The death tax

[DanielX]

I think the estate tax is one of the best ways to keep a Democracy from becoming feudalism like Czarist Russia.

Flatly absurd. The best way tp keep feudalism from taking place is to...

1. Ban involuntary servitude.
2. Not have any royalty.
3. Possess a system in which all men and women are equal under the law.
4. Not have an oppressive tax structure which would result in institutionalized serfdom (see China circa 3000 BC - 1900 AD).

Incidentally, the biggest dangers in the US revolve around 4 and to a lesser extent 3.

[opebo]

I think the estate tax is one of the best ways to keep a Democracy from becoming feudalism like Czarist Russia.

Flatly absurd. The best way tp keep feudalism from taking place is to...

1. Ban involuntary servitude.

Poverty makes servitude inevitable.  Having the choice of starvation is a rather dubious definition of 'voluntary'.

You must be logged in to read this quote.

The owning class form a royalty or aristocracy in the practical sense.

You must be logged in to read this quote.

Hah! You must be joking.

You must be logged in to read this quote.

Progressive taxation eliminates this danger.

You must be logged in to read this quote.

No, taxation was applied by moderate (liberal) governments to the owning classes and very high earners.  The danger of regressive or oppressive taxation is greater now due to the control of government by extreme right-wingers.

[Giant Saguaro]

I think they should be abolished. I think the estate and/or death tax is really a ridiculous tax - it's the principle behind it. The government should not tax my children/grandchildren on what I want to leave behind to those who I want to leave it to.

It will not make anyone 'work harder.' As Carl points out, wealthier people will find enough ways around them and it really won't hurt them that badly to begin with, so it just ends up sticking it to the smaller guy, the person with the farm or the middle class person. An outrageous tax, really.

I think the estate tax is one of the best ways to keep a Democracy from becoming feudalism like Czarist Russia.

That's an interesting take on it. To me, low property taxes (and lower cost of housing) keep that from happening. The property tax situation is mostly like a response to feudalism - the more you own and where you own it, the more you pay. Like in PA - your property taxes are pretty awful high (like in a lot of states) and when you couple that with rising costs more and more people are being priced out of the market with each passing day, really.

I was talking to someone a while back who is an engineer around Philly and she works in an office somewhere around there and she told me what her property taxes were just for a house and a small piece of ground and then how when they (she and her husband) sold it and bought a piece of property along the coast in Delaware they quickly saw that their property taxes were a fraction of what they were around Philly. I was a little surprised.

[TheresNoMoney]

It will not make anyone 'work harder.' As Carl points out, wealthier people will find enough ways around them and it really won't hurt them that badly to begin with, so it just ends up sticking it to the smaller guy, the person with the farm or the middle class person. An outrageous tax, really.

It doesn't effect the smaller guy, farmers, or the middle class. This is a flat-out lie that is widely heard around the internet.

You have to be a multi-millionaire for the estate tax to effect you.

You can avoid estate tax by setting up trusts, donating property to children/relatives/charities, etc. Only those who are truly filthy-wealthy aren't currently able to avoid the estate tax.

[Giant Saguaro]

It will not make anyone 'work harder.' As Carl points out, wealthier people will find enough ways around them and it really won't hurt them that badly to begin with, so it just ends up sticking it to the smaller guy, the person with the farm or the middle class person. An outrageous tax, really.

It doesn't effect the smaller guy, farmers, or the middle class. This is a flat-out lie that is widely heard around the internet.

You have to be a multi-millionaire for the estate tax to effect you.

You can avoid estate tax by setting up trusts, donating property to children/relatives/charities, etc. Only those who are truly filthy-wealthy aren't currently able to avoid the estate tax.

Yes and No. I know some folks back around March or April who were in the process of dividing up an estate, normal middle type people, and they were getting, as they put it, "rammed." I also think it probably depends upon the state. Now I think where you're right is about the ways around them, but of course, one has to know about that stuff in order to do it. A lot of people got an education regarding this in reference to my friend's situation. So that's great - I say get around it any way you can because it's an absurd tax.

[TheresNoMoney]

Yes and No. I know some folks back around March or April who were in the process of dividing up an estate, normal middle type people, and they were getting, as they put it, "rammed."

The estate tax doesn't affect middle class people. Perhaps they were referring to something different. You have to have at least $1.5  million in net worth (assets - liabilities) to trigger the estate tax. And it goes up to $3.5 million by 2009.

I also think it probably depends upon the state.

The estate tax is a federal statute. 

Now I think where you're right is about the ways around them, but of course, one has to know about that stuff in order to do it.

They just have to hire a halfway-decent lawyer. There are many thousands of lawyers that deal with the estate tax and also many tax accountants. You can shield much of your net worth from the estate tax with good planning.

[Giant Saguaro]

Yes and No. I know some folks back around March or April who were in the process of dividing up an estate, normal middle type people, and they were getting, as they put it, "rammed."

The estate tax doesn't affect middle class people. Perhaps they were referring to something different. You have to have at least $1.5  million in net worth (assets - liabilities) to trigger the estate tax. And it goes up to $3.5 million by 2009.

I also think it probably depends upon the state.

The estate tax is a federal statute. 

Now I think where you're right is about the ways around them, but of course, one has to know about that stuff in order to do it.

They just have to hire a halfway-decent lawyer. There are many thousands of lawyers that deal with the estate tax and also many tax accountants. You can shield much of your net worth from the estate tax with good planning.

Which makes it really kind of useless then, doesn't it (if one can get out of it so easily)?

So then this must have been a different tax - it was not a federal tax, so it was a state estate tax then. Because I know for a fact they called it an estate tax.

[TheresNoMoney]

Which makes it really kind of useless then, doesn't it (if one can get out of it so easily)?

It's not THAT easy. If you have net worth of $5 million+ you probably wont' be able to get out of it.

So then this must have been a different tax - it was not a federal tax, so it was a state estate tax then. Because I know for a fact they called it an estate tax.

You might want to check on that. What state are you in?

[Giant Saguaro]

Which makes it really kind of useless then, doesn't it (if one can get out of it so easily)?

It's not THAT easy. If you have net worth of $5 million+ you probably wont' be able to get out of it.

So then this must have been a different tax - it was not a federal tax, so it was a state estate tax then. Because I know for a fact they called it an estate tax.

You might want to check on that. What state are you in?

Woops! Scoonie - I'm off, I'm wrong, cancel that. I just asked someone who is here and it turns out these people have more money than I thought - part owners of a resort, so yeah, as they put it, they got clobbered. "Rammed" was the word I heard used - lol. So it was federal and I would say they were worth probably - oh, several million anyway. And by several I'm thinking 3 or maybe up. I know these people were doing some serious b*tching, they didn't like it.

The folks with the farm were a different situation. They were in Pennsylvania and were claiming to have been hit with it too. Now I'm assuming they were more middle.

I go back and forth between Arizona and Pennsylvania as I have family/places in both. My family is split largely between the two states - but more in PA. Now the situation in AZ, I'm reading, is such that they will be doing away with the state tax as soon as the federal one is gone. It's either that or they are just doing away with the state one regardless of what they do with the federal one. PA I need to research.

Either way, it's a tax I don't like, I'm very uncomfortable about the government taxing one's estate after death. Of course I don't like property taxes either, so that's just me.

[MODU]

Abolish.

[minionofmidas]

Raise to 100%. It's the Christian position.

[© tweed]

I'd keep it where it is.  Although it's an evil concept, governments are short on funds as is and we can't chop off taxation left and right just yet.  But eventually I'd like to see it gradually lowered and then abolished.

[TheresNoMoney]

Woops! Scoonie - I'm off, I'm wrong, cancel that. I just asked someone who is here and it turns out these people have more money than I thought - part owners of a resort, so yeah, as they put it, they got clobbered.

Yep, that's what I thought. Only millionaires are affected by the estate tax.

Either way, it's a tax I don't like, I'm very uncomfortable about the government taxing one's estate after death.

I think the estate tax threshold should be around $4 or $5 million. I'm not going to feel bad for multi-millionaires here.

[Emsworth]

I'm not going to feel bad for multi-millionaires here.

That should hardly be the criterion for determining if a tax is just.

[CARLHAYDEN]

I'm not going to feel bad for multi-millionaires here.

That should hardly be the criterion for determining if a tax is just.

The question to my mind becomes where should the revenue come from to fund legimate government services?

While I favor raising (and indexing) the estate tax to about four million dollars (at this time), I'd much sooner see a multimillion dollar estate take the hit, than raise taxes on the working guy.

This is one of the reasons I'm a Democrat.

[jimrtex]

The question to my mind becomes where should the revenue come from to fund legimate government services?

Let's say that someone has $10 million in capital which produces $1 million per year in income.  Let's say that they spend whatever is left after paying income (and other) taxes.   If they die, their heirs would continue to have $1 million in income which would be subject to income (and other) taxes.  Or if they start spending down the estate, the proceeds will go to other people who will pay income tax.  Inheritence simply transfers the money from one person to another.

So why should the state get an extra cut because someone dies?

[CARLHAYDEN]

The problem is where the revenue should come from to fund legimate government services.

To the extent the inheritance/estate tax is decreased or even eliminated, where will the lost revenues come from?

Are we going to increase taxes on Joe and Jill working person to help the Opebos of the world escape taxes?

Now, as I've tried to make clear, I believe the exemption is presently too low, and should be increased, to benefit family farms/ranches and small businesses.

[Emsworth]

Are we going to increase taxes on Joe and Jill working person to help the Opebos of the world escape taxes?

No, we are going to cut wasteful government programs.

[minionofmidas]

So why should the state get an extra cut because someone dies?

Why should you get a cut because your father dies?

[Emsworth]

So why should the state get an extra cut because someone dies?

Why should you get a cut because your father dies?

Because the property belonged to the father, who could dispose of it as he pleased.

[minionofmidas]

So why should the state get an extra cut because someone dies?

Why should you get a cut because your father dies?

Because the property belonged to the father, who could dispose of it as he pleased.

He could most certainly not dispose of it as he pleased. He could not invest it in hired hitmen to kill all his relatives. He could not legally invest it in a grade heroin. And so on.
Anyways, what about where there's no will?

[CARLHAYDEN]

Are we going to increase taxes on Joe and Jill working person to help the Opebos of the world escape taxes?

No, we are going to cut wasteful government programs.

It would be nice to reduce much of government, but, sadly, I don't see this happening.

[Emsworth]

He could most certainly not dispose of it as he pleased. He could not invest it in hired hitmen to kill all his relatives...

Those actions violate the rights of others. Merely giving property to one's child does not.

You must be logged in to read this quote.

The law holds that the estate goes to the children. The father presumably knows this; the absence of a will disposing the property in some other fashion implies that he wanted the property to go his children, as the law originally prescribed, and that a will was unnecessary.

Are we going to increase taxes on Joe and Jill working person to help the Opebos of the world escape taxes?

No, we are going to cut wasteful government programs.

It would be nice to reduce much of government, but, sadly, I don't see this happening.

Yes, but we are talking about the principle of the estate tax. After all, you did bring up principle when you mentioned taxing working men instead of the "Opebos of this world."

[CARLHAYDEN]

He could most certainly not dispose of it as he pleased. He could not invest it in hired hitmen to kill all his relatives...

Those actions violate the rights of others. Merely giving property to one's child does not.

You must be logged in to read this quote.

The law holds that the estate goes to the children. The father presumably knows this; the absence of a will disposing the property in some other fashion implies that he wanted the property to go his children, as the law originally prescribed, and that a will was unnecessary.

Are we going to increase taxes on Joe and Jill working person to help the Opebos of the world escape taxes?

No, we are going to cut wasteful government programs.

It would be nice to reduce much of government, but, sadly, I don't see this happening.

Yes, but we are talking about the principle of the estate tax. After all, you did bring up principle when you mentioned taxing working men instead of the "Opebos of this world."

The difference being that the source of revenue is a realistic matter, whereas, again sadly, the reduction in government expenditures appears to be a pipe dream right now.

[minionofmidas]

He could most certainly not dispose of it as he pleased. He could not invest it in hired hitmen to kill all his relatives...

Those actions violate the rights of others. Merely giving property to one's child does not.

You must be logged in to read this quote.

The law holds that the estate goes to the children. The father presumably knows this; the absence of a will disposing the property in some other fashion implies that he wanted the property to go his children, as the law originally prescribed, and that a will was unnecessary.

You must be logged in to read this quote.

Yes...so there is a prescription in the law then!
(I don't know about England and America, but in Germany it's actually illegal to totally disown your children and surviving spouse. There is a set minimum proportion or amount, whatever is less, that they have to receive even if the will states differently.)