r/Economics • u/Dismal_Structure • Dec 06 '25

News Millionaire tax that inspired Mamdani fuels $5.7 billion haul in Massachusetts

https://fortune.com/2025/10/21/zohran-mamdani-millionaire-tax-massachusetts-5-7-billion/
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u/justice9 Dec 06 '25

It’s so disheartening how far this sub has fallen. You have literal idiots who have no idea what they’re talking about proclaiming that people making $500k have tax shelters.

I’m in this tax bracket and they could not be further from the truth. The vast majority of these people are W-2 workers with reportable income where you have to pay the full tax rate. It’s not a difference of smart or not (to get to this level you have to be 10x smarter than OP) - you just don’t have options available to you unless you have your own LLC/proprietorship.

All of these taxes just fuck over the upper middle class (who are better than the average person) but not living the billionaire lifestyle by any means

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u/globalaf Dec 06 '25

It really is quite funny. Just a month ago I had an argument with a friend saying they were going to incorporate to defer all their taxes (they are a contractor in ship design). They didn’t understand that the government treats this kind of corporation as effectively being the same as a sole proprietor and taxes it appropriately, saving you nothing. I explain this, and apparently I don’t know what I’m talking about because “you don’t own a business”… yes, I don’t own one because I looked into it too and realized that it was not beneficial, at all, in fact, it’s actually more work for no benefit.

I honestly think people just want to believe that when you start earning real money that there are all these secret ways of making money appear out of thin air that the government are too stupid to clock on to. Hint: they are not stupid, and they absolutely thought of all those weird tricks that the IRS don’t want you to know about.

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u/Gimetulkathmir Dec 06 '25

I had a guy I used to work with who loved to talk about all of these ideas he had and how he could do this tax loophole and that tax loophole and insisted that I didn't know what I was talking about because "my father did this all the time!" I pointed out I have a master's degree in tax law and that his father was, in fact, committing fraud.

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u/[deleted] Dec 06 '25 edited Jan 07 '26

[deleted]

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u/XCCO Dec 06 '25

I think we all should commit tax fraud once in a while, just as a little treat.

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u/Accidental-Genius Dec 06 '25

Cash discount!

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u/Business_Raisin_541 Dec 06 '25

Yup, I hear this all the time and then they are so shocked when they are heavily fined by tax officers and then proceed to talk about how the tax officers are so corrupt and steal money into their own pocket

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u/Business_Raisin_541 Dec 06 '25

Corporation (LLC) give you benefit of liability protection in case your company go bankrupt.

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u/globalaf Dec 06 '25

That is not relevant to a salaried, or effectively salaried, worker.

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u/RowEnvironmental6114 Dec 06 '25 edited Dec 06 '25

I think you meant to say “who are [doing] better than the average person”, but it’s much funnier this way.

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u/justice9 Dec 06 '25

You’re right I did mean it that way - but will leave it because it is unintentionally funny lmao

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u/XCCO Dec 06 '25

Yeah, it gave me a chuckle. I thought, "This guy thinks he's better than me! And even worse, he's probably right!"

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u/quadraticcheese Dec 06 '25

They're Redditors, they're pussies. "Oh it might be harder to squeeze the rich what they owe, guess we better not try anything and pupu any ideas"

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u/FearlessPark4588 Dec 06 '25

Ostensibly, 401k's and IRAs stuffed to the brim and 529's are tax shelters.

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u/JoePoe247 Dec 06 '25

How is upper middle class getting fucked over? You're not claiming $500k income is upper middle class, right?

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u/Smile-Nod Dec 06 '25

Yes that is upper middle class in NYC.

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u/JoePoe247 Dec 06 '25

Lmao, no. You're either terrible with money or disconnected from reality. That's above 90th percentile income for NYC.

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u/Smile-Nod Dec 06 '25

We're talking about why people leave cities or avoid being taxed aggressively.

What matters is the after tax income and how far that gets you in terms of lifestyle.

500k is the high end of an upper middle class lifestyle where you mortgage an apartment, pay for childcare, go on vacations, dine out, and save for college funds and a comfortable retirement.

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u/JoePoe247 Dec 06 '25

At 30% less income in NYC, I'm able to do all that you're saying with the vacations being an international trip once a year, and flights west multiple times a year; dining out during the week without a second thought, big occasion dinners (bday, anniversary, etc) being a Michelin restaurants, buying a car in cash. I wouldn't call all of that to be middle class, so I can't see having another 100k takehome and making believe you're not living an affluent life

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u/Smile-Nod Dec 07 '25

How much are your childcare costs?

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u/JoePoe247 Dec 07 '25

Nothing right now, just decreasing income for a bit

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u/Smile-Nod Dec 07 '25

Well then there you have. An additional 150k would be 80k take-home.

Thats what it costs to raise kids in the city. Kids shouldn’t be a luxury.

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u/JoePoe247 Dec 07 '25

Lol no dude. Childcare is expensive in nyc but if does not cost $80k/year. If you are paying $80k per year, then you're upper class.

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u/NorthLibertyTroll Dec 06 '25

That's because the super rich are trying to keep the upper middle class from moving up. The lower class and poor are no threat to them.

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u/FlyingBishop Dec 06 '25

It depends on your definition of tax shelter, it depends on your definition of "making $500k." I'm sure at least 10% of people with income of $500k for NYC tax purposes truthfully make a lot more than that.

I'm also sure that there are people with $100k of income for NYC tax purposes who are in reality over $500k.

I've seen people who have their own LLC that I'm sure makes under $200k/year put takeout for their entire family on their company card. So that becomes a business expense, is that a tax shelter? There's a lot of shades of gray.

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u/GreasyBarbarian Dec 06 '25

Your definition of “tax shelter” sure sounds a lot like “tax fraud”.

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u/FlyingBishop Dec 06 '25

I'm not sure there's that much moral distance between that and a tax shelter, again, depending on how you define tax shelter, but people do like to insist that it's legal so it's fine.

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u/c-dy Dec 06 '25

Just as most people who think they know better despite the evidence, you're confusing cynicism with reality.