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Man its really annoying to see people constantly make up this whole "rich people dont pay taxes" nonsense.. If you review their actual tax records you'll see Elon paid about 1/3 of his income as taxes and Bezos about 1/4, which is actually quite high. But yea lets just make shit up instead and manipulate the numbers to show some "true" tax rate that is really just some fantasy as close to 0 as we can distort, cant just make up fake numbers and think its useful to addressing any problems that might exist.
@freemo but the issue isn't the taxes paid vs the reported income. The issue is that the reported income is so much less then the wealth growth.
Yes Bezos paid about 1/4 of his reported income in taxes, which I guess would be his "actual tax records", but his reported (taxable) income is only about 4% of what he actually made.
That is the issue at hand. That these mechanisms are in place that allow for the taxable income tobe a small fraction of their actual income.
@ejg Can you be more specific. What source of income does he have that is 25x greater than the one he reported and doesnt show as income?
@freemo @ejg I agree with what @freemo points out. People get outraged about how rich somebody is. And that is true. Except huge part of that wealth is only on paper in the fluctuating value of financial (and other assets). But nobody pays taxes over their net worth increases, we pay taxes from realised income.
Anyhow, these concepts have issues. For instance where I live, it can happen that you own say 50 shares of a startup (let it be 50%) which is worth 1000 bucks starting capital, then the next day investor comes along, buys another half for 1Mio bucks and the third day you have the tax office on your neck to pay taxes from a wealth increase (income) of 999k bucks, while all along your cash position did not change at all.
What I am trying to point out is this: Whenever people complain about rich people not paying tax on their wealth increases, the real question to them should be:
1. So how exactly will you legislate it so as not to harm everybody along the way?
2. And suppose if we all pay taxes even over wealth increases which are only on paper (because the stock you own or control went up due to market fluctuations, or geopolitics), what will we do when next year a person's net worth actually decreases? Will the tax office reimburse us, or what?
These are just headlines to cause outrage, nothing else. What actually helps is to tighten up the laws about income taxation and also classification what constitutes income and what does not. If e.g., Bezos has a salary of 1000 bucks and that's all he lives off, he shall pay taxes as a 1k income guy. But if he besides that lives in a house owned by Amazon Inc, drives a car owned by Amazon Inc. and flies Amazon-owned aircraft in his private capacity, then those effects should be counted as his income too. There are countries where this is sorted (at least on smaller scale) better.
@FailForward @freemo I think this is better explanation of the issue at hand and what I'm trying to express. And some of the articles on the subject do try to go into this, just in a very click-baity way.
I'm also using net worth/wealth growth/income too interchangeably. Perhaps it should be looked at more like:
- Who/what owns any given asset.
- Who benefits from that asset
- How is that asset taxed
- Who/What pays that tax
The very mentality that asset ownership need be taxed is diseasterous to say the least. It relies on the zero sum fallacy of economics for one.
@freemo @FailForward I pay property taxes on my house and car. It's a PITA, but far from "disastrous". I suppose if I had the legal resources, I could create an off shore shell company, and transfer ownership of my house/car to them. Then I wouldn't have to pay those taxes.
I would disagree.. I think the fact that you can never truly "own" your home, that even if you buy it you have to pay for it perpetually is very much disastrous.
A person should have the right to work hard, buy themselves a home, and then be free of that financial obligation, thats the point.
Taxing on assets, like a home, is just a way of saying you can never truly own anything, a government ill forever tax your assets and eventually should you ever fall on hard times financially loose everything you own and get nothing for it as it will all go to just cover the taxes you were unable to pay (and should have never hard to).
Yes taxing ownership of property is particularly heinous IMO.
@freemo @FailForward
Maybe is is heinous that I pay taxes on my house and car, but comparing my assets to Bezos is like companion an apple to an apple orchard.
IMO is is particularly heinous that one person can sit on $190B
https://www.forbes.com/profile/jeff-bezos/?list=billionaires&sh=3a7ab77f1b23
and collectively, 2,755 people can sit on $13T,
https://www.forbes.com/billionaires/
while others go without homes, food, or healthcare.
All the while, they will use whatever legal loophole they can to avoid paying the same types of taxes that others a subject to.
Sit on? That money isnt sitting in a big vault of gold he goes swimming in every day like duck tales.
He literally has that money in businesses employing countless people and **creating** new wealth both for him and the country.
Again money isnt a zero sum game, him having more doesnt mean you have less, in fact, it means you have more as he is ultimately using it to generate ew wealth.
The wealth he is creating is for all americans, some just less directly than others. If overnight you took everything he owned and destroyed it (not took it from him, but destroyed the thing he created) a lot of people will be out of work and starving, little old ladies wiith reiterment funds will go bankrupt, a lot of people would be effected.
@freemo @FailForward Taxing assets isn't destroying them. (I know it's not the point you are making)
Employing people doesn't necessarily generate wealth for them. The $15/hr they get lets them rent an apartment, own a car and pay for food.
That little old lady needs a better financial advisor, and to not put her entire retirement in one company.
Amazon being gone would allow others to grow to fill the void left behind, generating wealth for them.
> Employing people doesn't necessarily generate wealth for them. The $15/hr they get lets them rent an apartment, own a car and pay for food.
Actually it does, relatively speaking. If those people had no work at all they would be generating negative wealth (destroying wealth). So while keeping them emloyed may generate very little wealth individually, perhaps even 0, it is still significantly more than if they had no job or income.
> That little old lady needs a better financial advisor, and to not put her entire retirement in one company.
Never claimed she had all her money in one company. Even if her portfolio is 1% amazon overall when you consider that money across **all** little old ladies with retirement funds its a huge amount. Also, presumably if the whole fallacy of "someone having a lot of money is bad" were true we would be talking about far more than amazon and bezos.
> Amazon being gone would allow others to grow to fill the void left behind, generating wealth for them.
Certainly true, and then you have brand new multi-billion dollar companies so it solved nothing. But more importantly this statement misses the point.. the point is simple, he isnt just generating wealth for him and his select cohort of friends.. he is generating wealth that old ladies, and minimum wage workers share in as well.
It's fair to say that we have very different definitions of wealth.
> whole fallacy of "someone having a lot of money is bad"
Here is a Forbes breakdown of average/median Net Worth of Americans
https://www.forbes.com/advisor/investing/average-net-worth/
I think it's fair to say anyone on that list would consider $190M "a lot of money"
1000 x $190M should be considered something other then "a lot of money"
Should that be considered "bad"?
With 34M people living below the poverty line (2019) maybe there should be some negative ethical implications for people who accumulate that kind of net worth.
https://www.statista.com/statistics/233138/number-of-people-living-below-the-poverty-in-the-us/
It simply doesnt work that way.. the amount of money they have did not cause people to live below the poverty line. In fact quite the opposite, them having earned as much as they have is a symptom of the fact that there are far fewer people below the poverty line than would have been there if they never earned that money.
If a multibillionair had stopped at a few million when he had himself and all he could want sorted out and just retired rather than going on to be a multibillionair, there would be more poverty, not less.
Not sure how many times I need to repeat this but economics is **not** a zero sum game. No matter how much money one person earns that does not mean that it was at the expense of others, in fact, most of the time it is to the benefit of others.
We cant have different definitions of wealth, the term is very well defined for us already. Perhaps you are using an incorrect definition of wealth you coined yourself, I dont know, but I am just using the established definition.
For starters, net worth is not wealth, though they have a relationship.. someone with 100$ in 1910 doesnt have the same wealth as 100$ in 2020, nor does a person with 100$ in NYC in worth have the same wealth as 100$ of someone in alabama. So lets be clear about that since you seem uncertain about how we are using our terms...
Second yes, some people on that list have a lot of money, some have something far greater than a lot of money... so? No matter how much money some people might have doesnt turn into a bad thing, again, how much they have, even when its a lot, doesnt imply you have less as a consequence of it. There is no "problem" there to solve just because someone has a lot of something.
Sure we can!
https://www.merriam-webster.com/dictionary/wealth
I pick option 1.
You seem to be closer to option 3(a).
With my definition someone with a net worth of $14,000 doesn't have wealth. (They don't have an abundance of valuable possessions/resources)
With you definition, the value of their shirt, count's toward there *wealth*
Maybe 3(a) is more appropriate with in the context of economics, and 1 is more appropriate in the context of social justice.
1 and 3a are just linguistically relevant, not technically so.. a sentence using definition 1:
"While looking at the man's collection of rare antique paintings it is clear the man has wealth" (a fancy way of saying your rich, as in wealthy).
The 3a definition is closer to the technical one, usage: "The man was clearly poor owning only the shirt off his back and his collection of copper ingots the wealth of which might only ironically sustain him for a month"
The definition of wealth you are using is a non-technical one, and clearly not helpful since we are well within the weeds now. The only real technical definition for wealth is closer to 3A, namely the value of everything a person owns
The real question is if you understand and are using the correct technically definition. In other words, do you understand the earlier point that stating a money value or net worth is not an accurate way to express wealth, walth is more abstract than that. Your ideas and time, particularly when famous for example has a wealth since people will pay you to talk to you
@freemo @FailForward Perhaps I was being a bit too spiteful with "sit on".
He is creating wealth for him and a select few people in the county.
At a macro level, money isn't a zero sum game. For a large portion of people in the US, including his employees, it **is**.
They will never own the types of assets that appreciate in value, and will not be able to obtain financial wealth or benefit from the wealth he is *creating*.