Consider this extremist rant, from a major party endorsed candidate for elective office, no less:
The context in which this debate is occurring in one in which everyone’s income is taxed. Whether or not you have the absolute property right to every penny you earn is a moot point. The question is, whose income should be taxed and who should get a tax cut. Why should folks who work hard every day for a few hundred dollars a week be denied a tax cut while rich kids who inherit millions of dollars get that windfall tax free?
And all this mindless caterwalling about communism, slavery, and death camps is definitely not helpful. How is it that being reasonable has become such a foreign concept?
How about we get just treat gifts and inheritances as ordinary income, subject to the income tax INSTEAD of the gift/estate tax?
This would close the loophole of people who get paid to perform services for others, then claim that the people giving them the money were just friends giving them gifts (thus bypassing the income tax).
another problem with the whole estate tax that everybody seems to be ignoring:
most of the income that normally would be taxed is put into tax shelters (not necessarily the real definition of a tax shelter- i don’t know what this is, and i don’t know the phrase i’m searching for). what i mean is that the very wealthy (or those with good tax advisors) find ways around getting their income taxed in the first place. then they are able to divert it into locations that the average person doesn’t have access to.
the estate tax is a way of getting the rightful taxes out of income that wasn’t taxed in the first place.
it is definitely not taxation without representation. the people who’s estates are taxed had more than adequate representation when they were alive.
it seems that that argument,as with many others in this debate (farms that get lost) are smoke screens and red herrings.
So what are those “shelters” that rich people use to hide their money? I’ve seen a couple of people on this board hint at this, but no one has backed it up. I think it’s a popular myth. There used to be many tax shelters, but they were pretty much wiped out by the Tax Complification Act of 1986. A few might have crept back in, but they’re exceptional. By the way, these shelters were really manifestations of our congress trying to support “worthy” goals such as renewable energy, by exempting money that you invested in those areas. But they’re not around anymore.
The idea that the estate tax is “getting the rightful taxes out of income that wasn’t taxed in the first place” is ludicrous.
This will be unpopular, so what?
The money in an estate has already been taxed.
I earned it–I paid income tax on it.
I put some in a savings account–tax on the interest.
I bought a house with what was left–property tax.
etc. etc.
Now I’m filling out a will for what is left. If I earned it I think it should go where I think it should go.
And feeding the government is not one area I think this already multi-taxed estate should go.
The government has already gotten it’s bite of the apple several times.
The estate tax is a jealous tax. And it’s not even a tax on my jelousy.
If we want a real egalitarian (but not socialist) society, one thing that has to be done to fix the estate tax. First we set the estate tax exemption fairly high, say a couple of million or so. That’s really not enough to live off of in any kind of luxury for any length of time and, besides, who doesn’t love an entry-level millionaire? Above the exemption level, however, the tax is 100%. Maybe we can also exempt small businesses.
Of course, there are major practial problems wih this. I’m sure there are a million of unclosable loopholes that would prevent that from being effective. What do you do with Uncle Pennybag’s $50 million in GE stock? Does the government confiscate it? (NO.) Does the government sell it? (Probably no.) Then again, I’m no accountant. Maybe there’s a simple answer that I’m missing.
I don’t think that it is a jealous tax nor unfair. What would be the benefits of taxing the living instead of the dead? Also, I rarely envy the dead. I would consider it a warning sign.
But I don’t think that you can argue your postition without considering SarumanRex’s viewpoint that the tax is not on the deceased but rather on the heirs.
I must say that I find tracer’s income tax proposal tempting. The problem that I see in all this is that women tend to outlive men. I wouldn’t want to see widows and widowers left destitute by a comprehensive tax.
How about the portion of the estate that comes from appreciation of real property or tax-deferred contributions to retirement plans which you don’t collect before death? No tax was ever paid on those. And I bet that appreciation in the value of real property is a significant portion of a great many estates.
No, if that’s what someone wants to do with their money, that’s fine. I would actually classify anyone advocating that the government confiscate all property beyond burial expenses as “beyond all reason” on this issue. “Beyond all reason” can be used to describe someone insane, but it might also be used to describe someone who is a hopeless twit with silly ideas currently suffering from a severe case of cranio-rectal syndrome.
Having just posted a quick rejoinder to 2sense in a surge of anger at the subfective/moron comment, and having just reread his post a wee bit more carefully, I now invite you to all to witness the spectacle of my crow dinner just as soon as I figure out how to get my foot out of my mouth, which will be accomplished after removing my head from where I accused 2sense of having his.
Sorry 2sense. I know the answer to this one. Read twice before posting.
IIRC, Andrew Carnegie once proposed a 100% voluntary inheritance “tax” in which all of one’s estate would be given to charity.
He was also denounced as a “red” but answered no, this proposal was pure capitalism. No leg up for the next generation, the new “captains of industry” in his mind would thus start (like him) from nothing but hard work.
Carnegie was the child of political refugees - his father was forced to flee from Scotland in the 1840’s for advocating such treasons as one man, one vote.
Carnegie was at one time the world’s richest man, developed primarily from his early recognition of the superiority of steel over cast iron. During his lifetime he gave away an estimated $381 MM (billions in today’s dollars).
my father has a hunting camp and a small business. If he dies, I will have to sell everything to pay the tax. IT is not a smokescreen. It is a reality. The family business has to be sold.
I plan on having a business too, which my heirs would have to sell unless they have oodles of cash.
I would like to turn the question around: why is it OK to take a large portion of one’s wealth merely because they died.
Mr Z, Is your Fathers estate worth more than 4 million dollars? Do you expect him to die soon? Is your mother still alive? Unless the answers are Yes, yes, and no, you will likely NOT have to “sell everything” to pay your estate tax. You may pay no estate tax at all. However, if your fathers estate is over 1million, it IS time for 'estate planning", with a good CPA and/or Attorney. Despite our disagreement here, please take this in all good faith as solid (free) advice from A tax professional.
As I posted before, RIA (one of the big 2 tax publication cos) has said that with the kind of planning you can do yourself, with a good book, and simple forms, you can avoid any taxes on an estate up to about 1.3M, and with good planning and professional help, avoid taxes on an estate up to around 4M. Of, course, if you live in a community prop state, your mom owns half of everything, thus that half will not be part of your Dads estate, so then, it could be up to 8M, without taxes.
HArd to tell. Probably around $1mm. But as I said, my dad is nuts and he never ever ever let me or my mom know what anything was worth or what he had saved. It could be a lot more than than. HE was always squirreling away gold and cash. But the business is the big ticket item. I can’t even guesss at the value because I never saw a book.
mr zambezi, i’m not trying to jump on your back. hell, if my dad has a big inheritance for me, i’m not gonna turn that down. but do you feel as if you have some sort of right to this inheritence? it’s a question that’s kindof been hinted at in a lot of the posts, but i don’t think ever asked directly.
I think the question is: who has the greater right to it, me or some people he never met. If His only heir has not right to it, then why should anyone else?
But yes, I worked in his store without pay for 18 years, promoted it, spent hundereds of hours in it’s care, management and upkeep. So yes, I think I have some stake in it. And certainly more of a stake than a welfare recipient, ordinary citizen, law officer, member of the military, or politician.
A family is a single economic unit that can be viewed very much like a business. Everyone in that family (hopefully) works for the greater good of that “business”. Just as a spouse is entitled to a portion of the assets of that business upon its dissolution (read divorce) to represent their position in that “business”, the heirs also deserve a piece of the pie.
How would business react if upon the death or retirement of a CEO, all assets are taxed by the government. It seems to follow the same logic. That CEO is the one who marshalled the resources, made the decisions, and fought the good fights to get the company where it is today. What right does the company/employees have to hold onto those resources after said CEOs departure. Every right. They are equally a part of the economic unit known as the business, just as family members are equally a part of that economic unit known as the family. There is no difference, and there should be no difference in the way the unholy IRS treats the situation.