Elon & Twitter

[mspohr]

So, this isn't quite honest. Yes, the marginal rate was 90%, but you could pretty much deduct everything under the sun, even on a personal return.

The "effective" rate was always much much MUCH lower, like near 35% for those tax brackets.

Well, if you GoogleIt, you'll find that the effective rate was about 60% on the rich.

 

[texas_star_TM3]

Absolutely. All of Elon's hate for Democrats can be traced to
- How Biden government treated Tesla (vis-a-vis GM)
- How CA shutdown Fremont factory during Covid

yup. and because China is important to his business ambitions he doesn't dare to critique the "zero covid" policy of the CCP one bit while simultaneously acting like CA shutdown in Fremont was the end of democracy. Consistency check fail.

 

[thx1139]

Well, if you GoogleIt, you'll find that the effective rate was about 60% on the rich.

Also be clear bkp_duke is adding up Federal, State and Local to get to his 50% number. Was the effective tax rate of 60% just Federal?

 

[mspohr]

Also be clear bkp_duke is adding up Federal, State and Local to get to his 50% number. Was the effective tax rate of 60% just Federal?

Yes, that's just Federal.

 

[bkp_duke]

So do I. It used to bother me, but I changed my paradigm a bit by looking at marginal utility instead of hard numbers. Marginal utility of my additional dollars is significantly less than for someone making $50k/year. There isn't a great way to effectively measure this, but there's definitely some kind of curve where an extra dollar is worth a lot to someone with nothing, and becomes worth less and less to those with more. Additionally, I work less (now) for the income I earn annually compared to someone else who is earning in a lower bracket. So the effort per dollar is also different.

It's a more nuanced view, and not everyone will agree, but I think it helps explain progressive tax structures a bit.

I understand, and appreciate that view.

Now, here is my counterpoint. This isn't the early 1900s. The population is FAR FAR more mobile than previous generations. Already I can move to Puerto Rico and get a 0% tax rate (plus whatever RE tax is). There are a TON of the wealthy and business owners that have been doing this in the past decade. Additionally, while my wife was born in the states, here parents were not. They have discussed moving back to their home country multiple times, and if tax rates go higher, I would consider that.

Case example - Elon already moved out of CA to reduce his tax burden.


The days of even close to 90% marginal tax are done with, never to return. The "rich" are far too mobile, and pushing their rates up too high will just push them out, and then you get nothing, not a penny.



Also, it kinda chaps my ass a bit when I see people on the socioeconomic scale far lower than me milk the system to not pay taxes. Example, had hundreds of thousands done in exterior work for a pool + landscaping on the house we bought 5 years ago. The workers insisted on being paid in cash, they would not accept even checks. I wasn't inclined to report them but anyone that thinks tax-avoidance is a "rich man's" game is not paying attention to the world around them.

 

[bkp_duke]

Well, if you GoogleIt, you'll find that the effective rate was about 60% on the rich.

60% is impossible now, the rich are far too mobile to get anywhere near that. I can run my business anywhere in the world with an internet connection, since it is computer services. You get close to 60% Fed, and I'll say kiss my ass, I'm gone. I don't have that level of loyalty to this country.

 

[bkp_duke]

What is fair is that people who earn more should pay more. Current system is regressive with the middle class paying more than the rich.
Tax the rich.
Tax corporate profits.
Repeal Trump tax cuts.
Tax carried interest.
Expand the IRS to catch tax cheats.
That is fair.

I'm "rich" by definition, and I pay a LOT more than the middle class.

 

[thx1139]

60% is impossible now, the rich are far too mobile to get anywhere near that. I can run my business anywhere in the world with an internet connection, since it is computer services. You get close to 60% Fed, and I'll say kiss my ass, I'm gone. I don't have that level of loyalty to this country.

Hey what is your tax rate for health insurance/care? I wonder what that is compared to say the family making say $150K. I bet it is a great deal lower. When the 2017 tax cuts came about I got a hefty cut. Went to an extra trip to Europe. What I find as my income and wealth increases is that I spend less of the new income and when I do I tend to spend less of it actually in the United States. We live in a middle class neighborhood now because our old wealthy neighborhood all with 1+ acre lots was just not very social. Our neighbors have no idea how much we are actually worth. Only clues being the Tesla's and the vacations they simply dont take.

 

[bkp_duke]

Hey what is your tax rate for health insurance/care? I wonder what that is compared to say the family making say $150K. I bet it is a great deal lower.

Considering I pay both for my employees and know my premiums, I can answer that easily.

I cover 100% for my employees, and 75% for their families. So, the employees, strictly speaking, pay 0% of their own care, as do I.

 

[thx1139]

60% is impossible now, the rich are far too mobile to get anywhere near that. I can run my business anywhere in the world with an internet connection, since it is computer services. You get close to 60% Fed, and I'll say kiss my ass, I'm gone. I don't have that level of loyalty to this country.

Considering I pay both for my employees and know my premiums, I can answer that easily.

I cover 100% for my employees, and 75% for their families. So, the employees, strictly speaking, pay 0% of their own care, as do I.

Yeah that is all before your take home pay so it is untaxed. For the average family in the US those health insurance taxes and out of pocket is far more than you. I am not talking about Medicare. Health Insurance premiums and out of pocket IMHO opinion is a tax since unless you clueless you must pay. It may be a payroll deduction, but in reality it is a tax.

 

[bkp_duke]

Yeah that is all before your take home pay so it is untaxed. For the average family in the US those health insurance taxes and out of pocket is far more than you. I am not talking about Medicare. Health Insurance premiums and out of pocket IMHO opinion is a tax since unless you clueless you must pay. It may be a payroll deduction, but in reality it is a tax.

You are moving the goal posts, and I've covered problems with the US healthcare system in the past, not going down that rabbit hole again. Look how far off the topic of this thread we already are.

 

[ohmman]

I understand, and appreciate that view.

Now, here is my counterpoint. This isn't the early 1900s. The population is FAR FAR more mobile than previous generations. Already I can move to Puerto Rico and get a 0% tax rate (plus whatever RE tax is). There are a TON of the wealthy and business owners that have been doing this in the past decade. Additionally, while my wife was born in the states, here parents were not. They have discussed moving back to their home country multiple times, and if tax rates go higher, I would consider that.

Case example - Elon already moved out of CA to reduce his tax burden.


The days of even close to 90% marginal tax are done with, never to return. The "rich" are far too mobile, and pushing their rates up too high will just push them out, and then you get nothing, not a penny.



Also, it kinda chaps my ass a bit when I see people on the socioeconomic scale far lower than me milk the system to not pay taxes. Example, had hundreds of thousands done in exterior work for a pool + landscaping on the house we bought 5 years ago. The workers insisted on being paid in cash, they would not accept even checks. I wasn't inclined to report them but anyone that thinks tax-avoidance is a "rich man's" game is not paying attention to the world around them.

I think it's worth looking into the concept of what they call "millionaire flight," because most of the work done on it shows that while it definitely occurs, it has a very small effect size.

Cristobal Young wrote a book on it.

I moved from Texas TO California, which meant adding a 13.3% top tax burden to my earnings along with cost of living increases. To some, place matters more than the finances. But there's also work showing that we're just as miserable no matter where we live. So there's that..

 

[Crutonius]

Honest question. I pay >50% of my earnings each year to taxes (fed, state, local, real-estate). What is "fair" in that situation?

"Fair" isn't a reasonable way to look at it. Fair would everyone paying the same amount. The budget of the government divided by the number of the adults in the US. My figures are probably not quite right but I think it works out to be roughly 28k for every adult. That's pretty close to the median income of the US. We'd have to slash about 90% of the budget to make "fair" work.

What should we cut to make things fair? The military? Social security/Medicare? The police? The FDA? Nasa?

 

[mspohr]

I think it's worth looking into the concept of what they call "millionaire flight," because most of the work done on it shows that while it definitely occurs, it has a very small effect size.

Cristobal Young wrote a book on it.

I moved from Texas TO California, which meant adding a 13.3% top tax burden to my earnings along with cost of living increases. To some, place matters more than the finances. But there's also work showing that we're just as miserable no matter where we live. So there's that..

I agree.
I think that "millionaire flight" is vastly overestimated.
California attracts and keeps rich people for lots of reasons.
Texas is rated best state for low taxes and worst state for quality of life.... where do you want to live?

 

[ohmman]

Texas is rated best state for low taxes and worst state for quality of life

My quality of life in Austin was pretty great. Weather was miserable mostly, but otherwise I loved the place until I couldn't stand the heat anymore. I had a great 20 years there and will always think of that place and time fondly.

 

[ElectricIAC]

What should we cut to make things fair? The military? Social security/Medicare? The police? The FDA? Nasa?

.gov in general is way over-bloated so start there.

Put Elon in charge of cutting staff.

 

[bkp_duke]

"Fair" isn't a reasonable way to look at it. Fair would everyone paying the same amount. The budget of the government divided by the number of the adults in the US. My figures are probably not quite right but I think it works out to be roughly 28k for every adult. That's pretty close to the median income of the US. We'd have to slash about 90% of the budget to make "fair" work.

What should we cut to make things fair? The military? Social security/Medicare? The police? The FDA? Nasa?

I don't really care. My point, you have a limit that you hit on the wealthy where we will say enough, and then just leave. I'm close to that limit, and I already have had neighbors pack up and move to other states to reduce their tax burden.

 

[ElectricIAC]

I agree.
I think that "millionaire flight" is vastly overestimated.
California attracts and keeps rich people for lots of reasons.
Texas is rated best state for low taxes and worst state for quality of life.... where do you want to live?

Quality of life is fine: Just take a vacation when you’re bored of the scenery.

Taxes are okay considering our high property tax rates but no income tax helps.

 

[BitJam]

SK has made dozens, perhaps hundreds of millions of dollars off his content. And he's complaining over the cost per month of something around a Starbucks trip per month?

That makes someone look bad, but it's not Elon.

So we agree Stephen King is a content creator and, despite your previous claims, Elon wants to charge content creators on Twitter, not pay them. Good to know. Also, I didn't claim or imply in my previous post that this made Elon look bad, I implied it made you look wrong. I guess the simple civility of admitting mistakes is just not fashionable anymore.

But I would dispute that this makes SK look bad except, perhaps, to ardent EM fans which is bizarre because they would be endorsing the idea: "you have so much money, give me some even if I don't deserve it". I think/hope we agree it's common sense that creators should be paid to create. I don't see how SK repeating this common sense makes him look bad. OTOH, Elon has been roasted near and far for his business plan of turning a profit on Twitter by charging creators to create. It's not a good look.

I'm still an Elon Musk fan but he makes it difficult at times. He's human and like all of us he does good things and bad things. Like all of us he makes mistakes. My biggest hope around his Twitter venture has been that he will quickly learn from his mistakes (instead of doubling down on them). He's a smart guy and can learn fast. Unfortunately, refusing to admit his mistakes does not bode well for his learning from them.

BTW: Jake Broe had an interesting take on Musk's controversial tweets:

TL; DW:
I think he's adopted this policy (comparable to Donald Trump) that all press is good press. I think he's been doing this deliberately. He makes himself a spectacle.

 

[bkp_duke]

My quality of life in Austin was pretty great. Weather was miserable mostly, but otherwise I loved the place until I couldn't stand the heat anymore. I had a great 20 years there and will always think of that place and time fondly.

My friend, a former VP at Tesla, left the bay area for Austin (and splits his time in Miami as well). He said among management at Tesla, there was nearly zero pushback from anyone about moving to TX, everyone was happy that their taxes were going to drop.