# Tax Takers vs Tax Payers **URL:** \ **Category:** Great Debates\ **Created:** [March 2, 2012, 9:01am UTC](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530 "2012-03-02T09:01:24Z")\ **Posts on this page:** 5\ **Page:** 10
**Author:** ![ABraut](https://avatars.discourse-cdn.com/v4/letter/a/258eb7/32.png) [@ABraut](https://boards.straightdope.com/u/ABraut)\ **Post date:** [March 15, 2012, 6:18pm UTC](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530/181 "2012-03-15T18:18:47Z")
> [@Jas09](#): > > Right, but that’s just because he died in 2010 and when was no estate tax whatsoever. That’s not really true, as [the first paragraph](http://wills.about.com/od/understandingestatetaxes/qt/carryoverbasis.htm) explains: > [@](#): > > For deaths occurring in 2010, the decedent’s heirs will have the _choice_ of **applying the federal estate tax** _or_ making use of the “modified carryover basis regime.” This means that the heirs will need to _choose_ between receiving an unlimited “step up” or a limited step up in the basis of the inherited property. It was a choice: pay the federal estate tax (35% over $5 million) immediately or pay capital gains taxes (15% of all gains) later. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [March 15, 2012, 10:38pm UTC](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530/182 "2012-03-15T22:38:16Z")
Well, of course. I thought the point you were making was that Steinbrenner’s heirs didn’t get a full step-up basis. Which is only true because he died in 2010. In any other year they would have received a full step-up and paid the estate tax. ---
**Author:** ![ABraut](https://avatars.discourse-cdn.com/v4/letter/a/258eb7/32.png) [@ABraut](https://boards.straightdope.com/u/ABraut)\ **Post date:** [March 15, 2012, 11:21pm UTC](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530/183 "2012-03-15T23:21:22Z")
> [@Jas09](#): > > I thought the point you were making was that Steinbrenner’s heirs didn’t get a full step-up basis. That is the point, but it has more to do with the false complaint that Steinbrenner’s heirs didn’t pay either tax, than your opinion that both should be paid. ---
**Author:** ![Jas09](https://avatars.discourse-cdn.com/v4/letter/j/d07c76/32.png) [@Jas09](https://boards.straightdope.com/u/Jas09)\ **Post date:** [March 16, 2012, 2:59am UTC](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530/184 "2012-03-16T02:59:41Z")
Got it. Thanks for the clarification. ---
**Author:** ![ABraut](https://avatars.discourse-cdn.com/v4/letter/a/258eb7/32.png) [@ABraut](https://boards.straightdope.com/u/ABraut)\ **Post date:** [April 3, 2012, 3:12pm UTC](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530/185 "2012-04-03T15:12:19Z")
Jas09’s plan: ‘Pop’ buys a stock for $10. Many years later, he leaves it to ‘Junior’, and it’s worth $100. Assuming, for the sake of argument, that other assets have exceeded the minimum for inheritance tax, Junior has to pay $50 to receive the $100 stock. The stock now has a net worth of $50, but if/when he sells it he’ll have to pay taxes on his _imaginary_ profit of $90. After Junior pays this tax on money already taken by the government, he’s left with $36.50. That’s at 15%. At the (desired by some) 39.6% rate for capital gains, he’s left with $14.36. That’s most likely, less than the original $10 (adjusted for inflation). [Previous page](https://boards.straightdope.com/t/tax-takers-vs-tax-payers/614530.md?page=9)