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ZeroByte13
799 Posts
It cannot be spent on assets because assets are part of wealth too. So it can only be spent on services or products that cannot be considered assets. Charity is a good way to feel good about yourself and also be in control of how your money are spent. | ||
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Gorsameth
Netherlands22519 Posts
On July 22 2024 00:41 micronesia wrote: Spending money means sales tax, so the government still gets part of it. And money flowing tends to be good for the economy aswell.I haven't studied the economics of inheritance tax closely (or any other types of economics, really), but it seems like a very large inheritance tax would push wealthy old people toward spending most of their money to derive some benefit rather than letting most of it fall into the hands of the government (assuming they didn't just use loopholes to bypass all the taxes). Which is better for the nation as a whole, rich people spending most of their wealth before they die, or rich people turning over most of their wealth to the government as taxes? Or they give to charity, which is also still a good thing. | ||
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WombaT
Northern Ireland27267 Posts
On July 22 2024 00:41 micronesia wrote: I haven't studied the economics of inheritance tax closely (or any other types of economics, really), but it seems like a very large inheritance tax would push wealthy old people toward spending most of their money to derive some benefit rather than letting most of it fall into the hands of the government (assuming they didn't just use loopholes to bypass all the taxes). Which is better for the nation as a whole, rich people spending most of their wealth before they die, or rich people turning over most of their wealth to the government as taxes? I have a personal theory of sorts that with a certain tier of wealth, it’s just such a large amount, with such a degree of abstraction as to what it entails, that people effectively can’t spend it. Not due to necessarily wanting to hoard, although some do of course, but that it’s kind of psychologically unfathomable to have that much wealth. As Stalin (possibly apocryphally) remarked in a similar way that one death is a tragedy, a million is a statistic. For those not quite as stratospherically wealthy, as to your question I’m unsure what would be the most societally beneficial in a macroeconomic sense, although pretty much anything would be preferable to just sitting on mountains of gold Smaug style. Another option would be to reinvest in the business portfolio you’re hoping to pass on to your progeny, which also could have positive impacts in terms of growth and job creation. | ||
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Yurie
12149 Posts
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KwarK
United States44243 Posts
On July 22 2024 00:41 micronesia wrote: I haven't studied the economics of inheritance tax closely (or any other types of economics, really), but it seems like a very large inheritance tax would push wealthy old people toward spending most of their money to derive some benefit rather than letting most of it fall into the hands of the government (assuming they didn't just use loopholes to bypass all the taxes). Which is better for the nation as a whole, rich people spending most of their wealth before they die, or rich people turning over most of their wealth to the government as taxes? Spending. Accumulated unearned wealth compounds over time and will rapidly reach a point where it becomes impossible to actually spend down, it simply grows faster than a normal individual could reasonably spend it. A few pages ago the maths was laid out, the dedicated smart kid who works hard, goes to college, picks STEM, gets a solid middle class engineering job, saves most his paycheck, pays off his mortgage etc. mathematically cannot catch a trust fund baby who never works a day in his life. And every time the hard working guy tries to invest he has to bid against trust fund kids for that investment, driving up the entry price. This leads to a steady polarization of the economy and the specialization of the economy into meeting the wants of the rich. Supply adapts to match demand and demand votes by dollars, not population. An economy with a handful of super rich is going to specialize into meeting their needs above those of the working poor because the 99% working poor are outvoted by the rich. Spending the fortune isn’t ideal but it at least returns the capital to circulation which works to slow the runaway train. Also not everyone will choose to spend everything. Let’s say there’s a 50% inheritance tax on amounts over a million (this would be orders of magnitude higher than the current US tax which is between 18% and 40% on amounts over $27.2m). I would still rather give my kids $1m than spend $2m on expensive wine. I feel like most people would. It’s not like you can’t give them anything, it’s that you can’t help them exclusively, you have to help uplift the rest of society a little as a price to uplifting them a lot. Also it’s not like the other things you can do for them aren’t tax advantaged. If you don’t want to give them a trust fund but instead want to use your money to give them a strong launch pad to make their own way that’s not subject to the inheritance tax. You actually get tax benefits to 529s and inherited IRAs and life insurance and so forth. Providing for your kids is tax advantaged, it’s only making them effete capitalist rentiers that is taxable. There’s a reasonable chance that my estate may one day pay inheritance tax. I don’t have a problem with it. When I think about wanting the best life for my kids I’m not imagining them never working a day in their life. I don’t think that’s the best possible life, and certainly not at the cost of other people living lives in service of their whims. | ||
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KwarK
United States44243 Posts
On July 22 2024 01:47 Yurie wrote: What is to stop you from starting a private company whose only purpose is to run services for your progeny at a loss? Basically boosting their companies while draining your wealth? They’d also inherit that company with all its money/assets? Or at the least they’d inherit the contract with the attached rights to free stuff which also has value. The IRS aren’t stupid. If you’ve thought of it then someone else has already thought of it, tried it, and it has been settled. The correct method is the life insurance loophole as life insurance proceeds are tax free to the recipient. That’s why whole life is used only by the super rich (and idiots). | ||
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Gahlo
United States35174 Posts
On July 22 2024 01:47 Yurie wrote: What is to stop you from starting a private company whose only purpose is to run services for your progeny at a loss? Basically boosting their companies while draining your wealth? At $1m/yr you're looking at having to spend close to $2,800 on services. For trillionaires that's a rounding error. | ||
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Yurie
12149 Posts
On July 22 2024 01:56 Gahlo wrote: At $1m/yr you're looking at having to spend close to $2,800 on services. For trillionaires that's a rounding error. I mean more along this example: Your daughter is launching a car manufacturer. As part of this they need buildings, cleaning, security etc staff that usually isn't hired by the company itself. As a doting father you buy office buildings then rent it out for $1 per year. You launch a cleaning and security company where the services cost $ per year. Your monthly losses goes into the millions rapidly. That is a competitive advantage for the company your daughter runs, allowing them to grab market share and later finance those things themselves. Or I guess the easier thing if it was allowed would be to buy 0.01% of the shares for your entire net worth. Then declare personal bankruptcy so your children aren't required to pay anything on the massive taxes for liquidating your investments and so on. Where those 0.01% are now not worth much when the government takes them over. | ||
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Simberto
Germany11951 Posts
On July 22 2024 02:13 Yurie wrote: I mean more along this example: Your daughter is launching a car manufacturer. As part of this they need buildings, cleaning, security etc staff that usually isn't hired by the company itself. As a doting father you buy office buildings then rent it out for $1 per year. You launch a cleaning and security company where the services cost $ per year. Your monthly losses goes into the millions rapidly. That is a competitive advantage for the company your daughter runs, allowing them to grab market share and later finance those things themselves. Or I guess the easier thing if it was allowed would be to buy 0.01% of the shares for your entire net worth. Then declare personal bankruptcy so your children aren't required to pay anything on the massive taxes for liquidating your investments and so on. Where those 0.01% are now not worth much when the government takes them over. In Germany, selling or renting stuff out for unreasonably low rates is handled the same way as a gift for tax purposes. As Kwark explained, the IRS isn't stupid, and stuff like that is usually regulated in some way. | ||
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Gorsameth
Netherlands22519 Posts
https://x.com/JoeBiden | ||
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micronesia
United States24793 Posts
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KT_Elwood
Germany1179 Posts
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micronesia
United States24793 Posts
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r00ty
Germany1083 Posts
On July 22 2024 03:01 micronesia wrote: I am curious to know what the plan/process from here will be. It's a bit late to start primary season and all that. Me too. I also think it's safe to say, there won't be a second debate as specific conditions were agreed to and Trump will not debate a competent person who is able to call him out. I'm also 100% sure Harris is a loosing ticket. | ||
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GreenHorizons
United States24253 Posts
On July 22 2024 03:01 micronesia wrote: I am curious to know what the plan/process from here will be. It's a bit late to start primary season and all that. That his announcement wasn't part of a unified partywide announcement of what this would be, means they didn't come to an agreement before Biden stepped down. Biden's pushing Harris and tried to force the rest of the party's hand by doing it this way. It hasn't worked yet, but it's still pretty fresh. | ||
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micronesia
United States24793 Posts
On July 22 2024 03:35 GreenHorizons wrote: That his announcement wasn't part of a unified partywide announcement of what this would be, means they didn't come to an agreement before Biden stepped down. Biden's pushing Harris and tried to force the rest of the party's hand by doing it this way. It hasn't worked yet, but it's still pretty fresh. It does seem to be the case that Biden is endorsing Harris: https://x.com/JoeBiden/status/1815087772216303933 | ||
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Jockmcplop
United Kingdom9959 Posts
Are they really that out of touch with the populace? | ||
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WombaT
Northern Ireland27267 Posts
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GreenHorizons
United States24253 Posts
On July 22 2024 03:55 Jockmcplop wrote: If the Democrats run Harris they deserve to lose. Are they really that out of touch with the populace? She's also going to need a VP that somehow people wouldn't prefer to her at the top of the ticket. | ||
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GreenHorizons
United States24253 Posts
On July 22 2024 03:59 WombaT wrote: Is this how Bernie can win? That's probably one reason they don't want an actually open primary | ||
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