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No politics please, thoughts on repeal of the estate tax ?
12-12-2017, 04:56 PM
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#1
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Thinks s/he gets paid by the post
Join Date: Oct 2002
Location: Chattanooga
Posts: 3,871
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No politics please, thoughts on repeal of the estate tax ?
So what does the group think about the possible repeal of the estate tax. Granted I doubt if it would affect many, if any here, but just curious as to your thoughts. Some good background reading about the estate tax below.
https://www.cbpp.org/research/federa...ral-estate-tax
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12-12-2017, 05:06 PM
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#2
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Moderator
Join Date: Oct 2010
Posts: 10,622
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I heard Bill Gates Sr talk about it once. Pretty convincing that it should remain, but at a high limit. I was solidly in the "repeal", "what's mine is mine", camp, but then I started thinking about what Gates was saying about how these large stashes are made possible by the society where the individual resides, so questioned whether that wealth should be bottled up through unlimited transfers.
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12-12-2017, 05:12 PM
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#3
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Mar 2007
Posts: 14,328
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I'd like to see a special exemption for the farmers and small business owners who would be severely affected, but over a certain inheritance limit, I think it is a good thing.
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12-12-2017, 05:54 PM
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#4
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Thinks s/he gets paid by the post
Join Date: Jul 2011
Posts: 1,278
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Quote:
Originally Posted by sengsational
I heard Bill Gates Sr talk about it once. Pretty convincing that it should remain, but at a high limit. I was solidly in the "repeal", "what's mine is mine", camp, but then I started thinking about what Gates was saying about how these large stashes are made possible by the society where the individual resides, so questioned whether that wealth should be bottled up through unlimited transfers.
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There is so much society support provided which allows people to become successful. It is not done in a vacuum. I am not sure of the 'fair' cut-off point but I am convinced that there is one and that it should exist.
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12-12-2017, 06:17 PM
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#5
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Recycles dryer sheets
Join Date: Nov 2017
Posts: 137
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I think the estate tax should only apply at higher amount. Maybe over 50M. But one thing that seems to be highly beneficial that I do not see any justification is the step up basis. I am hoping to benefit from this myself. But it is unfair to not pay any income tax on appreciation upon death.
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12-12-2017, 06:27 PM
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#6
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Thinks s/he gets paid by the post
Join Date: Apr 2005
Location: Midwest
Posts: 2,960
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The simple fact that it is possible to concentrated that much wealth in so few hands is itself, anti-freedom. It cannot be permitted. Societies exist to further themselves. The very existence of that thing we call an economy is to make sure everyone gets what they need. Not to make any individual or group wealthy at its own expense. The very existence of such unbalanced concentrations, whatever the cause, (never One's own efforts. that is a cog in the cosmic wheel) is a sign that the economy is not working. Not a sign of it working
Private property rights exist only to the extent the rest of society has determined they further the larger interests of society. Not the property holder. Property rights themselves are creatures of law and as such are defined by the society making the laws.
According to the article the tax should be way higher. Almost nobody is eligible to pay it. 80% of those who do are relative pikers on the wealth scale anyway. The really big owners don't pay it anyway. but it is "an important source" of revenue. And we're not even getting near the off-shored money here.
What's this I've been hearing about a 17 trillion dollar national debt?
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12-12-2017, 06:51 PM
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#7
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Thinks s/he gets paid by the post
Join Date: Nov 2005
Posts: 1,590
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From a taxation simplification standpoint, it doesn't make any sense to keep the estate tax but set a humongous lifetime exclusion. Why? Because anyone who makes a gift over the annual gift tax exclusion ($15k in 2018) will have to file a gift tax return and track the amount of the lifetime exclusion they have used despite the fact that they have a snowball's chance in heck of ever exhausting the new, huge lifetime exclusion.
I expect Porky will be along soon since this is an inherently political topic, so I won't bother saying anything more.
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12-12-2017, 06:55 PM
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#8
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Thinks s/he gets paid by the post
Join Date: Dec 2016
Location: DC area
Posts: 2,464
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Quote:
Originally Posted by razztazz
The simple fact that it is possible to concentrated that much wealth in so few hands is itself, anti-freedom.
...
What's this I've been hearing about a 17 trillion dollar national debt?
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So transferring said wealth to the central government, literally at the point of a gun if you don't comply, is "pro-freedom"?
Anyway, the debt to two digits is $20 trillion, and if you eliminate the Estate Tax, the debt to two digits is, wait for it... still $20 trillion. Per the article, the Estate Tax is worth only $0.269 trillion in revenues over 10 years.
I'm OK with the existence of an estate tax above a level that causes farms and small companies to blow up, but the whole discussion is noise in terms of the Federal budget.
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12-12-2017, 07:01 PM
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#9
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Thinks s/he gets paid by the post
Join Date: Nov 2011
Posts: 3,865
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Taxation by government does not create wealth, it redistributes wealth. If the goal is the benefit of society, IMO the answer comes down to who one feels does a better job with wealth, individuals or government? Both invest, spend, and generally do various other things one can with money. I would argue individuals do those things more efficiently than government.
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12-12-2017, 07:10 PM
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#10
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Thinks s/he gets paid by the post
Join Date: Apr 2005
Location: Midwest
Posts: 2,960
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Quote:
Originally Posted by USGrant1962
So transferring said wealth to the central government, literally at the point of a gun if you don't comply, is "pro-freedom"?
Anyway, the debt to two digits is $20 trillion, and if you eliminate the Estate Tax, the debt to two digits is, wait for it... still $20 trillion. Per the article, the Estate Tax is worth only $0.269 trillion in revenues over 10 years.
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All of the above is essentially non-sequitur vis a vis estate taxes, taxes in general, economies and their purpose, and the national debt and really has naught to do with my rather dry, academically oriented post. But whatever. Have the nicest of days.
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12-12-2017, 07:17 PM
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#11
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Thinks s/he gets paid by the post
Join Date: Apr 2005
Location: Midwest
Posts: 2,960
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Quote:
Originally Posted by GrayHare
Taxation by government does not create wealth, it redistributes wealth. If the goal is the benefit of society, IMO the answer comes down to who one feels does a better job with wealth, individuals or government? Both invest, spend, and generally do various other things one can with money. I would argue individuals do those things more efficiently than government.
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By the mere fact that the current wealth differential situation exists you can be no more than partially correct.
And btw, there can be none of this wealth, great concentrations of wealth, without a government. If there were suddenly no government the wealthy and powerful would be the government . The only question that remains is what kind of government you want and what you want it to do. "Feeling" that those with the most automatically do the best for everyone and the government (ie The People) shouldn't do anything vis a vis The People because it is by its existence always wrong is the stuff of opinion, to put it mildly.
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12-12-2017, 07:18 PM
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#12
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Full time employment: Posting here.
Join Date: Jan 2011
Location: Southern Maine
Posts: 672
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Quote:
Originally Posted by davef
There is so much society support provided which allows people to become successful. It is not done in a vacuum. I am not sure of the 'fair' cut-off point but I am convinced that there is one and that it should exist.
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Of course there is a 'fair' cut-off point.... one dollar more than i have.
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12-12-2017, 07:21 PM
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#13
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Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by socca
From a taxation simplification standpoint, it doesn't make any sense to keep the estate tax but set a humongous lifetime exclusion. Why? Because anyone who makes a gift over the annual gift tax exclusion ($15k in 2018) will have to file a gift tax return and track the amount of the lifetime exclusion they have used despite the fact that they have a snowball's chance in heck of ever exhausting the new, huge lifetime exclusion.
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We have, on occasion, exceeded the limit.
We didn't bother with the gift tax return, exactly because we have a snowball's chance of ever exhausting the new, huge lifetime exclusion. We'd have to win the lottery to end up with $11 million.
I can't figure out how the IRS would ever know or care about our omission.
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12-12-2017, 07:34 PM
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#14
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Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by travelover
I'd like to see a special exemption for the farmers and small business owners who would be severely affected, but over a certain inheritance limit, I think it is a good thing.
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"In cases where estate tax is owed, normally it's due within 9 months from the date of death. But family members who inherit a farm and plan to continue running it are allowed to take 15 years to pay it off if the farm assets make up 35% or more of an estate's value. What's more, the heirs may choose to only pay interest on the tax due in the first four years, Kaufman said."
Let's do the math. Farm is valued at $21 million. The couple's exemption is $11 million, $10 million is taxable @ 40% = $4 million.
If the heir wants to pay a lump sum, the simple solution is to sell $4 million of land and end up with a farm valued at $17 million. Here in Iowa, that is about 2,400 acres or 3 1/2 sections, way bigger than the neighbors. Certainly a "viable" family farm.
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12-12-2017, 07:35 PM
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#15
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jul 2008
Posts: 35,712
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If society is more patient and willing to wait, much of the wealth collected by the rich individuals will be consumed, dissipated in the next 2 or 3 generations.
Rockefeller's fortune was estimated at $320 billion, in today's dollars. That's more than any billionaire today. Rockefeller died in 1937. Forbes magazine estimated that all of his descendants are collectively worth about $11 billion today.
Some years ago, I read in the local paper about a homeless person found dead in a back alley here in town. Nothing newsworthy except that she was a descendant of a well-known industrialist. He was the founder of Douglas Aircraft, if my memory serves.
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12-12-2017, 07:38 PM
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#16
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Thinks s/he gets paid by the post
Join Date: Oct 2006
Posts: 4,629
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Quote:
Originally Posted by Cpadave
But one thing ... that I do not see any justification is the step up basis.
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+1
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12-12-2017, 07:55 PM
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#17
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Thinks s/he gets paid by the post
Join Date: Sep 2014
Location: The Great Wide Open
Posts: 3,779
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IIRC,I believe at the end of 2015 the sum of the wealth of the top 100 billionaires was about 2.25 trillion dollars. Even if we taxed those folks and the next 200 at 100%, it wouldn't touch the budget deficit.
Like us retirees, it isn't the assets that makes us wealthy, it's spending beneath your means.
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12-12-2017, 07:57 PM
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#18
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gone traveling
Join Date: Apr 2011
Posts: 3,375
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My thought is why anyone thinks it's possible. Nothing about that in current tax bills.
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12-12-2017, 08:07 PM
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#19
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Give me a museum and I'll fill it. (Picasso) Give me a forum ...
Join Date: Jun 2007
Posts: 13,184
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Quote:
Originally Posted by Cpadave
I think the estate tax should only apply at higher amount. Maybe over 50M. But one thing that seems to be highly beneficial that I do not see any justification is the step up basis. I am hoping to benefit from this myself. But it is unfair to not pay any income tax on appreciation upon death.
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Seems difficult for heirs to track basis. It's been only recently that holding companies have been required to track it for customers. Maybe in 50 years, when nearly everything has been tracked, it'll be feasible.
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12-12-2017, 08:42 PM
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#20
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Thinks s/he gets paid by the post
Join Date: Oct 2004
Location: Portland
Posts: 2,038
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Quote:
Originally Posted by RunningBum
Seems difficult for heirs to track basis. It's been only recently that holding companies have been required to track it for customers. Maybe in 50 years, when nearly everything has been tracked, it'll be feasible.
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I agree, if my Mom had passed away 3 weeks later I would have had to figure out the cost basis of the stock my Father purchased in the 50s - 70s in his ESPP plus incorporate all the stock splits. I don't know how I would have done that.
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