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| | #31 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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Each individual has a $2 million exemption from the federal estate tax, which will soon increase to $3.5 million. Also, it's possible to give away substantial amounts during your lifetime, and take other steps to reduce the estate tax. So, with proper planning, only families with substantially more than $4 million (soon to be $7 million) are subject to the federal estate tax. The statistic of 1 to 2% is about right (might be a bit high, actually). In addition, when you die, your assets receive a stepped up basis for income tax purposes, which means that all of your unrealized capital gains escape the capital gains tax forever. Interestingly, the Republican's proposed estate tax "repeal" would have actually increased taxes on families with estates of up to $4 million in order to benefit families with more than $4 million. But, they forgot to mention that when they were trying to justify estate tax repeal. |
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| | #32 (permalink) | |||||||||||
| Senior Member Join Date: Nov 2006 Location: Central MD
Posts: 382
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Please pardon the long-winded reply.... I missed a few posts. Quote:
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I know both sides of this coin. As a kid, family income was around 17,500 a year. Now, it's considerably more. This is due, in part, because now I realize the value of 20 bucks instead of just knowing what a 20 dollar bill was. Mindset. Quote:
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Buffett absolutely DOES care who gets it. That is why he has picked his charities and donated the money now so that there is not much of anything left when he kicks it. I will do the same for my children, and will probibly give away much of my wealth as I have been doing all throughout my career. I do not, however, feel that the government should steal from my children to re-distribute how it sees fit. My wealth distribution should be my choice... same as Buffett. Quote:
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My main point here is that I feel that the government should not be able to dictate how much of my money I can give to my children. | |||||||||||
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| | #33 (permalink) | |
| Senior Member Join Date: Nov 2006 Location: Boulder, Colorado
Posts: 384
| Ever? Quote:
"Because that's where the money is."
__________________ Let me know how I can help you. Amanda Pingel | |
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| | #35 (permalink) | |
| Banned | Quote:
They are talking about capital gains, but an estate tax is a tax on your estate value, your worth, no? The land, property, and everything else was paid for with after-tax dollars. The estate tax taxes "worth" not "income", therefore a lot of the value is being double taxed. | |
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| | #36 (permalink) |
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I ask again... Why should ANYONE be paying an estate tax? Not to mention that people who support these kinds of taxes and the progressive tax code we have now align themselves with the views of Karl Marx. Congratulations to anyone who does; you'd make a great communist. |
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| | #37 (permalink) |
| Senior Member Join Date: Nov 2006
Posts: 311
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"I am playing word games with you; because the government is playing games with us all. Corporations don't pay taxes because they have the power of pricing. Consumers pay taxes, corporations don't." This is similar to the argument that anyone who is getting thier money (civil servants, military, contractors, charity) from the government does not really pay taxes either since they are only RECIEVING tax dollars and do not contribute to the overall tax base. The gov't could give them a slightly lesser amount "tax free" and it would be the same. Stephen Power-Book Library: Free personal development, success, inspiration and motivational classics |
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| | #38 (permalink) | ||
| Moderator Join Date: Nov 2006 Location: Berlin, Germany
Posts: 4,994
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Sure their are reasons that you have your 4 million limit. The purpose of the tax is to tax capital, capital who's ownership is guaranted by the state. States don't need to have laws that probit people to take money from those with a lot of money (and killing them if they resist). But if you have those laws, you need another solution to the problem that rich people inherit their capital and create different classes (that become inherited) in the process. Sure the estate tax isn't high enough to fully accomplish that goal, but it reduces those class differences.
__________________ I am always open for feedback on my posts. If your feedback would go offtopic feel free to send me a Personal Message. My posts generally don't contain medical or legal advice, if you have a problem seek the opinion of an expert Talking about this in terms of “bad news” or “bad judgment by business leaders” seems archaic. It’s like describing World War One as “a serious diplomatic concern.” Bruce Sterling about the financial crisis. | ||
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| | #39 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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KevinG, your style of argumentation is emotional and illogical. Your constant references to Marx and communism are classic examples of Godwin's law. Following are my final responses to those types of arguments: 1. KevinG asserts that our current progressive income tax and estate tax are in aligned with the principles of Marx and communism. Yet, our country has prospered and made amazing advancements since those taxes were enacted in 1916, while communist states have failed. So, the actual historical evidence doesn't support Kevin's emotional arguments. 2. KevinG asserts that anyone who dares disagree with him must be a Marxist and communist. Yet, I'm an strong supporter of a free market economy and private ownership of property for those who've earned it. So again, the actual facts don't support Kevin's arguments. 3. KevinG asserts that our income and estate taxes punish the rich. Yet, study after study shows there is a widening gap in our country between the super rich and everyone else. Once again, the actual evidence doesn't support Kevin's emotional arguments. |
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| | #40 (permalink) | |
| Senior Member Join Date: Nov 2006 Location: Chicago, IL, USA
Posts: 229
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Without a tax, I guess we'd finally have flying cars, and all of the other predictions from the 50s about what life would be like in the year 2000 would have been realized. Oh, and 12,600 out of 295,734,134 Americans is 4e-5. Not as many as people claim? Apparently...
__________________ -- GBGames' Blog: An Indie Game Developer's Somewhat Interesting Thoughts Have a Facebook account? Play Sea Friends and protect real coral reefs while you do! | |
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| | #41 (permalink) | ||
| Senior Member Join Date: Nov 2006 Location: Central MD
Posts: 382
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| | #42 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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It depends on what you mean by "punish." If it's punishment to have to pay taxes, then everyone who pays is being "punished," not just the rich. There seems to be the view that the rich pay much more in taxes than regular people. Let's take a look at a couple of examples, using round numbers: 1. Middle Income Wage Earner with $80,000 Income (not rich) In 2005, the marginal income tax rate applicable to ordinary income of an unmarried individual with taxable income between $53,500 and $115,000 was 28%. In addition, such an individual would bear employment taxes of wabout 15% (employee and employer portions). So, the total tax on this person's income was around 43%. 2. High Income Executive with $1,000,000 Income (rich) In 2005, the marginal income tax rate applicable to ordinary income of an unmarried individual with taxable income above $250,000 was 35%. However, such an individual would bear employment taxes of only 2.9% (employee and employer portions) on wage income over about $90,000. So, for the first $90,000 or so, he would pay tax at a combined marginal rate of around 43%. For amounts over 90,000, he would pay tax at a combined marginal rate of no more than 38%, which is significantly less than the 43% rate paid by the middle income worker. The super-rich taxpayer who does not work for a salary pays a 35% rate on ordinary income and a 15% tax on capital gains and dividend income, which are not subject to employment or self-employment taxes. A husband and wife can make an unlimited amount of money and never pay any gift or estate taxes during their lifetime. If the estate tax applies, it doesn't affect the person who created the wealth, but only reduces the wealth received by heirs, who did nothing to create it. From the heir's perspective, it hardly seems like "punishment" to receive $10 million for doing nothing instead of $20 million for doing nothing. Last edited by Karma Police; 12-03-2006 at 09:29 PM. |
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| | #43 (permalink) |
| Moderator Join Date: Nov 2006 Location: Berlin, Germany
Posts: 4,994
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[quote]. (according to the The CIA World FactBook, 20% are under 15, and I would wager that most of them do not pay taxes.) Lies, Damn Lies, and Statistics. Does the fact that those children pay no taxes makes them no citizen in the US?
__________________ I am always open for feedback on my posts. If your feedback would go offtopic feel free to send me a Personal Message. My posts generally don't contain medical or legal advice, if you have a problem seek the opinion of an expert Talking about this in terms of “bad news” or “bad judgment by business leaders” seems archaic. It’s like describing World War One as “a serious diplomatic concern.” Bruce Sterling about the financial crisis. |
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| | #44 (permalink) | |||
| Senior Member Join Date: Nov 2006 Location: Central MD
Posts: 382
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OR, since the money that I "put in" is used to pay people who are currently retired, and not actually "invested", one could more accurately call it a Ponzi Scheme Quote:
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Brutha: Yes, they are citizens. The "statistic" usually stated is that 2% of estates are subject to the estate tax. You can't count the people that don't die. It's kinda like saying that since 8% of all cars are sold are subject to the gas guzzler tax, then 8% of the entire population pays the gas guzzler tax. No.... the correct would be that 8% of the population that happened to buy a new car had that vehicle subject to the gas guzzler tax. But you could skew the results by saying that only .2% of people who bought a car paid the tax (because of used car sales). Or .003% of the population was subject to the gas guzzler tax last year (because of the entire population, that's how many bought such a vehicle). Statistics are all about what you decide to include or not. ie: Lies, damn lies, and statistics. (note: numbers are whipped out of my butt, and only as an example of how messed statistics are) Last edited by Doku; 12-03-2006 at 11:51 PM. Reason: added ponzi scheme | |||
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| | #46 (permalink) | |
| Member Join Date: Nov 2006
Posts: 44
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It's interesting that many who argue the "poor" shouldn't be rewarded with government payments for doing nothing, will argue that heirs should be rewarded with large inheritances for doing nothing. I can hear Paris H. now, "$30 million, and I have to do nothing but hang out in clubs? That's hot." Why is it so terrible for poor people to be lazy, but not equally terrible for rich heirs to be lazy? | |
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| | #47 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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According to this analysis, the correct statistic appears to be about 1/2 of 1% of estates are subject to the estate tax: 'Death Tax' Repeal Unfair to Those Who Owe 'Birth Tax' |
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| | #49 (permalink) |
| Senior Member Join Date: Nov 2006
Posts: 325
| I completely agree with you on the moral level, but I also think that when someone earned money they have the right to do with it whatever they want. Even spoiling their kids into oblivion. Although gift tax should still apply since inheritance is technically a gift.
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| | #50 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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Doku, I didn't mean to suggest you said that. Just making a theoretical point. Baltar, Society sets limits on what you can do with your money. For example, even though you earned it, you can't finance terrorist activities. (As bad as some children are, I'm definitely not saying giving an inheritance is the same as financing terrorists. |
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| | #51 (permalink) | |
| Senior Member Join Date: Nov 2006 Location: Central MD
Posts: 382
| Quote:
And I would not call that the "correct statistic" as much as the "currently correct statistic" in 2009 when the caps change again, that .5% won't be correct any longer. (lies, damn lies, and statistics) Now, let me ask a question... just so I can get this straight. Your entire argument FOR the estate tax is "lazy ass heirs" ?? and that it's unfair for children of rich parents to be rich? Last edited by Doku; 12-04-2006 at 01:24 AM. Reason: added question | |
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| | #52 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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Here's the thing I thing many of you are losing sight of. Government has to take the money from somebody who doesn't want to give it. That's the nature of ANY tax. Sorry, that's life, and you can only get money from people who have it. So, the question is, "What is the least objectionable kind of tax and who should pay it?" --Poor people who can't afford it? --High income earners who can afford it, but might be less motivated to produce more as the tax rate climbs? --Heirs who, even after application of the estate tax, are going to receive a great deal of money for doing absolutely nothing and who will have an incentive to be more, rather than less, productive? |
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| | #53 (permalink) | |
| Senior Member Join Date: Nov 2006 Location: Central MD
Posts: 382
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| | #56 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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Doku, That's an interesting proposition, which would be fine with me, because I think an estate tax on people who haven't earned the wealth is fairer than high income taxes on those who are earning the income. But there would still be some discrimination. Those who don't inherit any money wouldn't have to pay the tax. |
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| | #58 (permalink) | |
| Senior Member Join Date: Nov 2006 Location: Central MD
Posts: 382
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| | #59 (permalink) | |
| Senior Member Join Date: Nov 2006
Posts: 325
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I think what others have said in this thread is makes a lot of sense. Poor people are poor for a reason, and wealthy people are wealthy for a reason. Wealthy people did something right to get to where they are, and poor people are doing something wrong. Taxing wealthy people more just because they have more money is equivalent to compensating for incompetence of poor people by punishing the success that the wealthy have achieved. Government services apply roughly equally to the wealthy and poor (and the poor actually get more in the forms of Medicaid and Welfare). Wealthy people essentially have to cover the fee that poor people should technically pay for these services. This is happening already by the way, with 96% of federal tax revenue in the US being paid by 50% of the population. The only solution I can provide is to reduce the size of government and increase the amount of private services. This isn't possible for everything, but it certainly is possible for many things. Private industry is always more efficient, cost effective, and eclipses the government in value creation. This reduces the need for taxes in general. Wealthy people can use their money to create privately funded public services, and do a better job at it than the government. So my answer is that the least objectionable kind of tax is no tax at all. | |
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| | #60 (permalink) |
| Member Join Date: Nov 2006
Posts: 44
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Doku, I don't get your last comment. How is applying the estate tax to everyone going full circle to eliminate it? I'm a fairly smart guy, but I'm not following you. Baltar, You said: "Wealthy people did something right to get to where they are, and poor people are doing something wrong. Taxing wealthy people more just because they have more money is equivalent to compensating for incompetence of poor people by punishing the success that the wealthy have achieved." I've been talking about the estate tax, which doesn't tax the "wealthy people" who did something right, it taxes the wealthy people's children who did nothing "right" to generate the wealth that's being passed to them. Are you suggesting that the children of wealthy people are somehow more inherently deserving of having wealth than the children of poor people? Also, I think it's far too simplistic to say that poor people are poor because they are doing something wrong and deserve to be poor. Often, the main thing they've done wrong is being born to the "wrong" nation, neighborhood, or family. Yes, I understand it's possible for someone to be born into poverty, work hard and achieve financial success. But, there are several other factors that come into play, such as intelligence, a supportive family, inherited personality traits, etc. From personal observation, I believe it's much easier for someone of average intelligence to be a "success" if the person is born into an upper middle class family instead of a lower income family. I'm not making excuses for anyone, but I don't think it's fair to "blame" someone for conditions they didn't create. Last edited by Karma Police; 12-04-2006 at 03:14 AM. |
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