Estate Tax Really Gone? Think Again. Many Will Pay More!

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jjm

Golden Member
Oct 9, 1999
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stalin - Yes, I think 0% is fair for estates less than $3 million. I thought this was plainly obvious from the plan I outlined a number of posts up. Do you read, or do you just attack for the sake of attacking?

Let these people keep the money to grow faster into the wealthier class. The wealthy class can afford to pay more. This simply delays taxation until people achieve higher levels of wealth. One pays less now, and enjoys the additional help climbing the ladder. Then one pays more later when significant wealth is achieved. Sure seems like the American way to me. Again, your point is entirely consistent with the flat tax position. Is it that you simply do not understand it, or are you just perpetually confused?
 
Feb 7, 2000
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I have a hard time understanding your point (and not solely because of your junior-high-school-esque grammar, spelling, and puncuation).

im sorry that you dont understand english as well as everybody else. or does the fact that i dont capatalize the first letter of every sentence contradict everything youve learned in your "english as a second language" class.
 
Feb 7, 2000
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Let these people keep the money to grow faster into the wealthier class. The wealthy class can afford to pay more. This simply delays taxation until people achieve higher levels of wealth. One pays less now, and enjoys the additional help climbing the ladder. Then one pays more later when significant wealth is achieved. Sure seems like the American way to me. Again

based on this logic everybody who earns less than 100k/year shouldnt pay taxes. after all this will help them climb the ladder and help them pay more later, right? do you disagree? then when does this logic of yours apply? only to estate tax?




your point is entirely consistent with the flat tax position. Is it that you simply do not understand it, or are you just perpetually confused?

no its not. i dont have a problem w/ the fact that the rich pay more, but how much more is the question.
 
Feb 7, 2000
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and just because i dont think that somebody who inherits a 500k estate should pay 0%, doesnt mean i think they should pay the same as somebody who inherits a 500m estate
 
Feb 10, 2000
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<< I have a hard time understanding your point (and not solely because of your junior-high-school-esque grammar, spelling, and puncuation).

im sorry that you dont understand english as well as everybody else. or does the fact that i dont capatalize the first letter of every sentence contradict everything youve learned in your &quot;english as a second language&quot; class.
>>



Well, frankly, yes. It seems to me I have given little cause to suspect my familiarity with the language. I would think your questionable capitalization, spelling (e.g., &quot;im,&quot; &quot;capatalize,&quot; &quot;dont,&quot; and &quot;youve,&quot; in your current post alone) and grammar would also run afoul of the lessons you would or should have learned in elementary school. I am a child of exclusively public schools (including a public college, and a public law school), yet I seem to have mastered these rules. I would not have written like you in 5th grade.

Thus endeth my insults - I hate to get personal but I take issue with the apparently endless watering-down of the English language, especially among people with pushy demeanors like yours.
 

jjm

Golden Member
Oct 9, 1999
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&quot;based on this logic everybody who earns less than 100k/year shouldnt pay taxes. after all this will help them climb the ladder and help them pay more later, right? do you disagree? then when does this logic of yours apply? only to estate tax?&quot;

Thank you for proving my point so well. You are entirely correct that our income tax code (since you are evading and shifting gears again) is progressive. No one pays the top rate until income is well in excess of $100,000. Yes indeed, people are given a break when they are climbing the income ladder too. And then they pay more when they have achieved a higher income level.

Once again, your point fits absolutely perfectly into a pure flat tax position. Why do you say that you are opposed to a flat tax?
 
Feb 7, 2000
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Thank you for proving my point so well. You are entirely correct that our income tax code (since you are evading and shifting gears again) is progressive. No one pays the top rate until income is well in excess of $100,000. Yes indeed, people are given a break when they are climbing the income ladder too. And then they pay more when they have achieved a higher income level.

Once again, your point fits absolutely perfectly into a pure flat tax position. Why do you say that you are opposed to a flat tax?


you prove my point. not paying the top rate doesnt mean paying 0%
and being given a break doesnt mean eliminating that tax

 
Feb 7, 2000
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my question is why is the estate tax special? why does this class of americans who pay 0% estate tax get taxed in other areas? if not paying estate tax helps them out so much then why not just not tax them at all
 

jjm

Golden Member
Oct 9, 1999
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stalin - No tax is being eliminated. You are postulating pure fiction. The fact is that no one with an estate under $675,000 currently pays any estate tax or capital gains tax at all. The changes are actually adding taxes where there are currently none.

I never once advocated zero taxes anywhere. I advocate keeping the current estate tax system and extending its exclusion to a wider amount.

As for the income tax, there is a zero bracket already. And I would advocate widening it a bit. But I am fine with the prorgressivity of the current system. As I said, it helps people achieve their dream and then requires them to pay more once they have already achieved a high level. It delays higher taxation until one is better able to afford it; it does not exempt taxation. That sounds very fair to me.
 
Feb 7, 2000
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stalin - No tax is being eliminated. You are postulating pure fiction. The fact is that no one with an estate under $675,000 currently pays any estate tax or capital gains tax at all. The changes are actually adding taxes where there are currently none.

I never once advocated zero taxes anywhere.
]

when did i ever say a tax was eliminated??

you keep dodging the question though. why is a 0% estate tax fair when these same people dont pay 0% income tax. the people that pay 0% income tax are NOT the same people that have estates in the range of 675k

the fact remains, under the current scheme people that arent &quot;wealthy&quot; do get a break as far a income tax, however they are still required to pay SOMETING. however, when it comes to estate tax people that arent &quot;wealthy&quot; get a full exemption, and that is what i think is unfair about the current estate tax scheme.
 

jjm

Golden Member
Oct 9, 1999
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stalin - Are you perpetually confused? On the one hand, you imply that $500,000 is pretty wealthy, but later you suggest it is only modest. You keep changing your story.

I advocate a graduated estate tax plan mostly to avoid the need for small businesses to have to sell assets to pay taxes on relatively modest estates. I think $3 million is the limit of modest where small business values are concerned. I also would like to see some comfortable level of wealth passed along to enable people to achieve higher wealth levels. After that, people should pay proportionally more, whether it is estate or income taxes. Most of what I just said is a repeat of previous points. If you will not bother reading, then there really is no point in discussion with you. Or maybe that's just the world your mind lives in.

You advocate flat tax justifications, but claim to be opposed to a flat tax. You think everyone should pay, but fail to square this position with the notion of enabling people to achieve wealth first without too much encumbrance along the way. You modify positions to suit whatever argument pops into your head at the time you type. You label people and bash their positions just because you seem to like to do that. I think that sums up how shallow you are.

Enjoy all the posting in this thread you like. I find I am just repeating positions because you fail to have the ability to comprehend. If others respond with more interesting and substantive points, I will respond to them. But even a casual reader will see that I have answered all your questions while you have avoided a whole host of mine. I am finished tolerating your lack of comprehension.
 

shifrbv

Senior member
Feb 21, 2000
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jjm - I thought that &quot;the little guy&quot; would have to pay on these gains.

But according to this, the $1.3 million exclusion is still allowed:

&quot;After repeal, a modified carryover basis for property acquired from a decedent will be implemented. Currently, capital gains taxes are only assessed on the appreciation from fair market value when an asset is inherited (when the owner of the estate dies) until it is sold. (This step-up in basis works because the estate pays a tax on its holdings. However, with repeal of the estate tax, appreciated property would remain untaxed until the heir sells it. At that point the tax would only be on the step-up in basis.) The change to carryover basis will require taxation on the appreciation from the time the asset was acquired by the decedent to sale by an heir. In other words, capital gains taxes will be charged on the appreciation in value of an asset from its original worth rather than its worth at the time of death, requiring complicated record keeping and reporting requirements. (A change to carryover basis was enacted once before, but dropped before it was implemented because of the difficulty in executing it.) However, only assets over a $1.3 million exemption (with an additional $3 million exemption for a surviving spouse) will be taxed in this new way. The executor of the estate is allowed to determine which assets will be included in the exemption amount. &quot;
 

jjm

Golden Member
Oct 9, 1999
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shifrbv - That's great! I did not see it listed in the source I had. What's your source?

(Don't tell stalin. He stated clearly that this sort of exclusion is unfair. Shhhh.)
 

shifrbv

Senior member
Feb 21, 2000
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jjm - You might not like the biased source, but I think they did a pretty good job of outlining the current bill:

Estate Tax Analysis

Seeing as to how it this will reduce state revenues by 2005, I think this will hit some areas pretty hard. Already with the economic slowdown and decrease in sales tax collected last quarter, my state is looking for ways to increase the taxes. I saw on CNN where other states were already running deficits. This isn't going to help them any.
 
Feb 7, 2000
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You advocate flat tax justifications, but claim to be opposed to a flat tax. You think everyone should pay, but fail to square this position with the notion of enabling people to achieve wealth first without too much encumbrance along the way. You modify positions to suit whatever argument pops into your head at the time you type. You label people and bash their positions just because you seem to like to do that. I think that sums up how shallow you are.

i have never advocated for a flat tax
all i have ever said i i think the current situation is unfair cause everybody BUT the wealthy pay taxes on their estates. why should only the wealthy pay?

you on the other hand contradict yourself. you say that if the non wealthy have to pay estate tax then it &quot;takes more out of those who are trying to climb the wealth ladder&quot;

then i ask you about income tax, and i ask you why the non wealthy have to pay income tax. i mean if it is just gonna prevent them from &quot;trying to climb the wealth ladder&quot; then surely your opposed to taxing the middle class (or just the non wealthy in general)

but you disagree w/ that and thats where you contradict yourself. why does the non wealthy have to contribute in the form of income tax yet they dont when it comes to estate tax? how come only the wealthy have to pay estate taxes? evidently you think its ok for the wealthy to be penalized because theyre wealthy, i do not.

I certainly think the change is fundamentally unfair. Less than 75,000 estates paid any estate tax at all in 1999. With this change, eventually, no estates will pay any estate tax. And under the old law, no one had to pay capital gains taxes. With the new law, millions of people receiving appreciated assets every year will pay capital gains taxes when the assets are sold. The burden is shifted to the receiver of the assets and they will pay in far greater numbers. To you that's fair. To me that means a lot of people of modest means just saw the value of their future inheritance decline. But the wealthy just saw the value of their future inheritance rise considerably.

oh god listen to yourself. your complaining cause these &quot;modest&quot; people arent gonna pay 0% anymore! why is it fair to tax the wealthy but not the &quot;modest&quot; surely both the modest and the wealthy have an obligation, and 0% implies no obligation at all

Don't fall for that crap about &quot;death tax.&quot;

you cant deny that it is in fact a death tax. people are taxed when they first come upon their assests and AGAIN when they die. and thats not a death tax?? whatever

On the one hand, you imply that $500,000 is pretty wealthy, but later you suggest it is only modest. You keep changing your story.

doesnt matter if its modest or wealthy, both have an obligation to pay taxes, not just the wealthy
 

AndrewR

Lifer
Oct 9, 1999
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Since my name was dragged in here, I'll respond on that point. The issue of the estate tax can be GENERALLY couched in terms of liberal vs. conservative, just as one can GENERALLY refer to Democrats as liberal and Republicans as conservative. Rarely is anything black and white, but denying that trends exist is equally as misguided as saying that absolutes are always present.

That said, it has generally been a conservative tenet, read: Republican, that the estate tax is a bad method of taxation. Conversely, it has been a liberal tenet, read: Democrat, that it is a good way to eliminate financial dynasties and to replenish government coffers.

It is unwise to dismiss what stalinator says because there is a great deal of truth in it. Why should we dictate to a dying person how to spend his or her money? The government has never forced charitable contributions, unless you consider government subsidy programs like food stamps to fall under that umbrella. The money that was earned during the person's lifetime has already been taxed -- income, capital gains, etc. Then, we slap a FURTHER tax on it because...why? We envy someone who has worked hard to amass personal wealth (for one broad category, yes there are others)? I don't follow the logic, or more likely, the lack thereof.

We also have the issue of farmers and small business owners. Here's a quote about someone the estate tax defenders use as an example of why the tax isn't so bad:
Judy Wicks, owner of the White Dog Cafe in Philadelphia, does not see the estate tax as a threat to her plans to pass on her business to her daughter. If Wicks died today, her business would be worth about $2 million. She says her daughter could take advantage of a special $1.3 million exemption that is available to small businesses and family farms, and then make payments of $18,000 a year for 14 years to pay the $245,000 estate tax bill. Linky

$18,000 per year for 14 years?? That's a sizeable chunk of change, especially if the cafe fell on hard times or the economy were in depression. And that's a GOOD example? Hmmmm. Interestingly enough, a normally liberal organization, the American Bar Association, supports repeal of the estate tax. That one surprised me.

Also, it appears that the repeal of the entire stepped up basis was put in place to placate less conservative legislators so we can blame them for altering the nature of Bush's proposal. I have had a difficult time actually finding the text of the law, but I am late for dinner so I'll look later. I also found mention of the increase in the exemption that shifrbv mentions.

Here is a complete description of the tax, which I have yet to read in its entirety.

One of the reasons for the estate tax, and for the elimination of the stepped up basis incidentally, is the argument that much of the value of an estate is never taxed because it is appreciated gain from investment essentially. So, the estate tax acts as the capital gains or income tax on that property when it is transferred. That sounds wonderful, but in the same breath, they quote a study which says that, at most, 56% of estates over $10 million are comprised of untaxed gains. So, if that's the case, then the tax effectively taxes that portion of the estate AT 100%!! (with the 55% tax rate for large estates, leaving the already taxed portion untaxed, the remaining ~45%) Now, THAT'S logic. Check this page for that little tag of brilliance.

Gee, it's not as simplistic as it looks at first blush, now is it?
 

jjm

Golden Member
Oct 9, 1999
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Wow, AndrewR, that article provides perfect support for my assertions. Thanks.

&quot;Conclusion

Repeal of the estate tax would provide massive benefits solely to the wealthiest and highest-income
taxpayers in the country. There would be a high cost for providing these benefits; the federal revenue
loss would be about $60 billion a year when the repeal is fully in effect a decade from now, while
states would lose another approximately $9 billion in estate tax revenues.

Few family farms and businesses are subject to the estate tax. To the extent that policymakers feel
the estate tax unduly burdens small, family-owned businesses and farms, however, far more efficient
and less costly solutions are available to alleviate those problems.

The estate tax is an integral part of our tax system; if it is repealed, large amounts of income ? the
unrealized capital gains income of very high-income taxpayers ? would never be taxed at all.
Moreover, repealing the estate and gift taxes would open up new loopholes that would encourage
many new schemes for income tax avoidance. Finally, research suggests that repeal of the estate
tax would cause a significant decline in charitable giving.

In short, there is little reason to repeal the estate tax, and many reasons to retain it.&quot;


stalin - You are proving that you still can't read.

I said, &quot;You advocate flat tax justifications, but claim to be opposed to a flat tax.&quot;

You said, &quot;i have never advocated for a flat tax&quot;

As is clear to all, I stated plainly that your justifications (read: reasons for your position; I see you need someone to explain what the words mean) are all the same as those who advocate the flat tax. I agree that you never said you are in favor of a flat tax. It's just plain weird that you take the same positions as those who favor a flat tax and then claim to be opposed to the flat tax.

Perhaps you should describe the income tax system you favor; then we can all judge how like or unlike a flat tax it is.

This little example of how you are unable to grasp the meaning of the words explains well how you keep misreading my positions. There is not one conflicting point. However, you continue to reveal an inability to understand the language correctly.

I'll even throw this one in as well.

&quot;you on the other hand contradict yourself. you say that if the non wealthy have to pay estate tax then it 'takes
more out of those who are trying to climb the wealth ladder'&quot;

It's a moot point now, given the apparent exclusion, but there is nothing contradictory at all in my example. If a person has $100,000 in wealth and inherits $100,000, but gets to keep only $80,000 of that inheritance due to capital gains taxes paid, last time I did the math, that makes his/her net worth $180,000. With the exclusion, no tax is paid and his/her net worth is $200,000. That means he/she has more money to put to work. If that money grows to large amounts over many years, then a tax comes due (either capital gains or estate), and it would be on an estate that can better afford to pay. I am beginning to suspect that you not only have a tough time reading, you really can't do math. Where exactly is the contradiction?

By the way, you must be furious about the carve out inserted for the first few millions in gains. That actually makes the tax progressive. Thanks for the link shifrbv.
 
Feb 7, 2000
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the justifications for a flat tax are that each has the same proportionate obligation. i have never said this to be true. on the other hand ive stated that i have no problem w/ the rich paying more taxes. BUT i do think that its unfair that the wealthy are the only ones that pay estate taxes. if you think that i use the same justifications that people use for flat tax then your mistaken.

Wow, AndrewR, that article provides perfect support for my assertions. Thanks.


well if you consider no support as support then your right

this issue isnt that the wealthy benefit the most when the death tax is replealed (DUH theyre the only ones paying anything) its weather or not the tax is fair in the first place. do you not comprehend this??

you ARE contradicting yourself. when does taxation &quot;take more[money] out of those who are trying to climb the wealth ladder&quot; and when does it not? you seem to think that ANY estate tax is unfair to the non wealthy yet taxation in other forms is ok. thats a contradiction. why would issuing an estate tax on the non wealthy be unfair? why are the wealthy the only ones that bare this responsiblity?
 
Feb 7, 2000
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Perhaps you should describe the income tax system you favor; then we can all judge how like or unlike a flat tax it is.

the current system is fine. everybody pays except the a$$ poor

but the estate tax only applies to the rich, and that is unfair
 
Feb 7, 2000
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I am beginning to suspect that you not only have a tough time reading, you really can't do math. Where exactly is the contradiction?

estate tax rate for non wealthy =0%

income tax rate for the non wealthy >0%

estate tax rate for the wealthy >0%

income tax rate for the wealthy >0%

the reasoning you give for supporting a 0% estate tax rate could just as easily apply to any form of taxation. so why do you support >0% income tax rate? how does an income tax rate of >0% not hurt people trying to &quot;climb the ladder&quot; but an estate tax does? thats the contradiction.
 

jjm

Golden Member
Oct 9, 1999
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Well, stalin, I broke my promise and actually responded to your drivel again. I stand by my math. I really think you somehow twist this stuff in a way that only you can understand. Without the exclusion that shifrbv found, my point was well founded. People of modest means would have begun paying a tax where none had been paid before. Who cares what type of tax it is? It's still dollars being siphoned away that would assist them to strive for higher levels of wealth. But, as I said, it's a moot point. It appears that progessivity will be part of the plan after all.

I notice that you still have not explained what you view as an acceptable income tax plan. When you suggested that the estate tax plan was okay as long as it charged everyone the same rate (a flat tax), I assume that was an acceptable plan to you. Now that you know it is progressive, I assume the plan is no longer acceptable to you, right?

On the one hand, you appear to indicate that you are fine with everyone paying the same percentage on the estate (or capital gains) tax. On the other, you appear to indicate that the wealthy should pay more income tax. By that I assume you also mean a higher rate. As I have said at least four times in this thread, I favor a progessive tax system. It gives a break to people as their wealth and incomes grow in exchange for the obligation to pay a greater share once high income and wealth are achieved. Pretty simple really. Your positions clearly contradict each other. And the plan you favor is?
 
Feb 7, 2000
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I notice that you still have not explained what you view as an acceptable income tax plan.

ill just cut and paste from my earlier replies
&quot;the current system is fine. everybody pays except the a$$ poor&quot;

When you suggested that the estate tax plan was okay as long as it charged everyone the same rate (a flat tax)

i never said that

On the one hand, you appear to indicate that you are fine with everyone paying the same percentage on the estate (or capital gains) tax.

i never said that either

Who cares what type of tax it is?

obviously you do if you think the modest have an obligation to pay income tax but not estate tax but think the wealthy have an obligation to pay both
 

jjm

Golden Member
Oct 9, 1999
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Now you are just resorting to selectively using quotes out of context, making no attempt to respond to the full pont. It is obvious that your only interest is in playing games. Have fun.