5 ms·

> Paying 40% tax on $50,000 is different to paying 40% tax on $10m. You're right. It's way different to charge 40% on $50k, because the person making 50k proba

by dpark 10y ago

> Paying 40% tax on $50,000 is different to paying 40% tax on $10m. You're right. It's way different to charge 40% on $50k, because the person making 50k probably can't make ends meet if you charge them 40% tax. The person making $10MM has no such trouble.

deleted 10y ago
[deleted]
charlesdm 10y ago
I'm not saying it's right, I'm just saying how it is and that it's a problem that is very hard to fix. For wealthy people, tax is just another expense to push as close to zero as possible.
- dpark 10y ago
  I completely agree that it's a hard problem. I don't think there's a fix that involves lowering the tax burden on the wealthy, though. You can dump more taxes on the middle class and effectively reduce the level of avoidance but I don't think that's a net gain for society. I think it would actually be a huge loss.
  - toomuchtodo 10y ago
    So sad you're downvoted. The solution is ruthless enforcement of the tax code, with extreme punitive fines for evasion.
    - charlesdm 10y ago
      > The solution is ruthless enforcement of the tax code, with extreme punitive fines for evasion. Evasion has always been illegal, avoidance is structuring a transaction in a way so that it ends up being taxed at a lower rate, but in a legal way. Ruthless enforcement is already happening today in most western european countries.
      - toomuchtodo 10y ago
        > Ruthless enforcement is already happening today in most western european countries. Oh please. It took 6 years for the EU to penalize Ireland for the double irish/dutch sandwich avoidance mechanism. https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement https://www.bloomberg.com/news/articles/2016-08-30/apple-ireland-ruling-heralds-twilight-of-easy-european-tax-deals https://www.bloomberg.com/news/articles/2016-08-30/apple-ire...
        charlesdm 10y ago
        Well.. countries are allowed to set their own tax laws. That’s part of what makes a country. Fiscal sovereignty right there. Ireland (obviously) purposely created their tax framework so it would allow for this kind of behaviour. The world is battling for the tax dollars of wealthy people and their corporations. The EU ruling is just an initial opinion of the EU commission. It’ll have to go through the ECJ first. Countries are starving for tax income and have very clear conflicts of interests: they want to 1) tax their normal residents as much as possible, but at the same time 2) hand out low tax “freebies” to non residents (or HNWIs) so they will book some of their taxable profits in their jurisdictions. This needs to stop (globally) before you can effectively combat avoidance. But I doubt it’s ever going to happen.
        twblalock 10y ago
        > Oh please. It took 6 years for the EU to penalize Ireland for the double irish/dutch sandwich avoidance mechanism. That's because it's not a clear-cut legal issue. It's pretty much the EU versus everyone else on this one. Even the US government is unhappy about the EU ruling, even though the US government has gone after Apple for its tax practices fairly recently.
    - gozur88 10y ago
      That's been the solution since at least Roman times. It doesn't actually work. People with a lot of money are a lot more mobile than the rest of us.
- DominikR 10y ago
  And for you it is not? You donate your income to the government?
  - charlesdm 10y ago
    I don't, but many normal people know close to nothing about taxes and end up overpaying / not optimising sufficiently.
gozur88 10y ago
You have no idea what that person's situation is from their income. I know retired people with a lot of money who pay hardly any income taxes because they don't have much income. I also know people who could make a million this year and not be out of debt.
- dpark 10y ago
  If you're earning 10MM/year and unable to make ends meet, you're terrible with money and it's your fault. Maybe you can construct a far-fetched scenario in which this could reasonably be the case, but in the real world virtually anyone making 10MM/year is extremely wealthy or extremely incompetent. If you're making 30k/year, you are just barely making enough to support a family on your income. Yes it's possible to be wealthy and low income, but it's uncommon and generally indicative of retirement or something similar.
  - gozur88 10y ago
    >If you're earning 10MM/year and unable to make ends meet, you're terrible with money and it's your fault. Maybe, but not necessarily. What if I spent twenty years putting myself in the position to make $10m in one year? >If you're making 30k/year, you are just barely making enough to support a family on your income. Yes it's possible to be wealthy and low income, but it's uncommon and generally indicative of retirement or something similar. Well, yeah, but so what? My point was you're making a lot of assumptions based on income alone.
    - dpark 10y ago
      If you spend 20 years setting yourself to make $10MM one year and you still can't make ends meet then you are clearly incompetent. I don't understand what your point is with this whole argument. Yes, there are always exceptions. They aren't very interesting but the very nature of being exceptions, especially since tax laws are written for the general case. The number of multi millionaires in your exceptional case is also much smaller than you probably think. It's vanishingly difficult to earn no money when you have millions in assets.
fegu 10y ago
(Why is 1000 a k for kilo, but a million is MM, not M for mega?)
- dpark 10y ago
  M=Mille. It's used in financial jargon. A mille is also 1000. I never use a single 'M' by itself when talking about money because it's ambiguous. Mega or mille? If you see MM, it's not ambiguous.

by dpark 10y ago

deleted 10y ago

[deleted]

charlesdm 10y ago

I'm not saying it's right, I'm just saying how it is and that it's a problem that is very hard to fix. For wealthy people, tax is just another expense to push as close to zero as possible.

dpark 10y ago
I completely agree that it's a hard problem. I don't think there's a fix that involves lowering the tax burden on the wealthy, though. You can dump more taxes on the middle class and effectively reduce the level of avoidance but I don't think that's a net gain for society. I think it would actually be a huge loss.
- toomuchtodo 10y ago
  So sad you're downvoted. The solution is ruthless enforcement of the tax code, with extreme punitive fines for evasion.
  - charlesdm 10y ago
    > The solution is ruthless enforcement of the tax code, with extreme punitive fines for evasion. Evasion has always been illegal, avoidance is structuring a transaction in a way so that it ends up being taxed at a lower rate, but in a legal way. Ruthless enforcement is already happening today in most western european countries.
    - toomuchtodo 10y ago
      > Ruthless enforcement is already happening today in most western european countries. Oh please. It took 6 years for the EU to penalize Ireland for the double irish/dutch sandwich avoidance mechanism. https://en.wikipedia.org/wiki/Double_Irish_arrangement https://en.wikipedia.org/wiki/Double_Irish_arrangement https://www.bloomberg.com/news/articles/2016-08-30/apple-ireland-ruling-heralds-twilight-of-easy-european-tax-deals https://www.bloomberg.com/news/articles/2016-08-30/apple-ire...
      - charlesdm 10y ago
        Well.. countries are allowed to set their own tax laws. That’s part of what makes a country. Fiscal sovereignty right there. Ireland (obviously) purposely created their tax framework so it would allow for this kind of behaviour. The world is battling for the tax dollars of wealthy people and their corporations. The EU ruling is just an initial opinion of the EU commission. It’ll have to go through the ECJ first. Countries are starving for tax income and have very clear conflicts of interests: they want to 1) tax their normal residents as much as possible, but at the same time 2) hand out low tax “freebies” to non residents (or HNWIs) so they will book some of their taxable profits in their jurisdictions. This needs to stop (globally) before you can effectively combat avoidance. But I doubt it’s ever going to happen.
      - twblalock 10y ago
        > Oh please. It took 6 years for the EU to penalize Ireland for the double irish/dutch sandwich avoidance mechanism. That's because it's not a clear-cut legal issue. It's pretty much the EU versus everyone else on this one. Even the US government is unhappy about the EU ruling, even though the US government has gone after Apple for its tax practices fairly recently.
  - gozur88 10y ago
    That's been the solution since at least Roman times. It doesn't actually work. People with a lot of money are a lot more mobile than the rest of us.
DominikR 10y ago
And for you it is not? You donate your income to the government?
- charlesdm 10y ago
  I don't, but many normal people know close to nothing about taxes and end up overpaying / not optimising sufficiently.

gozur88 10y ago

You have no idea what that person's situation is from their income. I know retired people with a lot of money who pay hardly any income taxes because they don't have much income. I also know people who could make a million this year and not be out of debt.

dpark 10y ago
If you're earning 10MM/year and unable to make ends meet, you're terrible with money and it's your fault. Maybe you can construct a far-fetched scenario in which this could reasonably be the case, but in the real world virtually anyone making 10MM/year is extremely wealthy or extremely incompetent. If you're making 30k/year, you are just barely making enough to support a family on your income. Yes it's possible to be wealthy and low income, but it's uncommon and generally indicative of retirement or something similar.
- gozur88 10y ago
  >If you're earning 10MM/year and unable to make ends meet, you're terrible with money and it's your fault. Maybe, but not necessarily. What if I spent twenty years putting myself in the position to make $10m in one year? >If you're making 30k/year, you are just barely making enough to support a family on your income. Yes it's possible to be wealthy and low income, but it's uncommon and generally indicative of retirement or something similar. Well, yeah, but so what? My point was you're making a lot of assumptions based on income alone.
  - dpark 10y ago
    If you spend 20 years setting yourself to make $10MM one year and you still can't make ends meet then you are clearly incompetent. I don't understand what your point is with this whole argument. Yes, there are always exceptions. They aren't very interesting but the very nature of being exceptions, especially since tax laws are written for the general case. The number of multi millionaires in your exceptional case is also much smaller than you probably think. It's vanishingly difficult to earn no money when you have millions in assets.

fegu 10y ago

(Why is 1000 a k for kilo, but a million is MM, not M for mega?)

dpark 10y ago
M=Mille. It's used in financial jargon. A mille is also 1000. I never use a single 'M' by itself when talking about money because it's ambiguous. Mega or mille? If you see MM, it's not ambiguous.