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Thu Sep 23, 2021, 04:02 PM

Come on in. Proof positive that the Tax system is broken. Hint: Elon Musk.

I'll just hit you up with the facts:

In 2018, Elon Musk received a salary of $56,830

In 2019, Elon Musk received a salary of $23,760

In 2020, Elon Musk received a salary of $0

And he's never received a dime from Tesla. He takes the "salary" in stock.


Wow... these people are so brilliant (sarcasm) that they can get around the "oh so well written" tax laws.

Musk, who is worth around $200 Billion paid... between 2014 and 2017...

3.3% in taxes.

To summarize... next time a politician brags about jacking up the marginal rate on people who are paid a salary... by like 3%... slap them (figuratively)

I agree with the UK Wealth Tax Commission, a one time larger Wealth Tax and annual Wealth Tax payments. And YES (Mark Cuban hates this one) tax them on the value of their stock portfolio on a random date of the year.

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Arrow 17 replies Author Time Post
Reply Come on in. Proof positive that the Tax system is broken. Hint: Elon Musk. (Original post)
WarGamer Sep 2021 OP
WarGamer Sep 2021 #1
PoliticAverse Sep 2021 #2
WarGamer Sep 2021 #3
nuxvomica Sep 2021 #4
PoliticAverse Sep 2021 #5
WarGamer Sep 2021 #6
dsc Sep 2021 #13
Zeitghost Sep 2021 #7
PoliticAverse Sep 2021 #8
LanternWaste Sep 2021 #9
jimfields33 Sep 2021 #10
Hoyt Sep 2021 #11
WarGamer Sep 2021 #12
Hoyt Sep 2021 #16
mathematic Sep 2021 #14
WarGamer Sep 2021 #15
Duppers Sep 2021 #17

Response to WarGamer (Original post)

Thu Sep 23, 2021, 04:05 PM

1. Just to add...

A billionaire can pay ZERO in taxes just by accepting no salary and living off of cash from the previous year or a few years earlier.

This is called HOARDING wealth.

Do you know how much money is LOCKED UP in this country? Money that's not being taxed, money that's just sitting in a portfolio growing?

EDIT: Doesn't Jack Dorsey (Twitter) live in a trailer parked in the Twitter HQ parking lot?

Understand? Rich folks DO NOT CARE about higher marginal tax rates or Corporate Taxes... and no one is brave enough to reach into their back pocket and just TAKE some of their wealth.

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Response to WarGamer (Original post)

Thu Sep 23, 2021, 04:07 PM

2. When your riches are in stock...

You don't sell the stock so you don't owe any taxes on it but you borrow against your stock and live off the borrowed cash.

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Response to PoliticAverse (Reply #2)

Thu Sep 23, 2021, 04:09 PM

3. But we can't tax someone's wealth, right????

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Response to WarGamer (Reply #3)

Thu Sep 23, 2021, 04:11 PM

4. Yet we do it all the time: property taxes

That's a "wealth tax" but it's never called that.

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Response to nuxvomica (Reply #4)

Thu Sep 23, 2021, 04:13 PM

5. And a very regressive tax too. n/t

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Response to nuxvomica (Reply #4)

Thu Sep 23, 2021, 04:14 PM

6. So a guy worth $100B can live in a $300k house and claim Homestead Exemption and pay $800/yr

That's a good way to get at his $100B

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Response to WarGamer (Reply #6)

Thu Sep 23, 2021, 05:08 PM

13. the point is for many middle class people their house and car

is a rather significant part of their wealth and is taxed routinely.

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Response to PoliticAverse (Reply #2)

Thu Sep 23, 2021, 04:20 PM

7. And eventually those loans come due

And you have to sell some stock to pay them and also pay the taxes on any gains.

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Response to Zeitghost (Reply #7)

Thu Sep 23, 2021, 04:29 PM

8. No, there are ways around that...

For example just giving the shares used as collateral as payment for the loan...

7. Avoiding Capital Gains Tax

Capital gains tax automatically kicks in from the sale of certain valuable properties, such as shares, and acts as a deterrent on investors cashing them in. Obviously, though, a number of rich people are interested in avoiding this and have found legal loopholes to allow them to do so.

One cunning way of dodging capital gains tax is by borrowing from an investment bank with the shares as collateral after purchasing options, which set their price at a fixed rate.

This sneaky option allows the borrower to avoid triggering the capital gains tax that would come with actually having the money at hand, while giving them the free cash – and allowing them to repay the loan – either from the profits of using the money or by handing over the shares themselves. Talk about making your money work for you.7. Avoiding Capital Gains Tax

Capital gains tax automatically kicks in from the sale of certain valuable properties, such as shares, and acts as a deterrent on investors cashing them in. Obviously, though, a number of rich people are interested in avoiding this and have found legal loopholes to allow them to do so.

One cunning way of dodging capital gains tax is by borrowing from an investment bank with the shares as collateral after purchasing options, which set their price at a fixed rate.

This sneaky option allows the borrower to avoid triggering the capital gains tax that would come with actually having the money at hand, while giving them the free cash – and allowing them to repay the loan – either from the profits of using the money or by handing over the shares themselves. Talk about making your money work for you.

(From: https://www.accounting-degree.org/accounting-tricks/ )

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Response to Zeitghost (Reply #7)

Thu Sep 23, 2021, 04:40 PM

9. The pool so far.

 

My money's on late October.

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Response to PoliticAverse (Reply #2)

Thu Sep 23, 2021, 04:43 PM

10. Problem is they really can't just go and cash it all out either.

It would tank the market.

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Response to WarGamer (Original post)

Thu Sep 23, 2021, 04:58 PM

11. Do you have a citation for tha? While I believe Musk didn't pay

 

tax on appreciation of his stock that he did not sell, he would have paid taxes on any salary he received. And if he received additional stock — as salary — he would have paid taxes on that.


https://finance.zacks.com/pay-taxes-stocks-7577.html

He would have paid capital gain taxes on any stock he has sold too. Hopefully, capital gains rates will increase soon.

He’d be the first to admit wealthy don’t pay enough in taxes, and he has said that publicly.

Facts are important.

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Response to Hoyt (Reply #11)

Thu Sep 23, 2021, 05:04 PM

12. Between 2014 and 2017, 3.3% effective tax rate.

And more recently he did pay taxes on Options that he exercised because the options were about to expire.

I'm just highlighting how billionaires get away with paying little taxes... by hoarding and hiding their wealth.

But it's fair to say he pays ZERO tax on regular income... he isn't paying 36% or 39.6% on anything.

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Response to WarGamer (Reply #12)

Thu Sep 23, 2021, 07:02 PM

16. So you don't really have any facts, or haven't provided all of them.

 

Again, I agree taxes need to increase, but it ought to be based on actual facts.

For example, do you have any idea how much taxes have been paid by the sales of Tesla stock on the open market? And that will increase when Capital Gains rates are increased.

And according to this article he paid $455 Million in taxes from selling stock from 2014 to 2018.

https://www.businessinsider.com/elon-musk-paid-little-in-taxes-2014-2018-propublica-report-2021-6

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Response to WarGamer (Original post)

Thu Sep 23, 2021, 05:08 PM

14. You pay income tax on the value of the stock when it's granted

You also pay income tax if you're paid in options, though that is more complicated and can be abused.

Musk's net worth is high because the value of things he owns is high, not because he's shielded income from taxation. When he realizes those profits by selling or otherwise transferring ownership of the stock stock, he'll be taxed.

BTW, you also owe income taxes on any other kind of property transferred to you due to your employment. If you get paid in picassos, or baked lasagnes you own income taxes on the value of those things. Raising the marginal rate absolutely affects this type of compensation and I have no idea why people think it doesn't.

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Response to mathematic (Reply #14)

Thu Sep 23, 2021, 05:10 PM

15. Bottom line 3.3% effective tax rate.

Tax WEALTH now.

And a "per-transaction" Wall Street fee.

4 Billion shares a day traded...

Let's do $0.01 per share for stock under $3 and $0.10 per share for stocks $3-10 and on and on... buying or selling shares of Amazon or Tesla you can pay a few bucks per share.

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Response to WarGamer (Original post)

Fri Sep 24, 2021, 06:19 AM

17. K & R

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