DealBook Briefing: How to Really Tax the Rich

Discussion in 'Taxes and Accounting' started by ETJ, Feb 25, 2019.

  1. ETJ


    These are excerpts -

    There are other ways to tax the wealthy
    A majority of Americans are increasingly open to raising taxes on the wealthy. Lawmakers like Representative Alexandria Ocasio-Cortez and Senator Bernie Sanders have proposed revolutionary ways of reducing wealth inequality. But Andrew writes that there are other ways of bridging the gap — ways that stand a chance of becoming law.
    Start with the estate tax. Gary Cohn, the former White House economic adviser, once said, “Only morons pay the estate tax.” Andrew recommends starting there, writing that no fix could work without this. One solution: taxing inherited property at its current worth to capture gains in value made over decades. According to the Congressional Budget Office, closing this loophole could raise more than $650 billion over a decade.
    Raise capital gains rates for the wealthy. Andrew suggests introducing two new tax brackets — say, a marginal 30 percent bracket for those earning over $5 million and a 35 percent bracket for over $15 million — so the U.S. could raise money without discouraging investment.
    Close the carried-interest loophole. Current tax law allows executives at investment firms to have bonuses taxed as capital gains, not ordinary income. Scrapping that — an idea that President Trump has supported — has clear appeal to Americans’ basic sense of fairness.
    Reconsider breaks for charitable giving. At a minimum, Andrew writes, “we ought to consider whether the wealthy should be allowed to take deductions when they move money to their own foundations, or whether they should only take a deduction when the money is spent.”
    Support the I.R.S. “The agency is so underfunded that the chance an individual gets audited is minuscule,” Andrew writes.
    Today’s DealBook Briefing was written by Andrew Ross Sorkin in New York, and Michael J. de la Merced and Jamie Condliffe in London.
  2. Let's assume that you can IRS your way to prosperity for the government. And let's assume that the IRS does not have enough resources to go after every tax cheat.

    Which of these is more likely to be true once the IRS receives enough funding to go after everyone:

    1. Pursue 1,000,000 people and claw back an average of $1K with an average turnaround time of 6-12 months
    2. Pursue 35,000 people (the 0.01%) and claw back and average of $50K with an average turnaround time of 4 years (ever gone toe to toe with the IRS? I have, and step 1 is delay indefinitely)

    That's right boys and girls, they're going to come after you.
  3. KevMo


    - Lowering the Estate Tax down to some level, say back to $1.5MM per person, $3.0MM per couple may actually have a chance at passing both houses. But it would be a full employment act for Insurance Agents again. They would make an absolute fortune selling policies to cover that tax.

    - Carried Interest may appeal to some folks "sense of fairness" as he states. But, very unlikely that would pass as too many big shots grease & fund Congressional campaigns with all the influence that commands. They had a chance to do it recently under the "2017 TCJA." But Congress chose, much in their own self-interest, not to touch it. I doubt if that ever goes away.

    - Additional levels of Cap Gains tax for the "wealthy," is just fundamentally wrong [my own editorial] but likely has the best chance of passing at some point.

    - Funding more IRS personnel is going to be very difficult for several reasons:
    a. Trump is on the warpath to thin down all Federal Employees.

    b. 40% of all Federal Employees [not just IRS] are eligible for the FERS retirement within the next 5yrs. To hire and train new staff across the Federal workforce spectrum is going to be a huge job with lots of additional budgetary expense in and of itself.

    c. Federal Employment is simply not all that popular anymore with young graduates.

    d. With such a tight labor force as we have now, coaxing new College Grads to the Dept of Treasury as Accountants, Auditors, Law Enforcement would have to come at much higher compensation levels than currently exist to keep them away from the private sector [excluding Law]. Accting & Finance grads are competing for PE/VC/IB jobs, and positions with sexy new "Start-ups."
    Last edited: Feb 25, 2019
    Nobert likes this.
  4. ET180


    Sounds like a plan to make bitcoin great again. I always thought it was just a fad and going to zero, but it does have one handy use -- the ability to hide capital and evade taxes. Easiest way to tax the rich: get rid of long-term capital gains treatment. Just treat all capital gains as ordinary income. Also, get rid of the home mortgage deduction. It's not really fair for renters to subsidize home owners. Then again, taxes were never about fairness.
  5. smallfil


    The reason Warren Buffett and other filthy rich liberals ask for more and more taxes on them is they know that their tax loopholes make it impossible to tax these guys more than the tax code as written by the politician buddies will allow it. I will cite only the Estate Tax because that tax loophole was exposed and now well known. The billionaires have the so called Gart Trusts which allows the very rich among us to not pay a penny of estate tax. All they need to do is run their monies thru several trusts they create and their children and grandchildren when they eventually, get the monies will not pay one red cent under the estate tax! This is just one and the tip of the iceberg! So millionaires with say, $10 million probably, will pay thru their noses with the estate tax while, the filthy rich billionaires pay nothing! And do you think their politician buddies will allow you to tax the very filthy rich? These same guys who give them lots of campaign cash? And biggest tax cheats are the liberals because they are fine with taxing everyone else except, themselves!
  6. smallfil


    Those asking for higher taxes are big fools and I will tell you to your face right now! As sure as night and day, when taxes are raised, it is the middle class and probably, the millionaires with a few million that will be paying it! Think about it. You do not have any tax loopholes to hide and protect your monies. The filthy rich billionaires have tax loopholes up their asses and can get more tax loopholes if they need it! Their corrupt politician buddies will make more tax loopholes for them as needed. You are the low hanging fruit and easy enough to tax because you cannot hide your income or shelter it. Someone has to pay higher taxes and liberal Democrats will be more than happy to do it! That is one way to get the votes from those dependent on government. Why do you think the Democrats love all these illegals (foreigners)? A sure vote for them. All they need to do is give them your monies!
  7. Bingo. That's why I hide my money and fight the government whenever they come for me.
  8. KevMo


    Got news for ya.

    $Bitcoin and all the #Altcoins are already widely mapped, infiltrated, associated...etc., with all kinds of 3 letters agencies. FBI, NSA, IRS, SS, NRO, CIA, HSI, CBP...etc, are already experts in following purportedly anonymous, private #Cyrpto transactions. That is if they are not already embedded in the Dev Teams themselves.

    This is especially true for those projects who claim and advertise their purported total privacy and anonymity such as Monero, Dash and all the others.

    Additionally, with #Blockchain and the other #DLT protocols, all transactions leave an indelible record...bread crumbs, if you will, of all the steps one takes to shelters and manipulate one's Token transactions regardless of how many TOR wrappers and bounces one thinks might be safe.

    And, as is well known, those records can [almost] never, ever be altered. So there's a very long tail, and trail, for Law Enforcement and taxation authorities to follow, and no time limit on seeking out their suspects.

    There's no statute of limitations on fraud.

    This is a PSA. Just FYI, in case anyone was [is] thinking about trying to shelter and not report #Crypto transaction.

    Sovereigns & Governments are never going to allow their ability to control "Money," by letting it slip through their fingers, especially by means of what is essentially merely fancy Database technology.
    ET180, Nobert and nooby_mcnoob like this.
  9. ET180


    That's probably true. I've never owned crypto currencies and never plan to. I recall that Coinbase was forced to give customer holding amounts to the government about the time that it Bitcoin and others started to drop. But the key is even if the government knows someone is holding a lot of money in cryptos, how would they get the money back if the person has already left the country and never plans to come back? I thought that was the whole marketing point of cryptos (real purpose of course was being a ponzi scheme).
  10. Sig


    Fundamental to a block-chain is that there is a complete history of every transaction that's ever happened publicly available. No-one has to "infiltrate" anything, it's trivial to subpoena or even obtain without a subpoena in may cases, a point of translation into real currency and collate a known person to the block-chain data, at which point the entire history is known. Sure there are some advanced strategies of mingling a bunch of coins together, but those really just delay the inevitable. Anyone who starts out with the idea that bock-chains are a way to ensure anonymity clearly don't understand first principles of block-chain.
    #10     Feb 27, 2019
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