What's wrong with near 100% death tax?

[sothsegger]

Originally posted by: JD50
What is wrong with you people, why is it that you are so eager to tax any and everything that you possibly can? You even want to tax people once they are dead, this is ridiculous. Maybe we should work on cutting spending and worry less about raising taxes.

The death tax does not really tax the dead. It taxes the living, the recipients of that wealth.
The dead are unaffected.

 

[sothsegger]

Originally posted by: PrinceofWands
Now, you're telling me that that money shouldn't have been theirs to do with as they pleased? Didn't they earn that? You believe the government has a right to that money, to give it for corporate welfare, or illegal wars, or whatever else they choose to do? You honestly believe that???

or schools? or roads? or scholarships? or healthcare? or some other public good?

 

[PrinceofWands]

Originally posted by: santer

Originally posted by: PrinceofWands
Now, you're telling me that that money shouldn't have been theirs to do with as they pleased? Didn't they earn that? You believe the government has a right to that money, to give it for corporate welfare, or illegal wars, or whatever else they choose to do? You honestly believe that???

or schools? or roads? or scholarships? or healthcare? or some other public good?

Great, if they let you choose what it gets spent on. But they don't. So for every dollar you pay a part goes to things that shouldn't be funded. Even if they did I wouldn't back most government programs as I believe in an extremely limited government role, at least at the federal level. It also doesn't address the fact that the money was already taxed when it was income.

 

[OutHouse]

Originally posted by: dahunan

Originally posted by: Whoozyerdaddy

Originally posted by: dahunan
If I EARNED the money and we ARE NOT A SOCIALIST COUNTRY then why does the govt deserve any of it

Tell us why.. really WHY they "DESERVE" any of it?

Socialism has nothing to do with it.

In a civilized society taxes are necessary to provide for basic services. Police protection, fire protection, infrastructure maintenance, roads, schools, etc...

The degree to which these services are necessary and the amount it takes to provide them is what makes us fiscal libs/cons. But in the end, there is no denial that they are necessary and they need to be paid for. That is what taxes are for. But you know this already.

I know that.. but you already said it.. this is money that taxes have already been paid for.. so anymore taxation is double taxation

thats where the IRS gets you. sure the money has been taxed but YOU have not. as far as teh IRS is concerned your income just jumped and you gotta pay out the nose.

 

[sothsegger]

What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

 

[JD50]

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Yes

 

[spittledip]

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Sure. Sounds good to me. Congratulations!

 

[JD50]

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Correct me if I'm wrong, but you seem to think that a good portion of someones inheritance should go to the government, if so, how much of your inheritance will you be mailing in to the US Government?

 

[sothsegger]

Originally posted by: JD50

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Correct me if I'm wrong, but you seem to think that a good portion of someones inheritance should go to the government, if so, how much of your inheritance will you be mailing in to the US Government?

I have mixed feelings about all of this. I want to keep the money. But after reading all these anti-inheritance posts, I'm starting to feel guilty. Like I'm getting something I don't deserve.
What do you think?

 

[JD50]

Originally posted by: santer

Originally posted by: JD50

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Correct me if I'm wrong, but you seem to think that a good portion of someones inheritance should go to the government, if so, how much of your inheritance will you be mailing in to the US Government?

I have mixed feelings about all of this. I want to keep the money. But after reading all these anti-inheritance posts, I'm starting to feel guilty. Like I'm getting something I don't deserve.
What do you think?

If your parents got the money through legal means and they want to give it to you then of course you deserve it. Just as much as you deserve any other gifts that your parents have given you over the years.

 

[TheAdvocate]

Originally posted by: santer

Originally posted by: JD50

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Correct me if I'm wrong, but you seem to think that a good portion of someones inheritance should go to the government, if so, how much of your inheritance will you be mailing in to the US Government?

I have mixed feelings about all of this. I want to keep the money. But after reading all these anti-inheritance posts, I'm starting to feel guilty. Like I'm getting something I don't deserve.
What do you think?

From the IRS website:

Estate and Gift Taxes


If you give someone money or property during your life, you may be subject to federal gift tax. The money and property you own when you die (your estate) may be subject to federal estate tax. The purpose of this web page is to give you a general understanding of when these taxes apply and when they do not. It explains how much money or property you can give away during your lifetime or leave to your heirs at your death before any tax will be owed.

Most gifts are not subject to the gift tax and most estates are not subject to the estate tax. (Only about 2% of all estates are subject to the estate tax).

Generally, you do not need to file a gift tax return unless you give someone, other than your spouse, money or property worth more than the annual exclusion ($11,000 in 2002, 2003, 2004 and 2005; $12,000 beginning in 2006) for that year. Although a return may be required, no actual gift tax will become payable until the cumulative lifetime taxable gifts exceed the applicable exclusion amount. The donor is primarily responsible for the payment of the Gift Tax.

To reemphasize: Most relatively simple estates (cash, publicly traded securities, small amounts of other, easily valued assets and no special deductions or elections or jointly held property) with a total value under $1,000,000 and a date of death in 2002 or 2003 and $1,500,000 and a date of death in 2004 or 2005 do not require the filing of an estate tax return.

What they need to do is to raise the exclusion from $1.5m to at least $5m. I've heard talk of $3m, so its obviously on the board.

The only people who ever get nailed on estate taxes, especially once the exclusion gets raised, are the Paris Hiltons of the world. Now ask yourself, do you see the purpose it serves? There are ways around it anyway, and it doesn't nab her entire inheritance, just a chunk of what is left unprotected.

 

[sothsegger]

Originally posted by: TheAdvocate
What they need to do is to raise the exclusion from $1.5m to at least $5m. I've heard talk of $3m, so its obviously on the board.

What they need to do is tax the heir, not the estate. As it is, one person inheriting 10 million will pay less in taxes than 5 people inheriting 2 million.

I like the idea of taxing inheritance as income.

 

[JEDIYoda]

This whole thread just goes to show how absurd P&N is getting!!

 

[JD50]

Originally posted by: santer

Originally posted by: TheAdvocate
What they need to do is to raise the exclusion from $1.5m to at least $5m. I've heard talk of $3m, so its obviously on the board.

What they need to do is tax the heir, not the estate. As it is, one person inheriting 10 million will pay less in taxes than 5 people inheriting 2 million.

I like the idea of taxing inheritance as income.

Its not income.

But please, feel free to send in a third of your inheritance to the federal government. I hope that you are not pulling a "do as I say not as I do" act.

 

[spittledip]

Originally posted by: santer

Originally posted by: JD50

Originally posted by: santer
What about my situation? I'm 55 years old. I didn't amass nearly as much as they did; but neverhteless I'm considering an early retirement because my parents are going to leave me a few million within the next few rears. Should I be allowed to inherit all of it tax free?

Correct me if I'm wrong, but you seem to think that a good portion of someones inheritance should go to the government, if so, how much of your inheritance will you be mailing in to the US Government?

I have mixed feelings about all of this. I want to keep the money. But after reading all these anti-inheritance posts, I'm starting to feel guilty. Like I'm getting something I don't deserve.
What do you think?

Man, don't worry about what some self-righteous turds are spouting. If your parents leave you money, then it is yours. Just make sure you are wise with it. If you have a favorite charity, give some to that if you want. Don't let anyone tell you what is yours and what isn't yours. The govt will get its due, and that cut will hurt enough, so you won't be worrying about all this in the end anyway

 

[Ruptga]

Originally posted by: Balt
The money was already taxed when it was earned the first time.

Taxing it again just because someone died and wanted to pass it on to their family is lame.

:thumbsup: (bold added by me for emphasis)

 

[Ruptga]

Originally posted by: TheAdvocate
Ahh the reset switch for the game.

It's logical, from an idealistic perspective, but as a family man, there is no way I want my entire estate taken from my wife and children.

But at the same time, past a certain, debatable amount of money and assets, the capitalistic buildup of assets is just a game, because the dollars stop being meaningful. What's the difference between a $100 millionaire and $200 million? Not much, because the money stops being useful past a point, aside from just giving it away to one cause, which defeats the purpose of the retention argument. This is evidenced by guys like Bill Gates and Warren Buffett electing to give away most of their estate.

Personally, I favor the estate tax, but with a fairly high floor (say $10 million). Not having it above those levels just breeds aristocracy in America, which is a terrible thing from a pure capitalistic and social perspective. Just hand these folks a "you win at capitalism" plaque and divy up 50% of their assets above $10 mil. And speaking to the point about Gates and Buffett, it should only kick in if you don't devise it out yourself - I do think the person should have first say in where the money goes (charities, foundations, research, trusts, etc). Let's not forget that's the way the law works now. If you don't want it taken by the govt., there are plenty of instruments & good causes to avoid estate tax.

An argument for keeping it (at least a good portion of it) in the rich families is: rich people are rich because they know how to be rich; they know how to conserve and grow their money, why not let them keep multiplying it and tax their profits since you know they'll manage it better than the government?

Taking the money away from people in a lump sum isn't as good as skimming off parts of it, that way they keep enough money that they can reinvest it and make even more money for you to skim off!

 

[PhatoseAlpha]

Would someone please explain the exactly logic behind the "It's already been taxed" arguement?

I'm seeing it like this - I work for a corporation. The corporation sells stuff, and from that money, they pay me. However, it would seem that the money they're paying me with was also already taxed once, when the person who bought the widget earned it. Therefore, it would seem, my paycheck has already been taxed as well, and shouldn't be subject to double taxation. But the buyers of the widget's money had to come from somewhere as well, where it was likely already taxed, and so on.

Looking at the income tax, and then the sales tax, I have to wonder if it's the changing of hands that makes money subject to taxation, and therefore inheritance would be quite reasonable to tax as it changes hands.

Anyone care to clear this up?

 

[JD50]

Originally posted by: PhatoseAlpha
Would someone please explain the exactly logic behind the "It's already been taxed" arguement?

I'm seeing it like this - I work for a corporation. The corporation sells stuff, and from that money, they pay me. However, it would seem that the money they're paying me with was also already taxed once, when the person who bought the widget earned it. Therefore, it would seem, my paycheck has already been taxed as well, and shouldn't be subject to double taxation. But the buyers of the widget's money had to come from somewhere as well, where it was likely already taxed, and so on.

Looking at the income tax, and then the sales tax, I have to wonder if it's the changing of hands that makes money subject to taxation, and therefore inheritance would be quite reasonable to tax as it changes hands.

Anyone care to clear this up?

No, you are not taxed on money changing hands. If that were the case, charities would be taxed, your children would be taxed on the food that they eat that you give them, the clothes that they wear that you give them, etc...

The difference between gifts/inheritance money, especially when coming from a parent or spouse, and income or sales tax is pretty obvious to me.

 

[PhatoseAlpha]

Hm. Strange examples you picked, since they all have rather clear objections - nonprofits and neccessities.

At any rate, that doesn't help me much. If the difference is pretty obvious, can you please explain it then?

 

[spittledip]

Concerning inheritance money: If someone has earned the money(which they had to do in order to get the money), they have paid income tax. Also, they have to pay taxes on interest for the various accounts. So, it is money that has been taxed already. The money might change hands, but it is still the same pile of money.

 

[JD50]

Originally posted by: PhatoseAlpha
Hm. Strange examples you picked, since they all have rather clear objections - nonprofits and neccessities.

At any rate, that doesn't help me much. If the difference is pretty obvious, can you please explain it then?

Was that super nintendo that my parents got for my birthday when I was a kid a necessity? How do you decide what is a neccessity and what isnt?

Anyways, I'm not really sure that I can help you see the difference between income and gifts or inheritance. I'll try, so here goes. You are GIVEN a gift or inheritance, you have to work to get income.

 

[PhatoseAlpha]

The super nintendo wasn't your example.

At any rate, what a strange set of affairs you describe. Taxing something someone earned is acceptable, but taxing something they didn't is not. That sounds wrong to me.

Concerning inheritance money: If someone has earned the money(which they had to do in order to get the money), they have paid income tax. Also, they have to pay taxes on interest for the various accounts. So, it is money that has been taxed already. The money might change hands, but it is still the same pile of money.

Ah. Closer to what I want to know. Under what circumstances does it cease to be the same pile of money, and become a different one that would be taxable?

 

[spittledip]

Originally posted by: PhatoseAlpha
The super nintendo wasn't your example.

At any rate, what a strange set of affairs you describe. Taxing something someone earned is acceptable, but taxing something they didn't is not. That sounds wrong to me.

Concerning inheritance money: If someone has earned the money(which they had to do in order to get the money), they have paid income tax. Also, they have to pay taxes on interest for the various accounts. So, it is money that has been taxed already. The money might change hands, but it is still the same pile of money.

Ah. Closer to what I want to know. Under what circumstances does it cease to be the same pile of money, and become a different one that would be taxable?

None?

 

[imported_Tango]

Most people argue about the "moral" implication of such a tax... but the real point is that macroeconomic implications of such a policy would simply completely destroy the country in a few years.

a) Family businesses are a considerable part of any developed economy. A smooth transition between a generation and the next means more stability and growth, as opposed to businesses that have to start-up and close down every generation.

b) What would happen to shares hold by somebody after he dies? In something like 50 years the government would own the whole U.S. stock market.

c) Knowing this is the policy nobody would try to have his business grow as he ages, due to a complete lack of incentive... would people work harder so that the government can get a bigger paycheck in the end?

d) The day after such a law is passed you would see the biggest capital drain in history, as everybody who owns something would wire his money overseas. They already do, but something like this would basically drain every single penny from US banks, with implications from a monetary perspective unspeakable of.