Inheritance Tax Should be Abolished

[Gumby]

..

 

[Freein05]

you think the federal government can better spend the money I might leave behind ( FIRECALC says $1.98) than anyone I might choose to leave it to?
Just remember that Tax revenues are at an all time high despite the Bush tax cuts and our Lousy economy according to the Dems and their buddies in the media.
If we weren't spending a pile of it on war I'm sure the Dems would want to spend it on expanding social programs and not reducing the debt. After all we know the Reps are trying to build bridges to nowhere

The last Democrat president (Clinton) was using the surplus to pay off the debt. The current president and Republican congress is the one that started running a deficit again. The bridge to no where was pushed by a Republican Senator from Alaska. Just wanted to make sure you had the correct parties.

 

[youbet]

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.

Actually, Roth IRA's and non-deductible contributory IRA' did not receive a tax benefit going in. You can refer to the IRS web site for info.

 

[armor99]

As far as those with estates over 17 million I really don't care.

And this is where all wealth re-distribution type thinking falls apart. Do you really think that most people who you consider weathy, consider "themselves" to be wealthy? Most likely not. There is always more money to be had, bigger homes to buy etc. Even owners of that 110' yaht, look with envy on occasion at the 200' yaht. Very few people that I know are 100% content with what they have, and never strive for more. I think this is a constant no matter how much wealth you have.
So my question is this. What if someone who makes considerably less money than you suddenly said.... "Well I do not really care about people with estates over <fill in your own value here> they are weathy anyway!" What is considered "rich" is a completely relative term. If such taxes affected someone with a $ 2mill estate, those people would yell , "Wait... do not tax me I am not rich!!! (looking at those who have a $ 5 mill estate)" And exactly the same thing would happen to those with a $20 mill estate looking at those who make even more. I guess I just find it hypocritical for folks to advocate an esate tax for the rich (whoever those folks might actually be), but not for themselves as well. Just another example of "wanting your cake, and eating it too", you just cannot have it both ways.

 

[Freein05]

Actually, Roth IRA's and non-deductible contributory IRA' did not receive a tax benefit going in. You can refer to the IRS web site for info.

True on Roth IRA but a traditional IRA or 401K contributions reduce you taxable income which in turn reduces your tax liability.

 

[ERD50]

As far as those with estates over 17 million I really don't care.

And why doesn't he care?

I didn't check freein05's other posts - maybe freein05 is one of those lawyers or planners that makes money helping the >$17M estates avoid paying this tax?

I just don't get how the 'wealth redistribution' crowd can support the estate tax, when they know that the really rich don't pay it? No matter which side of the fence you come down on regarding wealth redistribution, this just does not make sense to me.



-ERD50

 

[Freein05]

And why doesn't he care?

I didn't check freein05's other posts - maybe freein05 is one of those lawyers or planners that makes money helping the >$17M estates avoid paying this tax?

I just don't get how the 'wealth redistribution' crowd can support the estate tax, when they know that the really rich don't pay it? No matter which side of the fence you come down on regarding wealth redistribution, this just does not make sense to me.



-ERD50

Why do people call it Redistribution of Wealth? It is a tax just like any other tax. It is used to fund bad things like war and other things like to build the roads you drive on. Those who use the term are basically calling for class warfare. I do not believe in war especially the current one so why should my taxes be Redistributed to finance a war that many wealthy companies are making a killing on.

 

[ERD50]

Why do people call it Redistribution of Wealth? It is a tax just like any other tax. It is used to fund bad things like war and other things like to build the roads you drive on. Those who use the term are basically calling for class warfare. I do not believe in war especially the current one so why should my taxes be Redistributed to finance a war that many wealthy companies are making a killing on.

Well, it seems to me that the people who are in favor of estate taxes make that exact claim - they want to redistribute the wealth from the 'rich' to the 'rest of us'.

How many times have we heard Ms Paris's name associated with this tax? I don't hear that about my federal telecommunications tax.

It's not like any other tax - it is a 55% rate on your life savings (minus the exclusion). Some of this may or may not have been taxed i several ways previously - no distinction made.

Yes, taxes all go into one big pool, and this is no different. But the sources are the 'rich' that did not pay people to avoid the tax. So from that standpoint, it is some convoluted form of wealth redistribution.

FYI - I'm not against (moderate and 'fair') forms of wealth redistribution. When I made little money, I paid lower tax rates. When I made more, I paid higher rates - and I could afford to do so - it wasn't 'painful' (I had more discretionary income) and I don't think it was 'unfair'. But I think the estate tax and loopholes is just plain crazy.

-ERD50

 

[bright eyed]

just curious, does anyone know the actual percentage of those who qualify to pay the tax that avoid it? seems like the general assumption is that most don't - just wanted to know if there was any data to support this? why would so many push so hard to discard it if they weren't paying it? perhaps just to avoid the PIA to avoid it...

 

[RetireeRobert]

But I think the estate tax and loopholes is just plain crazy.

-ERD50

I think it is just a legallized, socially sanitized form of corpse robbing. They used to severly ostracize and punish the low-life who robbed jewelry or belongings from corpses. Now they call this dispicable practice "an estate tax".

 

[ERD50]

just curious, does anyone know the actual percentage of those who qualify to pay the tax that avoid it? seems like the general assumption is that most don't - just wanted to know if there was any data to support this? why would so many push so hard to discard it if they weren't paying it? perhaps just to avoid the PIA to avoid it...

I'd love to hear the numbers, but it is always tough to measure 'avoidance'.

One basic reason to be against it is the unfairness of the loopholes, and inconsistency of taxing at the same rate regardless of how much the estate was previously taxed (realized vs unrealized gains).

Honest people hate 'unfairness' even if it does not affect them directly.

I don't have to be a member of a minority to recognize how unfair discrimination can be, and take a stand against discrimination.

-ERD50

 

[Rustic23]

When we were in Napa Ca. we went to the Beringer Winery. They told us about the two brothers that founded it and how it was not owned by a big corporation. Seems like the winery was left to the widows. One died and huge estate taxes were owed and payed, then in the same year the other one died. The estate could not pay the tax without selling the winery. So now Beringers is not family owned. I don't really see how this is a good thing.

 

[RetireeRobert]

When we were in Napa Ca. we went to the Beringer Winery. They told us about the two brothers that founded it and how it was not owned by a big corporation. Seems like the winery was left to the widows. One died and huge estate taxes were owed and payed, then in the same year the other one died. The estate could not pay the tax without selling the winery. So now Beringers is not family owned. I don't really see how this is a good thing.

It's not. It's a bad thing. I rmember decades ago, early 70's, going to the Beringer Winery. Sampled a special limited edition called "Traubengold". I loved it. Only a family winery would make something like that in the limited volumes they did. It would never even occur to a corporation.

 

[bright eyed]

Well, here is some interesting counter-point...

http://www.citizen.org/documents/EstateTaxFinal.pdf


According to this report, 18 families have poured over $55 mill into the anti estate tax campaign...
I think this is an interesting point:

In 2004, for instance, the Club for Growth, one of the many “issue-advocacy groups” bankrolled by the wealthy families who appear in Spending Millions to Save Billions, ran ads throughout the South Dakota re-election campaign of Senate minority leader Tom Daschle, an estate tax supporter.
“When you die, the IRS can tax you again, taking as much as 55 percent of everything you’ve saved for your children,” intoned one of the Club for Growth spots. “Sen. Tom Daschle wants to keep the death tax.”
In fact, in the year before that ad aired, only 50 of the 7,026 South Dakotans who passed away left an estate large enough to face even a penny of federal estate tax.
And the current estate tax impacts even fewer families.


In 2006,individuals receive a $2 million exemption from the estate tax and couples receive a $4 million exemption. As a result, it is estimated that less than one-third of one percent (0.27 percent) of all estates will pay the federal estate tax in 2006, about one out of every 370 estates

. Based on census projections for 2006, 2.3 million people will die in 2006 and only about 6,300 will have
taxable estates.1​

And that's not counting the people who pay it, just eligible to pay it...​

 

[armor99]

Why do people call it Redistribution of Wealth? It is a tax just like any other tax. It is used to fund bad things like war and other things like to build the roads you drive on. Those who use the term are basically calling for class warfare. I do not believe in war especially the current one so why should my taxes be Redistributed to finance a war that many wealthy companies are making a killing on.

It is called re-distribution of wealth when a special tax or fee is targeted specifically at a group of people that make more than the average. If a tax is applied to everyone reguardless of wealth status, then I might not like the tax, but at least it is fair accross the board.
When a tax is imposed on only the top 10% (or whatever percentage you might include), then it has the net effect of making that percentage "poorer" and usually that money gets redirected to lower income folks in the form of government programs, making those people "richer". If this sounds like a robin hood type scenario... that is because it is...

 

[ERD50]

... The estate could not pay the tax without selling the winery. So now Beringers is not family owned. I don't really see how this is a good thing.

Well, here is some interesting counter-point...
... only 50 of the 7,026 South Dakotans who passed away left an estate large enough to face even a penny of federal estate tax.
And the current estate tax impacts even fewer families.

Interesting - I keep picking up very mixed messages from the liberal crowd. Maybe someone can explain.

1) I thought liberals hated big corporations and idolized the small family owned mom-pop operations. Yet, this tax can destroy family owned businesses (though I imagine some expensive planners and lawyers could have 'saved them').

2) Since when do we justify being unfair to a group of people, by pointing out that it is a small group? That's a pretty slippery slope. << I decided to delete a colorful analogy here - but not the reference to it >>

I think the moral compass must be getting bumped around a bit too much to give a true North reading?

-ERD50

 

[bright eyed]

Why paint with such broad stroaks? None of us fall so neatly into such boxes do we?

I just wanted to provide some numeros to contribute to the discussion

<<Since when do we justify being unfair to a group of people, by pointing out that it is a small group? That's a pretty slippery slope>>

I'm not convinced it's unfair...The $2 mill is going up in 2009...to $3.5 million - which means $7 mill for a couple!

If you allow this massive accumulation of wealth forever, i don't quite see how that is "fair" since very quickly none of the recipients earned anything but by being born into the right family and then the vast majority of us are born into the wrong ones!

 

[Martha]

 

[Freein05]

Interesting - I keep picking up very mixed messages from the liberal crowd. Maybe someone can explain.

1) I thought liberals hated big corporations and idolized the small family owned mom-pop operations. Yet, this tax can destroy family owned businesses (though I imagine some expensive planners and lawyers could have 'saved them').

2) Since when do we justify being unfair to a group of people, by pointing out that it is a small group? That's a pretty slippery slope. << I decided to delete a colorful analogy here - but not the reference to it >>

I think the moral compass must be getting bumped around a bit too much to give a true North reading?

-ERD50

What good does using labels like liberals add to this discussion.

 

[Tadpole]

bright eyed
You are right. Also, I won't support any new tax cuts for the golden asses until the AMT is fixed and the government bills are paid. You get the money from those who have the money. I can't stand all the whining about the rights of people who did not earn their money while people who do earn their money are having their SS borrowed and are told "we stole it; it's gone" by the very people that keep spending it as fast as it comes in.

If you want to be the biggest war machine in the world - fine, pay for it. If you want to subsidize rich companies - fine, pay for it. If you want to outsource the government to private contractors - fine, pay for it. Etc. At some point these arguments are beyond ridiculous considering the spending side.

 

[TickTock]

And this is where all wealth re-distribution type thinking falls apart. Do you really think that most people who you consider weathy, consider "themselves" to be wealthy? Most likely not. There is always more money to be had, bigger homes to buy etc. Even owners of that 110' yaht, look with envy on occasion at the 200' yaht. Very few people that I know are 100% content with what they have, and never strive for more. I think this is a constant no matter how much wealth you have.
So my question is this. What if someone who makes considerably less money than you suddenly said.... "Well I do not really care about people with estates over <fill in your own value here> they are weathy anyway!" What is considered "rich" is a completely relative term. If such taxes affected someone with a $ 2mill estate, those people would yell , "Wait... do not tax me I am not rich!!! (looking at those who have a $ 5 mill estate)" And exactly the same thing would happen to those with a $20 mill estate looking at those who make even more. I guess I just find it hypocritical for folks to advocate an esate tax for the rich (whoever those folks might actually be), but not for themselves as well. Just another example of "wanting your cake, and eating it too", you just cannot have it both ways.

Bingo!

Make the exemption $0 and keep the tax rate at 55%, and see how many folks support it.

 

[TickTock]

I can't stand all the whining about the rights of people who did not earn their money while people who do earn their money are having their SS borrowed and are told "we stole it; it's gone" by the very people that keep spending it as fast as it comes in.

Tadpole,

I'm assuming here that by 'not earn their money' you mean inheritances. No, that person did not earn it - but someone else did work for it, save, and invest. Why shouldn't they decide who gets the fruits of their labors instead of the government?

 

[ERD50]

I'm not convinced it's unfair...The $2 mill is going up in 2009...to $3.5 million - which means $7 mill for a couple!

That is not the real 'unfairness' I speak of. The major 'unfairness' that I speak of is how the very rich evade the estate tax altogether. I said I'm OK with the idea of some wealth redistribution. I happen to think the idea of an estate tax is not a good way to do it, and I think the current system of loopholes make it an abominable way to do it.

This is one of the inconsistencies I just don't get. Why support a 'tax on the rich', that is evaded by 'the rich enough to hire people to help them evade it'?

If you allow this massive accumulation of wealth forever, i don't quite see how that is "fair" since very quickly none of the recipients earned anything but by being born into the right family and then the vast majority of us are born into the wrong ones!

Well, I addressed this before, but once again - the estate tax does a really, really poor job of attacking this issue. If that is what you think we need, you should support an $X limit per person, right? (and then figure out how to do this w/o creating loopholes to help a truly needy child). The Estate tax could be 99%, and I imagine there would still be plenty of money for a Ms Hilton to live an 'unfair' lifestyle.

And I said this somewhat tongue-in-cheek (on the Danny thread I think), but the advantages of being born into the 'right' family are not just a matter of inheritance, but upbringing. It is a fact that the children of higher income people do better in school - this is before they inherited a penny! So let's switch babies at birth - give 'em a fair chance. My kids had the 'unfair' advantage of being born into a family of educated, hard-working, stable parents - no fair! We should have the govt steal them from us, put them in the homes of drug addicts and give us a couple of crack babies. Fair enough?

( sorry if Martha just imploded - I didn't want to do it, I swear )

The first step to solving a problem is - defining the problem.

What good does using labels like liberals add to this discussion.

Sorry - it was just a convenience. I should have said 'some supporters of the Estate Tax'. But I'm not aware of any non-liberals that are really in favor of the Estate Tax - and I don't count the ones who say they are, but make sure they aren't paying it.

-ERD50

Here Martha, maybe this will help

 

[gandalf42]

That is not the real 'unfairness' I speak of. The major 'unfairness' that I speak of is how the very rich evade the estate tax altogether.

This keeps coming up, but is this a truth or an urban myth? The article quoted earlier had wealthy families donating millions towards eliminating the estate tax. Gates and Buffet are giving their $ away.

Sure, I can avoid taxes by giving away everything, there's just not much future in it.

 

[Martha]

This keeps coming up, but is this a truth or an urban myth? The article quoted earlier had wealthy families donating millions towards eliminating the estate tax. Gates and Buffet are giving their $ away.

Sure, I can avoid taxes by giving away everything, there's just not much future in it.

Yes, the very wealthy avoid estate taxes by setting up foundations. So charities benefit as a result. Now sometimes those foundations employ the grantor's relatives for a hefty salary, so wealth to some extent is perpetuated that way.

Now back to bowing out of this discussion. Bad Martha! Bad!