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We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: hal
Date: June 08, 2021 12:30PM
[www.propublica.org]

In 2007, Jeff Bezos, then a multibillionaire and now the world’s richest man, did not pay a penny in federal income taxes. He achieved the feat again in 2011. In 2018, Tesla founder Elon Musk, the second-richest person in the world, also paid no federal income taxes.

Michael Bloomberg managed to do the same in recent years. Billionaire investor Carl Icahn did it twice. George Soros paid no federal income tax three years in a row.

ProPublica has obtained a vast trove of Internal Revenue Service data on the tax returns of thousands of the nation’s wealthiest people, covering more than 15 years. The data provides an unprecedented look inside the financial lives of America’s titans, including Warren Buffett, Bill Gates, Rupert Murdoch and Mark Zuckerberg. It shows not just their income and taxes, but also their investments, stock trades, gambling winnings and even the results of audits.

Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.

Many Americans live paycheck to paycheck, amassing little wealth and paying the federal government a percentage of their income that rises if they earn more. In recent years, the median American household earned about $70,000 annually and paid 14% in federal taxes. The highest income tax rate, 37%, kicked in this year, for couples, on earnings above $628,300.

The confidential tax records obtained by ProPublica show that the ultrarich effectively sidestep this system.


wow...
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: cbelt3
Date: June 08, 2021 01:20PM
As usual, the reality is not that "rich People cheat". The key is that rich people get their pet congresscritters to establish laws that give them loopholes. THAT is the problem. And THAT will not be fixed.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: GGD
Date: June 08, 2021 01:43PM
Quote
hal
Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.

That's because "unrealized capital gains" are not income, and are not money. They're just theoretical increases or decreases in values of assets based on what someone else might have paid for a small quantity of a similar asset.

If Bezos actually tried to sell all of his Amazon stock at today to get a "realized gain" and actual income and money, do you think he could get the current trading price for all of it, or do you think the price of AMZN (and possibly the entire market) would plummet because there's not enough buyers AND the news that the founder is dumping all of his shares.

I've been saying this for decades whenever people quoted Bill Gates net worth in Microsoft stock, "lets see him try to sell it all and get that amount".

Should the IRS be paying people money when they have "unealized losses" because the market went down during a year and their assets are worth less now?
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Acer
Date: June 08, 2021 02:32PM
If Bezos wants a new yacht or just to pay the light bill, he doesn't sit around moping. He realizes some gains and pays for it. How you run the biggest companies on the planet but somehow not have income defies logic, to put it mildly.



Edited 2 time(s). Last edit at 06/08/2021 02:35PM by Acer.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: GGD
Date: June 08, 2021 03:01PM
Quote
Acer
How you run the biggest companies on the planet but somehow not have income defies logic, to put it mildly.

Steve Jobs salary at Apple was $1.00 per year. If he lived long enough I wonder if he would have qualified for Social Security since he had virtually zero in payroll taxes.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: hal
Date: June 08, 2021 03:22PM
Quote
GGD
Quote
hal
Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most. The IRS records show that the wealthiest can — perfectly legally — pay income taxes that are only a tiny fraction of the hundreds of millions, if not billions, their fortunes grow each year.

That's because "unrealized capital gains" are not income, and are not money. They're just theoretical increases or decreases in values of assets based on what someone else might have paid for a small quantity of a similar asset.

If Bezos actually tried to sell all of his Amazon stock at today to get a "realized gain" and actual income and money, do you think he could get the current trading price for all of it, or do you think the price of AMZN (and possibly the entire market) would plummet because there's not enough buyers AND the news that the founder is dumping all of his shares.

I've been saying this for decades whenever people quoted Bill Gates net worth in Microsoft stock, "lets see him try to sell it all and get that amount".

Should the IRS be paying people money when they have "unealized losses" because the market went down during a year and their assets are worth less now?

unsold stock is hardly worthless - it is collateral - you can borrow BIG TIME on $1B and pay next to nothing for it.

The problem is that these investments will stay locked into some kind of trust and gains may never be realized. This can be addressed.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: neophyte
Date: June 08, 2021 04:06PM
Should the IRS be paying people money when they have "unealized losses" because the market went down during a year and their assets are worth less now?

I could be mistaken, but In effect, IRS laws do just this. The very rich have the same needs as the rest of us: food, clothing, and shelter. They pay for all this just like we do (unless they claim it as a business expense?). So what "income" do they use for these necessities? Not payroll wages subject to income tax. Rather they sell shares of stock or other things of value, especially those whose value went down since purchase. And then claim a capital loss on the lost value, which offsets any capital gains they may have from any other income, and they can carry the loss forward to another tax year. So they pay very little or no income tax.

It is important to distinguish net worth (which is not subject to taxation nor should it be) from net income, which is subject to taxation.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Acer
Date: June 08, 2021 04:40PM
And they have so many assets that even these realized losses have no impact on their daily lives. Trump takes a $100 million loss and poops in a golden toilet every day all the same.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Rick-o
Date: June 08, 2021 06:07PM
Well, how else could Bezo pay for a half billion yacht that needs a support yacht to travel the high seas. He probably couldn't afford it if he paid taxes like the rest of us!

[www.bloomberg.com]

"Bezos’s superyacht, which likely will cost upwards of $500 million to build and have its own support yacht with a helipad, is the latest accessory"



Mr. Lahey: A lot of people, don’t know how to drink. They drink against the grain of the liquor. And when you drink against the grain of the liquor? You lose.

Randy: What the @#$%& are you talking about?
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: GGD
Date: June 08, 2021 09:20PM
Quote
Rick-o
Well, how else could Bezo pay for a half billion yacht that needs a support yacht to travel the high seas. He probably couldn't afford it if he paid taxes like the rest of us!

It's all of those Washington Post subscriptions.

But maybe he should have looked at used super yachts like the one Paul Allen owned. [en.wikipedia.org]

That does bring up another issue with people like Bezos and Musk that have assets that include privately held companies like WP, Blue Origin, SpaceX, etc. They can't just sell some of it. Same goes for lots of silicon valley entrepreneurs, sometimes even when their company goes public there may be lockout or vesting periods when they own the asset but can't sell it.

As mentioned above, this is the difference between Net Worth and Net Income. Net Income is a real thing that can be measured exactly. Net Worth is sort of like an appraisal by someone who's not willing to put their money where their mouth is and actually purchase the assets.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Acer
Date: June 08, 2021 09:39PM
The reason we even talk about taxing net worth is because net income for the rich is hidden from up-front taxation in non-cash instruments. Yet these people are being compensated for their work. So am I, except the format in which I am paid can't be hidden from up-front taxation (minus a deduction, and perhaps health insurance payments that I can only use for illness, and anything I can I put in a retirement account that I can't touch until I am old).

But, stuff costs money, yo, and somebody needs to pay for it. Why not those who benefit most from the world's economic engine?



Edited 1 time(s). Last edit at 06/08/2021 09:40PM by Acer.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: RAMd®d
Date: June 09, 2021 02:42AM
Taken together, it demolishes the cornerstone myth of the American tax system: that everyone pays their fair share and the richest Americans pay the most.


I have lead a sheltered (not a tax sheltered) life.

I've never heard that myth.

If it's been promulgated by somebody/anybody, it's been overshadowed and shouted down without me ever hearing it, without it ever seeing the light of day, at least where I grew up.

I have understood, for many years, that rich folk can obey all the tax laws and not pay nearly the percentages the rest of us fall prey to.

Still not the same as everybody paying their fair share and the richest paying the most.

Well, I suppose there are those rich people who have to pay some income tax, and that the .00019% of their income is more than my 22%.

Point me to the soup line.





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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: sekker
Date: June 09, 2021 06:19AM
Warren Buffet has been saying this for years.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Sarcany
Date: June 09, 2021 07:36AM
Quote
hal
unsold stock is hardly worthless - it is collateral - you can borrow BIG TIME on $1B and pay next to nothing for it...

When you have that kind of money, you get zero-interest loans with no collateral.

You set up a shell company to take the loan and then refinance the loan with a foreign bank, also at zero-percent interest, but this time the security will be the assets of the (valueless) shell company.

The loan then gets traded around between several different foreign banks to obscure the origin even further.

Eventually, the quid pro quo comes due. Your big company takes a big loan (at a favorable rate) from the first bank for this year's capital expenditures and the last banks in the chain -- who have by now split up the debt into various investment-vehicles resembling those bundled subprime mortgages from the early oughts -- write off the first loan as "bad paper."

All of the banks in the chain get a payoff in the form of some small percentage of the business-loan and you have essentially "purchased" your $500 million yacht for free with no tax consequences from what amounts to debt-forgiveness which would otherwise be taxable as income.



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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Acer
Date: June 09, 2021 08:17AM
Meanwhile, Joe Frycook is paying a service fee equivalent to 500% APR to cash his paycheck.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: Lux Interior
Date: June 09, 2021 08:23AM
Quote
neophyte
It is important to distinguish net worth (which is not subject to taxation nor should it be) from net income, which is subject to taxation.

Something that should be reconsidered in the age of billionaires.

We didn't establish our independence from a hereditary monarchy to just eventually replace it with a plutocracy.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: sekker
Date: June 09, 2021 11:36PM
I don’t understand the naysayers. We started America with property taxes. That’s fine by me.
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Re: We now have the evidence: ultra-rich do not pay their fair share of taxes
Posted by: RgrF
Date: June 10, 2021 02:08AM
Quote
sekker
I don’t understand the naysayers. We started America with property taxes. That’s fine by me.

True! But in those days you had to own property to vote so I would wonder - if you held no real estate but did own some humans, would you then be allowed to vote?
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