To someone making $30K, $40K, $50K? Rich is $300K, $400K, $500K.
To someone who is legit rich? Multi-millions to billions rich? There’s no daylight between $500K and 50K. We’re all “the help” as far as they’re concerned.
And, yeah, their wealth allows them to operate on a different level the rest of us just can’t comprehend.
There are a few good books on the topic that everyone should read:
Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich–and Cheat Everybody Else
There’s a bunch of stuff in those books that I certainly never knew… for example:
"The IRS devised a formula for valuing personal use of corporate jets.
At the end of 2002, the rates for personal use of corporate planes were as low as $0.09/mile for small planes, and no more than $0.83/mile for the biggest jets.
For a personal trip from NY to LA in a luxury corporate jet, the official rates valued the trip at $1,347/person. (Less than the first-class fare of $2,200.)
The executive pays nothing.
Companies count the value of this personal trip as if it were income for the executive, and the executive just pays the income tax on that amount.
So, for an executive in a top tax bracket, the additional tax on that flight was $520.
But if there’s a memo in the corporate files stating that commercial air travel is too dangerous and company-provided transportation is necessary, then it’s only $260 in federal income taxes.
The $260 that the government takes is offset by the value of the tax deduction that the corporation claims on the jet.
The company gets a deduction that saves at least $3,500 in taxes.
That means the minimum subsidy the taxpayers provide to the executive for taking the jet is $3,240, the value of what the company saves in taxes offset by the $260 from the executive.
Diligent shareholders don’t know how much personal use of a corporate jet costs them, as those details aren’t noted in the documents that shareholders see."
Another good one:
"In 1998, Jerry Curnutt was the IRS partnership specialist. While examining a tax return that reported an investment of $10, he discovered a tax dodge.
The partnership’s $1,000 in capital earned almost ½ billion in profits.
The partner who had put up the $10 (Partner A) received 1% of the profits, while the other 99% went to the other partner (Partner B). Partner A was a business that had to pay taxes on its profits. Partner B was a tax-exempt entity.
Here’s how it worked:
The first trick was to report the profits, but assign them to Partner B, avoiding about $160 million of federal income taxes.
The second trick was characterizing this profit as capital due to Partner A, so that no tax would be paid.
Then, the capital was returned in the form of property that could be depreciated, and by writing off a portion of the ½ billion dollar asset each year, the Partner A could reduce its taxes on other profits it earned.
Thus, for $10, Partner A avoided paying $330 million of taxes over a few years.
Ultimately, Curnutt found a small number of partnerships that didn’t report the profit, resulting in billions in taxes that were never paid.
The IRS declined to pursue these entities, because auditing partnerships carried a political risk, such as turning up the names of important campaign contributors."
Yeah, the bit about people not being able to understand is an overly condescending way to phrase it, and is a cop-out. But we also see people at large completely missing the issue by trying to project their own experiences with The System onto the ultra wealthy.
Like, the number of times I’ve seen people astronomical income tax rates to deal with billionaires highlights both a misunderstanding of what income taxes actually tax, and how the economic elite generate their wealth.
No one is out there calling for a tax on unrealized capital gains, for instance. And while some people are lobbying for a wealth tax, the tax rates proposed are very small, which makes reactionaries quick to reject them.
It’s not that we plebs cannot understand, it’s that most of us just straight up do not understand, and choose to ignore that fact.
The average person makes under 100k even in reddits favorite high cost of living tech hubs where their six figures is pretty much makes them equivalent to the people on skidrow. It’s amusing how when they were struggling college students the bar for rich was millionaires. Those who’ve made it rich themselves the bar for rich person moved up to billionaires. So now they have to wax philosophic, “what exactly is ‘rich’?”. You got rich. There being richer people than you doesn’t change that.
Explain the same executive compensation minus tech and people will have their pitchforks out. But it’s tech so which has a different set of standards because it’s the internets darling.
The term is HENRY. High Earner, Not Rich Yet. People making $100-250k are surprised to find themselves still living paycheck to paycheck, struggling to save for retirement or afford things their parents did like take a vacation, improve their homes, or having children.
They’re not struggling to survive, but they aren’t living a life of luxury without going into debt.
You’re not looking at the cost of living. your actual income is usually irrelevant. you could be making $100-250k, it doesn’t matter, if the cost of living (and being able to actually get to your job) is 95% of that income.
For example, my buddy moved to the UK from BA where he was making $8000/mo and living paycheck to paycheck and going into debt. they didn’t tell him they would cut his salary down to $4500/mo until he actually got there. He had a panic attack, until his first set of bills arrived, and he realized he still had some 80% of his paycheck left for himself due to drastically lower cost of living.
Excuse me what? Someone earning that much money is only living paycheck to paycheck because their lifestyle is that expensive. And then it actually is their own fault for buying the 15$ Latte with a 30$ Avocado toast every morning, driving to work in their leased 100k $ car, while their wive drives her own 100k $ car.
because the location where the job is, is expensive. and you can’t commute in that far into the job, without raising the rents in the suburbs and gentrifying them, too. where high paying jobs are, the market realizes they can raise the cost of living.
Yeah, it does happen but because people spend too much on shit they dont need
Edit: I got a 6 figure job. Lived in a cheap shitty basement, rode a bicycle, and took public transportation to work (which was subsidized by the gov). After a few years I quit and had enough to mostly retire
didn’t even talk about the net worth vs income issue. If someone makes $1/yr they’re still considered poor by the State, even if they have a few million $ in the bank.
Part of the problem is defining “rich people”.
To someone making $30K, $40K, $50K? Rich is $300K, $400K, $500K.
To someone who is legit rich? Multi-millions to billions rich? There’s no daylight between $500K and 50K. We’re all “the help” as far as they’re concerned.
And, yeah, their wealth allows them to operate on a different level the rest of us just can’t comprehend.
There are a few good books on the topic that everyone should read:
Perfectly Legal: The Covert Campaign to Rig Our Tax System to Benefit the Super Rich–and Cheat Everybody Else
https://www.penguinrandomhouse.com/books/291700/perfectly-legal-by-david-cay-johnston/
Free Lunch: How the Wealthiest Americans Enrich Themselves at Government Expense (and Stick You with the Bill)
https://www.penguinrandomhouse.com/books/300246/free-lunch-by-david-cay-johnston/9781591842484/
The Fine Print: How Big Companies Use “Plain English” to Rob You Blind
https://www.penguinrandomhouse.com/books/305192/the-fine-print-by-david-cay-johnston/9781591846536/
I don’t know, I can comprehend it just fine.
There’s a bunch of stuff in those books that I certainly never knew… for example:
"The IRS devised a formula for valuing personal use of corporate jets.
At the end of 2002, the rates for personal use of corporate planes were as low as $0.09/mile for small planes, and no more than $0.83/mile for the biggest jets.
For a personal trip from NY to LA in a luxury corporate jet, the official rates valued the trip at $1,347/person. (Less than the first-class fare of $2,200.)
The executive pays nothing.
Companies count the value of this personal trip as if it were income for the executive, and the executive just pays the income tax on that amount.
So, for an executive in a top tax bracket, the additional tax on that flight was $520.
But if there’s a memo in the corporate files stating that commercial air travel is too dangerous and company-provided transportation is necessary, then it’s only $260 in federal income taxes.
The $260 that the government takes is offset by the value of the tax deduction that the corporation claims on the jet.
The company gets a deduction that saves at least $3,500 in taxes.
That means the minimum subsidy the taxpayers provide to the executive for taking the jet is $3,240, the value of what the company saves in taxes offset by the $260 from the executive.
Diligent shareholders don’t know how much personal use of a corporate jet costs them, as those details aren’t noted in the documents that shareholders see."
Another good one:
"In 1998, Jerry Curnutt was the IRS partnership specialist. While examining a tax return that reported an investment of $10, he discovered a tax dodge.
The partnership’s $1,000 in capital earned almost ½ billion in profits.
The partner who had put up the $10 (Partner A) received 1% of the profits, while the other 99% went to the other partner (Partner B). Partner A was a business that had to pay taxes on its profits. Partner B was a tax-exempt entity.
Here’s how it worked:
The first trick was to report the profits, but assign them to Partner B, avoiding about $160 million of federal income taxes.
The second trick was characterizing this profit as capital due to Partner A, so that no tax would be paid.
Then, the capital was returned in the form of property that could be depreciated, and by writing off a portion of the ½ billion dollar asset each year, the Partner A could reduce its taxes on other profits it earned.
Thus, for $10, Partner A avoided paying $330 million of taxes over a few years.
Ultimately, Curnutt found a small number of partnerships that didn’t report the profit, resulting in billions in taxes that were never paid.
The IRS declined to pursue these entities, because auditing partnerships carried a political risk, such as turning up the names of important campaign contributors."
Yeah, the bit about people not being able to understand is an overly condescending way to phrase it, and is a cop-out. But we also see people at large completely missing the issue by trying to project their own experiences with The System onto the ultra wealthy.
Like, the number of times I’ve seen people astronomical income tax rates to deal with billionaires highlights both a misunderstanding of what income taxes actually tax, and how the economic elite generate their wealth.
No one is out there calling for a tax on unrealized capital gains, for instance. And while some people are lobbying for a wealth tax, the tax rates proposed are very small, which makes reactionaries quick to reject them.
It’s not that we plebs cannot understand, it’s that most of us just straight up do not understand, and choose to ignore that fact.
The average person makes under 100k even in reddits favorite high cost of living tech hubs where their six figures is pretty much makes them equivalent to the people on skidrow. It’s amusing how when they were struggling college students the bar for rich was millionaires. Those who’ve made it rich themselves the bar for rich person moved up to billionaires. So now they have to wax philosophic, “what exactly is ‘rich’?”. You got rich. There being richer people than you doesn’t change that.
Explain the same executive compensation minus tech and people will have their pitchforks out. But it’s tech so which has a different set of standards because it’s the internets darling.
The term is HENRY. High Earner, Not Rich Yet. People making $100-250k are surprised to find themselves still living paycheck to paycheck, struggling to save for retirement or afford things their parents did like take a vacation, improve their homes, or having children.
They’re not struggling to survive, but they aren’t living a life of luxury without going into debt.
You’re not looking at the cost of living. your actual income is usually irrelevant. you could be making $100-250k, it doesn’t matter, if the cost of living (and being able to actually get to your job) is 95% of that income.
For example, my buddy moved to the UK from BA where he was making $8000/mo and living paycheck to paycheck and going into debt. they didn’t tell him they would cut his salary down to $4500/mo until he actually got there. He had a panic attack, until his first set of bills arrived, and he realized he still had some 80% of his paycheck left for himself due to drastically lower cost of living.
Excuse me what? Someone earning that much money is only living paycheck to paycheck because their lifestyle is that expensive. And then it actually is their own fault for buying the 15$ Latte with a 30$ Avocado toast every morning, driving to work in their leased 100k $ car, while their wive drives her own 100k $ car.
That is plainly untrue
because the location where the job is, is expensive. and you can’t commute in that far into the job, without raising the rents in the suburbs and gentrifying them, too. where high paying jobs are, the market realizes they can raise the cost of living.
Yeah, it does happen but because people spend too much on shit they dont need
Edit: I got a 6 figure job. Lived in a cheap shitty basement, rode a bicycle, and took public transportation to work (which was subsidized by the gov). After a few years I quit and had enough to mostly retire
didn’t even talk about the net worth vs income issue. If someone makes $1/yr they’re still considered poor by the State, even if they have a few million $ in the bank.