Rich people don't pay much in taxes (now in CR) - ProPublica

[Wally Fairway 5664]

1 hour ago, DefinitelyNotHollywoodColt said:

there just isn't anything else to say. you bring nothing to the table. post a gif.

here I'll post it for Cheese, just to make you happy (and shut up about it)

[JBJ 3780]

3 hours ago, NotActuallyALonghorn said:

So they are basically just living off of capital gains? The issue then is that they are able to deduct the interest from their loan to further reduce their tax burden?

The interest (albeit low) is still a net loss.  It just less than tax penalties that can incur.

They essentially:

1) Live off a salary in the 12% tax bracket range (80k for married).

2) Buy fancy shit at a 15% capital gains rate.

3) Too much of #2 and you can fuck it up.

4) The loans allow you to have your money now but control capital gains income to keep #1 and #2 true.

[Sbbruin 22082]

Re:  Paying back loans against stock........That's what got Adam Nuemann in so much trouble.  

Neumann made out like a bandit. He got all sorts of loan forgiveness as part of a golden parachute deal.

[Sbbruin 22082]

You don't even know what a write-off is, do you? ? 

No, but they do. And they're the ones writing it off.

[Bevo 13825]

8 minutes ago, JBJ said:

The interest (albeit low) is still a net loss.  It just less than tax penalties that can incur.

They essentially:

1) Live off a salary in the 12% tax bracket range (80k for married).

2) Buy fancy shit at a 15% capital gains rate.

3) Too much of #2 and you can fuck it up.

4) The loans allow you to have your money now but control capital gains income to keep #1 and #2 true.

The corporation or the trust probably own the large yachts.

[UncleSonny 6790]

10 minutes ago, Bevo said:

The corporation or the trust probably own the large yachts.

but who owns the yacht that is needed to support Bezos' yacht?

https://www.cnn.com/2021/05/10/business/jeff-bezos-yacht/index.html

[Sbbruin 22082]

The corporation or the trust probably own the large yachts.

Most large yachts are owned by LLCs. Just like any large property purchase.

[Incredulity 11861]

7 minutes ago, Sbbruin said:

Most large yachts are owned by LLCs. Just like any large property purchase.

and in the Bahamas.

[Sbbruin 22082]

35 minutes ago, Incredulity said:

and in the Bahamas.

[Armybrat 41319]

23 hours ago, Neonmoon said:

I don’t buy “they paid exactly what they owe” line of thought because they all intentionally work the system to pay the least amount of taxes. They all get paid nominal salaries if at all to avoid the higher income taxes. Bezos gets paid an 80K salary for this purpose. I’m not saying what they do is illegal or wrong. They work the system that both sides of the aisle set up and won’t change because it benefits them. Americans have never had a ruling class or a monarchy, so there is no entrenched hatred for the wealthy, most Americans believe they will be rich one day. So the system ain’t changing. 

Lol - we watched the Kennedys work the system 60 years ago to avoid taxes on their Billion$$$ (in 1960s dollars) fortune.

 

[HouTex 1912]

Speaking only about estate taxes, some of the discussion here is nuts. The Bezos story makes for good theater but it's not the rule for most rich people--say people between $50-$200 million in net worth that have sold their businesses (and paid income tax on the sale) and have a pool of investments and assets when they die.  They are worried about asset preservation and/or income generation for their children, grandchildren, great grandchildren, and so on. I know two leading will and estate attorneys in Houston each with more than 30 years at this and they say that you can do everything right with things like revocable trusts and the marital by-pass trust, etc., but the 40% estate tax is real.  They will also say that depending on how soon the next generation dies after the previous generation dies a $50 million estate can turn into an $18 million estate very quickly.  Usually, the assets are invested very conservatively (again, it's all about asset preservation and income generation, not bitcoin-type investments) and the 40% estate tax can hit the heirs before the estate can grow back from the previous 40% hit.  And when it's divided among numerous grandchildren and great grandchildren it's not like everyone is sitting on a beach earning 20%.  For the vast majority of folks affected by it, the estate tax is a horribly unfair tax.

[wildcat09 29556]

3 minutes ago, HouTex said:

Speaking only about estate taxes, some of the discussion here is nuts. The Bezos story makes for good theater but it's not the rule for most rich people--say people between $50-$200 million in net worth that have sold their businesses (and paid income tax on the sale) and have a pool of investments and assets when they die.  They are worried about asset preservation and/or income generation for their children, grandchildren, great grandchildren, and so on. I know two leading will and estate attorneys in Houston each with more than 30 years at this and they say that you can do everything right with things like revocable trusts and the marital by-pass trust, etc., but the 40% estate tax is real.  They will also say that depending on how soon the next generation dies after the previous generation dies a $50 million estate can turn into an $18 million estate very quickly.  Usually, the assets are invested very conservatively (again, it's all about asset preservation and income generation, not bitcoin-type investments) and the 40% estate tax can hit the heirs before the estate can grow back from the previous 40% hit.  And when it's divided among numerous grandchildren and great grandchildren it's not like everyone is sitting on a beach earning 20%.  For the vast majority of folks affected by it, the estate tax is a horribly unfair tax.

You say this like the estate tax has anything to do with it.

[NeverMarryAStripper 22241]

1. Hit it big.

2. Become a citizen of an island in the Caribbean

3. Your children and grandchildren profit

[Bevo 13825]

8 minutes ago, NeverMarryAStripper said:

1. Hit it big.

2. Become a citizen of an island in the Caribbean

3. Your children and grandchildren profit

If you have dual citizenship in the US and Portugal (which doesn't have an estate tax), is it possible to escape the estate tax? How would that work? Asking for a friend.

[NotActuallyALonghorn 4998]

One big problem with the estate tax is that it is very anti-environmentalist. Anybody who has taken an intro course into wildlife, forestry, environmental sciences, or anything related can tell you that land fragmentation is one of the biggest problems in that whole area of study. But, yeah, we have a system that encourages it and people who think they care about the environment trying to accelerate it. 

[Incredulity 11861]

8 minutes ago, Bevo said:

If you have dual citizenship in the US and Portugal (which doesn't have an estate tax), is it possible to escape the estate tax? How would that work? Asking for a friend.

The US has a global tax system for residents.

Only way to avoid would be to renounce your US citizenship.

[Bevo 13825]

41 minutes ago, Incredulity said:

The US has a global tax system for residents.

Only way to avoid would be to renounce your US citizenship.

So my friend would have to sneak his treefidy out of the country. Fucking dickheads. Vote them all out.

[UncleSonny 6790]

1 hour ago, HouTex said:

They will also say that depending on how soon the next generation dies after the previous generation dies a $50 million estate can turn into an $18 million estate very quickly.  Usually, the assets are invested very conservatively (again, it's all about asset preservation and income generation, not bitcoin-type investments) and the 40% estate tax can hit the heirs before the estate can grow back from the previous 40% hit.  And when it's divided among numerous grandchildren and great grandchildren it's not like everyone is sitting on a beach earning 20%.  For the vast majority of folks affected by it, the estate tax is a horribly unfair tax.

This feels like a separate conversation, but why do I care that the grandchildren and great grandchildren of a wealthy individual may only have 18 million to divide between them as opposed to 50 million?

I'm especially interested in the bolded part that it's horribly unfair to the folks affected by it. The person who earned that fortune is not affected, so you are referring to the heirs who receive a windfall purely because they were related to the right person and managed to not be removed from the will before they died? 

[NeverMarryAStripper 22241]

1 hour ago, Incredulity said:

The US has a global tax system for residents.

Only way to avoid would be to renounce your US citizenship.

Even then the IRS will get you.  If your world wide net worth exceeds $2 million, or your average income tax liability for the last five years exceeds a certain amount (It's currently around $162,000 but is indexed to inflation) you will need to file a Form 8854 upon renunciation of US Citizenship.  This form essentially treats all of your worldwide assets as if they had been sold on the day before you renunciate your citizenship and taxes you on the calculated gain.

[wildcat09 29556]

1 hour ago, NotActuallyALonghorn said:

One big problem with the estate tax is that it is very anti-environmentalist. Anybody who has taken an intro course into wildlife, forestry, environmental sciences, or anything related can tell you that land fragmentation is one of the biggest problems in that whole area of study. But, yeah, we have a system that encourages it and people who think they care about the environment trying to accelerate it. 

I don't know why you think the estate tax has anything to do with land fragmentation.

[NotActuallyALonghorn 4998]

I don't  know why you are so embarrassingly stupid.

[wildcat09 29556]

4 minutes ago, NotActuallyALonghorn said:

I don't  know why you are so embarrassingly stupid.

Explain it, then.

[NotActuallyALonghorn 4998]

If a farmer or rancher dies and leaves their land to their heirs, what do you think happens to it? Land has completely disconnected itself from its value inherent to its use. The value of land is now dependent on its use for recreation and not production, which is much higher. So if that person's heirs can't afford to pay the estate tax out of pocket they have no choice but to sell off a portion to satisfy the tax man. 

[wildcat09 29556]

24 minutes ago, NotActuallyALonghorn said:

If a farmer or rancher dies and leaves their land to their heirs, what do you think happens to it? Land has completely disconnected itself from its value inherent to its use. The value of land is now dependent on its use for recreation and not production, which is much higher. So if that person's heirs can't afford to pay the estate tax out of pocket they have no choice but to sell off a portion to satisfy the tax man. 

The estate tax forcing farmers' heirs to sell family farms is not a thing that actually happens.

[Dahobbs 18185]

2 hours ago, HouTex said:

Speaking only about estate taxes, some of the discussion here is nuts. The Bezos story makes for good theater but it's not the rule for most rich people--say people between $50-$200 million in net worth that have sold their businesses (and paid income tax on the sale) and have a pool of investments and assets when they die.  They are worried about asset preservation and/or income generation for their children, grandchildren, great grandchildren, and so on. I know two leading will and estate attorneys in Houston each with more than 30 years at this and they say that you can do everything right with things like revocable trusts and the marital by-pass trust, etc., but the 40% estate tax is real.  They will also say that depending on how soon the next generation dies after the previous generation dies a $50 million estate can turn into an $18 million estate very quickly.  Usually, the assets are invested very conservatively (again, it's all about asset preservation and income generation, not bitcoin-type investments) and the 40% estate tax can hit the heirs before the estate can grow back from the previous 40% hit.  And when it's divided among numerous grandchildren and great grandchildren it's not like everyone is sitting on a beach earning 20%.  For the vast majority of folks affected by it, the estate tax is a horribly unfair tax.

(1) Less than 2,000 estates a year pay any federal estate tax at all, so you can't say that any scenario with someone paying the estate tax is common;

(2) 11.7 million of the $50 million estate in your example would be exempt, meaning at most, if the person made no effort what so ever to structure the assets to avoid taxes, you're talking about $15 million tax hit, not your imaginary 64% or $32 million tax hit.  Even if three generations die in row (original owner, first inheritor, and then second inheritor), you're still maxing out at a $25 million tax hit. And that's ignoring the fact that spouses get to combine their exemptions, meaning $23.4 million is tax free per generation;

(3) Pretty much everybody with an estate of $50 million is going to structure their assets such that any tax hit is very significantly below 40%. In fact, I'd go so far as to say that the tax hit would be de minimis. 

(4) I have no idea why you think the inheritor getting millions of dollars tax free in addition to whatever portion above 11.7 million is left after taxes is somehow unfair. See below. 

1 hour ago, UncleSonny said:

This feels like a separate conversation, but why do I care that the grandchildren and great grandchildren of a wealthy individual may only have 18 million to divide between them as opposed to 50 million?

I'm especially interested in the bolded part that it's horribly unfair to the folks affected by it. The person who earned that fortune is not affected, so you are referring to the heirs who receive a windfall purely because they were related to the right person and managed to not be removed from the will before they died? 

Yup. 

2 hours ago, NotActuallyALonghorn said:

One big problem with the estate tax is that it is very anti-environmentalist. Anybody who has taken an intro course into wildlife, forestry, environmental sciences, or anything related can tell you that land fragmentation is one of the biggest problems in that whole area of study. But, yeah, we have a system that encourages it and people who think they care about the environment trying to accelerate it. 

What? 

40 minutes ago, NotActuallyALonghorn said:

If a farmer or rancher dies and leaves their land to their heirs, what do you think happens to it? Land has completely disconnected itself from its value inherent to its use. The value of land is now dependent on its use for recreation and not production, which is much higher. So if that person's heirs can't afford to pay the estate tax out of pocket they have no choice but to sell off a portion to satisfy the tax man. 

Seriously, this is a completely imaginary scenario. Again, less than 2,000 estates a year pay any federal estate tax. And there is about a million ways for the poor family farmer with a farm that exceeds 11.7 million in value to avoid ever paying estate taxes on the property. Also, why on earth are you assuming that this incredible valuable farm or ranch is suddenly going to be ignored by the inheritors and used merely for recreation? Could you come up with a less realistic hypothetical? 

Edited June 10, 2021 by Dahobbs

[Incredulity 11861]

9 minutes ago, wildcat09 said:

The estate tax forcing farmers' heirs to sell family farms is not a thing that actually happens.

[wildcat09 29556]

2 minutes ago, Dahobbs said:

(1) Less than 2,000 estates a year pay any federal estate tax at all, so you can't say that any scenario with someone paying the estate tax is common;

(2) 11.7 million of the $50 million estate in your example would be exempt, meaning at most, if the person made no effort what so ever to structure the assets to avoid taxes, you're talking about $15 million tax hit, not your imaginary 64% or $32 million tax hit.  Even if three generations die in row (original owner, first inheritor, and then second inheritor), you're still maxing out at a $25 million tax hit. 

(3) Pretty much everybody with an estate of $50 million is going to structure their assets such that any tax hit is very significantly below 40%. In fact, I'd go so far as to say that the tax hit would be de minimis. 

(4) I have no idea why you think the inheritor getting millions of dollars tax free in addition to whatever portion above 11.7 million is left after taxes is somehow unfair. See below. 

Yup. 

What? 

Seriously, this is a completely imaginary scenario. Again, less than 2,000 estates a year pay any federal estate tax. And there is about a million ways for the poor family farmer with a farm that exceeds 11.7 million in value to avoid ever paying estate taxes on the property. Also, why on earth are you assuming that this incredible valuable farm or ranch is suddenly going to be ignored by the inheritors and used merely for recreation? Could you come up with a less realistic hypothetical? 

Farmers' heirs even get an additional $1 million exemption if they continue to use the land for farming. The people who still parrot this myth are some of the absolute dumbest people on earth.

[UncleSonny 6790]

11 minutes ago, Dahobbs said:

Seriously, this is a completely imaginary scenario. Again, less than 2,000 estates a year pay any federal estate tax. And there is about a million ways for the poor family farmer with a farm that exceeds 11.7 million in value to avoid ever paying estate taxes on the property. Also, why on earth are you assuming that this incredible valuable farm or ranch is suddenly going to be ignored by the inheritors and used merely for recreation? Could you come up with a less realistic hypothetical? 

You'll never guess who came up with this fairy tale and continue to push it:  

https://cei.org/studies/the-anti-environment-estate-tax-why-the-death-tax-is-deadly-for-endangered-species/

Oh wait, you did guess "libertarian think tank"? Never mind then.

Edited June 10, 2021 by UncleSonny

[workswithseed 2201]

3 minutes ago, UncleSonny said:

You'll never guess who came up with this fairy tale and continue to push it:  

https://cei.org/studies/the-anti-environment-estate-tax-why-the-death-tax-is-deadly-for-endangered-species/

Oh wait, you did guess "libertarian think tank"? Never mind then.

I don't know who they are, but is the quotations necessary?

[Guest]

1 hour ago, UncleSonny said:

This feels like a separate conversation, but why do I care that the grandchildren and great grandchildren of a wealthy individual may only have 18 million to divide between them as opposed to 50 million?

I'm especially interested in the bolded part that it's horribly unfair to the folks affected by it. The person who earned that fortune is not affected, so you are referring to the heirs who receive a windfall purely because they were related to the right person and managed to not be removed from the will before they died? 

Flipside:

why are we as a society entitled to any of it, just because someone died?

[fattyflattie 4640]

1 minute ago, slorch said:

Flipside:

why are we as a society entitled to any of it, just because someone died?

Because it’s not fair some people’s families are much more successful than others.  Or something like that.  

Edited June 10, 2021 by fattyflattie

[Dahobbs 18185]

3 minutes ago, UncleSonny said:

You'll never guess who came up with this fairy tale and continue to push it:  

https://cei.org/studies/the-anti-environment-estate-tax-why-the-death-tax-is-deadly-for-endangered-species/

Oh wait, you did guess "libertarian think tank"? Never mind then.

LOL at this example:

"The “death tax” destroys habitat.  Consider the impact of the estate tax on endangered species. Over 75 percent of species currently listed under the Endangered Species Act rely upon private land for some or all of their habitat. Yet the estate tax imposes a significant burden on private landowners who wish to maintain land in an undeveloped state from generation to generation."

Donate the land to a charitable trust whose mission is keeping the land ecologically undisturbed. Crisis averted! Oh wait, it turns out we aren't really talking about people who actually have any interest in the environment at all, but rather want to keep hoard the resources of the country for their family in perpetuity. I see no reason why a significant estate tax would be unfair to them. 

[wildcat09 29556]

Oh god, we're about to get slorch'd. 

[Guest]

3 minutes ago, wildcat09 said:

Oh god, we're about to get slorch'd. 

Just answer the fucking question.

 

Ohhh wait.  there isn't a good answer, unless you think, "Well how the hell else are we gonna pay for all of this bullshit government isn't supposed to be doing?" is a proper response.

Edited June 10, 2021 by slorch

[fattyflattie 4640]

5 minutes ago, Dahobbs said:

Oh wait, it turns out we aren't really talking about people who actually have any interest in the environment at all, but rather want to keep hoard the resources of the country for their family in perpetuity.

Hoard their own assets? 

[Guest]

3 minutes ago, wildcat09 said:

Why is Donald Trump Jr. entitled to have the government give him property for free?

Yep. disingenuous rhetoric is all you have.

Only certain people should be given free shit from the government...

Edited June 10, 2021 by slorch

[workswithseed 2201]

2 minutes ago, wildcat09 said:

Why is Donald Trump Jr. entitled to have the government give him property for free?

Can't give money out, if the government doesn't have money.

[wildcat09 29556]

Just now, slorch said:

Yep. disingenuous rhetoric is all you have.

Look man, we've had this conversation before. Everyone tried to be very patient and explain to you how and why property and inheritance works the way it does, but you weren't smart enough to understand any of it so you just kept throwing a temper tantrum. I'm not doing it again.

[UncleSonny 6790]

10 minutes ago, workswithseed said:

I don't know who they are, but is the quotations necessary?

Because that's what they are and I quoted for accuracy I guess. I didn't really expect to be questioned on that honestly. Are quotation marks offensive?

8 minutes ago, fattyflattie said:

Because it’s not fair some people’s families are much more successful than others.  Or something like that.  

"Look, Ol'Pappy didn't bust his ass his entire life to amass a great fortune just for me, his great grandson, to be forced to earn my own living. What am I supposed to do, take my paid-for world class education, contacts from a life of privilege, and the paltry high 6 figures/low 7 figures I was given free and clear when he died and just go out and make my way in this world? And do what exactly, work? Like a job or something? Fuck that."

[fattyflattie 4640]

1 minute ago, UncleSonny said:

"Look, Ol'Pappy didn't bust his ass his entire life to amass a great fortune just for me, his great grandson, to be forced to earn my own living. What am I supposed to do, take my paid-for world class education, contacts from a life of privilege, and the paltry high 6 figures/low 7 figures I was given free and clear when he died and just go out and make my way in this world? And do what exactly, work? Like a job or something? Fuck that."

Yes.  Estate taxes and the like are why I laugh my ass off at the rich that hide all their $$$.  I don't blame them a single fucking bit.  The literal only reason 99% of people (with kids) work is to make their kid's life better than theirs was.  Whether that's providing them an education, or making sure their kids kids won't have to work, I don't see the difference. 

[workswithseed 2201]

1 minute ago, UncleSonny said:

Because that's what they are and I quoted for accuracy I guess. I didn't really expect to be questioned on that honestly. Are quotation marks offensive?

"Look, Ol'Pappy didn't bust his ass his entire life to amass a great fortune just for me, his great grandson, to be forced to earn my own living. What am I supposed to do, take my paid-for world class education, contacts from a life of privilege, and the paltry high 6 figures/low 7 figures I was given free and clear when he died and just go out and make my way in this world? And do what exactly, work? Like a job or something? Fuck that."

I thought of this.

 

[Dahobbs 18185]

20 minutes ago, fattyflattie said:

Hoard their own assets? 

Your argument is circular and assumes they have a right to the assets in perpetuity. As part of the social contract, they have received the benefit of being able to collect and enjoy these assets during their lifetime. I think it is only fair that after they pass, that a substantial portion of the assets return to society for recirculation. It is well established that the government can tax for the benefit of the society generally. I think preventing the accumulation of substantially all of the country's assets into the hands of a few families is a worthwhile goal that benefits society. You're free to disagree. You'd be wrong. But that is allowed too. 

Edited June 10, 2021 by Dahobbs

[deadshank 24654]

5 minutes ago, UncleSonny said:

 

"Look, Ol'Pappy didn't bust his ass his entire life to amass a great fortune just for me, his great grandson, to be forced to earn my own living. What am I supposed to do, take my paid-for world class education, contacts from a life of privilege, and the paltry high 6 figures/low 7 figures I was given free and clear when he died and just go out and make my way in this world? And do what exactly, work? Like a job or something? Fuck that."

Why do you care so much what others have?  Did they take it from you?

What do you have that others want?  Would you give it to them through altruism, public pressure or by government mandate?

If some guy is a trust fund baby then so be it.  If you look down your nose at them then it says more about you than them.  

Focusing on what others have is not a great way to view life.  Envy is a waste of life. 
 

 

[Sbbruin 22082]

2 minutes ago, Dahobbs said:

Your argument is circular and assumes they have a right to the assets in perpetuity. As part of the social contract, they have received the benefit of being able to collect and enjoy these assets during their lifetime. I think it is only fair that after they pass, that a substantial portion of the assets return to society for recirculation. It is well established that the government can tax for the benefit of the society generally. I think preventing the accumulation of substantially all of the country's assets into the hands of a few families is a worthwhile goal that benefits society. 

OK, comrade. 

[Guest]

3 minutes ago, Dahobbs said:

Your argument is circular and assumes they have a right to the assets in perpetuity. As part of the social contract, they have received the benefit of being able to collect and enjoy these assets during their lifetime. I think it is only fair that after they pass, that a substantial portion of the assets return to society for recirculation. It is well established that the government can tax for the benefit of the society generally. I think preventing the accumulation of substantially all of the country's assets into the hands of a few families is a worthwhile goal that benefits society. You're free to disagree. You'd be wrong. But that is allowed too. 

Pure bullshit.

[workswithseed 2201]

https://en.m.wikipedia.org/wiki/Social_contract

Social contract

Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority

 

Yeah, fuck all of that.

[wildcat09 29556]

1 minute ago, workswithseed said:

https://en.m.wikipedia.org/wiki/Social_contract

Social contract

Social contract arguments typically posit that individuals have consented, either explicitly or tacitly, to surrender some of their freedoms and submit to the authority

 

Yeah, fuck all of that.

Are you a sovereign citizen?

[fattyflattie 4640]

11 minutes ago, Dahobbs said:

It is well established that the government can tax for the benefit of the society generally. I think preventing the accumulation of substantially all of the country's assets into the hands of a few families is a worthwhile goal that benefits society. You're free to disagree. You'd be wrong. But that is allowed too.

That's fine then.  Let's do it for everyone.  Second generation American inheriting 20k from parents that worked their entire lives to save that, oh well, social contract, good of society, blah blah.   If we are looking to benefit society, then everyone in the society needs to be chipping in.  I assume they are part of this "social contract" and their money is likely just as green. 

[workswithseed 2201]

Just now, wildcat09 said:

Are you a sovereign citizen?

I don't want cops killing me cause of tinted windows.

[Guest]

3 minutes ago, wildcat09 said:

Are you a sovereign citizen?

How high is the wall?