2015 State of the Union Address

[gay_Aleks]

Who's supporting the option "tax everyone heavily regardless of their class then run off to Brazil to live as a rich rubber plantation owner"?

 

[onejayhawk]

I will refrain from pointing out the connotations of rubbers.

J

 

[onejayhawk]

Who's supporting the option "tax everyone heavily regardless of their class then run off to Brazil to live as a rich rubber plantation owner"?

Have you any idea the impact of a simple change in US tax law--"Tax refunds shall not exceed tax payments received."?

J

 

[gay_Aleks]

To be fair, aren't there any tax refunds that remove enough burden that the amount paid is simply symbolical? Like, 10 dollars or something?

 

[JollyRoger]

More tax the middle class. How Democratic of you.

J

I am talking about eliminating the disfavored treatment that capital gains and dividends receive when they are distributed from traditional IRAs and 401(k)s. This would be a tax cut. Do this first and then we can talk about some more relief for those poor suffering beneficiaries of $5 million+ estates.

 

[onejayhawk]

I am talking about eliminating the disfavored treatment that capital gains and dividends receive when they are distributed from traditional IRAs and 401(k)s. This would be a tax cut. Do this first and then we can talk about some more relief for those poor suffering beneficiaries of $5 million+ estates.

Ah. That is different. Still, 401(k)/IRA distributions taxed as income are typically at a lower marginal rate.

I don't care about relieving any suffering from estate taxes. They are not worth the effort. Revenue is small and enforcement is difficult and costly. Transfer with an unmodified basis and move on.

J

 

[JollyRoger]

Transfer at death with an unmodified basis and move on.

J

Without an exemption? Because that would be a huge death tax increase on those inheriting from an estate smaller than 5 million.

 

[onejayhawk]

Without an exemption? Because that would be a huge death tax increase on those inheriting from an estate smaller than 5 million.

That is a valid point. None the less, why give the recipient a market value basis instead of continuing the decedent's basis? To the extent that assets offset debts, an exception is reasonable.

J

 

[Farm Boy]

It's already ridiculous that estate taxes/trust taxes/inheritance taxes/death taxes don't start scaling from zero. I don't think the princes and princesses of capital care a whit about the democracy of the thing.

 

[JollyRoger]

That is a valid point. None the less, why give the recipient a market value basis instead of continuing the decedent's basis? To the extent that assets offset debts, an exception is reasonable.

J

You already get stepped up basis. When the GOP claims to want to take away the estate taxes, they generally roll out a plan that also gets rid of stepped up basis. They are really just changing the way estates get taxed, not eliminating the tax.

 

[onejayhawk]

You already get stepped up basis. When the GOP claims to want to take away the estate taxes, they generally roll out a plan that also gets rid of stepped up basis. They are really just changing the way estates get taxed, not eliminating the tax.

I was not aware of those proposals. If I understand you correctly, it removes one tax instead of another. That make good sense, since ad valorem taxes are comparatively simple.

J

 

[JollyRoger]

I was not aware of those proposals. If I understand you correctly, it removes one tax instead of another. That make good sense, since ad valorem taxes are comparatively simple.

J

It replaces one tax with another, neither of which is an ad valorem tax.

 

[onejayhawk]

It replaces one tax with another, neither of which is an ad valorem tax.

How are capital gains taxes not ad valorem, ie according to value?

J

 

[JollyRoger]

Ad valorem taxes is a term of art, generally meaning a periodic tax on the full value of an asset to its current owner. Capital gains taxes are a one off on just the gain in value taxed after the asset has been disposed of.