Estate Tax.

[StruckingFuggle]

I had an interesting thought in the Capitalism thread.

Estate tax.
The passing of wealth from one generation to the next helps to propegate classism and casteism in society, moving towards funding dynasties.

On the one hand, this is bad. It also results in wealth not coming through merit (hello, Waltons...) ... on the other hand, just because my parents died I don't think the Government should take the things they bought, or tax my parents for dying - and the money should be used to help the widowed family or orphaned children stay on their feet.

So what do you all think of it?

My thought was simple - all liquid assets, and liquifiable assets, such as bank accounts, stocks and bonds, are taxed. However, all material goods and real estates are left untouched. But then I realized, that leaves no money for the family ... so perhaps the liquid assets could be taxed, but only those assets above a certain regressive (as in, the more money we're dealing with, the smaller % you get .. or is that progressive?) limit is taxable. That would help to devestate dynasties, and yet leave people the ability to live on in the tragedy. I'm not sure, just tossing the idea out there ... like a morsel of bloody meat to ravenous wolves. Now, rip it apart.

[Fixer]

Ok, business lesson for those who do not know:

When a person with wealth begins to 'plan' for their death, they set up trusts for their money (independent entities). This protects their liquid assets.

They also perform an exchange for all real property (real estate and permanent attachments) to their heirs while possessing a 'life estate' on the property, "I am selling this property to my son/daughter. They then sell me a life estate in that same property, for the same price I sell them the property to begin with. Because it is all ocurring within the family as a 'gift', no taxes need to be paid." What the life estate does is essentially says is that upon the death of the individual who owns the life estate, the life estate dissolves and title reverts back to the original owner (in this case, the son/daughter).

Because of these basic legal devices, it is generally possible for people to pass along nearly all of their assets to their children before their demise, still have access to said assets for their lifetime, and avoid taxes almost altogether. It is also completely legal.

[Dr. Tower]

I thought the level on gifts was $10,000 per yer before it got taxed, but that gifts above that amount could get taxed.

[Deacon]

Fixer is correct. The politicians who scream and shout about how eliminating the highly questionable of double, triple, quadruple (and often even higher levels of) taxation, such as an estate tax, being a device to embolden and strengthen and only benefit the rich are either shockingly ignorant or unscrupulously trying to use the general public's ignorance for their own selfish ambitions.

You could *double* the estate tax, and who would it hurt? Not the rich. The rich actually manage their assets, not just leave it laying around for the government to steal. The only people it would hurt are the lower and middle classes, from whom the government actually derives almost all estate tax income.

[Fixer]

[quote="Towerboy";p="176935"]I thought the level on gifts was $10,000 per yer before it got taxed, but that gifts above that amount could get taxed.[/quote]
Between family members those laws do not apply.

[Martin Blank]

US estate tax law for citizens and residents

US gift tax law

[StruckingFuggle]

Hm. Good point. Of course, if managing the assets were either impossible or pointless, then, there's so much 'managed' unreachable assets among the wealthy that the % rates could be chopped down, hurting the poor less while providing for MORE money, no?

[thearchgu]

See this is why communciation is important There are many things people do not know about say - estate taxes . . . .

Just make sure you have it set up before you die :-p

[Buchwald]

All taxation is immoral, period.

This, however, is especially immoral. The tax is, essentially, taxing those assets (property, finances, etc) which have already been taxed. The principle owner has already paid his/her fair share of income, property, whatever tax, and now you're going to make their heir pay another tax? It baffles me.

My parents own a summer/vacation home in New Hampshire. Down the street from that home was a small corner store called Robbins. When the owner died, he passed the store on to his daughter. However, because of the estate taxes, she had to sell the store to pay off the government. Now, it's a kayak shop run by a couple of Orange County pricks.

[mikehendo]

estate taxes really do piss me off.. How many more times do we have to hear about a farmer's children losing thier father's farm, or someone losing a family run business because they cant afford the taxes. The government already taxes farms and businesses while the parent is still alive. Damned democrats, wanting to keep this tax upheld.

Oh and Buch, all taxes arent exactly immoral, how else is the government supposed to waste all of our hard earned money

[Martin Blank]

O'Malley sold the Dodgers a few years ago to Fox mostly because he feared what would happen if he died and his family had to come up with the money on a $400 million piece of his estate.

Not all taxes are immoral. Some taxation has to happen to fund critical activities -- how else would police, fire, etc, function?

[Buchwald]

User fees.

If you don't want it, you shouldn't have to pay for it.

[Fixer]

[quote="Buchwald";p="197744"]User fees.

If you don't want it, you shouldn't have to pay for it.[/quote]
That's my road you are using. When can I expect the check?

There are also pollution controls, laws that need to be enforced, consumer protections... these all require money to enforce. The companies are not going to pay these because they are nice. Who do you propose pays for them?

[Deacon]

Taxation in and of itself is not immoral or evil. It is necessary for a fully functioning government. The problem comes when you define exactly what defines a fully functioning government and how those taxes are assessed and collected. Multiple taxation is wrong, in my mind, and perhaps unconstitutional (though I haven't researched this myself), but it happens every day.

Here's an interesting thing regarding tax, however:

Amendment XXIV

Section 1. The right of citizens of the United States to vote in any primary or other election for President or Vice President, for electors for President or Vice President, or for Senator or Representative in Congress, shall not be denied or abridged by the United States or any state by reason of failure to pay any poll tax or other tax.

Section 2. The Congress shall have power to enforce this article by appropriate legislation.

What's interesting about that is that the ammendment was designed to prevent descrimination against poor people (specifically blacks, at the time). There were poll taxes put in place that would prohibit people from voting if they couldn't come up with the money. In this case, however, it says specifically "by reason of failure to pay any poll tax or other tax." To me that says that someone who has failed to pay income taxes and is now a convicted felon could easily argue that he has a right to vote *even though* he is a convicted felon, due to the "or other tax" language in that constitutional ammendment.

Yes?

[Fishmonger]

I have a close friend whos grandfather died recently. He had around $500,000 in liquid assets. In November when the court precedings are done, his Mother (An only child) will recieve all of his assets. In total she gets a small property in Fullerton and $80,000.


Craig