There are a lot of suckers on this board who defend the right of the rich to escape taxes. Warren Buffet said it is class warfare and my class is winning. The last decade has seen the taxes to the top earning classes drop dramatically. They already have thousands of ways to avoid taxes, ways that we can not avail ourselves of. They have lawyers poring over the tax codes finding loopholes. They also have legislators put loopholes in bills that they can exploit. The system is gamed to the benefit of the wealthy. But the fact that so many feel it is right to allow that, amazes me.
Then you liquidate the asset to pay off the tax, then the beneficiary gets the rest. It’s still a pretty penny. I also really wonder how often this happens. Do you have a cite for how often an estate reaches the amount where it’s taxable without enough liquid assets to pay the tax? Just because it CAN technically happen doesn’t mean it does.
Oddly enough, I’m a Canadian lawyer who earns enough to pay a serious amount in taxes, and I support a progressive taxation system even though it is directly against my own interests - because I believe that it supports a greater public good; I like living in the sort of society which has, as it were, some socialist-style protections for those who are less fortunate.
Thus, it makes perfect sense to me that someone who genuinely believed in the opposite - that taxes on the relatively wealthy should be kept to a minimum because it would support a greater social good - would support such tax cuts, even though they don’t personally benefit; it all has to do with the sort of society they wish to live in.
I suppose this post isn’t very exciting. 
Oh, that’s OK, you told us you were Canadian right away, so its not like you raised any expectations that you couldn’t meet.
Seems to me it wasn’t that long ago that Starv was all about the will of the people, how Americans are just naturally conservative, and expressed their view by the overwhelming landslide mandates of 2000 and 2004. We DFH would say something, and we’d get “See, this is the reason which is why you guys never win any elections!”
Something must have changed, but I can’t quite put my finger on it…
I don’t think anyone is arguing that the rich shouldn’t pay their share. I don’t even think anyone is arguing against a progressive tax system.
Right, and that penalizes the middle-class more than it does the rich. The rich will inherit liquid capital that they can use to pay for the taxes whereas the middle-class will inherit small properties that may or may not be meaningful to their family that they must sell because there isn’t money to pay for the estate taxes.
I’m actually having trouble finding a cite for it. Not sure what to put into google.
Here’s something:
Dude. How many middle-class people do you know who leave estates worth over a million dollars (which is what the estate tax will revert to in 2011–right now it’s 3.5 million, and if you’re lucky enough to die in 2010 there will be no tax)? The estate tax is not a middle-class problem, unless there are a lot of middle class millionaires who have no liquid assets out there that you know of. Hell, isn’t that in part what life insurance is for?
And hey, isn’t “you don’t have insurance and that’s not my problem” what conservatives are arguing when it comes to health insurance? But when you don’t plan for your inevitable death, suddenly you whine about how you’re getting taxed? Bah.
Did you read the link I gave you? Please read everything I posted and then respond again.
The idea that it’s just a matter of ‘planning’ for a death tax is kind of silly. Some people are land rich and cash poor and that’s just how it is.
Ha, as opposed to the government?
Estate taxes are probably the worst form of government fraud. Why would they need to tax (again) the money that was already taxed?
The reasonable ones usually aren’t.
Here in the US, the states with the lower average incomes tend to be more red, and with higher average incomes tend to be more blue. We have no problem with people who earn more voting ‘against’* their best interests (they’re also the states that want to force public health care on the uninsured), but we have a problem when the people with lower incomes don’t want rich people to pay taxes, or don’t want public health care…
*which I put in quotes because I think a lot of rich people are aided by their higher taxes despite their beliefs, and get more from the US government than they admit to themselves.
Wow does that take me back. Faulty reasoning from…2001? 2002?
Estate Tax
The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706 (PDF)). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your “Gross Estate.” The includible property may consist of cash and securities, real estate, insurance, trusts, annuities, business interests and other assets.
Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your “Taxable Estate.” These deductions may include mortgages and other debts, estate administration expenses, property that passes to surviving spouses and qualified charities. The value of some operating business interests or farms may be reduced for estates that qualify.
After the net amount is computed, the value of lifetime taxable gifts (beginning with gifts made in 1977) is added to this number and the tax is computed. The tax is then reduced by the available unified credit. Presently, the amount of this credit reduces the computed tax so that only total taxable estates and lifetime gifts that exceed $1,000,000 will actually have to pay tax. In its current form, the estate tax only affects the wealthiest 2 percent of all Americans.
Most relatively simple estates (cash, publicly traded securities, small amounts of other easily valued assets, and no special deductions or elections, or jointly held property) do not require the filing of an estate tax return. A filing is required for estates with combined gross assets and prior taxable gifts exceeding $1,500,000 in 2004 - 2005; $2,000,000 in 2006 - 2008; and $3,500,000 effective for decedents dying on or after January 1, 2009.
How so? What does it matter that they put a lower limit on what they are going to tax?
But what this thread is about is the absurdity of a working-class person looking at the daunting prospects of becoming rich, and seeing the taxes he’ll eventually–when and if he succeeds–have to pay as being his biggest problem.
You don’t think that the health care insurance a small entrepenuer has to pay for right now is a bigger problem, not to mention obstacle to future success?
Are there no percentages in your world? Is it just a question of the rich getting to “keep their money” as opposed to the rich not getting to “keep their money”?
We’re really just talking about a few percentage points difference across tax brackets, after all.
Under our system, if you don’t make a lot of money, you don’t have to pay a lot of money. If you do make a lot of money, you still get to keep a lot of money.
As opposed to America?
If you want to argue that the transfer of money in the form of a gift upon death to another shouldn’t be taxed, that’s fine. I disagree - I’m not sure why me dying gives me a safe way to give money to you when me just giving you money is limited ($10K a year? something like that), but OK. It’s a valid position.
I was responding to your ‘double tax’ claim that I thought was the root of your argument. Most taxes can be argued to be a double tax.
What about abortion and gay rights? Assisted suicide and medical marijuana? Flag burning and hemp?
Actually, I believe there is a one time “gift” of up to 1 million that can be given to offspring. The 10k amount is spot on though.
The root cause of all Rep/Dem arguments.
Me : “I work for it and I’d like to keep it and if I do give it, I’d like to pick who I give it to”
Dem: " It doesn’t matter that YOU worked for it, you need to give it to everyone"
Although I consider myself less a republican and more a libertarian. I am conservative when it comes to government intervention and the government has been less and less that.
An Iowa State University economist searched far and wide but never found a farm lost because of estate taxes
A New York Times article recently interviewed Neil Harl, an Iowa State University economist whose tax advice has made him a household name among Midwest farmers. Harl explained that he has searched far and wide but has never found a farm lost because of estate taxes. “It’s a myth,” he said.[2]
Despite the populist rhetoric and oft-repeated horror stories about families being forced to sell their farms in order to pay estate taxes, the battle is over a very large amount of money held by a very small number of families. A report last month by the Congressional Budget Office found that in 2000 only 2 percent of all estates - about 52,000 - were subject to any estate tax. At that point, taxes were imposed only on estates worth $675,000 or more. The limit rose to $1.5 million in 2004, and if that limit had been in effect in 2000, only 13,771 estates - fewer than 1 percent - would have been subject to the tax. All but 740 of them would have had enough in liquid assets to cover estate tax liabilities, the office estimated.[11]
"In 1998, less than six percent of all farms had a net worth of $1.3 million, the amount of an estate that is completely exempt if it includes a family-owned farm. By 2009, estates of up to $3.5 million will be completely exempt. Less than one percent of all farm estates would be subject to estate tax at that point.
I remember reading that six farms were subject to estate taxes in 2006 or 7 ( or maybe 8) and these were seriously big multimillion dollar operations. With proper tax planning even millionaire farmers have nothing to pay.