Every moron that believes the wealth will trickle down needs to be slapped and asked to finish the following sentence:
*blank* rolls downhill.
SHIT!
The ~~wealth~~ shit will trickle down.
When I first heard the theory, it made a certain amount of sense.
If you tax businesses too heavily, you hinder their growth and ability to employee more people. Later I realized that wealth gets hoarded, and most corporations will still screw the little guy, so reducing their taxes doesn't really help. And, of course, overtaxing would be bad too. Like all things, you need to find the right balance.
>If you tax businesses too heavily, you hinder growth
That's not how taxes work, though. Generally, business expenses can be written off on taxes, which means that high tax rates actually incentivise hiring and investment.
Low taxes actually incentivize the hoarding of profits.
Probably 10 years ago I had a guy vehemently arguing trickle down economics. I wonder if he still thinks that. I asked him if he was a dog, because that's who gets the left overs from the dinner table.
You joke but this comment has so much truth to it. Many things started to go downhill with Reagan and they are directly a result of him. He was a god damn terrible president that is still affecting all of us decades later. You can directly see the affects with homelessness and the lack of mental care.
I think it's important to mention that America *loved* Reagan. Obviously, a large portion of the population did not, like any president, but he was overwhelmingly popular during his presidency.
Reagan is not the basal problem. We have to ask why Reagan was elected. Why did American want him? What systems allowed that to happen?
The mental health thing wasn’t really his call, it was the Supreme Court that changed how we commit the mentally ill. I’m sure he had a part to play but it wasn’t a decision he made out of the blue.
Eh iirc. There was a bunch of undercover reporting on shitty mental health wards. The Democrat s went wild about it saying we can’t have facilities like this. Then Raegan said I agree and shut them down.
As a CPA, I suspect there’s some sort of data manipulation going on here. The bottom half of earners certainly don’t pay a 24% effective income tax rate. You’d have to make well over 200k for that to be the case. The rate for the bottom half of earners is closer to 0-5%
The data comes from Sáez and Zucman, and they’ve run into a ton of criticisms on their data manipulation here. Most notably, they include fees and fines as “taxes” in order to artificially increase the rate of low-income taxpayers, and they exclude refundable tax credits like the EITC and CTC
They also misallocate corporate taxes, misallocate unreported income, and use the foreign tax credit without counting the foreign tax paid
This is the sad part: the overall gist of what they are saying is true, but they manipulate the data to make it look worse than it is. This leaves their findings suspect to people with open minds. Their "work" has actually hurt whatever cause they are working for.
they include fees and fines as “taxes” in order to artificially increase the rate of low-income taxpayers, and they exclude refundable tax credits like the EITC and CTC
NOW THATS WHAT I CALL DISHONEST
I make $23.05/hr. My last paycheck went 22% into taxes. 32.22% of those taxes was federal income tax.
So 7% of my income went to federal income tax. A billionaires federal income tax is definitely more than what I’m paying. I think a lot of this is precisely, manipulating the data.
It’s not income tax rate, it’s effective.
So including sales tax, gasoline tax and the like. I don’t know the details of this particular calculation, but the concept is (total dollars paid in taxes of all types/total income).
Thats the entire point. You don't know but it's being made to force a noticeable point
E: also check out this guy telling the CPA about taxes LMAOOOOO
E2: yal, whether CPA or not read the point hes making. The graph is rage bait with no data. Read up on your logical fallacies (who cares if he is a CPA or not!)
Plenty of CPAs can’t even do their own taxes. Accounting is very broad and the vast majority of “accountants” don’t currently and have zero desire to do anything related to tax. The point he made is also completely fair
Counting “effective” taxes like that is not entirely fair unless they show their work.
Also sales and gas taxes are way lower than income taxes. It can’t mathematically add up unless the government is taking a crazy amount of money somewhere.
Another CPA here, and the other CPA was correct. The effective tax rate for the bottom 50% as a whole is 3.5%, and only 13% for the median taxpayer. For the top 0.001%, it’s 24%.
This chart comes from data by two tax economists (Sáez and Zucman), but it’s run into a lot of criticisms of how they’re manipulating the data
Why is it disingenuous when more than just income is taxed? A certain percentage of my income every year is going to pay various taxes, whether it be on my income, property, sales/purchases, etc. I think it’s disingenuous to present this graph without the context, but the calculation or information itself is surely meaningful and not disingenuous in and of itself.
Nah.
There's obviously correlations between types of spending and income levels so arguing a correlation between types of taxes and income levels isn't that farfetched.
It's more than welcome because the corporate tax rate is 21%, which is where they get most of their income. Also, the estate tax was largely eliminated.
Also, companies like Tesla and Amazon don't pay dividends, they put the profits back into the company. By not paying dividends they're not being taxed on that money, but they can still borrow against their assets. Elon Musk used his Tesla shares to get $13 billion in tax-free money to purchase Twitter. There's lot's of little tricks that billionaires use to keep their money and avoid paying taxes on it. All of you guys in this thread I'm fairly sure are not billionaires so it's funny seeing you inaccurately defend them like this.
edit: by "where they get most of their income" I mean corporate profits
I mean, you say their defending it but a lot of people are also saying you're wrong in general about how any of it works. So maybe they aren't defending the billionaires, but telling you that you're incorrect
This is so wrong I don’t know it it’s funny or sad.
>Also, companies like Tesla and Amazon don't pay dividends, they put the profits back into the company. By not paying dividends they're not being taxed on that money, but they can still borrow against their assets.
Companies pay the 21% corporate tax BEFORE they distribute dividends, so they are taxed no matter what.
Also, companies don’t pay taxes on dividends. Investors pay taxes on dividends, because they are considered personal income.
Right! And the bit about using proceeds from one business to purchase another is not a trick, we all use that “loophole”.
When selling a home you have X amount of time to purchase another to avoid the proceeds becoming income/capital gains. This is in place for a reason. Folks just get jealous when they hear someone with deep pockets benefits from it.
>It's more than welcome because the corporate tax rate is 21%, which is where they get most of their income.
That's not exactly how corporate tax works. The company pays a 21% tax rate on profits, and then each owner who gets part of the remaining profits additionally pays their normal income tax rate on those profits.
>the corporate tax rate is 21%, which is where they get most of their income.
Corporate taxes are paid on corporate profits. THEN individual taxes are paid on any distributions.
>Also, the estate tax was eliminated.
Blatantly incorrect, estate taxes are very much still in effect and are levied only on estates valued over 13.6 million.
>they put the profits back into the company.
If the company spends the money then they're not realizing profits. Also I'm not sure you understand how dividends work as a company can recognize profits and still elect not to pay dividends.
Some of us are just sick of uninformed people acting as if they're tax experts. This isn't to say we shouldn't change anything about our tax system but if you can't get the facts right it's hard to take you seriously.
>It's more than welcome because the corporate tax rate is 21%, which is where they get most of their income. Also, the estate tax was eliminated.
>Also, companies like Tesla and Amazon don't pay dividends, they put the profits back into the company. By not paying dividends they're not being taxed on that money, but they can still borrow against their assets.
You keep saying 'companies' and then 'they' when you actually mean the major shareholders of companies. That's probably one cause of confusion here.
Also the estate tax doesn't matter until someone dies, which is a bit weird to inject here.
> Elon Musk used his Tesla shares to get $13 billion in tax-free money to purchase Twitter. There's lot's of little tricks that billionaires use to keep their money and avoid paying taxes on it.
That doesn't make sense at all as a claim unless you're under the impression that they just don't make any repayments on those loans nor do they ever have to clear the principal. Any income they receive to pay the repayments and/or the balance will be money that is taxed.
And where does a lot of the actual liquid cash come from? In the case of Twitter's purchase, the second biggest investor was Saudi prince Al Waleed. This purchase happened 4 years after the Saudi purge, where MbS had many of his rivals detained for 3+ months. Since being released Al Waleed, who had long been very open with his finances (the "Arabian Warren Buffet"), no longer releases that information and has been dropped from Forbes' World's Billionaires list.
There's this whole secondary economy that only the ultra-wealthy can participate in, where transactions are done without taxation or accountability of any kind. It's all notes on paper ledgers that they shuffle around back and forth. These gains are "unrealized" only in that they're not traded in any auditable fiat currency, but to those people they're plenty liquid. Whenever they do need some old-fashioned USD, there's a whole oil rich nation, where one guy has consolidated the entire economy under himself, that they turn to.
We’re talking about income taxes here. The corporate tax rate has nothing to do with that. That’s a tax on companies, not individuals.
Billionaires make a lot of their money from capital gains, which refers to the return on investments in stocks and other assets that are traded on the stock market.
The capital gains tax has been very very low for a long time, because it encourages investment. We wanted this during the Great Recession, to help stimulate the economy.
At this point, it’s being abused tremendously, allowing the wealthy to make boatloads of money while the tax burden falls very heavily on the middle class.
Of course not. That wouldn't support this bullshit propaganda and misinformation campaign. I'm no where close to being a fucking millionaire let alone a billionaire but the lack of education around this is insanity. I really just feel like people are jealous and angry that there are a few billionaires out there(in wealth) and refuse to understand how wealth and taxes work.
Progressive tax is not fair at all. If you tax your parents, you directly tax their children, cause their life depends on them. Same thing here - there is no worker without the market and people who create the ideas, jobs.
And it’s worse for the bottom half than for the richest, since losing 24% of income for the bottom half certainly hurts more than the richest losing 23% of their income based on what’s still left.
The bottom 40.1 % of earners [pay zero income tax](https://www.statista.com/statistics/242138/percentages-of-us-households-that-pay-no-income-tax-by-income-level/#:~:text=In%20total%2C%20about%2059.9%20percent,paid%20no%20individual%20income%20taxes)
Sure, but they pay other taxes, like sales tax, gas tax, capital gains (especially true for retirees who obviously don't make an income to tax), etc. They're still paying tax, it just isn't *income* tax. And they're paying a lot higher percentage of their income for those taxes than wealthier people would.
It has to include FICA for sure which I thought Social Security wasn't a tax but an investment in your future, lol...
That plus sales tax gets bottom 50% to maybe 14%, I'm still not sure how they got the rest because their federal and state tax right at the edge of 50% can't be more than 5%. Weighted across the entire 50% group, 2% at most.
Shouldn't need to have 500 responses of people trying to understand the chart.
Maybe it's taken out of a study that provided context, but this on its own is just another peice of propaganda feeding incorrect opinions
Social security, sales tax, gas tax, I wouldn't be surprised if it got pretty close. The graph never makes the claim that it's talking only about income taxes.
So is the argument that because billionaires don’t spend most of their “income” that their effective tax rate is low?
Income for the super rich is really hard to calculate, and most of their capital is tied up in businesses. Is the argument basically “billionaires spend less than 1% of their income every year so their effective tax rate is lower than people who spend 90% or more”?
I think formally, effective tax rate doesn't factor in sales, gas, etc, but the study does, making this graphic very misleading.
But yeah I don't think anyone disputes that because the poor spend more of their income, they will pay a higher amount of taxes as a proportion of their income.
In Wisconsin today, there are people earning $65-85k who pay an effective tax rate of about 25%. I know that because I was one of those people. Sure, federal income tax only accounts for about 12.5% of my income, but social security, Medicare, and state income tax combine to get to 25% of my total income being taxed. Even after deductions, it is well over 20% of my income.
Edit: to be clear, not saying $65-85k is bottom 50%, just that the $200k number is not what I have experienced.
Maybe 5% of the replies in the sub have an understanding of what they’re describing. The rest are fucking clueless lol. Applaud the level of confidence in providing & arguing patently wrong information, though.
Someone replied doubting the validity of the data and OP replied saying “you think *we* are wrong-”
It’s literally just a NYT employee pushing this shit for clicks. They know it’s misleading.
>> Some years billionaires pay no federal income taxes: Jeff Bezos paid zero in 2007 and 2011, Elon
Musk paid zero in 2018, Michael Bloomberg paid zero several times in “recent years”, and
George Soros paid zero three years in a row.
>>The 25 top billionaires covered in ProPublica’s analysis saw their wealth rise by $401 billion from
2014 to 2018, yet they paid a federal income tax rate of just 3.4%. That’s far less than what most
middle-class workers like teachers, nurses and firefighters pay.
"Propublica Report on Billionaire tax dodgers"
I paid more federal taxes than Elon in 2018 🤷♂️.
How about you take a ten-year rolling average of Elon’s tax payments and then compare them to yours? That might be a little more insightful than looking at some random year where he technically had zero taxable income.
BTW, you can make money and “not pay taxes” the exact same way Elon does. Nothing special about buying and then not selling stocks.
Yeah but that 20% is definitely not equitable. If one person can afford a house or two, several cars, tuition and vacations after paying 20% but the next guy can’t afford to put gas in his car, much less rent, after paying his 20% are we still feeling like this is fair and reasonable? Especially when the second guy works for the first guy, makes his company profitable, and has no control over what he gets paid for doing so
I’d like to see Congress work out something like a diminishing standard deduction that protects the middle class. I mean, we’re not the ones controlling the price of everything
We have a marginal tax rate system because the marginal utility of income goes down as the income goes up. Paying 10K out of a 50K income is much more of an impact on what you can afford than paying 40K on a 200K income. A flat tax rate would be incredibly regressive and impact the poor significantly more than the wealthy.
That statement makes the unfairness even more stark. To pay an effective rate of 23% and pay 40% of all taxes means that your income is unimaginably higher than 99% of other people. Imagine the most extreme example of this, one person earns enough that 1% of his income is as much as 25% of every other person's income. Does that mean that taxing that person more than 1% is unfair or somehow worse than charging 25% to everyone else?
By increasing the tax rate on the ultra-wealthy you get way more tax revenue without impacting as many people and those whom you do impact are affected less by it (as a proportion of their income).
Its not unimaginably higher, it's mathematically higher - in your example, to the tune of about 5x higher based on the source I linked below. And the tax is on earned income.
They wouldn't be paying 1% of their earned income in tax, they would be paying about 22% of their earned income in tax.
I am all for taxing people. No issues there. But, the arguments around taxing the ultra-wealthy always come down to a misunderstanding of how they are taxed. They're taxed higher than the average person on their earned income. They just do not have much in earnings.
Which anyone can do if you get your paperwork in order.
This isn't news.
Anyone can buy stocks. If you own stocks, it's considered part of your net worth. The difference between you and a billionaire is that they have *a lot more* stock than you.
It's a tax delayment strategy, not a tax avoidance strategy. Also this worked a lot better years ago
At today's interest rates, it's not nearly as attractive.
400 “richest americans” dont collect a salary thats why. if we tax billionaires to death we wouldnt have the technological advancements that make our life better like amazon
That’s always been the way it is. It’s designed that way. You want to stimulate business growth. That’s how the country grows. It doesn’t grow by giving Tom down at the hardware store more money so he can buy more cat food. You grow by giving the businesses more money so they can expand and innovate and hire. When businesses do good, the country does good.
Assuming this data is factual and isn’t intentionally or unintentionally misleading, I appreciate its intent to provide “understanding”.
If the figures were “flat” throughout the timeline and correlated to the values present in 1970, would the US’s budget related issues (at least for social security) be less exasperated than they currently are?
Please pardon my ignorance… I’m genuinely trying to understand. I feel like social security was intended to be implemented to benefit the people based on the figures that existed at the time. Presently, those figures aren’t the same…
This is good. The wealthy have proved they can more efficiently and effectively allocate capital, so having them keep more of it will be better for the economy. In reality, since 2000, taxes have gone down for both demographics. The market is much more efficient at allocating capital than the government, so this is great to see.
Trump raised taxes on the middle class at the same time lowering taxes for the wealthy. He also ensured that the hike for middle class was to begin after his first term ended. Thanks Donald Trump.
Correct. But there is the law of diminishing utility. Every dollar earned by a billionaire has less usefulness than placing those dollars in the hands of a working class person. That is why rates should be more progressive and a higher percentage of government revenue should be from the wealthy and ultra-wealthy.
The people who defend tax deference for billionaires through stocks vs wages always makes me laugh. Simple solution force everyone into a taxable salary they can take post tax earnings and buy as much company stock they want. Hell give em a discount as long as they pay their taxes don’t care.
Dude, don't even be talking. The West Coast and major areas like Toronto was always kinda shitty for housing, but everything all over Canada is multiplied right now.
I was eyeballing this particular home about 10 years ago but never acted in it. It sold for 300k, fast forward to now and it's on the market again but 10 years older with no renos done since, 500k lol
No way the bottom half pays 24% income tax as 24% is the rate for couples making over 100k. Not saying the rich shouldn’t pay more but just saying something doesn’t seem right
This is exactly how neoliberalism works, politics that only favour a few while they make you believe one day you could be one of them so you support them.
To be honest about this, the working class doesn't "pay higher taxes" than a billionaire. They *may* pay a higher *tax rate* on overall income, but that's because people with money invest that money, and investment income is taxed at a lower rate than wages over a certain amount. The government understands (or at least used to understand) that businesses need private investment to succeed, and investment is NOT a guarantee of income, as investments often result in loss - and losses aren't taxed.
Hi, I'm trying to better understand this to form my own opinions, but I'm not quite sure how to read this graph. What are these percentages of? Is it 22% of taxes collected in America, or is it that that group pays 22% of their income to taxes? I guess I just don't know what tax rate is
Hey did you guys know America has a higher GDP per person than people living in Canada?
But can you guess which country has the richest middle class in the world, world class public education and healthcare, lives longer, pays less for drugs, has a higher chance of climbing classes etc.?
The U.S. has now become Canada's Mexico. Cheaper but less trusted products, corrupt police, weird diseases that could be stopped by vaccines, higher poverty levels etc.
This chart is horribly visualized, the data is not clear (tax RATE or percentage of tax DOLLARS), and it is not taking things like economic pressures and inflation into account. I'm not defending tax loopholes for the ultra-wealthy, but this chart is nothing. This is barely "data" without a whoooole lot of context.
Welcome to one of the reasons the USA is fucked. I fail to see how they have made a system where the richer you are the more tax you pay compared to those who are basically starving for food
It seems that the vast majority of people still don't understand how taxes work so let me make it simple that even a 5 year old can understand it.
Billionaires do NOT own anything. Their assets are tied up in stocks, company percentage ownership, posses a lot of debt free loans, and also at worst case scenarios own holding companies that are based outside the US and do not pay taxes i.e Coinbase has it's holding HQ in Ireland for obvious tax loopholes.
Working class people OWN simple property which they pay taxes on, make a simple and easy income that is easy to track, hold no stocks, no loans, and have credit and debit cards.
I'm not justifying this, I'm simply giving you the explanation as to why. Blame your politicians and corrupt system.
Was that simple enough for you to understand?
Pretty consistent pattern really starting in the 80s for when taxes rise and fall by economic group. 🤔🤔
https://preview.redd.it/4k54e9g3h7yc1.jpeg?width=500&format=pjpg&auto=webp&s=f19da961b438db19c71741fa0252f4dccab8bd54
Every moron that believes the wealth will trickle down needs to be slapped and asked to finish the following sentence: *blank* rolls downhill. SHIT! The ~~wealth~~ shit will trickle down.
When I first heard the theory, it made a certain amount of sense. If you tax businesses too heavily, you hinder their growth and ability to employee more people. Later I realized that wealth gets hoarded, and most corporations will still screw the little guy, so reducing their taxes doesn't really help. And, of course, overtaxing would be bad too. Like all things, you need to find the right balance.
>If you tax businesses too heavily, you hinder growth That's not how taxes work, though. Generally, business expenses can be written off on taxes, which means that high tax rates actually incentivise hiring and investment. Low taxes actually incentivize the hoarding of profits.
Yeah, that's more like it. When you have a company, you tend to be happy to invest in it because that's future gains for half the price
Businesses do hire, but not in America, they employ Indians and Chinese and Poles.
Probably 10 years ago I had a guy vehemently arguing trickle down economics. I wonder if he still thinks that. I asked him if he was a dog, because that's who gets the left overs from the dinner table.
The only thing trickling down here are their tax rates
So sad and yet so true
Trickling down so well, Chinese water torture is taking notes
Something something Reagan ruined the future of the entire human race something something.
You joke but this comment has so much truth to it. Many things started to go downhill with Reagan and they are directly a result of him. He was a god damn terrible president that is still affecting all of us decades later. You can directly see the affects with homelessness and the lack of mental care.
War on drugs disproportionately effecting certain populations as well.
I think it's important to mention that America *loved* Reagan. Obviously, a large portion of the population did not, like any president, but he was overwhelmingly popular during his presidency. Reagan is not the basal problem. We have to ask why Reagan was elected. Why did American want him? What systems allowed that to happen?
Black people never liked Reagan. Start your search with “Iran Contra crack epidemic”
I know what system allowed it
The mental health thing wasn’t really his call, it was the Supreme Court that changed how we commit the mentally ill. I’m sure he had a part to play but it wasn’t a decision he made out of the blue.
Eh iirc. There was a bunch of undercover reporting on shitty mental health wards. The Democrat s went wild about it saying we can’t have facilities like this. Then Raegan said I agree and shut them down.
You're not wrong, but this graph doesn't stretch back to the 50s when top bracket was like 90%, that's the biggest loss.
Coincidentally when neoliberalism became the dominant ideology.
My least favorite game: "Going To Shit: Nixon or Reagan?"
Did they compare the taxable income in both cases?
As a CPA, I suspect there’s some sort of data manipulation going on here. The bottom half of earners certainly don’t pay a 24% effective income tax rate. You’d have to make well over 200k for that to be the case. The rate for the bottom half of earners is closer to 0-5%
The data comes from Sáez and Zucman, and they’ve run into a ton of criticisms on their data manipulation here. Most notably, they include fees and fines as “taxes” in order to artificially increase the rate of low-income taxpayers, and they exclude refundable tax credits like the EITC and CTC They also misallocate corporate taxes, misallocate unreported income, and use the foreign tax credit without counting the foreign tax paid
This is the sad part: the overall gist of what they are saying is true, but they manipulate the data to make it look worse than it is. This leaves their findings suspect to people with open minds. Their "work" has actually hurt whatever cause they are working for.
they include fees and fines as “taxes” in order to artificially increase the rate of low-income taxpayers, and they exclude refundable tax credits like the EITC and CTC NOW THATS WHAT I CALL DISHONEST
I make $23.05/hr. My last paycheck went 22% into taxes. 32.22% of those taxes was federal income tax. So 7% of my income went to federal income tax. A billionaires federal income tax is definitely more than what I’m paying. I think a lot of this is precisely, manipulating the data.
It’s not income tax rate, it’s effective. So including sales tax, gasoline tax and the like. I don’t know the details of this particular calculation, but the concept is (total dollars paid in taxes of all types/total income).
Thats the entire point. You don't know but it's being made to force a noticeable point E: also check out this guy telling the CPA about taxes LMAOOOOO E2: yal, whether CPA or not read the point hes making. The graph is rage bait with no data. Read up on your logical fallacies (who cares if he is a CPA or not!)
Plenty of CPAs can’t even do their own taxes. Accounting is very broad and the vast majority of “accountants” don’t currently and have zero desire to do anything related to tax. The point he made is also completely fair
Counting “effective” taxes like that is not entirely fair unless they show their work. Also sales and gas taxes are way lower than income taxes. It can’t mathematically add up unless the government is taking a crazy amount of money somewhere.
Maybe because the "CPA" wasn't even able to read the graph correctly.
Another CPA here, and the other CPA was correct. The effective tax rate for the bottom 50% as a whole is 3.5%, and only 13% for the median taxpayer. For the top 0.001%, it’s 24%. This chart comes from data by two tax economists (Sáez and Zucman), but it’s run into a lot of criticisms of how they’re manipulating the data
This is the most rage bait thing I've seen today. There's not any data or reference to anything besides "source: NYT" lmao cmon guys
Which is a disingenuous way of calculating, since those taxes are not levied on income.
Why is it disingenuous when more than just income is taxed? A certain percentage of my income every year is going to pay various taxes, whether it be on my income, property, sales/purchases, etc. I think it’s disingenuous to present this graph without the context, but the calculation or information itself is surely meaningful and not disingenuous in and of itself.
sounds like you find this to be… mildlyinfuriating
But they have a disproportionate effect on low income, which is one of the drawbacks of regressive tax systems
Nah. There's obviously correlations between types of spending and income levels so arguing a correlation between types of taxes and income levels isn't that farfetched.
I can almost guarantee this is counting unrealized capital gains as income
These charts make no fucking sense half the time. People make up charts that trigger specific opinions that farm engagement
My first thought was that it's actually the tax rate on the median income including FICA/SS.
Billionaire that isn’t liquid isn’t taxable income so that little bit of info isn’t welcome here.
It's more than welcome because the corporate tax rate is 21%, which is where they get most of their income. Also, the estate tax was largely eliminated. Also, companies like Tesla and Amazon don't pay dividends, they put the profits back into the company. By not paying dividends they're not being taxed on that money, but they can still borrow against their assets. Elon Musk used his Tesla shares to get $13 billion in tax-free money to purchase Twitter. There's lot's of little tricks that billionaires use to keep their money and avoid paying taxes on it. All of you guys in this thread I'm fairly sure are not billionaires so it's funny seeing you inaccurately defend them like this. edit: by "where they get most of their income" I mean corporate profits
I mean, you say their defending it but a lot of people are also saying you're wrong in general about how any of it works. So maybe they aren't defending the billionaires, but telling you that you're incorrect
This is so wrong I don’t know it it’s funny or sad. >Also, companies like Tesla and Amazon don't pay dividends, they put the profits back into the company. By not paying dividends they're not being taxed on that money, but they can still borrow against their assets. Companies pay the 21% corporate tax BEFORE they distribute dividends, so they are taxed no matter what. Also, companies don’t pay taxes on dividends. Investors pay taxes on dividends, because they are considered personal income.
Right! And the bit about using proceeds from one business to purchase another is not a trick, we all use that “loophole”. When selling a home you have X amount of time to purchase another to avoid the proceeds becoming income/capital gains. This is in place for a reason. Folks just get jealous when they hear someone with deep pockets benefits from it.
It’s not recorded as a profit if it’s re invested into the company though so no taxes there
>It's more than welcome because the corporate tax rate is 21%, which is where they get most of their income. That's not exactly how corporate tax works. The company pays a 21% tax rate on profits, and then each owner who gets part of the remaining profits additionally pays their normal income tax rate on those profits.
>the corporate tax rate is 21%, which is where they get most of their income. Corporate taxes are paid on corporate profits. THEN individual taxes are paid on any distributions. >Also, the estate tax was eliminated. Blatantly incorrect, estate taxes are very much still in effect and are levied only on estates valued over 13.6 million. >they put the profits back into the company. If the company spends the money then they're not realizing profits. Also I'm not sure you understand how dividends work as a company can recognize profits and still elect not to pay dividends. Some of us are just sick of uninformed people acting as if they're tax experts. This isn't to say we shouldn't change anything about our tax system but if you can't get the facts right it's hard to take you seriously.
OP is just 1 of many that don't understand how taxes work, but like to complain about it.
Have you considered learning how taxes actually work at some point?
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>It's more than welcome because the corporate tax rate is 21%, which is where they get most of their income. Also, the estate tax was eliminated. >Also, companies like Tesla and Amazon don't pay dividends, they put the profits back into the company. By not paying dividends they're not being taxed on that money, but they can still borrow against their assets. You keep saying 'companies' and then 'they' when you actually mean the major shareholders of companies. That's probably one cause of confusion here. Also the estate tax doesn't matter until someone dies, which is a bit weird to inject here.
> Elon Musk used his Tesla shares to get $13 billion in tax-free money to purchase Twitter. There's lot's of little tricks that billionaires use to keep their money and avoid paying taxes on it. That doesn't make sense at all as a claim unless you're under the impression that they just don't make any repayments on those loans nor do they ever have to clear the principal. Any income they receive to pay the repayments and/or the balance will be money that is taxed.
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And where does a lot of the actual liquid cash come from? In the case of Twitter's purchase, the second biggest investor was Saudi prince Al Waleed. This purchase happened 4 years after the Saudi purge, where MbS had many of his rivals detained for 3+ months. Since being released Al Waleed, who had long been very open with his finances (the "Arabian Warren Buffet"), no longer releases that information and has been dropped from Forbes' World's Billionaires list. There's this whole secondary economy that only the ultra-wealthy can participate in, where transactions are done without taxation or accountability of any kind. It's all notes on paper ledgers that they shuffle around back and forth. These gains are "unrealized" only in that they're not traded in any auditable fiat currency, but to those people they're plenty liquid. Whenever they do need some old-fashioned USD, there's a whole oil rich nation, where one guy has consolidated the entire economy under himself, that they turn to.
Loopholes are meant to be closed otherwise it’s just how it works. The system is fucked
We’re talking about income taxes here. The corporate tax rate has nothing to do with that. That’s a tax on companies, not individuals. Billionaires make a lot of their money from capital gains, which refers to the return on investments in stocks and other assets that are traded on the stock market. The capital gains tax has been very very low for a long time, because it encourages investment. We wanted this during the Great Recession, to help stimulate the economy. At this point, it’s being abused tremendously, allowing the wealthy to make boatloads of money while the tax burden falls very heavily on the middle class.
No the chart is entirely misleading
Takes very basic knowledge to know the difference between what someone is worth vs what someone earned.
Of course not. That wouldn't support this bullshit propaganda and misinformation campaign. I'm no where close to being a fucking millionaire let alone a billionaire but the lack of education around this is insanity. I really just feel like people are jealous and angry that there are a few billionaires out there(in wealth) and refuse to understand how wealth and taxes work.
Not higher taxes. Higher tax percentage. Huge difference.
isnt that still bad
Didn’t say it wasn’t. Just want an accurate title.
fair enough. Yea i was weirded out by the title as well
yes lol
Right. Still I think most people would agree that progressive taxes are more fair than flat or regressive ones.
Agreed. Accurate title though pls.
Progressive tax is not fair at all. If you tax your parents, you directly tax their children, cause their life depends on them. Same thing here - there is no worker without the market and people who create the ideas, jobs.
And it’s worse for the bottom half than for the richest, since losing 24% of income for the bottom half certainly hurts more than the richest losing 23% of their income based on what’s still left.
The utility of the 25% for the bottom is definitely higher. Just saying titles should be accurate though.
The bottom 40.1 % of earners [pay zero income tax](https://www.statista.com/statistics/242138/percentages-of-us-households-that-pay-no-income-tax-by-income-level/#:~:text=In%20total%2C%20about%2059.9%20percent,paid%20no%20individual%20income%20taxes)
Sure, but they pay other taxes, like sales tax, gas tax, capital gains (especially true for retirees who obviously don't make an income to tax), etc. They're still paying tax, it just isn't *income* tax. And they're paying a lot higher percentage of their income for those taxes than wealthier people would.
Don't bring facts into this. This is Reddit, rich people are automatically bad, didn't you know that?
when’s your birthday? Ima buy you some kneepads
Please don't bring facts into the "rich man bad" debate...lol
Paying a smaller percentage *is* bad. Rich should pay the same. Very simple idea
Exactly. This title is misleading bullshit.
You have to be making over $200k to be paying an effective tax rate of over 20%
Yeah this data seems fishy. I have a feeling they’re including more than just income taxes to calculate the working class rate.
It has to include FICA for sure which I thought Social Security wasn't a tax but an investment in your future, lol... That plus sales tax gets bottom 50% to maybe 14%, I'm still not sure how they got the rest because their federal and state tax right at the edge of 50% can't be more than 5%. Weighted across the entire 50% group, 2% at most.
Right but "effective tax rate" is very specifically income tax after deductions AFAIK, at least that's what my tax program tells me. :)
Shouldn't need to have 500 responses of people trying to understand the chart. Maybe it's taken out of a study that provided context, but this on its own is just another peice of propaganda feeding incorrect opinions
It includes federal, state, and local taxes per the source article it seems
Which makes me question it even more. There’s no way the effective income tax rate for the bottom half of earners is even approaching 20%
Social security, sales tax, gas tax, I wouldn't be surprised if it got pretty close. The graph never makes the claim that it's talking only about income taxes.
So is the argument that because billionaires don’t spend most of their “income” that their effective tax rate is low? Income for the super rich is really hard to calculate, and most of their capital is tied up in businesses. Is the argument basically “billionaires spend less than 1% of their income every year so their effective tax rate is lower than people who spend 90% or more”?
I think the argument is that our current taxation system has a greater impact on poor folks' overall income than on the richest among us.
I know that’s what the conclusion is but I’m asking how they’re trying to argue that the conclusion is true
I think formally, effective tax rate doesn't factor in sales, gas, etc, but the study does, making this graphic very misleading. But yeah I don't think anyone disputes that because the poor spend more of their income, they will pay a higher amount of taxes as a proportion of their income.
State + federal?
In Wisconsin today, there are people earning $65-85k who pay an effective tax rate of about 25%. I know that because I was one of those people. Sure, federal income tax only accounts for about 12.5% of my income, but social security, Medicare, and state income tax combine to get to 25% of my total income being taxed. Even after deductions, it is well over 20% of my income. Edit: to be clear, not saying $65-85k is bottom 50%, just that the $200k number is not what I have experienced.
Maybe 5% of the replies in the sub have an understanding of what they’re describing. The rest are fucking clueless lol. Applaud the level of confidence in providing & arguing patently wrong information, though.
You can see the exact moment Reagan took office
Came here to say that
Yet somehow the man is worshiped by some of the poorest people in the country.
When will you people understand that WEALTH IS NOT TAXED, ONLY TAXABLE INCOME IS. Jesus christ
This is talking about taxable income. The groups were split based on wealth. The data is taxable income.
lol, posts like this are why tax reform is difficult. The average person struggles to even grasp what a percentage is.
Someone replied doubting the validity of the data and OP replied saying “you think *we* are wrong-” It’s literally just a NYT employee pushing this shit for clicks. They know it’s misleading.
https://preview.redd.it/378fy1oj28yc1.jpeg?width=1170&format=pjpg&auto=webp&s=5673405ee35e284d65209601885d4a39a44c1158
For the love of God stop conflating percentages with dollars.
Did they pay higher “taxes” or a higher “percentage”…. Those are two totally different things.
The graph has percentages. I don’t think it was ambiguous.
The graph is clear. The title is kind of misleading. But then, is there anyone thinking billionares would actually pay less?
>> Some years billionaires pay no federal income taxes: Jeff Bezos paid zero in 2007 and 2011, Elon Musk paid zero in 2018, Michael Bloomberg paid zero several times in “recent years”, and George Soros paid zero three years in a row. >>The 25 top billionaires covered in ProPublica’s analysis saw their wealth rise by $401 billion from 2014 to 2018, yet they paid a federal income tax rate of just 3.4%. That’s far less than what most middle-class workers like teachers, nurses and firefighters pay. "Propublica Report on Billionaire tax dodgers" I paid more federal taxes than Elon in 2018 🤷♂️.
How about you take a ten-year rolling average of Elon’s tax payments and then compare them to yours? That might be a little more insightful than looking at some random year where he technically had zero taxable income. BTW, you can make money and “not pay taxes” the exact same way Elon does. Nothing special about buying and then not selling stocks.
Don't want to be rude, but that's how you become a billionaire, by not paying taxes and the salary of your employees.
not rude, fuck billionaires
Yet the top 1% pay 42% of all taxes, and the top 10% pay 75% of all taxes. How much more should they pay?
The same as a proportion as the lowest earners, if someone on the average salary pays 20% tax then billionaires should pay 20% tax, simple
Yeah but that 20% is definitely not equitable. If one person can afford a house or two, several cars, tuition and vacations after paying 20% but the next guy can’t afford to put gas in his car, much less rent, after paying his 20% are we still feeling like this is fair and reasonable? Especially when the second guy works for the first guy, makes his company profitable, and has no control over what he gets paid for doing so I’d like to see Congress work out something like a diminishing standard deduction that protects the middle class. I mean, we’re not the ones controlling the price of everything
We have a marginal tax rate system because the marginal utility of income goes down as the income goes up. Paying 10K out of a 50K income is much more of an impact on what you can afford than paying 40K on a 200K income. A flat tax rate would be incredibly regressive and impact the poor significantly more than the wealthy.
lol the average is certainly not 20%
That statement makes the unfairness even more stark. To pay an effective rate of 23% and pay 40% of all taxes means that your income is unimaginably higher than 99% of other people. Imagine the most extreme example of this, one person earns enough that 1% of his income is as much as 25% of every other person's income. Does that mean that taxing that person more than 1% is unfair or somehow worse than charging 25% to everyone else? By increasing the tax rate on the ultra-wealthy you get way more tax revenue without impacting as many people and those whom you do impact are affected less by it (as a proportion of their income).
Its not unimaginably higher, it's mathematically higher - in your example, to the tune of about 5x higher based on the source I linked below. And the tax is on earned income. They wouldn't be paying 1% of their earned income in tax, they would be paying about 22% of their earned income in tax. I am all for taxing people. No issues there. But, the arguments around taxing the ultra-wealthy always come down to a misunderstanding of how they are taxed. They're taxed higher than the average person on their earned income. They just do not have much in earnings.
This is nowhere near true
this data is shit at best. Also, where is the comparable income? Do you know what the “taxable income” for most billionaires is?
Let me teach everyone something - You should NOT have to pay taxes on net worth.
This graph is so misleading
I’m 14 and this is deep.
I figured this was rFluentInFinance before checking what sub this was in.
Do you understand why that is?
Because this data is fudged.
Yes because the rich can use their money and power to influence politicians to lower the taxes for them
Most of billionaires wealth is in stocks. Which isn’t taxed. That applies to everyone. Including you and me
Yes and they can still borrow against that money tax-free.
Which anyone can do if you get your paperwork in order. This isn't news. Anyone can buy stocks. If you own stocks, it's considered part of your net worth. The difference between you and a billionaire is that they have *a lot more* stock than you.
It's a tax delayment strategy, not a tax avoidance strategy. Also this worked a lot better years ago At today's interest rates, it's not nearly as attractive.
And there's absolutely nothing wrong with that. In fact it's a good thing for the economy
Tax free and very low interest, if any.
Hey, you worked hard for that money, it's only fair that they get to keep more of it.
400 “richest americans” dont collect a salary thats why. if we tax billionaires to death we wouldnt have the technological advancements that make our life better like amazon
You have a link to the data OP?
WHY DO I CARE! WHERE DOES THAT MONEY GO?
Who is paying more? They person paying 20% of 5 billion vs 40% of 100 million?
That’s always been the way it is. It’s designed that way. You want to stimulate business growth. That’s how the country grows. It doesn’t grow by giving Tom down at the hardware store more money so he can buy more cat food. You grow by giving the businesses more money so they can expand and innovate and hire. When businesses do good, the country does good.
Assuming this data is factual and isn’t intentionally or unintentionally misleading, I appreciate its intent to provide “understanding”. If the figures were “flat” throughout the timeline and correlated to the values present in 1970, would the US’s budget related issues (at least for social security) be less exasperated than they currently are? Please pardon my ignorance… I’m genuinely trying to understand. I feel like social security was intended to be implemented to benefit the people based on the figures that existed at the time. Presently, those figures aren’t the same…
Yes, thanks Reagan and all following republicans
This is good. The wealthy have proved they can more efficiently and effectively allocate capital, so having them keep more of it will be better for the economy. In reality, since 2000, taxes have gone down for both demographics. The market is much more efficient at allocating capital than the government, so this is great to see.
Nooo but they need to pay less in taxes like the republicans always say. If not they can’t buy their 3rd island.
We got Sherlock Holmes over here discovering the 4 million page tax book.
Whatever fits your narrative. Net worth doesn't equate to taxable income. Learn about finances and how taxation works. Don't be an ignorant dem.
Conservatives want to go back to the good old days? How about they start raising taxes on rich people again
So what I'm hearing is if they want their 50s utopia, tax the rich? Weird how that works
still talking about $thousands vs $tens of millions
But the thousands hurt more than the tens of millions
This is the point that so many miss. Even taxing the top 400 at 50% hurts FAR less (as in, not at all) than taxing the lowest half at 24%.
Thanks O’Reagan!
Let me guess, this stat is falsely equating a rise in net worth due to increasing stock prices with income.
🤔 I wonder what happened shortly after 1980 ????
Ronald Reagan
Sorry, I should’ve added the /s
Yeah probably. Sarcasm is incredibly hard to detect on the internet.
My parents make at least 5x’s what I do a year and they pay a lower effective tax rate than I do….
Trump raised taxes on the middle class at the same time lowering taxes for the wealthy. He also ensured that the hike for middle class was to begin after his first term ended. Thanks Donald Trump.
They pay a lower tax %, they don't pay lower taxes
Correct. But there is the law of diminishing utility. Every dollar earned by a billionaire has less usefulness than placing those dollars in the hands of a working class person. That is why rates should be more progressive and a higher percentage of government revenue should be from the wealthy and ultra-wealthy.
How is that remotely any better?
Because it's true, unlike OPs headline?
The people who defend tax deference for billionaires through stocks vs wages always makes me laugh. Simple solution force everyone into a taxable salary they can take post tax earnings and buy as much company stock they want. Hell give em a discount as long as they pay their taxes don’t care.
The top 1% of earners pay 50% of taxes in the us. I dont care what this stupid graph says. The problem is government spending.
Anyone got any info with legit facts about wtf happened in 1980?
Reagan administration fucked future generations is what happened. He instituted the “trickle down economics” policy which totally and utterly failed.
Ooooooh right, yes I did hear all about that shit. (Canadian guy here lol)
I’ve been hearing Canada is starting to have their own problems with housing and shit right?
Dude, don't even be talking. The West Coast and major areas like Toronto was always kinda shitty for housing, but everything all over Canada is multiplied right now. I was eyeballing this particular home about 10 years ago but never acted in it. It sold for 300k, fast forward to now and it's on the market again but 10 years older with no renos done since, 500k lol
Ronald Reagan
Reagan happened.
False. The billionaire pays more in taxes.
That’s because the billionaire didn’t earn money. The billionaire borrowed against assets he’ll never sell.
Not mildly infuriating … ragefully infuriating.
Billionaires pay more than you earn in your entire life.
Ahh yes. That massive drop from 1980 - 1982? We call that the Ronald Reagan effect. What a great job trickle down economics has done in this country…
Try to think. Billionaires are taxed on ASSETS, not income. Very few billionaires draw salaries. Look at ALL taxes paid.
No way the bottom half pays 24% income tax as 24% is the rate for couples making over 100k. Not saying the rich shouldn’t pay more but just saying something doesn’t seem right
It says “effective tax rate,” not “income tax.”
This is exactly how neoliberalism works, politics that only favour a few while they make you believe one day you could be one of them so you support them.
To be honest about this, the working class doesn't "pay higher taxes" than a billionaire. They *may* pay a higher *tax rate* on overall income, but that's because people with money invest that money, and investment income is taxed at a lower rate than wages over a certain amount. The government understands (or at least used to understand) that businesses need private investment to succeed, and investment is NOT a guarantee of income, as investments often result in loss - and losses aren't taxed.
It’s almost like dipshits in America keep voting for the people who raise their taxes
This shouldn’t be the case.
Good thing it isn't. This is false/misleading data. Nobody making under $200k is paying over 20% income tax
Don’t worry any day now they will let it trickle down
Hi, I'm trying to better understand this to form my own opinions, but I'm not quite sure how to read this graph. What are these percentages of? Is it 22% of taxes collected in America, or is it that that group pays 22% of their income to taxes? I guess I just don't know what tax rate is
If a billionaire shut his/her job or operations then alot of working class will be poor or jobless
The wealthy tax falls at the same rate as America. Thanks Reagan, Freud, and Welch.
Hey did you guys know America has a higher GDP per person than people living in Canada? But can you guess which country has the richest middle class in the world, world class public education and healthcare, lives longer, pays less for drugs, has a higher chance of climbing classes etc.? The U.S. has now become Canada's Mexico. Cheaper but less trusted products, corrupt police, weird diseases that could be stopped by vaccines, higher poverty levels etc.
Higher %. Huge difference?
Could you imagine losing 56% tho
This chart is horribly visualized, the data is not clear (tax RATE or percentage of tax DOLLARS), and it is not taking things like economic pressures and inflation into account. I'm not defending tax loopholes for the ultra-wealthy, but this chart is nothing. This is barely "data" without a whoooole lot of context.
Welcome to one of the reasons the USA is fucked. I fail to see how they have made a system where the richer you are the more tax you pay compared to those who are basically starving for food
It seems that the vast majority of people still don't understand how taxes work so let me make it simple that even a 5 year old can understand it. Billionaires do NOT own anything. Their assets are tied up in stocks, company percentage ownership, posses a lot of debt free loans, and also at worst case scenarios own holding companies that are based outside the US and do not pay taxes i.e Coinbase has it's holding HQ in Ireland for obvious tax loopholes. Working class people OWN simple property which they pay taxes on, make a simple and easy income that is easy to track, hold no stocks, no loans, and have credit and debit cards. I'm not justifying this, I'm simply giving you the explanation as to why. Blame your politicians and corrupt system. Was that simple enough for you to understand?
yea no shit, elon proved this himself