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interesting to reconcile this with calls to tax the rich. maybe we should be rewarding such effort after all? think about the tens of thousands of jobs created

interesting to reconcile this with calls to tax the rich. maybe we should be rewarding such effort after all? think about the tens of thousands of jobs created from people working at Google who'd make L3 or less at Google working twice as much...

dkdbejwi383 2y ago
I'm not sure I follow what you're saying. People who work at Google should pay more/less tax? Or that people who start companies should get more tax breaks (or pay more?) I'm European so I don't really click with the obsession some places have with avoiding tax, so you may have to explain it like I'm 5 :-)
- thrw42A8N 2y ago
  Lol, Europe is the home and crown palace of tax evasion, look to the Netherlands, Ireland, Switzerland, Liechtenstein, Andorra, Gibraltar, Isle of Man, Jersey...
  - dkdbejwi383 2y ago
    In Europe most average people are happy to pay tax, despite there being a number of tax havens as you point out. I'd say most people have a low opinion of them. Versus the USA particularly, where it seems many people dislike paying tax.
    - thrw42A8N 2y ago
      I have no idea what you're talking about. I don't know a single person happy with the tax rate or the general performance/effectiveness of government spending. Practically every single restaurant, bar or other kinds of brick-and-mortar shops is evading VAT and income tax, it's so normal that when I was buying winter tires this morning, they straight up asked me whether I need a receipt or want to skip the VAT over phone. Every single aspiring entrepreneur I talk to asks me how to incorporate in one of the tax havens and otherwise lessen the tax and bureaucratic load. My city is full of immigrants from western EU countries who wanted to pay less tax.
      - disgruntledphd2 2y ago
        You're not in Western Europe, which is where more people tend to be happier to pay tax (particularly the Northwest/Protestant areas), because they believe they'll get the benefit from paying the taxes. OTOH, look at places like Italy where there's more evasion, because people don't feel that they get anything back.
        thrw42A8N 2y ago
        Even when I visit the west and tell people I pay 10% income tax with healthcare and social insurance included, they immediately ask me how hard is it to move. Especially funny with Germans who still believe they are richer than the eastern part of Europe, but a SWE working for the same US company from here makes 10-20% more due to lower tax. The faces they make when they finish the mental calculations are incredible.
        disgruntledphd2 2y ago
        Yeah, that's fair. I can totally see why people without family commitments et al would move. I'm not massively happy about the amount of tax I pay, but I do like living in a relatively prosperous society without too much suffering, so it's fine I suppose.
        thrw42A8N 2y ago
        The thing is, I don't see a relatively prosperous society without too much suffering when I am visiting the west or north of Europe... At least not more than the east, and definitely not enough to justify the tax hike. Generally, the east of EU is much safer and while it's poorer and that is its own kind of suffering, there's nothing like the bombings, muggings, general dirtiness everywhere, etc. I feel perfectly safe any time during day and night in Warsaw, Poznan, Prague, Brno, Bratislava, Ljubljana... Definitely not in Paris, Berlin, Brussels and so on.
- pfannkuchen 2y ago
  I think a big part of the difference in tax acceptance between the USA and Europe might be that European populations per country tend to be a lot more homogenous. In the USA I think you get a lot of resentment over people paying for populations who they don’t feel they themselves are part of. Whereas in Europe it’s more plausibly a “there but for the grace of god go I” situation, where the person using some form of government assistance may plausibly be your second cousin. Of course no one talks about this directly because it’s wrong think. I suspect this is also why a lot more right wing people are anti tax and left wing people are tax accepting. On the left you have less of the in group out group sentiment, for whatever reason.
qzw 2y ago
Speaking as a small business owner/entrepreneur myself, there are lots of tax deductions available to people like me that aren’t to some collecting a salary. And that’s without doing any of the borderline or outright illegal stuff that I see many other business owners do, such as taking fancy vacations, leasing luxury cars, or buying real estate for personal use but writing them off as business expenses. The IRS basically now lacks the resources to go after most such cases, and even if they’re caught, the penalty often just amounts to paying back the avoided taxes. There’s really very little incentive to play by the rules. I’ve had CPAs tell me outright that I’m leaving money on the table by not using some of these so-called tax minimization strategies. Anyway, it’s all kind of beside the point because “tax the rich” as policy covers so much ground that it’s impossible to discuss the pros and cons without specifying what specific proposal we’re talking about. My point is simply that business ownership and entrepreneurial activity are already quite well incentivized/rewarded by the current tax code.
- hartator 2y ago
  What are these miraculous tax deductions you are talking about? Writing personal expenses as business expenses is tax fraud, not tax optimization. CPA suggesting this should be fired.
  - hash872 2y ago
    1. The Trump era automatic 20% deduction for LLC or corporate income. Totally unjustifiable, it's 20% off your revenue for everyone with a company for no public policy reason that I know of 2. You can mostly avoid paying into SS/Medicare by taking the large majority of your compensation via distributions, not salaried income Just off the top of my head
    - hartator 2y ago
      You mean QBI? To apply, it needs to be matched with W-2 wages so you won't escape SS/Medicare, and it's not against revenue but profit.
Eridrus 2y ago
There is already a very big tax break for entrepreneurs: QSBS. You have to stick it out for 5 years (the rollover provisions are not well aligned with SAFEs), but all your capital gains are tax free up to $10m. Reforming the rollover provisions or making it not a hard cut off would certainly be helpful though.
sharemywin 2y ago
we go into debt 2T every year without the extra money I would argue a lot of the nice to haves get cut from people's budgets. where do you think Netflix and google ads fit in Maslow's hierarchy of needs? Also, big tech had a huge amount of jobs cuts recently.

dkdbejwi383 2y ago

I'm not sure I follow what you're saying. People who work at Google should pay more/less tax? Or that people who start companies should get more tax breaks (or pay more?) I'm European so I don't really click with the obsession some places have with avoiding tax, so you may have to explain it like I'm 5 :-)

thrw42A8N 2y ago
Lol, Europe is the home and crown palace of tax evasion, look to the Netherlands, Ireland, Switzerland, Liechtenstein, Andorra, Gibraltar, Isle of Man, Jersey...
- dkdbejwi383 2y ago
  In Europe most average people are happy to pay tax, despite there being a number of tax havens as you point out. I'd say most people have a low opinion of them. Versus the USA particularly, where it seems many people dislike paying tax.
  - thrw42A8N 2y ago
    I have no idea what you're talking about. I don't know a single person happy with the tax rate or the general performance/effectiveness of government spending. Practically every single restaurant, bar or other kinds of brick-and-mortar shops is evading VAT and income tax, it's so normal that when I was buying winter tires this morning, they straight up asked me whether I need a receipt or want to skip the VAT over phone. Every single aspiring entrepreneur I talk to asks me how to incorporate in one of the tax havens and otherwise lessen the tax and bureaucratic load. My city is full of immigrants from western EU countries who wanted to pay less tax.
    - disgruntledphd2 2y ago
      You're not in Western Europe, which is where more people tend to be happier to pay tax (particularly the Northwest/Protestant areas), because they believe they'll get the benefit from paying the taxes. OTOH, look at places like Italy where there's more evasion, because people don't feel that they get anything back.
      - thrw42A8N 2y ago
        Even when I visit the west and tell people I pay 10% income tax with healthcare and social insurance included, they immediately ask me how hard is it to move. Especially funny with Germans who still believe they are richer than the eastern part of Europe, but a SWE working for the same US company from here makes 10-20% more due to lower tax. The faces they make when they finish the mental calculations are incredible.
        disgruntledphd2 2y ago
        Yeah, that's fair. I can totally see why people without family commitments et al would move. I'm not massively happy about the amount of tax I pay, but I do like living in a relatively prosperous society without too much suffering, so it's fine I suppose.
        thrw42A8N 2y ago
        The thing is, I don't see a relatively prosperous society without too much suffering when I am visiting the west or north of Europe... At least not more than the east, and definitely not enough to justify the tax hike. Generally, the east of EU is much safer and while it's poorer and that is its own kind of suffering, there's nothing like the bombings, muggings, general dirtiness everywhere, etc. I feel perfectly safe any time during day and night in Warsaw, Poznan, Prague, Brno, Bratislava, Ljubljana... Definitely not in Paris, Berlin, Brussels and so on.
pfannkuchen 2y ago
I think a big part of the difference in tax acceptance between the USA and Europe might be that European populations per country tend to be a lot more homogenous. In the USA I think you get a lot of resentment over people paying for populations who they don’t feel they themselves are part of. Whereas in Europe it’s more plausibly a “there but for the grace of god go I” situation, where the person using some form of government assistance may plausibly be your second cousin. Of course no one talks about this directly because it’s wrong think. I suspect this is also why a lot more right wing people are anti tax and left wing people are tax accepting. On the left you have less of the in group out group sentiment, for whatever reason.

qzw 2y ago

Speaking as a small business owner/entrepreneur myself, there are lots of tax deductions available to people like me that aren’t to some collecting a salary. And that’s without doing any of the borderline or outright illegal stuff that I see many other business owners do, such as taking fancy vacations, leasing luxury cars, or buying real estate for personal use but writing them off as business expenses. The IRS basically now lacks the resources to go after most such cases, and even if they’re caught, the penalty often just amounts to paying back the avoided taxes. There’s really very little incentive to play by the rules. I’ve had CPAs tell me outright that I’m leaving money on the table by not using some of these so-called tax minimization strategies. Anyway, it’s all kind of beside the point because “tax the rich” as policy covers so much ground that it’s impossible to discuss the pros and cons without specifying what specific proposal we’re talking about. My point is simply that business ownership and entrepreneurial activity are already quite well incentivized/rewarded by the current tax code.

hartator 2y ago
What are these miraculous tax deductions you are talking about? Writing personal expenses as business expenses is tax fraud, not tax optimization. CPA suggesting this should be fired.
- hash872 2y ago
  1. The Trump era automatic 20% deduction for LLC or corporate income. Totally unjustifiable, it's 20% off your revenue for everyone with a company for no public policy reason that I know of 2. You can mostly avoid paying into SS/Medicare by taking the large majority of your compensation via distributions, not salaried income Just off the top of my head
  - hartator 2y ago
    You mean QBI? To apply, it needs to be matched with W-2 wages so you won't escape SS/Medicare, and it's not against revenue but profit.

Eridrus 2y ago

There is already a very big tax break for entrepreneurs: QSBS. You have to stick it out for 5 years (the rollover provisions are not well aligned with SAFEs), but all your capital gains are tax free up to $10m. Reforming the rollover provisions or making it not a hard cut off would certainly be helpful though.

sharemywin 2y ago

we go into debt 2T every year without the extra money I would argue a lot of the nice to haves get cut from people's budgets. where do you think Netflix and google ads fit in Maslow's hierarchy of needs? Also, big tech had a huge amount of jobs cuts recently.