Archive for the Estate Tax Category

“No one deserves it.” (February 10, 2014)

Posted in Estate Tax, Personal Stories Series, Personal Story, Pogo Plight, Taxation on February 10, 2014 by

. . .

C          “No one gave me anything.  I worked for everything.  I had three jobs and did not even get the minimum wage for one of them.  They expect everything.  They have already spent it many times over.  I am not even dead yet.  I feel that way.  They act that way.”

L          “I understand.  You are among a small group who really did it the old-fashioned way by taking risk and working hard.  And it is yours.  In your eyes and in the eyes of the law.  It is also your decision.”

C          “I didn’t build my business out of a garage.  I didn’t have a garage.  We hardly kept a car on the road.  We built it from our dinette table.  They’ll sell that Formica® table for a few dollars at a yard sale.  If they even have the gumption to have a yard sale.  What if I don’t give it to ‘em?”

L          “It is yours to give or not to give to them or to someone else.”

C          “That would be givin’ it to ‘em.  Know what I mean.”

. . .

L          “Probate and estate issues like this are among the most frequent legal matters and concerns for older folks.  Trillions of dollars are transferring to the next generation.”

C          “I heard someone call it ‘entitlement’.  I don’t know who’s entitled to my money, but I know it’s not those kids.”

. . .

L          “Probate is not evil.  However, probating a will is expensive, protracted and public.  By putting your assets in a trust, you create a legal entity that survives you and eases transfer.  The process is cheaper, shorter and private.  Many trusts are designed not just to ease the transfer but to elude creditors and avoid taxes.  Many of the trusts designed to avoid taxes are legal theft, but that is where America is in the arc of this country.  This basic trust is simply a mechanism to make the transfer simpler with some tax portability and a layer of creditor protection.”

C          “That all sounds good, I think.  So you think it’s a good idea.”

. . .

L          “You could set up a foundation.  The goal is usually virtuous, yet the smaller personal foundations usually do little more than feed an ego and pay administrative expenses.  The folks on the payroll are pleased to have the job and the paycheck.  I was impressed that Warren Buffett did not establish his own foundation and instead gave most of his assets to the Gates Foundation.  That approach saves on administrative costs and focuses efforts.”

C          “What group should I give it to?”

L          “Which group do you want to give it to?”

C          “I don’t know.  That’s what I pay you for.”

L          “I am here to determine what you want to do.”

. . .

C          “What if I give it to you.  You said it’s mine to give to anyone I want to.”

L          “With a very important proviso.  You cannot give your money to your attorney who is obligated to represent your interests.”

C          “Then I’m not absolutely free to give to anyone I want to.”

L          “For these purposes, I am you.  You cannot give it to yourself.  And I cannot take it under rules that are in your best interest.  For what it is worth, there was a time or two when you were reluctant to pay attorney’s fees that were earned twofold.”

C          “I figure that if you are not able to make sure that you get paid then you are not able to make sure that I get paid.  I’ll throw nickels around like manhole covers until the day I die.  You know me.”

. . .

C          “Those kids didn’t have to work very hard to be entitled to my hard-earned money.  But they don’t want to work.”

. . .

[See the “e-ssays” under]

Bumper stickers of the week:

Easy come, easy go; Hard come, easy go; Hard come, hard go.

On The Digital Revolution (March 22, 2010)

Posted in Cyberactivities, Economics, Entitlements, Estate Tax, Kleptocracy, Society, Water on March 22, 2010 by

. . .

“Most, if not just about all, of the fortunes amassed in the last ten to twenty years were stolen.  Nothing was created.  Much was destroyed.”

“Jobs created some jobs.”

“And to his credit he is still creating a few.  There are a few others who are producing and contributing, yet they are the rare exceptions.  Scrutinize the “Forbes 400” list.  Some have family money.  Some made some contribution.  Few of them have done much to produce a product or provide a service.  The companies they overleveraged will soon overwhelm the economy.  At best they structure affairs to shift risk to others or to the taxpayers.  Successful businesses are dismembered and destroyed not created.  That is the fundamental difference between the robber barons of olde and the robber barons of new.”

“No dispute here.”

“Taxing some of the stolen money is impossible when the government can be and has been taken over and overtaken by the small cabal that owns and runs the kleptocracy.”

“No dispute here.”

“Today we hold electrons not dollars.  For a few seconds one afternoon, my computer indicated that there was nothing in my retirement account.  All 000s.  All goose eggs.  That caught my attention.  Seemed like a true harbinger of what will happen in the future.  The system refreshed in a few seconds and reported familiar figures.  What about a Digital Revolution that simply eliminates from all records ownership of any assets over five million dollars by any one person?”

“Cyberactivities are the real weapons of mass destruction.  They are also the weapons of mass creation.  Sort of like nuclear technology that is creative when harnessed for positive ends and destructive when deployed for harmful ends.  A five million dollar threshold will not impact me.”

“After the Digital Revolution, when you log onto your computer, you discover that you have no more than five million per person and ten million per couple including a personal residence, a vehicle, savings, golf clubs, polo saddles, etc.  As a rough gauge of worth or value to the individual, the algorithm will treat assets within a class such as a residence, cabin, car or boat that has been owned the longest as the most valuable and will remain with the individual.  The other assets will be randomly assigned to others.”

“No impact here, yet imagine the surprise one morning when someone wakes up to discover that he owns a fractional interest in a fractionally-rigged 76 foot sloop with rod rigging and a full complement of complimentary sails.”

“That only creates another travesty.  Individuals who did not create an idea, work late at night or take a risk should not be rewarded gratuitously.  The scheme would only contribute to the entitlement mentality that is such a defining part of the problem in contemporary America.  No one seems to be producing good goods or undertaking productive activities; no one deserves any reward.  However, the Digital Revolution would make a great novel.  ‘Coming to a theater near you.’”

“Don’t worry, the Chinese will trigger the Digital Revolution, although the outcome will be far less equitable than your proposal.  Perhaps you should worry.”

(World Water Day)

(Stewart Udall 1920 – 2010)

Bumper stickers of the week:

Golden Rule:  He who has the gold makes the rules.

Carnegie made steel; today’s barons steal.

Minimum Wage and Maximum Earners (July 31, 2006)

Posted in Economics, Estate Tax, Politics on July 31, 2006 by

Raising the minimum wage to provide a livable wage is virtuous.  However, the economic evidence is almost irrefutable that a rise in the minimum wage leads to a reduction in employment.  The head says no.  The heart says yes.  Support the higher wage.

The Democrats are critical of the effort to raise the amount exempt from the estate tax.  However, raising the exemption to 10 million per couple would protect the assets of many hard-working members of the Greatest Generation.  [See the April 18, 2005 e-ssay entitled “Death and Taxes: $10 M and 33 1/3 %.”]  The more substantial figures suggested in the pending legislation are excessive.  Some who seek to eliminate the estate tax altogether may view this change as a start.  However, if reasonable legislation is adopted, the momentum to eliminate the estate tax altogether may dissipate.

Death and Taxes: $10 M and 33 1/3 % (April 18, 2005)

Posted in Economics, Entitlements, Estate Tax, Taxation on April 18, 2005 by

(Now that the taxes are filed, it is time to deal with death)

Ben F., the key and kite guy, observed that there are two certainties in life.  Americans are so arrogant that they believe they are entitled to repudiate their mortality, although they do not believe they are entitled to pay for the effort.  Now the Congress wants to repudiate life’s other certainty, the payment of taxes upon death.  Is there no certainty in life?

Estate taxes (E taxes) are paid on the loot before anyone gets their paws on it.  Most Estate taxes are paid to the Feds, although the states will need to reach into the pot and grab a handful to survive in the near future.  Inheritance taxes (I taxes) are paid by the individuals after they get their paws on the lucre.  Most Inheritance taxes are collected by the states, although the Feds savor taxing any income from any source.

Contrary to the suggestions of their phalanxes of lawyers, lobbyists, lackeys, accountants and publicists, the rich often never paid tax on large chunks of their bounty.  Those who can afford almost anything should be afforded the opportunity to be first-class citizens.  Getting by on $10 million per couple and 66 2/3 % of the remaining stash is fair and balanced.  Anything below ten million per couple should be exempt; anything over should be taxed at 33 1/3 %.  A typical $20 M estate would yield $16 2/3 M for the kids.  That is the definition of fairness.  Fooling around with life’s certainties is foolish.  And improvident.