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it feels like every share of income is at its lowest except for the ultra wealthy.
by scrumbledober 3mo ago
it feels like every share of income is at its lowest except for the ultra wealthy.
- jagged-chisel 3mo agoThe annoying/sad/infuriating thing is the ultra wealthy don’t have “income.” Technically, according to IRS rules, much of what they experience (housing, food, etc) should be classified as income. But their lawyers and accountants help them keep that looking quite low.
- Schiendelman 3mo agoI used to think this - but when I talked to a tax lawyer friend and we walked through the steps they take, usually they're just deferring taxation that does end up getting paid by an entity eventually.
- toomuchtodo 3mo agoIf they donate the wealth to their own foundation to continue to hold close and control, it doesn't get taxed. If they borrow against the wealth at low interest rates until they die and the basis is stepped up ("buy, borrow, die"), it doesn't get taxed. Certainly, deferment is a component, but there are obvious examples of the very wealthy operating in a manner to avoid taxes entirely when they're able to (realizing the benefit of the wealth without having to realize a taxable event). Trust stacking is a recent fad as well, although I don't have enough data to say whether it is a material concern from a tax revenue perspective. Silicon Valley Is Obsessed with 'Trust Stacking,' and the IRS Doesn't Like It - https://news.ycombinator.com/item?id=48727963 https://news.ycombinator.com/item?id=48727963 - June 2026
- Schiendelman 3mo agoThe cases you're talking about are all delaying taxation, not eliminating it. Eventually someone has to draw that wealth - the foundation has to spend for public benefit to be eligible for 501(c)3 status, for instance.
- toomuchtodo 3mo agoHow Elon Musk's secretive foundation hands out his billions - https://www.theguardian.com/technology/2019/jan/23/how-elon-musks-secretive-foundation-benefits-his-own-family https://www.theguardian.com/technology/2019/jan/23/how-elon-... - January 23rd, 2019 "Spending for the public benefit" has a lot of latitude.
- saghm 3mo agoI also don't think they addressed how borrowing against the wealth doesn't require any immediate taxes (and is often low interest, given how being a billionare means you get more favorable terms). There's nothing stopping someone in that position from just deferring taxes on the money they currently have, borrowing against it, and then investing that to turn into more money with taxes deferred even further so that they can use the proceeds to pay the previous deferred taxes and keep the difference.
- Schiendelman 3mo agoThat requires their investments to keep going up in value. That doesn't last forever, the assets that people borrow against eventually need to be sold to pay back that loan. When they sell to make payments, those are taxable events.
- jagged-chisel 3mo agoHow does it work if the loan defaults and those assets were used as collateral?
- Schiendelman 3mo agoI'm not a tax lawyer, but I think if you default on a loan, the collateral changes hands, which is a taxable event for you as if you sold the asset, at whatever value the unpaid portion of the loan was. So you pay tax.
- 3mo ago
- ck_one 3mo agoCapital gains tax is clearly lower than income tax. So why did you change your mind?
- nickff 3mo agoNot the commenter you replied to, but one thing to note is that capital gains tax (at least in the context of investments in corporate equities) is applied after corporate taxes. Profits and reinvested earnings are taxed as profits, and they're two of the key components to valuing an equity. As such, when comparing income tax and capital gains, you should add the impact of corporate taxes. Incidentally, corporate taxes are why many small business owners pay themselves wage income, rather than doing stock buybacks or dividends.
- saghm 3mo agoIf the income was earned through dividends, maybe this would be a reasonable argument. Most of the time stock just gets bought and sold by investors rather than the company itself though, so it's not clear why corporate tax would have anything to do with this. Sure, the stock price should somehow be tied to the actual value of the company, but for a while now it's been mostly indistinguishable from a Ponzi scheme other than a few companies that do sometimes decide to buy back some stock, which makes it slightly less sketchy but if the value is from the company buying it back, it's a lot closer to debt or a bond, which is not at all how anyone treats it.
- nickff 3mo agoI agree that in a bull market, many corporations are not purchased and sold at book value. That said, we are on the largest bull-run in history, so we shouldn’t treat this as the norm, and base all our long-term decisions on the current situation.
- saghm 3mo agoSo if I'm understanding correctly, your argument is that it doesn't make sense to make people who make more money pay the same rate of taxes as regular people do because we should ignore the fact that they've been doing it for longer than ever before?
- Psillisp 3mo agoWas your ‘friend’ Jeffery Epstein?
- lotsofpulp 3mo agoCapital gains not being considered earned income is simply sensible use of terminology to categorize different ways of amassing purchasing power. For example, in order to carry out the linked analysis. It has nothing to do with the IRS or taxes.
- scottyah 3mo agoIncome goes straight to a person, capital gains is a little return from other people generating income. Basically a MLM lol.
- smt88 3mo agoThis report is only about wages, so even if the ultra-wealthy reported their real sources of income, they wouldn’t shut up as “labor” the way this defines it.
- micromacrofoot 3mo agoeven with this scam the top 1% of earners still have more annual income than ~75% of the population
- smt88 3mo agoIt’s not. There are plenty of non-wealthy people who make money from things other than their labor. Small-time landlords are an example, as would be anyone who owns a small business and draws cash from profits rather than taking a salary.
- contagiousflow 3mo ago> non-wealthy > landlord If you think these two things are compatible you need to talk to more people outside of your bubble.
- opinion-is-bad 3mo ago[flagged]
- b40d-48b2-979e 3mo agobeing born into money is not a requirement to own several houses before 30. Do tell.
- scottyah 3mo agoLive in a poor place. There are plenty of cheap houses, but you do have to leave expensive areas (shocking, I know).
- bonesss 3mo agoSo “landlord” and “commercial landlord living entirely off of passive income” are worlds apart. Buying a fixer-upper outside of town with high-school and early 20s grinding, renting out 3+ rooms to cover the mortgage for painful years, working 80 hour weeks, refinancing against that first house into another under-maintained property where you live in half while upgrading the other, ending up with a rental duplex and drastically reduced living cost, is viable by 30. Maximizing youth savings, first house programs, and primary residence rules create less punitive economics. It sucks and will let one learn why landlord is a pain in the ass job, and relies on sweat equity and modest lifestyle, wanting to commit to real estate, and non-ideal properties. Trade school or skipping college for early income and low debt make the numbers crunch easier. Investing consistently into the market in your 20s probably out performs it by 65, and a young bankers lifestyle is a joy of its own, but: owning property young is achievable for electricians, security guards, and janitors.
- scottyah 3mo ago[flagged]
- deleted 3mo ago[deleted]
- contagiousflow 3mo agoSource for this statistically?
- shimman 3mo agoThere is but you have to ignore the lived reality that Americans are struggling to afford healthcare, housing, utilities, education, and food costs all while the ultra wealthy are demanding the public invests trillions into vaporware.
- gegtik 3mo agomaybe the disconnect here is the claim was about 'income' which in isolation of living conditions, perhaps continues to rise and thus by the most narrow and useless definition, the OP is incorrect
- shimman 3mo agoThings barely increasing after nearly 40+ years of being completely flat isn't the win that poster thinks it is, maybe if you're doped up on neoliberalism it sounds nice but everything else people need to survive are also increasing in costs massively.
- scottyah 3mo agohttps://equitablegrowth.org/u-s-income-data-for-2024-shows-the-top-10-percent-accrued-the-highest-share-of-income-since-2000/#:~:text=The%20bottom%2050%20percent%20of%20households%20also%20made%20gains%2C%20although,share%20in%20this%20time%20period. https://equitablegrowth.org/u-s-income-data-for-2024-shows-t... Bottom 50% is increasing income with the top 10%, it's the middle class that's declining in the last 5 years. This was a quick google search, so I'll ask you to provide a source that's contrary else your comment was purely rhetorical and made in bad faith.
- ux266478 3mo agoIt's not necessarily limited to the ultra wealthy, but outside of a few key areas (as someone mentions, those profiting off of the inflationary spike, those in the real estate market, etc) it is more or less the case, yes.
- carlosjobim 3mo agoNot at all. The real estate share of income is probably at its highest among a lot of people who belong to the non-labouring class, but are far from ultra wealthy. But it's nice to have a scapegoat, isn't it?
- idiotsecant 3mo agoIf you belong to the 'non-laboring class' you are by definition the ultra wealthy. It's wild how much people are willing to slide goalposts to make themselves feel better.
- scottyah 3mo agoIt hurts the definition of the words when you use ultra wealthy to refer to the top 50%...
- idiotsecant 3mo agoYou think 50% of people don't labor?
- scottyah 3mo agoWhile about 50% to 60% of the adult U.S. population are active W-2 wage earners at any given time, the percentage that relies on labor exclusively (meaning they have zero capital income or assets to fall back on) sits right around 40% to 50% of working households.
- triceratops 3mo ago> 40% to 50% of working households Not people then.
- scottyah 3mo agoAre you arguing that the other people in a household are laboring, or do you think they're counting pets?