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Is Bush a moron? <keep flames down pls>

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I have been thinking this over for a while now.

I don't remember hearing anything about the debt when certain people on the hill want to increase spending to failing programs.

The debt is being paid down and I recently heard a quote on the news that Greenspan's recomendation was to not pay off the debt to soon because of the bonds that must be allowed to mature other wise will cause real damage
to the economy.

I'm not an economist, and I don't have the understanding that Greenspan does and that is the reason that Greenspan is in the position he is in.


DD
 
You can use the surplus to simply refrain from issuing new notes that would replace the old notes maturing each year. That seems to make sense to me. The government is still refinancing maturing debt every month, just less of it. Don't business owners try to retire their debt in the good times?

Greenspan wants an orderly retirement of the debt. The government does not have enough surplus to retire it all at once. He agreed that tax cuts could be undertaken only because he said current projections indicate there might be enough future surpluses to retire the debt and provide for some tax cuts.

What many people ignore is that he also wants Congress to impose an automatic trigger to shut off the tax cuts if the projected surpluses fail to appear. He also strongly criticized the Republican-controlled Congress for approving a 2001 budget which was $35 billion more than what Slick Willy asked for. He is critical of their inability to stop spending. He hopes that paying off the debt and a limited tax cut would put the pressure on Congress to hold spending in check.
 
<<He agreed that tax cuts could be undertaken only because he said current projections indicate there might be enough future surpluses to retire the debt and provide for some tax cuts. >>

That was my only point, and it was only made to let people know how it
can be that they can give a tax cut, and spend at the same time and this
quote re-enforces my side of the debate.

<<What many people ignore is that he also wants Congress to impose an automatic trigger to shut off the tax cuts if the projected surpluses fail to appear.>>

A trigger sounds like a good idea, but, what happens when congress simply starts spending to the point that the trigger be used?


DD
 
Tagej: &quot;we are talking about wealth that has already been taxed&quot;

Not true. Many of the wealthy acquired most of that wealth as a result of appreciated assets, particularly the stock in their own companies. The appreciated wealth is not taxed until the asset is sold. If the asset is still in the estate at death, it is not subject to income tax, and the value basis is stepped up for the heirs, so they can sell it tax-free. Therefore, the only tax it would ever be subject to is the estate tax.

A tax attorney I know is salivating over the potential repeal of the estate and gift tax. He says wealthy younger people would &quot;gift&quot; appreciated assets to their elderly, near-death parents. At their death, the assets would be willed back to the children at a stepped up value. They could be sold and no tax, either income or estate, would ever be paid. Unfortunately, this will only matter to the very rich. Most of us don't have millions or billions tied up in appreciated securities. Note that this also means there is zero reinvestment in business going on under this scenario. Large asset holders just pay less taxes.
 


<< Only the portion that goes to these charities escapes the estate tax. What is left still gets hit by the estate tax. >>




This simply isn't true. Only about 11% is required to go to charities, while the whole amount of the fund is estate tax free The rest can be pulled out as income for the &quot;managers&quot; of the fund, in other words, the trust babies. Thus the way these are set up is that all the estate went into these funds, then the heirs &quot;manage&quot; these funds for a set income that comes from the fund. Now there is a cap on the size of these funds, but many of these wealthy families got in before the cap and so have literally huge charitable remainder trusts worth hundreds of millions of dollars, that pass from generation to genaration estate tax free and serve out salaries to all the family members until the fund dries up (which never happens). Ask any good estate planner, and she or he will verify this.



<< To pay the estate tax bite, many also buy life insurance in a special-purpose trust with the proceeds to be used for paying the estate tax >>




i think you are referring to second-to-die policies. These do exist and are one way to taking care of estate taxes, b/c of caps places on charitable trust funds nowadays. However there are plenty of other smarter wise to dodge estate taxes completely.
 
desertdweller - During his Senate testimony, Greenspan was asked point-blank to endorse GWB's tax plan, and he declined. He thinks some tax cuts are okay, but his number one goal still remains paying off the debt. I think that's a very prudent way to look at it.
 
It always amazes me how people defend the government taxing its citizens to death. Think how many times your money is taxed from the time you earn it till the time you die. When you first get your paycheck and look at the stub you have,

Federal Income Tax
Social Security Tax
State Tax
Medicare Tax (Not sure what this one is but they take it)😕

Then you stop at the WAWA on the way home to get gas (Taxed), a pack of smokes (Taxed), and some Beer (taxed plus pay sales tax on beer and smokes). Then you head on over to McDonalds to get a hamburger and fries (Sales tax and meal tax). When you finally get home and look at your fine house and your cool little Bass Boat (property tax, sales tax, and Registration fees for boat). You walk in sit in you LazyBoy (sales tax) to watch some TV (sales tax, franchise tax on cable plus FCC fee), and your friend calls you on the phone (taxed).
What really bothers me is paying so much tax for no real benefit to me. Then when I die having them take more tax after my money has already been taxed, kind of irks me.
Jim (Tax Hater):|
 
Raspy - With a charitable remainder trust, all of the remaining principal reverts to the charity. The income beneficiaries of the trust are limited to a certain amount they can be paid each year. And that income is taxed as ordinary income to them, so it does not completely escape taxation. If there is substantial appreciation in the assets, the benefit will go to the charity, not the income beneficiaries.
 
I wouldn't say that he's a moron, but I do have my doubts about him being the president. OF course, Gore wouldn't have done much better either.

But I do like what Bush plans on doing with our military. 🙂
 
Kilgor - Unless your estate (net of all debts) is worth more than $650,000 (soon to be $1 million even with no further action by Congress), don't worry much about the estate tax.

As for your income, sales and other tax complaints, they are probably topics for a different thread.
 
<< Firstly, under Bush's plan, the government will not be giving any money to anyone. I think that some people haven't quite grasped the concept of taxation. The government gives nothing, it only takes away. >>

This is a fundamental difference between Is and Rs and Dems. Tom Dashle (D) says, &quot;We believe giving back $900 billion is fair.&quot;. All Is and Rs say, &quot;The government will take $1.6 billion less.&quot;.

What Corn is saying is utter truth and I'll repeat it, &quot;The government gives nothing, it only takes away&quot;. I say cut off the thief's hand.

That said, the income disparity between low wager earners and the wealthiest in our land is like 50x+ what it was at the turn of the century. America demands a mandated balance (well the &quot;have nots&quot; do anyway.) So until this gap narrows considerably the wealthiest will have their income redistributed all in &quot;good fairness&quot;.

It is wrong but returning to serfdom isn't the answer either.
 


<< The income beneficiaries of the trust are limited to a certain amount they can be paid each year. And that income is taxed as ordinary income to them, so it does not completely escape taxation. If there is substantial appreciation in the assets, the benefit will go to the charity, not the income beneficiaries. >>




very true re: income taxes.. I didn't mean to imply that the income escape income taxation. However the trust income allowances are fairly high (IMO). Also even as assets appreciate, new &quot;managers&quot; can be added, so that asset appreciation benefits heirs down the line. Also, these individuals don't really need a lot of income. Fpr example, these trust funds can own assets (as you already know) and can own the houses, etc of these very wealthy inidividuals. Thus the property taxes of these homes comes directly out of the fund itself, not out of the income of the heirs. Thus they don't use taxed income on these type of expenses like the rest of us.
 
Sorry to repeat, but I wonder if anyone finds this gambit as distasteful as I do:

Tagej: &quot;we are talking about wealth that has already been taxed&quot;

Not true. Many of the wealthy acquired most of that wealth as a result of appreciated assets, particularly the stock in their own companies. The appreciated wealth is not taxed until the asset is sold. If the asset is still in the estate at death, it is not subject to income tax, and the value basis is stepped up for the heirs, so they can sell it tax-free. Therefore, the only tax it would ever be subject to is the estate tax.

A tax attorney I know is salivating over the potential repeal of the estate and gift tax. He says wealthy younger people would &quot;gift&quot; appreciated assets to their elderly, near-death parents. At their death, the assets would be willed back to the children at a stepped up value. They could be sold and no tax, either income or estate, would ever be paid. Unfortunately, this will only matter to the very rich. Most of us don't have millions or billions tied up in appreciated securities. Note that this also means there is zero reinvestment in business going on under this scenario. Large asset holders just pay less taxes.
 
Raspy - The property taxes are a bad example. Anyone who itemizes doesn't use taxed income to pay them anyway.
 
there are many individuals who own appreciating securities.

jjm: &quot;The income beneficiaries of the trust are limited to a certain amount they can be paid each year. And that income is taxed as ordinary income to them, so it does not completely escape taxation. If there is substantial appreciation in the assets, the benefit will go to the charity, not the income beneficiaries.&quot;

Very true re: income taxes. I didn't mean to imply that the income escape income taxation. However the trust income allowances are fairly high (IMO). Also even as assets appreciate, new &quot;managers&quot; can be added, so that asset appreciation benefits heirs down the line. Also, these individuals don't really need a lot of income. Fpr example, these trust funds can own assets (as you already know) and can own the houses, etc of these very wealthy inidividuals. Thus the property taxes of these homes comes directly out of the fund itself, not out of the income of the heirs. Thus they don't use taxed income on these type of expenses like the rest of us
 
jjm, pick any asset you want, it doesn't have to be a home. None of the expenses assocaited with any of the assets come out of the income of these individuals. Nor do most people have their assets protected generation to generation in this manner. You do see now how that not only charitable portions of an estate remain estate tax free when planned correctly, don't you?
 
first off, holy sh!t that was alot of responses in a matter of three hours...

thanks for the info &amp; links [as well as the lack of flaming]. Only got a second now (@ school) but I still haven't seen a good answer as to why this tax cut is going to the rich first. Anyone care to answer that?
 
oops. 🙁

Oh, I said it already, No.

I do believe in giving someone a fair chance. I think everyone should just do that.

He's got 4 years to work. No need in bashing him before he even get's started.
 


<< Estate tax is my nemesis. I refuse to die! You have to give everything away now--I really don't understand this. I bought it, I paid a tax on it, I want to live with it, I want it in my house. They say: &quot;No, no, no.&quot; If you have it in your house and you croak, your family has to pay for it. And I say: &quot;We already paid for it! What is this? Layaway?&quot; And then you've got to make all these things, foundations and stuff. This is ridiculous! I want to give the painting I bought to my daughter--I want to pass some stuff on. >>


Whoopi Goldberg
 
Raspy - Whenever the trust is liquidated, any assets not passed along to the charity are taxed. Some trusts can last for a long time, but they will have a finite life, or they would not qualify as a charitable remainder trust. And any assets distributed during the life of the trust are taxed to the receivers based on the cost when they were contributed.

Trusts enable some people to delay taxation, but they don't avoid taxation unless the assets are passed to tax-exempt entities. And charitable remainder trusts are very expensive to establish and maintain, so they are out of reach for almost everyone but the very wealthy.

Separately, lots of these loopholes have been closed in the past 15 years. I suspect these will be attacked as well.
 
I think it is instructive that the Time article noted that the estate tax hits less than 48,000 people each year, but its repeal would contribute $236 billion to the $1.6 trillion tax cut that GWB is proposing. In other words, 15% of GWB's tax cut comes from repealing the estate tax, and it's a tax that appears to hit only the super-rich! $1.364 billion is left for the the cuts in rates, marriage penalty, etc. If you buy Raspy's argument that the wealthy have the means to cook up ways to minimize their tax bite anyway, why are we so inclined to just erase this?

And, as I noted above, erasing the estate tax may enable the rich to avoid paying any taxes at all on their accumulated wealth. No income tax, no estate tax, nada.
 
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