For US citizens/residents with billions, taxes are pretty much a constant 25%, since

1. almost everything is capital gains (which comes to 23.6%). Note that this was 15% under GWBush, so it was even better back then.

2. You can avoid state taxes by relocating to WA/TX (If I recall correctly, this was Bezos' motivation for starting Amazon in Washington). A lot of billionaires live in 0% state capital gains tax states, except the ones that need to live in CA/NY for the tech/financial sector respectively. If you live in one of those, then think of the total taxes as more like 33% total (federal + state)

Notch is Swedish isn't he?

IKEA is Swedish as you get, and it's technically a dutch charity.

Technically it's controlled by a Dutch not-for-profit organisation (not a charity)

Ingvar Kamprad is too, doesn't prevent him from not paying any taxes. It's not very hard to find exploits in the tax system. Even in the worst case, the corporate tax is 22%.

His tax rate is probably around 40-50%.

He's the 4th largest tax payer in Sweden apparently: https://twitter.com/notch/status/410757753737469952

This being essentially all capital gains, it would be taxed at 30%.

When you are dealing in billions, you don't pay taxes.

Oh come on. Not even gonna bother to ask you to back that up.

He probably won't, so I will (somewhat, he's definitely exaggerating, but probably not as much as you think):

http://www.irs.gov/pub/irs-soi/09in12ms.xls

Effective tax rate plateaus at around a half mil in annual income, then starts going down again after around five million.

I couldn't find any hard data about brackets above that. Didn't Mitt Romney pay around 15%?

Then there's my all-time favorite quote, of Leona Helmsley:

>Only the little people pay taxes.

But, that's only anecdotal, heh :-)

It's worth noting that annual income above five million is almost definitely coming from investment of both labor and capital (ie, working to manage/direct a business you own, and seeing gains from the value of that business -- or working to manage your stocks and seeing gains from their value) rather than just from labor. This comes with very different risks, including the ability to lose your capital, which is why it's taxed in a very different way.

It's also worth noting that the tax rate for the very rich is still 15%. As far as I can tell, certain very rich people "not paying taxes" is a myth.

Finally, it's worth noting that Notch is not American.

The UK has a variety of schemes of tax planning[1], tax avoidance[2], and tax evasion[3]. Using such schemes usually requires someone to be wealthy enough to afford accountants and access to the scheme.

Rich people do have ways of reducing their tax burden, sometimes to surprisingly low amounts.

[1] planning is normal reduction of tax burden and is unlikely to be challenged by tax authorities.

[2] avoidance is legal, but sometimes exploits loopholes in tax laws in weird ways and you might risk the Inland Revenue changing the regulations - sometimes retroactively.

[3] evasion is just illegally not paying tax.

Many of the recent tax avoidance schemes that celebrities have tried to use in the UK were outright fraudulent - for example, one involved them falsely claiming that they were used car dealers and reporting fictious losses which were large enough to offset their income for the year. Another involved reporting that they'd invested money in UK film production when they hadn't.

> This comes with very different risks, including the ability to lose your capital, which is why it's taxed in a very different way.

Exactly, there are good reasons for this. The problem is that it would be grossly unfair to tax a small business owner or small investor at say income tax levels because their risks are so much higher. On the other hand a big investor will millions or billions ends up paying the same tax rate as that small business owner or investor, but is able to spread their risk across many investments reducing the overall risk. Yes it would be unfair to tax them at a higher rate for doing fundamentally the same thing - how would we justify one tax rate for one investor in a company, but another rate for this other investor?

Taxation is a hard problem.

"Yes it would be unfair to tax them at a higher rate for doing fundamentally the same thing - how would we justify one tax rate for one investor in a company, but another rate for this other investor?"

Because taxation has gone way beyond what it was initially meant to do. That's why it's a hard problem; we're trying to make value and fairness judgements and using that as a basis for applying tax.

To me, personally, people can't claim fairness if they're treating people differently based on their arbitrary value judgements. Until we start treating "fairness" as a universal, with no subjective component.

What do you imagine fairness to mean without subjective components? I'd say that value is a subjective concept and I cant think of a definition of fairness that is not based on value.

Why can't a small investor spread their investments? Isn't that what index funds are for?

Mitt Romney also gave a huge amount of his annual compensation to charity, which reduced his tax rate substantially.

The big reason why the rich guys can lower their tax rates is because they can use investment losses to offset taxes. It's not a loophole, just a tax deduction you can optimize.

I'm not sure why he got downvoted so muh. Just read all the threads about Amazon, Starbucks, Google, Vodafone, etc etc who manage to make fucking loads of money while also operating at minimal profit this avoiding / evading large amounts of tax.

Wow, you are so brave for bringing forward such a revolutionary and controversial statement. I hope you will bless us with your intelligence at every opportunity you get.