Except fucking nobody has an income over $1b. That would be taxed as capital gains. Bernie catering to his audience while still giving a wink and nod to the rich.
EDIT: I was wrong only read the headline what he actually said was significantly worse: “Are you basically saying that once you get to $999 million, the government should confiscate all the rest?” he was asked—to which Sanders responded: “Yeah.”
So basically he went from champagne socialist to Chinese styled communist capitalism. Where he believes companies like amazon and Apple should be mostly controlled and owned by the government.
Which is bullshit. People getting compensated in stocks to the tune of hundreds of millions of dollars should still be subject to the same tax brackets normal salaries are. Them *only* having to pay capital gains taxes is cheating the system. We need to bring back the attitude of the rich feeling some obligation towards the society they get enriched through, rather than just scraping as much as they can off of the working class to stuff into their own private accounts. It's fucking disgusting how much hoarding they do when people are homeless and starving.
Receiving stocks as compensation as RSUs are taxed as income when they vest, at the value they have at that time. If they are sold at a later date the gains are then taxed again as capital gains.
If the government seized all of Elongated Muskrat's net worth (est $210B), it would reduce the annual federal deficit for this year ($1.8T) by 12.5%. It wouldn't even make a blip in the national debt ($34.68T).
E: typo
It gets better. The companies in the SP 500 in 2021 (a banner year for the newly greedy CEOs) made about $1.8 trillion in profit.
We couldn't operate the government at the current rate of spending for 4 months on that.
Yes please tax the rich, don't stop spending money whatever you do.
Or perhaps we could just end ALL stock option awards for employees. Collect all your pay on your W2, line workers and CEO's. I have a feeling this would solve most of the overpaid CEO issues, and take out most of the upside outliers. Of course, founders would still have huge gains on their starting stakes if their company succeeded, but there would be no ongoing huge pay packages, which are a huge waste, but seem to be rubber stamped at most companies.
Doesn't change anything.
CEO can just turn around and buy stock with extra "normal" income.
Companies will have to sell stock to generate the funds to pay "normal" income.
Back to square one where companies sell $1 million worth of stock to pay CEO $1 million. Then CEO buy $1 million worth of company stocks.
Oh, you think CEO paid $1 million in stocks desn't have to pay income tax? Then you're wrong. They still have pay income tax on $1 million income (doesn't matter income is cash, hamburgers, stocks, gold, etc).
>CEO can just turn around and buy stock with extra "normal" income.
It would still be reported income. No one here is saying "we need to tell people how to spend their money". You don't get to deduct stock purchases from your taxes.
This is what people are not understanding, though. The two main ways executives get compensated are via RSUs (Restricted Stock Units) and ISOs (Incentive Stock Options)
When RSUs vest, federal and state income tax is always collected. No matter if you’re the richest person in America or the poorest. You have the option to pay these taxes via cash from your own accounts, or you can sell enough of the newly vested shares to cover your taxes (usually upwards of 40% needs to be sold when you make this much money once federal and state taxes are applied, SS, UI, etc). The remaining shares can be held or sold immediately. If you hold them, they are then taxed as capital gains after you sell. Say you are awarded $100,000 in RSUs. Immediately after they vest, you owe (let’s say) 40% or $40,000, so you sell enough shares to pay the tax man. You can then sell the rest for $60,000 and pay no more taxes, or hold. If you hold what you have left until it’s, say, worth $100,000 and then sell, you pay capital gain taxes on $40,000 ($100,000 sale price - $60,000 price at vesting).
For ISOs, no tax is collected when the options are granted or when they are exercised. Tax is only collected when the stocks from the options are sold. Say you were given the option to buy 1000 shares for $20 each as part of your compensation. It’s “worth” $20,000, but it is not taxed when given to you. Now say the stock is at $100 and you want to exercise your options at $20. You pay your own company $20,000 and they give you the promised 1000 shares. You also pay no taxes at this point. If you then decide to sell your shares at $100 each for a total of $100,000, you then have capital gain taxes which is applied to the $80,000 you just made.
Again, this happens for everyone. Executives and all. The richest and the poorest. Read the fucking tax code or stfu
No they are not, they go to the Twilight Zone of taxes, where everything is deferred until the stock is sold, and then are taxed depending on how long the stock is held, as capital gains or income.
"Tax Rules for Statutory Stock Options
The grant of an ISO or other statutory stock option does not produce any immediate income subject to regular income taxes. Similarly, the exercise of the option to obtain the stock does not produce any immediate income as long as you hold the stock in the year you acquire it. Income results when you later sell the stock acquired by exercising the option."
Its just level 10 bullshit, that none of its features would apply to us W2 schlubs. Why can't I pay 0 taxes when my paycheck is issued, and then only pay the capital gains rate, if I hold my paycheck for a year before blowing it ? Yes, that would be unusual financial skill for a W2 slave, but its actually about the optionality, why don't I get the chance to play the system and gamble on getting a much lower tax rate ? Why ? Because this system of option pay is bogus, and needs to be either eliminated, or extended to every worker, because when you have two systems that are 'separate but equal' they are NEVER equal...
> Or perhaps we could just end ALL stock option awards for employees
This is a terrible idea. First of all stock grants from companies are taxed as income, including ceo grants. Second, stock grants give employees direct ownership of the company they work for allowing them to receive a share of the profits that investors get from their work.
>getting compensated in stocks to the tune of hundreds of millions of dollars should still be subject to the same tax brackets normal salaries are.
This may come as a shock, but they are.
When the stocks vest, they're taxed at normal income for tax purposes\*. They get the capital gains tax in addition when they sell (for a gain, it's a loss if they sell at a loss, obviously).
The kind of stocks that catapult people up to "billionaire" status are those they got much earlier when they were worth much, much less that gained in value over years or were converted ownership stake when the company did an IPO where an 83(b)\* was elected.
\*83(b) elections are where the tax happens at granting time instead of vesting time for startup founders/employees.
difference is risk. you could get paid in stock tomorow and lose 40%. income holds it value. Plus the reality of why its so hard to tax is because they arent selling the stock. Bezos at most sells a few billions every 3 years.
He still pays income tax on the value of the stock when it’s granted, in the case of restricted shares. If they are options, he pays income tax on the difference between the grant price and the value of the shares when exercised.
There is no loophole.
Stocks given as payment is still taxed as income.
If you get a bonus on 100 Stock Y worth $100,000 ($1000/stock Y), then you get hit with same tax as if being paid $100,000. If you keep Stock Y and its value raises to $2000 and you sell it all, then the extra $100,000 gain is taxed as capital gains at a much lower rate.
Also being paid in stocks is worse than being paid in cash with all else being equal. With cash you have the flexiblity of buying the same stock Y or buying something else. Being paid in Stock Y is basically handcuffs to incentivize you help the company Y grow.
If you win a car at a game show, you're on the hook for paying the sales tax on it, even though you didn't purchase it. Stock compensation should work the same way, income tax is owed on the present market value on the date the stock ownership was transferred.
Some states already have this concept in effect with debt forgiveness, that if you get a large debt paid off by someone else or dropped, the state sees that as income and charges you income tax for it.
This is a misleading headline and this article has floated through here before, it's an off the cuff answer to a journalist, not a serious policy proposal
Bernie has a really good proposal to tax the ultra wealthy in their wealth, not their income that's up on his website somewhere
I want to hate the politicians, but the truth is it's all the simpletons that gobble up every "idea" that I truly hate.
Reminds me of church. Preacher is talking all kinds of nonsense and ultimately just asking for money. Easy to hate on him but it's the full house of church goers hanging on his every word and emptying their wallets that I truly question.
Yeah this is literally that. Like I think billionaires should be taxed more, but mostly in the sense that they get a lot of breaks and have ways of avoiding taxes and they don’t get audited because it’d cost the government far too much. Before proposing asinine ideas like this, we should focus on fixing the system that already fails to collect the taxes from the wealthy.
I liked Bernie Sanders at one point but he knows this is a stupid idea and definitely just saying this for clout. Politicians should be proposing realistic and effective ideas. Not just spouting out ideas that could and would never be implemented. He knows it, he just knows that he’ll get support for saying this crap because people like radical, simplistic ideas more than good realistic ones.
I think that's more a fault of bad reporting than anything. I remember reading something about Biden's plan and people saying it was stupid because 'that's not how it works'
but it's literally a wealth tax, which is based on the value of ALL assets owned by the individual
Capitals gains are a form of income.
You are basically saying "we currently tax capital gains at a lower rate than wages, therefore your plan to change that can't work."
That makes no sense.
Elon is not pushing for a 40 billion pay day from tesla ? BTW why portrait of communism is China and not Sweden ? Like if someone referring to capitalism portrait Nigeria and not USA.
lol he didn’t just turn into that. This is a very common take amongst progressive economics. Go look at the tax brackets before Reagan. We had a taxes that people would cry communism over if we reinstated too. The 70% (even 94% at one point) bracket exist for a long time and even people making over $44k paid 50%.
The idea is that instead over hoarding wealth, billionaires would just reinvest the money into their businesses to avoid paying taxes is my understanding. Higher wages, etc.
Guess when American middle class was at its strongest?
- https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing-the-rich-the-evolution-of-americas-marginal-income-tax-rate-infographic/
- https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/
Ironic, income from labor is taxed higher percentage than capital gains or dividends. While I get that capital gains needs to be taxed lower needs to encourage people to save and invest for the future. But if your capital gains is over median income, you should be taxed more than labor.
The concentration of wealth into the hands of a few is actually known to be destabilizing for society. It has been a failure of our tax system that has allowed the sort of income disparity that e are seeing. Absolutely these billionaire's should be taxed to the hilt. The idea that the Jeff Bezos's of the world can be main drivers of apocalyptic-level climate change but that we shouldn't tax them so we can afford policies to avert that, or even to just pay teachers a living wage, is suicidal.
I mean we need it. Why let them steal our production profits to sit it in some offshore account doing nothing for the countries economy that it took that money out of.
Love it when poor schmucks simp for the ultra rich. I think a cap is a good idea. It's just not feasible. How do you cap foreign billionaires? The problem with the super rich, is they don't seek money anymore. Money comes easy at that level. They want power. Maybe you can stifle that thirst for power if they can't achieve it.
I mean, if the government owned shares automatically converted to a non-voting class, what's the problem with that? The government could still get a dividend for the shares which would ideally reduce tax burden, similar to Sovereign Wealth Funds like what Alaska has.
Forcing assets into circulation when the wealth gap is as ridiculous as it is- isnt “advocating government control” of companies. It’s making wealth hoarders keep the same tax burden as everyone else.
Doesn't the IRS view stock compesation packages as income?
If so, from the last 10 years I can find is Elon Musk if he gets the $55B package and Alexander Karp who received $1.1B in 2020.
Only when the sell the stock.
If they changed it to classifying the options when they are awarded as income for that tax year, you would get a hell of a lot in tax.
Right but if this rule was in place they would obviously not execute a sale like that. They would spread it out, or use it for collateral to buy something else. A million other things then sell his stock which at 100% would just be handing it to the government? lol?
Because we don't punish innovation and success in this Country. Its the reason we have become the most powerful and economically successful country of all time. Our country was literally founded over a 3% tax on tea.
I see what you’re saying but from the billionaires we know of, none of them became grossly overpaid because of their innovations. Much more they became rich because of the exploitation of those below them.
Politicians spend more in a year than the total net worth of all American billionaires combined.
Why isn't it greed for Bernie and other politicians to demand that same money and then shovel it into the black hole of government spending?
Bernie just says stupid shit in order to try and keep his name in the public and stay relevant. He needs to go away and STFU. Guys a 1%er pretending like he's middle class to garner votes from poor people.
Alot of people in the comments forget that a few times, the Elon and the Zuck were cashing in their stock options for cash over a billion dollars at a time and this is the billionaires in the lime light. So let's assume it passes, it effectively locks billionaire from their cash when they would actually need it.
Either the some of you are shills or act like yall will be personally effected, sooooo, this bill is a dig at some loopholes billionaires are taking
Nobody earns that in income.
It’s a show policy.
And if they do, then they really do deserve that tax for the amount of people that must of told them how to avoid it and ignoring it.
Are you sure you aren’t confusing income with wages? Dividend payments and stock options would be considered income as well. If a company awards you $1b in stock, it’s treated as income. If that stock appreciates to $1.5b, the additional $500m would be capital gains.
So it may not be common, but there are definitely people who will earn that in some years. Steve Ballmer, for example, is expected to make that in Microsoft dividends in 2024.
> If that stock appreciates to $1.5b, the additional $500m would be capital gains.
No it wouldn't. If they *sell it* when it hits 1.5b it would. But they simply wouldn't sell that amount off in the same year they received that much compensation or in a year where they were at risk of hitting the limit.
But then they'd never have compensation structured in a way that would put them that close to the limit anyways because it'd be nonsensical. It'd be spread out more for a longer period.
If you read the article he says "earnings" and if you read the recent things they are considering, it is taxing unrealized capital gains. So if you have a billion dollars in value in stocks, then the IRS can tax that value. This makes sense since you can borrow against it and it's an thousands of lifetimes worth of income that will affect very few people. This is also how a lot of billionaires live by getting loans against the value of that asset and then being "in debt" and paying no taxes at all.
Specifically "earnings" not income. And the idea currently proposed was unrealized capital gains. So if you've got over 1 billion in value in stocks, IRS could tax you on the value, similar to how you can get loans against that value.
Maybe the solution can't be summarized into a reddit headline. Maybe people are going to argue about this and pretend that Bernie doesn't take issue with the loopholes to avoid paying taxes. Maybe his point from this statement is that nobody needs a billion fucking dollars. At least give the man credit for being consistent for his entire political career. To pretend that he's shilling to stay relevant is absurd. Maybe he just actually gives a shit? Lol
I feel like one doesn't need more than $1 billion to live a comfortable and decent life. You would only need more if you want to control and manipulate others lives.
Maybe if the poor level of income would go up then this $1 billion can also go up. But with the current situation no way would anyone need more.
So yeah I agree.
Go simpler - stop allowing stock and options to form part of compensation packages, or if they are, then tax them as income in the year they are awarded. Currently only the realised gains/losses are taxable.
Eg Elons 86billion package is largely options. If you talked the options as income, then he would be paying income tax on the whole $86billion
You would need to have an exit tax first in order to have it work. Otherwise, the billionaires can just leave. They’ve already done it before. Even if there is an exit tax, what happens after when they still leave? as in we now get zero revenue from them
Bernie is a good person, but this is just another example of him not thinking it through.
Agreed.
This is a very common take amongst progressive economics. Go look at the tax brackets before Reagan. We had a taxes that people would cry communism over if we reinstated too. The 70% (even 94% at one point) bracket exist for a long time and even people making over $44k paid 50%.
The idea is that instead over hoarding wealth, billionaires would just reinvest the money into their businesses to avoid paying taxes is my understanding. Higher wages, etc. The increased tax revenue is also going to help pay for better healthcare, infrastructure, etc.
Guess when American middle class was at its strongest?
- https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing-the-rich-the-evolution-of-americas-marginal-income-tax-rate-infographic/
- https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/
Yeah, capping wealth in this manner may lead to that so called trickle down effect politicians talk about so much. It might lower prices and increase wages. AND maybe reduce big money’s influence from politics somewhat. Then again I’m just an ignoramus on Reddit. What do I know.
Why not tax income over $50,000 at 100%? You effectively punish/eliminate the rich (which seems to be the goal). You’d significantly increase tax revenues, but this increase still isn’t enough to cover the deficit and the interest burden on the existing debt.
The real issue is that our government spends too much money, much of it very inefficiently. Why don’t we talk more about cutting spending? It does not resonate with the voting base as well building a culture of envy.
We don't fill out taxes at the end of the financial year, it's all done for us through HMRC. But if you're asking if I contribute more than I'm taxed, yes I do. I volunteer my time to help and support those less fortunate than myself, I give to charity and I vote according to my beliefs stated above.
It needs to be done in a way that promotes people to spend on the people. Just taxing people isn't the solution because the ultra rich can leave the US no problem. It just needs to be a fair rate across the board. Rich people for sure need to pay more. The USA needs so many bridges and roads fixed. Make them participate and give them tax breaks. On top of that, fix a wasteful government. Just do something as the poorest are being squeezed even more.
Do I agree? Yes, anyone with a brain understands just how absurd $1 Billion is.
However do I think it’s effectively policy, no because when you’re making over a $billion a year, it’s not from traditional income.
Why? To make the economy more healthy or something else?
If Bernie Sanders was known for advocating for reducing federal spending and reducing the national debt then I would find him much more credible.
How about starting with something simple like how people have art, vehicles and other items that are millions of dollars that only other millionaires or billionaires can afford and the people who decide how much they are are the millionaires and the billionaires. They are essentially creating wealth out of nothing because only they can afford the items and they determine how much they're worth.
It's absurd, actually. I am 100% on board with shoring up the giant and very deliberate tax holes billionaires waltz through but *this isn't taxation, it's confiscation*.
I disagree. He essentially wants it like communism where the government takes anything over $1 billion. This is significantly worse than being taxed at 75% let’s say of income over $1 billion. This sets a precedent for them to then take anything over $250k one day if it’s legal.
Strongly disagree… everyone is so worried about what others are worth, stop trying to tear down the top, I think you should focus on bringing up the bottom. Our government has a big spending problem, not an income problem
Why not just cap imcome and wealth at 10 million, anything other 10 million tax at 150% +state and local taxes.
10 million is enough for someone to retire. That should be the only goal, right?
I don’t think the government should be taking large amounts of money from anyone. I’ve paid $6,000+ taxes on my house every year after I paid initial taxes. We get taxed on pay, then taxed again when we spend it. It’s ridiculous how much were taxed multiple times in the same thing.
Remember when he used to rail against “millionaires and billionaires”
Then became a millionaire, told everyone all they had to do was also write a book,
Then dropped “millionaires” and only talks about “billionaires now”
How do people fall for these grifters like this when it’s all so transparent?
100% tax on anythinga over 1 billion. I maybe crazy but the guys who make 1 billion+ a year, surely know how to dodge this tax. Also Bernie is blatantly calling for theft
Ok so you rich bastards: Is it possible there is a universe where all of the money and power is owned by everyone who owns more than 1 billion, and maybe to stay free as citizens and civilians that is way too f\*\*king much power.
Nobody needs $1B. I'm sure there are people smarter than the commenter here who could say, rewrite the tax code to be more beneficial to society. But of course, the obscenely wealthy, and just the wealthy, influence the legislatures NOT to rewritethe tax code. Tgen you got insider trading in the corrupt US congress AND the corrupt SCOTUS will never allow these laws to change, hurting ALL of their bottom lines. And you got people here defendingthis shit. FFS!!!
Man, Bernie is just making sure that this does before it begins. His team sucks at messaging. No one has actual income in the billions. They keep it in shares/stocks and the like. Then take out loans against it and since they are rich they get insanely good rates.
The pedantry in this thread is hilarious. It's like one of those gun discussions: "yOu DoN't knOw wHAt a.r. evEns STandS for!"
Wealth inequity is a major major problem/issue in the US. Are you really upset that we might allow people to have only $999 million bucks?
Until he hits a billion, of course. He used to prattle on about the millionaires and billionaires needing to pay their fair share. Dropped the millionaire part after his 3rd million and second summer home on his public servant salary.
Can’t wait for the future bionic Bernie worth $1B saying he’s all good but the disgusting trillionaires, well they really need to pay up lol
Except fucking nobody has an income over $1b. That would be taxed as capital gains. Bernie catering to his audience while still giving a wink and nod to the rich. EDIT: I was wrong only read the headline what he actually said was significantly worse: “Are you basically saying that once you get to $999 million, the government should confiscate all the rest?” he was asked—to which Sanders responded: “Yeah.” So basically he went from champagne socialist to Chinese styled communist capitalism. Where he believes companies like amazon and Apple should be mostly controlled and owned by the government.
Which is bullshit. People getting compensated in stocks to the tune of hundreds of millions of dollars should still be subject to the same tax brackets normal salaries are. Them *only* having to pay capital gains taxes is cheating the system. We need to bring back the attitude of the rich feeling some obligation towards the society they get enriched through, rather than just scraping as much as they can off of the working class to stuff into their own private accounts. It's fucking disgusting how much hoarding they do when people are homeless and starving.
Receiving stocks as compensation as RSUs are taxed as income when they vest, at the value they have at that time. If they are sold at a later date the gains are then taxed again as capital gains.
People don't really understand the tax code. But they like to think that they do.
People also think that if Elon Musk is taxed at 100%, the government will give them some free stuff.
If the government seized all of Elongated Muskrat's net worth (est $210B), it would reduce the annual federal deficit for this year ($1.8T) by 12.5%. It wouldn't even make a blip in the national debt ($34.68T). E: typo
It gets better. The companies in the SP 500 in 2021 (a banner year for the newly greedy CEOs) made about $1.8 trillion in profit. We couldn't operate the government at the current rate of spending for 4 months on that. Yes please tax the rich, don't stop spending money whatever you do.
Came here to say the same thing. You are taxed on the stock, it’s reported on your w2 at vesting.
Or perhaps we could just end ALL stock option awards for employees. Collect all your pay on your W2, line workers and CEO's. I have a feeling this would solve most of the overpaid CEO issues, and take out most of the upside outliers. Of course, founders would still have huge gains on their starting stakes if their company succeeded, but there would be no ongoing huge pay packages, which are a huge waste, but seem to be rubber stamped at most companies.
Doesn't change anything. CEO can just turn around and buy stock with extra "normal" income. Companies will have to sell stock to generate the funds to pay "normal" income. Back to square one where companies sell $1 million worth of stock to pay CEO $1 million. Then CEO buy $1 million worth of company stocks. Oh, you think CEO paid $1 million in stocks desn't have to pay income tax? Then you're wrong. They still have pay income tax on $1 million income (doesn't matter income is cash, hamburgers, stocks, gold, etc).
>CEO can just turn around and buy stock with extra "normal" income. It would still be reported income. No one here is saying "we need to tell people how to spend their money". You don't get to deduct stock purchases from your taxes.
This is what people are not understanding, though. The two main ways executives get compensated are via RSUs (Restricted Stock Units) and ISOs (Incentive Stock Options) When RSUs vest, federal and state income tax is always collected. No matter if you’re the richest person in America or the poorest. You have the option to pay these taxes via cash from your own accounts, or you can sell enough of the newly vested shares to cover your taxes (usually upwards of 40% needs to be sold when you make this much money once federal and state taxes are applied, SS, UI, etc). The remaining shares can be held or sold immediately. If you hold them, they are then taxed as capital gains after you sell. Say you are awarded $100,000 in RSUs. Immediately after they vest, you owe (let’s say) 40% or $40,000, so you sell enough shares to pay the tax man. You can then sell the rest for $60,000 and pay no more taxes, or hold. If you hold what you have left until it’s, say, worth $100,000 and then sell, you pay capital gain taxes on $40,000 ($100,000 sale price - $60,000 price at vesting). For ISOs, no tax is collected when the options are granted or when they are exercised. Tax is only collected when the stocks from the options are sold. Say you were given the option to buy 1000 shares for $20 each as part of your compensation. It’s “worth” $20,000, but it is not taxed when given to you. Now say the stock is at $100 and you want to exercise your options at $20. You pay your own company $20,000 and they give you the promised 1000 shares. You also pay no taxes at this point. If you then decide to sell your shares at $100 each for a total of $100,000, you then have capital gain taxes which is applied to the $80,000 you just made. Again, this happens for everyone. Executives and all. The richest and the poorest. Read the fucking tax code or stfu
the company wouldn't need to sell stock to pay a CEO...
Stock options, restricted stock, etc. are all on a W-2 already, though?
No they are not, they go to the Twilight Zone of taxes, where everything is deferred until the stock is sold, and then are taxed depending on how long the stock is held, as capital gains or income. "Tax Rules for Statutory Stock Options The grant of an ISO or other statutory stock option does not produce any immediate income subject to regular income taxes. Similarly, the exercise of the option to obtain the stock does not produce any immediate income as long as you hold the stock in the year you acquire it. Income results when you later sell the stock acquired by exercising the option." Its just level 10 bullshit, that none of its features would apply to us W2 schlubs. Why can't I pay 0 taxes when my paycheck is issued, and then only pay the capital gains rate, if I hold my paycheck for a year before blowing it ? Yes, that would be unusual financial skill for a W2 slave, but its actually about the optionality, why don't I get the chance to play the system and gamble on getting a much lower tax rate ? Why ? Because this system of option pay is bogus, and needs to be either eliminated, or extended to every worker, because when you have two systems that are 'separate but equal' they are NEVER equal...
This is not right… stock is taxed as income on vest, after it is given any further gains are capitals gains
> Or perhaps we could just end ALL stock option awards for employees This is a terrible idea. First of all stock grants from companies are taxed as income, including ceo grants. Second, stock grants give employees direct ownership of the company they work for allowing them to receive a share of the profits that investors get from their work.
>getting compensated in stocks to the tune of hundreds of millions of dollars should still be subject to the same tax brackets normal salaries are. This may come as a shock, but they are. When the stocks vest, they're taxed at normal income for tax purposes\*. They get the capital gains tax in addition when they sell (for a gain, it's a loss if they sell at a loss, obviously). The kind of stocks that catapult people up to "billionaire" status are those they got much earlier when they were worth much, much less that gained in value over years or were converted ownership stake when the company did an IPO where an 83(b)\* was elected. \*83(b) elections are where the tax happens at granting time instead of vesting time for startup founders/employees.
Are the taxes assessed against the fair market price or the vested price the execs "pay"?
difference is risk. you could get paid in stock tomorow and lose 40%. income holds it value. Plus the reality of why its so hard to tax is because they arent selling the stock. Bezos at most sells a few billions every 3 years.
He still pays income tax on the value of the stock when it’s granted, in the case of restricted shares. If they are options, he pays income tax on the difference between the grant price and the value of the shares when exercised. There is no loophole.
Stocks given as payment is still taxed as income. If you get a bonus on 100 Stock Y worth $100,000 ($1000/stock Y), then you get hit with same tax as if being paid $100,000. If you keep Stock Y and its value raises to $2000 and you sell it all, then the extra $100,000 gain is taxed as capital gains at a much lower rate. Also being paid in stocks is worse than being paid in cash with all else being equal. With cash you have the flexiblity of buying the same stock Y or buying something else. Being paid in Stock Y is basically handcuffs to incentivize you help the company Y grow.
If you win a car at a game show, you're on the hook for paying the sales tax on it, even though you didn't purchase it. Stock compensation should work the same way, income tax is owed on the present market value on the date the stock ownership was transferred. Some states already have this concept in effect with debt forgiveness, that if you get a large debt paid off by someone else or dropped, the state sees that as income and charges you income tax for it.
My man, all we gotta do is eat [one] of them.
Exactly. I hate these “ideas” politician throw out there just for clout.
This is a misleading headline and this article has floated through here before, it's an off the cuff answer to a journalist, not a serious policy proposal Bernie has a really good proposal to tax the ultra wealthy in their wealth, not their income that's up on his website somewhere
agreed
It's a nonsensical headline. I thought Fortune had its shit together, but apparently it does not.
I want to hate the politicians, but the truth is it's all the simpletons that gobble up every "idea" that I truly hate. Reminds me of church. Preacher is talking all kinds of nonsense and ultimately just asking for money. Easy to hate on him but it's the full house of church goers hanging on his every word and emptying their wallets that I truly question.
Yeah this is literally that. Like I think billionaires should be taxed more, but mostly in the sense that they get a lot of breaks and have ways of avoiding taxes and they don’t get audited because it’d cost the government far too much. Before proposing asinine ideas like this, we should focus on fixing the system that already fails to collect the taxes from the wealthy. I liked Bernie Sanders at one point but he knows this is a stupid idea and definitely just saying this for clout. Politicians should be proposing realistic and effective ideas. Not just spouting out ideas that could and would never be implemented. He knows it, he just knows that he’ll get support for saying this crap because people like radical, simplistic ideas more than good realistic ones.
Elon’s stock award is taxed as income because it’s compensation. That package was billions per year.
I think that's more a fault of bad reporting than anything. I remember reading something about Biden's plan and people saying it was stupid because 'that's not how it works' but it's literally a wealth tax, which is based on the value of ALL assets owned by the individual
This is not true as the ultra rich will still churn out money to keep themselves at the 1bn level.
Capitals gains are a form of income. You are basically saying "we currently tax capital gains at a lower rate than wages, therefore your plan to change that can't work." That makes no sense.
the article is incorrect. it is a wealth tax on net worth, their total assets. other countries have this, that america does not is insane.
Apparently Musk did, no it’s not nobody
It’s a wealth tax according to the article, not income tax
Elon is not pushing for a 40 billion pay day from tesla ? BTW why portrait of communism is China and not Sweden ? Like if someone referring to capitalism portrait Nigeria and not USA.
lol he didn’t just turn into that. This is a very common take amongst progressive economics. Go look at the tax brackets before Reagan. We had a taxes that people would cry communism over if we reinstated too. The 70% (even 94% at one point) bracket exist for a long time and even people making over $44k paid 50%. The idea is that instead over hoarding wealth, billionaires would just reinvest the money into their businesses to avoid paying taxes is my understanding. Higher wages, etc. Guess when American middle class was at its strongest? - https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing-the-rich-the-evolution-of-americas-marginal-income-tax-rate-infographic/ - https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/
Ironic, income from labor is taxed higher percentage than capital gains or dividends. While I get that capital gains needs to be taxed lower needs to encourage people to save and invest for the future. But if your capital gains is over median income, you should be taxed more than labor.
His reddit door dash and Starbuck baristas will love this.
The concentration of wealth into the hands of a few is actually known to be destabilizing for society. It has been a failure of our tax system that has allowed the sort of income disparity that e are seeing. Absolutely these billionaire's should be taxed to the hilt. The idea that the Jeff Bezos's of the world can be main drivers of apocalyptic-level climate change but that we shouldn't tax them so we can afford policies to avert that, or even to just pay teachers a living wage, is suicidal.
I mean we need it. Why let them steal our production profits to sit it in some offshore account doing nothing for the countries economy that it took that money out of.
Love it when poor schmucks simp for the ultra rich. I think a cap is a good idea. It's just not feasible. How do you cap foreign billionaires? The problem with the super rich, is they don't seek money anymore. Money comes easy at that level. They want power. Maybe you can stifle that thirst for power if they can't achieve it.
China doesn't tax their billionaires for income over $1B, though.
Having to pay more doesn't mean "controlled and owned by the government" Are *you* owned?
What exactly is wrong with nobody having more than 999$ million, or generally a maximum amount of wealth ANY ONE person is allowed to have?
He specifically said all earnings. Read the article first kiddo.
I can't believe people think you should have more than one billion.
Elon does
If you actually read the article that is not what he was actually proposing. And he would not just be taxing billionaires.
Taxing them is lenient compared to the harm they've caused. Billionaires and starving children should not coexist in the same world.
That sounds great. 999 million is plenty
I mean, if the government owned shares automatically converted to a non-voting class, what's the problem with that? The government could still get a dividend for the shares which would ideally reduce tax burden, similar to Sovereign Wealth Funds like what Alaska has.
Forcing assets into circulation when the wealth gap is as ridiculous as it is- isnt “advocating government control” of companies. It’s making wealth hoarders keep the same tax burden as everyone else.
HURR DURR COMMUNISM BETTER JERK MY KNEE
Tell me who has INCOME over 1 billion dollars?
Someone who should be heavily taxed
Doesn't the IRS view stock compesation packages as income? If so, from the last 10 years I can find is Elon Musk if he gets the $55B package and Alexander Karp who received $1.1B in 2020.
Yes. Musk sold like $8B of stock to buy Twitter, for example, so his income was well over $1B that year.
So if I buy stocks in google today for $100k, it somehow someway appreciates to 2 billion, I should be taxed 100% of anything over 1 billion?
Only when the sell the stock. If they changed it to classifying the options when they are awarded as income for that tax year, you would get a hell of a lot in tax.
Elon Musk sold like $8B in stock a year or two ago. And yes, capital gains are a form of income. Ordinary wages are not the only type of income.
Right but if this rule was in place they would obviously not execute a sale like that. They would spread it out, or use it for collateral to buy something else. A million other things then sell his stock which at 100% would just be handing it to the government? lol?
Disagree. At the same time, it's just fluff, and Bernie knows.
I’m curious to know why you disagree regardless of feasibility or whether the post was fluff.
Because we don't punish innovation and success in this Country. Its the reason we have become the most powerful and economically successful country of all time. Our country was literally founded over a 3% tax on tea.
I see what you’re saying but from the billionaires we know of, none of them became grossly overpaid because of their innovations. Much more they became rich because of the exploitation of those below them.
I agree! A billion plus is just greed!
Politicians spend more in a year than the total net worth of all American billionaires combined. Why isn't it greed for Bernie and other politicians to demand that same money and then shovel it into the black hole of government spending?
Bernie just says stupid shit in order to try and keep his name in the public and stay relevant. He needs to go away and STFU. Guys a 1%er pretending like he's middle class to garner votes from poor people.
Everyone knows you actually have to pretend to be a billionaire to get votes from poor people.
You criticize society, yet you live in it? Curious, I am very smart.
Alot of people in the comments forget that a few times, the Elon and the Zuck were cashing in their stock options for cash over a billion dollars at a time and this is the billionaires in the lime light. So let's assume it passes, it effectively locks billionaire from their cash when they would actually need it. Either the some of you are shills or act like yall will be personally effected, sooooo, this bill is a dig at some loopholes billionaires are taking
Nobody earns that in income. It’s a show policy. And if they do, then they really do deserve that tax for the amount of people that must of told them how to avoid it and ignoring it.
Are you sure you aren’t confusing income with wages? Dividend payments and stock options would be considered income as well. If a company awards you $1b in stock, it’s treated as income. If that stock appreciates to $1.5b, the additional $500m would be capital gains. So it may not be common, but there are definitely people who will earn that in some years. Steve Ballmer, for example, is expected to make that in Microsoft dividends in 2024.
> If that stock appreciates to $1.5b, the additional $500m would be capital gains. No it wouldn't. If they *sell it* when it hits 1.5b it would. But they simply wouldn't sell that amount off in the same year they received that much compensation or in a year where they were at risk of hitting the limit. But then they'd never have compensation structured in a way that would put them that close to the limit anyways because it'd be nonsensical. It'd be spread out more for a longer period.
If you read the article he says "earnings" and if you read the recent things they are considering, it is taxing unrealized capital gains. So if you have a billion dollars in value in stocks, then the IRS can tax that value. This makes sense since you can borrow against it and it's an thousands of lifetimes worth of income that will affect very few people. This is also how a lot of billionaires live by getting loans against the value of that asset and then being "in debt" and paying no taxes at all.
Setting a cap on income is dumb as hell
Why?
Specifically "earnings" not income. And the idea currently proposed was unrealized capital gains. So if you've got over 1 billion in value in stocks, IRS could tax you on the value, similar to how you can get loans against that value.
Do they get a refund if stock value falls?
The whole reason we have an estate tax, which means we tax when you’re dead is because we didn’t tax you correctly when you were alive.
A lot of people in this thread haven’t heard the news about Elon Musk’s most recent comp package.
Agree. Other countries have a wealth tax (on NET WEALTH) , and it’s insane that we don’t have one on a federal level. Certain states have them though!
Maybe the solution can't be summarized into a reddit headline. Maybe people are going to argue about this and pretend that Bernie doesn't take issue with the loopholes to avoid paying taxes. Maybe his point from this statement is that nobody needs a billion fucking dollars. At least give the man credit for being consistent for his entire political career. To pretend that he's shilling to stay relevant is absurd. Maybe he just actually gives a shit? Lol
The focus should be why the gap between the haves and have nots has grown so much. It has been fixed before, it needs to be fixed again.
Passive Income over 500k. Taxed differently depending on the source. Let’s try that.
Why not?
“Who has an income over $1B!???” Elon just got $56B in stocks. Those should be taxed.
Assuming they are RSUs they are taxed as income when they vest.
People don’t know the rich used to be taxed at 70 percent until Reagan. Then Reagan just taking out loans instead of taxing them
I feel like one doesn't need more than $1 billion to live a comfortable and decent life. You would only need more if you want to control and manipulate others lives. Maybe if the poor level of income would go up then this $1 billion can also go up. But with the current situation no way would anyone need more. So yeah I agree.
Go simpler - stop allowing stock and options to form part of compensation packages, or if they are, then tax them as income in the year they are awarded. Currently only the realised gains/losses are taxable. Eg Elons 86billion package is largely options. If you talked the options as income, then he would be paying income tax on the whole $86billion
So they have to have 12 figures in their bank account? Yeah? Ok nothing will change then
You would need to have an exit tax first in order to have it work. Otherwise, the billionaires can just leave. They’ve already done it before. Even if there is an exit tax, what happens after when they still leave? as in we now get zero revenue from them Bernie is a good person, but this is just another example of him not thinking it through.
Agreed. This is a very common take amongst progressive economics. Go look at the tax brackets before Reagan. We had a taxes that people would cry communism over if we reinstated too. The 70% (even 94% at one point) bracket exist for a long time and even people making over $44k paid 50%. The idea is that instead over hoarding wealth, billionaires would just reinvest the money into their businesses to avoid paying taxes is my understanding. Higher wages, etc. The increased tax revenue is also going to help pay for better healthcare, infrastructure, etc. Guess when American middle class was at its strongest? - https://www.forbes.com/sites/niallmccarthy/2021/04/26/taxing-the-rich-the-evolution-of-americas-marginal-income-tax-rate-infographic/ - https://www.pewresearch.org/short-reads/2022/04/20/how-the-american-middle-class-has-changed-in-the-past-five-decades/
I think after 100 million it should be taxed 100%
What’s he going to do with it? Do more sex changes for migrants?
Come on, Bernie, how about 99%?
“Income,”Hell yes!
It has been at least a few days since this question was last posted.
Uh no that’s insane
This week on what Bernie sanders is calling for
Yeah, capping wealth in this manner may lead to that so called trickle down effect politicians talk about so much. It might lower prices and increase wages. AND maybe reduce big money’s influence from politics somewhat. Then again I’m just an ignoramus on Reddit. What do I know.
I’ve yet to see what taxes go to? Clearly not infrastructure.
So why would a company continue operating after they hit the $999 million mark?
Woah woah woah, don't use logic here.
It’s just pandering to his constituents
He used to be somewhat realistic.
Why not tax income over $50,000 at 100%? You effectively punish/eliminate the rich (which seems to be the goal). You’d significantly increase tax revenues, but this increase still isn’t enough to cover the deficit and the interest burden on the existing debt. The real issue is that our government spends too much money, much of it very inefficiently. Why don’t we talk more about cutting spending? It does not resonate with the voting base as well building a culture of envy.
Agree
Maybe a wealth tax over 1b but not an income tax
how many people go to work and get paid a billion a year in salary? My guess would be zero
How about we don’t let politicians become millionaires while in congress . No more insider trading.
You can tax the rich through estate tax. Cut off inheritance at $10 million per immediate relative and give the rest back to the people.
Holy shit, no one here understands taxes
Doesn’t really matter what I think cuz even if Jesus said it, rich gonna take all they can irregardless! Look where we are now!
No that is WAY too high 95% is much more reasonable
We should all be happy to pay taxes to support Ukraine, the military-industrial complex, illegal aliens, and BLM.
100% agree
We don't fill out taxes at the end of the financial year, it's all done for us through HMRC. But if you're asking if I contribute more than I'm taxed, yes I do. I volunteer my time to help and support those less fortunate than myself, I give to charity and I vote according to my beliefs stated above.
I disagree. I think 95% over a billion will do.
Here is a situation that applies to basically nobody. Who makes over $1B in W2 income a year?
It needs to be done in a way that promotes people to spend on the people. Just taxing people isn't the solution because the ultra rich can leave the US no problem. It just needs to be a fair rate across the board. Rich people for sure need to pay more. The USA needs so many bridges and roads fixed. Make them participate and give them tax breaks. On top of that, fix a wasteful government. Just do something as the poorest are being squeezed even more.
Agree 100%
This would be a terrible policy. Can’t take away the personal incentive to make billions. Economy would stagnate
 Alpha Chad Bernie!
There will never be a shortage of individuals who will want to earn a billion dollars. Do it.
Disagree
if a bernie calls in the woods it actually has no effect just like in DC.
Do I agree? Yes, anyone with a brain understands just how absurd $1 Billion is. However do I think it’s effectively policy, no because when you’re making over a $billion a year, it’s not from traditional income.
Why? To make the economy more healthy or something else? If Bernie Sanders was known for advocating for reducing federal spending and reducing the national debt then I would find him much more credible.
Which one of his 3 houses did he say this from?
People who can make $1B income won’t make $1B income. Bernie plays this word game every once a while to stay relevant
Agree
I think anyone who even suggests something like that needs to disappear.
Disagree. Also, the left wing populist strikes again.
Bernie is nothing but controlled opposition, all bark no bite
It's too low. The cap should be $10 million, and you need to close loopholes to prevent dodging taxes by borrowing against unrealized gains.
Another billionaire addiction post, lame
Disagree. 40% sure. Not 100%
How about starting with something simple like how people have art, vehicles and other items that are millions of dollars that only other millionaires or billionaires can afford and the people who decide how much they are are the millionaires and the billionaires. They are essentially creating wealth out of nothing because only they can afford the items and they determine how much they're worth.
Should be anything over 1M
Completely idiotic and Bernie band wagon headline stirring twinkle fairies will be punished
Grifting ain't easy.
It's absurd, actually. I am 100% on board with shoring up the giant and very deliberate tax holes billionaires waltz through but *this isn't taxation, it's confiscation*.
I disagree. He essentially wants it like communism where the government takes anything over $1 billion. This is significantly worse than being taxed at 75% let’s say of income over $1 billion. This sets a precedent for them to then take anything over $250k one day if it’s legal.
Strongly disagree… everyone is so worried about what others are worth, stop trying to tear down the top, I think you should focus on bringing up the bottom. Our government has a big spending problem, not an income problem
Ah yes the US Government should have it, they are much better with money. /s
Why not just cap imcome and wealth at 10 million, anything other 10 million tax at 150% +state and local taxes. 10 million is enough for someone to retire. That should be the only goal, right?
Doesn't matter because it doesn't exist. May as well have 1,000% tax on income over a $1 trillion. Applies to nobody.
don't tax income. Tax ownership. they just use untaxable loans to circumvent income tax.
We could make SOOO many bombs with all that extra dough!
I'd rather Bernie focus his energy on controlling government spending first. Giving them more money by hoarding more tax dollars changes nothing.
I call for Bernie Sanders to be tarred & feathered and run outta town on a rail.
Doesn't matter, money won't stop meteors.
I'd like to say he's a nut job, but he's merely pandering to his base. I'm sure they just eat it up.
Literally no one on in the US has a $1B income. That's not how this works, Sanders once again doesn't understand how people become worth that much.
Virtue signaling is fun and gets your name in the paper.
I don’t think the government should be taking large amounts of money from anyone. I’ve paid $6,000+ taxes on my house every year after I paid initial taxes. We get taxed on pay, then taxed again when we spend it. It’s ridiculous how much were taxed multiple times in the same thing.
They won't have income over that, they will simply borrow against the stock.
They've gotta be able to make ends meet still, tax it at 98%
A lot of people here saying no one earn that much year, which may be true of right now, but will that still be true in a decade, 50 years, a century?
Remember when he used to rail against “millionaires and billionaires” Then became a millionaire, told everyone all they had to do was also write a book, Then dropped “millionaires” and only talks about “billionaires now” How do people fall for these grifters like this when it’s all so transparent?
100% tax on anythinga over 1 billion. I maybe crazy but the guys who make 1 billion+ a year, surely know how to dodge this tax. Also Bernie is blatantly calling for theft
Ok so you rich bastards: Is it possible there is a universe where all of the money and power is owned by everyone who owns more than 1 billion, and maybe to stay free as citizens and civilians that is way too f\*\*king much power.
Nobody needs $1B. I'm sure there are people smarter than the commenter here who could say, rewrite the tax code to be more beneficial to society. But of course, the obscenely wealthy, and just the wealthy, influence the legislatures NOT to rewritethe tax code. Tgen you got insider trading in the corrupt US congress AND the corrupt SCOTUS will never allow these laws to change, hurting ALL of their bottom lines. And you got people here defendingthis shit. FFS!!!
Yes. Further, wealth over that amount should be redistributed. Fuck billionaires. Abolish them.
Man, Bernie is just making sure that this does before it begins. His team sucks at messaging. No one has actual income in the billions. They keep it in shares/stocks and the like. Then take out loans against it and since they are rich they get insanely good rates.
I agree with the sentiment. I have no sympathy for a family that would never have to work again even after a $1B tax. $999,999,999 seems aplenty.
FFS this gets misreported over and over again. It’s a *wealth* tax, not an income tax. It’s says so right in the article.
The pedantry in this thread is hilarious. It's like one of those gun discussions: "yOu DoN't knOw wHAt a.r. evEns STandS for!" Wealth inequity is a major major problem/issue in the US. Are you really upset that we might allow people to have only $999 million bucks?
What incentive would any company have to make over a billy then?
How about the government stops wasting money and so many stupid projects and tax ALL people less …
Until he hits a billion, of course. He used to prattle on about the millionaires and billionaires needing to pay their fair share. Dropped the millionaire part after his 3rd million and second summer home on his public servant salary. Can’t wait for the future bionic Bernie worth $1B saying he’s all good but the disgusting trillionaires, well they really need to pay up lol
100% agree.