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09-11-2019, 08:13 PM
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#21
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Full time employment: Posting here.
Join Date: Apr 2019
Posts: 630
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Quote:
Originally Posted by mpeirce
Even if it started at $50,000,000 do you really believe it would never get lowered?
In 1913 (when the 16th amendment was ratified), the top tax bracket was 7 percent on all income over $500,000 (roughly $12 million in today’s dollars).
Funny how that didn't stick.
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EXACTLY! Anyone on this site should uniformly oppose any such legislation. It only takes a pen stroke to lower the tax threshold. It gets real when it gets lowered to the point that it affects our retirement.
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09-11-2019, 08:13 PM
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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: Jul 2008
Location: Leeward Oahu
Posts: 17,809
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Quote:
Originally Posted by mpeirce
Even if it started at $50,000,000 do you really believe it would never get lowered?
In 1913 (when the 16th amendment was ratified), the top tax bracket was 7 percent on all income over $500,000 (roughly $12 million in today’s dollars).
Funny how that didn't stick.
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Yep, there's not much money among the rich - by comparison to us "comfortable" folk. Oops. Think I smell bacon. YMMV
__________________
Ko'olau's Law -
Anything which can be used can be misused. Anything which can be misused will be.
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09-11-2019, 08:14 PM
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#23
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Feb 2011
Location: NC Triangle
Posts: 5,807
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Quote:
Originally Posted by zinger1457
I guess I should have use the sarcastic emoji instead of the smiley.
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Your humor was not lost on the unwashed masses.
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09-11-2019, 08:17 PM
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#24
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Full time employment: Posting here.
Join Date: May 2013
Posts: 609
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I was thinking about the argument in favor of a wealth tax, and it’s basically that very wealthy people do not recycle their wealth back into the economy....they sit on it. I personally couldn’t care less what someone else chooses to do with their funds, but if we get to this place of making the wealthy give it up they should be given the choice to either be taxed or spend it. Instead of a 1% wealth tax, they can prove they spent 1% of net worth on consumer goods.
__________________
Saved 8 figures by my mid-40's as a professional bubble-spotter. Beware...the Fed creates bubble after bubble after bubble.
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09-11-2019, 08:30 PM
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#25
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by pb4uski
+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?
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That's what wealth tax is. Instead of "capital gain tax", it's now just "capital tax". You pay tax on your retirement account, even in years when you lose money. Heck, you pay tax even if you already pay negative interest rate.
The only way to avoid wealth tax is to not have wealth.
Quote:
Originally Posted by RenoJay
I was thinking about the argument in favor of a wealth tax, and it’s basically that very wealthy people do not recycle their wealth back into the economy....they sit on it. I personally couldn’t care less what someone else chooses to do with their funds, but if we get to this place of making the wealthy give it up they should be given the choice to either be taxed or spend it. Instead of a 1% wealth tax, they can prove they spent 1% of net worth on consumer goods.
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Consumer goods? Could that be why the French have the Hermčs woman bag that sells for $265,000? They really know how to "blow the dough".
Oh wait! The bag is a personal property! It is included in the assets to be taxed. Arghhh...
Perhaps you can depreciate it to lighten up the bag tax with time. The problem is some of these bags commanded as high a price when auctioned in the used market. You will need to have your bag appraised, and document the lower price.
I tell you, there's no escape.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 08:46 PM
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#26
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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Quote:
Originally Posted by NW-Bound
Yes, the French got it figured out. Hence the exemption limit is just 800,000 euros.
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False. There is no such thing today at any wealth level.
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09-11-2019, 08:52 PM
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#27
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Each of the Switzerland cantons has a different wealth tax, but generally networths below 100,000 Swiss francs are not taxed. The exemption is even lower than the French level.
From what I read, where there's wealth tax, home values are also included. RE tax is of course something else. Cars, boats, planes, motorcycles, they are all included. Again, vehicle license tax is something else. Wealth tax is added on top of all the normal taxes.
On the other hand, France excludes collectibles. Hmmm... So your family heirloom is probably excluded. I wonder if the Hermčs bag is considered collectible or not.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 09:15 PM
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#28
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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: 36,266
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Quote:
Originally Posted by RenoJay
I was thinking about the argument in favor of a wealth tax, and it’s basically that very wealthy people do not recycle their wealth back into the economy....they sit on it. I personally couldn’t care less what someone else chooses to do with their funds, but if we get to this place of making the wealthy give it up they should be given the choice to either be taxed or spend it. Instead of a 1% wealth tax, they can prove they spent 1% of net worth on consumer goods.
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Wealth is invested and presumably creating jobs and profits for th investors.... it's not like it is sitting in a savings account at some bank.... even then it would be being used for loans.
__________________
If something cannot endure laughter.... it cannot endure.
Patience is the art of concealing your impatience.
Slow and steady wins the race.
Retired Jan 2012 at age 56
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09-11-2019, 09:18 PM
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#29
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gone traveling
Join Date: Jun 2008
Posts: 424
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The more mis-information and apathy displayed toward .gov changing retirement ROTHs spreads in forums like this one the more probability of its manifestation.
Do you not think the internets data is amassed, added to the equation, and influences legislation?
Do you remember the Pennesylvania (Dems) introduction of the 1/1/1954 SocialSecurity ammendment that passed omitting the file and suspend strategy before '54? Its draftee was reelected...afaik.
The wealthy keep their money secure, abroad, in trusts, etc. not in ROTHs.
Only you can attempt to prevent Roth legislation changes with demonstrations & votes.
Yeaaa,...rrrrrright. (RPryor)
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09-11-2019, 09:34 PM
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#30
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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Quote:
Originally Posted by pb4uski
Wealth is invested and presumably creating jobs and profits for th investors.... it's not like it is sitting in a savings account at some bank.... even then it would be being used for loans.
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Wealth tax is levied on the ownership of the shares of public companies that you own, or that private company of yours. It is not just the balance of your bank account.
They even talk about how to tax a start-up company that is not yet publicly traded in order to have a public valuation of the company.
There's a lot of ramifications. It's not simple.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 09:41 PM
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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: Jul 2008
Posts: 35,712
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By the way, some countries used to have a marginal rate as high as 4% for the wealth tax. And remember that they do not have that high an exemption level. Recall that it is 800,000 euros for France, and 100,000 CHF for Switzerland.
4%? Hey, that's the commonly accepted SWR for a portfolio in US stocks. At that rate, if you do not draw any on your own, and just have it taxed, your stash should last 30 years.
But that's US stock return, mind you. Is there a FIRECalc version with European stocks to see what the SWR would be? Oh man, the more you think about it, the more interesting it is.
PS. OK, I was wrong. The 4% tax is on the current portfolio balance. So, as the stash diminishes, the tax is also reduced in dollar amounts. The stash will shrink until it gets to the exemption level, where the tax stops. Or if the tax is progressive, the stash will shrink to a lower level where the tax rate is lower.
In real life, I think the wealth tax will keep the stash from even growing in the first place.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 09:47 PM
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#32
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Williston, FL
Posts: 3,925
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There has also been talk of a financial transaction tax. Maybe a 0.1% tax on every stock transaction. Sell $10K and you pay an extra $10.
It's not much, but will reduce high-frequency trading and only impact the 'rich'. Including the Roth IRAs.
I would say there is a very high likelihood for this tax to be in effect in the near future.
__________________
FIRE no later than 7/5/2016 at 56 (done), securing '16 401K match (done), getting '15 401K match (done), LTI Bonus (done), Perf bonus (done), maxing out 401K (done), picking up 1,000 hours to get another year of pension (done), July 1st benefits (vacation day, healthcare) (done), July 4th holiday. 0 days left. (done) OFFICIALLY RETIRED 7/5/2016!!
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09-11-2019, 09:55 PM
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#33
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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I just thought about the thread where people boast of having zero WR from their stash because they can live off just pension and SS.
Will see if anyone can claim zero WR with a wealth tax as they have had in Europe. The government will do the withdrawal for you. And after paying you "negative interest rate" on your fixed income AA.
This is so funny. Life is full of the unexpected. It's wonderful.
__________________
"Old age is the most unexpected of all things that happen to a man" -- Leon Trotsky (1879-1940)
"Those Who Can Make You Believe Absurdities Can Make You Commit Atrocities" - Voltaire (1694-1778)
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09-11-2019, 11:43 PM
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#34
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Thinks s/he gets paid by the post
Join Date: Sep 2006
Posts: 1,691
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Quote:
Originally Posted by mpeirce
Even if it started at $50,000,000 do you really believe it would never get lowered?
In 1913 (when the 16th amendment was ratified), the top tax bracket was 7 percent on all income over $500,000 (roughly $12 million in today’s dollars).
Funny how that didn't stick.
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There’s a saying about “a camels nose under the tent” ....
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09-12-2019, 05:11 AM
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#35
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Recycles dryer sheets
Join Date: Jun 2017
Posts: 98
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Yeah, the $50M is the first crack in the dam. As they run out of other people's money to fund their ambitions, that threshold will drop.
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09-12-2019, 05:20 AM
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#36
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Thinks s/he gets paid by the post
Join Date: May 2019
Posts: 2,727
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Quote:
Originally Posted by Chuckanut
Agreed. It is a far cry. My concern is that it opens a back door to taxing Roths indirectly. And the minimum wealth needed to pay the tax will go down over the years.
FWIW, the sales tax where I live used to be about 7.5%. It is now 10%. These taxes have a way of going up and not going down.
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Yep. My sales tax has gone from 5% to 10% over my purchasing lifetime. Add on a future national sales tax, consumption tax, or what have you is another way to tax more of that Roth and all other money as you spend it.
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09-12-2019, 06:15 AM
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#37
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Thinks s/he gets paid by the post
Join Date: Feb 2014
Location: Syracuse
Posts: 3,501
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Other than the gold coins in coffee cans I have buried in the back yard I imagine the US government could compute my wealth within 2% in a bit less than a millisecond.
Quote:
Originally Posted by Dtail
Not sure how easily one's wealth can be measured by the gov't.
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__________________
“No, not rich. I am a poor man with money, which is not the same thing"
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09-12-2019, 06:24 AM
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#38
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,202
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A mod asked that we focus more on strategies that might be used. Some seem obvious, unless they find a way to block them:
- Hide assets in trusts.
- Move assets overseas.
Smaller things one could do:
- Possibly buy annuities or whole life insurance, if they don't count these as assets. Probably they would.
- Convert tIRAs to Roth. A pre-tax holding would be higher than a post-tax Roth, so you'd have a smaller net worth subject to a wealth tax.
- Delay SS as long as you can to spend down assets in return for a greater income flow later.
- Jobs with pensions may return as people would rather the corporation hold the asset that gives them income later rather than individuals holding the money in IRAs.
While I agree this could be the camel's nose thing, right now the camel is still outside the tent with little chance of it getting in at all.
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09-12-2019, 06:43 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: Mar 2011
Posts: 8,363
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Quote:
Originally Posted by RunningBum
While I agree this could be the camel's nose thing, right now the camel is still outside the tent with little chance of it getting in at all.
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+1 I try to limit my worry list to things that will actually happen.
Even when these unlikely things are enacted, there are so many exclusions, exceptions and exemptions that very few, if any end up paying the full freight.
__________________
Living well is the best revenge!
Retired @ 52 in 2005
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09-12-2019, 06:50 AM
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#40
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,479
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Annuities and trusts would become very popular I think, though a net worth tax would probably apply independently to trusts so each would have to be less than the exemption.
More people will renounce U.S. citizenship.
The real estate appraisal business will take off like a rocket.
__________________
FI and Semi-ER March 24, 2017
Consulting to stay engaged
"All models are wrong, some are useful." - George Box
“There is always a well-known solution to every human problem: neat, plausible, and wrong.” - H.L. Mencken
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