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> Well the cool thing about Western democracies is that nobody cares what you think about what they spend their money on. The cool thing about democracies is t
by kaibee 5y ago
> Well the cool thing about Western democracies is that nobody cares what you think about what they spend their money on.
The cool thing about democracies is that we could democratically decide to tax the ultra-wealthy at a much higher rate.
> And the folks hired to built that yacht (versus a home or a new company) are probably pretty happy to get the business.
And glass-makers are happy when it hails, but that doesn't mean we should be going around breaking windows.
- NikolaeVarius 5y ago> The cool thing about democracies is that we could democratically decide to tax the ultra-wealthy at a much higher rate. And yet it doesn't happen > And glass-makers are happy when it hails, but that doesn't mean we should be going around breaking windows. No one is going around breaking windows to give window makers jobs
- ceejayoz 5y ago> And yet it doesn't happen Sure it does. Quite a few European countries have a top tax bracket in the 50% range. Denmark's capital gains rate is 42%, more than double what Bezos pays here.
- yakshaving_jgt 5y agoHave a guess why Jeff Bezos hasn't decided to move to Denmark.
- ceejayoz 5y agoI suspect the US could raise capital gains tax fairly substantially before it made sense for Bezos to move himself, his assets, and his company out of the US.
- yakshaving_jgt 5y agoMaybe you're right. Maybe not. I don't know. I have somewhat the opposite opinion though — I believe people in his position have all manner of resources to facilitate the movement of assets.
- ceejayoz 5y ago> I believe people in his position have all manner of resources to facilitate the movement of assets. Sure... and yet, Bezos hasn't moved his assets somewhere with zero capital gains tax, like Switzerland. There are clearly benefits to being in the US that are worth the 20% tax rate to him. I think a lot of them would still be present if it were 30-40%.
- fastball 5y agoThat's because capital gains in Denmark aren't really capital gains, they just tax it as income. Short-term capital gains in the US are also taxed according to income tax rates, so 37% for the top bracket, which isn't far off 42%.
- ceejayoz 5y agoI can guarantee you Bezos is ensuring his Amazon shares aren't selling as short-term capital gains.
- fastball 5y agoIndeed. But it is not clear to me that Denmark's system of not distinguishing between the two is better than the US system of allowing long-term investments to incur less of a tax burden than short-term speculative gains.
- YEwSdObPQT 5y agoDo you know how you don't pay capital gains tax? You leverage your assets and are given credit. That way you don't need to sell the assets to make use of them. Guess who typically does this? The very wealthy. Guess who doesn't do it? Less wealthy people. Many of these tax laws that are enacted end up affecting people who are upper middle class and don't affect the mega rich at all. > No one is going around breaking windows to give window makers jobs. Not literally no. But metaphorically it does happen all the time: https://en.wikipedia.org/wiki/Parable_of_the_broken_window#Opportunity_cost_of_war https://en.wikipedia.org/wiki/Parable_of_the_broken_window#O...
- refurb 5y agoSo kind of like using a HELOC to borrow against the equity of your home to invest in other things without paying tax on the sale?
- YEwSdObPQT 5y agoMaybe. I don't know the specifics of it. I was listening to a podcasts and they were explaining the general principle of how leveraging works with regards to Bitcoin. The point I was generally making is that more complicated tax laws normally don't tax the people that they purport to target and normally end up affecting those that are a couple of rungs down in the class hierarchy that everyone pretends that doesn't exist in most Western Societies. For example. This was a few years ago. I saw a headline where I think I paid (relatively) a greater proportion of tax from my small Limited Company than one of American coffee franchises paid in the UK. Due to them doing some tax wangling with Ireland. If I were to do the same, I would have HMRC investigating me and I wouldn't be able to afford such an investigation. They probably have a dedicated tax compliance team. I don't.
- weatherlight 5y agoWell said.
- onemoresoop 5y agoThey're already skirting the rate that they're supposed to be paying through various machinations. They have an army of accountants, lawyers, powerful people working for them to do just that.
- netsharc 5y agoIf all else fails just treat the lawmakers who decide the tax laws and their enforcement to a nice golf trip with steak dinner and hey who are these lovely young ladies who've decided us old men are cool people to spend the evening with, let's get them some champagne. Or contribute to their (re-)election campaign...
- refurb 5y agoPlease provide a source that shows Bezos “skirted the rate they were supposed to pay”.
- aklemm 5y agoAre you American? I feel like Americans have almost completely abandoned the near-axiomatic points you made here.
- refurb 5y agoDemocracies certainly could increase tax rates and Bezos would most likely have started Amazon somewhere else. And no, glass makers and hail aren’t comparable. You need to bone up on your economics and the broken window fallacy.
- Bootvis 5y agoWhere would that somewhere else be? And would he have been as successful?
- refurb 5y agoSorry I don’t have a crystal ball to see into a hypothetical future. It would depend on the rates? I mean Musk paid $500M in taxes last year on a $1.5B exercise of options. How high you want to go?
- Bootvis 5y agoYou claimed it was likely so I assumed you had something close to a crystal ball.