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>>A household that makes $500k on a good year is actually in the 1% statistically. They have left the working class long ago. They could work for about 7-10 yea

by dhd415 5y ago

>>A household that makes $500k on a good year is actually in the 1% statistically. They have left the working class long ago. They could work for about 7-10 years in their career and retire with an above-median salary (withdrawing following the 4% rule) in perpetuity. That is by definition not the working class: that family barely has to work in order to secure a lifetime of comfortable living.<< The "in a good year" qualifier in both your comment and the parent comment means that your conclusion that this person has left the "working class" is untrue. It's not uncommon to get a windfall (stock option vesting cliff, inheritance, capital gains, etc.) that boosts income in a single year to many multiples of one's typical income. Such an occurrence does not boost the recipient out of the working class. Managed carefully, it can change their life (buy a house, turbo-charge retirement savings, etc.) but no one's buying a private island with a single year of $500k income.

dangus 5y ago
Of course it does. The working class doesn’t get stock options, vesting cliffs, inheritance, or capital gains! Or much of a savings account or 401k, for that matter. The option to stop working for more than a few weeks or months takes you squarely out of the working class. Basically, what I’m trying to say is that the parent comment to ours is attempting to advocate for taxing just the billionaires and not to tax the moderately wealthy so much. I think that’s a flawed argument, because the moderately wealthy don’t need help, and are perhaps even more wealthy than they realize.
- chrisseaton 5y ago
  Plenty of normal working class people get options if they work at a tech company.
  - frockington1 5y ago
    When I worked at Home depot as a lot boy I got stock options
- WalterBright 5y ago
  > The working class doesn’t get stock options, vesting cliffs, inheritance, or capital gains! robinhood.com would beg to differ. Anyone can invest in the stock market and get capital gains.
  - HWR_14 5y ago
    Not at the 500k level most of them aren't getting capital gains. Or is this "anyone can be a multimillionaire - just play the lottery and get lucky" level of technically true?
    - WalterBright 5y ago
      They're getting capital gains any time they sell a stock for more than they paid. There's no magic threshhold of $500k.
      - HWR_14 5y ago
        >There's no magic threshhold of $500k. In the US in 2021 (aka, right now) the magic threshold for capital gains is $445,850-$501,600 depending on filing status. So you're technically correct that $500k isn't a magic threshold, but it's certainly in the middle of it. But more importantly, you're going down a technical rabbithole. The point of this comment chain is "what happens to people experiencing a one-time windfall capital gains of $500,000". The response was "what about RH investors". My point was they weren't making 500k, so it was irrelevant that they made income taxed as a capital gain. And I stand by that.
        WalterBright 5y ago
        > they weren't making 500k, so it was irrelevant that they made income taxed as a capital gain Sorry, but capital gains taxes start at $15,000.
        dragonwriter 5y ago
        > Sorry, but capital gains taxes start at $15,000 Long-term capital gains less than $40,400 (or higher, depending on filing status) have a 0% rate.
camgunz 5y ago
I think you're extending "working class" to mean "people who live on wages instead of capital". But most people make an additional distinction inside wage earners between workers and professionals, i.e. mechanics, factory workers, nurses, assistants vs. doctors, lawyers, software engineers, managers, etc. It's helpful in this little side discussion because policies that might affect people with (as GP says) any ability to make six figures in a year are pretty different than those that affect people without. The "works for a living" distinction isn't super relevant.
- nemothekid 5y ago
  >I think you're extending "working class" to mean "people who live on wages instead of capital". But most people make an additional distinction inside wage earners between workers and professionals, i.e. mechanics, factory workers, nurses, assistants vs. doctors, lawyers, software engineers, managers, etc. This is a meaningless distinction because there was a time where mechanics and factory workers also made 6 figure salaries. The divide should always be between someone who makes most of their money from labor rather than capital. Actors and basketball players are not people that I think should necessarily be more impacted by a wealth tax.
  - bittercynic 5y ago
    I don't want to diminish the importance of the distinction between income coming from wages vs capital, but I think there is also an important divide between people who are able to get ahead/accumulate wealth, and those who have to work as hard as they can just to scrape by.
  - camgunz 5y ago
    It maybe was meaningless when that was true, but unfortunately it isn't now. There are so many differences between the professional class and the working class that it's hard to really think where to start, huge things like health outcomes, educational opportunities, bankruptcy risk, air pollution, wealth generation, political engagement, social politics, fertility rate. I don't disagree that there are also huge differences between people making income from wages vs. capital, but that's beside the point. Your comment about actors and basketball players confuses me a little. I think those are textbook high wage earners, not people who primarily live on capital (at least until they retire anyway). And presumably yeah, once you cross $100m (which I would guess not that many actors/athletes really do), it seems reasonable for a wealth tax to kick in. Isn't wealth wealth? Why should we make carve outs for specific professions?
heavyset_go 5y ago
> It's not uncommon to get a windfall (stock option vesting cliff, inheritance, capital gains, etc.) that boosts income in a single year to many multiples of one's typical income Estate taxes don't kick in for estates worth less than $11.58 million and most states make immediate family exempt from all inheritance taxes.

by dhd415 5y ago

dangus 5y ago

Of course it does. The working class doesn’t get stock options, vesting cliffs, inheritance, or capital gains! Or much of a savings account or 401k, for that matter. The option to stop working for more than a few weeks or months takes you squarely out of the working class. Basically, what I’m trying to say is that the parent comment to ours is attempting to advocate for taxing just the billionaires and not to tax the moderately wealthy so much. I think that’s a flawed argument, because the moderately wealthy don’t need help, and are perhaps even more wealthy than they realize.

chrisseaton 5y ago
Plenty of normal working class people get options if they work at a tech company.
- frockington1 5y ago
  When I worked at Home depot as a lot boy I got stock options
WalterBright 5y ago
> The working class doesn’t get stock options, vesting cliffs, inheritance, or capital gains! robinhood.com would beg to differ. Anyone can invest in the stock market and get capital gains.
- HWR_14 5y ago
  Not at the 500k level most of them aren't getting capital gains. Or is this "anyone can be a multimillionaire - just play the lottery and get lucky" level of technically true?
  - WalterBright 5y ago
    They're getting capital gains any time they sell a stock for more than they paid. There's no magic threshhold of $500k.
    - HWR_14 5y ago
      >There's no magic threshhold of $500k. In the US in 2021 (aka, right now) the magic threshold for capital gains is $445,850-$501,600 depending on filing status. So you're technically correct that $500k isn't a magic threshold, but it's certainly in the middle of it. But more importantly, you're going down a technical rabbithole. The point of this comment chain is "what happens to people experiencing a one-time windfall capital gains of $500,000". The response was "what about RH investors". My point was they weren't making 500k, so it was irrelevant that they made income taxed as a capital gain. And I stand by that.
      - WalterBright 5y ago
        > they weren't making 500k, so it was irrelevant that they made income taxed as a capital gain Sorry, but capital gains taxes start at $15,000.
        dragonwriter 5y ago
        > Sorry, but capital gains taxes start at $15,000 Long-term capital gains less than $40,400 (or higher, depending on filing status) have a 0% rate.

camgunz 5y ago

I think you're extending "working class" to mean "people who live on wages instead of capital". But most people make an additional distinction inside wage earners between workers and professionals, i.e. mechanics, factory workers, nurses, assistants vs. doctors, lawyers, software engineers, managers, etc. It's helpful in this little side discussion because policies that might affect people with (as GP says) any ability to make six figures in a year are pretty different than those that affect people without. The "works for a living" distinction isn't super relevant.

nemothekid 5y ago
>I think you're extending "working class" to mean "people who live on wages instead of capital". But most people make an additional distinction inside wage earners between workers and professionals, i.e. mechanics, factory workers, nurses, assistants vs. doctors, lawyers, software engineers, managers, etc. This is a meaningless distinction because there was a time where mechanics and factory workers also made 6 figure salaries. The divide should always be between someone who makes most of their money from labor rather than capital. Actors and basketball players are not people that I think should necessarily be more impacted by a wealth tax.
- bittercynic 5y ago
  I don't want to diminish the importance of the distinction between income coming from wages vs capital, but I think there is also an important divide between people who are able to get ahead/accumulate wealth, and those who have to work as hard as they can just to scrape by.
- camgunz 5y ago
  It maybe was meaningless when that was true, but unfortunately it isn't now. There are so many differences between the professional class and the working class that it's hard to really think where to start, huge things like health outcomes, educational opportunities, bankruptcy risk, air pollution, wealth generation, political engagement, social politics, fertility rate. I don't disagree that there are also huge differences between people making income from wages vs. capital, but that's beside the point. Your comment about actors and basketball players confuses me a little. I think those are textbook high wage earners, not people who primarily live on capital (at least until they retire anyway). And presumably yeah, once you cross $100m (which I would guess not that many actors/athletes really do), it seems reasonable for a wealth tax to kick in. Isn't wealth wealth? Why should we make carve outs for specific professions?

heavyset_go 5y ago

> It's not uncommon to get a windfall (stock option vesting cliff, inheritance, capital gains, etc.) that boosts income in a single year to many multiples of one's typical income Estate taxes don't kick in for estates worth less than $11.58 million and most states make immediate family exempt from all inheritance taxes.