Not much appetite to discuss up in here?
The fact that Jeff Bezos can manage to quality for a child tax credit is a bit of a loophole, though.
https://www.propublica.org/article/the-secret-irs-files-trov...
> In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.
You might argue that they considered the possibility and decided closing the loophole would do more harm than good (means testing frequently does this), but it certainly wasn't the intention of the credit to give $4k to the world's second wealthiest person.
If they did not intend for Bezos to take advantage of income limits, they should have written the law better so that he couldn't.
Again agreeing or disagreeing with policy doesn’t change if something is a loophole or not. Handouts because someone is installing rooftop solar are still handouts even if they get baked into tax policy.
Exercise an options contract and you’re taxed before you sell the shares. At that point you could still ultimately lose money just as with capital gains.
The problem with exercising an option is that the stock might not be traded or can't be sold, then you have to pay the tax out of pocket, since Uncle Sam doesn't want some private non-traded stock.
https://www.propublica.org/article/the-secret-irs-files-trov...
> So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it.
After decades of avoiding taxes on it, there's a final loophole!
> The notion of dying as a tax benefit seems paradoxical. Normally when someone sells an asset, even a minute before they die, they owe 20% capital gains tax. But at death, that changes. Any capital gains till that moment are not taxed. This allows the ultrarich and their heirs to avoid paying billions in taxes. The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code.
I think you're may be confusing it with estate taxes. (Which the ProPublica article addresses in the subsequent few paragraphs.)
> And after death, the common understanding goes, there’s a final no-escape clause: the estate tax, which imposes a steep tax rate on sums over $11.7 million. ProPublica found that none of these factors alter the fundamental picture.
> It’s clear, though, from aggregate IRS data, tax research and what little trickles into the public arena about estate planning of the wealthy that they can readily escape turning over almost half of the value of their estates. Many of the richest create foundations for philanthropic giving, which provide large charitable tax deductions during their lifetimes and bypass the estate tax when they die.
> Wealth managers offer clients a range of opaque and complicated trusts that allow the wealthiest Americans to give large sums to their heirs without paying estate taxes. The IRS data obtained by ProPublica gives some insight into the ultrawealthy’s estate planning, showing hundreds of these trusts.
I was surprised to see that arrow 100% of the way to the left — but then after I voted, it changed to say "Most Readers Rated This Article CENTER / FAIR". So I'm not sure why it defaults to left, but I don't think that represents the actual rating.
- you make $100k a year
- you pay $20k in taxes
- one year, you buy a house for $400k
- in the next year, its value doubles to $800k
- I say "your income (including unrealized gains) last year was $500k. You only paid $20k in taxes. That's only a 4% rate! How unfair!"
Among other things, I find the whole thing silly because of course it'll only be used to criticize the low tax rates of people who have unrealized gains. If Amazon crashes and Jeff Bezos's net worth goes down by $20B and he pays $100M in taxes, no one will write an article about how unfair it is to tax the poor guy $100M on his incredibly low income of negative $20B. Poor guy, he'd probably be the lowest-income person in the whole country!
I have bought, lived in, and sold several houses over my adult life. Never in those transactions was I “homeless” in the colloquial sense. Here is the trick in case you are interested and unsure how to do it—after your closing date is set…you go find another place to rent, you move all the stuff in the home that you are selling to the place you are renting. Then you perform the transaction to sell your home. Go home to your rental place, pour all the cash on your bed you earned from the sale of your home, and roll around in it.
To steel man property taxes, land is immobile and requires certain government services even when it is unused (perhaps even more-so). Taxing that property is a direct an efficient(from a taxation perspective) way to fund the government services associated with that property.
I'm trying to be more involved in my local community, but we need some change on the national level, and I'm concerned things wont get better until they gets worse first.
In percentage terms the middle class is overtaxed the most of course. But percentage terms are an extremely misleading way to look at this.
Being middle class I'm more angry that the bottom 50% on net pay no income taxes and I'm a net payer into their lifestyle.
Ah yes, that wonderful lifestyle of being poor. How dare they not pay for that privilege.