Join Early Retirement Today
Reply
 
Thread Tools Search this Thread Display Modes
Old 10-31-2013, 04:11 PM   #61
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,406
The idea of heavy inheritance tax is not new, and has been proposed before, and particularly aimed at the billionaires who could not possibly spend it all. But I gave it some thought, and not being an economist, just want to throw out some ideas for discussion.

Most of the networth of people like Bill Gates is in the stock of their companies. Even if they have diversified out to equities of other companies, it is not a bundle of cash that the goverment can just grab and to redistribute to pay off debts.

So, if the gummint seizes a big chunk of Microsoft or any other large corporation via the shares that these billionaires hold, what does it do with it? Will the gummint take the role of a part-owner and sit on the board of the company to manage it? Even if the gummint can pull that off (by assigning some bureaucrats to become managers of that corporation), it can only get the income from the operation. It will not be the 100s of billion that the asset is worth on paper.

So, you say let's sell it off to turn it into cash. It will have to be spread out over a time period like 6 months or 1 year, to avoid dumping it and causing its value to crash. But who's the buyer? These "poor people" who do not have any money to start with, or other billionaires? But why other billionaires bother to buy anything if it would be taken from them too eventually?

So, will the buyers be mostly foreigners like the Chinese, who are getting richer everyday, and they can get to pass to their children as it is now? So, won't the "poor people" end up working for foreigners?
__________________

__________________
NW-Bound is offline   Reply With Quote
Join the #1 Early Retirement and Financial Independence Forum Today - It's Totally Free!

Are you planning to be financially independent as early as possible so you can live life on your own terms? Discuss successful investing strategies, asset allocation models, tax strategies and other related topics in our online forum community. Our members range from young folks just starting their journey to financial independence, military retirees and even multimillionaires. No matter where you fit in you'll find that Early-Retirement.org is a great community to join. Best of all it's totally FREE!

You are currently viewing our boards as a guest so you have limited access to our community. Please take the time to register and you will gain a lot of great new features including; the ability to participate in discussions, network with our members, see fewer ads, upload photographs, create a retirement blog, send private messages and so much, much more!

Old 10-31-2013, 04:24 PM   #62
Moderator
Ronstar's Avatar
 
Join Date: Aug 2007
Location: A little ways southwest of Chicago
Posts: 9,349
Quote:
Originally Posted by NW-Bound View Post
....And what's this homebrew stuff? Tax them too, for crying out loud. Got to hire more BATF agents to look for these future tax cheaters.
Easy now! I pay tax on all of my homebrew ingredients, except a little bit of wheat I get from the local farmer. Maybe I should have to purchase carbon credits to offset the pollution I caused by brewing with propane.
__________________

__________________
Ronstar is online now   Reply With Quote
Old 10-31-2013, 04:25 PM   #63
Moderator
Sarah in SC's Avatar
 
Join Date: Sep 2005
Location: Charleston, SC
Posts: 13,456
Quote:
Originally Posted by M Paquette View Post
Tax the poor. There are so many of them, and we can use tax policy to discourage people from choosing a poverty lifestyle.
Jonathan Swift had some good ideas for what to do about the poor, didn't he?
__________________
“One day your life will flash before your eyes. Make sure it's worth watching.”
Gerard Arthur Way

Sarah in SC is offline   Reply With Quote
Old 10-31-2013, 04:31 PM   #64
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,406
Quote:
Originally Posted by Ronstar View Post
Maybe I should have to purchase carbon credits to offset the pollution I caused by brewing with propane.
See how many new taxes we just came up with, after such a short brainstorming session? I hope some French taxmen are surfing this forum. It will give them more ideas.
__________________
NW-Bound is offline   Reply With Quote
Old 10-31-2013, 04:37 PM   #65
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
haha's Avatar
 
Join Date: Apr 2003
Location: Hooverville
Posts: 22,384
We already have large numbers of people who spend more energy on fiddling benefits and subsidies, no need to create another huge class doing this.

Losers would favor it; the productive not so much.

Ha
__________________
"As a general rule, the more dangerous or inappropriate a conversation, the more interesting it is."-Scott Adams
haha is offline   Reply With Quote
Old 10-31-2013, 04:41 PM   #66
Thinks s/he gets paid by the post
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 4,616
Quote:
Originally Posted by NW-Bound View Post
The idea of heavy inheritance tax is not new, and has been proposed before, and particularly aimed at the billionaires who could not possibly spend it all. But I gave it some thought, and not being an economist, just want to throw out some ideas for discussion.

Most of the networth of people like Bill Gates is in the stock of their companies. Even if they have diversified out to equities of other companies, it is not a bundle of cash that the goverment can just grab and to redistribute to pay off debts.

So, if the gummint seizes a big chunk of Microsoft or any other large corporation via the shares that these billionaires hold, what does it do with it? Will the gummint take the role of a part-owner and sit on the board of the company to manage it? Even if the gummint can pull that off (by assigning some bureaucrats to become managers of that corporation), it can only get the income from the operation. It will not be the 100s of billion that the asset is worth on paper.

So, you say let's sell it off to turn it into cash. It will have to be spread out over a time period like 6 months or 1 year, to avoid dumping it and causing its value to crash. But who's the buyer? These "poor people" who do not have any money to start with, or other billionaires? But why other billionaires bother to buy anything if it would be taken from them too eventually?

So, will the buyers be mostly foreigners like the Chinese, who are getting richer everyday, and they can get to pass to their children as it is now? So, won't the "poor people" end up working for foreigners?
Yeah... I was trying to think through the same thing, and of course it would be complicated, but turning assets over to government would not be a necessity... either as cash or as investment instruments. No reason to stop the "billionaire" from owning or managing the assets... his choice. In effect, it would be be a "tax" ... not unlike the 95% excess profits revenue tax of 1943.

Am not very good at this stuff, so my "take" may be wrong.
__________________
Today is the oldest you've ever been, and the youngest you'll ever be again. - Eleanor Roosevelt
imoldernu is offline   Reply With Quote
Old 10-31-2013, 04:43 PM   #67
Full time employment: Posting here.
 
Join Date: May 2011
Location: Marco island
Posts: 813
Quote:
Originally Posted by Sarah in SC

Jonathan Swift had some good ideas for what to do about the poor, didn't he?
Ah, satire. Problem with Swift was that he was so over the top that his satire was obvious. More of a Andy Kaufman fan here.
__________________
Gatordoc50 is offline   Reply With Quote
Old 10-31-2013, 04:46 PM   #68
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,406
Quote:
Originally Posted by imoldernu View Post
Yeah... I was trying to think through the same thing, and of course it would be complicated, but turning assets over to government would not be a necessity... either as cash or as investment instruments. No reason to stop the "billionaire" from owning or managing the assets... his choice. In effect, it would be be a "tax" ... not unlike the 95% excess profits revenue tax of 1943.

Am not very good at this stuff, so my "take" may be wrong.
I just thought of an analogy.

If a goose is productive and laying good eggs and they do not have to be gold, we can take some of the eggs but would not want to kill the goose. The assets of the deceased billionaire should be kept in the form that will stay productive. If the gummint takes over or disbands it, that chance is slim.
__________________
NW-Bound is offline   Reply With Quote
Old 10-31-2013, 05:21 PM   #69
Moderator Emeritus
 
Join Date: Oct 2007
Posts: 4,929
Quote:
Originally Posted by Sarah in SC View Post
Jonathan Swift had some good ideas for what to do about the poor, didn't he?
MMmmm.... a suckling roast for Halloween dinner... Barbecue! But... Vinegar or tomato base sauce! That is the question!
__________________
M Paquette is offline   Reply With Quote
Old 10-31-2013, 05:27 PM   #70
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,265
Quote:
Originally Posted by youbet View Post
I'd like to see some forms of wealth taxed more heavily, real estate for example. Easy to do and folks are getting a huge bargain today on their McMansions and estate size properties.
It's a little surprising to me that property taxes are flat, not progressive. The McMansions pay more, based on assessed value, but all at the same rate as the shack in the same county.



Quote:
Originally Posted by Gatordoc50 View Post
Good point. Let's stop taxing income. Makes no sense.
As long as we're all talking about things that will never happen, I'm surprised no one has mention the Federal Sales Tax (unless I missed it).

I believe it addresses all the issues presented by the OP. Whether you have a $50,000 COLA pension and spend it all, or have $2,000,000 in 'wealth' and draw a conservative 2.5% (so also $50,000) and spend it all, you would pay the same amount in FST.

That seems about as 'fair' as you can get to me, acknowledging that 'fair' is a loaded term. I'd say that what you actually spend is a better measure of your 'wealth' - it equalizes the pensioners and the savers and everyone in-between.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 10-31-2013, 05:41 PM   #71
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Sep 2005
Location: Northern IL
Posts: 18,265
Quote:
Originally Posted by NW-Bound View Post
... And what's this homebrew stuff? Tax them too, for crying out loud. Got to hire more BATF agents to look for these future tax cheaters.
heh-heh, it's 'worse' than you think. Most of the beer ingredients I buy are classified as 'food', and the sales tax is at the lower food rate.

-ERD50
__________________
ERD50 is offline   Reply With Quote
Old 10-31-2013, 06:21 PM   #72
Administrator
W2R's Avatar
 
Join Date: Jan 2007
Location: New Orleans
Posts: 38,878
I can't believe that nobody has posted THIS yet....

__________________
Already we are boldly launched upon the deep; but soon we shall be lost in its unshored, harbourless immensities.

- - H. Melville, 1851
W2R is online now   Reply With Quote
Old 10-31-2013, 06:59 PM   #73
Thinks s/he gets paid by the post
imoldernu's Avatar
 
Join Date: Jul 2012
Location: Peru
Posts: 4,616
ERD50 said...
Quote:
That seems about as 'fair' as you can get to me, acknowledging that 'fair' is a loaded term. I'd say that what you actually spend is a better measure of your 'wealth' - it equalizes the pensioners and the savers and everyone in-between."]That seems about as 'fair' as you can get to me, acknowledging that 'fair' is a loaded term. I'd say that what you actually spend is a better measure of your 'wealth' - it equalizes the pensioners and the savers and everyone in-between.
Hmmmm...
So if I earn $50K and you earn $1Million:
I'll be paying 6% of my pay for food... $3K Will you pay 6% or $60K?
I'll pay $2000 for gasoline... How much will you be spending?
My Internet and phone cost $2K or 4%... Will you be paying $40K
If my car costs $20K, will you be paying $400,000?

For a while, I had a neighbor who was earning a rather high base salary... over $600K... His spending was more than mine, but nowhere near THAT much more...

So if I spend 70% of my salary on taxable items, will Jamie Dimon do the same?

Or maybe I'm missing something... A change to Sales tax seems to be a favorite option for many members of congress.
__________________
Today is the oldest you've ever been, and the youngest you'll ever be again. - Eleanor Roosevelt
imoldernu is offline   Reply With Quote
Old 10-31-2013, 07:15 PM   #74
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
 
Join Date: Apr 2013
Posts: 5,574
How about we just tax id10ts, start with ones in the public view that don't add value, maybe ones our taxes pay for :-).

MRG
__________________
MRG is offline   Reply With Quote
Old 10-31-2013, 08:12 PM   #75
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
NW-Bound's Avatar
 
Join Date: Jul 2008
Posts: 19,406
We have to define "idiot" first. We have not been able to reach a consensual definition of "rich", who needs to be taxed more. How about "rich is he who can retire early"?

So, I thought that perhaps we should all be taxed more. Absolutely no consensus there!
__________________
NW-Bound is offline   Reply With Quote
Old 10-31-2013, 08:45 PM   #76
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
HFWR's Avatar
 
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 12,964
Don't tax you, don't tax me, tax that man behind the tree...
__________________
Have Funds, Will Retire

...not doing anything of true substance...
HFWR is offline   Reply With Quote
Old 10-31-2013, 08:47 PM   #77
Give me a museum and I'll fill it. (Picasso)
Give me a forum ...
harley's Avatar
 
Join Date: May 2008
Location: Following the nice weather
Posts: 6,427
Spend less?
__________________
"Good judgment comes from experience. Experience comes from bad judgement." - Will Rogers, or maybe Sam Clemens
DW and I - FIREd at 50 (7/06), living off assets
harley is offline   Reply With Quote
Old 10-31-2013, 08:49 PM   #78
Thinks s/he gets paid by the post
 
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 2,711
Quote:
Originally Posted by Ronstar View Post
I think the gov't would love to tax wealth, but it would be tougher to administer than income tax. The value of some investments, ie real estate, private businesses, etc are subjective, and the gov't would spend a lot of $ trying to figure out everyone's worth. My guess is that they'll just increase income tax rates when they want more money.
We have had a form of wealth tax the estate tax. Its a once in a lifetime tax, but it is based upon ones net worth. You include all assets either passing by will or by beneficiary designation, including life insurance. If you want to see what forms for a wealth tax might look like look at form 706 for the estate tax. In addition for a while at least some states taxed intangibles, and originally the property tax in these states included this sort of properties.
__________________
meierlde is online now   Reply With Quote
Old 10-31-2013, 09:06 PM   #79
Thinks s/he gets paid by the post
photoguy's Avatar
 
Join Date: Jun 2010
Posts: 2,301
Quote:
Originally Posted by imoldernu View Post
Purely as a matter for discussion, what would you think of using wealth (net worth) as a basis for taxation, rather than income?
In general, I'd be against using wealth as a basis for taxation instead of income for the simple reason that it's easier to game. Measuring wealth involves valuations, discount rates, and all sorts of subjective judgements. There would be an incredible amount of pressure to hide assets and how well will the government be at tracking this (probably not very good). It would also encourage liquid assets to leave the country.

On the other hand taxing income is simple and for the vast majority of people, incomes flows through a third party (payment processor) who can take tax immediately. It's much harder to manipulate and cheaper to collect.
__________________
photoguy is offline   Reply With Quote
Old 10-31-2013, 10:20 PM   #80
Thinks s/he gets paid by the post
 
Join Date: Sep 2012
Location: Seattle
Posts: 2,906
Quote:
Originally Posted by imoldernu View Post
ERD50 said...

I'll pay $2000 for gasoline... How much will you be spending?
Well, the way it works now the millionaire spends zero for gasoline in his $90,000 Tesla for which you paid the taxes to give him a credit. In Washington state, he even gets to buy it with no sales tax due. So under the current system, things don't seem very fair either.
__________________

__________________
Fermion is offline   Reply With Quote
Reply


Currently Active Users Viewing This Thread: 1 (0 members and 1 guests)
 
Thread Tools Search this Thread
Search this Thread:

Advanced Search
Display Modes

Posting Rules
You may not post new threads
You may not post replies
You may not post attachments
You may not edit your posts

BB code is On
Smilies are On
[IMG] code is On
HTML code is Off
Trackbacks are Off
Pingbacks are Off
Refbacks are Off


 

 
All times are GMT -6. The time now is 03:24 PM.
 
Powered by vBulletin® Version 3.8.8 Beta 1
Copyright ©2000 - 2017, vBulletin Solutions, Inc.