How do billionaires dodge paying taxes but are first in line to request Federal help when they have a loss?
"For decades, the dominant mantra of Silicon Valley‘s powerful has been that government is just a drag on their innovative spirit. Get regulators off our backs, they’ve argued, and we’ll improve people’s lives to an indescribable degree. Not at the moment. The same investors and entrepreneurs who argued for less government and less regulation in the past successfully lobbied for a government bailout of Silicon Valley Bank, which failed as a result of astoundingly imprudent business practices." - LA Times
How do billionaires rig the game to get richer?
- Exclude up to $10 million of gains - Columbia Law Review
- Pay about half the taxes (20%) of what working Americans have to pay - Investopedia
- Get billions in Federal assistance while bad mouthing the government - Forbes
"If you or your company are affected, I recommend that you reach out to your local congressman to get this on their radar TODAY," Y Combinator president and CEO Garry Tan tweeted. On March 11, Y Combinator launched a petition asking for "depositors to be made whole, and for regulation to prevent this catastrophe." - Business Insider
Privatize profits. Socialize losses.
$10 million exclusion
"Taxpayers may exclude up to $10 million of QSBS gain, with this exclusion applying per small business, meaning that shareholders of multiple small businesses may exclude up to $10 million of gain from sales of each company’s stock. A savvy investor with multiple lucrative investments may, therefore, exclude $10 million of gain from each investment.
Each partner of Andreessen Horowitz, a venture capital firm that made early investments in Lyft, Airbnb, and Pinterest could, for example, receive up to $30 million of tax-free income selling stock from just these three companies. With approximately fifteen general partners, Andreessen Horowitz (the organization) could receive nearly half a billion dollars free from all federal tax." - Columbia Law Review
Republicans fight for 'poor' billionaires
Special treatment for hedge fund managers
As partnerships, private equity funds and hedge funds generally qualify as flow-through entities (also known as pass-through entities). This means that rather than being subject to taxation themselves (as corporations are), they pass their entire tax liability onto their investors... Limited partners are considered passive investors instead of active owners, they are exempt from paying self-employment tax for Social Security and Medicare.
General partners are taxed differently and often more favorably. They typically earn a 2% annual management fee plus 20% of any profits that the fund produces if it meets certain targets. Through a special provision in the law, that 20% is treated not as regular compensation but as carried interest, entitling it to preferential capital gains tax treatment. The highest tax rate on long-term capital gains is 20%, while the highest tax rate on ordinary income is 37%." - Investopedia
Handouts for wealthy donors
Elon Musk and Jeff Bezos are two of the richest men in the world, and while both are clearly brilliant titans of industry, neither of them achieved that status without multiple handouts from the government. Musk’s Tesla and SpaceX have received nearly $5 billion in government aid over the years in various forms—grants, environmental credits, tax breaks, discounted loans, and more—while Amazon received more than $3.7 billion in taxpayer subsidies at the federal level alone. - Fee
"27 Billionaires Have Spent $90 Million to Buy GOP Congress"
A few dozen billionaires are spending tens of millions of dollars on the 2022 midterm elections--mostly to support Republican candidates, including many who have parroted the dangerous lie that the 2020 presidential election was stolen--in a bid to ensure that Congress is full of lawmakers willing "to make their wealthy benefactors even richer." "They're counting on that 'small' investment in anti-tax Republicans to save them billions in taxes," said Americans for Tax Fairness. - Common Dreams
Titled Billionaires Buying Elections, the report from Americans for Tax Fairness (ATF) details how "billionaires are increasingly using their personal fortunes and the profits of connected corporations to drown out regular voters' voices and elect hand-picked candidates who further rig the nation's economy--especially the tax system."
Republicans oppose Biden’s proposed plan to tax ultrawealthy Americans
House Republicans opposed President Biden‘s plan to raise taxes on the ultrawealthy, in line with his equity agenda to level the economic playing field. Majority Leader Steve Scalise accused Mr. Biden of viewing individual Americans as opportunities to raise taxes on, zeroing in on his push to add 87,000 Internal Revenue Service workers in the next decade. Republicans passed a bill to halt that funding for the workers as one of their first actions in Congress last month after taking the majority.
“President Biden is a capitalist and believes that anyone should be able to become a millionaire or a billionaire. He also believes that it is wrong for America to have a tax code that results in America’s wealthiest households paying a lower tax rate than working families,” the administration said in a fact sheet, adding that billionaires pay an average tax rate of 8%. The White House said the new tax plan would reach only 0.01% of U.S. households. - Washington Times
TakeAway: Billionaires should pay their fair share of taxes in return for Federal help. Stop Republican tax cuts for the ultra wealthy in return for political donations.
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