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My Parents Give Me $28k a Year

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Re: My Parents Give Me $28k a Year

#171

Post by iguy »

intopieces wrote: post #11

My guess is this is of interest to us because it sounds an awful lot like UBI. But, I think the key difference is that the money is connected to parents, who presumably have a standard for how it's spent. If E.J. ended up spending it on drugs or other perceived vices, there's a chance the money might be cut off. The point of UBI is that it is 100% no-strings-attached, which has a different dynamic. That dynamic is on…

> an awful lot like UBI. But, I think the key difference is that ... parents ... have a standard for how it's spent.

There's another important difference from UBI, that only a few kids now get this $28k. So being one of them, you can out-bid the others on having a nice apartment... whose price would otherwise rise.

This applies to work too: she could get ahead artistically by being able to write full time. Ahead of the competition, that is, who had to work. UBI wouldn't have given her that advantage.

Re: My Parents Give Me $28k a Year

#172

Post by cup »

mberning wrote: post #167

First off - I really dislike it when people deal with blocks of people as if they are a monolith. As if all white people have some innate starting advantage, all black people have some disadvantage, etc. It’s a brutally racist mentality that is very common. Secondly, poverty is not a lack of money or material wealth. That is part of it and is definitely a symptom. But actual poverty is a culture and a set of habits t…

All white people do have some innate starting advantage due to their whiteness. That isn't to say they don't also have disadvantages too, for instance poverty, disability etc.

Having white skin though gives you an advantage in a system that prioritises whiteness over other colours. Its not racist to discuss this.

Re: My Parents Give Me $28k a Year

#173

Post by ska »

maerF0x0 wrote: post #140
astrodust wrote: post #26

Earlier quoted context omitted.

At low levels, which aren't taxed, it's not going to affect anything. At high levels, like giving your kid ten billion dollars, you're making it impractical or impossible for others to advance economically. You're creating a class of people with indestructible inherited wealth that never have to work, that only have to collect interest and rent on the backs of everyone else. That's what inheritance tax and gift taxes…

>You're creating a class of people with indestructible inherited wealth that never have to work, that only have to collect interest and rent on the backs of everyone else. That wealth is invested in profitable ventures that either create benefits in the system (assuming rational actors) or 2) lose value due to poor choices. Capital is rewarded because the investors are taking opportunity cost risks that advance the s…

  assuming rational actor
There is a reason such toy models are called "toy models". They are very useful for understanding and interrogating ideas. They aren't so useful for modeling real systems. One can only hope that policy making is a little more sophisticated (alas, often in vain).

Re: My Parents Give Me $28k a Year

#174

Post by bachmeier »

ntumlin wrote: post #21

Maybe this isn't the right place to ask, but could someone explain the rationale for taxing gifts within a family? Ignoring the possibility of using it to circumvent an income tax, etc., my initial thought is that if my dad wants to give me $30,001 this year, or even $300,000 this year, that he's already paid taxes on it and it's not the government's business. I feel the same way about inheritance taxes, although tho…

> I feel the same way about inheritance taxes, although those are high enough I'm not too concerned about it.

Having just gone through this, your parents must be really, really wealthy if your inheritance taxes are high. You can inherit many millions of dollars and not pay a cent in taxes in the US.

Re: My Parents Give Me $28k a Year

#175

Post by microtherion »

ntumlin wrote: post #21

Maybe this isn't the right place to ask, but could someone explain the rationale for taxing gifts within a family? Ignoring the possibility of using it to circumvent an income tax, etc., my initial thought is that if my dad wants to give me $30,001 this year, or even $300,000 this year, that he's already paid taxes on it and it's not the government's business. I feel the same way about inheritance taxes, although tho…

> if my dad wants to give me $30,001 this year, or even $300,000 this year, that he's already paid taxes on it and it's not the government's business

Surely you agree that if he instead were to hire an extra gardener with the same $30,000, that money would be taxable as the gardener's income? So why should somebody who works for their money pay taxes on it, but not somebody who receives the money as a gift?

Re: My Parents Give Me $28k a Year

#176

Post by jws »

secabeen wrote: post #34
ntumlin wrote: post #21

Maybe this isn't the right place to ask, but could someone explain the rationale for taxing gifts within a family? Ignoring the possibility of using it to circumvent an income tax, etc., my initial thought is that if my dad wants to give me $30,001 this year, or even $300,000 this year, that he's already paid taxes on it and it's not the government's business. I feel the same way about inheritance taxes, although tho…

The gift tax exists largely to prevent people from avoiding estate tax by gifting large sums of money just before death. That's why they're linked. If there was an estate tax and no gift tax, people would just give all their money away in the years leading up to death. The gift tax exemption is co-mingled with the estate tax exemption, so you can just think of the gift tax as pre-death estate taxes. As for why we hav…

At the generational time frame, the estate tax serves to capture otherwise untaxed asset appreciation…

Consider Grandpa buys an asset; as company, land, a football team, whatever. 50 years later Grandpa dies and his will transfers it to you. If Grandpa had sold it the day before he died and given you the stack of money, he would have been taxed on the appreciation of the investment. If there were no estate tax, then that appreciation would never be exposed to taxation as long as families pass their assets down to heirs.

The estate tax isn't so much about controlling plutocracy as it is leveling the taxation field between people who buy and sell assets and people with so many assets that they don't need to sell them.

Re: My Parents Give Me $28k a Year

#177

Post by DoreenMichele »

greenshackle2 wrote: post #163
DoreenMichele wrote: post #125

Earlier quoted context omitted.

Arts is not mere entertainment. Students with an arts rich education: Have better grade point averages Score better on standardized tests in reading and math Have lower dropout rates http://www.artsactionfund.org/pages/why

Are you saying people should pursue art as a primary occupation because it makes them better at math? That seems a bit backwards.

I'm saying the idea that the arts are frivolous is in error and I'm saying not supporting the arts impoverishes us all.

Re: My Parents Give Me $28k a Year

#178

Post by [deleted] »

DoreenMichele wrote: post #78
soared wrote: post #69

Earlier quoted context omitted.

Your point becomes even more true when you think about kids who grew up with not enough or even unhealthy foods. Their brains didn't have the resources to develop, so they are hamstrung from the start. Even more true when you see poorer neighborhoods near polluting factories and industrial zones.

Yes, I would really like to do something to put in a floor, so to speak. Something to help mitigate conditions for the people who are the most burdened by current circumstances. Other people seem to think that's charity or a bleeding heart or something. I see it as just insurance to protect everyone so that stumbling doesn't ruin your life permanently with little to no hope of ever finding your way back to a comforta…

[deleted]

Re: My Parents Give Me $28k a Year

#179

Post by rorykoehler »

rigged-system wrote: post #149
drblast wrote: post #24

The value of this gift is much greater than then nominal sum. My parents gave me $3000 for the down-payment on my first house, which cost $100k. Otherwise I wouldn't have been able to afford to buy a house. But I bought instead of renting and ended up selling it for $200k years later. That was a big financial win early on and meant I was never in debt again. My financial situation at the time was barely-making-ends-m…

I sometimes think about debt the same way. In college I scraped by on ramen noodles and avoided doing anything that cost money. For example I wanted to go camping but didn't have say, $100 for a tent. If I had just put the $100 on my credit card, I'd probably have happy memories with friends, but now I can't get that experience back for any price.

When I was in college I was broke one summer and not keen on working as I was heavily invested in producing music (which wasn't paying at the time). I took a £500 credit card and then immediately blew it on a weekend at the Edinburgh fringe festival. I spent 3 weeks eating plain white rice afterwards until I started working because I had to as that was all I had left at home. Though I'm now interested in FIRE and have a family and this behaviour is the opposite of what is required I'm still happy I did it. One of the best memories I have. I should note that I definitely did this from a position of privilege and if shit really hit the fan I could have always swallowed my pride and asked for a family bail out. Not sure if I would feel the same way had this not been the case.

Re: My Parents Give Me $28k a Year

#180

Post by InitialLastName »

kcorbitt wrote: post #32
ntumlin wrote: post #21

Maybe this isn't the right place to ask, but could someone explain the rationale for taxing gifts within a family? Ignoring the possibility of using it to circumvent an income tax, etc., my initial thought is that if my dad wants to give me $30,001 this year, or even $300,000 this year, that he's already paid taxes on it and it's not the government's business. I feel the same way about inheritance taxes, although tho…

It's a fair question. Personally though, I come down on the exact opposite side of the question – all gifts should be highly taxed, with maybe a nominal tax-free allowance of a few thousand dollars. Making large gifts tax-free is just another big advantage that kids born to rich parents get over those born into less-fortunate circumstances. If we're in favor of equality of opportunity (and almost everyone claims to b…

> If we're in favor of equality of opportunity (and almost everyone claims to be)

The problem with that notion is that people often talk around each other W.R.T what it actually means. For some people, the only value of that opportunity is to be able to create a better life for their kids, often through inheritance.

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