Taxing wealth a way to tax Roth IRAs?

[joeea]

I personally do not worry about what will happen. I cannot really affect it. And whatever happens, I will do quite OK compared to other people.

Same here. While I watch what politicians do, and I always vote, for the most part I don't worry. I'm reasonably well covered almost without regard to what they do.

That said, I worry a lot more about my children and grandchildren and how they are affected by political moves.

I like to watch all this to see how it will unfold, but am not losing any sleep over it.

yup

I spend more time contemplating my next moves in trading the market, er, fortuitous rebalancing. It's something on which I can act unilaterally.

next moves in trading? Nope.

 

[Chuckanut]

Are spouses very close relatives?

I would think so. Even ex spouses in some cases.

 

[Independent]

+1 even though I would oppose a wealth tax in principle.... I presume that these people with $50 million+ or $1 billion+ pay income tax already... so they pay income tax on their income and then it gets taxed again becaue it is part of their wealth?

One study found that on estates of $100 million or more, 55% of the assets consisted of unrealized capital gains.

That capital income was not taxed during the owners lifetime, and, due to step up in basis, would not be taxed during the heirs lifetime.

As this forum's members age, we'll have more examples of people holding certain assets to take advantage of that.

 

[gerntz]

Increasing the payroll tax as before.

That will go over big, especially with those paying mainly only payroll taxes. I mean, if it's that easy, why not do it now?

 

[gerntz]

SS will always be able to pay. The money can be borrowed and printed.

And thus be worth less. But you're right, they can say they paid all the dollars whether they can buy anything or not.

 

[gerntz]

Sure one can avoid paying VAT taxes and Sales taxes by not buying anything, let your money sit unused.

This will cause a rise in the cash only, underground economy.

Didn't say not buy anything, just less. Happens all the time when sales/luxury/VAT/wealth taxes are raised.

 

[Montecfo]

Well you can argue there have been tax laws which favored the rich the last 2-3 decades.

In any event, there is inequality, which has been growing during the same time.

Some people think it’s a problem hitch needs to b addressed, some don’t.

I would have to hear that argument. Over the past 20 years millions of people have gone completely off the income tax rolls.

 

[Montecfo]

That will go over big, especially with those paying mainly only payroll taxes. I mean, if it's that easy, why not do it now?

Well bigger fish to fry, but I agree, they should.

 

[joeea]

I would think so. Even ex spouses in some cases.

So, "If you or some very close relative doesn't pay you don't get a check."

 

[YoungSaver]

Y'know....I'm almost 68 years old.
Gone through red presidents and congresses, blue presidents and congresses--and any mix thereof--high taxes, low taxes, high inflation, no inflation, new laws, rescinded laws coupled to dozens of scare tactics of our impending doom: "unless we.....".

I'm trying to think of one thing in all of that noise that has dramatically changed my life financially or my overall lifestyle for that matter. I'm still living the same life I always have and the life I had imagined for my future self back then.

Nothing DC has come up with has forced me to modify my financials or made me change my direction of how I live and I really don't expect it to change any time soon.

Really?
401(k) didn't change anything for you? I'm much younger than you, but 401(k) has been the biggest financial change in my life since being of age to contribute to it.
Roth IRA was another big one for me.
Clinton's tax credits for college was huge to me.
I don't know the history of IRS Pub 502 (deducting medical expenses) but that one has been big to me.
HSA is another big one for me.
Obamacare?

 

[marko]

I might have qualified my comment with "negatively affected", but I suspect I'd be where I am with or without 401k. Way too high income for ACA.

Really?
401(k) didn't change anything for you? I'm much younger than you, but 401(k) has been the biggest financial change in my life since being of age to contribute to it.
Roth IRA was another big one for me.
Clinton's tax credits for college was huge to me.
I don't know the history of IRS Pub 502 (deducting medical expenses) but that one has been big to me.
HSA is another big one for me.
Obamacare?

 

[Senator]

Conversely, do you raise everyone by cutting taxes for the rich?

I have never been hired by a poor person. I have had major incentives to work by not getting handouts.

It's near impossible to cut taxes for someone that doesn't pay them...

Didn't say not buy anything, just less. Happens all the time when sales/luxury/VAT/wealth taxes are raised.

As a corollary, I would guess that income taxes cause people to work less, and capital gains taxes causes people to invest less.

Sure one can avoid paying VAT taxes and Sales taxes by not buying anything, let your money sit unused.

This will cause a rise in the cash only, underground economy.

Actually, income taxes do exactly that. I know several people that work for cash, and make $50K a year or more. Sooner or later all that cash gets spent at a retailer. Not too many people manufacture stuff to sell.

 

[Chuckanut]

So, "If you or some very close relative doesn't pay you don't get a check."

Perhaps I misstated. What I should have said is that for most of us either we paid into SS or a close relative did such as a parent or spouse did.

Most of us won't get a SS check simply because we turn 62. We or somebody like a spouse or parent must have qualified.

https://www.dummies.com/personal-fi...fies-for-social-security-retirement-benefits/

Here's an interesting one:

https://www.investopedia.com/retirement/8-types-americans-who-wont-get-social-security/

What follows are the eight most common categories of workers who don't qualify for benefits.

Time to get back on topic.

 

[joeea]

I have never been hired by a poor person. I have had major incentives to work by not getting handouts.

It's near impossible to cut taxes for someone that doesn't pay them...

The question was "Do you raise everyone by cutting taxes for the rich".

Either you didn't understand, or simply chose to ignore it.

 

[joeea]

Perhaps I misstated. What I should have said is that for most of us either we paid into SS or a close relative did such as a parent or spouse did.

Most of us won't get a SS check simply because we turn 62. We or somebody like a spouse or parent must have qualified.

That makes more sense.

 

[Alan]

Thanks for the interesting discussion.