Destroying Social Security may not be the only “reform” the faltering Bush administration has trouble passing this year. Apparently, a permanent repeal of the estate tax is facing strong opposition, only this time from traditional GOP allies: the insurance industry.
Leading the charge for the life insurers, who stand to lose a combined $12 billion in premiums if the estate tax is ended, is Frank Keating, the Republican former governor of Oklahoma who now is president of the American Council of Life Insurers. “I am institutionally and intestinally against huge blocs of inherited wealth,” he says. “I don’t think we need the Viscount of Enron or the Duke of Microsoft.”
Speaking of Microsoft, the senior member of the royal family will testify before Congress this week, also in opposition to repealing the estate tax. Bill Gates Sr., the father of the world’s richest man, has suggested that the tax be retained on estates in excess of $3.5 million, a level that would exempt all but one-half of 1 percent of estates from the tax.
“We wouldn’t have an Internet or microprocessors or human genome projects without the funding from the federal government,” Gates, co-chairman of the Bill & Melinda Gates Foundation, said in an interview.
“Those are the things that make our economy so wonderful and make it possible for people to get very, very wealthy.”
Gates says his son, whose net worth is estimated by Forbes magazine to be $46.5 billion, “doesn’t have any confusion about the fact that his success has a lot to do with this country.”
The Republican response? The estate tax isn’t fair to rich people.
“The death of a family member should not be a taxable event,” says Rep. Kenny Hulshof, R-Mo., who sponsored the repeal in the House of Representatives.
I’ll tell you what isn’t fair… the record budget deficits that will be paid off by our children and grandchildren… the millions of kids who are losing their health insurance nationwide… the unfunded mandates from the ironically named “No Child Left Behind” that are bankrupting our public schools. Meanwhile, the wealthiest Americans are saving billions from the Bush tax breaks, while Dick Cheney’s Halliburton buddies don’t even get their hands slapped for overcharging the Pentagon by more than $108 million for fuel imports into Iraq.
There’s absolutely no economic rationale for repealing the tax on the top one-half of 1 percent of estates. If anything, the estate tax is pro-billionaire, as it gives the very wealthy a powerful disincentive to die.
Insurance companies for whatever reason have not always went with the most logical ideas. Fact is a person that drives with a radar detector drives 2-3 times the miles as the average driver and has less than half the accidents (Davis E Davis Automobile Magazine quoting DOT facts). Do the insurance companies support the purchase of detectors? Actually they lobby and spend money when a state pushes to outlaw the detectors. Nice try Goldy, I rest my case.
The fact that the insurance industry is against repeal of the death tax is not too surprising, considering the amount of money they make trying to shelter estates from it. On a fundamental level, doesn’t it seem unfair to double-tax estates that are comprised of after-tax assets? For these guys to be talking about the Viscount of Enron is a typical ploy to demonize. Most estates are distributed among a fairly wide band of children, grandchildren, etc. and don’t have a darn thing to do with “evil corporations”.
As for Mr. Gates Sr, let’s not ignore the fact that his law firm made its living on government money. That is where he is coming from. Take his recommendations about tax policy with a large grain of salt.
The people that should be for repeal of this tax are the heirs.
On a fundamental level, doesn’t it seem unfair to double-tax estates that are comprised of after-tax assets?
The problem is that the most wealthy will never ever have to likely pay any tax at all on inherited wealth.
If the money is placed in stock which pays no dividends and not sold, no tax is due from the increase in the stock price. Then no inheritance tax will be required to be paid.
Upon death of the owner, the stock can be sold without having to pay any capital gain tax.
Even if some tax is paid for dividends or capital gains, the rate will be much lower than the tax rate on wages.
However, properly handled, no tax will ever be required to be paid as the money passes from one generation to the next.
Meanwhile, people that work will have to pay substantial income tax and around 45 percent for federal tax alobe when one includes social security tax.
Erik
Do you disagree with my statement that “Most estates are distributed among a fairly wide band of children, grandchildren, etc. and don’t have a darn thing to do with “evil corporations”.”? For Goldy to invoke Enron in his sermon is typical liberal demonizing and does not have anything to do with this issue.
The stock you refer to was bought with after tax dollars. The gain in the stock price is also after-corporate-tax. Where is the problem here? The difference of opinion revolves around this fundamental issue: A person who buys stock is investing after-tax money. I say this money and it’s earnings should not be further taxed, because it is invested in businesses that pay tax on their profits.
GOLDY knows the only way for LEFTIST Pukes to be even remotely successful is to create boogie-men in every illogical argument to deflect attention away from the illogic.
GOLDY is the PRince of Darkness…and certifiably crazy.
Goldy..you aren’t paranoid when they’re really out to get you, huh??!!
My gut feeling is that an estate tax is wrong; I think a national sales tax would be better.
Why does Mr. Cynical-pants always try to insult people? Maybe it makes him feel better if he trolls for reactions instead of arguments. Maybe he’s trying to be an insult comic. His material is trite and insipid and rarely has a discernable point.
Mr. Cynical-pants, I bet you can’t post a real argument with real premises and real conclusions without adding insult towards someone.
Shawn @6
You ain’t doing much better; why are you so concerned with what Mr. Cynical says? If he’s trolling for reactions then he caught you.
I think you all are misunderstanding the point about the Duke of Microsoft. It is not only about corporate power per se, but rather about the exponential accumulation of wealth in individual families that is increasingly untaxed. I could talk about the public policy side, but I will leave that to others for now.
A bit of a history for those who care… A good part of the collapse of the Western Roman Empire came about because private families were able to insulate themselves and their wealth from community obligations and supporting the army. The taxation system was increasingly placed on the lower parts of society and by the 5th century, the government was forced to rely heavily on German conscripts and/or weakened defenses. When the invasions/migrations came, they simply were overwhelmed. You will be happy to know though, that the oligarchs kept their wealth and survived quite nicely under Germanic rule.
Feudal governments are defined in large part by the extent to which individuals are able to dominate governmental institutions.
Looking more towards modern times it may not be overstated to say that democratic forms of government are only possible in places where wealth is spread somewhat throughout society.
I’VE been vague here because being specific would turn this into a 30+ pp essay. And let me also say that there are no simple solutions or monocausal lessons to be taken from broad historical events.
The estate tax is a pretty modest measure to slow down the trend in capitalist societies where wealth is increasingly held by a few at the top. This situation is hostile to democracy and dangerous for our republic. And if you want to speak of fairness, is it really fair to shift the burden to those at the bottom end of society?
Nindid @ 8
Well said!!! But it won’t work for Cynical, too many big words, and he hasn’t heard it on Fox before, so it can’t be true. Cynical is among the lazy, greedy, ME people of the eighties. He is part of the what Bush calls “my base”. He could give a crap about the ever growing divide in wealth, He doesn’t see the effects on soceity, because he is about himself.
Cynical before I tell you to FOAD again, how those boys doing with those JAG law careers? Let’s get them over to Iraq to defend those Abu Graib soliders who are getting “sold down the river”. (you should understand “sold down the river” has to do with your Grandpappy movin slaves)
I know they were studying in Texas, and they were appaled by having to defend those who can’t afford representation. What are they going to specialize in defense of Gerrymandering, Ethics violators, repealing polution controls or just getting Slave ownership back on the books again?
As always Cynical FOAD
“from Each……..To Each” [Marx]. The guilding dogma of the Democrat Party.
Just a little side note, I used to live in Hulshof’s district. Two of his constituants are heirs to Sam Waltons fortune.
Why does it make sense for Joe working stiff who makes say $75K per year working his butt off to pay a certain level of taxes, while someone else who invests some money and makes the same $75K without lifting another finger to pay less, or as zip suggests, pay nothing? What message does that send? The government obviously has to get funding for its operations somehow, regardless of what level of funding you believe is appropriate. If we are going to base it on income, why should salary be treated less favorably than investment earnings?
A large portion of big estates will typically be capital gains. When property is inherited, it is taken at its current market value, regardless of the cost of acquiring it. That gain would therefore never be taxed if the estate tax is removed. I have yet to see a reasonable justification for exempting this kind of income from any taxation, which would be the end result.
There’s an entirely practical rationale for the estate tax–when you receive money, you pay tax. Calling it a death tax is stupid. You don’t pay any tax when you die. How would they collect? The tax is paid by those who RECEIVE the money. That it comes from a relative is irrelevant–it wasn’t yours, and it’s a transfer of wealth that you receive as income. When money changes hands, the government takes a cut. It’s also a dodge to call it “double-taxing;” of course it’s not–it’s triple taxing, quadruple taxing…infinite, really. The same dollar is taxed over and over, because the taxation point comes when the dollar is transferred from me to you.
Eliminating the estate tax doesn’t help the little guy, it HURTS him. All it does is shift more of the overall tax burden onto wages instead of wealth. Those who work pay more, those who simply earn money based on money they already have, pay less. It punishes industry, which I thought most Republicans were against.
Wayne @ 12
You beat me to the work/wealth argument. Nice job of stating it.
: A person who buys stock is investing after-tax money. I say this money and it’s earnings should not be further taxed, because it is invested in businesses that pay tax on their profits.
That’s true for normal people who buy stock. However, if you are wealthy and inherit it, you may not pay any tax ever on the money, now will any of your heirs.
Everytime someone dies, the stock gain can be accessed and no tax will ever have to be paid. Thus, if Bill Gates choose to, neither he nor the next 10 generation of heirs would pay any tax on his 40 Billion fortune or the gains of the stock.
“Bush’s Feds nail Global Crossings’ Ebbers!!” Wait………..Isn’t this the outfit that Terry McAwful invested 100 grand and came out with 18 million then “loaned” Clinton a million to buy the Chappaqua house? [Enron in your header opened the door for this post]
Rep. Hulshof says that “The death of a family member should not be a taxable event.” He’s right; and in fact death is not a taxable event.
Inheriting gobs of money, on the other hand, should be a taxable event.
A large portion of big estates will typically be capital gains. When property is inherited, it is taken at its current market value, regardless of the cost of acquiring it.
Yes. That’s always been the benefit of inheriting stock rather than selling it by the original owner. The heir takes it with a basis at which they inherited at. Therefore, if they sell it immediately, one they receive it, they will pay no tax on it as there will no capital gains.
All it does is shift more of the overall tax burden onto wages instead of wealth.
Yes. With the re-setting of the basis for stocks and the elimination of estate taxes the wealthy would pay zero tax while the rest of the population would pay between 0 and 45 percent tax from wages.
What I like about the inheritance tax is that it takes no money from anyone who actually earned it. With the exemptions to the tax that exist in Federal law, most if not all farm families escaped the tax, as did many, perhaps most (I don’t have the stats on this) of the families of small business owners. No tax law is ever entirely fair, but this one impresses me as being as near that mark as we are likely to get. The Republicans have been waging a propaganda war against this for years, and with considerable success, but the result of its permanenet repeal will mean an even greater concentration of wealth in a very few hands (a goal the attainment of which seems to have become a permanent plank in the Republican platform). An additonal consideration is that a permanent repeal of the estate tax may have a negative effect on the establishment and funding of foundations. On the whole I think foundations have been a positive force in our society, and would like to see them strengthened rather than weakened.
With the exemptions to the tax that exist in Federal law, most if not all farm families escaped the tax, as did many, perhaps most (I don’t have the stats on this) of the families of small business owners.>>>>>
You are wrong about thar RDC
Chuck @ 19
Can you provide evidence of ONE family farm lost due to the estate tax? Whenever challenged on this point, Republicans fall silent.
Vic Goldmans farm outside of Roy, it was sold for taxes after he died to a developer. there was a lack of liquid assets to pay the taxes so the farm was sold. Here is the best part, taxes were not collected on the sale amount but the assessed value! Now it is a bunch of houses.
Chuck @ 21
Are you saying the IRS threatened to foreclose, or the family decided to sell?
Im saying that it was sold to pay the inherintance tax, the kids wanted to maintain the family buisiness but didnt have enough liquid (money) to pay the IRS
Chuck @ 21
Forgive me, Chuck, if I don’t take your word for it. When was Vic Goldman’s farm sold? Was it sold to satisfy delinquent property taxes, rather than for the heir(s) to settle inheritance taxes? When was it sold? If it was sold to pay inheritance taxes, were they Federal or state taxes owed? Did the heirs want to continue running the farm as a family business?
I agree with torridjoe @ 20….In recent times, say about 15 years, Republicans have repeatedly used the family farm story to push the repeal of estate taxes, but have never, to my knowledge, produced believable documentation for the claims.
Chuck @ 24
If there is one thing I’ve learned in connection with reading this blog, is that you saying something is true, doesn’t make it so (to be fair, the same can be said for many others as well). Where is the farm located and when was it sold?
Chuck @ 24
So it wasn’t lost, it was sold. We’re still at zero.
It has always amazed me how when a late term abortion debate comes up you guys will bring up the elusive 95 year old blind diabetic woman that got pregnant and will die if she has a child, and I bring up the old mans farm that used to be across the street, and you guys have a reality problem. By the way I dont know the exact date but it was 7-8 years ago.
Chuck @ 28
it’s not the left wingers who claim late term abortions are being done, it’s the right wingers. What’s your point? And just “bringing it up” doesn’t do anything–the question was, is there any documentation of a family farm being lost due to estate tax?
Chuck @ 1
What do radar detectors have to do with the estate tax? Oh wait, I get it now, there’s a connection between speeding and death! Insurance companies WOULD be against enabling speeders and more people dying, wouldn’t they?
zip @ 2
You’ve got a point, zip. The estate tax isn’t really necessary to level the playing field. Experience teaches us that the dissolute children of the idle rich usually manage to go through the whole wad in a generation or two, even without any help from the tax man.
The stock was bought with after-tax dollars? Uhh, noooo … it was created on paper, its growth in market value has never been taxed, and as Erik points out @ 3 it passes to heirs capital-gains-tax-free.
Why should heirs get capital gains they didn’t earn tax-free, while the entrepreneur who created the wealth is taxed if he sells his stock, and investment income and wages are taxed? What’s so special about heirs that they should be the only people exempt from taxation?
Blog Spammer in Hawaii @ 10
When a person’s solitary functioning brain cell can’t think of anything else to say, he can always fall back on calling ’em a “commie”.
Wayne @ 12
Where can I get one of those working stiff jobs that pays 75K? As a guvmint hack attorney I was never paid remotely close to 75K, even before they started deducting taxes, retirement, health insurance & stuff. Four years of college, three more years in law school, and graduate school was a dumb idea; I should’ve been a carpenter or beer truck driver.
TJ @ 13 …
… has nailed the issue, as usual. There has never been a “death tax” on the books; that’s just a bombastic label pasted on the estate tax by right-wing propagandists trying to deceive the voting public. Remember the state-estate-tax-repeal campaign they waged here in Washington state? Remember the billboards with the picture of granny and her furniture piled on the curb in front of her little clapboard cottage? Like everything else emanating from the right wing, it was bullshit, because Washington didn’t tax estates under a million bucks. The righties use scare tactics and lies to bamboozle the populace because their claptrap schemes benefit at most 5% of the people — at the expense of the other 95%.
Blog Spammer in Hawaii @ 16
Ebbers was CEO of WorldCom, not Global Crossing. First get this part right, then I’ll check out the rest of your (probably false) post.
Chuck @ 22 et seq.
It sure sounds like right-wing-blog-type stuff, but I can’t find anything about “Vic Goldman’s farm” on the internet, not even by googling it. Maybe he got this tidbit from Carlson’s show?
Don@30
No it came from across the street from where I live, I knew Vic, and he was a good freind. He had an operation that was between 250-300 dairy cattle, and I doubt you will see much about it on the net, as he definatly wasnt puter literate.
Don@30
Let me take you by the hand Don, I was pointing out that because the insurance companies support something, it doesnt make it a logical thing.
Chuck @ 32
You can count on me to be suspicious of anything that insurance companies want, and especially when taxpayers are subsidizing it.
Chuck @ 28
This debate over Mr. Goldman’s farm is really beside the point, because the law can be written to exempt whatever the lawmakers think should be exempted as good social or economic policy.
This debate is really about you, Chuck. I am befuddled by your comment at 28. I just can’t figure out what your point is, or how it relates to the questioning about Mr. Goldman’s farm. Furthermore, you didn’t answer the question concerning why the farm was sold (to satisfy estate or delinquent property taxes). But you did say it was across the road from you, so I assume it is in Pierce County, and that it was sold 7-8 years ago. If you can be more precise about when it was sold, we may be able to check property records for Pierce County and check the soundness of your recollection. I don’t think you would deliberately lie, but I do think you often get the facts confused.
Chuck…perdone me. You did say in an earlier post that it was sold to satisfy inheritance taxes to the IRS. This means you are certain that it wasn’t the satisfaction of delinquent property taxes that were at issue, and that it was the Federal estate tax that required the farm to be sold. My question now is: are you sure of this, or is this a hazy recollection that popped into your head and seemed like it would be a good comment to throw into the mix?
I am surprised that since the Democrats seem to think digging up dead people for governor votes are a good thing, that they are not standing at the mortuary grabbing the last gold teeth and jewelry (for the Children of course). Taxing estates (money that has already been taxed once) a second time is just plain wrong and bad business!
GS @ 36
The Democrats did not “dig up” a single dead vote for governor. Of the 45 “dead votes” asserted by the state GOP (there probably aren’t that many due to mistakes and counting errors by BIAW’s amateur researchers), not a single one was solicited by, or cast the request or behest of, either political party. These were individuals acting on their own initiative, and we may yet find out that the majority (perhaps the overwhelming majority) of the actual “dead votes” were cast for Rossi.
Your comment about taxing estates is equally off the mark. When a person receives an inheritance, that is new income to the heir receiving it, on which the heir has never paid any tax. The tax treatment of income from inheritances is extremely favorable compared to the tax treatment of other types of income.
Chuck @ 28
Yes, it wouldn’t surprise me a bit if the Republicans claimed that a 95 year old blind diabetic woman had a partial birth abortion. Most of what they say is no more believable.
GS @ 36
The double taxation talk is nonsense. In our economy, money is taxed many times. Several posts here address this red herring.
Explain to us why taxing someone on money that person received but did not earn is just plain wrong, and why it is bad business.
Don@38
No Don it was the democrats that drug that beauty out some years ago to combat an pro life initiative that was facing the state voters. the democrats said that the initiative would kill this lady because it didnt provide for a life and death situation…(it did)
RDC@35
no hazy recolection here, I knew the family well and helped move Vics kids out and sell the stuff…depressing time indeed.
Goldy –
You nailed it (you may want to bookmark this):
“There’s absolutely no economic rationale for repealing the tax on the top one-half of 1 percent of estates. If anything, the estate tax is pro-billionaire, as it gives the very wealthy a powerful disincentive to die.”
If we were talking an estate worth $500,000, or even $1.5M or $10M with three inheritors, I would ask why we would tax it. True, my gut instinct is to oppose taxes, but there are some people like Teddy Kennedy who need to keep their progeny from living and dying on old wealth and older ideas…
The tax treatment of income from inheritances is extremely favorable compared to the tax treatment of other types of income.
Yes, it is zero. Some want the billionaires to pay absolutely no federal tax ever which would be near the case with the repeal of the estate tax.
On the Estate Tax you are wrong! The Estate (therefore the dead person’s estate) has to pay this estate tax out of the estate before anyone else gets a nickle. The heir does not pay tax on the money they recieve! There are ways around these tax happy thieves and I have taken measures to assure my inheritance goes where I want it to! They have no rights to it!
And I also suppose the 660 provisional ballots mistakingly run through the machines and admitted to by even Dean Logan himself were all for Rossi even if they came from King County! Got some facts around that you would like to share with us?
GS @ 44
“The heir does not pay tax on the money they receive.”
A will states Son of Joe is entitled to $1m, disbursed from the estate. When SoJ receives his disbursement, magically it is less than the contract amount. Just because it is taken off the top doesn’t mean the receipts aren’t taxed. It’s not income you declare and pay taxes on after receipt, that’s true. But just because you’re not the one calculating and paying the tax, doesn’t mean you’re not being taxed.
Interestingly, however, this argument makes a fool of anyone who tries to defend the dividend exemption on the grounds of “double taxation.” The company is taxed on profit, and then the shareholder is taxed on his disbursement (when he takes it). But under the GS theory, he’s not taxed because it was the company who got taxed, not the shareholder. So one of these, you have to give up on. :)
Actually, I’m against dividend exemptions because not only is it not double taxing, it’s not even your money–because the company doesn’t have to return it as dividends, or declare that they will IIRC, when they pay tax on it. They could reinvest or pay debt instead. But with a will, you have a contractual entitlement to the money. It is absolutely subject to liens and claims before it’s doled out, you’re correct. But that doesn’t mean it wasn’t yours the minute Dad died. It was yours, subject to. Company profits are not yours until they are yours.
Marks @ 42
Does Ted Kennedy have progeny? I’d be more afraid of the offspring of some of your rich and wacky neighbors there in Texas. But whatever. I’m happy to note your admission that there are times when taxes are justified, even if your justification is, well, a little like your neighbors there in Texas.
On the Estate Tax you are wrong! The Estate (therefore the dead person’s estate) has to pay this estate tax out of the estate before anyone else gets a nickle.
Yes. However, he proposal is to eliminate the estate tax.
There are ways around these tax happy thieves and I have taken measures to assure my inheritance goes where I want it to! They have no rights to it!
Unless you have over 10 million, you should have problem avoiding all inheritance tax unless you are 90.
I would ask why we would tax it. True, my gut instinct is to oppose taxes, but there are some people like Teddy Kennedy who need to keep their progeny from living and dying on old wealth and older ideas…
Lets keep taxes low. However, having people who make between 30 and $100,000 pay 40 percent of their pay in federal taxes and not having billionaires pay anything isn’t fair. Work should be encouraged, not penalized.
First step : determine the total tax burden you believe is reasonable.
Step two : determine who should paying what portion of the total taxes you have determined reasonable from step one.
Don @ 37
RDC @ 39
You both characterize the estate as “income” or “money received but not earned” which is not true. Consider the estate as assets that were already earned and were already taxed when they were earned. Just like the money in your bank account. Taxing this money when it changes hands at your death is not fair, because the “estate” is the remnant of your taxable earnings.
OK so explain for me this one! I inherited a piece of property from a woman who paid 60k for it. That was her boot price. When I inherited it it was worth 340k. The boot went up to 340k when I inherited it. I was left with zero tax due on this inheritance. But the estate paid over 1 mil in inheritance taxes. So did I get taxed (I did not pay a cent) or did the dead person get taxed twice for the money they saved (which had already been taxed) and left to their heirs.
GS @51,
By “1 mil”, do you mean 1 dollar per thousand ($340?) Are you sure this wasn’t just a fee for changing the title?
Chuck @ 40
Source please? If any Democrat thinks a 95-year-old can get pregnant, I need to notify Paul Berendt about this situation.
GS @ 44
Technically you are correct, but now you’re making lawyer noises. To a judge or lawyer, an “estate” is a useful concept for the purpose of transferring money from Person A to Person B. However, even though it is a “legal person,” an estate has limitations. It estate can’t think (a human has to do its thinking), get drunk, get laid, or have a good time spending your former money. It is merely the process by which your heirs receive money that, in yet another legal fiction, the tax code says is not “income” but “inheritance.”
GS @ 45
It’s possible they were all for Rossi, but the odds of that are infinitesimally tiny. However, the odds they were for Gregoire, Rossi, and Bennett in the same proportion as the rest of King County are about the same as the odds that the demographics of those 660 voters are identical to King County’s demographics.
zip @ 50
If you sell your car through the want ads, and I buy it, I’m receiving an asset you purchased with income that has already been taxed, but I have to pay the Use Tax on the sale price anyway because a taxable event occurs when the car’s ownership changes.
When a house or commercial building is sold in the real estate market, certain taxes are charged, because the change of ownership is a taxable event.
When an employer pays wages to an employee, a taxable event occurs because ownership of the money has changed.
Likewise, when an estate passes to heirs, its ownership changes, and a taxable event occurs.
The concept of a change of ownership triggering taxation is a very consistent theme throughout all of our tax codes.
Why should property be exempt from taxation when it changes hands through inheritance, when most other property or income transfers are taxed? What’s so special about inheritances that they should be exempt, when paying wages, or buying and selling cars, houses, and factories is not?
Look, nobody likes taxes. It would be wonderful if we could receive government services free. It would be even more wonderful if we could get cars, houses, and vacations free. Sorry, it just doesn’t work that way. Government services cost money, so government needs tax revenues to provide them, and we have to figure out a way to tax ourselves that provides the required revenue and is more or less fair. It would be nice if we could all agree on a tax system, too, but that’s impossible because there are always some freeloaders who want to do everything with OPM.
We don’t have many of those in the Democratic Party, but the GOP is full of them. Freeloaders, I mean.
Nope Goldy, I mean the estate had to pay 1 million in taxes before it was distributed. There were several pieces of property, Cash, and Personal property. And I will say this from my experience in that estate dealing. Real Property (like the piece I inherited) is very different with respect to how it is treated in an estate from Personal Property and cash assets. So for instance, if you leave a 1 mil piece of property to one kid and 1 mil in cash and personel affects to another, it most likely will not produce an even distribution to these children. The estate taxes would come out of the cash assets and personal property of the one childs, and the real estate given to the other child would most likly pass without taxation. Or at least not in any kind of equal distribution. Live and learn.
GS @ 51
What does it feel like to be related to someone who left a big enough estate to own $1 million in estate taxes? I’ll never know, but I’m just curious to know what it feels like.
Well okay, let’s get serious here. We the patrons of HorsesAss may feel called upon to take up a collection to send GS to law school if he keeps making lawyer noises. If he’s going to make lawyer noises, then he might as well be a lawyer, and hang out with other lawyers so that someone might understand him.
Being as I’m a lawyer, this is really difficult, but let me attempt to say something that makes sense to people who have some sense, namely those who had the sense to not go to law school (a group which doesn’t include me).
The moment you die, you no longer have any possessions. How can a dead body possess anything? Your former possession are up for grabs. They go into the legal system’s safekeeping until it awards them to someone else. How’s that work for you?
The dead woman who left you the 340K piece of property didn’t pay any taxes on this transfer. How could she? A dead person can’t pay taxes any more than a tree can pay taxes. Clever lawyers may be able to create the idea of a dead person or a tree paying taxes — but dead people and trees don’t REALLY pay taxes. Adults are easily confused by lawyers, but most 3-year-olds see through this one right away.
An estate, which is merely a concept incapable of thought or feeling, can’t pay taxes either. Judges and lawyers find it useful to pretend that estates pay taxes, but NOT REALLY.
Only LIVE HUMAN BEINGS can pay taxes!
How’s that for a “eureka!”?
In order to figure out WHICH live human beings paid the $1 million of taxes on the dead woman’s estate, let’s try that old standby trick — let’s FOLLOW THE MONEY. Hmm, let’s see, if the government didn’t get the $1 million it would go to … the heirs! So, the HEIRS PAID THE TAXES! (
Zip @ 50
Don at 56 has responded to most of your comment better than I could do, but one correction is in order. I did not say that the money had not been earned. I said the money had not been earned by the person inheriting it. Big difference. The exemptions written into the Federal Estate tax laws were quite large. I’m not certain of this, but I believe the exemption was at $1.5 million last year (it was at least that much; it may have been more under varying scenarios). I just can’t bring myself to feel sympathy for anyone crying foul when after having a large amount of money handed to him on the proverbial silver platter, some portion is returned to the society out of which it was created in the first place. We are not talking here about depriving the kids of a good education or kicking folks out of their homes; we are talking about large amounts of money being handed over to people who are likely no more deserving than thee or me.
Actually it feels really really good to be related to a person who is worth more than 1 mil due to her hard work and frugal savings Thank You! In fact I was related to several people who through their hard work and savings were worth well over that. I also learned how to get there from my hard work and much harder savings. I did not get handouts since I had been a prudent saver and not piss it away spender, no one thought I needed them. I did not think I needed them either.
No I am not an attorney, nor would I ever want to be. But having been through an estate filled with greedy attorneys feeding from the frenzy, I did happen to learn a few things worth sharing.
I did not pay any taxes on the Land inheritance I recieved that is all I said. No More! No Less!
I did say very clearly that someone else could easily get stuck with the tax bill. I didn’t, and I was a major Heir!
The estate tax check is not not written in the name of any heir. It is written in the name of the estate, and taken from that account before it is distributed to the heirs!
Call it what you like, it is double taxation of already taxed money. They are not intitled to it! Period!
Don@53
It wasnt my claim it was the democratic party claim, on television as well as radio…I thought you were an educated man.
Don@58
Wrong, if the taxes were taken from the top, before the heirs got the inheritance then the deseased one actually paid said taxes…and I thought you were a certified liar…I mean lawyer…
GS @ 60
Who is “they”? Do you mean anyone not smart or hard working enough to have picked the right family to have been born into?
They is us (represented by the government) and I can’t think of a single reason why we are not as entitled to the money as anyone else. It is, after all, returning it to its source. For all the verbiage and invective conservatives spill about the ills of entitlements, one would think they would be leading the battle to eliminate or at least cut back on this one.
Chuck @ 61
I must’ve missed that issue of the National Enquirer.
Chuck @ 62
Let’s try this again. No tax was due while the woman was alive. The heirs got $1 million less because of the tax. If a 3-year-old can understand the tax comes out of the heir’s hides, why can’t you?
GS @ 60
I’m fairly certain Congress is entitled to tax estates if it wants to. If it’s unconstitutional, we would have heard by now.
Don@65
If there were no heir to claim the estate, the tax would still happen.
Don@65
Don I suppose you missed the democrat commercial insinuating that Bush was somehow responsible for dragging someone with a chain hooked to a pickup as well?
Chuck @ 68
Yeah I missed that one. I’ll take your word for it, though. Shrub can consider it payback for the Swift Liars ads.