After a long answer to a listener about the tax consequences of gifting shares to his children, his co-host laments how much time and talent goes into navigating tax rules. He agrees, and offers his test for whether a tax system is simple enough.
…the one key difference I can imagine or two. If your wife's marginal tax rate is higher than 30% and or the kids want to keep the shares and not dispose of them. At the age you transfer them, better off being in their name than being in yours and having that taxable event happen at that point.
…one of the first things I would do as Emperor of Australia is just, I think I'm probably just doing a flat tax or something, just as a starting, but just to make this super easy. It also means far less fraud because the simpler it is, the harder. Complexity is where opportunity hides. Anyway. 100%
true. No, you're right, mate. I've long said that my goal would, I wouldn't do a flat tax for a different reason why we won't give you to an hour and 70 minutes into the podcast. But I've long said the goal of the tax system should be that less than 5% of us can actually benefit from financial advice more than it costs us.
Yep. In other words,
yes, there are some really complex situations where you have to have some advice, but you should really go, okay, it's going to cost me $3,000 to get advice. I can't make more than three grand worth of benefit from that advice because everything is so simple and obvious and easy and upfront. It…
Complex and unfair. Yes, exactly. And unfair. Correct,