6 ms·

If You’re Getting a W-2, You’re a Sucker

ggm 5y ago
The truly amazing part of this is that if the loopholes were closed, overwhelmingly by percentage population, almost everyone in the economy would win, but astronomically large numbers of W-2 recipients oppose closing the loopholes. It's perverse "but one day maybe I can too" FOMO defence of the ultra wealthy by ordinary taxpayers. Like antiunionism, I simply can't understand it: this is no evidence of malfeasance by unions which would outweigh the benefit to owners of Starbucks, Tesla and Amazon underpaying workers, and there is no way the W-2 recipient can secure anything like the millions and millions of dollars of benefit the ultra rich secure, but masses of ordinary voters continue to oppose tax reform. We had this in spades, in Australia last election. A tax feature of fully paid franking credits was up for review and thousands of retired non recipients of franking credits opposed the reform "because they might loose out on future income" which, as pension recipients they would never ever receive: they don't own shares, and the shares they don't own never receive fully franked tax credits.
- landemva 5y ago
  '... if the loopholes were closed ...' It's not about loopholes. Instead it is about why there is presently a PERSONAL federal income tax. Simply eliminate the federal personal income tax. The employer payroll tax withholding would then drop, so people working would effectively get a raise. The fed budget was able to pay for two decades of destructing Afghanistan, so the feds will be ok.
  - formerkrogemp 5y ago
    All libertarians want the personal federal income tax cut, especially if they're high income.
    - mostertoaster 5y ago
      I want all taxes cut. I want Bezos to pay less, and I hate Amazon. Most taxes are just going to wind up in the pockets of some bureaucrat. Maybe our government would just spend less. Governments waste money. I don’t care what it is for, if it is a tax increase and I can vote against it I will. The US federal government is just the largest corporation, with 50 layers of middle management. I’ll donate to the library, and the parks fund though. Gas taxes also aren’t the worse if they’re only used for transportation purposes. Property taxes should only be used for police and fire departments, and maybe power grid work if you’re on the grid.
      - kmbfjr 5y ago
        Governments waste money on things which “we” do not agree. Noticeably absent from your list is education, which I am not implying is intentional nor do I wish to say you are against funding it. If the function of government is to help run a safe orderly society, not funding that seems to be a mistake. Now we’re adding to the list, and there is of course defense, and oh, the FAA as airplanes crashing is a bad idea. And don’t forget the SEC, FDIC, have to protect the financial sector. And here we are.
        landemva 5y ago
        FAA allowed Boeing to avoid getting a new type certification for 737MAX (large fans relocated on wing mounts to avoid scrapping runway) and what would have been costly pilot training for the new type certification. Fail, twice. UL is not government and reviews consumer electrical product safety, so safety can be done without government.
        mostertoaster 5y ago
        Education was very intentional. When I say I vote against all taxes, this is the only one I have a choice and *always* will vote against. Government schools are completely untrustworthy. There are many good teachers at them, but they’re just indoctrination centers, for progressive communist bull crap. Hey our local middle school is having the local drag club show up! The kids can’t read, but at least the boys now know it is ok to wear a dress and makeup. And I don’t give a crap if a boy wears a dress. If there were complete choice as to how to spend that money, and we could fire the shit teachers, pretty much if the local public school was simply funded by the local neighborhood, I’d be ok with that. The leftist dogma is so ingrained into our culture, even the right wingers, accept so many of their presuppositions. College education, is crap here. And people don’t actually learn how to think, but what to think. A liberal arts education was a thing once pursued for the sake of education, and now at our universities, it is just another way to make sure you believe the right narrative. Like we literally have words like “birthing person”, and “chest feeding”instead of “mom” and “breast feeding”, and everyone is so blind they can’t see how stupid that is. Yes a trans man can have a baby and breast feed it, and somehow that means we should stop using common sense. Clown world.
  - meatsauce 5y ago
    "two decades of destructing Afghanistan" Clearly you know nothing of Afghanistan, our mission there, and what we did asides from blow up terrorists. We built roads, energy and data infrastructure, government buildings, and trained countless Afghans on everything from construction to IT to self-defense. There was certainly mission creep and mistakes were certainly made, there is no arguing that. Nevertheless, we invested more money into building Afghanistan than we did dropping bombs on caves and desert compounds. Then the Biden administration handed it all to the Taliban, who sold some of it to China.
    - cmmeur01 5y ago
      “Invested” or “paid contractors exorbitant amounts” to do those things the American public (average person not corporate imperial America) would see no benefit from?
    - jl2718 5y ago
      Correct but irrelevant. I was there and did all that, and most of the people with me would have agreed with the expressed sentiment as it relates to taxes.
    - kmos17 5y ago
      It is not the Biden admin that handed it over, the deal for the hand off was negotiated and signed by the previous admin.
      - epakai 5y ago
        Trump had a "credible deterrent" that was going to magically maintain order after we left. Obviously nothing Biden could have been privy to despite leading the same military and nation.
    - fuzzfactor 5y ago
      I think with 20/20 hindsight lots of taxpayers would have preferred more of the money to be spent in the USA rather than Afghanistan. Others who see no worthwhile reason for that much tax to be levied in the first place. That's 20/20 hindsight for you.
  - Dracophoenix 5y ago
    Blame the 16th Amendment.
- meatsauce 5y ago
  How would they "win?" By dumping more money into the corrupt bureaucratic black hole? The problem isn't taxes. It is spending. In the US, record taxes are being collected, almost every year, but somehow the government waste machine just never has enough money to send to their pals.
- jl2718 5y ago
  > if the loopholes were closed, … almost everyone in the economy would win 1. Tax is not zero-sum. They take as much as they can from everybody. 2. Any additional spending would likely also have zero benefit to most people. 3. Greater tax income is only used to take on larger debt, which gets paid for mostly by wage workers. I am against loopholes for a different reason: they are anti-competitive, essentially a government-granted monopoly on investment and participation in the economy. But even a more “fair” tax is mostly a bad idea. Taxation is an anachronism. It is an inefficient and coercive way to fund public goods, and even now it’s a relatively small part of cash flow. The most efficient and effective way to finance the government is through bond sales. We don’t need taxes. Seriously, we don’t. Last year, the treasury collected $17.8T from bond sales and $4T in taxes. Bonds are valued by debt (liabilities) to GDP, so ask yourself how much real GDP growth would come from tax elimination. This should not be just a theory. It requires no modification to the constitution, and no operational changes outside of the treasury, which mostly just keeps doing what they’ve been doing already to fund the government. Congress sets the debt limit. Treasury manages bond sales. Nothing changes. My friends at the IRS might need new jobs, but I got this idea from them anyway.
  - CHY872 5y ago
    How would the bonds be paid for if not for taxes? (Genuine question. Printing money?)
    - jl2718 5y ago
      Yes; through bond sales just like they do right now. This requires some explanation. “Legal tender for all debts public and private” is what gives money its value. People must use dollars if they want the legal system to enforce contracts and rights, and will continue to do so as long as there is benefit to that. But what about inflation? In simple terms, price inflation is when demand for goods and services grows faster than supply. Most dollars are not in that demand pool, as they all start out in the investment pool. The nature of investment is that efficiency gains must match the cost, or the investment loses. So an efficient economy balances both sides with investments which increase supply, and payments to workers, which increases demand. In this scenario, monetary inflation can be used to supply investment dollars up to the point where that balance is achieved. (Obviously not all verticals are affected the same way.) Government can be seen as the public goods investor, which is supposed to increase productivity economy-wide more than their own spending. So if that’s true, and all dollars are created under that constraint, inflation is impossible. Big if, of course. Even if not, there should be a very wide berth for ‘unproductive’ investment to inflate demand equal to the over-efficient gains in supply. What about the environment? Good point. Productivity has externality cost, some more than others. Firstly, we should be maximizing investment efficiency because financial waste correlates well with environmental waste. Secondly, there could be a strong case made for selling externality rights, and this alone could probably replace all tax revenues in the budget. I don’t know how that would work legislatively. If you ask me, this is what killed Al Gore’s campaign. He suggested that we make corporations pay for their waste, instead of people pay for their work. So… bonds and maybe Pigouvian auctions.
refurb 5y ago
I mean, when I sell my $2,000 in SP500 ETF and have gains of $1,000, it’s pretty nice paying $0 in taxes versus $200-300. When my neighbor who runs a small store sold it and paid a lower tax rate, that was pretty cool too. When my friend who is a real estate agent deducts a bunch of costs from her commissions that seems reasonable. Not like this is exclusively the realm of the rich.
- mostertoaster 5y ago
  You know what is ridiculous? That service workers tips are taxed.
  - Jxl180 5y ago
    Ridiculous is thinking servers shouldn’t have to pay taxes like the rest of us. They already under report their tips/income anyway. I have no sympathy or desire to further help more people evade taxes. You’re suggesting that servers should only pay taxes on $2.15/hr even if they make $60k+ in tips? Wish I could only pay taxes on 2.15/hr of my income.
    - mostertoaster 5y ago
      Yes. That is what I’m saying. You should also tip fast food workers.
      - deleted 5y ago
        [deleted]
- Thorentis 5y ago
  How do you get away with not paying any capital gains tax?
  - refurb 5y ago
    "For example, in 2021, individual filers won’t pay any capital gains tax if their total taxable income is $40,400 or below." It's double for married filing a joint return. Then add on top the $24,000 deductible (and other possible credit/deductions). If you time your breaks from work correctly, you can claim almost $110,000 in long term capital gains and not pay a cent in tax.
polski-g 5y ago
This is just a repeat of their previous lying article about the "True Tax Rate". A term they just made up in which they recategorize unrealized capital gains as normal income.
- someguydave 5y ago
  Exactly. This genre is all about “taxes as punishment against people I hate” and has nothing to do with orderly government.

ggm 5y ago

The truly amazing part of this is that if the loopholes were closed, overwhelmingly by percentage population, almost everyone in the economy would win, but astronomically large numbers of W-2 recipients oppose closing the loopholes. It's perverse "but one day maybe I can too" FOMO defence of the ultra wealthy by ordinary taxpayers. Like antiunionism, I simply can't understand it: this is no evidence of malfeasance by unions which would outweigh the benefit to owners of Starbucks, Tesla and Amazon underpaying workers, and there is no way the W-2 recipient can secure anything like the millions and millions of dollars of benefit the ultra rich secure, but masses of ordinary voters continue to oppose tax reform. We had this in spades, in Australia last election. A tax feature of fully paid franking credits was up for review and thousands of retired non recipients of franking credits opposed the reform "because they might loose out on future income" which, as pension recipients they would never ever receive: they don't own shares, and the shares they don't own never receive fully franked tax credits.

landemva 5y ago
'... if the loopholes were closed ...' It's not about loopholes. Instead it is about why there is presently a PERSONAL federal income tax. Simply eliminate the federal personal income tax. The employer payroll tax withholding would then drop, so people working would effectively get a raise. The fed budget was able to pay for two decades of destructing Afghanistan, so the feds will be ok.
- formerkrogemp 5y ago
  All libertarians want the personal federal income tax cut, especially if they're high income.
  - mostertoaster 5y ago
    I want all taxes cut. I want Bezos to pay less, and I hate Amazon. Most taxes are just going to wind up in the pockets of some bureaucrat. Maybe our government would just spend less. Governments waste money. I don’t care what it is for, if it is a tax increase and I can vote against it I will. The US federal government is just the largest corporation, with 50 layers of middle management. I’ll donate to the library, and the parks fund though. Gas taxes also aren’t the worse if they’re only used for transportation purposes. Property taxes should only be used for police and fire departments, and maybe power grid work if you’re on the grid.
    - kmbfjr 5y ago
      Governments waste money on things which “we” do not agree. Noticeably absent from your list is education, which I am not implying is intentional nor do I wish to say you are against funding it. If the function of government is to help run a safe orderly society, not funding that seems to be a mistake. Now we’re adding to the list, and there is of course defense, and oh, the FAA as airplanes crashing is a bad idea. And don’t forget the SEC, FDIC, have to protect the financial sector. And here we are.
      - landemva 5y ago
        FAA allowed Boeing to avoid getting a new type certification for 737MAX (large fans relocated on wing mounts to avoid scrapping runway) and what would have been costly pilot training for the new type certification. Fail, twice. UL is not government and reviews consumer electrical product safety, so safety can be done without government.
      - mostertoaster 5y ago
        Education was very intentional. When I say I vote against all taxes, this is the only one I have a choice and *always* will vote against. Government schools are completely untrustworthy. There are many good teachers at them, but they’re just indoctrination centers, for progressive communist bull crap. Hey our local middle school is having the local drag club show up! The kids can’t read, but at least the boys now know it is ok to wear a dress and makeup. And I don’t give a crap if a boy wears a dress. If there were complete choice as to how to spend that money, and we could fire the shit teachers, pretty much if the local public school was simply funded by the local neighborhood, I’d be ok with that. The leftist dogma is so ingrained into our culture, even the right wingers, accept so many of their presuppositions. College education, is crap here. And people don’t actually learn how to think, but what to think. A liberal arts education was a thing once pursued for the sake of education, and now at our universities, it is just another way to make sure you believe the right narrative. Like we literally have words like “birthing person”, and “chest feeding”instead of “mom” and “breast feeding”, and everyone is so blind they can’t see how stupid that is. Yes a trans man can have a baby and breast feed it, and somehow that means we should stop using common sense. Clown world.
- meatsauce 5y ago
  "two decades of destructing Afghanistan" Clearly you know nothing of Afghanistan, our mission there, and what we did asides from blow up terrorists. We built roads, energy and data infrastructure, government buildings, and trained countless Afghans on everything from construction to IT to self-defense. There was certainly mission creep and mistakes were certainly made, there is no arguing that. Nevertheless, we invested more money into building Afghanistan than we did dropping bombs on caves and desert compounds. Then the Biden administration handed it all to the Taliban, who sold some of it to China.
  - cmmeur01 5y ago
    “Invested” or “paid contractors exorbitant amounts” to do those things the American public (average person not corporate imperial America) would see no benefit from?
  - jl2718 5y ago
    Correct but irrelevant. I was there and did all that, and most of the people with me would have agreed with the expressed sentiment as it relates to taxes.
  - kmos17 5y ago
    It is not the Biden admin that handed it over, the deal for the hand off was negotiated and signed by the previous admin.
    - epakai 5y ago
      Trump had a "credible deterrent" that was going to magically maintain order after we left. Obviously nothing Biden could have been privy to despite leading the same military and nation.
  - fuzzfactor 5y ago
    I think with 20/20 hindsight lots of taxpayers would have preferred more of the money to be spent in the USA rather than Afghanistan. Others who see no worthwhile reason for that much tax to be levied in the first place. That's 20/20 hindsight for you.
- Dracophoenix 5y ago
  Blame the 16th Amendment.
meatsauce 5y ago
How would they "win?" By dumping more money into the corrupt bureaucratic black hole? The problem isn't taxes. It is spending. In the US, record taxes are being collected, almost every year, but somehow the government waste machine just never has enough money to send to their pals.
jl2718 5y ago
> if the loopholes were closed, … almost everyone in the economy would win 1. Tax is not zero-sum. They take as much as they can from everybody. 2. Any additional spending would likely also have zero benefit to most people. 3. Greater tax income is only used to take on larger debt, which gets paid for mostly by wage workers. I am against loopholes for a different reason: they are anti-competitive, essentially a government-granted monopoly on investment and participation in the economy. But even a more “fair” tax is mostly a bad idea. Taxation is an anachronism. It is an inefficient and coercive way to fund public goods, and even now it’s a relatively small part of cash flow. The most efficient and effective way to finance the government is through bond sales. We don’t need taxes. Seriously, we don’t. Last year, the treasury collected $17.8T from bond sales and $4T in taxes. Bonds are valued by debt (liabilities) to GDP, so ask yourself how much real GDP growth would come from tax elimination. This should not be just a theory. It requires no modification to the constitution, and no operational changes outside of the treasury, which mostly just keeps doing what they’ve been doing already to fund the government. Congress sets the debt limit. Treasury manages bond sales. Nothing changes. My friends at the IRS might need new jobs, but I got this idea from them anyway.
- CHY872 5y ago
  How would the bonds be paid for if not for taxes? (Genuine question. Printing money?)
  - jl2718 5y ago
    Yes; through bond sales just like they do right now. This requires some explanation. “Legal tender for all debts public and private” is what gives money its value. People must use dollars if they want the legal system to enforce contracts and rights, and will continue to do so as long as there is benefit to that. But what about inflation? In simple terms, price inflation is when demand for goods and services grows faster than supply. Most dollars are not in that demand pool, as they all start out in the investment pool. The nature of investment is that efficiency gains must match the cost, or the investment loses. So an efficient economy balances both sides with investments which increase supply, and payments to workers, which increases demand. In this scenario, monetary inflation can be used to supply investment dollars up to the point where that balance is achieved. (Obviously not all verticals are affected the same way.) Government can be seen as the public goods investor, which is supposed to increase productivity economy-wide more than their own spending. So if that’s true, and all dollars are created under that constraint, inflation is impossible. Big if, of course. Even if not, there should be a very wide berth for ‘unproductive’ investment to inflate demand equal to the over-efficient gains in supply. What about the environment? Good point. Productivity has externality cost, some more than others. Firstly, we should be maximizing investment efficiency because financial waste correlates well with environmental waste. Secondly, there could be a strong case made for selling externality rights, and this alone could probably replace all tax revenues in the budget. I don’t know how that would work legislatively. If you ask me, this is what killed Al Gore’s campaign. He suggested that we make corporations pay for their waste, instead of people pay for their work. So… bonds and maybe Pigouvian auctions.

refurb 5y ago

I mean, when I sell my $2,000 in SP500 ETF and have gains of $1,000, it’s pretty nice paying $0 in taxes versus $200-300. When my neighbor who runs a small store sold it and paid a lower tax rate, that was pretty cool too. When my friend who is a real estate agent deducts a bunch of costs from her commissions that seems reasonable. Not like this is exclusively the realm of the rich.

mostertoaster 5y ago
You know what is ridiculous? That service workers tips are taxed.
- Jxl180 5y ago
  Ridiculous is thinking servers shouldn’t have to pay taxes like the rest of us. They already under report their tips/income anyway. I have no sympathy or desire to further help more people evade taxes. You’re suggesting that servers should only pay taxes on $2.15/hr even if they make $60k+ in tips? Wish I could only pay taxes on 2.15/hr of my income.
  - mostertoaster 5y ago
    Yes. That is what I’m saying. You should also tip fast food workers.
    - deleted 5y ago
      [deleted]
Thorentis 5y ago
How do you get away with not paying any capital gains tax?
- refurb 5y ago
  "For example, in 2021, individual filers won’t pay any capital gains tax if their total taxable income is $40,400 or below." It's double for married filing a joint return. Then add on top the $24,000 deductible (and other possible credit/deductions). If you time your breaks from work correctly, you can claim almost $110,000 in long term capital gains and not pay a cent in tax.

polski-g 5y ago

This is just a repeat of their previous lying article about the "True Tax Rate". A term they just made up in which they recategorize unrealized capital gains as normal income.

someguydave 5y ago
Exactly. This genre is all about “taxes as punishment against people I hate” and has nothing to do with orderly government.