Students in Massachusetts will get free lunch and breakfast at school thanks to a new 4% tax put on people who earn more than $1 million.
Students in Massachusetts will get free lunch and breakfast at school thanks to a new 4% tax put on people who earn more than $1 million.
A European here. Aside from going in the right direction, I have a question: Don’t the rich already pay most of their earnings as taxes? So the problem is not that they are not getting taxed, but rather that they avoid paying them through loopholes? Or is that a billionaire problem?
Yeah. The problem is that the richest people have many loopholes to avoid paying taxes. Getting a minimal salary and then just taking loans against their assets is one of them.
This.
And to add to it. If you were making 10 million dollar and someone approached and said that they could make it so that you keep 1 million in taxes if you pay them 100 thousand you would most likely be one of the ones doing it.
If you make enough money you can afford hiring people to find new ways to keep your expenses down. Tax is an expense as any other to many rich people.
“After all, you made your fortune without getting any help so why should your earnings go to p1eople who use the system”
Is this the Steve Jobs $1 special??
Yes
Part of it is loopholes, but an equally big part is that we tax the way the rich earn their money differently. Most working- and middle-class earners make their money from a wage or salary, which is taxed as income. However, the rich make almost all of their money through dividends on stocks, low- or no-interest loans backed by assets, and selling stocks through the market or companies (that they have a seat on the board) doing stock buybacks. All of the income made from the above are taxed differently as “capital gains tax,” which is usually taxed at a much lower rate than income.
Capital gains tax isn’t ‘much’ lower, it’s like 5% lower, depending on the bracket.
Loans make it possible to avoid taxes–temporarily. You eventually have to pay off the loan, at which point you’ll pay taxes. Of course, if you’re making more from your investments than you’re paying in interest (and with plenty of collateral, you can get lower-interest loans), it makes sense to just pay the interest and never the principal of the loan. Of course, if loan interest rates shoot up (which they now have), this can suddenly stop working.
And right now, there is a loophole related to carrying loans–but it requires you to die. When you die, your heir is allowed to sell assets to pay off your loans without paying capital gains tax (or not as much? I don’t quite remember).
Thanks for your answer to my question! More specific answers like this one really help reinforce what the other told me. I also appreciate you not going into politics, like a few others have.
If you’re actually curious, look up “progressive tax rates”. You can absolutely still get obscenely rich in the US, even if you pay your taxes as intended. They won’t though, because psychopathy and crippling narcissism are prerequisites to “earning” enough money to even have that conversation in the first place.
Remember that billionaires…
They could not be further removed from the reality of their kingdoms below, unless they were on Mars. They don’t want to contribute to the social safety nets that stop the little people from freezing/starving/dying. They’ll spend a million dollars to not spend $200 in taxes that contribute to the public good.
That’s hilarious. Only the “little people” pay taxes.
Douchebag Trump hasn’t paid taxes in about a decade
Even ignoring every singly loophole, we tax the ways the rich collect and store their wealth at a much lower percent than actual income. Meaning even if the rich didn’t dodge taxes, they end up paying much less % wise.
Adding in loopholes they pay nothing or next to nothing.
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What do you propose the government should limit/stop spending on to reach over 0.5% of the real yearly earnings of Gates, Musk, Bezos, the Waltons and all their billionaire friends?
(Note that I’m not even asking about if the actual real yearly earnings of millionaires.)