IDK what Bezos made as "income" last year but paper gains in asset values are not "income" for tax purposes, though some people might look at the increase in his wealth and call that money he "made" that year. But we don't have a wealth tax on a federal level at least.
My networth increased by $600k in the past year, but my actual income after taxes was a quarter of that. I haven't sold and collected gains, but it still feels like I "made" that much money in that span of time, especially since most of the appreciation came from RSUs. I'm just choosing to not convert it to cash.
He pays income tax just like everyone else. But the majority of his money is in investments, which many Americans already do as well with 401k and personal brokerage accounts. The people who can't afford to invest like that already pay close to 0% income tax as 40%-60% of households, historically, have paid 0% income tax in the US.
I 100% agree. Roosevelt implemented that in 1935 and it was meant as a safety net for social security. Economists estimate that by 2035 social security, as its currently structured, will no longer be able to fund the aging population.
Instead, a better alternative is to invest that same amount into an ETF that tracks the S&P 500 and after a 40 year working career the individual would have almost $5 million assuming a median wage and current employer matching on payroll tax. This would give them a yearly $200k payout which grows at 6% per year if they follow the 4% rule on withdrawals, lasting them indefinitely and leaving something behind for their children when they pass away. In contrast, social security right now, on average, pays $26k per year.
This would also generate federal taxes through transactions of the companies composing the S&P 500 which would give the government an additional tax revenue source.
The trouble with "investments did better" is that they did so in considerable part due to 40 years of trickle down economics that swung the pendulum away from labor and towards capital. The pendulum is slowing, so that trick is extremely unlikely to work twice. If that's not concrete enough for you, we can talk about what it would take to swing the pendulum as far in the next 40 as we did in the last 40 and this thought experiment will make it obvious that this approach makes the social security trust fund look like an exercise in sustainability.
Payroll taxes were capped because the related benefits were capped. We could uncap either or both ends of that. Although removing the cap should have been unnecessary if the government acted responsibly, and the removal of the cap would not force them to act responsibly in the future.
He only paid income taxes on $80k while at Amazon.
The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax and taxed at no higher than 20%
The wealthy in NYC pay the top Federal 23.8% LTCG rate, + the top New York State income tax rate (10.9%) + the NYC income tax rate (3.876%) on their long-term capital gains.
> The wealthy often make their money as capital gains, which if they held for at least one year, are exempt from the income tax
Not even close. As your link shows, "the wealthy" pay taxes on long-term capital gains. The lowest rate (for "the wealthy") is 15% but they can owe 20% or even 28% in certain circumstances.
Stock is easier to sell, yes, but it's still just a gain on paper until you actually sell it. Otherwise, those gains could be lost next year. Or tomorrow.
Now this is just disingenuous. As if the net worth of Jeff Bezos and the rest of the Epstein class was somehow threatened by market fluctuations or some high-risk investments.
As long as the economy continues to grow, these people will thrive. All while avoiding to pay their share for society.
This is well known. The question is whether they should be. It's not some immutable law of nature, it's a deliberate policy choice to tax returns on capital differently from returns on labor.
I don't think it's all that well understood. People see a headline that Bezos "made" $X billion last year, when that was the increase in his net worth, not that he actually was paid $X billion in cash income. Then they complain that he didn't pay taxes on any of that.
Whether or not we should have a wealth tax and at what level that should apply is an entirely separate issue. I'm quite sure Bezos pays all the taxes he's legally obligated to pay.
Few people think the ultra rich are illegally evading taxes. The issue is exactly that they’re paying all they’re obligated to, and it’s not very much, relatively.
You’re really strawmanning here. Instead of arguing as if we’re morons who don’t know that unrealized gains aren’t taxed and think Bezos is committing tax evasion, convince us of why it’s wrong to think that Bezos should be legally obligated yo pay more, maybe by taxing those unrealized gains.
