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America as two countries… literally?

mandown

mandown

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Pesqueeb said:
www.jacobinmag.com

The Political Establishment Doesn’t Want You to Know the Economy Is Rigged

ProPublica’s bombshell story about the financial malfeasance of the richest Americans has stirred bipartisan outrage in Washington. Unfortunately, it's mainly outraged against the whistleblower who exposed the story.
www.jacobinmag.com www.jacobinmag.com
Click to expand...
It links to this article which is stepping over the point to make its “bombshell tax exposé” point.

www.propublica.org

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax

ProPublica has obtained a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing.
www.propublica.org www.propublica.org

First:
“…it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most.”

Stop insulting readers. Nobody believed that myth. Ever.

Second:
“ America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.”

This isn’t a tax avoidance strategy. Holding an volatile asset while it is appreciating is not a taxable event… until it is sold. Yeah. You gotta convert that shit to cash. Those were the rules created by our primitive forefathers (back in the good ol’ days) who couldn’t think far beyond the world of cash valuation. You know what else isn’t happening? When the economy turns and the asset value drops then that doesn’t equate to a tax deduction either (assuming no sale). The incentive is to maintain the asset.

Also, “ordinary” people have 401k plans. They aren’t taxed on the growth of the assets. Hell, even outside of 401k plans, you can buy amazon stock and hold it, and as long as it goes up in value, then you are increasing your wealth without paying taxes. So if you make enough money to invest in anything (including buying a house) then anyone making less should hate your elitist ass equally, and they probably do.

Fuck these spoon feeding journalist assholes giving themselves a Dutch rudder for exposing the secret. What next? Drinking more water makes you pee more frequently?

Now should the game be restructured and the rules changed? Maybe. But nobody will be surprised when wealthy folks figure a way around the new rules.


(fuck me for waking into this tweetbait, as I can already see/hear it)
 
kidwoo

kidwoo

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Sounds like someone's upset someone updated their personal capital (while it grows exponentially, and definitely tax free)

didn't realize W bush was a forefather when he wrote in our current capital gains rate in the magna carta


You left out the part where he makes, what is it.....80k a year from amazon? Now THAT is a tax avoidance strategy because all the other shit you're griping about really does result in a lower effective tax rate. He ain't doing that shit for no reason.

with you on the naivete of thinking any of this is surprising......

I think the entire point is just to illustrate two concurrent systems of wealth accumulation and taxation. One is definitely better than the other and you and I don't have access to it in the same ways.
 
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Adventurous

Adventurous

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mandown said:
It links to this article which is stepping over the point to make its “bombshell tax exposé” point.

www.propublica.org

The Secret IRS Files: Trove of Never-Before-Seen Records Reveal How the Wealthiest Avoid Income Tax

ProPublica has obtained a vast cache of IRS information showing how billionaires like Jeff Bezos, Elon Musk and Warren Buffett pay little in income tax compared to their massive wealth — sometimes, even nothing.
www.propublica.org www.propublica.org

First:
“…it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most.”

Stop insulting readers. Nobody believed that myth. Ever.

Second:
“ America’s billionaires avail themselves of tax-avoidance strategies beyond the reach of ordinary people. Their wealth derives from the skyrocketing value of their assets, like stock and property. Those gains are not defined by U.S. laws as taxable income unless and until the billionaires sell.”

This isn’t a tax avoidance strategy. Holding an volatile asset while it is appreciating is not a taxable event… until it is sold. Yeah. You gotta convert that shit to cash. Those were the rules created by our primitive forefathers (back in the good ol’ days) who couldn’t think far beyond the world of cash valuation. You know what else isn’t happening? When the economy turns and the asset value drops then that doesn’t equate to a tax deduction either (assuming no sale). The incentive is to maintain the asset.

Also, “ordinary” people have 401k plans. They aren’t taxed on the growth of the assets. Hell, even outside of 401k plans, you can buy amazon stock and hold it, and as long as it goes up in value, then you are increasing your wealth without paying taxes. So if you make enough money to invest in anything (including buying a house) then anyone making less should hate your elitist ass equally, and they probably do.

Fuck these spoon feeding journalist assholes giving themselves a Dutch rudder for exposing the secret. What next? Drinking more water makes you pee more frequently?

Now should the game be restructured and the rules changed? Maybe. But nobody will be surprised when wealthy folks figure a way around the new rules.


(fuck me for waking into this tweetbait, as I can already see/hear it)
Click to expand...
I'll bite. It's not unreasonable to challenge the way they parsed the data, but do you agree that it is emblematic of the larger issue that the tax code doesn't work for the ultra-wealthy?

First:

"The most recent poll on this I can find is an April 2018 Gallup survey which had 62 percent of respondents saying the wealthy do not pay their fair share in taxes, a number that’s been consistently in the high 50s or low 60s in the 21st century." (https://www.google.com/amp/s/www.vox.com/platform/amp/policy-and-politics/2019/1/8/18171932/tax-public-opinion-alexandria-ocasio-cortez)

That would lead me to believe that 38% of Americans believe that the rich either pay enough, or, that they pay too much. Additionally, one of our major political parties has fully embraced the idea and it was a major premise behind the 2017 tax cuts, so I'd contend that it's not a myth to a not so insignificant portion of the populace.

Second:

I agree that calculating a "real tax rate" based on their net worth gains is misleading at first glance, at least seen through the lens of how most of us are taxed. But, even if you disregard ProPublica's calculated tax rate and look at their income tax rate, it's 18.9%, 23%, 3%, and 29.9%, which is significantly less than the supposed top tier rates. And you are correct that per our current tax code, we have no mechanism for taxing their net worth gains until those gains are realized. But I don't think using a 401k as a comparison achieves what you think it does. For the majority of people, that money will be drawn upon and subjected to taxes at some point in our lives, whereas the super rich don't need to resort to such pedestrian methods to maintain their lifestyle.

But there in lies the larger problem, and this was my takeaway from this article and the myriad of others like it: the system has been molded by the super rich for their benefit, to the detriment of a democratic society. They are literally playing a different game with a different set of rules. Generational wealth of this magnitude deprives our society of many things, and allowing it to perpetuate will do little except entrench a minority rule that subverts the will of the people.

As to what addressing that looks like, I can't profess to have the answers. A "wealth tax" as proposed by someone like Elizabeth Warren would be a reasonable place to start (I'd be curious to see what would happen if we replaced all taxes with a tax based on one's net worth), addressing the idea of taxing income at a different rate as capital gains is another, but we need to do something to challenge the status quo. It's pretty clear to everyone the system in place now isn't working.

EDIT:

I like this quote from a Jacobin article (https://www.jacobinmag.com/2021/06/ips-institute-policy-studies-report-silver-spoon-oligarchs)

"This system, of course, wasn’t built in a vacuum. As the report documents, America’s dynastic superrich have played a very active role in tilting the playing field in their own favor: pouring untold sums into lobbying efforts, political campaigns, weaponized philanthropy enterprises, and billionaire-friendly think tanks to help entrench their positions atop the country’s gilded ruling class.

It’s yet another reminder that the foundational narrative of American capitalism — that of a free and meritocratic order that rewards hard work, social value, and innovation — is essentially a myth. Wealth is power, and, in an unequal society, the wealthy minority has vastly more power than the rest of us to rig the rules in its favor — and ultimately perpetuate itself across generations."
 
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mandown

mandown

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Adventurous said:
I'll bite. It's not unreasonable to challenge the way they parsed the data, but do you agree that it is emblematic of the larger issue that the tax code doesn't work for the ultra-wealthy?
Click to expand...
You’ve got fair points in there. I certainly agree that the existing income tax code appears to have flaws that can be exploited once reaching a certain level of wealth.

There was a decent article on this issue yesterday stating one issue is transfer of wealth within the family between generations. The asset values grow under generation 1, then get transferred to generation 2 in a beneficial way. Taxing that event is probably part of a bigger solution.

A wealth tax isn’t unlike a real estate tax. The trick is determining how big does your balance sheet need to be to get taxed, and what assets are included. What if Jeff Bezos doesn’t have an investment account that says $1 Billion on the statement? What if he’s on got various legal entities he controls or is a shareholder in, and the valuation of those companies contributes to his wealth? Have those companies already been taxed? Will designing a structure to capture his wealth have unintended consequences for other business owners? I could ask many more hypotheticals, but the point is that designing a tax for the ultra wealthy is tricky. They are playing a different game than other taxpayers.

I have no doubt that once a tax structure is established, that they’ll have the ways and means to eventually avoid that too. I’m not saying we shouldn’t try. I’m just pessimistic about the results. We do live in a world where people created a virtual currency to engage in illegal transactions without tax consequences.
 
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Westy

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Adventurous said:
I'll bite. It's not unreasonable to challenge the way they parsed the data, but do you agree that it is emblematic of the larger issue that the tax code doesn't work for the ultra-wealthy?

First:

"The most recent poll on this I can find is an April 2018 Gallup survey which had 62 percent of respondents saying the wealthy do not pay their fair share in taxes, a number that’s been consistently in the high 50s or low 60s in the 21st century." (https://www.google.com/amp/s/www.vox.com/platform/amp/policy-and-politics/2019/1/8/18171932/tax-public-opinion-alexandria-ocasio-cortez)

That would lead me to believe that 38% of Americans believe that the rich either pay enough, or, that they pay too much. Additionally, one of our major political parties has fully embraced the idea and it was a major premise behind the 2017 tax cuts, so I'd contend that it's not a myth to a not so insignificant portion of the populace.

Second:

I agree that calculating a "real tax rate" based on their net worth gains is misleading at first glance, at least seen through the lens of how most of us are taxed. But, even if you disregard ProPublica's calculated tax rate and look at their income tax rate, it's 18.9%, 23%, 3%, and 29.9%, which is significantly less than the supposed top tier rates. And you are correct that per our current tax code, we have no mechanism for taxing their net worth gains until those gains are realized. But I don't think using a 401k as a comparison achieves what you think it does. For the majority of people, that money will be drawn upon and subjected to taxes at some point in our lives, whereas the super rich don't need to resort to such pedestrian methods to maintain their lifestyle.

But there in lies the larger problem, and this was my takeaway from this article and the myriad of others like it: the system has been molded by the super rich for their benefit, to the detriment of a democratic society. They are literally playing a different game with a different set of rules. Generational wealth of this magnitude deprives our society of many things, and allowing it to perpetuate will do little except entrench a minority rule that subverts the will of the people.

As to what addressing that looks like, I can't profess to have the answers. A "wealth tax" as proposed by someone like Elizabeth Warren would be a reasonable place to start (I'd be curious to see what would happen if we replaced all taxes with a tax based on one's net worth), addressing the idea of taxing income at a different rate as capital gains is another, but we need to do something to challenge the status quo. It's pretty clear to everyone the system in place now isn't working.

EDIT:

I like this quote from a Jacobin article (https://www.jacobinmag.com/2021/06/ips-institute-policy-studies-report-silver-spoon-oligarchs)

"This system, of course, wasn’t built in a vacuum. As the report documents, America’s dynastic superrich have played a very active role in tilting the playing field in their own favor: pouring untold sums into lobbying efforts, political campaigns, weaponized philanthropy enterprises, and billionaire-friendly think tanks to help entrench their positions atop the country’s gilded ruling class.

It’s yet another reminder that the foundational narrative of American capitalism — that of a free and meritocratic order that rewards hard work, social value, and innovation — is essentially a myth. Wealth is power, and, in an unequal society, the wealthy minority has vastly more power than the rest of us to rig the rules in its favor — and ultimately perpetuate itself across generations."
Click to expand...

I think I would just like to add that the wealthy don't make money by punching into a clock and paying income taxes on a salary. They make money with capitol gains which not only is 15% and still has a shit ton of loop holes. There are a lot of people who also want to get rid of capitol gains under the false argument that since corporations or whatever entity the gains come from already pay taxes and the capitol gains is a double tax.

So pretty much anyone who generates income by working pays a higher tax rate than someone who generates income from being rich.
 
mandown

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Westy said:
I think I would just like to add that the wealthy don't make money by punching into a clock and paying income taxes on a salary. They make money with capitol gains which not only is 15% and still has a shit ton of loop holes.
Click to expand...
I think many people conflate the ideas of income and wealth. These are not the same and the mechanisms for building them are different. At a certain point, a person has all the income they need to sustain the daily activities of life. After that, the interest is in having assets with a value in the future, which may yield income as a byproduct. Both things are measured in dollars, so they can be easily confused.
 
Adventurous

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mandown said:
I think many people conflate the ideas of income and wealth. These are not the same and the mechanisms for building them are different. At a certain point, a person has all the income they need to sustain the daily activities of life. After that, the interest is in having assets with a value in the future, which may yield income as a byproduct. Both things are measured in dollars, so they can be easily confused.
Click to expand...
And income is a heck of a lot easier to understand and compute than wealth, which is part of why levying a wealth tax would be so challenging in practice. Calculating wealth based on stocks held is straightforward, evaluating the value of property held by a subsidiary of a trust or LLC, not so much. Throw in some international financial tomfoolery and I hate to say that you are probably correct in asserting that they'll dodge it some other way. Not paying taxes is a tale as old as time. It's a game to be won.

The other thing we have to consider is the fact that it's often too complicated or expensive for the IRS to pursue wealthy tax evaders, and it's often advantageous for said tax evaders to evade and pay a penalty than it is to willfully pay in the first place. That the IRS has more or less thrown in the towel chasing the wealthy cause its easier to crack down on the pleebs is pretty messed up.

Accumulation of fortunes like those we see today require disproportionate consumption of public resources, yet there's an inversely disproportionate amount in what's contributed to use those public resources.
 
kidwoo

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"you can't compare the two systems" is not an indictment of pieces like what propbublica put out.

That is literally the point.


Adventurous said:
The other thing we have to consider is the fact that it's often too complicated or expensive for the IRS to pursue wealthy tax evaders, and it's often advantageous for said tax evaders to evade and pay a penalty than it is to willfully pay in the first place. That the IRS has more or less thrown in the towel chasing the wealthy cause its easier to crack down on the pleebs is pretty messed up.
Click to expand...
Mostly this, this, and this.

There have been plenty of retired or off the record IRS peeps just flat out admitting they go after poorer demographics just because it's easier. Seems like getting a few of the bigger evaders a year would be worth the recovered revenue though......
 
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mandown

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Adventurous said:
The other thing we have to consider is the fact that it's often too complicated or expensive for the IRS to pursue wealthy tax evaders, and it's often advantageous for said tax evaders to evade and pay a penalty than it is to willfully pay in the first place. That the IRS has more or less thrown in the towel chasing the wealthy cause its easier to crack down on the pleebs is pretty messed up.
Click to expand...
This is a significant factor. Not only do you have to design a better mousetrap, you need a staff that can comprehend the complex issues and actually catch the rats. This would be like a Navy SEAL or Green Beret team of accountants and tax lawyers.
 
mandown

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SkaredShtles said:
But taxing it seems like it would be difficult. Because if the value a week from now is 30% less, how would they deal with that?

I wonder how do other "civilized" countries deal with capital gains?
Click to expand...
I think that’s the reason we have held on to the idea that you measure it at the time it is converted to cash, and base the gain on the cash you paid to buy in. Heck, what if someone held a stock for years and argued the value of the dollar changed and should be a factor?

Let’s say I bought a share of IBM a long time ago. In 1972 a share of IBM stock was $19.39, and today it is worth $145.95, so is the gain $126.56? What about when it was $215.80 in March of 2013? Was I taxed on the gain then, but getting a deduction after that as the value fell? Now let’s say I used a 1972 dollar to buy the stock, and that would be worth $6.34 in 2021 dollars. So the value of a dollar bill has increased 6.34 times, so does that mean the 1972 purchase price of $19.39 should be adjusted to $122.93 in 2021 dollars, implying I’ve only had a gain of $23.02?

It’s a tangled mess trying to make an accurate “fair” mechanism. At some point arbitrary rules need to come into play just to keep the process from getting out of hand.
 
jonKranked

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mandown said:
This is a significant factor. Not only do you have to design a better mousetrap, you need a staff that can comprehend the complex issues and actually catch the rats. This would be like a Navy SEAL or Green Beret team of accountants and tax lawyers.
Click to expand...
on a tangentially related topic - i saw something interesting the other day in that wage theft, in terms of dollars, is the biggest crime in the nation.
 
Westy

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SkaredShtles said:
But taxing it seems like it would be difficult. Because if the value a week from now is 30% less, how would they deal with that?
Click to expand...

Do what the brokers do, take a chunk when you buy/sell. Will also encourage more long term investing vs day trading bullshit. This could also affect the behavior of corporations as they may be a little more interested in long term value instead of focusing just on how they can increase stock price tomorrow.

Could also just treat the profits for what it is, income. Why does the guy who builds a house get taxed at a higher rate than the guy who buys and sells said house for profit? The idea that a higher tax rate de-incentivizes investment is bullshit, as it only impacts the GAINZ.
 
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Westy

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Washington state has no income tax per state constitution, just sales tax, which is horribly regressive. The poorer you are the higher your tax burden is. Seattle passed a law to tax capital gains over $250K at 1%. Of course there is an immediate legal challenge that it is unconstitutional because capital gains is "income". Will be interesting to see how it is ruled.
 
kidwoo

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Changleen said:

View attachment 165553
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the hard part is convincing someone of these universalities, and to stop focusing on the team jersey they wear

Both the RNC and DNC need to be eliminated

I'm not going to sit here and pretend that all americans believe the same things because we don't, but we sure as shit aren't represented by either right wing party that we have to choose from who just want to pretend the larger issues are the other "side"
 
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kidwoo

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Pesqueeb

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Pesqueeb said:
The "small government" mouth breathers in Nor-cal have been pushing for their own exit for decades. I can remember being a little kid and my dad making fun of "California loonies" pushing this issue when we were up that way for a visit. This was the mid 80's. And Westy is right. Except for the Metro areas, those states are actually really conservative. Multnomah and Lane Counties determine the way Oregon votes. I grew up in what is now Devin Nunes district in the agricultural heart of California's central valley, those people are not hippies. Get over the cascades and Washington is just as conservative. IMO it's incredibly dangerous to even engage these ideas.
Click to expand...
www.theatlantic.com

Modern America’s Most Successful Secessionist Movement

In rural Oregon, voters fed up with their state’s leftward turn have embraced a simple and outlandish idea: What if we were just Idaho?
www.theatlantic.com www.theatlantic.com
 
eric strt6

eric strt6

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Sometimes we forget
When it's not in our face, the struggle of those left behind in this economy. Those outside the meager resources of social services. Those living in shanty towns across America. Living, no existing, in poverty and filth. I spent the day going from here to gleaming skyscrapers and back. It makes me sick to see what our society has become. It is not a happy New Year for them.
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