US Elections 2012 Part I: The Primaries/Caucus

[SaintessHeart]

Originally Posted by Vexx

My dear Watson, you noticed... there is an interesting correlation

I guess the Chinese saying of "Wealth does not carry past the third generation" does make sense; it is either monetary wealth is lost, or mental and ethical wealth.

[DonQuigleone]

This is why we need higher inheritance tax.

[Anh_Minh]

Originally Posted by Ledgem

I wouldn't necessarily call it smoke and mirrors. I understand where the dislike could come from. If you're making large sums of money and still have a ton of money left over after taxes, it's still upsetting to think that you paid what amounts to 10x (or more) what someone with a lower income did.

I don't know. It's the one thing that doesn't upset me, actually. Now, I'm squarely middle class (and far from the upper end), so it's pretty hypothetical, but even if I was richer (like, rich enough to get screwed by the IRS, but not enough to circumvent them), I don't think I'd care too much that poorer people pay less in taxes. What would upset me would be the percentage. Beyond 50%, it's not even about the money itself, it's the principle of the thing. I couldn't bring myself to think I owe more than half my income to the state. Especially with all the expenses I disapprove of.

What also upsets me: the feeling of entitlement of the poor. I feel there's a difference between thinking we should combat homelessness (which I do), and thinking everyone's got a right to free lodgings in prime locations.

[GDB]

Originally Posted by Anh_Minh

... thinking everyone's got a right to free lodgings in prime locations.

Especially when there are those of us who are on the lower end of middle class (ie: fresh out of college, with a good job but not hitting the ground running at 6 figures or anything) who can't afford decent places to live in prime locations while paying for ourselves.

[Ledgem]

Originally Posted by Anh_Minh

What also upsets me: the feeling of entitlement of the poor. I feel there's a difference between thinking we should combat homelessness (which I do), and thinking everyone's got a right to free lodgings in prime locations.

I'm sure there are poor people who feel entitled, but I sometimes think that this notion is trumped up and inflated. How many poor people really feel entitled and don't care to change their situation? We'll probably never be able to get accurate data on that, but I'd be very interested to find out.

In America, at least, there has been some criticism of the poor recently (most recently set off by Herman Cain). There's this notion that poor people are in the situation that they are because they're not working hard enough. If you buy into that, then it's easy to see how people would perceive the poor as being lazy, entitled, and otherwise parasites to society. Again, while I'm sure that description fits certain people, I don't accept it regarding all or even most of the poor.

[Dhomochevsky]

Originally Posted by DonQuigleone

This is why we need higher inheritance tax.

No way, inheritance taxes are bullshit!

One of your loved ones just died and the state comes in "YAY ANOTHER DEAD CITIZEN, GIVE US MONEYZ!".
Rich people get around it anyway. Getting their offspring a very good payed position in an owned company, using other channels to transfer the money during their life time ect.
Only for normal people, the death of a family member is usually the one time they ever get to (have to) transfer values of any worth. Perfect time to rip them off I guess.

It's a total kick in the nuts, escpecially if they have to transfer objects, but have to pay part of those objects' worth in cash. Where to take that cash from? This usually leads to fire sales.

[Anh_Minh]

Originally Posted by Vallen Chaos Valiant

See, that's the strange thing. I distinctively remember that civil servants have oaths of their own, as well as similar requirements to uphold the Constitution. As for tradition... Traditions don't often get associated with virtues. Especially those that aren't written down and are hidden in shadow.

In short, I still fail to see how civil politicians are any less bound to the same safeguards as those required in the military. We hear about politicians being untrustworthy all the time, but to assume the same things don't happen to those in the military because they are of supposed unique status, is something I am not convinced about.

That. That was the question I never really got an answer for.

Because let's say there is a rebellion. Doesn't matter if it's domestic terrorists or freedom fighters. If the cops and the national guard decide the rebels are wrong and fight them, chances are the military will, too. Ithreko said the internet will keep the in contact with their friends and family outside the military, but the cops don't even need that. Unlike soldiers living on a base, their neighbours don't have to be colleagues, too. They live with the rest of us.

Originally Posted by Ledgem

I'm sure there are poor people who feel entitled, but I sometimes think that this notion is trumped up and inflated. How many poor people really feel entitled and don't care to change their situation? We'll probably never be able to get accurate data on that, but I'd be very interested to find out.

I don't know. My family's been poor, and we didn't feel like that. But there's no shortage of people shown on TV clamoring for the confiscation of private property to house everyone, or of people complaining about having to pay rent. And some of those themes are taken up by prominent political parties.

In America, at least, there has been some criticism of the poor recently (most recently set off by Herman Cain). There's this notion that poor people are in the situation that they are because they're not working hard enough.

Here it'd be political suicide.

My problem isn't really with the "laziness" of the poor. I know things aren't easy. It has more to do with a certain irresponsibility (having kids they can't afford) and unwillingness to compromise (demanding to be housed near city centers when they can't pay the rent. I can't help but think things would be easier if they accepted to be taken further away.). It doesn't really matter if that's the attitude of most poor or not - it just annoys me when I hear a politician or NGO spokesman cater to that crowd.

Originally Posted by Dhomochevsky

No way, inheritance taxes are bullshit!

One of your loved ones just died and the state comes in "YAY ANOTHER DEAD CITIZEN, GIVE US MONEYZ!".
Rich people get around it anyway. Getting their offspring a very good payed position in an owned company, using other channels to transfer the money during their life time ect.
Only for normal people, the death of a family member is usually the one time they ever get to (have to) transfer values of any worth. Perfect time to rip them off I guess.

It's a total kick in the nuts, escpecially if they have to transfer objects, but have to pay part of those objects' worth in cash. Where to take that cash from? This usually leads to fire sales.

I don't really like inheritance tax either, but it doesn't have to be all or nothing. You could set it to low or null under a certain amount, and/or exclude main residences, and tax whatever is above that.

[DonQuigleone]

Originally Posted by Dhomochevsky

No way, inheritance taxes are bullshit!

One of your loved ones just died and the state comes in "YAY ANOTHER DEAD CITIZEN, GIVE US MONEYZ!".
Rich people get around it anyway. Getting their offspring a very good payed position in an owned company, using other channels to transfer the money during their life time ect.
Only for normal people, the death of a family member is usually the one time they ever get to (have to) transfer values of any worth. Perfect time to rip them off I guess.

It's a total kick in the nuts, escpecially if they have to transfer objects, but have to pay part of those objects' worth in cash. Where to take that cash from? This usually leads to fire sales.

A few things to note about inheritance tax, in almost all countries where it exists:
1. There is a very high threshold before you pay any of it, such that almost no one ever actually pays anything. In the US this threshold is 3.5 million dollars, and only 0.24% of inheritances ever have to pay any tax. Frankly, I think that exemption is too high.
2. Family homes are almost always exempt.
3. Spouses never have to pay any inheritance tax.
4. Herilooms are almost always exempt as their value is nigh impossible to assess.
5. The main taxed assets are cash, assets (like stocks) and property. I don't see why anyone would have an emotional attachment to those.

I don't view inheritance as a tax on the person who's dead, but the person who is inheritting. If you've just gotten a huge windfall from an inheritance, why should you get it tax free? What makes it different from any other kind of income?

If your parent transferred you assets in life you would be taxed, I don't see why it shouldn't be changed in death.

Furthermore, inheritance taxes primarily prvent the continuous centralization of wealth into "aristocratic" families, which I'd describe as a good thing. I don't see anything wrong with a tax that primarily harms trust fund babies. It is the very definition of a progressive tax, it only harms the rich and wealthy.

And it really comes down to a simple fact, your parents earned their goods themselves, no one but them has any right to their assets. As their child or benefactor you do not have any more right to their assets then the beggar standing on the end of the street.

And I've moved in wealthy circles, the vast majority of people who inherit their wealth are stupid elitist assholes, just waiting for the day their grandaddy dies so they can start spending his money however they like. If you've got talent, you don't need the wealth of your parents to become succesful. Capitalism is about pulling yourself up by your own bootstraps, and building your own wealth, not about getting it free of effort courtesy of mommy and daddy.

Also, it's a very difficult tax to dodge, even if it's transferred in life, every one of those avenues is taxed, equal to or greater then inheritance tax. Gifts get taxed, a salary is taxed etc. It's impossible to transfer substantial quantities of property to another person without tax coming into play somewhere.

So long as their continued to be an exemption on the first 200,000 of family assets, varied "petty" heirlooms(not talking about picasso paintings here), and a single home less then $1,000,000 in value, I'd be happy if the state took almost all inheritances and then sold it off to the highest bidder. Get rid of dynasties once and for all.

And as for that whole "firesale" thing, point me to an actual real life case of a person who isn't some kind of aristocrat and I'll believe it. The average middle class person never gets touched, beyond perhaps losing some of the cash held by their parent, and a fair whack of the population(>50%) inherits nothing at all from their parents! Maybe a few knick-knacks but other then that... And of course, in the USA that number who never pay inheritance tax is 99.7%!

Can't really say about Germany though, but I'd hope it's significantly more severe.

[solomon]

Anh Minh where do you live?

Here in America, if you are very poor and cannot afford a car then you HAVE to be able to live in the central cities if not the city central in order to be near your likely job opportunities. Yea yea PT and all that, but we don't fund it like other countries do so in many cases it's very unreliable for employees.

"Having kids you cannot afford".....On the one hand I agree with this, it serves no purpose to have a child if you cannot care for it, I MYSELF certainly would never do it......then again I haven't actually talked to people about this. Poor people have had kids for ages, is it right for only the well off to experience the love of children?

And it is true, ASAIC in America blaming the "lazy sense of entitlement" poor is a trumped up get out of jail free card in order to avoid actually doing things to HELP the poor when actually necessary. It's also heavily coded by race though politicians will never admit to it.

Frankly I believe alot of politicians either don't give a shit for people outside their income bracket or have some silly notion that you can just get out of school go work in some factory or mid level posiiton and someday attain "middle class status" like we did before globalization. It's not the 50s anymore and statistics have shown that some of the most "welfare ridden socalist" countries have better economic mobility than we do. It's Kool Aid we drink to avoid having to do something difficult politically and socially.

[Dhomochevsky]

Originally Posted by DonQuigleone

A few things to note about inheritance tax, in almost all countries where it exists....

I can see how that may work with tax ratings like the ones you mention.
But around here they are different.
The absolute lowest rate is 7% (that is for the husband/wife when under 75k€ are involved in total) and it can go up to 50% for a person not related by blood or marriage (depends on the amount of money involved).
The house is only except if the one inherriting lives there, or starts living there immedeately, which is obviously hard to manage if you already have a life elsewhere.
Otherwise it is not and a house alone is often enough to go over the tax free threshold of 500k€ (again husband/wife) to 20k€ (unrelated).
It is a problem for many families that often comes very sudden and in addition to losing a family member. In my opinion still the worst kind of tax.

[Ledgem]

Originally Posted by solomon

Anh Minh where do you live?

He's in France.

Originally Posted by solomon

"Having kids you cannot afford".....On the one hand I agree with this, it serves no purpose to have a child if you cannot care for it, I MYSELF certainly would never do it......then again I haven't actually talked to people about this. Poor people have had kids for ages, is it right for only the well off to experience the love of children?

This is a bit of a chicken and egg scenario. Are poor people having children when they're poor and can't afford the costs of raising a child, or are they having children as teenagers that leads to their socioeconomic status? Teen parents can still be successful, but it seems to me that commonly they will forego furthering their education and careers due to constraints imposed by raising a child (particularly if their parents/family are not willing to support them).

I wonder how many of the poor who are having children really wanted to have children. There are cases like the "Octomom," but I also wonder how many people are getting pregnant because they can't afford contraceptives, and stick to the pregnancy because they can't afford an abortion.

Originally Posted by solomon

Frankly I believe alot of politicians either don't give a shit for people outside their income bracket or have some silly notion that you can just get out of school go work in some factory or mid level posiiton and someday attain "middle class status" like we did before globalization. It's not the 50s anymore and statistics have shown that some of the most "welfare ridden socalist" countries have better economic mobility than we do. It's Kool Aid we drink to avoid having to do something difficult politically and socially.

Everyone is limited by their experiences. Many of us are lucky in that we have not suffered a major life-changing catastrophic event, like an injury or illness. There's an ignorance about how big those expenses can become, and how the fallout can further prevent one from helping themselves further. Who knows - maybe there's a bit of wishful thinking behind it, too. It's certainly a grand fantasy to think that no matter what happens to you, regardless of how many limbs you lose and how little money is in your bank account, that you can always get to a better place by simply working hard. That fantasy emphasizes that no matter what happens, you are always in control of your life. It's pretty frightening to think that you could actually end up helpless, needing the generosity of society to help you to live no matter how hard you struggled.

[DonQuigleone]

Originally Posted by Dhomochevsky

I can see how that may work with tax ratings like the ones you mention.
But around here they are different.
The absolute lowest rate is 7% (that is for the husband/wife) and it can go up to 50% for a person not related by blood or marriage (depends on the amount of money involved).
The house is only except if the one inherriting lives there, or starts living there immedeately, which is obviously hard to manage if you already have a life elsewhere.
Otherwise it is not and a house alone is often enough to go over the tax free threshold of 500k€ (again husband/wife) to 20k€ (unrelated).
It is a problem for many families that often comes very sudden and in addition to losing a family member. In my opinion still the worst kind of tax.

I see no problems with this scheme. A person has no inherent right to what their parents earned. it's about equality of opportunity, I shouldn't be wealthy just because I happened to come out of a wealthy woman rather then a poor one.

It should be taxed like any other gift.

Anyway, I was reading over the German inheritance code (on a lark), and there's an exemption for the first 500,000 for spouses, and the first 400,000 for children. This seems like a pretty good amount to me. Most people will never pass on that much, and those who do will be able to pay for it through a combination of loans, and financing those loans by renting the property in question out. Even with the inheritance tax you have made a net gain.

Having an exemption on property just for cohabitation, or planning to live there seems about right.

I think Germany's harsh inheritance tax law is one reason why the country is not nearly as plutocratic as the United States. The financial dynasties that exist in the US can't come into existence in Germany.

The german tax code also seems to encourage spreading the inheritance out as much as possible, another good consequence.

While it does seem cruel at the time to have to think of taxes, the point is that you can't have a situation where people receive wealth tax free without doing anything to earn it.

The quantity of money that's exempted under german inheritance is more then enough to ensure the economic well being of any person inheritting. I wouldn't favour an inheritance tax that leaves people destitute, but the german tax would not do so.

[Dhomochevsky]

Originally Posted by DonQuigleone

Most people will never pass on that much, and those who do will be able to pay for it through a combination of loans, and financing those loans by renting the property in question out. Even with the inheritance tax you have made a net gain.

Actually many people do.
I guess it's a cultural difference.
For the post war generation middle class, the standard plan for life was to found a family, build a house and live there for the rest of their time. A typical german house, made of brick stones, massive walls ect, not those wooden things. And with a high price tag. For that, they usually took high depts and payed them off during the rest of their working years.

And to say that their kids don't have any more right on that money than a random stranger is a bit off. After all they were part of that family paying off that debt for most of their lifes and they often helped building that house themselves (for many families this was a project that went on quite some time).

Of course at worst you go off with nothing (unless you can't let go a heritage because of sentimental values). But many families are thrown into turmoil over that and it's certainly not the wealthy ones, that get into trouble.

Money dynasties are by no means out of existance in this country. They just got a bit of a setback by world history around the 1940s, so they are not (yet) as strong. But this can't be all atributed to taxes, as I mentioned those people usually have side channels.

[Anh_Minh]

Originally Posted by solomon

Anh Minh where do you live?

As Ledgem said, France.

Here in America, if you are very poor and cannot afford a car then you HAVE to be able to live in the central cities if not the city central in order to be near your likely job opportunities. Yea yea PT and all that, but we don't fund it like other countries do so in many cases it's very unreliable for employees.

What that tells me is that, in addition to social housing, you should put basic services and a public transportation. It doesn't have to be as extensive as the "normal" one, it just has to be enough to get people to and from work. Yes, it means commute, if and when they get a job, will be a bitch, but I didn't say being poor was pleasant.

"Having kids you cannot afford".....On the one hand I agree with this, it serves no purpose to have a child if you cannot care for it, I MYSELF certainly would never do it......then again I haven't actually talked to people about this. Poor people have had kids for ages, is it right for only the well off to experience the love of children?

One or two, sure. But part of the problem is that we're pretty generous with family subsidies, so it becomes not about "love", but about making a living through your kids. Which aren't always well taken care of afterwards. So I sometimes think that, if you need subsidies, you should be prevented from having more kids.

And it is true, ASAIC in America blaming the "lazy sense of entitlement" poor is a trumped up get out of jail free card in order to avoid actually doing things to HELP the poor when actually necessary. It's also heavily coded by race though politicians will never admit to it.

Frankly I believe alot of politicians either don't give a shit for people outside their income bracket or have some silly notion that you can just get out of school go work in some factory or mid level posiiton and someday attain "middle class status" like we did before globalization. It's not the 50s anymore and statistics have shown that some of the most "welfare ridden socalist" countries have better economic mobility than we do. It's Kool Aid we drink to avoid having to do something difficult politically and socially.

I think there's a lot to be done for the poor. But I also think they're going to have to give a bit, too.

[Dhomochevsky]

Originally Posted by Anh_Minh

What that tells me is that, in addition to social housing, you should put basic services and a public transportation. It doesn't have to be as extensive as the "normal" one, it just has to be enough to get people to and from work. Yes, it means commute, if and when they get a job, will be a bitch, but I didn't say being poor was pleasant.

Public transportation has to be very reliable (and that means well funded) in order to work for job commuting.
I used public transportation (30 minutes by train, 1 fall back line - 55 minutes, if the first one did not work) during my time at university. With the amount of times I was unable to reach the campus due to some public transportation mess-up, I would have been fired from most jobs already.
For important appointments, like exams, I made sure to get a car somehow and drive there myself. Job commuting under such cirqumstances?... a nightmare.

[DonQuigleone]

Originally Posted by Dhomochevsky

Actually many people do.
I guess it's a cultural difference.
For the post war generation middle class, the standard plan for life was to found a family, build a house and live there for the rest of their time. A typical german house, made of brick stones, massive walls ect, not those wooden things. And with a high price tag. For that, they usually took high depts and payed them off during the rest of their working years.

But homes are exempt anyway, if you're living in it. If you're not living in it, then where's the problem? You can rent it out to someone. Or sell it off. Keeping empty houses around just because "I lived ther when I was a kid" is a waste of resourced.

Also, in Ireland we build stone houses too (often using Granite!), and our family homes still wouldn't cost more then ~300,000 to actually build(inflated celtic tiger prices kind of ruined that though...), so the current exemption is plenty.

Further to that, the exemption is on the person inheritting. So the family home could be split between you and your sibling, who collectively would have an 800,000 exemption. I may be wrong on that one though.

And to say that their kids don't have any more right on that money than a random stranger is a bit off. After all they were part of that family paying off that debt for most of their lifes and they often helped building that house themselves (for many families this was a project that went on quite some time).

How? While they were living there they were children, and hence could not have payed for it. And when they grow old enough to start doing so, they're usually going to leave the home to get their own place away from their parents. And if they're living in the home, they get exempted anyway.

And if they did contribute actual cash to building it, they'd be co-owners of the house, and so would only have to pay inheritance tax on the portion their parent owned.

Of course at worst you go off with nothing (unless you can't let go a heritage because of sentimental values). But many families are thrown into turmoil over that and it's certainly not the wealthy ones, that get into trouble.

A lot of people who rail against inheritance tax name ambiguous "other" families who were harmed by it. But almost no one can actually name a direct experience where they, or someone they know, has had a negative experience with inheritance tax.

Now I don't want ot be presumptuous enough to speak for you, but have you, or anyone you know, ever actually been inordinately harmed by inheritance tax?

It's a tax that never hits anyone who is not already well able to afford it. Further to that, if you can't afford the inheritance tax on a property you're inheritting, how are you going to afford the maintenance costs of looking after that property anyway? No matter what your sentimental attachment to it is, if you're not going to live in and use it, such an asset becomes a liability, and you have to start renting it or selling it anyway. I doubt inheritance tax ever causes an outcome that was not going to happen anyway, it might accelerate it of course.

Money dynasties are by no means out of existance in this country. They just got a bit of a setback by world history around the 1940s, so they are not (yet) as strong. But this can't be all atributed to taxes, as I mentioned those people usually have side channels.

Rich people will have side channels, yes, but put it this way, most wealthy people will never give the greater majority of their wealth to their next of kin while alive, though they may give some of it away to get around inheritance tax, but they'll usually keep almost all of it. So Inheritance tax will still have the desired effect of diminishing large inheritances appropriately.

There's a reason that Inheritance tax is incessantly lobbied against by the super rich as a "death tax", it's one of the few taxes that they have few ways to get around, because there's not really much you can do to plan ahead about it, because of death being as sudden as it is.

I don't think enough people have really thought enough about inheritance tax. It gets mixed up too much with the emotions surrounding "death", and people lose sight of the civic good it achieves by breaking down entrenched dynasties and thus encouraging greater social mobility and equality of opportunity.

The main purpose of it, in my view, is as a society leveller, more then as an actual source of revenue. After all, I'd preserve the right to be able to pass unlimited money to charity on death as a tax deductible.

If you want to consider Inheritance tax carefully, consider the aristocrats of feudal europe. If no inheritance tax existed, then those estates would continue into perpetuity, and the nobles owning those estates would continue to keep their wealth and be able to earn income while living a life of leisure and indolence, never adding anything to estate, and just continuing to live off it's produce as a "leech". With an estate tax of even 20%, that estate would dwindle to nothing within 5 or 6 generations, forcing the aristocrats in question to vigourously work towards increasing the productivity of their estate. The system no longer encourages indolence and laziness. Those estates who continue to be run and managed by the indolent and lazy will have a portion of their assets seized on death, sold to someone who will likely manage it better in a more productive manner, say a peasant farmer whose scrimped and saved to be able to buy it and has dreams of using new more efficient forms of agriculture there with his investment. The proceeds of that sale would then go towards generally lowering taxes for everyone else.

In this case, the inheritance tax has had a great improvement on society. The effects of inheritance tax are quite long term, so people don't realise how it's positively affected society. We have a much more egalitarian and vigorous society in part because of inheritance taxes that have existed for at least the last 100 years.

[GDB]

Originally Posted by DonQuigleone

With an estate tax of even 20%, that estate would dwindle to nothing within 5 or 6 generations, forcing the aristocrats in question to vigourously work towards increasing the productivity of their estate.

20% per generation does not equal 100% gone within 5-6 generations. Even after 6 generations, there'd still be over 26% left, and that's assuming absolutely no adding to it. And if they're "dynasty" level, then they're going to have massive investments, be they in corporate level stocks or bonds or government level ones. Either way, they're going to continue to accrue more money, whether they're too lazy to work or not. There would certainly be no level of vigor required.

[DonQuigleone]

Originally Posted by GDB

20% per generation does not equal 100% gone within 5-6 generations. Even after 6 generations, there'd still be over 26% left, and that's assuming absolutely no adding to it. And if they're "dynasty" level, then they're going to have massive investments, be they in corporate level stocks or bonds or government level ones. Either way, they're going to continue to accrue more money, whether they're too lazy to work or not. There would certainly be no level of vigor required.

I know that, but only 26% left probably means they no longer have the income required to support their... lavish lifestyle.

And the nobility were notorious for the fact they completely wasted their money on parties and nice looking houses. They were only supported by the fact they rented land to thousands of tenant farming, which they almost never got rid of, and just continued to pass it down to the next generation of lazy layabouts. Accumulating money would have been a foreign concept to your average aristocrat, because they had no conception of the value of money.

However, 20% is probably too low, but it would still be high enough to have a worthwhile effect, hence why I used it as an example.

Also, the point of an inheritance tax isn't to eliminate familial wealth entirely, just to introduce a means to "erode" it over time.

Now if a noble actually decided to put his income towards improving his estate, and he wants to pass those down to his successor, I see nothing wrong with that. It's entirely likely that the successor will not be able to continue that noble's success and will just revert to another indolent lifestyle. BUt if he has any conception of the long term, he'll see that he'll have to increase the value of the estate in order to offset the losses from inheritance tax, encouraging him towards investing his wealth in productive activities.

But long term, those estates would gradually dissappear under the weight of inheritance taxes, as they have in real life (though other factors were also involved).

[Dhomochevsky]

Estate is actually one of the things that are completely except from this tax it seems.
So much for that.

[ganbaru]

Confusion Over, Trump Endorses Romney
http://thecaucus.blogs.nytimes.com/2...ucus&seid=auto
I can't say if it's supposed to be a good thing for Romney or not.