Retirement-Savings Cap?

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darmic3
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Re: Retirement-Savings Cap?

Post by darmic3 »

Aitrus wrote:I'm in favor of no estate tax. Taxing a man's money twice (thrice if you count the various sales taxes) just strikes me as wrong. Just as my children shouldn't be held accountable for my misdeeds, likewise they shouldn't be punished for my hard work and success.

I would rather be taxed less and have a smaller government that lived within it's means, like the rest of us.
A BIG Amen to that brother! :D
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cswift01
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Re: Retirement-Savings Cap?

Post by cswift01 »

darmic3 wrote:
Aitrus wrote:I'm in favor of no estate tax. Taxing a man's money twice (thrice if you count the various sales taxes) just strikes me as wrong. Just as my children shouldn't be held accountable for my misdeeds, likewise they shouldn't be punished for my hard work and success.

I would rather be taxed less and have a smaller government that lived within it's means, like the rest of us.
A BIG Amen to that brother! :D
I think that people that earn it should enjoy it. When it comes to legacy we have a whole different question. Many economists agree that the people that spend the most are low and middle income people (what I mean here are those that impact the economy). The estate tax only hits at 11 million for a couple. I don't see all that additional cash after the deaths helping the economy in their offspring, but that's just me.

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skiehawk11
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Re: Retirement-Savings Cap?

Post by skiehawk11 »

A person can't be taxed twice with the estate tax. Once a person dies, they can't be taxed ever again. They're dead.

Whoever inherits their wealth doesn't get taxed twice. In fact, any inheritance isn't considered income and isn't taxed under the income tax. It is income. Further, it's income they've never worked for. The person leaving their assets worked for it.

The simplest and most equitable way to deal with the estate tax is to consider it income for tax purposes and apply the income tax brackets.

I'd rather have the income tax brackets reduced and corporate taxes reduced.

To Aitrus' point, if a person wants to leave a legacy for their children, that's fine, but they shouldn't be given any special treatment because of it. It's a personal decision and it doesn't violate what I would consider a just tax definition. Further, a parent can invest in their children throughout their life by covering costs for education, providing 0% interest loans for housing, and other ways to "invest" in their children. I would argue that would be more worthwhile since a parents can see their investment paying off.

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mjedlin66
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Re: Retirement-Savings Cap?

Post by mjedlin66 »

The idea that "the money has already been taxed" is a flawed perspective. We don't tax money, we tax income. An inheritance is income to the recipient.

Also, saying that recipients are being "punished" because they got a free inheritance is ridiculous. Your parents left you a million dollars. You pay 250k in taxes and keep the rest. You just got 1 million dollars gross for no effort on your part. You paid the taxes and still had 750k for no effort on your part. What a harsh punishment!

I think the estate tax should only exempt inheritances of 100k or less. Almost everyone should pay the estate tax.
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mmmmmbeer
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Re: Retirement-Savings Cap?

Post by mmmmmbeer »

mjedlin66 wrote:The idea that "the money has already been taxed" is a flawed perspective. We don't tax money, we tax income. An inheritance is income to the recipient.

Also, saying that recipients are being "punished" because they got a free inheritance is ridiculous. Your parents left you a million dollars. You pay 250k in taxes and keep the rest. You just got 1 million dollars gross for no effort on your part. You paid the taxes and still had 750k for no effort on your part. What a harsh punishment!

I think the estate tax should only exempt inheritances of 100k or less. Almost everyone should pay the estate tax.

Nope.. absolutely disagree with this.
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greengrass
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Re: Retirement-Savings Cap?

Post by greengrass »

If I own a business and my children work for me the money I give them is taxed. So if they didn't work for it they shouldn't get taxed? What should happen if I gave it to non-family? Maybe that's the question.

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darmic3
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Re: Retirement-Savings Cap?

Post by darmic3 »

While we're at it, if you inherit a house that was already paid off by grandma, and you decide to sell it, then you should only be able to get what she paid for it (let's say 30K). Oh, and let's tax the 30K too by the way. Even though the house is now worth 300K, it doesn't matter...you didn't earn it and it's considered income.
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Aitrus
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Re: Retirement-Savings Cap?

Post by Aitrus »

skiehawk11 wrote:
To Aitrus' point, if a person wants to leave a legacy for their children, that's fine, but they shouldn't be given any special treatment because of it. It's a personal decision and it doesn't violate what I would consider a just tax definition. Further, a parent can invest in their children throughout their life by covering costs for education, providing 0% interest loans for housing, and other ways to "invest" in their children. I would argue that would be more worthwhile since a parents can see their investment paying off.
Just because it's labeled "income" doesn't mean that it is. What if it was left as a "gift"? Would it still be subject to taxes?

My point is that the government levels a final insult at the deceased by taking, by force, something he meant to leave to his heirs. Or, lacking heirs, beneficiaries of his choice. I agree, providing for the kids while alive is one choice, and a worthwhile one at that. But mandating that choice, or making it the only viable one due to taxation, is not the role of the government.

If a somebody works hard all his / her life and chooses to leave the kids / grandkids better off than he was himself, why does the government get to have a cut of that person's hard work a second time simply because he passed? It makes no sense.

I think the most equitable way to deal with this would be to have lower income and corporate taxes, remove all inheritance taxes (regardless of amount), and reduce government spending to logical and Constitutionally consistent levels not to exceed revenue - there should be zero debt / deficit, and we should have a national surplus / "rainy day fund" for emergencies. What is logical and Constitutionally consistent? Reference the 10th Amendment for the answer.
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Aitrus
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Re: Retirement-Savings Cap?

Post by Aitrus »

mjedlin66 wrote:The idea that "the money has already been taxed" is a flawed perspective. We don't tax money, we tax income. An inheritance is income to the recipient.

Also, saying that recipients are being "punished" because they got a free inheritance is ridiculous. Your parents left you a million dollars. You pay 250k in taxes and keep the rest. You just got 1 million dollars gross for no effort on your part. You paid the taxes and still had 750k for no effort on your part. What a harsh punishment!

I think the estate tax should only exempt inheritances of 100k or less. Almost everyone should pay the estate tax.
Maybe we were both wrong. It's not money, and it's not income. It's property, which is forcibly taken from us at the point of a gun by the government. If you don't pay your taxes, you eventually get arrested and thrown in jail. In other words, it's theft if it were done by you or I to another person. Forcibly taking anybody's property is theft, no matter who does it.

We must have some level of government, else anarchy exists (which is never permanent and only a transitional state of affairs), thus we must have taxes. Some level of theft must happen, but it should only happen with the consent of the governed. And the end payers are always the consumer, even if you tax the company the costs will be passed on in the form of higher prices or shoddier products.

If we must have a government and therefore taxes to fund said government, in order to limit the infringement of personal liberties and freedoms we must therefore insist that such government be as minimal as possible. Since the government is minimal, taxes will also likewise be minimal.

If taxes are minimal, then there will be no need of exorbitant levels of taxation such as death taxes or excessive income taxes. Until 1913 the government functioned without an income tax of any kind, and the government was likewise small. The government has exploded in the last 100 years, especially compared to the 150 years before that. 1913 was the worst year ever.
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darmic3
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Re: Retirement-Savings Cap?

Post by darmic3 »

If you inherit a house that's been fully paid off and you decide to live in it, should you be expected to pay the chunk of tax that the house is valued at?
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winsprint
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Re: Retirement-Savings Cap?

Post by winsprint »

Time to worry? Trump promises ‘no change’ for 401(k) plans in tax overhaul

http://www.marketwatch.com/story/time-t ... 2017-10-23

Scorpio70
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Re: Retirement-Savings Cap?

Post by Scorpio70 »

That would pretty much kill the traditional 401K.

RotorHead
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Re: Retirement-Savings Cap?

Post by RotorHead »

Time will tell.

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12squared
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Re: Retirement-Savings Cap?

Post by 12squared »

winsprint wrote:Time to worry? Trump promises ‘no change’ for 401(k) plans in tax overhaul

http://www.marketwatch.com/story/time-t ... 2017-10-23
Don't think we're out of the woods. The TSP, as I understand it, does not technically fall under section 401(c) of the IRS code. Nor do 403(c) plans, by definition.

I also wonder how matching contributions would be handled. Would the match be limited to the cap value?
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mjedlin66
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Re: Retirement-Savings Cap?

Post by mjedlin66 »

darmic3 wrote:If you inherit a house that's been fully paid off and you decide to live in it, should you be expected to pay the chunk of tax that the house is valued at?
Yes!
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