Is this really what people strive for in the USA. To avoid contributing anything back to the country that helped them achieve everything they've ever wanted?
If at some point we no longer want to incentivize that behavior, the government can simply remove the tax break. Moralizing about how people shouldn't engage in the behavior that the government is encouraging them to by offering tax incentives is beyond useless.
> At least 90% of [the QOF's] assets must be “qualified opportunity zone property” which can be any combination of (1) stock in a QOZB corporation, (2) partnership interest in a QOZB structured as an LLC or other pass-through partnership entity, and/or (3) qualified opportunity zone business property. However, this requirement doesn’t take effect immediately which means the QOF has time to find qualifying investments without rushing. Additionally, the 90% rule temporarily loosens if you deposit more cash into the QOF.
So you have to invest the assets either in (qualified) property in the depressed area, or in a company (QOZB) in the depressed area, which then has to meet these requirements among others:
> At least 50% of [the QOZB's] total gross income is derived from the conduct of a business in a qualified opportunity zone.
> At least 40% of [the QOZB's] intangible property (e.g. patents, trademarks, etc) must be actively used inside a qualified opportunity zone.
> At least 70% of [the QOZB's] tangible property owned or leased by the business must be qualified opportunity zone business property.
If this is some giant conspiracy by "the wealthy" to get some tax benefits, it's odd that they have put so much effort into making sure there is actual economic benefit for the depressed areas.
You're right that moralizing is beyond useless. Instead let's define the bounds of our morality by our tax code. What can go wrong?
Which, with the growing wealth inequality, explains that why the tax burden on the middle income keeps stable or grows; while services and benefits keep shrinking.
What ratio would you consider fair?
[1] Data is from 2019, the latest available from the IRS: https://www.irs.gov/statistics/soi-tax-stats-individual-stat...
The government already controls a budget in the trillions of dollars - several orders of magnitude more than any private entity - and so far has not used it to meet basic needs like housing. What is the evidence that giving them additional money will solve the problem? It doesn't cost anything to relax zoning laws and let people build more housing.
> The "money" the very wealthy have is not cash sitting in a checking account but usually shares in some corporation. That absolutely has utility if you want to continue having a say in how your company is run.
So what? That’s the cost of of going public. That the wealthy found a way to abuse it (share classes) means they’ve made the stock market less useful for everyone else.
> Besides, should the government come around and check for any property that it deems you're not sufficiently utilizing and confiscate it from you? It seems like that policy could be abused.
You’re jumping the gun here but…
The government is already involved in property rights. There is no concept of ownership without a government supported legal framework.
A government is expected to be involved with limited resources, and discourage undesirable outcomes while encouraging good ones. My government does this through tax benefits and tax penalties.
I don’t see most people asking for more than this.
You mean like offering a tax break to incentivize investment in certain areas?
I don't think someone being able to continue owning a portion of a company they created is a undesirable outcome, do you?
For large businesses, they’re finding ways to pay less than 20%.
But tabulate all of the ongoing costs to build and maintain our national infrastructure, legal system (no business without the courts), law enforcement branches, etc.
Deduct the income taxes currently levied on wage earners.
Roughly, the rest of the money needs to come from corporate taxes and capital gains.
That’s not what’s happening though. Instead, it’s quite alright to double tax middle income earners.
If you recall, property tax deductions were capped and so overnight the Republican government found a way to increase the average earners’s budget. Mortgage interest deductions are next.
> For large businesses, they’re finding ways to pay less than 20%.
People do pay capital gains tax when they realize capital gains. What makes you think they don't?
Businesses pay corporate income tax which is a different thing altogether. They're already double-taxed (when the company turns a profit, and again when they distribute those profits to shareholders).
> But tabulate all of the ongoing costs to build and maintain our national infrastructure, legal system (no business without the courts), law enforcement branches, etc.
> Deduct the income taxes currently levied on wage earners.
> Roughly, the rest of the money needs to come from corporate taxes and capital gains.
Not true at all. There are excise taxes, import duties, sales and property taxes (these fund local and state governments, which handle a lot of the courts and law enforcement), payroll taxes (paid by the employer, not part of the income tax). There are other options that are not implemented in the US, like VAT, land-value taxes, financial transaction taxes. The government also has other sources of funding like fines, fees, bonds, inflation. There are many things besides capital gains and corporate income taxes.
> If you recall, property tax deductions were capped and so overnight the Republican government found a way to increase the average earners’s budget. Mortgage interest deductions are next.
The average earner doesn't itemize deductions because they won't exceed the standard deduction, which was raised at the same time that the state and local tax deductions were capped. Those deductions were mainly a way to subsidize states that charge high state taxes (which happen to have more high earners) at the expense of states which charge low income taxes (and happen to have lower earners).
Mortgage interest deductions are already capped and again mainly benefit higher earners who can afford large mortgages that would actually have enough interest to make it worthwhile to itemize.
But then these corrupt, America-hating billionaires will spend millions digging up dirt on you, funding your opponents, and claiming you’re sending jobs to China.
This is where your argument breaks down. Gerrymandering has completely eliminated this as a reasonable belief in most places.
Most voters don't even care about issues, they care about parties, their team. As such, they don't care or want to incentive anything except their own team winning.
> the government can simply remove the tax break.
If most people want abortion to be legal, the government can simply legalize it.
Oh wait!
Seems like the problem is the voters then.
> If most people want abortion to be legal, the government can simply legalize it.
Per your earlier statement, that is not what most voters want. They want their team to win.
Yes. That means that your claim
> it's because the government (and by extension, the people it represents) want to incentivize that particular activity
particularly the
> (and by extension, the people it represents)
is false.
----
> Per your earlier statement, that is not what most voters want. They want their team to win.
False. The vast majority of people want their team to win.
Simultaneously, most people want abortion to be legal.
These statements are both true. The logical fallacy is here is an inability to recognize that it's and, not or.
In an ideal world, they would want both and would get both. However they have to pick. Hence it is not that they don't want it, it is that they want it and cannot get it because they don't want to pay the cost of getting it.
Yes, as we’ve seen, it is very easy to get the government to repeal a loophole that enables a billion-dollar company to dodge a tax. Why, it is virtually child’s play! The poors just need to hire a lobbyist, outspend the tax-dodging lobbyists, and Bob’s yer uncle! The government, as you say, will simply remove the tax break.
Except the wealthy play games like extending Harlem through central park to midtown so that they can fund building their own luxury apartments as economic development in a "depressed" area.
Not unless you're extremely rich or extremely poor, that is.
There are even plenty of things people might want to donate too that only governments do, the Red Cross etc are hardly building space telescopes or US highways.
https://www.gsa.gov/about-us/regions/welcome-to-the-greater-...
What would have happened without an open GPS? Without TCP/IP or all that medical research etc etc.
Now try to figure out what WWII would have looked like without lend lease etcand I just have no idea.
PS: I doubt most charities are a net positive impact, but again it’s complicated.
This is effectively a tax incentive to open new businesses in these somewhat remote and low-income areas. I dont think it's a bad thing if it does indeed encourage job creation and economic activity in those areas that otherwise would've stagnated.
Why don't people want to contribute back to an environment that enabled their success?
I have too many family members that will avoid acknowledging anything the government does for them.
"The social contract."
You are working from a flawed model. Government spending is not tied at all to revenue. Over the past three years the federal government has dropped over 5 trillion dollars on the economy from a helicopter.
Why not take advantage of a loophole when money can and is being created out of thin air?
The fairest solution is to scrap CGT and associated capital loss write-offs.
This allows the middle class to thrive by investing in productive enterprises and not getting taxed yet again to do so.
It's the worst kind of tax that punishes success by stealing your after-tax money.
As for your appeal to nation, the US will waste your money on slaughtering Afghanistani children with bombs and handing out cash to serial fraudsters (look up how many people on Social Security are actually real). Most tax money is wasted by government.
Calling out other parasites, don't forget you also are one.
Any example of a cooperative usually descends into chaos, an example being worker's unions which descend into criminality, corruption and pure evil (teacher's unions regularly defend sexual predator teachers, for example) more often than not.
It's also a pure fallacy and just plain wrong to suggest I claim profit from Cloudflare. Cloudflare has not and does not issue dividends, meaning all of the profit is reinvested in business operations or goes to the workers.
As an investor, I don't see a single cent of profit in this case.
You need to chill, dude. I am not defending child molesters. I am not even claiming that capital investment is evil. I am simply pointing out the fact that the relation is parasitic.
> As an investor, I don't see a single cent of profit in this case.
Then you aren't paying capital gains tax either, so I don't see the problem.
I'm curious though, do you also not expect to get any profit for this particular investment in the future? When you have got back your inflation adjusted initial capital + a modest interest + a reward for the risk, do you mail your share certificates back to Cloudflare with a note, thank you, good doing business with you?
At least, that is what I plan to do. Stop working and live as a full-time parasite as soon as I can afford it. Maybe others here are more altruistic.
Cloudflare does not issue dividends. Dividends are distributions of profit. If I bought Cloudflare stock at $30 and sold at $90, for example, the $60 profit I'm making isn't taken from Cloudflare, it's paid by the buyer on the other end of the stock trade, which is usually an institution or a retail buyer.
I'm not and are never "taking profit" from Cloudflare, in fact I provide them liquidity and also allow them to dilute my ownership in order to pay their employees in stock grants.
Selling shares doesn't really mean the company is hurt by it, especially since I'm a retail investor who doesn't have the capital to impact the price even a single cent.
Owning their stock when they aren't paying dividends is a bet that either growth of the company will inflate the price so I can profit, or it's a bet that they'll one day issue dividends (not anytime soon).
The profit you get from buying and selling on the market is either a result of the shares being kept happy, or taking advantage of market mechanics. The latter is mostly a form of gambling that doesn't produce value.
The same money isn't taxed again. Only the gains on top of that.
Some sort of tax on wealth or the proceeds of that wealth is necessary, otherwise you end up with a society where only the middle class pays tax while the people who benefit the most from society, the rich, live tax-free. It's either this or a simple wealth tax.
The very fact that some of these places exist for a long time; means that it's not worth it to invest in them even with the tax breaks.
Not sure that’s correct. https://thehill.com/policy/finance/599753-study-57-percent-o...
If I had billions of dollars I would always strive to legally pay as least taxes as possible and use the funds to contribute back the country in much more efficient ways, including investing in people who are provably getting shit done.
Here's the latest of a constant firehose of misuse of funds I've seen. The gist is that a Stanford professor is basically leeching $40K of tax money at a $5000/hr rate for "consulting" about social justice and equity in schools. I'd rather give that $40K directly toward educational supplies for underprivileged students, or to a hundred tutors and therapists at $50/hr, or something else.
https://nypost.com/2022/04/08/stanford-prof-calls-cops-on-be...
How does that make your case?
Don’t let clickbait distract you from the real pain.
"the latest of a constant firehose"
One order of magnitude is literally 10x (10¹) Two orders of magnitudes is 100x (10²) A million orders of magnitude would be 10¹⁰⁰⁰⁰⁰⁰. Millions of orders of magnitude would be larger still.
There are estimated between 10⁷⁸ to 10⁸² atoms in the universe.
Perhaps you meant to say “literally six to nine” rather than “literally millions”?
I agree it’s wasteful, but this seems more an indictment of Stanford and the veneer of prestige.
It’s also tax dollars that put a check on the nonsense.