4 ms·

His problem is not with underage gambling restrictions. It's about how expensive it's to transfer funds to family. Also he's paying income taxes on behalf of hi

by fsniper 12y ago

His problem is not with underage gambling restrictions. It's about how expensive it's to transfer funds to family. Also he's paying income taxes on behalf of his daughter. That's unavoidable. But the gift tax? that's really insane.

dalke 12y ago
The gift tax exists to prevent estate tax avoidance. Is your view that on principle estate and gift taxes shouldn't exist? I am philosophically against inherited capital accumulation, so think it should exist. FWIW, only those who have given over $5.43 million of gifts in their lifetime pay the gift tax in the first place. Woz is by all accounts a generous person. While generous, this also reduced the size of his taxable estate by quite a bit. In addition, each parent can give a child up to $14K tax free (now; $10K then). Spouses can give gifts to each other tax free. If I read it right, each of Woz's children probably received up to $20K in a year without paying gift taxes, though he only mentions the $10K from him personally. This gambling win would have been on top of that $20K. It's hard for me to be concerned about 12 year olds making 20K/year tax-free.
- fsniper 12y ago
  I do not understand the rational after estate tax. It may be rational to prevent "depth escaping" in many cases but in death? I think most of the time some illegal activities or workarounds are used as subtext by government to take some more cut.
  - dalke 12y ago
    I don't know what you mean by "death escaping." I don't know what illegal activities you are referring to in this matter. The Wikipedia page http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States has a pretty complete coverage of the points both for and against the estate tax. While the gift tax is, in the US, closely coupled to the estate tax, they are distinct things. I made an error in not mentioning income tax as well was the estate tax. Gifts could be used to get around income tax. If I pay my children to work in my store, then they pay income tax. If however I give them gifts, and they just happen, out of generousness and familial good will, happen to do the same amount of work as an employee, then that's an illegal scheme to avoid paying income tax. Estate taxes are a reflection of a philosophical viewpoint, which is that inherited wealth is not as good for the country's well-being as wealth from labor. Consider if I were to own 1/5th of the land of Manhattan, and make money from leasing out the properties. If there were no wealth tax, then I could pass that land to one of my children, who then passes it on to one of my grandchildren, etc. Wealth like that tends to accumulate, and lead to increased economic inequality. The philosophical viewpoint is that a humane society does not have drastic differences between the richest and poorest people. In addition, this would tend to create de facto nobility, or landed gentry, which is something the US has traditionally opposed. If Picketty is right, and r > g, then the death tax or a wealth tax or some other means is needed to limit wealth inequality.
    - fsniper 12y ago
      I meant "debt escaping". Being a foreigner I made a bad typo. I don't know really the term used in English, that's a way to evade debt by transferring funds to someone else.
      - dalke 12y ago
        Unless you regard all taxes as debt, this meant to keep people from escaping from paying taxes, not paying debts. Here's a variation of the earlier scenario. I have a company. I give people gifts of US $40,000, with no strings attached. It happens to be that, in their free time, they volunteer at my company to help me out with my business, and spend about 35 hours a week in volunteer labor. Is this really a "gift" that shouldn't be taxed at all? If so, it's a way to avoid employment and income taxes. To prevent that from happening, the gift taxes are going to have to be at least as high as employment-related taxes would be. Since the gift tax doesn't kick in until $14,000/year, which is under minimum wage, the gift tax for higher valued gifts must be much higher than employment taxes. Otherwise it will still be used to avoid employment and income taxes.
ceejayoz 12y ago
It's really only applicable to folks giving pretty large amounts to their families. He and his wife can gift each kid (as well as any number of other individuals, it seems) $28k/year tax-free. http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States > There are two levels of exemption from the gift tax. First, gifts of up to the annual exclusion ($14,000 per recipient as of June 2013) incur no tax or filing requirement. By splitting their gifts, married couples can give up to twice this amount tax-free. Note that each giver and recipient pair has their own unique annual exclusion; a giver can give to any number of recipients and the exclusion is not affected by other gifts that recipient may have received from others.[7] > Second, gifts in excess of the annual exclusion may still be tax-free up to the lifetime estate basic exclusion amount ($5,340,000 in 2014), although for estates over that amount such gifts might increase estate taxes. Taxpayers that expect to have a taxable estate may sometimes prefer to pay gift taxes as they occur, rather than saving them up as part of the estate. > Furthermore, transfers (whether by bequest, gift, or inheritance) in excess of $1 million may be subject to a generation-skipping transfer tax if certain other criteria are met.

by fsniper 12y ago

dalke 12y ago

The gift tax exists to prevent estate tax avoidance. Is your view that on principle estate and gift taxes shouldn't exist? I am philosophically against inherited capital accumulation, so think it should exist. FWIW, only those who have given over $5.43 million of gifts in their lifetime pay the gift tax in the first place. Woz is by all accounts a generous person. While generous, this also reduced the size of his taxable estate by quite a bit. In addition, each parent can give a child up to $14K tax free (now; $10K then). Spouses can give gifts to each other tax free. If I read it right, each of Woz's children probably received up to $20K in a year without paying gift taxes, though he only mentions the $10K from him personally. This gambling win would have been on top of that $20K. It's hard for me to be concerned about 12 year olds making 20K/year tax-free.

fsniper 12y ago
I do not understand the rational after estate tax. It may be rational to prevent "depth escaping" in many cases but in death? I think most of the time some illegal activities or workarounds are used as subtext by government to take some more cut.
- dalke 12y ago
  I don't know what you mean by "death escaping." I don't know what illegal activities you are referring to in this matter. The Wikipedia page http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States http://en.wikipedia.org/wiki/Estate_tax_in_the_United_States has a pretty complete coverage of the points both for and against the estate tax. While the gift tax is, in the US, closely coupled to the estate tax, they are distinct things. I made an error in not mentioning income tax as well was the estate tax. Gifts could be used to get around income tax. If I pay my children to work in my store, then they pay income tax. If however I give them gifts, and they just happen, out of generousness and familial good will, happen to do the same amount of work as an employee, then that's an illegal scheme to avoid paying income tax. Estate taxes are a reflection of a philosophical viewpoint, which is that inherited wealth is not as good for the country's well-being as wealth from labor. Consider if I were to own 1/5th of the land of Manhattan, and make money from leasing out the properties. If there were no wealth tax, then I could pass that land to one of my children, who then passes it on to one of my grandchildren, etc. Wealth like that tends to accumulate, and lead to increased economic inequality. The philosophical viewpoint is that a humane society does not have drastic differences between the richest and poorest people. In addition, this would tend to create de facto nobility, or landed gentry, which is something the US has traditionally opposed. If Picketty is right, and r > g, then the death tax or a wealth tax or some other means is needed to limit wealth inequality.
  - fsniper 12y ago
    I meant "debt escaping". Being a foreigner I made a bad typo. I don't know really the term used in English, that's a way to evade debt by transferring funds to someone else.
    - dalke 12y ago
      Unless you regard all taxes as debt, this meant to keep people from escaping from paying taxes, not paying debts. Here's a variation of the earlier scenario. I have a company. I give people gifts of US $40,000, with no strings attached. It happens to be that, in their free time, they volunteer at my company to help me out with my business, and spend about 35 hours a week in volunteer labor. Is this really a "gift" that shouldn't be taxed at all? If so, it's a way to avoid employment and income taxes. To prevent that from happening, the gift taxes are going to have to be at least as high as employment-related taxes would be. Since the gift tax doesn't kick in until $14,000/year, which is under minimum wage, the gift tax for higher valued gifts must be much higher than employment taxes. Otherwise it will still be used to avoid employment and income taxes.

ceejayoz 12y ago

It's really only applicable to folks giving pretty large amounts to their families. He and his wife can gift each kid (as well as any number of other individuals, it seems) $28k/year tax-free. http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States http://en.wikipedia.org/wiki/Gift_tax_in_the_United_States > There are two levels of exemption from the gift tax. First, gifts of up to the annual exclusion ($14,000 per recipient as of June 2013) incur no tax or filing requirement. By splitting their gifts, married couples can give up to twice this amount tax-free. Note that each giver and recipient pair has their own unique annual exclusion; a giver can give to any number of recipients and the exclusion is not affected by other gifts that recipient may have received from others.[7] > Second, gifts in excess of the annual exclusion may still be tax-free up to the lifetime estate basic exclusion amount ($5,340,000 in 2014), although for estates over that amount such gifts might increase estate taxes. Taxpayers that expect to have a taxable estate may sometimes prefer to pay gift taxes as they occur, rather than saving them up as part of the estate. > Furthermore, transfers (whether by bequest, gift, or inheritance) in excess of $1 million may be subject to a generation-skipping transfer tax if certain other criteria are met.