<p>For me, the significance of higher estate tax isn’t so much about the revenue it brings as preventing astrocrats. It is better if everyone is made to earn every dollar they make. Unmitigated growth of wealth through generations is not healthy. In case of Buffet, not much money is going to his children. Some of his money is going to foundations his children support on irrevocable terms.</p>
<p>I don’t understand the dynasty trust. Other irrevicable trusts seem pain in the neck and quite restrictive. I have a tough time believing they are major vehicles of evading tax. To me Caymen Island seems the most effective way. No wonder Bill Clinton keeps his money there. By the way how did he get so rich? When he came to the White House, the Clintons were barely worth a million.</p>
<p>Didn’t CBO come up with a number on what savings to be made if the medicare age is raised? There must be savings doing that. If you are saying Medicare will be cheaper, we could ask 65-67 olds to pay for the cost of plan A. That’d be one way cutting cost.</p>
<p>In addition to Childcare provision in SS benefit, if it is up to me I would also disallow “file and delay” If they can delay, clearly they don’t need money. We should get less ambitious with helping people with SS. SS benefit should be more about covering basic needs.</p>
<p>SS, I paid more than 200,000 into SS over the last 35 years, and if you want people like me to support SS, I better get back some of that money.</p>
<p>I am already a loser with SS, which I don’t mind, but a total loser…forget it.</p>
<p>98 percent of the population is going to need SS if they live long enough. If people die, I guess they personally won’t need SS.</p>
<p>^^most people don’t get it. They look at their savings, don’t have a clue how much inflation is going to eat away at it and their pension if they’re lucky to have one. Others think they’re great investors who can make a fortune on their own. Many are totally unrealistic about their future retirement.</p>
<p>Did the world indeed come to an end? We actually agree on something? Quite frankly there is an easy solutions to make people like Buffett put their mouth where the money is. Make every type of income taxable the same rate, be it wages or capital gains or dividends. </p>
<p>My hunch is, we would not even have to increase top tax rate on top 2% to get higher revenues. I think we might even decrease top tax rates and still get more revenue. I don’t have numbers or studies to back it up, but since majority of income of the very rich comes in form of capital gains and (qualified) dividends, then if they pay higher rate than current max 15%, we would collect much more revenue. </p>
<p>We don’t even have to collect maximum tax rate. We can just settle for 25-30% and still come out ahead. According to Buffett, tax rate does not affect his investing decisions, so we should be all set.</p>
<p>Buffett put his wealth in trusts so the income isn’t really his and isn’t taxable under him.</p>
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<p>Tax rate apparently affects how he has managed his assets. Why put everything into a trust if you’re not trying to avoid taxes? Speaking of Buffett, his big stock buyback does seem to have boosted Berkshire this week.</p>
<p>I was sarcastic and rolling my eyes while writing that particular sentence (not the entire post though). I swear, I am sure I’ve read somewhere that he said it.</p>
<p>This is so not true. If his trust is revocable, the income is treated just like personal income for tax purposes. If irrevocable, the income would be distributed to him and taxed as personal income. If it is kept in the trust, it will be taxed at trust tax rate which is higher.</p>
<p>I agree that life is easier for rich people but not as much as we make it out to be. I am sure many of them pay AMT. If they do, they are paying 20% on capital gains and dividends. lerkin, you got your wishes. Almost.</p>
<p>dstark - I don’t think 200,000 goes very far. I don’t know how much we contributed to SS but our benefit seems much higher than dollars amount we contributed.</p>
<p>There’s an article in the Washington Post about the charitable contributions deduction going away. It looks like there’s a lot of behind-the-scenes work going on with this with non-profits on one side and the White House on the other. This is something that would affect universities too.</p>
<p>I personally think that you should donate because you feel that it is the right thing to do; not because you’re going to get a tax deduction. The non-profits believe that they receive more in donations because of the deduction. I’d guess that that’s true. It would also result in some non-profits that take away your junk and giving you a receipt where you fill in the value for a deduction; going out of business.</p>
<p>probably not unless Gates Foundation is for-profit. I am sure it isn’t. If he takes income from it, he will have to pay personal income tax, I think. It will be interesting to see the trust agreement, if he takes the income distribution or he is giving that up, too. Anyway, note that his fortune does not stay in the family.</p>
<p>I agree about charitable contributions. I wouldn’t be surprised over 1 trillion is locked up in non-profits never paying any tax.</p>
<p>It depends on your definition of “rich”. If you are talking about a 250K per year wage-slave family in New York, then while their life is not bad, it is certainly not as opulent as it sounds. If it is Warren Buffet or George Soros type of rich, then I am sure their life is rosy enough to talk about paying more taxes. </p>
<p>As far as my wish, I am just pointing out that if all types of income were treated equally under the tax code, then there would be no argument that rich do not pay their share. And we can simultaneously increase revenue and lower maximum tax rate. </p>
<p>With all the talk of compromise I am surprised no one considers this. Both sides win. Right can talk about decreasing tax rates, and Left can talk about increasing taxes on the rich by making rich pay the same rate on capital gains and qualified dividends as those who earn equivalent amount.</p>