Honest to god, I'm kind of stunned by the people with tens to HUNDREDS of millions, liquid, that will go great lengths to avoid, even evade, taxes. You see people move to other countries for "tax purposes" alone. Or people that will create elaborate schemes.

Of course, I understand that if you're in that wealth bracket, the actual tax/accounting acrobatics is abstracted from you. You probably hire some consultant to do all the work, and in the day only pay a fee to get your tax cut by x.xx%. That's zero work for you, minus whatever time you spent on a meeting with the consultant.

But still, there are people that will be heavily involved in these things themselves.

Yes, it is a polarizing topic. Some people refuse to pay taxes because of how the money is spent - or they have some idea of how the money is spent. But from a pragmatic point of view...what's the difference between sitting on say $500MM in cash, and $800MM? It's either way going to be more money than you'll ever be able to spend. Hell, even the safest investments at that scale will yield more money than what most CEOs make in a year.

(With that said, I do have sympathy for the people living in countries where you have to pay wealth tax or tax on unrealized gains, which for founders means

1) taking out loans to pay taxes

2) increasing their yearly compensation, just to meet their tax burden or

3) to sell their equity

But these aren't really in the "exit" bracket)

> what's the difference between sitting on say $500MM in cash, and $800MM?

At least $15M a year over most 3 year horizons, or the insane compounding effect of $300M invested over the long haul. Your question makes sense from a "normal" perspective, but doesn't once you're UHNW [0].

> It's either way going to be more money than you'll ever be able to spend.

Not even close. At UHNW levels there are whole classes of things to "spend" on that ramp pretty quickly into 8, 9, 10+ figure values. Influence, power, status, prestige, legacy, ideology, politics, rinse, repeat. And the UHNW "brackets" are a real thing (you're either in the tres commas club or you're not, etc).

Sure, pay your taxes. But once you crack these numbers there are entire industries dedicated to helping you work the system, and it's unfortunately pretty workable (because there are substantial interests lobbying to make/keep it so).

[0] - https://en.wikipedia.org/wiki/Ultra_high-net-worth_individua...

I agree.

"UHNW" people are crazy, evil and dangerous. There is no amount of stuff that will ever satisfy them. They will consume, and cheat on taxes, obsessively - until our natural world is destroyed.

It has come down to us vs. them. We didn't start this fight, but we are going to have to finish it.

You've got this class of people telling the rest of us we can't have decent affordable healthcare of places to live while they consume our entire life's salaries worth of resources on luxury items. Society simply can't afford people like this.

>At least $15M a year over most 3 year horizons, or the insane compounding effect of $300M invested over the long haul.

How about the insane compounding effect of a better funded society, through less multi-mill/billionaire tax avoidance?

>Your question makes sense from a "normal" perspective, but doesn't once you're UHNW

Or rather, it makes sense from a normal (non quotes) perspective, but not from the point of a power hungry sociopath.

well, what's the ROI (or fiscal multiplier in econ speak) of spending 300M on housing vouchers but not building more houses?

or founding more border patrols instead of local police? or funding local police, which then spends it on legal fees to fight against releasing body cam footage?

also note, that I'm not saying the people who optimize away their taxes spend it better (yachts! country clubs in the middle of the desert!)

There's a reason that every stupidly wealthy person who wants to throw their resources toward some goal either funds or starts a charity for the specific mission.

That's dependent on believing that your government spends money effectively.

> insane compounding effect of a better funded society

this "compounding" is not captured by the private individual, where as the compounding from the saved taxes is.

If you don't take tax at face value and see it as an optimization game, and only focus on what is to be gained (or what is to be lost), I can easily see why one might want to minimize their tax liability. To what lengths would you go to save 100'000$ a year? I don't earn that much, so I'd probably do a lot, as long as it's legal. I hate to advocate for the devil here, and I do believe everyone should be paying their fair share, but I don't think this issue is clear cut at all. Some ways to decrease one's tax liability exist due to government policies to encourage a particular behavior, sometimes it's to subsidize a behavior or a status quo. Tax isn't just a way to transfer wealth (but it often seems to be, and often is for the poorer part of countries), but it's also a way to shape behaviors. The unfortunate fact is that trying to incentivize or disincentivize certain behaviors for a large body of people will often introduce loopholes that can be exploited. However, some incentives end up being vital some livelihoods or behaviors that the country depends on. Not to say there aren't any cases where the loopholes are unambiguously bad.

If you don't see 800M as being different from 500M, then you'd just stop at 500 and never end up in that situation.

Your basic premise is flawed.

People don't become billionaires by paying their fair share and not screwing people over. I remember hearing jokes about how you need to be a sociopath to be a great business person, but the reality is that in order to maintain and grow massive wealth, you need to be willing to take advantage of others for personal gain and pay back literally the least you can get away with. Playing fair is for suckers.

Note that I'm not even talking about taxes. But tax avoidance also becomes a lot easier the more money you have.

Well, I, for one, have no such sympathy. I file that under "pay your damn taxes."

My brother's life was paid for by taxes. Went to the ER with a headache, turned out to be a brain annurism leading to 2 8rh plus surgeries and a month in the hospital. Bill was paid out of Minnesota state taxpayers fund. Otherwise he would have been bankrupt for life -- and without the surgery that life would not have been long.

My wife's life was saved twice by tax-funded health care. Won't share details here.

I happen to enjoy quite a few government services. Like "roads".

I'm happy to pay taxes.

I don't always like the way they are spent. I also don't like everything about my job, and if I had a dog I could probably find things about it that I didn't like.

Life is compromise.

Bingo.

When I left home at 15, I got into crime, as no-one would hire a smelly homeless kid.

Then when I turned 16, I was able to get a social security payment for "independent youths". I wasn't living in the lap of luxury, but I could actually pay rent in a flat and buy food, without committing crime.

So now that I'm earning a very decent wage as a dev, paying my taxes is the very least I can do to contribute to a country that supported me when I needed it.

It makes sense that people who benefit disproportionately from social spending would be pro-social spending, and vice versa for people who pay disproportionately more into the system. It troubles me to see comments here acting like the rich are all sociopaths, when really, everybody rich and poor is generally going to favor what is in their own best interests.

It troubles me to see apologist comments here for ultra wealthy tax avoidance.

Everybody avoids taxes to the maximum extent allowed. It is ubiquitous and expected.

You can literally defend almost any action by the argument that they are just maximizing their gains. Clearly they are. Should we roll over and accept it?

Well, it turns out that all conservatives and libertarians are VERY independently minded until they have a need that isn't covered by whatever the hell they're using to pull bootstraps with. Then suddenly they see a collective need for action for their particular issue.

I was going to say that this article should be titled “how to steal from society”, so I’ll join you in downvote-city, comrade.

I really think the opportunity zones were created for precisely the purposes described in the article. We’ve made a strategic decision to forego taxes in certain areas in order to incentivize investment in poor (traditionally minority) areas. The rules were created specifically so that people would use them.

It would rise to the level of cheating if you abuse the rules. Investing in an opportunity zone, starting a business there, improving property, employing people, re-investing there. These are all the intended effects of opportunity zones.

It seems like an awesome loophole, but it’s not. The hole was put there deliberately. It’s meant to be used.

If you’re curious, take a tour of your nearest opportunity zone. Imagine starting a business there. Imagine your employees shopping at the bodega on the corner, grabbing lunch on the street, using the run-down auto repair shop because it’s convenient. If you’re willing to locate your business in an area we’ve decided we want revitalized you can realize tax benefits. But there’s some risk, so do it with open eyes.

Reducing your taxable income is stealing? So if I contribute to a Roth IRA, I am stealing too?

Depends on the spirit of the reduction and income levels. A Roth IRA was designed specifically for wage earners to have a tax-friendly investment vehicle to save for retirement. This benefits them and society. I don’t think you can say the same thing about the OP here.

The 401k was a literal tax loophole - it was never intended to be a tax-deferred retirement vehicle. Some accountant just noticed it in the tax code and figured that most Americans could actually take advantage of it.

https://www.northwesternmutual.com/life-and-money/your-401k-...

I assume you're sticking to your morals and don't use the 401k loophole?

> This benefits them and society. I don’t think you can say the same thing about the OP here.

The OP is given a tax incentive to build businesses in depressed economic zones and low-income areas.

Both roth ira and this special tax "loop hole" are incentives the gov't implemented to encourage a beneficial behaviour.

The spirit of the tax benefit, like all tax benefits, was to help some special interest avoid their taxes.

I'd say if you did what Theil did and use your Roth to purchase your own startup, yes. If you use it to play the market or invest in index funds, no.

"How to take money from society whose elected representative set up a specific program to hand out"

Which I also refuse to take, myself, but for different reasons than refusing to steal.

Intent matters. Opportunity Zones are set up to incentivize actual businesses providing services to the local community, not to serve as vehicles for far-away rich arseholes to cheat money out of the taxman.

But if the rules don't enforce that, and allow far-away rich arseholes to use these zones to cheat money out of the taxman, then that's sloppy legislating. The loopholes need to be closed. Relying on the goodwill of people whose primary unifying characteristic is the hoarding of extreme amounts of money is a bad idea.

I agree and disagree.

I agree that it’s sloppy legislation and to that end the group to blame is the government (and ultimately the people).

But I disagree that if the rules don’t get enforced that it’s seemingly “ok” for people to exploit it. They should have common decency and ethical guidelines here. Probably why I’m not one of them.

I didn't say it was ok to exploit it. I say it's unavoidable that people will exploit it.

I do wish we could run society purely on goodwill and people's intrinsic morality, but we've got a society that pushes people to crave more and more wealth, and those two don't go together.

Maybe every society everywhere.

The fact is that wealth and power protect themselves and always have.

While crafting a fair society we must recognize this and deliberately skew the rules to favor those without wealth and power. In the US we mean we’ll but have utterly failed to do so. Our legal system is a prime example. The fact that we more often tax minimum wage workers than billionaires is another.

Our society is shamefully unfair. But I actually think opportunity zones are a step in the right direction.

I apologize. The reading I had was you were kind of nonchalant about it in an almost accepting way. Though, I'd say there are many who would say it's ok "because you can", and I think they're irresponsible and disrespectful of themselves and their fellow humans.

I certainly don't think 'legal' necessarily implies 'moral'. Sometimes they're the exact opposite. There are also things that aren't legislated that should still guide us.

For example, it's not illegal to be an asshole to someone. But that doesn't make it okay either. It's not something that's ever going to be legislated, and I don't think it should be. Tax rules, on the other hand, should be legislated, because the same people will always take advantage of them if they can. I don't see purely voluntary tax as working (though a certain type of libertarian loves to suggest exactly that).

The problem is a fundamental disadvantage in available manpower. Billionaires employ literal armies worth of extremely well paid lawyers, accountants and other professionals continuously working on finding and exploiting loopholes involving multiple jurisdictions, whereas most of the public services sector is barely keeping up. (Yes I'm aware that especially at the federal scale, the ultra rich sometimes outright buy special tax breaks, but that's not the case we're talking about)

The solution would be to allow punishing breaking the intent of a law, but given how politicized even the justice system is these days, I'm not so sure if that's a good idea either.

If you could specify the intent in a way that could be adjudicated, why couldn’t you just write the law better in a different dimension? “This applies only up to $X M/yr” or whatever.

Having someone later come along and try to devine what the “true intent” was and levy punishments for behavior clearly allowed by the law but against an imputed intent sounds worse for society based on laws than the avoidance of some taxes via a poorly written law.

The solution is tax reform. Make taxes and social programs broad and simple.

“This rule sucks because someone might cheat and not follow this rule.”

No people who cheat suck.

The rule of followed actually brings a lot of investment and improvement to areas that need it.

But the rules require that work be done in the area, that property be improved, that gains be reinvested in the area. Rich arseholes who never set foot in the area can still pour buckets of cash into areas WE DECIDED need it most.

This is HN. we welcome diversity of views. this view you espouse, is not actually a minority view, but still, its a divisive topic.

I'm a high tax kinda guy. If we all had Norway taxes, we'd have Norway sovereign fund and EV and lifestyle (but maybe without SAD, because we're not all that far north)

Norway oil is way more relevant for your thesis than Norway taxes

Yea right, so is the German oil for Germany. /s

You seem to be quite the expert on Norway. Can you elaborate how they prop up social services with oil money?

Why do you feel offended?

OP had the thesis that the "Norway sovereign fund" is funded by high taxes. This fund is also known as the "Oil fund": The Government Pension Fund Global, also known as the Oil Fund, was established in 1990 to invest the surplus revenues of the Norwegian petroleum sector.

Conclusion: The Norwegian society is not just rich just because you are that smart. You obviously had a good portion of luck.

I believe the parent comment is referring to this:

https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

Lol, don't speak about high taxes if you don't even know how Norway and oil go together...

lol not like the us could do the same.

So does Texas and Alaska, and even California?

Doesn't Alaska provide a small basic income for its citizens funded by oil revenue?

Norway oil [with a visionary who helped guide its investment] is more relevant.. https://news.ycombinator.com/item?id=19594153

The US has 6.7x more oil reserves than Norway: https://www.worldometers.info/oil/oil-reserves-by-country/

So US has around 9x less per capita since only ~5 million people live in Norway?

Since people are misreading this comment, either deliberately or because I have not been clear enough, I am going to assume good faith and edit the comment to be more clear.

---

And 6.7x the amount of the Norwegian Government Pension Fund Global exceeds the entire annual budget of the US government.

https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

https://datalab.usaspending.gov/americas-finance-guide/spend...

Imagine if the US could just magically borrow from next year's budget, but at zero cost? That's the net effect of having an entire additional several trillion dollars laying around.

In hard numbers, that 6.7x works out to around $9.3 trillion, of which it's a pretty safe assumption that you can "borrow" around 3% of it annually, forever. That works out to around $280 billion.

It ain't chump change. We could easily end homelessness in the US with that amount, and have much more left over to do even more social good.

https://www.verifythis.com/article/news/verify/social-justic...

After we take the 50-ish billion a year it would take to eradicate homelessness (keep in mind, we can sustain this in real terms approximately forever), let's move on to higher education. The Debt Free College act would reportedly cost the US $75 billion a year.

https://educationdata.org/how-much-would-free-college-cost

No problem. We've only spent half of what we can borrow in perpetuity from the future with this hypothetical sovereign wealth fund laying around.

Let's go for the triple crown and give everybody universal, employer-independent health coverage.

Oh, guess what? That was a trick. Implementing universal healthcare, simply replacing premiums by taxes, would save the US many more billions of dollars we could put to good use doing even more social good.

https://www.citizen.org/news/fact-check-medicare-for-all-wou...

Or maybe it would cost an additional $149 billion. Who cares? We're still under budget.

https://www.thelancet.com/journals/lancet/article/PIIS0140-6...

And, so, now, we've reached a point where nobody in the US needs to ever worry about student loans, medical costs, or homelessness again. (Well, okay, not nobody -- we still need to figure out something for the people who have taken out student loans already, but I think we can probably handle that.) It's not quite the extensive welfare state that Norway has, but it's pretty damn close.

Guess what happens to the labor market under those conditions? If you said "it becomes much more like a free market," you guessed right! And who can argue against that, really?

Comparing a pension fund, which is designed to pay out over, well, indefinitely, to an annual budget, makes no sense. One is a rate. One is a total. It's like saying you can fly 400 mph but the earth is only 90 mega-miles from the sun and since 90 is less than 400 the sun is not that far.

Numerology doesn't work in economics.

The fact is that Norway has this luxury solely through massive per capita oil wealth. The US cannot come close to this.

Norwegian taxes are not too far off from CA or NY taxes to be honest. The marginal rate tops out at under 50%.

It’s worse for capital gains and they have a wealth taxes so a lot worse for some.

I'm not sure the top marginal rate is relevant unless you compare at what income it kicks in at?

The top CA or NY bracket is dependent on the top US federal bracket which kicks in at $537,000.

Not to mention the <cough> 25% VAT in Norway.

This only applies to the upper middle class not the insanely rich though. Anyone who hires a tax attorney is not paying high taxes in this country.

That's just not true. The top 1% pay 33% of the tax (and the top 10%, "upper middle class", pay 70%). I think myth just causes confusion and misplaced anger.

Yes, but these stats obviously take into account only paid taxes and wealth that remains visible. If you have 50 bn$, of which 1 is kept and taxed locally, and 49 moved through shell companies to offshore tax heavens, you'll still end up as one of the top tax payers, even if you are evading about ~5000%. Obviously this is much harder to do if you earn 200k/year.

Yes, if the top 1% paid their fair share, they would pay more than 33% of the country's taxes. But nevertheless they do in fact pay 33% of the country's taxes.

so is not paying more than their per-capita ratio not a fair share? I think 33% for a 1% cohort is quite large.

Why does the relative amount of tax paid against the total networth matter in this instance?

Would you have someone who's broke and unemployed pay the same amount of tax as a billionaire?

Ideally taxes shouldn't be a large burden to anyone. The richer someone is, the larger absolute amount of taxes that person can pay for the same burden level. In fact, it's not just a fixed percent. The richer someone is, the larger percent of taxes that person can pay for the same burden level.

The rich got to where they are by using the infrastructure built by the government. A rich person gets more value from the government than a poor person, so thus it's fair that a rich person pays more in taxes.

What proportion of wealth do they have access to?

I don't think anyone has done the legwork to link "your taxes" and a moral aspect. There are a lot of basic unresolved questions (if Jeff Bezos pays more in taxes than you earn in your lifetime, has he payed his fair share? Why/why not? Are the standards used to work that out some sort of objective moral or just a reflection of personal interest speaking? A suspicious number of moral justifications involve other people paying all the taxes & not the moraliser). And a company like Apple has had a bigger positive influence on my lifestyle than a large number of government agencies. Some of those agencies are trying to make my life worse as far as I reckon it.

If the law says some entity must pay X tax it is uncertain what it would mean, in practice, to claim "their taxes" were really Y, some other amount they aren't legally obliged to pay.

> The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.

A business is a hypothetical entity, a term for a system of organising people to do things. Things that are measurably in high demand. It is profoundly uncertain that diverting money out of those systems is a good idea. Observing that businesses rely on their context does not start or end the argument about how much tax they should pay.

Why? Is there some correlation between the amount of capital gains I’ve made and the amount of money society needs? If I were to make less in capital gains does that mean society is missing out in some way?

I pay federal income taxes, payroll taxes, medicare and medicaid taxes, social security taxes, corporate taxes, state income taxes, city income taxes, property taxes, and more.

Why should I then pay a huge capital gains bill? Why should I feel morally obligated to do such a thing?

I think you’re missing all the taxes paid along the way to achieving a billion dollar business. For me it’s 47% per year. Far more than I would consider my fair share considering most people pay an effective rate of 0%.

As an American, I'd be more excited about taxes if I had access to affordable education, affordable healthcare, a well maintained infrastructure, and general social safety net. Now that I'm living outside of the USA & still subject to USA taxation, I'm even less excited about it.

Take heart - I filed Dutch taxes in 2021 and not American, for the first time! It's somewhat more but every single day I see the results of my taxes.

Still, if the tax loophole exists, it's hardly surprising that people use it. People should pay their taxes, but the government should also close these tax loopholes, or at least be a lot more strict about how they're used; I can imagine these opportunity zones exist to make it more attractive to set up shops and small businesses here in order to develop the area. It's not meant for app startups with billion dollar exits, so the rules should exclude those.

> It's not meant for app startups with billion dollar exits, so the rules should exclude those.

Adding more rules is generally favorable to the rich. The real solution is removing special-interest tax benefits like this in the first place.

This is not finding some mysterious loophole though, but using a government designed program.

I think it is sad they exist, but clearly they are there to be used.

Have an upvote, I don't understand greed, why wouldn't you want to be in the fortunate position of having to pay CGT, it means things are going well.

> Unfashionable thought: pay your damn taxes.

>~ braces for inevitable downvotes ~

If you get downvoted it will be because you stated an opinion that is in no way controversial among these demographics and then pretended like you were making some noble stand based on principals when in reality you were just the first person to come along and say what half of everyone was thinking and you weren't really risking much blowback.

The problem with taxes is that all the money effectively goes into a black hole from where senile, clueless or malicious politicians can draw to give to their friends, fall prey to unscrupulous suppliers (or be complicit and get a kickback, allowing them to "launder" public money into their own pocket) or spend it fighting stupid battles all while the country is falling apart (the UK as an example is notorious for constantly beating the "internet filtering" drum - low-income kids are starving and families can't afford heating bills, but porn on the internet is obviously a bigger problem).

I won't downvote and I agree with you in principle and wish I was lucky enough to live in a country where I can actually feel like I'm getting value out of my tax money, but as of right now that's not the case so I can totally understand tax evader's positions.

This isn't a loophole as much as a completely designed tax break.

That's a different deal than some body squeaking around tax law; this was all about trying to change parts of the nature of capitalism's tendency to rerun money to capital more than to labor.

If you think it's misguided, I do too. Though I think it's good to invest in under invested areas, I also think we need to counteract the effects of the Henry George Theorem and also redistribute money from the land rents to people that do not own land.

Both are necessary to try to make our economic system more fair and more efficient. The fewer people that are allocating capital in capitalism, the worse it works. And pretty much all positive defenses of capitalism start with assumptions that most people are starting from somewhat similar places of wealth, or at least enough wealth that they are not destitute. Until we have that base level of security for all, we need things like massive redistribution, which includes carrots like opportunity zones, as well as sticks like taxes on land and monopolies.

> This isn't a loophole as much as a completely designed tax break.

I strongly doubt that the outcome here is the intent of the tax break, which seems to be "pump money into poor areas and we'll let you off the CGT on the amount you invested in the area".

She "re-invests" a thousand dollars by starting a company that is just a few people in some co-working spaces, and walks away a few years later with hundreds of millions extra.

If she'd started a major factory employing large numbers of people in the local area then sure, that seems like the intent.

The business is hypothetical in the article, but the hypothetical is a software business, and is making money. So they didn't "just place people in some co-working spaces", they did work as employees and got paid, which brings in economic activity to a depressed region. Seems to be exactly what the tax break is intending.

This is much better a tax break than a city bidding for an amazon HQ with a custom tax break deal that they have to compete with other cities!

> So they didn't "just place people in some co-working spaces"

It's quite literally what the article explains.

> they did work as employees and got paid, which brings in economic activity to a depressed region.

The regions are tiny, walkable across in the article. They're not bringing in workers to live, build a family and spend within a large metro area - they're "a space nearby a university". The economic activity brought in is a small number of employees buying some coffee, maybe lunch and then going home.

> Seems to be exactly what the tax break is intending.

You think that spend in co-working spaces is what the government wants to give up hundreds of millions of dollars for?

Capitalism these days feels akin to joining a game of monopoly where everything has already been purchased. But feel free to have a jolly time going around the board and paying rent :)

Well, monopoly was introduced as satire in the first place in fact! A way to showcase some absurdities of capitalism

Not exactly a critique of capitalism, but of private land ownership. The Landlord Game was created by a Georgist, and Georgists consider land and capital to be entirely different economic factors with entirely different behaviors. Marxists often consider Georgism to be capitalism's last gasp.

At least in capitalism you can start a new business. The folly of the Monopoly board game is the limited spaces which makes things a zero-sum game. The world is only zero-sum when the government doesn’t let you build new stuff through artificial constraints. In a free market always get new stuff.

I can't think of a single thing that isn't inherently limited. Maybe the sun is practically infinite, though you're certainly limited by the amount of power you can capture. Land, natural resources, time, it all has limits.

The quantity of steel may be inherently limited, but we can still make more than what we have now.

Land behaves differently because of the extremely in elastic supply. And it's not very fungible; a lot in the middle of Nevavda hundreds of miles from the nearest freeway is not exchangeable with the same size lot in Palo Alto.

And the limit itself is the amount of iron ore; that would be considered economic land, but the steel may just be considered capital.

The gp specifically mentioned land ownership, which makes the comparison more interesting.

Even without height restrictions, limited ownership of land still has the problems exhibited in the game.

Zoning and highly restrictive building codes were invented after Georgism, and are ways to further heighten the basic unfairness of land.

Local politics are dominated by landowners, as they tend to have the most control of, and greatest interest in controlling, the local levers of power.

It is ironically why I'm less concerned about private equity buying houses to rent than I am of local small time landlords buying houses. PE firms won't control local politicians in the same way that local landlords control politicians, because it's too much work and requires ridiculously intimidate knowledge of the local patronage networks.

Free market != capitalism, by the way. The market for the most part in "capitalist" America, has been captured.

Second, the world is a zero-sum game. In one breath folks will say "resources are limited, so we need to allocate to those who can use them best" or "life is unfair", and then in the next claim resources are unlimited and hard work is all you need, no need to get fussy about inequality.

That was the whole point for monopoly, to show how rigged the system is.

> That's a different deal than some body squeaking around tax law; this was all about trying to change parts of the nature of capitalism's tendency to rerun money to capital more than to labor.

No, this was a small group successfully lobbying to reduce their share of the costs of running society. AKA special interests.

> Until we have that base level of security for all, we need things like massive redistribution, which includes carrots like opportunity zones, as well as sticks like taxes on land and monopolies.

If you're going to redistribute wealth, do it in a broad, simple way (UBI/negative income tax). Not through millions of tiny special interest gifts like 'opportunity zones'.

While I think UBI is great, there still needs to be local investment to build communities, beyond just giving people money. I'm not convinced that opportunity zones are the way to do it, but in addition to giving people money, we need to build the economic infrastructure for people to use it in good ways. For example, in food deserts, getting grocery stores. That may require incentivizing businesses to take what they see as additional risks.

I agree with you personally, but really what we're talking about is playing sport against a team that continually bends and exploits the rules and comes out ahead. You can talk all you want about morality, but the facts are the facts.

Corporations have been doing it for decades, and anyone that doesn't do the same will continue to be taken advantage of.

I agree completely but it seems to be a game theory thing. It works better if everyone is happy but you can leech the system and disproportionally benefit of it without doing your part for it as long as the system does not collapse due to your actions.

I guess the worlds has some space for people who can be rewarded enormously through the work of the long tail and everything collapses when the number of people who act in that way passes the acceptable threshold.

Like, it's O.K. to have a royal family and bunch of elites around them who engage only in high life stuff like poetry, paintings and politics but you can't have half of the population be painters, poets and the other half work the land and have no life so to feed the elite half.

I think there was article on HN some time ago about the tolerable percentage of knights in the society.

If all you have to encourage people not to use those loopholes is an appeal to their morality, then you should not be surprised to find a bunch of amoral people and amoral corporations ignoring you.

The rich must be forced to do the right thing, otherwise they will not do it. Expecting otherwise is lunacy. Maybe one or two foolish and good ones will try to do the right thing, but they'll be swiftly out-competed in our hyper-efficient economy by those willing to break rules and cut corners.

Not just the rich. PEOPLE must be made to do the right thing.

I live in a former socialist country, and I hate the "we will tax the rich" (as in higher tax percentages) paroles I hear from our current left-leaning (even communist) parties here.

Why? (and I have mentioned this before, many times, even here)

Poor people already pay almost zero taxes.

Rich people avoid paying taxes at all.

And me, someone with an above average but below "rich" (engineers) paycheck get fucked by the taxes.

I don't want higher taxes for the rich, I just want the rich to pay the same tax rate as I do in the first place.

Let's look at it this this way - say you live in Texas and make $7.25 / hr. That's $7.25 * 8 hours * 260 days = $15080 / year. According to this tax calc (https://smartasset.com/taxes/income-taxes), you still have to pay $1407 in total federal income taxes, or 9.33%.

It may not sound a lot, but remember - when you're making that little money, every dollar counts. You could be living on the edge of poverty, where you just make enough money to cover your basic needs, but never make enough to save up anything.

Compare that to someone making, let's say $60k in Texas. You're not anywhere near a six-figure salary, but you'd still make 4 times more than minimum wage.

Same calculator shows that at $60k in Texas, you'll have to pay $10778 in taxes, or %17.96. Higher percentage, but you'll probably have a lot more to save than the minimum wage person in the previous example.

The "rich" engineers making $250k will have to pay 28.23% in taxes, even more than you.

Now the wealthy, they will probably never pay more than capital gains taxes at most - which is a capped figure, most places. And as others have mentioned, there's a whole industry dedicated to bringing down the taxes for wealthy people.

So while the middle and upper-middle class is bankrolling the nation in terms of tax %, I think it's important to remember that these things have to be seen in context. I have a 3-4 times higher tax rate than "poor people", but I make more than enough money to everything I need, post-taxes.

I live in slovenia.

A basic factory worker (a bit above minumum wage), earns 1200eur monthly gross, which (due to weird laws) costs the employer 1393eur (gross-gross), and the worker gets 831eur net out of that, meaning that the government takes around 40%. (the tax rate also includes pension and health insurance)

If you earn 5x times average pay (let's say you're becoming "rich"), that would make it 10k gross, costing your employer 11610eur, and you earning 5167eur net, meaning that the government takes around 55%.

Ok, similar enough,... but(!), with the same cost to your employer (11610eur), you can earn a lot more if you avoid taxes.

Lets say you start an independing contractor business in slovenia (a paper thing, you get the status) - this would make you pay a minimum of ~450eur monthly for health insurance and pension insurance (yes, this would also make you get minimal pension later, but wait for the rest of the math). Then you open a company in bosnia, where you pay ~100eur per month for bookkeeping, a mailbox, and other related costs, and then pay only 10% when you take out the profits. So your fixed monthly cost is around 600eur + 10% of the 11k of your gross gross left over, totalling to 1700eur, and earning 9900eur net, meaning that you effectively pay 15% in taxes. But that's not the worst part... if the company is registed in your girlfriends/brothers/mothers/... name, you (as a couple) still earn the same, but you're now (on paper) poor, so if you have a kid, with some paper turning, the kid will get free kindergarden and food (compared to almost 500eur monthly for two a bit above average paychecks). You might also get a government sponsored apartment to avoid high rents.

So yeah... at some point, dealing with bureaucrats in two countries goes from "not worth it" to "definitely worth it".

given that they often precisely pay less taxes than you, you can't really avoid wanting them to pay "higher" taxes - higher than the ridiculously low numbers they pay, given their army of lawyers, accountants and loopholes. So, wanting them to pay a similar percentage to you, DOES amount to them paying "higher" taxes.

  In my country, foreign (or rather, multinational) corporations  that invariably make huge profits, pay zero taxes, by doing the following:
  - they transfer 'ownership' of critical company resources,

e.g. the software WE develop, to a remote entity that is also them, typically on e.g. cayman islands. Then our local subsidiaries rent/lease OUR OWN SOFTWARE back from the cayman part, in order to serve it to our clients. Our local subsidiaries pay a silly huge leasing fee for using "its own software" - as much or more than what our clients pay for using the software services. The net result is, that our local subsidiaries always operate with a loss, no profits, which both results in no taxes having to be paid, and the "losses" being tax deductible (depending on details, both can be useful). The real net result is, that a huge profit is funnelled out of our countries, with no taxes paid for local services, wear and tear.

When your size allows you to hold the pen when writing the tax laws, tax does not apply to you.

Tax is something the wealthy and society extracts from the taxable classes. They don't extract it from the rich, it is in direct opposition to the nature of being rich - rich is something you become, by being exempt from the rules that apply to 'lesser' creatures.

And if the low-income classes do not provide taxable income, I wonder why the republicans are so hellbent from prohibiting poor people from getting abortions. It suggests to me, they DO believe poor people serve some purpose, given that they insist on creation of new poor people.

I edited my post and added the "(as in higher tax percentages)", because this is the main thing that our left-leaning parties do.

We had a really shitty government for two years now, who did only one good thing, and that was to raise the general tax deduction, making our workers get a bit more net out of their gross income, and even the unions protested, because they "cared" about te governments budgets.

Now with the government change, we expect them to scrape that (because that would mean more money for the government, and the poor (their voters) would be least affected), and the paroles they'll use go along "taxing the rich". On the other hand, as you said, if you're rich, the "progressive" tax rates make it worth it to avoid taxes by funneling money around, and we (engineers, developers, etc.) get fucked, because we earn above average (and get hit with taxes hard), but still not enough to make it worthwile to do the whole tax-avoidance (legal) thing.

Why? If you calculate it out taxing the rich can't help you. Even if it worked, it wouldn't provide a meaningful increase in government income. The "middle class" are the only ones that can be taxed to actually achieve sponsoring the government.

So while I understand the arguments for fairness, it cannot meaningfully affect my situation, and therefore it's a bit like an "there shouldn't be any homeless" type situation. Ideally, yes, I'd want the rich to pay. Practically, it's rather low on the priority list.

> I don't want higher taxes for the rich, I just want the rich to pay the same tax rate as I do in the first place.

But they don't, because of tax loopholes like these. If you want the rich to pay their fair tax, we definitely should "tax the rich". A couple of years ago, Warren Buffett pointed out that his secretary paid a higher tax rate than he did. Also because capital gains are taxed at a far lower rate than income.

I generally agree with you, but I think your reasoning is partially nonsense.

I haven't benefit very much from government infrastructure. Woo, we have roads now. Where multiple of my family members have died, and most of my family members have been traumatized by those deaths. The person who raised me nearly died in one, and it left us even further in the poverty trap than we otherwise would have been, because of millions of dollars in hospital bills, even with insurance, thirty years ago, that we spent decades paying off. Oh, internet? I had dial-up growing up in the 2000s because my local government sucked and the wider governments sucked.

Honestly, my education sucked. It was actively harmful to my development. Government incentives historically kept my family in poverty, leaving my societal background awful, and filled with terrible people. And, on top of all of that, every two years, there's a 50% chance that a government I despise becomes in charge. Even when a government I find tolerable is in charge, more goes to funding wars than anything I genuinely care about. "Billionaires aren't paying fair taxes!" becomes a campaign point, rather than anything that could genuinely help people, because no politician is interested in fixing things.

The one thing that is unambiguously good about the US government, the Postal Service, has been getting slowly dismantled and made inefficient over the last decades.

Evading taxes is the only morally correct thing to do in America. I'm not going to evade them, because I'm not a moral person and prefer the convenience of not being randomly investigated by the IRS.

We should tax billionaires and companies because billionaires and companies suck. That's the valid reason. Cloaking it in false-utilitarianism is nonsense. Taxation should be punitive.

businesses yes. But governments abuse public spending - at least in the UK a significant chunk gets funnelled to conservative friends and family...why should I therefore want to fund that?

Seems like you need and try to convince people around you to vote for a party that wants high taxes on the rich (that include wealthy politicians), transparency on public expenses, public data on politicians resources, democratic control/revocation of elected representatives/public servants ? And forbid money owned medias by controlling their finances too ? There are only two ways to take down an oligarchy, a revolution and its unavoidable oligarchic backlash with the help of antidemocratic violent forces or use of the Democratic tools that the oligarchy had to concede throughout the accidents of history to divide it further and reinforce democracy. You will find it is quite hard though.

Abuse of taxes is not a party-specific issue. Until laws are passed to prevent this (which is probably a multi-decade lobbying effort), it will re-occur. You are right, it eventually boils down to "it is quite hard".

Why would a desire to pay less tax on your part influence a government’s misappropriation of the public purse?

That’s what voting is for surely?

Abuse of taxes is not a party-specific issue. Until laws are passed to prevent this (which is probably a multi-decade lobbying effort), it will re-occur. In the meantime, it's probably reasonable to be sour about paying taxes when it's subject to this practice by the receiver.

Voting only works if there are good options out there. If both options are equally crooked, there's no solution.

The article isn't saying anything about not paying your taxes. It's about reducing the taxes you owe. Just like I do when I claim my standard deduction every year.

Can we also simultaneously hold the government accountable for efficient spending of the money?

I want 2x better government services for the same amount of taxes. The fact that no one questions government efficiency, but everyone is eager to pay taxes is delusional.

If I lived in Zurich or Tokyo, yes, I am happy to pay taxes.

I really don't want to give a dime to Oakland local government and California in general; I will do everything in my power and exercise all legal avenues to pay as little tax as I can.

Pay your tax first (a fair share at that) and then harp about unfair spending.

Have been. For years. I see dwindling QoL, infrastructure on stilts, power outages, anti-small-business bureacracy, woke government initiatives and dysfunctional law enforcement where I live.

I give my local and state government a solid 2/10 score.

I am a socialist where governments are efficient, liberatarian where governments are dysfunctional.

>I am a socialist where governments are efficient, liberatarian where governments are dysfunctional.

At first glance this position seems reasonable, but ultimately it's short sighted - the game is iterative. Penalizing the public coffer ultimately results in higher costs over the long run as high ROI investments are left on the planning table. The attitude itself is a large part of why the American government is paralyzed and cannot effectively address issues: https://en.wikipedia.org/wiki/Starve_the_beast

This is a straw man. I’m speaking up for disproportional attention given to not holding the government accountable.

There should be more focus on why government is dysfunctional than about raising taxes. The situation is completely opposite today, extremely lopsided. Newspapers and journalism has stopped exposing government scandals and inefficiencies, but people are frothing over other things.

I want governments to work like Swiss agencies.

It's not a straw man at all.

Even in this post you restate the ideological underpinnings of starve the beast.

If you want governments to work like efficient machines, you need to invest in them, which requires political will that will only exist after dispelling the narrative that they are incapable of solving problems.

Also, I'm confused about the comment about newspapers and journalism. Do you have a source for that claim? My everyday experience is almost the exact opposite.

What is a fair share? And what's the point of giving even more money to an entity that wastes most of it?

You position is irrational and seems to be from a place of envy over other's wealth than actual societal benefit.

When people pay their taxes, they pay for politicians to come up with more ridiculous schemes like this, and more civil servants to administrate them forever.

You want to tell me when you do your taxes with your accountant you don't try to pay as little taxes as legally possible?

Mostly I just apply the straightforward rules until it seems fair. I don’t go making a seperate company to invest in a different company to hire workers in a specific area so that I can later pay zero taxes on capital gains.

Honestly, the level of bother is too much to keep track of for 20%, which is already really low.

Is it fair to contribute to a Roth IRA? Is it too much bother? Where do you draw the line?

I have an idea. I'll pay my damn taxes if you'll pay back your government-sponsored student loan. Deal?

This is such a common error in judgement, but I don't really know its name. Does anyone know? I'm genuinely curious.

I'm referring to the "I'll do X when others do Y" type of reasoning.

> Does anyone know?

Sounds a bit like whataboutism.

1) insane false equivalency

2) please don’t build straw men

3) please don’t be so combative

> I have an idea. I'll pay my damn taxes if you'll pay back your government-sponsored student loan. Deal?

What exactly are you trying to say here?

You didn't really need to make that comment - the whole KKK thing speaks for itself.

Infrastructure is just a sliver of the fed budget. Education is funded by property taxes, also a sliver. "History" and "societal background" has absolutely not been "paid for by taxes".

If every working American contributed $8,000 in taxes we would have the same revenue as the insanely progressive system we have now. I don't think anyone here would advocate for zero taxes. I think they would simply advocate for less taxes.

>If every working American contributed $8,000 in taxes we would have the same revenue

You're not arguing for lower taxes; you're arguing for higher taxes on the poorest.

someone who has a billion dollar exit is in a somewhat better position to pay those taxes than a person scraping by on minimum wage. What you seem to be advocating for here is not less taxes but pushing the taxes downward to people who can less afford them.

Maybe instead the federal government could do inventive things like substantially cut the military budget.

> The whole idea that you can make a billion dollar business without being hugely dependent on the infrastructure, education, history, societal background etc that has largely been paid for by...taxes...is utter fallacy.

Taxation is not a transaction you enter voluntarily; it's enforced by violence, and all these rationalizations don't matter as you don't have any choice anyway. So, taxation is either extortion, robbery or theft (I'm not sure which definition matches it better), and tax evasion is simply a moral obligation for everyone who believes that people should not be subject to violence.

>So, taxation is either extortion, robbery or theft

If ultimate enforcement through violence is the only determinant of whether or not something is a crime, then the very laws that dissuade other crime, say the robbery or theft that you refer to, are themselves blackmail, extortion or some other variation of violent crime.

This circular reasoning does not hold up to scrutiny, which is why it is almost only used in respect of taxation in libertarian circles and nowhere else.

> the very laws that dissuade other crime, say the robbery or theft that you refer to, are themselves blackmail, extortion or some other variation of violent crime

No, because in these cases it's violence enacted in self-defense (often by proxy), and therefore not an aggression.

Defending yourself is not aggression. Going after somebody or their property is.

>No, because in these cases it's violence enacted in self-defense

The use of coercive force is justifiable by the state or it isn't. If you now create justifications for why the use of violence in pursuit of self defense is valid, then you've conceded that the use of violence can be justified.

Which then means the "it's enforced by violence, and all these rationalizations don't matter as you don't have any choice anyway" no longer holds.

There are justifications for the use of violence, therefore we need some ulterior basis other than ultimate enforcement being premised upon the use of state violence in order to explain why 1) taxation is a crime, and further more that 2) that crime morally must be avoided.

You point towards the idea that Taxation is not a transaction you enter voluntarily, but the same can be said of your aggression theory; I didn't consent to any NAP with you, and the NAP is ultimately enforced by violence. I have no desire to abide by the NAP when it doesn't suit me as I never agreed to it.

Ultimately, whether it's the NAP, property rights or taxation, enforcement of pro-social behavior will require some scope, authority or justification which addresses more than just a single individual's consent. "I don't like taxes" is not sufficient an argument to state that you are morally obliged to commit tax evasion.

If choose to not make any money and own nothing, you pay no taxes. You can also "just move lol" to another country where there is no taxation.

>tax evasion is simply a moral obligation for everyone who believes that people should not be subject to violence.

Some people should definitely be subjected to violence. It's not hard to find examples where violence is justified. Even a Buddhist monk will forcefully stop a child from touching a venomous snake and make the child cry.

You don't enter life voluntarily, you don't go to school voluntarily, you don't go to the hospital voluntarily when you fell on your head, become unconscious and slowly bleed out...

Just curious - you don't believe that people should be subjected to violence, but how would a state be able to enforce sovereignty over its territory, without the means of violence? Implied or otherwise.

I know the US defense complex gets a lot of sh!t for its massive expenditure, but the hard reality is that no state on earth is going to invade the US, and thus threaten its citizens within the boarder, which is a result of tax money being spent on building the most powerful military in the world.

Just as I replied to a sister comment, defence is not aggression.

The fact is that we are all vastly better off under this social contract that we did not have a choice in agreeing to and that is enforced by violence.

> Taxation [is] enforced by violence... taxation is either extortion, robbery or theft

Perhaps, but less so than money. People wouldn't recognise other people as having millions or billions of wealth unless that was enforced through the violence of state capitalism, and a legal system protecting banks, creating cops and prisons.

Why would they? Millionaires aren't a natural concept; it's something our society allows.

Justice (in any possible variety except “might is right”) isn't a natural concept too; it's something our society allows. You could also say that justice is a “social construct”.

So what? Does it mean that it's something not valuable or desirable? I don't think so.

The legal system is primarily a legal system, not a justice system.

Mainly, however, I am pointing out how absurdly reductionist it is for you to say “taxation is violence”. As you say, social constructs—taxation perhaps—can be “valuable or desirable”.