
Some Rich Americans Are Getting Stimulus ‘Checks’ Averaging $1.7M - mnm1
https://www.forbes.com/sites/shaharziv/2020/04/14/why-are-rich-americans-getting-17-million-stimulus-checks/#1025269e665b
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lend000
If I am understanding this correctly, there is no money flowing to rich
Americans, but they will have additional opportunities to deduct losses on
their 2020 taxes (basically paying less in taxes after a major stock market
rout) that would normally need to be spread over future tax returns
indefinitely.

However, this will only occur if they took losses, so it is really a discount
of ~35% on negative income. This would also apply to someone who is not rich,
i.e. a software dev sole proprietor who cashed out big losses in March in the
stock market and then applied those losses against their normal income to end
up reporting 64k in income instead of 100k (normally 36k in losses would have
to be stretched over 12 years of tax returns).

I understand this doesn't fit the narrative, but please comment if it is
incorrect instead of downvoting.

~~~
president
Something really needs to be done about downvote brigading on HN. At least
people should be required to provide a reason for the downvote.

~~~
jimbob45
I've wondered if a five-a-day downvote limit would benefit HN.

~~~
dsfyu404ed
Or just make it cost karma. Anyone that down-votes too much would wind up at
the threshold for down-voting and be rate limited by their ability to make up-
voted comments. It would also render ineffective the strategy of having a
bunch of accounts with enough karma to downvote and using those accounts all
at once to make comments you don't like dead (the presence of corporate or
state controlled accounts employing this strategy has been suggested multiple
times).

~~~
AnimalMuppet
The way to game that is to just upvote random comments that you don't care
about in stories that you don't care about, just to have made enough upvotes
to enable you to downvote again.

~~~
dsfyu404ed
I meant have comments that get upvoted, not upvote other comments.

~~~
AnimalMuppet
Oh. That's harder, but not much. You just need two accounts. Make some
innocuous comments on account 1, upvote them with account 2. Now you can
downvote from account 1.

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threatofrain
This article is a summary of the original:

[https://www.washingtonpost.com/business/2020/04/14/coronavir...](https://www.washingtonpost.com/business/2020/04/14/coronavirus-
law-congress-tax-change/)

~~~
brenden2
[https://archive.is/cucsR](https://archive.is/cucsR)

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mywittyname
>because of additional language that applies the policy retroactively “so
losses in 2018 and 2019 can be ‘carried back’ against the past five years.”

Damn, must be nice.

~~~
andrei_says_
Surely this is what I’m paying taxes for.

Could go to healthcare for all, fixing my roads and access to education,
creating a strong resilient nation for all of us.

But this is so much better.

~~~
cultus
This is what an oligarchy looks like.

~~~
andrei_says_
Wouldn’t it be nice to have “oligarch-democrat” as explicitly stated as
“social-democrat”?

Everywhere a candidate’s name is printed.

~~~
trhway
>Wouldn’t it be nice to have “oligarch-democrat”

it is already called "Republican".

~~~
cultus
It's also called "Democrat." There is no non-plutocratic alternative in the
US.

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refurb
_It found that, “82 percent of the benefits of the policy go to about 43,000
taxpayers who earn more than $1 million annually.”_

Why is that surprising? The people that pay the most tax have the most benefit
from a tax break.

It's no different than saying a family making $30,000 per year don't benefit
from tax breaks, but leaving out the fact they don't pay any tax anyways.

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anm89
Edit for definitional clarity: My use of the term socialism here is exactly
equivalent here to the term "systems that enable wealth redistribution through
legislation" no more, no less. Im not commenting on anything like the
ownership of the means of production in society or anything like that.

It seems like the whole world is chomping at the bit to enact more socialism
but do you think it's homeless people and cashiers that are defining the rules
of the system and legislation? Of course not, it's lawyers and politicians. So
are you really naive enough to believe that they write perfectly fair
legislation that doesn't favor their interests at all?

Friedrich Hayek nailed this on the head almost 100 years ago. The problem with
socialism isn't that its not an admirable goal, it's that even if you want it,
by nature you aren't going to get the version of it that you wanted, you are
going to get the version of it the a bunch of politically connected insiders
design and while they may not be totally self serving, they are usually going
to figure out how to be on the winning end of the game.

Crass said it well: "But no one ever changed the church by pulling down a
steeple

And you'll never change the system by bombing number ten

Systems just aren't made of bricks they're mostly made of people"

The systems you get are the ones the people who design them make. Thinking
otherwise is foolish. The people who should be the most scared of
redistribution systems like this are the ones who want to look out for the
interests of the little guys.

~~~
KarlKemp
You’re intentionally mislabeling “not using a crisis to hand out billions in
tax breaks to rich people” as “socialism” to extend people’s historic aversion
to socialism to this situation.

Do that often enough and you’ll find people quite willing to give this
“socialism” thing a chance.

~~~
anm89
I'm certainly not advocating tax breaks for anyone here. In fact I'm
advocating getting rid of the framework that is used to implement those tax
breaks.

You're reading into my words to say things that simply aren't there.

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darawk
This is a pretty reasonable thing to suspend at a time when landlords are
essentially forgiving huge amounts of rent. It's super reasonable that they be
able to deduct those losses on their taxes in an unlimited fashion.

~~~
frenchman99
Only if they don't request to be paid back later for said rent. Otherwise,
that's just giving rich people free money.

~~~
wmf
People who can't pay rent now are unlikely to be able to ever pay it back
later. It's probably better for everyone to just write it off.

~~~
cultus
That would probably be better, but isn't happening. I think these landlords
should have planned ahead and had six months of emergency funds saved up, just
like McDonald's employees are supposed to.

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rgc1106
Unfortunately, this isn't even slightly surprising. Tax breaks is essentially
the de facto way the country rewards the rich as it's not 'giving handouts'
(but it is).

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xenospn
I'm assuming that's by design.

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fortran77
Landlords who took big losses from tenants who didn't or couldn't pay their
rent and suffered a loss will be able to deduct more of their loss from their
personal income tax.

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verbify
The reason why you get better yields from being a landlord or investing in
shares than from keeping it in the bank is because you also accept risk. These
people accepted the risk, and their reward during normal times is a better
yield. By bailing them out (and specifically only the ones who also get income
tax)

~~~
smcl
It seems they also got a reward during the tough times

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briandear
It’s one thing to make a profit or a loss, it’s another thing when a
government forces you to take a loss to subsidize someone else. If there was a
risk that you’d be forced by the government to take huge losses then that risk
should be priced into the rent — which means future rents will have to be much
higher to accommodate the increased risk. Imagine if a grocery store were
required to give free food to everyone at the command of the government. Who
covers that expense? The shopkeeper? Any shops that managed to survive would
have to jack up future prices to recover their loss. The risk of the
government taking away your inventory and giving it away uncompensated is
unprecedented. You can’t evict and you can’t collect rent because of a
government decree — that’s effectively a seizure of property which is illegal
without due process. Even eminent domain requires fair compensation to the
property owner. If you accept this as acceptable, then what’s to stop the
government from taking all of your income and giving it away? Why is your
income supposed to be safe from seizure but someone else’s isn’t?

~~~
fortran77
> which means future rents will have to be much higher to accommodate the
> increased risk

Right! And that, too, is illegal under rent control in many places (NY and
California).

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cryptica
As soon as I heard that the Fed was going to do a cash injection. I knew that
covid-19 was just a pretext. See
[https://news.ycombinator.com/item?id=22560017](https://news.ycombinator.com/item?id=22560017)

And now we're seeing article after article just proving me right.

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golergka
They are not getting anything from the US government – they pay less taxes.
This article tries to make a case a if it was the same thing. It is not.

~~~
NotSammyHagar
If anyone pays a million less in taxes then someone gave them a million
dollars back. so yes, you are giving them something. One can argue in some
irrational way that taxes are theft so you never 'give' someone something if
you reduce their taxes. At the end of that game, you have more money than you
had before, gift or other political arguments aside.

Someone who was going to pay a million in taxes and now has 1 mil less is not
going to put their money into the economy the same what that 1000 people with
moderate income, like say restaurant workers getting $1,700 would. Those
people poorer will spend all that money. I'm fortunate to be a well
compensated software engineer, and I pay a huge amount of taxes. I'm not out
there begging for more money (via tax reductions) and then claiming it was
already my money, not a gift. That's a dishonest argument.

~~~
WalterBright
> is not going to put their money into the economy the same what that 1000
> people with moderate income, like say restaurant workers getting $1,700
> would. Those people poorer will spend all that money.

Wealthier people spend or invest all of their money. Only drug dealers hoard
cash, and that's only because they have difficulty laundering it.

~~~
noahtallen
It doesn’t seem hard to argue that purchasing stocks or expensive real estate
is not as beneficial for the economy as thousands of people spending the same
amount in their local economies.

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WalterBright
> It doesn’t seem hard to argue

I agree, but it doesn't make any sense. Investing is literally putting money
to work. Storing it in a mattress is not putting it to work.

For example, what happens to the money when people buy real estate? The seller
of that real estate gets the money. They don't hoard it, they also
spend/invest it.

What happens to the money you put in your bank account? The bank loans it out
to people who spend/invest it. (Banks don't make money hoarding cash, they
make money loaning it out.)

Think about it another way. Wealthy people in general are not stupid with
money, if they were they wouldn't be wealthy very long. They put it to work.
That means spending it or investing it to people who spend it.

~~~
bawana
Unfortunately, when wealthy people get money they do not spend it on goods and
services that employ people and drive the economY. Rather, the invest it in
the financial vehicle with the highest ROI. Giving money to the rich does not
trickle down to people. It goes into a holding pattern of financial
engineering. That maybe why there has not been any inflation with all the
quantitative easing that has been going on these past 2 decades. Instead of
having more money chasing the same amount of goods and services (which would
happen if all that QE hit the real economy) there is more money chasing more
financial products. That is why the value of financial products(stocks,etc)
has been skyrocketing for a decade.

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aianus
> Giving money to the rich does not trickle down to people.

All of my well-paying tech jobs have been funded by VC money from rich people
and/or IPO money from rich people. Same goes (indirectly and partially) for
all the people who have been selling me goods and services over those same
years.

~~~
einpoklum
Yeah, paying a few programmers high salaries doesn't quite count as trickling
down. Let's say it's extremely-limited trickle down.

> Same goes ... for all the people who have been selling me goods and services
> over those same years.

No, it doesn't. Unless you only buy services from VC-financed startups?

~~~
aianus
> No, it doesn't. Unless you only buy services from VC-financed startups?

I buy things using my salary which trickled down from the VCs and
shareholders.

