Federal "Death Tax" Affects 5,500 Estates

[chanel]

My curiosity is piqued. Do you have a link?

I'm not pretending to understand this, but I may be calling an estate lawyer next week.

Yeah, but in the previous link the WSJ says that if congress doesn't do anything, then the estate tax goes away.

Elimination of the levy on big inheritances was approved by Congress under President George W. Bush in 2001, with rollbacks phased in slowly and its full elimination slated to take effect next year.

Lawrence Summers, President Obama's chief economic adviser, declared recently that "Let's be very clear: There are no, no tax increases this year. There are no, no tax increases next year." Oh yes, yes, there are. The President's budget calls for the largest increase in the death tax in U.S. history in 2010.

The announcement of this tax increase is buried in footnote 1 on page 127 of the President's budget. That note reads: "The estate tax is maintained at its 2009 parameters." This means the death tax won't fall to zero next year as scheduled under current law, but estates will be taxed instead at up to 45%, with an exemption level of $3.5 million (or $7 million for a couple). Better not plan on dying next year after all.

Barack Obama's Budget Quietly Resurrects the Death Tax for 2010 - WSJ.com

 

[The Rabbi]

It is important to this people to grapple with the problems connected with the amassing of enormous fortunes, and the use of those fortunes, both corporate and individual, in business. We should discriminate in the sharpest way between fortunes well-won and fortunes ill-won; between those gained as an incident to performing great services to the community as a whole, and those gained in evil fashion by keeping just within the limits of mere law-honesty.

Could you give an example of "fortunes well-won"??

 

[RadiomanATL]

I'm not pretending to understand this, but I may be calling an estate lawyer next week.

Yeah, but in the previous link the WSJ says that if congress doesn't do anything, then the estate tax goes away.

Elimination of the levy on big inheritances was approved by Congress under President George W. Bush in 2001, with rollbacks phased in slowly and its full elimination slated to take effect next year.

Lawrence Summers, President Obama's chief economic adviser, declared recently that "Let's be very clear: There are no, no tax increases this year. There are no, no tax increases next year." Oh yes, yes, there are. The President's budget calls for the largest increase in the death tax in U.S. history in 2010.

The announcement of this tax increase is buried in footnote 1 on page 127 of the President's budget. That note reads: "The estate tax is maintained at its 2009 parameters." This means the death tax won't fall to zero next year as scheduled under current law, but estates will be taxed instead at up to 45%, with an exemption level of $3.5 million (or $7 million for a couple). Better not plan on dying next year after all.

Barack Obama's Budget Quietly Resurrects the Death Tax for 2010 - WSJ.com

Yeah, but keeping taxes at current levels is not a tax increase. Nor is it dropping it to only $1M exemption.

 

[xsited1]

Out of about 2.5 million Americans who die every year, 5,500 estates will pay the federal estate tax, though more will pay a state estate tax. That is 2.2 estates out of every 1,000 who die.

This year, the federal exemption rose to $3.5 million per individual, or as much as $7 million per married couple. At the current level, only 5,500 estates a year are federally taxable.

That is down from the 17,500 estates that would have faced death taxes under the previous $2 million limit, the Urban-Brookings Tax Policy Center estimates.

State Death Taxes Are the Latest Worry - WSJ.com

Yet another example of more government infringement on the rights of citizens. Thanks for the information. The road to serfdom continues to march on unabated.

 

[chanel]

Ok. Let's say that next year it was supposed to be zero. But instead it's 45%. Isn't that an increase? And if the exemption amount is lowered, isn't that an increase? I'm not following your math.

 

[editec]

Yeah I have a lot of sympathy for people whining about having to pay taxes on aything OVER the TWO DECADES worth of median family incomes (before TAXES) they might have to pay.

My heart just totally bleeds for those whining trust funding assholes.

Those rich scions have class envy.

they envy those of us who cannot leave our children over $5,000,000 TAX FREE.

I have a solution for them, just so they have nothing to envy about the rest of us, but none of them EVER want to take it.

Wonder why?

Oh yeah! that's right, because they won't want to not be fabulously wealthy for doing NOTHING except being born. The world owes them a living doesn't it?

They don't want to have to WORK to earn their daily bread, like the rest of us have to.

You feel sorry for these whining scions, do ya?

How much will YOU get when your daddy dies, exactly?

 

[RadiomanATL]

Ok. Let's say that next year it was supposed to be zero. But instead it's 45%. Isn't that an increase?

No, because it never actually went to zero. In order for it to be an increase it must be more than they are currently paying. They are currently paying 45%, so keeping it at 45% isn't an increase.

And if the exemption amount is lowered, isn't that an increase? I'm not following your math.

Yes, if the exemption amount is lowered, that would be an increase. But that isn't what is being proposed or passed from what I can see so far.

 

[chanel]

The exclusion amount in the period 2007-2008 is $2 million. In 2009 the amount will be $3.5 million. In the 2010 there is no tax, but in 2011 the exclusion amount is scheduled to be $1 million with a tax rate of 55%.

The State of New Jersey imposes an estate tax if the value of a decedent’s taxable estate exceeds $675,000.00. This is not scheduled to change; there is no plan for the elimination of New Jersey estate taxes. Although your estate may pay no Federal estate tax, your estate may have a New Jersey estate liability. The need for estate tax planning is not diminished, in fact, if reduction of estate taxes is a concern, planning is even more important. Assuming the taxable estate value is $700,000.00 the estate will pay $18,000.00 to the State of New Jersey. If the estate is valued at $1,600,000.00, the estate will pay the State of New Jersey about $70,800.00. A $3.6m estate will pay $238,800.00

DEATH TAX PLANNING IN NEW JERSEY | New Jersey Lawyers Blog

It's double taxation. Our income has been taxed. Our real estate has been taxed. Our investments have been taxed. Why should the govt. be allowed to take our children's inheritance? My house is bought and paid for - honestly. It belongs to our children when we die. Why should they go into debt to pay for what is rightfully theirs?

BTW -

* April 13th, 2009 at 9.29am in Entitlements.

The Tax Foundation released its “2009 Survey of U.S. Attitudes on Taxes, Government Spending and Wealth Distribution” yesterday.

Some interesting findings include:

* 56 percent of respondents think taxes are too high;
* Only 14 percent are willing to pay more than $10,000 a year in total taxes for the government services they receive from all level of governments—federal, state and local;
* 34 percent prefer decreased government services and lower taxes, 36 percent want services and taxes to stay the same, only 10 percent want more services and higher taxes;
* 44 percent would exchange their federal tax deductions, such as for home mortgage interest, for a cut in their income tax rate; and
* 67 percent favor killing the death tax.

Survey Says…Taxes too High, Kill the Death Tax » The Foundry

 

[RadiomanATL]

The exclusion amount in the period 2007-2008 is $2 million. In 2009 the amount will be $3.5 million. In the 2010 there is no tax, but in 2011 the exclusion amount is scheduled to be $1 million with a tax rate of 55%.

I see that. But the WSJ articles are directly contradicting that.

Which one is correct?

 

[Care4all]

in bold, my highlights...

It obviously is class envy, as your quotation proves.
Here:

With the enactment of the Income Tax Law of 1913, the Federal Government began to apply effectively the widely accepted principle that taxes should be levied in proportion to ability to pay and in proportion to the benefits received. Income was wisely chosen as the measure of benefits and of ability to pay. This was, and still is, a wholesome guide for national policy. It should be retained as the governing principle of Federal taxation. The use of other forms of taxes is often justifiable, particularly for temporary periods; but taxation according to income is the most effective instrument yet devised to obtain just contribution from those best able to bear it and to avoid placing onerous burdens upon the mass of our people.

Note that INCOME is considered the right thing to tax. Never mind that it isn't, that taxing income discourages its formation. But we'll let that slide.
Now on to inheritance:

ummmm, yes, it is an INCOME TAX.....that was established long before fdr and ALL thought it was JUST....to be taxed according to your ability to pay....this was not considered UNJUST, but JUST.

I My first proposal, in line with this broad policy, has to do with inheritances and gifts. The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.

The desire to provide security for oneself and one's family is natural and wholesome, but it is adequately served by a reasonable inheritance. Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.

Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.

Note that the tax is not justified as a means to raise revenue. It is not justified as anything other than a desire to stick it to people who have become wealthy through their own hard work and desire, naturally, to leave it to their children.
In any case, nature takes its toll on inherited wealth. Look at the great fortunes that were around in 1900 and see where they are now. Go back to 1800 and the numbers are even starker.
There is no "vast transfer of fortune from generation to generation." This is a lie.

no, it does not say this at all....it explains that this wealth is wealth that the masses GAVE the person who massed it, through their working for them or producing for them or through buying their products and through laws (the gvt) made to protect them...

you can not have the wealthy, without the masses to make them wealthy.

it is not a desire to stick it to the wealthy, it is a desire to keep America from being run by the very elite few, and it is to keep america strong by haveing a strong middle class that can buy the rich dude's products.... it is a win win.

It was already established that these taxes were needed to help fund the gvt, this was justification of such by fdr and others in the ways and means committee...

fdr wanted an inheritance tax, this is what he spoke of....he DID NOT get his wish, but the estate tax was reestablished....

 

[Oddball]

Yeah I have a lot of sympathy for people whining about having to pay taxes on aything OVER the TWO DECADES worth of median family incomes (before TAXES) they might have to pay.

My heart just totally bleeds for those whining trust funding assholes.

Those rich scions have class envy.

they envy those of us who cannot leave our children over $5,000,000 TAX FREE.

I have a solution for them, just so they have nothing to envy about the rest of us, but none of them EVER want to take it.

Wonder why?

Oh yeah! that's right, because they won't want to not be fabulously wealthy for doing NOTHING except being born. The world owes them a living doesn't it?

They don't want to have to WORK to earn their daily bread, like the rest of us have to.

You feel sorry for these whining scions, do ya?

How much will YOU get when your daddy dies, exactly?

Perfect.

Make it all about how much they have to distract from the fact that this is nothing more than grave robbing.

 

[editec]

Honestly I so do't get it

Even $1,000,000 is about TWENTY YEARS woth of the median family's PRETAXED incomes.

If they change from the current $3,500,000 TX FREE rates we have now(what's that about 70 times the median pretaxed family incomes?) to a merely $1,000,000 TAX FREE lum sum, are these scions going to SUFFER?

*Assume they pay 55% o anythig over 1 Million, and the estate is $3.5 million...they still have $2,125,000 TAX FREE to get by.

FYI that's about 42 years of the pretaxed icomes of the median family's income, folks

We have REAL victims of this system to worry about.

The bleedin scions of the stupendously wealthy just aren't people I think we need to worry too much about.

They can take their $2.125 MILLION TAX FREE dollars and they can find someplace where there are no taxes to worry about.

I suggest they start in Somalia where taxation isn't such a problem.

 

[xsited1]

in bold, my highlights...

It obviously is class envy, as your quotation proves.
Here:

With the enactment of the Income Tax Law of 1913, the Federal Government began to apply effectively the widely accepted principle that taxes should be levied in proportion to ability to pay and in proportion to the benefits received. Income was wisely chosen as the measure of benefits and of ability to pay. This was, and still is, a wholesome guide for national policy. It should be retained as the governing principle of Federal taxation. The use of other forms of taxes is often justifiable, particularly for temporary periods; but taxation according to income is the most effective instrument yet devised to obtain just contribution from those best able to bear it and to avoid placing onerous burdens upon the mass of our people.

Note that INCOME is considered the right thing to tax. Never mind that it isn't, that taxing income discourages its formation. But we'll let that slide.
Now on to inheritance:

ummmm, yes, it is an INCOME TAX.....that was established long before fdr and ALL thought it was JUST....to be taxed according to your ability to pay....this was not considered UNJUST, but JUST.

I My first proposal, in line with this broad policy, has to do with inheritances and gifts. The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.

The desire to provide security for oneself and one's family is natural and wholesome, but it is adequately served by a reasonable inheritance. Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.

Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.

Note that the tax is not justified as a means to raise revenue. It is not justified as anything other than a desire to stick it to people who have become wealthy through their own hard work and desire, naturally, to leave it to their children.
In any case, nature takes its toll on inherited wealth. Look at the great fortunes that were around in 1900 and see where they are now. Go back to 1800 and the numbers are even starker.
There is no "vast transfer of fortune from generation to generation." This is a lie.

no, it does not say this at all....it explains that this wealth is wealth that the masses GAVE the person who massed it, through their working for them or producing for them or through buying their products and through laws (the gvt) made to protect them...

you can not have the wealthy, without the masses to make them wealthy.

it is not a desire to stick it to the wealthy, it is a desire to keep America from being run by the very elite few, and it is to keep america strong by haveing a strong middle class that can buy the rich dude's products.... it is a win win.

It was already established that these taxes were needed to help fund the gvt, this was justification of such by fdr and others in the ways and means committee...

fdr wanted an inheritance tax, this is what he spoke of....he DID NOT get his wish, but the estate tax was reestablished....

Oh my. A belief in Collectivism will do this to people. I always like the Tenth Commandment:

"Thou shalt not covet thy neighbor's house, thou shalt not covert thy neighbor's wife, nor his manservant, nor his maidservant, nor his ox, nor his ass, nor anything that is thy neighbor's."

The tenth commandment sends a message to collectivists, to people who believe wealth is best obtained by redistribution.

 

[Oddball]

Honestly I so do't get it

Even $1,000,000 is about TWENTY YEARS woth of the median family's PRETAXED incomes.

If they change from the current $3,500,000 TX FREE rates we have now(what's that about 35 times the median pretaxed family incomes?) to a merely $1,000,000 TAX FREE lum sum, are these scions going to SUFFER?

I have REAL victims of this system to worry about.

The bleedin scions of the stupendously wealthy aren't on my radar of people who need my concerns.

So what?

Why is it they should pay anything, especially considering that they've already paid taxes two and three times for their possessions?

 

[RadiomanATL]

Honestly I so do't get it

Even $1,000,000 is about TWENTY YEARS woth of the median family's PRETAXED incomes.

If they change from the current $3,500,000 TX FREE rates we have now(what's that about 35 times the median pretaxed family incomes?) to a merely $1,000,000 TAX FREE lum sum, are these scions going to SUFFER?

I have REAL victims of this system to worry about.

The bleedin scions of the stupendously wealthy aren't on my radar of people who need my concerns.

Is it income or assets?

 

[editec]

Yeah I have a lot of sympathy for people whining about having to pay taxes on aything OVER the TWO DECADES worth of median family incomes (before TAXES) they might have to pay.

My heart just totally bleeds for those whining trust funding assholes.

Those rich scions have class envy.

they envy those of us who cannot leave our children over $5,000,000 TAX FREE.

I have a solution for them, just so they have nothing to envy about the rest of us, but none of them EVER want to take it.

Wonder why?

Oh yeah! that's right, because they won't want to not be fabulously wealthy for doing NOTHING except being born. The world owes them a living doesn't it?

They don't want to have to WORK to earn their daily bread, like the rest of us have to.

You feel sorry for these whining scions, do ya?

How much will YOU get when your daddy dies, exactly?

Perfect.

Make it all about how much they have to distract from the fact that this is nothing more than grave robbing.

Yeah IU know...and all taxatio is theft, too, right?

Poor little rich kid.

Spare me, okay?

If you can't make it in America with $1,000,000 TAX FREE to start out then honestly... you don't dDESERVE to be in charge of great wealth to begin with.

 

[editec]

Honestly I so do't get it

Even $1,000,000 is about TWENTY YEARS woth of the median family's PRETAXED incomes.

If they change from the current $3,500,000 TX FREE rates we have now(what's that about 35 times the median pretaxed family incomes?) to a merely $1,000,000 TAX FREE lum sum, are these scions going to SUFFER?

I have REAL victims of this system to worry about.

The bleedin scions of the stupendously wealthy aren't on my radar of people who need my concerns.

So what?

Why is it they should pay anything, especially considering that they've already paid taxes two and three times for their possessions?

No Dude, THEY have't paid jackshit.

They are going to inherit money that they didn't pay a freakin cent in taxes on.


You expect working people to CARE about those poor rich kids, do ya'?

Here's a clue, most of us don't.

No more than their daddies cared about our kids when they were alive.

Pay your taxes and stop whining, kid.

Or move to someplace where you don't have to pay taxes.

Then you can keep every cent daddy your leaves ya.

 

[Oddball]

Yeah IU know...and all taxatio is theft, too, right?

Poor little rich kid.

Spare me, okay?

If you can't make it in America with $1,000,000 TAX FREE to start out then honestly... you don't dDESERVE to be in charge of great wealth to begin with.

Never said all taxation is theft. There are some legit taxes that pay for legit functions. This isn't one of them.

Your class envy and situational ethos are glaringly evident here.

 

[The Rabbi]

in bold, my highlights...

It obviously is class envy, as your quotation proves.
Here:

With the enactment of the Income Tax Law of 1913, the Federal Government began to apply effectively the widely accepted principle that taxes should be levied in proportion to ability to pay and in proportion to the benefits received. Income was wisely chosen as the measure of benefits and of ability to pay. This was, and still is, a wholesome guide for national policy. It should be retained as the governing principle of Federal taxation. The use of other forms of taxes is often justifiable, particularly for temporary periods; but taxation according to income is the most effective instrument yet devised to obtain just contribution from those best able to bear it and to avoid placing onerous burdens upon the mass of our people.

Note that INCOME is considered the right thing to tax. Never mind that it isn't, that taxing income discourages its formation. But we'll let that slide.
Now on to inheritance:

ummmm, yes, it is an INCOME TAX.....that was established long before fdr and ALL thought it was JUST....to be taxed according to your ability to pay....this was not considered UNJUST, but JUST.

I My first proposal, in line with this broad policy, has to do with inheritances and gifts. The transmission from generation to generation of vast fortunes by will, inheritance, or gift is not consistent with the ideals and sentiments of the American people.

The desire to provide security for oneself and one's family is natural and wholesome, but it is adequately served by a reasonable inheritance. Great accumulations of wealth cannot be justified on the basis of personal and family security. In the last analysis such accumulations amount to the perpetuation of great and undesirable concentration of control in a relatively few individuals over the employment and welfare of many, many others.

Such inherited economic power is as inconsistent with the ideals of this generation as inherited political power was inconsistent with the ideals of the generation which established our Government.

Note that the tax is not justified as a means to raise revenue. It is not justified as anything other than a desire to stick it to people who have become wealthy through their own hard work and desire, naturally, to leave it to their children.
In any case, nature takes its toll on inherited wealth. Look at the great fortunes that were around in 1900 and see where they are now. Go back to 1800 and the numbers are even starker.
There is no "vast transfer of fortune from generation to generation." This is a lie.

no, it does not say this at all....it explains that this wealth is wealth that the masses GAVE the person who massed it, through their working for them or producing for them or through buying their products and through laws (the gvt) made to protect them...

you can not have the wealthy, without the masses to make them wealthy.

it is not a desire to stick it to the wealthy, it is a desire to keep America from being run by the very elite few, and it is to keep america strong by haveing a strong middle class that can buy the rich dude's products.... it is a win win.

It was already established that these taxes were needed to help fund the gvt, this was justification of such by fdr and others in the ways and means committee...

fdr wanted an inheritance tax, this is what he spoke of....he DID NOT get his wish, but the estate tax was reestablished....

Wow I didnt realize you were a communist.
The masses, eh?
Let's start with, no one engages in private transactions unless he feels he will be bettered by it.
That's pretty elemental.
So for every dollar earned by some entrepreneur, his customer also got something from the transaction. So there is no "masses making wealth for people". It is an absurd claim. It is straight out of college dorm marxism.
People amass wealth in all kinds of ways, almost all of them through legitimate business enterprises. There is no claim the gov't or society can have on that wealth. As income it was alrready taxed in the year it was earned.
And agian, you missed the point about income tax. The quotation states that income is the proper thing to tax. But obviously an inheritance tax is not an income tax but a tax on assets. So it is not a proper thing to tax, based on the quotation itself. Thus the only reason for it is to stick it to people who have worked hard and been successful.
There is no large amount of inherited wealth in this country. Fortunes tend to dissipate pretty quickly.
That leaves class envy as the only reason why this stinker is still around.

 

[RadiomanATL]

You expect working people to CARE about those poor rich kids, do ya'?

*does the math between average lifespan and average age when someone has children*


A ~50 year old is a "kid"?