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

[SpencerH]

Originally posted by Oerdin
Great quote from factcheck about the supposed "double tax".

"Factcheck" - quite a name, pity its not applicable

From the IRS

Q: What is the Estate Tax?

The Estate Tax is a tax on your right to transfer property at your death. It consists of an accounting of everything you own or have certain interests in at the date of death (Refer to Form 706). The fair market value of these items is used, not necessarily what you paid for them or what their values were when you acquired them. The total of all of these items is your "Gross Estate." The includible property may consist of Cash and Securities, Real Estate, Insurance, Trusts, Annuities, Business interests and other assets.

Once you have accounted for the Gross Estate, certain deductions (and in special circumstances, reductions to value) are allowed in arriving at your "Taxable Estate." These deductions may include Mortgages and other Debts, Estate Administration expenses, property that passes to Surviving Spouses and Qualified Charities. The value of some operating business interests or farms may be reduced for estates that qualify.

Estate taxes are calculated on gross value minus a few deductions. It is not NOT calculated from unrealized capital gains (if that were the case I'd agree to it).

Without a capital gains calculation, the estate taxes are double taxation. Pretending otherwise is a lie.

[Dauphin]

Originally posted by Drogue
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.

Wedding gifts are exempt only upto a limit of £5,000 for the parents gift, and £2,500 for any other direct ancestor gifts. Others can give a smaller exempt amount which I forget at the moment.

If anything the inheritance tax system screws people who don't get married, they lose out on ~£260,000 of tax free bridging transfers through the spouse.

It also has to be pointed out to those who may not realise, but the inheritance tax free allowance of ~£260,000 is about the value of the average home in south-east England. So most homeowners will be liable to pay IHT.

[Dauphin]

Originally posted by SpencerH
Estate taxes are calculated on gross value minus a few deductions. It is not NOT calculated from unrealized capital gains (if that were the case I'd agree to it).

Without a capital gains calculation, the estate taxes are double taxation. Pretending otherwise is a lie.

The idea is that you are receiving the gift from the estate at no cost, so the relevant value to use is the value of the gift. The capital gain by the estate is neither here nor there in that regard.

[Sandman]

Originally posted by Drogue

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.

We'd still produce some food - delicacies and dairy products, at the very least.

I have a hard time believing that ending subsidies for France (which currently produces 125% of its food requirements) would cause agriculture to die out completely - it still has a load of competitive advantages, and these would start to be realised more efficiently if subsidies were brought to an end.

On a final note, about a third of food bought in the UK is thrown away. In the event of a crisis, we could tighten that up considerably.

[Last Conformist]

Originally posted by Drogue

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

Why do you think they're necessary? We've not had any obvious bad effects since scrapping them at the beginning of this year.

[Geronimo]

I favor boosting the "death tax" as much as possible to fund further income tax reductions. How anyone can see the income tax as less onerous than the estate tax I have no idea, but it seems congress decided it was better to eliminate the estate tax entirely before it had finished elimination of the income tax.

So long as we still have a federal income tax, reductions in the estate taxes only serve to make it that much harder to further reduce income taxes.

[Dinner]

Originally posted by SpencerH
Estate taxes are calculated on gross value minus a few deductions. It is not NOT calculated from unrealized capital gains (if that were the case I'd agree to it).

Without a capital gains calculation, the estate taxes are double taxation. Pretending otherwise is a lie.

Did you read what was written by factcheck before you responded? If you did then you would know that they said estate value was determined by total market value minus liabilities which is exactly what you said. What Factcheck also said is that many items in estates (realestate, stocks, bonds, etc) have accumulated capital gains which normally would have to be taxed when sold or transfered to another person but which would never be taxed without the estate tax.

Make sure you understand what the other guy said before you run off and claim he is wrong. Double taxation is not occuring here.

[Dauphin]

Double taxation is a stupid argument anyway. Being taxed twice at 10% is better than being taxed once at 40% f.e.
i.e. You have to look at the numbers if you start discussing things like that.

[Dinner]

Why did all of the people opposing the estate tax suddenly disappear? They claimed small farmers were routinely ruined by this tax yet when real facts come forward they run away and hope the thread sinks. Can't they defend their positions? Why are they afraid of the truth? When facts are displayed are they completely unable to defend their position?

[MrFun]

Originally posted by KrazyHorse


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

I have realized that. Disagreement =! surprise.

[SpencerH]

Originally posted by Dauphin


The idea is that you are receiving the gift from the estate at no cost, so the relevant value to use is the value of the gift. The capital gain by the estate is neither here nor there in that regard.

From the perspective of the money-receiver that is a relevant statement. All (most) exchanges of money are taxed in some way. So why not tax the passage of an estate from one person to another?

'The devil is in the details'. The estate tax on 'included money' is nearly 50%; a level that is clearly punitive IMO. How many of the wealthy, when faced with such a tax, will be looking for loopholes to allow them to pass their money to where they want it to go?

The punitive income tax rates of the late 70's promoted the avoidance of taxes through complex schemes and caused the migration of money from the countries with those punitive rates to countries with lower or no income taxes. That process was a factor in why our economies were stagnant i.e. 'the wealthy' were not investing their money in our countries. The eventual reduction of those taxes in the early 80's, on the other hand, eventually boosted the economies of Britain and the US.

There are arguments for some level of estate taxes but the present form of those taxes is merely punitive 'wealth redistribution' (that I oppose).

[Odin]

I get annoyed by the people who bleat " ZOMFG, not subsidizing teh family farm will lead to a downfall of America!!!1!111!!!1!!

[SpencerH]

Originally posted by Oerdin


Did you read what was written by factcheck before you responded? If you did then you would know that they said estate value was determined by total market value minus liabilities which is exactly what you said. What Factcheck also said is that many items in estates (realestate, stocks, bonds, etc) have accumulated capital gains which normally would have to be taxed when sold or transfered to another person but which would never be taxed without the estate tax.

Make sure you understand what the other guy said before you run off and claim he is wrong. Double taxation is not occuring here.

I believe I made it clear that there may be a component of an estate where capital gains may have occurred and that capital gains taxes may not have been paid. The fact that one owns real estate or stocks and bonds, however, does not mean that one has made a profit on the money invested. What about capital losses? The assumption that an estate might have untaxed capital gains means that there is untaxed capital gains is bogus. In any case, there is no calculation of capital gains or losses included in the estate tax calculation so that argument is totally irrelevant.

[SpencerH]

Originally posted by Dauphin
Double taxation is a stupid argument anyway. Being taxed twice at 10% is better than being taxed once at 40% f.e.
i.e. You have to look at the numbers if you start discussing things like that.

See above, if estate taxes were anything like 10% there would be far less detractors.

[Dinner]

Originally posted by SpencerH
'The devil is in the details'. The estate tax on 'included money' is nearly 50%; a level that is clearly punitive IMO. How many of the wealthy, when faced with such a tax, will be looking for loopholes to allow them to pass their money to where they want it to go?

In 2004 you'd have to have an estate worth more then $2 million to trigger the 47% max rate. The max rate next year (in less then 3 months) will be triggered at 4 million and will only be 46% (which will fall to 45% in 2006). These brackets are going to keep increasing in a big way so by 2011 very, very few people are going to get hit.

The goal of the estate tax is to insure out country is a meritocracy were the economy isn't dominated by a few extraordinarially rich families generation after generation. The estate tax lets people who've worked for money enjoy it for their life and pass a very healthy portion of that on to their heirs, however, it means that each successive generation must work hard if they want to stay ahead. The grandkids can get a leg up but they don't get the world on a silver plater. That's the American way and that's the best way to maintain a meritocracy.