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Old 12-18-2007, 09:00 AM   #121
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If the Dems are still in control of both house of Congress, you think they are going to extend the evil Bush tax cuts?
Absolutely not...........
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Old 12-18-2007, 09:02 AM   #122
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Aside from a general hostility to inherited wealth, I have a real problem with the step up basis on inherited assets. It is fundamentally unfair to those who have "paid along the way". But I suspect those who abhor the estate tax would also object vociferously to the elimination of this provision as well.
The only thing I have to add is it's easy to make these comments when the capital gain tax is the lowest it's been in our country's history.

"back in the day", capital gains rates were 40% or higher........would that change anyone's mind
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Old 12-18-2007, 09:58 AM   #123
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I think the folks that post on this board should keep something in mind.

If the retirement outlook for the average baby boomer is as grim as some predict, then the members on this board are going to be considered 'lucky, rich, well off....'. Now just as you think the 'lucky, rich, well off...' have no right to hang onto their assets or pass them on to whom ever they wish, there will be a large part of the population the believe you have no right to have what you have, and you should be means tested, or taxed out of your savings. If you allow government to take Buffets and Gates assets, weather they like it or not, there is nothing to keep the same government from taking yours.
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Old 12-18-2007, 10:14 AM   #124
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Amen. In fact, expect that there will be some sort of "wealth tax" or reductions in SS, etc in the future that would look at holdings rather than income. That way, the "rich" will get hit, not those hardworking folks who can hardly keep up the payments on the two Lexi. This is about the only course of events that might make me consider an annuity--to convert my holdings to a less conspicuous monthly check.
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Old 12-18-2007, 10:28 AM   #125
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I guess the question that I would have is what does it matter to you, or to anyone for that matter how much money someone has? Do you, or do others believe that there is only a finite sum of money in the US? As in, if someone has more money than you it means there is "less" available for you? Does a family having great weath that was inherited somehow impede your ability, or anyone elses ability to do the same? This is a viewpoint I have never understood. I just cannot see how anyone elses wealth, or lack of it, prohibits me from achieving whatever financial goals that I might strive for. Just because my neighbor down the street might have a job making a higher salary than I do, does not mean that he "took" money away from me somehow.
I do believe that people should achieve things for themselves in life. But that does not mean I believe that everyone in life should be "forced" by the govt or anyone else to start off life with nothing either. As the saying goes... "life is not fair", and the idea that the govt should artificially try to start everyone in life economically equa,l is not only impossible, but immoral to even try. Once someone has built up their fortune, they should be free to spend, or not spend that fortune as they see fit. And if it makes that person happy to give it away as an inhertance to their children, then they should be free to do so.
I think there is a flow in the economy and as more money flows toward fewer, concentrated hands - and not more broadly distributed by whatever means (salaries, govmt services or whatever) that Yes - it will increase the concentration of wealth and power in the country...

Like my example of charitable foundations - if the $ was taxed at 55%, it would get "spent" via govmt programs (well, maybe war, but in the most twisted logic, that also fuels some economies)...but with a foundation only 5% leaks out to benefit society...it perpetuates the concentration of wealth.
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Old 12-18-2007, 10:39 AM   #126
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Aside from a general hostility to inherited wealth, I have a real problem with the step up basis on inherited assets. It is fundamentally unfair to those who have "paid along the way". But I suspect those who abhor the estate tax would also object vociferously to the elimination of this provision as well.
I dislike the step up basis provision for another reason........ It's another government effort to manipulate the way folks manage their assets. Older folks holding equities with large unrealized capital gains are strongly influenced not to sell in order to optimize their estate planning regardless of their opinion of the quality and prospects of the equity. I just don't like taxes that influence investment decisions. Makes for an inefficient market.

Regarding the estate tax in general, I've done some research into statistics of who actually pays and who would pay under various proposals and personally feel an estate tax with an exemption in the $3.5 million range (today's dollars and inflation adjusted) would impact very few of the folks I'd be concerned for. The average value of estates over $3.5 mil is in the mid-teens, even after taxation, the heirs would be wealthy by most standards.

As I've said to the point of boredom, loop holes must be closed. Here's the exemption level, here's the tax rate, pay.
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Old 12-18-2007, 10:51 AM   #127
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...(today's dollars and inflation adjusted) would impact very few of the folks I'd be concerned for. ...

You have made my point. If you are not concerned for the people you consider wealthy, then those that make considerably less than you will not be concerned when they allow government to take your assets.

What's the old story,.... I didn't protest when they came to take my neighbors... but when they came to take me!

We need taxes to run government. I just believe it is the slippery slope when we tax some and exclude others just because we don't care about them and their numbers are too small to do anything about it.
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Old 12-18-2007, 10:56 AM   #128
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Originally Posted by Gumby View Post
Aside from a general hostility to inherited wealth, I have a real problem with the step up basis on inherited assets. It is fundamentally unfair to those who have "paid along the way". But I suspect those who abhor the estate tax would also object vociferously to the elimination of this provision as well.
Suspicion confirmed! ( I didn't want to disappoint you).

My problem with eliminating the step-up in basis at death is - it further complicates an already too burdensome compliance effort. And, it creates too many opportunities for 'cheating'.

You are asking the executors of an estate to go back and figure the cost basis of something that may have been purchased years ago, possibly over many transactions (re-invested dividends?), by someone that may not have kept good records (it's a pain even with good records), and you can't even ask them for help (well, you can ask....).

I say simplify! Eliminate ALL capital gains taxes - they are burdensome, and subject to cheating. And just like the estate tax, since they can be a large one-event hit, people look for ways to circumvent. 1031 exchange? See, more complexity! Don't throw more rules on top of bad rules to 'fix' them - get rid of the bad rules! Simplify!

Do that - and there IS no argument over who paid what when and is it 'fair' that they are being taxed again. The inconsistencies surrounding this estate tax are mind boggling to me.

And this can all be revenue neutral, so I'm not talking about taking food stamps away from some starving child, OK?

-ERD50
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Old 12-18-2007, 10:58 AM   #129
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You have made my point. If you are not concerned for the people you consider wealthy, then those that make considerably less than you will not be concerned when they allow government to take your assets.

What's the old story,.... I didn't protest when they came to take my neighbors... but when they came to take me!

We need taxes to run government. I just believe it is the slippery slope when we tax some and exclude others just because we don't care about them and their numbers are too small to do anything about it.
You are exactly right Rustic23! Lots of people favor wealth redistribution when it helps them financially, or even someone else. But if it is suddenly discovered, that THEY in fact are the ones considered "too rich", then that attitude suddenly evaporates. If the govt must tax... then tax everyone... not just some. I would love to see a flat tax one day... Say everyone pays 15% (or whatever percentage is agreed upon). Would certainly be a lot more fair than today. I am equally against 40% of the US paying NO taxes, as I am the very weathy using loopholes to get around paying their taxes.
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Old 12-18-2007, 11:00 AM   #130
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Absolutely not...........
How could they continue the Bush tax cuts granted in a time of war, first time ever! Our country will be BK. Our children and grandchildren will be paying back the debt on Bush's ill conceived tax cuts. The biggest tax cut would could get is to have the US debt paid off. I think interest on the US debt is now the 3rd or 4th largest item in the budget.

People keep using the term liberal. So I will us the term conservative. It was two so called conservative presidents who produced the largest deficit in US History. The first was the actor/president - and our current president. Now tell me conservatives know how to balance a budget.
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Old 12-18-2007, 11:10 AM   #131
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You have made my point. If you are not concerned for the people you consider wealthy, then those that make considerably less than you will not be concerned when they allow government to take your assets.

What's the old story,.... I didn't protest when they came to take my neighbors... but when they came to take me!

We need taxes to run government. I just believe it is the slippery slope when we tax some and exclude others just because we don't care about them and their numbers are too small to do anything about it.

I guess I'm just pragmatic. You could make your assertion about any progressive tax. "Gee, if folks making fourteen zillion bux a year are in a higher tax bracket than me, maybe they'll lower the bracket limits and catch me next!!!"

If you're against all progressive taxes, I understand your point. If you are only against progressivity (is that a word?) in estate taxes, you're inconsistent so I disagree.

I'm pragmatic about estate taxes because I do believe that levels of absolute dollars matter. When you can leave enough behind that heirs have no issues keeping the family business or farm going nicely, or, despite the taxes, they are still left quite wealthy, then the impact of the tax is minimal. Taxes have to be collected from someplace.

But I'm against loopholes. I'm against taxes that influence investment decisions. And I'm against the step up in cost basis at death since it's just another scheme to have someone else pay.
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Old 12-18-2007, 11:33 AM   #132
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I'm against all progressive taxes. I believe we all live here, and we should all pay the bill.

Freein05,
As I have pointed out in other threads, Presidents don't spend, Congress spends. Look it up in the Constitution, Congress holds the purse strings. I think you know this, but it is harder to blame your congressman that is bringing home the pork and easier to blame the President. The President does submit a budget, however, how many times have we heard it is 'dead on arrival'. The President makes an easy target, but until we get Congress to stop the Ear Marks, things will not get better. If you want to give the President the line item veto, then I would be willing to blame him for the budget woes.

I tried to keep this non political as I did not blame or credit any Congress or President. That's because I think they are all equally guilty. For me I have decided I will vote against all incumbents in the primary.
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Old 12-18-2007, 11:45 AM   #133
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How could they continue the Bush tax cuts granted in a time of war, first time ever! Our country will be BK. Our children and grandchildren will be paying back the debt on Bush's ill conceived tax cuts.
Oops, somebody else who didn't get the word.

We're in a (continuing but reducing) deficit not because of tax cuts, but because of increased spending (on lots of things, to inculde the war(s), but also including record domestic spending).

This year (with the tax cuts, and I'd argue, largely because of the tax cuts and their beneficial impact on the economy) the government took in more revenue than ever before. More, not less. 6.7% more than the year before. And government revenue grew 14.5% and 11.8% in the two years preceding that. Pretty impressive, and (IMO) probably at least in part due to the tax cuts. If you want still more government revenue (and I think you do!) maybe you should be arguing for an extension of the tax cuts.
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Old 12-18-2007, 12:00 PM   #134
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I say simplify! Eliminate ALL capital gains taxes - they are burdensome, and subject to cheating. -ERD50
I'm surprised to hear you call for a transfer of wealth from one group to another!

If two people are both consuming taxpayer provided services and both have income, why should the wage earner pay and the equity trader not pay? Simple, to effectively transfer wealth from the wage earner to the portfolio trader. And I disagree. Let folks in both professions pay their own way!

If you are saying eliminate both capital gains taxes and wage driven income taxes, that's different.
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Old 12-18-2007, 12:20 PM   #135
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How could they continue the Bush tax cuts granted in a time of war, first time ever! Our country will be BK. Our children and grandchildren will be paying back the debt on Bush's ill conceived tax cuts. The biggest tax cut would could get is to have the US debt paid off. I think interest on the US debt is now the 3rd or 4th largest item in the budget.

People keep using the term liberal. So I will us the term conservative. It was two so called conservative presidents who produced the largest deficit in US History. The first was the actor/president - and our current president. Now tell me conservatives know how to balance a budget.
Keep the politics to the political threads........this thread is about TAXES!!!
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Old 12-18-2007, 12:57 PM   #136
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If two people are both consuming taxpayer provided services and both have income, why should the wage earner pay and the equity trader not pay? Simple, to effectively transfer wealth from the wage earner to the portfolio trader. And I disagree. Let folks in both professions pay their own way!
Would you at least favor indexing the cap gains tax for inflation? Right now, when Auntie Em sells that stock she bought, we pretend that the $5 per share she paid in 1957 is the same as $5 today. The cost basis should at least be indexed for inflation so that she's taxed on the real gain, not the increase in numerical dollars that are each worth less.

The differential treatment of cap gains is perhaps a rough counterbalance to this problem. When the cap gains rate = the income rate, the inflation factor will become even a bigger fairness issue.
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Old 12-18-2007, 01:01 PM   #137
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If you are saying eliminate both capital gains taxes and wage driven income taxes, that's different.
Are you playing the 'straight man' here?

Once again, I keep getting reinforcement on the idea of an NST. Look at all the problems it solves:

A) Would Paris be the poster child for inherited wealth arguments if she lived a modest life style, spending less than $30,000 per year? We would never have heard of her. So, tax spending.

B) Trader making money on short term cap gains versus the 'wage slave' earning an income and getting his W2 sent to the govt? No problem - tax spending and it all works out. The trader pays when he buys that new beemer, or that fancy dinner.

I really cannot think of a 'fairer' system that the NST (though I wish they would drop the self-promoting 'fairtax' name - nothing is ever truly 'fair').

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Old 12-18-2007, 01:09 PM   #138
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Keep the politics to the political threads........this thread is about TAXES!!!
I was not the first one to bring politics into this as a matter of fact you also did. My post was responding to your political answer.
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Old 12-18-2007, 01:12 PM   #139
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I was not the first one to bring politics into this as a matter of fact you also did. My post was responding to your political answer.
Saying "absolutely not", is not political, it is an opinion.
Whether it will or will not is immaterial, I "think" it will not happen that Bush's tax cuts will be continued......
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Old 12-18-2007, 01:30 PM   #140
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I'm against all progressive taxes. I believe we all live here, and we should all pay the bill.
Well, if you remain consistent with that I will respect your opinion on the matter.

But, just as a point of reference, I support the concept of a progressive tax system. Please note that no one has ever accused me of being a 'liberal' on this (or any other ) forum. .

The 'young, starting out' ERD50 made a fairly small salary, and paid fairly low tax rates and amounts.

Ten years, several raises and promotions and a second income later; I (we) paid a higher tax rate and amount. But I (we) had more discretionary income, so it was not really a 'burden'.

Both of 'me' think it works out pretty well that way.

Of course, you won't get people to agree on what the curve should look like, but I think most people, yes even the 'rich', would accept a reasonably progressive tax system.

And I think the poor would accept a reasonably modest curve, if they could be assured there were no 'loopholes' for the rich.

JMO - ERD50
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