The GOP's blatant condencending views of the American Public

[Genx87]

This paper has documented the extensive costs associated with the federal estate tax. The detrimental effects of the estate tax are grossly disproportionate to the modest amount federal revenue it raises (if it raises any net revenue at all). Estate taxes result in a large amount of wasted economic activity. Over its lifetime, the presence of the estate tax has cost the economy roughly one-half a trillion dollars in capital stock. Moreover, the estate tax destabilizes family businesses at one of their most vulnerable points, the succession from one generation to the next. The enormous liquidity demands of the estate tax have contributed to the break up of thousands of small businesses as well as the destruction of environmentally sensitive land. In generating these outcomes, the estate tax has violated the basic principles of a good tax system ? simplicity, fairness and efficiency.
If the estate tax generated sufficiently large benefits, then an argument could be made to justify its existence. However, all the evidence indicates that the estate tax has no redeeming qualities. There is no theoretical or empirical basis to suggest that the estate tax promotes fairness or reduces inequality. In addition, research indicates that the deduction for charitable bequests stimulates little or no additional giving. Even the $23 billion in revenue it raises is illusory, since estate tax avoidance activities likely generate equally large revenue losses under the income tax.

The estate tax is an unfortunate feature of the current federal tax system. The estate tax's punitive tax rates are not only the highest of all federal taxes (reaching nearly 80 percent), but are imposed at the most inappropriate of times ? the death of a loved one. As if mourning such a loss were not enough, the federal government worsens the pain by seeking to confiscate upwards of one-half of all the decedent's accomplishments and successes.

This final injurious grievance simply strengthens the conclusion that the estate tax generates costs to taxpayers, the economy and the environment that far exceed any potential benefits that it might arguably produce. The balance of evidence reviewed here suggests that this nation's forefathers followed the correct policy: in the absence of a national emergency, there is no compelling reason to warrant the permanent imposition of the estate tax. Death and taxes may indeed be inevitable, but these twin hardships need not always converge with consequences as burdensome and destructive as those of the estate tax.



http://www.house.gov/jec/fiscal/tx-grwth/estattax/estattax.htm

 

[RightIsWrong]

Originally posted by: Genx87

Originally posted by: RightIsWrong

Originally posted by: Engineer
Curious: How would you supporters of removing this tax fund the extra $290 BILLION dollars that it is going to add to the deficit over the next 10 years? Continue to borrow more and more while driving rates up and the economy down?

/waits

First off, it is $290B the FIRST year. It will equate to over a $1T over the next decade.

* The Joint Committee on Taxation estimates that extending repeal beyond 2010 would reduce revenues by $290 billion through 2015, including $72 billion in 2015 alone.

* But the Joint Tax Committee?s estimate essentially captures only the cost of four additional years of estate tax repeal. The revenues losses associated with 10 more years of repeal ? for the period from fiscal year 2012 through fiscal year 2021 ? are much higher, about $745 billion.

* When the associated $225 billion in higher interest payments on the debt are taken into account, the total cost of repealing the estate tax for a decade would be nearly $1 trillion.

Secondly, for Whoz (and all of the other supporters of the repeal), please explain how the GOP has been able to trick you with symantecs into believing that this is a "Death Tax"? The dead person isn't getting taxed and neither is his estate. Those that are inheriting a total over $2M in cash, merchandise or property are being taxed however and they are very much alive.

You seem like a pretty smart person. How did they dupe you so easily?

You need to reread that, it is 290 over the next decade, not in 1 year. They are expecting an avg of 29 billion a year in lost taxes if it is repealed. When you think about the amount of tax revenues collected by the federal govt, 29 billion dollars a year is about 1%.

If they cut the pork they could easily cough up multiples of that.

Uh you thinking this isnt a death tax have been duped. When are the assets taxed? Upon death, thus a death tax.

If we are going to piss and moan about it, lets at least reduce it into its appropriate columns. Assets such as stocks, bonds and property held for more than 1 year should be taxed at the long term capital gains rate. Anything under at the short term rate. Any outright cash in hand should be taxed at the federal income rate.

Taxing something at 50% outright is ridiculously high.

I suggest reading my two links, they are very interesting articles. After reading them I question why we even bother. It is such a small amount of taxes collected and it puts a burden on people unnecessarily, not to mention appears to really hurt small business and farms.

The money, belongings and properties are not taxed upon the individual dying. You are incorrect. They are taxed upon someone else taking possession of them. A HUGE difference.

As for your links, did you take the time to actually read them? The first from the CBO, check out Table 3 on page 9. There were only 52k estates that owed ANY kind of estate tax. Of those, the average was $469k on an average value estate of over $2.5M. Hardly putting the kids or widow out on the street, I'd say. You may also want to take a look at page 13 and the conclusions drawn there about how drastically reduced even those numbers would have been if they Repubs wouldn't have been so greedy and gone for the fences instead of just accepting the Dems proposal of raising the minimum amount of the estate worth to be taxed.

And the 2nd is from a Rep. congressman that is a huge supporter of the repeal. Not really the most unbiased source on the subject. And the Clinton official that he mentions as claiming that it "really isn't worth collecting" wrote that in a book in 1974. Do you really think that times are exactly the same as in 1974 today or even in 1998 when that report was written? C'mon, you are usually pretty honest in your facts, but this one either slipped by your or you were intentionally being dishonest when posting it.

 

[Genx87]

So do you disagree with the assesment of the house report or the cbo report?

And why?

And even if he did say that in 1974 do you think anything has changed since the raising of the cap that would drastically change the opinion?

 

[RightIsWrong]

Originally posted by: Genx87
So do you disagree with the assesment of the house report or the cbo report?

And why?

And even if he did say that in 1974 do you think anything has changed since the raising of the cap that would drastically change the opinion?

Yes, I adamantly disagree. Here is a laymen's term rebuking of the talking points that you have touted and the Gentleman from New Jersey tried to make that you took as gospel. I will post one that you seem to have grasped on stronger than others:

Studies find that all of the various public and private costs associated with estate tax compliance (http://www.cbpp.org/6-14-05tax.htm) ? including the IRS?s costs of administering the tax and the cost taxpayers bear in terms of estate planning and administering an estate when a person dies ? are about 7 percent of estate tax revenues. These costs are consistent with the compliance costs for other taxes. For instance, administrative and compliance costs represent about 14.5 percent of revenue for the individual and corporate income taxes, 3-5 percent for value added taxes, and 2-5 percent for the sales tax.

Furthermore, the estate tax compliance burden will disappear for a growing number of families each year under current law, as the exemption level rises and fewer estates are subject to the estate tax.

Part of the confusion around the cost of estate tax compliance is that some estimates incorrectly include the cost of activities that would be necessary even in the absence of an estate tax ? hiring estate executors and trustees, drafting provisions and documents for the disposition of property, and allocating bequests among family, for example. These activities account for about half of all costs sometimes associated with estate planning.

Are you claiming that the costs of estate planning will somehow, miraculously disappear if there is not an estate tax?

As for your second question about the Clinton appointee's 1974 remarks.....I think that this about sums up my rebuttal of whether I think that it is still relevant 30+ years later:

The claim that the cost of complying with estate tax laws is roughly the same magnitude as the revenue collected is often linked to a 1992 paper by the economists Henry Aaron and Alicia Munnell.[5] They stated that compliance costs represented a ?sizable fraction? of total revenue. Opponents of the estate tax have frequently exaggerated the implications of these findings, which reflected rough estimates and were not based on the type of surveys that have informed more recent analyses. Further, since the estimates were first made, estate tax revenue has grown more quickly than estate planning costs, rendering the estimates seriously out of date and of limited value for informing the current estate tax debate.[6]

 

[theeedude]

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

 

[Red Dawn]

Originally posted by: senseamp

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

Why?

 

[theeedude]

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

Why?

Because the government shouldn't put working people at a disadvantage over people who inherit their wealth. If a working person has to pay taxes on their income to accumulate wealth, someone getting money or property as inheritance should also have to pay that tax.

 

[Red Dawn]

Originally posted by: senseamp

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

Why?

Because the government shouldn't put working people at a disadvantage over people who inherit their wealth. If a working person has to pay taxes on their income to accumulate wealth, someone getting money or property as inheritance should also have to pay that tax.

But the inheritance was already taxed when it was made.

 

[theeedude]

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

Why?

Because the government shouldn't put working people at a disadvantage over people who inherit their wealth. If a working person has to pay taxes on their income to accumulate wealth, someone getting money or property as inheritance should also have to pay that tax.

But the inheritance was already taxed when it was made.

So what? When someone hires me for a job, they already paid taxes on the money they are paying me, but that doesn't make it tax exempt for me. Income from inheritance is still income. What's outrageous is that these people are offered millions tax free, but they are whining about paying taxes on the remainder. Your average joe is working his butt off all his life and gets taxes taken out of his income all along the way, while these people get 3.5M tax free and are complaining.

 

[outriding]

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

Why?

Because the government shouldn't put working people at a disadvantage over people who inherit their wealth. If a working person has to pay taxes on their income to accumulate wealth, someone getting money or property as inheritance should also have to pay that tax.

But the inheritance was already taxed when it was made.

Lets say I am uber wealthy and pay taxes on the money that I earned.

That money goes towards things like roads, schools, securing my freedom by fighting wars, and etc.

I have a couple of kids who are totaly useless.

I die and give my kids tens of millions of dollars tax free. My kids who are useless do not work any more. How are my kids going to pay for services from the goverement.. eg roads, schools, securing their freedom by fighting wars, and etc?

I look at this as entitlement. .. "My daddy was rich so I should not have to pay any taxes" says the rich kid.

 

[Red Dawn]

Originally posted by: outriding

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Red Dawn

Originally posted by: senseamp

Originally posted by: Whoozyerdaddy

Originally posted by: RightIsWrong
The dead person has no belondings anymore. That is the point. It might sound like symantecs, but it isn't. The people who are now in possesion of those belongings, either willfully or granted by an executor, are the people that are being taxed.

You can look at it any way you want. The fact remains that the property in the estate wasn't eligible for taxation until the person died.

The dead person can always give that property to a tax exempt organization, if he is so concerned about it being taxed when he dies. The point is, people doing nothing getting inheritance should be taxed at least at the rate someone working his tail off to make ends meet is taxed at, not less.

Why?

Because the government shouldn't put working people at a disadvantage over people who inherit their wealth. If a working person has to pay taxes on their income to accumulate wealth, someone getting money or property as inheritance should also have to pay that tax.

But the inheritance was already taxed when it was made.

Lets say I am uber wealthy and pay taxes on the money that I earned.

That money goes towards things like roads, schools, securing my freedom by fighting wars, and etc.

I have a couple of kids who are totaly useless.

I die and give my kids tens of millions of dollars tax free. My kids who are useless do not work any more. How are my kids going to pay for services from the goverement.. eg roads, schools, securing their freedom by fighting wars, and etc?

So they should have to pay tax on something that already was taxed because they were useless?

How about those who are not rich but inherit their parents modest home. Should they have to pay tax on it or even sell it so they can afford to pay the taxes on it?

 

[TGS]

Originally posted by: Red Dawn
But the inheritance was already taxed when it was made.

When property changes hands, it is taxed. We have the exemptions for gifts, but there is always an upper limit before penalties are applied. Trying to make this tax work across the board will disproportionaly effected the poor and middle class. If our entitlement poster boy wants to use an example of Bill Gates paying $1 Billion on $10 Billion, there is a great many things he could setup to lower his tax burden when he is giving his money to his inheritors. While the person giving away $100 to his inheritors, is basically giving nothing away. All financial transactions should be taxed, but we should also try to protect those least capable to afford paying taxes on inheritance.

The real solution would be to severly cut back government spending, and then repeal taxes. It would be foolish to do otherwise, as nothing but attacking the pocketbook seems to have any affect on politics.

If people are so concerned about being hit with the estate tax, they should give up property until they are under the limit. They are still able to give away millions freely. Though I suppose that would hurt the true entitlement society from holding on to their status quo.

 

[outriding]

Originally posted by: Red Dawn

So they should have to pay tax on something that already was taxed because they were useless?

Useless in the sense they are not working thus not paying taxes. If they are not paying taxes how are they paying for the roads they travel on and etc?

How about those who are not rich but inherit their parents modest home. Should they have to pay tax on it or even sell it so they can afford to pay the taxes on it?

Yep everybody has to pay tax, but maybe say something like under 100k tax free etc..

 

[theeedude]

The outrageous thing is that these people are complaining about having to pay taxes on inheritance income in excess of 3.5Million dollars. They are getting 3.5M tax free doing absolutely nothing, while a person working 3 jobs making 35K has to pay taxes, and they have the nerve to complain about paying taxes on the remainder in excess of 3.5M. And Republicans top priority is making sure they don't even have to pay taxes on that.

 

[Genx87]

Originally posted by: outriding

Originally posted by: Red Dawn

So they should have to pay tax on something that already was taxed because they were useless?

Useless in the sense they are not working thus not paying taxes. If they are not paying taxes how are they paying for the roads they travel on and etc?

How about those who are not rich but inherit their parents modest home. Should they have to pay tax on it or even sell it so they can afford to pay the taxes on it?

Yep everybody has to pay tax, but maybe say something like under 100k tax free etc..

Roads are paid with through gas taxes
Schools are paid for by property taxes
And I am sure the useless kids would spend a lot of money at the mall so they get nailed with sales tax.
Lets not forget they probably like big cars so they get nailed with a luxury tax.
Oh, and I am sure they have cell phones and high speed internet that gets nailed with useage taxes.
And of course there is most likely some kind of income coming from interest or appreciation so they pay capital gains taxes.

Good old United Tax of America for you.

 

[Genx87]

Originally posted by: senseamp
The outrageous thing is that these people are complaining about having to pay taxes on inheritance income in excess of 3.5Million dollars. They are getting 3.5M tax free doing absolutely nothing, while a person working 3 jobs making 35K has to pay taxes, and they have the nerve to complain about paying taxes on the remainder in excess of 3.5M. And Republicans top priority is making sure they don't even have to pay taxes on that.

Actually I have said I dont have a problem paying capital gains on property, stocks, and bonds when I sell it or income tax on cash in hand.

The whole thing is rather ridiculous when you look at it. We are talking about a tax that is thrown to the poor and middle class as a resditribution tax when it pulls in ~1% of federal tax revenues. One of my links makes a good point that the raise in income tax revenue from a single year of strong economic growth outpaced the estate tax revenue over its entire lifetime.

 

[outriding]

Originally posted by: Genx87

Originally posted by: outriding

Originally posted by: Red Dawn

So they should have to pay tax on something that already was taxed because they were useless?

Useless in the sense they are not working thus not paying taxes. If they are not paying taxes how are they paying for the roads they travel on and etc?

How about those who are not rich but inherit their parents modest home. Should they have to pay tax on it or even sell it so they can afford to pay the taxes on it?

Yep everybody has to pay tax, but maybe say something like under 100k tax free etc..

Roads are paid with through gas taxes
Schools are paid for by property taxes
And I am sure the useless kids would spend a lot of money at the mall so they get nailed with sales tax.
Lets not forget they probably like big cars so they get nailed with a luxury tax.
Oh, and I am sure they have cell phones and high speed internet that gets nailed with useage taxes.
And of course there is most likely some kind of income coming from interest or appreciation so they pay capital gains taxes.

Good old United Tax of America for you.

Fantastic you have pointed things out at the State level only!

How about the military?

Who is going to pay for that?

 

[zendari]

Originally posted by: Engineer

Originally posted by: zendari

Originally posted by: Engineer
So you support raising taxes on everyone just to satisfy your worship of the rich?

I support fair taxation of all Americans.

It seems like you nicely exempting everyone but the rich from these taxes is worshipping the poor.

If Bill gates Jr can pay $1 billion on $10 billion, Joe Schmo can pay $10 on $100.

I would rather worship the poor/middle class than the rich. I have no sympathy for RICH lawmakers spending our country into the ground and then funding it with money from the RICH.

How would you fund the extra deficit from this? Offer something real instead of a red herring this time. Don't tell me that you don't care about the deficit as you mention the future liabilities from SS/Medicare all the time so BS before you call it.

/waits again.

I'm not one of the major proponents of eliminating the tax.

 

[Vic]

Originally posted by: dullard

Originally posted by: Vic
Family farms and family businesses were not rare occurances.

No matter how you twist it, only ~2% of people ever paid it. That is rare. Of that 2%, most were wealthy. Yes, some people were taxed by it. I fully admit that. But that isn't the point of contention here. Today the bottom tier of family farms have a net worth of ~$575K. The top tier of family farms have a new worth of ~$1.5M. Both are still far under the current exemption level. Only 4% of small businesses have a net worth over $3.5M. Thus it is still a rare occurance when a small business is taxed in this way.

If you do fully own a small business worth more than $3.5M, would you consider yourself middle class?

That's a loaded question, as asset value has almost nothing to do with revenue and income. You should know that. And that's the whole point -- that the estate tax has, historically, hit unfairly hard on those families that are asset-rich but cash-poor. I fail to see how it is an insult to the American public to try to fix that. But hey, I get it, according to the New Left, adjusting progressive tax brackets for inflation are somehow a tax cut...

Beware the politics of spite... they WILL bite you in the ass.

 

[Genx87]

Originally posted by: outriding

Originally posted by: Genx87

Originally posted by: outriding

Originally posted by: Red Dawn

So they should have to pay tax on something that already was taxed because they were useless?

Useless in the sense they are not working thus not paying taxes. If they are not paying taxes how are they paying for the roads they travel on and etc?

How about those who are not rich but inherit their parents modest home. Should they have to pay tax on it or even sell it so they can afford to pay the taxes on it?

Yep everybody has to pay tax, but maybe say something like under 100k tax free etc..

Roads are paid with through gas taxes
Schools are paid for by property taxes
And I am sure the useless kids would spend a lot of money at the mall so they get nailed with sales tax.
Lets not forget they probably like big cars so they get nailed with a luxury tax.
Oh, and I am sure they have cell phones and high speed internet that gets nailed with useage taxes.
And of course there is most likely some kind of income coming from interest or appreciation so they pay capital gains taxes.

Good old United Tax of America for you.

Fantastic you have pointed things out at the State level only!

How about the military?

Who is going to pay for that?

Capital gains goes to the state?
Color me surprised.
And there are federal gas taxes.
There are also federal fee's on cell phone and internet access.

Who is going to pay for the military? Whoever pays the federal govt through taxes.
Which appears to be the useless rich as well in your example.

 

[theeedude]

Originally posted by: Genx87

Originally posted by: senseamp
The outrageous thing is that these people are complaining about having to pay taxes on inheritance income in excess of 3.5Million dollars. They are getting 3.5M tax free doing absolutely nothing, while a person working 3 jobs making 35K has to pay taxes, and they have the nerve to complain about paying taxes on the remainder in excess of 3.5M. And Republicans top priority is making sure they don't even have to pay taxes on that.

Actually I have said I dont have a problem paying capital gains on property, stocks, and bonds when I sell it or income tax on cash in hand.

The whole thing is rather ridiculous when you look at it. We are talking about a tax that is thrown to the poor and middle class as a resditribution tax when it pulls in ~1% of federal tax revenues. One of my links makes a good point that the raise in income tax revenue from a single year of strong economic growth outpaced the estate tax revenue over its entire lifetime.

Good. Estate taxes are overblown anyways. If you hold assets over a lifetime and you don't make enough of a return to pay some tax that after the deductions averages out to a 20% effective rate, than you really need to let someone else manage your assets. Put that money in the bank at 4% and you'll make 20% return back in 5 years.

 

[Vic]

Originally posted by: senseamp
Good. Estate taxes are overblown anyways. If you hold assets over a lifetime and you don't make enough of a return to pay some tax that after the deductions averages out to a 20% effective rate, than you really need to let someone else manage your assets. Put that money in the bank at 4% and you'll make 20% return back in 5 years.

This is an unbelievably ignorant statement. Most assets are illiquid (i.e. real estate). That does not make them poor investments. Hey, but thanks for revealing to us that the limit of your financial knowledge is savings accounts!

 

[Whoozyerdaddy]

Originally posted by: senseamp
The outrageous thing is that these people are complaining about having to pay taxes on inheritance income in excess of 3.5Million dollars. They are getting 3.5M tax free doing absolutely nothing, while a person working 3 jobs making 35K has to pay taxes, and they have the nerve to complain about paying taxes on the remainder in excess of 3.5M. And Republicans top priority is making sure they don't even have to pay taxes on that.

Class warfare FTL.

And what person works three jobs to make $35k?

For some reason people seem to think that this money appears out of the blue like a winning lottery ticket. It doesn't. And often it's not liquid cash that is being taxed. It's an ownership stake in a business or some other non-liquid asset that gets taxed requiring the family of the deceased to sell the business, property or whatever to pay the tax.

If Bill Gates died and left you his fortune do you really think you're going to have $40bil cash in your checking acct? Nope. You'll have ownership in a few silver mines, lots of stock in MS and other assets. In terms of liquid cash, (he's certainly not hurting in this dept) his bank acct is a ghost of his real worth.

Scale that down to more realistic proportions. It doesn't take much for a small, family business to acquire more than $3.5 million in value. What then? In situations like that you have a lot of net worth but not necessarily the liquidity to pay the death tax.

So the family liquidates the business to pay the tax. What just happened? Well, the government took its last pound of flesh but more importantly it killed an entity that would have generated tax revenue for years to come. So who won? Well, nobody. The family loses its business/farm/whatever and the government loses a revenue stream in the quest for a one time pay off.

 

[Genx87]

Originally posted by: Vic

Originally posted by: dullard

Originally posted by: Vic
Family farms and family businesses were not rare occurances.

No matter how you twist it, only ~2% of people ever paid it. That is rare. Of that 2%, most were wealthy. Yes, some people were taxed by it. I fully admit that. But that isn't the point of contention here. Today the bottom tier of family farms have a net worth of ~$575K. The top tier of family farms have a new worth of ~$1.5M. Both are still far under the current exemption level. Only 4% of small businesses have a net worth over $3.5M. Thus it is still a rare occurance when a small business is taxed in this way.

If you do fully own a small business worth more than $3.5M, would you consider yourself middle class?

That's a loaded question, as asset value has almost nothing to do with revenue and income. You should know that. And that's the whole point -- that the estate tax has, historically, hit unfairly hard on those families that are asset-rich but cash-poor. I fail to see how it is an insult to the American public to try to fix that. But hey, I get it, according to the New Left, adjusting progressive tax brackets for inflation are somehow a tax cut...

Beware the politics of spite... they WILL bite you in the ass.

I do like somebody's post about people having 2.5 million in assets and "only" a 500K tax bill. Where the hell is somebody going to come up with a half million dollars in cash for a tax bill as ridiculous as that?

 

[theeedude]

Originally posted by: Vic

Originally posted by: senseamp
Good. Estate taxes are overblown anyways. If you hold assets over a lifetime and you don't make enough of a return to pay some tax that after the deductions averages out to a 20% effective rate, than you really need to let someone else manage your assets. Put that money in the bank at 4% and you'll make 20% return back in 5 years.

This is an unbelievably ignorant statement. Most assets are illiquid (i.e. real estate). That does not make them poor investments. Hey, but thanks for revealing to us that the limit of your financial knowledge is savings accounts!

My heart bleeds that someone can only get a $3.5M real estate tax free and has to pay taxes on the remainder. As someone who has to pay for every penny of my real estate with money I paid taxes on, I really feel their pain. :roll: