Biden and Taxes

I'm not advocating for specific rates or tax policies but making a general point. There's often a conflation of different categories of tax payers and different types of taxes with both sides routinely accusing the other of cherry-picking numbers or outright lying.

 

Nope, but there should be

 

Kevin Drum has covered that ad nauseum.

His most recent example

But just to set the record straight on something I think Newsom didn't make clear enough, it really is true that taxes in California aren't generally higher than in Florida. Florida has higher taxes on the poor and California has higher taxes on the rich:

The working poor are better off in California. The working and middle classes are about the same in both states. The upper middle class and the affluent are taxed less in Florida.
Raw data: Taxes in California and Florida - Kevin Drum


From 2009

How to Think About Taxes



As you can see, when you add up all federal taxes and compare it to where the money is, our system is only barely progressive at all. The bottom quintile doesn’t do too badly, though they’re probably paying a little more than they should, but CEOs and bankers are paying only slightly more than teachers and engineers. And if you add in state and local taxes, even this small amount of progressivity goes away. You can come at this from a lot of different angles, but you always end up with the same answer: taken as a whole, our tax system is close to flat. Does this seem fair to you? It shouldn’t.

2018 - The Rich Are Happier About Their Taxes Than the Poor – Mother Jones

Whatever the case, by 2016 we had reached the absurd point where high earners—who really do pay a substantial amount of federal income tax—were more satisfied than all the other classes, who pay almost no federal income tax at all. This is a crazy world.

 

This is where the real issue is found. For example, if you own a billion dollars of securities and borrow $700,000,000 secured by the securities, should you pay a capital gains tax on the loan proceeds or some percentage of the loan proceeds?

 

Yep. This issue isn't that people who declare their income in the top 1% aren't paying enough in taxes.

It's that there are a bunch of people out there who are, in real-world terms, just as rich or richer than the top payers, but work the system to avoid declaring income.

 

Even if this were true, that is not the way Biden is presenting it. If you want to close loopholes, just say close the loopholes. But the same tax system has survived decades of Democrat control of Congress and the White House. The loopholes are a gift to wealthy donors on both sides. You can't blame the people for using the rulebook to their advantage.

 

What if the basis in the securities is $900million? Would there be a taxable event with a $700million loan?

 

That’s the kind of shit that needs to get worked out in the drafting of the legislation, but I would say that $70 million of gain would be recognized on the loan transaction.