Spent prudently over a period of time doesn’t mean “generations,” it means being spent by a family raising children with 40+ years of life to look forward to vs. a widow with 5 years left trying to figure out what is left that she can enjoy (not nearly as much).
It what sense should they be due? Were taxes paid on the money when it was earned? Certainly yes. Were taxes paid if that money was invested in stocks? Doubly so. So why is it due all over again?
You’re contradicting yourself. You just said a that inherited money is squandered. Now you’re saying it is hoarded. You can’t even get your bad economics straight.
No one is paying when people get to keep the money that they earned or inherited. People like you that think they have a right to other people’s money may look at it as losing money when it is passed on to the next generation. But that’s only because you have the attitude of a thief.
What raising kids and 40years are you talking about? If it’s inherited when they die, then at that point their kids are likely 60-70s. If they had kids, they’ve already raised them… Their grandkids likely in their 50s.
Everyone else pays capital gains when they realize capital gains. The step up in basis is taxes that otherwise would be due at some point (yes, they would be deferred until sale, but eventually would be owed). No, the taxes have not already been paid on the capital gains, like you ask. It’s a preferential tax treatment that primarily benefits the very wealthy.
No contradiction. It’s hoarded until they die. And then when they die, their children (heirs) are already very old as well… People get old, particularly when they’re rich. All that time it is money outside of the economy, reduced purchases of goods and services. I didn’t say this shouldn’t be allowed. It does eventually transfer, but it happens in a boom and bust cycle. At times when the fed policy is clearly for people to spend, it seems to make little sense to also subsidize the uber-wealthy to hoard capital outside of the economy.
You must not be familiar with current US demographics. Life expectancy is 78. The children of Boomers kicking the bucket in the next few years will be in their mid 40s. Millennials in their mid 40s will have kids in elementary school.
But you want the taxes due at the time of death on the gain from the original basis without a step up. In order to pay that tax, the heirs are forced to sell. The government shouldn’t have a tax policy in which heirs are forced to sell their inherited property to pay the taxes. That’s theft.
The taxes have been paid on the income when it is earned before it is used to buy the stock/property. Taxes are then paid by the entity being invested in when that entity makes a profit. And taxes are also being paid on dividends distributed by that entity. That’s before the stock/property itself is actually sold. How can you describe a system like that as preferential for the wealthy? Just because that rate is lower than the income tax rate? (which it isn’t even lower for the bottom two brackets)
We’re not talking about the Mitt Romney families of the world here that have enough in stock that they are able to live off of dividends and capital gains alone, and therefore don’t pay high income tax rates on high “earnings.” This is going to hit people with just over $1 million. That means we’re talking about people that worked their whole lives and paid the majority of their taxes via the income tax on their salary. An now all of a sudden, saving over $1 million makes them so rich that they need to be punished even more? Nah, I ain’t getting on that train. I don’t want to discourage people from saving enough to have that sort of money into retirement.
I fit this profile and don’t consider myself wealthy at all. I may retire early because we saved aggressively instead of spending it frivolously. But the reaction to potential estate tax starting at $1M in stocks would be just as you mentioned. I’ll work around it, hiring an estate attorney if I cannot do it myself. I’ll invest in other things that may not get taxed even though it may be less ROI. But after all the estate planning, I’d rather spend any leftover on frivolous shit than simply surrender it. I’d prefer my heirs to benefit from it but if they’re not going to benefit from some of my savings anyway, I might as well spend it on myself as wasteful as it’d be.
I missed this when I was responding to your other terrible takes. What exactly are you talking about? Are you saying that a single man and single woman should have to realize all their gains (and pay tax on them) the moment they get married because their property from when they were single is now joint property?
This is such a misunderstanding of how money and capital works that it makes my head hurt. Unless the money is literally kept under a mattress, it isn’t “outside” the economy. What econ 101 teacher failed you at a young age?
Lel. No that one was clearly a joke. But it’s also an unfair tax benefit only going to married individuals. Of course it’s not the only one…
Boston Legal poked fun at it, shatner got married to his legal partner at the firm solely to dodge taxes and transfer his assets to him near the end of the series… (IIRC he had a terminal diagnosis)
Gift tax/ estate tax avoidance (is not subject to lifetime exclusion limit like gifts to any non spouse would be). Additionally, free step up in cost basis when either spouse dies, and the property goes from joint ownership to individual.
Ah. We’re still talking about death/inheritance. I thought you were talking about something happening at the marriage date which I had never heard of.
Since shotgun deathbed marriages happening for tax avoidance purposes aren’t really a thing, I don’t look at that as a tax avoidance strategy. I also don’t really see you point about the step-up at death since it’s only on half of joint property, 100% on the dead spouse’s property, and 0% on the living spouse’s property. Unless you can predict who is going to die first, years or decades in advance of making a bunch of long term capital gains, there is no actual benefit you can plan for.
The notice also automatically postpones to May 17 the time for affected taxpayers to make 2020 contributions to their individual retirement arrangements (IRAs and Roth IRAs), health savings accounts (HSAs), Archer Medical Savings Accounts (Archer MSAs), and Coverdell education savings accounts (Coverdell ESAs). The postponement also applies to the time for reporting payment of the 10% additional tax on amounts includible in gross income from 2020 distributions from IRAs or workplace-based retirement plans.
Reading the tea leaves on possible SALT deduction being restored. Looking unlikely, but of course would be a giveaway to the rich in Democratic states so certainly has its proponents…
From a tax revenue standpoint, this would not be good on its own. The standard exemption was nearly doubled to make up for it this cap thinking it’d benefit middle income households in the balance.
I think this is why Biden may not be in favor of restoring it as it’d be tough to spin this one into a benefit for the struggling “middle class” who have more than $10k in SALT deductions. I know we have more than that personally but we’re also in top 5-10% of incomes. And yet, the standard exemption is better for us than itemizing.
There are two cases where you see these kind of marriages. The classic case is prior to someone getting deployed… you see a lot of military men/women marry their partners so that they get the death benefits should something happen. They may do so prior to getting the “traditional” wedding later on in their lives.
The other time is something similar to the fictional Shatner case, although this was usually done in the pre-gay marriage era. You marry a family friend in order to transmit benefits to them, if you were unable to get married in the first place. For a “lifelong bachelor”, it does seem like something one might do if they were in a terminal illness. There was the last Civil War widow, a 19 year old who took care of and married a 91 year old veteran before he died. Ironically she kept it a secret all of her life because his children thought she was a money grubber, but she apparently did honor that vow and never married anyone else in her life. https://wgntv.com/news/last-civil-war-widow-dies-after-keeping-marriage-secret-most-of-her-life/#:~:text=Helen%20Jackson%20was%2C%20by%20most,caretaker%20in%20his%20final%20years.
Salesforce, Archer-Daniels-Midland and Consolidated Edison were among those named in the report, which was done by the Institute on Taxation and Economic Policy, a left-leaning research group in Washington.
You can’t trust this article because you can’t trust the report it’s based on.
For instance, the article says Archer Daniels Midland is named in the report. The report is here:
It says ADM had $438 million in pre-tax income and paid $−164 million in federal income tax, which came out to a −37.4% effective tax rate.
In reality, the actual tax situation for ADM is much more nuanced. In ADM’s 224 page annual report, the word “tax, taxes, taxable, etc” shows up 418 times. The income taxes note is 4 and a half pages. Yes, it does list their 2020 federal income tax number as $−164 million (total 2020 tax including state and foreign taxes was $101+ million). But on the next page, it shows that they have net deferred tax liabilities of over $ 1 BILLION. Based on the whole picture, not just a snapshot of their 2020 tax paid (which isn’t the only component of income taxes for Billion+ $/yr companies), they had an effective tax rate of 5.4%, down from 13.2% the prior year. There are also a myriad of reasons for these tax results that don’t have anything to do with cheating the system. They are following the tax treatment of certain activities the government has decided it wants to encourage, such as railroad maintenance, biodiesel production, accumulated foreign earnings transition, etc. etc (the list goes on). Their tax PREPARATION bill was $2.2 million.
Moral of the story: don’t believe everything you read from partisan DC think tanks.
The information is accurate. The article makes it clear the companies rely on legal tax breaks. It says so in the article which goes into great detail. The info comes from the companies themselves and the SEC.
No one said they were cheating and the article does not accuse them of cheating.
Many large corporations pay near zero taxes legally. It’s the system that’s the problem.
Why should they pay fewer taxes than you do although they make several million or billion times more money than you?
The amounts they avoid paying have to be made up mostly by middle-class people paying taxes at a higher rate (and sometimes more in total than billion dollar corporations).