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Yet many want to 'solve' the problem of the 0.1% being so wealthy and as a result let the government do most of the charity work instead. I think this would be

Yet many want to 'solve' the problem of the 0.1% being so wealthy and as a result let the government do most of the charity work instead. I think this would be a huge mistake. The mega wealthy donate a larger percent of their income than any other income group (which makes complete sense). We would be losing a ton of donation money. Yes this is a tangent. But I think its an important point to make. On top of that, even if it were true that most of the 0.1% are very wasteful spenders, there are some who's donations are irreplaceable with government charity. Irradiating the worlds malaria is an example of this. Getting rid of the wealth in the 0.1% would be a huge loss for important donations.

Retric 9y ago
I don't want to 'take it back.' But, I feel donations should not be tax deductible. Why should I subsidize anything someone feels is worth donating for?
- pc86 9y ago
  Well, only certain kinds of donations are tax deductible. You can donate $10,000 to me right now but you're not getting a penny back from the IRS if you do. The bar to become a charity could be a lot higher but it's not exactly a rubber stamp.
  - Retric 9y ago
    If I pay you 10,000$ you and I pay a tax. But, there is a separate gift tax deduction and small gifts. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe... Donations are really a 3 way tax break, I don't pay taxes on the gift, you don't pay taxes on the gift, and I don't pay income taxes on the money I use as a gift. (The arguable forth deduction is I don't need to realize capital gains before giving a gift.) PS: The only way to actually lower taxes is to lower spending. Anything else is just shifting the burden to someone else.
    - adventured 9y ago
      > Donations are really a 3 way tax break That doesn't make sense given the sums we're talking about. If I give someone $100 million (non-charitable), I don't have to pay an extra tax on the giving, I only pay taxes on the income. You're referring to a very specific gift tax scenario. The majority of the Gates Foundation giving is not within the US. The people on the end receiving should not pay taxes on that as it pertains to the US. Further, the Gates Foundation giving within the US will frequently end up taxed after the gift via income taxes on salaries (whether we're talking about scientists, secretaries or in the field workers receiving foundation dollars to operate as part of a charitable organization). The scope to the triple tax premise is, in reality, dramatically more narrow.
      - Retric 9y ago
        According to the US tax code you really do have to pay millions in taxes on a 100 million dollar gift to someone else. If they are in another country then that country's tax code applies and they might need to pay even more money. Here is the actual form: https://www.irs.gov/pub/irs-pdf/f709.pdf https://www.irs.gov/pub/irs-pdf/f709.pdf 19 If line 18 is less than line 17, enter balance due
- randyrand 9y ago
  I edited my comment. By take back I did not mean the current wealth from of the current generation of wealthy. But take-back over generations using very large marginal tax rates. E.g. 'solve' the problem of the 0.1% being so rich.
  - Retric 9y ago
    Confiscating wealth is counter productive. But, so is a large group with unearned wealth where nobody they know actually earned anything. IMO, the balance point is setting things up so the default is wealth is not maintained across several generations (3+), even though it can be passed down 1 or 2 generations and can be maintained with care past that point. PS: I say this with many wealthy friends and family. It's surprisingly destructive and I don't want to setup multi generational wealth for my great grand children.
    - tankerdude 9y ago
      The sad part is that that's what is happening in the world today. The rich, when they fund their money correctly, stay rich due to tax policy, gray areas, and loopholes. (Insurance polices as one example for the ultra rich.) If we don't tax people when they pass away, the money goes straight to their kids, and then a permanent upper class forms and we know what happened to France... The US has been about meritocracy, and not an aristocracy. But people want to change that, to the detriment of the country, IMO.
    - randyrand 9y ago
      When I said "But take-back over generations" I was not referring to an inheritance tax. I was referring to preventing new people from becoming as wealthy as today's wealthy by changing to a very large marginal income tax rate. It would be clearer if I said "widdle down the size of wealthy class over time". By far most of the wealthy today are new money, so an inheritance tax would do little in that regard anyway. But back to inheritance: > not maintained across several generations (3+) You're inventing problems. Inheritance decreases exponentially. Multi 3+ generational wealth is already divided by 64 times (assuming 2 children + spouses). It is not possible without the children putting in significant work themselves. You're inventing problems. At least we have common ground. Being able to pass on our successes to our children is a large and important motivator in life - one that would be incredibly unwise to remove.
- RhysU 9y ago
  How is not taking his money subsidizing him? Tax credits would be subsidizing him.
  - rusk 9y ago
    Sorry for my ignorance but is this merely a technical distinction? I would have thought tax-credits, and non-deduction are effectively equivalent?
  - Retric 9y ago
    Tax breaks for specific activities are by dentition a subsidy by lowering costs. If people with blue eyes suddenly did not have to pay taxes then that would be a massive subsidy. If you get a pay check and the taxes are already taken it it's just as much 'your money' as if you got the full paycheck then had to pay taxes after the fact. The point is more money goes out of your paycheck because the US government subsidizes other and often very rich people.
JumpCrisscross 9y ago
There's a difference between someone who went from upper middle class to billionaire, like Gates, and someone who inherited most of their wealth, like other people. I don't think lumping them together into a monolithic N% is productive for purposes of discussing policy.
- olewhalehunter 9y ago
  Bill Gates was not upper "middle class", his household was solidly in the 1%, he had computer programming access at his private school (this is 1968), and his mother's friendship with the president of IBM at the time was the reason he got contracted to write DOS. https://en.wikipedia.org/wiki/Mary_Maxwell_Gates#Career https://en.wikipedia.org/wiki/Mary_Maxwell_Gates#Career
  - dragonwriter 9y ago
    > Bill Gates was not upper "middle class", his household was in the 1% Seems to have been a successful petit bourgeoisie, or upper middle class, family. In traditional understanding of class relationships in capitalist society, the middle class isn't mostly middle income but well above; the majority of society is the working class dependent on wage-labor. The upper (capitalist or haut borgeoisie) class is a very thin layer. The modern American media generally uses a different model which where “class” would more accurately be called “income group”, rather than focussing on relation to the economic system; this gets confusing in conversation when people could be using either model. In that model, Gates family was clearly upper class.
    - olewhalehunter 9y ago
      That archaic nobility distinction is useless to the conversation, especially when the most powerful men in the world we're discussing about have the background I'm talking about. https://www.dailysabah.com/columns/taha-meli-arvas/2017/05/04/the-billionaires-burden https://www.dailysabah.com/columns/taha-meli-arvas/2017/05/0...
      - 9y ago
nebabyte 9y ago
> Yet many want to 'solve' the problem of the 0.1% being so wealthy and as a result let the government do most of the charity work instead. I think this would be a huge mistake. ...You don't see the problem in relying on the charatibility of a tiny few to work towards the well-being of billions?

Retric 9y ago

I don't want to 'take it back.' But, I feel donations should not be tax deductible. Why should I subsidize anything someone feels is worth donating for?

pc86 9y ago
Well, only certain kinds of donations are tax deductible. You can donate $10,000 to me right now but you're not getting a penny back from the IRS if you do. The bar to become a charity could be a lot higher but it's not exactly a rubber stamp.
- Retric 9y ago
  If I pay you 10,000$ you and I pay a tax. But, there is a separate gift tax deduction and small gifts. https://www.irs.gov/businesses/small-businesses-self-employed/frequently-asked-questions-on-gift-taxes https://www.irs.gov/businesses/small-businesses-self-employe... Donations are really a 3 way tax break, I don't pay taxes on the gift, you don't pay taxes on the gift, and I don't pay income taxes on the money I use as a gift. (The arguable forth deduction is I don't need to realize capital gains before giving a gift.) PS: The only way to actually lower taxes is to lower spending. Anything else is just shifting the burden to someone else.
  - adventured 9y ago
    > Donations are really a 3 way tax break That doesn't make sense given the sums we're talking about. If I give someone $100 million (non-charitable), I don't have to pay an extra tax on the giving, I only pay taxes on the income. You're referring to a very specific gift tax scenario. The majority of the Gates Foundation giving is not within the US. The people on the end receiving should not pay taxes on that as it pertains to the US. Further, the Gates Foundation giving within the US will frequently end up taxed after the gift via income taxes on salaries (whether we're talking about scientists, secretaries or in the field workers receiving foundation dollars to operate as part of a charitable organization). The scope to the triple tax premise is, in reality, dramatically more narrow.
    - Retric 9y ago
      According to the US tax code you really do have to pay millions in taxes on a 100 million dollar gift to someone else. If they are in another country then that country's tax code applies and they might need to pay even more money. Here is the actual form: https://www.irs.gov/pub/irs-pdf/f709.pdf https://www.irs.gov/pub/irs-pdf/f709.pdf 19 If line 18 is less than line 17, enter balance due
randyrand 9y ago
I edited my comment. By take back I did not mean the current wealth from of the current generation of wealthy. But take-back over generations using very large marginal tax rates. E.g. 'solve' the problem of the 0.1% being so rich.
- Retric 9y ago
  Confiscating wealth is counter productive. But, so is a large group with unearned wealth where nobody they know actually earned anything. IMO, the balance point is setting things up so the default is wealth is not maintained across several generations (3+), even though it can be passed down 1 or 2 generations and can be maintained with care past that point. PS: I say this with many wealthy friends and family. It's surprisingly destructive and I don't want to setup multi generational wealth for my great grand children.
  - tankerdude 9y ago
    The sad part is that that's what is happening in the world today. The rich, when they fund their money correctly, stay rich due to tax policy, gray areas, and loopholes. (Insurance polices as one example for the ultra rich.) If we don't tax people when they pass away, the money goes straight to their kids, and then a permanent upper class forms and we know what happened to France... The US has been about meritocracy, and not an aristocracy. But people want to change that, to the detriment of the country, IMO.
  - randyrand 9y ago
    When I said "But take-back over generations" I was not referring to an inheritance tax. I was referring to preventing new people from becoming as wealthy as today's wealthy by changing to a very large marginal income tax rate. It would be clearer if I said "widdle down the size of wealthy class over time". By far most of the wealthy today are new money, so an inheritance tax would do little in that regard anyway. But back to inheritance: > not maintained across several generations (3+) You're inventing problems. Inheritance decreases exponentially. Multi 3+ generational wealth is already divided by 64 times (assuming 2 children + spouses). It is not possible without the children putting in significant work themselves. You're inventing problems. At least we have common ground. Being able to pass on our successes to our children is a large and important motivator in life - one that would be incredibly unwise to remove.
RhysU 9y ago
How is not taking his money subsidizing him? Tax credits would be subsidizing him.
- rusk 9y ago
  Sorry for my ignorance but is this merely a technical distinction? I would have thought tax-credits, and non-deduction are effectively equivalent?
- Retric 9y ago
  Tax breaks for specific activities are by dentition a subsidy by lowering costs. If people with blue eyes suddenly did not have to pay taxes then that would be a massive subsidy. If you get a pay check and the taxes are already taken it it's just as much 'your money' as if you got the full paycheck then had to pay taxes after the fact. The point is more money goes out of your paycheck because the US government subsidizes other and often very rich people.

JumpCrisscross 9y ago

There's a difference between someone who went from upper middle class to billionaire, like Gates, and someone who inherited most of their wealth, like other people. I don't think lumping them together into a monolithic N% is productive for purposes of discussing policy.

olewhalehunter 9y ago
Bill Gates was not upper "middle class", his household was solidly in the 1%, he had computer programming access at his private school (this is 1968), and his mother's friendship with the president of IBM at the time was the reason he got contracted to write DOS. https://en.wikipedia.org/wiki/Mary_Maxwell_Gates#Career https://en.wikipedia.org/wiki/Mary_Maxwell_Gates#Career
- dragonwriter 9y ago
  > Bill Gates was not upper "middle class", his household was in the 1% Seems to have been a successful petit bourgeoisie, or upper middle class, family. In traditional understanding of class relationships in capitalist society, the middle class isn't mostly middle income but well above; the majority of society is the working class dependent on wage-labor. The upper (capitalist or haut borgeoisie) class is a very thin layer. The modern American media generally uses a different model which where “class” would more accurately be called “income group”, rather than focussing on relation to the economic system; this gets confusing in conversation when people could be using either model. In that model, Gates family was clearly upper class.
  - olewhalehunter 9y ago
    That archaic nobility distinction is useless to the conversation, especially when the most powerful men in the world we're discussing about have the background I'm talking about. https://www.dailysabah.com/columns/taha-meli-arvas/2017/05/04/the-billionaires-burden https://www.dailysabah.com/columns/taha-meli-arvas/2017/05/0...
    - 9y ago

nebabyte 9y ago

> Yet many want to 'solve' the problem of the 0.1% being so wealthy and as a result let the government do most of the charity work instead. I think this would be a huge mistake. ...You don't see the problem in relying on the charatibility of a tiny few to work towards the well-being of billions?