The Political Junkie™ Thread - USA Edition

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**sebster**

The thing everyone has to realise about inheritance tax in the US is that the rate is actually really high compared to most of the rest of the world. It's also a tax that can be minimised to close to nothing if unless the wealthy person is a complete idiot, or they actually choose to pay the tax. For anyone who wants to minimise tax and is smart enough to hire someone who's read a 30 page chapter on estate planning, you can reduce the inheritance tax down to very little with some tax structures. Just use one of a bunch of acronyms, ILIT, GRAT or CLT and you'll end up paying something closer to 15%.

And that's actually the big problem with inheritance tax - as a tax on capital it's very easy to minimise the tax just by shifting your capital around and putting it behind legal structures. So government gets nothing like the money it would have wanted, but it does distort the market, producing byzantine trusts within shell companies that add unnecessary complexity and even make capital a lot less mobile than it ought to be.

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Kilkrazy wrote:
Can you really not see the difference between "earning" money by doing a job of work, getting paid for it, and being taxed on the income, and your parents giving a load of money when they die, and not being taxed on it?

You're getting caught looking just at just the transfer from parent to child. But transfers take place all the time, and they aren't taxed. I give you a present, there's no tax. The basic structure of every tax system is that you tax income. It then becomes clearly unfair to tax income, then tax it again when it is transferred to another person.

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jasper76 wrote:
Come on, people. Everybody knows being born is hard work.

You're adding a moral argument where no such thing exists. If you think wealthy people should carry a larger share of the burden, then argue for higher tax rates at high income. Don't argue for taxing income and then taxing it again, once as income once as capital, because you'd like rich people to pay more tax.

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Steve steveson wrote:
You could say the same about many other taxes. Sales tax for a start, taxes spending of money you have already been taxed on, but the point of it is (at least in the UK) luxury taxing. You tax people who can afford luxuries. The point of inheritance tax is the reduction on the pooling of wealth. The fact that the money is being taxed twice is irrelevant.

The issue with double taxation is not that money is taken twice. Given that, more or less, everyone earns their money and spends it, a system with a 28% average income tax and no sales tax is the same as a system with a 20% average income tax and 10% sales tax.

Double taxation becomes an issue when it opens the door to inconsistent treatment. I earn money, you earn money, and we both pay tax. But if I earn money, then die and give it to my kids, I get another whole tax levied on that money that you don't pay. It's double taxation for me, single taxation for you. Pretty clearly unfair.

There's also another issue that it inheritance tax works weirdly based on how many kids you've got. The basic idea is that trust fund kids should have to pay a bit to government, as they didn't earn that money. But it doesn't tax the amount each beneficiary gets, it just taxes the total estate. So if I have one kid, and leave them an estate worth $5m, there's no tax, despite my kid getting set up for life with $5m. But if I have $10m and four kids, that estate is taxed - inheriting $2.5m is nothing to sneeze at, but it's weird it gets taxed when the child of that other person got $5m untaxed.

**LordofHats**

sebster wrote:
I give you a present, there's no tax. The basic structure of every tax system is that you tax income. It then becomes clearly unfair to tax income, then tax it again when it is transferred to another person.

Not in the US (unless you're a spouse as far as I know). It's less talked about but large sum transfers between private persons are subject to gift tax. It actually came about to prevent people from giving their wealth away while alive/dying to circumvent the inheritance tax. This is of course why many wealth families have charities run by family members, as this offers an out both for estate and gift tax

With gift tax however it's the giver who gets the tax, which I actually think makes less sense than the receiver paying the tax but I don't write the tax code XD

If I did write the tax code, it would require all IRS personel to wear powdered wigs!

**sebster**

jmurph wrote:
The inheritance tax is a tax on a transfer of wealth and new income, just like most other income taxes.

No, income taxes require an amount to be earned, for their to be some use of labour, skill in order to be earned.

But then the US taxes gambling winnings and gifts, so really the problem starts to become one of a gakky tax code with no basic tax concepts.

Saying that the money had already been taxed is nonsensical- all money (except brand new issue) has "been taxed" and the subsequent recipient is taxed for the income.

You're getting confused talking about individual dollars, it isn't the notes and coins themselves, but the income producing transaction that matters.

People who argue against a "death tax" are, in reality, voicing concerns for the heirs of the very wealthy not getting enough. It's almost never a real issue as trusts are usually done to bypass the taxes entirely.

No, it's actually a technical matter of what makes for good tax policy. This argument that 'the rich needs to pay more, this makes the rich pay more therefore it is good' ignores the reality of how taxes operate in the real world, without considering there are plenty of good, tax effective ways to tax the rich more.

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whembly wrote:
Because Inheritance Tax is the most efficient means to redistribute wealth.

No, it's a terrible way to redistribute wealth. Any tax based on capital is terrible - easy to avoid and horribly subjective (I say my dead father's factory is worth $5m, govt says its worth $10m and so its off to court we go).

What galls most people is that the system sets an arbitrary line when the tax is kicked in... it smacks of envy.

No, the limit smacks of redistributing wealth away from people with many millions, because it's a basic reality of capitalism that immense wealth pools at the top, and so it becomes a basic part of every developed economy to re-distribute.

You love moralistic, loaded words like envy, but that's just applying judgement where none exists. We don't take from the rich because we're envious - making them pay a 15% tax and they'll still have loads more money, if it was about envy we'd take everything. No, it's a simple product of deciding that as a society we will pay for basic goods and services for those who can't afford them, and to pay for that we'll take money based on what people can pay, and the rich can pay more.

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CptJake wrote:
Your Eco 101 was different. I could start up a factory and generate 10s of thousands of horse buggies or millions of vacuum tube radios, creating a massive supply of them. That supply would not create a demand for those items.

Sure, you could, if you decided to be an idiot. Most people, most business owners, don't decide to be idiots. They respond to the demand that exists, provide the products that people will buy. That's such a basic thing we won't even see it stated in economic models as an assumption, because holy crap of course it isn't.

Do you seriously not understand this, or are you just giving smart alec answers? Because if it's the latter I'll crack out the Econ 101 and go through a widgets and sputniks example and we can all refresh our highschool economics. But if it's the latter and you just don't want to admit you got caught up arguing one side of a very argument, then just say that and we can move on.

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WrentheFaceless wrote:
Not sure how inheritance tax is any different than being taxed on lottery winnings. Being born lucky is basically winning the lottery and they tax the hell out of lottery winnings.

The point, though, is that lottery winnings shouldn't be taxed either. Taxing dumb luck is ridiculous. Should I get a tax deduction for playing the lotto and losing? If we have a private bet for $100k on the outcome of a coin toss, should the winner be taxed? Should the loser by given a tax deduction?

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Prestor Jon wrote:
The federal government has been operating at a loss for decades because the majority of the money it spends is borrowed and taxes are just used to pay the debt service.

Right now about 1/7 of spending is debt funded, 6/7 are paid for by taxes. As 1/7 is not a majority, it must be concluded that you have no idea what you're talking about.

And 7.6% of revenue is used to pay interest on debt, making your statement that taxes are just to pay the debt service is utter nonsense.

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whembly wrote:
That dynamic could also be said a bit about Sanders' rise as well... no?

That was really good, thanks. As to whether it applies to Sanders or not, I'm not sure its the right question. I'm not saying it doesn't apply, more that the question doesn't lead to any great insight in to Sanders' appeal.

I mean, really, Sanders is telling people they can have cheaper education and free health. For people concerned about those things, it isn't hard to see the appeal. Whether those things are practical is a whole other debate, but in terms of establishing Sanders appeal it's pretty straightforward.

Whereas with Trump, there was a whole question of exactly what it was that was appealing to people. The easy answer was racism, because Trump said some racist things. But it's a cheap answer really, and one that doesn't really line up with voter feedback. But if we look at the rest of his platform, there's just not much there, and if we ask Trump voters to explain his policies, there's even less there.

That's where your posted article is excellent, I don't agree with all of it, but it does get at what is probably the centre of Trump's appeal - 'it's the culture, stupid'. Trump doesn't talk and act like a politician, he talks and acts like a regular blowhard sounding off about politics. For the most part he wouldn't be out of place on dakka.

There's a great term 'affinity fraud'. It describes the trick of con men to make themselves appear to be just the same as you, because then you're more likely to believe them. Bernie Madoff got away with his scam for decades because he was just like the wealthy elite he took money from - were he an outsider they almost certainly would have looked much harder, much sooner.

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LordofHats wrote:
That was probably one of the best candid articles I've seen written about Trump the entire primary season, and I think it does apply to Sanders as well.

I think the reason Sanders hasn't blown up in the same manner as Trump is probably two fold.

Sanders is winning about 40%, the same as Trump. The difference is that the Democrats have a single inside candidate, while the Republicans were split among many.

**whembly**

sebster wrote:

whembly wrote:
Because Inheritance Tax is the most efficient means to redistribute wealth.

No, it's a terrible way to redistribute wealth. Any tax based on capital is terrible - easy to avoid and horribly subjective (I say my dead father's factory is worth $5m, govt says its worth $10m and so its off to court we go).

Okay... now wasn't it a few years ago that you and I tussled over this very topic? You arguing the virtue of this and me bitching about it?

I'm too lazy to look back though...

**sebster**

LordofHats wrote:
Not in the US (unless you're a spouse as far as I know). [url="https://en.wikipedia.org/wiki/Gift_tax_in_the_United_States"]

You know, I actually thought about saying something gifts up to a certain amount, then decided against it because then that'd just lead back to 'and there's inheritance tax up to a certain amount', and thought it'd be cleaner to say 'birthday gift', because most people understand birthday gifts as being under $10,000.

It was a nice solution, or would have been if I'd remembered to go back and add 'birthday' to my answer before posting

It actually came about to prevent people from giving their wealth away while alive/dying to circumvent the inheritance tax. This is of course why many wealth families have charities run by family members, as this offers an out both for estate and gift tax With gift tax however it's the giver who gets the tax, which I actually think makes less sense than the receiver paying the tax but I don't write the tax code XD

Yep. And having a gift tax that works to enforce the inheritance tax doesn't make the inheritance tax okay, it just shows why both taxes are bad.

If I did write the tax code, it would require all IRS personel to wear powdered wigs!

I'd make them all wear berets and Che Guevara shirts.

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whembly wrote:
Okay... now wasn't it a few years ago that you and I tussled over this very topic? You arguing the virtue of this and me bitching about it?

I'm too lazy to look back though...

I don't think so, I've never liked inheritance tax. It's a dysfunctional way of generating tax revenue.

If you look at my (admittedly many) posts to different people, you'll see I'm coming down pretty strongly against the tax. I was just picking you up on one argument - that inheritance tax is efficient. It isn't because the value of any piece of capital other than stocks is so subjective, and because capital can be structured in so many ways to avoid capital taxes.

Then there was that other bit where you were saying it was envy to tax the rich. We've tussled on that many times

**whembly**

I missed your update Lordy...

LordofHats wrote:

whembly wrote:

That dynamic could also be said a bit about Sanders' rise as well... no?

That was probably one of the best candid articles I've seen written about Trump the entire primary season, and I think it does apply to Sanders as well.

Kinda makes you cry that Trump's the perfect opponent for Clinton or Sanders.

I think the reason Sanders hasn't blown up in the same manner as Trump is probably two fold. The innate conflicts that give Trump so much popularity in the electorate, are also conflicts now innate to the Republican party itself. The party's structure is more sensitive to grass roots momentum, as we learned from the Tea Party. Those issues haven't crept as deeply in the Democratic Party due to it's structure (the much discussed super delegates for example).

Indeed... I believe it's that the vast majority of the EARLY primary/caucus events are "open", which makes it harder for the more conservative candidate to succeed in the GOP. The irony is that, it is because of these open primary/caucus' that fueled Trump's rise.

Second, I think there's also the ideological issue. The Republicans have made personal responsibility a major calling card, which means that when the party fails to live up to that card, there's going to be much bigger backlash. A beast of their own making so to speak.

Yeah, there's something to that. McConngal, et. el in 2010/12 claimed they could stop Obama's policies via Congress' Powah of da Purse™. Obviously, they haven't been successful and thus are paying the price.

The Democrats also espouse personal responsibility, but they espouse it different with a larger focus on systems and their platform comes packaged with support for welfare systems and the social safety net. That I think placates the people on that side of the line, whose counterparts on the other side are throwing their arms up in the air like they just don't care.

Yup... great summary.

I think a big part of why Trump is such a sensation isn't just that he talks crazy stuff, but he has so many people listening to it. Sanders has lots of support (easily far more than I think anyone was expecting him to have), but it's just not as sensational. Plus, damning Wall Street is pretty hip for something politicians have been doing for decades. Trumps popularity could also have as much to do with internal part shock as anything. All the people rallying "we have to stop Trump" have probably made even more of a spectacle out of him. Comparatively, the Dems haven't been on a "we have to stop Bernie" binge, and Hillary has been fairly tame in her dealings with him.

Trump's rise can be blamed on the establishment GOP's lack of success of delivering on their promise.

I really think Bernie's rise is that, he's different from the usual brand of Democrats over the years.

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sebster wrote:

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whembly wrote:
That dynamic could also be said a bit about Sanders' rise as well... no?

That was really good, thanks. As to whether it applies to Sanders or not, I'm not sure its the right question. I'm not saying it doesn't apply, more that the question doesn't lead to any great insight in to Sanders' appeal.

I mean, really, Sanders is telling people they can have cheaper education and free health. For people concerned about those things, it isn't hard to see the appeal. Whether those things are practical is a whole other debate, but in terms of establishing Sanders appeal it's pretty straightforward.

I see what you mean and by that extension, it could be argued that the "Socialsm/European" model is being viewed more favorably than in the past. Hence why Sanders is doing so well, and may encourage other politicians of his mold to step forward.

Whereas with Trump, there was a whole question of exactly what it was that was appealing to people. The easy answer was racism, because Trump said some racist things. But it's a cheap answer really, and one that doesn't really line up with voter feedback. But if we look at the rest of his platform, there's just not much there, and if we ask Trump voters to explain his policies, there's even less there.

I don't think it's racism as in "derp, derp, we hate 'dem Mexican folks"... but more on a nationalist fervor.

Things aren't looking so hot for the folks on the ground here in the US.

Yeah... go ahead and roll your eyes... but, I'm telling you, that's the perception.

The vast majority of the electorate doesn't really care what goes on Washington. They just want to be left alone and have opportunity to succeed. When that doesn't happen, and it's out of your control. It's very easy to pin the blame on:
-Washington Establishment (Trump's & Cruz's message)
-Mexico
-China

However wrong it is, it's still resonating with the voters. Give Trump kudos in tapping into this... he's naturally savvy in this regard.

That's where your posted article is excellent, I don't agree with all of it, but it does get at what is probably the centre of Trump's appeal - 'it's the culture, stupid'. Trump doesn't talk and act like a politician, he talks and acts like a regular blowhard sounding off about politics. For the most part he wouldn't be out of place on dakka.

Indeed. I just have a mental image of him being this un-PC blowhard, endearing himself to his Trumpkins, then privately his lawyers/handlers coaching him to walkback/spin his statement the next day. His supporters don't care... because, they're that pissed off and simply want something different.

There's a great term 'affinity fraud'. It describes the trick of con men to make themselves appear to be just the same as you, because then you're more likely to believe them. Bernie Madoff got away with his scam for decades because he was just like the wealthy elite he took money from - were he an outsider they almost certainly would have looked much harder, much sooner.

I totally believe the Trump supporters are being conned.

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LordofHats wrote:
That was probably one of the best candid articles I've seen written about Trump the entire primary season, and I think it does apply to Sanders as well.

I think the reason Sanders hasn't blown up in the same manner as Trump is probably two fold.

Sanders is winning about 40%, the same as Trump. The difference is that the Democrats have a single inside candidate, while the Republicans were split among many.

The Super Delegates is the key difference.

Plus, Trump may not be able to reach the 1237 delegate needed.

See page one in this thread... my pipe-dream may become a reality.

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sebster wrote:

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whembly wrote:
Okay... now wasn't it a few years ago that you and I tussled over this very topic? You arguing the virtue of this and me bitching about it?

I'm too lazy to look back though...

I don't think so, I've never liked inheritance tax. It's a dysfunctional way of generating tax revenue.

If you look at my (admittedly many) posts to different people, you'll see I'm coming down pretty strongly against the tax. I was just picking you up on one argument - that inheritance tax is efficient. It isn't because the value of any piece of capital other than stocks is so subjective, and because capital can be structured in so many ways to avoid capital taxes.

Then there was that other bit where you were saying it was envy to tax the rich. We've tussled on that many times

Hmmmm, I could've swore that's how it went.

Anyhoo... yeah, it's a crummy thing as most of the structured wealth would be designed to mitigate that tax anyways.

I'd just rather classify gaining "new stuff" (inheritence) as simply income, and thus it'll be tax accordingly in whichever bracket you land.

That's more fair in my mind then having a system that says:
Nah... you made enough, gimmie moar.

That's an extremely distasteful mindset imo.

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And like that Sierra Mist commercial...

It's kinda like this:

Like I said, do you want a gak sammich with mustard? Or a gak sammich with pickles?

Those are our choices...

**LordofHats**

sebster wrote:
Yep. And having a gift tax that works to enforce the inheritance tax doesn't make the inheritance tax okay, it just shows why both taxes are bad.

I think that'll depend on how we want to define bad. In the sense of have a straightforward and effective tax code most definitely. If I really were allowed to write the tax code, along with a mandate for powdered wigs, I wonder how much simpler things would be if we just dropped all this capital gains, inheritance, gift etc etc nonsense, called it all income and taxed it*. Oh how much simpler it would be.

On the other hand, I live in a country with a long history of the wealthy getting a tax code that's pretty much been tailored for them to circumvent. That we tax inheritance at all is amazing to me. A testament to how hard it is to get rid of policy once it's in place. Being able to pass on wealth is a luxury few people actually get to enjoy in the US. More often than not, the only thing passed on to children by their parents is bills and funeral costs. That people with the privilege of actually inheriting significant sums have to pay a tax on it is completely fair. It's a privilege the wealthiest have in a stable society that they should pay more to support. I suppose I ultimately don't care how exactly that payment is made, but for now this is all we really got.

Reality is that politics is a mix of stupidity and pragmatic, and smart policy making hardly ever materializes in the sphere of realpolitik. To reference a film we get the policies that we need, not the ones we deserve.

*Of course, the reason we have all these tax classifications is probably somewhat connected to the US' odd road towards an income tax. Constitution really made that one a convoluted mess of a thing.

**sebster**

whembly wrote:
I see what you mean and by that extension, it could be argued that the "Socialsm/European" model is being viewed more favorably than in the past. Hence why Sanders is doing so well, and may encourage other politicians of his mold to step forward.

This is what I wonder, that we might see a more radicalised version of the Democrats in future, much as we've seen a more radicalised version of Republicans. This is a mixed blessing, it's good for parties to have clear policy positions that voters like, but it also brings a partisan approach that really doesn't work well given the US political model.

I don't think it's racism as in "derp, derp, we hate 'dem Mexican folks"... but more on a nationalist fervor.

Things aren't looking so hot for the folks on the ground here in the US.

Yeah... go ahead and roll your eyes... but, I'm telling you, that's the perception.

Things aren't good on the ground for lots of people, no argument there. Perhaps the bigger point is that things haven't been good for lots of people, for a long time - people can tolerate hard times as long as they believe it'll be better if they continue, even if it is their kids who will have it better. But there's lots of regions where that isn't a sensible thing to believe.

And they haven't been good for a long time, and that's even more serious - people can tolerate and no party has done a very good job explaining how they might make it better. Which opens the door for Trump to come in, even if his answer is completely terrible, it's going to attract voters.

The vast majority of the electorate doesn't really care what goes on Washington. They just want to be left alone and have opportunity to succeed.

I think 'they want to be left alone and have opportunity' betrays your conservative bias

. The vast majority want economic security and to believe things are getting easier. I don't think they much care how that comes about, whether government is involved or not.

I totally believe the Trump supporters are being conned.

You ever watch one of those shows where they meet some lady who is being catfished and she won't believe it, and you feel bad for her because she's being conned over her loneliness, but at the same time she refuses to see the obvious and you kind of want her to get the rude shock to wake her up out of her stupor? That's kind of how I feel about Trump.

The Super Delegates is the key difference.

It isn't super delegates. Clinton is more on track to win a majority of pledged delegates comfortably. The difference is that Sanders gets 40%, Clinton gets 60%. Whereas Trump gets 40%, and Cruz gets 25%, Rubio gets 15%, Bush gets 10%, Kasich gets 10%.

In a two horse race 40% is a losing score, in a 5 horse race that's slowly become a 3 horse race, 40% is probably enough.

Anyhoo... yeah, it's a crummy thing as most of the structured wealth would be designed to mitigate that tax anyways.

I'd just rather classify gaining "new stuff" (inheritence) as simply income, and thus it'll be tax accordingly in whichever bracket you land.

If someone was walking along the road and found a diamond worth $50k, would you tax them? If not, why not?

That's more fair in my mind then having a system that says:
Nah... you made enough, gimmie moar.

That's an extremely distasteful mindset imo.

If inheritance was taxed as income as you suggest, you'd be taxing people who receive larger inheritances more, because it'd become part of the existing progressive tax scheme.

And like that Sierra Mist commercial...

The image didn't work for me.

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LordofHats wrote:
I think that'll depend on how we want to define bad.

We measure it by whatever my opinion is, obviously

In the sense of have a straightforward and effective tax code most definitely. If I really were allowed to write the tax code, along with a mandate for powdered wigs, I wonder how much simpler things would be if we just dropped all this capital gains, inheritance, gift etc etc nonsense, called it all income and taxed it. Oh how much simpler it would be.

There's been proposals for what they call transactional tax (not to be confused with a transaction tax). It's a system that would record every instance of money coming in, whether it was an asset sale, salary, inheritance, whatever. And you'd be taxed on that no matter what. It's an interesting concept, but has a lot of flaws. Capital gains, for instance, need to be taxed on the difference between sale and purchase price, with a CPI factor accounted for. And then there's the argument that inheritance shouldn't be taxed at all. Or lottery winnings - if I can't claim a deduction for a losing ticket, what right has government got to tax my winning ticket?

On the other hand, I live in a country with a long history of the wealthy getting a tax code that's pretty much been tailored for them to circumvent. That we tax inheritance at all is amazing to me. A testament to how hard it is to get rid of policy once it's in place. Being able to pass on wealth is a luxury few people actually get to enjoy in the US. More often than not, the only thing passed on to children by their parents is bills and funeral costs. That people with the privilege of actually inheriting significant sums have to pay a tax on it is completely fair. It's a privilege the wealthiest have in a stable society that they should pay more to support. I suppose I ultimately don't care how exactly that payment is made, but for now this is all we really got.

Reality is that politics is a mix of stupidity and pragmatic, and smart policy making hardly ever materializes in the sphere of realpolitik. To reference a film we get the policies what we need, not the ones we deserve.

As I understand it inheritance tax has grown and faded a bunch of times. I think that's the kind of dynamic that explains US tax and many other bits of legislation - a big change driven by populism through the ballot box, then slowly minimised and refit by lobbying force, until you later get another big change.

The result of that is, as you say, a mix of stupidity and pragmatism.

**LordofHats**

sebster wrote:

The result of that is, as you say, a mix of stupidity and pragmatism.

Well as these posts have been made, I have also considered that the US has something of a cluster feth history on taxes, especially income tax. The US had tried before the 20th century to implement income tax, but the Supreme Court ruled that taxes on income from property deriving from rent, interest, and dividends constituted direct tax. The Court had previously defined 'direct tax' as ""taxes on lands and buildings, and general assessments, whether on the whole property of individuals or on their whole real or personal estate." I'm actually not sure what the logic of the former decision was, but regardless income from wages was declared an indirect tax, while income from property was direct tax. The US Constitution specifies that direct taxes be apportioned by the states according to their number, which made income tax impractical. It's also impossible to have a progressive income tax (which was what we wanted at the time) apportioned to states by their number while maintaining uniformity across the nation (required by the Taxes and Spending clause), which would make any income tax adhering to the court case unconstitutional on its face.

Till the 16th amendment comes along and specifies congress can tax any income from any source without regards to apportionment (1913). There have been subsequent court cases continuing to define 'income' 'gifts' 'inheritance' and 'capital gains' as it pertains to the US tax code at various points in time, so maybe we've kind of hosered ourselves a little bit with all the legalese when it comes to tax policy. Throwing road blocks up in our own way as it may be.

**sebster**

LordofHats wrote:
Well as these posts have been made, I have also considered that the US has something of a cluster feth history on taxes, especially income tax.

US taxes are a horrendous mess. The troubled constitutional history plays in to it, but the basic of it is that you have a tax system that is basically 10,000 pages of special cases, at no point was there ever reform put in place to build an income tax system around a simple general principle. Something like 'income is anything received in compensation for work or skill, or generated from the use or renting of assets, deductions are any expenditures in the pursuit of income, and income less deductions is measured against the tax rates to give tax payable for the year.' From there you can add special exemptions for depreciation, increased deductions for research etc, but that one basic structure should make almost most tax matters clear.

It's worth noting the US does terribly on the tax portion of the 'ease of doing business' score each year. Not because taxes are high, effective tax rates aren't, but because the cost of completing tax returns in the US is so high.

**skyth**

Just a couple notes. You can get a deduction for gambling (including lottery) losses (Up to the amount you win throughout the year). Professional gamblers can take the entire loss.

The $100k coin flip winning is taxable.

If you find a $50k diamond you aren't taxed on it, but if you sell it, the basis is $0 so you are taxed on the entirety of the gain.

**reds8n**

Nostromodamus wrote:
Monster Raving Looney party seems appropriate.

That's actually a UK party

http://www.loonyparty.com/

https://en.wikipedia.org/wiki/Official_Monster_Raving_Loony_Party

**AlmightyWalrus**

whembly wrote:

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And like that Sierra Mist commercial...

It's kinda like this:

Like I said, do you want a gak sammich with mustard? Or a gak sammich with pickles?

Those are our choices...

There are degrees of hell. Trump has damned himself more times than your Emailgate or That-one-place-in-Libya-that-must-not-be-named-gate has managed to dig up on Clinton, and it's not for a lack of trying on the Republican side.

**Ouze**

Prestor Jon wrote:
Everyone who earns income pays income tax, everyone who owns property pays property tax, everyone who buys stuff pays sales tax, but only a tiny percentage of people who get an inheritance pay the estate tax. If the government can't convince people on its merits that it's a tax that should apply to everyone then it's not a tax that should be levied. Everyone who lives in a society benefits from that society and owes a contribution to that society to keep it functioning.

But everyone in the US has the chance to pull themselves up by their bootstraps and earn the extraordinary income it takes to have to pay that estate tax. In a way, you can say, the taxpayers.... trickle up.

**CptJake**

sebster wrote:

CptJake wrote:
Your Eco 101 was different. I could start up a factory and generate 10s of thousands of horse buggies or millions of vacuum tube radios, creating a massive supply of them. That supply would not create a demand for those items.

Sure, you could, if you decided to be an idiot. Most people, most business owners, don't decide to be idiots. They respond to the demand that exists, provide the products that people will buy. That's such a basic thing we won't even see it stated in economic models as an assumption, because holy crap of course it isn't.

Do you seriously not understand this, or are you just giving smart alec answers? Because if it's the latter I'll crack out the Econ 101 and go through a widgets and sputniks example and we can all refresh our highschool economics. But if it's the latter and you just don't want to admit you got caught up arguing one side of a very argument, then just say that and we can move on.

That was my point. Which you argued against with your chicken/egg analogy. Creating supply does not create demand. It is NOT a chicken/egg thing.

**jasper76**

sebster wrote:

jasper76 wrote:
Come on, people. Everybody knows being born is hard work.

You're adding a moral argument where no such thing exists. If you think wealthy people should carry a larger share of the burden, then argue for higher tax rates at high income. Don't argue for taxing income and then taxing it again, once as income once as capital, because you'd like rich people to pay more tax.

Or, you know, I could have been just trying to make a joke and add some humor to one of the most boring political issues on the menu

This is a law that we passed in the US. If you feel that the children of the rich in the United States and/or elsewhere should not be taxed in this manor, then by all means continue to attempt to persuade others, get a petition going, do what you feel you need to do to protect them.

Automatically Appended Next Post:

whembly wrote:

Like I said, do you want a gak sammich with mustard? Or a gak sammich with pickles?

Those are our choices...

Now, now, whembley. We've already discussed this. You can stay home. That doesn't require you to do anything at all. You can also vote for a Third Party. All that takes is a drive to the voting booth and a little courage to vote in harmony with your conscience.

**reds8n**

https://twitter.com/thehill/status/710545803652288513

JUST IN: David Duke: Trump comparisons could rehabilitate Hitler's image http://hill.cm/v2KhA1U

http://thehill.com/blogs/blog-briefing-room/news/273459-david-duke-suggests-trump-comparisons-could-rehabilitate

David Duke suggested this week that comparisons of Republican presidential candidate Donald Trump to Adolf Hitler could help rehabilitate the former German leader's image.

Duke, a former Ku Klux Klan grand wizard who backs Trump, argued Tuesday on his radio show that "the reason there’s a war on Donald Trump is because there’s a war on the real America.

“There’s a war on the European-American majority of the United States of America," Duke said on his program, which was highlighted by Mediaite.

Duke went on to suggest that Trump's critics "might be rehabilitating that fellow with the mustache back there in Germany," citing the fight against communism.

"I saw a commercial against Donald Trump, a really vicious commercial, comparing what Donald Trump said about preserving America and making America great again to Hitler in Germany preserving Germany and making Germany great again and free again and not beholden to these communists on one side, politically who were trying to destroy their land and their freedom, and the Jewish capitalists on the other, who were ripping off the nation through the banking system."

Trump has faced continued blowback from Republicans and others for failing to forcefully disavow the former KKK leader last month. The businessman has also decried repeated comparisons between himself and the Nazi leader.

Top work America !

**skyth**

And it is still a ridiculous argument that the money was 'already taxed'. My income was already taxed because it is paid through people buying things from money that they already paid tax on. The entire tax code (other than property taxes) is based on wealth changing hands. Inheritance fits right in with that.

One of the few quibbles I have with the tax code, in general-aside from the specific stuff put in to help certain people-is the 2% AGI limitation on work-related expenses. That and if your girlfriend's child that you are supporting not being counted as a qualifying child are my two big bogeymen.

**Nostromodamus**

reds8n wrote:
Nostromodamus wrote:
Monster Raving Looney party seems appropriate.

That's actually a UK party

http://www.loonyparty.com/

https://en.wikipedia.org/wiki/Official_Monster_Raving_Loony_Party

I know

**jasper76**

If this gets out, Cruz is finished:

Is Ted Cruz secretly the frontman of Christian metal band Stryper? : http://www.dailydot.com/lol/ted-cruz-michael-sweet-stryper/

**Goliath**

To be fair, I'm pretty sure that "making Germany great again" isn't the *only* thing that Hitler is known for.

I mean, it's pretty easy to recover your image from improving a nation's prosperity, but not so much for ethnic cleansing.

Automatically Appended Next Post:
Also, jumping waaaaay back to when the US bombed an MSF hospital in Aghanistan; it looks like the personnel involved are going to be punished:

BBC NEWS wrote:
The US military has disciplined more than a dozen service members after an air strike on a Medecins Sans Frontieres (MSF) hospital in Afghanistan killed 42 people last year.
The Pentagon has acknowledged that the clinic was targeted by mistake, but no personnel will face criminal charges.
The Associated Press reported that the sanctions, which were not made public, were mostly administrative.
Some received formal reprimands while others were suspended from duty.
Both officers and enlisted personnel were disciplined, but no generals were punished.
A spokeswoman for MSF said the medical charity would not comment until the Pentagon made the details public.

US officials said the Doctors Without Borders hospital was targeted by mistake
The disciplinary action was the result of a Pentagon investigation into the attack. A report on that investigation is expected to be made public next week.
In October, a US gunship fired on the hospital in the city of Kunduz. Taliban fighters had recently retaken the city after US-led forces drove them out in 2001.
Afghan officials said the building had been taken over by Taliban fighters, but no evidence has been found to back those claims.
MSF said the incident constituted "violations of the rules of war". The hospital was destroyed and MSF pulled out of Kunduz after the attack.
Army Gen John Campbell, the top US commander in Afghanistan at the time, called the incident a "tragic but avoidable accident caused primarily by human error".
US President Barack Obama apologised for the air strike, which was one of the deadliest attacks on civilians in the 15-year Afghan conflict.

**reds8n**

Goliath wrote:
To be fair, I'm pretty sure that "making Germany great again" isn't the *only* thing that Hitler is known for.

So you saying Trump should grow a moustache, it's a fair point.

**Goliath**

reds8n wrote:
Goliath wrote:
To be fair, I'm pretty sure that "making Germany great again" isn't the *only* thing that Hitler is known for.

So you saying Trump should grow a moustache, it's a fair point.

I'm not entirely convinced that he's capable of growing hair above the armpits, but yes. A presidential candidate with a ginger toothbrush moustache wig is something that needs to happen as soon as feasibly possible.

**jasper76**

Ask, and you shall receive:

Spoiler:

**AduroT**

jasper76 wrote:
Ask, and you shall receive:

Spoiler:

The hands are too large.

**jasper76**

Oh good call. Painting needs some tiny, tiny sausage-link fingers.

**Do_I_Not_Like_That**

I know that Manning and Snowden are not everybody's favourite people on Dakka, but there's an interesting article in today's Guardian newspaper about how the US government is cranking up its monitoring of employees to prevent future leaks.

http://www.theguardian.com/us-news/2016/mar/18/chelsea-manning-insider-threat-surveillance-government-employees

This programme, called the insider threat programme, seems like a common sense thing on the surface.

Scratch beneath, though, and in my opinion, it's like something out of 1950s America! I'm half expecting the US government to put together Nixon's plumbers again!

On a more serious note, who watches the watchmen?

The American people have a right to know if their 4th amendment rights are being gakked on from a great height.

Re-reading the Pentagon Papers case at SCOTUS back in the day, it strikes me what a great act that was for American democracy and accountability, but Obama seems hell-bent on preventing anything similar from happening in the future.

Expect more of the same from Clinton if she is elected.

**skyth**

Do_I_Not_Like_That wrote:
I know that Manning and Snowden are not everybody's favourite people on Dakka, but there's an interesting article in today's Guardian newspaper about how the US government is cranking up its monitoring of employees to prevent future leaks.

http://www.theguardian.com/us-news/2016/mar/18/chelsea-manning-insider-threat-surveillance-government-employees

This programme, called the insider threat programme, seems like a common sense thing on the surface.

Scratch beneath, though, and in my opinion, it's like something out of 1950s America! I'm half expecting the US government to put together Nixon's plumbers again!

On a more serious note, who watches the watchmen?

The American people have a right to know if their 4th amendment rights are being gakked on from a great height.

Re-reading the Pentagon Papers case at SCOTUS back in the day, it strikes me what a great act that was for American democracy and accountability, but Obama seems hell-bent on preventing anything similar from happening in the future.

Expect more of the same from Clinton if she is elected.

I don't see Trump or Cruz changing it either though.

**Do_I_Not_Like_That**

Fair point.

**whembly**

Here's an update on Hillary's #Emailgate distilled in one nice post, with links galores:

Hillary Has an NSA Problem
The FBI has been investigating Clinton for months—but an even more secretive Federal agency has its own important beef with her.

For a year now, Hillary Clinton’s misuse of email during her tenure as Secretary of State has hung like a dark cloud over her presidential campaign. As I told you months ago, EmailGate isn’t going away, despite the best efforts of Team Clinton to make it disappear. Instead, the scandal has gotten worse, with never-ending revelations of apparent misconduct by Ms. Clinton and her staff. At this point, EmailGate may be the only thing standing between Hillary and the White House this November.

Specifically, the Federal Bureau of Investigation examination of EmailGate, pursuant to provisions of the Espionage Act, poses a major threat to Ms. Clinton’s presidential aspirations. However, even if the FBI recommends prosecution of her or members of her inner circle for mishandling of classified information—which is something the politically unconnected routinely do face prosecution for—it’s by no means certain that the Department of Justice will follow the FBI’s lead.

What DoJ decides to do with EmailGate is ultimately a question of politics as much as justice. Ms. Clinton’s recent statement on her potential prosecution, “it’s not going to happen,” then refusing to address the question at all in a recent debate, led to speculation about a backroom deal with the White House to shield Hillary from prosecution as long as Mr. Obama is in the Oval Office. After mid-January, however, all bets would be off. In that case, winning the White House herself could be an urgent matter of avoiding prosecution for Ms. Clinton.

That said, if DoJ declines to prosecute after the Bureau recommends doing so, a leak-fest of a kind not seen in Washington, D.C., since Watergate should be anticipated. The FBI would be angry that its exhaustive investigation was thwarted by dirty deals between Democrats. In that case, a great deal of Clintonian dirty laundry could wind up in the hands of the press, habitual mainstream media covering for the Clintons notwithstanding, perhaps having a major impact on the presidential race this year.

Neither is the FBI the only powerful Federal agency that Hillary Clinton needs to worry about as she plots her path to the White House between scandals and leaks. For years, she has been on the bad side of the National Security Agency, America’s most important intelligence agency, as revealed by just-released State Department documents obtained by Judicial Watch under the Freedom of Information Act.

The documents, though redacted, detail a bureaucratic showdown between Ms. Clinton and NSA at the outset of her tenure at Foggy Bottom. The new Secretary of State, who had gotten “hooked” on her Blackberry during her failed 2008 presidential bid, according to a top State Department security official, wanted to use that Blackberry anywhere she went.

That, however, was impossible, since Secretary Clinton’s main office space at Foggy Bottom was actually a Secure Compartment Information Facility, called a SCIF (pronounced “skiff”) by insiders. A SCIF is required for handling any Top Secret-plus information. In most Washington, D.C., offices with a SCIF, which has to be certified as fully secure from human or technical penetration, that’s where you check Top Secret email, read intelligence reports, and conduct classified meetings that must be held inside such protected spaces.

But personal electronic devices—your cellphone, your Blackberry—can never be brought into a SCIF. They represent a serious technical threat that is actually employed by many intelligence agencies worldwide. Though few Americans realize it, taking remote control over a handheld device, then using it to record conversations, is surprisingly easy for any competent spy service. Your smartphone is a sophisticated surveillance device—on you, the user—that also happens to provide phone service and Internet access.

As a result, your phone and your Blackberry always need to be locked up before you enter any SCIF. Taking such items into one represents a serious security violation. And Hillary and her staff really hated that. Not even one month into the new administration in early 2009, Ms. Clinton and her inner circle were chafing under these rules. They were accustomed to having their personal Blackberrys with them at all times, checking and sending emails nonstop, and that was simply impossible in a SCIF like their new office was.

This resulted in a February 2009 request by Secretary Clinton to NSA, whose Information Assurance Directorate (IAD for short: see here for an explanation of Agency organization) secures the sensitive communications of many U.S. Government entities, from Top Secret computer networks, to White House communications, to the classified codes that control our nuclear weapons.

IAD had recently created a special, custom-made secure Blackberry for Barack Obama, another technology addict. Now Ms. Clinton wanted one for herself. However, making the new president’s personal Blackberry had been a time-consuming and expensive exercise. NSA was not inclined to provide Secretary Clinton with one of her own simply for her convenience: there had to be clearly demonstrated need.

And that seemed dubious to IAD since there was no problem with Ms. Clinton checking her personal email inside her office SCIF. Hers, like most, had open (i.e. unclassified) computer terminals connected to the Internet, and the Secretary of State could log into her own email anytime she wanted to right from her desk.

But she did not want to. Ms. Clinton only checked her personal email on her Blackberry: she did not want to sit down at a computer terminal. As a result, NSA informed Secretary Clinton in early 2009 that they could not help her. When Team Clinton kept pressing the point, “we were politely told to shut up and color” by IAD, explained the State security official.

The State Department has not released the full document trail here, so the complete story remains unknown to the public. However, one senior NSA official, now retired, recalled the kerfuffle with Team Clinton in early 2009 about Blackberrys. “It was the usual Clinton prima donna stuff,” he explained, “the whole ‘rules are for other people’ act that I remembered from the Nineties.” Why Ms. Clinton would not simply check her personal email on an office computer, like every other government employee less senior than the president, seems a germane question, given what a major scandal EmailGate turned out to be. “What did she not want put on a government system, where security people might see it?” the former NSA official asked, adding, “I wonder now, and I sure wish I’d asked about it back in 2009.”

He’s not the only NSA affiliate with pointed questions about what Hillary Clinton and her staff at Foggy Bottom were really up to—and why they went to such trouble to circumvent Federal laws about the use of IT systems and the handling of classified information. This has come to a head thanks to Team Clinton’s gross mishandling of highly classified NSA intelligence.

As I explained in this column in January, one of the most controversial of Ms. Clinton’s emails released by the State Department under judicial order was one sent on June 8, 2011 to the Secretary of State by Sidney Blumenthal, Hillary’s unsavory friend and confidant who was running a private intelligence service for Ms. Clinton. This email contains an amazingly detailed assessment of events in Sudan, specifically a coup being plotted by top generals in that war-torn country. Mr. Blumenthal’s information came from a top-ranking source with direct access to Sudan’s top military and intelligence officials, and recounted a high-level meeting that had taken place only twenty-four hours before.

To anybody familiar with intelligence reporting, this is unmistakably signals intelligence, termed SIGINT in the trade. In other words, Mr. Blumenthal, a private citizen who had enjoyed no access to U.S. intelligence for over a decade when he sent that email, somehow got hold of SIGINT about the Sudanese leadership and managed to send it, via open, unclassified email, to his friend Hillary only one day later.

NSA officials were appalled by the State Department’s release of this email, since it bore all the hallmarks of Agency reporting. Back in early January, when I reported this, I was confident that Mr. Blumenthal’s information came from highly classified NSA sources, based on my years of reading and writing such reports myself, and one veteran Agency official told me it was NSA information with “at least 90 percent confidence.”

Now, over two months later, I can confirm that the contents of Sid Blumenthal’s June 8, 2011 email to Hillary Clinton, sent to her personal, unclassified account, were indeed based on highly sensitive NSA information. The Agency investigated this compromise and determined that Mr. Blumenthal’s highly detailed account of Sudanese goings-on, including the retelling of high-level conversations in that country, was indeed derived from NSA intelligence.

Specifically, this information was illegally lifted from four different NSA reports, all of them classified Top Secret / Special Intelligence. Worse, at least one of those reports was issued under the GAMMA compartment, which is an NSA handling caveat that is applied to extraordinarily sensitive information (for instance, decrypted conversations between top foreign leadership, as this was). GAMMA is properly viewed as a SIGINT Special Access Program or SAP, several of which from CIA Ms. Clinton compromised in another series of her “unclassified” emails.

Currently serving NSA officials have told me they have no doubt that Mr. Blumenthal’s information came from their reports. “It’s word-for-word, verbatim copying,” one of them explained. “In one case, an entire paragraph was lifted from an NSA report” that was classified Top Secret / Special Intelligence.

How Sid Blumenthal got his hands on this information is the key question, and there’s no firm answer yet. The fact that he was able to take four separate highly classified NSA reports – none of which he was supposed to have any access to – and pass the details of them to Hillary Clinton via email only hours after NSA released them in Top Secret / Special Intelligence channels, indicates something highly unusual—as well as illegal—was going on.

Suspicion naturally falls on Tyler Drumheller, the former CIA senior official who was Mr. Blumenthal’s intelligence fixer, his supplier of juicy spy gossip, who conveniently died last August before EmailGate became front-page news. However, he, too, had left Federal service years before and should not have had any access to current NSA reports.

There are many questions here about what Hillary Clinton and her staff at Foggy Bottom were up to, including Sidney Blumenthal, an integral member of the Clinton organization, despite his lack of any government position. How Mr. Blumenthal got hold of this Top Secret-plus reporting is only the first question. Why he chose to email it to Ms. Clinton in open channels is another question. So is: How did nobody on Secretary Clinton’s staff notice that this highly detailed reporting looked exactly like SIGINT from NSA? Last, why did the State Department see fit to release this email, unredacted, to the public?

These are the questions being asked by officials at NSA and the FBI right now. All of them merit serious examination. Their answers may determine the political fate of Hillary Clinton—and who gets elected our next president in November.

Far from over...