple:
Tax wealth above $10m.
Capital gains are income. Tax them as income. Allow an exclusion for the sale of a primary residence up to the median home value in a given market, no other loopholes.
Charge sales tax on stonk transactions.
Corporations want to pretend they're the same as humans, charge them the same tax rates as humans. No separate corporate tax rate.
Uncap the social security tax, and charge it on all income, earned and unearned.
And for f**k's sake, stop being fatalistic about accomplishing these things! They absolutely CAN be done. Stop voting for Rethuglicans. Go vote in the Democratic primaries, and vote for progressives, not center-right candidates.
(And for those of you in the UK, translate all of that into whatever your tax laws are, you've got the same problems with wealth inequality and right wing government that we do. Go fix it.)
A big factor in the crazy real estate prices in many countries is the stupidly low interest rates. We've had almost free money for over a decade. They should have been normalizing rates long ago but governments everywhere are afraid of slowing down the economy, and as a consequence not being re-elected.
The low rates are also a big reason behind the crazy stock markets. You can't make money elsewhere because the rates are so low, so people turn to the stock markets. Even people that shouldn't be in stocks. This leads to the stock markets going up because the stock markets are going up, not because there is any real basis justifying the prices.
The house prices in London are so high because there are so many empty properties. They're empty because the houses and apartments have been bought by corporations registered in tax havens as investments. https://alexcartoon.s3.amazonaws.com/6220_31102013.gif
Fixes to complicated problems are rarely "simple and obvious", except to people who are rather simple themselves.
Setting a wealth tax at any fixed number, whether it's $10M or anything else, is simply stupid. You need to index for inflation at the very least. The large cost-of-living differences across the US are also a critical consideration.
Taxing capital gains at the ordinary income rate would be hugely punishing to the middle class, whose retirement savings are largely tied up in 401(k) accounts and real property. You'd devastate those members of the middle class who have tried to do the right thing and save for their later years.
Are "stonk transactions" supposed to be "stock transactions"? Those are mostly interstate so sales tax wouldn't apply anyway. I really don't know what you're hoping to accomplish with this one.
Corporate income tax is a sop to people who don't understand taxation. Corporations have all sorts of avenues for burying income, and the larger they are, the better they are at it. Corporate income tax punishes small businesses disproportionately; they're regressive. There are better ways to remedy the corporate-wealth problem, such as amending the tax law to remove the buyback loophole.
FICA (the "social security tax") should be made progressive, or at the very least flat. Agreed on that one. The cap on it is purely regressive.
I'm progressive. I believe real income tax rates are too low, and the Federal income tax is overall regressive. But most of the fixes (FICA aside) are neither simple nor obvious.
And, to be honest, I'd rather expend political capital on problems I think are more pressing. In the US economic realm, that would include access to health care and basic needs, sufficient retirement income for those in the lower and lower-middle brackets, student-loan debt and the cost of education, and so on. Outside economic security it would be things like police violence, incarceration, the surveillance state, and excessive police powers being handed to various agencies under the DHS.
If you're worth over 10million then we should freeze, sieze, liquidate, & redistribute your money to everyone else that pays proper taxes. Then we put you in public stocks with a sign around your neck "Rich arsehole didn't pay taxes", place a basket of foam pool noodles beside you so folks can club you to work out their anger over the fact that said rich arsehole made the world worse for everyone.
Finally, after about a year of public beatings & humiliation, we'll move you into a cardboard box under a bridge to live among the people that You left destitute while you climbed the mountain of their dead to reach your lofty monetary heights.
*Deep breath*
Damn my fantasies of socialism & karmic retribution.
Not necessarily. That's what accountants get paid to do, plus there are always third party countries (say Singapore) that provide a cover for both ends and don't care much about what happens.
One unavoidable thing about being very, very rich is that it opens up a lot of doors, especially when one starts opening up that very big checkbook...
That claim has been made since the '70s. It is rubbish. Sure, a few high-profile pop stars will move abroad but that is no loss - particularly with the modern media environment. Most really rich people want to live in thriving, interesting, big countries and cities. Of course, you have to make sure that if they live here they can't somehow have their assets taxed in the Cayman Islands.
I think everyone expected the rich to be screwing us all over. But I think the surprise is in by just how much their screwing us over.
Claiming a tax credit when your a multi-billionaire? He obviously found a legal way to do it, but that is a seriously unethical thing to do.
Maybe we should start going after the tax accountants? Make them sign something that says that they will only act ethically in their dealings and with prison time for breaches. I bet the rich would end up paying more in tax, if the people doing their returns feared going to prison for fiddling the expenses too much... Just a dream though, nothing will change...
they will only act ethically in their dealings
In cases like this, they are acting ethically. They're 1) following the law, and 2) observing a fiduciary duty to do so in the way that best benefits their clients. That's precisely how their ethical responsibilities are defined by their professional organizations.
If I decide to give $X to, say, Planned Parenthood, and my accountant decides not to claim that deduction on my taxes1 because he opposes Planned Parenthood, that's not ethical. If I give $X to a 501(c)(3) that advocates slavery and white power, my accountant would still be ethically obliged to claim that deduction – the morality of supporting that organization is irrelevant.
Professional ethics are not morals, and they're not about what is fair or just. They're about following the rules that a society has decided ought to apply when exercising a professional function. Morality must be a consideration in trying to develop a code of professional ethics, and there are situations where morality calls for violating ethics. But following both the law and professional requirements such as fiduciary duty is ethical; you can't (tenably) penalize it as unethical.
The problem isn't accountants. It's the law.
1Purely hypothetical. I do my own tax return, and since the Trump-era change to the personal deduction my wife and I haven't had enough in itemized deductions to beat the personal deduction, so our charitable contributions are taxed.
So these people paid lower federal income tax than their wealth increase would cost them had it been income.
Seems almost like if you take oranges and compare them to apples and get the result of banana that you still dont say what this has to do with the price of fish.
Good on the reg for saying-
These tax rates are less than the 37 to 39 per cent top income tax rate normal people pay in America, though they are not unexpected: much of the super-rich's wealth is tied up in stocks, property, and other securities that are only taxed when sold, and so when it comes to declaring actual annual income, there isn't much to show, relatively speaking, hence the sub-30-per-cent figures. Some years, these zillionaires thus declare no income at all.
"Buffett paid total taxes of $23.7m on income of $125m, or a 19 per cent tax rate. He once said he probably pays less tax than his secretary."
I am sure if the secretary had to pay $23.7m (s)he wouldnt consider it less (I am guessing). But this is probably why he hired a secretary, has (s)he?
I am sure if the secretary had to pay $23.7m (s)he wouldnt consider it less (I am guessing). But this is probably why he hired a secretary, has (s)he?
I suspect that the 19% was less than the secretary paid, not the absolute value.
But you knew that, you were just being deliberately obtuse.
When I was self employed I used to put 50% of my invoice value into an account specifically to pay tax - and that was about right (I got a small bonus each year when my tax bill was confirmed).
I'm now employed, and so my income has already been taxed before I see it, but I still pay >30% on what I see - and I see a lot less income than the zillionaires mentioned, and don't have a large "wealth increase" to use as collateral either.
@John Robson
"I suspect that the 19% was less than the secretary paid, not the absolute value."
Of course it was, but this is where the question of how much needs to be taken must be asked. Instead of 'he has more so rob him' surely we should look at how much is being taken off us to be squandered by people who think they can spend it better than us.
But I am sure if they measure your wealth, say you own a house, and the value has gone up even though its not cashed in you would be surely miffed to be robbed for it. For those complaining about wealth needing taxing surely they would then be all for giving these people money when their wealth reduces? Of course not.
"Instead of 'he has more so rob him' surely we should look at how much is being taken off us to be squandered by people who think they can spend it better than us."
So you're advocating for flat taxation?
There are ~30 million people employed in the UK, and the government pulls in about £195 billion in income tax with a further £143 billion in NI.
So that's a flat rate of £11k each.
You can afford that, I can afford that... but for anyone who works part time (ONS median wage £11,234 ) that would leave them with a couple of hundred quid a year.
The concept of progressive taxation is very well established, but is being deliberately bypassed by these individuals, and their individual contributions should be an actually significant chunk of change for the treasury.
And your claim that you could spend the money better is rather laughable. How much of the road network are you going to pay for? how much health service, fire service, police,...
Yes, I'm sure there are parts of the government budget we would all think can and should be trimmed, but that's a completely different question to that of how they raise money to spend on society.
Noone is proposing a wealth tax that would require people to liquidate their primary residence - but when your wealth increase is measured in millions of pounds a year then some proportion of that really ought to be recognised as taxable.
Note that there is already a tax free income band - and the same would likely apply to any tax on gains in wealth, though given the way wealth is accumulated there is a good chance that the vast majority of people would end up in this band.
@John Robson
"So you're advocating for flat taxation?"
I would go for a flatter % tax but since the article was about wealth growth vs income tax (apples and oranges) I decided to point out the difference in absolute numbers paid in tax. A flax tax excluding minimum wage (so no deductions) would probably bring more and lower the overall rate as there are less loopholes and costs of calculating but as it hits the majority of people they dont want to pay too much.
"And your claim that you could spend the money better is rather laughable"
Now isnt that just an advocate for theft. You dont think I can spend my money better than some jobsworth paper pusher creating a fifedom? The soviet union did not work, government is not thrifty with other peoples money. Given 100% taxation they would still manage to spend more.
"Noone is proposing a wealth tax that would require people to liquidate their primary residence - but when your wealth increase is measured in millions of pounds a year then some proportion of that really ought to be recognised as taxable."
Nope, hell no, god no, and proposing a wealth tax is about liquidating their assets. Assuming you own a house, it went up in value for no effort on your part. So your wealth went up. Your income might have fallen as you lost your job or took a pay cut on furlough, yet your wealth goes up. And bad news for you bud, if you are in the developed world you are the rich!
"I would go for a flatter % tax "
So basically you don't think poor people should be able to eat.
The difference between getting ten grand on top of a hundred others is negligible in terms of spending power (and here I'm talking about being able to afford food, clothes and a roof (not necessarily a six bed mansion, but a roof).
The difference in getting ten grand on just another ten grand is huge.
It is absolutely right that as a wealthy member of society I should pay more tax (proportionately) than those less well off than me.
What is not right is that as you go further and further up that scale the tax paid goes back down.
I am all for making a simpler tax system, but it must remain progressive.
@John Robson
"So basically you don't think poor people should be able to eat."
Not sure where you manage to come to such a stupid conclusion. That has no relation to what I said.
"The difference in getting ten grand on just another ten grand is huge."
the % symbol means percentage. I think you may have misread my comment. Might explain the above confusion too.
"I am all for making a simpler tax system, but it must remain progressive."
I get the feeling we are closer in agreement than you think. Double check my comment, I am guessing there is a little confusion/misreading.
The problem behind the problem is the human condition. People are going to cheat; plain and simple. Worse, the problem gets meta, and people become good at cheating at cheating (think cheating to get away with cheating). And because cheating can get meta, some lowlifes can get pretty ingenious about cheating, using as many meta levels as needed to get away with it.
Sometimes, that's the problem with "Keep It Simple, Stupid." Simple sometimes isn't very adaptable. Thus why most gas-guzzling cars don't use Wenkel engines. Wenkels are powerful and simple as far as gasoline engines go, but they're not the most efficient in an age where that is increasingly an issue. Similarly, people seem to find all sorts of ways around tax codes (and at a meta level, getting the tax codes changed in their favor, too).
If we want to solve the problem long-term, we're probably going to need a better breed of human first.
Or more importantly a form of government that doesn't rely on backhanders through elaborate tax loopholes.
If tax systems were written sensibly I am convinced that:
- More people in, or close to, poverty would be on zero (or better still a negative) tax rate
- Most of the people "in the middle" wouldn't see a significant effect
- Those who rake in more money than any person can possibly spend would pay more, still leaving them with more money than any person can possibly spend
- The treasury would gather more income
Simple might not be adaptable - but in terms of "You saw this much income this year, so we are taxing it at this rate..." that's not necessarily a bad thing.
"With enough influence, everything is fungible."
And that's what needs to be stopped - Do I see an easy and obvious solution? No, but then I am neither a tax accountant, nor and economist.
Do I think that a solution exists? I am convinced of it.
Do I think said solution would be implemented? I am convinced it would not, the obscenely wealthy pay for election campaigns in return for these loopholes (and direct contracts nowadays).
"Do I think that a solution exists? I am convinced of it."
I'm convinced there isn't. Because like I said, with enough influence and enough meta, everything is fungible. This includes the limits of what is fungible.
Reagan once said the ten words no one wants to hear are, "I'm from the government, and I'm here to help you." I can think of seven that are even worse for civilization in general: "I can make it all go away..."
After pondering for quite some time, I finally closed my Amazon account a couple of years ago. I discovered there were alternatives out there for what they do and decided to support these instead. I don’t dispute that Amazon are good at what they do and have succeeded at sucking people in thinking there is no alternative. However, unless more folk choose to do the same I can’t see why Amazon/Bezos have any incentive to change their business practices.
where Is the amazon competitor.?
BangGood, Wish etc are good but not next day.
Argos has a very limited range compared to get anything & everything from Amazon tonight or tomorrow.
I'd jump to an amazon competitor in heart beat but there needs to be a credible alternative.
@tip pc
"I'd jump to an amazon competitor in heart beat but there needs to be a credible alternative."
Is it not more of a supermarket/independents thing? I can get stuff off amazon (or near to) elsewhere, but in amazon it puts them in one place, I can easily buy second hand if its not important and the delivery options might cost more/not be as fast.
But the more such issues moving away from amazon only serve to highlight what amazon brings to the table and how good they are at providing.
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