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It always puzzled me how tax-adverse some wealthy people are. I'm not talking about the wealthy people that have 100% of their wealth tied up to company (stock

• WA 2y ago
  Plus complaining about "billions of taxes" (absolute, big and scary sounding numbers) and never mentioning the actual tax rate as a percentage of their gains (probably in the low single digits).
  • valval 2y ago
    It’s unfortunate that your thinking has been reduced to this by democratic rhetoric. No, the country isn’t “the rich paying their fair share” away from thriving, here or anywhere else in the world.
• SoftTalker 2y ago
  Why does this puzzle you? It seems like completely expected behavior to me. Most people try to minimize taxes. Who do you know that gladly pays more than they legally have to pay?
  • xmprt 2y ago
    I feel like if I were a billionaire or even a multi millionaire, I'd have better things to spend my time doing than worrying about taxes.
    • spencerchubb 2y ago
      I assume they don't do the work themselves, they pay a tax expert. If I was a rich businessman I wouldn't want to spend any more time than necessary thinking about taxes
    • fallingknife 2y ago
      You wouldn't spend any time. You would pay a CPA $300K per year to save you millions in tax liability and never even think about it.
      • paulryanrogers 2y ago
        Or decades ago you'd face a 70-90% tax rate, stop fighting it, and be happy with an upper middle-class life. Unless you're a certain washed up actor turned governor.
  • relaxing 2y ago
    > Most people try to minimize taxes. I don’t think this is true. Most people pay more in taxes, and receive the pleasure of a refund check come April.
    • bentley 2y ago
      Even these people try to minimize their taxes so the refund is larger.
      • relaxing 2y ago
        By doing what? Letting their tax preparer select the EITC? Calling that a “Try” is stretching it.
        • WalterBright 2y ago
          Contributing to an IRA or HSA.
          • relaxing 2y ago
            Most people do not do those things. And if they do, they’re likely not doing it with tax reasons in mind.
    • hunter2_ 2y ago
      I think "minimize taxes" is short for "minimize tax liability" and refunds due to overpayment have absolutely nothing to do with that once you've paid enough to avoid penalties and interest (which is only ~90% of your liability).
      • relaxing 2y ago
        My point is they’re not doing any sort of planning to minimize their liability. They’re not doing sound tax planning of any sort.
        • 2y ago
  • lokar 2y ago
    It’s more than tax minimization. It’s buying politicians and distorting society so they pay less.
    • gruez 2y ago
      > It’s buying politicians and distorting society so they pay less. If you had the time and resources, wouldn't you try to affect change in government? It's not fundamentally any different than showing up to your city council meeting to get housing developments approved/blocked, for instance. Moreover, most people don't think of themselves as bad people, so they probably legitimately think they're doing the Right Thing™, rather than being some sort of cartoonishly evil villain trying to ruin society by starving government of funding.
      • photonthug 2y ago
        > If you had the time and resources, wouldn't you try to affect change in government? This is going to be hard for the politically inclined to understand, but no, it's simply not the case that everyone everywhere is preoccupied with finding/creating legal ways to push their will/preferences onto other people.
        • zdragnar 2y ago
          This is going to be hard for the ideologically blind to understand, but not every rich person everywhere keeps politicians in their back pockets. Some don't even have their own PAC!
          • photonthug 2y ago
            I'm not making any comment on whether rich people are more or less likely to be politically inclined than average people, draw your own conclusions. I'm also not sure who you're suggesting is ideologically blind. All I'm saying is that given resources like a huge pile of money, many would not wish to use that money to coerce others or otherwise change their local political situation to better suit them. Instead they'd use those resources to increase their own resilience, i.e. simply choosing to leave the neighborhood or situation that was bothering them instead of trying to change it and assuming their own interests are the best and most appropriate ones for everyone. As the parent is pointing out, everyone thinks they are doing TheRightThing(tm) when they collect/use power to force their views on others. Instead you could have power/wealth and just choose to not fuck with other people. That's not being ideologically blind, it's just an ideology that says, you know what, even my strongly held opinions could be wrongheaded, and maybe I shouldn't be using my arbitrarily acquired wealth/power to steer anything besides my own life.
  • TeMPOraL 2y ago
    More then possible legal minimum for them? Approximately everyone - finding ways to minimize your taxes carries opportunity cost that may as well be bigger than the savings, though again, most people will evaluate this in terms of frustration and risk of getting it wrong. The exception are people who can outsource this to professionals - doing that is very low in terms of opportunity cost, frustration and risk, but it's an option available to the few. So perhaps that's why wealthy people seem so tax-averse - they may be as averse as everyone, but for them the aversion is much cheaper and easier to do. (This reflects a more general principle I summarize as: the only thing necessary for evil to triumph in the world is that good men are separated from it by enough layers of abstraction.)
  • littlestymaar 2y ago
    > Most people try to minimize taxes No, most people don't care about their tax the way wealthy people do. I ended up in a wealthy family through marriage and I can tell you nobody I my original social circle spent even a fraction of the effort the wealthy do when it comes to taxes.
    • zdragnar 2y ago
      That's probably because your original social circle largely already had the government minimize their taxes for them, in the form of a standard deduction that exceeds what they could hope for with an itemized deduction. In that regard, most people minimize their taxes by doing nothing. The wealthy have to put effort in to get the same effect.
      • lazyasciiart 2y ago
        Not quite - even among those people who take the standard deduction, contributing to a tax advantaged account would reduce taxes for most of them. And a significant proportion of low income people don’t even file a tax return, so by doing nothing they literally give away money. https://dailyyonder.com/low-income-families-risk-losing-thousands-of-dollars-if-they-dont-file-tax-return/2022/02/15/ https://dailyyonder.com/low-income-families-risk-losing-thou...
    • smsm42 2y ago
      Mostly because there's really no way for them to. When I was young and poor, I didn't have much way to pay less taxes (not that I paid that much - but if I wanted to pay less, I couldn't) - I just had my salary, and whatever is deducted from it was it, I had no realistic way to change it. Even such things as charity donations wouldn't change it because to get out of standard deductions etc. I'd have to donate way more than I could afford. When I got a bit more money, mortgage, stock options, investments, etc. then I started to have options - do I pay this way or that way? Do I invest in this account or that account? Does HDHP/HSA make sense for me or not? Should I sell the certain investment to harvest the tax loss or keep it? Etc. etc. then my asset structure is more varied, so are the opportunities to pay more or less tax. I imagine for really wealthy people (definitely not me, still) there are even more options how to pay less taxes, and they are doing right serious considering them (or paying people to seriously consider them) - if I ever get rich, that's what I'd do.
  • justsomehnguy 2y ago
    > Who do you know that gladly pays more than they legally have to pay? What paying more in taxes gets more done in the things paid by taxes. It's like there is a direct dependency between a money received from the taxes and the things made/built on the tax money.
    • smsm42 2y ago
      For an average person, there's not. Like, if I pay twice as much taxes as I do now, literally nothing would change in anything paid by taxes, and I have no ways to effect that change. Same if by some miracle I stopped paying all federal taxes, there's literally nothing that would change in federal government's actions or budgets.
      • paulryanrogers 2y ago
        If everyone thought this way the government would be bankrupt.
        • justahuman74 2y ago
          or $35T due. "Bankrupt" doesn't makes sense as a concept when when you can print the currency of your debt
        • smsm42 2y ago
          The government is already bankrupt and has been for years, you haven't been paying attention as it seems. It's called "deficit budget", and not only they do it every single year, they regularly raise the ceiling they set for themselves of how much debt they are willing to take. They dug a $35T hole and they keep digging, faster every year. It is extremely disingenuous to put this conundrum at my feet, as if my actions, with my puny tax which I am too lazy to even calculate how much it would be in percents, but it's sure to have quite a bunch of zeros in front, had even the tiniest influence on those decisions. It never did and never will. Maybe Buffett's decisions may, but not mine. So stop trying to shame me for things that have nothing to do with me and never could have anything to do with me.
    • 2y ago
  • barbazoo 2y ago
    At some point in my life I took a step back to look at my life and how I’m doing and how much I pay for that life. Maybe I’m just incredibly lucky. My conservative expectation is that we all have to start contributing a lot more over the next few decades if we want to maintain our standard of living, otherwise it will just gradually get worse. I hope I’m wrong.
    • treyd 2y ago
      > otherwise it will just gradually get worse. The austerity policies of the neoliberal turn has already caused standards of living among the less fortunate to drop over the last few decades already. The 2008 crisis is when it started to impact the middle class and we're still feeling the impacts 16+ years later.
      • barbazoo 2y ago
        Now factor in the effects of climate change on many communities over the next decades. Maintaining our infrastructure i.e. lifestyle is going to be much much more expensive.
        • forgetfreeman 2y ago
          Minor correction: maintaining the lifestyle of billionaire coastal developers and their clientele will be much much more expensive. The poors will continue to be encouraged to eat shit and die as per usual.
          • valval 2y ago
            Yes, typically poor people’s contribution to the economy isn’t as great individually. Groundbreaking stuff.
            • forgetfreeman 2y ago
              The cute thing there being they outnumber the big fish by something like 400,000 to 1 in the US and without them there is literally no economy and no billionaire class.
  • advael 2y ago
    I think this is an argument against how taxes are organized, at least in the US Rather than add a bunch of subsidies in the form of tax breaks, the government could just spend money on programs that accomplish the aim they want. By making this complicated system whereby subsidies are accomplished by negating taxes you would otherwise owe, this means these benefits are more likely to help people who are otherwise going to be paying more taxes, and the fact that these require legwork to opt into without being at risk of the government thinking you're defrauding them, it seems kind of inevitable that it would devolve into a subsidy mostly for wealthier people who are good at navigating the bureaucracy of it, or rather, who can pay someone in what has become a cottage industry of tax (evasion) specialists who ply the trade of doing so in service of people who can afford them Like, yeah, given that the game is set up this way, the obvious objective of it from the standpoint of any taxpayer engaging with it is to pay as little as possible. But if the aim of the tax breaks are something besides creating said incentive (and the industry around it), it seems like bad mechanism design to have it work this way in the first place
  • johnnyanmac 2y ago
    Guess it's easy to talk this way as someone who isn't that rich, but if I'm at the point where I have 8 figures accessible, or 7 figures liquid and own all the important assets (house, car, kids' college funds in 523, etc), I don't particularly care what part of my income is being taxed past that point. My goal isn't to make money for money's sake. Nor even leaving oodles of money to my kids. I'd metaphorically just spend my days strumming a guitar for the rest of my days. The economy is just a distraction from what I really care about.
    • sandspar 2y ago
      People always talk like this from the outside and yet when placed in the actual situation essentially everyone acts differently. "If I were in battle I wouldn't be scared" vs in actual battle essentially every soldier is scared. "If I were rich then I wouldn't worry about taxes" vs after becoming rich, essentially everyone worries about taxes. Is there a word for this phenomenon? What makes everyone believe they're a special case?
      • johnnyanmac 2y ago
        Yeah, probably. That's why I left a footnote. I have some "relative" taste of it in that I'm a lot better off than the past 3 generations of my family minimum. But I was still far from what I consider "wealthy" even within the tech community, let alone to the country at large. I didn't feel it fundamentally changed how I approached finances outside of being more willing to splurge on some tech (something I've always wanted to do) after I put away 20% for savings. But that's only one magnitude. Who knows, money corrupts for a reason.
      • archagon 2y ago
        What makes you believe that “after becoming rich, essentially everyone worries about taxes”?
      • shigawire 2y ago
        >"If I were rich then I wouldn't worry about taxes" vs after becoming rich, essentially everyone worries about taxes. Consider that the type of people who are more inclined to accumulate wealth are the ones faced with this choice. The people who'd rather strum guitars don't often find themselves in that position. So your observation is painfully anecdotal and not really useful.
• deleted 2y ago
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• danpad 2y ago
  I don't think it's that unfathomable when you look at how governments spend the money. E.g. a public Czech university spent 80k euros to change their logo from this: https://cdn.xsd.cz/resize/21404adf37a83977870fe87fe0eb4ea6_resize=1023,1023_.jpg https://cdn.xsd.cz/resize/21404adf37a83977870fe87fe0eb4ea6_r... to this: https://www.em.muni.cz/cache-thumbs/logo_muni_web-1580x790-2008259181.jpg https://www.em.muni.cz/cache-thumbs/logo_muni_web-1580x790-2... Why does a public university, one of the most popular in the country, need a new logo? And if it needs a new logo, why don't they assign it as a project to the students of arts/marketing faculty?
  • mturmon 2y ago
    We rest easy knowing the wealthy are using their money more wisely: https://sfstandard.com/2024/08/18/zuckerberg-sculpture-priscillachan-sf-arts/ https://sfstandard.com/2024/08/18/zuckerberg-sculpture-prisc...
    • johnnyanmac 2y ago
      I personally despise it, but at least it's a cute gesture of love (I hope...) for a billionaire living in SF. Probably one of the more human gestures from Zuck.
  • pixl97 2y ago
    I'm not sure if you've ever seen how much it costs a corporation of the same size to change logos, but you'll see similar expenses
    • PaulHoule 2y ago
      And frequently equally bad results, such as picking a logo almost exactly the same as another company in the same sector. For instance, the NBC TV network in 1975 hired consultants to make a logo almost exactly the same as Nebraska Educational Television: http://kenlevine.blogspot.com/2011/09/one-of-nbcs-great-blunders.html http://kenlevine.blogspot.com/2011/09/one-of-nbcs-great-blun... I worked as a webdev for the Cornell University Library (more than 70 web sites) at the time when Cornell changed their logo from a nice little square that looked like the J.C. Penny logo except it said "Cornell" on it and then they made everybody doing any kind of visual communication change their logo including hiring a friend of mine as a consultant for almost two years to change all the letterheads and similar things for suborganizations that didn't have graphic design talent in house. We got this thing instead https://brand.cornell.edu/logos/ https://brand.cornell.edu/logos/ which I think is OK graphically on its own but unlike the square it is demanding on the environment that it is in and might force you to change things around it to look good whereas I liked the square because you could just put the square near an edge or a corner and it always looked OK.
• throwaway22032 2y ago
  I think that categorising it as hoarding is a bit of a loaded stance. I own a home and I have assets that I use to pay my daily expenses. I am, by your definition, asset rich. I don't need to "do" anything other than maintain the investments. (I also do work, but that's besides the point). On an intellectual level I realise that if we are to have a public sector it needs to be paid for, and that I'm never going to be the arbiter of exactly how the money is spent. But at the end of the day, I sit here and think, how much do the police, military, and the other basic functions really cost, and is the right way to do that really to say - Hey, you bought something, give me 20% of that! Hey, you earned something, give me 20,40,45% of that! Hey, you sold something, give me 20,28% of that! Hey, you died? Give me some of that! etc. etc. If you minimise nothing and just do the "golden path", then you end up paying well over 50% when you stack it, and it feels more like theft than a "trade for civilization" as some like to put it, because I know that it doesn't cost that much. In my country taxation functions less like "we need this to run the Government", and more like "it's politically popular for us to redistribute". Which is logically how democracy is always going to function, but it doesn't mean that I have to agree. I prefer to pay for things that I derive benefit from and I think my family, community, country etc benefit from, I prefer not to pay for things that don't, it's honestly no different to me than say, I'll buy a TV if I want one, I won't buy a 100 inch TV because I think that's unnecessary.
  • paulryanrogers 2y ago
    When the government is us there can be disagreement about what thresholds of taxes and services are best for society. Thinking only individually misses the forest for the trees. Private industry's record is just as messy as that of government. Thankfully voting gives us a voice. Private corporations listen only to share holders. (Unless they have competitors which is increasingly rare.) Yet corporations also get to lobby with their deep pockets, and sometimes control communication mediums themselves.
    • deleted 2y ago
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  • johnnyanmac 2y ago
• rmbyrro 2y ago
  Considering how governments spend the money nowadays, especially the US and a few others on military stuff and promoting death, I think avoiding tax is a favor to society.
  • paulryanrogers 2y ago
    Only if you use the savings to change the government to be more humane.
    • rmbyrro 2y ago
      I'm not in favor of telling people what to do, in general. As long as what they're doing doesn't cause undue harm to others, it's better than what most governments do nowadays.
      • paulryanrogers 2y ago
        We have very different definitions of what is "a favor to society".
        • rmbyrro 2y ago
          Apparently. I see individual freedom as a fundamental basis of a stable society. A society that values that is a "favorable" society, in my view.
• Reebz 2y ago
  Loss aversion is a major factor in behavioural economics that explains why people act this way.
  • Beijinger 2y ago
    Seems to be an instinct. A lawyer told me, this is how you scam people. Mainly Medical Doctors. Pitch an investment to them. They don't bite. Then mention, that they will save taxes with this investment, and they will say: Where do I have to sign?
• brigadier132 2y ago
  Owning productive assets is a tortured use of the word hoarding. edit: Hoarding is buying assets that could be used productively and storing them somewhere instead of using them. People with a political axe to grind like taking words with negative connotations and applying them to things that don't make sense to manipulate you. If you think about it for more than two seconds you will understand we already have a word that describes someone with a lot of assets, "wealthy" or "rich". So hoarding as a term only makes sense when used in the context of someone stockpiling something that could be used by people in need. "Hoarding" shares in a company does not make sense for example.
  • gen220 2y ago
    I’ll bite. Of every dollar you contributed to your 401k last paycheck, how many cents of them do you think you’ll actually spend in retirement, on a risk-adjusted basis? For me, the answer is certainly not 100 and not 0, let’s say it’s 80 cents. Speaking for myself, I think that marginal 20 cents is by definition hoarding because the marginal utility of money to me at that point is negligible. Sure it could benefit my kids or get me a nicer retirement home. But there are kids that are homeless, and our public education system is crumbling. I personally would much rather those 20¢ be redistributed to people who need it. Just speaking for myself.
    • brigadier132 2y ago
      It's not about personally using the money or marginal utility. By investing the money in the stock market, you are increasing the pool of money that is going into funding businesses (directly and indirectly). Think of it this way: Angel investors and venture capitalists are directly funding the creation of new productive businesses with the expectation of a future return / reward. This future reward is only possible with secondary markets such as the public stock exchange. Additionally, employees at these companies are typically rewarded with shares to align incentives. These stock based grants motivate them to work harder and produce more and this is only possible because they can then go and sell their shares on the public market. An example of hoarding would be like someone buying a bunch of property to park their wealth with low risk but not renting out any of the homes or apartments they purchased because it's too much effort.
• throwawaymaths 2y ago
  If I were a billionaire I would avoid as much tax as possible and invest an equivalent amount in things like food banks and natural space conservation because the government is absolute shit at those things.
  • benjaminwootton 2y ago
    You can do that to a degree as charitable contributions are a tax write off.
• barbazoo 2y ago
  Greed is hard to imagine for me, I don’t know what motivates those people. It’s so strange that this behaviour seems to be worshipped by so many people. Why would we do that as a society? Do we need people that hord anything for profit, do they add value to your group?
  • Bloating 2y ago
    Is the real issue greed, or your perception of others?
  • jazzyjackson 2y ago
    Could be they don't feel especially compelled to be a member of your group/society.
• paulpauper 2y ago
  How is it puzzling to avoid taxes? This is the rational thing to in terms of maximizing one's utility.
  • paulryanrogers 2y ago
    Only if the government provides you (and society) no services.
    • infinitifall 2y ago
      Even assuming a perfectly efficient government with good intentions, you should not expect to benefit from more than a fraction of your tax money if you are above median income.
      • paulryanrogers 2y ago
        Thankfully the government doesn't only serve me, but rather all of society and its diverse fundamental needs.
• ta_1138 2y ago
  Why do you think that minimizing taxes becomes their #1 priority? What actually happens is that they tell the guy handling your finances to save them some money, and that's their problem. And given their fee structure, they'll go as far as they need to, even though the rich person in question doesn't really think about their taxes all that much. This is the real multiplicative effect of being really rich: It's not knowing that you'll never be short of money, but how many things you don't even have to think about, because they are handled in your stead. This is where I'd expect AI will change the world for consumers first: The tasks that now require either a lot of energy, or hiring an assistant or eight, becoming so cheap a good chunk of middle class will be able to afford it.
  • adastra22 2y ago
    Nah I’ve met a fair number of mega-high wealth individuals. They would go so far as to pick a materially worse deal that allowed them to pay no taxes, over a higher payout that required some taxes paid. It is nuts.
    • valval 2y ago
      It might be they’re just against taxes. How could that be a surprising thing to you? In democracies, the massive bulk of people are voting to steal the money of the rich. That’s not cool.
      • GavinMcG 2y ago
        They’re also voting for the policies that enable safe wealth accumulation and preservation, so “steal” seems like the wrong word—though there may well be some wealthy people who feel stolen from inasmuchas they’d rather live in a less secure society where they could try to be the winning warlord. Most capitalists see the value of a stable consumer class, though, backed up by a legal system and economic policy that injects money to prevent the collapse of their income-drivers.
        • waihtis 2y ago
• jalapenos 2y ago
  It puzzles you in spite of knowing that wealthy people are taxed more by default due to progressive tax rates etc?
  • zarzavat 2y ago
    Usually, wealthy people pay capital gains tax not income tax. People who pay higher rate income tax are just normal people with a larger salary. Not every country works like this however.
    • johngladtj 2y ago
      The net tax rate after subsidies is essentially zero% for the bottom 50% in income terms.
      • jalapenos 2y ago
        Basically: if you're in the middle, you're lunch.
• ipv6ipv4 2y ago
  I’d imagine that for some wealthy people it’s an unavoidable outcome of hiring wealth managers simply because they need someone to manage their wealth. The managers, in turn, have a professional obligation to minimize costs, including taxes - so they cook up these tax schemes.
• 2Gkashmiri 2y ago
  Dont know about the US but in India, you pay sales tax on EVERYTHING you buy. Doesn't matter you are rich or poor. You pay this tax. Want to buy an expensive car? Prepare to pay upwards of 100% car value in taxes. Same for cigarettes. Around 200% tax just to give 2 examples. Now, you "can" save your income tax by sleights of hand, by showing more expenses than actual or by misreporting things but still, you dont always get to pay 0 tax. That never happens.
  • addandsubtract 2y ago
    Sales tax impacts poor people more than it does rich people, though. Sure, everyone is paying it, but if all the money you make each month is spent on food and living, than ALL of that money was taxed. Whereas a rich person might only spend 10% of what they make each month, and so only 10% is taxed.
• LinuxBender 2y ago
  I don't know if this video will display for everyone as someone tagged it as private though I can see it not being logged in. I think David Mitchell has the best take on tax avoidance vs evasion. [1] [1] - https://www.youtube.com/watch?v=xc8epam4NyY https://www.youtube.com/watch?v=xc8epam4NyY [video][3 mins] David Mitchell on Tax Avoidance from The Last Leg
• bko 2y ago
  I think most extremely wealthy people have a concentrated holding in a business they created or inherited. The bill gates example where someone has 100 billion in sp500 is rare. You don't get insanely rich through diversification
• mbar84 2y ago
  For some, it's an ethical imperative. The government is at best wasteful, often what it does with resources is harmful. If you can make sure resources are kept in private hands and used for further capital accumulation then we'll all be better off.
• jldugger 2y ago
  It's literally my biggest annual expense. So if I spend any brain power to optimize expenses, this is the biggest easiest target.