Death Tax

[Yurt]

burp,

i hope you realize that if your estate did come to $4.5 million... God willing, that the $3.5 million of your estate would be exempt from any inheritance tax and only the $1 million over and above the $3.5 million would be taxed.

so, it would come out to $450k in taxes on your $4.5 million estate, coming out to an effective rate of 10% inheritance tax, not the 45%....if you made no moves at all to protect your money. If you did make charitable donations, it would be even less than that.

And since you quoted Proverbs from the Bible, it gives me liberty to quote the Bible as well:

"It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." Luke 18:18-30

and

For the love of money, is the root of all evil. 1 Timothy 6:10

Please know that these Bible quotes aren't to negate your Proverbs quote regarding being wise with your money so that you don't squander it all and can pass along something to your children as inheritance, but just to remind you that if you are not wise, or humbled by your good fortune, it could come back and bite ya in the rear, on your way out.

care

so god had death taxes? kindly point out death taxes in the bible....kindly point out where god does not allow your wealth to transfer to your kids....

there were many wealthy folk written about in the bible....death taxes have absoluley zero to do with god's message about money. you're essentially saying that if you are robbed and you are wealthy, let it go....

Didn't Jesus say, "Render unto Caesar that which is Caesar's" ?



"does not allow your wealth to transfer" ???

Did you miss the part highlighted in red above?

so you admit the bible says nothing about taxing your wealth at death....

if you really want to take the your caesar logic all the way....lets do it...

adolf hitler
stalin
saddam

you really want to stick with that line of thought? do you really think jesus meant that?

 

[Care4all]

More excitement I see.

But I do have a confession. I started this thread in an attempt to discuss and point out how unfair the death tax was. Much to my surprise, later in the thread, I found the discussion changing from a general subject to people claiming that I didn't have that much money.

In an attempt to get the thread back on course, I stated a few things that were pointed out later to contradict things I had said previously. That is what you get when you state un and half truths.

So now we can get back on track with the facts.

I do worry about the death tax. If all goes as planned, in ten years I will be at about 4.5 million. Two businesses, investing for a long time, other assets, etc., will get me there. With the threshold at 3.5 million, I am concerned. Do I plan to die at 60? Of course not. And yes, I will get my 4.5 below the threshold by doing various legal things.

Fortunately, today that 3.5 changed:

The Lincoln-Kyl amendment would raise the death tax exemption to $5 million per individual and $10 million per couple, indexed for inflation. Under this amendment, the maximum tax rate is reduced to 35%. Currently, estates valued at more than $3.5 million, or $7 million for a couple, are taxed at a 45% rate. President Obama has proposed freezing it at this level so it can be dealt with at a later date. But if Congress doesn’t act to freeze or reduce the estate tax, in 2011, it will revert to a staggering 55% tax on estates worth only $1 million or more.

Senate Vote On Death Tax Relief A Win For NCBA Members - Cattle Network

If you think about it, for someone who owns their own business, 3.5 million isn't that much. And if, in 2011, it reverts back to 55% (for estates over 1 million), then a lot more people are going to be in trouble.

Someone said that no one has ever had to sell their land to pay taxes. Wrong:

The government, should not take away the people's inheritance by forcing them to give up their property. Yet, each year families all across America are being forced to sell property to pay the Death Tax. A 2000 report by the U.S. Forest Service and Mississippi State University found that 33 percent of the forest owners were subject to the Death Tax and of those, 40 percent had to sell timber or land to pay the tax. Given that the average tree farm is worth $2 million and that the average annual income of a tree farmer is about $50,000, paying off the government's Death Tax will cause a number of families to be evicted from some, or possibly, all of their land.

Alabama Policy Institute :: A Good Man Leaves An Inheritance

I know most of you know this but I will say it anyway. This isn't how much cash you have in the bank. This is assets. Cash, businesses, property, etc.

Earlier, there were some quotations being thrown around.

Here are two more:

"Abolition of all rights of inheritance." - this is the third plank of Karl Marx's Communist Manifesto.

A good man leaveth an inheritance to his children's children: and the wealth of the sinner is laid up for the just. - Proverbs 13:22

burp,

i hope you realize that if your estate did come to $4.5 million... God willing, that the $3.5 million of your estate would be exempt from any inheritance tax and only the $1 million over and above the $3.5 million would be taxed.

so, it would come out to $450k in taxes on your $4.5 million estate, coming out to an effective rate of 10% inheritance tax, not the 45%....if you made no moves at all to protect your money. If you did make charitable donations, it would be even less than that.

And since you quoted Proverbs from the Bible, it gives me liberty to quote the Bible as well:

"It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." Luke 18:18-30

and

For the love of money, is the root of all evil. 1 Timothy 6:10

Please know that these Bible quotes aren't to negate your Proverbs quote regarding being wise with your money so that you don't squander it all and can pass along something to your children as inheritance, but just to remind you that if you are not wise, or humbled by your good fortune, it could come back and bite ya in the rear, on your way out.

care

so god had death taxes? kindly point out death taxes in the bible....kindly point out where god does not allow your wealth to transfer to your kids....

there were many wealthy folk written about in the bible....death taxes have absoluley zero to do with god's message about money. you're essentially saying that if you are robbed and you are wealthy, let it go....

you NEVER answered my post earlier, or i didn't see your answer, regarding income taxes also being to fill the government coffers so why not eliminate those taxes as well? Why are you not fighting to eliminate income taxes that just fill the government coffers?

Christ told us to pay our taxes Yurt, are you denying such? "pay unto Ceasar, what is his''....was precisely that...telling the Pharisees that they had to pay their taxes, no matter how unfair it seemed, do you deny such as well?

Also, the 10% tithing was in essense a tax on our earnings....on our estates, never to be passed on to our children.

So, God most certainly spoke of paying our taxes due and i disagree with your ascertion that He did not, Yurt.

Care

 

[Valerie]

so god had death taxes? kindly point out death taxes in the bible....kindly point out where god does not allow your wealth to transfer to your kids....

there were many wealthy folk written about in the bible....death taxes have absoluley zero to do with god's message about money. you're essentially saying that if you are robbed and you are wealthy, let it go....

Didn't Jesus say, "Render unto Caesar that which is Caesar's" ?



"does not allow your wealth to transfer" ???

Did you miss the part highlighted in red above?

so you admit the bible says nothing about taxing your wealth at death....

if you really want to take the your caesar logic all the way....lets do it...

adolf hitler
stalin
saddam

you really want to stick with that line of thought? do you really think jesus meant that?

You asked for a bible reference and I gave you one. Otherwise, your line of thought is beyond me.

Are you upset because your ten million dollar estate will have to render 45% of $6.5 mil. or is it just the principle of taxation in general that upset you?

You're right, those poor kids will only be left with $7.1 mil, and that's a darn travesty of justice.

 

[Iriemon]

apparently uncle sam does believe in prying money from people's cold dead hands....

They pry it out of warm alive hands. Why cold dead hands should get some tax exemption I can't see.

think it through....that money has already been taxed...taxing it again is a double tax.

It hasn't been taxed to the person receiving it. All money is taxed not just double but many times. If Ms. Jones hires me to paint her house, he pays me with money that has already been taxed, but I still have to pay tax on it.

you want to tax it as income to the beneficiary, i can see that. but that is not the way the tax works, it punishes you for being rich and dead.

I agree that would make a lot more sense than an estate tax; though the practical effect is similar.

 

[Care4all]

MOST ALL of the estates affected by the taxes upon death, HAVE NEVER BEEN TAXED for their Capital Gains.

It is unfair to those who have paid their Capital gains tax during their lifetime, that these folks with a ton of money, are not taxed on their capital gains.

the Hiltons have never been taxed on their shares of the Hilton corp stock they own and made a gain on....NEVER BEEN TAXED, got it yet?

Do you all even under stand this...? They aren't being double taxed, they have NEVER BEEN TAXED on their gain....

as an example, when they went public and received 100,000 shares of Hilton stock at $10 bucks a share....never selling one share of it, and having 100,000 shares upon death, only at $100 dollars a share...there was a $9 million dollar capital gain that was NEVER taxed.

sheesh, some of you all have purposely and conveniently ignored the FACTS on this topic and continue to pass along stuff that is simply NOT TRUE.... and i would love to know WHY?

 

[Valerie]

Here's some good info: Publication 950 (9/2008), Introduction to Estate and Gift Taxes

Believe me I'm not advocating for the tax man, rather just reinforcing the facts as stated by Care4all and confirmed here by the attached IRS link.

Sometimes misinformation gets perpetuated by virtue of collective sentiment and I'd like to think the benefit of a forum such as this is to dispel such myths with real facts presented by the collective knowledge and experience of the group.

No doubt giving back nearly three million out of ten is a lot of money, but the rationale has to do with the system providing the opportunity in the first place and needing some sort of stop gap measure to keep things balanced for future generations.

 

[Yurt]

burp,

i hope you realize that if your estate did come to $4.5 million... God willing, that the $3.5 million of your estate would be exempt from any inheritance tax and only the $1 million over and above the $3.5 million would be taxed.

so, it would come out to $450k in taxes on your $4.5 million estate, coming out to an effective rate of 10% inheritance tax, not the 45%....if you made no moves at all to protect your money. If you did make charitable donations, it would be even less than that.

And since you quoted Proverbs from the Bible, it gives me liberty to quote the Bible as well:

"It is easier for a camel to go through the eye of a needle than for a rich man to enter the kingdom of God." Luke 18:18-30

and

For the love of money, is the root of all evil. 1 Timothy 6:10

Please know that these Bible quotes aren't to negate your Proverbs quote regarding being wise with your money so that you don't squander it all and can pass along something to your children as inheritance, but just to remind you that if you are not wise, or humbled by your good fortune, it could come back and bite ya in the rear, on your way out.

care

so god had death taxes? kindly point out death taxes in the bible....kindly point out where god does not allow your wealth to transfer to your kids....

there were many wealthy folk written about in the bible....death taxes have absoluley zero to do with god's message about money. you're essentially saying that if you are robbed and you are wealthy, let it go....

you NEVER answered my post earlier, or i didn't see your answer, regarding income taxes also being to fill the government coffers so why not eliminate those taxes as well? Why are you not fighting to eliminate income taxes that just fill the government coffers?

Christ told us to pay our taxes Yurt, are you denying such? "pay unto Ceasar, what is his''....was precisely that...telling the Pharisees that they had to pay their taxes, no matter how unfair it seemed, do you deny such as well?

Also, the 10% tithing was in essense a tax on our earnings....on our estates, never to be passed on to our children.

So, God most certainly spoke of paying our taxes due and i disagree with your ascertion that He did not, Yurt.

Care

holy cow, i missed your post...

jesus did not tell us to pay our taxes....pray tell what "is" ceasar's?
99% of your income, your wealth, your wife? what was the tax rate of ceasar? are you arguing the same tax rate?

10% had nothing to do with death....it had to do with annual wealth.

let's assume god spoke of taxes.....please point out the HOLY tax rate.....

is it 1%.....or 99%.....or 100%....

 

[Yurt]

MOST ALL of the estates affected by the taxes upon death, HAVE NEVER BEEN TAXED for their Capital Gains.

It is unfair to those who have paid their Capital gains tax during their lifetime, that these folks with a ton of money, are not taxed on their capital gains.

the Hiltons have never been taxed on their shares of the Hilton corp stock they own and made a gain on....NEVER BEEN TAXED, got it yet?

Do you all even under stand this...? They aren't being double taxed, they have NEVER BEEN TAXED on their gain....

as an example, when they went public and received 100,000 shares of Hilton stock at $10 bucks a share....never selling one share of it, and having 100,000 shares upon death, only at $100 dollars a share...there was a $9 million dollar capital gain that was NEVER taxed.

sheesh, some of you all have purposely and conveniently ignored the FACTS on this topic and continue to pass along stuff that is simply NOT TRUE.... and i would love to know WHY?

well.....if they have NEVER been taxed, what has this to do with death tax? are you saying the death tax doesn't actually work?

 

[garyd]

I see you all missed the part in his post about the fact that the current law sunsetsshortly and if cogress does nothing it will revert back to 1 million and 55% shortly. Good create a strawman and keep slapping it while ignoring the reality.

 

[Ravi]

How does this work, exactly? The government (in Care's example) keeps through taxes 10% of a 4.5 million dollar estate and the balance is taxed as income by whomever receives the inheritance?

 

[Care4all]

MOST ALL of the estates affected by the taxes upon death, HAVE NEVER BEEN TAXED for their Capital Gains.

It is unfair to those who have paid their Capital gains tax during their lifetime, that these folks with a ton of money, are not taxed on their capital gains.

the Hiltons have never been taxed on their shares of the Hilton corp stock they own and made a gain on....NEVER BEEN TAXED, got it yet?

Do you all even under stand this...? They aren't being double taxed, they have NEVER BEEN TAXED on their gain....

as an example, when they went public and received 100,000 shares of Hilton stock at $10 bucks a share....never selling one share of it, and having 100,000 shares upon death, only at $100 dollars a share...there was a $9 million dollar capital gain that was NEVER taxed.

sheesh, some of you all have purposely and conveniently ignored the FACTS on this topic and continue to pass along stuff that is simply NOT TRUE.... and i would love to know WHY?

well.....if they have NEVER been taxed, what has this to do with death tax? are you saying the death tax doesn't actually work?

Yurt,

Only a few have labeled this a "death tax" because it was a catchy little "phrase" for these billionaires lobbying to get congress to change it....

It has nothing to do with ones death, it primarily has to do with paying just a portion of the taxes that were never paid during ones lifetime because of loopholes and deferals that had been writen in to our tax code by the Congressmen lobbied by the very wealthiest over the past century.

And the so called "death tax" works perfectly fine to capture these taxes, FINALLY, upon their passing. This is still at a great advantage, to those that can or are able to fret off these taxes for some 40 years or so, because they are able to make gains upon their gains, that were never taxed....giving them a much higher return on their initial taxed investment than it would if they had been taxed on their capital gain every year they were alive, and also gives them the opportunity to donate or gift some of their money to avoid paying these taxes all together.

The $3.5 million per person, $7 million per couple, exemption from taxes, still allows them to avoid ANY TAXES at all on those amounts which is MORE than generous.

Ideally, if there were a way to tax these individuals when they were earning these gains, I would have no problem at all eliminating these estate taxes....but as it stands, with the legal loopholes and deferals, this is simply not possible without a major overhaul of our tax codes put in to place for them by our quid pro quo congressmen.

Care

 

[Ravi]

MOST ALL of the estates affected by the taxes upon death, HAVE NEVER BEEN TAXED for their Capital Gains.

It is unfair to those who have paid their Capital gains tax during their lifetime, that these folks with a ton of money, are not taxed on their capital gains.

the Hiltons have never been taxed on their shares of the Hilton corp stock they own and made a gain on....NEVER BEEN TAXED, got it yet?

Do you all even under stand this...? They aren't being double taxed, they have NEVER BEEN TAXED on their gain....

as an example, when they went public and received 100,000 shares of Hilton stock at $10 bucks a share....never selling one share of it, and having 100,000 shares upon death, only at $100 dollars a share...there was a $9 million dollar capital gain that was NEVER taxed.

sheesh, some of you all have purposely and conveniently ignored the FACTS on this topic and continue to pass along stuff that is simply NOT TRUE.... and i would love to know WHY?

well.....if they have NEVER been taxed, what has this to do with death tax? are you saying the death tax doesn't actually work?

Yurt,

Only a few have labeled this a "death tax" because it was a catchy little "phrase" for these billionaires lobbying to get congress to change it....

It has nothing to do with ones death, it primarily has to do with paying just a portion of the taxes that were never paid during ones lifetime because of loopholes and deferals that had been writen in to our tax code by the Congressmen lobbied by the very wealthiest over the past century.

And the so called "death tax" works perfectly fine to capture these taxes, FINALLY, upon their passing. This is still at a great advantage, to those that can or are able to fret off these taxes for some 40 years or so, because they are able to make gains upon their gains, that were never taxed....giving them a much higher return on their initial taxed investment than it would if they had been taxed on their capital gain every year they were alive, and also gives them the opportunity to donate or gift some of their money to avoid paying these taxes all together.

The $3.5 million per person, $7 million per couple, exemption from taxes, still allows them to avoid ANY TAXES at all on those amounts which is MORE than generous.

Ideally, if there were a way to tax these individuals when they were earning these gains, I would have no problem at all eliminating these estate taxes....but as it stands, with the legal loopholes and deferals, this is simply not possible without a major overhaul of our tax codes put in to place for them by our quid pro quo congressmen.

Care

So in other words, the government subsidizes the wealthy. This is a very amusing thread.

 

[Care4all]

How does this work, exactly? The government (in Care's example) keeps through taxes 10% of a 4.5 million dollar estate and the balance is taxed as income by whomever receives the inheritance?

I don't think so Ravi....the government, both federal and state would get/share- the $450k in taxes on the $4.5 million dollar estate and the person(s) inheriting the estate would pay NO TAXES at all on the remaining $4,050,000, is my understanding of it.

Care

 

[Ravi]

How does this work, exactly? The government (in Care's example) keeps through taxes 10% of a 4.5 million dollar estate and the balance is taxed as income by whomever receives the inheritance?

I don't think so Ravi....the government, both federal and state would get/share- the $450k in taxes on the $4.5 million dollar estate and the person(s) inheriting the estate would pay NO TAXES at all on the remaining $4,050,000, is my understanding of it.

Care

Wow, if that's true, Care, that's unbelievable. Income should be taxed no matter what its source is...the wealthy really are the most coddled class and they benefit more from the government than anyone.

 

[Care4all]

How does this work, exactly? The government (in Care's example) keeps through taxes 10% of a 4.5 million dollar estate and the balance is taxed as income by whomever receives the inheritance?

I don't think so Ravi....the government, both federal and state would get/share- the $450k in taxes on the $4.5 million dollar estate and the person(s) inheriting the estate would pay NO TAXES at all on the remaining $4,050,000, is my understanding of it.

Care

Wow, if that's true, Care, that's unbelievable. Income should be taxed no matter what its source is...the wealthy really are the most coddled class and they benefit more from the government than anyone.

Yes, they do benefit MORE Ravi, than the rest.

This is what POWER and MONEY, can buy.....favoritism.

 

[Care4all]

I see you all missed the part in his post about the fact that the current law sunsetsshortly and if cogress does nothing it will revert back to 1 million and 55% shortly. Good create a strawman and keep slapping it while ignoring the reality.

From what i have heard and read on this Gary, Congress will at minimum, extend the tax exemption of $3.5 million per person before the sunset occurs.

 

[Iriemon]

I see you all missed the part in his post about the fact that the current law sunsetsshortly and if cogress does nothing it will revert back to 1 million and 55% shortly. Good create a strawman and keep slapping it while ignoring the reality.

The OP asked whether the estate tax could be defended. I don't see the straw man.

 

[editec]

"The evidence presented indicates that intergenerational transfers account for the vast majority of aggregate U.S. capital formation." - Obama's own top economic advisor, Larry Summers

The government will not get a dime of my money when I pass. I have and will take the proper steps to ensure this is the case.

I am a financial planner. I know the answer to this question. I deal with customers nearly every day who ask me the same thing.

And I show them how to make sure they don't lose a dime.

The death tax is wrong. People work hard for their money and should be able to pass it on to their family (or anyone) without fear of the government taking it.

(oh...an gezztoo, you know how stupid you sound - you don't know a thing about me)

I believe there is a minimum before they start taxing, I don't know what it is now, but about 20 years ago, it was $200,000. Seemed like a lot back then.

There is. 3.5 million (although today there is a bill that increases that to 5).

The Lincoln-Kyl amendment would raise the death tax exemption to $5 million per individual and $10 million per couple, indexed for inflation. Under this amendment, the maximum tax rate is reduced to 35%. Currently, estates valued at more than $3.5 million, or $7 million for a couple, are taxed at a 45% rate. President Obama has proposed freezing it at this level so it can be dealt with at a later date. But if Congress doesn’t act to freeze or reduce the estate tax, in 2011, it will revert to a staggering 55% tax on estates worth only $1 million or more.

No, estates of over $7 million are NOT Taxed at a rate of 45%

The amount OVER the first TAX FREE $ 7 million are taxed at a rate of 45% perhaps.

BIG DIFFERENCE, don't you think.

Say you inherit $10,000,000

You are taxed $1,350,000 on that $10,000,000

That's a 13.5% total tax burden.

What? You say you can't get by with only $8,650,000?

Ah!..poor babies.

You can't make ends meet when you start our with an amount that is equivalent to 151 YEARS (tax free) of the average American FAMILY incomes (which ARE taxed)?!!

Hey, perhaps you need to get your spending into line, then.

 

[Old Rocks]

Susan Dunn
August 9, 1999

WILLIAMSTOWN, MASS. – When Theodore Roosevelt demanded that Congress pass a steeply graduated inheritance tax in 1906, he was proposing the one bill that members of his own patrician class feared most. In attacking what they cherished - not just their money but also their sense of entitlement and superiority - he was challenging the class system, not the capitalist system, turning the upper-class world upside down. As far as these plutocrats were concerned, T.R. had betrayed his own class to the point of no return.

As Republicans today seek an end to the inheritance tax, they are
betraying the legacy of their great Republican President.

Roosevelt, the Oyster Bay patrician who used his inheritance to lead a
life of public service rather than a life of leisure, always believed that
the transmission of enormous wealth to young men ``does not do them any real service and is of great and genuine detriment to the community at large.''

What really mattered, he felt, was to have a national community based on citizens' political equality, relative economic equality and interdependence. For Roosevelt, the inheritance tax was a moral issue as well as an economic one.

``If ever our people become so sordid as to feel that all that counts is
moneyed prosperity, ignoble well-being, effortless ease and comfort,'' he warned, ``then this nation shall perish, as it will deserve to perish,
from the earth.'' Wealth, he declared, should only be ``the foundation on which to build the real life, the life of spiritual and moral effort and
achievement.''
Susan Dunn/Teddy Roosevelt Betrayed

 

[Old Rocks]

A growing body of evidence suggests that the meritocratic ideal is in trouble in America. Income inequality is growing to levels not seen since the Gilded Age, around the 1880s. But social mobility is not increasing at anything like the same pace: would-be Horatio Algers are finding it no easier to climb from rags to riches, while the children of the privileged have a greater chance of staying at the top of the social heap. The United States risks calcifying into a European-style class-based society.

The past couple of decades have seen a huge increase in inequality in America [mjh: hmmm, starting with Raygun]. The Economic Policy Institute, a Washington think-tank, argues that between 1979 and 2000 the real income of households in the lowest fifth (the bottom 20% of earners) grew by 6.4%, while that of households in the top fifth grew by 70%. The family income of the top 1% grew by 184%—and that of the top 0.1% or 0.01% grew even faster. Back in 1979 the average income of the top 1% was 133 times that of the bottom 20%; by 2000 the income of the top 1% had risen to 189 times that of the bottom fifth.

Thirty years ago the average real annual compensation of the top 100 chief executives was $1.3m: 39 times the pay of the average worker. Today it is $37.5m: over 1,000 times the pay of the average worker. In 2001 the top 1% of households earned 20% of all income and held 33.4% of all net worth. Not since pre-Depression days has the top 1% taken such a big whack.
http://www.edgewiseblog.com/mjh/nad...nes-would-ruin-the-character-of-the-republic/