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Author Topic: Democrats at least pretend to have a spine, it's a Christmas miracle!
Lyrhawn
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The big story on CNN and anywhere politics is mentioned is that House Democrats are rejecting Obama's deal with Republicans regarding taxes.

Thus far, they have refused to schedule a vote on the bill, and have voted as a caucus not to support it. Obama remains steadfast that the bill is no longer negotiable, Republicans say they will not negotiate, and Democrats are saying it is currently unacceptable. So who gives way? Normally I'd say the Democrats, easily. They've proven time and again that they'll always lay down without so much as lip service whenever Republicans seriously challenge them on an issue.

And even here, I'd normally say that Democrats are ripe for surrender, but, this is highly uncharacteristic of them to begin with. Now that Pelosi has been given a new lease on life, is she really going to take the ball and run with it? Is this a prelude to Democrats playing minority sniper like the GOP has done so well for the last few years? Will Senate Democrats back them up? Is this all just smoke and mirrors?

I'm actually a little excited. Don't let me down Democrats! At least pretend to care!

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JanitorBlade
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I'm sympathetic to the criticisms of the estate tax, but the exemption for all estates worth over 10 million dollars is ridiculous. If anything, I think the exemption should be for those worth less than 10 million.
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Raymond Arnold
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quote:
the exemption for all estates worth over 10 million dollars...
BWUH!!???
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Lyrhawn
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I'm pretty sure the new exemption is for $5 million. I'm actually perfectly fine with that.

The reason few people in Congress argue about that is largely because of small farms, which can easily be valued at $5 million when equipment, buildings, property and produce are taken into account. Congress frowns upon the Estate Tax destroying family farms.

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BlackBlade
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quote:
Originally posted by Raymond Arnold:
quote:
the exemption for all estates worth over 10 million dollars...
BWUH!!???
I got that aspect wrong. It's less than 5 million.

Link.

"Republicans generally appear supportive of the package, which the White House advisers noted gave them their two main priorities -- an extension of the lower tax rates from the Bush era to everyone, including the wealthiest Americans, and setting a 35 percent estate tax only on inheritances of more than $5 million.

The estate tax is scheduled to be reinstated at a higher rate of 55 percent next year, with the exemption up to $1 million. A bill that passed in the House a year ago set the threshold for the exemption at $3.5 million and the tax rate at 45 percent, while the provision in the tax deal exempts estates up to $5 million and sets a lower rate."

I could have *sworn* I read an article just a few minutes ago that said exemptions for estates over 10 million. But I'm not finding it.

-----

Found it, from the Washington Post,

"Democrats are still angry about what they view as Obama's capitulation to GOP demands to preserve tax cuts for the wealthiest Americans, particularly a deal to exempt estates worth as much as $10 million from a revived inheritance tax."

So it was up to $10 million, not everything over $10 million.

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MrSquicky
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I'd be fine if the Democrats said they would hold the cote up until the Republicans comes forward with actual evidence that letting the over $250k (or especially the $1 million+) cuts expire would hurt the national economy.

As far as I can tell, that's the only thing that would make this a reasonable position, but there's no evidence that I can tell that this would likely be the case.

It should be so bizarre that the GOP have problems with extending the more generous unemployment benefits (which does have evidence that discontinuing it would hurt the recovery) because it's fiscally irresponsible to rack up deficits and then, in the same conversation, refuse to countenance the expiration of these tax cuts because...I don't know, they want bankers to be able to afford that third vacation house. Sadly, this is pretty commonplace.

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MrSquicky
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quote:
Originally posted by Lyrhawn:
I'm pretty sure the new exemption is for $5 million. I'm actually perfectly fine with that.

The reason few people in Congress argue about that is largely because of small farms, which can easily be valued at $5 million when equipment, buildings, property and produce are taken into account. Congress frowns upon the Estate Tax destroying family farms.

But it's pretty easy to exempt family farms. Most estate tax revision proposals have this exemption written into them.
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Lyrhawn
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quote:
Originally posted by MrSquicky:
quote:
Originally posted by Lyrhawn:
I'm pretty sure the new exemption is for $5 million. I'm actually perfectly fine with that.

The reason few people in Congress argue about that is largely because of small farms, which can easily be valued at $5 million when equipment, buildings, property and produce are taken into account. Congress frowns upon the Estate Tax destroying family farms.

But it's pretty easy to exempt family farms. Most estate tax revision proposals have this exemption written into them.
I suspect opponents would argue that the definition of what constitutes either a "small" farm or a "family" farm is where the problem lies.

I'm not really going to argue either side, but as I understand it, those are the arguments used. I recognize that it might largely be a smokescreen to have the cap at the level it's at, but, that's where the lip service goes.

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Juxtapose
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Lyrhawn, I'd be interested to hear what you think about this article.

It argues that liberals are selling short how much Obama was able to negotiate for in this deal.

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Stephan
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Estate tax is theft, no matter what the value is.
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rivka
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Do you consider income tax theft as well?
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Blayne Bradley
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quote:
Originally posted by Stephan:
Estate tax is theft, no matter what the value is.

There is no reason why irresponsible young people should be able to get instantly rich from the hard work of their parents.
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BlackBlade
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quote:
Originally posted by Blayne Bradley:
quote:
Originally posted by Stephan:
Estate tax is theft, no matter what the value is.

There is no reason why irresponsible young people should be able to get instantly rich from the hard work of their parents.
Well the counter argument is that income that has already been taxed in the earning shouldn't be taxed again in the dying.

edit: Not to mention my property is mine to give to whom I wish.

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Geraine
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quote:
Originally posted by BlackBlade:
quote:
Originally posted by Blayne Bradley:
quote:
Originally posted by Stephan:
Estate tax is theft, no matter what the value is.

There is no reason why irresponsible young people should be able to get instantly rich from the hard work of their parents.
Well the counter argument is that income that has already been taxed in the earning shouldn't be taxed again in the dying.

edit: Not to mention my property is mine to give to whom I wish.

I share your view. We are taxed on money when we earned it, and taxed again when we buy something. Why should I be taxed for dying?

The government can start taxing me for choosing to die as soon as someone invents affordable immortality for everyone.

Edit: I have horrible spelling

[ December 10, 2010, 11:07 AM: Message edited by: Geraine ]

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fugu13
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You aren't taxed for dying, the people who get the property are taxed for receiving (that is, a certain sort of income). Just as they would be for any other significantly-sized transfer from you. If anything, the inequity is in favor of the dying against the living, because there's a much bigger exemption.

Where's your outrage against the gift tax?

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Juxtapose
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It's not like taxes are levied against specific dollar bills, and once that bill has been taxed it's exempt from all further taxes forever and ever amen. "Double taxation" is a bizarre way of looking at the situation that has been invented, as near as I can tell, specifically to generate outrage against the estate tax.
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Raymond Arnold
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What baffles me is the notion that the Estate Tax can be removed, without the money then having to come from somewhere else.

If you remove the tax on dying, then instead the money would come from taxing the living. And I, for one, would FAR rather have my money taxed at the end of my life when I've had plenty of time to prepare and won't personally be needing it any more.

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Stephan
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quote:
Originally posted by rivka:
Do you consider income tax theft as well?

No, and I would be fine with one or the other. In fact I would be perfectly happy if the government took 100% of my estate when I died if it meant not paying a dime while I lived.

Both is wrong.

If I manage to create $10 million dollars through my hard work, it has already been taxed. Income tax, property tax, interest tax, and capital gain tax.

Taking half when I die after already having taken all of the above is immoral.

My heirs would continue to pay interest tax, capital gain tax, and property tax on the estate anyways.

Comparing it to the gift tax? I don't know. Without the gift tax it would be much easier to cheat on your taxes. So I can understand that.

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rivka
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quote:
Originally posted by Stephan:
If I manage to create $10 million dollars

You have done no such thing. You have caused that money to be transferred to you, almost certainly by methods involving things the government provides (roads and other physical infrastructures, safety provided by the police, etc.) You have not "created" money. The banks you keep that money in are insured by the FDIC (guess what the "F" is for?).

You are taxed when you transfer money. How is it any different if you transfer it at your death instead of before? (Except that, as fugu pointed out, you are taxed LESS if it's at your death?)

Raymond's point is also an excellent one.

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Mucus
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I think fugu's point about the gift tax is worth emphasizing. The US discourages people avoiding the estate tax by imposing a gift tax, the two are pragmatically linked (whereas Canada simply lacks the two and uses other mechanisms to make up the difference).
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JanitorBlade
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Geraine: In the interest of full disclosure I was responding to Blayne. I myself am not opposed to an estate tax in principle.
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Lyrhawn
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quote:
Originally posted by Juxtapose:
Lyrhawn, I'd be interested to hear what you think about this article.

It argues that liberals are selling short how much Obama was able to negotiate for in this deal.

I have a lot of competing thoughts on this.

1. Do I like the content of the deal? For the most part sure. Lots of great stuff in there. Lots of meaningful and helpful stuff that even with the stupid tax break for the wealthy, I'd probably be okay with as an intellectual exercise devoid of circumstance.

2. I do have a problem with the content, however. Most of the arguments that went into this bill revolved around the economy. This thing is going to cost almost as much as Obama's stimulus plan cost, but is anyone seriously arguing that it's going to have a greater or even equal impact? That leads me to...

3. I'm not mad at Democrats for the deal, I'm mad because of the packaging, because of the message. Republicans hammered away at a single point relating to lower taxes for the wealthy: it helps the economy. But no one has furnished proof that this is true. Meanwhile they were willing to let jobless benefits, which DO help the economy, expire as a way to leverage tax breaks for the wealthy. It's about forcing the debate on its merits. Democrats had so much going for them! Republicans are ready to sign off on a massive eight or nine hundred BILLION dollars tax deal after railing against out of control spending? Democrats spent the last couple months saying compromise, and Republicans so we will not negotiate!

There was a far more fundamental battle at play here that was never fought because instead of compromising by spending less and/or taxing more, we simply let everyone have what they wanted and dramatically increased spending! That's not a solution! That's punting in the worst possible way!

And Democrats never really even got off the ground! They never presented their side of the story. They never called Republicans on it, not in the way you have to to get your message across. Obama hasn't barnstormed the nation to talk about why HIS ideas are the RIGHT ideas. I appreciate his aloof tendency to really think about things, but at some point you have to fire up the troops and force the issue. Force the issue! This was a winnable issue and they gave it away. It's not about this fight, it's about the NEXT fight. It's about not being too chicken shit to actually present your ideas to the American people, STICK TO THEM, and then see what the public actually thinks. They haven't done that in YEARS. They continually hem and haw, and retreat from their beliefs because they're afraid of how they will be portrayed instead of PORTRAYING THEMSELVES without letting someone else define them.

I'm sick of the Democratic identity crisis. I'm sick of it because I want someone to challenge Republicans. I'm sick of it because liberal ideas aren't just being demonized, a lot of them are, I think, necessary to fixing the nation but they never seriously get considered because their champions are weak-kneed losers afraid of their own shadow.

So, do I think it's a good deal? Sure. Whatever. A six year old could have negotiated that if he had carte blanche with the federal budget. It's irresponsible, and signals that Open Season on Democrats will continue. And that Open Season started when Democrats were in power!

/rant

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Lyrhawn
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quote:
Originally posted by rivka:
quote:
Originally posted by Stephan:
If I manage to create $10 million dollars

You have done no such thing. You have caused that money to be transferred to you, almost certainly by methods involving things the government provides (roads and other physical infrastructures, safety provided by the police, etc.) You have not "created" money. The banks you keep that money in are insured by the FDIC (guess what the "F" is for?).

You are taxed when you transfer money. How is it any different if you transfer it at your death instead of before? (Except that, as fugu pointed out, you are taxed LESS if it's at your death?)

Raymond's point is also an excellent one.

Yeah but, aren't most of those things paid for in other ways? I mean, we have a gas tax that is ostensibly there to pay for road infrastructure. We have income taxes to pay for other government services. I don't really see why there needs to be a gift tax or an estate tax. And if we're going to have one, I really don't think they should be even as stringent as they are.

If I work my whole life, and instead of frittering my money away, I manage to build up some serious nest egg for my family, why can't they have all of it? Isn't a serious founding principle of the nation the idea of generational advancement? That you might have grown up poor, but your kids will graduate high school and get a good job, and their kids will go to college, and slowly a family builds wealth over time? The Estate Tax seems to run counter to that. And the Gift Tax strikes me as silly as well. It's my money, why can't I give it to whom I please without penalty?

I guess at the end of the day, I'd probably still support the Estate Tax, but, my rule probably would have something like a 5-10 million exemption, and anything over that might fall into a 10% tax, but nothing so harsh as a third.

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fugu13
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quote:
I don't really see why there needs to be a gift tax or an estate tax.
A few reasons. One, to prevent people from avoiding taxes too easily. Another, to make the income and other taxes lower. By taxing people at a point where the fewest people are relying on the income (when it is being gifted, or when the person who had been relying on it is dead), that's less money that needs to be raised through other, typically much less conveniently targeted, taxes.

The estate tax is also an extremely successful method for encouraging support for non-profit efforts.

quote:
It's my money, why can't I give it to whom I please without penalty?
I understand the sentiment, but it is a silly one for anyone who accepts the existence of any taxes. Every tax someone pays (including indirectly) takes away some of 'your money', preventing you from doing something you please with it.
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SoaPiNuReYe
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quote:
Originally posted by Stephan:
quote:
Originally posted by rivka:
Do you consider income tax theft as well?

No, and I would be fine with one or the other. In fact I would be perfectly happy if the government took 100% of my estate when I died if it meant not paying a dime while I lived.

Both is wrong.

If I manage to create $10 million dollars through my hard work, it has already been taxed. Income tax, property tax, interest tax, and capital gain tax.

Taking half when I die after already having taken all of the above is immoral.

My heirs would continue to pay interest tax, capital gain tax, and property tax on the estate anyways.

Comparing it to the gift tax? I don't know. Without the gift tax it would be much easier to cheat on your taxes. So I can understand that.

You do realize that this tax affects on the top 3/10ths of 1 percent of the US population right?
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Mucus
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quote:
Originally posted by Lyrhawn:
... Isn't a serious founding principle of the nation the idea of generational advancement?

From the outside, it seems to me that you could argue the reverse (in the sense that the estate tax is consistent with that principle). A few years back**, one could say that Canada, maybe being based on the British system, not having an estate tax allows for the class differences to intensify over time as wealth builds up and concentrates in the aristocracy. Where as in the US, you can work hard to provide* for your children and the egalitarian nature of the system allows your children to have a shot at moving up.

*In the sense of providing education and values that lead to success, not the money that comes from success.

** Arguably less relevant now

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Lyrhawn
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quote:
I understand the sentiment, but it is a silly one for anyone who accepts the existence of any taxes. Every tax someone pays (including indirectly) takes away some of 'your money', preventing you from doing something you please with it.
Still strikes me as a little silly. Most taxes at least have a veneer of purpose behind them. As I mentioned earlier, gas taxes for driving infrastructure. Makes perfect sense to me. I'm down with that. Payroll tax, makes perfect sense, might as well take it out there, and then use it for government services, okay. But a tax on me giving my money to someone else? I don't see the purpose behind it. Or, if we're going to have it, and specifically if we're going to have it as a way to stop people from trying to skip out on other taxes (which actually, I AM perfectly okay with), then I think the exemption should be a lot higher than what it is. My brother and I both graduate undergrad this year. What if my parents wanted to give us each a car for graduation? They have to pay tax on their income, sales tax on the cars, and then a gift tax to give them over to us?

I'm sorry but I don't see the point. Just raise taxes in general.

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rivka
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Your parents (two people) could give you and your brother each a car with fair market value of up to $26,000 without paying gift tax on a penny.

And if your parents have $52,000 extra to throw around, excuse me for thinking some of that should go to taxes, instead of increasing the tax burden on some poor schmoe who barely makes that much a year.

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Mucus
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If you're looking for a veneer of purpose, isn't that to handicap the generational transfer of wealth? Granted, I don't think there's necessarily a reason to provide a "veneer of purpose"* for this tax or this tax as long as it works out pragmatically.

* In the sense of this pot of taxation is intended to fund this purpose

But if you require a veneer, that seems good enough.

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Lyrhawn
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quote:
Originally posted by rivka:
Your parents (two people) could give you and your brother each a car with fair market value of up to $26,000 without paying gift tax on a penny.

And if your parents have $52,000 extra to throw around, excuse me for thinking some of that should go to taxes, instead of increasing the tax burden on some poor schmoe who barely makes that much a year.

God I wish. It was a hypothetical. And last I checked, the gift tax exemption maxed out at $13K, or I suppose $26K for a married couple (which my parents are not). And the tax is upon the giver, not the receiver, so it's not like it could be split between my brother and I. So, if they did give us both a $26K car, they'd be double the limit.

Keeping with the hypothetical though, why? I mean, if my parents really did have that kind of money, wouldn't they have already been paying much higher taxes than the poor schmoe? If that's what this is about, then raise the income tax on the rich guy to start with. I'm not against the wealthy paying higher taxes, I'm actually all for it. This particular form of taxation though, with such a low exemption rate, really annoys me though. Why not charge an Idle Tax for letting your money sit too long in the bank? It's silly.

You know I jokingly suggested to my mom a couple weeks ago that when I graduate, she should buy out the lease on her Ford Focus and give it to me. I haven't seen her laugh that hard in awhile. Then I suggested that maybe she could just buy me a little of it, like, from the trunk back. Then she as less amused because she thought I was serious. Oh well, I bought the first car, no reason why I can't buy the second one.

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rivka
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Your parents are two people. If they jointly give you a car, the max would be $26,000.

And actually, because of how the tax laws work, the very rich (who income is likely to come front interest, disbursements from corporations, and other things that are not taxed the same way a salary is) are often not paying all that high an actual tax rate.

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Lyrhawn
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Yeah, but if they gave us EACH a $26,000 car, that'd be $52,000, and thus over the limit.

My bigger problem is with the exemption than the law itself. I don't think it's a particularly good tax, but whatever, I'm fine with it I guess. I just think $13,000 is too low a cutoff.

quote:
And actually, because of how the tax laws work, the very rich (who income is likely to come front interest, disbursements from corporations, and other things that are not taxed the same way a salary is) are often not paying all that high an actual tax rate.
Yeah this is a pet peeve of mine as well. I don't see why they can't just refine the tax code to cut out the loopholes that have them paying such a lower rate and then lower their taxes to at the very least make it revenue neutral but perfectly understandable. I remember Warren Buffet one time saying that because of loopholes, his secretary paid a higher tax rate than he did.
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rivka
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quote:
Originally posted by Lyrhawn:
Yeah, but if they gave us EACH a $26,000 car, that'd be $52,000, and thus over the limit.

Nope. Each of your parents can give as many people as they like a $13,000 gift each year. IRS link

And it's not a question of "refining the tax code" -- the loopholes exist as they do for (for the most part) fairly good reasons. Removing them would have OTHER consequences that I suspect you actually might not like.

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Dan_Frank
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quote:
Originally posted by rivka:
quote:
Originally posted by Stephan:
If I manage to create $10 million dollars

You have done no such thing. You have caused that money to be transferred to you, almost certainly by methods involving things the government provides (roads and other physical infrastructures, safety provided by the police, etc.) You have not "created" money. The banks you keep that money in are insured by the FDIC (guess what the "F" is for?).

Assuming Stephan doesn't work for the Fed, you're technically correct that he did not "create" dollars in a literal sense.

But he certainly created 10 million dollars of wealth.

PS: Stephan, can I borrow a couple hundred grand? I promise I'll pay you back soon, man. You won't even notice it's gone.

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Lyrhawn
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rivka -

Huh, I was under the impression that the limit was upon the donater, rather than the person donated to. I guess that's a little better.

And from what I've read, though I've never gone line by line through the tax code, much of what allows them to pay less consists of provisions written into the tax code specifically to dodge income tax, rather than a nice bonus that came as a result of useful provisions. I've also been given to understand that simplifying the tax code would eliminate many of these provisions and would likely reduce their tax rate, but not the tax burden.

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rivka
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quote:
Originally posted by Lyrhawn:
Huh, I was under the impression that the limit was upon the donater, rather than the person donated to.

The limit is on neither the donor nor the donee. It's on specific donor-donee transfers. You can also get as many $13,000 gifts per year as you like, as long as each is from a different person.

And I'm all for a true simplification of the tax code. But that means a complete overhaul, NOT removing individual elements.

I nominate fugu to come up with a good, workable tax code. [Wink]

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AvidReader
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quote:
Originally posted by Lyrhawn:
I remember Warren Buffet one time saying that because of loopholes, his secretary paid a higher tax rate than he did.

But isn't, say 5% on $1,000,000 still way more than 10% on $50,000? At some point, I think we have to ask how much of the very rich's money we feel entitled to give back to others. Cause I've seen the way my friends spend on stupid things. Warren would just get it back anyway.

Now, the evil bankers who took massive bonuses with tax payer funds and slashed their workforces and lending while illegally foreclosing on people's homes? Forget taxes. Just confiscate their stuff and start over.

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fugu13
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quote:
I nominate fugu to come up with a good, workable tax code.
So long as it can be politically dead on arrival, been there, done that, got the t-shirt (well, the exact levels of tax would need to be fine-tuned, but that's mostly a statistical exercise). Sadly, political viability seems to be some sort of strange requirement . . . [Wink]
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The Rabbit
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quote:
Originally posted by BlackBlade:
quote:
Originally posted by Blayne Bradley:
quote:
Originally posted by Stephan:
Estate tax is theft, no matter what the value is.

There is no reason why irresponsible young people should be able to get instantly rich from the hard work of their parents.
Well the counter argument is that income that has already been taxed in the earning shouldn't be taxed again in the dying.

edit: Not to mention my property is mine to give to whom I wish.

A very large portion of inheritance includes moneys that have never been taxed like appreciated stocks, appreciated real estate and so on.

I think the family farm issue is a deliberate deception. Last time I checked, a family farm is only taxable if it is sold. Placing the family farm or business in a trust can usually make it exempt from an estate tax.

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Rakeesh
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quote:
If I manage to create $10 million dollars through my hard work, it has already been taxed. Income tax, property tax, interest tax, and capital gain tax.
Pretty much what rivka said. You didn't create that $10mil in a vacuum, first of all. So let's just dispense with this notion that it's wrong for someone besides yourself to get a piece of that right from the bat. Politically speaking, I think that's one of the most harmful, incorrect ideas that actually gets brought to the table in mainstream political discussion regularly: the idea that any taxation is by definition immoral. It's fine to not like it, I mean come on we're talking about money here, but let's be reasonable.

---------

quote:
But he certainly created 10 million dollars of wealth.
And, again, no he didn't. Or at least, not alone. That's what rivka's point was. Others are entitled to some of it-that's simply a moral fact, Dan. The only reasonable point of discussion is, "How much?"

---------

As for estate taxes, there are some very real sociological motivations for doing something to mitigate the ease of transference of enormous sums of wealth down family lines, unless we want to make plutocracy more attainable. Then there's the consideration that even with the estate tax as-is, it's not exactly difficult for those affected by it to pass on their wealth to their children.

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Wussy Actor
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(Lurker comes out of hiding.)

My problem is that the Democrats have decided to find their spine when it plays right into the Republicans hands. They should have done this two months ago when the Republicans came out and admitted that they were blocking all other bills until the tax cut was passed. That was the time to band together and make the case that it was all about protecting the very rich and nothing else. Doing it now is counterproductive. Now the Repubs can say, “We tried to compromise, even Obama is on our side, but those whiny Congressional Democrats have to have things their own way.” They have put themselves in a position where the Repubs can very easily paint them as stubborn petulant children when in fact it’s the other way around. Where is the leadership and political savvy? I never thought I would miss Bill Clinton this much.

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Darth_Mauve
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I read this challenge more along this line:

Republicans blackmail Democrats--We will do nothing until tax break deal.

President Obama sits down and within a couple of days a deal is struck.

Now the Republicans start talking about "Oh, well, we'll do the deal but there isn't time for anything else so you still get nothing." or "Now we'll do nothing until our next mandatory legislation is dealt with."

The Democrats, seeing themselves being forced into a losing corner, push back saying "Well then, it looks like since you are backing out of the deal to work on other legislation, we'll just back out of this deal."

Which they could do only because of the cover the Left was giving them about the bad part of the deal.

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Wussy Actor
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Its the timing that drives me crazy. There really isn't time for anything else. And I fault Obama for that. If he was going to cave, he should have caved when there was time to take some advantage of the tiny bit of political capital gained. Now the Repubs get to take credit for making the tax cuts happen and give up nothing they didn't want to give up anyway. If this is the start of the Democrats hardline of opposition that is going to be carried into the new Congress, that's one thing. But it really doesn't come across as that organized or focused. It feels more like taking advantage of one last chance to flip the Republicans the bird.
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Raymond Arnold
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First of all, again, the government has lots of programs it needs or wants to pay for. It needs to pay for them somehow. On top of that the national debt is 13 trillion dollars. Why does an Estate Tax need a "purpose" distinct from the Income Tax? Their purpose is to pay for government programs. If you want to lower one tax, you have to raise the other tax.

If you want to cut spending, fine. You still have a total budget, even if it's $100 billion instead of $500 billion (or whatever the current number is, I'm scared to look it up). You still have a choice of where to tax the money. I would STILL prefer to have as much as practical taxed after I die then why I am living. But I also am a little wary of a government dependent on people dying to get taxes, so yes, I would prefer both.

And on top of ALL of that, I think that stopping generational accumulation of massive wealth is a valuable goal, all by itself. One of the few good buzzwords I've seen the democrats come up with is countering the "Death Tax" moniker with "The Paris Hilton Tax," because that's basically what this.

Starting your life off with millions of dollars that you didn't earn is not beneficial, either to your personal happiness or to the world in general. It lets the wealthy get wealthier and stay wealthier, accumulating increasingly disproportionate power over society. People like to IMAGINE themselves being part of the wealthy side, and they associate the extreme wealth end of the spectrum as the epitome of the American dream, but that comes at the expense of hundreds of other people not achieving theirs.

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Stephan
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Property tax doesn't tax the transfer of anything.
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Orincoro
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quote:
Originally posted by rivka:
Your parents (two people) could give you and your brother each a car with fair market value of up to $26,000 without paying gift tax on a penny.

And if your parents have $52,000 extra to throw around, excuse me for thinking some of that should go to taxes, instead of increasing the tax burden on some poor schmoe who barely makes that much a year.

Your sentiment is right, but taxes in order to be right, need to make sense. Taxing somebody *just because* they can afford to pay the tax is wrong. You need to have a rationale behind the tax that you actually believe is going to be of benefit to the economy or society in some way. This is why, for instance, I don't buy the idea that tax cuts on the rich will stimulate the economy by increasing spending, simply because we know more or less for a fact that it doesn't do that in the way republicans would like it to. But, on the other hand, the argument that gift taxes may stifle spending is more reasonable- $52,000 plus as a gift might not be given at all if it is taxed at too high a rate, whereas tax free gifts have either no adverse impact on spending (neither person would have spend it) or a positive effect on spending (the giver doesn't need it, and the recipient does). And there is no rationale for the tax- what should that tax be paying for? What affect do you actually want to have on the economy by imposing it? Or are you just taking advantage of an opportunity to tax people because they have money?

Income tax is quite different- it pays for the upkeep of a national and state government which regulates business and overseas trade, and many other things like defense- facilitating the ability of private and publicly shared businesses to operate safely and to treat their employees fairly. It could be seen as a sort of service charge- the government tries to maintain the conditions in which business can happen, and they take a piece off the back end of all business dealings- what people get paid to be in business. But after you've already paid that, after you've made your contribution for earning that money, and you are not availing yourself of that system yet again (as you would do with, say, sales or capital gains tax), what rationale is there for taxing your money again? And at such a high rate?

I don't think I'm totally nuts on this either, because for some reason I can accept one form of taxes, even high rates, but the other I find abhorrent. I imagine my father working his whole life to amass a fortune of, say, 5 million dollars which he uses to secure his lifestyle and to secure the lives of his children and grandkids as they start their own lives. That's a great blessing for a family in my opinion, and it was one his own step-father and grandfather bestowed upon him when they died. Now, the idea that the government would take that money, all of which was won by playing by the rules, paying his taxes, his capital gains, his parcel tax, etc, and take a huge chunk out of it... I too simply cannot see the logic in that. I don't see how the government does anything to deserve that money. I will gladly pay my income tax to be assured that the government protects my interests in a million ways, or tries to. But this is beyond the pale- to take such a chunk out of the product of a life's work, seems callous to me.

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Orincoro
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quote:
Originally posted by Raymond Arnold:
First of all, again, the government has lots of programs it needs or wants to pay for. It needs to pay for them somehow. On top of that the national debt is 13 trillion dollars. Why does an Estate Tax need a "purpose" distinct from the Income Tax? Their purpose is to pay for government programs. If you want to lower one tax, you have to raise the other tax.

Or you could just be reasonable and raise the taxes that have a clearly defined rationale for their existence. Like income taxes!
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Raymond Arnold
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How is one tax "clearly defined" and the other tax not? They both exist because the government has programs it needs to pay for and it needs money to pay for them. The rationale is exactly the same.

If you want lower taxes, tell the government which programs to cut.

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rivka
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quote:
Originally posted by Raymond Arnold:
How is one tax "clearly defined" and the other tax not? They both exist because the government has programs it needs to pay for and it needs money to pay for them. The rationale is exactly the same.

Bingo.

Mucus gave a good reason as well.

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Rawrain
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We need to stop giving rich peopel tax breaks, all it does is make them have more money for themselves, sure it's a good thing for buissiness owners, but not all of them are rich either>>> Movie stars, Sports players, lots of people in the government, and much more... and none of them employ ANYONE, besides maybe a butler or maid -.-
-------
Tax cuts should only go toward buisinesses and not people with lots of money.

:D hard to understand me? I'm confused about what I just said.

But from what I know tax cuts for the rich were put there so 'they' (the rich people) would then spend their money on things like buisinesses as employers or consumers what have you... but I honestly think poor people actually contribute more money towards the developement of America than the rich do, expecually those that higher someone to get them EVEN more taxbreaks than fesibly possible....

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