Minimum Wage Study - MW Does Not Kill Jobs

[Loren Pechtel]

Huh? I'm not claiming zero-sum, merely that there is an inverse relationship.

Between what and what, exactly?
Inequality and high employment?

Let us stipulate for the sake of argument that such a relationship exists. There would be undesirable extremes and the question is only where in the middle to strike a balance. IOW,

Agreed. Too far in either direction is a bad thing. That normally only happens in stagnant or controlled societies, though. In free societies the applecart gets upset too much.

how much equality or inequality are we willing to tolerate? Should there be any limits on “ownership” in a society where money is speech? You would tolerate quite a bit more poverty than I would, in favor of more people making hundreds or thousands -or even hundreds of thousands of times the defined poverty level … we should at least eliminate passing on stocks tax free when they croak. Otherwise the dynasty just gathers wealth, as it remains invested while very rich simply borrow millions or billions from willing banks for their personal wants. The whole “operation” ends up almost tax free, from the perspective of owners (major stockholders), at only the cost of the loan.
IOW I would move things quite a way left of your position.

Try a little reality check.

Yes, you get a basis step-up (or occasionally down) but as someone who has had to handle an estate without good recordkeeping I'm very glad that firewall exists. However, the dynasty pays inheritance tax that's considerably higher than the capital gains tax they didn't pay.

 

[Loren Pechtel]

BLS article on the working poor. It is dated, but I think useful. In 2019, about 6 million people working 27 hours a week and were in poverty. Around 4% of the work force, so not a huge percentage, but not a tiny overall number. Not graduating high school made someone more likely to in poverty 1 in 6.

Key: 27 hours/week.

That's where poverty comes from--not working full time. This is something I think should be fixed--as it stands it's cheaper to hire someone under 30 hours/week than someone over that. Simple fix: Benefits that are still useful in lesser quantities are still paid. (You work 20 hours/week, you get half the vacation someone working 40 hours/week gets.) Benefits where a part share isn't too useful get the cash equivalent of the hourly cost of such benefits.

 

[Elixir]

Huh? I'm not claiming zero-sum, merely that there is an inverse relationship.

Between what and what, exactly?
Inequality and high employment?

Let us stipulate for the sake of argument that such a relationship exists. There would be undesirable extremes and the question is only where in the middle to strike a balance. IOW,

Agreed. Too far in either direction is a bad thing. That normally only happens in stagnant or controlled societies, though. In free societies the applecart gets upset too much.

how much equality or inequality are we willing to tolerate? Should there be any limits on “ownership” in a society where money is speech? You would tolerate quite a bit more poverty than I would, in favor of more people making hundreds or thousands -or even hundreds of thousands of times the defined poverty level … we should at least eliminate passing on stocks tax free when they croak. Otherwise the dynasty just gathers wealth, as it remains invested while very rich simply borrow millions or billions from willing banks for their personal wants. The whole “operation” ends up almost tax free, from the perspective of owners (major stockholders), at only the cost of the loan.
IOW I would move things quite a way left of your position.

Try a little reality check.

Yes, you get a basis step-up (or occasionally down) but as someone who has had to handle an estate without good recordkeeping I'm very glad that firewall exists. However, the dynasty pays inheritance tax that's considerably higher than the capital gains tax they didn't pay.

OMFG, lots of billionaires are glad you’re not managing their estates. The vast bulk of that wealth is held in dynastic trusts that are never taxed, and never spent other than to repay the “loans” that the beneficiaries live on.
What you describe is the pablum fed to the masses to pacify their justifiable anger at the fact that they must bear the burden of billionaires’ extravagance.

 

[robnisch]

Minimum Wages for Tipped Employees

www.dol.gov

This confusing. What a mess! $2.13/hr.

 

[ZiprHead]

BLS article on the working poor. It is dated, but I think useful. In 2019, about 6 million people working 27 hours a week and were in poverty. Around 4% of the work force, so not a huge percentage, but not a tiny overall number. Not graduating high school made someone more likely to in poverty 1 in 6.

Key: 27 hours/week.

That's where poverty comes from--not working full time. This is something I think should be fixed--as it stands it's cheaper to hire someone under 30 hours/week than someone over that. Simple fix: Benefits that are still useful in lesser quantities are still paid. (You work 20 hours/week, you get half the vacation someone working 40 hours/week gets.) Benefits where a part share isn't too useful get the cash equivalent of the hourly cost of such benefits.

People working part time generally get no benefits at all.

 

[Politesse]

Apparently, one State raising the minimum wage puts every other State's workers out of work.

You should see the impact it's had on American Samoa!

That whole affair would have benefited my state, if they hadn't backed down. Same industry, less competition, win-win.

 

[Loren Pechtel]

Try a little reality check.

Yes, you get a basis step-up (or occasionally down) but as someone who has had to handle an estate without good recordkeeping I'm very glad that firewall exists. However, the dynasty pays inheritance tax that's considerably higher than the capital gains tax they didn't pay.

OMFG, lots of billionaires are glad you’re not managing their estates. The vast bulk of that wealth is held in dynastic trusts that are never taxed, and never spent other than to repay the “loans” that the beneficiaries live on.
What you describe is the pablum fed to the masses to pacify their justifiable anger at the fact that they must bear the burden of billionaires’ extravagance.

If it's in a dynastic trust there's no death to have a step-up and thus it's irrelevant. Please have a consistent position!

 

[Loren Pechtel]

BLS article on the working poor. It is dated, but I think useful. In 2019, about 6 million people working 27 hours a week and were in poverty. Around 4% of the work force, so not a huge percentage, but not a tiny overall number. Not graduating high school made someone more likely to in poverty 1 in 6.

Key: 27 hours/week.

That's where poverty comes from--not working full time. This is something I think should be fixed--as it stands it's cheaper to hire someone under 30 hours/week than someone over that. Simple fix: Benefits that are still useful in lesser quantities are still paid. (You work 20 hours/week, you get half the vacation someone working 40 hours/week gets.) Benefits where a part share isn't too useful get the cash equivalent of the hourly cost of such benefits.

People working part time generally get no benefits at all.

Read what I'm suggesting.

 

[Worldtraveller]

Try a little reality check.

Yes, you get a basis step-up (or occasionally down) but as someone who has had to handle an estate without good recordkeeping I'm very glad that firewall exists. However, the dynasty pays inheritance tax that's considerably higher than the capital gains tax they didn't pay.

OMFG, lots of billionaires are glad you’re not managing their estates. The vast bulk of that wealth is held in dynastic trusts that are never taxed, and never spent other than to repay the “loans” that the beneficiaries live on.
What you describe is the pablum fed to the masses to pacify their justifiable anger at the fact that they must bear the burden of billionaires’ extravagance.

If it's in a dynastic trust there's no death to have a step-up and thus it's irrelevant. Please have a consistent position!

Are you pretending you don't know how they work, or do you really not know how this whole thing works?

 

[Elixir]

If it's in a dynastic trust there's no death to have a step-up and thus it's irrelevant. Please have a consistent position!

I’m neither able nor inclined to explain all the ins and outs to you Loren. I DO KNOW that versatility of dynastic trusts enables the transfer of equities that would otherwise invoke taxable realized gains, that are deferred as if never received. Wealth can be managed and grown as if it never belonged to anyone, even as it serves as collateral for whatever the owners want. It’s a fail-proof scheme, and only available to the few with truly excessive wealth.

IT’S EFFED UP, LOREN. The current state of our oligarchy is ample proof of that.

 

[Loren Pechtel]

If it's in a dynastic trust there's no death to have a step-up and thus it's irrelevant. Please have a consistent position!

I’m neither able nor inclined to explain all the ins and outs to you Loren. I DO KNOW that versatility of dynastic trusts enables the transfer of equities that would otherwise invoke taxable realized gains, that are deferred as if never received. Wealth can be managed and grown as if it never belonged to anyone, even as it serves as collateral for whatever the owners want. It’s a fail-proof scheme, and only available to the few with truly excessive wealth.

IT’S EFFED UP, LOREN. The current state of our oligarchy is ample proof of that.

You don't understand. There is no actual transfer, the trust controls the equities and who the trust sends money to can change. But trusts don't have estate step-up because they don't have estates in the first place.

You are doing a see-what-sticks attack and don't realize you're mixing things that don't mix.

 

[Elixir]

You don't understand. There is no actual transfer, the trust controls the equities and who the trust sends money to can change.

YOU don’t understand. “There is no transfer” amounts to “there are no realized gains”, hence no taxes. The trust doesn’t “do” shit, it just sits there gaining value. If Joe Beneficiary needs a new jet or yacht, banks will line up to give him the loan, with trust assets as collateral. The trust pays the loan back over time, deducting the interest from the taxable component of the funds paid back - a rate that is typically a tiny fraction of what the taxes would have been had the beneficiary taken the money as a distribution. The bank gets a few million in interest, the beneficiary gets his megayacht or whatever, and the government gets a token slice of the loan repayments (minus interest of course). The principle that enabled the whole transaction remains untaxed, and optimally, has gained more value over the term of the loan than the loan amount. That’s how dynastic wealth “works”.

 

[Loren Pechtel]

You don't understand. There is no actual transfer, the trust controls the equities and who the trust sends money to can change.

YOU don’t understand. “There is no transfer” amounts to “there are no realized gains”, hence no taxes. The trust doesn’t “do” shit, it just sits there gaining value. If Joe Beneficiary needs a new jet or yacht, banks will line up to give him the loan, with trust assets as collateral. The trust pays the loan back over time, deducting the interest from the taxable component of the funds paid back - a rate that is typically a tiny fraction of what the taxes would have been had the beneficiary taken the money as a distribution. The bank gets a few million in interest, the beneficiary gets his megayacht or whatever, and the government gets a token slice of the loan repayments (minus interest of course). The principle that enabled the whole transaction remains untaxed, and optimally, has gained more value over the term of the loan than the loan amount. That’s how dynastic wealth “works”.

Remember that this was because you were complaining about basis step-up. The basis step up happens when the assets are passed by inheritance. The trust doesn't pass them, no inheritance, no step up.

You're complaining about two mutually incompatible things.

 

[Elixir]

The basis step up happens when the assets are passed by inheritance. The trust doesn't pass them, no inheritance, no step up.

BZZZZT!
Thanks for playing. Be sure to pick up your copy of our "No Really, It's FAIR!" board game on your way out.

Inherited cash generally isn't taxable unless the estate exceeds* the applicable estate or inheritance taxes. Stocks also aren't taxable unless they are subject to estate or inheritance taxes but could result in capital gains taxes when you sell them.

The whole point is THEY DON'T SELL THEM. Ergo, "basis" even if it stepped up, doesn't matter. It never forms the basis of taxes due unless the equities are sold. It's PROCEEDS of a stock SALE that matter. All that typically gets sold is what is required to make the payments on the loan(s) taken against the stocks (minus interest of course), typically a fraction of what the taxes would be on the entire loan amount if it was taken as income.

Here's another link - read and learn.

* Variable per state, usually into the $10m+ range, well below the typical value of the estates of billionaires

 

[Loren Pechtel]

The basis step up happens when the assets are passed by inheritance. The trust doesn't pass them, no inheritance, no step up.

BZZZZT!
Thanks for playing. Be sure to pick up your copy of our "No Really, It's FAIR!" board game on your way out.

Inherited cash generally isn't taxable unless the estate exceeds* the applicable estate or inheritance taxes. Stocks also aren't taxable unless they are subject to estate or inheritance taxes but could result in capital gains taxes when you sell them.

The whole point is THEY DON'T SELL THEM. Ergo, "basis" even if it stepped up, doesn't matter. It never forms the basis of taxes due unless the equities are sold. It's PROCEEDS of a stock SALE that matter. All that typically gets sold is what is required to make the payments on the loan(s) taken against the stocks (minus interest of course), typically a fraction of what the taxes would be on the entire loan amount if it was taken as income.

Here's another link - read and learn.

* Variable per state, usually into the $10m+ range, well below the typical value of the estates of billionaires

How many times do I have to point out that you are claiming two contradictory things?

You can't get basis step-up and avoid inheritance with a dynasty trust. The whole point of dynasty trusts is avoiding triggering inheritance tax--and thus there's also no basis step up. Basis step-up is worth a lot less than avoiding inheritance tax, you're attacking an irrelevancy.

 

[Elixir]

Yawn.

“For example, suppose your grandparent initially purchased that $100,000 of stock for just $25,000 many years ago. You don’t pay capital gains taxes based on the $25,000 initial value. Instead, your cost basis in the asset is its value at the time of your grandparent’s death.”

 

[Worldtraveller]

Yawn.

“For example, suppose your grandparent initially purchased that $100,000 of stock for just $25,000 many years ago. You don’t pay capital gains taxes based on the $25,000 initial value. Instead, your cost basis in the asset is its value at the time of your grandparent’s death.”

Yeah, this is basic finance. I barely follow my investments (that's why I pay an expert) and even I know that. Add this to the list of things LP doesn't understand, but will argue with experts for hours about.

 

[Elixir]

Yawn.

“For example, suppose your grandparent initially purchased that $100,000 of stock for just $25,000 many years ago. You don’t pay capital gains taxes based on the $25,000 initial value. Instead, your cost basis in the asset is its value at the time of your grandparent’s death.”

Yeah, this is basic finance. I barely follow my investments (that's why I pay an expert) and even I know that. Add this to the list of things LP doesn't understand, but will argue with experts for hours about.

I’m no expert! I do have two dead parents and have done a tiny bit of planning of my own…
But this is wealth building 101. Out of my league of course, and well outside my main areas of interest but it’s good to know how mega fortunes are maintained.

 

[Loren Pechtel]

Yawn.

“For example, suppose your grandparent initially purchased that $100,000 of stock for just $25,000 many years ago. You don’t pay capital gains taxes based on the $25,000 initial value. Instead, your cost basis in the asset is its value at the time of your grandparent’s death.”

Continuing to prove both A and B is irrelevant. They are separate paths that do not intersect. There is no A that is a B nor vice versa.

 

[Loren Pechtel]

Yawn.

“For example, suppose your grandparent initially purchased that $100,000 of stock for just $25,000 many years ago. You don’t pay capital gains taxes based on the $25,000 initial value. Instead, your cost basis in the asset is its value at the time of your grandparent’s death.”

Yeah, this is basic finance. I barely follow my investments (that's why I pay an expert) and even I know that. Add this to the list of things LP doesn't understand, but will argue with experts for hours about.

I’m no expert! I do have two dead parents and have done a tiny bit of planning of my own…
But this is wealth building 101. Out of my league of course, and well outside my main areas of interest but it’s good to know how mega fortunes are maintained.

The problem is that he's applying truth about estate handling to dynasty trusts. Dynasty trusts do not involve any estates!