Is Tax Avoidance Morally Reprehensible?

Arakhor said:

Render unto Caesar what is Caesar's, Patroklos. Taxation is a legal and economic necessity.

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What does that have to do with Pat's comment that there is no reason to pay more than you actually owe?

Arakhor said:

Render unto Caesar what is Caesar's, Patroklos. Taxation is a legal and economic necessity.

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Thats exactly my position, why do you want people tp payu more than what Caesar claimed is his?

I never said that they should. My views are perfectly clear, but you seemed to be suggesting that there were a load of bleeding martyrs posting here because people weren't actively exploiting various tax codes to pay less taxes.

cav scout said:

I have no doubt that Taniciusfox wants to pay his taxes in good faith. It's a shame that the system is so overly complex that someone who wants to do the morally right thing (pay what is owed, no less and no more) has a hard time determining the proper course of action.

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Not to mention so overly complex multiple sources all say different things. We may have to call our brokers up to see about tax policy. MAYBE they'll know.

amadeus said:

A 17 year old should care more than a 67 year old because the 17 year old has to pay into the rot-gut system for 50+ years now.

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Precisely. I'd opt out of Social Security if I could, at least the retirement side.

I'm saddened by the fact that despite me being unemployed(bar a few hours of labor with my Dad here and there), I have more saved up than my friends who actually work. They claim "no expenses." I claim "no desire to save."

Cutlass said:

The immorality is not in using the existing loopholes, but rather in lobbying for more loopholes to favor you at the expense of others.

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I concur.

JerichoHill said:

Tfox, you have not updated us on your stock picking glory yet

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Rants thread.

Not what you think!

I've made 11% - net, after taxes and fees - in a week, my padre's lost a few dollars since the stocks continued to go down. Overall, good so far.

Irony is I made my gain with 1/16 the cash he has; everyone was right when they said you didn't need a lot of cash to make money.

I plan to bail out though as soon as I hit the 20% mark - which I should soon - so as to stop while I'm ahead.

It's been quite a learning experience; I've learned how the Bid/Ask spread can destroy you.

Whether its intended for you, in your name, or not, I believe that it actually isn't your cash, unless I missed something as I think you've said you can
t work yet.

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It was gifted to me, therefore it is my property now. Just as when one's parents or other ancestors pass away, their money becomes yours, at least what's provided for in the will.

Without a doubt, any money earned on that money is my property since it was garned by my decisions; without my decisions, no money.

When you get money from your parents, it is not your money that is given to you. It is theirs. If they have to be legally responisble for it, then its theirs.

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Not so. A custodial account says that all funds inside are in fact the underage person's, but they are not considered mature enough to manage it, in a nutshell. (Yet strangely I'm mature enough to drive, go to war or have sex, but that's another topic)

There is no debate to be had on the original topic, however. Saving money through legal means is by no means reproachable. It is not to the benefit of the individual to frit money away when they could do the same thing but cheaper.

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It's good you at least support me here.

I just was curious if I would have to switch accounts at all to save taxes since one source says anything sold before I'm 18 is taxed at the parent's rate, but another says that the first 850 dollars of combined capital gains, interest and dividends is tax-exempt. Meaning a 0% rate which obviously makes me happy.

If it was legal though and that 0% rate was false, then I'd definitely switch from a custodial to normal account to tax my gains at 10% rather than 25.

cav scout said:

Yes his father originally earned this money and paid income tax on it. He then gifted it to his son who invested it and earned capital gains based on the work of his investment decisions.

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Precisely! With the gift, it became my property. I never said I earned the principal, merely the money gleaned from depositing it.

Now since Taniciusfox is still a minor and can't own property this gift and any capital gains derived from it are held in trust for his benefit by his parents. So on the surface this would seem to indicate that the capital gains should be taxed at the rate appropriate for the father. But the complicated tax code might actually say otherwise (how do rich child stars have their investment earnings taxed for instance?) ...thus Taniciusfox's dilema.

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The alternative argument is that it's technically the child's money and for their benefit, it should be taxed at their rate.

This is indeed often the case; historically the wealthy transferred assets to children so as to cut the tax burden. Modern laws have made this far less profitable though.

Karalysia said:

I would recommend speaking to a lawyer.

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It benefits your profession.

Patroklos said:

It seems like many of you view taxes as if all your income belongs to the government, and you are filing in order to be allowed to have some of it bestowed upon you.

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Indeed, for some reason deductions are viewed as the Devil, probably because of the misconception only the wealthy can take them. I can take them, it's easy; here's one - if I have a capital loss, I can write that off against my capital gains.

I haven't paid taxes yet, but there's also personal exemptions, dependents... there's tons of them. I've been told you can write off almost anything as a deduction if you try hard enough. That you need legions of lawyers and accountants, I feel, is a myth.

Arakhor said:

Render unto Caesar what is Caesar's, Patroklos. Taxation is a legal and economic necessity.

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Sure, I think we all agree on that as much as we disagree on the exact rate. But what's wrong with legally reducing your taxes?

There's nothing wrong with reducing one's tax burden, but when you start handing over ownership to children or switching Parliamentary privileges on cleaning of one's moat, then you're on slightly shakier ground.

Patroklos said:

Thats exactly my position, why do you want people tp payu more than what Caesar claimed is his?

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One could argue that Matthew 5 would support that

40And(BT) if anyone would sue you and take your tunic,[g] let him have your cloak as well. 41And if anyone(BU) forces you to go one mile, go with him two miles. 42(BV) Give to the one who begs from you, and(BW) do not refuse the one who would borrow from you.

If it was gifted to you, but its not legally in your custodianship, it is taxed at their rate.

Also, I would advice not getting cocky b/c of one week's results. Good investors never get cocky

"Tax avoidance" is very confusing term. I'd recommend "tax optimization". And I can´t see how someone can claim with a straight face that it is morally reprehensible.

Next thing they are saying that it is morally reprehensible to drive a "green" car while being sober - that's just stealing gas and liquor excise from the government!

JerichoHill said:

If it was gifted to you, but its not legally in your custodianship, it is taxed at their rate.

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But if the gains are my property, albeit not technically managed by me, shouldn't they be taxed at my rate, that is, 10%?

Collegeboard says gains acquired before I'm 18 are taxed at the parent's rate.
An investor's site says that gains cashed in are tax-exempt alongside all other investment income provided altogether they total less than 850 dollars.

Hence why I'm confused exactly which rate I'll have to worry about. I have no issue with paying taxes, but where do I begin if I don't know which rate is appropriate? It's like the Roman citizenry not knowing their own laws!

Also, I would advice not getting cocky b/c of one week's results. Good investors never get cocky

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I'm not getting cocky, merely stating that it did me good.

I'll bail out as soon as the 20% mark is reached. Which will occur as soon as the next trade does; I'll be content. I only wanted 300 dollars since that's the minimum increment I'll invest.

Yeekim said:

"Tax avoidance" is very confusing term. I'd recommend "tax optimization".

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Indeed, avoidance does seem like it was coined by those who demonise you simply for cutting your tax burden.

Next thing they are saying that it is morally reprehensible to drive a "green" car while being sober - that's just stealing gas and liquor excise from the government!

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Indeed. Why should excise taxes be viewed any differently from income taxes? Where are those condemning tax dodgers here? Sure, income and consumption are different... but if funding the government is important, avoiding consumption taxes should also be condemned.

Are you investing or are you gambling?

You're not 18, Tanicius. You don't own anything legally.

amadeus said:

Are you investing or are you gambling?

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83% of my portfolio is in long-term investments; the day-trading is a side stream of revenue. I plan on bailing out soon; I made my profits and am satisfied.

Arakhor said:

You're not 18, Tanicius. You don't own anything legally.

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http://www.fairmark.com/custacct/problems.htm

Fairmark said:

Once you've transferred assets into a custodial account, you're not permitted to take them back. Those assets belong to the child. You probably can't take the assets back even with your child's consent, because your child isn't old enough to give valid consent on such matters.

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Yes I do. It is merely held in trust for me, more or less. Once I turn 18, I will control it all formally as well as informally. My Dad doesn't exercise any power over it besides legal issues; in reality, I do pretty much everything. In some strange series of devolved powers, the government gave him the right to manage my assets and then he gave me the right to call all the shots while he does the formal work.

Fair enough. I'll bow before your superior knowledge of tax law

Your pretty dumb if you take your maximum amount of legal deductions. The government takes enough money from you as it is.

Arakhor said:

You're not 18, Tanicius. You don't own anything legally.

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Because you own things when you're older than 18? Don't pay property taxes, lose your land. Don't pay income taxes, lose your income. Don't pay sales taxes, lose your items. Basically you rent everything from the government.

If you don't pay sales tax, which I presume is at point of sale, you don't have any items!

@Taniciusfox
]But if the gains are my property, albeit not technically managed by me, shouldn't they be taxed at my rate, that is, 10%?
--There is no "technically" exception under the law. They are under your father's tax rates. And yes there is a minimum income requirement that may play in.

I'll bail out as soon as the 20% mark is reached. Which will occur as soon as the next trade does; I'll be content. I only wanted 300 dollars since that's the minimum increment I'll invest.
--This is too small a sample size for you to be developing really successful strategies. Luck, mainly. Just saying.