There is so much about this story that bothers me.
First, the leak of private tax documents (most likely from an IRS employee) is reprehensible. I know many will defend it on the basis that it is just the mega rich, so who cares? A couple of points on that, even the mega rich have rights, and two, it is just the mega rich, now. Pro Publica got more than just the records they’ve analyzed and written about so far. They may well have my records, or yours. This was not whistle blowing, there seems to be no information that these individuals were audited and due to campaign contributions (for instance) got away with tax fraud. No, this was just a case of, these people have too much money, and I have a problem with that. Hopefully, and I say this rarely, the FBI will be investigating shortly.
I found this story on Twitter, which if you recall, near the end of the most recent Presidential election blocked the story about Hunter Biden’s laptop, and the NY Post, for sharing information gotten illegally. I don’t care about the merits of either leak, and Twitter is allowed to ban whatever stories they wish for whatever reason, but the inconsistency doesn’t look good.
I’m also bothered by the fact that Pro Publica doesn’t seem to understand the difference between wealth gain (which is not taxed), and income (which is). The screenshot of the twit I saw took four of the highest wealth individuals and calculated their “True Tax Rate” (wealth growth/taxes paid) and came up with this:
Rich Guy Wealth Growth Reported Income Total Taxes TTR
WB $24,300,000,000 $125,000,000 $23,700,000 0.10%
JB $99,000,000,000 $4,220,000,000 $973,000,000 0.98%
MB $22,500,000,000 $10,000,000,000 $292,000,000 1.3%
EM $13,900,000,000 $1,520,000,000 $455,000,000 3.27%
Wealth growth is unrealized value of investments (it does not include, as some seem to think, interest on accounts, or dividends paid out on investments which are taxed as income). So, if you bought a share of stock for $1, and at the end of the year it was selling for $2, you would have wealth growth of $1. If you sell that share, you will pay a capital gains tax of anywhere between nothing and 20% (depending on your income). If you don’t sell the share, you wouldn’t pay any tax on that wealth growth. Who cares? You may well ask. These guys are rich as fuck, so taxing them on stock prices rising isn’t going to hurt them very much. That may well be true, but that rule doesn’t only affect the rich as fuck folk. It affects you too. If your house has risen in value, you don’t have any extra money. If your pension rises in value, you have the ability to have more money, but you don’t until you actually cash in (which is when you’ll get taxed).
So, running actual numbers, I came up with a True Tax Rate that was a little bit different:
Warren Buffett 18.96%
Jeff Bezos 23.06%
Michael Bloomberg 2.92%
Elon Musk 29.93%
The Mike Bloomberg numbers jumped out at me, but that may be due to his run for the Democratic Presidential nomination, which was self-funded, and probably a huge tax write off.
This leads me to my bigger, more overarching problem with this story, and others like them. We can look at the 18.96% of income that Warren Buffett pays and decide that that is way too low. Or the 29.93% that Elon Musk pays is too low. That is a worthy discussion. What we should not do is make shit up and decide that the made-up shit is worthy of discussion. Even here, they could have tried to make the point that after a certain level of income (or wealth) we should tax wealth gain as income. That would have required a little bit more math on their part, but they could have showed what these folks were paying on income, and what they would have paid under a system that they were trying to devise. I still would probably have had some issue with their story, but we could have been discussing it on the same terms.
I use this story because it has numbers, which they posted, and I like math. But it is not the only area where we are discussing our perceived reality, or our preferred reality, instead of reality. There is a movement afoot amongst many “conservative” people to ban the teaching of Critical Race Theory. Having read some of the bills, and defenses of those bills, I wonder how many of those sponsors have any actual idea of what Critical Race Theory actually is. It seems more, that they’ve read articles (if that) or listened to podcasts about CRT from opponents, and that is what they are afraid of. Forget the banning of ideas (which is a whole other issue), they are trying to ban the teaching of ideas that they don’t even understand. I heard from someone (I can’t remember who or I’d give credit) that you should always learn about a theory from proponents of that theory. Once you’ve done that, then you can seek out the criticisms.
Gun control. By all means, let’s discuss gun control, and what the second amendment means, and can we ban certain types of firearms. But if congress is going to pass an “assault weapons” ban, the definition of “assault weapon” should be clear (and make sense but that’s another book).
We spend so much time arguing and fighting over ideas, but we’re not being honest about the ideas. We have all become great at knocking down straw men, but how many times have you listened to a discussion of an issue you’re passionate about and say to yourself “that’s not what I believe”? I always want to engage in discussion. I want you to explain to me when I’m wrong. I’d love for you to listen to me try to explain to you when I think you’re wrong. But the only way that can happen is if we report out the actual ideas we are debating. Don’t look for the weakest argument to debunk, look for the strongest. If my ideas can’t stand up to the strongest of challenges, then they’re not very good ideas. I want your best argument. I know in many fora I come across as “trollish” or playing devils advocate (and sometimes I do), but usually I am trying to understand the arguments you are making, and I test your ideas by trying to poke holes in your argument. I hope for the same from you. As I said to a friend, “I know that I am often wrong, I just don’t know when.”
Let’s do better, America!
Talking with the voices in my head. 