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Comment by lend000 | Hacker News Reader

If I am understanding this correctly, there is no money flowing to rich Americans, but they will have additional opportunities to deduct losses on their 2020 taxes (basically paying less in taxes after a major stock market rout) that would normally need to be spread over future tax returns indefinitely.

However, this will only occur if they took losses, so it is really a discount of ~35% on negative income. This would also apply to someone who is not rich, i.e. a software dev sole proprietor who cashed out big losses in March in the stock market and then applied those losses against their normal income to end up reporting 64k in income instead of 100k (normally 36k in losses would have to be stretched over 12 years of tax returns).

I understand this doesn't fit the narrative, but please comment if it is incorrect instead of downvoting.

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My understanding is "losses" is kinda vague if you own one of these "pass through" entities you can pay yourself a salary, have the "pass through" business loose money then pass that loss off against your personal income. I'm not a accountant so I might be wrong.

I know a CPA and they have noted that there have been calls from wealthy clients looking for loopholes to save money on taxes, based on the stimulus.

Money not payed in taxes isn't quite the same as getting it back, but in the end its a fair amount of money kept by an idividua and not being sent to the government . Seems kinda shady to me, to put something like this in a bill that's trying to help lower to moderate income individuals financial survive a pandemic.. But I'm old and cynical.

I believe if you elect to be a pass-through LLC (eligible for this rule change), you cannot pay yourself a salary in the same way as if you were a non pass-through LLC or S-Corp. It isn't as easy to cheat the system as most people think, but there seem to be more opportunities to finagle things the more assets you own.

The fundamental way our tax code is broken is not loopholes, but the actual publicly known tax bracket rates. They should be higher for capital gains, the progressive rate graduation should be steeper, and 500k shouldn't be the highest tax bracket when there are people who make 10,000 times that in a year. It's unbelievable that this isn't the focus of the issue and people are instead harping on wealth taxes and loopholes.

yes, please. sign me up for all of the above. let's get a fairer, more dynamic economy that discouraging rent-seeking and encourages risk-taking and innovation. wealth concentration is a symptom of a broken, plutocratic system, not a capitalistic one.

I would love that, how rent seekers leech the system is not fair.

Concentration of wealth characterizes all Capitalist economies - limited concentration as a pre-condition, and an increasing degree of concentration as an ongoing phenomenon and consequence.

yes, i should have been more specific that i meant the excess levels of concentration we see in many so-called capitalistic economies.

edit: should also note that capitalism expects wealth concentration, but it's not a pre-condition.

S-corps are pass through entities.

I thought the benefit of pass-through entities was the opposite--push through what would otherwise be salary as lesser-taxed (no FICA) profit?

If your company has $100k to play with, paying $200k salary to take $100k loss is not a good move.

> My understanding is "losses" is kinda vague if you own one of these "pass through" entities you can pay yourself a salary, have the "pass through" business loose money then pass that loss off against your personal income. I'm not a accountant so I might be wrong.

Say your pass-through entities has 100k in revenue. You could pay yourself 140k and mark down 40k of losses but that's financially disadvantageous because you're tax rate on the income will be higher than the tax rate on the losses. You're paying 13k in extra taxes to avoid paying 8k, donating an extra 5k to the IRS.

Most companies try to shift revenue from income to profits because it will reduce your total tax burden.

Paying 1.7 million less is the same as earning 1.7 million from my POV.

Don't forget the previous tax break also ;)

>on their 2020 taxes (basically paying less in taxes after a major stock market rout)

because of additional language that applies the policy retroactively “so losses in 2018 and 2019 can be ‘carried back’ against the past five years.”

Something really needs to be done about downvote brigading on HN. At least people should be required to provide a reason for the downvote.

I've wondered if a five-a-day downvote limit would benefit HN.

Or just make it cost karma. Anyone that down-votes too much would wind up at the threshold for down-voting and be rate limited by their ability to make up-voted comments. It would also render ineffective the strategy of having a bunch of accounts with enough karma to downvote and using those accounts all at once to make comments you don't like dead (the presence of corporate or state controlled accounts employing this strategy has been suggested multiple times).

The way to game that is to just upvote random comments that you don't care about in stories that you don't care about, just to have made enough upvotes to enable you to downvote again.

I meant have comments that get upvoted, not upvote other comments.

Oh. That's harder, but not much. You just need two accounts. Make some innocuous comments on account 1, upvote them with account 2. Now you can downvote from account 1.

I think they already rate limit down votes. I think I recall seeing at least a few not apply when I checked as an experiment in the past.

I try to up vote at least twice as much as I down vote. If I down vote a a low quality comment, I try to at least up vote 2 quality ones to offset it.

Slashdot had (still has as far as I know) a daily limit on up and down votes, and quite a small one at that (I think 5?). It also prevents you from voting and commenting on the same topic.

I agree that downvoting should be mainly for either a mean post, a post that adds nothing ("me too" or "lol"), or a poor argument like an ad hominem or incorrect premises. Instead it's used for feelings, as if we could collectively vote on reality. Maybe dang/mods could put some ever-present reminder someplace in the comment 'reply' page.

That’s not scalable. But maybe a 1/N probability of being required to do so, for reasonable N.

(Edit: something like slashdots categories could work but you’d need some incentive to be truthful rather than trust them to separate a “troll” from a “disagree”.)

Plus, if anything, I’d say it’s more common for there to be a bias against downvoting relative to upvoting.

Maybe- comment required to downvote, or upvote on existing child comment required to downvote

Oh nice, so you have to endorse some existing response (which could be your own) in order to downvote. That could work!

The limit is about three comments every couple of hours or so. Downvotes on the other hand, are limitless. That should not change while there is a limit on comments. Voting is really the only major way to interact with this site. Three comments every few hours leave no room for actual discussion.

That's because your account is rate-limited. We rate limit accounts when they post too many low-quality comments too quickly and/or get involved in flamewars. We're happy to take the rate limit off (and often do) when people give us reason to believe that they'll use the site as intended in the future. Emailing hn@ycombinator.com is the best way to do that.

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

Edit: I took a look at your account's recent comments because often we just remove rate limits when the problem has been corrected. Unfortunately, in this case the opposite is true. Would you please stop using HN primarily for political and ideological battle? It destroys the curious conversation that HN is intended for, so we have to ban accounts that do it.

https://news.ycombinator.com/newsguidelines.html

What notifications do you see when your account has been restricted?

That depends on the nature of the restriction. One is:

  You're posting too fast. Please slow down. Thanks.

Please don't break the site guidelines. They ask you not to post like this for several good reasons, one of which is that it takes time for the voting on comments to settle. Often unfair downvotes get canceled by users who come along, see the situation, and make a corrective upvote. Meanwhile complaints like this one linger on in the thread, gathering dust and adding inaccuracy to offtopicness. They don't garbage-collect themselves.

https://news.ycombinator.com/newsguidelines.html

The guidelines also, for several good reasons, ask you not to post about "brigading" and the like. These perceptions are nearly always imaginary, as the current example illustrates. Everyone sees something they don't like and says "aha! brigading!". Nobody sees it change to the opposite and then says "oh! guess I was wrong about that." I've looked at the data on this closely for years, and the conclusion is that with rare exceptions (and I do mean rare) it is all cognitive bias of the purest form. Cognitive bias plus randomness equals narrative. It also equals noise in HN threads—and it evokes worse from others who have the opposite bias and take it as flamebait against their side.

https://hn.algolia.com/?sort=byDate&dateRange=all&type=comme...

https://hn.algolia.com/?dateRange=all&page=0&prefix=true&que...

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