Trump's tax returns

[Bob001]

Three words:
Progressive Consumption Tax

1/ Treat capital gains as ordinary income.

2/ Above a certain standard exemption -- way lower than today's -- treat all inheritances as ordinary income.

 

[Skeptic Ginger]

...
2/ Above a certain standard exemption -- way lower than today's -- treat all inheritances as ordinary income.

Or at least call in the capital gains at a person's death and charge that to the estate.

That neutralizes the argument that the "death tax" is taxing income twice.

The only exception can be small family run businesses but in those cases, the capital gains has to be carried over, not simply wiped off the board at death.

That deals with the claim said estate taxes force families to close family run businesses, especially small farms.

 

[Mader Levap]

Inheritance tax is one of those little things that shows how much BS rethuglican ideology is.

If we would take that whole conservative shtick seriously, republicans would have at best neutral stance about inheritance tax and had absolutely no reason to remove it.

After all, it is not like inheritance money was gained due to hard work (snicker), just that someone happens to have rich parent dying or something.

 

[Trebuchet]

Old money has always been the best money. That's why Trump doesn't fit into the US aristocracy.

 

[Leftus]

This is the classic barrier to any discussion whatsoever on taxing wealth.

A fair share is based on what we need as a county to pay for the wars and corona virus. Poor and middle income people cannot afford to pay more. So that leaves the rich.

For a start we should repeal the last tax cut. And Trump is a liar when he claims $2K went to middle income people. Look it up.

If it's a barrier, then stop using it as a point.

Do you know why the middle class usually gets the tax increases? Because that is where the money is. There is far more money in the middle class than there is in the rich or super rich. And the middle class has far fewer options to restructure their income to avoid the tax.

 

[Leftus]

And you didn't read any of them did you? What's a "fair" trial? What's a "fair" election? Fair is a principal and a process, not a percentage. We could start by restructuring deductions and credits so somebody like Trump wouldn't be able to get away with billions of dollars in outright fraud. And "fair" would start by enforcing the existing tax laws equally, not just against the poorest and most defenseless.

I read them all. You can't put a number or percentage on a fair trial. or elections. But you can put it on taxes, because taxes themselves are numbers. If you are saying that a set of numbers aren't "fair" then you should be able to provide a correct value for that set of numbers. It's how math works.

https://www.propublica.org/article/...s-at-about-the-same-rate-as-the-top-1-percent

So, then it's fair, right? The poor getting the same amount of audits as the rich. Do the poor have the right to cheat the tax system more than the rich?

Keep in mind, when they are talking audit, it's a paper audit. It's providing documentation for your claims. Because it's not small mistakes, it's intentional dishonesty. When you get into big money returns, it's not as easy. So yes, the IRS does focus on the easy cases. But they don't have the right to cheat because other people are cheating.

 

[Giordano]

As a parent I fully understand wanting to set up my children with as much financial security as possible. And I have a gut feelin that I earned and paid taxes on my money already so my “family unit” “owns” this money and deserves to keep it/inherit it with no further penalty. But I also realize that is emotion, not logic.

So in practice I favor a steeply progressive inheritance tax. My children should inherit a reasonably solid amount of money to provide security but not an indulgent amount. What would that look like? Not sure but certainly should begin to kick in significantly at the one million level per child.

 

[Giordano]

I read them all. You can't put a number or percentage on a fair trial. or elections. But you can put it on taxes, because taxes themselves are numbers. If you are saying that a set of numbers aren't "fair" then you should be able to provide a correct value for that set of numbers. It's how math works.



So, then it's fair, right? The poor getting the same amount of audits as the rich. Do the poor have the right to cheat the tax system more than the rich?

Keep in mind, when they are talking audit, it's a paper audit. It's providing documentation for your claims. Because it's not small mistakes, it's intentional dishonesty. When you get into big money returns, it's not as easy. So yes, the IRS does focus on the easy cases. But they don't have the right to cheat because other people are cheating.

Morally it should be the same, rich or poor. But currently the poor are audited more often than the rich.

Is your argument that the more complex a taxpayer can make their audit the more right they have to cheat the system? In fact making their tax statement complicated may be a sign of intent to cheat.

But I’m not certain that your logic doesn’t fail at a much more basic level. The payback when auditing the rich is probably much more than auditing the poor, paying back the extra time involved. The IRS agents are experts: they know what to look for. I’m not certain how much more effort is required.

 

[The Don]

As a parent I fully understand wanting to set up my children with as much financial security as possible. And I have a gut feelin that I earned and paid taxes on my money already so my “family unit” “owns” this money and deserves to keep it/inherit it with no further penalty. But I also realize that is emotion, not logic.

So in practice I favor a steeply progressive inheritance tax. My children should inherit a reasonably solid amount of money to provide security but not an indulgent amount. What would that look like? Not sure but certainly should begin to kick in significantly at the one million level per child.

I held similar views to you a few years ago, but Darat has managed to convince me otherwise. I just inherited a significant, but not life changing, amount of money from my late parents. The thing is that I'm in my mid-50s and haven't been a dependant for well over 30 years.

Due to the UK's inheritance tax laws, I didn't have to pay a penny in inheritance tax. If I had to pay tax on it as if it was a capital gain, I would have paid a six-figure sum. I don't think that would have been unreasonable.

 

[Gulliver Foyle]

If it's a barrier, then stop using it as a point.

Do you know why the middle class usually gets the tax increases? Because that is where the money is. There is far more money in the middle class than there is in the rich or super rich. And the middle class has far fewer options to restructure their income to avoid the tax.

Are you kidding me? As has been posted up thread 50% of all wealth in the US is held by 3 people hold more wealth than the bottom 50% of the country (see below for correction by Firestone). According to Pew Research (here) 52% of all income is given to the top 20% of earners in the US, the top 5% get 23% (a full quarter) of the income. The middle class (the 20-40% & the 40-60%) share c20-25% between them (admittedly from eyeballing the graph, but I bet I'm not far wrong).

You're either so divorced from reality that you can't even see it or you're deliberately lying here.

I held similar views to you a few years ago, but Darat has managed to convince me otherwise. I just inherited a significant, but not life changing, amount of money from my late parents. The thing is that I'm in my mid-50s and haven't been a dependant for well over 30 years.

Due to the UK's inheritance tax laws, I didn't have to pay a penny in inheritance tax. If I had to pay tax on it as if it was a capital gain, I would have paid a six-figure sum. I don't think that would have been unreasonable.

Capital Acquisitions Tax (inheritances and gifts) works differently in Ireland, if I were to inherit in the morning from my parents, the maximum I could get before paying 33% is €335,000 (threshold is cumulative with any gifts they may have given me as an adult, e.g. €10000 toward a house deposit), if I inherited or received a gift from my aunt or grandparent the threshold is €32,500 (as above threshold is cumulative), or if my friend won the lotto and wanted to give me a bit it's €16,250. These all seem reasonable, high enough that the tax won't kill me if I inherited a reasonably sized house from my parents yet not too high that I'd avoid paying tax altogether.

 

[Firestone]

As has been posted up thread 50% of all wealth in the US is held by 3 people.

Nitpick: shouldn't that be that The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country ?

Most dramatically, it found that the country’s three richest individuals—Bill Gates, Warren Buffett and Jeff Bezos—collectively hold more wealth than the bottom 50% of the domestic population, “a total of 160 million people or 63 million American households.” Roughly a fifth of Americans “have zero or negative net worth,” the authors wrote.

(That's from 2017, probably even worse today.)

 

[Aridas]

Are you kidding me? As has been posted up thread 50% of all wealth in the US is held by 3 people. According to Pew Research (here) 52% of all income is given to the top 20% of earners in the US, the top 5% get 23% (a full quarter) of the income. The middle class (the 20-40% & the 40-60%) share c20-25% between them (admittedly from eyeballing the graph, but I bet I'm not far wrong).

You're either so divorced from reality that you can't even see it or you're deliberately lying here.



Capital Acquisitions Tax (inheritances and gifts) works differently in Ireland, if I were to inherit in the morning from my parents, the maximum I could get before paying 33% is €335,000 (threshold is cumulative with any gifts they may have given me as an adult, e.g. €10000 toward a house deposit), if I inherited or received a gift from my aunt or grandparent the threshold is €32,500 (as above threshold is cumulative), or if my friend won the lotto and wanted to give me a bit it's €16,250. These all seem reasonable, high enough that the tax won't kill me if I inherited a reasonably sized house from my parents yet not too high that I'd avoid paying tax altogether.

Nitpick: shouldn't that be that The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country ?



(That's from 2017, probably even worse today.)

Also of note - income is not the same as wealth. Because I'm going to poke at the wikipedia article, I'm going to cite what they list as the distinction -

There is an important distinction between income and wealth. Income refers to a flow of money over time, commonly in the form of a wage or salary; wealth is a collection of assets owned, minus liabilities. In essence, income is what people receive through work, retirement, or social welfare whereas wealth is what people own.[47] While the two are related, income inequality alone is insufficient for understanding economic inequality for two reasons:

1. It does not accurately reflect an individual's economic position
2. Income does not portray the severity of financial inequality in the United States.

To poke further at wealth...

U.S. Federal Reserve data indicates that from 1989 to 2020, U.S. net worth became increasingly concentrated with the top 1% and top 10% wealthiest, due in large part to corporate stock ownership concentration in those segments of the population; the bottom 50% have little if any corporate stock.[7] Just prior to President Barack Obama’s 2014 State of the Union Address, media[8] reported that the wealthiest 1% of Americans possess 40% of the nation's wealth; the bottom 80% own 7%.[9] The gap between the wealth of the top 10% and that of the middle class is over 1,000%; that increases another 1,000% for the top 1%. The average employee "needs to work more than a month to earn what the CEO earns in one hour."[10]

The highlighted is of particular note on the topic of where the wealth is between the most wealthy and the middle class.

Also of great note, though...

A September 2017 study by the Federal Reserve reported that the top 1% owned 38.5% of the country's wealth in 2016.[35]

According to a June 2017 report by the Boston Consulting Group, around 70% of the nation's wealth will be in the hands of millionaires and billionaires by 2021.[36]

A 2019 study by economists Emmanuel Saez and Gabriel Zucman found that the average effective tax rate paid by the richest 400 families (0.003%) in the US was 23 percent, more than a percentage point lower than the 24.2 percent paid by the bottom half of American households.[37][38] The Urban-Brookings Tax Policy Center found that the bottom 20 percent of earners pay an average 2.9 percent effective income tax rate federally, while the richest 1 percent paid an effective 29.6 percent tax rate and the top 0.01 percent paid an effective 30.6 percent tax rate.[39] In 2019, the Institute on Taxation and Economic Policy found that when state and federal taxes are taken into account, however, the poorest 20 percent pay an effective 20.2 percent rate while the top 1 percent pay an effective 33.7 percent rate.[40]

Using Federal Reserve data, the Washington Center for Equitable Growth reported in August 2019 that: "Looking at the cumulative growth of wealth disaggregated by group, we see that the bottom 50 percent of wealth owners experienced no net wealth growth since 1989. At the other end of the spectrum, the top 1 percent have seen their wealth grow by almost 300 percent since 1989. Although cumulative wealth growth was relatively similar among all wealth groups through the 1990s, the top 1 percent and bottom 50 percent diverged around 2000."[41]

According to an analysis of Survey of Consumer Finances data from 2019 by the People's Policy Project, 79% of the country's wealth is owned by millionaires and billionaires.[42][43]

And that last number is before the massively rich favoring mess that 2020's been.

 

[Gulliver Foyle]

Nitpick: shouldn't that be that The 3 Richest Americans Hold More Wealth Than Bottom 50% Of The Country ?



(That's from 2017, probably even worse today.)

Oops, thanks for the correction.

 

[Aridas]

Just to actually address this, now that I've chipped in more -

I read them all. You can't put a number or percentage on a fair trial. or elections. But you can put it on taxes, because taxes themselves are numbers. If you are saying that a set of numbers aren't "fair" then you should be able to provide a correct value for that set of numbers. It's how math works.

No.

Just no.

More specifically, what you're apparently doing is demanding that specific, but generally applicable, numbers be provided for something that will generally be quite variable depending on the much larger and more complex context (which very much depends on the larger community needs and efficiencies) - and that's even without underlying value/goal disputes.

You can do the math for particular situations only when the situations are sufficiently defined. That's also an important part of how math works.

 

[Skeptic Ginger]

If it's a barrier, then stop using it as a point.

Responding to a point is me using the point?

Do you know why the middle class usually gets the tax increases? Because that is where the money is. There is far more money in the middle class than there is in the rich or super rich. And the middle class has far fewer options to restructure their income to avoid the tax.

Yeah, I've heard that crap excuse too.

The best one was GW claiming a tax on the rich would do no good because they'd just find a loophole.

Ending the loopholes didn't cross his mind.


Fact: wealth is shifting to the billionaires. It is not "new wealth" they created. That's another excuse for not increasing taxes on the rich.

How about we just start by taking back Trump/McConnell tax cuts? Then we might look at taking back GW's tax cuts.

Both of those were implemented before major spending was required.

 

[Skeptic Ginger]

As a parent I fully understand wanting to set up my children with as much financial security as possible. And I have a gut feelin that I earned and paid taxes on my money already so my “family unit” “owns” this money and deserves to keep it/inherit it with no further penalty. But I also realize that is emotion, not logic.

So in practice I favor a steeply progressive inheritance tax. My children should inherit a reasonably solid amount of money to provide security but not an indulgent amount. What would that look like? Not sure but certainly should begin to kick in significantly at the one million level per child.

How much of that wealth is in untaxed capital gains? It looks like you understand though there with the bolded above.

 

[lomiller]

As a parent I fully understand wanting to set up my children with as much financial security as possible. And I have a gut feelin that I earned and paid taxes on my money already so my “family unit” “owns” this money and deserves to keep it/inherit it with no further penalty. But I also realize that is emotion, not logic.

So in practice I favor a steeply progressive inheritance tax. My children should inherit a reasonably solid amount of money to provide security but not an indulgent amount. What would that look like? Not sure but certainly should begin to kick in significantly at the one million level per child.

Imo the “double tax” argument has merit. IOW if you have already paid income tax on money you can pass the remainder on to your children tax free.

The complication with the ultra rich is that most of their wealth in in the form of assets/investments, so they have never paid income tax on it and probably haven’t even paid capital gain tax on it. The simple solution is to charge the estate capital gains based on the current value of the assets. Once the original earnings have been taxed the remainder can be passed on tax free much like other post tax earnings can be. Maybe you can add an exemption for primary residence so the average person doesn’t need to pay capital gains to inherit the family home.

 

[lomiller]

Also of note - income is not the same as wealth. Because I'm going to poke at the wikipedia article, I'm going to cite what they list as the distinction -



To poke further at wealth...



The highlighted is of particular note on the topic of where the wealth is between the most wealthy and the middle class.

Also of great note, though...



And that last number is before the massively rich favoring mess that 2020's been.

Taxing wealth isn’t practical. The problem is that to pay that text the owner would need to sell off part of their assets, but if everyone is selling off assets to pay taxes it will drive the value of the assets down because there would be far more sellers than buyers. This in turn means they would need to sell even more assets, which would drive down asset prices even further.

Ultimately the whole market freezes up and the financial system crumbles. A wealth tax runs the risk of viable profitable business shutting down simply because the owner can’t pay the tax on the assessed value of that business and can’t find any buyers for the business because no one has the cash to buy it because they have their own taxes to pay.

This is analogous to what happened with financial markets in 2007/2008. No one was quite sure what mortgage backed securities were really worth so people were selling them, which caused their price to drop and forced even more of them onto the market. Eventually you were lucky to get pennies on their real dollar for them.

 

[Bob001]

Imo the “double tax” argument has merit. IOW if you have already paid income tax on money you can pass the remainder on to your children tax free.
....

Why? You pay tax on your income. When you transfer your after-tax money to someone else by paying them for goods or services, they pay income tax. When you buy groceries at Safeway, the company pays income tax on the money you give them, and it pays its employees and suppliers, who pay their own income taxes. In most circumstances transferring your money to someone else incurs a tax. Call it the circle of life. Why should inheritances be different? That question particularly applies when the value of an asset has been allowed to grow tax-free for years, even decades, without paying any income or capital gains tax. Why should that huge increase in value be transferred tax-free? Why shouldn't their estate or their heirs at least pay the capital gains taxes that would be due if the deceased himself had sold it during his lifetime?

This is how wealth becomes increasingly concentrated, when it can be held forever and transferred untaxed.

 

[Bob001]

Taxing wealth isn’t practical.
.....

Why? Surely it depends on the size of the tax. Sen. Warren has proposed a wealth tax of two percent on holdings above $50 million. Over any long period of time, the stock market has provided average returns of 10 percent. Do you really think somebody with $50 million would be shattered by a tax of $1 million? That's less than three months of investment returns. And that's just an example. Suppose it was one percent of holdings above $10 million. That would be a hundred grand: the price of two luxury cars. I suspect they could handle it.
https://elizabethwarren.com/plans/ultra-millionaire-tax

By comparison, Warren Buffett has supported even higher rates.
https://www.forbes.com/sites/carter...e-taxes-gates-buffett-bloomberg/#243cdb4f7792

Our current tax code gives tremendous advantages to capital over labor. A wealth tax would be one way to restore some balance without rewriting the entire tax code.