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Who died and left the US $7B?

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

#411

Post by lesam »

a_c_s wrote: post #349
_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…

Getting a loan against assets is another way of "using" it, so why not make that a taxable event? Just like now your stock value would not be taxed while it is invested. But now it would be taxed if you use it as collateral for anything. If you don't want to pay capital gains by selling the underlying stock then you can just get a bigger loan and pay the taxes out of that. There, now you don't have to liquidate but t…

This still leaves open ‘buy, don’t borrow, die’ as a way for the dynastically wealthy to opt out of paying capital gains tax.

I think the sensible option is making death a taxable event, rather than borrowing (with perhaps exceptions for the family farm, but not for the family billion dollar business).

And the second best solution is eliminating the step-up basis, which without deemed disposition at death is just a free gift of capital gains tax rebates to heirs of the most wealthy.

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

#412

Post by quesera »

ipaddr wrote: post #136
cipheredStones wrote: post #124

Earlier quoted context omitted.

Yes, he was capturing value for his clients , and getting paid some of that. That isn't the same thing as doing something that increases the amount of wealth in the economy, which was my point.

The entire point of the stock market is to get capital to companies to allow them to do things that may increase wealth (could be local, state, country or globally). Successfully doing this means the companies he supported did well.

> The entire point of the stock market is to get capital to companies

Only if the shares are newly-issued, though.

Usually your counterparty is just someone with different cash flow needs, or who disagrees with you about the future. No benefit accrues to the company.

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

#413

Post by JALTU »

1oooqooq wrote: post #378
niobe wrote: post #16

My takeaway: Forbes rich list amounts are basically fictional. Do you think they are devoting the kind of resources it would take to unravel each billionaire's finances? Clearly not. If it's mostly large sharehioldings they might be in the ballpark in some obvious cases.

forbes sell entertainment. their clients are not even who read it, but advertisers who but advertisement. readers and space for ads on the magazine pages are both called inventory in the biz.

A legit biz, I mean, look at everyone reading and commenting here! :)

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

#414

Post by edm0nd »

EricE wrote: post #120
drexlspivey wrote: post #46

This $7B is enough to fund the US Federal government for about 8 hours

Yes, what a colossal waste - would have been much better going to charities.

On the flipside, imagine if they gave $7B to an anti-government group or militia to perform a coup or attack another country...

That could buy a ton of arms and equipment and likely enough funds to be successful depending upon what the ultimate goal was.

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

#415

Post by rootusrootus »

leprechaun1066 wrote: post #137
Amorymeltzer wrote: post #21

Matt Levine touched on this briefly today, and I liked his two cents: >It’s kind of cool? Like you could imagine a hierarchy, in roughly ascending order of wealth: >Too poor to pay taxes. >Rich enough to pay taxes. >Rich enough to not pay taxes. >Rich enough to not even bother with not paying taxes.

In 2021/2022 there were 60 people in the UK who probably fall into that last group. Together their taxes accounted for about 1.4% of the UK tax bill despite being something like 0.002% of the population.

The implied assertion with that metric is that every individual taxpayer should pay the same amount. That seems like a hard sell.

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

#416

Post by rootusrootus »

bluGill wrote: post #295
sushid wrote: post #19

Earlier quoted context omitted.

The article highlights that it’s not actually that hard for the ultra-wealthy to avoid a massive estate tax bill through proper tax planning and investment strategies. What’s striking here is that this individual wasn’t even the richest person to ever die, yet he paid the largest estate tax in history, likely by choice.

> likely by choice. There is an element of competitiveness there. Some rich want to be known as rich and so they can brag about paying the most taxes that in turns implies they have the most money. Others want to be quieter about their wealth and so don't want you to know they have it and wouldn't tell you how much taxes they pay.

If he were doing it competitively, I don't understand the strategy. His name was leaked, not announced, and since he is dead he cannot feel like he won the competition.

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

#417

Post by logifail »

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

> Being able to accumulate capital, at least without having to resort to extreme violence is also about as "unnatural" as it gets..

(This is a genuine clarifying question, because I'm struggling here) are you suggesting that saving is somehow unnatural?

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

#418

Post by rootusrootus »

schneems wrote: post #118
somethoughts wrote: post #51

Earlier quoted context omitted.

Interestingly a lot of the larger philanthropic organizations are just as administration heavy as the US government and suffer from the same mission creep and the same obfuscated, bureaucratic decision making process, etc. Not to mention the leadership is often richly compensated (i.e. $1M in salary) and non-elected. In fact we should probably celebrate gifts to the US government more than we do.

> we should probably celebrate gifts to the US government more than we do. I had the idea that we should put a donation box on tax forms. The 100 top donators get on the “US 100” list (like Forbes) but it’s based ONLY on how much you donate, not how much you claim to be worth. It’s one thing to claim to be rich to a Forbes reporter, it’s another to have the (tax) receipts to back it up.

> I had the idea that we should put a donation box on tax forms.

I don't believe it's on a tax form, but you can absolutely just donate money to the US. They make it very easy, just go to pay.gov.

https://fiscal.treasury.gov/public/gifts-to-government.html

I like your idea of adding a leaderboard.

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

#419

Post by jjav »

kaibee wrote: post #277
jjav wrote: post #258

Earlier quoted context omitted.

> Renters do not pay property tax in the US. There's a simple way to visualize why is not true: You're renting a property for $1000/mo. Whatever the owner is paying for property taxes, you don't know. Then, property taxes go up by $200/mo. Do you think your rent won't go up by at least $200/mo as a direct consequence of the tax increase? Because it will. Because the renter is of course paying for all costs, including…

> Then, property taxes go up by $200/mo. Do you think your rent won't go up by at least $200/mo as a direct consequence of the tax increase? Because it will. Because the renter is of course paying for all costs, including those taxes. So, before property taxes went up, the landlord could have raised rents by $200/month, but hadn't because..?

> So, before property taxes went up, the landlord could have raised rents by $200/month, but hadn't because..?

Because you don't pre-date inflation.

It is the same as asking why the supermarket doesn't raise the price of milk to what inflation estimates say it'll probably be next year.

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

#420

Post by skizm »

mindslight wrote: post #389
skizm wrote: post #384

Earlier quoted context omitted.

I was under the impression that the estate has to pay the debts before the assets are disbursed, and the step-up basis occurs, thus collecting all appropriate taxes, just deferred until after death. This reddit post says the opposite is true. I cannot find the answer via Google. Does anyone know the order of operations? If the step-up basis occurs first, the fix here seems very obvious, but I assume ultra-wealth peop…

The asset value minus the debt (both on the date of death [0]) is what contributes to estate tax liability on the 706 form [1]. Then going forward, the asset basis is stepped up to what it was on the date of death (for both the estate entity and downstream beneficiaries), based on the idea the asset has already been taxed by the estate tax. This assumption falls apart when there isn't much value left in the asset-min…

So if I take a company public, and now own $10B in shares in a liquid stock (that I paid $0 for), take out a $1B loan, spend it all, and then die. What taxes need to be paid by the estate in that scenario?
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