Here is the source I’m basing this on – a Bloomberg story about one method Romney and other wealthy people avoid gift and estate taxes. It’s based on some old information, though still relevant in light of the controversy over Mitt’s taxes. Also, I hadn’t seen the quote before that pissed me off enough to write a thread about it.
According to the story, Romney’s campaign put out a paper last year that said Federal estate taxes "… creates a series of perverse incentives that encourages the most complicated and convoluted tax-avoidance schemes at tremendous cost to all involved.” Is there any other way to parse this? I read it as – “these taxes are hard to avoid without hiring a battery of attorneys and accountants.”
But worth it, apparently – so the lawyers and accountants cost less than the money he would pay in taxes. So he comes out ahead anyway.
It’s not enough for Mitt. Just think how much MORE money he would have if he didn’t have to pay all the tax pros because there was no tax to dodge.
Death taxes are reprehensible for lots of reasons, but yes, this is one of them. They are avoidable for those savvy enough to hire lawyers and accountants to dodge them. They basically end up as a special tax for the unprepared.
Sadly, even among those with money, many seniors lack the ability to prepare their estates to avoid the taxes. They suffer from dementia, lack family to help them, or don’t trust lawyers and accountants.
This isn’t the best reason to get rid of the death tax, but it’s good enough.
I briefly worked for a bank in their insurance trust fund department.
The rich have always known about Crummey Trusts - a nice way to squirrel away funds for family members that is essentially tax free. Yes, there are annual limits to how much you can invest, but over time it adds up really, really fast.
If you have an estate large enough to pay federal estate taxes, you almost certainly already have a lawyer, because you are a millionaire. The first million dollars of your estate is exempt from the estate tax.
The problem is that unlike many schemes to avoid other taxes, most of the ways people avoid estate taxes can’t really be closed. What it comes down to is giving away your wealth before you die and doing it in a way that doesn’t incur other taxes along the way. How do you stop that entirely? $0 gift tax exclusion?
I don`t know much about people with hundreds of millions of dollars. Maybe the ultra rich use schemes and loopholes that could be closed, but for people with several million it’s just not that hard with planning.
Whenever estate taxes come up I think back to Al Franken’s joke, that the Estate Tax is reprehensible because it places a terrible burden on society *most *productive members, the children of the extremely wealthy.
Good point. Of course, we’re getting SOME revenue from estate taxes, so it isn’t like everybody is able to avoid it altogether. And the revenue is non-trivial, so I don’t think Mitt makes much of a case to eliminate it.
This gets right to the heart of the matter with death taxes. You consider it a windfall. I consider it the most basic of our human rights to pass along what we create to our children. What’s the point of building a business or a farm or building or accumulating anything of value if it just gets snatched away from you when you die and your heirs need to start over from scratch.
It’s like suggesting we tear up the interstate highway system since most of us weren’t alive when it was built so we didn’t properly earn it.
Really? This actually happens? I was not aware that the estate tax was 100% of “anything of value” you wanted to pass onto your heirs. I was not aware that the estate tax meant that your heirs will need to “start over from scratch.” As soon as you show me a cite for this, I will certainly change my mind.
More than life, liberty, and the purfuit of happineff, or anything else? Really? BTW, you don’t have any rights after you’re dead anyway.
The tax is on windfall income, as you certainly know. Income being received by people who did nothing to earn it. And whose expectations of receiving it, along with the fact of actually receiving it, serve only to give them a sense of entitlement and arrogance to go with induced laziness. Why the hell would it be a basic human right to make your offspring into useless, lazy little shits? Why the hell would you want to do that? Isn’t a mere million enough to cause that to happen as it is?
Give it all to charity. Let your kids actually *learn *what the Republicans love to preach to others about the value of hard work and acceptance of personal responsibility. O is that sermon only for people you aren’t related to?
There are exactly zero cases of that happening out here in the real world. And the GOP “death tax” zealots have tried to find one, oh, how they’ve tried. So you might want to reconsider that statement.
Yes, “good enough” = “sufficient”. The part where you mischaracterize both my and Romney’s position is stating the reason as “saving millionaires the time and expense of avoiding it.”
This is a laughable strawman, and I find it hard to imagine that you can’t see that.
As I stated in my first post to the thread, the one reason alone that it’s worth eliminating the death tax is “They are avoidable for those savvy enough to hire lawyers and accountants to dodge them. They basically end up as a special tax for the unprepared.”
It’s the unfairness, and general stupidity of a tax that most people avoid is what I’m claiming is enough of a reason to cancel it.
As to Romney, here is his full position on the issue…