Make sure you also make the perfectly fine assumption that neither of the couple ever needs extensive medical help or to live in an assisted care facility. Make the perfectly fine assumption that they both live to the reasonable age of 100 and then both die on the same day.
I think if you make those reasonable assumptions, this smart, frugal, pulled up by their own bootstraps couple would die with somewhere around $1billion.
For all you freeloaders, can’t you see how easy it is and why it’s important to do away with the estate tax?
This would also be a great time to interrogate the actual real world of people who leave estates above $11 million, and ask how many of those per year earned $100k for their entire 40 year career, or indeed were anywhere in the neighborhood. Even if we stretch the example to the breaking point and find some way that it might theoretically be possible, I strongly suspect that the average decade sees zero people in such circumstances get their estates of $11 million or more taxed.
Are there really less than 100 families with estates over $11 million? That seems like too small a number. For starters, Forbes list of billionaires has more than 100 Americans on it. What’s the source for “<100 families with estates over $11 million”?
I’m not sure I follow. Does that mean that “<100 families with estates over $11 million” refers to <100 people with that level of assets that die? Every year or something?
Okay, crap, I did write that poorly. I thought I mentioned the “each year” part, but I didn’t. And I left out a key qualifier that the interviewer gave: this was the number of farms/businesses each year that would face the tax. My apologies.
Not sure about that <100 number (I seem to remember hearing that the number of small family farms and business affected was around that number, but I can’t find a cite). This Q&A from the Tax Policy Center has the number of estates owing tax in 2013 at around 4,700, which was <0.2% of the people who died that year.
So, no matter how you slice it, estate taxes affect very few estates. And, I would argue, they affect zero people, since the people are dead. Heirs don’t count–they are not the entities paying the tax.
I missed that he’s specified $40k. It works out a little differently now because their taxes will be different. But we’re already oversimplifying with rather stilted conditions, so why not continue? If we compound annually, 10 years will get them to $10.8M and 20 years to $20.7M.
There were 5219 taxable estate tax returns in 2016. What I don’t understand is that some of these are under $5M, so maybe I’m misunderstanding what they’re presenting. Anyone able to help out here?
I’m counting 681 taxable returns with farm assets. But not necessarily a high proportion of farm assets.
One guess: IANAA but IIRC you can transfer assets early up to estate tax threshold to avoid paying gift taxes, but they count against your estate when you die, so it’s possible that they had already given several million to their heirs and thus their estate of $4 mill was counted as one of $8 mill due to previous giveaways?
Maybe they should wait until they’ve got a typed-up copy of the bill, and give everyone a day or two to read through it? Because right now, it’s apparently 479 pages that look like this.
Yeah, that’s how they’re doing a $1.5 trillion change to the tax code.
Throw out every last Republican who is okay with ‘governing’ this way.
I am embarrassed for my country.
ETA: My son is in fifth grade. He isn’t allowed to turn in stuff that looks like that.
Enough that I get hit with the AMT and will continue to under the new bill. And I live in a high tax state with high property values and will lose those deductions. I made a mistake in making my money in salary and not inheritance. My bad.
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