Quote:
Originally Posted by Being
How about if your parents leave their wealth to your second cousin? Should your second cousin be taxed for the income received?Quote:
Originally Posted by Dreadnaught
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Quote:
Originally Posted by Being
How about if your parents leave their wealth to your second cousin? Should your second cousin be taxed for the income received?Quote:
Originally Posted by Dreadnaught
I didn't answer because I'm not sure where you're going with this. Immediate family is probably a reasonable standard if we can agree on what that actually means.
Why family though? I mean, I am a lot closer to my friends than to my second cousin. I don't think I'd be able to name my second cousins, let alone recognize them on the street.Quote:
Originally Posted by Dreadnaught
Well, you admitted the wealth transfer is income to the receiver and should be taxed. The only reason I can think of for not taxing it if it is given to immediate family would be to give immediate family leverage over the giver. "Look mom, if you give it to your lover's daughter half of it will go to the government. If you give it to me, the government won't get a penny."Quote:
Originally Posted by Dreadnaught
Taxes are a complicated mess, and to some degrree neccessarily so. In some ways it's nice to seperate out different taxes, like a land tax, so we know what is paying for what, or why the tax is needed and why that amount is needed. If we just did a consumption tax, let's say, eventually all those taxes will be bundled in their somehow, and probably the percent tax for consumption would vary area to area because of that. I agree with some taxes, I don't think I like Gift Tax, some people made the argument, RB did, that it's like getting paid for a job, it's still income, except now your job description is do nothing, and here is your massive pay. It's just a job where the # of tasks/amout of time worked is 0, and the money is some non-zero amount. In that sense, it woudln't escape the tax law, though it should be taxed at the same rate by that argument, as a job is. Eitherway, I don't like it whether or not I can articulate a good counter argument, I think it's flawed to tax a gift, the only reason I see for a gift tax is that it prevents the following loop hole: "I'll give you 10 hours of work" and you can give me "100 dollars" it was a gift both ways, so no tax, we can't have companies be doing that.
It is crazy when you think about how often the money is taxed, it's taxed when you get it, it's taxed when you give it to your employees, and the same money is taxed again when they spend it.
If I think about why I don't like gift taxes it's because essentailly, this is an item I own, and if I kept it there would be no tax, but because I'm giving this item away to someone else, the government wants to tax the transaction. Even though there is no practical difference between me having it, and having it be untaxed, and them having it.
Edit: On the original topic, I'm pretty sure Obama is doing this to show the republican he's "compromising", which he is, in hopes of passing other bills.
Some free thought/rambling on taxes below: (I'm not sure if i agree with myself).
I do like the idea of income tax, or at least I wouldn't mind doing it this way. Once a business makes a profit, tax that a lot, then just pay out the money (The income) to people untaxed. Probably work out similarly, to our current system, which I like.. i like the progressive tax system.
You'll never have kids? And do you think your parents will leave you nothing?Quote:
Originally Posted by Flixy
Eh? What are you talking about?Quote:
Originally Posted by Being
My parents aren't my cousins though. Neither are my kids.Quote:
Originally Posted by Dreadnaught
Anyway, what exactly is close family, and why are close friends excluded? If you're adding exceptions.
I'm talking about this recent exchange.Quote:
Originally Posted by Dreadnaught
Quote:
Originally Posted by Being
How about if your parents leave their wealth to your second cousin? Should your second cousin be taxed for the income received?Quote:
Originally Posted by Dreadnaught
:haha: *Snort*Quote:
Originally Posted by Flixy
Quote:
Originally Posted by Flixy
Both of you don't seem to be understanding the concept of immediate family, which is generally a pretty simple concept. :confused:Quote:
Originally Posted by Being
It's even legally defined in some places, with some variations. And obviously the definition has to be hammered down in the locality of taxation. But allowing tax-free exchanges between immediate family is entirely reasonable.
I think they understand, Dread. You're being asked to explain why children should be treated differently than any other heir.....
Yeah Dread, why should your second cousin pay tax just because your mother didn't feel you were worthy of her fortune?
http://www.marketwatch.com/story/fiv...8?pagenumber=1Quote:
Some years ago, a net worth of around $3 million to $3.5 million was considered the wealthiest 1% of the population, according to Martin Shenkman, an attorney and CPA who practices in New York City and Teaneck, N.J.
In a report on the tax compromise, written for Steve Leimberg’s Estate Planning Newsletter, Shenkman said: “A $5 million threshold would thus mean far less than 1% of the families would be effected. If in 2009, with a $3.5 million exclusion, only about 16,000 decedents filed a federal estate tax return, a $5 million exclusion should reduce the number to a miniscule figure.”
$5 million exemption for individuals, $10 million for married couples.
Dread, you should probably fret over NY state death taxes, not federal. And I still don't see why immediate family should get special status over any other heir.
Dread, why should the state discriminate based upon closeness of kin? It is the parent's choice who to leave their estate to and if they don't choose their children should that be "punished"?
I don't think the estate tax should exist at all because it's an asset tax that forces liquidations. But if it's going to happen at least immediate family should be exempted. When we're talking about immediate family, giving money to your kids is clearly nothing like any normal taxable transaction. If there were any reasonable justification for that basis, we would be willingly filing tax forms about all the parental support children get above the age of 18 when they go to college, get living expenses, live at home rent-free...
That's your reason? There are ways to protect against 'liquidations'.Quote:
Originally Posted by Dreadnaught
Why? It's the deceased assets. Why should it matter to whom it's willed?Quote:
But if it's going to happen at least immediate family should be exempted.
We can itemize support for dependents, deduct educational costs, medical care, orthodontia, etc. Kids attending college are dependents, too. What's your complaint again?Quote:
When we're talking about immediate family, giving money to your kids is clearly nothing like any normal taxable transaction. If there were any reasonable justification for that basis, we would be willingly filing tax forms about all the parental support children get above the age of 18 when they go to college, get living expenses, live at home rent-free...
http://www.bloomberg.com/news/2010-1...-tax-free.htmlQuote:
Estate Measure Creates Window to Give Children Up To $10 Million Tax-Free
By Margaret Collins - Dec 14, 2010
Families would be able to make tax- free gifts to their children or others of as much as $10 million, an increase from the current limit of $2 million, under the tax-cut bill Congress is debating this week.
Beginning in 2011, an individual U.S. taxpayer’s lifetime gift-tax exclusion will jump to $5 million, up from $1 million currently, according to the legislation. Gifts from living parents allow taxpayers to transfer assets such as cash, stocks or shares of a business to their kids and let the value grow outside of the couple’s estate, said Jim Cundiff, an estate planning attorney with McDermott Will & Emery, who’s based in Chicago. Unifying the estate and gift tax exemptions is one of the biggest benefits in the measure, he said.
“You could transfer $10 million next year without paying any tax,” Cundiff said. “That’s a big tax-free gift. This benefit evaporates in two years, so take it while you can.” Parents may use trusts to give the money to descendants if they’re concerned about giving a lot of money directly to their children, he said.
Senate leaders released an agreement on Dec. 9 crafted by President Barack Obama and Republicans to keep existing tax rates through 2012 that also included the changes to estate and gift taxes. The bill, which is scheduled for a vote this week, sets a $5 million threshold for an individual or $10 million for a couple for both estate and gift-tax levies, with a top tax rate of 35 percent. The provisions would expire at the end of 2012, according to the legislation.
Giveaway to Wealthy
The lifetime gift-tax exemption has been $1 million since 2002, while the estate-tax threshold increased to $3.5 million in 2009, according to the Joint Committee on Taxation. This year the estate tax disappeared as a result of a phase-out approved in 2001 during the presidency of George W. Bush. The gift-tax exclusion remained at $1 million with transfers above that amount taxed at a 35 percent rate.
Democrats in the House of Representatives may push for changes to the estate-tax provision with a 45 percent top rate on estates and a $3.5 million exemption for each person because of the U.S. budget deficit.
“We just can’t afford that kind of giveaway to the very wealthiest among us,” said Senate Budget Chairman Kent Conrad, a North Dakota Democrat on Bloomberg Television’s “Political Capital with Al Hunt” on Dec. 10.
Delay Gifts
The estate tax will return Jan. 1 at a top rate of 55 percent and a $1 million threshold, unless Congress acts. That’s why planners spent much of this year preparing wealthy clients to make gifts in 2010 while rates were lower, said Linda Hirschson, an estate-tax lawyer at Greenberg Traurig LLP in New York.
If the estate and gift tax exemption ultimately are set as high as $5 million in 2011 and 2012, families looking to transfer wealth before they die will likely hold off making gifts this year, Hirschson said. “Using $5 million for everything is really generous,” Hirschson said. “It certainly will increase the gift giving.”
Taxpayers who have already used some of their lifetime gift exclusion will have the amount that can be transferred tax-free under the $5 million exemption reduced, said Cundiff of McDermott Will & Emery.
Annual Gifts
In addition to the lifetime gift-tax exclusion, individuals can continue to give a tax-free gift of $13,000, or $26,000 for a couple, a year for each beneficiary. The amounts are indexed for inflation and remain the same next year, according to the Joint Committee.
The legislation also didn’t restrict some of the wealth- transfer techniques used by estate planners such as grantor- retained annuity trusts, known as GRATs, said Elizabeth Schlueter, head of wealth advisory for New York-based J.P. Morgan Private Wealth Management, whose typical client has between $5 million and $25 million in investable assets. GRATs allow the appreciation of certain assets such as stock to pass to heirs free of estate and gift taxes. The bill, for example, doesn’t set a 10-year minimum term on GRATs as Obama wanted in his 2010 revenue proposals, which may have made them less valuable.
More Certainty
“As of today GRATs continue to be a very strong opportunity for clients,” said Schlueter. “We all have to be a little careful that we don’t make decisions before there’s a little more certainty.”
The tax bill also would extend jobless aid and a number of existing credits subsidizing adoption, higher education and child care. Social Security payroll taxes would be cut by two percentage points for 2011. The legislation would add $858 billion to the federal debt over 10 years, government analysts said.
It means; there are no individual heirs to anybody's estate. The state takes control after a person has died.Quote:
Originally Posted by Dreadnaught
Since you're all so wonderful in rejecting concepts on the basis of details you presume yourself present in the concept; yes I consider regulation necessary in order to provide for spouses. One could imagine a system in which the transfer is deferred untill the spouse passes away too.
By the way; those of you who make this into a moral question; one can seriously doubt if it natural at all to try to plan for the time after one's death.
1) Paying college tuition is not an "income."Quote:
Originally Posted by Dreadnaught
2) Depending on the parental help post college, this probably does frequently violate the tax code. But what kind of sponging kid gets more than the minimum anyway? I didn't get any help after leaving college. Of course, a lot of older folks think that today's college grads are spoiled rotten, and expect swank living quarters when living as a barrista.
3) Allowing somebody to use your property is also not an "income."
Don't worry, at some point some Twat in DC will get it in his/her head that it should be treated as Imputed Income.Quote:
Originally Posted by ']['ear
I'm wondering if Dread et al would also say a person's debt should pass to children after death? Should this automatic family "ownership" we call inheritance go both ways? :hmm:
Apples and Oranges...Quote:
Originally Posted by GGT
Debt it between to private persons.
Taxes are not. (Back taxes are not debt...they are taxes, so any back taxes would be reaped by liquidation)
More of a philosophical question, ideas toward family money issues (not taxes).
Okay, but not what he is talking about...(I think).
I don't believe their should be a death tax...and I'm under the impression that the tax does not raise that much real revenue (I could be wrong) compared to the whole Tax Pie (TM). If this is not going to bring in any substantial revenue no matter the tax rate on dead peoples' stuff then what is the point other to be yet ANOTHER wedge issue for politicians to use and keep us distracted from the fact that they can't govern for shit?
I think this bill will pass, and the estate tax won't be repealed or changed in 2012. Too many would argue it was an unfair advantage to die during a certain time period. And for all intents and purposes, there IS no federal estate tax. Not the way this is written, with exemptions and loopholes. The few thousand people it could affect will create Dynasty Trusts or something fancy like that. That's why it's odd to see people fighting about this "punishing family inheritance". :bulb:
:haha: :mad:Quote:
Originally Posted by Veldan Rath
An interesting point...Quote:
Originally Posted by GGT
Agreed that these aren't identical, but there are parallels. For example, debt is frequently used to create wealth. In general debt and wealth are things that belong to individuals (hence the name "corporation," which means a metaphorical "embodiment"), and the main exception is for marriage.Quote:
Originally Posted by Veldan Rath
So one could argue that if a survivor has a right to inherit everything from a parent, then it is truly everything that is inherited.
{Trying to picture the will that says "to my favorite child I leave all my wealth, and to my despised child I leave all my debt." :haha:}
Yeah, not to get into legalities of contract or property law (or fraud or theft) but the Madoff scam made me wonder about the parallels. His sons and grandchildren are being sued to recoup investors' losses. At first blush it seemed strange to name the grandkids....but then one son committed suicide. His kids are presumably his "heirs", and he made multiple-millions during the Ponzi scheme. Is any of that profit real, even though it's attached to real assets? The whole mess will have to be ironed out in court.Quote:
Originally Posted by ']['ear
You do.Quote:
Originally Posted by Dreadnaught
If you give small amounts of money to anyone it doesn't get taxed, I could give you a $10 note and neither of us would face tax from it. Try transferring large sums of cash without explanation and see what happens. Never heard of Gift Tax? I don't even live in the US but knew about it (my source: Shawshank Redemption ;))
A good example of what I was vaguely thinking of. If somebody makes tons of money with that debt, then kicks off (or is arrested), the profit is out of bounds? Why?Quote:
Originally Posted by GGT
This might as well be the castration thread. Dems are most certainly ball-less.
I'm not sure how you're not seeing the issues with long term capital appreciation and asset values here. If the state just takes over someone's house and assets after they die, what are they going to do with it? They aren't going to just sit on an ever-expanding stock of homes, stocks, bonds, etc. They will want to sell them, which will create an inevitable plunge in asset values. In a country like yours with a changing age stricture, why would anyone buy a house from a private seller if they can get one from the state more desperate to unwind it's ever-expanding supply of empty homes?Quote:
Originally Posted by Hazir
Of course it's taxable income, college kids should pay their fair share to spread the wealth around. The gift tax limit is $13,000/year. Private college tuition alone costs more than that per year. I demand college students be taxed. It's only fair.Quote:
Originally Posted by ']['ear
It's not because they are college students; they are not taxed on that money because they are dependants of the giver. Are you claiming to be someone's dependant?Quote:
Originally Posted by Dreadnaught
How do you figure it's taxable income?Quote:
Originally Posted by Dreadnaught
They are over the age of 18. Getting money from their parents. That's evil and wrong and should be taxed, right?
:haha: Dread, dependents' costs of living and educational expenses aren't considered 'Gifts' or income that way. They're deductibles and reduce parents' income taxes, even if they're 25 year old grad students. (That was part of the new health insurance rules, too. Keeping a dependent over age 18 on a family policy, and deducting the cost.)
And those GRATs don't have a transfer or gift limit....so you're really complaining about a non-issue when it comes to taxing wealth transfers. :bulb:
this is brilliant way to get billions dollars of sneakily unpaid corporate taxes
These ingrate 19 year olds can't live on their own without daddy? I mean, what parent actually wants to support their kids or pass anything onto them. Make those kids work dammit. Tax everything their parents give them over the age of 18.Quote:
Originally Posted by GGT
I don't follow. :confused:Quote:
Originally Posted by Aimless
This is a profoundly wrong way of looking at taxation and I am very disappointed you have succumbed to this level of Palinist thinking.Quote:
Originally Posted by Dreadnaught
He's using sarcasm to stand firm, that family wealth should be tax-free transferrable to kids, regardless of their age. I think. He's totally ignored the facts about basically a ZERO federal estate tax. :rolleyes:
No, don't stoop to his level. Do not attempt to bargain with an outspokenly pitiable person.
For whatever reason, he has chosen as his creed a steady faith in the freedom of markets and the goodness of men. He sees taxation and government as evils, as punishment levied on the weary working man because Lucifer himself came down from the mountain to prey on the American Man.
It is not out of evil and malice that we levy taxes, it is out of compassion and care. We as a society must all contribute to help those with the least means to help themselves. He has chosen to see that help as a punishment upon himself, and for that attitude he should be found despicable and inhumane.
Once again, I'm not opposed to the concept of taxation. But I see asset taxes and the taxation of children as highly improper and pitiable.