Death Tax

[Kalam]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

- "Like omigawsh, I think that, like, the death tax, totally sux. I mean, people like me tooootally deserve to be able to spend our entire lives engaging in money-wasting hedonistic debauchery while contributing absolutely nothing to society simply because we had rich ancestors."

...

 

[slackjawed]

You were always told you couldn't take it with you, and you thought it was a joke.
Fact: dead folks don't vote, so politicians of both parties tend to ignore them at campaign time.

 

[garyd]

Peejay you have obviously never heard of a trust fund have you. The money you would tax yet again theough the death tax has already been taxed repeatedly before the rich ever die. Every dime they get has been taxed repeatedly via corporate taxes taxes on dividends, the AMT another patently unfair rip off of people who worl for a living and do so for more money than most.

Ever time you leftist cretins try to soak the rich, us working guys get drowned.

 

[Peejay]

Peejay you have obviously never heard of a trust fund have you. The money you would tax yet again theough the death tax has already been taxed repeatedly before the rich ever die. Every dime they get has been taxed repeatedly via corporate taxes taxes on dividends, the AMT another patently unfair rip off of people who worl for a living and do so for more money than most.

Ever time you leftist cretins try to soak the rich, us working guys get drowned.

Every dime is taxed everytime it changes hands. Thats the way it works. What are you trying to prove ? That because I paid sales tax on a purchase that when it then goes into a paycheck it shouldn't be taxed again ? Because it was taxed already ?

That makes no sense. When money changes hands, it gets taxed.

 

[WorldAHope]

Since you are posting to an online forum, I'd bet every dollar between your current net worth and the $3.5 million threshold of where the Estate tax begins that you never amass enough assets or estate to worry about it.
If you happen to approach that level of legacy, your tax accountant should be able to arrange Estate Planning to reduce your Estate below the threshold.
Worry about the moon falling on your head or Rush Limbaugh having a heart attack and the GOP remains headless and silent for the next 3 years. That is more likely than your estate ever being subject to the estate tax.

According to the IRS literature, an estate tax filing need only be made if the value of an estate exceeds the following amounts:

2005: First $1,500,000 in assets
2006-2008: First $2,000,000 in assets
2009: First $3,500,000 in assets

In addition, the maximum estate tax rate applied to the amounts in excess of these figures are as follows:

2005: 47 percent
2006: 46 percent
2007- 2009: 45 percent

In 2010, the estate tax rate drops to zero percent; if you die in that year, your heirs would not pay taxes, even if you passed on $20 billion!

One caveat: Congress ensured that the law sunsets in 2011. That is, on January 1st, 2011, the estate tax rate will return to its pre-Bush levels. Practically speaking, this means the difference between dying on December 31, 2010 and January 1, 2011 can mean 55 percent of your estate if you are person of means!

 

[Vel]

i DOUBT YOU MAKE THAT MUCH THAT YOU SHOULD BE CONCERNED....IF YOU DID YOU WOULDN'T BE ON A DUMBASS MESSAGE BOARD.

What is up with someone like this poster? Are they so shallow that unless an issue affects them personally they really can't recognize inequity or unfairness? I mean really.. do you have to BE a fire hydrant before you can understand being pissed on?

 

[auditor0007]

here is some info for you burp....

The federal estate tax doesn’t affect the middle class—it applies only to the very wealthiest taxpayers. In 2009, any estate worth less than $3.5 million ($7 million per couple) will be passed on to heirs and heiresses estate-tax free. [Center on Budget and Policy Priorities] In fact, only one of every 300 estates is subject to the tax. [Center for Economic and Policy Research]





============================================

Estate Tax Myths and Facts
Myth: The Estate Tax is a "Death Tax."
Fact: 98% of Americans who die pass their estate on to their heirs completely tax-free — in fact, they get a valuable tax break on capital gains. Zero estate tax is charged on assets left to a spouse or to charity.

Myth: The wealthiest Americans are able to completely avoid paying estate taxes.
Fact: Wealthy Americans most definitely pay estate taxes. In 1998, out of 47,000 taxable estates, there were 374 that were larger than $20 million. Those 374 estates paid over $4.4 billion in estate taxes — more than 20% of all estate taxes collected that year.

Myth: The Estate Tax must be repealed because it is forcing family businesses to close.
Fact: This issue has been wildly exaggerated. Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. Family businesses can be protected by raising exemption levels. Repealing the entire Estate Tax is unnecessary.

Myth: The Estate Tax must be repealed because it is forcing family farms to sell out.
Fact: As with family businesses, this issue has been distorted. Only 3 of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Foundation could not cite a single case of a family farm lost due to the estate tax. In any case, family farms can be protected by gradually raising exemption levels. Repealing the Estate Tax will likely encourage the growth of mega-farms, thereby hurting smaller operations.

Myth: The Estate Tax is unfair because it is "double taxation."
Fact: Unrealized capital gains, which form the majority of the value of the largest estates, have never been subject to taxation as income. Repealing the Estate Tax means that these gains would never be taxed. That’s unfair to those who pay capital gains taxes during their lifetimes.

Myth: The Estate Tax takes away over half the value of all estates.
Fact: For 98% of Americans, the Estate Tax takes away nothing, and it actually shields assets from capital gains taxes. For the other 2%, the average effective tax rate is 17%.

Myth: The Estate Tax discourages work and inhibits capital formation.
Fact: There is no hard empirical evidence that U.S. capital accumulation has been held back by the Estate Tax. There is evidence, however, that large inheritances do reduce work effort and saving among recipients.

Myth: The Estate Tax raises little revenue, so repealing it will have no effect.
Fact: Right now, the estate tax raises $30 billion a year for the federal government. That’s about 9% of the non-military discretionary budget. By 2011, the cost of the repeal will reach $60 billion a year, a time when the baby boomers begin to retire in large numbers. Meanwhile, the states stand to lose $9 billion a year by 2010, since they also receive revenue through the federal estate tax.

Myth: The Estate Tax is unfair.
Fact: The Estate Tax is eminently fair. It is collected from those most able to pay. It prevents the creation of family dynasties that would distort our democracy and limit economic opportunities for succeeding generations.

Leaning on the more conservative side, I don't want to see the government taking away the majority of anyone's life savings upon their death. That is not happening, so I don't see the issue. A fair estate/inheritance tax makes sense, especially based on the single fact that much of the wealth was never taxed under capital gains.

The other option would be to make any inheritance wealth left open to the capital gains tax before it could be distributed to any of the deceased's heirs. However, this could be problematic as many of the assets might actually have to be sold first to ascertain actual value.

 

[manu1959]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

that will be the second time they taxed it......

 

[manu1959]

here is some info for you burp....

The federal estate tax doesn’t affect the middle class—it applies only to the very wealthiest taxpayers. In 2009, any estate worth less than $3.5 million ($7 million per couple) will be passed on to heirs and heiresses estate-tax free. [Center on Budget and Policy Priorities] In fact, only one of every 300 estates is subject to the tax. [Center for Economic and Policy Research]





============================================

Estate Tax Myths and Facts
Myth: The Estate Tax is a "Death Tax."
Fact: 98% of Americans who die pass their estate on to their heirs completely tax-free — in fact, they get a valuable tax break on capital gains. Zero estate tax is charged on assets left to a spouse or to charity.

Myth: The wealthiest Americans are able to completely avoid paying estate taxes.
Fact: Wealthy Americans most definitely pay estate taxes. In 1998, out of 47,000 taxable estates, there were 374 that were larger than $20 million. Those 374 estates paid over $4.4 billion in estate taxes — more than 20% of all estate taxes collected that year.

Myth: The Estate Tax must be repealed because it is forcing family businesses to close.
Fact: This issue has been wildly exaggerated. Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. Family businesses can be protected by raising exemption levels. Repealing the entire Estate Tax is unnecessary.

Myth: The Estate Tax must be repealed because it is forcing family farms to sell out.
Fact: As with family businesses, this issue has been distorted. Only 3 of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Foundation could not cite a single case of a family farm lost due to the estate tax. In any case, family farms can be protected by gradually raising exemption levels. Repealing the Estate Tax will likely encourage the growth of mega-farms, thereby hurting smaller operations.

Myth: The Estate Tax is unfair because it is "double taxation."
Fact: Unrealized capital gains, which form the majority of the value of the largest estates, have never been subject to taxation as income. Repealing the Estate Tax means that these gains would never be taxed. That’s unfair to those who pay capital gains taxes during their lifetimes.

Myth: The Estate Tax takes away over half the value of all estates.
Fact: For 98% of Americans, the Estate Tax takes away nothing, and it actually shields assets from capital gains taxes. For the other 2%, the average effective tax rate is 17%.

Myth: The Estate Tax discourages work and inhibits capital formation.
Fact: There is no hard empirical evidence that U.S. capital accumulation has been held back by the Estate Tax. There is evidence, however, that large inheritances do reduce work effort and saving among recipients.

Myth: The Estate Tax raises little revenue, so repealing it will have no effect.
Fact: Right now, the estate tax raises $30 billion a year for the federal government. That’s about 9% of the non-military discretionary budget. By 2011, the cost of the repeal will reach $60 billion a year, a time when the baby boomers begin to retire in large numbers. Meanwhile, the states stand to lose $9 billion a year by 2010, since they also receive revenue through the federal estate tax.

Myth: The Estate Tax is unfair.
Fact: The Estate Tax is eminently fair. It is collected from those most able to pay. It prevents the creation of family dynasties that would distort our democracy and limit economic opportunities for succeeding generations.

Leaning on the more conservative side, I don't want to see the government taking away the majority of anyone's life savings upon their death. That is not happening, so I don't see the issue. A fair estate/inheritance tax makes sense, especially based on the single fact that much of the wealth was never taxed under capital gains.

The other option would be to make any inheritance wealth left open to the capital gains tax before it could be distributed to any of the deceased's heirs. However, this could be problematic as many of the assets might actually have to be sold first to ascertain actual value.

never taxed in the first place......really.....how is that possible....

 

[auditor0007]

here is some info for you burp....

The federal estate tax doesn’t affect the middle class—it applies only to the very wealthiest taxpayers. In 2009, any estate worth less than $3.5 million ($7 million per couple) will be passed on to heirs and heiresses estate-tax free. [Center on Budget and Policy Priorities] In fact, only one of every 300 estates is subject to the tax. [Center for Economic and Policy Research]





============================================

Estate Tax Myths and Facts
Myth: The Estate Tax is a "Death Tax."
Fact: 98% of Americans who die pass their estate on to their heirs completely tax-free — in fact, they get a valuable tax break on capital gains. Zero estate tax is charged on assets left to a spouse or to charity.

Myth: The wealthiest Americans are able to completely avoid paying estate taxes.
Fact: Wealthy Americans most definitely pay estate taxes. In 1998, out of 47,000 taxable estates, there were 374 that were larger than $20 million. Those 374 estates paid over $4.4 billion in estate taxes — more than 20% of all estate taxes collected that year.

Myth: The Estate Tax must be repealed because it is forcing family businesses to close.
Fact: This issue has been wildly exaggerated. Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. Family businesses can be protected by raising exemption levels. Repealing the entire Estate Tax is unnecessary.

Myth: The Estate Tax must be repealed because it is forcing family farms to sell out.
Fact: As with family businesses, this issue has been distorted. Only 3 of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Foundation could not cite a single case of a family farm lost due to the estate tax. In any case, family farms can be protected by gradually raising exemption levels. Repealing the Estate Tax will likely encourage the growth of mega-farms, thereby hurting smaller operations.

Myth: The Estate Tax is unfair because it is "double taxation."
Fact: Unrealized capital gains, which form the majority of the value of the largest estates, have never been subject to taxation as income. Repealing the Estate Tax means that these gains would never be taxed. That’s unfair to those who pay capital gains taxes during their lifetimes.

Myth: The Estate Tax takes away over half the value of all estates.
Fact: For 98% of Americans, the Estate Tax takes away nothing, and it actually shields assets from capital gains taxes. For the other 2%, the average effective tax rate is 17%.

Myth: The Estate Tax discourages work and inhibits capital formation.
Fact: There is no hard empirical evidence that U.S. capital accumulation has been held back by the Estate Tax. There is evidence, however, that large inheritances do reduce work effort and saving among recipients.

Myth: The Estate Tax raises little revenue, so repealing it will have no effect.
Fact: Right now, the estate tax raises $30 billion a year for the federal government. That’s about 9% of the non-military discretionary budget. By 2011, the cost of the repeal will reach $60 billion a year, a time when the baby boomers begin to retire in large numbers. Meanwhile, the states stand to lose $9 billion a year by 2010, since they also receive revenue through the federal estate tax.

Myth: The Estate Tax is unfair.
Fact: The Estate Tax is eminently fair. It is collected from those most able to pay. It prevents the creation of family dynasties that would distort our democracy and limit economic opportunities for succeeding generations.

Leaning on the more conservative side, I don't want to see the government taking away the majority of anyone's life savings upon their death. That is not happening, so I don't see the issue. A fair estate/inheritance tax makes sense, especially based on the single fact that much of the wealth was never taxed under capital gains.

The other option would be to make any inheritance wealth left open to the capital gains tax before it could be distributed to any of the deceased's heirs. However, this could be problematic as many of the assets might actually have to be sold first to ascertain actual value.

never taxed in the first place......really.....how is that possible....

As an example, an individual purchases $3 million worth of real estate in 1990. This individual dies in 2015, still holding the same real estate now valued at $10 million. If this individual was alive and wanted to cash in by selling the real estate, they would owe capital gains on the $7 million profit. However, when they die and pass it on, you want to allow it to go untaxed.

Please explain to me how dying should allow someone to avoid paying taxes.

 

[Care4all]

here is some info for you burp....

The federal estate tax doesn’t affect the middle class—it applies only to the very wealthiest taxpayers. In 2009, any estate worth less than $3.5 million ($7 million per couple) will be passed on to heirs and heiresses estate-tax free. [Center on Budget and Policy Priorities] In fact, only one of every 300 estates is subject to the tax. [Center for Economic and Policy Research]





============================================

Estate Tax Myths and Facts
Myth: The Estate Tax is a "Death Tax."
Fact: 98% of Americans who die pass their estate on to their heirs completely tax-free — in fact, they get a valuable tax break on capital gains. Zero estate tax is charged on assets left to a spouse or to charity.

Myth: The wealthiest Americans are able to completely avoid paying estate taxes.
Fact: Wealthy Americans most definitely pay estate taxes. In 1998, out of 47,000 taxable estates, there were 374 that were larger than $20 million. Those 374 estates paid over $4.4 billion in estate taxes — more than 20% of all estate taxes collected that year.

Myth: The Estate Tax must be repealed because it is forcing family businesses to close.
Fact: This issue has been wildly exaggerated. Only 3 of every 10,000 people who die leave a taxable estate in which a family business forms the majority of the estate. Family businesses can be protected by raising exemption levels. Repealing the entire Estate Tax is unnecessary.

Myth: The Estate Tax must be repealed because it is forcing family farms to sell out.
Fact: As with family businesses, this issue has been distorted. Only 3 of every 10,000 people who die leave a taxable estate in which a farm forms the majority of the estate. On April 8, 2001, the New York Times reported that the pro-repeal American Farm Bureau Foundation could not cite a single case of a family farm lost due to the estate tax. In any case, family farms can be protected by gradually raising exemption levels. Repealing the Estate Tax will likely encourage the growth of mega-farms, thereby hurting smaller operations.

Myth: The Estate Tax is unfair because it is "double taxation."
Fact: Unrealized capital gains, which form the majority of the value of the largest estates, have never been subject to taxation as income. Repealing the Estate Tax means that these gains would never be taxed. That’s unfair to those who pay capital gains taxes during their lifetimes.

Myth: The Estate Tax takes away over half the value of all estates.
Fact: For 98% of Americans, the Estate Tax takes away nothing, and it actually shields assets from capital gains taxes. For the other 2%, the average effective tax rate is 17%.

Myth: The Estate Tax discourages work and inhibits capital formation.
Fact: There is no hard empirical evidence that U.S. capital accumulation has been held back by the Estate Tax. There is evidence, however, that large inheritances do reduce work effort and saving among recipients.

Myth: The Estate Tax raises little revenue, so repealing it will have no effect.
Fact: Right now, the estate tax raises $30 billion a year for the federal government. That’s about 9% of the non-military discretionary budget. By 2011, the cost of the repeal will reach $60 billion a year, a time when the baby boomers begin to retire in large numbers. Meanwhile, the states stand to lose $9 billion a year by 2010, since they also receive revenue through the federal estate tax.

Myth: The Estate Tax is unfair.
Fact: The Estate Tax is eminently fair. It is collected from those most able to pay. It prevents the creation of family dynasties that would distort our democracy and limit economic opportunities for succeeding generations.

Leaning on the more conservative side, I don't want to see the government taking away the majority of anyone's life savings upon their death. That is not happening, so I don't see the issue. A fair estate/inheritance tax makes sense, especially based on the single fact that much of the wealth was never taxed under capital gains.

The other option would be to make any inheritance wealth left open to the capital gains tax before it could be distributed to any of the deceased's heirs. However, this could be problematic as many of the assets might actually have to be sold first to ascertain actual value.

never taxed in the first place......really.....how is that possible....

Myth: The Estate Tax is unfair because it is "double taxation."

Fact: Unrealized capital gains, which form the majority of the value of the largest estates, have never been subject to taxation as income. Repealing the Estate Tax means that these gains would never be taxed. That’s unfair to those who pay capital gains taxes during their lifetimes.

 

[WorldAHope]

i DOUBT YOU MAKE THAT MUCH THAT YOU SHOULD BE CONCERNED....IF YOU DID YOU WOULDN'T BE ON A DUMBASS MESSAGE BOARD.

What is up with someone like this poster? Are they so shallow that unless an issue affects them personally they really can't recognize inequity or unfairness? I mean really.. do you have to BE a fire hydrant before you can understand being pissed on?

Well said.
Compassion for the top 1% is badly needed in these trying times.
What if one of those AIG managers dies, rest their soul. Someone who was paid multimillion dollar bonuses on top of their multimillion dollar pay - someone who avoids taxes because they are experts at the Son Of Boss methods of tax evasion, and include their own money within packets they shuttle around offshore accounts for clients, and earn commissions on the tax evasion transactions. If one of those poor dears pass away, their survivors will have to pay a tax...it breaks a Republican American's heart to think of all those .003% of deaths in America each year being subject to that horrid tax. There should be an entire genre of Country Music devoted to the injustice. Grown men in hats singing in waverring voice about the hardship and sorry lot of the uber wealthy. Should be bake sales at NASCAR events and gunshows to collect for the relief of the financial agony to the families of millionaires and billionares who are forced to pay that tax.
Its next to slavery, damn near COMMUNISM to tax the wealthy. They should get everything free. .

 

[rayboyusmc]

There is no "Death Tax." That is a convenient soundbite from the right. The dead are not being taxed. The living are being taxed. It's really an inheritance tax. Over the generations it was supposed to keep US from getting another aristocratic class. They are here and they have their faithful serfs doing their bidding.

It didn't work.

But it sounds nice.

 

[Skull Pilot]

There is no "Death Tax." That is a convenient soundbite from the right. The dead are not being taxed. The living are being taxed. It's really an inheritance tax. Over the generations it was supposed to keep US from getting another aristocratic class. They are here and they have their faithful serfs doing their bidding.

It didn't work.

But it sounds nice.

Spend It in Vegas or Die Paying Taxes - WSJ.com

In most cases, people who inherit wealth are lucky by an accident of birth and really don't "deserve" their inheritance any more than people who don't inherit wealth. After all, few of us get to choose our parents. It's also arguable that inherited wealth sometimes induces slothfulness and overindulgence. But the facts that beneficiaries of inheritances are just lucky and that the actual inheritance may make beneficiaries less productive don't justify having an estate tax.

These same observations about serendipitous birth can be made for intelligence, education, attractiveness, health, size, gender, disposition, race, etc. And yet no one would suggest that the government should remove any portion of these attributes from people simply because they came from their parents. Surely we have not moved into Kurt Vonnegut's world of Harrison Bergeron.

President Barack Obama has proposed prolonging the federal estate tax rather than ending it in 2010, as is scheduled under current law. The president's plan would extend this year's $3.5 million exemption level and the 45% top rate. But will this really help America recover from recession and reduce our growing deficits? In order to assess the pros and cons of the estate tax, we should focus on its impact on those who bequeath wealth, not on those who receive wealth.

Advocates of the estate tax argue that such a tax will reduce the concentrations of wealth in a few families, but there is little evidence to suggest that the estate tax has much, if any, impact on the distribution of wealth.

To see the silliness of using the estate tax as a tool to redistribute wealth, realize that those who die and leave estates would be taxed just as much if they bequeathed their money to poor people as they would if they left their money to rich people. If the objective were to redistribute, surely, an inheritance tax (a tax on the recipients) would make far more sense than an estate tax.

So you see the current tax is NOT an inheritance tax as you claim because the estate is being taxed before it is actually bequeathed.

Indeed, from a societal standpoint, inheritance is an unmitigated good. Passing on to successive generations greater health, wealth and wisdom is what society in general, and America specifically, is all about. Imagine what America would look like today if our forefathers had been selfish and had left us nothing. We have all benefited greatly from a history of intergenerational American generosity. But just being an American is as much an accident of birth as being the child of wealthy parents. If you are an American, it's likely because ancestors of yours chose to become Americans and also chose to have children.

In its most basic form, it's about as silly an idea as can be imagined that America in the aggregate can increase the standards of living of future generations by taxing individual Americans for passing on higher standards of living to future generations of Americans of their choice. Clearly, taxing estates at death will induce people who wish to leave estates to future generations to leave smaller estates and to find ways to avoid estate taxes. On a conceptual level, it makes no sense to tax estates at death.

Study after study finds that the estate tax significantly reduces the size of estates and, as an added consequence, reduces the nation's capital stock and income. This common sense finding is documented ad nauseam in the 2006 U.S. Joint Economic Committee Report on the Costs and Consequences of the Federal Estate Tax. The Joint Economic Committee estimates that the estate tax has reduced the capital stock by approximately $850 billion because it reduces incentives to save and invest, has excessively high compliance costs, and results in significant economic inefficiencies.

Today in America you can take your after-tax income and go to Las Vegas and carouse, gamble, drink and smoke, and as far as our government is concerned that's just fine. But if you take that same after-tax income and leave it to your children and grandchildren, the government will tax that after-tax income one additional time at rates up to 55%. I especially like an oft-quoted line from Joseph Stiglitz and David L. Bevan, who wrote in the Greek Economic Review, "Of course, prohibitively high inheritance tax rates generate no revenue; they simply force the individual to consume his income during his lifetime." Hurray for Vegas.

If you're rich enough, however, you can hire professionals who can, for a price, show you how to avoid estate taxes. Many of the very largest estates are so tax-sheltered that the inheritances go to their beneficiaries having paid little or no taxes at all. And all the costs associated with these tax shelters and tax avoidance schemes are pure wastes for the country as a whole and exist solely to circumvent the estate tax. The estate tax in and of itself causes people to waste resources.

Again, a number of studies suggest that the costs of sheltering estates from the tax man actually are about as high as the total tax revenues collected from the estate tax. And these estimates don't even take into account lost output, employment and production resulting from perverse incentives. This makes the estate tax one of the least efficient taxes. And yet for all the hardship and expense associated with the estate tax, the total monies collected in any one year account for only about 1% of federal tax receipts.

It is important to realize that less than half of the estates that must go through the burden of complying with the paperwork and reporting requirements of the tax actually pay even a nickel of the tax. And the largest estates that actually do pay taxes generally pay lower marginal tax rates than smaller estates because of tax shelters. The inmates really are running the asylum.

In 1982, Californians overwhelmingly voted to eliminate the state's estate tax. It seems that even in the highest taxed state in the nation there are some taxes voters cannot abide. It shouldn't surprise anyone that ultra-wealthy liberal Sen. Howard Metzenbaum, supporter of the estate tax and lifetime resident of Ohio, where there is a state estate tax, chose to die as a resident of Florida, where there is no state estate tax. Differential state estate-tax rates incentivize people to move from state to state. Global estate tax rates do the same thing, only the moves are from country to country. In 2005 the U.S., at a 47% marginal tax rate, had the third highest estate tax rate of the 50 countries covered in a 2005 report by Price Waterhouse Coopers, LLP. A full 26 countries had no "Inheritance/Death" tax rate at all.

In the summary of its 2006 report, the Joint Economic Committee wrote, "The detrimental effects of the estate tax are grossly disproportionate to the modest amount federal revenues it raises (if it raises any net revenue at all)." Even economists in favor of the estate tax concede that its current structure does not work. Henry Aaron and Alicia Munnell concluded, "In short, the estate and gift taxes in the United States have failed to achieve their intended purposes. They raise little revenue. They impose large excess burdens. They are unfair."

For all of these reasons, the estate tax needs to go, along with the step-up basis at death of capital gains (which values an asset not at the purchase price but at the price at the buyer's death). On purely a static basis, the Joint Tax Committee estimates that over the period 2011 through 2015, the static revenue losses from eliminating the estate tax would be $281 billion, while the additional capital gains tax receipts from repeal of the step-up basis would be $293 billion.

To counter the fact that economists such as I obsess about the deleterious effects of the estate tax, advocates of the estate tax note with some pride that 98% of Americans will never pay this tax. Let's make it 100%, and I'll get off my soapbox.

Mr. Laffer is the chairman of Laffer Associates and co-author of "The End of Prosperity: How Higher Taxes Will Doom the Economy -- If We Let It Happen" (Threshold, 2008).

 

[editec]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

I'm dubious.

You're going to leave twenty million dollars to your heirs, Burp?

I think that's about the amount you'd need to leave to pay 45% of your total estate to the state.

The first five million is tax free, dude.

 

[Skull Pilot]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

I'm dubious.

You're going to leave twenty million dollars to your heirs, Burp?

I think that's about the amount you'd need to leave to pay 45% of your total estate to the state.

The first five million is tax free, dude.

Actually it's the first 3.5 million

 

[editec]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

I'm dubious.

You're going to leave twenty million dollars to your heirs, Burp?

I think that's about the amount you'd need to leave to pay 45% of your total estate to the state.

The first five million is tax free, dude.

Actually it's the first 3.5 million

I stand corrected.

Hey burp if you're kids can't get by starting out with hundreds of time the AVERAGE FAMILY salary, AFTER TAXES, then they do NOT DESERVE a damned cent.

In fact, if that's not enough money for them , then this society is damned fool for allowing them to have ANY money.

They're obviously not good enough stewarts with capital to have a lot of it

You want fair laddie?

10o% inheritance taxes are FAIR, but do they make sense? Of course not

Well O % is FAIR, but does it make sense? Also NO.

FAIR HAS NOTHING TO DO WITH TAXES because society isn't FAIR.

I'll tell you what the rich tell the poor every day:

Life isn't fair, get over it.​

 

[jillian]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

the person inheriting the money did not earn it. and any money we earn gets taxed.

let me know if you're going to be leaving your kids more than the exempt amount. How many millions is that now?

you are aware it's something like 7 families who are running the propaganda campaign against estate tax... including the Hiltons.

poor, poor Paris.

 

[Skull Pilot]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

the person inheriting the money did not earn it. and any money we earn gets taxed.

but hasn't there already been taxes collected on all the money that might be bequeathed?
So it's OK for the government to double dip but not OK for average folks to do the same?

let me know if you're going to be leaving your kids more than the exempt amount. How many millions is that now?

you are aware it's something like 7 families who are running the propaganda campaign against estate tax... including the Hiltons.

poor, poor Paris.

Ahh the green monster of class envy rears its ugly liberal head again.

So rather than lower taxes on everyone so that more people have the chance to invest, or start a business and accumulate wealth, you would rather keep a tax that does nothing but transfer individual wealth to the fucking government.

We've all seen how good the government is at handling money haven't we?

 

[sealybobo]

I work hard. I take care of my finances. I plan ahead. I invest wisely.

I do all this to leave a legacy to my family when I pass.

However, when I die, the government will take 45 percent of my estate.

Can anybody defend this?

Yes, Thomas Jefferson can

How Rich is Too Rich For Democracy?

In a letter to Joseph Milligan on April 6, 1816, Thomas Jefferson explicitly suggested that if individuals became so rich that their wealth could influence or challenge government, then their wealth should be decreased upon their death. He wrote, "If the overgrown wealth of an individual be deemed dangerous to the State, the best corrective is the law of equal inheritance to all in equal degree..."

In this, he was making the same argument that the Framers of Pennsylvania tried to make when writing their constitution in 1776. As Kevin Phillips notes in his masterpiece book "Wealth and Democracy: A Political History of the American Rich," a Sixteenth Article to the Pennsylvania Bill of Rights (that was only "narrowly defeated") declared: "an enormous proportion of property vested in a few individuals is dangerous to the rights, and destructive of the common happiness of mankind, and, therefore, every free state hath a right by its laws to discourage the possession of such property."

Now you? No, you shouldn't pay a Death Tax or Inheritance tax, or at least not 45%. Are you sure that is what you will pay? Do you have a lot of money?

I guess my answer will depend on how much money you have. Many Progressives want the dollar amount to be raised to around $20 million. In other words, if you have 19 million, you wouldn't pay a Death Tax.

Think about Paris Hilton. She's going to inherit a lot of money, and she is not going to contribute a whole lot to society. She doesn't have to go to school or anything. Now imagine she dies and the fortune she got from her parents has now doubled. She has a kid who is even more worthless than she is. And so on and so on. So 100 years from now we have Paris' great great great grandkid, who is worthless, but also very powerful. In fact, too powerful.

PS. I also hear that rich people know a way around this tax. One solution is they buy life insurance for the $ amount that will be taken when they die. So their kids get it all.

The federal estate tax, or "death tax," isn't dead yet, but a powerful clique of wealthy families and interest groups will stop at nothing to kill it. Their movement makes small business owners and family farmers its poster boys. But those who stand to gain the most from repeal are a few thousand very wealthy households. The effort to turn the public against the estate tax, and ultimately abolish it, is a case study in conservative movement tactics-the campaign uses distorted facts, dirty tricks, and front groups, and it's bent on repealing the nation's only tax on inherited wealth.
The decade-long public relations and lobbying campaign seemed to pay off when President George W. Bush signed his $1.35 trillion tax cut into law in 2001. The bill included a gradual phase-out of the estate tax over ten years. But because the tax bill-a bizarre assortment of delayed activation dates and gimmicks that money guru Jane Bryant Quinn called "a contemptible piece of consumer fraud"-was structured to "sunset" at the end of 2010, the estate tax will be fully repealed for only one year, after which tax rules revert back to what they were before passage of the bill.

"Death Tax" Deception Who's behind the movement to repeal the nation's only tax on inherited wealth?

If we don't get $ from the death tax, where will we get it? If not here, they'll take it from hard working middle class Americans. So the reason you should pay when you die is so that we don't have to take on that burden.

Hope this helps answer your question.