A paper published by the National Bureau of Economic Research concluded that the Billionaires on the Forbes 400 list pay an average income tax of 24% while the rest of us pay 30%.
The findings, from Berkeley economists Emmanuel Saez and Gabriel Zucman, calculated the tax rate by adding the personal taxes paid and the corporate taxes paid by the companies owned by the richest Americans. In other words, it assigned a share of Amazon’s corporate taxes to Amazon founder Jeff Bezos when calculating his total tax burden.
As such, the study is tragically flawed.
Publicly traded companies are C Corps. Why? Because an S Corp can’t have more than 100 owners.
In calculating their numbers, the economists included the 21% tax that all C Corps pay, but they didn’t figure in the double taxation inherent in this taxation structure. Owners of C Corps pay personal income taxes on the same income when they take it out of their companies.
Since the Billionaires don’t actually take that money out of the companies, these economists are figuring their tax burdens completely wrong. If they did remove that cash they’d pay a 37% personal income tax as well as the C Corp tax of 21%.
This would put them at a 58% tax rate if we forget state income taxes altogether.
It turns out that the economists who did the study are also the main proponents of a Wealth Tax. This would be a tax charged on assets that are held rather than sold.
In other words, they want to charge you a tax on the value of your home and stock portfolio before they’re sold and subject to Capitol Gains.
These economists are doing nothing but using funny numbers and bad math to promote an agenda. It’s hard to believe that this has gained national attention in the media.
Let me leave you with this…
In the past month, two condos at the Bloomingdale building on North Michigan Avenue sold for prices from decades ago. One of them went for well below its price from 1990, a full 35 years ago.
They’re the latest examples of the lost value that has affected downtown condo markets for the past five years. During this period, prices in the rest of the city and suburbs have continued to fly.
On Aug. 14th, a condo on the 55th floor of the building, sold for $1.3 million. That’s the same price it went for in 1999. The three-bedroom condo had sold on two other occasions; in 2000 for $1.73 million and in 2003 for $1.5 million.
Ten years ago, the average selling time for a downtown condo was less than a month. And most of the time, sellers received their asking price or better.
The problem is that there isn’t any demand in this market. With an incomplete recovery from the COVID-19 pandemic and crime in general, agents are having problems finding buyers.
My, how things have changed in the last decade.
We’re all going to get through this. Let’s get through it together.
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Sincerely yours,
Chris Amundson
President
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