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Who died and left the US $7B?

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Re: Who died and left the US $7B?

#281

Post by kaibee »

wisty wrote: post #90
Kapura wrote: post #10

Pretty obscene that somebody could have so much wealth that $7,000,000,000 is just the tax bill. Also weird that it's framed as a "gift."

It's not real money. They aren't holding all the gold like a dragon. Or maybe they are, but that isn't hurting anyone, it's wealth not consumption. They consume the same number of calories as a poor person. They breathe the same amount of air. Maybe they have a few extra bedrooms, but their consumption could easily be less than a millionaire.

Idk man, I'm pretty sure I consume a lot fewer labor hours than a billionaire with a super-yacht. The thing to focus on is how many labor-hours someone is consuming. When a billionaire allocates ~20 people of labor-hours every day to maintaining that super-yacht, that means there's ~20 people fewer labor hours for services for everyone else. And building that super-yacht also consumed a lot of high-skill labor hours.

Re: Who died and left the US $7B?

#282

Post by bluGill »

TheCoelacanth wrote: post #268
_bin_ wrote: post #213

Earlier quoted context omitted.

You can't just arbitrarily set the status quo that way, can't just sneak a premise that the state has default a right to collect a piece of arbitrary appreciation on an asset (as all assets are used for speculation) when the owner hasn't actually gotten cash from that, and that any government that doesn't tax that is just cutting someone a break on something rightfully owed. The state of nature is no tax, and as it's…

> The state of nature is no tax The state of nature is no property. Billionaires can't exist without a government enforcing their property rights. Why shouldn't they pay the entity that made it possible for them to accumulate their vast wealth?

The state of nature is it is your property so long as you can protect it. There are lots of different ways to do that. Many animals have concepts of owned territory which they protect in various ways.

Re: Who died and left the US $7B?

#283

Post by tim333 »

metacritic12 wrote: post #179
_bin_ wrote: post #162

Earlier quoted context omitted.

This is something people love to rage about, yet it's not one with an obvious fix. The counterpoint is that this leaves money invested, which means others invest in other things, and still entails interest payments. It exists in part because you don't want someone who inherited his parents' house and wants to move in to go broke trying to pay taxes, or have to re-mortgage it, with an even stronger case with family fa…

The obvious fix is to not step up basis on death. The estate tax already means that the estate of a person who dies may need to sell / divide / split stuff to pay the government. There already is no fundamental protection for an asset passing unscathed from a parent to a child. I don't see how not stepping up basis qualitatively changes this. And your argument of "you want a child to be able to inherit a family busin…

I'm not sure that's a very good fix because the data of how much was paid for the assets may not be available after their owner is dead. The system in the UK seems to work ok for the most part. No CGT on death (the equivalent of step up basis in the US) but 40% inheritance tax on most of the assets over £325K.

We do have the odd exemptions like Clarkson's Farm which was bought partly for inheritance tax avoidance, but you don't have to do that.

Re: Who died and left the US $7B?

#284

Post by kjkjadksj »

pdonis wrote: post #272
jjav wrote: post #256

Earlier quoted context omitted.

> therefore we should set constraints on what the majority can do Which inevitably leads to the question: who should get the power to do that and why they, specifically?

You have it backwards. The actual question is, how did the majority magically get the power to enforce its will on the minority in the first place?

The majority held this power as long as we’ve been a social species. Even a Pharaoh lives with consent of the majority even if they’ve convinced that majority they are divine.

Re: Who died and left the US $7B?

#285

Post by opo »

Rebelgecko wrote: post #254
_bin_ wrote: post #223

Earlier quoted context omitted.

I'm very much on your side of the argument but it's common practice. It's not like you can walk into a bank tomorrow and ask for that sort of thing, but for a HNW customer who makes use of lots of private banking services it's routine. I'm not Bezos or part of his family office so I can't say for sure. My guess would be a mixture of capital demands elsewhere (Blue Origin?) and a desire to diversify. Start-up founders…

Is it still that common? I'm not super duper high net worth so maybe I'm missing out on the good deals, but my bank offers these loans interest of SOFR+2-4% depending on your net worth. When the SOFR rate is <1% like during COVID, it's a pretty good deal. When the SOFR rate is more like 5% (which I think is more typical?), it's not such a good deal.

>When the SOFR rate is It is very common to make loans based on using stocks, etc. as collateral. But that isn't what people claim happens with the "buy, borrow, die" loophole. The claim is that these loans have incredibly low interest rates (much lower somehow than the IRS Applicable Federal Rate) and the interest is only payable upon death - which might be decades away. That is how the borrower can supposedly avoid capital gains taxes.

Maybe there are rich lenders who don't understand the time value of money, but doing a quick search, I have not found one stat on how many lifetime loans like this are actually being done.

Re: Who died and left the US $7B?

#286

Post by [deleted] »

gperkins978 wrote: post #266
witchammer wrote: post #225

Earlier quoted context omitted.

> The state of nature is no tax > You don't get to argue from the point that your preferred taxation regime is simply how things should be Those two statements seem mildly contradictory.

The state of nature has no schools, no water, no sewer and no police. If one is going to live in a civilized nation, he should pay his share of taxes. Capital gains is 15%. That is not an outrageous amount. Everyone should pay because everyone benefits. One is free to leave and live in tax shelter principality or Sultanate. There is a problem with high taxes on earned income, but anyone complaining about the 15% capi…

[deleted]

Re: Who died and left the US $7B?

#287

Post by CPLX »

_bin_ wrote: post #213
geysersam wrote: post #183

Earlier quoted context omitted.

It's a funny argument the one about the family farm. In this case it's not even about inheritance tax. It's a sob story about a guy who couldn't inherit the farm because his dad owed the state money because they had let him not pay tax on his capital gains for a long time. Sorry for not tearing up.

You can't just arbitrarily set the status quo that way, can't just sneak a premise that the state has default a right to collect a piece of arbitrary appreciation on an asset (as all assets are used for speculation) when the owner hasn't actually gotten cash from that, and that any government that doesn't tax that is just cutting someone a break on something rightfully owed. The state of nature is no tax, and as it's…

We (almost) invariably tax money when it changes hands. Like if you own something and then I own it, there's a tax. If I give something of value to someone else, the government takes a cut.

There's a ton of nuance there, sometimes intended to avoid certain negative consequences that feel like double taxation or that provide peverse incentives. But that's the general premise.

If you pay taxes on your income and then use it to buy something from me, I have to pay taxes on it too. That's my income now.

If my father paid taxes on something he earned that's his tax bill. When I get it, I have to pay too. That's my income now.

This is very clear and consistent. Outside of all the people with an interest in pretending otherwise.

Also worth noting that there's no state interest whatsoever in preserving generational wealth. Just none. The fact that kids have to earn their own money instead of a family coasting for generations is a good thing for the most part.

There are some plausible arguments for preserving continuity in certain cases, like community based family owned businesses, farms, that kind of thing. But everybody already agrees with that which is why those kinds of things have been generally exempt from estate taxes for generations. The people telling you otherwise are trying to trick you into caring about their agenda, which is how to not pay taxes on their substantial wealth.

Re: Who died and left the US $7B?

#289

Post by NoMoreNicksLeft »

TheCoelacanth wrote: post #268
_bin_ wrote: post #213

Earlier quoted context omitted.

You can't just arbitrarily set the status quo that way, can't just sneak a premise that the state has default a right to collect a piece of arbitrary appreciation on an asset (as all assets are used for speculation) when the owner hasn't actually gotten cash from that, and that any government that doesn't tax that is just cutting someone a break on something rightfully owed. The state of nature is no tax, and as it's…

> The state of nature is no tax The state of nature is no property. Billionaires can't exist without a government enforcing their property rights. Why shouldn't they pay the entity that made it possible for them to accumulate their vast wealth?

Given that most billionaires have their billions as imaginary ownership of gigantic corporations, how exactly would someone steal their shares from them such that government needs to enforce their property rights? Can I just walk up to the bank and say "hey, I have $100 billion worth of Facebook stock, gibs me da money"? You know, but for the feds swooping in (or possibly the Delaware state troopers) and shutting that down?

The government may indeed enforce property rights in a meaningful way, but it doesn't seem like it's doing this for billionaires.

> Why shouldn't they pay the entity that made it possible for them to accumulate their vast wealth?

If this were indeed a true description of how that process occurs, why are you so comfortable with letting the government "make that possible"? Where in the Constitution (or even common law) does it grant the government this power?

Re: Who died and left the US $7B?

#290

Post by bluGill »

kelseyfrog wrote: post #274
cperciva wrote: post #226

Earlier quoted context omitted.

Leaving aside the fact that Sam Walton was an American and so his assets had no "deemed disposition" upon his death: Walmart is a publicly traded company, so if his heirs inherited a few % less of the company it wouldn't make a big difference. In the "family farm" (and "family business") scenario, we're talking about private companies -- whether incorporated or not, all the owners are related. If part of such a compa…

Couldn't family farms plan around such an event occurring, either by having the cash on hand to pay taxes or through some sort of insurance?

Where does that cash come from? Family farms often are worth millions on paper, but it is all land. There typically isn't that cash. And the way tax laws and inflation works you are discouraged to not keep that kind of cash on hand - there is no place to save it that keeps pace with inflation after taxes that is low risk (If everyone tried this you will hear horror stories about someone who puts the money aside and then the parents die so it is needed but the market is down and so they lost money)
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