Taxable Estate
Ooooooh...political hot button topic. What's "fair" when it comes to passing wealth to your children or progeny in whatever form? Well, "fair" means different things to different people. "Wealth" for most means a very nice home with maybe 5 or 6 bedrooms, an acre or three for the kiddies to play. And maybe a second home on a golf course 100 miles away by the lake or the river or the ocean. And then maybe enough interest income to cover the costs of maintaining those two homes.
So...guess what. In Des Moines, you get the big main house, 9,000 square feet and 3 acres for a million bucks. And that cabin on the lake? Another 400 grand. And the cost to cover and maintain? At most, 100 grand a year for both. That's Des Moines, and/or most places in the middle part of the country.
Now consider the same thing in Silicon Valley. That 9,000-square-foot home in Palo Alto (decent, but not the most expensive area): $20 million. The second home at Pebble: $12 million. The cost for taxes and maintenance: a million bucks a year.
So the notion that we're one unified country, financially, is just...wrong. Things cost vastly different in different areas of the country. Yet we have one number that comprises what Washington D.C. (and idiot politicians) think is "wealth." That's your taxable estate, whether you like it or not.
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Finance: What is Capital Gains Tax?7 Views
Finance a la shmoop what is capital gains tax? alright people you've invested
your hard-earned savings from working 72 hours a week all year you put 10 grand
to work seven years ago in buying Heinz ketchup stock at 50 bucks a share
200 shares then this year along comes Warren Buffett and Berkshire Hathaway to [Warren and Berkshire appear]
confirm what a brilliant investor you were and they buy for all cash the
company Heinz ketchup for $200 a share you've made four times your money in
seven years nice work well you have a gain of 150 bucks a share which you are
gonna fully realize like you'll realize that capital gain in the form of
receiving cash like oh I realize I have cash in my bank account yay me!
so all this was so good such a nice day until you realize that you live in a [Woman frollocking in a meadow]
blue state with massive taxes and that you'll now give back about a third or
more of your investment gains that is you invested 10 grand it became 40 grand
the old-fashioned way you had 30 grand of profits and now uncle sam says i want [Uncle Sam demanding I want your cash]
your cash and you now pay about 10 grand roughly a third of it in taxes of
your gains of that 30 grand back to Uncle S, sadly you are paying back in
taxes about the same amount you invested in the first place yep lots of hard work
lots of taxes how's that feel?
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