It seems that the very people whose estates would benefit the most from the reduction or repeal of the estate tax are in favor of the law staying as it is. Read the article here for their reasons.
First of all, didn’t this article come out of Great Britan? Show me an American article saying this.
Second, just because those few folks are opposed to it doesn’t mean that the majority in this country are. And as for those few people signing the petition, the only thing worse than a liberal is a rich liberal.
Within the next 14 years I estimate my estate to be worth close to 700K!! If certain relatives die during that time I’ll be worth even more, especially in real estate. I back cutting the estate tax, as does my family. Cutting the tax would benefit them after my demise. Thanks to 401k plans and higher real estate costs, it won’t be long before a lot of people will be worth more than $675,000. The estate tax is unfair and should be eliminated.
The article is encouraging – I hope this gets more coverage in the U.S. Unfortunately these more enlightened individuals probably represent just a small percentage of the rich on this issue.
I can’t think of anything more cynical than Bush’s big candy-grab for the rich.
If the big shots are so worried, why don’t they throw the little guy a bone and advocate dismissal of all taxes upon estates worth less than a few million sheckels. Joe Public would get the relief and the upper tier would still get the hit (not that they don’t weasle out of it half the time).
Plan on dying before 2006? By then, the exemption amount will have increased to a cool million, and will thereafter continue to increase in line with inflation… And there are plenty of ways to minimize your tax liability; talk to an estate planner.
I’ll wager that Bush won’t have the votes for a repeal, but can probably get away with another scheduled raise of the exemption amount to $2 million. Look for it in a government near you!
Besides pk, with some good estate tax planning you can shelter up to about 4 million. There are some simple things you can do even without a professional to help you. There are also HUGE exemptions for family farms & small businesses- not to mention your spouse. By paying a pro a grand now- I can confidently predict he can set you up so your estate will owe nary a dime of Estate tax (unless you become wealthy beyond your wildest dreams)
And note “within the next 14 years”- as max pointed out, by 2006 the cut-off will be a cool mill. And that figure will very likely go up.
There is nothing “unfair” about the estate tax- unless you feel all taxes are unfair- in which case- why bother. In fact- estate tax is less unfair than income tax.
And PLEEEEEEEZE don’t give us that bit about “my money being taxed twice”- all money is taxed twice- or more like thousands of times. YOU will not have to pay a DIME of estate tax- those who you TRANSFER the money to will- just like when you buy stuff from a business you TRANSFER the money to the businessman- and he pays taxes on it.
Look- I do not like taxes either- but they are something we all have to live with. And, as a Tax professional- I can tell you that the Estate tax is primarily frowned upon by the filthy stinking rich- and those who do not understand it. Note all the propaganda about “family farms being sold off to pay the estate tax”- bushwa!! Not even GOOD lies.
It continues to amaze me that the repeal of the estate tax, a measure that could favor only a fraction of the top 1% in income and wealth to nearly everyone else’s detriment, continues to receive popular support at least approaching 50% (depending on who you believe).
Of course pkbites supports the repeal – he (she?) stands to gain from it. That’s fine, but the overwhelming majority of people who support the measure stand to lose from it, whether they know it or not (last I heard, the estate tax makes up about 2-3% of federal income – seemingly small numbers, but a lot of money).
And we wonder why other countries hate us. We’re the world’s Texas. Ugh. (Insert smiley face).
Of course this is because it’s the death tax. My god, you’re not in favor of death, are you?
varlos- it is because of the lies about folks having to “sell the family farm” or family home or whatever. Some folks actually believe that crap. <sigh>
I guess I should have added that my wife and I are looking to receive somewhere around 2-4 million when a certain someone dies. Much of this will be in the form of real estate, so the actual amount of worth could be even higher. So the estate tax will affect us. Of course, the certain someone could live another 20 years for all we know, and we are certainly not looking forward to them passing on. But the fact is, they have paid taxes on this property already, why should we? And why should my kids when I croak?
Let’s face it folks, those rich libbys signing that petition are in the minority of folks with something significant to pass on.
The rest of you will probably never see assests like this, and it irks you, so you figure let’s stick it to the folks who have a little something, or get something from a deceased relative. If you were in my position most of you would oppose the estate tax. You can’t say you wouldn’t because you’re not it my position are you?
My grandfather had an estate big enuf to trigger an estate tax return- however he knew enuf to properly plan his estate (the estate did owe a trifle, some 5K or something). So don’t say none of us have been in your shoes. And again- that "certain someone’ could protect that 2 million. Very likely, up to 4 million- or so the head of RIA says. And it will be much higher in 20 years.
However- i have paid taxes on my income already- so why does the merchant have to pay taxes again on my dollars when I transfer them to him?
And you paid taxes on your income when you bought your house- right? But you still have to pay property taxes -AGAIN.
This is undoubtedly true. And were you in ours, you would probably be in favor of it.
Us poor folk (i.e. us folk who don’t stand to inherit $4 million any time soon) like the estate tax because we benefit from it, indirectly, and it costs us nothing. You rich folk don’t like it because it costs you money. Of course, a few of these rich folk have managed to convince a bunch of the poor folks that up is down, their asses are in their ears, and the estate tax might hurt them.
The arguments against the estate tax based on some notion of moral inequity don’t stand up to scrutiny (and almost certainly bear no relation at all to why the estate tax is hated by the rich and the powerful alike). I have no problem with someone saying that they want to repeal the estate tax because they would prefer to have more money rather than less. No other reason I’ve heard, however, for said repeal is worth the time it takes me to read it.
One thing that is annoying is this constant refrain of super-rich people calling for measures that are purportedly harmful to themselves, but are really sticking it to people far less wealthy than themselves. These people are sanctimoniously cloaking themselves with an undeserved glory. (I am aware that the estate tax means alot more, in actual dollars, to a super-rich person than a merely wealthy one. But there’s a far greater difference between being worth 1 million and 2 million, than there is between being worth 1 billion or 2 billion).
Other examples of this include Steve Forbes (or maybe it was Ross Perot - I’ve forgotten, but it was one or the other) supporting means-testing for SS saying “there’s no reason that people like me should be getting SS”. Yeah, maybe not, but the proposals he was supporting were not affecting only multimillionares.
As for the tax itself, the problem most people have is that the justification the gov has for taking most of the money out of an estate is perceived as being a weak one. Especially as the percentage taken once it kicks in is quite high. VarlosZ writes that
What continues to amaze me is that people are amazed that people could base their principles on anything other than self-interest.
The fact that “good estate tax planning” is required to shelter more money is another argument against the estate tax, not for it. If the gov wants to let you shelter more, they should allow it outright. Not sock it to the straight-forward people who did not think to shelter their money properly. One of the main gripes people have about the tax system in general is that there is too much of a disparity between people who have found the right loopholes and people who have not. Of course, as a tax professional, you may profit from this very compexity, giving you a diferent perspective.
And as for this
I’m one of the people who believe it. Reason being that the Democrats in Congress, in yet another effort to ward off tax reduction, offered another bill that would protect family farms and small businesses but not much of anything else. Unless this has been passed (and I don’t think it was), there are still issues outstanding in these areas.
Well, here’s an American editorial saying it:
And the piece by Warren Buffett, Bill Gates Sr., & Co. will be on the op-ed page of the Sunday NY Times.
On this thread a couple weeks ago, I posted to refute the notion that the FET forced the breakup of small businesses (“freido’s example, redux”), to demonstrate that, of the major taxes in use in the USA at present, the FET was the least harmful (“In defense of the estate tax”), and also gave links to the estate tax forms and instructions on the IRS website (“Estate tax particulars”).
Hope that helps. I’d appreciate intelligent challenges to my arguments.
I’m so glad somebody brought up this topic, since I noticed the following quote from Warren Buffett on time.com yesterday.
Amen, brother Warren.
Pssst… hey Buffett? Gates? Jay Rockefeller?
ANY time you guys feel like you’re too rich, and you aren’t giving enough of your money to the government, you have my permission (heck, you have my blessing!) to write the Feds a check for any amount you want! ANY time you feel like the rich aren’t taxed enough, by all means, give the government as much of your money as you think they deserve. Give them ALL of your money, if you want to.
But don’t you DARE pose as champions of virtue, when the reality is, your stance won’t cost YOU a dime! The estate tax will NEVER affect you! It will only affect your potential heirs.
But then, that’s one of the joys of liberalism- getting to decide what happens to OTHER people’s money, and feeling virtuous for it.
But somehow the privatization of Social Security escapes this rubric?
Good estate planning yields more benefits.
Wise, informed investment of your SS money yields more benefits.
So Republicans think that individuals should not need to plan their estates to avoid taxation but should have to plan their retirement benefits vis a vis Social Security?
What happened to individual responsibility?
If the government doesn’t want to risk your pissing away your SS investment, should it not just invest the money for you?
Taxation can only be avoided for so long. Money is going to eventually be taxed.
I haven’t heard anyone on any side of this issue positing that money that has been sheltered from taxation (such as 401k money) should not take a hit at the time it is tendered.
And it continues to amaze me that many liberals won’t get over the fact that the rich are rich. Anything that involves money or taxes is going to impact the rich more than anyone else, because they have more of it. A few thousand of them also pay more in taxes than tens of millions of us, so I guess we have that to be thankful for.
Not reforming taxes in a time of surplus in a way that would clearly be a relief to all because the rich will benefit more is a curious opinion for those supposedly championing the cause of the downtrodden.
Your notion that this measure could only favor the richest Americans is erroneous.
Where I live there are many lakes, and many homes on the lakeshores that have been a part of families for generations. Many of these families aren’t rich by anyone’s estimation, but their ancestors had the foresight to buy riparian when no one much cared and the prices weren’t appreciably different than real estate elsewhere.
While these homes have stayed in the same families, their values shot up to the point where people buying in the same locations now are required to be rich.
Thus, when an owner of one of these homes dies and wants to leave it to his child or children, the death tax burden from this “windfall for the rich” usually means the not-rich family is forced to sell the home to pay the taxes.
Then a rich person buys the home. I thought we didn’t like rich people? Why, then, are we supporting a death tax that in this case helps them out at the expense of the little guy?
(And if you think this is a farfetched scenario, it probably happens in my locale daily.)
Why support a system of taxation involving taking an extremely large chunk of someone’s estate, in essence, discouraging them from being thrifty and thinking of the future and their family?
“Because the rich will benefit too much.”
The rich are going to be better off than me, regardless of what you do.
I have no problem with the rich being rich. I have big problems with their children controlling large portions of the country’s economic resources based on the fact that their parents were rich. Call me a commie if you want, but I still happen to believe very strongly in something called “merit.”