*Scratching my head* What I could never figure out is that if Double-Taxation of Income is Unconstitutional. Then why do we have to pay taxes on our Social Security
Because that money was never taxed when you earned it?
Did we not pay that tax based on our income? Were we not FORCED to pay that tax with the promise of SS? and I may be wrong but we pay 6.2 percent of our income into SS and we have already paid taxes on our total income.
Double taxation? What about the estate tax, or inheritance tax as some call it?
That money was taxed when earned, yet somehow the government thinks they should get more when someone dies?
I thought that too, until I realized the estate tax is taxed because the person inheriting it did not pay tax on it. While I disagree with it, especially the amount at which it is taxed, I kind of can understand the reasoning.
Money that is earned is taxed. Money left to you that a thoughtful caring person already paid earned tax on, should not be taxed again.
I agree with you, but I see their thought process of it being money YOU didn't have, and YOU have not paid taxes on it.
We don't have to agree with each other, to respect each others opinion.
I know several people that owned farm ground. They paid property tax on it. They paid income tax on the crops they grew. They die, and? That 500 acres, valued at $8000 an acre comes out to $4 million. Nope, the heir didn't do anything, but now he needs to sell half of it (give or take) to pay the inheritance tax?
I mean, I can see if the heir sold all of the land, or some of the land..yes, tax him or her on what they sold. That's income for them.
But to say 'we need half, or close to it, because your dad gave it to you even though he paid taxes on it" is just confiscatory.
*Scratching my head* What I could never figure out is that if Double-Taxation of Income is Unconstitutional. Then why do we have to pay taxes on our Social Security
Because that money was never taxed when you earned it?
Did we not pay that tax based on our income? Were we not FORCED to pay that tax with the promise of SS? and I may be wrong but we pay 6.2 percent of our income into SS and we have already paid taxes on our total income.
Double taxation? What about the estate tax, or inheritance tax as some call it?
That money was taxed when earned, yet somehow the government thinks they should get more when someone dies?
I thought that too, until I realized the estate tax is taxed because the person inheriting it did not pay tax on it. While I disagree with it, especially the amount at which it is taxed, I kind of can understand the reasoning.
The estate tax exists, because it's the quickest way for people to grow their fortunes. In fact, it needs to be taxed at a higher rate for those who are richer, while lowering the exemption rate from $5 million to 500k imo. Most people have found their way around estate taxes by leaving their estate in a retainer annuity trust that, if the economy outperforms the treasury rate, the heir will get the inheritance tax free. Since most of an estate is built off stocks, land and other appreciating assets, these haven't been taxed through capital gains by the time an heir gets his money.
Also the US has a gift tax. If anyone ever gifted someone else over 15k dollars, then that money would also be taxed.
Some interesting thoughts there. I don't think $500k is a good threshold... That would hurt a lot of middle class families that have strived hard for what they have.... $2-3 million would seem pretty reasonable.
As for the benefactor not paying capital gains .... That's one thing, but if you buy $2 million of a stock and it shows a capital gain of $200k ... if Inheritance tax applies due to the estate being over the threshold .... Doesn't the tax get applied to the full $2.2 million? Not just the $200k ? .... Meaning the $2 million investment does get taxed twice.
Last edited by mgh888; 02/13/1909:50 PM.
The more things change the more they stay the same.
I know several people that owned farm ground. They paid property tax on it. They paid income tax on the crops they grew. They die, and? That 500 acres, valued at $8000 an acre comes out to $4 million. Nope, the heir didn't do anything, but now he needs to sell half of it (give or take) to pay the inheritance tax?
I mean, I can see if the heir sold all of the land, or some of the land..yes, tax him or her on what they sold. That's income for them.
But to say 'we need half, or close to it, because your dad gave it to you even though he paid taxes on it" is just confiscatory.
GOPer thinking would be the heir needs to pull himself up by the bootstraps and deal with it. Did the heir buy the property? Work and earn the property? Produce goods for that money? Nope.
That's why they tax it. AND before you neg out on me, I'm in the NO TAX IS FAIR camp. Taxes are just a way to keep you enslaved in the ponzi economy.
Your feelings and opinions do not add up to facts.
I know several people that owned farm ground. They paid property tax on it. They paid income tax on the crops they grew. They die, and? That 500 acres, valued at $8000 an acre comes out to $4 million. Nope, the heir didn't do anything, but now he needs to sell half of it (give or take) to pay the inheritance tax?
I mean, I can see if the heir sold all of the land, or some of the land..yes, tax him or her on what they sold. That's income for them.
But to say 'we need half, or close to it, because your dad gave it to you even though he paid taxes on it" is just confiscatory.
GOPer thinking would be the heir needs to pull himself up by the bootstraps and deal with it. Did the heir buy the property? Work and earn the property? Produce goods for that money? Nope.
That's why they tax it. AND before you neg out on me, I'm in the NO TAX IS FAIR camp. Taxes are just a way to keep you enslaved in the ponzi economy.
You wouldn't accept that if we traded another financial instrument like gold or beads even! But you not only accept that but expect it with the currency of the realm. WORTH LESS, check.
2) Because you were born here or live here (on a specific piece of land in the world), You have to pay taxes and pay them in US Dollars. If you didn't need those 'worth less' dollars to pay taxes, you wouldn't accept them in trade for your labor or goods. And since the government takes a big slice of those earnings for themselves, profiting from your labor, chaining you to the US Dollar so you have to keep earning and paying... Well that's Slavery. Check.
3) And this is just a kicker for the GOPers, if a portion of taxes are NOT SLAVERY because the funds are used for the common good of us all like infrastructure or military... Well then it becomes pure Socialism.
Last edited by OldColdDawg; 02/14/1912:04 AM.
Your feelings and opinions do not add up to facts.
Some interesting thoughts there. I don't think $500k is a good threshold... That would hurt a lot of middle class families that have strived hard for what they have.... $2-3 million would seem pretty reasonable.
As for the benefactor not paying capital gains .... That's one thing, but if you buy $2 million of a stock and it shows a capital gain of $200k ... if Inheritance tax applies due to the estate being over the threshold .... Doesn't the tax get applied to the full $2.2 million? Not just the $200k ? .... Meaning the $2 million investment does get taxed twice.
$500k would affect the middle class, myself and family included. Which is why I think the tax needs to be on a sliding scale, especially towards those under 2 million, maybe around 10%. Before the Bush tax cuts in 2001, the estate tax did start at a little north of 500k. Although, I guess I hadn't considered how the middle class family has changed from having multiple kids to just a single child, so I guess it would affect more families in the future.
I hope you don't mind, but I'm going to respond to your question at a federal level, just as there's a few states that have varying taxes with inheritance, but since they're not Ohio, I've never read about them in detail. Also, if I'm wrong in any of this Erik, please correct me if you're still reading this forum.
The inheritor wouldn't have to pay taxes on the full amount of the inheritance, just taxes on the amount that goes over the exempt amount (which is 10 mil this year). Now I believe that any inherited stock is based on the value of the stock when the original holder dies, not when it was originally purchased. They also only have to pay capital gains on the stock once they sell it, if they sell it at all. Most of this stock is relegated to private companies like Flying J or Trump than public companies like P&G, so it's uncommon for most people to sell stock they inherent. However, if they do sell it, I guess it would be subject to "double taxation", although the giver of the stock has not paid any taxes on the stocks during their life time. So where you want to draw the line on double taxation is where you want to draw it. I also think "double taxation" has sort of become a meaningless buzz word as we're constantly being double taxed, well the majority of us are. When we buy something we pay a sale tax from our previously taxed income. I don't mind double taxation as long as it makes sense. For example, I would LOVE a tax on transactions on the stock trade. Every time you buy a stock you should be taxed on it. Now whether that's half a point or not, that can be determined in another thread, but if double taxation makes sense I think we should roll with it.
I do think the wealthiest should pay more. But not be double taxed. Estate tax? I don't know what the total contribution this makes to the governments coffers but at the federal level I wouldn't tax anyone a penny under $2-3 million. And I don't know that the upper level of 40% is fair... At state level I see 4% and up starts to kick in at very low levels and generally seems to max out at about 15%-16%. So in theory if you hit the max threshold, everything above that can be taxed at 55% (state+federal) and that seems obscene. And no doubt anyone with that much wealth works obscenely hard to avoid paying it ... who wouldn't? Why not make it simpler and try to remove the need to avoid paying it?
$2 million can be the result of a middle class family working hard, saving hard and living a prudent life. Why penalize them - it's a lot of money yes, but it's been earned by the family - why put draconian restrictions in place taxing it? Above that a sliding scale - sure. I'd cap it lower than 40% at a federal level.
The more things change the more they stay the same.
Where is the double taxation occurring? No tax is paid when buying stocks. Also, how do you feel about the sales tax, gift taxes and property tax? They're all forms of "double taxation".
The estate tax used to be a big filler of government coffers. It's been pretty neutered now, but well over 15 billion a year, even at a rate of 30%. 7 States have an estate/inheritance tax, we can't make federal policies solely based on the citizens of NJ and DC. And people whose estate is worth over 10 million dollars, should be taxed much more than 35% (both fed and state) starting after the exemption point. They should pay near 70% imo, especially those in NJ, DC, Maine, NY and Illinois.
Rich people don't like to pay taxes, they barely like paying people. They will always try to find a way to work around these laws and castrating the law, in a good faith effort that the rich won't abuse the tax code is a little naive. If they don't want to pay 30%, why would they suddenly want to pay 10%? I think it'd be smarter just to close the loopholes and not think that guys like Jimmy Haslam or members of the Walton family think is fair.
While 2 million could easily be the result of frugal spending and great investments of a middle class family, the person who is inheriting that wealth is no longer part of the middle class. Why should they reel in the benefits of a class they re no longer part of? No one is penalizing the family, they're simply taxing gifted money.
I think the estate tax should be at least 55% while cutting the exempt amount at least in half. And it's not just me. Here is Bill and Melinda Gates talking about it last night. Side note, I said earlier about how Bill and Melinda love to brag about how they're "giving away money as fast as they can", but still make more money per year than everyone else in America not named Jeff Bezos. Well, they once again brag about how they "can't give money away fast enough." in the clip.
/jk "Sorry your parents died. Oh, and here's your tax bill."
Could be worst. Millions of parents die every year leaving their kids either nothing, or a butt load of bills. How sad could getting free money be? Bittersweet, probably. Sad? Well, send the money to me and cleanse yourself.
can you explain the part of about the estate tax better?
so when people inherit, say the 2 million, you're saying it should be taxed by 55%?
so the 2 million somebody gets from their family member should have a total tax payment of 1,100,000?
i hope thats not what you're saying, because if it is, i get why rich people store cash overseas. i'd do the same thing if you had your way.
“To announce that there must be no criticism of the President, or that we are to stand by the President, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.”
can you explain the part of about the estate tax better?
so when people inherit, say the 2 million, you're saying it should be taxed by 55%?
so the 2 million somebody gets from their family member should have a total tax payment of 1,100,000?
i hope thats now what you're saying, because if it is, i get why rich people store cash overseas. i'd do the same thing if you had your way.
No, I said earlier that it should be a sliding scale, with the top end being 50%. At 2 million though, me spitballing at 9:44 AM on one cup of coffee, I believe that ~30% would be adequate. The money taxed would be the money that exceeds the tax exempt amount. So under my haphazard plan, someone who inherits $2 mil, on a sliding scale starting at 500k, would pay 30% on 1.5 million dollars (money after the exemption rate), totaling 450k. So the effective tax rate would be 25%.
Also, storing your money overseas wouldn't be smart. The EU has a history of triple taxing estates over there. It makes more sense just to keep your assets where they are and in an annuity trust where heirs would only have to pay taxes if the economy isn't doing well. If it's doing well, then all the money is tax free. The person who discovered the loophole believed that over 100 billion dollars in tax revenue has been lost in one decade due to that loophole. I believe the decade was 2000-2010. That's a lot of money that could help out a lot of Americans.
ahh ok. then yea carry on and school these people, please.
“To announce that there must be no criticism of the President, or that we are to stand by the President, right or wrong, is not only unpatriotic and servile, but is morally treasonable to the American public.”
No ... there is a threshold where nothing is taxed below that number. So at present the Federal Threshold is $5.6 million for an individual. State thresholds can be $100K. You only pay tax on inheritance above those values.
Also the tax rate at the federal threshold isn't immediately 40% - it looks like it's about 24% at the low end. At State level it's also only about 4-5% at the low end.
So as an example - to make this super simple - say someone inherits $6 million.... Assuming the numbers above are correct - you pay 24% on $400K for Fed Taxes. Not very onerous but obviously that is only just over the threshold. At $15.6 million someone is going to be stuck paying a healthy % on $10 million. . . . Now if the $15 million comes from 401K or other non-taxed savings, then maybe it makes perfect sense. But if it's other investments and property etc, the wealth has already been taxed at least once already.
My standard deduction was 4k more than it was last year. Well, my deductions total were.....so I did "save" around that, but I also made more so it was a wash.
If I had made the same amount last year I would have saved around 4k because my deduction went up that much (i'm approximating, I am not looking at it right now). However I made more taxable income so I only saved a little because I made more. I still owed, which is not uncommon for me. I really need to get better at tax planning.
I'm still waiting for my etrade tax documents, but I'm looking at about $500 due this year ($7k refund last year), and $500 due at state level ($2k refund last year). And this includes earning less money than last year and adjusting my W4s to take more out.
Single, without kids, upper middle class in a high cost state apparently what the government doesn't want.
Everything is completed and I'll owe $48 this year, so a little more than $7k worse than last year while making less money. As I mentioned in the first post, being single without kids in a high cost state got me.
It is still early, but the AP had an article with the following snippet. It makes me wonder what the final numbers will be. I thought that the numbers were supposed to get better...
"The IRS reported Thursday that the average tax refund as of the second week of filing season was $1,949, down 8.7 percent from the year earlier. The total number of refunds is down 16 percent.
I'm still waiting for my etrade tax documents, but I'm looking at about $500 due this year ($7k refund last year), and $500 due at state level ($2k refund last year). And this includes earning less money than last year and adjusting my W4s to take more out.
Single, without kids, upper middle class in a high cost state apparently what the government doesn't want.
Everything is completed and I'll owe $48 this year, so a little more than $7k worse than last year while making less money. As I mentioned in the first post, being single without kids in a high cost state got me.
It is still early, but the AP had an article with the following snippet. It makes me wonder what the final numbers will be. I thought that the numbers were supposed to get better...
"The IRS reported Thursday that the average tax refund as of the second week of filing season was $1,949, down 8.7 percent from the year earlier. The total number of refunds is down 16 percent.
Well at least you can be proud that your contribution to the greater good made some rich people a little richer! Be Happy! Vote Trump 2020!
Your feelings and opinions do not add up to facts.
I thought I was going to really do good this year because daughter started college and we get the education credit along with the child credit for my other child.
But i went and looked at what was taken out of my pay during the year and they took out about 75 less per week. My appointment with my CPA is in a couple hours but we had a couple things we were going to do with the extra money that we are not going to do now.
I will see when we are done what we get back and then see if i want to change my W-4 or not.
I put in 47-50 hrs a week, and since I am the only IT person in the company, I am on call even when I take vacation.
We have an on-call rotation in our department at work and each person is an expert on a particular app. Only IT person in the company? Sounds like hell, It think I'd have a nervous breakdown! Hopefully things work well for you most of the time.
You are actually missing the point. People are adding up the entire taxes they paid and are figuring out that after all of limits and deductions done away with that were instituted in the new tax package, they aren't coming out ahead. And when they are, it's far less than what they were told.
Here are five breaks you’ll miss the most in the tax bill
No, half that. And my refund looks to be reduced by about the same, if not more
I guess I'm not understanding.
You said 'they took out about $75 less per week".
I took that to mean your check was about $75 more per week. What am I missing?
Sorry Arch, my bad...they are taking out about 73 dollars less per bi-weekly pay.
We did a little bit better this year...only because we now get the 500 dollar tax credit for my daughter and her 2500 dollar tax credit for college expenses-which the college credit was not new- Other than that, our total tax liability went down very little
Hopefully things work well for you most of the time.
