Puterbac News Network and Political Discussion Thread

[Professor Tiger]

I knew someone of decent means who started emptying accounts a few years before his death. Upon his death, each of his four children got a suitcase with a bit more than a $700k in it with detailed instructions on how to launder it.

Hush! The IRS will give you a proctoscopic audit just to find out what all you know to help them build their case.

[Johnette's Daddy]

What is it about death that entitles the government to takes the dead person's money?

Entitled? The govt can tax anything it wants as long as it's for the general welfare. Some things I agree with, some I don't. But it's not about entitlement. They are entitled under the Constitution including it's Amendments.

All of the writers of the Constitution were against dynastic fortunes. They didn't want America to become a land of feudal lords & Oligarchs (like 18th century Europe) living off of the work of long dead ancestors and pretending like they were made of a finer grade of clay instead of actually contributing to society and the economy. Moreover, estate taxes are the least disruptive to the economy. Yes, in order to avoid getting killed, you have to plan, but the folks who are subject to the estate tax have so much money that they should have top quality planners making provisions for the tax.

As for the guy who left each of his kids 700K in a shoebox, he's a dipshit - 700K isn't subject to the tax.

[Cletus]

It depends when this happened. The exemption was less than $1M before 2001 and around $1-2M for the rest of the Bush admin. It's only in recent years that the exemption amount jumped up to $5M. So, if these suitcases were his entire estate, a portion of it would have been taxed not that long ago. If this happened since 2010, then he wasted his time.

[AlabamAlum]

The suitcases were not the entire estate. It was before 2010 and the cash dispersal was to drop it below.

[Johnette's Daddy]

It depends when this happened. The exemption was less than $1M before 2001 and around $1-2M for the rest of the Bush admin. It's only in recent years that the exemption amount jumped up to $5M. So, if these suitcases were his entire estate, a portion of it would have been taxed not that long ago. If this happened since 2010, then he wasted his time.

Depending on how long the 700K sat in the suitcases - if he had 2.8 million invested at a modest 6% from 2001 to 2006, that's about 3.75 million. Assuming that's all of his assets, take out the $2 million exemption for 2006 and you have 1.75 million taxed at 46% or 805K in taxes. So with the 2 mil exemption and the 945K after taxes, he actually cheated his kids out of about 35K each.

If the 2.8 million was in addition to the exempted amount (let's call it 1 million in 2001), then in the man's scenario, the kids get 950K each (3.8M/4). Had he invested the 2.8M, they'd have gotten 870K each ([2M +(2.75*54)]/4) - a clear 80K win - but add in the time/cost of laundering the money, the risk (what if the suitcases were in a basement and the pipes burst - paper money can rot/mildew) - and it may not be that great a win,

More to the point, why put the 700K in suitcases and store it? Why not just give it to the kids and have them/help them launder it while you're still alive?

[Owlman]

Correct.

I also disagree with the idea that all personal wealth belongs to the government, and private citizens should be grateful for whatever the government allows us to keep. Constitutionally, it's supposed to be the other way around.

All personal wealth doesn't belong to the govt. Don't know where you got that idea. We the people require that we the people pay some taxes to provide for the common defense, to promote the general welfare, to insure the blessings of liberty for ourselves and our posterities. That's our govt and our govt run by us, as much as I complain about my, our govt.

[Jungle Rat]

Stay away from my cash you thieving pirates.

[sardis]

"All of the writers of the Constitution were against dynastic fortunes"

Yet, no inheritance tax was passed until the 1900's.

If ever in this country's history were we the closest to having dynasties, was in the early years of formation. Be honest, the reason we have an inheritance tax is not because of the threat of dynasties or feudal lords, it's because more money is needed to fund the overexpansion of government.

[Toemeesleather]

One need look no further than the dynasties of Kennedy...Clinton....and now Obama to see how "tax" has morphed to "transfer"

[AlabamAlum]

It depends when this happened. The exemption was less than $1M before 2001 and around $1-2M for the rest of the Bush admin. It's only in recent years that the exemption amount jumped up to $5M. So, if these suitcases were his entire estate, a portion of it would have been taxed not that long ago. If this happened since 2010, then he wasted his time.

Depending on how long the 700K sat in the suitcases - if he had 2.8 million invested at a modest 6% from 2001 to 2006, that's about 3.75 million. Assuming that's all of his assets, take out the $2 million exemption for 2006 and you have 1.75 million taxed at 46% or 805K in taxes. So with the 2 mil exemption and the 945K after taxes, he actually cheated his kids out of about 35K each.

If the 2.8 million was in addition to the exempted amount (let's call it 1 million in 2001), then in the man's scenario, the kids get 950K each (3.8M/4). Had he invested the 2.8M, they'd have gotten 870K each ([2M +(2.75*54)]/4) - a clear 80K win - but add in the time/cost of laundering the money, the risk (what if the suitcases were in a basement and the pipes burst - paper money can rot/mildew) - and it may not be that great a win,

More to the point, why put the 700K in suitcases and store it? Why not just give it to the kids and have them/help them launder it while you're still alive?

He was brilliant, and in his profession he dealt with taxes extensively. As to how long he liquidated accounts, or stored money, I have no idea. He didn't really publish his timeline. I can only assume he did the math correctly to maximize the windfall.

[Dr. Strangelove]

"All of the writers of the Constitution were against dynastic fortunes"

Yet, no inheritance tax was passed until the 1900's.

If ever in this country's history were we the closest to having dynasties, was in the early years of formation. Be honest, the reason we have an inheritance tax is not because of the threat of dynasties or feudal lords, it's because more money is needed to fund the overexpansion of government.

Disagree...it was in the late 1800's-early 1900's pre-income tax. The Vanderbilts, Rockefellers, Astors, Goulds, Fords, Mellons, Morgans, Fricks, Fields, etc. etc.

[Dr. Strangelove]

One need look no further than the dynasties of Kennedy...Clinton....and now Obama to see how "tax" has morphed to "transfer"

How about the Bush family too as we are possibly about to get a third Bush thrown at us. They are far more of a dynasty than Obama's family is

[AlabamAlum]

"All of the writers of the Constitution were against dynastic fortunes"

Yet, no inheritance tax was passed until the 1900's.

If ever in this country's history were we the closest to having dynasties, was in the early years of formation. Be honest, the reason we have an inheritance tax is not because of the threat of dynasties or feudal lords, it's because more money is needed to fund the overexpansion of government.

Disagree...it was in the late 1800's-early 1900's pre-income tax. The Vanderbilts, Rockefellers, Astors, Goulds, Fords, Mellons, Morgans, Fricks, Fields, etc. etc.

He said 1900's. You disagree and say late 1800's/early 1900's. That hardly seems like a bone of contention.

And while you named some extremely rich men, you now have Gates, Buffett, the Koch family, the Walton family, Sheldon Adelson, Larry Ellison, Bloomberg, Zuckerberg, Icahn, Bezos, etc, etc..whom I assume have compatible cash as the ones you named.

[Dr. Strangelove]

AA- He said the closest America has ever had to having 'dynasties' was during the early days of formation. I'm assuming he means 1776-1820 or thereabouts. I disagree with that.

[AlabamAlum]

I see what you meant now.

[Professor Tiger]

How about the Bush family too as we are possibly about to get a third Bush thrown at us.

Even if we get a third Bush thrown at us, he will never be Bush 45. The only thing less desirable to the American voter than a second Clinton is a third Bush. As JD once said:

"Bush" = cause of recessions, ill-conceived/futile wars.
"Clinton" = booming economy, sex in the workplace.

Advantage: Clinton.

[Toemeesleather]

One need look no further than the dynasties of Kennedy...Clinton....and now Obama to see how "tax" has morphed to "transfer"

How about the Bush family too as we are possibly about to get a third Bush thrown at us. They are far more of a dynasty than Obama's family is

Of course you add the Bush family...Harry Reid....the list is getting bigger and bigger...point about Obamas is they have really built more/quicker than the Bush or Clinton dynasty....and I was using "dynasty" as a synonym for wealth.

[Johnette's Daddy]

One need look no further than the dynasties of Kennedy...Clinton....and now Obama to see how "tax" has morphed to "transfer"

How about the Bush family too as we are possibly about to get a third Bush thrown at us. They are far more of a dynasty than Obama's family is

Of course you add the Bush family...Harry Reid....the list is getting bigger and bigger...point about Obamas is they have really built more/quicker than the Bush or Clinton dynasty....and I was using "dynasty" as a synonym for wealth.

Straw argument. I'm talking about dynastic fortunes.

*Conrad Hilton (1887) - his celebutramp granddaughter Paris' trust fund was worth over $100M when she started making sex tapes. Family still has a $700M stake in Hilton Hotels, plus other interests in the billions. Conrad's son, Barron, was a solid businessman and philanthropist. Of the current generation of Hiltons, Paris is the productive one - the rest are slackers and ne'er-do-wells.

*Franklin Mars *1883) - founded the candy company, family worth about $30 billion. They stay out of the limelight . . . but part of a Billionaire families group that spent a reported 500 million dollars lobbying Congress for the elimination of estate taxes.

Et cetera.

We didn't have income or estate taxes in 1787 because we relied on tariffs - we sent out raw resources (cotton, lumber, sugar) in exchange for manufactured goods that we taxed. Once we became better than everyone at manufacturing, tariff income dropped because we didn't want high tariffs put on the stuff we sent out. Hence, we needed other forms of income. We did have a history almost from the beginning of using income and estate taxes to fund wars. As our business interests overseas grew, so did our military budget.

Except for the Civil War, the US spent next to nothing on its military from 1787 to 1917. It spiked at WWI, but between WWI and WWII, it went back down to negligible. Since WWII, it's been ginormous. Part of the Clinton boom was the relative decrease in defense spending during that era (the "Peace dividend" that Reagan promised, ironically).

We've tried various forms of "use" taxes (toll roads, drilling fees, etc.), but people whine and moan, regardless - like your rancher buddy in Nevada.

[Owlman]

http://www.neatorama.com/2008/07/09/10- ... es/#!IPvyu

Value of John D. Rockefeller in today's terms: Peak wealth: $318.3 billion (based on 2007 US dollar). Age at peak wealth: 74
Andrew Carnegie: Peak wealth: $298.3 billion. Age at peak wealth: 68
Nicholas II of Russia: Peak wealth: $253.5 billion. Age at peak wealth: 49 (don't like including him because it's not built on his business)
William Henry Vanderbilt: Peak wealth: $231.6 billion. Age at peak wealth: 64
Osman Ali Khan, Asaf Jah VII: Peak wealth: $210.8 billion. Age at peak wealth: 50 (before India invaded)
Andrew W. Mellon: Peak wealth: $188.8 billion. Age at peak wealth: 80
Henry Ford: Peak wealth: $188.1 billion. Age at peak wealth: 57
Marcus Licinius Crassus: Peak wealth: $169.8 billion. Age at peak wealth: 62
Basil II (a Byzantine emperor from the Macedonian dynasty who reigned from 976 to 1025): Peak wealth: $169.4 billion. Age at peak wealth: 67
Cornelius Vanderbilt (Dad of William): Peak wealth: $167.4 billion. Age at peak wealth: 82
He once wrote a short (and now famous) letter to Charles Morgan and C.K. Garrison of the Morgan & Garrison company. The two men manipulated his steamship company's stock in his absence and took it over. The letter read "Gentlemen: you have undertaken to cheat me. I won't sue you, for the law is too slow. I'll ruin you. Yours truly, Cornelius Vanderbilt." True to his words, two years later Vanderbilt forced them out of business by running a competing business.

Despite of their wealth - or perhaps because of it, the Vanderbilt family wasn't a happy one. The Commodore was constantly thinking of his will, which he called "that paper." He wanted the money to remain intact, and thus it must be handed down to a single heir. Indeed, he disowned all of his sons other than William (see above), believing that only William was ruthless enough in business to be capable of maintaining his empire.

[Johnette's Daddy]

http://www.neatorama.com/2008/07/09/10- ... es/#!IPvyu

Value of John D. Rockefeller in today's terms: Peak wealth: $318.3 billion (based on 2007 US dollar). Age at peak wealth: 74
Andrew Carnegie: Peak wealth: $298.3 billion. Age at peak wealth: 68
Nicholas II of Russia: Peak wealth: $253.5 billion. Age at peak wealth: 49 (don't like including him because it's not built on his business)
William Henry Vanderbilt: Peak wealth: $231.6 billion. Age at peak wealth: 64
Osman Ali Khan, Asaf Jah VII: Peak wealth: $210.8 billion. Age at peak wealth: 50 (before India invaded)
Andrew W. Mellon: Peak wealth: $188.8 billion. Age at peak wealth: 80
Henry Ford: Peak wealth: $188.1 billion. Age at peak wealth: 57
Marcus Licinius Crassus: Peak wealth: $169.8 billion. Age at peak wealth: 62
Basil II (a Byzantine emperor from the Macedonian dynasty who reigned from 976 to 1025): Peak wealth: $169.4 billion. Age at peak wealth: 67
Cornelius Vanderbilt (Dad of William): Peak wealth: $167.4 billion. Age at peak wealth: 82
He once wrote a short (and now famous) letter to Charles Morgan and C.K. Garrison of the Morgan & Garrison company. The two men manipulated his steamship company's stock in his absence and took it over. The letter read "Gentlemen: you have undertaken to cheat me. I won't sue you, for the law is too slow. I'll ruin you. Yours truly, Cornelius Vanderbilt." True to his words, two years later Vanderbilt forced them out of business by running a competing business.

Despite of their wealth - or perhaps because of it, the Vanderbilt family wasn't a happy one. The Commodore was constantly thinking of his will, which he called "that paper." He wanted the money to remain intact, and thus it must be handed down to a single heir. Indeed, he disowned all of his sons other than William (see above), believing that only William was ruthless enough in business to be capable of maintaining his empire.

I can buy that - but it would be a better story if he locked them all in a room and said the sole survivor gets it all.