HOW THE RICH AVOID PAYING TAXES

This is Warren Buffett, one of the richest people in the world.

Thanks to the company he runs — Berkshire Hathaway.

Basically, it’s a holding company that just owns a bunch of other companies:

Geico, Dairy Queen, a huge railroad. As well as lots of stock in other companies,

like Apple and CocaCola.

So when those companies do well and their stock goes up,

Berkshire Hathaway stock goes up.

When Buffett took over the company in 1965, a single share was worth $19.
Today it’s worth nearly a half million dollars.

Buffett owns nearly 240,000 of these shares. This is where his wealth is.

But, as he has been known for pointing out:

Warren Buffett still pays a lower tax rate than his secretary.

She pays twice the rate I pay, I think that’s outrageous.

That’s because they pay different types of taxes.

His secretary pays income taxes on her salary,

but Buffett mainly pays capital gains taxes on his sold stock.

And that’s taxed at nearly half the rate.

The wealthy are definitely undertaxed.

In the US, the disparity between the richest Americans and everyone else has been
growing.

And in the last 40 years, the after-tax income of the richest has risen more than 400%,

while middle class income has only risen 50%.

The way these people make money is very different than the way these people make

And they’re not taxed the same.

I pay less in taxes than people that work for a living and make as much money as I do.

This is Morris. He used to work on Wall Street,

now he’s retired and lives off his many stock market investments.

I own stock in companies: Berkshire Hathaway, and Amazon, and Apple.

He’s a pretty typical one percenter.

Except that he spends his money advocating for rich people, like him, to be taxed more.

I want to live in a country filled with a middle class of people

who can all afford to shop in our businesses.

Most people have a normal job — they get a paycheck and pay income tax

— ranging from 10 to 37 percent.

But people like Morris, they make a lot of their income from investments,

generally stocks and real estate.

These investments are taxed as capital gains,

and things like long-term stock have a maximum tax rate of just 20%.

I sold some stock recently for $400,000 and my taxes on that were around $50,000.

But that $50,000 is far less tax than anyone who has a job making $400,000 a year would
pay.

And most of his wealth, well, isn’t even taxable.

People like Morris — or Buffett — are worth so much money because of the stock that
they hold.

But it’s not tangible, spendable, taxable money.

I can look at my stock portfolio and I can say, oh,

I made a million dollars this year. But it doesn't mean I have to pay anything in taxes

because our system is based on only paying taxes when you actually sell something.

Amazon’s Jeff Bezos — the richest man in America

thanks mostly to his Amazon stock — pays almost nothing in taxes.

We value his worth here, but it’s never taxed until it’s turned into real money

when he sells the stock, and it’s taxed as a capital gain.

This is one way billionaires are able to be technically worth so much money,

but pay so little in taxes.

Some billionaires, like Elon Musk, are able to get loans against their stocks,

and live off of that.

They don’t even need to sell the stock to turn it into spendable money.
No sale, no taxes.

The fact is, if you're a billionaire, you don't need any income.

There’s also a big loophole in capital gains taxes that the rich exploit called the "stepped-
up basis."

If, hypothetically, Warren Buffett were to sell his stock,

he’d have to pay capital gains taxes based on his profit.

So the cost of the stock, minus the original investment.

But if he holds off selling his entire life, when he dies,

whoever inherits the stock, and then sells it, would only have to pay taxes

on what they earned after they inherited it.

Leaving all those original gains untaxed.

It’s part of what’s called “buy, borrow, die”, and it’s one way the richest families

avoid paying taxes.

It’s this system, and the fact that most taxable capital gains are going to the top 1%,

that lawmakers see changing the capital gains tax as an easy way to tax the rich.

President Biden has proposed closing that “stepped up” loophole and

increasing the maximum tax rate from 20% to 39.6%,

but just for people making more than a million dollars a year.

Critics argue it may discourage people from investing in the stock market,
or that current millionaires would just sell less stock.

But it would bring in more tax revenue,

from more conservative estimates of $200 billion over ten years to double that.

It would also mean Buffett would pay a closer tax rate to his secretary.

But this pile of unrealized money, still goes untaxed.

There's a lot of things we could do to make the system more fair.

We could have taxes on wealth. We could have taxes on gains in the stock market.

Most Americans are bothered that wealthy people don’t pay their fair share.

And changing capital gains taxes wouldn’t be the whole solution,

but advocates argue it’d be an easy place to start.

Our system is making the rich get richer and richer and richer and everyone else just not.

Tiếng Anh (Hoa Kỳ)

How Taiwan held off Covid-19, until it didn't

“When you land,

the quarantine process immediately begins.

They spray down all your bags...

You have to take a quarantine taxi,

specifically designated to take you from where you were going, to your quarantine.
I got to this hotel, and we went down into, like, the cargo entrance,

and in it is this screen, with a person on the other side of a webcam,

and they just basically told me, Take that elevator, don't touch anything,

and we'll program it to go up to your floor.”

This is Ed.

I wanted to talk to him because, in 2020,

he was one of more than half a million people who went through a mandatory two-
week quarantine,

and then walked out into Taiwan.

Ed has dual citizenship in Taiwan and Canada.

But he lives in New York.

I do, too.

And for most of 2020 in New York,

The streets were empty.

Venues were closed.

But Taiwan was normal.

“It's as if the pandemic had never happened.

You could go into restaurants, the subway...

Civil society had essentially stayed exactly the same.”

Through all of 2020, Taiwan had a total of seven Covid-19 deaths.

Seven.

Among the lowest in the world.

And then, in May of 2021,

something changed.

“Taiwan is now experiencing rising daily infections.”

“Huge surge--”

“Largest wave--”

”Taiwan is now grappling with its worst outbreak.”

After more than a year of normalcy,

Taiwan faced its biggest covid outbreak ever.

So I wanted to understand:

How did Taiwan stay so safe from Covid-19 for so long?

Why did it stop working?

And what can we learn from it?

“Through the streets of Taipei,"

“A martial parade symbolic of the fighting spirit of Nationalist China’s army….”

Taiwan started out relatively poor and under a military dictatorship.

But by the 1990s it had become a democracy

and was experiencing an economic boom.

The government developed the National Health Insurance system,

which provided universal health care to 99 percent of the population.

This put Taiwan on par with wealthy countries around the world.

Well, other than the US.

In 2001 they began to implement "smart cards"

that stored patients’ medical information digitally.

That combination, of universal healthcare and a digital infrastructure,

would come to be regarded as one of the best healthcare systems in the world.

Then, in 2003, China began reporting an outbreak of Severe Acute Respiratory

Syndrome.

By March 2003, SARS was in Taiwan.

Cases started rapidly appearing in hospitals,

primarily in Taipei.

In April, a large cluster of cases was reported at this hospital.

In response, the Mayor of Taipei abruptly decided to seal the hospital off,

preventing anyone from entering or leaving.

More than 150 people trapped inside became infected.

Of the more than 80 people who eventually died of SARS in Taiwan,

31 had been locked in that hospital.

The government‘s response to SARS was chaotic.

To handle the logistics of the outbreak,

they’d set up a temporary agency called the Central Epidemic Command Center.

But when it came time to figure out who had been responsible for locking down the
hospital,

officials at all levels of government disagreed on whose decision it had actually been.

“We’ve had a lot of problems of state and municipal governments saying one thing,

and the central government saying another.”

So in 2004, the role of the CECC was clarified.

When activated during an outbreak,

this agency would now become the central public health authority,

with access to information across government agencies.

“We've got a lot of public infrastructure that's made like Lego blocks,

where people can very easily recombine it to produce new functionalities.”

Over the next 15 years, the CECC was activated during 3 smaller outbreaks.

But the real test was yet to come.

On December 31, 2019, Taiwan‘s government learned

that at least seven atypical pneumonia cases had been reported in Wuhan, China.
And on January 20th, they officially activated the CECC.

Because the CECC could share information across agencies,

it was able to integrate citizens’ travel data with their health data.

Together, that combination allowed them to assess risk at the level of the individual.

People who had recently traveled to countries where they could have been exposed,

were considered high risk.

People with no underlying health issues who hadn’t traveled abroad

were considered low risk.

Everyone in Taiwan had that information sent to their smart card.

Altogether it created a system that looked something like this:

Low-risk people were instructed to buy a weekly quota of masks

allocated by the government.

But they’d continue to live in a functional, normal society.

High-risk people went into a two-week quarantine,

after which they’d become low-risk, and could join everyone else.

Because of this, Taiwan didn’t have to go into lock down.

Community spread among people in Taiwan was very, very low.

But in March, cases coming into Taiwan began to rise.

So Taiwan came up with an additional strategy:

It started considering everyone flying in to be high-risk,

no matter where they were coming from.

And most foreign travelers were banned completely.

That meant a lot more mandatory quarantine.

To enforce this, the CECC used cell phone location data

to see if any travelers left their quarantine block.

“The moment you close the door, you see on the back,

there's like this huge, red, scary sign, that says

you're going to be fined a lot of money if you leave your quarantine.

You would get texts from the neighborhood police officer,

whose job it is to call and check in on you every single day.

Actually, twice a day."

For two weeks, the only human contact Ed had was through a peephole,

when someone came to drop off food, or collect his trash.

But then, he got to join the nearly 24 million people in Taiwan living normal lives.

“This was an alternate universe of what America, and the rest of the world, had seen
all year.

The Taiwanese people had been able to just live their lives,

as if nothing had happened.

Like, to me, that's freedom.”

When I started making this video, it was a story about how Taiwan managed to beat
Covid.

But, in May of 2021, a new wave of cases suddenly put Taiwan's success in question.

“The total number of cases has actually doubled...”

“More shops are going to be forced to close...”

“Do not become complacent in the face of a pandemic--

a lesson learned for Taiwanese..."

Taiwan had gradually loosened its quarantine system,

which meant incoming infections started to go unchecked.

As of this video, Taiwan is still getting its outbreak under control.

Thousands of people have been sent through new rounds of quarantine.

But even Taiwan won’t be truly safe,

until the system it built to keep the pandemic out

is no longer necessary.

And the best way we know of to get there, is to vaccinate.

On the flip side, after a very hard year, New York looks kind of normal again.

But it’s not because we finally figured out how to contain Covid.

It’s because of the vaccine.

“This will happen again.

And we can't just be like, Oh, well, there's a vaccine, so it's all good.

At the end of all this, even once we're all vaccinated and going to parties again,

we should look at, what did Taiwan do right?

So that we don't have to have this same conversation in the future.

Because it is coming.”

For more than a year, Taiwan stayed safe and free during a deadly pandemic.

But, in a fight against a pandemic, mistakes are going to happen.

The trick is to learn from them.

What tennis pros look at when they pick a ball

Before a tennis player makes a serve,

they have to get in the zone.

Novak Djokovic will bounce the ball, first with his racket,

then with his hand.

Naomi Osaka will tap her thigh.

Rafael Nadal will pull his shorts,

the sleeves around his shoulders,

touch his nose,

and then finally move his hair to the back of his ears.

But there’s one ritual almost every player does:

They’re looking at the fluff.

Choosing a tennis ball with the perfect level of fluffiness

is a long-held tennis tradition.

And some players believe the right ball can help them win.

But does fluff actually make a difference?

In a professional tennis match,

six balls are used over nine games.

Before serving,

players typically ask the ball boy or girl for 3 or 4 balls,

and select one or two.

And most of these players are looking for something specific:

“I try to get the ball that is more new for the first serve.”

Daniil Medvedev is a professional tennis player

who’s currently ranked Number 2 in the world.

He’s defeated Novak Djokovic,

Rafael Nadal,

and Dominic Thiem.

He just competed in the Ultimate Tennis Showdown.

And the French Open.

And he cares about fluff.

“You try to find a ball that has less hair, actually,

because it will go faster in the air.

You don't want this big ball, you know,

that has a lot of humidity in it for the first serve,

because it's not going to go fast.”

Michael Kosta, a former professional tennis player,

does the same thing:

“I would always want the more compact,

tighter-felt ball for my first serve.

I felt like that moved faster through the air.

It gave me more confidence to hit that first serve,

and I would save the kind of juicier, bigger, fluffier ball

for my second serve, as almost a safety ball--

I need this big, slow, beach ball to get it in the court,

just in case I miss my first serve.”

“On the second serve they're looking for control more than speed.

My name is Patrick Mouratoglou.

I'm a professional tennis coach.

I’m working with Serena Williams, For the last, almost ten years.”

Yes, the Serena Williams.

“When the ball is fast, you have less control.

So on the second serve, they don't want to hit a double fault.

And the fluffier the ball, the more grip you have.”

“It's the kind of tactic that, I should say, doesn't affect so much.

Like, you're not going to win the match just because you chose a fluffier ball.”

But there is some science behind this ritual.

So, Rabi, how involved, or how much information do you know about tennis?

“Oh, I think I know enough to be dangerous.

In terms of the science.

I'm a pretty lousy tennis player.”

Dr. Rabindra Mehta works for the NASA Ames Research Center,

and has been studying the aerodynamics of sports balls

for more than four decades.

“The fluff is the whole key.

With tennis, you get what we call ‘extra drag.’

Drag is the force that slows the ball down

as it's flying through the air.

Initially, when you pull it out of a can,

you’ll find it's pretty compact, and so it has one level of drag on it.

But when you start playing with it,

it tends to fluff up, initially, the first few games,

and the drag actually goes up.

Like the hair on our arms, it’ll contribute to the drag.”

That’s why swimmers have their own ritual

of shaving all their body hair before big meets:

to make it easier for them to move through the water.

To figure out how much the fluffiness of a ball

actually affects its speed,

Dr. Mehta and his team used a wind tunnel.

“We had the ball on the balance, so we could measure

how much drag force, how does it change?”

They compared tennis balls with different amounts of wear,

and proved that the fuzzier the ball, the slower it moves.

“And the way we proved that was just by literally shaving the ball,

to try and get it to match the other balls.

And we were able to do that.”

On the court, this drag can mean

that if a player serves with a fluffier ball,

the person receiving gets slightly more time to react.

And the server then gets slightly more time to return it.

“I was at the US Open, and we had some people there

who were interested in what we were doing, and they actually sent us balls

that had been used in the actual tournament.

So when we started looking at those balls, it was pretty obvious

that they were preferentially using two or three balls out of the six.

So it wasn't like there was equal wear.”

Beyond the science, the ball selection still serves a purpose:

“If I believe, when I'm match point down, and I have to hit a second serve,

that my rituals, of finding that bigger, juicier, feltier ball,

are going to give me a tiny little bit of safety on the second serve,

that little bit of confidence can be what helps you eke out the match.”
“There is just such an incredible amount of pressure and stress on them.

So the fact that it makes them feel better, makes them play better”

That’s why routines are such a big part of this sport:

“The goal of the routine is to refocus for the next point.

And it becomes a habit.”

Some routines can be more obsessive than others,

like Nadal meticulously lining up his water bottles on the sidelines.

But for many, that little ritual of picking the right ball is enough.

“Most of the players choose their balls.

Serena doesn’t, by the way.

She’s one of the only players who does not.

She’s taking only one ball to serve, one by one.

So if she misses her first serve, then she asks for a second ball --

where most other players take two balls, keep one in their pocket…

And she takes the first ball that comes.

She never asks for another ball.”