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Even if you try to tax the riches, they have billions of ways to evade it. The tax laws are so complicated for a reason. Here in Australia, there were cases tha
by mrjin 2y ago
Even if you try to tax the riches, they have billions of ways to evade it. The tax laws are so complicated for a reason. Here in Australia, there were cases that some individuals that earned just about A$1M pa., and they paid ~A$980K to companies registered in Virgin Islands etc. for managing tax affairs. Such arrangement knocked down their taxable income to ~A$19K, and thus they paid probably a couple of dollars taxes if not not even a dime. Eye-opening, right? But those were not those super rich ones. You can just imagine what those super rich people can do. So the burden of the tax would be on mid-income people. I would expect the same in US.
- idle_zealot 2y agoIf there were political will to tax the rich then you'd have to, in addition to changing tax law (obviously), fund IRS investigations to ensure the taxes are actually collected. Throwing up your arms and saying "well we can't tax the rich, they're too powerful and wily, and will easily commit tax fraud to evade those taxes, and in actuality you'll bring in less money" is exactly the weak attitude that stalls efforts to fund vital services. If you think people will commit tax evasion, then put more resources into investigating tax evasion. Historically, money spent recovering taxes has yielded more than the cost of said investigations.
- CrossVR 2y ago> Throwing up your arms and saying "well we can't tax the rich, they're too powerful and wily, and will easily commit tax fraud to evade those taxes, and in actuality you'll bring in less money" is exactly the weak attitude that stalls efforts to fund vital services. It goes further than that, it is the exact argument made by wealthy people as to why we shouldn't tax them more aggressively. Parroting that argument is ludicrous unless you're considerably wealthy yourself.
- mrjin 2y agoThose loopholes were by design, complicated enough to prevent most people like us to take advantage of it but will allow those who can afford to evade lots. I'm not sure if people is just naive or playing dumb.
- bloppe 2y agoIf only there were some way to change a tax code... Alas, no country has ever figured out how to do that!
- johnnyanmac 2y agoWe have a way... oh, they have spent 20 years in gridlock arguing over political lines. And the Rich apparently won given the current proposal.
- thfuran 2y agoAnd evil if you are.
- mrjin 2y agoMy point was that Tax Laws were deliberately complicated to allow some people to evade taxes. If you put that into consideration, you will find it's a lot easier to understand the status quo. Again, what you think or what I think do not matter after all.
- johnnyanmac 2y agoIt matters completely. Congress makes and changnes tax codes, people vote in congress. People need to remember they are the ones being served and they are in control. Absolving themselves of their representative's choices is the start of the downfall of the system.
- mrjin 2y agoIt should matter, but it actually doesn't matter as much as you thought as there is a level of indirection. Just look back to the promises made before the election, how many were never fulfilled?
- hello_moto 2y agoThis is because we continuously being divided with lesser pressing issues: abortion, same-sex, universal toilet, etc. The left or right are the same side of the coins that the rich will support no matter what. They shun people like Bernie Sanders, Picketty, etc. In USA, social programs = socialists = commie. That's how bad the brainwashing is.
- deleted 2y ago[deleted]
- mrjin 2y agoThere is a level of indirection as it should. But that indirection also adds distortions.
- benterix 2y agoIt is extremely difficult because you not only need to do it on a per-country level, but globally. Otherwise you just punish foreign companies that genuinely invest in a country with stricter tax laws (and most will just choose another country, just like it's happening in Europe). And ultimately, it depends on the will of the American administration - and they can be extremely bullish about imposing their laws on smaller countries, sometimes even using their military advantage.
- ashoeafoot 2y agoThe world is degloballuzing rapidly and yiu really can not anything in a dictatorship or oligarchy. Look at those falling out of favour in Russia .
- wood_spirit 2y agos/favour/windows/g
- deleted 2y ago[deleted]
- MeteorMarc 2y agoAs long as political campaigns are funded by the rich, there will be no political will to tax the rich.
- photonthug 2y ago> fund IRS investigations to ensure the taxes are actually collected. Even people who want to tax the rich are skeptical about empowering / funding the IRS because there are many studies showing that the IRS disproportionately audits the poor. If that’s true, then why would more funding help new enforcement against the rich rather than multiplying the current problem? Generally cash/support fixes material resource issues but cannot fix policy issues
- ianburrell 2y agoIRS enforces against the poor because it is easier and they have been directed that way. It is possible to increase enforcement, direct where that enforcement goes, and change the law so that it is easier to enforce against the rich. Another would be simplify the law for to make audits for poor unnecessary and leave rich fewer places to hide. We have gotten used to Congress being dysfunctional and not passing laws that we think the current laws are some unchangeable state.
- photonthug 2y agoSounds like we agree then that it’s important to change policy first before dumping more resources on a malfunctioning org and hoping for the best. But parent mentions “funding investigations” as a cure.. my point is just that there’s no indication that this makes things better, and might actually make them worse.
- mkatx 2y agoI do agree that changing policy is a separate, yet complimentary, step. But maybe the poor are disproportionately audited because the IRS doesn't have the funding to effectively target the rich and succeed? Maybe with better funding, they could successfully extract more tax dollars from the rich, incearsing the ROI of funding the agency? I don't think further funding the agency is a completely nutty idea. Although if you truly believe the agency is broken, and that being broken isn't related to their funding, then I could understand your perspective. I lean more towards the idea that at least some, maybe even most, of the issues they have might be due to a lack of funding. That makes more sense to me than most of the criticisms I've heard of the IRS, which seem to mostly be on partisan idealism framed as otherwise.
- smallmancontrov 2y ago"You can't possibly defeat me, why do you even try?" Come on. You have fallen for cartoon-villain level smack talk. Chew it up, spit it out. We've done this before and we can do it again.
- jjtheblunt 2y agoCan that class of scams be foiled with consumption tax ?
- stvltvs 2y agoConsumption taxes are almost always regressive, hitting the poorest the hardest. Depends on how you structure them.
- jjtheblunt 2y agoGood point
- frontfor 2y agoTwo points here: 1. Gary’s arguments for taxing the rich aren’t about taxing income. It’s about taxing wealth. 2. By his argument, most of the wealth are immovable: the rich disproportionately owns actual, physical real estates, and stocks of actual companies. As these assets are based in the country, you could tax right at the source.
- tastyfreeze 2y agoSo the government takes physical assets? Didn't we fight a war over property rights? My neighbor is way wealthier than me. So its ok if I take his car. He has enough he can just buy another one.
- kiwih 2y agoPlease respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.[0] [0] https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html I think a more reasonable interpretation might be "the government knows about expensive cars (i.e. that they are registered, have numberplates etc), and so charges some annual tax on the owners of those cars."
- tastyfreeze 2y agoDescribing wealth tax reasoning with an absurd example of the same reasoning on an individual level is an attempt to get people to understand what wealth taxes are. The government that is supposed to work for you thinks you have accumulated too much stuff and is trying to make it legal to take a percentage of your physical wealth annually.
- toomuchtodo 2y agoYou only accumulated and maintain the wealth because of the government. Without the government and the economic system it cultivates, you’d never have it.
- bjourne 2y agoBut laws shouldn't be set based on how easy they are to avoid. Lots of people drive too fast all the time, yet few argue that we should do away with speed limits. Besides, there is zero empirical evidence that suggests that raising rich people's taxes is ineffective. Yes, they are good at avoiding taxes, but professional tax collectors are probably even better at enforcing taxes. It's a question of political will, or lack thereof, due to not wanting to lose your biggest donors.
- mrjin 2y agoYou don't cut your own fingers. And that pretty much the whole story.
- ItsMonkk 2y agoI understand this is a tangent but you picked a really bad example. We should be trying to remove every single speed limit that we can. If the design speed of a road does not match the speed limit of the road, people will drive the design speed, cops will learn to sit there all hours of the day waiting for people to mess up, and get ticketed. Instead of just putting up the speed limit sign, city planners should design for the road to be safe without need for the speed limits to be in place. This can mean things like reducing the width of a lane, could mean speed bumps, to purposeful non-straight sections.
- kevinventullo 2y agoThat’s a horrible idea. I very much like driving on straight wide roads without speed bumps, even if I’m going 25mph.
- ItsMonkk 2y agoIf the safe speed of the road is 25mph, and the design speed of the road is above 25mph, you will not have safety no matter what the speed limit is. Vision Zero strategies take these factors into account to ensure safety.
- 9dev 2y ago
- merek 2y agoDo you have a link? If the individual resides in Australia, how do they utilize the $980k sitting in the foreign company? The company can buy assets in AU, such as a house, and lease it to the individual, but I'm pretty sure the ATO requires they pay the company rent at market rate, which will likely be unaffordable on a reported income of 20K pa.
- mrjin 2y agoI remembered I read the article from Australian Financial Review, although I could not find the original link, got a more detailed one instead. See Page #3. https://australiainstitute.org.au/wp-content/uploads/2020/12/P411-Cost-of-managing-tax-affairs-FINAL.pdf https://australiainstitute.org.au/wp-content/uploads/2020/12...
- lotsofpulp 2y agoA land value tax would be impossible to evade. Even a business’s assets will exist somewhere on land. In the case of intellectual property, reducing copyright and agents to 10 years should solve the problem.
- jjav 2y ago> The tax laws are so complicated for a reason. And the reason is those same rich influence the laws to their benefit. It would be pretty trivial to tax the wealth if a society wanted to do so. But laws are made by lobbyists, who are paid by the rich, so what should we expect.
- Ray20 2y agoMostly it is other way around. People, who influence the laws - become reach.
- hcknwscommenter 2y agoSounds illegal.
- audiodude 2y agoI often tell my friends, we can't be wealthy, we still pay taxes.
- mrjin 2y agoLol. That's probably one of the considerations while designing the tax rules.
- staticautomatic 2y agoThis is such a "'No Way To Prevent This,' Says Only Nation Where This Regularly Happens" comment.
- WalterBright 2y ago> they have billions of ways to evade it In Washington state, they passed a capital gains tax primarilly to tax Jeff Bezos. Bezos simply left the state just before the tax took effect. So did a lot of other wealthy residents.
- ericd 2y agoAh, but proponents also want to make it difficult for you to leave with your money. Capital controls are very seductive, even though they’re very authoritarian.
- supernova87a 2y agoWhy have laws either? Honest people would have not needed them anyway, and people seeking to break the law will find ways around them.
- quantadev 2y agoThe only way to force everyone to pay is with a consumption tax. We'd tax based on consumption so those yachts, Rolexes, and home construction, etc. that the rich spend crazy amounts on gets taxed. Of course since a consumption tax hurts the poor disproportionately, the gov't would send a refund check to them, in large enough amounts to make up for it, where the poor are basically paying zero tax. It also fairly discourages illegal immigration because illegals wouldn't get that kickback check from the Gov't, since they're 'visitors' not 'citizens'.
- ericd 2y agoRevenue neutral carbon taxes with all income dividended back out per capita are really the move here. It’s also one of the few really promising ways to tackle climate change effectively.
- quantadev 2y agoSeems to me like that's a similar approach but a consumption tax is easier for everyone to understand and would be therefore more palatable to the public. Also the consumption tax would have a similar affect of taxing people proportional to the amount of damage they're doing to the environment. For example, we want a big tax on Rolexes but making a watch doesn't really do that much carbon consumption.
- dragonwriter 2y ago> Seems to me like that's a similar approach but a consumption tax is easier for everyone to understand and would be therefore more palatable to the public. There is a false assumption here, that easy to understand makes it more palatable. A flat capitation would be even easier to understand, and even less palatable, because the ease of understanding is directly connected, in its case, to the ease of opponents organizing against it. A flat consumption tax faces a similar problem, which is why the efforts to push one to replace the income and payroll taxes for decades now under the label "Fair Tax" have been unsuccessful -- easy to understand isn't a political benefit when people who understand it often don't like what they understand.
- yodelshady 2y agoAnd that's why Georgism exists! You can't offshore a plot of land. If you've really managed to generate trillions in profit without using any, including indirectly (mining, showrooms, etc), fair enough. If your economic model is quite literally rent seeking, you can fuck off and give all those proceeds to whatever government ensures that land is not overrun by whatever raiders are historically a problem in your area. If you work for a living, you should be able to spend your earnings on a fancy apartment if you wish, and if a landlord wishes to make one instead of just sitting on land, they keep the profits from that too.
- fallingfrog 2y agoThe solution to that might be to increase funding to the irs; currently the political elites are seeking to kneecap the irs so that it’s even easier for them to evade taxes.