Two things stand out. First is the quote:
>The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread.
Second, the law including power imbalances as a reason to treat people different is already considered equality under the law. Consider we already have laws that treat certain groups of people different because of power imbalances. For example consider minors entering into contracts and how the law enforces such contracts.
The law also taxes people differently. Not just for income, but also family status. There are differences in how the law handles certain matters between two people when they are a spouse compared to when they are not (such as property transfers and social security).
The law also discriminates plenty based on age. For example, some people are allowed to withdraw funds from their tax deferred accounts while others are not, all because of differences in age (or in rarer cases other special circumstances).
If all of these are considered equal because the way the rules apply mean that you qualify when you are of the appropriate age/married/meet the specified life circumstances, then the purposed notion would also be equal as the law would equally apply to all when they are on the specific side of the power imbalance.
To set the standard the law must be equal to everyone would require re-evaluating much of the existing law and would fundamentally change quite a few facets of society.
Since we're talking about the idea of different treatment under the law for rich vs. poor (well, "comfortable", in this case), tax law in the US is a fine example: the more income you make, the higher your marginal earnings are taxed.
That's technically true, but misleading.
The long term capital gains tax, which is what most high income earners end up paying, maxes out at 20%, which is lower than most of the regular income tax brackets. It's the reason some CEOs opt for a $1 salary.
The long term capital gains tax, which is what most high income earners end up paying, maxes out at 20%, which is lower than most of the regular income tax brackets. It's the reason some CEOs opt for a $1 salary.
This is simply wrong.
Equity paid as compensation is taxed as ordinary income at the value of the equity at the time awarded, and is subject to marginal rates.
The gains from holding that equity and selling it later is taxed as capital gains if and only if held for longer than one year prior to sale.
No, it does not apply to previously taxed assets at all, only to an additional income you made from those assets. Equity grant is taxed when you excercise your stock options based on their current value. If the stock price goes up later, capital gains tax is only applied to the amount you gained, not the whole sum.
I would call that applying to previously taxed assets. Unvested RSUs (read: not taxed yet) that gain considerably over many years prior to vesting are still wholly taxed as regular income. Without additional income, there is nothing to be taxed therefore there shouldn't be any confusion as to what I mean by that.
Stock options are only one type of equity grants, the other being RSUs which have a cost basis of $0 and therefore the entire sum is subject to income taxes at vesting. Exercising stock options is not free, you must pay to do so at the exercise price which is done using post-tax cash, which again, had to have been taxed as regular income at some point.
It's true that if I buy some stocks for $100k I have (presumably) already paid taxes on that $100k. But if I sell the stock for $600k two years later, that extra $500k hasn't been taxed as income, and is only taxed as a capital gain.
> Capital gains taxes apply to both the rich and the poor, with the latter paying a whopping 0%.
Kind of silly to point that out. It's very easy for a "rich" person to have almost all of of their real income come from capital gains, but nearly impossible for many poor people to even have capital gains, much less arrange for it to be most of their income.
Rich people don’t become rich without first paying income taxes. Sure, once they have wealth, they mostly pay capital gains tax but if you and I have the same definition of rich, to sustain a luxurious life off investments alone, you had to have paid millions in income taxes which is more than most people will pay in their entire working years.
Additionally, turning $100K into $600K in two years is not as easy as you’re portraying it to be.
Capital gains, as others pointed out help in limited circumstances and typical equity compensation only marginally benefits.
Any person who is a police officer has X different rules for example.
Not a lawyer, but I do not think that would raise constitutional or fairness issues.
Genuine question. The article is about Apple. Why did you use Google as an example instead of Apple? Is there anything specific to Google that warrants using Google as an example instead of Apple, which is the company in question?
Or I think they dislike how google freemium model from ad revenue to push services has butchered many startups which would have been big today while apple is more secluded.
Think of gmail, chrome, gmaps, youtube, android, analytics, google cards, snippets etc. Only recently their revenue has more diversification than ads - at 89%.