Time: GOP senators looking for a RICH KATRINA CORPSE for estate tax pitch

[Dinner]

Originally posted by rah
If ALL the GOP are against small business and farmers, why do they want to repeal the estate tax since it would help farmers and small businesses.
Another generalization that rings untrue.

Rah, did you miss my post? By 2011 the cap is already going to have increased to $10 million and that's the total value minus debts. If someone has more then $10 million free and clear then they aren't really that small of a business now are they?

[mrmitchell]

Tell my buddy. I'm sure he'll be pleased to know he didn't have to sell their farm.

I guess they didn't look very hard. I personally know of 2.

Really? They specifically had to sell their 100% real family farm and only because estate taxes couldn't be paid?

It was a very reputable source. I'm off to try and find it now...

[MrFun]

Originally posted by KrazyHorse


Ah, capitalism based on the premise that there's something magical about the current system which entitles you morally to unfettered rights over whatever objects come into your possession....

I strongly disagree with your statement here. Everyone should be entitled to the right of their own property that they have accumulated through years of work.

And yes, that includes deciding who will inherit your property. I see nothing wrong with this.

The way you said, ". . . . . entitles you morally to unfettered righs over whatever objects come into your possession" seems to be a cold depreciation of the right to property.

[mrmitchell]

http://www.washingtonpost.com/wp-dyn/content/article/2005/07/23/AR2005072300741.html

In 2000 only 1,659 farms had to pay estate taxes
And only 138 couldn't cough up

And I dont think that even brought this into play

Heirs who agree to keep the farm or business assets within the family for 10 years after death can reduce the taxable amount of the estate by 40 percent to 70 percent. And if the farm or business is at least 35 percent of the gross value of the estate, payments can be spread out over 14 years.

http://www.factcheck.org/article328.html

[Dinner]

Originally posted by Drogue
That's true, and is why I support the estates tax, but there are a still a few things that don't feel quite right:

It's money that's already been taxed. The person owns it and pays income tax on it when it's earned, and when they die they pay tax again on it.

You are not strictly correct. The parent earned it and paid taxes on it but now the money is going to a different person so it is a new transaction. Just like I earn money (and pay taxes on that income) then buy a DVD which I must pay taxes on because this transaction moves the money into someone elses hand. Each transaction has only been taxed once.

What's the difference between a gift to a child and inheritance?

The IRS has one law covering inheritance & gifts (look it up on the IRS's web site and you will find it grouped together just as I did) and the rule is gifts up to 11k per year are nontaxed (the reciever must still include it as part of their income tax if they are in a taxable bracket) but in the event of an inheritance you get a special exception where you don't have to pay a tax on that transaction up to $1.5 million in inheritance in 2005 or $3 million in 2006 (going up to $10 million in 2011).

Even this $10 million dollar cut off can be avoided through proper planning which is the reason why one of your example families got away Scot free while the other didn't. Lack of planning on their part isn't my problem.

[Dinner]

Originally posted by mrmitchell

http://www.washingtonpost.com/wp-dyn/content/article/2005/07/23/AR2005072300741.html

In 2000 only 1,659 farms had to pay estate taxes
And only 138 couldn't cough up

And I dont think that even brought this into play


http://www.factcheck.org/article328.html

Good find! The truth is the threshold which will trigger the estate tax will be DOUBLED next year to $3 and will continue to adjust upwards until it reaches $10 million. There will be virtually NO family farms effected starting Jan 1st which is about 3 months away.

This "movement" to eliminate the estate tax is completely motivated by the few people with truly vast estates who are pouring money into the pockets of some corrupt Republican Congressmen who are willing to write them special laws if they're paid enough to do so.

Edit: I looked it up and in 2000 the threshold was $1million while today it is $1.5 million so we already likely have far fewer family farms hit with the estate tax then we did in 2000 (whcih was only 130-140). In three months the threshold will be DOUBLED so the number will effectively be zero.

[Sava]

mrmitchell bringing down the PWNAGE

[Dinner]

From Factcheck.org which mrmitchell was kind enough to link to.

And though the ad focuses on family farms and businesses, the truth is that very few actually pay the estate tax. The Tax Policy Center projects that roughly 440 taxable estates were primarily made up of farm and business assets in 2004.

And with the doubling of the threshold to $3 million dollars that number should drop damn near to zero. That happens already without anyone doing anything and it will continue to climb until the threshold is $10 million. Personally, I think $10 million is to high and the bar should be set lower but it does show how few the number of people who have to pay the estate tax are. The "repeal the estate tax" lobby does nothing but sell hore manure and lies.

The effective rate was far less for smaller estates. Of the 440 taxable family farm and business estates in 2004, two out of five paid an average rate of only 1.6 percent.

A tax rate of 1.6%? OH NOES! Truly this is an unbearable burden on family farms.... well, the 440 which had to pay the tax. That even this tiny number will already be reduced to zero with existing adjustments shows what lying snake oil salesmen these Republican tramps are.

[Dinner]

Great quote from factcheck about the supposed "double tax".

"Double Tax?"
Both the radio and TV ads call the estate tax a "double tax," which is only partly accurate. It is true that some portion of a taxable estate might be made up of cash that was taxed before, when it was earned as income. But many estates are made up of stocks, bonds, real estate or other holdings that have appreciated greatly in value over the lifetime of the person who owned them. The owner didn't pay taxes on that profit during his or her lifetime because they weren't sold and the profits weren't turned into cash, or "realized." Furthermore, heirs who inherit such appreciated assets won't have to pay tax on that unrealized profit either. The estate tax is the only tax that applies to such unrealized capital gains.

[KrazyHorse]

Originally posted by MrFun


I strongly disagree with your statement here.

What statement? That post contains contains no objectionable opinions. It merely defines somebody's ideology based on their opinion.

The way you said, ". . . . . entitles you morally to unfettered righs over whatever objects come into your possession" seems to be a cold depreciation of the right to property.

I suppose you didn't notice when I called myself a socialist, then.

[Gatekeeper]

KrazyHorse:

I live in farm country, son, and let me tell you something you oughta know before tossing out *insulting* generalizations about family farms: Most of the sows at the trough who get federal subsidies are *corporate* farms, not your mom-and-pop family farm, which really is just about dead as the dodo bird.

Gatekeeper

[KrazyHorse]

No **** most of the sows are corporate.

More's the pity. I'd rather that handouts went to poorer individuals than to line the pockets of already-rich large shareholders.

Personally, I think that the US (and most other developed countries with the notable exceptions of Australia, Canada and New Zealand) have retained far too much farming capacity overall. This is a result of European and American addiction to subsidising a losing industry for some strange and incomprehensible reason. It made sense in a certain fashion to not allow the institution of the family farm to collapse suddenly (throwing millions at once into chaos), but the subsidies have been extended long past any reasonable readjustment period. There is no reason whatsoever that corporate farmers have should be allowed to continue to suck at the teat of the public.

Farmers are hard workers. I know that for a fact. The problem is that some people are wedded to the idea that it's inherently good for the family farm as an institution to survive indefinitely, and they're willing to throw billions of dollars per annum at the problem to ensure that the last few sickly ones can scrape out their existence one step ahead of foreclosure.

Most farmers, if they hold large estates freely would be well-advised to sell out. Farms don't generally show the kind of income which would justify holding on to the enormous capital sunk into the value of the land and equipment, not to mention the value of their labour each year.

It just really drives me nuts when people share the sentiment that "since an industry has profited in the past it should continue to do so, even at the expense of the public purse" (can't remember the exact quote)

[KrazyHorse]

God forbid that the state pay for school or health insurance or social programs, but find an industry in which family-owned businesses are losing money and there's no end to the welfare that industry will get...

[Drogue]

Originally posted by Oerdin
You are not strictly correct. The parent earned it and paid taxes on it but now the money is going to a different person so it is a new transaction. Just like I earn money (and pay taxes on that income) then buy a DVD which I must pay taxes on because this transaction moves the money into someone elses hand. Each transaction has only been taxed once.

We have the system of Value Added Tax, which means when you buy a good, you pay tax on it, but when you sell it, you can claim the tax back. You only pay tax on the total value added. So if a company buys a load of steel, it pays VAT. If it then makes a car out of it, and sells that, the buyer of that car pays VAT on the full car, and the company claims back the VAT on the steel and all other inputs. We don't pay tax per transaction, we pay it per value, so the total amount of tax paid on a good and all it's raw materials put together is 17.5% of the final selling price. All other tax is claimed back. If a person then sold that good for the same price they bought it, the buyer would pay VAT and the seller would claim it back, because as there's no value added, there's no extra tax to pay.

And giving money to your heirs is a transaction? What do they get in return for it then?

Don't get me wrong, I think estates tax is a necessary evil, but I still think it's an evil.

Originally posted by Oerdin
The IRS has one law covering inheritance & gifts (look it up on the IRS's web site and you will find it grouped together just as I did) and the rule is gifts up to 11k per year are nontaxed (the reciever must still include it as part of their income tax if they are in a taxable bracket) but in the event of an inheritance you get a special exception where you don't have to pay a tax on that transaction up to $1.5 million in inheritance in 2005 or $3 million in 2006 (going up to $10 million in 2011).

Even this $10 million dollar cut off can be avoided through proper planning which is the reason why one of your example families got away Scot free while the other didn't. Lack of planning on their part isn't my problem.

Yes, but in the UK the threshold is around £250,000, we don't pay tax on gifts except those given within 7 years of death, as they make up part of the estate. Wedding gifts are exempt though, as are charitable donations and a few other things.

[Drogue]

Originally posted by KrazyHorse
No **** most of the sows are corporate.

More's the pity. I'd rather that handouts went to poorer individuals than to line the pockets of already-rich large shareholders.

Personally, I think that the US (and most other developed countries with the notable exceptions of Australia, Canada and New Zealand) have retained far too much farming capacity overall. This is a result of European and American addiction to subsidising a losing industry for some strange and incomprehensible reason. It made sense in a certain fashion to not allow the institution of the family farm to collapse suddenly (throwing millions at once into chaos), but the subsidies have been extended long past any reasonable readjustment period. There is no reason whatsoever that corporate farmers have should be allowed to continue to suck at the teat of the public.

The reasoning behind it is that if we didn't subsidize agriculture, we wouldn't do any of it, and we'd import everything from where wages are cheaper. For most goods, that would be fine, but when it comes to food, that means developed countries won't be self sufficient. That if there's a disaster and trade stops, or the countries exporting it decide to stop, we have no food. This worried many leaders, who decided to subsidize agriculture enough to make sure we still produce enough to survive, if something like that happened.

Yes it sucks, farm subsidies are, IMHO, the biggest problem in the world today. However I can see the reasons for them.