Samsung's Lee Family To Pay More Than $10.8 Billion Inheritance Tax (reuters.com) 86
The family of late Samsung Electronics Chairman Lee Kun-hee said on Wednesday they will pay over 12 trillion won ($10.8 billion) in inheritance tax for his estate and donate his vast private art collection to state curators. Reuters reports: Lee, who is credited with transforming Samsung into the world's largest smartphone and memory chip maker, died on Oct. 25 with an estate local media valued at around 26 trillion won. The inheritance tax bill -- one of the largest-ever in South Korea and globally -- has been closely watched due to its potential to dilute the family's controlling stake in Samsung. The family said it planned to pay the bill over five years in six installments, starting this month. "It is our civic duty and responsibility to pay all taxes," the family said in a statement released by Samsung. Analysts have said the family is likely to use loans and dividends from both their own and Lee's shares to pay the tax.
ahhh, civic duty (Score:4, Insightful)
A concept that doesn't seem to exist anymore in the good ol' US of A.
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There was "civic duty" in this case. [theguardian.com]
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I'm not going to pat myself on the back for putting murders in prison. It's the very least people should expect of their government and it almost didn't happen.
Re:ahhh, civic duty (Score:5, Insightful)
Let me have a go at explaining this using your framing so that you might understand why other people think estate taxes are just fine.
Lee isn't being double dipped. That's because Lee isn't paying the estate tax.
His family are paying tax and it's at the time they "earned" it. Which is when they inherited it.
There is no double dip.
Re:ahhh, civic duty (Score:4, Insightful)
Taxes were paid on his fortune when he initially earned it. What entitles the government to double dip and take more taxes?
He is dead and you can't take it with you. And nobody can "earn" that much money without benefiting from a strong national infrastructure, and the labour of millions of educated workers. How do you think that is paid for? If you don't care about schools, hospitals and bridges, maybe you care about military funding?
Re:ahhh, civic duty (Score:4, Informative)
South Korea benefited more from Samsung than Samsung from South Korea.
No they didn't. No South Korea, no Samsung. You also seem to forget the precarious geographical position South Korea is in. Let's see how a Samsung benefits from having to maintain its own army, its own foreign relations, let alone all the infrastructure and educated populace.
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Taxes were paid on his fortune when he initially earned it. What entitles the government to double dip and take more taxes?
He is dead and you can't take it with you. And nobody can "earn" that much money without benefiting from a strong national infrastructure, and the labour of millions of educated workers. How do you think that is paid for? If you don't care about schools, hospitals and bridges, maybe you care about military funding?
And yet.
1. How do you think this wealth was established without being taxed?
2. Would the late man have made it as gifts to his descendants, would it be taxed, is taxing of gifts fair?
3. Is inheritance taxed in every state with "a strong national infrastructure, and the labour of millions of educated workers"? All forms of inherited wealth are taxed? Business ownership? Bundles of cash? Funds in accounts? Land? Other property? Possession of art, collections of antiquities, diamonds and gold? Copyrights?
4. Do
Re: ahhh, civic duty (Score:3)
In certain European countries gifts above any trivial amount are taxed, yes.
There are thresholds, e.g. roughly $500k every 10 years tax free for gifts to children, a lot less (about $20k) to parents, and something in between for siblings. Beyond that it's 2-digit percent taxes.
If you want to transfer large amounts to children, you better start early or pay up.
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There are thresholds, e.g. roughly $500k every 10 years tax free for gifts to children
More like 1/10 of that.
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More like 1/10 of that.
Check out "Schenkungssteuer" [steuerklassen.com] e.g. for Germany.
Children and spouse are class I, which is roughly 1/2 million.
Unrelated persons are class III, in which case you're right. More than right. (Is that even a thing?)
It depends from state to state though, so you may be right for other states for family, too.
Also, what I've read is grossly simplified, there are a ton of other rules to watch out for. (This is, after all, tax legislation -- notorious for not being simple.)
Re:ahhh, civic duty (Score:5, Insightful)
Reminds me of a scene from "To The Manor Born"
"He earned a million pounds, squandered it, then earned another million."
"Honestly?"
"No one earns a million pounds honestly, Marjory."
Re:ahhh, civic duty (Score:4, Insightful)
Re:ahhh, civic duty (Score:4, Informative)
You don't seem to know how taxes work. That's okay, most reporters don't either.
In most places, if you own shares in a business you pay tax on any "realized" gain. That is, if I buy or am paid Samsung stock at $10, and then I sell it at $20, I pay tax on the $10 difference. If I die and owe inheritance tax, it's assessed on the gain in value at some point during the settlement of the estate. The government does *not* (usually, there are some exceptions) come every year and say, oh, your shares have gone up 10% so you owe us tax on that. Same goes for other assets like real estate.
The value of assets is completely imaginary until you actually sell them to somebody, and tax laws typically recognize that.
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If I die and owe inheritance tax, it's assessed on the gain in value at some point during the settlement of the estate.
But unless the stocks are being liquidated to pass to the heirs, they're going to pay the capital gains tax when they sell them later.
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they're going to pay the capital gains tax when they sell them later.
Yes they will pay capital gains tax later on the difference to the value of when it was transferred to them, because their previous value change was taxed as it was transferred to them.
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Unless they never sell them, and just use them as security for low interest loans.
Re:ahhh, civic duty (Score:5, Informative)
"Taxes were paid on his fortune when he initially earned it."
It is implausible that Lee Kun earned 26 trillion won in earned compensation. That amount is overwhelmingly unrealized capital gains, which have never been taxed.
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Somehow I don't tend to have mod points when I really need them.
Just to concur that Korea is risking the future of Samsung and in turn its own economy, by collecting this tax. If the purpose is to maximize tax revenue, there are many ways to slowly tax much larger amounts than this over longer periods of time, as long as the incentives are aligned for the long term between the family and the company. Forced one-time liquidation of 60% of ownership is a terrible way to risk that potential.
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Forced one-time liquidation of 60% of ownership is a terrible way to risk that potential.
You didn't even read the summary did you...
The family said it planned to pay the bill over five years in six installments, starting this month.
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It's still a one-time event, as far as my reasoning is concerned.
You know the cash doesn't come from a vacuum right? There's no other way than to liquidate the shares in order to pay the tax, unless they magically come up with much more cash from their other assets. Spreading it over five years only makes it easier to liquidate the shares, because you can get a huge discount trying to sell it all at once, but doesn't change the fact that they likely need to sell a significant fraction of their shares.
Just double down why don't you... (Score:2)
Analysts have said the family is likely to use loans and dividends from both their own and Lee's shares to pay the tax.
Why bother replying?
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Um, how do you think they're going to pay back the loans? Maybe due to your preconception of how money works, you think it's free money? Also do you know the dividend yield of a company like Samsung? A very large part of their dividends will go on to pay the interest of the loans. If most of their assets are in shares, now tell me, how would they get the cash to pay back the loans? All in all there are ways to cushion the blow and reduce the number of shares they have to sell, but there's no way they don't
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Just pointing out that you don't like to read summaries.
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Just to concur that Korea is risking the future of Samsung and in turn its own economy, by collecting this tax.
It's doing no such thing. It's taxing the transfer of shares which has zero impact to the company and only impacts a few people who *weren't* the now dead CEO.
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And the cash used to pay tax, where does it come from? They'll need to liquidate shares and significantly reduce their stake in the company. Like GP said, this disincentivizes them to care about the long term prospects of the company, and it's a risk to the company's health.
So again tell me there's no such thing?
Re:ahhh, civic duty (Score:5, Insightful)
99.9% of Americans pay no estate or inheritance tax.
Those that do, pay an average of 17%. The max rate is 40%, which almost no one pays.
To be clear: Estate taxes and inheritance taxes are different. Estate taxes are based on the wealth of the deceased. Inheritance taxes are based on the wealth or income of the recipient. IMO, inheritance taxes are fairer.
Inheritance taxes seem to me like a very reasonable tax. The recipient didn't earn it, so why should it be taxed less than a working stiff's paycheck?
Nonetheless, "death taxes" are deeply unpopular in America. People oppose them even if their wealth is far below the threshold.
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"inheritance taxes are fairer"
Estate taxes are (in effect) paid on unrealized gains. i.e they've never been taxed before.
In theory they could be made more fair by making them explicitly on the previously unrealized capital gains rather than just the really high exemption. That would make them more complex, but we're still talking about amounts greater than $1E7.
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Opposites don't attract. (Score:2)
"It is our civic duty and responsibility to pay all taxes," the family said in a statement released by Samsung.
Contrast:
Feds Arrest an Alleged $336M Bitcoin-Laundering Kingpin [slashdot.org]
Estate Tax (Score:3)
I'm sort of conflicted about the whole thing.
Personally, I don't really subscribe to an extreme libertarian concept of the right to private property being some holy ideal, sure, it's generally good, but it's just another social contract that makes up a part of how society functions.
So I'm generally for some form of an estate tax, because it seems pretty inevitable that money accumulates more money and increases financial disparity which would eventually be bad for everyone.
At the same time, say if you're a parent, you want the best for your children, so you spend money to give them a good diet, a good education, maybe help them to buy a house or support their business, that's what money is for, right?
So I guess it's hard for me to figure out where you draw the line, is your child disadvantaged because you had the misfortune to die before you could give them your full support, or two siblings of different ages get different access to that wealth because of the order of their birth?
I guess it's pretty silly for sums like billions, but it just makes me wonder when it comes to laws like these, is there some objective, scientific way to determine where to draw the line?
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There are exemptions and deductions for most of those, but the kid can live with a Chevy; they don't need a beemer, nor a butler, nor a mansion to "get started".
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And of course we're not even talking about a Chevy vs a BWM- its the difference between a Chevy and a McLaran. Or a fishing boat and a yacht.
When the US still had an inheritance tax the first $10,000,000 was exempt. Shortly after the tax was abolished in 2017 a Koch brother died and passed on 50B+ tax free. Thats 25B that will get made up by the average worker, instead of his kids who literally did nothing to earn that money.
Re:Estate Tax (Score:5, Informative)
The threshold for estate taxes to kick in is so high, that there is no danger that any children will go hungry, not be able to go to school, buy a house, or start a business because their parents died and taxes were paid.
https://www.taxpolicycenter.or... [taxpolicycenter.org].
Re:Estate Tax (Score:4, Insightful)
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Why is it so fucking high?
Why does it exist at all?
You can build entire dynasties with exemptions this high. And one of the (many) goals of a democracy should be to discourage dynasties.
You might be confusing democracy with communism. Why do you think you are entitled to someone else's money?
Re:Estate Tax (Score:4)
I guess it's pretty silly for sums like billions, but it just makes me wonder when it comes to laws like these, is there some objective, scientific way to determine where to draw the line?
To be able to have an objective, scientific way to determine where to draw the line, you would need some sort of consensus on what sort of society we wish to create. Objective, scientific methods can only really be used to work towards well-defined solutions.
There is no such consensus. The far left wish for the government to create equal outcomes for all citizens, regardless of their contribution to society. The extreme libertarians want the government to stay in its box and provide an absolute minimum of services, and let industry and individuals battle each other for the rest.
The rest of the population want things to be somewhere along a spectrum between those two extremes, usually shaded in some way based on their own personal circumstances and experiences.
There is nowhere near agreement on what that should look like in our current environment where resources are limited. Especially when any potential solution involves trusting politicians who are mostly interested in using their power and the resources of the country to feather the nest for their own families.
Maybe in a post-scarcity environment things will be different, but I don't know if we'll ever get there - humans always seem to expand to take up all available resources.
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The far left wish for the government to create equal outcomes for all citizens, regardless of their contribution to society.
How do we determine contribution to society? There's no direct correlation to wealth in many cases.
My grandmother made blankets for homeless people for decades. She let people use her shower. Donated to charity. She never had much, never wanted credit for what she did. Always said she had everything she needed. She didn't have a lot when she died. She made a definite contribution to society.
There are wealthy people who also contribute greatly, and there are those that don't. Wealth isn't a measure of contri
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How do we determine contribution to society?
There's two basic choices. You let the market decide, buyers and sellers work it out among themselves, or you have a centralised authority to tell you what things are worth.
One of those system had produced the most prosperous societies in human history, the other has produced mass oppression and death. Which one do you prefer?
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Personally I think a "death tax" should be illegal - the government already takes its cut when I earn income,
This seems to be a common, but peculiarly American attitude. And not a left/right thing. I wonder why that is?
Hostility to estate taxes is a Fox News thing (Score:5, Insightful)
Personally I think a "death tax" should be illegal - the government already takes its cut when I earn income,
This seems to be a common, but peculiarly American attitude. And not a left/right thing. I wonder why that is?
It's not a left-wing thing. It's a right wing thing that only came about when Fox News became popular. The dawn of Fox News turned American politics into a team sport and the Republicans who are Fox News fans view politics as an "us vs them" thing. For example, if a Democrat supports it, they must oppose it. Voters of both parties realized health care is broken. Republicans politicians (and Fox News) opposed the Affordable Care Act as absolute tyranny and the masses who voted for them took their side. They have offered no alternative proposals...just that "obamacare sucks." There are many flaws in the Affordable Care Act, but if you listen to the right wing, it's legislative terrorism and a complete unmitigated disaster...why?...ehrr...they can never really give clear answers as to why...just that it's terrible and we're all suffering. It's very peculiar because everyone needs better healthcare than what we had in 2008. The system was broken and everyone was suffering...it's in a Republican's rational self-interest to have some health care solution...and really the ACA is in their rational self-interest, but they're adamantly opposed to it...not that they want to see it replaced with something better or the flaws fixed...no time for that...abolish it! You see this in climate change, vaccines, mask wearing, environmental regulations, even...some company wants to literally poison your backyard with toxic waste and expose your children to potent carcinogens...Republicans will gleefully support it if a Democrat opposes it.
.01% of Republican voters could ever be taxed by the estate tax, but the vast majority oppose it. It's against their rational self interest to fight to tax the ultra-wealthy less, but they do so...why?...my best guess is a combination of "Fox News told me it was bad" and "Democrats think it's good, so it must be bad." This is uniquely right-wing view.
...and sadly, a LOT of people watch Fox News and believe everything they see on there, without question. The Influence of Fox News and their Right Wing Media outlet of choice always trumps their rational self-interest. It's extremely odd to me, but it's America today. :(
The same applies to the estate tax. Less than
If my life is improved by Trump, George W Bush, or whomever, I will concede they did something well and hope they do more things that benefit me. Most Democratic voters will gladly accept things done well by the opposition, especially when it benefits them directly. The estate tax was repealed by Republicans recently and therefore to their loyal followers, it's flawless, especially since liberals want to restore it. Instead of thinking about their rational self-interests, the Republicans will fight to ensure Jeff Bezos' kids inherit more money...because it's a team sport to them rather than an evaluation of the pros and cons of each issue. "If it's a win for the other team, it must be a loss for mine...even if I directly benefit." Fox News will cheerlead the fight because when you're on red alert and itching for a fight, you'll turn into their evening block every night.
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It's against their rational self interest to fight to tax the ultra-wealthy less, but they do so...why?...my best guess is a combination of "Fox News told me it was bad" and "Democrats think it's good, so it must be bad."
They all believe they are merely temporarily poor and they must fight to preserve their almost certain future wealth.
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It's not a left-wing thing. It's a right wing thing that only came about when Fox News became popular.
Lol, it's not an us vs them thing, it's all them. Them ones, they're the problem...
The dawn of Fox News turned American politics into a team sport
I have a slightly different opinion. Are they still allowed in your new world order?
Politics was always a team sport, we have records from ancient Rome that demonstrate that.
Fox News was a response to the increasing influence the liberals had in the entertainment and media industries up to that point. The rise of TV and movies in the 60's and 70's gave an increasing liberal bias to content, likely because entertainers/medi
Cut the victimization fetish. (Score:2)
I have a slightly different opinion. Are they still allowed in your new world order? Politics was always a team sport, we have records from ancient Rome that demonstrate that. Fox News was a response to the increasing influence the liberals had in the entertainment and media industries up to that point. The rise of TV and movies in the 60's and 70's gave an increasing liberal bias to content, likely because entertainers/media are right brained arts school types with left leaning attitudes (nothing wrong with that btw, it's merely a pattern of right brainers).
Are they allowed? You know the answer to that. No one is stopping you from "telling your truth." We're just calling you out on your bullshit. Say what you want. Just don't cry like a child when I tell you're full of shit. You conservatives used to be rugged individuals and it was liberals who were weak. Why did you have to change that? So many conservatives say factually wrong statements or blatantly bigoted ones and then cry "freedom of speech" when we call them assholes and idiots. You can say w
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Are they allowed? You know the answer to that. No one is stopping you from "telling your truth." We're just calling you out on your bullshit.
Who is we here? Liberal biased Big Tech (eg James Damore) is actively censoring opinions it disagrees with.
The whole concept of 'hate speech' is a lever used by the left to impose censorship. Cancel culture comes from the left.
You're, you're, your, you're, yourself, Your, They...
You're not even conscious of what you are doing are you?
The mainstream media doesn't have a liberal bias.
Lol...
They have precisely 2 biases: facts and controversy.
Lol...
It's not their money. It's a fucking transaction, dude.
You live here, you pay your bills.
I pay more of the bill than most others, but you want me to pay even more, just because...?
Someone has to foot the bill.
That is true....
Also, DJT's tax cuts to corporations was a disaster...
Silly rant based on zero evidence...
I think they would have gone up a LOT more plus local and federal governments would have been better funded.
Well run for office and let's see how it goes.
You give a rich person money, he saves it. Give a poor person money, they pay off their bills.
And pays a rich person wh
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same if I earn gains on existing investments
No it doesn't. If your assets increase in value you aren't taxed until you sell or transfer them. Guess what happens when you die.
Are Americans really this stupid?
If you buy a house and someone builds a golf course nearby and the value of the house goes up, then believe me you can end up paying more in tax without having to sell it and realise a capital gain!
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In this case, capital gains are realised at the transfer of ownership of the estate, so those taxes need to be paid also.
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That's a perfectly good way to run a society if you are OK with stratifying it into a group of aristocracy and everyone else. Mathematically, you end up with a group of families with all of the money, and nobody in a position to be able to challenge them, no matter how hard they work.
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I guess it's pretty silly for sums like billions, but it just makes me wonder when it comes to laws like these, is there some objective, scientific way to determine where to draw the line?
Personally I think a "death tax" should be illegal - the government already takes its cut when I earn income, same if I earn gains on existing investments, and also when I purchase things.
Death tax (or "inheritance tax", same difference) is just another money grab by the government. What's next - a "You lived longer than 80 years" tax?
So if I buy an empty plot of land with $1000 I earned and paid taxes on, and you build a town next to it which makes it worth $10000, how exactly did I earn the $9000 and pay taxes on it? Because we are interconnected then sometimes network effects of this sort increase our wealth. Not paying a capital gains tax is an option, but the question is what is appropriate. But it is incorrect to say that all wealth accrued is earned, because network effects as noted above show that this is not always the case.
Re:Estate Tax (Score:4, Insightful)
No. There are tons of different goals and priorities. Is your goal to prevent generational wealth or to ensure that each person has to work for what they have? How do you feel about people being entitled to keep their family home? Their family farm? Their family store? Their bigger family store? [walmart.com]
In the US, estate tax only applies on the portion of money over $11,800,000 you inherit. That's high enough I'm not really worried about the people who are affected.
Meanwhile, your point about different children being advantaged differently doesn't really change with the estate tax. Either way, the later child gets less. (Unless the parent sets aside money in the will for a college education, for instance, they'll have to pay themselves out of their share).
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In the US, estate tax only applies on the portion of money over $11,800,000 you inherit.
To pick nits, estate taxes are based on the value of your estate when you die. Inheritance taxes are paid by the recipients of an inheritance.
Also, don't forget state estate/inheritance taxes where they exist. Many kick in well below 11.8 megabucks.
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True. The US has an estate tax, not an inheritance tax. I fudged that. (Although I do believe money donated to charity is allowed to happen pre-estate-tax calculations.)
Some states do have their own estate or inheritance taxes, but IIRC it's like 12 +/- DC.
Re:Estate Tax (Score:4, Insightful)
I'm generally for some form of an estate tax, because it seems pretty inevitable that money accumulates more money and increases financial disparity which would eventually be bad for everyone.
At the same time, say if you're a parent, you want the best for your children, so you spend money to give them a good diet, a good education, maybe help them to buy a house or support their business, that's what money is for, right?
Yep, it's almost like you want to tax people less if they have less, and more if they have more.
I guess it's pretty silly for sums like billions, but it just makes me wonder when it comes to laws like these, is there some objective, scientific way to determine where to draw the line?
Yes, it's called a progressive tax rate that increases based on the amount being taxed. For example, you might have a rate that says if you have $10k, you pay no tax, if you have $20k, you pay $2k; if you have $30k, you pay $6k; if you have $100B, you pay $80B; etc. The function that defines the tax rate can be highly complex, but generally should make it so that everyone can pay for necessities and get by, and most people can afford luxuries, and there's still an incentive to earning more, but it still prevents massive accumulation of wealth and a hereditary aristocracy like Kim Kardashian or Paris Hilton who inherit more money than most people will ever even glimpse.
As you can see from the above examples, we need higher taxes, not lower. But that's higher taxes on the top-most portions of the population, and lower on the rest.
Fuck you're a tedious idiot train0987. (Score:1, Insightful)
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I'm further from the top 0.1% of earners than most people are from the top 1%.
That's only if you plot it on a regular graph. Plot it on a log-log graph. Money compounds. Money is exponential.
With a tax break (Score:2)
and donate his vast private art collection to state curators.
I smell a tax break coming.
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Coincidentally, his art collection is valued at $10.8 billion.
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That's a lot of Hentai.
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Or some well timed NFTs.
Fuck the aristocracy (Score:5, Insightful)
Untaxed generational wealth transfers will just lead to horrible aristocratic dynasties that will use their wealth to fuck with democracy to further entrench themselves.
(And by 'will just lead to', I mean 'has already lead to')
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I assume you want to tear down the giant NGOs, too, for the exact same reason.
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People actually paying taxes is news? (Score:2)
Who would have thought.
And so (Score:2)
Follow the money. This is to fund voracious government so a handful of politicians have more money to lavish to buy votes with, and coincidentally cronies get more money from government funding of projects, and the politicians' family worth goes up at multiples of their government salary.
Any "good" is purely coincidental and mostly memespace manipulations.
Also don't forget the kickbacks just to knock a few percent off the inheritence tax.
The error people make is in assuming this corruption is an unfortunat
Ridiculous (Score:2)