Upcoming US Elections

[PsychoPompos]

Ron Paul

considering his  views still leave too much room for state intervention in private life, id prefer a more libertarian canidate over his strait constitutionalist views.
but he is definitely the best canidate out there.
between the charismatic one, the scum-bad lawyer (team), a panderer, a bi-polar flipper and the crazed old man i have to agree, we are screwed

but at least he takes a step in the right direction

[Brugdor]

Oh btw, if you happen to be voting for a Democrat in the primaries your vote no longer means anything. Yay for our political system! 

http://www.openleft.com/showDiary.do?diaryId=3633

[Solwyn]

So I looked into it, researching all the candidates, and still I'm not sure how I feel about the next election.

Ron Paul will not be elected. A lot of people claim he's a madman, wanting to disband the IRS and so forth, but just like Hillary everyone knows 80% of his programs will die once they get to the middle-ground based congressional review boards.

So I looked into Obama, to see if I agree with his stuff. To be honest a lot of his programs make sense, even though they're kind of a compromise between what I believe as a libertarian (not the party but the political alignment) and what authoritarians (populists, if you will) believe.

Financially I'm kind of at odds with him though. I don't have a problem with capital gains tax. People use that as their sole income, and that sucks. I respect guys like Bill Gates and Donald Trump, but they work for a living, they pay income tax. People who sit on the beach and rake in investment money should contribute if we're all paying taxes (yeah I know, libertarian saying anything but ban all taxes, gasp). But I am against the estate tax. I understand the point, but it screws everyone. Not just trust fund kids, but the pizza shop owner who immigrated to America to make something of himself, and scrimped and saved every penny for his kids. He dies suddenly and now the kids have nothing (or maybe 10% of nothing).

Anyone have any issue-related thoughts?

[Brugdor]

Anyone have any issue-related thoughts?

I would just agree that the estate tax is wrong and I would go so far as to say that it's just plain evil greed on the part of our government. This is a tax on something that has already been taxed the entire time it has existed for no other reason than that ownership is going to change hands.

[Hoopy Frood]

I've got no problem with the estate tax. It helps prevent legacy money. Why are grown children entitled to handouts from their parents?

As one of Warren Buffet's daughters once said when someone asked if she was angry that her father was planning on donating his entire life fortune to charity:

[paraphrase]
My father paid for my entire college education. He gave me a wonderful resource to go out and make something of myself by myself. Why would I resent him for that?
[/paraphrase]

Sorry, your kids are not entitled to what you make. I find it interesting that Republicans seem to rail against government handouts, but have no problem when those handouts are going to their own legacy, which is essentially what a repeal of the estate tax would be. You want to avoid it the estate tax? Donate your money to a tax-exempt charity.

The "taxed twice" thing is a dishonest argument. Every time money changes hands it gets taxed. Sales tax, capital gains tax, yadda, yadda, yadda. Heck, the government even taxes social security and work-study and other forms of income that come from the government itself.

[Brugdor]

I've got no problem with the estate tax. It helps prevent legacy money. Why are grown children entitled to handouts from their parents?

The American dream, let me show you it.

Sorry, your kids are not entitled to what you make. I find it interesting that Republicans seem to rail against government handouts, but have no problem when those handouts are going to their own legacy, which is essentially what a repeal of the estate tax would be. You want to avoid it the estate tax? Donate your money to a tax-exempt charity.

Surely you see the difference between being forced at gunpoint to give a hand out to those the government deems to be "less fortunate" as opposed to your own children or someone else of your choice?

[BlueCross]

I've got no problem with the estate tax. It helps prevent legacy money. Why are grown children entitled to handouts from their parents?

As one of Warren Buffet's daughters once said when someone asked if she was angry that her father was planning on donating his entire life fortune to charity:

[paraphrase]
My father paid for my entire college education. He gave me a wonderful resource to go out and make something of myself by myself. Why would I resent him for that?
[/paraphrase]

Sorry, your kids are not entitled to what you make. I find it interesting that Republicans seem to rail against government handouts, but have no problem when those handouts are going to their own legacy, which is essentially what a repeal of the estate tax would be. You want to avoid it the estate tax? Donate your money to a tax-exempt charity.

The "taxed twice" thing is a dishonest argument. Every time money changes hands it gets taxed. Sales tax, capital gains tax, yadda, yadda, yadda. Heck, the government even taxes social security and work-study and other forms of income that come from the government itself.

How is it a question of entitlement?  What if parents WANT to give their money to their children.   I give money to a charity and it is not taxed but if I give it to my children, it is taxed?  How does that make any sense?

And your Social Security is only taxed if your total income is above a certain level.  If your only income is from Social Security, it will not be taxed.

[Hoopy Frood]

How is it a question of entitlement?  What if parents WANT to give their money to their children.   I give money to a charity and it is not taxed but if I give it to my children, it is taxed?  How does that make any sense?

And your Social Security is only taxed if your total income is above a certain level.  If your only income is from Social Security, it will not be taxed.

Even if your income isn't from social security it only gets taxed if it's above a certain level.

And if parents want to give money to their children they can start doing it now tax free. You can give $12,000 per recipient per year to as many people as you like. That means a married couple can give away $48,000 to another married couple. Of course, there is a $1 million lifetime cap on how much you can give to any one individual, but then again, the estate tax doesn't even kick in until $2 million, and only effects the estate that is in excess of that 2 million. So if you have 2 kids, and you want to split your estate evenly,  you can essentially give them each $2 million dollars in their lifetimes that the federal government can't touch.

If you're kids can't be happy getting a full share of 4 million from your estate and a lion's share of the rest, when they did nothing to warrant receipt of that money other than to be born lucky, well that seems rather spoiled to me.

It's like Disney corporation extending copyrights for 125 years just so they can keep raking in the Mickey cash cow long after old Walt has been worm food. The U.S. was founded on the principles of getting rid of oligarchy.

After all, it was largely oligarchy that resulted in the current occupant of the Oval office.

[Solwyn]

After all, it was largely oligarchy that resulted in the current occupant of the Oval office.

Granted. But let's be fair: the economic setup in the US is such that a vast majority of people are in the middle class. The Lower Middle Class and the Working Middle Class (as they call it) make up more than 60% of the nation. The "capitalist" class to which the person you mentioned make up less than 1% of the population. Let's throw "upper middle class" in with the middle class and we have about 75% of the population. That means any people (including probably 100% of the people reading this forum from the states) should not leave any money to their children, because the amount they'll leave (and given our class, will probably be less than 1 million dollars) will be taxed anywhere from 40-60% depending on the way in which the estate is handled.

I think that's BS. My great-grandfather immigrated here from Germany with four cents to his name (he jumped ship from a merchant marine vessel... they weren't going to get paid until they landed back in Amsterdam) and no education. He got two doctorates and had over a hundred patents in his name, and never worked less than 65 hours a week (if you included all the tinkering he did with his inventions). He NEVER made it past middle class. He was "slightly upper" middle class when he retired. When he died, all of his patents and royalties were immediately seized as estate ownings and my grandmother didn't get barely any of it, let alone my great grandmother who outlived him by a good 18 years. They've made do, but the "legacy" of my great-granfather was just this: don't work hard to provide for your family, because they won't reap any benefits from it (but the government will be glad to pass down your debts to your children, so make sure you take care of those).

[Hoopy Frood]

That means any people (including probably 100% of the people reading this forum from the states) should not leave any money to their children, because the amount they'll leave (and given our class, will probably be less than 1 million dollars) will be taxed anywhere from 40-60% depending on the way in which the estate is handled.

No it won't. If you have less than 1 million dollars to leave to your heirs, there will be no estate tax. (It doesn't start until $2 million currently.)

The 40-60 doesn't kick in until after the exemption, and then only on the money above the exemption.

Granted, when it wasn't adjusting for inflation, it was hitting solidly in the middle class ($600,000 is easy to have by the time you die these days), but now that it adjusts for inflation, it pretty much only hits the rich.

[Solwyn]

Okay fair enough I had the numbers wrong.. here's how it stands right now...

For amounts over $10,000 but not over $20,000, the tentative tax is $1,800 plus 20% of the excess over $10,000.

For amounts over $20,000 but not over $40,000, the tentative tax is $3,800 plus 22% of the excess over $20,000.

For amounts over $40,000 but not over $60,000, the tentative tax is $8,200 plus 24% of the excess over $40,000.

For amounts over $60,000 but not over $80,000, the tentative tax is $13,000 plus 26% of the excess over $60,000.

For amounts over $80,000 but not over $100,000, the tentative tax is $18,200 plus 28% of the excess over $80,000.

For amounts over $100,000 but not over $150,000, the tentative tax is $23,800 plus 30% of the excess over $100,000.

For amounts over $150,000 but not over $250,000, the tentative tax is $38,800 plus 32% of the excess over $150,000.

For amounts over $250,000 but not over $500,000, the tentative tax is $70,800 plus 34% of the excess over $250,000.

For amounts over $500,000 but not over $750,000, the tentative tax is $155,800 plus 37% of the excess over $500,000.

For amounts over $750,000 but not over $1,000,000, the tentative tax is $248,300 plus 39% of the excess over $750,000.

For amounts over $1,000,000 but not over $1,250,000, the tentative tax is $345,800 plus 41% of the excess over $1,000,000.

For amounts over $1,250,000 but not over $1,500,000, the tentative tax is $448,300 plus 43% of the excess over $1,250,000.

For amounts over $1,500,000, the tentative tax is $555,800 plus 45% of the excess over $1,500,000.

So it's a different area of tax, as anything under the current amount is exempted from an additional tax, but the tentative tax is still the standard deduction, which is what I have a problem with. But either way, I think this makes it a disincentive for pretty much any form of savings that you intend to pass down. Sure there are ways around it (start a trust fund for college and ensure the board knows that your children get first dibs) but in America the assumption has become that any money you make goes to the government, and therefore the poor. Some people would argue this leads to a Robin Hood system, which they assume is edging us closer to socialism. I don't really agree with that, I think it's more of an issue of the message this sends to the populace... "don't save up money to give to your family in the event of your death, blow all of your money on a bigscreen TV to stimulate the economy!" Which inevitably (despite post-911 ideals to the contrary) puts the average Joe in a bad place because they live on the debt system.

The other issue I have with Estate Tax is that it has a huge compliance cost. As evidenced by this report, the compliance burden costs can become equal to the revenue brought in. To me it seems like no matter how much you like the ideal of the estate tax, you have to believe that it's merely punitive at this point. That money isn't going to anyone who "needs" it, it's getting spent on trying to collect that money, five times the cost per dollar of revenue than FICA, which makes it one of the most inefficient taxes out there.

I think it's a waste. Just my 2c. My libertarian streak wants to burn down the IRS and dance on the ashes but I realize that's far from realistic these days. I just think the "liberal" (read authoritarian) idea of redistribution of wealth is not helpful to the economy. I just figure as long as we're paying taxes, make everyone pay taxes, but don't discourage people to save money. It seems like the government just wants everyone to quit their jobs and invest, which would cause our entire system to crumble, because there'd be no labor in which to invest any more.

Maybe someday America will be a 100% commercial nation, but until then we need to at least shift the tax burden to something that doesn't convince people that getting a raise is stupid.

[BlueCross]

If you're kids can't be happy getting a full share of 4 million from your estate and a lion's share of the rest, when they did nothing to warrant receipt of that money other than to be born lucky, well that seems rather spoiled to me.

So what? 

You want to tax people because they are spoiled?  Because you don't like them?  Because you think they are privileged? 

For the record, my parents were dirt poor and when they died, it was a negative cash flow for me.  When I go to the Big Vestibule in the sky, I would like my daughter to have everything we have; the government want to penalize her because I died?

There's a reason a great many people are against the estate tax; it don't make no fucking sense!

[Hoopy Frood]

Solwyn, assuming your tables are correct you are not taking the exemption into consideration. The rates you are calculating are based on the income after the exemption. It's not 10,000 that's taxed at $1800, it's $2,010,000 that's taxed at $1800.

At $3,500,000, the tax then becomes $555,800.

And BC, I'm not looking at taxing people because they are spoiled or anything like that. I grew up dirt poor as well and am going to have a pretty significant estate by the time I retire. However, if/when I have kids they are going to already have plenty of opportunities I never had. However, at the same time, I'm not planning on leaving them a huge estate for the simple reason that I got to where I was through dilligence alone. I never borrowed money from my folks (and I have no estate coming to me when they die). My children can make their way in the world, just as I made mine. Living in the country they live in, and having a father with good money management already puts them head and shoulders above the vast majority of the world populace. Personally, barring some extenuating circumstances, if they can't turn that into success, then screw 'em.

[Brugdor]

Personally, barring some extenuating circumstances, if they can't turn that into success, then screw 'em.

Great attitude to have towards your kids and I bet it changes when you actually have them.

And yeah, the extenuating circumstances you mention, that's my life right now. Not actually dying so I can't get any government help at all, too sick to work a full time job with any consistency, but luckily with parents that don't feel the same way you do.

And just to be absolutely clear about it, I'd be dead if it wasn't for my parents because I would have ended up on the street for lack of work after my savings ran out. Street = no power for the CPAP = dead dwarf.

[Solwyn]

Solwyn, assuming your tables are correct you are not taking the exemption into consideration. The rates you are calculating are based on the income after the exemption. It's not 10,000 that's taxed at $1800, it's $2,010,000 that's taxed at $1800.

Right on, yeah it's a little confusing. My bad.
But it's still taxed as a "gift," and there's another table for that but screw it you all get the point.

My major concern is that our government spends as much time money and effort as it does to collect this tax, when other more legitimate and less contested taxes are out there.

I worked harder than I've ever worked this last year, and if I'm calculating right, I owe the government an additional 500 dollars. I'm in the lowest or second to lowest tax bracket (I can't remember which) and yet I still owe more than the huge percentage of money I paid.

*starts eyeballing the box of matches*