Taxing wealth a way to tax Roth IRAs?

[NW-Bound]

I do not mind paying taxes, but it bothers me when a guy who made the same money I did in our career, but blew it all instead of saving, gets preferential treatment because I get deemed rich, and he poor.

Less SS for me, and more for him because he "needs" it more than I do, even though we contributed the same.

 

[Marc]

I do not mind paying taxes, but it bothers me when a guy who made the same money I did in our career, but blew it all instead of saving, gets preferential treatment because I get deemed rich, and he poor.

Less SS for me, and more for him because he "needs" it more than I do, even though we contributed the same.

+1

 

[foxfirev5]

In addition to this scheme there is the "tax cap gains annually and at the ordinary income rate" as well as the "dramatically lower the inheritance tax exemption" idea currently floating around.

What bothers me is that within the subtext of all these ideas is that there is a punitive tone to them. While couched in 'fairness' there seems to be more of a goal to simply punish those with greater wealth.

Yet, as I've often maintained, the rich have plenty of options to dodge such things. The predictions of income generated always naively assumes status quo vs the work of clever accountants, lobbyists, corporations and trusts. It always sounds good but most often falls far short of the mark.

Wake me if any of these ideas ever come to pass.

While we need to keep an eye on the lyin b******ds running the country I agree with your assessment. Just tell me the rules and I'll play the game. I've got no choice and I'm really not all that rich.

 

[joeea]

Some have proposed a tax on a person’s total net worth.

This sounds like a potential backdoor way to tax Roth accounts.

Or, am I turning into a cynical man of experience?

There's plenty of wealth that isn't contained within a Roth account.

 

[Chuckanut]

Even if the wealth tax is passed and proved successful to reduce the wealth of the ultra rich, can anyone be sure that it would result in raising the net worth of the poor?

What a question! I am forced to add you to my list of dangerous radicals who infest this site. Just relax, stop thinking, pay your fair share, and assume the money will go where it is most needed.

"Yond NW-Bound has a lean and hungry look. He thinks to much. Such men are dangerous." - with apologies to Shakespeare

 

[marko]

I do not mind paying taxes, but it bothers me when a guy who made the same money I did in our career, but blew it all instead of saving, gets preferential treatment because I get deemed rich, and he poor.

Less SS for me, and more for him because he "needs" it more than I do, even though we contributed the same.

+1 Kudos.

 

[38Chevy454]

I agree. To put in other words, you don't raise yourself by bringing others down. That is the root problem with all of the tax the rich proposals.

I do not mind paying taxes, but it bothers me when a guy who made the same money I did in our career, but blew it all instead of saving, gets preferential treatment because I get deemed rich, and he poor.

Less SS for me, and more for him because he "needs" it more than I do, even though we contributed the same.

 

[bolt]

First step: have recipients report NW so it is known who needs it or not.

Sure, your forced to pay for an insurance produc(SScredits) by .gov and when someone else's .gov products they to were forced to pay for (SScredits) falls short for them because of their input you have your .gov products costs, sacrifices & plans disrupted. unreal

 

[HFWR]

I do not mind paying taxes, but it bothers me when a guy who made the same money I did in our career, but blew it all instead of saving, gets preferential treatment because I get deemed rich, and he poor.

Less SS for me, and more for him because he "needs" it more than I do, even though we contributed the same.

Preferential treatment would have to come from somewhere other than SS. If your wages were identical, wouldn’t your benefit be similar, assuming a similar career length, of course.

 

[zinger1457]

I do not mind paying taxes, but it bothers me when a guy who made the same money I did in our career, but blew it all instead of saving, gets preferential treatment because I get deemed rich, and he poor.

Less SS for me, and more for him because he "needs" it more than I do, even though we contributed the same.

Having to live in retirement on SS alone is sufficient punishment IMO for anyone that had the opportunity to save but didn't.

 

[NW-Bound]

Preferential treatment would have to come from somewhere other than SS. If your wages were identical, wouldn’t your benefit be similar, assuming a similar career length, of course.

When money is needed, they may come up with a tax or some indirect method to claw back the SS if you have 401k/IRA/Roth. Taxmen can be very ingenious. I will not underestimate them.

 

[Senator]

When SS can't pay all its benefits requirements in 15 years or so, where they going to get it if not this way?

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

 

[NW-Bound]

I agree. To put in other words, you don't raise yourself by bringing others down. That is the root problem with all of the tax the rich proposals.

The argument for taxing the rich has always been that it provides funding to allow the government to enact social programs to help the poor. I am not against helping the poor, but it is not easy to define programs to really help them in the long run.

We need to create good jobs, not just to provide perpertual meals on wheel. Even the education assistance has proven quite costly and hurts the clueless college students more than it helps them. Jobs are created by private enterprises more than by the government. Maybe people blowing dough can create jobs better than the government knows how to.

Seeing negative interest rates in Europe makes me wonder why people do not invest in anything, and have to let the money sit there stagnant and get taken away. Do people have everything they need and there's no need to produce anything more? Nobody can come up with anything for workers to do?

 

[explanade]

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.

 

[joeea]

I agree. To put in other words, you don't raise yourself by bringing others down. That is the root problem with all of the tax the rich proposals.

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

 

[joeea]

When money is needed, they may come up with a tax or some indirect method to claw back the SS if you have 401k/IRA/Roth. Taxmen can be very ingenious. I will not underestimate them.

We can imagine all sorts of thing, if we try hard enough.

 

[NW-Bound]

In the 1960 case of Flemming v. Nestor, Nestor sued the government when his SS benefit was terminated when he was deported for his involvement in the Communist Party.

The US Supreme Court ruled that

... there is no contractual right to receive Social Security payments. Payments due under Social Security are not “property” rights and are not protected by the Takings Clause of the Fifth Amendment. The interest of a beneficiary of Social Security is protected only by the Due Process Clause.

Under Due Process Clause analysis, government action is valid unless it is patently arbitrary and utterly lacking in rational justification. This provision of §202 is not irrational; it could have been justified by the desire to increase the purchasing power of those living in America, because those living abroad would not spend their payments here.

This means Congress could even choose to not provide SS to American expats if it wanted to.

Whether a law changing SS benefit is passed or not will depend on how many in the populace will be affected. Congressmen need people's votes after all. A law affecting a minority is more likely to get passed. And it would still be constitutional. The above case already set a precedent.


See: https://en.wikipedia.org/wiki/Flemming_v._Nestor.

 

[joeea]

In the 1960 case of Flemming v. Nestor, Nestor sued the government when his SS benefit was terminated when he was deported for his involvement in the Communist Party.

The US Supreme Court ruled that




This means Congress could even choose to not provide SS to American expats if it wanted to.

Whether a law changing SS benefit is passed or not will depend on how many in the populace will be affected. Congressmen need people's votes after all. A law affecting a minority is more likely to get passed. And it would still be constitutional. The above case already set a precedent.


See: https://en.wikipedia.org/wiki/Flemming_v._Nestor.

Yup, that 1954 amendment means there will surely be a flurry of new laws now.

 

[GrayHare]

First step: have recipients report NW so it is known who needs it or not.

"Wait, you mean that's a real Picasso on my wall? Gosh, during all those tax years I thought the painting was a fake."

 

[ncbill]

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.

It's been a lot longer than that.

IIRC, U.S. federal capital gains rates dropped not long after WWII back to around 25% and have spent most of the time since bouncing between 15-20%.

Those now subject to the additional 3.8% surcharge are paying some of the highest rates historically post-WWII.

 

[marko]

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.

I travel, eat out a few times a week, winter in Florida, drive nice cars and boats and live in a nice neighborhood; the bills get paid on time.

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. Do I pay a few bucks more in taxes for one thing or another? Sure, but overall, I don't see how it's affected me in any dramatic way.

I suspect that is because very little does in fact change despite all the noise and cage rattling. I'd say that what my local town mayor decides to do affects me a hundred times more than anything coming out of DC.

JMHO

 

[Chuckanut]

IMHO, one of the benefits of SS is that nearly everyone pays in and nearly everyone gets a benefit check. If you or some very close relative doesn't pay you don't get a check.

The payment inflection points already provide 'extra' benefits for low income people. The percent taxed points also provide some additional help for lower income folks. IMHO, adding more needs based criteria would destroy its credibility and, therefore, its public support.

 

[NW-Bound]

Yup, that 1954 amendment means there will surely be a flurry of new laws now.

No need for a flurry. Just a law that hits the right spot is enough.

OK. Enough kidding around.

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.

I like to watch all this to see how it will unfold, but am not losing any sleep over it. I spend more time contemplating my next moves in trading the market, er, fortuitous rebalancing. It's something on which I can act unilaterally.

 

[Sunset]

Doesn't VAT only apply to those that spend? If so, it would just reduce spending. As they say, tax what you don't want much of: food, clothes, income, wealth, etc.

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.

 

[joeea]

IMHO, one of the benefits of SS is that nearly everyone pays in and nearly everyone gets a benefit check. If you or some very close relative doesn't pay you don't get a check.

Are spouses very close relatives?