Roughly 30% are self made. The rest are old money or had some other substantial head start. See page 5.
https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/20... (2022 Bank of America Private Bank Study of Wealthy Americans: The impact of shifting generational attitudes amid an historic wealth transfer) [Only 27% of the ultra wealthy are self made; 70% of Americans who hold more than $3 million are over 56 years old.]
Weird survey. Say you've got two middle class kids. Both have their parents pay for college. Both get business degrees. Both work hard and save. Both save 2 million dollars in preparation for retirement. One of them gets a 300K inheritance at 60 years old, and, just like magic, he is no longer self-made? It's amazing what you can find in a survey so long as you design the survey with that outcome in mind!
> The wealthiest 10% of Americans own a record 89% of all U.S. stocks
Can't help but suspect the people who both tried to avoid contributing to society, and did a bad enough job at it to get easily caught, probably aren't the most valuable contributors.
"I have a not super desirable 2BR house about two hours outside a metro, which is now worth $600k, plus a 401k worth $300k, and another $100k saved up. Can I retire?"
(No.)
...
In fact, since we're talking about a thousand millionaires, I need to point out: You know what that equals?
There are a lot more than 1600 “millionaires” in the sense you’re describing. Moreover, people who just have a expensive house and some 401k savings won’t have 250k or more of back taxes owed.
It’s likely a more accurate term for the 1600 targeted by this auditing would be multi-millionaires.
Yeah, this is the proper emphasis. If people owe $250k in back taxes -- which is a lot -- then by all means they need to pay then. That's only right.
But, this should be framed less as "going after millionaires", and more as "going after people who owe a lot of back taxes".
So, I'm reacting less to the actual action by the government (which seems fair), and more to the title. "Millionaire" meant one thing when "Monopoly" was released; it means something else today.
If my character wanted to retire, I think they'd need to sell the house and move to a low-cost country. Maybe it could work in the US if they're old enough to qualify for social security.
Assuming the house is paid off keep it and live off your $400k. That should last for a very long time. You won't be paying income taxes, can probably get free health care. Wouldn't be hard at all.
$300k in 401k alone puts you in the upper class of Americans. In 2020, median household (note, not individual) net worth in the United States was $121,411. This includes home equity.
$1,000,000 in assets is the 88th percentile, far above "middle class." I'm privileged to do very well for myself, I'm an expert in a very well paying field (far more than my siblings even though they have masters and doctorates), and I do not know any millionaires.
These numbers also become significantly worse when filtered to anyone born after 1980.
This is fascinating to me, because my experience is almost the opposite: nearly everyone I know is a millionaire.
And before you go "well obviously, rich guy", allow me to explain.
I did not grow up with any great amount of privilege. My parents were both teachers. We did not (and I do not) have any of the kinds of connections that the truly rich and powerful do. I went to state school, where all my friends were ordinary middle-class people. It's not like I've ever rubbed elbows with the elite at private school or an exclusive club.
10 years ago my net worth was < $10k, and the same could (to the best of my knowledge) have been said about my entire social circle.
I'm now in my mid-30s and closing in on my second million. I just went through my text threads, and of the people I interact with regularly (outside of family), there's only one that's not in the club.
This is kinda surprising to me; it's not like it's on purpose.
One is a close college friend who (like myself) has worked their way up from nothing and has had a very successful career in (non-tech) business. Another college friend married well. Another 5 are former colleagues who got a big payday in The Acquisition (plus several more that I don't regularly keep up with). 4 out of 5 at the current small-team $DAYJOB got their big payday from a different exit. I don't know exactly where my neighbors stand, but... well, we all own $1mm condos.
So I find myself living in a little bubble and I'm not even quite sure how I got here, and it's all the more strange to me that I fit right in.
I'm definitely very lucky to have found my own success, but it's straight up weird to me that the most important people in my life over the years--most of whom have similarly unprivileged backgrounds--have all ended up in a similar place. Do I just have a spidey sense for and stick around people who will be successful? Or has The Matrix simply run out of ideas?
Anyway, the point in all of this is to say that your mileage will very much vary, and "millionaire"--while still objectively very well-off--isn't quite what it used to be.
Exactly, this is my point. That lifestyle enjoyed by teachers and firefighters now corresponds to wealth levels over $1M. "Millionaire" isn't a guy with a monocle. Indeed, if you fail to acquire at least $1M in today's America, you're either (a) living pretty badly, or possibly (b) hiding out in some socioeconomic bubble that's disconnected (protected?) from the primary money flows (e.g. some small town in Mississippi).
The whole thing was in quotes -- a line of dialogue from a sort of plausible character, who I imagined calling in to Susie Orman or something. But yeah, the idea was that they did own the property outright.
It's interesting to know that if you have a bit of reasonably arable land, then you can do that. Those are pretty low expenses.
Speaking as your typical highly experienced W-2 40+-hour-a-week tech worker who eats the full brunt of the Federal income tax every year without trying to play any games, being it on. Make 'em pay, just like I do.
> He said 1,600 millionaires who owe at least $250,000 each in back taxes and 75 large business partnerships that have assets of roughly $10 billion on average are targeted for the new “compliance efforts.”
I pay all of my taxes due, and I expect these deadbeats to do so also.
Well, that's certainly what they mean when the government talks about 'the rich' as a pejorative. You only need to look at SS tax limits, phase outs for tax-advantaged savings plans, and income exclusions for subsidies like the recent energy efficiency one to realize any household making over around $150K is considered rich.
Of course, this makes sense. The vast majority of the tax revenue comes from the upper-middle/upper class. There just aren't enough of the upper-upper class (1%) to pay the bills. I'd wager almost everyone on HN in the US falls squarely in the range considered to be the group that needs to be squeezed.
Exactly who are these "millionaires"? If they are the normal w2 types or 1099 that pays 25% tax every quarter, exactly what will come of this? They have no mechanism to dodge taxes like corporations other than a silly real estate deduction that trump ended.
We don't have a revenue problem but the issue is companies not dodging taxes owed persay but creating an llc in a tax haven and selling a "contract" to a us corporation that coincedentally costs the same as the profit of the us branch resulting in no taxable revenue. This would need legal fixes and co-operation between the countries involved.
But go ahead, tax a doctor/lawyer/sr engineer making $400,001.00 dollars at. 50% rate like canada and the like.
A progressive tax rate would only tax 1 dollar at 50%.
I say this because you saying $400,001 makes me think you believe that all your income will be taxed at the highest bracket once you just barely cross into it. It's a common misunderstanding, but that's not how progressive taxes work. I'm also assuming that $400,000 is the tax bracket threshold, since that is what some politicians have proposed, and I think that's what you were alluding to.
> effective tax rate for a doctor earning $400,000 in Quebec canada
> Based on the 2023 tax brackets you provided, the effective tax rate for a doctor earning $400,000 in Quebec would be approximately 45.03%. This assumes no other deductions, credits, or tax strategies are applied.
It makes me think that because that's what the ultimate end goal the progressives are planning here in the usa.
tbh if that ever ends up being my effective tax rate (ie total taxes paid divided by total income), i would literally stop working out of pure principle.
How can you possibly claim that "nobody quit working during the 50s-86 out of principle"? Lots of people retired early during that time (like any other time) and you don't know what all of their motives were.
Let's revise the claim, since you want to be pedantic: "Very few people, if any, quit working during the 50s-86 in protest of the high marginal tax rate".
So people didn't "quit working" but people earning over 200K (~2MM today) did start looking at ways to avoid having to pay those taxes and the net effect was that the effective tax rate for them was in the mid 40% range (a few points higher than today but by no means much higher).
For what it's worth, when the marginal rate becomes very high, things like more time off (e.g. unpaid leave/sabbatical) or part-time work become more attractive instead of more compensation. If you can negotiate a 20% pay cut to drop to a 4 day week, but you were in the 50% marginal bracket, you get a 10% cut in take-home for a 20% cut in hours worked. Good deal, especially when you already have more than you need. And in this case it's the marginal rate that matters, not the effective rate.
Similarly, it's the marginal rate that matters for decisions like whether to work hard and take on a ton of responsibility to get to principle level, or just hit senior and coast.
Or the US could roll back the defense budget 50% ($350 thousand million), and still be quite well-'protected' or 'secure'. (Perhaps less able to de-stabilize existing regimes in our favor.)
Yeah not really. We spend the average amount of gdp on defense as other countries. The issue is that other countries aren't paying for the protection they get from the us military. I believe canada's defense budget is 35B.
> THE UNITED STATES SPENDS MORE ON DEFENSE THAN THE NEXT 10 COUNTRIES COMBINED
because the us economy is greater than the next 10 countries combined.
> Using GDP in the denominator doesn’t really make sense
Why not when this is exactly the requirement nato has for its allaince (2% target).
Agreed on the per capita basis tho. We spend more per capita relative to european/scandanavia on alot of things (per student in school, yearly healthcare costs per person etc) but get "worse" outcomes in a capatalist market than they get in a "democratic socialist" market.
> because the us economy is greater than the next 10 countries combined
It’s actually not. It’s ~1.4x the size of China’s and ~4x the size of Japan’s and Germany’s as of 2022. Considering the next 10 countries combined it’s nowhere close.
But not the billionaires and not their subsumption of the electoral process, government, and, by extension, the IRS with selective, gamified exemptions and complicated tax rules... it's bullshit complexity and obsfucation like Enron.
Small business owners get audited and barely millionaires in the middle-class get audited. Centimillionaires and billionaires don't.
74 comments
[ 3.1 ms ] story [ 220 ms ] threadNah they can't compete with the domestic shit funded by our own rich assholes. Foreign meddling is basically a drop in the bucket of PAC spending.
https://ustrustaem.fs.ml.com/content/dam/ust/articles/pdf/20... (2022 Bank of America Private Bank Study of Wealthy Americans: The impact of shifting generational attitudes amid an historic wealth transfer) [Only 27% of the ultra wealthy are self made; 70% of Americans who hold more than $3 million are over 56 years old.]
https://www.cnbc.com/2021/10/18/the-wealthiest-10percent-of-... (The wealthiest 10% of Americans own a record 89% of all U.S. stocks)
Weird survey. Say you've got two middle class kids. Both have their parents pay for college. Both get business degrees. Both work hard and save. Both save 2 million dollars in preparation for retirement. One of them gets a 300K inheritance at 60 years old, and, just like magic, he is no longer self-made? It's amazing what you can find in a survey so long as you design the survey with that outcome in mind!
> The wealthiest 10% of Americans own a record 89% of all U.S. stocks
Owning equity in a company isn't rent-seeking.
The median CEO wage is under $1 million.
The article says they are only able to do this now through AI, and I don’t understand why.
This is definitely worth watching.
"I have a not super desirable 2BR house about two hours outside a metro, which is now worth $600k, plus a 401k worth $300k, and another $100k saved up. Can I retire?"
(No.)
...
In fact, since we're talking about a thousand millionaires, I need to point out: You know what that equals?
One billionaire.
It’s likely a more accurate term for the 1600 targeted by this auditing would be multi-millionaires.
But, this should be framed less as "going after millionaires", and more as "going after people who owe a lot of back taxes".
So, I'm reacting less to the actual action by the government (which seems fair), and more to the title. "Millionaire" meant one thing when "Monopoly" was released; it means something else today.
$1,000,000 in assets is the 88th percentile, far above "middle class." I'm privileged to do very well for myself, I'm an expert in a very well paying field (far more than my siblings even though they have masters and doctorates), and I do not know any millionaires.
These numbers also become significantly worse when filtered to anyone born after 1980.
I’m interested in these numbers can you expand? Thank you.
And before you go "well obviously, rich guy", allow me to explain.
I did not grow up with any great amount of privilege. My parents were both teachers. We did not (and I do not) have any of the kinds of connections that the truly rich and powerful do. I went to state school, where all my friends were ordinary middle-class people. It's not like I've ever rubbed elbows with the elite at private school or an exclusive club.
10 years ago my net worth was < $10k, and the same could (to the best of my knowledge) have been said about my entire social circle.
I'm now in my mid-30s and closing in on my second million. I just went through my text threads, and of the people I interact with regularly (outside of family), there's only one that's not in the club.
This is kinda surprising to me; it's not like it's on purpose.
One is a close college friend who (like myself) has worked their way up from nothing and has had a very successful career in (non-tech) business. Another college friend married well. Another 5 are former colleagues who got a big payday in The Acquisition (plus several more that I don't regularly keep up with). 4 out of 5 at the current small-team $DAYJOB got their big payday from a different exit. I don't know exactly where my neighbors stand, but... well, we all own $1mm condos.
So I find myself living in a little bubble and I'm not even quite sure how I got here, and it's all the more strange to me that I fit right in.
I'm definitely very lucky to have found my own success, but it's straight up weird to me that the most important people in my life over the years--most of whom have similarly unprivileged backgrounds--have all ended up in a similar place. Do I just have a spidey sense for and stick around people who will be successful? Or has The Matrix simply run out of ideas?
Anyway, the point in all of this is to say that your mileage will very much vary, and "millionaire"--while still objectively very well-off--isn't quite what it used to be.
Which is besides the point anyhow. They need to pay their fair share like everyone else.
It's interesting to know that if you have a bit of reasonably arable land, then you can do that. Those are pretty low expenses.
So when they say this they mean you, the 'technically millionaire' category who is not going to fight back with laywers.
I pay all of my taxes due, and I expect these deadbeats to do so also.
But it's getting back income that is due. If you owe $250,000 back to the public, then maybe you should pay it
The percentage of people with all their income appearing in a W2 or 1099 is fairly small.
I'm not technically a millionaire, since I'm not a millionaire at all. Pay up.
The extra revenue from 1600 people is hilariously small compared to their total.
Of course, this makes sense. The vast majority of the tax revenue comes from the upper-middle/upper class. There just aren't enough of the upper-upper class (1%) to pay the bills. I'd wager almost everyone on HN in the US falls squarely in the range considered to be the group that needs to be squeezed.
We don't have a revenue problem but the issue is companies not dodging taxes owed persay but creating an llc in a tax haven and selling a "contract" to a us corporation that coincedentally costs the same as the profit of the us branch resulting in no taxable revenue. This would need legal fixes and co-operation between the countries involved.
But go ahead, tax a doctor/lawyer/sr engineer making $400,001.00 dollars at. 50% rate like canada and the like.
I say this because you saying $400,001 makes me think you believe that all your income will be taxed at the highest bracket once you just barely cross into it. It's a common misunderstanding, but that's not how progressive taxes work. I'm also assuming that $400,000 is the tax bracket threshold, since that is what some politicians have proposed, and I think that's what you were alluding to.
> Based on the 2023 tax brackets you provided, the effective tax rate for a doctor earning $400,000 in Quebec would be approximately 45.03%. This assumes no other deductions, credits, or tax strategies are applied.
It makes me think that because that's what the ultimate end goal the progressives are planning here in the usa.
tbh if that ever ends up being my effective tax rate (ie total taxes paid divided by total income), i would literally stop working out of pure principle.
So people didn't "quit working" but people earning over 200K (~2MM today) did start looking at ways to avoid having to pay those taxes and the net effect was that the effective tax rate for them was in the mid 40% range (a few points higher than today but by no means much higher).
Similarly, it's the marginal rate that matters for decisions like whether to work hard and take on a ton of responsibility to get to principle level, or just hit senior and coast.
If they do that for 900 years then they will pay for last year’s deficit.
Our financial problems aren’t solved by “taxing the rich.”
Of course, $1.6B is nothing to sneeze at. It should just be part of an overall sustainability plan.
The 1% have gained $42 trillion since 2020. If they were taxed at capital gains on that it would be $2.8 T per year.
So your proposed alternative is to let the rich get away with not paying their taxes, and taxing the poor instead?
The financial problem can only be solved by taxing the middle class and cutting costs.
Of course you can tax the rich, that helps but is not sufficient.
Taxing the poor isn’t very effective because they are poor and don’t have much to tax.
https://www.pgpf.org/blog/2023/04/the-united-states-spends-m...
because the us economy is greater than the next 10 countries combined.
> Using GDP in the denominator doesn’t really make sense
Why not when this is exactly the requirement nato has for its allaince (2% target).
Agreed on the per capita basis tho. We spend more per capita relative to european/scandanavia on alot of things (per student in school, yearly healthcare costs per person etc) but get "worse" outcomes in a capatalist market than they get in a "democratic socialist" market.
It’s actually not. It’s ~1.4x the size of China’s and ~4x the size of Japan’s and Germany’s as of 2022. Considering the next 10 countries combined it’s nowhere close.
Not according to the world bank:
1 United States $25.5 trillion 2 China $18.00 trillion 3 Japan $4.2 trillion 4 Germany $4.1 trillion
Total of 2-4: $26.3 trillion
https://datahelpdesk.worldbank.org/knowledgebase/articles/90...
The total of the top 10 is about $40 trillion, about 50% more than the US.
Small business owners get audited and barely millionaires in the middle-class get audited. Centimillionaires and billionaires don't.