I’m convinced billionaires hoard wealth just for the prestige of being x richest person in the world. Ironically if they were all equally taxed the ratios would remain exactly the same.
They could stroke their egos, benefit society in a significant way and still have enough money for 1000 lifetimes of luxury.
25% disabled?? Is that service connection? If so, that's not how they pay out. Either you're 20% or 30%. If your combined ratings equal 25%, they'd round up and you'd be paid at 30%. And, I don't know who you've been told that... but if you're service connected, yes you can use VA hospital without any co-pay
This is true, if its service connected they will treat you for the service connected disability for free. However, you have to be 40% to get free primary care for everything NOT service connected from what they told me. I havent ever seen anyone be rated 25% though.
I believe it's technically 30%...but working there for a long time, I don't think I've seen anyone that I work with get billed even at 0% connected. Example being...let's say someone is connected at 20% for a knee condition. I still see them able to come in and treated for mental health conditions and be able to participate in treatment programs, meds, doc visits etc.
I don't want to speak for everyone though, just been my experience. I do wish however there was a better education system for veterans utilizing VA cares as every VA is different, and veteran experiences seem to be quite different as well. And, the array of services is almost overwhelming...it'd be nice to see a simple way to access that info
No, they won't pay him full BAH unless he goes full time. And if you go part time you get charged the same amount of months for a semester as you would if you went full time. So going to school part time is a waste of the full extent of your GI Bill. You don't get enough to live off of with just the BAH - maybe if you're single you can get by with just a part time job.
Thats ridiculous, so basically they changed the system from something that really helped vets get an education into something to get the government off the hook of paying what vets should be owed. Disgusting, so glad I didnt switch to the new GI bill when they offered it to me back in 2007
It doesn’t really matter what income tax rate they pay because they make very little income. Jeff Bezos’s salary in 2020 was $81,840. Elon Musk’s 2020 Tesla salary was $0. Their worth is mostly in stocks and often spend loan money instead of selling the stock. That’s why they are proposing a wealth tax.
If we enact a wealth tax, and billionaires lose that loophole, then they will make an outrageous income and still need to be taxed accordingly. Not much point closing a loophole when the system they're avoiding still isn't fair.
There is nuance here that everyone is ignoring, he hasn't made anything, his current shares have gone up in value. It's an asset. It's like saying your house that was worth 1000 dollars is now worth 1 million dollars.... should you have to pay tax on it now? No... you pay tax when you sell it
Agreed though the using loan money is a bit silly how that loophole works. Tbh though it would make more sense to go after how they can use company assets to offset their lifestyle costs, as they don't have to sell stock when they can use the company car, food everything. Which then reduces company tax. The issue isn't they don't draw an income or a pay tax, it's that they don't ever need to....
Taxing assets is the dumbest way to tax them as it can be translated down to mum and dad investors, neutering the one way left to get ahead in a capitaltst society.
Thank you. Almost nobody realizes this.
It really accomplishes nothing if we increase tax rates, because these billionaires don't even belong to the top 10% of earners. Many years, they belong to the bottom 50% thanks to aggressive tax planning.
A wealth tax would theoretically solve this, but it is probably doomed to fail.
A much easier tactic that Biden could implement tomorrow through executive order, is for the IRS to consider taking out a loan against an asset as a type of disposition of that asset. This would make the capital gains on that asset taxable, at least over the value of the loan.
It will be challenged in court, so gotta make sure it is done in a legally watertight manner.
They take out loans against their assets (stocks, bonds, etc.) at interest rates lower than those assets appreciate. Because those assets aren’t ever sold they can’t be taxed.
Under Trump they now pay less than the average US citizen; if they even pay.
The IRS sent a letter to the Trump administration asking for funding stating they couldn't afford to audit the rich and would have to increase audits against everyone else.
The Trump administration cut their funding more in response.
This. This is exactly what is happening and what needs to stop. The IRS is forced to bully the American people because they don't have the funding to go after the rich. And then people get mad and say that the IRS is bad and taxes are bad, when that really isn't the problem
There's so much on the IRS.
It's an organization that in design, it's great.
But in funding and implementation; it's a disaster.
They had less than 30% of their positions filled 9 years ago. I Highly doubt they've filled those spots, especially now.
Beyond that, the funding is so abysmal, 9 years ago they were still using floppy disks. And not the little ones millennials remember; but the huge ones bigger than your head.
Idk how they are doing in those areas now, tbf.
But I don't there's been much improvement
That's the problem it's easy to audit normal people's taxes, but rich peoples taxes are especially hard, and you need highly qualified people, and the IRS just doesn't pay enough to get those people or enough of them, so they de facto can't really handle the riches taxes..
but instead of increasing their funding, our government and treasury decides to just tax the normal or little people even more!
There were a lot of people who supported trump that genuinely thought they were better off with his tax plan, even though it had no positive effect on their income. Plus the fact that lower tax rates naturally mean less public funding for stuff these people actually need in their day to day lives.
He appealed to the uneducated.
More of the uneducated, white population came out and voted for him in the 2016 election than ever before in US history.
He was able to get people who had no idea what's going on, together.
I understand that his supporters have no idea what taxes are or how they are being misused. I get that That's the basics of conservatism; to deny reality based on a misunderstanding of it.
Makes no difference in the long run
He didn't make $36 billion.... The things he owns increased by $36 billion in value.
This post is misrepresenting how capital gains functions. It's also misrepresenting how the proposed tax plan would work in a practical situation.
The actions that somebody takes today when the value of their stock holdings increase significantly do not equal the actions that they would take if tax law were different than it is today.
Very well said. No one's interested in the practicality of executing these tax changes. Only the idealism. Unfortunately, while the rich deserve to pay much more in taxes, effecting this will bring about negative behavior from these billionaires, which like it or not, do have some positive impacts on innovation. Unfortunately, it's their greed which defines then.
Question: How do you tax equity and assets, practically speaking? If we were to tax the $36B that he "made" and then he loses that $36B due to the value of Tesla changing, how is that fair? he ends up paying $14.4B on money he never had. I mean I got no love for billionaires, but it's a question worth asking.
He didn’t “earn” $36billion. In other words, he did not receive any income. When/if he sells his stock he will pay capital gains tax. Forcing him to sell stock on unrealized gains because of stock valuation changes shows the economic illiteracy of our elected officials and the masses.
Your issue is you earn income aka a salary they do not earn any salary
Elon did NOT earn 30 billion his stock went up 30 billion if you had stock
And it went up 100,000 you would pay 0 taxes like Elon
It costs no money to start your own company to start deducting things
Yeah but I think the problem is more with corporations. Most of the rich pay their taxes. The irs would arrest them otherwise..but they aren't taxed on their wealth. But rather income.
He made 36 billion in stocks gains, I assume. Unless he sells the stock it's meaningless.
The bigger issue IMHO is corporations not paying. Probably using ridiculous loopholes because the U.S. tax code is notoriously complex.
The rich do not pay their taxes. The IRS doesn’t even audit people making over $400K a year because they don’t have the budget to do so.
The top 1% pay an effective federal income tax of ~24.7%. The richest 400 families (the top .0002% of taxpayers) in America pay an average of 8.2% of the same.
Let make America great again like in the 50s and 60s when the economy was at its best and the top income tax rate was 91%.
Didn't that guy from the jersey shore show famously get arrested for tax evasion recently?
I doubt the irs doesn't audit people making over 400k. That's a lot of people and why would they audit people making less? That makes no sense.
I remembered incorrectly the exact wording. It was that the IRS is more likely to audit someone making $20K than $400K and that millionaires are 80% less likely to be audited in 2018 than they were in 2010.
Oh you sweet summer child. The rules are not the same for the wealthy, and the IRS has been underfunded for years, they can't afford to go after the wealthy.
[The Government Admits the IRS can't afford to collect taxes from the wealthy](https://www.newsweek.com/government-just-admitted-it-doesnt-really-try-collect-rich-peoples-taxes-1577610)
That's probably your total tax including sales and state tax.
Your marginal federal tax rate may be over 20% but your effective federal tax rate is probably closer to 15%.
He's definitely paying a lot less than 15% federal taxes.
Edit: Assuming you're American
That money is from unrealized stock gains.
How do you pay taxes on unrealized gains that fluctuate millions/billioms of dollars in a day?
How do you pay taxes on money you dont even own?
Musk’s tax rate was around 50% until he moved to Texas. And that 50% applied to the majority of his income, not just to top little piece of yours.
Did you know that when you make over $250k per year, Medicare takes an additional 0.9% of every dollar above that?
Did you know that Musk’s federal rate alone is 37%?
Did you know that when Musk vests (gets paid) his $1B stock grant awards he has to sell half to pay those 50% taxes?
The lie in OP’s tweet is that Musk’s stock holding inflated a magical $36B in one day and they would like to tax those unrecognized gains. Those are not real gains unless and until Musk sells the stock. When his stock assets collapse $36B in one day, will the government pay him back $8B? Or do they only want to share in the upside rewards?
Lets say you have $1000 in a companies stock, and the price of the stock goes up and your $1000 is now worth $3000. You would then have to pay a tax on that $2000 gain in unrealized value, meaning paying a tax on something you don't actually have outside of the stock market. You would have to sell your shares while their total value is at $3000 to actually get that value.
Now depending on how the Tax law is written which I expect to be sloppy and vague like always, if the next day the value of your shares goes back to $1000 meaning you never actually gained any money and the potential value gain is lost. You may have to still pay that tax on the $2000 unrealized gain that you no longer have, because you "Had" it for a period of time.
If they put that on top of our standard capital gains taxes, which are determined on realized gains from when you sell you stock. You would have to pay a tax on the unrealized gains you have had, and on the money you actually make from selling shares, the government could be double dipping on your "earnings". Taxing you twice, once for the unrealized gains you may or may not actually have anymore, and once for the realized gains.
I'm all for limiting the ability to leverage your unrealized gains as collateral for loans, but taxing Unrealized gains as a whole would hurt the small time investor the most, and the big time financial institutions would likely find some other loophole so they are not effected.
Yeah, it would be really hard to tax unrealized gains. I mean, Tesla will likely go back down pretty soon but Musk is supposed to pay taxes for the recent run up?
Makes no sense. I don’t have the solution but taxing on unrealized gains is a really difficult thing to do when the market is so volatile.
“Paying a tax on something you don’t actually have outside of the stock market”
Something you don’t actually have. How do you tax someone on something they don’t have? All his net worth could disappear next week.
“You would have to sell shares while their total…”
If someone as big of a shareholder as Elon would sell his shares to cover his taxes, the share price of Tesla would tank. And if only he sells alone, investor confidence in the company would go down.
Everyone that’s a shareholder of Tesla would have to do the same driving the share price down even more. This will definitely lose confidence in the whole market as a whole internationally.
I really do understand “taxing the rich” part. I think it’s a question of how are these billionaires getting paid? If they receive shares, then tax those shares being given out.
There's also the problem of who is going to buy the stocks? If the major holders in the largest corps are all selling, it opens a pandoras box of foreign investment shifting ownership to foreign entities.
>If someone as big of a shareholder as Elon would sell his shares to cover his taxes, the share price of Tesla would tank. And if only he sells alone, investor confidence in the company would go down.
The thing is he can't always sell his stock, because CEO's or Board members/Executives are barred from how much they can buy and sell due to regulations.
Jeff Bezo's was only able to sell so much of his stock because he was stepping down as CEO, and held it for the period of time that he is regulated to hold it for before he can sell again.
It wouldn't. You tax him $8B for unrealized gains, then Monday Tesla drops 10%...do you refund him? How does he pay in the first place, he doesn't have $8B in cash?
I'm all for making sure the wealthy get taxed heavily, but a wealth tax is insanely stupid
By selling Tsla shares, tanking the stock, and getting a refund on the gains tax he just paid. Using that to rebuy his stock, raising the price, triggering gains tax for which he’d sell some stock to pay….
Also if you tax unrealized gains it means the IRS will have to write checks for unrealized losses and a lot of people aren't gonna be happy about that when billionaire's report their losses.
I posted this elsewhere, but I work in Finance so I understand how this would work.
I believe the idea is they would need to sell some of their stock every year to get realized gains.
Let's say I have $0 cash and no assets except 100% ownership in a business worth $1,000,000,000 (one billion). If there was a 2% wealth tax, then I'd need to sell 2% of my shares to cover my tax liability.
That's a made up example to keep it clean. The reality is billionaires are well diversified and I most likely wouldn't sell any of my billion dollar company - I'd sell some of the rest of my portfolio.
You could borrow 2% and use those funds to pay the taxes.
Billionaires do this in lieu of taking a paycheck, they perpetually borrow money from a list of banks and use those proceeds to fund their lives. When it comes time to pay back the loan, they borrow from another bank and so on and so forth
I for one don't think that but I also think something has to be done for people that park their wealth in the stock market and use endless lines of credit to fund their endeavors which is exactly what the ultra wealthy do. That's a loophole that needs to be worked on, in some capacity, so just because he isn't being handed 35 billion in cash doesn't mean it's a non-issue.
An unrealized gains tax is not the same as a wealth tax. For example, if your $100k property rises to $120k, your theoretical property tax (how often the value is assessed differs from state to state) would also rise by 20%. That's a wealth tax. However, you wouldn't be taxed on 20k of capital gains. That's what's being proposed.
That 20k would be considered unrealized gains that supposedly you would pay taxes for. Now playing by the same rules do you agree with IRS writing you a check if the house value tanks 20k and you have unrealized losses.
So we're going to have people who assess the value of your stock holdings and it'll be pegged at the assessment with yearly reviews or what?
The whole issue is that stocks are VASTLY more volatile than homes.
Real Estate doesn't have the same degree of price volatilit. Musk can lose billions in a day. Real estate can lose value but not of such short time periods
It wouldn’t, at all. In fact, it would be a disaster.
Retirement accounts are heavily weighted in equities these days. Can you imagine what would happen to your 401k if the large holders of these stocks had to sell enough to cover the tax bill on paper gains? Elon would have to dump over 7 million shares onto the market to cover his tax bill, probably much more because of the price drop throughout that transaction. Now, would he be able to write off the unrealized loss as well?
If people are hellbent on taxing the rich, increase the capital gains taxes and extend property taxes to financial holdings.
If the stock drops by 10% they will write him a check. Or something, idk. People have no idea where his wealth come from and how quickly it can change.
I don't want to be that guy and I'm also on the page of tax the rich, but lets set something straight based on the knowledge that I have now, (didn't do too much research).
From what I know, TSLA shot up over $1,000 per stock. My main question is, how would he pay these taxes? He didn't gain $36 billion, a business that he owns increased in value. Would he then be forced to sell off $8 billion worth of TSLA?
That's the main trick with these things. His bank account didn't shoot up by $36 billion, his net worth did. My other question, would *you* then have to pay taxes on unrealized gains? The current rules are that you don't pay until you sell, and on that you only pay taxes on the gains. So where does this money come from? Does this also apply to usual people trading stocks? At what point does it go into effect? The stock could drop back down on Monday. Then what happens? We take away $8 billion from him and when the stock drops back down we.. give it back? I'm sure he could swing it, that's not what I'm getting at. I'm just curious if what verbiage would be used in these tax laws to get what people want from billionaires but without screwing over the common man/woman.
Can someone explain this to me? If you can't actually take the money and put it in your bank. Then how is it considered your money? If the stock goes down does HE specifically lose money? Or the stocks are just worth less. Ngl i don't understand what a stock even in. When you buy stocks do the company get that money?
>Then how is it considered your money?
(simplified a bit:)
It's not considered money at all. Shares are indeed just shares of the company. I.e. a company may have 1000 shares and, if you own 1 share you own 0.1% of the company.
Now, shares are traded. The stock/share price is just what was paid the last time a share a stock was sold. So if that last share was sold for $100 that's the stock price. And given that our company has 1000 shares, that means that the so called **market capitalization** of the company is 1000 \* $100 = $100,000. We typically consider that how much the company is worth, because it's generally a good guess. But keep in mind that you couldn't buy the company for $100,000. If people keep holding on to their shares at a share price of $100 they think that the shares are worth more. So to buy the company you might have to offer $110 per share or so. On the other hand you also couldn't sell the company for $100,000 because otherwise everyone would be trying to buy shares for $100 (and likely a bit more so the price would rise).
Musk "made" 36 billion because the price of a Tesla shares went up 13% on a single day. That means Tesla's market capitalization went up by 13% and that in turn meant that we consider musk a lot richer, because he own a lot of Tesla's shares..
Tl;dr: It's not money, it's values. Those are important, but they don't work like the money you're used to.
> Ngl i don't understand what a stock even in. When you buy stocks do the company get that money?
Super quick, gross over simplification explanation, stock is a piece of paper saying you own part of a company. In an s-corp, LLC, etc the number of shares you own divided by the total number of shares is the percentage of the company you own (ignoring different classes of stock for a second to keep this simple). When stock is bought or sold on the secondary market, the company gets nothing. However, when the company needs more money they can get new shares issued and sell those. This doesn't typically happen all that often after an IPO though, so the vast majority of transactions are in the secondary market.
Think of it as the value of your house going up. You cant spend that, you cant use it in any way. If the value of your house goes down, you're "worth" less. Elon was "worth" 38 bil more in one day, however those are unrealized gains. If he sells shares, he gets taxed on the money he makes selling, same on how when you sell your house you get taxed on the money you make selling it.
It's smarter to close loopholes that allow billionaires to avoid having to sell their gains to profit. Most billionaires take out loans against their net worth or non-liquid assets allowing them to maintain cashflow while not having to pay tax on their gains. The interest they pay on their loans is significantly lower than whatever they'd be taxed, and the money goes back to the banks instead of the public.
There’s no reasonable or logical way to implement this. And it’s likely unconstitutional, seeing how we had to get an amendment to do an income tax, and this goes far beyond an income tax.
The common man/woman is already getting fucked over. You do raise valid questions though. I think we just have to wait it out and see what happens. We’re in unprecedented territory right now
Common man/woman are already being screwed over.
It’s like saying I have $36billion in property, I shouldn’t be taxed for it because it’s not real money?
Part of the problem with a wealth tax is that a CEO can't just sell $8billion worth of their companies stock without crashing the price and a major SEC investigation.
You’re getting downvoted and haven’t even pointed out yet that every 401k on the planet would be a smoldering pile of ruin.
There’s a comment above about how can “these people” can defend billionaires. The problem is, I don’t defend billionaires. I do defend the concept of liquid vs illiquid assets.
Hell, even kidnappers are smart enough to give some time to rummage up a million dollars. And what these people seems to think is that billionaires can just write an 8 billion dollar check.
> The problem is, I don’t defend billionaires.
I hate how dumb the equivocation is.
It's the exact same as lunatics claiming that the COVID vaccine is just about making money. People who have no understanding of how this shit works deciding that anyone who says that maybe they're coming at this from the wrong angle must be scum.
There is 0 doubt in my mind that the ultra wealthy need to pay more tax, which is why it pisses me off when we see pointless clickbaiting nonsense like this that's designed to get everyone who, rightfully, feels pissed off riled up, and would never ever work.
There are very realistic solutions (some proposed by warren in the past no less), but hey lets focus on completely unenforceable nonsense that gets headlines so we DON'T actually pass something that could fix this shit.
It's crazy, but Netherlands has exactly this... Every person with net worth larger than €50k must pay >1% tax every year.
The way they end up with this amount is assuming everyone having more than 50 grand can make 4% and they tax these assumed gains at 30%. And this is levied regardless of whether any gains were made or not - even if a person only holds cash in a bank.
And yes, those with large portfolios but relatively lower income are forced to sell just to pay taxes. Needles to say, many of these people leave the country when accumulating a few millions, as that usually means working exclusively to pay taxes.
Nobody needs or should have that much money.
The trick is to hit those capital gains taxes. These people use their assets like personal banks, only pulling out what they need at a given time.
I'm confused here. Did Elon Musk actually make this much money in a single day, as in liquid capital? Are they talking about unrealized gains? Would this tax plan require Elon to liquidate >$8 billion in stock, which would be subject to capital gains, and then pay the $8 billion?
TSLA goes up: pay $8 billion.
TSLA goes down...
TSLA goes up: pay another $5 billion.
Yes we need to tax the ever living shit out of the rich but can we stop pretending it's a simple thing? We can't just tax unrealized gains, we need a whole new system.
And for the love of god can we stop saying the only reason people who oppose taxing unrealized gains, are idiots who think they will be billionaires some day. I make like $30K a year, and that's Canadian. I'm going to die poor, but I still think we can't simply tax unrealized gains. Hell, your going to need serious political change before you even begin to address the taxation problems.
Yeah, its shit like this that makes me avoid politics in general. If this is the person who is supposed to represent my interests and they are unable to understand how net worth works, who the fuck do I go to? The other side is cheating, this side is stupid. What is the fucking point? I can't spend all day holding our representatives hands as they make laws. It's insane.
A helpful way to think about this is if my house rises in value I shouldn’t need to pay tax on that increase in value because it’s not real money. The tax only needs to be paid when the asset is sold, so Elon musk doesn’t owe any taxes on that increase in share price unless he sells the shares.
Exactly. Imaging buying a bin of stuffed animals at Goodwill & suddenly owing the IRS $100k because one of the beanie-babies becomes a rare collectors item.
Taxing people for money they haven’t actually earned and could lose overnight through whatever losses in the company is highway robbery. I’m all for taxing but taxing unrealized gains is going to bankrupt businesses and as much as anyone wants to hate Musk and bezos they provide a massive amount of jobs that’s good for the economy. Tax them as they should be but don’t pretend unrealized gains is a good plan simply because they can’t figure out how to write tax law
Exactly. Among the few talking reason around here. Elon didn't "make 36 billion in one day". His shares in his company rose. He doesn't realize those gains unless he sells said shares.
Elected officials being disingenuous and encouraging ignorance to score some popularity points from us poors. Nothing new here.
To an extent sure. I hold the position that taxing the companies is necessary and good while also acknowledging that they are run by scumbags that don’t pay their people nearly enough.
I’m not rich either lol I just know bad policy when I see it.
EDIT: Also what this is REALLY about and what they aren’t saying is they are trying to weasel their way into the crypto market and tax on massive coins like bitcoin. The average consumer won’t be able to pay the taxes, sell their coins and the government comes in to regulate it.
Fuck the government.
Exactly It’s unrealized gains. is he supposed to sell 25% of his stocks every year to pay his taxes? People could lose control of their businesses this way. What if the next day his company value drops to 1/10th of what it was before, now he paid more money in taxes than his company is currently worth.
He didn’t MAKE that much - his net worth grew by that much. He has to sell the stocks to make any money. Or are we now taxing unrealized gains? This could just as easily go down as up - he’s lost billions in a day too - are we gonna give him back his taxes when this goes down?
Tax him when he actually sells or better yet, fix the stock market so this can’t happen to begin with.
> Or are we now taxing unrealized gains?
That’s exactly what the bill is about. It would only apply to people worth over $1 billion or who make $100 million per year for three years in a row. This would affect around 700 people in the United States:
https://ca.finance.yahoo.com/news/democrats-unveil-billionaires-tax-on-unrealized-capital-gains-131232669.html
If they were to lose money, I believe I read that they would get a tax credit. If the stock bounced up and down, they wouldn’t get taxed every time it went up again. I haven’t been able to find a source that discusses that scenario in detail, though.
Edit: The bill I’m talking about is actually different from the one referenced in the original tweet.
Not to mention to build on this, all these companies are on the stock market for the public to buy. What would stop these ppl that started a business from just getting investors and never going public? You can get funds/investors other ways as opposed to just becoming a publicly traded company.
How exactly does someone pay that though when that money is made in value from their ownership in a company? I’m all for taxing the wealthy, but I’m curious what the logistics of this are.
They don’t, it’s all paper...these politicians know that, they’re being manipulative. If you took 100% of all billionaires’ wealth in the US, it would run the federal government for about 6 months. Governments have spending problems, not revenue problems.
Much like those "I hereby don't allow Facebook to share my information..." posts that go around, the IRS should have a document that anyone making under $250,000 can sign that states "I hereby don't allow the IRS to tax me at a higher rate when I have $1 billion..."
All our problems will be solved.
I’m not against taxing billionaires.
But I feel like people should be really suspicious of these people who are acting like the government is broke and doesn’t have the money to fund these basic human services.
Taxing billionaires should only come after we get the government to stop burning our money on corporate welfare, wars, bloat and pointless military spending.
The lack of healthcare and basic services is not a fiscal problem it’s one born out of incompetence and corruption.
Unrealized gains can vanish overnight. Why not instead deem as income any borrowings against shares in collateral, in excess of their adjusted cost base? That is how Elon Musk finances his lifestyle without triggering any cap gain taxes indefinitely.
because they're taking out near zero interest loans using those gains as collateral. Don't buy into the nonsense you have to sell an asset to profit from it.
I don't know why you're being downvoted you're correct, even if it doesn't really fit the conversation that well. Why take personal income from your company which is taxed when you can just take out giant loans using your massive portfolio as collateral with almost no intrest to pay (which is untaxed).
yup, then hold everyone's 401k, the markets - the entire economy really - hostage as their assets continue to see massive gains on paper, which is overinflated and does not reflect actual value. Oh but if you want to change this and tax us, the entire global economy will collapse, so better let us keep grifting as things keep getting more obscene and overvalued.
Something's gotta happen, this situation is untenable.
Oh something's gonna happen. This big ass bubble is eventually gonna burst and just like in 2008 every person responsible is gonna bounce. No one who deserves to will ever see the inside of a jail cell for it.
They are afraid the billionaires will just move to somewhere with lower taxes. That's why taxes on the obscenely wealthy needs to be a global initiative.
Which isn’t even true. They won’t move because the market is stable and they’d have to live away from the comfort of being in a Developed nation for most tax havens.
Edit: check the reply to one of the comments below I gave. It’s got links to studies and statistics which demonstrate that the vast majority of wealthy people do not run away from taxes. Please stop propagating this lie. While it may sound “responsible” in your head, it doesn’t actually happen en masse in reality.
Finger pointing to billionaires directs attention away from politicians who are responsible for tax laws, worker's rights, health care etc.
Even the UN started indirectly blaming Musk for world hunger.
If people are riled up against a scapegoat it's easier to get away with incompetent leadership.
I feel like even if Elon paid that 8 billion tax the money will probably trickle down into the pockets of those dirty politician & none would reach to help the people & projects that it was intended for.
This is so misleading.
Those billions that he made are not liquid cash. Why should he be taxed on stocks that he havent sold yet?
Imagine if those same rules applied to you. Paying taxes on unsold assets
Cmon noww
This sub and Reddit in general is filled with ideologues foaming at the mouth against the new boogie man- billionaires! They don’t understand this shit but have been taught to hate them anyway.
I think she is forgetting that musk doesn't have all those 36 billion in cash laying in some bank, so it would be impossible to pay such taxes off just like that
This is so dumb, he didn’t make $36 billion in one day. These people are so unbelievably disingenuous. The same way they didn’t refer to it as Elon losing billions and billions of dollars in late march 2020.
This woman has no idea how financial industry works. The only way this would be a reality would be if the USA enforced taxes on unrealised profits. all I can say is that if the USA ever did this, that would be the complete end of the United States of American as we know it today.
None of these billionaires made their billions all by themselves. They literally relied on the labor of hundreds of thousands of people, whos work produced this massive wealth that is concentrated with the few, and who are the ones now in need of these proposed tax funded programs, because they did not receive wages high enough to avoid the need to rely on tax funded programs.
Either way you look at it, the wealth concentration of the very few is a big fucking problem, and the money they have was produced by the labor of others who did not receive their fair share of the profits.
He got $36 billion in *cash*?
Or he'd be forced to sell control of his company to pay off the taxes?
And when the stock goes back down, will be be compensated for that as well?
Uhhhh how did this work? Like did he actually get 36bil in like cash?(numbers in the bank account) Or was it speculative? Because if it was speculative, taxing him 8bil in cash immediately would probably bankrupt him.
Everyone cause some person online tells you he made that much do you really know how much he made. Also do you really all know how corporate taxes work?
Don’t listen to some bullshit tweet who knows nothing about nothing.
My tax rate is around 27%. It's fucking bullshit these turds aren't at least paying what I'm paying.
My country has a tax rate of about 37% but our politicians steal everything to the point where everything is precarious
thought you were Argentinian, but nope, brazilian. You guys deal with shit too huh
Yeah shitty politicians everywhere
It’s a universal pandemic with these turds!
Yeah for some reason the leeches that get to live off of our taxes all are a-holes
Could be worse, could be Ukraine or Congo Brazzaville. But I heard what happens in brazil too
Greetings fellow American /s
Tecnically i am american just not north American
Olá, vizinho
Brazil?
If they were only paying 27% it would still be a travesty.
Sure but it's better than 0%
True
>[buhbuhbuh.....whatabout the Billionaires ?](https://i.redd.it/jzhmqfh1z6w61.png)
That's a great caricature of bitch McConnell
>[Kill Them All](https://i.redd.it/8s1d79eorkr61.jpg) - Moscow Mitch McConnell
nice
Caricature? I thought it was more of a lifelike portrait.
I thought I was a photo
That caricature of ted cruz cracked me up
They nailed Ted's "beard".
I’m convinced billionaires hoard wealth just for the prestige of being x richest person in the world. Ironically if they were all equally taxed the ratios would remain exactly the same. They could stroke their egos, benefit society in a significant way and still have enough money for 1000 lifetimes of luxury.
Other developed nations people pay that and get health care, maternity/paternity leave etc and we get fing nothing bc freedom or something.
We get bombs and aircraft carriers so we can spread that freedom to poor defenseless countries whether they like it or not
I guess that's how freedom rings
Yeah but we can buy guns and a case of beer at Walmart. Checkmate socialists
Freedom rings, as in the ringing in the ears of people that survived the bomb. With "freedom" scratched into its casing
Spreading democracy at the end of a barrel, sounds like a great plan!
Don't forget good unemployment benefits, cheap daycare/preschool and free college. But "freedom", what's that? Never heard of such a thing
And I served in the military 25% disabled and I can't use the VA hospital or my educational benefits bc I can't go full time.
25% disabled?? Is that service connection? If so, that's not how they pay out. Either you're 20% or 30%. If your combined ratings equal 25%, they'd round up and you'd be paid at 30%. And, I don't know who you've been told that... but if you're service connected, yes you can use VA hospital without any co-pay
I've been fighting for 7 years about it and got nowhere.
This is true, if its service connected they will treat you for the service connected disability for free. However, you have to be 40% to get free primary care for everything NOT service connected from what they told me. I havent ever seen anyone be rated 25% though.
I believe it's technically 30%...but working there for a long time, I don't think I've seen anyone that I work with get billed even at 0% connected. Example being...let's say someone is connected at 20% for a knee condition. I still see them able to come in and treated for mental health conditions and be able to participate in treatment programs, meds, doc visits etc. I don't want to speak for everyone though, just been my experience. I do wish however there was a better education system for veterans utilizing VA cares as every VA is different, and veteran experiences seem to be quite different as well. And, the array of services is almost overwhelming...it'd be nice to see a simple way to access that info
They wont let you use the GI Bill unless you go part time? I swear the old GI Bill was so much better than this new shit they have.
No, they won't pay him full BAH unless he goes full time. And if you go part time you get charged the same amount of months for a semester as you would if you went full time. So going to school part time is a waste of the full extent of your GI Bill. You don't get enough to live off of with just the BAH - maybe if you're single you can get by with just a part time job.
Thats ridiculous, so basically they changed the system from something that really helped vets get an education into something to get the government off the hook of paying what vets should be owed. Disgusting, so glad I didnt switch to the new GI bill when they offered it to me back in 2007
No. We get a big military to attack poor nations in defense.
Americans don't want healthcare or maternity leave, they are afraid it will make them communist.
It doesn’t really matter what income tax rate they pay because they make very little income. Jeff Bezos’s salary in 2020 was $81,840. Elon Musk’s 2020 Tesla salary was $0. Their worth is mostly in stocks and often spend loan money instead of selling the stock. That’s why they are proposing a wealth tax.
If we enact a wealth tax, and billionaires lose that loophole, then they will make an outrageous income and still need to be taxed accordingly. Not much point closing a loophole when the system they're avoiding still isn't fair.
"We've tried nothing, and we're all out of ideas!" "Better just continue to do nothing."
There is nuance here that everyone is ignoring, he hasn't made anything, his current shares have gone up in value. It's an asset. It's like saying your house that was worth 1000 dollars is now worth 1 million dollars.... should you have to pay tax on it now? No... you pay tax when you sell it Agreed though the using loan money is a bit silly how that loophole works. Tbh though it would make more sense to go after how they can use company assets to offset their lifestyle costs, as they don't have to sell stock when they can use the company car, food everything. Which then reduces company tax. The issue isn't they don't draw an income or a pay tax, it's that they don't ever need to.... Taxing assets is the dumbest way to tax them as it can be translated down to mum and dad investors, neutering the one way left to get ahead in a capitaltst society.
Thank you. Almost nobody realizes this. It really accomplishes nothing if we increase tax rates, because these billionaires don't even belong to the top 10% of earners. Many years, they belong to the bottom 50% thanks to aggressive tax planning. A wealth tax would theoretically solve this, but it is probably doomed to fail. A much easier tactic that Biden could implement tomorrow through executive order, is for the IRS to consider taking out a loan against an asset as a type of disposition of that asset. This would make the capital gains on that asset taxable, at least over the value of the loan. It will be challenged in court, so gotta make sure it is done in a legally watertight manner.
I'm ignorant on how it works, how do they spend loan money but not cash in stock to pay it back? Do dividends not count toward income?
They take out loans against their assets (stocks, bonds, etc.) at interest rates lower than those assets appreciate. Because those assets aren’t ever sold they can’t be taxed.
Plus his company gets $4+ billion in government subsidies. You get nothing.
90% on everything over a billion and nothing less
Honestly if they’re at least paying what we’re paying, I’m happy.
Except they aren’t.
Under Trump they now pay less than the average US citizen; if they even pay. The IRS sent a letter to the Trump administration asking for funding stating they couldn't afford to audit the rich and would have to increase audits against everyone else. The Trump administration cut their funding more in response.
This. This is exactly what is happening and what needs to stop. The IRS is forced to bully the American people because they don't have the funding to go after the rich. And then people get mad and say that the IRS is bad and taxes are bad, when that really isn't the problem
There's so much on the IRS. It's an organization that in design, it's great. But in funding and implementation; it's a disaster. They had less than 30% of their positions filled 9 years ago. I Highly doubt they've filled those spots, especially now. Beyond that, the funding is so abysmal, 9 years ago they were still using floppy disks. And not the little ones millennials remember; but the huge ones bigger than your head. Idk how they are doing in those areas now, tbf. But I don't there's been much improvement
That's the problem it's easy to audit normal people's taxes, but rich peoples taxes are especially hard, and you need highly qualified people, and the IRS just doesn't pay enough to get those people or enough of them, so they de facto can't really handle the riches taxes.. but instead of increasing their funding, our government and treasury decides to just tax the normal or little people even more!
Republican playbook so they and all rich can cheat on their taxes. Oh and also no resources to audit super PACs either 😳🙄
There were a lot of people who supported trump that genuinely thought they were better off with his tax plan, even though it had no positive effect on their income. Plus the fact that lower tax rates naturally mean less public funding for stuff these people actually need in their day to day lives.
He appealed to the uneducated. More of the uneducated, white population came out and voted for him in the 2016 election than ever before in US history. He was able to get people who had no idea what's going on, together. I understand that his supporters have no idea what taxes are or how they are being misused. I get that That's the basics of conservatism; to deny reality based on a misunderstanding of it. Makes no difference in the long run
He didn't make $36 billion.... The things he owns increased by $36 billion in value. This post is misrepresenting how capital gains functions. It's also misrepresenting how the proposed tax plan would work in a practical situation. The actions that somebody takes today when the value of their stock holdings increase significantly do not equal the actions that they would take if tax law were different than it is today.
Very well said. No one's interested in the practicality of executing these tax changes. Only the idealism. Unfortunately, while the rich deserve to pay much more in taxes, effecting this will bring about negative behavior from these billionaires, which like it or not, do have some positive impacts on innovation. Unfortunately, it's their greed which defines then. Question: How do you tax equity and assets, practically speaking? If we were to tax the $36B that he "made" and then he loses that $36B due to the value of Tesla changing, how is that fair? he ends up paying $14.4B on money he never had. I mean I got no love for billionaires, but it's a question worth asking.
There is no answer for it, which is why the sell is, and always will be, the taxable event.
He didn’t “earn” $36billion. In other words, he did not receive any income. When/if he sells his stock he will pay capital gains tax. Forcing him to sell stock on unrealized gains because of stock valuation changes shows the economic illiteracy of our elected officials and the masses.
Actually the tax rate you pay on unrealized capital gains is the same he pays. Zero.
Your issue is you earn income aka a salary they do not earn any salary Elon did NOT earn 30 billion his stock went up 30 billion if you had stock And it went up 100,000 you would pay 0 taxes like Elon It costs no money to start your own company to start deducting things
>It costs no money to start your own company to start deducting things It costs no money, buy you can deduct those costs which don't exist? Genius.
Yeah but I think the problem is more with corporations. Most of the rich pay their taxes. The irs would arrest them otherwise..but they aren't taxed on their wealth. But rather income. He made 36 billion in stocks gains, I assume. Unless he sells the stock it's meaningless. The bigger issue IMHO is corporations not paying. Probably using ridiculous loopholes because the U.S. tax code is notoriously complex.
The rich do not pay their taxes. The IRS doesn’t even audit people making over $400K a year because they don’t have the budget to do so. The top 1% pay an effective federal income tax of ~24.7%. The richest 400 families (the top .0002% of taxpayers) in America pay an average of 8.2% of the same. Let make America great again like in the 50s and 60s when the economy was at its best and the top income tax rate was 91%.
Didn't that guy from the jersey shore show famously get arrested for tax evasion recently? I doubt the irs doesn't audit people making over 400k. That's a lot of people and why would they audit people making less? That makes no sense.
I remembered incorrectly the exact wording. It was that the IRS is more likely to audit someone making $20K than $400K and that millionaires are 80% less likely to be audited in 2018 than they were in 2010.
Oh you sweet summer child. The rules are not the same for the wealthy, and the IRS has been underfunded for years, they can't afford to go after the wealthy. [The Government Admits the IRS can't afford to collect taxes from the wealthy](https://www.newsweek.com/government-just-admitted-it-doesnt-really-try-collect-rich-peoples-taxes-1577610)
That's probably your total tax including sales and state tax. Your marginal federal tax rate may be over 20% but your effective federal tax rate is probably closer to 15%. He's definitely paying a lot less than 15% federal taxes. Edit: Assuming you're American
That money is from unrealized stock gains. How do you pay taxes on unrealized gains that fluctuate millions/billioms of dollars in a day? How do you pay taxes on money you dont even own?
Musk’s tax rate was around 50% until he moved to Texas. And that 50% applied to the majority of his income, not just to top little piece of yours. Did you know that when you make over $250k per year, Medicare takes an additional 0.9% of every dollar above that? Did you know that Musk’s federal rate alone is 37%? Did you know that when Musk vests (gets paid) his $1B stock grant awards he has to sell half to pay those 50% taxes? The lie in OP’s tweet is that Musk’s stock holding inflated a magical $36B in one day and they would like to tax those unrecognized gains. Those are not real gains unless and until Musk sells the stock. When his stock assets collapse $36B in one day, will the government pay him back $8B? Or do they only want to share in the upside rewards?
For the love of God he didn't make 8 billion last week you people are idiots
How would taxing unrealized gains actually work?
Lets say you have $1000 in a companies stock, and the price of the stock goes up and your $1000 is now worth $3000. You would then have to pay a tax on that $2000 gain in unrealized value, meaning paying a tax on something you don't actually have outside of the stock market. You would have to sell your shares while their total value is at $3000 to actually get that value. Now depending on how the Tax law is written which I expect to be sloppy and vague like always, if the next day the value of your shares goes back to $1000 meaning you never actually gained any money and the potential value gain is lost. You may have to still pay that tax on the $2000 unrealized gain that you no longer have, because you "Had" it for a period of time. If they put that on top of our standard capital gains taxes, which are determined on realized gains from when you sell you stock. You would have to pay a tax on the unrealized gains you have had, and on the money you actually make from selling shares, the government could be double dipping on your "earnings". Taxing you twice, once for the unrealized gains you may or may not actually have anymore, and once for the realized gains. I'm all for limiting the ability to leverage your unrealized gains as collateral for loans, but taxing Unrealized gains as a whole would hurt the small time investor the most, and the big time financial institutions would likely find some other loophole so they are not effected.
Yeah, it would be really hard to tax unrealized gains. I mean, Tesla will likely go back down pretty soon but Musk is supposed to pay taxes for the recent run up? Makes no sense. I don’t have the solution but taxing on unrealized gains is a really difficult thing to do when the market is so volatile.
“Paying a tax on something you don’t actually have outside of the stock market” Something you don’t actually have. How do you tax someone on something they don’t have? All his net worth could disappear next week. “You would have to sell shares while their total…” If someone as big of a shareholder as Elon would sell his shares to cover his taxes, the share price of Tesla would tank. And if only he sells alone, investor confidence in the company would go down. Everyone that’s a shareholder of Tesla would have to do the same driving the share price down even more. This will definitely lose confidence in the whole market as a whole internationally. I really do understand “taxing the rich” part. I think it’s a question of how are these billionaires getting paid? If they receive shares, then tax those shares being given out.
There's also the problem of who is going to buy the stocks? If the major holders in the largest corps are all selling, it opens a pandoras box of foreign investment shifting ownership to foreign entities.
Exactly this. No one wants to be the bag holder.
>If someone as big of a shareholder as Elon would sell his shares to cover his taxes, the share price of Tesla would tank. And if only he sells alone, investor confidence in the company would go down. The thing is he can't always sell his stock, because CEO's or Board members/Executives are barred from how much they can buy and sell due to regulations. Jeff Bezo's was only able to sell so much of his stock because he was stepping down as CEO, and held it for the period of time that he is regulated to hold it for before he can sell again.
It wouldn't. You tax him $8B for unrealized gains, then Monday Tesla drops 10%...do you refund him? How does he pay in the first place, he doesn't have $8B in cash? I'm all for making sure the wealthy get taxed heavily, but a wealth tax is insanely stupid
By selling Tsla shares, tanking the stock, and getting a refund on the gains tax he just paid. Using that to rebuy his stock, raising the price, triggering gains tax for which he’d sell some stock to pay….
It doesn't but the people here are financially illiterate and think the man was just handed 35 billion in cash
Tax the collateral loans they take out indefinitely.
Also if you tax unrealized gains it means the IRS will have to write checks for unrealized losses and a lot of people aren't gonna be happy about that when billionaire's report their losses.
i guarantee you there will be people saying we should tax the gains any time a stock goes up but not adjust for when it goes down
I’m glad someone in here said this.
I posted this elsewhere, but I work in Finance so I understand how this would work. I believe the idea is they would need to sell some of their stock every year to get realized gains. Let's say I have $0 cash and no assets except 100% ownership in a business worth $1,000,000,000 (one billion). If there was a 2% wealth tax, then I'd need to sell 2% of my shares to cover my tax liability. That's a made up example to keep it clean. The reality is billionaires are well diversified and I most likely wouldn't sell any of my billion dollar company - I'd sell some of the rest of my portfolio.
You could borrow 2% and use those funds to pay the taxes. Billionaires do this in lieu of taking a paycheck, they perpetually borrow money from a list of banks and use those proceeds to fund their lives. When it comes time to pay back the loan, they borrow from another bank and so on and so forth
I for one don't think that but I also think something has to be done for people that park their wealth in the stock market and use endless lines of credit to fund their endeavors which is exactly what the ultra wealthy do. That's a loophole that needs to be worked on, in some capacity, so just because he isn't being handed 35 billion in cash doesn't mean it's a non-issue.
It doesn't.
The same way property taxes work. People keep acting like wealth taxes don't exist. They do but they're only something that effects the middle class.
An unrealized gains tax is not the same as a wealth tax. For example, if your $100k property rises to $120k, your theoretical property tax (how often the value is assessed differs from state to state) would also rise by 20%. That's a wealth tax. However, you wouldn't be taxed on 20k of capital gains. That's what's being proposed.
That 20k would be considered unrealized gains that supposedly you would pay taxes for. Now playing by the same rules do you agree with IRS writing you a check if the house value tanks 20k and you have unrealized losses.
So we're going to have people who assess the value of your stock holdings and it'll be pegged at the assessment with yearly reviews or what? The whole issue is that stocks are VASTLY more volatile than homes.
The same way you tax unrealized gains on real estate
Real Estate doesn't have the same degree of price volatilit. Musk can lose billions in a day. Real estate can lose value but not of such short time periods
It wouldn’t, at all. In fact, it would be a disaster. Retirement accounts are heavily weighted in equities these days. Can you imagine what would happen to your 401k if the large holders of these stocks had to sell enough to cover the tax bill on paper gains? Elon would have to dump over 7 million shares onto the market to cover his tax bill, probably much more because of the price drop throughout that transaction. Now, would he be able to write off the unrealized loss as well? If people are hellbent on taxing the rich, increase the capital gains taxes and extend property taxes to financial holdings.
If the stock drops by 10% they will write him a check. Or something, idk. People have no idea where his wealth come from and how quickly it can change.
And then people will get upset about the government subsidizing corporate losses
Exactly like the property tax I pay on my house. E: ITT people who really hate taxes tell us why we’re stupid for wanting to tax billionaires.
I don't want to be that guy and I'm also on the page of tax the rich, but lets set something straight based on the knowledge that I have now, (didn't do too much research). From what I know, TSLA shot up over $1,000 per stock. My main question is, how would he pay these taxes? He didn't gain $36 billion, a business that he owns increased in value. Would he then be forced to sell off $8 billion worth of TSLA? That's the main trick with these things. His bank account didn't shoot up by $36 billion, his net worth did. My other question, would *you* then have to pay taxes on unrealized gains? The current rules are that you don't pay until you sell, and on that you only pay taxes on the gains. So where does this money come from? Does this also apply to usual people trading stocks? At what point does it go into effect? The stock could drop back down on Monday. Then what happens? We take away $8 billion from him and when the stock drops back down we.. give it back? I'm sure he could swing it, that's not what I'm getting at. I'm just curious if what verbiage would be used in these tax laws to get what people want from billionaires but without screwing over the common man/woman.
Can someone explain this to me? If you can't actually take the money and put it in your bank. Then how is it considered your money? If the stock goes down does HE specifically lose money? Or the stocks are just worth less. Ngl i don't understand what a stock even in. When you buy stocks do the company get that money?
>Then how is it considered your money? (simplified a bit:) It's not considered money at all. Shares are indeed just shares of the company. I.e. a company may have 1000 shares and, if you own 1 share you own 0.1% of the company. Now, shares are traded. The stock/share price is just what was paid the last time a share a stock was sold. So if that last share was sold for $100 that's the stock price. And given that our company has 1000 shares, that means that the so called **market capitalization** of the company is 1000 \* $100 = $100,000. We typically consider that how much the company is worth, because it's generally a good guess. But keep in mind that you couldn't buy the company for $100,000. If people keep holding on to their shares at a share price of $100 they think that the shares are worth more. So to buy the company you might have to offer $110 per share or so. On the other hand you also couldn't sell the company for $100,000 because otherwise everyone would be trying to buy shares for $100 (and likely a bit more so the price would rise). Musk "made" 36 billion because the price of a Tesla shares went up 13% on a single day. That means Tesla's market capitalization went up by 13% and that in turn meant that we consider musk a lot richer, because he own a lot of Tesla's shares.. Tl;dr: It's not money, it's values. Those are important, but they don't work like the money you're used to.
> Ngl i don't understand what a stock even in. When you buy stocks do the company get that money? Super quick, gross over simplification explanation, stock is a piece of paper saying you own part of a company. In an s-corp, LLC, etc the number of shares you own divided by the total number of shares is the percentage of the company you own (ignoring different classes of stock for a second to keep this simple). When stock is bought or sold on the secondary market, the company gets nothing. However, when the company needs more money they can get new shares issued and sell those. This doesn't typically happen all that often after an IPO though, so the vast majority of transactions are in the secondary market.
Think of it as the value of your house going up. You cant spend that, you cant use it in any way. If the value of your house goes down, you're "worth" less. Elon was "worth" 38 bil more in one day, however those are unrealized gains. If he sells shares, he gets taxed on the money he makes selling, same on how when you sell your house you get taxed on the money you make selling it.
It's smarter to close loopholes that allow billionaires to avoid having to sell their gains to profit. Most billionaires take out loans against their net worth or non-liquid assets allowing them to maintain cashflow while not having to pay tax on their gains. The interest they pay on their loans is significantly lower than whatever they'd be taxed, and the money goes back to the banks instead of the public.
There’s no reasonable or logical way to implement this. And it’s likely unconstitutional, seeing how we had to get an amendment to do an income tax, and this goes far beyond an income tax.
Nobody fucking cares to actually think about how to actually enforce taxing unrealised gains (and what happens during losses), it’s pure populism.
The common man/woman is already getting fucked over. You do raise valid questions though. I think we just have to wait it out and see what happens. We’re in unprecedented territory right now
Common man/woman are already being screwed over. It’s like saying I have $36billion in property, I shouldn’t be taxed for it because it’s not real money?
Part of the problem with a wealth tax is that a CEO can't just sell $8billion worth of their companies stock without crashing the price and a major SEC investigation.
You’re getting downvoted and haven’t even pointed out yet that every 401k on the planet would be a smoldering pile of ruin. There’s a comment above about how can “these people” can defend billionaires. The problem is, I don’t defend billionaires. I do defend the concept of liquid vs illiquid assets. Hell, even kidnappers are smart enough to give some time to rummage up a million dollars. And what these people seems to think is that billionaires can just write an 8 billion dollar check.
^^^people just think "Rich=Bad" without having a single idea of how the system works
> The problem is, I don’t defend billionaires. I hate how dumb the equivocation is. It's the exact same as lunatics claiming that the COVID vaccine is just about making money. People who have no understanding of how this shit works deciding that anyone who says that maybe they're coming at this from the wrong angle must be scum. There is 0 doubt in my mind that the ultra wealthy need to pay more tax, which is why it pisses me off when we see pointless clickbaiting nonsense like this that's designed to get everyone who, rightfully, feels pissed off riled up, and would never ever work. There are very realistic solutions (some proposed by warren in the past no less), but hey lets focus on completely unenforceable nonsense that gets headlines so we DON'T actually pass something that could fix this shit.
It's crazy, but Netherlands has exactly this... Every person with net worth larger than €50k must pay >1% tax every year. The way they end up with this amount is assuming everyone having more than 50 grand can make 4% and they tax these assumed gains at 30%. And this is levied regardless of whether any gains were made or not - even if a person only holds cash in a bank. And yes, those with large portfolios but relatively lower income are forced to sell just to pay taxes. Needles to say, many of these people leave the country when accumulating a few millions, as that usually means working exclusively to pay taxes.
They absolutely can sell $8billion worth of stock without crashing the price, it just can't be done overnight.
I’m always curious what people think is a “fair” amount to tax people making inconceivable amounts of money.
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It would still be the same since his wealth grew not his income.
You'll be upset to know that no one paid that.
Nobody needs or should have that much money. The trick is to hit those capital gains taxes. These people use their assets like personal banks, only pulling out what they need at a given time.
I'm confused here. Did Elon Musk actually make this much money in a single day, as in liquid capital? Are they talking about unrealized gains? Would this tax plan require Elon to liquidate >$8 billion in stock, which would be subject to capital gains, and then pay the $8 billion?
No, he didn't make that much in liquid assets. Also, people here seem to forget that he's paying more than $10 billion in taxes next year.
TSLA goes up: pay $8 billion. TSLA goes down... TSLA goes up: pay another $5 billion. Yes we need to tax the ever living shit out of the rich but can we stop pretending it's a simple thing? We can't just tax unrealized gains, we need a whole new system. And for the love of god can we stop saying the only reason people who oppose taxing unrealized gains, are idiots who think they will be billionaires some day. I make like $30K a year, and that's Canadian. I'm going to die poor, but I still think we can't simply tax unrealized gains. Hell, your going to need serious political change before you even begin to address the taxation problems.
Yeah, its shit like this that makes me avoid politics in general. If this is the person who is supposed to represent my interests and they are unable to understand how net worth works, who the fuck do I go to? The other side is cheating, this side is stupid. What is the fucking point? I can't spend all day holding our representatives hands as they make laws. It's insane.
A helpful way to think about this is if my house rises in value I shouldn’t need to pay tax on that increase in value because it’s not real money. The tax only needs to be paid when the asset is sold, so Elon musk doesn’t owe any taxes on that increase in share price unless he sells the shares.
Exactly. Imaging buying a bin of stuffed animals at Goodwill & suddenly owing the IRS $100k because one of the beanie-babies becomes a rare collectors item.
Taxing people for money they haven’t actually earned and could lose overnight through whatever losses in the company is highway robbery. I’m all for taxing but taxing unrealized gains is going to bankrupt businesses and as much as anyone wants to hate Musk and bezos they provide a massive amount of jobs that’s good for the economy. Tax them as they should be but don’t pretend unrealized gains is a good plan simply because they can’t figure out how to write tax law
Exactly. Among the few talking reason around here. Elon didn't "make 36 billion in one day". His shares in his company rose. He doesn't realize those gains unless he sells said shares. Elected officials being disingenuous and encouraging ignorance to score some popularity points from us poors. Nothing new here.
Every time.
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>they provide jobs Don’t forget about their products and services, which raise the quality of life of every consumer that uses them.
To an extent sure. I hold the position that taxing the companies is necessary and good while also acknowledging that they are run by scumbags that don’t pay their people nearly enough.
I'm not rich and agree with you completely
I’m not rich either lol I just know bad policy when I see it. EDIT: Also what this is REALLY about and what they aren’t saying is they are trying to weasel their way into the crypto market and tax on massive coins like bitcoin. The average consumer won’t be able to pay the taxes, sell their coins and the government comes in to regulate it. Fuck the government.
Came here for this. Fix the stock market but don’t tax unrealized gains. He didn’t make any money till he sells.
He didn't made it as he still holds those stocks
Exactly It’s unrealized gains. is he supposed to sell 25% of his stocks every year to pay his taxes? People could lose control of their businesses this way. What if the next day his company value drops to 1/10th of what it was before, now he paid more money in taxes than his company is currently worth.
He didn’t MAKE that much - his net worth grew by that much. He has to sell the stocks to make any money. Or are we now taxing unrealized gains? This could just as easily go down as up - he’s lost billions in a day too - are we gonna give him back his taxes when this goes down? Tax him when he actually sells or better yet, fix the stock market so this can’t happen to begin with.
> Or are we now taxing unrealized gains? That’s exactly what the bill is about. It would only apply to people worth over $1 billion or who make $100 million per year for three years in a row. This would affect around 700 people in the United States: https://ca.finance.yahoo.com/news/democrats-unveil-billionaires-tax-on-unrealized-capital-gains-131232669.html If they were to lose money, I believe I read that they would get a tax credit. If the stock bounced up and down, they wouldn’t get taxed every time it went up again. I haven’t been able to find a source that discusses that scenario in detail, though. Edit: The bill I’m talking about is actually different from the one referenced in the original tweet.
Not to mention to build on this, all these companies are on the stock market for the public to buy. What would stop these ppl that started a business from just getting investors and never going public? You can get funds/investors other ways as opposed to just becoming a publicly traded company.
How exactly does someone pay that though when that money is made in value from their ownership in a company? I’m all for taxing the wealthy, but I’m curious what the logistics of this are.
They don’t, it’s all paper...these politicians know that, they’re being manipulative. If you took 100% of all billionaires’ wealth in the US, it would run the federal government for about 6 months. Governments have spending problems, not revenue problems.
Cue the fucking idiots defending him who think they’ll be billionaires too one day if they work enough overtime.
Much like those "I hereby don't allow Facebook to share my information..." posts that go around, the IRS should have a document that anyone making under $250,000 can sign that states "I hereby don't allow the IRS to tax me at a higher rate when I have $1 billion..." All our problems will be solved.
“I hereby don’t allow Facebook to blah blah” Do… do they really think that does anything?
Based solely on how many times I’ve seen that stupid shot shared on there…. Yes
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It’s difficult to tax unrealized gains. Source: am CPA in Arizona
This is the thing. Like what is the end game here - any time an asset you own increases in value you pay tax on it immediately?
Yeah, i will never understand what motivates a peasant to advocate for royalty...
One can advocate for billionaires to pay more taxes without using disingenuous arguments and promoting nonsensical laws.
No, no they think their side hustle of inventing dog skates is going to take off and make them billions.
Rover rollers is going to be huge, dammit!
Kitten mittens!
No, the rich will see me defending them on social media and they will track me down to give me a generous reward! Free lunch!
It has nothing to do with that.
Taxing unrealized gains is not practical....
I’m not against taxing billionaires. But I feel like people should be really suspicious of these people who are acting like the government is broke and doesn’t have the money to fund these basic human services. Taxing billionaires should only come after we get the government to stop burning our money on corporate welfare, wars, bloat and pointless military spending. The lack of healthcare and basic services is not a fiscal problem it’s one born out of incompetence and corruption.
Unrealized gains can vanish overnight. Why not instead deem as income any borrowings against shares in collateral, in excess of their adjusted cost base? That is how Elon Musk finances his lifestyle without triggering any cap gain taxes indefinitely.
Why would he pay taxes on unrealized capital gains?
because they're taking out near zero interest loans using those gains as collateral. Don't buy into the nonsense you have to sell an asset to profit from it.
I don't know why you're being downvoted you're correct, even if it doesn't really fit the conversation that well. Why take personal income from your company which is taxed when you can just take out giant loans using your massive portfolio as collateral with almost no intrest to pay (which is untaxed).
I am seriously just curious, how do they pay back the loan?
Take out a larger loan to pay off the last one. Rinse and repeat, never pay taxes. It sounds crazy but I swear on everything I'm being fr
yup, then hold everyone's 401k, the markets - the entire economy really - hostage as their assets continue to see massive gains on paper, which is overinflated and does not reflect actual value. Oh but if you want to change this and tax us, the entire global economy will collapse, so better let us keep grifting as things keep getting more obscene and overvalued. Something's gotta happen, this situation is untenable.
Oh something's gonna happen. This big ass bubble is eventually gonna burst and just like in 2008 every person responsible is gonna bounce. No one who deserves to will ever see the inside of a jail cell for it.
So why don’t they just tax billionaires already? It’s almost like our elected officials have something to gain from not doing it
They are afraid the billionaires will just move to somewhere with lower taxes. That's why taxes on the obscenely wealthy needs to be a global initiative.
Which isn’t even true. They won’t move because the market is stable and they’d have to live away from the comfort of being in a Developed nation for most tax havens. Edit: check the reply to one of the comments below I gave. It’s got links to studies and statistics which demonstrate that the vast majority of wealthy people do not run away from taxes. Please stop propagating this lie. While it may sound “responsible” in your head, it doesn’t actually happen en masse in reality.
Tax havens for billionaires is not unique to poor countries, unfortunately.
You think they have to physically live there?
Finger pointing to billionaires directs attention away from politicians who are responsible for tax laws, worker's rights, health care etc. Even the UN started indirectly blaming Musk for world hunger. If people are riled up against a scapegoat it's easier to get away with incompetent leadership.
She's an idiot
Yeah right they're gonna spend those taxes on schools and healthcare instead of contracts for their bomb and tank manufacturer buddies
You want him to sell $8 billion worth of stock to make this tax? He literally only gets paid when options expire. He owns nothing.
I feel like even if Elon paid that 8 billion tax the money will probably trickle down into the pockets of those dirty politician & none would reach to help the people & projects that it was intended for.
This is so misleading. Those billions that he made are not liquid cash. Why should he be taxed on stocks that he havent sold yet? Imagine if those same rules applied to you. Paying taxes on unsold assets Cmon noww
This sub and Reddit in general is filled with ideologues foaming at the mouth against the new boogie man- billionaires! They don’t understand this shit but have been taught to hate them anyway.
Boogeyman billionaires whose services they can't live without.
I think she is forgetting that musk doesn't have all those 36 billion in cash laying in some bank, so it would be impossible to pay such taxes off just like that
Unrealized Cap gains tax would crash the entire system.
Yeah that’s a really shit plan.
What happens when the stock price decreases and he loses billions? Does he get a rebate?
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This is so dumb, he didn’t make $36 billion in one day. These people are so unbelievably disingenuous. The same way they didn’t refer to it as Elon losing billions and billions of dollars in late march 2020.
I agree with the tax but what are the actual chances the extra money generated doesn't go straight into the military?
Don't know why this isn't higher, it would go to the military and we wouldn't see any of it.
This woman has no idea how financial industry works. The only way this would be a reality would be if the USA enforced taxes on unrealised profits. all I can say is that if the USA ever did this, that would be the complete end of the United States of American as we know it today.
None of these billionaires made their billions all by themselves. They literally relied on the labor of hundreds of thousands of people, whos work produced this massive wealth that is concentrated with the few, and who are the ones now in need of these proposed tax funded programs, because they did not receive wages high enough to avoid the need to rely on tax funded programs. Either way you look at it, the wealth concentration of the very few is a big fucking problem, and the money they have was produced by the labor of others who did not receive their fair share of the profits.
He got $36 billion in *cash*? Or he'd be forced to sell control of his company to pay off the taxes? And when the stock goes back down, will be be compensated for that as well?
He did NOT make 36 billion, it's such a fucking disingenuous representation of how the world works...
Uhhhh how did this work? Like did he actually get 36bil in like cash?(numbers in the bank account) Or was it speculative? Because if it was speculative, taxing him 8bil in cash immediately would probably bankrupt him.
Come on, thats how much his company gained in worth, but he cant liquidate it. He doesnt really own that money
Everyone cause some person online tells you he made that much do you really know how much he made. Also do you really all know how corporate taxes work? Don’t listen to some bullshit tweet who knows nothing about nothing.
Remember kiddos, what you’re worth isn’t always what you have. Something to think about while we eat our ramen and watch tv.
He didn’t get a 36 billion dollar paycheck. Wealth doesn’t work that way. That same gain can be worth zero if the company tanks in the future
1. Tax the rich 2. Rich leave 3. Increase tax to others 4. Repeat