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It’s very clear that the original article was a hit piece/advocacy editorial more than anything else. If you don’t believe, go look at the cover of drudge right

It’s very clear that the original article was a hit piece/advocacy editorial more than anything else. If you don’t believe, go look at the cover of drudge right now, where he’s using it to go after his favorite target, Elon musk. (making a claim that even the pro Publico article doesn’t make). All that said there’s a fundamental challenge here. People conflate unrealized wealth with income because loans offer a mechanism with cash today while deferring tax until later. As pointed out in many places, we target the 1% at the expense of not going after the .1% or even a .01%. I think it makes perfect sense for somebody to say that any loan that is backed by stocks granted on the basis of RSU, incur some additional special taxes. For all intents and purposes the principal is Realizing some of the value of the stock by getting a loan against a stock. Unfortunately articles like this which conflate things actually make it harder for us to fix the real loophole. Im fortunate to temporarily be a member of the top 1%, but not the top .1% or the top .01% my tax burden last year was 40%. That’s not including healthcare or government fees. I’m fine with that, but the fact that both people earning more than I, and earning less than I pay less in taxes as a percent is incredibly irritating. Articles like this will result in politicians blindly saying the rich need to be taxed more while the hyper Rich continue to skirt taxes.

InTheArena 5y ago
PP also failed to disclose that their argument on Musk during 2018 was while Tesla and Musk nearly went bankrupt trying to scale the M3. Not Teslas current state which is dramatically more valuable given that Tesla scaled for the M3 and MY).
- whakim 5y ago
  That may well be true, but even if Tesla had gone bankrupt in 2018, Elon Musk would still have dramatically more money than you or me. If anything, this highlights how the uber-wealthy are able to make riskier (and, on average, more profitable) investments than you or I in part because the tax system has their back. (To be clear, I wish the article had actually explained all this instead of not mentioning it.)
  - MomoXenosaga 5y ago
    Yes the rich of today are almost completely sheltered from any risk. At least the royalty and nobility in the past had to fight in wars.
    - whakim 5y ago
      They often avoided having to fight in wars too ;) On a more serious note, in the past nobility and clergy were often exempt from various taxes (e.g. the taille, the main tax in Ancien Regime France) because of the other "value" they were bringing to society - an argument not dissimilar from those we hear today against various kinds of wealth/capital gains taxes!
whakim 5y ago
The thing that really needs to be measured here is the real rate of return on these individuals' capital (i.e. post-tax returns) vs economic growth (i.e. growth in wages for ordinary people). The point isn't really about when taxation occurs (I agree this is lazy in the article), it's more that once you factor in taxes (and most serious economists of inequality do this), you end up with more money via returns on wealth than via earning an income. So there's these two concepts, and they are sort of related because they show how the tax regime favors the wealthiest of the wealthy. But the article does a poor job of this.
rndmize 5y ago
> Unfortunately articles like this which conflate things actually make it harder for us to fix the real loophole. While I would consider that a loophole, I'm not sure it's the main problem. I feel that for all the complaints and logic of the substack piece, it misses the point of the propublica one, the kind of underlying feeling that's driving it: that it's unfair that the wealthiest people in the world pay so little tax compared to people in the 10% to .1% bracket, and even compared to people in lower brackets. It's unfair that they can gain extraordinary amounts of wealth, to such a degree that it's impractical for them to even use, and yet not be taxed on any of it, unrealized or no. Because from my perspective, my monetary gains (eg. salary) don't really feel realized until I use them to buy something. Cash in the bank doesn't do much but make me feel financially safer - so why is taxing income considered reasonable, but wealth is not? And why, exactly, is it apparently reasonable to have sales taxes that don't exceed 12% (disclaimer - in the states, as far as I know); capital gains at 15%; but my income at 25%, 35%, 45%? Why is considering taxing wealth like company shares "far left end" but taxing other wealth, like my house, considered acceptable? Heck, we even have assessments and appraisals for real estate for the purpose of determining value without selling, for more accurate taxes and associated financial instruments - but taxing something that has a constant active market is the thing that's weird? The way that the substack article fails to mention Warren's millionaire wealth tax proposal is a further disappointment, and leaves me feeling like it is also a fairly weak piece of journalism, not unlike the one it criticizes. It also makes little mention of the ever-higher bracket of the estate tax, and has bits like > Sometimes stock prices go down, and that's generally not a write-off. So taxing the upside at an arbitrary point is unfair and kind of just silly. Just because it isn't a write off now doesn't mean it couldn't be if some sort of wealth tax was implemented; this a poor-faith considering of the policy. In short, while I wouldn't consider the original article to be of much merit, and certainly below propublica's usual standard, this rebuttal is hardly any better.
- teakettle42 5y ago
  > Cash in the bank doesn't do much but make me feel financially safer - so why is taxing income considered reasonable, but wealth is not? Your cash in the bank is guaranteed to not be erased tomorrow, up to the FDIC coverage limit. Stock has no inherent value until it's sold at whatever price the market is willing to pay. Claiming that I've acquired "wealth" simply because of an increase in the current market price is an extreme stretch. I don't have that money – I simply have the potential to sell my stock for some estimated, potential price.
ashtonkem 5y ago
> If you don’t believe, go look at the cover of drudge right now, where he’s using it to go after his favorite target, Elon musk. (making a claim that even the pro Publico article doesn’t make). Someone else distorting the contents of an article says nothing about the intent of the original author. They’re literally different people, who can be doing different things for different reasons
deleted 5y ago
[deleted]
croon 5y ago
> It’s very clear that the original article was a hit piece/advocacy editorial more than anything else. If you don’t believe, go look at the cover of drudge right now, where he’s using it to go after his favorite target, Elon musk. (making a claim that even the pro Publico article doesn’t make). Propublica is to gun manufacturers as drudge is to john wilkes booth.
mrow84 5y ago
> the fact that both people earning more than I, and earning less than I pay less in taxes as a percent is incredibly irritating I understand why it is irritating that those earning more pay a lower tax rate, but why do you find it irritating that those earning less do?
sorbits 5y ago
> I think it makes perfect sense for somebody to say that any loan that is backed by stocks granted on the basis of RSU, incur some additional special taxes Based on the numbers published though, it does not appear like these people are taking out loans with shares as collateral. E.g. Bezos declared 4.22B in income and paid 973M in tax. This leaves him with more than 3 billions after tax, so I sincerely doubt he also took out a loan.

InTheArena 5y ago

PP also failed to disclose that their argument on Musk during 2018 was while Tesla and Musk nearly went bankrupt trying to scale the M3. Not Teslas current state which is dramatically more valuable given that Tesla scaled for the M3 and MY).

whakim 5y ago
That may well be true, but even if Tesla had gone bankrupt in 2018, Elon Musk would still have dramatically more money than you or me. If anything, this highlights how the uber-wealthy are able to make riskier (and, on average, more profitable) investments than you or I in part because the tax system has their back. (To be clear, I wish the article had actually explained all this instead of not mentioning it.)
- MomoXenosaga 5y ago
  Yes the rich of today are almost completely sheltered from any risk. At least the royalty and nobility in the past had to fight in wars.
  - whakim 5y ago
    They often avoided having to fight in wars too ;) On a more serious note, in the past nobility and clergy were often exempt from various taxes (e.g. the taille, the main tax in Ancien Regime France) because of the other "value" they were bringing to society - an argument not dissimilar from those we hear today against various kinds of wealth/capital gains taxes!

whakim 5y ago

The thing that really needs to be measured here is the real rate of return on these individuals' capital (i.e. post-tax returns) vs economic growth (i.e. growth in wages for ordinary people). The point isn't really about when taxation occurs (I agree this is lazy in the article), it's more that once you factor in taxes (and most serious economists of inequality do this), you end up with more money via returns on wealth than via earning an income. So there's these two concepts, and they are sort of related because they show how the tax regime favors the wealthiest of the wealthy. But the article does a poor job of this.

rndmize 5y ago

> Unfortunately articles like this which conflate things actually make it harder for us to fix the real loophole. While I would consider that a loophole, I'm not sure it's the main problem. I feel that for all the complaints and logic of the substack piece, it misses the point of the propublica one, the kind of underlying feeling that's driving it: that it's unfair that the wealthiest people in the world pay so little tax compared to people in the 10% to .1% bracket, and even compared to people in lower brackets. It's unfair that they can gain extraordinary amounts of wealth, to such a degree that it's impractical for them to even use, and yet not be taxed on any of it, unrealized or no. Because from my perspective, my monetary gains (eg. salary) don't really feel realized until I use them to buy something. Cash in the bank doesn't do much but make me feel financially safer - so why is taxing income considered reasonable, but wealth is not? And why, exactly, is it apparently reasonable to have sales taxes that don't exceed 12% (disclaimer - in the states, as far as I know); capital gains at 15%; but my income at 25%, 35%, 45%? Why is considering taxing wealth like company shares "far left end" but taxing other wealth, like my house, considered acceptable? Heck, we even have assessments and appraisals for real estate for the purpose of determining value without selling, for more accurate taxes and associated financial instruments - but taxing something that has a constant active market is the thing that's weird? The way that the substack article fails to mention Warren's millionaire wealth tax proposal is a further disappointment, and leaves me feeling like it is also a fairly weak piece of journalism, not unlike the one it criticizes. It also makes little mention of the ever-higher bracket of the estate tax, and has bits like > Sometimes stock prices go down, and that's generally not a write-off. So taxing the upside at an arbitrary point is unfair and kind of just silly. Just because it isn't a write off now doesn't mean it couldn't be if some sort of wealth tax was implemented; this a poor-faith considering of the policy. In short, while I wouldn't consider the original article to be of much merit, and certainly below propublica's usual standard, this rebuttal is hardly any better.

teakettle42 5y ago
> Cash in the bank doesn't do much but make me feel financially safer - so why is taxing income considered reasonable, but wealth is not? Your cash in the bank is guaranteed to not be erased tomorrow, up to the FDIC coverage limit. Stock has no inherent value until it's sold at whatever price the market is willing to pay. Claiming that I've acquired "wealth" simply because of an increase in the current market price is an extreme stretch. I don't have that money – I simply have the potential to sell my stock for some estimated, potential price.

ashtonkem 5y ago

> If you don’t believe, go look at the cover of drudge right now, where he’s using it to go after his favorite target, Elon musk. (making a claim that even the pro Publico article doesn’t make). Someone else distorting the contents of an article says nothing about the intent of the original author. They’re literally different people, who can be doing different things for different reasons

deleted 5y ago

[deleted]

croon 5y ago

> It’s very clear that the original article was a hit piece/advocacy editorial more than anything else. If you don’t believe, go look at the cover of drudge right now, where he’s using it to go after his favorite target, Elon musk. (making a claim that even the pro Publico article doesn’t make). Propublica is to gun manufacturers as drudge is to john wilkes booth.

mrow84 5y ago

> the fact that both people earning more than I, and earning less than I pay less in taxes as a percent is incredibly irritating I understand why it is irritating that those earning more pay a lower tax rate, but why do you find it irritating that those earning less do?

sorbits 5y ago

> I think it makes perfect sense for somebody to say that any loan that is backed by stocks granted on the basis of RSU, incur some additional special taxes Based on the numbers published though, it does not appear like these people are taking out loans with shares as collateral. E.g. Bezos declared 4.22B in income and paid 973M in tax. This leaves him with more than 3 billions after tax, so I sincerely doubt he also took out a loan.