
For the first time on record, the 400 wealthiest Americans paid a lower tax rate - denzil_correa
https://www.nytimes.com/interactive/2019/10/06/opinion/income-tax-rate-wealthy.html
======
tartoran
That is correct, the rich don't pay any taxes at all (whenever the can). The
was a recent thread on HN regarding tax audits [0]. What I got from that is
that the IRS cannot afford to audit the rich because their taxes are
complicated and they don't have enough resources to do so. They choose to
audit the poor instead because, it is simpler..

link [0]:
[https://news.ycombinator.com/item?id=21176705](https://news.ycombinator.com/item?id=21176705)

~~~
makomk
Careful. The two articles rely on vastly different cherry-picked definitions
of who counts as rich, and neither claim is even remotely true anymore if you
use the other definition. The top 1% are indeed audited at about the same rate
as the working poor, but they also pay higher taxes than everyone else. This
NYT article on the other hand picks out the top 400, who apparently pay lower
taxes but are much more aggressively audited by the IRS than less wealthy
people even with the funding cuts limiting their ability to do so. (According
to the linked letter from the IRS, they heavily audit roughly the top 20,000
most well-off Americans.)

~~~
newen
Lower tax rates, not necessarily lower taxes.

~~~
rc_kas
Lower tax rate is indeed my definition of lower taxes.

A lower tax payment is a different thing.

~~~
koheripbal
The problem is that "tax rate" is an ambiguous term because different kinds of
income at taxed at different rates.

So, for example, if someone makes most of their money on dividends, then they
pay capital gains tax, and it _appears_ like they are unfairly paying a lower
rate than everyone else. ...but that's not a fair comparison because it's a
different sort of income, with a VASTLY riskier risk profile. Taxing it at the
income rate wouldn't make sense.

In the past, in the US, capital gains wasn't taxed at all because it was
considered double taxation (since the investment was already taxed). ...and in
some other countries, there is no tax on capital gains.

I've seen people claim that country XYZ has higher tax rates than the US, but
then when you look closed, they have zero capital gains taxes.

~~~
Retric
In the end the real tax rate is simply government spending as a percentage of
GDP. Everything else is just shifting around who pays what and when not what
the average ends up as. In the US that’s 41.6 percent GDP which is in line
with Canada at 42%:
[https://en.m.wikipedia.org/wiki/Government_spending#As_a_per...](https://en.m.wikipedia.org/wiki/Government_spending#As_a_percentage_of_GDP)

PS: Either lower taxes on capital gains or allowing people to deduct losses is
reasonable in the name of risk, but we do both.

~~~
AnthonyMouse
Really what we should do with capital gains is allow people to deduct losses
_including inflation_ , so that we tax the total real value gain at the
ordinary rate, and do so when the money is actually divested rather than only
moved from one investment security to another (because one of the arguments
for lower capital gains rates is that higher rates causes money to be locked
into securities the investor wouldn't otherwise continue to hold).

Or just use a consumption tax, which is largely the same thing but a lot less
complicated.

~~~
ScottBurson
> what we should do with capital gains is allow people to deduct losses
> _including inflation_

Yes, I've come to this conclusion too. The long-standing argument that capital
gains rates should be low is about what happens, for example, if your gain on
an investment exactly matches inflation: you'd pay taxes on it, but you
haven't made any profit in real dollars. The right fix for that is not to
_divide_ your paper gain by some amount before taxing it; it's to _subtract_
the loss due to inflation. In times of low inflation, as we have now, this
won't make much difference, but if inflation picks up again at some point, it
will make quite a large difference.

Of course, such a plan raises the question of exactly what inflation estimator
one should use. I'm not enough of an expert to have a strong opinion, but the
T-bill rate [0] seems like a reasonable first cut, since it's a good estimator
for the risk-free rate of return. Paper gains from holding T-bills would thus
not be taxed at all.

Whatever the inflation estimator used, the more important (and likely more
controversial) aspect of the proposal is that gains beyond that amount be
taxed as ordinary income. The argument is one of simple fairness: once the
inflation problem is handled, how can one justify doing otherwise?

[0]
[https://www.investopedia.com/terms/t/treasurybill.asp](https://www.investopedia.com/terms/t/treasurybill.asp)
\-- Okay, I see there isn't just one rate, since the rate depends on the
maturity interval, but we can go with the highest one, which is the one for
the 52-week bill. This creates the oddity that holders of shorter-term bills
will actually get a tax credit, but it will be small; I think we can live with
this.

~~~
RhysU
Continuously compounding the prevailing t-bill rate for the holding duration
of any asset is doable but sounds like a mess.

~~~
ScottBurson
You wouldn't want to do it by hand, but it's straightforward to program.

------
refurb
What a shit article.

It's well known that despite the high marginal tax rates of the past, very few
people ever paid those. Deductions abound that have since been eliminated.

What you should really look at is _real_ effective tax rates by income
level.[1] What you'll find is that the top 1% make 19% of all income, but pay
37% of all taxes, with an average tax rate of 27%.

The bottom 50% earn 11% of all income, but only pay 3% of all taxes, for an
effective rate of 3.73%.

[1][https://taxfoundation.org/top-1-percent-tax-
rate/](https://taxfoundation.org/top-1-percent-tax-rate/)

~~~
folbec
\- They are _NOT_ speaking of the 1% (such as medical professional or high
income technical professionals)

\- They are _NOT_ speaking of the 0.1 %.

\- They are speaking of the 0.01%. One person out of 10000. Not
multimillionaires. 100 millionaires and billionaires.

There is a very good reason why the tax foundating speaks of the 1% and not of
the 0.1% or 0.01% : it is usefull to protect billionaires.

~~~
5trokerac3
1\. US population: 329,663,350

2\. 0.01% is 32,966 people, not 100

3\. There are 585 billionaires in the US [0]

4\. Billionaires make up 0.00017% of the population

[0]
[https://en.wikipedia.org/wiki/List_of_countries_by_the_numbe...](https://en.wikipedia.org/wiki/List_of_countries_by_the_number_of_billionaires)

~~~
chagen
regarding 2: I think they meant millionaires with more than $100,000,000.

~~~
5trokerac3
> 100 millionaires and billionaires.

There are over 500 billionaires. My point being that OP's point comes off as
an emotional argument as opposed to a data-based one.

Edit: I now understand the OP meant "100-millionairs". Even so, the math is
still off. As of 2015 there were ~5000 100-millionaires and billionaires in
the US[1]. That's 0.0015% of the population.

[1]
[https://www.forbes.com/sites/chloesorvino/2015/06/15/5000-u-...](https://www.forbes.com/sites/chloesorvino/2015/06/15/5000-u-s-
households-worth-more-than-100-million-report-says-2/)

~~~
microcolonel
Slow down for a second. You're misreading the language.

By "100 millionaires" he means _hundred-millionaires_ , that is, people who
have one hundred million dollars or more. By "100 millionaires and
billionaires", "hundred-millionaires as well as billionaires".

------
_edo
That has to be the worst x-axis on a graph I've seen in a long time. The grid
lines measure 0-10th, 20-30th, 40-50th, 60-70th, 80-90th, 95-99th, 99.99th,
Top 400? That's atrocious, not only is it non-linear, not only does it have a
line with regularly spaced dots giving the impression of continuity, but it
skips from percent groups to absolute numbers?

If we're talking about historical taxes why are we looking at tax rates and
not taxes paid? Taxes paid by percentage income would be a huge improvement,
and absolute taxes seems like an essential number for this conversation.

I'm stunned when I see things like this associated with major universities and
newspapers.

edit: The y-axis also goes from 10-70% instead of 0-100%. So both axes are
suspicious and the numbers being presented are known for their inaccuracy.

~~~
jm_l
I don't understand your complaint, isn't average tax rate a percentage of
income?

[https://en.m.wikipedia.org/wiki/Tax_rate](https://en.m.wikipedia.org/wiki/Tax_rate)

~~~
thisisbrians
I think OP's point is that due to the complexity of tax laws, especially for
the wealthy who have more non-wage income, the tax rate doesn't capture as
useful a picture as actual dollars of taxes paid.

------
gorpovitch
I'm tired to read articles written inside "Opinions" sections.(not that I
necessarily disagree with it, you guys are explaining how this article is
right or wrong better than me).

I would really like (not intended at HN, it's a general crisis in my life) to
read more articles about politics that are neutral and factually oriented. It
seems like 90% of the political content I read twists facts and build cheap,
cherry-picked arguments to push for their opinions without any scientifical /
logical humility (Discussing hypotheses, advancing honest counter
arguments...). I am yet to find political writers / journalists raising
questions without already knowing the answers to them. Real thinking instead
of outrage porn (as another commenter wrote ; I like that expression)

~~~
esoterica
There is no canonical neutral in politics. “Neutral” is just code for “stuff I
agree with”. You don’t really want neutral content, you just want content that
validates your existing beliefs.

The article lists a bunch of facts and numbers, why do you consider it “non-
factual”?

~~~
filoleg
They probably meant that they want factual content that either leaves out the
narrative completely or equally covers all sides of the story with equal
regard. I.e., content that focuses on facts and supplements it with narrative
when needed. As opposed to the majority of the current political content,
where the narrative takes the first and foremost place (usually very one-sided
narrative too), and then facts just act as a supplement for the narrative
(i.e, facts end up buried deep inside the article somewhere or just straight
up linked somewhere without even being directly mentioned).

~~~
fzeroracer
Where does the buck end, though? What if people demand you cover evidence of a
flat Earth whenever you talk about the planet? Or climate change denial when
talking about record-breaking heatwaves?

Avoiding politicized content is impossible because anything can be
politicized. As the above poster here put it, neutral articles effectively
means articles whose politics you agree with and/or articles that reinforce
the status quo.

Now we can argue about intellectually dishonest articles and ones that bury
the lede, but the article in the OP does back up the assertion with data.

------
gnicholas
A couple of points regarding the lower rate of taxation for capital gains:

• Capital gains are not inflation-indexed, which is one reason to have a lower
rate. Consider three individuals:

* Person A earned $100,000 working at BigCo in 2019

* Person B sold shares in 2019 that were purchased in 2017, for a (LTCG) gain of $100,000

* Person C sold shares in 2019 that were purchased in 1965, for a (LTCG) gain of $100,000

There's essentially no inflation to account for in cases A and B, since all of
the relevant transactions happened relatively recently. But what about Person
C? The real value of her investment has not increased by $100,000 — it's much
less than that because of inflation. So one argument for a lower capital gains
rate is to be fairer to people who have held investments a long time.

• Investments are more mobile than wage earners. This is just a fact about the
world: I can invest in a different country more easily than I can move to a
different country, which leads to "tax competition" for investment income
moreso than for wage income. However, this doesn't mean much in the US, where
we tax worldwide income (so it doesn't matter where you earn investment
income, for the most part).

• Capital gains is "double taxation". It is true that if you tax capital, that
is likely post-tax money. That is, it was earned at some time in the past and
tax was paid at that time.

There is a notable exception, however: basis step-up at death (inherited
assets don't trigger capital gains when passed to heirs. If the total estate
is under the current limit, I believe around $10M, then no tax would be paid
at all). There are other tax preferences like the primary residence $500k
exemption, qualified small business stock exclusion (look it up, startup
founders!) that allow people to realize lots of gains without paying any/full
tax. There are also less-sexy things like muni bonds.

~~~
0x0aff374668
"Double taxation"

For such an in depth example you really missed this.

I make $100,000 in year X. That covers two brackets, and my effective rate is,
say, 25% federal.

SO I have 75k left over.

I invest 5k.

It doubles to 10k.

I'm then taxed on the 5k I earned. Not the 5k I invested.

But do go on about double taxation.

~~~
gnicholas
> _For such an in depth example you really missed this._

Like many HNers, I'm on here in my spare time, while not running my startup or
caring for my kids. Please forgive my not including every argument and
counter-argument here.

But to reply, if you bought stock on the stock market, then yeah that is
double taxed because the corporation also pays tax on their corporate income.
We could get into that whole can of worms, but it's frankly too complex and
off-topic. The point of my post was to show some common arguments and counter-
arguments.

~~~
xyzzyz
Yes, and if you buy a can of Coke at the store with the proceeds of the sale,
you're then triple taxed when you pay sales tax, and then the business owner
is quadruple-taxed when he books some part of it as a profit, just like his
supplier is quintuple-taxed when he is paid by store owner for the Coke
supply, and so on, and so on.

Clearly, this is absurd: it is universally recognized that transactions often
create tax events. There's no "double taxation" rule that doesn't allow "the
same money" to be taxed twice, it's just we don't tax _the same transaction_
twice.

------
throwing838383
It's misleading because the rich that they're talking about already paid a
much higher rate when they originally got the money in earnings. It's just the
2nd round of taxation: the capital gains which is lower, as it should be.

And let's not forget, taxes are extremely high on everyone. The US Govt spends
38% of all US GDP, currently (recently above 40%!).
[https://tradingeconomics.com/united-states/government-
spendi...](https://tradingeconomics.com/united-states/government-spending-to-
gdp)

And that's not even including 2nd order effects. When you go to spend it, your
costs are much higher because part of what you're paying is someone else's
really high tax rates. IE: the plumber has to charge you 300$/hr instead of
just 200$/hr.

~~~
eloisant
I don't see why capital gains should be taxed lower.

Money you get from working, from your blood and your sweat should be heavily
taxed, but money you're earning just by already having money (whether it's
from your work, inherited, donated from family members) shouldn't be taxed as
well?

What's the logic here?

~~~
JeromeLon
Let's say that the 20% rate applies to income tax, corporation tax, dividend
tax and capital gain tax.

When a company allocates $100 to its employee, the employee receives $100 of
salary, pays $20 of income tax, and ends up with $80.

When a company allocates $100 to its shareholder, it's first considered as
profit, so the company pays $20 in corporation tax, the shareholder receives
$80 of dividends, pays $16 of dividend tax, and ends up with $66.

When a company has $100 profit but does not distribute any dividends, it has
to pays $20 in corporation tax, so the shareholder value increases by $80, so
if the shareholder sells the share, he receives $80 of capital gain, pays $16
of dividend tax, and ends up with $66.

So, yes, if the all the tax rates are the same, you actually end up taxing
capital more than salaried income, which would be a big incentive against
creating your own company.

~~~
aeternum
This was more true in the past.

Now, companies often put all profits into R&D avoiding both dividend tax and
corporation tax. Investors are much more willing to value companies based on
growth rather than actual dividends.

------
standardUser
A lot of convoluted discussion going on here. The simple truth is that in
America we tax income earned from having wealth at a much lower rate than
income earned from work.

And lower income earners pay a larger portion of their income to payroll taxes
than the highest income earners.

------
xeonoex
All the people I know with money that have shared their effective tax rate pay
way less than I do. Way less than this chart shows as well. I'm talking down
to the single digits for effective tax rate. I can't 100% confirm that they're
telling the truth, but I'm not sure why they would lie.

------
Synaesthesia
There’s so much that could be done if we taxed the ultra rich and huge
corporations just a little bit more, and more effectively.

~~~
ggreer
They would just renounce their US citizenship and move to a country with lower
taxes. That’s what Eduardo Saverin did.

~~~
mcv
They didn't do that in the 1950s, though.

It does address an important point, though: should you pay tax based on where
you live, or on where your income comes from? Governments invest a lot in
their country, their citizens, education, a healthy market, etc. For foreign
companies to profit from that healthy market but not pay taxes there, seems
wrong. Similarly, for people to work in a healthy labour market but not pay
taxes there seems equally wrong. These things result in a race to bottom to
attract rich people and corporations that make their money elsewhere.

Instead, I think it would be better if income and profit were taxed more based
on where it comes from, making tax havens irrelevant. But I have no idea how
practical that is.

~~~
ggreer
> They didn't do that in the 1950s, though.

In the 1950s there weren't any alternatives to the US. Europe and Asia were
rebuilding from WWII. Central and South America weren't nearly as developed as
today. Places like Singapore, Taiwan, and Korea were extremely poor. The
english language wasn't as popular internationally. Intercontinental
communication was expensive and low bandwidth. Travel was much more expensive.
These communication and travel costs made investing in foreign ventures was a
very risky endeavor. Nowadays, it costs nothing to video chat with people on
the opposite side of the planet. And foreign investments are no longer the
crapshoot that they used to be.

It's much, much easier to live and work in a foreign country today. And it's
only getting easier as technology improves.

> Governments invest a lot in their country, their citizens, education, a
> healthy market, etc.

Do they? I find that most people are successful despite governments, not
because of them. For example: One of the schools I went to as a child was
structurally condemned while I attended it. The water wasn't fluoridated, so
my parents had to pay for fluoride pills to protect my teeth. I don't feel
beholden to the government I live under anymore than I feel beholden to my
employer. My employer has taught me valuable skills, invested in equipment,
training, and pays for health care. Does that mean I should pay dividends to
them after I leave? I don't think so.

~~~
ajslater
> It's much, much easier to live and work in a foreign country today. And it's
> only getting easier as technology improves.

So let the current oligarchs exile themselves and we'll do what we can to make
sure no more Bezos are created again.

I wonder if your school situation has to do how schools are funded in the
United States in particular. It sounds like your school needs more tax money
from richer parts of the country then where you grew up.

>> Governments invest a lot in their country, their citizens, education, a
healthy market, etc. > Do they?

They absolutely do. What I've seen of other countries's welfare states is
grand.

> I find that most people are successful despite governments, not because of
> them.

Universal Healthcare. Universal shelter. Public transportation. Environmental
protection. Welfare. Universal Education. Massive wealth redistribution.
Markets. Most rich countries do these things with the government and are
better for it. Huge numbers of Americans are not successful because this
country lacks these things, and is actively prevented from having them.

~~~
ggreer
But I want more Bezos, Gates, Buffets, and Musks, not fewer.

~~~
ajslater
They personally are not great people, but the system that has enabled them to
hoard personal wealth and leave the streets full of the destitute will be
destroyed.

The most important thing, of course, is to eliminate poverty and protect the
planet. The next most important thing is destroy oligarch’s power so they
don’t continue to jeopardize the most important things. And, practically in a
scarcity economy, capture their mis allocated resources for better ends.

Wanting more wealth hoarded by the few is not a good thing to want.

------
dev_dull
> _The overall tax rate on the richest 400 households last year was only 23
> percent, meaning that their combined tax payments equaled less than one
> quarter of their total income. This overall rate was 70 percent in 1950 and
> 47 percent in 1980._

No it wasn’t. Is there even one historical example of someone paying 70% of
their income as tax in 1950? Or was that simply the maximum theoretical income
tax rate? That was just the maximum. Nobody paid that so it’s meaningless to
compare these two numbers.

This looks like another confirmation-bias article to me.

------
hogFeast
Oh boy, I can see how this ends.

The US already has a very progressive system. The aim here appears to be:
increase govt spending. Okay, the only way to do that (looking at other
countries that have high shares of govt spending to GDP) is to reduce, not
increase, the progressiveness of the tax system.

The quantum of "taxes were higher in the past" is utterly wrong. They were
marginally higher in the past but not by much (the big step change was JFK,
then Reagan, then back up through Clinton)...how does the author even think
govt gets paid for? Revenues are not swinging wildly all over the place.

If you are worried about middle-class income growth, it is worth asking how
their income growth has been so low given that a huge chunk of people pay no
tax at all and the middle-class pay substantially less than almost anywhere
else. That is the truly concerning thing about progressive tax systems, how do
you pay for stuff when most people don't pay tax? And the political response
to taxation is always: "someone else will pay for my stuff...someone else!!!".

A global minimum corporation tax rate of 25% is ludicrous. I remember talking
to a fund manager who talked regularly to Peter Oppenheimer about Apple's
offshore cash...the solution, according to the genius Peter, was just for all
the countries in the world to just make their tax systems equal to the
US...easy...and then the problem would be solved. What is extraordinary about
the charlatanism of the article is that the author actually thinks this view
is logical. Apple just believed it so they didn't have to pay tax...but this
is apparently someone's logical view...2019

Tangent: the US has gone way down the path of "economics and politics as
objective science"...this has led to a host of people battering other people
with apparently "logical" but totally impractical "solutions". Common-sense
thinking and understanding history (i.e. what people have actually done in
similar situations) is useful info that would help here.

~~~
secabeen
>The US already has a very progressive system.

How can this be the case if the taxes actually paid (which is what the chart
shows), is largely flat across income bands, between about 22 and 28%? Sure,
between 1950 and 1980, the system was progressive, but the actual percentage
paid by the wealthy has come down over the past 30 years, it's now much much
less progressive than it was 50-70 years ago.

------
gok
It's hard to figure out how they got that chart that I've now seen pasted
about a dozen times around social media. They cite an unpublished book. But it
looks comically wrong. The bottom decile's tax rate is nowhere near 25%. The
entire bottom quintile's tax rate is around 3%, and less than 2% for federal
taxes.

Perhaps the book plays some games with what constitute a "tax rate?" For
example, if you spend double your income on consumption (not uncommon for low
income people, especially those who benefit from programs like EITC and SNAP)
and then pay sales tax, you could squint really hard and say that a 10% state
sales tax is effectively a 20% income tax. But that's crazy; this number would
keep going up the more wealth transfer happens.

~~~
hn_throwaway_99
You should read the article before being so rudely dismissive (and comically
wrong). He clearly states that the graph includes total tax burden, including
payroll taxes, which is why the bottom quintile's tax rate is higher.

~~~
gok
Payroll taxes are included in the total federal tax rate of around 2%.

------
partingshots
So since this is all 100% legal, are there resources available for people like
us in the upper middle class bracket working as engineers in Silicon Valley to
take advantage of all this?

Almost half of my salary goes to taxes every paycheck. That’s almost $150,000
I literally never get to see just taken away.

~~~
IggleSniggle
You _do_ see it though. In your roads, your public libraries, educated
working-class, your parks, your clean air, your safe-to-drink milk, etc etc
etc

~~~
wffurr
You also see it in the nuclear-powered aircraft carriers that drop bombs on
civilians in other countries, the global surveillance system, military aid to
despotic regimes with no regard to human rights, the border guards that
imprison children and harass travelers.

~~~
g2ah5z
You also see it in crumbling roads, ancient subway systems, shitty public
schools, dumb regulations that make the market less competitive, "affordable"
housing initiatives that make housing less affordable, pointless subsidies for
farmers, and unsustainable pension funds.

~~~
IggleSniggle
This is true. It requires much more from the general populous than just the
cash. Few private citizen wants to invest the time to fix the allocation. It’s
a classic free rider problem.

------
mLuby
We should tax _wealth_ not income. Yes I know it's hard to calculate. Doesn't
mean we shouldn't do it.

Also financial penalties should be percentages of wealth, not fixed dollar
amounts (perhaps with a floor). E.g. fine for littering is 1% wealth.

~~~
troupe
Lets say you save $10,000 and invest it in a stock. It then goes up to
$20,000. You are happy to pay taxes on that amount even though next year it
might go back down again?

~~~
mLuby
Nobody is _happy_ to pay taxes, but yes.

    
    
        Year 1: pay taxes on $10K in savings, $100K house.
        Year 2: pay taxes on $10K in stocks, $80K house.
        Year 3: pay taxes on $20K in stocks, $120K house.
        Year 4: pay taxes on $0 in stocks, $100K house.

~~~
troupe
So year 4 your stock goes back down to $10k or even goes to $0 and you'd be
fine with having paid taxes the wealth you had even though it wasn't actually
realized as money?

~~~
mLuby
Yes. Not sure why that's a strange concept…

Taxing assets instead of income doesn't magically make investments worthless.

~~~
troupe
It doesn't make it worthless, but right now you only pay income tax on assets
with volatile valuations when you actually realize the gain because any gain
on paper may not actually be realized.

Let's say you invest $1000 in a highly risky stock. It does very well and goes
up to $10,000. You haven't sold it, but the government taxes you a wealth tax
of 20% so you pay $2,000. The next year it goes down to $1,000 again and you
sell it. In terms of actual profit/loss you haven't made or lost any money.
However, you've paid twice as much in tax as you originally invested. (Pick
any percentage you want as a wealth tax and you run into the same issue.)

~~~
mLuby
Agreed that's how taxing income currently works. But we're talking about
taxing wealth. What you're describing is this:

    
    
        Buy at 1K
        Sell at 10K
        Taxed on 10K
        Buy at 10K
        Sell at 1K
    

I understand your concern about volatile assets, but aren't all assets (even
currency and gold) risky over a long enough time period?

~~~
kbutler
The point is:

    
    
        Buy at 1K
        Hold while value goes up to 10K
        Tax on wealth at 10K
        (Next year)
        Tax on wealth at 20K
        ...
        (N years later)
        Sell at 1K
    

With a liquid asset like stocks, it is at least possible to pay the tax by
selling part of the stock, and you could get a credit in future years for
capital losses.

But what if the wealth is your elderly mother's home? Or the family farm or
small business? It's really hard to sell part of those things to pay a "wealth
tax" every year.

------
cabaalis
> The top 1 percent paid a greater share of individual income taxes (37.3
> percent) than the bottom 90 percent combined (30.5 percent). [1]

I believe the linked data is from before the tax cuts. However,
politics/social justice/etc all aside, it makes sense to me systematically
that tax cuts affect the rich more than others. Wouldn't the groups paying the
most be adjusted the most when a change occurs?

[1] [https://taxfoundation.org/summary-latest-federal-income-
tax-...](https://taxfoundation.org/summary-latest-federal-income-tax-
data-2018-update/)

------
watertom
The bogus concept of “capital gains” needs to be changed. Unless someone
invest in a pre-IPO company, or purchases stock during the IPO, capital gains
should not apply.

Buying stock on the market is not investing a company, unless the company gets
the cash it’s not a capital investment. Buying and selling stock regardless of
how long it’s held is not a capital investment. Also the selling of stock
should be subject to state sales tax.

The simple fact that your home isn’t consider a capital investment, but a boat
is a capital investment is proof that it’s just a tax dodge for the rich.

------
MarcScott
I've often wondered whether a 100% inheritance tax is the answer to all of
this.

You can privilege your children with a private education, tuition, etc. You
can't leave them any of your wealth.

If your kids are under 18 when you die, then they can receive a dividend but
at 18 that ends. Your spouse should be able to take care of themselves, and
not rely on your wealth.

No need for any other taxes whatsoever. Am I missing something?

~~~
tehsauce
That would highly discourage anyone from investing in anything that lasts
longer than themselves- probably disastrous consequences

------
frebord
See Figure 10 on this chart
[https://www.nber.org/papers/w22945.pdf](https://www.nber.org/papers/w22945.pdf)

The data in this NYT article comes from research by the same authors as the
above paper, which shows the top 1% having maximum effective tax rate over the
years of around 45%? Confusing to say the least what is the difference.

------
rolltiide
> The Confederacy’s hostility to taxes ultimately hampered its ability to
> raise money and fight the Civil War.

That's a great footnote! I had thought of this several years ago and found a
paper detailing the finances of the Confederacy, and boy were they ugly! The
Civil War could have been won without a land war at all! It would have gone
bankrupt either way. It couldn't issue debt and its farming citizens were
selling crops to the government at inflated prices, which it was hoping to use
and sell. The blockade prevented the selling, and it had limited use.

When I think about it, the union which won learned to resort to sanctions
almost exclusively.

------
ur-whale
Correction: the rich pay a lower tax _rate_ than you.

They do pay, however, vastly more than you do.

The various governments have somehow managed to brainwash the masses into
comparing rates instead of actual amount paid.

Very neat trick of you ask me.

~~~
conanbatt
Yeah this is a key issue. People often think that a Flat-tax rate is
regressive because of consumer habits, but what you care the most of all is
tax-consumption and tax-benefit, even more than nominal contributions.

A billionarie made with defense contracts and state expenditures deserves a
moral argument. But so does a lowly government employee that provides net
negative value and collects a paycheck everymonth.

------
gamerboy
Rich people avoid taxes by converting their income into capital gains, this is
often done using not talking big salaries but keeping money in the business

Secondly, rich people often create network of companies where on company is
pending to friend's company and some other friends company is lending to your
company - using this, you improve credit score of whole network and you can
lend harder public money. Then you can simply use it as leverage, this is
creating money from thin air.

------
ggreer
This article fails to account for exemptions and deductions. This post[1] by
the Tax Foundation explains it:

> However, despite these high marginal rates, the top 1 percent of taxpayers
> in the 1950s only paid about 42 percent of their income in taxes.

Today the 1% pay a little over 36% of their income to taxes.

1\. [https://taxfoundation.org/taxes-on-the-rich-1950s-not-
high/](https://taxfoundation.org/taxes-on-the-rich-1950s-not-high/)

~~~
fiter
This article is looking at even smaller/higher percentiles than the article
that you're referencing. I believe this explains the difference.

~~~
hogFeast
Yes, there is no explanation of exactly how that number (400) was chosen.

Given that the US is widely acknowledged to be one of the most progressive tax
systems in the world, the burden of proof required here is far higher than the
article attempts.

~~~
sweeneyrod
Widely known by whom? I'm not sure how that could be true even in theory;
there is no universally agreed on definition of "progressive".

~~~
hogFeast
Yes, there is. If you are suggesting that literally no-one has ever thought: I
will compare tax systems between countries...then yes...they have done that.

And yes there are lots of objective measures of progressivity:
[https://en.wikipedia.org/wiki/Progressive_tax#Measuring_prog...](https://en.wikipedia.org/wiki/Progressive_tax#Measuring_progressivity)

A good, brief, summary is -
[https://www.washingtonpost.com/news/wonk/wp/2013/04/05/ameri...](https://www.washingtonpost.com/news/wonk/wp/2013/04/05/americas-
taxes-are-the-most-progressive-in-the-world-its-government-is-among-the-
least/) \- and there is also this in the Economist which explains the issues
around spending in more detail - [https://www.economist.com/united-
states/2017/11/23/american-...](https://www.economist.com/united-
states/2017/11/23/american-taxes-are-unusually-progressive-government-
spending-is-not)

~~~
sweeneyrod
> And yes there are lots of objective measures of progressivity

Exactly. The US can certainly be considered particularly progressive on some
measures, but not all of them. For example, see the linked article.

------
chimi
The role of government is to protect its citizens and their property. By that
measure, the wealthy have a _lot_ more to lose than the poor and thus receive
a proportionately larger service from the government. They have more to lose
if the government fails.

Thus, the wealthy should pay more for that protection. In fact, most of what
the government does is protect the wealthy from the poor within its borders.

------
vfc1
Of course they do. They can afford personal accountants and other full-time
professionals that all they do fiscal optimization for them, trying to explore
every loophole in the system for their advantage.

They can open a company, declare expenses and claim a low salary, thet can put
the money offshore or on Switzerland, and all those tax-avoiding schemas that
are not doable by the common citizen.

~~~
coredog64
What exactly is it that you think putting the money in Switzerland
accomplishes? The US asserts that any income you make anywhere in the world is
subject to US income tax _. Living inside a corporation is very difficult, and
the IRS takes a pretty dim view of people who try it. But don’t take my word
for it: Ask Wesley Snipes. He spent 3 years in a federal penitentiary for
trying.

_ There’s a small deduction that’s not indexed to inflation, and you can also
deduct any local taxes you might have paid.

~~~
vfc1
All sorts of personal expenses can be deducted through a company. Travels,
restaurants and hotels, car rentals, car maintenance.

Even holidays, there is a whole business of seminars on cruises and exotic
locations, people sign the presence sheet and skip classes and declare
everything as an expense.

You can pay your Internet, phone, buy coffee machines and coffee, office items
and have all that deducted as a company expense.

All of this is pretty significant for most people and would make a huge
difference in most people budgets.

------
mirimir
For those who can't see the chart on NY Times:
[https://www.resetera.com/threads/for-the-first-time-on-
recor...](https://www.resetera.com/threads/for-the-first-time-on-record-
the-400-wealthiest-americans-paid-a-lower-total-tax-rate-than-any-other-
income-group.145467/)

------
dr_dshiv
>The overall tax rate on the richest 400 households last year was only 23
percent, meaning that their combined tax payments equaled less than one
quarter of their total income. This overall rate was 70 percent in 1950 and 47
percent in 1980.

I thought those rates referred to income made above different cut offs, not
the overall amount of money made...

~~~
saalweachter
In 1950, the top marginal tax rate was 91% on income over ~$2M in 2013
dollars.

------
BuckRogers
Earned-income (labor) shouldn't be taxed at all. It seems very unjust to tax
something that is not a profit, such as a job. We aren't taxed when we trade
two pineapples for four pears, so why is trading our time/effort for money any
different? It's a scam. Though property taxes are likely a bigger scam. With
that we're already in a post-ownership society. You never escape rent, never
own anything, which is truly unfair on most of us that have to work to survive
and our home is our only real asset. Capital gains should be carrying all of
the burden, along with other taxes.

I could be persuaded to agree to a tax system that doesn't distinguish between
any forms of income, as long as the first 50K was tax-free for everyone and
steep progressive taxation after that, whether it's earned or unearned income.
A bar set such as my 50K example to acknowledge that basic food/shelter only
requires so much if you're willing to migrate, and everyone is treated the
same- including the wealthy. They don't need more than 50K a year either,
they're human too.

No matter how it's done (I won't argue details with anyone because that's not
my point here)- the tax burden shouldn't be on the working class. It should be
on the investment class.

Ultimately we'll likely need more worldwide government to track and tax these
individuals fairly to eliminate tax scams like the Caymans. Without that I
doubt any policy matters. Step one to that is publicly funding elections so
those same people don't control our governments.

The default and only tax-avoidance policy needs to be the same one that
applies to the working class. If you don't like taxes, stop making money.

~~~
troupe
> We aren't taxed when we trade two pineapples for four pears, so why is
> trading our time/effort for money any different?

Actually you are taxed on trades.

[https://www.irs.gov/newsroom/four-things-you-should-know-
if-...](https://www.irs.gov/newsroom/four-things-you-should-know-if-you-
barter)

~~~
BuckRogers
That's a complete misrepresentation of your link and what I said. Of course
businesses are regulated differently, or they'd be getting away with murder on
bartering as yet another way to skirt taxes. I can trade you two apples for
two pears without filing a 1099B. Again, why should my labor be treated any
differently? The business I work for should potentially pay taxes on my
employment, but employees should not. And to clarify because apparently I have
to- I'm acting as my own person, not on behalf of a business.

------
iamgopal
Their money working for them. I think this is as it should be. But, all kind
of inheritance should be banned, or to be created at heavy tax. That way, a
rich self made person got to have and spend his money any way he wants, and at
the same time, undeserved millionaire and billionaire get taxed.

~~~
dexterdog
So you want it to just be illegal for any person to gift money to another
person?

~~~
kaibee
I think there is a reasonably balance to be found somewhere between not being
able to give your friend 5$ and being able to make everyone even tangentially
related to you into billionaires that do nothing but collect and spend the
interest on their wealth.

~~~
dexterdog
Bezos is with about $110B. He is "tangentially related" to far more than 110
people. There is a solid track record of inheritors of massive wealth pissing
it all away in a generation or two so you don't have to worry too much about
it.

~~~
kaibee
> There is a solid track record of inheritors of massive wealth pissing it all
> away in a generation or two so you don't have to worry too much about it.

I don't think wasting billions of dollars is any better.

~~~
dexterdog
Where is it wasted? It gets invested or spent.

~~~
kaibee
> pissing it all away

~~~
dexterdog
AKA spending it

------
Excel_Wizard
This article doesn't do a good job of explaining the income breakdown of the
top 400 households. I imagine it is nearly 100% long term capital gains and
dividends. That doesn't explain the change in the chart that occurred in 2018
though.

------
choeger
Are these the top in income or wealth? Because afaik most taxes are on income.
If you accumulate a lot of wealth and do not proportionally generate income
from it (think of private real estate), your tax rate should drop by that
measure, right?

------
sharadov
I pay 35% of my net income in taxes, so that the rich don't have to!

~~~
jumbopapa
Tax rate is figured off of gross. You could easily inflate your tax burden by
taking it as a percentage of net income.

~~~
sharadov
I meant "gross" , thanks for correcting me.

------
microcolonel
> _Since then, taxes that hit the wealthiest the hardest — like the estate tax
> and corporate tax — have plummeted._

The corporate tax hits _everyone_ , and it hasn't "plummeted", it was reduced
all at once in one year, to a still extremely high level (from my Canadian
perspective).

They go to all this effort to make a case that the _effective_ rates paid by
people with _extremely high incomes_ are often slightly lower than those paid
by people with still-very-high incomes... then they blame _the marginal rate_!

This article is a mess, the juxtaposition of excellent, valid observations,
and contradictory filler is astonishing.

------
throwawaysea
No, they don't The rich pay disproportionately more taxes. See
[https://taxfoundation.org/summary-latest-federal-income-
tax-...](https://taxfoundation.org/summary-latest-federal-income-tax-
data-2018-update/)

> In 2016, the top 1 percent of taxpayers accounted for more income taxes paid
> than the bottom 90 percent combined. The top 1 percent of taxpayers paid
> roughly $538 billion, or 37.3 percent of all income taxes, while the bottom
> 90 percent paid about $440 billion, or 30.5 percent of all income taxes.

------
reaperducer
_For the first time on record, the 400 wealthiest Americans paid a lower tax
rate_

So all those political ads are now finally true. I guess that's something.

------
wdn
If you looking at tax rate. Of course, high earner AKA "the rich" pay lower.
If you look at the dollars, then the rich pay bulk of the tax.

------
throwaway13337
The argument for corporate income tax is misplaced. Many socialist countries
have a low (or no) corporate income tax and that's goods.

A country shouldn't tax the things it would like to encourage. In this case,
that companies re-invest and not pull the funds out to pay investors.

Capital gains tax should probably be mentioned. Why is it a much lower rate
than income tax? Why not talk about that?

Strange also that the article doesn't really target one specific part of the
tax code - they don't mention any loopholes at all. If they'd like to see a
change, name exploits.

The article is outrage porn - not trying to inform, or make a specific change.
It's simply trying to get clicks and shares.

It's really a shame to see the new york times go this route.

~~~
chriogenix
basically this.

in these mostly socialist countries, the top income bracket starts much much
lower than in the US. these countries tax the middle class and consumption
with VAT ranging from 15-21% on consumption. in spain the top bracket starts
around 60,000 euros a year and its 45% not including local tax.

these policies and similar ones in other countries in effect keep the rich
rich and make it much, much harder for the poor/middle class to move up.

~~~
dep_b
Yup, moved back to one of those countries from a 20%-ish country and since I'm
still not rich enough to have tons of deductions I'm really getting squeezed
out of about half what I earn.

------
calvinbhai
Number of Americans moving from middle class -> rich and poor -> middle class,
is also proportional with reduction in taxes isn't it?

------
juskrey
They also take all the entrepreneurial risks.

------
leghifla
Even if the rich were paying more taxes, that does not automatically mean that
they are bearing the tax burden, because of "tax incidence" [0]. A rich person
has usually much more bargaining power and can more easily shift the burden to
someone else.

[0]:
[https://en.wikipedia.org/wiki/Tax_incidence](https://en.wikipedia.org/wiki/Tax_incidence)

------
arcboii92
Sheesh, imagine being the sucker who was 401st wealthiest and paying tax like
the rest of us schmucks.

------
Pywarrior
Do they mean a lower tax rate or total dollars? I'd like to talk about total
dollars not percentages, percentages are misleading. If someone is paying 1
million in taxes and you pay 10 thousand, they pay more than you, regardless
of conversion to percentages of taxable income.

------
uptown
dang: Dupe checker miss this one?
[https://news.ycombinator.com/item?id=21176586](https://news.ycombinator.com/item?id=21176586)

------
rayiner
> The overall tax rate on the richest 400 households last year was only 23
> percent, meaning that their combined tax payments equaled less than one
> quarter of their total income.

The total income of the top 400 is just 1.3% of total income, so the tax rate
on these people is largely irrelevant. The top 1%, who make 20% of all income,
do indeed pay higher tax rates than everyone else. Any smaller grouping
(billionaires, people making $10 million a year) comprise too small a fraction
of the tax base for it to matter. Hell, you could tax the wealth of the top
400 at 100% and it would just pay for a single year of Medicare for All.

Articles like this are political cover for the upper middle class, to shield
the fact that the real reason we don’t have European-style social services is
that the American middle class pays vastly lower taxes. American corporate
taxes and top bracket income taxes are in line with that of countries like
Canada, Germany, etc. [https://taxfoundation.org/sources-of-government-
revenue-oecd...](https://taxfoundation.org/sources-of-government-revenue-
oecd-2018/) Until the Trump tax cuts, the actual effective corporate tax rate
was higher than those countries. For example, New Zealand’s been a media
darling recently on the left. But it’s got a 33% top income tax bracket, a
lower corporate tax rate than California even after the Trump tax cuts, and
_no_ capital gains taxes. What it does have is a significant GST and a top
income tax bracket that kicks in at $70,000.

The article paints this narrative about what’s happened since the 70% top tax
brackets of the 1940s. That narrative is incorrect, because it ignores that
the tax base was narrower. (Many things like corporate expense accounts were
not taxed.) In fact the top effective bracket has been remarkably stable at
around 40%.

It is also misleading by omission. It dismisses, without any citation, the
notion that tax reform has had any effect on economic growth. In fact, the
whole developed world has broadened the tax base while cutting rates,
especially for businesses. While it’s hard to establish causation, Europe in
the 1970s and 1980s, before Reaganism, Thatcherism, and Merkelism, was a lot
less economically competitive than it is today. Canada did the same exact
thing, under both liberal and conservative administrations. (Trudeau, another
media darling, presides over a country with a 33% top income tax bracket and a
16.5% capital gains tax rate).

There is a proven model for how to get the kind of society the New York Times
evidently wants. Look to Europe. Deregulate, cut corporate taxes, and make the
middle class pay for its own benefits through high sales and social insurance
taxes.

------
Trias11
Why is this a surprise and/or news worthy?

People with more resources can hire more professional tax advisers and
structure their businesses and returns in more optimal ways than people with
less resources.

------
aey
Why can’t we have a flat income tax and a ubi?

------
kryogen1c
Conversations about this topic are so tiring. There's not just one question
you can discuss; anything you can think to ask begets a massive pantheon of
questions that require an agreement on moral axioms to even start talking
about - and then the fun part begins.

How much taxes should people pay? If rich people pay should pay more, does
that mean more dollars or more %? If they should, can we make them? If we can,
will that incentivize them to leave? if they leave, is that a net benefit
globally even if it hurts america? is globalization a positive thing,
economically? if it is, is there a concurrent reduction in cultural diversity?
if there is, is that bad?

do we even need _any_ taxes besides sales tax? how should taxes even be
accomplished? queue discussion about big/small government, libertarians vs
dems vs reps.

im not even trying. thousands of questions about any small subset of this
topic. its almost not even worth talking about in anything less than a
doctoral defense, if thats even a big enough stage.

------
jl2718
[https://medium.com/@johnlakness/why-the-ultra-wealthy-
love-s...](https://medium.com/@johnlakness/why-the-ultra-wealthy-love-
socialism-6c63b3ba3bee)

(spoiler: growth tax)

------
imightberich
I'm rich[1]. I keep my 1040 numbers in a spreadsheet. Here's some overall
numbers for tax years 1997 - 2018:

\- Wages $4M (Min $38K, Max $375K, Mean $179K) (Excludes FICA and 401(k)
contributions.)

\- Total income $4.3M (Min $39K, Max $377K, Mean $195K)

\- AGI $4.3M (Min $38K, Max $377K, Mean $194K)

\- Taxable income $3.4M (Min $26K, Max $325K, Mean $156K)

\- Tax $742K (Min $3.8K, Max $81K, Mean $34K)

\- Overall effective tax rate (tax/AGI) is 17.4% (Min 5.5%, Max 23%)

Marginal tax bracket has been as low as 15% and as high as 33%. Some specific
years:

\- In my lowest income year, I had total income of $39K (AGI $38K) and paid
$3.8K in taxes (10%).

\- In my highest income year, I had total income of $378K (AGI $377K) and paid
$81K in taxes (21.6%)

\- In my highest tax year, I had total income of $341K (AGI $341K) and paid
$76K in taxes (22.3%).

\- One year I had total income of $151K (AGI $146K) and paid $14K in taxes
(10%).

\- Another year I had total income of $127K (AGI $117K) and paid $6.4K in
taxes (5.5%).

Married filing jointly for all years. Spouse has had no income since 2000. Two
kids since 2003. Since 2004 I've lived in a state which currently has a flat
income tax of 5.5%. With SALT, mortgage interest, and charitable
contributions, I've itemized every year. Last year it barely made sense to
itemize, and this year I'll probably be right on the itemize line again.

Including SALT, I estimate my total effective tax rate at around 30% most
years. I'd have to do some math to figure out how much sales and other non-
SALT taxes are as a percentage of income.

I'm a tech worker with a CS degree. I've been lucky with my career. One
startup I joined circa 2000 made it to an IPO and was acquired by an F100.
Another startup I joined was acquired by a public company which itself was
acquired by an F100. Salary a few years into my career has been in the $125K -
$200K range and bolstered by ISOs, ESPP, and RSUs.

We're fortunate we can accord to put our kids through college. I expect to
spend about $150-$200K total for both in a state school.

Tangent:

I would pay more in taxes for a stronger social safety net. Retirement is more
than a decade off, but I'm counting on Social Security for 25-50% of our
retirement income, and Medicare for health insurance. We'll do fine in
retirement, but in retrospect, I wish I had been saving even more each year.
Having SS tax uncapped (no wage base) in return for higher payout is a
tradeoff I'd make. I don't see any reason to tie SS to wages and not total
income (include capital gains and dividends).

In general, I think there's too much reliance on the stock market for
retirement. The mishmash of retirement plans we have in the U.S. is crazy. The
401(k) only came about due to some Kodak executives lobbying for a special
exemption in the tax code. The deduction limits are arbitrary (why does a
401(k) allow almost 4x the deduction of an IRA). Expecting your average person
to save for their own retirement is a lot to ask. My parents certainly never
figured it out (both still working in their 70s). "How to save for retirement"
wasn't a course I had in school. Even if (say) you're diligent enough to set
aside 25% of your income each year into a target retirement fund and retire at
65, how well you do in retirement is still up to the whims of the stock market
and how smartly you invested. Because most people don't have significant
earnings till later in their careers, compounding isn't as valuable
individually as it is collectively. And yet, corporations and governments
haven't been reliable guarantors of retirement pensions. I don't really have
an answer.

[1] According to [https://www.nytimes.com/interactive/2019/08/12/upshot/are-
yo...](https://www.nytimes.com/interactive/2019/08/12/upshot/are-you-rich-
where-does-your-net-worth-rank-wealth.html) if I set the threshold to top 10%.

------
patientplatypus
Can the IRS be sued for violating equal protection under the law? They have
admitted that they don't have the budget to go after high net worth
individuals who can pay tax attorneys to hide their income in tax loopholes,
so isn't that a tacit admittance that the rich can cheat on their taxes with
impunity? If that's the case then not all citizens are held equally
accountable to the same laws.

That would seem to be a violation of the fourteenth amendment
([https://en.wikipedia.org/wiki/Equal_Protection_Clause](https://en.wikipedia.org/wiki/Equal_Protection_Clause))
_The clause, which took effect in 1868, provides "nor shall any State [...]
deny to any person within its jurisdiction the equal protection of the laws"._

~~~
ur-whale
No problem, the cost of defending the suit plus the cost of potentially more
audit means it will just cost more to run the IRS the subsequent year.

If only they could be bankrupted, now we'd be talking. Except they can't
cause, like the rest of the government, they get to suck on the teat of
infinite yield: people's taxes.

------
hatchingalpha
[https://hatchingalpha.com/how-to-prepare-for-
the-2020-recess...](https://hatchingalpha.com/how-to-prepare-for-
the-2020-recession/)

------
patientplatypus
That's OK, guillotines are cheap.

~~~
dang
We've banned this account for repeatedly posting unsubstantive
comments/flamebait to HN and ignoring our requests to stop.

If you don't want to be banned, you're welcome to email hn@ycombinator.com and
give us reason to believe that you'll follow the rules in the future.

------
someguydave
why is this on hacker news?

------
eloff
Wow, that chart shows tax rates on the wealthy dropping from 70% to 23% in the
last 70 years. Now probably 70% was too socialist and may not fly in a
globalised world where is a lot easier to move to a lower tax country or state
(I'd move if I had to pay that.) But this seems ridiculously tilted to the
other extreme now.

Edit: I don't understand the objections to my comment. If you have a problem
with the data behind that chart, that's not my problem.

If you object to the usage of the word socialist - that's a common usage,
don't be so pedantic.

~~~
adnzzzzZ
There were a lot more exemptions, deductions and credits back then so the
effective tax rate was not even close to 70% and was not much higher than it
is today. Not sure why this article didn't mention this at all but I can
guess, coming from the New York Times and all.

~~~
xenocyon
Of course it's true that the effective rate was less than 70% (that was the
top _marginal_ rate, just like 37% is the top marginal rate today); however I
am curious to hear about the exemptions etc for rich people - my understanding
is that these have gotten larger and more complex over time so it's surprising
to me to hear that there were more loopholes in the 50s than today. Is there a
source for this?

~~~
coredog64
One used to be able to deduct any interest, not just mortgage interest. There
was a sweetheart deal for oil production, to the point that 50s Hollywood
actors would form corporations that mixed film production with oil business.
Capital gains were quasi indexed to inflation in that your first 50% wasn’t
subject to gains taxes.

The whole point of the changes in 86 (aka Reagan tax cuts) was to remove all
those deductions/loopholes/shelters in return for a lower nameplate rate. The
goal was to clear out bullshit stuff people were doing for tax reasons and
replace it with useful economic activity.

------
dannyw
It is absolutely intolerable that the US tax system is now flat and even
slightly regressive.

~~~
zip1234
It's not--the article is missing important aspects of tax such as
deductions/exemptions and other forms of tax paid.

~~~
frenchyatwork
At some point, with the right deductions & exceptions, a tax that looks
progressive on paper becomes flat/regressive in practice.

~~~
zip1234
In general, I think a more complicated tax system favors those who can afford
more accountants and lawyers.

------
zerr
Another way to look at it, e.g. for income tax - if we take the same % (e.g.
30%) and think in terms of absolute numbers - for poor it is anyway a small
amount, but for the rich the abs number might be so big that it becomes
uncomfortable to just give such lump sum to government, especially if you
don't like how gov spends it - so the incentives are much higher to
optimize/avoid your taxes.

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zarro
I think this “vilify the rich minority” mentality that’s so popular these days
is destructive in the fact that the people that popularize this, see it as a
path of least resistance to getting subsidized at the expense of the rich,
instead of working toward improving themselves and the value of the
products/services they provide so that they may, in return, purchase valuable
services for themselves.

In the end when this sort of mentality is allowed to win out, what it leads to
is the dissolution of those valuable services these “rich” people provide
which made them their wealth in the first place. It’s unfortunate that only
AFTER their dissolution, the original proponents of this mentality are the
ones that suffer and realize their short sightedness.

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munificent
_> see it as a path of least resistance to getting subsidized at the expense
of the rich._

If making the tax code more progressive is equivalent to "subsidizing the poor
at the expense of the rich", does that mean you're saying the current
regressive tax laws subsidize the rich at the expense of the poor?

If so, flipping that sounds entirely reasonable to me.

~~~
zarro
Taxes that aren't flat and equal for everyone are discriminatory.

