Taxes:
* An Unbiased AI Analysis of the Tax System *
The issue isn't necessarily the tax rates themselves, but rather how different types of income are taxed.
This is where the system truly becomes unfair.
Billionaires benefit from tax strategies that significantly reduce their effective tax burden compared to what ordinary wage earners face.
In practice, this means the following: As soon as I receive my salary, taxes are immediately deducted at the appropriate percentage.
However, when a billionaire's stock portfolio increases in value by millions, they pay no taxes on this growth until they sell those shares.
Billionaires borrow money against their stock holdings, which isn't taxed, live off these loans, and then, after they die, pass their assets to heirs, largely tax-free.
Meanwhile, ordinary people like me cannot defer taxes on our paychecks or borrow against our retirement accounts without significant penalties.
The wealth of the 25 richest billionaires grew by $401 billion between 2014 and 2018, yet they paid only $13.6 billion in income tax—an effective wealth growth rate of 3.4%.
It's this 3.4% figure that truly struck me.
While they meet their legal tax obligations on realized income, their actual wealth grows at a rate that is taxed far less than what middle-class workers pay on their salaries.
ChatGPT analyzed what would happen if billionaires paid taxes at the same rate as middle-class families—around 15-22%.
According to ProPublica data, if these 25 richest billionaires paid a 20% tax on their wealth growth, they would have paid approximately $80 billion instead of $13.6 billion.
Now, multiply that figure by the actual number of wealthy individuals...
What was most eye-opening to me was learning that the problem isn't necessarily that billionaires are breaking the law or even paying lower rates on their taxable income.
The problem is that our entire tax system is designed to tax labor, not wealth.
Middle-class families cannot defer taxes on their wages or borrow against shares tax-free, as ChatGPT pointed out. This creates a fundamental injustice where people who work for their money are taxed immediately, while people whose money grows through investments can defer or even entirely avoid these taxes.
However, the system allows their wealth to grow in ways that are largely untaxed, while ordinary workers pay taxes on every penny they earn.
Tax optimization is another thing that average people don't pay for and therefore don't do.
The rich pay vast sums in taxes, which often impresses us.
But in reality, it's a low percentage compared to what we, the 'non-rich,' contribute from our incomes.
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Source: Yahoo
