Death and taxes and both still certain.

[Kidlicious]

Originally posted by Arrian
How so? How would it be any different (with regard to evasion) than now?

-Arrian

I'm not sure. I may have spoken too soon. There's already incentive to make many beneficiaries with the 11,000 deduction per beneficiary.

They could set the inheritance tax levels at what ever they wanted. However, it seems to me that the only time that you increase tax collection is when you purposefully close loopholes or increase rates. Creating tax law to be more fair usually results in less tax collection.

[Arrian]

Erm... there's not particular reason it has to be that way. Obviously, if the people doing the changes are morons...

Oh, wait. That would be Congress.

Nevermind.

-Arrian

[Kidlicious]

Originally posted by Arrian
Erm... there's not particular reason it has to be that way. Obviously, if the people doing the changes are morons...

Oh, wait. That would be Congress.

Nevermind.

-Arrian

They need to hire a bunch of tax accountants to find the loopholes before the laws pass so that they can close the loopholes before anyone can take advantage of them.

[duke o' york]

There's already incentive to make many beneficiaries with the 11,000 deduction per beneficiary.

Are you suggesting that we set up a 'poly company and tout our services to rich people so that they can bequeath some of their estate to us until they reach zero tax with the $11,000 exemption, which we then return to the rightful heir after deduction of management fees?

[duke o' york]

Originally posted by Kidicious

They need to hire a bunch of tax accountants to find the loopholes before the laws pass so that they can close the loopholes before anyone can take advantage of them.

And have the tax accountants put themselves out of work?

[Spiffor]

Originally posted by duke o' york
Spiffor, inheritance tax comes out of the value of the estate so there is no need to sell anything before you die.

Exactly. As such, from the taxpayer's point of view, it is completely different from a live estate tax, that makes you pay while you're alive.

The bottom-line is the same for the state in the end. But at least, people can enjoy their property til the day they die. And the heirs will have to pay taxes on a property that shouldn't be theirs in the frst place, considering they have never worked to acquire it.

[Kidlicious]

Originally posted by duke o' york


And have the tax accountants put themselves out of work?

They would just be working for the government, not the rich.

[Arrian]

The rich pay better!

-Arrian

[duke o' york]

Originally posted by Spiffor
Exactly. As such, from the taxpayer's point of view, it is completely different from a live estate tax, that makes you pay while you're alive.

The bottom-line is the same for the state in the end. But at least, people can enjoy their property til the day they die. And the heirs will have to pay taxes on a property that shouldn't be theirs in the frst place, considering they have never worked to acquire it.

But the question was whether IHT should be paid at a rate according to the total value of the estate, or according to the amount they receive.
People can still enjoy their property while they live, because they don't have to pay tax on it. Under either of the tax systems above.

And Kid, how often does new tax law get passed? Not often enough for the government to employ tax accountants - especially if they were good at it and put themselves out of work straightaway by closing all the loopholes in one go.

[Arrian]

Spiff,

The estate tax is done after the person is dead, so I'm not really sure what you're talking about...

I do think my idea is better, but not for the "enjoy your money until you die" factor. That's not a problem currently.

-Arrian

[Kidlicious]

Originally posted by Arrian
The rich pay better!

-Arrian

Yeah, but can you sleep at night?

[Kidlicious]

Originally posted by duke o' york
And Kid, how often does new tax law get passed? Not often enough for the government to employ tax accountants - especially if they were good at it and put themselves out of work straightaway by closing all the loopholes in one go.

Tax law changes every year. If it didn't change there wouldn't be much need for tax accountants. People can't keep up with it, so they need experts.

[Arrian]

Meh. Dude, I work for an insurance company and I sleep fine.

Remember, I'm a dirty capitalist.

-Arrian

[Kidlicious]

Originally posted by Arrian
Meh. Dude, I work for an insurance company and I sleep fine.

Remember, I'm a dirty capitalist.

-Arrian

I know. I would even do it. I just want a damn job.

[duke o' york]

For Spiffor:

A very simple explanation

GrandanQ dies, leaving an estate worth $1m.
His will says that he shall split his estate equally between his two sons - Ming, and rah.
The inheritance tax rate is 40%.
$1m x 40% = $400,000
So Ming and rah get $300,000 each.
If Ming and rah get $500,000 each, and are then taxed at 40%, then they will still get $300,000 each.
We were discussing whether their inheritance would be better taxed according to the amount of money they earned depending on a scale of rates.
So: 20% for $0 - $300,000, 30% for $300,001 - $600,000, and 40% for $600,001 +
This way, the entire estate would still be taxed at 40%, and under the current system they'd still get $300,000 each, but if they were taxed on their individual inheritances then they'd get
$500,000 x %70 = $350,000 each.

Was that at all helpful?