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Theater for the masses... Why? Because do you think for a moment someone making $1 million in "Capital Gains" doesn't have access to a financial professional t

Theater for the masses... Why? Because do you think for a moment someone making $1 million in "Capital Gains" doesn't have access to a financial professional to avoid paying any tax? If you want to tax the wealthy, you'll have to find a different way.

jtr1 6y ago
What would you propose?
poundofshrimp 6y ago
Mind to elaborate what kind of loopholes you’re talking about?
bejt 6y ago
Aren't things like this the way you would tax the wealthy? Think of this as a patch which fixes a bug that said financial professional would exploit.
Daishiman 6y ago
This argument doesn't make sense at all. Rich people always have access to financial professionals. Shifting tax burdens isn't free and nobody's expecting that people won't change their portfolios/tax declarations/whatever to reflect this. What it does do is alter the effective tax rate, and even a partial effect is desirable.
TomVDB 6y ago
Someone making $1M is often part of the working wealthy. No amount of advise from financial professionals will help them avoid paying tax on things like salaries, RSUs etc.
kelp 6y ago
As someone who has access to and regularly works with (pays) tax professionals and financial advisors, I've yet to be able to take advantage of much, if any, way to avoid paying any tax. Most of the things I'm aware of, and have been advised of, are things like QSBS (Qualified Small Business Stock) which I've been able to claim once. In that case it was a 5 figure gain. So the tax benefit was not particularly amazing. Yeah, others have been able to benefit much more from this. But it's a pretty narrow situation where you can. I've recently early exercised some ISOs, so if this proposed tax change didn't pass, I'd have the long term cap gains rate. I think there are some interesting things you can do with charitable trusts, but I think you're mostly deferring taxes, and I haven't had a situation where it made sense. But all in all, in the years that I've paid, what I think, are a pretty competent set of financial professionals, I've yet to come across any magical way to avoid paying any taxes. I've actually paid a large amount of taxes and have to ensure my investments and finances are planned so I can pay the tax bill when it comes due. I think most stories we hear about the wealthy not paying any taxes are either tax fraud, or substantial capital losses that offset all gains. In the capital loss situation, that's probably a temporary thing for that person, otherwise they won't be wealthy for long.
- vaidhy 6y ago
  The key difference is that as a multinational company, you have more options than as an individual. It would be even better if you have your company provide you services which are then written off as business expenses. Not having a US citizenship might be even better as you can earn your money by being a resident in a tax friendly country (say Dubai) and traveling in and out carefully.
seattle_spring 6y ago
Where is this fantasyland where making a high amount of money means you don't pay any taxes?

jtr1 6y ago

What would you propose?

poundofshrimp 6y ago

Mind to elaborate what kind of loopholes you’re talking about?

bejt 6y ago

Aren't things like this the way you would tax the wealthy? Think of this as a patch which fixes a bug that said financial professional would exploit.

Daishiman 6y ago

This argument doesn't make sense at all. Rich people always have access to financial professionals. Shifting tax burdens isn't free and nobody's expecting that people won't change their portfolios/tax declarations/whatever to reflect this. What it does do is alter the effective tax rate, and even a partial effect is desirable.

TomVDB 6y ago

Someone making $1M is often part of the working wealthy. No amount of advise from financial professionals will help them avoid paying tax on things like salaries, RSUs etc.

kelp 6y ago

As someone who has access to and regularly works with (pays) tax professionals and financial advisors, I've yet to be able to take advantage of much, if any, way to avoid paying any tax. Most of the things I'm aware of, and have been advised of, are things like QSBS (Qualified Small Business Stock) which I've been able to claim once. In that case it was a 5 figure gain. So the tax benefit was not particularly amazing. Yeah, others have been able to benefit much more from this. But it's a pretty narrow situation where you can. I've recently early exercised some ISOs, so if this proposed tax change didn't pass, I'd have the long term cap gains rate. I think there are some interesting things you can do with charitable trusts, but I think you're mostly deferring taxes, and I haven't had a situation where it made sense. But all in all, in the years that I've paid, what I think, are a pretty competent set of financial professionals, I've yet to come across any magical way to avoid paying any taxes. I've actually paid a large amount of taxes and have to ensure my investments and finances are planned so I can pay the tax bill when it comes due. I think most stories we hear about the wealthy not paying any taxes are either tax fraud, or substantial capital losses that offset all gains. In the capital loss situation, that's probably a temporary thing for that person, otherwise they won't be wealthy for long.

vaidhy 6y ago
The key difference is that as a multinational company, you have more options than as an individual. It would be even better if you have your company provide you services which are then written off as business expenses. Not having a US citizenship might be even better as you can earn your money by being a resident in a tax friendly country (say Dubai) and traveling in and out carefully.

seattle_spring 6y ago

Where is this fantasyland where making a high amount of money means you don't pay any taxes?