If the Democrats just had some balls...

[Dreadnaught]

Dread, assets aren't taxed until they're put into some sort of action. Then it becomes a transaction, and most transactions are either taxed, or credited from taxes. You know that.

I understand your "morality" and intent issue, but you're not doing a very good job at justifying either. According to your presentation, the fortunes of the "robber barons" should have been passed onto their legal heirs, tax free? Money makes money, and money buys power, keep the legacies intact? (Never mind that their fortunes were gained by exploiting both the worker and our legislature. Is that old history yet?)

Let's be honest here. Americans who inherit assets have a leg-up on everyone else. Old Money is treated differently from Nouveau Riche. But WHY?

First and second generation workers and savers are being hurt by current monetary and fiscal policy. Being thrifty has turned into retirees using a spousal refusal, just to afford long-term aged care. When the tide goes out, how many people do you really want swimming without trunks?

Ummm, yes assets are taxed by an estate tax. That's the point. You're forced to realize gains/losses on assets to pay the tax.

I've never said there should be no corporate, dividend or income taxes. I've said that I disagree with the rates, loopholes, etc.

But now you're getting into this ugly re-distributionist populism gambit. As if the existence of some wealthy dude out there is detrimental to you and me. And that you and I should get something from someone who saves an arbitrarily high number and wants to pass that money on to their kids. That inheritance alone is a sin. Maybe this is a religious thing, but I don't believe in that kind of original sin.

And can we please stop just inserting random things we both read in the New York Times into the discussion? It not irrelevant.

[GGT]

If the Democrats had some balls.....the "Obamacare" bill would have included a Public Option.

In fact, if we had a Public Option, we could scale down Medicare and Medicaid. Over time, with a Public Option, we might be able to dismantle Medicare and Medicaid. Even retract tax payer subsidies for those programs. If the private insurance industry is going to move along, acting as a monopoly in its own interest, why shouldn't they have some competition? Why shouldn't the consumer have an alternative?

Really, if we don't break up the Insurance Industry monopoly because some say it's against Freee Market principles, then what's so bad about opening that same Freee Market with a Public Option?

[Dreadnaught]

*Facepalm* Alright, I've said my piece. No need to walk into a wall of ranting talking points that aren't relevant to what we're discussing. Good talk though.

[GGT]

*Facepalm* Alright, I've said my piece. No need to walk into a wall of ranting talking points that aren't relevant to what we're discussing. Good talk though.

Now don't fade away into the night, just because I tried to bring the thread back to its origins. Like I said earlier, you have some balls turning the discussion into Death taxes, when that's the least of our problems. It's been a "good talk" for a couple of pages, but we're nowhere close to addressing foundational issues, let alone how to fix them.

(Plus, you must have posted while I was typing)

But now you're getting into this ugly re-distributionist populism gambit. As if the existence of some wealthy dude out there is detrimental to you and me. And that you and I should get something from someone who saves an arbitrarily high number and wants to pass that money on to their kids. That inheritance alone is a sin. Maybe this is a religious thing, but I don't believe in that kind of original sin.

Hey, stop that. You're the one who brought up morality and odious "sins" for taxing people transferring their wealth. And you're the first to mention religiosity in this thread. Should I ask you if that's because you're a Jew?

[GGT]

Obviously, religiosity has nothing to do with it. Unless, of course, our god-idol is making money for purely selfish reasons. (Image of greedy person getting a hard-on stroking their pile of coins. Insert cackling laugh. Or "Precious".....)

My grandparents on both sides are dead now, but I was around to watch the process of death and estate transactions, including their remarriages. I've also buried both my (divorced) parents. That's six burials and six estates to sort out, even more counting their second marriages. I've also been through the divorce process with minor children. I've buried a beloved mother-in-law, and my only Uncle recently. My ex-husband is preparing to marry a divorced woman with her own children and grandchildren. Yeah, I'm going to ask that he re-do his Will so our kids can be a priority if/when he dies, but it's not something I can force or enforce.

In the end, passing on financial assets is a double-edged sword, while looking like a grand goal.

It might make me FEEL better as a parent to have this contingency plan upon my untimely death, but the parenting that matters most was done while I was/am alive. Most parents don't die when their kids are very young, not any longer. When my dad died, he left a life insurance policy and a mortgage pay-off policy. I was the beneficiary because I was still young. He was a good planner and knew how and when to change these policies (both my sisters were married or independent at the time).

Having lost my father at a relatively young age led me to plan for my own kids. It also raised my awareness of parents and their kids who may NOT be able to do that. That's when society and/or government needs to step in, step up to the plate. I want my tax dollars to do that. I expect my tax dollars to do that. Go ahead and redistribute my wealth, tax the hell out of me, so as long as it comes with a redistribution of my values: education, community, compassion. See every young child as your own baby, and every elderly geezer as your own Mom or Dad.

[Being]

Dread, if your parents bequeath their wealth to someone outside your family (not a charity), should that person be taxed for the income received?

[GGT]

Several of you seem to be acting as if I am against taxation whatsoever, which is far from the case. You're also acting as if these kinds of taxes actually raise a lot of revenue, which is also far from the case.

My position is that this tax is immoral, because I think it's immoral to tax assets. And that it's immoral to tax someone's savings that they intend to give to their children. It doesn't matter the amount or the exemptions, I find the concept to be odious.

A few points:

1) For the record I mostly support progressive income taxes. But this tax puts progressivism in the wrong place by taxing savers and threatens to destroy intergenerational capital appreciation. A society that can't look forward to building up assets over time turns the money side of life into a zero-sum game.

2) A reasonable tax code should encourage savings, thrift and helping the next generation through gifts, investments, etc. It shouldn't leave people with the option of blowing out their cash on an obnoxious lifestyle to die broke or seeing their hard-earned money disappear into a government black hole.

3) The idea that the wealth one accumulates over time should be "returned" to society via government confiscation is frankly bonkers. Someone's savings and assets have already been taxed as income when they made it. Taking it away after they die is senseless. The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

Quoting for new page reference.

He said it's Immoral to tax assets. Shouldn't matter whose assets, it's just Immoral.

Also Immoral to tax savings. Would it matter who the recipient of that savings is? He said the amount and exemptions don't matter, so why should the beneficiary matter? He finds the whole thing ODIOUS.

1) Ah, liberalism's fault is.....failing to recognize special people?

2) Right-o. It's those damn taxes that keeps us from saving? Or is it those damn kids, that next ungrateful and spoilt generation for whom you've blown your gifts?

3) You're right, the wealth I inherited has already been taxed. Some of that was CONFISCATED to help others less fortunate. Pretty sure my grandparents and parents had no objections to that. In fact, they expected that. As do I. I know full well that when I die, my Estate will provide for my children plus some others. I can't name them all, but the tax money will find its way like water follows gravity.

The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

Re-write: The main goal of life is feeding your children and giving them something to build their lives from. By giving some tax dollars to the government, you're also helping others outside your family unit. It's called Community.

[Aimless]

okay just what the hell is going on in this thread???

[RandBlade]

Income, corporate and sales taxes should suffice.

But this is income. Why again is taxing unearned income worse than taxing earned income?

[GGT]

okay just what the hell is going on in this thread???

The US is in the process of voting on tax policy, with a lame duck congress, before the end of the calendar year.

Dread chose the inheritance tax as his pet peeve.

[GGT]

But this is income. Why again is taxing unearned income worse than taxing earned income?

Income is income. Profit is profit. I've never quite understood our tax policies, to be honest. We tax long term capital gains and dividends at half the rate of labor. Seems backward. I can sit here and make profit without lifting a finger, while workers have to actually do some work. They get taxed for working, but I'm not taxed for NOT working?

The whole system is fucked up.

[RandBlade]

CGT rarely involves 'not working'.

[Hazir]

3) The idea that the wealth one accumulates over time should be "returned" to society via government confiscation is frankly bonkers. Someone's savings and assets have already been taxed as income when they made it. Taking it away after they die is senseless. The main goal of life isn't to feed government, it's feeding your children and giving them something to build their lives from.

So you didn't even bother to read on. The idea is a 100% death tax in stead of other taxation.

Now, your position begs some questions

1. why is it better to tax the activities of the living than the estates of the dead?

2. what besides your sense of entitlement make that you think you have a claim to the estate of your parents ?

3. do you feel in some way that what is their's is actually your's?

4. how do you think your parents would feel if you would tell them that you feel they should manage their estate responsably in order for you to get a bigger inheritance?

5. do you think it would be an immoral act for parents to actually spend all they own before they die?

6. do you think parents who die with a net worth of zero are bad parents?

[agamemnus]

Basically it's a moral issue and I agree with Dread that it's immoral.

[Dreadnaught]

Dread, if your parents bequeath their wealth to someone outside your family (not a charity), should that person be taxed for the income received?

Absolutely.

But this is income. Why again is taxing unearned income worse than taxing earned income?

Because your conception of "earned" is coming from the wrong angle. This is more about the rights of the person who earned the money to leave the entirety of their savings to their family, not really the right of their family to receive money.

And the concept applies to issues beyond death. Over here, parents often contribute significantly to the college education expenses of their children even when they are legally adults. The concept that a parent-to-child donation like this -- or during any stage of life -- should be taxed is odious to me. I'm going to pay for my kids education.

So you didn't even bother to read on. The idea is a 100% death tax in stead of other taxation.

That's actually a worse idea. It means that no one besides corporations can accumulate long-term assets. It would also roil stock, housing and mortgage markets because people would be forced to sell assets all the time to pay the government taxes whenever someone dies. In countries with age structures like yours, it would lead to a slow acceleration of sell-offs and a pretty rapid degradation of capital stock.

To answer some of your other questions, our estates are actually taxing the dead estates, literally. As in, the recipients of an estate don't get taxed directly. The estate is taxed upon death and the remainder is distributed to the heirs. So someone leaving behind $10 million for her five children doesn't have $2 million packaged for each kid who then pays a tax. The whole $10 million is liquidated, taxed for estate taxes + capital gains, then the remainder is distributed. Given the tax rates it makes a massive difference in the amount of money given the various tax rates.

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange. This is what families do for each other. If my parents somehow aren't able to leave anything to me and my siblings, we would be fully expected to support them in their later years and we wouldn't question that except maybe if our parents were horrible or financially wasteful people. But this whole issue of intergeneration support and wealth transfer isn't an alien concept.

[Nessus]

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange.

You seem to find views contrary to your own incomprehensible; I like the devotion to a cause, but it makes discourse difficult.

[Dreadnaught]

It's not about being difficult, it's about being perplexed. I honestly think almost everyone in the world who has had a child or been a child would find it strange to be so hostile and suspicious of family financial support.

[Hazir]

Absolutely.



Because your conception of "earned" is coming from the wrong angle. This is more about the rights of the person who earned the money to leave the entirety of their savings to their family, not really the right of their family to receive money.

And the concept applies to issues beyond death. Over here, parents often contribute significantly to the college education expenses of their children even when they are legally adults. The concept that a parent-to-child donation like this -- or during any stage of life -- should be taxed is odious to me. I'm going to pay for my kids education.



That's actually a worse idea. It means that no one besides corporations can accumulate long-term assets. It would also roil stock, housing and mortgage markets because people would be forced to sell assets all the time to pay the government taxes whenever someone dies. In countries with age structures like yours, it would lead to a slow acceleration of sell-offs and a pretty rapid degradation of capital stock.

To answer some of your other questions, our estates are actually taxing the dead estates, literally. As in, the recipients of an estate don't get taxed directly. The estate is taxed upon death and the remainder is distributed to the heirs. So someone leaving behind $10 million for her five children doesn't have $2 million packaged for each kid who then pays a tax. The whole $10 million is liquidated, taxed for estate taxes + capital gains, then the remainder is distributed. Given the tax rates it makes a massive difference in the amount of money given the various tax rates.

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange. This is what families do for each other. If my parents somehow aren't able to leave anything to me and my siblings, we would be fully expected to support them in their later years and we wouldn't question that except maybe if our parents were horrible or financially wasteful people. But this whole issue of intergeneration support and wealth transfer isn't an alien concept.

Actually I am shocked about your mental laziness; you are so entrenched in the incumbent situation that you won't consider alternatives. Your 'need to sell' argument is moot if the estate flows into the commonwealth, but what's more important is why is it intrinsically better to tax the living than taxing the dead?

[GGT]

Because your conception of "earned" is coming from the wrong angle. This is more about the rights of the person who earned the money to leave the entirety of their savings to their family, not really the right of their family to receive money.

Transactions are taxable.

And the concept applies to issues beyond death. Over here, parents often contribute significantly to the college education expenses of their children even when they are legally adults. The concept that a parent-to-child donation like this -- or during any stage of life -- should be taxed is odious to me. I'm going to pay for my kids education.

Educational costs can be tax deductible. Donations (gifts) up to ~$15,000 are also tax deductible. Parents get 'preferential' tax treatment from all sorts of deductions and credits for 18-24 years.

To answer some of your other questions, our estates are actually taxing the dead estates, literally. As in, the recipients of an estate don't get taxed directly. The estate is taxed upon death and the remainder is distributed to the heirs. So someone leaving behind $10 million for her five children doesn't have $2 million packaged for each kid who then pays a tax. The whole $10 million is liquidated, taxed for estate taxes + capital gains, then the remainder is distributed. Given the tax rates it makes a massive difference in the amount of money given the various tax rates.

Like I said, the deceased is paying their final year of 'income taxes'. Estates do NOT have to be liquidated before distribution. Some things are deductible, like costs of a CPA and funeral expenses, even donations (like that $1 million gift to a university library). I'm pretty sure even probate court and tax attorney fees are deductible. Penty of ways to reduce the estate tax bill.

I find your deep-seated suspicion of parents and children saving for each other to be...sorta strange. This is what families do for each other. If my parents somehow aren't able to leave anything to me and my siblings, we would be fully expected to support them in their later years and we wouldn't question that except maybe if our parents were horrible or financially wasteful people. But this whole issue of intergeneration support and wealth transfer isn't an alien concept.

Then have your folks see an estate planner or financial advisor, set up a Trust Fund or Revocable Trust for their heirs. You make it sound like people can't leave money or assets to family without the whole thing being taxed to zero, and that's just not true. It would take an effort, but only because our tax code is fubar (and designed for attorneys and accountants).

If this bill is adopted, anything under $5 million will have a ZERO tax. What's your objection to that?

[Dreadnaught]

Actually I am shocked about your mental laziness; you are so entrenched in the incumbent situation that you won't consider alternatives. Your 'need to sell' argument is moot if the estate flows into the commonwealth, but what's more important is why is it intrinsically better to tax the living than taxing the dead?

The "estate flows into the commonwealth"? That's...okay, before I try to address this, could you clarify what that means to you?

[Being]

Dread, if your parents bequeath their wealth to someone outside your family (not a charity), should that person be taxed for the income received?

Absolutely.

How about if your parents leave their wealth to your second cousin? Should your second cousin be taxed for the income received?

[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.

[Flixy]

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.

[Being]

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.

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."

[Lebanese Dragon]

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.

[Dreadnaught]

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.

You'll never have kids? And do you think your parents will leave you nothing?

Well, you admitted the wealth transfer is income to the receiver and should be taxed.

Eh? What are you talking about?

[Flixy]

You'll never have kids? And do you think your parents will leave you nothing?

My parents aren't my cousins though. Neither are my kids.

Anyway, what exactly is close family, and why are close friends excluded? If you're adding exceptions.

[Being]

Eh? What are you talking about?

I'm talking about this recent exchange.

Dread, if your parents bequeath their wealth to someone outside your family (not a charity), should that person be taxed for the income received?

Absolutely.

How about if your parents leave their wealth to your second cousin? Should your second cousin be taxed for the income received?

[GGT]

My parents aren't my cousins though. Neither are my kids.

*Snort*

[Dreadnaught]

My parents aren't my cousins though. Neither are my kids.

Anyway, what exactly is close family, and why are close friends excluded? If you're adding exceptions.

I'm talking about this recent exchange.





How about if your parents leave their wealth to your second cousin? Should your second cousin be taxed for the income received?

Both of you don't seem to be understanding the concept of immediate family, which is generally a pretty simple concept.

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.