>Tesla Motors Inc., SolarCity Corp. and Space Exploration Technologies Corp., known as SpaceX, together have benefited from an estimated $4.9 billion in government support, according to data compiled by The Times.
http://www.latimes.com/business/la-fi-hy-musk-subsidies-2015...
Not bad compared to the $12 billion cost for the GM bailout and $4 billion+/yr for oil & gas subsidies.
[1] https://en.wikipedia.org/wiki/DARPA_Grand_Challenge
[2] https://en.wikipedia.org/wiki/National_Renewable_Energy_Labo...
He is far from being the sole owner of those companies.
Basically, you take revenue, divide it by the poverty level (he's got six kids, so around $45k - $50k), take the log base 10, and multiply by some constant that would be the same for everyone to match the government spending level - that constant these days is probably around 9 or 10. The result is your fair tax rate.
I'll go as far as to say simplicity should be the driving motivation, not equality.
Do you mean that if someone earns R, they pay $C*log10(R/P), where P is some poverty level for them and C is a constant around 9?
To find C, you have to sum up the log10(R/P) for everyone (including corporations) in the nation and divide that into what the government needs. There's various ways to calculate what the government needs, perhaps you separate FICA and payroll tax income entirely if you keep that, or perhaps you just look at entire Federal spending, I believe around 3.8 trillion.
But to sum up the log10(R/P), you need income distribution data. Someone else did that very roughly with a spreadsheet, I haven't tried it myself. A few years ago when they did that, they figured 3.7 trillion for spending, and C was something like 8.86.
C would also be a bit higher if you were also trying to pay down the debt over a period of time.
If the tax itself is proportional to the utility function, that has the effect of taking much less utility from people with greater R. I'm also unclear on how your C works out. The largest company in the world makes less than $1 trillion per year, so even if P is $1, log10(R/P) is bounded above by 12. Given a US budget of several trillion USD, that seems to make C multiple orders of magnitude bigger.
Sorry if I'm missing something. That was my original reason for asking for a formula above.
It's always interesting to see the opinions of different cultures about how much tax is reasonable :)
Here in he US the middle income pays taxes and receives almost no directive social benefit, as most social programs are geared towards lower income and the rich can afford accountants and lawyers to keep their tax burden very light.
The only techniques that apply to income taxes are the "borrow against stock technique" (has a big caveat about a rich person who lost in court when he used it) and the deferred compensation example (which is also zero liquidity; presumably you pay all of the income taxes when you actual get the money).
The article makes a better case for ways to avoid death taxes or real estate taxes though.
The top 5% in the US pay 55% of all Federal income taxes.
I'm not sure how entrepreneurs do this in the US, is Musk being patriotic paying so much taxes, or is there really no way to delay/avoid having to sell stock to pay taxes?
I think you're missing his point. The raw percentage isn't as unreasonable as the difference between the parent-poster's and Musk's tax rate.
At some point, theft becomes a more suitable word for it.
In 1958, the top 3% of taxpayers earned 14.7% of all adjusted gross income and paid 29.2% of all federal income taxes. In 2010, the top 3% earned 27.2% of adjusted gross income and their share of all federal taxes rose proportionally, to 51%
https://www.wsj.com/articles/SB10001424127887324705104578151...
Moreover, the law enforcement that prevents him from being robbed is paid for by tax revenue, but not federal tax revenue, and the amount he's paid is in addition to the $593 million he paid in income tax (assuming that doesn't account for state income tax - the actual article isn't available for me to read right now due to server load).
Not only are his financial institutions protected by federal law enforcement, but state and local law enforcement recieves federal funds, so the above claim is false on several grounds.
Edit, to respond to your edit, which added "Also, who mentioned federal tax revenue or income tax? It wasn't me."
The title of the article we are ostensibly discussing.
Assuming some keeps some share of his money in US banks, or invested in firms which keep their money in US banks, absolutely. Well, "bank robbers" instead of "muggers and highwaymen", but I'm assuming that Musk doesn't carry enough cash on him that the latter are nearly as important as the former in terms of risk to his money, though they might be a bigger threat to his personal safety.
If your assertion is that you're referring to all forms of tax revenue, then your original post should probably not refer to tax rates. Otherwise, if you're just arguing in favor of all taxes, then it seems overly broad for a discussion on income tax revenue.
Either way, we've had public ways that existed without having been funded by any forms of taxation. Unless you're specifically attempting to pick the only definition of the word that bolsters your argument, while ignoring all other definitions, then it remains a truism that highways themselves do not exclusively originate from tax revenues, and are in fact capable of existing without taxes altogether... and it remains true whether or not one considers taxes to be universally good, bad, or anywhere in between.
Traditionally, all the things you mention are NOT paid for by income taxes even now.
Did I say income tax revenue or just tax revenue?
That leaves him with $747M for the year.
I'm not sure what this is supposed to suggest/demonstrate.
Surely you agree that taxing (say) 20% of 60k is different from taxing 20% of 1B. Namely: the former has a much more significant impact on quality-of-life then the latter...
Figuratively speaking, what can you do with 747M that you can't do with 300M?
(Before the pedants inevitably pick this rhetorical question appart: the point is that it's not prima facie unreasonable to tax extreme wealth significantly more heavily than the median income)
Edit: the first of the pedants have arrived... sigh...
Invest in starting brain-computer interface and rocket companies
A more substantive question is how that money would be spent by the relevant parties. I would argue that Musk would spend it better than the federal government and as such, he should have it.
The idea that the argument is stupid should be presented with an argument as to why. For what it's worth, we have existing law in most (American) municipalities that support the argument that if Musk can be shown to be a better steward here, then he might have a claim to make, i.e., adverse possession, which is basically a claim against the state that says "I can tend to this property better than you, and my doing so provides social and financial utility to the state, to my would-be neighbors, and to myself as well.
To be sure, it's an argument in abstracts, but there's precedent enough that it clearly isn't an entirely meritless (or stupid) argument to be made.
Also, in the mid 20th century (a very high growth time for the US) personal income tax topped out around 90%. "Harsh" is definitely a matter of perspective.
I like the fact that I get great weather year round, that I live amongst a diverse group of people, and can get just about any kind of food I want very close by. I like that my child will go to school with people of all colors and religions and beliefs. And my cost of living is lower in the sense that I don't have to pay a ton of money for heating in the winter and cooling in the summer, nor for a bunch of clothes I can only wear 1/2 the year.
As for the business, yeah, it's not great, I'll admit that. I don't like paying extra corporate taxes for no apparent reason (I'm incorporated in Delaware, why am I paying CA tax?). And I may not even hire here, since I'm fully remote and hiring in other states is viable for me.
But if I were going to open an office and hire local, I would most definitely do it here in California, where a lot of the talent live and a lot of the people I would want to hire who like the same things I do.