Obama's economic plan - Soak The Rich

[Kevin_Lowe]

Well if facts are unimportant and "let's eat the rich" is the argument then yes it does not matter. I am just disappointed that fellow Americans could be so damned petty and envious of others.

I can see you are a deep thinker who has given this issue a lot of thought.

 

[Texas]

I can see you are a deep thinker who has given this issue a lot of thought.

Yes I have. You may want to try it. Life is not a zero sum game. Just because someone has more than you does not mean that he took something away from you. You could divide the entire wealth of this nation equally and within a decade you would have the same distribution you have today. We are all created equal but human nature always wins in the end. Stop whining and study those that are successful and maybe you could learn how to do it yourself.

 

[Fiona]

http://www.bmj.com/cgi/content/full/335/7629/1080

 

[boloboffin]

It is not a death tax. If everyone paid it, then it would be a death tax.

It is an estate tax. It is a tax paid on a specific transfer of wealth, like the gift tax and and the generation-skipping gift tax. Certain gifts are small enough to not trigger the gift tax (or shall we now call this the Christmas tax?), and likewise certain estates are small enough not to trigger the estate tax.

Whenever money grows or changes hands, it is apt to be taxed. One reason is not more onerous than another. If the burden is undue, that's another story. A progressive tax system works because the burden of a higher rate is lightened by the amount of money still available to the distributees after the tax is paid. Spare me your horror stories. That's why the tax needs to be fixed. It's not why the tax should be eliminated.

 

[Kevin_Lowe]

Yes I have. You may want to try it. Life is not a zero sum game. Just because someone has more than you does not mean that he took something away from you.

Straw man.

You could divide the entire wealth of this nation equally and within a decade you would have the same distribution you have today.

Prove it.

 

[Tricky]

I am just disappointed that fellow Americans could be so damned petty and envious of others.

LOL. Envious? Yes, I guess some poor people are indeed envious of the rich. That's why so many of them play the lottery. And you don't see many rich people who are envious of the poor (except for their tax brackets). Shouldn't that count as being petty too?

No it is not surprising that people want more than they have. It is not surprising that rich people want to be richer. It is human nature, maybe even universal nature, to want more. But big disparates between rich and poor are not healthy for any system. While we need to maintain the mechanisms for hard work and ingenuity to lead to greater reward, we also need to make sure that those rewards don't wind up being so great as to be detrimental to society in general. The poor don't "deserve" to be taken care of, but in the big picture, it is to the best interest of all, even the rich, to see that they are.

 

[Meadmaker]

Geeze. How much should a CEO make? I fully support holding Executive salaries to the performance of the company and its stock price. CEO pay, in my opinion should float with both the profit the company makes along with the value of its stock but to try to tie his salary to a multiple of the "grunts" as you call them would not work since you could lead to a serious wage inflation just so the CEO could get his salary up which would harm the company's ability to compete and also the corps fiduciary requirements to the shareholders.

I know that as an investor, I look at executive compensation as a factor in choosing a stock. If I see a huge CEO compensation, then I know the board is in cahoots with management, and this company is being run for the executives, not the shareholders. I wish more other people got that, but what can you do?

What you can do is put a high tax rate on the people who make gazillions of dollars.

 

[Neally]

Because my donation would be like spitting in the ocean given the trillions of debt. Bill Gates couldn't make a dent.

I'm willing to pay my share as long as others do. Otherwise, I'd rather send it where it might really do some good. Like the Sierra club, Habitat for Humanity, or the local food bank.

The point is, if "others" thought they were also being under taxed they could voluntarily kick in more. Clearly most don't think they are under taxed and most people talk about being over taxed. But that's just half of the equation. The bigger problem is how the money is spent and wasted.

 

[Kestrel]

No. When grandpa dies his estate is then valued on the assets it holds and the appreciated value is treated as a capital gain of the estate by the IRS. The IRS has the first bite at the apple before any of the heirs get theirs. There is no such thing as the ability to die and just pass all assets to a child to avoid capital gains taxes. The same holds true for real property like houses or land. The asset is valued on the date of death and any gains since time of purchase are taxable to the estate. Once grandpa dies that creates a taxable event to his estate. If the heir is his surviving spouse then there are different rules but Uncle Sugar is Johnny on the spot for its cut before non-spousal heirs get their greedy little hands on the money.

When grandpa dies, the gain in value of his assets is not subject to capitol gains taxes as you imply. If grandpa bought a stock for $10k and it's worth $50k on the day he dies, no capitol gains taxes are paid on the $40k gain. If the estate sells the stock, it uses $50k as the basis when calculating gain or loss. If his heirs decided to keep the stock, they use $50 as the basis when they sell it. The same rules apply to other assets such as real estate.

The estate tax is a tax on net value, not income or gain. It doesn't apply if the net value of the estate is less than 1 million, or when the estate passes to a surviving spouse. The tax provides a fair amount of revenue to the government with little social cost.

Taxing large estates is good for our nation in the long run. It takes away some of the advantage of inherited wealth. We don't need a permanent class of rich idlers who haven't worked for generations holding the reigns of power. To be competitive as a nation, we need to foster a meritocracy instead of an aristocracy.

 

[Tailgater]

What I learned from this thread:

1. People who make more than 250k have nothing to complain about.

2. People who make 40k+/- 20k with 2 or more kids should stop breeding.....and complaining about being broke.

 

[The Painter]

I spend money and I pay sales tax.


Simply, when money changes hands, the government takes a slice. That's the way taxes work. To think that changing hands from parents to children should be exempt from this is ridiculous.

The government doesn't take a slice every time money changes hands. That is simply not true. What about states with no sales tax. Sales tax is a state tax not a federal tax.

If changing hands from parents to children being exempt is ridiculous. Why does the spouse get inheritance tax free?

I find it disturbing that some people here would rather give their money to the government and not their children or grandchildren.

 

[Lonewulf]

I find it more disturbing how many can't quite seem to comprehend why people don't think that the main people to stay rich are those that have rich family. It's easier to comprehend when all you inherit from your family are debt, though.

Henry David Thoreau wrote a very eloquent essay speaking out against inheritance; I'd love to find it again and read it through once more...

 

[gdnp]

No. When grandpa dies his estate is then valued on the assets it holds and the appreciated value is treated as a capital gain of the estate by the IRS. The IRS has the first bite at the apple before any of the heirs get theirs. There is no such thing as the ability to die and just pass all assets to a child to avoid capital gains taxes. The same holds true for real property like houses or land. The asset is valued on the date of death and any gains since time of purchase are taxable to the estate. Once grandpa dies that creates a taxable event to his estate. If the heir is his surviving spouse then there are different rules but Uncle Sugar is Johnny on the spot for its cut before non-spousal heirs get their greedy little hands on the money.

Here I think you are mistaken.

Inheritance Tax Basis

The first step used to determine any inheritance tax that might be due is to calculate the fair market value of the entire estate. This would include cash, bank accounts, stocks and bonds, real state, insurance, and similar items of value. The total fair market value of all these items is termed the Gross Estate.

Adjustments to Gross Estate

The next step would be to calculate any adjustments to the gross estate. Typical adjustments include paying-off the remaining balance on a mortgage or the fees associated with settling the estate. This last item might include items such as estate administration fees or payments made to an attorney. Finally, there is also a Marital Deduction that can be taken for property that is left to a surviving spouse.

http://www.money-zine.com/Financial-Planning/Tax-Shelter/Federal-Inheritance-Tax/

no where in this or several similar links I found do I see any mention of having to adjust the estate by paying capital gains taxes on appreciated assets.

 

[gdnp]

If changing hands from parents to children being exempt is ridiculous. Why does the spouse get inheritance tax free?

Well, because people have a problem with kicking a bereaved widow out of the house when her husband dies. And when she dies, which will usually be within a decade or so of her husband, the estate will be taxed at that time.

 

[LawnOven]

Hahaha

This thread is awesome.

 

[gdnp]

Hahaha

This thread is awesome.

with contributions of this quality, how can it not be?

 

[Kevin_Lowe]

I find it disturbing that some people here would rather give their money to the government and not their children or grandchildren.

I'm not sure you can have read Tricky's posts or mine if you are claiming this is what we are saying.

I'd rather live in a society where there were mechanisms to redistribute some wealth back down from the very wealthy to everybody else, because otherwise wealth accumulates at the top end of town which leads to higher levels of crime, depression and whatnot. I can't think of a better way of doing it than taxing unearned windfalls like huge inheritances, can you? Nobody loses a penny they have worked for, and society benefits. That's about as morally and socially sound as a tax can get.

 

[Tricky]

I'd rather live in a society where there were mechanisms to redistribute some wealth back down from the very wealthy to everybody else, because otherwise wealth accumulates at the top end of town which leads to higher levels of crime, depression and whatnot. I can't think of a better way of doing it than taxing unearned windfalls like huge inheritances, can you? Nobody loses a penny they have worked for, and society benefits. That's about as morally and socially sound as a tax can get.

Exactly.

The thing is, extremism is almost always a bad idea. Capitalism without restraints results in plutocracy, but some kind of rewards are necessary or incentive is destroyed. The US has discovered, as most European nations have, that some kinds of socialism are necessary to avoid class warfare. Widespread poverty and it's attendant problems could wreck this nation just as easily as total socialism.

But our system does indeed benefit the wealthy, not just in lifestyle, but in health benefits and really just about any measure you choose, other than tax percentage. And I'm perfectly fine with that. We need incentives. But it is also true that those who reap the most benefits should also be those who have the greatest responsibility for funding this system which is so beneficial to them. What could possibly be more reasonable?

Many very wealthy people, e.g. Gates and Buffett, have come to this conclusion as well, and they give back far and beyond paying very high percentages in tax. I view this as a sign that our country is maturing. That Obama's message is accepted by a large number of people is further evidence.

 

[shuize]

The poor should just work harder.

 

[gdnp]

I'd rather live in a society where there were mechanisms to redistribute some wealth back down from the very wealthy to everybody else, because otherwise wealth accumulates at the top end of town which leads to higher levels of crime, depression and whatnot. I can't think of a better way of doing it than taxing unearned windfalls like huge inheritances, can you? Nobody loses a penny they have worked for, and society benefits. That's about as morally and socially sound as a tax can get.

(who moved the %$%&%$ buttons?)

I agree with Andrew Carnegie, that inherited wealth is a bad idea. I've told my kids that I think it is my responsibility to give them the opportunity to get a good education so that they can earn a decent living. After that, they are on their own. Don't expect Mommy and Daddy to fund you. I'm not saying that I wouldn't help them with the down payment on a house. But if they want a lavish lifestyle they will have to earn it on their own.