Poll: Which of these is unethical?

[SecondCor521]

The percentages add up to more than 100%. Maybe adding 'None of the above' screwed things up.

The poll allows people to vote for more than one option. So for a random example, a person could vote for the ACA income item AND the Medicaid structuring item. That's why the percentages add up to more than 100%.

 

[skipro33]

I am sure people understand the intent of the laws regarding each of these.
I suppose that's the 'ethical' test; are you using the benefit for it's designed purpose or not. I'm a black-n-white sort of guy. I won't say I'm above not attempting, but I do need to be able to sleep at night and live with myself too. Some where, someone who doesn't have the same options as those here who are FI, is going to miss out on a medical treatment due to insufficiant funding because someone else scammed the system and they are going to suffer. If that something you can live with, rationalize, ignore or deny, then good for you.

My taxes pay for those programs for the less fortunate or temporarily underfunded. Not only are they affected when someone scams, but so am I. It steals from me. ACA and Medical are funded with my money.

 

[MichaelB]

Mods... can you delete the word "most" from the thread title?

Done

 

[pb4uski]

.... Some elderly who have lost spouses will remarry to hang onto those benefits.

I always thought that it was the opposite... that some elderly widows or widowers will not remarry because if they did so then their benefits will go down... like where their deceased spouse had a higher benefit than the person that they are now shacking up with.

Similarly, the divorced CEO's spouse decides to live with their new love but not marry to retain higher benefits.

 

[Mr._Graybeard]

As for collecting unemployment benefits, I have done so 2x in my career. The first time it took me over 1 yr to find equivalent work. The 2nd time I was 55 yrs old and had no expectation that, in my field, I would actually find an employer willing to hire me. That didn't stop me from making applications to job openings and collecting unemployment while doing so. If the right job offer came, I would have taken it. BTW, It didn't. Maybe that is unethical or immoral. It was legal.

In my state, you have to document your efforts to find work in a weekly questionnaire to qualify for unemployment benefits. When I took my separation package in 2013, management told me they would not challenge my application for UI ... but the prospect of committing fraud once a week deterred me. Others who also left the company did apply and receive UI, but the state sniffed a few of them out and demanded the money back.

 

[PatrickA5]

One example might be a 60 yo single person with $2 million who has just ERed.

In the first case, he puts his $2 million in a irrevocable trust so if he needs LTC that Medicaid will pay for it and his nieces and nephews will get the money.

In the second case, between ER and Medicare he draws from taxable accounts rather than tax-deferred accounts to keep his income low enough that he qualifies for subsidies.

To me, those are quite different... with the first egregious and the second benign.... but to you and others.... not so much.

I understand what you're saying, but in each case you still have someone with $2 million in the bank being subsidized by the government for something they can easily afford.

 

[pb4uski]

Fair point... but one is taking extraordinary effort to get those benefits and the other is just living off savings.... though I guess perhaps you might expect the person living off of savings that qualifies for subsidies to just not accept the ACA subsidies and pay the full premium themselves.

 

[audreyh1]

I understand what you're saying, but in each case you still have someone with $2 million in the bank being subsidized by the government for something they can easily afford.

Not quite. In the first case he gave away his $2M to his heirs so that he would have no assets and qualify for Medicaid. No $2M in the bank for this dude!

 

[gayl]

I opted for manipulating income / assets to qualify for medicaid housing / ACA. If someone has the funds to pay for it, why should I THE TAXPAYER subsidize them?

Sidetrack: As far as UI, in this state if you accept a position paying less than your UI benefit then you're eligible for the difference + $ while looking for FT employment. If not looking $0. So seasonal (ie: Christmas workers, taxpreparers, summer camp employees) get a benefit for hustling

 

[PatrickA5]

Not quite. In the first case he gave away his $2M to his heirs so that he would have no assets and qualify for Medicaid. No $2M in the bank for this dude!

True! Their heirs will be happy!

If I have to go to a nursing home, my kids will just have to understand. I'm using MY money to get the best possible care. In my state, I've heard some Medicaid-paid nursing home horror stories. I want to at least have the opportunity to start out in a nice place.

 

[PatrickA5]

Fair point... but one is taking extraordinary effort to get those benefits and the other is just living off savings.... though I guess perhaps you might expect the person living off of savings that qualifies for subsidies to just not accept the ACA subsidies and pay the full premium themselves.

Agreed. Definitely easier to get the ACA subsidies than going through the hassles of sheltering your assets in a Trust.

 

[Sunset]

Interesting viewpoints.

One thing I notice in these choices is some of them like Roth Conversions, means a person is willingly paying more taxes early for a hopeful benefit later. So there is a "cost" to taking this action.

Same with deciding to optimize SS - either early or delayed from FRA, could mean there is a "cost" to this action of less benefits for a long life, or die before collecting.

Even managing income for ACA subsidies could cost someone, because if they had not prepared for years to do this, they would need to live more poorly than normally available to themselves.

Structuring assets for Medicaid, if not done wrongly, does cost a little bit of legal fees, but this does not feel like a cost to me as the benefit is huge and the cost is just a few thousand once, unless you get stuck in a really crappy setting since you cannot pay for a deluxe setting.

The only one I don't see a cost in money, is taking UI when faking looking for a job.

 

[flintnational]

I opted for manipulating income / assets to qualify for medicaid housing / ACA. If someone has the funds to pay for it, why should I THE TAXPAYER subsidize them?

If taxpayer subsidization is the test for ethics on these items, would it then be okay to pursue these benefits as long as the recipient paid enough taxes over their lifetime? IOW, others are not subsidizing the recipient. Accordingly, I don't think that can be the test. And, lets assume the recipient followed the rules when he paid his taxes. We are now asking him to use a different standard.

That being said, I do not like the medicaid situation either. But, I don't think it is unethical, just bad policy that should be changed.

 

[audreyh1]

True! Their heirs will be happy!

If I have to go to a nursing home, my kids will just have to understand. I'm using MY money to get the best possible care. In my state, I've heard some Medicaid-paid nursing home horror stories. I want to at least have the opportunity to start out in a nice place.

Same here (although no kids)

Some folks feel very strongly about giving their children an inheritance and don’t want that “evil nursing home to take it all”.

 

[4legsgood]

I wonder if the poll results would be different if it was phrased, which of these strategies
-have been available to you-, and you find unethical. Friend with big pension (so can't manage income level) accused me of 'cheating on my taxes' when I explained doing gradual roth conversion to keep in a certain tax bracket. They deducted hot tub installed at second home as a medical expense.

 

[pb4uski]

Same here (although no kids)

Some folks feel very strongly about giving their children an inheritance and don’t want that “evil nursing home to take it all”.

True, but at the same time they take pride in not taking "government handouts"... so what do they do other than be conflicted.

If they really feel so strongly about not letting the "evil nursing home to take it all" then they should have bought LTC insurance.... my parents did.

 

[pb4uski]

.... Friend with big pension (so can't manage income level) accused me of 'cheating on my taxes' when I explained doing gradual roth conversion to keep in a certain tax bracket. They deducted hot tub installed at second home as a medical expense.

 

[audreyh1]

True, but at the same time they take pride in not taking "government handouts"... so what do they do other than be conflicted.

If they really feel so strongly about not letting the "evil nursing home to take it all" then they should have bought LTC insurance.... my parents did.

There is an amazing amount of cognitive dissonance out there.

And LTC Insurance doesn’t completely protect you from the “evil nursing home taking it all” but can at least delay it in the worst cases.

 

[CRLLS]

In my state, you have to document your efforts to find work in a weekly questionnaire to qualify for unemployment benefits. When I took my separation package in 2013, management told me they would not challenge my application for UI ... but the prospect of committing fraud once a week deterred me. Others who also left the company did apply and receive UI, but the state sniffed a few of them out and demanded the money back.

Our state does have the same requirement. However, one does not need to send those records in to get a check. If they suspect fraud, you must show your documentation that you were applying/searching. I never got audited.

Maybe because my 6 mo of benefits started just before they extended the period to 12 mo and then 18 mo for people who filed right after me. That recession was tough for a lot of people. I was small pickings.

I think I can throw out those records now. Thanks for reminding me.

 

[ivinsfan]

Maybe you should have added "Taking a child dependent deduction when a single person is unable to do it"

I am more concerned with continually paying to support other peoples children than someone maximizing the tax code to avoid taxes.

Well just curious as you have mentioned many times that your GF who lives with you and is not employed get basically free health care even though your household income is quite large. You can't have it both ways.. take advantage of things that improve your bottom line and fuss about other people doing the same. Both items are part of the tax code/ACA laws ....

 

[Fermion]

Pension spiking would have been a good one to put in there.

 

[Big_Hitter]

If they really feel so strongly about not letting the "evil nursing home to take it all" then they should have bought LTC insurance.... my parents did.

LTC insurance is very difficult to get nowadays

 

[gayl]

If taxpayer subsidization is the test for ethics on these items, would it then be okay to pursue these benefits as long as the recipient paid enough taxes over their lifetime? IOW, others are not subsidizing the recipient. Accordingly, I don't think that can be the test. And, lets assume the recipient followed the rules when he paid his taxes. We are now asking him to use a different standard.

I don't think my taxes go into a "general bank account" to be doled out over time. I think it goes out of the feds as fast as it comes in. So we agree to disagree. If one has the income, one should pay the bill IMHO. OTOH I have no problem paying subsidies for those who can truly not afford it

 

[razztazz]

I don't think my taxes go into a "general bank account" to be doled out over time. I think it goes out of the feds as fast as it comes in. So we agree to disagree. If one has the income, one should pay the bill IMHO. OTOH I have no problem paying subsidies for those who can truly not afford it

Seems like most of the tax diddling I read about, especially when things like ethics are mentioned, is really to side step the booby traps of the marketplace. i.e. Can't afford it. So all manner of malleable "ethics" are invoked to rationalize the tax diddling to One's personal benefit.

Me? I always ask: So how much does it cost? And pay the thing. If I am due something of "my own", I sign up for it. But I never game the system nor look to game the system whether public or private. Seems like too much work for a few bucks anyway.

 

[HadEnuff]

I bought a house with a mortgage and real estate tax obligations. Part of my calculations regarding affordability for me was the tax deductibility of my real estate taxes. I played by the rules when I made my decision, and the current regime has since changed the rules, which will effect me negatively in at least two ways: My taxes will cost me more out-of-pocket than when the game started, and unless the law changes back before I sell, the new rules of the game will most likely have a negative effect on the affordability for a potential buyer, hence, my resell will most likely suffer.

Sometimes the rules bite you in the a$$, and there is nothing you can do about it. Sometimes the rules give you a break. Seems kind of stupid to take some moral high ground and deny yourself the opportunity to take advantage of the few opportunities to reduce your taxes or qualify yourself for a program you, in other ways, help fund.