VaCollector
Full time employment: Posting here.
- Joined
- May 12, 2007
- Messages
- 549
Now back to bowing out of this discussion. Bad Martha! Bad!
Now back to bowing out of this discussion. Bad Martha! Bad!
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'?
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!
Until 2011 when the exemption goes back down to $1 mil.
The battle over the unfair death tax will be looming the next few years.
2011 and later, 55% confiscation of everything over $1 mil unless Congress acts to extend the 2010 rules.
Why the heck shouldn't a person who worked hard, saved, and wisely managed the money that flows through his life leave it to his family if he so chooses? Some people are going to win the womb lottery, the looks lottery, the intelligence lottery, the athletic ability lottery, the state lottery, and so on. Why is it better that the federal government decide what to do with the money?Well, avoiding the estate taxes by setting up foundations perpetuates the wealth hoarding
Better that the person who did it himself and created the wealth decide how it be distributed after his death than the government, I say.I find it fascinating that the dyed-in-the-wool libertarian, rugged individualistic, John Galt loving, "I stand on my own two feet, I did it myself and need no one else" types are supportive of inherited wealth.
thanks for the clarification erd i did misunderstand what you were saying...
ok, then why not get rid of the loopholes?
We've had the $x limit per person discussion this year already didn't we? Danny?!
This keeps coming up, but is this a truth or an urban myth?
Exactly - this is another one of those inconsistencies from supporters that I just don't get. The 'but it encourages the rich to give it to charity' approach is not consistent with 'but we do not want them to pass it to their little undeserving brats' approach.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.
-ERD50If someone is super-rich and the goal is to pass the maximum to their heirs, charitable donations would be discouraged by the rules you point out. How about a simple example with simplified rules just to get the point across?
Assume the estate tax exclusion is $1M and everything above that is taxed at 50%.
Mr MoneyBags has an $11M estate. One heir; a brat daughter that he wants to leave as much as possible to, because he thinks she is an angel.
A) Bequeaths no money to charity. The $1M exclusion passes to the brat tax free. 50% of the remaining $10M goes to estate taxes, leaving brat with $5M and the $1M exclusion. Brat gets $6M.
B) Bequeaths $10M to charity. The $1M exclusion passes to the brat tax free. None of the remaining $10M goes to estate taxes or to the brat, it all went to charity. Brat gets $1M.
The choice is really, 'do I give half to the govt and half to heirs OR all to charity and none to heirs' (or some blend of the two). I guess there are more advanced strategies around this, but now we are back to loopholes for the super-wealthy, with that 'strategy' money going to the financial planners instead of to social programs which is where I thought you wanted it to go? And the more modestly rich get hit with the full bill.
So yeah, I think the estate tax is lousy policy.
What good does using labels like liberals add to this discussion.
To be honest, I am not 'supportive' of inherited wealth - I simply think it is none of my business. If you earned it, paid taxes along the way - do with it as you see fit.
And you think they won't?
I believe you are incorrect. My contributory IRA's are non-deductible and funded with post tax money due to IRS regulations. The IRS web site is very direct and clear on this. Hard to understand how you became confused."Paying taxes along the way" is a major fallacy in the estate tax debate. 401(k)'s and IRA's have never had income taxes paid on either the contributions or the capital gains.
Personally, I think it's the practice of adjusting the basis of equities up that should be eliminated. You inherit 100,000 shares of Jones Corp that dad bought for a nickle each and are now worth $100 each, you (actually dad's estate) should pay the capital gain on the $99.95!Same for those inherited shares of Microsoft bought for 40 cents in 1985. Ditto for most businesses and farms.
There are reasons why Congress doesn't fix the problems. They would distroy an entire industry made up primarily of their classmates.There are lots of problems with the way the estate tax is implemented, but that doesn't mean abolishing it is a great solution either.
Oh well, 'liberal' is a no-good label, but 'dyed-in-the-wool libertarian' isn't. There's that old 'consistency' thing I keep bringing up.
..............Seems like an NST would have been much more 'fair'?-ERD50
"Paying taxes along the way" is a major fallacy in the estate tax debate. 401(k)'s and IRA's have never had income taxes paid on either the contributions ..........
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!
If the Dems are still in control of both house of Congress, you think they are going to extend the evil Bush tax cuts?
Aside from a general hostility to inherited wealth, I have a real problem with the step up basis on inherited assets. It is fundamentally unfair to those who have "paid along the way". But I suspect those who abhor the estate tax would also object vociferously to the elimination of this provision as well.
I guess the question that I would have is what does it matter to you, or to anyone for that matter how much money someone has? Do you, or do others believe that there is only a finite sum of money in the US? As in, if someone has more money than you it means there is "less" available for you? Does a family having great weath that was inherited somehow impede your ability, or anyone elses ability to do the same? This is a viewpoint I have never understood. I just cannot see how anyone elses wealth, or lack of it, prohibits me from achieving whatever financial goals that I might strive for. Just because my neighbor down the street might have a job making a higher salary than I do, does not mean that he "took" money away from me somehow.
I do believe that people should achieve things for themselves in life. But that does not mean I believe that everyone in life should be "forced" by the govt or anyone else to start off life with nothing either. As the saying goes... "life is not fair", and the idea that the govt should artificially try to start everyone in life economically equa,l is not only impossible, but immoral to even try. Once someone has built up their fortune, they should be free to spend, or not spend that fortune as they see fit. And if it makes that person happy to give it away as an inhertance to their children, then they should be free to do so.