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This insanity stems from the media misleading the public into thinking people like Musk (for example) actually have hundreds of billions in cash. He doesn't. What he has is Tesla stock, which the public is welcome to buy as well.

If you bought say $5000 of TSLA 3 years ago, that would now be worth nearly $100,000. The media will try to tell the uninformed that you've made a ton of money, and "have paid no taxes". But you haven't made a ton of money, you still just have TSLA shares. As soon as you convert them to USD you have to pay tax on the gains like everyone else.

If you can borrow against it, you can tax the loan proceeds. It just moves the tax realization to when you receive liquidity for the asset versus a bonafide transfer, closing a loophole. Pay the loan back whenever you want.

https://financialpost.com/personal-finance/high-net-worth/el... (“Elon Musk, short on cash, keeps borrowing more and more money even as Tesla stock surges; Musk has US$548 million in personal loans from Morgan Stanley, Goldman Sachs and Bank of America, an increase of 8 per cent since May”

I mean...yeah. Normal people do exactly this every month with credit cards, mortgages, etc. Should you pay a tax on your mortgage loan amount?

Maybe? Depends on your net worth and your income. If the rules aren’t getting the desired results, you change the rules. Clearly (imho) the existence of billionaires demonstrates a deficiency in public policy and tax statute.

I don't think "there should be no billionaires" is a good starting point for deriving tax policy. I especially don't think it's good to have that as an undebated starting point.

To each their own politics and belief systems. Wealth is a form of power, government and democracy are checks and balances on power. Unchecked power corrupts. Ergo, my position. I appreciate that others might not agree, that’s what voting is for.

Well, every year I pay a tax on the value of my house and property. The difference is that I pay it to the state, not to the Feds.

Why on earth would you tax loan proceeds? Each time you take out a mortgage, auto, or credit card loan you want to be hit with a tax bill?

The wealthy are not the only people who borrow to fund to consumption -- the middle class does as well, and much more so than the wealthy.

https://www.peoplestaxpage.org/buy-borrow-die

TBH, that seems like more of a rant than something resembling policy analysis. It's also quite foolish -- loans are given out secured by some asset more valuable than the loan. That means when you die, the asset goes to the bank. Might as well set up a page advocating for people to get reverse mortgages and try to (incorrectly) frame it as a tax revolt.

Feel free to Google “buy, borrow, die” and pick a link where the content is delivered in whatever tone you find most palatable. It’s all the same concept (tax avoidance using loopholes and financial engineering).

> What he has is Tesla stock, which the public is welcome to buy as well.

Let them eat cake?

"have hundreds of billions in cash."

And so what if he does? The biggest issue I see is that so many confuse money/wealth with actual stuff.

It's the stuff - the goods and services that add value to our lives - that matter. Consuming stuff takes from society: the time, effort and material to produce it. Simply having wealth, in whatever form, is totally neutral. If Rich Guy has a trillion Dollars in the bank, it doesn't affect anybody. But if they spend it all on potatoes, then that is what would impact society by subtracting all of the potatoes and limiting their use by others.

Consumption is what takes from society. Wealth doesn't subtract (or add) anything.

What would your solution to rising wealth inequality be? Or perhaps you don't think there's a problem?

This isn't even a solution to wealth inequality so I think your question isn't relevant. Wealth inequality is a complex problem and you can't fix it by just taxing people more.

To actually answer your question, I don't have a solution, but I also don't think the problem is as bad as people make it out to be.

For this article's specific case I'd just patch the simple hole that you can't skip taxes by passing your shares on after you die. As long as the tax basis date isn't reset on inheritance, everything still works. Someone will pay the taxes eventually. It's an easy change and doesn't really change anything for the lives of most people and it makes more rational sense that way. It's basically fixing a bug in the current law.

> This isn't even a solution to wealth inequality so I think your question isn't relevant. Wealth inequality is a complex problem and you can't fix it by just taxing people more.

Why not? Redistributive wealth tax seems like a reasonable way to accomplish this, along with raising marginal tax rates, closing tax loopholes, and a 100% inheritance tax. Use the excess money for direct investment in material infrastructure, social benefits, and (most importantly) education, and I would imagine the wealth distribution would look quite different in 20 years.

We design the economic system we live in. We can change it any time. Capitalism is a human invention: we create the rules to the game. This isn't some law of physics or some truth of the universe.

$15/hour federal minimum wage to start, combined with Medicare for all, funded via cuts to the military budget.

More of the US budget already goes to medical care and social services than military. The problem is how inefficiently it's used.

I've got an anecdote on this. I've requested some paper documents, a simple thing that should not take a long time to process. It's literally just to look at the request, check a database, and print a response; the only reason for human involvement is that it's on paper.

I don't see how it can take more than 15 minutes, but it's been in processing for 14 months now, and I paid $200 for that service. So in a frictionless world, it produces $800/hr. But I'm sure that the end worker receives something like mentioned $15/hr, which looks like extreme inefficiency. They lose at like 98% of it somewhere just because of that inefficiency. So it's not about taxes, but about the effective use of money. They can easily 2x the wage, and maybe even 10x, if someone would spend some time to figure out where the leak is.

>$15/hour federal minimum wage to start,

Typically not effective at solving any problem, while also causing new problems.

> combined with Medicare for all, funded via cuts to the military budget.

Largest and most insane military ever built and if you cut it completely and doubled income taxes(in addition to forcing everyone to pay, no low income exception) you wouldn't put a dent in your proposed plan. You would have so much debt the subsequent inflation would be beyond control.

Remove progressive taxation and other obstacles to generating generational wealth. Forcing equality through pushing downwards has been disastrous so instead let’s remove barriers to moving upwards.

This is the mindset that people on the whole lack. Why are people obsessed with taking the wealth away from the billionaires? if the social mobility is high all the undeserving billionaires are going to squander their wealth away!

Countries with less progressive taxation (i.e. Russia, Brazil, etc) have even worse wealth/power inequality than the U.S.

The U.S. was at its most "equal" with strong unions and high inflation (1970s). Perhaps that's what we need again. Strong labor bargaining and run inflation hot for a while. Also raise the non-primary home property tax so that the rich can't shelter their wealth in real estate.

If inequality were the only problem, then your solution would work. Unfortunately, there are other problems as well, and your solution would make some of them worse.

rising wealth inequality is caused by the FED printing money, it's that simple. Expansionist monetary policy transfers wealth from everyone to those who are leveraged into assets with debt. That's mortgage holders, people who take out business loans, large companies and those who hold equities in large companies.

The article is about the estate tax, not an annual wealth tax, and loopholes to work around it ultimately taking advantage of lower tax rates on capital gains than on estates (not to mention wages) and deductions for "charitable" donation. You don't need new taxes on the wealthy to close these loopholes, you just need to eliminate them: charity is a nice thing you can do with your after-tax income, and all income should be taxed on the same progressive schedule.

So many people claim Jeff Bezos and Elon Musk pay no taxes yet the leaks from the irs show that Musk paid $455 million from 2014-18 and Bezos paid 973 million in the same time.

Wow that's almost 0.02% of effective tax rate @ 80 million USD per year!

You are conflating rise in stock price vs actual income.

Hmm 250 million a year from Bezos. Who made something like $50 billion in that time-frame.

Can I get the 2% tax rate too, or is it just for Bezos?

> Hmm 250 million a year from Bezos. Who made something like $50 billion in that time-frame.

Except fot the fact that he didn't make $50 billion.

If he can use the 50 Billion as collateral in a loan with which to fund his life, he clearly made something.

If I can use my previous income to get a loan from Visa (by credit card) does that mean I 'made' money on my future earnings?

I'm not opposed to the idea of front loading taxes by taxing loans after a certain threshold.

IMO this kind of thinking is narrow-minded. Americans seem very opposed to taxing wealth for some reason. I believe it's a fear of change mostly, or perhaps an irrationally strong belief in some narrow school of economic thought.

Even if you are fully indoctrinated though and are ideologically opposed to a wealth tax, perhaps you can recognize the insanity of capital gains tax, whereby Bezos (upon selling his shares) pays just 15%.

The top federal tax rate on long-term capital gains is 23.8%. I'm not sure where your 15% comes from.

Calculation of capital gains does not account for inflation. Taxing a nominal increase in value over multiple years at the same level as income makes no sense.

I resent the implication that I am indoctrinated in some parochial ideology. Especially considering I'm not even American.

He didn't "make $50 billion". The assets he holds increased in value.

You wouldn't say you "made $100k" if the value of your house increased by that much, and you weren't selling it.

> Can I get the 2% tax rate too,

Sure.

Make $200k/yr and in 2014 buy 556 Bitcoin for $220/btc and in 2018 you will find your effective tax rate 2014-2018 is about 2% ... until the price of Bitcoin dropped or until you sold the Bitcoin, at which point you'll be taxed (which is also the situation for bezos).

[I could otherwise pick any stock that has gone up a _lot_ since then and make the same example.]