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11-29-2012, 08:53 AM
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#21
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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Sigh......
I figured that was coming and tried to be careful with my wording but still make my point but alas, I failed. Busted.
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11-29-2012, 09:54 AM
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#22
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jan 2006
Location: Rio Grande Valley
Posts: 37,931
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Quote:
Originally Posted by nun
This is an interesting idea as the elimination of income tax might spur spending. However, that might generate inflation and certainly wouldn't encourage thrift. But 1% on savings between $500k and $1M sounds ok.
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That would so kill my retirement budget. 2% on savings above $1M means you only get to spend half of what you withdraw from your retirement nest egg assuming you withdraw 4% annually.
And I already paid a lot of capital gains taxes as I was building that nest egg.
Am I fooling myself to think this kind of "Wealth Tax" would never happen in the US?
__________________
Retired since summer 1999.
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11-29-2012, 09:58 AM
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#23
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Recycles dryer sheets
Join Date: Oct 2012
Location: Houston
Posts: 68
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Wow, as a ER (57) and very FI, I have seen this coming for years - most of the socialized countries of the world have done this in one way or another - here is my thoughts (worth about 2 cents) of the future taxing process
1. The taxes we pay right now will remain as they are (Give or take a few percentage points)
2. Within the next few years (or earlier) the wise goverment will hit us with a National VAT or sales tax that we will be told that this is a temp tax (to reduce defict, but we know that taxes never go away)
3. A national wealth tax will be institued that will hit all non - retirment funds
As a FI with a mid 7 figures in assets - what I have done is this: a) removed all non sheltered assets to the Isle of Man (Non-Tax British Protectorate) - I don't like the more famous alternatives, (I do pay US tax on all distributions - but the assets are held in a LLC were I control the distributions. (no tax until funds are distibuted to me) -- Since assets are in a non - US LLC, they will have no regulatory authority over them. Neither does the British Govt or EU - Also a smaller LLC in Dubai which is a 10% owner in the Man LLC.
To pay for all the give a ways / Large US Govt - a large amount of funds will need to be raised and I for one, will not participate in there actions.
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11-29-2012, 10:00 AM
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#24
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Thinks s/he gets paid by the post
Join Date: May 2005
Location: Texas
Posts: 1,038
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Quote:
Originally Posted by audreyh1
That would so kill my retirement budget. 2% on savings above $1M means you only get to spend half of what you withdraw from your retirement nest egg assuming you withdraw 4% annually.
And I already paid a lot of capital gains taxes as I was building that nest egg.
Am I fooling myself to think this kind of "Wealth Tax" would never happen in the US?
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Yet many people gladly give a money manager 1%.
__________________
In theory, theory and practice are the same. In practice, they are not.
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11-29-2012, 10:23 AM
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#25
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Full time employment: Posting here.
Join Date: Oct 2007
Posts: 798
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The main problem I see with this proposal is the creation of underground assets - namely valuable gems, minerals, etc. These can be easily bought off the books, would appreciate in value the more demand there is for them and would drain money from traditional savings and investments (and thus the ability of companies to expand). It's naive to believe that people with very deep pockets would just sit there and allow their non revenue producing assets to be taxed away. This is definitely a pie in the sky proposal by an academic who has no exposure to real people and the real world. OTOH, if the income tax is eliminated totally, the vast majority of Americans would come out ahead. Which is why it's an impossible scenario dollar-wise.
__________________
Mission accomplished - not necessarily ER, but certainly R.
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11-29-2012, 03:29 PM
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#26
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Moderator Emeritus
Join Date: Oct 2007
Location: Portland
Posts: 4,946
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Hmmm... I'm going to want an offshore corporation, and a US registered public shell corporation, with interlocking non-US citizen sock puppet directorates. Unbeliezeable, LLC... The shell issues a new class of voting, dividend paying shares which I buy, and then sadly suffer a sharp loss on. Hilarity ensues...
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11-29-2012, 07:23 PM
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#27
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Recycles dryer sheets
Join Date: Oct 2012
Location: Houston
Posts: 68
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M. Paquette I guess is being sarcastic
Private Companies (US equilivent is LLC) is used for both keeping assets (like a US trust), and to hold my non us realestate (home in UK and Condo in Dubia) along with investments. The cost of these vehicles are in-expensive, keeps your assets private from Goverments eyes and allows easy access to visas via company guarantees. I don't understand what is so funny - I guess I am dense.
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11-30-2012, 09:33 AM
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#28
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Thinks s/he gets paid by the post
Join Date: Jul 2007
Location: St. Louis
Posts: 1,563
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Quote:
Originally Posted by Loving Life
Wow, as a ER (57) and very FI, I have seen this coming for years - most of the socialized countries of the world have done this in one way or another - here is my thoughts (worth about 2 cents) of the future taxing process
1. The taxes we pay right now will remain as they are (Give or take a few percentage points)
2. Within the next few years (or earlier) the wise goverment will hit us with a National VAT or sales tax that we will be told that this is a temp tax (to reduce defict, but we know that taxes never go away)
3. A national wealth tax will be institued that will hit all non - retirment funds
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I think like you do. The only thing is I am low income so there will be a lot better game in the forest than me.
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11-30-2012, 10:20 AM
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#29
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Sep 2005
Location: Northern IL
Posts: 26,806
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Quote:
Originally Posted by Loving Life
Wow, as a ER (57) and very FI, I have seen this coming for years - most of the socialized countries of the world have done this in one way or another...
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Not sure what you define as a 'socialized country' (maybe any one with a 'wealth tax'?), but I see seven, according to wiki:
Quote:
Existing net wealth/worth taxes
France: A progressive rate from 0 to 1.8% of net assets. In 2006 out of €287 billion "general government" receipts, €3.68 billion was collected as wealth tax. See Solidarity tax on wealth.
Iceland: Temporary wealth tax was re-introduced in 2010, for four years. A rate of 1,5% on net assets exceeding ISK. 75.000.000 for individuals and ISK 100.000.000 for married couples.
India: Wealth tax is 1% on net wealth exceeding 30 Lakhs (Rs 3,000,000). However, non-residents returning to India are given exemption for seven years.
Liechtenstein
Netherlands: Interest income is taxed like a wealth tax, i.e. a fixed 30% out of an assumed yield of 4% is a rate of 1.2%. See Income tax in the Netherlands.
Norway: Up to 0.7% (municipal) and 0.4% (national) a total of 1,1% levied on net assets exceeding NOK. 700,000.
Switzerland: A progressive wealth tax with a maximum of around 1.5% may be levied on net assets.[16] The exact amount varies between cantons.
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-ERD50
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11-30-2012, 10:32 AM
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#30
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 4,872
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Quote:
Originally Posted by Loving Life
As a FI with a mid 7 figures in assets - what I have done is this: a) removed all non sheltered assets to the Isle of Man (Non-Tax British Protectorate) - I don't like the more famous alternatives, (I do pay US tax on all distributions - but the assets are held in a LLC were I control the distributions. (no tax until funds are distibuted to me) -- Since assets are in a non - US LLC, they will have no regulatory authority over them. Neither does the British Govt or EU - Also a smaller LLC in Dubai which is a 10% owner in the Man LLC.
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Are there any PFIC and 8938 implication of such an arrangement?
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”
Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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11-30-2012, 11:19 AM
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#31
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: May 2005
Location: Lawn chair in Texas
Posts: 14,183
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My foolproof system for beating the tax man is to have both low income and low net worth...
__________________
Have Funds, Will Retire
...not doing anything of true substance...
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11-30-2012, 11:41 AM
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#32
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gone traveling
Join Date: Apr 2009
Location: Eastern PA
Posts: 3,851
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Quote:
I hope you meet/exceed your goals...
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11-30-2012, 02:05 PM
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#33
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Thinks s/he gets paid by the post
Join Date: Jul 2009
Location: Miraflores,Peru
Posts: 1,992
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Quote:
Or invest all your assets in the "State of Flux"!
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11-30-2012, 03:36 PM
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#34
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Recycles dryer sheets
Join Date: Oct 2012
Location: Houston
Posts: 68
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NUN - good question (this is a little off topic, but ok)
In my case, it will not fall under the PFIC rules but under CFC reg's - since my ER, from Mega Oil Corp - I do consulting/contract work in Angola, Nigeria, Azerbaijan, Australia and just starting to do contract work in Viet Nam -- I run all my work out of this Corp. an never has greater than 40% investment income therefore it is considered an operating company - The Dubai corp just is holding company for my personal realestate with no income.
This is just what I do, each individual needs to structure(if necessary) with there Attorney's to legally avoid/pospone taxes, not to illegally evade taxes based on the facts and benefits as needed
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11-30-2012, 04:04 PM
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#35
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Thinks s/he gets paid by the post
Join Date: Mar 2010
Location: Kerrville,Tx
Posts: 3,361
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Actually some states have pieces of a wealth tax, look up intangibles tax. It is imposed on financial assets, not real property (since the state taxes that with property tax) At one time in theory at least you were supposed to pay property tax on financial assets, but that proved to be a mess to administer, so it went to intangibles taxes, and the like.
So its not a new idea (what really is)
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11-30-2012, 08:42 PM
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#36
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Thinks s/he gets paid by the post
Join Date: Feb 2006
Posts: 4,872
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Quote:
Originally Posted by Loving Life
NUN - good question (this is a little off topic, but ok)
In my case, it will not fall under the PFIC rules but under CFC reg's - since my ER, from Mega Oil Corp - I do consulting/contract work in Angola, Nigeria, Azerbaijan, Australia and just starting to do contract work in Viet Nam -- I run all my work out of this Corp. an never has greater than 40% investment income therefore it is considered an operating company - The Dubai corp just is holding company for my personal realestate with no income.
This is just what I do, each individual needs to structure(if necessary) with there Attorney's to legally avoid/pospone taxes, not to illegally evade taxes based on the facts and benefits as needed
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Ahh, ok so you get US tax deferral.......of course the IRS could always change the rules for US owners of CFCs and I imagine your 8938, FBAR, 5471 etc filings keep a few tax professionals employed
__________________
“So we beat on, boats against the current, borne back ceaselessly into the past.”
Current AA: 75% Equity Funds / 15% Bonds / 5% Stable Value /2% Cash / 3% TIAA Traditional
Retired Mar 2014 at age 52, target WR: 0.0%,
Income from pension and rent
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11-30-2012, 10:57 PM
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#37
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2005
Location: Chicago
Posts: 13,148
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Quote:
Are you looking forward to the gov't thugs pulling strips of skin off your back with a pair of nippers?
__________________
"I wasn't born blue blood. I was born blue-collar." John Wort Hannam
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12-01-2012, 12:04 AM
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#38
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Recycles dryer sheets
Join Date: Dec 2011
Posts: 388
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A wealth tax has the advantage that by taxing accumulation it can correct for the inordinately preferential tax rates that have enabled the 1% to sequester most of the productivity gains in the US for the past 30 years or so. However, I expect the enforcement problems would be formidable. Valuation of many kinds of real property would be impossible to verify on a large scale, particularly property held outside the country.
We already have a wealth tax in the form of property taxes. Valuation disputes are endemic.
I think a VAT tax is much more likely for ease of enforcement reasons. Compliance almost disappears as an issue. I oppose VAT taxes because they are inherently regressive. It seems though that people accept sales and VAT taxes more readily because they view purchasing decisions as more discretionary than they really are.
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12-01-2012, 01:50 AM
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#39
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Location: Leeward Oahu
Posts: 17,707
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Quote:
Originally Posted by Khufu
A wealth tax has the advantage that by taxing accumulation it can correct for the inordinately preferential tax rates that have enabled the 1% to sequester most of the productivity gains in the US for the past 30 years or so.
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I suppose if the goal is to "even things up" (whatever that means) a wealth tax might accomplish something along those lines. But, if the wealth tax is a legitimate attempt to balance the budget or reduce deficits, etc., aiming it at the so-called 1% won't be of much help. Countless times, it has been shown that the gummint will eventually have to raise revenues from the middle class to come out "even" with spending. That really is where the money is. Confiscating money from the "rich" is popular, but it won't do much for deficits. There just ain't that much money! Difficult as it is to convince folks, the bulk of the money is in the middle class. Stated another way, "We have met the rich and he is us." Of course, YMMV.
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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12-01-2012, 07:25 AM
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#40
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Nov 2010
Location: Sarasota, FL & Vermont
Posts: 36,204
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Quote:
Originally Posted by Khufu
A wealth tax has the advantage that by taxing accumulation it can correct for the inordinately preferential tax rates that have enabled the 1% to sequester most of the productivity gains in the US for the past 30 years or so. ......
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Egad.....you still pushing this productivity poppycock? Nobody is buying....
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