Stephen King on Taxes

Stephen King has been on a roll lately. His most recent novel 11/22/63 was a welcome return to form and his best work in years. And now he has this excellent essay, in The Daily Beast, on the subject of taxes:

Chris Christie may be fat, but he ain’t Santa Claus. In fact, he seems unable to decide if he is New Jersey’s governor or its caporegime, and it may be a comment on the coarsening of American discourse that his brash rudeness is often taken for charm. In February, while discussing New Jersey’s newly amended income-tax law, which allows the rich to pay less (proportionally) than the middle class, Christie was asked about Warren Buffett’s observation that he paid less federal income taxes than his personal secretary, and that wasn’t fair. “He should just write a check and shut up,” Christie responded, with his typical verve. “I’m tired of hearing about it. If he wants to give the government more money, he’s got the ability to write a check–go ahead and write it.”

Republicans used to argue that we need a flat income tax, because it was just terribly unfair that wealthy folks had to pay a higher tax rate than normal people. Their rallying cry was, “You shouldn’t be punished for being successful!”

But that’s not the rallying cry any more. Now their argument is that wealthy people should pay less than the rest of us. Tax loopholes that allow a billionaire like Mitt Romney to pay a mere thirteen percent tax rate is just fine. As they see it, that’s how it should be.

King continues:

Heard it all before. At a rally in Florida (to support collective bargaining and to express the socialist view that firing teachers with experience was sort of a bad idea), I pointed out that I was paying taxes of roughly 28 percent on my income. My question was, “How come I’m not paying 50?” The governor of New Jersey did not respond to this radical idea, possibly being too busy at the all-you-can-eat cheese buffet at Applebee’s in Jersey City, but plenty of other people of the Christie persuasion did.

Cut a check and shut up, they said.

If you want to pay more, pay more, they said.

Tired of hearing about it, they said.

Tough shit for you guys, because I’m not tired of talking about it. I’ve known rich people, and why not, since I’m one of them? The majority would rather douse their dicks with lighter fluid, strike a match, and dance around singing “Disco Inferno” than pay one more cent in taxes to Uncle Sugar. It’s true that some rich folks put at least some of their tax savings into charitable contributions. My wife and I give away roughly $4 million a year to libraries, local fire departments that need updated lifesaving equipment (Jaws of Life tools are always a popular request), schools, and a scattering of organizations that underwrite the arts. Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesn’t go far enough.

You should read the whole essay. It’s terrific.

The trouble is that the reason the right-wingers are so successful at implementing their monstrously unfair tax policies is that hordes of middle-class folks keep voting for it. Their aren’t enough billionaires and religious fanatics to put them in office. They need hordes of oblivious, ignorant people to vote against their economic interests. That they have little trouble finding such people tells you something about contemporary America.

Comments

  1. #1 AbnormalWrench
    May 6, 2012

    Now their argument is that wealthy people should pay less than the rest of us. Tax loopholes that allow a billionaire like Mitt Romney to pay a mere thirteen percent tax rate is just fine. As they see it, that’s how it should be.

    Actually, I’ve seen more than a few Repugs suggest the capital gains tax should be 0%. John Hunstman comes to mind, although I know there are many others. And people pretend Hunstman was a moderate.

  2. #2 Kel
    May 6, 2012

    They need hordes of oblivious, ignorant people to vote against their economic interests.

    But it won’t be against their economic interests when they’re rich too… ;)

  3. #3 Verbose Stoic
    May 7, 2012

    Well, the problem here is that it seems there’s a misunderstanding of what’s going on. The things that are causing the lower rate aren’t actually, generally, tax loopholes, although there certainly are those as well. Instead, these are things that were explicitly put into the tax rules that these people can take more advantage of than some others.

    I know that the tax rate — or, at least, the amount of income that’s taxable — is different for investment income than for “regular” income. What I had heard long ago was that in Canada it was 25% non-taxed to 75%, while in the U.S. that number was reversed. But don’t quote me on that, since that was basically coffee station talk that I might have forgotten. Anyway, people like Warren Buffet make most of their money from investment while his secretary makes little from investment. But this isn’t a loophole, as a) the government does have an interest in people earning their money from investment because it means that they are investing and b) this sort of thing is indeed in the middle class’ economic interest since this is a way for them to, at least, make some money (not become rich). Try talking to a financial advisor to plan your retirement and say that you want no investment of that sort, and they’ll look at you like you’re insane, because interest rates — even in GICs — won’t provide a rate of return, in general, that beats inflation.

    The second thing and the one mentioned here is charitable donations. King says he gives 4 million a year to various charities. But, of course, charitable donations are tax deductible. Assuming that this is a significant portion of his income and assuming that he claims those deductions, it should be obvious to him why he doesn’t pay 50% of his income in taxes. But we can see that the government clearly has an interest in encouraging all people — even the rich — to donate heavily to charities, and so why these donations should be tax deductible.

    So, no, these aren’t loopholes. Some of the “rich people” are in theory taking advantage of this, but even with this people like King and Buffet still pay massively more in taxes than Buffet’s secretary when you look at the actual amount paid. Even myself, I know that I pay more in income tax than a significant number of people make as an annual income, and I’m in no way rich. There is no reason to think that this sort of calculation of percentages is, in fact, revealing any real unfairness, or even that something must be done to ensure that the rich pay their fair share. Calculating it by actual dollars, they pay more than their fair share, and when we look at the loopholes it isn’t anywhere near as clear that they are actually loopholes.

    So, yeah, King should just shut up about it and if he really thinks he needs to pay more he can. He can stop claiming his charitable donations and, perhaps, any one of a number of other deductions that he uses to lower his tax burden. Alternatively, he can indeed simply take the option provided in the tax code and cut the government a check, and encourage others to do the same. Somehow, this is not sufficient; somehow, he wants government enforcement of this. But it is hard to see how that can be done either without simply trying to make it so that the rich have to follow different rules than everyone else or actually hurting the middle class.

  4. #4 Steve Ruble
    May 7, 2012

    Verbose,

    You seem to think that King (and every other wealthy person who believes ey should be taxed more) should be a sucker and pay more than the law requires. You also seem to think it’s strange that King would prefer that the government increase the tax rate for all wealthy persons. Your position seems exactly backwards to me: I think it’s bizarre to suggest that it’s reasonable for someone to play the sucker, and I think it’s perfectly reasonable for someone to argue that the tax code should be changed to something ey thinks is more fair. What problems do you have with my position?

  5. #5 Greg Esres
    May 7, 2012

    hordes of oblivious, ignorant people to vote against their economic interests.

    People like Buffett are voting against their economic interests, too, but I suspect you’d praise this behavior. Should all of us vote just for policies that benefit only ourselves? I doubt you think so.

    The real measure of the ignorance and obliviousness of the hordes is whether they know they’re voting against their own economic interests. If they do, then they’re neither ignorant nor oblivious, but my guess is that the majority does not.

  6. #6 Bayesian Bouffant, FCD
    May 7, 2012

    Dense Stoic: … it should be obvious to him why he doesn’t pay 50% of his income in taxes.

    It is. It’s because the current top tax bracket is 35%. Even if he made no charitable contributions whatsoever, and took advantage of no other exemptions or credits, his federal rate would not exceed 35%.

    What I had heard long ago was that in Canada it was 25% non-taxed to 75%, while in the U.S. that number was reversed. But don’t quote me on that

    Here’s a good rule of thumb: if you don’t want to be quoted saying something that is incorrect, then don’t say it. Your numbers are wrong.

  7. #7 Verbose Stoic
    May 7, 2012

    Steve Ruble,

    Actually, I’m taking this pretty much in the context of the “my secretary pays a higher percentage than I do” sorts of comments, and pointing out that there are indeed reasons for that. If King doesn’t like those reasons, he can of course argue to change them, as well as the rates, but in doing so he does have to consider why those things are taxed as they are. Again, if he personally thinks he should pay more, then he is indeed free to do so, without trying to make it compulsory for everyone.

    I guess the question is if King has a clear, objective argument or if he’s making an argument based on a vague comparison or feeling that it isn’t fair. I tend to see the arguments as being more the latter, but perhaps the essay gives more of the former.

  8. #8 Raging Bee
    May 7, 2012

    This whole “you can pay more if you want to” point is pure childish escapism. The whole point of taxes is so that everyone is required to pay for the promotion of the general welfare, so that no one gets a free ride, or is suspected of getting a free ride, at the expense of the rest of us.

    IF you make taxes voluntary, then a) you give everyone an incentive to withhold their contribution and wait for someone else to pay for basic government services; and b) you sow mistrust and resentment among the taxpayers, which then undermines any effort to improve the public good. Both of which, I’m sure, are exactly what Republitarian tax-cutters intended all along. Instead of making reasonable sacrifices for the common good, we’re reverting to terrible-twos, erasing centuries of experience of governance from our minds, and screaming “NO!!!” at every idea we hear and thinking it’s a bold strike for liberty.

  9. #9 Eric Lund
    May 7, 2012

    There is nothing inevitable about a tax policy where rich people pay lower rates than poor people. There are many contrary examples, even in the US. For instance, New Hampshire state income tax applies only to interest and dividend income, not to wages or capital gains. Furthermore, the first $2400 ($4800 for couples filing a joint return) is exempt from this tax. So rich people are more likely to pay NH income tax than poor people.

    But the point is that a tax system which depends on voluntary contributions is unstable. People will inevitably try to minimize the amount they pay on a given income, and invariably rich people will, on average, be better able to find ways of legally avoiding taxes. If we as a society want them to pay rates closer to what less wealthy people pay, we have to legislate those rates.

  10. #10 Stu
    May 7, 2012

    he does have to consider why those things are taxed as they are.

    Because the rich can donate more money to politicians and thus make the rules?

    What do I win?

  11. #11 eric
    May 7, 2012

    I guess the question is if King has a clear, objective argument or if he’s making an argument based on a vague comparison or feeling that it isn’t fair.

    Does King need to articulate any argument other than the standard one? The concept of the progressive tax is based on the fact that income is generally more disposable the more you have of it. It is much easier to live comfortably without your 300th $10k of the year than it is without your 2nd $10k of the year.

  12. #12 Constance Reader
    May 7, 2012

    I love it when people say “so why don’t you write the check?” Because the IRS sends the fucking thing back to you, geniuses. You know, that whole tax refund thing that you look forward to every spring? The amount you overpaid your taxes by?

    Now, add A + B and you get…

    Oh, never mind.

  13. #13 KeithB
    May 7, 2012

    Constance Reader:
    You don’t just increase your tax obligation, you write the check to a different place:

    http://www.treasurydirect.gov/govt/reports/pd/gift/gift.htm

  14. #14 Rob
    May 7, 2012

    Tax loopholes that allow a billionaire like Ted Turner or George Soros to pay a mere thirteen percent tax rate is just fine. As some see it, that’s how it should be.

    I like the idea of abolishing income tax altogether and forming a flat sales tax. That way everyone who breathes oxygen and eats will pay taxes and contribute omething to society. As it stands only about 45% of America pays taxes at all.

    Is it not fair to you that we have 13 million illegal aliens sponging off of everyone else? They are not disabled. They are not lazy. Most have jobs, but they DO NOT pay medicare paxes, social security taxes, FICA, state income taxes, etc.

    If most of the population contributed to society instead of taking away from it we would be better off. I personally know several people who have not paid one single penny in federal icome taxes in years, yet they prosper better than I do, have a better home than I do, have a better car than I do, and eat better than I do.

    How could they not? If I sat a round and recieved free stuff all the time I would be prosperous as we. They work too. I have a friend right now that makes more money than I do, yet gets food stamps and has not paid a penny in federal taxes in at least five years. Now, if you do not contribute how is it that you can receive?

    I say that if one is to get food stamps or not pay federal taxes there has to be a trade of equal value in order to receive such services. Example. if on is to recieve food stamps for 90 days. Then they must put in at least 200 hours of community service to recieve said aid. No work, no food. Simple. Even the Bible says that a man who does not work does not deserve to eat.

    So, next tiem you go to some beggars paradise like Portland, if the crazy man on the sidewalk looking all pitiful wants a handout, accept his plea with great happiness. In exchange for your $20.00 he must wash your car and do a good job. Seems fair to me. No work, not handout. Earn what you get.

    As for “teh rich” peoples that i hear so much about, I personally think that every single person on this planet who makes more than $250,000 a year should pull out their money from all banks and walk out of their businesses and go ito exile until these juicy liberal protestors learn that it is “teh rich” that keeps them employed, keeps airplanes in the skies, trains on the tracks, trucks on the road, and food on their table. I bet within 10 days democrats will be begging those “rich” people to come back.

  15. #15 Count Creedance
    May 7, 2012

    Any liberal who is rich (if there is such a thing)and who feels that wealth redistribution is the way to go and the IRS refuses your check. Please be happy since I will fully accept any donation of your wealth you wish not to partake of. If you like wealth redistribtion that much, just redistribute it to me. I willl accept cash and gold bar donations all day long. If you are going to redistribute your wealth you might as well count this ole white redneck po boy in with the rest of the bums the money will go to anyway.

    Liberals I think are just grown up bullies still trying to take away the school nerds’ milk money. “Give me your money punk. It belongs to me!” Not much difference in school bullies stealing someone else’s money and democrats trying to steal someone else’s money. Bullying is bullying.

    So, Warren Buffet, let me take $999 million off your hands? I bet I can find a better use for it than government can with 99% less waste. I’ll take half in cash – small bills, and the other half in silver and gold. Let the redistribution begin. That goes for any other person who feels that he is not paying his fair share to give to others. Like I said, send it to me. I’ll find good use for it. I wonder how Ken Ham would like a $100 million anonymous gift? If I had $400 billion, I would give liberals hell. There would be creation museums on every street corner in America not to mention fighting liberals in the war on christmas and gay so called marriage. There is alot I could do my MY FAIR SHARE of someone ELSE’s wealth.

  16. #16 eric
    May 7, 2012

    Rob:

    Is it not fair to you that we have 13 million illegal aliens sponging off of everyone else? They are not disabled. They are not lazy. Most have jobs, but they DO NOT pay medicare paxes, social security taxes, FICA, state income taxes, etc.

    I am curious; exactly how much do you think 13 million people earning under (or around) minimum wage, and likely making under $20k/year would contribute?

    Let’s take the best case scenario (in terms of revenue) and assume they are single, have no dependents, and own no property; ballpark it for me.

  17. #17 Rob
    May 7, 2012

    4.68 billion dollars per year based on income of $12,000 at the a 30 percent tax rate. This includes social security taxes, medicare taxes, federal income taxes, and state income taxes. This is NOT including local sales tax, property tax, car tax (registration) and numerous other expesnsives that most pople have to pay.

    4.68 billion per year for the last 10 years min adds up to quite a bit. I say make them pay up or start jail sentences for tax evasion. The IRS should be involved. Perhaps we should raid cocaine farms and put the collected money as down payments on the national debt.

    Ok Eric. I’ll make a deal with you. You can allow people to break two federal laws -1. Entering the country illegally, 2. tax evasion. Then you can let thos esame people who do not pay taxes use tax money that OTHER PEOPLE contributed for school, medical, higways, etc. See they use the system but they do not contribute to it.

    Here is the deal. We will let this law breaking slide by. In return I wish to cross THEIR border illegally. Once inside. I use up as many of their resources as possible and never expect to pay taxes locally or federally. next i will move 13 million more people in behind me doing the same thing. How long do you think it would take for the Mexican government to crack down on this crime if the situation were reversed?

    Here is the other question. Mexico thinks it is cute for its citizens to come here illegally and sponeg off of us. They call us “racist” if we gripe about it. However, if one little man from Guatemala enter Mexico illeaglly they throw a temper tantrum and jail and possibly torture the guy. HYPOCTITES of the highest order. They should by all means allow illegal aliens into mexico. Seems fair to me.

    As a matter of fact all Americans should just pack up and leave and enter everyone else’s country illegally and demand free stuff and if they refuse we call them a racist. is that better? What is we had 13 million americans cross into canada illegally and all start demanding free stuff and blame racism if we don’t get it? You think Canada would put up with that crap? They may be marxist socialists, but I doubt if they want an extra 13 million freeloaders on their doorsteps yelling for free stuff.

  18. #18 Rob
    May 7, 2012

    Eric you may not realize it but a single man making less than $25,000 per year will pay over 65% of his earned income in taxes somewhere.

    Now do you know why poor people stay poor? They are taxed to death. Go figure up every single tax or fee that you have paid in the last year. Everything. Sales tax, income tax, social security tax, medicare tax, car tax, property tax, death tax, inheritance tax, etc.

    Speaking of the inheritance tax, it should be illegal. The items that one recieves as an inheritance HAS ALREADY BEEN TAXED at the time of their original puchase. The government is charging two sets of taxes on one item. That’s why if the doctor gives you six months to live … screw a living will, just start giving your stuff away to the people you want to have it. At the tiem of your death, your famiy and friends will have their inheritance, the government will not know what you had or to whom it went and thus, defeating their wretched system. Particularly use cash for some relative adn advise them not to make large depoits but to take it to a gun show and use it to buy gold for chas without paperwork and store it in a safe for a few years until the heat has cooled down. Never deposit large cash amounts. The IRS always has questions. Always use cash and keep it ina safe at your house of some secret location that you and you alone know of. This will keep the hands of the greedy off your back.

  19. #19 tomh
    May 8, 2012

    Speaking of the inheritance tax, it should be illegal.

    No, the inheritance tax should be 100%. Why should an accident of birth ensure that some live in luxury while others live in poverty? Let everyone start even.

  20. #20 Valhar20000
    May 8, 2012

    Hey, Rob, have you ever tried “yelling for free stuff”? Give it a shot, and let me know how well it works for you.

  21. #21 eric
    May 8, 2012

    4.68 billion dollars per year based on income of $12,000 at the a 30 percent tax rate.

    In 2012 the standard deduction was $5,950. Single individuals with an annual adjusted income of less than about $10k don’t even have to file federal income taxes. $12k – $5,950 = $6,050. So the folks were are talking about wouldn’t even file federal taxes if they were suddenly made legal. Well, the smart ones would file – because they’d get money back. So if these folks did suddenly go on the tax rolls, and they bothered to file, the net federal tax revenue from them would likely be negative.

    Every state is different, but their tax rates are typically much lower (around 0-8% rather than 10-30%) and they also have standard deductions.

    Of special note is Texas. Its most of our southern land border and they have no state income tax at all. Their revenue consists primarily of consumption taxes like what you advocate, plus federal handouts. So I hope you will agree that illegals in Texas are not sponging off the state of Texas; they can’t be, according to your way of thinking, because there is no income tax to not-contribute to. They are paying in via consumption taxes, exactly the way you advocate.

    This is NOT including local sales tax, property tax, car tax (registration) and numerous other expesnsives that most pople have to pay.

    Are you arguing that illegals don’t pay those? You just advocated a national sales tax because you think it will fix the problem!

    Sure, renters will not pay property taxes (directly) and non-car-owners will not pay car registration fees, but this has little to do with legal status. And isn’t this exactly what you want? Fees on goods for folks who use them? The fact that they don’t pay car taxes because they don’t own cars shouldn’t anger you, its exactly the solution you’re proposing!

  22. #22 Eric Lund
    May 8, 2012

    Rob: Citations needed on all of the claims you have made on this thread.

    You need not be a US citizen or legal immigrant to obtain a Social Security number, but you generally have to provide it to your employer, and many employers (especially in certain industries) will make at most a cursory check of whether the SSN belongs to somebody legally in the US. These employees have taxes withheld from their paychecks, and many of them don’t file for the refunds they are due (there is no penalty for failing to file when you have overpaid your federal tax; you are simply not allowed to claim your refund). The reason the employers operate this way is because they need to be able to prove that they are actually (1) paying their employees and (2) paying their share of payroll taxes (the latter is the province of the IRS, who enforce this law somewhat more rigorously than the law against employing illegal aliens has typically been enforced).

    Your claim about the tax rates paid by the $25k worker also don’t pass the smell test. He gets a standard deduction of a bit over $5k and a personal exemption of not quite $4k, and most of not all of the rest is taxed at the lowest federal rate (currently 15%). Payroll taxes add another ~8%, then state taxes depending where he lives, which are unlikely to be much more than 10% even in high-tax states (and again, he probably gets a personal exemption and/or standard deduction where this tax rate is nonzero). He probably isn’t paying much if anything in direct property tax, since he can’t afford a house in any location where the property tax bite is substantial. So after he pays the rent (which includes his landlord’s profit in addition to taxes and other expenses), which eats up a big chunk (half or more of his income in most places), he spends most of the rest of his money on basic goods. Some of these goods are subject to sales tax (which might be anywhere from zero to maybe 11-12%), but things like groceries are generally exempt. If he drives, he will also pay gasoline taxes and auto registration fees, but somebody with an income this low and not living in a rural area is likely to not own a car as he would need that money to cover rent. So that’s at most 45%–less in most states–with much of it exempt. Yes, this guy is going to stay poor, but it’s not because of the taxes he is paying, it’s because an income of $25k is barely enough at best to cover expenses in most parts of the US.

  23. #23 JimV
    May 8, 2012

    The economic analyses which make the most sense to me (e.g., by Paul Krugman, Dean Baker, and Brad DeLong) say that the lack of government spending and resulting losses in employment are primarily responsible for the current bad economic conditions in the USA. I also see a need for improvements in infrastructure, education, and public research.

    In my will I have a provision to pay off my share of the national debt (to be calculated as total national debt divided by population, something like $40K-$50K). However, that is a drop in the ocean unless everyone else who can do so does also. So I advocate for higher tax rates on the middle class (where I sit) and much higher rates on the rich. “Shut up and send in your money” seems a total non-sequiter to me. I want a better USA to live in. My money alone won’t make it happen.

    (Technically, the experts says short-term stimulus which adds to the debt will be self-funding due to the liquidity trap, but it should be followed by increases in tax revenue once employment is back to a reasonable level.)

  24. #24 Dave
    May 8, 2012

    No the inheritance tax should ILLEGAL since the items that some one has already purchased and paid taxes on is given away as a gift. Don’t tax charity. No one will ever “start equal”. get over the whole “equal” thing. it’s never going to happen. It’s called SIN – greed. Get ued to it. Even in Heaven do you think everyone will be rewarded or punished “equally”. No they will not. They are rewarded according to their works IF they make it heaven at all.

    No works equals no reward. If everyone starts out equal, the everyone should do equal labor. Right? Your income equality is satan derived nonsense. It is communism and that is illegal in this country. If not it should be a federal crime.

  25. #25 NJ
    May 8, 2012

    Rob@18:

    Speaking of the inheritance tax, it should be illegal. The items that one recieves as an inheritance HAS ALREADY BEEN TAXED at the time of their original puchase.

    Isn’t the estate tax more like a capital gains tax? IOW, aren’t you are taxed on the amount the asset has appreciated in value, rather than on its original value (which could be considered a double taxation)?

  26. #26 Rob
    May 8, 2012

    All I am saying basically is this.

    If I work hard all my life and happen to be fortunate enough to be able to purchase a few nice things along the way, should I not be able to give them to whomever I choose at the time of my passing without an additional tax being slapped on it? When I purchased the items I paid taxes on them as well as paying property taxes all those years. That being said, the item itself was 100% MINE, not the government’s. It was MINE, not yours or anyone else’s. Since it was MING and I worked for it, then I should be able to give it to whomever I choose without penalty.Taxes were already paid on it. I guess greedy government doesn’t understand double taxation.

    It’s like this. If I purchased a candy bar for $0.79 and paid 7% sales tax rate on it and then decided to give it to my friend, why would the feds want to come in and retax that candy bar just becuase I gave it away for free?

    If I decide tomorrow to give away all my stuff to a friend or relative how exactly is that any business of the government?Everything i own has been paid for including the high taxes. Therefore I have 100% complete total sovereign ownership over it. Technically I could declare double taxation as an act of war and militarily defend that property against any act of aggression posed by enemiy forces who try to invade and conquer it. Although that would be carry things a bit far, technically we have every right to do so as sole sovereign owners of that property.

    Once something is yours it is yours until YOU, not the government, says it is time to be given away or sold. That’s why I will stick to my original idea. If you know you are dying give away your stuff yourself without paperwork. If you have no one to give it to, pile up your money and possessions and burn everything to the ground. Don’t let the government get it. That would be a waste. What are they going to do? Put you in jail? Terminally ill patients would probably poke fun at the judge and have fun laughing at the warden’s fat stomach in his last days anyway.

    I did read a true story of a man who was told he had less than three months to live. he had no family and he did not want government getting their paws on his stuff so he withdrawed all of his funds, 401K, etc. and everything he had and spent every dime of it and everything he ever wanted and then trahsed it all in the end. Sad, but true. That’s what over taxation will do to a man.

  27. #27 tomh
    May 8, 2012

    The estate tax is a real problem for most people, considering that the estate tax exemption for 2012 is $5,120,000. If your estate is over $5 million dollars your heirs might have to pay some tax. Talk about hardship!

  28. #28 Rob
    May 8, 2012

    “If your estate is over $5 million dollars your heirs might have to pay some tax.”

    That is true provided that you die and your kin inherits the 5 million. But, if you are terminally ill and you withdraw your 5 million in cash and hand it to your kin, the hardship will be on the Infernal Revenue Service because they lost it and the smart man who received it refuses to put any of it in the bank on a large scale so as not to be noticed. Alot of places still take cash without question. Excess taxation problem solved.

  29. #29 NJ
    May 8, 2012

    Rob@26:

    If I decide tomorrow to give away all my stuff to a friend or relative how exactly is that any business of the government?

    Isn’t that just considered as disposing of an asset or assets, not fundamentally different than selling it to a third party?

  30. #30 Rob
    May 8, 2012

    Giving it away is not the same as selling it.

    besides like I said, who says the government has to know what you gave to whom? If you do not file paperwork and just give the stuff away how are the Infernal Revenue Service guys going to know who got what?

    Do you honestly believe that if I was given a couch or nice antique table or some cash froma friend before he died that i would actually tell the IRS or claim it? My words would be PROVE IT. It would be doubtful that they could prove that my friend gave me anything since there was no witnesses, no formal written contracts, and no texts, emails, or any linked written agreement anywhere.

  31. #31 tomh
    May 8, 2012

    Rob wrote:
    you withdraw your 5 million in cash and hand it to your kin, the hardship will be on the Infernal Revenue Service because they lost it

    You don’t seem to quite get it. There is no tax on your $5 million dollars. The first five million is exempt from taxes. So there is no need to spend it or give it away or anything.

    I did read a true story of a man who was told he had less than three months to live. he had no family and he did not want government getting their paws on his stuff so he withdrawed all of his funds, 401K, etc. and everything he had and spent every dime of it

    This “true” story is truly laughable. First of all, if he died in 2009 or 2010 he would pay nothing, even if he had 20 billion dollars. There was no estate tax those years, zero, none at all. In 2011, he could save his first five million and just spend all the extra above that. (He must have had a hefty 401k.) Before 2009 he could have saved his first million. But he never would have to spend all his money to keep the government from getting it.

    Sounds like the kind of story one might see on a right-wing website, invented to befuddle the ignorant into thinking the big, bad government is going to grab all your worldly possessions when you die. Seems to have worked.

  32. #32 NJ
    May 8, 2012

    Rob@30:

    Giving it away is not the same as selling it.

    In terms of settling an estate? And under current law? Note that I am not disagreeing with you; I am just not expert in estate tax law.

    Do you honestly believe that if I was given a couch or nice antique table or some cash

    A vastly different thing from 100,000 shares of Microsoft, which is what the discussion is about, I think.

  33. #33 Wow
    May 9, 2012

    “Warren Buffett does the same; so does Bill Gates; so does Steven Spielberg; so do the Koch brothers; so did the late Steve Jobs. All fine as far as it goes, but it doesn’t go far enough.”

    And most of it tax deductible.

    Though in the case of Bill Gates, it comes with strings to buy Microsoft products, thereby a net benefit to his fortune.

    100% inheritance taxes. One family home can be mortgaged and have the value of the debt removed from the value of the home after the mortgage (therefore a 50% mortgage means a tax-free house, but no more).

    If you want to do something with your money (to help your kids, for example), do it while alive.

  34. #34 Wow
    May 9, 2012

    “If I work hard all my life and happen to be fortunate enough to be able to purchase a few nice things along the way, should I not be able to give them to whomever I choose at the time of my passing without an additional tax being slapped on it?”

    No.

    If your descendents cannot make it with the advantages of your wealth then they will only piss away the money and be unproductive.

    Meanwhile, some kid who is REALLY smart is in a poor school and with parents who will die only with debt to leave him. Having no money, no connections and no wealth, his ability to enrich himself and society is removed purely because of the chance dropping of a sprog through the wrong clacker.

    Is it not right to give every child, as far as possible, the same start in life?

  35. #35 Rob
    May 9, 2012

    “Meanwhile, some kid who is REALLY smart is in a poor school and with parents who will die only with debt to leave him. Having no money, no connections and no wealth, his ability to enrich himself and society is removed purely because of the chance dropping of a sprog through the wrong clacker.Is it not right to give every child, as far as possible, the same start in life?”

    This statement may be true, but you cannot force someone to give up their possesions for someone else. That is communism and even if you disagree that it is communism it is at very least GRAND THEFT. If you take something from someone by force it is usually called stealing. In most places you can go to prison for that.

    I have no problem with some kid getting money that government stole from someone else, but is that not an inheritance in a way?

    I d not understand why so many people think that other people owe them something. This “income inequality” bit is getting old and quite annoying. Can you name a time and place in history where every single human had exactly the same amound of money and the same kind of home and the same kind of car or horse or sword or anything? LIFE IS UNFAIR. Deal with it. No sense in stealing other people’s stuff so hat someone else can waste it.

    Life is never going to be fair. if you really believed in what you are saying you would giver every child a ‘fair starting point’ by not sucking the unborn’s brains out through a tube and then mangling the body. That seems like a pretty unfair starting point to me. What could be more unfair. At least the little peasant kid you speak of is alive and well.

    Poor people have and always will exist. So will the rich. I myself make less than $25,000 per year so, with that being said I demand some of your money. Gimme. Gimme. Gimme. You rich person! You owe me. How does it feel.

    I think that everytime a liberal say any word about wealth redistribution or income equailty they should automatically have $250 deducted from their paycheck. We then place the money in a box and dump it out of an aiplane over Alabam. Seems fair to me.

    Tell me WOW, that poor little kid in your story … How poor is he? Does he have a smartphone? A gold tooth? The latest toy? Does his mom or dad drive a car with shiny expensive wheel and the latest loudest boombox? Yeah, I have witnessed firsthand the “poor” that you speak of. If those same people would spend their money on important necessicites like food and housing rather than gadgets, hairdos, salons, wheels, music, and beer, they would not be so poor. Most of the time being poor is a result of lacking proper priorities. Not everytime, but alot of the time.

    Now there are genuinly some elderly poor and I do not mind helping them out with government aid or church aid or personal aid, the bums who want government aid for food becuase they spent all their oney on loud speakers and shiny wheels and gold teeth and gold chains just doeserves to be a little hungry now and again for be stupid.

  36. #36 Rob
    May 9, 2012

    For once a young doctor is telling the truth about the healthcare and welfare “crisis” in America. Here is what one doctor wrote to the White House that is 100% the truth of what is wrong in America today:

    Dear Mr. President:

    During my shift in the Emergency Room last night, I had the pleasure of evaluating a patient whose smile revealed an expensive shiny gold tooth, whose body was adorned with a wide assortment of elaborate and costly tattoos, who wore a very expensive brand of tennis shoes and who chatted on a new cellular telephone equipped with a popular R&B ring tone. While glancing over her patient chart, I happened to notice that her payer status was listed as “Medicaid”! During my examination of her, the patient informed me that she smokes more than one costly pack of cigarettes every day and somehow still has money to buy pretzels and beer.

    And, you and our Congress expect me to pay for this woman’s health care? I contend that our nation’s “health care crisis” is not the result of a shortage of quality hospitals, doctors or nurses. Rather, it is the result of a “crisis of culture”, a culture in which it is perfectly acceptable to spend money on luxuries and vices while refusing to take care of one’s self or, heaven forbid, purchase health insurance. It is a culture based on the irresponsible credo that “I can do whatever I want to because someone else will always take care of me”. Once you fix this “culture crisis” that rewards irresponsibility and dependency, you’ll be amazed at how quickly our nation’s health care difficulties will disappear.

  37. #37 tomh
    May 9, 2012

    Rob wrote:
    I myself make less than $25,000 per year

    And yet you are hysterical that the government will take all your possessions when you die. You don’t really think things through, do you. Come back when you have over $5 million dollars.

  38. #38 elspi
    May 9, 2012

    Why is it that every time Rob repeats some made-up-right-wing-just-so-horse-shit, he feels the need attach the word “true” to it.
    Rob, you keep using that word…. I don’t think it means what you think it means.

  39. #39 NJ
    May 9, 2012

    elspi@38:

    Why is it that every time Rob repeats some made-up-right-wing-just-so-horse-shit, he feels the need attach the word “true” to it.

    Tribal identity. By his own admission, he is getting the short end of the stick, but feels compelled (or duped, if you prefer) to blame those who have it even worse. He is precisely the kind of mark the plutocrats aim at with Vulpine Propaganda in order to ensure they have a permanent advantage and that a true meritocracy never emerges.

  40. #40 Rob
    May 9, 2012

    tomh

    That is not the point. Wether I have one dollar or $999 trillion at my passing the same rules should apply to both situations. Since I will no longer be using it and it is MINE to do with what i choose, do you not think it is wrong for government to retax something that has already been taxed just becuase I croak? Really? Sometimes I think govrnment agent lie awake at nights trying to think up of a new tax scheme to lay on the population.

    This peasant refuses to comply. Perhaps that should be a bumper sticker slogan.

  41. #41 eric
    May 9, 2012

    Since I will no longer be using it and it is MINE to do with what i choose, do you not think it is wrong for government to retax something that has already been taxed just becuase I croak?

    The government taxes most exchanges of goods and services. If I buy a car, the dealer gets taxed on the profit. If I then sell that car, what I get for it is part of my annual income and I have to pay tax on it. The government has just taken taxes on the car…twice! But that is not unusual. It is how taxes work; the government taxes exchanges. And your own preferred solution (sales taxes) works exactly the same way; when a good exchanges hands, you pay a tax.

    What conservatives demand with (further expansion of) inheritance and capital gains tax relief is an exemption to how regular taxation works, an exemption targeted to protect the sorts of assets wealthy people collect.

    Why should they get this exemption? Why should wealthy people’s exchanges of goods and services be treated differently than poor people’s?

    You are right about one thing, it is quite unfair that inheritances above $5 mil are taxed but inheritances below that are not. It doesn’t make sense from either a progressive tax system (the cut off is too high and too binary for it to be considered progressive), and it doesn’t make sense from a flatter tax system either (because in a flatter system, it should all be taxed). But getting rid of the tax altogether is not the right solution; that just carves out another special exemption when the fair and right solution is to treat all exchanges the same.

  42. #42 Rob
    May 9, 2012

    The government taxes most exchanges of goods and services. If I buy a car, the dealer gets taxed on the profit. If I then sell that car, what I get for it is part of my annual income and I have to pay tax on it. The government has just taken taxes on the car…twice! But that is not unusual. It is how taxes work”

    Just becuase its the way it works does not make it right or fair.

    Of course it will always be this way. I reiterate my previous statements and end my argument by restating that if possible, before you die, give away all your stuff and give away all your cash in a way that leaves no record of who got what and the problems of taxes on everyone’s part will be resolved.

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