5 ms·
Not much appetite to discuss up in here?
by aklemm 2y ago
Not much appetite to discuss up in here?
- ch4s3 2y agoIt seems kind of like clickbait, and to the extent that you should care about the Newsweek "fairness meter" at the bottom of their own articles, this one is labeled as "unfair". It seems that the times article it references is conflating unrealized stock gains and income.
- Retric 2y agoTax loopholes are still loopholes even if you agree with them.
- SpicyLemonZest 2y agoI don't think that's true. Would you call the EITC or child tax credits loopholes?
- ceejayoz 2y agoIntentional provisions with intentional results aren't really loopholes. (Some will argue they're bad policy.) The fact that Jeff Bezos can manage to quality for a child tax credit is a bit of a loophole, though. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov... > In 2011, a year in which his wealth held roughly steady at $18 billion, Bezos filed a tax return reporting he lost money — his income that year was more than offset by investment losses. What’s more, because, according to the tax law, he made so little, he even claimed and received a $4,000 tax credit for his children.
- SpicyLemonZest 2y agoAlmost all tax loopholes people talk about are intentional policies with intentional results. The thing you're quoting is very much an example - it's very much by design that capital gains are offset by capital losses and you're taxed only on the net. (I should note that the article is being imprecise, and ordinary income is much harder to offset this way.)
- ceejayoz 2y agoThe people who wrote in the $200/400k income limits almost certainly did not plan for that to be used by Jeff Bezos. You might argue that they considered the possibility and decided closing the loophole would do more harm than good (means testing frequently does this), but it certainly wasn't the intention of the credit to give $4k to the world's second wealthiest person.
- ryandrake 2y agoI think we can all agree legislators need to better "red team" their laws, and try to predict how people will get around the spirit of the law by using technicalities in the wording of the law, so that better words can be enacted. If they did not intend for Bezos to take advantage of income limits, they should have written the law better so that he couldn't.
- Retric 2y agoYes. Again agreeing or disagreeing with policy doesn’t change if something is a loophole or not. Handouts because someone is installing rooftop solar are still handouts even if they get baked into tax policy.
- orangecat 2y agoNot paying taxes on money you haven't received is not a "loophole".
- Retric 2y agoIn other situations taxes apply to money you haven’t received. Exercise an options contract and you’re taxed before you sell the shares. At that point you could still ultimately lose money just as with capital gains.
- seanmcdirmid 2y agoRSU grants are taxed even if you haven't sold the stock you are granted. But they commonly deal with this by selling some stock right away to cover tax liabilities. The problem with exercising an option is that the stock might not be traded or can't be sold, then you have to pay the tax out of pocket, since Uncle Sam doesn't want some private non-traded stock.
- Retric 2y agoSure, but in comparison the unrealized capital gains loophole just becomes more clear. Property taxes based on assessed value are common for other asset classes like cars and land.
- javagram 2y agoUnrealized capital gains aren’t income, so it’s not a tax loophole.
- ceejayoz 2y agoThe ability to borrow virtually indefinitely against them (and other tax deferment techniques) is a tax loophole. https://www.propublica.org/article/the-secret-irs-files-trove-of-never-before-seen-records-reveal-how-the-wealthiest-avoid-income-tax https://www.propublica.org/article/the-secret-irs-files-trov... > So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it. After decades of avoiding taxes on it, there's a final loophole! > The notion of dying as a tax benefit seems paradoxical. Normally when someone sells an asset, even a minute before they die, they owe 20% capital gains tax. But at death, that changes. Any capital gains till that moment are not taxed. This allows the ultrarich and their heirs to avoid paying billions in taxes. The “step-up in basis” is widely recognized by experts across the political spectrum as a flaw in the code.
- wmf 2y agoStep-up in basis is capped (somebody forgot to mention that) so it benefits the rich but doesn't save much taxes for billionaires.
- ceejayoz 2y agoDo you have a a cite for this? Googling "step-up in basis cap" finds very little supporting the assertion, at first glance, and https://en.wikipedia.org/wiki/Stepped-up_basis https://en.wikipedia.org/wiki/Stepped-up_basis doesn't mention such a thing. I think you're may be confusing it with estate taxes. (Which the ProPublica article addresses in the subsequent few paragraphs.)
- wmf 2y agoThe step-up itself is not capped but the tax savings are capped by the estate tax limits. If your estate is less than $12M you pay no estate tax and your heirs pay no capital gains tax either; that's the loophole. But if your estate is much larger than $12M it has to pay back your loans, then pay estate tax, then the basis gets stepped up for whatever's left. There's little or no savings. AFAIK.
- marcellus23 2y ago> this one is labeled as "unfair" I was surprised to see that arrow 100% of the way to the left — but then after I voted, it changed to say "Most Readers Rated This Article CENTER / FAIR". So I'm not sure why it defaults to left, but I don't think that represents the actual rating.
- _DeadFred_ 2y agoMy house has an 'unrealized' value yet I have to pay taxes on it based on that unrealized value, which is also a value I can't unlock unless I become homeless (a much more difficult situation to be in than being 'stockless'). I can also lose that asset (which is my shelter) if I don't pay that tax on it's 'unrealized' value.
- ch4s3 2y agoA critique of property tax structures as they exist is not an argument for considering unrealized gains as income. One does not logically follow from the other. To steel man property taxes, land is immobile and requires certain government services even when it is unused (perhaps even more-so). Taxing that property is a direct an efficient(from a taxation perspective) way to fund the government services associated with that property.
- jonathankoren 2y agoNothing stops someone from selling a 3 million dollar Cupertino home and buying a $300,000 home someplace else. So it’s a bit disingenuous to say that person is “homeless”. They’d have a different home and a pile of cash.
- itsdrewmiller 2y agowith few exceptions it is even easier for rich people to realize their unrealized capital gains, but they don’t pay tax on them.
- voisin 2y agoI for one would love to know why people are downvoting you as I think you’ve made a good argument. I’d love someone to pipe up with the counter argument.
- slowmovintarget 2y agoHe did not make a good argument. Property taxes are the cost of the city's government; they include city infrastructure, police, and fire coverage. A poster below answered this. See https://news.ycombinator.com/item?id=40321399#40322190 https://news.ycombinator.com/item?id=40321399#40322190
- NegativeLatency 2y agoPretty depressing, also on you always get people crawling out of the woodwork playing devils advocate, saying people should try harder to not be poor, attacking the stats with minor flaws, or that "this is fine actually" I'm trying to be more involved in my local community, but we need some change on the national level, and I'm concerned things wont get better until they gets worse first.
- commandlinefan 2y agoOr just "maybe the government shouldn't be spending so much anyway".
- dantheman 2y agoYeah I completely agree, we need to cut spending significantly and reduce taxes for all.
- ardme 2y agoIts because it's false and misleading. What is "more", the wealthy are paying more in terms of dollar amounts. We have very high marginal tax rates in America, and we have very rich people paying a lot of taxes. In percentage terms the middle class is overtaxed the most of course. But percentage terms are an extremely misleading way to look at this. Being middle class I'm more angry that the bottom 50% on net pay no income taxes and I'm a net payer into their lifestyle.
- deleted 2y ago[deleted]