Given American anti tax sentiment, it isn’t surprising.

Plus there is a concerted effort to maintain the narrative that the government should be starved, because the government is the most wasteful body that can be.

Being rich isn’t just some sort of statistical metric - it’s also a clear cut option to have your principles and desires accommodated.

It’s not hard to believe.

To determine whether its 60-40 (tax avoidance - convenience optimization) would seem to be the question to pursue.

FWIW this person was Canadian.

Being wealthy unlocks the option to not be a rational actor with little or no real world consequences, enabling capricious urges and whim to be a significant factor in the decision making process. See: Elon musk.

Or take people who are super competent, with strong ethics and world class bravery, and catapult them into the truly heroic! Think for example, Elon Musk!

I also think Elon has done great and important things for humanity, but to call him super- competent, ultra courageous, and heroic might be a pretty significant stretch.

He seems to me to be an analytical thinker with 1st percentile intelligence, who struggles with emotional intelligence and impulse moderation. Probably a pretty fun guy to hang out with, but also an asshole more often than he should be. Nobody is even nearly perfect, and hero worship tends towards the delusional in most cases, so I tend to steer clear of thinking too good or poorly of anyone.

In this particular case that I had in mind when writing this comment, they were arguing for foregoing a tranch of money entirely because it would be taxed at income rates instead of long term capital gains, which would make their %age tax ratio go up, and massively increase the total tax paid.

They would have rather foregone that income entirely, then be forced to pay full income taxes on it. Of course they didn’t argue it this way, or else the idiocy would have been obvious even to them. They were arguing that plan B “results in less tax paid overall.”

That is what their metric was: which plan results in less taxes paid. Not which plan results in more take-home pay.

It's nuts that we treat LTCG and income differently. We should adjust LTCG for inflation and then charge the amortized taxes whenever folks realize gains.

"but then taxes would be too high!" yes, so we should also reduce income taxes when we do this.

Quit flogging the upper-middle class to pay for the technically unemployed rich.

Take it a step further and just remove income tax and tax wealth at rest.

That would be incredibly regressive.

That would depend on your definition, but I think that's unlikely

Only taxing wealth "at rest" makes it avoidable for those who have the means to pay accountants to keep it moving in productive ways and thereby non-taxable. You then end up only taxing the people who can't afford that, which is the middle class.

If it's productive, it's contributing to society. If Alice's $100 goes to Bob's wages, which buys Charlie's shoeshine service, which pays for a week of TV dinners, I don't think those 100 dollars should be taxed more than David's 100 dollars that just sat in his bank account. But I do agree, we should prefer taxes that can't be avoided, LVT being the best option.

It’s not nuts, it’s actually quite purposefully thought through. Profit gets taxed once at 15-20% in the form of corporate income tax, the taxed again at LTCG tax rates. The combined total is similar to the individual tax rate for high earners.

If you tax LTCG at income rates, then you will just start incentivizing other schemes to return profits to shareholders, which is going to be economically inefficient, harder to manage, lead to consolidated ownership structures, fewer liquidity events for small shareholders, greater inequality, and less prosperity.

Long term capital gains having lower tax rates isn’t feature, not a bug, for everyone not just wealth managers.

As a poor person who doesn't fully own his own house but pays in taxes 60% of their income, and much of the rest in house loan interest and principal, I can see how that would play in my own case. If I were to come up onto a lump sum of money by, say, some creative endeavor of mine, and that money is going to be taxed at a 65% tax (such is the law in Sweden for income taxes), I might consider to do a number of things with that money that prevents that tax from being realized, including donating it to charities or investing it in hopeless enterprises. After all, if I can't enjoy the money myself, but I have a bit of agency over it, well the least I can do is enjoy that agency.

But would you just say “no thanks, I don’t want the money if it’s going to be taxed”? That’s what was going on here.

Sounds to me like Sweden is doing it right! If you want very extensive social programs you have to tax EVERYONE really really hard.

The fantassy that one can pay for wellfare by only taxing the rich more or by reducing their loopholes is a pipedream.

Or you could have a society with very low taxes and very low to none social programs, especially if your government doesn't love fighting expensive wars all the time.

Wars and wellfare programs are all very expensive. Even miserly wellfare programs like what the US got is creating some real debt default risk over there.