Lets say you earn $10,000,000 in 2011 and die within the year with only a child to inherit your estate. IRS would take $7,300,000 of the original $10 million. That's a tax rate of 73%.

That is totally ridiculous and unfair.

That is totally ridiculous and unfair.

To the child that did nothing to earn it?:confused:

To the child that did nothing to earn it?:confused:

 

 

Sure. Why does it matter to you or society that a gift from a parent to a child was not "earned" by the child? At some point in time those assets, when earned, were taxed by the govt. Why should it be retaxed again? I've never understood why people get so upset when a person acquires by inheritance a large sum of money, other than perhaps envy.

 

I find the estate tax to be totally hypocritical to the oft stated economic theory that people in the U.S. don't save enough. Well, here's the kicker: you work hard to save money (and pay income tax on those earnings that you save), you invest those savings and pay more income tax on the earnings on those savings, and then instead of blowing it all late in life, you pass it on to your children and have to pay an additional tax on not only the savings but the earnings on those savings. Thus the estate tax becomes a dis-incentive to save money and accumulate wealth (which as even a first year economics student has learned is absolutely necessary for capitalism to flourish). Just try and convince me that the estate tax makes sense or is fair... and it will take much more than just pointing out Paris Hilton. For what its worth, people in this country still have the right to make fools out of themselves and she's just exercising that right. I don't believe public policy should be based on her actions.

 

Likewise the double taxation of Chapter C corporations earnings, when distributed to shareholders, makes no sense particularly when Chapter S corporations avoid it.

No envy here. I plan to make quite a bit of money in my life. I could also inherit a sum not to be described as pidlin', although my father has informed me of his intent to make sure that the last check bounces. :lol:

 

My point is that you could express displeasure at the estate tax, but I don't think you can call it unfair to the inheritors. The people that earned it can't take it with them. The people set to inherit are just lucky- and it can't be unfair for the government to take any share of the money that you were just lucky to get in the first place.

 

In any case, HHSDad is deliberately choosing a scenario that's a kick in the teeth.

To the child that did nothing to earn it?:confused:

 

What did the government do to earn 73% of it? I believe he meant it was unfair to the person that earned it and also earned the right to dispose of it as he/she saw fit.

What did the government do to earn 73% of it? I believe he meant it was unfair to the person that earned it and also earned the right to dispose of it as he/she saw fit.

Sorry, I don't buy that argument ONE BIT.

 

Living in America (another fortunate accident of birth) you're set in the greatest system in the world to earn your fortune. Nowhere else in the world, perhaps even in the HISTORY of the world, could you have been given a better opportunity to live in peace and prosperity on your own two feet. Our country gave you that opportunity, and you have an obligation to give back to the system that you benefitted so much from.

You're living in a dream world if you don't think the "poor" don't get a break. I'm not rich by any means, I don't think that those who have been more successful than I should have to shoulder my part of the tax burden, nor do I think I should have to shoulder burden of those less successful than I. I especially don't think any of the working class or the rich should have to pay for those too lazy to get up off their rear ends and quit living off of the system, in which we the tax payers foot the bill for. I, for one, am tired of that.

 

That is just the typical MANTRA hauled out by people to make an argument. You may have heard a story once about somebody that was on welfare and LOVED it b/c they didn't have to work, but I will bet money that you can't name me one person you know who is on welfare and LOVES it.

 

I have known plenty, working in education, and not one of them desired to be on welfare. In fact, most were even embarrassed to use the food-stamps they got b/c they didn't like people thinking they were poor.

 

Scripture: To whome much has been given, much will be required.

Spiderman: With great power comes great responsibility.

 

Choose your philosophy.

No envy here. I plan to make quite a bit of money in my life. I could also inherit a sum not to be described as pidlin', although my father has informed me of his intent to make sure that the last check bounces. :lol:

 

My point is that you could express displeasure at the estate tax, but I don't think you can call it unfair to the inheritors. The people that earned it can't take it with them. The people set to inherit are just lucky- and it can't be unfair for the government to take any share of the money that you were just lucky to get in the first place.

 

In any case, HHSDad is deliberately choosing a scenario that's a kick in the teeth.

 

 

Sure it can be unfair to take money from "someone just lucky to get in the first place"; money that has already been taxed. The govt should not have the right to just take someone's property. That is, unless you are a fan of communism or socialism, or believe it is wrong to be wealthy. The money accumulated by the parent was taxed at the time it was earned; what is left is his/her property and for the govt to tax it when he/she gives it away at death (or any other time) is more than unfair; its flat out wrong and again, against the economic policy of encouraging people to save and accumulate wealth. If for no other reason that many, many jobs have been created at companies started by people whom obtained their wealth by inheriting it. And who knows how much more money could have been invested to create even more jobs if the govt wasn't sucking off major dollars to be sent to D.C and state capitols to fund many numerous wasteful policies.

 

And isn't a bit ironic that people want to give farmers a break from the estate tax so they don't have to sell the family farm they'd inherit to pay the estate tax bill, yet are opposed to giving that same tax break to people that have to sell the family business that they'd inherit to pay the estate tax bill? Where's the logic behind that inconsistency?

 

 

I'm sorry but you haven't convinced me of the sound public policy supporting the estate tax. Because "they can" isn't getting it done. Try again.

 

And as for your father's desire to leave you nothing, that's his decision to dispose of his savings, his property in the manner he wants to. On the other hand, I hope that I am able to leave my sons enough money so that they can start or purchase the business that they want to own; or start the law firm they want to run; or be able to afford the house they want to buy; or etc, etc. See, I've seen a whole lot of people in my practice of law over the past several decades handle the money they inherited in a very responsible manner (many, many more times over those people who blew it or handled it irresponsibly) and use that money to start business ventures or invest in other companies that created a lot of jobs for Americans that they would not have been able to start or invest in without the inherited money. You may see the occasional bad in inherited money; I've seen the much more frequent good in it.

That is just the typical MANTRA hauled out by people to make an argument. You may have heard a story once about somebody that was on welfare and LOVED it b/c they didn't have to work, but I will bet money that you can't name me one person you know who is on welfare and LOVES it.

 

I have known plenty, working in education, and not one of them desired to be on welfare. In fact, most were even embarrassed to use the food-stamps they got b/c they didn't like people thinking they were poor.

 

Scripture: To whome much has been given, much will be required.

Spiderman: With great power comes great responsibility.

 

Choose your philosophy.

 

 

So using your logic then, as a teacher you must have observed many of those poor parents, so ashamed of being poor, getting extremely involved in the education of their children and encouraging them to stay in school and go to college to break the bonds of poorness?

 

From my experience in talking to Supers of inner cities, its more often than not the parents on welfare that seem to care the least about their children's education. Which seems to fly in the face of your logic that poor people are embarrassed about being poor; for if they were, they would be more involved in making sure their kids got a good education so they could get a good job.

 

And if you talk to social workers, they will be able to tell you of legions of people on welfare that are content to stay on welfare. Not all of them admittedly, but way more than you would allude to.

Sure it can be unfair to take money from "someone just lucky to get in the first place"; money that has already been taxed. The govt should not have the right to just take someone's property. That is, unless you are a fan of communism or socialism, or believe it is wrong to be wealthy. The money accumulated by the parent was taxed at the time it was earned; what is left is his/her property and for the govt to tax it when he/she gives it away at death (or any other time) is more than unfair; its flat out wrong and again, against the economic policy of encouraging people to save and accumulate wealth.

The money isn't being taxed twice to the same person. It was taxed to the person that earned it, and it was taxed to the person that inherited it. They are not the same person, so to claim that the money was taxed twice is erroneous. And we all know that if you gift money, that's taxable (outside of the 10,000 dollar per person per year.) The basic rule of the game is that when money changes hands from one person to another, it's taxed. There are additions and exclusions to that basic rule of the game, but that's what it is. And when you die, unless you're buried with it, money changes hands.

 

(I realize, by the way, that the tax is filed by the executor/executrix of the the estate. But the reality of the situation is that the money is taxed when it's lifted off the dead guy. It's changed hands)

 

For the record, I'm no Communist. I'm an auctioneer, I can't possibly be a Communist. :lol:

 

If for no other reason that many, many jobs have been created at companies started by people whom obtained their wealth by inheriting it. And who knows how much more money could have been invested to create even more jobs if the govt wasn't sucking off major dollars to be sent to D.C and state capitols to fund many numerous wasteful policies.

This is the real argument. You believe that when money is taxed, it is lost forever, practically shoveled into a furnace to be burned. Whereas I believe the money is put to good use.

 

And isn't a bit ironic that people want to give farmers a break from the estate tax so they don't have to sell the family farm they'd inherit to pay the estate tax bill, yet are opposed to giving that same tax break to people that have to sell the family business that they'd inherit to pay the estate tax bill? Where's the logic behind that inconsistency?

Nope, not ironic at all.

 

Family farms are subsidised heavily by the Federal government. Big business agro, overseas supplies and their (lets admit it) inefficiancy have made them non-viable. We have, as a society, decided that family farms are something that we want to keep around for reasons like small farm and organic fresh produce and cattle, and because we find the idea of family farms to be important to our national character. So it doesn't make much sense to shuffle money off of them, because the whole point of the subsidy is that even though their land and goods have value, they can't profit on them.

The money isn't being taxed twice to the same person. It was taxed to the person that earned it, and it was taxed to the person that inherited it. They are not the same person, so to claim that the money was taxed twice is erroneous. And we all know that if you gift money, that's taxable (outside of the 10,000 dollar per person per year.) The basic rule of the game is that when money changes hands from one person to another, it's taxed. There are additions and exclusions to that basic rule of the game, but that's what it is. And when you die, unless you're buried with it, money changes hands.

 

(I realize, by the way, that the tax is filed by the executor/executrix of the the estate. But the reality of the situation is that the money is taxed when it's lifted off the dead guy. It's changed hands)

 

For the record, I'm no Communist. I'm an auctioneer, I can't possibly be a Communist. :lol:

 

This is the real argument. You believe that when money is taxed, it is lost forever, practically shoveled into a furnace to be burned. Whereas I believe the money is put to good use.

 

Nope, not ironic at all.

 

Family farms are subsidised heavily by the Federal government. Big business agro, overseas supplies and their (lets admit it) inefficiancy have made them non-viable. We have, as a society, decided that family farms are something that we want to keep around for reasons like small farm and organic fresh produce and cattle, and because we find the idea of family farms to be important to our national character. So it doesn't make much sense to shuffle money off of them, because the whole point of the subsidy is that even though their land and goods have value, they can't profit on them.

 

 

As you pointed out, it is an obligation of the decedent's estate, so really it is taxed twice to the same person. Gift tax is also paid by the giving party I believe. So its taxed twice.

 

Yes I do to some extent believe its shoveled into the furnace. I believe that govt will find a way to spend the money it receives. The way to prevent wasteful govt is not to control spending (impossible) but to limit the revenues received.

 

As to your last point, we don't want to keep small family owned businesses around? Many of which, while valuable on a balance sheet with a lot of capital invested in real estate and equipment, don't spin off millions of dollars for the owners.

 

Personally I think small family owned businesses are just as much a part of our national identity that farms are. As for the organic foods thought, personally I'm more interested in buying American made products manufactured by the small businesses still operating in America than I'm interested in buying organic foods. Really there is no good rationale, when you take out the "emotion" of the family farm, for the distinction.

So using your logic then, as a teacher you must have observed many of those poor parents, so ashamed of being poor, getting extremely involved in the education of their children and encouraging them to stay in school and go to college to break the bonds of poorness?

 

From my experience in talking to Supers of inner cities, its more often than not the parents on welfare that seem to care the least about their children's education. Which seems to fly in the face of your logic that poor people are embarrassed about being poor; for if they were, they would be more involved in making sure their kids got a good education so they could get a good job.

 

And if you talk to social workers, they will be able to tell you of legions of people on welfare that are content to stay on welfare. Not all of them admittedly, but way more than you would allude to.

 

You attribute cause and effect that is simply not there. If I am poor and working 2 low paying jobs, when is it that you would expect me to be involved in my child's education, plus, if my child has to work to help pay the bills - when will my child be involved in his education.

 

Do you realize that you get fired from the local Speedy Mart when you have to call in sick a couple of times b/c your child has to stay home from school - and then you are without a job. Imagine trying to have a school visit by taking off work, ain't gonna happen.

 

Your attempt to put middle class values on lower class groups simply can't/doesn't happen. What the poor have to put their value on is making enough money today to pay the rent and buy some food. They can't spend a lot of time thinking about tomorrow.

 

I know it seems so easy to just say - they need to make different decisions, but when you are right there in the middle of it the decisions don't come so easy. It is hard to understand if you have never experienced it, and even harder to explain when you have.

 

BTW, as I anticipated you could not name one person who loves to be on welfare and has a desire to remain there. I would bet that 95% of the people who claim that are a lot of people like that cannot name one - they just assume that it is true.

That is just the typical MANTRA hauled out by people to make an argument. You may have heard a story once about somebody that was on welfare and LOVED it b/c they didn't have to work, but I will bet money that you can't name me one person you know who is on welfare and LOVES it.

 

I could, more then likely, name around 100 people who love being on welfare. And these people have told me that they would not live any other way, they think we are stupid of working for a living. I have had people tell me how they got on welfare and how they stay on it. They teach their children that only a stupid person gets a job.

 

In my line of work I see these people daily, and I can tell you they are not stupid, mentally ill, or handicapped. They just do not want to work for a living. They have certain places that they go and know the people there will give them things. They have certain people who will give them food, clothes, money, just about anything they want. And on top of that they get a check each month for doing nothing.

 

Many of those parents you are talking about are snowing you. They play the game of feel sorry for me to everyone who will listen. If you call their bluff, you will see the real person behind the welfare.

 

DISCLAIMER:

The above statements are not to be misconstrued to pertain to all welfare recipients. These statements are concerning a large majority of welfare recipients, but not concerning people who are on welfare for a temporary basis do unexpected financial collapse.

As you pointed out, it is an obligation of the decedent's estate, so really it is taxed twice to the same person. Gift tax is also paid by the giving party I believe. So its taxed twice.

 

Yes I do to some extent believe its shoveled into the furnace. I believe that govt will find a way to spend the money it receives. The way to prevent wasteful govt is not to control spending (impossible) but to limit the revenues received.

 

As to your last point, we don't want to keep small family owned businesses around? Many of which, while valuable on a balance sheet with a lot of capital invested in real estate and equipment, don't spin off millions of dollars for the owners.

 

Personally I think small family owned businesses are just as much a part of our national identity that farms are. As for the organic foods thought, personally I'm more interested in buying American made products manufactured by the small businesses still operating in America than I'm interested in buying organic foods. Really there is no good rationale, when you take out the "emotion" of the family farm, for the distinction.

And so we come to our basic divide. I think the Federal government provides good and useful services; I think that while the moneyis paid by the estate, it is a technicality to HELP those that recieve the money (no income tax on it, outside of IRAs I believe.) And since the deceased can no longer use it, it's REALLY the inheritors that are taxed. The only people that might suffer are those that want to be burried with their money, they have a legitimate complaint.

 

You still don't understand my point about small business and family farms. Family farms are almost by definition a failing enterprise. We prop them up, because otherwise they will certainly disappear, and we've decided that we don't want that. Small family businesses are not in the same straits. Some are going well, and some aren't. So it goes. My family owns one, and it's going quite splendid (I'm even practicing my bourgeoisie tone. like it? :lol:)

...This is the real argument. You believe that when money is taxed, it is lost forever, practically shoveled into a furnace to be burned. Whereas I believe the money is put to good use...

 

When put into the hands of the bureaucrats, it may as well be...