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Re: Estate taxes
Old 12-12-2006, 06:54 AM   #21
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Re: Estate taxes

First, to the person who asked about cutting spending.... I can cut a LOT of spending... first, repeal the drug welfare program that cost trillions... second, don't give a full cost of living to SS and other payments... let them stay the same for a few years... cut 'welfare' even more, cut education from the federal govnt (which they should not be in anyhow)... and I can go on..

As for keeping wealth in families... well, this just does not happen. I had read an article many years ago that said the kids or the grandkids of wealthy parents spent the money... only the very very rich keep it..

And the tax does not bring in that much money to the gvmt.... and the cost of enforcement is also one of the highest for each $ of tax...

I think that there should be no estate tax... OK, get rid of the step up in basis... fine, that is fair. Also, tax all deferred income... again, fair.. but why should I pay up to 50% of my estate as a tax Just is not fair..
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Re: Estate taxes
Old 12-12-2006, 07:58 AM   #22
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Re: Estate taxes

As far as the effect on family businesses and farms, what I have read in the past is that there is little adverse effect. Unfortunately, I can't find a link to data. There are very very few people who own family farms and businesses that result in an estate tax owned. When a tax is owed, there is a mechanism to pay it over time to the IRS. If someone really wants, I can find a link to information regarding the right to pay the tax over time if the tax is owed as a result of the deceased person's ownership of a small business or farm.

Data from Minnsota indicates that in the last few years most of the estate taxes it collected came from ONE estate. That estate paid $112 million in taxes. The prior year the total estate tax collected in Minnesota was 72 million. The wealthy in fact can pay a big tax.
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Re: Estate taxes
Old 12-12-2006, 08:00 AM   #23
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Re: Estate taxes

Quote:
Originally Posted by Texas Proud
First, to the person who asked about cutting spending.... I can cut a LOT of spending... first, repeal the drug welfare program that cost trillions... second, don't give a full cost of living to SS and other payments... let them stay the same for a few years... cut 'welfare' even more, cut education from the federal govnt (which they should not be in anyhow)... and I can go on..

As for keeping wealth in families... well, this just does not happen. I had read an article many years ago that said the kids or the grandkids of wealthy parents spent the money... only the very very rich keep it..

And the tax does not bring in that much money to the gvmt.... and the cost of enforcement is also one of the highest for each $ of tax...

I think that there should be no estate tax... OK, get rid of the step up in basis... fine, that is fair. Also, tax all deferred income... again, fair.. but why should I pay up to 50% of my estate as a tax Just is not fair..
Military spending: whackety-whack!
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Re: Estate taxes
Old 12-12-2006, 08:34 AM   #24
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Re: Estate taxes

I join with the estate tax lovers. The Government needs money and we can't take it out of the pockets of the low or middle income. GB's current cut in the estate tax has spiraled the deficit pretty high. Thats fine if we cut spending by say, stopping the entire war on drugs, down scaling our military, and reducing SS for us. But most of those things are not going to happen. So the alternatives are to tax those of us who are high earners more while we are earning or more when we are dead. I vote for when I am dead. Lower taxes while I am earning allow me to save more building up a portfolio sufficient to assure a bountiful retirement. If all goes well and that portfolio increases in value over retirement, I get taxed at death for what I skipped in life -- and my kids get a nice chuck of change. If I was taxed when I was earning, I would have had a much smaller portfolio -- my retirement would be constrained and the kids would be less likely to get anything.
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Re: Estate taxes
Old 12-12-2006, 09:27 AM   #25
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Re: Estate taxes

Quote:
Originally Posted by Zathras
Alex,

I like the comparision of a child winning a lottery and getting an inheritance. Why would we tax one source of income (lottery), yet not the other (inheritance)?
Actually quite a difference. Cost $2 bucks and takes a couple minutes to play the lottery. On the other hand our estate took a life time of:
investing every nickel I hand,
risk taking,
small business ownership,
LYBM - big time,
employee others who paid taxes,
More hours worked then humanly healthy
paying full bill for kids education, etc.

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Re: Estate taxes
Old 12-12-2006, 09:36 AM   #26
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Re: Estate taxes

Quote:
Originally Posted by Alex
BTW IMHO, Warren Buffet is a flaming hypocrite on this issue. He favors the estate tax, meanwhile he gives most of his money to a foundation, specifically to avoid estate taxation.
No way. Buffet is on record saying we should keep the taxes to avoid creating family dynasties and to encourage the creation of charitable foundations. With the Bush tax reductions, he could pass the whole $43 billion to his heirs but has chosen to give them only $7 billion.
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Re: Estate taxes
Old 12-12-2006, 09:37 AM   #27
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Re: Estate taxes

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Originally Posted by kcowan
No way. Buffet is on record saying we should keep the taxes to avoid creating family dynasties and to encourage the creation of charitable foundations. With the Bush tax reductions, he could pass the whole $43 billion to his heirs but has chosen to give them only $7 billion.
Only $7 billion?? The heartless bastard
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Re: Estate taxes
Old 12-12-2006, 09:49 AM   #28
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Re: Estate taxes

Here is a study from the Congressional budget office which indicates that the estate tax at the current rates does not unfairly burden family farms and small businesses. http://www.cbo.gov/ftpdocs/65xx/doc6...-EstateTax.pdf

One more point. Estate taxes are simple if you lead a simple life. Even if you are rich. Value the assets at fair market value and pay the tax. Complications come when you try to take discounts on the valuation or try to squirrel away your assets.
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Re: Estate taxes
Old 12-12-2006, 09:54 AM   #29
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Re: Estate taxes

If they lower the limit back to a million, that could create a lot of pain. One or two modest houses in California/Boston/New York and you're at a million. Hopefully they will keep it at 3.5 million, which seems like a reasonable rate. Would anyone on this board really rather hand their money over to the government rather than their kids and grandkids? I think some of you are just all talk...
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Re: Estate taxes
Old 12-12-2006, 10:08 AM   #30
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Re: Estate taxes

Quote:
Originally Posted by Texas Proud
First, to the person who asked about cutting spending.... I can cut a LOT of spending... first, repeal the drug welfare program that cost trillions... second, don't give a full cost of living to SS and other payments... let them stay the same for a few years... cut 'welfare' even more, cut education from the federal govnt (which they should not be in anyhow)... and I can go on..

As for keeping wealth in families... well, this just does not happen. I had read an article many years ago that said the kids or the grandkids of wealthy parents spent the money... only the very very rich keep it..

And the tax does not bring in that much money to the gvmt.... and the cost of enforcement is also one of the highest for each $ of tax...

I think that there should be no estate tax... OK, get rid of the step up in basis... fine, that is fair. Also, tax all deferred income... again, fair.. but why should I pay up to 50% of my estate as a tax Just is not fair..
what welfare? That nasty liberal Clinton basically got rid of it.

How about ending the "war on drugs" and whacking all the money given to law enforcement for that insanity? The last thing this society wants is to stop drug abuse--watched TV lately? Seems like half the adds are telling people to beg their doctor for some drug or another. This society loves drugs--just wants to keep the monopoly intact.

Great idea--cut education!! Gee, that'll really help society out. That'll really help the tax base too--get rid of those pesky upper middle class jobs and replace them with Walmart employees.

Believe it or not, ss is not the big problem--it's medicare. SS would be fine if it weren't being continually raided to buy bombs and other essentials.

Good thing they don't let people from Texas with these kind of views be president!!
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Re: Estate taxes
Old 12-12-2006, 11:00 AM   #31
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Re: Estate taxes

Quote:
Originally Posted by donheff
I join with the estate tax lovers...........my kids get a nice chuck of change.
Don, perhaps you didn't mean it this way, but your position "sounds" highly hypocrital the way you said it.

If an estate tax is working the way it should, when you die your entire net worth (except for a few small personal, sentimental items) should pass to the government, not to your kids. Your net worth held in joint tenancy with your DW should have 50% pass to the government.

When you say you're in favor of a "nice chunk of change" passing to your kids, you're saying you're against an effective estate tax and only want a nominal estate tax which still protects the estates of the elitist rich.
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Re: Estate taxes
Old 12-12-2006, 11:06 AM   #32
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Re: Estate taxes

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Originally Posted by HelpMeRhonda
Actually quite a difference. Cost $2 bucks and takes a couple minutes to play the lottery. On the other hand our estate took a life time of:
investing every nickel I hand,
risk taking,
small business ownership,
LYBM - big time,
employee others who paid taxes,
More hours worked then humanly healthy
paying full bill for kids education, etc.
Rhonda, by your logic, the easier the money comes, the more it should be taxed??
So, if I have a very lucrative business and the money flows easily, should that be taxed at a higher rate than someone that scratches and claws for every bit of profit?

I actually like the idea. However, I have no idea how the tax rates would be calculated.

Personally, I think the biggest issue with the estate tax is the rate, not it's existance.
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Re: Estate taxes
Old 12-12-2006, 11:07 AM   #33
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Re: Estate taxes

Quote:
Originally Posted by Martha
Here is a study from the Congressional budget office which indicates that the estate tax at the current rates does not unfairly burden family farms and small businesses. http://www.cbo.gov/ftpdocs/65xx/doc6...-EstateTax.pdf
But isn't there a study about studies that shows the government has a study to justify every activity (including studies) in which they are engaged?
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Re: Estate taxes
Old 12-12-2006, 11:10 AM   #34
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Re: Estate taxes

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Re: Estate taxes
Old 12-12-2006, 11:11 AM   #35
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Re: Estate taxes

I've never understood why the Estate Tax generates the passion that it does. I'm a small government conservative/libertarian. If I had my way, there would be no Social Security, no Medicare, no Federal Department of Education, etc. I dislike all taxes.

That said, I would rather pay the Estate Tax than any of the following: income tax, FICA, capital gains tax, taxes on dividends, sales tax, or property taxes.

Assuming that we ever get spending down to the point where cutting taxes is an option, I would rather cut the income tax instead of the estate tax. If I was designing the Estate Tax, I would make the exemption something like 5 million (indexed to inflation), and tax the remainder at whatever the highest income tax rate happened to be at the time.

Talk to me about getting rid of the Estate Tax after you get rid of taxes that are preventing me from building an estate worth taxing
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Re: Estate taxes
Old 12-12-2006, 11:27 AM   #36
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Re: Estate taxes

Quote:
Originally Posted by youbet
Don, perhaps you didn't mean it this way, but your position "sounds" highly hypocrital the way you said it.

If an estate tax is working the way it should, when you die your entire net worth (except for a few small personal, sentimental items) should pass to the government, not to your kids. Your net worth held in joint tenancy with your DW should have 50% pass to the government.

When you say you're in favor of a "nice chunk of change" passing to your kids, you're saying you're against an effective estate tax and only want a nominal estate tax which still protects the estates of the elitist rich.
I would never say that the Government should take your entire estate. What I believe as that we should have a reasonable estate tax exemption and a tax (certainly not 100% or even more than 50%) on the estate over that exemption amount. That way, people who can afford it (like me) contribute extra to the funding for this great nation --- BUT, with the reasonable exemption and the fact that only 1/2 or less of the remainder goes to the Government, my kids would still get a nice inheritance. Not enough to start a dynasty maybe but enough to make a huge difference. I don't have a hard position on what the appropriate exemption level might be ($1M, $2M...) or what the tax rate should be. But I don't believe we should have raised the exemption (a la the recent Bush cuts) without offsetting increases elsewhere. Otherwise we are just exacerbating the fiscal crisis we face. I would not object, for example, to raising the exemption level but increasing the maximum tax on the remainder from 46% to say 50%. And yes, if things go well, that would still impact me so I am not simply taxing the other guy.
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Re: Estate taxes
Old 12-12-2006, 11:33 AM   #37
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Re: Estate taxes

Quote:
Originally Posted by donheff
I would never say that the Government should take your entire estate. What I believe as that we should have a reasonable estate tax exemption and a tax (certainly not 100% or even more than 50%) on the estate over that exemption amount. That way, people who can afford it (like me) contribute extra to the funding for this great nation --- BUT, with the reasonable exemption and the fact that only 1/2 or less of the remainder goes to the Government, my kids would still get a nice inheritance. Not enough to start a dynasty maybe but enough to make a huge difference. I don't have a hard position on what the appropriate exemption level might be ($1M, $2M...) or what the tax rate should be. But I don't believe we should have raised the exemption (a la the recent Bush cuts) without offsetting increases elsewhere. Otherwise we are just exacerbating the fiscal crisis we face. I would not object, for example, to raising the exemption level but increasing the maximum tax on the remainder from 46% to say 50%. And yes, if things go well, that would still impact me so I am not simply taxing the other guy.
IMO Don, you're much too kind to the rich. No need for an exemption (other than small, sentimental items). Let each generation stand on their own merit. Let the population as a whole benefit from intergenerational transfer of wealth, not just a few individuals lucky enough to be born into the good life.

Frankly, I'm surprised to hear you take such a conservative position.
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Re: Estate taxes
Old 12-12-2006, 11:43 AM   #38
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Re: Estate taxes

Quote:
Originally Posted by Zathras
Rhonda, by your logic, the easier the money comes, the more it should be taxed??
So, if I have a very lucrative business and the money flows easily, should that be taxed at a higher rate than someone that scratches and claws for every bit of profit?

I actually like the idea. However, I have no idea how the tax rates would be calculated.

Personally, I think the biggest issue with the estate tax is the rate, not it's existance.
Maybe a better approach would be to lower the $$ amounts such that virtually all middle - upper class estates qualify for this tax.

I'm betting the attitudes and thoughts of fairness about the estate tax would change. Maybe there'd be enough outcry to reconsider it.
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Re: Estate taxes
Old 12-12-2006, 11:45 AM   #39
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Re: Estate taxes

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Originally Posted by Hamlet


Talk to me about getting rid of the Estate Tax after you get rid of taxes that are preventing me from building an estate worth taxing
Exactly, if you are able to build an estate of any value under current tax burden. Your reward is knowing this tax awaits it.
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Re: Estate taxes
Old 12-12-2006, 12:02 PM   #40
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Re: Estate taxes

Let me throw out another thought for you folks to shoot at! I'm kind of thinking out loud here. I look at life, among other things, as a sort of game. If we are "born equal", why should some people be given a large financial head start. Would you let your opponent in Monopoly start with $10,000 while you had to start with $1500? Now I know we are not really born equal - inherited genes, intelligence, environment in which we are brought up, etc, etc. However, if you take two fairly equal persons in terms of innate potential at birth, why should one be given a financial head start? Doesn't it seem somewhat unfair that one person's child can inherit a nice house in the suburbs with additonal money to fund the property taxes, etc., while someone else's child has to save up the downpayment for that house after paying high income taxes. Mightn't it be fairer, as has been suggested by some posts above, to have a tax system with much lower income tax rates, even at the expense of higher estate taxes (perhaps 100% with no exemption, except to a spouse and a child who can't take care of himself/herself because of a disability)? Wouldn't this make the playing field more level?
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