In the US, and maybe some other countries, there is a federal tax on gifts between most people that exceed certain annual and/or lifetime limits.
Aside from its benefit to government revenue, the gift tax has certain consequences.
One reason for a gift tax that I have heard about, but do not have a reference for, is that it makes a record of, and reduces the reward for, money- and other monetizable property-transfers between people; transfers that might include money laundering or might be used to avoid other taxes. For example a car dealership "gives" me a car and I "give" it some money, avoiding sales tax.
Originally posted by JS357 In the US, and maybe some other countries, there is a federal tax on gifts between most people that exceed certain annual and/or lifetime limits.
Aside from its benefit to government revenue, the gift tax has certain consequences.
One reason for a gift tax that I have heard about, but do not have a reference for, is that it makes a record of, and reduces ...[text shortened]... a car and I "give" it some money, avoiding sales tax.
What do people think about gift taxes?
I think they are great. We can never have enough government revenue. 😵
This reminds me of barter taxes, which really irks me. A business can accept services as payment rather than cash (under certain circumstances) so long as that service is of equal value. For example, someone designing a website for someone can be offered free spa visits as payments.
What ticks me off is that even though no cash was exchanged under the barter system, that trade can still be taxed. This means that you actually lose money, since the tax has be paid in cash and no actual money was gained during the trade. That just seems unfair.
Originally posted by vivify This reminds me of barter taxes, which really irks me. A business can accept services as payment rather than cash (under certain circumstances) so long as that service is of equal value. For example, someone designing a website for someone can be offered free spa visits as payments.
What ticks me off is that even though no cash was exchanged under the ...[text shortened]... ax has be paid in cash and no actual money was gained during the trade. That just seems unfair.
Originally posted by vivify This reminds me of barter taxes, which really irks me. A business can accept services as payment rather than cash (under certain circumstances) so long as that service is of equal value. For example, someone designing a website for someone can be offered free spa visits as payments.
What ticks me off is that even though no cash was exchanged under the ...[text shortened]... ax has be paid in cash and no actual money was gained during the trade. That just seems unfair.
Mr Spa gets you to design his website.
You charge him $1,000 ... that's $1,100 including Sales Tax (say)
He hands over $1,100 to you.
You give $100 Sales Tax to government.
You pay $300 income tax (say)
Leaving you with $700.
You can now go and get $700 worth of Spa Treatments.
Can you not see that bartering without taxation is defrauding the government of $400 ?
Originally posted by wolfgang59 Mr Spa gets you to design his website.
You charge him $1,000 ... that's $1,100 including Sales Tax (say)
He hands over $1,100 to you.
You give $100 Sales Tax to government.
You pay $300 income tax (say)
Leaving you with $700.
You can now go and get $700 worth of Spa Treatments.
Can you not see that bartering without taxation is defrauding the government of $400 ?
The spa are also paying tax on their income. The 'cost' of doing such a transaction is more and shows how damaging the system is, punishing people for helping each other.
.
Originally posted by JS357 In the US, and maybe some other countries, there is a federal tax on gifts between most people that exceed certain annual and/or lifetime limits.
Aside from its benefit to government revenue, the gift tax has certain consequences.
One reason for a gift tax that I have heard about, but do not have a reference for, is that it makes a record of, and reduces ...[text shortened]... a car and I "give" it some money, avoiding sales tax.
What do people think about gift taxes?
well, you kind of explained it. they are necessary.
this is perhaps a too broad subject. do you want to discuss if they should be abolished? diminished? increased? limited to certain gifts?
Originally posted by vivify This reminds me of barter taxes, which really irks me. A business can accept services as payment rather than cash (under certain circumstances) so long as that service is of equal value. For example, someone designing a website for someone can be offered free spa visits as payments.
What ticks me off is that even though no cash was exchanged under the ...[text shortened]... ax has be paid in cash and no actual money was gained during the trade. That just seems unfair.
you accepted to be paid in spa tickets. you should have thought off that before designing that website. hope it was a nice spa.
Originally posted by JS357 In the US, and maybe some other countries, there is a federal tax on gifts between most people that exceed certain annual and/or lifetime limits.
Aside from its benefit to government revenue, the gift tax has certain consequences.
One reason for a gift tax that I have heard about, but do not have a reference for, is that it makes a record of, and reduces ...[text shortened]... a car and I "give" it some money, avoiding sales tax.
What do people think about gift taxes?
If the purpose of the gift tax is to avoid fraudulent transfers then gifts to relatives such as children should be exempt.
Unfortunately, the government feels it deserves a cut of everything even though it is tough for me to understand why there should be an additional tax for gifts when there an additional tax for holding or spending your money.
Originally posted by JS357 In the US, and maybe some other countries, there is a federal tax on gifts between most people that exceed certain annual and/or lifetime limits.
Aside from its benefit to government revenue, the gift tax has certain consequences.
One reason for a gift tax that I have heard about, but do not have a reference for, is that it makes a record of, and reduces ...[text shortened]... a car and I "give" it some money, avoiding sales tax.
What do people think about gift taxes?
The exemption amounts are so high that 99.9% of people are completely unaffected by the gift tax.
I think that beyond an annual exemption amount (say, $10,000 per year per person), gifts should be treated as ordinary income.
Originally posted by quackquack If the purpose of the gift tax is to avoid fraudulent transfers then gifts to relatives such as children should be exempt.
Unfortunately, the government feels it deserves a cut of everything even though it is tough for me to understand why there should be an additional tax for gifts when there an additional tax for holding or spending your money.
The purpose is not to avoid fraudulent transfer. It is to avoid legal transfers designed to legally avoid tax, primarily inheritance taxes. Gifts to children sound sweet but, for the very wealthy, and the only people likely to experience these types of taxation, this is about the intolerable scale of inherited wealth and privilege, which ensures that the plutocracy can function like the aristocracies of the old regimes, sharing their inherited wealth and power and excluding all but a tiny handful of the rest of the population from their magic circle.
What economy needs more wealthy kids enjoying a priviliged life on the back of their family trust?
Originally posted by Zahlanzi you accepted to be paid in spa tickets. you should have thought off that before designing that website. hope it was a nice spa.
Don't you think that's a rather cold attitude? You're essentially being punished for helping someone who can't pay you in cash.
Originally posted by wolfgang59 Mr Spa gets you to design his website.
You charge him $1,000 ... that's $1,100 including Sales Tax (say)
He hands over $1,100 to you.
You give $100 Sales Tax to government.
You pay $300 income tax (say)
Leaving you with $700.
You can now go and get $700 worth of Spa Treatments.
Can you not see that bartering without taxation is defrauding the government of $400 ?
Gift Tax
02 Jul '15 15:16
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