Buffett on estate taxes - Page 2

clifp · 11-18-2007, 07:16 PM

Quote:

Originally Posted by RetireeRobert

You have no family? I would worry about my family and their financial future, if the government takes a big chunk of my wealth "from them" just because I died.

No I don't have a kids, my estate will be left primarily to charities, a nephew and niece (and my siblings who are much older.) Spouses are a non issue since money transfer tax free to them.

Lets say the the estate tax laws revert to their old levels and I die in 2011. Roughly speaking my Nephew and Niece will get about $1 million, if I die tomorrow the amount goes up to about 1.3 million since my estate won't pay taxes. Currently both 20 something kids are struggling financial so I am sure either sum will make a big difference. I am guessing my nephew will grumble about Uncle Sam collecting $300K and my neice will thank the lord.

The question I have for all of the opponents of the estate tax is how does Uncle Sam replace the $600K my estate paid for taxes. I think the answer is obvious it comes from higher tax for the 98-99% of people who never have to pay an estate tax, increased taxes on wealthy people while they are still living, or increased government debt. Given those alternatives, I am willing to short change my nephew, niece, (or son or daughter if I had them) the extra 300K.

VaCollector · 11-18-2007, 07:45 PM

Quote:

Originally Posted by Martha

Your spouse can get your estate tax free. It is only when it goes to the next generation or someone other than a charity where there is a tax.

....that makes me feel NO BETTER at all!

RetireeRobert · 11-18-2007, 07:47 PM

Quote:

Originally Posted by clifp

The question I have for all of the opponents of the estate tax is how does Uncle Sam replace the $600K my estate paid for taxes. I think the answer is obvious .............

Cut spending.

Running_Man · 11-19-2007, 11:19 PM

And how much of Warren Buffet's estate is going to go to the government as estate tax. Has Warren outlined that yet?

clifp · 11-20-2007, 04:46 AM

Quote:

Originally Posted by RetireeRobert

Cut spending.

Are you a politician? You sure sound like one. Given a choice between two bad choices, pick a 3rd better sounding option, no matter how unrealistic.

A president who cuts federal spending will be the first one in history.

**Martha** · 11-20-2007, 08:53 AM

Quote:

Originally Posted by VaCollector

....that makes me feel NO BETTER at all!

OK, we will tax you now while you are still alive.

I support the estate tax. Already we have a big problem in the US with declining class mobility. I think of it as the Paris Hilton tax.

ERD50 · 11-20-2007, 10:03 AM

Why are these redistribution of wealth comments always country specific? Aren't we all 'brothers and sisters' worldwide? Do artificial borders mean anything to our collective conscience?

What is the average 'wealth' worldwide? I don't know the number, probably needs to be adjusted for purchasing power, but I wonder how supportive of wealth redistribution some people would be if it meant taking their life savings and redistributing it equally to the entire world.

Again, I don't know the numbers, but something tells me that any FIRE'd person in the USA has far more wealth than the average person in the world - add in all those people starving in Africa, etc.

Aren't we all 'Paris Hilton's' compared to millions (billions?) of people in the world? Shouldn't we ALL have our wealth re-distributed? If not, these comments always strike me as 'holier than thou'.

-ERD50

Hamlet · 11-20-2007, 10:22 AM

My version of the estate tax would have it exempt 5 million (indexed to inflation), and tax the rest at the highest income tax bracket (I believe the current rate is 35%).

My problem with removing the estate tax is that I prefer it to all the other forms of taxation we are faced with. I'd rather have a lower income tax than no estate tax.

ERD50 · 11-20-2007, 10:48 AM

Hamlet, I have less of a problem with it at ~ 35%. One of the issues I have is the 50% rate. And my biggest problem with that is that it fosters non-compliance - loopholes, expensive strategies, etc. Which defeats the entire purpose of it. The very rich can afford the expensive planning to circumvent it, the moderately wealthy cannot. Actually turns the whole thing on it's head.

Stupid taxes.

-ERD50

al_bundy · 11-20-2007, 10:52 AM

Quote:

Originally Posted by Running_Man

And how much of Warren Buffet's estate is going to go to the government as estate tax. Has Warren outlined that yet?

not much after he wrote that $30 BILLION check to Bill Gates and his foundation

RetireeRobert · 11-20-2007, 10:53 AM

Quote:

Originally Posted by clifp

Are you a politician? You sure sound like one.

No. I doubt I could win an election as dog catcher.

kcowan · 11-20-2007, 11:13 AM

Quote:

Originally Posted by al_bundy

not much after he wrote that $30 BILLION check to Bill Gates and his foundation

He did not write any cheque. He pledged up to $30 B but only advances funds when the cause needs the cash. At the rate that his wealth continues to grow, he may never have to touch the principal. (Although the principal is pledged, and he just continues to manage it as a trust..)

Hamlet · 11-20-2007, 11:17 AM

Yeah, I think 50% is too much, even for a Buffet-like fortune. I think my estate tax plan would be simple and a good compromise.

Write your Congressman

Quote:

Originally Posted by ERD50

Hamlet, I have less of a problem with it at ~ 35%. One of the issues I have is the 50% rate. And my biggest problem with that is that it fosters non-compliance - loopholes, expensive strategies, etc. Which defeats the entire purpose of it. The very rich can afford the expensive planning to circumvent it, the moderately wealthy cannot. Actually turns the whole thing on it's head.

Stupid taxes.

-ERD50

kcowan · 11-20-2007, 11:26 AM

Remember that equities are deemed disposed on death so the capital gains tax will have to be paid as well. Even at the 45% current estate tax, and the reduced 15% cap gains, the marginal tax rate on any gains would be over 53%. There are also some state estate taxes. And I believe they have not been getting reduced.

I think the main thing would be to set the exemption at a high level. After all, a $5 million exemption would be a drop in the bucket for Buffet and Gates.

RetireeRobert · 11-20-2007, 11:37 AM

Quote:

Originally Posted by kcowan

Remember that equities are deemed disposed on death so the capital gains tax will have to be paid as well. Even at the 45% current estate tax, and the reduced 15% cap gains, the marginal tax rate on any gains would be over 53%.

I didn't know that. What happened to the "step up in cost basis" rule on inherited property for heirs?

RetireeRobert · 11-20-2007, 11:39 AM

Quote:

Originally Posted by RetireeRobert

I didn't know that. What happened to the "step up in cost basis" rule on inherited property for heirs?

Wait a second---just noticed you are in BC Canada, kcowan. Maybe difference of tax rules in this case between Canada and US.

**Martha** · 11-20-2007, 11:47 AM

Quote:

Originally Posted by ERD50

Why are these redistribution of wealth comments always country specific? Aren't we all 'brothers and sisters' worldwide? Do artificial borders mean anything to our collective conscience?

What is the average 'wealth' worldwide? I don't know the number, probably needs to be adjusted for purchasing power, but I wonder how supportive of wealth redistribution some people would be if it meant taking their life savings and redistributing it equally to the entire world.

Again, I don't know the numbers, but something tells me that any FIRE'd person in the USA has far more wealth than the average person in the world - add in all those people starving in Africa, etc.

Aren't we all 'Paris Hilton's' compared to millions (billions?) of people in the world? Shouldn't we ALL have our wealth re-distributed? If not, these comments always strike me as 'holier than thou'.

-ERD50

Well, we don't have a world government, we can only influence our own. So I support an estate tax.

And you have to draw lines. That is reality. But I do support foreign aid, provided it isn't all ripped off by those in power. Also, we don't confiscate entire estates, we have large exemptions and only tax a portion of the estate. So wealth still can be perpetuated.

Yes, I am selfish too. I retired early rather than working to support my extended family, friends, country and world. I even suffer some guilt over that. But I still support an estate tax which most assuredly my estate will pay. Unless I give it all away to charity. Then there will not be an estate tax.

youbet · 11-20-2007, 12:27 PM

Quote:

Originally Posted by ERD50

my biggest problem with that is that it fosters non-compliance - loopholes, expensive strategies, etc. -ERD50

This is my problem with estate taxes as well. Anytime you have a major industry (estate planning in this case) thriving off a tax code meant and written to encourage loopholes and complicated, expensive work-arounds, you know there is unfairness biased against the smaller players.

If estate taxes are good, why are there so many ways to circumvent them if you hire and pay professional circumventers?

**Martha** · 11-20-2007, 12:38 PM

No different than from other taxes.

ERD50 · 11-20-2007, 12:48 PM

Quote:

Originally Posted by Martha

Well, we don't have a world government, we can only influence our own. So I support an estate tax.

And you have to draw lines. That is reality.

I do understand that - it is a reality, but excuse me if it still sounds just a bit 'convenient' < some added clarity as a post does not always convey 'tone': I don't mean that in a 'snippy' way, just a 'hmmm, something to think about' way - OK?>.

I keep hearing people say things like 'Why should Paris Hilton have all that wealth - all she did was be lucky enough to be born a Hilton?'. Weren't most of us 'lucky enough to be born in a country where there was at least a reasonable chance for success if you worked at it?'.

Quote:

But I do support foreign aid, provided it isn't all ripped off by those in power.

Som

11-19-2007, 11:19 PM	#24
Running_Man Recycles dryer sheets Join Date: Sep 2006 Posts: 387	And how much of Warren Buffet's estate is going to go to the government as estate tax. Has Warren outlined that yet? __________________ And you may ask yourself What is that beautiful house?And you may ask yourself Where does that highway go

11-20-2007, 11:26 AM	#34
kcowan Thinks s/he gets paid by the post Join Date: Jul 2006 Location: Pacific latitude 20/49 Posts: 1,545	Remember that equities are deemed disposed on death so the capital gains tax will have to be paid as well. Even at the 45% current estate tax, and the reduced 15% cap gains, the marginal tax rate on any gains would be over 53%. There are also some state estate taxes. And I believe they have not been getting reduced. I think the main thing would be to set the exemption at a high level. After all, a $5 million exemption would be a drop in the bucket for Buffet and Gates. __________________ For the fun of it...Keith

11-20-2007, 12:38 PM	#39
Martha Administrator Join Date: Feb 2004 Location: minnesota Posts: 9,866	No different than from other taxes. __________________ . Do not rely on the information provided--my posts are not to be taken as legal advice. Needless to say you must consult with your legal representative. I am not responsible for errors. If I offended you with cya I apologize. If I did not, I tried.

11-20-2007, 10:03 AM	#27
ERD50 Thinks s/he gets paid by the post Join Date: Sep 2005 Location: Northern IL Posts: 3,694	Why are these redistribution of wealth comments always country specific? Aren't we all 'brothers and sisters' worldwide? Do artificial borders mean anything to our collective conscience? What is the average 'wealth' worldwide? I don't know the number, probably needs to be adjusted for purchasing power, but I wonder how supportive of wealth redistribution some people would be if it meant taking their life savings and redistributing it equally to the entire world. Again, I don't know the numbers, but something tells me that any FIRE'd person in the USA has far more wealth than the average person in the world - add in all those people starving in Africa, etc. Aren't we all 'Paris Hilton's' compared to millions (billions?) of people in the world? Shouldn't we ALL have our wealth re-distributed? If not, these comments always strike me as 'holier than thou'. -ERD50

11-20-2007, 10:22 AM	#28
Hamlet Recycles dryer sheets Join Date: Aug 2006 Posts: 332	My version of the estate tax would have it exempt 5 million (indexed to inflation), and tax the rest at the highest income tax bracket (I believe the current rate is 35%). My problem with removing the estate tax is that I prefer it to all the other forms of taxation we are faced with. I'd rather have a lower income tax than no estate tax.

11-20-2007, 10:48 AM	#29
ERD50 Thinks s/he gets paid by the post Join Date: Sep 2005 Location: Northern IL Posts: 3,694	Hamlet, I have less of a problem with it at ~ 35%. One of the issues I have is the 50% rate. And my biggest problem with that is that it fosters non-compliance - loopholes, expensive strategies, etc. Which defeats the entire purpose of it. The very rich can afford the expensive planning to circumvent it, the moderately wealthy cannot. Actually turns the whole thing on it's head. Stupid taxes. -ERD50