If you don’t follow Prof Galloway, you should.  I was first introduced when someone sent me his post on WeWork.  Instead of being limited to 1300 characters, he had a time (that blog is here). He’s tech, witty, and very good.

However, I have to call negative attention to a tweet he sent yday identifying a study that said in 2018 “billionaires paid a lower tax rate than the working class.”  Ok. We are about to have some fun with math.

1. The economists use the tax returns of the top 400 (article here).

2.  We know the majority of their income isn’t from their 9-5 job.

3.  For billionaires, they rely on investments to make their money. Which means they buy shares of companies and if they are right and hold for 365 days, the tax rate is lower than most income rates.

An example.  I buy XYZ oil company because I think they will double and I put $100,000 in them.  By Dec 29, 2020 they do (SMOG, baby). I make $100,000. My tax rate as LT gains is 23.8%. If I don’t have a day job, my tax % is lower than families making $165,000+. But- that’s misleading.  I pay $23.8k in tax on the gain.

In 2017, the US median income was $59k which pays a 12% tax rate ($7k).

Who paid more?

You want to debate?  Cool.  Don’t mess with math, talk law.

#hottakeoftheday