6 ms·

In comparison to what? And exactly what income-levels paid what percentage of that? Did the poor & middle class paid 98% of of that? Did the rich & powerful use

by smtddr 11y ago

In comparison to what? And exactly what income-levels paid what percentage of that? Did the poor & middle class paid 98% of of that? Did the rich & powerful use all kinds of crazy tax-loop-holes to avoid paying trillions? Cost of living/retirement in what parts of America?....maybe 19 billion is a drop in the ocean, maybe not. 19 billion tells me nothing.

harryh 11y ago
Well, roughly 2.6 million Americans died in 2014. I've read that 1 in 500 estates gets taxed so that's about 5200 estates. 19 billion / 5200 = an mean of ~3.65 million per taxed estate. That's all I know off the top of my head. In general I've found the trope of "the rich don't pay taxes because of their fancy lawyers and accountants" generally turns out to be false.
- smtddr 11y ago
  >>In general I've found the trope of "the rich don't pay taxes because of their fancy lawyers and accountants" generally turns out to be false. It's not that they don't pay taxes at all, but they definitely pay less than they should. http://money.cnn.com/2013/03/04/news/economy/buffett-secretary-taxes/ http://money.cnn.com/2013/03/04/news/economy/buffett-secreta... There's no way you can believe otherwise, a millionaire can afford all kinds of financial experts to work 40hrs/week to move money all over the place to avoid taxes. It's unreasonable to think they don't (ab)use that ability.
  - harryh 11y ago
    Buffet doesn't pay lower taxes because of fancy lawyers and accountants though. He pays lower taxes because capital gains are taxed at a lower rate than ordinary income. We can certainly debate whether that is good policy or not, but it has absolutely nothing to do with any sort of fancy tricks.
    - ashwinaj 11y ago
      I wonder which group of people lobbied for capital gains to be taxed lower than ordinary income? Is it coincidence that since the law (one of Reagan's tax cuts) was passed a lot of executives are paid a lower base salary and tons of stock options? I'd consider that a fancy trick :) EDIT: To answer harryh: Yes and it has been steadily decreasing [1]. And your point is? I think we can agree this mainly benefits the rich; I don't see someone in the middle class would have the discretionary income (not 401k, I'm talking about leftover income after expenses) to put his/her money in massive amounts stocks. [1] http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
      - harryh 11y ago
        Capital gains taxes have almost always been lower than ordinary income taxes. This is not a new post-Reagan phenomenon.
        drumdance 11y ago
        The rate was much higher pre-Reagan, nearly double what it is today. Also, the rise of finance means a lot of Wall Street hedge fund managers who should be paying ordinary income tax are paying cap gains rates through the carried interest exception. Venture capitalists too. http://avc.com/2010/05/why-taxing-carried-interest-as-ordinary-income-is-good-policy/ http://avc.com/2010/05/why-taxing-carried-interest-as-ordina...
        harryh 11y ago
        Reagan lowered max cap gains rates from 39% down to 20% but then back up to 28%. At the same time he lowered the max rate on ordinary income from 70% down to 50% then down to 28%. So ya, at the end their they were briefly the same (which is why I used the word almost). But in general my point stands. Capital gains rates are generally lower than ordinary income rates as a matter of public policy. A similar point holds for the carried interest rule. Those taking advantage of it aren't doing so because they've hired amazing accountants to file their taxes. They're just following relatively straight forward tax law. Adjacently, while I generally agree with you on the topic of carried interest I did find this column thought provoking. You might enjoy it. http://www.nytimes.com/2012/03/04/business/capital-gains-vs-ordinary-income-economic-view.html http://www.nytimes.com/2012/03/04/business/capital-gains-vs-...
  - sageikosa 11y ago
    How much one "should" pay in property/income forfeiture is, of course, a matter of political policy. Just think how much money goes into the economy to preserve income...if we simplified the tax code in any way, so many people would be out of work in both the private and public sectors.
    - harryh 11y ago
      > if we simplified the tax code in any way, so many people would be out of work in both the private and public sectors. This is an excellent demonstration of the broken window fallacy.
- asmithmd1 11y ago
  Taxes are for the 99% The 1% can and do pay lawyers to get out of paying much. Check out this loophole - it is complicated but basically if you can afford to set up one of these trusts you can give money to your kids tax free: https://en.wikipedia.org/wiki/Grantor_retained_annuity_trust https://en.wikipedia.org/wiki/Grantor_retained_annuity_trust
- washadjeffmad 11y ago
  From 2003 to 2013, the top marginal and capital gains tax rates were 35% and 15% respectively, and the top 0.01% of taxpayers faced an average tax rate of effectively 25%. The last time rates were that low was before WW2, leading up to a period we remember as the Great Depression. During the nation's most prosperous decades, those rates were consistently above 40%, and leading up to them, ranged between 60% and 40%. The issue isn't that the mega-wealthy pay no taxes, but that the value of the taxable income of a handful of people vastly supersedes that of most of that of the rest of the population. In essence, lower tax rates didn't fix anything about the economy unless you thought taxes were the problem and provided no overall boost to the economic security or general prosperity of the public. So when GE Capital pays no corporate taxes and someone points that out, you're likely to hear that they pay those taxes through the number of people they employ. This is deceptive, since a legitimate small business would be paying both taxes. That entities like GE Capital exist is the trope that you need to dispel. Or did those estate taxes not come from the earnings of mom and pop shop owners and people who put in their 40 quarters with a little wise investing?
- sumedh 11y ago
  > "the rich don't pay taxes because of their fancy lawyers and accountants" generally turns out to be false. So why does Buffett keep on saying that he pays low taxes compared to his secretary?
  - kspaans 11y ago
    Short explanation: capital gains, dividend income is taxed less than normal (wage, salary, etc) income. And I believe Buffett means that he pays a lower effective tax rate than his secretary, not fewer taxes in absolute terms.

by smtddr 11y ago

harryh 11y ago

Well, roughly 2.6 million Americans died in 2014. I've read that 1 in 500 estates gets taxed so that's about 5200 estates. 19 billion / 5200 = an mean of ~3.65 million per taxed estate. That's all I know off the top of my head. In general I've found the trope of "the rich don't pay taxes because of their fancy lawyers and accountants" generally turns out to be false.

smtddr 11y ago
>>In general I've found the trope of "the rich don't pay taxes because of their fancy lawyers and accountants" generally turns out to be false. It's not that they don't pay taxes at all, but they definitely pay less than they should. http://money.cnn.com/2013/03/04/news/economy/buffett-secretary-taxes/ http://money.cnn.com/2013/03/04/news/economy/buffett-secreta... There's no way you can believe otherwise, a millionaire can afford all kinds of financial experts to work 40hrs/week to move money all over the place to avoid taxes. It's unreasonable to think they don't (ab)use that ability.
- harryh 11y ago
  Buffet doesn't pay lower taxes because of fancy lawyers and accountants though. He pays lower taxes because capital gains are taxed at a lower rate than ordinary income. We can certainly debate whether that is good policy or not, but it has absolutely nothing to do with any sort of fancy tricks.
  - ashwinaj 11y ago
    I wonder which group of people lobbied for capital gains to be taxed lower than ordinary income? Is it coincidence that since the law (one of Reagan's tax cuts) was passed a lot of executives are paid a lower base salary and tons of stock options? I'd consider that a fancy trick :) EDIT: To answer harryh: Yes and it has been steadily decreasing [1]. And your point is? I think we can agree this mainly benefits the rich; I don't see someone in the middle class would have the discretionary income (not 401k, I'm talking about leftover income after expenses) to put his/her money in massive amounts stocks. [1] http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Docid=161 http://www.taxpolicycenter.org/taxfacts/displayafact.cfm?Doc...
    - harryh 11y ago
      Capital gains taxes have almost always been lower than ordinary income taxes. This is not a new post-Reagan phenomenon.
      - drumdance 11y ago
        The rate was much higher pre-Reagan, nearly double what it is today. Also, the rise of finance means a lot of Wall Street hedge fund managers who should be paying ordinary income tax are paying cap gains rates through the carried interest exception. Venture capitalists too. http://avc.com/2010/05/why-taxing-carried-interest-as-ordinary-income-is-good-policy/ http://avc.com/2010/05/why-taxing-carried-interest-as-ordina...
        harryh 11y ago
        Reagan lowered max cap gains rates from 39% down to 20% but then back up to 28%. At the same time he lowered the max rate on ordinary income from 70% down to 50% then down to 28%. So ya, at the end their they were briefly the same (which is why I used the word almost). But in general my point stands. Capital gains rates are generally lower than ordinary income rates as a matter of public policy. A similar point holds for the carried interest rule. Those taking advantage of it aren't doing so because they've hired amazing accountants to file their taxes. They're just following relatively straight forward tax law. Adjacently, while I generally agree with you on the topic of carried interest I did find this column thought provoking. You might enjoy it. http://www.nytimes.com/2012/03/04/business/capital-gains-vs-ordinary-income-economic-view.html http://www.nytimes.com/2012/03/04/business/capital-gains-vs-...
- sageikosa 11y ago
  How much one "should" pay in property/income forfeiture is, of course, a matter of political policy. Just think how much money goes into the economy to preserve income...if we simplified the tax code in any way, so many people would be out of work in both the private and public sectors.
  - harryh 11y ago
    > if we simplified the tax code in any way, so many people would be out of work in both the private and public sectors. This is an excellent demonstration of the broken window fallacy.
asmithmd1 11y ago
Taxes are for the 99% The 1% can and do pay lawyers to get out of paying much. Check out this loophole - it is complicated but basically if you can afford to set up one of these trusts you can give money to your kids tax free: https://en.wikipedia.org/wiki/Grantor_retained_annuity_trust https://en.wikipedia.org/wiki/Grantor_retained_annuity_trust
washadjeffmad 11y ago
From 2003 to 2013, the top marginal and capital gains tax rates were 35% and 15% respectively, and the top 0.01% of taxpayers faced an average tax rate of effectively 25%. The last time rates were that low was before WW2, leading up to a period we remember as the Great Depression. During the nation's most prosperous decades, those rates were consistently above 40%, and leading up to them, ranged between 60% and 40%. The issue isn't that the mega-wealthy pay no taxes, but that the value of the taxable income of a handful of people vastly supersedes that of most of that of the rest of the population. In essence, lower tax rates didn't fix anything about the economy unless you thought taxes were the problem and provided no overall boost to the economic security or general prosperity of the public. So when GE Capital pays no corporate taxes and someone points that out, you're likely to hear that they pay those taxes through the number of people they employ. This is deceptive, since a legitimate small business would be paying both taxes. That entities like GE Capital exist is the trope that you need to dispel. Or did those estate taxes not come from the earnings of mom and pop shop owners and people who put in their 40 quarters with a little wise investing?
sumedh 11y ago
> "the rich don't pay taxes because of their fancy lawyers and accountants" generally turns out to be false. So why does Buffett keep on saying that he pays low taxes compared to his secretary?
- kspaans 11y ago
  Short explanation: capital gains, dividend income is taxed less than normal (wage, salary, etc) income. And I believe Buffett means that he pays a lower effective tax rate than his secretary, not fewer taxes in absolute terms.