Inheritance Tax Should be Abolished

[FIRE'd@51]

I find it amusing that most proponents of the estate tax want the exemption set just high enough that their estate won't have to pay it.

 

[W2R]

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.

 

[W2R]

Golf equates to being rich huh? And you know my falutin friends? Well good for you. You got me.

Better watch out with all that falutin around! Next thing you know, you'll get caught at it and your falutin days will be far behind you.

 

[nun]

Say what?

What I'm saying is that there are a lot of folks who would love to have enough money to worry about that tax. A big tax bill usually means that you have a lot of income, gains or a big estate.

 

[NotSoonEnough]

Golf equates to being rich huh? And you know my falutin friends? Well good for you. You got me.

Well, uh, argh!

I don't want to be accusing anyone of anything, but I honestly believe that regular (daily) golfers make a significant contribution to society. I mean, without them, what would the greenskeepers do all day?

 

[Danny]

The inheritance tax is set to go to $-0- in 2010. For one year.

But then in 2011 it comes back, with rate of 55% on taxable estates, under current law.

Why should families who spent lifetimes earning, sweating, slaving, saving---and paying income taxes all along--have the government confiscate 55% of their wealth when the parents die?

I believe this tax should be permanently abolished. It is punative and serves no good purpose.

 

[maddythebeagle]

I think there should be a tax on trolling thread topics.....

 

[youbet]

I find it amusing that most proponents of the estate tax want the exemption set just high enough that their estate won't have to pay it.

No different than wanting the next income tax bracket to be just over your income!

 

[ERD50]

Let them work to earn it. Paris Hilton is a good example for increasing the death tax. We all would be better off if she had not inhearted money. In fact she is the poster child for increasing the death tax.

This is a good example of how poorly these taxes accomplish what people expect.

First, the Hiltons probably made some lawyers and planners wealthier to find ways to circumvent the taxes. Second, even if the rate was 90%, I suspect that Paris could still afford her current lifestyle. So it didn't do anything that you think it might do. If you want to 'Let them work to earn it', then we would need some maximum $ figure per individual, or something. Then, exemptions for special needs, which would be used as 'loopholes' by people who can hire expensive lawyers - back to square one!

Look at Buffet he stated he is not leaving his kids anything.

You might want to check your facts. There was a thread on Buffet and estate tax a while ago. -ERD50

 

[Gumby]

..

 

[REWahoo]

That would take "use it or lose it" to entirely new heights...

 

[CyclingInvestor]

That would certainly make annuities a much better value. Even I might buy one.

 

[ERD50]

You are welcome to your belief, but I'd bet it wouldn't work out so well.

I bet there would be a lot of death-bed marriage ceremonies, or other ways around any large $ amount tax. Just like there is today.

I'm OK with some form of wealth re-distribution, but not when some can buy their way out of it. That turns the whole thing upside-down.

I say tax a little at a time while they are alive. If the $ amount is not so large at any one time, it is not worth it to pay to have someone help you circumvent it.

I'm just trying to be practical. We need to collect taxes - do it simply and effectively.


-ERD50

 

[Rustic23]

Is the estate tax indexed? If not, most on this board will pay it.

 

[Freein05]

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

 

[RetireeRobert]

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)

 

[RetireeRobert]

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.

 

[RetireeRobert]

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.

 

[RetireeRobert]

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.

 

[Freein05]

RetireeRober - Don't worry the government let's deduct your Funeral expenses from your estate. So go out with a big bang!

 

[RetireeRobert]

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"!

 

[igsoy]

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.

 

[W2R]

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.

 

[Dawg52]

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.

 

[Meadbh]

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!