Join In On The Action "Register Here" To View The Forums

Already a Member Login Here

Board index Forum Index
User avatar
Adjutant
 
Posts: 3494
Joined: 17 May 2013, 3:32 pm

Post 23 Dec 2019, 6:06 pm

You're not being taxed---your heirs are. They are getting income--why shouldnt they be taxed? You are very limited in how much money you can gift during your lifetime before the recipient gets taxed. It's not being taxed twice, because a separate person is taxed.

Libertarians like to think of money as being "their" money and the government seizes it from them. But the money has no reality without the full faith and credit of the United States. And though you have a right to use money as you see fit...the US government has every right to tax the recipient of that money. And allowing unfettered transfers across generations creates a wealthy class, who have not done anything to earn that, and in a democracy there is no reason to allow those who have not done anything to earn access to money tax free. Money in large degree is a chit for access to good and services in a society. You should largely only have the right to gain access to those goods and services by actually doing something. There is no reason to allow succeeding generations of a family who have done nothing to keep piling up wealth . It's contrary to the egalitarian notion of people having an equal start in life. There will always be advantages to growing up in a wealthy family, but there is no need to compound that advantage by giving them all this money tax free.
User avatar
Dignitary
 
Posts: 3409
Joined: 02 Oct 2000, 9:01 am

Post 24 Dec 2019, 9:44 am

bbauska wrote:I am fine with a 10% tax across the board on all corporations and all individuals. The government should not be picking winners and losers. The field should be level in the way the government standards are applied to all.

When it comes to "inter-generational" wealth, that is a government intrusion upon what I do with my money. If I choose to give it to my children, and it is money that has been earned and already taxed, why should the government be allowed to tax it once again? That is taking two bites at the apple, so to speak.


You're dead. You're not being taxed, your heirs are. Right now, if you get a gift from someone that's more than 10K you've got to pay taxes on it. If you get the same gift as an inheritance, you get something like the first 10m tax free. That makes no sense.

[Just saw that Freeman and I wrote the same first part! Great minds . . . ]
User avatar
Administrator
 
Posts: 7158
Joined: 26 Jun 2000, 1:13 pm

Post 24 Dec 2019, 10:34 am

The only problem I have with your great minds thinking alike, is that I am certainly NOT dead. If I choose to give a gift to my children, or put my funds into a trust that lives in perpetuity, then so be it. It is my choice.

Again, there is that choice thing that Conservatives are for... :grin:

Merry Christmas all!
User avatar
Dignitary
 
Posts: 3409
Joined: 02 Oct 2000, 9:01 am

Post 24 Dec 2019, 3:21 pm

bbauska wrote:The only problem I have with your great minds thinking alike, is that I am certainly NOT dead. If I choose to give a gift to my children, or put my funds into a trust that lives in perpetuity, then so be it. It is my choice.

Again, there is that choice thing that Conservatives are for... :grin:


Conservatives for for tax fraud??? Is that what you're saying? I don't think I understand your point, because.

If you choose to give a gift to your children,it is taxable! It's called the gift tax. It's been raised to 15K. If you're dead, however, your estate gets to give $11.4 mil tax free. Why the difference? It makes no sense.

Enjoy your holiday!
User avatar
Administrator
 
Posts: 7158
Joined: 26 Jun 2000, 1:13 pm

Post 24 Dec 2019, 5:12 pm

I understand the tax law. I do not agree with it, but I understand it. The choice comment is how a person CHOOSES to dispense money they have earned and paid taxes on already.

Do you think gifts should be taxable?
User avatar
Ambassador
 
Posts: 4946
Joined: 08 Jun 2000, 10:26 am

Post 25 Dec 2019, 7:52 am

On the facts, gifts above the annual "exclusion" of $15,000 are not subject to tax because there is a lifetime estate / gift tax "exemption" of $11.4 million. You get both the exclusion and the exemption.

One can argue against any estate or gift tax, as bbauska does, on philosophical grounds. However, the ability to step up basis without tax ramifications if gifts are made to charitable organizations or to heirs on one's passing is a conceptual error in the tax code. These earnings have never been taxed. Twice Congress has successfully removed the step up provision for inheritance (1976 and under Obama), but in both cases the removal has been repealed. The old arguments for the step up in inheritance are no longer valid. Except for the rare few, there is no longer a functional estate or gift tax so we are rarely seeing double taxation. Also, it is no longer challenging to figure out the basis for most capital assets since they are held by heavily regulated financial institutions in most cases.

I'm all for lowering tax rates -- I was just in discussion with an entrepreneur who asked me whether he should incorporate in Ireland and I advised he incorporate in the USA because of our competitive corporate tax rates --, but I am in favor of getting rid of loopholes such as the step up and carried interest. BTW, although our corporate tax rates are still higher than Ireland, especially when you include state taxes, the easier banking and regulatory policies make the US a better choice today.
User avatar
Dignitary
 
Posts: 3409
Joined: 02 Oct 2000, 9:01 am

Post 25 Dec 2019, 9:41 am

Ray Jay wrote:On the facts, gifts above the annual "exclusion" of $15,000 are not subject to tax because there is a lifetime estate / gift tax "exemption" of $11.4 million. You get both the exclusion and the exemption.


Wow. Thanks for that.
User avatar
Ambassador
 
Posts: 4946
Joined: 08 Jun 2000, 10:26 am

Post 25 Dec 2019, 4:32 pm

geojanes wrote:
Ray Jay wrote:On the facts, gifts above the annual "exclusion" of $15,000 are not subject to tax because there is a lifetime estate / gift tax "exemption" of $11.4 million. You get both the exclusion and the exemption.


Wow. Thanks for that.


Good to know that your $10 million gifts to your heirs are not taxable :)
User avatar
Administrator
 
Posts: 7158
Joined: 26 Jun 2000, 1:13 pm

Post 25 Dec 2019, 5:10 pm

So who now wants to change the law? I guess I am happy with that.

Good thing I am not committing tax fraud. Certainly wouldn't want to do that.
User avatar
Adjutant
 
Posts: 3494
Joined: 17 May 2013, 3:32 pm

Post 17 Jan 2020, 1:44 pm

Thought these were interesting economic policy proposals...

https://www.thirdway.org/memo/a-new-gen ... igital-age
User avatar
Adjutant
 
Posts: 3494
Joined: 17 May 2013, 3:32 pm

Post 11 Feb 2020, 12:20 am

Yes, let's trust the corporations/wealthy to regulate themselves...

https://www.huffpost.com/highline/artic ... lar-crime/
User avatar
Dignitary
 
Posts: 3409
Joined: 02 Oct 2000, 9:01 am

Post 05 Jul 2020, 2:56 pm

As I've reported in the past my effective federal tax rate over the years is as follows (Federal income tax/AGI):

2003: 23.6%
2004: 25.8%
2005: 26.3%
2006: 26.4%
2007: 28.4%
2008: 26.5%
2009: 26.5%
2010: 17.7%
2011: 13.1%
2012: 4.5%
2013: 6.4%
2014: 12.0%
2015: 6.5%
2016: 7.6%
2017: 12.8%
2018: 13.4%
2019: 11.8%

My effective rate was down in 2019 entirely because of the electric vehicle tax credit. Otherwise, it would have been higher.
Last edited by geojanes on 05 Jul 2020, 3:17 pm, edited 1 time in total.
User avatar
Dignitary
 
Posts: 3409
Joined: 02 Oct 2000, 9:01 am

Post 05 Jul 2020, 3:16 pm

Not unhappy with that rate. Still seems weird not to itemize, though I did it anyway and it just didn't benefit.

I will say I learned about estate taxes this year with the passing of my father. I was introduced to the step-up in cost basis on death. My father never earned much, but he was a saver, and he invested that money in stocks his entire life, so by the time he died he had a fair-sized estate. Small enough to be exempt from the estate tax, of course, but still substantial.

When you die, the cost basis of your estate is stepped-up to its value to the day you die. That means all these securities he bought in the 1970s with 98% unrealized appreciation, had he sold them before he died, he would have had to pay capital gains. Since he didn't, all that unrealized capital gain is wiped out, and since he died prior to Covid, much of it is being carried at a substantial unrealized loss.

While I get there are reasons for it, that is what I think is called "a boondoggle."
User avatar
Dignitary
 
Posts: 3409
Joined: 02 Oct 2000, 9:01 am

Post 16 May 2021, 2:03 pm

2003: 23.6%
2004: 25.8%
2005: 26.3%
2006: 26.4%
2007: 28.4%
2008: 26.5%
2009: 26.5%
2010: 17.7%
2011: 13.1%
2012: 4.5%
2013: 6.4%
2014: 12.0%
2015: 6.5%
2016: 7.6%
2017: 12.8%
2018: 13.4%
2019: 11.8%
2020: 13.0%

Tax/AGI. If we couldn't get people to play along years ago, I doubt we will now, but for the record . . .
User avatar
Statesman
 
Posts: 11266
Joined: 15 Aug 2000, 8:59 am

Post 18 May 2021, 6:22 am

Geo is this federal tax only or state and federal?