Tax avoidance by the obscenely wealthy

[Oexmelin]

Dossier on ProPublica.

To nobody's great surprise, the obscenely wealthy avoid as much tax as they can; in some cases, paying no income tax for a few years.

ProPublica has gained access to IRS files to assess effective tax rates for high profile multi billionaires.

Warren Buffet: 0.10%
Bezos: 0,98%
Bloomberg: 1.30%
Musk: 3.27%

Bezos claimed a 4,000$ tax credit for his kids, intended for people with low revenues.

https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax

[Habbaku]

I do not disagree that the wealthy need to pay more tax and bear the highest burden of all taxpayers, but ProPublica seeming to not understand why billionaires aren't paying taxes on unrealized gains is...weird. I am still reading. I am hopeful that they are not promoting some sort of tax on unrealized wealth growth.

[grumbler]

That income tax doesn't tax non-income wealth growth is not news.  It isn't even supposed to.

[Oexmelin]

No. They use it to illustrate why personal tax rates are an insufficient tool to tax fairly. They explain how unrealized wealth is used to leverage a ton of borrowing at favorable rates, which in turn is used to squeeze more favorable terms of taxation.

In the end, the level of wealth of these people is just so high as to be incomprehensible. Whether the wealth is unrealized or not, it affords people to live in conditions of material luxury which citizens use to assess comfort and, to some degree, fairness.

[Valmy]

Maybe rich people should pay a consumption tax of some kind. I don't know.

I don't really like the idea of a wealth tax as it seems difficult to manage and easy to game, just from a practical standpoint.

[Admiral Yi]

I am hopeful that they are not promoting some sort of tax on unrealized wealth growth.

That's what Elizabeth Warren wants to do.

[Tamas]

With our society seemingly moving toward a wealth/asset-based neo-feudalistic setup, the fair thing would be to tax wealth (assets) primarily. But I don't expect it to happen.

[Valmy]

With our society seemingly moving toward a wealth/asset-based neo-feudalistic setup, the fair thing would be to tax wealth (assets) primarily. But I don't expect it to happen.

I am highly skeptical of the feasibility of this. Also it seems to punish people who invest and not those who just blow their money on hookers and yachts. It seems like we should incentivize the former not the later.

Or maybe not. Maybe the yacht and hooker industries could use the shot in the arm.

[Solmyr]

With our society seemingly moving toward a wealth/asset-based neo-feudalistic setup, the fair thing would be to tax wealth (assets) primarily. But I don't expect it to happen.

I am highly skeptical of the feasibility of this. Also it seems to punish people who invest and not those who just blow their money on hookers and yachts. It seems like we should incentivize the former not the later.

Or maybe not. Maybe the yacht and hooker industries could use the shot in the arm.

Hey, giving more money to sex workers is a good thing. At least they will then spend it and put it back into the economy instead of hoarding it.

[Threviel]

Isn't property taxes often a tax on unrealised gains?

[The Minsky Moment]

Isn't property taxes often a tax on unrealised gains?

It depends on how often property assessments are updated.
In the US the federal government does not tax property - that is done at the state level.
Oex article is about federal level taxation.

[The Minsky Moment]

I do not disagree that the wealthy need to pay more tax and bear the highest burden of all taxpayers, but ProPublica seeming to not understand why billionaires aren't paying taxes on unrealized gains is...weird. I am still reading. I am hopeful that they are not promoting some sort of tax on unrealized wealth growth.

I read it as surprised as in shocked in find gambling at Rick's place.

And yes their clear implication to have a wealth/net worth tax.

[crazy canuck]

With our society seemingly moving toward a wealth/asset-based neo-feudalistic setup, the fair thing would be to tax wealth (assets) primarily. But I don't expect it to happen.

I am highly skeptical of the feasibility of this. Also it seems to punish people who invest and not those who just blow their money on hookers and yachts. It seems like we should incentivize the former not the later.

Or maybe not. Maybe the yacht and hooker industries could use the shot in the arm.

Why would you want to create an incentive for wealth to be concentrated rather than spent?

[Valmy]

With our society seemingly moving toward a wealth/asset-based neo-feudalistic setup, the fair thing would be to tax wealth (assets) primarily. But I don't expect it to happen.

I am highly skeptical of the feasibility of this. Also it seems to punish people who invest and not those who just blow their money on hookers and yachts. It seems like we should incentivize the former not the later.

Or maybe not. Maybe the yacht and hooker industries could use the shot in the arm.

Why would you want to create an incentive for wealth to be concentrated rather than spent?

Because investing is generally better than wild consumption. Or at least I think that is true. It might not be true and maybe we do want to incentivize blowing your wealth.

[Admiral Yi]

I've said before I would have no problem with a wealth tax if it started at a low enough level of wealth.

What I do object to is agitprop from advocates of a wealth tax.  For example characterizing the fact that unrealized capital gains are currently untaxed as "tax avoidance."  I have unrealiized capital gains.  I am not a tax avoider.  Fuck you Pro Publica.