[rcMgD2BwE72F]

That's untrue. At some point, the richer you get, the less tax you pay for every additional $ you earn (because capital gains are usually less taxed than wages).

Also, past a certain level of income, 100% of the extra revenues is invested (not spent) so there's no VAT. The rich borrow against their wealth, too.

I'm in Europe so I can't speak of the US but the more rich I get, the less I pay tax compared to my coworkers relative to my situation (I'll be earning more from stock on which I'm paying far less tax than an extra income from work).

Also, every €10K of annual gift I get from my (living) parents are not taxed at all (idem for the first €100K from any living parent). Whereas any poor child who expect €10K at their parent's death would have to pay 5% of tax (and more for each upper tier).

I'm getting hundreds of €K year over years and not paying 1€ of tax. Most of these gift are in stocks and neither me or my parent pay any tax on the realized gains (since it's gifted, they're no realization...). Also, my parents can lend me €500K at 0% (which they themselves borrow from banks at negligible rate).

It is legal but so corrupt, I don't see how the rich can't further distancing themselves from the rest of society.

[WA]

Which country is that? Because as a German, I can't follow entirely.

Capital gains: 25 %, less than wages, check.

Extra revenue invested (in stocks), hence no VAT: doesn't matter if you invest or keep the cash. You pay only VAT if you buy stuff.

> The rich borrow against their wealth, too.

Well, if they invest the money they borrow, they make more money and pay less tax, ok.

> Also, every €10K of annual gift I get from my (living) parents are not taxed at all (idem for the first €100K from any living parent). Whereas any poor child who expect €10K at their parent's death would have to pay 5% of tax (and more for each upper tier).

Not sure what you mean by that. The first €400K of an inheritance is tax free for children.

> I'm getting hundreds of €K year over years and not paying 1€ of tax. Most of these gift are in stocks and neither me or my parent pay any tax on the realized gains (since it's gifted, they're no realization...)

I don't follow. If you are gifted stocks directly and you sell them, you gotta pay tax on the gains. If you don't sell, you don't realize gains, but you also can't use the money. If you receive dividends, you have to pay tax on capital gains.

> Also, my parents can lend me €500K at 0% (which they themselves borrow from banks at negligible rate).

But how do your parents get a loan from a bank at negligible rates if it isn't for buying a house or so? Fees for buying stocks on margin are usually higher (and then you could borrow them yourself).

[rcMgD2BwE72F]

>Not sure what you mean by that. The first €400K of an inheritance is tax free for children.

I'm in France, the tax allowance is €100K per parent. But since a rich parent can give €100K before their death every 15 years, tax free (that was €160K a few years ago, which I benefited of), the 100K allowance is still available at death. Rich parents can give dozens of €K as gifts in addition to that as explained above, so this all adds up for me while others can only expect €100K tax free at most, and once.

>I don't follow. If you are gifted stocks directly and you sell them, you gotta pay tax on the gains. If you don't sell, you don't realize gains, but you also can't use the money. If you receive dividends, you have to pay tax on capital gains.

My parents made 10x on a few stocks, over a few years. When they gift the stock, they don't realize any gain since they never sold. I must declare their cost as their price on the day of gift. If I sell the stocks the day after and the stock stay flat, I pocket the whole x10 but neither me nor my parent paid any tax on the 10x gains.

>But how do your parents get a loan from a bank at negligible rates if it isn't for buying a house or so? Fees for buying stocks on margin are usually higher (and then you could borrow them yourself).

https://en.wikipedia.org/wiki/Lombard_credit. This can be negotiated as less than 1% with a few online banks. No need to justify any expenses/investments.

[WA]

Thanks for taking the time to clarify. Insightful and interesting that France handles a few things differently.

[garmaine]

These points largely don't hold true in the USA.

There is a gift tax exemption of $15k/yr, but with a lifetime cap and the total counts towards your estate taxes, so it ends up being paid in the end (assuming you die, and assuming your estate is rich enough to hit the limit, which is a fair assumption for this discussion).

In your other comment you mention how stock can be transferred "tax-free" in your jurisdiction. From your description I don't think it is actually tax-free, just tax-deferred. You still pay capital gains when you sell, no? But regardless this isn't true in the USA either. If I give appreciated stock to my kids, it is taxable by them as income at the current price.

There are trust funds and such that can be setup to gift the stock early before it appreciates and then pay it out later, but this is still a tax deferral scheme. The now-grown child still pays taxes when the fund matures and they access it.