Tax Short - Is a 4% Wealth Tax the Same as a 120% Income Tax?
11/23/21 • 3 min
Jeff discusses wealth and income tax rates. We are used to thinking of tax rates on income. How do we think about tax rates on wealth? Luckily, there is an easy way to convert a wealth tax rate into an income tax rate, and, the result may surprise you.
Jeff discusses wealth and income tax rates. We are used to thinking of tax rates on income. How do we think about tax rates on wealth? Luckily, there is an easy way to convert a wealth tax rate into an income tax rate, and, the result may surprise you.
Previous Episode
Ask the Option Tax-Ologist
We discuss tax issues related to stock options. The discussion is related to Elon Musk's recent infamous twitter poll, in which he asked his followers if he should sell some of his shares in Tesla. Scott buys an option in real time. Related articles are found here:
1. CNBC: https://www.cnbc.com/2021/11/07/elon-musk-faces-a-15-billion-tax-bill-which-is-likely-the-real-reason-hes-selling-stock.html
2. Fortune: https://fortune.com/2021/11/10/tesla-elon-musk-stock-options-tax-mistake/
3. Reuters: https://www.reuters.com/business/autos-transportation/teslas-musk-says-stock-sale-impact-closer-tax-maximization-2021-11-14/
Next Episode
Insights or Incites? Elizabeth Warren's Report on "Tax Dodgers"
Jeff and Scott discuss a recent report released by Senator Elizabeth Warren's office entitled "Tax Dodgers: How Billionaire Corporations Avoid Paying Taxes and How to Fix It" available here.
We discuss the weaknesses in the report, including the language to describe tax avoidance, and the facts underlying the data in the report. We describe how the report does not appear to provide many insights, but instead appears designed to incite anger against large profitable corporations.
Tax Chats - Tax Short - Is a 4% Wealth Tax the Same as a 120% Income Tax?
Transcript
Is a 4% wealth tax the same as a 120% income tax?
There have been many recent proposals to tax the wealth of the very wealthy. Generally, our tax system only taxes income, so, it is hard to think about what it means to tax wealth. For example, a 4% wealth tax seems small compared to, say, a 37% income tax. 4% is way less than 37%! But, how do these numbers really compare? Luckily, there is a way to convert from one tax rate to another. All you need to know is t
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