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A Message from the Billionaire’s Club: Tax Us

98 pointsby giladalmost 6 years ago

28 comments

SolaceQuantumalmost 6 years ago
I&#x27;m somewhat baffled by this simultaneous behavior- if the rich want to be taxed, they have all the wealth to make it happen. Hire lobbyists to close tax loopholes. Hire lawyers to go after the rich who tax-evade or the accountants that support them. Donate heavily to politicians who support taxing the rich. Invest in muckraking journalism. Donate money to economics academia with strings attached that force academia to teach taxing-the-rich doctrine.<p>What I see here is a small minority of wealthy people who are already invested in the social politics of being a wealthy progressive but are not putting the money where the mouth is. Are there wealthy progressives putting a Koch brothers strategy on their political goals? Why or why not?
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bedheadalmost 6 years ago
There&#x27;s an easy and obvious solution: have extremely high estate tax rates for estates valued above some threshold like (just picking a random high number) $100 million. I have no problem with Bezos being worth over $100 billion - he earned every penny. What I despise is the idea of his great-great grandkids being multi-billionaires. So have an estate tax of 90% above $100 million, think of what this accomplishes:<p>* Bezos enjoys the money he rightfully earned.<p>* His heirs are still rich - just not mega billionaires.<p>* The US gets an effective wealth tax.<p>* Bezos is incentivized to spend the money, much of it I&#x27;m sure charitably.<p>It seems like the fairest way to do things. Yes, there are tradeoffs like everything else. It would force private family-owned companies to sell. But I hate this idea of massive capital accumulation that just sits there. It&#x27;s reminiscent of land ownership in medieval times. While we&#x27;re at it we should change the laws about charitable foundations that force them to spend more rapidly and not create these semi-permanent structures that basically exist as Sphinxes for rich people. I&#x27;ll add in one more: we should have a windfall wealth tax for all these tech billionaires.
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bretpiattalmost 6 years ago
Super difficult situation with many second and third order effects to sort out, one particularly relevant to HN ..<p>Vested equity that isn&#x27;t liquid. It is technically an asset with a clear value (based off of a 409a, last round valuation, or from limited trading on private secondary markets). So founders must sell 2% each year to cover their tax bill, except that sale triggers other taxes so likely more in the 4-6% per year...<p>Does a VC fund have to send a statement through to LPs each year so they pay a tax bill on indirect holdings?<p>I could go on and on...
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dexterdogalmost 6 years ago
I never understood the logistics of a wealth tax. Wouldn&#x27;t that require every single person to document all of their wealth to prove that they are not in the top bracket and this don&#x27;t owe anything? If it doesn&#x27;t what is to stop somebody who is near the borderline from just refusing to document? Won&#x27;t there also be tons of loopholes to diversify your holdings to keep yourself just below the cutoff?
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cpursleyalmost 6 years ago
What&#x27;s stopping Billionaires from donating to the US government right now at whichever rate they think is fair? There&#x27;s an extra field for this on the tax return document. Lead by example, etc.<p>If you&#x27;re going to downvote me, please explain why. I&#x27;m honestly perplexed.
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nerdponxalmost 6 years ago
Are these the same billionaires squirreling money away overseas to <i>avoid</i> paying tax on it?
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fyovingalmost 6 years ago
Eliminating tax deductions and the perverse incentives they entail would be a bigger boon than further taxing the successful and fortunate.<p>The problem isn&#x27;t a lack in revenue the problem is that we are spending it on the wrong stuff.
sascha_slalmost 6 years ago
2% on everything over 50M and 3% on everything over 1B is laughably little. Preemptive low-end offer really. They make 3-4x that amount back just from passive income over that year. What we really need is a much heavier curve that essentially cuts off at least half after a certain point.<p>Hoarding wealth should be illegal.
lwhalenalmost 6 years ago
Any individual or corporation is free to donate directly to the US General Fund, which is where the vast majority of tax revenue goes: <a href="https:&#x2F;&#x2F;www.treasurydirect.gov&#x2F;govt&#x2F;resources&#x2F;faq&#x2F;faq_publicdebt.htm#DebtFinance" rel="nofollow">https:&#x2F;&#x2F;www.treasurydirect.gov&#x2F;govt&#x2F;resources&#x2F;faq&#x2F;faq_public...</a><p>In the meantime, I need as much of the money that _I earned_ as the gov&#x27;t will deign to let me keep. Why? None of your damn business, that&#x27;s why. I earned it, let me save or spend it as I please, without even more of gov&#x27;t sticky-fingers rooting around in my damn pie.
rayineralmost 6 years ago
Taxing billionaires, or even millionaires, is a red herring. In 2014 (the most recent date for which the IRS has collected this data), the top 400 taxpayers earned $127 billion: <a href="https:&#x2F;&#x2F;www.irs.gov&#x2F;pub&#x2F;irs-soi&#x2F;14intop400.pdf" rel="nofollow">https:&#x2F;&#x2F;www.irs.gov&#x2F;pub&#x2F;irs-soi&#x2F;14intop400.pdf</a>. There are about 500 billionaires in the US, so this is a good proxy.<p>Even if you taxed these people at 100% it’s a drop in the bucket. US federal, state, and local governments spent $7 trillion last year. (About $4 trillion federal, $3 trillion state and local.) Even a 10% annual wealth tax wouldn’t raise much—total wealth of the Forbes 400 is $2.7 trillion, so you’re looking under $300 billion per year. That’s a 5-6% increase in total taxes.<p>There is a proven model for taxation. Just do what Europe does! Sweden’s mythical 70% tax rate doesn’t kick in at $10,000,000 a year, or apply only to corporations. It kicks in at 1.5 times the average income, what would be under $60,000 in the US: <a href="https:&#x2F;&#x2F;taxfoundation.org&#x2F;how-scandinavian-countries-pay-their-government-spending" rel="nofollow">https:&#x2F;&#x2F;taxfoundation.org&#x2F;how-scandinavian-countries-pay-the...</a>. (It’s actually 56%, not 70%, but still.) All the Scandinavian countries and most of Europe adopts the same approach. In Germany, the second highest tax rates (just 3% lower than the highest) kicks in under $70,000.<p>Europeans combine those income taxes with sales taxes (VAT), which average 20% in the OECD, and heavy payroll taxes. Indeed, if the US went to Spain’s tax system, tax revenue would go up $2 trillion, but income taxes would go down by a trillion.
roenxialmost 6 years ago
The issue with wealth is that the amount of real resource that a person can consume caps out somewhere in the low-medium millions.<p>For example, a billionaire can pay $60 million for a penthouse in Manhatten. However, most of that is getting ahead of the queue of people who want to live in Manhatten - if you liberated all the real resources (building labor hours, materials) that went into that penthouse, there is no way it would be sufficient to produce $60 million worth of warm meals. The best you can get is to swap a billionaire and someone else - which doesn&#x27;t mean a net improvement.<p>The effects of a wealth tax are not going to be obvious; it is likely to cause really strange things to happen. It is not at all obvious that a wealth tax will liberate real resources for the use of ordinary people.<p>I&#x27;ll admit to arguing against any tax, but I think the vocal activists are way overestimating how much good the money billionaires tie up in businesses does. We need real resources to be directed to creating new wealth for future consumption.<p>Whatever the problem is, it still isn&#x27;t inequality. The only way to have an equal society is for everyone to be dirt poor.
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nwpalmost 6 years ago
I’ve never understood this kind of thinking. If you want to give your money away you are absolutely free to do so. The Gates Foundation does wonderful things. If you want to fund government, pretty much every public school system of any real size has a foundation. If you legitimately want to pay more in taxes just ensure you have a taxable event every year. Hold no investment for a year and pay short term capital gains. Take zero deductions, etc, etc, etc.
citilifealmost 6 years ago
One thing that I find strange, is why we always discuss <i>increasing</i> taxes. Why not <i>decreasing</i> spending on ineffective things and try to improve the government.<p>The U.S. government has more than enough money to keep the peace, provide essential services and support people incapable of helping themselves. Cut some costs and improve efficiencies.
jamistevenalmost 6 years ago
Whats so damn funny about this argument is how people so foolishly think that higher taxation of the top 1% equals them getting more money, it does not. Those excess taxes go to big government, the money does not trickle down to you, it goes to them.
INTPenisalmost 6 years ago
Gee golly, thanks Mr. for letting us tax you like we do everyone else. Now let&#x27;s earmark those funds for anything BUT the military and we&#x27;re on our way.<p>This type of bizarre story can only be about the United States.
tsssalmost 6 years ago
Maybe they should start by paying the taxes they already owe.
wybiralalmost 6 years ago
Well tell them to back Elizabeth Warren already.
natrikalmost 6 years ago
<i>Enthusiasm for a wealth tax on the country’s thin sliver of multimillionaires and billionaires may be unsurprising — after all, most Americans wouldn’t have to pay it. But now the idea is attracting support from a handful of those who would.</i><p><i>A letter being published online on Monday calls for “a moderate wealth tax on the fortunes of the richest one-tenth of the richest 1 percent of Americans — on us.”</i><p><i>The “us” includes self-made billionaires like the financier George Soros and Chris Hughes, a Facebook co-founder, as well as heirs to dynastic riches like the filmmaker Abigail Disney and Liesel Pritzker Simmons and Ian Simmons, co-founders of the Blue Haven Initiative, an impact investment organization.</i><p><i>“We thought it would be a good idea,” Mr. Simmons explained by phone as he waited out a traffic jam in the Boston area. “Liesel and I decided to reach out to some other folks to see if they thought it was a good idea, too.”</i><p><i>The letter came together in the last two weeks. Eighteen individuals, spread among 11 families, added their names. All are active in progressive research and political organizations, some of which are pointedly focused on the swelling gap between the richest Americans and everyone else.</i><p><i>A recent analysis of a Federal Reserve report found that over the last three decades, the wealthiest 1 percent of Americans saw their net worth grow by $21 trillion, while the wealth of the bottom 50 percent fell by $900 billion.</i><p><i>The letter is addressed to all presidential contenders, and refers specifically to a plan offered by Senator Elizabeth Warren of Massachusetts. Her proposal would create a wealth tax for households with $50 million or more in assets — including stocks, bonds, yachts, cars and art. She estimates such a tax would affect 75,000 families, and raise $2.75 trillion over 10 years.</i><p><i>A desire to curb the rising concentration of wealth has long been part of the Democrats’ core message, but a Republican tax bill in 2017 that delivered the biggest benefits to Americans with the highest incomes reinvigorated the debate.</i><p><i>In recent months, Democrats including Representative Alexandria Ocasio-Cortez of New York and Senator Bernie Sanders of Vermont have offered up ambitious tax proposals targeted at wealthy taxpayers. At the same time, they have questioned whether vast family fortunes conferring outsize economic and political power are inimical to democratic values.</i><p><i>Surveys undertaken in the wake of those proposals showed that roughly seven out of 10 Americans supported higher taxes on the wealthiest Americans.</i><p><i>The swirl of attention provided an opportunity to advance the conversation around inequality, social responsibility and taxes, Mr. Hughes said.</i><p><i>“One thing that we collectively want to see is further research and more activism on policy design,” he added. His husband, Sean Eldridge, a founder of the progressive advocacy group Stand Up America and a former congressional candidate, also signed the letter.</i><p><i>The letter unequivocally declares that a wealth tax “strengthens American freedom and democracy” and “is patriotic.”</i><p><i>And it points out that economic researchers estimate that the richest 0.1 percent of Americans will pay 3.2 percent of their wealth in taxes this year compared with 7.2 percent paid by the bottom 99 percent. “The next dollar of new tax revenue should come from the most financially fortunate, not from middle-income and lower-income Americans,” the letter declares.</i><p><i>Ms. Simmons said a wealth tax could help deal with problems like the “lack of child care, educational debt, the opioid crisis and the climate crisis.”</i><p><i>She is part of the Pritzker family, the founders of one of the country’s largest private companies, which included the Hyatt hotel chain. Another family member, Regan Pritzker, president of the San Francisco-based Libra Foundation, also signed.</i><p><i>Members of the billionaire club have previously argued that they should be taxed more. In 2011, Warren E. Buffett, the founder of Berkshire Hathaway, published an essay noting that his effective tax rate was “actually a lower percentage than was paid by any of the other 20 people in our office.” His comments prompted President Barack Obama and others to push for a “Buffett rule” mandating that millionaires pay at least 30 percent of their income in taxes.</i><p><i>In 2014, Nick Hanauer, a Seattle-based entrepreneur, published a memo to “My Fellow Zillionaires” noting that “people like you and me are thriving beyond the dreams of any plutocrats in history, the rest of the country — the 99.99 percent — is lagging far behind.”</i><p><i>He added: “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.”</i><p><i>Mr. Hanauer signed the letter published on Monday, as did Molly Munger, a lawyer whose father is Charlie Munger, vice chairman of Berkshire Hathaway. She and her husband, Stephen English, were co-founders of the Advancement Project, a civil rights organization. He also signed the letter.</i><p><i>Other names on the letter were Stephen M. Silberstein, co-founder of the software company Innovative Interfaces; the philanthropist and arts patron Agnes Gund and her daughter Catherine Gund, the founder and director of Aubin Pictures; Arnold S. Hiatt, chairman of the Stride Rite Charitable Foundation; Justin Rosenstein, a co-founder of Asana, which provides work-management tools; Robert S. Bowditch Jr., the founder of MB Associates, a real estate development firm, and his wife, Louise; and Mr. Soros’s son Alexander, deputy chair of the Open Society Foundations.</i><p><i>The final signatory was “Anonymous.”</i>
choonwayalmost 6 years ago
missing the &quot; if you can. haha&quot; from the headline.
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thespace123almost 6 years ago
Maybe they should pay for the NYTs paywalls first.
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dotdialmost 6 years ago
IMHO this is a PR move through and through. The TL;DR for me is &quot;tax us; LOL JK my money is on the Caymans&quot;.
snissnalmost 6 years ago
Just send the irs a check
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jumbopapaalmost 6 years ago
Can&#x27;t help but to feel like this is virtue signaling.
theseadroidalmost 6 years ago
More tax or not, I&#x27;m not sure the US government is capable of using the tax money effectively.
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DamnYuppiealmost 6 years ago
This is nothing more than grandstanding. There is nothing keeping them from writing a check to the IRS at any time for any amount of money they want!
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nickikalmost 6 years ago
If you want to spend money, just do it yourself. People directly trying to help with education or whatever they believe the government spends on could so more effectivly then threw the government.<p>Not to mention that all the companies these guys own lobby against more taxes.<p>This is PR.
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cyborgx7almost 6 years ago
Of course that is what they will say to your face. What are they going to do? Say &quot;haha, screw all of you!&quot;? Doesn&#x27;t change the fact that what they are lobbying for is an entirely different thing.<p>Edit: Does HN deny that people lie for their own benefit? Or do you merely disagree with my tone?
noonespecialalmost 6 years ago
Step 1: Fire the army of accountants they no doubt have to find every little tax trick and loophole to reduce the taxes they pay now.<p>Step 2: Send in extra. Whatever they believe the rate should be. The IRS won&#x27;t complain.
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