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Old 12-15-2007, 12:05 AM   #41
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How will attorneys and estate planners gouge folks for doing legal work?

Youbet, with that crack of yours, I don't know whether to: or .

I like your signature line about the wilderness. I myself am a hiker and with some buddies have been hiking the Pacific Crest Trail in sections. Our goal 18 years ago was to hike the entire PCT through Oregon. We completed the northern half from the Columbia River south to Willamette Pass. Just last summer we started the southern half with a hike from Willamette Pass by Diamond Peak to Immigrant Pass and Summit Lake.

We hope to reach the California border before we die, or get so old and decrepit we can't make it out anymore. We are slowing down, but still make good progress!8)
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Old 12-15-2007, 12:08 AM   #42
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The recent proposal I read is to increase the inheritance tax exemption to 15 or 17 million dollars. That should be more than enough to keep the average American tax free.
$15 mil would be great. But I heard Hillary the other day proposing raising taxes on the "rich", and I don't think there is any support on the D side for lessening the effects of the inheritance tax. Some R's talk of abolishing it, but it's still around.
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Old 12-15-2007, 12:26 AM   #43
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This is what Warren Buffet said in November of 2007:

"Dynastic wealth, the enemy of a meritocracy, is on the rise. Equality of opportunity has been on the decline," Buffett said. "A progressive and meaningful estate tax is needed to curb the movement of a democracy toward plutocracy."

Buffett backs estate tax, decries wealth gap | News | Reuters
Yes, and we all know what else Buffet is doing with his own wealth before he dies. He doesn't trust what the government would do with 55% of a huge chunk of his estate. SO, he is giving away $30 billion (or was it $50B) to the Gates Foundation. He wants to it OUT of his estate, not subject to the onerous 55% death tax rate. He wants to control how that $30 ($50?)Billion is distributed, not give control to the government.

But for the rest of us? "Estate tax is good" says Buffet.

Plus somewhere else here at ER I just read he has given his kids, 3 I think, each a billion to set up their own charitable trusts. $3 Billion more he wants out of his estate. Also, as to kids earning their own way, his three are paid managers of those $1 billion charitable trusts. Nice living for them. How would you like to have $1 billion---given to you---to manage and earn a salary from? If passing on wealth is good enough for Warren it is good enough for me too.
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Old 12-15-2007, 12:29 AM   #44
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People spend lifetimes earning their wealth and paying income taxes on it.

The top income tax bracket is 39%. Why, at death, should the government get an even more punishing 55% rate of death tax? Just to be punative? At the least, the death tax should be reformed so the rate is no higher at death than the income tax rate while living.
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Old 12-15-2007, 12:46 AM   #45
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RetireeRober - Don't worry the government let's deduct your Funeral expenses from your estate. So go out with a big bang!
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Old 12-15-2007, 12:55 AM   #46
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RetireeRober - Don't worry the government let's deduct your Funeral expenses from your estate. So go out with a big bang!

Now that gives me a new dimension to think about for my "final wishes"!
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Old 12-15-2007, 02:28 AM   #47
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Yes, and we all know what else Buffet is doing with his own wealth before he dies. He doesn't trust what the government would do with 55% of a huge chunk of his estate. SO, he is giving away $30 billion (or was it $50B) to the Gates Foundation. He wants to it OUT of his estate, not subject to the onerous 55% death tax rate. He wants to control how that $30 ($50?)Billion is distributed, not give control to the government.

But for the rest of us? "Estate tax is good" says Buffet.
This is entirely in line with his philosophy. He believes that family dynasties growing exponentially in wealth and power from generation to generation are bad for the country. Whether the family in question gives the money away to charities or has it taxed by the government, the end result is the same for the purpose of reining in dynasties.

What he is not saying here is, you have to be taxed, but I don't, I can give mine away instead. Because you can give yours away, too, if you want. And by "yours" I don't mean you or the likes of us who populate this forum. I am sure that Buffet would be all for reasonable inflation adjustments so that it affects the truly wealthy, not the small potatoes folks like us.

Because really, if you have 2 million now, it grows to 9 million in 30 years and is split between your 3 kids when you die, that is 3 million each, but that is only worth the same as 1 million today, just enough to provide a basic retirement for them. That is not "wealthy" by wealthy people standards.

Does anyone have historic data showing the rates and exempt amounts that this tax has dealt with over the years and what level it should really be at to further the purpose that Buffet supports?

I would think maybe it should be high exemption, progressive rates with inflation indexing into the future.
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Old 12-15-2007, 06:55 AM   #48
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Because really, if you have 2 million now, it grows to 9 million in 30 years and is split between your 3 kids when you die, that is 3 million each, but that is only worth the same as 1 million today, just enough to provide a basic retirement for them. That is not "wealthy" by wealthy people standards.
And with the estate tax at $2,000,000, as it is for this year, they wouldn't get even that much before the 55% tax kicks in. Given a $2 million estate divided equally between 3 kids, each would receive less than $667K at a maximum untaxed. If there are 5 kids, each would receive less than $400K tax free, and so on. I had friends in high school that were among 13 children in their family. If their parents died today (let's hope not! knock on wood) they would each receive less than $154K tax free.

And that is higher than it used to be.

This almost could be considered to be a form of charity given by the federal government to estate lawyers. Anyone with an estate that size who has the slightest clue, will have paid an estate lawyer good money to set up their estate properly from a tax perspective.
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Old 12-15-2007, 08:20 AM   #49
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I honestly believe that regular (daily) golfers make a significant contribution to society. I mean, without them, what would the greenskeepers do all day?

I'm glad you see it my way. I'm keeping America employed.
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Old 12-15-2007, 08:49 AM   #50
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Also, $2,000,000 doesn't go as far as it used to. Look at what people on this board think is necessary for a beginning retirement nestegg... many wouldn't dream of it without a nestegg that size.

With any luck, and a well selected SWR, one's estate may be the same size or larger at one's demise.
Yes, especially if "one" spends only $16K a year!

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Old 12-15-2007, 09:23 AM   #51
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Yes, especially if "one" spends only $16K a year!

Well, "one" intends to start spending a whole lot more than that in a couple of years! I'm planning for a $24K-$30K ER budget (adjusted for inflation). That $24K figure has been my goal all along, and now I have an inheritance that apparently is going to drop in my lap shortly. Nothing is in hand, but either way I think the $16K/yr will only last another year before I cave.
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Old 12-15-2007, 09:59 AM   #52
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I general, If find that most people who are upset about the estate tax fall into one of two categories; 1) people who would not be affected by the tax but are opposed to all taxes, of any type and 2) people who are upset that they are going to finally have to pay taxes on all those capital gains that have NEVER been taxed before. I have little sympathy for either group. Feel free to argue that taxes are overall to high, I agree. But do not take the ludicrous position that all taxes are bad, or that capital gains should not be taxed in any way, shape of form if you happen to die (yes, I know the basis steps up at death, but the estate tax make up for this).

There are few exceptions to this rule.
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Old 12-15-2007, 10:54 AM   #53
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So how many times do we want to pay taxes on a dollar? We pay income tax when we earn it. Capitol gains tax when we take what is left and invest it in the economy instead of putting it in a mattress. And finally we pay estate tax on what is left when we die.

A national sales tax paying tax on a dollar earned one time looks better and better not that the Dems or Reps would dare change the current system due to the power it gives them.
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Old 12-15-2007, 11:15 AM   #54
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The Repubs want to cut the inheritance tax and the Dems want to cut the AMT, but no one has explained where that money is coming from when it's gone.

So ante up. What government services would you cut or reduce from the budget to lower our taxes? I'll start with the roads near your home.
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Old 12-15-2007, 11:34 AM   #55
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So how many times do we want to pay taxes on a dollar? We pay income tax when we earn it. Capitol gains tax when we take what is left and invest it in the economy instead of putting it in a mattress. And finally we pay estate tax on what is left when we die.

A national sales tax paying tax on a dollar earned one time looks better and better not that the Dems or Reps would dare change the current system due to the power it gives them.
One thing you are forgetting is the money you put into an IRA or 401K received a tax benefit going in. It actually saved you taxes and the money is growing tax free while in an IRA or 401K. So your statement is not entirely true.
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Old 12-15-2007, 11:35 AM   #56
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the Dems or Reps would dare (not) change the current system due to the power it gives them.
And there is the issue in a nutshell.........!
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Old 12-15-2007, 11:49 AM   #57
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This almost could be considered to be a form of charity given by the federal government to estate lawyers. .
Thank you for saying that. I get in big trouble when I do!

I know I'm repeating my position to the point of boring you all..... but I feel if there wasn't much wiggle room through estate planning, there would be less resistance to the tax. Of course, federal income taxes are in a similar situation.
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Old 12-15-2007, 12:09 PM   #58
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This almost could be considered to be a form of charity given by the federal government to estate lawyers. Anyone with an estate that size who has the slightest clue, will have paid an estate lawyer good money to set up their estate properly from a tax perspective.
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Thank you for saying that. I get in big trouble when I do!
You'll probably get in 'trouble' just for acknowledging that someone else said it!

I really do not understand how some liberals who are in favor of wealth re-distribution can also be in favor of the current estate taxes. The really 'rich' avoid it, well-to-do lawyers and planners benefit from it. Is that the kind of 'wealth redistribution' they really had in mind? Makes no sense to me. Can a liberal explain this? Isn't it just a tad more than a bit hypocritical.

I won't be surprised if the explanation is along the same lines as a self-proclaimed environmentalist warning us of the dangers of of CO2 while jetting around the world and keeping his personal swimming pool heated...

-ERD50

PS - anyone have a figure for just how big (in $) the estate tax avoidance industry is? It would be interesting to imagine what could be accomplished if all those dollars and bright minds were being utilized in a truly 'value added' cause.
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Old 12-15-2007, 12:38 PM   #59
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I general, If find that most people who are upset about the estate tax fall into one of two categories; 1) people who would not be affected by the tax but are opposed to all taxes, of any type and 2) people who are upset that they are going to finally have to pay taxes on all those capital gains that have NEVER been taxed before. I have little sympathy for either group.

1). Can you point out anyone on this Forum who have argued against ALL taxes? Or anyone in the major political parties who argue against ALL taxes? This is a common untrue slur thrown out as a red herring.

2.) Capital gains that have never been taxed before means the appreciated assets have never been sold before. And you know what that means? It means the owners have never benefitted from spendable cash before either. Why should the government be the first to realize a huge chunk (55%) of cash on the appreciation of those assets instead of the surviving families when the owners dies? Corpse robbing used to be socially unacceptable, but for the government it's legallized.
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Old 12-15-2007, 12:57 PM   #60
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