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Who died and left the US $7B?

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

#391

Post by aprilthird2021 »

ip26 wrote: post #154
shusaku wrote: post #42

> There are many complexities, but one popular technique is to put assets into trusts that allow the returns to accrue for heirs without taxation. Nike founder Phil Knight, for example, put his company’s stock in a series of trusts to benefit his children. The trusts pay him a modest return, but the rest of the gains avoid incurring estate tax, including Nike shares that were worth $6.1 billion in 2021, Bloomberg rep…

What are the odds of something like WWII though, compared to the odds it’s all spent by the second generation?

Normally you'd be right, but we are eerily close to a WWIII right now...

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

#392

Post by arcticbull »

bluGill wrote: post #365
arcticbull wrote: post #323

Earlier quoted context omitted.

That requires getting a different job, my friend. Vendor lock-in with housing is real.

In Singapore and a few other places. However in the US housing is not a government monopoly (sometimes low income housing is). You can always find a landlord in a different town. No need for a new job as you still live in the same metropolitan area.

Ok but what if the landlord raises rent by $200, while commuting would cost me an extra $250. Or what if I move from a town with good public transit to one where I have to drive by your own admission, several towns over.

What if moving costs $1000, which is another $83 per month over a year.

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

#393

Post by jancsika »

_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…

> 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.

That's a great point.

But note that you also cannot arbitrarily jump so far back in an implied chain of premises as if to suggest that you've somehow build your own (suspiciously libertarian-leaning) argument from first principles. For example:

> The state of nature is no tax

Well, the state of nature is also tribalistic. But imagine someone making an argument that collectivizing the farm in question is right because the state of nature is humans living in a collective.

You'd rightly reject such an appeal to nature in that case. Therefore, you should reject your own appeal above.

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

#394

Post by entropicdrifter »

Wytwwww wrote: post #370
_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, and as it's unpleasant Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets.. No taxes = No government = No excess (above subsistence level) accumulation of assets

And the people who have a strong drive for the accumulation of capital/assets build armies and those armies shake down subsistence-living people for food and supplies in order to sustain themselves and suddenly you've got taxes again

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

#395

Post by mindslight »

_bin_ wrote: post #162
Jedd wrote: post #94

A fascinating reddit post was mentioned here about a month ago - about the mildly famous (if a little macabre) 'Buy, Borrow, Die' cycle used by the obscenely-wealthy to - multi-generationally - avoid tax obligations. https://old.reddit.com/r/BuyBorrowDieExplained/comments/1f26... HN comments: https://news.ycombinator.com/item?id=41408772

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…

There is a quite simple fix that already applies to the IRAs that most people use as their main tax deferral - if you take a loan using your IRA as collateral, that loan is considered a distribution from the IRA, and is thus taxed. Requiring capital gains to be realized when an asset is used as collateral wouldn't be nearly as problematic as you're making out. For example, if someone's company appreciates to $50M and they then wish to turn some of that abstract value into concrete cash, then yes it's time to pay some taxes. Those taxes can simply be paid with some of the money from the loan too, you know.

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

#396

Post by travisb »

sailingparrot wrote: post #302
_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…

> Of course, as your company continues to appreciate, you will be forced to continue reducing your ownership stake Why? In an hypothetical world where getting a loan on an asset is impossible (or taxed the same as realizing the gains), you still don't get taxed on unrealized gains. You can leave your stock alone and you aren't forced to sell anything. Of course if you decide that now that you are worth a billion you…

The fix in your edit isn't an obviously workable fix though. When talking about the rich, it's best to talk about private corporations -- because that's really how the operate.

Firstly, do you want to prevent corporations from taking loans against their assets? Preventing that seems like it would be quite detrimental.

Secondly, how do you differentiate legitimate corporate expenses from personal expenses? Is a billionaire having one of their corporations rent a yacht from another of their corporations for a business meeting with another CEO who just happens to also be their friend a legitimate business expense or a personal expense? What if the yacht rental company rented it to the CEO's company instead?

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

#397

Post by MisterBastahrd »

lazide wrote: post #326
MisterBastahrd wrote: post #317

Earlier quoted context omitted.

Not even sure why I should be upset in the first place. If I get fired from my job, nobody is going to run to my aid crying that I deserved that job because my daddy worked really hard to put me through school (he didn't, but that's besides the point) and he wanted me to have it. No, I just get fired. How is a family farm any different? It's just an asset. Birthrights shouldn't exist past citizenship.

Because the idea of leaving something to your kids (and a legacy beyond oneself) is a fundamental motivator for most people?

You can make that claim, but the fact of the matter is that the US is a representative democracy, and our elected representatives make the laws. We are free to choose other people for the job if we want different laws. The vast majority of people were not lucky enough to be in a situation where their bumpkin ancestors just happened to possess a large swath of land, and so we don't vote to protect large swaths of inherited land.

They owe taxes? They can pay them. They can afford to pay them because they have inherited assets. "Oh no, they're gonna get a diminished inheritance. What a disaster." I'm not getting one, and neither are most of the people in the country. They'll still have their inheritance, they just won't have the land. And they aren't entitled to it if they don't have the money to pay their taxes.

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

#398

Post by [deleted] »

_bin_ wrote: post #176
cperciva wrote: post #171

Earlier quoted context omitted.

This is something people love to rage about, yet it's not one with an obvious fix. In Canada, assets are deemed to have been disposed of upon death (or gifting) so the estate pays capital gains taxes on the accrued profit. There are a few exemptions for political reasons, e.g. to allow farmers to pass appreciated farm property to their children tax free, but they're sufficiently limited that they don't cost very much…

Family farms are a good example but there are still plenty of others like a family business. I wouldn't care to see an increasing fraction of assets fall into institutional ownership simply because people are taxed out of owning them intergenerationally. There's a massive difference between "the government will tax you for part of your value" and "the government will, over a sufficient time, tax you entirely out of e…

[deleted]

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

#399

Post by lazide »

jacobolus wrote: post #364
lazide wrote: post #330

Earlier quoted context omitted.

Eh, the oldest form of government is a Kingdom. If a government won’t enforce others rights to property, eventually someone is going to form a government where everyone’s things are theirs eh? Since what other option do they have if they want to own something.

That's fine. Such people can renounce their citizenship and pay the required exit tax, convert all their assets to gold bars or whatever, and go move somewhere in the world without a functioning state, where they can hire a private militia, build their own basic infrastructure, etc.

why would they do that when they can take over the gov’t and steal everyone else’s stuff? (see Russia, Venezula, China, and many others)

Notably, the biggest thefts seem to happen when they can convince people that the gov’t is doing it for ‘the good of the people’, and they’re ‘going after the rich people’, and then they can pocket it when no one is looking.

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

#400

Post by svara »

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…

> The obvious fix is to not step up basis on death.

And that's how it's done in many parts of the world, works perfectly fine. There's really no reason to step up basis except to provide that loophole, which is probably exactly the reason it's done.

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