7 ms·

IDK what Bezos made as "income" last year but paper gains in asset values are not "income" for tax purposes, though some people might look at the increase in hi

IDK what Bezos made as "income" last year but paper gains in asset values are not "income" for tax purposes, though some people might look at the increase in his wealth and call that money he "made" that year. But we don't have a wealth tax on a federal level at least.

9dev 6mo ago
> some people might look at the increase in his wealth and call that money he "made" that year What in gods name would you call that otherwise? > But we don't have a wealth tax on a federal level at least And that somehow justifies rich people paying less taxes, because they navigate the system better than regular people?
- phyzix5761 6mo ago
  He pays income tax just like everyone else. But the majority of his money is in investments, which many Americans already do as well with 401k and personal brokerage accounts. The people who can't afford to invest like that already pay close to 0% income tax as 40%-60% of households, historically, have paid 0% income tax in the US.
  - 9dev 6mo ago
    They still pay payroll taxes, among others, which disproportionately affect poor people.
    - giantg2 6mo ago
      Payroll taxes were capped because the related benefits were capped. We could uncap either or both ends of that. Although removing the cap should have been unnecessary if the government acted responsibly, and the removal of the cap would not force them to act responsibly in the future.
    - phyzix5761 6mo ago
      I 100% agree. Roosevelt implemented that in 1935 and it was meant as a safety net for social security. Economists estimate that by 2035 social security, as its currently structured, will no longer be able to fund the aging population. Instead, a better alternative is to invest that same amount into an ETF that tracks the S&P 500 and after a 40 year working career the individual would have almost $5 million assuming a median wage and current employer matching on payroll tax. This would give them a yearly $200k payout which grows at 6% per year if they follow the 4% rule on withdrawals, lasting them indefinitely and leaving something behind for their children when they pass away. In contrast, social security right now, on average, pays $26k per year. This would also generate federal taxes through transactions of the companies composing the S&P 500 which would give the government an additional tax revenue source.
      - smallmancontrov 6mo ago
        The trouble with "investments did better" is that they did so in considerable part due to 40 years of trickle down economics that swung the pendulum away from labor and towards capital. The pendulum is slowing, so that trick is extremely unlikely to work twice. If that's not concrete enough for you, we can talk about what it would take to swing the pendulum as far in the next 40 as we did in the last 40 and this thought experiment will make it obvious that this approach makes the social security trust fund look like an exercise in sustainability.
  - kube-system 6mo ago
    > He pays income tax just like everyone else. He only paid income taxes on $80k while at Amazon. The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax and taxed at no higher than 20% Billionaires literally have their own set of tax brackets in this country: https://www.irs.gov/taxtopics/tc409 https://www.irs.gov/taxtopics/tc409
    - twoodfin 6mo ago
      The wealthy in NYC pay the top Federal 23.8% LTCG rate, + the top New York State income tax rate (10.9%) + the NYC income tax rate (3.876%) on their long-term capital gains.
      - kube-system 6mo ago
        Not if their second home in NYC is not their primary residence .... and like bezos, has a primary residence in a state where that isn't the case
    - anamax 6mo ago
      > The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax Not even close. As your link shows, "the wealthy" pay taxes on long-term capital gains. The lowest rate (for "the wealthy") is 15% but they can owe 20% or even 28% in certain circumstances.
      - kube-system 6mo ago
        I didn't say they didn't pay taxes. I said the money was exempt from the income tax, which it is. Capital gains are not taxed as income, it is taxed as a capital gain, which has significantly lower rates than income tax.
        rootusrootus 6mo ago
        Even though it would hurt me, I feel like eliminating the distinction between capital gains, income, and payroll taxes would be a fairer solution.
- SoftTalker 6mo ago
  Let's say you own your home and it increased in value last year. Do you feel like you "made" any money from that? Unless you sold it, probably not.
  - wat10000 6mo ago
    Only because I live it in and can't easily sell it to raise cash. Let's say you own some stock and it increased in value last year. Do you feel like you "made" any money from that? I did and it did and I do.
    - SoftTalker 6mo ago
      Stock is easier to sell, yes, but it's still just a gain on paper until you actually sell it. Otherwise, those gains could be lost next year. Or tomorrow.
      - 9dev 6mo ago
        Now this is just disingenuous. As if the net worth of Jeff Bezos and the rest of the Epstein class was somehow threatened by market fluctuations or some high-risk investments. As long as the economy continues to grow, these people will thrive. All while avoiding to pay their share for society.
        SoftTalker 6mo ago
        I have no doubt his investments are well-diversified. He's not an idiot. My point was simply that income and wealth are two different things, at least for tax purposes.
        wat10000 6mo ago
        This is well known. The question is whether they should be. It's not some immutable law of nature, it's a deliberate policy choice to tax returns on capital differently from returns on labor.
tastyface 6mo ago
Oh, then Bezos must be living a humble, middle-class life with very limited liquidation of his assets. Surely, he’s not using loans, write-offs, and legal tricks to fund a Great Gatsby lifestyle while pretending to have no actual income? Right?
- WarmWash 6mo ago
  Your headline-expert confusion on how it works isn't the flex you think it is.
  - tastyface 6mo ago
    Thanks for the completely content-free comment! You're a credit to the community.
xenihn 6mo ago
My networth increased by $600k in the past year, but my actual income after taxes was a quarter of that. I haven't sold and collected gains, but it still feels like I "made" that much money in that span of time, especially since most of the appreciation came from RSUs. I'm just choosing to not convert it to cash.
- SoftTalker 6mo ago
  So, you didn't pay taxes on the $600k increase? Do you think it would have been more "fair" if you had to?

9dev 6mo ago

> some people might look at the increase in his wealth and call that money he "made" that year What in gods name would you call that otherwise? > But we don't have a wealth tax on a federal level at least And that somehow justifies rich people paying less taxes, because they navigate the system better than regular people?

phyzix5761 6mo ago
He pays income tax just like everyone else. But the majority of his money is in investments, which many Americans already do as well with 401k and personal brokerage accounts. The people who can't afford to invest like that already pay close to 0% income tax as 40%-60% of households, historically, have paid 0% income tax in the US.
- 9dev 6mo ago
  They still pay payroll taxes, among others, which disproportionately affect poor people.
  - giantg2 6mo ago
    Payroll taxes were capped because the related benefits were capped. We could uncap either or both ends of that. Although removing the cap should have been unnecessary if the government acted responsibly, and the removal of the cap would not force them to act responsibly in the future.
  - phyzix5761 6mo ago
    I 100% agree. Roosevelt implemented that in 1935 and it was meant as a safety net for social security. Economists estimate that by 2035 social security, as its currently structured, will no longer be able to fund the aging population. Instead, a better alternative is to invest that same amount into an ETF that tracks the S&P 500 and after a 40 year working career the individual would have almost $5 million assuming a median wage and current employer matching on payroll tax. This would give them a yearly $200k payout which grows at 6% per year if they follow the 4% rule on withdrawals, lasting them indefinitely and leaving something behind for their children when they pass away. In contrast, social security right now, on average, pays $26k per year. This would also generate federal taxes through transactions of the companies composing the S&P 500 which would give the government an additional tax revenue source.
    - smallmancontrov 6mo ago
      The trouble with "investments did better" is that they did so in considerable part due to 40 years of trickle down economics that swung the pendulum away from labor and towards capital. The pendulum is slowing, so that trick is extremely unlikely to work twice. If that's not concrete enough for you, we can talk about what it would take to swing the pendulum as far in the next 40 as we did in the last 40 and this thought experiment will make it obvious that this approach makes the social security trust fund look like an exercise in sustainability.
- kube-system 6mo ago
  > He pays income tax just like everyone else. He only paid income taxes on $80k while at Amazon. The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax and taxed at no higher than 20% Billionaires literally have their own set of tax brackets in this country: https://www.irs.gov/taxtopics/tc409 https://www.irs.gov/taxtopics/tc409
  - twoodfin 6mo ago
    The wealthy in NYC pay the top Federal 23.8% LTCG rate, + the top New York State income tax rate (10.9%) + the NYC income tax rate (3.876%) on their long-term capital gains.
    - kube-system 6mo ago
      Not if their second home in NYC is not their primary residence .... and like bezos, has a primary residence in a state where that isn't the case
  - anamax 6mo ago
    > The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax Not even close. As your link shows, "the wealthy" pay taxes on long-term capital gains. The lowest rate (for "the wealthy") is 15% but they can owe 20% or even 28% in certain circumstances.
    - kube-system 6mo ago
      I didn't say they didn't pay taxes. I said the money was exempt from the income tax, which it is. Capital gains are not taxed as income, it is taxed as a capital gain, which has significantly lower rates than income tax.
      - rootusrootus 6mo ago
        Even though it would hurt me, I feel like eliminating the distinction between capital gains, income, and payroll taxes would be a fairer solution.
SoftTalker 6mo ago
Let's say you own your home and it increased in value last year. Do you feel like you "made" any money from that? Unless you sold it, probably not.
- wat10000 6mo ago
  Only because I live it in and can't easily sell it to raise cash. Let's say you own some stock and it increased in value last year. Do you feel like you "made" any money from that? I did and it did and I do.
  - SoftTalker 6mo ago
    Stock is easier to sell, yes, but it's still just a gain on paper until you actually sell it. Otherwise, those gains could be lost next year. Or tomorrow.
    - 9dev 6mo ago
      Now this is just disingenuous. As if the net worth of Jeff Bezos and the rest of the Epstein class was somehow threatened by market fluctuations or some high-risk investments. As long as the economy continues to grow, these people will thrive. All while avoiding to pay their share for society.
      - SoftTalker 6mo ago
        I have no doubt his investments are well-diversified. He's not an idiot. My point was simply that income and wealth are two different things, at least for tax purposes.
        wat10000 6mo ago
        This is well known. The question is whether they should be. It's not some immutable law of nature, it's a deliberate policy choice to tax returns on capital differently from returns on labor.

tastyface 6mo ago

Oh, then Bezos must be living a humble, middle-class life with very limited liquidation of his assets. Surely, he’s not using loans, write-offs, and legal tricks to fund a Great Gatsby lifestyle while pretending to have no actual income? Right?

WarmWash 6mo ago
Your headline-expert confusion on how it works isn't the flex you think it is.
- tastyface 6mo ago
  Thanks for the completely content-free comment! You're a credit to the community.

xenihn 6mo ago

My networth increased by $600k in the past year, but my actual income after taxes was a quarter of that. I haven't sold and collected gains, but it still feels like I "made" that much money in that span of time, especially since most of the appreciation came from RSUs. I'm just choosing to not convert it to cash.

SoftTalker 6mo ago
So, you didn't pay taxes on the $600k increase? Do you think it would have been more "fair" if you had to?