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Read the article again. The "true tax rate" is calculated on the _increase in wealth_, which is a very reasonable alternative to income.
by rocho 5y ago
Read the article again. The "true tax rate" is calculated on the _increase in wealth_, which is a very reasonable alternative to income.
- Kalium 5y agoExcellent advice! I read and understood the article as using this the first time. I feel my criticism stands, though again I understand that others may feel differently.
- throwkeep 5y agoI don't understand. How that is a reasonable alternative to income? The degree to which your stock goes up or down is irrelevant for tax purposes, until you sell.
- rocho 5y agoIt is reasonable in this analysis, which is trying to compare normal people to billionaires. As explained in the article, wealthy people can get loans collateralized by their financial assets. Then they proceed to spend and pay back the loan (which is a deductible expense). The result is that they pay minuscule taxes compared to their worth (read more here: https://news.ycombinator.com/item?id=27447959 https://news.ycombinator.com/item?id=27447959 and here: https://news.ycombinator.com/item?id=27438941 https://news.ycombinator.com/item?id=27438941). The argument that their worth is not spendable until they sell does not stand up to scrutiny, as the example above shows. So you end up with these wealthy people spending a ton and increasing their net worth by huge amounts, and paying small (or zero!) taxes. I agree with you that a different tax law that calculated owed tax like this would not be completely reasonable, but it certainly shows the inequality and I believe it's a reasonable alternative. How would you measure the tax impact on the mega-rich otherwise?