Taxing money earned through inheritance less than money earned through labor is (death, government)
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disgusting. How can any rationale human being support this?
FROM pragCAP:
BUFFETT: I have yet– and I’ve worked with capital gains rates of 39.9 percent and 36 percent and 25 percent, I have yet to hear one person say to me, “If I call you in the middle of the night Charlie and I say Charlie I’ve got this hot investment idea.” Your reaction is not to say “No matter what the tax rate, forget it, I’m going back to sleep because the capital gains rates are too high.” No, what you’re going to do is you’re going to say, “Tell me the name, quick, Warren, before you change your mind.” And you know, I have never had one person decline to invest with me. ROSE: Yes. BUFFETT: And I was running money 40, 50 years ago when rates were much higher and I never had one person to show the slightest reluctance to take an investment idea and run with it.
The point Buffett is making is that people don’t rule out broad investment decisions because of capital gains. They might play a role, but how many times have you flat out decided not to buy a stock, bond or invest in something else solely because of the tax implications? My guess is not very often. Making money in the investment world is the goal. The government gets a cut. Those are just facts of life. If you build portfolios entirely around taxes then you’re likely neglecting the more important part of portfolio building – the actual money making strategy! This doesn’t mean taxes don’t matter, but I don’t think a cap gains rate of 25% is going to suddenly cause Americans to stop investing in corporate America….
It's already been taxed when it was originally earned, so it'd be taxed more even at an inheritance tax of 1%
Most inherited money is in trusts where in theory one day it will be cashed out and subject to 15% capital gains taxes. Additionally, you are quite naive to think most inherited money has been 'taxed'.
Most inherited money is in trusts where in theory one day it will be cashed out and subject to 15% capital gains taxes. Additionally, you are quite naive to think most inherited money has been 'taxed'.
Then you're talking about capital gains, not inheritance tax. Your issue is with the lower rate paid on those gains.
The money will be or was in the past taxed at the same rate it would be if earned by the inheritor directly, whether that be the income rate or capital gains rate. So your premise is flawed from the beginning since you singled out inheritance.
Then you're talking about capital gains, not inheritance tax. Your issue is with the lower rate paid on those gains.
The money will be or was in the past taxed at the same rate it would be if earned by the inheritor directly, whether that be the income rate or capital gains rate. So your premise is flawed from the beginning since you singled out inheritance.
Then you are wrong as well, as capital gains taxes are applied to the gains...not the basis. If you invest $1,000 and it becomes $2,000 then you are only taxed on the $1,000 gain. It's the first sentence in the gains tax law.
In the first place, why tax inheritance at all? Theoretically, that money's already been taxed.
But, aside from that, I fail to see the linkage between your thread title and first comment and the quotation you offered. They're two entirely different subjects.
Then you are wrong as well, as capital gains taxes are applied to the gains...not the basis. If you invest $1,000 and it becomes $2,000 then you are only taxed on the $1,000 gain. It's the first sentence in the gains tax law.
Really?
I never said otherwise. I never asserted that the basis of the inheritance was taxed, I asserted that it shouldn't necessarily be.
Quote:
Originally Posted by TheEssex
Most inherited money is in trusts where in theory one day it will be cashed out and subject to 15% capital gains taxes. Additionally, you are quite naive to think most inherited money has been 'taxed'.
How did it get into the trust? Did it fall from the sky? It was earned at some point. I'm not talking about death taxes or estate taxes if that's what you're referring to.
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As far as Warren Buffett goes, he can shove his PR crap. No, higher capital gains taxes will not destroy all investment, but they will decrease ROI and therefore necessarily impede investment to some degree.
It's not a black and white thing, but anyone who thinks there's anything even resembling a linear relationship hasn't looked at rates and revenue over the last 50 years.
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