All Hank, all the time.

[Mmmm, Burger (C.J.)]

Originally posted by taxwonk
What the Wall Street Journal doesn't tell you is that their math is totally fucked. The loss of basis step-up carries with it a tacked holding period, which means that most inherited property will qualify for the 5% cap gains rate. In other words, yet again, the administration is giving to the richest and screwing everybody else.

5% or 15%? Their calculations assume the current k-gains rate of 15%. How can I get some of that 5% rate?

[baltassoc]

Originally posted by Mmmm, Burger (C.J.)
5% or 15%? Their calculations assume the current k-gains rate of 15%. How can I get some of that 5% rate?

Meh. Either way I'm assured that any inheritence I now get will be taxed, were as before it would not have been.

Thanks!

Oh yeah, unless I hold on to the asset, whereas before I had an incentive to sell and reinvest if I saw a better investment of my capital. I think it was that whole reduction-of-incentive-to-reinvest that was the whole point behind the reduction in the capital gains tax, right?

BTW, no one has yet answered my question from a couple of weeks ago as to why one part of the government is trying its hardest (according to its own rhetoric) to stoke the economy by increasing the money supply by reducing taxes (a/k/a "supply side economics") while another part of the government is trying its hardest to control inflation by reducing the money supply by increasing interest rates.

This positivist economics stuff would be a lot more convincing if it were consistent.

[Tyrone Slothrop]

Originally posted by Secret_Agent_Man
Just wanted to see the picture again.

(a) There something oddly robotic about that picture, and
(b) I did not know that robots can ride horses.

Once again, I am impressed with the prowess of our future overlords. Carry on.

[Tyrone Slothrop]

Originally posted by Mmmm, Burger (C.J.)
FWIW, the Wall Street Journal observes that the estimated revenue costs of repeal are massively overstated, because the bill under debate also would repeal the "stepped-up basis" provisions currently in effect. That is, when momma dies, and you inherit stock, your basis is the price as of the date of death (some modifications apply). If the estate tax is repealed per this bill, you now will take her original basis. Any sales will be taxed at the k-gains rate for that. This is estimated to replace nearly all the revenue that would be lost by repealing the estate tax.*



*FWIW, small estates will be worse off under this rule, since they'll have to pay some tax whereas before they had to pay none.

Wonk probably has my proxy, but why would a coalition of really rich people spend millions over many years lobbying for something that will leave them revenue-neutral relative to today? Inbreeding?

[Mmmm, Burger (C.J.)]

Originally posted by baltassoc

BTW, no one has yet answered my question from a couple of weeks ago as to why one part of the government is trying its hardest (according to its own rhetoric) to stoke the economy by increasing the money supply by reducing taxes (a/k/a "supply side economics") while another part of the government is trying its hardest to control inflation by reducing the money supply by increasing interest rates.

.

Difference between fiscal and monetary policy. Fiscal policy is longer run. The theory is that reducing taxes increases long-run economic growth.

Of course, when there are tax cuts without spending cuts, it's inflationary, so we need tighter monetary policy to keep inflation in check (that and Greenspan didn't bother to keep monetary growith reasonable his last few years, but it's not his problem now).

[Spanky]

Originally posted by Mmmm, Burger (C.J.)
Difference between fiscal and monetary policy. Fiscal policy is longer run. The theory is that reducing taxes increases long-run economic growth.

Of course, when there are tax cuts without spending cuts, it's inflationary, so we need tighter monetary policy to keep inflation in check (that and Greenspan didn't bother to keep monetary growith reasonable his last few years, but it's not his problem now).

I just checked in and have no time today, and maybe this is not what you were discussing - but ending the estate tax will not help economic growth. Of all the taxes to cut this should be the last one on the agenda. The estate tax does not discourage productivity.

Trying to end the estate tax is stupid policy and stupid politics. Just like trying to end the minimum wage is stupid policy and stupid politics.

[sebastian_dangerfield]

Originally posted by taxwonk
What the Wall Street Journal doesn't tell you is that their math is totally fucked. The loss of basis step-up carries with it a tacked holding period, which means that most inherited property will qualify for the 5% cap gains rate. In other words, yet again, the administration is giving to the richest and screwing everybody else.

I'm confused. OK. I get how this is a gift to the rich. The rich get less taxes.

But how is everybody else getting screwed? Are you saying we have an entitlement to the rich's money?

I don't like Paris Hilton, and I think she's a terrible example of money being wasted by a fool, but I'm not entitled to any of her money. That she'll be giving less up in estate taxes isn't "screwing" my issue. How or why are my kids entitled to any of her money?

The rich are getting a benefit, but neither you nor I are getting "screwed" because of it. The money rich won't be paying inestate taxes isn't money we'd otherwise not pay in taxes. If the estate taxes were raised, my taxes would stay the same. Government isn't in the business of effectively spending tax revenue. The only people losing on estate tax repeal are people who make their living in or off the govt, because now the govt has less to spend on them.

I'd rather Paris have a gold plated Bentley than see the govt waste the money. At least she'll spend the moneyin some way that it will create revenue for an independent businessman, rather than go to a govt worker or some company leeching wasteful govt contracts for senseless shite like Ted Stevens' bridge to nowehere or some Democratic program to house all the Katrina victims in Idaho.

[Gattigap]

Originally posted by Tyrone Slothrop
(a) There something oddly robotic about that picture, and
(b) I did not know that robots can ride horses.

Once again, I am impressed with the prowess of our future overlords. Carry on.

(c) Who knew robots were so well endowed?

[sebastian_dangerfield]

Originally posted by Spanky
I just checked in and have no time today, and maybe this is not what you were discussing - but ending the estate tax will not help economic growth. Of all the taxes to cut this should be the last one on the agenda. The estate tax does not discourage productivity.

Trying to end the estate tax is stupid policy and stupid politics. Just like trying to end the minimum wage is stupid policy and stupid politics.

Yeh, but you know this is more of a moral than economic argument. This issue touches the central difference between people who believe in social engineering via govt and people who believe that's not the govt's business.

Its like abortion - both sides of the issue have equally solid points. Putting economic arguments in favor or against the estate tax aside, it seems logical to ensure against concentration of wealth via the tax. Only problems with that are, (a) it doesn't reach that intended effect, thanks to savvy planners, and (b) there's an equally morally persuasive argument that the govt has no right to tax what's already been taxed one or more times or unilaterally hand out the wages of a person's life, particularly to an institution like our govt.

[Hank Chinaski]

Originally posted by baltassoc
Meh. Either way I'm assured that any inheritence I now get will be taxed, were as before it would not have been.

Thanks!

Oh yeah, unless I hold on to the asset, whereas before I had an incentive to sell and reinvest if I saw a better investment of my capital. I think it was that whole reduction-of-incentive-to-reinvest that was the whole point behind the reduction in the capital gains tax, right?

BTW, no one has yet answered my question from a couple of weeks ago as to why one part of the government is trying its hardest (according to its own rhetoric) to stoke the economy by increasing the money supply by reducing taxes (a/k/a "supply side economics") while another part of the government is trying its hardest to control inflation by reducing the money supply by increasing interest rates.

This positivist economics stuff would be a lot more convincing if it were consistent.

was it you or SHP who bet me 1 month of board support that we'd invade Syria by late 2005? Someone owes RT some $$

[Tyrone Slothrop]

Originally posted by sebastian_dangerfield
But how is everybody else getting screwed? Are you saying we have an entitlement to the rich's money?

I think we're all entitled to a world in which the Paris Hiltons of the world are not given three legs up simply by virtue of being born to rich parents.

[taxwonk]

Originally posted by Mmmm, Burger (C.J.)
5% or 15%? Their calculations assume the current k-gains rate of 15%. How can I get some of that 5% rate?

I was thinking of ther educed rate on capital gain property held over 5 years under 26 USC 1202. Apparently, they've changed it to apply only to stock of small (assets < $50M) companies.

[Mmmm, Burger (C.J.)]

Originally posted by taxwonk
I was thinking of ther educed rate on capital gain property held over 5 years under 26 USC 1202. Apparently, they've changed it to apply only to stock of small (assets < $50M) companies.

Well, if they're really trying to help the farmers and small business owners, allowing the deferred k-gain until they actually sell is a pretty good policy approach, as compared to the estate tax. If they keep owning the business, then less/no tax; if they sell, pay up. Of course, this helps all of three farmers, or whatever. But at least in theory . . .

[taxwonk]

Originally posted by sebastian_dangerfield
I'm confused. OK. I get how this is a gift to the rich. The rich get less taxes.

But how is everybody else getting screwed? Are you saying we have an entitlement to the rich's money?

I don't like Paris Hilton, and I think she's a terrible example of money being wasted by a fool, but I'm not entitled to any of her money. That she'll be giving less up in estate taxes isn't "screwing" my issue. How or why are my kids entitled to any of her money?

The rich are getting a benefit, but neither you nor I are getting "screwed" because of it. The money rich won't be paying inestate taxes isn't money we'd otherwise not pay in taxes. If the estate taxes were raised, my taxes would stay the same. Government isn't in the business of effectively spending tax revenue. The only people losing on estate tax repeal are people who make their living in or off the govt, because now the govt has less to spend on them.

I'd rather Paris have a gold plated Bentley than see the govt waste the money. At least she'll spend the moneyin some way that it will create revenue for an independent businessman, rather than go to a govt worker or some company leeching wasteful govt contracts for senseless shite like Ted Stevens' bridge to nowehere or some Democratic program to house all the Katrina victims in Idaho.

I'm saying that 97% ofr Americans are better off with an estate tax that has a unified credit amount fo say, $15-20M and a basis step-up at death.

The only people who do better under the repeal of the estate tax and elimination of the basis step-up are people who own controlling blocks of stock in corporations that they will never sell, because they can control the flow of dividends to meet their cash flow needs. Think Rockefeller, Texas Union or whoever owns the King Ranch stock, John KLuge, and that lot.

Everybody else gets fucked. If there were maybe ten families who had to sell off their business because Daddy fucked up his estate planning, there will now be millions of taaxpayers who get taxed because they want to sell the farm or the vacation house in Maine.

[Mmmm, Burger (C.J.)]

Originally posted by Tyrone Slothrop
I think we're all entitled to a world in which the Paris Hiltons of the world are not given three legs up simply by virtue of being born to rich parents.

While I'm inlcined to agree with you, if she were to offer fellatio, unsolicited, to me, I would then disagree. In fact, I think I can generalize this to say that the offspring of a rich, hot starlet may deserve such a leg up so long as the starlet remains hot. and gives me unsolicited fellatio.