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ProPublica uses leaked IRS data to show how wealth inequality is messed up in this country

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IronWing

No Lifer
Jul 20, 2001
61,853
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Because you never paid the tax on the 401k when you first contributed. You put in pretax dollars. And that money was allowed to grow tax free until retirement distribution. And you're complaining about that? That's crazy good deal.

Your tax rate in retirement should be pretty low since you'll likely be in lower tax bracket.
And the wealthy class get the same deal on unearned income except 1) they get the capital gains welfare tax rate and 2) they get to enjoy that rate after holding their investments for only one year while working folks get penalized if they withdraw their investments before age 59.5.
 

Exterous

Super Moderator
Jun 20, 2006
19,273
2,095
126
Yea, when they come up with some spare cash, they'll get right on it. Notice I used the word incentive, meaning the company provides it as a benefit and contributes as well....even if it's measly.

How many American's are contributing to retirement, in any form? How many can afford a sudden bill >$500?
I saw your word and responded to what you wrote. There are still several incentives for IRAs you just apparently meant employer incentivized but didn't clarify your intent

As to your second point there is plenty of evidence that Americans are bad at saving and planning in general in addition to other situations impacting that area. So to structurally improve savings and retirement accounts it would need to be a combination effort between various reforms (tax, wage, make retirement accounts employer independent, include opt-out requirements instead of making everything opt-in etc).
 

Exterous

Super Moderator
Jun 20, 2006
19,273
2,095
126
And the wealthy class get the same deal on unearned income except 1) they get the capital gains welfare tax rate and 2) they get to enjoy that rate after holding their investments for only one year while working folks get penalized if they withdraw their investments before age 59.5.
The tax code does allow for penalty free withdrawals from a 401(k) plan before age 59.5 although it comes with its own set of stipulations. That said the wealthy enjoy a greater freedom to pick and choose which tax advantageous situations our overly complex tax code provides
 
Nov 8, 2012
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I saw your word and responded to what you wrote. There are still several incentives for IRAs you just apparently meant employer incentivized but didn't clarify your intent

As to your second point there is plenty of evidence that Americans are bad at saving and planning in general in addition to other situations impacting that area. So to structurally improve savings and retirement accounts it would need to be a combination effort between various reforms (tax, wage, make retirement accounts employer independent, include opt-out requirements instead of making everything opt-in etc).
We already have that. It's called social security.

You also have independent non-employer accounts as well with IRAs.
 

ch33zw1z

Lifer
Nov 4, 2004
32,869
11,617
146
I saw your word and responded to what you wrote. There are still several incentives for IRAs you just apparently meant employer incentivized but didn't clarify your intent

As to your second point there is plenty of evidence that Americans are bad at saving and planning in general in addition to other situations impacting that area. So to structurally improve savings and retirement accounts it would need to be a combination effort between various reforms (tax, wage, make retirement accounts employer independent, include opt-out requirements instead of making everything opt-in etc).
I'm open to various approaches. Americans have been groomed to consume, wealthy have been allowed to hoard. We will reach a breaking point at some point.

The reality is that the majority of Americans aren't saving for retirement, and much of that is not by their design.
 
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Nov 8, 2012
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The article is just misinformation 101 for the weak-minded and tax-retarded - which this thread has valiantly proven there are tons.

Take this for example:
1623330309971.png

Of course, idiots like OP would read this and say "OH MAH GHAAAAAAD! Only 3.27% of his wealth was taxed!" Obviously too incompetently stupid to do a simple realization that his tax amount is based on the income - which would equal roughly 30% taxes paid. If your idea of tax avoidance is 30%, you're doing a pretty shit job.

Then there is the "Wealth Gain" for people who are too retarded to know how stocks work. Oh the horrors of the stock price of your company going up! Nevermind that you're entirely oblivious and are calculating tax percentages based off income that.... hasn't been taxed lol. That takes a special kind of stupid.


Then there is the wealth tax concept they are spewing of 3.27%. I myself have a net worth of roughly $1M as it stands with all my accounts. I'm scheduled to pay roughly $30k in federal income taxes this year... which means... OH... MY...GOD!! I'm only being taxed on the equivalent of 3% of my wealth!
 
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Juiblex

Senior member
Sep 26, 2016
367
147
116
Explain please.
You want me to explain how the world actually works? I can't, it would be anti semetic. Funny how people have been programmed. I'll try my best not being anti semetic.

Have you heard of Occupy Wall Street? Which is what this forum/article is talking about in this post. We can't have a serious discussion about wealth distribution without having a real conversation about the facts. These guys were claimed to be anti semetic too.

Occupy Wall Street - Wikipedia

When you think of Wall Street what do you think of? I think of big huge stock organizations, you know, the guys fucking the common man. Have you heard of Goldman Sachs, and the like?
Who runs these companies?

But as we know Occupy Wall Street didn't go anywhere. Why not?
Could it be that there is a revolving door between Goldman Sachs and the federal government? It says right there for Blankfein's wikipedia that he met with Obama 14 times! No way!

Is it no surprise this happened next?

It was revealed that an internal Department of Homeland Security report warned that Occupy Wall Street protests were a potential source of violence; the report stated that "mass gatherings associated with public protest movements can have disruptive effects on transportation, commercial, and government services, especially when staged in major metropolitan areas".
You don't say. We can't let the people know they are being fucked. So the government identified this organization as a threat. And you still believe the federal government and these people from wall street who have infiltrated it as NOT a problem? And they are NOT in league with each other? At least for this cause?

Re: the bolded above by me. Try harder.

Perknose
Forum Director
 
Last edited by a moderator:
Nov 8, 2012
19,728
4,436
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You want me to explain how the world actually works? I can't, it would be anti semetic. Funny how people have been programmed. I'll try my best not being anti semetic.

Have you heard of Occupy Wall Street? Which is what this forum/article is talking about in this post. We can't have a serious discussion about wealth distribution without having a real conversation about the facts. These guys were claimed to be anti semetic too.

Occupy Wall Street - Wikipedia

When you think of Wall Street what do you think of? I think of big huge stock organizations, you know, the guys fucking the common man. Have you heard of Goldman Sachs, and the like?
Who runs these companies?

But as we know Occupy Wall Street didn't go anywhere. Why not?
Could it be that there is a revolving door between Goldman Sachs and the federal government? It says right there for Blankfein's wikipedia that he met with Obama 14 times! No way!

Is it no surprise this happened next?



You don't say. We can't let the people know they are being fucked. So the government identified this organization as a threat. And you still believe the federal government and these people from wall street who have infiltrated it as NOT a problem? And they are NOT in league with each other? At least for this cause?
"B-b-b-but my guiz are gud! Republicans are teh bhad ones in bed with the rich!"

But don't worry! Goldman Sachs is doing their part for diversity! They elected a black man to their board of directors! You believe us, right? We cool? Does that appease your social justice warrior-ism and make you entirely forget about how were violently fucking you up the ass? We can also donate $1m to Black Lives Matter to ensure you keep fighting amongst the peasants instead of working together against us.
 

ponyo

Lifer
Feb 14, 2002
18,950
2,283
126
And the wealthy class get the same deal on unearned income except 1) they get the capital gains welfare tax rate and 2) they get to enjoy that rate after holding their investments for only one year while working folks get penalized if they withdraw their investments before age 59.5.
Everyone gets the same deal on the capital gains tax. Nothing stopping you from enjoying the same capital gains tax benefit. Do you bitch and whine about the untaxed gains you keep whenever you sell your house? How is that fair to all the renters? Why do you get to keep all the gains while enjoying years of tax write-offs on the interest and property taxes you paid? At least with stock capital gains, they have to pay longterm tax. Many homeowners pay 0% and keep the entire profit from home sale. That too me is more messed up. Do you see me crying about it? No. The law is what it is and applies to everyone.

I can't believe people are complaining about not being able to withdraw penalty free on retirement investments. You gotta be kidding me. The government is allowing you to put in pretax dollars which never been taxed and allowing you to grow that money tax free until retirement. That is super generous benefit. Likewise, post tax money you put into Roth IRA if you qualify grows tax free and you get to withdraw at retirement age, all completely tax free. That's insanely great perk. Unbelievable actually. And you want to complain about not being able to withdraw penalty free before age 59.5? You're free to withdraw your contributions anytime you want penalty free before retirement age. But why would anyone do this when you can compound your money tax free? Compounding is wonderful and powerful tool and the government is giving you everything in a silver platter. It doesn't get any better. But of course people here would complain because they don't pay their fair share of taxes themselves. But they always want other people to pay more. Typical hypocrites.
 
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IronWing

No Lifer
Jul 20, 2001
61,853
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136
The government is allowing you to put in pretax dollars which never been taxed and allowing you to grow that much tax free until retirement. That is super generous benefit.
It's the exact same benefit as bestowed on capital gains except that unearned income through capital gains is taxed at a lower rate.
 

ponyo

Lifer
Feb 14, 2002
18,950
2,283
126
It's the exact same benefit as bestowed on capital gains except that unearned income through capital gains is taxed at a lower rate.
No, the stock options have to be exercised and converted into shares. Stock options have expiration dates and must be exercised. After tax dollars are used whenever options are exercised to buy the stock. So it's not the exact same benefit.
 

ewdotson

Golden Member
Oct 30, 2011
1,249
1,402
136
Everyone gets the same deal on the capital gains tax. Nothing stopping you from enjoying the same capital gains tax benefit.
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

I mean, don't get me wrong. I do ok personally. But it's silly to act like it's something that most people will ever be in a position to be able to be able to take advantage of.
 

ponyo

Lifer
Feb 14, 2002
18,950
2,283
126
"The law, in its majestic equality, forbids the rich as well as the poor to sleep under bridges, to beg in the streets, and to steal bread."

I mean, don't get me wrong. I do ok personally. But it's silly to act like it's something that most people will ever be in a position to be able to be able to take advantage of.
Any US resident can open brokerage account. Takes less than 5 minutes. I opened new Robinhood account last week so I know how easy it is. It's never been easier with free accounts and zero commissions. No one is going to force you to do anything. You have to take some initiative and responsibility.
 

brycejones

Lifer
Oct 18, 2005
20,570
12,231
136
Any US resident can open brokerage account. Takes less than 5 minutes. I opened new Robinhood account last week so I know how easy it is. It's never been easier with free accounts and zero commissions. No one is going to force you to do anything. You have to take some initiative and responsibility.
Yep if only everyone used their boostraps and got as lucky as you did.
 

ewdotson

Golden Member
Oct 30, 2011
1,249
1,402
136
Any US resident can open brokerage account. Takes less than 5 minutes. I opened new Robinhood account last week so I know how easy it is. It's never been easier with free accounts and zero commissions. No one is going to force you to do anything. You have to take some initiative and responsibility.
Yeah, that's great if you have income that isn't dedicated to survival. Again, I'm doing just fine myself. But I grew up in family that was a hairsbreadth away from winding out on the streets for much of my childhood. I can promise you, it really *really* wouldn't have mattered to my folks if it had been super-easy to open a brokerage account. It's simply not relevant to an awful lot of folks.
 

HomerJS

Lifer
Feb 6, 2002
26,715
12,050
136
"B-b-b-but my guiz are gud! Republicans are teh bhad ones in bed with the rich!"

But don't worry! Goldman Sachs is doing their part for diversity! They elected a black man to their board of directors! You believe us, right? We cool? Does that appease your social justice warrior-ism and make you entirely forget about how were violently fucking you up the ass? We can also donate $1m to Black Lives Matter to ensure you keep fighting amongst the peasants instead of working together against us.
Interesting bring race into a topic where is doesn't exist. The same thing you bitch about while lying about it most of the time.

Pot meet kettle
 

ponyo

Lifer
Feb 14, 2002
18,950
2,283
126
Yep if only everyone used their boostraps and got as lucky as you did.
Comparison is thief of joy. There’s always someone better, smarter, and richer.

Anyway, time for me to go outside and enjoy the beautiful sun and water.

Yeah, that's great if you have income that isn't dedicated to survival. Again, I'm doing just fine myself. But I grew up in family that was a hairsbreadth away from winding out on the streets for much of my childhood. I can promise you, it really *really* wouldn't have mattered to my folks if it had been super-easy to open a brokerage account. It's simply not relevant to an awful lot of folks.
That's what makes this country so great. You have people who went from nothing to something. Opportunity is there. I promise you I know the struggles of the poor. I wasn't born with silver spoon.
 

Paratus

Lifer
Jun 4, 2004
14,720
8,022
146
You own your house or rent? To a homeless person, you're "wealthy." Oh, so the value of your house went up since you bought it. It went up couple hundred thousands of dollars since you bought it or maybe it doubled, tripled in value. That's wealth disparity. That homeless person deserves much as you and you're going to need to pay tax on your unrealized home price gain today. Right now. Oh, you don't have the money to pay that tax because you're not liquid? Tough shit. Sell your house and pay your fair share of tax you tax dodger.

You're getting preferential treatment being homeowner vs renters. It's called being an owner. Same thing as people who own stocks. They're owners too.
Technically I pay my annual property tax against a percentage of the unrealized gain of the house price.

While the law in my state/county prevents the assessed tax rate from increasing it does allow the value of the property to increase by up to 10% a year. So they’ve been increasing my property value by 10% every year for the last 4 years. No way to fight this as property values have increased by more than that over the last year or so.

However this is an example of paying taxes on unrealized gains in properties.

Now I have no wish to pay taxes on unrealized gains. I’ve had investments through most of my working life, including some outside of retirement accounts. Some of those were mutual funds which had a habit of repositioning themselves at the end of the year. While I did not remove any money from those funds the fact they sold and rebought or reinvested dividends meant I had to pay taxes. (I understand that the tax liability happened because stocks were sold). I saw nice gains in the funds but still had to pay liquid cash for taxes without actually withdrawing money myself. Essentially paying taxes on unrealized to me gains.

I’ve since moved on to more tax advantaged ETFs.

I think the issue here is being clouded by focusing on unrealized gains and wealth.

Bezos may see most of his increase in “wealth” come from unrealized gains in his Amazon stock, that’s fine by me as long as he pays taxes when he sells it. What doesn’t make sense is Bezos still has to live. He has to own property, pay for food, heating, transportation, etc like the rest of us do. And he’s not living like someone who makes 5 or 6 figures a year of income. He’s living like someone who makes 9-10 figures of income a year.

So how does he pay for that lifestyle in some or all non-taxable dollars?
 

BlueWeasel

Lifer
Jun 2, 2000
15,854
255
126
Bezos may see most of his increase in “wealth” come from unrealized gains in his Amazon stock, that’s fine by me as long as he pays taxes when he sells it. What doesn’t make sense is Bezos still has to live. He has to own property, pay for food, heating, transportation, etc like the rest of us do. And he’s not living like someone who makes 5 or 6 figures a year of income. He’s living like someone who makes 9-10 figures of income a year.

So how does he pay for that lifestyle in some or all non-taxable dollars?
It seems many of the ultra-wealthy take out loans or lines of credit against their wealth/stocks/assets/whatever. Since that isn't "income" according to the IRS, they pay little to no taxes on it.

The fact that a billionaire can take out a 10 billion line of credit for everyday expenses and not pay taxes on it (as it is spent) just doesn't sit right with me. I know that's a perfectly legal loophole but it's still not fair, considering the rest of us plebes have to pay our tax share simply because ours is income, not a loan.
 
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woolfe9998

Lifer
Apr 8, 2013
13,126
8,162
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Bezos may see most of his increase in “wealth” come from unrealized gains in his Amazon stock, that’s fine by me as long as he pays taxes when he sells it. What doesn’t make sense is Bezos still has to live. He has to own property, pay for food, heating, transportation, etc like the rest of us do. And he’s not living like someone who makes 5 or 6 figures a year of income. He’s living like someone who makes 9-10 figures of income a year.

So how does he pay for that lifestyle in some or all non-taxable dollars?
It says so right in the article. He borrows lots of money to live off of. Borrows against his stock. That's a lot of collateral. And while the article doesn't say this, I suspect that when a loan comes due, he just takes out another loan to pay off the first, and so on. With over $100B in collateral, he can borrow as much as he wants to.
 

Paratus

Lifer
Jun 4, 2004
14,720
8,022
146
It says so right in the article. He borrows lots of money to live off of. Borrows against his stock. That's a lot of collateral. And while the article doesn't say this, I suspect that when a loan comes due, he just takes out another loan to pay off the first, and so on. With over $100B in collateral, he can borrow as much as he wants to.
Ok so it’s not so much as the tax isn’t due it’s that by way of his massive wealth he can continuously push the tax bill down the road because hypothetically at some point he’d have to sell stock and realize the gain to pay off the final loan?
 

woolfe9998

Lifer
Apr 8, 2013
13,126
8,162
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Ok so it’s not so much as the tax isn’t due it’s that by way of his massive wealth he can continuously push the tax bill down the road because hypothetically at some point he’d have to sell stock and realize the gain to pay off the final loan?
Yes, but the problem is, if he dies without selling the stock, his heirs get a step up in basis to his date of death. Meaning that the capital gains realized by selling that stock are now approximately zero, so no one ever pays taxes on it.

Any outstanding loans would have to be paid off by the heirs, of course, but that is no problem since the heirs can sell the stock without paying capital gains taxes, then use the proceeds to pay off the loans.
 

Paratus

Lifer
Jun 4, 2004
14,720
8,022
146
Yes, but the problem is, if he dies without selling the stock, his heirs get a step up in basis to his date of death. Meaning that the capital gains realized by selling that stock are now approximately zero, so no one ever pays taxes on it.

Any outstanding loans would have to be paid off by the heirs, of course, but that is no problem since the heirs can sell the stock without paying capital gains taxes, then use the proceeds to pay off the loans.
Got it. So push it down the road long enough to run the clock out and our pro-wealthy inheritance laws reduce the taxes to ~0.

Pretty sweet gig.
 

hal2kilo

Lifer
Feb 24, 2009
17,211
4,850
136
Any US resident can open brokerage account. Takes less than 5 minutes. I opened new Robinhood account last week so I know how easy it is. It's never been easier with free accounts and zero commissions. No one is going to force you to do anything. You have to take some initiative and responsibility.
Just now opened a Robinhood account. Wow, I'm so impressed. So, like you are counting on the Wall Street lottery. Even idiots that don't invest, vote against their self interest, cause they might win the lottery someday.
 
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pete6032

Diamond Member
Dec 3, 2010
5,314
1,132
136
Any US resident can open brokerage account. Takes less than 5 minutes. I opened new Robinhood account last week so I know how easy it is. It's never been easier with free accounts and zero commissions. No one is going to force you to do anything. You have to take some initiative and responsibility.
My god just because you can open an investment account doesn't mean that you can have money to invest..
 

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