Tornado Alley (PROG)

[arizona1]

A Conversation w/ My Rich, Republican Father

This is a Diary with a personal story about wealth and taxes. My great-grandfather and grandfather (single male chidlren, like my dad) were very successful men. My great-grandfather built things, like roads and bridges. My grandfather was a rural doctor for 50 years. They both saved and saved. Invested. They didn't, outside of cloths, fast cars, and a joy of traveling the world live a life that remotely reflected the money they had. Their assests, mostly land and stocks were passed on to my father.

My father, who was a military guy for his entire adult life became a millionaire overnight. My parents were confused to be honest, what to do with all this money.

They did what I think any "sane" person would do and hired a CPA, lawyer, and investment guy.

And that is what I want to talk about a little below the fold. Those with wealth, cause of how our "system" is set-up keep their wealth. Just ask Mitt and his 13.9% tax rate.

In 1997 once my grandfather's estate was settled I was flown into Lousisville (where my parents investment guy is located). I was living in DC at the time and to be honest making more money then I knew how to spend. I was told that if my parents saw fit, I'd never have to work again.

We were rich.

It was at this point that the advisors my parents hired started to explain to me how our money would "work" for us and also how we won't really pay any taxes! Here are some of the things I learned that day and in the ensuing years:

1. It would seem when you have millions to invest you are given opportunities "Joe/Jane 'Mainstreet' Smith" isn't offered. You can get into funds that are not advertised that seem to never lose money. When the stock market was in the "shitter" a few years ago and quarter by quarter my 401K accounts were losing money hand-over- fist, as the rest of America had happen to them, my parents were earning returns that would choke a horse.

2. The estate tax is a joke. Nobody with money will EVER pay it directly. In my family we call it "the last to die insurance policy." I have an insurance policy that when my parents pass that will pay all the inheritance tax. I will get millions and not pay a penny myself. Oh, and you can also buy insurance for your insurance.

3. My parents have life insurance that when they pass will pay me millions. We find it all pretty grim, but if you have the money you can ensure a love one passing is actually a money making opportunity.

4. My father worked many years, 37 to be exact, for the DoD. He earned the benefits he gets from the government. But I do find it interesting his retirement, Social Security, and health care benefits are the same even though he is worth tens of millions. Their investment guy loves my parents think going to Subway is splurging, cause they almost live off their retirement benefits and never "touch" their money.

5. A number of things in my life and my brother's life (with his wife and wonderful little girl) are "housed" in and/or under a trust. I have to admit I don't understand a lot of this. But our cars and houses we own. Yet the trust is also listed on them. Again I don't understand all of this but lets just say we pay less taxes, less insurance, then we would if this wasn't the case. I mean a lot less.

6. Again I don't understand a lot of this, the tax shit here is complex, but my parents can give my brother and myself about $10,000 a year tax free. We can give to charities and write it all off. Heck I don't have any children and my brother has a wonderful little girl (she is 2.5). They have a trust set-up for her education. The goal is to have around $750,000 in it and I don't think we pay any taxes on it.

7. We don't have Mitt money, but last I asked my parents are making around $89,000 a month on their investments. And since they touch almost none of that, it just keep going back into investments. More money. More money. More money. In case you wonder I have and/or do ask myself how much is enough.

I could go on and on. But I think you get the point. It doesn't suck to have money.

But in the title I mentioned my father is a Republican. A sane moderate Republican. He was over last weekend and we talked a lot about Mitt and his taxes. One of the reasons we have the relationship we do and talk politics even though we are on different spectrums, is we are honest with each other.

If I am playing a game, in business, you name it and the rules are written down. I am going to read those rules and find any advantage I can. That is what my family is doing here. That is what Mitt is doing. That is what "rich" people do. The problem is we have read the rules, or our adviser has, and we are following them. It is just they are not fair.

That is what I found strange talking to my dad cause he agreed with me. We are not breaking any laws, but we're not so happy with said laws. I was stunned he said he should pay more, let me SAY THAT AGAIN HE THINKS HE SHOULD PAY MORE IN TAXES. He doesn't understand why he is getting SS and a benefit package as a former government worker when he needs none of it.

My dad at 67 doesn't see why politicians think he will create jobs if given more of a tax break. My dad, as I did got our first jobs at around 12. He has worked around 60 years. He doesn't want to work anymore. He doesn't want to start a business, which has risk involved. He'd rather do what he is doing now. He runs the local museum and historical society. He sits on the Board of Director of the local community college. He wants to do "stuff" but not deal with the long hours of starting a business.

He also is stunned or dumb-founded as I am about how our "system" is set-up. It makes no sense to any of us. Lets just say his effective tax rate is 20% (I bet it is lower). Raising it to 30 or 35% would literally mean nothing to him. I mean nothing. If that money was put into, I don't know education, he'd be behind that 24/7 (I have a MA, my dad a PhD, my grandfather was a doctor).

Now I will end with this. At the start of this Diary I mentioned flying in to hear from a group of advisers I was rich and never had to work again. My father's lawyer and CPA, a friend of his since they were like 4, asked what I'd do. I've been asked that question more than a few times since than and not changed my response, although I KNOW it isn't what they want/wanted to hear:

I'd sell everything I own. Head to an Apple store and REI. Buy a few things and travel the world. I'd give the rest away.

My dad jokes that after he is no longer here I'll just give away all of it. I tell him he can be very sure of that. I already own too much stuff now. I don't need anymore. But through the years I think "giving it away" is starting to work on him. I joke he can give away a few million and just write it off anyway :).
Originally posted to webranding on Mon Jan 30, 2012 at 11:07 AM PST.
Also republished by Community Spotlight.
http://www.dailykos.com/story/2012/01/30/1059997/-A-Conversation-w-My-Rich,-Republican-Father?via=siderec