Tuesday, July 29, 2014

Family Money and Values Matter

I posted a couple comments at MinnPost McFadden On Raising Age for Medicare Benefits and they led to some interesting responses.  Then the usual happened...  My response was moderated... So here we go again.
"Welfare:

So is this group advocating that we replace social security and medicare with welfare for the elderly?

I have seen multiple comments that recommend we maintain or cut benefits for the well to do and increase the amount they pay for these benefits.

Why don't we totally eliminate payroll taxes altogether, eliminate medicare, eliminate social security and care for our elderly via Medicaid and welfare?

It would eliminate similar agencies and ensure that the savers/investors pay and the unfortunate/unwise receive." G2A


"Savings:
A couple of people mentioned that we should encourage earlier enrollment to take advantage of receiving premiums from younger/healthier people. I think most of the premiums are paid via the payroll tax. If this is the case, the earlier people "retire" the earlier they stop paying premiums (ie FICA) and start taking money out of the trust fund." G2A


"Your ignorance of how Medicare works (and I presume your ignorance also of how Social Security works) is appalling.

Medicare beneficiaries pay monthly premiums. In addition to all the Medicare tax they paid during their active working years.

Medicare is partially means-based: If you have a healthy, beyond-Social Security retirement income, your Medicare premium goes up. It doesn't take much income for that to happen. The whole system is geared to providing all retirees with basic health care, and with a basic income

That income is also means-based: Higher-wage workers receive higher Social Security benefits per month and per year. However, if you have any retirement income beyond Social Security, which most higher-wage workers do, you pay taxes on your Social Security benefits, with those taxes going right back into the SS trust fund.

To advocate eliminating carefully-drawn plans like Medicare and Social Security in favor of charity-based insecurity in retirement is to deny social safety nets as a concept. I can think of nothing more selfish." Connie


"Hi Connie,
So apparently you support the current use of means based testing to reduce the benefits received and increase the taxes paid for those who paid the most into the programs?

Do you also support removing the cap like the rest of these commenters seem to? Thereby increasing the amount paid by those who pay the most already?

By the way, I never said "charity based"...

Now think of the benefits:
- Low income people wouldn't have to pay those high tax rates. (ie payroll taxes)
- It would be perfectly means based, no one with significant savings would get a penny from the system.
- People would need to spend their wealth before receiving benefits. Less need to worry about that pesky inheritance tax." G2A


"Ah, yes, the 'pesky inheritance tax.'  The estate tax only applies to deceased individuals with an estate of 5.3 million, or couples with an estate of over 10 million in worth. 99.8 percent of American households don't pay any estate tax. The estate tax is supposed to exist so that America isn't saddled with a worthless caste of landed aristocrats." Jonathan


"Jonathan,
Do you support people spending their money waste fully?
Or do you support people saving and investing?

Why would people save invest and create jobs just to give it to the government at their end of days? Would the death tax encourage you to work hard, save, invest, etc.

Just curious." G2A


" Why would they care what happened to their money after they're dead? It's not as if their heirs will be sleeping under bridges with an estate of "only" $4 million.

By the way, very few people with that kind of wealth got it merely by "working hard." If hard work were the only road to wealth, then hotel maids and migrant farm workers would be the richest people in America. Some won the parental lottery--the Waltons and the Kochs and Mitt Romney, for example--while others just happened to get support from the right people at the right time or started out merely affluent and clawed their way to the top through cheating, bribery, treating their employees like slaves, driving all their competitors out of business, etc." Karen
 
"I support the Estate tax.

Q: "Do you support people spending their money waste fully?
Or do you support people saving and investing?"

A: I support the estate tax. People can choose to spend or save the rest of their money as they see fit.

Q: "Why would people save invest and create jobs just to give it to the government at their end of days?"

You seem to be operating under the incorrect assumption that there is some magical machine that you put money in the top of, and out of the bottom come jobs. The idea that you just' invest money and make jobs' is provably false. I guess by that logic, Stuart Mills is a great job creator, But to answer your loaded question, I would imagine that people invest and save in order to spend money on things they need and want... like most humans do. When they die, they don't really need it anymore. I guess that if you are motivated to not work hard because you won't get to keep your money when you are dead, then you have some other issues you need to work through.

Again, 99.8 percent of American households pay no estate tax... I number I quoted because you labeled the estate tax as 'pesky,' when it only affects .02 percent of the population. Something that only affects super-rich dead people doesn't qualify as pesky in my book.

Long story short, the estate tax would have zero effect on my fiscal and work habits were my wife and I worth over 10 million bucks.

Or do you believe that "he who dies with the most toys wins?" Just curious." Jonathan
 Now my response should be familiar to my readers.  And I sure don't think it is any worse than Karen's comment that says people with money "started out merely affluent and clawed their way to the top through cheating, bribery, treating their employees like slaves, driving all their competitors out of business, etc"  Yet the Moderator chose differently.

So my comment went something like this...

Family money and values matter, it is the way in which I have been taught to show my respect for my ancestors who worked hard, saved hard and invested wisely.  For generations the parents in my extended family have helped their kids get a start, and have worked to grow the family's wealth.  During which they modeled learning, continuous improvement, working, saving, charity and investing.  Personally I think these are good values that more American citizens should adopt.

Now my Parents have been married for 51 years, they don't smoke, don't take glamorous vacations, don't gamble much, only had 3 children, they saved, they invested and consistently gave to charities.  Yet for some reason Jonathan and Karen seem to think our family's wealth should be forfeit upon their passing.

This I will never understand. Do we want to encourage the making of poor financial decisions by taking from the savers / investors and giving to those who enjoyed/ spent?  I mean it is hard to get ahead when you are dragging some of these anchors: divorced, single head of household, low education, unambitious, gambling, smoking, drinking, drugs, lavish travel, new cars often, etc.

Now I understand that some folks truly have bad luck, and we need to help them out.  Unfortunately I think some Liberals want to help out everyone who is poor whether it was bad luck, poor decisions or laziness.

Thoughts?

5 comments:

Laurie said...

Is your parents' estate worth more than $10 million?

John said...

I'll answer that blunt question with a dull answer.

Increasing land prices have driven the estates of many hard working conservative farm families to unexpected heights. The simple math would be 1500 acres x $6,000/acre = $9,000,000... Then add in homes, expensive equipment, expensive buildings, other investments, etc...

Quite a bit different than

"America isn't saddled with a worthless caste of landed aristocrats."

"clawed their way to the top through cheating, bribery, treating their employees like slaves, driving all their competitors out of business, etc"

"I guess that if you are motivated to not work hard because you won't get to keep your money when you are dead, then you have some other issues you need to work through."

I am just fascinated how so many Liberals became so angry at people who worked, saved and invested.

John said...

One more point about farmers and why I didn't become one yet. To be a successful farmer, one is constantly investing in the business. (ie land, equipment, etc) This means there is usually very little disposable cash.

Imagine how wealthy you would be if you had lived frugally your whole life and invested 50% of your income into your 401K. (ie business)

Laurie said...

It sounds like your family farm is more valuable than average and actually might have a small estate tax liability down the road, which still seems fair to me, as it doesn't seem likely that paying it would require selling the farm. So whose taxes would you raise if estate taxes were eliminated?

Politifact: Pro-McConnell group says the estate tax makes it hard for family farms to survive

I think those angry liberals don't have family farmers in mind when making those statements you quoted.

I think less angry liberals (me) view nearly all wealthy people as having received monetary rewards far beyond what they have earned.

John said...

10 Ways to Get Rich

I don't see anything about lying, stealing, slavery, etc in this list. Not in this one either...

The Only Way to get Really Rich