The Super Rich and Taxes

[travelover]

Well then as I suspected the chicanery you refer to you have grossly exaggerated.

And of course the incentive to reincorporate overseas arose because Congress kept US tax rates among the highest in the developed world. The 2017 tax reform reduced this incentive and that was the major reason for the bill.

And if you notice, the ability to reincorporate or use other methods to take advantage of favorable international tax rates has been a feature of US tax law for a very long time. No buying of "congress critters" lol required. But this was simply arranging affairs to pay the lowest tax possible just as Judge Learned Hand said. It's the rich man taking a different route home.

Next year, instead of sending money to the IRS I'll send a letter stating that while I've enjoyed living and working in the USA and appreciate the infrastructure, quality of life and educated workforce provided me and my business, I've decided to pay taxes in some obscure country that has a minuscule tax rate. It seems only fair, because I think the USA's tax rates are too high.

 

[travelover]

When our tax code makes “chicanery” legal (almost always true in cases we read about), I blame our government representatives - not the corporations. Globalization and special interests have only made it much worse.

Did you miss the part about the corporations selecting and funding the candidates while the corporate lobbyists actually write the legislation? Congress critters have to scramble for millions of dollars every two years and Citizen's United has basically given corporations a free pass to buy and sell elected officials.

 

[Magus]

Well then as I suspected the chicanery you refer to you have grossly exaggerated.

And of course the incentive to reincorporate overseas arose because Congress kept US tax rates among the highest in the developed world. The 2017 tax reform reduced this incentive and that was the major reason for the bill.

And if you notice, the ability to reincorporate or use other methods to take advantage of favorable international tax rates has been a feature of US tax law for a very long time. No buying of "congress critters" lol required. But this was simply arranging affairs to pay the lowest tax possible just as Judge Learned Hand said. It's the rich man taking a different route hime.

Additionally, all corporate taxes are ultimately born by either shareholders, supplies or employees, usually some of all 3, plus the cost to corporates to calculate and comply with corporate tax code is absolutely staggering. When you get right down to it, corporations don't really pay taxes as its just the face for the 3 groups above.

Personally, I'd eliminate corporate taxes in the US, which would make the US insanely competitive, make dividends and the like all regular personal income (since no longer double taxed) and bump up the top two marginal rates a bit to keep it neutral from income perspective (or introduce a small across the board import tariff).

 

[misanman]

Additionally, all corporate taxes are ultimately born by either shareholders, supplies or employees, usually some of all 3, plus the cost to corporates to calculate and comply with corporate tax code is absolutely staggering. When you get right down to it, corporations don't really pay taxes as its just the face for the 3 groups above.

Personally, I'd eliminate corporate taxes in the US, which would make the US insanely competitive, make dividends and the like all regular personal income (since no longer double taxed) and bump up the top two marginal rates a bit to keep it neutral from income perspective (or introduce a small across the board import tariff).

+1

 

[ScoopKona]

My suggestion to Mr. Buffet is that he should determine how much he thinks he should pay in taxes and write a check for the difference between that and his actual tax bill to the Treasury Department every year. They happily accept "donations" to "help reduce federal debt."

Stephen King addresses this point (over and over) in his article about taxation.

 

[ScoopKona]

I keep hearing that the ultra rich are all going to move away if they have to pay their fair share of taxes, but where are they going to move to? Coincidentally, all the best places to live also tax the rich and maintain a stable social order where one can live in safety with a dependable infrastructure, a functioning judicial system and a reasonable cost of living. I guess if you want to live in a walled compound with guards there are lots of places one can move to.

I have lived in many, many places like this. There is always the local rich dude. Always. In places like Morocco, they build houses which look positively shabby from the street, but are absolutely palatial within. In East Africa, the poor areas of the Caribbean and South America, it's high walls, barbed wire and loads of guards. I haven't spent much time in impovrished areas of Asia. But I assume it's the same there.

What slays me about the "but our beloved wealthy overlords" crowd is that this is the direction they're trying to move society -- whether they realize it or not. I assume "not." Robust liberal democracies are the most-fun places to live. You don't need private security to walk through the market. You can attend a concert and be reasonably sure nobody is going to try to blow the place up.

As we move further and further toward "high walls and barbed wire," we're going to see more and more mayhem -- push people far enough and some of them will snap.

The worst places I ever lived were countries where many young men were idle thanks to unemployment. Those places are never safe.

 

[youbet]

Next year, instead of sending money to the IRS I'll send a letter stating that while I've enjoyed living and working in the USA and appreciate the infrastructure, quality of life and educated workforce provided me and my business, I've decided to pay taxes in some obscure country that has a minuscule tax rate. It seems only fair, because I think the USA's tax rates are too high.

I'll guess that next year you won't have income dollars that qualify to be funneled through your rented desk in Ireland. You'll need to work on that.

 

[pb4uski]

....Personally, I'd eliminate corporate taxes in the US, which would make the US insanely competitive, make dividends and the like all regular personal income (since no longer double taxed) and bump up the top two marginal rates a bit to keep it neutral from income perspective (or introduce a small across the board import tariff).

+1

+2 But just think of the number of tax accountants and tax attorneys that would then be unemployed!

 

[Letj]

I have lived in many, many places like this. There is always the local rich dude. Always. In places like Morocco, they build houses which look positively shabby from the street, but are absolutely palatial within. In East Africa, the poor areas of the Caribbean and South America, it's high walls, barbed wire and loads of guards. I haven't spent much time in impovrished areas of Asia. But I assume it's the same there.

What slays me about the "but our beloved wealthy overlords" crowd is that this is the direction they're trying to move society -- whether they realize it or not. I assume "not." Robust liberal democracies are the most-fun places to live. You don't need private security to walk through the market. You can attend a concert and be reasonably sure nobody is going to try to blow the place up.

As we move further and further toward "high walls and barbed wire," we're going to see more and more mayhem -- push people far enough and some of them will snap.

The worst places I ever lived were countries where many young men were idle thanks to unemployment. Those places are never safe.

Absolutely true. Most of us have no clue what’s it’s like to live in a society with this kind of disparity in wealth. Luckily for the US, we have a large enough middle class and a satiated lower class. The poor have enough material things to keep them from blowing up the country (that’s why I chuckle when people rail against welfare because they really won’t want to live in a society where the poor isn’t given some form of welfare benefits).

 

[ScoopKona]

Most of us have no clue what’s it’s like to live in a society with this kind of disparity in wealth.

Then they should leave. Seriously. Quit wrecking a good thing. (Well, an almost good thing. It was a much better thing not long ago. But we've been in a tailspin for quite some time.)

If they want Haiti or Somalia or Uganda -- they should go there. I've been to all three. There are some beautiful parts of each place. Kampala, especially, has some lovely sights.

But it also has teenagers with machine guns.

 

[travelover]

........But it also has teenagers with machine guns.

Well, we are all for 2nd Amendment rights.

 

[ScoopKona]

Well, we are all for 2nd Amendment rights.

Ahhh, freedom. The freedom to go to the market and buy an AK, a kilo of heroin and a slave girl all in the same afternoon.

Of course, "your own personal team of bodyguards" ends up costing more than property taxes and income taxes. A point always lost on the "but my beloved wealthy overlords" crowd.

 

[MichaelB]

Thanks for an interesting discussion - until it went down the rabbit hole.