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> The cool thing about democracies is that we could democratically decide to tax the ultra-wealthy at a much higher rate. And yet it doesn't happen > And gla

> The cool thing about democracies is that we could democratically decide to tax the ultra-wealthy at a much higher rate. And yet it doesn't happen > And glass-makers are happy when it hails, but that doesn't mean we should be going around breaking windows. No one is going around breaking windows to give window makers jobs

ceejayoz 5y ago
> And yet it doesn't happen Sure it does. Quite a few European countries have a top tax bracket in the 50% range. Denmark's capital gains rate is 42%, more than double what Bezos pays here.
- fastball 5y ago
  That's because capital gains in Denmark aren't really capital gains, they just tax it as income. Short-term capital gains in the US are also taxed according to income tax rates, so 37% for the top bracket, which isn't far off 42%.
  - ceejayoz 5y ago
    I can guarantee you Bezos is ensuring his Amazon shares aren't selling as short-term capital gains.
    - fastball 5y ago
      Indeed. But it is not clear to me that Denmark's system of not distinguishing between the two is better than the US system of allowing long-term investments to incur less of a tax burden than short-term speculative gains.
- yakshaving_jgt 5y ago
  Have a guess why Jeff Bezos hasn't decided to move to Denmark.
  - ceejayoz 5y ago
    I suspect the US could raise capital gains tax fairly substantially before it made sense for Bezos to move himself, his assets, and his company out of the US.
    - yakshaving_jgt 5y ago
      Maybe you're right. Maybe not. I don't know. I have somewhat the opposite opinion though — I believe people in his position have all manner of resources to facilitate the movement of assets.
      - ceejayoz 5y ago
        > I believe people in his position have all manner of resources to facilitate the movement of assets. Sure... and yet, Bezos hasn't moved his assets somewhere with zero capital gains tax, like Switzerland. There are clearly benefits to being in the US that are worth the 20% tax rate to him. I think a lot of them would still be present if it were 30-40%.
YEwSdObPQT 5y ago
Do you know how you don't pay capital gains tax? You leverage your assets and are given credit. That way you don't need to sell the assets to make use of them. Guess who typically does this? The very wealthy. Guess who doesn't do it? Less wealthy people. Many of these tax laws that are enacted end up affecting people who are upper middle class and don't affect the mega rich at all. > No one is going around breaking windows to give window makers jobs. Not literally no. But metaphorically it does happen all the time: https://en.wikipedia.org/wiki/Parable_of_the_broken_window#Opportunity_cost_of_war https://en.wikipedia.org/wiki/Parable_of_the_broken_window#O...
- refurb 5y ago
  So kind of like using a HELOC to borrow against the equity of your home to invest in other things without paying tax on the sale?
  - YEwSdObPQT 5y ago
    Maybe. I don't know the specifics of it. I was listening to a podcasts and they were explaining the general principle of how leveraging works with regards to Bitcoin. The point I was generally making is that more complicated tax laws normally don't tax the people that they purport to target and normally end up affecting those that are a couple of rungs down in the class hierarchy that everyone pretends that doesn't exist in most Western Societies. For example. This was a few years ago. I saw a headline where I think I paid (relatively) a greater proportion of tax from my small Limited Company than one of American coffee franchises paid in the UK. Due to them doing some tax wangling with Ireland. If I were to do the same, I would have HMRC investigating me and I wouldn't be able to afford such an investigation. They probably have a dedicated tax compliance team. I don't.

ceejayoz 5y ago

> And yet it doesn't happen Sure it does. Quite a few European countries have a top tax bracket in the 50% range. Denmark's capital gains rate is 42%, more than double what Bezos pays here.

fastball 5y ago
That's because capital gains in Denmark aren't really capital gains, they just tax it as income. Short-term capital gains in the US are also taxed according to income tax rates, so 37% for the top bracket, which isn't far off 42%.
- ceejayoz 5y ago
  I can guarantee you Bezos is ensuring his Amazon shares aren't selling as short-term capital gains.
  - fastball 5y ago
    Indeed. But it is not clear to me that Denmark's system of not distinguishing between the two is better than the US system of allowing long-term investments to incur less of a tax burden than short-term speculative gains.
yakshaving_jgt 5y ago
Have a guess why Jeff Bezos hasn't decided to move to Denmark.
- ceejayoz 5y ago
  I suspect the US could raise capital gains tax fairly substantially before it made sense for Bezos to move himself, his assets, and his company out of the US.
  - yakshaving_jgt 5y ago
    Maybe you're right. Maybe not. I don't know. I have somewhat the opposite opinion though — I believe people in his position have all manner of resources to facilitate the movement of assets.
    - ceejayoz 5y ago
      > I believe people in his position have all manner of resources to facilitate the movement of assets. Sure... and yet, Bezos hasn't moved his assets somewhere with zero capital gains tax, like Switzerland. There are clearly benefits to being in the US that are worth the 20% tax rate to him. I think a lot of them would still be present if it were 30-40%.

YEwSdObPQT 5y ago

Do you know how you don't pay capital gains tax? You leverage your assets and are given credit. That way you don't need to sell the assets to make use of them. Guess who typically does this? The very wealthy. Guess who doesn't do it? Less wealthy people. Many of these tax laws that are enacted end up affecting people who are upper middle class and don't affect the mega rich at all. > No one is going around breaking windows to give window makers jobs. Not literally no. But metaphorically it does happen all the time: https://en.wikipedia.org/wiki/Parable_of_the_broken_window#Opportunity_cost_of_war https://en.wikipedia.org/wiki/Parable_of_the_broken_window#O...

refurb 5y ago
So kind of like using a HELOC to borrow against the equity of your home to invest in other things without paying tax on the sale?
- YEwSdObPQT 5y ago
  Maybe. I don't know the specifics of it. I was listening to a podcasts and they were explaining the general principle of how leveraging works with regards to Bitcoin. The point I was generally making is that more complicated tax laws normally don't tax the people that they purport to target and normally end up affecting those that are a couple of rungs down in the class hierarchy that everyone pretends that doesn't exist in most Western Societies. For example. This was a few years ago. I saw a headline where I think I paid (relatively) a greater proportion of tax from my small Limited Company than one of American coffee franchises paid in the UK. Due to them doing some tax wangling with Ireland. If I were to do the same, I would have HMRC investigating me and I wouldn't be able to afford such an investigation. They probably have a dedicated tax compliance team. I don't.