Death Tax to the Rescue

Discussion in 'Politics' started by LogikAndReazon, Jan 4, 2013.

  1. LogikAndReazon
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    LogikAndReazon Gold Member

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    Next week, all or part of that half-trillion in taxes is going into effect, including the Obama death tax. Just think of those family farms whose owners pass away in the new year. With Obama blocking reform, rates will return to 55% of assets over $1 million (in addition to whatever state death taxes are due). At current prices, a typical 200-acre Midwestern farm is now valued at nearly $2 million. That farm will have to be sold or mortgaged to pay estate taxes. It will be difficult for surviving family members, who may be dependent on the farm for their livelihoods and may already have been operating the farm for years, to continue operating "half a farm." But that's what Obama wants.

    Small business owners are in the same boat. In order to pay that 55% death tax, many who inherit a franchise, a retail operation, or even a service station will be forced to sell the business. And everyone who worked at that business loses his job.

    The death tax is just as unfair to those who do not operate a business but have saved diligently all their lives. Inheritors will be forced to sell stocks, bonds, land, and even precious family heirlooms to pay the tax.

    And what happens to all of this money -- the proceeds from the family farms, the franchisees, the retail shops, the estates of small investors? It goes to fund the greatest pay-to-play scheme ever concocted. It rewards the welfare class, the union bosses, the trial lawyers, the crony capitalists, and the armies of lobbyists and community organizers who support the Democratic Party.

    And for this, the entire middle class is to be ground into the dust. And the country as a whole will be condemned to generations of poverty and serfdom.

    That is what is at stake in the current negotiations. Of course Obama is intransigent. He is determined to destroy the middle class and force them into dependency, where they will join the mushrooming welfare class -- the 47 million on food stamps, the 23 million still looking for work, and the 100 million who have dropped out of the labor force altogether. He is far more concerned about renewing unemployment benefits than he is about creating jobs.

    Obama's idea of "saving" the middle class is extending unemployment benefits, increasing welfare payments to single moms, and boosting the earned income credit for low earners. That kind of assistance doesn't save the middle class -- it just turns them into welfare clients. But, of course, that's the point. Move them out of the middle class and into dependency. And while you're at it, make them actually believe you're saving them.

    Articles: 'Saving' the Middle Class
     
  2. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    Sure, if the person that buys the business bought it with the purpose of closing it down and doing absolutely nothing with it which is the case almost never. Most of the time someone buys a business they keep most of the employees and replace others and if they downsize the business its because the profit motive dictates it not because the last owner owed an estate tax.
     
    Last edited: Jan 4, 2013
  3. Koios
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    Koios Recreational Kibitzer

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    Google "Section 2032A." Learning can be fun.
     
  4. Duped
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    Duped Senior Member Supporting Member

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    Clover+ Piven - some real sick shit! Obama = commander, and thief.
    I know some very wealthy people who worked their asses off for decades to build their businesses so they could pass a much better life on to their children. Some of them are closing down shop and departing the USA - more consequences of dumbass liberalism !
     
  5. OohPooPahDoo
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    OohPooPahDoo Gold Member

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    Oh well if you know some people then I guess that proves everything.
     
  6. jwoodie
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    jwoodie Gold Member Supporting Member

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    I think the federal government already takes in too much in the way of taxes, but the "Death Tax" argument is a bit misleading. According to this argument, the inheritance tax constitutes "double taxation" of assets on which taxes were already originally paid. This may be true for simple bank accounts producing taxable interest income, but the vast majority of assets subject to the inheritance tax have appreciated in value without ever having been subject to capital gains taxes. That is because the beneficiaries of these assets are entitled to an automatic "step up" in the cost basis of these assets, thereby avoiding the capital gains taxes that would have been due if the original owner had liquidated (sold) them prior to his/her death.

    For example, a stock portfolio that was originally purchased for $1 million has appreciated to $10 million. If the owner had sold this stock prior to death, capital gains taxes would have been due on the $9 million gain. Instead, the beneficiaries get to increase the original cost basis of this stock from $1 million to its current value of $10 million. They can then sell the stock the next day without paying any capital gains taxes. As a result, the $9 million capital gain is never taxed.

    Despite its obvious deficiencies (including many ways to circumvent it), the inheritance tax remains the only way of taxing these capital gains. My preference would be to postpone, but not eliminate, capital gains taxes on appreciated assets inherited by close family members. Otherwise, these assets should be treated the same as if they had been liquidated before the death of the original owner.
     
  7. Truthmatters
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    Truthmatters BANNED

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    its not the same person getting taxed you nutter
     
  8. BlindBoo
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    BlindBoo Gold Member

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    There is no federal death tax.

    There is however a 40% estate tax (or Inheritance Tax). There is a 5 million dollars exemption.
     
  9. jwoodie
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    jwoodie Gold Member Supporting Member

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    The tax is applied to the asset, not the person. An individual can always refuse an inheritance if he/she believes the tax burden would be too great.:lol:
     
  10. BlindBoo
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    BlindBoo Gold Member

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    It's not like this type of tax is new or at it's highest rates, so they must have heard of it. Perhaps its would be cheaper to hire a good estate planning attorney otherwise, good riddance.
     

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