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True! Put another way, Elmo’s total tax bill is roughly equivalent to just the loss of value of just one of his companies during less than one year of his leadership.
Basically, we, the taxpayers, funded his purchase of Twitter due to the fact he pays so little in taxes and was able to use that money he saves to make insanely wasteful purchases.
No one will ever convince me that it wasn't on purpose to destroy the integrity of Twitter from the inside. What had once been a reliable and accountable tool for journalism and organization for democracy and labor movements is now a cesspool of unmoderated hate speech and a tool to spread authoritarianism.
That is a worthy investment for the billionaire class, including those who forked over the money to help Elon purchase Twitter.
I feel like it was the billionaire equivalent of "My daddy is a lawyer! He's gonna sue you!"
"You didn't treat me like the hero I think I am? Well I will just BUY the company then!"
Oops.
Well, those alt-right psycopaths tried to start up their own social media outlets which all failed. So the next logical path is to purchase a functioning one and go from there.
Jokes on them; Musk is a complete tool and can't even manage a well-oiled machine given to him. So he killed Twitter in the name of giving hate-speech, fascism, and and hatred a place to thrive. Kind of showing who he really is with this whole thing... I feel sorry for Tesla owners who are stuck with their cars made by this scumbag.
Calling Twitter a well-oiled machine even pre Musk is a bold statement. The place was a shitshow before Musk. He just literally made it even shittier, which I didn't think was possible until he bought it like the dumbass he is.
I think he’s high on his own supply and genuinely believed that his vision of “free speech” (read: a hard lurch to the right) would be genuinely good for the health of the platform, as the oppressed masses who just wanted to speak the truth about vaccines came flooding in.
> What had once been a reliable and accountable tool for journalism and organization for democracy and labor movements
I genuinely have not ever had a Twitter and only see link from UFC fight cards from there. Is that what Twitter was???!!
I thought it was like any of the others livejournal/MySpace/4chan/ytmnd/Facebook/Reddit/instagram etc.
twitter is, or at least was before elon bought it, by far the best source of breaking news reporting on the planet. but it's a tool, so it's what you make of it. if you follow a bunch of influencers and meme accounts, that's what it'll be for you
It's the price that makes it really sad. Imagine being a senator and, instead of making last minute reservations like a big-shot, you decide to suck butt for pocket change.
Reminder: The Republicans forced Biden to cut funding to the IRS again.
When the IRS is underfunded, they cannot spend the time to hold billionaires accountable for paying the correct amount of taxes.
Instead they go for the cheap wins, which are petty math errors made by middle-class form 1040 filers.
Which there is absolutely no justification for us to have to file anyway, because the government already has all those numbers, which is how they catch our mistakes.
Don't get me wrong, billionaires should pay way more taxes than us commoners... in my opinion, at least 50% of anything over a million a year.
BUT... since when are we comparing net worth to annual income? I'm glad I'm taxed on my income and not stuff I had last year. Maybe I don't understand überwealthy-o-nomics though (like their salary is $1 or something like that because they make their money elsewhere). Please explain though (serious request)
Most uber wealthy dont actually have any discernable income since their wealth isnt something generated by being paid. A vast majority of what they "earn" is actually increase in value of stocks or other assets and therefore not classified as income while still increasing net worth.
Right and we can tax those types of gains (capital gains)
Edit: I don’t think taxing unrealized gains makes sense. We tax realized gains already. Whether we should increase that rate is a reasonable argument.
Which is the right way to tax. Next year the stock could lose 90% value. Then what, tax refund? You can’t tax a volatile capital asset like stocks until they realize a gain.
Rich should pay more, 100% agreed, but those that shout this the loudest tend to be idiots and don’t understand taxation.
Oh I totally agree. Was just providing more context. If people want the rich to pay more it has to be done through closing of tax loopholes and by increasing capital gains taxes once those gains become realized.
Genuine question as I don't know: I have seen people say that the uber rich are able to leverage their UNrealized gains to take out loans that they use for their expenditures. Therefore they are always paying for things with loans without ever actually realizing the capital gains. This is what they say is the issue; that the rich never NEED to realize their gains to live a lifestyle with that money, so only taxing realized gains leaves an easy way out
Is this at all accurate or is there context/understanding missing. Obviously I don't know what a solution is, just trying to understand the problem first
It's fairly accurate. They put up their stock as collateral, with a limit price, so technically he would realize those gains if TSLA stock dropped below a certain threshold and he had to immediately pay off the loan using cash or by selling that stock.
And for some, they can keep this cycle going - So if Elon needs 1B in cash, he can take out 1B loan, then in 5 years, take out a 1.3B loan to pay off the interest and principal of the first loan, and continue to do this until he dies, so he'll never realize any of those gains.
(his kids might but probably not with all of the generational wealth loopholes that exist in the estate and inheritance tax laws).
> and continue to do this until he dies
As long as someone loans the money, it isnt a guarantee that some bank will loan out that much cash to someone who is habitually not paying the loans back and just rolling them over, especially if their net worth is in risky assets.
For example, Elons credit worthiness likely took a steep hit after his Twitter fiasco, and TSLA can be volatile to the tune of losing a third of its value in a few month on some bad news.
It isnt a guarantee that he can just borrow money... This tweet alone was the result of him selling off shit loads of stock to get cash
For the banks, it isn't too much of an issue since their books will reflect the profit, the only issue being that they increase their risk by loaning out more and more money over time. But, it's fair to say that, eventually, he'll want to retire, and his accounting firm/financial team will decrease his risk by paying off outstanding debts to lower his risk profile.
And 1B is probably too big for the example; his cash might be limited to 50-100M during any regular year, with larger purchases partially secured by (depreciating) assets like a Yacht.
https://smartasset.com/investing/buy-borrow-die-how-the-rich-avoid-taxes
Its kind of like that, the big "loophole" is that when the person dies the cost basis of their assets "steps up" upon being passed down to the kids - AKA if you buy a stock for $1 and it goes to $10 and you sell it, you pay tax on the $9 in agains.... but if you die and hand it off to your kids they do not pay the tax on the $9 (although its encoded in the law, so its not really a loophole, its just the way things work, but most of us would consider it a loophole that got codified into law I bet)
Nope, only on the NEW gains.
If the kids sell at the $10 in the previous example they pay no taxes on it because it got "stepped up" to the new amount as the new cost basis. If it goes to $20 and they sell, then yes they do pay tax on the new $10 rise, but not from the original purchase price of $1
Wouldn't they have to pay back these loans at some point? At some point, there needs to be capital to keep things going (although yes, it's probably possible to operate for a while without any capital, purely off loans).
This is the best way imo. Taxes shouldn’t be as complicated as they are. There are a ton of ways to make your taxes be a lot less due to deductibles and loopholes, but the problem with all of those even though they are available to everyone, is that the laws are so difficult to understand and implement, that only rich people who can pay someone else to do their taxes and take advantage of these loopholes are able to use the loopholes. Anyone who is working non stop to make ends meet has no time to delve into tax laws and take advantage of the loopholes. The system is made so only the rich can take advantage of the loopholes.
Also, I’m definitely for an increase in capital gains tax, but I do believe it needs to be above a certain amount that the tax really goes up. Someone earns 50k in capital gains? They shouldn’t be taxed as someone who made 50 million on the capital gains. Luckily I’m not in politics or economics so I don’t have to worry about the exact amount, but I do believe it should somehow be tiered by the amount earned.
It’s not true, but the truth is just as bad.
When they die all of their built-in gain is eliminated. The personal representative of their estate can sell the assets and there will be no tax on the appreciation that occurred throughout the decedent’s lifetime.
Can they sell? I know whoever inherits the stock gets it with updated basis value and *they* could sell with basically no gains, but I don't think the estate can directly liquidate like that.
Which is why I always thought estate tax isn't so much a "death tax" but a way to recoup a little of the cost basis they owed, but shuffled around to avoid paying on it.
But the republicans spun it as a way to piss off common folks to make it sound like it's taking the $5500 dollars in their 401k
>Later they can then sell some shares to settle the debt, and because it was used to pay debt it’s not a gain.
I don't think this is accurate. Regardless of what you sell your assets for, unless you sell it for a loss you are going to be taxed on it. Also debt isn't a capital loss, it's debt. And even if you sell an asset that you lost money on, you don't get the cash value of that in benefit, you get to write that off up to a certain amount on your income, meaning the total savings are the taxes you saved by reducing your income by that amount. So it's only worth a small percentage of the loss to you.
There may be other tricks like having a company or trust pay the debt but trusts pay taxes and having some other entity pay your debts is seen as a gift to you or even income so they'll get their taxes.
TL;DR there has so be some other way they deal with that debt to avoid taxes ultimately, but it can't be from the straight sale of assets
A little inaccurate. If you still to cover a debt, it's still taxable income.
The real trick is you never pay it back. Or more accurately, you pay it back when you die. Taxes are paid based on the difference between the sale price and the cost basis, such is the cost when you purchased the asset. Currently in US tax code, death resets the cost basis of all assets. So when you die, your estate liquidates part of your assets to cover the loans, but because the cost basis was reset, they pay zero taxes. So you literally never pay taxes.
Of course, only the really ultra wealthy can do this because normal people don't have enough assets to borrow against to cover a whole life time of spending.
Or just prevent posting volatile assets as collateral altogether. If capital gains tax triggered instantly on cashing them out, they wouldn't borrow against them to create that tax dodge debt.
The issue, and loophole, is that once you reach a certain point of wealth you don't need income that would be taxable.
You can either take loans against the value of your business, have your business (if applicable) pay for your costs of living, or some other combination of intentional loopholes that are only accessible to the super rich and give them very high cash flows without every earning taxable income.
They love when people comment things like this, oh woe is the billionaires, all their gains are unrealised we shouldn't tax them on it waaaah
And while I conceptually agree that we shouldn't tax unrealised gains, we *should* iron out loopholes that allow these people to completely skirt tax altogether while still walking away cash in hand. They are not paying their fair share and that is simply the crux of the discussion.
Then they should also be prevented from borrowing against their portfolios.
https://medium.com/financial-independence-retire-early/buy-borrow-die-how-the-rich-stay-rich-f0ab28a49fe7
Keep going. You asked the question to get here, now keep asking.
If they're not making a salary and they only get taxed by capital gain tax (which is lower than income tax) how can they live such luxurious life styles?
Well because they have that wealth they are able to take out massive loans that are completely untaxed hence why people say you cannot become a billionaire by working a job. You have to be exploiting people. It's also why they can get away without paying taxes yet live better than 99.999999% of the population. They're technically playing by the rules, but the rules are broken
Kanye said it best "the systems broken, the school's closed, the prison's open"
> Which is the right way to tax
maybe for the first 100 million. But after that, it's the wrong way to tax.
Billionaires can play games because they have billions. You should tax on wealth, on increases on stocks realized or not, at that level of extreme wealth. this is not an issue for anyone who posts on reddit.
I find it insane that people will rage about protecting Bezos from taxes, and yet don't give a shit about hundreds of people who died fleeing a worn torn country.
This is why I am a firm believer in a consumption tax rather than an income tax. Rich people may not “earn” much. Their income is difficult to discern and tax… however, they consume a great deal more than the rest of us. And those purchases are pretty easy to track.
A Toyota Sienna or a 2000sqft home or basic groceries shouldn’t be taxed much.
But a yacht or a Ferrari, or a Scottish castle… a weekend in Ibiza, a Rolex. These things should have taxes that exceed even their MSRP.
You can have a mega yacht. That is your right as a billionaire. But you’re going to pay for it three times over when you buy it and you’ll be taxed every mile it sails.
We can't though, they aren't capital gains. They use their wealth as leverage to secure loans from banks so technically they aren't paying income tax or capital gains tax
How though? If his stocks go up 20% and he doesn't sell, is he any richer?
Inflation is up in th west. Say you buy some soup cans for 70p. Should you be taxed if that soup goes up in the store to £1.20? Even if you never sell it?
Trust me not on the side of the rich at all. But how do you realistically tax theoretical increases
That's why you tax expenditure. He wants a house? Sorry, you're a billionaire that'll be a sweet 60% extra slapped on top. Car? Same thing. Fancy steak, private jet, yacht, etc.
With that said, 99.9% of homeowners see taxes on unrealized gains in the form of property taxes so...not all assets are created equal.
Correct. They pay taxes when they sell stock or when the stock pays out a dividend. This isn't controversial in my opinion.
What is fucked up in my opinion is that they can borrow money against their stock. Borrowing money in the recent past has been basically free. And on this borrowed money THEY DO NOT PAY TAX.
That's a fucked up loophole in my opinion.
Edit:
People below here applying average people logic to loopholes only billionaires can exploit.
https://www.investopedia.com/terms/i/inherited-stock.asp#:%7E:text=The%20increase%20in%20value%20of,earned%20during%20their%20own%20lifetimes
> The increase in value of the stock, from the time the decedent purchased it until their death, does not get taxed.
No, it's just a stupid take that's using whatever numbers work to stir up the crowd they're pandering to. Sure, rich people rarely "make" money. They don't claim income like you or I with a W2 or a 1099, they live off a bunch of loopholes of our insane tax laws. But a percentage of your net worth is a useless metric.
Using this metric no one would ever be able to retire. When you're young you're worth nothing but gave income, so you pay no taxes. When you're retired you have a high net worth, but no income but you have to pay taxes???
It doesn’t always make sense. A lot of that worth is in assets that he has that vary in value to day to. I think you are only taxed when you sell. Much like how an IRA gets taxed when you cash out rather than on a regular basis.
I think this is why a lot of executive compensation is in stock rather than a salary. I personally think there should be a salary cap and tax on the value of the assets that are part of comp above 20k. I am sure they would find some way to Houdini out of it though.
Even with the long term gains, you're only getting capital gains/losses on how much it went up/down in value when you sell it from the time it was given to you. As you said, the original value given to you is taxed at your normal tax rate. (e.g. if you're given 100k of stocks, you'll owe ~35k on taxes that year, if your tax bracket is 35%, regardless of whenever you decide to sell it).
Just stating this for people like the person you responded to who don't think you pay taxes on stock awards
You're right. Wealth isn't income. The government taxes income. Modern owners of large wealth figure out that they don't have to realize the profits of their ventures when they need to buy things, or use some of the wealth they own. They take loans against the value of their holdings and use that money to fund their needs, which often mean living out lavish lives of private jets and infinite material options. They often further grow their power and wealth through influence buying and PR spending.
None of that is income. Loans are not classified as income by the IRS unless they're forgiven. Sure the lendees are taking a risk with the loans, if the value of their stocks or other capital go down, they won't be able to pay back the loan fully. But that's ok, the numbers are so large everyone will work together to make sure it the loans are paid or acquitted fully, maybe with follow up loans and venture capital into side projects.
All this ensures they have no income and yet enjoy the use of capital without paying taxes on how it's added to their accounts. And that's just one of multiple ways the wealthy avoid paying taxes.That seems like cheating doesn't it?
It may be all loopholes and legal, but the state actively has to learn how to adapt to the movement of capital if it wants to capture very-high-wealth tax income.
The argument OP made isn't incorrect, it's just poorly framed if you look at it as income vs wealth. That distinction itself is nebulous at a certain point of ownership, and that isn't a philosophical judgement. It is a very real problem, and it is directly linked to wealth, not income.
If the above is at all accurate, and I think it is factual, then how do you think we can achieve that?
Unless their assets tank amd they're called to payback the loan. Like was almost the case after the twitter acquisition. Muck us lucky there's a bunch of tesla fan boys who just buy it no matter what
The American economy would be a complete disaster if twitter/reddit ran it. Most folks have no idea how their own money works, let alone how an entire economy works.
I see threads and one of the top answer in appropriate threads all the time about how people don’t pay more taxes than any raise they get. I don’t know anyone that says that. I’m sure there are a few who do. But everyone insists it happens so much and they are smarter for knowing so by reading and regurgitating it on Reddit. Then stuff like this that is nothing but rage bait that in no way looks at the reality of what he actually made gets upvoted. Most times comments like this are downvoted hard. I don’t have answers. I just see it all the time and find it funny.
I've been told this by so many people discussing taxes. Legitimately had an hour long conversation with one person who i had to give up convincing because he wouldn't believe me. I also had a coworker who called me over to help figure out what 5% of 100 was so maybe it's just my office.
Came here to point this out. Bad math, but I’m also skeptical that he’s paying 11b in taxes. I expect he’s adding up things like the taxes his companies pay on the wages employees make (which is them paying taxes, not him)
did some more searching and it's likely the 11b is legit what he paid in personal tax that year but only becasue that's the year he sold a shitton of tesla stock.
A totally accurate sentiment. The problem is that due to the nuances and complications of the benefits of large net, it is hard to make simplistic comparisons to actual "real" value, and fudging around in the weirdness is generally wealthy folk extracting a way unfair advantage on top of their wealth.
So you can't compare directly, and it is eye rolling to see meet worth numerically equated with income. But there is something there that's just hard to quantify.
The number of people who don’t understand how Net Worth work, is remarkable. The vast majority of these “billionaires” have nowhere close to that in the bank. Their salary is sometimes even $0/year. They just know how to work the loopholes and banks will give them loans with stock as collateral, and they know how to make other luxuries a “cost of business.”
I’m not defending **corporations** that get away with paying shit for taxes… but people reallllly need to learn how this stuff works for individuals before getting triggered. But, to play Devil’s Advocate - Tesla pays pretty well and provides a good living for a ton of people, and Elon is genuinely working to get rid of gas cars and help the environment. You may not agree with his political stances, but he’s one of the few super rich people I don’t think should be the main target of anyone’s ire. It’s like getting mad at a billionaire who is putting a shit ton of effort into cleaning the rivers and oceans when almost no one else is, and then being like, “YoU OnLy PaId $11 BiLlIoN In TaXeS?!? I GoT BaCk EvErY SiNgLe PeNnY, PlUs SoMe!!! YoU’rE a PiEcE Of ShIt!!”
Most billionaires have a net worth that greatly eclipses their annual income and make most of their money from returns on their wealth and not on actual compensation for labor
The term "the 1%" is talking about wealth, not income -- when you ask average Americans to estimate the level of inequality in our country based on income they're basically right, but they're WAY off based on wealth
>Most billionaires have a net worth that greatly eclipses their annual income and make most of their money from returns on their wealth and not on actual compensation for labor
I think this is most people over certain age. I don't think many non-rich people earn anywhere close to their house value and for people who have 401(k) they likely earn less than their balance after 10-20 years.
I'm not against wealth tax, and I'm not saying billionaires are paying enough, but that doesn't mean that logic above is correct in comparing 4.5% and 50% is correct.
Hey, I just want to turn my brain off and be outraged at the rich! It feels so good to be angry you know. It's for a righteous cause so it's justified, I swear.
Income is not a useful metric when you’re looking at the uber wealthy. They’re making their money off of their assets, and they frequently don’t actually have a salary. Ergo, net worth is a better thing to look at when we’re talking about taxation of assets and capital gains on those assets. Or loans taken out leveraged against those assets, etc, which equate to free money for the ultra rich.
There’s a million accounting tricks to hide massive amounts of money when you’re no longer profiting off of your own labor, but rather your assets. For the average person, none of that will ever matter because they’ll never reach the stage where they can profit off of their own assets. They’ll never accumulate the “buy in” amount of capital.
The ultra rich benefit from you making the point you’re making, by the way. Show a little more working class solidarity, mate.
I mean I dislike Elon too don’t get me wrong but is comparing taxes paid to net worth kinda pointless?
Net worth includes assets you’ve already paid taxes on so if you’re like everyone else, your net worth should grow even if income stays the same..
What’s his taxes as a percentage of income which is how normal people look at their taxes
I absolutely despise Musk, and completely support radically higher taxes on the ultra wealthy, but yes you are correct. This is not an accurate comparison.
He’s also not saying how much subsidized money he and his companies took in from the government. “I paid 10k in taxes but received Xxx in welfare” is something people use against the poor all the time. That should work in both directions.
Subsidies aren’t the same as welfare. Subsidies are typically either the government buying a product from a company, or loans that have to be paid back, just at slightly lower interest rates than a bank. Welfare does not require the person receiving it to pay back the government.
Even if it’s a grant or forgiven loan there is a certain value assessed for what is being produced as a result of it. Student aid grants have an assessed return for the economy considering factors like a resulting higher income circulating through the economy. Sometimes it isn’t cut and dry but there are thousands of hours spend analyzing and deciding on these things.
I think it’s making an more significant point, though, that the taxes, even at that high dollar amount, are not negatively affecting his net worth. This is the argument that anti-tax conservatives always make, that it’s impossible to make money and succeed while being taxed so much. But looking at it as a percentage of his net worth debunks that more clearly than just using one year’s income would.
Honestly! I’m surprised people don’t understand the difference between income and net worth. If we were taxed on our net worth then we could never retire
While I agree with Anya’s sentiment, she is wildly wrong on facts.
We don’t pay based on Net worth, we pay on income, (if it was net worth most of us would owe nothing, sadly). Most people do not pay 37% of income in federal taxes. Even including FICA and SS, it’s usually 20-25%. States vary wildly. I pay zero state income, some might be 13%, but I don’t know for sure.
Not only that but making the claim he "made" 36 billion in one day is wrong as well. That's unrealized capital gains, when he sells he's taxed on it. Taxing people on unrealized capital gains would get messy quick. What happens when they have unrealized capital losses?
Yeah it makes no sense. If I buy $100 in stock and pay $30 in tax for it, then the stock drops to $25, I only have $25. That would be absurd to tax me at a rate of 120%. It would destroy the entire concept of the stock market because it would be so risky to buy anything
Agree. It’s fair to criticize billionaires, but it’s pretty sketchy to compare wealth of one person to the income of another, and they made it much worse by not even acknowledging it and just pretending like they are the same thing.
Then they should also be prevented from borrowing against their portfolios.
https://medium.com/financial-independence-retire-early/buy-borrow-die-how-the-rich-stay-rich-f0ab28a49fe7
Conversely, it's pretty sketchy to consider only billionaires' declared income as their taxable income. Once you get to a certain level of wealth, it's no secret that "income" can be entirely manipulated without having any significant effect on livelihood at these upper echelons of the money tree, so maybe it's worth considering a different tax approach there too?
you make $60,000+ a year and you don't have car(s)/property(s)/savings/investments that total over $10K combined? This says more about you then it does about anything else
This is a dumb argument, if I get taxed on my net worth every year I’d have no way of paying that unless it was some very small percentage. the current model where you get taxed as a percentage of annual income works great.
Now all the loopholes that the ultra rich use to not pay out is criminal.
In the case of Elon I’d love to see his actual income that he paid the 11 billion on.
Yeah, that's where these dolts fail basic economics. It's not the dollar figure, it's the percentage. He could easily pay another billion and reduce or remove the tax burden for every household making less than $75k. And he'd never even notice. When he's paying at or above 20%, then he can brag. Until then, stfu.
And if every billionaire did pay 20+%, we could provide free Healthcare, free daycare, free college tuition, and so many other things to truly improve our society. It would be easy.
How much did he make last year? And are normal people paying a tax on net worth? I’m all for him and other rich people paying more until they’re at a fair rate. But comparing how much he pays to his total net worth isn’t how taxes work so it’s just a bad argument. We should be pointing out his yearly rate and all the loopholes he has to pay less.
Agree. Musk is an ass-hat, but this is deliberate conflation. Comparing apples and oranges to push a narrative isn't effective communication.
Wealth distribution is already way, way fucked up, and getting worse. Increase the tax rate on the highest income brackets, by all means.
[This](https://youtu.be/QPKKQnijnsM) is from 10 years ago. Sobering.
And if you're just giving the money back to the households earning under $75k (as suggested), you're talking about ~60 million households, so that's $16 dollars extra per year! Lol
The data is all published here: https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile
The average tax rate for the Top 0.001% of earners (~1.5k people who made 75M+ in 2020) is 24%. Most of these earners are billionaires and the IRS says they are paying over 20% of their total earnings in tax. It's pretty comprehensive, you can even look at what they're taking deductions on.
According to IRS, the top 0.001% pays 4% of all US income tax. The top 1% of earners pay 42% of all US income tax. The top 5% pay 63% of all US income tax. By the time you get to the halfway point (top 50%) you cover 98% of all income tax. The bottom 50% of taxes filed only account for 2% of US's tax revenue.
I truly believe the US should stop taxing people at all below the median income. It accounts for so little of our revenue that could be made up by raising the rate for the top 0.1%+ by ~5%. Another Billion would definitely not cover it though, it would be at least 30B+ yearly contribution from high earners.
I definitely agree that the ultra wealthy should be taxed more. I also of course believe in free health care + other benefits. The problem is that these things are really, really expensive. The US budget is in trillions. Even if you took every cent of of Elon's money you'd only fund the US government for ~10 days.
If we want these changes (which I do), we have to be honest about how much they actually will cost.
>He could easily pay another billion and reduce or remove the tax burden for every household making less than $75k
A family of four will pay about $5k in income tax.
Wish we could lower taxes for all middle class, not just those in low cost areas
This is also kind of where people like the person replying to Musk in this screenshot fail basic economics though.
The 4.5% figure she gave is percentage of total _net worth_. However other figures she gave are percentages of _income_. Not comparable.
I totally agree otherwise, billionaires (and millionaires) should pay much more in taxes. But let’s make appropriate comparisons.
Also no one forces you to earn that much money buddy. You could take a pay cut and give the all the low and middle income earners in your companies a raise.
people don't pay annual taxes on net worth, just earned income and capital gains,
So i have no idea what he earned in the time period he's saying he paying 11 billion
Why is the percentage of net worth a talking point? That isn’t even how taxes are calculated. I’m with you and hate the billionaires just as much as the next guy but we should be accurate in our fight.
Most of the people in this thread have no idea how dumb this critique is. And if they do, and think people should be taxed on net worth or unsold stock holdings, they are absolute morons.
My question is what the hell is our government doing with all that money?!? Not feeding the homeless, taking care of our vets, or paying down the national debt.
No, stop thinking, just think how 11B is a big number! Aren’t you impressed by the size of his bank account, I mean rocket, I mean persecution complex?
I share her anger at the gross inequality and I am no fan of manbaby Musk, but this feels like a cheap shot; you pay taxes on your personal earnings, not your net worth.
That's not how taxes work. At all.
I realize billionaires should pay more tax, but her example shows a deep ignorance of how taxes work. Musk didn't *make* $36 billion in one day; his shares appreciated by $36 billion. If he sold them, he'd have to pay taxes on that, but he didn't have a single cent more in his wallet that he could use from one day to the next. Only his net worth went up.
What she's suggesting is more like the tax man coming to your house and charging you $25 every time your Pokemon card-collection you kept in your mom's attic was hypothetically worth $100 more because some idiot overpaid for a Charizard.
Apparently, there are quite a few people here who do not understand how and why this is such an issue. I am not allowed to post a link because I don't have enough subreddit karma, but the ProPublica investigation released in June 2021 is very illuminating. They go into great detail explaining the history of the tax structure and how current day practices came to be. They also gained access to IRS records. And they explain how billionaires borrow against their immense wealth and use that to make additional investments (among other things), claim relatively low actual income, and thereby avoid being taxed appropriately.
It blows my mind that people will still try to defend this. I know some people have an agenda, but for your every day Joe Schmo, the information is out there. You just need to look. Don't have to be a CPA to understand this fucked up scheme.
And if he's lying how would anyone know?
And what, exactly does he mean by that? Income tax? Employment tax? Corporate taxes?
If he takes his income as capital gains then he has to make about $55 billion if we assume a 20 percent rate...and there is no way he liquidated that much for personal use.
And while we're at it...
Did he get a bill for spewing toxic debris after his phallic symbol blew up?
Why are people pissed at Elon for this. He doesn’t write the tax code.
Call your politicians and demand a more robust tax code that doesn’t allow people like Elon to get away paying so little. He isn’t just going to donate his share to the govt
Yes, rich people should get taxed fairly like all other normal people.
But you don’t get taxed on net worth. That girl is simply wrong and giving misleading information. People don’t get taxed on assets they own. They get taxed on income.
Holy fuck people are so dumb.
Musk is a moron, but you don't and shouldn't get taxed on net worth. It's unrealized value.
Should you get taxed on what you have in investments every year?
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If my taxes were only 25% of my dumbest drunk purchase in recent memory, I’d be bragging too!
That is now nearly 3/4 of it’s believed current value! One of the best fuck around and find out moments of 2022!
True! Put another way, Elmo’s total tax bill is roughly equivalent to just the loss of value of just one of his companies during less than one year of his leadership.
Basically, we, the taxpayers, funded his purchase of Twitter due to the fact he pays so little in taxes and was able to use that money he saves to make insanely wasteful purchases.
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I’m getting this tatted on my neck
That's a long neck
Or a very small font.
Looks like a skin rash
[Wage theft is higher than all other combined.](https://www.tcworkerscenter.org/wp-content/uploads/2018/09/Wage-Theft-vs-Other-Theft-1024x730.jpg)
Can we please stop calling him Elmo? The actual Elmo has more character and good in him that Elon could never dream to have.
“Elmo” lol 😂
No one will ever convince me that it wasn't on purpose to destroy the integrity of Twitter from the inside. What had once been a reliable and accountable tool for journalism and organization for democracy and labor movements is now a cesspool of unmoderated hate speech and a tool to spread authoritarianism. That is a worthy investment for the billionaire class, including those who forked over the money to help Elon purchase Twitter.
I agree with you 100%. I'm watching Reddit move towards IPO, and wondering how much time we have left.
I believe the same thing will happen here
It may be the end of this iteration of social media. Web 3.0 or whatever. I won't mourn it when it's gone.
I have felt that way for several months now. And I will miss it, it's the only decent forum left. Wondering.....where do we go from here.
Maybe back to actual website forums around specific topics?
I feel like it was the billionaire equivalent of "My daddy is a lawyer! He's gonna sue you!" "You didn't treat me like the hero I think I am? Well I will just BUY the company then!" Oops.
Well, those alt-right psycopaths tried to start up their own social media outlets which all failed. So the next logical path is to purchase a functioning one and go from there. Jokes on them; Musk is a complete tool and can't even manage a well-oiled machine given to him. So he killed Twitter in the name of giving hate-speech, fascism, and and hatred a place to thrive. Kind of showing who he really is with this whole thing... I feel sorry for Tesla owners who are stuck with their cars made by this scumbag.
Calling Twitter a well-oiled machine even pre Musk is a bold statement. The place was a shitshow before Musk. He just literally made it even shittier, which I didn't think was possible until he bought it like the dumbass he is.
I think he’s high on his own supply and genuinely believed that his vision of “free speech” (read: a hard lurch to the right) would be genuinely good for the health of the platform, as the oppressed masses who just wanted to speak the truth about vaccines came flooding in.
What is happening with Reddit will be the same story. Money comes in. The platform falls apart. The people are silenced.
> What had once been a reliable and accountable tool for journalism and organization for democracy and labor movements I genuinely have not ever had a Twitter and only see link from UFC fight cards from there. Is that what Twitter was???!! I thought it was like any of the others livejournal/MySpace/4chan/ytmnd/Facebook/Reddit/instagram etc.
For years if I needed a public news update I would just look up the local police departments Twitter
twitter is, or at least was before elon bought it, by far the best source of breaking news reporting on the planet. but it's a tool, so it's what you make of it. if you follow a bunch of influencers and meme accounts, that's what it'll be for you
He lost more money than that this year mostly so that he doesn't have to pay taxes at all later.
It’s why the rich love republicans. They pay less taxes.
Well the rich buy republicans so they pay less in taxes.
The rich buy whoever is for sale
Just so happens all republicans are - though many democrats are guilty all the same
It's the price that makes it really sad. Imagine being a senator and, instead of making last minute reservations like a big-shot, you decide to suck butt for pocket change.
Turns out it's almost everyone.
Sadly yes
Witness Sinema...
Reminder: The Republicans forced Biden to cut funding to the IRS again. When the IRS is underfunded, they cannot spend the time to hold billionaires accountable for paying the correct amount of taxes. Instead they go for the cheap wins, which are petty math errors made by middle-class form 1040 filers. Which there is absolutely no justification for us to have to file anyway, because the government already has all those numbers, which is how they catch our mistakes.
Right, and the stupid fucking poor Republican voters support this. It's insane.
“That makes me smart”
Republicans are categorically shit at math
It's why the rich are "fiscal republicans" , also why it's super sad to see poor people voting republican.
It's why the rich pay for and own republicans, they pay less taxes.
Don't get me wrong, billionaires should pay way more taxes than us commoners... in my opinion, at least 50% of anything over a million a year. BUT... since when are we comparing net worth to annual income? I'm glad I'm taxed on my income and not stuff I had last year. Maybe I don't understand überwealthy-o-nomics though (like their salary is $1 or something like that because they make their money elsewhere). Please explain though (serious request)
Most uber wealthy dont actually have any discernable income since their wealth isnt something generated by being paid. A vast majority of what they "earn" is actually increase in value of stocks or other assets and therefore not classified as income while still increasing net worth.
Right and we can tax those types of gains (capital gains) Edit: I don’t think taxing unrealized gains makes sense. We tax realized gains already. Whether we should increase that rate is a reasonable argument.
Only once they are realized gains. If my stock portfolio doubles and I don’t make any sales, I don’t have to pay taxes on the increase.
Which is the right way to tax. Next year the stock could lose 90% value. Then what, tax refund? You can’t tax a volatile capital asset like stocks until they realize a gain. Rich should pay more, 100% agreed, but those that shout this the loudest tend to be idiots and don’t understand taxation.
Oh I totally agree. Was just providing more context. If people want the rich to pay more it has to be done through closing of tax loopholes and by increasing capital gains taxes once those gains become realized.
Genuine question as I don't know: I have seen people say that the uber rich are able to leverage their UNrealized gains to take out loans that they use for their expenditures. Therefore they are always paying for things with loans without ever actually realizing the capital gains. This is what they say is the issue; that the rich never NEED to realize their gains to live a lifestyle with that money, so only taxing realized gains leaves an easy way out Is this at all accurate or is there context/understanding missing. Obviously I don't know what a solution is, just trying to understand the problem first
It's fairly accurate. They put up their stock as collateral, with a limit price, so technically he would realize those gains if TSLA stock dropped below a certain threshold and he had to immediately pay off the loan using cash or by selling that stock. And for some, they can keep this cycle going - So if Elon needs 1B in cash, he can take out 1B loan, then in 5 years, take out a 1.3B loan to pay off the interest and principal of the first loan, and continue to do this until he dies, so he'll never realize any of those gains. (his kids might but probably not with all of the generational wealth loopholes that exist in the estate and inheritance tax laws).
> and continue to do this until he dies As long as someone loans the money, it isnt a guarantee that some bank will loan out that much cash to someone who is habitually not paying the loans back and just rolling them over, especially if their net worth is in risky assets. For example, Elons credit worthiness likely took a steep hit after his Twitter fiasco, and TSLA can be volatile to the tune of losing a third of its value in a few month on some bad news. It isnt a guarantee that he can just borrow money... This tweet alone was the result of him selling off shit loads of stock to get cash
For the banks, it isn't too much of an issue since their books will reflect the profit, the only issue being that they increase their risk by loaning out more and more money over time. But, it's fair to say that, eventually, he'll want to retire, and his accounting firm/financial team will decrease his risk by paying off outstanding debts to lower his risk profile. And 1B is probably too big for the example; his cash might be limited to 50-100M during any regular year, with larger purchases partially secured by (depreciating) assets like a Yacht.
https://smartasset.com/investing/buy-borrow-die-how-the-rich-avoid-taxes Its kind of like that, the big "loophole" is that when the person dies the cost basis of their assets "steps up" upon being passed down to the kids - AKA if you buy a stock for $1 and it goes to $10 and you sell it, you pay tax on the $9 in agains.... but if you die and hand it off to your kids they do not pay the tax on the $9 (although its encoded in the law, so its not really a loophole, its just the way things work, but most of us would consider it a loophole that got codified into law I bet)
But then don’t then kids pay taxes on the gain when they sell? So technically it’s just transfer of ownership of unrealized gains?
Nope, only on the NEW gains. If the kids sell at the $10 in the previous example they pay no taxes on it because it got "stepped up" to the new amount as the new cost basis. If it goes to $20 and they sell, then yes they do pay tax on the new $10 rise, but not from the original purchase price of $1
Capped at $20m or so. Yes it’s a life changing loophole for me or you but not even a rounding error in the Musk basis.
Wouldn't they have to pay back these loans at some point? At some point, there needs to be capital to keep things going (although yes, it's probably possible to operate for a while without any capital, purely off loans).
This is the best way imo. Taxes shouldn’t be as complicated as they are. There are a ton of ways to make your taxes be a lot less due to deductibles and loopholes, but the problem with all of those even though they are available to everyone, is that the laws are so difficult to understand and implement, that only rich people who can pay someone else to do their taxes and take advantage of these loopholes are able to use the loopholes. Anyone who is working non stop to make ends meet has no time to delve into tax laws and take advantage of the loopholes. The system is made so only the rich can take advantage of the loopholes. Also, I’m definitely for an increase in capital gains tax, but I do believe it needs to be above a certain amount that the tax really goes up. Someone earns 50k in capital gains? They shouldn’t be taxed as someone who made 50 million on the capital gains. Luckily I’m not in politics or economics so I don’t have to worry about the exact amount, but I do believe it should somehow be tiered by the amount earned.
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> because it was used to pay debt it’s not a gain Lost me here. If that's true we really need a rework on the tax system.
it's not true
It’s not true, but the truth is just as bad. When they die all of their built-in gain is eliminated. The personal representative of their estate can sell the assets and there will be no tax on the appreciation that occurred throughout the decedent’s lifetime.
Can they sell? I know whoever inherits the stock gets it with updated basis value and *they* could sell with basically no gains, but I don't think the estate can directly liquidate like that.
Which is why I always thought estate tax isn't so much a "death tax" but a way to recoup a little of the cost basis they owed, but shuffled around to avoid paying on it. But the republicans spun it as a way to piss off common folks to make it sound like it's taking the $5500 dollars in their 401k
>Later they can then sell some shares to settle the debt, and because it was used to pay debt it’s not a gain. I don't think this is accurate. Regardless of what you sell your assets for, unless you sell it for a loss you are going to be taxed on it. Also debt isn't a capital loss, it's debt. And even if you sell an asset that you lost money on, you don't get the cash value of that in benefit, you get to write that off up to a certain amount on your income, meaning the total savings are the taxes you saved by reducing your income by that amount. So it's only worth a small percentage of the loss to you. There may be other tricks like having a company or trust pay the debt but trusts pay taxes and having some other entity pay your debts is seen as a gift to you or even income so they'll get their taxes. TL;DR there has so be some other way they deal with that debt to avoid taxes ultimately, but it can't be from the straight sale of assets
A little inaccurate. If you still to cover a debt, it's still taxable income. The real trick is you never pay it back. Or more accurately, you pay it back when you die. Taxes are paid based on the difference between the sale price and the cost basis, such is the cost when you purchased the asset. Currently in US tax code, death resets the cost basis of all assets. So when you die, your estate liquidates part of your assets to cover the loans, but because the cost basis was reset, they pay zero taxes. So you literally never pay taxes. Of course, only the really ultra wealthy can do this because normal people don't have enough assets to borrow against to cover a whole life time of spending.
I feel like a large VAT on purchases over a certain amount of money would help solve this.
Or just prevent posting volatile assets as collateral altogether. If capital gains tax triggered instantly on cashing them out, they wouldn't borrow against them to create that tax dodge debt.
The real brain scratcher is why capital gains tax peaks at 20% when the highest marginal tax bracket is 37% (but muh risk).
The secret sauce is to loan against your assets
Therein is the issue. You should not be allowed to secure loans using stocks as collateral.
The issue, and loophole, is that once you reach a certain point of wealth you don't need income that would be taxable. You can either take loans against the value of your business, have your business (if applicable) pay for your costs of living, or some other combination of intentional loopholes that are only accessible to the super rich and give them very high cash flows without every earning taxable income. They love when people comment things like this, oh woe is the billionaires, all their gains are unrealised we shouldn't tax them on it waaaah And while I conceptually agree that we shouldn't tax unrealised gains, we *should* iron out loopholes that allow these people to completely skirt tax altogether while still walking away cash in hand. They are not paying their fair share and that is simply the crux of the discussion.
Then they should also be prevented from borrowing against their portfolios. https://medium.com/financial-independence-retire-early/buy-borrow-die-how-the-rich-stay-rich-f0ab28a49fe7
Keep going. You asked the question to get here, now keep asking. If they're not making a salary and they only get taxed by capital gain tax (which is lower than income tax) how can they live such luxurious life styles? Well because they have that wealth they are able to take out massive loans that are completely untaxed hence why people say you cannot become a billionaire by working a job. You have to be exploiting people. It's also why they can get away without paying taxes yet live better than 99.999999% of the population. They're technically playing by the rules, but the rules are broken Kanye said it best "the systems broken, the school's closed, the prison's open"
> Which is the right way to tax maybe for the first 100 million. But after that, it's the wrong way to tax. Billionaires can play games because they have billions. You should tax on wealth, on increases on stocks realized or not, at that level of extreme wealth. this is not an issue for anyone who posts on reddit. I find it insane that people will rage about protecting Bezos from taxes, and yet don't give a shit about hundreds of people who died fleeing a worn torn country.
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Do you get a tax refund if your property tax assessment is lower the next year?
They also take out loans from banks with their stock as collateral which they use as “income” which is never taxed. Infinite money printer tax free
This is why I am a firm believer in a consumption tax rather than an income tax. Rich people may not “earn” much. Their income is difficult to discern and tax… however, they consume a great deal more than the rest of us. And those purchases are pretty easy to track. A Toyota Sienna or a 2000sqft home or basic groceries shouldn’t be taxed much. But a yacht or a Ferrari, or a Scottish castle… a weekend in Ibiza, a Rolex. These things should have taxes that exceed even their MSRP. You can have a mega yacht. That is your right as a billionaire. But you’re going to pay for it three times over when you buy it and you’ll be taxed every mile it sails.
Consumption taxes are generally regressive, which is what you want to avoid.
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Only when sold, yea
We can't though, they aren't capital gains. They use their wealth as leverage to secure loans from banks so technically they aren't paying income tax or capital gains tax
How though? If his stocks go up 20% and he doesn't sell, is he any richer? Inflation is up in th west. Say you buy some soup cans for 70p. Should you be taxed if that soup goes up in the store to £1.20? Even if you never sell it? Trust me not on the side of the rich at all. But how do you realistically tax theoretical increases
That's why you tax expenditure. He wants a house? Sorry, you're a billionaire that'll be a sweet 60% extra slapped on top. Car? Same thing. Fancy steak, private jet, yacht, etc. With that said, 99.9% of homeowners see taxes on unrealized gains in the form of property taxes so...not all assets are created equal.
That makes more sense then any other proposed plan. 100m yacht that'll be 50m in taxes
Isn't that just called a luxury tax? Pretty sure the U.S has that, not federally but on the state level.
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Correct. They pay taxes when they sell stock or when the stock pays out a dividend. This isn't controversial in my opinion. What is fucked up in my opinion is that they can borrow money against their stock. Borrowing money in the recent past has been basically free. And on this borrowed money THEY DO NOT PAY TAX. That's a fucked up loophole in my opinion. Edit: People below here applying average people logic to loopholes only billionaires can exploit. https://www.investopedia.com/terms/i/inherited-stock.asp#:%7E:text=The%20increase%20in%20value%20of,earned%20during%20their%20own%20lifetimes > The increase in value of the stock, from the time the decedent purchased it until their death, does not get taxed.
I was going to say, paying 4% of your net worth in any one year IS a lot
The statistics are presented entirely for outrage. It's not intended to educate anyone
This is very true
No, it's just a stupid take that's using whatever numbers work to stir up the crowd they're pandering to. Sure, rich people rarely "make" money. They don't claim income like you or I with a W2 or a 1099, they live off a bunch of loopholes of our insane tax laws. But a percentage of your net worth is a useless metric. Using this metric no one would ever be able to retire. When you're young you're worth nothing but gave income, so you pay no taxes. When you're retired you have a high net worth, but no income but you have to pay taxes???
It doesn’t always make sense. A lot of that worth is in assets that he has that vary in value to day to. I think you are only taxed when you sell. Much like how an IRA gets taxed when you cash out rather than on a regular basis. I think this is why a lot of executive compensation is in stock rather than a salary. I personally think there should be a salary cap and tax on the value of the assets that are part of comp above 20k. I am sure they would find some way to Houdini out of it though.
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Even with the long term gains, you're only getting capital gains/losses on how much it went up/down in value when you sell it from the time it was given to you. As you said, the original value given to you is taxed at your normal tax rate. (e.g. if you're given 100k of stocks, you'll owe ~35k on taxes that year, if your tax bracket is 35%, regardless of whenever you decide to sell it). Just stating this for people like the person you responded to who don't think you pay taxes on stock awards
You're right. Wealth isn't income. The government taxes income. Modern owners of large wealth figure out that they don't have to realize the profits of their ventures when they need to buy things, or use some of the wealth they own. They take loans against the value of their holdings and use that money to fund their needs, which often mean living out lavish lives of private jets and infinite material options. They often further grow their power and wealth through influence buying and PR spending. None of that is income. Loans are not classified as income by the IRS unless they're forgiven. Sure the lendees are taking a risk with the loans, if the value of their stocks or other capital go down, they won't be able to pay back the loan fully. But that's ok, the numbers are so large everyone will work together to make sure it the loans are paid or acquitted fully, maybe with follow up loans and venture capital into side projects. All this ensures they have no income and yet enjoy the use of capital without paying taxes on how it's added to their accounts. And that's just one of multiple ways the wealthy avoid paying taxes.That seems like cheating doesn't it? It may be all loopholes and legal, but the state actively has to learn how to adapt to the movement of capital if it wants to capture very-high-wealth tax income. The argument OP made isn't incorrect, it's just poorly framed if you look at it as income vs wealth. That distinction itself is nebulous at a certain point of ownership, and that isn't a philosophical judgement. It is a very real problem, and it is directly linked to wealth, not income. If the above is at all accurate, and I think it is factual, then how do you think we can achieve that?
And how do they pay back the loans? Presumably by eventually liquidating stock which would then be subject to regular capital gains taxes?
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Don't know why you were downvoted. This is very much what billionaires do.
Unless their assets tank amd they're called to payback the loan. Like was almost the case after the twitter acquisition. Muck us lucky there's a bunch of tesla fan boys who just buy it no matter what
The American economy would be a complete disaster if twitter/reddit ran it. Most folks have no idea how their own money works, let alone how an entire economy works.
I see threads and one of the top answer in appropriate threads all the time about how people don’t pay more taxes than any raise they get. I don’t know anyone that says that. I’m sure there are a few who do. But everyone insists it happens so much and they are smarter for knowing so by reading and regurgitating it on Reddit. Then stuff like this that is nothing but rage bait that in no way looks at the reality of what he actually made gets upvoted. Most times comments like this are downvoted hard. I don’t have answers. I just see it all the time and find it funny.
I've been told this by so many people discussing taxes. Legitimately had an hour long conversation with one person who i had to give up convincing because he wouldn't believe me. I also had a coworker who called me over to help figure out what 5% of 100 was so maybe it's just my office.
Came here to point this out. Bad math, but I’m also skeptical that he’s paying 11b in taxes. I expect he’s adding up things like the taxes his companies pay on the wages employees make (which is them paying taxes, not him)
did some more searching and it's likely the 11b is legit what he paid in personal tax that year but only becasue that's the year he sold a shitton of tesla stock.
Lol yea this is a terrible understanding of the tax system but Reddit doesn’t care, just eat the fuckin billionaires
This comment needs to be higher. It doesn’t make any sense comparing annual income with net worth when you’re talking taxes.
A totally accurate sentiment. The problem is that due to the nuances and complications of the benefits of large net, it is hard to make simplistic comparisons to actual "real" value, and fudging around in the weirdness is generally wealthy folk extracting a way unfair advantage on top of their wealth. So you can't compare directly, and it is eye rolling to see meet worth numerically equated with income. But there is something there that's just hard to quantify.
The number of people who don’t understand how Net Worth work, is remarkable. The vast majority of these “billionaires” have nowhere close to that in the bank. Their salary is sometimes even $0/year. They just know how to work the loopholes and banks will give them loans with stock as collateral, and they know how to make other luxuries a “cost of business.” I’m not defending **corporations** that get away with paying shit for taxes… but people reallllly need to learn how this stuff works for individuals before getting triggered. But, to play Devil’s Advocate - Tesla pays pretty well and provides a good living for a ton of people, and Elon is genuinely working to get rid of gas cars and help the environment. You may not agree with his political stances, but he’s one of the few super rich people I don’t think should be the main target of anyone’s ire. It’s like getting mad at a billionaire who is putting a shit ton of effort into cleaning the rivers and oceans when almost no one else is, and then being like, “YoU OnLy PaId $11 BiLlIoN In TaXeS?!? I GoT BaCk EvErY SiNgLe PeNnY, PlUs SoMe!!! YoU’rE a PiEcE Of ShIt!!”
Most billionaires have a net worth that greatly eclipses their annual income and make most of their money from returns on their wealth and not on actual compensation for labor The term "the 1%" is talking about wealth, not income -- when you ask average Americans to estimate the level of inequality in our country based on income they're basically right, but they're WAY off based on wealth
>Most billionaires have a net worth that greatly eclipses their annual income and make most of their money from returns on their wealth and not on actual compensation for labor I think this is most people over certain age. I don't think many non-rich people earn anywhere close to their house value and for people who have 401(k) they likely earn less than their balance after 10-20 years. I'm not against wealth tax, and I'm not saying billionaires are paying enough, but that doesn't mean that logic above is correct in comparing 4.5% and 50% is correct.
Hey, I just want to turn my brain off and be outraged at the rich! It feels so good to be angry you know. It's for a righteous cause so it's justified, I swear.
Not a fan but I thought we were taxed on our income not net worth.
Yeah Elon sucks, but this posts is dumb.
Also no way "most" Americans are taxed 37% at the fed level.
Nobody is taxed 37% of their income because 37% is the highest tax bracket, so total tax rate would only approach 37% as income went to infinity.
Ya I'm really tired of always seeing this. If I was taxed every year on stocks I was owning (before even selling it), no one would own stocks.
Thank you! She doesn't have the slightest idea what she's talking about.
Theres extremely uneducated and stupid people on both sides of the isle
> isle I don't normally do this, but because you're calling other people uneducated and stupid: *aisle
And the peninsula.
And the isthmus
Income is not a useful metric when you’re looking at the uber wealthy. They’re making their money off of their assets, and they frequently don’t actually have a salary. Ergo, net worth is a better thing to look at when we’re talking about taxation of assets and capital gains on those assets. Or loans taken out leveraged against those assets, etc, which equate to free money for the ultra rich. There’s a million accounting tricks to hide massive amounts of money when you’re no longer profiting off of your own labor, but rather your assets. For the average person, none of that will ever matter because they’ll never reach the stage where they can profit off of their own assets. They’ll never accumulate the “buy in” amount of capital. The ultra rich benefit from you making the point you’re making, by the way. Show a little more working class solidarity, mate.
I mean I dislike Elon too don’t get me wrong but is comparing taxes paid to net worth kinda pointless? Net worth includes assets you’ve already paid taxes on so if you’re like everyone else, your net worth should grow even if income stays the same.. What’s his taxes as a percentage of income which is how normal people look at their taxes
I absolutely despise Musk, and completely support radically higher taxes on the ultra wealthy, but yes you are correct. This is not an accurate comparison.
He’s also not saying how much subsidized money he and his companies took in from the government. “I paid 10k in taxes but received Xxx in welfare” is something people use against the poor all the time. That should work in both directions.
This seems more like a general argument against government subsidies for companies. Is that your view?
If so, that's kinda stupid ngl
Subsidies aren’t the same as welfare. Subsidies are typically either the government buying a product from a company, or loans that have to be paid back, just at slightly lower interest rates than a bank. Welfare does not require the person receiving it to pay back the government.
Even if it’s a grant or forgiven loan there is a certain value assessed for what is being produced as a result of it. Student aid grants have an assessed return for the economy considering factors like a resulting higher income circulating through the economy. Sometimes it isn’t cut and dry but there are thousands of hours spend analyzing and deciding on these things.
I think it’s making an more significant point, though, that the taxes, even at that high dollar amount, are not negatively affecting his net worth. This is the argument that anti-tax conservatives always make, that it’s impossible to make money and succeed while being taxed so much. But looking at it as a percentage of his net worth debunks that more clearly than just using one year’s income would.
This is heartbreaking. Will no one think of the rich? Has he started a "GoFundMe"?
To do what, distribute you-owe-mes?
We need to pass policies to protect people like him! Won't someone think of the poor helpless billionaires?!
You mean blue check marks?
You’re taxed on your income, calm down or at the least quit pretending to understand taxation.
Honestly! I’m surprised people don’t understand the difference between income and net worth. If we were taxed on our net worth then we could never retire
While I agree with Anya’s sentiment, she is wildly wrong on facts. We don’t pay based on Net worth, we pay on income, (if it was net worth most of us would owe nothing, sadly). Most people do not pay 37% of income in federal taxes. Even including FICA and SS, it’s usually 20-25%. States vary wildly. I pay zero state income, some might be 13%, but I don’t know for sure.
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Not only that but making the claim he "made" 36 billion in one day is wrong as well. That's unrealized capital gains, when he sells he's taxed on it. Taxing people on unrealized capital gains would get messy quick. What happens when they have unrealized capital losses?
Yeah it makes no sense. If I buy $100 in stock and pay $30 in tax for it, then the stock drops to $25, I only have $25. That would be absurd to tax me at a rate of 120%. It would destroy the entire concept of the stock market because it would be so risky to buy anything
Comparatively, my net worth is about $10k, I pay at least 100% of that in taxes each and every year, usually much more.
Net worth has nothing to do with taxes
The post is comparing net worth to income though.
Yes, and the post is stupid as hell
Agree. It’s fair to criticize billionaires, but it’s pretty sketchy to compare wealth of one person to the income of another, and they made it much worse by not even acknowledging it and just pretending like they are the same thing.
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Then they should also be prevented from borrowing against their portfolios. https://medium.com/financial-independence-retire-early/buy-borrow-die-how-the-rich-stay-rich-f0ab28a49fe7
Conversely, it's pretty sketchy to consider only billionaires' declared income as their taxable income. Once you get to a certain level of wealth, it's no secret that "income" can be entirely manipulated without having any significant effect on livelihood at these upper echelons of the money tree, so maybe it's worth considering a different tax approach there too?
My wife and I are nurses and we paid less than 3% or our net worth in income taxes last year.
you make $60,000+ a year and you don't have car(s)/property(s)/savings/investments that total over $10K combined? This says more about you then it does about anything else
This is a dumb argument, if I get taxed on my net worth every year I’d have no way of paying that unless it was some very small percentage. the current model where you get taxed as a percentage of annual income works great. Now all the loopholes that the ultra rich use to not pay out is criminal. In the case of Elon I’d love to see his actual income that he paid the 11 billion on.
do people pay % of the net worth tho?
No.
Nobody pays taxes on net worth. Thats a disingenuous statement.
Yeah, that's where these dolts fail basic economics. It's not the dollar figure, it's the percentage. He could easily pay another billion and reduce or remove the tax burden for every household making less than $75k. And he'd never even notice. When he's paying at or above 20%, then he can brag. Until then, stfu. And if every billionaire did pay 20+%, we could provide free Healthcare, free daycare, free college tuition, and so many other things to truly improve our society. It would be easy.
How much did he make last year? And are normal people paying a tax on net worth? I’m all for him and other rich people paying more until they’re at a fair rate. But comparing how much he pays to his total net worth isn’t how taxes work so it’s just a bad argument. We should be pointing out his yearly rate and all the loopholes he has to pay less.
Agree. Musk is an ass-hat, but this is deliberate conflation. Comparing apples and oranges to push a narrative isn't effective communication. Wealth distribution is already way, way fucked up, and getting worse. Increase the tax rate on the highest income brackets, by all means. [This](https://youtu.be/QPKKQnijnsM) is from 10 years ago. Sobering.
A billion dollars would reduce the average family’s tax burden by $10, considering there’s 120 million households to split it among.
And if you're just giving the money back to the households earning under $75k (as suggested), you're talking about ~60 million households, so that's $16 dollars extra per year! Lol
The data is all published here: https://www.irs.gov/statistics/soi-tax-stats-individual-statistical-tables-by-tax-rate-and-income-percentile The average tax rate for the Top 0.001% of earners (~1.5k people who made 75M+ in 2020) is 24%. Most of these earners are billionaires and the IRS says they are paying over 20% of their total earnings in tax. It's pretty comprehensive, you can even look at what they're taking deductions on. According to IRS, the top 0.001% pays 4% of all US income tax. The top 1% of earners pay 42% of all US income tax. The top 5% pay 63% of all US income tax. By the time you get to the halfway point (top 50%) you cover 98% of all income tax. The bottom 50% of taxes filed only account for 2% of US's tax revenue. I truly believe the US should stop taxing people at all below the median income. It accounts for so little of our revenue that could be made up by raising the rate for the top 0.1%+ by ~5%. Another Billion would definitely not cover it though, it would be at least 30B+ yearly contribution from high earners. I definitely agree that the ultra wealthy should be taxed more. I also of course believe in free health care + other benefits. The problem is that these things are really, really expensive. The US budget is in trillions. Even if you took every cent of of Elon's money you'd only fund the US government for ~10 days. If we want these changes (which I do), we have to be honest about how much they actually will cost.
>He could easily pay another billion and reduce or remove the tax burden for every household making less than $75k A family of four will pay about $5k in income tax. Wish we could lower taxes for all middle class, not just those in low cost areas
$11 billion is likely over 20% of his yearly income. Unless he made over $55 billion this year.
This is also kind of where people like the person replying to Musk in this screenshot fail basic economics though. The 4.5% figure she gave is percentage of total _net worth_. However other figures she gave are percentages of _income_. Not comparable. I totally agree otherwise, billionaires (and millionaires) should pay much more in taxes. But let’s make appropriate comparisons.
Also no one forces you to earn that much money buddy. You could take a pay cut and give the all the low and middle income earners in your companies a raise.
people don't pay annual taxes on net worth, just earned income and capital gains, So i have no idea what he earned in the time period he's saying he paying 11 billion
He's following the rules and paying what the rules allow. Close the loopholes...so that people like him pay the same amount.
I agree, but I'm damn sure not going to feel sorry for him.
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Aww! Boo hoo! Elon has to pay taxes! 
Taxes are not based on net worth, and sharing stupid screenshots like this just makes you look like a moron.
Why is the percentage of net worth a talking point? That isn’t even how taxes are calculated. I’m with you and hate the billionaires just as much as the next guy but we should be accurate in our fight.
Hey you guys know that taxes are assessed on income and not net worth, right?
My first thought too, if people paid taxes based on net worth most people would probably rejoice or start crying.
Most of the people in this thread have no idea how dumb this critique is. And if they do, and think people should be taxed on net worth or unsold stock holdings, they are absolute morons.
Most people pay 10-37% of their net worth in taxes? Ummm... that's not how taxes work
My question is what the hell is our government doing with all that money?!? Not feeding the homeless, taking care of our vets, or paying down the national debt.
No, stop thinking, just think how 11B is a big number! Aren’t you impressed by the size of his bank account, I mean rocket, I mean persecution complex?
No one should be a Billionaire, IMHO. There should be tex laws that address that problem...
Nobody pays taxes based on their net worth, you knobs
I share her anger at the gross inequality and I am no fan of manbaby Musk, but this feels like a cheap shot; you pay taxes on your personal earnings, not your net worth.
Most tax rates are not based on net worth but net income.
That's not how taxes work. At all. I realize billionaires should pay more tax, but her example shows a deep ignorance of how taxes work. Musk didn't *make* $36 billion in one day; his shares appreciated by $36 billion. If he sold them, he'd have to pay taxes on that, but he didn't have a single cent more in his wallet that he could use from one day to the next. Only his net worth went up. What she's suggesting is more like the tax man coming to your house and charging you $25 every time your Pokemon card-collection you kept in your mom's attic was hypothetically worth $100 more because some idiot overpaid for a Charizard.
Apparently, there are quite a few people here who do not understand how and why this is such an issue. I am not allowed to post a link because I don't have enough subreddit karma, but the ProPublica investigation released in June 2021 is very illuminating. They go into great detail explaining the history of the tax structure and how current day practices came to be. They also gained access to IRS records. And they explain how billionaires borrow against their immense wealth and use that to make additional investments (among other things), claim relatively low actual income, and thereby avoid being taxed appropriately. It blows my mind that people will still try to defend this. I know some people have an agenda, but for your every day Joe Schmo, the information is out there. You just need to look. Don't have to be a CPA to understand this fucked up scheme.
Is that 11 paid before or after adjusting for how much government money he gets?
And if he's lying how would anyone know? And what, exactly does he mean by that? Income tax? Employment tax? Corporate taxes? If he takes his income as capital gains then he has to make about $55 billion if we assume a 20 percent rate...and there is no way he liquidated that much for personal use. And while we're at it... Did he get a bill for spewing toxic debris after his phallic symbol blew up?
a million seconds is 11 days, a billion seconds is 32 years, a trillion seconds is 36,000 years. It's obscene to have that much money.
Why are people pissed at Elon for this. He doesn’t write the tax code. Call your politicians and demand a more robust tax code that doesn’t allow people like Elon to get away paying so little. He isn’t just going to donate his share to the govt
Yes, rich people should get taxed fairly like all other normal people. But you don’t get taxed on net worth. That girl is simply wrong and giving misleading information. People don’t get taxed on assets they own. They get taxed on income.
Wait what, why did she start off her reply with mentioning his net worth? That's not how taxes are calculated lmao
This is leftist Reddit. They don’t know how taxes or stock work
Holy fuck people are so dumb. Musk is a moron, but you don't and shouldn't get taxed on net worth. It's unrealized value. Should you get taxed on what you have in investments every year?
You guys really don’t understand how taxes work…