243
you are viewing a single comment's thread
view the rest of the comments
view the rest of the comments
this post was submitted on 05 Dec 2023
243 points (98.8% liked)
News
23311 readers
3673 users here now
Welcome to the News community!
Rules:
1. Be civil
Attack the argument, not the person. No racism/sexism/bigotry. Good faith argumentation only. This includes accusing another user of being a bot or paid actor. Trolling is uncivil and is grounds for removal and/or a community ban. Do not respond to rule-breaking content; report it and move on.
2. All posts should contain a source (url) that is as reliable and unbiased as possible and must only contain one link.
Obvious right or left wing sources will be removed at the mods discretion. We have an actively updated blocklist, which you can see here: https://lemmy.world/post/2246130 if you feel like any website is missing, contact the mods. Supporting links can be added in comments or posted seperately but not to the post body.
3. No bots, spam or self-promotion.
Only approved bots, which follow the guidelines for bots set by the instance, are allowed.
4. Post titles should be the same as the article used as source.
Posts which titles don’t match the source won’t be removed, but the autoMod will notify you, and if your title misrepresents the original article, the post will be deleted. If the site changed their headline, the bot might still contact you, just ignore it, we won’t delete your post.
5. Only recent news is allowed.
Posts must be news from the most recent 30 days.
6. All posts must be news articles.
No opinion pieces, Listicles, editorials or celebrity gossip is allowed. All posts will be judged on a case-by-case basis.
7. No duplicate posts.
If a source you used was already posted by someone else, the autoMod will leave a message. Please remove your post if the autoMod is correct. If the post that matches your post is very old, we refer you to rule 5.
8. Misinformation is prohibited.
Misinformation / propaganda is strictly prohibited. Any comment or post containing or linking to misinformation will be removed. If you feel that your post has been removed in error, credible sources must be provided.
9. No link shorteners.
The auto mod will contact you if a link shortener is detected, please delete your post if they are right.
10. Don't copy entire article in your post body
For copyright reasons, you are not allowed to copy an entire article into your post body. This is an instance wide rule, that is strictly enforced in this community.
founded 1 year ago
MODERATORS
A few things to note about this case.
First, this couple has spent far more money fighting this case in court than it owes in taxes. They are suspiciously well funded.
There is roughly $2.6 trillion dollars in untaxed earnings being held overseas in order to avoid taxation.
US businesses pay taxes on income, but foreign investments used to only be taxed when an asset was sold. This is a massive loophole for international businesses that allowed them to stash earnings indefinitely by moving money from one bank account to another, and only repayriating the money when it would minimize tax liability.
Closing this loophole without a one-time levy would have rewarded corporations engaged in tax avoidance with a $2.6 trillion tax cut.
The Moores did not receive any distributions or payments because they did not want to receive any taxable distributions or payments. That's the scam, to make it look, on paper, like they aren't earning anything while their portfolio grows. Meanwhile, they are free to leverage that value in the form of loans.
This is not a fight between the big bad IRS and a mom and pop investor just trying to make ends meet. This is international oligarchs hoarding wealth in tax shelter nations, and if the SCOTUS rules in their favor, it's going to come out of taxpayer pockets.
That is an excellent writeup, but misses the key argument:
is really just a fancy way of differentiating "realized" income (where an asset was sold for more than you paid to buy it, and you have the profit in hand) vs. Unrealized Income (where an asset is valued at more than what you paid to buy it, but you haven't sold it yet). It is more of a burden to tax unrealized income, because some unrealized assets aren't able to be sold easily and applying a tax to those may force those assets to be sold early if the tax is high enough.
So while it creates loopholes where the wealthy can structure their businesses so they take a very low personal income while financing much of their lifestyle from their unrealized assets, there is also an element of fairness in it: imagine the shitshow if you had to pay extra every year if you owned a house outright but the property values kept going up?
The answer is in the plain text of the 16th amendment, though:
Where it gives the Congress power to collect taxes on all incomes, full stop, without regard to whether they are realized or not. Congress does tax unrealized income, after all, such as on estates, they just do it with a large amount of restraint because they know that it's not always appropriate.
And while normally we can count on this Conservative court to vote in favor of the plain text in the Constitution, I am not so sure on this one. Perhaps the writers of the amendment should have had the forethought to throw a "shall not be infringed" in there, since those are the only words some Conservatives know in the Constitution.
"imagine the shitshow if you had to pay extra every year if you owned a house outright but the property values kept going up"
Like property taxes, then. ;-)
Realistically, I understand the issue. If I had to pay taxes on the increase in price on my house (say from a $300k valuation three years ago to a $500k valuation after the market bubble), I'd be fucked to find 15% of that overnight. Of course, if they allowed that to be offset by the primary residence exemption, it would be a zero cost. Without that, it would still be a non-issue for 95% or more of US taxpayers because most people simply don't own an illiquid asset that increases in capital value (much less an international one), and if you exclude secondary real estate that non-issue number probably increases to more then 99.9%.
Man i wish more people i knew could understand your post.
Where the fuck is the property tax rate 15%?? Highest in the US is still less than 3%.
https://www.rocketmortgage.com/learn/property-taxes-by-state
I faced this exact scenario. I bought my house in Nov 2019 - right before the giant pandemic price increase. It's gained $200,000 in value and my property taxes went up by $200/month. Which at my income level is not an absurd burden.
I don't think we should have owner occupied exemptions on property tax, and I'm happy to pay my share of that tax to keep my city functioning. I DO think we should have burdensome sales/transfer taxes on non-occupying owners.
The property tax was separate, and it happens regardless. The 15% is the long term capital gain rate - if the value of an asset increases (say 300k->500k) I have a 200k gain. I don't pay tax on that 200k until I sell, but if there were an in-process gain tax, I would. So instead of owing taxes on my profit/gain when I sell, I would pay the gain each year (and carry over a loss if the value of the house decreased). Coming up with 30k (200kx15%) would be a tough think to do simply because my neighborhood got popular in the Real Estate market.
Oh sorry, I thought you were talking about current taxes, not a hypothetical future wealth tax. Of course a wealth tax should exempt one primary owner occupied property until sold.
My other big question: What about times when the asset doesn’t pay off? Does the US government cut me a check or did I just get taxed on money that never existed in the first place?
When the asset doesn't pay off you get to write that off on your taxes.
So when something like 2008 rolls around, the US Government just gets 1/8th its income at a time it really needs to pay out?
That puts it pretty simply, but yes. And at least in 2008 it was mostly loans instead of hand outs so it got paid back.
YES! And this is the problem with profit based taxes. You should be taxes on what you have (property taxes) and what you receive (gross receipt taxes). The ebb and flow of commerce does vary, but the overall work and wealth is more stable. It also makes taxes harder to dodge as there are no deductions for expenses or other items. My local business tax is this way - I pay a couple percent in fixed assets tax, plus a (I think it's less than a) percent on my gross receipts - take what your paid, multiply it by 0.012, send that amount in. Simple, effective, and relatively consistent. It also, in a very simple way, reflects that government services are not a bonus the town gets when you make a profit but a cost of doing business. My power company charges me whether I make a profit or not, as does my web service, my copier maintenance plan, etc.
You can write off losses on your taxes. If you have enough losses you might get a tax refund.
So, I paid the government 15% because they thought my underlying asset was worth more than it was actually worth when I actually tried to get the money, then I can only claim and offset $3k per year for the rest of time unless I have a bunch of new capital gains?
That is fundamentally fucked.
Oh... No.
No pay, only tax.