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DanWeiss



Joined: 24 Jun 2008
Posts: 1930
Location: Connecticut, USA

PostPosted: Mon Sep 20, 2010 5:06 pm    Post subject: Reply with quote

mrgybe wrote:
LHDR..........perhaps this will help you understand why some might be angry.

Tran and his wife entered the US legally from Vietnam. They started a small business from their tiny apartment. For fifty years Tran worked long hours, often seven days a week to build the business. For the 30 years before he died, his two sons worked tirelessly alongside him. They paid themselves modest salaries and poured everything that was left after income taxes back into the business. When Tran died the business was worth $6 million...........aside from his house, it was his only asset. His wife was already dead so his wanted his son's to have the business they had all worked so hard to build. The Estate tax exemption at the time was $1 million so the government told the sons that they owed $2.75 million in taxes simply because their father had died. They had no assets other than the business so they had to sell it to pay the taxes.

The great strength of this country since it's formation has been the ability to accumulate wealth through hard work, innovation and self sacrifice. Estate taxes undermine that incentive to succeed and to prudently save.


mrgybe: If Mr. Tran is running a business worth $6mm but didn't incorporate or otherwise separate his personal assets from the business he probably ignored sound legal advice in the process and gets what came to him in your hypothetical. A simple C-corp. would have immediately removed the company from the estate, although any shares he would have held individually would be part of his estate and valued with the step-up basis method. It is very common for owners of family businesses to issue shares to family members to avoid probate.

The argument that there should be no federal estate tax is specious. The decedent is not being taxed because the decedent is, well, deceased. What is being taxed technically is the decendant's estate. In a practical sense, it is the "take" of each beneficiary of the estate that is being taxed for the income that each would have received as ordinary income. Of course, it is not ordinary, earned income and is thus taxed under a very different structure.

This is why I laugh when Newt Gingrich and his ilk began speaking of the estate tax as a "death tax." People like Mike Fick actually base their dislike of the estate tax on this intentional misdescription. What Newt and all others who ever ratified any amendment to the US Tax Code fail to disclose is that they voted in support of the entire premise of the tax system. Namely, any accretion of wealth is subject to tax unless specifically exempted.

So those who rail against the estate tax must acknowledge that eliminating the federal estate tax merely would shift the tax burden to each beneficiary's own personal income tax. I wonder which the highest income bracket would prefer?
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LHDR



Joined: 22 Jun 2007
Posts: 100

PostPosted: Mon Sep 20, 2010 11:22 pm    Post subject: Reply with quote

isobars wrote:
5. Where have I complained about taxes, per se? ...
6. “Ironic”? Don’t tell me you’re one of those people...

Isobars, if I misinterpret your complaints about taxes, I apologize. It is based on your outrage about the death tax here and on the southwest forum, and some other remarks that seem to argue against increasing tax rates after Bush's cuts and against increasing the capital gains tax. I hope this clarifies how I got this impression:

5/28/2008 "Deleted Thread" ...Until greedy mortgage brokers sold greedy home buyers underpriced mortgages on overpriced houses, the economy was going like gangbusters since Bush lowered taxes many years ago. Most of his tenure produced record or near-record levels and duration in GDP increases, home ownership, budget deficit reduction, upward individual fiscal mobility, education spending, etc. plus record Dow Jones levels and near-zero involuntary unemployment. By virtually every accepted purely objective measure, the economy boomed during the majority of W's tenure...

5/31/2008 "Deleted Thread" ...Obama, when directly challenged by Gibson to justify his capital gains tax increase despite its negative impact on federal revenue, said his objective was "fairness", not the benefit of the taxpayers, as though there's something unfair about being wealthy. His statement says he is willing to "punish the rich" even if it hurts the little guy, as though the rich got rich by stealing from the little guy rather than improving the little guy's lot with jobs, products, services, etc. and overlooking the fact that THE RICH PAY THE VAST MAJORITY OF INCOME TAXES...

As for your other point (6), I don't know, it is either a misunderstanding or you are putting words in my mouth only to trash them. If it is the former, I am sorry about the confusion. If it's the latter, well, it certainly is a highly successful (as well as deplorable) rhetorical tool, and deserves no response here. Let me try to be clearer about what I was thinking. I find it ironic when people, who benefit from the federal government, seem to have nothing but contempt for almost everything the government does, or promote the "Republican" idea of starving the beast, or want the government to keep its hands off their Medicare. And I wonder if you fit in that category (you may not). By the way, and not that that should matter in itself for a person's worth and dignity, what makes you so sure that I did not serve in the military?
-lhdr

PS. Wouldn't it be nice if politics were as simply right or wrong as Isobars' energy conservation equations: 1/2 M Vsquared = M h, where M is the mass of sailor+board+etc., V the speed of the board at takeoff, and h the hight of the jump (hopefully the same for sailor and board)?!? (Isobars himself provides the answer later in that thread.)

Swchandler put up an informative LATimes article by a business person on taxes in one of the threads here. Would be nice if hardcore right wingers, and some Democrats, could take stuff like that into account.
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stevenbard



Joined: 11 Nov 1993
Posts: 4037

PostPosted: Tue Sep 21, 2010 10:39 am    Post subject: Reply with quote

30 years ago your father bought a house for $100,000 dollars. Today it's worth $1,000,000. At the same time he bought a floral shop including building and land for $400,000 dollars and it is worth $3,000,000 today. You now have a taxable estate worth $4,000,000. Inflation has increased your net worth by $3,000,000 dollars but your lifestyle is the same as it was 30 years ago. Even though you had no increase in your life style as a result of inflation the government now says you are rich. It is the same house, and the same floral shop, but you now owe the government $1,650,000. Because of inflation you had to pay ever increasing property taxes compounded each year also.

This government is going to deal with the massive debt through inflation . They will inflate by printing worthless paper until we are all poor, and our paper money is worthless. That will allow them to pay off this massive debt with cheaper money down the road. By taking the same floral shop your Dad bought 30 years ago, and forcing you to sell it. They will use your fathers sweat and hard work to pay for their pork.

AND OBAMA SAID HE WOULDN'T RAISE TAXES. THIS IS THE CRUELEST TAX, AND HE KNOWS IT.
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boggsman1



Joined: 24 Jun 2002
Posts: 3510
Location: at a computer

PostPosted: Tue Sep 21, 2010 11:03 am    Post subject: Reply with quote

Bard, since the Fed was formed, adjusting for inflation a dollar is actually worth 8c. Printing money is really the function of the Federal Reserve, and the two easiest Fed Chiefs EVER are Bernanke and Greenspan, two Conservative Republicans. But you go ahead and blame Obama for everything under the sun with regards to inflation. There is a distinct difference between monetary policy and GOVT spending, or Pork, as you put it. The tax is not about hard work, and earnings, its about the transfer of ownership from entity A to entity B.
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boggsman1



Joined: 24 Jun 2002
Posts: 3510
Location: at a computer

PostPosted: Tue Sep 21, 2010 11:04 am    Post subject: Reply with quote

Bard, since the Fed was formed, adjusting for inflation a dollar is actually worth 8c. Printing money is really the function of the Federal Reserve, and the two easiest Fed Chiefs EVER are Bernanke and Greenspan, two Conservative Republicans. But you go ahead and blame Obama for everything under the sun with regards to inflation. There is a distinct difference between monetary policy and GOVT spending, or Pork, as you put it. The tax is not about hard work, and earnings, its about the transfer of ownership from entity A to entity B.
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isobars



Joined: 12 Dec 1999
Posts: 14032

PostPosted: Tue Sep 21, 2010 2:26 pm    Post subject: Reply with quote

LHDR wrote:
Isobars, if I misinterpret your complaints about taxes, I apologize. It is based on your outrage about the death tax here and on the southwest forum, and some other remarks that seem to argue against increasing tax rates after Bush's cuts and against increasing the capital gains tax. I hope this clarifies how I got this impression: …
As for your other point (6), I don't know, it is either a misunderstanding or you are putting words in my mouth only to trash them. If it is the former, I am sorry about the confusion. If it's the latter, well, it certainly is a highly successful (as well as deplorable) rhetorical tool, and deserves no response here. Let me try to be clearer about what I was thinking. I find it ironic when people, who benefit from the federal government, seem to have nothing but contempt for almost everything the government does, or promote the "Republican" idea of starving the beast, or want the government to keep its hands off their Medicare. And I wonder if you fit in that category (you may not). By the way, and not that that should matter in itself for a person's worth and dignity, what makes you so sure that I did not serve in the military?
-lhdr

PS. Swchandler put up an informative LATimes article


RE: “other remarks that seem to argue against increasing tax rates after Bush's cuts and against increasing the capital gains tax.”
The economic history of the world and of the U.S. shows, and Obama explicitly agreed twice on the ABC Democratic candidate debate stage, that higher taxes, particularly capital gains taxes in recessive times, harm the economy. Hell, even the Boggsman admitted I was right and he was wrong about that, before he conveniently forgot that admission and denied it ever happened … at which time he got erased from my blackboard. Apolitical economists and business schools and self-made billionaires and leaders of many nations around the world soundly lambaste and overtly fear Obama’s economic policies. Many, maybe most, previously Marxist/socialist/communist nations are wising up and trending towards capitalism just as ours is being driven by declared and demonstrated design away from it and towards those archaic, failing models; Fidel Castro is proclaiming Cuba’s economic model -- which Obamanomics is approaching asymptotically -- a complete failure.

I have no clue how my quotes you posted equate to criticizing all taxes. I’ve never heard or seen any of the hundreds of millions of Obamanomics critics, from the leaders of China and Germany to the scruffiest TEA party attendees, claim that taxes, per se, are wrong. Always remember: there is very seldom much -- usually no -- correlation between what “these people” claim I said and what I actually said. It’s taxes which violate the Constitution and/or which harm the nation and the people our leaders swore to protect that upset us, and Obamanomics is rife with them, often by admitted design and sometimes affecting trillions of dollars.

I never knowingly put words in others’ mouths; that’s the far left’s game here, and it’s why and how they look so foolish to people who can read for themselves and a major reason I killfiled them. That’s why I opened my ensuing comments with “Don’t tell me you’re one of those people …” rather than a blind assumption to that effect, and it’s why I phrased my comments as questions derived straight from the fingertips of the disgusting leeches who whine so loudly and endlessly that the men and women who keep them safe actually get remunerated for doing it. Your “bizarre irony” opener sounded exactly like their opening wails.

I don’t consider a government beneficiary criticizing government excesses, malfeasance, incompetence, etc. to be hypocritical. After all, we who work for the government often have a first-hand view, untainted by the media, of how good and/or how bad it can function. My wife and I worked for the federal government for a combined 50 years, and could relate dozens of good and bad facets of it. Anyone can read, sometimes even without media bias if hard data is available, how well and/or how poorly most government programs have worked. You asked about Medicare: great concept, but if Blue Cross ran it and allowed the $60-$100 BILLION of fraud the government allows every year, its leaders would … ultimately … be in prison* and Humana would get the contract next time. i.e., capitalistic competition, with moderate government oversight, could do an infinitely better job.

* IMO, we could dramatically curtail criminal activities such as those of Enron, apparently GE, Madoff, et.al. if we executed a few of the SOBs like Kenneth Lay and Jeffry Immelt (presuming he’s prosecuted and convicted) and Madoff. Given the scale and extent of their (alleged, in Immelt’s case) collusion in harming so many people, I would have no reservations if some prosecutor demanded the death penalty for behavior like that.

More importantly, it’s a pleasure to deal with an adult here for a change; that’s so rare when conversing across the political fence online from my side. You actually performed some due diligence in digging up some quotes rather than fabricating some, you questioned them rationally and directly, and you focused on content rather than on my toilet habits.

It doesn’t surprise me if Chandler posted or linked something relevant and useful. If his posts weren’t so often wrapped in irrelevant, false, childish, stewed sewage I’d turn his spigot back on and learn something from his well-hidden sane side.

Mike


Last edited by isobars on Tue Sep 21, 2010 2:32 pm; edited 1 time in total
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boggsman1



Joined: 24 Jun 2002
Posts: 3510
Location: at a computer

PostPosted: Tue Sep 21, 2010 2:30 pm    Post subject: Reply with quote

Your senility knows no bounds. I have always been a proponent of low cap gains taxes, I think it is one of the most efficient multipliers. I was not in agreement with marginal rate reductions, at the current levels. Check your records, you plonked me because I called you a douchebag!
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swchandler



Joined: 08 Nov 1993
Posts: 5761

PostPosted: Tue Sep 21, 2010 3:55 pm    Post subject: Reply with quote

"If his posts weren’t so often wrapped in irrelevant, false, childish, stewed sewage..."


When the rubber meets the road regarding what happens here and what's really said, isobars takes the cake in making up just the kind of wild foolish nonsense that he boldly accused so many of us of. While I've been quite vocal and critical of his antics here, I can do it with a sense of style and sophistication that's well beyond anything that he's capable of, and over time I think that it shows. Of course, there are many notable folks that contribute here offering much more than I can bring to the table, and I'm not just talking about folks with a liberal leaning. isobars would be well served by learning more from conservative contributors like mrgybe.

Sadly though, isobars thinks he's so smart, informed and together about everything. If he only knew the truth.
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coboardhead



Joined: 26 Oct 2009
Posts: 1925

PostPosted: Tue Sep 21, 2010 7:35 pm    Post subject: Reply with quote

Interesting Data - Whitehouse FY 2011 Budget (Ref.)

Natl Debt vs GDP

Reagon - Bush I start 32.% end 66.1%
Clinton start 66.1 % end 56.4%
Bush II start 56.4% end 83.4%
Obama start 83.4%

Hopefully Mr. Obama will follow example of previous Demo's and not Repub's.

RE: Trusts - the original subject. As a small business owner (engineering consultant) and wife in medicine. Blaming Tran for not knowing the rules is in some ways ignorant.

Most of us, in the "trenches" of private practice are so busy keeping up with our professions, payroll rules, tax rules, insurance etc. etc. that knowing how to protect assets against seisure by the goverment (estate taxes) could easily get lost in the shuffle.

These rules should be simplified and attainable by all business owners. Requiring small businesses to hire specialists in trusts to accomplish this is BS. I got qouted $5000 to set up such a trust!

Shakespeare was right!
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DanWeiss



Joined: 24 Jun 2008
Posts: 1930
Location: Connecticut, USA

PostPosted: Tue Sep 21, 2010 8:19 pm    Post subject: Reply with quote

coboardhead wrote:


RE: Trusts - the original subject. As a small business owner (engineering consultant) and wife in medicine. Blaming Tran for not knowing the rules is in some ways ignorant.

Most of us, in the "trenches" of private practice are so busy keeping up with our professions, payroll rules, tax rules, insurance etc. etc. that knowing how to protect assets against seisure by the goverment (estate taxes) could easily get lost in the shuffle.

These rules should be simplified and attainable by all business owners. Requiring small businesses to hire specialists in trusts to accomplish this is BS. I got qouted $5000 to set up such a trust!

Shakespeare was right!


Yes, Shakespeare was right. In Henry IV, Act 2 Scene 4 you will read that Dick the Butcher (apropos name) suggested the group intending to overthrow the government rid themselves of "all the lawyers" in order for the assassination plot against the Crown and subsequent governmental overthrow to have any chance of success.

As to the hypothetical Mr. Tran, whatever sorrow we might feel for his children facing a large tax payment is quite understandable. Why wish that on anyone? Mr. Tran's failure to heed conventional wisdom about severing his business from his personal assets also is unfortunate. But why would anyone believe that someone so successful as Tran wouldn't have learned such an essential business structure in the years he grew his business? I don't think it's about being a lawyer. The hypothetical Tran had hypothetical years to discover very basic business advice. Hypothetically, he didn't. Tran and possibly his heirs are hypothetically ignorant of essential business and basic probate rules. Not your fault, not my fault, but the fault of the hypothetical Tran.
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