I'm not even going to get into the fact that income taxes are paid on income, not net worth. The hater in this case really has no idea what she's talking about. It's offensive to me as a tax pro, but whatever.
It is offensive to us not tax pros also.
But then again, explain finance to some is like explaining nuclear physics to a 5 year old.
Great breakdown of the three options. The way you spelled it out, door #2 and #3 are ideal for crypto. Since most still have their regular jobs, they can use crypto earnings to help with Door #2. Then, based upon what is received, can turn around and ride the bull with either than token or swap into something else for Door #3.
It will take some time as the charts show. The early days are like watching grass grow. That is the power of compounding of which one of the vital components is time.
Sadly, for most, compounding only comes in with debt. They compound the credit card balances over 7 years and then are surprised when they are $35K (or more) in debt. Well 18% APY compounding over 7 years can add up to a whole lot from a small starting point.
It works both ways.
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Oh and by the way, if anyone who agrees with the dimwit in the tweet, Musk is paying a combined 53% between Federal and State tax in 2021.
Anyone wonder why he picked his ass up and moved to Texas?
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Exactly why he moved his ass to Texas lol.
That ladies reply to his tweet trigged no other thought in my head then, OK so you are telling me your have a broke mindset.
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Not saying I agree with dimwits, but is that the before his lawyers and accounts find ways chop the number down figure, or what he actually paid?
Sure, back in the fifties, the nominal top federal income tax rate was 90% and it's about 40% now, but is there even one super wealthy person who actually paid/pays anything like those rates? If so, they’re getting lousy tax advice.
Supposedly he is actually paying $11 billion in tax.
Back in the 1950s rich people didn't pay those top rates either.
You can still find bricked up windows in the UK that were done to avoid window taxes in the 1700s.
People who have wealth have always taken steps to prevent or reduce the amount of taxes paid.
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Actually that is not fully accurate. Yes the top federal income tax rate was that but it was not applied in the same way. The tax base was different and the rate only kicked in after a certain amount (like $200K).
Today any tax bracket kicks in from the first dollar.
So once again, people are misled.
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I should have said marginal top rate.
After deductions. Standard deduction for most people, but lots of itemized deductions for high-income folks who have competent tax advisors.
The effective tax rate for the top 1% is within 3% of the top effective tax rate that they've ever paid historically, FYI.
The rich pay almost as much in taxes as they ever have, and yet people are stupid enough to think that they aren't paying anything.
The only real tax loophole that is preventing some very wealthy people from paying a lot in taxes is carried interest, and that only applies to a minority of workers in private equity funds.
<3
You're right, but it shouldn't be. The real barrier is emotional - having money and then not spending it is incredibly hard. Being able to project out to your future self 30-50 years down the line is almost impossible for people to wrap their heads around.
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It is the same with governments. Thomas Sowell calls this "stage one" thinking. Most people never get beyond the immediate effect of what they do economically (yummy food, new shiny car, lots of votes in the next election) to think about what happens down the line--to them and/or to others. It works for politicians because somebody else will pay the costs beyond "stage one."
The more my net worth increases, the less inclined I am to spend.
Who knew that the desire to appear wealthy can be sated by actually being wealthy.