Less Antman: ‘Juanita Albro summarized my points in a manner that could be misinterpreted, and that is exactly what Bob Kirkland then did. I’d appreciate a clarification, or at least a link to the page Juanita was ‘quoting’ in her message. The whole page was clearly designed for someone with over $1,000,000 in assets, and hardly suggested someone give away virtually everything to heirs during their lifetime. The focus was on using the $11,000 per year annual exclusion, as this excerpt shows: ‘Start giving now – Take advantage of the annual $11,000 exclusion (in 2002) and unlimited exclusion for medical and tuition payments. And make your will out to charity, so your kids have a rooting interest for you to live as long as possible!”
Robert: ‘I’m a CPA who specializes in international tax issues. Companies like Stanley Works will not avoid U.S. income on all their earnings. Just monies earned outside U.S. borders. The reason companies are doing this move to Bermuda is that our tax system makes it very difficult to avoid economic double taxation on foreign earnings. Most of our trading partners have a territorial tax system that exempts income earned overseas. We have a worldwide tax system that taxes all income of a U.S. corporation no matter where it is earned. Stanley Works will still owe U.S. income tax on all of its U.S. earnings. I think you have overstated the amount of tax avoidance from moving to Bermuda. I think the current system of taxation needs to be changed. The corporate income tax is not a huge source of revenue for the Treasury – only about 10% or so. Let’s get rid of it. I believe that most of the corporate tax is passed on to the consumer any way. I think the migration to Bermuda is not such a great thing, but neither is the mess of a corporate tax system that we now have.”
Steve: ‘Brian Annis wrote: ‘Those who support the estate tax are in the moral class of ambulance chasers and grave robbers; or perhaps lower.’ I’m curious – into what moral class would he place those who support tax breaks for the fabulously wealthy while simultaneously claiming we can’t afford to address the educational, health, or housing needs of our less fortunate citizens?’
Debra: ‘One of your readers said US citizens are subject to US Federal tax on income worldwide. Not exactly accurate. I’ve lived abroad for seven years. Individuals are allowed a $76,000 foreign earned income exclusion. We don’t have to pay taxes on the first 76 grand (I only wish I made more). This is for citizens who are bona fide foreign residents. The US is one of the only countries that has this arrangement.’
Michael LeBoeuf: ‘A university creative writing class was asked to write a concise essay containing the following elements: 1. Religion, 2. Royalty, 3. Sex, 4. Mystery. The prize-winning essay read: ‘My God,’ said the Queen, ‘I’m pregnant. I wonder who did it?”
Quote of the Day
Triumphant wife to down-and-out husband: I've consolidated all our bills into one missed payment.~Frank Cotham cartoon in the October 11, 1999, New Yorker
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