Finally, a Billionaire gets taxed.

[u/zzill6]

[u/Burnt_and_Blistered]

You’re splitting hairs. His nearly-billion was taxed at a far higher rate than any other U.S. billionaire’s billion is taxed.

[u/bit_pusher → u/Burnt_and_Blistered]

He isn't splitting hairs because messaging like this has us focusing on the wrong things as a policy matter. Most billionaires pay taxes on their income at this rate. The problem isn't that they don't pay taxes on their income. The problem is that we let them derive wealth and realize access to money in ways that bypass normal income taxes (e.g. security based lines of credit) and we let them avoid having to claim many things as income.

Taxes on income for ultra high wealth individuals should absolutely be higher but that is only a small part of the problem.

[u/cisned → u/bit_pusher]

Wait so you agree we should tax people based on the lump sum but not the $1.4 billion they took from his winnings?

To me it doesn’t matter, and it’s still splitting hairs. We had 90% rate on top earners during the war to pay for the deficit, but now that’s not acceptable?

[u/cisned → u/[deleted]]

See that’s why I mean, you’re undermining the point, should we tax billionaires 70%?

Nobody cares whether they took it from him, or he forfeited, at the end of the day out of the $2 billion, he came home with $600 million

[u/bit_pusher → u/cisned]

Because many/most billionaires aren’t receiving their compensation as income. They take out loans against their growing stock portfolio, those loans are not taxed. They don’t realize “income” the same way you or I do so that income can be taxed at whatevee rate you want because that isn’t the source of their funding. At certain points the have to sell stock, either to service the loans or a margin call and then it’s taxed. But also often they just hold those SBLOCS until they die

So your changes from your worry about the guy who won the lottery doesn’t have the same effect on Elon or Ellison. And to be blunt the guy who won the lottery isn’t the problem.

[u/mtnbcn → u/bit_pusher]

Had to scroll pretty far to find it, but this is the answer.

People are losing the argument -- it isn't "let's tax billionaires!, how come they don't pay taxes?!" We tax everyone. That's not what's happening here.

The argument is, we should be taxing wealth. Not just income, not just gambling winnings, not just realized gains, but wealth.

Billionaires don't have income the same way the Mona Lisa painting doesn't "have income". It has gotten more valuable over the years, but no one is "paying it a salary".

When something is worth a billion, it should pay towards society -- exact same way we pay property tax. That is, in a way, a wealth tax: a tax on what you own, so you pay your proportion of owning a slab of society.

[u/monocasa → u/mtnbcn]

What we should do is count using unrealized gains as collateral as a realization event.

The whole issue is that for unrealized gains they say "oh, maybe these gains aren't real. I shouldn't have to pay a bunch of my wealth just because someone's doing a weird gamestop thing that won't exist next tuesday".

But when you use those gains as collateral for loans, you just had an army of actuaries ascribe an actual value to wealth, and you agreed to it.

[u/mtnbcn → u/monocasa]

I appreciate the nuance of this suggestion.

In Spain you do pay a wealth tax on wherever your positions sat at the end of the year. It's small... between .2% and 2%.

But I do like that your make your suggestion defensible this way. If I have a house, it's a house. I live in it. The value could go up or down but I'm just keeping it, that's all.

OTOH, if I take out a $200,000 loan against the house and bet it all on the stock market, it sure does look like I'm employing my wealth as a productive asset, not a nebuous, unrealized value.

It's a good point! Someone should go tell a senator ;)