Re: how to compare living standards


"S. Doo" <none@xxxxxxxxxxxx> wrote

IRS Statistics of Income show that the largest estates pay a lower
effective tax rate than smaller estates. Easy enough to see at
www.irs.gov


The IRS has a largish site. Care to narrow your citation down to the
specific table(s) that back up your assertion?


<snip description of billionaire setting up foundation which then hires his
children as well-paid but not-overworked directors etc. -- a scenario which
I do not dispute>

Which enables the whole family to live like a billionaire family, not
being able to actually sell the foundation's stock for their own
account itss true -- but in all other ways taking a heck of lot more
income out of the stock, and receiving a whole lot more billionaires's
perks, than if Daddy was still alive, * or* if the billion had been
left taxably and been cut by 50% each generation.


Where to begin?

First, it is neither surprising nor objectionable that a billionaire's
children live more lavishly than yours or mine. If we _must_ have
billionaires, who _else_ is going to live that way? If you think the
lifestyle of the children of the rich and famous is somehow objectionable,
how exactly would it become _less_ objectionable if they get to inherit
daddy's capital, tax-free?

Second, salaries for no-show jobs and fees for do-nothing board meetings are
_income_, and are _taxed_ as income, whether the old man is still alive or
already dead. That's as it should be. Or do you object to taxing incomes,
too?

Third, I wonder about your arithmetic. You draw a picture of daddy's estate
getting converted into net worth of the heirs by passing into their hands,
piecemeal, as ordinary income. How quickly are you assuming the transfer to
get accomplished?

In my view, an outright inheritance is income to the heir, just like lottery
winnings. Whether you win $1 billion for being lucky enough to have picked
the right 6 numbers, or whether you win it for being lucky enough to have
picked the right 2 parents, an influx of $1 billion into _your_ net worth is
a $1 billion "income" to _you_. If I had my way, the "estate tax" _would_ be
abolished -- in favor of taxing inherited capital as ordinary income.


Did you ever wonder how all those Kennedys who flunk the bar exam
and have otherwise poor academic records always seem to be
employed by conservation groups and non-profits that leave them
with plenty of time and income to enjoy politics and playboying,
generation after generation after generation?


Again I ask: how would abolishing the estate tax make "all those Kennedys"
_less_ inclined to "politics and playboying"?


If you are a mere thousandaire, is it your intense, passionate desire
to _avoid_ tax that causes you to hire a CPA, or pay for Turbotax, to
assure you don't pay more than you legally owe?


Well, duh. Don't tell me _you_ purposely leave out deductions that you're
entitled to. But you miss the point. It is specifically the deduction for
_charity_ that we're talking about. You decrease your tax bill by giving to
charity, but you decrease your net worth even more. The tax code gives you
this choice for your marginal $100 of income:

1) You keep $65 for (ultimately) your heirs and give $35 to Uncle Sam.
2) You keep $0 for your heirs, and give $100 to the Red Cross.

If your intense, passionate desire is exclusively to make sure Uncle Sam
gets nothing, all you have to do is arrange for your heirs to get nothing
either. The simplest way to do that, of course, is to

3) Quit work early and not bother to _earn_ that marginal $100 in the first
place!<g>

-- TP


.

Relevant Pages

  • Re: how to compare living standards
    ... Name any marginal tax rate ... the IRS collects around $4 million in "estate tax". ... My understanding is that money in a trust can be passed on and it becomes ... taxable income only when it is sent from the trust to the individual. ...
    (sci.econ)
  • Re: The poor rich work harder
    ... -- from work, money worries, household chores and screaming kids (via ... These people pay at about the same income tax rate ... A prime example is the estate tax. ...
    (soc.retirement)
  • Re: The poor rich work harder
    ... -- from work, money worries, household chores and screaming kids (via ... These people pay at about the same income tax rate ... A prime example is the estate tax. ...
    (soc.retirement)
  • Re: how to compare living standards
    ... you're in the top tax bracket, giving $100 to the United Way (or Jim Blair ... your net worth (which is what your estate is called, ... cleverly "avoided" $35 of income tax. ...
    (sci.econ)
  • Re: how to compare living standards
    ... straight to your heirs, and the IRS takes, say, $47 million of that. ... Or my foundation for biomedical research on human stem cells would be seen ... what do you consider to be a "regressive tax"? ... The estate ...
    (sci.econ)
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