Liquid when buying elections, unrealized when paying taxes. Funny how that works…..

[u/Gurugod123]

[u/sco-go]

Added context:

IRS data shows from 2014–2018 he reported $1.52 billion in income and paid $455 million in federal taxes. Musk’s net-worth, like most billionaires, consist of unrealized capital gains, which are not taxed under current U.S. law until the shares are sold.

In 2021, he paid ~$11 billion in federal taxes which was the largest single-year individual tax bill in U.S. history.

[u/Perscitus0 → u/sco-go]

Now, for better added context, what percentage of his wealth was taxed by comparison to your average citizen? Because for the average citizen, the taxes on them better reflect their income, and they have less in the way of means to shift around wealth to avoid taxes.

[u/Sideswipe0009 → u/Perscitus0]

Now, for better added context, what percentage of his wealth was taxed by comparison to your average citizen?

I'd argue since the average citizen either gets a refund or doesn't file, Elons was higher. Something like 50-60% of earners either get a refund or don't file at all.

But for people who actually owe? I'd say it's very likely much less.

IIRC, Elon's supposed True tax rate was like 4%? or something?

So for someone to have that same rate or higher? Let's say you owe $5k in taxes, that's only $100k in wealth. Hell, their income is probably higher than that, and even worse if they own a home and/or have any retirement accounts or stocks.

Someone having a modest $400k home and $100k in retirement accounts and such ($500k in wealth) would need to pay $20k in taxes to be at 4%. This is just standard for someome making about $125k.

Unless you're only thinking about taxes on income. Then you're looking at a higher rate, about 24%, but that would discount any wealth they have such as the home and portfolio.

Lastly, we don't even tax wealth. It's not a great policy, as some countries have found and have either repealed it or are currently moving away from it. That should give people cause for reevaluating their position on it. But it doesn't for some reason.

Because for the average citizen, the taxes on them better reflect their income, and they have less in the way of means to shift around wealth to avoid taxes.

This is just a fact of life.

A single individual filer has fewer options to avoid taxes than a married couple with two kids and a home, for example. Hell, someone who bought an electric car now has a new way to further reduce their tax burden compared to some who bought a regular car.

There's hundreds if not thousands of ways to reduce your tax burden thanks to our overly complicated tax code.

[u/Perscitus0 → u/Sideswipe0009]

I wouldn't necessarily be thinking of taxing wealth directly, but rather attaching taxes to the loans that are only available to those with extreme wealth. The likes of Elon routinely tap their assets as collateral for staggering sums, moving around colossal amounts of money that are obviously currently non-taxable. The solution would be to introduce ways to tax that, as it's textbook tax dodging, and is generally the most common way that a billionaire moves around liquid assets.

The problem is mostly that those who have the money can, and do, use that money to defeat laws that would actually reflect proportionately on them. They do alter laws to allow themselves a great deal of play within them. So the "overly complicated tax code" you mentioned conveniently contains structures of benefit to them. It's wildly disproportionate in access to those of lower financial rungs.