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[quote=”DavidCMurray”][quote=”puravidatexan”]Since David C is certain that the estate tax taking the family farm is a myth, perhaps he could solve my family dilemma. My Mom owns a beautiful place on the river that has been in my family for 150 years. When the new estate tax hits on January 1, 2013, the rate is set to be 55% with an exemption of $1 million. The close to 300 acres is valued on county tax rolls at $1.8 million. So if my 85 year old Mom dies in January, how do I pay the $440,000 that is due? And the government deserves to benefit–how?[/quote]
I certainly have no professional expertise in estate planning, so I can’t offer any concrete suggestions other than to get with a tax professional and start working out a plan now. I think I know, however, that family assets are often put into revocable trusts so that when the current owner dies, there is no taxable event.
[/quote]That’s all well and good, but how does one explain the need to do all of that “red tape” to avoid the payment of 55% to the government for land bequeth? The point being, the government should stay out of it, tax annual wealth accumulation, leave the rest alone.
No one has answered my previous questions, here’s one more, what happens when the givers don’t have anymore to give?
I knew I liked you. Fantstic move on the ripped check!
As I have said, the US has turned the corner on more takers than givers, with that there is no way to recover, the givers will take thier money somewhere else or become takers as well. That leaves no givers! Jesus was the only man I know of that could take a few fish and loaves of bread and feed the masses.
It will be interesting to see how this thing plays out, hopefully from a far enough away vantange point.
[quote=”DavidCMurray”]Yes, I am vehemently opposed to all the existing flat taxes (of which there are plenty) and any new ones. It isn’t a matter of fairness, which they are not. It’s a matter of the remaining disposable income.
Consider a family living on (say) $30,000 a year. If they paid the 17% Steve Forbes proposed in 1999, they’d have about $25,000 left to meet their living expenses. Contrast that family with one earning (say) $300,000 per year who would have to eke out an existence on just $250,000. The latter might be constrained to belonging to just two country clubs while the former would be living on Gravy Train — the dog food, that is. Would the impact on the children, innocent in this scenario, meet your definition of fairness?
(As an aside, responsible economists calculated that Forbes’ rate would have to be closer to 22% to equal then-current government revenues.
Try this simple experiment: from your last year’s federal income tax return, write down your total gross income, the income the flat taxers would propose to tax. Then write down your own net tax. Now, compare the net tax you actually paid to 22% (or 17%, if you prefer) of your total gross and tell us (honestly, now) which amount you’d rather pay.
And if you divide your actual income tax payment by your gross income, you’ll get your “flat tax” rate. I’ll bet you’ll be shocked at how much less than 17 or 22 percent you paid.)[/quote]
I paid more than 17%.
I guess we will have to agree to disagree on taxes my friend. I still do not think people that have taken risk, maybe worked harder, maybe went into the right field of work, or just plain got lucky should be penalized for thier success. A little story, (even true), I had a very nice position with a worldwide construction equipment company, making a very nice living. Took a chance and started my own company (not related to my previous job), took a 75% paycut, paid myself just the bare minimum to get by, for sveral years until the business could support my salary (to this day there are times when I skip a paycheck so my employees can get paid). If I am to understand you, because of my hard work, dedication, and sacrifices, I should have to pay more percentage in taxes than someone working a 9-5 job, that does not support 15 families every week? I would still pay a higher dollar amount than that guy, but it shoulds be the same percentage, in my opinion.
[quote=”DavidCMurray”]Making profit, interest, dividend, rent and other unearned income taxfree would certainly be a godsend for the already uberrich, loraine. Those are the greatest sources of their incomes. So you and I could pay to educate their children, pave their roads, provide their security and a thousand other public functions while they’d be free to spend all their wealth on expensive trinkets.
It’d be Paradise on Earth (if you were one of the lucky few).
[/quote]David, are you opposed to a flat tax? Whereas everyone pays the same rate? Do away with deductions, loopholes and the like? To me, someone making $1,000,000 pays $150,000 and someone making $50,000 pay $7,500 is “fair”. Just because someone has been more succesful than someone else, should they pay a different tax rate? Just thinking out loud there.
[quote=”DavidCMurray”]Love it or hate it, the central argument in favor of the estate tax is that by reducing the transfer of enormous wealth from one generation to another, it has the effect of preventing the creation of a small group of hereditary superrich who have done nothing to create the wealth they might otherwise inherit. Beginning with the Founding Fathers, there has always been a sentiment in the U.S. that there should not be a large and very privileged class who have created nothing and contribute little to the public good and who rest upon the labors of their ancestors.
In that context, the estate tax was created to achieve a social purpose and not to produce revenues. As such, it achieves what is perceived to be a “social” goal much like the goal of increasing home ownership by permitting the deduction of home mortgage interest or enhancing personal health by permitting the deduction of excess medical care costs or by allowing a deduction for the costs of higher education.
It is certainly true that an estate of a million dollars is hardly big time money any longer, but it is also true that the estate tax, however imposed, has actually affected a very small number of families in any seriously negative way despite the rhetoric to the contrary.
When the estate tax was increased some years ago, the American Farm Bureau screamed that it would be the death knell of the family farm, as survivors would have to liquidate their holdings to pay the tax. Well, when they went looking for an example to parade around, they couldn’t find one. Not one! Likewise, small business advocates couldn’t find more than a very few businesses that would have survived intact were it not for the estate tax.
The arguments against the estate tax, nevertheless, convince me. Were it mine to do, I’d impose a tax on all current income only and let that be it.
When I’m in charge, there’ll be some changes made . . .
[/quote]
David, when you are King we will have the same ideals. I understand the importance of taxation, although I don’t like it. It is iimportant to pay for roads, military, and the like. I actually agree with helping those who cannot help themselves, i.e. disability, welfare, food stamps, ect. But the system is completley broken. Society has figured out that the path of least resistance is to have someone else pay for you. And that my friend is the root of the problem.
I frequent an orphange in Belize and support it by way of food and maintenance, I agree 100% with them asking for help and I am glad to give it. My problem is the ones that do not try to help themselves, unfortunatley there are more and more of those which forces the government to take more and more. I don’t think I need to explain the snowball effect we are seeing.
I do, however, disagree with the estate taxes. Why is it ANY of the governments business if my great grandfather invented something and made a buttload of money, or if I work my butt off and made all the right decisions financially and want to pass that onto my child? I have a huge problem with that.
As a side note, what did you do in your previous life? I have read several of your post and they are well thought out.
[quote=”beansandbooks”]The whole concept of estate taxes is just nuts-I think it’s a fair assumption that most of us will have been taxed one way or another while building up whatever nest egg we have, then when you croak, before your survivors can divvy up the surviving remains you have to pony up in absentia and make one final payment. What for? I fail to remember anyone from the government helping me add to the pile. Did I miss the memo?[/quote]
It gets pretty stupid at some point, you are taxed on the income that you used to build your nest, then taxed on the profits made from that, then in order to pass that on to your kids, taxed at 55%. Land of the free? I think not. It really pisses me off that the government feels entitled to 55% of what ever is left after I die. At what point do they raise it to 55% of what you have every year? I know in California, New York, and Hawaii they are at 52%, 51%, and 51% respectivley. Time to pack up my toys and go home I think.
David….that would be an exciting way to live for sure!
I am working on getting out of here, I was waiting on the election results, that would have been a big delay in the decline of the US, I still think it would have happened eventually, but now I think it is 2x the speed for the decline.
I am coming down in Feb to look at some schools in the Central Valley area (12 year old daughter). Any suggestions? Is the Central Valley my best option for inernational schools?
[quote=”sprite”]The easiest and cleanest solution to escape the clutches of the IRS is to renounce US citizenship.
Not as easy as that, before you renounce the IRS does a full investigation of ALL of your tax filings from birth, then if they don’t get you there, you are taxed on your current assets at 35%. They treat it as if you sold everything you own and the tax man cometh. This is their last chance to tax you so I assure you they will find something (even fabricated) to take all they can from you. Once that is done, then you can renounce, you cannot renounce until the IRS signs off on you. Comforting isn’t it.
I may be stupid here, but paying with cash might have solved the issue? Until I am established in any foreign country, I always pay with cash.
Sounds great, I will donate the 2 ounces to the fed to stamp to wipe out the debt, this in turn has consequices (spelling), metal prices across the board will skyrocket 1000%, which is good with me. It still does not address the 2 trillion $ deficit, only reallocates the metal pricing, which I said is good with me. That means my minimal silver stash willbe worth Bill Gates money. I will donate the 2 ounces of platinum to the fed to do this. Then my move CR will happen immediatley!
Scott, I don’t think the taxes are too high (ok, sarcasism off).
The sad thruth is we now have turned the corner on more takers than givers, once that happened it acts like a turbo boost to the bottom. The gubment needs to siphon the remaining wealth from the middle class now to continue to pay for the takers. The time clock has officially started now to the nastyness that will hit the US like a ton of bricks to the forehead.
I own a business in the US, fortunatley my “pay” structure equates to under the $250K for tax increases, however, I will be hit with higher corporate taxes and the wonderful health care plan taxes. All in all I expect a 15-20% tax increase when it is all said and done. Fun times!
Scott,
Point taken on the security, but as I have learned in my travels to (more) undeveloped countries, those that have little will fare better than those that have much. Most places I have been, (roughly 20 countries), I am amazed at the resourcfulness of the people. I know people that don’t have 2 pots to bang together who are happier and eat very well based on their ability to produce and provide.
I would spectulate that people living in CR would be in a much better position to “survive” given an economic collaspe than 95% of the Americans living here in Fla. I hope to join the ranks of the fine people of CR very soon.
A “newbie” on scene here, but I could not help but get drawn into the discussion here, if I may offer my 2 cents (pun intended)…..I think waggonner and David are both correct and wrong in their points. I agree that the value of the dollar is only worth what the receiving party deems it is worth, example, exchange rates worldwide, some countries give what equate to $1.50 worth og goods for $1.00, while others give $.50 for $1.00 (all in equal to USD demoninations).
And David has a valid point on the devaluation of the USD (I too share the opinion that the USD is in decline). The scary part of the decline of the USD is what is driving the decline? My take is the overwhelming debt the country has taken on. When the government benefit takers out number the revenue producers (tax revenue), then there is a major issue developing. This brings on a whole new set of solcial problems, division, raise in crime, and possible riots.
I am exploring the reality of moving to CR, albeit I am far from retirement age, but I may have a plan to keep gainful employment which may only require a few trips to Fla a month. The reasoning is the same reasons David mentioned, the decline across all fronts of the US, economy, solcial, ect.
