Estate taxes

[kcowan]

BTW IMHO, Warren Buffet is a flaming hypocrite on this issue. He favors the estate tax, meanwhile he gives most of his money to a foundation, specifically to avoid estate taxation.

No way. Buffet is on record saying we should keep the taxes to avoid creating family dynasties and to encourage the creation of charitable foundations. With the Bush tax reductions, he could pass the whole $43 billion to his heirs but has chosen to give them only $7 billion.

 

[Leonidas]

No way. Buffet is on record saying we should keep the taxes to avoid creating family dynasties and to encourage the creation of charitable foundations. With the Bush tax reductions, he could pass the whole $43 billion to his heirs but has chosen to give them only $7 billion.

Only $7 billion?? The heartless bastard

 

[Martha]

Here is a study from the Congressional budget office which indicates that the estate tax at the current rates does not unfairly burden family farms and small businesses. http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf

One more point. Estate taxes are simple if you lead a simple life. Even if you are rich. Value the assets at fair market value and pay the tax. Complications come when you try to take discounts on the valuation or try to squirrel away your assets.

 

[macdaddy]

If they lower the limit back to a million, that could create a lot of pain. One or two modest houses in California/Boston/New York and you're at a million. Hopefully they will keep it at 3.5 million, which seems like a reasonable rate. Would anyone on this board really rather hand their money over to the government rather than their kids and grandkids? I think some of you are just all talk...

 

[bosco]

First, to the person who asked about cutting spending.... I can cut a LOT of spending... first, repeal the drug welfare program that cost trillions... second, don't give a full cost of living to SS and other payments... let them stay the same for a few years... cut 'welfare' even more, cut education from the federal govnt (which they should not be in anyhow)... and I can go on..

As for keeping wealth in families... well, this just does not happen. I had read an article many years ago that said the kids or the grandkids of wealthy parents spent the money... only the very very rich keep it..

And the tax does not bring in that much money to the gvmt.... and the cost of enforcement is also one of the highest for each $ of tax...

I think that there should be no estate tax... OK, get rid of the step up in basis... fine, that is fair. Also, tax all deferred income... again, fair.. but why should I pay up to 50% of my estate as a tax Just is not fair..

what welfare? That nasty liberal Clinton basically got rid of it.

How about ending the "war on drugs" and whacking all the money given to law enforcement for that insanity? The last thing this society wants is to stop drug abuse--watched TV lately? Seems like half the adds are telling people to beg their doctor for some drug or another. This society loves drugs--just wants to keep the monopoly intact.

Great idea--cut education!! Gee, that'll really help society out. That'll really help the tax base too--get rid of those pesky upper middle class jobs and replace them with Walmart employees.

Believe it or not, ss is not the big problem--it's medicare. SS would be fine if it weren't being continually raided to buy bombs and other essentials.

Good thing they don't let people from Texas with these kind of views be president!!

 

[youbet]

I join with the estate tax lovers...........my kids get a nice chuck of change.

Don, perhaps you didn't mean it this way, but your position "sounds" highly hypocrital the way you said it.

If an estate tax is working the way it should, when you die your entire net worth (except for a few small personal, sentimental items) should pass to the government, not to your kids. Your net worth held in joint tenancy with your DW should have 50% pass to the government.

When you say you're in favor of a "nice chunk of change" passing to your kids, you're saying you're against an effective estate tax and only want a nominal estate tax which still protects the estates of the elitist rich.

 

[Zathras]

Actually quite a difference. Cost $2 bucks and takes a couple minutes to play the lottery. On the other hand our estate took a life time of:
investing every nickel I hand,
risk taking,
small business ownership,
LYBM - big time,
employee others who paid taxes,
More hours worked then humanly healthy
paying full bill for kids education, etc.

Rhonda, by your logic, the easier the money comes, the more it should be taxed??
So, if I have a very lucrative business and the money flows easily, should that be taxed at a higher rate than someone that scratches and claws for every bit of profit?

I actually like the idea. However, I have no idea how the tax rates would be calculated.

Personally, I think the biggest issue with the estate tax is the rate, not it's existance.

 

[youbet]

Here is a study from the Congressional budget office which indicates that the estate tax at the current rates does not unfairly burden family farms and small businesses. http://www.cbo.gov/ftpdocs/65xx/doc6512/07-06-EstateTax.pdf

But isn't there a study about studies that shows the government has a study to justify every activity (including studies) in which they are engaged?

 

[HFWR]

The fox guarding the henhouse...

 

[Hamlet]

I've never understood why the Estate Tax generates the passion that it does. I'm a small government conservative/libertarian. If I had my way, there would be no Social Security, no Medicare, no Federal Department of Education, etc. I dislike all taxes.

That said, I would rather pay the Estate Tax than any of the following: income tax, FICA, capital gains tax, taxes on dividends, sales tax, or property taxes.

Assuming that we ever get spending down to the point where cutting taxes is an option, I would rather cut the income tax instead of the estate tax. If I was designing the Estate Tax, I would make the exemption something like 5 million (indexed to inflation), and tax the remainder at whatever the highest income tax rate happened to be at the time.

Talk to me about getting rid of the Estate Tax after you get rid of taxes that are preventing me from building an estate worth taxing

 

[donheff]

Don, perhaps you didn't mean it this way, but your position "sounds" highly hypocrital the way you said it.

If an estate tax is working the way it should, when you die your entire net worth (except for a few small personal, sentimental items) should pass to the government, not to your kids. Your net worth held in joint tenancy with your DW should have 50% pass to the government.

When you say you're in favor of a "nice chunk of change" passing to your kids, you're saying you're against an effective estate tax and only want a nominal estate tax which still protects the estates of the elitist rich.

I would never say that the Government should take your entire estate. What I believe as that we should have a reasonable estate tax exemption and a tax (certainly not 100% or even more than 50%) on the estate over that exemption amount. That way, people who can afford it (like me) contribute extra to the funding for this great nation --- BUT, with the reasonable exemption and the fact that only 1/2 or less of the remainder goes to the Government, my kids would still get a nice inheritance. Not enough to start a dynasty maybe but enough to make a huge difference. I don't have a hard position on what the appropriate exemption level might be ($1M, $2M...) or what the tax rate should be. But I don't believe we should have raised the exemption (a la the recent Bush cuts) without offsetting increases elsewhere. Otherwise we are just exacerbating the fiscal crisis we face. I would not object, for example, to raising the exemption level but increasing the maximum tax on the remainder from 46% to say 50%. And yes, if things go well, that would still impact me so I am not simply taxing the other guy.

 

[youbet]

I would never say that the Government should take your entire estate. What I believe as that we should have a reasonable estate tax exemption and a tax (certainly not 100% or even more than 50%) on the estate over that exemption amount. That way, people who can afford it (like me) contribute extra to the funding for this great nation --- BUT, with the reasonable exemption and the fact that only 1/2 or less of the remainder goes to the Government, my kids would still get a nice inheritance. Not enough to start a dynasty maybe but enough to make a huge difference. I don't have a hard position on what the appropriate exemption level might be ($1M, $2M...) or what the tax rate should be. But I don't believe we should have raised the exemption (a la the recent Bush cuts) without offsetting increases elsewhere. Otherwise we are just exacerbating the fiscal crisis we face. I would not object, for example, to raising the exemption level but increasing the maximum tax on the remainder from 46% to say 50%. And yes, if things go well, that would still impact me so I am not simply taxing the other guy.

IMO Don, you're much too kind to the rich. No need for an exemption (other than small, sentimental items). Let each generation stand on their own merit. Let the population as a whole benefit from intergenerational transfer of wealth, not just a few individuals lucky enough to be born into the good life.

Frankly, I'm surprised to hear you take such a conservative position.

 

[HelpMeRhonda]

Rhonda, by your logic, the easier the money comes, the more it should be taxed??
So, if I have a very lucrative business and the money flows easily, should that be taxed at a higher rate than someone that scratches and claws for every bit of profit?

I actually like the idea. However, I have no idea how the tax rates would be calculated.

Personally, I think the biggest issue with the estate tax is the rate, not it's existance.

Maybe a better approach would be to lower the $$ amounts such that virtually all middle - upper class estates qualify for this tax.

I'm betting the attitudes and thoughts of fairness about the estate tax would change. Maybe there'd be enough outcry to reconsider it.

 

[HelpMeRhonda]

Talk to me about getting rid of the Estate Tax after you get rid of taxes that are preventing me from building an estate worth taxing

Exactly, if you are able to build an estate of any value under current tax burden. Your reward is knowing this tax awaits it.

 

[FIRE'd@51]

Let me throw out another thought for you folks to shoot at! I'm kind of thinking out loud here. I look at life, among other things, as a sort of game. If we are "born equal", why should some people be given a large financial head start. Would you let your opponent in Monopoly start with $10,000 while you had to start with $1500? Now I know we are not really born equal - inherited genes, intelligence, environment in which we are brought up, etc, etc. However, if you take two fairly equal persons in terms of innate potential at birth, why should one be given a financial head start? Doesn't it seem somewhat unfair that one person's child can inherit a nice house in the suburbs with additonal money to fund the property taxes, etc., while someone else's child has to save up the downpayment for that house after paying high income taxes. Mightn't it be fairer, as has been suggested by some posts above, to have a tax system with much lower income tax rates, even at the expense of higher estate taxes (perhaps 100% with no exemption, except to a spouse and a child who can't take care of himself/herself because of a disability)? Wouldn't this make the playing field more level?

 

[retire@40]

...Doesn't it seem somewhat unfair that one person's child can inherit a nice house in the suburbs with additonal money to fund the property taxes, etc., while someone else's child has to save up the downpayment for that house after paying high income taxes...

You're forgetting the part where the parent of rich child had to "unfairly" work harder (and/or smarter) than the parent of poor child to save enough money to cause this problem in the first place.

In the end, all the inequities even out.

 

[kaudrey]

If we are "born equal", why should some people be given a large financial head start. Now I know we are not really born equal - inherited genes, intelligence, environment in which we are brought up, etc, etc. However, if you take two fairly equal persons in terms of innate potential at birth, why should one be given a financial head start? Doesn't it seem somewhat unfair that one person's child can inherit a nice house in the suburbs with additonal money to fund the property taxes, etc., while someone else's child has to save up the downpayment for that house after paying high income taxes. Mightn't it be fairer, as has been suggested by some posts above, to have a tax system with much lower income tax rates, even at the expense of higher estate taxes (perhaps 100% with no exemption, except to a spouse and a child who can't take care of himself/herself because of a disability)? Wouldn't this make the playing field more level?

Yes, it would make the playing field more level. It's called socialism.

I prefer to remain in the capitalist US.

 

[donheff]

IMO Don, you're much too kind to the rich. No need for an exemption (other than small, sentimental items). Let each generation stand on their own merit. Let the population as a whole benefit from intergenerational transfer of wealth, not just a few individuals lucky enough to be born into the good life.

Frankly, I'm surprised to hear you take such a conservative position.

I am a liberal, not a Communist.

Here is a modest proposal that fits with the "take the estate" concept but ties in well to the don't involuntarily tax em view. The US Government should offer a competitive inflation protected single payment annuity to retirees. Competitive in the sense that the Government would make a profit off the annuity that would go into the tax coffers. The Feds could even be required (regulations coming here) to set the annuity rate at slightly higher than commercial rates - but fully inflation protected and backed by the full faith of *us.* Thus the tax base would do better than the insurance companies but the private sector could still compete for our business.

 

[youbet]

I am a liberal, not a Communist.

Good one!

But everything is relative Don. I believe you're not a Communist, but liberal is a relative thing. On the issue of estate taxes, you seem quite conservative from where I stand.

Perhaps rather than identify yourself as a "liberal" with a broad brush, you should say you have liberal views on many subjects, but a quite conservative view on others.

 

[Texas Proud]

Military spending: whackety-whack!

Agreed...

 

[Texas Proud]

No way. Buffet is on record saying we should keep the taxes to avoid creating family dynasties and to encourage the creation of charitable foundations. With the Bush tax reductions, he could pass the whole $43 billion to his heirs but has chosen to give them only $7 billion.

Probably not even $7 billion.... He was on record as saying he was only going to leave one million to each of his children... that anybody could live on one million... now, that was awhile ago, so maybe he is up to two... but I bet the rest of his money goes to charity when he dies...

 

[Texas Proud]

what welfare? That nasty liberal Clinton basically got rid of it.

How about ending the "war on drugs" and whacking all the money given to law enforcement for that insanity? The last thing this society wants is to stop drug abuse--watched TV lately? Seems like half the adds are telling people to beg their doctor for some drug or another. This society loves drugs--just wants to keep the monopoly intact.

Great idea--cut education!! Gee, that'll really help society out. That'll really help the tax base too--get rid of those pesky upper middle class jobs and replace them with Walmart employees.

Believe it or not, ss is not the big problem--it's medicare. SS would be fine if it weren't being continually raided to buy bombs and other essentials.

Good thing they don't let people from Texas with these kind of views be president!!

Still lots of welfare and housing subsidies... and education is a state and local obligation, not a federal... it was not long ago that the Republicans said they were going to eliminate the dept of education...

Yea, stop the war on drugs... make it legal and tax the sh*t out of it... guess what, not to many more people will get on drugs, we save a LOT in expenses and now have a new revenue stream.... win win...

Yes, Medicare is a problem, but so is SS.... to me all money spent by the gvmt is a cost and SS is one of the top three in spending..

You asked and I answered.... just because you do not like my answer is a different matter...

 

[Texas Proud]

Let me throw out another thought for you folks to shoot at! I'm kind of thinking out loud here. I look at life, among other things, as a sort of game. If we are "born equal", why should some people be given a large financial head start. Would you let your opponent in Monopoly start with $10,000 while you had to start with $1500? Now I know we are not really born equal - inherited genes, intelligence, environment in which we are brought up, etc, etc. However, if you take two fairly equal persons in terms of innate potential at birth, why should one be given a financial head start? Doesn't it seem somewhat unfair that one person's child can inherit a nice house in the suburbs with additonal money to fund the property taxes, etc., while someone else's child has to save up the downpayment for that house after paying high income taxes. Mightn't it be fairer, as has been suggested by some posts above, to have a tax system with much lower income tax rates, even at the expense of higher estate taxes (perhaps 100% with no exemption, except to a spouse and a child who can't take care of himself/herself because of a disability)? Wouldn't this make the playing field more level?

NO..

 

[brewer12345]

Still lots of welfare and housing subsidies... and education is a state and local obligation, not a federal... it was not long ago that the Republicans said they were going to eliminate the dept of education...

Yea, stop the war on drugs... make it legal and tax the sh*t out of it... guess what, not to many more people will get on drugs, we save a LOT in expenses and now have a new revenue stream.... win win...

Yes, Medicare is a problem, but so is SS.... to me all money spent by the gvmt is a cost and SS is one of the top three in spending..

You asked and I answered.... just because you do not like my answer is a different matter...

And lets whack the crap out of that bloated military budget while we are at it. If you are gonna leave the seniors dying in the streets, the soldiers and defense contractors should feel the pain, too.

 

[youbet]

, the soldiers and defense contractors should feel the pain, too.

Gotta disagree with you on that one brewer....... I have no problem with a smaller military aimed at basic self-defense of our country. But I would want the personnel to be higher paid and better equipped. No way would I want to increase their pain.