Estate Tax

[militaryhorn]

NJ

I am for taxing this stuff but why not just make a cutoff of $10 million and do a straight tax of 35%. I never understood why you should tax someone more just because they make more? How about we give less tax credits based on how close you come to ZERO income? That sounds fair doesn't it? I mean really...if someone is making $5,000 a year what is another $5,000 going to do for them?

 

[Dobeyville]

Sure, we've talked several times, every time there is a change in the laws. It's tedious and pisses me off every time. No one bats an eye at a life insurance beneficiary getting a tax free benefit. That money is normally used to pay off taxes due from the estate. It seems to be a never ending circle and I would love for it to go away.

The government took in $3,020.8 billion in revenue. Only $19.3 billion was from from estate and gift taxes (about .06 percent of revenue). That's chump change - certainly not enough for anybody to care about.

The only people who care about it are the people forced to pay it.

 

[chango]

What is it about being below the poverty level that should enable someone to obtain government assistance that they didn't personally earn?"

Most Republicans are Chrsitians. Christianity is the following of Jesus Christ. Jesus Christ's teachings COMMANDED his followers to do just this. A lot of Republicans have a "F em" attitude when it comes to the poor. I guess I don't understand how they justify this.

 

[Monahorns]

Most Christians I know choose to help the poor or others in need directly. We don't need people with guns taking our money to pad their wallets and directing a small part of that to help the poor and others in need. It really is a false argument.

 

[pasotex]

Most Christians I know choose to help the poor or others in need directly. We don't need people with guns taking our money to pad their wallets and directing a small part of that to help the poor and others in need. It really is a false argument.

 

[Htown77]

The government took in $3,020.8 billion in revenue. Only $19.3 billion was from from estate and gift taxes (about .06 percent of revenue). That's chump change - certainly not enough for anybody to care about.

This number is revenue not net revenue. When you include the cost of administration (the salaries and benefits of the IRS agents, the capital, the time, the time and costs to the courts, etc.) it brings in next to nothing.

 

[NJlonghorn]

I am for taxing this stuff but why not just make a cutoff of $10 million and do a straight tax of 35%. I never understood why you should tax someone more just because they make more?

I guess it depends upon the goal of the estate / inheritance tax. To me, the goal is to reduce the accumulation of hereditary wealth. I'm only mildly concerned about the well-off person who passes a few million on to ancestors, so I wouldn't tax them much. I'm much more concerned about the super-rich who pass on hundreds of millions, or even billions, so I'd hit them harder. That said, I wouldn't have a huge problem with what you propose.

 

[theiioftx]

Everyone is for robbing Peter to pay Paul except Peter. How about the government live within its means on the first round that money is taxed?

 

[Dobeyville]

Is it just money that you want to take away or do you want children to have to give up jewelry, art, vehicles or everything? Where would it end? Why does it have to be in the millions of dollars for you to tax it? Why not start with a thousand dollars and start there? Some people just want to punish those who have worked hard, made some money, or a lot of money and make them give it to someone else "just because they don't need it". Screw that.

 

[theiioftx]

Please let us know where in the Bible Jesus commands followers to give all of your estate to Nancy Pelosi so she can ration it out to her people.

 

[Mr. Deez]

This number is revenue not net revenue. When you include the cost of administration (the salaries and benefits of the IRS agents, the capital, the time, the time and costs to the courts, etc.) it brings in next to nothing.

I have no idea what those numbers look like. The IRS costs around $11 billion per year, but I don't know how much of that is spent on estate tax return processing and collection. I wouldn't think they'd need to spend much on that. It should be a lot easier to enforce than the income tax is, but that's just my own speculation.

 

[NJlonghorn]

This number is revenue not net revenue. When you include the cost of administration (the salaries and benefits of the IRS agents, the capital, the time, the time and costs to the courts, etc.) it brings in next to nothing.

This report by the Center on Budget and Policy Priorities has estimated that overall compliance costs are around 7%. This includes IRS expenses and taxpayer costs for both planning and administration. Here's the relevant part of the report:

The public and private costs associated with estate tax compliance -- including IRS costs to administer the tax and taxpayer costs for estate planning and administering an estate when a person dies -- equaled about 7 percent of estate tax revenues in 1999.[21] That is within the range of compliance costs for other taxes. For instance, administrative and compliance costs equal about 14.5 percent of the revenue raised by the individual and corporate income taxes and about 2 to 5 percent of the revenue raised by sales taxes. In addition, the number of individuals and estates that bear these costs has fallen markedly as the estate-tax exemption level has risen since 2001.​

Facts sure are pesky things, aren't they?

 

[Mr. Deez]

NJ,

You should not be awake this early on a Saturday.

 

[NJlonghorn]

NJ,

You should not be awake this early on a Saturday.

Lol. The only time I can be alone is weekend mornings while my wife and kids sleep in. I wouldn't give that up for the world. It'll be even better next year when my son goes off to college because he doesn't sleep nearly as late as his mom and sister do.

 

[Mr. Deez]

Lol. The only time I can be alone is weekend mornings while my wife and kids sleep in. I wouldn't give that up for the world. It'll be even better next year when my son goes off to college because he doesn't sleep nearly as late as his mom and sister do.

We wish we had a kid who slept later than we do. We have a 13 month old, who wakes us up promptly at 6:00 a.m. everyday and is screaming for a diaper change by 6:15. For two relatively old new parents who are used to sleeping in until 11 on Saturdays, it's pretty rough.

On the upside, we are productive in the mornings now. By the time I posted my initial comment to you, I had eaten breakfast, gone for an hour long walk, mowed and seeded the lawn, and drank a beer. Before the baby was born only one of those things would have happened that early, and it wouldn't have had anything to do with walking or the lawn.

 

[Htown77]

Facts sure are pesky things, aren't they?

I guess the various law review articles with, you know, actual research on the estate tax industry I have read are wrong. Instead we should believe a link to claims by a special lobby group that claims their claims are facts (which is what every lobby group or lobbyist does).

From their website:
"We are a nonpartisan research and policy institute. We pursue federal and state policies designed both to reduce poverty and inequality and to restore fiscal responsibility in equitable and effective ways. We apply our deep expertise in budget and tax issues and in programs and policies that help low-income people, in order to help inform debates and achieve better policy outcomes."

The same pages uses this spin of the facts "The estate tax will generate about $246 billion over 2016-2025 under current law, according to CBO" instead of the yearly revenue under the claim "the estate tax is a significant sources of revenue."

It is not wise to completely trust the "facts" and "spin" from special lobby groups.

 

[NJlonghorn]

I guess the various law review articles with, you know, actual research on the estate tax industry I have read are wrong. Instead we should believe a link to claims by a special lobby group that claims their claims are facts (which is what every lobby group or lobbyist does).

Your original statement was that the estate tax brings in "next to nothing" because expenses chew up most of the $19 billion in revenue. Considering that the entire IRS budget is well less than this, I found your suggestion ludicrous and was willing to accept a biased source as disproof. If you have a source better than "various law review articles I've read", I'd be happy to consider it.

The same pages uses this spin of the facts "The estate tax will generate about $246 billion over 2016-2025 under current law, according to CBO" instead of the yearly revenue under the claim "the estate tax is a significant sources of revenue."

There is a huge difference between biased spin, which they obviously are guilty of, and outright fabrication, which your are accusing them of. CBPP is a liberal think tank, but a relatively respectable one.

 

[Htown77]

All i can say is there is a lot more to all of this than you think there is.

 

[Mr. Deez]

All i can say is there is a lot more to all of this than you think there is.

If you have other information, then please share it. I readily admit that other than the revenue generated by the estate tax and the total IRS budget, I'm speculating. Are the CBPP's numbers wrong? Are they right but fail to consider some other factors?

 

[Htown77]

They are severly underinclusive on total costs to the IRS. Ive started to draft my usual long posts three or four times, but it's requires too much explanation of trust and tax law. Everyone can certainly understand the nuances, writing them up is just not going to work in hornfans format and would take far too long.

(This is a very frustating thread, as even in this post, I ended up deleting most of it because it's just not a good idea on this medium.)

Consider me as dropping a card to testfiy on (not for or against), but not showing up to actually testify.

 

[Statalyzer]

Most Republicans are Chrsitians. Christianity is the following of Jesus Christ. Jesus Christ's teachings COMMANDED his followers to do just this. A lot of Republicans have a "F em" attitude when it comes to the poor.

Most people hear "I hope the poor all starve and rot" when what was actually said was "Government shouldn't be out to redistribute wealth" or "Politicians shouldn't buy votes by promising to give people free stuff taken away from someone else" or even "Most government attempts to aid the poor foster dependency and don't actually help the poor anyway." And whether you agree or disagree with those statements, and whether you find them fair or misleading, they are quite different from how you interpret them. But most people only hear what they want to hear - and most want to hear that their enemies (political or otherwise) are bad people.

but the rank and file Republican supports repleaing it more than they support a minimum wage that adjusts for inflation.

Have you ever bothered to find out the arguments against raising minimum wage (even if you disagree with them) or is this also something you just ascribe to a bunch of fiscal conservatives sitting around and thinking up ways to screw people over while good guys like you fight against their malicious schemes?

I suppose I'm still stuck on: stagnant wages, college costs have exploded, the middle class struggles to keep their head above water -- and the Republican congress thinks, "We need to do something about this damn estate tax".

Are those mutually exclusive propositions?

Also, if land is passed down, they are already paying taxes on the property, why pay more based on the value of the whole property? Wouldn't they continue to pay property taxes annually on it anyway?

Exactly. Holding property theoretically sellable at price X is not equivalent to having X dollars in the bank. Wealth comes in a lot of different forms and this idea that "Well they are wealthy people inheriting from wealthy people, so why feel sorry for them?" doesn't really work. It may be a large amount of property, but that doesn't mean there tons of cash reserves around to pay the tax on said property such that nobody will even miss that money.

At the end of the day, I share the concerns expressed by our founding fathers about the perils of excessive wealth accumulation. They sought to create a system where wealth accrues to people who are talented and/or industrious, as opposed to people who are well-born. Modern America has gotten too far away from that

Have we? Are their stats to back this up? The data I've seen that people claims says this doesn't say this - because it fails to distinguish, just for one example, between "idle rich who inherited money and sat on it" and "someone who became rich just like their parents were, because they took their parent's teachings on business and monetary principles to heart".

(I also wouldn't mind seeing the minimum wage indexed for inflation and support taxing capital gains income at ordinary rates, so I'm not exactly a fan of rich guys

Taxing capital gains at ordinary rates (which I assume means summing it together with wages, salary, etc) would raise the capital gains taxes in the lower brackets and discourage smart investments by the lower & middle class even further then we already do.

 

[Mr. Deez]

Damn, you just decided to go after everybody. lol

Taxing capital gains at ordinary rates (which I assume means summing it together with wages, salary, etc) would raise the capital gains taxes in the lower brackets and discourage smart investments by the lower & middle class even further then we already do.

Yes, you are correct that people who are in the two lowest income tax brackets would get hit with a tax increase if they had long term capital gains. I'm an advocate for taxing all income the same way, regardless of how it's earned but doing so at the lowest rate possible. However, I'm not an advocate for never raising taxes on anybody in any situation. I didn't sign Grover Norquist's pledge.

 

[iatrogenic]

Beneficiaries inheriting land will continue to pay property taxes. Whatever is produced and sold using the land will continue to be taxed. The funds used by the deceased to acquire the land are already circulating in the economy.

The money used by the deceased to acquire assets that will be inherited such as securities (CDs, stocks, bonds) or personal possessions (art, autos, furniture) is already circulating in the economy and available for use to pay for college tuition, higher minimum wages, or for any other reason the holder of those funds may choose. The taxes paid on those transactions has already been sent to the government, which has more than likely spent it in accordance with somebody's philosophical idea of what is "right".

Any cash asset held (by the deceased then by the beneficiary) is most likely in a bank, which is lending that money out for productive purposes. The money typically isn't in a Folger's can in the back yard. The cash borrowed from the bank is used to buy building materials, autos, homes, machinery, fund tuition loans, etc., all of which have associated taxes (sales tax, income tax, capital gains tax, social security and unemployment tax on the employees and employers that produced the goods). Once those items are purchased, the seller pays the associated taxes and expenses, and deposits the remaining funds in a bank where they are loaned out again, and the cycle is repeated over and over. Regardless, the transactions are taxed.

The only way to accumulate wealth is to save your cash or buy assets that increase in value. Regardless of which you choose, the money is still available for use in the economy either from you purchasing the asset (at which time the seller either spends the money or banks it), or putting the cash in a bank that will loan the funds.

The estate tax is no more than the government acting like a stockbroker that is churning a client's account for additional fees. The government forces the sale of assets, and acts as a redistributor of cash. It punishes those that have saved, and benefits those that have not. The estate tax, like all taxes, curtails the freedom of any American (including Americans that plan on giving their assets to their children or any beneficiary they choose) forced to pay the tax. The tax doesn't add money to the economy, it just moves it around in an inefficient manner. The government is forcing you to sell something to pay a tax, as opposed to you having the freedom to sell it whenever you wish. If you want less freedom, support the estate tax. If you value a social program more than your freedom, support the estate tax. If you are okay with taxing someone else but not paying the tax yourself, go f yourself.

Ultimately, however, the most efficient, innovative, frugal, and hardest working individuals will again accumulate the wealth, and the government will again feel the need to tax those individuals to subsidize the "less than hardest working Americans" (needy children, orphans, the handicapped, and elderly are specifically excluded from this group). This will continue as long as we elect the "social engineers" that feel like the government, despite the abundance of evidence to the contrary, can make better economic decisions spending someone else's money (with virtually no threat of penalty for their screw-ups) than the individuals that had to work to earn the money.

 

[Dobeyville]

Allsome!

 

[NJlonghorn]

The estate tax, like all taxes, curtails the freedom of any American (including Americans that plan on giving their assets to their children or any beneficiary they choose) forced to pay the tax.

I agree with much (most?) of what you say. Yes, when people work hard to earn money, taking that money away is an impairment of freedom. Sometimes that impairment is justified, sometimes it isn't. But it clearly is an impairment.

That fundamentally changes, in my opinion, when the person who earned the money dies. Allowing a dead person to control money beyond his or her grave, such as by giving it to descendants, is an aristocratic, anti-meritocratic concept. It is not a natural right, and impairing it is not, imho, an impairment of one's freedom.

When you see a 50% estate tax, you see the government as taking away half of what rightfully belongs to the dead guy and whomever he wants to give it to. I see a 50% estate tax as a grant to the dead guy of the right to control 50% of his property even though he's dead. I think it is wise for the government to grant this right, but I don't see it as a fundamental right not to be infringed upon.

 

[iatrogenic]

I see a 50% estate tax as a grant to the dead guy of the right to control 50% of his property even though he's dead. I think it is wise for the government to grant this right, but I don't see it as a fundamental right not to be infringed upon.

Actually, you think it is your right to take 50% of someone else's property even though you did absolutely nothing to earn that property.

 

[Crockett]

NJ is not taking it. The government is. You think the government doesn't do anything. Would prosperous people be able to hang onto assets and make more money in a failed state like Somalia?

 

[iatrogenic]

NJ is not taking it. The government is.

But NJ agrees with the idea and, therefore, votes for representatives that think the same way he does.

 

[NJlonghorn]

Actually, you think it is your right to take 50% of someone else's property even though you did absolutely nothing to earn that property.

The guy is dead. He no longer owns anything and it is logically impossible to "take" anything from him.

We are both proposing a legal structure for what happens to the dead guy's property. You accept the aristocratic concept of inheritance as a right / freedom that the government should not infringe upon. I don't.

 

[iatrogenic]

Being dead is not the same as never existing. While alive we can make our wishes known for who inherits the wealth we earned and own, and we should be able to pass our ideas and accomplishments along to family and society as we see fit. That is called freedom. Our work product should not be tossed out or devoured by communist buzzards once we are gone.

The bigger picture, as I illustrated above, is that the "wealth" accumulated by a person does nothing to hinder anyone else's ability to succeed in our economy. The money used by the deceased to acquire assets is already circulating in the economy and can be earned via hard work, innovation, and efficiency. The cash accumulated by the deceased is available to anyone willing to take financial risk and borrow from a bank.

You support the idea of taking money you never earned. I support the idea of having to produce something of value to earn money. That, in summary, is the difference between us.