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January 03, 2013


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The three of us -- we are traveling with our son -- spend the evenings playing full contact Scrabble.


That's the way I play Scrabble, too.


I saw this 557 foot behemouth

If Abramovich thinks that's a worthy way for him to spend one billion dollars I think that's a pretty sad statement of his values.


(Excuse me - 590 million dollars.)

Sir Charles


Rumor has it that with cost overruns the damn thing cost close to a billion.

My son tells me he paid Amy Winehouse $2 million to sing at his wife's birthday party. I wonder if Amy managed to be sober for that gig.

See my update as to further escapades of the rich and infamous.

(Although I have to say, the fact that I am sharing a beach with the guy does give me a bit of a sense of validation in terms of places to park my towel and sunscreen, since obviously this guy can pick any damn beach he wants.)

low-tech cyclist

I'd like to see brackets continuing on up. No reason not to have higher brackets kick in at $10M, $50M, $100M, etc.

There's really no reason dividends shouldn't be taxed as regular income. And ditto capital gains, although I'm good with adjusting the basis for inflation.

And other than creating a new extortion point of Feb. 28, the thing that most depressed me about the fiscal cliff deal was the reduction of the future estate tax rate from 55% to 40%. The point of the estate tax should be to prevent the formation of a permanent overclass. I don't care if estates of $5 million aren't taxed, but I don't want rich people's heirs being able to toss millions into elections in perpetuity.

I feel that there should be a level above which estate taxes become genuinely confiscatory - that there should be a ceiling on how much you can pass to your heirs, maybe ~$100,000,000.

My son tells me he paid Amy Winehouse $2 million to sing at his wife's birthday party. I wonder if Amy managed to be sober for that gig.

Hey, at least she managed to be alive for it.

Sir Charles

l-t c,

Agree on the estate tax, although I think I would make it more of a gradual thing. Start at $2 million and tax it at 20-25%, then escalate through a series of levels. I think I would stop at about 50% though -- otherwise you end up with huge incentives to work around the tax and I think diminish revenue.

Abramovich probably thinks he could have had Winehouse resurrected to play the gig.

low-tech cyclist

- In the wake of the President's compromise placing the higher tax rates on family income above 450,000 rather than 250,000 there was a lot of complaining in the lefty blogosphere about the failure by many in the media to characterize people who fall in that range as rich. I think that this has a lot to do with media people being surrounded by a lot of couples in the DC and NYC areas who fall into this range -- two successful professionals who are wage earners and vastly better off than, well, 98% of their countryman, but are nevertheless pretty much wage earners. In other words, people who can't and don't rely on investment income and who if they lost their jobs would be in some considerable degree of difficulty.

I won't argue over whether people in the $250K-$450K bracket should be characterized as rich; my personal definition of 'rich' is when you have enough money to live affluently without working.

But I will say this: anyone in that bracket who would be in a considerable amount of difficulty if they lost their jobs, would deserve every bit of that difficulty, because, yes, even in the DC area, you can stash away money hand over fist at that level of affluence.

My wife and I aren't in that bracket, though we can see it from where we are. But if we both lost our jobs tomorrow, we could manage for a couple of years without digging into the retirement fund, probably 3-4 years if we actually economized. And this despite the fact that we haven't even been at this level that long - 15 years ago, my annual salary as a college professor was $26,800, and my wife's salary was similar.

But if people at that level of affluence feel they have to live in DC and send their kids to Sidwell Friends, rather than living in Montgomery or Fairfax counties and relying on their excellent public schools, then of course they're going to burn through a lot more money and save a lot less, but it's strictly a matter of choice.

It isn't really important to me to see them hit with a higher tax bracket than the one I'm in, but I've got no sympathy for problems they have that are basically the function of their need to have the trappings of affluence.

Bill H

Not to rain on anyone's parade, but I could post an almost identical picture taken right here in San Diego. The beach would be wider but, if taken fairly early in the day, the air temperature would be 44 degrees and the water temperature would be 57 degrees. I somehow suspect the temps you are experiencing are a bit higher than that. I hate you. :-)

kathy a.

i continue to believe obama did not want to go over the cliff because it would have hurt regular people and lots of them, and would have created chaos. yeah, yeah -- also "market confidence" and whathaveyou. (isn't a good bit of "market confidence" dependent on whether people can afford to buy stuff?)

raising the cutoff for higher taxes to $450,000 is ridiculous, but not worth throwing all the people earning far less under the bus.

i honestly cannot understand why UNearned income (capital gains, dividends) is taxed at lower rates than regular income. why would this make any sense? profit is money.

i pretty much feel the same way about inheriting cash or equivalents -- groovy if it happens, but why exactly is that so special that you don't need to pay taxes? there are arguments for making adjustments for a small ongoing business or a farm, for example -- selling it to get the tax money could kill the thing -- but aren't there other ways to organize ownership, such as making it corporate property instead of personal property? if there is a family home with family still living in it, a joint tenant deed lets it pass to survivors by operation of law, no fuss and no taxes. "daddy made a ton of money, and now it's mine mine mine mine, you can't have any" just does not strike me as sensible policy.

this is probably why i'm not an economist or banker or tax lawyer -- for those with wads of money already, there are all these special rules for getting and hoarding even more of it.

Sir Charles


It's pretty much in range from 76 to 83, with a constant breeze. Not tough to take. I haven't worn shoes or long pants since Christmas Eve. Kind of nice.


People seem to feel that inherited money should be more favoray treated than work for reasons I don't understand.

low-tech cyclist

there are arguments for making adjustments for a small ongoing business or a farm, for example

kathy - there are, indeed. And unless they've changed the law in the past few years, estates with a farm or small business as a substantial asset get to spread out their estate tax payments over 15 years, which gives the heirs the opportunity to pay the tax out of the farm's/business' income over that period.

Which is part of the reason why they can't produce an actual example, from the past couple of decades, of a farm or business that had to be sold in order to pay the taxes.

I'm all for keeping that provision in the law, just to shut up the folks who whinge about the possibility of families losing the family farm/business to "death taxes."


why would this make any sense?

The argument I typically encounter is that this money has already been taxed as income before.

kathy a.

this is absolutely the best news of the day so far: barney frank is willing to fill in as an interim appointee for kerry's senate seat, to get us through the next few months of budget/fiscal horror. he has never been, as he says, "coy" -- and i can't think of anything better than a strong voice with nothing to lose, as we slog forward. :)

low-tech cyclist

On a whole 'nother topic, what do the lawyers here think about Kevin Drum's article that the $1 trillion platinum coin wouldn't really be legal?

His argument boils down to: under the plain wording of the law, the $1 trillion platinum coin is clearly legal, but that's also clearly not what the Congresscritters who drafted the law intended, so the courts would rule against the legality of the $1 trillion coin.

I was pretty sure that intent only comes into play when there's some ambiguity in the meaning, or conflict with another law, or if the law as written is impossible to follow, or some such. But IANAL, and I could certainly be wrong.

low-tech cyclist

The argument I typically encounter is that this money has already been taxed as income before.

That's the argument I hear too. The rebuttal is that everything has already been taxed before. I paid taxes on the money I pay my cleaning lady when I earned it - why should she have to pay taxes on it, then? Ditto the money I pay for groceries - why should I pay sales tax on that money, when I've already paid income tax on the very same money?

The fact is that money is routinely taxed when it changes hands. The exceptions all seem to gravitate towards the top of the ladder: no financial transactions tax, for instance, and no sales tax on a doctor's or lawyer's bill.



Seeing it put that way I now understand why the argument that it's already been taxed once generates popular support even among those largely unaffected by capital gains tax rates. Taxation on money merely because it changes hands, to a lot of people, is bound to subconsciously resemble the "fees" middle men money changers generate (& sometimes become lavishly wealthy on) for the services rendered (the sort of resentment that has sometimes been a factor in Antisemitism, particularly in regards to "Jewish bankers").

Sir Charles

The argument that things have been taxed before is often quite specious. For example, the house that my wife and I bought 15 years ago has nearly tripled in value. (Some of which reflects capital improvements paid with dollars that have been taxed but several hundred thousand of which is pure appreciation.) Assuming we live long enough to pay it off in 13 years, my kid could receive what is now an asset worth about $1.3 million tax free under the "stepped up basis" in tax law. The same would be true with stocks. That's a nice windfall to receive in life.

kathy a.

oddjob, i doubt the thinking goes so deep or historical as what you suggest. i mean, the GOP isn't complaining about double-dipping and special breaks for the rich people. but "it was taxed before" is one of those simple, stupid soundbites -- meant only to outrage, not to inform -- and it fits so nicely with "the gummit is taking from you."

we had to bully my dad into making a will, and putting his "big" asset -- a very modest tract home, where we lived from 1960 onward -- into a joint tenancy with his wife of 15 years. so we would not have to deal with selling the house, ousting our stepmother, and who got what of his large collections of crap. i really do not mind that automatic transfer of the little house. but -- i also do not mind if my kids have to pay inheritance taxes on whatever we have left.


I would base higher brackets upon how far from the median wage, percentage wise.

Bill H

Sir Charles, I believe you are mixing two different arguments. I have not seen the "it has been previously taxed" argument applied to the estate tax, but the more common argument that the estate tax is "unfair" because it forces the sale of property and causes the heir to lose family-owned property and/or business. I find the argument that "my father owned a majot league baseball team, therefor I should own a majot league baseball team" hugely unpersuasive, but then my father didn't own a majot league baseball team.

You are describing capital gains, and there are a lot of discussions on tax rates for capital gains and whether or not they should be taxed, but I don't think anyone has ever used the argument that they should not be taxed because they have been previously taxed.

I am, overall, in agreement with most here that this nation is seriously undertaxed, and that taxes should be more progressive, so don't think that I'm trying to pick a fight. But we have enough valid arguments, so let's not go wandering off into non sequitur.

Sir Charles


I was thinking in terms of capital gains where assets transfer in an estate of less than $5 million and thus exempt from the estate tax. I believe your heirs in that situation enjoy the stepped up basis in the propert acquired. If my understanding of tax law is correct, they could then turn around and sell that appreciated real estate or stock and face zero or minimal capital gains taxes.

It's a great way to enhance inequality.

low-tech cyclist

Bill - I've repeatedly seen the double-taxation argument invoked against the estate tax. (Along with the 'breaking up the family farm or business' argument, but the ability to pay the FET over 15 years generally shuts up the people who bring up that one.)

We've debated the estate tax a number of times over the years in the Great Debates forum of the Straight Dope Message Board, my original home on the Web, and while I won't say that argument's popped up every time we've done so, it's definitely the norm for it to be brought up.

And the double-taxation argument is practically SOP for the opponents of taxation of dividends and capital gains.

kathy a.

two pieces to share about the fucking guns; h/t to balloon juice for both.

a former NRA president equates gun laws with racism, arguing: “Well, you know, banning people and things because of the way they look went out a long time ago,” Hammer responded. “But here they are again. The color of a gun. The way it looks. It’s just bad politics.”

i hate guns because they "look" like they are able to shoot the shit out of everybody in the vicinity -- which, coincidentally, happens to be true. try working the comparison: this is how that person thinks about black people.

which brings me to the next one, that stand your ground laws actually increase gun killings. you know how gun nuts keep saying that the only way to stop a bad guy with a gun is a good guy with a gun? "[D]ata suggests ... that in real-life conflicts, both sides think of the other guy as the bad guy. Both believe the law gives them the right to shoot."

i mean, duh.


John Podhoretz has a moment. Suppose he'll be *Frummed*? Bartlett, Frum, Ornstein. The former GOP staffer, Mike Lofgren, who went eloquently public last year at Truthout in a two-parter as I recall. Banish-ed all.

Saw a line today that some TeaPartier doesn't appreciate all of this "shunning their noses at us." I bet.

Governance by dare-devils -- quite the concept.

Bill H

Apparently, Sir Charles, you are no more persuaded by "my father owned a 1979 Ford and so I should own a 1979 Ford" than I am by major league baseball team ownership. We seem to be pretty much in agreement.

I have no strong opinion on taxation of dividends, but am not persuaded by the argument that "the money you pay your housekeeper has also been taxed." That money is payment of wages for service rendered, while dividends are simple distribution of profit, so they are by no means the same issue.

I am happier with the Subchapter S arrangement. All of the profit is taxed, but it only taxed once and it is taxed as straight income. Clean and unequivocal.

Sir Charles


I am in an old-fashioned partnership, so not only are all profits attributable to me taxed, but I pay both sides of the FICA tax. Because I am a high income earner in a place with high income and property taxes and have a big ass mortgage, I typically run into significant AMT issues as well. So I end up paying a much higher rate of tax than do the Mitt Romneys of the world.

It looks like I am a prime beneficiary of the fiscal cliff deal, not that I think I really need to be. I think that the answer would be for the truly rich to pay something akin to their fair share.

As I have said, in the end I think we are all going to have to pay a bit more as we deal with the costs of our aging population and try to deal with our neglected infrastructure.

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