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ducknwork
12-09-2010, 12:00 PM
Obama agreed to exempt the first $5 million of a deceased person's estate, and to tax the rest at 35 percent. Congressional Democrats had expected a 45 percent tax rate on anything above $3.5 million. Without congressional action, the estate tax will revert to an even higher rate: 55 percent on estates valued above $1 million.

http://news.yahoo.com/s/ap/us_tax_cuts

My question is this...(maybe it is a bit naive or stupid, but that is why I am asking)

Why does the govt deserve to take any estate tax at all? Taxes have already been paid on income, property, etc...so why is it okay to once again tax this money just because someone dies? I can't understand the justification for taking almost half the value of someone's possessions when they pass away. Perhaps someone can explain this to me.

jbonnot03
12-09-2010, 12:07 PM
I agree wholeheartedly. It is double taxation. Just die before the end of the year. 2010 has no estate tax.

Makes me wonder if something fishy went on with George Steinbrenner. Supposedly the US govt would have received millions if his estate would have been taxed.(just couldn't help but come up with a conspiracy theory)

ducknwork
12-09-2010, 12:12 PM
Just die before the end of the year.

Thanks for the advice, but it won't affect me anyway. My estate is only valued at $4.9 million, so I'm under the proposed exemption amount.

Marvin S
12-09-2010, 02:30 PM
The Estate Tax should be whatever the capital gains rate is on all funds where no tax has been paid.

For example - I buy a stock at $10, it goes to $50 so I sell. The $40 is taxable at the rate I qualify for. It should be no different for estate tax, IMO.

dixidawg
12-09-2010, 02:38 PM
Why would it be assumed "sold" when someone dies?

Would the same apply to real estate? If my father bought a house in 1950 for $10,000 and is now worth $500,000 should the heirs have to sell it in order to pay the tax?

Roger Perry
12-09-2010, 03:05 PM
http://news.yahoo.com/s/ap/us_tax_cuts

My question is this...(maybe it is a bit naive or stupid, but that is why I am asking)

Why does the govt deserve to take any estate tax at all? Taxes have already been paid on income, property, etc...so why is it okay to once again tax this money just because someone dies? I can't understand the justification for taking almost half the value of someone's possessions when they pass away. Perhaps someone can explain this to me.

To pay down the National Debt that the Republicans created and the Democrats continued.

BrianW
12-09-2010, 03:10 PM
So should the government give the family a tax credit if the property was bought for 200000 and was only worth 125000.

Pete

When my mother died, the basis for the estate calculation purposes on her house was $295,000, the assessed value for that calendar year. When I could only sell it for $225,000 two and a half years later, I took a $70,000 capital loss on it, the writeoff spread over a few years.

road kill
12-09-2010, 03:28 PM
http://news.yahoo.com/s/ap/us_tax_cuts

My question is this...(maybe it is a bit naive or stupid, but that is why I am asking)

Why does the govt deserve to take any estate tax at all? Taxes have already been paid on income, property, etc...so why is it okay to once again tax this money just because someone dies? I can't understand the justification for taking almost half the value of someone's possessions when they pass away. Perhaps someone can explain this to me.


So they can redistribute it to someone else for VOTES!!:D

It's all in Karl Marx's writings.

Make sense now???


RK

paul young
12-09-2010, 03:51 PM
who knew Woodrow Wilson was a socialist?

he was the president at the time the estate tax was enacted. -Paul

road kill
12-09-2010, 04:03 PM
who knew Woodrow Wilson was a socialist?

he was the president at the time the estate tax was enacted. -Paul

Maybe you should read up on good old Woodrow..........he was indeed a progressive.:D


RK

paul young
12-09-2010, 05:34 PM
good 'ole Potus place- where the monikers socialist, fascist, progressive, conservative, libertarian and liberal are interchangeable depending on the topic at hand. sometimes even in reference to the same person within the same discussion...

nobody enjoys paying taxes, but each and every one of us benefits from them.-Paul

helencalif
12-09-2010, 05:38 PM
I know you are talking about federal estate taxes. I am going to chime in here to relate an eye opening experience I had a few years ago with a probate court in Ohio.

A distant relative died a long time ago in Ohio. The estate was settled or so the heirs were told by the attorney handling it. Then we learned there were lots of loose ends and probate had never been settled. Some heirs (all of them listed by name in probate court records and recognized by the court as heirs) did not get anything because the attorney never tried to contact them or find them even though he had addresses for a few of them. For the few others, all he had to do was ask the other heirs with whom he had been in contact. We assumed the other relatives received their inheritance checks, too.

Probate court wanted the case settled. We thought that since money was found still sitting in the estate account that the probate court would make sure the unpaid heirs got paid. We provided the court with the names and addresses of the unpaid heirs. We had previously submitted the same list to the estate attorney. He ignored it.

In court we learned that the estate attorney had sent the money that was due to the "unfound heirs" to the county treasurer. The probate court decided that was OK for him to do since he said he had made a reasonable attempt to find the heirs. Actually, he did nothing to find them and did nothing after their current addresses were given to him.

The county treasurer received a little over $26,000. and the "unfound heirs" got -0-.

After experiencing this, I have often wondered how often do county treasurers receive funds that were due heirs because the person handling the estate told the probate court that he could not find them... and that was Okey-Dokey by the county probate court.

Helen

T. Mac
12-09-2010, 05:51 PM
Helen,

This seems to be very common. Just look at the California unclaimed property program http://scoweb.sco.ca.gov/UCP/Default.aspx

You need to check here at least once a year to make sure that you are not listed. Several times utility refunds, etc pop up with the correct address and all because the vendor "can't" find you. In fact, just looked and my brother is now listed (correct address) with a $50 gas company refund.

T. Mac

YardleyLabs
12-09-2010, 07:52 PM
The myth that estate taxes represent double taxation is just that, a myth. The bulk of estates that are subject to estate taxes are actually made up of unrealized capital gains. If Bill Gates died tomorrow, the overwhelming majority of his estate would be Microsoft shares that have grown in value from nothing when he acquired them to billions today. Had he sold those shares along the way, the proceeds would have been fully taxable. If he dies next year, his family will inherit all of those billions and pay no tax at all. From a broader perspective, the estate is income for them without regard to whether or not the deceased had paid taxes on it before. I didn't earn anything my father had at his death, he did. If I receive it, it is income Why should one form of income be treated differently from another? Based on our tax code, it seems that we want to punish people who earn their money, while letting those who inherit their money get a free ride. Any income you receive is income, whether it came from hourly wages, dividends, capital gains, inheritance, or welfare checks. Tax it all the same.

road kill
12-09-2010, 08:12 PM
The myth that estate taxes represent double taxation is just that, a myth. The bulk of estates that are subject to estate taxes are actually made up of unrealized capital gains. If Bill Gates died tomorrow, the overwhelming majority of his estate would be Microsoft shares that have grown in value from nothing when he acquired them to billions today. Had he sold those shares along the way, the proceeds would have been fully taxable. If he dies next year, his family will inherit all of those billions and pay no tax at all. From a broader perspective, the estate is income for them without regard to whether or not the deceased had paid taxes on it before. I didn't earn anything my father had at his death, he did. If I receive it, it is income Why should one form of income be treated differently from another? Based on our tax code, it seems that we want to punish people who earn their money, while letting those who inherit their money get a free ride. Any income you receive is income, whether it came from hourly wages, dividends, capital gains, inheritance, or welfare checks. Tax it all the same.


Yeah, comparing Bill Gates to my Grand Mother, or dnf's Uncle or even your Aunt makes perfect sense.:rolleyes:

YOU are the myth!!!

RK

dnf777
12-09-2010, 08:22 PM
I know you are talking about federal estate taxes. I am going to chime in here to relate an eye opening experience I had a few years ago with a probate court in Ohio.



Yeah, good point. A NYC attorney who came to Pittsburgh to help a relative through an inheritance hearing was astounded at the state and county laws we have here. He said in most jurisdictions, such practices are known as EXTORTION!

YardleyLabs
12-09-2010, 09:50 PM
Yeah, comparing Bill Gates to my Grand Mother, or dnf's Uncle or even your Aunt makes perfect sense.:rolleyes:

YOU are the myth!!!

RK
Well, my father's estate fell under the minimum for taxation and therefore passed to my sister and me untaxed. It consisted almost entirely of stocks where 90% of the value was in capital gains for which no taxes had ever been paid, and none were paid by us. Death, the ultimate tax dodge.

depittydawg
12-09-2010, 09:57 PM
Yeah, comparing Bill Gates to my Grand Mother, or dnf's Uncle or even your Aunt makes perfect sense.:rolleyes:

YOU are the myth!!!

RK


Another argument for an estate tax heretofore not mentioned, is a fundamental American tradition dating back to colonial days in some states. Inherited wealth created the aristocracy of Europe that many of our ancestors fled. It has always been part of the consciousness of America that each generation, each person earned their own place in society. That a privileged class should be created by birthright is as Un-American as Communism, Just the other side of the spectrum.

Here are some of Thomas Jefferson's thoughts on inheritance.

"I set out on this ground which I suppose to be self evident, "that the earth belongs in usufruct to the living;" that the dead have neither powers nor rights over it. The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society. If the society has formed no rules for the appropriation of its lands in severalty, it will be taken by the first occupants. These will generally be the wife and children of the decedent. If they have formed rules of appropriation, those rules may give it to the wife and children, or to some one of them, or to the legatee of the deceased. So they may give it to his creditor. But the child, the legatee or creditor takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject. Then no man can by natural right oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be reverse of our principle."

caryalsobrook
12-10-2010, 09:43 AM
Another argument for an estate tax heretofore not mentioned, is a fundamental American tradition dating back to colonial days in some states. Inherited wealth created the aristocracy of Europe that many of our ancestors fled. It has always been part of the consciousness of America that each generation, each person earned their own place in society. That a privileged class should be created by birthright is as Un-American as Communism, Just the other side of the spectrum.

Here are some of Thomas Jefferson's thoughts on inheritance.

"I set out on this ground which I suppose to be self evident, "that the earth belongs in usufruct to the living;" that the dead have neither powers nor rights over it. The portion occupied by an individual ceases to be his when himself ceases to be, and reverts to the society. If the society has formed no rules for the appropriation of its lands in severalty, it will be taken by the first occupants. These will generally be the wife and children of the decedent. If they have formed rules of appropriation, those rules may give it to the wife and children, or to some one of them, or to the legatee of the deceased. So they may give it to his creditor. But the child, the legatee or creditor takes it, not by any natural right, but by a law of the society of which they are members, and to which they are subject. Then no man can by natural right oblige the lands he occupied, or the persons who succeed him in that occupation, to the paiment of debts contracted by him. For if he could, he might during his own life, eat up the usufruct of the lands for several generations to come, and then the lands would belong to the dead, and not to the living, which would be reverse of our principle."

I read both your statement of tradition and your quote of Jefferson. Not in either one of them did I see a statement to take from one person and not another when one died. Then accepting both statements as having merit how can one justify an exemption of any amount? if you are going to take a percentage from one when they die then you should take a percentage from all when they die. You tell me the percentage that the government should take from you when you die of give what you feel is the justification for exempting anybody for any amount. The only reasons I can see for one advocating taking from one and not the other when they die is envy, jealousy, a sense of failure in what they have saved, or a bitterness to punish those who have done a better job of saving than they have. As my father used to say, "It's not how much you make it's how much you save."

I ask you what percentage of your estate should the government take or give reasons you think that the gov. should take from someone else and not from you.

caryalsobrook
12-15-2010, 06:02 AM
The myth that estate taxes represent double taxation is just that, a myth. The bulk of estates that are subject to estate taxes are actually made up of unrealized capital gains. If Bill Gates died tomorrow, the overwhelming majority of his estate would be Microsoft shares that have grown in value from nothing when he acquired them to billions today. Had he sold those shares along the way, the proceeds would have been fully taxable. If he dies next year, his family will inherit all of those billions and pay no tax at all. From a broader perspective, the estate is income for them without regard to whether or not the deceased had paid taxes on it before. I didn't earn anything my father had at his death, he did. If I receive it, it is income Why should one form of income be treated differently from another? Based on our tax code, it seems that we want to punish people who earn their money, while letting those who inherit their money get a free ride. Any income you receive is income, whether it came from hourly wages, dividends, capital gains, inheritance, or welfare checks. Tax it all the same.


Even though you cont inflation as ordinary income, your statement is the best arguement for no exemption from the death tax. You said "TAX IT ALL THE SAME" You also say "THOSE WHO INHERIT THEIR MONEY GET A FREE RIDE". Do you include the government and the beneficiaries of income redistribution as those that get a "FREE RIDE"?
Tax estates as ordinary income? I wonder how many people on this forum would see their spouses and kids put out on the street as a result of an untimely death of a spouse? Lets take a reasonably successful retriever trainer age 50. Maybe a 200,000 house and land, say 100,000 in equipment, and say a nest egg of maybe 100,000. Finally out of debt after 20 or 20 years. Community property state, spouse owes ordinary income tax on 200,000. Equals tax of about 50-55% or about $100,000 including payroll tax. You are sure right, the spouse and dids would not be getting a free ride. GOOD PLAN

cotts135
12-15-2010, 06:46 AM
Even though you cont inflation as ordinary income, your statement is the best arguement for no exemption from the death tax. You said "TAX IT ALL THE SAME" You also say "THOSE WHO INHERIT THEIR MONEY GET A FREE RIDE". Do you include the government and the beneficiaries of income redistribution as those that get a "FREE RIDE"?
Tax estates as ordinary income? I wonder how many people on this forum would see their spouses and kids put out on the street as a result of an untimely death of a spouse? Lets take a reasonably successful retriever trainer age 50. Maybe a 200,000 house and land, say 100,000 in equipment, and say a nest egg of maybe 100,000. Finally out of debt after 20 or 20 years. Community property state, spouse owes ordinary income tax on 200,000. Equals tax of about 50-55% or about $100,000 including payroll tax. You are sure right, the spouse and dids would not be getting a free ride. GOOD PLAN

What are you talking about? In this scenario they don't even trigger an estate tax.

caryalsobrook
12-15-2010, 08:54 AM
What are you talking about? In this scenario they don't even trigger an estate tax.

Read Yardley's quote. Ordinary income tax on ALL of the estate. No exemptions. Anyway why have an exemption at all for any estate tax? As said why do the family deserve any of the estate tax free?

jbonnot03
12-15-2010, 10:06 AM
What if the estate was originally owned by Joe. Joe dies and passes the estate to Joe, Jr. Joe, Jr. then dies and passes the estate to Joe, III.

Should the estate be taxed both times? I don't think so.

caryalsobrook
12-15-2010, 11:08 AM
What if the estate was originally owned by Joe. Joe dies and passes the estate to Joe, Jr. Joe, Jr. then dies and passes the estate to Joe, III.

Should the estate be taxed both times? I don't think so.

You are right. Just another fact pointing out the stupidity of a death tax in the first place, much less an exemption of a million, 5 million or 100 million in the first place. It punishes those who save and rewards those who don't. Good system if you want to reward failure and punish success. But what do you expect from progressives, liberals, socialists, or Marxist-Linninists? Different breeds but same species. Conservatives should argue for NO EXEMPTIONS for the death tax then all would understand and think "Oh NO, YOU ARE TALKING ABOUT TAKING WHAT I HAVE SAVED TOO!" I personally don't have near 5 million in assets and probably won't be affected even if they set a lesser amount but I see no reason to steal from someone who has managed to save in order to give their children a better chance.

All arguements that I have seen for a death tax would preclude any exemption, soif we are to have it then let there be no exemption and see how many people would agree with having one and what percentage they would think reasonable. I suspect a far greater percent would say "Oh sh### now you are talking about what I have saved." That would leave only those who have nothing and would not care.