Step Up Basis Changes - More Libbie BS

Was gonna respond but I see others already have and done a good job of it.

 

My reply was to the posters comment that it isn’t “fair” that earnings are taxed at a higher rate than LTCGs and dividend income. So if someone, like you just stated you did, saves and grows a portfolio to a point where he/she can live off the dividends then that should be punished? Isn’t that what retirement is?

 

Nope. How would you be punished by paying the same marginal tax rate as the 9-5 working folks? Capital gains/qualified dividend rates don't apply just to retirees anyway.
By the way, I'm retired and the current lower capital gains/dividend rates actually benefit me, so this is not a self interest post.

 

Unless you are retired and make over 250k a year (assuming you are married) then you already pay near zero for qualified dividends and long term cap gains. So yeah I get it isn’t a self interest post.

 

So your clueless as to my post. Got it.

 

Well I know the tax rules, that's not the point.

 

That's what communists say...

 

What’s your point? That everyone should pay ordinary income tax rates on dividends and long term cap gains?

 

Wrong. Nobody likes paying taxes but I'm not whining about it l I just think the system could be more equitable. You disagree, fine. For me, it's not so much the tax but how it's spent.

I don't necessarily trust the gov with my money, but I'm not walking around asking for gov services and expecting somebody else to pay for them. Secondly, and indirectly related, I realize there are others in the system less fortunate than me who deserve a helping hand. It's not just about me.

 

Please explain why that income should be excluded from your taxable income. All estates must file a final tax return. Your stocks; bonds and other capital would be taxed based on current market value less what you paid; why is real estate special. It’s already benefiting from a reduced tax rate on long term gains. We discussed the issue of Cap gains lower rates in tax policy at UF. It’s a very unfair tax benefit. If it’s bought through an IRA or 401k; it’s bought with untaxed money snd gets a deferred income benefit over time. All income should be taxed at same rate. Brain capital is taxed at highest rate; money capital is taxed at a lesser rate. Income is income. We screw the folks making income with sweat and treat the couch income different. I know about the effect that may have on investment markets; this is a pure tax fairness discussion.

If treated as w2; sweat income, somewhat equivalent to the reduced rates on interest and cap gains. We would let the doctor take a depreciation deduction on all the costs incurred to make him/her a doc. If they really wanted to get aggressive they could even include lost income; opportunity cost; while going to college. I can’t think of a place, opportunity costs, are ever considered in the tax code. Same with all college. The guy who goes to a factory; deductions for his travel to work costs, clothing, child care( already do somewhat), lunch etc.