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A Message from the Billionaire’s Club: Tax Us
- nerdponx 7y agoAre these the same billionaires squirreling money away overseas to avoid paying tax on it?
- RandomBacon 7y agoIt would be financially-irresponsible not to. Wanting to be taxed higher and avoiding being taxed are not mutually-exclusive. Like wearing a helmet: I want laws to be passed to make illegal to not wear it, but since it's not illegal, I sometimes won't wear it. I want everyone to be taxed fairly and equally, but since it's not like that, I'm going to keep as much money as I can.
- 1PlayerOne 7y agoRegardless of ulterior motives, objectively when even the billionaires are saying the level of inequality is getting out of hand, something wrong is happening...
- andrewclunn 7y agoI'm less inclined to think this is a message from billionaires, and more a message from the NYT
- noonespecial 7y agoStep 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. Step 2: Send in extra. Whatever they believe the rate should be. The IRS won't complain.
- Upvoter33 7y agoThis doesn't solve the problem generally. The goal is to get ALL such folks to pay up, not just the volunteers.
- brobdingnagians 7y agoSo they aren't volunteering, they want to force other people to pay. And perhaps give themselves a moat by making it harder for the competition or newcomers. Great. So much for their altruism.
- zapita 7y agoI’m curious what you mean by “making it harder for the competition or newcomers”. How exactly would they achieve that by lobbying for more effective taxation of the super-rich?
- Loughla 7y agoThis is an argument against taxing the super rich that I just have never understood. Don't tax the mega-rich, because I will be that one day, and it is a disincentive for me to work hard if I can only be a billionaire instead of a multi-billionaire. I just don't get it.
- brobdingnagians 7y agoNah, that's not my argument. My argument is that a tax against billionaires tends to increase the culture around "taxing more" and leaks out to taxing their corporations or subtly changing the structure of the market so that the incumbent corporation can handle it just fine, but newer ones have a difficult time getting to the point where they can compete. I'm never going to be in the mega-rich basket, and frankly, I don't want to be. But a lot of them are very good at subtle PR and lobbying to change things that benefit themselves even while making it look like they are doing something opposite. I don't trust them, especially when they are doing something that looks "against their interests" when they've never seemed to do that before in either their public or personal lives. Here's a simple example of what I mean. The billionaires pushing this tend to have certain political ideas and tend to be active in politics. If they give just their money, then they have limited political effect. But if they can get _all_ billionaire's taxed and then lobby to use _that_ money to further their political ends (including for things those other billionaires don't agree with), they can amplify the power they have to make their pet social policies. I'm not interested in helping them do that.
- ericd 7y agoThey presumably don't want to be the only rich people carrying the extra tax burden.
- shaki-dora 7y agoIt says tax us, not tax me. The difference is the core principle of taxation: very few people would voluntarily pay 30% of income or so, but a clear majority supports the requirement for everyone, including themselves, to do so. Put another way: taxation is one cooperative solution to a prisoners' dilemma.
- skybrian 7y agoThis advice is basically "be stupid with your money". If other rich people aren't going to pay in as well, you can almost certainly do more good by donating to effective charities.
- ArcanianArcher 7y agoThat would only affect those who want to pay extra. The goal is to force everyone like them to pay more in taxes.
- frobozz 7y agoThe government cannot make long-term plans to spend the income received from arbitrary donations like this. Charities handle it by encouraging people to make regular donations and by conducting campaigns to raise money for specific purposes. Extra money received by the tax office might help to pay down some existing debt or some other one-off expenditure, but it cannot be used to make ongoing improvements to public services. However, I would not be surprised if they have to keep extra money aside, possibly for years, in case of a claim for a refund (or at least keep a budget line for it, which amounts to the same thing).
- AnimalMuppet 7y agoIf government spending were limited by revenue, that would be a reasonable argument.
- SolaceQuantum 7y agoI'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. 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?
- mc32 7y agoAlso, they can disengage from tax avoidance schemes and pay full price on taxes. I’m all for billionaires paying more, but two things: the billions from billionaires don’t add much to taxes (it’d be more principle than anything), two, this is socialistic thinking on the part of the billionaires trying to coerce this on others. They don’t want to do it unless others do it.
- kyshoc 7y agoFull price, really, is what's left over after tax avoidance. Paying more than you're legally required to is simply paying extra.
- RankingMember 7y agoI think these billionaires are willing to pay more taxes with the important caveat that all other billionaires also pay more taxes. I understand that reasoning. Maybe Buffet or someone can actually start lobbying in the direction of closing loopholes.
- IG_Semmelweiss 7y agoNo, you dont. By their logic, they would not rescue a drowning man unless there was a law requiring them to do so. One can see the corruption of their logic with a simple example.
- nickik 7y agoIf 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. Not to mention that all the companies these guys own lobby against more taxes. This is PR.
- Shivetya 7y agowelcome to the 2020 US Presidential election season, where the the NYT and others float every trial balloon at the behest of their favorite candidates.
- cyborgx7 7y agoOf course that is what they will say to your face. What are they going to do? Say "haha, screw all of you!"? Doesn't change the fact that what they are lobbying for is an entirely different thing. Edit: Does HN deny that people lie for their own benefit? Or do you merely disagree with my tone?
- dexterdog 7y agoI never understood the logistics of a wealth tax. Wouldn'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't owe anything? If it doesn't what is to stop somebody who is near the borderline from just refusing to document? Won't there also be tons of loopholes to diversify your holdings to keep yourself just below the cutoff?
- lifeisstillgood 7y agoThis is true of any tax however - which is why the penalties for tax evasion are astoundingly draconian - a simple scorched earth policy
- deleted 7y ago[deleted]
- akvadrako 7y agoJust look at the how the countries that have it manage it.
- snissn 7y agoJust send the irs a check
- cpursley 7y agoI'm not sure why you're getting downvoted. There's an extra field on the US tax return for this very purpose.
- rtkwe 7y agoIt's because it's saying the solution is the ephemeral voluntary charity of some billionaires to the problem of wealth concentration. It's idiotic because: a) they're never going to give away so much money as to make themselves anywhere near not the among the wealthiest humans that have ever lived. b) only the civically minding among them will do it meaning the more amoral you are about wealth the better you do under the 'charity taxes' model. Finally c) that charity is inherently unpredictable and is likely to dry up when it's needed in national coffers the most so it's nothing to build a budget on.
- fyoving 7y agoEliminating tax deductions and the perverse incentives they entail would be a bigger boon than further taxing the successful and fortunate. The problem isn't a lack in revenue the problem is that we are spending it on the wrong stuff.
- bretpiatt 7y agoSuper difficult situation with many second and third order effects to sort out, one particularly relevant to HN .. Vested equity that isn'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... Does a VC fund have to send a statement through to LPs each year so they pay a tax bill on indirect holdings? I could go on and on...
- btown 7y agoFor founders, an 83(b) like election should cover that case, if your funds have never been liquid. But yea, this is tough. If you close all loopholes, it almost starts to look like a VAT on private investments per vehicle, which would disincentivize growth in so many ways.
- bretpiatt 7y agoBeing able to use 83(b) valuation would imply tax on book value which is not really an accurate measure of the value and would favor a whole set of structures and increase the amortization / accelerated depreciation / write-down of assets. Our current tax code, similar to a representative democracy , isn't good, it just may be the least bad of all the options out there.
- dotdi 7y agoIMHO this is a PR move through and through. The TL;DR for me is "tax us; LOL JK my money is on the Caymans".
- colin_fraizer 7y agoThey can make voluntary contributions to the U.S. Treasury in any amount they like. (So can you or I.)
- deleted 7y ago[deleted]
- natrik 7y agoEnthusiasm 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. 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.” 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. “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.” 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. 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. 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. 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. 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. Surveys undertaken in the wake of those proposals showed that roughly seven out of 10 Americans supported higher taxes on the wealthiest Americans. The swirl of attention provided an opportunity to advance the conversation around inequality, social responsibility and taxes, Mr. Hughes said. “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. The letter unequivocally declares that a wealth tax “strengthens American freedom and democracy” and “is patriotic.” 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. 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.” 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. 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. 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.” He added: “If we don’t do something to fix the glaring inequities in this economy, the pitchforks are going to come for us.” 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. 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. The final signatory was “Anonymous.”
- deleted 7y ago[deleted]
- tsss 7y agoMaybe they should start by paying the taxes they already owe.
- INTPenis 7y agoGee golly, thanks Mr. for letting us tax you like we do everyone else. Now let's earmark those funds for anything BUT the military and we're on our way. This type of bizarre story can only be about the United States.
- cpursley 7y agoWhat's stopping Billionaires from donating to the US government right now at whichever rate they think is fair? There's an extra field for this on the tax return document. Lead by example, etc. If you're going to downvote me, please explain why. I'm honestly perplexed.
- martin-adams 7y agoMy guess is that they want to level the playing field for the super-rich. If all are taxed, they feel it's even, if they give up their wealth, it weakens their ability to remain in the club. On the flip side, they may have a sense of responsibility to contribute more, but no gauge of when the contribution is enough. If the government makes that decision, then they resolve themselves of making the judgement.
- objektif 7y agoI think we should stop making this argument when we debate increasing taxes. It is about systematic change of tax code on wealthy class not at individual level.
- lvh 7y agoNothing: but that doesn’t tax all billionaires equally. The point is that you want George Soros and Grover Norquist to pay.
- Macross8299 7y agoAh, so billionaires want to pay, but only if their ego isn't sufficiently damaged by voluntarily reducing their stack. Because let's be honest, it's not like their living standards would be significantly damaged by paying a few more millions to the treasury.
- lvh 7y agoThe treasury is not out “a few million”.
- jumbopapa 7y ago
- wybiral 7y agoWell tell them to back Elizabeth Warren already.
- jamisteven 7y agoWhats 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.
- thespace123 7y agoMaybe they should pay for the NYTs paywalls first.
- Bakary 7y agoYou can disable Javascript on the site with ublock origin. Solves the issue.
- sascha_sl 7y ago2% 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. Hoarding wealth should be illegal.
- choonway 7y agomissing the " if you can. haha" from the headline.
- 1PlayerOne 7y agoThat is the punch line. By all accounts, there are many times more people who are not billionaires than billionaires. And in a functioning democratic republic, you would think that the billionaires would be taxed a lot more. But by now, even Joe the Plumber is thinking he will need those low low tax rates himself one day.
- Macross8299 7y agoBecause the "eat the rich"-style taxes DO eventually effect Joe the Plumber if he owns a plumbing business. Look at the people in this very comment section advocating for 70% marginal rates for income above 1.5x the average income.
- 1PlayerOne 7y agoCan you give evidence of what you say? Do you own a small business by any chance?
- citilife 7y agoOne thing that I find strange, is why we always discuss increasing taxes. Why not decreasing spending on ineffective things and try to improve the government. 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.
- jumbopapa 7y agoCan't help but to feel like this is virtue signaling.
- DamnYuppie 7y agoThis 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!
- bulletsvshumans 7y agoProposing coordinated action is different from taking individual action. For instance, if the intent is to pay more taxes without reducing your wealth relative to your peers, this strategy works, but writing a check to the IRS does not.
- commandlinefan 7y agoWell, they were coordinated enough to write a letter together - why not write a check together instead?
- Forge36 7y agoThere is also nothing stopping them from overpaying one year and filling an addendum next year requesting a refund next year. The request isn't too hold an individual responsible is to create a level playing field
- theseadroid 7y agoMore tax or not, I'm not sure the US government is capable of using the tax money effectively.
- qntty 7y agoIf distributing the wealth is the goal, the government is likely to do it much more efficiently than the free market, since the free market will never do it.
- theseadroid 7y agoI'm sure of that. I'm just comparing it with a few other governments, e.g. Denmark/the Netherlands.
- qntty 7y agoI certainly won't disagree with you there.
- bedhead 7y agoThere'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: * Bezos enjoys the money he rightfully earned. * His heirs are still rich - just not mega billionaires. * The US gets an effective wealth tax. * Bezos is incentivized to spend the money, much of it I'm sure charitably. 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's reminiscent of land ownership in medieval times. While we'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'll add in one more: we should have a windfall wealth tax for all these tech billionaires.
- admiralspoo 7y agoThis presumes the heirs of future billionaires will be sexually reproduced children and not clones. If a 2040 Jeff Bezos makes clones of himself, do the clones have full rights to his fortune?
- linuxftw 7y agoIt's all smoke and mirrors. If I want to transfer wealth to my kids, I could just 'invest' in their startup with an insanely high valuation (eg, 1% for $1B stake). I could also hire my children for $10m/year 10 years before I plan on being deceased. There's also just the ability to give 'gifts', living trusts, etc. Additionally, it's a good way to force capital-flight. People can just move their money to more favorable jurisdictions. Money goes to where it's most useful and least taxed. Simply put, 90% tax on anything is going to result in a $0 tax revenue. Keep that tax reasonable and you might see some of it.
- rayiner 7y agoTaxing 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: https://www.irs.gov/pub/irs-soi/14intop400.pdf https://www.irs.gov/pub/irs-soi/14intop400.pdf. There are about 500 billionaires in the US, so this is a good proxy. 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. 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: https://taxfoundation.org/how-scandinavian-countries-pay-their-government-spending https://taxfoundation.org/how-scandinavian-countries-pay-the.... (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. 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.
- roenxi 7y agoThe issue with wealth is that the amount of real resource that a person can consume caps out somewhere in the low-medium millions. 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't mean a net improvement. 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. I'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. Whatever the problem is, it still isn't inequality. The only way to have an equal society is for everyone to be dirt poor.
- Bakary 7y agoI would say the biggest problem is that the most capable humans are for the most part incentivized to work on shifting money around or producing goods and services of dubious real value and/or with plenty of negative externalities.
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- methodiosmel 7y agoBillionaires would say that. They can afford it so I don't care if they're willing to pay taxes on 100% of their income. What I worry about is when you finally get to non-billionaires like myself. So many studies show that taxing all the Billionaires 100% of their income won't come close to paying for all the insane policies our politicians keep coming up with. So inevitably, they will come for my dollars at some point (the middle class and finally the poor). Government is a beast that will only get greedier of fed... Don't feed it!
- lwhalen 7y agoAny individual or corporation is free to donate directly to the US General Fund, which is where the vast majority of tax revenue goes: https://www.treasurydirect.gov/govt/resources/faq/faq_publicdebt.htm#DebtFinance https://www.treasurydirect.gov/govt/resources/faq/faq_public... In the meantime, I need as much of the money that _I earned_ as the gov't will deign to let me keep. Why? None of your damn business, that's why. I earned it, let me save or spend it as I please, without even more of gov't sticky-fingers rooting around in my damn pie.
- nwp 7y agoI’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.