4 ms·

For the US maybe. Income tax in the Netherlands (my country) in the top bracket is 52%. On the second hand, we have no capital gains tax so he might come out ah

by WJW 10y ago

For the US maybe. Income tax in the Netherlands (my country) in the top bracket is 52%. On the second hand, we have no capital gains tax so he might come out ahead when exercising options. On the third hand, we have a wealth tax of 1.2% on your entire capital above a certain floor (of about 20k) so he might not come out ahead in the end. It's always interesting to see the opinions of different cultures about how much tax is reasonable :)

omginternets 10y ago
>It's always interesting to see the opinions of different cultures about how much tax is reasonable :) I think you're missing his point. The raw percentage isn't as unreasonable as the difference between the parent-poster's and Musk's tax rate.
MicroBerto 10y ago
> It's always interesting to see the opinions of different cultures about how much tax is reasonable :) Realize none of these numbers include the local, county, state, sales, and property taxes he pays. At some point, theft becomes a more suitable word for it.
- ska 10y ago
  At some point, theft becomes a more suitable word for it. No, because confounding usefully distinct concepts makes them less useful.
  - MicroBerto 10y ago
    If Taxation at 100% is slavery, at what percentage is it not?
    - ska 10y ago
      You answered yourself - slavery is not taxation, full stop. Fiddling about with numbers after a false premise is not going to lead you to truth.
gozur88 10y ago
I'm not sure if the figure in the piece is only federal tax, but if so there's another 13% for California state taxes.
matt_wulfeck 10y ago
Not bad, but doesn't that come with social services like free medical care and greatly subsidized education? Here in he US the middle income pays taxes and receives almost no directive social benefit, as most social programs are geared towards lower income and the rich can afford accountants and lawyers to keep their tax burden very light.
- kareemm 10y ago
  I'm not sure how you can say that the rich keep their tax burden light when the topic of this thread is how Musk paid tax amounting to 44% of his income totalling over half a billion dollars.
  - CocaKoala 10y ago
    If it were common for rich people to pay 44 percent of their income in tax, it wouldn't be a newsworthy story.
    - jstelly 10y ago
      Are there people who receive millions of dollars in income via stock options who pay a lower rate? If so, how does that work?
      - CocaKoala 10y ago
        Here's a Bloomberg article from 2012 that lists ten techniques: https://www.bloomberg.com/news/articles/2012-04-17/how-to-pay-no-taxes-10-strategies-used-by-the-rich https://www.bloomberg.com/news/articles/2012-04-17/how-to-pa...
        jstelly 10y ago
        It's worth mentioning that none of these techniques actually apply to the case where you exercise stock options - other than the one that says basically "take options as compensation if you can because you don't pay taxes until you exercise them" which is true for everyone who gets options (because you don't get any liquidity) not just rich people with expensive accountants. The only techniques that apply to income taxes are the "borrow against stock technique" (has a big caveat about a rich person who lost in court when he used it) and the deferred compensation example (which is also zero liquidity; presumably you pay all of the income taxes when you actual get the money). The article makes a better case for ways to avoid death taxes or real estate taxes though.
gok 10y ago
The top bracket is 52.9% in California. Of course, the Netherlands' tax brackets are much less progressive than those in the US/California; the top bracket is around ~$80K vs. ~$1M.
Maarten88 10y ago
In the Netherlands, his bonus and income would have been structured differently, he'd have had a personal holding to 'catch' the money before it would have been taxed income or capital taxes, and he'd have paid next to nothing (yet). He could have delayed selling off stock to pay taxes for as long as he'd have wanted. I'm not sure how entrepreneurs do this in the US, is Musk being patriotic paying so much taxes, or is there really no way to delay/avoid having to sell stock to pay taxes?
vilmosi 10y ago
There's a big difference between tax rate and effective tax paid.

by WJW 10y ago

omginternets 10y ago

>It's always interesting to see the opinions of different cultures about how much tax is reasonable :) I think you're missing his point. The raw percentage isn't as unreasonable as the difference between the parent-poster's and Musk's tax rate.

MicroBerto 10y ago

> It's always interesting to see the opinions of different cultures about how much tax is reasonable :) Realize none of these numbers include the local, county, state, sales, and property taxes he pays. At some point, theft becomes a more suitable word for it.

ska 10y ago
At some point, theft becomes a more suitable word for it. No, because confounding usefully distinct concepts makes them less useful.
- MicroBerto 10y ago
  If Taxation at 100% is slavery, at what percentage is it not?
  - ska 10y ago
    You answered yourself - slavery is not taxation, full stop. Fiddling about with numbers after a false premise is not going to lead you to truth.

gozur88 10y ago

I'm not sure if the figure in the piece is only federal tax, but if so there's another 13% for California state taxes.

matt_wulfeck 10y ago

Not bad, but doesn't that come with social services like free medical care and greatly subsidized education? Here in he US the middle income pays taxes and receives almost no directive social benefit, as most social programs are geared towards lower income and the rich can afford accountants and lawyers to keep their tax burden very light.

kareemm 10y ago
I'm not sure how you can say that the rich keep their tax burden light when the topic of this thread is how Musk paid tax amounting to 44% of his income totalling over half a billion dollars.
- CocaKoala 10y ago
  If it were common for rich people to pay 44 percent of their income in tax, it wouldn't be a newsworthy story.
  - jstelly 10y ago
    Are there people who receive millions of dollars in income via stock options who pay a lower rate? If so, how does that work?
    - CocaKoala 10y ago
      Here's a Bloomberg article from 2012 that lists ten techniques: https://www.bloomberg.com/news/articles/2012-04-17/how-to-pay-no-taxes-10-strategies-used-by-the-rich https://www.bloomberg.com/news/articles/2012-04-17/how-to-pa...
      - jstelly 10y ago
        It's worth mentioning that none of these techniques actually apply to the case where you exercise stock options - other than the one that says basically "take options as compensation if you can because you don't pay taxes until you exercise them" which is true for everyone who gets options (because you don't get any liquidity) not just rich people with expensive accountants. The only techniques that apply to income taxes are the "borrow against stock technique" (has a big caveat about a rich person who lost in court when he used it) and the deferred compensation example (which is also zero liquidity; presumably you pay all of the income taxes when you actual get the money). The article makes a better case for ways to avoid death taxes or real estate taxes though.

gok 10y ago

The top bracket is 52.9% in California. Of course, the Netherlands' tax brackets are much less progressive than those in the US/California; the top bracket is around ~$80K vs. ~$1M.

Maarten88 10y ago

In the Netherlands, his bonus and income would have been structured differently, he'd have had a personal holding to 'catch' the money before it would have been taxed income or capital taxes, and he'd have paid next to nothing (yet). He could have delayed selling off stock to pay taxes for as long as he'd have wanted. I'm not sure how entrepreneurs do this in the US, is Musk being patriotic paying so much taxes, or is there really no way to delay/avoid having to sell stock to pay taxes?

vilmosi 10y ago

There's a big difference between tax rate and effective tax paid.