This.
death to the death tax!
- Thread starter drychlick
- Start date
This.
Moral arbiter? Any transfer of wealth between individuals is subjected to taxation. In principle, there is no reason why heredity transfer should be exempted. In fact, not taxing it is a moral statement, since it is seen an "improper" to tax the transfer upon the death of the original owner.
Now, I agree that mom'n'pop's store should not be taxed when it goes to the sons, as the family farm, or the house, or anything under a certain limit of worth. It is very much a moral statement, one that I agree with. But the big-ass mansion or the inordinate sum of money in the bank? Tax it.
It's also to raise revenue while placing the burden on those most able to pay it. Dead people don't have many expenses, so they'll be able to pay it.
I wouldn't say the estate tax is meant to undermine the hereditary wealth in ther U.S. If it were, there wouldn't be so many loopholes. It may have had it roots in that reasoning, but now it's more of an "easy tax"- kind of like cigs and booze, it's a relatively easy tax to levy.
Back in 1987 when my dad died, we had to pay taxes on his estate- 55% to the feds and 12% to the state. Add in the 2% we paid to the executors and lawyers, and 69% of everything my dad owned was gone. Those were some tough checks to write out, but we were okay with writing those out. But I did have a problem in 2006 when we had to pay taxes on my brother's estate: I didn't think it was large enough that the federal government should have taken a chunk. And filing all of those forms is a huge hassle- I'm glad my brother that died in March was under the limit.
I have no problem with an estate tax as long as it's fair.
Actually you've hit on one of the biggest issues I have with the way inheritance tax is dealt with.
Property (ie land, houses) is not "worth" a dollar amount until it's sold. If you sell it, you get a price for it, and x% of that can go to the taxman as a sale of property. Fine.
But inheritance of property does not involve a sale. You have not released any of the equity in the home into cash form. So by taxing it, you can end up forcing people to sell their family home or business just to pay the inheritance tax.
Economists and government tend to treat being handed a house as exactly the same as being handed a big wad of cash to the value of the house. But it's not the same.
I think the estate tax is very reasonable. The person who earned the money is dead and doesn't need it, and the person who inherits the money did nothing to earn it except be related to someone. If someone gets wealthy through their own efforts, fine; they're being rewarded for what they did. But inherited wealth is like rewarding someone for what their grandfather did; that's no more reasonable than punishing someone for what their grandfather did.
My parents own a house; if I inherit that house on their death, I'm basically getting a free house. Even if I have to pay half that house's value in inheritance tax, I'm still getting a house by paying half as much as I'd normally need to pay to buy it. That's a great deal, which I get not by doing anything, but solely because I'm related to someone. Complaining about the inheritance tax I pay would be complaining about how I don't get to buy the house for even less than half of what someone else would pay.
My parents own a house; if I inherit that house on their death, I'm basically getting a free house. Even if I have to pay half that house's value in inheritance tax, I'm still getting a house by paying half as much as I'd normally need to pay to buy it. That's a great deal, which I get not by doing anything, but solely because I'm related to someone. Complaining about the inheritance tax I pay would be complaining about how I don't get to buy the house for even less than half of what someone else would pay.
Inheritance Tax is a very silly tax - it only forces people to waste a lot of time & money in creating complex financial vehicles for avoidance of its payment. The only people who really benefit from it are accountants and lawyers. As someone who's had to pay significant sums to the aforementioned groups to deal with IHT liabilities, I can testify to that!
The people it really hits are middle-earners who have just enough money to be encompassed by its limit, but not enough quite enough money to plan properly for defusing the looming tax bill. And the more one tightens the loopholes, the more one expands this pool of middle-earners, rather than hitting the richest, who can still afford to avoid it.
Since it's already a pointless tax, might as well just eliminate it. There are far simpler and less easily avoided ways to collect the same amount of revenue.
The people it really hits are middle-earners who have just enough money to be encompassed by its limit, but not enough quite enough money to plan properly for defusing the looming tax bill. And the more one tightens the loopholes, the more one expands this pool of middle-earners, rather than hitting the richest, who can still afford to avoid it.
Since it's already a pointless tax, might as well just eliminate it. There are far simpler and less easily avoided ways to collect the same amount of revenue.
By that logic, the government is confiscating property on the death of an individual and offering it to their heirs for half of market value... great deal indeed.
No, because they'll still be paying tax on purchases, investments, property, etc.
And it also causes property to be lost because so many people can't afford to pay the tax without selling the property. It's double dipping. If I leave my property to someone, they shouldn't have to pay any more taxes than I would have.
That's absolutely ridiculous. If somebody is left only property with no cash assets, how can they keep it?
So? They're not losing anything if they can't keep the property because they never had it. It belonged to a dead person. Why should property be taxed when it is given while alive or taxed when earned, but be exempt when dead?
And it's hard to imagine a property worth several million dollars of which not any can be sold to pay the estate tax? And if it's vital to transfer this inheritance, save enough money to pay the tax before you die if that's your dying wish.
69% of its value? On top of whatever other taxes are applicable? No, that's ridiculous.
I find the sense of entitlement you attribute to the government here vile and offensive. It's a one time transfer from a recently deceased person to their heirs. That property was subject to regular taxation before and the new owners will be subject to that same taxes. The government has no business raping anybody's estate in the confiscatory fashion it currently does.
Between federal, state and local taxes, we pay nearly half of what we earn to government in life. If we have a nest egg to pass on to our children after all the taxes on income, purchases and property, government gets more than half of what's left. It's disgusting.
I agree heartily. I want anything that I own to pass onto those who I wish to have after I've passed on. I would have worked hard my whole life (taxed on my wages), saved and spent (VAT and property related taxes) for my possessions and any estate that I have.
Government think they can tax my stuff before I gift it to those I care about, just because I'm dead? They can go fuck themselves with a rusty shovel
Anyone know if it's legal to just sign over your estate and possessions to your kith and kin before you die so it doesn't get affected by the death tax? Because that is what I would do.
I agree heartily. I want anything that I own to pass onto those who I wish to have after I've passed on. I would have worked hard my whole life (taxed on my wages), saved and spent (VAT and property related taxes) for my possessions and any estate that I have.
Government think they can tax my stuff before I gift it to those I care about, just because I'm dead? They can go fuck themselves with a rusty shovel
Anyone know if it's legal to just sign over your estate and possessions to your kith and kin before you die so it doesn't get affected by the death tax? Because that is what I would do.
There are usually gift taxes involved when you give over a certain amount to another person, regardless of your relationship. Property value counts, too.
The key, then, is to plan your estate so that you divest just under the gift tax limit every year, from the time you can afford to do so. Or you could, you know, just live off of what you've made your whole life and enjoy your retirement.
Personally, I expect my kids to make their own way in this world once they're adults. They best not expect me to leave them some kind of windfall. I wouldn't expect it from my parents (or grandparents), either.
These are actually good points, but here people are mostly talking about multi-million dollars estates, not the family house. If you inherit Wayne Manor, you will get also a big fat load of cash with that, and you will be fine paying taxes about the house.
Which is precisely why I'm not that worried about taxing massive estates. As I said earlier, my issue arises when ordinary houses begin to be affected because of rising house prices. The US seems to have a limit of ~$2m, but we're languishing around the £300 grand mark, and I know, for example my gf's mother's full inheritable estate went over the limit and she was a seamstress who was married to a builder. Not exactly royalty
Then I think we are in perfect agreement about the issue. Tax the family house, store, farm? Bad. Tax the aristocratic manor and gazillions of cash? Good, or at least we can talk about it. Just don't ask me to convert quid or bucks to euros because I'm too lazy for that!
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