Why The Rich Pay Lower Taxes
Video Overview & Insights
In which Hank takes on some fascinatingly boring stuff about the U.S. tax code, what sorts of incomes there are, how tax brackets work, and why rich people pay a substantially lower tax rate than most people in America.
You are right there should be a flat tax of 10% with no right offs at all that goes to discretionary spending. Then there should be another 10% flat tax for Medicare and Medicaid with no tax right offs. Everyone pays a flat 20%
And then he makes some value judgements and expresses some opinions which are not necessarily the opinions of his brother, and are obviously the opinions of a guy who is not an economist. But really? It just doesn't seem fair.
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The answer is because the rich have made the best investment decisions of their lives, by funding the campaign of a politician, the rich get crafty loopholes and legal tax evasion tools given to them, thereby increasing their net worth annually. Hey, if I were born rich or recently made millions or even billions, I would likely do the same thing by legally bribing a cheap politician. Politicians are the new whores!
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tax the rich
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Couple things first you missed "round one of taxation" to get capital to get gains from said capital. You have to have income and whether its inherited or not at some point someone sat down worked hard got good job saved up and began investing. It was income it was taxed then yes taxed again when investment paid then reinvest and its taxed again and again. Also on top of all this those "evil tax dodging rich" lets say you buy property 100k and build it the 100k in building material ect sales taxes 10kyou pay employees building it which most people don't know realize as they don't see it there is payroll taxes ect about 30% then you about 100k in labor so they pay 30k in payroll taxes then its time to sell and lets say 400k paid 340k for everything so profit/income is 60k whoot not bad but wait it now goes to corporation pays 20% so 12k but hey 48k were sitting pretty yay but then you have capital gains like 20% now biden I thinks pushing for 40% but lets say 20%. Thats 9600 leaving 38k so in this adventure government was paid almost 62k while investor was paid 38k and government ultimately taking 62% of profit.
Now here is statement that you made that was most asinine there is no evidence its affects investment. The proof and cause are elementary level economics. People only invest in stuff they think they can turn profit on and they prioritize investment by profitability. So same investor thats happy with 38k for risking 340k for a year is happy. BUT lets say we crank that capital gains to 40% leaving 29k.Thats 12%vs 8% return in investment world thats huge. Possibly enough to go to big a risk to much work not enough money or simply invest in something with better return like house in another country.
As for evil stock market its apparent there are plenty of good companys with good brands look no further than inn and out for what failing to get investors will do. Their simple burger menu allows for quicker ordering quicker preparation with lower margin of error as well as easier inventory less loss to errors inventory. And people in areas that have in and out have crazy loyal customer base.
So why with objectively best in store business model with better product created same year only make few hundred locations when mcdonalds has 10s of thousands. Its simple investment first in and out never went public mcdonalds used going public to rapidly expand and develop brand recognition. This in turn allowed them to sell franchises to gain even more investment and expand even more. Which enabled them to create own supply chains and they become the one that went big. The story true in so many cases in many industrys there was other streaming companys than the big ones like netflix other phone companys that either went under got bought out ect when they got entirely eclipsed. Good companys good models product ect difference was people tried to stay privately owned tried keeping everything in house. And in end others that went public used investors had the capital to expand develop product further ect.
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As someone from the UK all I learned from this video is that American tax rates are way too low.
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Why don't you take advantage of the tax benefits? It seems like any one can do it (if you know what you're doing). I'd say do what ever you can to get the most out of it.
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that was a lot of words, but i did understand everything.
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Nerdfighteria
This is correct to a degree. What's missed is most rich people don't pay personal income taxes at all because they don't make any personal income. They use corporations to make money and they own part or all of the businesses. They don't have a paycheck like a worker does. The business pays taxes AFTER expenses unlike individuals as well, and the owner isn't taxed at all if they don't take any distributions out of the business. They just keep everything inside the business(es) and they expense everything allowed to the business. Most business owners and their companies have expensive tax attorneys and accountants that ensure they keep as much of their businesses' gains intact and defer tax payment for as long as possible, which is how they can seemingly pay little or no taxes "as an individual". That doesn't mean the businesses they own don't pay taxes. They just don't personally pay taxes because they don't have a job in the same sense. They only pay personal tax on distributions from the business IF and when they take a distribution, and they certainly aren't ever required to.
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You don't understand Capital Gains Tax.
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Go Bernie
A Bunny
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Because they create jobs.
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"Kiva is a non-profit that expands access to capital for entrepreneurs around the world. "
"Here's what you need to qualify"
"You must be living in the U.S.
"
I don't understand.
I mean I'm not desperate for a loan right now but I do have a new startup business so thought I'd keep it in mind.. guess not though
More User Perspectives
You seem to be laboring under the illusion define "good policy" the same as you. To them, because they're rich, good policy is whatever makes them richer lol
@darrishawks6033I got lost waiting to hear why rich pay less on tax while watching this video.
@sarojbhattarai9067I was all on this ‘get the rich to pay their fair share’ bandwagon until I looked at the numbers. The top 20% pay 67% of all taxes, while the bottom half of taxpayers pay zero taxes. As much as you hate the rich, they are the victims here.
@TheLittleColumbusthey buy politicians instead. it is more cost effective for them
@johnlarson111So who pays the most tax in total.....oh the rich.
I work harder to make more $ , i make more $ to have it taken from me by the government.
Im punished for it essentially and am told if i dont pay my "fair share" im immoral while threatening to put me in a cage if i dont pay.
Im working class as it gets but if my friend "Susan" works hard, saves $, and makes better life choices (not drinking,drugs partying or having kids really young like i did) its immoral for me to expect she owes me something and use the government to take it by force - i should use her as inspiration and not contempt!!
Is this Hank?
@nikyabodigitalSo investment taxe is different from income taxes got it
@elijahjohnson1952Income tax in any form is theft. Let’s just take money that hard working people make and give it to the government... sound fun to you?
@i_critique_your_vanity7216i dont fucking care. they can pay more cos they get more money than us.
@tinajaneoxnam.8866You are completely wrong. Not in a subject of way but it would be pretty stupid to say the top 10% paying 75% of all taxes is not nearly enough. I don’t even think the bottom 50% pays any taxes or any federal taxes that is. That’s why poor people never get tax breaks or cuts I should say because they don’t pay any taxes
@jessejive117Even if he only pays .000001% of the top 10% of earners still pay 75% of all taxes in America. So I matter how low they get the number that’s the percent they paid when everything said and done. Of the money that is received the top 10% pay 75% of all taxes. So what percent sure of the top 10% make wishes a household income of about 150,000 a year. Which is like two pretty normal jobs if you go to school. Like two nurses maybe. Should they be paying 95% of all taxes? And the bottom 90% should only be paying five or 10%?
@jessejive117Taxation is theft
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@ArwalTagBecause the Government need to make sure that the richer people stay in their country, so the government choose to tax them less?
@chloeshum7667If a government was smart, the only tax rate it would be concerned with, would be which rate brings in maximum tax revenue from the particular thing being taxed. How much one group pays compared to another wouldn't even enter the equation. Increasing the tax rate on anything discourages spending/investment on that particular thing, (The main selling point people use when trying to justify increasing the taxes on cigarettes.) so it doesn't necessarily increase tax revenue. The "tax the rich" mantra is one of the worst things anyone ever came up with. Why? Simply because the rich can afford it, so they don't revolt. If the poor and middle class paid the majority of taxes in this country, they would complain about them and oppose every tax hike that came down the pike. Government spending would be a fraction of what it currently is, and everyone would be paying less in taxes than they are right now.
@fixyourself9163Actually you're sadly mistaken because the invested money does serve a useful purpose and what you said only applies to hedges and collectables based investments such as buying one of a kind toys and artwork. The other types of capital investments are stocks which are when you buy part of company in exchange for a proportional share of the profits,bonds which are where you lend money as a loan usually to a startup or expanding business,and finally hedge funds which is basically a betting system for stocks and commodities and notable for helping to sometimes fuel market crashes. Loans go to startups,and businesses that need money to grow,while stocks are as said and more general purpose. As for hedge funds well then you're right because that's where a lot of rich people go to bet on stocks.
@theeneiemperialgovernment2283Maybe lower taxes for high risk investment, like SpaceX.
@TJtheHumanI think we should all pay equal taxes: that is, zero
@williamofdallasOne reason for it is that billionaires want to keep as much of their money as possible, so if country A has a 20% taxrate and country B has a 15% taxrate then all the billionaires would go to country B which means that country A loses out on 100% of their money.
@austinshearmen9210I completely disagree.
If you want to make money, save your money and invest it. Every dollar you have in stock accounts and assets is a little employee that can make more money for you,
the problem is the middle class mentality.
If you give someone who is financially struggling some money, they think "I just made some unexpected money, so I guess ill buy some stuff". Giving people more money won't fix their financial problems, they'll just spend it on stupid shit.
The middle class lives on credit cards, which provide no cushion for when the economy collapses, and makes them get into debt.
wealthy people save every dollar, and live off the money that their assets provide for them.
Its not that its unfair, the middle and lower class is just financially illiterate
dam slow down
@toyaflaxYou know what's bad ethics? Taking more of my money because I became wealthy employing people and providing value.
@justinellsworth9383"Tax break"
A misnomer for someone that has OVERPAID taxes for years, and finally gets to pay less, but still MORE than other people pay. Im poor myself, but sick of the lies. Tired of rich democrats stealing money to hand out so they can get elected. They use these fake terms like 'tax cuts" to make people angry. They know they are misleading in their terms.
And this is why I don't vote...no matter which bullshitting politician you elect, the same trend continues...the rich get richer and the poor get poorer. Like George Carlin once said, "the rich pay no taxes and get all of the money....the middle class pays all of the taxes and does all of the work...and the poor exist so that the middle classes have no other choice but to be scared shitless and be forced to do their menial jobs".
@vocaloidsrock6987Yet the "rich" make up 80% of the governments tax revenue. Weird how that works right?
@caddydonstans116Capitol gains tax should be zero
@georgemcfly3482White liberals are losers
@georgemcfly3482Capital gain taxes are lowered because average person purchases stocks and real estate with already tax income (earned income). The lower rate only applies to long term assets held for a year or more.
@cyofishI find that percentage claim hard to believe. It's like the wool is being pulled over my eyes. It sounds like Hank is saying that if you make $500,000 a year and your tax bracket is 35%, that the first $17,000 is taxed at 10% so to me it sounds like you take however many tax percentages and add them up to the point where you reach your income bracket, but taxes don't divide your income on how much you'll pay. The percentage is every time you earn a paycheck. If I gross $1,000,000 every month and my tax bracket is 35%, I expect my net income will be $650,000, not 35% on top of however many percentages below it there areand whatever number tax percentages they were to begin with.
@CenobiteBeldarThank you! Not one person at my work knew how tax brackets work.
Also, why is the comment that the asks for a flat tax high up on your comments? Fixing the capital gains loophole and ensuring a more progressive tax rate with tax brackets that focus on the top .1% are what we need. I thought that your viewers were smart...
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@qwertyuoip1234See, when you add tax to investors, they don't buy as many shares as they could with a lower tax. So not only would the government make more money with a lower capital gains tax, but the economy would grow and more jobs would be created. Food for thought eh
@matthewbarrett8972Your comments on capital gains is completely wrong and tainted with an extreme liberal bias. How does one get money to invest??? THEY EARNED IT THROUGH WORKING, hence that net income was ALREADY TAXED in earlier years in your pretty progressive tax model. That investment money then gets taxed AGAIN after a long period of time and the investor sells the investment. FRIGGIN LIBERALS DONT UNDERSTAND SIMPLE ECONOMICS!!!!!!!!!!
@lucid5411You forgot passive income, the best kind because it is taxed the least.
Is this fair?
Consider the fact that people who are entrepreneurs create jobs (business owners) and provide affordable housing (real estate). This is beneficial to the economy and helps raise the standard of living in America. The more incentives for entrepreneurs, the more they end up helping the economy by doing what they do which helps us all.