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0 pointsad404b8a372f2b92y ago0 comments

My understanding was that the wealthy essentially do not have income, their net-worth is tied to their stock ownership.

Tax on capital gains do not work to tax them either since they don't sell their stocks but take loans against them.

In what way should these systems be changed, or new systems be used, to appropriately tax them without compromising their ownership of the companies they built?

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4 comments · 3 top-level

techdmn2y ago· 1 in thread

First thing's first, taxes on capital gains should be much higher, and always higher than taxes on wages.

Second, loans require repayment. Even if the bank accepts your stock directly as payment, there's a taxable transaction. I don't understand how loans evade taxation.

Third, marginal tax rates used to be MUCH higher than they are today. Example from USA Today: "For married people filing jointly in 1953, for example, any income above $200,000 was taxed at 90%, above $300,000 at 91%, and above $400,000 at 92%."

ad404b8a372f2b9OP2y ago

Interesting, I didn't know the rates used to be that high.

I don't understand fully how loans evade taxation either. What I've read is that it's a combination of:

- They can be carried forward into other loans.

- They don't repay them, they only pay the interests.

- They aren't close in amount to their actual net-worth.

So most of the money they own is not liquid and not subject to those taxes. Unless we're talking about a wealth tax, which I'd be interested in seeing an argument for as well.

hn_acker2y ago

If you scroll a bit into the "400 richest Americans" section, the author brings up taxing stocks. (Copy and Ctrl-F to see it on the site.)

> Some will argue that using this wealth for public benefit is not possible, because it's "tied up" in stocks, and therefore inaccessible. This is just not true.

On the featured site the last sentence links to the author's argument that taxing stocks is possible over a period of years or decades [1].

For context, the author of the site is Matt Korostoff.

[1] https://github.com/MKorostoff/1-pixel-wealth/blob/master/THE...

itishappy2y ago

Sounds like you're already aware of the pain points. Is there some reason to expect the issues you mention are not addressable?

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