How the Wealthiest Avoid Income Tax

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Smoove_B
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How the Wealthiest Avoid Income Tax

Post by Smoove_B »

New article from ProPublica making the rounds this morning, filled with interesting factoids:
The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.

It’s a completely different picture for middle-class Americans, for example, wage earners in their early 40s who have amassed a typical amount of wealth for people their age. From 2014 to 2018, such households saw their net worth expand by about $65,000 after taxes on average, mostly due to the rise in value of their homes. But because the vast bulk of their earnings were salaries, their tax bills were almost as much, nearly $62,000, over that five-year period.

No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich. According to Forbes, his riches rose $24.3 billion between 2014 and 2018. Over those years, the data shows, Buffett reported paying $23.7 million in taxes.

That works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.
But how?
So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it.

For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and thus, income tax.

The tax math provides a clear incentive for this. If you own a company and take a huge salary, you’ll pay 37% in income tax on the bulk of it. Sell stock and you’ll pay 20% in capital gains tax — and lose some control over your company. But take out a loan, and these days you’ll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn’t consider them income. Banks typically require collateral, but the wealthy have plenty of that.

Overall it's a fascinating article. Also, enraging and depressing.
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Re: How the Wealthiest Avoid Income Tax

Post by Zarathud »

The tax preference for capital gains is a huge inequity that perpetuates itself. There is an incentive to grow capital at the expense of wages — to the owner and the worker.

But you can’t pay off a loan without realizing income — by selling an asset or getting compensation. So the claim there is wholesale tax evasion using loans is exaggerated.
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Re: How the Wealthiest Avoid Income Tax

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From the article:
In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of “other expenses.”
Can someone who knows better than me explain what type of "interest expenses on debts" can help offset income? I have a car loan that has an interest expense but I can't write that off. The closest thing I have to that is my home mortgage, which I thought was the only loan interest one could write off but apparently, that's not true?
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Re: How the Wealthiest Avoid Income Tax

Post by stimpy »

When I started my business, I interviewed multiple accountants.
Some were so sleazy they left a slime trail on the way out.
Some were so conservative that I felt like yelling "NERD" and giving them a wedgie.

The guy I went with summed up his services up like this. "Think of taxes like driving a car. Do you want to do the speed limit? 10 miles over? 10 miles under? 25 miles over? You tell me what you're comfortable with."

I went with him and 5 miles over.

It amazes me how many loopholes and ways to shuffle money to keep it out of the governments hands are available to me at that moderate of a speed limit. Not enough to worry about coming back to bite me, but enough to know I'm doing what I can to milk every hard earned cent to the best advantage I'm comfortable with.
I can only imagine what they are for those that travel on the Autobahn......
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Re: How the Wealthiest Avoid Income Tax

Post by noxiousdog »

raydude wrote: Tue Jun 08, 2021 12:51 pm From the article:
In that year, Bezos, who filed his taxes jointly with his then-wife, MacKenzie Scott, reported a paltry (for him) $46 million in income, largely from interest and dividend payments on outside investments. He was able to offset every penny he earned with losses from side investments and various deductions, like interest expenses on debts and the vague catchall category of “other expenses.”
Can someone who knows better than me explain what type of "interest expenses on debts" can help offset income? I have a car loan that has an interest expense but I can't write that off. The closest thing I have to that is my home mortgage, which I thought was the only loan interest one could write off but apparently, that's not true?
You can't unless it's inside a business (either partnership, corporation, trust, business related expense etc). There are lots of legal tax issues that Zarathud is better equipped to discuss.

The reason this exists is because businesses are taxed on net income, not revenue. Some individuals are then able to use the business accounting for personal taxation.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

National Review - yeah this is what we should worry about. :roll:
What did you make of that big ProPublica story on the intimate tax information of America’s richest men? Personally, I concluded that I can’t trust the IRS.

There are only a few ways in which the information ProPublica examined could have made it onto the Internet. It could have been leaked by someone who works for — or with — the IRS. It could have been hacked by an outside group. Or it could have been surreptitiously released by a member of Congress or a Biden administration staffer. Whichever one of these happened, the conclusion must be the same: We cannot trust the IRS.

“Oh, who cares?” you might ask. “The victims are billionaires!” And indeed, they are. But I care. For a start, they’re American citizens, and they’re entitled to the same rights — and protected by the same laws — as everyone else. Their privacy does not matter less than mine just because they’re richer than I am. Besides, even if one wants to be entirely amoral about it, one should consider that if their information can be spilled onto the Internet, anyone’s can. And, if you were in their shoes, you’d probably care a lot more than they do. A government that is this reckless or sinister with the information of men who are lawyered to the eyeballs is unlikely to worry too much about being reckless or sinister with your information.
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Re: How the Wealthiest Avoid Income Tax

Post by hepcat »

If the IRS wants to release my tax returns, they have my blessings. If you aren’t gaming the system, you shouldn’t be worried about what folks see. If you are, you obviously don’t care what others think.
Last edited by hepcat on Tue Jun 08, 2021 8:12 pm, edited 3 times in total.
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Re: How the Wealthiest Avoid Income Tax

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Re: How the Wealthiest Avoid Income Tax

Post by Zarathud »

The privacy of billionaires matters is not the priority. Investigators are going to try to get private information. :roll:

Interest on personal expenses are non-deductible. Interest to start a business or buy new equipment are deductible to the extent of profits—and the purchase price of the business equipment is 100% deductible in year 1 under the Trump tax act that McConnell passed.

The tax issue isn’t really wealth accumulation — it’s been about the massive tax give-aways to business under Trump. He hid his taxes so no one could figure out how badly he cheats, and everything else was a smokescreen for Trump buying acceptance from others. With someone else’s money, as usual.
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Re: How the Wealthiest Avoid Income Tax

Post by Max Peck »

Aside from the particulars about individuals who are called out by name, is any of this really new information? I read an article several years ago about how Steve Jobs used this method to avoid having any significant taxable income while still living the billionaire lifestyle.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

I think it's new information at the macro scale in the sense that they have a sizable sample of full tax returns from the wealthiest people in the United States.

Pro publica is going to continue with in depth analysis with the expansive set of informatiom which is new "to the public" as well which may lead to mapping out of tax strategies and could lead to legislative recommendations.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

The ironic thing is that image could easily be replaced with an AR-15-style rifle split-screened with the mob on 1/6. Except instead of coming for the rich they were fighting to continue to be exploited by them.

Drazzil wrote: Tue Jun 08, 2021 8:09 pmImage
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Re: How the Wealthiest Avoid Income Tax

Post by noxiousdog »

Zarathud wrote: Wed Jun 09, 2021 2:25 am The privacy of billionaires matters is not the priority. Investigators are going to try to get private information. :roll:

Interest on personal expenses are non-deductible. Interest to start a business or buy new equipment are deductible to the extent of profits—and the purchase price of the business equipment is 100% deductible in year 1 under the Trump tax act that McConnell passed.

The tax issue isn’t really wealth accumulation — it’s been about the massive tax give-aways to business under Trump. He hid his taxes so no one could figure out how badly he cheats, and everything else was a smokescreen for Trump buying acceptance from others. With someone else’s money, as usual.
That's actually the biggest problem with the article. I think it's making a bunch of dubious aggregations. For instance, If you're going to include the growth in stock value as "income" then it transparently you should be adding corporate income taxes to the taxes paid column. Admittedly, that works out way better for Buffett's image than for Bezos's. Buffett's corporate share was $540 million alone, but they only credit him with 27 million of taxes paid.

It makes way more sense for them to have gotten the info from corporate filings (which are public) vs individual which are private. I'm guessing they are then making extrapolations.

That being said, some form of wealth tax for the ultra rich needs consideration. I think the best answer would be to force all corporations with revenues over 1 billion to distribute 50% of their profits as dividends. It would bring more transparency to corporate accountability and it would force the huge corporate owners to pay income tax on the distributions at ordinary income rates. Some form of that combined with a new ultra high tax bracket and corporate tax reduction (since it would be taxed at ordinary income rates in a distribution you wouldn't need to tax it internally) would go pretty far for equitable taxation.
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Re: How the Wealthiest Avoid Income Tax

Post by Kurth »

I had to stop reading the NYT article about this at breakfast today when I nearly spit my coffee out when I got to the part about Bezos claiming the $4K child tax credit in 2011. I don’t know if they make a fraction small enough to accurately compare my wealth to that of Jeff Bezos, but I couldn’t claim the freaking child tax credit this year. First year ever I was better off taking the standard deductions rather than itemizing. I got absolutely reamed by the IRS. Part of that is expected, as we sold off some stock and held on to the proceeds to cover taxes, but it was still a full on tax bludgeoning.

At the end of the day, I’m not really going to complain about the taxes we pay. We do pretty well, and so we should pay our fair share. I also don’t buy into a lot of the anti-business, class warfare rhetoric that I hear from some of my more progressive friends out here in Portland.

But I do get steamed to read about the uber-wealthy getting a free ride when it comes to income tax. That’s just bullshit.
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Re: How the Wealthiest Avoid Income Tax

Post by Zarathud »

noxiousdog wrote: Wed Jun 09, 2021 2:53 pmI think it's making a bunch of dubious aggregations. For instance, If you're going to include the growth in stock value as "income" then it transparently you should be adding corporate income taxes to the taxes paid column. Admittedly, that works out way better for Buffett's image than for Bezos's. Buffett's corporate share was $540 million alone, but they only credit him with 27 million of taxes paid.
I'm not sure it will help if you add in corporate income taxes. Corporations are notorious about avoiding taxes -- see the G7's agreement to impose a 15% minimum tax on multinational businesses. And if corporations are people, my friends, then they can pay taxes on their own ledger.
noxiousdog wrote: Wed Jun 09, 2021 2:53 pmThat being said, some form of wealth tax for the ultra rich needs consideration.
A wealth tax is pretty hard to implement -- unless you tax assets at death when you've caught the family unprepared. Bernie's tax plan is basically unworkable. But it does address that a massive give-away under the Trump Tax Act was to double the estate tax exemption so that $23.4 million in wealth can pass without any estate tax. Its repeal of the credit for payment of state taxes was obviously unfair, and proved that the whole Republican argument against double-taxation was a lie. Stiggin' it to higher income-tax states with Democrats was a higher priority.
noxiousdog wrote: Wed Jun 09, 2021 2:53 pm I think the best answer would be to force all corporations with revenues over 1 billion to distribute 50% of their profits as dividends.
Add high tax rates on retained corporate profits held for longer than 5 years -- that would incentivize dividend payments and bring more assets into the tax system without a mandate.

Before we do anything extreme, we can start by undoing the major tax breaks to high income persons under the Trump and Bush administrations. You don't need an ultra high tax bracket to penalize the wealthy -- make it so everything is taxed more equally and then there can't be economic distortion over chasing tax benefits. Earnings and capital gains can be taxed closer to ordinary income and wages. It's easy -- increase the top rates and get rid of the preferences/loopholes, so everyone pays. Since wealthy people earn more income, they will end up paying a lot more too.

That makes my life harder as a tax advisor, but I can always feed myself dealing with the dysfunction among wealthy families over money. I swear that many days I'm providing as much therapy as tax advice.
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"I don't stand by anything." - Trump
“Bad men need nothing more to compass their ends, than that good men should look on and do nothing.” - John Stuart Mill, Inaugural Address Delivered to the University of St Andrews, 2/1/1867
“It is the impractical things in this tumultuous hell-scape of a world that matter most. A book, a name, chicken soup. They help us remember that, even in our darkest hour, life is still to be savored.” - Poe, Altered Carbon
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

noxiousdog wrote: Wed Jun 09, 2021 2:53 pm
Zarathud wrote: Wed Jun 09, 2021 2:25 am The privacy of billionaires matters is not the priority. Investigators are going to try to get private information. :roll:

Interest on personal expenses are non-deductible. Interest to start a business or buy new equipment are deductible to the extent of profits—and the purchase price of the business equipment is 100% deductible in year 1 under the Trump tax act that McConnell passed.

The tax issue isn’t really wealth accumulation — it’s been about the massive tax give-aways to business under Trump. He hid his taxes so no one could figure out how badly he cheats, and everything else was a smokescreen for Trump buying acceptance from others. With someone else’s money, as usual.
That's actually the biggest problem with the article. I think it's making a bunch of dubious aggregations. For instance, If you're going to include the growth in stock value as "income" then it transparently you should be adding corporate income taxes to the taxes paid column. Admittedly, that works out way better for Buffett's image than for Bezos's. Buffett's corporate share was $540 million alone, but they only credit him with 27 million of taxes paid.
Maybe you didn't get there but they do discuss that problem of composition specifically. The point of the aggregations they chose is that the massive gulf in wealth inequality is being driven by how they choose to control their income/taxes. That's the game. They didn't want to miss that essential element so they built an imperfect but good enough framework to allow comparisons to indicate the macro problems.
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Re: How the Wealthiest Avoid Income Tax

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malchior wrote: Thu Jun 10, 2021 7:28 amMaybe you didn't get there but they do discuss that problem of composition specifically. The point of the aggregations they chose is that the massive gulf in wealth inequality is being driven by how they choose to control their income/taxes. That's the game. They didn't want to miss that essential element so they built an imperfect but good enough framework to allow comparisons to indicate the macro problems.
Or to exaggerate the income and minimize the taxation. I'll admit I'm personally biased in this because I'm such a fan of Buffett. Even to call him out is quite obnoxious considering 1) he's been saying to tax him more and 2) nearly 100% of his net worth is going to wind up in the hands of charity and not as generational wealth.
I'm not sure it will help if you add in corporate income taxes. Corporations are notorious about avoiding taxes -- see the G7's agreement to impose a 15% minimum tax on multinational businesses. And if corporations are people, my friends, then they can pay taxes on their own ledger.
Fundamentally, I'm not opposed to corporate taxes. I just think they present problems. For instance, your percentage of paying Wal-mart's taxes (assuming you have stock in either WMT directly or indirectly through a mutual fund) is exactly the same as the Walton family. It goes against the progressive system that we would like. The Waltons should have a 35%+ tax on their share of the profits and you should have whatever bracket you're in.

In addition, by forcing distributions you'd have a directly relatable measure of company valuation. We've gotten to the point where there's effectively 0 incentive for corporations to pay dividends which has turned the stock market purely into "what do I think someone will pay for this in a year (or less)."

Regardless, I know it's a pipe dream. There's zero change anyone even in the vicinity of wealthy would vote for this to happen.
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Re: How the Wealthiest Avoid Income Tax

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Smoove_B wrote: Tue Jun 08, 2021 11:53 am New article from ProPublica making the rounds this morning, filled with interesting factoids:
The results are stark. According to Forbes, those 25 people saw their worth rise a collective $401 billion from 2014 to 2018. They paid a total of $13.6 billion in federal income taxes in those five years, the IRS data shows. That’s a staggering sum, but it amounts to a true tax rate of only 3.4%.

It’s a completely different picture for middle-class Americans, for example, wage earners in their early 40s who have amassed a typical amount of wealth for people their age. From 2014 to 2018, such households saw their net worth expand by about $65,000 after taxes on average, mostly due to the rise in value of their homes. But because the vast bulk of their earnings were salaries, their tax bills were almost as much, nearly $62,000, over that five-year period.

No one among the 25 wealthiest avoided as much tax as Buffett, the grandfatherly centibillionaire. That’s perhaps surprising, given his public stance as an advocate of higher taxes for the rich. According to Forbes, his riches rose $24.3 billion between 2014 and 2018. Over those years, the data shows, Buffett reported paying $23.7 million in taxes.

That works out to a true tax rate of 0.1%, or less than 10 cents for every $100 he added to his wealth.
But how?
So how do megabillionaires pay their megabills while opting for $1 salaries and hanging onto their stock? According to public documents and experts, the answer for some is borrowing money — lots of it.

For regular people, borrowing money is often something done out of necessity, say for a car or a home. But for the ultrawealthy, it can be a way to access billions without producing income, and thus, income tax.

The tax math provides a clear incentive for this. If you own a company and take a huge salary, you’ll pay 37% in income tax on the bulk of it. Sell stock and you’ll pay 20% in capital gains tax — and lose some control over your company. But take out a loan, and these days you’ll pay a single-digit interest rate and no tax; since loans must be paid back, the IRS doesn’t consider them income. Banks typically require collateral, but the wealthy have plenty of that.

Overall it's a fascinating article. Also, enraging and depressing.
The other thing to keep in mind is that middle class folks ALSO pay Payroll Taxes out of their Income - the 14% tax rate the article claims for a family making $70k, is actually more like 30% after Payroll taxes on their income.

Oh, and remember that the *only* tax the GOP never wants to cut is payroll taxes. They sure do have a hard on for cutting Social Security, Medicare, Unemployment, etc Benefits tho...
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Re: How the Wealthiest Avoid Income Tax

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The long-term strategy is to force a crisis to use to cut Social Security. They would cut it if they could.
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Re: How the Wealthiest Avoid Income Tax

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Zarathud wrote: Thu Jun 10, 2021 2:52 pm The long-term strategy is to force a crisis to use to cut Social Security. They would cut it if they could.
Do they not figure they're on the menu if they start starving people to death?
It's almost as if people are the problem.
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Re: How the Wealthiest Avoid Income Tax

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Isgrimnur wrote: Thu Jun 10, 2021 2:54 pm
Zarathud wrote: Thu Jun 10, 2021 2:52 pm The long-term strategy is to force a crisis to use to cut Social Security. They would cut it if they could.
Do they not figure they're on the menu if they start starving people to death?
No, and they never have.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

noxiousdog wrote: Thu Jun 10, 2021 2:11 pm
malchior wrote: Thu Jun 10, 2021 7:28 amMaybe you didn't get there but they do discuss that problem of composition specifically. The point of the aggregations they chose is that the massive gulf in wealth inequality is being driven by how they choose to control their income/taxes. That's the game. They didn't want to miss that essential element so they built an imperfect but good enough framework to allow comparisons to indicate the macro problems.
Or to exaggerate the income and minimize the taxation. I'll admit I'm personally biased in this because I'm such a fan of Buffett. Even to call him out is quite obnoxious considering 1) he's been saying to tax him more and 2) nearly 100% of his net worth is going to wind up in the hands of charity and not as generational wealth.
Both of these were discussed at length in the article. IMO it wasn't to call *him* out but to point out that even people in favor of change agree that they pay too little.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

Don't go after tax cheats because they might be exposed? GOP logic is hard to follow.

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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

GOP undermines proposed new rule for IRS to detect tax cheats. As usual the Democrats show that they are afraid of their own shadows and absolutely lack any spine. If you hadn't heard about this before now...you might be surprised to hear this is a major froth point in right-wing news and backing off it is being held up as a major win over socialism.
Senate Democrats on Tuesday will unveil a scaled-back version of a Biden administration proposal to crack down on wealthy tax cheats after conservative groups and the bank industry raised major privacy concerns, three people with knowledge of the coming announcement said.

Initially, the Department of Treasury and Senate Democrats had proposed requiring financial institutions to provide the Internal Revenue Service with additional information on bank accounts with more than $600 in annual deposits or withdrawals.

After a backlash, the new proposal will instead require the provision of additional information for accounts with more than $10,000 in annual deposits or withdrawals, a measure Democrats have been considering for weeks but have not formally endorsed, the people said.

The revised version of the bank reporting proposal will also weaken its scope by exempting all wage income from counting toward the $10,000 threshold withdrawal, intending to ensure it applies to only larger account holders, the people said. The Biden administration has signed off on the changes and is expected to support the new plan, a potentially key source of new revenue to pay for Democrats’ multi-trillion-dollar economic package. The people spoke on the condition of anonymity to discuss a matter not yet made public.

The weakening of the reporting requirements reflects Democrats’ sensitivity to the increasingly explosive politics of the issue as Republicans, conservative groups and industry lobbyists attempted to label the initial proposal as representing a major expansion of snooping by the IRS into taxpayers’ private information. Treasury Secretary Janet L. Yellen has adamantly rejected this criticism, arguing the new reporting rules amount to an essentially technical set of changes that will only impact wealthy tax evaders. But even many Democrats privately concede that the proposal gave Republicans an opening to attack them on the issue, provoking a fury of opposition among conservative groups.
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Re: How the Wealthiest Avoid Income Tax

Post by gilraen »

$600, though? That's almost anyone with a checking account. Even if they were able to pass it, what's the point and how would this be helpful?

Even $10,000 isn't that high. Haven't we learned from TV shows that banks are required to report any single transactions over $10k to the IRS? And this is annual total transactions. Again, what am I missing here?
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Re: How the Wealthiest Avoid Income Tax

Post by Kraken »

gilraen wrote: Tue Oct 19, 2021 2:54 pm $600, though? That's almost anyone with a checking account. Even if they were able to pass it, what's the point and how would this be helpful?

Even $10,000 isn't that high. Haven't we learned from TV shows that banks are required to report any single transactions over $10k to the IRS? And this is annual total transactions. Again, what am I missing here?
Yeah, I saw some headline along the lines of "Does Biden want to tax all transactions over $600?" and thought "Of course not, Mr Clickbait." I didn't realize they were actually distorting something real. Are rich people avoiding taxes by having a million tiny checking accounts?
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

gilraen wrote: Tue Oct 19, 2021 2:54 pm $600, though? That's almost anyone with a checking account. Even if they were able to pass it, what's the point and how would this be helpful?
It's a rule. It'll just go through the rule making process so whatever they roll out probably will happen in time. All they are doing is asking the bank to total up *TOTAL INFLOWS* and *TOTAL OUTFLOWS* to the account. It is not at any sort of transaction level which is novel. All they are trying to do is stop tax cheats from lying about cash flows and give the IRS another tool to detect tax cheats. That's it. It is pretty innocuous but you have the right yelling socialism/totalitarianism.
Even $10,000 isn't that high. Haven't we learned from TV shows that banks are required to report any single transactions over $10k to the IRS? And this is annual total transactions. Again, what am I missing here?
That's the interesting part. No one should care too much. It's not much more intrusive than the banks sending over interest earned. The reason I find it interesting is that the right went nuts over this. Which leads me to think there is something to it. Anytime I see the right going crazy over some wealth adjacent nothingness I instantly suspect grift.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

Kraken wrote: Tue Oct 19, 2021 3:47 pm
gilraen wrote: Tue Oct 19, 2021 2:54 pm $600, though? That's almost anyone with a checking account. Even if they were able to pass it, what's the point and how would this be helpful?

Even $10,000 isn't that high. Haven't we learned from TV shows that banks are required to report any single transactions over $10k to the IRS? And this is annual total transactions. Again, what am I missing here?
Yeah, I saw some headline along the lines of "Does Biden want to tax all transactions over $600?" and thought "Of course not, Mr Clickbait." I didn't realize they were actually distorting something real. Are rich people avoiding taxes by having a million tiny checking accounts?
From what I read it isn't that so much as they just lie about cash flows and this was one way to detect when they are lying.
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Re: How the Wealthiest Avoid Income Tax

Post by Kraken »

malchior wrote: Tue Oct 19, 2021 3:49 pm
Kraken wrote: Tue Oct 19, 2021 3:47 pm
gilraen wrote: Tue Oct 19, 2021 2:54 pm $600, though? That's almost anyone with a checking account. Even if they were able to pass it, what's the point and how would this be helpful?

Even $10,000 isn't that high. Haven't we learned from TV shows that banks are required to report any single transactions over $10k to the IRS? And this is annual total transactions. Again, what am I missing here?
Yeah, I saw some headline along the lines of "Does Biden want to tax all transactions over $600?" and thought "Of course not, Mr Clickbait." I didn't realize they were actually distorting something real. Are rich people avoiding taxes by having a million tiny checking accounts?
From what I read it isn't that so much as they just lie about cash flows and this was one way to detect when they are lying.
Well, it's really bad optics to set a threshold that even Daehawk could meet.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

Kraken wrote: Tue Oct 19, 2021 3:51 pmWell, it's really bad optics to set a threshold that even Daehawk could meet.
I guess but is this any way to run a country? That's why we can't get anything done. Everyone is just frothing at the mouth about inconsequential to most changes. Sure they could have targeted better but perhaps they were legitimately worried about small accounts. I don't know but it is more interesting to me to see how the right disrupts straightforward policy changes.
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Re: How the Wealthiest Avoid Income Tax

Post by Daehawk »

Or do like Trump. Pretend you have lots of money and trick people into thinking you do. Then they give you more or you do illegal dirty stuff to get more and avoid paying any taxes. Then you hire many other people to fight on your side so none of your records come to light and then never pay those people either.
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Re: How the Wealthiest Avoid Income Tax

Post by Zarathud »

There was a good reason for choosing $600 — income taxes. Trusts don’t pay tax on the first $600 of income. Since the goal is to track hidden money and trust funds, that’s why the amount was any account over $600 in transfers.

Of course Republicans made it about privacy and government overreach. They’re good at messaging to hide their true motives.
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Re: How the Wealthiest Avoid Income Tax

Post by Zarathud »

Also your checking account isn’t paying you any measurable interest.

You also monitor Deahawk’s bank account to make sure he’s not hiding a side hustle to supplement his government aid. If you were really interested about fraud on the government, you want to target poor people as much as the rich.
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Re: How the Wealthiest Avoid Income Tax

Post by malchior »

Thanks for confirming what I expected. It wasn't chosen randomly. As to the fraud angle, the Biden policy is aimed at scofflaws with bigger incomes. I believe the rationale is that the wealthy get under audited quite a bit compared to the value of their tax avoidance/cheating. They also want to shake the trees that'll produce the most fruit and restore some balance.
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Re: How the Wealthiest Avoid Income Tax

Post by Paingod »

LawBeefaroni wrote: Thu Jun 10, 2021 3:22 pm
Isgrimnur wrote: Thu Jun 10, 2021 2:54 pm
Zarathud wrote: Thu Jun 10, 2021 2:52 pm The long-term strategy is to force a crisis to use to cut Social Security. They would cut it if they could.
Do they not figure they're on the menu if they start starving people to death?
No, and they never have.
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Re: How the Wealthiest Avoid Income Tax

Post by Carpet_pissr »

Biggest thread title teaser ever. Came here looking for a ‘how-to’.
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