Illegal aliens a Social Security boon
http://www.wpherald.com/storyview.php?StoryID=20050405-095501-6756r
By UNITED PRESS INTERNATIONAL
Published April 5, 2005
STOCKTON, California -- Illegal aliens contribute $7 billion a year to U.S. Social Security coffers, and, given their immigrations status, are unlikely to ever collect benefits.
With debates in Congress over immigration and Social Security, the cross between the two issues has taken an interesting turn. There are an estimated 7 million illegal immigrants in the United States and they pay some $7 billion a year into the Social Security system, The New York Times reported.
The newspaper said the Social Security Administration, beginning in the 1980s, noticed a large number of W-2 reports with incorrect or faked Social Security numbers. Over the 1990s some $189 billion worth of wages were records by the SSA, the Times said.
The time frame coincides with the 1986 Immigration Reform and Control Act, which set penalties for people who knowingly hire illegal aliens. A brisk business in fake identification and SSNs quickly grew, provided legal cover for the employers and, so far, a windfall for the SSA.
An SSA official told the Times the administration estimated 3/4 of illegal immigrants -- estimated by the Census Bureau at 3.8 million households -- pay payroll taxes. Those immigrants are not eligible to receive Social Security benefits.
So let's see... 3/4 of the estimated 7 million illegal immigrants is 5,250,000.
$7 billion divided by 5,250,000 is $1333.33 per person per year.
In return for which they get free healthcare, schooling for their children, meals for their children at school (since they most likely qualify for free lunch programs), pay no property taxes (since they almost certainly rent), and live in a house three times the size of what they could afford in Mexico?
But they won't ever see a Social Security payment, just like I won't?
Boo fucking hoo.
Not a big issue but ... renters pay property taxes. It's part of the rent. Renters also pay water bills, and all the other stuff homeowners do ... we just don't see the individual tab, and can't bitch about it in quite the same way homeowners do.
you forgot to mention the tax money that is spent on building shaded areas for them to stand under while waiting for someone to hire them. oh, there's also the costs associated when the police stumble across 50-200 waiting in a drop house until they are released to look for work.
well, let's not forget about the expense we are paying for the thousands in our prison system, too.
The Minutemen seem to be working out, at least from the reports I've heard on the radio thus far.
yeah, what i've read is pretty ok. but the liberals are calling them racist rednecks and the republicans are calling them stupid rednecks...
all of talk radio land has fallen in step with Bush's immigration reform BS, so they are trying to get the average conservative to turn against "vigilantes like the minutmen".
one of the local reporters that is covering said they helped the border patrol find 172 illegals last night alone. they also identified a place where the drug runners are bringing in some pretty large quantities.
Yeah, a friend of mine was going into Mexico for Spring Break, and she was told by border guards that they had just caught the number one drug trafficker, and all the little guys were going nuts trying to get his business in his absence, so certain cities were in total chaos right now and should be avoided.
Oh! OH! ANNNND...
Let's not forget that they don't pay for car insurance.
Around $100 a month = $1200 a year, almost cancels out their SS loss. And MY rates rise when they hit me, which happens because they learned to drive in Mexico, where--I shit you not--their government has had to install speed bumps on the goddamned highways.
Sorry. I'll return to normal breathing shortly.
I've been listening to this whole minutemen thing unfold on the radio.. as I've said before I've known some Illegals in the past, and in thier cases, I had no problem with what they were doing, moved up here and worked their asses off for 3 years, saved as much as they could and then went back home (presumably much wealthier than they were when they left), as to the ones who move up here and just live? the main problem I have with them is that they are taking up huge numbers of jobs in the industry in which I work. In Kansas City there are now kitchens with entirely illegal staffs (except the management of course) which is driving the wages and benefits (which are rare enough) down and suffice to say that sucks.
but then again.. 99% of us are illegal immigrants as well..
then again... we did conquer this nation, and as much as I kinda feel bad about that, in all of history the natives here got out of being invaded pretty well off.
*ducking*
the natives here got out of being invaded pretty well off.
i'm not too sure about that.
99% of us are illegal immigrants as well..
how do you figure?
immigrants? yes. illegal immigrants? no.
immigrants? yes. illegal immigrants? no.
Speak for yourself :D I had an uncle who started out in Austria, was turned back from the US, so he jumped ship in Nicaragua and made his way up to Wisconsin to join his brothers, quite illegally, over a period of several years. (Well, yeah, it was 80 years ago)
Don't get me wrong, I'm very nervous about the illegal immigrant problems right now as much as the rest of you, but I have to admit that if it were ME on the other side of whatever barrier had been erected between my family and security and opportunity, I'd be doing everything they have done, and more.
........Bitchbitchbitchbitchbitch coloured people are taking my job/tax/money/home/sponging off the system...I bet you'd all change your tune if you saw what happened if they all left. If you want to get into the fiscal nittygritty about how badly done by you are I'd advise a quick primer on deflationary pressure.
We hate the shit out of white illegals too. Goddamn Canadians.
We hate the shit out of white illegals too. Goddamn Canadians.
You can't trust anybody whose head flaps like that when they talk.
I had an argument with a man in my local last night. I interrupted a conversation that sounded interesting and after hearing him pose the question, 'Who owns this world? Us or the government?' I tried to explain that the government is made up of people too, and they are not that different from anyone in this pub. He got slightly agitated at this and said did I not think his opinion was important then? I said yes, but no more important than anyone elses, and how would poor Tony Blair deal with 60 million people turning up at his doorstep all insisting that their opinion was the right one? He then got ever so slightly more agitated and said 'Look lady, you've got a lot to learn mumble mumble mumble' and left the building.
I forget the point of telling you this but it is something along the lines of not being able to change the system to your benefit, and stop thinking you're right. Oh and stop worrying about what everyone else is doing and enjoy your own life, which naturally never causes anyone harm in sweat shops, financial deficit or sheer annoyance.
So what makes illegals special? I'm paying boatloads of money into Social Security and given my age, it's unlikely I'll see a dime either.
On a related subject, I think the volunteer xenophobes are despoiling the name "Minutemen", but that's just me.
It has irritated the hell out of me for several years watching so many businesses in my town and surrounding ones hire more folks from south of the border than locals, although I have thought about buying a few rent houses, considering they pay about $50.00 a month rent per person, and there's usually anywhere from 8-35 people per house. But...in the last year I've got to know a couple who own a business that employs mostly Mexicans and now I see why. They are the ones who will show up every day and work without a lot of bitching. Granted, this is a greasy, dirty job and starts out at a pretty low wage. But there aren't a lot of jobs to choose from right now, and a person who has good attendance and does the job, does get a raise after 30 days, 60 days, 6 months, and one year. Their turnover is so high that they do start out low. I have had to look at it from their side lately....still sucks though...
So what makes illegals special? I'm paying boatloads of money into Social Security and given my age, it's unlikely I'll see a dime either.
That's only true if the Republicans are allowed to dismantle it, which doesn't seem likely at this point.
HM, dismantled or not, I will never see a Social Security payment regardless of who's in charge of it. The system was never meant to be permanent, and can't be sustained. What I expect will happen is that the level of eligibility will be slowly lowered until it is the equivalent of welfare for old people. I'm not on welfare now, and I don't intend to be when I'm old.
Near as I can tell, it is Welfare for Old People.
Actually, i've even seen old people on both social security and welfare. rare, but it happens.
The system was always meant to be permanent and, even if nothing is done, the worst it will get will be a reduction of benefits to 70% of scheduled benefits. That's after it "goes bankrupt". Scheduled benefits are higher than current benefits.
As for when that will happen, here's the history of the projected date:
This is
my source (I didn't link before because I had just saved the graphic).
http://www.mydd.com/story/2005/3/24/9175/05678
They claim the ultimate source is the trustees' annual reports, which should be easy to fact check, but don't have a link.
So basically what the graph says is that the system is engineered to seem to be ready to fall apart when folks who are, at the time of the projection in their mid to late 30s, are starting to actually think about things like retirement ...
What's being manipulated? The people, or the numbers that make up the chart, or both?
Got it - it looks like the trustees base their assumptions on a flat GDP somewhat lower than the current actual GDP, meaning that when the economy is booming the "bust date" goes out, while when the economy is bad the "bust date" moves in.
Moving to the so-called private schemes ties the number to the economy so if the economy does well, the amount of the benefits goes up, while if the economy does poorly the amount of benefits goes down.
That should make the system healthier no matter what, but my question is what happens to the markets when all the money goes into them with specific risk-averse conditions about how the money operates.
What's being manipulated? The people, or the numbers that make up the chart, or both?
Both, I'm sure.
One other item that isn't often mentioned is that the pressure the Baby Boomers will put on the system will eventually be relieved. :yeldead:
Unless the immortality pill is invented, in which case we could probably go ahead and raise the retirement age a bit.
Frankly, trying to project economic data for 3-4 decades into the future doesn't seem far off divination to me.
while if the economy does poorly the amount of benefits goes down.
i have yet to see a legitimate model that shows benefits going down from the current system. think of it like this. if your current benefit is
X and the proposed plan has expectations that the new benefit will be
X + 100 but in a down time it only turns out to be
X + 50 , have you really lost anything? it would seem to me that you are still up from where you would be with the current system.
It's hard to argue projected benefit comparisons until Bush actually describes a plan to base projections on.
i agree, and that is frustrating. but probably no more frustrating than people who are mounting all of their arguments on the "republicans plans to dismantle social security" when they don't even know what they are arguing against, other than the republicans.
if bush proposes a plan that is crap, then i'll stand with you and call it crap. i get tired of hearing arguments and jabs at something that you admittedly don't know anything about, simply because it will be a proposal made by bush.
well you can only go on past peformance and the people involved, bush's economic team isn't exactly awe-inspiring.
l123, my other question is, how much money are we talking about and how will it affect the market itself? Loading a market with money should drive up the market prices, as removing it should lower the market prices. Do your models note any effect on the market itself?
i don't disagree Jag - but to disguise the attacks on an, as-of-yet unknown, proposal as anything other than pure partisan BS is foolishness.
UT - i don't have any specific models for what they are talking about doing. the only nation to bring a similar system online was Chile and i don't think there was enough money involved there to cause market shock. but, their money is in the global markets at this time so keep that in mind.
the only thing i see that would directly correlate to the situation would be the influx of cash the markets received due to the demise of pension plans and the creation of 401K's, 403B's, etc... in the '70's, '80's, and '90's. this time period also saw massive cash flow in because the average individual was able to invest on a smaller scale with mutual funds and the like. Is it exact? certainly not.
i believe the influx of new money will cause the markets to rise, but not dangerously so. trillions of dollars will not be dumped into the market some monday morning. if this is modeled along the lines of the TSP's and/or the Chilean model, then we are talking about managed funds with limited choices. managed funds means that there would be professionals who would know that they can't just buy everything they want in a single day. the funds would be sitting on very large cash positions for some time as they drip the money into the markets.
anyway - i don't have all the answers because, of course we haven't seen any real proposals yet. my point is that people should keep more of an open mind on the issue rather than dividing up on party lines before the issues are even known. individual accounts can work, but that doesn't mean that bush will put forward a plan that we want to adopt.
i don't disagree Jag - but to disguise the attacks on an, as-of-yet unknown, proposal as anything other than pure partisan BS is foolishness.
a) I don't think it's too unreasonable to think that his requirement that people sign on before he reveals the plan implies a massively flawed plan.
b) He, his economic advisors, and the current Republican leadership have a history of wanting to end social security, so I'm not going to give them much benefit of the doubt on the issue.
c) Whatever his theoretical plan is, it is irrelevant to debunking the FUD he's spreading about the current system.
UT - i don't have any specific models for what they are talking about doing. the only nation to bring a similar system online was Chile and i don't think there was enough money involved there to cause market shock. but, their money is in the global markets at this time so keep that in mind.
Chile and the UK both implemented private accounts. I don't know how it affected their markets, but it wasn't good for their people.
but it wasn't good for their people.
expound please. i'm not familiar with much of anything about the UK. no sunshine? no interest. ;)
For help in designing the plan, the government turned to the insurance industry, the main source of long-term investment products in Britain. By assigning this role to the industry that would benefit most, the government had in effect asked the fox to design the chicken coop.
The competition to sell pension investment products to the public was intense. Products were numerous and complicated, and few people could understand them. Fees and costs often were not fully disclosed by agents, who could pocket a portion of the first few years’ sales. Rules were poorly designed and rarely enforced.
at a glance i would say that is an obvious setup for failure. i wouldn't support any plan that let the insurance industry be in charge of anything.
even here and now, getting your investment advice from your insurance agent is a surefire way to lose money. insurance products (annuities, life, etc.) pay the highest commissions with the lowest returns of any product i come across. (generally, although there are exceptions.)
to go a step further i wouldn't support a plan here that came to the private sector for me and my colleagues to invest the money. the government, or whatever organization is set up to run this can quite easily hire qualified money managers to run funds exclusively for this system. no commissions, no payouts to brokers, etc.
this organization can be self sustaining and even profitable if that is a goal with extremely low annual expenses, most likely between .10-.30% annually. it really wouldn't be that much different than the no load funds that are in existence. the funds would have to be extremely limited by their own prospectus so their actions would be very transparent.
so, yeah HM - i'd stand side by side with you and rail on the proposal if it looked like the UK's, but there are ways to make this work that would significantly benefit the people of this country.
edit: it also looks like they had access to their funds and could choose to do anything they wanted with them. the choices should be limited and the money untouchable, just like most TSP's and 401K's. (i.e. no loans.)
Almost every decision Bush has made in office has been asking "the fox to design the chicken coop". That's why I don't trust his secret plan to be reasonable.
Sorry to barge in here...but this is an important topic, and I want to get in on the discussion. I read all the posts and the links, and I am trying to understand all I've read and heard. There are some assumptions and agendas and ideas out there that I've been unable to coroborrate. If any of you know of any supporting or refuting evidence I'd love to learn about it.
I heard a surprising report that a given estimate included figures "based on a 150 year lifespan", lending weight to the crisis theory. The best I could find
here and their worst case (longest life expectancy) numbers come just short of 93 years old. A loooong time to be paying ss benefits for sure, but a far far cry from 150 years. did anybody else see the 150 year number or am I hallucenating?
SS was envisioned to be a good idea in the aftermath of the stock market crash of 1929 and the subsequent depession, and now some think the stock market is the place to turn for security?
who are honest brokers for the figures in question? GAO? SS trustee board?
Sorry, total rant here, but bush's
demagogery and fearmongering about the file cabinet of paper that represents the failure of the ss system is just beyond the pale. where is major media outcry the outrage about this highly specific distorion of the facts? am I to believe that the full faith and credit of the united states of america is in question? after all, these treasury securities, some 1+ trillion worth, are they "just promises"????!!! what the hell is money? or a mortgage? or a bank statement? or a contract?
Damn. I need a break.
I heard the rumor that one of the projections Bush is using assumes that medical science will produce 150 year lifespans, but people will still retire at the current scheduled age. I haven't seen any source on that yet, though.
HM:
http://www.stripersonline.com/cgi-bin/ubb_547C/ultimatebb.cgi?ubb=get_topic;f=10;t=016824;p=2
This link contains a discussion in which the same idea is mentioned. I am sure I didn't imagine it. I think I heard Bush's voice in a sound bite on the radio saying it. In any event, to let the lifespan value rise to 150 yrs old and hold the retirement age at 65 to prove the point that SS is in crisis proves only that having to resort to such a ridiculous distortion of the parameters subtracts credibility from the proponents of the whole "the sky is falling" camp.
Almost certainly discussed before, but...
Projecting numbers this big, this complicated so far out, say, 75 years, is not a certain process, to say the least. So, given that EVERYONE'S numbers are estimates, why not just make some marginal changes? I like these:
Raise the ceiling on the amount of wages that are subject to the tax to a value greater than $90,000, maybe no limit. Seriously. Yeah, yeah, "soak the rich". Shut up and pay the man.
Continue to raise the retirement age at a rate scaled to the increase in life expectancy.
What's sacred about the actual dollar amounts in taxes or in benefits? Why not make small adjustments in both these numbers to move them both to the middle?
I am opposed to the idea of changing the basis for recomputing the annual increases from increases in wages to increases in prices. After all, these benefits reflect something closer to wages than prices.
And you know what? I am not opposed to private accounts, personal accounts, individual accounts, whatever magic focus-group-blessed adjective that returns the highest demographic values. Fine. Turns out we already have this in place. It's called an IRA. Or a 401(k). Or 403(b), etc etc. I urge all of you to save all you can, and be like the thrifty ant instead of the careless grasshopper. The wisdom of Aesop is valid here.
BUT.
Do not insult my intelligence by suggesting that this important issue, this real problem will be solved by taking money out of the Social Security Trust Fund revenue stream and putting it into another place. Another proverb about Peter and Paul comes to mind here.
The SS program represents a promise to generations of workers. *resists urge to bring up other broken promises* This promise is expected to be kept. It has been kept. I do not want my generation to be the one that broke the promise.
Are you listening President Bush?
Finally someone is looking out for the most downtrodden members of society - the children of the extremely wealthy.
exactly why are we in favor of taxing monies that have already been taxed?
doesn't "double taxation" ring a bell for anyone? i agree it is easy to build a sympathetic case for an estate tax. i dislike paris as much as anyone, but why is it ok to tax someone twice, just because they have $XX?
i look at this from a more realistic standpoint. I have quite a few clients who would get hit with the estate tax as it stands now.
they don't just tax someone who has $XX sitting in cash next to the fireplace for kindling.
- cash assets, investments, etc.
- real estate
- real property
- businesses
- life insurance
it isn't hard to go over the limits as they are set.
scenario: corner dry cleaner has worked thirty years building his business in his community. he makes a good living, takes care of his employees, is involved in community organizations. he pays his taxes on his business and personal earnings every year. he has a modest home in a nice neighborhood. because he is concerned about not having a pension or 401K he funded his IRA every year and has saved some additionally. he has a family so bought a life insurance policy to care for them. altogether, a stand up guy , don't you think? maybe he reminds you of yourself or someone on your block.
one day this hard working business owner has a heart attack and dies. his wife and children are heartbroken, but what can you do?
the house? $300K
the business? $600K
Investments? $275K
Land they had bought to build dream retirement home? $320
Life Insurance? $700K
The life insurance and investments can provide the family with a stream of income of @$50-60K/ annually.
The business is a tough issue - she wants to keep it in the family but the boys are a little too young to take over the reigns. she will have to hire a good manager to keep the high standards her husband always enforced. Her income from the business is basically a wash after finding, hiring, training, and paying the manager.
The CPA and attorney call her in for a meeting to inform her that her husband was a successful business owner. too successful. the estate tax is due. She has choices though.
1)She can sell the land, but that is tough because of sentimental reasons and she still wants to retire there.
2)She can sell the business, but then all of her husbands hard work to build a business that her son's can take over in just a couple of years, is wasted.
3) She can pay it with the Life insurance money, but then she would have to pay the manager of the store considerably less or do the job herself for extra income.
do you see where i am going here? this is a real story. this isn't someone who is obscenely wealthy. they probably live on your block. they have worked hard and saved and planned for the future.
everything they have they bought with money that they already paid taxes on. why should the estate tax go after the same dollars a second time?
******
what do i know though? i support a flat tax on every dollar earned over $30,000. no loopholes. i read recently that an 8% tax on every dollar earned over $30,000, plus a 1% additional sales tax would more than make up for anything lost by throwing out the "progressive tax" system. you know who won't support something like that though? CPA's attorneys, employees tax related businesses. they are afraid people won't need them anymore. :rant:
exactly why are we in favor of taxing monies that have already been taxed?
doesn't "double taxation" ring a bell for anyone? i agree it is easy to build a sympathetic case for an estate tax. i dislike paris as much as anyone, but why is it ok to tax someone twice, just because they have $XX?
"Double taxation" is something like federal and state income tax applying to the same income. Estate tax is not double taxation, it is taxing a transaction just like any other. "Monies" aren't taxed, transactions are, and inheritance is a transaction.
Further, estate taxes are the only limit in our society against a hereditary aristocracy taking hold.
if person X is paid $100 for doing his job he pays his income tax.
if person X dies, his estate pays taxes on this same $100 before the family can have it.
whatever term you want to use, that is taxing the same thing twice.
Then so is sales tax. You payed income tax, and then you pay sales tax on the very same money!
Toll roads! You're paying the toll with your already taxed income!
Income is one thing. Inheritance is another thing. Each gets taxed.
Aren't estate assets frozen when the estate dies? The way it was explained to me by my brother, we will have to come up with the 40% in taxes to claim the inheritance - our parents holdings cannot be liquidated to pay off the govt.
in each of those instances you are purchasing or using something in order to create a transaction.
the estate tax does not tax the money as it is passed to the beneficiary. the estate is taxed and the beneficiary gets what is left. that is not a transactionary tax.
but we can agree to disagree on that. will you at least grant that a lot of little people are getting hosed by this tax that people think is only applicable to the ultra wealthy?
it depends on what the inheritance is BN. the estate can be liquidated to pay the tax, but if there is something that you don't want to sell off, then you will have to come up with the money to pay it.
keep in mind the beneficiary isn't the one being taxed, the estate is.
Moving the estate to the beneficiary is the transaction being taxed. Beneficiary is, in some sense, paying to accept this money. It is, after all, his/her inheritance, and in this country, we feel that we have a *right* to that money because it "belongs" to us.
the estate tax does not tax the money as it is passed to the beneficiary. the estate is taxed and the beneficiary gets what is left. that is not a transactionary tax.
You might as well say that the price of the good is raised, and then the purchaser pays the higher price. The point at which the tax is applied is semantice.
but we can agree to disagree on that. will you at least grant that a lot of little people are getting hosed by this tax that people think is only applicable to the ultra wealthy?
No. The spouse is exempt.
No.
With one caveat - I think
all dollar values, including the estate tax exemption, the AMT cutoff, etc, in tax law should be indexed to inflation.
the spouse is exempt depending upon titling of assets.
why in the world would you support this redistribution of wealth? someone works hard and becomes successful so now the government is entitled to 40%? how do you figure?
if i work hard, save, invest, and mix in a little luck i should be able to pass what i make on to my son without regard to how much or little i made. it is mine. i worked for it. when i die, if i so desire, he should get it.
so, because people are envious of the ultra wealthy; everyday successful people you come into contact with have to hire attorneys to build a well structured trust for investments and a second trust for insurance policies so that they can stay under the estate tax limits.
you can harp on about fears of an aristocracy, but you are being dishonest if you don't think normal everyday people are getting skewered by the estate tax laws.
and we haven't covered some pretty important ground here. what is the cutoff line before the government is entitled to start skimming off the top of someone's assets? IOW, how successful is someone allowed to be before they are no longer "one of us" but "one of them"?
Hey l123:
The story you described reminded me of another one I read some time ago. The story is called
The £1,000,000 Bank-Note , by Mark Twain. You should read it too. It's fiction, unlike your tale, but they do share similar characteristics.
The principal similarities I see are that in both cases the central figure of the story IS solvent, but that the assets are encumbered. The size, the denominations of the assets are so large that they're difficult to use in regular transactions, like buying food or clothing, or paying taxes. They both have liquidity problems, rather than poverty problems.
The protagonist in the story could easily "pay" for his meal with the note, and be done. But in his story, he uses a different strategy of running lines of credit to track his obligations, which he later pays.
It seems simple to me that the people in the story you told could easily avail themselves of the same solution: credit. None of the assets have to be sold outright. The tax bill could easily be afforded by some combination of credit/cash/etc.
and we haven't covered some pretty important ground here. what is the cutoff line before the government is entitled to start skimming off the top of someone's assets? IOW, how successful is someone allowed to be before they are no longer "one of us" but "one of them"?
Yeah, they gotta pay. Sucks to be dead, but that's the law the way it's written now.
The dilema you point out regarding the cutoff figure for dividing us and them... yep. That's a toughie. But so's calling 18 executable and 17 not. Is one more guilty because of a number on a calendar? And so is the poverty line. Does one family suffer less because they have one more dollar in their collective pocket? Not likely. What about driving 21 mph in a school zone. Is that measurably less safe than 19 mph? The kid run over in the crosswalk will never be able to tell the difference.
So pointing out in a given specific instance that the limits in place are unfair, tragic, too close to call, etc, is just a distraction from the more important question: Should there be a limit at all? Why have a specific figure?
So we don't have to go to the g-dam mat every time and figger out if this case is worthy of an exemption or not. You and I both live in a world where these arbitrary limits are in place everywhere and yet I don't hear any outcry that speed limits should be lifted everywhere. Or that price tags on goods should be removed in favor of having to bargain for every item. Shit, why the hell measure anything anyway?
that's kinda the point BigV - i don't believe there should be an estate tax at all. so i am asking the folks who support one, what is the cut off? who gets to give up 40% and who gets to keep it all? it goes back to the same question i've asked before when talking about income taxes - what number defines "wealthy"? people don't seem to realize that the numbers you used to define wealthy when bitching about the rich are found in your own neighborhoods.
the truly wealthy people (i'm not talking about iconic wealth like the hiltons)live in middle class neighborhoods, drive sensible cars, wear sensible clothes, work 50-60 hours week, drink beer and play in the side yard with their kids just like you do. if you don't believe it, look up the statistics for location of millionaires in your area. most of them don't live in the most glamorous neighborhoods and drive BMW's. (most popular milionaire car? used camry)
it is just a feature of politrix that gets us to point our fingers at those "wealthy" people who never have to mingle with the likes of us. one of the wealthiest guys i know is a damn letter carrier for the USPS, for crying out loud! he took the ant and the grasshopper story to heart and lives it. one of the most cashstrapped desperate fools i know has a hummer and a $1.3MM home. go figure.
the spouse is exempt depending upon titling of assets.
Ok, title the assets in a way that makes it work for the result you're seeking...Just curious, would that be Joint tenancy with rights of survivorship?
why in the world would you support this redistribution of wealth? someone works hard and becomes successful so now the government is entitled to 40%? how do you figure?
*RED HERRING ALERT*
Are we talking about what is or what should be? In the case of what is, I'll defer to your more recent exposure to the facts and the laws and accept your conclusion that the government is "entitled" (loaded word) to the taxes owed in this case. If we're talking about what should be, then who in your example is the hard worker? The dead man? Are you arguing against an inheritance tax? Or is this an example of someone still alive, and we're talking about an income tax? 40% income tax seems way high, I agree. But if you're talking about an estate, then I have some questions. Would you include this kind of transfer of assets as income? How does that jive with your position of flatly taxing all income over $30,000?
if i work hard, save, invest, and mix in a little luck i should be able to pass what i make on to my son without regard to how much or little i made. it is mine. i worked for it. when i die, if i so desire, he should get it.
so, because people are envious of the ultra wealthy; everyday successful people you come into contact with have to hire attorneys to build a well structured trust for investments and a second trust for insurance policies so that they can stay under the estate tax limits.
Who benefits under this structure I wonder? But hey, it's yours as you point out. When you transfer it to someone else, it's not yours, by definition. If I am on the ball enough to plan my estate, then I should plan accordingly to include the impact of such forces, like estate taxes. It's really a matter of planning well or poorly. I could keep all my money in the mattress, and realize some advantages and disadvantages, but I shouldn't complain about the results of my own informed choices.
Not that I don't make mistakes in my choices, and still complain. And I sure have a lot of company in this. But that's the way it is. I deal with it. My life is the sum of my choices.
you can harp on about fears of an aristocracy, but you are being dishonest if you don't think normal everyday people are getting skewered by the estate tax laws.
Skewered? I agree that people are people, and only the conclusions we jump to when we associate the things that money can do with those people do differences come up. Look in the other direction of the linear scale you imagined. Look downward. Do you not see many many more people less well off than the ones you described as skewered? It's a matter of perspective.
Speaking of perspective, this family you describe, is their glass half full or half empty? Or 60% full and 40% empty? Can we focus a moment on the volume that the 60% represents? Is it enough? It may be missing a honkin' chunk but what remains is still bigger than many others, and still big enough to do many things. I once heard money described as stored choice. That kind of estate represents plenty of choices.
It's only when the focus shifts to the missing part that the loss is felt. That's when it feels like taking. Count your blessings is good advice. Striving and earning and the fruits of a capitalist society are all Good Things. But striving for the sake of striving is not a good thing. What about contentment. What about the concept of enough. When is it enough. And when I have enough, *I* believe the excess *should* be shared. Shared with my family, with my community, and with the rest of humanity.
as far as the titling issue, it is different in different states. you'll have to check your situation.
whether some people are more or less blessed with monetary assets, etc. is completely irrelevant. if a person works hard and gathers assets for his family why should the gov't get a second crack at it?
and i honestly don't know what you are calling a red herring. the estate tax is a redistribution of wealth, pure and simple. we say we don't agree with that in our country, but then we turn around and are willing to do it in this way.
BTW, the family involved is taking it all very well, but stop and look at it from their perspective. work hard, build a life, gather assets, then have to give the gov't 40% when he dies. why?
i guess part of my point is that having ridiculous taxes like this only generates more business for CPA's and attorneys. the ultra wealthy protect what they have. even most of the everyday successful people in danger of the estate tax build their trusts to avoid it. so in the end the people who do end up paying for it are the ones that aren't much different from us.
as for me? i'm not in any danger of going over those limits any time soon. but i do have an excellent trust in place and all of my life insurance is owned by a separate Life Insurance Trust so that it beats the aggregate rules.
i just think it is sad that people don't see this as a problem because the politicians have been so successful at turning the classes against eachother. i guess they have to keep us stabbing at each other so we won't turn our knives on them, huh?
you can harp on about fears of an aristocracy, but you are being dishonest if you don't think normal everyday people are getting skewered by the estate tax laws.
They arent. The total amount of assets transferred to the spouse
is deducted before tax, as long as the spouse is a US citizen. And if the total estate is $1,500,001 million, the tax is only on the last $1, 0r 45 cents. There's no sudden point where if you make $1 more, you suddenly owe $450,000. Just like poor people pay no income tax, they pay no estate tax. The bar is just at a different level, so the middle class pays no estate tax either. It only affects 2% of the poulation.
As for what the cutoff point is, that's something to be hashed out in legislation. I'd be happy with $10 million now, indexed to inflation.
that's kinda the point BigV - i don't believe there should be an estate tax at all. so i am asking the folks who support one, what is the cut off?
Ok, you found one, I do support it.
who gets to give up 40%
Paris Hilton's daddy.
and who gets to keep it all?
Small estates.
Ok, you're looking for a number, right? Why not have a sliding scale? Something like mutiples of our income tax brackets? Some Median income times 2x or 3x is the floor, and then in chunks moving upward from there?
it goes back to the same question i've asked before when talking about income taxes - what number defines "wealthy"? people don't seem to realize that the numbers you used to define wealthy when bitching about the rich are found in your own neighborhoods.
the truly wealthy people (i'm not talking about iconic wealth like the hiltons)live in middle class neighborhoods, drive sensible cars, wear sensible clothes, work 50-60 hours week, drink beer and play in the side yard with their kids just like you do. if you don't believe it, look up the statistics for location of millionaires in your area. most of them don't live in the most glamorous neighborhoods and drive BMW's. (most popular milionaire car? used camry)
Ok, I accept that there might be some modest people in my area that have large assets. Ok. Your point? That they're stand up people, who are involved in the community, that they care about their families, that getting things done ranks ahead of showing off? Yeah, so what? Is that exclusive somehow of wanting to pay their fair share?
I heard another thing that seems relevant here--
It's not about equal giving, it's about equal sacrifice.
Yes, sacrifice. Many people are doing it, and it's NOT equally shared, nor are the benefits of those sacrifices equally shared. That is unfair.
it is just a feature of politrix that gets us to point our fingers at those "wealthy" people who never have to mingle with the likes of us. one of the wealthiest guys i know is a damn letter carrier for the USPS, for crying out loud! he took the ant and the grasshopper story to heart and lives it. one of the most cashstrapped desperate fools i know has a hummer and a $1.3MM home. go figure.
So you're saying that "wealthy" isn't what shows, right? I agree with that. Wealthy is more than a figure on a balance sheet. Yes, money and material possesions are part of the equation, but no amount of money, regardless of how it's spent or saved is enough to create the comfort and security of real wealth. Only a state of mind can complete the picture. A state of mind of contentment, that realizes sufficiency.
You aptly point out that the millionaire postman who drives a used Camry displays more happiness than the overextended fool with the Hummer. Would the postman be any less content if his bank balance were, 25% lower? Hard to say, but someone who functions that way isn't wrapped around the axle like the Hummer-fool. By the way, why a Hummer? Was the Chevy Suburban or Ford Excursion inadequate in some way?
Think about what the wealth represents. Security, options, choice, peace of mind. Those are all head and heart things, not figures on a balance sheet. The more loosely those goals are connected to the amount of money in the bank one has, the more likely one is to reach them both.
A question that comes to mind is whether you should be taxed on 'stuff' or money or both or what?
1) The postal millionaire (funny sounding that) has a million dollars worth of stuff dies and leaves all of his stuff to his heirs.
2) Credit laden stock broker millionaire has a million dollars in the bank and stocks dies and leaves all of his monies to his heirs.
In scenario 1, the heirs has to sell stuff to pay the estate tax and now has no home or business to live in or continue with.
In scenario 2, the heirs go on about their business.
Probably a bit oversimplified but not untrue.
NOT oversimplified.
The magic words to make this spell a reality are "Asset Protection Trust".
Until 1987 (?) it was not legal anywhere in the US to created a trust for the benefit of oneself. Well, Alaska changed their state laws to permit such a trust, and seven more states followed suit since then.
The upshot of the the trust is that it is the owner of record of all the assets, stocks, bonds, property, maybe a car... whatever. But you still get to move the money around, and you get to drive the car. But if you're sued, you can only be sued for *your* property. Which is what, the shirt on your back maybe.
Hey, everybody should setup something like this, yeah? Well, since not every state has this legal structure in place, to set one up from wherever you live will cost thousands of dollars. More if you're out of state. And then thousands of dollars per year to have an in-state trustee manage the trust.
This is not a problem for the group of people who keep stacks of money by the fireplace for kindling (that was funny l123!), but for the diligent postman, this could be a serious drag on his lifestyle.
Now, this news comes to me on the heels of the news of the passage of the bankruptcy "reform" legislation passed by Congress today. I do not know what effect such a trust would have on the estate - heirs relationship, but I cannot imagine that such a Good Thing would be restricted to only living people. I mean the trust doesn't die, right? Like a corporation, it is immortal.
Like a corporation, it is immortal.
That was going to be my next question. Isn't that the idea behind forming a corp to handle lottery winnings and such?
It really sucks that you have to go so far out of your way to protect your assets.
Is the trust going to take the place of the family legacy?
The Washington Post has a pretty good
writeup on the Estate Tax.
I bought some software from Europe and on the form they wanted my VAT number. Click on the wtf button and it told me if I lived in Europe, I'd have to pay 17.5% value added tax. Sounds like sales tax to me. Sounds high too. :eyebrow:
Back to Social Security for a minute...
I have been wondering about the Bush administration's touting of Private Accounts (or personal accounts or whatever the hell adjective scored highest in the freaking focus groups). This PA element, is OWNED, by the person, it's inheritable, it's throttleable (more or less aggressive compositions). I think those are the highlights. Here's my question. I'm not trolling, I'm sincerely trying to understand how this is different from Individual Retirement Accounts?
Seriously, don't IRAs do what the PAs are promised to do? How are they different? I already know about Roth IRAs and non-Roth IRAs, I understand how my 401(k)s work. I think I get most of Social Security.
But the difference between IRAs and PAs, *blink blink*, nuttin.
Help please?
The big difference is that currently, X dollars out of your paycheck go into Social Security, and anything you want to put into your IRA is more out of your paycheck.
In this system, the money going into the private account would come out of what you are already putting into Social Security, so you wouldn't see a change in your paycheck. The two big disagreement points are: whether you will end up with as much money in the long run compared to other proposed Social Security reforms, and whether we can afford to pay current retirees with so much less money going into Social Security.
And what happens if you run out of money in a fund-based system instead of a monthly-payment-based system.