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'Absurd!': US Billionaires Pay Lower Tax Rate Than Working Class for First Time
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this post was submitted on 04 May 2024
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This is easy to solve. Count the loans as ordinary income. Problem solved.
I had to take an insane amount of loans out to get my nursing license. I'll be paying them off for over a decade. I don't like this idea
Easy, put a 1 million dollar limit (as in tax kicks in after 1 mil)
And exclude primary residence.
Imagine being being able to afford a residence
eexclude value of average (maybe median) cost of a dwelling off their dwelling.
fuck this "my primary dwelling is a $10m mansion"
Update the new personal exemption to 50k. 12.5k is no longer the poverty line.
There are numerous things to make this proposal reasonable.
Count as income depending on amount of loan, nature of collateral, and usage of the loaned money.
A loan taken out against primary residence used for purchase of same residence under a million dollars? Not applicable. Proceeds used for education, within reasonable limits? Not applicable.
When a loan is taxed as income, provide for tax credits upon repayment reconcile ultimate use of "real" income. That way you avoid the "double tax" compliant they keep whining about.
I find the tax loans approach ultimately the most workable approach to close the loopholes.
Exclude students loans and anything tied to an asset. These are unique loans only offered to the super wealthy or since there are equity based loans, just tax equity based loans
Aren’t all loans tied to assets?
No.
That rich get loans that basically last their lifetime. They are income replacement. They are not tied to home, a car, etc.
They are just avoiding taxes.
I don’t blame them. It’s smart.
It’s why politicians need to eliminate it.
And it’s tied to an asset. Stocks, real estate, something. That’s how loans work. The bank doesn’t just hand you money just for an IOU. It needs something to hold you accountable.
No it’s not. They are not buying an asset with. It’s sometimes back with with an asset as collateral but it’s not tied to an asset. The loan isn’t taken out to buy a home. It’s taken out as living expenses.
It’s why a consumption tax would fuck the rich.
Oh, you mean as the destination of the money. But I wouldn’t be too quick to use this as criteria. Lots of people use loans like that because they get poor. Think HELOC, reverse mortgages,… Having a minimum value below which you are exempt seems much better.
I didn’t exclude that from my comment.
One of the differences is with a heloc you have to make payments. The loans Elon gets for example don’t have payments.
They can live this way for years.
I’m not opposed to rich people. I’m opposed to gaming the system.
Loans to entities with more than 10 million net-worth then.
Or just make loans taxable, doesn’t have to be the same as income- like capital gains tax.
Capital gains is much lower and doesn’t pay into SS, Medicare, etc.
Sounds like we could fix that too.
My point is, it doesn’t have to be “income tax”, it could be its own, much more painful tax.
(Who am I kidding, enough senators live off this stuff too.)
Taxes are not supposed to be painful. They are supposed to be fair and fund the government. Painful taxes just causes avoidance.
Tax avoidance is a crime.
Lock up the billionaires. I see nothing wrong with it.
That's the difference between tax avoidance and tax evasion. Avoidance is legal, evasion is not.
Tax avoidance isn’t a crime.
Do you use deductions on your 1040? That’s tax avoidance.
No, count unrealized asset value as income.
You gained 2 billion in stock value, but didn't sell? You get taxed on that stock gain.
I can’t support that. I myself once had 20 million in stock options but couldn’t sell it. By the time I could sell it, it was worth zero. Yet you in your system I would have paid taxes on it. Stock fluctuates in value to much. We just need way to force them sell the stock and then tax the stock as ordinary income.
Once it went to zero, it would have been a loss and canceled out?
Well if I had to pay unrealized gains I’d have zero but have to pay taxes on 20 million.
It’s why we don’t do it. It would be overly complicated.
No, you would pay taxes on the unrealized gains of your assets. So if your assets are worth 0, then you pay 0. If they are worth 20mil, then you pay taxes on 20mil.
Just a quick reminder, one of the main principles of capitalism is risk vs reward.
That’s my point. They were worth 20 million. Due to legal restrictions I couldn’t sell. As such I would have to pay taxes on 20 million. When I could sell they were worth zero.
So I would have ended up negative.
Sounds like that stock wasn't worth the risk then. That's capitalism in a nutshell brahski, people lose money betting on the market every day.
It was part of my compensation. It didn’t cost me anything.
It’s naive to think we will ever tax unearned income. Not only is it against the law, it would destroy everyone.
So only corporations and billionaires can afford to own a home?
Pretty sure that is not what I said. Anyway, you are already taxed on the value of your home on a yearly basis, regardless if you sold it or not. Take your ball and go home.
What he is saying your home is an unrealized gain which is true.
While we pay property taxes they are a small percentage and based on the tax value and not the fair market.
While not a fan of property tax they at least directly impact you by providing value to your local area. Why I don’t bitch much about property taxes. I’d rather pay those than federal taxes.
You're not taxed on the full appreciation of your home at income tax rates. If the government did, the tax on the appreciation would price people out of their homes.
Really? We should let the people in the low income areas of my city that just saw their valuations jump up know, because that is exactly what is happening to them. Property value went up 300%, so did the taxes.
Ah. I failed to consider you live outside of the United States of America. I'm sorry that low income earners are burdened by this kind of tax policy.
Wrong