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How poverty affects intellegence

 
 
Reply Mon 9 Jun, 2014 07:51 am
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Type: Discussion • Score: 8 • Views: 2,797 • Replies: 72

 
woiyo
 
  1  
Reply Mon 9 Jun, 2014 08:13 am
@bobsal u1553115,
This is why we need the Estate Tax to go back to the prior limits. Gee, wonder if both Democrats and Republicans will vote do that sine it was both partied who raised the exemption limit to 10M per couple.

What do you think?
bobsal u1553115
 
  1  
Reply Mon 9 Jun, 2014 08:23 am
@woiyo,
I think not bringing poverty down will cost us more than bringing it down.

I think a $10M exemption while there is so much wrong going on is a sin and a crime.
0 Replies
 
Baldimo
 
  0  
Reply Mon 9 Jun, 2014 08:58 am
@woiyo,
So the money someone else earned and wants to pass down to their children should be heavily taxed? Why punish success? What is the fascination with taking from those who have earned and giving it to those who haven't?

chai2
 
  -2  
Reply Mon 9 Jun, 2014 09:23 am
@Baldimo,
Agreed.

The people who leave it to heirs have already paid taxes on it. It's taxing it a 2nd time.

Why, they have no right to give their heirs, or charities, or whoever, everything they have.
woiyo
 
  2  
Reply Mon 9 Jun, 2014 10:51 am
@Baldimo,
We tax income in this country. Not Wealth. Taxes is societies way of building and maintaining a Free Nation for All. Thomas Jefferson, Ben Franklin, Thomas Payne and many of our founding fathers were dead against the elites gaining too much power and influence. If not for the freedoms afforded to the "elite" and those who, as you say, earned it the hard way, they never would have enjoyed their success during their lives. The "offspring" have no rights to their property. Having the ability to tax wealth, currently in excess of 10M (an insane amount), at 40% is not too much to ask. Remember, the first 10M goes tax free. so I would love to hear why taxing the first dollar over 10M at 40% is such a bad thing for the children.
woiyo
 
  2  
Reply Mon 9 Jun, 2014 10:52 am
@chai2,
You obviously do not understand how the tax works. See the above post.

Remember, appreciation is not taxed. Only income.
0 Replies
 
chai2
 
  -1  
Reply Mon 9 Jun, 2014 11:14 am
@woiyo,
woiyo wrote:

Having the ability to tax wealth, currently in excess of 10M (an insane amount), at 40% is not too much to ask. Remember, the first 10M goes tax free. so I would love to hear why taxing the first dollar over 10M at 40% is such a bad thing for the children.


Says who as to why that's a bad thing? You?

Ok, I'll tell you my personal story of why. If you have a number of heirs, it's not like someone is getting 10 million. If it were decided to distributed equally, each has a base of only 2 million. That is not some incredible amount. If one or 2 heirs get the bulk of the estate, and others get more modest amounts/percentages. That 40% tax comes out of everyones share equally.

You are the one who obviously doesn't know what you're talking about....all the wealth over $10million is taxed with the inheritance tax. You said that yourself, but contradicted yourself in the post before.

Fortunatley, there are ways to shelter some amount over the $10 million, with A B Trusts. Each parent can shelter $2 million, not considered part of the $10 million.
Spouse A dies and leaves $2mil to Spouse B, who doesn't touch it. Spouse B dies with another 2 mill protected, effectively raising the amount to $14 mill before there are inheritance taxes.

Part of the reason people accumulate wealth is to leave as untouched as possible to their heirs. You ask if it's too much to ask that any of it be taxed?
Yes, it is too much to ask. It's their money, they paid tax when they earned it, they paid tax on the money the original earnings made, and on the earning that money makes, etc.
Then, that money that has already been taxed, gets taxed again (yes, the amount over 10 mill.)

I find it amusing that most of the people who bitch about inheritance tax will never even see near that much in their estate.

parados
 
  4  
Reply Mon 9 Jun, 2014 11:42 am
@chai2,
chai2 wrote:

Agreed.

The people who leave it to heirs have already paid taxes on it. It's taxing it a 2nd time.

Why, they have no right to give their heirs, or charities, or whoever, everything they have.

Actually, the often haven't paid taxes on the income when it is passed down.
Let's say someone bought 100 share of Microsoft in 1990 at $60 and never sold them. Those shares after the splits would be 4800 shares. If that person sells the shares before they die they would pay taxes on $190,000 in capital gains. If the person dies and the shares go to the heir. There would be zero paid on the capital gains because the basis for the shares for the heir is $196,000. They could sell them the day they receive them and pay no capital gains tax.

http://www.kiplinger.com/article/taxes/T055-C001-S002-cost-basis-for-inherited-stock.html
chai2
 
  -2  
Reply Mon 9 Jun, 2014 11:53 am
@parados,
That is true. The accountants have the choice to pick the price at DOD or a certain period later, something like a year or 18 months, taking whatever cost basis is lower.

That is a saving grace.
woiyo
 
  3  
Reply Mon 9 Jun, 2014 12:49 pm
@chai2,
First of all the exemption is 5.34M per person this year. Not 2M. The estate pays the Federal Estate tax on anything over 10.68M at a rate of basically 40%. If you are worth 14M then the estate is taxed on 3.32M at 40%. That tax is 1.3M. Therefore the heirs would receive 14M less 1.3M or 12.7M to split any way the wills and or trusts says.

When you talk about the growing split between the classes, this virtual elimination of the estate tax is one of the many reasons for the shrinking middle class. When you whine about the influence of the "elite", this is a part of the reason the "elite" grow stronger.

The "elite" have an obligation to contribute to society and (Yikes I will say it) redistribute part of the wealth they accumulated over their lives.

So keep this in mind the next time you whine about "the elite gaining too much power and influence".
woiyo
 
  2  
Reply Mon 9 Jun, 2014 12:50 pm
@chai2,
Again, you do not understand the system. The heirs will receive a step up in basis on the microsoft stock when it is inherited at death. The Estate will pay an Estate Tax on the value of the stock at DOD or 9 months after. No capital gains tax will ever be paid by the estate or the heirs.

This is a very generous "gift" in the estate tax system, which you were unaware of.
Baldimo
 
  -1  
Reply Mon 9 Jun, 2014 12:55 pm
@woiyo,
It shouldn't be taxed in the first place. The govt didn't earn that money the person who died earned that money. They should have free will to do with it as they please. If the includes leaving every penny to his children, then that should be allowed.

The offspring are the only people who have a right to that money. You sure as hell have no rights to that money. This is another way of taking things that aren't earned. Why shouldn't the kids get every dime? I don't think I founding fathers were big into taking what is earned and giving it to others. If you can find me anything from the founding fathers that stated they would be ok with taking someones inheritance then please provide the proof.
chai2
 
  -3  
Reply Mon 9 Jun, 2014 01:05 pm
@woiyo,
woiyo wrote:

Again, you do not understand the system. The heirs will receive a step up in basis on the microsoft stock when it is inherited at death. The Estate will pay an Estate Tax on the value of the stock at DOD or 9 months after. No capital gains tax will ever be paid by the estate or the heirs.

This is a very generous "gift" in the estate tax system, which you were unaware of.


So, all of a persons wealth is in stocks?

Please don't tell me I don't understand the system. I went through 5 years of probate on just such an situation.

Capital gains on stocks was the least of it.
chai2
 
  -1  
Reply Mon 9 Jun, 2014 01:06 pm
@Baldimo,
Baldimo wrote:


You sure as hell have no rights to that money.


Can I get an Amen?
0 Replies
 
woiyo
 
  3  
Reply Mon 9 Jun, 2014 01:22 pm
@chai2,
Not clear what your question is. And yes, there are people whose vast majority of their wealth is in securities.

And no you apparently do not understand the Estate TAx System.
Baldimo
 
  -1  
Reply Mon 9 Jun, 2014 01:24 pm
@woiyo,
That's just it, there shouldn't be an Estate Tax. As I noted the only people who should access to an inheritance are the people that it is given too. The govt has no rights to what was left for someone else.
woiyo
 
  3  
Reply Mon 9 Jun, 2014 01:30 pm
@Baldimo,
Well, you can feel that way, but then you can not complain about the concentration of power in the few "elite". History tells us the Founding Fathers did not agree with the aristocracy in England as they held way too much of the power over the people. The Estate Tax was the very first tax ever levied in this country in 1797 (A Stamp Tax) was used to rebuild the military of after the revolution.

The Constitution endowed Congress with the power to “lay and collect taxes,
duties, imposts and excises, pay the debts and provide for the defense and general welfare of the United States.” Yet, ever on guard against the power of a central government, the collection of taxes was left at the state level.
At the core of the Founding Fathers’ “American Experiment” was their collective rejection of European hereditary aristocracy and vast inequalities of wealth. As Thomas Paine, author of the first American bestseller, Common Sense in 1776, wrote, “All hereditary government is in its nature tyranny. Heredity succession is in its nature an absurdity, because it is impossible to make wisdom hereditary.” Many other leaders in government and business had similar feelings. Franklin D. Roosevelt (FDR) once said, “Great accumulations of wealth can not be justified on the basis of
personal and family security. Such inherited economic power was inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established this government.”

So as a "Conservative" you might not like the idea of a DEATH TAX. Yet, when you look at where the political system is being "bought and paid for", it is the few wealthy who control these elections and control these so called leaders.

0 Replies
 
woiyo
 
  3  
Reply Mon 9 Jun, 2014 01:32 pm
@Baldimo,
The Constitution does not provide property rights to the heirs either. At least last I checked.
0 Replies
 
hawkeye10
 
  -1  
Reply Mon 9 Jun, 2014 01:34 pm
@chai2,
chai2 wrote:

Agreed.

The people who leave it to heirs have already paid taxes on it. It's taxing it a 2nd time.

Why, they have no right to give their heirs, or charities, or whoever, everything they have.
the health of the collective comes first. If families collecting great wealth over generations hurt the health of the collective then we have a duty to ourselves to prevent it.
 

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