Billionaires Blast off

[Elixir]

I'm afraid net worth stats utterly dwarf that (be perpared to scroll) :

View attachment 34567

Thank you - I was looking for that one. I think the moral of the conservative story is:
"Pay no attention to that purple squiggle that goes off the top of the page; it only applies to one out of ten thousand people anyhow. For everyone else, inequality is decreasing."

To me, it graphically (with considerable difficulty) demonstrates the "economic black hole" effect of mega billionaires.

 

[Canard DuJour]

Yep, but we get the predictable appeal to falling global Gini (with the graph conveniently truncated on the y axis )

Gini does not (necessarily) measure the rich-poor income gap. It's an average of income inequalities - the likelihood of households in a distribution having similar incomes. And of course, an average can be unchanged if some components rise while others fall. Countries with the same Gini score have quite different ratios of income share going to the poorest and richest deciles. Rising income shares of the richest are perfectly consistent with a flat or falling Gini if inequalities between the moderately well-off and moderately poor narrow; both within-country and globally.

In absurdum, the Gini score would be lowered by adding poor households, even though no one's any better off, or even if only the richest are any better off. That is not what people mean by falling inequality. Especially not in a discussion of the conspicuous consumption of the world's richest indivduals.

 

[Elixir]

Yep, but we get the predictable appeal to falling global Gini (with the graph conveniently truncated on the y axis )

Gini does not (necessarily) measure the rich-poor income gap. It's an average of income inequalities - the likelihood of households in a distribution having similar incomes. And of course, an average can be unchanged if some components rise while others fall. Countries with the same Gini score have quite different ratios of income share going to the poorest and richest deciles. Rising income shares of the richest are perfectly consistent with a flat or falling Gini if inequalities between the moderately well-off and moderately poor narrow; both within-country and globally.

In absurdum, the Gini score would be lowered by adding poor households, even though no one's any better off, or even if only the richest are any better off. That is not what people mean by falling inequality. Especially not in a discussion of the conspicuous consumption of the world's richest indivduals.

Very well put!
Now ... can we put the Gini back in the bottle?

 

[bilby]

 

[TomC]

But we are taxed such because they are not!!!!
Yes we are being screwed by unnecessary taxes. But if the billionaires were taxed at the same rates we were, we would find that we would accomplish far more with our tax money.

And I get that there’s a lot of government waste out their. Just run for Congress and try to cut defense spending. See what happens.

Something is very wrong here. During this pandemic where many, many businesses were forced to close for an extended period of time to "flatten the curve" it now seems California has billions of dollars of surplus tax money. Even after billions of dollars paid out in covid relief and fraudulent unemployment claims, California is swimming in money. Newsom is absolutely giddy as he throws this surplus money around like a drunken sailor.

OK. Per post #193.
California isn't completely broke. Unlike some states, the government of California(Newsome) managed to keep things going fairly well, given the challenges faced during the Trump virus debacle. $38B isn't really swimming in money, considering the size of the state. But they aren't an economic basket case either.

But, somehow, you're still complaining about Newsome's performance? How does that make any sense to you?
Tom

 

[Loren Pechtel]

I'm not seeing how it argues that -- the two issues seem unconnected to me. Feel free to walk me through it if you care.

But all the same, yes, long term capital gains should be taxed at the same rate as personal income, I think. On the other hand, long term capital gains should be calculated with the basis adjusted for inflation. The way they do it now, the government inflates the currency and then measures purchase price in bigger units than it measures sales price in, which means part of the calculated capital gain is fictional income, but you're really taxed on it. The lower capital gains rate (very roughly) compensates for the higher alleged gain.

It's not "very roughly"--the two numbers are very close.

How roughly the lower rate compensates for the effects of inflation depends on the rate of inflation and for how long the asset is held. There is no way the tax rate (a fixed number) can adequately compensate for nominal gains for all realized assets.

A better way which is more accurate is to adjust the capital gains for inflation and then treat the adjusted income as income for tax purposes.

The result varies from stock to stock, I'm talking about the average.

Going to capital gains at ordinary rates but indexed for inflation will have a very minimal effect on the average tax bill, but there will be winners and losers.

There's a hidden "problem" with the indexing approach, though--to be fair it should be applied to interest, also. That would take a big bite out of the taxes collected on interest income.

 

[laughing dog]

How roughly the lower rate compensates for the effects of inflation depends on the rate of inflation and for how long the asset is held. There is no way the tax rate (a fixed number) can adequately compensate for nominal gains for all realized assets.

A better way which is more accurate is to adjust the capital gains for inflation and then treat the adjusted income as income for tax purposes.

The result varies from stock to stock, I'm talking about the average.

I realize you think you are, but you are not.

Going to capital gains at ordinary rates but indexed for inflation will have a very minimal effect on the average tax bill, but there will be winners and losers.

Just like there are winners and users with the current system. Just different winners and losers.

There's a hidden "problem" with the indexing approach, though--to be fair it should be applied to interest, also. That would take a big bite out of the taxes collected on interest income.

There is no problem. First, interest income is earned during the tax year just like wage income, and wage income is not indexed. Second, nominal interest rates include expected inflation, so indexing is not necessary on the income. So, there would be a hidden problem with the difference between actual inflation and expected inflation, but that problem is dwarfed by the inherent issue of not indexing capital gains (something you have no problem with).

 

[Jarhyn]

Just like there are winners and users with the current system. Just different winners and losers.

and, more winners overall, fewer losers, the ones in top are still where they are, just not as far removed from everyone else.

They just can't afford yachts as often.

 

[Derec]

Stupid "Billionaire's Trolly[sic] Delima[sic]" meme

How is Bezos or Branson sending people to the edge of space running over any groups exactly?
The opposite is true. Blue Origin has created over 2000 well-paying jobs. Virgin Galactic also employs people.
Even at Amazon, the much maligned warehouse jobs pay more than comparable warehouse jobs elsewhere.

 

[DBT]

Stupid "Billionaire's Trolly[sic] Delima[sic]" meme

How is Bezos or Branson sending people to the edge of space running over any groups exactly?
The opposite is true. Blue Origin has created over 2000 well-paying jobs. Virgin Galactic also employs people.
Even at Amazon, the much maligned warehouse jobs pay more than comparable warehouse jobs elsewhere.

Workers not getting a fair market share of the wealth they help to produce, consumers paying too much, higher taxes for the top tier, funds that would benefit society as a whole.

 

[Derec]

But we are taxed such because they are not!!!!

There aren't enough billionaires in the US to really make that much of a difference. US billionaires have a cumulative wealth of $4.6T. Even in the very unlikely case that we were to implement the Cherokee Princess' 6% wealth tax, that would bring in less than $280G.

Yes we are being screwed by unnecessary taxes. But if the billionaires were taxed at the same rates we were, we would find that we would accomplish far more with our tax money.

What do you mean? Billionaires are not taxed lower than most people. They do not have access to EITC, child tax credit and other tool that allow 47% of Americans to not pay any federal income taxes at all or even pay effective negative federal taxes.

This is an interesting graph, although it lumps all 1%ers together and does not single out the super-wealthy.


What the Left wants is special taxes for the super-wealthy, either by redefining income or taxing wealth.

And I get that there’s a lot of government waste out their.

Yes, their[sic] is. And the Congress wants to add about $3.5T of it now.

Just run for Congress and try to cut defense spending. See what happens.

Squad private Cori Bush ran on defunding the Pentagon.

 

[Derec]

Don’t get me wrong, I’m not against billionaires, or against them spending their money however they want. I’m against billionaires who pay taxes at a far less level than ordinary Americans.

Don't they though? Many "ordinary Americans" pay no federal income taxes at all, and in fact have a negative effective tax rate.
Bezos is paying hundreds of millions of dollars in taxes per year. You may argue that he should be paying more, but it is dishonest to suggest that he is paying (next to) nothing like Warren et al are suggesting. Or to claim that they have a lower tax rate than "ordinary Americans". To argue that dishonest tactics are applied, like redefining income as increase in paper wealth.

All while claiming we can’t afford to spend more money on social programs and infrastructure. Things that benefit ordinary Americans.

That has little to do with not taxing billionaires enough.

Billionaires going on space junkets doesn’t benefit people. It’s just their version of Disneyland. (Where the rest of us have to wait three hours to go on to Space Mountain.)

Blue Origin and Virgin Galactic create many well-paying jobs. And unlike Disneyland, these companies will probably develop technologies that will benefit ordinary people down the line.

 

[Derec]

I'm afraid net worth stats utterly dwarf that (be perpared to scroll) :

Some people really need to learn about log scales!

 

[DBT]

Why this defense of excessive concentration of wealth into the hands of a small percentage of the population?

The situation clearly does not benefit society or the economy....so why defend it? What is the motive?

 

[Derec]

Our laws are skewed in favor of the uber wealthy who avoid taxes and pay far less of their income in federal taxes than ordinary Americans.

Not true.

The bottom 90% of American wage earners have to pay a 15% Social Security tax (although your employer pays half that’s still coming out of money they could be paying you.

That is not really a proper tax but a premium for mandatory insurance (medical (Medicare, Medicaid), basic retirement and disability (Social Security)).

They also have to pay their effective tax rate which could be as much as 24% (marginally).

You are forgetting all the refundable tax credits people get, esp. if they have kids. You have EITC (a lot more generous for those with children) and the child tax credit, which has recently been increased. That leads to many families to have a negative effective tax rate.

Thus for every dollar they earn over about 90K, they pay 40% in taxes. Plus state income taxes in most states. Bezos maybe pays an effective tax rate of 3-4%.

Only if you define "income" as "increase in paper wealth".

Ordinary hard working Americans are getting screwed over by these billionaires who get to enjoy rocket thrill rides, while the rest have to struggle to pay a mortgage, health insurance, and taxes.

I agree that middle class Americans are getting screwed by taxes, especially those of us who don't have kids. But I do not think it is fair to blame Bezos et al for it. And the whole issue is misunderstood. Yes, Bezos was one of the four who took the first trip. But he did not just pay for a joyride on somebody else's system (Dennis Tito was the first to do that 20 years ago, and he got no hate for that, go figure!) but he started a company that built the fucking rocket and capsule. And yes, he paid a lot of taxes in the process too.

 

[Derec]

Why this defense of excessive concentration of wealth into the hands of a small percentage of the population?

The situation clearly does not benefit society or the economy....so why defend it? What is the motive?

So what's your solution? Expropriation?

 

[Derec]

No! My problem is that he pays nothing or almost nothing in taxes

Not true. He pays hundreds of millions of dollars in federal income taxes - $973M in the five years between 2014 and 2018. In what universe is that "nothing or almost nothing"? In addition there are other taxes such as property taxes.

he can easily afford to buy (not rent) a $500 million yacht and afford to build a rocket to give him a joy ride in space.

The yacht is for his use, sure, but the rocket is part of a different company (Blue Origin) that employs many people and exists for more than that one flight Bezos Brothers, the 18 year old Dutchman and the 82 year old Mercury lady were on.

If he paid a fair share in taxes, I could care less what he does with the rest of his money.

What would be a "fair share of taxes" without redefining what you mean by "income"?

 

[untermensche]

There aren't enough billionaires in the US to really make that much of a difference. US billionaires have a cumulative wealth of $4.6T. Even in the very unlikely case that we were to implement the Cherokee Princess' 6% wealth tax, that would bring in less than $280G.


What do you mean? Billionaires are not taxed lower than most people. They do not have access to EITC, child tax credit and other tool that allow 47% of Americans to not pay any federal income taxes at all or even pay effective negative federal taxes.

This is an interesting graph, although it lumps all 1%ers together and does not single out the super-wealthy.
View attachment 34586

What the Left wants is special taxes for the super-wealthy, either by redefining income or taxing wealth.

And I get that there’s a lot of government waste out their.

Yes, their[sic] is. And the Congress wants to add about $3.5T of it now.

Just run for Congress and try to cut defense spending. See what happens.

Squad private Cori Bush ran on defunding the Pentagon.

Oh wow.

Large parasites pay a fraction of what they steal from workers in taxes.

We don't want to tax their entire income at a higher rate.

Just the income over 1 million.

Don't cry.

 

[Derec]

Well, yes. But that’s not how Bezos and the other billionaires do it. They never sell their stock. They simply borrow against them and accumulate debt. Bezos new $500 million yacht will be 100% financed by a bank that is eager to lend him the money. When the note is due though, he won’t sell stock to pay it off, or even give them stock. That would create a substantial tax issue for him. Instead he just borrows again from eager lenders, often the same ones. On paper they’re getting rich off these loans.

So when do these banks actually get paid back? Never mind the interest payments, how does Bezos pay those? Because from your explanation it would be pretty much never. Which makes no sense.

Bezos and Musk pay little if any tax, because on paper they do not make any money.

Bezos paid $973M over five years, on $4.2G of income.
Musk paid $455M on $1.5G of income over the same period.

So both of your assertions are wrong. They pay substantial amounts in taxes, and they make a lot of money on paper.

But their net worth is soaring. They never realize the gains they’ve made this way. Their true tax rate is less than 4%. Ordinary workers are paying 15% just for social security tax!

Net worth increases that are not realized are not income ad are therefore not taxable. Not for me, not for you, not for Bezos. Taxes divided by paper appreciation of assets is not the "true tax rate" just because some journalist declared it as such.

One way to stop this merry go round is to tax estates at very, very high rates. Banks won’t let them do this if they risked losing it all due to estate taxes.

Isn't the estate tax already 50%?

 

[Derec]

Large parasites pay a fraction of what they steal from workers in taxes.

Define "stealing".