7 ms·

With corporate tax off table, U.S. Democrats turn to billionaires

24 points by rawgabbit 5y ago

neonate 5y ago
https://archive.md/TnnTQ https://archive.md/TnnTQ
exabrial 5y ago
Another option: Stop spending money on dumb stuff to free up money for important stuff. When the EPA is paying $5000/piece for office chairs, they have all the money they need to combat climate change. The need to run like a startup.
- n42 5y ago
  unfounded claims aside, $5000 on an office chair sounds like a startup to me :)
  - exabrial 5y ago
    well played sir
- notananthem 5y ago
  Yes, we should gut our military spending which would fund all the important stuff
  - sidhuko 5y ago
    Better learn chinese then.
  - ericmay 5y ago
    I'm a big fan of really reducing our military in size/budget but I think this is an easy one to pick on but once you start peeling back layers it gets more and more difficult. Personally I'd rather phase out programs like Social Security that I'll never see a dime of yet have to pay for, and/or combine multiple programs into a UBI of sorts. But then once you start talking about these things (like hey let's get rid of the TSA or the military) you start to realize... they are jobs programs and what are you going to do with so many people out of work? Will they start tech companies? Beats me. At least the military enforces the Petrodollar system which benefits you (assuming you're an American) so it's not like it's just all sunk cost or something. Outside of the general "no" from some people w.r.t universal health care I think that's another reason the federal government has been so unproductive in just making it happen. You going to fire all of those people and completely re-tool the economy? It's not that easy. But also the military while a large portion of the budget isn't that crazy relative to what we're doing. Should we pull out of Germany, Japan, and South Korea? Only sell weapons? Should we pull forces out of the Pacific and let China conquer Taiwan (or unify depending on your perspective)? I think it starts to get very complicated, very quickly. -edit- A quick tangent unrelated to your comment is that we've been trained to assume that all government spending is "waste" which is kind of irritating. Items like the infrastructure bill (or at least components of it at a minimum) can be viewed as investments with ROI instead.
  - adventured 5y ago
    Unfortunately it wouldn't remotely begin to scratch the surface of funding our spending issues. The US is facing perma trillion dollar annual budget deficits, even with tax hikes. You could reduce our military spending to a reasonable 2% of GDP - ~$450 billion - and the difference wouldn't even cover half of our debt interest per year at this point. The US probably needs to be spending $150-$200 billion on additional annual infrastructure spending at this point, for at least a decade. Entitlements or healthcare? Throwing an extra $100 billion at those per year is a drop in the bucket ($100b = ~2.6% of US healthcare spending per year). For 20 years spending growth has been far outpacing economic growth, it has been plainly unsustainable for a long time. Now we're putting everything on the global reserve USD credit card. You can't keep growing spending at 7-8% while your economy grows at half that rate or less - unless you're willing to go the currency debasement route, which is what they've chosen thus far.
  - readflaggedcomm 5y ago
    That's about ten percent of spending. The social safety net (the important stuff) is already most spending: https://www.cbo.gov/publication/57170 https://www.cbo.gov/publication/57170 Cutting military spending to politicians usually means something else, like cutting benefits to warriors who've already served (thus not really military spending).
- themitigating 5y ago
  Can you provide proof they spent that on chairs?
  - paxys 5y ago
    I'm assuming the "source" is something they saw on a Facebook group
    - the-dude 5y ago
      How is your assumption anything better than a FB group? I Ducked 'epa expensive office chairs' and got this : https://www.forbes.com/sites/adamandrzejewski/2015/10/01/epa-supersizes-furniture-cost-while-downsizing-2000-employees/ https://www.forbes.com/sites/adamandrzejewski/2015/10/01/epa...
      - handrous 5y ago
        Story's crap, see my post about the exact same piece, above. TL;DR the actual story is "EPA spent about $600 per employee per year on office furniture and moving and storage expenses related to office furniture, over 10 years" which is... not a story.
        the-dude 5y ago
        Well, as far as I glanced it, it did cover multiple chairs of 4k+. Which is admittedly not 5k, but is not crap either. The fact you are spreading it over 10 years does not make the 4k chair suddenly cheap.
        handrous 5y ago
        The piece: "ZOMG that's a $6,000 office furnishing budget per employee!"; Also the piece: "Over 10 years, and that includes various moving and storage costs including things like emptying a building of all furniture before renovations begin, and that includes stuff like conference room tables and who knows what else, so it's not like employees personally got the benefit of anywhere near that $600/yr" (and yes, I checked, the $6,000 is the over-10-years figure, not per year, which would be way too much, plus they're dividing by a number of employees that's significantly lower than what they had for some of those years) Yes, some furniture pieces are very expensive. No, that's not always unjustifiable. Nice furniture that works well and will last continues to cost actual money—compare it to Ikea or Ashley Furniture or whatever, and it'll always look expensive. It's also possible they're under restrictions, explicit or implicit, about where they can spend that money—your budget-tier options are going to be limited or nonexistent if you're restricted to American companies, for instance. Given these figures, what they were not doing was giving any significant percentage of their employees insanely-nice furniture. I'm also curious how many of the top-end items the piece singles out were for political appointees' offices. That could be corruption, sure, but it's a very different kind of issue from the EPA itself having a spending problem. Meanwhile, $600/employee/yr seems well within the bounds of normal. Piece is bullshit. [EDIT] it's also—and this was the most credible-looking source I could find for this, mind you—some guy "reporting" on figures that an organization he heads came up with. Check the about-the-author bit at the bottom. So. There's that. [EDIT EDIT] I just checked Herman Miller's price book. That $15,000 conference room table the article calls out (inattentive reader: "Oh my god, my dining room table only cost $300 at Ikea, that's insane!")? Based on what I'm seeing, it must have been enormous. Think "20 feet long" enormous. Tables that big are expensive. Are there cheaper ones? Yes. Are 100% of tables that size—which are in limited demand—going to seem absurdly expensive when presented this way? Also yes.
- rhacker 5y ago
  As long as the $5000 is going to American hands only, that's probably a good thing. What we need to do is bolster companies that don't outsource the US $.
- rmk 5y ago
  https://www.washingtontimes.com/news/2015/sep/24/golden-hammer-epas-fondness-for-high-end-furniture/ https://www.washingtontimes.com/news/2015/sep/24/golden-hamm... This is a painful read. $814 for a container for pencils? Really? Even more egregious is highly-paid (and I really mean, highly paid, even more than most SV people) employees who do not show up for work (the kicker: they also got bonuses, apparently)! But this is chump change compared to some of the excesses of last year. The Paycheck Protection Program was basically a huge stimulus program, with many loans being 'forgiven'. That's right, going concerns that anticipated difficulties in operating their businesses (note that they had not actually run into trouble) took out these loans that were later forgiven. This program was nearly a trillion. That's a Trillion. With a T. I'm sure some of this saved businesses from going under, tiding them over until they could recover, but in a highly inefficient, wasteful way. Of course, it will be cast as 'Stimulus' when fiscally-minded people ask for an accounting, and more taxes, such as this one, which lays hands on unrealized gains, will be proposed to fund such 'Stimulus' benders!
- deleted 5y ago
  [deleted]
- trinovantes 5y ago
  The problem of government budgets is that you either spend it or you lose it
Freestyler_3 5y ago
700 billionaires stat mentioned (they have 5000-6000 billion) 200-250 billion tax income That is a 5% tax estimate on total wealth, if you take the percentage of actual wealth increase then it is much higher. To be honest a fixed percentage tax would then be better because it will force them to invest, too big percentage and they will have to take risky investments, and forcing people in that corner is not good.
- refurb 5y ago
  What do you mean “force them to invest”? This is a tax on unrealized capital gains. The money is already invested. If anything they’d need to sell investments to pay the tax.
  - AnimalMuppet 5y ago
    And then also have to pay income tax (or capital gains tax) on the profits from the sale.
- jelliclesfarm 5y ago
  I agree. The population of the USA is increasing. After India and China, it is the most populous country. It is better for the United States to look at Indian Tax structures and codes. Because that’s this country’s future. You can’t have a thin section of tax payers supporting the majority of the population. Developed vs developing countries is not just about standard of living. It is about GDP and what percentage of the population is productive. By that measure, America is a developing country. https://en.m.wikipedia.org/wiki/Developing_country https://en.m.wikipedia.org/wiki/Developing_country A developing country is a country with a less developed industrial base and a low Human Development Index (HDI) relative to other countries.[1] However, this definition is not universally agreed upon. There is also no clear agreement on which countries fit this category.[2][3] The term low and middle-income country (LMIC) is often used interchangeably but refers only to the economy of the countries. The World Bank classifies the world's economies into four groups, based on Gross National Income per capita: high, upper-middle, lower-middle, and low income countries. Least developed countries, landlocked developing countries and small island developing states are all sub-groupings of developing countries. Countries on the other end of the spectrum are usually referred to as high-income countries or developed countries.
jude- 5y ago
The article says this will tax unrealized gains on assets held by "exceptionally wealthy individuals," but what does that mean? Do folks who have equity options at a startup get hit by this?
- morpheuskafka 5y ago
  Other articles are saying that the criteria for the tax to apply is $1 billion in assets, or three consecutive years of $100 million or more in income. I didn't look into the exact wording of the tax, but it would presumably apply to equity options the same as any other option. However, it would only apply to those who met one of the two criteria.
- notananthem 5y ago
  Are you one of the 700 top billionaires? If you have to ask this, it doesn't apply to you.
  - mrfusion 5y ago
    First they came for the billionaires…
- nrmitchi 5y ago
  According to the first paragraph of this article, it targets "the country's roughly 700 billionaires". It seems pretty safe to say that regular individuals at the vast majority of start-ups would not be affected. Really I think this question speaks to one of the core problems around taxation discussion of extreme-net-worth individuals; there is a huge difference between winning $20M in the start-up lottery, and being a literal billionaire.
  - deleted 5y ago
    [deleted]
- rmk 5y ago
  This is a twist on a somewhat similar system used in the Netherlands, I think. Over there, you pay 4% (or something like that; some amount of gains are 'assumed') on the assets you are holding, such as stock, every year. https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#Box_3:_savings_and_investment https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#Bo... Here, the proposal is that if the asset is held and grows in value, then it will be taxed without it being sold (i.e., the unrealized gains will be taxed). I very much doubt if this will pass without legal challenges, and it may not stand up to close scrutiny in court.
roamerz 5y ago
It’s nice to see they have started to refer to this for what it really is rather than an infrastructure bill. Thank God for Manchin and Sineme even though I suspect they will cave when there are enough sweeteners specific to them. I hope I am wrong about that.
- adventured 5y ago
  Manchin's days as a Democrat are largely over. He'll never win re-election in West Virginia in the Senate unless he sticks carefully to the center or goes right. And of course he is fully aware of it. Arizona is more of a mixed right / left scenario, so Sinema should be slightly better positioned. She doesn't need to worry nearly so much about being voted out as Manchin.
notananthem 5y ago
Paywall, but yes, great. Sucks they're limiting the tax to the 0.0001% instead of the 1% though but understand.
- throw_nbvc1234 5y ago
  http://paulgraham.com/wtax.html http://paulgraham.com/wtax.html 60 year timeframe is probably off for most billionaires but the underlying point still stands.
- WkndTriathlete 5y ago
  The top 0.1% - 10% already pay the majority of taxes in the US. Beyond 0.1% the tax rate drops off due to loopholes in the tax code. Eliminating all of the loopholes, re-evaluating the marginal tax rates, and taxes on corporate income or a VAT make sense. Unfortunately it seems to easy to whip up people into a frenzy about some of those solutions because they can't math.
- coolspot 5y ago
  To be in the top 1% by income a family has to earn $421,926 (basically povetry level in Bay Area) https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to-be-in-the-top-1percent-in-every-us-state.html https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to...
  - refurb 5y ago
    You didn’t just claim $421,926 per year for a family in the Bay Area is “basically poverty level” did you?
    - jxidjhdhdhdhfhf 5y ago
      Classic Hacker News: I earn $800k at my FAANG job which puts me barely above the poverty line in CA. Please don't raise my taxes or I'll be living under a bridge.
    - jelliclesfarm 5y ago
legitster 5y ago
> Under the “Billionaire Income Tax” proposal, the federal government would require billionaires to pay taxes on the increased value of assets such as stocks on an annual basis, regardless of whether they sell those assets. > They could also take deductions for any annual loss in value of those assets. > House of Representatives Speaker Nancy Pelosi said on Sunday the plan has plenty of appeal but that it may only bring in $200 billion to $250 billion, requiring fellow Democrats to rely on other revenue raisers to fully pay for their plan. > "The billionaires tax ... has an appeal, but it doesn't produce that much money," she told CNN. This whole idea is thoroughly underbaked. In an economic downturn, the government could end up losing money in this scheme. And it would take less money from the wealthy than a garden variety VAT would.
- AnimalMuppet 5y ago
  Don't they have to spend it for a VAT to take effect? The idea of this tax was that the billionaires would get taxed even on unrealized gains (maybe not the exact correct term). That is, they couldn't just sit on the money. With a VAT, they can. But Pelosi shows that this runs into the usual problem of big-spending plans - they run out of other people to take the money from. Eventually, they have to take the money from you, no matter how much they promised the wouldn't...
  - legitster 5y ago
    If the problem is that billionaires are taking out loans against their unrealized gains, at least with a VAT you are taxing them on everything they are buying with the loan.
    - AnimalMuppet 5y ago
      No, I don't think that's the problem[1]. It's the unrealized gains, whether or not they take out loans. And I suspect (with no data) that by far, most unrealized gains have no loans against them. [1] There are two versions of what "the problem" is. The first is that people can accumulate assets, completely untaxed, in the form of unrealized capital gains. The other problem is "we [Congress] don't have enough money". For either problem, VAT doesn't really address it.
cwkoss 5y ago
I am once again asking for a progressive tax on corporate revenue. Scale breeds corruption, monopoly and power imbalances which lead to market distortions. If you love the free market, you should support a progressive tax on revenue that would allow small businesses to compete with megacorps by taxing revenue based on corp size - make it financially beneficial to spin off smaller companies to be independent entities. Billionaires are largely a symptom of excessive corporate power in our nation.
- sidhuko 5y ago
  This is the answer really. Wealth accumulation and powerful enterprises lobbying and dividing societies in their own interests. Whether its BP making you believe your own carbon footprint offsets there or social media giants playing to one-side in an election to keep favourable rules in place. You won't see this common sense in politics though as it would open more competition if they weren't able to using lobbying to support their own reelections.
- legitster 5y ago
  Milton Friedman of all people actually had a really clever solution for this all back in the day: > …the abolition of the corporate income tax, … with the requirement that corporations be required to attribute their income to stockholders, and that stockholders be required to include such sums on their tax returns. Basically treat all corporate income as pass-through income to shareholders. So if Acme Co has 1 million shareholders and they generate $100 million in revenue, each shareholder adds $100 in income to their personal income taxes next year. If corporations want to keep shareholders, they will need to pay out dividends at least enough to cover the tax bill. But that's between shareholders and corporations.
  - AnimalMuppet 5y ago
    So here's a grocery store that has profit of 1% of revenue. They (or their shareholders) have to pay tax on the revenue? That can't work - not without them raising prices 20% or so...
mrfusion 5y ago
It’s funny we can’t even discuss cutting spending.
- adventured 5y ago
  Or re-allocating existing spending based on more rational priorities. We're spending the equivalent of 40%+ of our economy on government (federal + state + local). How does our return on investment look the past 20 years during the great spending growth bonanza (which, amusingly, George W Bush & Co. ushered in)? Extraordinarily poor. The US spends like it's a Scandinavian nation, without the positive outcome. We have so little to show for our government spending it's quite grotesque.
mberning 5y ago
We need a dramatically overhauled taxation system. We should stop using taxes as a cudgel to promote political agendas or enforce moral virtues.
- readflaggedcomm 5y ago
  That's what voters want, sin and "nudge" taxes. It's a way to express power over other people to get them to do what you want, which is the purpose of democracy.
tschellenbach 5y ago
The current tax system is weird. If you're poor it's pretty straightforward. If you're middle-class you get hit by weird rules that don't make sense and can end paying a lot of taxes. Some examples are international tax rules and AMT on stock options. When you get very wealthy (IE net worth >25M is required for good wealth/tax management) you end up paying very little taxes. I'd prefer real solutions to the tax system instead of applying more duct-tape to it. The same for the climate plans. Any real solution requires an efficient carbon pricing market. Instead we get a subsidy on all electric cars other than Tesla.
- aidenn0 5y ago
  Why have zero politicians suggested unifying our income tax with qualified dividends/capital gains? It seems like such an obvious move that I must be missing something...
- Freestyler_3 5y ago
  middle class buys a 500k house, which is more than they have. wealthy people buy a house but it is only a fraction of their wealth. Proportions are different Simple thing as food too, they might eat more expensive but if you look at it they only buy food for 0.01% of their wealth and middle class 10%. (fictional numbers but roughly this is how it is)
kevinventullo 5y ago
I wonder whether this will add volatility to the stock market, since now there is less incentive for billionaires to buy-and-hold.
stevenalowe 5y ago
It’s good that soak-the-rich tax schemes never backfire :/
smitty1e 5y ago
The tax code is an iron rod of oppression and needs to be nuked from orbit, then replaced with a coherent system. At the same time, Congress needs to budget in a sane way.

24 points by rawgabbit 5y ago

https://archive.md/TnnTQ https://archive.md/TnnTQ

Another option: Stop spending money on dumb stuff to free up money for important stuff. When the EPA is paying $5000/piece for office chairs, they have all the money they need to combat climate change. The need to run like a startup.

n42 5y ago
unfounded claims aside, $5000 on an office chair sounds like a startup to me :)
- exabrial 5y ago
  well played sir
notananthem 5y ago
Yes, we should gut our military spending which would fund all the important stuff
- sidhuko 5y ago
  Better learn chinese then.
- ericmay 5y ago
  I'm a big fan of really reducing our military in size/budget but I think this is an easy one to pick on but once you start peeling back layers it gets more and more difficult. Personally I'd rather phase out programs like Social Security that I'll never see a dime of yet have to pay for, and/or combine multiple programs into a UBI of sorts. But then once you start talking about these things (like hey let's get rid of the TSA or the military) you start to realize... they are jobs programs and what are you going to do with so many people out of work? Will they start tech companies? Beats me. At least the military enforces the Petrodollar system which benefits you (assuming you're an American) so it's not like it's just all sunk cost or something. Outside of the general "no" from some people w.r.t universal health care I think that's another reason the federal government has been so unproductive in just making it happen. You going to fire all of those people and completely re-tool the economy? It's not that easy. But also the military while a large portion of the budget isn't that crazy relative to what we're doing. Should we pull out of Germany, Japan, and South Korea? Only sell weapons? Should we pull forces out of the Pacific and let China conquer Taiwan (or unify depending on your perspective)? I think it starts to get very complicated, very quickly. -edit- A quick tangent unrelated to your comment is that we've been trained to assume that all government spending is "waste" which is kind of irritating. Items like the infrastructure bill (or at least components of it at a minimum) can be viewed as investments with ROI instead.
- adventured 5y ago
  Unfortunately it wouldn't remotely begin to scratch the surface of funding our spending issues. The US is facing perma trillion dollar annual budget deficits, even with tax hikes. You could reduce our military spending to a reasonable 2% of GDP - ~$450 billion - and the difference wouldn't even cover half of our debt interest per year at this point. The US probably needs to be spending $150-$200 billion on additional annual infrastructure spending at this point, for at least a decade. Entitlements or healthcare? Throwing an extra $100 billion at those per year is a drop in the bucket ($100b = ~2.6% of US healthcare spending per year). For 20 years spending growth has been far outpacing economic growth, it has been plainly unsustainable for a long time. Now we're putting everything on the global reserve USD credit card. You can't keep growing spending at 7-8% while your economy grows at half that rate or less - unless you're willing to go the currency debasement route, which is what they've chosen thus far.
- readflaggedcomm 5y ago
  That's about ten percent of spending. The social safety net (the important stuff) is already most spending: https://www.cbo.gov/publication/57170 https://www.cbo.gov/publication/57170 Cutting military spending to politicians usually means something else, like cutting benefits to warriors who've already served (thus not really military spending).
themitigating 5y ago
Can you provide proof they spent that on chairs?
- paxys 5y ago
  I'm assuming the "source" is something they saw on a Facebook group
  - the-dude 5y ago
    How is your assumption anything better than a FB group? I Ducked 'epa expensive office chairs' and got this : https://www.forbes.com/sites/adamandrzejewski/2015/10/01/epa-supersizes-furniture-cost-while-downsizing-2000-employees/ https://www.forbes.com/sites/adamandrzejewski/2015/10/01/epa...
    - handrous 5y ago
      Story's crap, see my post about the exact same piece, above. TL;DR the actual story is "EPA spent about $600 per employee per year on office furniture and moving and storage expenses related to office furniture, over 10 years" which is... not a story.
      - the-dude 5y ago
        Well, as far as I glanced it, it did cover multiple chairs of 4k+. Which is admittedly not 5k, but is not crap either. The fact you are spreading it over 10 years does not make the 4k chair suddenly cheap.
        handrous 5y ago
        The piece: "ZOMG that's a $6,000 office furnishing budget per employee!"; Also the piece: "Over 10 years, and that includes various moving and storage costs including things like emptying a building of all furniture before renovations begin, and that includes stuff like conference room tables and who knows what else, so it's not like employees personally got the benefit of anywhere near that $600/yr" (and yes, I checked, the $6,000 is the over-10-years figure, not per year, which would be way too much, plus they're dividing by a number of employees that's significantly lower than what they had for some of those years) Yes, some furniture pieces are very expensive. No, that's not always unjustifiable. Nice furniture that works well and will last continues to cost actual money—compare it to Ikea or Ashley Furniture or whatever, and it'll always look expensive. It's also possible they're under restrictions, explicit or implicit, about where they can spend that money—your budget-tier options are going to be limited or nonexistent if you're restricted to American companies, for instance. Given these figures, what they were not doing was giving any significant percentage of their employees insanely-nice furniture. I'm also curious how many of the top-end items the piece singles out were for political appointees' offices. That could be corruption, sure, but it's a very different kind of issue from the EPA itself having a spending problem. Meanwhile, $600/employee/yr seems well within the bounds of normal. Piece is bullshit. [EDIT] it's also—and this was the most credible-looking source I could find for this, mind you—some guy "reporting" on figures that an organization he heads came up with. Check the about-the-author bit at the bottom. So. There's that. [EDIT EDIT] I just checked Herman Miller's price book. That $15,000 conference room table the article calls out (inattentive reader: "Oh my god, my dining room table only cost $300 at Ikea, that's insane!")? Based on what I'm seeing, it must have been enormous. Think "20 feet long" enormous. Tables that big are expensive. Are there cheaper ones? Yes. Are 100% of tables that size—which are in limited demand—going to seem absurdly expensive when presented this way? Also yes.
rhacker 5y ago
As long as the $5000 is going to American hands only, that's probably a good thing. What we need to do is bolster companies that don't outsource the US $.
rmk 5y ago
https://www.washingtontimes.com/news/2015/sep/24/golden-hammer-epas-fondness-for-high-end-furniture/ https://www.washingtontimes.com/news/2015/sep/24/golden-hamm... This is a painful read. $814 for a container for pencils? Really? Even more egregious is highly-paid (and I really mean, highly paid, even more than most SV people) employees who do not show up for work (the kicker: they also got bonuses, apparently)! But this is chump change compared to some of the excesses of last year. The Paycheck Protection Program was basically a huge stimulus program, with many loans being 'forgiven'. That's right, going concerns that anticipated difficulties in operating their businesses (note that they had not actually run into trouble) took out these loans that were later forgiven. This program was nearly a trillion. That's a Trillion. With a T. I'm sure some of this saved businesses from going under, tiding them over until they could recover, but in a highly inefficient, wasteful way. Of course, it will be cast as 'Stimulus' when fiscally-minded people ask for an accounting, and more taxes, such as this one, which lays hands on unrealized gains, will be proposed to fund such 'Stimulus' benders!
deleted 5y ago
[deleted]
trinovantes 5y ago
The problem of government budgets is that you either spend it or you lose it

Freestyler_3 5y ago

700 billionaires stat mentioned (they have 5000-6000 billion) 200-250 billion tax income That is a 5% tax estimate on total wealth, if you take the percentage of actual wealth increase then it is much higher. To be honest a fixed percentage tax would then be better because it will force them to invest, too big percentage and they will have to take risky investments, and forcing people in that corner is not good.

refurb 5y ago
What do you mean “force them to invest”? This is a tax on unrealized capital gains. The money is already invested. If anything they’d need to sell investments to pay the tax.
- AnimalMuppet 5y ago
  And then also have to pay income tax (or capital gains tax) on the profits from the sale.
jelliclesfarm 5y ago
I agree. The population of the USA is increasing. After India and China, it is the most populous country. It is better for the United States to look at Indian Tax structures and codes. Because that’s this country’s future. You can’t have a thin section of tax payers supporting the majority of the population. Developed vs developing countries is not just about standard of living. It is about GDP and what percentage of the population is productive. By that measure, America is a developing country. https://en.m.wikipedia.org/wiki/Developing_country https://en.m.wikipedia.org/wiki/Developing_country A developing country is a country with a less developed industrial base and a low Human Development Index (HDI) relative to other countries.[1] However, this definition is not universally agreed upon. There is also no clear agreement on which countries fit this category.[2][3] The term low and middle-income country (LMIC) is often used interchangeably but refers only to the economy of the countries. The World Bank classifies the world's economies into four groups, based on Gross National Income per capita: high, upper-middle, lower-middle, and low income countries. Least developed countries, landlocked developing countries and small island developing states are all sub-groupings of developing countries. Countries on the other end of the spectrum are usually referred to as high-income countries or developed countries.

jude- 5y ago

The article says this will tax unrealized gains on assets held by "exceptionally wealthy individuals," but what does that mean? Do folks who have equity options at a startup get hit by this?

morpheuskafka 5y ago
Other articles are saying that the criteria for the tax to apply is $1 billion in assets, or three consecutive years of $100 million or more in income. I didn't look into the exact wording of the tax, but it would presumably apply to equity options the same as any other option. However, it would only apply to those who met one of the two criteria.
notananthem 5y ago
Are you one of the 700 top billionaires? If you have to ask this, it doesn't apply to you.
- mrfusion 5y ago
  First they came for the billionaires…
nrmitchi 5y ago
According to the first paragraph of this article, it targets "the country's roughly 700 billionaires". It seems pretty safe to say that regular individuals at the vast majority of start-ups would not be affected. Really I think this question speaks to one of the core problems around taxation discussion of extreme-net-worth individuals; there is a huge difference between winning $20M in the start-up lottery, and being a literal billionaire.
- deleted 5y ago
  [deleted]
rmk 5y ago
This is a twist on a somewhat similar system used in the Netherlands, I think. Over there, you pay 4% (or something like that; some amount of gains are 'assumed') on the assets you are holding, such as stock, every year. https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#Box_3:_savings_and_investment https://en.wikipedia.org/wiki/Taxation_in_the_Netherlands#Bo... Here, the proposal is that if the asset is held and grows in value, then it will be taxed without it being sold (i.e., the unrealized gains will be taxed). I very much doubt if this will pass without legal challenges, and it may not stand up to close scrutiny in court.

roamerz 5y ago

It’s nice to see they have started to refer to this for what it really is rather than an infrastructure bill. Thank God for Manchin and Sineme even though I suspect they will cave when there are enough sweeteners specific to them. I hope I am wrong about that.

adventured 5y ago
Manchin's days as a Democrat are largely over. He'll never win re-election in West Virginia in the Senate unless he sticks carefully to the center or goes right. And of course he is fully aware of it. Arizona is more of a mixed right / left scenario, so Sinema should be slightly better positioned. She doesn't need to worry nearly so much about being voted out as Manchin.

notananthem 5y ago

Paywall, but yes, great. Sucks they're limiting the tax to the 0.0001% instead of the 1% though but understand.

throw_nbvc1234 5y ago
http://paulgraham.com/wtax.html http://paulgraham.com/wtax.html 60 year timeframe is probably off for most billionaires but the underlying point still stands.
WkndTriathlete 5y ago
The top 0.1% - 10% already pay the majority of taxes in the US. Beyond 0.1% the tax rate drops off due to loopholes in the tax code. Eliminating all of the loopholes, re-evaluating the marginal tax rates, and taxes on corporate income or a VAT make sense. Unfortunately it seems to easy to whip up people into a frenzy about some of those solutions because they can't math.
coolspot 5y ago
To be in the top 1% by income a family has to earn $421,926 (basically povetry level in Bay Area) https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to-be-in-the-top-1percent-in-every-us-state.html https://www.cnbc.com/2018/07/27/how-much-you-have-to-earn-to...
- refurb 5y ago
  You didn’t just claim $421,926 per year for a family in the Bay Area is “basically poverty level” did you?
  - jxidjhdhdhdhfhf 5y ago
    Classic Hacker News: I earn $800k at my FAANG job which puts me barely above the poverty line in CA. Please don't raise my taxes or I'll be living under a bridge.
  - jelliclesfarm 5y ago

legitster 5y ago

> Under the “Billionaire Income Tax” proposal, the federal government would require billionaires to pay taxes on the increased value of assets such as stocks on an annual basis, regardless of whether they sell those assets. > They could also take deductions for any annual loss in value of those assets. > House of Representatives Speaker Nancy Pelosi said on Sunday the plan has plenty of appeal but that it may only bring in $200 billion to $250 billion, requiring fellow Democrats to rely on other revenue raisers to fully pay for their plan. > "The billionaires tax ... has an appeal, but it doesn't produce that much money," she told CNN. This whole idea is thoroughly underbaked. In an economic downturn, the government could end up losing money in this scheme. And it would take less money from the wealthy than a garden variety VAT would.

AnimalMuppet 5y ago
Don't they have to spend it for a VAT to take effect? The idea of this tax was that the billionaires would get taxed even on unrealized gains (maybe not the exact correct term). That is, they couldn't just sit on the money. With a VAT, they can. But Pelosi shows that this runs into the usual problem of big-spending plans - they run out of other people to take the money from. Eventually, they have to take the money from you, no matter how much they promised the wouldn't...
- legitster 5y ago
  If the problem is that billionaires are taking out loans against their unrealized gains, at least with a VAT you are taxing them on everything they are buying with the loan.
  - AnimalMuppet 5y ago
    No, I don't think that's the problem[1]. It's the unrealized gains, whether or not they take out loans. And I suspect (with no data) that by far, most unrealized gains have no loans against them. [1] There are two versions of what "the problem" is. The first is that people can accumulate assets, completely untaxed, in the form of unrealized capital gains. The other problem is "we [Congress] don't have enough money". For either problem, VAT doesn't really address it.

cwkoss 5y ago

I am once again asking for a progressive tax on corporate revenue. Scale breeds corruption, monopoly and power imbalances which lead to market distortions. If you love the free market, you should support a progressive tax on revenue that would allow small businesses to compete with megacorps by taxing revenue based on corp size - make it financially beneficial to spin off smaller companies to be independent entities. Billionaires are largely a symptom of excessive corporate power in our nation.

sidhuko 5y ago
This is the answer really. Wealth accumulation and powerful enterprises lobbying and dividing societies in their own interests. Whether its BP making you believe your own carbon footprint offsets there or social media giants playing to one-side in an election to keep favourable rules in place. You won't see this common sense in politics though as it would open more competition if they weren't able to using lobbying to support their own reelections.
legitster 5y ago
Milton Friedman of all people actually had a really clever solution for this all back in the day: > …the abolition of the corporate income tax, … with the requirement that corporations be required to attribute their income to stockholders, and that stockholders be required to include such sums on their tax returns. Basically treat all corporate income as pass-through income to shareholders. So if Acme Co has 1 million shareholders and they generate $100 million in revenue, each shareholder adds $100 in income to their personal income taxes next year. If corporations want to keep shareholders, they will need to pay out dividends at least enough to cover the tax bill. But that's between shareholders and corporations.
- AnimalMuppet 5y ago
  So here's a grocery store that has profit of 1% of revenue. They (or their shareholders) have to pay tax on the revenue? That can't work - not without them raising prices 20% or so...

mrfusion 5y ago

It’s funny we can’t even discuss cutting spending.

adventured 5y ago
Or re-allocating existing spending based on more rational priorities. We're spending the equivalent of 40%+ of our economy on government (federal + state + local). How does our return on investment look the past 20 years during the great spending growth bonanza (which, amusingly, George W Bush & Co. ushered in)? Extraordinarily poor. The US spends like it's a Scandinavian nation, without the positive outcome. We have so little to show for our government spending it's quite grotesque.

mberning 5y ago

We need a dramatically overhauled taxation system. We should stop using taxes as a cudgel to promote political agendas or enforce moral virtues.

readflaggedcomm 5y ago
That's what voters want, sin and "nudge" taxes. It's a way to express power over other people to get them to do what you want, which is the purpose of democracy.

tschellenbach 5y ago

The current tax system is weird. If you're poor it's pretty straightforward. If you're middle-class you get hit by weird rules that don't make sense and can end paying a lot of taxes. Some examples are international tax rules and AMT on stock options. When you get very wealthy (IE net worth >25M is required for good wealth/tax management) you end up paying very little taxes. I'd prefer real solutions to the tax system instead of applying more duct-tape to it. The same for the climate plans. Any real solution requires an efficient carbon pricing market. Instead we get a subsidy on all electric cars other than Tesla.

aidenn0 5y ago
Why have zero politicians suggested unifying our income tax with qualified dividends/capital gains? It seems like such an obvious move that I must be missing something...
Freestyler_3 5y ago
middle class buys a 500k house, which is more than they have. wealthy people buy a house but it is only a fraction of their wealth. Proportions are different Simple thing as food too, they might eat more expensive but if you look at it they only buy food for 0.01% of their wealth and middle class 10%. (fictional numbers but roughly this is how it is)

kevinventullo 5y ago

I wonder whether this will add volatility to the stock market, since now there is less incentive for billionaires to buy-and-hold.

stevenalowe 5y ago

It’s good that soak-the-rich tax schemes never backfire :/

smitty1e 5y ago

The tax code is an iron rod of oppression and needs to be nuked from orbit, then replaced with a coherent system. At the same time, Congress needs to budget in a sane way.